Montgomery v. Beecher

• Decision Date: 19 March 1895
• Citation: 31 A. 451
• Parties: MONTGOMERY v. BEECHER et al.
• Court: New Jersey Court of Chancery

31 A. 451

MONTGOMERY

v. BEECHER et al.

Court of Chancery of New Jersey.

March 19, 1895.

Suit by John A. Montgomery, receiver, against Herbert W. Beecher and others, to declare certain conveyances void. Judgment for complainant.

Peter Backes, for complainant.

Wm. M Lanning and G. D. W. Vroom, for defendants.

BIRD, V. C. The bill in this case is filed by the receiver of the Barnegat Park Company, alleging in effect that certain conveyances either never had any actual existence as conveyances, or that they were fraudulent, and consequently should be declared void, and that the title which they purport to convey should be decreed to be in the said company. It is admitted by the complainant that certain instruments, which upon their face purport to convey the lands in question, had an existence, but it is alleged that such honest use was not made of them as to effectually pass title. It appears that the Barnegat Park Company was formed on the 7th day of August, 1889. In the fall of that year, according to the testimony of Edward S. Farrow, the principal manager, it became financially embarrassed, although it declared a dividend of 2 per cent. upon its capital stock of $200,000. In order to relieve itself of its embarrassment, he says, he advertised for persons to become Interested. The result of this advertising was communication from a man by the name of Forney, and through him negotiations were carried on which resulted in the sale of the premises in question,—one parcel to said Forney, and another parcel to a man by the name of Corbin. All of the negotiations were carried on through Forney, Corbin never having been seen by Farrow. As I understand him, Forney was once at Barnegat Park, but his exact location prior to the time of these negotiations he was not certain of, and since then he has only heard of either Forney or Corbin as being in Chicago and Seattle. Farrow says that on the 2d of December, 1889, two notes were made by him to the Barnegat Park Company, and indorsed by the Barnegat Park Company,— one for $1,500 and the other for $1,250 — each made payable in three months, of one of which the following is a copy: "Barnegat Park, N. J., Dec. 2nd, 1889. Three months after date, for value received, I promise to pay to the order of the Barnegat Park Company fifteen hundred dollars, at the Commercial National Bank of New York, with interest from date at the rate of —%. $1,500.00. Due —. Edward S. Farrow, U. S. Army." And it is indorsed as follows: "The Barnegat Park Company, M. W. Conkling, President. Henry C. Corbin." I think that Farrow's testimony shows that at this time a deed was made and executed in the name of the company as grantor, and in the name of Corbin as grantee, which was afterwards destroyed. "Q. What became of that deed? A. Destroyed when the other was made. Q. To whom was that or those deeds made that you say were destroyed? A. One to Forney and one to Corbin. Q. Why did you think it necessary to make a new deed, as you previously explained these matured about the time of the maturity of the notes? Tell me what deed was destroyed. Specify the land. A. On the 38 lots in the boulevard of Barnegat Park. Q. Anywhere they might be available without designating that? A. Without designating that 38 lots." When this note matured, he says that the amount due thereupon was paid by Corbin, less 15 per cent. of its face value, and that then the deed in question was delivered and executed to him. A note in all respects the same was indorsed by the said Edward L. Forney, and when it became due, Farrow says, he paid the amount due thereon, less 15 per cent. of its face value, and that a few days thereafter the deed in question was made and delivered to him. At this time one Marcus W. Conkling was the president of the association. Farrow swears that he prepared these deeds himself for Corbin and Forney, and presented them to Conkling for his signature, and that Conkling then, as president, executed the deeds. Farrow says also that this transaction was submitted to the board of directors, and the plain Inference is, from his testimony, that Conkling was present. Conkling denies these statements in every particular. He swears that the first intimation that he ever had of this transaction was in the winter of 1801 and 1892,—several weeks, at least, after the appointment of the receiver. He says that during that winter season he and Farrow were stopping at the hotel called "The Pines." While there they occupied the same room, in which was an office desk, to which each had access. He swears that in that desk he discovered what purported to be deeds of conveyance by the company to Corbin and to Forney, and what purported to be two other deeds from Corbin and Forney, as grantors, with the names of the grantees in blank. These conveyances purport to convey the lands which are now claimed by the complainant in this suit. Conkling says that he made a note of the transaction because it particularly arrested his attention at that time.

The difference in the statements of these principal witnesses is important, although, in my view of the case, not conclusive. Conkling was president of the company, and Farrow was secretary and treasurer. Farrow was upon the ground all the time, and had the entire control and management of the company. Conkllng's explanation of the existence of these deeds which purport to convey the title to Corbin and Forney is as follows: He says that he was in New York on business, and that at the request of Farrow he executed a number of deeds in blank, in order that Farrow might not be delayed in securing purchasers when they were ready to take title, and that he delivered these conveyances, so executed, to Farrow. This, it will be perceived, is in direct conflict with the statements of Farrow that he prepared these conveyances, and then submitted them to the board and to Conkling, and that Conkling then executed them. It is not an easy thing for me to come to the conclusion that, in a matter of so little interest as this now turns out to be to Conkling, he would deliberately commit perjury, especially when there are so many opportunities to contradict him, and so many witnesses to prove the fact. He appeared upon the witness stand, and I saw nothing to awaken suspicion that he was deliberately falsifying. I am inclined to take his statement as true. I cannot comprehend that a man of his business capacity and experience could have forgotten a transaction of this character. At the time of these negotiations with Corbin and Forney,...