Conford, J.A.D. (temporarily assigned).
This is an action by the plaintiff to rescind an agreement which he made with the defendant Natalie Rubenstein, his former wife, on October 5, 1953, pursuant to which he conveyed to a corporation almost wholly owned by her all of his interest in two parcels of real property, one referred to as "Marlboro Farm" in Marlboro Township, and the other the "Factory Property" in the Borough of Farmingdale, and to set aside the conveyances executed pursuant to the agreement the same day, on grounds of duress. The parties were husband and wife until October 1955, when a final judgment of divorce was granted to him on his counterclaim for extreme cruelty in an action for divorce brought by her on the same ground. She did not contest the counterclaim. The intervenor, Frank Grant, holds a contract to purchase a portion of the lands at the Marlboro Farm, entered into with the defendant Natalie's Realty Co., Inc. in December, 1953. Consummation of that sale has been held in abeyance pending the outcome of this action.
The plaintiff seeks in the present action to compel the individual defendant (hereinafter referred to as defendant) to reconvey to him a one-half interest in the real property in question or, in the alternative, to issue to him shares of capital stock in the defendant corporation equalling one half of the total outstanding stock therein. He further seeks the establishment of a lien upon the proceeds of the sale of lands in his favor to the extent of one-half and asks an adjudication that the defendant is seized of the real estate in question as trustee for two infant children of the marriage.
In addition to a denial of the charge of duress, the defendant submits defenses of ratification, laches, unclean hands, and estoppel, and the intervenor contends that he became the equitable owner of the lands which he contracted to purchase and that his interest is superior to any equity of the plaintiff. As I view the proofs, however, it becomes necessary for me to determine only one basic issue, i.e. , whether or not the evidence adduced at the two-week trial establishes a case of such duress exercised upon plaintiff as
will move the court to set aside the transactions of October 5, 1953.
Plaintiff contends that the acts of duress which resulted in his conveyances to the defendant of the properties in question commenced in December 1952 and continued until his submission to the defendant's demands on October 5, 1953. He says that beginning in December 1952 she threatened to have him "beaten up by gangsters" and to give him arsenic and expressed a wish for his death; that he was reduced to a state of fear for his life and safety by these statements; that these threats, beginning in April 1953, were accompanied by insistent and repeated demands on her part that he convey his interest in the properties to her; and that she exercised further duress upon him by having him arrested for non-support and desertion on August 6, 1953 and threatening to prosecute that claim "to the hilt" unless he made over the properties to her. These activities on her part assertedly resulted in his capitulation and conveyance of his interests on October 5, 1953.
The defendant submits a wholly different version. It is this. The parties were married in 1942 and managed to accumulate some real estate through the financial aid and assistance of the defendant's relatives. They were reasonably well adjusted as a married couple until the winter of 1952-1953, except for occasional expressions of intention by the plaintiff to leave the country and make a livelihood in other parts of the world, such as Arabia, Israel and Saskatchewan, intimations which left her with a feeling that he wanted to abandon her and their children. One child was born in 1948 and the other in 1952. Early in 1952 he broke up a business partnership with his father consisting of a poultry farm and told his wife that unless they could arrange to build a chick hatchery at his own farm in Marlboro, he would leave to make his livelihood in Arabia. He went so far as to dictate to her a form of agreement on February 25, 1952, conveying all his realty to her in return for her assumption of all his debts, the costs of a divorce proceeding, and support of the children for two years. This writing
was never executed. At a family conference consisting of both his relatives and hers, attempts were made to persuade him to abandon the idea of a hatchery at Marlboro on the grounds that they were already overburdened with debts incurred in acquiring their property and that the hatchery would not be feasible economically. He refused to heed this advice, and the hatchery project was undertaken to keep him satisfied with the aid of loans advanced by the defendant's relatives. It went into operation in the fall of 1952 and ceased operation April 1953, apparently a failure. The hatchery project involved a total expense and indebtedness of some $15,000.
In December 1952 the older child developed a mental illness, and the parties were in considerable disagreement over his treatment. The condition was diagnosed as "childhood schizophrenia." Defendant was loath to accept the diagnosis and her efforts to continue with medical consultations met objections by the plaintiff, who was satisfied with the medical verdict and wanted the child committed to an institution at once. The child was finally committed to the Brisbane Psychiatric Center on July 13, 1953 and has been continually confined in one institution or another ever since.
The defendant's contention is that the failure of the hatchery, the illness of the child, the press of debts, and his general instability led the plaintiff to desert her on July 20, 1953, after a period of months in which he frequently threatened such action and repulsed efforts by his wife and members of her family to persuade him to keep the family together. He went to live with his parents at Farmingdale, some 12 miles from the Marlboro Farm. When he left he gave no indication of where he was going and hinted that he was leaving the country. He returned, allegedly to visit the remaining child, early in August, and the defendant asked what he was going to do about provision for her support. His response was that he was not working and that he would not support her, but that she could subsist by using rents from apartments at the farm property. She remonstrated on the ground that the rents were needed to pay
carrying charges on the property and to help reduce their many outstanding indebtednesses. Being of the opinion that he did not intend to return to her and might still leave the country, leaving her unable to liquidate the realty, she asked him to convey the properties to her, in return for which she would assume all of their obligations and the support and maintenance of the children. He refused. On the occasion of his next visit to the farm, August 6, 1953, she had him arrested for non-support after consultation with and upon advice by counsel. The charge against him was based on N.J.S. 2 A:100-2. He was released on bail the next day and from thenceforward visited the farm about twice a week, on each occasion visiting with the younger child and discussing a final property settlement with the defendant. She contends that her demand on these occasions was always either for support or for conveyance of the properties, subject to the conditions already mentioned. She admits that she told him that unless she got support or a conveyance of the property, she would prosecute the pending complaint. Both he and she were separately represented by counsel during the negotiations. Finally, a week or two prior to October 5, 1953, they agreed upon his conveyance of the properties to her in return for her assumption of all of their debts and liabilities and her agreement to relieve him of any obligations for the support of herself and the children. She contends that his execution of the deeds for the properties and of the agreement pursuant to which they were executed were the result solely of his own conception, aided by legal advice, of what was for his own best interests and convenience, that he was in no fear whatsoever at any time, and that he deliberately consummated what he thought was a good deal for himself.
The consideration of the evidence by the court must be premised upon the initial assumption that plaintiff did what he did as a matter of his own free will. The burden of proof is his to establish the contrary. "Duress is not to be presumed and, therefore, it is incumbent upon these complainants to prove that the alleged coercion actually
subjugated their minds and was the efficient cause of the course of action they pursued." Ewert v. Lichtman , 141 N.J. Eq. 34, 36 (Ch. 1947).
In the appeal from a prior judgment in this case, the Supreme Court recapitulated the principles controlling in an action to avoid a contract or conveyance on grounds of duress. Rubenstein v. Rubenstein , 20 N.J. 359 (1956). The court said (20 N.J. , at page 366):
"It would seem to be basic to the legal concept of duress, proceeding as it does from the unreality of the apparent consent, that the controlling factor be the condition at the time of the mind of the person subjected to the coercive measures, rather than the means by which the given state of mind was induced, and thus the test is essentially subjective."
The court went on to cite, with approval, the following language from Fountain v. Bigham , 235 Pa. 35, 84 A. 131 (Sup. Ct. 1912):
"The threat must be of such a nature and made under such circumstances as to constitute a reasonable and adequate cause to control the will of the threatened person, and must have that effect; and the act sought to be avoided must be performed by ...