author: Griffin, V. C.

text:
    Randolph Perkins v. Deal Beach Realty Company. Randolph Perkins v. The George A. Shipman Company. Randolph Perkins v. James W. Brooks et al. Anna V. R. Greene v. Deal Beach Realty Company. Sarah L. Robertson v. Randolph Perkins.
    [Decided June 9th, 1920.]
    1. A solicitor, in order to raise moneys to discharge a judgment against his client, procured part from the trust company, on the client’s note, endorsed by him, and the balance from a trust estate. In order to indemnify him on his endorsement and to secure the trustee, the client assigned to him ten past-due bonds and mortgages aggregating $107,000, and the same were deposited under their joint control. At the same time the solicitor began the foreclosure of the ten mortgages and a sale was had, certain of the properties (not all) being purchased at the sheriff’s sale by a trustee for the client, thus discharging of record the security of the solicitor to that extent. Upon the delivery of the deeds the solicitor asked that the trustee execute to him five bonds and mortgages, for $S,000 each, on the property which she purchased, in substitution for those foreclosed, which security was less than the former pledge. The client says as to this request she demurred, unless the solicitor agreed to advance a sum sufficient to finish the uncompleted buildings on the premises to be covered by the new mortgages, and, upon the .solicitor so agreeing, she directed her trustee to execute the bonds and mortgages sought to be foreclosed in this suit. This agreement is denied by the solicitor. He did, however, advance certain moneys which were applied toward completing the buildings. After the making of the bonds and mortgages in question the client conveyed the premises to the Deal Beach Bealty Company. The client, in her pleadings, sets up this agreement, and prays that the foreclosure suits be stayed until the solicitor performs said agreement.—Held, 1. That the client failed in her proof of such agreement; 2. If proved, the agreement was without consideration, in that the five bonds and mortgages delivered-were merely substituted in lieu of the mortgages foreclosed, covered part only of the property theretofore pledged, and was lesser security; 3/ If proved, the client divested herself of the right to ask for its performance when she conveyed the property to the Deal Beach Bealty Company, nothing in the record showing that such company asks, or has the right to ask, that the solicitor perform such agreement.
    2. A solicitor, who had agreed to foreclose mortgages for a stipulated fee, was not entitled to the extra allowance for counsel fees allowed by the chancellor in the taxed costs.
    3. Where a solicitor has business relations with his client on his own account, the court leans most strongly against the solicitor.
    4. Where the client assumed that the solicitor would advance sufficient moneys to complete her buildings, and the solicitor d,id advance some moneys but not enough for the purpose; and thereby the client was placed in a position where the advances made were of very little value to her, under the circumstances of this case, the solicitor should not be allowed to charge the client for services rendered in connection with the finishing of such buildings, since the sums advanced were of little or no value to his client.
    On billj &e.

      Messrs. Heyman .<& Heyman, for Randolph Perkins and Anna Y. R. Greene.

      Mr. William M. Rysdylc and Mr. Robert H. McCarter, for Sarah L. Robertson.
   Griffin, V. C.

The complainant, Perkins, filed three bills to foreclose three mortgages given to secure the payment of three bonds aggregating the sum of $25,000—two being for $8,000 each, dated March 25th, 1916, and the third of $9,000, dated November 20th, 1916.

The bill of the complainant, Greene, seeks to foreclose a mortgage given to Mr. Perkins to secure the payment of a bond of $8,000,odated March 25th, 1916, and assigned to her November 22d, 1916.

The recitals as to the debt in the four bills are substantially the same, so that a copy taken from one bill will serve for all, viz.: v

“That on the 25th day of March, 1915, Maud J. Wagner, of the borough of Manhattan and county of New York, being indebted to the complainant in the sum of $8,000, executed to Randolph Perkins a bond of that date to secure that sum, payable on the 25th day of March, 1917, with interest thereon at the rate of six per cent, per annum, payable semi-annually, from the date of said bond.” .

The bill then recites that to secure the payment of the bond Maud executed the mortgage in suit.

The Greene bill has a change in the recital in one respect, viz., that Maud being indebted to the complainant, made the bond and mortgage to Perkins, which recital is manifestly untrue; she bought and took title to the bond and mortgage on November 22d, 1916, by assignment from Mr. Perkins, and Mr. Perkins stands to indemnify her on her purchase.

The recital above quoted in each of said bills is untrue. Maud was not indebted to Mr. Perkins in the three sums of $8,000 and the sum of $9,000 mentioned in the lulls, nor was it the understanding of the parties that interest should be paid on the mortgages, although so demanded in the bills. The fact is that the indebtedness was that of Mrs. Robertson. This the' complainant admits.

The mortgages were given under the following circumstances:

A judgment had been entered in the supreme court of the State of New York against Mrs. Robertson for upwards of $40,-000 by Content'& Company. Suit was brought thereon in this state, ancl Mr. Perkins was retained to defend. He was unsue-' cessful, but later procured an offer to settle for $32,500. Mrs. Robertson was not in funds to pay, and, with Mr. Perkins, sought to raise moneys for the purpose. This was accomplished by Mrs. Robertson giving her note, with Mr. Perkins as endorser, to the Union Trust Company for $24,000, and Mr. Perkins advancing from the Eumiss Trust Estate $10,000. With these moneys the judgment was discharged. Of the $1,500 remaining, $487.50 was allowed a broker, and the balance was retained by Mr. Perkins.

Mrs. Robertson at this time was the owner of ten mortgages, aggregating about $107,000, nine covering lands at Deal and one a.t West End. These were assigned to Mr. Perkins, and by a memorandum dated July 12th, 1915, he acknowledged that nine were assigned to indemnif3r him on his endorsement, and one to secure the payment of the $10,000 and interest due to him as trustee of the Eurniss Trust Estate.

These collaterals were placed in a safe deposit box under joint control.

Prior to the settlement of the Content judgment, Mr. Perkins, on July 2d and 3d, 1915, filed ten bills to foreclose said ten mortgages pledged as indemnity; final decrees were entered in all the suits, and, with the exception of the lands at West End contained in one mortgage, the lands were sold by the sheriff; seven tracts being purchased by Maud Wagner, who. took title as trustee for Mrs. Robertson, and a stranger bought two. but refused to complete his purchase as to one for some alleged, defect.

On March 25th, 1916, the sheriff delivered the deeds to Maud Wagner, and, on the same day, Maud executed to Mr. Perkins five bonds and mortgages in the sum of $8,000 each, in substitution for the security of the mortgages at Deal which had been foreclosed. At the same time the pledge of the West End mortgage continued as like security.

On March 30th, 1916, Mrs. Robertson ‘and Maud Wagner signed a memorandum prepared by Mr. Perkins, stating that the five mortgages were executed to cover the amount due Perkins for advances and the note in the Union Trust Company, which, at that time, is stated to be about $40,000.

Later, two of the $8,000 mortgages were delivered to Mrs. Robertson, and the $9,000 mortgage, dated November 20th, 1916, substituted.

What the purpose was in drawing five regular bonds and mortgages, under the circumstances, cannot be perceived, unless it was the expectation of the parties that they might be sold from time to time and the proceeds used to complete the buildings or discharge the debts aforesaid. The fact, however, remains that at the time of the filing of the bills they existed principally as indemnity to Mr. Perkins on his endorsement, and certain, advances, and secured an indebtedness different from that described in the bonds.

Upon calling the attention of counsel to the anomalous condition of the pleadings, and indicating that the mortgages were merely collateral for a single debt, and that the various suits should be consolidated so that, in one suit, by one decree, the rights of all the parties in interest might be adjusted and finally determined, the suits were consolidated. That they should be consolidated is rather important to Mrs. Greene, who stands in the place of Mr. Perkins as assignee, with indemnity from Mr. Perkins, entitling her to be paid prior to any payment to Mr. Perkins.

Mrs. Robertson also filed her bill against Mr. Perkins substantially for an accounting and a reassignment of the mortgages contained in Mr. Perkins’ suits. To this bill Mr. Perkins answered, and also filed a counter-claim, also asking for an accounting and for a decree that she might he directed to pay the amount due to him.

The causes were tried together.

The first question to be considered is the claim of Mrs. Robertson that Mr. Perkins agreed to advance her the sum of $26,500 to complete the buildings, and failed to do so, and, therefore, the suit should be stayed until he performed his agreement. Her claim is based upon "an agreement which, she alleges, as follows: When the five bonds and mortgages were given she demurred to the amount of security, and only upon his agreeing to advance the money to complete the buildings did she consent that Maud Wagner should execute the bonds and mortgages. Mr. Perkins denies any such agreement; and Maud Wagner, who was present at the time, was not called as a witness; therefore, the testimony is equally balanced, and the fact that Maud Wagner was not called to testify leads me to the conclusion that the agreement is not proven. But, even if proven/ I think it was without consideration. Mr. Perkins held'as collateral the mortgages foreclosed. When the sheriff made his deeds to Maud Wagner and the stranger, Mr. Perkins’ record security was gone; but, in equity, he had a right to the possession of the deeds, and a lien on the land to indemnify him. Thus, when the five mortgages were made, which was less security than he before held, the new security _ could be said to- be merely the substitution of one security for a lesser amount on the same property. In addition to this, Maud Wagner conveyed to the Deal Beach Realty Company, and thus divested herself of the right to ask for this performance, and there is nothing in the record which shows that the Deal Beach Realty Company asks, of has the right to ask, that Mr. Perkins perform this alleged agreement.

The complainants, therefore, are entitled to a decree in their favor; and, as Mr. Perkins stands to indemnify Mrs. Greene,, she is entitled to be first paid before any payment is made to Mr. Perkins.

In ascertaining the amount due several questions arise: First, there was an agreement between Mrs. Robertson and Mr. Perkins that he should receive as a counsel fee $750 for foreclosing the ten mortgages. On turning to the taxed bills of costs I find, in the cases of Robertson v. Deal Beach Realty Company, Nos. 1, 2, 3, 4, 6, 7, 8 and 9, that the extra allowances allowed as counsel fees amount to $598. The costs have not been taxed in case No. 10 (West End property), nor in what is probably case No. 5, which is, probably, the property which the stranger rejected. Counsel for Mr. Perkins claims that he is entitled to the extra allowances as counsel fee in these cases, as well as the $750. Nothing was said to his client when he was retained about these extra allowances. To her it appeared as if this $750 covered all he was to receive for counsel fees for the services rendered in the several foreclosure proceedings. Now, he seeks to recover, substantially, $750 more. This, I think, is inequitable. If a stranger had bought the property he would have to account for the extra allowances for counsel fees allowed by the chancellor or in the taxed costs. Shreve v. Freeman, 44 N. J. Law 78. Other cases on the subject are Schomp v. Schenck, 40 N. J. Law 195; Strong v. Mundy, 52 N. J. Fq. 833. I will, therefore, strike from the claim of the complainant the extra allowances for counsel fees contained in the taxed costs.

Second, touching the sum of $1,012.50, charged on the closing of the loan from the Union Trust Company, Mr. Perkins’ testimony as to what these Services were meant to cover is quite unsatisfactory. I have investigated the testimony, however, and find that, outside of a charge of $374.03, which will be referred to later, and an item of $500, parcel of the $10,000 note (which will also be referred to hereafter), no charge was made for services in the Content suit, in the procuring of the loan and the services attending thereon, nor for searches of the title prior to the date of the-mortgages which were rendered necessary for the protection of Mrs. Robertson, in view of the cbndition of the title, and have reached the conclusion that for all of the services .rendered the charge is reasonable. This sum I will therefore permit to stand as a charge covered by the Perkins mortgages.

The item of $374.03 covers petty disbursements and fees for services in small matters, and this will be allowed.

Also, the items of $174.27 and $9 paid for the Young judgment, and a fee of $75 paid to Thomas C. Perkins. This latter charge was incurred before the property was sold at foreclosure and was a small charge for making an estimate of what would be necessary to be done to complete the buildings if Maud Wagner became the owner.

The items also on page 6 of Mr. Heyman’s brief, aggregating $151.93, will be allowed.

The item of $333.37 for insurance premiums, which expense was incurred because Mrs. Robertson did not deliver to Mr. Perkins the policies in accordance with the terms of the mortgages, I will allow. The evidence, as I recall it, is not clear that Mrs. Robertson delivered those policies to Mr. Perkins.

The charge of $500, which sum, added to the $9,500, was included in the $10,000 note, is the next item to be considered. After this property was purchased by Maud Wagner it is quite plain that Mr. Perkins, in a general way, intended to help Mrs. Robertson to complete these buildings, and, from time to time, he did advance to her sums amounting to> $9,500. I am also inclined to the view that Mrs. Robertson rather relied up'on Mr. Perkins to take care of her in this transaction; and, by reason of his failure to advance the balance of the moneys or procure them for her, she was placed in a rather awkard position. If this was a case purely between parties standing at arm’s length, little could be said of it; but here the relation of attorney and client existed. Mrs. Robertson relied upon Mr. Perkins as her counsel and adviser. If he had not been her counsel, she probably would have used her own brains in figuring how she was going to raise the funds to complete these buildings; but, in dealing with her counsel and reposing confidence in him, she was content that he should handle the matter for her. In such transactions the court leans most strongly against the attorney, who, while acting as such, has business relations with his client on his own account. In the case of Condit v. Blackwell, 22 N. J. Eq. 481 (485), Mr. Justice Van Syckel, speaking for the court of errors and appeals, said: “The confidence which the relation of attorney and client begets between the parties, and the influence which the attorney thereby acquires, has led to a very close scrutiny of all transactions between them; and the law often interposes to set aside contracts which between other persons would be subject to no exception. In such cases the burden of establishing the perfect fairness, adequacy and equity of the negotiations is thrown upon the attorney, and, in the absence of such proofs, courts of equity treat the case as one of constructive fraud.” See also Porter v. Bergen, 54 N. J. Eq. 405.

Now, in this case, Mr. Perkins added $500 to the $9,500 loan, which Mrs. Robertson was willing to pay, assuming, that the moneys necessary for the completion of the buildings would be forthcoming; and the failure to furnish the additional funds placed Mrs. Robertson in a position where the'advance of the $9,500 was of very little value to her, and, therefore, the services rendered by Mr. Perkins, for which he charged $500, were of little or no value to her. I will, therefore, disallow this sum.

In the testimony it appears that Mr. Perkins holds an assignment of the mortgage on the West End property to secure the payment of the $9,500 item. The three bonds and mortgages held by him I do not find were given as security for this particular sum. I, therefore, fi!nd that Mrs. Bobertson is indebted to Mr. Perkins for $9,500 and interest on the advances made for the completion of the buildings, which sum is secured by an assignment of the mortgage covering the West End property; and that the other items above mentioned are secured by the three mortgages to Mr. Perkins, the one mortgage of Mrs. Greene, and the mortgage or final decree now covering and affecting the West End property.

Mrs. Bobertson is entitled to a credit for $3,886.74 received out of the Prout sale, May 27th, 1916.

I have also on my notes that Mr. Perkins received from Myer, April 2d, 1917, $2,818.54. I find on page 25 of the testimony that he speaks of having received $900 on account of a release' from Myer, but that the release was never given, and says that the money should either be credited to Mrs. Bobertson or repaid to Mr. Myer. I wish counsel would look into these two Myer items and advise me if the $2,818.54 was actually paid Mr. Perkins on April 2d, 1917, and also if this sum is in addition to the-$900, and also if this money should be paid to Mrs. Bobertson and credited to Mr. Perkins, and endorsed on the Myer bond, and he be notified to that effect, or whether it should be returned to Mr. Myer.

I have not considered the liability of Mr. Perkins on his endorsements, but, possibty, by this time, the note may be discharged ; but, in any event, as the matter has not been presented to me by counsel, they should consider the question and present their views as to- how this liability, if any, should be protected by the decree.

Some months ago, prior to the consolidating of the actions, I' went over the figures carefully, with a view to saving the necessity and expense of a reference to a liraster. It may be that, as-to some of the smaller items, I am in error. Counsel may go over this memorandum, and if they' have any suggestions to make with respect to any of these items, I wish they would do so in order that the proper corrections may be made, after which I will advise a decree, or decrees, in conformity with the foregoing views, either as above stated or as revised after hearing from counsel.

Counsel will understand that the amount found due will carry interest.


source: Caselaw Access Project

author: Foster, V. C.

license: Public Domain

text:
    Samuel F. Leber and Meyer E. Ruback, partners, &c., v. Rosie Ross et al.
    [Submitted April 6th, 1921.
    Decided April 16th, 1921.]
    1. Attorneys who represent both parties in the matter of a sale of land, and retained some of the purchase price to answer for a judgment, are trustees for both parties, and may maintain interpleader in a proper case.
    2. The practice of the court in such cases should be liberal to persons desiring protection in making payments where it is doubtful to whom the money belongs.
    On motion to dismiss bill.

      Messrs. Leber & Rubach, for the complainants.

      Messrs. Silberman & Grossman, for the defendants.
   Foster, V. C.

This is a motion to dismiss complainants’ bill of interpleader on the ground that the averments of the bill do not show complainants entitled to the relief.

The situation disclosed by the bill is that complainants are lawyers practicing as partners in the city of Newark, and as such, in the month of January, 1921, they acted as attorneys for the defendant Eosie Eoss, then trading as the Eoss Theatre Company, and also for the Charlton Eealty Company, in connection with the assignment, or surrender, of a lease on the Metropolitan Theatre in Newark. About January 17th, 1921, the transaction was closed and Mrs. Eoss received the entire purchase price, except $450, which was left with complainants for the purposes set forth in an acknowledgment .reading as follows:

“Newark, New Jersey,
January 17, 1921.
We hereby acknowledge the receipt from Rosie Ross of the sum of four hundred fifty ($450) dollars which we are to hold as security that said Rosie Ross will vacate said Metropolitan Theatre, Newark, N. J., on February 3d, 1921, at noon, and will pay all claims in connection with the operation of said theatre incurred by her, such as electric bills, etc. Upon said vacation and pajonent the said sum of four hundred and fifty ($450) dollars shall be at once returned, otherwise to be forfeited to the Charlton Realty Company.
Leber & Rtjback,
By Meyer E. Rttback.”

On February 2d, 1921, Nathan Salzman and Hyman Harris recovered judgment in a Newark district court against Samuel Eoss, husband of Eosie Eoss, for $500; execution was issued thereon, and on or about February 3d, a levy was duly made upon the fund of $450 in the hands of complainants, on the ground that the fund is the property of Samuel Eoss, alleged to be the real owner of the leasehold interests surrendered by Eosie Eoss to the Charlton Eealty Company; and said judgment creditors further notified and warned complainants they would seek recourse against them by suit if they paid said money to Eosie Eoss. Subsequently, on or about February 3d, Eosie Eoss notified complainants that she had performed and discharged all of the matters which she was required to do to entitle her to the payment of the fund of $450, and she thereupon demanded the payment of the same.

On February 14th, Eosie Eoss brought suit against complainants in the district court for the recovery of this fund, which complainants had declined to pay her, in view of the confiieting claim thereto made by the judgment creditors, and because they were unable to determine to whom the fund should be paid; and they express themselves in the bill as ready and willing to pay the fund into court.

In support of the motion to dismiss, it is contended that under the facts stated, complainants are either the agents or bailees of Rosie Ross; and numerous authorities are cited to-show that as such they are not entitled to file a bill of interpleader.

As I view the situation, complainants are neither agents nor bailees of Mrs. Ross; rather they are trustees of a fund deposited with them by and in the interest of both parties concerned in the surrender of the lease. And, in the present condition of the pleadings, I am unable to say that the claim of the judgment creditors of Samuel Ross to the fund are so groundless that complainants are not entitled to the protection of an interpleader And should be compelled to take the risk of paying or ignoring their claim.

In a somewhat similar situation, Chancellor Williamson, in Lozier v. Van Saun, 3 N. J. Eq. 325, held that—

“The practice of the court has been liberal in favor of persons standing in the situation of stakeholders or agents, having no interest in the property claimed, and only desiring honestly to pay it where it is justly due. It has proceeded on the principle that they have a right to protection, not from being compelled to pay, but from the vexation attending all the suits that may possibly be instituted against them.”

See also Briant v. Reed, 14 N. J. Eq. 271 (at p. 277); Wakeman v. Kingsland, 46 N. J. Eq. 113, and Packard v. Stevens, 58 N. J. Eq. 489 (at p. 497).

And the principle there recognized and applied is particularly applicable to the situation of these complainants, who it appears cannot be protected in any other way than through the aid of this court, from litigation respecting the fund in which they have no interest, and about the real ownership of which they have no knowledge, and which is admittedly insufficient to satisfy the conflicting claims to it.

It is a matter of common knowledge that the position of complainants as custodians of part of the purchase price in this transaction is one of almost daily occurrence connected with the transfer of title to real estate in which attorneys, or settlement officers of title companies, have entrusted to them part of the purchase price in the transaction, and which is to be paid only when certain features of the title have been adjusted or settled; and to hold that such custodian must litigate with every claimant to the fund at his own expense, and probably without knowledge of the facts, would not only be inequitable but would be a standing invitation to designing parties, or parties acting in secret concert, to file claims against the fund which the custodian could pajr or refuse to pay at his peril. Such is the contention now made in support of this motion, to the effect that complainants must pay Mrs. Ross and personally litigate the claim of the judgment creditors of her husband, Samuel Ross. I am both unable and unwilling to adopt this view of the matter, and I am likewise unwilling to adopt the suggestion that the principle followed in Lozier v. Vann Saun, supra, is antiquated and should not be followed. On the contrary, this principle was never more active and effective and beneficial than it is to-day; and that there was never more need for its application is apparent from the circumstances of the present case.

I will advise that the motion to dismiss be denied, with costs.


author: Foster, Y. C.

text:
    Guaranty Trust Company v. Christian H. Blume et al.
    [Submitted April 27th, 1921.
    Decided May 19th, 1921.]
    1. Where a will provides that in the event of any of the legatees or devisees contesting it or filing a caveat against it, such legatee or devisee shall pay all expenses of both sides, a contesting legatee or devisee must pay all allowances for counsel fees and costs of contest and all other expenditures, outlays and disbursements of money connected with the contest and produced thereby.
    2. A person accepting a benefit under a will must adopt the will as a whole and conform to all its provisions.

      On bill, &c.

      Mr. Clarence B. Case, for the complainant.

      Messrs. Lwm, Tasmblyn & Colyer, for the defendants.
   Foster, Y. C.

The bill in this case is filed by complainant as executor of the last will of Johanna C. M. Blume-Giebelhouse, deceased, against the defendants, who are five of the children of testatrix, to recover from them, or to be authorized to retain from their shares or interests in her estate the expenses connected with the determination of a caveat filed by them against the probate of her will.

Mrs. Giebelhouse-died on January 30th, 1918, and on March 20th following, complainant, as the executor named therein, presented her will for probate and found that a caveat against its probate had been filed by the defendant Christian II. Blume, acting on behalf of himself and the other defendants.

In June, 1918, complainant by consent of all the parties in•terested was duly appointed administrator pendente lite and acted as such until the following October.

Hpon the termination of the contest the orphans court of Union county admitted the will to- probate on September 27th, 1918, and thereupon complainant accounted as administrator pendente lite and duly qualified as executor. By an order made on December 27th, 1918, the probate court allowed to counsel for the proponents $1,200 for sendees in the contest; and to counsel for August C. Blume $250, and to counsel for thecaveators $400, an allowance of $1,500 was also made to complainant for its services as administrator pendiente lile; and, also, an additional allowance was made to- it of $1,000 for counsel fees. No appeal was taken from this order. In addition to these allow'ances complainant was obliged to pay $160 for the premium on the bond it was required to furnish as administrator (no bond was required from it as executor by the terms of the will); and $56.50 for fees, or costs, connected with'the contest.

The aggregate of these allowances and disbursements is $1,566.50.

Testatrix, by the eleventh paragraph of her will, provided:

“I hereby further direct that in the event of any of the legatees or devisees of this will shall contest-it or file a caveat against my will, such legatee or devisee shall pay all the expenses of both sides.”

This direction is almost identical with the provision contained in the will, approved and sustained by the court of errors and appeals in Hoit v. Hoit, 42 N. J. Eq. 388; as a valid condition subsequent for revocation; and also on the further and broader equitable ground that a person accepting a benefit under the will must adopt the will as a whole and conform to all of its provisions; and in that case, and in the later case of Kayhart v. Whitehead, 77 N. J. Eq. 12, all expenses on both sides were directed to be paid by the executors out of the estate, and repayment of these expenses was decreed upon the bill.

Defendants insist, however, that the expenses which were intended or contemplated by testatrix by this provision of her will were only those connected with the actual litigation upon the caveat, such as counsel fees and costs, and that the allowances made to the administrator pendente lite and its counsel are not properly chargeable as expenses to defendants as contestants of the will.

Admittedly, the appointment of complainant as administrator pendente lite was made necessary by the contest over the probate of the will, and was required for the proper care of the estate, and defendants derived as much benefit therefrom as the other interested parties; and if it be found, as defendants contend, that the duties performed by the administrator and its counsel were only such as they would be called to perform under the will, that matter can be given proper consideration by the orphans court on the settlement of the executor’s account, and due allowance can then be made, if necessary, that will prevent any duplication of compensation to the executor and its counsel for such services.

And if under all the circumstances there should be such duplication of compensation in whole or in part it cannot be regarded as unwarranted, in view of the explicit directions of the will, for, in the absence of any qualification therein, it must be assumed that testatrix used the word “expenses,” in its common and ordinary sense, as meaning “any expenditure, outlay or disbursement of money” (Gmvtunj Dictionary), and the word which she used must be read according to its natural and reasonable meaning. Stout v. Cook, 79 N. J. Eq. 573. Considering the word “expenses,” then, in its ordinary and natural meaning, and in connection with the object which the will discloses, testatrix had in view in the use of it, viz., the imposition of a penalty upon the legatee or devisee who should contest her will, it requires no strained construction to find this word sufficiently comprehensive to include not only the allowances for counsel fees and costs of the contest, but also all other expenditures, outlays and disbursements of money connected with the contest and produced thereby, and this includes the allowances made to the administrator and its counsel and the payment for the premium on its bond, and also the fees and costs connected with the contest which it was obliged to pay.

But, for the contest of the defendants over the will, none of these expenses would have been incurred; and to give the limited meaning and effect to the directions of the testatrix which defendants now ask, would be, in effect, to transfer a part of the penalty for their contest—the expenses of temporary administration which it produced—from them to others who were content to accept the provision which testatrix had made for them in her will.

There is nothing to justify such action and defendants will therefore be decreed to repay complainant for all the allowances and disbursements mentioned; and in default of such repayment the legacies and devises to defendants will be declared to be subject to the repayment of all expenses allowed and paid by direction of the orphans court, and if apportionment of the same among the defendants be necessary, this may be made on the-settlement of the decree.


author: Buchanan, Y. C.

text:
    Charles Reginald Gibbs, petitioner, v. Caroline Jablowski Gibbs, defendant.
    [Decided March 17th, 1921.]
    1. In suit for decree of nullity of marriage for the cause of non-age under the statute, not all equitable defences are barred to defendant.
    2. Whether or not any given equitable defence may be interposed rests upon public policy.
    3. Where a husband sues for decree of nullity under the statute for the cause of non-age, an answer is sufficient which alleges with sufficient fact and circumstance to make a prima fa’aie case that the petitioner fraudulently misrepresented himself to defendant as being above the statutory age, with intent to procure the marriage, and that she contracted the marriage relying on the truth of his fraudulent misrepresentations, as otherwise she would not have done.
    On motion to strike out.

      Messrs. Hutchinson & Hutchinson, for the petitioner.

      Mr. William Reich, for the defendant.
   Buchanan, Y. C.

Petitioner sites, by next friend, to annul his marriage to defendant, alleging that he was below the age of eighteen at the time of the marriage and has not confirmed the marriage since attaining eighteen years.

Defendant by her answer admits the marriage and admits that there has been no cohabitation since December 6th, 1919 (petitioner alleges November 9th, 1920, as the date when he attained eighteen), but denies that petitioner was under eighteen at the time of the marriage, and further sets up that at and prior to the marriage petitioner falsely represented to the official issuing the marriage license that he was twenty-two years of age, and made the same representation to defendant, thereby inducing her to marry him.

Petitioner now moves to strike out the answer on two grounds — (1) that the answer is untrue in denying that petitioner’s age' at the time of the marriage was below eighteen, and (2) that the allegation of fraud is insufficient asi a defence to the petition.

On the first ground, of course, petitioner must fail. That issue is to be determined on final hearing.

Petitioner is, however, entitled to have the third paragraph oí the answer stricken out. It combines in one paragraph an allegation of false misrepresentation of his age to the marriage license officer, and of the like misrepresentation to defendant. The allegation of misrepresentation to the marriage license officer is, of course, absolutely immaterial in this action. Such an act; while it might well subject petitioner to punishment for perjury under the provisions of section 9 of the “Act concerning marriages” (Rev. 1912), can be no possible ground for annulling the marriage. Section 12 of the same statute expressly provides that the failure to procure a marriage license altogether shall not invalidate any marriage otherwise lawful. A license, whether obtained fraudulently or properly, is not essential to the validity of a marriage; the failure to comply with the statutory requirements as to such license simply subjects the persons at fault to the statutory penalties or punishment therefor. Tomb v. Tmtb, infra.

The allegation as to.the misrepresentation to defendant is in itself objectionable as being somewhat uncertain and obscure. But it is apparent that defendant intended to set up> that the petitioner, at and prior to the marriage, falsely stated to her that he was over eighteen years old, intending thereby to induce her to marry him; that she believed and relied upon that statement, and thereby was induced to, and did, marry him, as otherwise she would not have done.

The question thus presented, therefore, is whether or not such a false and fraudulent representation is an adequate defence to a suit by the fraudulent party to annul the marriage. That question, it would seem, has never been squarely adjudicated in this state.

The statute (section 1, Divorce act, Rev. 1907) provides that a decree of nullity of marriage may he rendered at the suit of the husband, when he was under eighteen at the time of the marriage, and has not confirmed the marriage after attaining that age. There is a similar provision as to suits by the wife, except that the age for her is sixteen. A decree of nullity in such a case amounts to a decree of absolute divorce. Titsworth v. Titsworth, 78 N. J. Eq. 47; Taub v. Taub, 87 N. J. Eq. 629.

The marriage is not void, but voidable, and is valid until decree avoiding it.

The first issue raised by the present motion is: (1) In any given case where the evidence duly establishes the facts that petitioner and defendant were lawfully married, that petitioner was then below the statutory age, and that petitioner has not confirmed the marriage since attaining the statutory age, is this court compelled to reject any and all equitable defences to the suit and grant the decree of nullity prayed for ?

If this question be answered in the affirmative, it is dispositive of the case sub judies. If the answer be negative, there remains a second question: (2) What is the nature of the equitable defences which may be interposed to such a suit, and does the instant case come within that category?

1. I am convinced, both on reason and authority, that the first question must be answered in the negative.

(a) It is, I think, not open to question that as a broad, general proposition, in English and American jurisprudence, suits for divorce or nullification are deemed of an equitable nature and as subject, to some extent at least, to equitable rules and principles. Cf. Bish. Mar., D. & S. § 722.

(b) That this is true in our own state, even as to suits based upon purely statutory grounds, has been repeatedly held in this court. Rooney v. Rooney, 54 N. J. Eq. 231 (at p. 242); Kretz v. Kretz, 73 N. J. Eq. 246 (at p. 250); Freda v. Bergman, 77 N. J. Eq. 46 (at pp. 47, 48); Davis v. Green, 108 Atl. Rep. 772. I know of no expression to the contrary by the court of errors and appeals (it is contended on behalf of petitioner that such is the effect of Taub v. Taub, supra, but the contention, in my opinion, is without weight, as will he discussed later). That it is true, at least as to cases of divorce as distinguished from nullity, is also shown by the admissibility of such defences as condonation and laches, and the admissibility of fraud to rebut condonation, as to none of which are there any provisions in the statute. Then, again, there are the cases where this court takes jurisdiction of suits for, and grants decrees of, nullity upon grounds not provided by statute, but purely equitable, such as fraud of certain kinds in the inception of the marriage contract (Boehs v. Hanger, 69 N. J. Eq. 10; Davis v. Davis, 90 N. J. Eq. 158; Bolmer v. Edsall, 90 N. J. Eq. 299; Ysern v. Horter, 91 N. J. Eq. 189): and duress (Avakian v. Avakian, 69 N. J. Eq. 89). These latter cases are, of course, not illustrative of administration of equitable principles in suits on statutory grounds, but it seems to me are not without relevance in a consideration of the equitable nature of suits for divorce and nullity. Certainly, if such suits are to be considered as wholly and strictly limited and controlled by the statute, decrees in these latter eases could not be granted.

(c) The language of the statute does not forbid the entertainment of equitable defences. The phraseology employed therein is: “Decrees of nullity may be rendered in all cases when,” &e. The language is the same in that part of the statute relating to divorces: “Divorces from the bond of matrimony may be decreed for the following causes.” The use of the word “may” does not indicate a legislative intent to compel the granting of decrees in cases coming within the specified classes—an intent to exclude all equitable defences. Rather does its use indicate precisely the contrary, when consideration is taken of the language of the prior acts.

From 1818 (I have not examined the act of 1794) down until 1902, the statutes make no distinction between nullity and divorce. Decree of divorce is provided for in £he cases of prior spouse living, adulterer, desertion!, and impotence. In every statute the word “may1” is used as to all these cases, except that of the bigamous second marriage—regarding which the language is that divorce “shall” be granted. Both the bigamous second marriage and the marriage dissolved for impotence are declared to be void from the beginning, yet as to the latter the divorce “may” be decreed, not “shall” be decreed. In the act of 1902, when the distinction between nullity and divorce was first made, the word “shall” was omitted, and from thence hitherto the word “may” only has been used. It seems to me only reasonable to conclude that in the use during all these years, in the several enactments, of the distinction between “shall” and "may,” the legislature acted not at random, but rationally, and with the intent that the two words should express different meanings, namely, the respective meanings which those words ordinarily and naturally have. The reason for the mandatory expression as to the bigamous second marriage is obvious, since to a monogamous race'there could not be any such thing as a second marriage while a prior marriage still existed: the thing was void without decree, but public policy required the record thereof by decree. It likewise seems to me a reasonable conclusion that the legislature’s omission of the word *shall,” in the act of 1902 and the act o£ 1907, after such long prior use thereof, was by design and not accident, and that the legislative intent was that the language should not be deemed mandatory as to any of the specified instances. It is also worthy of note, in this connection, that the case of Rooney v. Rooney, supra, was decided under the earlier statute and was within the knowledge of the legislature when it passed the act of 1902. In that case it was held that even in a suit for dissolution of a bigamous second marriage, notwithstanding such marriage was indubitably void ah iniiio, and notwithstanding the use of the word “shall” in the statute, nevertheless, the suit being brought by the bigamist, and it appearing that he had fraudulently procured the second marriage by false representation of divorce from the first wife, he must in equity be denied relief.

(d) Public Policy.—It is contended that it is against public policy to admit equitable defences in an action of this kind. To that I cannot assent. That in a suit to annul a bigamous second marriage, the equitable doctrine of unclean hands or in pari delicio must be subordinated to public policy is undoubtedly true. Freda v. Bergman, supra; Davis v. Green, supra. It may also be conceded for the sake of the argument that in such a case any and all equitable doctrines and defences are overcome by public policy. It may likewise be argued that the same is true in a suit to dissolve a marriage within the prohibited degrees (which the Marriage act malees void). But the case now under consideration is not either of those cases, and the reasons upon which the public policy rests in such cases are not existent in a nullity suit for the cause of non-age.

As is pointed out in Freda v. Bergman, 77 N. J. Eq. 46 (at p. 49), in a suit for nullity on the ground of prior marriage, petitioner does not ask relief or aid from this court, at least in any other than a technical sense. In the present case, however, the contrary is true. Having obtained from the wife all that he wants he now asks this court to relieve him henceforth from the obligations of a husband.

Where is there any expression of the public policy contended for? The legislature, as I have before pointed out, does not make this marriage void but only voidable—and that only at the instance of the party below the statutory age, and not even then if there has been a confirmation after attaining due age. (Fodor v. Kunie, 112 Atl. Rep. 598, published since this opinion was written.) The purpose is to discourage marriages in which one or both parties are of immature age (Cf. Bid. Div. Prac. (2d ed.) 356); but it is only to discourage—not prohibit, inasmuch as the statute does not make them void, nor is there any statute prohibiting them (although the provisions of the Marriage act are framed to prevent such marriage without the consent of the parents of the immature party). Indeed, in certain instances, such as seduction cases, the state by its statutes encourages the marriage.

The purpose also doubtless is to protect, in some measure, the infant against the consequences of an immature and ill-considered marriage. But the interest of the individual infant is entirely subordinate to the general public interest. Petitioner’s counsel contends that the intention of the legislature to protect the state and the immature youth from the consequences likely to flow from such ill-advised marriages is nullified unless it be held also that the legislative intent was to permit the youth to avoid the marriage, notwithstanding he procured the marriage by this fraud. This, in my opinion, however, would be forcing a construction beyond reasonable limitations. Cf. LaRosa v. Nichols, 92 N. J. Law 375. So far as the state is concerned, it has provided for the discouragement of such marriages by providing in effect that (as Vice-Chancellor Stevenson phrased it in Williams v. Brokaw, 74 N. J. Eq. 561, at p. 563): “If hereafter any person shall be so ill-advised as to enter into a marriage with an infant under the prescribed age, he or she will do it with the knowledge that the relationship can be terminated at the mere will of the infant.” But how can that person have that knowledge when the infant has fraudulently induced the belief that he (or she) is over the prescribed age? The infant may have produced a forged birth certificate or forged entry in a family Bible.

So far as the protection of the individual infant is concerned, ' I can discern no design by the legislature to carry it to any such extent as petitioner contends. The design may be to protect an innocent youth in such case, but it by no means follows that a guilty one is also to be protected. It seems to me that some protection is equally due to tire other party to the marriage, especially since that party might be a girl who was only sixteen years of age. Can it be said that public interest requires that a youth just short of eighteen years, who has by such fraud induced such a girl to marry him, and give him herself, her affection, her service, and to conceive a child for him, requires that such a youth be permitted to cast her off by decree of this court, in order to protect him against his lack of maturity, experience, judgment and discretion ? If, instead of filching from her her body, her affection and her self-respect, he had by false pretence robbed her of only a few dollars in money or goods, the legislature does not deem that his lack of judgment or discretion requires protection from imprisonment. If he falsely state his age to the license issuing officer, he gets no protection, but is subject to the penalties for perjury. If he seduce the girl under promise of marriage he is punished criminally unless he fulfills the promise before or after conviction.

Taub v. Taub, supra, is not authority in favor of petitioner on this point. What the court of errors and appeals said in that case is simply that “the state by the statute has declared in effect that it does not care to enforce any public policy keeping marriages indissolvable contracted under the cvrcumstances of the present case." The italics are mine, and show the express delimitation of the pronouncement, which was made in denying the contention that decree of nullity for the cause of non-age should not be granted to a husband who at the time of the marriage had, but concealed, the intention of disaffirming it on reaching the age of eighteen.

Neither is Titsworth v. Titsworth, supra, authority in petitioner’s favor. There the petition was practically identical with that in the present case, but there was no answer setting up fraud or any other equitable defence; the case was uncontested. Nor, in my opinion, are the remarks of Yice-Chancellor Stevenson in that case at all indicative of an opinion on his part that fraudulent misrepresentation of petitioner’s age to defendant would not warrant denial of decree, although I admit that an argument, by inference, to that effect may be made with some degree of plausibility.

2. Since, then, defendant is not precluded from interposing any and all equitable defences to a suit of the present character, is the particular equitable defence here set up- a tenable one? This question, I think, must also be answered in the affirmative.

It would be straying too far afield from the issue here to be determined to attempt to survey all the equitable defences which might ever be sought to be interposed to a suit for nullity for non-age. Conceding, on the one hand, that not all such are admissible, it would- seem clear on the other hand that if any are admissible, the one here relied on by defendant must needs be. Fraudulent representation as to age may well be considered as not being of a fact sufficiently material to warrant the .dissolution of a marriage thereby secured between two adults. Cf. Carris v. Carris, 24 N. J. Eq. 516 (at pp. 522, 523). But in the case sub judice the circumstances are very different.

A wife in contracting a marriage with a young man below the age of eighteen, as has been said, contracts a marriage which under the provisions of our statute, is a mere trial marriage, and which may at the option of the husband, and, indeed, either at his mere temporary whim, or pursuant to an original and continued purpose and intent, be wholly set aside when he reaches eighteen. The consequences of such a setting aside of the marriage are, or may be, in many instances, a matter of very serious moment to the wife. A certain “loss of caste” is, under the conditions of our social fabric, almost inevitably visited upon a divorced wife, even though she be entirely free from guilt or wrong of any kind. Her tarnishment may be greater or less, according to the character, intelligence and broadmindedness of the community in which sire lives, or of her circle of relatives, friends and acquaintances. Common report or gossip (so aptly described by Virgil in the fourth book of the iEneid) concerns itself much with the fact that a woman has been divorced, but concerns itself little, if at all, to spread the fact of her innocence in regard to such divorce. Again, even if there be no child of tire marriage, her subsequent opportunity for marriage is very greatly decreased. Many men from religious belief or personal grounds will decline to entertain the idea of marriage with one who has been the wife of another. If there be a child, this opportunity is still further cut down, for many a man who, might otherwise espouse her, will not care 'to burden himself with, the care and support of a child or children not his own, and, furthermore, a.t least, unless and until she marry again, she has the care of the bringing up of the child without the aid and assistance, other than perhaps mere financial support, from her husband which should rightfully be hers. This phase of the subject need not be pursued further, although it ma3r be added that to such a child itself the results are perhaps equally as unfortunate and undesirable.

It is one thing, therefore, for a wife to contract such a marriage, knowing (or not caring) that the husband can and ma3r shortly east her off; it is a very different thing for her to be trapped by the intentional fraud and deceit of the youth into a marriage she would have spurned had she not been so deceived. The fraud and deceit is clearly vital, therefore, in that it goes to the inception and procurement of the contract, and in that it is as to a fact which is material-—-the age of the husband, which is, indeed, the only fact material from the standpoint of a /suit based on non-age. /

I think there is a very plain distinction between the fraudulent misrepresentation of tire age, and the situation alleged in the Taub Case, of a fraudulently' concealed intent at the time of ■the marriage to disaffirm it on reaching the statutory age. In the former case, the misrepresentation is as to an absolute and immutable fact; if the man is over eighteen years of age, neither by any volition of his own, nor in anywise whatsoever, can he ever subsequently become under eighteen years of age. If he be over eighteen, therefore, the wife can assuredly rely that that fact cannot be changed, and that he can never dissolve the marriage for non-age. If she believe him to- be over eighteen then her entry into a marriage with him (which but for such belief she would avoid), confident that he could not dissolve it at his option, is a perfectly logical and justifiable sequence. But, in the latter case, the representation or concealment is as to a fact which is not unchangeable—it is as to the fact of the then existence of an intent. It might well be .deemed, therefore, not a material fact, since even if true she cannot rely upon its continued existence, she cannot, unless devoid of mentality, rely upon it as protecting her from the subsequent dissolution of the marriage at the husband’s instance.

I do not wish to- be understood, however, as saying that in évery case of intentional misrepresentation and deceit of the wife by the husband as to his age the husband will necessarily be denied decree of nullity. As it is well stated by Chief-Justice Bigelow in Reynolds v. Reynolds, 3 Allen 605, 606: “It would! be difficult, if not impossible, to lay down any general rule or definition which would comprehend all cases coming within the range of the legal import of the word ‘fraud,’ * * * as no two cases are precisely alike in their circumstances, it follows that the question whether fraud exists sufficient to vitiate a contract always depends very much on the nature of the transaction, the means of information possessed by the parties, and their relative situation and condition toward eachi other.”

This is of course equally as true where the question is as to whether fraud exists sufficient to work an estoppel or to bar relief. Cf., also, generally, Bish., supra sub-tit. “Fraud, Error, Duress.” Obviously, the case is much stronger where the deceived wife is only sixteen years old than where she -is a mature woman; the age and intelligence of the respective parties, whether it is man or woman who claims to have been deceived, the means or method used in the accomplishment of the deception, and many other facts may help to vary the result.

Suppose, for example, in the trial of the instant case, the proofs should fully establish all the allegations of defendant, but that it should further appear* that defendant was a woman of twenty-three or twenty-four (her age does not appear in the pleadings), and that she in fact knew nothing whatever as to the existence of the statutory provision in question; that she, indeed, would not have married him had she known he was only seventeen instead of twenty-one, not, however, because of this statutory provision of which she did not know, but because she would not wish to be deemed (to use the vernacular) a "cradle-robber.” The misrepresentation of the essential fact, the reliance upon it,, the marriage which but for the deceit would not have been contracted, are all present, but I incline very strongly to the belief that the husband’s decree would not be withheld.

Hence, although, as I have said, I think in principle the defence here interposed is adequate and an answer is sustainable as a pleading, which -sets mp allegations with sufficient facts and circumstances to show prima facie an intentional deceit of defendant by petitioner as to the latter’s age, in order to procure the marriage, and the accomplishment of that deceit and the resultant marriage in reliance upon the truth of the misrepresentation, which otherwise would not have been entered into— nevertheless, even if all such, allegations are proved upon the hearing, the decree may, under all the circumstances of the case' as then brought out, be granted.

Those portions of the answer hereinbefore indicated will be stricken out. Leave will be given to amend within ten days from service of the order, copy of such amendment to be served. No costs.

Since writing the foregoing my attention has been called to the opinion in the recent case of Fodor v. Kunie, 92 N. J. Eq. 801; 112 Atl. Rep. 598, in which the language of the chancellor would seem to indicate that a husband over eighteen, who had been induced to marry a girl below sixteen, as the result of false and fraudulent representations by the girl that she was above sixteen, cannot maintain a suit for nullity. That question was not in fact before the court—the actual decision on the case submitted being that a petitioner whoso original petition was based on an alleged common law right could not be permitted to amend the petition to set up' an alleged statutory right, because the effect of such an amendment would be to set up an entirely new and distinct cause' of action, and further because such amendment would be useless,, inasmuch as there was in fact no statute creating such alleged statutory right.

However, assuming the law to be that a deceived husband (or wife) in such a case can under no circumstances have the marriage annulled for such fraud, it is obvious that that is a very different proposition from denying to a suitor guilty of material fraud the right to avoid the result of that fraud—from holding, as I have held in the case sub judice, that the suitor, guilty of fraudulent and material misrepresentation is estopped to deny the truth of that which he, in order to induce the marriage, asserted to be the truth.


author: Buchanan, V. C.

text:
    William C. Kaufman v. Mary R. Edwards. Edward C. Stokes, special administrator, &c., v. Mary R. Edwards et al.
    [Decided March 28th, 1921.]
    1. Where moneys belonging to A are by A deposited in bank in an account in the name of “A or B, payable to either or the survivor,” such action is sufficient to accomplish a transfer to B of an interest in such bank credit, if it appear that A intended thereby to effectuate a then present transfer of such interest.
    2. In such a case, whether or not A had such intent thereby to accomplish a then present transfer to B of an interest in the bank credit, and if so, the nature and extent of the interest so intended to be transferred, is to be determined from all the evidence.
    3. In such a case, if A’s intent was to accomplish a then presently effective transfer of an interest in remainder at A’s death in such bank credit—though conditioned upon B surviving A, and subject to A’s right to diminish the bank credit during his lifetime—the transfer is valid ; but if A’s intent be that no transfer of interest take place until A’s death, no valid transfer results either at the time of the opening of the account, the depositing of the moneys or the death of A leaving B surviving.
    4. Where both A and B open a deposit account in the name of “A or B, payable to either or the survivor,” and each deposits moneys of his own in said account, it merely presents the same question in a double form—i. e., whether A intended a present transfer, to B of an interest in the bank credit represented by the moneys deposited by A (and if so, wihat interest), and whether B intended a present transfer to A of an interest in the bank credit represented by the moneys deposited by B (and if so, what interest). •
    5. A and B opened a bank account in the name of “A or B, payable to either or the survivor,” and both from time to time made deposits therein of their own respective moneys. Occasional withdrawals were made by A, or for A’s benefit, but at A’s death, leaving B surviving, the bank credit was still in excess of the sums (and interest) deposited by B.—Held, that B is entitled to the entire bank credit as against A’s administrator ; that as to the portion thereof represented by A’s deposits it appeared from all the evidence that A’s intent in the opening of the account and making the deposits had been to effectuate a then present transfer to B of an interest in the credit resulting from such deposits, which interest was at least an interest in remainder at A’s death therein, conditional upon B’s surviving A and subject to A’s right of withdrawal in the meantime—and that such transfer was valid and effectual; that as to the portion represented by B’s deposits, even if B had had a similar converse intent, nevertheless, the transfer to A was rendered nugatory because A did not survive B.
    On bill, &c. On final hearing.

      Messrs. Scammell & Besore, for Edward C. Stokes, special administrator, &c.

      Mr. Maxwell A. Kraem-er, for William C. Kaufman and John A. Kaufman.

      Mr. Ilarvey T: Satterthvmte, for Emma Velder.

      Mr. Edwin 0. Long, for Mary R. Edwards.

      Mr. Walter F. Hayhurst, for the Lambertville National Bank.
   Buchanan, V. C.

These two eases require the determination of the ownership of a certain bank credit of upwards of $5,700, standing in the name of “Mary Kaufman or Mary R. Kaufman, payable to either or the survivor.”

Mary R. Kaufman married subsequent to the opening of the account and is now Mary R. Edwards. Mary Kaufman is dead —dying domiciled in Pennsylvania—and Edward C. Stokes is special administrator for the collection of assets of her estate in New Jersey.

In the bill filed by William C. Kaufman against his sister; Mrs. Edwards claim was made by him to one-fourth of the d:e-posit, under an alleged trust for Mrs. Kaufman to Mrs. Edwards for the benefit of four children. The bill subsequently filed by Mr. Stokes, as special administrator, against Mrs. Edwards joined the other three children as defendants (as well as the bank), and they filed answers setting up' the same claim as made by .William in his bill. The two causes were then consolidated and the whole matter came on for hearing at one time.

Cases involving the ownership) of so-called “joint” bank accounts of this kind—that is, where the pass-book or deposit-book shows the account as of the bank “in account with A or B or the survivor,” or to similar effect—have frequently come before the courts of this state and other states. In almost every instance, however, these cases have been cases where the moneys deposited in the account have all been deposited by one of tire two persons interested, and that person (who may be, and frequently is, termed the “donor”) has died, and the other of the two persons, or “donee,” has claimed the account as against the executors or adtministrators of the “donor.” The present case is therefore unique, in that moneys were deposited in the account by both parties, and of tire amount on deposit in the account at the “donor’s” death (exclusive of interest), the major part thereof had been deposited therein by the “donee.”

In cases of this kind—as, indeed, in all cases of attempted transfer of bank credits—there are two 'matters which are the subject of inquiry—one being the intent of the “donor” and the other being the act by which such intent has been sought to be effectuated.

As to intent, the inquiry is, Was there at the time of the act an intent to make a then presently operating transfer of the “donor’s” right against the bank or other depositary? (In many of the cases this intent is called a “donative purpose,” but it is of course obvious that the inquiry is equally pertinent and necessary where there may have been consideration for the transfer as where the case is one of pure gift.)

As to the acty the inquiry is as to whether the method employed for the attempted transfer is legally sufficient to accomplish such transfer, assuming the existence of the requisite intent.

In these cases of accounts to the credit of A or B, payable to either or the survivor, the act of alleged attempted transfer is the making of the contract between the depositor and the bank —the transferee may or may not be also a party to this contract. That contract—at any rate where the transferee is not an actual party to it—in its expressed terms is a contract whereby A loans money to the bank and the bank promises to pay to either A or

B, according to their respective demand or order, or to the survivor of them. This provision as to payment by the bank is both an obligation and a right. The bank is bound to make such payments, and, on the other hand, moneys paid by it to B or on B’s order will discharge it pro tanto of liability to A. But, clearly, there is nothing expressed or implied in that contract which necessarily accomplishes a transfer of ownership in the chose in action. On its face it may deal only with transfer of possession instead of ownership. A may go to B, a merchant, purchase and pay for an article, with an agreement as part of the contract of purchase and sale, that B shall keep the article to be delivered to C upon his calling for it. C may be a mere agent of A to receive possession for A of the article which A has purchased for himself and therefore owns, or A may have purchased tire article for C, either as a gift or pursuant to contract between A and C, and in that case the delivery to C would be a transfer of ownership as well as possession. s

Assuming, therefore, for the moment, that the means employed by Mrs. Kaufman, in the present ease—i. e., the making of this contract of “joint account” with the bank—was sufficient to accomplish a transfer of the chose in action or some interest •therein, as effectively as a formal written instrument of assignment, the necessity of ascertaining heir intent: is plain. Did she intend it to operate merely in the nature of a power of attorney to Mrs. Edwards, or did she intend thereby then presently to transfer to Mrs. Edwards tire actual ownership of some interest in that chose in action (whether or not the actual enjoyment thereof by Mrs. Edwards should be immediate or deferred) , and if the latter, what interest therein did she intend to convey ?.

Dealing, first, with the sufficiency of the alleged act of transfer, I conclude that the means employed by Mrs. Kaufman was sufficient to effectuate her purpose and intent, if she had the purpose of transferring an interest in the account.

This conclusion is based upon both reason and authority. The act of making such a contract with the bank is as much a completed act as the execution of a formal instrument .of direct assignment or assignment in trust, or as a manual delivery.

That it is in itself ambiguous cannot matter1—for the mere act alone of manual tradition is equally ambiguous as to whether it constitutes transfer of mere possession or of ownership—yet no one would contend that the manual delivery was an insufficient act to effectuate transfer of ownership' if the requisite intent be present. Nor can the fact that the contract leaves Mrs. Kaufman with' the power, or some power, of disposition of the debt due from the bank be of any controlling materiality. If A, being in partnership with B, takes some of his own money to the bank and opens an account in the name of “A and B, partners” (assuming, of course, the requisite intent), no one will contend that the “money in bank”—i. e., the chose in action, of the bank’s indebtedness—is not partnership property—that the act was not sufficient to accomplish a transfer merely because the transaction leaves A with a right to draw on the account.

That the conclusion yeaehed is not 'only logical but settled law in this state is clear from a consideration of the adjudicated cases. Such is the decision in Dunn v. Houghton, 51 Atl. Rep. 71, and in Schippers v. Kempkes, 67 Atl. Rep. 1042; affirmed, 72 N. J. Eq. 948. Both of these cases are, I take it, expressly approved on this point in the recent opinion in New Jersey Title, &c., Co. v. Archibald, 108 Atl. Rep. 434. In the last-mentioned case, at the timie the account was opened by the “donor,” the “donee” was also present and both signed a written statement, delivered to the bank, “that this account and all moneys to be credited to it belongs to us as joint tenants and will be the absolute property of the survivor of us; either and the survivor to draw.” It is held that there was a then present gift and delivery; the objections based on the right of the “donor” to draw, and on the right of survivorship’, are expressly refuted, and the “donee” is held entitled to the account on the “donor’s” death. I am unable to- perceive how the presence and participation of the “donee” at the time of the making of the contract with the bank can be of any materiality. They might merit consideration in the endeavor to ascertain the intent of the “donor,” but not. as to the legal sufficiency of the act of transfer —the contract between the “donor” and the bank. Neither is the explicit character of the written statement, which they both signed and delivered to the bank, material on that point. That written statement is merely proof that the “donor’s” intent was that the opening of the account was an act of present transfer of interest instead of a “power of attorney.” It supplies the proof necessary to resolve the ambiguity of the mere opening of the account alone—the proof which otherwise must needs have been sought from other sources. There is assuredly no indication in the opinion that any of these things in anywise contributed to the decision reached; rather does the contrary appear from the express approval of the opinions in Dunn v. Houghton and Schippers v. Kempkes, in neither of which were any of these factors present.

I take it to be the settled law of this state, therefore, that where a depositor opens a bank account in the names of “A or B, or the survivor,” or the equivalent thereof, the “donee” takes an interest in the chose in action and will take the entire chose by survivorship at the death of the “donor,” if the depositor had the intent then to transfer such interest. The many cases denying the “donee’s” right are those where such intent was lacking or insufficiently proven. Such was the situation in Morristown Trust Co. v. Capstick, 106 Atl. Rep. 391; affirmed, sub nom, Morristown Trust Co. v. Safford, 108 Atl. Rep. 926, where there was no explicit contract such as in the Archibald Case, and the evidence as to the depositor’s intent showed clearly that he had opened the account only for his convenience—for a “power of attorney” purpose—and had no intention of a then present transfer of interest to the “donee.”

I have hereinbefore referred to the circumstance—unusual in these cases—that both parties to the account made deposits therein of large amounts. This, however—while it ought by no means to be overlooked in the consideration of the facts and circumstances evidential as to intent—in nowise adds to, or subtracts from, the principles governing the determination of the suit. The result thereof is merely that we have to deal with a combination of two alleged or attempted transfers—the transfer by Mrs, Kaufman to Mrs. Edwards in respect to the moneys deposited by Mrs. Kaufman and the transfer "by Mrs. Edwards to Mrs. Kaufman in respect to the moneys deposited by Mrs. Edwards. Whether or not a transfer was effectuated by Mrs. Edwards does not concern us in the present case; if it was, it was, nevertheless, subject to the condition of survivorship, and Mrs. Edwards-gets it back as survivor; if it was not, then the moneys deposited by Mrs. Edwards enure to her credit alone.

Let us now turn to evidence from which is to be ascertained the intent of Mrs. Kaufman.

The account was opened November 9th, 1903. The pass-book and two cards constitute the only contract with the bank. The book is headed “Lambertville National Bank, Savings Department, in account with Mary Kauffman or Mary B. Kauffman, payable to either or the survivor,” and then follows the entries of deposit and withdrawal. The two “signature cards” each bore the number of the pass-book and contained the following: “Agreement—I do hereby assent to the rules and regulations of the bank governing savings deposits as printed in my pass-book.” Mrs. Kaufman signed one of these and Mrs. Edwards the other. The Only portions of those rules and regulations which can be a.t all relevant are that the entries in the pass-book shall constitute the depositors’ vouchers, and that all payments made to any person producing the pass-book shall be good and valid payment (not that the pass-book must be produced on withdrawals).

The principal witness was Mrs. Edwards. Complainants not only did not invoke the bar of the statute against her testifying as to conversations and dealings with the decedent, but the -administrator himself called her for that purpose. Her testimony shows that the confidence was amply justified, for much of her testimony was against her own interest, although no one could have contradicted her.

It is evident that a somewhat unusual relationship' of perfect trust, confidence and mutual interest existed between mother and daughter—as beautiful as it is rare. She was living with her mother, and, although of age and earning her own living, she turned over to her mother practically her entire earnings, which her mother deposited in an account in the Lambertville bank in her (the mother's) own name. On November 9th, 1903, this account comprised $500, made up in whole or in, large part of the daughter’s moneys. This $500 was transferred to the new “joint” account as the? opening deposit.

The intent of the 'mother and daughter with regard to the moneys turned over and deposited in tire first account was not only unexpressed but extremely vague and indefinite—vide the following testimony:

“Q. Well, why did you give your mother these moneys that you earned in New Hope; did you give them to her?
“A. I would take them home and just hand them to her; what I needed then X kept.
“Q. For what purpose did you hand them to her?
“A. Nothing was ever said.
“Q. What did you mean that she should-do with them?
“A. Just as she chose.
“Q. Did you mean to make a gift of those moneys to her?
“A. No; I gave everything to mamma, anyhow.
“Q. Were you giving these moneys to her, so that from and after the time you gave them to her, they should be her moneys to do as she chose with them, or did you give them to her for you?
“A. I knew she was keeping them for me.”

Mrs. Edwards was not present when the new account was opened (she went daily to work in Philadelphia), but signed the signature card a little later. She says she knew her mother was going to open the joint account. At, or shortly after the joint account was opened, Mrs. Kaufman said to Mrs. Edwards that

“she was putting it in both our names so that I could get it after she was gone', or she could get it if anything happened to me; I think that was at Mr. Phillips1 suggestion.”

The president of the Lambertville bank (Mr. Phillips) testified that he could not recall whether or not he was present at the actual opening of the account, hut Mrs. Kaufman spoke to him several times about it subsequently.

“Mrs. Kauffman always said that that ‘[the money in the account] was for Mrs. Edwards. * * * It was to be Mrs. Edwards’ after she, Mrs. Kauffman, was gone. * * * She wasn’t versed much in banking accounts and she wished us to make sure that her daughter received the funds. * * * She wanted it put in that way so she could make sure her daughter would get it when she died.’ ”

It is perfectly obvious that the account was not opened in this way for the convenience of Mrs. Kaufman (as frequently appears in suits of this kind), for Mrs. Kaufman was in good health and active practically all the time until her death, in 19.15, and, on the other hand, when the account was opened, and for some jmrs thereafter, Mrs. Edwards spent the daytime at employment in Philadelphia. Later, when she secured employment near at home, either one would go to the bank, as happened to suit their mutual convenience. Both took money to the bank to deposit, and the moneys so taken by Mrs. Edwards might be her mother’s, or her own, or partly both, and vice versa.

The production of the' pass-book for withdrawals was not requisite—and, indeed, the intrinsic evidence of the entries of withdrawal shows that it was by no means always presented at withdrawals—but even if it had been required, it was kept at the home accessible to both, or either, and for a time in a safe deposit box accessible to either.

No account or record was kept by either of the two as to the respective moneys of each which went into the account, nor of withdrawals. Aside from the’ first deposit, the moneys contributed to the account by Mrs. Edwards (exclusive of interest) aggregated, as nearly as she could fix or estimate it, the sum of $2,600. Mrs. Kaufman, then (not taking into account a deposit of $2,000 in her hands as administratrix of her husband, inadvertently put into this account and then withdrawn) must have deposited about $2,700. She withdrew about $2,200, leaving only $500 of her deposits at the time of her death.

There were only ten withdrawals from the account, eight by checks signed by Mrs. Kaufman and two by checks signed by Mrs. Edwards at Mrs. Kaufman’s request, but all for the use, benefit or account of Mrs. Kaufman. An examination of the entries and balances in the pass-book, in- the light of the testimony, shows that apparently at no time did the withdrawals by or for Mrs. Kaufman encroach upon the moneys wmeii had been contributed by Mrs. Edwards, although this may perfectly well be mere accident and not design, since the withdrawals are so few and since no record was kept of their respective contributions. Some $1,400 or $1,500 of the withdrawals were given by Mrs. Kaufman to her other children.

Mrs. Edwards made no1 withdrawals for her own use or benefit. No occasion ever arose to require such a withdrawal. She said (on being pressed by me) that she felt she had a right to draw for her own use if she had wanted it—yet, again, she said, “I felt it wasn’t mine until after she was gone, anyway.” The nature and extent of her right and interest in the deposit account as between herself and her mother, was obviously very vague and indefinite in her mind; nothing like an expression thereof was ever had between them.

The only other evidence of any particular significance is that when Mrs. Kaufman was seriously ill, and both feared she would not recover, she suggested to Mrs. Edwards that the “joint account” should be divided (apparently upon her death) between Mrs. Edwards, Mrs. Velder, John Kaufman and William Kaufman, to which Mrs. Edwards said “All right.” The next day Mrs. Kaufman was somewhat better and Mrs. Edwards said to her mother, “Did you want me to take mine out?” meaning to take from the account before the suggested distribution the amounts which Mrs. Edwards had contributed thereto of her own moneys, to which Mrs. Kaufman assented. Mrs. Edwards, being asked why she agreed to such a proposition, testified:

“A. I assented to anything my mother wanted.
“Q. Even to the extent of giving your savings to your brothers and sisters?
“A. If my mother asked it.”

Considering this incident in relation to the trust claimed by the brothers and sister (and there is no- other evidence to support such.claim), I think it is clear that no such trust arose. As to the contributions of Mrs. Edwards to the account, there was no consideration; as to the contributions of Mrs. Kaufman there was no completed trust, as in Hoboken Bank v. Schwoon, 62 N. J. Eq. 503. Such claim of trust is therefore disposed of adversely to the claimants.

I have no difficulty in determining that. the intent of Mrs. Kaufman was not merely to accomplish a “power of attorney”— it was clearly an intent that Mrs. Edwards should be vested at some time with the beneficial interest in at least the unsatisfied balance of the chose in action which should remain a.t Mrs. Kaufman’s death, conditioned upon Mrs. Edwards then surviving. The evidence, as has been seen, disproves the idea that the account was opened in the dual form for any reason of convenience to Mrs. Kaufman, and the testimony as to Mrs. Kaufman’s statements clearly proves her desire that Mrs. Edwards should have the “funds” at her death.

This determination, however, does not, I take it, carry us quite far enough to be dispositive of the suit. I do not understand the court of errors and appeals to have overruled its decision in Stevenson v. Earl, 65 N. J. Eq. 721, by the opinion in Guaranty Trust Co. v. Archibald, supra. On the contrary, the opinion of that court in Morristown Trust Co. v. Safford, supra, was handed down on the same dajr as the opinion in the Archibald Case, and affirms the decree in this court expressly for the reasons stated in Vice-Chancellor Stevens’ opinion, and the latter opinion expressly rests the decision there reached upon Stevenson v. Earl. In Stevenson v. Earl it is held that a deposit agreement between Earl and the depositary, by the terms of which the balance remaining to the credit of Earl at his death should be paid to his wife, was invalid to pass the ownership in such balance to' the wife, as being a testamentary disposition and not conforming to the requisites of the statute of wills. Obviously, if what is done by a donor is a presently effective transfer of an interest, even if that interest be a remainder at donor’s death, and conditioned upon donee’s survival, there is no violation of the statute of wills, for the disposition is a present disposition and not a testamentary one. The interest vests presently in the donee, though the enjoyment be only conditional and m futuro at the death of donor. This is not denied in the JSarl Case—the opinion states that the disposition which is invalid as being a testamentary disposition is one where the agreement between donor and depositary is that the donor has complete right of ownership' and control during his life, and that so much as shall remain at his death shall be delivered to donee, “who shall then become'the owner thereof.” (Page 728.)

Further inquiry, therefore, is necessary to determine whether Mrs. Kaufman’s intent in this transaction was to make a present transfer vesting in Mrs. Edwards an interest even if enjoyment should be postponed till Mrs. Kaufman’s death, or whether the intent was that at Mrs. Kaufman’s death, and not until then, the intended beneficial ownership should pass to Mrs. Edwards: It is not necessary to decide whether Mrs. Kaufman intended that Mrs. Edwards should acquire more than a remainder interest coming into enjoyment at Mrs. Kaufman’s death, but assuming that this was the extent of the “gift,” it is very difficult, indeed, to determine whether that interest was presently transferred or intended to be transferred only at death. That difficulty of necessity must almost invariably exist in cases of this kind. Doubtless, it would be very helpful if a definite rule or principle one way or the other should be established by legislative enactment, so that parties might be definitely sure in advance as to how their intent in transactions of this kind would be interpreted, and could be sure whether or not an attempt to mbke a gift in this way would be held valid or invalid.

In the present case I am inclined to the opinion that the intent was of a present transfer and vesting of the right in remainder (and, probably, indeed, of a right in the entire chose during Mrs. Kaufman’s life), from the fact of the indiscriminate mingling in the deposits of the contributions of both parties, and the keeping of no record by either as to the amounts respectively contributed. Such conduct, it seems to me, negatives the idea of the retention of separate interests and is compatible only with the idea and intent of a joint ownership in the mingled and indistinguishable assets, especially under the circumstances of close relationship and mutual trust existing between this mother and daughter. The incident at the time of the mother’s presumed mortal illness in nowise effectually militates against the conclusion—for the testimony shows only that it was a suggestion or request that the mother made as to the other children sharing; it does not go to the extent of evidencing a belief by the mother that she had the right to alter the disposition of the "fund.”

It might be argued that the indistinguishable mingling of the funds is explainable by the fact that the later account was simply a continuation under the new names of the earlier account which had been in Mrs. Kaufman’s name alone. But such an argument rather substantiates than disproves my conclusion—for the funds in the earlier account were contributed by both and mingled, and the change to the two names would rather evidence the intent by the mother that the daughter’s actual interest in the account should be made a matter of record. As Mr. Phillips testified, "She wasn’t much versed in banking accounts and she wished us to make sure that her daughter received the funds” (when she died). She, of course, had no solicitude except about what should occur after her death. She knew that while she lived there could be no question or difficulty arise between herself and her daughter, for it is clear from the evidence that what was hers was her daughter’s and what was her daughter’s was hers.

However, even if the scales balanced evenly upon the question of whether the intent was of present or future transfer, the result must be the same—for the complainant-administrator not only assumed, but had, the burden of proof on the issue raised. To prove his assertion that the chose was the property of Mrs. Kaufman at her death (upon which proposition his right to recover rests solely), he must prove either (1) that the intent was not of gift at all but of convenience (and as to this the proofs are all against him), or (2) that the intent, if of gift, was of future gift and not present gift.

I will advise a decree adjudicating the right of Mrs. Edwards to the-entire account and dismissing both bills. Mrs. Edwards is entitled to costs as against both complainants; I think no other costs should be awarded.

It was stated to me toward the close of the hearing that a settlement had been arrived at between Mrs. Edwards and her brothers and sister. Upon my inquiring as to the terms of such settlement, however, it was apparent that the respective counsel were not in accord in regard thereto. In view of this, and inasmuch as I have not otherwise been apprised thereof, and the same has not been made to appear of record, I am compelled to disregard the intimation of such settlement.


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    In re estate of Maggie Riley.
    [Decided April 1st, 1921.]
    1. Where next of kin entitled to distribution of a resident decedent’s estate have died intestate and without debts and no administrators have been appointed for either of them, the court of chancery may, under its general equity powers, in a proper case and on adequate proofs, make a decree of distribution directing payment of the shares to which such deceased next of kin were entitled directly to the persons who are their respective next of kin.
    2. In such a case it must be made to appear by full and satisfactory proofs that there were no debts owing by such deceased next of kin or that if any such existed they have been paid, and no transfer or successsion taxes are leviable, or if such be leviable, what they are, so that the decree may provide for their payment.
    On application for decree of distribution.

      Mr. Eckvim Robert Walker, administrator, &e., fro se.

   Buchanan, Y. C.

The administrator of this estate shows in his hands a small fund for distribution to the next of kin; that certain of these next of kin have died in foreign states, intestate and without debts, and that no administrators have ever been appointed for either of them. He asks a decree of distribution from this coart directing the payment of the shares to which these next of kin were entitled, directly to the persons who are thevr respective next of kin; without the intervention of administration on the estates of the ancestors.

Such a decree could not, of course, be made in the orphans court, but ma3r in a proper case (and, of course, on adequate proofs) be made by this court, having general equity powers.

, The 'distribution of a decedent’s estate is a proceeding in rem, not in personam. Exton v. Zule, 14 N. J. Eq. 501. The decedent’s estate is administered by the court, for the purpose and object of distributing all of the decedent’s estate, in the proper amounts and proportions, oto and among those entitled thereto (whether creditors or next of kin) under the law of decedent’s domicile. When creditors have been paid the court ascertains and determines the persons who are entitled to receive the balance, as next of kin, and in what proportions. The decree of distribution is the formal adjudication and record of that ascertainment and determination.

Where one of the next of kin dies before distribution, his share ordinarily will be decreed to be paid to his executor or administrator. But where he dies intestate, leaving no debts, or his administrator having paid all of his debts, the administrator’s title to such distributive share would obviously be but a mere naked legal title, which he would be .required immediately to transfer to the equitable owner, the next of kin of such deceased next of kin.

Where the next of kin has died intestate, leaving no debts, and no administrator has ever been appointed, the appointment of an administrator for the mere purpose of taking the distributive share and immediately paying it over to the “secondary” next of kin, is unnecessanr and a matter of useless time, trouble and expense—a “useless ceremony,” Fretwell v. Lemore, 52 Ala. 124 (at p. 133), and a court of equity will dispense with such administration and decree distribution directly to the “secondary” next of kin.

See also Re Mullen, 145 N. Y. 98 (at p. 104); Watson v. Byrd, 53 Miss. 480; Marshall v. Crow, 29 Ala. 278; Young v. Kennedy, 95 N. C. 265; also 18 Cyc. 624, and cases there cited.

Such decree will therefore be advised in the present case.

Of course, in any case of this kind it must be made to appear by full and satisfactory proof that there were no debts, or that if any debts existed they have been paid, and that no transfer or succession taxes are leviable (or, if such be leviable, what they are, so that the decree may provide for their payment).