author: Swayze, J.

text:
    Richard J. Motley, respondent, v. Henry I. Darling, appellant.
    [Decided November 17th, 1919.]
    1. As there is in a sale’s contract, under Com/p. Stat. p. 4650, an implied warranty of the right to sell, of quiet possession and against encumbrances, unless a contrary intention appears, a bill of sale conveying only the seller’s “right, title and interest” would be cogent, or even in a proper ease conclusive, evidence of such contrary intention, since ordinarily it would not be open to the buyer to contradict the written instrument.
    2. The rule that such a bill of sale, conveying only the seller’s “right, title and interest,” is cogent or conclusive evidence of the seller’s intention to exclude the implied warranties mentioned is not applicable to a suit in equity where the buyer may have the written conveyance reformed to accord with the contract which was in fact made.
    3. The evidence in this ease held to establish that it was intended to convey an absolute title, although the conveyance warranted only the seller’s “right, title and interest,” and therefore the intention not to warrant was not proved.
    On appeal from a decree of the court of chancery advised bjr( Vice-Chancellor Lewis, whose opinion is reported in 88 N. J. Eq. 487.

      Mr. Joseph Anderson, Sr., for the complainant-appellant.

      Mr. Charles E. S. Simpson and Mr. George J. McEwan, for the defendant-respondent.
   Swayze, J.

The complainant filed his bill to establish Darling’s liability-on two promissory notes which plaintiff claimed had been fraudulently destroyed, notes being substituted with the defendant’s name endorsed but not by him or his authority. Motley v. Darling, 86 N. J. Eq. 185. The complainant succeeded in establishing the defendant’s liability, but was required by the vice-chancellor to give a credit on the amount due. This credit the complainant disputes, and we are to decide whether it was equitable. Divested of some of the circumstances unnecessary for the decision of this question, the facts are as follows: Motley held a bill of sale of certain automobiles and an assignment of the lease of a garage. Both were absolute in form. They were in fact held by Motley as) security for a debt of $900. By an arrangement, in which Darling participated, the chattels were conveyed by Motley to Elynn by bill of sale and the lease assigned for a consideration of some $1,479, of which some $279 was paid in cash, and $1,200 secured by the notes endorsed by Darling. Darling was secured by a chattel mortgage from Elynn conveying the same chattels conveyed by Motley’s bill of sale. Darling seems to have relied, and might properly rely under the circumstances of the case, upon the validity of the title conveyed by Motley to Elynn. In fact there were prior liens which it was necessary to discharge, and it is the cost of discharging them which the vice-chancellor required Motley to credit on Darling’s liability. Motley says that he was not liable for the goodness of the title conveyed by him to Elynn, because he only assumed to convey and agreed to warrant! his “right, title and interest.” He appeals to the principle of Gould v. Bourgeois, 51 N. J. Law 361. The rule in force when the present transaction took place, as stated in section 13 of the Sale of Goods act (Comp. Stat. p. 4650), does not differ. In a contract to sell, or a sale, there is an implied warranty of right to sell, of quiet possession, and against encumbrances, unless a contrary intention appears. We do not doubt that ordinarily a written conveyance of right, title and interest only, would be cogent, or even in a proper case conclusive, evidence of a contrary intention, since ordinarily it would not be open to the vendee to contradict the written instrument. This rule, however, is not applicable to a suit in equity, where the vendee may have the written conveyance reformed to accord with the contract that was in fact made. In the present case, the vendee, while a party to the suit, does not pray for such relief, and the question is whether one claiming under him as mortgagee may have it. As his rights depend on the rights of the vendee, the first question is, would Flynn be entitled to relief ? The answer depends upon what the contract in fact was. The only circumstance which indicates that Motley meant to convey no more than his “right, title and interest” is the interlineation of those words in the bill of sale. The bill of sale as drawn is nonsensical since by it Motley in the first person conveys to Flynn and warrants all his right, title and' interest. Literally read, Motley conveys Flynn’s interest to Flynn. The error to be sure is palpable, but it makes necessary reformation of the bill of sale. To ascertain what the contract was we must examine all the evidence. We think Motley’s own testimony demonstrates that it was meant to. convey an absolute title. He says he told Flynn he had absolute title; that he “gave Flynn the same title that was given to me, an absolute title;” that Flynn knew through Spraggins that he was getting an absolute title; that the bill of sale and everything else was absolute. He admitted also, and it was not questioned, that there was included in the $1,479 purchase price, $500 which Spraggins was to get from him (Motley), but said he did not know that it was paid to him for the purpose of cleaning up all other claims to the title. If the $500 was not paid for that purpose, it is difficult to explain the object of the payment. The very fact that the form of a bill of sale was adopted bears out Motley’s testimony that Flynn was to have an absolute title. If the contract had been merely to assign Motley’s interest as mortgagee, as security for his loan of $900, a different form would have more naturally been adopted, and the consideration would not have been made $1,479, since Motley’s interest at most would have been $900 plus some interest. Motley testified in another case v(and the testimony was in evidence in this case) that he went with Flynn “to put him in possession of the garage he had bought.” This is not the language he would have used if in fact Flynn had bought no more than a bill of sale held as collateral security, or in other words, a mortgage on the garage. The amount of the purchase price, the form of the conveyance, the formal delivery of possession, the surrounding circumstances, convince us of the truth of Motley’s testimony that Flynn' was to get an absolute title. The contrary intention of which the Sale of Goods act speaks is not proved. If Flynn were the party seeking the benefit of the statutory warranty of title, we should have no doubt that he would be entitled to a reformation of the bill of sale and to the relief that would follow. But the relief is not sought by Flynn, but by Darling, or rather is given by the decree to Darling, and to sustain the decree it must appear that Darling is entitled to that relief. As to him the situation is this: Motley appeals to a court of equity against Darling, and must do equity. He seeks to establish Darling’s liability as endorser on notes that have been destroyed.' The real consideration of Darling’s endorsement was the transfer of the absolute title in the chattels to Flynn who immediately mortgaged them to Darling. Indeed it is probable that Darling was the principal since Flynn’s name seems to have been inserted in the bill of sale by Darling’s direction. Darling relied for security of his endorsements upon the existence of a good title in Flynn. Motley was to profit by Darling’s endorsemehts, and could not have failed to know that Darling relied on Flynn’s having title. The parties were all met together with their counsel and went together to the garage where Motley assumed to deliver possession to Flynn, in Darling’s presence, and the notes with Darling’s endorsements, were delivered to Motley, and the chattel mortgage from Flynn delivered to Darling. It is suggested that Darling knew that Motley did not own the chattels because in an agreement with third persons, executed by Darling a few days before, it -was recited that Motley held the title in his name, and the third parties agreed upon the adjustment of Motley’s claim to execute a chattel mortgage to Darling. The answer to this suggestion is that it may have been this very question as to the character of Motley’s title that induced the warranty. In fact it was, as Motley now says, no warranty since it was only a warranty of right, title and interest. Such a warranty could hardly have been meant for any purpose except to deceive the vendee.

It would not be equitable to require Darling to pay the notes without receiving the security which it was meant he should have. We‘therefore agree with the learned vice-chancellor. The decree is affirmed, with costs.

For affirmance — The Chief-Justice, Swayze, Trenchard, Parker, Bergen, Kalisci-i, Black, White, Heppeni-ieimer, Williams, Gardner, Ackerson- — 12.

For reversal — Minturn—1.


source: Caselaw Access Project

license: Public Domain

text:
    John M. Freund et al., appellants, v. Anna M. Freund, respondent.
    [Decided November 17th, 1919.]
    Where a testator directs in -his will that all his property shall go to his children -in equal shares, and in case one of his children dies without issue, ¡bis or her share shall be equally divided among his other children, and five children survived him, -one of whom died without issue after the, death of the life tenant, having devised all his estate to his wife, the wife’ takes her husband’s share, as his one-fifth interest was vested in him, and passed by his will.
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Stevenson.

      Mr. Clarence Kelsey, for the complainant-appellant.

      Mr. James F. Fielder, for the defendant-respondent.
   The opinion of the court was delivered by

Swayze, J.

Herman C. Freund by his will gave his wife the income for life of his estate and then directed

“that after her demise all the property shall go to my children in equal shares, and in ease one of my children dies without issue his or her share shall be divided equally among the other children.”

Five children survived him. One of these, Herman G. Freund, died without issue, after the death of the life tenant, having devised all his estate to his wife, Anna, the present respondent. The question is whether she took anything by this devise or whether Herman G.’s interest terminated by his death without issue. We agree with the learned vice-chancellor that one-fifth of Herman C.’s estate was vested in his son Herman G., and passed by the latter’s will to the respondent. This result was vindicated by the vice-chancellor in a characteristically thorough and able opinion.

We think it necessary to say only that the case is governed by the principle illustrated in Post v. Herbert’s Executors, 27 N. J. Eq. 540, and Miller v. Worrall, 59 N. J. Eq. 134. The opinion in the latter case was not by this court and the decree was reversed, but we took care to say that in this respect we agreed with the vice-chancellor.

The decree in the present case must be affirmed, with costs.

For affirmance — The Chief-Justice, Swayze, Trenchard, Parker, Bergen, Minturn, Kalisci-i, Black, White, HepPENHEIMER, WILLIAMS, TAYLOR, GARDNER, ACKERSON-14.

For reversal — None.


author: Trenchard, J.

text:
    New Jersey Title Guarantee and Trust Company, executor, &c., of Helena Metz, deceased, complainant-appellant, v. Louisa Archibald et al., defendants-respondents.
    [Submitted July 7th, 1919.
    Decided November 17th, 1919.]
    Where moneys belonging originally either wholly to the mother, or in part to- her and in part to her daughter, are deposited by them in a bank in their joint names, and at the same time they both sign and deliver to the bank a writing -stating that “this account and all money to be credited to it belongs to ns as joint tenants and will be the absolute property of the survivor of us; either and the -survivor to draw,” upon the death -of the mother the undrawn moneys belong to the surviving daughter.
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Lewis, whose opinion is reported in 107 Atl. Rep. 472, and 90 N. J. Eq. 324.

      Mr. Gilbert Collins, for the appellant.

      Mr. Ralph E. Cooper and Mr. David A. Newton, for the respondent Louisa Archibald. "

      Messrs. Campbell, De Turóle & West, for the respondent First Hational Bank of Westwood, New Jersey.
   The opinion of the court was delivered by

Trenchard, J.

This is an appeal from a decree dismissing a bill of complaint which was designed to settle the ownership, of three bank accounts, one in the Bergen branch of the New Jersey Title Guarantee and Trust Company, the other two in the FirstHational Bank of Westwood, New Jersey.

The bill was filed by the New Jersey Title Guarantee and Trust Company as executor of Helena Metz, deceased, and avers, among other things, that it- is “in doubt whether to claim as executor of said Helena Metz the said deposits” and prays that it “may be judicially determined to whom the said respective deposits belong,” and “that complainant may be instructed as to its duty in the premises.”

The defendants Louisa Archibald and the Eirst National Bank of Westwood both moved to dismiss the bill upon the ground that it “appears by the bill of complaint that the said Louisa Archibald is the surviving- joint tenant of the deposits referred to in said bill, and therefore is entitled to said moneys.”

The learned vice-chancellor was of the opinion that the position of the defendants was well taken and accordingly dismissed the bill.

We are of the opinion that the vice-chancellor was right.

Looking first with respect to the deposit in the New Jersey Title Guarantee and Trust Company we find the following averments in the bill of complaint: On November 30th, 1915, “Helena Metz opened a special deposit account in the Bergen branch of complainant, and deposited therein on that day $500.” On March 31st, 1916, “the said Helena Metz, with her daughter Louisa Archibald, changed said account so that it should be with Helena Metz or Louisa Archibald, and deposited therein the sum of $17'o in cash and $263.43 in checks drawn by said Helena Metz on an account kept by her in the main office of the complainant, which account was at that time closed out.” At the same time “the said Helena Metz and the said Louisa Archibald signed and delivered to complainant a writing dated March 31st, 1916, referring to said account by its number 2809,” which writing, among other things, contained the following provisions :

“This account and all money to be credited to it belongs to us as joint tenants and will be the absolute property of.the survivor of us; either and the survivor t'o draw.”

At the time of the death of Helena Metz there was to the credit of the account the sum of $1,031.31. The pass book evidencing such deposit was, after the death of Helena Metz, brought to complainant by Louisa Archibald who asserted her right to withdraw the deposit for her own use.

With respect to whether or not either of the parties ever drew any of the funds so deposited the bill is silent.

How it may well be doubted whether under such a bill the complainant would in any event be entitled technically to the relief prayed for, but since all parties in interest are before the court, and have been heard, -we assume that the bill will lie quia timet, and, in accordance with the wishes of the parties, proceed to determine the ownership of the deposits.

At the outset it is to be remarked that we are not here concerned with the class of cases where the rights of the parties depend in part, at least, upon the possession of a pass book without the possession of which the moneys could not be withdrawn. Here the rights of the parties depend upon- the legal effect of the contract upon which the deposit was made and which contained no such provision.

It will be noticed that it does not appear clearly from the bill of complaint whether the moneys deposited belonged originally wholly to the mother, or in part to her and in part to the daughter. But that is immaterial.

We think that where, as here, moneys belonging originally either wholly to the mother, or in part to her and in part to her daughter, are deposited by them in a bank in their joint names, and at the same time they both sign and deliver to the bank a writing stating that “This account and all money to be credited to it belongs to us as joint tenants and -will be the absolute property of the survivor of us; either and the survivor to draw,” upon the death of the mother the undrawn moneys belong to the surviving daughter. .

Such is the logic of East Rutherford S. L. & B. Assn. v. McKenzie, 100 Atl. Rep. 931; affirmed, 87 N. J. Eq. 375.

It is, however, contended that the essentials of a technical joint tenancy are not present because of the right of both to draw out the entire fund, and it is argued that what was intended was a testamentary disposition which was void for nonconformity to the statute of wills. But a somewhat similar deposit was dealt with in Hoboken Bank for Savings v. Schwoon, 62 N. J. Eq. 503, and the survivor was held entitled to the fund. In answer to the argument based upon the fact that the power of disposition remained in the donor during Iris lifetime the court said: “This circumstance has not deterred the court from giving effect to such arrangements. This has been done on two grounds — first, that a joint estate or interest is created with an express right of survivorship which operates naturally ctnd legally upon whatever of the fund remains unused at the death of the donor; and second, on the ground of a completed trust.”

Whether the deposit in the case at bar created a technical joint tenancy is beside the mark. We have pointed out that it was a deposit of moneys originally belonging either wholly to the mother, or in part to her and in part to the daughter. More strictly speaking, it was a loan by the depositors to the banks upon the terms stated, since a deposit in a .bank creates the relation of debtor and creditor between the depositor and the bank. Schippers v. Kemphes, 67 Atl. Rep. 1042; affirmed, 72 N. J. Eq. 948. The bank therefore contracted with the mother and daughter that such moneys should be held for them “as joint tenants and will be the absolute property of the survivor; either and the survivor to draw.” That contract they had a right to make, and undrawn moneys so deposited belong to the survivor. Dial’s Administrator v. Merchants & M. Sav. Bank (Va.), 91 S. E. Rep. 135. In such case it is not necessary to establish the existence of a technical joint tenancy to create the right of survivorship; in other words, the incident of survivorship which exists by implication in a joint tenancy is expressly provided for by such a form of deposit.

It is argued that there was no gift from the donor to the donee because there was no delivery. But we think that is not so. The right was contractual and was vested in both depositors jointly and the survivor. The contract entered into by the bank with the mother and her daughter exhibited a donative purpose from donor to donee (not one merely for use and convenience of the donor) and hence constituted a valid gift. See East Rutherford S. L. & B. Assn. v. McKenzie, supra; Schippers v. Kemphes, supra; Dunn v. Houghton, 51 Atl. Rep. 71.

These considerations in effect dispose of every question argued, not only with respect to the deposit in the complainant trust company, but also with respect to the two deposits in the First National Bank of Westwood, because the material facts are the same.

The decree below will be affirmed.

For affirmance — The Chief-Justice, Swayze, Trenohard, Parker, Bergen, Kalisci-i, Black, White, PIeppeni-ieimer, Williams, Gardner, Ackerson — 12.

For reversal — Minturn—1.


text:
    John A. Stewart et al., trustees, &c., complainants, v. Fairchild-Baldwin Company et al., respondents.
    [Submitted July 7th, 1919.
    Decided November 17th, 1919.]
    W'here a mortgage does not expressly pledge the rents, issues and profits of the mortgaged premises as further security for the payment of the debt, the rents accrued prior to the appointment of a receiver in a foreclosure proceeding (appointed on the application of the second mortgagee) belong to the mortgagor or the owner of the fee, and such receiver will not be directed to collect and apply them in payment either of unpaid taxes or interest on the mortgages.
    Appeal of American Real Estate Company.
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Lane, whose opinion is reported in 90 N. J. Eq. 139.

      Mr. Samuel F. Leber, for the American Eeal Estate Company, appellant.

      Messrs. Pitney, Hardin .<& Shinner, for the Chester Eealty Company, respondent.

      Messrs. McCarter & English, for John A. Stewart et al., trustees, &c., respondents.
   The opinion of the court was delivered by

Trenchard, J.

This is an appeal from orders directing a receiver in a foreclosure proceeding to collect rents that had accrued prior to the time of his appointment. The facts are these: The American Eeal Estate Company is the owner of land, with an office building erected thereon and occupied by numerous tenants, in the city of Newark. John A. Stewart and others, trustees of the Liverpool & London & Globe Insurance Company, Ltd., hold a first mortgage on the property securing the principal sum of $350,000. The Chester Eealty Company holds a second mortgage for $90,000. Hyman Eosensohn, trustee, holds a third mortgage for $15,000. There were unpaid taxes and assessments of about $36,000.

The bill of complaint was filed by the first mortgagee to foreclose their mortgage for default in the payment of interest, taxes and assessments, and the second and third mortgagees, as well as the tenants were brought into court. The bill was filed January 7th, 1919. On January 18th, 1919, on the application of the second mortgagee, the Chester Eealty Company, a receiver was appointed and was ordered “to take charge of the mortgaged premises and manage the same, with power to sue for and collect the rents, issues and profits thereof,” and it was further ordered “that the tenants in possession of the said premises be and they are hereby ordered and directed to pay the rents now in arrears, if any, and the rents due and to grow due, to the said receiver until the further order of the court.” In that order the owner and tenants were directed to show cause on January 28th, 1919, “why the appointment of said receiver should not be continued, and why the directions as to the disposal and application of the proceeds should not be confirmed and proper directions given as to their disposal.” On the return day of the rule the appointment of the receiver was confirmed and continued, and the directions as to the disposal of the proceeds were confirmed and continued until the further order of the court. Later, on March 11th, 1919, the vice-chancellor ordered, among other things, “that the receiver herein proceed to collect the rents accrued and unpaid at the time of his appointment, that he keep the same in a separate fund and apply them to the payment of taxes and municipal liens which have accrued and remain unpaid, and second, to the payment of interest on the first mortgage, and that he hold the balance, if any remains after so doing, until the further order of the court.”

On this appeal of the owner the only question raised is the legality of such parts of the orders as direct the receiver to collect rents that had accrued prior to his appointment.

We are of the opinion that the appeal is well taken.

It is important, in the first place, to clearly bear in mind the relationship between mortgagor and mortgagee, and the rights of a mortgagee in this state.

The common law rule, that a mortgage created an immediate estate in the mortgagee, and vested in him immediately, upon the execution and delivery of the mortgage, an actual estate with a right of immediate possession, subject only to be defeated by the payment of the mortgage money, has not been adopted by our courts. Woodside v. Adams, 40 N. J. Law 417; Shields v. Lozear, 34 N. J. Law 496; Sanderson v. Price, 21 N. J. Law 637.

However, upon breach of condition, the mortgagee’s estate has all the incidents of a common law title, and he has the right to the possession of the mortgaged premises. Woodside v. Adams, supra; Shields v. Lozear, supra.

The mortgagee, after breach of condition, having a title in the mortgaged premises possessing all the incidents of- a common law title, and only subject to he divested by the equitable proceeding to redeem, and having the right to possess the property, has the right,, from the date of taking such possession, to the profits arising from the estate. At common law, he could not be compelled to account to the mortgagor for the value of the profits taken by him. This was a hardship upon the mortgagor, and so a court of equity will compel the mortgagee to credit to the debt the profits received by him. This was done upon the theory, always obtaining in the court of chancery, that until the mortgagor has been foreclosed by decree of and from the right to redeem, the mortgage, even after default, was a security.

Since, after default the mortgagee can take possession or ob-f tain possession by ejectment of the mortgaged premises, it fol-j lows, as a matter of course, that not until the mortgagee has ob-l tained possession by either one of the above methods, can he* take rents or profits arising from the lands. To hold otherwise would destroy the rights of the mortgagor up to the date of default and taking possession. It is only when the mortgagee acts upon default, and takes possession, that he puts to an end the rights of the mortgagor to the incidents that arise out of possession, subject, of course, to redemption by the mortgagor.

How a receiver appointed by a court of equity in a foreclosure proceeding is a substitute for taking possession under the common law. It is a convenient substitute,-because in cases where several mortgagees hold liens upon the premises in question, their rights in the rents and profits can better be adjudicated. •But such a receiver has no more rights than the mortgagee himself would have, and since a mortgagee taking possession of mortgaged premises is not entitled to rents accrued before the date of taking possession, it follows that a receiver is not. The mortgagee is not entitled to any special favor. He is a secured creditor and has dealt with open eyes. He must look to the security. It follows, therefore, -when,' as here, a mortgage does not expressly pledge the rents, issues and profits of the mortgaged premises as further security for the payment of the debt, the rents' accrued prior to the appointment of a receiver in a foreclosure proceeding (appointed on the application of the second mortgagee) belong to the mortgagor or the owner of the fee, and such receiver will not be directed to collect and apply them in payment either of unpaid taxes or interest on the mortgage.

Such is the rule to be gathered from the cases. Northrup v. Roe, 10 N. J. L. J. 334; Leeds v. Gifford, 41 N. J. Eq. 464; affirmed, 45 N. J. Eq. 245; Conover v. Grover, 31 N. J. Eq. 539.

In the case of 'Leeds v. Gifford, supra, Vice-Chancellor Van Fleet says: “According to the rule now in force, a prior encumbrancer has an unquestionable right, as against the mortgagor and subsequent encumbrancers, in ease his security is uncertain or precarious, to have the rents of the mortgaged premises, accruing subsequent to the appointment of the receiver, sequestered for his benefit.”

It may be said that this statement was not necessary to the decision in the Leeds Case, but it is the opinion of an eminent equity judge, and this court affirmed that case on his opinion.

In the case of Northrup v. Roe, supra, the same vice-chancellor. had before him the sharp and direct question for decision. This was a foreclosure case, and a motion was made for the appointment of a receiver. It appeared from the petition that the mortgaged premises had been conveyed to a grantee, who had died intestate leaving a widow and children; .that the widow died and the children were in possession, and that the mortgaged premises, which consisted of a farm, were worked by a tenant for one-half of the crop. Petitioner proved insolvency of obligor and the inadequacy of the security. The vice-chancellor said: “The complainant is entitled to the aid of the court. The mortgaged premises are occupied by a tenant, who, in lieu of a money rent, delivers a share of the produce of the land. The application in this case was not made'until nearly all the labor required to put the crops in, care for them and gather them had been expended. It is obvious, I think, that the mortgagee should not, under such circumstances, be allowed to take the whole of the mortgagor’s share of the produce. He should not be permitted, in a case where he does not ask for the appointment of a receiver until all the labor necessary to make the crops has been done, to take all. The just rule, to be applied in such cases, as it seems to me, is this: To consider the value of the produce, which the 'mortgagor or landlord receives, as the fair rental of the premises, for the year, and then give the mortgagee such part thereof as represents, on the basis above stated, the rental value of the premises from the time a receiver is appointed, that is to say, if six months of the year have expired when a receiver is appointed, only six months’ rent shall be sequestered for the benefit of the mortgagee. * * * The rental of the mortgaged premises for the year ending April 1st, 1888, will be apportioned in the manner indicated above.”

In the case of Conover v. Grover, supra, Chancellor Eunyon said: “After the filing of the bill, application was made to the court for the appointment of a receiver of the rents, issues and profits of the mortgaged premises, which ivas granted. The assignment by Grover to Leggett of the lease, was made October 30th, 1877, six days after the bill was filed. The mortgagees are entitled to the'rents and pro-fits which have accrued since the appointment of the receiver, if necessary, for the satisfaction of their mortgages.”

In the present case, the learned vice-chancellor thought that to permit the owner of the land to collect the rents that had accrued before the commencement of the foreclosure suit and which remained uncollected would work a fraud upon the mortgagee, in view of the fact that the owner had allowed taxes and interest to accrue. But, as we have pointed out, that view does not comport with the legal or equitable relationship of mortgagor and mortgagee.

The vice-chancellor looked upon the ease at bar as an extra-, ordinary "one and as such not controlled by the ordinary rule which, of course, he clearly recognized. But we see nothing extraordinary .about it except the fact that, by reason of the neglect of the owner to pay interest, taxes and assessments, the security had become “uncertain or precarious,” which fact justified the appointment of a receiver of the rents, issues and profits thereafter accruing during the pendency of the foreclosure proceedings. Leeds v. Gifford, supra.

The orders appealed from will be reversed, with costs, and the record remitted to the court of chancery for modification of the orders in accordance with this opinion.

For affirmance — -None.

For reversals-Ti-ie Oi-iiee-Justice, Swayze, Trenohard, Parker, Bergen, Minturn, Kalisch, Black, White, HepPENHEIMER, WILLIAMS, TAYLOR, GARDNER, ACKERSON-14.


author: Parker, J.

text:
    Reuben B. Hall, complainant-respondent, v. Francis C. Ely, defendant-appellant.
    [Submitted July 7th, 1919.
    Decided November 17th, 1919.]
    1. In vendor’s suit for specific performance of contract to purchase land consisting of two separate tracts, where the title to one tract fails but vendee asks conveyance of the other with compensation, no compensation will be decreed when it appears that the tract whose title is defective was not considered by the parties as a substantial element of valuation when the purchase price was agreed on, and that vendee then knew the title was defective.
    2. Evidence of transactions between the parties before the execution of the contract in this case, held admissible to show the knowledge of both parties as to the defect in title, and the disregard by them of the second tract as a substantial element -in the purchase price, the contract expressing nothing on that point.
    3. When the vendee goes into possession under the contract, he is entitled to the profits of the land, and the vendor to interest on the purchase-money- unless some superior equity appears.
    On appeal from a decree advised by Vice-Chancellor Learning.

      Mr. Oscar B. Bedrow, for the appellant.

      Mr. David O. Watkins and Mr. George B. Marshall, for the respondent.
   The opinion of the court was delivered by

Parker, J.

This was a vendor’s suit for specific performance of a contract to purchase two tracts of land in Gloucester county, the first of about ninety-one acres and the second of about fourteen acres. Vendee’s plan was to divide the land into lots for sale. He entered at once into possession of the ninety-one-acre tract and was in possession at the filing of the bill. As to the second tract, it developed on the hearing that complainant could not make marketable title to that tract; but as defendant, both in his answer and at the outset of the hearing, expressed his willingness and desire to accept the first tract irrespective of the other, and merely prayed allowance for the value of the second, the parties stipulated in writing for, and the court ordered, a reference to a master to take an account between the parties of the claims -arising out of the situation, including an ascertainment of what deduction, if any, should be made from the purchase price because of the failure of title to the fourteen-acre tract, and also adjust other claims, such as taxes, interest on purchase money, and so on, and to report accordingly. The master, after taking testimony at some length, reported back that on the facts found by him, the vendee was not entitled to any deduction for failure of title to the smaller tract. He further reported an adjustment of interest and taxes, which will be noticed later on.

Upon the coming in of the report, the vendee, defendant, filed a petition alleging surprise in the consideration by the master of certain testimony and praying leave to adduce further testimony in rebuttal thereof. The case was referred back to the master who heard the additional testimony and reported that his first conclusion was in no way changed thereby; whereupon the vice-chancellor, after hearing exceptions to both reports, overruled the exceptions and made the decree now appealed from.

While the same result was reached in both reports, it is not rested on the same grounds in both. In the first report the master relied mainly on the rule propounded by the late Vice-Chancellor Van Fleet in Peeter v. Levy, 26 N. J. Eq. 230, to the effect that compensation will “generally be denied where the party asking it had notice at the time the contract was made, that the vendor was agreeing for more than he could give or convey, and it appears that the vendee has not, in consequence of the contract, placed himself in a situation from which he cannot extricate himself without loss.” The evidence showed clearly to his mind (as it does to ours) that such a situation existed in the case. In the second report the master found the same state of facts, especially! that the vendee knew that as to the fourteen-acre tract vendor had either a defective title or none at all, “and that the same did not enter materially into the transaction, * * * except that Ely was desirous of obtaining from the complainant whatever title or interest the latter possessed therein.” Also, “that the consideration agreed to be paid by Ely referred to the premises sold independently of the fourteen-acre tract, and that the value of the latter did not form part of such consideration.”

We come to the conclusion that the decree below should be affirmed, but prefer to rest our decision upon the second point rather than the first. Beyond noting the later case of White v. Weaver, 68 N. J. Eq. 664, where Vice-Chancellor Eeed refused to follow the rule just quoted from Peeler v. Levy, and his opinion was adopted by this court (at p. \64-6), we express here no opinion on the correctness of the rule quoted above from Peeler v. Levy. As to the other ground taken by the master, the case is quite clear that defendant knew, before signing the contract, of the defective title to the smaller tract; that complainant’s agent offered it to him substantially as a bopns for buying the larger one; and that even its location was not known with any precision. Its value, as appraised by the master, was only $280, or $20 an acre. The purchase price for both tracts stated in the contract was $4,500. We think the evidence fully supports the view taken by the master, that in the dealings between the parties the purchase price was fixed as a valuation of the ninety-one-acre tract and that the other "was disregarded as an element of value. Plainly it would be inequitable to award a deduction under such circumstances, and the court properly decreed that vendor should convey his right, title and interest in the smaller tract and receive the full purchase price with proper allowances for taxes and interest based on defendant’s possession under the contract.

The other1 points argued for a reversal are that it was error to admit testimony touching transactions which occurred prior to execution of the contract, because they were obnoxious to the rule excluding parol evidence tending to vary or contradict the terms of the contract; that no interest should have been charged against appellant for any time prior to the date when it was definitely ascertained in court that vendor’s title to the smaller tract was defective; and that appellant should not have been charged with costs below. As to the evidence objected to> it was clearly competent, not as varying or contradicting the contract but to show the defendant’s knowledge of facts at the time he entered into it, just as he himself would have been entitled to put in similar antecedent transactions to show, let us say, fraud of complainant. And where, as in this case, the vendee himself prays a conveyance of the larger tract with an allowance for the smaller, and stipulates for a reference to ascertain what deduction, “if any,” should be made for the failure of title to the smaller, parol evidence is not only proper but important on the question of the figure cut by the smaller tract in the estimation of the parties, the contract itself being silent on this point.

■ As to interest on the purchase price, defendant went into possession of the large tract under the express stipulation of the contract that he should do so, and an agreement to pay $100 cash, which he paid, $900 in sixty days, and a month later a purchase-money mortgage for the remainder. Under the well recognized rule he was the equitable owner of the land and the. vendor of the purchase money. Haughwout v. Murphy, 22 N. J. Eq. 531, 576. Being in possession, the vendee received the benefit of the land, and, on the other, hand, vendor who did not receive the purchase money is entitled to interest on it from the date when it should have been paid in cash or mortgage. King v. Ruckman, 24 N. J. Eq. 298, 301; Brown v. Norcross, 59 N. J. Eq. 427. Ko point is made of the taxes; naturally a purchaser in possession should pay current taxes. ^

It' is argued that interest should not begin to run until the judicial ascertainment that vendor could not convey complete title; but to this we cannot agree. The hearing and decree in this cause establish the status of the parties as of the time when the contract should have been performed, and that time was the date fixed in the contract, when, as found in the case, both parties knew, that there ivas a failure of title, and that it was immaterial to defendant, and he should have accepted a deed for the first tract and what vendor had to give in relation to the second.

The same reasoning disposes of the claim that costs should run only from the date when the hearing began. We may add that defendant was comfortably in possession, when the bill was filed, of the ninety-one-acre tract upon a payment of $100 only. He could have filed a bill himself and as he wished a deed to the ninety-one-acre tract irrespective of the other, should have done so. Instead he preferred to occupy the land without paying for it and thus forced complainant to his bill. Under such circumstances it is eminently proper that he pay costs.

The decree will be affirmed.

For affirmance — The Chief-Justice, Swayze, Trehchard, Parker, Bergek, Mikturk, Kalisch, Black, White, Heppehpieimer, Williams, Taylor, Gardner, Ackersoh — 14.

For reversal — None.


text:
    William A. Kelly et al., complainants-respondents, v. Barnet Chinich et al., defendants-appellants.
    [Submitted March 24th, 1919.

      Decided June 17th, 1919.]
    The attorney or agent of the grantor or obligor in a deed or written contract may act as depositary of an escrow if his relation to his principal is such that his acting as an escrow is not antagonistic to his principal’s interests, and if the paper was put in his hands for delivery on the performance of a condition not dependent on the volition of his principal.
    On appeal from a decree advised by Yiee-Chancellor Foster, reported in 9.0 N. J. Eq. 602, whose opinion is as follows:
    “The bill in this cause is filed to compel the specific performance of a contract for the purchase of real estate in the village of South Orange. It is entirely a fact case, and the question to be determined is whether the parties ever entered into the contract in question.
    “It appears that some time prior to October 23d, 1917, complainants, through Stern & Cohn, real estate agents, had offered to sell the premises in question to defendants, and' that defendants visited the property with Mr. Cohn and learned from him that the lands were located in South Orange.
    “On October 23d, 1917, the parties and the agents met at the office of Charles F. Herr, counsel for defendants, and had drafts of the contract of sale prepared. When the description of the property was read, one of the defendants raised the question whether there were any building restrictions in force in the village of South Orange that would prevent defendants from building a four-story apartment-house on the lands. They were to pay $9,000 for the land and had told complainants they intended to build thereon an apartment-house that would cost about $90,-000. When the question about the building restrictions was raised one, or both, complainants assured defendants that there were no restrictions in the village that would interfere with the height of their building, and it is at this ¡joint that the controversy between the parties arises.
    “According to complainants’ version, defendants were satisfied with the assurances that complainants gave them that there were no restrictions in the village to interfere with the height of their contemplated building; and the suggestion was made that the parties sign the copies of the contract, and the check for $300 to cover the first payment called for by the contract, and that the copies of the contract and the check should be- left with. Mr. Herr for a day or two in order that defendants could call on the proper authority in South Orange and learn that there were no laws or ordinances limiting the height of buildings that could be erected in the village; that this was accordingly done, and a few days later, when Mr. McLaughlin, the other complainant, called at Mr. Herr’s office and asked for complainants’ copy of the contract and the check, he was informed by Mr. Herr’s clerk that the matter was all ended, and was refused the check, but was given one copy of the contract from which the signatures of the defendants had been torn. The other copy of the contract which all the parties had signed was never returned to complainants, and, so far as the record discloses, it is still in the possession of defendants with the signatures of all the parties thereon intact. Complainants in due time demanded the performance of the contract which defendants refused and then this action was brought.
    “Defendants’ version of what happened when the copies of the contract, arid the cheek were signed differs very materially from that of complainants.
    “They state that when they raised the question of the building restriction they were unwilling to sign the contract until all doubts on the subject were removed but that they were induced to. sign the papers when Judge Herr remarked: 'What’s the use of losing trine, * * * you can sign and leave your check for the first payment with me and I will hold the papers till you tell me to turn them over.’ That Densky, one of the defendants, still hesitated, and finally he said to Judge Herr: ‘All right, 3'ou are my lawyer, and if you keep it till we find out, we will do as you sa3r/ and that Judge Herr then said to defendants: ‘You are to be the sole judges as to whether the papers will be delivered ;’ and defendants claim it was upon this assurance that they signed the papers and check.
    “While Judge Herr corroborates defendants regarding the above particulars, his memory about many other details of the transactions is very poor, and he pleads that he is a very busy man, as the reason for his failure to recall other details of the transaction. Complainants deny that any such statements were made by defendants or Judge Herr in-their hearing.
    “Defendants further claim that the papers were not to be delivered until they were satisfied that there would be no trouble in erecting the building. This complainants also deny.
    “A day or two later defendants called on Mr. Schwarze, the inspector of buildings for the village of South Orange, and informed him of their proposed building plans and asked if there were any restriction that would interfere with the height of their building. They say Mr. Schwarze told them, ‘You can’t build such a building in South Orange;’ that there was not a four-story building in the village; that even if he were to grant them a permit, the trustees of the village could hold a meeting and stop the construction of the building, and he told them when he learned of the estimated cost that they were taking a big chance.
    “Defendants on leaving Schwarze walked through the village as he had suggested and did not see a four-story building. They then returned to Newark and went to Judge Herr’s office and told him they were satisfied they would have trouble in South Orange, and asked for the return of the check, which was given them, and their signatures were torn from the copies of the contract. They did not communicate with complainants or tell them the result of their investigations.
    “Mr. Schwarze was called as a witness by complainants and he positively contradicts the defendants in every essential particular. He testifies that defendants called on him and informed him of their building project and inquired about restrictions limiting its height; that he took the trouble to look up the matter and made inquiries of other officials and assured them that there was nothing to prevent them from erecting their contemplated building; that there were'no restrictions affecting the height and that they could build it as high as they pleased, provided they conformed with the requirements of the building ordinance relating to the character of the materials used in the building. He denies telling defendants the trustees might or could interfere with or stop their building operations.
    “Mr. Schwarze was an exceptionally competent, disinterested witness; he did not know any of the parties; had met defendants only when they called on him in October, ÍSH1?, and had never met either of complainants until the day before the hearing. He impressed me as telling the truth and as being wholly uninformed and indifferent about what any other witness had stated at the hearing.
    “There is another significant circumstance in connection with what occurred in Judge Herr’s office when the papers were signed. Stern & Cohn, the real estate agents, were present, and their version of the matter agrees with complainants’. Stern understood, however, that the papers were not to be delivered until defendants learned that there was no restriction against the height of their contemplated building; while Cohn understood the papers and cheek were to be delivered as soon as defendants learned there was no regulation of the village that would prevent the erection of a four-story building.
    “Cohn was the active man in effecting the sale of the property, and he states that after the check and contracts were signed, complainants took him into one of Judge Herr’s rooms and gave him a written agreement to pay the agents a commission of two and one-half per cent, for effecting the sale. Stern thinks this agreement was given them just before the contract was signed, while Cohn is positive it was given afterwards.
    “If Cohn’s version is correct, it may have been that while he and complainants were in one room and Judge Herr and defendants in another room, some of the remarks it is claimed Judge Herr and defendants made to each other about the papers were actually exchanged, but there is nothing in the proofs to show that such remarks were ever brought to complainants’ attention.

      “In view of all the circumstances, the improbability of complainants, without consideration, tying up property worth $9,-
    000 for months under what, according to defendants’ statements, amounted to a mere option to purchase or not as defendants saw fit, and in view of the fact that complainants must have considered the contract closed when they gave the agents a written agreement to pay them a commission for having effected the sale, and particularly in view of defendants’ deliberate false testimony about the result of their interview with the inspector of buildings, coupled with the fact that defendants have made no effort to show that there is any law or ordinance that would prevent or interfere with the building they claim they intended to erect, I have reached the conclusion that complainants’ version of the matter is the correct and truthful one, and that defendants have merely used the question of a building restriction as a subterfuge, to escape the performance of the contract, possibly because they could not obtain the building loan they desired, or, possibly, because they realized, as Mr. Schwarze told them, they were taking a big chance in erecting such an expensive apartment-house in South Orange. Whatever their reason,
    1 am satisfied defendants have not told the truth and have not acted in good faith towards complainants; they permitted complainants to become liable for the payment of the agents’ commission ; they held complainants’ property for several days under contract, after they had decided not to buy it, and never informed complainants that they had decided not to purchase the property. If they held it under any such conditions as they claim, they do not explain why they did not have this condition written in the contract, together with the other conditions written therein.
    “The proofs convince me that the defendants have deliberately testified falsely about the transaction, and that complainants have told nothing but the truth, and a decree will be advised in accordance with the prayer of the bill.”

      Mr. Philip J. Sohotland, for the appellants.

      Mr. Charles M. Myers and Mr. Milton M. Unger, for the respondents.
   The opinion of the court was delivered by

Parker, J.

The decree in this cause was heretofore ordered affirmed as on a default of appellants, on the authority of Hazard v. Phœnix Woodworking Co., 78 N. J. Eq. 568, for the reason that the cause having been marked to be submitted on briefs, the brief sent in for appellants was not signed by counsel. See 90 N. J. Eq. 602. Thereupon appellants employed counsel, who appeared and prayed a rehearing of the appeal on the principal ground that the failure to present a brief signed by counsel was due to ignorance of the rule enunciated in the Hazard Case above cited. It was not denied that the solicitors who signed the brief were aware that they would not be heard orally; but it was urged that they believed a written brief signed by an attorney-at-law as solicitor would be accepted. Whether with this explanation we should have reheard the appeal if the respondents had objected need not be considered, for as their counsel present on the application for reargument declined to object to a reconsideration on the merits, and a brief, qoroperly signed by counsel, was then duly submitted, we have concluded to take up the appeal on the merits.

Considering it in this aspect, our examination of the'evidence leads to the conclusion that the vice-chancellor correctly decided the questions of fact in the case, and we accordingly accept his findings in that regard.

On "this theory, Mr. Herr, who, as attorney of the defendants, purchasers, had drawn the contract of sale in duplicate, and had attended to its execution by all the parties, was made their depositary until such time as defendants had satisfied themselves by personal inquiry that there were no building restrictions limiting the height of buildings intended to be placed on the property, and if the defendants found there were none, the complainants’ duplicate of the contract, and the check of the defendants for the initial payment, were to be delivered to complainants and not otherwise. The vice-chancellor correctly found as facts that no such restrictions existed and that the purchasers so ascertained. In consequence, the condition was performed; and if Mr. Herr was the lawful depositary of an escrow, complainants were entitled to. the contract for the purpose of enforcing it.

There has been some contrariety in the decisions as to whether the agent or attorney of a party can be a depositary for purposes of escrow; the older cases holding that, according as he is the agent of one party or. the other, there is an absolute delivery, or none at all. 16 Cyc. 574; 11 Encycl. L. (2d ed.) 333, tit. "Escrow;" Ordinary v. Thatcher, 41 N. J. Law 403; Lake v. Weaver, 76 N. J. Eq. 280, 288. The matter has been set at rest in. this state, however, as to an attorney for the grantee or -party asking the delivery of the contract or deed, by the recent case of Bowman v. Brown, 87 N. J. Eq. 47; decided by Vice-Chancellor. Stevens, whose opinion was adopted by this court in affirming the decree. Ibid. 363. The rule there approved and taken from 10 R. C. L. 631, is, that “if the agent’s or 'attorney’s relation to his principal is such that his acting as custodian of the deed or paper is not antagonistic to his principal’s interests and the paper was put in his hands not as a delivery, but as an escrow, such general agent or attorney of the grantee, payee or obligee of an instrument is not incapacitated from acting as depositary of the instrument, but becomes the agent of both parties for the purposes of the escrow.”

There seems to be no reason founded, in logic or good sense, why a similar agent, of a grantor or obligor may not similarly act as depositary; and so the cases seem to hold (16 Gyc. 57/, and citations); and it is settled as a fact in this case that the parties agreed that he should act in such capacity. There was nothing in his employment by defendants that made the escrow by its terms antagonistic to their interests.

It follows that complainants were entitled to the delivery of the contract and cheek. They brought their bill for specific performance upon the contract as an instrument in fact delivered to them, which may have been premature. But this point was not made before the vice-chancellor, apparent^, nor in this court. It is argued in the brief that “there was no delivery,” but the reasoning is simply that there could be no delivery until defendants authorized it; and this has been disposed of above. The technically correct course was to sue to compel delivery of the instrument in the first place. 16 Cyc. 585; Fred v. Fred (Vice-Chancellor Emery), 50 Atl. Rep. 776. But as no point'has been made of this, and under present equity practice'in this state the two rights of action may be joined, and the whole case has been already tried out and there is no question thát if the 'complainants weré entitled to the delivery of the paper they were entitled to enforce it, tire record will be remitted to the court of chancery with directions that upon a suitable amendment of the bill, bringing in Mr. Herr as a party, if necessary, the decree be modified to provide both for delivery and specific performance of the contract.

Neither party is entitled to costs in this court.

For affirmance — The Chief-Justice, Swayze, Trenci-iaed, Parker, Minturn, Kalisoh, Black, White, Heppeni-ieimee, Williams, Taylor, Gardner, Ackebson — 13.

For reversal — Bergen—1.


text:
    David Mayer Brewing Co., complainant-respondent, v. John J. Sheridan and Bridget Sheridan, his wife, defendants-appellants.
    [Submitted July 7th, 1919.
    Decided November 17th, 1919.]
    1. When real estate is purchased by a'wife during coverture from a stranger, and a creditor claims it was paid for wholly or in part by moneys of the husband and in fraud of creditors, such creditor has the burden of proving that fraud.
    2. Evidence examined and held to justify finding that the bulk of moneys deposited by a married woman in. bank and later used as a cash payment on real estate purchased in her name, were derived from a saloon business conducted by her husband in his own name, and were his moneys. '

      Oñ appeal from the court of chancery advised by Vice-Chancellor Lewis.

      Mr. John J. Fallon, for the appellants.

      Mr. Harlan Besson, for the respondents.
   The opinion of the court was delivered by

Parker, J.

The suit is to impress the lien of a judgment recovered by respondent company in 1908 against appellant John J. Sheridan, for $513.17 damages and costs, upon a saloon and residence property known as 500 Eerry street, Hoboken, occupied by said Sheridan as a saloon on the ground floor, and above by himself and his family as a dwelling. Thei legal title to the property stands in the name of the wife, to whom it was conveyed by a third party in 1915. The purchase price was $11,000, on which $6,000 was paid in cash, the remainder being left on mortgage. The cash payment was made with funds drawn from two bank accounts standing in the name of the wife, and the claim of the complainant is that this fund was wholly or mainly composed of money turned over to her by her husband out of current receipts in his saloon business, admittedly eonclucted in his name and by him in fact. If this claim is in accordance with the facts,' it is obvious that pro tanto the property is that of the husband so far as relates to pre-existing creditors, and should therefore be subjected to the complainant’s judgment. The vice-chancellor held that the moneys in bank were those of the husband and found for the complainant.

In deciding the case he held that it. was within the general rule laid down in ¡g!0¡ Gyc. 7iSJ¡., that “in a contest between the creditors of a husband and his wife, if the wife claims ownership during coverture, the burden of proof is on the wife to show that the purchase was for a valuable consideration paid by her out of her separate estate, or by some perspn other than her husband.” But we think this language, as indicsfted by the context and by the decisions cited, relates to cases where the title is derived by the wife through the husband. Such was the situation in all the decisions cited from this state in support of the text: Ruppert v. Hurley, 47 Atl. Rep. 280; Post v. Stiger, 29 N. J. Eq. 554; Cramer v. Reford, 17 N. J. Eq. 367; Adoue v. Spencer, 62 N. J. Eq. 782. But where the title comes directly to the wife from an outside source the burden of proof is the other way, and the creditor must show that the consideration came from him either directly or was money or property settled by him on his wife in hindrance or fraud of creditors. Coyne v. Sayre, 54 N. J. Eq. 702. The question, then, would seem to be whether the evidence supports the decree when the correct rule as to burden of proof i-s applied.

The defendants were married about 1889, and the husband started in business in Jersey City. The wife, according to her testimony, kept three or four boarders at $5 a week. She also kept a small candy and notion store, and testified that this returned a profit of $10 a week. There were one or two' other minor sources of income besides housekeeping money contributed by her husband and which of course was his. In 1904 the husband rented the Hoboken property now in question, moved his family in, and began a saloon business there. He maintained the saloon also in Jersey City until about the time when complainants recovered their judgment, when he gave it up. The wife had ceased storekeeping some time before, and kept no boarders in Hoboken except her daughter and the daughter’s husband at $8 per week.

The Hoboken saloon "was apparently quite successful. Sheridan’s bank account for July, 1908, is in evidence, and shows total deposits of over $1,200 not claimed to come from any other source. It stops abruptly July 28th, 1908; complainant’s judgment was entered November 10th, 1908. The case is silent on financial conditions until January, 1911, except that Sheridan paid his beer account regularly, $60 to $80 a week. According to the brewery collector, the payment was in cash and checks of the railroad company (no doubt employes’ checks cashed at the saloon — a common practice) and he got his money for the beer sometimes from Sheridan, sometimes from the bartender, and sometimes from Mrs. Sheridan, either upstairs in her rooms or downstairs when she was dressed to go out, and perhaps had the money rolled up in a piece of paper.

“Q. She had the money in a piece of paper?.
“A. Yes. She brought that down from upstairs and she paid the beer bill with that, and she had some check in that, perhaps.”

The brewery account, which was put in evidence in supplementary proceedings and seems to be treated as part of the case, show's one hxxndred thirty-two half barrels of beer sold Sheridan ixx October, 1912, and in June, 1915, up to the 25th, one hundred t-wenty-five half barrels. In that month he had paid $437.79 and still ow^ed $178.25, a total of $616.04. One hundred thirty-two half barrels a month make about four and one-half per day, including Sundays; and this seems to indicate a business of much activity and probable profit.' In May, 1915, the brewery loaned, withoxxt secxxrit}r, $1,000 on a note signed by John J. Sheridan to the order of the brewing company and endorsed by Bridget. The check vras payable to the order of John J. Sheridan. The note wras paid off at the, rate of $100 a month. Defendants claimed that this loan was specifically made to the wife, but at least the documents indicate the coxxtrary.

From 1908 the husband kept no bank account; but beginning ixx Janxxary, 1913, the wife has had'first one, and then two. An examination of these shows that she deposited in one or the other, qxxfte regularly, often every week, sums varying from $100 to $300, amounting in 1911 to $1,400; in 1912 to $2,300; in 1913 to $2,296; in 1914, up to September, $700; in all, $6,696. In Kovember, 1914, $2,600 was drawn out of one bank and $3,400 from the other, which make the $6,000 cash paid on the' property's The brewery loan appears as a deposit May 20th, 1915, and a draft May 28th.

In September, 1912, she purchased real 'estate at Keansburg for $1,500, $1,200' of which appears to have been drawn from the savings bank September 6th.

When it is considered that Mrs. Sheridan was depositing in bank an average of $200 per month for two years and $100 a month for a year and a half in addition, it is legitimate to ask where she obtained so much money, and if lier circumstances and ■station in life do not afford a reasonable answer, and her own account of it does not commend itself as satisfactory, the inference is obvious that some one gave it, or most of it, to her. Pier account is in our judgment quite unsatisfactory and sufficient in itself to cast suspicion on her ownership. The proceeds of-the little store, and of keeping-boarders in her early married life are unimportant and remote. She claims that she set up her brother Timothy in the saloon business, and let him have $1,400; this was while she was keeping her little -store. His health 'failed and he finally died, and she took back the saloon and resold it to. another brother for $2,680, represented entirely by notes. He made a failure of it also> as claimed, and testified that he simply surrendered it back to her, and yet later began to pay the notes, which were of $50 each, and the last one was paid, as claimed, some time in 1915. The evidence on this phase of the case is most unsatisfactory; but if accepted leaves some $4,000 of the bank deposits to be otherwise accounted for. There are only two deposits of $50 in the bank accounts, one on March- 31st, 1913, and one on November 5th, 1914, so that unless this brother paid two or four at a time we must-infer that Mrs. Sheridan added $50 from some other source to make a deposit of $100 and most of them are of that amount.

It is unnecessary to multiply details; taking the evidence a-s a whole, the only reasonable conclusion is that Mrs. Sheridan was putting away money which some one was entrusting to her for that purpose. This conclusion reached, the whole -situation points to her husband as that person. No one else is suggested or imaginable. . He was doing a profitable business; he kept no bank account, no books of account; he -seemed to be somewhat loose in business methods; she was obviously 'thrifty and saving; and he had a judgment against him for beer which.he testified caused his customers to leave him and made him close the Jersey City saloon; a state of things not calculated to impel him to pay the judgment. His wife evidently received the weekly surplus. Sometimes she paid the beer bill, as we have seen; but the profits she put away in bank. Leaving the general burden of proof on complainant, we conclude that it has been satisfactorily shown that the bulk of the bank deposits consisted of money derived from the saloon business, and that the cash payment on the saloon property was made therefrom. The weekly board she received from her daughter and son-in-law — ■ eight dollars — plus what her husband gave her for housekeeping, twelve dollars, allows of little margin after payment of food and clothing. There was an item of garage rent, $7 a month. The total per annum is insignificant.

Allowing the wife $2,680 of the fund as proceeds of sale of her saloon, she seems entitled, as of the date of purchasing 500 Ferry street, to no more. Savings from the housekeeping money and board of the daughter and her husband belong normally to Sheridan. Garretson v. Appleton, 58 N. J. Law 386. If the purchase be considered as hers, made in part with his money, the alleged renting by her to him and his payment of rent to her are at least colorable, and on that basis his. creditors are entitled to look to an increment of his equity in the property by way of interest. For present purposes it is enough to say that he possesses an equity therein amply sufficient to satisfy complainant's claim. The result reached by the vice-chancellor, i. e., that the land is subject to the lien of. complainant below, is generally correct, at least to the extent of the proportionate interest represented by the husband's money paid on account of the purchase price. The decree, however, is not correct. It directs Bridget Sheridan to pay the complainant's claim with interest and costs, and costs of the supplementary proceedings, and a counsel fee; and that in default of such payment an execution issue against the premises in question. We do not think the costs of the supplementary proceedings are recoverable in this action; the statute provides that they shall be paid out of property recovered by the statutory receiver. Comp. Stat. p. 2252 § 26. More important) is the form of the decree. It is erroneous to direct Mrs. Sheridan to pay her husband's debt. The proper course, after adjudging the amount of money belonging to the husband that went into the property, is to declare the complainant's judgment, with interest and the costs of the chancery suit, a lien on the property not to exceed the ascertained interest of the husband therein, namely, $4,000 and interest from the date of purchase, and that in default of payment the property be sold to pay such claim. To this extent the decree should be modified; in other respects it is affirmed.

For affirmance — The ■ Chief-Justice, Swayze, Trenchard, Parker, Bergen,’ Minturn, Kalisch, Black, White, HepPENHEIMER, WILLIAMS, TAYLOR, GARDNER-13.

For reversal — None.


text:
    William R. Ward, a lunatic, by guardians, complainant-appellant, v. Peoples Bank of East Orange, defendant-respondent.
    [Argued June 26th, 1919.
    Decided November 17th, 1919.]
    1. Where a bill prays for answer without oath, such’ answer is not evidence for defendant, but is available to complainant as evidence in his favoi*.
    2. In such .case complainant is entitled to use so much of the answer as makes in his favor without being bound by that part which is against him. ’
    . 3. A bill in equity to redeem a pledge will not lie unless it alleges some other ground of equitable jurisdiction.
    4. Such bill will lie when it. sets up a proper case for account in equity and discovery.
    On appeal from a final decree in chancery, dismissing appellant’s bill of complaint.

      Mr. Walter L. McDermott (Mr. William II. Carey on the brief), for the appellant.

      Mr. Jerome D. Gtedney, for the respondent.
   The opinion of the court was delivered by

Parker, J.

The gravamen of the bill was that complainant while of unsound mind, although not so judicially declared, had dealings with the defendant bank as a depositor and borrower on collateral, and that the bank officials, knowing his mental condition, took advantage of it in their dealings with him; that later a commission appointed under the statute conducted an inquiry into his mental condition and found that he Avas of unsound mind, not only at the time of the inquiry, but from a time antedating most, if not all, of his transactions Avith the bank. It alleged an unsettled state of the accounts between them; that certain collateral had been improperly sold; that the bank refused information to the guardians as to the account, and prayed a discovery and accounting by the bank, and, that if as a result any balance was found in favor of the bank, complainant’s securities should be delivered up on payment of such balance.

The answer' which, as prayed by the bill, was not under oath, denied all knowledge or actual notice of insanity at the time of the dealings; averred that the bank had acted throughout with entire fairness and good faith; that it had always been ready to furnish anjr reasonable statements of the account, and annexed certain schedules purporting to contain the various items of that account. There Avas a general replication in the form^ prescribed by rule of court.

The ease being brought to hearing on bill, answer and proofs before Vice-Chancellor Poster, he directed a dismissal of the bill on the grounds — first, that it Avas incumbent on complainant to show that the bank had actual knowledge of his mental condition at the time of the dealings in question, and on this point no evidence had been presented except the production of the inquisition, and that this was not enough; secondly, that complainant should show that the bank had acted unfairly in the transactions, but that complainant had adduced no proof on that subject, and thirdly, that as there Avas nothing to show that anything Avas due from the bank to complainant, or that he Avas entitled to an accounting, none woirlcl be decreed. The bank seems to have presented no evidence, but to have relied on the record and complainant’s evidence.

It is urged on this appeal that the inquisition and proceedings connected therewith, adjudicating lunacy during a period overreaching the transactions between the parties, at least put the burden of proof on the bank to show actual ignorance of lunacy and fair dealing. See Yauger v. Skinner, 14 N. J. Eq. 389. If the point be well taken, respondent does not adequately answer it by the argument that complainant by relying on the answer as an admission of certain elements in his ease, must accept also statements therein detrimental to his ease. The rule is otherwise. Where a bill prays for answer without oath, such answer is not evidence for the,defendant, but is evidence against him. Symmes v. Strong, 28 N. J. Eq. 131; Reed v. Cumberland Ins. Co., 36 N. J. Eq. 393, 396. And in Hageman v. Brown, 76 N. J. Eq. 126, it was said that the very object of waiving oath to an answer is to have the benefit of admissions therein without entitling defendant to have the answer treated as evidence in his favor.

We find it unnecessary on this appeal to deal with the effect of the inquisition as primai facie proof of defendant’s knowledge of insanity at a prior time, or with the burden, if any, of showing fairness and good faith, as we conclude that the decree should be reversed on other grounds.

The bill alleged, and the answer admitted, various pledges of collateral, loans and other financial dealings between the parties; that some of the collateral had been sold and some still remained in pledge. The prayer was that an account be taken to ascertain and determine the amount owing-, if anything, by complainant to the bank, and that upon payment of the amount so- found due, the defendant might be decreed to surrender the securities, &c. This stamps the suit as one for redemption of a pledge, which rests on the same general rules as one for redemption from a chattel mortgage. Pom. Eq. Jur. (1st ed.) § 1231. One of these rules is, that the pledgor may maintain an equitable action for an account, where the amount due is unsettled, and for redemption on payment on the amount found due. Ibid. § 1230, and cases cited; Rennie v. Deshon, 31 N. J. Eq. 378; Chambers v. Kunzman, 59 N. J. Eq. 433. It is true that a bill to redeem a pledge will not ordinarily lie except upon the allegation of some other ground of equitable jurisdiction, such as account or discovery. 31 Cyc. 860. The defendant seems to have recognized complainant’s right to both of these, by annexing to' the answer what purport to be copies of collateral notes and somewhat lengthy book accounts, which indicate on the face of things a proper case for accounting and for discovery under oath. What the results would have been if this answer had been, under oath, and, consequently, evidence for defendant, need not now be considered. As we have seen, the unsworn answer is available to complainant so far as he accepts its admissions, but not to defendant as to allegations in its own interest disputed by complainant. The replication, on file is a general denial of the truth of the answer. Story Eq. Pl. § 878. As a. consequence, complainant is entitled on the hearing to question the correctness of the alleged account, including the propriety of any sales of his securities made by the bank, and upon ascertainment by the court of the amount, if any, owing by him to the bank on such accounting, arid payment of such amount, which he has tendered by his bill, to have back his pledged securities or such of them as have not been rightfully disposed of and can be restored to him, proper allowance being made in the account for any securities found to have been unlawfully sold and to be not reasonably capable of restoration.

Let the decree dismissing the bill be reversed and the cause reinstated with directions to order an account and discovery as to' matters germane thereto, and further relief appropriate to the results of the accounting.

For affirmance — Black, Williams — 2.

For reversal — The Ci-iiee-Justice, Swayze, Trenohard, Parker, Bergen, Minturn, White, Hepreni-ieimer, Taylor, Gardner — 10.


author: Bergen, J.

text:
    Joseph Giammares and Tony Caffaro, respondents, v. Allemannia Fire Insurance Company et al., appellants.
    [Argued June 18th, 1919.
    Decided November 17th, 1919.]
    1. A written contract will not be reformed in equity because of a mistake, in the absence of fraud, unless it is mutual, that is common to both parties, and each under the same mistake as to its terms.
    2. To reform a writing to meet the alleged intent of one party who avers a mistake, when it accurately expressed the agreement as understood by the other, would be as far from expressing the agreement as before, and injure one party at the cost of precisely an equal wrong to the other, and therefore to warrant a reformation for mistake the demonstration of the mistake must be clear and satisfactory, such as produces a strong conviction of the truth.
    On appeal from a decree in chancery advised by Vice-Chancellor Lane, and reported in 89 N. J. Eq. 460.

      Mr. Freeman Woodbridge, for the respondents,

      Mr. I. Benjamin Glueclcfield, for the appellants.
   The opinion of the court was delivered by

Bergen, J.

The bill of complaint in this cause prays the reformation of a policy of insurance, in aid of an action at law thereon, by the addition of certain agreements or stipulations not contained in the written contract, which it is charged were omitted through a mistake or neglect which was mutual, or fraudulently planned to deceive and mislead the complainants. The vice-chancellor who heard the cause decided that the policy be reformed by noting thereon, as of the date of issue, that the property insured stood on leased ground; that it was subject to a chattel mortgage, and that a .standard mortgagee clause be thereto attached with loss payable to the mortgagee, and also enjoined the defendant from setting up, in the action at law, the defence that the policy was issued without such notations thereon. From this the defendant has appealed. The undisputed facts are that on January 4th, 1917, the defendant issued and delivered to one Antonio Caffaro its policy insuring him ágainst loss, or damage by fire for one year, except as therein provided, to an amount not exceeding $2,350, divided as follows: $1,500 on a store building, $200 on fixtures, and $650 on his stock of goods subject to conditions, inter alia, that the policy should be void if, unless otherwise agreed by endorsement thereon, the subject of the insurance be a building on ground not owned by the insured in fee-simple, or, if it be personal property,’it be, or shall become, encumbered by chattel' mortgage; that the building insured was on ground not owned by the insured, nor was there any endorsement on the policy of an agreement that the policy was issued with that condition known and accepted by the defendant; that February 21st, 1917, Galfaro sold the building and stock to Joseph Giammares, who, in part payment, gave him a chattel mortgage on the building and contents; that the policy was taken to the agent of defendant who> endorsed on it “Ownership is now vested in Joseph Giammares as owner;” that the property was destroyed by fire about a month after the transfer, and, just before the year of limitation expired, a suit at law: was brought by these complainants against the defendant, in which the latter pleaded as a defence that the policy was void, because the land was not owned by the insured, and also that the property was encumbered by a chattel mortgage. It is quite manifest that without a reformation of the policy such n defence would' be good at law, but the decree absolutely destroys that defence. It is quite immaterial whether there was or not a mutual mistake in the issuing of the original policy for that came to an end when the property was transferred to Giammares, and the defendant was no longer bound unless it entered into a new contract with the subsequent purchaser, which it was not bound to do. The assignment of an insurance policy, and the assent of the company thereto, constitute an independent contract with the assignee the same as if the policy had been reissued .to him upon the terms and conditions therein expressed. 14 R. C. L. p. 1007 § 185. And that is manifestly so in a case like the present where it is claimed a different contract was made which included the protection of a chattel mortgage not in existence when the original policy was issued. What complainants claim is. that defendant .agreed to make the -policy good to one who was not an owner of the land, as well as to a chattel mortgagee, and to indemnify them in case of loss by fire. This could not be done by the plain terms of the policy without a notation thereon to that effect. It may be proper to mention that in this case the decree requires the defendant to attach to the policy a standard mortgagee clause, which is quite a different engagement from one agreeing to pay a loss to a mortgagee. The first binds the company regardless of any defence it may have against certain acts of the insured, and the latter only to first pay, out of the loss, if any, the mortgagee’s debt. The prayer of the bill is limited to the latter, nor is there any proof by complainant that the defendant was to execute and attach to the policy a standard mortgagee clause, and it was error to so decree. But the real question presented is whether the proof justifies a reformation of this written agreement upon the ground of mutual mistake. There is no' proof in this case of any fraud which would be a basis for equitable interference, unless a disagreement of the parties as to the proposed contract is such a basis without convincing proof that the bargain was not correctly and truly expressed, which it is not. The right to have reformation prayed for depends upon an agreement, part of which it is alleged was omitted when reduced to- writing, because of a mutual mistake which both admit, or the evidence shows they ought to admit, and it rests, in the last anatysis, upon what the agreement was, and if it be claimed to be different from the writing, the proof ought to be clear and convincing that it was as claimed, but erroneously expressed in the written agreement, through some mutual misunderstanding, or mistake in neglecting to use proper words to express the contract really made. Speaking of the power of the cpurt of equity to reform contractual writings, Vice-Chancellor Van Fleet, in Cummins v. Bulgin, 37 N. J. Eq. 476, correctly stated the rule as follows: "To warrant its exercise, however, the proof in demonstration of .mistake must be clear and satisfactory. Such as produces a strong conviction of its truth. That which is written will not be changed by loose, doubtful, or equivocal evidence.” 3STo question of rescission, upon the ground of a unilateral- mistake, arises in this case for the complainants do not wish a rescission of the contract for without it they co-uld not maintain their action at law. All they pray for is a reformation upon the ground of mutual mistake, which they allege amounted to a fraud, but there is no- proof to sustain the claim of fraud. In Green v. Stone, N. J. Eq. 387, Mr. Jiistice Depue, speaking for this court said, "The doctrine that a contract or deed will not be reformed for mistake, in the absence of fraud or imposition, unless the mistake was mutual, that is, reciprocal and common to both parties, where each) alike was under the same misconception as to the terms of the written instrument; is the settled doctrine of courts of equity,” and he cites with approval Cummins v. Bulgin, supra, and also from the opinion of Chief-Justice Ames, in Diman v. Providence R. R. Co., 5 R. I. 130, a paraphrase of which is that, to reform a writing to- make it accord with the alleged intent of one party who avers a mistake, when it accurately expresses the agreement as understood by the other, would be' just as far from expressing the agreement as before, and injure one party at the cost of precisely an equal wrong to the other. With these well settled principles to apply to the case under review, all that remains for us to decide is whether the complainants have shown by their proofs such a ■situation as justifies the reformation which the vice-chancellor advised. The complainants proved that after the transfer and the giving of the chattel mortgage, their broker took the chattel mortgage, the bill of sale of the personal property, and policy of insurance to the office of defendant’s agent and found there the agent’s stenographer, and notified her that the title of the new owner, Giammares, to the land on which the building stood, was merely a leasehold interest; that Caffaro, the vendor, had taken a chattel mortgage on the building and stock in part payment; had assigned the policy to the mew owner, and desired the defendant company to note its assent thereon, and make the policy read that any loss should be payable to Caffaro as mortgagee by a notation on the policy, and that to this the stenographer made no reply; that subsequently the policy was mailed to the-broker who delivered it to Caffaro; that neither read the policy or examined it to see that the notations were made until long after the fire, when it was discovered that the only notation made was that hereinabove set out, which assented only to change of ownership. There is grave doubt as to the truth of this testimony, for Mr. Burton, an attorney-at-law, testified that he sent the policy by mail to the agent, he having drawn the bill of sale and chattel mortgage. He also testified that the policy was returned to him with the endorsement as to ownership only. But if the broker did all he testifies to, he expressly states that the stenographer did not make any reply, or agree to comply with his request, and aside from any want of authority of the stenographer to bargain for the company, she did not expressly enter into any such agreement. All she did was to note on the policy an assent to the transfer of ownership. The stenographer testified that complainant’s broker did not bring the policy to her, but that it came to the office through Mr. Burton; that she made the endorsement and returned it to Mr. Burton; that she did not know of the chattel mortgage, -and her instructions were not to issue any policy on property subject to a chattel mortgage, and would not have done it if asked to do so. There does not seem to be any proof, of the character required, of any agreement except that expressed in the notation signed by the agent and attached to the policy. There was proof by the complainants that their broker asked for more, but none that it was 'agreed to, and certainly a court of equity will not make a contract for parties by inserting in a written agreement, terms of which there is no proof that the contracting parties agreed to. The notation attached to the policy was brief and explicit, it was taken by complainants and held until after the. destruction of the property by fire without protest, and they knew the policy was void unless the changed condition of the property was noted on the policy. The notation attached could bé read at a glance and plainly disclosed that it did not contain what is now urged was omitted by a mutual mistake. A perusal of the short rider attached to the policy would have disclosed the alleged error. In disposing of this case we have assumed the authority of the stenographer to bind the company and its agent, but that is not to be taken as a determination of that ’ question, for that we do not decide. Here we have a written contract which we are asked, to reform according to the understanding of one party, against the evidence of the other that no such agreement as the complainant avers was ever made. In other words, we are to -make? a contract for the parties without convincing proof of an agreement made but omitted from the writing by mutual mistake.. We do not think that the evidence in this record shows a mutual reciprocal mistake “common to both parties, when each alike was under the same misconception as to the terms of the written instrument,” according to the rule in Green v. Stone, supra. “Courts of equity do not grant the high remedy of reformation upon a probability; nor even upon the mere preponderance of evidence, but only upon a certainty of error.” Pom. Eq. Jur. § 859, cited in Hupsch v. Resch, 45 N. J. Eq. 657; affirmed, 46 N. J. Eq. 609, on the opinion of Vice-Chancellor Pitney in which he said, “that he who asks to have a written instrument reformed must make out a perfectly clear case, free from doubt.” The complainants, having failed to make out a perfectly clear case, free from doubt, the decree in their favor will be reversed and the bill of complaint dismissed..

For affirmance — None.

For reversal — The Chief-Justice, Swayze, Trenuhardv Bergen, Minturn, Kalisch, Black, White, Williams, Taylor, Gardner, Ackerson — 12.


author: Minturn, J.

text:
    Realty Company of New Jersey, appellant, v. M. Loretta Burghardt, respondent.
    [Argued March term, 1919.
    Decided November term, 1919.]
    1. An action to quiet title to real estate, instituted under the provisions of the act of 1870 (Comp. Stat. p. 5899), and prosecuted under the provisions of the Chancery act (Comp. Stat. p. 418; P. L. 1902 p. 512), is cognizable by the court of chancery under that legislation.
    2. T.he acts of 1870 and 1902 being in pari materia -are to be read together, and are a constitutional exercise of legislative .power.
    3. The act of 1902 being generic in character and requirements, and without qualification or limitation, applies to all suits in chancery, comprehended within the provisions of “An act to compel the determination of claims to real estate in cei;tain cases, and to quiet title to the same,” approved March 2d, 1870.
    On appeal frdm a decree of the court of chancery advised by Vice-Chancellor Stevenson and reported in 90 N. J. Eq. 347.

      Messrs. Hartshorne, Insley & Leake, for the complainants.

      Mr. Clarence Linn, for the defendant.
   The opinion of the court was delivered by

Minturn, J.

The substantial inquiry in the case involves the construction to be put upon an act of the legislature entitled "An act to compel the determination of claims to real estate in certain cases, and to quiet the title to the same,” approved March 2d, 1870, in conjunction with sections 10 and 11 of the revision of the Chancery act of 1902. Comp. Stat. p. 413.

The bill was filed to compel specific performance of a contract for the sale of certain land in Jersey City, the title to which the vendee refused to accept upon the ground that the title thereto was not marketable.

The alleged imperfection arose out of the fact that Charles Siedler, a previous owner of the locus in quo, for the purpose of perfecting title thereto, acquired by him to one-half of the original tract, and of which he had been in adverse possession for over twenty years, filed a bill of complaint, in the year 1903, in the court of chancery, to quiet his title to the land thus acquired; alleging, inter alia, that his title was denied and- disputed by a large number of persons, specifically named, and also by Jacob Vreeland, the former owner of the entire tract, “or his heirs, devisees and personal.representatives.”

Due process of publication as required by the statute was effected, after which, upon proof of compliance with the statutory requirements, the chancellor made a final decree adjudging that as to the lands in question, including the locus in quo, the said “Jacob Vreeland, his heirs, devisees and personal representatives have no estate, interest in or encumbrance upon the same, or any part thereof,” and the title of the complainant Siedler thereto was thereby determined, “fixed and settled, and declared to be good.”

The complainant in this suit acquired title to the locus in quo from Siedler. The contention now is, that the proceedings taken to quiet the Siedler title were not warranted or authorized by the legislation to which we have referred, and the title was rejected as unmarketable for that reason.

The contention is based upon the ruling of Vice-Chancellor Stevens in Hill v. Henry, 66 N. J. Eq. 150, decided more than a year subsequent to the decree in the SiecUer Case. The learned vice-chancellor, in. the case referred to, held that the tenth section of the Chancery act of 1902 did not apply to proceedings to quiet title, and doubted arguendo whether the act was constitutional under the due process provision of the federal constitution.

The act of 1870 enables a person in peaceable possession of lands and claiming to own the same “to bring and maintain a suit in chancery to settle the title of said lands, and to clear up all doubts and disputes concerning the same.”

The Chancery act of 1902 provides that—

1 “In all actions hereafter commenced, whenever it shall appear * * * that any person mentioned in said bill or petition or his heirs, devisees or personal representatives are proper parties defendant * * * and that the complainant after diligent and careful inquiry, as in the case of absent defendants has been unable to ascertain the names and residences of such of his heirs, devisees or personal representatives, * * * such action may proceed against such person by name, and his heirs, devisees and personal representatives, as in the case of absent defendants, whose names are known * * *. All such defendants * * * shall thereupon be bound by all orders and decrees in said cause as if they had been duly named and served with process in this state.”

Vice-Chancellor Lane, in 1918, in Silver v. Gattel, 89 N. J. Eq. 402, took a contrary view of this legislation, and held the construction adopted in Hill v. Henry to be against the express language of the legislation, its clear purpose and against the established practice. The chancellor in the case sub judice followed the determination in Hill v. Henry, and dismissed the bill, and from that decree this appeal is taken.

The legal importance of the present inquiry, involving, as it does, the settlement of titles to real estate, the accepted legality of which has been founded and predicated upon the provisions of this legislation, is obviously accentuated by this contrariety of judicial opinion.

The fact that the legislature in 1902 prescribed without limitation a method of procedure in chancery causes, based upon the existing provisions of the act of 1870, would indicate a legislative recognition and adaptation of the earlier legislation to all cases arising in the court of chancery, where the situation to be remedied was as defined in the act of 1870. That act which concedes the right and the remedy, it will be observed, provides no limitation and imposes no qualification as to the form of action upon the right thus conferred.

If the legislature in 1902 intended to impose a limitation as to the character of the parties, or the nature of the right or the character of the remedy involved, we may assume that they would have expressed it in the later legislation. Were there a doubt after a period of over thirty years unquestioned legislative recognition of the provisions of the act of 18,70, as to the general application of its remedial provisions to all cases involving the determination of titles to land, arising in the court of chancery, it is reasonable to assume that instead of specifically providing in the act of 1902 for the general application of the statutory provision “in all cases,” the legislature would-have qualified and limited the application of the existing legislation which conferred the right and the remedy.

The statutes being in pari materia will be read together, thus constituting a comprehensive legislative scheme expressive of the legislative intent. 1 Kent Com. 185; 1 Cyc. 491, and cases.

Where, as in the case at bar, the language is plain, generic and unambiguous, there is no room for judicial construction. United States v. Fisher, 2 Cranch 358; Thornley v. United States, 113 U. S. 310; Gillard v. Manufacturers Co., 107 Atl. Rep. 448.

The act of 1902 has been subjected to the scrutiny of the court in a partition suit, and was upheld in Cona v. Henry Hudson Co., 86 N. J. Law 154.

The learned chancellor, writing the opinion for this court in that cáse, relied upon the reasoning expressed in United States v. Fox, 94 U. S. 315, and Arndt v. Griggs, 134 U. S. 316, where the procedural distinction of cases in rem and quasi in rem is fully discussed and emphasized. Since those deliverances the supreme court of the United States has had substantially the question sub judhce presented to it in American Land Co. v. Zeiss, 219 U. S. 47, in which the California statute involved, was enacted to validate title to real estate, resulting from the loss of public records, consequent upon the earthquake and conflagration in San Erancisco.

The state court had affirmed its validity in Title v. Document Rest. Co., 150 Cal. 287. That act provided for the issuance of process to “all persons claiming any interest in or lien upon the real property, or any part thereof.”

The federal court held the statute valid to bar any persons defaulting and failing to answer, declaring in the opinion that “undisclosed and unknown claimants are to say the least, as dangerous to the stability of title as other classes.”

This court, in Jersey City v. Lembeck, 31 N. J. Eq. 255, recognized the validity of the act of 1870, as a measure which resulted in “remedying an inequity;” and Vice-Chancellor Van Fleet, in Southmays v. Elizabeth, 29 N. J. Eq. 203, and Chancellor Runyon, in Holmes v. Chester, 26 N. J. Eq. 79, recognized its practical utility and legality, the latter remarking that “the statute is remedial and highly beneficial. It should be construed liberally.”

That the legislature of 1902, with this remedial act of 1870, and the adjudications construing it 'before it, intended to apply its provisions to all actions in the court of chancery, designed to determine, the validity of titles to real estate, is evidenced by the generic comprehensiveness of the language employed in the latter act, which can leave no reasonable doubt that such was the legislative purpose.

The decree of the court of chancery will therefore be reversed.

For affirmance — The Chief-Justice, Swayze, Trenchard, Parker, Kalisci-i, Black — 6.

For reversal — Bergen, Minturn, White, Heppeni-ieimer, Williams, Taylor. Gardner — 7.