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Monoghan v. Collins

COURT OF CHANCERY OF NEW JERSEY
Feb 4, 1909
72 A. 109 (Ch. Div. 1909)

Opinion

02-04-1909

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, in which the defendant named filed a cross-bill. Decree for defendant on the cross-bill.

See, also, 71 Atl. 617.

William M. Jamieson, for complainant. Martin P. Devlin, for defendant Margaret A. Collins.

WALKER, V. C. In my conclusions heretofore filed in this cause, I said that there was a question presented on the argument as to whether the executor of Patrick Collins, deceased, should not be charged with the duty of paying the mortgage upon the Centre street property which was assumed in the deed of conveyance therefor made to him and his wife, but that such relief could only be afforded upon a cross-bill, and, as there was no such pleading in the case, I said I would hear counsel on an application for leave to file a cross-bill. That application has been made and granted, and a cross-bill has been filed for the purpose of properly raising the question, to which a replication has been put in, and the issue thus raised has been fully argued on the testimony taken at the hearing of the cause, and will now be decided.

The facts upon which Mrs. Collins relies for relief on this branch of the case were set forth in my former conclusions. Succintly stated, they are these: On May 24, 1907, Mr. Comp, a real estate agent, went to see Mr. and Mrs. Collins about selling a property on Centre street, Trenton. As a result he gave Mr. Collins a receipt for $10 as a deposit on the purchase of the house "for the sum of $4,000.00, property to be free of all incumbrance." On June 7, 1907, a written agreement for the sale to the Collinses by the owners of the Centre street property was made and delivered. It was drawn to be executed by both parties, but was signed only by the owners. In the form in which it was presented to the attorney of Mr. and Mrs. Collins, it recited the sale of the Centre street property for $4,000, to be paid thus: $100 upon the signing of the agreement, and the balance, $3,900, upon the delivery of the deed and searches. The attorney for the Collinses added to the provision for the payment of the purchase price that payment was to be made as follows: "By assumption of the payment of a mortgage upon said premises in the principal sum of $2,600.00; $1,290.00 to be paid on the delivery of the deed; $10.00 having been previously paid." At the same time a receipt was given by Mr. Comp, agent for the owners, which certified that he had received of Patrick and Margaret Collins $100 on account of the purchase, the balance payable by assumption of mortgage on the property, $2,000, and cash upon delivery of deed $1,290; $10 being previously paid. The agreement for sale, which, by and through the action of the attorney for the Collinses varied the terms of payment originally agreed upon, was changed because David Fineberg, who had purchased the saloon of Mr. Collins for $6,000 and had paid $4,763.25 on account in cash, was unable to raise the balance of the purchase money required to be paid by him upon the purchase of the saloon property, namely, $1,236.75 and, as Mr. Collins had to discharge a mortgage on his saloon property in order to make good title to Fineberg, it became impossible for him to pay the entire purchase price of the Centre street property in cash, and necessitated the temporary assumption of the mortgage existing upon those premises. When Fineberg made his first payment of $1,000 on the saloon, which was by check to Mr. Collins, he (Collins) indorsed it and handed it to Mrs. Collins and told her to take it and when she got the rest to clear the Centre street property. On another occasion, speaking of the purchase of the Centre street house and the sale of the saloon property, Collins told his wife to take the money and clear it off, meaning the Centre street property.

As I said in my former conclusions, 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. He not only told his wife to pay the mortgage off, but put her in funds to be applied for the purpose. That she afterwards claimed those funds as a gift cannot opernte to defeat his purpose. She cannot be penalized in the premises.

Counsel for the complainant contends that where a person takes a conveyance of land subject to a mortgage, and assumes the mortgage as part of the consideration for the conveyance, he does not thereby make the debt his own so as to charge it upon his personal estate, and he cites Cumberland v. Codrington, 3 John. Ch. (N. Y.) 229; Mount v. Van Ness, 33 N. J. Eq. 202; McLenahan v. McLenahan, 18 N. J. Eq. 101; Campbell v. Campbell, 30 N. J. Eq. 415; Hetzel v. Hetzel (October term, 1908, not yet officially reported) 71 Atl. 755. The law, as adjudged in these cases, undoubtedly is that where one purchases real estate subject to a mortgage, and assumes the mortgage as part of the consideration for the purchase, the heir or devisee cannot call upon the personal representative to exonerate the land from the burden of the mortgage out of the personal estate of the grantee decedent, but that, if the purchaser assumes the mortgage in such a way as to indicate an intention to make the debt his own, then the personal estate must respondand doubtless the intention must be clearly expressed. Strictly speaking, as I understand it, these cases do not apply to the case at bar. This is not a suit by the heir or devisee to compel an exoneration of the lands descended or devised from the lien of a mortgage, but it is a suit by the owner of property which was owned by her and the deceased as tenants by the entirety during the lifetime of the deceased, and which by his death passed to her by right of survivorship, and is somewhat analogous, I take it, to Collins v. Babbitt, 67 N. J. Eq. 165, 58 Atl. 481. In that case Vice Chancellor Pitney held that where a husband received the rents of property owned by himself and wife as tenants by the entirety, and declared that when those rents amounted to a certain sum he would have them applied on the mortgage on the property, the wife, upon surviving the husband, was entitled to have the rents so accumulated, although they amounted to less than the sum specified, applied on the property, or otherwise, as she might direct. This was not because the wife had loaned her husband money in his lifetime, which she had done, for the vice chancellor decreed that the moneys so loaned should be paid back, and this was irrespective of the application of the rents toward the discharge of the mortgage. The vice chancellor says, at page 176 of 67 N. J. Eq., at page 485 of 58 Atl.: "The application of the rents to the reduction of the mortgage was a proper and equitable disposition of them and just to both parties, and upon the whole case I am led to the conclusion that the wife had a right, under the circumstances, to conclude that her husband would so apply them, and that she permitted them to be retained by him for that purpose. She therefore had the right in his lifetime to have those moneys so applied. It follows that when she survived him, and the whole estate became vested in her, she had the right to have the amount so accumulated in his hands applied by his personal representative as she should direct." In this connection it is proper to state that the wife in Collins v. Babbitt permitted her husband to keep her share of the rents with his share, and it was out of the entire accumulation of those rents that payment was to be made upon the mortgage. However, I do not understand that the case was decided on the theory that there was any contract between the husband and wife, for which the share of the rents which was hers, and which were retained by him, formed the consideration. It is not so stated in the opinion, and, on the contrary, the decision, as I understand it, proceeds upon the ground that the intention of the deceased husband with reference to the property, which the wife has an interest in having carried out, should be carried out.

The purchase by Mr. Collins of the Centre street property was as much a part of his plans as was the sale of his saloon property. He was decrepit at the time and could no longer run his business (in fact, had not actively operated it for some time), and he desired to have a home in the place of the one he was leaving. His wife was cognizant of his intention to purchase the Centre street property, without any incumbrance upon it, out of the proceeds of the sale of the saloon property. She was not a party, at least not actively a party, to the change in the terms for the purchase of the Centre street house. Doubtless part of the inducement to her to sign the deed for the saloon property was the acquisition by her husband and herself of the Centre street house upon the terms agreed upon with the agent, namely, cash and no incumbrance. She had no independent means, and, if the contention of the complainant is to prevail, she will now own the Centre street property subject to $2,600 of incumbrance, when she could have refused to have taken title with her husband upon any such terms; that is, upon terms which made her assume the mortgage along with him. But if Cumberland v. Codrington and the other cases above mentioned apply in full force, still I think Mrs. Collins is entitled to prevail, because the acts and declarations of Mr. Collins, aside from the documentary evidence, show a clear intention on his part to purchase the Centre street house out of the proceeds of the sale of the saloon free from incumbrance, and Mrs. Collins has such an interest in the property that she is entitled to have that intention effectuated and carried out.

The result reached upon this branch of the case is that the complainant, as executor of Patrick Collins, deceased, must be decreea to pay and satisfy the mortgage on the Centre street property out of the proceeds of the sale of the saloon which is to come to him from Mrs. Collins upon the adjudication against her upon the other feature of the case, namely, her claim that the whole proceeds of the sale of the saloon property were a gift from her husband to her.


Summaries of

Monoghan v. Collins

COURT OF CHANCERY OF NEW JERSEY
Feb 4, 1909
72 A. 109 (Ch. Div. 1909)
Case details for

Monoghan v. Collins

Case Details

Full title:MONOGHAN v. COLLINS et al.

Court:COURT OF CHANCERY OF NEW JERSEY

Date published: Feb 4, 1909

Citations

72 A. 109 (Ch. Div. 1909)