Schaffer v. Hurd

• Decision Date: 18 August 1925
• Parties: SCHAFFER v. HURD et al.
• Court: New Jersey Court of Chancery

130 A. 228

SCHAFFER

v. HURD et al.

Court of Chancery of New Jersey.

Aug. 18, 1925.

Suit by Karl Schaffer against Warren Hurd and others. Decree for plaintiff. On petition to open decree. Order to open decree advised.

Albert C. Abbott, and Cole & Cole, all of Atlantic City, for petitioner.

Thompson & Hanstein, of Atlantic City, and Merritt Lane, of Newark, for respondents.

INGERSOLL, V. O. A petition is filed to vacate a final decree, made on the 6th day of July, 1922, and filed on the 7th day of July, 1922, in a certain cause wherein Karl Schaffer was complainant and Warren W. Hurd (the petitioner) and others were defendants.

The bill was filed to foreclose the equity of redemption of the owner, mortgagees, and any others interested in the title to a number of tracts of land in Atlantic county, which the complainants had purchased at tax sales held by the cities of Atlantic City and Ventnor City.

The defendant Hurd (present petitioner) was made a party defendant, because he was the owner of mortgages upon some of the tracts so purchased, aggregating about ?500,000.

The cause proceeded in due form to the confirmation of the master's report, and an order was made on the 13th day of June, 3922, wherein it was ordered and decreed that upon the defendants or any of them paying to the complainant the amount found due to the said complainant, together with his taxed costs at the office of the master (therein named) on the 29th day of June, 1922, then the complainant was to deliver up possession of said premises to the said defendant, or any of them (so making payment), and cancel and discharge the said certificates of tax sale of record.

Upon the master filing a report, that no person appeared at the time and place or at any other time, and that none of the defendants paid or offered to pay the sum of money or any part thereof, the said final decree, adjudging the said defendants and each of them to be and stand absolutely debarred and foreclosed of and from all equity of redemption in and to all the premises mentioned and described in the bill of complaint, was made and entered.

The petition to open the decree is based upon the allegation of the petitioner that he had no notice of or knowledge of said suit, until after the entry of the final decree. By the established practice of this court, a proceeding to open and vacate a decree, whether before or after enrollment, may be instituted by petition and order to show cause. Mitchell v. Mitchell, 125 A. 490. There is adequate authority for the proposition that when fraud and surprise are relied on to open an apparent default, a decree may be opened on petition even after enrollment. Jones v. Reed-Jones, 84 N. J. Eq. 479, 93 A. 580.

Vice Chancellor Garrison in White v. Smith, 72 N. J. Eq. 697, 65 A. 1017, refused to open the decree, but stated the law as follows:

"The next matter for consideration is under what circumstances the prayer of such a petition will be granted.

"In Brinkerholf v. Franklin, 21 N. J. Eq. (6 C. E. Gr.) 334, Chancellor Zabriskie, 1871, it was said (at page 336): 'It has long been settled that an enrollment will be vacated and a decree opened when the decree has been made unjustly against a right or interest that has not been heard or protected, when this has been done without laches or fault of the party who applies,' citing cases.

"In Embury v. Bergamini, 24 N. J. Eq. (9 C. E. Gr.) 227 (Chancellor Runyon, 1873), speaking with respect to a default decree after an enrollment, the court said that it would be opened 'for the purpose of giving the defendant an opportunity to make a defense, where such defense is meritorious, and he has not been heard in relation thereto, either through mistake, accident or surprise.'

"In Allaire v. Day, 30 N. J. Eq. (3 Stew.) 231, the Court of Errors and Appeals said: 'The court of chancery has discretionary power, even after enrollment, to open a regular decree obtained by default, for the purpose of giving the defendant an opportunity to make a defense on the merits, where he has been deprived of such defence, either by mistake or accident, or by negligence of his solicitor.'"

Subpoenas were issued and returned unserved upon the petitioner, with an affidavit by the sheriff of Atlantic county that he was unable to find in his county Hurd and numerous other defendants, and that he was credibly informed and verily believed that the said defendants are out of this state, and giving, among others, the address of Warren W. Hurd as Commercial Trust Building, St. Paul, Minn.

On November 30, 1921, an order of publication was made requiring the absent defendants to appear, plead, answer, or demur to the complainants' bill on or before the 31 st day of January, then next, or that in default thereof such decree would be against them, as the Chancellor should think equitable and just. Said order also directed the publication and mailing of the notice of such order. Due proof of the publication of such order was made, and on the 16th day of February, 1922, an affidavit in the following words was filed:

"State of New Jersey, County of Atlantic,

Walter Hanstein, of full age, being duly sworn according to law, upon his oath deposes and says that he is a member of the firm of Thompson & Hanstein, solicitors of the complainant in the above-entitled cause, and the one actually intrusted with the conduct and management of this cause; that he has in good faith made diligent and careful inquiry for the residences and post office addresses of the defendant hereinafter named, in the manner required by the rules of this court, and that he is credibly informed in such manner that he believes it to be true that the said defendants reside at the following places, to wit: Warren W. Hurd, Commercial Trust Bldg., St. Paul, Minn.; William E. Simpson, Commercial Trust Bldg., St. Paul, Minn. [List of approximately 30 additional names and addresses.]

"Deponent further says that he did on the 9th day of December, 1921, place in the post office of the city of Atlantic City, N. J., letters directed to the above-named persons at the above addresses, with the postage prepaid, containing a copy of the notice hereto annexed.

"[Signed] Walter Hanstein.

"Sworn and subscribed before me this 30th day of January. 1922.

"[Signed] Clarence E. Knauer Hurd testified that he never received the notice, and that he had no knowledge of the suit until on or about the 15th day of June, 1923, when he received a letter from John C. Reed, a counsellor at law of this state, advising him of the action. It is undenied that there was not at the time of the mailing of the notice and never had been any building known as Commercial Trust Building in the city of St. Paul, Minn.

Hanstein received the information concerning Hurd's address from Sehatfer, the complainant, who had a number of years prior thereto obtained it from the then president of the Realty Realization Company, the mortgagors in the mortgages held by Hurd.

Hanstein further testified that the envelope in which the notice was inclosed bore the return card of Thompson & Hanstein, and that it never has been returned.

It is admitted that certain other notices, which Schaffer testified were addressed to Hurd at the same address, were received by him, and that the letter sent by Mr. Reed to Hurd advising him of the suit was also addressed in the same manner; that during the entire interval Hurd was represented by counsel, who had on a number of occasions prior to the filing of the bill to foreclose...