Lindsley v. O'Reilly

• Decision Date: 09 August 1888
• Citation: 50 N.J.L. 636,15 A. 379
• Parties: LINDSLEY v. O'REILLY.
• Court: New Jersey Supreme Court

15 A. 379

50 N.J.L. 636

LINDSLEY

v. O'REILLY.

Court of Errors and Appeals of New Jersey.

August 9, 1888.

(Syllabus by the Court.)

Error to supreme court.

This was an action of ejectment brought by Catharine O'Reilly against Lindsley, the plaintiff in error, to recover lands situate in the county of Atlantic. By direction of the judge a verdict was given for the plaintiff. This writ of error brings up exceptions to that direction, and also errors assigned upon the admission of evidence.

Thomas B. Earned and D. J. Pancoast, for plaintiff in error. Peter L. Voorhees and James H O'Reilly, for defendant in error.

DEPUE, J. Patrick O'Reilly died in 1881. In his life-time he was seized of a tract of land in the county of Atlantic, in this state, the subject of controversy in this suit. By his will, dated December 5, 1877, proved before the surrogate of Atlantic county July 5, 1881, and letters testamentary granted thereon, he devised his entire estate to the plaintiff, his wife, for life. Exception was taken to the admission of a certified copy of this will; but the printed case does not contain a full copy of the will, nor does any assignment of error touch the competency of this evidence. It must be assumed that this will was duly executed to devise lands under the laws of this state, and that the same was duly probated to make a certified copy competent evidence. On this presentation of title the plaintiff would have been entitled to a verdict. The obstacle in the way of the plaintiff's recovering, in virtue of her title under her husband's will, arose from a deed made by O'Reilly and wife to one Henry Francis Felix, on the 14th of January, 1861. This deed purported to be an absolute conveyance, in fee-simple, for the consideration of $18,000. To sustain a title under her husband's will, it was necessary for the plaintiff to overcome or extinguish the legal title thus conveyed. The plaintiff contended at the trial that the deed to Felix was in fact a mortgage, and that the debt or liability for which it was given was paid and satisfied; and that, on the discharge of the obligation for which the conveyance was made, the estate of the mortgage was extinguished. In a trial at law it is not competent to show by oral testimony that an absolute deed was in reality a mortgage. In our judicial system the jurisdiction to convert an absolute deed into a mortgage by parol evidence is exclusively in the equity courts. The competency and effect of the evidence produced by the plaintiff for this purpose are the issues raised by the hill of exceptions and assignments of error.

Felix died in 1866. By his will he gave all his property for the benefit of his wife, Alicia Kate, and a charitable society known as "The Sisters of the Immaculate Heart of Mary," and made the Right Reverend James F. Wood, Roman Catholic bishop of Philadelphia, executor. Felix, at the time of his death, resided at Reading, in the county of Berks, Pa. On the 4th of December, 1867, O'Reilly filed a bill of equity in the court of common pleas of the county of Berks, against the Right Reverend James F. Wood, executor of the last will and testament of Henry F. Felix, Alicia Kate Felix, widow of said Henry F. Felix, and the religious order of "The Sisters of the Immaculate Heart of Mary." The bill set out that the Right Reverend James F Wood was a resident of Philadelphia, that Alicia Kate Felix resided in Reading, and the religious order of the Sisters of the Immaculate, Heart of Mary was a society established in Reading. It charged that the deed of conveyance made by O'Reilly to Felix was in legal effect a mortgage; that the same was made as security to indemnify Felix against his liability on certain promissory notes made by O'Reilly, and indorsed by Felix, and discounted by the Farmers' Bank of Reading, and under protest, and that subsequently the said notes were fully paid and satisfied by the said O'Reilly; that the said Felix sustained no loss or damage in consequence of the said indorsements; and prayed a reconveyance of the legal title. The defendants named in the bill appeared and filed an answer. By consent of parties, an examiner was appointed, January 27, 1868, who filed his report November 1, 1869; and in September, 1880, the case was brought on for hearing by consent on the bill, answer, and report of the examiner; and on the 20th of September, 1880, a decree was signed, in which, after reciting that the court, being satisfied that the allegations of the plaintiff's bill were correct and true, and that all the notes indorsed by Felix and liabilities incurred by him for O'Reilly had been by O'Reilly fully paid, discharged, and satisfied, it was ordered and decreed that the Right Reverend James F. Wood, executor of the last will and testament of deceased, should execute and deliver to Patrick O'Reilly a deed of reconveyance of the premises in fee-simple. All the parties to the suit resided in Pennsylvania. The Pennsylvania court had jurisdiction of the parties, and also of the subject-matter of the suit. The contested problem is the effect of its decree upon the title to lands in this state.

If the decree can effect the title to lands in this state, it extinguished the Felix title without a reconveyance; for in this state a mortgage is regarded as a mere security for the debt or liability for which it is given, and payment or satisfaction of the debt or liability discharges the mortgage, and revests the mortgaged premises in the mortgagor without a reconveyance. Shields v. Lozear, 34 N. J. Law, 496; Kloepping v. Stellmacher, 36 N. J. Law, 176; Jackson v. Turrell, 39 N. J Law, 329; Schalk v. Kingsley, 42 N. J. Law, 32. Ever since Penn v. Lord Baltimore, 1 Ves. Sr. 444, it has been established law that, in cases of contract, trust, or fraud, the equity courts of one state or country, having jurisdiction of the parties, are competent to entertain a suit for specific performance, or to establish a trust, or for a conveyance, although the contract, trust, or fraudulent title pertains to lands in another state or country. The principle upon which this jurisdiction rests is that chancery, acting in personam and not in rem, holds the conscience of the parties bound without regard to the situs of the property. It is a jurisdiction which arises when a special equity can be shown which forms a ground for compelling a party to convey or release, or for restraining him from asserting a title or right in lands so situated, and is strictly limited to those cases in which the relief decreed can be obtained through the party's personal obedience. If it went beyond that, the assumption of jurisdiction would not only be presumptious, but ineffectual. West. Pr. Int. Law, 57, 58. The decree in a suit of this aspect imposes a mere personal obligation, enforceable by injunction or like process against the person, and cannot operate ex proprio vigore upon lands in another jurisdiction, to create, transfer, or vest a title.

The cases on this subject are numerous. They are collected in the note to Penn v. Lord Baltimore, 2 Lead. Cas. Eq. 1806, (923,) Brett, Lead. Cas. Eq. 254; Ewing v. Ewing, 9 App. Cas. 34; Norris v. Chambres, 29 Beav. 246; Massie v. Watts, 6 Cranch, 148; Wood v. Warner, 15 N. J. Eq. 81; Vaughan v. Barclay, 6 Whart. 392. In Davis v. Headley, 22 N. J. Eq. 115, the complainant obtained a decree in the circuit court of Kentucky against Headley, that a conveyance of lands in New Jersey made by the complainant should be rescinded and set aside, the possession restored, and the defendant enjoined from setting up the conveyance. He then filed a bill in the court of chancery of this state to enforce the decree. The jurisdiction of the parties and of the subject-matter of that suit was undisputed. The bill to enforce the decree was nevertheless dismissed. Chancellor ZABRISKIE, in dismissing the bill, declared that it was a well-settled principle of law, in the decisions of England and of this country, and acquiesced in by the jurists of all civilized nations, that immovable property is exclusively subject to the laws and jurisdiction of the courts of the state or nation in which it is located, and that no other laws or courts could affect it. He added: "I find no case in which a statute, judgment, or proceeding in one country has been held to affect such property in another country, or beyond the jurisdiction of the sovereign or court making the statute or decree." After referring to Penn v. Lord Baltimore, and the cases in which decrees for specific performance of contracts relating to lands without their jurisdiction were made, the learned chancellor said: "But in these cases it is admitted, as it was by Lord HARDWICKE, that these decrees could not affect the land, but could only be enforced where the court had jurisdiction of the person of the defendant, and thus compel him to execute the conveyance. In such cases it is the conveyance, and not the decree, that has the effect." A similar precedent in the federal courts enforced the same view. Watts v. Waddle, 1 McLean, 200, on appeal, 6 Pet. 389. Lands situate in Ohio were covered by two patents, one issued to Powell, the other to Watts. To remove this cloud upon his title Watts commenced a suit against Powell's heirs in the circuit court for the district of Kentucky, and obtained a decree sustaining his title. The court had jurisdiction of the parties. By this decree the defendants were required to convey the premises to the complainant. A statute of Kentucky authorized the court, in case the defendant in such a suit failed to convey, to appoint a commissioner to make conveyance. By the decree a commissioner was appointed, and, no conveyance having been made by the parties, a deed was executed by the commissioner. A suit, afterwards brought in the federal circuit court of Ohio, brought in question the effect of the decree of the Kentucky court, and of the commissioner's deed in execution of it,...