text:
    The Grand Lodge of the Ancient Order of United Workmen of New Jersey v. Sarah A. Connolly.
    [Filed May 5th, 1899.]
    1. Under the constitution of a grand lodge of a beneficial society providing that there can be no change of beneficiary in a certificate except in a certain manner, a waiver of this by officers of a subordinate lodge is ineffectual, they being invested with no power to consent to a change of such manner, the grand' lodge issuing the certificate and making assessments for and payments from the-beneficial fund, and the duties of the officers of a subordinate lodge relative to change of beneficiary and to payments being merely ministerial.
    2. One to whom, under the constitution of a beneficial society, the benefits are to be paid in case of the death of the beneficiary during the life of the member, without such member making other direction in the manner provided’ by the constitution and by-laws as to their payment, may assert the failure to make such direction in such manner, as against one claiming the benefits-under an attempted new direction in an unauthorized manner.

      John S. Connolly, of the borough of Pleasantville, Atlantic county, made application on March 29th,'1883, through Pleasantville Lodge, No. 26, to the Grand Lodge of the Ancient Order of United "Workmen of Maryland, New Jersey and Delaware, for a beneficiary’s certificate. The certificate was issued April 7th, 1883, and recited the admission of Connolly to membership in the order, with the right to participate in the beneficial fund of the order to the amount of $2,000, which sum was to be paid at his death to Emeline Connolly, his wife. Emeline died November 20th, 1883, leaving four children by her husband. Shortly after the death of his wife Mr. Connolly went to the. officers of the lodge at Pleasantville and stated that he wished the policy to be payable to his children. He was informed by the officers that all that was necessary was to hand the certificate to the children, and that they, upon his death, could deliver the said policy to the proper officers and receive the beneficial fund. On October 14th, 1893, Mr. Connolly married Sarah A. Delaney. He died September 10th, 1895. The entire amount of the beneficial fund is claimed by the children on the one hand and by his widow on the other hand. The complainant has paid the beneficial fund into court on a bill of interpleader, and the respective defendants now interplead.

      Mr. Charles V. D. Joline and Mr. Robert H. Ingersoll, for the complainant.

      Messrs. Godfrey & Godfrey, for the defendant.
   Reed, V. C.

The organization of the order consists of subordinate or local lodges, of grand lodges and of a supreme lodge. The grand lodges are established by the supreme lodge in prescribed territorial districts, containing a number of subordinate lodges. Each grand lodge is composed of the past master workmen in the subordinate lodges in its particular jurisdiction. The supreme lodge is composed of representatives elected by the several grand lodges. Each grand lodge has control over the subordinate lodges in its jurisdiction, subject to a right of appeal to the supreme lodge. Each grand lodge may adopt a constitution and by-laws not inconsistent with the constitution and general law of the supreme lodge, and can prescribe a constitution for the government of subordinate lodges in its jurisdiction. Some subordinate lodges are under the immediate jurisdiction of the supreme lodge, and the supreme lodge adopts laws and regulations applicable to their government. The grand lodge may issue beneficial certificates to members of the subordinate lodges in its jurisdiction in like manner and subject to the same laws, rules and regulations as those prescribed for the government of such lodges.

Article 8 of the constitution of the supreme lodge provides in section' 1 that upon the death of a master workman degree member in good standing, of a subordinate lodge in the jurisdiction of the supreme lodge, such person or persons as such member may have directed while living shall be entitled to receive of the beneficial fund of the order the sum of $2,000 upon certain conditions.

Section 17 of article 8 provides that any member holding a beneficial certificate desiring at any time to make a new direction as to its payment may do so by authorizing such change in writing upon the back of the certificate, attested by the recorder, with the seal of the lodge attached, and by the payment to the supreme lodge of the sum of fifty cents, but no change of direction shall be valid or have any binding force or effect until such change shall have been reported to the supreme recorder, the old certificate being filed with him and a new beneficial certificate issued thereon and the said new certificate shall be numbered the same as the old certificate.

• The Pleasantville lodge is within the jurisdiction of the Grand Lodge of Maryland, New Jersey and Delaware.

Article 23, section 6, of the constitution of this grand lodge provides that if all the beneficiaries shall die during the lifetime of the member, and he shall have made no other direction in the manner provided by the by-laws of the order, the benefits shall be paid to his widow, if any.

Section 7 has the same provision in respect to the manner of changing the direction in the beneficial certificate as that contained in the provision in the constitution of the supreme lodge. The constitution of the grand lodge, so far as it is not inconsistent with the former, and the certificate make up the contract entered into between the grand lodge and the member ‘ for it is entirely settled that the constitution and by-laws in. respect of which the contract is entered into, form a part of the contract itself. Holland v. Chosen Friends, 25 Vr. 490; American Legion of Honor v. Smith, 18 Stew. Eq. 466. Inasmuch, therefore, as there was no new direction of a beneficiary in the manner provided by the laws of the order, under the terms of the contract, the widow is entitled to the fund.

But the children of the member rely upon the proof that, after the death of his first wife, the member desired to make a new direction in their favor, and communicated his intention to the officers of the subordinate lodge, who told him that nothing was necessary to accomplish the purpose beyond the delivery of the certificate to such new beneficiaries. Even if it is within the power of a beneficial society to waive a compliance with the requirements of the contract in respect to a change of beneficiaries, which it seems it is not (Bac. Ben. Soc. § 430), nevertheless no waiver would arise by reason of the circumstances above disclosed.

It is to be observed that the officers of the subordinate lodge were invested with no power to consent to a change of the manner of directing a new beneficiary. The only officer of the subordinate lodge who has anything to do in effecting a new direction is the recorder, and his duty is merely ministerial, i. e., to attest the signáture of the member to the designation of the new beneficiary, to take the beneficial certificate and to forward the certificate to the grand recorder. It is then the duty of the grand recorder to make the record of the change in the books of the grand lodge and to issue a new certificate.

It is the grand lodge which makes all the assessments for the beneficial fund, and upon approval of the proof of the death of a member, to issue a warrant for the payment of the benefit due his beneficiary upon the receiver of the grand lodge, which warrant is forwarded to the recorder of the subordinate lodge, who delivers it to the beneficiary, receiving his receipt, which he is to forward to the grand recorder.

The certificate is issued by the grand lodge, and the beneficial fund is paid by the grand lodge, and the officers of the subordinate lodge have no duties but the simple ministerial function of transmitting the warrant to the beneficiaries and the beneficiaries receipt to the grand lodge.

It is apparent, therefore, that the officers of the subordinate lodge have no power to waive any provision adopted by the grand lodge in respect of the relations of a member to that body. If this was an action brought by the children against the grand lodge to recover the benefit, the futility of their claim, in the face of the contract thus displayed, would be obvious.

But it is insisted that the position of affairs in this instance differs from that which would be presented if this was an action by the children directly against the company. It is pointed out that this is a bill of interpleader and that the order has placed the fund in court, to be paid to whomsoever it shall be decreed to belong; it is then insisted that the regulations in respect to the manner in which the new beneficiary shall be appointed is only for the benefit of the order itself, and that if the order raises no objection to the regularity of a new appointment it is not in the power of the widow to do so; it is, therefore, urged that an intention to make a new direction in favor of the children can be proved in any manner, and if proved, will be regarded and enforced by this court.

In support of this view the cases of Splawn v. Chew, 60 Tex. 632; Manning v. Ancient Order of United Workmen, 86 Ky. 136, and Raub v. Association, 3 Mackey D. C. 68, are cited.

Indeed, a number of other cases are cited, but they seem to have involved points which have no relation to the facts in this case.

The view taken by the courts of Kentucky and Texas are exceptional, and are opposed to the great weight of authority, and are so treated, by Mr. Bacon in his work on Benefit Societies § 308. Mr. Bacon states the rule to be, that the member must revoke his designation of a beneficiary and appoint a new one, in the way pointed out by the laws of the organization. Id. § 807.

The case of American Legion of Honor v. Smith, 18 Stew. Eq. 466, was one in which a bill to interplead was filed by the order. The interpleading defendants were the widow and brother of the deceased member. The facts were that the certificate had been issued upon the life of the member, in which his wife was named as beneficiary. The wife was divorced from the member, and afterwards he made a written application to the order to change the beneficiary from his wife to his brother, stating that he was unable to surrender the certificate because his wife refused to give it up for cancellation. The order refused to issue a new certificate until the late certificate was surrendered. While affairs were in this condition the member died. The rules of the order provided that a member should surrender his certificate and have a new one issued, and further, that no act of a member done for the purpose of changing his beneficiary should entitle the new beneficiary to any benefit unless such act was in strict conformity with the by-laws of the corporation, nor until such act had been ratified and approved by the corporation. The court said: The best-considered cases upon this subject are uniform in holding that the by-laws above recited constitute an essential part of contracts like the one under consideration, and that no person can successfully assert a right to a fund payable on the death of a member unless he can show that he has been appointed a beneficiary by said member in the manner required by the contract.”

In that case no objection was raised by the order, for it was, like this, a case of interpleader.

In this case, therefore, I am constrained to the conclusion that, as there was no designation of a new beneficiary in the manner provided for by the laws of the order, the widow, under the contract between the member and the grand lodge, is entitled to the payment of the beneficial fund.


source: Caselaw Access Project

author: Reed, V. C.

license: Public Domain

text:
    Albert H. Atterbury, executor, &c., v. Joseph B. Stafford.
    [Filed September 18th, 1899.]
    Testator, by will, bequeathed “to the children of Dr. James B. S. * * * $500 apiece,” &c. Testator had a brother, Joseph B. S., who was a physician. He had a nephew, James B. S., who was not a physician. The evidence showed that James B. S., though not a physician, was familiarly known among his associates as “Doc.” or “Dr.,” and had once been a clerk in a drug store, all of which was known to the testator, who was accustomed to allude to him in the same manner. — Held, that the name must control, and that James B. S. was the person meant.
    On bill for construction of a will.
    Samuel B. Stafford died on October 16th, 1897, leaving a will, the fourth clause of which reads thus:
    “ To the children of Dr. James B. Stafford, I bequeath $500 apiece; if any of his said children shall have died prior to my death leaving issue, such issue shall receive the share which the parent would have taken.”
    The admitted facts are these: The testator had one brother, Joseph B. Stafford, and one sister, Sarah S. Stafford. Joseph B. Stafford died before the testator made his will. Joseph B. Stafford left the following children: Robert C. Stafford, Catharine Mcllvaine, Mary E. Lappeous, John S. Stafford and James B. Stafford. All these children save James B. Stafford were living at the time of the testator’s death. James B. Stafford died before the testator and left four children, all of whom were alive at the time of testator’s death. Joseph B. Stafford, one of the four children of James B. Stafford, deceased, claims $500 under the fourth clause of the testator’s will. The children of Dr. Joseph B. Stafford oppose this claim and insist that they are entitled to the bequest contained in the said fourth clause.

      Mr. James Buchanan, for the complainant.

      Mr. Linton Satterthwait, for the defendant.
   Reed, V. C.

The bill charges that there is no such person as Doctor James B. Stafford; that there is a James B. Stafford, but that he is not a doctor. It charges that Joseph B. Stafford was a physician and that he was the person intended by the testator, whom he described as Dr. James B. Stafford. The extrinsic testimony displays an alleged ambiguity. The legate§ whose children are to take is said to be either misdescribed or misnamed. Therefore, to enable the court to strike out what is false in the designation of the legatee, and so carry out the intent of the testator, parol testimony has been introduced to show the number, the degree and the kinship of the testator’s relations as well as how he regarded them and talked about them. Lord Camoys v. Blundell, 1 H. L. Cas. 778; Thomas v. Thomas, 6 Durn. & E. 671; Vernor v. Henry, 3 Watts 393; Smith v. Smith, 1 Edw. Ch. 189 ; affirmed, 4 Paige 272.

The evidence I think establishes the fact that James B. Stafford, while not educated as a physician, and although not practicing as a physician, yet was familiarly known among his associates as Doc.” or Dr. It seems to have been a matter of reputation that he had once been a clerk in a drug store, and so, probably in that way, acquired the prefix to his name.

It seems to be proved that he not only.was so styled Dr. or Doc. amongst his associates, but that the testator knew all this, and he himself was accustomed to allude to him in the same manner. This being so the prefix to his name would not indicate that the testator had mistakenly applied the name to the wrong person. It is true that in a previous will made by the testator he distinguished Joseph B. from James B. by styling the former Dr.” and the latter merely James B. While this is a circumstance which would, in case there were doubt whether the testator had ever called the latter Dr., be of great importance, it loses nearly all of its force in view of the very strong testimony that the testator, as already remarked, had frequently alluded to and addressed James B. as Dr.

It is urged also on behalf of the children of Dr. Joseph B. Stafford, that the testator in his former will had provided for, and had spoken kindly of Mrs. Lappeous, a daughter of Dr. Joseph B. Stafford, and therefore it is insisted that it is unlikely that he intended to cut her out from any benefit under the present instrument. But it is to be remarked that in the former will he recites that he had in a still earlier will provided for the purchase of a house for James B. So it appears that at one time James B. was exceptionally warm in the regard of the testator. It is true that in the former will he announces his intention of giving nothing to the children of James B., James B. being then dead; but in the same will he announces that no part of his estate shall be inherited by any persons claiming to be children of Dr. Joseph B. Stafford, except Mrs. Lappeous. Therefore the provisions of the present will, whether Joseph B. or James B. was intended, exhibits a radical change in sentiment from that presented by the former will.

In addition it appears that the testator, who had lived in Virginia, occasionally on his way from Virginia north stopped off at Philadelphia, and visited James B. Stafford, who lived there. It is quite as probable that the old regard which he had manifested for James B. in the earlier will had later revived in favor of his family, as it is that he had changed his mind in favor of all the children of Dr. Joseph B., after announcing that no part of his estate should reach any of them except Mrs. Lappeous.

I am therefore constrained to the conclusion that the name must control, and it must be assumed that James B. Stafford was the person meant.


text:
    Locomotive Engineers’ Mutual Life and Accident Insurance Association v. Fannie Winterstein et al.
    [Filed October 7th, 1899.]
    1. A certificate issued by a beneficial insurance association upon the life of a member in favor of a third person, where neither the constitution nor by-laws of the society nor the certificate confer upon the members a power to change the beneficiary, invests the beneficiary with a vested interest in the certificate.
    2. The member cannot defeat such vested interest by surrendering the old and taking out a new certificate.
    3. In case of such change of certificates, the extent of the vested right of the beneficiary in the old certificate is its value at the time of the change.
    4. In this kind of insurance the value is the difference between the amount payable upon the death of the member and the amount of payments, with interest; which will be required to keep the certificate alive during the probable period of the member’s life.
    5. A by-law adopted after the issuance of the certificate, giving a member power to change a beneficiary, held not to be retroactive.
    The Locomotive Engineers’ Mutual Life and Accident Insurance Association was incorporated in 1894. Before that time the organization had existed and insured lives as a voluntary association. In 1884, George Winterstein, a locomotive engineer, insured his life in said association in one policy for $3,000 for the benefit of his second wife, who was then living. This wife died on November 14th, 1889. After her death George Winterstein went from Easton, where he had lived, taking with him his daughter Fannie, to live at Mauch Chunk with his brother John and sister Martha Winterstein. After his wife’s death he sent the policy of insurance back to the company’s office in Cleveland, Ohio, and caused a new policy for $3,000 to be issued, payable to his daughter Fannie. This seems to have been about January 1st, 1890. Some time after this he moved from Mauch Chunk to Phillipsburg, and left Eannie and the policy of insurance with his sister Martha at Mauch Chunk. In April, 1894, while he was boarding at Phillipsburg, New Jersey, he married Julia Rustay. Julia says that he told her, before their marriage, that .if she would marry him he would give her his insurance in the brotherhood of engineers. After the marriage George, who was running his engine between Phillipsburg and Mauch Chunk, saw his .daughter Eannie, or his sister Martha, or both, at the station at Mauch Chunk, and told her or them that he had to have new policies issued on account of the association making a new constitution and by-laws, and requested that the old policies should be sent to him. His sister gave the policies to Fannie, who met her father at the station and gave the papers to him. It seems to be a fact that the voluntary association, after it became incorporated, called in all outstanding policies and issued new certificates in their stead. George upon receiving the old policies forwarded them to the company, and caused to be issued in their stead two new policies for $1,500 each on July 18th, 1894, payable, not to Fannie, his daughter, but to his third wife, Mrs. George Winterstein. These two policies seem to have been delivered to the beneficiary. This was the condition of affairs until April 21st, 1897, on which date George again caused a new certificate to be issued to his daughter Eannie, and seven days later, April 28th, 1897, he died. The amount of the benefit fund is claimed on the one hand by Eannie, the daughter, and on the other hand by Julia, the widow. The company have filed a bill of interpleader and paid the amount into court, and Eannie and Julia now interplead.

      Mr. John I. B. Reüey and Mr. William 3. Morrow, for the defendant Julia Winterstein.

      Mr. Sylvester O. Smith, for the defendant Eannie Winterstein.
   Reed, V. C.

The policy issued in 1894, in which the wife was named as beneficiary, was in her possession at the time of the death of her husband, but as already remarked, he had, in the manner pointed out by the by-laws, changed the beneficiary in 1897 and substituted his daughter for his wife. If George, as a member of the order of locomotive engineers,' had the power in 1897 to change the beneficiary, then having executed the change in conformity with the rules of the order, the fund belongs to his daughter Fannie.

But the claim made on behalf of the widow is, that she had a vested interest in the policy, of which she was not divested by the attempted change in the beneficiary made in 1897. This claim of a vested interest is put upon two grounds — first, that there was no power in the insured to change the beneficiary in any event; and second, that the policy was issued to her in coni sideration of marriage, and therefore she held it for a valuable consideration. The question whether apart from the consideration of marriage there was a vested right in the wife, which could not be defeated by the subsequent change of beneficiary, must be answered by the construction of the plan of insurance itself. The question of the power of a person insured to strip a named beneficiary of all interest in the policy and transfer it to another arises in two classes of insurance contracts. One class is the ordinary class of life insurance and the other class is where the contract is executed by a beneficial society. In the first class the beneficiary is named in the original contract and becomes a party to the contract, whose interest becomes vested at once. Bliss L. Ins. § 318; Stone v. Hackett, 12 Gray 227; Ferdon v. Canfield, 104 N. Y. 143; Landrum v. Knowles, 7 C. E. Gr. 594.

In certificates given by beneficial orders there is usually merely a power conferred upon the member whose life is insured, to appoint beneficiaries from a certain class of relations and change the same. In this class of policies the contract is held to be made solely with the member, and that the beneficiary appointed has only a contingent interest in the policy, of which he is liable to be stripped by the member naming a new beneficiary in the manner required by the rules of the association. Bac. Ben. Soc. § 289.

But the presence or absence of the unlimited power of change of beneficiary depends, not upon the character of the association which insured, but upon the form of the contract entered into with the insured. The right to change a beneficiary may exist in a policy written by a regular company, if it is so stipulated; or it may be non-existent in a certificate written by a beneficial order, if the instrument is to be so construed. The form of policy usually written by a regular company differs from the form of a certificate ordinarily issued by a beneficial association, and these differences account for the general rule that in the former the named beneficiary can and in the latter oannot be changed. The existence, therefore, of a power to change the beneficiary must be sought for in the contract which is entered into between the insuring organization and the insured. General language, indeed, may be found in the opinions in a few cases which indicates a view that a right to change a beneficiary springs from the fact that the certificate is written by á beneficial order. But a close examination of the numerous cases in which this power has been recognized discloses that, almost without exception, the power has been discovered in some provision in the charter, constitution, by-laws of the order, or in the certificate written in the particular instance, or in an absence of a delivery of the certificate.

The few cases holding a different rule are mostly grounded upon the case of Masonic Benefit Society v. Burkhart, 110 Ind. 189. That case was based upon a dictum in the case of Presbyterian Mutual Fund v. Allen, in support of which dictum a number of cases were cited which, with one exception in my judgment, fail to sustain it.

The contract of a beneficial association with its members is made up of the application for membership, the certificate issued, which is an acceptance of the application, and the charter, constitution and by-laws of the society, and in its construction and effect does not differ essentially from an ordinary policy of insurance. Holland v. Chosen Friends, 25 Vr. 490; Golden Star Fraternity v. Martin, 20 Vr. 207; American Legion of Honor v. Smith, 18 Stew. Eq. 466.

The point to be ascertained, therefore, is what was the contract entered into by the complainant?

Neither the original certificates issued, in which the second Mrs. George Winterstein was the named beneficiary, nor the second certificate, in which the daughter Fannie was named, are in evidence. These papers were delivered up to the association and destroyed. Both of these contracts were with the unincorporated association. The two policies issued, in which the third Mrs. George Winterstein is the beneficiary, and tha last policy issued, in which Fannie is named, were both issued after the incorporation of the association, and are in evidence. These three policies are substantially in the same form, of which the following is a copy.

The italicised words are in writing and the rest is printed.

“ Organized December 3d, 1867.
“Incorporated March 1st, 1894.
“Locomotive Engineers’ Mutual Life and Accident Insurance Association.
“ Certificate of 1 Membership No. 4657 & Policy of Life Insurance.
“This certifies that Gewge Winterstein was admitted a member of this association this nineteenth day of July, 1884.
“Cleveland, 0., July 18,1894. A. B. Tomgson, Prest.
“Harry G. Hays, Gen. Secy. & Treas.
“All payments of benefits that may accrue or become due to the heirs of the person insured by virtue of this policy will be payable to Mrs. Geo. Winterstein wife or his lawful heirs.
“Which cannot exceed the amount the association shall be able to pay from the assessments.”

The other certificate to the second Mrs. Winterstein is the same as the first, with the single difference that it is No. 4658.

The last certificate to Fannie of April 21st,. 1897, is drawn in the same form, with the exception that the printed words “ his lawful heirs ” after the words “ Fannie Winterstein, daughter,” are erased. Although the form of the certificate issued before the incorporation of the company is not proved, I have no-doubt that they were in the same form.

In regard to the constitution and by-laws of the association, it seems never to have had a constitution — at least none is offered in evidence. The by-laws offered in evidence are those adopted after its incorporation in 1894. ■ Whether these by-laws were copies of regulations adopted by the voluntary association does not appear.

The incorporation seems to have been effected under the revised statutes of Ohio of 1891. Rev. Stat. 1891 § 3680. This statute, which is the charter of the incorporated association, confines the benefit of the insured to her or to one of the family insured. Mutual Aid Association v. Gonser, 43 Ohio St. 1.

The statute is silent concerning the change of beneficiaries. The by-laws adopted March 3d, 1894, just after the incorporation of the association, are also silent upon this point; so that up to May, 1896, there is nothing to show that there was ever anything in the regulations, charter or by-laws respecting the change of beneficiaries.

In the absence of a power to change the beneficiary the beneficiary once named obtained a vested interest in the certificate. This was so held by the Supreme Court of Colorado in construing a certificate issued by this association in the case of Love v. Clune, 24 Col. 237.

In May, 1896, the following by-law was adopted: “A policyholder of this association, having designated his beneficiauy or beneficiaries, may change the same at his pleasure without notice to or consent of the beneficiary or beneficiaries by returning former certificates issued to the home office, and informing the president and general secretary of the changes desired. Person or persons named as beneficiary or beneficiaries, accepting any interest in the policy or certificate issued by this association, do so upon the express terms and conditions contained in this article.”

At the time of the adoption of this by-law, the beneficiary was the third Mrs. Winterstein, the widow. The change to Fannie was not made till April, 1897. It may be remarked at this point that the adoption of this by-law in May, 1896, leads to the inference that it was the first provision of this kind in the history of the association.

The insistence of the counsel for Mrs. Winterstein is that there was no power existing before the adoption of this by-law to change the beneficiaries, and that Mrs. Winterstein had a vested interest in the policy at the time of the adoj>tion of the by-law; and further, that the by-law was not intended to affect existing certificates.

I think the insistence that the by-law was not intended to retroact is correct. The concluding clause of the by-law, which provides that persons named as beneficiaries accepting any interest in the policy or certificate issued by this association, do so upon the express terms and conditions contained in this article, undoubtedly refers to future beneficiaries.

Nor do I see how the contracts of insurance made by this association, so far as they are displayed by the testimony, differ in respect to the point in question from the contract of an ordinary insurance company. The contract is that the benefits will be payable to the named beneficiary. It is not a contract that they shall be payable to the person to be named by the member. The beneficiary is in the first instance named by the member just as the beneficiary in an ordinary life insurance policy is named by the person who effects the insurance; but it is not the power to name the beneficiary, but the power to change the beneficiary that strips such beneficiary of any vested interest in the policy when it is once executed and delivered. Therefore, if the two certificates of 1894 had been the first of a series of policies issued to George Winterstein, I would be of the opinion that her right to the fund would be unaffected by the change of beneficiary executed in April, 1897.

But these two policies were not the first of the series, for, as we have already seen, a policy was issued for the benefit of the second wife, and also a policy for the benefit of the daughter, preceding the issuance of the policy to the present widow. In my judgment all these policies must be considered a part of the series, although issued in part by the association while voluntary and in part while incorporated. The delivery of the old policies and issuance of new ones would not break the continuity of the insurance. Olmstead v. Reys, 85 N. Y. 598; Whitehead v. New York Life Insurance Co., 102 N. Y. 143.

The question then is, what effect upon the otherwise vested right of the widow in her policies did the issuance of the preceding policies have?

The first-named beneficiary, the second Mrs. Winterstein, died in 1889. Ordinarily where the insured survives those specified to take at his death, the insurance money, where no other disposition is made of it, becomes, at his death, a part of his estate to be administered as his will, or in the absence of a will, as the law may direct. 13 Encycl. L. 654. Under this rule, upon the death of the beneficiary, the right in the policy reverted to George Winterstein. -The first beneficiary was also the wife of the member insured; therefore, even if .upon her death her interest in the policy went to her estate, her husband would take it as her administrator juri mariti, and his subsequent act in causing the policy to be re-ipsued to his daughter would amount to a gift to her of his interest.

So when the certificate was issued to Fannie it was equivalent to the issuance of a new policy. Therefore, if what has been said in respect to the policies issued to the present widow is correct, it is equally applicable to the policy issued to Fannie, and if the widow would have taken a-vested interest in her policy had it been first of the series, Fannie took a vested interest in this policy for like reasons.

Indeed the only answer made to this position is that the member has a right to change his beneficiary until the policy is actually delivered to such beneficiary, and it is insisted that it is not proved that George ever delivered the certificate to Fannie.

There is a line of cases so holding: Lemon v. Phœnix Mutual Life Insurance Co., 38 Conn. 301; Johnson v. Van Epps, 110 Ill. 551.

But it seems to me that where an ordinary policy of life insurance is written upon the life of one person, in favor of another, at the instance of the former, and is delivered to him, and he holds it for years, making the payments of assessments upon the same, it amounts to a settlement upon or gift to the beneficiary, even if the former person had not handed it over to the beneficiary. When such a policy is issued and delivered to the person whose life is insured the contract is complete. The right of the beneficiary to such money upon the death of the insured becomes perfect from the moment of delivery to the latter. If the insured dies the company is bound by its contract to pay the beneficiary the fund. In what respect could this .right be enlarged by a delivery of the policy to the beneficiary? and if the right was completed by reason of the delivery of the policy to the latter, how could such right be defeated by the acts of the company and the insured, to which acts the beneficiary was a stranger? In my judgment, the policy itself, when accepted by the insured member, becomes a declaration of the trust in favor of the beneficiary and subsequent payment of premiums or assessments upon the policy are gifts to the beneficiary. In Whitehead v. New York Life Insurance Co., supra, there was no delivery to the beneficiary.

But there is evidence of a delivery of these policies to Fannie. It is to be recalled that after the death of Fannie’s mother, George and she, who were living at Easton, went to live with John and Martha Winterstein, at Mauch Chunk.

Martha, in whose charge Fannie was, says distinctly that after the change of policies in favor of Fannie she had possession of those policies and that'George himself left them with her. The policies seem to have been kept in a drawer of a bureau which belonged to the mother of George, John and Martha, at the homestead. The mother was living when Fannie’s mother died, and when George left and went back to Phillipsburg to live the policies were left at Mauch Chunk, with Martha, who says she had no other papers of George but this policy. John Winter-stein says that his sister had possession of the policy.

I think that, in view of these conditions — the testimony of Martha and John — it appears that the policy was left in charge of Martha, who had charge of Fannie, to be used for Fannie’s benefit in case anything happened to the father, and that this is to be regarded as a delivery of the policy to Fannie herself.

•But, assuming that Fannie had a vested interest, the question remains, what was the character of that interest ?.

The case of Landrum v. Knowles, 7 C. E. Gr. 594, dealt with this question. An ordinary life insurance Avas taken by a wife on the life of her husband and made payable to her children. After the payment of several premiums she assigned the policy in payment of the debts of her husband, and thereafter the assignee paid the premiums up to the death of her husband. It was held that the children were entitled only to the value of the policy at the time of the assignment.

This result was arrived at by regarding the payments made by the mother as executed gifts to the children. That case differs from the present case in the particular that here the premiums were all paid by the father. But I do not' see how it differs in principle. Suppose the wife in the former case had agreed with the assignee to keep the premiums paid. The payments, after such assignment, would have been made, not for the benefit of the children but of the assignee. She would have unmistakably so announced. How, then, could such payments have been regarded as gifts to the children ? Now, here the father, after the new certificates were issued to his wife, was paying his assessments as gifts to his wife. The vested interest of his child, therefore, would be confined to the value which had been given to the certificate by his previous payments. In the kind of policy before the court in the case of Landrum v. Knoivles, supra, its cash value at the time was readily computable. But in the kind of insurance now before the court, how is the value of a policy at any particular time to be calculated ? That it may have a value seems clear. A member, by reason of age or disease, may have become uninsurable upon a new application, for, by the by-laws, no sick member or member over the age of fifty is eligible for insurance. The subsisting policy, therefore, may have obtained a value, for the reason that, on account of age or sickness of the insured member, the future assessments would be obviously much less than the amount to be received at the member’s death. The value of each policy may vary, therefore, according to the age and health of the insured. A general rule for the ascertainment of the value of such a policy at any particular date would seem to be this: deduct from the amount of money payable upon the death of the insured the amount of future assessments and dues, with interest from the time of their payment up to the time of the member’s death. There is in this case nothing to show that the insured at the time of the assignment of the policy to Julia was not in an average condition of health. I therefore think that the policies were worth to Fannie at that time the sum of $3,000, less such future assessments as would have to be paid during a period equal to the probable duration of the life of the insured by the established table of mortality.

No testimony was taken to meet this view of the case, and therefore upon the points indicated — first, the age of the insured when he caused the new certificates to be issued to Julia, and secondly, the amount of assessments and interest which should be payable during the probable life of the insured — I will either myself hear the testimony or refer the taking of the same to a master.


author: Stevens, V. C.

text:
    Samuel I. Serrell et al. v. Sylvester J. Betts.
    [Submitted February 6th, 1899.
    Filed February 25th, 1899.]
    Encumbered property was purchased by S. for B. S. instructed B. to have the deed made to himself direct, “ making you subject to the present bond and mortgage now against the same.” In her letter she stated that she would guarantee B. that she (S.) would pay off the mortgage. B. took the deed and therein covenanted to pay the mortgage. — Held, that this covenant to pay was a sufficient consideration for the guarantee of S. to discharge the mortgage indebtedness.
    On bill.

      Mr. James P. Northrop, for the complainants.

      Mr. William P. Carey, for the defendant.
   Stevens, V. C.

The complainants are executors of Mary E. Serrell, and as such file their bill to foreclose two mortgages, one made in the year 1885, to secure the sum of $900, and the other made in the year 1890, to secure the sum of $400. Both of them became vested by assignment in Mary E. Serrell,'complainants’ testator, under the following circumstances:

The defendant, Sylvester J. Betts, is pastor of the People’s Church, in Bayonne. Adjoining the mission or church in which he officiates is the house and lot covered by the above mortgages. Mrs. Serrell being much interested in the work of the mission and in its minister, became desirous of giving him this property for a parsonage. Accordingly, on March -25th, 1896, it was purchased in his name for $1,600. Of this sum $1,200 represents the principal then due on the above mortgages and $400 was given by Mrs. Serrell to Mr. Betts to pay the balance of the purchase-money. The day before the deed was acknowledged and delivered she wrote him as follows:

“Mr. S. J. Setts:
My Dear Sir — You will please see that the deed of the property that is to he transferred to-morrow is made out in your name and making you subject to the present bond and mortgage now against the same, and I hereby guarantee you that I will pay off the same and take care of the interest of it in a short time. I am yours resp’y,
“March 24, 1896. Mary E. Serreei,”

The deed referred to in this letter, which is dated March 23d, 1896 — that is, one day before the letter was written, and two days before it was acknowledged and delivered — contains the following assumption clause:

Subject, however, to certain mortgages now a lien on said premises held by estate of C, P. Vreeland, upon which there is now due the sum of $1,200 of principal besides interest; and said party of the second part assumes and agrees to pay the said sum due and to grow due upon said mortgages as part of the consideration for this conveyance.”

On May 13th, 1896, Mrs. Serrell took and recorded an assign-ment of the mortgages and died one year afterwards, without having canceled them, and without having made any demand upon Mr. Betts for either principal or interest. To the bill to foreclose, Mr. Betts files an answer by way of cross-bill, setting up the above guaranty and asking that the mortgages be canceled.

The only question raised by the pleadings is whether the guaranty contained in the letter is founded on sufficient consideration ; the claim on the part of the complainants being that it is, for lack of such consideration, nudum pactum.

I think the promise enforceable, because based upon the assumption clause in the deed. If the property had been conveyed to Mr. Betts subject to the mortgages merely, there would have been no consideration for the promise. There would have been neither benefit to Mrs. Serrell nor detriment to Mr. Betts. The liability to pay taxes, insurance and interest would not have been a detriment within the meaning of the expression consideration.” The burden would have arisen subsequently and might, besides, have been avoided altogether either by a resale or by a simple refusal to pay. But Mr. Betts expressly covenanted with his grantors to assume the payment of the mortgages and this cast upon him a primary personal obligation to discharge them. The obligation thus imposed was clearly legal detriment. It is true that the property itself might have ultimately sufficed to indemnify Mr. Betts against loss. It might or it might not. But what he undertook was a present obligation to pay on demand (for b.oth the bonds had then matured), a large sum of money. The evidence is that he was a missionary without means of his own, dependent for support upon the bounty of those interested in his work. He was quite unable to meet any demand upon him for the money and he might well have hesitated to enter into an obligation to pay it without having been previously indemnified. It seems to me, therefore, that the covenant, which was virtually a covenant to pay on demand the sum of $1,200, was a sufficient consideration for the promise.

So far the case seems clear. The difficulty that I have had has arisen out of the language of the guarauty. Does it make the mere transfer of the property the consideration for the promise, or does it make the assumption of the mortgages the consideration ? I think it makes the assumption, the consideration. Mr. Kennedy, who acted in the matter, was not sworn to explain what took place. Counsel on both sides preferred to rest solely on the documents. Only the signature of the letter, which seems to have been penned by one having some knowledge of legal forms, is in Mrs. Serrell’s handwriting. This is its language: “You will please see that the deed of the property that is to be transferred to-morrow is made out in your name and making you subject to the present bond and mortgage against the same.”

Now the property, as has been stated, was already subject to the mortgages, and Mrs. Serrell recognizes this when she uses the expression “against the same.” When she says, then, “ making you subject to the bond and mortgage,” she refers to something in addition to the liability already recognized as existing. Not only is the property to be subject to the bond and mortgage, but Mr. Betts is to be subject to it. But how otherwise can Mr. Betts be subject to it than by assuming it? It would seem, therefore, reasonable to conclude that the then owner of the property having demanded that the purchaser assume the encumbrance, the guaranty was given to indemnify Mr. Betts against the consequences of entering into such a covenant.

The will of Mrs. Serrell has nothing to do with the case. The property in question belongs to Mr. Betts personally, while the bequest of $2,000 is “to be used by him at his discretion in evangelical work in Centreville, Bayonne.” Pom. Eq. Jur. §§ 533, 537.


text:
    William H. Morrow v. John Cole et al.
    [Argued November 18th, 1898.
    Filed March 1st, 1899.]
    • An acknowledgment of a mortgage made to one of two executors, as such, before a master who was the other executor, is valid, where the mortgage on its face does not disclose his interest therein, since the taking of the acknowledgment was a ministerial act.
    On bill.

      Mr. William H. Morrow, pro se.

      Mr. George M. Shipman, for the defendants.
   Stevens, V. C.

The complainant, in addition to the first mortgage which he holds and which he is foreclosing, holds a .judgment against the mortgagor, Cole. This judgment was recovered on November 22d, 1895. On November 11th of the same month, Cole executed a mortgage to Samuel I. Raub, one of the executors of George W. Smith, which was acknowledged before L. De Witt Taylor, the other executor, and recorded immediately. If duly recorded, it is admitted that it is a lien prior to the lien of the judgment. If not, it is a lien subsequent. The contention is that the master was disqualified from taking the acknowledgment by reason of his interest as executor, and that the deed not being duly acknowledged, its record was not notice. The interest of Taylor was, at most, an interest in executors’ commissions and is not disclosed by the record itself but by extraneous evidence.

It is held in a number of cases that if it appear on the face of the deed that the officer is either a party thereto, or a cestui que trust named therein, the acknowledgment is void and the record not notice. Wilson v. Traer & Co., 20 Iowa 231; Bowden v. Parrish, 86 Va. 68; Wasson v. Connor, 54 Miss. 351. Some dicta go further and assert that the interest of the acknowledging officer, whether it appear upon the faoe of the deed or not, will render the acknowledgment a nullity. Groesbeck v. Seeley, 13 Mich. 345; Wills v. Wood, 28 Kan. 411. These dicta cannot be supported. Aside from the case of a married woman, as to which it is not necessary to express an opinion, it appears to me very plain that if the interest does not appear on the face of the deed, the record is notice.

The complainant’s contention is that the officer who takes an acknowledgment performs a judicial act and that as no man can be a judge in his own case, such act, if done by one interested, is void. This contention is unsound. The act is no more judicial than ministerial. A judicial act ordinarily has reference to some controversy. There is nothing suggestive of controversy in an acknowledgment. It is said that the officer must be satisfied that the person who appears before him is the grantor and that his determination that he is, is a judicial act. But the duty of identifying people; of being satisfied that they are what they claim to be, is discharged by all sorts of administrative officers— for example, by a treasurer who pays out money — and not only by officials, but, at times, by every member of the community. It may as well be predicated of the act, then, that it is ministerial as that it is judicial. Nothing else that the officer does has even the semblance of judicial action. He makes known the contents of the paper; he hears the grantor say that he signs it as his voluntary act and deed, and then he makes a written certificate of the facts.

. If the act of the officer is not judicial, the doing of it is not adjudging one’s own case. If the grantor takes his own acknowledgment, it is of no effect, because it is obviously contrary to the provisions of our statute on the subject. If the grantee takes the grantor’s acknowledgment, it cannot be said, perhaps, that any express provision of the statute is violated, but the act, nevertheless, is void, not because we have here an instance of a judge deciding his own case, but because the same public policy which prevents an interested judge from acting, will (with certain reservations) prevent an interested master or commissioner. The distinction is important in this respect. The decisions of judges should always be above suspicion. To insure this result, the judges themselves should be absolutely free from the bias of self interest and ’ the rule of public policy should be rigidly enforced. To apply it as rigidly to the case of commissioners, whose public functions are so .different, would work little benefit and would lead to results antagonistic to the policy of the registry laws.

It may be safely asserted that it would be much more injurious to public interests to hold that extraneous proof of an undisclosed or secret interest (almost always slight) would avoid acknowledgments and thus render the record of conveyances unreliable than it would be to hold the contrary. Says Chief-Justice Waite in National Bank of Fredericksburg v. Conway, 17 Fed. Cas. 1203: “It is against the policy of the recording acts to hold an acknowledgment void because of the secret interest of an officer taking and certifying it. The effort should be to prevent rather than allow hidden defects in the evidence of public records.” Accordingly he held the acknowledgment under review in that case to be a ministerial act and the record notice. Such was also the decision in Lynch v. Livingston, 6 N. Y. 422, and Kimball v. Johnson, 14Wis. 674. Both reason and authority ooncur in declaring where the interest of the acknowledging officer does not appear on the face of the deed that the acknowledgment is not void, and that the registry of the deed is notice.

In Wells v. Wright, 7 Halst. *132; Marsh v. Mitchell, 11 C. E. Gr. 497; affirmed, 12 C. E. Gr. 631, and Homœopathic Mutual Life Insurance Co. v. Marshall, 5 Stew. Eq. 110, the question related to the effect to be given to the declarations contained in the acknowledgment of a married woman: how far they were disputable. In the last of these cases Chancellor Runyon, dissenting, in a measure, from the view expressed in the previous cases, was of opinion that the act of the officer in ascertaining whether the married woman executed the conveyance of her own free will, without threats and coercion was a judicial act. Perhaps with more accuracy it might be designated gwcm-judicial. Hitz v. Jenks, 123 U. S. 302. Whether judicial or hot, it is manifest that these decisions do not touch the present case. They do not deal with the question of notice. I think the registry of the mortgage was notice, and that therefore it is a lien prior to the jud 'ment.


text:
    Oscar L. Richards v. Sindel Weingarten et al.
    [Filed March 10th, 1899.]
    1. Where, in action to foreclose a mortgage, the defence is usury and the proof shows a usurious bargain, but the usurious contract proved does not correspond with that set up in the answer, the variance is fatal.
    2. Where, on foreclosure, defendant pleads usury, but there is a variance between the contract as set up in the answer and as proven by the evidence, unless complainant consents to forego the usury, defendant will be allowed to amend his answer to conform to the proofs.
    On bill.

      Mr. Patrick H. Gilhooly, for the complainant.

      Mr. William H. Corbin, for the defendants.
   Stevens, V. C.

The bill is filed to foreclose a mortgage given by Sindel Weingarten to the complainant, Richards, to secure the sum of $3,848.34. The defence set up is usury. The usurious bargain is averred to have been made in the city of New York, and the statute of the State of New York is pleaded in avoidance of the entire debt, principal and interest.

The case is, in some respects, not unlike Taylor v. Morris, 7 C. E. Gr. 607, in which the court of appeals laid down the following rule: “When usury is set up by a plea in an action at law or in an answer in chancery, the terms of the usurious contract must be precisely and correctly set out; the quantum of the usurious interest must be specified and the proof must correspond, with the allegations.” It is admitted that the proof shows a usurious bargain, but it is contended that the contract proved does not correspond with that set up by the answer, either in respect of the amount of the real debt, whose payment was forborne, or of the bonus given for forbearance.

I think this contention is sustained by the proofs. And, first, as to the amount of the debt forborne. This in the answer is simply stated to be the sum of $3,405.88. It is not therein shown how that sum was ascertained, nor out of what transactions it originated. The proof shows the following facts: On January 26th, 1893, the mortgagor executed a mortgage to complainant on lands in Union county to secure the sum of $8,750. Of this sum only $6,500 was really lent. The balance represented a bonus, ascertained by capitalizing interest in such a way that, at the maturity of the mortgage, the mortgagee would receive the principal sum of $6,500 and interest thereon at twelve per cent, per annum. Within a year after this mortgage was made, a building on the mortgaged premises was destroyed by fire. A dispute arose between mortgagor and mortgagee in reference to the insurance money; the mortgagee began a foreclosure suit and the mortgagor threatened to interpose the defence of usury. While matters stood thus the parties got together and entered into a written agreement of settlement. This agreement bears date May 17th, 1894, and, although there is a conflict of evidence on this point, I think it was the intention of the mortgagee, upon the receipt of the insurance moneys, to accept a new mortgage for the difference between the amount really lent and the amount of the insurance and thus eliminate the usury. . In point of fact, however, the mortgagee failed to do this. To the amount actually received by Weingarten ($6,500) were added three items, viz., $437.50, $250 and $175. The first of these items represented ten months’ interest on the whole amount of principal named in the original mortgage. Of this sum $112.50 was interest on tlie usurious element in it. The next item ($250) represented what the complainant called “his expenses on the first loan; ” it was the amount which complainant had paid to his New York attorney out of the original bonus as “ his piece of it.” The last of the three items ($175) was a legitimate charge representing counsel fees, search fees and costs. The sum of these three items added to $6,500 is $7,362.50. From this sum, deducting the amount of the insurance checks credited (viz., $3,514.16), the remainder is $3,848.34, which is precisely the amount of the new mortgage. If from this we take, first, the interest on the usurious excess, $112.50, and then the item $250, there remains of lawful principal, $3,485,84; whereas the answer avers it to be $3,405.88.

Secondly, as to the amount of the bonus. The answer avers it.to be the sum of $442.46, whereas by the proofs it appears to be, as I have said, $112.50 plus $250, or $362.50. It is attempted to explain this variance by showing, that Weingarten paid interest upon the original mortgage in August, 1893, and that of this interest $65 represented interest on the original bonus and should be taken into the account. If this be so, the bonus in the new mortgage would be $427.50, or about $15 less than the amount averred. There would, therefore, still be a variance. I think, however, it ought not to be included for the reason that it did not enter into the contract made in May, 1894, and it is that contract alone, under the averments of the answer, which we are investigating. The answer might have set up the facts connected with the original contract and made this payment material by insisting that it was a proper subject of deduction from the amount originally lent. But it did not. The case seems in this respect to resemble the above-mentioned case of Taylor v. Morris — a case in which usury entered into the original transaction — but had not been sufficiently pleaded in t.he answer to make it part of the defence. Following the rule laid down in that authoritative case, I am bound to say that there is a material variance between the pleading and the proofs.

Logically, the defence not having been sustained, it would seem that eomplaiuant is entitled to recover according to his contract. But in the ease of Cubberly v. Glading, 2 Stew. Eq. 104, while declaring that the defence of usury was not sustained in the manner in which it had been alleged, Chancellor Runyon said that he would not give the complainant the benefit of the premiums he had received, and that unless complainant would consent to deduct those premiums he would allow defendant to amend. This case went to the court of errors and was affirmed for the reasons given by the chancellor {3 Stew. Eq. 339). As it went there on the appeal of the mortgagor, the right of the mortgagee, in that regard, was not, in the appellate tribunal, under consideration; and the opinion on this point cannot, strictly speaking, be said to have received the endorsement of that court. Still it is so eminently just that it must commend itself to everyone. Chancellor Runyon appears, from the report, to have deducted nothing but premiums. Vice-Chancellor Van Fleet, in the subsequent case of Cox v. Westcoat, 2 Stew. Eq. 551, went further. The defendant having confessed to some usury, though not the usury alleged, he allowed an amendment and advised a decree on the amended answer, sustaining the defence. The usurious bargain having been made in this state, the effect of that decree was to enforce a penalty to-the extent of interest and costs only. Even in such a case,, however, it seems to me that the course taken was not quite in harmony with the judgment of the court of errors in Taylor v. Morris, where Mr. Justice Depue says: “The plaintiff on a successful defence loses the interest on the sum lent and the costs-of the suit, both of which he would be entitled to recover on a demand not obnoxious to the provisions of the statute. To this extent the defence involves a forfeiture as a penalty and the rules of evidence touching the enforcement of a penalty still apply.” If an amendment were allowed in the present case there could be no recovery whatever, for by the law of Yew York the entire debt would be forfeited, and Taylor v, Morris would be practically overruled. I doubt very much whether on principle the-court ought, in any case, to go further than compel, through the power it has to allow amendments, the deduction of the premium or bonus and interest thereon.

If the complainant consents to forego the bonus and usurious interest received, I will advise a decree in his favor. If not, I will hear an application to amend.


text:
    Mary Fahy v. Mary Fahy et al.
    [Filed March 14th, 1899.]
    Equity has no jurisdiction of a bill by a widow praying a decree that under her husband’s will she took a legal estate in fee-simple in all his real estate as against her children, whose answer merely asks that their interests be protected.
    On bill.

      Mr. John A. Dennin, for the complainant.

      Mr. John Garrick, for the defendants.
   Stevens, V. C.

The complainant, who is the widow of Charles H. Fahy, claims by her bill that under the will of her late husband she takes a legal estate in fee-simple in all his real estate. She asks the court to so decree, as against her infant children. The question presented is manifestly a purely legal one, viz., whether a legal estate in fee-simple is created by the terms of the devise. The complainant neither stands nor pretends to stand in the position of a trustee or cestui que trust. No duty has been imposed upon her by the will, as to the performance of which she might ask the direction of this court, except possibly one in reference to testator’s mother, and that duty has, if it existed, been terminated by her death.

The children do not by their answer consent (if their consent would be of any avail) to have the question presented determined by this court. They set up no specific defence, but ask generally that their interests may be protected. And the bill is not one to quiet title. It does not contain the statutory requisites of such a bill. Under these circumstances it is plain that the legal question must be determined by a legal tribunal. Hart v. Leonard, 15 Stew. Eq. 419 ; Bowers v. Smith, 10 Paige 193. It has never been held in this state, so far as I know, that where the question is otherwise purely legal, doubt or uncertainty as to the meaning of the document which gives rise to the question, renders it equitable; and such a view seems altogether out of harmony with the repeated adjudications of the court of appeals on the subject of the respective provinces of courts of law and equity as adjusted by the constitution.

I think the bill should be dismissed for want of jurisdiction.


author: Grey, V. C.

text:
    Frank C. Hann v. Ruth E. Hann.
    [Filed February 28th, 1899.]
    The burden of sustaining the defence of a condonation of acts of adultery is not met by evidence that the husband, for three or four days after his knowledge thereof, remained at his home and occupied the same sleeping apartment and bed with his wife, it not satisfactorily appearing that during such time there was any reconciliation or explanatory denial which the husband accepted, or any renewal of sexual intercourse.
    On bill for divorce, answer and proofs.

      Mr. Howard Carrow, for the complainant.

      Mr. George W. Bacon, for the defendant.
   Grey, V. C.

This bill is filed for divorce because of alleged adultery on the part of the defendant wife. The defence is a denial of the charge, and an allegation of condonation after the facts on which the charge is based had come to the knowledge of the complainant. - As to the charge of adultery I am satisfied by the proofs that the defendant-is guilty.- There are many facts in the testimony which compel this belief, culminating in the circumstantial statements of the witness, Mrs. Weir, relating what she saw and heard, and what the defendant told her as to the events of the night of April 16th, 1897.

There remains only the inquiry, did the complainant condone his wife’s offence? It is admitted that for three or four days after he had received information of her unfaithfulness he remained at his home and occupied with her the same deeping apartment and bed. She testifies that during that time he had sexual connection with her, and thus condoned her offence.

The complainant, while admitting that he did not at once, upon knowledge of her guilt, force his wife from his house, or himself leave it, yet denies that during the few days they remained together they in any way resumed their marital relations.

That the parties occupied the same room and bed is undoubtedly of great significance as an element of proof of condonation, and this would, if unexplained, justify a conclusion that there was forgiveness and a restoration of the wife to her former place. But mere physical presence of the wronged husband with the wife after knowledge of her adultery, though it may justify a strong presumption of condonation, does not so conclusively establish it that it may not be rebutted. If there was in fact no forgiveness and no renewal of sexual intercourse, then there was-no condonation.

All the affirmative proot ot actual sexual intercourse is wholly dependent upon the testimony of the defendant, who denies her adultery, which is conclusively established with just as much positiveness as she asserts her husband’s resumption of intercourse after his interviews with Mrs. Weir. Her credibility is entirely overthrown, and while she may testify truthfully, her testimony, when contradicted by that of her husband, cannot be accepted unless supported by other proof.

The testimony as to the state of feeling between the parties and the attending circumstances during the short period that they were together, bears against the defendant’s claim of con-donation and the presumption which attends upon their occupation of the same bed.

The complainant appears to have been upon unpleasant terms with the defendant for a considerable time before he discovered her adultery; he struck' her in the face because she appeared to be arranging a meeting with her paramour; he was in a continual condition of doubt as to her good faith up to the time of the actual disclosure of the overwhelming proofs of her guilt in a manner which made her denial an absurdity. Several days passed before they separated, and the wife adroitly insists that during this time there was sexual intercourse between them. There is no evidence that there was any explanatory denial by the wife which the husband accepted, nor of any conference and forgiveness nor of any asking or obtaining of a reconciliation. Indeed the testimony of the wife is to the effect tlfat she then and always indignantly denies her guilt, and repelled the accusation, an'd it is quite as apparent that the husband then and ever since insisted that she was false and maintained his accusation. While they were in this attitude of open hostility and with no pretence of a reconciliation, the defendant asserts that their marital relations were resumed. The undenied proofs show that the feelings of these persons towards each other were not those which would probably lead to such a result. The complainant testifies that during the three or four days they were together after the disclosure the defendant was sick, and that she continued to be so during the few days that he stayed in the same house with her, and he swears that during that period he exercised none of his marital rights. The wife denies her sickness at the time, and her mother also contradicts the complainant, but neither the testimony of the mother .on this point nor her manner on the stand gave a favorable opinion of her credibility. The complainant had the appearance of a truthful, frank man, who related the facts as he remembered they happened, and his statement coincided with the other circumstances.«

The impression I received from his testimony was that his feelings towards his wife during the period referred to, and her physical condition were such that her presence in his bed and room was no temptation to him; that on the first certain discovery of her crime he had no plan of separation and he permitted her to stay in his house on mere sufferance during the time when she now says he received her again as his wife. There is no other element or circumstance in the case which supports the wife’s statement, and I am unable to believe it. The burden of sustaining this defence is upon the defendant who sets it up. In my view she has failed to carry it, even when aided by the presumption of forgiveness which attends upon continued occupation of the same bed.

I will advise a decree for divorce because of the adultery of the defendant as alleged in the bill.


text:
    The Raritan Savings Bank v. Aletta V. Lindsley et al.
    [Filed February 28th, 1899.]
    Obligors who join with the owner of mortgaged premises in a bond given to secure a mortgage, are not necessary parties to a bill to foreclose such mortgage.
    On bill and demurrer.
    The defendant Aletta Y. Lindsley was in 1893 the sole owner of a tract, of land in Somerset county. In May of that year, she and four other persons, who do not appear to have had any interest whatever in those lands, made their joint bond to the complainant, conditioned to secure the payment of $4,000 in one yeai', with interest. Miss Lindsley secured the payment of the moneys owing on this bond by a mortgage made by her to the complainant on this property, belonging, as stated, solely to herself. The mortgage debt not being paid when due, the complainant seeks in this suit to foreclose the equity of redemption of Miss Lindsley. The only parties made defendants are Miss Lindsley, the owner of the equity of redemption, and Blondina E. Vredenburgh, a subsequent mortgagee.
    Miss Lindsley demurs to the bill for want of proper parties because her co-obligees on the bond have not been made defendants, she claiming that the complainant is a trustee for its depositors and is compelled to pursue the obligors for any deficiency on the bond; that all the co-obligors are therefore interested in the foreclosure suit, and in the ascertaining of the amount due on the bond and the fixing of any possible deficiency in the proceeds of the foreclosure sale to satisfy it.

      Mr. Louis H. Schench, for the demurrant.,

      Mr. Hugh K.. Gaston, for the complainant.
   Grey, V. C.

There is no question that all persons who have an interest in the object of the suit are required to be made parties to a bill in equity. The present suit is a proceeding in rem to compel the redemption of mortgaged premises or their sale and the application of the proceeds to the payment of the mortgage debt. The persons interested in the object of this suit are all those who have a right to redeem the mortgaged premises or who have any estate, right or equity which ought to be considered by the court when it decrees a foreclosure and sale.

' Obligors who give a bond do not thereby acquire an interest in premises which one of their number individually owns and which he voluntarily mortgaged to the obligee in the bond to secure its payment.. They remain debtors, but in the absence of any showing of a contractual or other interest in the security given by one of their number for the payment of their debt or in the lands mortgaged, they have no right to be heard as to the application or disposition of the security or the lands. That lies between the owner of the security or of the lands, and the mortgagee. Nothing in the bill shows that the co-obligors in the bond in this case who are not made parties have any equity whatever in the mortgaged premises. They appear to be simply principal debtors, one of whom has voluntarily mortgaged her own sole property as security for the payment of their joint ■debt.

As to the claim that the complainant is compelled to pursue all the co-obligors for any deficiency, and that they are, therefore, proper and necessary parties to the foreclosure suit in order that they may be heard as to the amount due on the bond, &c. If such a compulsion rests upon the complainant it is yet quite clear that this foreclosure suit will not bind the co-obligors as to any amount due on the bond.

In Vreeland v. Laubat, 1 Gr. Ch. 105, under the old prac- ■ tice, a mortgage was sought to be foreclosed; the mortgagor had disposed of his interest in the mortgaged premises; the purchasers of the equity of redemption, who were the only defendants, demurred because the mortgagor was not made a party. The chancellor decided that there was no reason why he should be made a party, as the proceeding was in rem, and the mortgagor by conveying away the mortgaged premises had ceased to have any interest in them, and that an account ascertaining the amount of the debt might be stated without him. This decision was followed in Savings Association v. Vandervere, 3 Stock. 383.

In the cited cases the mortgagor had created the debt, but had parted with the mortgaged premises before the foreclosure suit, and it was declared there was no reason why he should be made a party. In the case in hand the co-obligors, though they created the debt, had never at any time held any interest in the mortgaged premises. The principle of the cases referred to appears to govern that under consideration.

Under the practice since the act of March 12th, 1880 (Gen. Stat. p. 2111), the taking of any decree for a deficiency in a foreclosure is prohibited. Such a suit is now brought solely for the foreclosure and sale of the mortgaged premises.

When co-obligors on the bond have no interest in either the security or in the mortgaged premises, and no decree can be taken against them for any deficiency in the proceeds of sale to pay the joint debt, there seems to be even less occasion to make them parties to the foreclosure of the mortgage.

The demurrer should be overruled, with costs.


text:
    Hiram G. Hallinger v. Walter Zimmerman.
    [Filed March 14th, 1899.]
    1. Where neither party had any legal or equitable right to rely upon the other’s statements of value, they are taken to be mere expressions of opinion, which either party accepts at his own risk, and will not excuse specific performance of a contract, although they may not be exactly true.
    2. A statement by complainant while negotiating an exchange of property, that his house was located on the best resident street of a city, is no ground for refusal to perform the contract of exchange, where the evidence shows that the house is on the best residence street, though not on the best portion of such street.
    On bill, answer and proofs.
    This bill is filed for the specific performance of an agreement to convey lands. The complainant was in 1897 the owner of a house and lot in Burlington, New Jersey, which was clear of mortgage, and the defendant owned the equity of redemption of a house and lot in Camden, New Jersey. Each of the parties was a professional real estate dealer acquainted with the methods in which adepts in that business induce purchases, each was also fully aware that the other was a man of experience in that line, and neither was likely to be misled by too implicit a relianee upon the other’s statements in praise of the property he offered in trade.
    The complainant was casually passing the defendant’s office, when one of them hailed the other and asked him what property he had to offer in the way of trade. The complainant told the defendant that he had the Burlington property which was clear of mortgage, and the defendant proposed to exchange for it his equity in the Camden property, as the latter was subject to $4,000 mortgage. This was declined by the complainant and thereupon the defendant offered him an additional cash payment. There were the usual preliminary propositions and counter-propositions attending upon such negotiations, regarding which the parties are in almost every detail in contradiction of each other. They finally came to an agreement which was typewritten and is in the following words and figures;
    “Agreement made this first day of September, A. d. 1897, between Hiram G. Hallinger, first party, and Walter Zimmerman, second party, both of the City of Camden, New Jersey.
    “ Witnesseth, That in consideration of the sum of fifty dollars paid to the first party the receipt of which is hereby acknowledged, the said parties hereto agree to an exchange of real estate, now respectfully owned by them as follows:
    “First party will give house and lot, known as number 166 West Union street, Burlington, New Jersey, consisting of a two and one half story house, with lot 16 by 100 feet, vacant or subject to tenant at eight dollars per month, and clear of all encumbrances up to date of settlement.
    “ Second party to give corner store and dwelling at the southwest corner of Sixth, Main and Pearl streets, Camden, with three story brick building, and together with all of the contents of said property, consisting of counters, shelving, ice boxes, scales, canned goods and other groceries; the said property being subject to a mortgage of four thousand dollars at five per cent., held by the Swathmore College, Philadelphia, and clear of all other encumbrances up to date of settlement. The second party to pay the first party the sum of five hundred dollars cash in addition to the fifty paid on account at the time of settlement, subject to all adjustments as above. Settlement to be made as soon as papers are ready or within ten days, unless objection to either of titles.
    “In witness whereof, the parties hereto have hereunto set their hands and ' seals the day and year first above written,
    “ Witness,
    “H. B. WlLLETS.
    “Hiram G. Hallinger,
    “Walter Zimmerman.”

      The defendant afterward refused to perform the contract, though admitting a tender, by the complainant offering to carry out his part of it. Shortly afterward the complainant filed his bill in this case to enforce the specific performance of the contract.

      Mr. George H. Pierce, for the complainant.

      Mr. George A. Vroom, for the defendant.
   Grey, V. C.

The making of the agreement for the exchange, the tender of performance by the complainant and the refusal of performance by the defendant, are substantially undisputed.

The question in the case turns upon the defence set up by the defendant as his excuse for non-performance, or, as he claims, his rescission of the contract.

As the parties themselves are in many respects in contradiction of each other, the documentary proofs and the testimony of others may more safely be accepted as to the facts touching the disputed matters.

In his original answer the defendant averred that he entered into the agreement relying upon the complainant’s statement that his Burlington property rented for $8 per month ; that he had found this statement to be false, that it was out of repair and could not be rented for that sum. Accordingly he wrote to the complainant stating, I based my valuation of the Burlington property exclusively upon the statement which you made me as to the rental paid by the tenant, which statement is incorporated in the agreement,” and in the same letter the defendant declared the contract to be void, and demanded the return of his title -papers for the Camden property and his down payment of $50.

The complainant replied to this, declaring that he upheld the contract, and that he was ready to comply with its terms, namely, to turn the Burlington property over' to the defendant u either rented at $8 per month or vacant,” and notifying him that the property was vacant.

The defendant afterwards by leave filed an amended answer, in which he reframed his answer as to the complainant’s representation touching the rent, averring that the complainant had, while they were negotiating, informed him that the tenant then in possession of the property in Burlington was paying the sum of $8 per month rent,” but that the tenant was practically a caretaker, and in consideration of the favorable rental the tenant made all the repairs, &c. In .his amended answer the defendant alleged as additional reasons for avoiding the contract that the complainant had misrepresented the value of the Burlington property, and that he had stated the property to be located on the best residence street in Burlington, and these statements as to the value of the property, its rental value and its location on the best residence street, were to complainant’s knowledge false, &c.

The statements as to value made by one trader to another in the course of their negotiations for an exchange have always been considered to be mere expressions of opinion which either party accepts as true at his own risk. Wise v. Fuller, 2 Stew. 262. In the case before me the parties dealt with each other at arm’s length. Each knew the capacity of the other to paint with an attractive hue the merits .of the property he offered in trade. Neither had any legal or equitable right to rely on the other’s statements of value as matter of fact, nor considering all the proofs, am I led to believe that either did in truth base his action upon such statements of the other.

The next ground set up as a false inducement to the making of the contract is that the complainant falsely represented that the property was in fact, at the time of the negotiations, rented at $8 per month.

The misrepresentation alleged, if made, related to an existing condition of fact which might well be within the knowledge of the complainant and is one upon which the defendant had aright to rely. Tine burden of proof must be carried by the defendant to show that the false statement was made by the complainant to mislead him into the purchase, and that accepting it to be true he was thus cheated into the making of the bargain.

The defendant testifies that the complainant told him “ positively that the rent was $8 per month and that the tenant made repairs,” &c.

The complainant denies this, and swears that the negotiations for the exchange were concluded and the bargain made before anything was said touching the rent of the property ; that the defendant was in the act of dictating the agreement to his typewriter, and he came to the place concerning the renting of the Burlington property, and then he said to complainant, “Rented at — what it rented for.” That defendant replied, “ To the best of my knowledge, $8, but I have an idea it is empty.” The defendant then said, “Well, say it is rented at $8.” “No,” said complainant, “I won’t sign any such agreement.” The contract was then drawn as above recited.

The complainant further explains that he had seen the Burlington property but once, and then he only went upon the first floor; that he had rented it through agents; that the last rental he knew of, preceding the negotiations, was $8 per month, and he had heard of no change; that he did not know whether the property was in fact then rented or not, and so insisted that the agreement be drawn as it now appears, stating it to be “ vacant or subject to tenant rent at $8 per month.”

It is difficult to understand why the defendant should have accepted ah agreement for a conveyance of the property “ vacant or subject,” &c., if he had just been positively told that it was then rented at $8 per month, and relied on that fact as a substantial inducement to the bargain. The defendant’s typewriter, who wrote the agreement, testifies that while she was writing it the defendant, who was dictating, broke off and asked the complainant the rent of the Burlington property. She says she cannot remember the exact reply, but that the complainant said “ it rented for $8, but he hadn’t heard recently from the agent.” It will be noted that this testimony, and the agreement itself, corroborate the complainant’s narration of the matter, and indicate that the complainant, in referring to the renting, disclaimed knowledge of the present condition of renting and was speaking of the past. When he spoke he had not heard from his agent so recently that he could tell whether the property was rented or not. The weight of the whole testimony on the point supports the view that the defendant did not base his assent to the bargain upon the fact that the property then rented for $8 per month, as is alleged in his answer, but that this was a mere incident which arose after the negotiations were concluded, and while the agreement was being reduced to writing, that it was then disclosed that the complainant did not, in fact, know whether the property was then rented at all; that it had at some previous time been rented at f 8, and the complainant knew of no change, and that the defendant accepted the property, as the agreement on its face shows, whether it was vacant or rented at $8 per month. The proofs show that some two years before the negotiations the property had been rented at $8 per month.

The other alleged misrepresentation was that the complainant falsely stated that the property was located on the best residence street in Burlington. The complainant admits that he told the defendant that the property was on Union street, which was said to be one of the best residence streets in Burlington. That the property is on Union street, and that Union street is one of the best residence streets in the town is not substantially denied. But it also appears that this house and lot are at the westerly end of that street, where for two squares the properties are not so good as at other places on the street, and that while there are several quite desirable houses opposite the property in question, the property itself is one of a row which does not appear to be of an attractive character.

What constitutes a best residence street is to some extent a matter of taste and opinion upon which men vary. The evidence, however, is undisputed that the property is in fact on one of the best residence streets in the town. No representation is alleged to have been made as to the character of the particular portion of that street where the property is located. Nor does either the allegation in the answer or the testimony offered, show with any sufficient certainty anything relating to the house and lot in question which would justify a rescission or refusal to perform the contract.

The defendant has not sustained his allegations as to the misrepresentations of the complainant in inducing the making of the contract in question, nor has he shown any sufficient reason why he should not be decreed to perform his agreement according to its terms. He should be decreed to perform his contract.