Irwin v. Johnson

36 N.J. Eq. 347

• Court: Supreme Court of New Jersey
• Decided: November 15, 1882
• Status: Published

Opinion

The opinion of the court was delivered by

Reed, J.

The complainant’s counsel placed his claim for relief upon two grounds.

An intentional destruction of the obligation amounts to a release of the debt, Gilbert v. Wetherell, 2 Sim. & Stu. 254; Silvers ads. Beynolds, 2 Harr. 275; Borland y. Taylor, 52 Iowa 50S; Gardner v. Gardner, 22 Wend. 526; Bees v. Bees, 11 Bich. Eg. 86. A mere expression of an intention to destroy it is not enough, Nelson v. Cartmel, 6 Bana 7; Campbell’s Estate, 7 Pa. St. 100; Chew v. Chew, 8 C. E. Gr. 471; see Harley v. Harley, 57 Md. 840. A verbal gift of the arrears of an annuity cannot be recalled after the death of the obligor, Bong v. Long, 17 Grant’s Oh. 251; see Johnson v. Johnson, 22 La. Ann. 144• And so of a surrender of an obligation, with an intention to cancel or forgive the debt, Hurst v. Beach, 5 Madd. 351; Vanderbeck v. Yanderbeck, 3 Stew. Eg. 265 ; Sherman v. Sherman, 8 Ind. 387; Edwards v. Campbell, 23 Barb. 4®3; Bridgets v. Hutchins, 11 Ired. 68; Lee v. Book, 11 Gratt. 182; and what acts amount to such surrender, Bieketts ¶. Livingston, 2 Johns. Cas. 97; Dittos v. Cluney, 22 Ohio St. 436; Melvin v. Bullard, 82 N. C. 88; Youngs. Young, 80 N. Y- 422; Henderson v. Henderson, 21 Mo. 379; Shaw v. White, 28 Ala. 637.

.First. A gift of these mortgages to Mrs. Johnson.

Second. An equitable release of them to her by the deceased during his lifetime.

The contention upon the first ground is that the delivery to Annie Jones of these mortgages, was a delivery to Mrs. Johnson with an intent to pass the property in the mortgages to the complainant. There is nothing in the case to support this contention.. How these papers came into the hands of Annie Jones is only explained by her own testimony, and it is entirely inconsistent with the view that it was a transference of the dominion over the property from the testator to Mrs. Johnson.

She says that they were given herewith instructions by the testator to give them, upon his decease, to the persons who were to> settle his business.

Outside of her testimony I find nothing which would (under the rules which guard the passage of property by gift) bring the present case into a semblance of a gift.

Nor did the vice-chancellor place the case upon that ground.

He put his conclusion entirely upon the doctrine of an equitable release. The rule adopted and which he was bound to recognize as the law, is laid down in the case of Leddel’s Exrs. v. Starr, 5 C. E. Gr. 274. Chancellor Zabriskie, in this case, announced the rule in these words: “ There is a series of decisions in courts of equity in England and in this country which have established the principle that when a creditor has, by written or parol declarations with regard to a debt, or by conduct tantamount thereto, declared or agreed that a debt shall be relinquished or given up, or that it has been so relinquished or given up, a court of equity will consider this an equitable release, and will not permit his representatives to enforce it.”

The following declarations by deceased obligee, without any acts, were held insufficient to discharge the debt, or to prevent its enforcement in equity: that the obligor might do as he pleased with what he owed'; that decedent should never ask him for it, or require him to pay it, Beeves v. Brynier, 6 Yes. 516; that the payee of a note told the maker (his son) that he never intended to collect it while he lived, and that after his death it should be the son’s, Denman v. McMahin, 87 Ind, 241; that a donor had made a gift to his niece etc., Wheatley v. Abbott, 82 Miss. 848 ; ICreider v. Boyer, 10 Watts 54; Button v. Allen, 1 Hal. Ch. 99; sei?Doty v. Willson, 41H. Y. 580; Clark v. Clark, 11 B. Mon. 698; that the obligee [a father-in-law] took a bond from his son-in-law, for money advanced, because he could not write or keep a book, but that the obligee need not pay it back, Haverstoek v. Sarbach, 1 Watts & Serg. 890 ; that a stepmother told the payee of her note that she never intended to collect the money on it, and that if it was not paid in her lifetime it was to be his, McGuire v. Adams, 8 Pa. St. 286; that a father said he would never collect anything from his son, whose note he held, and “ live or die, he should never pay him one cent,” Bradley v. Bong, 2 Slrobh. 160; that a father entered in his account-book the amount advanced to his daughter on her marriage, declaring that he did not do this for the purpose of making a charge, but for his own gratification; and he afterwards expunged the entry, Johnson v. Belden, 20 Conn. 822; that a father took the note of his daughter’s husband for a farm sold to the latter by the father, promising his daughter and her husband that the whole amount should go as a gift to his daughter, Carpenter v. Dodge, 20 Vt. 595; that a father caused a writing to be drawn disposing of a mortgage debt in favor of his son’s (the mortgagor’s) family, and executed it, and said that he did not intend to enforce it, but meant that it should be canceled at his death, Chew v. Chew, 8 C. E. Gr. JJ1.

The rule so laid down was broad enough to cover a case where a person had announced his intention to discharge a debt.

If we assume that the facts in this case show that Mr. Corlies, in his lifetime, announced to Mrs. Johnson that upon his death these mortgages should be hers, and to others, that he intended to make her equal with his grandchildren by giving her the mortgages, I yet think the rule which controlled the court below is one which, before adoption by this court, should be the subject of careful scrutiny.

At law it is apparent that a -parol declaration of the kind set out in this case would have no efficiency at all. A debt cannot be extinguished by a mere statement by the creditor that he does not intend to enforce it; or that he forgives it; or even by a receipt for the whole, when, in fact, a part only has been paid.

The recognition of a doctrine which permits a mortgage to be extinguished by a verbal declaration of the debtee that he did not intend to insist upon its payment, would seem to break down not only the rule already mentioned, but that which forbids the revocation of an instrument by an act less solemn than the act creating it. Here there is neither a payment nor an agreement for a good consideration to discharge, nor a technical release under seal. There is in the doctrine an encroachment upon the field designed to be covered by the statute of wills, because it permits a person by parol to give a direction to his property after his decease variant from the course it would take by the direction of the instrument executed in conformity with the requirements of the statute. The doctrine has been accepted in a few cases, but seems to have arisen from a desire to alleviate the supposed hardship of special cases, and from a mistaken view of what was ruled in a case decided in the high court of parliament as early as the year 1724. I allude to the case of Wekett and wife v. Raby, reported in 3 Bro. P. C. 16. This was that case: The testator made a will by which he made his daughter Mary his executor and residuary legatee. A man named Raby had been his counsel. The testator held Raby’s bond for £255. In his last sickness the testator said to Mary, his residuary legatee:

“ I have Raby’s bond, which I keep. I don’t deliver it up, for I may live to want it more than he, but when I die lie shall have it. He shall not be asked for it.”

The followidg were held sufficient: “ Take back your writings [a bond and mortgage], I freely forgive you the debt,” Richards v. Sims,' Ram. Oh. 90; that a mother advanced money to her son, taking a mortgage therefor, and promised him that it should never be recorded or the money collected, Peabody v. Peabody, 59 Ind. 556; that a father requested his son to sign a note for the value of two horses given to him by his father, and represented to him that the note was never to be paid, Harris v. Harris, 69 Ind. 181; that an intestate said he had given his son something handsome ; that he had held a writing against him, not a note, but had made him a present of it, Wheeler v. Wheeler, Jfl Vt. 637; that a nephew had given his uncle a deed of trust on slaves, to secure moneys loaned, but that the uncle said he never claimed or expected any benefit therefrom, and that he had permitted his nephew to sell all the slaves that were worth anything, Filzhugh v. Filzhugh, 11 Qralt. 310. — Rep.

After the death of the testator Raby demanded the bond of Mary. She refused to deliver it, but said you may be easy, for it is safe in my hands.

Pie hinted that accidents or matrimony might put it out of her power to deliver it. She said if I marry I will deliver it the night before.

Afterwards Raby having acted, as Mary thought, in an unfriendly manner towards her, she put the bond in suit. A bill was exhibited in the court of chancery and the suit was restrained. There is no opinion in the case.

Before the high court of parliament, the counsel of the complainant put their case upon the doctrine that a trust was imposed on Mary, the executrix and residuary legatee, by the direction of the testator to her, and her acknowledgment thereof, and her express promise to deliver up the bond. There was no insistence that the parol declarations in themselves amounted to a discharge of the security. What the views of the court were is only inferential. Judge Story speaks of this as a case which would be clearly insupportable as a donatio mortis causa, and as carrying the doctrine of an implied trust, or equitable extinguishment of a debt to the very verge of the law. Stony’s Eq. Jur. § 706.

Mr. Pomeroy-classifies the case as one supporting the doctrine that where declarations are made under such circumstances, that the testator imposed a constructive trust upon the property given by his will, so that the beneficiary would not be equitably entitied to the gift without, at the same time, carrying out the trust and discharging the debt.

The statement of Mr. Pomeroy is intended to include the eases in which the beneficiary by some act or word assents to the declared intention of the testator, so that thereafter it would be a fraud upon his part to refuse to carry out the testator’s design, as by his assent he has induced the testator to rely upon it rather than change his will or incorporate his intention in a future will.

Of this class is the case of Williams v. Vreeland, decided in this court and reported in 5 Stew. Eq. 734. That was the view taken by Lord Hardwicke in the ease of Byrn v. Godfrey, 4 Ves. 6. After mentioning the circumstances upon which Wekett v. Raby was decided, he says: “ From all this, the court had a fair ground to conclude the case stood exactly according to the representation of the plaintiff, and, being so, the testator, talking to a residuary legatee, and that being admitted, so that the court has sufficient evidence, the residuary legatee will not be permitted to benefit herself of that which was not given to her. It is very near an undertaking by her to do something if the will is not changed. Therefore, the silence is assent on the part of the residuary legatee, and an engagement which, in point of conscience, ought not to be broken by her.”

It is true that Lord Cottenham, in Flower v. Marten, 2 Myl. & Cr. 459, took a different view of'what was decided in the case of Wekett v. Raby. He seems not to have considered the case critically, nor to have had in mind the case of Byrn v. Godfrey. He mentioned the case of Wekett v. Raby, after he had already decided the case which he then had under consideration upon another ground, namely, that no debt had ever equitably existed.

In the subsequent case of Cross v. Sprigg, 6 Hare 552, Vice-Chancellor Wigram says the circumstances of that case (Wekett v. Raby) bring it within the principle examined by the vice-chancellor in Podmore v. Gunning, 7 Sim. 644.

The case of Podmore v. Gunning, was this:

A testator gave his real and personal property to his wife absolutely—

“ Having perfect confidence she will act up to those views which I have communicated to her, in the ultimate disposal of my property after her decease.”

Two natural children of the testator, after the. death of the wife, filed a bill against the wife’s heir and administrator, alleging that the testator, at the time of making his will, desired his wife to give the whole of his property, after her death, to the plaintiffs, and that she promised and.undertook to do so.

The court held that upon proof of these facts a trust arose in favor of the plaintiff. This is the doctrine of Williams v. Vreeland, in this court, already mentioned.

In the case of Sprigg v. Cross, the vice-chancellor criticises with great care and acuteness all the preceding cases in the equity courts, and denies that voluntary declarations indicating an intention on the part of a creditor to forgive or release a debt, if there be no evidence of a release at law, constitute a release in equity.

This case was reversed, but upon a point which did not shake the force of this conclusion. The same learned vice-chancellor, four years later, had occasion, in the case of Peace v. Hains, 11 Hare 151, to reconsider the same question, and there refers with approval to his remarks in the case of Cross v. Sprigg.

In the case of Yeomans v. Williams, L. R. (1 Eq.) 184, the authority of the case of Cross v. Sprigg was recognized by Sir J. Romilly, M. R., and the casé under consideration was decided upon the ground that a father-in-law had induced his son-in-law to live in a house by saying that he should pay no rent in the form of interest upon a mortgage held by the father-in-law upon the property, and that he could not collect interest, because he had induced the son-in-law to take a certain course of conduct by his statement.

In Taylor v. Manners, L. R. (1 Ch. App.) 48, the authority of the cases of Cross v. Sprigg and Peace v. Hains is assumed by the counsel, and Lord Justice Turner says at law certainly there was no perfect gift, and a court of equity as certainly will not enforce a mere intention to give.

I find no more recent allusion to this doctrine in the English reports; but I think it is apparent that while the early decisions may be involved in some confusion, it cannot be said that the doctrine of Leddel’s Exrs. v. Starr was the doctrine of the English court of chancery at the time when the law of that court became the law of this state. The case of Wekett v. Raby may not be satisfactory in any aspect in which it can be viewed but that it did not establish the unqualified doctrine that a parol declaration of an intention to release operated as an equitable release, is, I think, clear. The doctrine of the courts of equity in England is now opposed to such a rule, and the utterances of those courts are in opposition to the claim' that it was ever an established rule in those courts.

The case of Leddel’s Exrs. v. Starr was, in my opinion, a departure from the theretofore prescribed limits of equitable interference with existing obligations. It was a departure in the direction of insecurity and uncertainty, which this court should not follow. The decree below, founded upon this rule, should be reversed.

Deeree unanimously reversed.