Opinion
04-24-1936
OCHS v. OCHS et al.
Grosso & Anderson, of Orange, for complainant. Kraemer, Siegler & Siegler, of Newark, for defendants George Ochs et al. Isidor Kalisch, of Newark, for guardian ad litem of Herbert Otto Ochs. Wallace P. Berkowitz, of Jersey City, for defendants William Ochs et al.
Suit by Nettie Ochs, executrix of Otto Ochs, deceased, against George Ochs and others for specific performance of an agreement to devise lands.
Decree for complainant.
Decree affirmed by the Court of Errors and Appeals, 192 A. 507.
Grosso & Anderson, of Orange, for complainant. Kraemer, Siegler & Siegler, of Newark, for defendants George Ochs et al. Isidor Kalisch, of Newark, for guardian ad litem of Herbert Otto Ochs. Wallace P. Berkowitz, of Jersey City, for defendants William Ochs et al.
BUCHANAN, Vice Chancellor.
This is a suit for the so-called "specific performance" of an agreement to devise lands. Gottlieb Ochs (Sr.) made an agreement with his son Otto Ochs to devise to the latter a certain homestead farm or tract of about 7 acres and the buildings, machinery, and equipment thereon, situate in Livingston, N. J. Gottlieb Ochs died testate, but by his will instead of devising the tract in question to Otto Ochs, he directed his executors to sell the tract of land and to pay to Nettie Ochs (the widow of Otto Ochs) 25 per cent., and to Herbert Otto Ochs (the son and only child of Otto Ochs and Nettie Ochs) 15 per cent., of the proceeds of sale.
Otto Ochs had predeceased the testator by about 3 years; and left a will duly probated wherein he gave and devised his entire property in two equal shares, one to his wife, Nettie Ochs, absolutely, and the other to her in trust, to pay to herself the income therefrom during her life or widowhood and the remainder at her death or remarriage to her son Herbert Otto Ochs absolutely; his wife was also made executrix.
The wife prays that the tract in question be decreed to be held in trust by defendantsfor her and that the defendants be decreed to convey the same to her.
The agreement in question was made May 1, 1914, as a part of an agreement of lease from Gottlieb Ochs to the son Otto, of the premises in question. The lease specifies that it is "for the term of years from the first day of May, 1914, until my decease, for the yearly rent of $150 payable quarterly in advance"; the lessee is to pay all taxes and insurance premiums; the lessor reserves for his own use and occupancy one room on the first floor of the house and two rooms on the second floor, and a portion of the cellar, and also reserves the right for another son, Philip, to use and occupy the home and premises "until the new house is built which I am now commencing"; the lessee is to furnish the lessor with necessary wood and coal to heat the rooms reserved by the lessor, during the life of the lessor.
The clause comprising the agreement to devise is as follows:
"and the said party of the first part agrees that he will make his last will and testament dated this day and give and bequeath to the party of the second part, Otto Ochs, the premises hereby leased, subject to a payment to my executors, and (sic.) amount mutually understood and agreed upon by both parties."
The agreement was executed and acknowledged by both parties on May 1, 1914, and was recorded in the county clerk's office on November 5, 1914.
It is proven and uncontradicted that the tract in question was a part of the homestead farm or tract owned by Gottlieb, Sr., and consisting of about 29 acres, on which Gottlieb, Sr., lived and which he farmed, and on which he carried on a business of a cider mill and of a saw mill; that there was a dwelling house, barn, cider mill, and saw mill with equipment and machinery on the premises; that Gottlieb, Sr., was 82 years old at his death, January 12, 1932, and hence was 64 years old at the time of the making of the lease agreement; that his son Gottlieb, Jr., had been in his father's employ in the running of the farm and a cider mill and saw mill, but left that employment because his father would not pay him as much wages as he desired; that the father thereupon procured his two sons Philip and Otto to leave the employment which they had at the time and come and work on the farm, and made an agreement with them that if they would do so and work without pay he would divide the farm into two parts, one of about 7 acres with the house, barn, cider mill, and saw mill, etc., and the other a farm tract of about 22 acres, and that eventually Otto should have the small tract and Philip should have the large one; that Philip and Otto were the youngest boys in the family of eight boys and two girls, Otto being younger than Philip; that Philip and Otto did come to the farm and work it with their father, in accordance with this arrangement, commencing about 1902 when Philip was about 18 years old, without any compensation, until their mother died, about 1910, at which time the father and two sons formed a partnership in the running of the farm and the cider and saw mill businesses, and that continued until 1914 when Otto wished to get married, and then the father and the two sons agreed as to the division of the farm into the two tracts which were to be taken over and operated by the two boys, respectively, they to pay the taxes and insurance, and each to pay the father $150 as long as the father lived, and at his death to pay each of the other children of Gottlieb, Sr., $250, and Philip and Otto were to become the owners of the respective tracts.
At that time, the written lease agreement was made; Otto married Nettie Ochs on September 9, 1914, and went to live on the 7-acre tract; from that time on, the agreement was fully carried out by both Otto and his father until the latter's death; the tracts were divided and respectively occupied by the two boys; and Otto and his wife carried on the cider mill and saw mill business on the 7-acre tract, and in the course of those years made many repairs and many improvements and additions, in the course of all of which they expended a very considerable sum of money, something like eight or nine thousand dollars. These improvements and additions included the drilling of a well, building of a well house, installing a gasoline engine and tank, and piping the house for water, installation of sinks, wash tubs, bath tubs, and other like fixtures, replastering rooms, papering and painting the entire house, shingling the outside of the house, putting on a new roof, installing a new stairway, altering and improving the porch, digging a new cellar, installing steam heating plant and radiators in the house, putting new sills at the bottom of the house, wiring it for electricity and installing electric fixtures, installing a new scale, enlarging the cellar of the cider mill,repairing that building and putting on a new roof and constructing a concrete floor, making similar improvements on the barn and on the corn house, and making a garage out of a shed, installing a new steam engine in the saw mill, installing electric motors in the cider mill, saw mill, and the pump house, putting in top-soil on the grounds, improving the roadways and building two bridges on the driveways, replacing the orchard with new apple, plum, and pear trees, putting in new windows and doors in the house, and the like.
In short, Otto and his wife used and improved the tract during all this time' in every way as their own, except that the father continued to live there in accordance with the arrangement; the father had the two tracts divided and arranged that they should be taxed separately and the bill sent to the respective two boys, and on numerous occasions in speaking to neighbors about the improvements which Otto was making spoke of the place as being Otto's place, or words to that effect.
Shortly after the old man's death, Otto's widow tendered the $2,000, being the eight payments of $250 for each of the children other than Philip and Otto, and requested a conveyance of the tract, and this being refused, commenced the present suit.
The defendants Gottlieb Ochs, Jr., George Ochs, and Lizzie Beck are the executors of Gottlieb Ochs, Sr., They and a number of the other children resist complainant's right to decree. Their contention is that the contract is not within the statute of frauds because the price to be paid by Otto was not reduced to writing and signed by the father; they further contend that the parol agreement relied upon to take the case out of the statute of frauds has not been sufficiently proven; that whatever interest Otto had in the farm under the written agreement lapsed on the death of Otto previous to the death of his father; and that the will of the father Gottlieb gives legacies to Otto's widow and son which they have not renounced, and hence that they cannot maintain this claim against the will.
The latter contention seems clearly without weight. It is true that beneficiaries under a will, if they take gifts under the will, are thereby precluded from asserting claims against the will; but in the instant case the complainant, even if she has not renounced or disclaimed the provisions in the will in her behalf, has asserted her rights as against the will and has done nothing in the way of accepting or indicating any acceptance of the benefactions to her under the will. Moreover, nothing which she could do, could prejudice the right of the infant son, and no acceptance under the will can be presumed against him.
The contract, of course, does not come within the provisions of the statute of frauds, but the facts and circumstances shown are clearly sufficient to take the case out of the statute and permit proof by parol. It is difficult to conceive of a case where the evidence to this effect could be stronger. There has been full, complete, and long continued performance by the vendee; to permit the interposition of the statute would be to permit a very great fraud upon the vendee and his successors in interest. The work done and the moneys spent by the vendee and complainant in reliance on the contract raise a complete estoppel against the defense of the statute of frauds.
The parol proof as to the missing item in the written contract, the amount to be paid by the vendee, is completely satisfying to the court. The manner and appearance of the witness Philip, and the character of his testimony, were all such as to inspire confidence and belief. If his testimony in that behalf had been fabricated, the natural testimony for him to have given, in view of the language of the clause in the contract, would have been as to a single sum agreed on as "a payment to my executors (of) an (d) amount mutually understood and agreed on by both parties." Moreover, there is extremely strong corroboration of the truth of his story from the fact that there was no cross-examination of him whatever by defendants, and no attempt by defendants to contradict his testimony nor the testimony of any of the other witnesses for complainant, on any point except the single question of the present value of the premises. From those facts, together with the curious and unexplained circumstances of the "death-bed" will of the vendor (circumstances within the knowledge of defendants and not of complainant), and the failure to introduce the prior will made by him, it is impossible to escape the conclusion that the defendants were all perfectly aware of the contract which had been made so long ago and so continuously carried out, and that their objections to the claim of complainant are based chiefly, if not entirely, upon dissatisfaction arising out of an idea that the amount to be paid by thevendee was now too low in view of their notions as to the present value of the property.
As to this latter, the court is entirely satisfied that the "purchase price" was entirely fair and adequate when made, and that it has not become otherwise by any subsequent developments. Defendants contend there was no consideration for the promise to devise. Of course, there was consideration; that promise was a part of the entire lease contract; and, moreover, that lease contract, including the promise to devise, was the carrying out of the previous understanding and agreement whereby Otto came and worked for his father originally without pay. The annual rent under the lease was not large, but neither was it unduly small, especially in view of all the other circumstances. Otto had to pay the taxes, insurance, repairs, and other upkeep, supply his father for life with the several rooms in the house and the wood, and the property which was the subject of the lease, and the business he took over, were in their then condition partly as the result of his work without pay. The money he earned from the business, and with which he made the subsequent improvements on the property, were not (except in very small part) the usufruct of the father's property, they were the result of the work, efforts, and labor of Otto and his wife.
Defendants argue that the language of the clause means a price or amount mutually to be understood and agreed on by and between the father's executors and the son; that if the price had been agreed upon between father and son, the language of the clause would have been "an amount mutually understood and agreed on by us," because the clause earlier uses the first person, "my executors." There is no force in this argument; as is shown by the language just a little earlier in the clause, that "the party of the first part" (the father) agrees that "he will make," etc.
The contention that there was "a lapse" of the devise or agreement to devise, by reason of Otto predeceasing his father, merits somewhat greater consideration, but the court is not able to concur in the conclusion argued by defendants. True it is that the rights of the parties (under the conclusion reached by the court on the other phases of the case) must be based on what they would have been or would be if Gottlieb Ochs had performed the promise in question, on the postulate that he left a will containing provisions in accordance with that promise, to wit, devising to Otto the premises in question (subject to the payment, etc.).
Assuming that he did leave such a will, executed prior to Otto's death, what would be the result in view of Otto's death prior to that of the testator? At first blush it would seem that under section 22 of the Wills Act (4 Comp.St.1910, p. 5866, § 22) the title would vest in Otto's son; and it was with that thought at the original trial that the court directed the son to be made a party and to have a solicitor assigned actively to represent his interest.
The contention of the other defendants, that the further provision of section 22 of the Wills Act (providing that the vesting of the lapsed devise in the descendants of the devisee shall not occur when the testator has otherwise directed with regard to such descendants) operates in the present instance (by reason of the gift made by Gottlieb in his will to Otto's son) to prevent the vesting in Otto's son and to result in the actual lapse which would be the result at common law in the absence of any such statute as that section 22, cannot be accepted for two reasons. First, the benefaction to Otto's son is not contained in a will which devises the premises to Otto, and it cannot be presumed that that gift to Otto's son would have been made by Gottlieb if he had made the devise to Otto. Second, the contract did not provide, and it clearly was not the intent of the parties, that the devise to Otto was to be contingent and conditional upon Otto's being alive at his father's death. The contract was essentially one of purchase and sale, whereby Otto bought the property, with an obligation to pay further and future portions of the purchase price and the conveyance to Otto was to occur at the father's death. Otto therefore had an equitable interest in the property which could not equitably be disposed of by the father otherwise than by Otto's consent or in accordance with Otto's directions.
Otto, as vendee, became the equitable owner of the property, subject to his obligation to make the further payments. That equitable interest he had the right to dispose of by his will. His father had no right to dispose of it otherwise than in accordance with the provisions of Otto'swill (or in accordance with some other valid direction or assignment by Otto, if there had been such). A devise to Otto in Gottlieb's will would not be a performance of the contractual obligation, if made simply to Otto and subject to the operation of the law affecting devises which are voluntary and not the carrying out of legal or equitable obligations. Under the circumstances, there is necessarily to be implied in Gottlieb's contract the provision that he would devise to Otto "or to those to whom Otto may direct"; and that is the devise which must equitably be assumed to have been made, under the equitable doctrine that equity considers as does that which ought to have been done.
The determination in Young v. Young, 45 N.J.Eq. 27, 16 A. 921, while differing in unimportant details, is precisely the same in principle as that herein set forth.
Complainant is entitled to decree for the conveyance to her of the interests in the property in accordance with her husband's will. The decree will, of course, also provide for the conveyance to the son, of the interest given to him by that will; and will provide that complainant pay to the defendant executors the $2,000 (heretofore tendered) less the payments of rent made by complainant subsequent to Gottlieb's death.
The defendants in their briefs make the objection that the answers allege that a material part of the agreement alleged in the bill was not in writing and set up the statute of frauds, and that the replications are simply of the usual formal type, and hence under the pleadings it was not open to complainant to prove by parol any agreement as to the "amount mutually understood and agreed upon." Of course, the allegata and the probata should correspond; but this objection is purely technical in the present instance. No specific objection in this behalf was made at the trial. If it had been, leave would have been granted, and will now be granted, for complainant to file a special replication setting up the performance of the oral part of the agreement and that by reason of such performance defendants are estopped from relying on the defense of the statute of frauds. This should be done before entry of final decree. No prejudice results to defendants, there was and is no surprise. The oral testimony was admitted at the original trial; no surprise was pleaded; no request was made for opportunity to submit evidence to the contrary; full opportunity was afforded to defendants to submit any such evidence at a subsequent hearing (after the addition of the other parties), but they agreed to submit the case without any additional evidence.