source: Caselaw Access Project

author: Emery, V. C.

license: Public Domain

text:
    George S. Duryee, commissioner of banking and insurance, v. The United States Credit System Company.
    1. Where property coming into the hands of a receiver is subject to a lien for taxes, for the enforcement of which no specific remedy is provided by statute, the chancery court, of which the receiver is an officer, has jurisdiction by reason of his possession of the property, to provide payment of the taxes, as a preferred claim, out of the proceeds of the property.
    2. The lien given by act of 1888 (P. L. of 1888 p. 119), directing assessment of personal tangible property used in connection with any business, and providing that the tax “shall remain a lien on the same for * * * one year from date of assessment,” at date of which act assessment of taxes was made as of the first Wednesday in April (P. L. of 1868 p. 35%), and warrants were authorized to be issued for taxes remaining unpaid on January 20th (Act of 1869 § 5), is not repealed by act of May 16th, 1889 (Act of 1889 \ If), directing that assessments of taxes shall be considered as made on the third Wednesday in January, “ and shall constitute a lien as now provided by law, on and from that date,” though the effect of this is to make the lien expire one year from the third Wednesday in January, and to render impossible enforcement of the lien by warrant under the act of 1869.
    8. The lien on personal property for a tax assessed against it is not lost by failure to take steps necessary to make the tax a lien on lands of the property-owner, which, together with the personal property, it owned when it became insolvent.
    On appeal of city of Newark from disallowance of claim for taxes by receiver. Heard on petition, answer and stipulation.

      Mr. Sherrerd Depue and Mr. Chandler W. Riker, for the city of Newark.

      Mr. Howard W. Hayes, for the receiver.
   Emery, V. C.

This is an appeal by the city of Newark from the disallowance of a claim for taxes, presented to the receiver of the United States Credit System Company, an insolvent corporation. The claim was presented as a preferred claim, but was disallowed by the receiver as not being a valid claim, either preferred or general.

The receiver by virtue of his appointment became entitled, under the statute (-Corporation act of 1896 § 66 ; Id. 1874 § > Rev. p. 189), to the possession of all the goods and chattels of the insolvent corporation, including the personal tangible property in the possession of the company on September 4th, 1894, the date of his appointment. The effect of this appointment, as settled by the case of Graham Button Co. v. Spielmann, 5 Dick. Ch. Rep. 120, affirmed on appeal, 6 Dick. Ch. Rep. 460 note, is to fasten upon the property of the insolvent corporation its debts payable in the course of distribution.

Before the appointment of the receiver, taxes for the year 1894 had been assessed against this personal tangible property which came to the receiver’s possession, for the sum of $980, the assessment being made under the law of 1888 (P. L. of 1888 p. 119), directing that all personal tangible property used in connection with any business, shall be assessed within the taxing district where the business is carried on, “ and shall remain a lien on the same for the term of one year from date of assessment.” At the time of the passage of this act, the assessment of taxes was made as of the first Wednesday in April (P. L. of 1868 p. 852), and by the supplement of March 25th, 1869 (P. L. of 1869 p. 672 § 5), warrants were authorized to be issued for taxes remaining unpaid on January 20th. The taxes are payable October 30fch, and under these laws warrants for unpaid taxes on personal tangible property might be issued on January 20th, and the personal. property thus taxed, as well as other personal property might be levied upon and sold under the warrant, previous to the expiration of the year during which the lien continued. Sale before the expiration of the lien is necessary in order to preserve the lien, provided the sale under warrant of the property subject to the lien is the authorized method for collecting the tax. State, Johnson, Receiver, v. Van Horn, 16 Vr. 136, 140; Kirkpatrick v. New Brunswick, 13 Stew. Eq. 46; affirmed on appeal, 14 Stew. Eq. 347.

By an act approved May 16th, 1889 (P. L. of 1889 p. 4^4 § 4), it was directed that the assessment of taxes “ shall be considered as made on the third Wednesday in January of each year, and shall constitute a lien, as now provided by law, on and from that date” &c., and all inconsistent acts were repealed. Section 6. The effect of this act of 1889, as I construe it, was • to make the lien for the taxes in question expire one year from the third Wednesday in January of the year of the assessment, tliis year expiring in the present case on January 16th, 1895. The issuing of the warrant was the method which had been expressly provided by statute for the collection of the tax, and up to the passage of the act of 1889 this method was practicable. But as the warrant could not issue until January 20th, in any year, and the lien on personal property for the tax of 1894 expired four days previously, it is manifest that by the act of 1889 it became impossible to enforce the lien for taxes for the year 1894 by this method. In some years the warrant could be issued before the third Wednesday of January, but in no year could sale be made under the warrant before the expiration of the lien. The lien of the taxes, so far as it was imposed on personal property, therefore, could not be enforced by the procedure of the warrant. Counsel for the receiver contends that this indirect repeal of the method for enforcing the lien by warrant for the collection of the same, had the effect of destroying the lien. The argument is that laxes are not debts, and that, independent of remedies expressly provided for their collection, they are not enforceable either as debts or liens, and that there being here no remedy against the property, there is no lien. Upon the other hand, it is claimed (1) that taxes are debts, recoverable as such where no other method of-collection is provided; and (2) that even if they are not debts recoverable by suit, yet if the taxes have been expressly declared by the statute to be liens on property, this statutory lien is enforceable through the aid of a court of equity, if no other method of enforcing it against the property is provided by statute, or the courts of law.

The case of City of Camden v. Allen, 2 Dutch. 398, settles the rule that where a specific method is expressly provided by statute for the recovery of taxes, they must be collected in this mode, and cannot be recovered as debts in an action of debt. This case has not since been questioned, but it does not reach the point now at issue, which is whether a lien for taxes expressly fixed on property by statute, can be enforced if the statute provides no method for. the enforcement of the lien. And Chief-Justice Green expressly says, in his opinion (at p. 4-00), that if a tax should be imposed,, aud no method be provided by law for its recovery, a resort to legal proceedings would be necessary and a method of recovery would be found. And, on the point of lien now involved, the courts of several states hold that a lien for taxes given by statute may be enforced in a court of equity, ■ where no mode for its enforcement is given by the statute. 2 Desty Tax. 734 note 10.

But this statutory lien- for taxes is strictly legal rather than equitable in its nature, and if there be no other method expressly provided of enforcing the lien by legal process, it is not at all clear that the supreme court cannot enforce the appropriation of the property subject to the lien, either by mandamus or by the issuing of process of execution for sale to pay the lien, analogous to the process of levari facias for this purpose, out of the exchequer (2 Tidd Pr. 101$); or perhaps the lien might be enforced by scire facias, the assessment of taxes being in the nature of a record or judgment. City of Camden v. Allen, 2 Dutch. 400. Whenever there is a legal, as distinguishable from an equitable, right, without a specific legal remedy, the general rule is that a mandamus will be granted. Rex v. Marquis of Stafford, 3 T. R. 646, 651. And this -principle was applied in Person, Collector, v. Warren Railroad Co., 3 Vr. 441, to the collection of a tax where there was no other adequate remedy for collecting the tax, and a mandamus was issued. In the absence of a decision, therefore, by the courts of law that they are powerless to enforce this legal statutory lien for taxes, I shall not undertake to assert the general equitable jurisdiction to enforce the lien upon the ground that there is no remedy for its enforcement in the courts of law. But without undertaking to decide this question, it seems to me that this court has, in the present instance, a clear source of jurisdiction, arising from the possession by its officer, the receiver, of the assets of the corporation, including the-property subject to the lien, for distribution under the Corporation act. Where the receiver of this court, under authority of statute and under the direction of the court, has assumed the possession of all the personal property of the insolvent corporation, this court is bound to give effect to the liens which existed as liens on the property when its receiver took possession. Doane v. Millville Insurance Co., 18 Stew. Eq. 274, 282. And effect is generally given to such statutory liens, in practice, either by providing for their payment by the receiver as preferred claims or by allowing the claimant, on application to the court, to enforce his lien in the courts and by the proceedings in which they would clearly be enforceable had no receiver been appointed, and making the receiver a party to such further proceedings where this is necessary.

The rights of creditors and of the lien claims here are to be settled according to the liens as of the time when the receiver took possession, and inasmuch as the taxes were then liens on the property, the city had the right to apply for an appropriation of the property by the receiver to pay this lien as soon as by the statutes it became payable.

The lien being expressly imposed by statute upon the property which came to the receiver’s hands, I see no escape from the payment of the taxes out of the proceeds of the property subject to the lien, on the application to this court, except upon the theory that the express statutory lien given by the act of 1888 has been repealed in effect by the act of 1889. An express repealer is not claimed, but is based on the fact that one is to be implied from the effect of the act of 1889 on the previous methods for enforcing the lien. And this effect on the procedure is not the result of legislation directly regulating the procedure, and thus of a character to show an intention to affect the lien itself, but is an indirect effect resulting from provisions regulating the procedure which were not directly connected with the subject-matter or object of the repealing act, this being merely to change the date of assessment. The implied repeal of the lien results from the conflicting provisions of the laws regulating the procedure to enforce the lien. In this condition of the statutory law relating to the lien for taxes and the procedure on it, I think it is my duty to adhere to the express and positive provisions creating the lien and to carry these into effect in this case as still existing, rather than to consider the lien destroyed because the original method of enforcement has been rendered impracticable by subsequent indirect legislation. To construe the statutes which indirectly repeal the effective proceedings for enforcement of the lien as also having the effect to repeal the express lien, seems to me to be sacrificing substantial rights to the preservation of forms of proceedings. My impression is that even a formal direct repeal of the proceedings for collection by warrant, without substituting others, would not merely of itself have had the effect of destroying the previous express lien, and that this lien, so long as it existed, could still have been made effective by proceeding either at law or in equity. And where the property is in the control of the officer of the court, expressly subject to the lien, the fact that the lien cannot be otherwise made effective than by the action of this court is no sufficient reason, as it seems to me, for holding that it is not valid.

In Wood v. McCardell &c. Co., 4 Dick Ch. Rep. 433, the statutory lien of the landlord for one year’s rent was enforced by directing the receiver to pay it although no distress had been made. It appears by the written stipulation in this case that the formalities necessary to make the tax in question a lien upon the lands of the insolvent corporation have not been taken, and it is therefore argued that the lien against the personal property has been lost. But even if the lien against the real estate has thereby been lost, it cannot follow that this loss of one of the two liens given by statute discharged the other lien. Uo such penalty can be justly imposed, certainly not in favor of the debtor, who still remains the owner of both the properties originally subject to the lien. To discharge the personal estate of the debtor from the lien simply because the real estate is discharged, would deprive the city of the benefit of one of the two liens expressly given, and for the sole purpose of relieving the owner from a just burden.

The determination of the receiver is therefore overruled, and the claim for taxes will be paid out of the proceeds of the personal property on which it was a lien, as a preferred claim.

I have disposed of the case upon the provisions of the Corporation law, as it existed on the date of the receiver’s appointment, and without considering the effect of two other laws since passed. One of these, the revision of the Corporation act, taking effect July 4th, 1896, now provides, as to the distribution of assets (section 86):

“After the payment of all allowances, expenses and costs, and the satisfaction of all special and general liens upon the funds of the corporation to the extent of their lawful priority, the creditors shall be paid proportionately” &c

This provision for the payment of liens seems to cover the present express statutory lien and to supply an express method for its enforcement and to be within the power of the legislature. The other statute is the act of March 26th, 1896 (P. L. of 1896 p. 191), which provides that the receiver shall take and hold all personal property of the insolvent corporation subject to all unpaid taxes, and shall, out of the first moneys received, pay all said unpaid taxes, with interest &c. There is more question whether this act is intended to be retrospective. But without deciding as to the effect of either of these acts upon the present application, I dispose of the question upon the status of the rights existing under the acts in force at the time of the receiver’s appointment.


text:
    Jacob S. Robeson, executor of Jacob R. Shotwell, deceased, v. Joseph D. Shotwell, executor, of Jacob R. Shotwell, deceased, et al.
    1. Testator gave all his estate to his wife, “for her sole use, benefit and. enjoyment during her life, with full power to sell and dispose of any of said property, * * * and to use the proceeds thereof in such manner as she may desire,” and directed his<executors, on her death, to divide “such property as may then remain,” among certain persons named. By a codicil, he gave his wife $10,500, “for her sole use and benefit, with full power to dispose of the same by will or otherwise.” — -Held, that the wife took a life estate only in the personal property, other than the $10,500, with a power of disposal and appointment by act taking effect during her life, for her own benefit.
    2. Where testator’s widow was given a life estate only in personal property, with power of disposal and appointment, by act taking effect during her life, for her own benefit, such power was not exercised by the sale of such property by the executor, with the consent of the widow, who allowed the executor to hold the legal title to the proceeds without further directions from her.
    3. Nor was such ppwer exercised as to a bond and mortgage by the surrender of them to the mortgagor by the executor, and the receipt by the latter of a deed of the mortgaged property from the mortgagor, with the widow’s consent.
    Ou bill, answers, replications and proofs taken orally.

      Mr. Edward A. Day and Mr. Cortlandt Parker, for the complainant and legatees of Martha S. Shotwell.

      Mr. Benjamin A. Vail and Mr. Thomas N. McCarter, for the defendants and residuary legatees of Jacob R. Shotwell.

      Mr. Schuyler B. Jackson, for the legatee of Martha S. Shot-Well .
   Emery, V. C.

This case involves the construction of the will of Jacob R. Shotwell, deceased, under which two questions arise — -first, whether the bequest and devise made by the testator to his wife, Martha S. Shotwell, conferred upon her an absolute estate in the personal property, or whether she had only a life estate, with a power of disposal of the property and its proceeds; and in case it should be held that she had only a life estate with a power of disposal, then, second, whether this power of disposal and appointment of the proceeds was exercised over any of the property in such way as to dispose of it under the power. The decision of the first question depends altogether upon the construction to be placed upon the will itself, and the entire provisions of the will and codicil have been referred to for the purpose of arriving at the construction. The will, dated March 10th, 1888, and the codicil, dated July 3d, 1890. are as follows:

WILL.

■ “I give to my beloved wife, Martha S. Shotwell, all the property that I possess, both real and personal, for her sole use, benefit and enjoyment during her life, with full power to sell and dispose of any of the said property, both real and personal, and to use the proceeds thereof in such manner as she may desire.
“After the death of my wife, I do authorize and direct my executors to divide such property as may then remain, as follows:
“To my niece, Martha S. Howell, the sum of twenty-five hundred dollars.
“To my nephew, Jacob S. Robeson, the sum of twenty-five hundred dollars.
“To my niece, Eliza J. Stroud, the sum of one thousand dollars.
“To the ‘ Society for the relief of the sick poor,’ the sum of two hundred dollars.
“To my nieces and nephews, the children of my deceased brother, Henry .R. Shotwell, I leave the residue of my property to be equally divided amongst them.
“I appoint my nephews, Joseph D. Shotwell and Jacob S. Robeson, executors of this my last will, with power to sell real estate.”
CODICIL (dated July 3d, 1890).
“I, Jacob R. Shotwell, do hereby make this codicil to my last Will and Testament.
“I give to my beloved wife, Martha S. Shotwell, for her sole use and benefit, with full power to dispose of the same by will or otherwise, the sum of ten thousand five hundred dollars.”

The testator died May 10th, 1894, leaving his widow surviving him and seized of real estate and a considerable personal estate. On May 21st, 1894, the defendant Joseph D. Shot-well, one of the executors, proved the will and took out letters testamentary, and under these took possession of the testator’s personal estate and assumed the administration thereof. His inventory of the personal estate amounted to $19,863.83. During the lifetime of Martha S. Shotwell, who died in January following, this defendant sold and converted some of the personal estate which came to his hands, with the knowledge and consent of Martha S. Shotwell, but during her life she received no portion of the principal of the estate nor any portion of the principal of her legacy of $10,500 given by the codicil, but received only the interest on all of the personal estate, the latter remaining in the custody and control of the defendant Joseph D. Shotwell. Complainant took out letters testamentary on Jacob E. Shotwell’s estate subsequent to the defendant executor, but has not received any of the estates. Martha S. Shotwell died January 22d, 1895, leaving a will by which she devised and bequeathed the entire residue of her estate (after paying certain legacies) to the present defendant Martha S. Howell, and appointed the complainant, Jacob S. Eobeson, and the defendant Susan G. Eobeson her executors. Eliza J. Stroud, one of the legatees named in the will of Jacob E. Shotwell, to take after the death of his wife, also died after the probate of his will, and the complainant and Susan G. Eobeson are also the executors of her will. The nieces of Jacob E. Shotwell, who are by his will to take after his wife’s death, are parties defendant to the bill, the complainant executor and the defendant executor being the nephews who are to take.

Pending the suit and upon the coming in of the defendant executor’s answer, showing that he held in hand sufficient funds to pay the $10,500 legacy to testator’s wife, made by the codicil, an order was made that this be paid into court, and this was subsequently, on notice to all parties, directed to be paid to the executors of Martha S. Shotwell. The present contest, therefore, is as to the remaining personal estate belonging to the estate of Jacob E. Shotwell, including a tract of real estate which was conveyed to the defendant executor in satisfaction of a $6,000 mortgage thereon, which was part of the personal estate of testator, coming to his hands. And'the dispute is substantially between those who claim under the wife as entitled to. an absolute estate, on the one hand, and thosé who claim under the, testator’s will as residuary legatees of the property which, remained aftér the death of the wife, on the other.

For those claiming under. Martha S. Shotwell, it is insisted' that she received by the will the absolute estate, and that the gifts over are therefore void, while, on the. other hand, it is claimed that Martha S. Shotwell had only a life estate, with a-power of disposition and appointment for her own benefit- over,the estate during her life, and that so far as this, was not-exerV cised, the gifts, over take effect. The first question, therefore, is as to the extent of. the estate of the first taker (Martha S. Shot-: well) under this will.'

Upon this question I reach the conclusion that the testator, did not intend to bequeath the absolute estate to his wife, but,ter, give her a life .estate only, with a power of disposal and appoint-; ment, which she had the right to exercise if she chose, ;by act-taking effect .during her life, fór bér own benefit. .This-conclusion is based,-o.n th.ese considerations: The testat.or, at -the outset, himself limited the character and duration of the estate, by-expressly-confining the use, benefit and enjoyment to-the life: of his wife.:."When such life estate is granted by certain and express terms, and there follows then an addition of powers of disposal or appointment to! .the estate for life, the general rule relating to. the' effect of adding these powers to the express life? estate is that they will not have the effect of - conferring an addi-, tional right of property upon the life tenant by be.ing construed-to enlarge to a fee or absolute estate the estate which had been previously expressly declared to be for life only, but will be carried into effect only as powers over the property given to the holder of the life estate. This general rule is no longer open to discussion. Borden v. Downey, 6 Vr. 74 (New Jersey Supreme Court); S. C. on error, 7 Vr. 460; Wooster v. Cooper, 33 Atl. Rep. 1050 (Errors and Appeals, March, 1896).

The distinction, made from the time of the earliest cases, id between an estate, given indefinitely in the first instance and one given expressly for life, and although, as was said by Sir William Grant, in Bradley v. Westcott, 13 Ves. 452 (1807), the distinction is perhaps slight, it is perfectly established, and, under the language of the decisions of our courts, I think it may be' said to be a rule of construction which is a rule of property so far as a general rule of construction can be applicable to wills.

In Wooster v. Cooper the rule was applied to a bequest of personal property as well as a devise of real estate. The testar tor had there given an estate for life in express words to his wife, with the sole power to manage and control the estate and keep, use, sell and dispose of the same as she should see lit, the executors during said time not to be responsible.” From and .after the death of his wife the testator then limited over all his estate which shall then remain,” and it was held that the ■estate of the wife was only a life estate and that she had no power to dispose by will of the property, real or personal, which remained undisposed of, but the same went to the persons to whom it was limited over.

Counsel for Mrs. Shotwell’s legatees insist that Wooster v. Cooper, as well as Downey v. Borden and Pratt v. Douglass, upon which it is founded, are distinguishable from this case in a vital particular, which brings this case within the general rule making the estate an absolute estate, and not within the exception that makes it a life estate.

The distinction relied on is that in the present case there is not only a power of absolute sale and disposal, but an express power in addition, to use the proceeds thereof at her pleasure, and that this use was not annexed to the powers in the previous cases. It is insisted that the effect of such a power to use the proceeds is to make the power over the property practically and legally absolute for all purposes in the life tenant, and therefore to create so absolute an estate and right of property that not only the limitations beyond it are void,, but the power given must be taken to express the testator’s real intention as to the character of her estate and to supersede his express declaration limiting her estate to one during life.

In Pratt v. Douglass, 11 Stew. Eq. 516, there was annexed to .án express life estate a power of disposal to the life tenant (the wife of testator, who was also testatrix) as she should see fit and proper, and to sell in such case as executrix, but with no express disposition of the proceeds. Mr. Justice Depue (at p. 53J¿), in construing the will to give only a life estate, relied upon this -omission to give the wife the proceeds, when taken in connection with the express direction to sell in the fiduciary character, and' also with the limitation over of what remained after the death of the wife to other persons, as indicating that only a life estate was taken. In Wooster v. Cooper, however, while the power of •disposing of the proceeds of sale was not given to the wife in ■express terms in those very words, yet the power expressly given would seem to have included this power to use or dispose of the proceeds of sale for the wife’s own benefit, and inasmuch as the court did not rely upon the absence of such express power •over the proceeds as a point in the construction of the will, I am inclined to consider Wooster v. Cooper as settling the point now •raised against the life tenant. But taking the point not to have been expressly raised and decided by that case, and that this will must be construed on its own terms also, I am of opinion that Ihe additional power given in this case to the life tenant of the right to use the whole or any portion of the proceeds of the sale -or conversion which she has the power to make, cannot change •the application of the rule.

The vital question in such cases is whether, on the construc-tion of the whole will of the testator, the absolute property has been given to the first taker or only a power over the property. 'That the power over the property may, if she chooses, be exercised absolutely by the life tenant for her own benefit does not, ,as it seems to me, of itself convert the power into property or ■override all other provisions of the will. That could not have been the intention of the testator in this case, for he contemplates that his wife may not exercise the power of sale or disposal which he confers upon her, and he disposes of the property which remains after her death undisposed of or unappointed under the power. The testator’s intentions, as declared in his ■will, can be carried out, as to all its substantial provisions, by holding it to confer what, on the face of it, it purports expressly to confer, viz., a life estate, with a power of disposal for the life tenant’s benefit, and then a disposition of so much as was not appointed under the power. And I see no reason why all of the; express declarations of the testator should not be carried into; effect, especially when, by carrying it into effect, I follow a general rule of construction applicable to such cases, and no rule of law as to the nature of estates is violated.

Counsel have not referred me to any authority which seems to establish the rule of construction that where a life estate has been expressly given, the power to appoint absolutely for the. benefit of the donee is of itself sufficient to convert the power, into an estate or property and to supersede by construction the express previous limitation of the estate and the express subsequent limitation over the property not appointed under the power.

In Kendall v. Kendall, 9 Stew. Eq. 91 (at p. 96) (Chancellor Runyon, 1882), there was a gift for life, with power to use for her own benefit, but no limitation over to indicate that it was a power and not property which the testator had in mind, and this omission was relied on in construing the will.

In Pennock v. Pennock, L. R. 13 Eq. Cas. 114, a husband,, who held the legal title .as trustee, had an express estate for life,, for his own benefit, in the rents, profits and increase, with-power to take and apply the wholé or any part of the capital arising therefrom to his own benéfit. There was a devise over after the death of the husband, and it was held by Vice-Chancellor Malins (at p. 14T) that the husband had the life estate,' with a power to acquire the entire interest if he wanted it, but, that if he did not acquire it, there was a gift over to the nephews- and nieces, and as he died without doing anything to acquire the. absolute interest, the gift over must take effect. See, also,. In re Thompson’s Estate, 13 Ch. Div. 144; S. C. on error, 14 Ch. Div. 263.

It must also be observed that the whole basis of the argument in the case for an absolute estate, as arising from the gifts of the-proceeds to the life tenant, depends upon the assumption that the power over the property and' to reach the proceeds which testator has given to his wife is absolute. But this assumption is not well founded, for, by the testator’s gift over of what “ may then remain” after the death of his wife, he indicates clearly that his will, and not that of his wife, is to direct the disposition of the property which she has not during her life disposed of under the power, and that her power is not to extend to a disposition by will. In re Thompson’s Estate, supra.

The express extension of the power over the $10,500 made by the codicil to a disposition by will or otherwise, indicates also the opinion of the testator at that time that power to dispose of the estate by will had not been given by the original will, and, if the will and codicil are now to be read as parts of one paper or will, speaking from the date of the codicil, then the intention gathered from this one will must be that the power did not extend to a disposition by will, except as to the $10,500.

Upon this branch of the case I conclude, therefore, that Mrs. Shotwell had not an absolute title to the personal property, but only a life estate with a power of sale and disposal which she had the right to exercise for her own benefit.

The second question is as to the extent to which the power of sale and disposal has been so exercised by the wife as to vest in her the absolute estate in any of the property under the will. This is one of greater difficulty. Sales of personal property, being stocks in corporations belonging to the testator’s estate, were made by the defendant executor and while he was sole acting executor, his answer admitting that Rahway Gas Light Oompany stock was sold for $9,884, with the knowledge and consent of the widow and in order to obtain an income for her support. Sales of other stocks and personal estate for about $2,500 were also made by the executor, but as to this there is no admission in the answer that they were sold by the widow’s consent, and on the hearing the only proof offered was that these were sold without consultation with her and without her knowledge or consent, and that the only sale to which she consented was that of the Rahway gas stock. The only other personal estate, in relation to which the question now presented arises, .was a bond and mortgage for $6,000. inventoried by the defen drant executor,, and whjch were afterwards- surrendered to the mortgagor upon- the executor receiving from the mortgagor a-deed for the-' mortgaged- property,, made to- him as one of the executors- of. Jacob: R. Shotwell’s, estate. It. is admitted, in the answer of the defendant executor and the other residuary legatees,, that this was done with the- knowledge-and consent of the widow.

The. representatives, of the .widow claim that these sales and conversions, which were made by the executor with her consent, are to be treated as- exercises of her power of disposal for her own use, and that she is, therefore, entitled to the proceeds for her own benefit. On the other hand, it is claimed that these were not sales by the widow under the power, but were sales on the authority of the executor alone, and that the widow has exercised no power of sale or disposal and can therefore be entitled' to none of the proceeds as appointed under the power.

Strictly and technically speaking, the wife did not sell or dispose of .a.ny of this personal property, and the legal act of conversion was the act of the executor. This technical and legal conversion is one.which could .only be made by the executors. .The executors appointed by the will take the title to personal property direct from the will, as soon as they have proved the will and received letters testamentary, and- under this power may and must sell sufficient personal property to pay the debts. Beyond this they had no right, as between them and the widow, to sell without her consent, because the full power to dispose of all testator’s estate expressly given to her, in order to have effect as a power, must be considered as subject only to the power given to the executors by law to get in the estate and pay the debts. The debts in this case, as appears by the proofs, amounted to an inconsiderable sum, not sufficient to exhaust the personal estate which was sold without- the' widow’s consent. The consent of the widow to the sale of the Rahway Gas Company stock may, therefore, under the circumstances, perhaps be taken as substantially and- in equity.a sale and disposal of the stock by the widow, and her consent may be taken as a sufficient indica-r tion of her intention to allow the trustee or executor who held for the purposes of her appointment to convert the stock into funds over which she could exercise the further power-of appointing to her own use. But the mere consent to the sale by the executor, who, so far as appears, was still to retain and did actually retain the legal title to the proceeds as executor, does not seem to me to be a sufficient indication of an intention on the part of the wife to appoint the property or the proceeds to her own use. On the contrary, the fact that the widow allowed the executor to make the legal sale, and to hold the -legal title to the proceeds of sale without further directions from her, would seem to indicate that the mere consent to the sale was not intended as an execution of the power to appoint the proceeds to herself, and that these proceeds were to remain in the hands of the executor subject to her future appointment to her own benefit during her life, if she so desired. The real question in such cases is whether there was an intention to execute the power.

Where application is made to a court of equity to aid the execution of a power which has not been technically and legally executed, the right to relief depends upon establishing, satisfactorily, the intention on the part of the donee to execute the power. 1 Lead. Cas. Eq. (4th Am. ed.) 238, and cases cited. In Garth v. Townsend, L. R. 7 Eq. Cas. 220, Sir W. M. James declined to aid a defective instrument because, in his opinion, the instrument itself showed that the testator purposely abstained from exercising the power, and he said that, although the court, in order to carry out the intention, may supply defects occasioned by mistakes or inadvertence, it cannot supply omissions intentionally made. I fail to find in this case sufficient evidence of any intention on the part of the widow to exercise her power of appointing the principal fund derived from proceeds of the sales of the stock to her own benefit, and hold, therefore, that this power over the principal- fund was not exercised. As to-the bond and mortgage transaction, this seems to have been the collecting or getting in of the assets of the estate by the executor in the course of his regular duties, rather than a sale or disposal of the property under the power, and the reasons above given must, a fortiori, apply to the property conveyed to the ^executor in satisfaction of the' debt due to testator, and which -he holds, therefore, as personal estate undisposed of.

There has been no sufficient appointment or appropriation of these proceeds to her own use, and this, also, will be held by the executor for the benefit of the residuary legatees.

My conclusion upon the whole case, therefore, is that the limitations over of his personal estate after the death of his wife, made by the testator, are valid, and that the personal estate in the executor’s hands after paying debts, the expenses of settling the estate and the balance due, if anything, on the legacy of $10,500, is to be paid to the persons to whom the same was limited over by the testator’s will after his wife’s death. The case is not free from difficulty upon either of the questions involved, and I reach my conclusion not without some doubt. But as the result now reached seems to carry literally into effect all of the express directions of the testator as to all of the objects of his bounty, I incline to this view rather than to the one which requires rights to be conferred by implication on the life tenant, which will have the' effect of rendering ineffectual the gifts to those in remainder. As to the real estate of which the testator' died seized, I make no adjudication. T cannot now see any authority or jurisdiction on this bill to adjudicate upon the title to real estate, nor are the issues so framed, either as to opposing parties or allegations, as to authorize an adjudication on the title to the real estate.

The complainant files his bill in a double capacity, first as an executor of Jacob R. Shotwell, seeking the direction of the court in reference to the execution of his trust, and secondly as a legatee seeking the recovery of legacies. Individually and as executor of Eliza J. Stroud, he represents the legatees of Jacob R. Shotwell, to whom the estate was limited over, and as executor of Martha S. Shotwell, he represents her personal' estate. As executor of Jacob R. Shotwell, his trust does not extend beyond the personal estate, and as legatee, the relief to which he is entitled is confined to the personal estate. The title to the real estate, which is a purely legal one; must be settled regularly by other proceedings.


author: Emeby, V. C.

text:
    Jacob L. Blue v. John B. Everett et ux.
    1. In a foreclosure of a mortgage in which defendants claimed delay,of over twenty years in filing the bill, complainant testified as to payment of interest endorsed on the bond secured at a time within the twenty years by one F., who had purchased the property subject to the mortgage and afterwards, sold it. The evidence of F., his wife and his vendor, if true, showed that complainant’s evidence-was untrue. Complainant’s reputation for veracity was shown to be bad. — Held, that such payment was not made.
    2. The mortgagor and three successive owners of the property swore to nonpayment of interest or principal after 1872. The owner, at the time the bill 'was filed, showed that his purchase was made after ascertaining, on inquiry, that nothing had been paid, and no demand had been made, within twenty years, and that he bought the property relying on a discharge by lapse of time. — Held, that the evidence showed that there was no payment of principal or interest within the twenty years.
    3. The lapse of twenty years before filing a bill to foreclose a mortgage, without demand or acknowledgment of the debt, unaccounted for and unexplained^ raises a conclusive presumption of payment, which cannot be rebutted by proof that the debt is not in fact paid.
    On bill to foreclose. Heard on bill, answer, replication and proofs.
    ■ Messrs. Gallagher & Bicharás, for the complainant.

      Mr. Edward M. Colie and Messrs. Blahe & Howe, for the defendants.
   Emeby, V. C.

This is a foreclosure bill and is filed to foreclose a mortgage .for $1,500 on lands in Newark, given June 19th, 1872, payable one year after date, and on which the whole principal sum, with interest from August 9th, 1875, is by the bill claimed to be due. ;The mortgage was originally given by Ira W. Gonselyea and wife to one Owen Kane, and Kane, on May 12th, 1873, assigned it to the complainant, Blue, who has owned it since that time. The bill to foreclose was filed more than twenty years later, and on October 25th, 1894, the only defendants to the bill being John B. Everett, to whom the property was conveyed on May 16th, 1894, and his wife. Conselyea, the original owner, conveyed the property to Richard M. Barnett by deed dated June 20th, 1872, and it is charged in the bill that the conveyance was declared to be subject to the mortgage, but this is not admitted by the owner, and the deed has not been put in evidence. Barnett and wife, on January 16th, 1874, conveyed to William H. Frazee, by a deed expressly declared to be subject to the mortgage in question, but not assuming its payment. Frazee continued to be the owner from this date for over twenty years and until May 16th, 1894, when he and his wife conveyed the property to the defendant John B. Everett by a general warranty-deed, referring to Frazee’s deed, but not referring to the mortgage. The defence set up by the answer is that if the bond and mortgage was in fact given, as to which complainant is put to his proof, there is nothing due on it, and the defence is further specially set up that since January 16th, 1874, when the property was conveyed to Frazee, no payments of either principal or interest have been made on the mortgage, nor have any acknowledgments of it been made by either Frazee or Everett, nor during all that time was any request or demand made of either Frazee or Everett for payment of either principal or interest. The defendants therefore claim the benefit of the statute of limitations as a bar to the suit.

The complainant, at the hearing, sufficiently proved the execution of the bond and mortgage, and also the payment in December, 1872, of six months’ interest on the bond ($52.50), up to December 19th, 1872. This payment was made by Barnett, who was then the owner of the property,, to Kane, then still the holder of the mortgage, and was endorsed on the bond by Kane, but the endorsement of this payment is by mistake made to December 19th, 1873, instead of 1872. There are three other endorsements of interest on the bond, each for $52.50, and dated respectively Junel9th, 1873, December 19th, 1873, and “August the 9th, 1875,” the two latter being signed by the complainant. The complainant, although called as a witness, offers no- proof in relation to the payments endorsed as of June 19th, 1873, or December 19th,.1873, or as to the circumstances of these endorsements, and Barnett, who was then the owner of. the property, swears that he does not recollect paying interest on the mortgage more than once, and says-that he has no recollection at all of ever having seen Blue until he saw him at the hearing, and does not recognize him. In this state of the proof,, these endorsements of June 19th, 1873, and December 19th, 1873, on the bond, written apparently by the complainant, cannot be taken as proofs of payment of interest, and may be laid out of the case, except in connection with their effect as endorsements by the complainant, and in connection with the evidence given by him in relation to the endorsement of $52.50 as interest received August 9th, 1875. This payment is within twenty years of the date of filing the bill, and while Frazee was- the owner, and complainant swears that it was received by him from Frazee. His account is most detailed and circumstantial, and is as follows: He then lived at Rockaway, New Jersey; drove down from that place to Newark; saw Barnett at his place of business in Newark and applied to him for the interest. Barnett told him he had sold the property to Frazee,.and directed complainant where to find Frazee; at a place in Newark, which was- up Market street and “ over the hill.” The name of the street complainant says he has forgotten. He went to this place to which Barnett had directed him and found Frazee there keeping, a grocery store. Complainant told Frazee that he (complainant) had the mortgage on the lot Frazee had bought,.and asked Frazee whether he was aware of it, to which the latter replied that he was and that he was willing to pay it as fast as he could. Complainant asked Frazee for his interest, and Frazee, being hard up for money, asked him to take groceries for it, which complainant consented to do, and he then took groceries — teas, coffee &c. — to the amount of $52.50. This was six months’ interest, and if the previous endorsements of June and December, 1873, represent genuine payments up to December 19th, 1873, the whole amount then due was. eighteen months’ interest to June, 1875, $157.50. Complainant says that Frazee. promised to pay him more interest soon.

After getting this payment of $52,50, Blue further swears that, at Frazee’s invitation, he took dinner with Frazee and his family, in his dwelling, which was in the same building with the store, and there saw Frazee’s family, whom he remembers distinctly. There were, he says, two daughters, one a very small girl, like a dwarf; another larger girl, weighing one hundred and fifty or one hundred and sixty. Nothing is said about Frazee’s wife. After dinner, complainant loaded his goods and went home. In reference to the property, Frazee told complainrant that he had taken it in a' deai and wanted to sell it, and wished complainant to wait until he got a chance to sell it, when he would give complainant his money, and complainant then told him he must have his interest. About six months after this interview, as complainant says, he went again to Frazee for the interest, and then Frazee told him that he had sold the property to a man in New York State, whose name and address Frazee then gave .him. Complainant says that he wrote this man soon after; that he got no answer; that after two or three months he wrote again, with the same result, and that, in April, 1877, he moved from Rockaway to Nebraska, and after reaching there, wrote once more, but heard nothing. He says that on this last occasion he still had the address on a memorandum, but it has since been lost or mislaid, and complainant now says that he does not recollect either the name or the address. With the exception of these letters, complainant does not claim to have made any demand or request on anybody for either principal or interest on the mortgage since the application to Frazee, which he says he made about six months after August, 1875. When complainant left New Jersey he had but little property beyond this • mortgáge, and his pecuniary condition since April, 1877, has been such that the possession of this amount of money was a matter of great importance. It is doubtful from the evidence whether, at any time during this interval, he"had in Nebraska as much money as was represented by this bond. His explanation of the failure to foreclose the mortgage or make any, further demand of either principal or interest is that, before going West, he spoke to a lawyer about it, Mr. Jesse Cutler-, of Mor-, ristown, and the latter told him that “ a mortgage never dies.” He therefore thought, he says, that it would never get outlawed. Upon the evidence produced by defendant, it appeared that this entire account of the payment of interest of August, 1875, by. Frazee, the owner of the premises, was untrue. Frazee is a carpenter, and has been one for thirty-five years, and never kept a grocery store in Newark or elsewhere. His family consists of himself and wife, and he never had any daughter. In August, 1875, he lived in Newark, but not “over the hill,” up Market street, but down, in the lower part of the city, across the railroad, being in the opposite quarter. He never saw Blue until the day before the hearing, when Blue came out to his house, in Clinton township.. Mrs. Frazee, his wife, corroborates this statement, and-also says that Blue never dined with them anywhere; that she, never saw .him until'a week before the hearing-, when he came out.- Barnett also' swears that Blue’s statement that he directed him to Mr. Frazee’s residence, on the hill, and sent him there to get the interest,ds not true, and that, so far as he recollects; he, never saw Blue at. all until the hearing.

After Frazee gave his evidence in Blue’s hearing, the latter was recalled to the stand, and 'being asked whether he then recognized the witness Frazee as the man he called on in August, 1875,-says, “ I couldn’t say he was; it is so long ago. I wouldn’t say positively that he'was the man. I couldn’t say.” Nothing, is offere’d in rebuttal of defendant’e evideuce or by way of corroborating complainant,. whose general reputation for truth is also directly attacked by witnesses who know his reputation in his neighborhood, both in Orange, New Jersey, where he lived before going to Rockaway, and in Nebraska.

Upon the whole evidence there is no doubt, I think, that no payment of interest on this mortgage was made in August, 1875,. by Frazee, .the owner, or anyone acting for him. Nor do I think' that, on this evidence, there can be any other conclusion, than that the endorsements of June, 1873, and December, 1873, must be considered as endorsements made by. the complainant without actual payment, so that the last interest on the mortgage was paid, therefore, in December, 1872, nearly twenty-two years before the filing of the bill. And it must be found also, I think, that the complainant’s evidence as to this payment of August, 1875, is so unreliable as to affect complainant’s credibility on the other portions of his evidence, which are material. On this point of payment in August, 1875, it is not seriously contended by complainant’s counsel that the transaction of August, 1875, detailed by complainant, took place with Frazee, the owner of the property, but it is suggested that they did take place with some other man whom complainant took for Frazee, and that Blue’s statement is at least honestly made. But the conversation sworn to have taken place between Blue and an owner of mortgaged property, in relation to the property and the payment of the interest, is given with such detail and circumstance that the existence of another person, either a Frazee or anyone else, with whom such conversation could take place, without any further explanation on either side, or any suggestion of mistake on either side, after a two or three hours’ talk on business and socially, is not credible. Six months later he saw the same man at the same place, had another talk about the payment of interest on the same mortgage, was told that the property had been sold, and the residence of the purchaser was given. And this second interview, like the first, did not result in either of the parties to it discovering that there was any mistake on either side about the payment of interest by the supposed Frazee to complainant, or about the complainant holding a mortgage on the supposed Frazee’s lot.

And the improbability of complainant’s story, taken in connection with the evidence impugning his character for veracity, is sufficient to discredit his story that Frazee, or the man he took for Frazee, subsequently gave him the name and address of the purchaser, or that he ever wrote to any such purchaser demanding interest on the mortgage. And even should this statement be taken as true, it is not a sufficient explanation of complainant’s delay for over twenty years in foreclosing his mortgage, when the payment of the mortgage was a matter of so much importance to him. Nor can the advice of Mr. Cutler, before complainant’s removal to the West, if it was ever given in the shape complainant swears to, be considered as sufficient explanation or excuse for the delay. The delay, therefore, is not explained or accounted for. But it appears as a fact, from the evidence at the hearing, and satisfactorily, that no payment has been made of the principal of the mortgage, or of any interest thereon since December, 1872. All of the parties to the original bond, and the successive owners of the- property and mortgage, are alive and have been examined upon this point. Kane and Blue prove non-payment to either of them of any of the principal or of interest (except as above mentioned), and Conselyea, Barnett, Frazee and Everett, the successive owners, also swear to non-payment of interest or principal by either of them respectively (except Barnett’s payment in December, 1872), and Everett also shows in addition that his purchase was made after being .informed of the existence of the mortgage, and ascertaining after inquiry that no principal or interest had been paid or demand thereof made of the owners within twenty years previous to his purchase, and that he therefore purchased it for $2,000, as free and dear of the mortgage, and by warranty deed from Frazee. Inquiry by Everett’s attorneys before taking the deed, as to the complainant’s residence or existence, was ineffectual, and neither his residence nor existence was ascertained until after the purchase, when Everett’s attorneys, Messrs. Blake & Howe, having ascertained complainant’s address, wrote complainant (July 6th, 1894) that the mortgage was outlawed and requested a satisfaction-piece in order to save expense of cancellation by application to a court. The complainant, after receipt of this letter, sent the mortgage for foreclosure. It also appears by the evidence that the title was held by Frazee for the benefit of Conselyea, his brother-in-law, and that Conselyea, the original obligor, received the purchase-money ($2,000) upon Frazee giving the warranty deed. It does not appear, however, that the purchaser, Everett, knew of these relations between these-parties, and both Conselyea and Erazee being financially irresponsible, he made the purchase, relying upon the discharge of the mortgage by lapse of time.

The case on the facts, therefore, as I find them, is one where the complainant does not satisfactorily explain his failure to foreclose his mortgage or make any demand for principal or. interest for over twenty years, and the question is whether, in the absence of this explanation or excuse for the delay, he is still entitled to foreclose his mortgage, on showing by satisfactory proof that it is in fact unpaid. For the complainant, it. is. claimed that he,is so entitled, and complainant’s position is that the whole legal effect of the lapse Of twenty years without payment or demand is1 simply to raise a presumption of payment, which presumption is one of fact and not of law, and that if the complainant, after such lapse of time, can still satisfactorily prove that in fact the mortgage, is not paid, the presumption of payment arising from lapse of time is rebutted and he is entitled-to recover, notwithstanding the delay is not accounted for.' ' ",

The defendant, on- the Other hand, on this' branch of the case,! contends that upon a failure to account -for or explain satisfac-i torily the delay for twenty years, the' presumption of. payment,' which arises from this lapse, of time, is absolute and conclusive,' and that the presumption arising from this source cannot, in the absence of satisfactory explanation of the delay, be rebutted by. proof, no matter how clear, that payment has not been made. The difference between the positions, as'will be observed, is as-to the nature and character of-the presumption arising from the:, lapse of time, and as to the effect of the unexplained delay, upon the presumption, where the complainant still claims to have full proof of non-payment in fact., Complainant claims that the presumption has no effect if on the whole case non-payment of: the debt is satisfactorily established, while defendant claims that, delay for twenty years, unexplained, gives to the presumption of payment, arising from lapse of time, the force and effect of a conclusive presumption of payment which cannot be rebutted.

The decisions Of our own courts and expressions of the judges in these decisions are confidently relied, on by each counsel 'asi sustaining his view as to the character and the effect of this presumption of payment from lapse of time, and I have therefore-carefully examined all the cases in our courts to which they have referred me, and I shall also refer to two or three earlier cases decided at law, which throw great light upon the question. . S

As the result of my examination, I conclude that our decisions, at law as well as in equity, establish the rule that unless the delay for twenty years is satisfactorily accounted for or explained, the presumption of payment of a bond and mortgage or other pecuniary debt is conclusive and cannot be rebutted simply by proof in fact of non-payment without accounting for the delay. The reason of giving this effect to the failure to explain the delay seems to be that the presumption of payment arising from a forbearance of a debt is held to arise upon the general presumption that a man is always ready to claim his own, and that if he fails to demand it for a sufficient period of time it must be because he had no right to it. The period of twenty years has been fixed as the sufficient limit of time to give rise to the presumption, and when this time has elapsed, unaccounted for or unexplained, the law, upon general principles and without reference to the circumstances of the particular case, raises the presumption of payment. If the delay is satisfactorily accounted for, then the presumption of payment from lapse of time does not apply as an absolute presumption of payment, but the delay still remains as one of the facts in the case upon which the ultimate question of payment or non-payment is to be determined, in connection with the other evidence. Thus, in Humphreys v. Humphreys, 3 P. Wms. 395 (1735), Lord-Chancellor Talbot enjoined a suit on a bond, and said (atp. 396) “that after twenty years and no interest paid during that time, a bond shall be presumed to be satisfied, unless something appears to answer that length, of time”

In Hillary v. Waller, 13 Ves. 239 (1806), Lord Eldon says (at p.266): “As to a bond * * * upon twenty years, tire presumption is that it has been paid, and the presumption will hold, unless insolvency or a state approaching it can be shown, or that the party was a near relative, or the absence of the party having the right to the money, or something which repels the presumption that a man is ready to enjoy what is his own.” This shows that, in Lord Eldon’s view, the proofs must, in the first instance, be directed to facts or to the situation within the twenty years, and to explaining the delay, which proofs would have the effect of preventing the operation of the conclusive presumption of payment. The earliest case in our state which I find on my examination, is Buchanan v. Rowland, 2 South. 721 (1820). In this case the substantial question -was whether a judgment fifty years old was satisfied. The case was tried before a jury, and an injunction against the judgment, obtained thirty years before the suit and. not dissolved until shortly before the suit, was, among other things, relied on to explain the delay in collecting the judgment. The jury, upon the whole case, found that the judgment had not been paid. Chief-Justice Kirkpatrick, on application to set aside the verdict, states the question involved in the case thus (at p. 788): “What, then, is the ground of this presumption of payment arising from length of time — to what cases does it apply and how far is it conclusive?” This inquiry covers the precise point now involved.

As to the effect of the presumption and whether it is only evidence upon a plea of payment that may be strengthened or weakened by other circumstances, and whether the jury are therefore to judge of its strength or weakness, and pass upon it like other evidence, he says (at p. 780) that the presumption may be either strengthened or invalidated, or indeed wholly overcome, by circumstances, and that when these circumstances are matters in pais, to be proved by witnesses, the jury must judge both of the truth of their existence and of their operation and effect on the presumption. “But still,” he says, “when the length of time is wholly unaccounted for, and the presumption therefore stands in its full force, it is conclusive, and the conclusion to be drawn from it is a conclusion of law, to be declared by the court always and universally the same.” Also (at p. 788), after an examination of the cases, he says: “ From these cases, I think the conclusion irresistible, not only that twenty years affords a presumption of payment, but that that presumption, standing alone, is conclusive in the law and is so to be declared by this court.” After examination of the facts of the case, the court held that there was nothing set up which accounted sufficiently for the delay, and set aside the verdict as contrary to law.

The next case at law, Gulick v. Loder, 1 Gr. 68 (1832), was an action of debt upon a foreign judgment, brought more than twenty years after its recovery. Such judgment was not within our statute of limitations, and one question in the case was whether it could be enforced after twenty years. Chief-Justice Ewing, delivering the opinion of the court, says (at p. 71): “ It is a general rule that forbearance for twenty years, unexplained, unaccounted for and unrebutted, will extinguish a judgment as well as all other pecuniary demands.” He also says; It is thus seen that if >we had no express statute, a judgment of a court of our own state could not be enforced after a lapse of twenty years unexplained.” And after fully examining Buchanan v. Rowland, supra, he further says (at p. 74) that the court in that case considered lapse of time, as a matter of evidence, as presumptive proof of the satisfaction of the demand, to be always submitted to the jury, but when wholly unaccounted for, a presumption conclusive in its nature, and which the jury, therefore, are bound to regard as plenary evidence-in support of the plea of payment, and wherefrom they ought to find the plea as true.

I have referred to these decisions at length, because I think they settled clearly, at an early date and before the question arose in our chancery cases, the rule in courts of law as to the precise character of this presumption of payment arising from lapse of time, and that this was an absolute presumption of payment if the lapse of time was unexplained. So far as this question is concerned, the rule as to the effect of presumption is a rule of evidence, which is the same in equity as at law, and I think a careful examination of the cases decided in chancery will also show that this has been the rule here adopted.. In some of these cases, decrees for payment have been granted on foreclosure of mortgages more than twenty years overdue, and upon which no payments or demands have been made, and in other cases decrees have been refused upon similar defaults; and an examination of the eases will show, I think, that a vital question in each case was whether the lapse of time was or was not sufficiently accounted for or explained. If the delay was explained, then the presumption of payment arising from lapse of time was not conclusive, but the lapse of time was merely a fact in the whole case on the question of payment. If the lapse of time was not explained, then the presumption of payment arising therefrom was absolute, and was not merely a fact in the case to be considered with other facts. In the earliest case, Wanamaker v. Van Buskirk, Sax. 685 (July, 1832), the Chancellor said (at p. 693) that lapse of time, standing alone, without explanation, would prevail and be tantamount to absolute proof, as well in equity as at law, and because it was right to quiet possession. He held that the lapse of time without demand, in this case, was sufficiently explained by the relationship and situation of the parties, and that this repelled the presumption that the mortgagee would have sought payment if the debt had really been owed, and a decree for payment of the mortgage was made. In Evans v. Huffman, 1 Halst. Ch. 354 (1846), a bill was filed to foreclose a mortgage over twenty-one years after the mortgage was due. Insolvency of the mortgagor was the reason relied on for explaining the delay in foreclosing, but this was held insufficient, and this failure to explain the delay was one ground upon which the bill was dismissed.

In Olden v. Hubbard, 7 Stew. Eq. 85 (1881), a bill was filed after the lapse of twenty-three years without payment or demand, and no explanation or excuse for the delay was shown in the bill. Chancellor Runyon sustained a demurrer to the bill, stating (at p. 86): “In the absence of sufficient explanation or excuse, the defendant is entitled to the benefit of the presumption [of payment] on demurrer.”

In Stimmis v. Stimmis, 33 Atl. Rep. 468, a mortgage, more than twenty years overdue, was, on demurrer, held not barred, because the bill showed that, within seven years before filing the bill, the defendant had acknowledged the existence of the mortgage, and other circumstances set out in the bill and occurring within the time which had elapsed since the mortgages were due, sufficiently explained and accounted for the delay in prosecuting the mortgage or demanding payment.

In Magee v. Bradley,38 Atl. Rep. 103 (Vice-Chancellor Reed, 1896), a mortgage was held barred by lapse of over twenty years without payment or demand, and the mere kinship of the parties was held insufficient to account for the delay.

There is another class of cases in which the circumstance relied on to overcome" the presumption of payment is an acknowledgment of the validity of the debt, after the twenty years’ unexplained delay, but within twenty years of the filing of the bill. Murphy v. Coates, 6 Stew. Eq. 424 (1881), is of this class. In this case two mortgages were due, one in 1855 and one in 1856. In 1879 the mortgagee wrote on each of them and on the bonds an acknowledgment that no part of the principal or interest had been paid, and that the whole was due from the date of the instruments. Ho explanation of the intervening delay appears to have been made in the case. • This acknowledgment was held sufficient to overcome the presumption arising from lapse of time, and decree for payment, based solely on this acknowledgment, was held effective against the second mortgagee.

Acknowledgments of this character, even if not accompanied ,by express promise to pay, were always considered in courts of law as sufficient to raise a new promise, which would revive a debt on simple contract barred by the statute of limitations. The equitable obligation to pay the debt was a sufficient consideration for the new promise of which the acknowledgment was sufficient evidence. Parker v. Butterworth, 17 Vr. 244 (Depue, J., at p. 847). Upon the same principle, an acknowledgment of the validity of a mortgage debt, after the expiration of twenty years, would equitably have the effect of imposing on the debtor the obligation to pay it, preventing him from claiming that at the time of the acknowledgment he was discharged from the debt by reason of the presumption of payment. An acknowledgment sufficient to overcome the positive bar of a statute is certainly sufficient to overcome a mere rule of evidence, the general purpose of which is the same as that of the statute, and although in a court of law the subsequent acknowledgment of a debt due on bond, even with an express promise, has- not been considered sufficient to overcome the bar of the statute (Ludlow v. Van Camp, 2 Halst. 113; Van Dike v. Van Dike, 3 Gr. 289, 297), yet the rule in equity, as established by Murphy v. Coates, supra, and Stimmis v. Stimmis, supra, follows the equitable rule settled by the courts of law in actions on simple contract and applies to the rule of evidence relating to presumption of payment from lapse of time, the same principles as those applied by courts of law to the statute of limitations in actions on contracts based on equitable or moral considerations. Murphy v. Coates, however, was not, as it seems to me, a decision based on a ruling either way, as to the necessity of explaining the delay of twenty years, nor was that question directly involved. This case merely decides that the presumption of payment arising from lapse of time may also be overcome by subsequent acknowledgment, thus adding another class of proof as sufficient for that purpose. Stimmis v. Stimmis, supra, affords an instance of both classes of proof, explanation of delay and acknowledgment, either of which is held to be sufficient.

The general result of all these casés, as I conclude, then, in relation to the point now in question, is to establish the rule, in equity, that the lapse of twenty years before filing the bill, without demand, payment or acknowledgment of a mortgage debt, unaccounted for and unexplained, gives rise to a conclusive presumption of payment, which cannot be rebutted by proof that the debt is not in fact paid. The rule, although operating harshly in particular cases, is founded upon the great general and public benefit of fixing the time when titles and possessions of property may be forever quieted against claims which are held back without cause. Applying this rule, I will advise that the bill be dismissed upon this ground. The defendant claims that, independent of this rule, the complainant’s claim is barred by laches and also by the statute of limitations. But, as to the bar of the statute of limitations, it must be observed that this statute, not being expressly applicable to equitable remedies, is applied only by analogy, and that in our statute of limitations the bar of twenty years’ possession, although made in favor of the mortgagee (Gen. Stat. p. 1978 § 18 tit. “ Limitations”), does not extend to protect the possession of the mortgagor or his assigns. Under the statute of limitations (21 Jac. 1 c. 16, from which our statute of limitations (section 16) limiting the right of entry to twenty years was substantially taken), it was held, both at law and in equity, that the possession of the mortgagor was the possession of the mortgagee, and therefore the statute did not run against the mortgagee. See cases cited in Heath v. Pugh, 6 Q. B. Div. 359; Lehman v. Newnham, 1 Ves. Sr. 51. These decisions, however, were founded on the theory that the mortgagor was a tenant at will to the mortgagee, and this rule, so far as relates to such tenure before default, has been rejected by our courts, which hold that until default there is no right of entry. Sanderson v. Price, 1 Zab. 646 a. And section 17, an additional section, expressly limits the action of ejectment to twenty years, and seems to be applicable to mortgagees, but no decisions of our courts of law upon the application of this section to suits upon mortgages have been referred to.

In Wanamaker v. Van Buskirk, supra, the chancellor, although intimating that this section may properly be held so applicable, withholds decision of the question as not necessary, and Chancellor Halsted, in Evans v. Huffman, although also concurring in this view of the statute, puts the decision of the case on other grounds. None of the later eases in chancery appear to decide .the question expressly, and it is one of such importance, and the effect of holding the statute applicable would involve such consequences, that adjudication on it should not be made unless, necessary for the decision of the case. In view of the present status of the decisions in chancery and of the absence of any decision at law holding the statute applicable to a suit by mortgagee, and defining the legal status of mortgagor and mortgagee under this statute, and inasmuch as a decision is not necessary, I do not pass on this question. t

In reference to the claim of laches — while laches of the complainant is a well-recognized defence, yet it is settled that, up to the full limit of twenty years, no delay or laches in foreclosing a mortgage will defeat it. In Barned v. Barned, 6 C. E. Gr. 245, the mortgage was more than nineteen years overdue.

In the present case, the last acknowledgment of the debt was in January, 1874, by Frazee’s acceptance of his deed, which was made subject to it. This was less than twenty-one years before filing the bill, and the case shows no actual detriment or loss to the mortgagor or his assigns by reason of loss of evidence or otherwise. In this case, therefore, the question of laches seems to come back ultimately to the point of imputing laches only by force of the rules relating to presumption of payment after lapse of twenty years unexplained, and the case is, therefore, one which, I think, should be disposed of .directly upon the operation of this rule alone.

I advise decree dismissing the bill, with costs.


text:
    James W. Ketcham v. Sarah Owen et al.
    1. In an action for specific performance of a contract for the sale of land, it appeared that the vendor was a widow over seventy years old; that the contract was made, when complainant was not present, at the office of S., who had been a neighbor for thirty-five years, had done business for her husband and had advised her after the husband’s death; that she was influenced by the advice of S., who acted for complainant, to sell for $2,375; that S. had previously tried to buy the land, but was not willing to pay $3,000, the price she asked; and that afterwards, but before the contract was made, she wrote him offering to take $2,500. — Held, that the defence that the agreement was unfairly obtained by S., by false representations made to the vendor to induce her to make it, was not sustained.
    2. Specific performance of a contract for the sale of land for $2,375, which was worth $3,000, will not be refused on the ground of inadequacy of price.
    3. Where a vendor of land, in April, 1890, informed her vendee that she would not perform the contract, delay in bringing suit for specific performance until August, 1893, was such laches as barred the action, especially as the contract was signed onlv by the vendor.

      On bill for specific performance. Heard on bill, amended bill, answers, replication and proofs.

      Mr. James C. Youngblood and Mr. George T. Werts, for the complainant.

      Mr. John B. Vreeland and Mr. Theodore Little, for the defendants.
   Emery, V. C.

This is a suit for specific performance of a contract to convey land, brought by the purchaser against the vendor under the following state of facts: Henry Owen, the husband of the defendant Sarah Owen, died seized of the property in question, and, by the third item of his will, devised the property, a farm of seventy-six acres, in Morris county (along with the remainder of his property), to his wife, for her use and support during her life, to be used by her as she deemed most advisable, and after her death all the estate devised to her for her use during her life, which should then remain unexpended by her for her use and support, was to be divided equally between his son and three daughters. The testator appointed his wife the sole executrix of his will,

“empowering her, if she sees fit, to sell all my real estate of which I may be possessed at my decease (excepting the farm in. Ohio), devised to my son Bartley, and to give a good and sufficient title therefor, and to use the proceeds thereof in manner and for the purpose set forth in Item Third.”

Mrs. Owen proved the will in September, 1885, and on August 30th, 1889, executed the following agreement:

“ New Yoke, Aug. 30th, ’89.
“Mrs. Sarah Owen, of Newark, N. J., has sold her farm of 76 acres, at Morris Plains, adjoining Mr. Sire’s farm, to Mr. James W. Ketcham, of New York city, for $2,375 — $2,000 mortgage back at 6 per cent, and $375 in cash. Deed to be given a few days before the first of April, 1890, at the office of Albert Sire, 99 Nassau St. Mr. Ketcham to pay tax on farm, mortgage to be made for three years.
“Deceived twenty-five dollars.
Mes. Saeah Owen.”

The agreement was executed at the office of Mr. Benjamin Sire, a real estate dealer in New York, and at that time $25 was paid to Mrs. Owen on behalf of Mr. Ketcham. At the time of signing this agreement, Mr. Ketcham was not present, but an agreement in precisely the same terms, and signed with his name, was delivered to Mrs. Owen by Mr. Sire. During the fall of 1889, Bartley Owen, the son, and Mr. Williams, a son-in-law of testator, who did not know of the agreement for sale until after it was made, applied to Mr. Ketcham to give up the proposed sale, and offered to return the $25 paid, but he declined. The parties differ as to the reasons given. Shortly before April, 1890, when the deed was to be delivered, complainant, with his counsel, Mr. Dupignac, of New York, applied to Mrs. Owen, at her then residence in Newark, to deliver the deed and accept the mortgage, tendering the same for execution and offering to pay the balance of the cash purchase price. Mrs. Owen said she wouldn’t have anything to do with it; that she had reconsidered the matter and didn’t want to sell the property, and had left it in the hands of her lawyers. After this notification from Mrs. Owen that she would not carry out the contract, no further application was made to her by complainant, and no proceedings against her on the contract were taken until the filing of the bill in this case on August 4th, 1893. The bill was subsequently amended on August 13th, 1895, and further amended in March, 1896. The defendants, who are the widow and heirs-at-law of the testator, resist specific performance upon several grounds, three of which will be considered.

First. Because the agreement was unfairly obtained from the defendant Mrs. Owen by Benjamin Sire, who was the only person known to her in the negotiations, and who made false representations to her in order to induce her to make the agreement.

Second. Because the price is inadequate, the property being worth at least $5,000, and the enforcement of the agreement would be inequitable.

Third. Because of complainant’s laches in filing his bill.

As to the first ground, the allegation of the answer is that Mrs. Owen, who was over seventy years of age, and .for years had been a neighbor of Mr. Sire’s, was induced by Sire to visit his office, on other business, and that on doing so, with no intention of selling the farm, Sire advised and persuaded her to sell it for the price fixed, representing to her, among other things, that the tenant then on the place was going to leave, and that on his representations and persuasions she signed the agreement, not knowing the value of the premises. The evidence, both of Mr. Sire and Mrs. Owen, shows that Mrs. Owen was influenced by the advice of Sire, who had been a neighbor for thirty-five years, had done business for Owen when he was living, and advised his widow after his death. But Mrs. Owen herself, while swearing that she yielded to Sire’s persuasion to sign the contract, says that nothing was said to her about the tenant’s leaving. Sire says the same thing, and although Mrs. Vincent, a daughter who was with Mrs. Owen at the time, says that Mr. Sire advised her mother to sell while she had a chance, because he understood Mr. Call, the tenant, was to leave in the spring, yet in view of the evidence of Mrs. Owen now given, it is clear, I think, that this statement, even if made, cannot be considered as having influenced her in making the contract. The other charges that the sale was broached upon a visit to Sire’s office, induced for another purpose, and that Mrs. Owen had no idea of the value of the property, is also shown to be unfounded by a letter written to Mr. Sire by Mrs. Owen a week before, on August 22d, 1889, in which she says that after considering the matter she is willing to sell for $2,500 as the lowest price, and authorizes him to offer it for that. This letter was written at Newark and by Mrs. Vincent, with whom Mrs. Owen was then living, and was written at Mrs. Owen’s request, who signed the letter after it was read over to her. Mrs. Owen had forgotten all about this letter, for I see no reason to doubt her honesty. Previous to this time Sire had, as she said, tried to buy the farm, which adjoined his property, but he was not willing to give her the price she asked — $3,000. There was discussion between Mr. Sire and Mrs. Owen about the price, after she reached his office on August 30th, in reply to a message requesting her to come over, and Sire, who was certainly acting for Ketcham, and, as he himself now swears, was acting for both, advised Mrs. Owen to sell. It was probably due to Mr. Sire’s advice that she yielded from the lowest price fixed by the letter — $2,500. But the charge of the answer that the agreement was procured by false representation on the part of Sire, is not sustained.

Secondly, as to the inadequacy of price, the evidence for complainant and defendant shows a wide discrepancy in value, the defendant’s witnesses (other than the parties) fixing the value at $4,500 to $6,000. The complainant’s witnesses generally fix the value at $2,500 to $3,500, two witnesses also placing it below $2,000, at which figure Sire fixes the value.

The reason of the rather wide difference is plainly by reason of the value being to a certain extent speculative. The property is located about three-quarters of a mile from Morris Plains, adjoining, or in the neighborhood, of places occupied for country residences, and desirable for that purpose. As farming land it is not specially valuable, except a portion of it perhaps for small truck-farming, and the buildings on it are not in good condition. The farm rents for $125 a year, the owner paying the taxes. The value of the place is therefore quite of a speculative character, but taking all of the evidence, it seems to me that an owner not forced to sell and in a situation to hold for its fair value, $3,000 is as low a price as a court could consider to be a fair and adequate price. Sire says that $3,000 was the price which Owen fixed in his’lifetime. Mrs. Owen’s valuation of $2,500 in her letter I do not place much reliance on as an estimate of value, for the reason that, in her situation, she was under strong personal inducements to yield on the point of value in order to have control of the fund for her support. She says that of the $125 rent she paid one-half for taxes, and that she was ready to sell for $2,500, when the others thought it too low. At Sire’s office, on August 30th, she yielded $125 further on the price and consented to take $2,375, although she had previously fixed $2,500. Taking the fair valuation at the price I have fixed, the inadequacy is not great, and if Mrs. Owen was dealing only with her own property, and not acting as trustee, it would not be sufficient to bar performance, nor would it even now probably be sufficient, standing alone, to be a bar to the relief, but it is, under the circumstances of this suit, a fact to' be considered in connection with others on the right of the complainant to call upon the court to require the trustee to convey at this late day.

The laches of complainant, the remaining ground, is the main reason why relief must be refused, for while it is settled that time of performance is not generally of the essence of the contract, it is also settled that time may become essential by the express contract of the parties, and also may be made essential by the action of the parties after the contract. 3 Pom. Eq. Jur. § 1408, and cases cited. One of the recognized methods by which time may become essential by action of the parties after the contract, is by one party giving notice to the other to complete performance within a reasonable time. 3 Pom. Eq. Jur. § 1408 ; Pom. Spec. Perf. § 395 &c. Another, action of one party to the contract which will make time essential is a plain and direct notice to the other that he does not intend to perform the contract. Pom. Spec. Perf. § 1412. The general rule as to application to a court of equity for specific performance is that the complainant must show himself “ready, desirous, prompt and eager,” the language which has been constantly repealed in the decisions from the time of its first use in 1801 by Lord Alvanley, M. R., in Milward v. Earl Thanet, 5 Ves. 720, note ; and where one party, arbitrarily or otherwise, notifies the other that he will not perform the contract, the bill, as the cases say, must be filed “speedily,” unless, indeed, the party to whom notice is given be in possession under the contract, in which case the continuance of possession will be considered as a continual assertion of right under the contract and exclude the notion of acquiescence in the abandonment. Pom. Spec. Perf. § 412, and eases cited.

In Southcomb v. Bishop of Exeter, 6 Hare *213, the purchaser had given notice in January, 1842, that he rescinded the contract; a bill filed August 30th, 1843, was held to be too late. Vice-Chancellor Wigram says (at p. 218): “Whatever the leaning of the court in earlier times may have been, the tendency of the modern cases has been to hold parties seeking the assistance of the court on bills for specific performance to the rule of equity which requires them to be prompt in asking such assistance.” In Eads v. Williams, 4 De G., M. & G. 674, Lord-Chancellor Cranworth said (at p. 691) that where the purchaser repudiated the contract and quitted possession, a delay of three and a half years by the vendor in filing the bill was fatal. And in the English courts, a year seems to have been fixed as the limit of time for filing a bill, where one party has repudiated a contract admittedly made, and acquiescence for this period in the rescission is fatal to the remedy of specific performance. Watson v. Reid, 1 Russ. & M. 236.

The same rule was laid down in McDermid v. McGregor, 21 Minn. 111, and it was held that Avhere one of the parties to a contract notifies the other that he will not perform it, acquiescence in this by the other party (not being in possession) by a comparatively brief delay in enforcing his right by suit, will bar an action. for specific performance. The plain ground for requiring the bill to be filed speedily in such cases is that, on the refusal to perform by one party to the contract, the other party has on his part the right either to accept this refusal, as ground for withdrawal on his own part, or to insist on the existence of the contract by filing his bill to enforce. And his failure to take any action looking to the enforcement of the contract as 'existing may fairly be taken as evidence that he intends to acquiesce in the abandonmeut of the contract, and is no longer bound thereby on his part, and stands on his remedy at law for a breach of the contract. So long as he does not take such action to enforce this contract as existing, he is, in fact, exercising his option to consider the contract abandoned, and acquiescence for any considerable time in the notice of abandonment should be sufficient of itself to amount to an acceptance of the rescission and to put .him to his remedy at law for a breach of the contract. Parkin v. Thorold, 16 Beav. 59, 73. Without undertaking to fix so short a limit in the present case as is fixed by the cases above referred to, or to say that any special limit should be fixed, it seems to me that the delay from April, 1890, when the notice was given, to August, 1893, is a bar to relief in this ease. The complainant puts the delay upon Mr. Dupignae, his counsel in Yew York, who was directed, as he says, to proceed at once with the suit to get the property, and that complainant did not find out until the early part of 1891 that he had not done so. In the latter part of 1891 he employed counsel in Yew Jersey, who could not proceed until the papers (including the agreement) were procured from Dupignae; and these, complainant says, because of Dnpignac’s absence in the South and subsequent death, were not procured until the early part of 1893, when they were delivered to counsel here, who filed the bill in the following August.

It is manifest that, during all this time up to 1893, the complainant was, so far as Mrs. Owen is concerned, acquiescing in her notice of abandonment of the contract, and on his part holding back, as he had the right to do under her notice, from fulfillment on his part, and this status continued until the expiration of the three years provided for the term of the mortgage. The defendants had nothing to do with the delay of Mr. Dupignae, and although this failure of Mr. Dupignae to act may explain complainant’s delay, 'it does not, so far as the defendants are concerned, excuse it. And it must also be noticed as of some importance, on the question of delay in filing bill after notification that the vendor refused to perform, that the contract in this case, as set out in the bill, is unilateral, and only became binding on Ketcliam by the filing of the bill. Carskaddon v. Kennedy, 13 Stew. Eq. 259, 277; Richards v. Green, 8 C. E. Gr. 536. A delay of over three years in committing himself to any obligation to the defendant would therefore seem fatal to the right to require performance.

It is true that Mrs. Owen produced on the hearing a similar contract, signed in Kelcham’s name, and which was delivered to her by Mr. Sire, but Ketcham did not give any evidence as to this signature or whether he had authorized it, so that the case still stands on complainant’s bill as one to enforce a unilateral contraet.

Complainant’s counsel relies upon Young v. Young, 6 Dick. Ch. Rep. 491, where relief was granted, as analogous to this case on the question of laches. But the case was, as I look at it, altogether different, and the fact which here makes time essential, viz., the deliberate repudiation of an acknowledged written contract, was altogether absent there. In Young v. Young the complainants were in possession for years. There was no doubt as to the precise character of their remedy, and whether it was legal or equitable, action on complainants’ part happened to be unavoidably delayed, and the complainants were always insisting on their rights. The case, therefore, does not seem to cover this.

I advise a decree dismissing the bill, upon this ground, without examining the other objections set up by defendants.