Mertens v. Schlemme

• Decision Date: 01 February 1905
• Citation: 59 A. 808,68 N.J.E. 544
• Parties: MERTENS v. SCHLEMME et ux.
• Court: New Jersey Court of Chancery

59 A. 808

68 N.J.E. 544

MERTENS

v. SCHLEMME et ux.

Court of Chancery of New Jersey.

Feb. 1, 1905.

Bill to establish a lien on personal property by Frederick W. Mertens, trading as F. W. Mertens & Sons, against Henry H. Schlemme and Johanna Schlemme, his wife. Heard on bill, answers, replications, and proofs. Decree advised for complainant.

The bill sets up that about the month of October, 1903, Henry H. Schlemme became indebted to the complainant in the sum of $250, and that during the month of November, 1903, he promised to pay said indebtedness to the complainant out of the proceeds of the sale of certain real estate owned by Henry H. Schlemme; that at the time of the contracting of the indebtedness the said Henry H. Schlemme was seised in fee simple of a certain tract of land which is described in the bill, and that on or about the 1st day of December, 1903, he sold the same to Frederick Simon for $30,500, receiving, after the payment of the mortgages, taxes, and other liens upon the property, the sum of $4,117.71; that, Schlemme still refusing to pay the debt, complainant commenced an action in the district court of Hoboken against the said Schlemme, and on the 5th of January, 1904, recovered judgment for the sum of $254.52 damages and $16.12 costs, and that, for the purpose of obtaining satisfaction of the judgment, complainant caused an execution to be issued, which was returned unsatisfied, and thereupon, on the 12th day of January, 1904, the complainant petitioned the said district court and obtained an order requiring Schlemme to appear before a master in chancery and make discovery; that at said examination Schlemme testified that he had given the balance of the proceeds received from the sale of the property to his wife, Johanna Schlemme, the other defendant, and that Johanna Schlemme had deposited the same in bank in her own name; that Schlemme carried on a liquor saloon in a part of the premises; and that the debt was contracted by Schlemme for merchandise used in the saloon business.

The bill charges that the moneys deposited in bank by Johanna Schlemme are held in trust by her for the benefit of her husband, and prays that the defendants may discover the estate and property belonging to Henry H. Schlemme, and what disposition has been made of the proceeds of the sale of the real estate, and in whose possession the proceeds of the said sale have been since the 1st day of December, 1903, where the proceeds were deposited, who has possessed and enjoyed the proceeds, and that the judgment of the complainant may be declared to be a lien on said moneys and proceeds of said sale, and that said gift of the proceeds of the said sale made by Henry H. to Johanna may be declared to have been with the intent to delay hinder, and defraud the creditors of Henry, and to be fraudulent and void as against complainant and all other creditors, and that the said gift of the proceeds of the sale of the real estate may be returned to the said Henry Schlemme, or that the said Johanna may be declared and decreed to be a trustee for the complainant and such other creditors; and that out of the proceeds of such sale the complainant and other creditors may be decreed to be paid their debts.

The answer of the defendant Henry admits the indebtedness to the complainant, but denies that he promised and agreed to pay the same out of the proceeds of the sale of the real estate; admits that the deed was in his name at the time the indebtedness was contracted; admits the sale for the gross amount stated in the bill, and says that the net proceeds were not $4,117.71, but were $3,000; admits the action in the Hoboken district court, and admits the supplemental proceedings taken thereunder; admits that the balance of the proceeds from the said sale of the real estate were paid by him to his wife for money due and owing to her under an agreement made by him with her at the time the property was conveyed to him by his wife; denies that she holds the money in trust for him, and insists that said moneys are her sole property.

The answer of the wife admits that the deed to the property stood in the name of the defendant Henry, and sets out that the lands descended to her from her father, and that she, being desirous in case of her death that her husband should have the lands, conveyed the same to him upon the express condition that, should he ever sell said lands and premises in her lifetime, he would pay to her the proceeds derived from such sale; and that, in pursuance of such agreement, on the 1st day of December, 1903, he paid to her the sum of $3,000, which sum she used partly in establishing a business, and partly for maintenance and support of her family and other expenses, leaving a balance in her hands of from $100 to $150.

She denies that she holds the proceeds of the sale of the lands in trust, but insists that the same are her property.

John J. Fallon, for complainant.

William S. Stuhr, for defendants.

GARRISON, V. C. (after stating the facts). The proofs follow the pleadings very closely.

They show that Mertens, a dealer in cigars, sold goods to Henry H. Schlemme, who was carrying on a saloon at the corner of Eighth and Washington streets, Hoboken; that in October of 1903 Schlemme owed Mertens some $252, and, upon Mertens going to collect the bill, Schlemme informed him that he did not then have the money, but would pay him out of the proceeds of the sale of his real estate.

The real estate, including the building in which the saloon was, was conveyed to Schlemme, through an intermediary, by his wife, in 1897.

She testified that at that time they were living in New York, and were about to come to Hoboken to open up a saloon business in this building; that this building, together with other real estate, descended to her from her father, who died in 1809; that she consulted counsel to carry out an intention she had then formed, which was to place the property so that it would go to her husband in the...