Camden Safe Deposit & Trust Co. v. Lord

• Decision Date: 25 July 1904
• Citation: 67 N.J.E. 489,58 A. 607
• Parties: CAMDEN SAFE DEPOSIT & TRUST CO. v. LORD et al. (three cases).
• Court: New Jersey Court of Chancery

58 A. 607

67 N.J.E. 489

CAMDEN SAFE DEPOSIT & TRUST CO.

v. LORD et al. (three cases).

Court of Chancery of New Jersey.

July 25, 1904.

Bills to foreclose mortgages by the Camden Safe Deposit & Trust Company against George K. Lord and others. Decrees advised for plaintiff.

Lewis Starr and John S. Applegate & Son, for complainant.

Frank Durand, for defendants.

BERGEN, V. C. Three cases, each having the same title, were heard and will be disposed of together. In each the relief sought is a decree for the foreclosure of a mortgage and the sale of mortgaged premises. The three mortgages were given by George R. Lord, as executor of Mary E. Lord, to the Monmouth Trust & Safe Deposit Company, and by the receiver of that corporation assigned to the complainant. The power of the executor to make the mortgages is not disputed, and the only defense set up is that the mortgages were given by the executor to secure the payment of money borrowed by the executor "personally and for his benefit and use in his personal enterprises and undertakings, and was so used by him"; and also that no part was used for the benefit of the estate he represented; and that the power to mortgage could only be exercised for the benefit of the estate, and not for the personal use of the executor. There is no charge of fraud, or of knowledge on the part of the mortgagee corporation that the money obtained on the mortgaged security was to be misapplied, but it is sought to avoid the mortgages because the borrower did not, and did not intend, when the loan was made, to apply the proceeds to the carrying out of the trusts established by the instrument which conferred the power to mortgage, to the knowledge of the officers acting for the mortgagee corporation, and that the corporation is to be charged with the knowledge of its agents.

The last will and testament of Mary E. Lord gives to her children all of her estate, in equal shares, to be divided between them whenever her husband, the executor, should think it fit, and when, in his discretion, it became necessary and advisable to do so, with full power to the executor to sell her real estate whenever, and in such manner, as to quantity or terms, he chose; and also to mortgage her lands, or any part thereof— the substantial result being that the husband had an absolute control of the property, subject only to an accounting to his children.

The first mortgage was given April 2, 1901, to secure the payment of $2,000. No evidence was offered to sustain the answer filed in the cause of which this mortgage was the subject, and the complainant, having presented and proven its bond, mortgage, and deed of assignment, is entitled to a decree, and I will so advise.

The second mortgage was given May 8th to secure the payment of $2,500, and the third mortgage June 4, 1901, to secure the payment of $1,500. On May 8, 1901, an agreement in writing was entered into between Albert C. Twinning, president of the Monmouth Trust & Safe Deposit Company, David C. Cornell, the cashier of the trust company, and George R. Lord, as executor of Mary E. Lord, and also individually, by the terms of which a copartnership was formed for the purpose of buying and selling hogs, the business arrangement to terminate on the 8th day of October then next, and not more than $2,500 to be expended in the business. That the capital required for this enterprise was raised on the security of the mortgage of May 8th is beyond dispute, for on that day the mortgage was given, and the sum credited by the officers of the trust company to the account of "George. R. Lord, manager," and the testimony shows that it was drawn and used in the business venture...