Opinion
05-22-1890
MELLICK v. MELLICK.
J. G. Shipman, George Shipman, and Mr. Howell, for complainant. William H. Morrow and S. C. Smith, for defendant.
(Syllabus by the Court.)
Final hearing on bill, answer, cross-bill, and proofs.
J. G. Shipman, George Shipman, and Mr. Howell, for complainant. William H. Morrow and S. C. Smith, for defendant.
PITNEY, V. C. By this suit, complainant seeks to enforce by foreclosure a mortgage, dated March 30, 1877, to secure $5,000 in one year, with privilege of five years, with interest payable semiannually, given by Joseph Kramer and wife to Henry H. Mellick, and by him assigned to complainant by her maiden name of Emma Keiter. This assignment bears date, and was executed and acknowledged, April 6, 1878; and on the same day, after the execution of the assignment, and its delivery, with the bond and mortgage, to the complainant, she and the mortgagee, Henry H. Mellick, were married. In 1879, Kramer, the mortgagor, failed. Judgments went against him under executions, upon which the mortgaged premises were brought to public sale in 1881, and purchased by Howard Mellick, the defendant. He does not dispute the validity of the mortgage, but sets up an assignment of it to himself by Henry H. Mellick, the mortgagee, who was his father, which is dated, and was executed, acknowledged, and duly recorded in the records of the proper county, on the 18th of March, 1878, 19 days prior to the execution of complainant's assignment. It thus appears that the real contest is as to which of these two assignments conveyed, as against the other, the superior title to the mortgage in question. The defendant's, assignment purports to be in consideration of one dollar, and natural love and affection, with habendum "to the party of the second part, his heirs and assigns, for himself, and his and their own use, after the death of the party of the first part, on condition that the said Howard Mellick shall pay the interest received by him on said mortgage to the said party of the first part, in semiannual payments, during his life-time."
Complainant's assignment recites the bond and mortgage, describes the land covered by it by metes and bounds, and then, in consideration of one dollar, grants, bargains, sells, and assigns to the complainant the bond and mortgage, and the lands so described, with the appurtenances, with unrestricted habendum to the complainant, subject to Kramer's equity of redemption, with these words added: "Said Mellick to draw the interest during his life-time." The complainant, by her bill, alleges that more than one month before the date of her assignment, and long prior to the date of defendant's assignment, Henry Mellick agreed with her that, if she would marry him, he would assign to her this bond and mortgage; that the said assignment was made and executed, and, with the bond and mortgage, delivered to her, in consideration of such marriage, and immediately before the same was solemnized. She further, by her bill, charges that the defendant's assignment was without any valuable consideration, was procured by the defendant from his father with full knowledge that the latter had contracted to assign the same to her in consideration of their approaching marriage, and was contrived by the father and son for the purpose of defrauding her in that affair, and is for that reason fraudulent and void as to her. She further, by her bill, alleges that in August, 1878, the defendant, acting in fraudulent collusion with her husband and Kramer, attempted to obtain possession from her, by fraud, of said bond and mortgage, and for that purpose, pretending a desire to indorse a payment of interest on the bond, asked complainant to produce both instruments for that purpose; that she did produce the bond, and handed it to Kramer, who, after indorsing the payment on it, handed it to the defendant, who has since retained possession of it; and that Kramer handed her back in place of it an old canceled bond of Howard Mellick to his father.
Defendant, by his answer, denies complainant's allegation as to her assignment being given in consideration of marriage, and the like, and puts her upon proof. As to his own assignment, he does not, by his answer, assert that it had any other consideration than that expressed in it. He further denies the allegations of the bill charging him with knowledge of the intended marriage, and of the alleged preliminary contract between complainant and his father to settle the bond and mortgage on her at their marriage; and he denies that his assignment was procured for the purpose of defrauding complainant. He also denies all complicity in the trick by which the possession of the bond and mortgage were procured from complainant. He alleges that the bond and mortgage were delivered to him by his father on the 18th of March, and placed by him in his safe, to which, however, his father had access, and were taken therefrom by his father surreptitiously, and without his knowledge, and their absence from the safe was not discovered by him until after his father was married, and when discovered he called his father's attention to it, and that he confessed that he had taken them, and promised to return them, and did return the bond. He further sets out in his answer that after the marriage, and after complainant had separatedherself from his father, the latter was without any means of living except the interest on the bond and mortgage, and that "he thereupon came to defendant, and agreed to and with this defendant that, if this defendant would furnish to him a home, with comfortable room, lodging, and board, for and during the term of the natural life of him, the said Henry H. Mellick, that the same would be accepted by him, the said Henry H. Mellick, in full payment and satisfaction of the interest which he, the said Henry H. Mellick, had or was entitled in and on the said bond and mortgage which he had assigned to the defendant," etc., and "that he, the defendant, agreed with the said H.H. M. to furnish him board," etc., "in consideration of the said interest in and on said bond and mortgage," etc., and that, in pursuance of said agreement, defendant did furnish his father with such living, etc., during his natural life; "and in addition thereto this defendant furnished said H. H. M. his clothing and several sums of money, amounting in the whole to the sum of $1,400 or thereabout, which stands charged on this defendant's book against the said H. H. M., and that in addition he paid the funeral expenses of the burial of his father, [who died just before the filing of the bill,] and the amount whereof ought to be decreed to be deducted from any amount which shall be ascertained to be due in any wise from this defendant to H. H. M., if any such decree shall be made." These citations from the answer have been given thus at length because they will appear to have an important bearing on the case as further developed. The part of the answer set up as a cross-bill states that the existence of the uncanceled record of the mortgage is a cloud upon the defendant's title; that the instrument is wrongfully retained by complainant, and should be given up to him to be canceled; and prays accordingly.
At the hearing and argument the allegations and proofs of the parties took a range somewhat wider, and, as to the defendant, decidedly variant from that marked out by the pleadings. The complainant offered evidence tending to prove that the preliminary contract of marriage, after months of negotiation, was concluded in February, 1878; that, by its terms, Henry agreed to give complainant a conveyance of a certain house and lot, an assignment of the Kramer bond and mortgage, reserving the life-estate to himself in each, and $500 in cash to buy furniture and other outfitting necessary to commence housekeeping in the house; and that March 18, 1878, was fixed for the marriage. With that view, her fiancé produced to her the deed to him of the house and lot, and the bond and mortgage, and some two weeks prior to March 18th went with her to one Hillburn, a lawyer in Easton, Pa., stated to him the contract between the parties, left with him the three instruments, and instructed him to have papers, prepared properly to carry out their contract, ready to be executed and delivered at the time of the ceremony, on the 18th of March. That, shortly before the 18th, Henry came to her, and asked her to postpone the marriage until after April 1st, and to let him have the bond and mortgage in the mean time to enable him to collect the interest due on April 1st; that she consented, and went with him to Hillburn's office, to enable him to get the bond and mortgage, which Hillburn had declined to deliver to him without her order; and that the 6th of April was then fixed for carrying out the contract. By this evidence, complainant sought to carry her equity back to a period anterior to the 18th of March, the date of defendant's assignment. The defendant varied the case made by his answer by proof, by his own and his clerk's oath, and admissions of his father, that, at the time of the assignment, he agreed with his father, as a consideration therefor, to cancel an indebtedness' which he had against him, amounting to upwards of $600, to loan him a further sum of about the same amount, and, further, to support him as long as he lived, thus setting up an actual consideration for his assignment not set up in his answer.
I come now to an examination of the testimony. The parties all lived in Phillips burgh, Warren county. The defendant kept there two stores, in one of which was his counting-room, and his fire-proof safe and papers. His father had been a widower for many years, was a farmer in his youth, had sold out his farm several years before the period of this transaction, and was living with Howard. He spent much of his time at the principal store, and assisted in the business when he chose. He was the owner of a house and lot in New Village, Warren county, about seven miles from Phillips burgh, and was possessed of eight or ten thousand dollars in bonds and mortgages, including the one in question, and one made by his son Howard, by the name of George D. H. Mellick, and one Case, jointly, for $2,000. He was born in 1812, and was yet in full health and vigor, both of mind and body.
Complainant was the child of poor parents. Her father was a boatman on the Morris canal. Her mother kept a small candy and cake shop, and she was a seamstress and dressmaker, and. was at her marriage about 19 years old, and rather illiterate. There were no visiting relations between her family and that of Howard Mellick's. Counsel for the defendant, early in the hearing, expressly disavowed any intention of aspersing the character of the complainant in any respect. Nevertheless, some of his witnesses, including the defendant, did from time to time drop expressions hinting at a want of chastity on her part. But I desire to say, once for all, that I observed nothing in her conduct, as detailed by her, in her manner on the stand, or the other evidence in the case, to lead me to suspect her to have been guilty at any time, either before or after marriage, of any improper or immoral conduct or behavior. Complainant's parents sent her to make purchasesat defendant's store, and she there met the elder Mellick when still a mere child. He began to pay her attention three or four years before the marriage, visited at her parent's house, escorted her from church, and took her to evening entertainments, and continued his attentions openly until the marriage. During all this time, he avowed his intention to make her his wife. She does not appear to have encouraged him, but to have treated him at times with girlish ridicule, and generally with marked aversion. When be spoke to the mother about marrying Emma, she swears that she tried to dissuade him; that he insisted upon it, and finally, some time in the latter part of 1877 or early part of 1878, he pressed his suit so earnestly, according to the testimony of both mother and daughter, that they listened to it seriously. They swear that he often made the proposition above stated, and that they finally accepted it. There was no pretense of any affection on the part of the girl, and the negotiations were carried on upon a purely money basis; nor is there the least evidence that she enticed him into the contract by the exercise of any of the ordinary feminine arts. At the same time, her lover was very watchful and jealous, as far as possible preventing her from receiving attention from any other man of suitable age, and in fact did effectively prevent her receiving the attention of other suitors. The old gentleman showed his good faith by promptly paying the $500 for the furniture in cash. This was done, as Emma swears, in January; and afterwards, in February, the 18th of March was fixed for the ceremony, and mother and daughter and fiancé proceeded to Mr. Hillburn's office with the bond and mortgage, and deed of the house, explained to him the agreement, and instructed him to have the conveyance and assignment ready by the 18th. The papers were, according to their story, then left with him. Emma swears that she had had them in her possession at her mother's house three or four days before the date of the first visit to Hillburn's. A few days before the 18th the old gentleman asked Emma to postpone the wedding until April in order to enable him to collect the interest due on the bond and mortgage on the 1st of that month. She consented to that, and that he should take the papers for that purpose from Hillburn's. He came back the next day, and stated to the females that Hillburn would not permit him to take the papers without their consent, and so they went with him to Hillburn's, and consented in person to the withdrawal for the purpose mentioned; and then and there the 6th of April was fixed for the wedding. In the mean time the furniture and outfitting was purchased and placed in the house, and i t prepared for occupation; and complainant, and her brother and sister, went out there, and spent a night in the house with her future husband. About a week before the 6th of April, Emma swore that Henry brought the papers to her, and they went again to Hillburn's, and a second time left them with him, to enable him to prepare the necessary instruments by the 6th. In the evening of the 6th, complainant, and her father and mother, went to Hillburn's office, and found there Hillburn, the Rev. Dr. Porter, of Easton, and the groom. The papers were already executed. She stood up by the side of the groom, and Mr. Hillburn, upon express direction of the latter, produced the two deeds of the house, the bond and mort gage and assignment, duly executed and acknowledged, and delivered all to the com plain ant; and the ceremony was at once per formed. The papers were all left with Hill burn, who put the new deed and the assignment on record, and later handed all to the complainant, who lodged them with her mother for safe-keeping.
The newly-married couple went almost immediately to live in the New Village house, and there continued until about the 1st of August, when the husband stated to complainant that Kramer was willing to pay his interest quarterly, and asked her to assist him in collecting it. She replied that Kramer could pay him, and take his receipt; but he declared that the interest must be indorsed on the bond, and sent her home to her mother's for that purpose, and the next day came himself, and asked her to bring the bond and mortgage to Kramer's bake-shop to receive payment. This she declined to do. Then he brought Kramer to her mother's house, and she brought the bond from its place of deposit to the sitting-room; and, upon producing it, Kramer asked for the mortgage also, and she declined to produce that, whereupon Kramer wrote an indorsement of interest on the bond, handed it to the husband for his signature, who took it into the kitchen to sign it, was followed by his wife, signed it, turned his back to her, slipped it into his pocket, pulled out another similar paper, which proved to be an old, canceled bond made by the defendant, handed it to the complainant, and escaped from the house with her bond, which he took at once to the defendant. He returned the same evening to his mother-in-law's house, was taxed by his wife with his dishonest conduct, and then confessed that he and Kramer came there for the purpose of getting possession of both the bond and mortgage, and that they were prompted and urged to do it by the defendant. He said that one plan suggested by Howard for getting possession of the bond and mortgage was to get the two papers into Kramer's bake-shop, there drop them, as by accident, into his yeast tub, take them to the oven to dry them, and drop them into the fire; that this plan was not adopted because Kramer said he would be obliged to give a new bond and mortgage to complainant direct. The next day complainant and her mother, being alarmed by this revelation, went to Belvidere for advice. There they for the first time learned, by an examination of the records, of the previous assignment ofher bond and mortgage to Howard, and also that her husband, on the same 18th of March, had conveyed to his son Jacob Mellick the house and lot at New Village. A day or two later, she and her mother went out to New Village, and found that all her furniture had been moved out of the house, and heard that it bad come to Phillips burgh. Her husband advertised her in the newspapers as having left his bed and board, with, I infer, the usual caution against trusting her on his account. Thus she found herself stripped of every particle of the consideration for which she had sacrificed her youth and prospect of a congenial marriage to the senile desires of her husband. Notwithstanding all this cruel and nefarious treatment, including, as she says, an attempt to poison her, which she says he confessed, he resumed his visits to her at her mother's house, and finally induced her to return to New Village, and live with him. To this end the furniture was put back in the house, and husband and wife resumed cohabitation there about April 1, 1879, and continued there till the fall of 1880, when, Kramer having failed in business, and stopped paying interest, and Howard refusing to furnish anything for their living, she was obliged to leave from sheer want of the actual necessities of life. She went to her mother's house, where she has lived and supported herself by her needle ever since. Her husband went to Howard's, and lived with him until his death, in February, 1889.
In support of Howard's complicity in the theft of the bond, complainant produced one Yutz, a nephew of Kramer, who worked for him in his bakery, and who testified that he overheard a conversation between Howard and Kramer, in the summer of 1878, in which Howard asked Kramer to get a mortgage from complainant on the excuse that it was not right, and a promise to make it right. She also produced one Berry, who from 1878 to 1880 was a constable and special policeman in Phillips burgh, who swore that in 1880 one of the Mellicks, either father or son, swore out a search-warrant for certain stolen goods alleged to be stolen from the house at New Village, and to be concealed in Mrs. Keiter's (complainant's mother's) house, and placed it in his bands for execution, and that Howard Mellick especially instructed him that, in searching the house for the specified articles, he should also look for any papers between his father and Emma, and take them. This witness further swears that later on, in 1882, the father called him into the son's store, and the son, in the father's presence, asked him to make an attempt to procure some man to get Emma to go with him to some place to be agreed upon, where Howard and other witnesses might come upon them, and find them in a compromising position, and said that he would give him $300 if he could succeed in so doing. The witness, after some urging, promised to see what could be done, and with that view called on one Gray, a resident of Phillipsburgh, whom he knew to be on friendly terms with complainant and her family. Ho opened the subject to Gray, and offered to divide the reward with him; but Gray declined to have anything to do with the affair, and Berry so informed the defendant. Gray is also produced, and corroborates Berry fully. He further swears that, some time after Berry's visit, Howard Mellick called on him, and made the same proposition to him that Berry had, stating that, if his father did not get the divorce, he could drive Emma into a settlement. The witness declined to entertain the proposition. Howard then proposed to him to make use of his intimacy with the complainant's family to get the mortage into his hands, and take it away,—in plain words, to steal it,—which the witness also declined to undertake. All this evidence is denied by the defendant, except that he asked Berry to hunt for evidence of adultery on the part of the complainant. But, considering the manner and appearance of the witnesses on the stand, and the circumstantial manner in which they gave their evidence, I am constrained to believe it, and as a consequence can place little or no confidence in Howard Mellick's evidence, where unsupported by other evidence. And, it seems to me, it must also cast a heavy shade of doubt upon the bona fides of the case which he has attempted to make on the merits; for, when it is considered that he was a man of education and experience, and aided by competent counsel, whom he consulted at once, the question naturally arises, if this man took this assignment in good faith, for the consideration and with the motives stated, and without any knowledge or suspicion that his father contemplated marriage with the complainant, or meditated any fraud upon her, why should he resort to such nefarious and wicked means to regain possession of the mortgage? And why, when, three or four years later, he became the owner of the mortgaged premises, did he not bring suit to test the right of the complainant to hold the incumbrance while yet his father and Kramer were alive, and Hillburn in the full possession of his mental faculties?
I come now to defendant's evidence. He was sworn on the second day of the hearing, and stated that the Kramer bond and mortgage, and a bond and mortgage made by himself and one Case to his father for $2,000, and which was assigned to him by his father at the same time with the Kramer bond and mortgage, were both kept by him for his father in the inside lock-box of his safe, to which he alone—or, in his absence, his clerk—had the key, and to which his father did not have access; that the Kramer bond and mortgage had been so kept from the time they were given. As to this he was very positive. That both these bonds and mortgages were taken out of the safe by him on the morning of the 18th of March, and handed to his father to be taken to Mr. Smith's office for the purpose of preparingassignments of the same to him, so that the papers in question could not have been, shortly before that date, in his father's possession, and by him taken to complainant's house, and to Hillburn's. He further swears that he received both bonds and mortgages from his father on that day at Smith's office, after their assignment, and placed them at once in a pigeon-hole in the safe outside this lock-box. He swears that the bargain by which the assignment to him was made, was made on the business day next before the 18th of March, which was on Saturday, the 16th; and he produces his clerk, Kugler, who swears that on that day he had occasion to go to the safe in the counting-room to get some change, and there found the father and son, the latter in the act of taking a bundle of papers from the safe; that he made known his errand, whereupon Howard handed him the bundle of papers, directing him to get from it the Kramer bond and mortgage for his father, and stating that he (Howard) would make the change, and that the witness did so, handing the bond and mortgage to the father; that the same evening the father told him that he intended to have the securities transferred to Howard, but that it was too late to do it that evening. Early the next morning, the witness continues, the old gentleman asked him to open the safe, and get the papers, but he was unable to do so, for want of the key. This witness further swears that, on the 2d day of April, Kramer and the elder Mellick came to him in the store, and the latter asked to get for him the Kramer bond and mortgage from the safe, for the purpose of indorsing a payment of interest thereon; that he unlocked both the outer door and the inner box, and looked in the latter for the desired papers without finding them, then looked in the outer pigeon holes, and there found them, and handed them to Mr. Mellick. The indorsement of the interest on the bond is dated April 2d.
The complainant's witnesses, and part of the defendant's, including the defendant himself, were sworn on the 17th and 18th of October, 1889. Kugler, the clerk, was sworn January 30, 1890. After a further postponement, and on February 27, 1890, defendant produced the register of receipts, and deliveries of instruments to be recorded, kept by the clerk of Warren county, by which, with other evidence, it clearly appeared that the Kramer mortgage was not taken from the clerk's office until the afternoon of March 14, 1878, when it was sent to Mr. S. C. Smith by private hands, and could not have reached him until night. Mr. Smith has no recollection of the circumstances, but the fair inference is that he wrote to the clerk for it. It cannot be inferred from anything in Howard's testimony that he directed Smith to send for it. To so infer is to run counter to the whole tenor of his evidence. Hence the inference is that Henry Mellick directed Smith to recall the mortgage; and, if so, then Smith naturally handed it to the old gentleman, and could not well have done so until the 15th, which was Friday. The arrangement for the transfer to Howard was made between father and son on Saturday, the 16th, and the transfer was made on Monday, the 18th. From all this evidence, defendant argues that the whole story of complainant and her mother is willfully false; that there never was any agreement to assign these securities to the complainant, nor any concluded contract to marry, until after the 18th of March; and so the assignment of that date could not have been, and was not, made in contemplation of the marriage, or for the purpose of practicing upon the complainant the fraud actually perpetrated on her.
Other evidence was introduced tending to contradict the complainant, and show her unworthy of belief. She swore that the $500 for outfitting was paid her early in January, and produced a bill of furniture bought on the 7th of that month for $125, which she says was paid out of that fund, and kept at her mother's house until about April 1st, and that the balance of the outfit was purchased during the latter week in March. Defendant produces a Mr. Norton, a merchant in Easton, who swore that, on the 28th of March, complainant and the elder Mellick were at his store,—complainant coming in first, and waiting for Mellick,—and that Mellick then paid for the bill of goods previously ordered of the witness, and another bill bought by complainant of one Cooke at witness' request, and on his order and credit, the two amounting, together, to about $200; and that one of the parties—and, as he seemed to think, Mr. Mellick—produced a roll of bills containing much more than enough to pay the witness, and that Mr. Mellick, after counting it, paid him, and handed the balance to the complainant. And defendant argues from that evidence that the first and only payment of the $500 was made then and there, in Norton's store. But a careful examination of the evidence of this witness does not satisfy me that it can be relied upon on the point of the roll of money being produced by Mr. Mellick. It may well have been that the complainant had the money in her possession, and, being illiterate, and unfamiliar with large money transactions, and particularly with such a peculiar one as was then to be carried through with Mr. Norton, was unwilling to make the payment without the assistance of Mr. Mellick, and procured his attendance there for that purpose.
Again, complainant, on cross-examination, swore that she never received any moneys from Mr. Mellick before marriage except the one sum of $500. Defendant, by way of contradicting her, and subject to the objection of the complainant, called Case and Kugler, his clerks, who swore that, for several months previous to the marriage, complainant was in the habit of coming to the store, and calling out the elder Mellick to the sidewalk, and after a short conversation the latter wouldcome into the store, take money from the drawer, and go out, and apparently hand it to her. Kugler swears that he made tickets for the money so taken, and put them in the drawer, and reported them to Howard Mellick. This story is corroborated by Case, and denied by the complainant. I am constrained to believe that some such incidents did take place, but I am not at all sure that, so far as relates to the payment of money, they took place before the marriage. There was ample occasion and opportunity for them to occur after the marriage, and during the temporary separation, from August, 1878, to April, 1879, and again in 1880, and afterwards; and the two clerks may well be mistaken as to the time. Here defendant had it in his power to determine the truth in this conflict of testimony by producing the account which he must have kept of these tickets for money taken by his father from the drawer, but fails to do so.
Mr. Hillburn was examined before me at his house at Easton, where I attended, by consent of counsel, for that purpose. He was broken mentally and physically by paralysis. On the afternoon of October 17th, at Belvidere, at the close of the first day's evidence, complainant's counsel asked for time and opportunity to take his evidence on be half of the complainant, if he was mentally fit to be examined at all, about which they expressed grave doubt. Defendant's counsel admitted his inability to leave his house, but asserted with much confidence his full capacity as a witness. I at once offered to attend at his house to take his evidence, and fixed the next morning for that purpose. The defendant and his junior counsel proceeded at once to the witness' house, and had an interview with him as to his evidence; and I believe that either the defendant, or some one in his behalf, had seen him previously. Mr. Shipman saw him privately in the morning just before he was sworn. His memory was very faint and imperfect, and his mind quickly wearied under the few questions which were put to him by the counsel on each side, and by myself; and it was agreed by all that, although the evidence must stand for what it was worth, it was of little value. But, so far as it goes, it seems to me, taken as a whole, to corroborate, rather than con tradict, the story of the complainant, in its main features.
With regard to the actual custody of the mortgage itself prior to the 18th of March, complainant is, of course, hopelessly contradicted. Still, I am not satisfied that she willfully falsified in that behalf. It abundantly appears that the elder Mellick had free access at all times to all parts of the son's safe; that, if he wished access to the inner box, he could get it by applying to his son, or, in his absence, to his clerk. There is no pretense that Howard ever refused his father access to his papers. He could easily have procured the deed of the house and lot, and the Kramer bond, at any time prior to March 18th, and have taken them to complainant, and told her either that the latter was a mortgage, or was secured by a mortgage. And just here is a piece of evidence which is somewhat significant. Both mother and daughter swear that he did tell them he had such a mortgage before he produced it, and that they separately inquired of Kramer, who was their landlord, about it, and learned from him that such was the case. It is also quite possible that they went, as detailed in the evidence, to the office of Hillburn, the first time with the two papers,—the deed and the bond,—instead of the three, and that Mellick undertook to procure the mortgage from the clerk's office at a future day, and that all the other circumstances occurred precisely as testified to by them. It would not be unnatural for these women, at this distance of time, to have become confused in their recollection as to when they first saw the mortgage. But I do not think it possible that such illiterate and rather simple-minded persons could have created in solido such a circumstantial story as they gave on the stand, especially that part of it in which they represent Mr. Mellick, after getting complainant's consent to a postponement of the wedding, and a withdrawal of the securities from Hillburn, as going to Hillburn for them, and then coming back to them, and saying that Mr. Hillburn had declined to let him have the papers without their consent. It seems to me that they could not have invented such a story. Of course the old gentleman needed the bond and the old deed, as well as the mortgage, for use in carrying out his scheme of fraud in making the assignments to Howard, and the deed to his son Jacob. Counsel for the defendant felt the force of this evidence of a postponement and withdrawal of the securities from Hillburn, and attempted to compress the whole series of incidents as detailed by mother and daughter into the 18 days which intervened between the two assignments; but I think a careful consideration of the facts and evidence shows that supposition to be impossible. His theory is that the old gentleman took the bond and mortgage from the safe, and handed them to the complainant, a day or two after the 18th of March; that she kept them over Sunday, the 24th, and on Monday, the 25th, went with her mother and the old gentleman to Hillburn, just as she testified was done in February; that during the week commencing with the 24th the old gentleman procured their possession from Hillburn in order to collect his interest, and replaced them in his son's safe, where they remained over Sunday, the 31st, and Monday, April 1st, and that on Tuesday, April 2d, they were taken out of the safe, as testified to by Kugler, and the interest paid and indorsed, and then were returned to Hillburn. But this not only crowds the events in point of time more closely than the evidence will warrant, but is inconsistent with Kugler's evidence that he looked in the inner box for the papers on the morning of the 2d of April, with the expectation of findingthem there, and not in the outside compartment; the old gentleman standing by, and looking on. But it is further to be remarked of this theory that it tends strongly to prove that the original object of Henry Mellick in making the assignment of the 18th of March was fraudulent, as it would appear from it that he proceeded immediately after the 18th of March to make use of it for the purpose of deceiving his future wife. But the effect of the revelation of the true history of the whereabouts of the Kramer mortgage is also quite inconsistent with the defendant's evidence as to its custody and manipulation. We have seen that it probably reached the father's hands from Smith on the 15th of March; and it is not at all probable that by the 16th it had been packed away in a bundle of papers in the inner box of the son's safe, and so hidden that the son would ask a clerk to hunt it out in order to hand it to the father. Some such incident as is testified to by Kugler may have occurred, but it probably occurred with regard to the $2,000 Case bond and mortgage, which, it must be remembered, was equally with that of Kramer the subject of the pending discussion between the father and son.
On this part of the case, if it wore necessary to come to a definite conclusion as to whether the incidents detailed by the complainant and her mother as having occurred prior to March 18th actually so occurred or not, I should, I think, upon a careful consideration of all the circumstances and evidence, feel constrained to conclude that they did, omitting, of course, the presence of the Kramer mortgage. Of course, the mere absence of the mortgage from the papers taken to Hillburn's office before March 18th will not materially weaken whatever equity arose to complainant out of the transactions taking place prior to that date. But I do not think it necessary to adopt a definite conclusion as to that part of the case, or to consider the value of the equity claimed by complainant's counsel to have arisen therefrom, and have spent so much time upon a review of these facts for two reasons: First, that the parties may have the benefit of my view of them; and, second, for their bearing on what I conceive to be the real, controlling question in the case, viz., did Henry Mellick make the assignment in question to his son for the purpose of practicing a fraud upon the complainant—either that which he afterwards carried into execution, or any other—based upon an apparent ownership of this bond and mortgage? Counsel for the defendant contend that he did not, and that it was made in good faith for the purpose stated by the son, and without any thought of, or by way of preparing for, the trick he afterwards played upon complainant,—which, counsel contend, was entirely an after-thought,—or for any other fraudulent purpose as against her. I cannot so believe. The evidence satisfies me that this contract of marriage was under negotiation for several months before it took place; that money was advanced on the strength of it as early as January. In that connection, the money borrowed from the elder Mellick from the bank on January 2d is significant. That the mother and daughter were all the time holding out for the best bargain they could get, and the lover was resisting them as best he could, and that finally, in his infatuation, he promised them this bond and mortgage, and sent to the clerk's office for the mortgage, for the purpose of carrying out his contract; that either he, of his own accord, seeking some loop-hole of escape, adopted the scheme afterwards caried out, or Howard, becoming aware of his father's intention to marry, and fearing his future wife would get hold of his money, besought him, as he admits he did, to put his property beyond her reach, and thus, unwittingly, it may be, suggested to him the trick by which he might succeed in getting the bride, and keeping the price he agreed to pay for her; and that the old gentleman executed the assignment to Howard with this view, and intending to play the very trick on his bride which he afterwards did play. He knew very well that, even if, in order to give the affair proper color, or to satisfy Howard, he must deliver the securities to Howard, yet he would have ample occasion and opportunity to regain their possession before the day fixed for the wedding, and so be able to deliver them to his wife at the altar; and he also, no doubt, thought that there was no danger that these simple, ignorant women, or their Pennsylvania counsel, would suspect him of any bad faith, or even think of examining the records for previous assignments. When he produced the securities themselves, in which he was named as the obligee and mortgagee, the possession of them was quite enough proof, to even a cautious business man, that he was still the owner of them. My conclusion is that the assignment to Howard was made for the purpose on the part of the father of practicing a fraud on the complainant.
Complainant's counsel contend that Howard participated in that fraud. This, of course, is not to be lightly inferred, but must be proven. Many circumstances point in that direction. Howard denies that he had any suspicion that his father meant to marry the complainant. But I am satisfied that he must have more than suspected it. Mrs. Bowers, an inmate of his family in 1877, swears that the attention paid by the father to the complainant was discussed openly between father and son, and that she heard Howard say that his father intended to many the complainant. The defendant admits that he knew that his father was visitor g complainant, taking her to entertainments, and spending a great deal of money on her. In fact, these attentions were notorious, and he admits that they were the immediate cause of his solicitation of his father to make the assignments in question. He admits he saw Kramer daily. In September, 1879, he appears as a judgment creditor of Kramer forupwards of $3,000. In the summer of 1878, he asked Kramer to get possession of the mortgage; and when complainant, after the theft of August, 1878, made written demand on Kramer for the bond, he came at once with the demand to defendant. From these facts, it is easy to believe that Kramer reported to defendant the inquiries made of him by complainant and her mother about the mortgage as early, according to their story, as January or February. From all this, it is evident that Howard's principal object in procuring the assignments was to place these securities beyond the reach of the influence of complainant, both as the object of his father's present infatuation, and as his probable wife. Such object was not necessarily fraudulent, but is consistent with honesty and fair dealing. A wife, on her marriage, acquires no property rights in her husband's personalty; and so the case is quite distinct from that of a wife, before the married woman's act, disposing of her personalty in view of present marriage, as in Williams v. Carle, 10 N. J. Eq. 543, and that class of cases. I conclude, therefore, that the proofs are not sufficient to warrant the conclusion that defendant was cognizant that his father made the assignment for a fraudulent purpose.
It is common learning that marriage is a valuable consideration, and quite as much so as cash. The complainant, then, stands in this court precisely as if, instead of marrying Mr. Mellick, she had paid him $5,000 in cash for this security. This was not disputed, but was frankly admitted at the argument, by counsel for the defendant. She stands, therefore, as a bona fide purchaser for full value. The earlier assignment having been made for the purpose of defrauding the complainant, and she having paid a valuable consideration for the later one, it seems to follow that a title under the later must prevail over that under the earlier, unless the claimant under the earlier deed was both innocent and ignorant of the contemplated fraud, and also paid or parted with a valuable consideration for it; and then he will be protected only to the extent of such consideration. The case seems clearly within the thirteenth section of our statute of frauds. That section is broader in its scope than its prototype, the 27th of Elizabeth, c. 4, which declared "that all and every conveyance," etc., "of, in, or out of any lands, tenements, or other hereditaments, made to defraud subsequent purchasers, shall be void, etc., against such subsequent purchasers," etc., while our statute declares that "every conveyance, grant, or alienation of lands, tenements, or hereditaments, or of any estate or interest therein * * * made with intent to defraud * * * such person or persona * * * as shall purchase any such lands, tenements, or hereditaments, or any estate, right, or interest therein, shall be deemed and taken to be utterly void" as against such purchasers, etc. It seems to be the rule in England that a sum of money secured by a charge on land is not within the English statute, (May, Fraud. Conv. 204,) and that an ordinary estate under an ordinary mortgage is in the same category, though no direct adjudication to that effect was cited. But it seems to me impossible to hold that the interest of an ordinary mortgagee of lands in New Jersey is not within the language, as well as the spirit, of our statute. That language is too broad and sweeping to admit of such construction; and, although our courts have reduced a mortgage interest before forfeiture to a low level, (Sanderson v. Price, 21 N. J. Law, 637; Wade v. Miller, 32 N. J Law, 296; Osborne v. Tunis, 25 N. J. Law, 633; Shields v. Lozear, 34 N. J. Law, 496; Beta v. Verner, ante, 206, court of errors and appeals, Feb. term, 1890,) yet no case has gone so far as to say that the mortgagee has neither estate nor interest in the lands mortgaged. The defendant's assignment conveyed to him the bond and mortgage in question, and with them the interest of the mortgagee in the mortgaged premises, and it is upon this theory that the act providing for the recording of such instruments is based. But I do not think it necessary to resort to the statute in question in order to determine the true value of defendant's assignment. The legislation in question has always been construed as merely declaratory of the common law, and resort might always, and without the aid of the statute, have been had to equity for relief against the transactions aimed at by it. Lord MANSFIELD, in Cadogan v. Kennett, Cowp. 432, at page 434, says: "The principles and rules of the common law, as now universally known and understood, are so strong against fraud in every shape that the common law would have attained every end proposed by the statutes of 13 Eliz. c. 5, and 27 Eliz. c. 4. The former of these statutes relates to creditors only; the latter, to purchasers. These statutes cannot receive too liberal a construction, or be too much extended, in suppression of fraud." And Lord CRANWORTH, in Perry-Herrick v. Attwood, 2 De Gex & J. at page 40, 27 Law J. Ch. 121, at page 128, (a better report,) says: "If the intention of the parties to the transaction here in question was that the Misses Attwood should have this security, but that, nevertheless, Mr. Attwood should keep the title-deeds, that he might be enabled thereby to deal with the estate in favor of third parties, I am strongly disposed to think that the security comes within the statute. It certainly comes within its principle. If the case does come within the statute, the only difference that it makes is that the Misses Attwood have not the legal estate, and so could not maintain ejectment against the plaintiffs, but that would not in any degree oust the jurisdiction of this court; such jurisdiction having existed long prior to the statute, and not being in any degree defeated by an act which can only have been intended to give a more clear and distinct jurisdiction, and a more extended remedy." The supremecourt of the United States, in Hamilton v. Russel, 1 Cranch, 310, at page 316, lays down the same doctrine, and applies it to the case of a slave. And see May, Fraud. Conv. 3, 4. I know of no reason why this court should not lend its aid to protect against fraud, in dealing with a chattel interest of this character, as readily as with pure interests in realty, where, as here, there is a lack of legal remedy, and the question arises in a cause in which this court has unquestioned jurisdiction; and, I may add, it seems to me it would be a reproach to our system of justice if it could be said of it that it would permit such a transaction as that now before us to stand, and leave the party defrauded by it remediless.
It remains to consider what rights the defendant acquired under this assignment, supposing him, as I do, to be both innocent and ignorant of the particular fraud contemplated by his father. He swears that he gave, and promised to give, a valuable consideration for his assignment, the particulars of which are as follows: First, that he forgave his father a present indebtedness which he had against him of upwards of $600, and further advanced to him upwards of $600, immediately after the making of the assignment, and before he had notice of the fraud, and that he supported him during his life-time, and buried him, all in pursuance of a verbal contract so to do, made at the date of the assignment. The fact that the deed it self is expressed to be in consideration of one dollar, and love and affection, and reserves the interest on the security during the father's life-time, and that it was drawn by the son's counsel, is strong evidence against this contention, but is not conclusive; and the defendant may, nevertheless, overcome it by evidence of what the real consideration was. But the frame and allegations of his answer are more serious obstacles in his way. He is a man of intelligence and business experience, and had from the start the aid of competent counsel; and it is difficult to conceive why, if the facts afterwards set up at the hearing really existed, they were not set out in the answer; and it is equally difficult to understand how counsel could, on that basis of fact, have set out in their answer, as they did, these very items of consideration as having been paid years after the assignment, and that the board and lodging were furnished in consideration of the interest which accrued on the securities. Again, the answer alleges that the items going to make up the $1,400 of moneys advanced are entered on defendant's books; and yet not a scratch of a pen was produced at the hearing in support of these payments, except a promissory note of the father for $250, which matured, and was paid by the son, on the 4th of April, 1878, two days after the father collected his interest from Kramer. Nor are the items given. Their absence is a marked feature in the case. But, accepting the statements of the defendant made at the hearing as true, and allowing him to amend his answer, as asked at the hearing, to correspond with this statement, it is still to be remarked that defendant cannot be allowed for the debt of over $600 which he says his father owed him on the 18th of March, since a prior indebtedness will not avail him as grantee of a fraudulent deed; and, as to his undertaking to support his father, that was not in writing, and nothing was done under it until long after he had full notice of the fraudulent character of his assignment, and the superior equities of complainant, which absolved him from all obligation in the premises.
Counsel for the defendant stoutly combated the position that defendant could be allowed for no more than he actually advanced, and further claimed that the payment of a less sum than the admitted money value of the securities was sufficient to invest him with a complete title to the whole fund secured by them. The cases cited by counsel in support of this contention were all conveyances of land, or leasehold interest in land, and, so far as applicable to the present case, were instances of dealing with the familiar English rule, to which I will again refer, that purely voluntary settlements of land were void under 27 Eliz. c. 4, as against subsequent purchasers, no matter how free they were of any actual fraud. Of late years the English judges have caught at very small matters of consideration for such voluntary settlements, in order to relieve against the hardship of this rule. In one of the cases cited by counsel, (Bayspoole v. Collins, L. R. 6 Ch. 228.) Lord HATHERLEY (page 232) says: "With regard to the observation which was made by counsel, that purchasers would hardly know how they are to deal with property where there has been a voluntary settlement, I do not think anything could be more unsatisfactory than what we find to be the state of the law under which a person, with full and distinct knowledge of a voluntary settlement, is able at any time to overthrow it. It is quite established that, although a settler cannot get rid of such a settlement directly, he can do so indirectly, by making a mortgage of the property to somebody else for the purpose of being able to destroy the settlement. Now, it is not for me to say whether the mode by which the court has attempted to remedy some of the evil of this state of the law, namely, by holding that a small and inadequate consideration is sufficient to support such a settlement under the statute of Elizabeth, has diminished the extent of the mischief. But so it is, that a very small consideration is admitted to be sufficient." Price v. Jenkins, 5 Ch. Div. 619, went on the same ground. It was a mere direct attempt by the settler to avoid his settlement by making a mortgage. This line of cases has no application to a transfer of an interest capable of precise measurement in money value, nor to one where there is actual fraud in the prior settlement or conveyance. With regard to so much of the consideration as consisted ofpast indebtedness, it does not appear that the defendant gave up any security, or lost any opportunity to enforce any such, or was prejudiced in any way in regard to his father's indebtedness to him, by what occurred in connection with the assignment. The abstraction of the securities, and their assignment to complainant, absolved him from all obligation to forbear the enforcement of his debt. That such past indebtedness would not sustain the equitable plea of bona fide purchaser seems clear. Basset v. Nosworthy, 2 Lead. Cas. Eq. (4th Amer. Ed. 1877) 77, 82, et seq; Allaire v. Hartshorne, 21 N. J. Law, 665, 668, at bottom; Holcomb v. Wyckoff, 35 N. J. Law, 35. This subject is discussed by Vice-Chancellor VAN FLEET, and the rule settled in this court, in De Witt v. Van Sickle, 29 N. J. Eq. 209. It thus appears that defendant's right, on his own showing, is reduced to such actual cash payments as he can show that he made to his father, or on his account, in good faith, at or after the date of his assignment, and before notice of the fraud practiced on complainant; and as to them he offers no proof but his own oath, except as to the $250 note. I have already shown that, for the reasons given, I can place little or no confidence in his unsupported evidence. But there is another fact proven which relieves this part of the case of all difficulty. At the same time that his father assigned to defendant the Kramer bond and mortgage, he also assigned to him a bond and mortgage for $2,000, made by the defendant himself and one Case to his father, (called in the evidence the "Case bond and mortgage,") which assignment was expressed to be made upon precisely the same consideration and terms as that of the Kramer securities. There was no contention that any other or further consideration was given for this assignment than that expressed in it. The two transfers constitute one transaction, and were made upon the same consideration, whatever that was. There was no contention that the smaller security was not perfectly good, and worth its face value. It was, in fact, the obligation of the defendant himself, and was, of course, ample to cover defendant's claim for past indebtedness and present payments. Then, as to the Kramer security, he paid his interest on it, as appears by indorsements on the bond, until about the "time that the defendant became the purchaser of the equity at sheriff's sale; and from that time forward the defendant, as he says in his answer, paid, as he was bound to do, the interest, by supporting his father. At all events, there was no pretense at the hearing that the interest on the two securities, together with the principal of the smaller one, was not amply sufficient to indemnify the defendant in the premises; and indemnity is all that he is entitled to.
But defendant relies with great confidence on the fact that his assignment was duly and immediately recorded, so that complainant is chargeable, under the statute, with constructive but conclusive notice of it, and that her equity is destroyed thereby. I cannot accede to that proposition. It is true that the complainant could not set up the ordinary plea of bona fide purchaser without notice, and by it overcome a prior assignment for value. But she is not seeking so to do, and the defendant's case is not that of a prior purchaser for value. The real question is whether constructive notice to the party intended to be defrauded can eliminate from the transaction the fatal element of fraud inherent in it, or add to it the fatal want,—a valuable consideration. I think it cannot. Notice has no curative or creative power. It cannot purify that which is essentially vicious, or in any wise or degree change the inherent character of a transaction. It preserves rights, but does not create them. It is on this principle that it was originally held that notice of the prior settlement to the subsequent purchaser would not defeat the latter's superior right under 27 Eliz. c. 4. Within five years after the passage of that act in Gooch's Case, 5 Coke, 60, WRAY, C. J., says: "If A., seised of land in fee, makes a fraudulent conveyance with the intent to deceive and defraud purchasers against the statute of 27 Eliz., and continues in possession, and is reputed as owner, B. enters into discourse with A. for the purchase of it, and by accident B. has notice and knowledge of this fraudulent conveyance, and notwithstanding concludes with A., and takes his assurance of him, in this case B. shall avoid the said fraudulent conveyance by the said act, notwithstanding his notice; for the act has by express words made the fraudulent conveyance void as to a purchaser, and, forasmuch as it is within the express purview of the act, it ought to be so taken, and expounded in suppression of fraud." And the report continues: "According to the opinion of the Lord WRAY, it was unanimously agreed and resolved by the whole court of common pleas, (Pasch. 3 Jacobi,) in evidence to a jury in an electione firmœ, on a lease made by Standen to House, plaintiff, against Bullock, defendant, that, where one Bullock had made a fraudulent estate of his land, within the said act of 27 Eliz. to A., B., and C, and afterwards, notwithstanding, offered to sell the said land to Standen, and before assurance thereof made by Bullock, Standen had notice of the said fraudulent conveyance, and notwithstanding proceeded, and took his assurance of Bullock, that Standen should avoid (by the said act) the said fraudulent conveyance; for the notice of the purchaser cannot make that good which an act of parliament made void as to him. * * * But in that case the purchaser is not deceived, for the fraudulent conveyance whereof he has notice is void as to him by the said act, and therefore shall not hurt him, nor is he, as to that, in any manner deceived. "And see the language of Lord ELLENBOROUGH in Doe v. James, 16 East, 213. The maxim that "he is not deceived who knows that he is deceived" has no application to such a case, and in fact can have noapplication to any case of mere constructive notice, however conclusive. The English courts, however, went further than the doctrine laid down in Gooch's Case, and finally held that a voluntary settlement, though made in good faith, and without any present Intention to defraud any person, was fraudulent against the subsequent purchaser, however remote in time. The result was to give the settlor power to revoke his settlement at his option. This doctrine has often been criticised and regretted in England, (Doe v. Manning, 9 East, 59; Roberts, Fraud. Con v. 39-41; May, Fraud. Con v. 204,) and has been repudiated in this country, (Sterry v. Arden, 1 Johns. Ch. 261; Verplank v. Sterry, 12 Johns. 536; Cathcart v. Robinson, 5 Pet. 280; Beal v. Warren, 2 Gray, 447.) But a careful consideration of the numerous criticisms made upon the English doctrine will, I think, show that they are directed more against the notion involved in it of constructive fraud, imputed by relation retroactively to a transaction which was originally innocent, than to the position that, where the transaction was originally fraudulent, notice of it to the subsequent purchaser could not purge the fraud, and validate it. I have found no decision holding that notice in such cases validates the transaction, nor any suggestion that the doctrine now contended for is unreasonable or illogical. Judge SPENCER prefaces his bold attack on the English doctrine in Verplank v. Sterry, 12 Johns. 536, at page 557 with this language: "It is a sound and settled principle that notice to a purchaser of a prior fraudulent deed will not affect the subsequent purchaser, and that such subsequent purchaser may avail himself of the fraud in the first deed; and the reason for this is solid, because, if he knew the transaction, he knew it was void by law." And see Roberts, Fraud. Conv. 39-41. The same principle is acted upon in the case of conveyances of land made for the purpose of defrauding future creditors. It is well settled that, in order to avoid such conveyances as to subsequent creditors, they must have been conceived in actual, as distinguished from mere constructive, fraud; and it is equally well settled that when such fraud clearly appears the registry of the fraudulent deed will not help it, when attacked by a subsequent creditor.
In this connection, I cannot but think and remark that there must, in a case like this, be a distinction between the effect of actual notice and that which is constructive merely. Chancellor KENT evidently so thought in Sterry v. Arden, 1 Johns. Ch. 261; and see the remarks of Mr. Bishop in 2 Bish. Mar. Worn. § 345, and also Roberts, Fraud. Conv. 39 et seq. Absence of actual notice must at least have the effect of showing the perfect good faith of the subsequent purchaser. Nor do I think there was any lack of prudence or caution attributable to complainant in this transaction. Here the obligee and mortgagee named in a bond and mortgage produced those instruments with no marks upon them indicating that he had parted with his property in them, but with an indorsement showing a recent payment of interest to him as owner, and he proposed to assign them for full value. I think an ordinary business man would not, under the circumstances, have been considered lacking in prudence and caution if he had advanced money upon them without examining the records for prior assignments. If carelessness be attributable to any party, it is to the defendant, who permitted his father to have full access to those papers, and seems to have expected that he would himself have the possession of them for the purpose of collecting the interest.
I think the complainant's equity is clear, and that she is entitled to the relief prayed for, namely, an ordinary decree for foreclosure. In computing the amount due, interest will be allowed from the date of her husband's death. If that can be agreed upon, the court can compute the interest without a reference.