author: Churci-i, Y. C.

text:
    In the matter of the appointment of a new trustee in the estate of Bernard M. Shanley.
    [Decided December 27th, 1924.]
    1. The appointment of a new trustee is discretionary with the court.
    2. The fact that a trust company is interested in securities of the same character as the securities of the estate concerned, is no objection to its appointment as trustee of the estate, as its duty is to deal with the trust estate as carefully as its own estate, and it is not conceivable that a trust company owning securities of the same nature as those in the trust to be administered would do anything except conserve these securities with the utmost care.
    On petition, &c.

      Mr. John B. Hardin and Mr. Joseph Zahrs, for Regina R. Shanley, individually, and as co-trustee of the estate of her husband, Bernard M. Shanley, Jr., as well as for the members of her family; Julia D. Shanley, widow of Bernard M. Shanley, Sr.; Joseph Seton Shanley, one of the grandchildren.

      Mr. Reid L. Carr s(of the New York bar) and F. G. Taylor (of the Connecticut bar). for the J. R. Shanley Estate Company and Guarantee Trust Company of New York, as trustee of the collateral trust five per cent, bonds of said company.

      Mr. Merriit Lane, for the Empire Trust Company as trustee. ■ s

      Mr. George R. Beach and Mr. J. Henry Harrison, for the estate of William C. Shanley, the executors and trustees of that estate.
   Churci-i, Y. C.

This is an application for the appointment of a trustee in the matter of the estate of Bernard M. Shanley, Sr.

Mr. Shanley died a resident of Newark in 1900 and left a will which was probated in Essex county. The will left his brother as executor, and by codicil provided that, on the death of his brother, his three sons, J. Roosevelt Shanley, Bernard M. Shanley, Jr., and William C. Shanley, were to act as joint exeeutors and trustees. His brother and his sons are dead.

The corpus of this estate consists of approximately seven millions of dollars, consisting almost entirely of stocks and bonds of the New Jersey Public Utilities Corporation. There are four interests involved in the income of this estate. The widow of the testator, who is now sixty-seven years of age, is entitled to one-fourth of the income for her life. The estates of the three sons are each entitled to one-fourth of the income. As to the corpus, upon the death of the widow, the estates of the three sons are each entitled to one-third of the corpus, after the legacy of $350,000 has been paid to a grandson of the testator.

J. Roosevelt Shanley in his lifetime got into financial difficulties, aaid the J. R. Shanley Estate Company was formed under the laws of Connecticut for the protection of the creditors of J. Roosevelt Shanley. William C. Shanley guaranteed the obligations of his brother and placed in trust with the Empire Trust Company of New York all the income received from his father’s estate, and assigned the principal to the Empire Trust Company, as well, reserving an annual income to be paid to his wife during her lifetime.

Representatives of the various, interests are all in court and have made suggestions as to the appointment of a trustee. There is some divergence of opinion as to what actual interests are represented by the contending parties, but I think it is unnecessary for me to go into this question, as, in the last analysis, the appointment of a trustee is discretionary with the court. On the one hand, it is suggested that a trust company should be appointed which has nothing to do with the public service securities above mentioned. On the other hand, it is suggested that a trust company familiar with these securities should be appointed.

1 am not impressed with the argument of counsel that it would be improper to appoint a trust company closely allied with the public service corporation, stock of which is owned by this estate. In fact, I think that the appointment of a trust company interested in this class of securities would be a great benefit to> the estate.

The theory of the law, as I understand it, is that a trustee should deal with his trust estate as carefully as he would with his own estate, and I cannot conceive that a trust company, owning securities of the same nature as those in the trust administered, would do anything except to conserve these securities with the utmost care.

I have therefore determined to' appoint the Fidelity Union Trust Company as trustee of this estate.

There was some suggestion that a New York trust company should be appointed, but I am unwilling to do this, as I stated at the oral argument.

I think that the trust company I have mentioned is more capable of handling this estate and the securities of which it consists than any other of which. I can think.

Another question has been presented to me by counsel— that is, that I appoint a co-trustee who shall be a member of the Shanley family. I have carefully read over the briefs of counsel in this matter and I cannot see the necessity of any additional appointment. I believe the trust company I have appointed is thoroughly capable without any assistance of managing this estate in a correct and proper manner.

I will advise a decree accordingly..


source: Caselaw Access Project

author: Church, V. C.

license: Public Domain

text:
    Irmgard Berger et al., complainants, v. D. Frederick Burnett et al., defendants.
    [Decided December 31st, 1924.]
    Where at the death of a testator the property is not in the state in which it is directed to be, the tenant for life is, -before the conversion, entitled to a reasonable fruit of the property from the death of the testator to the time of conversion, whether made in the course of the year, or subsequently, but where there is no imperative direction to sell, and if the property is not in a state other than that in which it was contemplated to be at the time of the testator’s death, the life tenant is not entitled to any share of the proceeds of the sale as income.
    On bill, &C.

      Messrs. Lum, Tamblyn & Golyer, for the complainants.

      Messrs. Burnett, Sorg, Murray & Duncan, for the defendant executor and trustees.

      Messrs. Pitney, Hardin & Slcinner, for the defendant the Protestant Foster Home Society of the city of Newark.
   Church, V. C.

In this case the complainants, who are life tenants, seek a part of the $200,000 proceeds of sale of two hundred shares of common stock of Irvington Varnish and Insulator Company as income.

These shares were part of the estate of Carl Berg-er, who died in 1920. In his will Berger directed payment of his debts and specific devises and bequests, and then said that all the rest-, residue and remainder of his estate, “including my stock, both common and preferred, in said Irvington Varnish, and Insulator Company,” be given to his executors and trustees in trust. He divided the corpus into two equal funds for his two children, with directions “to invest, reinvest and keep invested each of said funds in good and safe securities, retaining, so long as may be deemed advisable, the stock, both common and preferred, above named, hereby fully protecting said trustee and each of them against any and all personal liability whatsoever, by virtue of such retention,” then to pay the net income from the fund to his children for life. In paragraph seven of Ms will he suggests- “none of my common stock in the Irvington Varnish and Insulator Company shall be sold or disposed of, unless-, in the unanimous judgment of my executors and trustees, the survivors or survivor of them it is essential to the best interests of my estate to sell and dispose of the same.”

.From the time of testator’s death on June 15th, 1930, to the date of the sale on March 10th, 1922, the common stock paid no dividends.

The complainants, children of the testator, insist that they are entitled to part of the $200,000 as income, because they received no dividends on the common stock from the testator’s death to- the date of the sale.

The executors and trustees insist that the entire $200,000 is corpus.

It should be noted that there is no direction by the testator to convert, nor did his will contemplate immediate conversion of the common stock on his death into any other form of investment.

The rule in these cases is laid down in 1 Lew. Trusts 80S, as follows:

“Where at the death of the testator the property is not in the state in which it is directed, to be-, the tenant for life is, before the conversion, entitled to a reasonable fruit of the property from the death of the testator to the time of conversion, whether made in the course of the year or subsequently.”

Complainant has cited several cases. Lawrence v. Littlefield, 215 N. Y. 561.

Edwards v. Edwards, 183 Mass. 581, &c., which, he contends, bear out his insistment that this money should be prorated as to corpus and income.

. These cases, it seems to me, hold that an apportionment shall be made between life tenant and remaindermen when there is an imperative direction to sell, or where the terms of the will worked a conversion as of the time of the testator’s death.

In the case at bar, Mr. Berger did not direct the immediate sale of his stock, but provided, on the contrary, that the executors should retain the common and preferred stock as long as they might deem it advisable.

In Martin v. Kimball, 86 N. J. Eq. 10; affirmed (Court of Errors and Appeals), 86 N. J. Eq. 432, the court held that if there were no imperative direction to sell, and if the property was not in a state other than that in which it was contemplated to be at the time of the testator’s death, the life tenant was not entitled to any share of the proceeds of the sale as income.

See, also, case of Outcalt v. Appleby, 36 N. J. Eq. 73. In this case the residuary estate was left in trust and a delay ensued in selling part of the unproductive property. When the sale was finalfy made, the life tenants claimed a share as income. The court said: “The third proposition is, that the appreciation in- value of the unproductive property held by the trustees in the exercise of their discretion, with a view to getting a satisfactory price therefor, shall be regarded as income and not as part of the corpus of the trust estate. There is nothing in the will to authorize the making of such a decree, and sound principle forbids it. The unproductive property constitutes part of the trust estate to be managed, and the whole estate is to be husbanded for the benefit of all the beneficiaries, the remaindermen as well as the life tenants. The trustees are vested with a discretion as to the time when the conversion of the property, unproductive as well as productive,'into money is to take place, and the life tenants are no more entitled to have the appreciation in value of the one than of the other description of property regarded as income. The appreciation in either case is part of the corpus.

In McCoy v. McCloskey, 94 N. J. Eq. 60, the court holds that where a testator's estate consists of capital stock in an incorporated company, the income whereof is given to one and the stock to another, the appreciation in value is corpus and not income.

I shall therefore find that the entire $200,000 should be treated as corpus, and should not be distributed as income and corpus.


author: Ci-iurch, Y. C.

text:
    Minnie Luebbers, complainant, v. Albert Luebbers, defendant.
    [Decided January 5th, 1925]
    IVhere the title to certain real estate is in a wife, her husband, ordinarily, is not entitled to any reimbursement for expenditures made by him on the property.
    On bill, &C.

      Mr. Joseph J. Palillo, for the complainant.

      Mr. Douglas B. Todd, for the defendant.
   Ci-iurch, Y. C.

In this case I decided at the hearing that the title to the property in question should be in the wife, but that the matter should be referred to a master to ascertain what the husband had expended on the property.

The testimony is before me> and the question I have now to consider is whether or not the husband is entitled to any reimbursement for expenditures made on property belonging to his wife.

Counsel has called my attention to the case of Silover v. Silover, 62 N. J. Eq. 761, in which Chief-Justice Gummere, speaking for the court of errors and appeals, says, in effect, that expenditures by a husband of his own moneys for the improvement of the property of his wife are presumed to be a gift to her, unless there is proof of a contrary intent. See, also, Hood, v. Hood, 83 N. J. Eq. 695.

In Black v. Black, 30 N. J. Eq. 216, Vice-Chancellor Van Fleet discusses this matter, and says that “money received by a husband from his wife, and expended by him, under her direction, on his land, in improving the home of the family, cannot be recovered by the wife.”

The only question, therefore, is: As a matter of fact, was it the intention of the wife that her husband should be reimbursed for his outlays on her property ?

I cannot find airything in the testimony to justify me in soi finding. She consented to. the erection of a sun parlor; as she admits, but this was for the benefit of the family, and it is natural that a wife should consent to such a gift from a husband.

Therefore, I shall find that the husband is. not entitled to reimlmrsement for the moneys he has expended upon property that belonged to his wife.

Counsel for the defendant has sought to convince the court that it was the intention of the parties to hold the land in question as tenants by the entirety.

The testimony, in my opinion, does not bear out this contention. The testimony, briefly, indicates that the complainant and the defendant agreed to purchase a certain piece of property; that each was to advance one-half of the purchase price, and the title was to be placed in their joint names. Shortly before the hour fixed for closing the title, defendant said that he had no money to contribute to the transaction, but would pay his share the next day. She therefore insisted upon taking title in her own name. At the time of the closing, however, the title was taken in both names, on his promise that he would give her back half of the purchase price, which he never did.

I will advise a decree according to the views expressed above.


author: Church, Y. C.

text:
    Marion W. Peckham, Mary Peddle Peckham and Harris D. Rush, executors under the last will of William G. Peckham, deceased, complainants, v. Paul T. Peckham et al., defendants.
    [Decided January 2d, 1925.]
    The words “other furniture and bedding wherever situate” in a will, held to include paintings which testator had placed in his residence, as part of an art collection, most of which he had sold in his lifetime.
    On bills, &c.

      Messrs. Ilyer .<& Armstrong, for the complainants.

      Mr. Paul Q. Oliver, for the defendants.
   Church, Y. C.

This is a bill for the construction of the will of William G. Peckham, of Mountainside, Union county, who died on April 13th, 1924, leaving a last will dated the 11th day of June, 1921, which was duly probated on the 13th day of May, 1924.

The clause in the will under dispute reads as follows

“I confirm prior gifts of the following, namely, to- Marion W. Peckham all my other furniture and bedding wherever situate—the Steinway piano, the orchestrelle, the two automobiles.”

Marion W. Peckham is the widow of the testator, and in the same paragraph is given the right to use testator’s residence for five years after his death.

During his lifetime the testator acquired a collection of paintings and housed them in a separate building near his residence. On March 29th, 1921, the testator sent this collection of paintings to New York, and a large part of them were sold at public auction for a total of approximately $9,700. Some pictures were returned from the sale and were hung in the residence of the testator. The use of the art gallery was thereafter discontinued.

Before the sale of 1921 testator made a will dated July 12th, 1916, which bequeathed his household furniture, and so forth, to his wife, but stated:

"My oil paintings are not included in the bequest of furniture in the will, brrt are to be sold for the benefit of the estate, as soon as a good market can be obtained for the same. Other paintings, sketches and objects of virtue are my wife’s.”

After this will and codicil were made the sale of the paintings took place, and then the testator made the will that 'has been probated.

The court is asked to consider these circumstances and to decide whether the widow takes the pictures still remaining after the sale under the clause above recited.

When the testator made his first will his collection of pictures was intact, and under the first will he expressly exempted them as "furniture.” Thereafter he sold practically all of his collection and made a second will in which no mention is made of excluding the paintings from the general designation of "furniture.” Had he desired the remnant o-f his art gallery to be excluded from the general term "furniture,” he had ample opportunity'' to do so- in his second will.

The question then is: What does the term "furniture and bedding, wherever situate,” include, under the last will ?

J+0 Gyc. 15^3 says: “The term 'household goods,’ which is substantially synonymous -with furniture, includes everything of a permanent nature used in, purchased or otherwise acquired by the testator for his use. The term has been held to include china, plate, bronzes, statuary and pictures.”

In Endicott v. Endicott, 41 N. J. Eq. 93, the court held: "The term 'furniture’ embraces everything about the house that has been usually enjoyed therewith, including plate, linen, china and pictures.”

In the case of Case v. Hasse, 83 N. J. Eq. 170, Vice-Chancellor Griffin decided: “ ‘Furniture and personal belongings’ carry the contents of the apartment as they were at the time of the death of the testatrix,” and he cites numerous decisions.

Some memorandums were offered and received in evidence as to the testator’s intentions before he made his last will. I repeat what I said from the bench, that no evidential value can be given to these memorandums, for the reason that such a ruling would be permitting the testator to make a will without going through the formalities required by law.

I allowed the first will and codicil in evidence because they were duly executed, and, perhaps, under the decisions, might throw some light on tlio last will, but these memorandums, I feel, have no evidential value whatever.

In conclusion, it seems to me, after a careful consideration of the facts in this case, that the testator, under his first will, meant to> separate his art collection from his other “furniture,” but, under his last will, having in interim sold the greater part of his art collection, and having placed what remained in his residence, and having left that residence and that furniture to his wife, he meant to give her all that remained of his art collection.

I will advise a decree accordingly.


author: Church:, Y. C.

text:
    Baruch Fuksman, complainant, v. Jacob Winarski, defendant.
    [Decided January 16th, 1925.]
    Where A conveyed his lands to B, who at the same time executed an agreement in writing providing that he shall not convey the lands without the written consent of A, and further providing that A shall be entitled to receive the balance of the selling price over $16,000 (with some deductions), and if A produced a customer who would pay more than $16,000, B shall be obliged to convey, the deed, coupled with the agreement, constitutes an express, active trust agreement, which the exidence shows has not been terminated by the act of the parties.
    On bill, &c.

      Mr. Frank F. Bradner, for the complainant.

      Messrs. Precker é Preclcer and Mr. Arthur T. Vanderbilt, for the defendant.
   Church:, Y. C.

In this case the complainant was the owner of two apartment-houses on Prince street, Nos. 264 and 266. There was a mortgage on one, Nx 264, for $10,000, held by the City Trust Company. The mortgage was called and the complainant applied to one Adolph Hollander for a loan to take the place of the City Trust Company mortgage. Mr. Hollander agreed to let him have the money and sent him to one Jacob Schneider, a lawyer, to have the necessary papers prepared. At the time appointed for the meeting in Mr. Schneider’s office the defendant, Winarski, appeared and told the complainant that Mr. Hollander would not let him have the money. Arfter sonfe conversation, complainant agreed to convey tire property to Winar'slri.

Complainant admits in his brief that the evidence relating to these negotiations is not introduced for the purpose of attacking the conveyance, but for the purpose of showing the surrounding circumstances and to- aid in the construction of the writing, establishing a trust.

It appears by the testimony that the deed of conveyance was made by the complainant to the defendant and is dated May 3d, 1919. On May 3d, 1919, the same day, the defendant and his wife executed to Hollander a. mortgage for the sum of $11,000 on the very same premises, and the mortgage recites the premises are the same conveyed to Winarski by Euksman and his wife.

I cannot see in this case why Mr. Winarski should have told Mr. Fuksman that Hollander would not loan any money on the property, tiren have taken a deed to the property himself and got the very same loan from Mr. Hollander. Neither Mr. Hollander nor Mr. Schneider were called as witnesses.

At the same time that the deed was.made the defendant executed an agreement in writing. This agreement has been introduced in evidence, and its provisions, in brief, are that Winarski shall not convey the premises commonly known and designated as 264: Prince street without the written consent of Fuksman. It goes on to say further that “Fuksman shall be entitled to receive the balance of the selling price of the said premises, over $16,000, first deducting the expenses which the said Winarski has in procuring new loans and taking title. It is agreed that should the said Baruch Fuksman produce a purchaser who is willing to pay more than $16,000, said Winarski shall be obliged to convey.”

The question then arises as to whether or not this conveyance to Winarski, coupled with the agreement, conveys an absolute fee to Winarski, or whether it is merely a trust agreement.

I am of the opinion that it constitutes an express, active trust agreement.

The defendant was obligated to do several things—first, to sell the property at any time upon the request of the complainant for any sum in excess of $32,000, plus the expenses of new loans and title fees; second, to pay all the proceeds of sale to the complainant in excess of said $32,000 and the said expenses; third, to refrain from selling 264 Prince street for a period of two years without the complainant’s written consent; fourth, to refrain from selling 266 Prince street for a period of two years without the complainant’s consent in writing.

Having decided that a trust has been created, the next question is, Has this trust been terminated by the voluntary act of the complainant?

The defendant contends that the trust was términated as to No. 266 Prince street by a release executed by complainant on November 14th, 1919, and by a quit-claim deed executed by complainant on the same date; and as to No. 264 Prince street, by a release executed by complainant on April loth, 1920, and by a quit-claim deed executed by complainant on 'the same date.

The evidence is that both releases were given to release the lien of a mortgage for $2,756, which defendant had made to complainant to secure the payment of certain debts of the complainant. The proof of payment of the debts is unsatisfactory, but it is not necessary to- decide now whether they were paid. The releases did not affect the trust agreement. Both quit-claim deeds appear to have been given for the purpose of postponing the complainant’s equitable estate to certain mortgages put on the land by the defendant, and not for the purpose of terminating the trust.

The evidence is that the complainant was in an enfeebled condition and penniless at the time these deeds were made-, and that he only received a very small amount of money— about $600 according to defendant’s testimony, and $400 according to complainant’s—and that the property was increasing in value-and is now appraised at some $50,000.

It is clear that advantage was taken of the complainant’s necessities to induce him to sign the deeds, and that he did not understand that he was terminating the trust. After considering the evidence, I am of the opinion that it has not been terminated, and it was not the desire of the complainant to terminate it.

It is unnecessary for me to discuss further the testimony in this case, and I shall therefore decide that the complainant is entitled' to a decree adjudging that the defendant holds the legal title to the land and premises in trust, and I shall direct that a sale shall be made and that the proceeds shall be applied as follows: To pay the complainant’s costs; to pay such amount as may be- found to- be legally due the defendant, if any be due, and to- pay the balance to- the complainant.


text:
    Cozy Lake, Incorporated, complainant, v. Nyoda Girls Camp, Incorporated, defendant
    [Decided March 4th, 1925.]
    All that the law requires of the party by or over whose land a stream passes is that he should use the water in a reasonable manner, and so as not to destroy or render useless, or materially diminish or affect the application of the water by the proprietors above or below the stream.
    On bill, &C.

      Mr. I. Henry Ooyne, for the complainant.

      Messrs. King & Vogt (by Mr. Price), for the defendant.
   Church, Y. C.

This is a bill for injunction. The defendant is the owner of a tract of land in Morris count}', acquired June 1st, 1919, by him from one Grover D. Smith. Prior to the conveyance, Mr. Smith had enlarged a lake- upon the property and erected a concrete dam for the purpose of making a larger lake. On September 30th, 1922, Bessie S. Cresse, wife of Thomas W. Cresse, organizer of the defendant corporation, acquired title to a tract of land below the tract owned by defendant. She 'later transferred title to the complainant.

In 1922 complainant erected a dam upon its property in an attempt to> create a lake there. When defendants dam was erected there was a spillway constructed in it, and in this spillway were batter boards. About a year and a half prior to May 1st, 1924, these batter boards were replaced by a stationary gate. This gate remained until the above-mentioned date, May 1st, 1924, when hatter boards were again placed in the spillway.

Complainant claims that it does not get the natural flow of water from the brook to which it is entitled on account of the batter boards, and insists that the stationary gate be replaced.

The law in regard to cases of this character is elaborately discussed in the case of Mayor, &c., of Peterson v. East Jersey Water Co., 74 N. J. Eq. 49.

Vice-Chancellor Emery, on page 75, quotes with approval the statement in 3 Kent Com. 439, the final passage of which reads as follows:

“All that the law requires of the party by or over whose land a stream passes is that he should use the water in a reasonable manner, and so as not to destroy or render useless, or materially diminish or affect, the application of the water by the proprietors above or below on the stream.”

The question, therefore, it seems to me, is entirely one of fact as to whether the complainant is deprived of the proper and usual flow of this stream. I do not think it is. It purchased its property after defendant’s dam was erected, and there is no testimony to show that any water is diverted from its usual channel, and the loss from evaporation and soakage into the ground is not shown to be material.

I think the complainant receives as much water now that the batter boards are replaced as it did before, and I shall therefore advise a decree dismissing the bill.


author: Ingersoll, V. C.

text:
    Francesco Graziano, complainant, v. Natale Lanuto, defendant.
    [Determined December 13th, 1924.]
    1. The absence of competent and independent advice will invalidate a deed of gift, which contains no power of revocation, where a relation of trust and confidence exists between the donor and the donee, and the burden of pro'of is upon the donee to establish that the donor fully appreciated what he was doing.
    2. Evidence examined and held that the deed in question will be set aside on account of lack of proof of independent advice to the grantor therein.
    On bill for cancellation, &c. On final hearing.

      Mr. Moms V. McDonald, for the complainant.

      Mr. Thomas G. Tuso, for the defendant.
   Ingersoll, V. C.

The complainant is an Italian, now of the age of fifty-nine. He left Italy in 1888, and after a stay in Canada lie came to Philadelphia. In each of these places he worked as a common-laborer. In 1897 he came to New Jersey and bought brush land in the neighborhood of Vineland, about thirty acres of which, he has cleared and has built a small house and some farm buildings, all of a very inferior character.

He was married in Italy, and some time after his arrival his wife joined him. By that marriage there were bom eight children, of whom five are still living. None of the children are living with him. His wife died in 1914, and from that time until 1922 he lived alone on his property. On the lltb day of February, 1922, he was introduced to Bose Caranti by a “matchmaker” in Brooklyn, New York, and immediately married her. In a day or two they came to Yineland, but they remained at a neighbor’s (John Ardito’s) house for about a week. She then went to his home. She secured from him about $800 in money, evidently by threatening to refuse him conjugal relations.

The next night, after she obtained the money (about the 1st of March, 1922), she left his home and returned to Ardito’s house;, and remained eight months. At that time, ascertaining from Ardito that his wife was a-t his (Ardito’s) house, Graziano called to see her. This interview and others following it resulted in the complainant, as he says, agreeing to make a will giving to her son (Lanuto), the defendant, his property, upon the condition that he (Lanuto) support him during his life. Lanuto came from New York, and a visit was made by Graziano, Ms wife and Lanuto to the office of one Frank DeLuca, a member of the bar of this state, who acted “as counsel for all three.” Graziano did not have Ms title deeds with him at that time, and left to get Ms papers and returned several days later, when a deed was drawn and executed by complainant and wife to Lanuto, conveying all his property, but reserving the use to Graziano and Ms wife for the terms of their natural lives. This deed was acknowledged before DeLuca,, and was held by him without record until January 9th, when it was recorded.

On January 18th, Graziano and his wife called at De-Luca’s office and a quit-claim deed was drawn and exerated by Graziano and his wife to Lanuto, in which it was stipulated that “the specific intent of this quit-claim deed is that grantors release and surrender said life use or estate in the last-mentioned deed reserved, and convey all their right, title and interest in said premises to the grantee, to the end that title to the same shall be vested absolutely and in fee-simple in the said Natale Lanuto, without any restrictions or reservations whatsoever.” The acknowledgment of this deed was also taken by DeLuca,. This deed was not recorded at once, but' was held until the 14th day of February, 1923. Graziano insists that at all times he understood he was making a “teslament”—that is, giving the property to Lanuto' after his (Graziano’s) death, upon condition that Lanuto support him during his lifetime.

On the 11th daj of February, 1923, according to the file in a proceeding for divorce filed by Graziano against his wife, she left him, and on June 25th, 1923-, entered into a bigamous marriage with one Frank Berenato<. A decree nisi was entered on June 26th, 1924.

Lanuto stayed a short time at the farm and then returned to New York. Graziano remaining on the premises, where he has since lived.

This case comes within the rule as laid down in Slack v. Rees, 66 N. J. Eq. 447 (at p. 448): “That the absence of such [competent and independent] advice will invalidate a deed of gift, which contains no power of revocation, where a relation of trust and confidence exists between the donor and donee, is not denied, and, indeed, it was so held by the vice-chancellor. EPe seems to have considered, however, that such relationship was not shown, unless it was made to appear that the donee occupied such a dominant position toward the donor as to raise the presumption that the latter was without power to assert his will in opposition to that of the donee. But this is not the situation. The rule has a much broader sweep. Its purpose is not so- much to afford protection to the donor against the consequences of undue influence exercised over him by the donee as it is to afford him protection against the consequences of voluntary action on his part, induced by the existence of tire relationship between them, the effect of which, upon his own interests, he may only partially understand or appreciate.” The following citations from our own decisions make this plain: “In all transactions between parties occupying relations, whether legal, natural or conventional in their origin, in which confidence is naturally inspired, or, in fact, reasonably exists, the burden of proof is thrown upon the person in whom the confidence is reposed, and wlm has acquired an advantage, to show affirmatively not only that no deception was practiced therein, no undue influence used, and that all was fair, open and voluntary, bwt that it was well understood." Hall v. Otterson, 7 Dick. Ch. Rep. 528; S. C., on appeal, 8 Dick. Ch. Rep. 695. “Where parties hold position in which one is more or less dependent upon the other, courts of equity hold that the weaker party must be protected, and they set aside his gifts if he had not proper advice, independently of the other.” Haydock v. Haydock, 7 Stew. Eq. 570. “The rule to be gathered from the English and American cases is that the burden of proof is cast upon the donee to establish that the donor fully appreciated what he was doing, or, at all events, in the doing had the benefit of disinterested and competent advice.” Coffey v. Sullivan, 18 Dick. Ch. Rep. 302.

In Post v. Hagan, 71 N. J. Eq. 234, Mr. Justice Garrison, in delivering the opinion of the court of errors and appeals, said: “Proper independent advice, in this connection, means that the donor had the preliminary benefit of conferring fully and privately upon the subject of his intended gift with a person who was not only competent to inform him correctly as to its legal effect, but who was, furthermore^ so- disassociated from the interests of the donee as to be in a position to advise with the donor impartially and confidentially as to, the consequences to himself of his proposed benefaction.”

Consideration of the testimony can leave no doubt of the domination of this wife over the mind of the husband. Nor can there be any doubt but that that domination was sufficient and actually was the cause of the deed to her son.

• Did Graziano have such competent and independent advice ? It is clear he did not.

Mr. DeLuca, the attorney who drafted the deed, testifies: “I was acting as counsel for Graziano', for his wife, and for Lanuto. They came there at the same timeN

When asked the question, “You represented Prank Graziano?” he answered, “I did, most assuredly.” This was flatly denied by Graziano.

There is no testimony indicating that he (DeLuca,) gave Graziano- an}, advice except in the presence of the wife, Rosa. DeLuca states, however, in answer to the question, “Did not you regard this as a rather improvident thing for him to do, to deed away all his property?” “Well, candidly, yes, sir.” * * * “Yes, and I thought each and every time that he came there I criticised him severely, to» tell the honest truth, and I explained it to» him, that he was» very foolish to do» it,” and further, that he “almost refused to» draw the papers.” lie produced a series of memoranda in reference to» this transaction, the first of which is one made by him as to» what he (Graziano») wanted when he called the» first time, and reads: “Francesco Graziano», Rose Graziano», Ms wife, to Natale Lanuto;, of Brooklyn, one dollar and other consideration of value», reserving, ho»wever, the life interest to grantors.”

His next memorandum was dated December 19th, 1922. “Frank Graziano» and wife called to- have deed drawn.” On this date the deed was drawn, executed and acknowledged. DeLuca said he explained it (the deed) to him thoroughly, “in fact I got Mm to» sign this here statement.”

. “This is to show that on December 19th, 1922, personally came Francesco Graziano and Rosa Denaro Graziano, his wife, of Landis township, Cumberland county, New Jersey, who declare that it is their bona fide intention to convey their farm property, consisting of about fifty acres of land with the buildings thereon, to Natale Lanuto, which property is better described in the four deeds presented to this office by said Graziano and. Rosa, his wife, and a new deed drawn, this d»ay, for four plots of land and. premises in the name of the said Natale Lanuto, and send» for record in the respective counties wherein the said lands are situate.
“The said Francesco Graziano and Rosa, his wife, requested that this property is conveyed to said Lanuto subject to the life use of the said Graziano »and wife; that said property not to vest unto the said Lanuto until the death of said Graziano and Rosa, his wife.
“The said Francesco Graziano and Rosa, his wife, both declare that it is their voluntary act and deed for said Lanuto to have their property after their death.
“[Signed] Frank DeLuoa. Francesco Graziano, her
Rosa Denaro X Graziano.” mark

On tlie next day Mrs. Graziano» called and said “to hold the deed—not to send for record until her son came from Brooiklyn,” On Janua.ry 2d, 1923, Graziano» and his ste»p-so»n called and requested the deed to be recorded. This appears to be the only call by Graziano at DeLuca’s office unaccompanied by Mrs. Graziano.

A further memorandum appears on January 18th, 1923: “Both called and ordered quit-claim drawn, but not to record ' until further orders. Lanuto gone to Brooklyn to get his family.”

The quit-claim deed was drawn, executed and acknowledged by Graziano and bis wife, and they signed the following statement:

“Vineland, N. J., January 18th, 1923.
“This is to show that Francesco Graziano and Rosa Graziano, his wife, personally came before me and declared that they have sold their property consisting of about fifty acres of land, with buildings thereon, to Natale Lanuto, their son, by deed dated December 19th, 1922, which deed is now in the clerk's office of Atlantic county, New Jersey, reserving, however, their life use and interest to said premises. Now, therefore, the said Francesco Graziano and Rosa, his wife, have mutually agreed to quit-claim their rights and interest which they reserved on said premises by virtue of said deed, in order that said Lanuto may have clear title to said premises, and that he may do as he shall see fit with said premises. It is plainly understood that we do understand what we are now doing, that we are giving up all our riglts, titles and interest to the fifty acres, more or less, which we have reserved for the life of each of us.
“We further say that it is our voluntary act and deed for said Lanuto to have a clear title to said premises and that he shall, if he sees fit to, sell or dispose of the same free and clear of our interest.
“Signed in the presence of
“[Signed] Giovani Audito, [Signed] Frank Graziano,
Frank DeLuca. her
Rosa X Graziano.” mark

Graziano and his wife signed the following on February 2d, 1923:

“Tou are hereby authorized and directed to send the quit-claim deed which my wife and I executed to my step-son Natale Lanuto, in which deed we relinquish all our rights, title and interest which we hold as life tenants. We have come to an amicable agreement with said step-son, Lanuto, and, therefore, you are permitted to send the deed for record.
“[[Signed] Francesco Graziano, her
Rosa X Graziano.” mark

The quit-daim deed was sent for record.

At that time application was made to DeLuca for a loan of $500, to be secured by a mortgage upon the property, and a mortgage was prepared in DeLuca’s office, bearing that date-, and executed by Natale Lanuto- and Leonorda, his wife, and Graziano and his wife-. The acknowledgment was taken by Thomas DeLuca, a son of Frank DeLuca. Of the consideration of the mortgage, $30 was delivered to Lanuto- on that day, by check to Lanuto- and Graziano-, and endorsed by both, and $30 to Rosa Graziano. Final settlements was made on February 10th, 1923, by giving Lanuto $340 in cash and ■a bill for $100 for services in the conveyances.

There is a conflict as to how this- money was distributed— Graziano- denying he had received any of it.

Mr. DeLuca explains why he was so- particular in making all these memoranda, by saying: “Well, I used every precaution possible for the reason, if the court wishes to know, I will explain. Years ago I had almost a similar case to this * * * I was severely criticised * * * and I was cautious.”

An examination o-f these memoranda emphasizes the testimony of DeLuca, that they were made for his protection, and that they add little, if any, proof of advice- to- Graziano-.

It is evident that DeLuca did not give, nor is there any evidence that any other person gave Graziano, that “proper, independent advice-, or that he had the preliminary benefit of conferring fully and privately upon the subject of his intended gift with a person who- was not only competent to inform him correctly as to- its legal effect, but who- was furthermore so disassociated from the interest of the donee- as to be in a position to advise with the donor impartially and confidently as to the- consequences to himself of his proposed benefaction.” Post v. Hogan, supra.

A decree will be advised setting aside- the conveyances in question.

I will hear counsel upon tile question of referring the matter to a master to ascertain the amount, if any, due Lanuto for payment of taxes or otherwise.


author: Ingersoll, Y. C.

text:
    Samuel Rothholz et al., complainants, v. Samuel Stern, defendant.
    [Determined December 20th, 1924.]
    Where a garage was erected on lands subject to a restriction that private dwellings only shall be erected thereon, the fact that the garage is connected with the dwelling-house by two iron bars only does not relieve the owner from the effect of the restriction.
    On bill for injunction. On order to show cause.

      Messrs. Cole .cG Cole, for the complainants.

      Mr. Joseph B. Pershie, for the defendant.
   Ingersoll, Y. C.

The defendant has caused to be erected a “metal garage” upon his property at the northwest comer of Stenton place and Pacific avenue, Atlantic City, New Jersey.

The defendant’s lot is a part of the land generally known as the “Hemsley Tract,” and the particular restriction alleged to be violated is: “4. Private dwellings only shall be erected upon said premises, excepting, however, premises that may hereafter be reserved * * *” (the premises in question have not been reserved).

Although the affidavit of the defendant states the garage to be connected to his dwelling-house, counsel for him states that that “connection” consists of two* iron bars extending from the roof of the garage to the house. A cursory examination of the premises show the garage to be an independent building, and the bars are clearly onfy supports or braces to prevent the garage moving from the effect of wind or otherwise.

The building complained of is 'not a “private dwelling,” nor does it form a part of a “dwelling-house.” The defendant contends that he, as a physician, requires his automobile, a necessity in his profession, to be immediately available, and, to be so available, it must be stored upon his premises.

I find nothing in Trainer v. Calef, 96 N. J. Eq. 657; 2 N. J. Adv. R. 1475, cited by the defendant, to sustain this contention, and it cannot prevail. He also claims laches on the pari of the complainant. The garage was erected in two days, on the first of which notice was given to the workmen to cease. The defendant and his wife were out of Atlantic City during the two days of the erection. They cannot complain that they did not receive notice before the completion of the garage because of their absence.

Contention is also made that the restrictive covenants have been abandoned. There is noi proof of such abandonment.

The result is that an injunction will be advised in accordance with the second prayer of the complianants’ bill.


text:
    Benjamin E. Harris, complainant, v. Quinton P. Harris et al., defendants.
    [Determined December 27th, 1924.]
    1. A will ordinarily speaks from the time of the death of the testator, unless a contrary intention is manifest on the face of the will.
    2. In a will the words “all moneys and securities in the City National Bank of Salem, and which belonged to my late wife,” held to mean that money and securities in the box at the bank at the time of the death of the testator.
    3. A bequest to “cousins” means first cousins only.
    On bill for construction of wall. On final hearing.

      Mr. Thomas G. Hilliard, for the complainant.

      Mr. Walter H. Bacon and Messrs.-Carr é Carroll, for the defendants.
   Ingersoll, Y. C.

Dr. W. Scott Smith and Dr. Ellen B. Smith were husband and wife, living together, and each practicing their profession in the city of Salem. The wife died intestate some time before his death, leaving a personal estate of about $31, 529.05, as evidenced by the appraisal of her husband as administrator. This personal estate consisted of cash and securities then in the City National Bank of Salem. ■

In June, 1920, Dr. W. Scott Smith made and executed his last will and testament, which was on July 25-th, 1923, duly admitted to probate.

This will has three subdivisions—

“Eir-st. I order all my just d'ebts to be paid as soon as convenient after -my decease.
“Second. All moneys and securities in the City National Bank of Salem, N. J., and which belonged to my late wife, Dr. Ellen B. Smith, I'give and bequeath unto Quinton P. Harris, of California; Lucy H. Arnold, of Lancaster, Pa., and Margaret Brown, of Denver, Colorado, or their legal representatives, to be divided! equally among them, share and share alike.
“Thirds All moneys and securities belonging to me in Salem National Banking Company of Salem, N. J., I give and bequeath as therein directed.”

During the life of Dr. Ellen B. Smith, she had a box in the City National Bank of Salem, New Jersey, which box Dr. W. Scott Smith retained after her death.

Dr. W. Scott Smith had at his death, and had had for many years, a box in the Salem National Banking Company, of Salem, New Jersey.

The complainant, as executor of the estate of Dr. W. Scott Smith, found in the safe deposit box of the decedent, in the City National Bank, being the same box used during her lifetime by Ellen B. Smith, moneys and securities amounting to $10,887.60. These securities were either a part of the securities previously owned by Dr. Ellen B. Smith, or were securities taking the place of some other securities owned by her.

The remaining articles of personalty belonging to the said Dr. W. Scott Smith, excluding household goods and jewelry, consisted of money and securities in his safe deposit box in the Salem National Banking Company, and amounted in value to $39,440.

The defendants, Quinton P. Harris, Lucy H. Arnold and Margaret Brown, have demanded of the executor all the securities which belonged to the wife, Dr. Ellen B. Smith, at the time of her decease, or the money value thereof, claiming that section 2 of the will so provided.

The executor prays that he be ordered and decreed as to the manner and form of the distribution to be made by him under the terms of the second clause of said will.

The contention of the defendants (claimants) is that the will should be interpreted as though this clause read: “All moneys and securities now in the City National Bank of Salem,” &e.

Therefore, the question resolves itself. Do' the words “all moneys and securities in the City National Bank, * * * and which belonged to my late wife,” mean “all moneys and securities at the date of the will,” or “all moneys and securities at the time of decedent's death.”

A will ordinarily speaks from the time of the death of the testator. Where a contrary intention is manifest on the face of the will, the will will be read as of the time when the testator intended it should speak. Inhabitants of Phillipsburg v. Bruch, Execudor, 37 N. J. Eq. 482.

There is nothing on the face of the will to manifest such, contrary intention. Considerable testimony was permitted tending to show the testator’s intention. It is unnecessary to determine whether, under the circumstances, this testimony was admissible, as it, if admissible, is not sufficient to satisfy the court that the testator intended the will to be read as suggested and intended by the claimants.

The proceeds of the life insurance policy o-n the life of Dr. W. Scott Smith, made payable to Dr. Ellen B. Smith as beneficiary, cannot be deemed as having “belonged to- my late wife,” and must therefore be included in the residuary clause.

The third question, being a request for instruction as to the words “cousins,” is answered by a reference to Walker v. Chambers, 85 N. J. Eq. 376, which held that “a bequest to my cousins means first cousins only.”

A decree will be advised directing the complainant in accordance with these views.


text:
    Henry Wegmann, complainant, v. Walter H. Bacon, executor, &c., et al., defendants.
    [Determined December 27th, 1924.]
    Where land in the name of a wife (the husband having contributed to the purchase) is sold, and the proceeds put in other lands also in her name, to which purchase the husband also contributed, the wife having died testate, bequeathing $1,000 to the husband and ordering the balance of her estate invested and held for purposes specified, the husband must overcome the presumption that he intended to settle the property on his wife by certain, definite, reliable and convincing proof.
    On bill for relief. On final hearing.

      Mr. Herbert C. Bartlett, for the complainant.

      Mr. LeBoy W. Loder and Messrs. Powell & Erickson, for the defendants.
   Ingersoll, V. C.

The complainant and his wife, Louisa, came to Rosenhayn, -New Jersey, in 1898, and a tract of land was purchased of one Purvis, through Mr. Bacon, for the sum of $500. The title was taken in the wife’s name. They remained on the Rosenhayn farm from 1898 until 1914, when they moved to Vineland. Two deeds were offered in evidence, made by John P. Gaze et ux. to Louisa Wegmann, each conveying a tract of land fifty feet in front by one hundred and ninety feet in depth in Vineland. One deed recites a consideration of one dollar and other valuable consideration, the other the sum of $400.

The property at Rosenhayn was sold and the proceeds used on account of the cost of the erection of a dwelling upon the Vineland property.

The negotiations for the Vineland property were made by Louisa Wegmann.

Later, Mrs. Wegmann entered into’ an agreement for the purchase of a property in Ocean City, she making a small payment thereon, he later securing $200 on his personal note, and $2,300 being raised by a mortgage on the Vineland property. The title to the Ocean City property was also taken in her name.

Mrs. Wegmann died in 1923 testate. In her will she appointed Walter II. Bacon as executor. He has qualified.

By this will $1,000 was bequeathed to’ the complainant, and the balance of her estate ordered to be invested and held for the purposes specified. '

The Ocean City property has been sold by the executor, and the Vineland property sold under foreclosure proceedings.

The complainant prays that a decree be made by this court adjudging complainant to' be the legal, as well as the equitable owner of the lands described.

The lands having been sold, and the money received therefor remaining in the hands of the executor, the complainant now asks for an order directing the executor to pay the same to him. *

The complainant claims to have paid the consideration for the original lot at Eosenhayn, that his wages were also used in the payment of the consideration of the other properties. It is apparent that the wife paid a considerable amount of the purchase price of the several properties from funds, which she from time to time received from the estate of a former husband.

“It being a well-settled principle * * * that a resulting trust arises from the fact that,the money of the real and not the nominal owner formed the consideration at the time and became converted into land.” Ostheimer v. Single, 73 N. J. Eq. 539. “And also that a resulting trust must arise at the instant the deed is taken, and the legal title is vested in the grantee, and the situation of the transaction when the title passed is to be looked to, and not the situation preceding or following that time [Krauth v. Thiele, 45 N. J. Eq. 407, and that where a husband procures real estate to be conveyed to his wife, he paying the consideration, a presumption arises that he intended to settle the property on her, and while such presumption may be rebutted, the proof offered to accomplish it must be certain, definite, reliable and convincing, leaving no reasonable doubt of the intention of the parties.” McGee v. McGee, 81 N. J. Eq. 190. The first question for consideration is: Has the complainant overcome the presumption that the fee was vested in the wife as a gift or settlement upon her? The complainant relies to a great extent upon the principles enumerated by Vice-Chancellor Backes in Yetman v. Hedgeman, 82 N. J. Eq. 221, a case quite similar in many respects to the case at bar.

I was quite convinced at the hearing, and that conviction has not been weakened by a careful study of the transcript of the testimony taken at the hearing, that the complainant has not overcome the presumption of a gift above referred to by proof equally satisfactory and explicit with the proof required to establish a resulting trust, and by circumstances “certain, definite, reliable and convincing, leaving no reasonable doubt as to the intention of the parties.” McGee v. McGee, supra,, and cases therein recited.

I find that the legal presumption, that settlement on his wife was intended by the husband, which arises from the conveyance to her, has not been met by proof made by the complainant in this case. I will advise that the bill be dismissed.


text:
    Frank Obergfell, complainant, v. Allan T. Wicks et al., defendants.
    [Determined December 29th, 1924.]
    On a bill for specific performance, the defense being that the vendor made certain false representations as to the amount of business he was doing, and the profits therefrom made by him, evidence examined, and held that the false representations were not proved.
    On bill for specific performance. On final hearing.

      Messrs. Cole <£ Cole, for the complainant.

      Mr. Joseph J. Summerül. Jr., for the defendants.
   Ingersoll, V. C.

The complainant was, prior to August, 1923, the owner of certain premises in Egg Harbor City, and was conducting a fiorist business thereon.

In that month he entered into an agreement in writing (which was not dated) with the defendants, wherein he agreed to convey the lands and premises in question, together with the goods and chattels, and all his right and goodwill in the business, to the defendants for the sum of $15,-000, which they agreed to pay, as follows: $5,000 upon the signing of the agreement; $5,000 to $7,500 to be raised by the defendants upon a mortgage to a local building and loan association, and to be paid to the complainant, and the balance to be evidenced by a mortgage to the complainant, running fox five years at six per cent, interest per annum. The complainant further agreed that he would not enter into the flower business in Egg Harbor City or vicinity for at least ten years from the date of the agreement. The complainant and his wife, b3 deed dated September 1st, 1923, conveyed the said lands and premises to the defendants, and they entered into and are still in possession of the premises.

The Germania Building and Loan Association agreed to loan the sum of $7,500 upon the premises, and the defendants made, executed and delivered a bond, secured by a mortgage in that amount, dated September 1st, 1923. This mortgage was recorded in the clerk’s office of Atlantic county on November 22cl, 1923.

At the time of the malting of this mortgage, it was understood that the same should be held in escrow until the association should be in funds to pay the amount.

The defendants also, on the 1st day of September, 1923, made and executed a mortgage to the complainant in the sum of $2,500, papable in five years from the date hereof, this being the balance of ihe purchase price. On or about February 4th, 1924, the defendants served notice upon the complainant rescinding the contract and demanding the return of the $5,000 paid as a part of the consideration,' giving as a reason therefore that the contract had been entered into through misrepresentation and fraudulent statements as to the value of the florist business.

The defendants’ testimony is that a tender of a deed for the premises was made by him to the complainant. This is denied by Obergfell.

On March 10th, 1924, or a da3 or so previous thereto, Wicks called upon-Herman L. Hamilton, the attorney of the building and loan association, and stated he would not need the money from the association, as evidenced by the mortgage. Hamilton thereupon caused the mortgage to be canceled of record.

■ It will be noted that the bill in this cause was- filed February 14th, 1924, and service of the subpoena ad respondendum, was acknowledged by solicitor for the- defendants on the same date.

The complainant’s prayer is for a reconveyance of the premises, a cancellation of the building, and loan mortgage (which has been canceled of record since the filing of the bill), a surrender of the possession and forfeiture of the amount paid on account of the. purchase-money, or a compliance with the terms of the contract, and for general relief.

The first defense is, substantially, that complainant falsely represented that the business had paid him the sum of $12,-000 a year for several years last past, and would pay the sum of $12,000 per year.

The second defense is that the complainant falsely represented to the defendants that the papers they were signing were not mortgages, and that they are therefore void.

This has not been .pressed. An examination of the mortgages in question reveal that they were duly executed and acknowledged before Herman L. Hamilton, a master in this court, the attorney of the building and loan association, and who witnessed the original agreement for the sale of the land.

Mr. Hamilton was present as a witness at the hearing in this cause. This second defense must be considered as abandoned.

The third defense is that the defendants rescinded the contract.

The fourth defense is embraced in the first. The fifth and sixth defenses are that complainant falsely represented that the business produced a profit exceeding $3,500 per year.

The seventh and eighth defenses are that the complainants falsely represented the amount of annual purchases made by a considerable number of patrons of the business.

The counter-claim is that, because of these alleged false statements, they (the defendants) have been greatly damaged, and pray that the deed from Obergfell and wife to defendants be canceled; the complainant be compelled to return the said sum of $5,000; the bond and mortgage' to the building and loan association, and the bond and mortgage to Obergfell be canceled.

The testimony taken was very voluminous and a great number of checks and bank statements were offered in evidence. No’ regular or complete books of account appear to have been kept by either of the parties, certainly not by the complainant.

It is clearly proven, however, that Obergfell did a business of approximately $12,000 the' last year he conducted it, and that, beginning with the taking over of the business by Wicks, the volume of business steadily and rapidly decreased.

This is easily understandable. I cannot help but know, even should the testimony not be complete upon this point, that Egg Harbor City is a city formerly exclusively of German residents—now, to a great extent, at least, of Germans or descendants of the former residents.

The testimony is that Obergfell is a descendant of the original settlers in the city, and that he has lived there all his life, and has been in this business ever since boyhood, having developed it, as he says, “from nothing.”

He has had no other business and has made a living for himself and family, and accumulated the property in question, exclusively, from the business.

Wicks is of English descent, a stranger in the city, and has never had any experience in the selling end of the business.

It cannot be considered astonishing if it be found that the business has not kept up to the volume -which Obergfell enjoyed.

I am satisfied that the first defense (which also included the fourth defense) must fail. .If Obergfell stated that he did a business of about $12,000, as testified to by witnesses of the complainant, I am satisfied that that was approximately the correct amount, and that the statements in reference thereto made by him Avere not false and fraudulent.

The second defense has been abandoned. The fifth and sixth defenses that the business produced a profit exceeding $3,500 a year. I am unable to find this statement, if made, false or fraudulent.

The remaining defenses are that false statements were made as to the amo-uht of business done with a large number of patrons. A careful consideration of the testimony convinces me that such representations were not made by Obergfell. It is inconceivable that he would make such statements to Wicks, and immediately and before Wicks went into- business, show him the sales book, which would at once contradict this statement. It is very clear that Obergfell did not do the volume of business with respective patrons which Wicks claims Obergfell stated to- him.

It is claimed that Obergfell stated that Herman L. Hamilton made annual purchases of $300. Hamilton says his purchases never amounted to- over $100. If Wicks was relying upon this statement, he could easily have ascertained from Hamilton who was the attorney in all the matters concerning the agreement of sale and the respective- instruments.

It seems natural that he would have done so, as his wife testified that she always doubted Obergfell and told him so-.

With the exception of the amount sold to Dr. James, who acted as a representative of the business in a neighboring town, the amounts claimed as having been represented, and the business actually done, differ so greatly as to tax the credulity, that any man would make such statements so- evidently false, and subject to such contradictory proof. A statement of some of them is illuminating:

Of Mischlich claimed $600, actually $40 to $50.
Of Laielli claimed $300, actually $25.
Of Winte-rbottom claimed $600, actually $40 to $50.
Of Dr. Frank claimed $400, actually $35 to- $40.
Of Eastern Star claimed $300, actually $4.

Finding that there were no-- false and fraudulent representations as to this alleged statement, the third defense, that of rescission, must likewise fail.

A decree will be advised in accordance with these views, the form of which will be settled at a hearing upon notice.


author: Bentley, Y. C.

text:
    Dora Rupp, petitioner, v. Frank Rupp, defendant.
    [Submitted November 28th, 1924.
    Decided December 4th, 1924.]
    The evidence of a detective as to the adultery of the defendant in a divorce suit, standing alone, with no corroboration, is always considered with suspicion, and when supplemented by the testimony of the defendant, frankly admitting his adultery with the utmost effrontery .and in a most suspicious manner, does not present sufficient proof to sustain a decree for divorce.
    On petition, &e. On exception to a master’s report in a divorce proceeding.

      Mr. I. Fa&rber Goldenlwrn, for the petitioner.
   Bentley, Y. C.

The parties were married in 1918, and the wife filed her petition, alleging adultery, in August, 1923. It is clear that the marriage was not a happy one from the beginning, and the express act of adultery is alleged to have occurred on the 5th day of August, 1923. The petitioner swears that prior to that time the defendant had not only begun to neglect her and remain out of the home nights (on one occasion he .failed to return until the morning), but was associating with another woman named Alice Wood. The specific act of adultery relied upon, as already said, was on the night of August 5th, 1923, when the defendant and the other woman .were seen going into an apartment .house in Jersey City, where they' each were lodgers of a woman who rented two apartments therein and sublet the individual rooms as a. means of livelihood. The defendant rented a room in one of the apartments and Alice Wood rented a room in a different apart.ment. After watching these two enter the side entrance of this building, a light was seen to appear in the bedroom of the woman, which was extinguished about midnight. The petitioner left the neighborhood to return to her home at a late hour, and the suspected individuals were kept under surveillance by two private detectives until about nine o’clock on the following morning.

One of the detectives gained admission to the building, and after many hours of waiting saw the suspected man and woman leave the latter’s bedroom at nine-five on the morning of August 6th. Inasmuch as the detectives swear that they kept a watch on the woman’s bedroom for, at least, four hours, it is clear that, if what they say be true, this man and woman had not occupied her sleeping apartment for any innocent purpose.

My difficulty with the case is the same that actuated the special master in his report, namely, the weakness of the source of evidence. All the cases on the subject from Cane v. Cane, 39 N. J. Eq. 148, down to, date, comment on the close scrutiny always to be given the testimony of paid detectives unless strongly corroborated. In the case at bar the only evidence of adultery, except something tp be noticed presently, flows from the lips of men whose every interest is in favor of making out the petitioner’s case. Anyone with the slightest experience with this class of witnesses realizes the wisdom of the rule dealt with in the cases to which I have referred. It is clear that if a decree were to be entered in favor of the petitioner in this suit it would operate as a precedent that would menace every woman in the State of New Jersey whose husband had tired of her, because it would only require the services of one or more of that class of de tectives of unscrupulous character. I do not mean to say that testimony of detectives, inherently probable and capable of some corroboration, is to' be entirely disregarded, but in this case there is not a disinterested witness, a circumstance, a document, or any other proof that in the slightest degree lends to the testimony of the professional detectives the slightest support. Although the wife has testified to a most abandoned course of conduct on the part of the suspected individuals, there is not another person .produced who has ever seen conduct of the slightest incriminating nature between them. No love notes or other indicia of illicit conduct is produced. Unfortunately, the testimony of the petitioner, except where credibly corroborated, is insufficient. Garcin v. Garcin, 62 N. J. Eq. 189.

The transcript of the depositions shows that the taking of proofs before the special master commenced on December 3d, 1923, and after the examination of six witnesses was continued from time to time until June 6th, 1924, when a most amazing attempt was made to> supply the deficiencies in the proofs by producing the defendant himself as a- witness in the petitioner’s behalf, who. thereupon, with the utmost effrontery, testified in a most suspicious manner to all the facts needed to convict him. Without the slightest difficulty, her solicitor secured his oath to having remained many times with Alice Wood in her bedroom all night immediately after being warned by the petitioner’s solicitor himself that it was his constitutional right to refuse to answer. Many of his answers were given with the always-suspicious circumstance of argumentative reasons to support them, and, finally, when interrogated by the master, ■ he frankly admitted that it would suit his desires if his wife should be successful in divorcing him. Our marriage laws would degenerate into the merest farce if the marital ties are to be severed upon proofs such as are found in this case. It is clear that the iparriage has been an unhappy one; the parties have sickened of their bargain, and a most desperate but unskillful effort has been made by them to release themselves in a case that should never have been commenced.

The exception will be overruled.


text:
    William J. Condon and Helen Margaret Condon, his wife, complainants, v. William J. Sandhowe and Nellie L. Sandhowe, his wife, defendants.
    [Submitted December 31st, 1924.
    Decided January 6th, 1925.]
    Where a purchaser does not rely upon the representations of the seller of a house as to the material of which it is built, but pursues his own investigations in that respect, he must be charged with what it is reasonable to assume he found, or could have found, and by his own act has cut off any claim to being misled, and cannot, after a delay of six months, set up a charge that he was imposed upon by the vendor.
    On bill to foreclose.

      Mr. Robert H. 'Cunningham, for the complainants.

      Messrs. Maley & Maley (by Augusid E. Maley), for the defendants.
   Bentley, Y. C.

This is a bill to foreclose a mortgage on real property, but the important issue grows out of a charge of fraud in the answer and counter-claim.

On May 14th, 1923, the defendants executed a purchase-money mortgage in the sum of $1,600, and delivered the same to the complainants, the mortgagees. On November 14th, 1923, the first installment of interest fell due and was not paid, but within the thirty days of grace provided in the mortgage the defendants caused a writ of attachment to issue out of the circuit court of Bergen county against the lands and tenements, &c., of the complainants. On January 16th, 1924, an auditor was appointed in the attachment proeeedings, and subsequently thereto' the said installment of interest was paid to that officer. This was after the said period of grace had expired.

The defendants in their counter-claim charge that the complainants fraudulently represented to them that the dwelling upon the land conveyed, and upon which the mortgage was a lien, was constructed of hollow tile, when, in fact it was not so constructed, and that by such corrupt practice upon which the defendants relied they were induced to enter into the contract for the purchase of the said premises, and prayed, among other things, a rescission of the contract- under an amendment allowed at the final hearing.

The proofs disclose the sharpest conceivable conflict and even documentary evidence is fiercely questioned, the complainants denying any such misrepresentation as contained in the counter-claim. Were the completest analysis of the evidence attempted, no decision could be reached that would be at all satisfactory, nor would it be possible to come to. any conclusion other than that perjury of the worst kind had been committed, upon either the one hand or the other. For the reason that I will immediately take up, a decision can be effected that stands upon a more satisfactory foundation, and which, I think, must be controlling, no matter what may have been the truth as to the alleged misrepresentation before the contract of sale was executed.

During the negotiations the defendants, and especially Mrs. Sandhowe, made repeated calls to the premises, and on one of them* they were both accompanied by two men named Fitzpatrick, when an elaborate examination of the premises was made. The defendants and the Fitzpatricks say that the latter were taken to the house for the purpose of having one of them act as a chauffeur, and to have the other or both of them pass their untechnical opinions as to the desirability of the property for use as a suburban residence. The complainants, on the other hand, swear that these men were introduced to them as builders who were familiar with the construction of such properties. There can be no question that it was in the latter capacity they were introduced. The elder of them might well have passed for a mechanic engaged in construction on a limited scale. They are clearly of an entirely different class, socially, than the defendants, and no plausible explanation was given that would account for the relation existing between them and the defendants to lend color to their explanation. It seems clear to me that the defendants did not rely upon the representations made by the complainants, as they would have had a right to- do, but, on the other hand, undertook an examination of the property for the purpose of determining the truthfulness of the statement as to- the construction being of hollow tile. One of the Fitzpatricks, while in the cellar, asked where the hollow tile began, and, according to- his testimony, was told by Condon that it commenced above the foundation. One of the Fitzpatricks, upon discovering a crack in the stucco-, with which the exterior of the building was covered, says that he undertook to test the wall with a stone-, whereupon Condon said to him: “It is hollow tile all right.” Even assuming, for the purpose of this consideration of the case, all the defendants say to bo true, it seems to- me to disclose beyond peradventure, as I have already said, that the defendants did not rely upon what they had been told by the complainants, and must be presumed to- have carried out their own investigation and to have found the conditions as they existed.

I think there can be no question that the defendants would have been entitled to rety upon any such statement as that with which they charge the complainants. The trouble is, however, as I have said, that thej did not do- so^ but preferred to investigate the matter for themselves, and, having done so> must be charged with what it is reasonble to assume they found, or could have found, if their investigation was made with the care and completeness to- be expected of one who deals at arm’s length with another. This rule will be found discussed in Pom. Eq. Jur. § 893. In a foot-note (at p. 1852), in the fourth edition of that work, the- author points out as a ground of the latter branch of the rule the practical impossibility of learning just how much information a party has obtained by such inquiry, and the opportunity otherwise of repudiating any transaction fairly entered into with which he has become dissatisfied. The same rule is laid down in 12 R. G. L. (at p. 357). In Attwood v. Small, 6 Clark & F. 232, representations said to be false were made by the vendor. Notwithstanding such assurances, the purchaser during the negotiations instituted an inquiry as to the truth or falsity of such statements. The investigation, as it turned out, was very superficial, and did not discover all the proofs, although there was abundant opportunity for that purpose, as there was in the case at bar. Nevertheless, it was decided by the house of lords that the vendee had cut off any claim to being misled by his own act, and that if he undertakes to judge for himself, and is not successful thereat, he should not be allowed to set up his own carelessness. In Lysney v. Selby, 2 Ld. Raym. 1118. it was said:

“If the vendor gives in his particular of the rents, and the vendee says he will trust him and inquire no further, but rely on his particular, then, if the particular be false, an action will lie; but if the vendee will go and inquire further what the rents are, then it seems unreasonable he should have any action, though the particular be false, because he did not rely on the particular.”

The rule is further illustrated by innumerable cases, such as Jennings v. Broughton, 5 DeG. M. & G. 126; Southern Development Co. v. Silva, 125 U. S. 247; Farrar v. Churchhill, 135 U. S. 609; Tuck v. Downing, 76 Ill. 71; Long v. Warren, 68 N. Y. 426; David v. Park, 103 Mass. 501.

The rule is, of course, a logical and just outgrowth of the doctrine of notice, and, as Vice-Chancellor Van Fleet said, in De Witt v. Van Sickle, 29 N. J. Eq. 209:

“A person who willfully closes his eyes to avoid seeing what he believes he would see if he kept them open, must be considered to have seen what any man with his eyes open would have seen.”

Had there been any effort to frustrate the attempt of the defendants in their examinations of the building, a different situation would have been presented. The completes! opportunity was afforded them in this respect.

Furthermore, the defendants say that they had full knowledge of the fraud practiced at their expense as early as June, 1933, and, in fact, as early as that month charged the complainants therewith. Notwithstanding, and although the complainants emphatically denied any fraud, nothing further was done, except the writing of a single letter, until December of that year, when the writ of attachment above mentioned was sued out. Explanations have been attempted of this delay, but they fail to excuse it. One who' believes that he has been wronged in the manner charged in the counter-claim does not remain quiescent over a period of six months, but, on the other hand, immediately upon the charge being denied proceeds to litigate. .

I mil advise a decree in accordance with the prayer of the bill and dismissing the counter-claim.


author: Bentley, V. C.

text:
    Jacob Strauss, complainant, v. August R. Rabe et ux., defendants.

      [Heard November 13th, 1924.
    Decided January 15th, 1925.]
    1. Where a bill upon its face appears to set forth a valid cause of action, but it is otherwise made to appear by the complainants’ own proofs that in all truth and honesty the bill does not exhibit the true 'state of facts, and that the latter preclude all possibility of its success, there is inherent power in the chancellor to dismiss the bill.
    2. A vendor may make time of the essence of a contract for sale of lands by giving notice to the vendee to that effect.
    3. An attorney or agent for a vendor, on the passing of title to lands under a written contract, has no implied authority to extend the time therefor when the contract by its terms makes time of the essence thereof.

      On bill, &C.

      Mr. Joseph Banl-er, for the complainant.

      Messrs. Melosh, Morten & Melosh (by Mr. Louis G. Morten), for the defendants.
   Bentley, V. C.

On June 12th, 1924, the parties entered into- a written contract for the sale of certain real estate by the defendant to the complainant, under the terms of which title was to pass on August 2d of that year. No appearance was made by the complainant at that time, and, subsequently, on August 18th, notice was given to complainant, in writing, by the defendants through their attorney, fixing September 8th as the time, and the office of said attorney as the place for closing title and making time of the essence of the contract. The letter specifically stated that the defendants made time of the essence and carefully showed that the attorney only obeyed their instructions. On that day the complainant, accompanied by his attorney, repaired to the place designated, brat not prepared to accept the defendants'" deed, and seeking a postponement until two days later. The bill then alleges that such an extension of time was granted. It is not said by whom the extension was granted, but the defendants do not rely upon this informality, but upon a theory which, if established, will result in a complete determination of the suit. The defendants, considering the contract as terminated upon failure to comply with its terms on September 10th, have refused to recognize anj rights claimed therein by the complainant; whereupon this bill was filed, seeking a decree for specific performance.

The defendants have given notice of a motion to strike out the bill, not upon the usual ground that it is inartificdally drawn and does not express a cause of action, but because, out of the mouth of the complainant himself, it is made to appear beyond peradventure that there is no basis, in fact, for the bill, and that the complainant cannot produce proofs thereunder, or under an amended bill, that will entitle him to the remedy lie seeks. The chancellor, in Carlisle v. Cooper, 18 N. J. Eq. 241. (at p. 248), upon a motion to strike out a bill, says:

"I cannot adjudge that under this bill the complainant will not be entitled to relief at tire hearing, upon any evidence that he may produce to sustain it. The motion to dismiss must therefore be refused.”

From this language it would seem that the converse might be true. In Conover v. Ruckman, 32 N. J. Eq. 685, an application was made to the chancellor to dismiss a bill. The application was based upon a simple notice, and he decided that there was no practice for such a proceeding in lieu of demurrer at that time, although, now, of course, it is permitted. Nevertheless, when it was made to appear, beyond the possibility of contradiction, that the complainant was not entitled to the preliminary injunction, he disregarded the formal matters of practice and dissolved the injunction or restraint then existing. From these cases it is argued, and I think with soundness, that where a bill upon its face appears to set forth a valid cause of action, but it is otherwise made to appear by the complainant’s own proofs, such as the verifying affidavits or schedules annexed to' his bill or otherwise, that in all truth and honesty the bill does not exhibit the true state of facts, and that the latter preclude all possibility of his success, there is inherent power in the chancellor to dismiss the bill. For the purpose of establishing the necesary facts to bring their motion within the rule just expressed, the defendants, by answers to interrogatories, the affidavit of complainant’s attorney filed by the complainant, his solicitor and counsel in this suit, and the examination of the complainant in open court, now establish by the oaths of the complainant himself and his own witness, that the alleged extension of the time for passing title was accorded, not by the defendant, or either of them, but by their attorney, who was without authority to do so. In this connection it should be said, in fairness to him, that the attorney for the defendants, and now their counsel in this suit, emphatically denies that any such extension was promised by him, but, on the contrary, he says that at that time he expressly declined to accede to the complainant’s, request that additional time should be allowed him for conforming with the terms of his contract.

There can be no doubt of the authority of a vendor to malee time of the essence of a "contract by giving notice to the vendee, as was done in this case, notwithstanding the doubt expressed by Vice-Chancellor Garrison in Cranwell v. Clinton Realty Co., 67 N. J. Eq. 540. The matter has been set at rest by the opinion of Vice-Chancellor Baekes in Orange Society of New Jerusalem v. Konski, 94 N. J. Eq. 632; affirmed on the opinion of the vice-chancellor in 95 N. J. Eq. 254. Therefore, time was of the essence, and that is an extremely important circumstance. Therefore, any default in this respect on the part of either party gave to the other the right to treat the contract as. breached and at an end. The court of errors and appeals has decided, in Doctorman v. Schroeder, 92 N. J. Eq. 676, that a lack of punctuality under such circumstances is fatal to the rights of the defaulting party. In that case Vice-Chancellor Learning’s opinion, which was adopted by the upper court, says:

“Approximately a half hour after the time, probably about forty minutes after, an effort was made upon the part of the purchaser to induce them to take the money, and they refused to do. so.”

Nevertheless, the purchaser was found to have forfeited all rights under the contract by a delay of between thirty and forty minutes. The circumstances in the case at bar are very much stronger against the purchaser than in the case cited.

Of course, the notice given by a vendor, fixing a definite time for tire payment of the purchase price is for his benefit, and, like all purely personal advantages, may be waived by him or his duly authorized agent, either expressly or by implication. And thus we are brought to the main and novel question presented in this case, to wit: Is there any implied authority in an attorney or agent acting for a vendor, on the passing of title under a written contract, to extend the time therefor when the contract, by its terms, makes time of the essence thereof ? Neither in the bill of complaint nor any of the proofs is it pretended that there was any express authority conferred upon the attorney for the defendants to grant such a postponement, and, therefore, if the power existed it must be by implication of law. The authority of an attorney-at-law in matters not immediately connected with litigation, is much more circumscribed than in the conduct of litigated causes. 4 Cyc. 943 et seq. In effect, the attorney represents the seller in such transactions as the latter’s agent, and his authority must be delineated by an application of the elementary rules of agency. A principal is bound by the acts of his agent, both within the authority expressly given to the latter and also by all acts performed within the apparent scope of his authority. Borcherling v. Katz, 37 N. J. Eq. 150. The acts of a special agent do not bind his principal unless the former’s authority is strictly pursued, and those who deal with such an agent are charged with notice o£ the extent of such authority. Cooley v. Perrine, 41 N. J Law 322; affirmed in 42 N. J. Law 623; Milne v. Kleb, 44 N. J. Eq. 378; Dowden v. Cryder, 55 N. J. Law 329.

When a vendor delivers a written contract for the sale of land to an attorney, and asks the latter to represent him upon the passing of title, without further instructions, and it is known to the purchaser that the contract, by its express terms, has fixed a final, specific day upon which the deed is to be delivered, the purchase-money paid, and the other matters in the contract adjusted and concluded, the charter of the agent’s powers fixes them, and the purchaser cannot thereafter claim the benefit of any treaty with the agent not found within the contract, either expressly or by necessary implication, unless the act of the agent is either expressly or impliedly ratified by his principal. If it is sought by the purchaser to modify any of the terms of the contract, or impose a new one in any material matter affecting the principal’s right, the former must, under the cases just cited, make certain, at his own peril, that the agent’s authority is sufficient to permit him to perform such act. In Dickerson v. Hodges, 48 N. J. Eq. 45, a solicitor filed a disclaimer ■which was not signed by the defendant, and which the complainant thereupon moved to strike out, which motion was granted upon the ground that the authority conferred by a retainer does not permit a solicitor to give up any of the substantial rights of his client, it is pointed out that he has no right to give up his client’s security without payment, or accept part payment in satisfaction of a debt, and, in .short, “he cannot surrender a substantial right of his client, without his client’s consent.” Howe v. Lawrence, 2 Zab. 99. It is equally clear that he cannot, unless expressly authorized, vary the terms of payment, or make the mortgage due at a later date, or even an earlier date, under some of the cases, because it is said that his principal may prefer to leave his money invested in an interest-bearing security. Speer v. Craig, 16 Colo. 478; 27 Pac. Rep. 891; Siebold v. Davis, 67 Iowa 560; 25 N. W. Rep. 778; Dayton v. Buford, 18 Minn. 126; Henry v. Lane, 128 Fed. Rep. 243; 62 C. C. A. 625.

If he was considered the alter ego of his principal, as is sometimes done under a power of attorney authorized to perform any act that the latter could do, it would permit him to decrease the price to be paid by the purchaser, or reduce the interest rate on a purchase-money mortgage to be taken back by the vendor. He has no more right to depart from his instructions than has an agent in the familiar illustration of one who, being authorized to purchase for cash, undertakes to buy on credit.

If the agent was not dealing with a situation rigidly circumscribed by the terms of a written document, perhaps a different conclusion might be reached. But it must be borne in mind that if he is not presumed to know the law, at least the purchaser’s ignorance thereof cannot be successfully advanced in his defense, and it is elementary that one who deals with an agent knowing that bis authority is limited, and transgresses such limits, cannot hold the principal. 21 R. C. L. 908. Or, if the contract did not make time of the essence, there might be a different question presented. But for the reasons mentioned, it would seem that the answer to the proposition involved in this case is that the agent was without authority to extend the time for passing title between the parties under the circumstances described.

The bill should be dismissed.