Source: https://supreme.justia.com/cases/federal/us/101/577/
Timestamp: 2019-04-23 04:25:10+00:00

Document:
1. Where, as in this case, the evidence exhibited in the record shows that the purchase of land was made upon certain trusts which, through mistake, the trustee failed to have properly declared in the deed, the cestui que trust is entitled to a decree directing the deed to be reformed.
2. The jurisdiction of the circuit court is not defeated by the fact that with the principal defendant are joined, as nominal parties, the executors of a deceased trustee, citizens of the same state as the complainant, to perform the ministerial act of conveying title in case the power to do so is vested in them by the laws of the state.
Trusts are either express or implied, the former being such as are raised or created by the act of the parties and the latter being such as are raised or created by presumption or construction of law. Cook v. Fountain, 3 Swanst. 585, 592.
Implied trusts may also be divided into two general classes: first, those that rest upon the presumed intention of the parties; secondly, those which are independent of any such express intentions and are forced upon the conscience of the party by operation of law. 2 Story, Eq.Jur., sec. 1195.
with Charles C. Walden, who, on the eighth day of December of the next year, departed this life testate, leaving no children by the complainant, and that he by his will bequeathed to her all the property and rights owned and possessed by her at the date of their marriage; and that the father of her first husband died intestate on the 30th of June, 1862, but that no administration was ever had upon his estate, and that his widow, the mother of her first husband, departed this life testate on the 11th of September eleven years later; that her first husband had two brothers at the date of her marriage, neither of whom ever married and both of whom died without children; that at the death of the elder of the two he had a life policy of insurance for $5,000, which his administrator collected and paid to his two living brothers.
"the proceeds to be reinvested upon the same uses and trusts as aforesaid, and if not sold, then the property, after the death of the mother, was to be distributed by said trustees to each of the said sons as shall survive and attain the age of twenty-one years."
as it should do. Wherefore she alleges that it should be reformed and be made to conform to the purposes of the trust as created and set forth in the original trust deed.
Persuasive and convincing reasons in support of that request are alleged which will hereafter be reproduced when the merits of the controversy are considered.
Relief specific and general is prayed, as is more fully set forth in the transcript. Process was served, and the respondents appeared, and after certain interlocutory proceedings filed separate answers.
All of the defenses to the merits are set up in the answer of the first named respondent, who admits all of the preliminary matters alleged in the bill of complaint. He also admits that there was in existence at the time of the first marriage of the complainant the trust estate held by the surviving trustee arising under the conveyance from Elias Fort to the said two trustees, which, as he alleges, was held for the sole and separate use of the mother during her life, and remainder at her death to her three sons as tenants in common.
Prior to that transaction, there is no controversy between the parties as to the facts, and he also admits that the authorities of the city conveyed the lot called Monterey Ward to the surviving trustee, but he alleges that by the terms of the conveyance, the legal title to the lot vested in the trustee in trust for the sole and separate use of the mother, the trust being executory only so long and for such time as the cestui que trust should remain a feme covert, and he denies that the conveyance is informal and incomplete in any particular, or that it was ever expected or intended by anyone that the trustee should sign the same, and he avers that it was accepted by the trustee for the purposes therein set forth.
Attempt is also made to enforce that view by a specific denial of most of the reasons assigned in the bill of complaint in support of the request that the conveyance to the trustee of the lot called Monterey Ward may be reformed so as to conform to the trusts created and expressed in the antecedent trust deed.
court had any jurisdiction to make or execute any order, judgment, or decree against them in the premises.
Proofs were taken, the parties heard, and the circuit court entered a decree in favor of the respondents dismissing the bill of complaint. Prompt appeal was taken by the complainant to this court, and since the appeal was brought up, she has filed the assignment of errors set forth in the brief of her counsel. They are ten in number, all of which will be sufficiently considered in the course of the opinion, without giving each a separate examination.
Before examining the questions presented in respect to the second deed, it becomes necessary to ascertain the true construction and meaning of the original trust deed so far as respects the second trust therein created and defined. Eight hundred dollars constituted the consideration of the conveyance, and it was made upon the trust that if, during the lifetime of the mother of the three sons, it should be deemed advisable by her to sell and convey the premises, then upon this further trust that the trustees as aforesaid, or the survivor of them, upon her application and with her consent, signified by her being a party to the conveyance, will sell and convey the lot and improvements, for the best price which can be obtained for the same, to any person or persons whatsoever, without applying to a court of law or equity for that purpose to authorize the same, and the proceeds thereof upon the same trusts as aforesaid to invest in such other property or manner as the mother of the sons shall direct and request for the same use, benefit, and behalf.
Explicit and unambiguous as that provision is, it requires no discussion to ascertain its meaning, nor is it necessary to enter into any examination of the third trust specified in the conveyance, as it is conceded that the trust property was sold by the surviving trustee for reinvestment during the lifetime of the mother at her request, she joining in the conveyance as required by the terms of the instrument creating the trust.
Twenty-four hundred dollars were received for the conveyance of the trust property, and all of that sum, except $600 turned over to the mother, was invested in buildings then being erected upon lot numbered five, called the Monterey Ward.
Purchase of that lot had previously been made by the surviving trustee named in the original trust deed, and it appears that the parties understood that it was to be upon the same uses and trusts as were contained in the trust deed by which the title to the lot sold was acquired.
Proof that the new lot numbered five, called Monterey Ward, was purchased by the father and the three sons during the lifetime of the father seems to be entirely satisfactory, and it is equally well established that each contributed one-fourth part of the sum of $240 paid for the purchase money of the lot. Satisfactory proof is also exhibited that Henry D. Tefft, one of the three brothers, died Aug. 13, 1849, unmarried and intestate, and that he had a valid subsisting insurance upon his life in the sum of $5,000, which his administrator collected and paid to his surviving brothers.
Eighteen hundred dollars of the proceeds arising from the sale of the property acquired by virtue of the first trust deed were appropriated towards erecting buildings on the new lot purchased by the father and the three sons while in full life, and when the one whose life was insured deceased, the two survivors appropriated each his proportion of the money received to the same purpose, with the understanding that the property was subject to the same uses and trusts as the property previously acquired and sold.
Competent proofs of a convincing character are also exhibited in the transcript that the first husband of the complainant contributed other sums towards completing the buildings, leaving no doubt that he paid his full proportion for the improvements as well as for the lot purchased of the city authorities.
the death of the senior Tefft until the decease of his widow, and that throughout that period, she paid one-half of all repairs, taxes, insurance, and other expenses of the property as if she were equally interested in the same with her mother-in-law and was liable to bear an equal proportion of all such expenses.
Opposed to that is the proof that the mother-in-law, one year before her death, when in a low and depressed frame of mind, bequeathed the whole of the lot in question to the first-named respondent, who is her nephew, and on the same day executed a deed to him of the entire property, to take effect in possession after her death. Sole title to the premises in fee simple is claimed by the respondent under those instruments, and he brought ejectment against the complainant to dispossess her of the premises, and it appears that she was at great disadvantage in attempting to defend the suit because the trustee had omitted to see that the title was conveyed in trust for the benefit of the cestuis que trust as in the prior trust deed, as he should have done, to carry into effect the understanding of all the parties to the sale of the prior trust premises and the purchase of the lot in question. What she alleges is that the purchase of the new lot was made for the same cestuis que trust as those described in the deed of the old lot, and that the understanding of all was that the deed of the new lot should contain and declare the same uses and trusts in favor of the same persons, and the proofs to that effect are full and entirely satisfactory.
Support to that view is also derived from the fact that the surviving trustee in the old deed is the grantee in the new deed, and that he is therein more than once described as trustee, and in the introductory part of the instrument is denominated trustee of Mrs. Penelope W. Tefft, wife of Israel K. Tefft, of the city and state previously mentioned in the same instrument.
that end that it may be made to include the same uses and trusts raised, created, and declared in the prior deed from Elias Fort, according to the understanding and agreement of all the parties.
Besides that, she also prays that her equities in and to the property, including the improvements, may be set forth, decreed, and allowed by the court, including such as are in her favor from the payment of taxes, insurance, and repairs upon the property during the lifetime and since the death of her mother-in-law, and that the first-named respondent may be enjoined from further proceeding in his ejectment suit to recover possession of the premises.
Courts of equity afford relief in case of mistake of facts, and allow parol evidence to vary and reform written contracts and instruments, when the defect or error arises from accident or misconception, as properly forming an exception to the general rule which excludes parol testimony offered to vary or contradict written instruments. Where the mistake is admitted by the other party, relief, as all agree, will be granted, and if it be fully proved by other evidence, Judge Story says, the reasons for granting relief seem to be equally satisfactory. 1 Story, Eq.Jur., sec. 156.
terms of it and the manifest intention of the parties. Hunt v. Rousmaniere's Adm'rs, 1 Pet. 1 Pet. 1, 26 U. S. 13; Same v. Same, 8 Wheat. 174, 21 U. S. 211.
Even a judgment when confessed, if the agreement was made under a clear mistake, will be set aside if application be made and the mistake shown while the judgment is within the power of the court. Such an agreement, even when made a rule of court, will not be enforced if made under a mistake if seasonable application be made to set it aside, and if the judgment be no longer in the power of the court, relief, says Mr. Chief Justice Marshall, may be obtained in a court of chancery. The Hiram, 1 Wheat. 440, 14 U. S. 444.
Equitable rules of the kind are applicable to sealed instruments, as well as to ordinary written agreements, the rule being that if by mistake a deed be drawn plainly different from the agreement of the parties, a court of equity will grant relief by considering the deed as if it had conformed to the antecedent agreement. So if a deed be ambiguously expressed in such a manner that it is difficult to give it a construction, the agreement may be referred to as an aid in expounding such an ambiguity; but if the deed is so expressed that a reasonable construction may be given to it, and when so given, it does not plainly appear to be at variance with the agreement, then the latter is not to be regarded in the construction of the former. Hogan v. Insurance Co., 1 Wash. 419, 422.
different by addition or subtraction from what they were intended and believed to be when the same was executed.
Evidence of fraud or mistake is seldom found in the instrument itself, from which it follows that unless parol evidence may be admitted for that purpose, the aggrieved party would have as little hope of redress in a court of equity as in a court of law. Even at law, all that pertains to the execution of a written instrument or to the proof that the instrument was adopted or ratified by the parties as their act or contract is necessarily left to extrinsic evidence, and witnesses may consequently be called for the purpose of impeaching the execution of a deed or other writing under seal, and showing that its sealing or delivery was procured by fraudulently substituting one instrument for another, or by any other species of fraud by which the complaining party was misled and induced to put his name to that which was substantially different from the actual agreement. Thoroughgood's Case, 4 Coke 4.
When the deed or other written instrument is duly executed and delivered, the courts of law hold that it contains the true agreement of the parties, and that the writing furnishes better evidence of the sense of the parties than any that can be supplied by parol; but courts of equity, says Chancellor Kent, have a broader jurisdiction, and will open the written contract to let in an equity arising from facts perfectly distinct from the sense and construction of the instrument itself. Pursuant to that rule, he held it to be established that relief can be had against any deed or contract in writing founded on mistake or fraud, and that mistake may be shown by parol proof and the relief granted to the injured party whether he sets up the mistake affirmatively by bill or as a defense. Gillespie v. Moon, 2 Johns. (N.Y.) Ch. 585, 596.
Parol proof, said the same learned magistrate, is admissible in equity to correct a mistake in a written contract in favor of the complainant seeking a specific performance, especially where the contract in the first instance is imperfect without referring to extrinsic facts. Keisselbrack v. Livingston, 4 id. 144; Cathcart v. Robinson, 5 Pet. 264.
1. Because by comparing the original trust deed with the deed of the lot in question, in view of the attendant circumstances, the inference is very cogent that the second was designed and intended as a complete substitute for the first.
2. Because the proof shows to a demonstration that the consideration for the purchase of the second lot was paid in equal proportions by the father and each of the three sons.
3. Because it appears that the expensive improvements made upon the lot in question were made from the moneys of each of the three sons, advanced at the request of the father.
4. Because it appears that the family and every member of it understood from the first and throughout that the trustee held the property in trust for the mother and the three sons.
5. Because the father, from the date of the deed to the time of his death, recognized the premises as acquired and held for the benefit of his wife and their three sons.
6. Because the mother of the three sons, after the decease of the first husband of complainant, recognized her as interested in the property, and continued to do so at all times throughout her life until about the time she conveyed the lot in question to the respondent.
Both the deed and her will bear date Sept. 28, 1872, and the proofs show that she was at the time in a low, depressed state of mind, and that she departed this life within one year subsequent to the execution of those instruments. Prior to that, and throughout the whole period subsequent to the death of her husband, the proofs show that she uniformly recognized the complainant as the owner of a moiety of the lot and the improvements, and always required her to pay one-half of all repairs, taxes, insurance, and other expenses of the property.
to the trustees, subject to the payment of taxes, assessments, and ground rent, to and for the sole and separate use, benefit, and behoof of the mother and her three sons during her lifetime, and after her death to the three sons as tenants in common in equal parts, with the provision that if the mother during her lifetime should deem it advisable she might sell and convey the premises, and that in that event the further trust was raised and created that the trustees or the survivor of them, upon her application and with her consent signified by becoming a party to the conveyance, might sell and convey the lot and improvements for the best price which could be obtained for the same, without any application to a court of law or equity for that purpose, and to invest the proceeds thereof upon the same trusts in such other property or manner as the mother should direct, and for the same use, benefit, and behalf.
Provision was also made that if no such sale and reinvestment was made during the lifetime of the mother, then the trustees were to sell the same for the sole use and benefit of the three sons or the survivor or survivors of them, share and share alike, until the youngest should arrive at the age of twenty-one years, when the trustees might sell and convey the same at the request of such survivor or survivors, and divide the proceeds to the survivor or survivors, share and share alike.
Taken as a whole, the proofs show to the entire satisfaction of the Court that the lot in question was purchased and conveyed to the surviving trustee upon the same trusts as those raised and created in the first deed, and that the trustee, through mistake, failed to have those trusts properly declared in the deed of trust to him as he should have done, and that the prayer of the bill of complainant that the deed of the lot and improvements in question ought to be reformed and the rights of the complainant be ascertained and adjudged as if the deed in question contained the same trusts as those raised and created in the original trust deed is reasonable and proper, and should be granted.
the remaining defense set up by the respondent must prevail. Cooper v. Phibbs, Law Rep. 2 Ch.App. 149, 186; Cochrane v. Willis, 34 Beav. 359, 366. Such a decree, of course, cannot now be made against the trustee, as he is not living, but the executors, as contended by the complainant, are competent to perform that duty, and she prays that the decree may be adapted to the present state of the parties.
Suppose all that is true, still it is contended by the principal respondent that the decree below is correct because the claim is barred. Much discussion of that defense will not be necessary beyond what is required to ascertain the facts.
When the father died, the complainant was living on the premises, and she continued to reside there most or all the time during the widowhood of the mother of her first husband, except while she lived with her second husband, and when he died, she returned to live with her mother-in-law. During all that time, the proofs show that she was constantly recognized as the lawful heir to the estate of her deceased husband until about a year before the decease of the mother, who also resided on the premises. Prior to that, the rights of the complainant were unmistakably recognized, and nothing of consequence had occurred to indicate any intent to call her just right in question. Soon after that, however, the respondent commenced an action of ejectment against her to recover possession of the entire lot and improvements, she still being in possession, and doubtless hoping and expecting that her rights would yet be acknowledged without the necessity of expensive litigation. Expectations of the kind not being realized, she filed the present bill of complaint. Laches are imputed to her, but the Court, in view of the circumstances and of the embarrassments growing out of the obvious defects in the conveyance intended to secure her rights, is of the opinion that the evidence of laches is not sufficient to bar her right to recover in the present suit. Without more, these remarks are sufficient to show that the defense cannot be sustained, and it is accordingly overruled.
and respondent is unquestionable, and if so, it is clear that the fact that the trustee if living was a citizen of the same state with the complainant would not defeat the jurisdiction in a case where he is a mere nominal party and is merely joined to perform the ministerial act of conveying the title if adjudged to the complainant. Where that is so, the executor, in case of the decease of the trustee, if authorized by the law of the state to execute such a conveyance, may also be joined in the suit under like circumstances merely to accomplish the like purpose. Where the real and only controversy is between citizens of different states or an alien and a citizen and the plaintiff is by some positive rule of law compelled to use the name of another to perform merely a ministerial act who has not nor ever had any interest in or control over it, the courts of the United States will not consider any others as parties to the suit than the persons between whom the litigation before then exists. McNutt v. Bland, 2 How. 9, 43 U. S. 15; Browne v. Strode, 5 Cranch 303; Coal Company v. Blatchford, 11 Wall. 172, 78 U. S. 177.
Cases arise in the federal courts in which nominal or even immaterial parties are joined, on the one side or the other, with those who have the requisite citizenship to give the court jurisdiction in the case, and where that is so, the rule is settled that the mere fact that one or more of such parties reside in the same state with one of the actual parties to the controversy will not defeat the jurisdiction of the court. Decisive authority for that proposition is found in a recent ruling of Mr. Justice Miller in which he states to the effect that mere formal parties do not oust the jurisdiction of the court, even if they are without the requisite citizenship, where it appears that the real controversy is between citizens of different states. Arapahoe County v. Kansas Pacific Railway Co., 4 Dill. 277, 283.
the Court, in view of all the circumstances, will not proceed to determine either the proportion of the trust property which belongs to the complainant or the amount she is entitled to recover of the said respondent. Instead of that, those matters are left to be ascertained and determined by the circuit court, with authority, if need be, to refer the cause to a master to report the facts, with his opinion thereon, subject to the confirmation of the circuit court.
Executors of the trustee, in such a case as the complainant alleges, are under the law of the state the successors of the deceased trustee, and that as such they may execute whatever remains executory in the trust at the time of his decease, from which it would follow, if that be so, that it will be the duty of the executors of the deceased trustee in this case, when the rights of the complainant are fully ascertained, to make the necessary conveyance to perfect her title to the same extent as the trustee might do if in full life. Express authority is reserved to the circuit court to ascertain the rights of the complainant as if the trust deed was reformed, and to make the necessary decree to perfect her title in such mode and form as the law of the state and the practice of the state courts authorize and provide. Crafton v. Beal, 1 Ga. 322; Brown v. Tucker, 47 id. 485.
Costs in this Court will be taxed to the principal respondent in favor of the complainant, but no costs will be allowed against the other two respondents.
Decree will be reversed and the cause remanded for further proceedings in conformity with the opinion of the court.

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