author: Grieein, V. C.

text:
    Lillie M. Brewster v. Albertine A. Entz et al.
    [Submitted June 10th, 1915.
    Decided November 10th, 1915.]
    1. In a suit to obtain a decree that an assignment purporting to assign certain bonds and mortgages is a forgery, and to compel the defendant to restore them to the complainant, evidence Held, to show (1) that the complainant’s signature to the assignment is a forgery, and (2) that the complainant, not being chargeable with negligence, should not be estopped from asserting that the assignment is a forgery, and that the defendant would be decreed to restore the bonds and mortgages to the complainant.
    2. The attorney-at-law who committed the forgery, and who was the witness to the signature of the assignment and! signed the certificate of acknowledgment, was not the agent of the complainant with power to execute the assignment of mortgages in question, whatever agency existed applying only to the collecting of interest.

      Mr. George W. Betts, Jr., and Mr. Rufus W. Sprague (of the New York bar), for the complainant.

      Mr. Cornelius Doremus, for the defendants.
   Grieein, V. C.

The. bill in this cause is filed to have ifi decreed that an assignment dated December 23d, 1910, apparently, acknowledged April 21st, 19 , and recorded dime 28th, 1911, purporting to assign two bonds and mortgages is a forgery, and that the defendant Albertine A. Entz should restore the bonds and mortgages to the complainant.

The forgery is said to be the act of one Paul Walton (now deceased), an attorney-at-law, who was the witness to the signature and signed the certificate of acknowledgment.

Walton was the attorney of the husband of the complainant, who died in 1903, drew his will, attended to its probate, and thereafter secured investments for the complainant, collected interest and remitted the same to complainant. She did not entrust him with the keeping of the securities. These she retained and kept, in her safe deposit box.

In November, 1905, Walton secured an investment of $2,500 in a bond and mortgage made by Richard G-. Korkemas, Salih Dabdoub and others to the complainant, which bond and mortgage are dated November .16th, 1905, and the mortgage was recorded December 5th,, 1905.

Another investment of $1,500 was procured by Walton in a bond and mortgage dated June 13th, 1908, made by Salih Dabdoub and others, which mortgage was recorded on September 9th, 1908.

The foregoing bonds and mortgages, shortly after recording, were delivered by Walton to complainant, in whose possession they remained until the spring of 1910, and are the bonds and mortgages mentioned in the assignment attacked.

In the spring of 1910, complainant called on Walton regarding policies of insurance on the mortgaged property. He suggested that she bring all her papers, bonds and mortgages to him to examine, that he would look over them, ascertain what were missing and hand them back in a day or two. She, on the same day, took her papers from her safe deposit box and delivered them to him. She then left the city, and was gone until after July 4th. Within a week after her return she telephoned Walton’s office and was informed that he was not there. About that time Walton suffered a serious injury, and until his death, which occurred August 11th, 1914, remained continuously at his club, and did not again return to his office.

On December 11th, 1911, she received, by messenger from Walton, what purported to be the two bonds and mortgages above mentioned, and,, after an examination, placed them in her safe deposit box, where they remained until about December, 1913.

These bonds and mortgages were complete in every detail, containing signatures of parties and witnesses; and the mortgages had endorsed on them the receipt of the recording officer. They were copies of the original bonds and mortgages, but were delivered to the complainant as the originals.

The names of the mortgagors were strange to the- English language; their signatures to the original bonds and mortgages were labored; and in the forged copies an effort was made to •imitate the signatures of the parties, witnesses, officers who took the acknowledgment and the recording officers, to deceive the complainant.

From the date complainant delivered the bonds and mortgages to Walton, in the spring of 1910, until about March, 1913, she received the interest on them regularly from Walton, and on November 19th, 1912 (more than a year after the forged assignment was recorded), he sent her the check of one Wasserman (who was then the owner of one of the parcels covered by one of the mortgages) for $75, drawn to the order of Walton, and by him endorsed to the complainant, in payment of the interest due on the mortgage, which check was given by Wasserman for the purpose.of paying this interest.

In September, 1913, interest on some of the mortgages being overdue, complainant wrote Walton regarding it. Towards tire end of 1913 she says she grew suspicious, because he became slow in his payments of interest and other moneys. There was then $75 due for interest from March -to September. She accordingly asked the opinion of a lawyer, but did not retain one until about January, 1914. In September, 1914, the month following Walton’s .death, she learned of the forgeries and filed her bill October 5 th, 1914.

The defendant purchased the bonds and mortgages, received the genuine ones, and the forged assignment from Walton, to whom she delivered her check to his order a,s attorney, and notified the owners of the mortgaged premises of the assignment. Before making the purchase she inquired into the value of the premises, and made the usual investigation in such cases, but did not communicate with the complainant.

While the assignment, which is in typewriting, is dated December 23d, 1910, it was not actually typed until some time after January, 1911. This is made perfectly clear by tire testimony of one Ivnappen, who typed the assignment and made copies of the bonds and mortgages by filling in the spaces in the printed forms.

The defendant primarily denies that the assignment was forged; and, secondarily, if forged, insists that complainant was negligent, which negligence enabled her attorney to perpetrate the fraud, and, therefore, she should be estopped from setting up the forgery.

First, is the instrument forged?

In this case there is the usual conflicting testimony of professional experts—one asserting that the instrument was forged, the other that it was not—both being equally positive. This testimony, standing alone, would leave the fact of forgery in balance. A further conflict arises in tire-testimony of bank tellers. So, that it is important to look to other circumstances in support of these various contentions. That tire complainant did not knowingly assign these mortgages is perfectly-apparent. The circumstances show that Mr. Walton perpetrated a great fraud. He deceived the complainant when he returned these copies of the bonds and mortgages six months after the forged assignment was recorded, and continued paying her interest for almost two years after the assignment was recorded; and, to further carry out the deceit, sent to her, in payment of the interest, on one of the mortgages, the check of the owner of the mortgaged premises.

If this instrument was not forged, it is inconceivable that Mr. Walton should resort to such deceitful practices, if, as a matter of fact, the complainant had executed the assignment; unless he had tricked her into- signing the instrument, she believing it was something else.

Walton resided in a bachelors’ club, where ladies were not admitted. The complainant did not see Walton after the delivery of the bonds and mortgages to him in the spring of 1910. She executed no papers in his presence, nor did she execute or sign any papers coming from him. In fact, there is not the slightest shadow of evidence in the case to raise the suspicion that she was tricked into signing this instrument in the belief that it was something else. ' * -

I am, therefore, of opinion that the signature to the assignment is not the signature of the complainant, but is a forgery.

The next question.to be considered is that of estoppel arising from the alleged negligence on the part of the complainant. The complainant trusted Walton, who, so far as there is any testimony in the case, was a respected attorney-at-law, whose integrity was not even suspected. She did not deposit the bonds and mortgages with him to be held for her; they were placed in his hands for a certain purpose, with the understanding that they were to be delivered within a day or two. She went to the shore for a short period, and on her return sought to- procure her papers, but at that time, apparently, Walton had sustained this injury which kept him continuously at his club. While there, she endeavored to procure from him the papers, and did, as she understood, actually receive them on December 11th, 1911, when Walton sent the spurious bonds and mortgages to her in a package. They had been out of her possession for eighteen months; there was nothing in the instruments so returned that could excite her suspicion that what she received were not the genuine bonds and mortgages—especially so, when coming from' a man in whom she had confidence. Suspicion was further removed by the fact that she had received her interest regularly from Walton until September, 1913, when the last six months’ interest fell due, and, remaining unpaid until December, her suspicions being aroused, she spoke to a lawyer, whom1 she retained in January, 1914. Wha,t the lawyer did does not appear. But the fact remains that the existence of this assignment was not discovered until September, 1914, after the death of Walton.

The conduct of the complainant in the transaction, from the spring of 1910, when she delivered the bonds and mortgages to Walton, down to September, 1914, when she discovered the fraud, was that of a normal, ordinary person having confidence in an attorney-at-law of good repute. I fail to' see anything in the case which would justify an assumption that the attorney was a criminal, or that she was -in any danger of losing her securities, because, during all this period, she rested in the belief that these bonds and mortgages were lying in her safe deposit box. If the conduct of the complainant can be said to have been negligent, it might, with equal force, be said that the defendant was also negligent in this, that she likewise accepted from the supposed reputable attorney bonds and mortgages with an assignment supposed to have been executed by his client, and gave him a cheek for the same, without first seeking out the complainant and asking her if she had executed the assignment. But, as I see it, neither parto was negligent, in the eye of the law. Both pursued the ordinary methods of prudent persons in such cases.

I ha.ve, therefore, reached the conclusion that Walton was not the agent of the complainant with power to execute the assignment of mortgages in question. Whatever agency existed applied only to the collecting of interest. His act in signing the complainant’s name to the instrument was criminal; and the complainant, not being chargeable with negligence, should not be estopped from asserting that the assignment is a forgery. Lawson v. Nicholson, 52 N. J. Eq. 821; Heyder v. Excelsior Building and Loan Association, 42 N. J. Eq. 403.

This case, in many respects, is quite similar to Lawson v. Nicholson, supra.There, a lady gave to the scrivener, who drew the bond and mortgage in question, a large bundle of papers, including this bond and mortgage, wrapped in strong paper, tied and sealed, to be placed in his fireproof. The scrivener broke open the package, took from it the bond and mortgage, endorsed on the .mortgage a receipt for cancellation (in doing which he committed a criminal act), gave it to the owner of the land from whom he received payment of the principal, and the mortgage was canceled of record. Thereafter the scrivener absconded. The owner had as little knowledge of the extent of the scrivener’s agency as the defendant here had of Walton’s. The court decreed that the bond and mortgage be revived and reinstated.

In one respect this case is much stronger than Lawson v. Nicholson, supra, in this, that while it is a rather common practice a-t the bar for attomeys-at-law having the possession of a bond and mortgage to collect the interest, receive the principal and endorse the mortgage for cancellation (which payment of the principal the mortgagor makes with some risk, as pointed out by Mr. Justice Parker in Steadman v. Foster, 83 N. J. Eq. 641), there is no known practice of such attorneys signing their clients’ names to assignments of mortgages.

In Heyder v. Excelsior Building and Loan Association, supra, where a bill was filed to set aside a cancellation of a mortgage, Mr. Justice Knapp, speaking for the court of errors and appeals, said:

“Cancellation of a mortgage on the record is only prima facie evidence of its discharge, and it is left to the owner making the allegation to prove the canceling to have been done by fraud, accident or mistake. Such proof being made, the mortgage will be established, even against such subsequent purchasers or mortgagees without notice. Trenton Banking Co. v. Woodruff, 2 N. J. Eq. 117; Harrison v. New Jersey Railroad Co., 19 N. J. Eq. 488.

“Between a mortgagee, whose mortgage has been discharged of record, solely through the unauthorized act of another party, and a purchaser wlm buys the title in the belief, induced by such cancellation, that the mortgage is satisfied and discharged, the equities are balanced, and the rights, in the order of time, must prevail. The lien of,the mortgage must remain, despite the apparent discharge.”

In that case it appeared that the complainant made a loan to its attorney, and took a bond and mortgage for the same, which mortgage was recorded. The attorney endorsed a receipt fox-cancellation upon, the mortgage and the same was canceled of record. The record of the discharge was, genex-al in form. It contained no matter which made it the duty of the purchaser to institute a personal inquiry of the mortgagee. The mortgage was not stolen, nor was there any crime committed in procuring possession of it. The infex-en.ee from the testimony was that it had remained in the possession of the mortgagor from the date of record. The court found that the officers of the association were culpably negligent in allowing the mortgage to remain in the custody of the mortgagor, and accordingly sustained the cancellation.

The distinction between this and the last-mentioned ease is that here the defendant innocently acquired the possession of these bonds and mortgages through the criminal act of Walton, .and the complainant was not negligent.

I will advise a decree setting aside the assignment, and directing a return of the bonds and mortgages to the complainant.


source: Caselaw Access Project

author: Grieein, Y. C.

license: Public Domain

text:
    William Yucker et al. v. Arthur Morris et al.
    [Submitted November 14th, 1915.
    Decided December 18th, 1915.]
    1. Upon a dispute between rival claimants to a share of the proceeds of sale of lands in the hands of a special master in a partition suit, which he was directed to pay to one “T. Edward Morris,” a tenant in common, one of the defendants therein, one of the claimants claimed under an order drawn by “Thomas E. Morris” upon the special master, and the other, under a judgment against “Edward Morris.” It was stipulated between the claimants “that ‘T. Edward Morris, defendant herein (i. e., the judgment debtor), is the same person against whom Louisa M. Tournade (i. e., the judgment creditor), obtained judgment * * * that said Morris is sometimes known as T. Edward Morris, sometimes as Thomas E. Morris, sometimes as Eddie Morris, sometimes as Edward Morris.’ ”—Held, that inasmuch as the stipulation does not state what Christian name was given Morris at birth or baptism, and in the absence of the admission in the stipulation that he was known as “Thomas E.” (thus indicating in full his Christian name), and treating the case as though his proper name is “T. Edward Morris,” the claimant under the judgment is without proof that the judgment was against the defendant in his proper name, and accordingly the decree should be in favor of the other claimant under the order drawn upon the special master.
    2. The law knows of one Christian name only.
    3. It must be stated with certainty who are the parties to the suit, and actions to be properly brought must be commenced and prosecuted in the proper Christian and surnames of the parties.

      Mr. Leon Abbett, for the executors of Louisa M. Tournade.

      Mr. George J. McLwan, for the Highland Trust Company.
   Grieein, Y. C.

The dispute in this case is between two defendants touching the right to funds in court allotted to T. Edward Morris, a tenant in common, defendant in the above suit for partition.

'The Highland Trust Company claims under an order drawn by Thomas E. Morris upon the special master, in whose hands the funds then were, signed June 13th, 1914, delivered to the trust compan3r, and shortly thereafter delivered to the special master.

The executors found their claim upon a judgment obtained by their testatrix on May 12th, 1914, in the Hoboken district court (as appears by the transcript of the judgment as docketed) against “Edward Morris” (Edward being a middle and not the Christian name), and afterwards, on May 14th, 1914, docketed in the court of common pleas of Hudson county.

It is stipulated in the agreed state of facts

“That T. Edward Morris, defendant herein, is the same person against whom said Louisa M. Tournade obtained judgment in the district court of the city of Hoboken as hereinafter set forth. That said Morris is sometimes known as T. Edward Morris, sometimes as Thomas E. Morris, sometimes as Eddie Morris, sometimes as Edward Morris.”

From these facts it is argued by the executors that the judgment is good as against Thomas E. Morris, or T. Edward Morris, and therefore is good against the world. The record in the cause is also stipulated into the agreed state of facts.

In Dilts v. Kinney, 15 N. J. Lam 130, where the plaintiff sued as Margaret Kinney, Chief Justice Hornblower said: “It was sufficient if she was known as well by the name of Margaret Kinney as of Margaret N. Kinney, or Margaret Ann Kinney. The law knows only of one Christian name. Co. Litt. 3 a; Evans v. King, Willes 554; Franklin v. Talmadge, 5 Johns. 84. This is not like the case of variance between the writ and declaration as in Bowen v. Mulford, 8 N. J. Eq. 751, and Wilber v. Widner, 1 Wend. 55.”

In Elberson v. Richards, 42 N. J. Law 69, where the attachment was taken out against Mrs. J. W. Elbertson, Mr. Justice Scudder said: “It must be stated with certainty who are the parties to the suit, and actions to be properly brought must be commenced and prosecuted in the proper Christian and surnames of the parties,” citing 1 Chit. Pl. 256. He excepted from this rule actions on promissory notes and similar instruments excepted by the statute.

In Schaffer v. Levenson Wrecking Co., 82 N. J. Law 61, Mr. Justice Trenchard said: “By the common law, since the time of the Norman conquest, a legal name has consisted of one Christian or given name, and of one surname, pati-onymie, or family name. The surname, or family name, of a person is that which is derived from the common name of his parents, or is borne by him in common with other members of his family. The Christian name is that which is given one after his birth, or at baptism, or-is afterwards assumed by him in'addition to his family name,” and it appearing that the uncontradicted testiixxony was that the plaintiff's lxanxe was II. Allen Schaffer, the court held that the suit was properly instituted in that name.

Other cases dealing with the question are Seeley v. O’Schenck and Denise, 2 N. J. Law 71; Crandall v. Denny & Co., 2 N. J. Law 137; McCreedy v. Vanneman, 3 N. J. Law 127, *870; Burns v. Hall, 3 N. J. Law 539, *984; Kearsley v. Gibbs, 44 N. J. Law 169; Leon v. Dittman Powder Co., 42 N. J. Load 540; McGrew v. Steiner, 77 N. J. Law 377.

The stipulation does not state what Christian name was given Morris at birth or baptism. It is perfectly clear that it was not Edward. The fact that he was known as Thomas E. and Eddie indicates that the prefix “T” was intended for Thomas, and that his full name is Thomas Edward Morris. But following a not uncommon practice, he abbx-eviated his Christian name to its initial “T” and used the middle name in full, thus adopting fox-general use the name T. Edward Morris. If reference be made to the ixxasteNs report, it will appear from the proofs taken by the master and annexed to the report that the xxame is Thomas Edward Morris; and consulting the searches of the records filed in the cause, the petition for letters of administration disclose his name to be Thomas E. Morris; and in a recorded mortgage made to Mary Goelz, a defendant, he is described as Thomas E. Morris.

In'the absence of the adnxissions in the stipulation that he was known as Thomas E. (thus indicating in full his Christian name), and treating the case as though his proper name is T. ■ Edward Morris, so as to bring it within the rule laid down in the Schaffer Case, supra, lie is still short of proof that the judgment was against the defendant in his proper name.

Following the authorities above cited, I am inclined to the view that a court of law, on proceedings properly instituted, would set aside the judgment. But the judgment stands of record in full force and effect against Edward Morris, and the executors ask that it be given the effect of a judgment against Thomas E. Morris, or T. Edward Morris, as against an innocent purchaser. By our statute, a judgment in the district court may be docketed in the court of common pleas, and when so docketed, becomes a lien on land^, and the clerk is required to note the judgment in a proper index. The object of this is to give notice to the world of the existence of the judgment and of its lien. Considering the law above set forth, would it be negligence on the part of a searcher to treat a judgment against Edward Morris as against Thomas E. Morris or T. Edward Morris ? I think not. ■ If the judgment, on a proper application, would be set aside in a court of law, by reason of the absence of the Christian name^ or proper name of the party defendant, why should a searcher go farther when he finds that the Christian or proper name of the defendant in the judgment is not the Christian or proper name of the person against whom he is searching ? To hold otherwise would greatly increase the expense in, and render more hazardous, land transactions, and be contrary to the existing law.

The decree will be for the trust company.

The wife of Thomas also transferred her interest to the trust company, and, as the allotment on the share of Thomas is insufficient to pay the trust company’s claim, with interest and costs, it is unnecessary to pass upon the respective rights of the executors and Morris under the judgment, as between themselves.


author: Backes, Vice-Ordinary.

text:
    Lawyers Title and Trust Company, executor, appellant, v. The Comptroller of the Treasury of the State of New Jersey, respondent.
    [Submitted November 3d, 1915.
    Decided November 8th, 1915.]
    1. Property in this state specifically devised or bequeathed by a nonresident decedent cannot be included in the appraisal in assessing the ratio tax imposed by tbe Transfer of Property Tax act of 1909, as amended in 1914, on tbe estates of non-resident decedents, such property being excluded by the last paragraph of section 12 of the act.

      2. A successful appellant from an assessment on the transfer of property is not entitled to costs.

      Mr. Frcmh L. Holt, for the appellant.

      Mr. Herbert W. Boggs, assistant attorney-general, for the respondent.
   Backes, Vice-Ordinary.

This is an appeal from an assessment by the comptroller of the treasury, levied on property in this state, of a non-resident decedent under the Transfer of Property Tax act of 1909 (P. L. 1909 p. 325), as amended in 1914 (P. L. 1911/. p. 267). By the second subdivision of section 1 of the act, as amended, a tax is imposed upon the transfer of property

“When the transfer is by will or intestate law,'of real property within this state, or of goods, wares and merchandise within this state, or of shares of stock of corporations of this state, or of national banking associations located in this state, and the decedent was a non-resident of the state at the time of his death.”

By the fourth subdivision, property thus transferred to a sister, to the amount of $5,000, is exempt from taxation, and all in excess of that amount, up to $50,000, is subject to a tax at the rate of two per cent. The last clause of section 12 enacts that—

“A tax shall be assessed on'.the transfer of property made subject to tax as aforesaid, in this state of a non-resident decedent if all or any parf of the estate of such decedent, wherever situated, shall pass to persons or corporations taxable under this act, which tax shall bear the same ratio to the entire tax which the said estate would have been subject to under this act if such non-resident decedent'had been a resident of this state, and all his property, real and personal, had been located within this state, as such taxable property within this state hears to the entire estate, wherever situated; provided, that nothing in this clause contained shall apply to any specific hequest or devise of any property in this state.”

The decedent, Emma B. Winter, was a resident of the State of New York at the time of her death in February, 1915. The onty property in the State of New Jersey which she owned was a house and lot and an unimproved parcel of land in the borough of Lavallette, in Ocean county, and the furniture contained in the house which, by the twelfth clause of her will, she specifically devised to her sister Clara H. Crosier. This property was appraised at $4,027. The total value of the estate which passed to this sister under the will, including the New Jersey property, was fixed by the comptroller at $11,115.06. From this aggregate amount he deducted $5,000, representing the statutory exemption allowed to a sister, leaving a balance of $6,115.06, upon which a tax at the rate of two per cent, amounts to $122.30. He then determined the proportion, which the value of the New Jersey property bore to the value of the entire estate, to be three hundred and sixty-two thousandths, and this proportion of the above-mentioned sum of $122.30, amounting to $44.27, he found to be the tax and levied it accordingly. From this assessment the appeal is taken.

The comptroller followed the usual practice which obtains in assessing property within this state of non-resident decedents, subject to tax, as outlined by the last paragraph of section 12, but he failed to observe or heed the proviso thereto, which clearly and distinctly says that specific bequests or devises of any property in this state shall not be included in the computation; the practical effect of which is to exempt from taxation, to the amount limited by the' statute, all property thus transferred.

That portion of the statute above quoted, under which the comptroller presumed to make the assessment, simply declared and defined the prevailing rule of law and was enacted to emphasize that rule to those who, by manipulation of the assets of estates, might venture to avoid the payment of taxes by applying the property in this state not specifically devised or bequeathed, to the payment of exempt legacies, and the property without the state to the non-exempt, as was attempted in the case of Tilford v. Dickinson, 79 N. J. Law 302. In elucidating the rule, Mr. Justice Eeed, in that case, said: “The theory upon which it rests is that each distributee has an undivided interest in all the assets of an estate, and that no particular portion of such assets passes to any particular distributee. Therefore, when it is ascertained what portion of the whole estate goes to all of the collateral distributees as a class, it. will be presumed that such proportion of the New Jersey property goes to such class of col-laterals as the property in New Jersey bears to the property in New York—it being assumed that equal proportions of the property in both states will be devoted to the payment of collateral distributees.” Although the learned justice was addressing his remarks to intestate’s estates, they are, it seems to me, pertinent to instances of testacy. See, also, Neilson v. Russell, 76 N. J. Law 655.

It is, consequently, obvious that, inasmuch as property in this state specifically devised or bequeathed, could not be utilized in the general distribution of a foreign estate, the legislature, in conformity with its .scheme and in entire harmony with its theory, advisedly excluded from computation property transferred in this maimer. Property thus transferred, 'unless to those in the exempt class, is liable at the maximum rate of five per centum. This was the legislative design when the act of 1909 was formulated, in which those in the exempt class were wholly relieved from taxation. Its operation was modified by the amendment of 1914, limiting the exemption to $5,000, to kindred of the deceased, wherein the provision of the original act relating to the ratio tax wa4 substantially re-enacted.

However, whatever the legislative motive may have been, the mandate of the proviso is unmistakable and, in the absence of all ambiguity, it is the court’s duty to enforce the statutes as they are written.

The appellant claims costs on this appeal, and in support refers to section 17 of the act by which $10,000 was appropriated, and to the act of 1914, chapter 273, and that of 1915, chapter 405, by each of which $90,000 was appropriated to the department of the comptroller for the purpose of carrying out the provisions of the Collateral Inheritance laws. Fees and costs of litigation are creatures of statute (Lehigh Valley Railroad Co. v. McFarland, 44 N. J. Law 674), and as there is no enabling act, they cannot be allowed. «

The assessment will be set aside.


author: Baokes, Vice-Ordinary.

text:
    In the matter of the estate of Aaron B. Atkinson, deceased.
    [Prepared November 13th, 1915.]
    Where the delay in settling an estate is not unusually great, money paid by the executor for his official bond to. a surety company may properly be allowed on the settlement.

      Mr. Michael N. Ghanalis, for the appellant.

      Mr. John II. Hutchinson, for the respondent.
   Baokes, Vice-Ordinary.

I have been informed that an appeal has been taken from the decree which was advised on July 6th last. The matter was before this court on an appeal from a decree of the orphans court of Burlington county, sustaining exceptions to the account of the executor of the deceased. After hearing the arguments of counsel (the record having been considered before the hearing day) it was announced that the decree of the orphans court would be affirmed, except as to the allowance of exception No. 5, which disallowed a fee of $10 paid by the executor upon his official bond, to a surety company. This money was actually laid out, and it seemed to me that although the estate could have been settled earlier, the delay was not so unusually great as to warrant the disallowance.

In all other respects the decree below was affirmed, for the reasons given by the master, in his report to the orphans court, to whom the exceptions were referred.


text:
    In re the last will and testament of Kate Able, deceased.
    [Submitted January 11th, 1916.
    Decided January 13th, 1916.]
    Where testatrix left all her property to her son, with whom she lived, and who stood in a confidential relation toward her, any presumption of undue influence arising therefrom Held overcome by the evidence.
    On appeal from the orphans court of Hunterdon county.

      Mr. Harry J. Able and Mr. H. Burdett Herr, for the appellants.

      Mr. William G. Gebhardt and Mr. Francis J. Blatz, for the appellee.
   Backes, Vice-Ordinary.

This is an appeal from a decree of the' orphans court of Hunterdon county, upon a verdict of a jury denying probate of the last will and testament of Kate Able, deceased. The testatrix was a widow with two married children, a son and daughter. In the later years of her life she lived with her son, and by her will gave to him all of her estate. The daughter filed a caveat, and upon her motion the cause' was certified into the circuit court for a trial before a jury. Before that tribunal the will was contested on the grounds that it was a forgery; that it was not executed according to the statutory requirements; that the testatrix was incompetent, and that the paper was procured by undue influence. A verdict was returned that the .testatrix was of sound and disposing mind, and that the will was duly executed, but that it was the result of undue influence, imposition or fraud exercised upon the testatrix by her son Edwin F. ’Able, and, therefore, was not her last will and testament.

There was no evidence produced at the trial of fraud or imposition and if, besides the proof of confidential relation existing between the mother and son, there was some of “slight additional circumstances” to raise a presumption of undue influenee (Sparks Case, 68 N. J. Eq. 242), the burden cast upon the proponent of rebutting the presumption was fully and satisfactorily discharged, and the jury’s verdict was not warranted. The record disclosed that the testatrix was a woman familiar with business affairs, 'intelligent and firm of mind. She was unable to read or write, except to sign her name; but this evidently was a slight handicap, for it appears that she accumulated a small fortune in running a hotel. ' It is proved beyond peradventure that she was mentally competent to dispose of her estate by last will and testament, and also that she did so volitionally and knowingly and with all of the formality required by law. No undue influence was brought to bear upon her to select the son as the sole object of her bounty—at least, nothing of the kind was shown by admissible testimony. To choose him was her privilege. The exclusion of the daughter was for reasons which she regarded as good and sufficient, and which she seems to have made generally known. Whether they were well founded need not be passed upon. It is enough to say that she had reasonable grounds for believing the circumstances which moved her to disown the daughter, and that these circumstances were not extrinsic to the daughter’s conduct.

The decree will be reversed and the will admitted to probate.


author: Griffin, Vice-Ordinary.

text:
    In the matter of the appeal from the probate of a paper-writing purporting to be the last will and testament of Mary A. Brengel, deceased.
    [Submitted February 24th, 1915.
    Decided April 15th, 1915.]
    1. Undue influence which will vitiate a will must be such as so far to destroj7 the free agency of the testator as to constrain him to do' that which is against his will, or that which he would not have done if he had been left to himself. It must be some species of moral or physical coercion, which, under the conditions in which he was placed, he was unable to resist—no matter from what source it comes or what character it appears in, whether it be in the shape of physical force, threats, importunity, or other species of domination.

      2. U.pon the shifting of' the burden of proof to the proponents upon this subject, and assuming that the burden of proof is imposed upon them, it is necessary in determining whether they have successfully borne this burden that regard be had (1) to the amount of the1 estate at her disposal at the time of executing the will; (2) the natural objects of her bounty; (3) her age, health and ability to resist coercion or importunities which might destroy her free will; (4) her consciousness of the amount of her property and the natural objects of her bounty.
    3. When one possessed of a large estate disposes of it by will, favoring children forming part of his household to the exclusion of .other children equally the natural objects of his bounty, without any reason appearing for such discrimination, and his condition is such that he is susceptible of coercion and is under the influence of the favored children, the inference of undue influence is much stronger than in a case where, at the time of making the will, the estate is so meagre as to hardly warrant a division; therefore the value of this estate at the time the will was made tends in a measure to negative the, inference of undue influence.
    4. Evidence Held to fail to prove either expressly or by justifiable and fair inference from circumstances that influence was in fact exerted, and that it was exerted to dominate and control the will of the testatrix and coerce her to make a testamentary disposition of her property which she would not otherwise have made.

      Mr. Alexander Simpson, for the proponent-appellants.

      Mr. Louis G. Morten and Mr. Clarence Linn, for the caveators-appellees.
   Griffin, Vice-Ordinary.

The appeal in this case calls for a review of the decree of the orphans court of the county of Hudson, adjudging that a paper-writing purporting to be the last will and testament of Mary A. Brengel, deceased, “was the result of undue influence on the part of the proponents.”

The will, after giving to her two daughters Mary Baker and Elizabeth Brengel, her clothing, jewelry and personal apparel, and to each of her children one dollar, gave the residue to her daughters Mary and Elizabeth, and her son Andrew A. Brengel.

On the date of executing the will (September 21st, 1910), and the date of her death (September 5th, 1912), the natural objects of her bounty were her six children, viz., Andrew A., Elizabeth, Mary Baker, Jacob, Adam and Annie Himsel. The caveators are Jacob Brengel and Annie Himsel.

The value of the property at the disposal of the testatrix at the time of the making of her will was not shown in the orphans court. By stipulation entered into in this court, it appears that she owned personal property not exceeding $100 in value—she had no real estate.

Jacob, Adam and Annie were married and lived away from the home of the testatrix for twenty-five years and upwards. Andrew and Elizabeth were unmarried. Mary Baker was then, and still is, a widow. Elizabeth is a deaf mute. Adam, the son who did not contest, resided in California. The others all resided in Hudson county.

The household of the testatrix for upwards of twenty-five years consisted of the testatrix, her son Andrew and her daughters Elizabeth and Mary. During all this period the three beneficiaries worked and used their earnings largely for- the support of the household. The only other source of income was the sum of about $300 contributed annually by Mrs. Givernaud to- the testratrix for coal and other purposes. Andrew estimates that during the period they lived together he and his sister spent upwards of $3,000 for taxes, insurance, repairs, &c. During this period the other children did not contribute to the support of their mother, because they say she would not take anything from them. It does appear, however, that the premises occupied by the testatrix and proponents were held by all the children as tenants in common, subject to the dower right of the testatrix, and no claim was asserted by the caveators for compensation for such use. The caveators also joined with the other children in giving to the testatrix their shares of the proceeds of the sale of a patent owned by their father, which sold for about $1,250, which shares, after deducting the testatrix’s one-third, amounted to about $140 teach.

The evidence shows that the children residing in Hudson county were somewhat peculiar. They were not harmonious. Jacob, especially, showed that he.had very little love for his mother, a fact which clearly appears in his letter of October 24th, 1905, which was a reply to a letter written him by his brother Andrew on the same date. This correspondence is as follows:

“Jersey City, Oct. 24th, 1905.
“Brother Jacob:
“Lizzie is somewhat improved, but the doctor says that it is necessary in order for her in her present condition to have absolute quiet, and no visitors whatever, therefore do not call and if anything serious occurs you will be notified.
“Tour brother,
“Andrew A. Brengel.” “Jersey City, N. J., Oct. 24/05.
“Mr. A. A. Brengel:
“Dear Sir—Enclosed you will find your letter and I wish to thank you for the information.
“I- am very sorry for Lizzie and there is nothing that I wouldn’t do for hex', but as the poor misfortunate girl has the misfortion to be taken care of by you I find that I am unable to do as I would very much like to.
“I am also sorry that I am related to such as you, and I never wish to claim any relationship with any of you, or anyone you know and should anything happen to poor Lizzie it might be a gx-eat deal better for her than to be under the care of you. In case anything should occure I don’t wish to be notified as for poor Lizzie I cannot help her and the rest I don’t care to know.
“As for writing letter's please don’t write any more as I do not wish to be disgraced through the mail. I haven’t very much education myself, but I can write an address better than this. I cannot blame anyone for this but your mother and if it wasn’t for her and her old church funning we may all be better off to-day. There was only one good person in the family and that was my father and I am trying to be as much like him as I can and I am going to treat my family as he treated his and not as they are being treated now like a lot of animals. I am sure if hé was alive to-day the lot of you wouldn’t be as pig-headed as you are.
“Very truly yours,
“Jacob Brengel.”

The other caveator, Annie Himsel, married about twenty-five years before the death of her mother, and had’ twelve children. Her domestic relations were not very pleasant. At one time her husband threatened to shoot her, and she called on her brother Andrew to secure for her police protection. She was in the habit of calling on her mother to unbosom her troubles; according to her own story, Mary Baker objected to her doing this, telling her that she might better keep from the house. The evidence demonstrates that Mary and Andrew desired that Annie and Jacob should not visit their mother, and when they did call either Andrew or Marjr stayed in the room; thus neither could talk privately with her. There is also evidence that the mother had a natural affection for all her children. When she met the caveators in the street alone she was very pleasant; but when the proponents, Andrew and Mary, were present, she was rather distant and anxious to have the caveators depart.

The facts, with relation to the execution of the will, are as follows:

The testatrix, with her daughter Mary, went to the office of Mr. George J. McEwan, a reputable member of the bar of the county of Hudson, to malee inquiry as .to her rights in the property wherein she resided, and was informed that she only had a dower right. After advising her as above, Mr. McEwan says':

“Then there was some talk about a will, and I said to Mrs. Brengel in the presence of Mrs. Baker that if there was a will to be prepared, I wanted her to come to my office alone and I would then take instructions,and prepare the will, and on the 19th day of September, as I say, she came to my office.”

He further says she was in his private office with him alone, she gave him the instructions for the will, he had it typewritten, and, on the date of the will, she returned and executed it in Ms private office, the only persons present being the testatrix, the witnesses and Mmself. Whether anyone accompanied her and was in his outer office at the time she gave the data for and executed the will, Mr. McEwan does not know, nor does it appear. Andrew and Mary say positively that they knew nothing of the existence of a will until a few days before their mother’s death, when testatrix informed them of the fact. About three weeks before the death of the testatrix her sista' Mrs. Rohleder died, leaving the testatrix a legacy of $5,000; this is practically all of the property passing under the will of tire testatrix. After the death of Mrs. Rohleder, Mrs. Givernaud, another sister of the testatrix, called on the testatrix, and apparently attempted to influence her in the making of a will, because it was then known that Mrs. Rohleder had given the testatrix $5,000. Mrs. Givernaud says she personally desired that this legacy should go to all of the children equally, because that was the wish of Mrs. Rohleder.

The caveators seek an affirmance of the decree on the ground that it appears from the evidence taken in the orphans court, and that admitted' by stipulation in this court, the will was the product of undue influence.

Undue influence was defined by Chancellor McGill, sitting as ordinary in the case of Fritz v. Turner, 46 N. J. Eq. 515, as 'follows:

“That influence, which will vitiate a will, must be such as so far to destroy the free agency of the testator as to constrain him to do that which is against his will, or that which he would not have done if he had been left to himself. It must be some species of moral or physical coercion, which, under the conditions in which he was placed, he was unable to resist—no. matter from what source it comes or what character it appears in, whether it be in tire shape of physical force, threats, importunity or other species of domination. Den, Trumbull, v. Gibbons, 22 N. J. Law 117, 136; Moore v. Blauvelt, 2 McCart. 367; Lynch v. Clements, 24 N. J. Eq. 431; Haydock v. Haydock, 33 N. J. Eq. 494, 496; Same Case on appeal, 34 N. J. Eq. 570; Waddington v. Buzby, 45 N. J. Eq. 173; Dumont v. Dumont, 46 N. J. Eq. 223.”

In the same case the ordinary referred to the character of proof from which the inference of undue influence might lie drawn, thus shifting the burden of proof to the proponents.

' Under the above ruling I will assume that the burden of proof is imposed upon the proponents. It is, therefore, necessary to determine whether the proponents have successfully borne this burden.

In considering this question, regard should be had to (1) the' amount of the estate at her disposal at the time of executing the will; (2) the natural objects of her bounty; (3) her age, health and .ability to resist coercion or importunities which might destroy her free will; (4) her consciousness of the amount of her property and the natural objects of her bounty.

Dealing with the above items, there was no proof before the orphans court of the value of the estate at the time of making the will; had it appeared that her entire property at that time did not exceed in value $100, hardly sufficient for funeral expenses, the view of the court might have been different.

When one possessed of a large estate disposes of it by will, favoring children forming part of his household to the exclusion of other children equally the natural objects of his bounty, without any reason appearing for such discrimination, and his condition is such that he is susceptible of coercion, and is under the influence of the favored children, the inference of undue influence is much stronger than in a case'where, at the time of making the will, the estate is so- meagre as to hardly warrant a division; therefore, the value of this estate at the time the will was made tends, in a measure, to negative the inference of undue influence.

While the natural objects of testatrix’s bounty were all her children, jret, considering the size of the estate she then had to dispose of, the proponents, by reason of -their long and faithful care of and service to their mother, coupled with the fact that one was a deaf mute, were in a class superior in right to the bounty of their mother. On the contrary, the conduct of the son Jacob, and her annoyance by the daughter Annie, who lived away from her for upwards of a quarter of a century, would naturally lead to her ignoring them in the disposition of this small estate.

Touching the age (seventy years), condition of health and power of resistance under coercion, I am satisfied she was so situated as to yield to the pressure of proponents if exerted.

As to knowledge of the amount of property she had to dispose of, and the objects of her’bounty, she knew after consulting Mr. McEwan-that she had but a dower right in her residence; and had sufficient mental capacity to comprehend tire amount of her property then remaining; and, finally, as the evidence clearly shows that her relation with the caveators were friendly, she clearly knew the objects of her bounty.

While the inference of undue influence is greatly weakened on the foregoing facts, the proponents by their case go further. They testify that they did not exercise influence upon tlieir .mother to make this will; that they did not know of its existence until a few days before her death and after the death of Mrs. Rohleder. Their evidence as to this is not impeached, and, in the nature of the case, is the only evidence they could offer. Spark’s Case, 63 N. J. Eq. 242, 249.

No testimony offered by the caveators increases the force of the inference of undue influence, overcoming or even balancing the proof against it. While it is apparent that Mary and Andrew disliked Annie and Jacob, and endeavored to keep them away from their mother, the motive was to protect her as much as possible from annoyance. This appears in the testimony of Annie, where, both on direct and cross-examination, she says Mary did not want her coming to their home telling her troubles to her mother; and as to Jacob, if his love for his mother was measured by the views in his letter to Andrew, Mary and Andrew might properly be excused for endeavoring to keep him away from her.

It would therefore seem that the force impelling Mary and Andrew to exclude the caveators from the presence of their mother sprung from their love and affection for her. There is no evidence that their course was taken to enable them to secure the making of a will in their favor. The evidence is to the contrary.

A suggestion is made here that the size of the estate at the time the will was executed should be ignored, because testatrix had rich relatives from whom she might receive considerable property by descent, devise and bequest, and that the will was accordingly made to dispose not particularly of what she then had, but what by chance might thereafter fall to her. The case does not present any evidence to support such suggestion. Eor aught that appears, this idea is presented for the first time in this court.

It is also argued that the proponents, at and about the time the will was read, admitted that they had perpetrated a great wrong on the caveators touching tire making of the will. I find, however, no evidence to support such contention. A careful reading of the testimony on this subject does not indicate an admission that the proponents, or either of them, had done any act or thing for the purpose of inducing their mother to make the will in question. The admissions testified to seem largely to deal with the unpleasant family relations theretofore existing, and the wrong referred to was the manner in which the proponents treated the caveators. These admissions were apparently made with the idea of restoring family harmony.

In this case it does not appear either expressly or by justifiable and fair inference from circumstances proved that influence was in fact exerted, and that it was exerted to dominate and control the will of the testatrix and coerce her to make a testamentary disposition of her property which she would not otherwise have made. Schuchhardt v. Schuchhardt, 62 N. J. Eq. 710; In re Eatley’s Will, 82 N. J. Eq. 591; Combes v. Carthew, 59 N. J. Eq. 638, 641 (bill to vacate a deed); Gardiner v. Gardiner, 34 N. Y. 155, 161.

In considering this case, I have been somewhat embarrassed because no' memorandum was filed in the orphans court giving the reasons for the decree entered, thereby rendering it necessary to pass upon the cas'e without the light which the views of the court below would shed. In doing this, considering that the orphans court had the benefit of seeing the witnesses and hearing them testify, and was thus better able to pass upon the weight and credibility of the testimony given, every fact that might be reasonably resolved against the proponents has been so treated. Having done this, and considering the evidence thus ascertained in connection with the evidence offered by stipulation in this court as to the value of the property possessed by testatrix when she made her will, my conclusion is that the will offered for probate was not induced by undue influence exerted by the proponents upon the testatrix, and I will therefore advise a decree of reversal.


author: Gummerb, Ci-ixee-Justice.

text:
    The Holland Reform School Society v. Jacob DeLazier et al.
    [Submitted July 6th, 1915.
    Decided March 6th, 1916.]
    A hag a right of, action against B for the breach of a covenant contained in a deed from A to B by which the latter assumed to pay an outstanding mortgage upon the premises conveyed. B has a right of action against O arising out of the breach hy C of a similar covenant contained in a deed for the same premises made to him by B. A further has an equitable right to enforce against O by way of subrogation the covenant of assumption contained in the conveyance by B to 0.—Held, that equity has jurisdiction to settle in a single suit the diverse rights and obligations of the parties arising out of the breaches of these two covenants of assumption.

      On appeal from a decree of the court of chancery advised by Vice-Chancellor Griffin, whose opinion is reported in 84- N. J. Eq. 44

      Messrs. Ward & McGinnis, for the appellant.

      Mr. Francis Scoti, for the respondent.
   The opinion of the court was delivered by

Gummerb, Ci-ixee-Justice.

The bill in this case was filed by the complainant to compel the two defendants, Jacob DeLazier and the Lewis Greasecup Company, to pay to it the sum of $1,306.96, with interest, the amount of a deficiency remaining after the sale of mortgaged premises under a decree of foreclosure. The defendant DeLazier demurred to the bill, and on the hearing the vice-chancellor, to whom the matter'was referred, considering that none of the causes of demurrer which were specified in that pleading were of legal merit, advised its dismissal; and it was so ordered.

From the order of dismissal DeLazier appealed, and now contends that the following cause of demurrer specified by him was well founded, viz., that the subject of the suit was not within the jurisdiction of the court of chancery, and that upon the face of the bill of complaint it appeared that the relief sought thereby lay solely in a court of law.

The following are the' facts set out in the bill which are material for the purpose of determining the soundness of appellant’s contention:

The mortgage which was the subject of the foreclosure suit, was made by the complainant while it was ’the owner of the premises covered thereby.

After the making and delivery of this mortgage, and of the bond which it was given to secure, tire complainant conveyed the mortgaged premises to the defendant DeLazier, the deed containing a- covenant by him assuming the payment of the bond and mortgage.

Some time later DeLazier conveyed the premises to the defendant the Lewis Greasecup Company; and this defendant, in turn, by a covenant contained,in the deed to it, assumed the payment of the bond and mortgage.

The Lewis Greasecup1 Company, about a year after it became the owner of the mortgaged premises, defaulted in the payment of the interest due upon the mortgage and (the principal sum also being due and unpaid) the holder foreclosed the mortgage, the property was sold to pay the debt secured thereby,- and a deficiency of $1,306.96 remained after applying the proceeds of the sale to the payment thereof.

The complainant in the foreclosure suit then brought an action at law on the bond against the maker thereof—the present complainant—for this deficiency, and in due course recovered a judgment therefor, with interest, which the latter was compelled to, and did, pay. Other facts are set out in the bill, to which, however, we do not now refer, as they have no bearing on the question raised by the appeal.

On the facts recited the following legal situation arises:

First. The present complainant has a right of action against the defendant DeLazier for the damages sustained by it through DeLazier’s breach of the covenant of assumption contained in the deed from the complainant to him. This right is a legal right, enforceable in a court of law.

Second. The defendant DeLazier, should he satisfy the complainant’s claim, will have a right of action at law against the Lewis Greasecup Company, for the breach of its covenant of assumption contained in the deed from him to it.

Third. The obligation of the Lewis Greasecup- Company, arising out of its covenant of assumption, is one which the complainant is entitled to enforce against it by way of subrogation. Green v. Stone, 54 N. J. Eq. 390. But that right is an equitable, not a legal, one, and only enforceable in the court of chancery.

Fourth. As between the two defendants, DeLazier and the Greasecup company, the latter, by reason of its assumption of the mortgage debt, is the principal debtor, and equity requires that the Greasecup company should make good to the present complainant the amount paid by it in satisfaction of the deficiency, and so relieve DeLazier from the legal liability resting on him by reason of the breach of his covenant of assumption.

That a court of equity is the only forum in which these various rights and obligations of the complainant and of the two defendants can be adjudicated upon in a single suit in such a way as to do complete justice to each of the parties is apparent. That it has jurisdiction to settle and enforce such rights and obligations, in order to avoid circuity of action, is undoubted. Pruden v. Williams, 26 N. J. Eq. 212; Biddle v. Pugh, 59 N. J. Eq. 480, 490.

The complainant, having invoked the aid of a court of equity, must do equity. On the facts stated in the bill, if they shall be substantiated by proof, the complainant will be entitled to a decree against each of the defendants in the order of their liability—that is, against the Greasecup company, primarily, and against DeLazier, secondarily, and the ft. fa. on the decree should direct the sheriff to satisfy the decree out of the property of the Greasecup company, so far as that can be done before proceeding against the property of tire defendant DeLazier.

The order appealed from will be affirmed.

For affirmance—The Chief-Justice, Garrison, Swayze, Trenci-iard, Parker, Bergen, Minturn, Kalisch, Black, White, Teri-iune, Heppeni-ieimer, Williams, Taylor—14.

For reversal—None.


author: Garrison, J.

text:
    Attorney-General, ex rel. Bliss et al., respondents, v. Linden Cemetery Association et al., appellants.
    [Argued November 19th, 1915.
    Decided March 6th, 1916.]
    1. The owner of a tract of land conveyed it for cemetery purposes to a cemetery association incorporated under the General Cemetery act of this state, the sole consideration for the conveyance being the covenants expressed in the deed, the first of which was that the association should deliver to the grantor a specified number of lot-entitling shares, giving the holders thereof their pro rata lien and claim upon the land-purchase fund of the association of at least one-half- of the proceeds of the sale of all burial plots¡ in the tract conveyed to it for conversion into burial plots; and the second of which covenants was that the association should pay periodically in cash to the grantor, his heirs, administrators, executors and assigns ten per cent, of the gross proceeds of the sale, lease or loan of each plot or of any use thereof or interest therein made by it from the land conveyed to it.—Held, that in view of the fact that there was a full disclosure of the purchase-price to all parties who then were or thereafter might become interested, manifested in the deed itself and spread upon the public records, the defect of the second covenant was, not that it provided a secret or illegal profit for the grantor, but that, because the amount of such profit was not liquidated, the covenant was one that it was not within the statutory power of the grantee association to make, being a covenant to pay perpetually a percentage of the price obtained for each of its lots.
    2. Normally, the remedy would be the rescission of the contract notwithstanding the conveyance, the vendee being thereby absolved from its illicit covenant, and the vendor having his land restored to him, but if for valid reasons this cannot be done, it still furnishes the criterion by which the rights and equities of the parties are to be worked out.
    S. In the present case as this normal remedy cannot be applied because of the burial uses to which the land has been put with the acquiescence of the grantor, none the less the conveyance as such must theoretically fall within the excission of its consideration, leaving the title of the grantee to rest upon the estoppel of the grantor to deny the perpetual dedication of the land to the uses for which it was conveyed as fully to all intents as if the deed of conveyance were valid and operative.
    4. The exscinded covenant provided for the profit that it was agreed the grantor should have, but what that profit should be the parties > themselves never fixed at any particular sum; hence, inasmuch as such sum cannot be ascertained from the covenant itself, it must be held by a court of equity to be a reasonable sum, in view of the services of the grantor and their value to the grantee, less any credits to which the grantee is entitled. Such a sum, when ascertained by a reference, or otherwise, should be treated as unpaid purchase-price for the land until extinguished by payment in gross or by a percentage from the price of lots, as provided in the covenant that was extra-statutory solely because the amount so to be was unliquidated.
    On appeal from a decree of the court of chancery advised by Vice-Chancellor Howell, whose opinion is reported in 83 N. J. Eq. I9Jf.

      Messrs. Vail & McLean, for the appellants.

      Mr. Abram LI. Cornish and Mr. Hugh B. Bee3, for the ¡respondents.
   The opinion of the court was delivered by

Garrison, J.

• On January 29th, 1901, William F. Smith, of New York, having acquired by purchase from the Winans estate a tract of land, in Union county, New Jersey, conveyed it for cemetery purposes to the Linden Cemetery Association, a New Jersey corporation, that had, more than a year before, been incorporated under the General Cemetery act of this state by the Winans family and certain other persons interested either in the establishment of a cemetery or in bringing about the sale of the Winans property. Of these incorporators Smith was not one and with them he had no connection at the time the association was organized, and even at a later period his only connection was that of the purchaser of the Winans tract and its conveyance to the already organized cemetery association. Smith paid $5,500 in cash for the tract, on which were mortgages amounting to $32,000. The land, therefore, was acquired by Smith at a valuation of $37,500, and in order to reap' a profit, which was his sole object in engaging in the transaction, it was necessary that he sell the property to the association at a larger price. Owing, however, to the fact that the association had no money and no means of raising any, the conveyance to it was made by Smith without the payment of any money whatsoever either for the land itself or for his profit in tire transaction, both of which were taken care of by two covenants in the deed, which, together with other covenants," constituted the sole consideration for the conveyance.

These two covenants were as follows:

“The party of the second part, in consideration of the conveyance to it of the premises hereinafter described, covenants, promises and agrees to and with the parties of the first part:
“1. To deliver to said William F. Smith nine thousand shares of the Linden Cemetery Association made out in the name of C. O. Smith at the ensealing and delivery of it by said first parties of this indenture,said shares giving the holders thereof their pro rata lien and claim upon the land-purchase fund of said association, composed under the laws of New Jersey of at least one-half of the proceeds of the sale of all burial plots, in the grounds of said association conveyed to it by these presents for conversion into burial plots.
“2. To pay semi-annually in cash to said William F. Smith, his beirs, administrators, executors and assigns, one-tenth part of the gross proceeds of the sale, lease or loan of each burial plot or of any use thereof or interest therein, made by said Linden Cemetery Association, party of the second part, from the land hereinafter conveyed to said association by this indenture.”

The decree brought up by this appeal directed that the second of these covenants be struck out of the deed of conveyance, and this direction is the sole subject of the appeal.

That this covenant, which, was in lieu of cash, was, with the acquiescence of all parties, the profit that Smith was to take, is clear from the evidence; the fact that it was to be distributed by Smith between himself and three others is a circumstance that does not affect tire equitable rules applicable to the transaction saving as it has some bearing upon the right of Smith to take a profit and the amount thereof.

It has been stated that the cemetery scheme originated with the Winans family and their local connections. This was in 1899. Some of the Winans owned the land; others with their neighbors organized the association that was to purchase the land, to which end options were given prior to the organization of the association. The association was incorporated, the necessary license of the township authorities was obtained and the permit of the board of health was secured, and by the time all of this was done, the options had expired and the owners refused to renew them or to deal otherwise than upon the basis of a cash payment for their equity in the land over and above the mortgages. The association had no money, and no means of raising any, and the incorporators were either unable or unwilling to lock up their own money by paying for the land which when conveyed to the cemetery association would be repaid, if at all, only by the slow process provided by the General Cemetery act, viz., the appropriation of

“one-half at least of the proceeds of all sales of lots to the payment of the purchase money of the lands acquired by the association until the whole purchase money shall be paid.”

In this impasse that threatened the life of the scheme, Vernette E. Prentice, who was locally connected with it, interested one William F. Smith, of New York, in the purchase of the Winans tract, with a view of selling it to the cemetery association. Smith took the matter up, and in order to finance it, interested his son C. 0. Smith, who agreed to put in a part of the required cash. Smith also interested Roswell A. Benedict, a Connecticut lawyer, first as an attorney and afterwards as a contributor of cash. When Smith had secured the requisite amount of cash, to wit, $5,500, the question arose as to how the purchase price to thé association was to be paid or secured by it, seeing that it had no money, no stock and no power to mortgage even for unpaid purchase-money. This practical and legal problem was left largely to Mr. Benedict, who, after devoting considerable time and labor to the New Jersey statutes and decisions (the case of East Ridgelawn Cemetery Co. v. Frank (1910), 77 N. J. Eq. 36, not having at that time been decided), finally evolved the scheme of payment that eventually took shape in the deed of William F. Smith to the cemetery association containing the two covenants that have been quoted. That Smith, who represented himself and his associates, was entitled to a fair profit as a recompense for tire indispensable services they had rendered is clear, the only requirements demanded by the most rigorous rule being that such profit should bear a reasonable relation to the value of the services, and that it should be fully disclosed and agreed to by the other parties in interest. While Smith had bought the land for the purpose of selling it to the association, he was in no sense its agent; the money he used was his own and not that of the association or its promoters or incorporators, and it is not shown or claimed that he obtained any reduction in price, by reason of the ulterior purpose to which the land was to be devoted. In a sense, the cash that Smith put into the transaction was risked when he conveyed his title to a company that could neither repay nor secure it, and where its eventual repayment depended upon his ability to sell for cash a large number of lot-entitling shares and the slow crediting of ten per cent, from the future sale of lots by the association.

That the purchase price included a profit to Smith was known to all the parties interested, to whom the result thus brought •about came as a happy solution of the very formidable problem of how an association that had no money was to acquire the lands of an owner who would sell only for cash.

That there was a full disclosure to all parties then interested, or who might thereafter buy into the scheme, cannot be questioned, in view of the fact that the transaction was set forth at length in the deed itself and at once spread upon the public records.

The defect, therefore, of the covenant that was stricken out of the deed by the court below, was not that it provided a secret or illegal profit for the grantor, but that, because the amount of •such profit was not liquidated, the covenant was one that it was not within the statutory power of the grantee to make. East Ridgelawn Cemetery Co. v. Frank, 77 N. J. Eq. 36.

In so far, therefore, as the decree is based upon the first-mentioned considerations, it rests upon an unsound foundation, and, In so far as it is based upon the last-mentioned consideration, the remedy decree is inequitable and beyond the power of the court.

The court of chancery properly decided that the covenant to pay perpetually a percentage of the price obtained for each of Its lots was one that an association incorporated under the General Cemetery act could not lawfully make, and as to the soundness of this decision, and the grounds on which it rests, we have nothing to add to tire discussion of the question by Vice-Chancellor Stevens in East Ridgelawn Cemetery Co. v. Frank, supra.

In the present case, the decree is that the deed of conveyance in which the extra-statutory covenant is made as part of the consideration be reformed by striking out and eliminating therefrom the covenant. This is to say, that a grantee who has obtained a conveyance of land by agreeing to pay therefor in a particular manner which is beyond his legal capacity may keep tire land without paying for it at all. This, of course, cannot be so. Normally, the remedy would be the rescission of the contract, notwithstanding the conveyance, the vendee being thereby absolved from its illicit covenant, and the vendor having his land-restored to him. If, for valid reasons, this cannot be done, it still furnishes the criterion by which the rights and equities of the parties are to be worked out. In the present case, this normal remedy cannot be applied because of the burial uses to which the land has been put with tire acquiescence of the grantor. None the less, the conveyance as such must theoretically fall with tire excission of its consideration, leaving the title of the grantee to rest upon the estoppel of the grantor to deny the perpetual dedication of the laird to the uses for which it was conveyed as fully to all intents as if the deed of conveyance were valid and operative. Close v. Glenwood Cemetery Association, 107 U. S. 474.

Of such deed an essential feature was the payment of a part of the consideration in a. particular way, and if that way is obnoxious to the statute- law, some other way must be found by which the contract of the parties as expressed in the deed shall as nearly as possible be carried out. Any objection by the complainant to this course is met by the- most fundamental of all the maxims—“He who seeks equity must do equity.”

The exsciirded covenant provided for the profit that it was agreed the grantor should have, but what that profit should be the parties themselves never fixed at any particular sum; hence, inasmuch as such sum cannot be ascertained from the covenant itself, it must be) held by a court of equity to be a reasonable sum, in view of the services of the grantor and their value to the grantee, less any credits to which the grantee is entitled. Such g sum, when ascertained by a reference, or otherwise, should be treated as unpaid purchase price for the land until extinguished by payment in gross or by a percentage from the price of lots as provided in the covenant that was extra-statutory solely because the amount so to be paid was unliquidated.

The decree of the court of chancery, so far as it is challenged by the petition of appeal, must be reversed, to the end that it may be corrected in accordance with the views herein expressed.

Nothing has been said as to* the theory of the amended bill of complaint, which was that of an administration of a charitable use. The question whether or not lands held by cemetery associations, incorporated under our General Cemetery act, are devoted to a charitable use, in the legal sense of that term, need not be decided as the basis of jurisdiction in this case.

The estoppel of the grantor to deny the* dedication of his land to the corporate purpose, and the severance of the legal and equitable titles involved in the doctrine thus invoked, exhibit a trust relation that amply justifies the exercise by a court of equity of that branch of its primary jurisdiction when the necessary parties are before it and the necessary facts are pleaded.

Cases illustrating this doctrine, under a variety of circumstances, are referred to in the Century Digest, tit. “Estoppel” 277, and in the American Digest and its supplements under the key number “Estoppel” 94 (1).

The decree of the court of chancery is reversed for modification.

For affirmance—None.

For reversal—The Chief-Justice, Garrison, Swayze, Trbnchard, Parker, Bergen, Kalisch, Black, Teri-iune, HeppenheiSier, Williams, Taylor—12.


text:
    Sarah E. Welch, appellant, v. John C. Welch, respondent.
    [Argued December 1st, 1915.
    Decided March 6th, 1916.]
    It is not a compliance with section 8 of the Divorce act (2 Comp. Stat. p. 2032), providing that the court of chancery shall not have jurisdiction of any cause of divorce unless the petitioner shall make and annex to his or her petition an oath or affirmation “that his or her petition is not made by any collusion between him or her and the defendant,” where such jurisdictional affidavit states “that the complaint made in said petition is not made by any collusion between her and the respondent (naming him) in said petition named for the purpose of dissolving their marriage.”
    On appeal from a decree of the court of chancery advised by Advisory Master Biddle.

      Mr. Michael J. Tansey, for the appellant.
   The opinion of the court was delivered by

Garrison, J.

The court of chancery dismissed the appellant’s petition for divorce upon the ground that the affidavit annexed thereto did not conform to the statute and hence did not confer jurisdiction upon the court.

The statute (section 8 of the Divorce act; 2 Comp. Slat. p. 2032) provides that the court of chancery shall not have jurisdiction of any cause of divorce unless the petitioner shall make and annex to his or her petition an oath or affirmation “that his or her petition is not made by any collusion between him or her and the defendant.” The affidavit annexed tó the petition in the present case was “that the complaint made in said petition is not made by any collusion between her and the respondent, John C. Welch, in said petition named for the purpose of dissolving their marriage.” This affidavit is substantially such as was required by the various divorce acts that preceded the Divorce act (revision) of 1907 (P. L. 1907 p. pip) Thus in the latest of these earlier acts, viz., that of 1902 (P. L. 1902 p. 502), the jurisdictional requirement was that “the complainant or petitioner shall make his or her oath or affirmation which shall be annexed to the bill or petition that his or her complaint is not made by any collusion between him or her and the defendant.”

By the revised statute of 1907, bills of complaint for divorce were dropped and contemporaneously therewith the word “complaint” in the jurisdictional affidavit was changed to “petition.” This change was not required by the dropping of “bills” of .divorce, for if in such earlier acts the word “complaint” was used in the sense of the invocation of jurisdiction by bill or petition, it would continue to have that sense when such invocation was by petition alone. The change from “complaint” to “petition” would indicate therefore that the former term was regarded by the revisers as meaning the gravamen of the bill or petition, i. e., the- statement of the cause on which the divorce was sought under the jurisdiction that was invoked by the bill or petition. This is what Chancellor Magie thought that the word “complaint” meant in this connection, for in Brant v. Brant, 71 N. J. Eq. 66, he says: “The complaint in such cases is the statement of the causes on which the divorce is sought. That complaint is contained in the bill or petition.” The changes made by the revisers were therefore twofold— first, that jurisdiction should be invoked by petition, and second, that the affidavit should state that such jurisdiction was not invoked by collusion, not merely that the causes on which the divorce was sought were not by collusion. The distinction is a thoroughly practical one. Take the ordinary case of a couple who have agreed that one should file 'a petition for divorce to which the other would make no defence. Having agreed to this the petitioner could not without perjury, swear that such petition was not made by collusion, but if such collusion had not included the specific cause on which the divorce was to be sought, the affiant might swear that “the complaint made in the petition” was not by collusion and yet be well within the facts of the given case.

The language of the act of 1907 is therefore more inclusive than that of the earlier acts and hence is not complied with by the affidavit that was annexed to the petition in the present case. This substantial ground for the affirmance of the decree of the court below renders it unnecessary to decide whether the court of chancery would not be justified in requiring that the jurisdictional affidavit should be in the words prescribed by the legislature even where the substituted language was apparently a substantial equivalent therefor.

The decree brought up by this appeal is affirmed.

For affirmance—Ti-ie Ci-iiee-Justice, Garrison, Swayze, Trenohakd, Parker, Bergen, Minturn, Kalisch, Black, Teri-iune, Heppeni-ieimer, Williams, Taylor—13.

For reversal—None.