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    Siscilia Sbarbero (otherwise called Matilda Barber), guardian, &c., v. Alexander A. Miller et al.
    [Decided January 8th, 1907.]
    1. Judgments are presumptively only conclusive against parties in the character in which they sue or are sued.
    2. The necessity of mutuality in estoppels by record requires that a court should not hold a judgment conclusive in favor of a person, unless it would be equally conclusive against him.
    3. A judgment is conclusive by way of estoppel only as to facts without the existence and proof or admission of which it could not have been rendered

      4. A judgment in favor of plaintiff in ejectment, defended on the ground that his title was founded on a conveyance executed by one not having sufficient mental capacity, is not res judicata that the grantor was non compos, although the jury, in a special finding, so found. The judgment being entered for plaintiff, this element did not enter into it.
    5. In a suit to set aside an assignment of a leasehold interest on account of the mental incapacity of the assignor, the finding of a committee in lunacy, a few months after the conveyance, declaring the assignor a lunatic, is only prima facie evidence of his incompetency.
    (j. In a suit to set aside an assignment of a leasehold interest on the ground of the mental incapacity of the assignor, evidence examined, and held to fail to show that there was any such impairment of the assignor’s mind as made him incapable of understanding in a reasonable manner the nature and effect of his acts or of the business that he was transacting, essential to warrant a decree of cancellation.
    7. In a suit to set aside an assignment of a leasehold interest on the ground that the purchaser paid less than the market value for it, evidence examined, and held not to establish that there was any market value ot the leasehold interest in excess of what was paid for it.
    Heard on bill, answer, cross-bill, answer to cross-bill and replications.
    This is a bill filed by John Barber, a lunatic, by Cecilia Matilda Barber, his guardian, against Alexander A. Miller and another. The bill charges that on the 26th of June, 1903, John Barber, then being in a state of lunacy, did, by deed of assignment, transfer unto Anna C. Miller a certain lease of property known as No. 879 Broad street, Newark, New Jersey, and that the said Anna C. Miller, on the 1st of July, 1903, assigned said lease to Alexander A. Miller; that on the 10th of October, 1903, Matilda BarbeT was appointed by the orphans court of Essex county, as guardian of John Barber, a lunatic, and by the proceedings in lunacy it was, among other things, determined that the said John Barber was, at the time of the said proceeding, namely, on the 9th of September, 1903, a lunatic without lucid intervals, and that he had been a lunatic for the space of two years and six months then last past; that John Barber, at or about the date of the conveyance of the leasehold, as above stated, disappeared from his home in the city of Newark and has never been heard of or from since; that the said Alexander A. Miller has collected the rents of the premises from the 1st of July, 1903, and is still collecting the same; that Alexander A. Miller was informed before the transfer of the lease by John Barber to him of the lunacy of the said John Barber and was thoroughly aware of the lunacy before the transfer was made; that said leasehold is valuable, having a market value of about $10,000, and that said John Barber received from Miller for the said property much less than its true market value, to wit, $3,500 or thereabouts; that the guardian made legal tender to Miller of the sum of $3,500 on the 27th day of October, 1904; that Miller, on or about the 1st day of January, 1904, brought an action of ejectment in the supreme court of this state seeking to oust said Matilda Barber and others, the wife and children of the said John Barber, from the possession of the second and third floors of the said building; that said suit was tried, certain questions were submitted to the jury, which found a special verdict, which special verdict is set out in full in the bill, and that on motion in the supreme court a verdict was directed to be entered for the plaintiff therein, Miller; that an opinion was filed in the supreme court directing the entry of the said judgment, which opinion is set out in full in the bill.
    The complainant prays that the said lease from John Barber to Miller may be avoided and Miller be directed to reassign the same to the complainant; that a reference be had to a master to ascertain the amount due from Miller to the complainant, and that an injunction issue restraining Miller from issuing execution in the ejectment suit aforesaid.
    To this bill Anna C. Miller files an answer admitting that she took title to the lease from Barber as a convenience for the defendant Alexander A. Miller, and that she has no interest.
    Alexander A. Miller answered admitting the appointment of the guardian, the purchase of the leasehold by him, denying, however, that John Barber was in a state of lunacy at the time, or was in any way affected mentally; sets out that while he has collected some of the rents, the family of John Barber has collected a much larger proportion of them; specifically denies that he had any knowledge, or that there was any implication on his part of knowledge of the alleged lunacy of John Barber; denies that the market value of the leasehold was $10,000, and asserts that the amount paid, $3,500, was a full, fair and bona fide value; admits that some tender was made, but denies knowledge of the amount; admits the ejectment suit for the second and third floors of the building; admits that the supreme court filed an opinion, but denies its relevancy to this suit; sets out the affirmative defence of the defendant, and prays to be dismissed.
    By way of cross-bill he asks an account of the rents received by the complainant and a decree that she be required to pay the same to him.
    The answer to the cross-bill and the replications are formal and do not require specification.

      Messrs. Munn & Church, for the complainants.

      Mr. George H. Peirce, for the defendants.
   Garrison, V. C.

(after stating facts).

It will be observed that while, in the charging part of the bill, the complainant alleges that she tendered, as guardian of the alleged lunatic, to Miller, the purchaser of the leasehold, the consideration paid by Miller for it, namely, $3,500, she does not in the prayer of her bill ask that the status quo be restored by the conveyance back to her of the leasehold interest, and the payment by her of the consideration received for it. She prays that the assignment of the lease from Barber to Miller be avoided, and Miller be directed to reassign to her, and that a reference be had to ascertain the amount due from Miller. This prayer must have been based upon the theory that she would prove, as alleged in the bill, not only that Barber was insane, and that an inadequate price was paid for the property, but also that Miller had knowledge of Barber’s insanity, and therefore was not entitled to be reimbursed the consideration money paid by him. There was some attempt to prove that Miller had knowledge, but it entirely failed, and I shall therefore treat the case as if it were one in which the complainant prayed for a restoration of the status quo.

Tlie initial matter to be dealt with arose during the progress of the final hearing, and the court disposed of it without giving the reasons for its ruling; and since, if the court erred in such ruling, a correction thereof will be dispositive of the case, I think it best to take up this subject first.

Before the complainant introduced any oral testimony she put in evidence the record of the ejectment suit in the supreme court. At the time of putting this record in evidence counsel for the complainant remarked that he thought it operated as a bar or estoppel against the defendants, and the court inquired whether he desired to rest upon it as such and therefore not to introduce any further or other evidence excepting as to tender. Counsel for the complainant not being willing at that time to take that position, proceeded with the examination of his witnesses and took testimony tending to prove the insanity or lack of mental capacity of. John Barber, the knowledge or implication of knowledge thereof on the part of Miller, the value of the leasehold and the tender made by the complainant to the defendants.

When the defendants began their case and sought to interrogate a witness concerning the mental capacity of John Barber an objection was interposed by the complainant to such evidence upon the ground that the judgment in the ejectment suit was a bar or estoppel. The record of that suit in evidence may be briefly summarized as follows: Miller sued in ejectment for the possession of the second and third floors of the premises No. 879 Broad street, and declared upon the assignment by John Barber of the lease in question. He made as defendants Cecilia (or Sisillia) Barber, Catilda Barber and Elizabeth Barber. The defendants pleaded not guilty. It is quite evident that their defence-was that John Barber, at the time of selling the lease, was insane to the knowledge of Miller, that the latter paid an inadequate price, and that the deed of assignment was void. The trial court left to the jury certain questions of fact and requested special findings. The jurjr, among other things, found that on the day of making the assignment John Barber was mentally incapable of understanding the nature and effect of the transaction in which he was then engaged; that Miller did not know at that time, nor did he have such knowledge as would lead a reasonably prudent person to the belief, that said John Barber was mentally incapable of understanding or appreciating the nature and effect of the transaction in which he was then engaged; that the price paid by Miller was not the fair market value at that time, but was $1,500 below such fair market value. The commission in lunacy proceedings were adverted to, and the fact that

“in pursuance of said proceedings, Matilda Barber, one of his daughters, who is also a defendant in this action, was appointed as guardian by the orphans court on October 10th, 1903, prior to the beginning of this action,”

and that said Matilda Barber, together with her mother and brother and sisters, were in actual possession of said second- and third floors at the time of the beginning of the suit, and that no formal tender of any amount to Miller was ever made by or on behalf of John Barber or his guardian.

Upon motion in the supreme court a judgment was ordered to be entered upon this special verdict in favor of the plaintiff.

The contention of the complainant in the suit at bar is that the judgment just referred to in the ejectment suit is a bar or estoppel, or, to properly phrase the matter, is conclusive evidence between the parties hereto, and establishes that John Barber, at the time of the assignment of the lease, was non compos, and therefore that subject is not open for litigation in the pending suit.

The defendant replies, first, that the prior suit was not between the same parties, since Matilda Barber, by whom John Barber brings this suit as his guardian in lunacy, was not a party therein as guardian, nor was John Barber a party.

It is true that judgments are presumptively only conclusive against parties in the character in which they sue or are sued. McBurnie v. Seaton, 111 Ind. 56. And there are numerous instances in which one who was a party in his individual capacity is not bound by the judgment in another capacity, such as executor, trustee or guardian, and vice versa. Davis v. Davis, 30 Ga. 296; Erwin v. Garner, 108 Ind. 488; Lander v. Arno, 65 Me. 26; Terrill v. Boulware, 21 Mo. 254; Rathbone v. Hooney, 58 N. Y. 463; London v. Townshend, 112 N. Y. 99; Coffin v. City of Brooklyn, 116 N. Y. 165; Collins v. Hydorn, 135 N. Y. 320; First Notional Bank v. Shuler, 153 N. Y. 178 et seq.

The absolute necessity of mutuality in estoppels by record requires that the court should not hold a judgment conclusive in favor of a person unless it would be equally conclusive against him.

Parties in the capacity in which they sue and are sued are undoubtedly bound; privies, likewise. But this -is not the limit to which the courts have gone. The courts have held that where a person was either a party to the record in some capacity, or had so allied and identified himself with a party as to have had his rights submitted by his consent to the determination of the court in a given case, he is bound by the judgment as if he was an actual party to the record, and if an actual party to the record in some capacity, is bound in every capacity in which his rights were affected.

Furthermore, in the suit in hand, I find that the supreme court refers to the fact that Matilda Barber was appointed the guardian, and recites that she was in actual possession of a part of the premises, and as guardian requested a reconveyance, and offered to return the amount of consideration upon a proper accounting. Miller v. Barber, 68 Atl. Rep. 276 (Supreme Court, 1905).

I do not, therefore, rest my ruling, with respect to the admissibility of this testimony, upon the fact that Matilda Barber, as guardian, was not a party defendant in the ejectment suit.

I assume, for the purpose of this ruling, that the prior suit was one in which the complainant here, as well as the defendant here, were each parties in the capacities in which they stand in the pending suit.

I ruled that the testimony offered by the defendants as to the mental capacity of John Barber was admissible, and that the judgment in the ejectment suit was not conclusive evidence as between these parties that John Barber was mentally incompetent at the time in question.

The fundamental principle of res adjudicata is that the subject-matter must have been settled in the previous litigation between the same parties.

“A judgment estops the parties only as to the grounds covered by it and the facts necessary to uphold it.” Herm. Estop. 105 § 105. “Even parties and privies are bound only so far as regards the subject-matter then involved, and are at liberty to raise the same questions in another distinct controversy affecting a distinct cause of action.” Herm. Estop. 124 § 118. “And they will not be concluded unless the judgment necessarily involved the matter which it is sought to be held as conclusively settled by the litigation.” Herm. Estop. 291 § 252 et seq.

A verdict and judgment, therefore, are conclusive by way o£ estoppel only as to the facts, without the existence and proof or admission of which they could not have been rendered. Herm. Estop. 294 § 254. See, also, Coutant v. Feaks, 2 Edw. Ch. 330; People v. Johnson, 38 N. Y. 63; Cauhape v. Parke, Davis & Co., 121 N. Y. 152; Gilcreast v. Bartlett (N. H.), 64 Atl. Rep. 767; Freem. Judg. (3d ed.) 305 et seq.; Mullaney v. Mullaney, 65 N. J. Eq. (20 Dick.) 384 (Court of Errors and Appeals, 1903).

In the case of Hawks v. Truesdell, 99 Mass. 557, it was held that where the special findings of a jury in an action at law were not confirmed by the judgment of the court, nor involved in the general verdict, they were not conclusive of the facts found, and either party might introduce evidence concerning the subject-matter in a trial before another jury in the same suit or in another suit.

In Springer v. Bien, 128 N. Y. 100, the court said: “Neither the verdict of a jury nor the findings of a court in a prior action upon the precise point involved in a subsequent action between the same parties constitute a bar unless followed by judgment based thereon, or into which the verdict or finding entered. It is the judgment which constitutes the bar, and not the preliminary, determination of the court or jury. So, also, and for obvious reasons, although judgment has been entered, the judgment does not prevent the relitigation of any irrelevant fact, although it may have been litigated and found in the prior action.”

In the situation in hand it is obvious that it was not necessary to settle that John Barber was insane in order to sustain a judgment in favor of Alexander A. Miller against the defendants in that suit that he was entitled to the possession of the property. In fact, quite the contrary is the case, because if John Barber were sane there was no suggested defence to Miller’s action.

The things, therefore, which it was necessary to find in favor of Miller were a title from Barber, and innocence of any knowledge on his part of any incapacity on Barber’s part. Since the defendants failed to prove that Barber was insane to Miller’s knowledge, they failed in their defence, and I do not see how it is possible to hold that by thus failing they established, as between themselves and Miller, any part of that which they must have proved to have succeeded.

That judgment may properly be said to show that proof of Barber’s capacity in that suit was immaterial and. irrelevant.

Without proof that Miller was chargeable with knowledge of Barber’s incapacity, proof of Barber’s incapacity was irrelevant in the ejectment suit, and hence it cannot be held that it was therein settled as between the parties. The cases heretofore cited are authority for the principle that a settlement in a previous suit of an irrelevant matter which did not enter into the judgment is not conclusive in subsequent litigation.

Furthermore, I think that the fact that Miller is sought to be bound by a finding in a suit from the judgment entered in which he was powerless to appeal, or to take proceedings for review, makes strongly against the claim that he is concluded by such finding. Every fact which must have been found in his favor to have sustained his judgment, of course, binds him. But with respect to the matter which the complainant here seeks to have Miller bound he was powerless to obtain a review. The judgment not being in any way founded upon the fact of Barber’s incapacity or insanity, and being in Miller’s favor, should only be held conclusive against Miller of those things which must necessarily have entered into it to justify or sustain it.

To hold that a defendant has had settled in his favor certain facts in the face of a judgment in favor of his opponent which does not rest upon such facts and is regardless of them, is, in my view, unjustifiable.

The complainant herein not having made out her defence in the lawsuit, and the defendant herein having entirely succeeded in the lawsuit, I hold that the latter’s judgment is only conclusive of those facts which necessarily entered into it. It did not necessarily enter into that judgment that John Barber was insane, or that the purchaser of the leasehold had paid less than the market value for it.

I therefore ruled that those two subjects, not being concluded by the previous judgment, were proper subjects upon which to introduce testimony in the pending suit.

This brings us to the merits of the case.

I find the facts as follows: John Barber, in 1903, was about sixty-two years of age. He was an Italian, coming from a little settlement called Peruza, near Genoa. He was married and had at least six children, four girls, named Sisillia, Elizabeth, Julia and one whose name was not mentioned in the testimony given at the hearing, and two boys, Yictor and Joseph. He came to the United States and settled in Newark. He was engaged in the selling of fruit from fruit stands on the street or in stores.

On the 20th day of June, 1890, he obtained the assignment of a lease on property No. 879 Broad street, in the city of Newark. Broad street is the main business street of Newark. This lease expired in 1908, and required him to pay a ground rent of $472.50, and provided that at the expiration of the term he might elect to have another term of twenty years upon a rent to be agreed upon between the parties, or, if they could not agree, then the amount of rent was to be settled by three arbitrators of which each party was to select one and the two thus selected were to choose the third. It was further provided that at the expiration of the lease the landlord (which was a church corporation) would either take over the building at a valuation to be fixed in accordance with provisions in the lease, or the tenant should remove the same in ten days if the landlord did not purchase it.

The building in question standing upon the land at the time he leased it was an old five-story brick building. Upon the ground floor was a store fronting a little over fifteen feet on Broad street and extending back about fifty feet. The lot extended back from the street some one hundred and sixty feet to an alie}', but it tapered so that at the alley it was only seven feet in width, and the back premises were useless for any other purpose than for egress, ingress and the storage of material. Above the store were fiats. All the testimony in the case shows that a full rental value of the entire building was about $1,500 a year, the store being fairly rentable for from $75 to $100, the next two fiats for between $20 and $25 each, the fourth floor for $12 or $15, and the top floor for from $9 to $12 a month.

Barber fitted up the ground floor for his fruit store, and occupied, with his family, the second and third floors, renting the other two to tenants. This continued down to December, 1902. At that time he was in debt to the extent of some $1,300. He was the executor of the estate of Rosa Schmidt, who was his sister. He was also a beneficiary under her will to the extent of one-third. The estate consisted of real estate and money, and there was a partition suit pending. While there was money in this estate at the time it had not then been settled as to how this money was to be distributed—that is to say, whether the beneficiaries would get part land and part money, or whether one would get money and the other land, or whether they would all have to wait until the partition suit was completed and a sale had.

Prior to December, 1902, he endeavored to sell his fruit business to a man who was a nephew of a friend of his named Mollinelli. He first wished to sell to Mollinelli, who was also a fruit dealer, but Mollinelli did not desire to enlarge his business by buying this other one, and said that he had a nephew who might be interested. Before carrying on any negotiations Mollinelli interviewed the wife of John Barber to ascertain whether she was willing that her husband should sell out the business, and testifies that she was willing. The negotiations then went on between Barber and the nephew of Mollinelli, with Mollinelli present, until Mrs. Barber upon one occasion visited Mollinelli and stated that she was not willing that the business should be sold at the price that was being suggested, which was in the neighborhood of $600. Thereupon Mollinelli withdrew from any further participation in the matter, and his nephew and Barber could not come to terms.

Barber thereafter offered his business for sale to Zazzalli, meeting him in the fruit market and talking with him about the same. His first offer was to sell at $1,100. Subsequently, upon his again approaching Zazzalli, he was met by a counter-offer by Zazzalli of $800. This he refused. Further negotiations were had between them, and finally Barber agreed to take $1,000.

He then took Zazzalli to his lawyer, Mr. Trimble, and the bargain was told to Mr. Trimble, and about the 3d day of December, 1902, a bill of sale of the business and a lease to Zazzalli from Barber for the store at $70 a month were made and executed and the money paid, and thereafter Zazzalli carried on the business, Barber assisting him for a little time to introduce the customers to him.

I may here state that there is no evidence that what Barber sold at that time was worth any more than he got for it. About the same time, or a little after, Barber went to see the same lawyer, Mr. Trimble, with Mollinelli, who quite often acted as an interpreter for him, being able to speak the same dialect of Italian which he spoke, and wished to retain Mr. Trimble as associate counsel with Mr. Smith, who was attending to the settlement of the Rosa Schmidt estate and the partition suit. Barber informed Trimble that the trouble was that Mr. Smith was very slow, and the matter was not being settled up as rapidly as he wished, and he wanted Mr. Trimble to go into the matter so as to hurry Mr. Smith. Mr. Trimble saw Mr. Smith and got information from him, and reached the conclusion that matters were progressing properly, and when Barber next called upon him he informed him that there was no occasion for him to do anything just then. At about this time—that is to say, in the early spring of the year 1903—the matter of the settlement of the account of the Rosa Schmidt estate came up, and Barber visited Smith, the lawyer, several times, and the account was prepared by Smith, Barber producing whatever receipts he had for debts of the estate, or legacies that he had paid as executor, and that account was passed.

About the- same time, in the early spring of 1903, Barber began to endeavor to dispose of the leasehold of No. 879 Broad street. He endeavored to sell it to various people. Among others, he began, some time in March, to have negotiations with August J. Miller, the brother of Alexander A. Miller. The Millers were in the electrical business around the corner of Broad street, on William street, and Barber, with Mollinelli, visited their establishment. These negotiations continued over a period of three months. Upon the first visit Miller was merely asked whether he would give $7,000 for a property on Broad street, and he replied that if the property was right he would, but Barber did not at that time state what property he referred to. Subsequently he came back and stated that the property was No. 879 Broad street, and Miller then wanted the papers that showed Barber’s interest in the property. These were furnished and were taken to Coult, Howell & Ten Eyck, the' counsel of Miller, and examined by them and reported upon favorably. Thereupon negotiations were continued, Miller refusing from the beginning to contemplate paying $7,000, but finally offering to pay $5,000, or, rather, he took an option for thirty days to purchase the leasehold at $5,000.

It was the understanding—Barber having so stated—that Miller could have immediate possession of the property, Miller’s object in buying the property was to move his business around onto Broad street, which was much more desirable for him than William street, and of course he had in mind the desirability of getting there as soon as he should purchase this leasehold. Barber had informed Miller that the store property was leased to Zazzalli, but having informed him that he could get immediate possession, Miller was surprised when he learned, as he did subsequently by seeing the Zazzalli lease, that to get Zazzalli out he would have to pay him $1,000. He thereupon broke off all negotiations with Barber, telling him that since he had misrepresented this matter he would not any longer contemplate exercising his option to purchase. Thereafter Barber returned to see him and wanted Miller to make an offer. Miller then offered $3,500-. He states that this offer was based upon the <$5,000 offer previously made, of which $1,000 would have to go to Zazzalli to get him out, $250 to Mollinelli, whom he had agreed to pay for his services, and $250 to the person from whom he intended to borrow the money with which to make the purchase. Finally Barber accepted this offer, and a date was fixed for settlement in the office of Coult, Howell & Ten Eyck. Upon that date, the 26th of June, 1903, Barber, Mollinelli and the Millers attended at Judge Ten Eyck’s office to make the settlement.

There was a mortgage of Barber’s which had to be paid to the mortgagee, and the balance was to be paid Barber in cash. Miller produced two checks making up this balance, one of which was certified and the other of which was not. Barber objected to taking checks, wanting cash. It was explained to him that certified checks were as good as cash, and that immediately upon presenting the same at the bank and being identified he could secure the money. He thereupon acquiesced in taking the certified check, but would not take that one of the checks which was uncertified. All of the witnesses agree that the parties were together between two and two and a half hours while these checks were being certified, and while the figures were being gone over and the matter explained.

Finally the whole matter was explained to Barber, and he understood it, or said that he did, and took the checks and left. Coming out of the lawyer’s office he informed his friend Mollinelli that he was going away, but had not determined whether to go to California or Italy. It appears that he had, between December 3d, 1902, and June 26th, 1903, cleaned up his business, so that he had the $1,000 from the sale of the fruit store, the $3,500 from the sale of the lease' (less about $900 paid to-the mortgagee), and, in addition, that which was coining to him from the Eosa Schmidt estate. This latter sum was about $4,000. He had this money in bank as executor, and it turned out that it was just about, if not exactly, his share, and he withdrew that money for his personal use, making all told about $7,600 in cash.

He left Newark on the last-named day, and, according to his family, entirely and successfully disappeared from view. The defendants, however, proved, without contradiction, that he went to liis old home, where his relatives were, at Peruza, and is now' there. They also proved, without contradiction, that the family received a letter from Italy conveying that information to them some five or six weeks after the date in June, 1903, when he left.

It is contended by the complainant that John Barber was insane, and was not competent to properly transact business, or to know the value of what he had or of that with which he was dealing. They base this, so far as their oral testimony in this cause is concerned, upon the evidence of a physician, John Barber’s eldest daughter, his eldest son, a niece who did not live with them, but did live in Newark; a barber who lived in the neighborhood, and two tenants of one of the flats in the house.

A fair statement of their testimony is that John Barber, up to 1901, was a kind, considerate father, and a man who, although illiterate and of humble origin, was intelligent; that, beginning at the time just named, he became a suspicious man, believing or expressing the belief that his wife and children were bad sexually, and were also robbing him or taking money from him. He was always a man who drank alcoholic liquors, although he does not appear often to have been intoxicated. They testify that he was constantly making these charges of immorality and of dishonesty against his family; that he would watch for the coming of the men that he suspected were coming to his home to have sexual relations with his family.

Some of the testimony is explicable from other of the testimony in the suit. For instance, it is testified that when he accused the children of taking money from the till they denied it and said that it must have been taken by somebody else, outsiders, strangers, and he locked the gates, or took certain precautions which he did take, because he wished to be sure that no one else had access to the place where the money was, excepting the family.

It is also in evidence that one of the girls was in the habit of receiving her young man caller in the front hall of the building, and of staying down there with him until very early hours of the morning. He vehemently objected to this conduct, in which she was upheld by the other members of the family. His outbursts of anger and charges of immorality or badness may be, to a great extent, traceable to such incidents or causes.

None of the testimony of the complainant concerns the condition of this man’s mind in the transaction of business, or casts any direct light upon his ability to transact business. There is some little evidence by the complainant’s witnesses that he did not at times make correct change to purchasers, but such evidence is very trifling in amount and weight. It is possible, in my view, that, leaving out the physician who testified on behalf of the complainant, all that the complainant’s witnesses testified to may have been true without in any way proving that the man was not perfectly competent to transact business and to know the value of his property, and to negotiate intelligently for its sale. I think it is quite possible that an Italian who was in the habit of drinking, and who was angered at his family, might have raved and stormed at them and accused them of all kinds of things, and yet have had entire mental equipment of a sound nature to enable him to transact his ordinary business with all the skill that he ever possessed. The physician produced by the complainant did give his opinion that the man was not able to transact business, but such opinion was not based upon any experience with the man in this respect, and was based solely upon his view of what he termed Barber’s “delusions.” These “delusions,” according to the physician, were that members of his family were immoral, and that they were robbing him. According to his testimony, he had been suffering from the disease which produced these delusions for at least two years prior to the 26th of June, 1903.

I am inclined to think, from the testimony, that this man had no delusions in - the proper sense of that term. The doctor assumed that he had delusions, or testified that he had delusions, and then testified that one thus circumstanced would not have been able to transact business. But all of the testimony shows that these alleged delusions were never disclosed to anybody excepting those people above named, all of whom were members of his family, or were in his own house; that he never disclosed them to outside persons, excepting the doctor, under any circumstances; never mingled his family affairs with his business dealings, and never, in conducting his business, was diverted therefrom by any outside topic.

I am inclined to think that he did not have delusions, but did have certain grievances against his family which may or may not have been well founded.

The uncontradicted testimony is that the family did as it pleased, practically, in the matter of taking money from the store, and that he was displeased with the conduct of one or more of the girls. As I have before said, I think it quite possible that a man of the race of which this man was, and of his condition of life, and who was accustomed to drinking, might well behave in the way that he is testified to have behaved in his family and with his family without in any way having any mental aberration or mental unsoundness.

In addition to the oral testimony delivered at the trial, the complainant also produced and put in evidence a finding of a commission in lunacy on the 9th day of September, 1903, declaring John Barber a lunatic, of whom subsequently his eldest daughter was appointed guardian. This proceeding was, of course, ex parte, and is only prima facie evidence. Mott v. Mott, 49 N. J. Eq. (4 Dick.) 192 (at p. 196), and cases cited; Kern v. Kern, 51 N. J. Eq. (6 Dick.) 574 (at p. 583). I will not further discuss the weight of this finding, because, while in a doubtful case I should give great weight to the determination of commissioners and a jury, I do not see that it is entitled to any more than prima facie effect in the face of a fully-tried issue in this court.

Particularly would I be inclined to treat it in the way indicated when, as in this ease, the alleged lunatic was not served with notice of the commission and was not present, and was not seen or examined by the commissioners or the jury,

The complainant also produced the judgment in ejectment, which has been heretofore referred to and dealt with in a previous part of this opinion.

On behalf of the defendants a medical expert was produced, the gist of whose evidence was that if this man was suffering from delusions of the character testified to by the complainant’s physician, such delusions would have persisted; that the subject could not or would not listen to reason concerning them (which it was shown that this man did), and that such subject would not or could not refrain from disclosing these delusions to everyone with whom he came into intimate or prolonged contact; that if the subject had any such delusions, whether induced by the disease known as “paresis” or that produced by alcohol and termed “alcoholic pseudo-paretic dementia,” he would not have been able to do the things which he was indisputably proven to have done in the manner and way in which they were done and shown to have been done by him.

This physician further testified that it was impossible for a man to have had either of the above-named diseases for the period claimed by the complainant without having shown physical evidences thereof, whereas all of the testimony shows Barber to have been in practically perfect health physically, being large, robust, ruddy and hearty.

The next class of evidence adduced by the defendants was of those who had casual dealings with Barber up to the time of his leaving Newark. These witnesses were men of substance and intelligence. They were lawyers or business men, and all testified that in their dealings with him—buying fruit or ordering fruit—they were waited upon in a proper manner, and saw nothing of a suspicious nature about Barber, nothing that led them to suspect that he was not sound in mind and in body, and that in whatever conversations they had with him he seemed perfectly rational.

The defendants also produced a lawyer named Egner, who was consulted by Barber concerning the making of a bond and mortgage for him, and who made the same and had them executed before him as a master; Mr. Trimble, who closed the deal for the fruit store, and who subsequently had the interviews concerning his participation in the litigation over the Rosa Schmidt estate; Mr. Smith, who had charge of that litigation, and who also had charge of the Rosa Schmidt estate in the orphans court and in the partition suit, and Judge Ten Eyck, who had the closing of the deal at the sale of the leasehold. These four lawyers had every opportunity to observe this man under most critical circumstances, and each of them obtained the distinct impression that the man was rational—knew what he was doing •—and appreciated the transaction taking place.

In addition thereto the defendants produced an intimate friend of Barber, Mollinelli; the Millers, who purchased the leasehold, and Zazzalli, who purchased the fruit store, and they all testified to the details of the transactions with Barber, and to the fact that he was entirely rational, knew what he was doing, and was intelligent and shrewd.

When one considers all of the testimony, I do not see how a reasonable conclusion can be reached that this man lacked mental soundness. The rule as to the mental capacity requisite in cases of ordinary contracts is well settled in this state, and the test is, Did the person whose act is brought in judgment possess sufficient ability at the time he did the act to understand in a reasonable manner the nature and effect of his act or the business he was transacting? Kern v. Kern, 51 N. J. Eq. (6 Dick.) 574 (at p. 579) (Vice-Chancellor Green, 1893). In that case the vice-chancellor observed:

“The old doctrine that the mind, although it has different faculties, is one and indivisible, and that if any of.its parts is disordered, or if it is in any way diseased, or its healthy operation in any function disturbed, it is an unsoundness which affects the whole organ and renders the person legally of unsound mind and incapable of entering into a civil contract, is no longer recognized.

“The question, under the present state of the law, is not whether the mind of the party was in any way affected or impaired, but -whether, such' being the case, the impairment or defect of the mind influenced or inspired the act which is the subject-matter of consideration, for, admitting that the party was subject to some delusion, or that his mind was in some faculty impaired, if the act challenged is not traceable to, and has not probably been influenced by, the defect of intellect, but is the result, so to speak, of the action of the unimpaired faculties of his mind, it will not be disturbed.”

And further (at p. 586):

“A man may be mentally unsound, in a medical point of view, from certain conditions which exist, which would not, in a legal sense, relieve him from responsibility. He may be subject to mania, and medically of unsound mind, yet if the peculiar phase of mania had no influence upon the act brought in question, such act is not, in the law, invalid. He may be an imbecile, and medically of unsound mind, but if he has sufficient mind to reasonably understand the act which is brought in question, he is legally competent.”

Applying the principles deduced from the cited cáse and those which it cites, it is clear that the complainant has utterly failed to prove that there was any such impairment of John Barber’s mind as made him incapable of understanding in a reasonable manner the nature and effect of his acts or of the business that he was transacting, or that the act challenged was traceable to or influenced by any delusion. My impression is that he had, by reason of his grievances against his family, determined to leave. He expressed to his intimate friend his dissatisfaction with the expenses under which he was laboring, and stated that his family were living too expensively; that he wished them to move out of the high-priced neighborhood like Broad street, and enable him to rent the flats they were then occupying to others, and himself to rent a flat in a less expensive, neighborhood for them. He also objected to their taking money, as they had been accustomed to do, from the till in the store. He also, according to their testimony, though not confirmed by outsiders, objected to their morals in sexual matters. As has been already seen, he was in a position to gather together quite a little money, and had expressed a desire to return to Italy, and at one time had asked his family to do so. I think that he conceived the desire or the intention to go back to Italy, or to at least leave his family; that he cast about him to get what money he could; that he had three sources from which to get it; one was his business, another was the leasehold and a third was whatever was coming to him from the estate of his deceased sister. I cannot find that in any one of these matters, each of which he settled up, he failed to bargain as any man similarly situated would have bargained. It may possibly be true that, with respect to the leasehold, he could have obtained more if he had been willing to wait or to seek other buyers after a more extensive endeavor. But if it be true, as I have suggested, that he was now desirous of leaving, it was perfectly natural for him to close when he found that he had gotten as much as he could get from the customers that he knew of. In other words, he had attempted to sell this lease to other people and had been unsuccessful. He finally found a man who would negotiate, and for three months he carried on negotiations, and finally, as I have stated, he closed. In respect to the Schmidt estate, he seems to have clearly understood at all times the situation, which was rather a complicated one. He was executor of the estate, and as such was, of course, the trustee of whatever moneys he received. He was a beneficiary under the will, and as such entitled to his share of the personalty, and was also entitled to one-third of the amount realized in the partition suit. He seems in some way to have arrived at the exact amount to which he was entitled, and to have taken that, and no more. The other beneficiaries feared that he had taken more, and levied an attachment upon his interest in the estate, but it subsequently developed that he had not taken from the funds in his hands as executor any more than his share of the personalty and of the proceeds of the sale of the realty.

In the sale of his fruit business, as I have before stated, he seems to have obtained all that is proven to have been the full value of it. We therefore see that in every business matter (which is the only thing with which we are concerned) he displayed such intelligence as a man of his origin and upbringing would have, and seems to have bargained with shrewdness, and to have seen to it that his bargain was carried out to its culmination with entire regard to commercial principles and the proper conduct of business. Under these circumstances I do not see how the court would be justified in finding that this man lacked mental soundness.

This conclusion makes it unnecessary to enter into an extended consideration of the question of the adequacy of the price paid by Miller to Barber for the leasehold. Much of the testimony offered was with respect to this matter. The solution of the question is not unattended with difficulty. The subject-matter is not one that can properly be said to have a market value. A lease having about five j'ears to run, with the privilege of an extension if an agreement could be reached as to rent, with a proviso that the building must be removed if no agreement is reached for extension, the building being one unadapted for commercial use excepting the first story, and that only usable for a store of modest dimensions, the term being too short to justify the removal of the building and the erection of another, show elements making it extremely difficult to say what the value of such a lease was.

The experts themselves in their testimony demonstrate the uncertainty of the whole subject. Scarcely any two figured with the same factors. Some based their idea of value upon what the property would be worth to one who greatly desired it and was willing practically to lose money on it for the additional value such location would give his business. Others figured upon it entirely from an investment standpoint. They varied in their estimates of value from nothing to $10,000 or more. I can only say that the complainant did not, in my view, establish by the evidence that there was any market value for this lease in excess of what was paid for it.

I will advise a decree dismissing the bill and sustaining the prayer of the cross-bill as to an accounting.

The decree will be settled upon notice.


source: Caselaw Access Project

author: Garrison, V. 0.

license: Public Domain

text:
    Pietro Palladino v. John A. Hilpert and Frank Scutellaro.
    [Decided January 23d, 1907.]
    1. If it be the rule that a sheriff must first levy an execution on personal property before levying on real estate, his impropriety in not doing so is a subject for correction by the court out of which execution issued, and the debtor cannot invoke injunctive relief.
    2. In a suit to restrain an execution sale, evidence considered, and held insufficient to show that the real estate in question sold for an inadequate price.
    3. In a suit to restrain an execution sale, it appeared that before the writ was issued, the attornej'S of the judgment creditor notified the debtor that the judgment had been docketed, and that, unless he settled, they would issue an execution; that he paid no attention, to such communication, and that the sheriff in levsdng actually notified the debtor, and after the execution was levied, the attorneys again wrote the debtor, notifying him that the property would be advertised for sale. The debtor testified that he had gone to a lawyer to have the judgment opened, and that, as the lawyer told him not to do anything, he supposed the lawyer was taking care of him.—Held, that the facts were insufficient to show that the debtor was under any mistake or misapprehension as to the situation, whereby he failed to protect himself at the sale.
    Heard on motion, affidavits in support thereof and affidavits on behalf of defendants.
    This suit was instituted by a bill praying that a judgment docketed from the district court of Hoboken in the Hudson county common pleas be decreed a nullity and void, and that a sale of real estate belonging to the complainant, made by the sheriff of Hudson county on December 13th, 1906, to the defendant Scutellaro be declared void.
    Hpon this bill and affidavits in support thereof a motion was made for a preliminary injunction restraining the defendant Scutellaro from obtaining from the sheriff of Hudson county a deed for the premises sold by the sheriff to Scutellaro at the sale aforesaid.

      Mr. Horace L. Allen, for the complainant.

      Mr. Leon Abbettj for the defendant Scutellaro.
   Garrison, V. 0.

The affidavits on behalf of the complainant set out that in 1896 he owned a stock of goods, merchandise and other varieties of personal property of the value of at least $1,000; that Hilpert, on the day of , obtained a judgment against him in the Hoboken district court for the sum of $248.50 and costs; that the deponent applied to have said judgment opened; that the execution out of the district court was not attempted to be levied upon his personal property; that he believed that an injustice had been done him by the judgment and had retained an attorney to try to have the same opened, and believes that it would not be necessary for him to pay the said judgment; that he never knew that his real estate’was to be sold by the sheriff to satisfy the said judgment, and he never knew that his property had been advertised by the said sheriff; that he did not attend the sale, although he could have easily paid the judgment had he been aware of his situation; that his first knowledge of the sheriff’s sale was after it had been held; that his real estate is worth $14,000, subject to a $7,500 mortgage, so that his equity is $6,500, and that the defendant Scutallaro bought in the property for the grossly inadequate sum of $600.

He produces the affidavit of the deputy sheriff who made the levy, in which he states that he was given the writ on the 4th of October, 1906, and was furnished with a description of the real estate belonging to the complainant and instructed to levy upon said real estate; that on October 4th, 1906, he called upon the complainant at his aforesaid property and showed him such writ of execution and informed him that he levied upon his real estate, and that he should come to the sheriff’s office and settle said judgment. He further avers that he did not at that time, or at any other time, make any levy upon the personal property of the complainant.

There are also affidavits and depositions showing that the sergeant-at-arms of the district court did not attempt to levy upon the personal property of the complainant, but made return that the writ was unsatisfied.

There are many averments in the affidavit ,pf the complainant concerning the original suit between him and Hilpert, the endeavor being to show that the defendant therein, the complainant here, should have succeeded in that suit.

The affidavits of the defendant Scutellaro also contain matter concerning the original suit, and he seeks to show by his own and other affidavits that that suit was properly determined.

The defendant produces affidavits that the real estate of the complainant is not worth more than $11,500; that the personal property contained in the saloon of the complainant, which he values at $1,000, was not worth over $500 or $600, and that the fixtures in said saloon were covered by a chattel mortgage; that the complainant is not, as he asserts that he is, unable to understand English, but does understand the said language, and has carried on business with English people, and is capable of speaking and understanding that language, and has been in this country over twenty years.

The defendant Scutellaro states the circumstances under which he attended the sheriffs sale to show that it was by no arrangement with .Hilpert or with any other person, that he was the holder of a mechanics’ lien against the premises for a large sum of mone3r, and was naturally interested in the matter of the sale, and upon being informed by a stranger that the sale was to take place—a fact which he had known but had forgotten—he attended and bought in the property for $600; that the sheriff announced that the property was to be sold subject to certain encumbrances and liens. These encumbrances are shown to be as follows: A mortgage for $7,500; a mechanics’ lien in favor of Scutellaro for $4,439.90 with interest from April 10th, 1906; a lien in favor of the Eagan Iron Works for $444.20; a lien in favor of William J. Walsh for $385 with interest thereon; a recognizance in the court of quarter sessions for $200; taxes for the year 1906, $59.40, and water rents amouting to $21.38. The proofs also disclose that application was made by the complainant in the Hoboken district court to open the judgment obtained by Hilpert against him in that court, and that it was. refused; that on July 30th, 1906, the writ of execution was issued out of the district court, and on the 31st of July was returned unsatisfied; that on the 3d of August, 1906, the said judgment was docketed in the court of common pleas of the county of Hudson;- that on the 5th day of September, 1906, the attorneys of the judgment creditor wrote a letter to the complainant herein in which they informed him that they had docketed the judgment, and that unless he called at their office by Wednesday of that week and settled the judgment they would proceed to issue an execution in the upper court and sell his property. To this letter they received no answer. On the 2d of October, 1906, the execution was issued out of the court of common pleas, and on the 4th of October the deputy sheriff exhibited this execution to the complainant herein and informed him that if he did not call at the sheriff’s office and settle it his property would be sold; that on the 15th day of October, 1906, the attorneys for the judgment creditor wrote a letter to the complainant herein in which they informed him that they had issued execution against him on the docketed judgment and had placed the same in the hands of the sheriff, and that the sheriff had informed them that he had notified Palladino to that effect, and 1hat the latter had paid no attention to it. They then proceed to state that unless this judgment is settled by Thursday of that week they should instruct the sheriff to advertise the property for sale. That they received no response to this letter; that on the 22d of September, 1906, they wrote a further letter in which they stated that unless the amount of the judgment was paid by Wednesday of that week they would have to direci the sheriff to sell him out on execution; that no reply was received to this letter, and thereupon they instructed the sheriff to proceed with the sale; that the sheriff strictly followed all of the requirements as to notice and advertisement, and the sale was duly held on the 13th day of December, 1906, and the property was bought in by Scutellaro for $600; that Scutellaro paid $100 at the time and was prepared to pay the balance, but was restrained by the temporary order of this court granted on the filing of the bill and the affidavits herein.

The complainant insists that he is entitled to the aid of this court to restrain the defendant Scutellaro from perfecting the sale and taking a deed from the sheriff for the property. He asserts that the execution out of the district court should have been levied upon his personal property; that it is improperly docketed, because in the certificate accompanying the application to docket the clerk did not correctly state the return of the officer as endorsed on the writ; that the officer endorsed on the writ that he returned the same

“unsatisfied, not having been able to find any goods and chattels, the property of the within-named defendant, in Hudson county to levy on and sell as 1 am within commanded.”

In the certificate accompanying the application to docket the certification is that the writ was returned by the officer “unsatisfied.”

The complainant further insists that the sheriff did not levy on the defendant’s personal property, as he was commanded by the writ, but did levy on the real estate; that since the complainant had sought legal advice, and was told not to pay the judgment until his attorney advised him to, he rested secure, and paid no attention to any of the proceedings, and therefore is entitled to the aid of this court in the setting aside of this sale, which he says was for a grossly inadequate price.

The sheriff’s return on the writ of execution issued out of the common pleas recites that by virtue of the writ he has seized and levied on the lands and tenements of the defendant as per inventoiy and description annexed, subject to all prior legal encumbrances, “all the rest, residue and remainder of defendant’s personal property value one dollar.” To the writ there is annexed a description of the real estate.

With respect to the question of the improper docketing of the judgment and the impropriety of the sheriff in making the levy, 1 think that it is clear that the complainant herein has an adequate remed3r at law, and that this court should not interfere.

If it be the law in New Jersey, as it is in several jurisdictions (11 Am. & Eng. Encycl. L. (2d ed.) 654 note 2), that the sheriff must first levy upon the personal property of the defendant, his impropriety in not doing so is a proper subject of correction by the court out of which the execution issued. The court of errors and appeals, in the case of Voorhis v. Terhune, 50 N. J. Law (21 Vr.) 147, lays down the rule that the court upon whose judgment execution issues has full power to set aside an execution sale whenever the ends of justice and fair dealing require it; and-there are numerous cases in this state which, affirm, the right of the common law courts to exercise even equitable powers concerning the executions and sales thereunder in their own courts. Barber v. Miller, 73 N. J. Law (44 Vr.) 38 (Supreme Court, 1905). The general principles and numerous cases will be found in 17 Cyc. 1280; 25 Am. & Eng. Encycl. L. (2d ed.) 783; 17 Cyc. 1135.

If it is to be the rule in New Jersey that the sheriff must first levy upon the personal property, under a common law writ, surely such a rule should be established by the courts of law, ana the sheriff should be controlled in executing their process in this respect by those courts.

In the case of Skillman v. Holcomb, 12 N. J. Eq. (1 Beas.). 131 (Chancellor Williamson, 1858), the court says: “It would take a very strong case of fraud, mistake, surprise or accident to induce this court to interfere with the completion of a sale upon an execution at law,” and he points out that all the cases referred to by the counsel for the complainant in that case were those where the court was asked to interfere with the execution of its own process, and he concludes that this is “a very different thing from interfering with the process of another and independent tribunal.”

But the complainant points out that there has been established a doctrine in this state that a court of equity will set aside a sheriff’s sale on a common law judgment, even if there has been no fraud, where there is gross inadequacy of price, and the party, by reason of mistake or misapprehension, did not attend the sale nor protect his interest thereat, and the sacrifice was caused by such mistake or misapprehension.

This is the rule as formulated in this state. Raphael v. Zehner, 56 N. J. Eq. (11 Dick.) 836 (Court of Errors and Appeals, 1898). This recent case on the subject relies upon and goes back to that of Kloepping v. Stellmacher, 21 N. J. Eq. (6 C. E. Gr.) 328 (Chancellor Zabriskie, 1871). A careful analysis of that case, which certainly goes to the extreme limit to which such jurisdiction can be extended, shows that the chancellor found that the judgment debtor therein did not believe that the property was to be sold to satisfy the judgment. In that case there had been a judgment in a justice’s court for $44. The judgment debtor made an arrangement with the justice to pay the same in installments of $6 each and paid six such installments. Thereafter another suit was begun upon the original judgment for the unsatisfied portion of it, about $9, and the judgment then obtained was docketed and an execution issued to the sheriif. It was shown that the sheriif adjourned the sale so that information might be conveyed to the defendants of the sale, and the chancellor finds that they were so informed; but he says that he cannot believe that they understood and believed that the sale would take place, and he finds from the evidence and circumstances that it appears that they did not believe it, and, thereupon, he finds as a fact that they were under a mistake and ought not to be punished by a loss so great to them as that sale, if allowed to stand, will inflict. The property was bought in for $52 and was worth, the chancellor finds, $1,500.

Before this doctrine can be applied to any ease it must certainly appear in such case as the fundamental fact that there has been a gross inadequacy of price. It should be noted in the case in hand that the complainant’s proofs are barren of anjr evidence saving his own as to the value of his property, whereas the defendant not only produces his own evidence but that of other witnesses, one of whom, at least, a real estate agent, is entirely impartial so far as the proofs show, and that such evidence on the part of the defendant places the value of the property at not over $11,500, whereas the complainant testifies that it is worth at least $14,000.

It is not disputed that at the time of the sale there were, including the mortgage debt, encumbrances amounting to $13,-049.78. If to this is added the $600 bid by Scutellaro at the sale, we have a total of $13,649.78. So that even if the complainant’s value bo taken as the true one, it cannot be said that there was any gross inadequacy of price, or, in fine, any inadequacy whatever.

There was a suggestion on the part of the complainant that the mechanics’ liens, or some of them, were not sustainable, but the proofs are barren of any evidence from which this court could find that such was the fact.

The next essential for one seeking the application of the doctrine above stated, after he has established gross inadequacy of price, is to show that he was under some mistake or misapprehension which caused him to fail to protect himself at the sale. I do not find that this complainant was, properly or justifiably, under any mistake or misapprehension. Before the writ of execution was issued out of the common pleas the attorneys of the judgment creditors notified him that the judgment had been docketed, and that unless he settled it they would issue an execution and sell his property. He paid no attention to this. Thereafter an execution was issued, and the deputy sheriff in levying the same actually notified the defendant, and told him that unless he went to the sheriff’s office and paid the money his property would be sold. After the execution was issued and levied, and the sheriff had informed him as aforesaid, another letter was written to him by the attorneys of the creditor in which they notified him that unless he settled the judgment they should instruct the sheriff to advertise his property for sale. And, again, he was notified by letter that unless he paid the judgment the sheriff would be directed to sell him out on execution. His only answer to all this information which was conveyed to him is that he had gone to a lawyer to have the judgment opened and supposed that the lawyer was taking care of him, and that the lawyer had told him not to do anything. There is no attempt to secure the evidence of the lawyer, nor is there any corroboration of what the complainant testifies to in this respect, nor does he specifically testify that the lawyer was taking any proceeding after he attempted to open the judgment (in which' attempt he failed) to further stay the due process of law, or to interfere with the judgment creditor taking the proper steps to-collect his judgment. Nor does it appear that the judgment debtor, when he received the numerous notices that he did that his property would be sold, consulted the lawyer, as it was his duty to do if it was true that the lawyer had been retained to protect him, or that he called these communications to his lawyer’s attention, or himself paid any attention to them Whatever.

I cannot find, therefore, in this case what Chancellor Zabriskie found in the Kloepping Case, namely, that the defendant believed that the property would not be sold; in fact I think that he must have believed, if he was capable of receiving any impression and of having any mental operations whatever, that unless he paid the debt his property would be sold.

I do not, therefore, think that it would be proper or in keeping with the due administration of law to relieve a judgment debtor, under the circumstances disclosed in this case, from the consequences of his own negligence and carelessness. I do not think it would be proper to hold that he was, legally speaking, under any mistake or misapprehension. That the negligence or carelessness of-his attorney, if there was any such, must be attributed to him is too well settled to require discussion. The citations will be found collected in 16 Am. & Eng. Encycl. L. (2d ed.) 392.

Even if there was proof—which there is not in this case— that the property was sacrificed, I do not think it is a proper case in which to extend the aid of this court. If it is a proper case, then I cannot conceive of any case in which a sheriff’s sale under an execution at law could stand if the defendant asserted that he did not have belief that the properly would be sold, and I am sure that to extend the jurisdiction so as to produce this result is not in keeping with the spirit animating this court with respect to this subject.

The courts have frequently called attention to the necessity of having sheriffs’ sales or judicial sales upheld unless there is some strong reason for setting them aside, and have pointed out that the purchaser at an official sale becomes invested with a fixed and definite legal right, of which he should not be deprived except upon some legal or equitable ground. Chamberlain v. Larned, 32 N. J. Eq. (5 Stew.) 295 (Court of Errors and Appeals, 1880); Morrisse v. Inglis, 46 N. J. Eq. (1 Dick.) 306 (Court of Errors and Appeals, 1889); Bethlehem Iron Co. v. Philadelphia and Seashore Railway Co., 49 N. J. Eq. (4 Dick.) 356 (Chancellor McGill, 1892); Hunt v. Swayze, 55 N. J. Law (26 Vr.) 33 (Supreme Court, 1892); Zimmerman v. Place, 61 N. J. Eq. (16 Dick.) 273 (Chancellor Magie, 1901); Ryan v. Wilson, 64 N. J. Eq. (19 Dick.) 797 (Vice-Chancellor Reed, 1902).

There are man)' jurisdictions in which one whose land has been sold by judicial process has a certain length of time within which to redeem the same. This right is created and regulated by statute. There is no such statute in New Jersey. The court cannot legislate. The complainant herein, ’in my view of the circumstances and the law, is seeking nothing more or less than the right to redeem. He does not show any existing equity, but does disclose a situation which demonstrates, perhaps, the advisability of the creation of a new equity, namely, the right to redeem property sold by judicial process. I cannot find any authority in our law establishing any such right.

I will advise an order denying the motion for a preliminary injunction.


author: Garrison, Y. C.

text:
    Fidelity and Casualty Company v. The MacAfee Company.
    [Decided February 1st, 1907.]

      P. L. 1896 p. 300 provides that the receiver of a corporation shall have power to send for persons, and to examine them on oath respecting the corporation’s affairs, and that if any person shall refuse to be sworn, the court of chancery may, on report of the receiver, commit such person to
      prison.—Held, that where service of a summons was made by the receiver on a person without the state, the courts of the stale had no authority to make an order adjudging such person in contempt for failing to appear.
    Proceedings on behalf of the receiver of the defendant company to punish John B. MacAfee as for a contempt. Heard on petition of receiver and proofs attached thereto.
    By a final decree in this court, entered on the 18th day of June, 1906, the above-named defendant was in this suit decreed to be insolvent, and an injunction in pursuance of the statute was issued against it and its officers, and a receiver was appointed for it.
    John B. MacAfee was at that time the president of the defendant corporation.
    On the 26th day of October, 1906, the receiver caused to be served, in the city of Philadelphia, in the State of Pennsylvania, upon said John B. MacAfee personally, a summons or notice in the nature of a subpoena, requiring the said John B. MacAfee to appear before the receiver, at 127 Market street, Camden, New Jersey, on the 1st day of November, 1906, at the hour of eleven o’clock in the forenoon, to be examined, on oath or affirmation, respecting' the affairs and transactions and estate, money, goods, chattels, credits, notes, bills and choses in action, real and personal estate and effects of every kind of the MacAfee Company, * * * and also respecting its debts, obligations, contracts and liabilities, and the claims against it, and then and there to produce before the said receiver the minute-book and the stock and transfer-books of said corporation, and all papers and documents of whatever sort in the possession of the said John B. MacAfee, or under his control, relating to the stock issue of said corporation, the terms thereof and the disposition thereof and the pajunent therefor; also all papers and documents of whatever sort showing or relating to the incorporation and organization of said corporation and the purchase of property by it; also the day-book, journal, ledger, bank-book or books, vouchers, and all other books, papers and records relating' to the organization, business, property and affairs of said corporation.

      It is recited therein that
    “this summons is served upon you pursuant to the power in me vested as receiver of the MacAfee Company, an insolvent corporation, by virtue of the laws of the State of New Jersey, and particularly section 71 of an act of the legislature of the State of New Jersey entitled ‘An act con cerning corporations’ (Revision of 1896).”
    Said section reads as follows:
    “Such receiver shall have power to send for persons and papers, and to examine any persons, including the creditors and claimants, and the president, directors and other officers and agents of the corporation, on oath or affirmation (which oath or affirmation the receiver may administer), respecting its affairs and transactions, and its estate, money, goods, chattels, credits, notes, bills and choses in action, real and personal estate and effects of every kind, and also respecting its debts, obligations, contracts and liabilities, and the claims against it; and if any person shall refuse to be sworn or affirmed, or to make answers to such questions as shall be put to him, or refuse to declare the whole truth touching the subject-matter of the said examination, the court of chancery may, on report by the receiver, commit such person to prison, there to remain until he shall submit himself to be examined, and pay all the costs of the proceedings against him.”
    On the 1st of November, 1906, at the time and place aforesaid, the said John B. MacAfee did not appear. Thereupon the receiver, on the 24th of December, 1906, filed what is termed a petition, but what may as well be termed a report under the language of the section just quoted, and in the said paper prayed that an order might be made adjudging the said John B. MacAfee in contempt, and that he be punished therefor.
    An order to show cause why the prayer of this petition should not be granted was, on the date of the filing of the petition, made, and on the 27th day of December, 1906, a true copy thereof was served upon the said John B. MacAfee personally, in the city of Philadelphia and State of Pennsylvania. That order was returnable on the 31st day of December, 1906. Upon the return day the court was attended by counsel for the petitioner and by Messrs. Collins & Corbin, who, with the permission of the court, entered a special appearance for John B. MacAfee, restricting their appearance to objecting to the jurisdiction of the court to grant the prayer of the petition aforesaid.

      Mr. John M. Enright, for the petitioner.

      Messrs. Collins & Corbin, for John B. MacAfee.
   Garrison, Y. C.

(after stating facts).

I am of opinion that this court is without jurisdiction to make the order prayed for in this proceeding.

It will he observed that the statute provides that

“if any person shall refuse to be sworn or affirmed * * * the court of chancery may, on report by the receiver, commit such person to prison, there to remain until he shall submit himself to be examined, and pay all the costs of the proceedings against him.”

While this proceeding is not exactly in conformity with, the statute, I am of opinion that it is sufficiently so to raise the question whether, under this act and the proceedings in this case, the person named may, by the order of this court, be ordered to bo committed to prison, &c.

Without considering the constitutionality of the seventy-first section of the Corporation act, which is quoted in full in the above statement of facts, it is clear that the power thereby vested in the receiver is not and cannot be any broader than the analogous power vested in the courts of the highest primary jurisdiction in the state.

The process to compel the attendance of witnesses in those courts is ineffectual unless served upon the person within the territorial limits of the state. State v. Trumbull, 4 N. J. Law (1 South.) 139.

I cannot perceive how the process which the receiver may issue under the cited section of the Corporation act can have any other or greater effect than ihe similar process of the courts just adverted to.

Since the summons, notice or subpoena issued by the receiver in this suit ivas not served within the territorial limits of this state, this court is without the power to commit the person upon whom the same was served outside of the territorial limits of this jurisdiction.

This determination rests upon such elemental principles of our law that I deem it unnecessary to cite authorities or precedents, or to indulge in further reasoning concerning the situation.

The prayer of the petition will be denied.


author: Leaming, Y. C.

text:
    Samuel G. McKiernan et al., executors, &c., of John McKiernan, deceased, and individually, v. Elizabeth Beardslee (or Beardsley) et al.
    [Decided November 1st, 1906.]
    In the absence of any clause or expression in a will showing an intent to the contrary, a devise or bequest from a wife to a husband “to him and his heirs forever,” lapses upon the death of the husband in the lifetime of the testatrix; the words “heirs forever” being words of limitation and not of substitution.
    On bill, &C.

      Mr. George S. Hilton, for the complainants.

      Mr. Abram Klenert, for the defendants.
   Leaming, Y. C.

The will of Emeline A. Doremus contained the following provision :

“After the payment of all my just debts and funeral expenses, I give, bequeath and devise all my property, both real and personal, wheresoever situate, and whatever the same may be to my husband, Cornelius Doremus, of the city of Paterson, in the county of Passaic and State of New Jersey, to him and his heirs forever.”

Cornelius Doremus, the devisee and legatee named in the will, died April 1st, 1899.

Emeline A. Doremus, the testatrix, died November 10th, 1904.

The sole question for determination is whether the devise and bequest lapsed by reason of the husband predeceasing his wife, or whether the heirs of the husband take the estate which the husband would have received under the will in the event of the husband having survived testatrix.

It is well settled that a devise or bequest to “A and his heirs” lapses upon the death of A in the lifetime of the testator, the word “heirs” being a word of limitation which is used to denote the quality or duration of the estate to be taken by the devisee or legatee, and not a word of substitution denoting an intention to substitute the next of kin in the place of the deceased devisee or legatee. The rule is the reverse in the ease of a devise or bequest to “A or his heirs” for the reason that in such case there is an apparent intention of substitution. If an intention to substitute the next of kin in the place of the deceased devisee or legatee, so as to save a lapse, can be deduced from some other clause or expression in the will, the rule above stated may be overcome. Zabriskie v. Huyler, 62 N. J. Eq. (17 Dick.) 697; affirmed on appeal, 64 N. J. Eq. (19 Dick.) 794.

In the present case the portion of the will above quoted constitutes the entire will, except a clause appointing the executor, and no intention can be imputed other than that manifest from the language of the clause quoted.

The word “forever” in the devise and bequest in question imports no more than that the person who is to take shall take absolutely, and does not alter the character of the person who is to take. Doody v. Higgins, 9 Hare 32 (Appendix *XXXII).

Gen. Stat. p. 3763 § 34, making provision against the lapse of estates devised or bequeathed, does not extend to a devise or bequest to the husband of testatrix. Canfield v. Canfield, 62 N. J. Eq. (17 Dick.) 578.

I will advise a decree accordingly.


text:
    Public Service Corporation of New Jersey v. Hackensack Meadows Company.
    [Decided November 1st, 1906.]
    1. A court of equity will not decree the specific performance by vendor of a contract for the sale of land where the vendor is not the owner of the land which he has agreed to convey. Such decree will not be made even though it is within the power of vendor to purchase the land in question at a reasonable price.
    2. A court of equity will not retain a bill for specific performance for the purpose of awarding damages to vendee if the bill was filed by vendee at a time when he knew that defendant was not owner of the land in question.
    On demurrer to bill.
    The bill alleges that defendant agreed to sell to the North Jersey Street Railway Company a certain strip of land and to convey an absolute title to the same for the consideration of $30,000. Subsequently the railway company, with the consent and acquiescence of defendant, assigned the contract of sale to complainant and complainant entered into possession under the contract. Thereafter defendant executed and delivered to complainant a deed of conveyance of the land contemplated by the contract and received from complainant the money consideration named in the contract. The deed contains a covenant of ownership, a covenant of right to convey and a covenant of general warranty. Complainant has erected upon the land in question poles and transmission wires for conveying electricity, that being the purpose for which the land was purchased. Complainant relied upon the declarations of ownership of defendant at the time the purchase and improvements were made. At the time of the conveyance a certain portion of the premises conveyed was owned by one Ella Y. Decker, and in consequence no title to that portion passed to complainant by the conveyance. Complainant is now in possession of the portion of the premises in question solely, by sufferance of Ella Y. Decker. The bill then contains the following paragraph;
    “That the said Ella V. Decker is ready and willing to sell for a reasonable price a tract of land containing four and ninety-one hundredths (4.91) acres, of which the land so agreed to be conveyed but not properly conveyed to your orator, is a part; but that your orator has use only for. a strip eighty (80) feet wide across said tract of 4.91 acres, as above described, and it would be a grievous burden to your orator to be compelled' to acquire said entire tract; that Hackensack Meadows Company is the owner of other land in that vicinity, is dealing in land in that vicinity, and could without loss to itself, acquire at a reasonable price from Ella V. Decker the tract of land in question and convey to your orator that portion of the same agreed to be conveyed to your orator as aforesaid'; that you:' orator has repeatedly requested Hackensack Meadows Company to execute its agreement to convey the said land to your orator by a good and sufficient title as it well could do, and the said Hackensack Meadows Company lias on several occasions, promised to arrange the matter and acquire the said land from Ella V. Decker and convey the same to your orator, but that a reasonable time has elapsed since such requests were made by your orator, and Hackensack Meadows Company has not carried out its agreement lo convey the said portion of said land to your orator, although the said Hackensack Meadows Company retains the full consideration paid by your orator, to wit: the sum of thirty thousand dollars ($30,000) for all of said lands so conveyed; all of which is contrary to equity and good conscience and tends to the manifest wrong and injury of your orator.”
    The bill prays, in addition to the prayer for g-eneral relief, that the agreement of conveyance may be specifically performed, and that defendant may be required within a reasonable time to acquire the title to that portion of the premises owned by Ella Y. Decker and then convey the same to complainant. Ella Y. Decker is not made a party.

      Mr. Leonard J. Tynan, for the complainant.

      Mr. Thomas Mills Day, for the demurrant.
   Leaming, Y. C.

This court has repeatedly held that it will not decree the specific performance by a vendor of a contract for the sale of . land where the vendor is not the owner of the land which he has agreed to convey. Welsh v. Bayaud, 21 N. J. Eq. (6 C. E. Gr.) 186; Peeler v. Levy, 26 N. J. Eq. (11 C. E. Gr.) 330; Ten Eyck v. Manning, 52 N. J. Eq. (7 Dick.) 47; Hopper v. Hopper, 16 N. J. Eq. (1 C. E. Gr.) 147, 149. It is urged on behalf of complainant that the underlying reason for the refusal to decree specific performance in such cases will be found to rest in the inability of the court to enforce such decrees and its reluctance to make nugatory decrees, and upon that view it is argued that the present case is free from the operation of the rule in that the bill avers that defendant can acquire title to the land in question at a reasonable price, and this fact being admitted, it is urged that no embarrassment in the execution of the decree can be reasonably anticipated. In this contention I think that counsel of complainant fails to give full force to the reasons for the rule in question. While in the cases above cited decrees may seem to have been refused because of their manifest want of inherent coercive force, yet that does not appear to be the sole ground upon which equity is impelled to deny relief in such cases. It is a well-established rule in equity that no contract will be specifically enforced unless there is in the contract such mutuality of obligation that either party may enforce it against the other. As a vendor without title to the subject-matter of the contract of sale cannot enforce the contract against Ms vendee, or at least cannot until he shall have actually acquired title, courts of equity hold such contracts unenforceable at the instance of the vendee because of want of mutuality as well as because of the possible infirmity of the decree. Forrer v. Nash, 35 Beav. 167; Hoggart v. Scott, 1 Russ. & M. 293; see, also, Ten Eyck v. Manning, supra; Pom. Spec. Perf. §§ 162, 166. I think another ground upon which courts of equity appropriately refuse to decree specific performance in cases of this class arises from the mutual relationship which equity deems the respective parties to bear to the subject-matter of the contract. Under an agreement for the sale of land equity regards the vendee as the equitable owner of the land and the vendor as the equitable owner of the purchase-money. The vendor holds the legal estate in trust for the vendee. The lands descend to the heirs of the vendee and the personal representatives of the vendor succeed to the purchase-money. A sale by the vendor to a third party will be treated in equity as a sale for the benefit of the vendee and an accounting will be decreed. A third party purchasing with notice of the contract will be compelled to convey to the vendee. In Haughwout & Pomeroy v. Murphy, 22 N. J. Eq. (7 C. E. Gr.) 531, 547, Mr. Justice Depue, in delivering the opinion of our court of errors and appeals, after reviewing the above-stated effects of the contract of sale upon the title of the subject-matter of the contract, says: “It is upon the principle of the transmission by the contract of an actual equitable estate, and the impressing of a trust upon the legal estate for the benefit of the vendee, that the doctrine of the specific performance of contracts for the sale and conveyance of lands mainly depends.” The absence of an equitable estate in the vendee, when the subject-matter of the contract to convey is land in which the vendor has no interest, would seem to necessarily enter largely into the considerations which have impelled courts of equity to uniformly refuse to entertain bills for the specific performance of such contracts. It should also be observed that a decree of specific performance against a vendor where he has no title, but has merely the means of acquiring a title by purchase, would be no less barren, except in its persuasive force, than such a decree where no present means of acquiring title should exist. With title in-vendor this court can, if necessary, direct a conveyance through commissioners and effectuate its decree to its fullest purpose. This, however, could not be accomplished with title in another. Such a decree would fail in the important element that goes far to induce courts of equity to adopt the extraordinary remedy sought by complainant. My conclusion is that the fact that it is now possible for defendant to acquire title to the land in question at a reasonable price will not justify this court in entertaining the bill. I see nothing in Moore v. Crawford, 130 U. S. 122, 133, cited in behalf of complainant, to modify this view.

Complainant further urges that the allegation in the bill, to the effect that since the delivery of the deed defendant “has promised to arrange the matter and acquire the said land from Ella V. Decker and convey the same” to complainant, creates further or additional rights to relief. No new consideration for the promise is averred. Such promise is plainly without a consideration to support its enforcement and bestows no additional remedy.

The bill will not be retained for the purpose of awarding damages. The bill was filed for specific performance at a time when complainant knew that defendant was not owner of the land in question. The distinctive claim for equitable relief failing this court will not, in such case, take jurisdiction of the ancillary claim to damages. Borden v. Curtis, 48 N. J. Eq. (3 Dick.) 120; Peeler v. Levy, 26 N. J. Eq. (11 C. E. Gr.) 330, 332; Welsh v. Bayaud, 21 N. J. Eq. (6 C. E. Gr.) 186; Iszard v. Mays Landing Water Power Co., 31 N. J. Eq. (4 Stew.) 511, 524; Ludlum v. Buckingham, 35 N. J. Eq. (8 Stew.) 71; S. C., 39 N. J. Eq. (12 Stew.) 563.

The bill will be dismissed, with costs.