Opinion
Submitted May 26th, 1933.
Decided September 27th, 1933.
1. Complainant having had notice of the suits brought against the defendant insurance companies by the defendant building and loan association, and opportunity to come in and be heard as to the amount due the building and loan association, the judgments obtained in those suits are conclusive against him in the present case.
2. The refusal of costs to any party in the cause is within the discretion of the vice-chancellor who heard the cause.
3. "Inartificially drawn," held, to refer generally to pleadings and law papers not conforming to the usual precedents of the profession.
On appeal from two interlocutory orders, and a final decree, all advised by Vice-Chancellor Buchanan. The first denied a motion to strike out the bill, and a motion to compel two insurance companies to deposit a sum of money in court, but allowed them to do so voluntarily upon their counter-claim in the nature of an interpleader, and enjoined any action at law involving matters comprised in this suit; and reserved decision on an application for costs and counsel fee. The second order discharged the two insurance companies from further liability in the premises, they having paid the money into court. The final decree, based on a bill essentially one by mortgagors for redemption, adjudged the payments to be made and the other terms of redemption and cancellation of the mortgage.
The memorandum by the vice-chancellor follows:
"Complainant Carmelo Domino being the owner of premises 172 Woodbridge avenue, Highland Park, New Jersey (consisting of land and buildings), executed bond and mortgage thereon, October 10th, 1930, to defendant Security Building and Loan Association of New Brunswick, to secure a loan of $3,000 in the usual building and loan association form. He assigned to the association, as collateral security, fifteen shares of the stock of the building and loan association; and obtained, paid for, and assigned as further collateral security three policies of fire insurance, one with the Merrimack Mutual for $4,000, one with the Ohio Millers Mutual for $6,000, and one with the fire association of Philadelphia for $4,000. Each policy contained the usual mortgagee clause making loss if any payable to the Security Building and Loan Association, mortgagee, as its interest might appear.
"Four months later the buildings on the mortgaged premises were completely destroyed by fire. Efforts were made by complainant to obtain payment for the loss from the insurance companies, but satisfactory adjustment could not be had, and finally about December of 1931 complainant brought suit against the companies on the policies, joining the building and loan association as party in those suits. Sometime in January, 1932, a settlement was arrived at between complainant and the insurance companies, whereby the Fire Association of Philadelphia agreed to pay $3,850 and the other two companies agreed to pay a total of $8,250 in settlement of the liability of the said insurance companies for the loss. (The companies had originally insisted that the total liability did not exceed $6,500.) Unfortunately the building and loan association was not taken in as a party to the settlement negotiations and no agreement was reached among the parties as to how much of the total settlement moneys was to be paid to the building and loan association in respect of its mortgage.
"The building and loan association brought suits against the three insurance companies upon the mortgagee clause in the policies. During the pendency of these suits tentative agreements were made between the insurance companies and the building and loan association as to the amount due the latter company, but these agreements were never effectuated, apparently because of the inability of the insurance companies and the complainant to agree as to how much was due the building and loan association. Eventually therefore judgment was taken by the building and loan association against each of the insurance companies.
"The situation was further complicated by the fact that complainant had given to the W.D. Ettinger Company (an insurance adjuster), an equitable assignment of six per cent. of the recovery against the insurance companies; and complainant was unable to get payment from the insurance companies to himself, of any amount.
"Finally on July 6th, 1932, complainant filed a bill in this court, which is inartificially drawn but which essentially amounts to a bill against the building and loan association for the redemption and cancellation of the mortgage. It also joined the Ettinger company and the two fire insurance companies (some satisfactory arrangement having been previously made between complainant and the Fire Association of Philadelphia) seeking to compel the payment by these two insurance companies of $8,250, settlement agreed upon, into court and for an adjudication between complainant, the Ettinger company and the building and loan association as to the recoverable amount due them. The two insurance companies filed a counter-claim, also inartificially drawn, but essentially amounting to a bill of interpleader as to the $8,250, which they were willing to turn over to the persons entitled thereto.
"Prior to the hearing, the $8,250 was paid into court by the two insurance companies, and a settlement was arrived at between complainant and the Ettinger company, eliminating that company from the suit and from any interest in the fund.
"At the hearing, the building and loan association claimed the principal of $3,000 plus usual building and loan association premiums of $32.25, plus $321.16 interest on the principal from the date of the mortgage to November 1st, 1932 — a total of $3,353.41, against which it admitted the receipt of payments amounting to $60, leaving a net total as of November 1st, 1932, of $3,293.41; complainant offered no evidence to dispute this evidence as to the amount due; the only issue in this behalf being a claim by complainant that the building and loan association had been guilty of conduct which in equity should estop it from claiming interest subsequent to January 26th, 1932.
"The testimony and documentary evidence submitted upon this phase of the case was voluminous. It is unnecessary to go into it in detail any further than to mention the fact that as late as the latter part of April, 1932, the complainant by his solicitor and attorney claimed that the amount due the building and loan association was approximately only $2,800; and it does not appear that any different step was ever taken by complainant, at least so far as any notification to any of the other parties is concerned, until the argument on the hearing. It does appear that none of the parties interested made as efficient efforts as they might well have done toward accomplishing an earlier agreement and satisfaction amongst all the parties. Each one of them at sometime or other in the proceedings took a position of standing upon its strict rights, and no general agreement was ever able to be effectuated. However, in the last analysis, it is obvious that it was incumbent upon complainant to take the laboring oar in the matter of effectuating such a settlement, and that in that behalf it was incumbent upon him to arrive at an agreement between himself and the building and loan association as to the amount due it, and to apprise the insurance companies that such agreement had been reached. This he did not do; on the contrary, as late as the latter part of April, 1932, his solicitor advised the insurance companies that he would not consent to a payment of more than approximately $2,800 to the building and loan association. As the result thereof the suits of the building and loan association against the insurance companies proceeded to judgment. It is obvious that this was inevitable, since in no other way would the insurance companies be protected in paying to the building and loan association a greater amount than that authorized by the complainant. The judgments would protect the insurance companies, because the complainant had notice of the pendency of these suits and opportunity to come in and be heard as to the amount due the building and loan association; and for that reason those judgments are conclusive against complainant in the present case.
"It is concluded therefore that complainant fails in his attempt to show any equitable estoppel against the building and loan association collecting the full amount due it for interest on the unpaid bond and mortgage. The amount due in respect thereof, as has been said, was $3,293.41 as of November 1st, 1932. To this should be added $7.50 for interest on the principal of the mortgage from November 1st to the date of hearing, and to this should also be added the sum of $171, being the costs awarded the building and loan association against the insurance companies in the judgments aforesaid. This makes a total of $3,471.91. Of this amount a partial payment was made between the parties without prejudice at the time of hearing, amounting to $948.29. The balance, $2,723.62 should be paid by the clerk out of the $8,250 deposited in court, and the remainder of the deposit should be paid to complainant.
"The decree should further provide for the surrender of the bond and mortgage duly marked for cancellation, and for the surrender to complainant of the building and loan association's shares, held as collateral security; also for the surrender of the insurance policies to the several insurance companies; also for the satisfaction by the building and loan association of the judgments entered by the insurance companies.
"Under all the circumstances, it is deemed that no award of costs should be made to any party."
Mr. Joseph T. Lieblich, for the appellants.
Mr. Warren R. Schenck, for the respondent Security Building and Loan Association.
Mr. Henry P. Brown, for the insurance companies.
The orders and decree under review will be affirmed, and we find it needless to add anything material to the memorandum of the vice-chancellor.
The refusal of costs to any party in the cause was well within the discretion of the court of chancery.
The item of $171 for costs against three insurance companies was based on a taxation of $57 in each case. It is said that one of the suits did not go to judgment, but the mortgagee was entitled to costs on a settlement before judgment. The point seems trivial.
One of the points in appellants' brief makes a vigorous attack on the words "inartificially drawn" used twice by the learned vice-chancellor, and professes inability to understand just what was meant. Definitions of "artificially" and "inartificially" are quoted as from "Webster." We do not find them in the quoted language in Webster's International Dictionary, but do find the word "inartificial" defined (def. 2) as "not characterized by art or skill; clumsy; inartistic." In that sense the word is fully accredited in legal parlance, and will be found occasionally in our reports, referring generally to pleadings and law papers not conforming to the usual precedents of the profession. A recent instance is Paterson v. Currier, 98 N.J. Eq. 48.
The criticism by the vice-chancellor of the bill and counter-claim from the "artificial" standpoint, needs no discussion in view of the fact that both were correctly sustained as presenting a case for disposition by the court.
For affirmance — THE CHIEF-JUSTICE, TRENCHARD, PARKER, CASE, BODINE, DONGES, HEHER, PERSKIE, VAN BUSKIRK, KAYS, HETFIELD, DEAR, WELLS, DILL, JJ. 14.
For reversal — None.