Opinion
12-07-1908
MONOGHAN v. COLLINS et al.
William M. Jamieson, for complainant. Martin P. Devlin, for defendant Margaret A. Collins.
Bill by Michael Monoghan, executor of the will of Patrick Collins, deceased, against Margaret A. Collins and others. Decree for complainant.
William M. Jamieson, for complainant.
Martin P. Devlin, for defendant Margaret A. Collins.
WALKER, V. C. The complainant's testator, Patrick Collins, departed this life June 28, 1907. His will was proved July 16, 1907. In it, after directing his executor to pay all his just debts and funeral expenses, he gave, bequeathed, and devised all his real and personal property absolutely to his wife, her heirs and assigns, forever, provided she remains a widow for the rest of her life, and should she remarry, then he gave, bequeathed, and devised all his estate absolutely to his three sons (by a former wife), their heirs and assigns, forever. He appointed the complainant sole executor of his will, which was dated November 25, 1905. At the time of the publication of this will the testator, who was a saloon keeper, owned a property at the corner of Union and Steamboat streets in the city of Trenton, where he conducted the retail liquor business. This property he sold to David Fineberg in June, 1907. The proceeds of this sale came to the possession of his wife, the defendant, who claims the same as a gift from her husband, and the executor's suit is to compel her to deliver those proceeds to him as the representative of her husband's estate. Long before the sale ofthe property Mr. Collins had suffered a paralytic stroke, and remained an invalid thereafter to the time of his death.
David Fineberg, who purchased the property, testifies that he went to Collins' with the idea of making the purchase, and talked with Mrs. Collins and asked for Mr. Collins, and Mrs. Collins took him into the back room, where her husband was lying on a couch; that he, the witness, tried to have conversation with him, but he was a weak man and referred him to Mrs. Collins, saying he would be satisfied with what she did; he said Mr. Collins was on his feet part of the time, but could not walk. He had to walk alongside of the wall with one hand and with a cane in the other. The price of the property was $6,000. On June 7, 1907, Fineberg made his check to the order of Collins for $1,000, and delivered it to Mrs. Collins. On June 19. 1907, another check for $3,763.25 was made by Lawrence Barden, Fineberg's broker, to the order of the defendant's solicitor. This chock the solicitor indorsed and handed to Mrs. Collins. The check for $1,000 is indorsed by Mr. Collins and by Mrs. Collins. The check for $3,763.25 is indorsed by the solicitor and Mrs. Collins, but not by Mr. Collins. Both checks were deposited to Mrs. Collins' credit with the Trenton Saving Fund Society in a bankbook of hers. At the time Fineberg paid the $1,000 he went to the saloon and asked for possession (which he did not get until he paid the balance), and he said he heard Mrs. Collins ask Mr. Collins what she would do with the money, and he told her to take it and put it in the bank to her own account— she had worked hard for it.
Charles A. Comp, a real estate agent, went to see Mr. and Mrs. Collins about selling a property on Centre street. This was May 24, 1907, and as a result of a conversation with Mrs. Collins which he says he presumes Mr. Collins heard for he was in an adjoining room where he and his wife had talked together in the hearing of Mr. Comp, he delivered to Mr. Collins a receipt, reading that he had received of Margaret Collins and Patrick Collins $10 as a deposit for the purchase of the brick house No. 631 Centre street, for the sum of $4,000, to be free and clear of all incumbrances. On June 7, 1907, a further payment of $100 was made to Mr. Comp, for which he gave a receipt in the names of Patrick and Margaret Collins, in which receipt it was stated that a mortgage on the property of $2,600 was to be assumed, and the balance of the $4,000 was to be paid in cash. Mr. Comp was unable to remember any conversation at all with Patrick Collins.
Julia Donlon, a daughter of Patrick Collins and of the defendant, his second wife, testified that her father started the saloon business about 1899 or 1900 and ran it a year or so, but gave too much credit and became Involved in about $500 of debt; after that the business was taken in charge by her mother, and she and her mother together kept the books; that in August, 1901, her father was taken sick, "had a stroke," as she put it, and that his illness lasted until his death. She did say that, while the paralysis affected him from the waist down, above the waist his condition was perfect. She further testified that after the will was made her father told her mother and her of its contents, and named the executor he had appointed, and her mother asked him if he could not get some one else (she apparently disliking Mr. Monoghan), and he said it could be changed, that he was not going to die right away, and, being asked how he intended to change it, he said that he intended to sell the place and when he sold it he would give her the money, and then her mother seemed satisfied. At the time Mr. Comp was at the place about the Centre street property she, the witness, said she heard Mr. Comp ask whose name was to go in the receipt, and her father said both names; and, when Mr. Comp asked how the property was to be paid for, her mother said by cash, her father being within hearing, and his hearing being perfectly good. When her father indorsed the check for $1,000, he, according to the witness, handed it to her mother, and said: "take this check, and when you get the rest clear the Centre street property, put the rest of the money in bank in your own name, and you will always have a home; we don't know what time the children are going back on us, and it won't be hard for us to live if our house is clear." On another occasion she says she heard her father say to her mother: "Take the money and put it in your own name, for you earned it; put it in your own name and nobody can touch it." On one occasion, when her father and mother were discussing the purchase of the Centre street property and the sale of the saloon property, she heard her father say to her mother: "Take that money and clear it off, and when we have a shelter it won't be hard for us to get a bite to eat; and put the rest of the money in your own name in bank, because you can't say when the children will go back on us." She also said she heard her father say, when he sold the Union street property, that that would leave Mr. Monoghan nothing to do as executor.
This, as I understand it, is the testimony upon which the defendant relies to establish a gift from her husband to her in his lifetime of the proceeds of the sale of the saloon property. It should be mentioned that the license was in the name of Mr. Collins, and that the bills were contracted in his name. It is true that Mrs. Collins actually ran the business, hiring the help, paying the bills, and working herself, including bartending. This did not make the business hers. It was started by her husband and conducted by him, at least for some time. Mrs. Collins simply did what every faithfuland dutiful wife would do, if she were able; that is, ran her husband's business after he became incapacitated by disease.
On June 7, 1907, a formal agreement for the purchase of the Centre street property was entered into, and although it was, as is usual, written to be executed by both parties, it was signed only by the owners. It was in the names of Margaret and Patrick Collins. Their attorney, before its delivery, changed the provision for the payment of the balance of the $4,000 in cash upon the delivery of the deed to an undertaking on the part of the grantees to assume the payment of a mortgage for $2,000 on the premises, the difference to be paid in cash. The reason for this was that David Fineberg had been unable to raise the balance of the purchase-money required to be paid by him upon the purchase of the saloon property. The deed for the Centre street property to Margaret and Patrick Collins, although dated on the day of the agreement June 7, 1907, was not delivered for some time afterward, as it had to be sent to Minnesota to procure an acknowledgment. It was offered in evidence, and contains an assumption of the $2,000 mortgage just mentioned. The difference between that amount and the purchase price of $4,000, namely, $1,400, was paid in cash. It is perfectly apparent that Patrick Collins intended to purchase, and did purchase (in the joint names of himself and wife), the Centre street property out of the proceeds of the sale of his saloon property. His intention was to spend $4,000 out of those proceeds in that way. Assuming that the placing of the title to the Centre street property in the joint names of his wife and himself was his own volitional act—and I must assume it was, for the contrary is not proved— the transaction of itself is an absolute refutation of the idea that he made a gift of the proceeds of the sale of the saloon property to his wife. She does not claim a gift of the balance between the price of the Centre street property, incumbered or unincumbered, but a gift of the entire proceeds of the sale of the saloon.
But, Irrespective of the force and effect of the purchase of the Centre street property as negativing any gift of the proceeds of sale of the saloon property to the wife, the facts relied upon by her to show such gift, in my judgment, entirely fail to substantiate her claim. In Haydock v. Haydock, 34 N. J. Eq. 570, 38 Am. Rep. 385, Mr. Justice Reed, speaking for the Court of Errors and Appeals, said, at page 574 of 34 N. J. Eq. (38 Am. Rep. 385), that if it be admitted that the donor was a person who possessed sufficient mental power to make a gift, yet it was upon the recipient of the gift to show the fairness of the transaction; all the evidence showed that the wife was the one upon whom he naturally leaned, and he submitted himself to the control of her who naturally and necessarily became the head of the house; while they so lived together, and while none but the wife and her brothers were about him, without the advice of disinterested counselors, the old man made the gifts of which she was the recipient. How entirely parallel the case at bar is to that of Haydock v. Haydock. Collins was a man of some years and feeble in body, and his mind, though not dethroned, was undoubtedly susceptible of domination. His wife was the one upon whom he naturally leaned, and he certainly submitted himself to her control, and while living in the house with her and their daughter, and without the advice of disinterested counsel, he is said to have made the gift which stripped him of all his worldly possessions, without the power of recall.
Where parties are in a 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, 34 N. J. Eq. 570, 575, 38 Am. Rep. 385. The case of Slack v. Rees. 66 N. J. Eq. 447, 59 Atl. 466, 69 L. R. A. 393, absolutely controls this case in this regard. In that case it was held that the rule that a deed of gift containing no power of revocation will be set aside where a relation of trust and confidence exists between donor and donee, and the donor has no independent advice as to the effect of the deed upon his own interest in the subject-matter of the gift, applies to an irrevocable conveyance made by an aged and infirm father, without independent and competent advice, to a daughter with whom he lives and upon whose care his well-being depends. Now, in the case under consideration, if Patrick Collins had sought to bestow the saloon property upon his wife by a solemn conveyance of the title under the forms of law, it would certainly be set aside by this court, unless it could be shown that he had independent and competent advice as to the nature and effect of the gift he was to make. Surely the gift of the proceeds of the sale of that property in the most informal manner, namely, by mere word of mouth, must be set aside for the same reason, in the face of his decrepitude and position of dependency upon his wife, which is so apparent. Furthermore, the language relied upon as establishing the gift from husband to wife in this case does not in my judgment bear the interpretation put upon it by counsel for the defendant. There is no clear-cut, unambiguous, and unequivocal declaration of a gift, but statements made which are equally, if not more, susceptible of an intention to retain the property than to give it away. True it is that Fineberg said that the deceased, in answer to a question by his wife as to what she should do with the money, said: "Take it yourself and put it in the bank to your own account; you worked hard for it." This was no declaration that he gave the moneyto his wife as and for her sole and individual property. The language is entirely consistent with a desire on his part that she should be the custodian of his money. And it is true, doubtless, that she worked for it, helped earn it, by running his business through her devotion to him. How she helped earn It, however, does not appear. It may be that through her management his business prospered and he was thereby enabled to pay off some mortgage or discharge indebtedness otherwise incurred, or perhaps it was that her efforts prevented a failure in business and consequent loss of the property through that sort of misfortune. She was, of course, interested in the fund, and they both reasonably expected that she as well as he would get a living from it, at least in part. This assertion is not mere speculation, for the daughter testifies that her father said to her mother: "Take that money and clear it off (meaning, doubtless, the mortgage on the Centre street property), and when we have a shelter it won't be hard for us to get a bite to eat; and put the rest of the money in your own name in bank, because you can't say when the children will go back on us." In one only of the statements which the daughter says she heard her father make did he not include himself in the mention of the money. The statement was this: "Take the money and put it in your own name, for you earned it; put it in your own name, and nobody can touch it." Now, if nobody could touch it, certainly the wife could not touch it for the purpose of consuming it as her own. Even if this statement, standing alone, would be sufficient evidence of the gift said to have been made, it cannot be so used, because it must be read in connection with other statements made by the deceased to the same witness, and which other statements, as seen, disclose no gift, but rather an intention to retain control over his money. Smith v. Burnet, 35 N. J. Eq. 314, was a case in which an executor claimed certain shares of stock by way of gift from his deceased testator; the proof adduced to support the claim was the testimony of a witness who had heard the deceased say that he had given the stock to the executor. Mr. Justice Reed, speaking for the Court of Errors and Appeals, said, at page 324 of 35 N. J. Eq., that the word "give" is often used with other meaning than as evincing an intent to confer the title in the thing delivered (giving instances in which the word may be otherwise used); and he well says that this view, together with the difficulty of recalling or stating with accuracy all that was said, and how it was said, should cause such a declaration to be closely scrutinized before a title is passed solely upon such evidence. The defendant did not discharge the burden which the law casts upon her of showing the fairness of the gift in question, nor did she show that the donor had competent and independent advice in the making of it. For these reasons the gift fails.
There was another question presented on the argument by counsel for the defendant, and that is whether, if the gift failed, the executor should not be charged with the duty of paying the mortgage upon the Centre street property which was assumed in the deed of conveyance. The rule, as I understand it, is that land incumbered by a mortgage, the payment of which is assumed by the grantee in the deed of conveyance therefor, is not to be paid by the executor of the grantee in favor of the heir or devisee, unless the decedent shall have assumed the debt in such manner as to show an intention to charge his personal estate. Mount v. Van Ness, 33 N. J. Eq. 262; McLenahan v. McLenahan, 18 N. J. Eq. 101; Campbell v. Campbell, 30 N. J. Eq. 415; De Grauw v. Mechan, 48 N. J. Eq. 219, 223, 21 Atl. 193; Hetzel v. Hetzel (Ch., October term, 1908, not yet reported), 71 Atl. 755.
If the defendant is entitled to have this mortgage paid by the executor in exoneration of the land, so that she can enjoy the premises which are now hers (by virtue of her survivorship of the tenancy by the entirety which was in her and her husband during his lifetime), the relief can only be afforded upon a cross-bill, and there is no such pleading in the case. I will hear counsel for the defendant upon notice to the complainant, on an application for leave to file a cross-bill, raising this question, if he so desires. In the present posture of the pleadings it is impossible to grant the defendant any affirmative relief.
There must be a decree for the complainant adjudging her to hold the balance of the purchase money received upon the sale of the saloon property as trustee for the complainant as executor of the will of her husband, and requiring her to turn over those moneys to him, and requiring the defendant the Trenton Saving Fund Society to honor the check of the defendant to be made in pursuance of the decree.