Crane v. Conklin

1 N.J. Eq. 346 | New York Court of Chancery | 1831

The Chancellor.

The bill charges the fraudulent procurement of a conveyance of real estate, and seeks that it may be set aside in favour of the heirs at law.

Two questions are made :

1. Has this court jurisdiction to set aside conveyances, in favour of the heirs at law ? And,

2. Does this bill set out such a case as will authorize the court to interfere, if it have jurisdiction ?

It must be admitted in this case, by both parties, that an ejectment might have been brought for the recovery of the possession of this property, by the heirs at law. There is no legal impediment or disability standing in the way to prevent the institution of such suit. The title of the heirs is strictly a legal title, and such are properly asserted and maintained in courts of law. But it does not follow, that because a party is at liberty to resort to an action of ejectment, therefore he has no remedy in this court. The principle is too broad, and the practice of the court; is directly against it. There are many cases in which the jurisdiction of the courts of law and equity are concurrent, and the party is at liberty to seek relief in either.

Although an ejectment might have been brought at law, yet I cannot concur in the opinion of the counsel of the defendants, that this is what is technically termed an ejectment bill, Such a bill is one brought simply for the recovery of real property, together with an account of the rents and profits, without setting out any distinct and substantive ground of equity jurisdiction. A bill of this description would be de-murrable, and could receive no countenance in this court. It is of great importance in the administration of justice, that the principles of the two courts should be kept distinct; and where there is no proper ground of equity, the chancery will not interfere. Thus in the case of Loker v. Rolle, 3 Vesey, jr. 4, cited by the defendants’ counsel, the bill was for a discovery and for possession and an account, stating that the defendant had got possession of the title deeds and mixed the boundaries. The chancellor was of opinion that he had no jurisdiction ; that if the complainant had filed his bill for a discovery merely, he would have been entitled to it, but that there was no equity in his case to entitle him to any farther relief. He set out no hindrance or impediment to his legal title, which could be properly removed in a court of equity, nor any fraud which could authorize the court to assume jurisdiction. A similar case is to be found in 3 Vesey, 343, Ryves v. Ryves; and the principle is not confined to cases of real property, but extends to all cases where the demand is purely legal, and the party can have an adequate remedy at law. A bill filed to recover the amount of a total loss on a policy of insurance, stating no sufficient ground of equitable relief, was dismissed with costs: 1 John. C. R. 463.

But this is a bill to set aside a fraudulent conveyance, filed by those who, without the incumbrance of such conveyance, are undoubtedly entitled ; and I can entertain no question as to the jurisdiction. It is altogether different from an ejectment bill, and comes within the ordinary and often-exercised powers of this court. It is a well settled principle, says Chancellor Kent, that relief is to be obtained in this court not only against writings, deeds, and the most solemn assurances, but against judgments and decrees, if obtained by fraud and imposition : Reigal v. Wood, 1 John. C. R. 406.

In Clarkson v. Hannay and a.l., 2 P. Wms. 203, a bill was filed by an heir at law, to set aside a conveyance made by the ancestor. It was made to appear that the ancestor was a weak man, and easily to be imposed upon, and that the consideration was an annuity of twenty pounds sterling per annum for an inheritance of forty pounds per annum. The court granted relief, and ordered the estate re-conveyed, and the writings delivered up, and that the defendants should pay back the amount of rent they had received, beyond what they had paid for the annuity. So in White v. Small, 2 Ch. C. 101, certain deeds conveying the equity of redemption of certain premises, were ordered to be set aside on the ground of fraud and want of consideration. In Evans v. Llewellen, 2 Bro. C. C. 150, (better reported in 1 Cox C. R. 333,) the court went so far as to set aside a deed imprevidently obtained for an inadequate consideration, though no actual fraud appeared to have been made use of. The case of Bennet v. Vade and al., decided by Ld. Hardwicke, 2 Atk. 339, is a strong case, and similar to the present. The bill was brought by the plaintiff, as heir at law of Sir John Lee, to set aside the conveyance of his estate to the defendant, suggesting fraud and imposition, and that Vade had an undue influence over him. That learned chancellor had no doubt on the subject of jurisdiction, though it came before him incidentally in the cause; and he not only decreed that the deed should be delivered up to the plaintiff, with costs, but that the possession should be delivered up immediately. In Cooper’s Eq. 125, it is said that the only case in which fraud cannot be relieved against in equity, concurrently with courts of law, is the case of fraud in obtaining a will, which if of real estate, must be in a court of law, and if of personal estate, is cognizable in the ecclesiastical court.

The case of Shaftsbury v. Arrowsmith, 4 Ves. 65, cited by the defendants’ counsel, in which it is decided, that an heir at law has no equity except to remove incumbrances in the way of his legal rights, does not reach the principles of the bill now under consideration. It was a mere question of title, and there was nothing in it involving any principle of equity. The same remark may be made to the case of Crow and al. v. Tyrrel, 3 Mad. Rep. 99 : an heir out of possession came into court praying immediate relief, by having the possession of the property delivered up to him, and also the title deeds by which the estate was held. The vice-chancellor held, that if he carne into chancery simply for the possession of the property, the bill would have been clear-Iy demurrable : that he prayed for a delivery of the title deeds did not help him, for the jurisdiction of the court in regard to the delivery of the title deeds, was confined to the person having possession of the estate. If the party recovered the possession of the estate at law, he might then come into equity for the possession of the title deeds.

But it is to be observed, that in those cases the plaintiffs did not come into court complaining of conveyances fraudulently and improperly obtained, and praying to be relieved from their operation. The relief sought was of a character altogether distinct. The correctness of those decisions is not called in question, but they have no relation to the case now before the court.

Entertaining no doubt as to this part of the case, I will merely refer to some authorities to be found in 3 Cox, P. Wms. 131, in notis, and to a late and valuable treatise on the jurisdiction of this court, by Jeremy, pp. 485-6.

The second question is, whether the bill discloses such a case of fraud as will authorize this court to interfere 1

Crane is represented by the bill, as we have already seen, to have been for eight or ten years habitually addicted to intemperance : that during the months of January and February he was “ almost incessantly and uninterruptedly under the influence of liquor to such a degree as to be wholly incapable of business that when he refrained for a few days from immoderate drinking, his debility of body and mind was so great, as to render him incompetent to the rational transaction of any business: that when he was either in a state of actual intoxication, or so enfeebled or debilitated in mind, from the indirect influence of a long fit of intoxication, from which he wTas just then recovering, and while he was legally incompetent to make any disposition of his property, the defendants fraudulently and most unconscienliously, and without any, or if any, a totally inadequate and mere colourable consideration, procured from him the said conveyance. It is not stated that the drunkenness, and consequent disability, originated in any acts of the defendants; no management or contrivance of that kind is charged against them. The question is, whether, under such circumstances, the deed can be relieved against.

Courts of equity have been liberal in protecting against the consequences of fraud, those who from weakness and imbecility are most liable to imposition, and also those who from their relative situation are peculiarly liable to be influenced by artful and designing persons around them. In carrying out their healthful principles, they have proved themselves the guardians of infancy, the protectors of the innocent and unwary, and the fearless and successful exposers of hidden machination and secret fraud. If there has been a suppression of the truth, or the suggestion of a falsehood, whereby the party is circumvented and deceived, equity will relieve against it. Where an undue advantage has been taken of the weakness or necessity of the party, or of any situation in which he is placed, rendering him peculiarly liable to impositions, this court will interfere. It goes upon the safe principle of protecting those who are not able to protect themselves.

It has, nevertheless, been made a question, how far any improvident act, caused by drunkenness or intoxication, may be relieved against; and it has been supposed by some, that if the intoxication was voluntary and not procured, that the party was without remedy. Thus in Johnson v. Madlicott, decided at the rolls by Sir Jos. Jekyll, in 1734, cited in 3 P. Wms. 130, it was expressly stated, that the having been in drink is not any reason to relieve a man against any deed or agreement gained from him when in that situation, for that were to encourage drunkenness: otherwise, if through the management or contrivance of him who gained the deed, &c. the party from whom such deed has been gained, was drawn into drink. So, too, Ld. Coke says: “Although he who is drunk is for the time non compos mentis, yet his drunkenness does not extenuate his offence, nor turn to his avail; but it is a great offence in itself, and therefore aggravates his offence, and doth not derogate from the act which he did at the time.” This doctrine of the ancient common law is too harsh to be generally useful, and it contrasts rather unfavourably with the milder and more rational principles of the civil law. “ It is evident, (says Pothier,) that ebriety, when it is such as to take away the use of reason, renders the person who is in that condition, while it continues, unable to make a contract, since it renders him incapable of assent.” Traite des Obligat. pt. 1, c. 1, s. 1, art. 4. The case at the rolls in 1734, already mentioned, was founded on the principles of the strict rule of the common law. In 1747, the question was made before Ld. Haidwicke, whether it was sufficient to set aside an agreement, that one of the parties was drunk at the time. That learned chancellor thought it was not, unless some unfair advantage was taken, which did not appear in that case: Cory v. Cory, 1 Ves. sen. 19. This decision was a departure from the old rule, and grew out of better conceptions of equity. Instead of saying to the wretched victim of intemperance, that the avenues not only of law, but of equity were closed against him, and that he was to be left as an outlaw in society, a prey to the cunning and cupidity of the spoiler; it extended to him the just protection of the court, not for the purpose of setting aside his contract on the ground of his infirmity, or crime, but for the purpose of looking into his transactions, to see whether any advantage had been taken of his unhappy situation. It would not favour ebriety, but at the same time would not permit it to be taken advantage of with impunity. The good sense of this principle has commended itself to every court, and especially to the courts of equity. Hence it has become the settled rule of the court, that it will not interfere to assist a person on the ground of intoxication merely; but if any unfair advantage has been taken of his situation, it will render him all proper aid : Cooke v. Clayworth, 18 Ves. 12.

The bill before me does not seek relief, on the simple ground of intoxication. It charges expressly, that undue advantage was taken of the situation of the grantor, and that the deed was fraudulently obtained. As evidence of the fraud, it relies upon the inadequacy of the price, and states that even that price was not paid. To this it has been answered, that inadequacy of price is not of itself evidence of fraud, and can never be the ground of setting aside a deed, unless accompanied with fraud or misrepresentation. But this is only where the party is able to contract. In the case of Reynolds v. Wall, 1 Wash. Rep. 164, it was held, that where the party was intoxicated, inadequacy of price was direct evidence of fraud; and I think there can be no doubt of the correctness of the decision. It is conceded, that the fact of the price not being paid, is no ground to set aside the deed. The fraud must be in the original transaction or contract, not in the non-fulfilment of the contract. If the original transaction was valid at the time, it is not rendered invalid by any subsequent act or omission of the defendants. The fact, nevertheless, is well charged ; for although it does not change the nature of the transaction, it may, if proved, be strong testimony to show its real character: 5 Peters, 279, Cathcart and al. v. Robinson.

Upon the whole case, without going into any calculation, or giving any opinion as to the adequacy of the price, I am fully satisfied that this bill is, upon the face of it, clearly within the jurisdiction and principles of this court, and that the defendants must be put to their answer.

Let the demurrer be overruled, with costs.