Opinion
05-08-1890
DOREMUS v. DANIELS et al.
On bill to foreclose.
Mr. Dawson, for defendants Johnson and Daniels' Administrators. Mr. Alward, for defendant Dryckinck.
EMERY, Adv. M. This is a bill filed to foreclose a second mortgage, and to which the parties defendant are the holders of the third and fourth mortgages, and also a Judgment creditor of the mortgagees whose judgment was recovered subsequently to the mortgages, and who since the recovery of the judgment has become the purchaser of the property at sheriff's sale under the judgment and execution thereon. The validity of the second or complainant's mortgage is not disputed, and the amount due thereon is f 625, with interest. The contest in the case relates to the validity of the third and fourth mortgages, and arises on the cross-bill which has been filed by the judgment creditor, attacking the mortgages as fraudulent and void on the ground that they are without consideration, and were executed with the intent to defraud creditors.
The situation of the title to the property, and of the incumbrances thereon, is as follows: Elias O. Doremus, the complainant, and his wife, by deed dated February 23, 1874, conveyed to the defendant Irene H. Daniels, wife of the defendant Moses H. Daniels, a house and lot in Montclair for the sum of $6,250, the same being subject to a mortgage of $4,000, which was assumed by the grantee. The purchase-money mortgage for $1,250, upon which the bill is founded, was executed to Doremus by Daniels and his wife, who joined in the bond. The third mortgage is executed by Daniels and wife to the defendant Mary M. Johnson, a sister of Moses H. Daniels, and is given upon the same property to secure a bond for $2,600, given by the defendant Irene H. Daniels alone, payable three years after date, with interest. This bond and mortgage are dated January 3, 1888; but the mortgage was acknowledged on September 5, 1888, and recorded the next day. In February, 1888, Charles E. Larned commenced suit in the supreme court of New York against Moses H. Daniels and Irene H. Daniels, his wife, who then resided at Montclair, in this state, upon a note for $2,500 made by Mrs. Daniels, and indorsed by her husband, dated New York, February 15, 1886, payable two years after date. Moses H. Daniels was served with process in this action, but Irene Daniels was brought in only by service of the process upon her at her residence in this state. Judgment by default was entered in this action on June 7, 1888; and by deed dated August 1, 1888, the judgment was assigned to the defendant Whitehead C. Dryckinck. On August 27, 1888, Dryckinck brought suit upon the judgment in the supreme court of this state, in the name of Larned, his assignor, and on September 22, 1888, judgment by default was entered against Irene H. Daniels and Moses H. Daniels for $2,119.76. Execution was issued upon the judgment on the same date, and a levy made upon the property in question, which on November 13, 1888, was sold to the defendant Dryckinck for $100. He now files his cross-bill praying that the mortgages given to Mary M. Johnson and Abbie H. Daniels may be set aside as fraudulent and void against him as a creditor of Irene H. Daniels, and that he may be decreed to hold the premises free and discharged of these mortgages. Abbie H. Daniels died on January 10, 1889, and before the filing of the cross-bill, January 25, 1889, but her administrator has become a party to the suit, and has appeared and filed a formal answer. Mary M. Johnson files an answer to the cross-bill denying that her mortgage is without consideration or fraudulent, and sets up that the consideration was moneys due her from the mortgagors for loans made by her to the mortgagors, and for money due her for the board and care of the mother of Irene H. Daniels from June, 1875, to September, 1881,and that the mortgage was made because she insisted on having security for her debt. Pending the suit the complainant, Doremus, assigned his mortgage to the defendant Liver more, but no objection that the suit had abated has been raised or considered.
As to the bona Odes of the Johnson mortgage, the evidence establishes the following facts: In 1875 Mrs. Harding, the foster-mother of Mrs. Daniels, an old lady in infirm health, was living at Worcester, Mass., was without means of support, and was unable to come to live with Mrs. Daniels. The niece with whom she lived was also poor, and not able to support her. Mrs. Daniels, in June, 1875, visited Mrs. Johnson, who then lived at East Medway, Mass., and then made an arrangement with Mrs. Johnson to advance the money necessary for her support, promising that she would repay it. Mrs. Johnson consented to do so, and the price or amount to be paid was left to be fixed by Mr. Daniels, who expected to come on to Massachusetts later. In July or August, 1875, Mr. Daniels and his wife did go on to Massachusetts, and the price to be paid was then fixed at four dollars per week. Mrs. Johnson continued to pay this amount, being $208 yearly, from June 1, 1875, up to the time of the death of Mrs. Harding, in September, 1881; and she then paid, also at the request of Mrs. Daniels, the physician's bill and funeral expenses, amounting to $150 more. Both Mr. and Mrs. Daniels promised to repay Mrs. Johnson for these advances. During the time the advances were being made, Mrs. Daniels promised that, when their Montclair place was sold, they would pay her. This contract of Mrs. Daniels for furnishing the means to support her foster-mother was one which was valid and binding upon her, both under our laws, and the laws of Massachusetts, where the contract was made. The debt was not a debt incurred by Mrs. Daniels as a surety for Mrs. Harding, for it is evident that, so far as Mrs. Harding was concerned, she was not expected to pay, or looked to for payment; and Mrs. Daniel's engagement to pay was an original engagement, and not a collateral engagement of surety ship. 7 Wait, Act. & Def. 19, and cases cited. As to the validity of the contract under Massachusetts laws, see Major v. Holmes, 124 Mass. 108. The debt of Mrs. Johnson, arising from the advances under these circumstances, was a valid claim against Mrs. Daniels; and, if it remained unpaid, Mrs. Daniels was entitled to prefer her as a creditor. The mortgage was not made at the suggestion of the debtors, but was given upon the request or demand of Mrs. Johnson, who became uneasy about the repayment when her brother, who had previously worked on a salary, went into business on his own account; and, some months before the execution of the mortgage, Mrs. Johnson insisted upon her claim being secured by a mortgage on the property. On May 3, 1887, she wrote to her brother, requesting the mortgage, and stating that the amount due, as she reckoned it, was $2,600, and that she expected him to attend to it as soon as practicable.
The contention that the debt in this case, so far as relates to the board of Mrs. Harding, was purely the husband's debt, and that the mortgage given by the wife was therefore fraudulent as against her creditors, within the rule settled by Butterfield v. Okie, 36 N. J. Eq. 482, is not sustained by the evidence. It is true that Mrs. Johnson swears that she expected her brother to pay the advances, and that her brother swears that he agreed to pay her. But this evidence only shows that Mr. Daniels also became bound to pay the claim, as well as Mrs. Daniels, and does not at all operate as a release of Mrs. Daniels from the legal and equitable obligation incurred at her request, and on her promise to pay. There is no evidence on which to base a conclusion that Mrs. Daniels' undertaking in this matter of making advances for the support of her foster-mother was as surety for her husband. Mrs. Daniels was primarily liable, and her husband, if liable at all, only jointly with her. This is not a case where the wife's liability cannot co-exist with that of the husband, as in Wilson v. Herbert, 41 N. J. Law, 454. The objections to the mortgage founded on the delay in giving it are sufficiently answered by the evidence, which shows that all parties expected a sale to be made of the Montclair property, and that Mrs. Johnson would then be repaid, and that it was only when her brother went into business that she insisted upon the claim being secured on the property. So far, then, as the mortgage is founded on this claim for advances on Mrs. Harding's account, and for the interest thereon, it is valid.
This amount so due, with interest computed annually, and with annual rests, as the parties had a right to agree upon, (see 2 Chit. Cont., 11th Amer. Ed., 957, 958, and cases cited in note H,) was on the date of the mortgage $2,335.76, as appears by the statement and calculation put in evidence by Mrs. Johnson. The balance of Mrs. Johnson's claim is for money loaned from 1870 to 1886, in sums varying from $10 to $50, and amounting altogether to $297.50. As to these items the proof establishes, I think, that the advances were made as loans, and not as gifts; but as to most of the items the proof is not clear that the loans were made to Mrs. Daniels, and on her credit. The present statement of the time and amount of these advances is taken from Mr. Johnson's memorandum books or diaries, as she swears, and some of these diaries are now produced, but not all of them. In all of those which are produced the entries show that the money was sent to her brother, and not to his wife; and, although Mrs. Johnson says that Mrs. Daniels generally wrote the letters asking for the money, these letters are not produced, and this general statement is not sufficient, as against Mrs. Daniels' creditors, to charge her with all of these advances as debts due from her alone. For those items which are proved to have been original loans to Mrs. Daniels, or for the benefit of her separate estate, I think Mrs. Johnson is entitled to hold the security of the mortgage as against the other creditors of Mrs. Daniels; but for thosewhich are not proved to be loans of this character, but are primarily the husband's debts, I think the mortgage cannot stand as security. In cases involving the rights of her own creditors, I think the burden is upon the married woman to satisfy the court that the items included in the security are debts of her own. The loans or advances which I allow as proved to have been made directly to Mrs. Daniels, and for her benefit, or that of her separate estate, are the following: December, 1870, $20 advanced to Mrs. Daniels; November, 1883, $40 advanced to pay interest on the mortgage on the property. These are the only items as to which the proof seems clear that the loans were made to Mrs. Daniels, or for the benefit of her estate; and these amounts, with simple interest from their date, should be included in the amount due Mrs. Johnson under her mortgage.
As to the mortgage to Abbie H. Daniels, the daughter, the proof is satisfactory that, at or about the time of the purchase of the property by her mother, she advanced the sum of $500 for the purpose of assisting to pay part of the purchase money, and to repair the house. This money was evidently advanced on the security of the property, and at the request of both the father and mother. The money being advanced directly for the benefit of her separate estate, the contract of Mrs. Daniels to repay it was binding upon her, and she was entitled to secure her daughter in preference to other creditors. The circumstances connected with the actual execution of the mortgage, and the delay in recording it until after the commencement of the defendant Dryckinck's suit, cast some suspicion upon the bona fide character of the claim; but in my judgment they are not sufficient to overcome the positive evidence of Mrs. Daniels that the money was advanced by the daughter at the time and for the purpose stated, and upon the promise of both Mr. and Mrs. Daniels that she should be repaid. Her mortgage is a valid lien upon the premises for the amount named therein, and should be paid in its proper order. Neither the mortgage of Mrs. Johnson nor Miss Daniels is yet due by its terms, and therefore proof should be submitted, under section 74 of the chancery act, as to whether it is necessary that the whole property should be sold in order to pay the complainant's mortgage; and I will take the proof on this, unless the parties agree. I will also hear the parties as to costs.