Opinion
08-10-1900
KNORR v. LLOYD.
Eli N. Chandler and Rodman L. Betts, for complainant. Henry I. Budd, Jr., for defendant.
Suit by Julia Knorr against John Lloyd. Decree for complainant.
Eli N. Chandler and Rodman L. Betts, for complainant.
Henry I. Budd, Jr., for defendant.
GREY, V. C. (orally). This cause has been so presented that the mooted questions, whichare largely matters of disputed fact, may be disposed of without further examination. The pleadings in this cause indicate that there should be an accounting by the defendant of his receipts and disbursements while acting as the agent of the complainant. This accounting covers several years, and various unsettled matters, and may be had before a master upon reference. Several other matters are in issue which should be heard and determined here. These may be referred to under four separate heads: First, the conveyance by Mrs. Knorr of the house on States avenue, Atlantic City, to the defendant, John Lloyd, and the equities attendant thereon; second, the claim of the complainant for compensation for the occupancy by the defendant of the States avenue house during part of the summer of 1807; third, the validity of the $900 mortgage made by the complainant to the defendant upon the States avenue house, and what it was given to secure; fourth, the validity of the $1,000 mortgage made by the complainant to the defendant on the States avenue house, and whether the complainant actually received any money on that mortgage.
The first point concerns the conveyance by Mrs. Knorr of the States avenue, Atlantic City, property to John Lloyd. She disaffirmed her knowledge of this conveyance, and has refused to accept the deed he gave her as a reconveyance. No equitable question appears to be raised by this incident, either favorable to Mrs. Knorr or unfavorable. The conveyance was admittedly absolutely voluntary, for her use, and I shall direct the master to disregard it as in any way changing the equities of the parties. The conveyance did not add anything to Mr. Lloyd's duties as agent for Mrs. Knorr. It simply gave him greater power. He took the title because he thought he could more conveniently deal with the property. He never claimed, and does not now claim, that he ever had any real interest in the property by virtue of that conveyance. He gave a duebill for $1,500, as the ostensible consideration, which it is perfectly obvious was never intended to be collected. The conveyance simply indicates to my mind the absolute trust which Mrs. Knorr reposed in Mr. Lloyd, and the closeness of their business relations. He had her entire confidence. She conveyed to him practically the only property she had left in the state, and took back from him a mere unsecured memorandum of indebtedness, which has since been returned to him. Mrs. Knorr denies the efficacy of this deed, and has refused to accept a reconveyance. She may exercise her choice as to the mode in which she will get back the legal title to her property, whether she will take this deed or not. The acceptance of the tendered deed would appear to restore the title to her without injury, save as its recitals refer to the mortgages which she had previously executed, and which she disputes. During the period that Mr. Lloyd had the title, no injury appears to have been done to Mrs. Knorr. It is not shown that he mortgaged it, or in any other way charged it with any lien. The proofs indicate that the deed to Mr. Lloyd was in fact duly executed and acknowledged by Mrs. Knorr, and there is no showing of any fraudulent intent or purpose on Mr. Lloyd's part in obtaining that deed.
The next question is the claim for compensation for John Lloyd's occupancy of the Atlantic City property. That matter is governed by the intimation given a while ago that accountings for unliquidated damages in this court are controlled by the cases of Trotter v. Heckscher, 40 N. J. Eq. 612, 4 Atl. 83, and Alpaugh v. Wood, 45 N. J. Eq. 157, 16 Atl. 676, to the effect that this court cannot take cognizance of unliquidated claims, but will permit the parties to go into a court of law and bring their suit and establish their rights, and come back here and state the result in the account. This court will state the account after the unliquidated damages have been made certain by a judgment in the law court.
The next item is the $900 mortgage. I have already stated that in my view that mortgage was given to secure to Mr. Lloyd an amount of money, not exceeding $900, in which Mrs. Knorr at the time of the making of that mortgage was indebted to him, with the additional sum of $100, which is named in the receipt of the same date, which is here produced, given coincidently with the mortgage, or the day after. This mortgage was not, according to my conception of the testimony, given to secure any future advances, save the $100, which was paid, and I shall instruct the master accordingly. At the time of the arrangement for the giving of this mortgage, Mr. Lloyd says he showed Mrs. Knorr her account in his books, and he claims he stated other items of indebtedness owing by her to him. There was no statement of an account, in any proper sense; no showing of vouchers, comparison of items, or written statement in the nature of an accounting. It was simply an explanation of an indebtedness in an informal way, not conclusive of anything, save that there was a then existing indebtedness of Mrs. Knorr to Mr. Lloyd, to secure which the mortgage was given. The mortgage was, in my view, not made as a recognition of a stated and ascertained balance due to the defendant, but rather as a security that the items which made up the indebtedness not exceeding the $900 should be paid. The defendant himself, when on the stand, did not state with definite certainty any such an accounting as would make the mortgage a finality. There should be an accounting to ascertain what was due to Lloyd, and within the security of the mortgage.
The last point is as to the validity of the $1,000 mortgage made by Mrs. Knorr to Isaac Lloyd on the Atlantic City house, and by him since assigned to the defendant John Lloyd, and whether the complainant actually received that mortgage money. That mortgage has been shown to have been duly executed and acknowledged by Mrs. Knorr. The certificateof acknowledgment sufficiently proves that they informed Mrs. Knorr of the contents of that instrument, and that she signed it. She admits the signature, but claims she did not know or understand what the instrument was. The evidence, however, also shows that Mrs. Knorr was a widow woman, who had never been engaged in business; that Mr. John Lloyd was her business man and agent, who possessed her entire confidence, to such an extent that she shortly afterwards conveyed her property to him without any security for payment; and that she came to the execution of this mortgage by his direction, and evidently relying upon his care and management that her interests should be protected. Taking all the evidence on the point into consideration, it indicates that Mrs. Knorr would at that time have signed anything that Mr. John Lloyd, in conducting her business, told her to sign, without any special attention on her part as to the nature of the instrument. That this was the situation is shown to be more probable, because the execution and acknowledgment of the mortgage were obviously not intended or understood by the parties to be conclusive, or accompanied by any settlement. All acted upon the assumption that the making and acknowledgment of the mortgage at the office of Mr. Alexander, Mr. John Lloyd's lawyer, were preparatory only, and that no payment of mortgage money was then and there to be made. Mr. John Lloyd admitted on the stand that the mortgage had validity only because of the settlement which he alleges was subsequently made. The acknowledgment and record of a mortgage are ordinarily prima facie evidence of a delivery and of a concluded transaction, but when the proof is clear and undisputed, as in this case, that future steps were to be taken before the mortgage transaction had any efficacy, the presumption which ordinarily attends upon the acknowledgment and record does not arise. The $1,000 mortgage did not become effective upon its execution and acknowledgment in Mr. Alexander's office, nor even upon its record. After these were all done, the mortgage had no validity until settlement should be made by the payment of the mortgage moneys to Mrs. Knorr. This was an entirely separate matter, and is not even claimed to have been done in Mr. Alexander's office, as incident to the execution of the paper; nor do any of the witnesses from Mr. Alexander's office who testified as to the execution or acknowledgment of the mortgage offer any evidence as to the settlement. Therefore the whole matter depends upon the character of the settlement, and as to that there is a serious dispute. This settlement is claimed to have taken place in Mr. John Lloyd's office some few days after the mortgage was recorded. Mr. John Lloyd testifies that he and Mr. Isaac Lloyd, his brother, who was the mortgagee, and Mrs. Knorr were the only persons present; that Mr. Isaac Lloyd then and there paid to Mrs. Knorr the $1,000 mortgage money; that the payment was made wholly in bank notes, and not by checks. Mr. Isaac Lloyd has since died, after having in his lifetime assigned the mortgage to Mr. John Lloyd, the defendant. Mrs. Knorr swears that no such transaction took place; that no money whatever was paid to her by Mr. Isaac Lloyd or by John Lloyd or by any one, then or at any time, on this $1,000 mortgage. The question, then, is simply whether the $1,000 was paid to Mrs. Knorr for this mortgage. As previously stated on this point under the peculiar circumstances of this case the acknowledgment and record of the mortgage do not carry a presumption of the indebtedness of the mortgagee; for the proof is that, after both these incidents had happened, no such indebtedness had yet arisen. Whether any obligation arose under the mortgage depends wholly upon the question whether the morgtage money was paid to Mrs. Knorr. On this point the defendant alleges the fact of payment, and must carry with the allegation the burden of proving it. There are but two witnesses; the defendant himself asserting the fact, and the complainant denying it. The parties are in direct contradiction. Has the defendant carried the burden of proof? This question was directly raised by the pleadings, so that it was no surprise to the defendant. He knew that Mrs. Knorr denied that this $1,000 was paid, and therefore bad full warning to prepare to prove his assertion that the money had been paid to her. The defendant has occupied positions in relation to the parties to this transaction which enable him to make a full exposition of all the facts. He was the brother of the mortgagee, and lived in the same house with him. He claims to be the assignee of the mortgage for a valuable consideration. He is the administrator of the mortgagee, and presumably has access to, and the means of getting knowledge of, all his books and papers and his bank accounts. Yet the testimony brought by the defendant is singularly lacking in the production of proof corroborative of his statements. He testifies that the money was paid in notes. This is flatly denied, and there is no showing of any place where Isaac Lloyd kept or got any such sum as $1,000 in notes. Isaac Lloyd is shown to have kept a bank account. His bank book or his check book of the date of the settlement might have thrown some light on the point, but none such is produced, nor is any satisfactory explanation given of their absence. If these could not be had, a copy of his bank account might have shown whence the $1,000 came, if it was ever paid. No receipt or memorandum of the settlement is shown,—nothing but the bare testimony of the defendant that he saw it paid. His testimony as to his purchase of the mortgage is of the same character. He says he bought it by a settlement between himself and his brother of the most indefinite sort, as he could not name with certainty a single item in the settlement, save board bills, which he stated were owing by him to his brother Isaac, and thereforecould not have operated as payment by him for the purchase of the mortgage. The testimony of the defendant, as given on the stand, was not impressive of its truth. He was asked what Mrs. Knorr did with the $1,000 when Mr. Isaac Lloyd paid it to her. He replied that he got some of it; that she paid $130 to him (the defendant) for commissions for obtaining the loan of the $1,000. He had his books in court, and they showed, on examination, no credit for any such payment in the afternoon he flatly denied that he had in the morning testified that he had received from Mrs. Knorr the $130 out of this $1,000 mortgage money. Such contradictions as to matters which happened directly in the presence of the court go far to weaken the credibility of the defendant's testimony concerning incidents which are supported only by the proof he brings by his own oath. There is not a single corroborative fact brought out in evidence in support of the alleged payment of this $1,000 mortgage money to Mrs. Knorr which is not in some form the creation of the defendant himself. There is an entry on John Lloyd's books of the payment of $00 for the first year's interest on the $1,000 mortgage by John Lloyd to Isaac Lloyd, but no receipt is produced to show the payment. It would have been an ordinary business proceeding that John Lloyd, in paying this money to Isaac Lloyd, as he claims, for Mrs. Knorr, should have taken a receipt for it, as a voucher to show Mrs. Knorr that he had paid it. No receipts are indorsed on the bond or the mortgage either of the payment of the mortgage money to Mrs. Knorr at the time of the settlement, or of the payment of interest by or for her at any time afterwards, though the interest was payable half-yearly, and the papers were made in February, 1895. Upon the whole case, the weight of the evidence goes to show that the $1,000 mortgage money was never paid to the complainant. A decree will be advised in accordance with the views above expressed.