Crocheron v. Savage

Full title: CROCHERON v. SAVAGE.

Court: COURT OF CHANCERY OF NEW JERSEY

Date published: Jun 4, 1908

74 N.J. Eq. 629 (Ch. Div. 1908)

74 N.J. Eq. 629

Opinion

06-04-1908

CROCHERON v. SAVAGE.

John J. Enright, for complainant. Robert H. McCarter, Atty. Gen., and William H. Osborne, for defendant Savage.

HOWELL, V. C.

Bill by Valina R. Crocheron against Edward S. Savage. Decree for defendant.

The bill in this case is filed to set aside a conveyance, made by the complainant to the defendant, of an interest in a small tract of land in Middlesex county. The property consists of an undivided one-half interest in about three acres of salt meadow, lying at the junction of Thorps creek with Staten Island Sound. It is triangular in shape, is bounded on the north by Thorps creek, on the south by the Sound, and extends easterly to the junction between the creek and the Sound. It is thus bounded on its two long sides by water; the third, or westerly, side abuts upon land belonging to other proprietors. It is not accessible, except by boat, and that from the Sound side only. The railroad of the Port Reading Railroad Company adjoins the tract, and lies a short distance to the northeast of the mouth of the creek. The docks and other constructions of the railroad terminal are built wholly across the mouth of the creek and for a few feet in front of the salt meadow lot in question. All parties agree that it has but little value to any one except the railroad company, and that such value arises from what is called "strategic situation." The railroad company claims title to the whole tract, and denies that either of the contending parties in this suit have any title to any part of it, or any interest in it.

Prior to 1908 the complainant employed a solicitor to make an attempt to dispose of the property and realize its value. The only obvious customer at that time was the railroad company. After the lapse of some year or two, no result having been reached, the complainant dismissed her solicitor, and in the early part of 1903 intrusted the management of the negotiations for the sale of the property to the defendant, who is a solicitor of this court; his compensation for his services in the matter being fixed at one-fourth of the recovery. The defendant took the matter vigorously in hand, opened anew the negotiations, and interested several of the railroad officials connected with its real estate department therein. These negotiations continued for about three years. During all this period the railroad company denied the complainant's title, and claimed title in itself, and, finally, toward the end of the negotiations, practically discontinued the same on its part, upon the ground that the whole title was vested in the railroad company. The company meantime had offered $100 for a conveyance from the complainant, and it finally declined any further negotiations. All this is shown by the correspondence between the defendant and the railroad company, by the evidence of the defendant, and by that of the complainant and her son, Jesse O. Crocheron, who was the representative and adviser of his mother, the complainant. It may be said that Mr. Crocheron, who is about 42 years old, is engaged in the coal business at Rossville, on Staten Island, and he lives in the same house with his mother, and appears to be a man of business capacity and affairs. And it likewise appears that his mother consulted him about the property and its disposition, that he advised with her in relation thereto, and that he had more or less to do with the negotiations, and was kept quite fully advised of the whole situation.

The complainant, at the beginning of the negotiations with the railroad company, claimed to own only two-thirds of the undivided half of the undisputed territory. The other third was claimed by several persons, who were the children and descendants of a deceased brother of the complainant. They are known in the case as the "Virginia heirs." In 1903, very shortly after the defendant was employed by the complainant, these Virginia heirs conveyed all the undivided interest which they claimed to the complainant, for the mere purpose of convenience in making disposition of the land. All the correspondence between the defendant and the railroadcompany and the officials of its real estate department and Mr. Ephraim Cutter, a solicitor of this court, who in some way represented the railway company, was put in evidence. For the purpose of showing how the negotiations closed the following citations from this documentary evidence is made: On October 23, 1905, the defendant wrote to Mr. Cutter, inclosing a map of the premises, and notifying him that he was holding the papers, and would like to know whether he would be compelled to bring suit, or whether a conclusion could be arrived at without it, to which letter Mr. Cutter, on the following day, October 24, 1905, replied, making an appointment to meet the defendant at the railway station in Railway for further conference. Mr. Cutter and the defendant met, in pursuance of that appointment. In his testimony Mr. Cutter describes what took place in that interview. He said that he told the defendant that he had looked into the matter of the title, and had spent two or three days in the Richmond county clerk's office, on Staten Island, and that he had come to the conclusion that the property that was claimed by the complainant was the property mentioned in the deed to the railway company under which it claimed title, although the description differed; that he told the defendant that if partition proceedings were instituted, the company could have its part set off nearest the docks, viz., the property that the docks were partly constructed on, to which the defendant replied that he did not know about that, that he thought the railway company would be compelled to remove the docks, but said, in response to a question put for the purpose, that he never admitted that the lands claimed by the complainant and the railroad company were the same property until that time. And on October 30th, the defendant again wrote to Mr. Cutter, notifying him that he intended to go to Philadelphia on the next day, and asking him if he had any communication for the railroad company, he would like to have Mr. Cutter write it out, so that he might take it with him, and notifying him that unless some conclusion was arrived at, he intended to make a demand on the railroad company before commencing an action in favor of his clients, who, he said, were disgusted with the two years' waiting.

The correspondence, for the period of nearly three years, between the railroad company and its officials and the defendant had been of this same inclusive character. It is, however, manifest from a close perusal of it that the railroad company declined to admit that the complainant had any interest in the property, but in order to save any question, they were willing to give $100 for a conveyance of what was claimed to be the outstanding interest. From October 30th until the first week in the following January nothing appears to have been done. On January 3, 1906, the defendant went to the house of the complainant on Staten Island, carrying with him a blank form of warranty deed, in which was typewritten a description of the undivided half interest which was claimed by her. Arriving at her house, in company with a witness named John Edgar, he saw the complainant, and asked for her son, Jesse O. Crocheron. She replied that he had gone across the Sound, and the defendant and his friend waited until he returned. In the meantime the defendant had no conversation with the complainant, and did not state what his business there was. When the son came home, the defendant told him, but not in the presence of his mother, the occasion of his visit. He told him that he could do nothing more for his mother in regard to the meadow in question; that he had spent all the time and all the money he intended to spend on it, unless they were willing to go into a litigation; that he had corresponded with Judge Campbell, and with Mr. Loomis of the railroad's real estate department, and that he had been referred from one to another, and back again to Mr. Cutter, and that the situation was no better than it was three years before; that the railroad company did not admit that his mother had any title, and that the only offer they ever made was the offer they made, a year or two before, of $100; that he wanted to have a talk with the complainant and tell her the situation; that if she wanted to go on with the suit, he desired to explain to her that she would have to bring an action for partition, which might result in the division of the property, and she might thereby become possessed of a half interest, whereupon, according to his story, the son said, "The other half isn't worth anything," to which the defendant replied, "Now that is something for you to determine," and the son replied to that that his mother was too old to have a lawsuit, and did not want to have any, to which the defendant replied that he felt very much annoyed about the matter, had taken a great deal of interest in it, and he was up to the point where he would like to fight it out; that he did not want to influence her, but that he did not want to bring a suit for her unless she understood what might be the result if she won, and if she lost, to which the son replied: "We will go in and talk with mother." They then went into the house, and the defendant says that he substantially told the same thing to the complainant that he had told to Jesse outside; that the best offer he could get for the property was $100; that he would rather give her $200 and fight the railroad than to give up, to which she replied that "that don't seem very much money." Defendant said, "No." Complainant said: "We expected to get a good deal more." Defendant said: "I wouldn't have spent half the time on this, or half the money, if I hadn't expected to get you a great deal more money, but I want to say to you now that I cannot do any more until we have a lawsuit"—to which the complainantreplied that she did not want a lawsuit under any circumstances. Defendant then said: "Then you have got to give up your fight or your efforts, or you have got to have your lawsuit." She relied that she owed Dawyer Hyer some money, to which the defendant replied that Hyer would be willing to take $50; that he would rather have that than have the property. After some further talk the defendant said: "Now I have got a deed here with the description in it. I will give you $200, with the understanding that I am going to fight this railroad through. I am going to fight it out, and find out whether we have a half interest in this property or not." She replied: "I hope you will. I wish I was younger, I would like to fight them." Defendant then says that she went out of the room into an adjoining room with her son. They came back, and the son asked the defendant, in his mother's presence, "Do you say $100 is the best offer the railroad company will make for this property?" to which the defendant replied, "Jesse, it is the only offer that I have ever been able to get them to make, and it is a question now whether you give up the fight or bring an action to maintain your title. In my opinion they won't pay anything until they are licked out." "Well," said Jesse to his mother, the complainant, "you do as you please." And she said: "Well, I would rather have the money." Defendant said: "Very well, Mrs. Crocheron, I will give you $200 just for the privilege of fighting them. I have spent a good deal more money than that already in your behalf, and I think they are trying to make a fool of me. So," he said, "I will take this deed in the name of my clerk"?and he filled out the writing, as shown in Exhibit 624. After the deed was read to her, she remarked that she thought the defendant should pay Mr. Hyer's bill. This the defendant agreed to do. The complainant then signed the deed, and the defendant took her acknowledgment. The deed was to Albert Bruns, who is the defendant's law clerk. The defendant then paid her $200. There was then some conversation as to whether the Virginia heirs would be satisfied with the amount that the complainant had received for the property, and Mr. Crocheron requested him to write a letter to the complainant, explaining the situation, so that she could send it down to them with their money. This the defendant did.

The testimony of Jesse O. Crocheron as to this interview is not materially different from that of the defendant, except that he denies that there was any conversation between the defendant and himself before they went into the house. His story about the interview is this: That the defendant went into the room where the complainant was; that he had a deed all ready for her to sign, and that his mother asked him what he thought she would better do about signing it; that he thought the matter over for a while, and then particularly asked the defendant: "Mr. Savage, do you positively say now, before I have anything to do with this, that the Philadelphia & Reading Railroad Company have positively refused to buy this property, and there is no value to it?" The defendant said: "I do." Then Mr. Crocheron says: "I thought it over, and I told my mother, 'Well, you do just as you see fit'; that is all I had to say, and I went out." He further says that the defendant did not, at that time, say anything about the value of the property, but that he had at other times; that at other times he had said that the property was of no value to him, and that he, the defendant, positively refused to buy it. This interview is likewise described by the complainant. She says that she does not remember just what took place at first, but that the defendant said to her that the company would not take the land, would not buy it, would not have It, and did not need it; that he then offered her $200, as she would never get anything more, because no one else would buy it, and that she never would get anything out of it; that she objected, and said she did not want to do it until she had heard from her nephews in the South, to which he replied that it would not make any difference, because they would never get anything; that she said she wanted a week to consider it, and that she would not sign the deed until she saw her son, who was over at the railroad company's dock buying coal. She mentioned the Hyer bill, which she says the defendant told her could be disposed of for $25, and afterwards promised that he would settle with Mr. Hyer; that the defendant stayed around, and went to the shore, and stayed there until he saw Mr. Crocheron coming across; that he was beckoned to come in, and that the son came in; that the defendant had the deed with him. She says that he did not read it to her, and that it was not acknowledged, and that he did what he could in every way to persuade her to make the sale, but that the defendant told her that he had exhausted himself in endeavoring to get the railroad company to pay anything for the property, and that he had been to Philadelphia a half dozen or more times; that he would give her $200 for the property, which was just $100 more than he had ever been able to get the railroad company to offer, and in addition thereto would pay Mr. Hyer's bill; that then her son Jesse came in, and asked the complainant, "Do you mean to say they have positively refused to buy that meadow?" Mr. Savage said, "Why, certainly." Whereupon Jesse said to his mother that he did not know what to say about making the sale; that the complainant should do as she pleased. That this conversation between her and Jesse was not in the presence of the defendant, and with this information she signed the deed.

On February 21, 1906, Mr. Crocheron wrotea letter to the defendant, stating that he had mislaid the letter which the defendant had sent him relating to the sale of the property, which was written for him to send to the Virginia heirs, and asking for a duplicate. The defendant sent him a duplicate of the letter, and shortly after that Mr. Crocheron and his mother sent to the Virginia heirs the portion of the money coming to them from the sale of the property. The transaction was thus wholly closed by the 1st of March, 1906. The bill was filed in the case on September 13, 1907, a few weeks after the defendant had brought suit against the Port Reading Railroad Company to compel it to remove its construction from the mouth of Thorps creek.

John J. Enright, for complainant.

Robert H. McCarter, Atty. Gen., and William H. Osborne, for defendant Savage.

HOWELL, V. C. (after stating the facts as above.) The law has placed rather close restrictions upon the dealings between two parties, where one stands in a fiduciary relation to the other. In the case of trustee and cestui que trust the restriction amounts to a prohibition. In the case of other fiduciary relationships the burden is cast upon the purchaser of showing that the bargain is, speaking generally, as good as any that could have been obtained by due diligence from any other purchaser. This rule applies to the relation of solicitor and client. Where a solicitor purchases from his client the property which is the subject-matter of the employment, the solicitor must show, in case the transaction is attacked, not only that the bargain is a good as could have been obtained by due diligence from other purchasers, but also that he gave his client all that reasonable advice against himself which his office of solicitor would have made it his duty to have given the client against a third person, or, in other words, he must show that the client was duly informed, duly advised, and that the transaction was fair. In the absence of these requisites the court will set aside the purchase if completed, or refuse specific performance of the contract. In Edwards v. Meyrick, 2 Hare, 60, Sir James Wigram, V. C, states the law to be that a solicitor is not under an actual incapacity to purchase from the client. "There is not in that case the positive incapacity which exists between a trustee and his cestui que trust, but the rule the court imposes is that, inasmuch as the parties stand in a relation which gives, or may give, a solicitor an advantage over the client, the onus lies on the solicitor to prove that the transaction was fair." Montesquieu v. Sandys, 18 Ves. 302; Cane v. Allen, 2 Dow. 289. The rule is expressed by Lord Eldon * * * to be that if the attorney will mix, with the character of attorney, that of vendor, he shall, if the propriety of the transaction comes in question, manifest that he has given his client all that reasonable advice against himself that he would have given him against a third person. Gibson v. Jeyes, 6 Ves. 266. * * * In some cases, as between trustees and cestui que trust, the rule goes to the extent of creating a positive incapacity, the duties of the office of trustee requiring, on general principles, that that particular case should be so guarded. The case of solicitor and client is, however, different. * * * The nature of the proof which the court requires must depend upon the circumstances of each case, according as they may have placed the attorney in a position in which his duties and his pecuniary interests were conflicting, or may have given him a knowledge which his client did not possess, or some influence or ascendency or other advantage over his client, or, notwithstanding the existence of the relation of attorney and client, may have left the parties substantially at arm's length and on an equal footing." Hatch v. Hatch, 9 Ves. 292; Wells v. Middleton, 1 Cox, 112; Hunter v. Atkins, 3 M. & K. 113. See, also, Hugenin v. Basely, 2 W. & T. L. C. 1156, and notes at page 1216.

It was held by the House of Lords In Lewis v. Hillman, 3 H. L. C. 607, that, in case where an attorney was able to convince the court that he had a right to purchase from his client, he must purchase openly, and if he purchased in the name of a third person as his (the attorney's) trustee or agent, without disclosing the fact, the purchase was void. This case is mentioned, for the reason that it appears that in the case in hand the defendant took title, not in his own name, but in the name of his clerk, so that, under the authority last cited, the deed would be void if no disclosure of the name of the true purchaser was made. The defendant testifies that he made such a disclosure of the complainant at the time the deed was executed, and his statement in relation thereto is not denied by her. The point of the case of Lewis v. Hillman was that there the solicitors put forward their clerk as the real purchaser, when in fact the solicitor himself advanced the money, and was the responsible vendee. Here no such fact exists. The cases concerning this delicate relation between attorney and client are harmonious and of universal application. They have been adopted by the Court of Appeals of this state in the case of Dunn v. Dunn, 42 N. J. Eq. 431, 7 Atl. 842, and to the opinion, in that case, of Mr. Justice Magie, afterwards chancellor, nothing can be added. Applying the rule to the case in hand, we find that the defendant was not the general solicitor for the complainant, but acted with relation to the single matter above mentioned, that he kept the complainant fully informed of the progress of the negotiations which he was carrying on with the railway company, and that she saw, from time to time, the letters written by the railway company's officials to the defendant, and in particular did she see the letter ofSeptember 22, 1903, written by Mr. Loomis to the defendant, in which he says that he is advised that the railway company is not disposed to regard this tract of land of any signal value, or to make any substantial offer for the complainant's interest, if she has any, which seemed doubtful; that he was willing, however, in order to close the discussion, and avoid expense, to pay the complainant $100 for a quitclaim to the company of any alleged interest in the property.

At the interview which resulted in the execution of the deed by the complainant to the defendant, the only subject that was pointedly discussed was the question whether the railway company had offered more than $100 for the land in question. I have been unable to find any fact in the case which was kept from the complainant. When she executed the deed, she and her son, who was her adviser, knew as much about the situation, location, value, salability, and prospects of the property as did the defendant. It was within sight of her home, and there were annually more or less transactions to bring it to her attention. A perusal of her own testimony shows that she had perfect knowledge of the situation. It is significant that the complainant and her son tell the same story practically as does the defendant about the interview of January 3, 1906, when the deed was executed; and likewise significant that, after the proposition had been made by the defendant to purchase the land, the complainant and her son adjourned to another room to confer about the matter. I therefore think that the defendant had put himself in such a situation as to qualify him to become a purchaser of the land in question, provided the price was fair. There was no testimony in the case on behalf of the complainant, touching the value of the land, which can be relied upon as evidence of its present market value. In fact it would be difficult to ascertain the market value of a piece of land which was accessible only by boat, and admitted, on all hands, to be of little or no value to anybody except the railroad company. There was some conversation between the defendant and the railway officials, in which rather large values were mentioned, but these conversations took place after the deed had been executed by the complainant to the defendant, and were quoted by the railway officials and the defendant, in negotiations between the railroad company and the defendant for the partition of this land and the straightening of lines between his property and its property in other locations. I do not think that the valuations so discussed could be relied upon as any safe criterion of the present market value of the property. There was no evidence of sales in the neighborhood, nor any direct evidence by experts of the actual market value.

There will therefore be a decree for the defendant.