Ashby v. Yetter , 79 N.J. Eq. 196 ( 1911 )

The opinion of the court was delivered by

Parker, J.

We reach the same result as that to which the learned vice-chancellor was led by his consideration of the evidence, but for reasons not wholly identical with those expressed by him. There is some difficulty in resting the decree for reconveyance on the terms of an express trust, because that trust was not evidenced by any writing as required by the third section of the statute of frauds. McVay v. McVay, 43 N. J. Eq. (16 Stew.) 47; Newkirk v. Place, 47 N. J. Eq. (2 Dick.) 477; Aller v. Crouter, 64 N. J. Eq. (19 Dick.) 381, 391; Coffey v. Sullivan, 63 N. J. Eq. (18 Dick.) 296. The theory of \ resulting trust arising from non-pajonent of consideration was not relied on, and would have been untenable. Hogan v. Jaques, 19 N. J. Eq. (4 C. E. Gr.) 123; Coffey v. Sullivan, supra. It may be that as there was no objection to the parol evidence tending to show an express trust, and that evidence, if properly to be considered, was adequate to support such a finding, the decree may be upheld on this ground, though in Coffey v. Sullivan this court intimated that the trust itself would be invalidated, and not merely the parol evidence to establish it. 63 N. J. Eq. (18 Dick.) 304.

We need not go further into this branch of the cause because we are satisfied on a reading of the evidence that the conveyances from Ashby to Yetter were procured by fraud, and that that procurement was facilitated by Ashby’s mental condition at the time. Ho was a nervous -wreck with his mentality impaired; he had been in the insane asylum some years before, and shortly after the bill was filed went there again. Defendant, a shrewd and apparently a somewhat unprincipled real estate speculator, seeing Ashby’s condition, took advantage of it, and to increase his anxiety and worry and thus induce him to get rid of his propertrr, told him that there were judgments against him, that he could not show himself in Atlantic City, and that the mortgages were being foreclosed, or about to be foreclosed.

The grossly inadequate consideration is of itself evidence of fraud. Worth v. Watts, 76 N. J. Eq. (6 Buch.) 299, 305. Superadding the misrepresentations of fact we have no difficulty in finding that the deeds and bill of sale were fraudulently procured, and should be set aside.

The effect of the fraudulent procurement was to create a trust ex maleficio in favor of complainant. Pom. Eq. Jur. § 1053 et seq. Eeconveyance and accounting are of course incidental to such a trust, and hence were properly decreed.

The defence of laches is made but is without merit. It is true that five years elapsed before the filing of the bill. But during all that time Ashby’s mental incapacity persisted, finally culminating in insanity; and for a great part of it Yetter’s behavior was such as to. justify complainant’s wife in the belief that Yetter was dealing with the property as a trustee. With the husband mentally incompetent and the wife deceived as to the defendant’s position in the matter, laches may well be excused, especially as Yetter’s position has not yet been changed in any respect that cannot be fully compensated for on the accounting, and by a reconveyance of the Philadelphia lots.

The decree of the court of chancery will be affirmed.

For affirmance—The Chief-Justice, Garrison, Swayze, .Trenchard, Parker, Bergen, Voorhees, Kalisch, Bogert, Vredenburgii,- Congdon, White—12. For reversal—None.