(108 A.)

and agreed to warrant his "right, title, and [in evidence in this case) that he went with interest." He appeals to the principle of Gould v. Bourgeois, 51. N. J. Law, 361, 18 Atl. 64. The rule in force when the present transaction took place, as stated in section 13 of the Sale of Goods Act (C. S. p. 4650), does not differ. In a contract to sell or a sale there is an implied warranty of right to sell, of quiet possession, and against incumbrances, unless a contrary intention appears. We do not doubt that ordinarily a written conveyance of right, title, and interest only would be cogent, or even in a proper case conclusive, evidence of a contrary intention, since ordinarily it would not be open to the vendee to contradict the written instrument. This rule, however, is not applicable to a suit in equity, where the vendee may have the written conveyance reformed to accord with the contract that was in fact made. In the present case the vendee, while a party to the suit, does not pray for such relief, and the question is whether one claiming under him as mortgagee may have it. As his rights depend on the rights of the vendee, the first question is: Would Flynn be entitled to relief? The answer depends upon what the contract in fact was. The only circumstance which indicates that Motley meant to convey no more than his "right, title, and interest" is the interlineation of those words in the bill of sale. The bill of sale as drawn is nonsensical, since by it Motley in the first person conveys to Flynn and warrants all his right, title, and interest. Literally read, Motley conveys Flynn's interest to Flynn. The error to be sure is palpable, but it makes necessary reformation of the bill of sale. To ascertain what the contract was we must examine all the evidence.

We think Motley's own testimony demonstrates that it was meant to convey an absolute title. He says he told Flynn he had absolute title; that he "gave Flynn the same title that was given to me, an absolute title"; that Flynn knew through Spraggins that he was getting an absolute title; that the bill of sale and everything else was absolute. He admitted also, and it was not questioned, that there was included in the $1,479 purchase price $500 which Spraggins was to get from him (Motley), but said he aid not know that it was paid to him for the purpose of cleaning up all other claims to the title. If the $500 was not paid for that purpose, it is difficult to explain the object of the payment. The very fact that the form of a bill of sale was adopted bears out Motley's testimony that Flynn was to have an absolute title. If the contract had been merely to assign Motley's interest as mortgagee as security for his loan of $900, a different form would have more naturally been adopted, and the consideration would not have been made $1,479, since Motley's interest, at most, would have been $900, plus some interest. Motley testified in another case (and the testimony was

Flynn "to put him in possession of the garage he had bought." This is not the language he would have used if in fact Flynn had bought no more than a bill of sale held as collateral security, or, in other words, a mortgage on the garage. The amount of the purchase price, the form of the conveyance, the formal delivery of possession, the surrounding circumstances, convince us of the truth of Motley's testimony that Flynn was to get an absolute title. The contrary intention of which the Sale of Goods Act speaks is not proved. If Flynn were the party seeking the benefit of the statutory warranty of title, we should have no doubt that he would be entitled to a reformation of the bill of sale and to the relief that would follow. But the relief is not sought by Flynn, but by Darling, or rather is given by the decree to Darling, and to sustain the decree it must appear that Darling is entitled to that relief. As to him the situation is this: Motley appeals to a court of equity against Darling, and must do equity. He seeks to establish Darling's liability as indorser on notes that have been destroyed. The real consideration of Darling's indorsement was the transfer of the absolute title in the chattels to Flynn, who immediately mortgaged them to Darling. Indeed, it is probable that Darling was the principal, since Flynn's name seems to have been inserted in the bill of sale by Darling's direction. Darling relied for security of his indorsements upon the existence of a good title in Flynn. Motley was to profit by Darling's indorsements, and could not have failed to know that Darling relied on Flynn's having title. The parties were all met together with their counsel and went together to the garage where Motley assumed to deliver possession to Flynn, in Darling's presence, and the notes, with Darling's indorsements, were delivered to Motley, and the chattel mortgage from Flynn delivered to Darling. It is suggested that Darling knew that Motley did not own the chattels, because in an agreement with third persons executed by Darling a few days before it was recited that Motley held the title in his name, and the third parties agreed upon the adjustment of Motley's claim to execute a chattel mortgage to Darling. The answer to this suggestion is that it may have been this very question as to the character of Motley's title that induced the warranty. In fact it was, as Motley now says, no warranty, since it was only a warranty of right, title, and interest. Such a warranty could hardly have been meant for any purpose except to deceive the vendee.

It would not be equitable to require Darling to pay the notes without receiving the security which it was meant he should have. We therefore agree with the learned Vice Chancellor. The decree is affirmed, with costs.

MINTURN, J., dissents.

(91 N. J. Eq. 67)
KEPPELMANN et al. v. PALMER, Alien
Property Custodian, et al. *

(Court of Errors and Appeals of New Jersey.

Nov. 17, 1919.)

1. WAR 12-CUSTODIAN'S RIGHT TO FUNDS IN TRUST FOR ALIEN ENEMY UNDER TRADING WITH THE ENEMY ACT.

Under Trading with the Enemy Act, § 7 (c) (U. S. Comp. St. 1918, § 31152d), property held by a trustee under a will for the benefit of an alien enemy is subject to seizure by the Alien Property Custodian.

2. WAR 12-CUSTODIAN'S RIGHT TO FUNDS

IN TRUST FOR ALIEN ENEMY.

Such right is not affected by the fact that before the war the alien enemy beneficiaries had executed powers of attorney to certain bankers, authorizing them to receive and receipt for such sums as might be distributed to them by the trustees, for if the principals are barred by the statute from the present receipt of such mon eys, their attorneys in fact are equally barred. 3. WAR 12-DUTY OF ALIEN PROPERTY CUSTODIAN SEIZING ALIEN ENEMY'S FUNDS

TO GIVE REFUNDING BOND.

As war measures enacted by Congress necessarily override state statutes in conflict therewith, trustees, holding under a will trust funds for alien enemy beneficiaries, are not entitled, as a condition precedent to delivering such funds to the Alien Property Custodian, to receive a refunding bond required by Legacy Act, § 5; that statute giving way to the provision in Trading with the Enemy Act, § 7 (e) (U. S. Comp. St. 1918, § 31152d), declaring that any payment or delivery of money or property to the Alien Property Custodian shall be full acquittance for all purposes of the obligation of the person making it to the extent of the same.

Appeal from Court of Chancery.

Bill by Alfred J. Keppelmann and others, trustees, against A. Mitchell Palmer, Alien Property Custodian, and others. Decree for plaintiffs (89 N. J. Eq. 390, 105 Atl. 140), and defendants appeal. Reversed.

See, also, 103 Atl. 27.

Charles L. Carrick, of Jersey City, Mansfield Ferry, of New York City, and La Rue Brown, Asst. U. S. Atty. Gen., for appellants. Edward M. & Runyon Colie, of Newark, for respondents Keppelmann trustees.

Martin V. Bergen, of Camden, and Ruby R. Vale, of Philadelphia, Pa., for respondents Schulz & Ruckgaber.

GUMMERE, C. J. The bill in this case was filed by the complainants as trustees under the will of the late Adolphus Keppelmann for the purpose of obtaining instructions from the court with relation to the execution by them of certain of the trusts imposed upon them by the will. The situation which the case discloses, so far as the disposition of the matters in controversy makes their recital necessary, is as follows:

Adolphus Keppelmann, at the time of his death, was a resident of South Orange in this state. He died in 1913. By his will he created certain trusts for the benefit respectively of three of his daughters, Bertha Von Borowsky, Pauline Adolphine Losch, and Louise Pauline Schulz. Two of these daughters were residents of Germany, and the third lived in Austria. Some months after the death of their father each of these daughters executed a power of attorney to Schulz & Ruckgaber, bankers of New York City, authorizing them to receive and receipt for in the name of the principal such securities and sums of money as might be distributed to the principal from time to time by the trustees of their father's will, and to deliver for the principal refunding bonds duly executed by the principal for such securities, and such sums of money distributed to the principal under the last will and testament of Adolphus Keppelmann, and to collect for the principal all income upon such securities, and to do all other things on behalf of the principal in relation to such securities, or the receipt of such moneys, with full power and authority to do and perform all other acts and things whatsoever requisite and necessary to be done in and about the premises as fully to all intents and purposes as the principal might or could do if personally present. Before the trusts created for the benefit of these three daughters had been executed war was declared by this country against Germany, and afterwards against Austria, and the Alien Property Custodian, Mr. Palmer (appointed by the President pursuant to authority conferred upon him for that purpose by the federal statute of October 6, 1917 [40 Stat. 411, c. 106 (U. S. Comp. St. 1918, §§ 31151⁄2a31152)], and commonly known as the "Trading with the Enemy Act"), having concluded, after an investigation, that the three beneficiaries were alien enemies within the meaning of the federal statute, did, in pursuance of the provisions of that act, make demand upon Messrs. Keppelmann and Colie, trustees, for the payment to him of the shares of these alien enemies. Schulz and Ruckgaber, the attorneys in fact of the three daughters, protested to the trustees against their complying with Mr. Palmer's demand, insisting that these shares were payable to them by force of the powers of attorney which they held. The complainants have executed the trusts created by the will, except the turning over of the trust estates to the parties legally entitled to receive them; but, being in doubt whether they should comply with the demand of Mr. Palmer, or recognize the claim of Messrs. Schulz and Ruckgaber, they have filed this bill.

[1] The first question argued before us is For other cases see same topie and KEY-NUMBER, in all Key-Numbered Digests and Indexes *Certiorari denied 251 U. S.

(108 A.)

(91 N. J. Eq. 82)

The learned Vice Chancellor was of the NEW JERSEY TITLE GUARANTY & TRUST opinion that the position of the defendants CO. v. ARCHIBALD et al.

Where moneys belonging originally either wholly to the mother, or in part to her and in part to her daughter, are deposited by them in a bank in their joint names, and at the same time they both sign and deliver to the bank a writing stating that "this account and all money to be credited to it belongs to us as joint tenants and will be the absolute property of the survivor of us; either and the survivor to draw"-upon the death of the mother the undrawn moneys belong to the surviving daughter.

Appeal from Court of Chancery.

Bill for instruction, etc., by the New Jersey Title Guaranty & Trust Company, executor, etc., of Helena Metz, deceased against Louisa Archibald and others. From a decree of the Court of Chancery (107 Atl. 472) dismissing the bill, complainant appeals. Affirmed.

Gilbert Collins, of Jersey City, for appel

lant.

was well taken, and accordingly dismissed the bill.

We are of the opinion that the Vice Chancellor was right.

Looking first with respect to the deposits in the New Jersey Title Guaranty & Trust Company, we find the following averments in the bill of complaint: On November 30, 1915, "Helena Metz opened a special deposit account in the Bergen Branch of complainant, and deposited therein on that day $500." On March 31, 1916, "the said Helena Metz with her daughter Louisa Archibald changed said account so that it should be with Helena Metz or Louisa Archibald, and deposited therein the sum of $175 in cash and $263.43 in checks drawn by said Helena Metz on an account kept by her in the main office of the complainant, which account was at that time closed out." At the same time "the said Helena Metz and the said Louisa Archibald signed and delivered to complainant a writing dated March 31, 1916, referring to said account by its number 2,809," which writing, among other things, contained the following provisions: "This account and all money to be credited to it belongs to us as joint tenants and will be the absolute property of the survivor of us; either and the survivor to draw."

At the time of the death of Helena Metz, there was to the credit of the account the sum of $1,031.31. The passbook evidencing such deposit was, after the death of Helena Metz, brought to complainant by Louisa

Ralph E. Cooper and David A. Newton, both of Jersey City, for respondent Archi-Archibald, who asserted her right to withbald.

Campbell De Turck & West, of Hackensack, for respondent First Nat. Bank of

Westwood.

TRENCHARD, J. This is an appeal from a decree dismissing a bill of complaint which was designed to settle the ownership of three bank accounts, one in the Bergen Branch of the New Jersey Title Guaranty & Trust Company, the other two in the First National Bank of Westwood, N. J.

The bill was filed by the New Jersey Title Guaranty & Trust Company as executor of Helena Metz, deceased, and avers, among other things, that it is "in doubt whether to claim as executor of said Helena Metz the said deposits," and prays that it "may be judicially determined to whom the said respective deposits belong," and "that complainant may be instructed as to its duty in the premises."

The defendants Louisa Archibald and the First National Bank of Westwood both moved to dismiss the bill upon the ground that it "appears by the bill of complaint that the said Louisa Archibald is the surviving joint tenant of the deposits referred to in said bill and therefore is entitled to said moneys."

draw the deposit for her own use.

With respect to whether or not either of the parties ever drew any of the funds so deposited the bill is silent.

Now it may well be doubted whether, under such a bill, the complainant would in any event be entitled technically to the relief prayed for; but since all parties in interest are before the court, and have been heard, we assume that the bill will lie quia timet, and, in accordance with the wishes of the parties, proceed to determine the ownership of the deposits.

At the outset it is to be remarked that we are not here concerned with the class of cases where the rights of the parties depend in part, at least, upon the possession of a passbook without the possession of which the moneys could not be withdrawn. Here the rights of the parties depend upon the legal effect of the contract upon which the deposit was made and which contained no such provision. It will be noticed that it does not appear clearly from the bill of complaint whether the moneys deposited belonged originally wholly to the mother, or in part to her and in part to the daughter. But that is immaterial.

We think that where, as here, moneys be

(108 A.)

longing originally either wholly to the mother, or in part to her and in part to her daughter, are deposited by them in a bank in their joint names, and at the same time they both sign and deliver to the bank a writing stating that "this account and all money to be credited to it belongs to us as joint tenants and will be the absolute property of the survivor of us; either and the survivor to draw"-upon the death of the mother the undrawn moneys belong to the surviving daughter.

Such is the logic of East Rutherford S. L. & B. Ass'n v. McKenzie, 87 N. J. Eq. 375, 100 Atl. 931.

It is, however, contended that the essentials of a technical joint tenancy are not present because of the right of both to draw out the entire fund, and it is argued that what was intended was a testamentary disposition which was void for nonconformity to the statute of wills. But a somewhat similar deposit was dealt with in Hoboken Bank for Savings v. Schwoon, 62 N. J. Eq. 503, 50 Atl. 490, and the survivor was held entitled to the fund. In answer to the argument based upon the fact that the power of disposition remained in the donor during his lifetime, the court said:

It is argued that there was no gift from the donor to the donee because there was no delivery. But we think that is not so. The right was contractual and was vested in both depositors jointly and the survivor. The contract entered into by the bank with the mother and her daughter exhibited a donative purpose from donor to donee (not one merely for use and convenience of the donor), and hence constituted a valid gift. See East Rutherford S. L. & B. Ass'n v. McKenzie, 87 N. J. Eq. 375, 100 Atl. 931; Schippers v. Kempkes (Ch.) 67 Atl. 1042, affirmed 72 N. J. Eq. 948, 73 Atl. 1118; Dunn v. Houghton (Ch.) 51 Atl. 71.

These considerations in effect dispose of every question argued, not only with respect to the deposit in the complainant trust company, but also with respect to the two deposits in the First National Bank of Westwood, because the material facts are the same.

The decree below will be affirmed.

(93 N. J. Law, 456) PAUL DELANEY CO. v. JOSEPH FREEDMAN CO. et al. (No. 59.)

"This circumstance has not deterred the courts from giving effect to such arrangements. This has been done on two grounds: First, (Court of Errors and Appeals of New Jersey. that a joint estate or interest is created, with an express right of survivorship, which operates naturally and legally upon whatever of the funds remains unused at the death of the donor:

and, second, on the ground of a completed

trust."

Nov. 17, 1919.)

(Syllabus by the Court.,

1. ATTACHMENT 233-WRIT PROCURED BY

FRAUD IS INVALID.

The general rule that service of process procured by fraud is invalid extends to the issue and execution of writs of attachment.

(Additional Syllabus by Editorial Staff.) 2. ATTACHMENT 236-COURT HAS

POWER TO REVIEW BY CERTIORARI INVALIDITY OF ORDER AND WRIT.

Whether the deposit in the case at bar created a technical joint tenancy is beside the mark. We have pointed out that it was a deposit of moneys originally belonging either wholly to the mother, or in part to her and in part to the daughter. More strictly speaking, it was a loan by the depositors to Where affidavits were presented to a Suthe banks upon the terms stated, since a de-preme Court Commissioner showing a cause of posit in a bank creates the relation of debtor action for default on a contract of sale, and and creditor between the depositor and the he granted an order for attachment under Pracbank. Schippers v. Kempkes (Ch.) 67 Atl. tice Act, 3 Comp. St. 1910, p. 4076, and circuit 1042, affirmed 72 N. J. Eq. 948, 73 Atl. 1118. court allowed a rule to show cause why the The bank therefore contracted with the writ of attachment should not be quashed and mother and daughter that such moneys discharged the rule, a writ of certiorari to Sushould be held for them "as joint tenants preme Court brought up the writ of attachment and will be the absolute property of the sur- as well as the order awarding it, and it was vivor; either and the survivor to draw." well as to set aside the order, and where the within its jurisdiction to quash the writ, as That contract they had a right to make, and order failed the writ failed with it. undrawn moneys so deposited belong to the survivor. Deal's Adm'r v. Merchants' & M. Sav. Bank, 120 Va. 297, 91 S. E. 135, L. R. A. 1917C, 548. In such case it is not necessary Action by Joseph Freedman Company and to establish the existence of a technical joint others against the Paul Delaney Company, tenancy to create the right of survivorship; with order for an attachment. From a judgin other words, the incident of survivorship ment of the Supreme Court on certiorari to which exists by implication in a joint tenancy circuit court quashing a writ of attachment, is expressly provided for by such a form of Freedman Company and others appeal. Afdeposit.

Appeal from Supreme Court.

firmed.

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes