author: Backus, Y. 0.

text:
    Charles W. Norcross v. Marian Pearl Norcross.
    [Decided May 24th, 1913.]
    1. In a husband’s suit against his wife for desertion, evidence examined and held, that it was not shown that the desertion was obstinate against the will of the petitioner.
    2. Although a wife may without cause or justification abandon her husband, the law imposes upon him a duty to use active efforts to terminate the separation by making such advances or concessions as might reasonably be expected to induce her to return to him, and he is excused from discharging this obligation only when it is manifest from the facts in the case that .to do so .would be unavailing.
    3. Also held, upon the evidence that the denial of the decree is further sustainable because of the charge of willfulness of the supposed desertion as supported only by the petitioner’s evidence.
    On petition for divorce. On exceptions to master’s report.

      Mr. Francis V. Dobbins, for the petitioner.
   Backus, Y. 0.

The parties to this suit lived in Bergen count]' and were married in 1901. They have one child. In 1910 they separated. The petitioner charges that at that time the defendant deserted him, and that her desertion was continued, willful and obstinate for a period of two years. The cause was uncontested. The master to whom it was referred reported adversely to the prayer of the petition, assigning the reason that it was not shown that the desertion was obstinate—against the will of the petitioner.

The petitioner’s testimony is to the effect that his wife was fond of the gay and forbidden life, and because of frequent reproofs she expressed her determination of leaving him, and quickly put this into action, notwithstanding his pleas and protests. All during the two years of the supposed desertion the petitioner made absolutely no advances to induce his wife to return to him. Had he done so; liad he been solicitous of a reconciliation, I am satisfied that the defendant would have yielded. By the testimony of a witness who crated some of the furniture preparatory to her departure it appears that the defendant requested him to collect for his services from the petitioner, which the latter paid. During her absence the defendant kept up a correspondence with her husband, and it seems that he, at least upon one occasion, wrote to her. It may fairly be gathered from the wife’s letters that her separation was in a measure assented to and acquiesced in by the petitioner. Her letters to him indicate that the petitioner was not unwilling that his wife should live apart from him, and the impression they make upon me is that if he had made reasonable overtures to her she would have ended the separation. There is nothing in the conduct of the defendant which leads to the belief that had the petitioner solicited her, he would not have been successful in inducing his wife to rejoin him. The statement made by her to his solicitor, that she didn’t see how she could live with her husband again, does not manifest obduracy. The insinuation that the defendant found marital solace in the society of one Ackerman, and that from this it may be assumed that the petitioner’s efforts would have been unsuccessful, finds no support in the record.

Although a wife may, without cause or justification, abandon her husband, yet the law imposes upon him a duty to use active efforts to terminate the separation, by making such advances or concessions as might reasonably be expected to induce her to return to him. Bowlby v. Bowlby, 25 N. J. Eq. (10 C. E. Gr.) 406. And he is excused from discharging this obligation only when it is manifest from the facts in the case that to do so would be unavailing. Hall v. Hall, 65 N. J. Eq. (20 Dick.) 709.

The denial of a decree of divorce is further sustainable because the charge of willfulness of the supposed desertion is supported only by the petitioner’s evidence.

There is corroborating testimony that the defendant separated from her husband, but none that she deserted him. The express-man and another who helped to move the furniture simply tell of her going. Her letters speak only that she left her husband, but what persuaded her to go, or that it was a willful abandonment on her part, does not appear other than from the lips of the petitioner.

The master’s report is confirmed and the exceptions are overruled.


source: Caselaw Access Project

author: Backes, Y. C.

license: Public Domain

text:
    Martha P. Moore et al. v. David H. Riddle et al.
    [Submitted May 20th, 1913.
    Decided June 9th, 1913.]
    1. Complainant conveyed land to R., who agreed to find a purchaser for complainant’s property, under an arrangement with R. that the title should be placed in his name so that he could mislead an alleged friend of R. into believing that R. owned the property, so as to in that way enable R. to borrow money from bis friend to purchase from complainant, or, as complainant also testified, so as to enable R. to sell to such friend for complainant’s price, and the deeds were recorded, and R. sold the property to defendant, an innocent purchaser, and did not pay complainant the price according to his agreement to do so or return the deed within a week, but complainant waited three months after conveying to R. before taking any action.—Held, that complainant was estopped as -against defendant from claiming that the deeds to R. were void.
    2. A seal is essential to a deed.
    3. Under a deed reciting that grantor “set her hand and seal the day and year first above written,” it is presumed that a seal was affixed when the deed was executed.
    4. Evidence, in a suit to set aside a deed as obtained by fraud, held not to show that the deed was not sealed when signed by complainant.
    5. Delivery is essential to the validity of a deed.
    6. Acceptance of a deed by grantee is essential.
    7. A certificate of acknowledgment is not essential, as between the parties, to the validity of a deed of a feme sole; the purpose of such certificate being to supply evidence of the due execution of the deed and to enable it to be recorded.

      On bill, answers and proofs.

      Messrs. Smith & Turner, for the complainants.

      Mr. Charles IS. Coolc, Mr. Andrew J. C. Stolces, Mr. Alfred B. Cosey, Messrs. Melosh é Morlen, for the defendants.
   Backes, Y. C.

The complainant was the owner of two tracts of land in North Brighton, near Spring Lake, Monmouth county. One was a vacant lot on Ocean avenue, the other an unoccupied cottage built on two lots on Worthington avenue. Three conveyances of these lands made by the complainant to Carrie H. Riddle are of record in the Monmouth county clerk’s office; the first, dated May 3d, recorded May 4th, conveys so much of the vacant lot as lies west of Ocean avenue; the second, dated May 3d, recorded May 14th, conveys the remainder of this lot, known as the “bluffs;” the third, dated May 21st, recorded May 23d, conveys the cottage and lots. The certificates of acknowledgment bear the date of the deeds, and were made by one Housel, a commissioner of deeds. May 9th, Carrie H. Riddle and husband gave a mortgage to Charles D. Schanck for $1,250 on the land- described in the first deed, and on July 27th following conveyed it and the “bluffs” lot to Andrew J. C. Stokes. May 28th tiie Riddles mortgaged the cottage and lots to D. Craig Bowne to secure $1,500, and on July 1st conveyed the equity to Charles W. and Kate Pastor field. The Pastorfields on the same day mortgaged this property to Elizabeth Gleason for $1,400, and to Carrie II. Riddle for $300. The mortgages and deeds were promptly recorded. The bill is filed to set aside these conveyances and mortgages on the ground that the deeds to Carrie PI. Riddle were obtained by fraud practiced on the complainant by David PI. Riddle, the grantee’s husband. The defendants, with the exception of the Riddles, are all innocent purchasers for value. The circumstances attending the making of the deeds to Carrie PI. Riddle exhibit remarkable gullibility on the part of the complainant. She was anxious to sell her realty. David H. Riddle, a stranger, at first tendered his services as a selling agent. Later he tolcl her he had found a man—a New York friend—who would lend him the money to buy it, and suggested that she sell to him. To- this she readily assented, fixing the price at $3,500 for the vacant lot and $4,200 for the cottage and lots. She gave him her title deeds, from which he drafted, on printed legal forms, the three deeds to Carrie II. Eiddle, which she signed and handed to him. lie placed them of record. The complainant is somewhat confused in her testimony regarding the inducement held out to her by Eiddle to obtain her signatures. She, in one version, states that she was persuaded to hand over her muniments of title and to execute and deliver the deeds, by his fanciful tale that the New York friend was reluctant to part with his money because of his doubts of the values of the properties at the prices fixed by the complainant, and that the myth might be stimulated into lending him the money, if it were made to appear that he, Eiddle, had bought the property at complainant’s figures. The other is, that by these same tokens the “friend” would be persuaded to purchase. It is difficult to understand which of these representations, or if both, were held out to her. She says she was deluded into making the deeds for the vacant lot on May 3d, and notwithstanding Eiddle’s promise at that time to pay the consideration price within one week or to return to her the deeds, and his failure to make good his promise, she, eighteen days afterwards, relying upon like representations, signed the deeds for the cottage and lots. From other testimony given by the complainant, and circumstances in the ease, it is inferable that she sold the property to Eiddle, only deferring the day of payment until he in turn could make sale. At the time of these transactions Eiddle gave to the complainant his promissory note for $5,500, payable in three months, and one thousand shares of capital stock in an oil eompanj''. These, she says, were given to her as a guarantee for the payment of the purchase price or a return of the deeds. About the same time she gave to- Eiddle two- receipts dated May 21st and 28th, all in her handwriting, in'which she acknowledged the payment of $1,000 and $1,500, respectively, and in the latter stated that it was for “payment on Spring Lake properties.” To one Myers, a real estate agent in Spring Lake who had charge oí the renting of her cottages, she said she had sold it to Riddle. To a Mrs. Weinmiller, who intimated she understood the property had been sold to Riddle, she replied that she had not sold it to him because he had not as yet paid her the consideration price. Another circumstance is that Stokes, the purchaser of the vacant lot, discovered, in searching the title, that the “bluffs” had been omitted from the deed of May 3d, recorded May 4th, and requested Riddle to perfect the title. The deed of May 3d, recorded May 14th, resulted. Although the complainant is insistent that she signed the two deeds for the vacant lot at one time and the deed for the cottage at another, she manifestly is mistaken, because she admits that Riddle told her that he had searched the title and found that she had the riparian rights (“bluffs”), and that he asked her for the deed, which fits into the history as told by Stokes and also into the testimony of Housel, the commissioner, that upon three separate occasions he, at the request of Riddle, took the acknowledgments to the deeds.

The complainant has suffered a grievous wrong, but her predicament is due to her own folly and gross negligence while participating with her wrong-doer in an effort, as she supposed, to mislead and deceive the latter’s New York friend. Whatever may have been the guile of Riddle, it is apparent that the complainant purposed clothing him with the indicia of ownership, with design that the “friend” should believe the title of the property to be in Riddle. Obsessed by this she east aside precaution and, in disregard of the dictates of common prudence, signed and delivered to him what she knew to be deeds, the legal effect of which she undoubtedly fully comprehended, trusting to his assurance that they would not be binding, and would be returned if he were unsuccessful in borrowing money on their credit, or unable to make sale. She made it possible for Riddle to place the deeds of record and hold himself out to those who dealt with him as the rightful owner with power to sell and convey. The 'defendants—innocent purchasers—parted with their money, relying upon the representations of Riddle and the public records. Had the complainant exercised common sense and ordinary diligence even after the delivery of the deeds, she could liave protected herself against the conveyances and mortgages made in July. Biddle had promised to pay her the consideration price or return the deeds within a week after he got them, but she waited supinely for three months while he trafficked with the property. There is no principle of equity better settled nor more uniformly enforced than “whenever one of two innocent persons must suffer a loss by the acts of a third, he who has enabled such third person to occasion the loss must sustain it.” Or, as it is sometimes expressed, “that as between two persons equally innocent, a loss resulting from the fraudulent acts of another shall rest upon him by whose acts or omissions the fraud was made possible.” Mr. Chief-Justice Holt puts it: “For, seeing that somebody must be the loser by this deceit, it is more reason that he who employed and put trust and confidence in the deceiver should be the loser than a stranger.” Halsted v. Colvin, 51 N. J. Eq. (6 Dick.) 387. That the complainant intended to limit the operation of her duplicity to Biddle’s supposed New York friend is irrelevant. Horn v. Cole, 51 N. H. 287.

The complainant, however, contends that the deeds were void ab initio, and that she comes within the exception to the rule of the application of the doctrine of estoppel (Pom. Eq. Jur. (3d ed.) § 918) because, as she asserts (a) her signature to the deeds was not, at the time of execution, attested by a seal; (b) the name of the grantee was erased and another substituted; or (c) the deeds were misread to her as fo¡ the name of the grantee; (d) there was no delivery and acceptance of the deeds; (e) they were not acknowledged by her. None of these, however, is supported, other than by the testimony of the complainant, except the last relating to the acknowledgments. To decree an annulment of deeds, to all appearances regular in form, and executed under circumstances as these are admitted to have been made, on the ground that they are void (not voidable), requires more than the uncorroborated and doubtful evidence of the complainant. She testified under great stress of self-preservation and without fear of contradiction. Eiddle, it was stated at the hearing, is non compos mentis. That she unconsciously colored her story and related as facts matters which were but impressions created by a sad retrospection, is apparent. An examination of ber testimony demonstrates this.

A seal, of course, is essential to a deed. That it was affixed at the time of execution is presumed from the concluding words of the deeds, which recite that the grantor “set her hand and seal the day and year first above written.” Dev. Deeds § 246. The complainant swears positively to the absence of seals, but T view her statement as speaking a conviction rather than recollection of the fact. One, at least, of the deeds bears a printed scroll over which is pasted a wafer, clearly indicating that she is in error. Besides, according to her story, she observed the deeds in the most casual manner at the time of signing. Her declaration that she would not have signed with a seal is the refrain of a bitter experience, and not descriptive of her earlier attitude, because it ié evident that at the time she signed the deeds her confidence in Riddle was so firm that a seal would not have checked her course. The fact is, she was conscious the papers she was signing were deeds. She had previously transferred real estate and knew the requirements of deeds. And further, she intended that they should be regarded as deeds by the New York friend to whom they were to be shown. The testimony does not satisfy me that they were not executed under seal.

The claim that the name of Carrie IT. Riddle as grantee was substituted for that of her husband, is refuted by the documents. The deeds are typewritten; the paper shows no traces of erasures, and counsel at the hearing conceded that his client’s impressions were illTfounded.

It may have been, as the complainant testifies, that the grantee’s name vas misread to her by Riddle, he using his own name, but this could have been readily discovered had she exercised but ordinary diligence and observed before signing. She contented herself with reading only the latter portion of the deeds, and even had she done this with common care, it would have been disclosed, in the covenants of warranty, that Carrie H. Riddle was a party.

It is urged that there was neither delivery nor acceptance of the deeds, and consequently there was no divestiture of title. Both are indispensable. Rowley v. Bowyer, 75 N. J. Eq. (5 Buch.) 80; Skillman v. Skillman, 15 N. J. Eq. (2 McCart.) 388. The deeds were, in fact, handed by the complainant to David H. Eiddle. The conclusion at which I have arrived in disposing of the equities of these litigants malees it of little moment whether Carrie H. Eiddle is to -be regarded as the true or as an imposed grantee to and by whom, through the medium of her husband, the deeds were delivered and accepted.

That the deeds were not acknowledged by the complainant is affirmed by her, and in this she is corroborated by the certifying commissioner. His explanation is that upon three separate occasions he was called upon by Eiddle to take the acknowledgments of the supposed grantor of the deeds in dispute. Each time the woman, whoever she was, simulated signing her name in his presence, although he did not actually see her write. She was represented, but not introduced, to him by Eiddle, as Mrs. Moore, and upon her acknowledgment, made in response to Eiddle’s invitation, the commissioner formally certified. He was positive that the woman was not the complainant. He described her as of forty-five years, while the complainant is seventy. The witness is disinterested, and his credibility is unchallenged. That the complainant was impersonated by the procurement of Eiddle, and the commissioner imposed upon, and that the certificates of acknowledgment are false, cannot be doubted. A certificate of acknowledgment is, however, not essential to the validity of a deed of a feme sole, and forms no part of it. Its purpose is twofold: to supply evidence of its due execution in lieu of direct proof, and to enable it to.be recorded. To. accomplish the latter the deeds could as well have been proved by Eiddle as subscribing witness. Viewing them as falsely certified, they are a fraud upon the records, but their validity as between the parties and those holding under them, depends upon considerations wholly aside from this fraud.

The principle on which the complainant relies is illustrated in Russell v. American Bell Telephone Co., 180 Mass. 467, but I find nothing in the grounds assigned which relieves her of the penalty of her indiscretions. The complainant’s conduct eslops her from asserting her title as against the innocent purchasers. The bill will be dismissed as to all the defendants except the Biddles. Carrie H. Biddle will be decreed to hold the $300 mortgage in trust for the complainant.

The Pastorfields answered, setting up their title as innocent purchasers, and at the hearing were represented by counsel, although they did not appear. Counsel declined to press the defence set up by their answer, but refused to wUhdraw it. The reason for this, as stated by counsel, was that the Pastorfields have pending in this court an action against the Biddles to set aside a conveyance given in exchange for the property involved in this suit. Success in that action depends upon the outcome of this litigation. I must, however, dispose of this case upon the pleadings and proofs before me. They show title in these defendants, and it is not denied that it was acquired innocently and for value. If counsel will give formal consent to that effect, I will advise that the deed to the Pastorfields be set aside. The defendants who are dismissed are entitled to costs.


author: Backus, V. C.

text:
    Cape May Yacht Club v. Cape May Yacht and Country Club.
    [Argued June 17th, 1913.
    Decided June 30th, 1913.]
    1. Under 1 Comp. Stat. 1910 p. ¡¡51 § 118, providing that no appeal from a decree granting an injunction shall suspend the injunction without an order of the chancellor or of the court of errors and appeals for that purpose, an injunction, decretal or by writ, is unaffected by an appeal, and a defendant desiring to be relieved from an injunction pending his appeal therefrom must move for that pui’pose either before the ehancenor or in the appellate tribunal.
    2. The issuance pending an appeal of an injunction restraining defendant, a yacht club, in the language of the decree which enjoins it from engaging in the enterprise of a yacht club under its corporate title, and from using a pennant so as to mislead the public to the detriment of complainant’s undertaking, will not destroy the subject-matter of the appeal, for defendant may engage in its enterprise as a yachting club without advertising under the name and pennant complained of.
    On motion for a writ of injunction pursuant to decree.

      Messrs. McCarter & English, for the motion.

      Mr. Lewis Starr, contra.

   Backus, V. C.

The final decree in this case enjoins the defendant from engaging in the enterprise of a yacht club under its corporate title, and from using a certain pennant, the former being so near alike in sound and appearance, and the other in appearance, to the corporate title and pennant of the complainant, as to mislead the public to the detriment of the complainant’s undertaking. The decree also directs a writ of injunction restraining the defendant in the language of the decretal injunction. The issuance of the. writ was stayed by the filing of a notice of appeal, as provided by rule 150 of this court, Application is now made non obstante for the writ. It is resisted on the ground that the enforcement of the writ will destroy the subject-matter of the appeal. This plea is not available on this motion.

Following the broad doctrine laid down in Pennsylvania Railroad Co. v. National Docks Railroad Co., 54. N. J. Eq. (9 Dick.) 647, which led to much confusion of the bar and occasioned considerable construction by the bench, before it was confined to its proper scope as illustrated by the chancellor in Ashby v. Yetter, 78 N. J. Eq. (8 Buch.) 173, the legislature, in 1902, defined the status of an injunction pending on appeal and fixed the practice as follows:

“No appeal taken from an order or decree granting an injunction shall suspend or modify the operation of the injunction without an order of the chancellor or of the court of errors and appeals for that purpose, and such suspension or modification shall extend only so far as may be necessary to preserve the subject of the appeal, and shall not in any case be allowed to destroy the right established or protected by the order or decree appealed from.” 1 Comp. Stat. p. 451.

The legislature thus declared that an injunction, decretal or by-writ, shall be in full vigor until suspended or modified. The statute proscribes speculation as to its operation, and puts at rest the office of an appeal, and regulates the procedure. Whatever may be the effect of an appeal in other cases, the legislature has restored the salutary policy that an injunction must be implicitly obeyed until reversed, or unless modified or suspended, pending an appeal, in the manner prescribed by the statute. High Inj. § 1416. This view assimilates with the practice pursued by Vice-Chancellor Bergen in Johnson, v. Seabury and Johnson, 61 All. Rep. 563, and by Chancellor Magie in Laird v. Atlantic Coast Sanitary Co., 73 N. J. Eq. (3 Buch.) 5. If a defendant under restraint desires to be relieved, pending an appeal, he must move for that purpose, either in this or in the appellate tribunal. No such application has been made in this case. On the contrary, the defendant, as it appeared at the hearing, has disregarded the decree upon the assurance apparently, that under rule 150, a timely appeal suspends the process of injunction as well as the injunctive force of the decree. Eor this defiance it is amenable to discipline.

The provisions of rules 118 and 150 of this court, that process shall not issue on a final decree within ten days of the filing thereof, and not thereafter, if within the ten days an appeal shall be taken, unless otherwise ordered by this court, or the court of errors and appeals, are concordant with the statutory regulation. These merely give to a defeated litigant opportunity to accommodate himself to the situation created by the decree, and to a review thereof by the appellate court, if he is dissatisfied.

It is objected that the issuing of the writ will destroy the subject-matter of the appeal. This is a misconception. A compliance with its admonitions may have that effect, but the defendant may have relief by pursuing the course herein indicated.

Treating the objection as available at this time, I regard it as being without merit. To prevent the defendant, pending an appeal, from using an identifying title and pennant inhibited by the decree, will not destroy the subject-matter of the appeal. The defendant, as a eorjiorate body, and its enterprise as a yachting club, and its pastimes and pursuits are not interfered with. The only thing enjoined is, that it shall not advertise under a name and pennant interdicted by the decree. Upon an application for a modification or suspension of the decree, the defendant may possibly be able to submit additional reasons why there should be a stay. A writ will issue. The complainant is entitled to costs.


author: Backes, V. C.

text:
    Georgianna Shinnen v. Morris Klein et ux., et al.
    [Argued June 24th, 1913.
    Decided July 3d, 1913.]
    1. In a suit to foreclose a mortgage on a lot with a one hundred and ten-foot front, sixty feet of which had been conveyed by the mortgagor to parties who gave a second mortgage thereon, and the remaining fifty feet of which was subsequently conveyed to S., a decree pro confesso was taken against all of the defendants, and the suit was referred to a master to report the amount due on both mortgages, their priority, and the order in which the lands should be sold. The master reported that the lands of S. should be first sold to raise $3,500 to apply on the first mortgage, that the sixty-foot lot should be sold, and the proceeds applied on both mortgages, and that, if the proceeds of the sale of such lot were insufficient to pay the first mortgage, the deficiency should be made up from the surplus realized from the sale' of the property of S. S. excepted to that portion of the report requiring an appropriation of the proceeds of the sale of his lands in excess of $3,500. It appeared that the first mortgage contained a clause, which was not pleaded, providing that the mortgagees would release the fifty-foot lot upon the payment of $3,500.—Held, that the question raised by the exceptions could not be determined without the filing of a cross-bill, since the defendants interested in the sixty-foot lot had a right to assume that it would be reported that the lands should be sold in the inverse order of alienation, and were entitled to their day in court to controvert the equity asserted by S.
    2. The master in so reporting the equity of S. overstepped the directions of the order of reference, and violated chancery court rule 24, forbidding the making of a report or decree, postponing the rights or claims of a defendant against whom a decree pro confesso has been taken, unless the priority of the rights or claims of such other defendant and the facts upon which it depends are distinctly set forth in the bill.

      On exceptions to master’s report.

      Mr. William M. Clevenger, for the complainant.

      Messrs. Bourgeois & Coulomb, for the exceptant.
   Backes, V. C.

This is a foreclosure bill. The allegations of the bill are that on November 16th, 1910, William Klein and David Miller executed to the complainant a mortgage conveying a lot of land fronting one hundred and ten feet on the easterly side of New Jersey avenue, Atlantic City, to secure the sum of $8,500, in five years, with interest payable semi-annually. On January lCth, 1912, the most northerly sixty feet were conveyed to Sarah Hollingshead, who made a mortgage thereon to secure the sum of $3,500, which mortgage is now held by the estate of Peter B. Risle3r. She subsequently conveyed the property to Morris Klein, the present owner, against whom one Solomon Goldman holds a judgment. After the making of the Hollingshead deed her grantors conveyed the remaining fifty feet, and by divers mesne conveyance the fee is now vested in Antonio S. Siracusa. The bill alleges a default in the payment of an installment of interest, and an election by the complainant that the full amount is due and payable, according to the terms of the mortgage. A decree pro confesso was taken against all of the defendants, and it was referred to a master to ascertain and report the amount due to the complainant and the Risley estate, and the priority of their respective mortgages, and whether the mortgaged lands should be sold as a whole, and if in parts, in what order. The master reported that the lands of Siracusa be first sold to raise $3,500 and interest, to be applied in reduction of the complainant’s debt, and that the lands of Morris Klein be sold to recover the balance, and also the moneys due on the Risley mortgage; and if the moneys realized from the sale of the Klein property be insufficient to pay the balance of the complainant’s debt, that the deficiency be made up from any surplus moneys realized from the sale of the Siracusa property. Siracusa excepts to that portion of the report which requires an appropriation of the proceeds of the sale of his lands, in excess of $3,500 and interest, to the payment of the complainant’s mortgage in the event of a deficiency.

At the hearing before the master it appeared that the complainant’s mortgage contained a special defeasance clause in these words:

"The party of the second part (complainant) agrees to release so much of the above recited (mortgaged) premises, as is covered by the Garrett deeds, the Mathis deed and the Mott deed, upon the payment of the sum of thirty-five hundred dollars.”

The part of the mortgaged premises referred to is the land of Siracusa who, at the master’s hearing, offered to pay the $3,500 and interest in discharge of his lands and now tenders himself ready to pay the money into court.

Upon the argument counsel for the complainant and ex-ceptant requested a decision on the question raised by the exception, and to this end consented to waive all formality of pleading. Much as I would like to aid them, I find it impossible to accommodate a judicial expression upon the issues involved in the exception to those presented by the bill. The master reported -an equity not disclosed by the complainant’s bill which, if adopted, would effect a postponement of the rights and claims of some of the defendants as fixed by the bill. In this he overstepped the directions of the order of reference, and violated the provisions of rule 24 of this court, which forbids the making of a report or decree postponing the rights or claims of a defendant, against whom a decree pro confesso has been taken “unless the priority of the rights or claims of such other-defendant, and the facts upon which it depends are distinctly-set forth in the bill.” The bill of complaint is silent as to the special defeasance clause, relating to the exceptant’s land, and of which he now desires to avail himself. None of the defendants answered. Presumably they accepted the allegations of the: bill as correctly setting forth the equities of the parties and assumed, as they had the right to, that they would be reported in the order therein stated. According to these allegations it was the right of Morris 'Klein, the owner of the lands lastly conveyed, the Risley estate as mortgagee, and Goldman as a judgment creditor, to have it reported that the mortgaged lands be .sold in parcels in the inverse order of alienation and that the •exceptant’s premises be sold first, without limitation as to the appropriation of the proceeds. If there is a restriction as to the amount for which the exceptant’s land may be called upon to respond in satisfaction of the mortgage debt, and I am in■■clined to think there is, it should have been pleaded in the bill or set up by way of cross-bill.

The defendants alluded to are entitled to their day in court to controvert the claim now asserted by the exceptant. A similar equity was set up by cross-bill in American Net and Twine Co. v. Githens, 57 N. J. Eq. (12 Dick.) 539, and permitted and directed to be done in Hall v. Home Building Co., 56 N. J. Eq. (11 Dick.) 304.

The exception is overruled. No costs. A decree on the report will be denied. Upon motion an order will be made setting aside the reference and the report. Leave will be granted to file a cross-bill. If, however, Morris Klein, the Risley estate and Goldman will submit themselves to a decree on the merits of the exception, the exception will be retained and disposed of.

■ If the complainant had pursued the practice laid down in rules 21 and 22, which provide that upon default the complainant may proceed ex parte without reference, or if upon reference, then without notice to the defendants, and had observed the requirement of rule 24, the present difficulty would not have been encountered.


text:
    Anderson Bourgeois v. Risley Real Estate Company et al.
    [Submitted July 8th, 1913.
    Decided July 18th, 1913.]
    1. Evidence held to require a finding that a conveyance of attached land belonging to a debtor, filed for record after the ‘ attachment and dated one day prior to the date of the writ, conveying the property to a corporation, the stock of which was controlled by the debtor’s wife, was fraudulent as against creditors.
    2. Conveyance of property of an insolvent debtor to a corporation formed by him for the sole purpose of taking over the property, the consideration of which is the issuance of all the capital stock of the company, is void as against creditors.
    3. Where attached property valued at $25,000 was sold to an attaching creditor for $1,870 under a judgment for $2,662.34 and the creditor thereupon sued in equity to set aside an alleged fraudulent conveyance of the property to a corporation, which conveyance was found to be fraudulent, he was only entitled to the amount due on his debt and not to the property, under the rule that he who seeks equity must do equity.

      Messrs. Bourgeois & Coulomb, for the complainant.

      Mr. S. Cameron Hinkle ancl Mr. Ulysses Q. Styron, for the defendants.
   Backus, V. C.

The original bill in this case was filed by the above-named complainant in 1902. In it he alleges that on September 16th, 1901, the defendant Daniel L. Eisley was indebted to him in the sum of $2,662.34, and to recover this debt he caused a writ of attachment to be issued out of the circuit court of Capo May county on the following day, by virtue of which the sheriff attached many and large tracts of land in that county, as the property of the debtor. Subsequently, other lands were added to the levy by direction of the court. In due time the property was sold by the auditor appointed in the suit to the complainant on his bid of $1,870, and after confirmation it was conveyed to him. The bill further alleges that after the attachment issued, on October 7th, 1901, Daniel D. Risley placed on record in the clerk’s office of Cape May county a deed bearing date September 16th, 1901, one day prior to the issuing of the writ of attachment, whereby he purported to convey to the Risley Real Estate Company some of the'lands attached and sold to the complainant. The bill charges that this conveyance was made without consideration and for the purpose of cheating and defrauding creditors. The prayer is, that it may be decreed that (a) the defendants (Risley or the Risley Real Estate Company) pay the debt; (5) the deed be set aside; (c) the lands have been sold by the auditor free and discharged of said deed; (d) the Risley Real Estate Company reconvey the premises and to deliver up the deed for cancellation. There is also a prayer for general relief.

The .Risley Real Estate Company answered. A default decree was taken against Risley. After issue was joined the complainant obtained leave to file an amended or supplemental bill. Instead of doing either he filed a bill styled "amended bill” in the name of Annie Estell Bourgeois as trustee for the complainant, in which he repeated the statements, charges and prayers of the original bill, with a single variance, that the lands were sold by the auditor in attachment to the substituted complainant, and that she holds them in trust for the original complainant. Anderson Bourgeois is made a party defendant to the amended bill. Risley and the Risley Real Estate Company answered, not denying the debt, admitting the making of the conveyance, but denying the charge of fraud and asserting that the grantor (Risley) received in payment for the conveyance, $1,000 in cash and two hundred and forty shares of the capital stock of the Risley Real Estate Company. The cause lagged until 1913, when it was brought to trial. At, the conclusion of the testimonj', and the arguments of counsel, it was announced that a decree would be advised in favor of the complainant.

The testimony left no doubt that the deed was a fraud upon the complainant and was made to put the debtor’s property beyond the reach of creditors. Eisley dealt extensively in suburban real estate. His scheme was to buy up large tracts of shore and near-shore lands, subdivide and plot them into building lots and sell them on installment payments. He had offices for the transaction of his affairs in a number of cities throughout the country. Shortly before the attachment proceedings were begun he formed the Eisley Eeal Estate Company, with a paid in capital of $1,000. He and two dummies were the incorporators and directors. To this company he conveyed the prop'erty in controversy, receiving in return the $1,000 he paid (if he ever paid it) as the paid in and working capital of the company and two hundred and forty shares of the two hundred and fifty shares of the issued capital stock of the company. The two hundred and forty shares of the capital stock of the Eisley Eeal Estate Company Eisley immediately transferred to a woman, who afterwards (he was then a married man) became and now is his wife. He claims that he sold them to her for about $15,000, under an agreement which he saj^s he had with he'r before the formation of the" company. Eor this we have only his word, which is absolutely unreliable. The wife, although accessible, was not called as a witness. The remaining eight shares (the two dummies each held a share) held by him he claims to have sold for cash. Eisley continued in control of the company for some time after he parted with his stock; he claims it was only in the capacity of manager or sales agent.

A conveyance of the property of an insolvent debtor to a corporation formed by him for the sole purpose of taking over the property, the consideration of which is the issuance of all of the capital stock of the company, is void as against creditors. Terhune v. Bank, 45 N. J. Eq. (18 Stew.) 344; Montgomery-Webb Company v. Dienelt, 19 Atl. Rep. 428 ; Sullivan v. International Baking Co., 60 N. J. Eq. (15 Dick.) 80; Van Campen v. Ingram, 12 Atl. Rep. 537; First National Bank v. Trebein Company, 52 N. E. Rep. 834; Roberts v. Hughes Company, 83 Atl. Rep. 807; Booth v. Bunce, 88 Am. Dec. 372; 33 N. Y. 139.

The evidence also strongly indicates that the deed made by Eisley to the company, although it bears date September 16th, 1901, was not signed by him^mtil long after that time, and the probabilities are, not until about the date of its lodgment for record, October 7th. The acknowledgment is certified by a New Jersey commissioner residing in Philadelphia as of September 16th, and as having been acknowledged in Philadelphia, notwithstanding it appears pretty clearly that Risley at that time was in Denver, Colorado. The commissioner admitted that he sometimes, for the accommodation of Risley, had executed certificates of his acknowledgment to deeds without requiring his presence. The date in the certificate is not of the handwriting of the commissioner, nor is the ink the same as used by the commissioner in his signature. The handwriting of the date is strikingly like that of Risley, and altogether the impression made is, that the acknowledgment was certified by the commissioner on a blank form of deed, which Risley afterwards filled out and had recorded. Another significant fact is, that after the date of the deed, and before it was recorded, Risley made numerous conveyances of land, parcels of those embraced in the disputed deed, indicating that it was not then in existence. Whether the deed was antedated was not necessary to be decided, but the circumstances attending its execution and recording serves in establishing its fraudulent character. The whole contrivance was a palpable cheat and fraud.

The complainant now insists that the deed should be set aside in loto, because of the turpitude involved in its making, and the cloud thereby created removed from the title acquired by the sale in the proceedings at law. The property was estimated to be of the value of $25,000. Indeed it was stated by counsel that the lands at the time they were seized and sold to the complainant, were under contract of sale to the customers of Risley and the Risley Real Estate Company, upon which there was due sums aggregating $60,000. To grant the broad relief asked would yield the complainant tenfold and more the amount of the debt. It would be giving the spoils as well as the fruits of the litigation.

To decree the lands absolute in the complainant would create a situation quite as iniquitous and oppressive and as obnoxious to a court of conscience as that arising out of the fraudulent conduct of the defendants. Satisfaction of the debt and not pillage of the debtor’s estate is equity’s relief. Payne v. Burks, 4 B. Monr. 492.

The complainant, by virtue of the conveyance from the auditor in attachment, is undoubtedly vested with the legal title to the lands here involved, the possession of -which he might obtain by pursuing the remedies provided by the law courts—an action in ejectment—in which perhaps equity would not interfere in behalf of the particeps criminis. Mulford v. Peterson, 35 N. J. Law (5 Vr.) 127 Mulford v. Tunis, 35 N. J. Law (6 Vr.) 256. But when a suitor appeals to a court of equity, he must abide its principles and submit himself to its policy and practice before relief will be afforded. “He who seeks equity must do equity” is a cardinal maxim. Professor Pomeroy, in expressing its meaning, quotes an eminent judge thus:

“The court of equity refuses its aid to give to the plaintiff what the law would give him if the courts of common law had jurisdiction to enforce it, without imposing upon him conditions which the court considers he ought to comply with, although the subject of the condition should be one which the court would not otherwise enforce.” Pom. Ex. Jwr. § 885.

And he adds:

“The rule may apply, and under its operation an equitable right may be secured or an equitable relief awarded to the defendant which could not be obtained by him in any other manner—that is, which a court of equity in conformity with its settled methods, either would not, or even could not. have secured or conferred or awarded by its decree in a suit brought for that purpose by him as the plaintiff.” Ihkl. § 386.

In Doughty v. Doughty, 10 N. J. Eq. (2 Stock.) 347, Chancellor Williamson, in applying this doctrine, says:

“One acknowledged principle on which courts of equity give relief is to prevent an advantage gained at law from' being used against conscience.”

A conveyance made in fraud of creditors was at the common law, and is by statute, absolutely void as against creditors. But it is void only as against those creditors who attack it, and then only to the extent of their debts. 20 Cyc. 819, 821; Tudor v. Tudor, 80 Vt. 220.

A purchaser under an execution sale at law who invokes equity jurisdiction to set aside a fraudulent deed which interferes with his legal title, derives his rights from and is limited to those of the creditor. Smith v. Espy, 9 N. J. Eq. (1 Stock.) 160.

When the execution creditor is the purchaser he will not be permitted to retain advantage of a sale at law when to do so would be inequitable. Payne v. Burks, supra.

In Smith v. Vreeland, 16 N. J. Eq. (1 C. E. Gr.) 198, Chancellor Green, in dealing with a situation somewhat similar to the one sub judice, says:

“lie (the complainant) now asks this court, by its decree, to declare the previous conveyances fraudulent, and thus confirm his title. The balance due on his judgments at the time of the sale amounted to about three hundred dollars. The value of the property, according to the testimony of his witnesses, was $3,-000, exceeding by about thirteen hundred dollars, the amount of the encumbrances tipon it. * * * All that the complainant can ask in equity is that his debt shall be paid. If his legal rights are more extensive, they must be enforced at law without the aid of this court. Though he has acquired a legal advantage over the prior judgment of the defendant, there is no reason why he should be permitted to speculate upon that advantage at the expense of the defendant.”

In Kinmonth v. White, 61 N. J. Eq. (16 Dick.) 358, Vice-Chancellor Pitney, in marshaling assets in a contest as between judgment creditors, says:

“It was at the option of the judgment creditors either to proceed at law and sell the land and test the validity of the conveyances by an action of ejectment, or to first file their bills in this court to procure a declaration that the conveyances were void, and then to sell the lands for the payment of the debts. * * * And if, in such case, after purchasing at sheriff’s sale, without resorting to ejectment, he came into this court, as he might do, to have the title derived under the sheriff’s deed declared valid, this court granted relief only upon condition that he should give credit on his judgment for the fair value of the land.”

In Campbell v. Weber, 80 N. J. Eq. (10 Buch.) 553, the court of errors and appeals plainly intimated its views of the status of a fraudulent grantee when attacked by a judgment creditor. In that case a judgment debtor conveyed lands to his wife, through an intermediary, in fraud of creditors, and in setting the deed aside, Vice-Chancellor Walker expressed himself, that the present estate of the wife “must be swept away from her because it rests upon the conveyances made to defraud the complainant, a creditor; so much, at least, as is necessary must be swept away, but the balance, if any, will be hers.” In affirming the decree the court of errors and appeals took exception to this language, saying: “We prefer to say that she took an estate in fee-simple, subject to the right of the judgment creditor to have the conveyance treated as void as against his debt.”

This is to be regarded as a declaration that the fraudulent creditor’s status is not to be disturbed more than is necessary to make the creditor whole.

In Miller v. Jamison, 26 N. J. Eq. (11 C. E. Gr.) 404 (reversed on the facts, 27 N. J. Eq. (12 C. E. Gr.) 586), Chancellor Eunyon set aside absolutely a fraudulent conveyance at the instance of a creditor—purchaser at an auditor’s, sale. The ■opinion does not disclose that the question of the defendant’s equities was raised.

In Hildreth v. Sands, 2 Johns. Ch. 35, Chancellor Kent set aside a similar deed, saying:

“There can be no doubt but that the plaintiff, as a purchaser under Whitney’s judgment, is entitled to all of the relief that the creditor himself would have been entitled to, for he stands in his place, and is armed with his rights; and though he be a purchaser at a very low price, yet it was a fair purchase in the regular course of law, and it was owing to the unwarrantable act of the debtor himself in throwing a cloud over the title that bis property was thus sacrificed. It does not become the parties to the fraudulent deed to complain of the plaintiff’s cheap purchase. However it may be regretted that the property has yielded but a very small compensation to the creditors, this fact cannot interfere with the question of right. The auction price was an accidental thing, growing out of the peculiar circumstances of this case, and affects only the parties concerned; but whether such a fraudulent conveyance shall stand or fall is a question deeply interesting to the whole community.”

That case has a marked distinction from the one under consideration. There the complainant was a stranger to the proceedings; he was a purchaser at a public sale and the policy of encouraging attendance at public auctions in the execution of judgments was applied and upheld. Besides, it is difficult to see how the equities, such as are raised in this case, could hare been there adjusted.

It seems to me that the complainant must be content with the grant of that prayer for relief which asks that "the defendants pay the debt.”

The complainant is entitled to a decree setting aside as void the deed from Risley to the Risley Real Estate Company, with costs. If the defendants shall pay to the complainant, and the applying creditors in attachment, their debts pursuant to the decree, the complainant will be ordered to surrender his title. The defendant will be entitled to credit upon the debts to the amount of money realized from the sale in the attachment proceedings of-lands other than those embraced in the fraudulent deed.

Application may be made for counsel fees.


text:
    Vincent Camovito v. Jennie L. Matthews et al.
    [Submitted July 24th, 1913.
    Decided July 24th, 1913.]
    1. A restrictive covenant that all buildings and additions on the land conveyed erected by the grantee, his heirs and assigns should be set back on a line with other buildings on the same side of the street, should be construed as prospective and ambulatory in its operation and application, meaning that, whenever a building line should be created by erections of neighboring owners, the covenantor and his successors in title could accommodate themselves to that line.

      2. A restrictive covenant provided that all buildings arid additions which the grantee, his heirs and assigns should erect on the property should be set back on a line with the other buildings on the same side of tike street.—Held, that the covenant was at least ambiguous, and would not be enforced in equity as against one desiring to construct a business building on the street line after the locality had changed from residential to commercial, and nearly all the buildings devoted to business were constructed on the street line.
    Oh bill, answer, replication and proofs.

      Mr. Hoisted Id. Wow,right and Mr. Frank S. Katsenbach, Jr., for the complainant.

      Mr. Wilfred II. Jayne, Jr., and Mr. B. Ten Broeck Stout, for the defendants.
   Backes, V. C.

This is a bill to enforce a restrictive covenant. In 1892 Murray D. Stout, conveyed a vacant lot fronting one hundred feet on the easterly side of Clifton avenue (corner of Fourth street), Lakewood, New Jersey, to Peter W. Fiek. The deed contained this covenant:

“All buildings and additions thereto which the said party of the second part, his heirs and assigns shall erect or cause to be erected at any time now or hereafter will be set hack on a line with the other buildings on the same side of the aforesaid avenue and street.”

The covenant was not one of a community scheme. By divers mesne conveyances the complainant and Jennie L. Matthews, defendant, are each owners of fifty feet frontage of this land. The defendant’s title was the first taken from the covenantor. At the time the covenant was made there were but two or three buildings on the east side of Clifton avenue. These set back from the street line approximately thirteen feet. Former owners erected buildings on the lands of the complainant and defendant in about the same range, which are now used as stores with dwellings overhead. Trade has pushed its way up along Clifton avenue, so that at the present time the locality of the defendant’s property is more commercial than residential, and nearly all of the buildings devoted to business are built out to the street line. In keeping with, them the defendant is building and extending her store to the street line of Clifton avenue. The complainant, who evidently is not inclined to keep up with the progress of the neighborhood, seeks to restrain her by an enforcement of the covenant of their predecessor in title. As I view the covenant it is prospective and ambulatory in its operation and application. Its meaning is that wherever the building line should be created by erections of neighboring owners, to that line the covenantor and his successor in title could accommodate themselves. No other reasonable construction, it .seems to. me, can be given to the covenant. The contention of the complainant that the covenant relates to the line of the two buildings then (1892) on the east side of Clifton avenue (Palmer House and Brown’s store) is not impressive.

There is, however, another consideration which precludes relief to the complainant. The covenant is at least vague and ambiguous. Courts of equity do not aid one man to restrict ■another in the uses to which he may put his property unless the right to such aid is clear, and in cases when the right of the •complainant to relief by the enforcement of a restrictive covenant is doubtful “to doubt is to deny.” Fortesque v. Carroll, 76 N. J. Eq. (6 Buch.) 583; Howland v. Andrus, 81 N. J. Eq. (11 Buch.) 175.

The bill will be dismissed, with costs.


text:
    Richard Yetman v. Jackson Hedgeman et al.
    [Argued July 21st, 1913.
    Decided August 7th, 1913.]
    1. Where a husband pays the purchase price of land which he procures to be conveyed to his wife, it will be presumed that he intended a gift to or settlement on iher, and not a resulting trust, to rebut which presumption proof of circumstances, certain, definite, reliable and convincing, must be introduced, leaving no reasonable doubt as to the intention of the parties.
    2. In a suit by a husband to enforce a resulting trust of land purchased by him and conveyed to his wife, evidence that after such conveyance she acknowledged by words and acts that she held the land in trust, and that it was not the intention of the parties that the deed should operate as a gift to iher, was admissible.
    3. Where land, purchased and paid for by a husband, was conveyed to-his wife, evidence held to require a finding that a resulting trust for the husband’s benefit was intended, and not a gift to the wife.
    4. Since a resulting trust must arise at the instant the deed is taken and the legal title vestéd in the grantee, and, in order to determine the existence of such a trust, the situation when the title passed is the controlling factor, a subsequent payment of purchase-money will not by relation attach a resultilng trust to the original purchase.
    5. Where a husband purchased real property, paying a portion of the-consideration, contracting to pay the balance, and assuming mortgages thereon, and had the title conveyed to the wife, but not intending a gift to or settlement on her. he being bound to make the subsequent payments of the purchase price, such payments made after the legal title-vested in the wife took effect by relation as of the time the title passed, and were available to establish a resulting trust.
    On bill, answer, replication and proofs.

      Mr. William A. Goddingbon, for the complainant.

      Mr. Alfred B. Gosey, for the defendants.
   Backes, Y. C.

The bill of complaint alleges: That the complainant purchased a house, No. 616 East Third street, and the lot adjoining, in Plainfield, New Jersey, the title whereof was taken in the name of his wife, Sarah H. Letman; that the wife is now deceased, without having had children by the complainant, leaving a brother and sisters, and children of deceased sisters, the defendants in tins cause, who claim the property by inheritance; that Sarah was the complainant’s second wife; that he had children by a former wife; that the complainant and Sarah discussed the matter of the purchase of the property, and wanted it so held that it could be held and enjoyed by them and the survivor of them during their joint and several lives; that the complainant and his wife were ignorant of the law in such matters and they conceived and understood the law to be, that if the deed for the said premises should be made to the wife, that the enjoyment of the said premises would then be secured to her during her life, and if she should predecease the complainant, that then he would take the absolute title by inheritance from his said wife; that acting under such misapprehension of the law, they took the title in the name of the wife; that the consideration of $1,600 was paid by the complainant. The original prayer was that the lands and premises might be decreed to be the absolute property in fee-simple of the com-, plainant. As amended it prays that the deed be reformed so that it should read

“unto the said Sarah H. Yetman for life and then unto the said Richard Yetman, his heirs and assigns, to the only proper benefit and behoof of the said Richard Yetman, his heirs and assigns forever, * * * and that the said lands and premises be determined to be the absolute property of the said Richard Yetman in fee.”

There is also a prayer for general relief. The bill in reality is one to establish a resulting trust of the fee in remainder, and the cause was tried, upon that theory. If necessary the prayer may be further amended. The prayer as it stands, instead of asking generally that a trust be declared, prays one of the courses by which relief, as of a resulting trust, may be effected, and in conjunction with the prayer for general relief, it may be sufficient. The allegation of the bill that the title was taken in the name of the wife, because of a mutual mistake of the law is not pleaded as a substantive cause for action, 'but is to be regarded as a statement manifesting the intention of the parties, and an appeal for relief on that score is not now entertained, although under some circumstances it might and ought to be favorably considered.

Assuming, and which I find to be the fact as will hereafter appear, that the complainant paid the purchase price, he is at the outset confronted by the presumption that he paid it and caused the fee to be vested in his wife, as a gift or settlement upon her, and to overcome this presumption the proof must be equally satisfactory and explicit with the proof required to establish a resulting trust, and the circumstances relied upon must be certain, definite, reliable and convincing, leaving no reasonable doubt as to the intention of the parties. Peer v. Peer, 11 N. J. Eq. (3 Stock.) 432; Read v. Huff, 40 N. J. Eq. (13 Stew.) 229; McGee v. McGee, 81 N. J. Eq. (11 Buch.) 190.

When lands are purchased by one person, who pays the purchase price, and they are conveyed to. another person who is a stranger, a trust in the lands is implied or results in favor of him who has paid the consideration. But where a husband purchases and pays for lands and takes the title in the name of his wife, such a trust does not necessarily result. On the contrary, a presumption arises that the husband has caused the conveyance to be made' to his wife by way of a settlement upon her. Such a presumption may be rebutted-and overcome by proof of facts accompanying the transaction which show that the intention of the parties was that the lands should not be held by the wife as settled upon her, but in trust for the husband. Her subsequent acknowledgment and recognition by words or acts may be given in evidence. If from all the evidence it is clear that the presumption of settlement is rebutted a trust will then result which can be enforced. Duvale v. Duvale, 56 N. J. Eq. (11 Dick.) 375.

In the final analysis, the question “whether a purchase in the name of a wife is a settlement or not, is a question of pure intention, though presumed in the first instance to. be a provision and settlement, but any' antecedent or contemporaneous acts or facts may be received, either to rebut or support the presumption” (Persons v. Persons, 25 N. J. Eq. (10 C. E. Gr.) 250); as well as declaration against interest by the grantee. Duvale v. Duvale, supra.

The facts admitted are these: March 21st, 1899, the complainant entered into a contract in writing with one Philip Cottrell to buyj and to pay therefor $1,550, a lot upon which the house stood. Two hundred dollars was paid down, .and it was agreed that $15 per month with interest was to be paid until the debt was reduced to $800, at which time a deed was to be delivered and a mortgage taken for the balance. In March, 1900, the complainant bought from the same party a strip of land adjoining’ for which $50 was paid at the time. The installments with interest were paid with regularity until the debt was reduced to $1,000, when by deed dated June 6th, 1902, Cottrell and wife conveyed both lots to Sarah, the complainant’s wife. A mortgage was given for the amount of the unpaid purchase price. Later the debt was reduced to $800, and a new mortgage for that sum was made in 1905. In'.the early part of 1905 the house and furniture were partially destroyed by fire. From the insurance the sum of $1,725 was realized, a portion of which was used to rebuild the house, and to replace the furniture; the surplus was applied towards the redemption of the mortgage, which was eventually paid in 1909 and canceled of record.

There is some dispute as to whether the complainant paid the purchase price. That the complainant paid the initial sums, amounting to $250, there can be no doubt. As to the payments of the installments, and those in liquidation of the mortgages, it is claimed that Sarah made contributions out of her earnings as a laundress. The complainant as a coachman earned, beside his keep, approximately forty-five dollars per month, which on pay day he handed to his wife. In this the complainant is corroborated by his two children, and by admissions of his wife, testified to by a number of witnesses. With this money she ran the. home and paid off the debt on the house. Although Sarah was at all times in delicate health, she performed her household duties, and occasionally earned a little money by going out at day work and doing some laundry. What she did with it does not appear, but it may be assumed that she used it in common with her husband’s earnings in running the household. The complainant left the management of the finances to his wife. Indeed, because she had some education, and he was illiterate, he confided all of his business affairs to her, and as I view the situation and conduct of the couple, it is not to be otherwise considered than that the moneys which Sarah used in making the installment payments on her husband’s contract, and the subsequent payments on the mortgage debt were the moneys of the complainant. He paid the purchase price.

Some of the purchase-money was, however, paid by the complainant after the grant to his wife. It is a well-settled principle that a subsequent payment of purchase-money will not by relation attach a resulting trust to the original purchase, for a resulting trust arises from the fact that the money of the real and not the nominal owner formed the consideration of the purchase at the time and became converted into land (Ostheimer v. Single, 73 N. J. Eq. (3 Buch.) 539), and also that a resulting trust must arise at the instant the deed is taken, and the legal title is vested in the grantee, and the situation of the transaction when the title passed is to be looked to> and not the, situation preceding or following that time. Krauth v. Thiele, 45 N. J. Eq. (18 Stew.) 407. By the contract for the purchase of the house-lot the complainant became personally bound to pay $1,550. The installment payments until the amount was reduced to $1,00.0 are to be regarded as having been paid by him in pursuance of Ms legal obligation, notwithstanding Sarah may have mingled her mite with his money. And this holds true with reference to the moneys paid in satisfaction of the mortgages, because the complainant (with Sarah) bound himself by bond to pay the debt secured by the mortgages. So that if these dealings had been between strangers a resulting trust would have arisen, not only to the extent of the purchase-money paid up to the time the legal and equitable title took different directions (Krauth v. Thiele, supra; Cutler v. Tuttle, 19 N. J. Eq. (4 C. E. Gr.) 549), but also as to the monej^s paid after-wards; for payment of the purchase price made after the legal title is vested in pursuance of an antecedent or contemporaneous legal obligation is payment as of the time the title passed. It is not necessary that the consideration should be paid m specie, but anything representing it, coming from or in behalf of the cestui qne trust, will be equally available to protect the beneficial interest. The cases which declare the unavailability of subsequent payments have reference to such as are made pursuant to arrangements concocted after the conveyance had been made and consummated. Lounsbury v. Purdy, 16 Barb. 376; affirmed, 18 N. Y. 515; Gray v. Jordan, 87 Me. 140; Gilchrist v. Brown, 165 Pa. St. 275; Scawin v. Scawin, 1 Younge & C. 65. Or the subsequent payment of the mortgage may be regarded as an enlargement of the trust estate. Perry on Trusts § 133:

A more troublesome topic involves the intention of the parties and whether the proof overcomes the presumption of a gift or settlement. The complainant testified that he and his wife had frequently talked the matter over, and they concluded that because he had children, and she had none, if the conveyance were to be made to him, the children could, after his death, put her out of doors, and because of this they arranged that the title should be taken in her name, for her protection, upon the understanding that after they were both dead, the property was to pass to his children; that it was to be a home for both as long as they lived, and then it was to go to his children, and that by the deed taken in her name, he thought he was accomplishing this result. The rest of the proof -relates to admissions made by Sarah. The daughter of the complainant, Elizabeth Mayse, says that Sarah often told her, and she heard it discussed between her parents,

“that the place belonged to them, was hers and papa’s as long as they lived, and if she was the first to go, it would be papa’s as long as he lived, and if papa was the first to go, it was to be mama’s as long as she lived, and at the end of their lives it belonged to us (his children).”

The son, Edward, says that Sarah told him

“that she had the place in his (father’s) name and her name; that she had it in iher name for protection * * * she had things fixed so that if she was the first to go the place would be papa’s, and if he was the first to go no one could put her out; that after they were both gone, the place would belong to us, sister and I.”

To a half a dozen witnesses Sarah expressed herself, upon as many occasions, variously, that

“she had the property in her name for protection, for herself, because the children were not hers and at ihis (the complainant’s) death, if he died first, she would own the property so the children could not go in until after the father’s (mother’s) death. * * * Me and my husband have got our home and we want to stay here and keep it, there is no one but my husband and myself and we want to enjoy it, * * * she had it in her name not because she didn’t want him to enjoy the place, but she wanted it in her name on account of the children, * * * he might go first and then the children could put her out; that if she happened to go first she would leave it so that it would be to him, and then he would leave it to the children. * * * As for tihe home, pop paid for the home, and it is ours as long as we live, and after we die, if we haven’t paid for it, and Lizzie and Ed can’t pay for it right, they will lose it, * * * it was hers and her husband’s, and if anything ever happened to her and him it would be for the two children; * * * that if she should die that that home that she had there and everything in the house were her own in the house, she paid for the home with his money, and it was his and she wanted him to have it after she died and she had everything fixed. * * * I have it in my name, and after my death, I want it to go to pop, and after that I want the children to have it.”

The statements attributed to Sarah as having been made to the complainant, testified to by two of the defendants and a relative, and denied by the complainant and his two children, to the effect that she owned the house “and if he didn’t like what she said he and his brats could both get out,” if made, were evidently the outbursts of passion probably provoked by some passing domestic discord, and were not meant in the sense which is attempted to be now given them.

The natural bent of people circumstanced as this couple was is not to be overlooked. They were poor, and they labored hard and stinted and strived to get a home, a haven in which to spend their declining years. All that the complainant earned ■ and could save was devoted to this single purpose, and it is only reasonable to- assume that neither party entertained the idea that by taking the title to the land in his wife’s name, the complainant intended to strip himself of all that he had in the world. No such improvidence can be ascribed to either. It cannot be believed that the complainant and his wife intended that after her death these defendants, who -are outsiders, were to enjoy the fruits of his life’s work and he go destitute, and, upon the plainest principle of justice, they ought not.

Furthermore, it is obvious that the complainant and Sarah were of the belief that if the title to the land should be taken in the name of the wife, it would enure to the complainant at her death. Though mistaken in their apprehension of the law, this is at least evidential of an intention that a trust should result (Milner v. Freeman, 40 Ark. 62), and it is more. Although in Fretz v. Roth, 70 N. J. Eq. (4 Robb.) 764, 770, it was said: “Even if it be admitted that the complainant did not understand the legal effect of the deed he gave, it, nevertheless, must be held, under long-settled principles, that he is remediless,” yet, under circumstances such as are here disclosed, where it appears that it was intended that the gift should be of a limited estate, and the method used to accomplish that end was misunderstood, and the legal effect was contrary to the intention of the parties, equity will grant relief. Garnsey v. Mundy, 24 N. J. Eq. (9 C. E. Gr.) 243; Mulock v. Mulock, 31 N. J. Eq. (4 Stew.) 594; Duvale v. Duvale, supra.

Upon the whole case the proofs and circumstances satisfactorily and convincingly rebut the presumption of a settlement other than of an estate for life. The entire atmosphere of the cause repels the implication of a gift, absolute, in fee-simple. I will advise a decree declaring that Sarah Yetman held the lands in trust for the complainant, subject to her life estate; that the same descended to the defendants, who now hold them in trust for the complainant, and that they be decreed to convey the same to the complainant. As the trust was east upon the defendants, and they were justified in defending this suit, no costs will be imposed upon them. Peer v. Peer, supra.


text:
    Andrew P. Wittel et al. v. Herman Wittel et al.
    [Submitted August 16th, 1913.
    Decided August 21st, 1913.]
    1. A naked power of sale conferred upon executors is not a legal obstacle to partition of lands.
    2. A devise of the residuary estate to the testator’s four children, vests in them the fee in lands, as tenants in common, which they may partition.
    3. Probable injury to the property, inconvenience or hardship, are no barriers to the right of partition.
    4. Personal representatives are not necessary parties to a bill for partition.
    On motion to dismiss bill.

      Mr. Samuel B. Ayers, for the motion.

      Mr. Henry Oarless, contra.

   Backes, V. C.

John Wittel died, leáving a testament admitted to probate February 14th, 1911, by the surrogate of Essex county, wherein, after directing the payment of his debts and eight money legacies, he bequeathed and devised as follows:

“■Tenth. I give, devise and bequeath all the rest, and residue of my property, real, personal and mixed, whatsoever and wheresoever situate, to my children, Andrew P. Wittel, Herman Wittel, Helena Trunk and Christina Hompesch, share and share alike, to have and to hold unto them, their heirs and assigns forever.
“Eleventh. I hereby nominate, constitute and appoint my son, Herman Wittel and my daughter, Helena Trunk as the executor and executrix of this my last will and testament; and I hereby give my said executor and executrix and the survivor of them, full power and authority to sell and convey, rent, lease and mortgage all or any of my real estate and to continue my business of manufacture and sale of artificial stones and building blocks and general mason materialman, which I have been conducting at Mortimer Place, Irvington, New Jersey, if in their discretion and judgment they deem it beneficial and to the best interest of my estate to do any or all of the above acts referred to, and for that purpose to make, execute and deliver good and sufficient deeds, mortgages, leases or other instruments in writing to carry out the powers and authority above referred to.”

He died seized of six tracts of land, which the complainants (two of the devisees) seek to partition. The defendants, the remaining two children, who are also the executors under the will, resist partition and move to strike out the bill on the ground that—first, the executors have full power of sale; second, the complainants have not a vested estate and are not seized in fee as tenants in common, but have a residuary estate; third, material loss and injury to the parties in interest would result if the property were sold as prayed for in said bill; fourth, the executors are not made parties to the suit. The motion cannot prevail.

First. A naked power of sale is not an obstacle to a partition of lands. Cahill v. Cahill, 62 N. J. Eq. (17 Dick.) 157.

Second. By the operation of the tenth paragraph of the will, the fee in the lands is vested in the testator’s four children, the parties to this action, as tenants in common. Its language permits of no other interpretation. The defendants’ counsel assumes that by the power of sale the testator intended his lands to be converted into money and as such to be divided. This is not a permissible view. “If it is optional with the executor, whether to sell or not to sell, or if it is only ah authority to sell, without any direction, then the land retains its character as land, until it is actually sold.” Cook v. Cook, 20 N. J. Eq. (5 C. E. Gr.) 375.

Third. Probable injury to the property, inconvenience, or hardship, are not barriers to the right of partition. Bentley v. Long Dock Co., 14 N. J. Eq. (1 McCart.) 480.

Fourth. Personal representatives are not necessary parties to a bill for partition. Speer v. Speer, 14. N. J. Eq. (1 McCart.) 240. It does not appear that the personal estate is insufficient to pay the debts and legacies, and that recourse must be had to the realty for their satisfaction. No steps have been taken by the executors to avail themselves of the real estate, for that purpose, for over two and one-half years, and it may be presumed that recourse to it is not necessary. If creditors or legatees complain, their rights in the event of a sale will be protected and may be adjusted in this suit. Adams v. Beideman, 33 N. J. Eq. (6 Stew.) 77.

It is charged, parenthetically, that the executors- have failed to account for the personal estate, and that some of it has been invested in real estate, the title of which was taken in the name of one of the executors, and one of the prayers of the bill is, that the executors account. This is inappropriate in this suit. The allegation and prayer may be disregarded. Multifariousness is not assigned as a ground of this motion. Belief, as against ’the executors, must be had by separate action. Field v. Field, 61 N. J. Eq. (16 Dick.) 154.

The motion is denied, with costs.


text:
    Otto J. Karst v. Black Diamond Range Company, a corporation.
    [Submitted September 9th, 1913.
    Decided September 11th, 1913.]
    1. “Insolvency” as an act of bankruptcy in the sense employed by the amendment of 1903 of the Bankrupt act, means that condition of financial affairs of the alleged bankrupt “whenever the aggregate of his property * * * shall not at a fair valuation be sufficient in amount to pay his debts.”
    2. A decree of insolvency made pursuant to section 65 of the Corporation act and based in part upon the fact that the company’s liabilities exceed its assets, will not be amended by declaring that it was founded upon a type of insolvency not recognized by the Bankruptcy act, in order to escape the operation of- the act.

      3. The decree cannot be amended by striking out the true jurisdictional ground of insolvency and substituting another “that the company has been and is doing business at a loss” when the pleadings and proofs contain no allegations or averments of facts manifesting such a situation, and it was not at the hearing advanced, nor entertained by ■the court as a ground upon which the adjudication was made.
    4. If by inadvertence or mistake the final decree had declared otherwise than that which was adjudged by the court, or if the judgment had in any manner been faultily stated, then this court would correct its decree so that it would comport with the findings.
    5. Belief by petition for rehearing, or a bill to review, would not avail the complainant in the face of the concessions made by the proofs that the liabilities in fact exceed the assets.
    On motion to amend bill after final decree and to amend the decree.

      Mr. Ernest F. Keer, for tire motion.
   Backes, V. C.

Upon the filing of the bill in this cause, duly verified, in which it was set up that the defendant corporation was indebted in the sum of $10,357.97; that its assets were of a value less than $30,000; that promissory notes amounting to more than $10,000 were overdue or about to mature; that the company had no funds to meet their payment, and that the factory of the company had been shut down, and wherein it was charged that the corporation is insolvent; that it has not the funds to carry on its ordinary business; that it has been carrying on its business at great pecuniary loss; that it cannot be conducted so as to enable the corporation to pay its debts, and that it cannot be carried on with profit to its stockholders, and after due inquiry a decree was made adjudging the defendant companjr insolvent and a receiver was appointed under the sixty-fifth section of the Corporation act to take charge of its assets. Subsequently, a petition in bankruptcy was filed in the United States district court for the district of New Jersey, to declare the defendant companjr a bankrupt, alleging as an act of bankruptcy the decree in this suit adjudging the company insolvent and appointing a receiver This is warranted by the provisions of the amendment of 1903 to the Bankruptcy act, which declares when “because of insolvency a receiver or trustee has been put in charge of his property under the laws of a state, or territory, or of the United States” to be an act of bankruptcy. Insolvency in the sense employed by the amendment has been held by the federal courts to mean only that condition of financial affairs of. the alleged bankrupt “whenever the aggregate of his property * * * shall not at a fair valuation be sufficient in amount to pay his debts.” In re Golden Malt Cream Co., 21 Am. Bk. Rep. 36. In the moving papers it is averred that by inadvertence the liabilities of the defendant were overstated in the bill to the extent of $24,900, and leave is asked to amend the bill in that respect, and to have it adjudged nunc pro tunc that the insolvency which led to the appointment of the receiver was of the common law acceptation and as tested by our statute, exclusive of the type defined by the Bankruptcy act, and that the decree be accordingly amended by qualifying the adjudgment of insolvency, or altogether striking It out, and substituting as the jurisdictional ground “that the company has been and is carrying on its business at a loss,” furnished by section 65 of the Corporation act, as amended in 1912. P. L. 1912 p. 585. The effort, admittedly, is to relieve the defendant company of the estoppel which the decree of insolvency will carry in the bankruptcy proceedings, and to enable it there to contest that the insolvency which resulted in the receivership is not of that particular specie upon which the jurisdiction of the bankruptcy court must necessarily rest. There are numerous and insuperable obstacles to the granting of the motion.

The bill counts on insolvency—inability to meet accruing obligations—excess of liabilities over assets—entire prostration of business for want of funds. Upon the case thus made by the pleadings and proofs, of which the excess of debts over assets was an efficient factor, and after full opportunity to be heard, it was adjudged and decreed that the defendant company was insolvent, and the exercise of its franchise was enjoined. This decree is a final adjudication of the cause (Pierce v. Old Dominion, &c., Smelting Co., 67 N. J. Eq. (1 Robb.) 399), and it is impossible to perceive how, on a mere motion, the pleadings may be amended so as to induce a modification of the decree, or how the decree itself may be amended in substance. It may be that the allegations of the amount of assets and liabilities of the defendant company were unnecessary, and it may also be true that they were erroneously stated, and that the decree of insolvency could have been made upon the remaining charges, but, nevertheless, they in part formed the foundation upon which the adjudication was made and solemnly recorded in the decree, and they cannot in this unconventional fashion be disturbed.

Nor should the decree be modified in respect to the nature of the insolvency which moved the court to appoint the receiver, because the deficiency of assets was one of a number of grounds which entered into the consideration upon which the decree of insolvency was pronounced. Moreover, an examination of the •affidavits submitted on this motion discloses that according to an inventory made by the receiver, the liabilities exceed the assets by some $500.

And with less propriety can the decree be amended by striking out the true jurisdictional ground of insolvency and substituting another “that the company has been and is doing business at a loss,” for the reason that the pleadings and proofs contain no allegations or -averments of facts manifesting such a situation, and it was not at the hearing advanced, nor was it entertained by the court, as a ground upon which the adjudication was made. If, by inadvertence or mistake, the final decree had declared otherwise than that which was adjudged by the court, or if the judgment had in any manner been faultily stated, then there could be no doubt that this court would correct its decree so that it would comport with the findings.

The case of Golden Malt Cream Co., supra, cited to support this motion, is not in point. In that case it appeared that in the bill filed in the state court for the appointment of a receiver, the assets were shown to exceed the liabilities, and the charge was that the company was insolvent because of its inability to meet its current obligations. Upon a decree of insolvency being made and a receiver appointed, it was seized upon as an act of bankruptcy. Before a hearing in the bankruptcy proceedings the state court granted a new trial. A new petition was filed omitting the averment that the company was insolvent, and asking for the appointment of a receiver on the allegation that the company was in danger of becoming insolvent. An order was made appointing a receiver on the ground named in the new petition. On appeal from an adjudication of bankruptcy, the bankruptcy court held: “The word ‘insolvency/ as used in the Bankruptcy act, means insolvency within the meaning of the definition of that act. And 'though the same word be employed in the finding of a state court to define a set of facts different from the facts intended to be defined by the word in the Bankruptcy act, the state court is not without power, by appropriate amendment, to so change its order that such order will set forth the real facts on which the order was intended to act; for certainly a mere divergence of definition ought not to have the effect of making that an act of bankruptcy which in fact was not intended by the Bankruptcy law to be an act of bankruptcy.”

Belief by petition for rehearing or a bill to review would not avail the complainant in the face of the concessions made by the proofs on this motion that the liabilities in fact exceed the assets.

The motion will be denied.