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Weisberg v. Koprowski

Decided: January 31, 1955.


On appeal from Superior Court, Appellate Division.

For reversal -- Chief Justice Vanderbilt, and Justices Oliphant, Wachenfeld, Burling, Jacobs and Brennan. For affirmance -- Justice Heher. The opinion of the court was delivered by William J. Brennan, Jr., J. Heher, J. (dissenting).


In 1941 Morris Koprowski purchased houses at 209 and 214 Carroll Street in Paterson, taking title in the maiden name of his mother Yetta Koprowski, nee Weisberg. This appeal is here on certification granted, 16 N.J. 192 (1954), the defendant Caroline Koprowski, the widow and sole heir of Morris, from a judgment of the Appellate Division which reversed a Chancery Division judgment declaring that Yetta held the title to the properties subject to a resulting trust in favor of Morris, and that Caroline is entitled to the properties.

Morris died in 1943, intestate, survived by Yetta and Caroline. Morris and Caroline had no children. Yetta, widowed before the first World War, had come to America with Morris and Caroline from England in 1919. The three lived, after 1921, in a home at 51 Carroll Street purchased by Morris in his and Caroline's names and at which address he and Caroline carried on a successful barber and beauty shop. They were a harmonious trio, devoted to one another. Yetta suffered from Parkinson's disease and Morris and Caroline

were particularly solicitous of her welfare on that account. Yetta and Caroline continued their close relationship after Morris' death, living together at the homestead until Yetta died, also intestate, in 1950.

Of record at Yetta's death, in addition to the titles to the houses at 209 and 214 Carroll Street, was a $3,000 mortgage, also in her maiden name, on the homestead at 51 Carroll Street. The mortgage had been assigned to her by a former holder in 1939.

The instant action began as a proceeding by plaintiff, Yetta's nephew and the administrator of her estate, to foreclose the $3,000 mortgage. Caroline's defense was that Yetta took the assignment of the mortgage on trust for her and Morris and simultaneously with the assignment had executed a formal discharge of the mortgage, which discharge, however, had not been recorded. Caroline also counterclaimed that the properties at 209 and 214 Carroll Street were held in Yetta's maiden name subject to a resulting trust for Morris.

There have been two trials of the case. At the first trial the court dismissed both complaint and counterclaim. The judge found that Caroline's defense to the foreclosure suit was established by the proofs, but that on the counterclaim she had not proved the basic required fact to show a purchase price resulting trust, namely, that Morris had paid the purchase price for the properties at 209 and 214 Carroll Street.

The source of the cash payments toward the purchase price of the properties was a bank account in Yetta's maiden name. The trial judge was not satisfied that the proofs offered at the first trial showed that this account actually belonged to Morris. Morris had opened the account with his funds in 1934, taking a power of attorney from his mother authorizing his withdrawal of funds therefrom. It reasonably appears that the account was opened by Morris in his mother's maiden name primarily to put him in a position to acquire the $3,000 mortgage on the homestead at less than its face value without disclosing that he was the actual purchaser.

The mortgage was held by a California resident who was pressing for its payment. Several years of negotiations by correspondence ensued, from 1934 to 1939, before Morris finally succeeded in reaching agreement with the holder to accept $2,500 for the mortgage. This sum was paid with Yetta's check for $2,000, prepared by Morris and drawn on the account, plus $500 cash provided by Morris. The acquisition took the form of an assignment of the mortgage to Yetta in her maiden name. The discharge of the mortgage executed by Yetta at that time was not recorded because Morris desired to be in a position to use the mortgage as collateral if he borrowed money.

The only other withdrawals from the account were three made in connection with the purchase of the 209 and 214 Carroll Street properties, and 13 withdrawals of interest, made as interest on the deposit periodically accrued and was credited to the account. The cancelled checks evidencing the withdrawals in connection with the purchase of the properties were produced at the first trial; but the slips evidencing withdrawal of interest could not be located at that time, and there was no evidence satisfactory to the trial judge that Morris in that wise asserted control of the account through exercise of his power of attorney.

The three checks issued in connection with the purchase of the properties were prepared by Morris and signed by Yetta. The purchase prices of 209 and 214 Carroll Street were $5,500 and $5,000, respectively. When Morris in 1941 submitted a single bid for both properties he transmitted with his bid Yetta's check, prepared by him, for $1,050, or 10% of the aggregate purchase price. The balances were paid by Yetta's bond and mortgage for $3,850 and $3,500 on the respective houses and Yetta's checks, prepared by Morris, for $1,136.39 and $1,130.90 which included an excess over the full purchase price representing adjustments.

The trial judge did not consider at the first trial that the evidence of Morris' preparation of the checks on the account,

and the other proofs mentioned, sufficed to support a finding that the account belonged to Morris and not to Yetta.

After Caroline appealed the dismissal of the counterclaim to the Appellate Division, the bank which, through merger, had succeeded to the affairs of the bank where the account was maintained, found the 13 withdrawal slips showing that Morris, using his power of attorney, made 12 of the 13 withdrawals of interest credited to the account in his lifetime. Withdrawal of interest as soon as it was credited was a business practice followed by Morris in connection with bank accounts he maintained in his own name. Upon Caroline's motion in the Appellate Division to make this evidence part of the record, that court declined to take the evidence, but stayed the proceedings on the appeal pending an application by Caroline to the Chancery Division for a new trial on the ground of newly discovered evidence.

Not only Caroline, but the plaintiff as well, moved to reopen the judgment, and for a new trial on the ground of newly discovered evidence. Both motions were granted, and the second trial followed. The record made at the first trial was supplemented with evidence concerning the interest withdrawals and the 13 withdrawal slips were marked in evidence.

At the conclusion of the second trial the trial judge entered a new judgment, again dismissing the foreclosure complaint, but granting Caroline the relief sought on the counterclaim. On plaintiff's appeal from that judgment the Appellate Division sustained the dismissal of the foreclosure complaint (plaintiff did not seek certification from that action) and, as mentioned, reversed the judgment on the counterclaim.


Plaintiff argues that the Appellate Division erred in staying the proceedings on defendant's first appeal and remanding the case to permit the application for a new trial. Having availed himself of that same remand to make a like

application, it is questionable whether plaintiff should be heard to make that argument. At all events, the argument is without merit. It is familiar appellate practice to remand cases for further proceedings and further evidence where justice demands that course. Giacchi v. Richmond Brothers Co., 12 N.J. Super. 308 (App. Div. 1951).

The interest withdrawal slips were vital evidence showing control of the account justifying, with the other circumstances, the inference that the funds on deposit were really the funds of Morris. The inability of the defendant, despite due diligence, to obtain the slips at the first trial, coupled with the uncontradicted evidence that the successor bank located the slips after the appeal was taken when that bank undertook to microfilm the records of its predecessor, were ample support for the Appellate Division's exercise of its broad discretionary power to remand. Cf. State v. Pillo, 15 N.J. 99, 105 (1954).

And the same showing in the trial court was sufficient warrant for the allowance of a new trial on the grounds of newly discovered evidence. The elements which must coalesce to entitle a party to a new trial for newly discovered evidence fully appear. State v. Hunter, 4 N.J. Super. 531, 537 (App. Div. 1949). The withdrawal slips cast a definite light upon the ownership of the account; that they were material evidence capable of changing the result is conclusively established from the fact that upon the record made after they were received the trial judge concluded, contrary to his finding on the first trial, that "The money with which ...

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