Court Opinion

ID: 6638673
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:43:32.48483+00
Date Added: 2024-06-11T15:59:08.860293
License: Public Domain

ROBB, Associate Justice
(dissenting). This unfortunate proceeding involves two brothers, John B. and Winthrop Dahlgren. John, who died prior to the hearing below, was a member in good standing of the bar of this court and a man of integrity and character. Apparently he possessed the respect and confidence of all who knew him. Winthrop, on the other hand, as the majority opinion points out, was a’ spendthrift. More than that, he was a gambler and idler, lacking in moral sense, and oblivious to his family and other obligations. Within the space of a few years he had received and squandered more than $80,000, which had come to him through the death of a relative. At the time of the transaction giving rise to this suit, his wife had been compelled to divorce him, his children were destitute, he was in arrears of alimony, his-creditors were pressing him, and proceedings were under way which would have absorbed whatever equity he might have had in the New York and Washington properties.
John Dahlgren knew all this, and no one appreciated better than he the futility of making further advances to Winthrop. The liens and claims against the Washington property fully equaled or exceeded its then value. John foreclosed under Ms deeds of trust and obtained legal title to this propr erty. Owing to the war, he subsequently was able to sell it for considerably more than its value at the time of the foreclosure. After the foreclosure proceedings, John advanced money for the care and education of Winthrop’s children. However, without any effort having been ma.de to ascertain whether he claimed this property as Ms own, this bill was filed, charging him with fraud. In Ms answer ho set forth the facts, and averred that he held title to this property in trust for the children of his brother Winthrop.
At the trial, the charge of fraud was entirely abandoned; counsel for Winthrop stating: “We have not relied on fraud since we started. * * * When he [John] admitted the averments of the bill, and denied that he held this property for his own use and benefit, then there was no longer any issue respecting fraud.” Two *760disinterested witnesses testified as to statements made by Winthrop concerning the arrangement under which John was to take title to this property. One of them, Mr. Silverman, a lawyer who represented Mrs. Dahlgren in her divorce proceeding, testified that he discussed the question with Winthrop on several occasions; that in the winter of 1918, at the time the settlement of alimony with Mrs. Dahlgren was made, Winthrop. told him “that he had turned his property over to his brother, or his brother was to buy it in at some sale, I believe at a foreclosure sale, and he was to hold it, first, to'secure himself against this indebtedness, and, secondly, to hold the remainder for the benefit and in trust for the, children.”
The other witness, Mr. Ford, a real estate broker, testified as follows: “Q. Did he say anything as to whether or not he agreed with John that John should hold this property in trust for his, Winthrop’s, children? A. He [Winthrop] said John proposed it and he consented to it. Q. Why did he say he consented? A. To guard against any possible deficiency judgment that might be rendered against him in connection with the New York foreclosure. If there was a deficiency there, they would go for the Washington property, ' and John suggested that he hold it in trust and for the benefit of the children; and to prevent any deficiency judgment being placed against him in Washington, and also to secure the loan of $20,000. * * * ”
At the close of all the evidence, the court in its findings said: “I find that Winthrop did know about this thing [the foreclosure], and on the evidence in the ease I find, as a matter of fact, that he did intend that this property should be taken in trust for his children, and that would fit into the probabilities, moreover, much better than the other theory, because, why .should John Dahlgren have taken all the trouble that he took in this matter about this property, unless he did it to join in a scheme to defraud Winthrop Dahlgren’s creditors? Why should he do it for the benefit of Winthrop Dahlgren, only that the proceeds of the property, as said here, might be run through a rat hole, or it might be supposed he held some sieve without holes in it that could be filled up by it? * * * I am only concerned with the settlement that was made. All that you are saying now is a matter that might be argued between the lawyer for Winthrop Dahlgren and the lawyer for Mrs. Dahlgren. They could have made those claims then; but I find, as a matter of fact, that when they did make the settlement it was made on the basis that Winthrop Dahlgren’s children were taken care of in only one way, and that was by the obligation which John Dahlgren said he was under to them to take care of this property.”
In my view, the evidence overwhelmingly sustains the findings of the learned Chief Justice below, and, if those findings are accepted, the conclusions reached by him follow as of course. Winthrop Dahlgren was indebted to his brother John, and that indebtedness was secured by valid deeds of trust, which John had a legal right to foreclose. Having given Winthrop notice, as he undoubtedly did, of his intended action, Winthrop had no cause to complain because John, instead of insisting upon his legal rights, voluntarily charged himself wth anything he thereafter might make out of the property, for the benefit of his brother’s children. Knowing as he did that Winthrop would not take care of his own children, it was the natural and praiseworthy thing for John to do, as the court below finds; and yet John’s conduct now is characterized as fraudulent, and this fund which he tried to preserve for the benefit of these helpless children is to be turned over to their unworthy father.
There is another view that may be taken of this ease: If Winthrop Dahlgren’s present contention is correct, namely, if he had a secret understanding with John, whereby John, while taking the legal title to this property, was to hold it in trust for Winthrop, the arrangement clearly was made, on Winthrop’s part, at least, to hinder, delay, and defraud his creditors. It is submitted, therefore, that, accepting his own statements as true, the doors of a court of equity should be closed to Winthrop Dahlgren.
Believing, as I do, that the findings of fact of the trial court have not been given due weight, and that the principles of equity have been violated in the conclusion reached here, I respectfully dissent.