Loder v. Allen

• Decision Date: 04 December 1892
• Citation: 25 A. 541,60 N.J.E. 631
• Parties: LODER v. ALLEN et ux.
• Court: New Jersey Court of Chancery

25 A. 541

60 N.J.E. 631

LODER

v. ALLEN et ux.

Court of Chancery of New Jersey.

Dec. 4, 1892.

(Syllabus by the Court.)

Bill by Alfred Loder against Frank B. Allen and Anna S. Allen, his wife, to foreclose a mortgage and enforce a trust. Bill dismissed.

The other facts fully appear in the following statement by Pitney, V. C.:

The bill is in the nature of a bill to foreclose. It sets out that on the 12th of December, 1890, John F. Coogan was indebted to one English in the sum of $532.50, for money loaned and advanced by English to Coogan for the purpose of paying for certain shares of stock bought for Coogan, and that Coogan, for the purpose of securing that debt, executed and delivered to Allen a deed of conveyance, whereby he conveyed to Allen a certain tract of land situate in Hudson county, describing it, and that Allen, on the same day, gave back to Coogan a paper writing in these words "Newark, N. J., December 12, 1890. 1 hereby agree to sell and convey to John F. Coogan, any time within six months from date, in consideration of the sum of $500, with interest to date, to be to me paid for such transfer, the premises heretofore conveyed by himself and wife to me, which premises lie on Everett street, village of Arlington, Hudson county, N. J. Frank B. Allen." The bill further sets out that on the 30th of January, 1891, Coogan conveyed all his right, title, and interest in the premises to the wife of Allen, and charges notice to Mrs. Allen of the previous con veyance to her husband. The bill further charges that on the 30th of January, 1892, English assigned and conveyed to the complainant the debt, due from Coogan to him, together with all his right, title, and interest in the before mentioned premises; alleges that Allen denies that he received the deed in trust for English, or that he holds the title in trust for the complainant; prays answer without oath, and that Anna S. Allen may be decreed to pay the amount of principal and Interest due the complainant, and that Frank B. Allen may be decreed to hold the premises in trust for the complainant, and be ordered to convey the same to the complainant and his heirs, and for other relief. Allen and wife answer jointly, and set up that on the 18th of October, 1890, a little less than two months before the conveyance, English asked Allen to indorse his note for $500, and stated to him that Coogan was indebted to him in that amount, and that, if he (Allen) would indorse English's note for his accommodation at four months for that amount, he would procure Coogan to con vey to Allen, as security therefor, the lots of land in question; and, in consideration of that promise, Allen indorsed the note of English, bearing date October 18, 1890, payable at four months, for $500; that English procured the note to be discounted for his (English's) accommodation; that at its maturity it was not paid by English, but was duly protested, and Allen was obliged to pay the same, and that the deed of conveyance from Coogan to Allen was made to him in pursuance of that promise, and thereupon Allen made and executed the defeasance before set forth; that the conveyance was acknowledged by Coogan and his wife before an officer not authorized by the law to take acknowledgments of deeds, but was duly recorded. The answer further sets out that in the month of January, 1891, Allen discovered the defect in the acknowledgment, and that English being at that time insolvent, and Allen knowing that he would be obliged to pay the note, applied to Coogan, and obtained from him an absolute conveyance of the land to his wife, paying him therefor $100 with his wife's money, and that Coogan conveyed the land to his wife. The answer further alleges that at the maturity of the note for $500, which he had indorsed for English, Allen paid it with the money of his wife. At the hearing, the proofs showed that Allen indorsed English's note as set forth in his answer; that English obtained the money on it, and that Allen was obliged to pay it, and did pay it, at maturity; that English was a stockbroker in the city of Newark, who dealt through a house in New York, and took orders from speculators in Newark for the purchase and sale of stocks on the New York stock board; that both Coogan and Allen were dealers with him; that Coogan, in the latter part of November, or the early part of December, was indebted to him in $275; that English pressed him for payment or security, and Coogan, at English's request, conveyed the premises in question to Allen for the expressed consideration of $500; took from Allen the contract to reconvey above set forth, with the understanding that the conveyance should stand as security, first, for the $275 he already owed English, and that he should have the further credit of $225 for further stock speculations. These speculations he made, and thereby lost the balance of the $500, and $32.50 in addition. English failed on the 5th of January, 1891, and was at that time indebted to Allen for balances due Allen on stock speculations, to the amount of about $4,500. Just how long that indebtedness had been accruing did not appear. With regard to the allegation of the answer that the conveyance by Coogan to Allen was made to secure the promissory note which he had indorsed for English, the evidence of Allen and English is directly in conflict, Allen swearing positively that the arrangement was as set up in his answer, English swearing that no such thing was mentioned between them at all, and stating that the conveyance was made to Allen at his request, with the object and purpose to put it, as he said, beyond his (English's) temptation to make any improper use of the land so conveyed. The deed from Coogan to Allen was acknowledged before a justice of the peace. In January, 1891, after English's failure, Allen discovered this, and procured a new deed from Coogan to Mrs. Allen, paying him therefor $100. This money, as well as the $500 paid for the note, seems to have been his own funds. A year after English's failure he made an assignment to the complainant of a long list of assets, consisting of debts due to him, amounting to many thousand dollars, among others the debt due against Coogan for $532.50, and in the assignment was inserted a short conveyance of his right, title, and interest in the premises above mentioned.

Howard W. Hayes, for complainant.

William B. Guild, for defendants.

PITNEY, V. C (after stating the tacts.)

If Mr. English's account of the transactions is the true one. and there was no understanding that Allen was to hold the conveyance to secure him for' indorsing English's note, or for what he owed Allen, then the effect of the transaction was, of course, to make Allen a trustee for English,—a trust resulted in English's favor, without any declaration in writing. The present action is one with a double aspect: In the first place, to enforce the trust against Allen; and, in the second place, to foreclose the mortgage. This double aspect must be borne in mind in considering the equities of the parties. There is no allegation that Coogan has any defense to the action, and no defense is made on that score. The defense actually made is aimed at the enforcement of the trust against Allen, and it is twofold: First, that, while this transaction was in tieri, English became indebted to Allen in a sum much larger than that secured by the...