Opinion
01-16-1893
ROBESON v. ROBESON et al.
George M. Shipman and Henry S. Harris, for complainant. James E. Hays and George M. Robeson, for defendants.
Original bill by James A. Robeson against George M. Robeson and others for the foreclosure of a mortgage. Referred for accounting.
George M. Shipman and Henry S. Harris, for complainant. James E. Hays and George M. Robeson, for defendants.
PITNEY, V. C. The bill is filed by James Arthur Robeson to foreclose a mortgage which he holds as assignee of the personal representatives of his father, James M. Robeson. The mortgage is dated March 80, 1878, and was given by Anna M. Robeson, the elder, George M. Robeson and wife, Joseph P. Price and Emily Robe9on, his wife, Anna M. Robeson, the younger, and William P. Robeson, being the widow and four children of William P. Robeson, deceased, to James A. Robeson. The bill recites that those persons were indebted to the mortgagee in the sum of $5,000, and, in order to secure it, gave the mortgage in question, conditioned to pay $5,000, according to the tenor of four several bonds, of $1,250 each, executed by George M. Robeson, one of the four children. James M. Robeson died in 1885, and his administrator assigned the mortgage to the complainant on the 7th of October, 1889. The widow and William P. Robeson, two of the mortgagors, died before bill filed, and the equity of redemption became thereby vested in the three survivors, who have answered. The defense set up by the answer is that George M. Robeson was the executor of his father's will, with power of sale, etc.; that the money was borrowed for the uses of the estate of his father; that from the death of his father, in 1864, up to the date of the mortgage, and from that time on during the life-time of James M. Robeson, the mortgagee, he was the agent of the executor, to take care of the real estate covered by the mortgage, and to collect the rents, and make sales of portions of it, and that the understanding between the executor and James M. Robeson was that the money so coming into the hands of James M. Robeson from such rents and sales of real estate should be applied, first, towards the payment of the interest, and then towards the principal due on said mortgage; that said James M. Robeson, commonly called "Col. Robeson," collected large amounts of rents, and also received large sums of money, from sales of portions of the property mortgaged, so that about the 1st of April, 1882, four years from the date of the mortgage, it was paid down to about $3,000; that in March, 1884, Col. Robeson asked the defendant George M. Robeson for the payment of the balance due on the mortgage, and George M. Robeson gave him his note on account of it for $2,500, upon which $500 has been paid; and that Col. Robeson had collected further sums for rents and sales of property, so that at the time of his death there was little or nothing due upon the mortgage. The answer was intended to be so framed as to include a cross-bill, and it prays that the mortgage may be declared to be paid, and that it be delivered up and canceled of record. No replication was filed, and a decree pro confesso was takenupon the answer as upon a cross-bill against the complainant. The cause was brought to hearing in this state of the pleadings, and at the hearing the principal allegations of the defense were thoroughly established by the proofs, except that they did not go so far as to show that the mortgage had ever been paid in full.
The defendants produced two papers,— one in the handwriting of Col. James M. Robeson, and found among his papers after his death, and produced by the complainant on call; the other in the handwriting of Mr. Dahlke, and handed to Gen. George M. Robeson by Col. Robeson on or about the 1st of April, 1882. The paper in the handwriting of Col. Robeson, or one like it, of the same purport, was, as Gen. Robeson swears, presented to him at Washington about April 1, 1882, and Gen. Robeson thinks that he signed it, and handed it to Col. Robeson. The paper produced is unsigned, and in these words: "This is to certify that J. M. Robeson, my agent, rendered to me his accounts of rents received by him and moneys for the lot sold to A. Kimmenour, and for moneys disbursed by him from April 1, 1877, to April 1, 1882; and, if no errors have been made in the calculation, there is now due to the said J. M. Robeson three thousand dollars on my four bonds, secured by a mortgage made to said J. M. Robeson by myself and wife, and others bearing date March 30, 1882, [error for 1878,] in which statement I am credited with my promissory note dated September 29, 1877, to said J. M. Robeson, for the payment of one thousand dollars two months after date, which he has this day surrendered by him, which was given as an advance on rents." The other paper, in the handwriting of Mr. Dahlke, produced by the defendants, purports to be a statement of an account between George M. Robeson and James M. Robeson, and it charges Gen. Robeson with his note, dated September 29, 1877, $1,000, and interest on it to the 1st of April, 1878; then credits "cash due G. M. Robeson, $537.28," leaving a balance of $497.72. It then charges interest on this to April 1, 1879, and again credits a balance due April 1, 1879, of $205.86. Then charges interest to April 1, 1880. Then charges $5,000, presumably the mortgage debt. Then credits a balance due Gen. Robeson, April 1, 1880, of $2,135.91; leaving a balance due, April 1, 1880, of $3,148.76. Then charges interest for two years, up to April 1, 1882; showing due on that date $3,599.48. It then credits "balance due G. M. Robeson, April 1, 1881, $72.40; balance due G. M. Robeson, April 1, 1882, $644.99:" total, $717.39,—which, deducted from $3,599.48, leaves $2,882.09 due.
It will be observed that by this paper credits are given to Gen. Robeson for five several yearly balances, presumably on receipts from the rents and sales of part of the estate. I have compared these yearly balances with the balances as made up from Col. Robeson's book, and not one of them equals the amount shown on the book. The receipts charged on the book for the year ending July 1, 1880, are $3,604.60, and the charges for the same year are $1, 187.67, in which is included two years' interest on the mortgage, $700. That charge of interest is not inconsistent with the statement, because that statement does not charge interest on the, $5,000 from April 1, 1878, to April 1, 1880; but the balance due for the year 1880, including the charge for interest, is $2,416.73. The same discrepancy appears in the other balances, which may be accounted for by a charge for commissions and services; but no entry is made of any such charge on the books. The defendants also produce a receipt given by Col. Robeson to Gen. Robeson on the 12th of March, 1884, for Gen. Robeson's note for $2,500, at three months, providing that the same, when paid, shall be credited on these bonds. Gen. Robeson swears that at the time Col. Robeson told him that that was about the amount due. On this note $500 was paid by Gen. Robeson. These documents, in connection with the evidence of Gen. Robeson, seem to establish clearly enough that the mortgage was at one time treated by Col. Robeson as paid down to about $2,500 or $3,000. The complainant attempted to meet the case so made by the defendants by facts tending to establish an estoppel against them. He, however, admitted the payment of $500 on account of the note of $2,500 given in March, 1884. Complainant, in support of the estoppel, set up a receipt or acquittance given by George M. Robeson to Col. Robeson on or about the 4th of October, 1884, more than two years after the alleged payment and reduction of April 1, 1882, and more than six months after the giving of the note for $2,500. That receipt is partly in the handwriting of Col. James M. Robeson, and partly in the handwriting of Gen. George M. Robeson. It is without date, but an entry on Col. Robeson's books shows that it was given about the 4th of October, 1884, and Gen. Robeson swears that that accords with his recollection. The body of the receipt is in these words: "Received of J. M. Robeson, my agent, for collecting rents on the Belvidere property of the estate of William P. Robeson, deceased, $2,100, to April 1, 1884, to be credited as interest on my bonds. George M Robeson." The words, "to be credited as interest on my bonds," are in Gen. Robeson's handwriting, and he swears that they were added to the receipt by him just before he signed it. It will be observed that $2,100 is just six years' interest, at 7 per cent., upon $5,000, and it is argued by complainant that that was a direct admission by Gen. Robeson that the whole of the principal money was still due on the bonds. Gen. Robeson swears that at the time he signed that receipt his cousin, the colonel, was ill at his home in Belvidere; and that he, the general, ca me down from Delaware Water Gap, where he was staying, to visit him, and found him in great distress, and that his cousin asked him to sign this receipt, and that he did not wish to make any trouble for him while he was suffering as he was, and that he added the words above quoted, and signed it, without thinking of the effect of it. I think the entries of charges and discharges on Col. Robeson's book ofaccount, standing alone, and quite irrespective of the transaction between the parties just referred to, show that it would be a great injustice to the defendants to permit such force and effect to be given to this receipt. I do not think that either Col. Robeson or his administrators would be entitled to make any such use of it. But if such use be made of it, and if it be held that, notwithstanding the state of affairs between the parties, on April 1, 1882, and the transactions between them of that date, there had been no actual payment of any part of the principal of the mortgage debt by an application thereto of the balance of moneys in the hands of Col. Robeson, the result will be that Col. Robeson was thereby left in debt to Gen. Robeson, as trustee of his father's estate, in a considerable sum of money; and the real dispute here between the parties is whether Col. Robeson's estate shall account for that money, with or without interest. In effect, all that the defendants ask is that the complainant shall allow interest on balances in his father's hands.
The next matter set up by the complainant, by way of estoppel, is a short account, stated or rendered, which was handed to Gen. Robeson by Mr. John H. Dahlke, late at night, at an hotel in New York, early in July, 1886. It was made up by Mr. Dahlke, who had been a student in the law-office of Col. Robeson, and who had assisted him in collecting the rents, and, after his death, his personal representative, up to that time. It assumes to credit Gen. Robeson with the rents and charge disbursements, including commissions and interest on the bonds up to the 1st of April, 1886, without taking any account of the principal, or allowing any payments thereon; and shows a balance due Gen. Robeson as of April 1, 1886, of $738.80. Neither Gen. Robeson nor Mr. Dahlke have any present recollection of what occurred at the time that account was handed to the general, except that it was late at night; but a letter written shortly afterwards by Mr. Dahlke to one of the administrators of Col. Robeson shows that Gen. Robeson did find fault with it, both as to the matter of interest and also as to the matter of commissions. Now, these are probably the only matters in dispute between the parties. Later on, in the latter part of July, Gen. Robeson, by letter of attorney, constituted Mr. Dahlke his agent and attorney to take care of the real estate in question, and to collect the rents, and for nothing else; and about the same time wrote to him that, if the administrators of Robeson had any money to pay him, they might do so. Mr. Dahlke then made some additions to a copy which he had kept of the balance-sheet handed to Gen. Robeson in July, which resulted in a balance due Gen. Robeson of $898.38. He sent him his check for $900, and wrote on the back of the copy of the statement which he had kept, and to which he had added the additions just mentioned, a receipt from the estate of James M. Robeson of $898.38 in full of all demands, and signed it, "George M. Robeson, Executor of the Estate of William P. Robeson, Deceased, by John H. Dahlke, His Attorney." It is sufficient to say of that receipt that it was given without any knowledge or authority whatever of Gen. Robeson, and was entirely outside and beyond any authority, either written or oral; and, as to the receipt of and use by Gen. Robeson of the check for $900, it is to be observed that there is no proof that he knew that it was given for any balance struck. It was for nearly $200 more than the balance shown on the statement furnished him, and would seem to indicate that the executors of Col. Robeson yielded, to a greater or lesser extent, to the criticisms which he had made upon that statement. Later on, interviews and correspondence took place between Gen. Robeson, and Cooper Robeson, one of the sons and administrators of Col. James M. Robeson, in which, while Gen. Robeson claimed a credit for a payment of $500 made on the note of $2,500, he seems to have quite forgotten the earlier transactions, which occurred between the date of the mortgage, in 1878, and April, 1882, by which the principal of the debt was or should have been so largely reduced. Without going into the details of these interviews and letters, it is sufficient for me to say that, in my judgment, if they had all been laid before an outside party who was asked by the administrators of Col. Robeson to advance the money on this mortgage, I think that such outside party, acting with ordinary, prudence, should have hesitated about advancing the money, and should have insisted upon having a moredirect and positive admission from Gen. Robeson that the whole amount was due. But I do not 3nd it necessary to determine the question whether or not the conduct of Gen. Robeson would be sufficient, under certain circumstances, to estop the defendants from setting up the defense insisted upon. It is entirely clear that, as against the personal representatives of Col. Robeson, the defense exists. It is also a well established rule that the assignee of a mortgage, taken years after it has become due, takes it subject to all equities existing between the mortgagor and mortgagee, and that the mortgagor can only be deprived of such equity by such conduct on his part as estops him from setting it up against such assignee. It is also quite clear that, in order to enable the assignee to take advantage of such estoppel, he must be what is called a bona fids purchaser without notice; that is, he must have advanced his money or other thing of value upon the strength of the conduct out of which the estoppel arises. It is also well settled that he is only protected by the estoppel to the extent to which he has actually parted with his money or other valuable thing. Campbell v. Nichols, 33 N. J. Law, 81, at page 88; Holcomb v. Wyckoff, 35 N. J. Law, 39; Ruckelschaus v. Oehme, (N. J. Ch.) 22 Atl. Rep. 184, at page 186. The complainant in this cause was sworn as a witness, and was the last witness sworn, and he entirely fails to state that he paid any money for this mortgage, or that he executed any release to the administratorsfor any share of his father's estate for it, and, in fact, was entirely silent as to what consideration was paid or allowed for it. He merely says that he took it from his father's estate. He does not deny that he was acquainted with the state of the accounts between the parties. He was represented by able and experienced counsel, who could not have overlooked the importance of showing to what extent he had parted with value for this security. Under these circumstances, I think the estoppel entirely fails.
It is said that it is a great hardship on the complainant to be compelled to go into this account at this late day. But the materials for it are all in existence. It appears that Col. Robeson kept a book of account with the estate of William P. Robeson, in which he entered all the charges and discharges. The accuracy of the entries on that book, so far as receipts and payments of money went, were not disputed at the hearing. It is, indeed, alleged by the defendants that Col. Robeson failed to charge himself with the receipt of the consideration money for one piece of land conveyed to him. That, so far as appeared at the hearing, is the only disputed item, except the matter of commissions and interest; and the rule is familiar that, where parties undertake to alter or surcharge accounts of such long standing, they assume a burden of cur-responding weight. It is evident, from the statement made by Mr. Dahlke in 1886, that Col. Robeson, while charging interest against the defendants for the full face of the four bonds, had in his hands for years money enough to have paid a large part of the principal. Of this, $2,200 was received within a period of eight months— $700 in September, 1879, and $1,500 in April, 1880—from the sale of a part of the mortgaged premises, and the result of the payment was to show a large balance in Col. Robeson's hands. There should be an order of reference to ascertain the amount due on the mortgage, with instructions to the master to take into account the moneys received and disbursed by Col. Robeson on account of the estate of William P. Robeson; and in stating the account balances should be struck each year, and Col. Robeson should be charged interest on any balance in his hands, and allowed interest on any balance due him up to the date of the mortgage; and from that time on, as often as, upon a yearly balancing, there shall be found to be a balance in his hands, it should be applied towards the mortgage; and leave should be reserved to apply for directions pending the accounting.