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Lawson v. Acton

Jun 24, 1898
57 N.J. Eq. 107 (Ch. Div. 1898)



LAWSON v. ACTON et al.

George H. Peirce, for complainant. Caleb D. Shreve, for defendant Mrs. Acton.

(Syllabus by the Court.)

Bill by Laura Lawson against Martha W. Acton and others to set aside a conveyance or real estate, and for equitable relief. Heard on bill, answer, plea, replication, and proofs in open court. Decree for complainant.

The complainant is one of the heirs at law of Samuel Lewis, late of the county of Camden, deceased, who died in 1870 seised of certain lands in the city of Camden. The object of the bill is to set aside a sale and conveyance of them by the administrator of Lewis, under an order of the orphans' court of the county of Camden, to Lewis' widow, Elizabeth Corsen, and a mortgage made by Mrs. Corsen to the defendant Martha W. Acton. The bill charges (1) fraud practiced upon the orphans' court by the defendant C. W. T., a real-estate broker of Camden; (2) want of jurisdiction in the court to make the sale; and (3) notice to Mrs. Acton, the mortgagee, of the defects in Mrs. Corsen's title. Mrs. Acton, the mortgagee, denies all fraud, or notice of any, and, by plea, claims the position of a bona fide purchaser without notice; resting her title upon the validity of the order of sale made by the orphans' court. The facts of the case are these: Lewis, the grandfather of the complainant, and the husband of Mrs. Corsen, died in 1870, seised of the premises (which consist of a house and two lots of land, making in all 40 feet front and 100 feet deep, in the city of Camden); leaving the defendant Mrs. Corsen his widow, and leaving several heirs at law residing in different Western states. His widow was permitted by the heirs at law to occupy the premises, no attempt at partition or assignment of dower being-made. About two years after his death she married a second husband, Mr. Corsen, who subsequently died, leaving her the second time a widow. She permitted the taxes on the premises to fall in arrears, and they were threatened with a sale. No proof was offered, nor can any inference from the facts be drawn, that any of these taxes accrued in the lifetime of Lewis, the former owner. About the 1st of June, 1892, C. W. T., having, presumably, learned these facts, applied to the surrogate of the county of Camden for letters of administration on the estate of Lewis, and produced to him a paper witnessed by him, purporting to be a renunciation by Mrs. Corsen in favor of his administration, and asking that C. W. T. be appointed administrator. The signature of Mrs. Corsen to that renunciation is a forgery. On the 7th of June, 1892, Taylor presented his formal petition for administration; setting forth that Lewis died on the 15th of September, 1870, leaving a widow, Evaline Lewis, and two children, Sylvanus E. Lewis and Reba M. Stickney,—one living in Indiana, and the other in Ohio,—and asking for administration. He also presented an administrator's bond, purporting to be signed by himself, Mrs. Corsen, and one Herman Morgner. The original paper being produced in court, the signature of Mrs. Corsen is shown to be a palpable forgery. Morgner is said to have been a United States recruiting sergeant. On the strength of these documents, letters of administration were issued to him. On the same day he made affidavit that there was no personal property belonging to the deceased that came to his hands, and on the same or the next day he applied, by petition, to the orphans' court, asking for an order of sale of lands to pay debts, on account of the insufficiency of the personal property. In that petition he states the personal estate as nothing, and the debts as follows:

Taxes on the two lots


Costs and commissions


Jan. 1, 1889. To services of M. B. Taylor for Lewis estate




—and leaving a deficiency of that amount. M. B. Taylor was a well-known counselor at law of Camden county, who at that time had been dead several years; and it is to be observed that the bill does not pretend to be for services rendered to Lewis in his lifetime,—who had then been dead for 20 years,—but for services rendered the Lewis estate. On the strength of that petition, verified by C. W. T., the orphans' court granted an order to show cause why the land should not be sold to pay debts; and on the return of that order, and the proof of its publication in a newspaper in Camden, an order for sale was made September 2, 1892, and a new bond given byC. W. T., with the same Herman Morgner, the recruiting sergeant, and one William S. Darnell, as sureties. The administrator subsequently reported that he had sold the land to Mrs. Corsen for $100. The sale was confirmed on the 9th of December, 1892, and a conveyance made by the administrator, C. W. T., to Mrs. Corsen. He then took from Airs. Corsen a mortgage upon the premises to himself for $400, dated December 9, 1892. He then settled his account in the orphans' court, charged himself with $100 from the sale of the land, and credited himself with $10 paid to the estate of M. B. Taylor, with surrogate's fees, printing, and advertising, and $7 allowed to himself as commissions, making the precise total of $100. The claim of M. B. Taylor was not presented under oath, and no attempt was made at the hearing to show that it had the least foundation in truth and honesty. C. W. T. from time to time between that date and the month of June, 1893, paid taxes amounting to $273.89, as shown by copies of the vouchers on file in the tax office of the city of Camden; but to a" friend of Mrs. Corsen, who called on him about it, he claimed to have paid only $245 of taxes and interest. He then applied, in behalf of Mrs. Corsen, to Mr. Caleb D. Shreve, of the Camden bar, for a loan of money on mortgage on the property; and Mr. Shreve agreed to loan him $450 for the defendant Mrs. Acton, who was a client of his living in Philadelphia, and set about examining the title in the ordinary way, employing therefor the West Jersey Title & Guaranty Company, who furnished him with an abstract of the title, but not a guaranty of it. It does not appear what, if any, examination was made of the papers in the surrogate's office with a view of looking into the foundation of the proceedings for the sale of the lands, or the regularity thereof. The sum of $450 was actually advanced by Mrs. Acton to C. W. T. as the agent of Mrs. Corsen; and she executed to Mrs. Acton the mortgage in question, dated May 6, 1893. Out of this money C. W. T. paid the balance of the taxes and expenses. The interest falling in arrears, Mrs. Acton filed a bill to foreclose her mortgage, and her suit proceeded to a decree, execution, and advertisement,—all without any actual notice to the heirs of Samuel Lewis until the advertisement of the sale under foreclosure, when one of them (the complainant herein) filed the present bill; and an order was thereon made, staying the sale until final hearing.

George H. Peirce, for complainant.

Caleb D. Shreve, for defendant Mrs. Acton.

PITNEY, V. C. (after stating the facts). The learned counsel for Mrs. Acton attempted at the hearing to justify the conduct of C. W. T. on the ground that his intention was good, but that he made a mistake in the means employed to accomplish the end in view. I cannot accede to that argument. And I do not think the position is improved by the justification set up in C. W. T.'s answer (not supportel by the least proof), which is, briefly, that M. B. Taylor in his lifetime had been counsel for Mrs. Corsen, and that she received notice from the city authorities that her property would be sold, or had been sold, for taxes, and applied to C. W. T. to assist her in the premises, and that he undertook it, and, having consulted the surrogate, was advised by him that the proper plan was to have the property sold by proceedings in the orphans' court, and the title vested in Mrs. Corsen, so that she could make a mortgage on it, and pay the taxes, and save the property for a home. He says that this was necessary, because her title was only that of a dowress, and that she could not raise money by a mortgage. This is true, but did not in the least justify him in advising her to procure the title by the means suggested, or justify her in acting upon his advice. His duty and her duty, plainly, was to notify the heirs at law, the residence of two of whom was set up in his application for the sale of the land, and give them an opportunity to come forward and pay the taxes, if the widow was unable to pay them, and exercise their pleasure as to permitting her any longer to occupy the premises. It is to be observed that it was the duty of the widow, as tenant in quarantine, to pay those taxes. It was the least she could do in recognition of the generosity of her children, or stepchildren, as the case may be, in permitting her to occupy the whole of these premises under a right of quarantine. So far as the case shows, her husband died possessed of no other property. The end proposed, namely, to procure the title to be vested in the widow, was a dishonest one, and cannot receive the sanction of this court. Then the application to the court was in itself a plain fraud,—so plain and palpable that it seems strange it should have escaped the attention of the judges,—and the fact that it did escape their, attention is the only circumstance in the case to support the allegation of the answer that the scheme was devised by the surrogate. C. W. T. knew perfectly well that it was necessary that there should be a debt of Samuel Lewis in order to warrant the orphans' court in, selling land, and so he produces the charge of $10 in favor of the estate of M. B. Taylor to give a color of a debt of the deceased. And this shows that he knew that the taxes were not the debt of the decedent, and would not justify the orphans' court in selling land. I come, therefore, without difficulty, to the conclusion that the whole proceeding in the orphans' court was founded upon a fraud practiced upon that court by C. W. T.; that the debts for which the lands were sold were not the debts of the decedent, but were in fact the debts of Mrs. Corsen; that she was in fact the purchaser of the lands of the heirs of her husband at a sale made to raise money to pay her own debts:and that, as between her and the complainant and the other heirs of Samuel Lewis, her title must be declared void. And if the attempt had been to foreclose the mortgage given by Mrs. Corsen to C. W. T., which was canceled when Mrs. Acton's mortgage was taken, there would be no difficulty. Neither Mrs. Corsen, nor C. W. T., nor, indeed, any person claiming under her with notice of the fraud, could derive any advantage from those proceedings.

Counsel for Mrs. Acton claims that she is in the situation of a bona fide purchaser without notice of this fraud. A learned and elaborate argument was presented to me by him in favor of three propositions: (1) That the orphans' court had complete and unlimited jurisdiction over the subject-matter before it, and that, having acted, its decree cannot be questioned collaterally; and, hence, (2) it was not the duty of Mrs. Acton, in examining the title of Mrs. Corsen, to look into the proceedings in the orphans' court, and see whether there was anything defective in the jurisdictional facts upon which the order of sale was based; and (3) that if she, by her counsel, had examined the proceedings in the orphans' court, nothing in fact would have been disclosed that would suggest fraud, or otherwise put her upon inquiry.

The extent and character of the jurisdiction of the orphans' court in New Jersey in matters of this kind has been the subject of much discussion, and may be considered as thoroughly settled by the following cases: Wilmurt v. Morgan (unreported), decided by Chancellor Williamson, and cited at length by Chancellor Vroom in 3 N. J. Eq. 166; Maxwell v. Pittenger, Id. 156; Den v. Hammel, 18 N. J. Law, 73 (where the lines of juridiction were clearly stated by Judge Ford, and his language in that behalf has been substantially adopted in every case which has since arisen); O'Hanlin v. Den, 20 N. J. Law, 31 (see pages 40, 50); Den v. O'Hanlon, 21 N. J. Law, 582; Runyon v. Rubber Co., 24 N. J. Law, 467; Young's Adm'r v. Rathbone, 16 N. J. Eq. 227; Plume v. Savings Inst, 46 N. J. Law, 211; Clark v. Costello, 59 N. J. Law, 234, 36 Atl. 271. Xotwithstanding some general and rather sweeping expressions contained in later opinions, I can find nothing to warrant the notion that the orphans' court has been put upon any higher basis than that of the courts of common law, in the matter of acquiring jurisdiction of the particular matter. With regard to those courts, there can be no question that a judgment in personam of a common-law court must show jurisdiction of the person. The remark of Beasley, C. J., in Price v. Ward, 25 N. J. Law, 225, at page 227, is apt. He pays: "The record of every common-law judgment, though no appearance has been entered or defense made, regularly shows upon its face the jurisdiction of the court over the person of the defendant. The declaration avers that the defendant is in custody, or that he was summoned or attached to answer, or that he is present in court in his own proper person, or as an officer of the court." I apprehend that a judgment in personam of a common-law court, which failed to show on its face jurisdiction of the person, would be void. And it is perfectly well settled that the question of actual jurisdiction of the person in such cases may always be inquired into. The cases in New Jersey on this subject are the following: Moulin v. Insurance Co., 24 N. J. Law, 223; Price v. Ward, 25 N. J. Law, 225; Mackay v. Gordon, 34 N. J. Law, 286; and Elsasser v. Haines, 52 N. J. Law, 10, 118 Atl. 1095. The decree of sale in this case, however, was not a decree in personam, but a decree strictly in rem. The physical object of the decree—the land in question—was situate within the territorial jurisdiction of the court, and the subject-matter of the suit was the sale of that land to pay the debts of the deceased. Of the subject-matter the court had, by statute, undoubted general jurisdiction; and it was within its power, also, to obtain jurisdiction pro hac vice of the persons interested in the land, by publication, without personal service. This mode of obtaining jurisdiction, or quasi jurisdiction, of the person, is necessary in all cases of this kind; otherwise there might be no remedy in case the owners of the land lived beyond the territorial jurisdiction. But to say that the court has general jurisdiction of the sale of lands of decedents to pay debts of the decedent is no more than to say that it has power to acquire such jurisdiction in particular Instances by certain proceedings, and the jurisdiction to proceed at all against the particular land depends by the statute upon an application by an executor or administrator to sell the lands for the payment of the debts. In my judgment, there must be a written application by the executor or administrator to the orphans' court, and it must appear to have been actually presented. I apprehend that a mere order of the orphans' court directing a sale of lands of a decedent by a personal representative, in the absence of any application for that purpose, would be void, precisely as would a mere entry of judgment in personam by a common-law court, without any service of process on the defendant, or appearance by him, or the entry of a decree in this court not based upon a bill filed, and process served thereon, or an appearance by the defendant. And, in my judgment, a party claiming title through a sale by an order of the orphans' court to pay the debts of the decedent is chargeable with notice of whether or not in fact such written application was made. This leads to the conclusion that the purchaser from Mrs. Corsen is chargeable with notice that an application was made by petition by the administrator in this case. Such petition is recited in theorder to show cause why a sale should not be made, and was in fact upon the files of the court open for inspection.

This brings us to the question whether or not she is chargeable with notice of its contents, and, if so, whether an inspection of the paper itself was sufficient to give her notice of the fraud in this case, or (which is the same thing) to put her upon further inquiry. And I think she is chargeable with notice of the contents of the petition, and, if the matter were res nova, I should say that she was chargeable with notice of the fraud. The petition shows that the decedent had been dead over 20 years, and that the debts, for the payment of which a sale was ordered, were— First, a claim by M. B. Taylor for $10 for services rendered to the "estate of Samuel Lewis"; and, second, for $248 for taxes against the property in question. The claim of Taylor was clearly not a debt of the decedent, and the strong presumption with regard to the taxes was that they accrued long since his decease. The injustice done by the transaction was, as I have said, palpable and manifest. Mrs. Corsen, an elderly and nearly imbecile woman, was (with innocence on her part perhaps), by the fraudulent practices of C. W. T., vested with the title in fee of premises of which she had really only a dower right, on the strength of her own default to pay the taxes levied against them, and which it was her duty to pay. I think that the adoption and enforcement of a rule that the purchaser is so chargeable with fraud apparent on the face of the papers would be a safeguard against such a fraud as has been practiced here, and would not be any hardship on the purchaser. An examination of the authorities cited on this topic by Mr. Freeman 'n his treatise on Judgments, and also in his treatise on Void Judicial Sales, shows that in many of the states of the Union a rule something like that obtains. But I feel constrained by authority in this state to hold that the purchaser was not bound to notice the indicia of fraud just stated. That authority is the famous Leake Case (O'Hanlin v. Den), reported, as above cited, in 20 N. J. Law, 31, and 21 N. J. Law. 582. The circumstances of that case were these: Leake died seised of lands in Bergen county, leaving no heirs, so that they escheated to the state. Some years afterwards letters of administration were taken out on his estate, and application made to sell land for payment of debts. The character of the application in that case is set forth in the opinion of Hornblower, C. J., at page 40, 20 N. J. Law, where he uses this language: "But in my opinion it would be against public policy and private security to authorize the orphans' court to order a sale of lands which have escheated to the state. This very case affords a striking commentary on such a practice. A foreigner comes into our state, and purchases a valuable farm. He has a wife and children in Europe, whom he Intends to bring hither, but death over takes him before he can effect his purpose. A stranger, as in this case, having no claims upon the deceased or his property, gets administration, trumps up an account, and under an order of the orphans' court, obtained upon an ex parte application, sells the whole estate to pay debts, when it is manifest upon the face of his own account that he had not one dollar of debt to pay. Is it not better that the state, as guardian of such property, should take it under its care, and see that it is applied to the payment of debts, if any, and the surplus be given to the widow and children of the deceased, or to such persons as by the ties of nature and consanguinity would be best entitled to it?" This statement shows the case to be much like the present. Nevius and Whitehead, JJ., who did not agree with the majority of the court in the result, did agree in holding that the sale in that case was valid. See pages 50 and 51 of 20 N. J. Law. And when the case reached the court of errors and appeals the point was taken that the sale by the orphans' court was void, but the court stopped counsel on the other side on that point. 21 N. J. Law, 586, 587, 597. It is true that those were mere dicta, not necessary to the decision of the cause, because that decision was against the parties taking the point, upon other grounds, to wit, that the orphans' court had no jurisdiction to sell the lands, which had escheated to the state. But they were the dicta of distinguished judges in two courts after listening to elaborate arguments by the leaders of the bar, and are so far in consonance with the general strain of decision of similar questions in this state that I feel constrained to follow them. The protection of heirs against such frauds must be found in additional precautions for giving notice to nonresidents by mail, and by increased vigilance on the part of the courts. It must be observed that the petition in this case was quite sufficient to give the court jurisdiction of the particular matter, upon the principle laid down by the late chief justice in Plume v. Savings Inst., 46 N. J. Law, 211, at pages 227, 228. The question there involved was the jurisdiction of the orphans' court to grant letters of administration upon the estate of a supposed decedent. The grant in that case was based upon a written petition, the substance of which is set out on pages 226, 227, and the objection was that the petition did not show that the intestate was actually dead. With regard to that aspect the chief justice says that, though the court may have fallen into error in determining that he was dead, there was a petition presented which made what he happily called a colorable case, and which gave the court jurisdiction. In this case the presentation of the petition gave the court jurisdiction of the particular matter, and the only question is whether the facts did not put a purchaser upon inquiry as to whether or not there was a fraud practiced upon the court The complainant is not entitledto relief as against Mrs. Acton, but is entitled to relief against both Mrs. Corsen and C. W. T. for reimbursement of whatever she shall loose by the fraudulent proceedings in the orphans' court. I will advise a decree in accordance with these views.

Summaries of

Lawson v. Acton

Jun 24, 1898
57 N.J. Eq. 107 (Ch. Div. 1898)
Case details for

Lawson v. Acton

Case Details

Full title:LAWSON v. ACTON et al.


Date published: Jun 24, 1898


57 N.J. Eq. 107 (Ch. Div. 1898)
57 N.J. Eq. 107

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