author: Emery, Y. C.

text:
    Orient Insurance Company v. Mary Rudolph et al.
    [Decided May 19th, 1905.]
    1. Since under New York laws and decisions supplementary proceedings are not considered special proceedings1 before a court or officer of limited jurisdiction, but as a new remedy in an action in which the court is possessed of general jurisdiction, the production and proof in a court of New Jersey of an order by a court of New York appointing a receiver in supplementary proceedings there, reciting the facts necessary to give the court jurisdiction to act in the proceedings, furnishes conclusive evidence of the regularity of the order when questioned collaterally, and prima facie evidence of the existence of the facts necessary to confer jurisdiction.
    2. Where property insured was located in the State of New York, and the policy contained the express provision that it should not he valid until countersigned by the agent of the company in the State of New York, the company being a corporation of Connecticut, and when, being so countersigned, it was mailed to the insured at his residence in Jersey City, the insurance contract was a New York contract and governed by its laws as to its validity, construction and discharge, and the debt due insured on the policy might be garnished there.
    3. Where property belonging to a resident of New Jersey is garnished in another state by valid proceedings taken in that state, the title of the receiver based thereon may be asserted in New Jersey.
    4. Where in supplementary proceedings in the State of New York the court had jurisdiction over the debt which was recoverable in that state by the judgment debtor, and notice of the proceedings was actually given to an agent in that state of the corporation indebted to the judgment debtor, which person was on general principles a proper agent for that purpose, the decision of the New York court on the question that the agent actually served was the officer designated within the New York statutes could not be collaterally attacked elsewhere.
    On bill and decree of interpleader, answers and cross-bills.

      Mr. Jacob L. Newman, for the defendant Seth Bird, receiver.

      Messrs. Grouse & Perlcins, for the defendant Rudolph.
   Emery, Y. C.

The complainant, a fire insurance company of Connecticut, has paid into court the sum of $955.85, due from it upon a fire insurance policy issued to one George W. Enderline on personal property (household furniture and merchandise), located in a building in North Tarry town, New York. The insured property was destroyed by fire on or about December 27th, 1902. The defendant Mary Rudolph claims the money paid into court, under'an assignment executed March 5th, 1903, by which Enderline assigned his interest in the policy, and all moneys due or collectible' under it. The defendant Seth Bird was on March 21st, 1903, appointed receiver, on supplementary proceedings, by an order of the judge of the county court of Westchester county, New York. The supplementary proceedings were instituted on February 10th, 1903, by the filing of an affidavit of the attorney for one William -S. Hall, a judgment creditor of Enderline, the insured, upon which an order for discovery was made. The receiver claims that iris title to the judgment debtor’s personal property, including this debt, related back, under the New York statutes, to the 10th day of February, and thus antedates the assignment to Mrs. Rudolph. The assignment to Mrs. Rudolph was not a purchase of the claim, but was made to secure or pay a pre-existing debt, and her claim, to prevail over the receiver, is rested upon several grounds: First. That the receiver’s title has not been proved. The receiver has offered in evidence only the record in the supplementary proceedings, commencing with the affidavit upon which the order for discovery was made, on March 10th, 1903, and including the formal order of his appointment on March 21st, 1903.

These orders recite all the preliminary proceedings requisite for the making of the order, and if they are in themselves sufficient evidence of the facts recited, then no further proof is required. These judicial proceedings in the State of New York must, under the federal constitution and statutes, “have such faith and credit given to them in every court within the United States as they have by law or usage in the courts of the state from which they are taken.” U. S. Rev. Stat. § 905. Under our Evidence act (P. L. 1900) judicial notice may be taken of the decisions of other states, and independent of statute the more reasonable view is that judicial notice of the statutes and decisions of other states upon the effect of their judicial proceedings must be taken in order to make the federal provisions effective. 2 Black Judg. § 860. It is suggested that these federal provisions apply only to final decrees, and that this order is not such decree, but as the order is the final decree or judgment in the supplementary .proceedings, and vesta title to the debtor’s property, it is clearly a final decree or judgment within the act.

Under the New York laws and decisions, these supplementary proceedings are not considered special proceedings before a court or officer of limited jurisdiction, but as a new remedy in an action in Avhich. the court is possessed of general jurisdiction, and the production and proof of an order appointing the receiver, reciting the facts necessary to give the court or judge jurisdiction to act in the proceedings, furnishes conclusive eAridencc of the regularity of the order Avhen questioned collaterally, and prima facie evidence of the existence of the facts necessary to confer jurisdiction. Wright v. Nostrand, 94 N. Y. 31, 45 (1883). That a judgment was recovered, and after personal service in New York upon Underline has not been contested, and giving now to these orders the same effect as would be given to them in the courts of New York, it must be held that the recital in the order of appointment furnishes sufficient proof of the facts recited in it. The New York cases referred to as giving a different effect to the order appointing a receiver related tq receiverships of a different character, and do not qualify the effect of Wright v. Nostrand. The first objection must "therefore be overruled.

Second. It is claimed that the entire proceeding in New York for seizure or garnishment of the debt due from the Connecticut company was void, because the debt was not due and had no situs in New York, and its seizure or garnishment by any proceedings was therefore beyond the jurisdiction of the New York courts. It is not claimed that this view of the scope and effect of proceedings of this character is the one adopted by our courts, and under the decision of Vice-Chancellor Pitney, in National Fire Insurance Co. v. Chambers, 53 N. J. Eq. (8 Dick.) 468, the contention certainly cannot be supported. In this case the debtor, Avho resided in New Jersey, held an insurance policy made by a Connecticut company on property in New Jersey. The company did business, also, in Pennsylvania, and a creditor of the insured, residing in Massachusetts, attached in Pennsylvania the moneys due on the policy by proceedings taken under the laAVS of Pennsjdvania against the insured as a nonresident debtor. Subsequent to the- attachment the debtor assigned the policy to another resident of New Jersey, who sued the company in a New Jersey court, after which the company paid the sum due into court, and the attaching creditor and the 'assignee interpleaded. Vice-Chancellor Pitney, after a most exhaustive and learned examination of the authorities, decided in favor of the validity of the attachment. He concluded that as the debtor himself could, under the laws of Pennsylvania, have sued the irisurance company in that state for the debt, the laws of Pennsylvania making debts due from such foreign corporations attachable in Pennsylvania were not contrary to fundamental principles of justice, but were valid. He held that the jurisdiction to fasten choses in action by attachment or garnishee process depended, not on a supposed situs of the debt, but upon the ability to serve process of garnishment upon the debtor of the absent defendant within the territorial jurisdiction of the court, and he also concluded that for the purpose of attaching or garnishing debts a foreign corporation lawfully doing business in more than one state might be served with process'under the laws of any of the states in which it did business, and that such garnishment would be effective against the debtor or those claiming under Mm. One question specially considered was whether the principles of situs governing the attachment or seizure of tangible property were applicable to debts due or choses in action, so as to make the residence of the creditor the situs of the debt and the only place for its seizure or garnishment, and he concluded that these rules were not applicable. His decision is in line with the almost unanimous opinion, both in this country and in England, and has since been cited with approval by the supreme court of the United States. Chicago, &c., Railway Co. v. Sturm, 174 U. S. 710 (1899). The decision, it must be observed, goes much farther than is necessary' to support the receiver’s title in the present ease, for in this case a judgment was regularly obtained in New York against the judgment debtor, after personal service of the summons in New York, where he was at the time of service carrying on business on the insured property, and daily attending there. The evidence in this case that he still retained his residence in Jersey City is not conclusive. The property insured was located in New York, and the contract of insurance first took effect there, for the policy contained the express provision “it shall not- be valid until countersigned by the duly-authorized agent of the company at Manuet, New York,” and it was so countersigned and then mailed to the insured at Jersey City. Under the decisions, this insurance contract was therefore a New York contract and governed by its laws, both as to validity, construction and discharge. Pennsylvania Lumbermen’s Mutual Fire Insurance Company v. Meyer, 197 U. S. 407.

The right of a receiver, appointed in supplementary proceedings in another state, to recover in this state debts due to the judgment debtor from a corporation of this state, which did business in such other state, where the debt was attached by proceedings in such foreign state, was also recognized in Elizabethtown Savings Institution v. Gerber, 35 N. J. Eq. (8 Stew.) 153, 156 (Court of Errors and Appeals, 1882), and Chief-Justice Beasley disapproved the view of Vice-Chancellor Van Fleet in the court below, 34 N. J. Eq. (7 Stew.) 130, that the proceeding to attach was invalid and void, because the situs of the entire personal property of the corporation was in New Jersey, and its disposition could not be subject to an order of a New York court requiring it to pay to the New York creditor from its money the debt the company owed to the judgment debtor. As, however (on the facts appearing in the bill), the order in that case directed the agent, and not the corporation, to pay the money, and the order for payment was made without notice to the corporation, it was held (at p. 158) to appear affirmatively on the record that the judgment was rendered without jurisdiction over the person or cause of action. Where tangible property belonging to a resident or corporation of this state is garnisheed in a foreign state by proceedings taken in that state, the title ,of the receiver,: based on these proceedings, can be asserted in New Jersey. Janes v. Falk, 49 N. J. Eq. (4 Dick.) 484; reversed on appeal, 50 N. J. Eq. (5 Dick.) 468, but affirmed on this point. But, on the assumption that the receiver’s title is valid, if our own decisions control the case, the contention is that, under the law as laid down in the New York decisions, such proceedings for garnishment in a foreign state are void against its residents, and therefore should be held void here. The New York decision referred to as sustaining this view is Douglass v. Phenix Insurance Co., 138 N. Y. 209, 219.- In this case, under an attachment issued in Massachusetts against a non-resiclent debtor, a debt was due from a corporation of New York, doing business in Massachusetts and suable there. The debtor in the attachment suit was a resident of New York, and the plaintiff'in the attachment suit was not a resident of New York. After the attachment the debtor in that suit sued the New York corporation in New York for the debt, and it was held that the attachment of the debt in Massachusetts was no defence. The decision was put mainly upon the ground that in contemplation of law the corporation debtor and the debt, as belonging to the New York creditor, were in contemplation of law, both in the State of New York, at the time of issuing the attachment, and not in the State of Massachusetts. The legal theory of situs was applied to a debt under the attachment laws. In the Chambers Case, supra, Vice-Chancellor Pitney discussed this decision exhaustively and repudiated its doctrine of applying the theory of situs to debts and other dioses in action under attachment and garnishment laws. His decision has never been questioned in this state, and the view that a debt is attachable wherever it can be sued on, and that the strict theory of situs is not applicable, has since been approved by the supreme court of the Hnitecl States, not only on principle, but on the authority of the best-considered cases. Chicago, &c., Railway Co. v. Sturm, 174 U. S. 710 (1899), and cases cited at p. 717. In this situation of the authorities there can be no question that the decision in the Douglass Case should not be followed in New Jersey, even if it were certainly applicable. But on examining the decision in the Douglass Case it will appear, I think, that the circumstance that the Massachusetts courts had no jurisdiction of the person of the debtor in attachment was relied on. In the present case the judgment was rendered after personal service of process, and the supplementary proceedings are merely continuations of that suit for the purpose of realizing the judgment. I have not been referred to any decision in New York which holds that garnishment or attachment proceedings taken in a foreign state to realize on a judgment obtained there upon a cause of action which arose in New York are void as without jurisdiction. The only other New York decision relied on which relates to the title of a receiver in supplementary proeeedings was O’Callaghan v. Fraser, 37 Hun 483 (1885), but in this case the question related to tangible property, actually located in another state at the time of the appointment of the receiver in New York, and manifestly, as to such property, the recognized theory and rules as to situs prevail.

. And if the New York decisions do in these cases in fact establish a rule different from our own, and a rule which, according to our view, is contrary to the principles of justice and sound legal theory, then the New York rule should not be followed by our courts merely because the protection of our rule is invoked by a citizen of a state which would not or might not give -a like protection to citizens of our own state in their courts. - Each state by its courts settles for itself, in cases like the present, the principles upon which it bases its comity toward those who claim rights arising in other states and settles them for itself upon what it considers fundamental principles of justice and right, not upon the basis of retaliation or compensation, as if the proceeding was in the nature of a purely political action. The application of these principles, therefore, cannot vary with the residence of the suitor invoking them, nor should the suitor from another state be held responsible or punishable in his individual person or property for the establishment of what we consider an erroneous rule by the courts of his own state. Our own laws and rules in cases of this kind, and not the laws of other states, should be administered, and they -should be applied evenly for the protection of suitors from any state, without distinction.

Third. It is claimed that tire appointment of the receiver was void under the statutes and decisions of New York for two reasons: (1) Because the order for examination or discovery- directed -the appearance of Temple for examination, and did not direct the appearance of the company itself. (2) Because Temple was not an officer of the company, such as was indicated by the statutes, for service of the third-party order, and service upon him of the order was ineffective.

■ The statutes of New York concerning the appointment of a receiver in supplementary proceedings, the vesting of his title and the time to- which it relates, so far as' material to- the facts in this case, are as follows: [Here follows a statement of the statutes of New York relating to supplementary proceedings and of these proceedings in detail (see 61 Atl. Rep. 29-31), and the opinion proceeds.]

Upon the entire record in the supplementary proceedings I think it appears that the questions now raised against the validity of the order, viz., whether the order directing Temple to appear for examination was an order for the examination of the company, and whether an agent such as Temple was sworn to be was an officer of the company within the meaning of this statute, were both questions which the court or judge making the order had jurisdiction to decide upon the facts presented, and further, that both of these questions were decided affirmatively, as well by an order of March 3d, 1903, directing payment of the debt to the sheriff, as by the order appointing the receiver.

If the objections reach only to the regularity of the procedure, under the New York law, they certainly cannot prevail on this collateral attack. And if the New York court has jurisdiction over the rent, i. e., the debt recoverable in that state by the'judgment debtor, and notice of the proceedings was actually given to some agent of the company in the state, who was, upon general principles, a proper agent for that purpose, the decision of the New York court, as a court of general jurisdiction, upon the question that the agent 'actually served was the officer designated within the New York statutes, cannot be subject to collateral attack elsewhere, even if the character of the agent or officer to be served be considered a jurisdictional fact. In Fairchild v. Fairchild, 53 N. J. Eq. (8 Dick.) 678 (Court of Errors and Appeals, 1895), and Magowan v. Magowan, 57 N. J. Eq. (12 Dick.) 322 (Court of Errors and Appeals, 1898), this rule as to the finality of the decision of the courts of a state upon the jurisdictional facts necessary to make a decree was applied to decrees of divorce, settling marital status. As to .proceedings strictly in rent, such as seizure for breach of municipal regulation, “the mode of procedure is regulated solely by the sovereign power of the state, and no foreign court can question its correctness, unless the court passing sentence loses jurisdiction by some circumstance which, the law of nations can notice.” Chief-Justice Marshall, in Hudson v. Guestier, 4 Cranch 293 (1808). And this does not extend to an inquiry whether, after acquiring jurisdiction, judgment is rendered according to the proper forms of procedure of the foreign state. 2 Black Judg. §§ 818, 810, citing, inter alia, Bradstreet v. Neptune Insurance Co., 3 Sumn. 600 (Justice Story, 1839). In cases analogous to proceedings in rem,, such as the present case, jurisdiction, so far as the third party or garnishee is concerned, is obtained by notice to the third party of the attachment or garnishment, and if the notice actually given was a sufficient and reasonable notice for the purpose of the judicial proceedings in question, and ivas in fact directed in the proceedings to be given as the notice required by the forms of procedure, then, manifestly, the decision of the foreign court, that the notice was according to its forms of procedure, should not be reviewed in another court. It is quite clear, I think, that an agent of the compány, such as Temple on the records was shown to be, was one upon whom notice could reasonably be served, as sufficiently representative of the company in this matter, to give the court jurisdiction over the company in the proceedings by a notice to him, and, if so, the final order or judgment made thereon is valid everywhere, as made upon due process of law. Connecticut Mutual Life Insurance Co. v. Spratley, 172 U. S. 602, 610. As to judgments or decrees in personam, their operation and effect in foreign jurisdictions depend upon the further question whether the foreign corporation was doing business within the state. Ib. 610

It must therefore be held that the decision of the Yew York court upon the objections now made to the validity, under the Yew York laws, of the order appointing the receiver, is the law of this ease, as between the parties to the supplementary proceedings and those claiming under them, until reversed by direct proceedings. I conclude that the title of the receiver, under the order of appointment, is valid, and must relate back, under the Yew York code, to the time of the service of the third-party order. This time must be fixed as the date of the actual appearance for examination, February 11th, 1903, inasmuch as the actual date of service does not appear on the record, but is admitted to have been made before the appearance. The assignee's title is therefore subject to that of the receiver.

The title of the receiver, however, is oniy for the purpose of paying the judgment he represents, and the decree directing payment to him of the fund in court should not go beyond this amount, and such. costs as he is entitled to, which will be settled upon hearing parties on this point, if they desire.


source: Caselaw Access Project

author: Emery, Y. 0.

license: Public Domain

text:
    Gertrude N. Boice et al. v. Cornelius N. Conover et al.
    [Filed June 13th, 1905.]
    1. The assignee of a judgment is chargeable with the knowledge of his attorney, concerning litigation affecting the judgment, where his attorney negotiated the assignment. ■
    2. A chattel mortgage was held invalid against a judgment creditor under the Registry acts, and the proceeds of sale of the chattels, which proceeds were in court, were directed to be paid first to the judgment creditor- The judgment debtor then paid the judgment by his mortgage on his own lands, and had the judgment assigned for his benefit to the mortgagee of the lands, who (through their common attorney) received, for the benefit of the debtor, the money paid out of court to him as assignee of the judgment. On an. appeal subsequently taken the chattel mortgagee was held to be subrogated to the judgment.—Held, (1) this payment of the judgment by the debtor himself discharged the lien of the judgment from the lands of the parties to this suit (other than the judgment debtor), who claimed title under a partition made pendente lite, but before decree for subrogation to the judgment, subsequently made in favor of the chattel mortgagee.—Held, (2) the chattel mortgagee, by reason of this payment of the judgment by the debtor, was entitled to the proceeds of sale of the mortgaged chattels paid out of court to the assignee of the judgment for the benefit of the debtor, and as this payment was not disclosed to the court at the hearing upon which decree1 for subrogation was made, the judgment creditor, the assignee and the judgment debtor are estopped from denying the existence of the judgment for the purpose of giving the mortgagee the benefit of the subrogation as against lands owned by the debtor at the time of the decree, and for compensating the mortgagee by reason of the discharge of the judgment from the lands of other parties to the suit, originally liable to the judgment.
    3. Even as against purchasers pendente lite, claiming under the parties to a suit, knowledge of the suit is notice only when the suit is prosecuted with reasonable diligence.
    4. A judgment creditor of one co-tenant is not bound by a voluntary partition after the recovery of his judgment, though it be fairly made, and may- decline to be bound by the partition, and may sell the undivided interest in the entire land as if no partition had been made; but the purchaser may be brought into equity for a partition of the entire land owned in common before the voluntary partition, and may, by equities raised against him, or the tenant under whom he claims, be required to receive on the partition the lands received by the judgment debtor on the voluntary partition.
    Heard on bill, cross-bill, answer, proofs and decree, and supplemental bill after decree, answers, cross-bill, replications and proofs.
    This case involves the application of the doctrines of subrogation and of lis pendens to a somewhat complicated state of facts. The facts are, in the main, undisputed, and so far as material for present purposes, I find them to be as follows:
    On September 8th, 1893, the firm of Conover & Allen (composed of Cornelius H. Conover and William Allen) executed a chattel mortgage on personal property of the firm to the defendant Edwin Allen for $4,800. Subsequently and on October 21st, 1893, they executed a mortgage on the same property to the complainants, Gertrude H. Boice and her husband, for $1,500. On December 12th, 1893, the defendants the Mapes Formula and Peruvian Guano Company recovered a -judgment against the firm for $1,110.11, upon which execution was issued and a levy made on the tangible personal property covered by the chattel mortgages, and also upon six tracts of land in Middlesex county, in which Cornelius H. Conover, one of the partners, then owned an undivided one-half interest, subject to his mother’s right of dower. On December 28th, 1893, the complainants, the holders of the chattel mortgage second in date, filed a bill attacking the validity of the first mortgage and claiming priority over this mortgage as to portion of the amount secured by it. To this bill the second mortgagee and the judgment creditor were made defendants, and a receiver of the property covered by the chattel mortgage was appointed, who sold the property, retaining the funds subject to the order of the court. Edwin Allen answered the bill, claiming priority over complainants’ mortgage, and also over the Mapes company judgment on the mortgaged chattels, and, after the payment of the proceeds of-sale into court, filed a cross-bill against complainant and the Mapes company, claiming a valid prior lien on the funds against both these parties, and also claiming that for the payment óf the Mapes company judgment resort should first be had to the real estate levied on, and that the securities should be so marshaled. The Mapes company answered the cross-bill, claiming, among other things, that the affidavit annexed to the Edwin Allen mortgage did not state the true consideration of the mortgage, and was therefore void -as against it, and insisted that the proceeds of the sale of the chattels should be first applied to the judgment, and denied the right to marshal the assets. The complainant Gertrude Boice (her husband having died) also, in her answer to the cross-bill, set up the invalidity- of the defendant’s mortgage, because it was made to secure the individual indebtedness of one partner, and was therefore fraudulent against a creditor of the firm such as she claimed to be. On the hearing before me on the original bill and cross-bill, I held that the objection to the affidavit was well taken, and that the mortgage of Edwin Allen was, under the Recording act, void against the Mapes company as judgment creditor, but was not void against complainant’s mortgage, inasmuch as she was, under her mortgage, not a creditor, but a purchaser, and succeeded only to the mortgagor’s rights, which were subject to the mortgage previously given. The proceeds of sale in the hands of the receiver were therefore directed to be marshaled so as to pay first the execution creditor to the extent ox the amount due on Edwin Allen’s mortgage. As to marshaling in Edwin Allen’s favor the securities held by the Mapes company, so as to require the real estate of Cornelius IT. Conover to be first exhausted, I held that this could not be directed for two reasons ■—firstj because there could be no marshaling unless all the securities to be marshaled were valid against the creditor whose security was marshaled, and under the statute the chattel mortgage was “absolutely void” as to the judgment' creditor, and could not be thus made indirectly valid, and secondbecause the principle of marshaling was not applicable, as the Mapes company, by its judgment and levy, had the right to resort to both the joint and several property, while Edwin Allen had a lien only on the joint property, and nothing appeared in the cause showing that, as between the partners themselves, Cornelius IT. Conover, one of the partners, or his property, was equitably liable to pay the firm’s debt in discharge of the firm’s assets. Edwin Allen’s cross-bill was based throughout on allegations both of fact and law that his mortgage was a valid security against the judgment creditor, and in the bill there was no allegation or prayer setting up or claiming any alternative right to relief of any kind, by way of subrogation or otherwise, on the basis that if his security was held invalid against the judgment creditor, yet being valid against the judgment debtor, he was entitled to be subrogated to the judgment, -if the mortgaged property was taken from him under the statute. This claim was not presented at the hearing of the cause, nor considered in my opinion (35 Atl. Rep. J/.02-), as seems to have been supposed by the learned justice delivering the opinion on appeal. 68 N. J. Eq. (IS Dick.) 275. At the settlement of the decree, however, and upon the basis of a decree that the, chattel mortgage was void as against the judgment creditor, and that thq judgment creditor was entitled to be first paid from the proceeds of sale of the mortgaged chattels, application was made in the cause for the first time to add to the decree a clause of subrogating Edwin Allen to the judgment creditor’s lien. This was denied for reasons then given orally, but which, as I now recall them, were that to allow subrogation against the judgment creditor would be substantially marshaling the securities, and that, under the statute making the mortgage absolutely void, it could not, as against the creditor, be considered valid for the purpose of charg- • ing him with an equity or notice of an equity of any kind. The reason against subrogation attributed to me in the opinion on appeal, 63 N. J. Eq. (IS Dick.) 276, was one of the reasons given in my opinion against a marshaling of securities, and not on the question of subrogation. The final decree in the cause, made on January 20th, 1897, directed that the receiver, out of the funds in his hands ($1,342.32, less receiver’s costs), first pay to the.Mapes company the amount due on its judgment ($1,076.61, with interest from December 12th, 1893). An appeal from this decree was 'taken on January 18th, 1900, two days before the expiration of the three years allowed for appeal. On the appeal it was held, Boice v. Conover, 63 N. J. Eq. (18 Dick.) 273 (1901), that the chattel mortgage was void against the judgment creditor,' under the statute, and the securities could not be marshaled so as to interfere with the creditor’s right to resort to the personal estate. It was held, however, that the defendant Edwin Allen was entitled to be subrogated to the lien of the judgment on the payment thereof oxxt of the proceeds of sale. And a decree was directed to be entered in this court, modifying its former decree, and “subrogating the said Edwin Allen to the extent of $937.09, with interest from January 20th, 1897 (the date of the final decree), to the lien of the said judgment of the Mapes, &c., company upon lands of said Cornelius Conover, as said lien existed immediately before the pa3rment of said sum to said judghxent creditor under said decree,” and the proceedings were remitted to this.court, to be therein proceeded on according to law and the practice of this court. Upon the remittitur coming down a motion was made upon notice for the entry of a decree in this court in accordance with the remittitur, and also for a direction to the sheriff to proceed to sell the lands lexded on under the execution, to raise and pay to Edwin Allen' the sum for which he was subrogated. On this motion, the defendant Cornelius F. Conover presented a petition resisting the application upon facts showing, as he claimed, that Edwin Allen was not entitled to enforce the decree for subrogation, and also showing that the judgment had been assigned to one Clarence L. Spe3rers pending the suit and before decree, and'that pending the. suit the lands, one-half interest in which had been levied on, had been divided between the tenants in common, and that after this division the lands set off, or portions thereof, had been conveyed or mortgaged to several persons named. The petition prayed that Edwin Allen by his delay might be decreed to have waived the benefit of his appeal, and that the lands alienated by the judgment debtor might be protected to the grantees. A petition was also filed by Edwin Allen setting up the assignment of the judgment pendente lite, and before the final decree in chancery by the Mapes company, to the defendant Speyers, who was charged to have had actual knowledge of the suit, and asking leave to make him a party defendant in the cause in order to enforce the decree against him. The motion for decree and for sale under the execution and also the two petitions came on to be heard together, and on August 7th, 1901, a decree was entered on the remittitur following the language of the decree on appeal and “subrogating the said Edwin Allen to the extent of $937.09, with interest from January 20th, 1897, to the lien of the said judgment of the Mapes, &c., company, upon lands of Cornelius Conover, as said lien existed immediately before the payment of said sum to said judgment creditor under said decree.”
    On the two petitions of Edwin Allen and Cornelius 1ST. Con-over an order was made reciting that it was necessary that a bill should be filed by the defendant Edwin Allen in order that he might, so far as he was entitled to the same, have the benefit of the proceedings in the cause against Speyers, the assignee of the judgment, and against the persons who had acquired interests in the real estate levied on, and in order to revive and continue the cause against these persons, and to carry into effect the decree of the court of errors and appeals subrogating Edwin Allen to the lien of said judgment, and directing that he have leave to file an original bill in the nature of a supplemental bill. The supplemental bill now brought on for hearing was thereupon filed, making defendants all the defendants' in the original bill, and also Speyers, as the assignee of the judgment, together with the defendants who had acquired any interests in the lands levied on subsequent to the judgment and levy. The entire lands were levied on, but at the time of the judgment and levy Cornelius "Conover’s interest was an undivided one-half interest in the six tracts of land which were then owned by him and his brother, David A. Conover, subject to the right of dower of their mother, Gertrude N. Boice, the complainant in the original bill. After the filing of the original bill (on December 28th, 1893) and pending the suit, a voluntary petition and settlement of the dower right was made between the tenants in common and the dowress, on December 13th, 1895, by mutual deeds, whereby lots Nos. 1, 3, 4 and 5 were conveyed to David A. Conover; lot 2 was conveyed to Gertrude N. Boice, the dowress, and lot 6 was conveyed to Cornelius N. Conover, by deed of release, reciting that it was made on a voluntary partition between the widow and heirs-at-law, carried out by this and other deeds of the same date. The title to lot 6 is still in the judgment debtor. On April 28th, 1896, and while the judgment was still outstanding and wholly unpaid, David A. Conover conveyed to the defendant George W. Metlar lots Nos. 4 and 5 (two of the lots conveyed to him in the partition), by deed of full covenants and warranty, and for further protection against the judgment David A. Conover executed a bond and mortgage on lots 1 and 3 (the other two lots conveyed to him) in the sum of $1,500, conditioned^to indemnify Metlar against loss by reason of the judgment and to remove it from the lands within three years. Edward Allen, in the supplemental bill, claims subrogation to the benefit of this bond and mortgage, so far as necessary to pay his decree. The defendant Metlar still holds this mortgage, and the title to lots 4 and 5. On September 14th, 1896, also before the decree in chancery, David A. Conover conveyed 'to one Whitty the lot No. 1, and Whitty, subsequent to the decree, and on July 16th, 1898, conveyed the lot to the defendant Henrietta M. Parker, who now owns this lot. In July, 1896, after the partition and before decree in the original suit, the defendant Cornelius N. Conover, for the purpose of paying the judgment of the Mapes company, borrowed of the defendant Speyers the sum of $1,400, to secure which Conover gave a mortgage on the lot No. 6 conveyed to him on the partition, and Conover, having received this money, paid to the Mapes company the amount due on the judgment, which. wras assigned by the Mapes company to Speyers by assignment dated July 7th, 1896. The attorneys who acted for Speyers in making the loan were also the attorneys of Cornelius Y. Conover in the suit, and paid the amount due on the judgment and received the assignment. The assignment was not recorded, nor was any application made by Speyers to be made a party to the suit, nor does the assignment appear to have become known to Edwin Allen or his solicitors until -after the decision on appeal. The purchase-money on the assignment was paid to the attorney of the Mapes company, who received it as on a purchase by Speyers and paid the same to his clients. This attorney, Mr. Runyon, was also the receiver in the cause, and held the proceeds of sale of the chattels. The final decree, made on January 20 th, 1897, directed that, in the first place, the Mapes company was entitled to be paid out of the balance in the receiver’s hands (after deducting his fees and costs) the sum of $1,076.61, with interest, &e., in satisfaction of its judgment and costs of suit, and directed the receiver to make this payment. On Eebruary 1st, 1897, the receiver paid to Messrs. Yoorhees & Booraem, acting, as he supposed, as the attorneys of Speyers, the assignee of the judgment, the sum of $1,279.20, and on Eebruary 27th, 1897, the further sum of sixty-four cents. After these payments, which exhausted the funds in his hands applicable thereto, there seems to have been still a balance of $60.50 due, or claimed to be due, on the judgment. These payments were made by the receiver on the directions given in the final decree itself and without any special application to the court for directions for payment while the right to an appeal still ran. The payment, however, was not made until after the time limited by the rule-150 for the stay of process on the decree pending ten days’ time for appeal. It appears'by the evidence in the cause, and by Speyers’ answer to the supplemental bill, that the money directed to be paid by the decree as due on the judgment was received by Messrs. Yoorhees & Booraem, who were, as I conclude, the attorneys in this transaction both of Mr. Speyers and Mr. Cornelius Y. Conover, and that while the receiver paid the money to them as representing Speyers, they received it under an agreement between Speyers and Conover, made at the time of the loan by Speyers, by which the money, if directed to be paid on the judgment by the decree, was to be paid to Conover; that they retained it as his money until, under his direction, they paid the money to his mother, the complainant, for debts -due her. Speyers’ agreement on taking the mortgage for $1,400 was that the money was advanced for the purpose-of paying the judgment, and leaving his mortgage the first lien on the property. Upon the receipt of the money from the receiver, Speyers, acknowledging that the judgment had been satisfied as against Conover, executed under seal a warrant for satisfaction of the judgment, fully acknowledged for record, and dated February 26th, 1897. This warrant was left in the hands of Messrs. Yoorhees & Booraem, the solicitors who acted for both Speyers and the judgment debtor, and under the evidence and the answer of Spej^ers I conclude that it is held for the benefit of Cornelius N. Conover, and that the judgment against the other partner was intended to be kept alive for the benefit of Conover by the assignment. After receiving the money from the receiver, Mr. Speyers, as appears by his answer and the evidence, considered the judgment as paid, so far as Cornelius N. Conover was concerned, and after receiving this money Speyers’ attorneys represented to subsequent purchasers of the land that the judgment was paid as to Cornelius N. Con-over, except as to this balance. The purpose of keeping the judgment alive on the record is stated in Speyers’ answer to have been the protection of the right of Speyers and Cornelius N. Conover to recover a pro raía share thereof against William Allen, the co-defendant in the judgment, and that the judgment was, as he supposed, satisfied as against Cornelius N. Conover, and if of any value was only against William Allen. The transfers of the lands allotted to David A. ConoArer in the partition, which were made after payment of the judgment by the receiver, were as follows: On September 8th, 1897, eight months subsequent, and no appeal having yet been taken, David A. Conover conveyed to the defendant MacLaughlin lot No. 2, the remaining lot conveyed to him on the partition, and at the time of this conveyance to MacLaughlin the mortgage given by David A. Conover to Metlar, on lots 1 and 2; was still unsatisfied, and the judgment was still unsatisfied of record. Upon application on behalf of this purchaser to Messrs. Voorhees & Booraem for information as to the judgment, the satisfaction piece and the assignment were shown and the statement made that the judgment was paid, except the small balance of $60, and that it was kept alive for the purpose of obtaining this balance due on the decree in the chancery suit. This balance, as appears by Speyers’ answer and the evidence, was to be collected from Edwin Allen for the benefit of Cornelius Conover.
    On July 16th, 1898, Mr. Whitty, who had received from David A. Conover, on September 14th, 1896 (and pending the suit), a deed from David A. Conover for lot Wo. 1, conveyed to him in the partition, conveyed this lot to the defendant Henrietta M. Parker, and substantially the same statement in reference to the judgment and its satisfaction was made by the same person to the person- inquiring on her behalf. So that both the purchasers from David A. Conover/ who took deeds for any portion of the property after the execution of the satisfaction piece by Speyers, relied on the execution of this warrant and the statement of tije attorneys, in whose hands it had been left by Speyers, and the judgment debtor. The changes in title after the partition to the lot conveyed to Mrs. Boice, the dowress, on the partition of December, 1895, were as follows: On April 7th, 1898, Gertrude W. Boice and her husband executed a bond and mortgage on this lot to one John S. Wevins for $2,100, which mortgage is now held by tire defendant Polhemus as guardian of an infant entitled to a share of the Wevins estate. The supplemental bill prays to have the benefit of this mortgage for the satisfaction of the decree of subrogation. The guardian'has not answered, and decree pro confesso has been taken. On January 25th, 1900, Mrs! Boice died intestate, leaving as heirs-at-law her sons, David A. Conover and Cornelius W. Conover, who, with their wives, on August 23d, 1900, conveyed the lot to the defendant Prucella, who now holds the title. He executed a purchase-money mortgage to his grantors for $1,900, which was subsequently, and after the decision on appeal, assigned to James M. Boice, the husband of Gertrude W. Boice, and one of the complainants in the original suit. The benefit of this mortgage, also, is claimed by the supplemental bill, and decree pro confesso has been taken against James Boice. On July 30th, 1901, and after the decision on appeal, Speyers recovered judgment on his bond for $1,404.50 in the supreme court, and on August 3d, 1901, the administrator of Mrs. Boice recovered a judgment against Cornelius N. Conover for $1,-081.66 on his individual debt, which was levied on the lands then owned by Conover, and it is claimed that these lands should be first applied to the payment of his individual débts, in preference to the debts due from the firm.
    The further right is claimed by the bill to follow the moneys received by Speyers from the receiver in satisfaction of the judgment, and which were finally, by the direction of the judgment debtor, paid over to Mrs. Boice. Defendant.Nevins is made party as her administrator, and although her estate has been settled after a decree barring creditors, it is alleged that a surplus remains in the administrator’s hands, and the benefit of this surplus is claimed for payment of the decree. The administrator answers, alleging that the money received by Speyers’ consent and Cornelius N. Conover’s direction was, after deducting the debt due to her attorneys, paid to her on account of debts Cornelius Conover owed to her, and the right to follow the money is denied. The Mapes company filed a cross-bill against Speyers for indemnification if they be held liable on the supplemental bill.

      Mr. Alan U. Strong, for Edwin Allen, the complainant in cross-bill and supplemental bill.

      Mr. Freeman Woodbridge, Mr. Willard P. Voorhees, Mr. John S. Voorhees and Mr. Charles C. Ikmyon, for the defendants in supplemental bill.

      Mr. Theodore B. Booraem, for Clarence L. Speyers, George D. Nevins, administrator of Gertrude N. Boice, and Cornelius N. Conover.
   Emery, Y. 0.

(after statement).

The decree on appeal directing the subrogation of Edwin Alíen to the lien of the judgment settled the right to subrogation as against the parties to the suit, and all persons bound by the decree, but does not itself execute or work out the subrogation, and on the remittitur the cause is now before this court for that purpose. At the timie of filing the original bill, the Mapes company, as judgment creditor, and Cornelius hT. Conover, as judgment debtor, and owner of the lands, subject to the judgment and levy, were the only persons directly interested either in the judgment, or in the mortgaged chattels or land, and if this situation had continued pending the suit and until the remittitur, the subrogation would have been worked out by a decree -(on supplemental bill, if necessary) that upon payment of the judgment by the receiver, the judgment creditor assign the judgment to Edwin Allen for the collection thereby of the amount found due to him by the decree. If the security to which subrogation was to be made were a decree of this court made in the suit, or an equitable lien, like a mortgage, before the court for foreclosure or redemption, then the subrogation might be effected directly by a decree of this court directing the sale of the lands to pay the party entitled to be subrogated. But the judgment is a purely legal lien on lands which wTere not and could not be subject to the direct order or decree of this court in the suit, and the only control over the lands subject to the judgment is by directions as to the legal ownership or control of the judgment. The right to subrogation is not the same as the right to an assignment, but an actual .assignment may be necessary in order to effect subrogation. 3 Pom. Eq. Jur. (3d ed.) 1214 In Hill v. White, 1 N. J. Eq. (Sax.) 435, an assignment of a mortgage was directed for this purpose, while in Bigelow v. Cassedy, 28 N. J. Eq. (11 C. E. Gr.) 557 (Court of Errors and Appeals, 1875), it was held that no assignment was necessary, the lands to be sold being under foreclosure in the suit. In the present case the principle of subrogation has been extended to a new class of cases, viz., cases arising under the Recording acts, where the grantee or mortgagee has failed to comply with these acts, and his property has been subsequently taken by a judgment creditor to pay the debts which the grantor or mortgagor, having conveyed with warranty, was, as between him and his grantee, liable to pay. This principle was applied in a case where the property of the mortgagee was taken by a decree of the court, and the right to subrogation arose by reason of this taking, and all the parties interested (mortgagee, judgment creditor and mortgagor) were before the court in relation to the proceeds of the mortgaged property, and were at the time of the decree apparently the only persons interested. I think the subrogation must be carried out in a case of this kind by considering the mortgagee as equitably entitled, by reason of the decree, to an actual assignment of the judgment, and that the cause on the supplemental bill must be disposed of on his equity to an assignment under tire decree, modified or controlled, so far as the facts -shown by any of the defendants entitle them to any modification of such right to an absolute assignment, either against Edwin Allen or between themselves. Subrogation, being an equitable right or remedy, is applied only with due regard to the legal and equitable rights of others. Gaskill v. Wales, 36 N. J. Eq. (9 Stew.) 527, 533 (Court of Errors and Appeals, 1883). And all persons interested either in the judgment or lands covered by it at the time the subrogation is worked out are entitled to be heard as to their equities, either against the claimant of the right or against their co-defendants subject to the burden. As to the defendant Speyers, as assignee of the judgment and holder of a subsequent mortgage and judgment against Cornelius N. Conover on part of the lands, and as to the defendant Cornelius N. Conover, as the present owner of a portion of the lands levied on under the judgment, there is little difficulty. The assignment to Speyers was received with actual notice of the pendency of the suit, and that one of the objects of the suit, was the marshaling of the securities. Speyers is chargeable in this respect with the knowledge of his attorneys, who were also Cornelius N. Conover’s solicitors in the suit, and his answer shows that the assignment to him was held for the purpose of giving Cornelius N. Conover the benefit of the payment of the judgment from the mortgaged property. If the assignment of the judgment to Speyers could on the facts be considered as a purchase of the judgment as a valid security against Conover, then Speyers5 tenure of it and receipt of the money thereon under the decree was subject to any decree on appeal as to his right to receive the money in the hands of the receiver for the payment of the judgment and the conditions of its receipt. But from the answer- of Speyers and the evidence in the ease, it is clear that the transaction of the assignment, so far as Speyers and the judgment debtor are concerned, -was not intended as a purchase of the judgment by Speyers as an outstanding security against Cornelius F. Conover, but was a payment of the judgment by his own money, raised by a mortgage on his lands, to Speyers, which was to be reimbursed to .the • debtor by means of the assignment, which, kept the judgment alive 'for that purpose. Mr. Booraem, who acted for Conover, says Conover paid the judgment with his own money, which he borrowed from Speyers; ' that the judgment was assigned so that they could get out of it all they could for Conover and Mrs. Boice, and that so far as Speyers5 mortgage was concerned, their only interest for him was to see that his interests were properly protected by the custody of the assignment of the judgment, and that the money received from-the receiver was not to go to Speyers, but to Conover, as it belonged to him. This transaction is substantially a payment of the judgment debtor himself, and such payment, by the settled law of this state, discharges the judgment as against the judgment debtor and those who held interests in his' lands subject to the judgment, and the judgment as to them cannot be kept alive by assignment. Traphagen v. Lyons, 38 N. J. Eq. (11 Stew.) 613, 616 (Court of Errors and Appeals, 1884), cites the cases from Bolles v. Wade, 4 N. J. Eq. (3 Gr.) 459 (Chancellor Haines, 1844). And the assignee of the judgment, even if a bona fide purchaser, takes subject to this defence of payment by the judgment debtor in favor of persons interested in the lands. Traphagen v. Lyons, supra, p. 618. A fortiori it must be subject to this defence if assigned and held for the benefit of the judgment debtor. The fact that the Mkpes company did not know the money paid on the assignment was the debtor’s money, and that it made the assignment as on a purchase by Speyers with his money, cannot prevent the effect of the payment of the judgment by the debtor’s money, for neither 'the judgment creditor nor debtor can revive or keep the judgment in force against those who have acquired rights in the lands intermediate the judgment and the assignment. Traphagen v. Lyons, supra, p. 617. This pa3'ment also discharged the judgment so far as it was a lien oar the proceeds of sale in the hands of tire receiver, aird had the agreement for such payment been disclosed before the decree, or to the court on appeal, Edwiir Allen, as mortgagee, would have been entitled to the fund in court, which was subsequently directed to be paid oir the judgment. The decree directed that the money paid to the Mapes, &c., company should be paid in satisfaction of the judgnreirt, and by keeping the judgment apparently alive by the assignment, Speyers, as assignee of the Mapes company, received the money as on a judgment still due from Conover as well as Allen, and in satisfaction of that judgment so far as the money extended. Having thus received the proceeds of sale under the decree unconditionally, and for the purpose of satisfying or paying-tire judgment as an outstanding valid lien, the judgment, as between ’ Speyers and Conover, is to be considered as still alive and its lien restored for the purpose of payment. Spe3rers is estopped from denying that it was so received, and in any aspect of the case, whether considered as a purchaser of an outstanding judgment or as receiving the proceeds of sale representing to be valid a judgment already paid by the judgment debtor, he must now perform the conditions imposed by the court of appeals, under penalty of compensating the defendant Edwin Allen, for whose benefit the conditions were imposed, if they cannot be complied with. The judgment being still uncanceled of record, it may, so far as Speyers and Cornelius N. Conover are concerned, be, in Edwin Allen’s favor, declared as outstanding, and a lien on the lands still owned by Conover prior to the mortgage of Speyers, and the warrant and satisfaction piece, so far as they are concerned, will be declared void and the use of it enjoined. As to the judgment against Cornelius N. Conover obtained by George D. Nevins, administrator of Mrs. Boice, subsequent to the decision on appeal, the judgment of the Mapes company must also be considered a valid prior lien on the lands owned by Conover. Not only was the administrator an actual party to the suit on appeal after Mrs. Boice’s death, but Mrs. Boice received from Cornelius N. Conover, the judgment debtor, the proceeds of sale, which wore paid over by the receiver as on a valid outstanding judgment. The attorneys for Speyers and Cornelius N. Conover were also her attorneys in this transaction, and she is chargeable with notice of the source of the money paid to her and of tire circumstances of its receipt by Cornelius N. Conover. Por this reason, therefore, and also because they were actual parties to the suit, the subsequent judgment cannot be set up to defeat the right of subrogation given by the decree on appeal.

As to David A. Conover, the other tenant in common, and the defendants holding title under him to the lands partitioned by the voluntary deeds in December, 1895, the judgment, however, must be considered as paid by the judgment debtor at the time of the assignment, and their lands, under the rule in Traphagen v. Lyons, supra, were ipso facto relieved by the payment. This is the undoubted right of these claimants under David A. Conover, so far as relates to Speyers and Cornelius N. Gonover. Neither of these persons could .¡enforce the judgment against them, for two reasons—first, because the judgment was paid by the judgment debtor and the assignment in Speyers’ name was held for Conover’s benefit; second, because both of them accepted the partition and claim lands under it. Neither of them, therefore, could repudiate the partition. As to these owners, therefore, the question is whether Edwin Allen, as subrogated in equity to the judgment, and notwithstanding its payment by the assignment, is entitled to enforce it as still an existing lien on the lands convej'ed to David A. Conover in the partition in the lands or the subsequent purchasers from him. Two of these purchasers—Mrs. MacLaughlin and Mrs. Parker—bought their lands expressly relying on the satisfaction piece, and on the statement that the judgment was paid so far as Cornelius N. Conover and his lands were concerned. These two were purchasers after Metlar, and as between Metlar and them their lands were first -liable. Edwin Allen claims that as to all of these purchasers he is entitled to enforce the judgment as still an outstanding lien, because all of their titles were taken pendente lile, and with notice of his ultimate equity in the judgment as affecting the lands, as it might be established by the decree in the suit. No Us pendens was filed and in the-cross-bill actual notice of the suit was alleged. As to none of these defendants claiming under David A. Conover has actual notice of the suit been proved, and as to the defendant Metlar it has been disproved. In my judgment the suit and the cross-bill, even if brought to the actual notice of every purchaser under David A. Conover, did not affect the legal and equitable right of these purchasers to the benefit of the subsequent payment of the judgment by the judgment debtor. The release of their lands followed ipso facto upon the payment, both in law and in equity, and must be sustained, unless they are by acts of their own equitably estopped or prevented from setting up the payment against the equitable assignee of the judgment. Edwin Allen’s suit on his cross-bill, and the mere fact of purchase pendente lite, should not in equity estop or prevent them from having the benefit of the debtor’s discharge of the -judgment— first, because the suit, so far as the judgment was concerned, did not affect or question in any way the right of the judgment debtor to pay the judgment pending suit in relief both of the purchasers pendente lile and Edwin Allen, and the decree finally made in the suit is, if the judgment was in fact discharged by the debtor’s payment of it, now valid and enforceable purely on the ground of the estoppel, which prevents the actual parties to the suit, and those who procured the funds from the receiver to apply them to an existing judgment, from asserting otherwise. This estoppel is purely personal to the parties to the suit and those who procured the funds to give them to the judgment debtor. The subrogation declared by the decree entitled him to the benefit of the lien of the judgment as it existed immediately before the payment to the judgment creditor by the receiver under the decree, and does not operate on the right of the defendants, other than the parties to the suit, to show that at that time the judgment was not a lien on their lands, because it had been paid by the judgment debtor.

Second. The delay in the prosecution of the appeal until three years after the original decree in chancery was fatal to the effect of the suit as notice. Even as against purchasers pendente lite claiming under the parties to the suit a lis pendens is notice only when the suit is prosecuted in good faith, with all reasonable diligence and without unnecessary delay. 2 Pom. Eq. Jur. (3d ed.) § 634. And while a judgment or decree in a lower court against the right claimed does not necessarily and at once terminate the lis pendens, and the notice continues during a reasonable time for an appeal to be taken, yet in order to retain the benefit of lis pendens an appeal must be taken and prosecuted without delay and with such diligence as is required by the circumstances of the case. 2 Pom. Eq. Jur. (3d ed.) § 634, and cases cited in notes, pp. 1071, 1072. Circumstances may render the full limit of the time for appeal an unreasonable delay, and a delay for a less time may be such indication of a waiver or abandonment of appeal as to justify third persons in considering the suit at an end. Such circumstances existed here. The jurisdiction of the court was originally invoked by the complainant and cross-complainant for the realization of a chattel mortgage security and the disposition of its proceeds. The property was taken possession of by a receiver, sold, and the proceeds of sale were in his hands, as an officer of the eouxd, for distribution to the parties entitled. A final decree for distribution was made, denying the right to resort to the lands for the judgment, and was carried out. There was no application for a stay pending appeal nor any notice of appeal. Unless it can be said that it is the duty of the receiver, and therefore his right, to retain the funds for three years to await an appeal, the case was one where any defendant intending to appeal should have done so promptly, if he wished the notice by Us pendens to continue for his protection; otherwise he should be content to pursue his remedies against the parties to the suit and their responsibility for restitution or compensation if the decree on appeal cannot be carried out. Had a lis pendens against the lands been filed with the cross-bill, the appeal must have been taken within three months from the decree, and without holding that, so far as purchasers of lands are concerned, this statutory limit might be regarded as prima facie a reasonable period, I think that the policy of this statute, which prevents the long continuance of clouds on the title to lands by claims against them which have been denied, should be so far followed in this case as to hold that the delay in prosecuting the appeal not being satisfactorily explained, the benefit of the suit as notice has been lost. That any of these purchasers under David A. Conover had notice in fact and outside of the constructive notice by suit; that Edwin Allen claimed subrogation, or that the judgment was in fact paid by the proceeds of sale of the chattels mortgaged to Edwin Allen, has not been proved. That payment was made in this manner is, as against all persons but the actual parties to the origihal suit, the only basis of any equity to set aside the voluntary partition and to enforce the judgment as still existing against the original undivided interest of the judgment debtor in those lands. This absence of notice and the delay of Edwin Allen in prosecuting cither his appeal or his claim to subrogation, after the original decree in chancery, are fatal to his claim to tire benefit of the judgment as an outstanding lien on the lands now held under David A. Con-over, even if the judgment be not considered paid. The equities of these purchasers under the tenant in common not party to the judgment, as between them and Edwin Allen, equitably subrogated to the judgment, may properly be settled on this bill to have the benefit of the judgment. It .is settled in this state that a judgment creditor of one tenant in common is not bound by a voluntary partition made between the tenants in common by mutual deeds after the recovery of his judgment, even though it be fairly made, and that such judgment creditor may decline to be bound by the partition, and may sell under his judgment the undivided interest in the entire lands, as if no partition had been made. Emson v. Polhemus, 28 N. J. Eq. (1 Stew.) 439 (Court of Errors and Appeals, 1877). But it is also settled that the purchaser under the judgment may be brought into equity for a partition of the entire lands owned in common before the voluntary partition, and may also, by equities raised against him or the tenant in common under whom he claims, be required to receive on the partition the lands received by the judgment debtor on the voluntary partition. Polhemus v. Emson, 28 N. J. Eq. (1 Stew.) 576 (Chancellor Runyon, 1877); affirmed on appeal, 29 N. J. Eq. (2 Stew.) 683, 585 (1878). The question, therefore, is whether, considering the judgment as not paid, but outstanding against all persons, the judgment creditor, or Edwin Allen claiming under him, declining to be bound by the partition, are, by any circumstances proved in the case, equitably obliged to carry out the voluntary partition and look to the entire estate in the land released to the judgment debtor, rather than to his undivided interest in the whole land. At the hearing, counsel for Edwin Allen claimed tire right under the judgment to sell first the entire fee in lot So. 6, which was released to Cornelius N. Conover in the partition, but this claim to a right conveyed to the judgment debtor under the partition manifestly validates and accepts the partition as binding. Polhemus v. Emson, 28 N. J. Eq. (1 Stew.) 576, and 29 N. J. Eq. (2 Stew.) 683, show that the partition must be ignored in toto in following out the judgment creditor’s rights, and clearly, unless this were so, the judgment creditor, who held a mere security for a debt of one tenant in common, would get the security also of the estate of tire other tenant in common, repudiating, at the same time, the payment of the price or consideration upon which it was convejml. Speyers, the assignee of the judgment, under whom Edwin Allen claims, accepted the partition by taking a mortgage on the lands released to Cornelius hi. Conovey in the partition. He may, as the holder of the judgment, be bound .to make up any loss to the equitable assignee of the judgment by reason of this acceptance, and the Mapes company may be also liable, secondarily, for such loss or damage occurring .to the security after commencement of the suit, but it would,not be equitable, in view of the delay in the appeal, to ignore the effect of this assignment to Speyers, as accepting a partition; certainly it should not be ignored in the absence of any proof that the division was unfair. I conclude, therefore, that,. in any event, and whether the judgment be considered paid or as a valid security against all parties to the suit, it should' not be enforced 'against the lands released to David A. Conover in the partition. The same conclusion is reached as to the lands released to Mrs. Boice, the dowress, on the voluntary partition. If I am xiglrt in concluding that the judgment was in fact paid, it should not be revived in equity against her mortgagee, the defendant Polhemus, guardian, nor should it be revived against Prueella, the subsequent purchaser of the undivided half interest in the land which descended to Cornelius N. Conover after the judgment was paid. Had Corneliu's still remained the owner, it might have been retained against him by estoppel, as it is against his other lands. If the judgment be considered not paid, the delay in prosecuting the appeal or a suit for subrogation, and the acceptance of the partition by the assignee of the judgment, also entitled Polhemus and Prueella to protection against the judgment.

If the lands of Cornelius N. Conover, which I find to be still liable to be sold for payment of the judgment, do not produce sufficient to pay the amount to which Edwin Allen is entitled under the decree on appeal, then the defendants Cornelius N. Conover, Nevins, as administrator of Mrs. Boice, the defendant Speyers and the Mapes company, are liable to make up the deficiency. This order of liability results from my conclusion that the judgment was really paid by the debtor, and that it was kept alive by the assignment for the purpose of returning to him the money paid or secured to be paid. As to the order of liability, it now strikes me that the judgment debtor, as receiving the money, is first liable; the estate of Mrs. Boice, a party to the suit, to whom the judgment debtor paid the money over with notice, is secondly liable; Speyers, who allowed the payment of the judgment to himself for the purpose of passing it to the judgment debtor, is thirdly liable. As to the Mapes company, while it appears that the receiver, who was their attorney and knew of the assignment to Speyers, paid the money, as he supposed, to Speyers, and did not know that it was received by the attorneys as money belonging to the judgment debtor, yet by their assignment to Speyers pendente lite of the judgment, respecting which an order limiting their control was expressly prayed, they have placed the ■ judgment beyond their control and prevented the carrying out of the conditions imposed by the court of appeal. They must therefore be held liable to Edwin Allen for this result.

If counsel desire to be heard on the question of order of liability in opposition to this view, it may be brought up on settlement of the decree.

If the transaction of the assignment be considered a purchase and not a payment of the judgment, then the liability for deficiency would be somewhat different. The liability in that case would extend only to the difference in the value of the lands received in the partition by the judgment debtor, or subsequently inherited from his mother, and the value of his undivided interest in the whole, lands at the time of the decree in chancery. This difference would be all which, if the judgment continued a lien, was lost by the action pendente Hie of either the Mapes company or Speyers in reference to the judgment. For this deficiency, as between themselves, Speyers would be first liable. If, after receiving the money due on the judgment as his money, he gave it to Conover, the judgment debtor, and released the judgment, he has no equity to a return of the money, or to any further claim on the judgment.

I will advise a decree directing an assignment of the judgment to Edwin Allen, but upon the terms that no proceedings thereunder be taken to sell the lands released to David A. Con-over and Gertrude Y. Boice in the voluntary partition, and that upon the execution of the assignment these lands be released from the judgment. Decree as to further relief, including injunction against use of the warrant of satisfaction and personal liability of any of the defendants, settled on notice.


text:
    James G. Delaney v. Hattie Cary Hills Delaney.
    [Filed June 21st, 1905.]
    1. In divorce, the evidence of a co-respondent cannot be set aside as insufficient to establish the charge merely because he is an accomplice.
    2. In divorce, the defence of condonation is not available unless pleaded.

      Mr. Charles M. Myers and Mr. Edward M. Golie, for the petitioner.

      Mr. Idiomas S. Henry, for the defendant.
   Emery, Y. C.

The singde act of adultery charged by the husband is proved by the evidence of the co-respondent, corroborated by the evidence of the petitioner, who, as he says, came upon defendant as she was getting out of the bed occupied by the co-respondent as a guest in their apartment. The effect of the husband’s evidence as corroborative is seriously shaken by the circumstances disclosed in this suit affecting his credibility—first, by the evidence given by Pyatt, the colored elevator boy, of the petitioner’s suggestion to him that he (Pyatt) could swear he had seen the parties in bed together, when the petitioner must have known Pyatt could not have seen this; next, his denials under oath of his acknowledgments of his relations to his own child by another woman, which are clearly shown to be false by his letter to the boj', and which denials must have been known to be false; third, his brutal behavior and language to his wife, disclosed by his own evidence of his behavior to his wife, and also by his bearing on the witness-stand. -1 should not be willing to advise a decree if it were to be based substantially on his testimony, either as direct or corroborative'evidence. The case depends practically on the weight to be given to the evidence of Locket, the co-respondent. As co-respondent his evidence must be regarded with caution, but it cannot be set aside as insufficient to establish the charge merely because he is an accomplice. This rule is often applied in divorce cases where the co-respondent is a common prostitute, or person of loose character, but it is not, as I understand, a hard and fast rule, which must be applied in every case to the evidence of a paramour. Nothing has been shown against Locket which would require him to be put in the category with witnesses of this character, and on full consideration of his evidence, both during the hearing and since, I think it must be accepted as true. To a slight extent, it is corroborated by the witness Rose Hill, the only other person in the apartment at the time, but not sufficiently so to put the case in any other status than that of depending substantially on the truth of Locket’s evidence, with petitioner’s corroboration, if that is to be given weight. The defendant denies the charge, but her own credibility is so seriously shaken that her denial alone cannot avail to clear her of the charge.

It was proved that the defendant was, as the husband well knew, inclined to drink, and at the hearing I intimated to counsel that the entire evidence might show that the guilt of the wife was perhaps induced or brought about by the conduct of the husband in furnishing liquor to her, or bringing it within her reach, and in bringing the co-respondent to his home, or keeping him there while she was under the influence of liquor, and while also he suspected and openly charged her, in the presence of Locket, with infidelity toward him in respect to another man.

, But on further consideration, I conclude that the evidence does not warrant the conclusion that it was within the husband’s intention or contemplation that the crime of adultery was to be committed with Locket, and the ease therefore does not come within the rule establishing connivance or consent.

Condonation was insisted on at the argument, but this defence, in order to be available, must be pleaded. Jones v. Jones, 18 N. J. Eq. (3 C. E. Gr.) 34 (Chancellor Zabriskie, 1866); Warner v. Warner, 31 N. J. Eq. (4 Stew.) 225 (Vice-Chancellor Van Fleet, 1879). If applied for, an amendment might, in a proper case, be allowed to set up the defence (Warner v. Warner, supra), but assuming this question to be in the case, the defendant has failed to establish this defence on the proofs. She swears that petitioner cohabited with her on Sunday, Monday and Tuesday, and as to the latter date, swears positively, both on direct and cross-examination, that petitioner spent this night -in her bed. It is proved beyond question that the petitioner spent that night in Few York at his sister’s. The con-donation depends on her evidence, which is denied by petitioner, and with her credibility thus impeached it cannot be considered as made out.

I will advise a decree for petitioner.


text:
    Louise Urich v. Thomas J. Watts et al.
    [Filed June 27th, 1905.]
    The complainant purchased lands of the defendant, and, after discovery of an alleged mistake in the description, made an oral agreement with the defendant to purchase the additional land claimed to have been intended to have been included -in the original purchase, and soon after the complainant began building a porch thereon on the faith of this agreement, which porch was completed without the defendant’s objection. —Held, that this subsequent oral agreement cannot be repudiated after a year’s possession under it in order to obtain specific performance of the alleged original parol agreement of purchase by having the deed corrected to include the land in question.

      Mr. Frank Voigt and Mr. Frank F. Bradner, for the complainant.

      Mr. Charles R. Snyder and Mr. Fdmund Wilson, for the defendants.
   Emery, Y. 0.

On the evidence in this case I am satisfied that the complainant, after the discovery of the alleged mistake in the description contained in her deed, made an agreement with the defendant Watts for the right to purchase the additional land now claimed to have been intended to be included in the original purchase. This 'agreement for purchase was made on her behalf by her son, soon after the commencement of complainant’s building, and the completion and continuance of complainant’s porch on the disputed land, to which the grantor still held the title, was permitted by the grantor on the faith of this agreement or option of purchase within a year. I conclude, therefore, that this agreement, followed by possession for more than a jrear, cannot now be repudiated in order to obtain a specific performance of the alleged parol agreement of purchase made prior to the execution of the deed and alleged to have included the land in question as part of the original purchase. The enforcement of this contract is sought by the bill and the correction of the deed for the purpose of enforcing it, and even if the alleged agreement was satisfactorily proved, the complainant, in view of her subsequent agreement, is not now equitably entitled to a specific performance of.it. The bill must therefore be dismissed upon this ground, without considering the further questions raised. These were (1) the insufficiency of the parol proof to establish the alleged contract under the statute of frauds. The possession relied on to take the case out of the statute is, as I find, fairly referable to the subsequent agreement with the grantor, and not to the alleged original agreement. (2) The merger and termination of all prior contracts by the- deed finally accepted in the form which all parties agreed upon. This subsequent agreement to purchase the disputed strip of land was set up in the answers, but complainant made no application to amend her bill in order to obtain relief under this agreement, if made. On the contrary, she denied making or authorizing her son to make the subsequent agreement, and at the hearing declined to apply for relief on the subsequent contrae! The bill stands, therefore, purely as a bill to enforce the alleged prior parol 'agreement, and must be dismissed.


author: Emery, V. 0.

text:
    Bridget Small et al. v. Catherine Pryor et al.
    [Decided July 6th, 1905.]
    1. Where, in a suit for partition, decedent’s widow filed a cross-bill, claiming the property under a resulting trust, on the ground that, though she had furnished the purchase price, the title was taken in the name of her husband, she was not rendered incompetent to- testify to the circumstances of the purchase and the source of the money by the provision -of the Evidence, act (Rev. 1900 p. S6S § J), excluding testimony of ai party to a civil action as to any transaction with or statement by any testator or intestate represented in the action where any party sues in a representative capacity.
    2. Prior to the act of 1874, the earnings of a married woman, even in equity, belonged to her husband, unless, by some clear and distinct act, he had evidenced an intention to hold them as trustee for her separate use.
    On bill, answer, cross-bill, replication and proofs.

      ■Mr. Patríele PL. GiThooly, for the complainants.

      Mr. Edward Nugent and Mr. Barrwdl Bchleimer, for the defendant Catherine Pryor.
   Emery, V. 0.

John Prior (or Pryor) died intestate on May 29th, 1904, seized in fee of a iot of land in Elizabeth, upon which was erected subsequent to its purchase a building used as a saloon and for dwelling purposes. He left surviving him a widow, the defendant Catherine Pryor, and as his heirs-at-law a sister, Mrs. Mary Hogan, and also a niece, Bridget Small, the complainant, the child of a sister who predeceased him. Mrs. Small filed a bill for partition of the premises against Mrs. Iiogati and the widow, claiming an undivided half interest in the premises, subject to the widow’s dower. After the filing of the bill, Mrs. Hogan and her husband conveyed to the widow their estate and interest in the premises, and Mrs. Hogan having subsequently died, the suit has been revived and now proceeds against the widow as the sole defendant. Mi's. Pryor files an answer and cross-bill admitting complainant’s legal title, but alleging that in equity it is held in trust for her, upon the ground that the property which was purchased in January, 1870, was bought with her mone3r, and that the deed was made out in her husband’s name by mistake, it being the intention of the parties that it should be made in her name. A mortgage to secure $550 was given to one Mrs. Eafe, an aunt of Mrs. Pryor, shortly after the purchase, to secure the money borrowed by Mrs. Pryor to make, or assist in making, the purchase, or putting up the building, and the cross-bill alleges that the mortgage was subsequently paid by Mrs. Pryor, with her own money, earned by her own work. She further alleges that until the death of her husband she supposed the property was in her name. The complainant denies these allegations, and claims that the money used for.the purchase was the husband’s money; that there was no mistake in making the deed in the husband’s name, and that the money raised to pay the mortgage was the husband’s money. The issues of fact in the case made by the cross-bill and replication are whether the land was purchased with the money of the wife, and whether the deed was made to the husband by mistake. The principal question relates to the source of the money, for if it is clearly proved that the property was purchased with money belonging to the wife as her separate estate, and there is no satisfactory proof that a gift to the husband was intended, the husband, or his estate, must 'account to the wife for the principal at least. Cole v. Lee, 45 N. J. Eq. (18 Stew.) 779, 785 (Court of Errors and Appeals, 1889); Adoue v. Spencer, 62 N. J. Eq. (17 Dick.) 782, 793 (Court of Errors and Appeals, 1900). And if the entire purchase-money was paid from the wife’s separate estate, a resulting trust in her favor would arise, in the absence of proof that a gift or loan was intended, and the legal title will be considered to have been taken in trust for the wife, whether the title to the husband was taken intentionally or by mistake. If a trust is satisfactorily established by the proofs, it may be decreed under the general prayer for relief on tire cross-bill, even though the charge of mistake is not proved. The evidence relating, to the circumstances of the purchase and the source of the money comes from the widow herself, and is not satisfactorily corroborated in any important particular. The competency of her evidence on this point, relating as it did mainly to statements or transactions with the intestate, was objected to as inadmissible under the statute. Evidence act, Rev. 1900 p. 888 § %. Under the previous decisions controlling the question in this court, and examined by me at some length in McKinley v. Coe, 57 Atl. Rep. 1030 (1904), it was admitted, following Crimmins v. Crimmins, 43 N. J. Eq. (16 Stew.) 86 (Vice-Chancellor Van Fleet, 1887), approved by the court of errors and appeals in Smith v. Smith, 52 N. J. Law (23 Vr.) 207, 210 (1889). But, although admissible, evidence of this character, which has the effect of disinheriting the heir, must be clear and satisfactory, and under ordinary circumstances should be corroborated. In the present case the defendant’s evidence is not sufficient to establish a case of trust, by reason either of the purchase of the property, or the subsequent payment of the encumbrance with her own money. The parties were married in the early sixties, the husband at the time of his marriage being an employe of a railroad company, earning about $1.50 a day. The wife was a woman earning her own living as a servant or in domestic labor. Neither she nor her husband had any money at the time of the marriage. After the marriage she worked as a laundress for $1.25 a day. She says that by the time of the purchase she had earned $500, which she saved, and most of it she put into a bank called “Halsey’s Bank.” With this money her husband, as she says, bought the lot. The deed is dated January 15th, 1870; was recorded January 19th, 1870, and the consideration price named in the deed is $500. Her statement as to the money for the purchase coming from Halsey’s bank fails wholly of support, and would seem to be altogether a mistake, for it appears by the deposit-book, which is produced, that this deposit (amounting in all to $637.91) was not made until years later (1884-1887), and was closed out on September 10th, 1887, about the time when another lot was purchased in the joint names of herself and husband for $900. This evidence of the wife that all of the money which went into the purchase was money earned by her and saved is too indefinite and unsatisfactory to be made the basis of a decree that her separate estate alone purchased the property, even if money" earned by her own labor was, at the time of the purchase, her separate estate. But the purchase of the lot, and also the payment of the mortgage of $500, was previous to the statute of 1874 (2 Gen. Stat. 2013 § 4) giving to a married woman her wages and earnings as her separate property. At the time when these earnings, or any of them, were so invested, the rule of the common law prevailed, and even in equity the earnings of the wife belonged to the husband, unless he had divested himself of them by some clear and distinct act by which he held or engaged to hold them as trustee for the wife’s separate use. Skillman v. Skillman, 13 N. J. Eq. (2 Beas.) 403, 407, 409 (Chancellor Green, 1861); affirmed, 15 N. J. Eq. (2 McCart.) 478, 481 (1863). Payment of her earnings to the wife and her retention of them by her husband’s consent, or the investment of them in her name, might, if- satisfactorily proved, be sufficient evidence of a gift to divest the husband of his right. Peterson v. Mulford, 36 N. J. Law (7 Vr.) 481, 487 (Court of Errors and Appeals, 1873). But in several cases decided in equity while this rule of the common law was in force, it was held that the investment by the wife of money received by her for her earnings in the purchase of propertjr in the husband’s name, or in the payment of encumbrances on such property, tend to show that the earnings were not held as her separate estate, but as the common fund for the husband’s use or the payment of his debts. In Skillman v. Skillman, supra (at p. 481), the wife’s earnings were used to pay off the mortgage on property in the husband’s name, and in Persons v. Persons, 25 N. J. Eq. (10 C. E. Gr.) 250, 259 (Chancellor Zabriskie, 1874), to purchase property in the husband’s name.

In the present case the purchase of the lot was undoubtedly made with the intention of building on it a home, and a loan of $550 for the purpose was procured in Februai^, 1870, from Mrs. Pryor’s aunt. To secure this loan the husband gave his bond, the wife not joining, and a mortgage was executed by both. On August 17th, 1871, $375 for principal and interest was paid, the receipt of Mrs. Rafe (the mortgagee) stating it to have been paid by John Pryor. On February 19th, 1876, full satisfaction was acknowledged, but the receipt does not state from whom it was received. After Pryor commenced keeping a saloon in 1880, additions were made to the building and portions of the premises were rented. The wife says that she earned all the money to make the large addition (about $1,200) by working out, but there is no corroboration of this, and it seems more probable that the money for the additions came from the business, which was carefully and industriously carried on. The wife’s sole evidence is not sufficient to overcome this probability. She assisted her husband in the saloon apparently during the whole time it was carried on, and herself collected the rents. She seems for the most part to have taken charge of the money and to have paid the bills, but the business was the husband’s, and her services and assistance of her husband in the business cannot be considered as making the subsequent additions the proceeds of her separate estate. The claim of mistake in the deed is not at all made out. The husband, from the year 1880 to his death, carried on a saloon in the premises, took licenses annually in his own name, himself made the contracts for additions to the buildings, and purchased the material, insured and was taxed for the property in his own name, and his wife paid both insurance and taxes. I do not give much credit to the wife’s present statement that slie did not know the property stood in her husband’s name, especially after he commenced keeping a saloon. The method and exigencies of this business carried on in the husband’s name' probably required, as both of them knew, that the property also should be in his name. Giving all proper weight to the wife’s evidence, I think the case is one which shows that the earnings of both husband and wife contributed to the original purchase of tire property and the erection of the first 'building upon the premises, and that after the saloon business was commenced, the profits of that business, which was carried on mainly, if not altogether, by these persons alone, was the principal source of their further earnings. The husband, as well as the wife, up to the latter part of his life at least, appears to have been industrious and saving. A later purchase, made in 1887, was taken in their joint names, and had the purchase now in question been taken in the same manner, it would probably have been more equitable. But the question for decision now is whether, when the purchase in question was made, it was made solely with the money or separate estate of the wife, and is therefore in equity property held in trust for her by the husband’s heirs.

I do not think that there is in this case any such clear and satisfactory proof as will justify finding such trust to exist.

The cross-bill will therefore be dismissed and a decree for complainant advised on the bill for partition.