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discharge of his official duties "shall keep an account of such fees and shall return a copy thereof annually to the comptroller of the state for his inspection, and that every such officer, "when the amount received by him for the year shall exceed the sum which he is by law entitled to retain as his salary or compensation for the discharge of his duties, and for the expenses of his office, shall yearly pay over to the treasurer of the state, the amount of such excess, subject to such disposition thereof as the General Assembly may direct" (article 15, § 1). These provisions make no distinction as to the various sources from which the fees of the officers referred to may be derived, but require any surplus after the payment of salaries and expenses to be paid to the state treasurer without reference to the question as to whether the money may have been collected in part from the city or county. To the extent to which fees paid by the municipality out of funds raised by taxation contribute to the creation of a surplus payable into the treasury of the state, it is urged that the local taxpayers are unequal

nates. It is in furtherance of the important public purposes of such proceedings that the services of the clerk in connection with crim-inal cases must be rendered. In performing the duties required of him by law, in order that persons accused of crime may be regularly brought to trial, he acts primarily on behalf of the public. Ordinarily the clerk is entitled to collect his fees from the party at whose instance he rendered the services for which the fees are chargeable. In a civil suit, while the judgment determines the liability of the parties for costs as between themselves, yet they are directly liable to the clerk for the services which they have respectively caused him to perform. A judgment of conviction in a criminal case subjects the defendant to legal responsibility for the costs as between himself and the state, but it does not affect the primary rights of the clerk as to the collection of his fees. While the state cannot be charged with the costs or sued for their recovery, there is no corresponding exemption in favor of the city and of the counties that relieves them from the duty of compensating the clerks of the courts administer-ly and unjustly burdened for the benefit of ing justice within their limits for services required to be rendered in the public interest. The law expressly authorizes the clerks to charge for such services as those upon which the pending claim is based, and the fees to which they are entitled for their various of-al Assembly has power to accomplish the purficial acts are definitely prescribed. The provision for such charges would have been futile with respect to most prosecutions in which convictions are secured if there were no primary liability to the clerk on the part of the city or county and he were compelled to depend for his fees upon the individual responsibility of the convicts. The considerations we have suggested are sufficient to account for the fact that the right of the clerk to collect from Baltimore city and the counties, respectively, accounts like the present one for fees in criminal cases has been so long and so universally recognized and acted upon as to become a part of the common law of the state.

The main objection of the city to the payment of the fees claimed from it by the appellee is that the money thus obtained would be more than sufficient to meet the expenses of his office, and that the surplus would not revert to the city from whose funds it was derived, but would be payable into the state treasury. There are constitutional provisions to the effect that the compensation of clerks and their "assistants and office expenses shall always be paid out of the fees or receipts of the offices, respectively" (article 3, § 45), and that every person holding any office under the Constitution or laws of the state (except justices of the peace, constables, and coroners) whose pay or compensation is derived from

the state at large. This contention might be made the basis of an appeal to the Legisla ture to correct any inequalities of the nature complained of which may be produced by the operation of the present system. The Gener

pose of such an appeal under the authority reserved to it by the Constitution to direct the disposition of the excess funds received by the state treasurer from the clerks. But the decision of the courts as to the right of the clerks to collect their fees and as to the sources from which they can be derived cannot be affected by a consideration of the propriety of existing provisions of law as to the application of the fees after they are received.

[4] The city does not object to the use of its funds to supplement the receipts of the appellee from other sources in so far as may be necessary to pay his salary and the expenses of his office, and it has therefore voluntarily made the recent payments to which we have referred. These payments, however, unless they are to be regarded as being on account of fees legitimately due the clerk, are not authorized by law to be made or accepted. If the fees collectible by the appellee were inadequate to meet the expenses of his office, he could not, under the present laws, require the city to supply the deficiency. It could only be supplied by the State Treasurer, out of the surplus funds received from other clerks of courts in Baltimore city, as provided by statute (Code, art. 17, § 12), but such relief is made available upon the theory that the clerk is regularly collecting so far as practicable the fees to which he is entitled.

N. J.) NEW JERSEY TITLE GUARANTEE & T. Co. v. JERSEY CO-OP. R. CO.

(110 A.)

109

now authorized to decide is whether the ap- assignee was justified in exacting no considerapellee is entitled to the payment by the city of tion for such releases. the fees he is claiming in this suit, and for the reasons already stated we are of the opinion that such a right exists and is legally enforceable.

[5] It was argued on behalf of the city that, since it has paid the appellee amounts sufficient to meet the expenses of his office, and the sum now sought to be recovered would constitute a surplus which would be payable to the state treasurer, the suit should have been brought, if at all, in the name of the state. This theory cannot be sustained. The fees are not payable to the state until they have first been collected by the clerk, and the existence of a surplus in his hands has thus been determined.

The various contentions of the city were presented on demurrer, by exceptions to evidence, and by prayers, as to all of which the court below ruled consistently with the conclusion we have stated.

Three of the prayers questioned the scale of charges adopted for several classes of the fees claimed, but no reference was made to these prayers in the brief of the city in this court. The fees in question appear to be justified by sections 6 and 12 of article 36 of the Code. relating to the fees of clerks and other officials.

Judgment affirmed, with costs.

(90 N. J. Eq. 615)

NEW JERSEY TITLE GUARANTEE
TRUST CO. v. JERSEY CO-OP.
REALTY CO. et al. (No. 20.)

&

(Court of Errors and Appeals of New Jersey. May 9, 1919.)

4. Mortgages 171(2)—Mortgagee held not charged with notice of subsequent incumbrances.

A mortgagee is not charged with notice of subsequent incumbrances or interests merely by the recording of instruments evidencing

them.

5. Mortgages 315(3)-Releases held good as against subsequent purchasers of lots in mortgaged tract.

Where loan was made to pay off mortgages and lender in addition to taking new mortgage to secure loan took an assignment of the existing mortgages, releases as to lots for the consideration specified in the new mortgage were good as against subsequent purchasers notwithstanding prior mortgages; the prior mortgages being merely collateral to the new mortgage.

Appeal from Court of Chancery.

Action by the New Jersey Title Guarantee & Trust Company against the Jersey Cooperative Realty Company and others. Judgment for plaintiff, and defendants appeal. Affirmed.

On appeal from a decree of the Court of Chancery advised by Hon. James F. Fielder, advisory master, who filed the following opinion:

The defendant Jersey Co-operative Realty Company was the owner of two tracts of land in Union county; the one known as the El Mora tract, and the other as the Elizabeth Heights tract. Through an agent it applied for and was granted a loan by complainant on bond and mortgage in the sum of $20,000, which mortgage was dated June 30, 1913, and recorded July 5, 1913. The mortgaged land was part its predecessors in title, and was covered by of larger tracts owned by the mortgagor and three mortgages-one held by the Mutual Life Insurance Company, on the Elizabeth Heights tract; the second held by the estate of Phebe O. Earl, covering the El Mora tract; and the third held by Myra W. Woodley, covering both tracts. The complainant applied its $20,000 loan to pay off these three mortgages; the first being canceled of record and the Earl and Woodley mortgages being assigned to complainant. The expenses of the loan, including the assignments, added to the amount of the three mortgages, left a balance of $3,416.80, which was paid to the mortgagor. Certain parts of In mortgage foreclosure action, held, under the tracts covered by the assigned mortgages the evidence, that mortgagee was not required had been sold by the mortgagor prior to the to have made an inquiry as to existence of un-loan, and, the mortgagor specifying lots or plots recorded contracts or deeds for any part of mortgaged premises.

1. Vendor and purchaser 229(1)-Party with notice required to make proper inquiry. Where the party sought to be charged has actual notice that the property is incumbered or is in some way affected by the rights of others, he is bound with constructive notice of facts which a proper inquiry made by him would

disclose.

2. Mortgages 186(5)-Mortgagee held not required to make inquiry as to existence of unrecorded instruments.

which it desired excepted from the mortgage lien, they were not included in the new mortgage, and were also, as part of the transaction,

3. Mortgages 315(3) -Releases as to lots released by complainant as assignee of the two without consideration held proper.

prior mortgages; such releases being given without consideration. This suit is brought to foreclose the three mortgages.

Where release of mortgages from certain lots were given as a part of agreement for loan by assignee of mortgages, without notice of The Jersey Co-operative Realty Company the rights of purchasers of other lots in mort- was a land company, and had made maps of gaged premises under unrecorded contracts, both tracts, showing streets, blocks, and lots

thereon. Deeds and contracts had been given | veyed or under contract, and the purpose of and recorded for lots it had sold prior to the the releases from the Earl and Woodley mortexecution of complainant's mortgage, while for gages were to free the excepted lots, so that others there were unrecorded contracts. When the mortgagor could convey them or assure application was made for the $20,000 loan, cop- good title to the holders of deeds. The only ies of the maps were furnished the complainant, evidence in the case which might charge the with a list of the lots which were to be includ- complainant with notice of the defendants' ed in the mortgage, and complainant's title ex- claims was given by Mr. Woolley, a title examamination was made against the listed lots, and, iner for complainant, who testified that Seaman, so far as the record disclosed, title to all the the agent who negotiated the loan, told him lots mortgaged to complainant was in the mort- there might be outstanding contracts, and that gagor free and clear of any contract to convey, the complainant had better take assignments of or other interest or lien in any other person. the prior mortgages for its protection against As a matter of fact, there were outstanding any such. It is not necessary to discuss whethcontracts of which complainant claims it had er the position Woolley held with his company no notice; but some of the answering defend- bound the company's officers or directors with ants contend that complainant was actually in- knowledge of such facts communicated to him, formed that unrecorded contracts existed, or because it does not appear that any knowledge that its rights must be held to be subject there- of sufficient definiteness was communicated to to, because it knew that the mortgagor's busi-him which would put him or his principal on ness was selling lots, and it was therefore charged with notice of all sales made by it. After the mortgage was recorded, contracts purporting to antedate the mortgage and deeds under such contracts were placed on record for lots in the mortgaged tracts.

The complainant's mortgage contained a clause whereby it agreed to release lots in either tract on payment of $5 per front foot, but the Earl mortgage contained no release clause, and the Woodley mortgage contained a provision for releases on the basis of an acreage value. From the Earl and Woodley mortgages the complainant, as has been stated, gave releases without consideration for property not included in its third mortgage, and it further released various lots from all three mortgages on

the basis of the front-foot rate specified in the third mortgage. Some of these releases were given before and others after the answering defendants' interest were made matter of rec

ord; but, again contending that complainant had actual or constructive notice of their rights,

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inquiry.

The complainant had before it the application for the loan made by Shearer, the president of the borrowing company, which was, in effect, a statement that there were no outstanding contracts. I refer to the following questions and answers therein contained:

"(9) Is the property incumbered by mortgage, easement, ground rent, mechanic's liens, muincumbrance'? Ans. $4,500; $4,000; $10,000." nicipal liens, judgments, or 'by other lien or

"(12) Objections to title known or rumored? Ans. None. Restrictions in deeds by owner. "(13) Unrecorded deeds, agreements, adverse claims and interests, or secret trust, known or rumored to exist? Ans. None."

clear, and upon all these facts I conclude that

[2] The title examination showed the record

no statement was made to complainant's officers which should have aroused their suspicions, or required inquiry on their part to ascertain deeds for any part of the mortgaged premises, whether there were unrecorded contracts or and I am of the opinion that its mortgage is a prior lien to the defendants' claims.

[3-5] We come next to consider the effect of complainant's releases. The releases from the Earl and Woodley mortgages, given at the time of the execution of its $20,000 mortgage, were delivered before the defendants' interests were made matters of record, and, having no notice of such interests, complainant was justified in exacting no consideration therefor. It was part of the agreement for the loan that they should be released, and, had complainant canceled the Earl and Woodley mortgages of record, that would have been the effect. All other releases were given in accordance with the release clause contained in the $20,000 mortgage. Under our decisions, a mortgagee is not charged with notice of subsequent incumbrances, or interests, merely by the recording of instruments evidencing the same; but, knowing that the mortgagor was engaged in selling lots and that it would probably sell some of those mortgag

they say that complainant under the Earl mortgage could release only for an adequate consideration, and under the Woodley mortgage for a consideration based on an acreage rate, and that the consideration received was inadequate. [1] The determination of the two points raised by the defendants turns upon the question of notice to complainant of their rights. The rule is that, where the party sought to be charged has actual notice that the property is incumbered or in some way affected by the rights of others, he is bound with constructive notice of facts which a proper inquiry made by him would disclose. There is no evidence in the case to show that the mortgagor's officers or agents informed the complainant of specific outstanding contracts affecting the property to be mortgaged. The officers of the complainant who had to do with the transaction testify they had no such knowledge. The property was vacant, and when complainant's officers inspected it, prior to agreeing to make the loan, there was no evidence of ownership by possession. The president and the agent of the mortgagor submitted to complainant a listed, and having incorporated a release clause for of the lots which they proposed to mortgage that purpose in its mortgage, the complainant and a list of others which were to be excepted would probably be bound to take notice of the from the mortgage, and this was equivalent to rights of subsequent purchasers; but as its a statement that those they proposed to mort-real debt was the $20,000 mortgage, and the gage were free from claims of others, and that those to be excepted were the ones already con

two prior mortgages were merely collateral thereto, I am of the opinion that the defend

(110 A.)

ants have no rights as against the releases given for the consideration specified in the $20,000 mortgage.

The complainant holds a judgment against the owner or owners of the premises in question, and there is no dispute that its execution thereon and levy on the mortgaged premises were prior to any other execution and levy. After the filing of the bill of complaint a receiver for the owner was appointed by this court, who was by proper proceedings on complainant's motion made a defendant herein and the bill taken as confessed against him. I think the complainant is entitled to have its judgment made out of the sale of the mortgaged premises, in the proper order of its priority. As to the method or manner of selling the mortgaged premises, I am willing to hear the parties further, but I think the property still covered by the complainant's mortgages should be sold to pay the amount found due thereon and in satisfaction also of the two mortgages it holds by assignment. Such portion of the two tracts in which the answering defendants have no interest should be sold first, and the El Mora tract should be sold prior to the Elizabeth Heights tract. Each tract should be sold in parcels of two lots each, and, if sufficient is not realized to satisfy complainant's mortgage and judgment, the remaining part of the mortgaged premises should be sold in such order as may be settled by the decree to be entered herein.

It is suggested on behalf of the answering defendants that the property should be sold free of municipal liens and free of restrictions. I know of no statute authorizing such course with respect to liens, and I can offer no different, or less, or better title sold than the mortgage conveyed. I think the sale should be made by a special master, that he should be authorized to expend, not exceeding $300, to specially advertise the sale, and that, after paying the amount due the complainant on its mortgage and judgment and the amount due the defendant Gilhooley, trustee, on his mortgage, the surplus should be brought into court, and the equities of the other defendants ascertained, and a proper distribution then ordered.

Sidney W. Eldridge, of Elizabeth, for appellants.

Collins & Corbin, of Jersey City, and Clarence D. Meyer and John K. English, both of Elizabeth, for respondent.

PER CURIAM. The decree appealed from will be affirmed, for the reasons stated in the opinion filed in the court below by Advisory Master Fielder.

(90 N. J. Eq. 289)

PRISCO v. PRISCO et al.

overcome and destroy the regular and formal written title which declares that the conveyance be for the use and benefit of the grantee, and to thus raise a resulting trust in favor of the person so paying the purchase price. 2. Gifts 47(1)-Father's conveyance to son or conveyance to son paid for by father presumed a gift.

Where the conveyance is made by a father to his son, or where the consideration is paid by the father, and the conveyance made by a third person to the son, there arises a presumption of gift which must be overcome by evidence before it can be determined that the written instrument shall not be effective according to its

terms.

3. Trusts 87-Resulting trust must be established by facts constituting part of transaction with purchase.

The proofs which shall raise a resulting trust or rebut the presumption of a gift or settlement in case of a child or wife must be of facts antecedent to or contemporaneous with the purchase or else immediately afterwards so as to be in fact part of the same transaction, since a resulting trust cannot be raised from matters arising ex post facto.

4. Gifts 47(1)—Proofs in rebuttal of presumption of gift upon parent's conveyance to child must be convincing.

The proofs to rebut the presumption of a gift in favor of a child or wife must be equally satisfactory and explicit with the proofs required to establish a resulting trust, and the circumstances relied on must be convincing and leave no reasonable doubt as to the intention of the party.

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6. Gifts 47(1) Improvements made on land conveyed to son by father presumed to be gifts to son.

Improvements made on land by father after conveyance of land to son upon payment of purchase money by father presumed to be gifts to the son.

7. Parent and child 3(2)-Son not entitled to income of property taken care of by his father while he was being supported by father.

Where father made improvements on land conveyed to son for purchase money paid by father, son was not entitled to an accounting

(Court of Errors and Appeals of New Jersey. for the net income of the property prior to the Feb. 6, 1919.)

1. Trusts 72-Resulting trust may arise in favor of person paying purchase money where other than grantee named.

The payment of purchase money by a person other than the grantee named in the deed may in some circumstances be sufficient to

time that he permanently left his parent's home while father was supporting him.

Appeal from Court of Chancery. Action by Henry Prisco against Thomas Prisco and others. From judgment rendered, plaintiff appeals. Affirmed.

On appeal from a decree in the Court of Chancery advised by Vice Chancellor Leaming, who filed the following opinion:

"One of the deeds of conveyance which is challenged in this case was made by Palmyra Ice & Coal Company to complainant January 20, 1913, and recorded February 19, 1913. The other, also challenged, was made by William L. F. Gsand to complainant July 16, 1913, and recorded July 19, 1913. Both deeds express money considerations and declarations to the use of the grantee. It is, however, conceded that the consideration of these deeds was paid by the father of the complainant, and that the complainant was at that time only 16 years of

age.

[1, 2] "The payment of the purchase by a person other than the grantee named in the deed of conveyance may, in some circumstances, be sufficient to overcome and destroy the regular and formal written title which declares the conveyance to be for the use and benefit of the grantee, and to thus raise a resulting trust in favor of the person so paying the purchase price (see Whitley v. Ogle, 47 N. J. Eq. 67, 20 Atl. 284; Midmer v. Midmer's Executor, 26 N. J. Eq. 299); but where the conveyance is made by a father to his son, or where the consideration is paid by the father and the conveyance made by a third party to the son, there arises a presumption of gift which must also be overcome by evidence before it can be determined that the written instrument shall not be effective according to its terms. And to overcome such presumption of gift from a father to his son, the evidence relied on must be convincing and leave no reasonable doubt. This rule is defined by our Court of Errors and Appeals in Read v. Huff, 40 N. J. Eq. 229, as follows:

here in question were not gifts to the son are adequate to establish that fact with that degree of certainty which the law requires.

[5] "A detailed review of the evidence seems unnecessary. It is quite possible that the father of complainant may have had in mind at the time the conveyances were made that he could reclaim the titles in the event that his son's future conduct was not satisfactory; but, in view of the good conduct of his son up to that time, it is more probable that no substantial doubt touching his future conduct was then entertained by the father, and that no thought of the possible necessity of recalling the conveyances entered his mind at that time. The testimony touching what was said to the son about his future good conduct, especially in view of the testimony to the contrary, when considered in connection with all the circumstances of the case, fails to convince me that a gift was not intended. The claim made by counsel that the consideration paid was one which the son was to earn by future good conduct is but a restatement of the claim that the conveyances were not gifts. I am convinced that the presumption of gifts has not been overcome by the evidence with that degree of certainty which is required in such circumstances. As stated by our Court of Errors and Appeals, the declaration to the use of the son, as contained in the deeds, and the accompanying presumption of gifts to the son, should only be overcome by proofs certain, definite, reliable, and convincing, and leaving no reasonable doubt as to the intention of the parties.

"The marriage of the son shortly before he reached his majority obviously was the act which occasioned the parents' dissatisfaction and led to the attempted repudiation of the gifts; but for that act it may well be doubted whether any controversy would have arisen.

[3, 4] ""The proof which shall raise a result- [6] "This view is equally applicable to the ing trust, or rebut the presumption of a gift or improvements subsequently made on the land settlement in the case of a child or wife, must by the father. The improvements will be prebe of facts antecedent to or contemporaneous sumed to be gifts to the son unless that prewith the purchase, or else immediately after-sumption is sufficiently overcome by the proofs. wards, so as to be, in fact, part of the same transaction; a resulting trust cannot be raised from matters arising ex post facto. 1 Lead. Cas. in Eq. 223; Cutler v. Tuttle, 4 C. E. Gr. 549. It is also well settled that the proof which shall rebut the presumption of a gift ir favor of a child or wife shall be equally satisfactory and explicit with the proof required to establish a resulting trust; the circumstances relied on must be convincing, and leave no reasonable doubt as to the intention of the party. Peer v. Peer, supra.'

"This rule is again stated by our Court of Errors and Appeals in McGee v. McGee, 81 N. J. Eq. 190, 86 Atl. 406, as follows:

""The rule in this state is well settled that where a husband procures real estate to be conveyed to his wife, he paying the consideration, a presumption arises that he intends to settle the property on her, and while such presumption may be rebutted, the proof offered to accomplish it must be certain, definite, reliable and convincing, leaving no reasonable doubt of the intention of the parties.'

"Accordingly the primary inquiry in this suit is whether the proofs which have been offered to establish as a fact that the conveyances

Selover v. Selover, 62 N. J. Eq. 761, 763, 48 Atl. 522, 90 Am. St. Rep. 478. The notion that the residence was personalty and was designed to be removed by the father for his own use is clearly untenable. It was no part of the intention of any one to ever have the building removed from the lot on which it stood except upon the possible contingency of a defective title to the lot. As between the father and son the building was clearly intended as a permanent improvement to the lot.

"I am satisfied that complainant is entitled to an injunction restraining the removal of the house from the lot on which it stands.

[7] "But I do not think that complainant is equitably entitled to an accounting for the net income of the property prior to the time he permanently left his parents' home. Prior to that time he resided at his parents' home at their expense and they received his wages, except as to small allowances to him for spending money. Soon after his marriage he left his parents' home with their consent; until then he was unemancipated. It accordingly seems inequitable to charge the parents with the net income of the property during the period that they assumed the burden of their son's support.

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