Doughty v. Miller

• Decision Date: 18 October 1892
• Citation: 25 A. 153,50 N.J.E. 528
• Parties: DOUGHTY v. MILLER et al.
• Court: New Jersey Court of Chancery

25 A. 153

50 N.J.E. 528

DOUGHTY

v. MILLER et al.

Court of Chancery of New Jersey.

Oct. 18, 1892.

(Syllabus by the Court.)

Bill by Charles Doughty against Charles Miller and others to have a deed absolute on its face declared a mortgage and a reconveyance ordered. Bill dismissed.

William H. Vredenburgh, for complainant.

Charles H. Davis and John F. Hawkins, for defendants.

VAN FLEET, V. C. This case stands in this anomalous condition: The complainant, in giving his evidence on the hearing, swore that the principal ground on which, by his bill, he rests his right to relief, has no foundation in fact. His bill was tiled to procure a decree declaring that a deed, absolute on its face, was executed by him as a mortgage, and that inasmuch as he owed the grantee nothing then, and has not subsequently become indebted to her, the deed should be declared to be a nullity, and a reconveyance ordered. The facts which the complainant makes the foundation of his right to relief, as set out in his bill, are the following: He is nearly 76 years of age, and illiterate, being unable either to read or write. He has been twice married. By his first wife he had 11 children, all of whom are still living. She died in 1869, and he married his second in January, 1872. His second was his junior, she being, at the time of their marriage, about 30 years of age and he about 57. No issue was born of this marriage. The complainant, at the time of his second marriage, owned a house and lot at Fair Haven, in the county of Monmouth, which he occupied as his home. On their marriage, his second wife went there to live, and continued to live there until she died. In March, 1890, the complainant and his wife verbally agreed to engage in the business of keeping a summer boarding house on the premises where they lived. As part of this arrangement, it was agreed that the capacity of the house should be enlarged, by additions and improvements, and used for the purposes of the business, and that the parties should each contribute their time and labor to the business, and share and bear its profits and losses equally. After this agreement was finally concluded, the bill says that the wife "proposed that your orator should convey the house and premises to her by deed, so as to secure to her, against any accident, the payment of the share which would fall to her in said business, and that she would reconvey the same to your orator upon the settlement of that business." The complainant acceded to this proposition, and subsequently, on the 6th day of March, 1890, conveyed his house and lot, through the pastor of the church of which he and his wife were members, to his wife by deeds absolute on their face. Both deeds were recorded within two or three days after their execution. The land conveyed was afterwards improved by the erection of additions to the house, and other structures, at a cost of over $2,000. From the summer of 1880 up to and including the summer of 1890, the business of keeping a summer boarding house was carried on on the premises. It was successful, the profits each season being in excess of $500. The wife received all the money and kept all the profits. No settlement was ever made, and the wife never accounted to her husband for the profits, nor paid him for any part of them. He never asked for a settlement, nor for any of the profits. The wife died childless and intestate on the 24th day of November, 1890, leaving one brother and three sisters, who are her heirs at law and the defendants to this suit.

Taking the. facts embraced in the preceding statement to be true, and assuming that they comprise all the material facts of the case, there can be no doubt that they make a case which entitles the complainant to a decree; for no principle of equity jurisprudence is more firmly settled than that effect must be given to a deed according to the intention of the parties, so far as the law will allow, and consequently, when a deed, absolute on its face, is executed as a security, it must be declared to be a mortgage. The effect to be given to such an instrument must, however, be determined by the intention of the parties, existing at the time of its execution. If they then meant that it should operate as a conveyance, and pass the title absolutely, no subsequent change of intention will make it a mortgage. The defendants deny both of the principal facts on which the complainant's right to relief rests. They deny that an agreement was ever made between the complainant and his wife to carry on any business for their joint benefit, and they also deny that the conveyance to the wife was executed as a security. The issue thus made up casts the burden of proof on the complainant. The deeds, standing alone, by their own inherent force show plainly that the complainant's object in executing one of them, and procuring the other to be executed, who to pass the title to the land from himself to his wife absolutely and unconditionally. That is the construction which they must receive, and that is the legal effect which must be attributed to them, especially as they have stood undisputed for over 10 years, until it is shown, by clear and convincing evidence, that such was not their purpose, but that they were executed merely as a security.

Now, as to the proofs. The complainant, in less than three months after his bill was filed, made an affidavit to obtain an injunction to prevent the defendants from further prosecuting an action of ejectment they had brought against him to recover the land in question, in which he swore that he and his wife, in the year 1880, determined to carry on the business of keeping a summer boarding house on his premises, for their joint and equal benefit and profit, and that they, in the words of the affidavit, "mutually and verbally agreed that they, the said premises, together with the furniture and personalty, should be conveyed to and vested in the said Sarah, so that in case of any accident to deponent, either from death or otherwise, she, said Sarah, should be secured for the payment of her share of the proceeds of that business, and that upon the settlement or closing of the business the property was to be reconveyed and revested in deponent." The facts here verified are identical, in substance, with those alleged in the bill. The complainant's affidavit was sworn to on the 3d day of April, 1891, and he was examined as a witness, on his own behalf, on the 29th day of October, 1891. To render it easy to understand such parts of the complainant's evidence as will now be quoted, it is perhaps necessary' to say that the complainant made the conveyance to his wife through the Reverend Jacob Fried, and that Mr. Fried went with the complainant to the office of the counsel who drew the deeds, and was present when the complainant gave...