Dawson v. Macknet

• Decision Date: 05 March 1887
• Citation: 42 N.J.E. 633,8 A. 312
• Parties: DAWSON, Jr., v. MACKNET and others.
• Court: New Jersey Supreme Court

8 A. 312

42 N.J.E. 633

DAWSON, Jr.,

v. MACKNET and others.

Prerogative Court of New Jersey.

March 5, 1887.

Appeal from decretal order of Essex orphans' court.

G. W. Hubbell, for appellant.

J. W. Taylor and J. R. Emery, for respondents.

RUNYON, ORDINARY. Jacob H. Dawson. Sr., deceased, who died July 9, 1882, by his will dated January 28, 1875, gave to the appellant, one of his sons, one-eighth of the residue of his estate. On the first day of April, 1878, the appellant received from his father $10,000, and gave to him his bond and mortgage of that date for the amount, payable in one year, with interest. The mortgage states that it was given to secure the payment of the appellant's bond to the testator of even date with the mortgage, conditioned for the payment of $10,000 in one year, with interest. After the death of the testator, the bond was not found among his papers, and the appellant, at the request of the executors, executed another one of the same description, tenor, and terms, to supply its place. On the twenty-first of February, 1880, the appellant received from the testator the further sum of $8,000, for which he gave him his bond and mortgage of that date, payable in one year, with interest. On the fourth of October, 1881, he received from the testator the further sum of $2,200, for which he gave him his promissory note of that date, payable to the testator's order, on demand, for value received, at the maker's office, No. 363 Halsey street, in Newark. On the thirteenth of April, 1882, the testator indorsed for the accommodation of the appellant the note of the latter of that date for $5,000, at four months, payable to the order of the testator; and on the twelfth of May following he indorsed another note of the appellant for the accommodation of the latter, of that date, for $5,000, at four months, payable to the order of the testator. Those two notes, for $5,000 each, were discounted by the National State Bank of Newark, at the request of the appellant, who received and applied to his own use the proceeds thereof. The notes did not. mature until after the death of the testator, and they were paid by his executors out of his estate. The appellant paid interest upon the $10,000 bond and mortgage up to July 1, 1882, and on the other bond and mortgage up to February 21, 1882. He claims that these various instruments—the bonds and mortgages and notes, including those indorsed for his accommodation—were all advancements made to him by the testator on account of his residuary share of the latter's estate, and were not intended to be evidence of indebtedness on his part to the testator or to his estate. The orphans' court decreed that the advance in question created debts from the appellant to the testator, and that the payment of the two $5,000 notes created a debt from the appellant to the testator's estate, and that any dividends of the estate that should become due to the appellant should be applied, first, to the payment of principal and interest upon the notes, and next to the principal and interest of the bonds and mortgages, and then to any other unsecured debt besides the notes, due from the appellant to the estate.

That the two $5,000 notes were not intended as advancements is clear. They were renewals of other notes, the originals of which were made by the testator for the accommodation of the appellant. The notes thus made or indorsed for the accommodation of the appellant, whether made by him or the testator, were always entered in the appellant's books as notes payable by him. The notes in question—those which were unpaid at the testator's death—were not made by the testator, but were merely indorsed by him, and his liability thereon was a merely contingent liability. The notes, as already stated, did not mature until after his death, and they were then paid by his executors. There is no evidence showing, or tending to show, that the testator gave the indorsements on account of the appellant's interest in his estate. And so, too, in regard to the note for $2,200. So far as appears, it was given to secure a loan of so much money from the testator to the appellant, and the money was advanced without any reference to the residuary legacy. The bonds and mortgages were made and taken, as was the note just mentioned, precisely as they would have been made...