author: Buchanan, Y. C.

text:
    Mary E. McVoy v. Karl Baumann et al.
    [Decided January 18th, 1922.]
    1. A suit by vendee or liis assigns for the specific performance of a contract of sale of lands in thfis state is, by reason of existing statutory provisions, a suit quasi in rem, and if proper proceedings for so-called “service by publication” ¡be duly had, jurisdiction may thereby be acquired for a valid and effectual decree against non-resident defendants who neither appear voluntarily nor are served with process in this state.
    2. A vendor, under a contract of sale of real estate, is in equity a trustee for vendee; and any subsequent grantee, mediately or immediately, from vendor, takes the lands impressed with such trust and is a like trustee, unless liei or. one of his predecessors in title be a purchaser for value and without notice.
    3. Apart from, statute, a vendee suing for specific performance against a subsequent grantee from vendor, has not the burden of proving that such subsequent grantee (and all intermediate grantees) took with notice or without paying valuable consideration.

      4. Under present statutes, in such a case, the burden still remains on defendant to establish that the subsequent grantee (or some one of several successive subsequent grantees paid valuable consideration), but the burden of proof as to notice is shifted so as to require vendee to prove that all subsequent grantees who paid value took with notice.
    5. Even if a contract of sale of lands, not acknowledged by vendor, be in fact recorded, there is no constructive notice thereby to a subsequent grantee.
    (i. An assignee from vendee of a contract for the sale of lands may, upon performance of the terms required by the contract to be performed by vendee, have specific performance against vendor, notwithstanding that vendor could not bring such a suit against the assignee.
    7. Where vendor under a contract of sale of lands subsequently conveys to his wife (who was not a. party to the contract), and she conveys to a third person, the wife is at least a proper party in a suit by vendee for specific performance.
    On final hearing.

      Mr. Augustus C. Nash, for the complainant.

      Mr. Earle C. Merrill, for the defendants.
   Buchanan, Y. C.

This is a bill Cor specific performance of a contract for the sale of lands located in this state between Karl Baumann, the owner, as vendor, and Herbert C. McVoy. as vendee. The covenant was to convey to vendee, his heirs or assigns. Between the making of the contract and the date for consummation it was arranged (apparently verbally) among all tire parties concerned that the deed should be made to the vendee’s wife, the present complainant. On the date for consummation specified in the contract, the vendor attended, with a deed duly executed and acknowledged by himself and his wife (who was not a party to the written agreement), which deed named complainant as grantee; and the vendor at that time asked that a written assignment of the vendee’s interest in the contract be executed by vendee to complainant, which was then and there done. A resale of the premises in two parcels had been arranged by vendee, and deeds duly executed by complainant and vendee had also been prepared. Complainant was expecting to put through the several transactions at the one time, and to pay the sum due to vendor out of the moneys to be received from the “sub-vendees.” The latter, however, did not appear, and after waiting a long time Baumann and McVoy both left. Baumann later refused to perform his contract, and complainant, after causing tender to be made of the sum due, filed her bill. In the meantime she had the contract recorded, although, it was acknowledged only by the vendee and not by the vendor.

Prior to the filing of the hill, but after the recording of the contract, Baumann conveyed the premises in question to his wife, and then joined with her in a, conveyance to Cooley, the third defendant.

All three defendants were non-residents, of this state at the time of the filing of the bill, and the usual so-called “order of publication” was taken .against them, requiring- them to appear and answer on or before the date therein fixed, and providing that the statutory notice of such order be served personally on the defendants within ten days or he published and mailed (in the usual manner and form).

No proof was made or filed, either of service or of publication and mailing, but notice obviously reached the defendants, for prior to the expiration of the period of publication application to this court was made bjr their solicitor for leave to appear specially for the said defendants to move the dismissal of the bill as against all of the defendants, on the ground of “lack of jurisdiction; the said defendants not being residents of this state and no. personal service of process having been made, but service having been attempted to he made by publication.”

Orders granting such leave were entered, and the motions for dismissal were made, but, of course, not granted. Instead an order was entered “that the motion- to dismiss the complaint as to Karl Baumann and Bertha Baumann for want of jurisdiction be denied, but that said defendants may file an answer under their special appearance, subject to the condition that if on final hearing the motion to dismiss for want of jurisdiction is denied, their answer shall stand as a general appearance.”

A similar order was also entered as to the defendant Cooley— both orders being entered prior to the expiration of the time limited in the order of publication.

Answers were thereafter duly filed, and after replications, an order of reference was made, and an order of designation — both consented to by defendants’ solicitor — and the case was brought on for final hearing, pursuant to the designation.

At the hearing the motion to dismiss for lack of jurisdiction was renewed, and the objection thus interposed requires preliminary determination, for, if this court be without jurisdiction, it cannot pronounce a valid decree one way or the other upon the merits of the case.

It may not be amiss to point out here that defendants, in their original attempt to bring forward this objection, acted both prematurely and by improper motion. The ground of their objection is, and was then, that the cause of. action is one strictly in personam, and -that jurisdiction has not been acquired over the persons of the defendants. (The difference is obvious between this situation and a contention that'the court is without jurisdiction óf the subject-matter of the controversy.) Their original motion was to dismiss the bill upon the ground stated and it was made before the record showed the service of process or any substituted service.

Assuming the cause of action to be .one strictly in personam, it is surely no ground for dismissal óf the bill that service has not been made (except, perhaps, where there has been such long continued delay as to constitute laches. Dey v. Hathaway, 41 N. J. Eq. 419.) Not only is this true where there is nothing of record to indicate that service has been made, but also in a case where it appears by the record that service has duly been made, but defendant contends the contrary. In the former case there is nothing upon which defendant can take any action. After proof of service appears of record he may either move to set aside the service or the proof thereof, or, if he be a. non-resident, he may raise the question by setting up in his answer a denial 'of the acquisition of jurisdiction over Iris person. Chancery Rules 52, 53; Groel v. United Electric Co., 69 N. J. Eq. 397; Wilson v. American Palace Car Co., 65 N. J. Eq. 730; Ewald v. Ortynsky, 78 N. J. Eq. 527; Brimberg v. Hartenfeld Bag Co., 89 N. J. Eq. 427.

There would seem to be no difference in principle whether the contested service of process be of service of the ordinary subpoena or substituted service under an order of publication. The latte]1 is strictly a service of notice rather than of process, but is just as essential, under our statute, to the acquisition by the court of the right to proceed with the disposition of the cause. Until, therefore, there had been filled the proofs of service or publication of notice, pursuant to the order of publication, not only could the court not proceed with the cause, but there was nothing upon which the defendants could take any action. No objection could be made by them to the entry of the order of publication itself. Kirkpatrick v. Post, 53 N. J. Eq. 591; affirmed, Ibid. 641.

■Returning to the main issue, the question is whether or not this court can pronounce a valid decree in a specific performance suit by vendee against vendor and vendor’s grantee, where the defendants are non-residents, of this state not served with process in this state nor appearing voluntarily, but served pursuant to our statute under an order of publication.

Clearly, if the action be one strictly in personam, the question stated must be answered in the negative. McGuinness v. McGuinness, 72 N. J. Eq. 381. It is equally clear that in former times such a suit for specific performance was an action strictly in personam.. The prayer of the bill was for a decree that defendant convey the lands in question to complainant; the decree, if granted, was that defendant convey; and it was only by defendant’s obeying’ the decree, either with or without compulsion, that complainant could obtain the- relief sought by his bill and awarded to him by the decree, namely, the title to the lands. Amparo Mining Co. v. Fidelity Trust Co., 74 N. J. Eq. 197 (at p. 203).

Although equity acts, ordinarily and unless empowered by legislative authority, only in personam, nevertheless, this state, as a sovereign state, has jurisdiction and control over all property situate within its borders. As is said! by Mr. Justice Brewer in Arndt v. Griggs, 134 U. S. 316 (at p. 320) : “Tfl [the state'] has control over property within its Emits; and the condition of ownership of real estate therein, whether the owner he stranger or citizen, is subjection to its rules concerning the holding, the transfer, liability' to obligations, private or public, and the modes of establishing title thereto'. It cannot bring the person of a nonresident within its limits — its process goes not out 'beyond its borders — but it may determine the extent of his title to real estate within its limits; and for the purpose of such determination may provide any reasonable methods of imparting notice.”

This language is quoted with approval by the same court in the opinion, of Mr. Justice Brown in. Roller v. Holly, 176 U. S. 398 (at p. 405).

In Arndt v. Griggs the question before the court was, as is said in the opinion (at p. 320) : “What jurisdiction has a state over titles to real estate within its limits, and what jurisdiction may it give by statute to its own courts to determine the validity and extent of the claims of non-residents to such real estate?” The determination by the court was that “a state has power by statute to provide for the adjudication of titles to real estate within its limits as against non-residents who’ are brought into court only by publication,” and that where a state has so provided by proper statute a decree quieting title entered in a suit conducted in accordance with, such statute is not open to the objection by a non-resident defendant served only by publicátion, that it is an equity decree and can act only in personam, because the effect of such statutory provision is to' make the proceeding? and the decree substantially m rem-. The same question, inter alia, was before the court in Roller v. Holly, supra, in regard to a proceeding to foreclose a vendor’s lien on real estate, and the same determination was expressed.

These two cases being respectively on bill to quiet title and bill to foreclose vendor’s lien, axe not express and exact determinations of the question a.?, affecting a bill for specific performance. Nevertheless, the language of the opinions is broad enough to comprehend the present proceeding, and the same conclusion, it seems to me, must needs be reached from the reasoning given.

The proceeding j? one seeking to affect, by its ultimate result, the title to real estate in this state; to accomplish, a transfer of the legal title thereto from defendant to' complainant; to deprive defendant of suc-h title and establish it in complainant.

The sovereign power of the state obviously extends to all questions of ownership; transfer, acquisition or deprivation of title to lands within its territorial limits, subject only to such limitations as arise under and by virtue of the constitution of the United States. Cf. United States v. Fox, 94 U. S. 315 (at p. 320). .Referring to the passage quoted, supra, from Arndt v. Griggs, a non-resident owner of lands is subject to the state’s rules concerning the holding of title thereto, the transfer of title thereto, and the liability thereof to- obligations, private as well as public. The same 'opinion quotes with approval from the opinion in Dillon v. Heller, 39 Kans. 599, including the following : “Has the state and power,' through the legislatures and the courts, or by airy other means or instrumentalities, to dispose of or control property in the state belonging* to non-resident owners out of the state,’ where such non-resident owners will not voluntarily surrender jurisdiction of their persons to the state or to the courts of the state, and where the most urgent public policy and justice require that the state should assume jurisdiction over such property? * * * We think a sovereign state has the power to do just such a -thing. * * * To obtain jurisdiction of everything within the State of Kansas, the statutes of Kansas may malee service by publication as good as any other kind of service.”

In the same opinion is also quoted with approval an excerpt from the opinion of the same court in Pennoyer v. Neff, 95 U. S. 714 (at p. 727), including the following: “Such service [by publication;] may also be sufficient in cases where the object of the action isl to reach and dispose of property in the state, or of some interest therein, by enforcing a contract or lien respecting the same. * * ’ * In other words, such service may answer in all actions which are substantially proceedings in rem. * * * It is true that in a strict sense a. proceeding in rem is one taken directly against property, and has for its object the disposition of the property without reference to the title of individual claimants; but, in a larger and more general sense, the terms are applied to actions between parties, where the direct object is to reach and dispose of property owned by them or some interest therein.”

Arndt v. Griggs also quotes, with approval in support of its determination, from Boswell v. Otis, 9 How. (U. S.) 336 (at p. 348) : “Jurisdiction is acquired in one of two modes — first, as against the person of the defendant, by the service of process; or, secondly, b}r a procedure against the property of the defendant within the jurisdiction of the court. In the latter case, the defendant is not personally bound by the judgment beyond the property in question. And it is immaterial whether the proceeding against the property be by an attachment 'or bill in chancery. It must be substantially a proceeding in rem. A bill for the specific execution of a contract to convey real estate is not strictly a proceeding in rem, in ordinary cases; but where such a procedure is authorized b3r statute on publication, without personal service or process, it is substantially of that character.”

Moreover, even in Hart v. Sansom, 110 U. S. 151 (an opinion which has been frequently misconstrued, and which has been explained and expressly delimited in later opinions), it is said (at p. 154) : “Upon a bill for the removal of a cloud upon title, as upon a bill for the specific performance of an agreement to convey, the decree, unless otherwise expressly provided by statute fthe italics are mine], is clearly not a judgment in rem, establishing a title in land, but operates in personam only, by restraining the defendant from asserting his claim, and directing him to deliver up his deed to be canceled, or to execute a, release to the plaintiff.” .

I conclude, then, that it id within the power of this state to provide by statute that this court may hear and determine a suit for specific- performance of a contract for the sale of lands in this state, brought by vendee against a non-resident vendor, notwithstanding jurisdiction be not had by the court over the person of the vendor, after due proceedings for notification to vendor of the pendency of such suit, and that title to the lands shall pass to such vendee upon a determination in his favor ; or, to put it a little differently, a valid judgment or decree, transferring title to) lands in the state from vendor to vendee may be entered in this court ill a suit for specific performance where the vendee has been served only with notice and not with process, provided the suit be substantially in rem; and such suit is so substantially in rem where the state has by statute provided for the sendee of notice on such non-resident vendor in such eases and has also provided that upon such judgment or decree title shall pass irrespective of any action by the vendor.

That the requisite legislative enactments have been made by this state, I think there can be little doubt. The provisions for the acquisition of jurisdiction over absent defendants are to be found in sections 12, 18 of the Chancery act. Rev. 1912. They do not, in express and specific terms, refer to a suit for specific performance, nor to suits affecting lands, but their application is comprehensive and general and extends to all cases where under recognized principles of law suits might be instituted against non-resident defendants. Roller v. Holly, supra (at p. 406); Amparo Mining Co. v. Fidelity Trust Co., 75 N. J. Eq. 555 (at p. 560). By section 45 of the Chancery act (Rev. 1902). a decree of this court for the conveyance of lands, or any interest therein, not complied with by the parties decreed to convey, is made of the same force and effect as if the conveyance had been executed pursuant to the decree. The legislature has thus made the decree the actual instrumentality accomplishing the transfer of title in all cases except where there .is an exact compliance with the decree. Cf. Weehawken Ferry Co. v. Sisson, 17 N. J. Eq. 475. It may be noted that the form 'otf? the decree must be personal — for a conveyance — otherwise, of course, the statute is not operative. But it is equally obvious that the transfer of title is accomplished by the state through the decree of this court, and not by the act of the parties, unless they convey in absolute and! exact compliance with the terms of the decree, and this is of course utterly irrespective of whether or not the defendants be non-residents. The effect of the statute, as it lias been said, makes the decree self-executing. In the language of Vice-Chancellor Pitney in Fee v. Sharkey, 59 N. J. Eq. 292 (adopted by the court of errors and appeals, Ibid., 60 N. J. Eq. 446, and, again, in Goldstein v. Curtis, 65 N. J. Eq. 382) : “The strength of the complainant’s title does not rest in any deed of conveyance executed by the defendant, but in the declaration and decree of this court establishing his right in equity” * * * this, in the course of holding, that it was not necessary for a married woman to acknowledge a conveyance which had been decreed in chancery, nor, indeed, for her to make any conveyance at all.

It may also be noted that section 44 of the Chancery act gives to decrees in chancery the same force and effect as judgments at law in the supreme court.

It seems to me, therefore, in view of the several statutory enactments referred to, that a suit in this court, by vendee against vendor for specific performance of a contract to convey lands in this state, is in this state a suit quasi in rem, or “substantialty in rem,” and that jurisdiction is acquired by this court even though the vendor be a non-resident and neither appears voluntarily nor is served with process in this state, if there be an order of publication in conformity with the statute and service or publication of notice pursuant to such order. Nor does the fact that the defendant vendor conveyed the lands subsequent to this contract and before suit brought, and that one of the defendants is the grantee under such conveyance and also a non-resident, make any difference on this question of jurisdiction. It is still the question of the rightsi of complainant and the defendants in the lands in this state. The precise question — that is, in relation to a suit for the specific performance of a contract of sale of real estate — seems never to have been adjudicated in this state; and, indeed, to have arisen hut rarely in other jurisdictions. The weight of authority is, however, in favor of the acquisition of jurisdiction by the constructive service. Cf. O’Sullivan v. Overton, 56 Conn. 103; Mason v. Benedict, 48 La. Ann. 397; Tutt v. Davis, 13 Cal. App. 715.

In Massachusetts it was held, in Spur v. Scoville, 3 Cush. 578, that jurisdiction could not be acquired by constructive service in such a case, there being then no statutory provisions such as have been heretofore referred to. Legislation was thereafter adopted under which a tmstee could be appointed to convey the property in lieu of the non-resident defendant. In Felch v. Hooper, 119 Mass. 52, subsequent to this'legislation, jurisdiction was sustained of a bill by a purchaser of lands, who had paid or tendered the purchase price and1 been given possession of the lands and prayed for legal title. The court expressly says that a bill for specific performance could not be sustained, but that the suit in question was a suit to' enforce an implied trust. I confess it is difficult for me to see the distinction, for the equitable doctrine is, and has always been, that a vendor is a trustee of the lands for the vendee from the time of the making of the contract (Cf. Hoagland v. Lalourette, 2 N. J. Eq. 254, at p. 256), and the payment or tender of purchase price is of course a requisite demanded of a vendee suing for specific performance; and even though a trustee be appointed to convey the title, in the last analysis, it is the statute which transfers the title, since, otherwise, the trustee would have no title to convey.

In this state the .principles have been repeatedly discussed in such cases as Hill v. Henry, 66 N. J. Eq. 150; Andrews v. Guayaquil & Co., 69 N. J. Eq. 211; affirmed, 71 N. J. Eq. 768; Sohege v. Singer Manufacturing Co., 73 N. J. Eq. 567; Amparo Mining Co. v. Fidelity Trust Co., 74 N. J. Eq. 198; affirmed. 75 N. J. Eq. 555. In Hill v. Henry' the bill was one to quiet title against the unknown! heirs, devisees or personal representatives of a decedent. Jurisdiction was denied on the ground that constmetive service to be valid must lie against named defendants, but the opinion clearly indicates that jurisdiction would have been, upheld against a definite and named defendant. The other three cases all upheld the jurisdiction, but involved personalty (shares of stock) instead of realty, so that they are not distinct authority in the present case; yet a reading of the opinions leaves no room for doubt that similar decisions would have been rendered if the suits had been for specific performance of realty contracts. Particular reference may be made to the language of Vice-Chancellor Howell in the Singer Case (at p. 577); of Vice-Chancellor Stevenson in the Amparo Case (at pp. 203, 204); and of Mr. Justice Swayze in the same case (at pp. 559, 560). Cf., also, Lister v. Lister, 86 N. J. Eq. 30 (at p. 36).

. I he defendant argues- that even if a suit in rent or quasi in rem might, under the c-ircumstances of the present case, be brought and maintained by complainant on constructive service merely, nevertheless, this is not such a case because, there is no allegation that defendants are trustees, and the prayer of the bill is for a personal decree only, that defendants perform the contract, execute a conveyance of the lands, deliver possession and account for the rents, issues and-profits. .This...contention is, however, as it seems to me, without force, for a bill need not allege or charge the legal or equitable results of acts; it. is sufficient to set forth, as the present bill does, the facts, from which the legal or equitable sequences necessarily flow. The form - of the prayer is the form sanctioned by .immemorial usage, and, moreover, it is strictly correct, since.as-1 have..already pointed out, it is'necessary, under the wording of the* .statute, that the form of the decree be in personam in order that the statute.shall execute it. Possibly, some sort of a,hybrid form of prayer might be devised, 'but to what good end P I take it that in these days, and, especiall}', since the amendment of 1915 to the'Chancery act, neither the particular relief prayed for nor the form of the prayer is of much materiality, except upon a question of election .of remedies, and on that point no question arises here, for the present bill clearly shows that complainant asks for title to- the lands, not for the consideration paid or agreed to be paid by the subsequent grantee.

It may well be essential'in such a case as this, that the notice to the non-resident defendants should call their attention to the fact that a decree transferring their title might lie rendered against them even if they did not. appear. "With that, however, I am not concerned. As I have already stated, there are no proofs of publication or service of the notice on file in these proceedings. Presumably, the publication was terminated by arrangement between the parties, on the making of the original motion, for it was expressly stated by defendant*’ counsel at the hearing that if the present ca=e was one substantially in rem, in which jurisdiction could be acquired by publication, then such jurisdiction had in fact been acquired

Passing, then, to the merits, defendants contend that defendant Cooley (tire subsequent grantee) is a purchaser for value without notice, and hence the bill cannot be maintained against him; and that it cannot be maintained against the other defendants without Cooley, since they have not the title to convey.

This phase of the case is not quite as simple asi defendants’ argument would indicate. It will be recalled that after the date for consummation of the original contact of sale, and before the recording of that contract, a deed of conveyance from vendor to his wife (who had not joined in the contract, to McVoy) was executed and recorded; and that after the recording of the contract of sale, the wife, with her husband joining, executed a conveyance to Cooley. (Prior to 1919, the wife, and, therefore, also Cooley, would have taken only an equitable title (Sipley v. Wass, 49 N. J. Eq. 463); but P. L. 1919 ch. 49, makes valid a direct conveyance from husband to wife, so that Cooley took the legal title by the deed to him.) It is, or may be, necessary, therefore, to make this inquine, as to the purchase for value without notice, both in respect of, Cooley and of the wife; although, of course, if the wife took for value and without notice it would be immaterial as to whether Cooley did or did not. Rutgers v. Kingsland, 7 N. J. Eq. 178; Holmes v. Stout, 10 N. J. Eq. 419 (at pp. 422, 429).

When we come to make this inquiry, however, we arc met by the unusual circumstance that there is not a particle of evidence in the case as to> whether the wife took with notice or without (although a strong suspicion arises from her execution of the undelivered deed to complainant); and, indeed, the same thing is also time as regards Cooley, for it Avould surely seem that the contract of sale, though in fact recorded on the acknowledgment by vendee, cannot be constructive notice when not acknowledged by the vendor. Brinton v. Scull, 35 Atl. Rep. 843; reversed, but not on this point, 37 Atl. Rep. 740. None of the defendants testified or even appeared at the hearing.

We are driven back, therefore, to the fundamental principle forming the basis of a- vendee’s right to relief against a. subsequent grantee, and, indeed, to a determination a« to precisely what the fundamental principle is. Must a vendee, in order to be entitled to a decree against a subsequent grantee-, prove that the latter either had notice or was not a purchaser for value ? Or will he prevail itnless the grantee prove himself to be a purchaser for value without notice? Does the vendee by establishing his right as against the vendor thereby establish a right in respect-to the lands in whatsoever hands the legal title be found unless the holder of that legal title interpose a valid defence? Or would his bill against a subsequent holder of the legal title be subject to dismissal for failure to state a cause of action, if it contain no allegations showing defendant to be (as it is sometimes expressed) privy to complainant’s equity? As to this there seems to be an unexpected dearth of authority. None is cited by counsel on either side and none precisely in point has been found by a search of some length.

The theory of the grantee’s liability set up by equity jurisprudence is that of trusteeship; the grantee is said to become a trustee for vendee by operation of law, just as a trust is said to arise by operation of law between vendor and vendee. But even here — that is. in the broad, general domain of trusts, there is but little authority, and that in conflict (Cf. Bog. Trusts 514) as to whether a grantee from an express trustee becomes a trustee for the cestui unless he can excuse himself by the affirmative defence of an innocent purchaser for value, or whether he becomes a trustee only if he takes with notice or as a volunteer. It is curious that most of the text-writers make- absolutely no mention whatever of such a fundamental question. But the weight of authority in the adjudicated cases seems to be that the burden is on the defendant to show that he is entitled to the protection of a purchaser for value without notice.

In this state the question would appear to be settled to- the same effect. In Haughwout v. Murphy, 22 N. J. Eq. 531, Mr. Justice Depue, delivering the opinion of the court of errors and appeals, says (at p. 547) : “It is upon the principle of the transmission by the contract of an actual equitable estate, and the impressing of a trust upon the legal estate for the benefit of the vendee, that the doctrine of the specific performance of contracts for the sale and. conveyance of lands mainly depends.”

In Reeves v. Evans, 34 Atl. Rep. 477, Vice-Chancellor Reed says: “The trust follows the legal estate wherever it goes except it comes into the hands of a. purchaser for valuable consideration without notice,” citing Lew. Trusts *823, that reference being as follows: “Where there was a trust, it should be considered in that court as the real estate between the cestui que trust and the trustee and -all claiming by or under them.”

The same author says (at p. 246) : “The universal rule, as trusts are now regulated, is, that all persons who> take through or under the trustee, except purchasers for valuable consideration without notice, shall be liable to the trust.” Finally, see the opinion of Vice-Chancellor Backes in Bridgewater v. Ocean City Association, 85 N. J. Eq. 379 (at p. 384); affirmed on that opinion, 88 N. J. Eq. 351.

From the foregoing, t-hén, it would appear that in the absence of statute, the subsequent grantee must bear the burden of proving that be paid value and was without notice. This burden, however, may be shifted by statute. Bridgewater v. Ocean City Association, supra. Has it been so shifted in the present case?

By sections 21 and 54 of the “Act respecting conveyances,” in effect at tlm time of the execution of the contract of sale to Mc-Vo-v, it is provided that every agreement for the sale of land in tin's state “shall, until duly recorded * * * he void and of no effect against subsequent judgment creditors without notice and against all subsequent bona fide purchasers and mortgagees for valuable consideration, not having notice thereof, whose deed or mortgage shall have been first duly recorded,” but “shall be valid and operative, although not recorded, except as against such subsequent judgment creditors, purchasers and mortgagees.” I confess that to my mind the language of the statute indicates no shifting of the burden of proof. The unrecorded instrument is not made invalid generally; it is made invalid only as to; certain classes of persons, and is expressly declared valid except as to f-hose classes of persons. Logically, therefore, it would seem that one in order successfully to claim the benefit of the statutory provision must bear the burden of proving himself to -be within the class of persons as to. whom only the .contract is declared invalid. However, it has. been repeatedly held, under statutes in all respects essentially similar in language, that the burden is on the holder of the unrecorded instrument to prove that the subsequent grantee had notice. Coleman v. Barklew, 27 N. J. Law 357 (at p. 359); Vreeland v. Clafflin, 24 N. J. Eq. 313; Hodge v. Amerman, 40 N. J. Eq. 99; Roll v. Rea, 50 N. J. Law 264 (at p. 267); Protection Building and Loan Association v. Knowles, 54 N. J. Eq. 519 (at p. 529); Paul v. Kerswell, 60 N. J. Law 278 (at p. 275); McGrath v. Norcross, 78 N. J. Eq. 120 (at p. 134); Hendrickson v. Wooley, 39 N. J. Eq. 307 (at p. 308); Atlantic City v. New Auditorium Pier Co., 67 N. J. Eq. 610 (at p. 615) : the two eases last mentioned being opinions of the court of errors and appeals.

In none of these eases is there any discussion of the rationale of the conclusion. This is of course of no moment, so far as the determination of the present case on the question of notice is concerned, but it is unfortunate in regard to the question of valuable consideration, for the subsequent grantee to he protected must needs have paid value as well as having been without notice. Is the burden of proof on the holder of the unrecorded instrument to. show that the subsequent grantee did not pay valuable consideration ? To he consistent it must he so held, unless there he a distinction in the language of the statute as between the two factors. To my mind it is difficult to perceive such a valid distinction by reference to the statute alone. Nevertheless, in Coleman v. Barklew, supra, (which is apparently the ultimate basis of all the other authorities in the list above), there is an indication that the supreme court there thought that persons having notice were made by the statute an exception to the class or classes as to which the unrecorded instrument was made invalid; that the words “not having notice” are to he construed “unless he have notice.” A similar indication is found in McGrath v. Norcross, supra (at p. 134) If such is to be deemed the proper interpretation of the language of the act (and I conclude from these two, cases that it is), namely, that the unrecorded instrument is to he deemed void as to subsequent purchasers for valuable consideration, except such as have notice thereof, then it is logical enough to requne the holder of the unrecorded deed to prove that the subsequent grantee had notice, while requiring the -latter to prove himself to have paid value. The former would have the burden of bringing himself within the general classification of the statute, whereas the burden of proving that he also: came within the exception out of that general class would rest upon the latter.

I conclude, then, that defendants in the present case have the burden of proving that Mrs. Baumann or Cooley paid value.

There may also be noted in support of this conclusion, in addition to what: has been said earlier herein under the discussion as to notice, that the facts as to payment of consideration are peculiarly within the knowledge of defendants, it not being likely that complainant would have any knowledge thereof; also the language of this court in Van Doren v. Todd, 3 N. J. Eq. 397 (at p. 415) [the italics are mine] : “Nor is there any one who claims that sum that proves himself a bona fide purchaser, paying his purchase-money without notice;” and of the court of errors and appeals in Graves v. Coutant, 31 N. J. Eq. 763 (at pp. 778, 779) : “Upon the last point I agree with the master in his opinion, that her [defendant’s] uncertain statement of the consideration paid by her for this conveyance, and the small sum of $1,000 in money which she says she has paid, are insufficieni evidence of a fair purchase for a good consideration, of the large and valuable property described in the deed to her. * * * Jt is not only necessary that a defendant setting up a defence of a bona fide purchaser should clearly and unequivocally state in the answer that the purchase was for'value, without notice, but he must also set forth all particulars of the purchase and must distinctly prove them. There lias: been a failure in this particularity both in the answer and in the proof in this case.”

These two cases wore both on bills to enforce a vendor’s lien, and hence did not come under the scope of the recording statute. However, that the statute makes no change in this behalf on the question of purchase for value is indicated by Griffin v. Griffin, 18 N. J. Eq. 104, a case under the New York Recording act, apparently similar to ours, where Chancellor Zabriskie says (at p. 107) : “The complainant is not a purchaser for.a valuable consideration. Her claim is as dowress and by releases from her children, which are'lor a nominal consideration; she does not prove any consideration.”

And. in Holmes v. Stout, 10 N. J. Eq. 419 (at pp. 426, 427), the court of errors and appeals explicitly points out that our statute, like that of New York, makes the unrecorded deed void only as against a subsequent bona fide purchaser for valuable consideration.

Again, the defence of the statute is a purely legal one, as to which it is said by the court of errors and appeals in Page v. Martin, 46 N. J. Eq. 585 (at p. 589), that it must he clearly made out by him who sets it up. Cf., also, Crandall v. Graham, 115 Atl. Rep. 178 (at p. 180).

1 am unable to find anything in the case to sustain that burden on behalf of defendants. There was, as has been said, no evidence or testimony offered by defendants, and there is nothing in the complainant’s proof upon which they can rely. The fact that the deeds of conveyance were made to Mrs. Baumann and Cooley was alleged in the bill and admitted in the answer’s, but the payment of consideration is not admitted by complainant’s pleadings and neither the deeds themselves or the record thereof were offered in evidence. Hence, the rule that where the deed itself purports to be for valuable consideration it will be taken as sufficient proof thereof in the absence of any evidence to the contrary — Holmes v. Stout, supra (at p. 424); Roll v. Rea, 59 N. J. Law 264 (at p. 267)—cannot be applied. Neither can it be said, as to the deed to Mrs. Baumann, that in. such a case as this the relationship of husband and wife constitutes sufficient consideration. Cf. Annin v. Annin, 24 N. J. Eq. 184.

Defendants’ contention that specific performance will not be decreed because complainant has an adequate remedy at law is without merit. Dobbin v. Plager, 111 Atl. Rep. 404. Moreover, the argument made in this behalf, based on the fact that complainant had already contracted to sell the lands in question, tends to support rather than to negative specific performance, since without, it the subsequent contract could not be performed.

Defendants next contend that complainant is barred because vendor attended and was ready and willing to perform at the time and place agreed on, and complainant 'was not then able to1 perfornr. The answer to this is of course that under the contract in question, time was not of the essence, and that complainant was within t a reasonable time ready and willing to perform and tendered such performance. Furthermore, I am entirely satisfied from the evidence that vendor agreed to postpone the consummation. Vendor not only had no right to rescind, but did not attempt to rescind, or a.t least gave no such notice to complainant until after complainant’s tender of performance.

The next contention of defendants, that complainant, as the assignee of the contract of sale, cannot have specific performance, is also without merit. Pom. Eq. Rem. (2d ed.) § 851; Story (14th ed.) § 1024; 2 Warv. Vend. & Pur. (2d ed.) 864; Bateman v. Riley, 72 N. J. Eq. 316; Smith v. Anderson, 84 N. J. Eq. 681. It is no objection that there is a want of mutuality of obligation prior to' suit brought by vendee’s assignee. The criterion is mutuality of remedy at the time of decree. The assignee (complainant) has brought suit and placed herself within the jurisdiction of the court, and can be compelled to perform. Richards v. Green, 23 N. J. Eq. 536. Naugle v. McVoy, 115 Atl. Rep. 393, is of course in nowise any adjudication to the contrary.

The final argument of defendants is that Mrs. Baumann was not a party to the contract of sale to McVoy, and hence the suit will not lie against her. This is true in a sense; if she had not conveyed her inchoate dower interest to Cooley she could not he compelled to. convey to complainant, for she never contracted with complainant or complainant’s assignor to1 convey; neither will there be made in this suit, under the circumstances that have actually happened, any decree that she convey. Nevertheless, she is of course a proper party to. the suit, if not, indeed, a necessary party. But no conveyance, or. decree for conveyance, from her is necessary; her dower interest was extinguished by merger in the fee conveyed to1 her, and an3r possible contingent curtesy of her husband was extinguished by the deed to Cooley, and the conveyance, or decree for conveyance, from him to complainant will carry the title free of any encumbrances of dower or curtesy. The case is very similar in this aspect to Saldutti v. Flynn, 72 N. J. Eq. 157, and the procedure therein outlined would he adopted here were it not for this distinct variation; in the present case there is the double conveyance (from Baumann to his wife and from her to Cooley), and there is no evidence as to what, if anything, was paid, or agreed to. he paid by the wife to Baumann, or by Cooley to either Baumann or Mrs. Baumann. There is nothing to show, therefore, that there are any equities which require adjustment as among the defendants, and so. far as complainant is concerned, then, there are not; and if, as among defendants themselves, there be in fact such equities., complainant should not be delayed thereby, they having seen fit to' introduce no evidence thereof at the hearing. I think'the decree should provide for the payment to Baumann by complainant of the unpaid balance of purchase price, although, if-defendants desire, the payment can be made into court and the several interests of defendants therein as amongst themselves thereupon be determined.

Complainant is entitled to costs as against all the defendants. Of course, if the jurisdiction of this court in the case rested solely on constructive service, no personal decree, even for costs, could be made against any of the defendants. But by reason of the condition imposed in the orders for leave to answer, and the subsequent acts of the defendants, and the final determination against ihem of their original objection to the jurisdiction, they are now before the court on voluntary general appearance in the suit.


source: Caselaw Access Project

author: Fielder, Y. C. •

license: Public Domain

text:
    Adrianna S. Fields v. William Kelly et al.
    [Decided November 2d, 1921.]
    1. Under the Martin act (// Comp. £Ha1. p. 5212 et seq.) notice to redeem served on the owner was binding on a mortgagee who later obtained a deed in foreclosure.
    2. The right of possession of a purchaser at a tax sale November 1st, 1897, carried with it a right of entry which accrued more than twenty years before the suit, and the failure to exercise such right against the complainant's possession since May, 1898, was barred under 3 Comp. Stat. p. 3169.

    3. In a suit to quiet title where no evidence was offered by the purchaser at a tax sale explaining or accounting for the delay in making entry for twenty years, the presumption of payment is conclusive.
    On bill to quiet title.

      Messrs. Edwards £ Gmilh, lor the complainant.

      Mr. Randolph Perkins, for the defendant William Kelly.

      Mr. John F. Gough, for the defendants John Kelly and others.
   Fielder, Y. C. •

This is a bill to1 quiet title filed May 25th, 1920. Under foreclosure of a mortgage held by John J. Fields, a lot situate in Jersey Cit.y, with dwelling-house thereon, was sold April 14th, 1898. by the-sheriff of Hudson county to Fields-, whose deed from the sheriff was recorded May 7th, 1898. At a tax sale held November 1st, 1897. under the provisions of the Martin act (P. L. 1886 p. 149; Comp. Stat. p. 5205), the city of Jersey City sold the premises, in question to John T. Dillon for $747.54. Fields died in 1910, having been in continuous, open and exelusive .possession of the premises since receiving the sheriff’s deed, collecting rent therefrom, making repairs thereto and paying taxes and water rents levied thereon, and the complainant, as devisee under his will, continued in such possession from Fields’ death to the filing of her bill of complaint. Dillon died intestate in 1907 and the defendants to this suit are his next of ldn and heirs-at-law.

In March, 1898, Dillon caused notice to redeem to be served on the then owner or owners of the premises and upon others having interests therein or liens thereon, which notice was addressed to Fields (among others). The proof of service filed ■in the city clerk’s office shows that the notice was served on the parties to whom it was addressed, except Fields, as to him there being no pioof of service on file. No further proceedings were had under the tax sale and no deed, was given 'by Jersey City to Dillon. Complainant seeks to have the cloud on her title through this tax sale removed.

Referring to the Martin act with its amendments and supplements, as found in the Compiled Statutes, commencing at page 5205, the pertinent sections are 312, 313, 320, 329, 353 and 354. They provide that upon surrender of the certificate of sale and proof of service of notice to. redeem on the owner and mortgagee, the purchaser, after the expiration of six months from the service of notice, shall be entitled to a deed from the city and shall take title in fee-simple, of which title the deed shall be presumptive evidence; provided, that in case of a sale for taxes accruing after the passage of the act (which I assume is the instant case), no deed shall be given until one year after the sale. Any person having an estate in, or mortgage upon, the land and premises sold, may, at any time before a deed is delivered, redeem from the tax sale. The purchaser shall be entitled to possession immediately upon giving notice to redeem, if the land and premises are unoccupied, or if occupied, then within thirty days thereafter and shall have the assistance of the courts to place him in possession. When proof of service of notice to redeém on an owner or mortgagee has been duly filed, anyone claiming through the person served shall be bound by the notice served. In case any person interested, who is entitled to notice to redeem has not been served with notice and a deed has been given, the purchaser, the unnotified party may still be served, and failing to redeem, a supplemental deed may be given the purchaser.

Notwithstanding Dillon’s failure to serve notice to redeem on Fields, whose interest in March, 1898, was as mortgagee, Fields was bound by notice seiwed on the owner because Fields’ title came through foreclosure sale of the owner’s interest. Dillon had the right to take possession thirty days after the service of notice to redeem on the owner, or, in April, 1898, and if need lie, he cculd then, have applied to the courts to be put. in possession; and'lie was entitled to hold possession against every one served with or bound by notice to redeem, until the premises should be redeemed from the tax sale. One year after the sale, or in November, 1898, he was entitled to a deed as evidence of a title in fee-simple and of his right to possession as absolute owner. Dillon’s right to possession carried with it a right of entry which accrued more than twenty years before filing the bill of complaint herein, which right of entry is of the character-referred to in section 16 of an act for the limitation of actions. Comp. Stat. p. 3169. The continuous possession of Fields and complainant, since May, 1898, was open, adverse and hostile to Dillon and the defendants, and he and they having failed to make entry within the period limited by the statute, their right is now barred and cannot affect complainant’s title. Beatly v. Lewis, 68 Atl. Rep. 95; Gosman v. Pfitner, 80 N. J. Eq. 432; Abell v. Friedman, 90 N. J. Eq. 339.

Tf the notice to redeem was ineffectual because service was not made on Fields, and if, therefore, Dillon had no right of possession under it, then he and the defendants had nothing more than a lien.upon the premises, in question (Burgin v. Rutherford. 56 N. J. Eq. 666. 852; Bushey v. National Bank, 72 N. J. Eq. 466; affirmed, 75 N. J. Eq. 296; Abell v. Friedman, supra), and defendants are met by the rule at law and in equity that unless the delay for twenty years in enforcing their lien is satisfactorily accounted for or explained, presumption of payment is conclusive and cannot be rebutted simply by proof that the lien is uncanceled, and, therefore' presumably, unpaid. Gulick. v. Loder, 13 N. J. Law 68; Parisen v. New York and Long Branch Railroad, 65 N. J. Law 413; Bird’s Administrator v. Inslee’s Executors, 23 N. J. Eq. 363; Magee v. Bradley, 54 N. J. Eq. 326; Bluc v. Everett, 55 N. J. Eq. 329; affirmed, 56 N. J. Eq. 455; Congregational Church v. Benedict, 59 N. J. Eq. 136; Matthews v. Kelly, 70 N. J. Eq. 796. There being no evidence offered to explain the delay in enforcing the lien, the presumption is that it has been paid.


author: Fielder, V. C.

text:
    Charlotte Rommell v. May Happe et al.
    [Decided December 6th. 1921.]
    1. A deed direct from a husband to his wife passes an equitable estate in fee, and the wife is entitled to have the legal title from her. husband’s heirs.
    2. To constitute delivery of a deed it is not necessary that it be actually handed over to the grantee, but it must satisfactorily appear, circumstantially, at least, if not from acts and express words, or both, that the grantor intended to part with the deed and pass title.
    3. That an officer in whose presence a grantor executed a deed certified that the grantor acknowledged that he had signed, sealed and delivered it, is not conclusive evidence of delivery but may be rebutted by evidence showing that there was no actual delivery.
    4. A deed in the nature of a testamentary devise is void, as contravening the statute, of wills.
    Í5. A grantor who delivers his executed deed to a third person with instructions to record it after his death, may thus part with all control over it and make it the property of the grantee, but if he merely changes the place of deposit from his hand or pocket to a box to which he alone has the right of access, he does not thereby part with possession or control of the deed, especially when he instructs the grantee to record it after his death if he did not do so before.
    6. In a widow’s suit to recover a half interest in fee alleged to have been conveyed to the plaintiff by a deed executed by the decedent, evidence held to show" that the deed was not delivered nor intended to take effect in the grantor's lifetime.

      On bill, &c.

      Mr. Ernest L. Quackenbush, for the complainant.

      Messi's. McCarter & English, for the defendants Lillian J. Bird and others.

      Mr. Charles C. Pilgrim, for- the defendant Jesse R. Salmon, guardian ad litem.

   Fielder, V. C.

On August 29th, 1914, William H. Rommell was the owner in fee-simple in his own name of real property situate in the county of Somerset, and on or about that date, he executed a deed iherefor to his wife, the complainant, and to- his daughter, one of the defendants, Lillian J. Bird (then Lillian J. Rommell), and acknowledged the same -in the presence of a proper official, which deed, unrecorded, he placed and kept in a box in the home at which he and the grantees resided and where it remained until after his death. .He died intestate April 23d, 1917, leaving him surviving his wife, his daughter Lillian and eight other children, seven of whom are minors. The'deed was placed on record by complainant June 8th, 1917. The bill of complaint herein names the nine children as defendants and prays a decree that by the said deed an undivided one-half of the premises passed to the complainant in fee-simple and that said children have no interest in such undivided part. A guardian ad litem was appointed for the seven infant defendants-, who, on their behalf, filed an answer and counter-claim denying that the deed in question was delivered to the grantees and praying that it may he declared null and void, and that a decree be made that Rommell died seized in fee of the premises and that tire same descended to his nine children as tenants in common, subject to an estate in dower in complainant. Lillian J. Bird and May Happe (the other adult child) are R-ommelFs children by a marriage prior to. his marriage with complainant. An answer filed for them asserts that the deed in. question was delivered'to the grantees therein and that it was Rommell’s intention thereby to convev the premises in question to complainant and Lillian J. Bird as tenants in common.

The testimony tending to show the purpose Rommell had in mind when lie executed the deed, and his intention with regard to its delivery, is meagre and comes solely from the lips of the grantees. It appears that Rommell, his wife, the defendant Lillian J. Bird and the infant children resided together on the premises in question. Lillian was sickly and it was thought she would not marry and would continue to reside with complainant and assist her in the care of the young children, and, therefore, Rommell desired that the complainant and Lillian should have his property. He prepared the deed himself and then told his wife and daughter that he proposed conveying the property tothem and requested the former to accompany him to Bernardsville to have “his signature witnessed.” He had the prepared deed in his possession when he left home for Bernardsville, and at the latter place he signed and acknowledged it and the officer affixed a certificate of acknowledgment, his wife being present throughout all these formalities. When the certificate of acknowledgment was completed, Rommell took the deed, put it in his pocket and carried it home. At no time after he had placed the deed in his pocket did his wife see it prior to his death. Upon arriving home he deposited the deed in a box in which he kept all bis persona] papers and placed the box in.a drawer in a chiffoniei in which nothing was kept except his clothing and other personal belonging* and which stood in a bedroom occupied hv him and his wife. She did not see him deposit the deed in the box, but he told her that day he had put it there and he said if anything «hould happen to him, it would be in the box, and that if he did not have it recorded before he died, to have it recorded immediately after his death. From that day he did not speak to her or to his daughter concerning the deed, and after his death bis wife found it in the box, with other papers belonging to him, and about six week* after his death she had the deed recorded. At no- time did he say to* either grantee, “This is the deed ; I deliver it to you,” or equivalent words, and neither of them ever had the deed in her possession for even an instant of time. 'Lillian had learned, through a conversation she heard between her father and stepmother, that Rommell intended making a deed to1 them, and when he returned from Bernardsville he told her he had “made over the deed” to her and her stepmother, but he did not show it to her and she never saw it prior to her father’s death. ■ Lillian gave no testimony as to what was done with the deed after its execution or as to any statement made by her father tending to show delivery to- heir or to her stepmother.

The complainant would meet with no difficulty in enforcing her claim because .the conveyance was from the husband direct to his wife. Such a deed would be held to pass an equitable estate in 'fee and she would be entitled to have the legal title from her husband’s heirs. Sipley v. Wass, 49 N. J. Eq. 463; Vought v. Vought, 50 N. J. Eq. 177; Coudrey v. Coudrey, 71 N. J. Eq. 353. Her difficulty is that she has failed to show delivery of the deed by her husband to her or to the other grantee.

The elementary principles governing the question' of delivery of a deed are well settled. It is not necessary that there should be an actual handing over of the instrument to constitute delivery. A deed may be delivered! by words without acts, or by acts without words, or by both acts and words. A deed may be effectual to pass real estate though it be left in the custody of the grantor. It is necessary, however, that there should be something evincing the intent. It must satisfactorily appear, it not from acts and express words, yet from circumstances, at least, that there was an intention to part with the deed and of course pass the title. Crawford v. Bertholf, 1 N. J. Eq. 458; Woodward v. Woodward, 8 N. J. Eq. 779; Cannon v. Cannon, 26 N. J. Eq. 316; Ruckman v. Ruckman, 33 N. J. Eq. 354; Hildebrand v. Willig, 64 N. J. Eq. 249; Rowley v. Bowyer, 75 N. J. Eq. 80; Abbe v. Donohue, 90 N. J. Eq. 597; Folly v. Vantuyl, 9 N. J. Law 153.

The fact that the officer, in whose presence Rommell executed the deed, certified that the grantor acknowledged that he had signed,-sealed and delivered it, is'not conclusive evidence of delivery, but may be rebutted by other evidence showing that there was actually no> delivery. It frequently happens that a, grantor will execute and acknowledge liis deed’ several days’ in advance of the daté'on'which he intends to make physical delivery’of' it, and delivery-is not complete until the hi!ter'date arrives, when, by act or words, the deed passes from''the grantor’s possession, either actually or constructively, to the grantee. If, following his acknowledgment, Rommell had intended to record the deed immediately, but his purpose had been frustrated, there would be strong evidence'from which a present delivery could be inferred, but it is not claimed that he was in ill health and in fear that he might die before he could get it to the 'coúnt3r seat, or that he intended to record the deed so soon as it was possible or convenient to lodge it at the county clerk’s office. I do not think that either of these thoughts could have been in his mind when he told his wife that if he failed to record the deed she should have it recorded immediately after his death’, for he lived nearly three 3'éars after executing it. On the contrary, his intention appears to have been to continue his ownership of the property until such time as he might determine to record the deed in his lifetime, and should he decide, by withholding the deed from record, not to permit title to pass from himself to his wife and daughter in his lifetime, that they should not become the owners of the property until after his death. He said, in effect, that if he concluded at some later time to deliver the deed and give the property to his grantees in his lifetime, he would evidence such conclusion by recording the deed, and if he did not record it, there would be no delivery until after his death. If he had not intended to deliver the* deed at some future time, he would have given it to his wife when she was with him at its execution and acknowledgment, or upon their return home. Evidently, the conditions upon which the deed was to become effective in his lifetime did not occur, and so he left it to his wife to record the deed after his death, with the thought probably in his mind (because he left no will) that the deed Would take the place of a will. But if the deed was in the nature of a, testamentary devise, it is void, for the reason that it contravenes our statute on wills. Schlicher v. Keeler, 67 N. J. Eq. 635; Rowley v. Bowyer, supra; Abbe v. Donohue, supra.

It is argued on behalf of complainant that the execution and acknowledgment of the deed by the grantor, followed by notice thereof to the grantee and placing it in a box with instructions to the grantee to take possession of and; record it after the grantor’s death, is tantamount to delivering an executed deed by the grantor to a third person with instructions for its delivery to the grantee upon the grantor’s death, which form of delivery to a third person, on the authority of Rowley v. Bowyer, supra, is good. But, says the learned vice-chancellor who decided that-case, such delivery is good, unless accompanied by acts or words of the grantor which indicate a purpose on his part to reserve to himself control of the deed. In the instant case, the grantor made no delivery of the deed to anyone, and did not part with its possession o-r control from the time of its execution to the day of his death. It was a private paper, always kept by him with other private papers in a private place, and by no act or word had, he indicated an intention to part with control of it and make it effective as a conveyance. lie, undoubtedly, retained the right to destroy it and make other disposition of his real estate by deed or will. The learned vice-chancellor further said in the opening lines of his opinion in Rowley v. Bowyer: “Its [a deed’s] delivery is a matter of intention and the acts and declarations of the grantor are evidences of his intention. It is not delivered unless, or until it is the intention of the grantor .to perfect the instrument and make it presently effective as a conveyance.” A grantor who delivers his executed deed to a third person with instructions to record it after his- death and without further reservations, may thus- part with all control over the deed and make it the property of the grantee, hut a grantor who merely changes, the place of deposit of his executed deed from his hand or from his pocket to his box to which he alone has the right of access, and from which he and no-one else has the right to remove it, cannot be said to have parted with its possession or control, especially when he expressly reserves the right to decide when it shall become effective.

My conclusion is that the deed was not delivered and was not intended to take effect in the grantor’s lifetime, but was to take effect after his death, and is therefore null and void and should be set aside. The result is that Eommell died seized and intestate of tlie premises in question, which thereupon descended to his nine children as tenants in common, subject to the dower right of the complainant.


text:
    In the matter of the application of John J. Ganey and Mary A. Ganey for an allowance from the estate of Catherine A. Donahue, lunatic.
    [Decided December 21st, 1921.]
    1. That exceptions by a lunatic's guardian to the report of a special master allowing a claim against a lunatic’s estate, were not specific, is immaterial, as the lunatic is a ward of this court, and therefore this court will determine the broad question whether or not her estate should be charged with the payment of the claim.
    2. Under Supp. Comp. Stat. p. 7)98 § 7, the. value of services rendered for the care of the lunatic's child cannot be recovered.
    3. In proceedings under the same statute application should be made to the court before charging the lunatic’s estate with a claim for household expenses, in order that.it may be determined whether she has a household, and, if so, how much should be expended for the support thereof.
    4. Under the same statute, the estate of a lunatic confined in an asylum cannot be charged with money expended for maintaining her minor daughter elsewhere than in her own home by other than members of her own family, the duty of supporting the child being on the father, with whom she lived at the claimant’s home until he died, after which the lunatic had no “household” which is an organized family or domestic establishment consisting • of all those who share in the privileges and duties of a common dwelling; but under 3 Comp. Stat. pp. 3791, 3793 §§ 1/7'D, J/7L, I7ilf, a portion of a lunatic’s estate may be' applied, under order of this court, to the support of members of her family.
    5. One furnishing necessaries, such as food and lodging, to a lunatic, 1 may recover therefor, though the lunatic cannot bind herself by contract.
    O. Though it is the duty of a father to support and maintain his minor child, and on his death such duty devolves- on the mother, a parent cannot be compelled to support such child except in the manner pointed out in 2 Comp. Stat. p. 1931 et, seq., and Supp. Comp. Stat. pp. 1178, 1180 §§ 15, ?J,.

      7. No action can be maintained against a parent for necessaries furnished Ms minor child unless he has expressly or impliedly authorized the purchase thereof on his credit, though such authority may be inferred on slight evidence. The father’s obligation to support his child affords no legal inference of a promise to pay for necessaries.
    8. Expenditures for necessaries furnished a minor child of an insane mother by persons with whom the child was living at her father’s death, and who volunteered to care for her for humane reasons, cannot be recovered from the mother’s estate, as the duty of supporting the child was in the father before and after the mother was adjudged a lunatic, so that there was no continuing liability on her part from which an implied contract could be inferred, and she was incapable of entering into an express contract. This court, on proper application before the support was furnished, might have directed the lunatic’s guardian to pay from her income an annual sum toward the support of the child under the rule that the court will do that which it is reasonable to believe the lunatic would do if she could.
    On exceptions to special master’s report.

      Mr. Charlton A. Reed, for the guardian exceptant.

      Mr. Milton M. Unger, for tlie petitioners-respondents.
   Fielder, V. C.

John J. Donahue died February 4th, 1916, leaving him surviving bis widow, Catherine A. Donahue, and one child, Blanche then fourteen years of age. The widow had been adjudged a lunatic in 1913, and was thereupon committed to a county asylum, and subsequently transferred to the state asylum at Morris Plains, where she still is. For a month or two immediately preceding Donahue’s death, he and' his daughter lived with his sister, Mrs. John J. Ganey and her husband, paying them no board for the girl, and upon1 his death he left no real estate and practically no personal- property. After her father’s death Blanche continued to reside with Mr. and Mrs. Ganey. They were her sole support and they provided her with a. good home, clothed and cared for her and treated her as though she were their own, child, not by reason of any request from her parents, but because she was their niece and they were fond of her, although they expected that some time they might be recompensed fioni her mother’s estate for their expenditures on behalf of the girl.

Catherine A. Donahue owned certain real property which was sold some time in the present year under an order of this court, and the net proceeds of sale, about $5,800, came to the hands of her guardian, who has invested the same, and' the income accruing is insufficient to pay the lunatic’s support, which is at.the rate of one dollar per day, at the state asylum.

Mr. and Mrs. Ganey cared for Blanche in the manner above stated from February 5th, 1916, to August 3d, 1917, from which latter date the girl has supported herself. After the sale of the lunatic’s' real property, Mr. and Mrs. Ganey filed a petition in this court praying that the guardian of the lunatic be directed to pay them, from the lunatic’s estate, the money laid out by them for clothing and other necessaries for Blanche and a reasonable sum for her care, support and maintenance for the period aforesaid. The matter was referred to a special master who reported that the expenditures in question amount to $116.60, and that a reasonable sum for board, care, support and maintenance is at the rate of $10 per week for seventy-eight weeks, and that a. total of $896.60 is due petitioners and is a proper charge against the lunatic’s estate and should be adjudged a debt owing by the lunatic and as advances made on her account and services rendered for her and her estate and for the support of her household. It appears that there are no other claims against the lunatic’s estate; that she is about forty-three years of age and upon her death Blanche will be entitled to. what remains of her estate. Blanche, now twenty years of age, testified before the special master that she understands that if the petitioner’s claim is allowed, there will be less estate coming to' her on her mother’s death, but that, nevertheless, she considers the claim fair and just and approves of its payment. Exceptions, which are argumentative rather than definite, were filed to the special master’s report by the guardian of the lunatic. The fact that the exceptions are not specific is immaterial, because the lunatic is a ward of this court and I shall therefore determine the broad question whether or not her estate should be charged with the payment of the petitioners’ claim.

The petitioners rely upon the provisions of Supp. Comp. Stat. p. 798 § 7, which provides (a) that if the lunatic is justly indebted to' any person, or (6) if any person shall have advanced moneys, jmrchased necessaries or rendered services on account of the lunatic, for her care, support or maintenance, or for the preservation or beneirfc of her estate, beyond the ability of the lunatic to pay the same out of the income of her estate, or (c) in case the income of the lunatic shall be insufficient for her support and comfortable maintenance and that of her household, if any she shall have, the chancellor, after1 investigation of the situation and circumstances of the lunatic’s estate and of (a) the just debts owing by her and (b) of the advances that may have been made oar her account and of the services rendered for her, may order from time to time the guardian of the lunatic to sell such parts of her lands, or use so much of her estate already reduced to money, as the chancellor shall judge sufficient to pay (a) her just debts (Z>), the advances above mentioned and (c) proper and necessary for her support and maintenance and for the support of her household, if any she have.

The petitioners cannot maintain their claim under “b" because, thereunder, the moneys must have been advanced, the-necessaries purchased or the services rendered for the care, support- or maintenance of the lunatic herself, or for the preservation or benefit of her estate. Neither can they succeed under “c” because, thereunder, it must be made to appear that the lunatic had a household (which included her daughter) which should be supported by her estate. In my opinion, the proper procedure contemplated by the clause of the statute now under consideration, as well as the usual practice in this court touching expenditures from the income or principal of a lunatic’s estate, requires an application to the court before the estate can be charged with a claim for household expenses, in order that it may be determined whether the lunatic has a household for the support of which, in addition to her own support, her estate should be used, and if so, how much of the estate the guardian should be directed to expend for that purpose. But passing that thought, the question is-, did the lunatic have a household, for her estate can only be liable to the petitioners under the clause we are now considering, for moneys expended for the support of her household, “if any she shall have.” A household is an organized family; a domestic establishment; a family considered as consisting of all those who share in the privileges and duties of a common dwelling. I think that what 'the statute upon which the petitioners rely had in view is, the case of an incompetent residing in her own home, with members of her family who attend her and whose care and attention are necessary to her comfort and well being and that it does not contemplate the case of an incompetent in custodial care. I do not want to be understood to mean that under no circumstances can a portion of an estate of a lunatic be applied under order of this court to the support, of members of the lunatic’s family. Comp. Stat. p. 2791 §§ 47D, 47L, 47M. Speaking, now, only of the statute under consideration, I think it clear that *the lunatic bad no household. She had been confined in an asylum more than two. years before her husband’s death, during which time he and his daughter lived together, and the last month or two of his .life they lived with the petitioners. From the birth of the child up to the father’s death the duty of supporting her was on the father and not on the mother, and if there was a household, it was always the father’s and never the lunatic’s. -When the father died the lunatic not only had no household, but she had no established home to which she could go, had she been restored to reason. I conclude, therefore, that the lunatic’s estate cannot be charged for money expended by petitioners for maintaining the lunatic’s daughter on the theory that the lunatic had a household of which the daughter was a member.

It remains to be considered whether the petitioners have established their claim under “a.” Have they shown that the lunatic is justly indebted to them ? One who furnishes necessaries, such as food and lodging, to a lunatic may recover therefor. This is an exception to the general rule that, the lunatic cannot bind herself by contract and the lunatic is suable, at law for such debts. Van Horn v. Hann, 39 N. J. Law 207; Hurey v. Leavitt, 93 N. J. Law 299. But can a lunatic be bound by contract, express or implied, to pay for necessaries furnished to her minor child?

The duties of parents to their children rest equally on .both. Both parents being alive, it is the duty of! the father to support and maintain the minor child, and upon his death that duty devolves upon the mother (Osborn v. Allen, 26 N. J. Law 388; Alling v. Alling, 52 N. J. Eq. 92), but this court has no jurisdiction to compel a parent to support an infant child. Alling v. Alling, supra. Neither parent is legally compellable to perform such duty, except in the manner pointed out by the statute. Comp. Stat. p. 1931 § 17 et seq.; Supp. Comp. Stat. p. 1178 § 15; Supp. Comp. Stat. p. 1180 § 24. There is no statute under which the parent is liable to one who maj' take the parent’s place and perform the parental obligation and no action can be maintained against a. father (or mother) for necessaries furnished his minor child, unless the parent has expressly or impliedly authorized the purchase or expenditure on his credit, and while the authority may be inferred from slight evidence, yet where the father gives no authority and enters into no- contract, he is not liable. The obligation of a father to maintain his child affords no legal inference of a promise to pay for necessaries. Freeman v. Robinson, 88 N. J. Law 383. In the instant case, there certainly was no express authority given to the petitioners by the lunatic to support, maintain and clothe the gild. ^Before and after the mother was adjudged a lunatic, the'<dutymf' supporting the child was on tire father; so it cannot be said th|t,,-there was a continuing liability on the motl|firis pa-rtoffopr which!»-an implied contract can be inferred^''At her fathef3^S®.tfi the girl was living with the petitioners and: they^yolKite^ea to keep her and care for her for humane rea^is.y-jtB^ca^gethe mother was not mentally capable of knowing and cohse)*nng to what the petitioners proposed to do, I cannot pefeei^how she could enter into an express contract to pay the^^Srefor, and if she could not enter into an express contr^t*. n'one can be presumed against her. It may be that under’the statutes cited above, or under other statutes, had proper application been made -before the support was furnished, this court would have directed the guardian of the lunatic to pay from the lunatic’s income or principal an annual sum toward the support and maintenance of her child, •under the rule that the court in such a case will do that which it is reasonable to believe the lunatic herself would do if sire had the capacity to act (Potter v. Berry, 53 N. J. Eq. 151), but that is not the'situation here. The petitioners must show that the lunatic is indebted to them and such indebtedness must be founded upon an express contract or upon one which the court can imply from the circumstances of the case, and having failed to establish a contract, there is no debt owing by the lunatic to the-petitioners and their claim cannot be allowed.

The exceptions to the allowance of the petitioners’ claim by the special master are sustained.


text:
    Annie Platt v. John William Platt et al.
    [Decided January 23d, 1922.]
    1. Where real property is conveyed to J. W. P. and E. P., liis wife, and B. W. P. and A. P., his wife, without words defining or limiting the estate of the grantees, J. W. P. and his wife are seized as tenants by the entirety of an undivided one-half thereof which they hold as tenants in common with B. W. P. and his wife, who are seized as tenants by the entirety of the other undivided one-half.
    2. When title to real property is held, as above stated, either wife may maintain a suit against her husband and the other husband and wife, for partition of the shares held in common and in case the property is incapable of actual partition, a sale will be decreed and the proceeds paid into court and divided into two shares. Each share will be invested for the benefit of the husband and wife entitled thereto, during their joint lives and upon the death of one of them, the principal of such share will be paid to the survivor.
    3. As between husband and’ wife who are seized of real property as tenants by the entirety there can be no partition.
    On bill, &o.

      Mr. Pearce B. Franklin, for the complainant.

      Messrs. Payne & McCall, for the defendants.
   Fielder, V. C.

The land and premises sought to be partitioned consist of a two-family house erected on a lot twenty-five feet wide in front and rear by one hundred feet deep. The deed under which the parties have title is dated June 13th, 1919, and conveys in fee to John TV. Platt and Ellen Platt, his wife, and Bertram TV. Platt and Annie Platt, his wife. John TV. Platt and his wife are therefore tenants by the entirety of an undivided one-half of the land and premises which they hold as tenants in common with Bertram TV. Platt and his wife, who are also tenants by the entirety of their undivided half.

John TV. and Ellen Platt are the parents of Bertram TV. Platt, and in purchasing the property it was the intention of all parties to acquire a home in which all should reside, and after taking title the senior Platts occupied the upper floor of the house and the junior Platts the lower floor. Of the purchase price of $4,-500 the parties had $1,000 in hand and they raised the balance by borrowing $3,500 from a building and loan association, and to secure the repayment of that sum, all joined in a bond and executed a mortgage covering the premises. John TV. Platt and his wife claim that Bertram TV. Platt and his wife agreed to contribute one-half of the $1,000 paid toward the purchase price, and that in fact they paid nothing, and, therefore, have no interest in the premises as owners. I cannot allow this claim, first, because the evidence does not satisf3r me that the sum of $1,000 was not paid equally by the parties, and second, because at the time of this purchase the relations between the parties were harmonious, and the evidence, including the deed, indicates that it wa« the intention of John TV. Platt and his wife that the title should vest in Bertram TV. Platt and his wife equally with them, even if the purchasers did not contribute equally to the purchase price. It was also agreed between the parties that each Platt family should contribute in equal parts all money required to pay the monthly installments of principal and interest on the mortgage and for taxes, insurance, repairs and like charges against the property, and for a time this agreement was kept, bnt marital difficulties arose between Bertram W. Platt and his wife, and in January, 1921, she separated from him, and shortly afterward he moved from the lower floor of the house. John W. Platt and his wife still occupy the upper floor and they have leased the lower floor and are receiving the rent therefrom.. They claim to have kept up all the payments on the building and loan mortgage and to have paid the whole of certain taxes and other charges against the property.

Annie Platt, the wife of Bertram W. Platt, filed her bill August loth, 1921, against John W. Platt and his wife and Bertram W. Platt, praying for a partition of the premises and that an account be taken of the payments made by all parties for charges against the property since the date of the deed and for rent, received by John W. Platt and his wife, and also praying that they be charged with the rental value of the floor occupied by them and that the balance found due upon the accounting be charged against the share held in common liable therefor. The defendants contend that because they do not consent to a partition or sale, and because the complainant is not entitled'to immediate possession in severalty of her interest, she is not entitled to have a partition and. they deny her right to have an accounting.

Referring to our act concerning partition (Comp. Stat. p. 3897), I find that under sections 1, 26 and 44 partition may he liad 'in this court of land held by coparceners, joint tenants or tenants in common, notwithstanding that the share held by any coparcener, joint tenant or tenant in common may be for a less estate than a fee, or may be limited over after an estate for life, and that such partition shall bind all tenants of such share in remainder' or expectancy. I might note here that this court has inherent power to decree partition independent of the statute. Under sections 16, 22. 44 and 45, if an actual partition cannot be made, the land may he ordered sold and the net proceeds divided among the owners in proportion to their respective rights. The defendants base their opposition to partition upon section 27 of the act, it being tlieir contention that their consent to the partition is required: That section provides that where an 'estate in remainder -or reversion is owned by several persons as joint tenants or tenants'in common, one or all of whom desire partition, the-consent of the particular tenant must be obtained before partition can be had. That is not the situation here, for I am dealing now only with the two undivided shares, each of which is owned in fee by two persons, and as between these two shares there'is no remainder or reversion and no particular estate, such as an estate for life or less. The situation as between the husband and wife, owners of each share, presents another question which will be considered later. Usually, undivided shares owned in common are held by separate individuals, but here each undivided share is vested in two persons who are, as between themselves, tenants by the entirety of their share. If the premises sought to be partitioned consisted of two vacant plots of land of equal value, could it be argued that it would not be proper to decree an actual partition and allot one plot to- John W. Platt and Iris wife to hold as tenants by the entirety and the- other plot to Bertram W. Platt and complainant to- hold by a like tenancy ? Does the fact that the premises in question are incapable of actual division, and the further fact that complainant’s husband opposes a partition, present a barrier against ordering a sale under the statute? I do not think it can be doubted that, under a bill filed by complainant and her husband as the owners of a share in common, partition could be had, or a sale ordered, as against the two persons who own the other share, and it seems to me clear that complainant, as the owner of an interest, which might ultimately be a fee and certainly is an estate for her life in an undivided share is entitled to have that share, or the proceeds of a sale thereof, set apart from the other share, for the benefit of her husband and herself, so-that her estate in the share owned, by her husband and herself may no longer be subject to the rights of the owners of the other share. An actual partition being impossible, I shall order a sale of the premises, the net proceeds of which will be divided into two parts, one of which will belong to John W. Platt and his wife and the other to complainant and her husband.

It must now be determined wliat division or disposition should be made of these two parts. The seizin of each husband and wife in the undivided share which they respectively own in the land, is that of a. tenancy in common for their joint lives, with remainder in fee to the survivor. Neither husband nor wife holds the estate by moieties, but both are seized of an entirety, and neither can dispose of the fee without the consent of the other. During their joint lives they have equal rights to the usufruct of the property. It therefore follows that partition cannot be had between husband and wife of air estate held by the entirety and the Partition act omits mention of such an estate. When the character of the property is changed by sale in partition from land to money, the court cannot order a division of the money between John W. Platt and his wife and between Bertram W.' Platt and his wife, but the same will be held under the control of the court to await the death of the husband or wife, and when the question of survivorship is determined, the principal will be ordered paid to the'survivor. In the meantime, each share in thé net proceeds of sale will be invested under the direction of the court, and the interest arising on the investment of each share will be paid equally to the husband and wife during their joint lives. This is .the course provided by sections 45, 47 and 48 of the Partition act. Of course, after the property is sold and the net proceeds of sale ascertained, the share of each husband and wife may be paid to them, if they desire it, upon their joint receipt or release, and they may make such division or disposition of their share as may be agreeable to them. •

An account between the parties will be ordered for the purpose of ascertaining what each set of tenants in common is chargeable with and what each has properly paid out for charges against the property and for its maintenance, which account shall be- taken from the date of their deed, and John W. Platt and his wife wilL be charged with the rental value of the floor occupied by them from and including February, 1921, as well as for all rent received by them from the other floor. By Comp. Stat. p. 8 § 3, a tenant in common out of possession may have an action of account against his co-tenants for receiving more than their share of the profits from the property jointly owned, where the tenant out of possession is excluded by the others and an exclusion may occur where there is no express refusal by tire tenants in possession to allow the co-tenant to occupy, as, for instance, if possession of the whole has been taken by one of the co-tenants and used by him as his own, or for his exclusive profit. Whatever balance is found upon the accounting to he due from one set of co-tenants to. the other set, should be charged against and deducted from the share of the proceeds of sale of the co-tenant liable therefor.

It appears by the hill of complaint.and the proofs that besides the building and loan mortgage, which was. executed by all the parties, the defendants gave another mortgage for $600, which covers only their interest in the property, because complainant did not join therein. The bill prays that the mortgages he paid and that the amount of each mortgage he charged against the share of the persons liable on them, by which, I assume, complainant to mean that a sale he ordered free of the mortgage liens. The mortgagees are not parties to this suit, but, under section 58 of the Partition act, a sale may be ordered free from mortgage liens and the proceeds of sale brought into court, and, under section 59, application may be made for the satisfaction of the mortgages out of the proceeds, To offer the property subject to the lien of the second mortgage on the estate thereby encumbered, would seriously affect the sale of the property, and, therefore, I shall direct that the sale he made free of the. lien of that mortgage and that the rights of the mortgagee be determined when the proceeds of sale are in court. I am not satisfied that- a sale free from the lien of the first mortgage will he for the best interests of the parties. It may be that the property will bring a better price if sold subject to that mortgage, because a purchaser would not he required to produce so much cash. This question was not discussed in the argument of counsel, and on this point they may agree, and if not, I would like their views when the form of the decree is before me for settlement.


author: Walker, Ordinary.

text:
    In re estate of Theodore N. Vail, deceased.
    [Decided March 28th, 1922.]
    The payment to the comptroller of the treasury of a five per cent, tax based upon the full value of the shares of stock in a New Jersey corporation, owned by a non-resident decedent to secure a waiver for the transfer of such shares in advance of the levying by the comptroller of the tax to which the estate is liable, is a payment of the tax, pro tanto if the assessment ultimately made is greater than the amount so paid and entitling the executor to the surplus if such advance payment is greater than the assessment when made; and such payment — that is, payment to secure waiver, if made within six months from the death of decedent, entitles the executor to the five per cent, discount on the tax allowed by the Transfer Inheritance Tax act (P. L. 1909 cli. 228 § 5, as amended by P. L. 1918 oh. 283), and prevents the running of interest on the tax pro tanto or totally, as the amount of the tax may be less or greater than the amount of the advance payment, if the tax is levied a year or more after the death of decedent; and it seems that interest would not run for another reason, namely,, because the time of the assessment and levy were not attributable in anywise to the executors.
    On petition for revision and readjustment of inheritance tax.

      Mr Eckcard Thomas Moore, for the petitioners.

      Mr. William Newcorn, assistant attorney-general, contra.

   Walker, Ordinary.

Theodore N. Vail died April 16th, 1920, domiciled in Vermont. He left a will in which he appointed ■ the petitioners executors.

On July 31st, 1920, in order to secure waivers for the transfers of certain shares of stock of the estate the executors paid five per cent, of the full value thereof to the comptroller of the treasury of this state, amounting to the sum of $11,602.50, and on August 6th, 1920, in order to secure waivers for the transfer of certain other shares, they paid five per cent, of the full value thereof to the comptroller, amounting to the sum of $12.338.82, the total being $23.941.32. On October 12th, 1920. the executors made a return for taxation to the comptroller and transmitted therewith á letter in which they advised that official that they were not remitting anything on account of the tax, as they had already paid the sum of $23,941.32 for consents to transfer of certain shares, naming them, as they computed the tax actually payable by the estate, less the five per cent, discount allowed under section 5 of the statute if the tax is paid within six months, to be less than the amount already paid. The payments remitted to the comptroller were made within six months of the death of Mr. Vail.

On September 9th. 1921, the comptroller notified the executors in writing of the amount of the tax claimed by the state. It included interest as for deferred payment and totaled $22,152.62, leaving an ■ amount to lie refunded out of tlie $23,941.32 of $1,788.70.

The executors claim that because of the'payment of the $23-941.32 within six months from the death of the decedent, they should be allowed a discount of five per cent, from $21,150.16, the amount of the tax assessed, and that the interest charged thereon is unlawful and should be set aside. '

The Transfer Inheritance Tax act (P. L. 1909 ch. 228, as amended by P. L. 1918 ch. 283) provides that-all taxes imposed shall be due and payable at the death of the testator, &c., and if the same are paid within six months from such death, a discount of five per cent, shall be allowed and deducted; but if not paid within one year interest at ten per cent, per annum shall be charged after that date.

It will be observed that Mr. Vail died April 16th, 1920, and that within six months thereafter the $23,941.32 was-paid to the comptroller by his executors. It was not until September 9th, 1921, that the assessment was made, more than a year after the death of decedent. And this, it is said, was clue to the pendency of litigation in another case having a bearing on this one, which case, however, was not cited. The executors were in nowise responsible for this.

The question for solution on this record is, Shall the estate pay interest on the tax as assessed by the comptroller or shall the executors lie allowed a discount and deduction of five per cent, for payment of the tax within six months of Mr. Vail’s death, and this in turn depends upon whether the $23,941.32 was. a payment of the tax or a deposit to secure a transfer of stock. This calls for a construction of P. L. 1914 ch. 58, a supplement to the Transfer Inheritance Tax act

The supplement provides that whenever a foreign executor, &c.. shall desire to transfer stock in a New Jersey corporation, owned by a non-resident decedent, it shall be lawful for the comptroller to issue a waiver, &c., upon such executor -paying to the comptroller a five per cent, tax based upon the full value of the shares; and provision is made that when the exact tax which the stock is liable for shall have been ascertained the comptroller shall pay it to the treasurer; but if the stock was not liable to the full five per cent, tax, the comptroller shall pay to the executor the amount overpaid.

The assistant attorney-general contends that the act of 191-1 does not provide for the payment of a tax, but only the method whereby waivers for the transfer of stock in advance of payment of transfer inheritance tax may he procured. I am unable to agree with this view. By the terms of the original act (section 18) the comptroller assesses and fixes the cash value of the estate and levies the tax to which it is liable, and-the tax (at the rate of five per cent, of the clear market value of the property, except as otherwise provided) shall be paid to the state treasurer. Now, if there he no preliminary transfer the tax is payable directly by the estate’s representative to the treasurer, but in case a transfer is sought before the comptroller assesses and levies the tax, payment is made in advance to him, and when the exact tax is ascertained the comptroller pays to the treasurer — that is, transfers to him, out of the advance payment required by the act, the. amount of the tax. If the amount advanced to the comptroller were not a payment, but a mere deposit by way of security, then surely a method of repayment would have been provided after proper adjustment was made. But, be it observed, the estate does not get the money back after paying it to the comptroller, unless there be a surplus, and then only the surplus. Not only by the nature of the transaction, hut by the very terms of the statute, the deposit with the comptroller is. a payment, in advance, it is true, but none the less a payment.

If the tax paid in advance to secure a waiver for transfers were less than the total amount of the tax as finally assessed and levied, the- executors would he entitled to the five per cent, discount on the tax so paid in advance, pro iaivbo, and if an advance payment amounts to the sum of the tax when levied, or more, then the executors would be entitled to a. discount on the total amount of the tax; 'and if the tax is not assessed and levied until -a. year or more after the death of decedent, the advance payment would prevent the running of interest even after such levy pro ianio or totally, as the amount of the tax might he less or greater than the amount of the advance payment; and if the tax were not levied for a year or more after decedent’s death, then, if the tax were promptly paid after levy, interest would not run for another reason, namely, because the belated date of assessment and levy were not attributable in anywise to the executors.

The result reached is that the discount claimed must be allowed and the interest retained must be refunded.