This action is brought by two sisters against the widow and minor child of their deceased brother. Involved in the controversy is a tavern and five lots situated in the Borough of Wallington, in Bergen County. The complaint, in effect, seeks to have declared a resulting trust in the property. However, since the property has been sold, the plaintiffs now seek to recover two-thirds of the amount received from the sale.
The plaintiffs are the daughters of Ludwick and Katarzyna Lanucha. The defendants are the widow and infant daughter of Stanley, the deceased son of Ludwick and Katarzyna Lanucha.
The property was originally owned by Katarzyna Lanucha and her sister, Eva Podsada. In 1927 the Podsada interest was conveyed to Katarzyna Lanucha. In 1936 a mortgage upon the property, held by the Polish-American Building & Loan Association, was foreclosed. The Lanuchas continued to live in the premises after the foreclosure. Ludwick Lanucha operated the tavern and the family lived above it. Ludwick paid rent of $75 per month.
Plaintiffs' story of the sequence of events thereafter is as follows: In 1939 the building and loan association was being liquidated. Its shares were selling at a discount. Officers of the association urged Ludwick to take advantage of the opportunity to buy up shares which could be used for the repurchase of the property. Lanucha decided to take the advice. With $4,500 obtained from the Wawel Building and Loan Association he purchased shares of the Polish-American Building and Loan Association which had a par value of $8,100. With these shares and cash in the sum of $900 the property was purchased.
According to the plaintiffs the building and loan association was reluctant to deed the property back to Ludwick and Katarzyna Lanucha since they had been parties to the foreclosure. A family conference was held to decide who should take title. Violet, one of the daughters, was married, and Helen, the other daughter, was too young. So the choice fell upon Stanley, the son, who was 20 years of age and unmarried. In selecting Stanley as the grantee, Ludwick is alleged to have told him that the conveyance would be to Stanley in name only, and that Ludwick would continue to be the boss.
The building and loan association conveyed the property to Stanley Lanucha on October 30, 1939. On the same day Stanley Lanucha executed two bonds and mortgages to the Wawel Building and Loan Association, one for $4,000 and the other for $500. The installment payments called for by the mortgage were made by Ludwick Lanucha. He paid off the balance of $2,554.11 in 1944.
Ludwick died intestate on November 21, 1944. While he lived he ran the family with an iron hand. His was the ultimate decision on all matters concerning the business. He directed the affairs of his children. When he died, his wife Katarzyna took over the control and held it until 1947.
Stanley entered the Army in 1941. He was out of the country most of the time between then and 1946, when he received his discharge from the service. Then the question arose as to the manner in which the business should be conducted. Katarzyna was old and ailing. She wanted to be relieved of her responsibilities. Another family conference was held. It was decided that Stanley should run the business. The liquor license was transferred to him upon the understanding, say the plaintiffs, that the girls would get their share. Katarzyna died intestate December 17, 1947.
The tavern was remodelled at an expense of $10,700. The contract for the work which was to be done was signed by Stanley. The financing of the project was accomplished by a bond and mortgage for $8,000 executed by Stanley, supplemented
by loans from Helen Moskal, one of the plaintiffs, and from a niece of Katarzyna. Both loans were ...