Opinion
11-04-1901
WILSON v. HOFFMAN et al.
George J. Bergen and Charles H. Pile, for complainant. George A. Bourgeois, for defendants Cladd & Sons. Clarence L. Cole, for defendants Hoffman and others.
(Syllabus by the Court.)
Bill by Effie C. Wilson against Samuel D. Hoffman and others. Dismissed.
This bill in this case is filed by the complainant, seeking to have certain deeds conveying two tracts of land situate on Virginia avenue, in Atlantic City, known as the "West Park Hotel Property," declared to be void and inoperative as against the complainant's equitable title to those lots, and that the defendant Hoffman, who is the present holder of the legal title under those deeds, may be compelled to release his apparent interest, and to convey the same to the complainant, accounting for rents, etc., and that certain judgments and attachments held by other defendants may be decreed to be void and inoperative as against the complainant's equitable title. The bill of complaint alleges that on December 23, 1895, one Lizzie Sickels owned the two lots in question; that she and her husband, for the consideration of $18,500, agreed to convey them to one Emma V. Hartley, her heirs and assigns, which agreement was acknowledged in due form of law by Mrs. Sickels and her husband, and was recorded in Atlantic county clerk's office on February 1, 1896; that Emma V. Hartley and Haworth W. Hartley on April 28, 1897, entered into an agreement in writing with the complainant, Miss Wilson, whereby, for the consideration of $16,000, Mrs. Hartley agreed to convey the two lots to the complainant, which agreement was duly acknowledged and recorded in Atlantic county clerk's office on May 28, 1897. The bill further alleges that the complainant, Miss Wilson, having performed in all things her part of said agreement, the said Lizzie Sickels, together with John E. Sickels, her husband, on May 2, 1899, conveyed all their title and interest in said lands to the complainant, which deed is intended to be recorded. The bill of complaint further alleges that Mrs. Sickels and her husband at the time of the making of their agreement with Mrs. Hartley, on December 23, 1895, resided in Pennsylvania, and that the complainant herself has always resided outside of the state of New Jersey; that after the making and recording of the above-named contract, whereby Mrs. Sickels agreed to convey the two lots on Virginia avenue, the defendants Valentine Cladd, and others, on February 12, 1896, issued a writ of foreign attachment out of Atlantic circuit court against Mrs. Sickels, as a nonresident debtor, and attached the two lots on Virginia avenue, and returned the same, with an inventory and appraisement in the said court; that a number of applying creditors were admitted as defendants in said attachment, whose claims were audited and reported to said circuit court in said attachment suit, and that on December 2, 1896, judgment in that suit was ordered to be entered against the said Lizzie Sickels for the sums reported by the auditor; that on March 1, 1897, by further proceedings in said attachment suit the two lots on Virginia avenue were sold by the auditor in attachment to one Abel E. Babcock, and a deed for the same was made on March 9, 1897, to Babcock by the auditor, for the consideration price of $910; that on March 20, 1897, Babcock and his wife conveyed all their Interest in the lots to the defendant Samuel D. Hoffman, by deed of that date, under which he has entered into possession of the premises, and has since received the profits thereof. The bill further alleges that the debts sued for by the plaintiff and applying creditors in the attachment suit were not the debts of said Lizzie Sickels; that she owed nothing to the said parties; that she had neither notice nor knowledge of the attachment suit until the day of the auditor's sale, when, by telegram, she was informed that her property was to be sold on that day,—too late for her to take any steps to protect It Thecomplainant charges that the attachment proceedings were fraudulently concealed from her by the said parties; that she had a good and legal defense thereto, of which she has been deprived without due process of law; that the sale under said attachment was for an inadequate price,—much less than the lots were worth at that time—subject to incumbrances to the amount of $8,000; that the real purchaser at the attachment sale was not Abel E. Babcock, but the defendant Samuel D. Hoffman, who used Babcock's name as a cover; and that there was no consideration for Babcock's deed to Hoffman. The bill further alleges that the two lots are subject to two mortgages—the first for $10,000, held by the trustees of Louisa P. Turnhull, and the second by one David M. Hess, for $2,500; that a bill was filed to foreclose the Hess mortgage, which proceeded to final decree, the issuing of execution, and advertisement for sale, but no sale has been actually made; that on April 17, 1897, the said bond, mortgage, decree, and execution were assigned to one James Hoffman; that said assignment has not been recorded, and that James Hoffman really holds that mortgage and decree for the defendant Samuel D. Hoffman; and that they threaten to use those proceedings to sell the lots if the complainant takes any steps to set aside the attachment sale. The prayer of the bill asks for answer from the defendants Samuel D. Hoffman, Currie Hardware Company, Somers Lumber Company, and V. Cladd & Sons, and others, under oath, and from the defendant Lizzie Sickels without oath, for a discovery as to the purchase by the deeds to Babcock and Hoffman'; that the attachment proceedings, and the deeds thereunder made to Babcock and to Hoffman, may be decreed to be fraudulent and void and be set aside, and that Hoffman may, because of the alleged fraud, be decreed to convey the lots in question to complainant, and may account for the rents; and that James M. Hoffman may be restrained from selling the lots under the Hess foreclosure suit. The defendants V. Cladd & Sons file their answer under oath, as invited by the bill. They deny that Mrs. Sickels had no notice of the attachment suit, and aver that she was repeatedly notified thereof, and that entry of judgment in that suit was several times delayed by them in order to enable her to satisfy their claim. They deny any fraudulent conduct and all concealment of the attachment proceedings from Mrs. Sickels, and say that all the legal notices thereof were duly published, and that at her request, before entering judgment therein, certain lands of Mrs. Sickels in Atlantic City were by them released from the lien of the attachment; and they deny that she has been deprived of the two lots without due process of law. The defendants Samuel D. Hoffman, Currie Hardware Company, and Somers Lumber Company file a Joint and several answer, under oath of Hoffman for himself, and an officer of each of said companies for them severally. The companies both deny all fraud or concealment in any matter touching the attachment proceedings, and say they simply filed their claims as applying creditors under that attachment to collect the amount due them from Mrs. Sickels. The defendant Hoffman answers under oath that he was not present at the attachment sale, and bad no thought of. purchasing the lots. He denies that Babcock purchased for him, or that before the sale he had spoken to Babcock respecting the purchase, or that he knew that Babcock intended to buy, or that he advanced any money to Babcock for that purpose, or that he was in any way interested in Babcock's purchase of the lots. He avers that he bought of Babcock in good faith for a valuable consideration, without notice of any irregularity or fraud on the part of any one in the attachment proceedings; that he actually paid to Babcock the consideration named in Babcock's deed to him. He denies that he has threatened to sell the premises under the Hess foreclosure, as stated in the bill, denies that any one has applied to him for a reconveyance of them, and also denies that the complainant has ever claimed that any fraud has been practiced upon her. He avers that the price obtained at the attachment sale was a fair market value price for the premises. The defendant Hoffman further answers that, when he took his deed from Babcock, Mrs. Hartley and her husband were in actual possession of the premises; that he sued them in ejectment in Atlantic circuit court, recovered judgment by default, and was by the sheriff, by writ under that judgment, put in possession of the premises; that Mrs. Hartley and her husband applied for leave to open the judgment, and to be allowed to plead to the merits; that the circuit court refused to open the judgment, and denied her the right to plead to the action, for want of merits. The defendant Hoffman further answers that after final decree had been entered in the Hess foreclosure suit, and while the premises were advertised to be sold under execution in that cause the complainant filed a petition asking leave to be admitted as a party defendant to that foreclosure; that in her petition she set forth the same agreement with Mrs. Hartley upon which she bases her equity in this present suit, and stated that she was in the peaceable possession of the premises, and had been enjoying them from the time of her alleged pufchase; that, after hearing her application on affidavits submitted, an order was made denying her right as a party defendant. The defendant Hoffman further answers that the complainant In May, 1897, filed her bill in this court to quiet title to the premises in question, making the defendant Hoffman sole defendant, and subpoenas were served, and an answer was filed by the said defendant Hoffman, denying all the material allegationsin that bill, and that since that tiime no further steps have been taken on the said bill to quiet title. The defendant Hoffman further answers, claiming that in the Hess foreclosure suit Mrs. Hartley and husband were parties defendant because of their interest under the Sickels agreement, under which the complainant now claims; that no answer was filed by the parties; and the defendant Hoffman claims that the final decree in the Hess suit has foreclosed any rights which either Mrs. Hartley or the complainant, her grantee, may have had under the Sickels agreement All the defendants join in an averment that the matters set forth in the bill are triable at law, with respect to which the complainant is not entitled to any relief in equity, and pray the same benefit of this criticism as if they had demurred to the bill. Issue was joined on these answers, and the cause came to a hearing on the evidence, etc.
George J. Bergen and Charles H. Pile, for complainant.
George A. Bourgeois, for defendants Cladd & Sons.
Clarence L. Cole, for defendants Hoffman and others.
GREY, V. C. (after stating the facts). The gravamen of the complainant's case, as set out in the bill of complaint, is that the defendants Cladd & Sons fraudulently issued an attachment against Lizzie Sickels, a former owner of the legal title to the premises in question in this suit, based upon a debt not owed by Mrs. Sickles, who owned the property, but by her husband; that the West Park Hotel premises were thus fraudulently attached; that other creditors of the husband fraudulently brought in their claims under the attachment, and that the whole proceeding was for this reason fraudulent and void; that the sale of the premises to Babcock by the auditor in attachment was tainted with the fraud; that Babcock's subsequent sale of the same premises to the defendant Hoffman was also vitiated by the fraud; that both these last-named conveyances are therefore void, and ought to be set aside in favor of the complainant's conveyance of the same premises by the deed of May 2, 1899, from John E. and Lizzie Sickels. The complainant set out in her bill the contract for sale, whereby Mrs. Sickels agrees to convey the premises in question to Mrs. Hartley, and the subsequent transfer of that agreement by Mrs. Hartley to the complainant. The bill is not framed as a bill for specific performance of this agreement, nor was the cause tried on that basis. The bill assumes that Mrs. Sickels has performed her contract to convey, by making the deed of May 2, 1899, conveying the premises to the complainant. It alleges that tbe attachment proceedings against Mrs. Sickels are fraudulent and void; that the auditor's deed to Babcock, and the latter's deed to Hoffman, are also void: and it seeks a decree that the attachment proceedings and those deeds may be declared to be void, thus allowing the deed of Mrs. Sickels to the complainant to pass the title to her, as if no attachment had ever issued, and no deeds had been made under the attachment judgment and sale. At the hearing the complainant claimed that there was fraudulent conduct on the part of the plaintiff and applying creditors in attachment, and that the attachment proceedings were conducted secretly, and so hidden from Mrs. Sickels that she was ignorant of the pendency of that suit until the sale of the premises was about to be made, so that she had no chance to defend in that suit. It appears, however, that besides the West Park Hotel property, on Virginia avenue, now in question, Mrs. Sickels owned another property, on Delaware avenue, in Atlantic City, which was also levied upon under the attachment. She wanted to make a mortgage on this Delaware avenue property, and the lien of the attachment was an impediment. Application was made about the latter part of March, 1896, in behalf of Mrs. Sickels, to the attorney of the plaintiff in attachment, to have this Delaware avenue property released from the lien of the attachment This release was actually purchased and paid for. At this time no creditor had applied under the attachment suit, and no auditor had been appointed. It is therefore quite plain that Mrs. Sickels must have known of the attachment suit whilst it was pending, and might have defended it if she bad pleased to do so. As to the charge of fraudulent conduct on the part of the plaintiff and applying creditors, there was no attempt to show that Mr. Babcock, who bought at the auditor's sale, and Mr. Hoffman, who purchased from him, were either participants in, or had knowledge of, the alleged fraud of the attaching creditors. Although the complainant's attention was especially called to this point no proof whatever Impugned the bona fides of Mr. Babcock or Mr. Hoffman in making their purchase of the premises. It is not even claimed that any fraud appears on the record. The bill challenges Mr. Babcock's purchase from the auditor because of the alleged fraudulent character of the attachment suit. It also challenges the deed from Babcock to Hoffman, charging it to have been collusive and without consideration. Both these deeds are contracts to which Mr. Babcock was a party, and the bill seeks to set them aside because of Mr. Babcock's alleged fraud, but he has not been brought into this suit as a party defendant. He was called, however, as a witness for the defendants. His testimony, substantially uncontradicted, shows that he purchased for himself at the attachment sale, for value paid, without either notice or warning of any fraud in the origin or conduct of the attachment suit All the proofs go to show that he was a bona fide purchaser, without notice. Mr. Hoffman, who purchasedfrom Mr. Babcock, is made a defendant to this suit. An answer is invited from him under oath, and has been so filed. By his answer Mr. Hoffman explicitly denies any and all knowledge of any fraud in the attachment proceedings. His answer is responsive to the allegations of the bill touching a matter within his personal knowledge, and, being unrebutted by any contradictory proof, conclusively shows that he purchased in good faith from Babcock, so far as the title taken under the attachment sale is concerned, which it is the object of the bill to attack. In addition to the effect of his answer, Mr. Hoffman's testimony, taken in court, shows him to have been a bona fide purchaser, without notice of any fraud in the attachment. Under this showing of the evidence, Mr. Babcock was, as above stated, a bona tide purchaser at the attachment sale. He thus became entitled, as matter of law, to make a sale to any one (even to one who had notice of actual fraud in the attachment suit), and the purchaser from him took his status as a bona fide purchaser. Holmes v. Stout, 4 N. J. Eg. 402; Rutgers v. Kingsland, 7 N. J. Eq. 184, affirmed on appeal in Id. 658; Henninger v. Heald, 52 N. J. Eq. 439, 29 Atl. 190. Mr. Hoffman therefore acquired Mr. Babcock's status as a bona fide purchaser, irrespective of his rights under his own purchase from Mr. Babcock. Under the deed from Mr. Babcock to Mr. Hoffman, the latter is also a bona fide purchaser without notice, according to the proofs in this case; there being no showing that the alleged fraudulent conduct in the attachment suit was known to either of them, or that it appeared on the face of the proceedings in that suit if the parties to a judgment are properly in a court competent to render the judgment, strangers to the suit are not affected in their interests, based upon the judgment, even if it be obtained by a fraudulent device, unless it be shown that the strangers acquired their interest with knowledge of the fraud. If the law were otherwise, there would be no security in purchasing titles at judicial sales. No prudent person would buy if he incurred the risk of losing his money in case it should afterwards be shown that attendant upon the suit, but not appearing on the face of the record, some fraud had been practiced, of which the purchaser under the suit had no knowledge. Freem. Judgm. § 509, and cases there cited. Herbert v. Herbert, 49 N. J. Eq. 70, 22 Atl. 789, affirmed on appeal in Id. 566, 25 Atl. 366, is not contrary to this declaration. In the Herbert Case there was no bona fide purchaser at the attachment sale. The plaintiff in attachment, who had perpetrated the fraud in that suit, became himself the purchaser at the attachment sale. He was not and could not be, a bona fide purchaser, because he was the originator of the fraud, and must have purchased with full notice of it Consequently his title was open to attack by the party defrauded. The complainant has failed to exhibit any ground for relief in support of the allegations and prayer of her bill of complaint.
As above stated, the substantial object of this suit, as expressed in the bill, is the attack upon Mr. Hoffman's title upon the ground above overruled. The complainant however, in argument seeks to impugn Mr. Hoffman's title upon grounds not within the frame of the bill, in substance as follows: It is claimed that Mrs. Sickels, the owner of the legal title, had entered into an agreement with the Hartleys to convey the premises to them; that Mrs. Hartley assigned this interest to the complainant, who went into possession under it and that Mr. Babcock, in purchasing at the auditor's sale, and Mr. Hoffman, in purchasing from Mr. Babcock, took title with notice of the outstanding equitable interest, first of the Hartleys, and then of the complainant; that the Hartleys had paid to Mrs. Sickels a considerable portion of the purchase money agreed upon, and the complainant paid Mrs. Hartley a portion of it; and that the complainant is now entitled to a conveyance from the defendant Hoffman upon completing performance of the terms of the original agreement for conveyance of the premises made between Mrs. Sickels and the Hartleys. In short, the complainant, on the argument seeks to turn a bill to set aside an alleged fraudulent judgment and deeds made thereunder, into a suit for the specific performance of a contract to convey lands. The bill contains no allegation of performance by the complainant of her part of the contract, nor of the tender thereof; nor does it pray that the contract may be enforced by decree. The proof shows that neither Mrs. Hartley, under whom the complainant claims, nor the complainant has in fact performed her part of the contract; that there has been no tender of the payments due, nor of the mortgage agreed to be given, nor of an assumption of the $10,000 mortgage. The conduct of the cause has been upon a line entirely removed from that of a claim of specific performance. The complainant has not by her bill invited the defendants to respond to allegations such as are necessary in the presentation of a bill for specific "performance, the answering pleadings are not framed to meet such a claim, nor has the evidence adduced by the defendants been directed to resist it. It is doubtful whether such a contention should be entertained. If it were considered, it must be at once rejected, because the whole case plainly shows that Mrs. Hartley, who held the contract for purchase from December 23, 1895, to April 28, 1897, when she transferred it to the complainant, neither performed her part of the contract nor offered to do so. The complainant is in the same position. The present suit has been brought without any tender of payment of the balance of the cash due, or of the mortgage of$4,500, or of any contract, assuming the payment of the $10,000 mortgage. All of these things are by the contract of sale made the duty of Mrs. Hartley. The deed made by Mr. and Mrs. Sickels to the complainant under date of May 2, 1890, contains no recognition of any obligation on the part of the complainant to pay any balance of cash purchase money, to give any mortgage for $4,500, or to assume the payment of the $10,000 mortgage. If the contention of the complainant be entertained, and the defendant Hoffman be dealt with as the holder of the legal title to the property, charged with knowledge of the equitable interest of the complainant, he is entitled to stand in Mrs. Sickel's place, and to have and receive the balance of the purchase money in performance of the contract entered into between Mrs. Sickels and Mrs. Hartley, in whose place the complainant claims to stand. The bill of complaint entirely fails in any way to recognize any such obligation on the part of the complainant, and was evidently framed upon the idea that Mr. Hoffman's title could be overthrown by the alleged frauds in the attachment suit. The evidence in the cause also shows that Mrs. Hartley, while she was the holder of the equitable title, practically abandoned it. The complainant contends that this was caused by the discovery of the alleged liens against Mrs. Sickels' title. But Mrs. Hartley's own testimony shows that the reason she abandoned it was that she was unable to secure the purchase money which by the terms of the agreement she had undertaken to pay. The liens could readily have been adjusted by applying the purchase money to their satisfaction. A bill in this court to enforce and protect the rights of Mrs. Hartley, filed in aid of the contract, would have easily controlled these incidents. The proof also indicates that Mrs. Sickels and Mrs. Hartley had no agreement that the latter's payments might be delayed; for, on Mrs. Hartley's failure to pay, Mrs. Sickels brought an action of ejectment against her, seeking to recover possession of the premises notwithstanding the agreement to convey. This suit was not pressed to judgment, but no bill appears to have been filed in this court by Mrs. Hartley asserting any equitable rights under the contract with Mrs. Sickels, and seeking to restrain the latter's ejectment suit. It is also difficult to entertain the claim for relief based upon the alleged equitable title, when the evidence shows that the defendant Hoffman has actually been put into possession of the premises in an ejectment suit brought by him against the Hartleys under his purchase at the attachment sale, without any attempt on their part to set up the claimed equitable title as a defense. It was, of course, not pleadable as a defense in a court of law; but, if Mrs. Hartley intended to maintain her equitable rights under the contract, she should have filed her bill in this court, and have sought a restraint of the ejectment suits at law until her equitable rights were established and protected by a decree. Instead of this, she made no defense to Mr. Hoffman's ejectment suit She filed no bill asserting her equity. She suffered judgment by default When she found that she was about to be dispossessed of the premises, she hastily assigned her alleged interest to the complainant, without disclosing to her the impending ejectment, and put the complainant into possession of the premises, only to be turned out by a writ of habere facias possessionem within three weeks thereafter. This was undoubtedly a great hardship to the complainant. But Mr. Hoffman was in no way responsible for it for the complainant admits she did not meet him in these transactions until the day she was ejected from the premises. Her misfortunes are probably chargeable to the ill advice of her former attorney, to the effect that the title under the attachment suit was worthless. It was the duty of Mrs. Hartley and the complainant if they expected specifically to enforce the agreement to convey, to come into this court as promptly as the nature of the case would admit Van Doren v. Robinson, 16 N. J. Eq. 263, and cases there cited. Mrs. Hartley knew of the attachment proceedings, as appears by her own testimony, before Mr. Babcock conveyed the property to Mr. Hoffman. She took no steps to protect her equitable title. Mr. Hoffman bought and paid a valuable consideration. He brought an ejectment against her, which was prosecuted to judgment and possession of the premises, and still Mrs. Hartley did nothing to assert her equitable rights. There has been no such diligence in protecting and enforcing the equitable claims of Mrs. Hartley and of the complainant who stands in her place, as is required to entitle them to the favorable consideration of this court. If the complainant has any right to recover the purchase money which has been paid, it must be by proceeding in the courts of law. There is no aspect of the case upon which relief can be granted to the complainant in this cause.
The bill of complaint should be dismissed, with costs.