164 A. 270 | N.J. | 1933
An action was brought by the complainant to foreclose a mortgage held for the Passaic Trust and Safe Deposit Company as security for certain notes discounted by it. The appellants, Charlotte F. Rashkind and Sylvia E. Jacobson, claimed to own an undivided interest in the premises, free from the lien of the mortgage, and filed a counter-claim. We find ourselves in accord with the views expressed by the vice-chancellor, except so far forth as he disallowed the claims of the appellants, on the theory that they had acquiesced, after their majority, in the sale of the premises in *266 question by their mother individually, so as to be in laches. It appears that Mrs. Rashkind reached the age of twenty-one ten years ago and Mrs. Jacobson five years ago. They knew their mother was collecting the rents of the property and treating it in all other respects as her own. Beyond this there was no evidence bearing upon the point.
The premises in question had been the property of William Jacobson, who died intestate in 1916, leaving a widow and three minor children. The wife instituted proceedings in chancery to sell infants' lands. The title to the property was taken by one Lieberfreund, and she then acquired it.
We are in accord with the following portion of the vice-chancellor's opinion: "The proceeding in this court for the sale of infant's land, the sale to Lieberfreund and the subsequent conveyance to Scher and Mrs. Jacobson, were merely a device to transfer title in the property on which complainant holds a mortgage from the children to Mrs. Jacobson, and to obtain for her the proceeds of the sale of the other tracts. This, of course, was a fraud on the children and would have been a fraud even if Mrs. Jacobson had paid a valuable consideration for the property, instead of no consideration at all. Throughout the transaction and at its conclusion, the children continued to own an equitable interest in the property, and Lieberfreund, Scher and Mrs. Jacobson were successively the holders of the legal title subject to that interest. Complainant's mortgage, however, is superior to the equity of the children unless the bank had knowledge, actual or constructive, of that equity or notice of such facts as should have put the bank to inquiry. I think there were such facts. The title of the mortgagor Scher rested upon the proceeding in this court for the sale of infant's lands. The bank had notice of whatever the record in this court on that proceeding disclosed, including the fact that Scher was Mrs. Jacobson's solicitor. The law in this state relating to the relation of attorney and client is well settled. The relationship is highly confidential; if the attorney uses information acquired by him through his professional relation with his *267
client in order to purchase property, the subject of the professional relationship, he is presumed to act for his client's benefit (Brown v. Bulkley,
We think, however, he was wrong in his conclusion as to the bar of the appellants' rights by acquiescence. The case is barren of any evidence that these young women knew anything about the title to the property, or had any reason to suspect the fraud which had been perpetrated upon them by their mother while they were infants; save in this, that they do not seem to have inquired or examined the records to determine in what manner they had been provided for by their father. It is apparent that they had no knowledge whatever of their rights and accepted their living and their lack of property, as a matter of course, as most children do.
Chief-Justice Green said in Quick's Executors v. Fisher,
Chancellor Zabriskie said, in Smith v. Drake,
And Vice-Chancellor Green said in Hall v. Otterson,
It would seem to us apparent that the appellants had no knowledge, until the foreclosure action was instituted, that their rights had been invaded. Thereafter they acted promptly.
The decree appealed from is therefore reversed.
For affirmance — None.
For reversal — THE CHANCELLOR, TRENCHARD, PARKER, LLOYD, CASE, BODINE, DONGES, BROGAN, HEHER, KAYS, HETFIELD, WELLS, KERNEY, JJ. 13. *270