Case ID: sc-eq_11/html/0451-01.html
Source: Caselaw Access Project
Author: {"author": "Chancellor Johnston", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Francis B. Fogg, and Mary, his Wife, v. John Izard Middleton and Henry Middleton.
    Defendant J. I. M., with a view to prevent family discord, and to relieve himself from the suspicion of having exercised undue influence over his mother, who had by deed and will given him the bulk of her estate, executed bonds in trust to his brother for the payment of certain sums for the benefit of the eldest daughter of each of Lis sisters ; left them with his brother, and having informed the parties interested of this proceeding, went to Europe where he still remains, leaving, however, a large estate here in the care of his brother; the bonds meanwhile remaining unpaid, and the trustee having taken no measures in relation to them; Held, that there was sufficient evidence of delivery ; that the bonds were irrevocable, and sustained by a sufficient consideration, and the trustee was decreed to account [*591]
    Heard at Charleston, April Term, 1835.
    Chancellor Dr Sausstfre, who presided, pronounced" the following decree, which contains a full statement of the case :
    It is proper to state the relative situation of the family, and the circumstances of the case, which may be summed up in a short compass. Mrs. Mary Middleton was the widow of Mr. Arthur Middleton, the illustrious signer of the Declaration of Independence, and its vindicator with his sword. He died intestate, after the termination of the revolutionary war, but prior to the statute of February 1191, abolishing the rights of primogeniture, and his real estate descended to his eldest son, xzqo-i Mr. Henry Middleton, one of *the defendants ; whilst his personal J estate was distributable by law, among his widow and children, consisting of his two sons, Mr. Henry Middleton, and ;¡Mr. J. I. Middleton, and his daughters, who respectively intermarried with Mr. Joseph. Manigault, Mr. Henry Izard, Mr. Henry M. Rutledge, Mr. Daniel E. Huger, and Mr. ■-Blake
    Mrs. Mary Middleton, in her lifetime, conveyed by deed to her second son, Mr. J. I. Middleton, her large real estate ; and by a will, purporting to be hey last will and testament, disposing of her personal estate, bequeathed the ’greater part thereof between her two sons, and gave considerable pecuniary legacies, (as is alleged, and which does not seem to be contradicted,) to each of her daughters (except Mrs. Manigault, who was dead), Afterwards, she executed another will, and died in 1814, leaving the same in full force, by which she disposed of the bulk of her personal estate to her two sons, subject to certain legacies, and particularly a legacy to each of her daughters, of £100 sterling, which was greatly below the legacies under the former will.
    The personal estate of Mrs. Middleton was appraised at upwards of seventy-one thousand dollars.
    Some discontents naturally arose in the minds of daughters so slightly provided by a wealthy parent, who bestowed so large a fortune on her sons for notwithstanding the legal right of the parent to dispose of her estate according to her judgment, her preference, or even her caprices, the moral sense of the community and the feelings of families, revolt at any very great disproportion made among children, where no misconduct exists, or is alleged to exist. ¡ These discontents reached the ears of Mr. J. I. Middleton, with the exaggerated report, that the use or the abuse of his personal influence over an aged mother, had produced the effect diminishing her bounty to her daughters, by her last will and testament, to his benefit.- His delicacy revolted at the supposed imputations, and he resolved to vindicate himself from them by voluntarily executing-bonds, to each of his sisters, to the amount they would have been entitled to under the former will of their mother ; and thus relieve his name and character from the suspicion of having exercised an undue influence over his mother, for his own benefit, and to the prejudice of his sisters. He accordingly executed bonds to them, or their husbands, for the sums to which they would have been entitled under the older will of their mother and transmitted them to their respective husbands. These, it seems, were ^returned by all of them, except Mr. Henry Izard, who, it r^-qq seems, consented to receive it, but in a modified form, as appears >- by the two letters of Mr. J. I. Middleton, of the 4th and lYth May, 1815, to Mr. Henry Izard, in which he speaks fully on this subject; and explains his views and intentions, his motive and his acts, in relation to all his sisters. Mr. J. I. Middleton, in pursuance of these intentions, executed bonds, in trust to his brother, Mr. Henry Middleton, with conditions for the payment of certain sums for the eldest daughter of each of his sisters, and placed them in the possession of his brother, Mr. Henry Middleton. He then went to Europe, about 181Y, and has remained there ever since, leaving his estate, including the personal estate, the slaves derived from his mother’s will, in the hands of his brother, Henry, as his attorney and agent: and to apply the income of the estate to the payment of the debts of her estate, and the legacies under her will. The debts have been paid, and, the bond to Mr. Izard’s family has been paid, but no payment has been made on the bond for Miss Mary Rutledge ' now the wife of Mr. Fogg, the plaintiff. After many years, applications were made, by letters, to Mr. Henry Middleton, as the agent and attorney of Mr. J. I. Middleton, for payment, which applications being unattended to, the bill was filed in this Court which makes this case.
    The defence set up against the claim is stated fully in the answers. In substance, it is, that the bond, though signed and sealed was not delivered, but kept some time by the obligor and then deposited for safe keeping with his own agent and attorney. That it was voluntary, and without consideration, and cannot be enforced in a Court of Equity. And that it was conditional, as to the time of payment, which was to be made after the debts and legacies were paid, without interest till a year after those payments.
    The first question, then, is, whether the bond in question, is obligatory on J. I. Middleton, so that the same can be enforced in this Court ?
    It is proven by Mr. Bee, to have been duly executed, and he was a subscribing witness. It was a voluntary bond, in the ordinary sense, as there was no pecuniary consideration. But it was given upon full deliberation, not lightly, and upon a consideration of the highest import to the feelings of the obligor. He saw, and he felt, that the extraordinary preference given to him by his mother, by the conveyance of a great real estate, and bequest of a large ^personal estate, to the disinherison of his sisters, highly estimable in themselves, and who had never *- given offence to their mother, (for that is not pretended,) had produced a painful effect on their minds. They were disappointed of reasonable expectations, and humiliated by parental neglect amounting to a marked preference of another child, and he felt that something was due to their wounded feelings ; and to quiet his own mind, and to secure himself from suspicions, if not imputations of an undue influence exercised over the mind of his aged mother, he, himself, therefore, proposes to give them bonds, equivalent to their expectation under a former will. He, himself, in his letter to Mr. Izard, puts it on that ground. He valued family concord, and propitiates it by doing voluntarily an act M'hich he felt to be a duty to himself, and did not consider it a bounty. He disclaims the idea, over and over again, that it is to be considered by his nieces, as conferring a pecuniary obligation on them. This, then, is a good consideration on M'hich the bond can be supported.
    It was, however, urged, that it was not delivered to Mr. Henry Middleton, as trustee for the persons intended to be benefited, but as his agent for safe keeping. And that Mr. Henry Middleton did not accept the trust; and, therefore, the act was not perfected. Mr. J. I. Middleton himself, under his own hand, states how he considered the transaction at the time, and how his brother considered it. He says, in his letter, “ In order to effect this purpose, my brother has consented to become a trustee, for bonds, to the amount of the supposed deficit M'hich I have drawn in favor of my eldest niece,” &e, " “I had it drawn in this manner, (stating the manner,) in order to avoid the possibility of its lapsing by any accident to Mary, for whom it is intended. Again, a circumstance stated, induces me to put them all on the same footing, and render the deed irremeable, (as my determination always has been,) through my brother.” In the letter of 11th May, 1815, he says, “A bond drawn in the manner you mention, shall be substituted for that now in theywssession of my brother.” Surely, these various expressions denote a finished act irrevocable; and that bis brother was the trustee, and had consented to act. Can it be permitted to the defendant, to weaken the force or change the character of this transaction, and these clear and positive declarations, by recollections at the end of tn'enty years, stated by the defendant himself M'ith proper caution, as uncertain? Assuredly not.
    The *Gourt must and will look to the acts and declarations of the oy -I party at the time of its origin, and not to faint and doubtful and ancient recollections and so with regard to Mr. Henry Middleton, the defendant. In his answer, after twenty years, and after being engaged in great public affairs abroad, which drew his attention from minor affairs at home, it is stated, so as to leave it doubtful or questionable, whether the bonds were placed in his hands as trustee or as agent of his brother, and whether he accepted the trust. His brother, Mr. J. I. Middleton, unqualifiedly says he had consented to serve as trustee. Could he be mistaken, when speaking at the very time of the transaction ? Or, is it not more likely, that a recollection, at such a distance of time, should be incorrect? The evidence, too, of Mrs. Kutledge, a lady of the most respectable character, drawn from her reluctantly and painfully, taken in connection with Mr. J. I. Middleton’s letter, is conclusive. She testifies, “that in the month of Oct. 1819, she passed a few days with her brother, Mr. Henry Middleton, at his residence near Washington. During her stay, and the morning preceding the day of her departure, he made her a communication respecting a bond executed by her brother, J. I. Middleton. He stated, that as-they, the witness and himself, might be separate many years, he requested her to recollect, that among other bonds left with him by his brother, J. I. Middleton, there was one executed to him by his said brother, for the benefit of her (witness’) daughter, Mary, now Mrs. Fogg, for one thousand pounds sterling, and that if any thing should happen, she must remember that his estate would be liable for it. She understood that he was perfectly acquainted with the nature of the bond, and regarded his communication as intended to inform her that he held the bond, in trust for her daughter, Mary, although she does not remember that the word trustee was used. The amount of the bond was mentioned, but she does not remember the date.
    The witness was under the impression that the other bonds alluded to, were of a similar nature to the one he, Mr. H. Middleton, desired her to bear in mind. She supposes this impression arose from her having heard that her brother, Mr. J. I. Middleton, had given bonds in favor of the children of her deceased sister, Mrs. Henry Izard. The counsel for the defendant supposes that Mrs. Rutledge must be mistaken in her evidence. But, surely more reliance is to be placed on the plain, and positive, and affirmative ^evidence of a witness, entitled to the highest credit, r^rq» who gives particulars of time and place, and the occasion of the commuication, on a subject to which her attention was particularly drawn, a few years after the execution of the bond, than on the negative recollections of a defendant, even of the same high character, after a lapse of twenty years.
    In my judgment, the bond was duly executed, was irrevocable, was placed in the hands of Mr. Henry Middleton, as trustee, and he was bound to take care of the interests of the cestui que use. This is the equity and justice of the case; and is, I think, amply supported by the authorities cited by the counsel in the argument.
    The only question which remains, is, when it shall begin to bear interest. The condition of the bond is, that the sum of one thousand pounds sterling should be paid in three equal annual instalments, to commence from the day when the debts and legacies charged on the estate of the late Mrs. Mary Middleton, mother of the said J. I. Middleton, shall have been paid and released, with annual interest on the said sum ; which interest shall commence from the end of one year, after payment of debts and legacies, as aforesaid. The plaintiffs allege, that the income of the estate was sufficient to have paid the debts and legacies, some time in the year 1820, and that the interest should commence one year after. The defendants insist, that the income of Mrs. Mary Middleton’s estate, broke in upon as it was, by a defaulting agent, was not sufficient to have paid the debts and legacies of her estate, before about the year 1830, or ’31 ; conseqently no interest is chargeable earlier. This is a point which can only be settled by an account which must be gone into, unless the parties shall agree and fix upon an intermediate time. It appears that the personal estate bequeathed by Mrs. Middleton to her son, Mr. J. I. Middleton, remains in the hands of Mr. Henry Middleton.
    It is therefore ordered and decreed, that the sum of one thousand pounds sterling, the condition of the bond in question, be paid out of the said estate, together with interest; and that it be referred to the Commissioner, to examine the accounts of the income of the said estate, from the year 1815, and to ascertain the debts and legacies due by the said estate; and to report when the income was sufficient to have paid the said debts and legacies; and to calculate interest on the said bond, from one year after the period *when said debts and legacies could have r^r been paid, which shall be paid out of the said estate. ^
    On further consideration of this case, it appears to me proper to add, that after the distinct and positive declaration, in writing, by J. I. Middleton, that his brother had consented to accept the trust in question, and after the avowal of the trust by Mr. Henry Middleton, testified by Mrs. S. S. Rutledge, it was not in ¡ais power to disclaim the trust. He had assumed the trust, and acted under it, by paying the money on one of the bonds to the family of Mr. Izard ; and that without any other instructions from Mr. J. I. Middleton, but on his general authority. Again, Mr. J. I. Middleton says, in his answer, that he did not advise his brother to take the ground of defence assumed in the answer, to wit: That the bond was voluntary and revocable, was never formally delivered, and that Mr. Henry Middleton never assumed the trust. This appears to me a plain disavowal of the defence ; notwithstanding the ultimate adhesion to the defence. I cannot, upon the fullest consideration, see any reason to doubt the equity and the legality of decreeing for the plaintiffs.
    Defendants appeal, and hope the decree may be reversed, for the following, among other reasons :—
    1. That plaintiffs seek payment of a voluntary bond, never delivered to them, but signed and sealed, and made payable to Henry Middleton, who refuses the trust; so that plaintiffs cannot sue at law. But if they cannot sue at law, they cannot be relieved in equity, for equity never interferes in favor of a volunteer.
    2. That the bond being voluntary, and the plaintiffs not parties to it, J. I. Middleton had a right, if he saw fit, to recall the money. That he has exercised this right, and Equity will not control the legal right of the obligor, or obligee, or give the plaintiffs a better security.
    3. That, in point of fact, there was no delivery of the bond: and no acceptance of the trust by the supposed trustee.
    4. That in favor of a volunteer, relief cannot be extended, in equity, beyond the letter of the deed. Whereas, the decree not only carries the relief beyond the letter of the deed, but, in opposition to equity, makes the defendant liable to the plaintiffs for the default of a third person, and decrees interest from the time when, the debts and legacies might have keen paid, if moneys lost ^without the wilful default of the defend-9 ants, liad been duly applied.-
    
      Petigru, for appellants.
    
      Grimlce, contra.
   Chancellor Johnston

delivered the opinion of the Court. "

Under the decided cases, the delivery of the bond would have been established upon even less evidence than was furnished on the trial. As it is, the proof fully sustains the Chancellor’s conclusion on the fact.

The law of the case seems to admit of little doubt.

Cases have been quoted to show that equity will not aid a mere volunteer, where no legal right has passed, or where the action of this Court is necessary to constitute the relation of trustee and cestui que trust.

But the delivery and acceptance of the bond, ipso facto, constituted Mr. Henry Middleton trustee. The bond contained his commission, and set forth his duties.

It also vested in him the debt of which it was the evidence; and if that debt should be detained, he had a legal remedy to recover it.

Wherever a trustee has accepted a trust, he is bound to a diligent discharge of his duties. If he holds choses in action, with a clear remedy on them, it is unfaithful in him not to endeavor to enforce them. If he holds a bond, .even although that bond is a free gift, he has no right to remit it.

It never was the law that a trustee was not as amenable to a volunteer cestui que trust, as to one who is not a volunteer. If that were the law, no executor would be accountable to collateral legatees.

So that without going further than Mr. H. Middleton, the plaintiffs have a right to come here to compel him to perform his trusts.

But if he is liable, it resnlts that he may be compelled, also, to surrender to his cestui que trusts all the legal remedies he possesses. And this puts the plaintiffs in possession of the bond, to all intents, as if it had been drawn to them as obligee, or assigned to them/

If it had been drawn to the plaintiffs by Mr. John Izard Middleton, or assigned to them by Mr. Henry Middleton, will it be pretended that the plaintiffs could not recover from the obligor, even if it was given on no consideration ? If it had been given on a consideration, which failed, that would be a good defence. But the original want of consideration would be none.

*But if a consideration were necessary to support the transac- r^rqq tion and enable the plaintiff to sue here, one existed in this case, L ' not valuable, indeed, but meritorious. The Chancellor has stated it truly and forcibly. ,.

The object was to heal family discord, by curing suspicions.

In Wiseman v. Roper, 1 Ch. Rep. 84, articles were enforced in favor of a nephew against an uncle, whose principal object in entering into them was to reconcile the nephew’s fathertp him.

In Stapilton v. Stapilton, 1 Atk. 1, Lord Hardwicke held a volunteer entitled to the execution of an agreement intended to establish the peace of a family.

If the Court, in this case, travels beyond the case of the trustee and cestui que trusts, and takes cognizance of the liabilities of the obligor, it is at the instance of the defendants, who insisted on his being made a party. Being here, at his own instance, the Court will, to' prevent circuity of action, decree against him what he would have been liable to pay the defaulting trustee, or what the plaintiffs could recover, if the bond had been assigned to them/

The payment of the bond-is, by its terms, made to depend upon the extinguishment of the debts and legacies charged on Mrs. Middleton’s estate. The instrument should receive a reasonable construction ; neither too strict nor too loose on either side. On the one hand, it could not be the intent of the obligor, when he gave the bond, to give an unavailable obligation, which this would be, if he might evade payment, by capriciously delaying to discharge the precedent obligations. On the other hand, he should not be bound to greater diligence, in paying the prior obligations, than would be exacted of one who had accepted a trust to pay them out of the assets of the estate; and if, by reasonable diligence, they could not be paid as early as the plaintiffs could have wished ; or if, without fault in Mr. Middleton, the assets were wasted by an agent (which would excuse a trustee), these circumstances should be taken into consideration in fixing the time when the debts and legacies should have been extinguished. Of course, these matters will be attended to in the reference which the Chancellor has ordered. ...

The motion is dismissed.

Chancellors Johnson and Harper concurred.

Chancellor De Saussurb absent, from indisposition.