Baumann v. Naugle

• Decision Date: 14 January 1925
• Citation: 127 A. 263
• Parties: BAUMANN v. NAUGLE et al.
• Court: New Jersey Court of Chancery

127 A. 263

BAUMANN

v. NAUGLE et al.

Court of Chancery of New Jersey.

Jan. 14, 1925.

(Syllabus by the Court.)

On final hearing of bill by Bertha Baumann against Reginald D. Naugle and others. Relief prayed for denied.

See, also, 127 A. 267.

Earle A. Merrill, of Westfield, for complainant.

Augustus C. Nash, of Westfield, and W. S. Angleman, of Plainfield, for defendants.

BUCHANAN, V. C. The present bill initiates still another chapter in the voluminous litigation amongst the parties to this suit. It is filed by complainant, the holder of a certain mortgage at Westfield, N. J., seeking a declaration of her rights under that mortgage—under the provisions of the Uniform Declaratory Judgments Act (P. L. 1924, c. 140, p. 312), which was enacted subsequent to the prior proceedings in this court for the same purpose (Naugle v. Baumann [N. J. Ch.] 125 A. 489).

Complainant's husband, Karl Baumann, owning the lands in question, contracted July 19, 1920, to sell and convey them to Herbert McVoy. Complainant was not a party to this contract. McVoy assigned to his wife, Mary McVoy. Baumann, instead of performing the contract, conveyed to complainant, and she conveyed to one Cooley, November 9, 1920, taking back a purchase-money mortgage for $2,700, which is the subject of the present bill. Mrs. McVoy sued the Baumanns and Cooley and obtained decree that Cooley convey to her. McVoy v. Baumann, 93 N. J. Eq. 300, 117 A. 717; Id., 93 N. J. Eq. 638, 117 A. 725.

Subsequent to the affirmance of this decree Cooley tendered Mrs. McVoy a deed which she refused to accept, as not being in proper form in compliance with the decree. Thereupon Cooley executed and delivered a deed of conveyance of the premises to Ruth C. Naugle, subject to the mortgage in question. Thereafter Mrs. McVoy recorded a copy of the decree.

Immediately after the original Baumann-McVoy contract Reginald Naugle (Ruth Naugle's husband) had contracted with McVoy for the purchase and conveyance of the premises, or a portion thereof, and he has filed bill in this court, still pending, for specific enforcement of that contract against the McVoys.

Complainant has made the McVoys, Cooley, and the Naugles defendants to her bill, and brought them into court, and asks a determination as to whether or not her mortgage is a valid and subsisting lien upon the lands described therein. There is no doubt in my mind but that complainant's mortgage is not a valid and subsisting lien upon the lands. It was determined in McVoy v. Baumann, supra, that Mrs. McVoy was the equitable owner of the premises; that neither complainant nor Cooley were bona fide purchasers for value without notice, and that Cooley therefore held the title in trust for Mrs. McVoy, and the decree directed him to convey that title to her. There is no reference to the mortgage in that decree for the very good reason that it was not in evidence; there was no evidence as to the mortgage, or as to what the facts were as to payments made or due between Cooley and the Baumanns. See the opinion, p. 379 (117 A. 717). But, of course, the practical effect of that determination and that decree was to eliminate any and all rights or claims of the Baumanns and Cooley, of, in, or respecting these lands, as against Mrs. McVoy, so far at least as such rights or claims arose out of the transaction there sub judice—excepting, of course, those rights which were preserved in the decree, namely, to the payment of the balance of the purchase money. If the mortgage had been in evidence in that suit, undoubtedly the decree would have directed its cancellation, in order to accomplish a complete determination of the rights of the parties. Mrs. Baumann had the opportunity in that suit to present the mortgage and her claims thereunder; that she failed to do so does not prevent the matter from being res adjudicata. As a matter of fact, upon the request of herself, and her husband and Cooley, the decree provided that the unpaid balance of purchase price due from Mrs. McVoy should be paid into court, so that their several equities or interests therein might be thereafter determined as amongst themselves.

As I understand complainant's argument, it is not contended that the situation is otherwise than what I have so far indicated. Her contention is that her rights under the mortgage have become revived by subsequent occurrences. The argument is succinctly as follows: That the deed tendered by Cooley to Mrs. McVoy was a proper deed, fully complying with the directions of the decree in the original suit; that Mrs. McVoy*s refusal to accept that deed operated to reinvest the equitable title in Cooley, who still held the legal title, and he thereby became vested of the entire title absolutely, and that this therefore operated to validate the mortgage in question.

(It is stated in complainant's brief that the mortgage, although dated November 9, 1920, was not delivered until September 30, 1922— the date of its recording. There is no such allegation in the bill, and no admission in the McVoys' answer; nor do I recall any evidence thereof in the proofs; while, on the contrary, the mortgage bears an acknowledgment of its execution and delivery by Cooley on November 12, 1920. I think, however, that this question is immaterial, for I am quite willing to assume, arguendo at least, that if Cooley became reinvested of the equitable title, the mortgage, if in fact delivered previously, would thereby have become just as valid and effective as if executed and delivered thereafter.)

It is further argued by complainant that the decree in the original suit did not operate to divest the legal title from Cooley and vest it in Mrs. McVoy, under the forty-fifth section of the Chancery Act (1 Comp. St. 1910, p. 426), for the reason that that statute, by its express terms, operates only if "the party against whom the said decree shall pass shall not comply therewith by the time appointed;" and that in the present case Cooley did comply with the decree, and hence the statute could not operate to make the decree a conveyance. This latter argument opens up some interesting questions, and, if sound, might prove unsettling to a considerable number of titles resting on such decrees. In the instant case, however, it will be sufficient to point out that complainant did not in fact comply with the decree by the time appointed, and hence that the decree did become operative under the statute as a conveyance from Cooley to Mrs. McVoy.

In the first place the "time appointed" by the decree was "within 10 days" from the date of the decree, February 24, 1922, and the tender of the deed was not made until June 23, 1922....