Mintz, J.c.c. (temporarily assigned).
[55 NJSuper Page 458] Plaintiff is the daughter of Otto C. and Alvina K. Dietche, both now deceased. In the late 1920's the family suffered financial reverses. In 1931 Ida Schweitzer obtained a deficiency judgment against plaintiff, her husband, her parents, her brother and his wife. The Fidelity Union Trust Company also obtained a deficiency judgment against these parties as a result of a foreclosure on other property in Essex County in or about the year 1932. Ida Schweitzer caused a levy to be made on certain lands in the Borough of Morris Plains
described in the complaint, title to which was then in plaintiff's mother, Alvina K. Dietche, her father having passed away. As a result of this levy, the premises were sold by the sheriff to the judgment creditor.
On July 19, 1932 Ida Schweitzer and others conveyed the property in question to one Dudley B. Dawson and Julia G. Dawson, his wife. Said deed was recorded in the Morris County Clerk's office three days later. Julia died on December 25, 1939, and Dudley subsequently married co-defendant, Anna.
Dudley B. Dawson died on May 11, 1957. The defendants, executors and trustees under his will, claim that the deed passed title absolute to the decedent. The plaintiff's contention is that it was merely a security device and that said deed should be adjudged a mortgage, or in the alternative, that defendants hold title to said realty in trust for her. Plaintiff brings this action to compel the defendants to transfer legal title to her upon the payment of the amount still due and owing to defendants by virtue of this security transaction. It was stipulated that in the event plaintiff prevails, the amount due defendants is $18,329.01 plus interest at 5% from August 4, 1958.
The tract of land in question, situate in the Borough of Morris Plains, was purchased by the plaintiff's father in 1924. Primarily through the efforts of her father and her husband, Harrison P. Vreeland, a dam and pond were constructed on the premises. In 1930 the Vreelands started a private swim club and have continued such operation every summer down to the present time, such premises being known as Vreeland's Pond.
After the subject property was sold by the sheriff to Mrs. Schweitzer, the Vreelands then being in possession of said premises were anxious to reacquire the same. Mr. Vreeland testified that he heard that Mrs. Schweitzer needed money. Fred Dietche, his brother-in-law, informed him that the property could be purchased for $8,000. The Vreelands were without funds. He decided to contact his friend, Mr. [55 NJSuper Page 460] Dawson, who operated a farm in the area. He told Mr. Dawson that the property could be bought for $8,000 and "if he would put up the money and hold it for me for later on I would pay him back." Dawson stated he would think it over. The following day Vreeland again saw Dawson, whereupon Dawson, according to Vreeland's testimony, stated he would do it and would charge him 5% interest, which was his usual charge on mortgage money. In subsequent testimony, Mr. Vreeland testified that he really meant that his arrangement with Mr. Dawson was that he was to hold the property for Mrs. Vreeland until repayment, since the property originally belonged to Mrs. Vreeland's family. He further stated that in all negotiations with Dawson he was representing his wife and Dawson was aware of this fact. Shortly after this meeting Mr. Vreeland testified that he brought Mr. Dawson to his lawyer, Mr. Horace Jeffers, then associated with the firm of King and Vogt. Discussions took place at the lawyer's office with respect to this property. Subsequently, Mr. Vreeland received from Mr. Dawson a check for $8,000 made by Mrs. Dawson and delivered it to his attorney, Mr. Jeffers, who proceeded to have the title to the premises searched and closed. All expenses incident to the title closing from Schweitzer to Dawson, including the search fee and the fee for recording the deed into the Dawsons, were billed to and paid by Mr. Vreeland. Mr. Dawson did not visit or inspect the property prior to the purchase. Mr. Jeffers testified that while he did not recall the exact arrangements between the Vreelands and Mr. Dawson, and did not know what their agreement was in the event the funds were never repaid to Dawson, yet he definitely stated it was his understanding that Dawson was trying to help Vreeland acquire the property. At the time of the title closing Ida Schweitzer executed an assignment of the judgment to the Dawsons. This assignment was found among the personal effects of Dudley B. Dawson, and appended thereto a memorandum was signed by Dudley B. Dawson, dated October 2, 1940, reading as follows:
"To Whom it may conserne --
"This is to certify that the assignment of judgment Ida Schweitzer to Dudley B. Dawson & Julia G. Dawson is of no value to my estate as it belongs to the people named herein and it was paid for by them."
Plaintiff has been in possession of the premises since the summer of 1930. Dawson always paid the taxes on the premises, from the date legal title passed to him and his wife in 1932 up to and including the first half of the 1957 taxes. It further appears that Dudley B. Dawson, as executor under the will of his first wife, Julia, filed an inheritance tax return with the State Tax Department wherein he listed the subject property under the joint ownership of his late wife and himself, and stated she had a one-half interest in same. He also filed a supplemental affidavit in said proceeding substantially to the same effect.
Over the years the Vreelands made substantial improvements upon the subject premises. They converted the upper floor of the barn into a four-room apartment with a kitchen and coal stove. For years they rented this apartment, collected the rents and profits without any accounting to Dawson, and ultimately moved into same. They replaced the coal stove with a hot air furnace for heat and an electric stove for cooking. Full screens were installed. The hayloft was converted into another room. The boat house was renovated so that it could be used for dressing rooms for the club. A new roof was put on the converted barn. In 1951 the plaintiff and her husband built an additional two-car garage. In 1934 they drove wells so that they could obtain a better water supply during the summer months, at a cost of approximately $2,000. They also improved the septic tank system.
The fire insurance premiums for the buildings were paid for by the Vreelands, although Mr. Dawson was designated the owner on the policies. There was admitted into evidence a page from the account book of Dudley B. Dawson, ...