author: Leaking, Y. C.

text:
    Edward G. Pendleton v. Charles F. Gondolf et al.
    [Submitted June 15th, 1915.
    Determined November 11th, 1915.]
    1. Where one engaged in the business of swindling others for a- livelihood conveyed realty to his wife without consideration, such conveyance was made in fraud of future creditors, that being the constant purpose of the grantor.
    2. Where a husband, who was engaged in the business of swindling others for his livelihood, conveyed realty for value to his wife, who had no knowledge of the nature of his pursuits, such wife, as against the husband’s creditor suing to set aside the conveyance, was entitled to a lien upon the property to the extent of the value paid by her.
    3. In view of the statute giving the defendant in attachment one year after distribution of the proceeds of sale under the attachment judgment to sue the attachment creditor for money received by him which was not due and owing, where judgment in attachment proceedings was entered after the attachment creditor’s bill in equity in aid of the attachment to set aside an alleged fraudulent conveyance bjr the attachment debtor was filed, and before final hearing the judgment in the attachment proceedings was not conclusive as to the debt due from the attachment debtor to the complainant, and was not operative to relieve him from establishing, in his suit to set aside the conveyance, the nature and amount of his claim, nor to deny to the grantee the right to contest the existence of a debt from her grantor to the complainant for which an attachment could be sustained, since the judgment in the attachment suit was in rem and purely statutory, and, while conclusive for certain purposes, was not conclusive of the debt, the provision of the statute also being inconsistent with the conclusiveness of the judgment as to the debt.

      4. Where complainant was swindled through his agreeing to furnish the money for a “wire-tapping” scheme to defraud others and to be operated by defendant and a supposed employe of the Western Union Telegraph Company, who agreed to betray his trust, such complainant could not maintain a suit in equity in aid of his attachment levy against the defendant to set aside such defendant’s conveyance of realty to his wife as fraudulent against future creditors, since he who comes into equity must come with clean hands.
    5. In such case the existence of 2 Comp. Stat. p. 262Jf § 5, authorizing a recovery within six months of money paid over in gambling transactions, did not support complainant’s right to sue, where the transaction whereby he lost the money which he sought to recoup from defendant’s property was not a gambling transaction, the pretended pool room where the money was lost having not been such in fact and no real bets having-been made, but merely a fictitious plant operated to fleece complainant.
    On final hearing on creditor’s bill.

      Air. Martin V. Bergen, for the complainant.

      Messrs. Wilson .& Carr, for the defendant Mary E. Gondolf.
   Leaking, Y. C.

Complainant has caused a writ of attachment to be issued in his behalf against the property of defendant Charles E. Gondolf, as a non-resident debtor, and the writ has been levied on certain real estate in Atlantic City, the legal title to which now stands in the name of Maud Gondolf. Maud Gondolf is the name by which the wife of the attachment debtor is commonly known; her real name is Mary E. Gondolf.

The bill in this suit is in aid of the attachment levy, and seeks a decree declaring the conveyance to the wife of the attachment debtor fraudulent and void as against the lien of complainant’s writ.

The conveyance to the wife of the attachment debtor was made April 18th, 1911. The debt for which the attachment was issued was contracted in January, 1912. Complainant’s right to relief against the conveyance is accordingly based upon the claim that, the conveyance was made to defraud future creditors.

The writ of‘attachment was issued and levied December 9th, 1912. The bill in this suit was filed December 16th, 1912. Pending this suit, and before final hearing, judgment was entered in plaintiff’s favor on the report of the auditor in the at- - tachment proceedings; that judgment has been offered and received in evidence in this suit.

The primary question for consideration herein is whether the conveyance to the wife of the attachment debtor was made with intent to defraud his future creditors.

The evidence clearly establishes that in January, 1912, when the debt which is made the foundation of this suit was contracted j Charles F.' Gondolf, the attachment debtor, was a member of a gang of professional swindlers in New York City, commonly called “wire-tappers,” and was at that time operating in that city as a confidence man in connection with that gang. It was through these swindling operations conducted by the attachment debtor and his confederates -that complainant lost the money for which the attachment was issued. It is urged that the proofs do not establish with certainty what the attachment debtor was doing in the preceding April when the property here in question was conveyed to his wife; but I am convinced that there can be no doubt that he was then engaged in the same or kindred criminal pursuits as a means of livelihood. It is estab-' lished that prior to that time (in 1908) he was conducting a gambling-house in Atlantic City and that prior to, at the time of, and subsequent to the date of the conveyance in question, he was living in New York City under assumed names to conceal his identity. Without taking into account the testimony of an official of the New York police department of transactions of the attachment debtor touching which the official had no direct personal knowledge and disregarding his testimony of the fact that the attachment debtor had been known to his department for many years as a professional crook and confidence man, it is yet reasonably certain that at the time of the conveyance here in question the attachment debtor was in fact engaged in these unlawful pursuits as a means of livelihood. The business or avocation in life of swindling others necessarily carries with it the ever-present purpose of defrauding future creditors; such a business may be said to be the business of defrauding future creditors, for its successful operation is dependent upon escaping from liabilities incurred in its pursuit. When a person so engaged makes a voluntary conveyance to his wife of all of his property, it is impossible to resist the conclusion that the conveyance was made to defraud future .creditors. Should it be doubted that when the conveyance here in question was made the attachment debtor was operating as a confidence man, it is yet entirely clear that he was so operating soon thereafter; the conveyance was either made while he was pursuing the swindling operations already referred to or a short time before he entered upon those pursuits. Such a conveyance can only be properly, regarded as made in fraud of future creditors.

It is urged in behalf of Mrs. Gondolf that the conveyance to her by her husband was not wholly voluntary. The evidence discloses that prior to the date of the conveyance to Mrs. Gondolf the attachment debtor had conveyed the premises in ques1 tion to one Dora Collins; the conveyance to Mrs. Gondolf was from Mrs. Collins. Mrs. Gondolf has testified that the conveyance from her husband to Mrs. Collins was to secure a loan of $1,000 made by Mrs. Collins to her husband, and that her husband agreed with her that if she- would pay off that loan she could have the property, and that she subsequently discharged the Collins loan with her own money, and Mrs. Collins then conveyed the property to her at the request of her husband. I am unable to regard as false this testimony, corroborated as it is in material particulars.

The property conveyed was worth about $14,000. As to the excess over $1,000 the conveyance was admittedly voluntary. Nor am I able to treat as false the claim of Mrs. Gondolf that she was not aware of the nature of her husband’s pursuits, and had no reason to believe that the conveyance to her was intended by her husband to defraud creditors. Any decree in behalf of complainant must accordingly recognize a lien in behalf of Mrs. Gondolf to the amount of $1,000.

After the bill in this suit was filed, and before final hearing, a judgment in the attachment proceedings was entered for the amount claimed pursuant to the report of the auditor. It is now urged in behalf of complainant that that judgment is conclusive as to the debt due from the attachment debtor to complainant herein, and is operative to relieve the complainant herein from the necessity of establishing in this suit the nature and amount of his claim, and is also operative to deny to Mrs. Gondolf the right to contest the existence of a debt from her grantor to complainant for which an attachment could be sustained. I am unable to adopt that view. As the attachment judgment had not been entered at the time the bill was filed, the bill merely avers the indebtedness and the issuance and levy of the writ; the answer of Mrs. Condolí denied the indebtedness. No supplemental pleadings have been filed, but no objection has been made based on that circumstance. No answer has been filed b,y the attachment debtor and no appearance has been entered by him in the attachment proceedings. In these circumstances, what conclusive force must be given to the judgment in attachment ?

The conclusive force to be given to a judgment which is made the basis of a suit of this nature is considered in McCanless v. Smith, 51 N. J. Eq. 505, and again in Minzesheimer v. Doolittle, 56 N. J. Eq. 206. But in these two cited cases the judgments were in personam. In the present case, the judgment is in rem and is purely statutory, and while it may be regarded as conclusive for certain purposes, it is not conclusive of the debt. By the terms 'of our statute the defendant in attachment is given one year after distribution of the proceeds of sale under the attachment judgment to sue the attachment creditor for money received by him which was not due and owing. This provision of our statute is pointed out in Miller v. Dungan, 36 N. J. Law 21, as wholly inconsistent with the idea of conclusiveness of the attachment judgment as to the debt, and in Schenck v. Griffin, 38 N. J. Law 462, our court of errors and appeals adopts the same view.

At final hearing herein complainant was required to establish the debt for which his attachment was issued. The evidence disclosed that the attachment was issued for money which complainant had lost through swindling operations of the defendant in attachment and his associates. The circumstances disclosed were briefly as follows: Complainant, while in New York City, was approached by a man who said his name was Hall and that he had met complainant before; in that manner he gained complainant’s confidence. Hall subsequently introduced to oomplainant the defendant in attachment under the name of McDonald. Hall and McDonald then induced complainant to believe that McDonald, by breach of trust with the Western Union Telegraph Company, with which company they falsely represented that McDonald was connected, could procure advance information touching the result of horse races then in progress, and with that information sure-thing wagers could be made in a certain pool room to which Hall and McDonald would conduct complainant. Complainant was to supply tire necessary money and the earnings were to be divided among the three. Complainant assented to the arrangement and made the bets at the place designated and in the manner directed by the advance information supplied to him as arranged. The place where the bets were made proved to be a fake pool room, and the information supplied touching the races was also manufactured for the occasion; the result was the loss by complainant of the money for which the attachment was issued.

It thus appears that the contract between complainant and defendant in attachment, through which complainant lost the money for which the writ of attachment was issued, was a contract whereby the defendant in attachment was to supply to complainant information to be procured through a breach of trust to his employer, which information so supplied was to be used by complainant to swindle what complainant believed to be a pool room; the proceeds of the proposed swindle wore to be shared by the three participants in the unlawful undertaking. There was in fact no real pool room and no breach of trust by a trusted employe; complainant in consequence failed to accomplish his unlawful purpose. But complainant’s moral turpitude in the transaction was in no way lessened by the miscarriage of his plans; the moral turpitude of one who attempts the assassination of another is in no way involved in the circumstance that his intended victim escapes through his inaccurate aim. It follows that this court is now called upon to award a purely equitable remedjr to one who has been guilty of unconscionable conduct clearly involving his moral turpitude in the very transaction which forms the basis of his claim.

It is a maxim of equity that he who comes into a c'ourt of equity must come with clean hands, and in the ordinary application of that maxim a court of equity denies its remedies to a complainant who has been guilty of bad faith, fraud or unconscionable acts in the transaction which forms the basis of his suit. The inquiry, therefore, arises whether in the circumstances of this suit the proper application of that maxim is operative to deny to complainant herein the relief now sought by him.

In the law courts a similar principle is recognized, but in its application cases are to be found in which the courts incline to measure tire comparative guilt of the respective parties and extend relief to one who is comparatively innocent; that situation usually has been presented in cases in which the wrongful conduct of the party seeking relief has arisen through undue influence arising from a trust relationship of the parties, through mental weakness, threats, fea.r or oppression and like circumstances which have been regarded as sufficient to measurably excuse the wrongful conduct involved. And even when the parties have been found to be in pari delicto, relief has at times been awarded on the ground tha*t in the particular case public policy has been found to be best conserved by that course. Cases are also to be found in which courts of equity have adopted similar views. Brit I am unable to find any justification for a court of equity to extend equitable relief to a suitor who has been guilty of conduct involving the degree of moral turpitude of that which is involved in the conduct of complainant herein in the very transaction which forms the basis of the relief sought when that conduct and the turpitude involved in it have been impelled by the deliberate and intelligent purpose of the rational and normal intellect of a free agent. While complainant herein was the victim of his associates, and while his conduct was measurably influenced by them, yet his determination to enter with them into what he clearly understood to be swindling operations was wholly voluntary on his part; there was presented to him what appeared to him to be an opportunity of pecuniary profit by engaging in wrong-doing and he deliberately accepted the opportunity; the influence which impelled him was his cupidity and not the influence of his associates; his moral turpitude included not only the purpose to swindle others, but also a purpose to accept the benefits of a breach of trust of his associates as a part of the proposed plan of operations. Any attempt to measure the degrees of moral turpitude involved in the conduct of the respective parties is futile; complainant’s associates sought to swindle complainant, complainant sought to swindle others; if the degree of turpitude can be measured by the money involved, the amount complainant intended to gain by his wrongful conduct was many times more than the amount which his associates sought to gain from him by their wrongful operations. The suggestion that complainant was corrupted by his associates discloses only too clearly his willingness to engage in crime for monetary gain; there was no coercion and no undue influence in the sense in which that term is properly used; the opportunity for gain from wrong-doing was presented and accepted; complainant’s conduct can only be regarded as having been voluntary and intelligent in its purpose.

As already suggested, cases are to be found, in which it has been thought that, public policy is best conserved by awarding relief in cases somewhat of this nature; but I am convinced that the decisions of the courts of this state, and the decided weight of authority elsewhere, is to the contrary. In Cutler v. Tuttle, 19 N. J. Eq. 549, it was held by our court of errors and appeals that where one supplied money for the purchase of a property and caused the title to be taken in the name of another to defraud creditors of the purchaser, a court of equity would not decree a resulting trust in behalf of the person who supplied the money. In Johns v. Norris, 22 N. J. Eq. 102, it was held by this court that a widow who had procured a person to purchase at foreclosure sale the real estate of her late husband at prices below its real value by a contrivance agreed upon to deter bidder’s by giving out that the purchase was for the benefit of the widow and her family, was a party to a fraud against tire heir and creditors, and that in consequence she could not come into equity for relief against her confederate because of her unclean hands. In Watson v. Murray, 23 N. J. Eq. 257, a bill was filed by a member of a partnership against the other partners for discovery and an accounting of the profits and assets of the firm, which firm was engaged in a lottery business. A demurrer to the bill was sustained by this court. The ground of the decision is disclosed in a single quotation from the opinion: “It (the business) is eminently one to which the maxim applies, ex turpi causa non oritur actio. 'The objection,’ says Lord Mansfield, 'that a contract is immoral or illegal, as between plaintiff and défendant, sounds at all times very ill in the mouth of defendant. It is not for his sake, however, that the objection is ever allowed, but it is founded on general principles of policy. No court will lend aid to a man who founds his cause of action upon an immoral or illegal act.’ Holman v. Johnson, Cowp. 343.” It was also there held to be immaterial that the bill was for an accounting among the partners and not in furtherance of the illegal contract or business. In Ellicott v. Chamberlin, 38 N. J. Eq. 604, an executor had agreed to renounce his executorship for $10,000. When he renounced he was paid part of the agreed amount in cash and part by the delivery of certain securities and a note was given for the balance. An action at law was subsequently brought on the note, and a bill was then filed in this court by the maker of the note to restrain the action at law and also tp compel the restoration of the securities which had been delivered and also to compel the repayment of the money which had been paid. It was held by our court of errors and appeals that the contract to receive compensation for renunciation of an executorship was illegal as against public policy and that this court should leave the parties where it found them. The prayer for the return of the securities and money was accordingly denied. The prayer for an injunction against the suit at law was denied because the defence to the note was as available in a court of law as here. In Winans v. Graves, 43 N. J. Eq. 263, it was held by our court of errors and appeals that a party to whom a judgment had been assigned in pursuance of an understanding with the judgment debtor that the assignee should hold the same for the purpose of protecting the judgment debtor’s 'property from claims of his creditors, could receive no aid from a court of equity in reaching and applying to the payment of the assigned judgment property which the judgment debtor had placed in the name of a third party in fraud of his creditors. In Brooks v. Cooper, 50 N. J. Eq. 761, it was held by the same court that relief would not be afforded a suitor if based upon a transaction contrary to the terms or spirit of a statute or contrary to the policjr of the laws of the state. In Hildebrand v. Willig, 64 N. J. Eq. 249, it was held by this court that this court would not aid the heir of one who had conveyed his land with intent to defraud his creditors even though it appeared that no creditors had been in fact defrauded. In Camden Iron Works v. Camden, 64 N. J. Eq. 723, it was held by our court of errors and appeals that if a claim filed under our Municipal Liens act should contain demands known by the claimant to be beyond the actual amount due or should knowingly omit any credit to which the contractor was entitled no lien could be enforced. The court said: “It needs to be remembered that these proceedings for the enforcement of liens under this statute are made cognizable in equity, and that the principles of equity are applicable to one who comes into court to foreclose a lien of this character. He who seeks equity must do equity, and he who comes into equity must come with clean hands.” In Vulcan Detinning Co. v. American Can Co., 70 N. J. Eq. 588, this court denied relief to complainant because of the unclean hands of the parties from whom complainant acquired its rights to- the secret process which it sought this court to protect. The opinion filed says: “It is not alone fraud or illegality which will prevent a suitor from entering a court of equity. Any really unconscientious conduct connected with the controversy to which he is a party will repel him from the forum whose very foundation is good conscience. Pom. Eq. Jur. § 404.” This case was reversed in our court of errors and appeals {72 N. J. Eq. SS7), for the reason that the latter court determined that complainant had no actual knowledge of unconscionable conduct of its vendor, hence, while complainant’s legal rights might be affected by the knowledge of its agent, complainant’s conscience' could not be so affected and complainant could not, in consequence, be properly charged with unclean hands within the meaning of the equitable maxim. But no other criticism was made of the application of the* equitable maxim by the lower court. These decisions are all necessarily based upon the assumption that a denial of equitable relief to a participant in wrong-doing forms a part of the recognized public policy of this state as best conserving public interests; it follows that to aid a participant in wrong-doing in the recovery of the property which he has disposed of in the attempted execution of his wrongful purposes on any theory that such course might best conserve public interests becomes impossible without a complete reversal of our defined policy as disclosed in the cases above cited.

I also think it immaterial in this case whether the maxim, “In pari delicto potior est conditio defendentis ” is to be understood as but a corollary to the general rule “Ex dolo malo non oritur actio ” or as a limitation of the latter maxim, for parties are necessarily to be regarded as in pari delicto when the executed transaction which is made the basis of equitable relief is one in which each party of his own free and intelligent will entered with a deliberate and defined purpose to swindle others. “In the Boatright Cases," reported in 195 Mo. 693; 130 Fed. Rep. 905, and 117 Fed. Rep. 325, there is found an element of coercion which finds no parallel in the present case.

It is contended in behalf of complainant that the transaction which is made the basis of this suit was a gaming transaction falling within the provisions of a New York statute which gives a right of civil action for money lost, and that the laws of that state permit the action to be brought within the period within which the attachment was issued. In behalf of defendant it is contended that the statute of this state limits the period within which such actions can be brought to six calendar months. 2 Comp. Stat. p. 2624 § 5. The attachment here in question was not issued within that period.

A court of equity will ordinarily refuse relief under a gaming contract which has been executed by the payment of money, but where a statute authorizes affirmative relief in a gaming, usurious or other kindred transaction, this court necessarily extends its remedies in furtherance of such relief. I think it unnecessary, however, to consider here either the provisions of the New York statute or the effect of our statute limiting the period within which such actions shall be brought in this state. The transaction here involved was not a gaming transaction. The place where the money was lost was not in fact a pool room and no real bets were made. The pretended wagers were mere form and wholly without substance. They were not in fact wagers. Complainant did not undertake to make a wager; believing that he knew the result of the race it was his purpose and aim to rob the supposed pool room by means of a pretended wager ; there was in bis conception of tlie situation, and, in fact, no contingency to afford the basis of a real wager. Complainant’s adversaries did not undertake to make a wager; they, too, were engaged in a plan to rob by means of pretended wagers. The parties wore' alike engaged in an attempt at robbery and the pretended wagers merely afforded a common field of operations. In this view it seems unnecessary to consider here whether our Gaming act in declaring gambling transactions unlawful, and at the same time authorizing a recovery of money paid for a period of six months onljr, defines a policy of this state in transactions of that nature which is operative to deny to the courts of this state the right to extend such relief, or is operative to deter this court in extending such relief, after that period has expired, by reason of a longer period for recovery being prescribed by the statute of the foreign state where the transaction occurred.

I will advise a decree dismissing the bill.


source: Caselaw Access Project

author: Reaming, V. C.

license: Public Domain

text:
    Charles Class and Julius Nechod v. Helena G. Strack.
    [Submitted October 13th, 1915.
    Determined November 20th, 1915.]
    1. P. L. 1915 p. 61, approved March 3d, 1915, taking effect July 4th ot that year, section 7, providing that the estates and interests of dower and the rights of dower and curtesy are abolished, but that nothing in the act shall affect any of such estates or interests which may have become vested, was intended to exempt from the operation of the act all dower rights or interests which existed prior to the time of its taking effect, whether such dower rights or interests were inchoate or consummate, since “estates or interests,” when used as descriptive of dower rights, clearly comprehend an inchoate right of dower, while the “inchoate right of dower,” being a present and fixed interest in land of ascertainable money value which accrues to a wife the moment her husband becomes seized of an estate of inheritance in land, is “vested” within the statute, since the word does not exclude defeasible estates, being used to denote the quality of a present estate, though defeasible, as distinguished from that the very existence of which is contingent.
    2. Where the bill of mortgagees, who had foreclosed, to quiet title against the wife of the mortgagor, alleged as a fact that the decree in the foreclosure suit cutting off her rights was erroneous by reason of the mortgagees’ own false averments in the bill in the foreclosure suit as to the wife’s marriage being subsequent to the execution of the mortgage, of which she had no adequate notice by reason of a subpoena ticket served on her, the mortgagees could have no equitable relief, by reason of the decree in the foreclosure suit, under the averments of their bill to quiet title.
    On bill to quiet title. Hearing on motion to test sufficiency of bill.
    The right asserted by complainants herein is primarily based on the provisions of an act of our legislature which was approved March 3d, 1915, and which took effect July 4th, 1915 (P. L. 191(5 p. 6,1), which act, among other things, abolishes the estates of dower and curtesy, respectively, and substitutes therefor life estates in one-third of the real estate of which a husband or wife should die seized without devising the same.
    The bill asserts that complainants’ possession and title to the premises in question were acquired May 14th, 1915, under a decree of sale made in the foreclosure of a mortgage, which mortgage was executed by the husband of defendant on land of which he was then seized of an estate of inheritance; at the time of the execution of the mortgage defendant was the wife of the mortgagor but did not join in its execution; the husband (mortgagor) is still alive, and defendant, as his wife, now claims an inchoate right of dower in the land. A decree is sought quieting complainants’ title as against the claim of defendant. The bill also asserts that defendant’s claim of an inchoate right of dower is barred by the foreclosure decree.
    Defendant has moved to strike out the bill upon the grounds— first, that the act of March 3d, 1915, did not by its terms include a right of dower, either inchoate or consummate, which existed at the time the act took effect; second, that the act is unconstitutional; third j that the bill is without equity.

      Mr. Harrison H. Yoorhees, for the complainants.-

      Mr. Joseph B. Tyler, for the defendant.
   Reaming, V. C.

The averments of the bill fully disclose that prior to the time when the act of March 3d, 1915, took effect defendant enjoyed an inchoate right of dower in the premises in question; she necessarily enjoys that right at this time if the act exempts from its operation inchoate rights of dower which existed as such when the act took effect.

The seventh section of the act provides as follows: “The estates and interests of dower, and right of dower and curtesy be and the same are abolished hereby; provided, however, that nothing in this act shall affect any of such estates or interests which may have become vested heretofore.”

I am satisfied that by the proviso above quoted the legislature intended to exempt from the operation of the act all dower rights or interests which existed prior to the time the act took effect, whether such dower rights or interests were either inchoate or consummate.

Had the proviso by its terms included only estates which had become vested it could appropriately be doubted whether an inchoate right of dower could be regarded as within its contemplation, as dower inchoate may be properly classified as an interest which is less than an estate in land; but the language “estates or interests,” when used as descriptive of dower rights, clearly comprehends an inchoate right of dower unless a contrary intent in some way is made apparent. Anderson’s Law Dictionary, citing Abbott’s Law Dictionary, in defining the word “interest,” says:

“The chief use of the word is to distinguish some right which cannot or need not be defined with precision. In some connections it includes title; in others advantages less than title. Sometimes it is added to words of a more definite meaning by way of precaution that no conceivable claim shall be omitted; sometimes it signifies an undefined share.”

But it is urged that the qualifying word “vested” is operative to exclude an inchoate right of dower from the operation of the proviso. I am unable to attribute that force to the word in the manner and connection in which it is used in the proviso here in question.

In some jurisdictions an inchoate right of dower is regarded as a mere possibility of future interest which is without present ascertainable value. But in this state the inchoate right has long been recognized by our courts as a present and fixed interest in land of substantial and ascertainable money value, and the legislation here in question must accordingly be understood in the light of that recognized quality of the interest. Regarding the legislative conception of the inchoate right as a present and fixed interest in land of ascertainable money value which accrues to a wife the moment her husband 'becomes seized of an estate of inheritance in land, the exclusion by the terms of the act of dower “estates or interests” which have become “vested” before the act takes effect can only be properly understood as including the inchoate right here in question. The word “vested,” even when used as descriptive of recognized legal estates, does not exclude defeasible estates. It is used to denote tire quality of a present estate, even though defeasible, as distinguished from that the very existence of which is contingent. A devise of land is vested when the devisee is existing and known and would be immediately entitled to possession or enjoyment were the precedent estate to terminate, although it is possible that before the time comes to receive it another person may come into being who will take in preference to the devisee. In a like sense may an inchoate right of dower which is recognized’by the laws of the state as a present interest in land of substantial and ascertainable value be regarded as a vested interest, notwithstanding the circumstance that it has not. ripened into a consummate freehold estate, and is also subject to being divested by death of the wife in the lifetime of her husband.

The recognition of this quality of an inchoate right of dower is found in repeated decisions of the courts of this state. In Wheeler v. Kirtland, 27 N. J. Eq. 534, our court of errors and appeals expressly bases its decision upon the conclusion that inchoate ¿lower is a present valuable interest in.land, and that its value is ascertainable and must be paid to a wife out of the money awarded as damages to the land in proceedings instituted by a municipality for the condemnation of the land for public use. A like conception of inchoate dower is made the basis of decision in In re Alexander, 53 N. J. Eq. 96, in which case it is declared that the legislature cannot destroy the inchoate right- of dower without compensation to the wife. See, also, Brown v. Brown, 82 N. J. Eq. 40; Lloyd v. Conover, 25 N. J. Law 47, 52, in which case Chief-Justice Green characterizes the right of inchoate dower as “vested.” Vreeland v. Jacobus, 19 N. J. Eq. 231; Conover v. Tindall, 20 N. J. Law 513, 515; Lousbery v. Locander, 25 N. J. Eq. 554, 557.

This view renders it unnecessary to consider the objection that the title to the act here in question is inadequate to satisfy the requirements of our constitution.

The bill filed herein also sets 'forth that at the time the mortgage was executed, under decree of foreclosure of which complainants herein hold, the mortgagor falsely represented to complainants herein, who were mortgagees, that he was a widower, and at- the time the mortgage was foreclosed the mortgagees, complainants herein, believed that defendant herein had married the mortgagor subsequent to the execution of the mortgage, and that the foreclosure bill accordingly made defendant herein a party defendant and averred that her marriage was subsequent to the execution of the mortgage, and that the subpoena served on defendant herein in the foreclosure suit was accompanied by a ticket which informed her that she was made defendant because she was the wife of the mortgagor, the owner of the mortgaged premises, and by reason thereof claimed a right of dower; and that she did not appear or defend the foreclosure. It is accordingly now urged that the decree in foreclosure was operative to bar her rights. It thus appears by the present bill that the subpoena ticket which was served on defendant herein in the foreclosure suit informed her that she was made defendant because she was the wife of the mortgagor and by reason thereof claimed a right of dower in the mortgaged premises. The present bill also asserts as a fact that she was the wife of the mortgagor at the time the mortgage was executed. Complainants thus seek to now bar defendant’s rights by reason of a foreclosure decree based on an averment which was contained in their foreclosure bill, which averment they now assert to have been false in fact, and of which averment the subpoena ticket served on defendant gave no adequate notice. The question presently presented does not therefore involve a consideration of the effect of that decree either standing alone or in connection with an application by defendant for relief against it, but, on the contrary, involves the right of complainants, as against defendant, to the benefits of that decree in this suit in which their own bill sets forth as a fact that the decree was erroneous as to the rights of defendant by reason of their own false averments in the bill under which the decree was entered. It is entirely clear that no equitable relief can be extended to complainants by reason of that decree under the averments of the present bill.

I will advise a decree dismissing the bill.


text:
    William C. Davis v. Salem County Mutual Fire Insurance Company.
    [Submitted July 20th, 1915.
    Determined November 22d, 1915.]
    Where the assignee of a policy of fire insurance, before the premiums for 1912, 1918 and 1914 became due January 1st, received a notice from the insurer in pursuance to which he had a receipt endorsed on his policy for the premium due, at the same time signing a receipt for a dividend due him from the company, for the same amount as the premiums, but in 1915, when likewise a dividend in the amount of the premium was due, he received no notice from the insurer, neglecting to pay his premium until January 12th, when it notified him that 'his policy had lapsed, whereupon he applied for reinstatement, which was refused, the insurer, by its conduct for the three years preceding 1915, waived its contractual right under the policy to forfeit the assignee’s right to renew or continue it, more especially because no injury to the insurer could arise by reason of its being denied the money due as a premium.

      On bill to reinstate policy of insurance. On hearing on motion to strike out bill.
    By the present bill complainant seeks a decree of this court reinstating a policy of fire insurance which defendant company has declared “lapsed” by reason of complainant’s failure to pay a premium on the day specified in the policy for that purpose. The specific ground for relief is that January 1st, 1915, the day on which an annual premium should have been paid by complainant, there was due to complainant from defendant company a dividend of the same amount as the premium, and that complainant’s failure to pay the premium on that day was properly attributable to the conduct of defendant company. Defendant company has moved to strike out the bill for want of equity.
    The bill alleges that defendant is a mutual fire insurance .company incorporated under the laws of this state, and that by its plan of insurance its policies represent shareholders’ interests in the company and entitle the policyholders to a credit for dividends as and when declared by the company; that the policy here in question was issued to complainant’s predecessor in title January 1st, 1893, and insured, the owner of a certain property therein described (which property is now owned by complainant) against loss by fire to the 1st day of January then next, and to each succeeding 1st day of January thereafter upon the pajonent of the necessary premium on the 1st day of January of each year; that a stipulation attached to the policy provided that if default should at any time be made in the payment of a premium after it became due,
    “then the liability of the said company to the said insured, their executors administrators or assigns for any losses or damages occurring shall cease and determine; provided, nevertheless, that if the said insured shall, within thirty days after the expiration aforesaid, make application to the directors for renewal of the insurance on the property aforesaid and shall make payment of all arrearages due and owing to said company, then and in that case, the directors may, in their discretion, revive or renew the policy of insurance as fully and effectually as if a re-survey had been made and another policy executed
    that defendant purchased the insured property October 7th, 1911, and the policy of insurance was then assigned to complainant and the assignment approved by the insurance company ; that at that time all premiums had been paid to January 1st, 1912; that the premiums for the years 1912, 1913 and 1914, respectively, became due January 1st of each of said years, and prior to their becoming due in each of said years a notice was sent by defendant company to complainant directing him to call at the office of the agent of the company and have a receipt endorsed on his policy for the premium, and at the same time sign a receipt for a dividend due to him from the company, the dividends in each of said years being the same amount as the premiums; that complainant exchanged receipts in the manner stated for the year 1912 on January 5th of that year, for the year 1913 on January 4th of that year, and for the year 1914 on January 5th of that year; that on January 1st, 1915, a dividend in like manner accrued to complainant of the same amount as the premium which was payable on that day; that complainant fully expected that defendant would for .the year 1915 follow the same course of dealing that had been pursued for the three preceding years, and would send a like notice to complainant directing him where to go to have receipts exchanged, but no notice was received, and on January 12th, 1915, he received notice from defendant company that his policy had lapsed; that complainant then applied to the company for reinstatement, but reinstatement was refused. Complainant tenders himself ready and willing to present his policy and exchange receipts or pay the premium which was due January 1st, 1915.

      Mr. Joseph Beclc Tyler, for the complainant.

      Mr. Charles Mecum and Mr. Thomas Q. Ililliari, for the defendant.
   Leaking, Y. C.

I am satisfied that the motion of defendant, which has been made to test the sufficiency of complainant’s bill, must be denied. For the three years preceding January 1st,’ 1915, the premiums which fell due on January 1st of each year had been offset by dividends of the same amounts falling due on the same days. No money payments for the premiums for those years had been exacted by the insurance company; on the contrary, the method of payment directed by the company in each of those years was an exchange of receipts, and an exchange of receipts after the due day of the premiums had been in each year apparently satisfactory to the company. The conditions which existed January 1st, 1915, were exactly the same and appropriately called for the same course of action on the part of all parties concerned. It may be that by the terms of the policy payment of a new premium on that day should be regarded as a condition precedent to the right of complainant to renew or extend - his insurance; but the conduct of the company in making settlements with complainant by exchange of receipts after the premium due dajq without objection, for the preceding three years, in exactly similar circumstances, can be'only properly regarded as a waiver of any contractual right it may otherwise have had to forfeit the right of complainant to renew or continue his policy. The circumstance that during the three preceding years complainant had received notice from the company where to exchange receipts and received no notice for the last year is not without like force, but, irrespective of the failure of the company to give that notice, it seems clear that complainant was fully justified by the former course of ■ dealing in assuming that no forfeiture of his right to renew his policy would be exacted by reason of his delay in making settlement. This is especially so in view of the circumstance that no injury to the company could arise by reason of its being denied the money due as a premium.

The question of waiver of a contractual right of forfeiture by reason of the conduct or course of dealing of the party enjoying the right has given rise to a great diversity of views in insurance cases. Many cases will be found collected in 2 May Ins. §§ 358, 361, 363, and 19 Cyc. 789, 801. The rule is stated in 18 Cyc. 789, as follows:

“It may be stated as a general rule that the insurer is deemed to have waived the performance of conditions precedent or subsequent when in good conscience he ought not to be heard to assert them, as when by reason of his conduct he has led the insured to believe that they would not be insisted upon.”

The rule thus broadly stated, may perhaps be doubted when applied to acts- or conduct contemporaneous with the execution of the contract; but cannot be doubted as a sound principle of equity when applied to future acts..

Somewhat analogous situations have arisen in this state in mortgage foreclosures in cases in which the condition of the bond authorized the mortgagee to declare the whole debt due by reason of a default in the payment of an interest installment. These provisions are treated as stipulations for a period of credit on condition of prompt interest payment, rather than as clauses of forfeiture (Spring v. Fisk, 21 N. J. Eq. 175, 178; Bergman v. Fortescue, 74 N. J. Eq. 266, 269), but our court of errors and appeals has held that if the default or omission to pay interest within the time specified was the result of honest mistake or misapprehension, into which the mortgagor was led by the acts or declarations of the mortgagee, a court of equity will not, under such circumstances, hold the failure to pay operative as a forfeiture of the future credit, DeGroot v. McCotter, 19 N. J. Eq. 531.

I will advise an order denying defendant’s motion.


author: Leaming, N C.

text:
    Walter Wood, surviving partner, trading as R. D. Wood & Company, v. The City of Ocean City et al.
    [Submitted November 3d, 1915.
    Determined November 26th, 1915.]
    1. When damages are to be ascertained by the breach of a single stipulation and are uncertain in amount and not readily susceptible of proof under the rules of evidence, then if the parties have agreed upon a sum as the measure of compensation for the breach, and that sum is not disproportionate to the presumable loss, it may be recovered as liquidated damages.

      2. In a suit to enforce a materialman’s lien on the amount due from a city under a contract for the construction of a sewer system, consisting of the laying of sewer mains and other work connected therewith, and the contract provided for the payment by the contractor to the city of $10 a day as liquidated damages for delay in completion of the work, it could not be assumed without evidence that no damages were suffered by the city from a delay of seventy-two days in completing the contract, or that the damages suffered were certain in amount or readily susceptible of proof, or that $10 a day was disproportionate to the presumable loss; the presumptions being to the contrary.
    S. The Municipal Liens act (8 Comp. Stat. 1910 p. 8815) provides that mechanics or traders who, under any contract for any public improvement with any municipality, shall perform any labor or furnish any material towards its performance, shall have a lien therefor upon the moneys due or to grow due under the contract.—Held, that, where a municipality was entitled to charge against the contractor liquidated damages for delay in completion of the contract provided for in the contract, the lien of a materialman attached only to the balance remaining due to the contractor after deducting such damages.
    On final hearing. On bill for enforcement of lien under Municipal Liens act.

      Mr. Herbert C. Bartlett, for the complainant.

      Mr. Andrew C. Bostuell, for the defendant city of Ocean City.
   Leaming, N C.

The single question here presented is whether, as against a materialman who has filed a claim of lien under our Municipal Liens act (3 Comp. Stat. p. 3315), a municipality can charge against the contract price a certain per diem amount which has been agreed upon in the original contract as liquidated damages to the municipality for failure of the contractor to complete the work within a specified time.

By the terms of the contract between the municipality and its contractor the contractor was to construct for the municipality a certain sewer system for a given price and to complete the work on or before a specified day. The contract also provided that the contractor was to pay to the municipality the sum of $10 per day as liquidated and ascertained damages for each and every day’s delay that the work should remain unfinished after the specified date. The contractor finished the work seventy-two-days after the day specified for that purpose, and the municipality now claims the right to charge $720 against the amount that would have been due the contractor had the work been finished on time.

The bill is filed by a materialman pursuant to the provisions of our Municipal Liens act, the municipality and the contractor having been made defendants, and the only present controversy is whether the charge which the city has made against the contractor as liquidated damages can be sustained as against the lien of the materialman, which lien is asserted against the balance which would have been due the contractor had the work been finished at the time specified for that purpose.

The rule laid down by our court of errors and appeals in Monmouth Park Association v. Wallis Iron Works, 55 N. J. Law 132, 141, in relation to contractual stipulations for liquidated damages, is that when damages are to be ascertained by the breach of a single stipulation, and they are uncertain in amount and not readily susceptible of proof under the rules of evidence, then, if the parties have agreed upon a sum as the measure of compensation for the breach, and that sum is not disproportionate to the presumable loss, it may be recovered as liquidated damages.

In this case no testimony has been introduced to ascertain what damages, if any, the municipality may have suffered by the delay of its contractor or to determine whether any such damages were susceptible of proof. The bill avers that the contract was for the construction of a “a sewer system consisting of the laying of sewer mains and other work connected therewith,” and that averment is admitted by the answer; the clause of the contract touching.liquidated damages and the period of delay of the contractor in finishing the work is also admitted. In these circumstances it is clearly impossible for this court to assume either .that no damages were suffered by the city by reason of the delay or that any damages suffered were of a nature to be certain in amount or readily susceptible of proof or that $10 per day was disproportionate to tire presumable loss. The presumptions are to the contrary. It is, indeed, difficult to conceive a contract in which damages caused by delay in completion would be more uncertain in amount or less susceptible of proof than a sewer construction contract for a municipality; and $10 per day for delay as an estimated and agreed amount cannot be said to be disproportionate to the reasonably presumable loss.

If, then, the municipality is entitled to charge the amount against the contractor, it necessarily follows that the lien of a materialman can attach only to the balance remaining due from the municipality to the contractor.

I am unable to regard McKee v. Rapp, 35 N. Y. Supp. 175, as an authority militating against the views above expressed. In that case the completion of a school house was delayed but a few days, and the circumstances of the case reasonably disclosed that no damages had resulted in consequence. In the present case, it is impossible to conclude that no fair presumption of actual damage exists.

I will advise a decree sustaining the lien of complainant for the balance of the amount due from the municipality to the contractor after charging against the contractor the amount stipulated in the contract as liquidated damages for the contractor’s delay in completion.


author: Beaming, Y. C.

text:
    Mack Manufacturing Company v. Citizens Construction Company et al.
    [Submitted November 18th, 1915.
    Determined December 8th, 1915.]
    1. Under 8 Clomp. Stat. 1910 p. 8815 § 86, giving persons who furnish materials to contractors for improvements on municipal -property a lien on funds due the contractor from the city, and page 3319, section 40, providing that the lien shall attach from the time of filing notice thereof, one who furnished material to a corporation contractor for municipal improvements, but failed to file his notice until after a decree of insolvency against the corporation and the appointment of a receiver for it, acquired no lien, since upon the appointment of a receiver the corporation assets vested in him, and no liens could thereafter be established, the provisions of section 40 not contemplating an inchoate lien before filing.
    2. That a receiver for an insolvent corporation conducted work on a municipal improvement and used material furnished prior to the insolvency proceeding does not establish a claim of a materialman for a lien for such materials as against the insolvent corporation, when notice of the lien was filed after appointment of the receiver, since his acts were within his powers, and any liability he may have incurred cannot be adjudicated in a suit to enforce a lien.
    3. Where a materialman sued to enforce a lien, against funds of a municipality due an insolvent contractor, he could not attack in that action a claim of a bank to which the funds had been assigned, but it was the duty of the receiver to pass on the bank’s claim, his determination thereon being subject to review, it being first determined that the complainant had no lien.
    On final hearing. On bill to enforce lien of materialman against funds in bands of a municipality.

      Mr. J. Merritt Lane, for the complainant.

      Mr. Peter Baches, for the receiver of the defendant company.

      Mr. George W. Macpherson and Mr. Nelson B. Gashill, for the Broad Street National Bank.

      Mr. Edward L. Katzenbach, for Joseph B. Richardson & Sons.
   Beaming, Y. C.

Two suits of the same title have been heard and considered together. They are in all material respects identical except that they relate to two separate municipal contracts. The bills are filed by complainant pursuant to the provisions of the act commonly referred to as our Municipal Biens act. 3 Comp. Stat. p. 3315. Complainant seeks to establish and enforce a claim of lien against money due from defendant municipality under certain contracts made by the municipality for public improvements, complainant’s claim being for the value of materials supplied to the contractor, a corporation of this state.

Complainant’s notices of claim of lien were served pursuant to the act after a decree of insolvency had been made by this court against the corporation contractor pursuant to the provisions of our Corporation act and the usual decree of injunction had been issued and a receiver in insolvency had been appointed and had qualified. There are no other parties claiming liens under the act, except by reason of lien claims filed after the receiver’s appointment and qualification.

I entertain the view that in these circumstances complainant has acquired no lien under the act and its bill must be accordingly dismissed.

The insolvency provisions of our Corporation act render it clear that upon the appointment of a receiver in insolvency the title .of the insolvent corporation to its assets are divested and forthwith vested in the receiver subject only to liens then existing, to the end that an equal distribution of the net assets may be made among general creditors. The assets are thus placed in custodia legis for the purpose stated.

It will, not be contended that a judgment entered against tire corporation by a general creditor after the appointment and qualification of a statutory receiver in insolvency is operative to confer a lien prior to other general creditors. The creation of any" liens against the assets after the appointment and qualification of a receiver are utterly destructive of the obvious purposes of the act, unless, perchance, such liens may be properly based upon rights antecedent the receivership.

The statute under which complainant claims a lien expressly provides that the lien shall attach from the time it is filed, and our courts have repeatedly held that this provision, unlike the provisions of the Mechanics’ Lien act which relates the lien to a prior date, is destructive of the idea of an inchoate lien prior to that time. This has been held in the following cases in this court and in our Court of errors and appeals: Garretson v. Clark and Harris v. Garretson, 57 Atl. Rep. 414; Somers Brick Co. v. Souder, 70 N. J. Eq. 388, 394; Same Case on appeal, 71 N. J. Eq. 759, 762; Cope v. Walton Company, 77 N. J. Eq. 512, 517; Board of Education v. Tait, 80 N. J. Eq. 94, 96; Agnew Company v. Paterson Board of Education, 83 N. J. Eq. 49, 66; Same Case on appeal, Ibid. 336, 339.

The views stated by Vice-Chancellor Stevenson in Agnew Company v. Paterson Board of Education, supra, touching the effect of a federal bankruptcy receivership are, in nry judgment, equally applicable to a receivership under our Corporation act.

An amendment to the bill asserts that the receiver, after his appointment, finished the work under the contracts of the insolvent contractor corporation and used material which had been theretofore supplied by complainant to the contractor. It is clear that this cannot have any effect upon the claim of lien filed bjr complainant for materials supplied to the contractor. The assets of the insolvent corporatibn, including its rights under .the municipal contracts, passed to the receiver; it was his privilege to finish the work and enhance the assets. Any controversy between complainant and tire receiver touching the ownership of materials used by the receiver can find no place in this suit.

Complainant has also attacked the rights of the Broad Street National Bank which are asserted by that bank under an assignment from the contractor of moneys due or to grow due under these contracts. As complainant’s bill is wholly based on a claim of lien the rights of that bank cannot be properly adjudicated in this suit. Under the statute it is the duty of the receiver to pass upon the claim of the bank and his determination is subject to review.

I will advise an order dismissing the bill.


author: Leaking, V. C.

text:
    Howard S. Sadler v. George Banaff et al.
    [Submitted December 18th, 1915.
    Determined December 18th, 1915.]
    1. Where a chattel mortgage was made in good faith for cash actually loaned, a second mortgage as a substitute for the first, necessitated by reason of the mortgagor’s removal to another county, is valid.
    2. Where a chattel mortgage was executed as a substitute for the original mortgage, made necessary because of the mortgagor’s removal to another county, the affidavit of the mortgagee, stating that the consideration was $800 in cash, loaned by the mortgagee to the mortgagor, and averring the same date and maturity as that in the affidavit of the ■original mortgage, but differently stating the interest, is sufficient; for, the statute not requiring more than that the consideration be stated, the affidavit need not state the renewal.
    On final hearing. On bill to set aside chattel mortgage..

      Messrs. OU .& Carr, for the complainant.

      Messrs. Marker & Bose, for the defendants.
   Leaking, V. C.

Complainant is a judgment creditor of defendant George Banaff, and has levied an execution on certain farming implements and farm stock owned by the judgment debtor. By this suit complainant seeks to set aside a certain chattel mortgage which, if valid, is a prior lien to the lien of complainant’s ■execution.

The chattel mortgage is challenged by complainant as fraudulent, and is also challenged under the claim that the affidavit of consideration, annexed to the mortgage, is insufficient.

I am satisfied that the mortgage was executed in good faith to secure the indebtedness which it purports to secure, and also that the affidavit is sufficient to answer the requirements of our statute.

I find the following facts:

Defendant George Banaif, a farmer, borrowed money from defendant Fred Wuensch, at various times, beginning May 10th, 1912, and ending July 13th, 1914. During that period seven cash loans were made on dates and in amounts clearly established by the evidence, the aggregate amount of these loans being $825. No part of the principal of these loans has been paid. September 30th, 1914, a chattel mortgage was made by defendant George Banaif and his wife to defendant Wuensch to secure the payment of $800 of the money so borrowed. The mortgage was promptly recorded in Camden county, in which county the mortgaged chattels were at that time. The consideration of the mortgage was stated in the affidavit of the mortgagee, annexed to the mortgage, as follows:

“Eight hundred dollars in cash loaned by the mortgagee to the mortgagors, and that there is due on said mortgage the sum of eight hundred dollars, besides lawful interest thereon from the 30th day of September, 1914.”

January 25th, 1915, the mortgagor moved to a farm in Gloucester county and took the mortgaged chattels to that farm. February 10th, 1915, a new chattel mortgage covering the same chattels was executed by the same mortgagors to the same mortgagee, and the old mortgage was thereupon surrendered and canceled of record and the new mortgage recorded in Gloucester county. The new mortgage is for the same amount and is on the same chattels, and is made to mature on the date the old mortgage would have matured had it not been canceled. The affidavit of consideration annexed to the new mortgage is in exactly the same .language as the old one, except as to the date from which interest is due.

As I find as a fact that these mortgages were made in good faith and were for cash actually loaned by the mortgagee to the husband mortgagor, and that the new mortgage was intended by the parties to be a substitute for the old one, and was made necessary by reason of the removal of the chattels to another county, and that no part of the mortgage debt has been paid, complainant’s bill must be dismissed unless the affidavit annexed to the mortgage fails to meet the statutory requirements.

It is contended that the affidavit annexed to the new mortgage should have set forth the fact that it was executed as a substitute for the old one, and also that the affidavits to both mortgages should have specified the dates and amounts of the several loans which constituted the aggregate indebtedness.

"While a statement in the affidavit, to the effect that the new mortgage was executed in the place of the old one, would have disclosed an appropriate detail of the transaction, I am unable to regard its omission as fatal. The statute does not require more than that the consideration shall be stated. The real consideration of the new mortgage was the indebtedness which afforded the consideration of the old one. It clearly would not have been sufficient to have merely stated in the affidavit that the consideration was the cancellation of the pre-existing mortgage on which a given amount was due. The new mortgage was in fact given to secure the indebtedness which the old mortgage had secured and no new consideration entered into the transaction when viewed as a mere substitution of securities necessitated by the removal of the chattels to another county. In this view the only criticism which can be made of the affidavit is the circumstance that it fails to state the dates and amounts of the several loans which made up the total amount of money which the mortgagee had loaned to the mortgagor. I am convinced that that cannot be regarded as a statutory requirement consistently with the principles defined in Howell v. Stone, 75 N. J. Eq. 289. There the consideration was stated as sundry goods which had been supplied by the mortgagee to the mortgagor; neither the kinds of goods, the dates when supplied, nor the amounts of the several items which went to make up the aggregate amount of the indebtedness were stated in the affidavit. The test of sufficiency there applied appears to have been whether the affidavit stated the consideration with substantial truth; the failure to state in detail the several lots of goods supplied, and the times when supplied and the price of the several lots, was not there treated as fatal to the affidavit.

I will advise a decree dismissing the bill.


author: Beaming, V. C.

text:
    Lizzie B. Dyott v. George Henderson, executor, &c., et al.
    [Submitted December 6th, 1915.
    Determined January 7th, 1916.]
    1. Where a husband has procured a decree of divorce against his wife by fraudulently concealing from her the pendency of the suit, and thereafter died, relief against the operation of the decree should be sought by the wife by means of an original bill for relief rather than by a petition in the divorce suit.
    2. After the decease of a spouse, the validity of the divorce decree should be tested in suits, or in aid of suits, actually pending which directly involve specific property rights affected by the divorce decree, but where, as here, the bill sets forth that complainant claims and desires to' recover her dower in the real estate of her deceased husband and is barred from recovery by the fraudulent decree of divorce, and makes defendants to her suit all persons in interest, and they have all answered on the merits without objection to the-sufficiency of the bill, the relief prayed for should not be denied, on the mere ground that no action or suit for dower, or other proceeding for the recovery of specific property, in which the divorce decree could be interposed as a bar, is in fact pending, or may never be brought.
    3. Girernavd v. Giremail d, 81 N. J. Bq. 66, distinguished.
    On final hearing on bill to set aside a decree of divorce as fraudulently procured.

      Mr. Lewis Starr, for the complainant.

      Messrs. Bergen & Rickman, for the defendants.
   Beaming, V. C.

This suit has been brought by complainant to set aside a decree of divorce from the bonds of matrimony, which decree was entered in this court August 4th, 1913, against complainant herein, on the petition of her husband on the ground of adultery. The petitioner in the divorce suit has since died. The present bill asserts that lie died seized of certain real estate in New Jersey and elsewhere, in which real estate complainant is entitled to an interest but for the decree of divorce, and that the relief sought in this suit is to enable complainant to demand and receive her rights as a widow in the estate of her deceased husband. All persons interested in the estate are made defendants. The ground upon which relief is now sought is fraud in the procurement of the divorce decree.

At final hearing in this suit the files in the divorce suit were produced, and by those files it appears that jurisdiction over the defendant as an absent defendant was entertained by this court by reason of affidavits which, if true, fully established that the residence of the defendant could not be ascertained; an order was accordingly made dispensing with service of process or notice, other than by publication, and the cause was then heard ex parte. Defendant in the divorce suit—complainant herein— first learned of .the divorce suit shortly before the present bill was filed by her.

The petition upon which the decree of divorce was entered charges adultery with one Peyser on August 13th, 1888, and at divers other times after that date until June 26th, 1891, and the decree entered is based upon proofs of acts' of adultery during that period and upon the testimony of the petitioner that he had not lived with his wife since the latter date. The affidavit on which exoneration from service of process or notice on the defendant was primarily based was an affidavit of the petitioner made September 11th, 1911, in which he stated that the last post-office address or residence of the defendant which was known to him was in the neighborhood of West- One hundred and fourth street, New York City, where he and defendant lived together prior to twenty years ago (that is, prior to September, 1891), and that he had exhausted every means to ascertain some subsequent post-office address or residence of the defendant and had not been able to ascertain tire same. In that affidavit the petitioner also stated that the only relatives of the defendant of whom he had ever known were the father, mother and brother of the defendant, and that he believed them to be dead.

At the final hearing of the present suit, it was conclusively established that the affidavit above'referred to was false in its material statements. About one hundred letters, written by the petitioner in the divorce suit, now deceased, to complainant, herein have been received in evidence. These letters cover a period extending from January, 1891, to June, 1905. They disclose that subsequent to September, 1891 (that being tire date on which the adultery was established, the date on which petitioner testified he last lived with his wife, and the date named in his affidavit as her last-known address, on which affidavit he procured the order dispensing with service of process or notice in the divorce suit), and tire year 1905, petitioner had been constantly aware of Iris wife’s address, for during each of the j^ears during all of that period he had written many letters to her at her various residences and had been in regular correspondence with her. The letters also disclose that during much of that period they lived apart, but at times lived together. As late as September 17th, 1903, twelve years after he says he last knew her address, a letter from him to her, postmarked Seabright, New Jersey, and addressed to her at 175 West Seventy-eighth street, New York City, says: “Send bundle of clothes in closet to laundry so I can get clean underclothes when am back home.” The last letter produced, written by him to her, is under date of June 5th, 1905, and is addressed to her at 356 Columbus avenue, Boston, Massachusetts. There was also produced, on notice, several letters from her to him, which contained her address, written in 1894 and one written in 1905; these letters were found after his death in his safe deposit box. It thus appears from the correspondence alone, without consulting other evidence, that from 1891 to Í905, the petitioner in the divorce suit had been almost, if not quite, constantly acquainted with his wife’s address, and during part of that period, and as late as 1903, had resided with her, and at the time he made the affidavit that he had not known her address since 1891, he had in his possession letters from her containing her address written during that period, the latest of which letters was in 1905. These letters alone disclose that the petitioner’s affidavit in the divorce suit, by means of which, he procured from this court the right to a hearing without actual notice of the suit being brought to the knowledge of his wife, was not only false, but must have been intentionally false, for it is obviously impossible that he could have honestly testified that he had not known his wife’s address since 1891 and had not lived with her since that date when he had regularly corresponded with her during a period of fourteen years after 1891, and had lived with her as late as 1903, and had in his safe deposit box at his death letters from her containing her address, the latest of which was written as late as 1905. Other evidence has also been introduced which discloses the falsity of the affidavit here in question. The affidavit sets forth the names of the relatives of the wife, all of whom, according to tire affidavit, were dead, and does not include in the list of relatives the son of the wife by a foimer husband. The well-known purpose of such statements in affidavits of that nature is to disclose that inquiry has been made to ascertain the wife’s address in every place where the information could be reasonably sought. This son has now testified, not only that he stayed with his mother and his stepfather, in 1903, when they were residing together at 175 West Seventy-eighth street, New York City, but that in 1909 he saw his stepfather and told him that his mother was then in Boston. It cannot, be reasonably suggested that the divorce petitioner had forgotten the existence of this stepson, for the letters produced disclose that this stepson was a source of much dissension between the parties. There is also testimony of letters from complainant herein to her husband, which contained an envelope endorsement, of the address of complainant, having been mailed by the witnesses to the divorce petitioner, at the request of complainant, as late as 1910 and 1911, but I have given little or no weight to that testimony.

Complainant herein was also permitted to testify that she had written letters to her husband regularly up to the time of his death and that her address was endorsed on all the envelopes. This testimony was received over the objection of defendants, based on the provisions of our Evidence act; but under the rule defined in Cowdrey v. Cowdrey, 71 N. J. Eq. 353; affirmed, in 72 N. J. Eq. 951, the testimony was deemed competent. As it may be regarded as doubtful whether complainant should have been permitted in this suit to testify touching transactions with her deceased husband, I have determined to wholly disregard her testimony in all such matters, but to allow it to stand for the consideration of the court of review if it shall there be deemed competent.

From the testimony above reviewed, exclusive of that of complainant touching transactions with the deceased, I deem it clearly established in this suit, not only that the affidavit on which this court permitted the petitioner in the divorce suit to proceed to hearing ex parte without service of process or notice of the suit on the defendant therein was false, but necessarily was intentionally false and falsified to conceal the pendency of the divorce suit from the defendant therein, and was effective for that purpose. The mere existence of a substantial doubt Avhether the divorce decree was procured through fraud in the manner stated should lead this court to deny relief in a suit of this nature; but the evidence already referred to leaves no reasonable doubt. The petitioner obviously testified to what he knew to be false and made no honest effort to ascertain the address of his wife. It is reasonably certain that his wife’s address could have been ascertained had he disclosed the truth to his solicitors It is also certain that if petitioner had testified before the master that he had resided with his wife as late as 1903, instead of testifying that he last resided with her in 1891, -no decree of divorce could have been entered for an act of adultery which had been brought to his knowledge in 1891. That testimony would not only have demanded further inquiry for the address of the wife, but would have presented an issue of con-donation which would have barred a decree until the apparent condonation should have been overcome by evidence. Petitioner deceived the court and deceived his own solicitors. In such circumstances it follows that the decree of divorce was procured by fraud—by fraud imposed upon the court and the defendant.

At final hearing of this suit counsel of defendant made the following objection to procedure:

“I wish also to make an objection to this manner of attacking a decree of the court of chancery. It seems to be a collateral attack upon the decree of the court of chancery rather than a direct attack. It seems to mei the proceeding should have been to apply in the suit itself, the divorce suit, Dyott v. Dyott, to open the decree rather than to attack it in an independent suit.”

The sufficiency of the bill had not been attacked in any manner prior to that time.

It seems clear that the relief sought by complainant could not have been had in the original divorce suit. The marriage status, which was the sole subject of litigation in the divorce suit, has been dissolved by death; there is no longer a marriage status to be dissolved by a decree of divorce; to open the decree is to abate the suit; there can accordingly be no rehearing of a divorce suit after the death of one of the parties. I am fully convinced that any relief to which complainant may be entitled is appropriately sought by an original bill for relief against the operation of the decree of divorce. Story Eq. PI. § 426. There are, however, forceful objections against entertaining a bill in which the sole object of the suit and the only relief to be granted is the setting aside of a fraudulent decree of divorce after the decease of the spouse who fraudulently procured the divorce decree. In Givernaud v. Givernaud, 81 N. J. Eq. 66, these objections are pointed out by Vice-Chancellor Stevenson. In Wright v. Wright, 8 N. J. Eq. 143, the bill was filed for dower, and in aid of the suit for dower sought to set aside a decree of divorce for fraud, which decree would have barred the dower if not set aside. In the present case, the bill asserts that complainant desires to recover her dower and is barred by the fraudulent divorce decree; but as no action or suit for dower is pending, the present bill cannot be said to be strictly a suit in aid of a pending litigation for dower or other rights as a widow. I incline to the view expressed in Givernaud v. Givernaud, that after the decease of a spouse the validity of a divorce decree should be tested in suits or in aid of suits actually pending which directly involve specific property rights which are affected by the divorce decree; but where, as in the present case, the bill sets forth that complainant claims and desires to recover her dower in the real estate of her deceased husband and is barred from recovery by the fraudulent decree of divorce, and makes defendants to her suit all persons in interest, and which persons have all answered on the merits without objection to the sufficiency of the bill, I am unable to reach the conclusion that tire relief prayed should be denied on the mere ground that no action or suit for dower or other proceeding for the recovery of specific property in which the divorce decree 'could be interposed as a bar is in fact pending or may never be brought. The following eases, and the cases therein collected, will disclose that this conclusion is in harmony with views entertained in other jurisdictions: Bomsta v. Johnson (Minn.), 36 N. W. Rep. 341; Groh v. Groh, 71 N. 7. Supp. 985; Fidelity Insurance Co. Appeal, 93 Pa. St. 242. Through fraud this court has been induced to enter a decree which is operative on its face to deny to complainant the status of a widow and her property rights as a widow in the estate of her deceased husband. There are now before this court in this suit all parties interested in that estate and all have answered and have been heard on the issues presented by the pleadings. It is not suggested that there are any persons in interest who have not been made defendants herein; if any persons in interest have not been made parties to this suit, it should be unnecessary to here suggest that they will not be bound by any decree which may be entered. These circumstances would seem to demand that a possible error in procedure, which has not been raised by the pleadings or specifically interposed at any time, should not be operative to deny to this court the right to determine by its decree to be entered herein that its former decree was procured through fraud and is void so far as it affects tire property rights of the parties defendant to this suit, and to deny to these defendants the right to assert the fraudulent decree as the foundation of rights which may be claimed by them. I will advise a decree to that effect.


author: Leaming, V. C.

text:
    Jesse J. Lever v. Mary Esther Lever.
    [Submitted April 8th, 1915.
    Determined April 10th, 1915.]
    1. Evidence in a divorce suit for adultery Held to establish the guilt of the defendant.
    2. The burden of proof to establish condonation is with the defendant.

      Mr. Henry IF. Lewis, for the petitioner.

      Messrs. Babcock & Champion, for the defendant.
   Leaming, V. C.

It is impossible to doubt the guilt of defendant. It is almost inconceivable that defendant’s daughter and her son-in-law and also her old friend have deliberately testified falsely about her; their natural impulses would have been to shield her. No person has witnessed an act of adultery between defendant and corespondent—such conduct is seldom witnessed—but the evidence fully establishes both inclination and opportunity. Defendant and corespondent are undoubtedly bound together by the closest ties of affection and have repeatedly sought and procured secret meetings in secluded places and under circumstances which exclude any possible inference of innocence in either purpose or conduct. The testimony of the physician touching physical incapacity on the part of corespondent rests largely upon the statements of corespondent to the physician. His conduct has been radically inconsistent with his claim.

The burden of proof to establish condonation is with defendant, and I am unable to conclude that she has sustained that burden. Greims v. Greims, 80 N. J. Eq. 233. A husband is necessarily slow to reach a conviction of infidelity on the part of his wife; he should and does fight that conviction to the last trench; he may well doubt her guilt when all others possessed of like information have ceased to doubt. It does not appear that the information imparted to him by his daughter about Christmas, 1914, was as full and convincing in detail as that disclosed at the trial; the information imparted by the son-in-law at about that time was only partial; the information imparted by Green 'did not include the important and damaging truck house incident. I am convinced that it was Green’s aim and sincere purpose to shield and save defendant; no one could hear his testimony and escape that conviction. Nor is it at all certain that sexual intercourse occurred thereafter; petitioner testifies that it did not.

I am compelled to advise a decree of divorce.


author: Leamíng, Y. C.

text:
    John H. Warren et al. v. James A. Warren et al.
    [Submitted February 3d, 1915.
    Determined March 18th, 1915.]
    1. Where land was conveyed in trust for the benefit of several beneficiaries, it being provided in the trust deed that upon the joint request of the beneficiaries the trustee should convey in fee-simple to the grantor, his heir or heirs, the death of all persons authorized by the deed to execute the joint request rendered the trust a simple trust, subject to the operation of the statute of uses.
    2. A deed to a person, without words of inheritance, in trust that the grantee, “his heirs and assigns,” should permit named persons and their survivors to enjoy the rents and profits, and should convey the property in fee-simple .to the grantor, his heir or heirs, upon request of all beneficiaries, did not create a fee in the trustee, in view of the position of the words of inheritance and the intention of the grantor as expressed in the entire instrument, while the conveyance by the trustee upon joint request, if required, would necessarify arise during the continuance of an estate pur miter vie, not requiring the existence of a fee to support it.

      On bill for appointment of a trustee under deed of conveyance from Richard Warren to Frederick Knighton to use of the widow and children of Richard Warren. On demurrer to bill. See Warren v. Warren, 7-5 N. J. Eq. Jfl5.

      Mr. Edwin G. Long and Messrs. Collins & Corbin, for the demurrants.

      Messrs. Wescoit & Weaver, contra.

   Leamíng, Y. C.

I am convinced that the averments of the bill disclose that this court is without jurisdiction to either execute the trust or appoint a trustee for that purpose.

Should it be assumed, as contended by complainant, that the words of inheritance as used in the deed in question were adequate to convey tire fee and .that the drity of the trustee to convey upon the joint request specified in the deed rendered the trust which but for tire existence of that duty would have been a simple trust, a special trust and thereby removed it from the operation of the statute of uses, it yet seems clear that upon death of all persons who were by the terms of the deed authorized to execute the “joint request,” tire trust became a simple trust and equally subject to the operation of tire statute of uses. Lew. Trusts 686. In whom the fee then vested would be a question to be determined by the courts of law.

I entertain the view, however, that the words of inheritance used in the trust deed cannot be properly construed as creative of a fee in the trustee. The words of inheritance occur only in that part of the instrument which directs the trustee to permit the life beneficiaries to possess and enjoy until'the decease of the survivor, and when considered in connection with the entire instrument suggest no intention to create an estate of greater duration either in the trustee or tire beneficiaries. It is urged that the performance of the duty of the trustee to convey to the donor upon the joint request referred to in the deed contemplates a conveyance of the fee; but; the conveyance, if required, would necessarily arise during the continuance of an estate pur auter vie and would require the existence of no greater estate to support it. I am satisfied that at the decease of the surviving life beneficiary the trust estate terminated.

I will advise a decree allowing the demurrer.


author: Howell, V. C.

text:
    In the matter of Charles A. Trimble, a solicitor of the court of chancery.
    [Submitted October 28th, 1915.
    Decided November 10th, 1915.]
    Where a solicitor was retained March 8th, 1914, by a'wife to secure a divorce, being paid a retaining fee of $25, the receipt of which he acknowledged in a letter promising to give the matter his immediate attention, and on July 25th, the wife, keeping an appointment in the solicitor’s office, signed and swore to the petition for divorce and affidavit thereto, failing to hear from the solicitor thereafter until September 29th, when he wrote her saying that he would advertise in her matter October 6th or 7th, no proceedings in the suit being taken by the solicitor until March 27th, 1915, whether by filing the petition or discovering the husband’s address for service, the solicitor’s only excuse for the delay being that he was sick from some time in November until the end of the year, such attorney was guilty of fraud upon the client, and would be suspended from practice for one year; for, though mere delay in prosecuting a client’s cause, unless so long continued as to be evidence of fraudulent conduct, does not afford basis to discipline a solicitor, nevertheless, when he receives a fee, especially when it is all he asks, on a promise to speedily prosecute, and does nothing whatever to that end, but, on the contrary, when asked by his client for information as to the status of the cause, falsely informs her it is pending, he is guilty of fraud upon the client and subject to discipline.
    On order to show cause why respondent should not be disbarred or otherwise disciplined and punished.
    This is a proceeding instituted on the complaint of one Gertrude Hawkins, the object of which is to strike from the roll the name of Charles A. Trimble, now a solicitor of this court. On the filing of her affidavit an order was made reciting the charges and requiring Trimble to appear before the chancellor at the chancery chambers, in Newark, on Tuesday, September 28th, 1915, at ten-thirty o’clock in the forenoon, to show cause why he should not be adjudged guilty of malpractice as a solicitor of this court in the matter referred to in said order, and thereupon be debarred from further practicing as a solicitor or counselor of this court, or be suspended from practicing as such for such period of time as the chancellor might order, or be otherwise disciplined and punished for his misconduct, as may be deemed equitable and just.
    ibf?\ Nelson B. Gaskill, for the prosecution.

      Mr. Foster M. Voorhees, for the respondent.
   Howell, V. C.

It appeared at the hearing that on March 8th, 1914, Mrs. Hawkins retained Trimble as her solicitor to institute proceedings for a divorce against her husband, and paid him a retaining fee of $25. On March 11th, 1914, Trimble acknowledged receipt of the $25 on account of his services by a letter written to Mrs. Hawkins on that date. He says in the letter, “I will give this matter my immediate attention, and you will probably hear from me within the next week or ten days.” He adds: “Should you, in the meantime, ascertain your husband’s whereabouts, I would be pleased to receive such information from you.” On April 30th, 1914, Trimble writes to her that he has been unable to ascertain the husband’s whereabouts, and advises her to write to his father, and says that if the father should fail to give the information, it would be necessary to adopt the course of serving the defendant by publication, and he adds: “I want to get the suit actually started within the next couple of weeks.” On June 12th, 1914, he writes her that he thinks that they have made every reasonable effort to locate her husband, and that he can see no reason why they are not in a position to go forward with the suit; and on July 21st, 1914, he writes her to call at his office on Saturday of the “present week,” that the petition for divorce will then be ready for her signature. She went to Trimble’s office on July 25th and there signed and swore to a document which must have been the petition for divorce and the affidavit thereto. It is important to remember this date and this transaction, because much in the case depends upon it. Mrs. Hawkins did not hear again from Trimble .until September 29th. On that day he writes her that he will be prepared to advertise in her matter about October 6th or 1th, and that he would send her a copy of the advertisement as soon as it was inserted. Again he speaks of ascertaining Mr. Hawkins’ whereabouts, and says that' if she should ascertain in the meantime where he lived she should let him know promptly. In the meantime she wrote to him several times, in October and November, but was unable to get any reply until November 16th, 1914, when he writes her that her “letter of recent date,” and her letter of October 24th, liad-been neglected by reason of his illness, that he was still confined to his bed, but was hopeful of getting out in a week or ten days, at which time her matter would receive his first attention; he regrets that she has become impatient and assures her that he will push the matter along as rapidly as possible. Not having heard from him, Mrs. Hawkins, early in December of 1914, wrote him another letter, which was replied to by his secretary under date of December 9th, 1914; she says that she has been unable to call Mrs. Hawkins’ matter to Mr. Trimble’s attention, for the reason that he has been ill. Nothing further was heard about the case until January 22d, 1915, when Trimble writes that he was in no position to take exception to her criticism, as her matter “had been somewhat neglected.” -He says that he was confined to his bed and unable to give any attention to-business from November 1th, 1914, until the first of the year, that the delay was not entirely a.faulty one. In reply to this Mrs. Hawkins writes him under date of January 26th apologizing for criticising him so severely, but that she looked forward to hearing from him in a week or ten days. On March 12th, 1915, he again writes her as follows:

“Replying to your courteous letter of recent date, I beg to advise you that I am now rapidly catching up with business, and I will be able to give your matter most serious attention next week. You may expect to hear from me within one week from this date.”

Ancl on March'27th he writes again:

“I am just dictating affidavits in your matter, which will be ready within two or three days. You will probably hear from me by Wednesday or Thursday of next week.”

During all this period, from July 21st, 1914, when Mrs. Hawkins signed the petition and affidavit for divorce, down to the date of the last letter quoted from, no proceedings whatever had been taken by Trimble in the direction of procuring a divorce. The petition had not been filed, nor does it appear that Mr. Hawkins’ address had been discovered. On April 2d, 1914, the petition was mailed to the clerk. The affidavit annexed to it was faulty in some particular, and on April 5th, 1914, the papers were returned to Trimble by the clerk, so that all the statements made by Trimble with reference to the divorce proceeding during this period were false. On April 29th, Mrs. Hawkins called at Trimble’s office by appointment to swear to other affidavits to be used in her case. Although the day and the hour for the appointment were fixed, when she arrived at his office he had gone and left no word for her, and, in fact, she never knew until afterwards that no steps had been taken in the divorce proceeding. She made another appointment to meet him on July 17th, which he did not keep, and on July 21st she dismissed him and demanded her papers. He gave her all but two or three, and these were turned over to Mr. Gaskill after this proceeding had been taken.

These bald facts, derived almost wholly from the letters written by Trimble, exhibit a degree of neglect and carelessness for which the respondent offers no excuse whatever except that he was sick from some time in November until the end of the year, and that he was away from his office during the month of August. The facts bring the case within one phase of In re Rosenkrans, 84 N. J. Eq. 232. There the present chancellor says: ■“Mere delay in prosecuting a client’s cause, unless, perhaps, it is so long continued as to be evidence of fraudulent conduct, does not afford the basis for disciplining a solicitor. Mere delay, without more, if brought to the attention of the court would, of course, result in a reprimand and an admonition to the solicitor to proceed; but, when a solicitor receives a fee, especially when it is all he asks, upon a promise to speedily prosecute, and then does nothing whatever to that end—does not even start—but, on the contrary, when asked by his client for information as to the status of the cause, he falsely informs her that it is pending, and is being prosecuted with all convenient speed, in whatever words the idea is conveyed, he is guilty of fraud upon his client.”

And this is the case in which I find Trimble. There is no pretence that he could have been mistaken. The falsehood communicated to his client, to the effect that the suit was pending, was deliberate, intentional and was calculated and intended for one purpose only, namely, to deceive her; and just why he should have entered upon this course he has, in my opinion, totally failed to explain. Not only should severe censure be passed upon him and his conduct, but he should be disciplined likewise, in order that his vicious example may not be followed by other solicitors who may have inclination to do so. The office of solicitor in this court is one of the highest degree of trust and confidence, and it may well be asked if a person cannot trust his solicitor, what relation between men can be appealed to? The order admitting a solicitor to practice law has been said to be a very badge of responsibility and honor. To a degree Trimble has forfeited this respect by an abuse of his privilege, and my recommendation is that he be suspended from practice in the court of chancery for the period of one year from the date of the order.