Court Opinion

ID: 6501922
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:14:42.817999+00
Date Added: 2024-06-11T15:54:38.167986
License: Public Domain

ORMOND, J.
This bill was filed by the plaintiff in error a-gainstthe defendantin error, who was the administrator of plaintiff's father’s estate for an account and settlement. The defence set up is, that after the complainant became of full age, in 1824, the defendant accounted with him and fully paid him all that was coming to him from his father’s estate; that two years afterwards, he confirmed the settlement so made, and acquiesced in it, until the filing of the bill in 1835, and the defendant relies upon the settlement so made upon the subsequent confirmation, and upon the lapse of time, as constituting a bar to the relief sought by the bill.
In considering the question of the fact merely of a settlement having been made between the parties, the relation which they bore to each other at the time, and that which had previously subsisted between them, will have an important bearing upon it. The defendant as administrator was a trustee for the plaintiff and not only so, but having married his mother, and reared him in his family, he was quasi guardian and stood towards him in loco parentis.
Contracts made by persons, between whom the relation of trus*95tee, and cestui que trust exists, are viewed with so much jealousy by courts of chancery, that they are voidable by the latter, if within a reasonable time, he seeks to set the contract aside, and can be supported only, when the trustee previous to the contract, has made such a lull disclosure of all the facts and circumstances which have come to his knowledge, as trustee to the cestui qua trust, as to enable the latter to deal with him on equal terms. Even then, in the opinion of Lord Eldon, in Coles v. Trecothick, [9 Vesey, 246,] if there be any inadequacy of price, the contract cannot be maintained; [Campbell v. Walker, 5 Vesey, 678; Saltmarsh v. Beene, 4 Porter, 293.]
The same rule upon analogous reasoning, applies to settlements made by guardians, or persons occupying that relation with their ward, shortly after their coming of age. The superior knowledge of the subject of the contract, and the control which one of the parties has always been accustomed to exercise over the other, prevents that contestation between the parties, which is the principal, if not the only security against unfair dealing. In such cases, the parties do not meet on equal terms, it is therefore almost, if not quite, a matter of course to open the account, or set aside the contract, if seasonably applied for, even when there has been no fraud, or circumvention, if a reasonable doubt exists of the justice of the account. [Hatch v. Hatch, 9 Vesey, 297; Revett v. Harvey, 1 Sim. & Stu. 502.]
The facts of this case are such as to leave but little if any doubt on our minds, that the sum received by the plaintiff, at the settlement made with the administrator, as his share of his father’s estate, was grossly inadequate. There is great difficulty in ascertaining the precise value of the estate in 1824, when the settlement was made. No inventory was filed, at least none is produced, or its absence accounted for, and none appears among the records of the Orphans’ Court. The answer of the defendant as to the value of the estate at that time, is iague and uncertain, and the estimate of the witnesses exceedingly variant. It is a very suspicious circumstance that no account in fact ever appears to have been stated, but the value of the interest of the plaintiff ascertained from conjecture, or taken at the estimate of the defendant. It is therefore highly probable that the sum received by the plaintiff, at the settlement, fell far short of that to which he would have been entitled upon a fair and just statement of the *96account; He has then, upon the principles previously stated, á right to Call on the defendant to re-state the account, if he has not, by his subsequent acts, and by his laches waived or lost it.
The confirmation set up by the defendant cannot avail him* A confii'mation to be operative as such, must be made with full knowledge of all the facts, the ignorance of which, rendered the previous contact invalid, and with the intent that such act should confirm the invalid Contract. [Chesterfield v. Janssen, 1 Atkins, 354; Cockerell v. Cholmely, 1 Russ. & M. 418; Butler v. Haskell, 4 Dess. 712.] The transaction relied on here as a confirmation, Wants every essential ingredient of sudh an act, and appears to have been intended for an entirely different purpose — its avowed object being merely to provide an indemnity for the defendant, if debts should subsequently come against the estate. If at the time it was contemplated by the defendant that this bond of indemnity should exert any influence upon the previous contract, such design should have been disclosed to the plaintiff, which does not appear to have been done.
The only question in the cause upon which a difference of opinion could arise, is, whether the laches of the plaintiff, in not seeking until after the lapse of eleven years, to disturb his settlement, made as is stated, both in the bill and answer, after he had attained to his majority, ought not according to the principles which govern courts of equity, prevent him from obtaining relief.
It is well settled at this day, that the bar of the statute of limitations is as available in chancery, as at law, in all cases where these courts have concurrent jurisdiction. [Kane v. Bloodgood, 7 Johns. C. 122; Maury’s adm’r v. Mason’s adm’r 8 Porter, 211; Wood v. Wood, 3 Ala. Rep. 756.] In the case last cited, the bill was filed by a residuary legatee against the executors for an account and settlement of the estate, and this court held, thataS by our statute, an action of account was given to a residuary legatee, against the executor, and as that action was barred by the statute of limitations, the bar was effectual to prevent a suit in chancery having the same object.
The bill in this case is filed by a distributee, who is not embraced by the1 terms of the statute just cited, although in reality, no conceivable difference exists between the two cases, except that one claims under a will, and the other by operation of law. As however, no action at law is given for the recovery of a distri*97butive share of an estate, there is no statute of limitations applicable to this case, unless the time within which an action could be instituted on the administration bond, should be held to apply a point not necessary to be determined in this case.
The doctrine that the staleness of a demand will prevent a court of equity from granting relief, where no statute of limitations directly governs the case, is peculiar to that court, and has been adopted by it, for the preservation of the peace of society. [2 Story’s Com. on Eq. 735.] This rule of equity is stated with great force and precision by Lord Camden, in Smith v. Clay, [reported in a note in 3 Brown’s C. 639.] “ A court of equity which is never active in relief against conscience or public convenience, has always refused its aid to stale demands, when the party has slept upon his rights, and acquiesced for a great length of time. Nothing can call forth this court into activity, but conscience, good-faith and reasonable diligence; where these are wanting, the court is passive and docs nothing.” [See also Hovenden v. Lord Annesley, 2 Sch. & Lcf. 634.]
It is quite obvious from the reason of the thing, that no precisel rule can be laid down in advance, applicable to this class of cases.* Each must, to some extent, depend on its own circumstances, andf will be controlled or modified by them, and by analogy to other known and settled rules of law. The subject in dispute will alsc materially affeGt the question, as by the statute law, a longer pe-l riod of time is allowed for bringing suits for the recovery of land] after the cause of action accrues, than for personal property. So! a court of chancery would grant a longer indulgence when the matter in dispute was land, than when it was personal property, i before it would consider it so antiquated as not to be entitled to/ the aid of the court. The principles applicable to such cases, ara admirably illustrated by the Master of the Rolls, in Chalmer vf Bradley, [1 Jac. & Walker, 51.]
It is certainly the general rule that the statute of limitations will not run against a subsisting and continuing trust, .but cases may exist, in winch, notwithstanding the trust has never been put an end to, it would after a great lapse of time, be the duty of a court of chancery, to refuse its aid, and presume from such unreasonable delay, either satisfaction or abandonment of the claim; and such, I understand to be the decision of the chancellor, in the case last cited.
*98These presumptions do not proceed from a belief by the court that the tilings presumed to be done, have actually taken place. [Eldridge v. Knott, Cowp. 214; Hillary v. Waller, 12 Vesey, 252; Gibson v. Barremore, 5 Johns. C. 550.] “ These presumptions (says Chancellor Kent,) to be drawn by courts in the case of stale demands, are founded in substantial justice and the clearest policy. If the party having knowledge of his rights, will sit still, and without asserting them, permit persons to act as if they did not exist, and to acquire interests and to consider themselves as owners of the property, there is no reason why the presumption should not bo raised.”
This, however, is not the case of a subsisting trust. By the sale and conveyance by the plaintiff, of his interest in his father’s estate to the defendant, an end was put to the trust which had previously subsisted. «In purchases by a trustee from his cestui que trust, an act is done which though open to enquiry, puts an end to the relation between them; if the purchase stands, he is no longer a trustee, the other party has been permitted to become fthe beneficial owner. He cannot however, by any act of his own, Rvithout communication with his cestui que trust, denude himself M the character of trustee, till he has performed the trust.” Chalmer v. Bradley, [1 Jacob & Walker, 51.] It has been shown ái a previous part of this opinion, that such a transaction is suspicious, and may generally bo set aside by the cestui que trust, if application for that purpose is made within a reasonable time— has that been done in this case?
We entertain no doubt.that the time which has been permitted to elapse in this case, eleven years, should prevent a court of 'chancery from entertaining the cause. From the time the contract was made, the defendant has held and claimed the slaves dnd other personal property thereby conveyed as his own, with the full knowledge of the plaintiff. The necessary tendency of this long delay must be to increase, greatly, the difficulty if not to render it impossible now to state the account correctly, which as commenced in 1816, would go back a period of twenty-seven years. The death of witnesses, the loss or destruction of vouchers and other memoranda of such ancient transactions, which must necessarily have taken place during that long space of time, renders it highly improbable, if not impossible, that the account *99should now be justly stated. Indeed the long silence of the plaintiff was well calculated to bury the whole matter in oblivion.
There is no hardship or injustice in requiring a party to assert his rights within a reasonable time after he becomes cognizant of them, and all legal impediments are removed: whilst on the other hand, the repose of society imperiously demands, that unreasonable delay in bringing suits, should not be tolerated. The conviction, that the best interests of the community are thereby promoted, has been constantly gaining strength. The legislature of this State, at its recent session, reduced the time within wlrich suits may be brought for the recovery of real property, from twenty to ten years; and it would be strange if a court of chancery would permit a suitor to create for himself a longer limitation, in a suit for personal property, than the law would allow, if the subject of the suit were land.
It must however, be admitted, that many of the older cases hold a language different from this, especially in cases’ infected with fraud. Thus, Lord Northington, in Alden v. Gregory, [2 Eden, 280,] is reported to have said, that “ no delay should purge a fraud,” and granted relief after a great lapse of time. So in Pickering v. Lord Stamford, [2 Vesey, 279,] Lord Alvanley with great reluctance, and apparently against his own convictions, decreed an account after the lapse of forty years, but that was the case of a continuing trust, and the party ignorant of his rights. These cases are not now considered law in England, as is shown by the opinion'of Lord Chancellor Hart, in, the very recent case of Byrne v. Frere, [2 Molloy, 157.] Having stated the law to be different from that advanced in Alden v. Gregory, he says: "This was held differently in Alden v. Gregory, [2 Eden, 280.] But that case is an exception, and it has hardly been followed since Lord Northington’s time. The passage there is very strong. He says, ‘will delay ever purge a fraud;’ and he answers, ‘never while I sit here:’ but that extreme doctrine, which indeed, his own case did not come up to, although we find it for some time kept alive in the dicta of judges, was not acted upon after Lord Northington ceased to sit.” tie proceeds to comment on succeeding decisions, and says that the decision made in Pickering v. Lord Stamford, would not be followed now, and that the decisions of Morse v. Royal, and Hillary v. Walker, reported in 12 Vesey, 239, 377, have been held since, to be of little authority.
*100It will be found on examination, that most, if not all the cases in which relief has been granted, after’a great lapse of time, were either cases of fraud or continuing trusts, in which the parties were ignorant of their rights, or the matter in controversy was land, in regard to which, by analogy to the statutes of limitation, a longer delay fyas always been tolerated by courts of equity, than when it was personal property. Thus the late case of Bennett v. Colley, [2M. & K. 225,] was the case of a trust, and the party was ignoran^ of his rights; but the main ground of the decision was, that he could not have filed his bill sooner than he did.
In Watson v. Toom, [5 Madd. 40,] and Purcell v. Macnamara, [14 Vesey, 91,] reliefwas given expressly on the ground of the ignorance of the parties of their rights.
Pickett v. Loggin, [14 Vesey, 215,] is a very peculiar case. The delay was twelve years, and the object of the suit was to set aside a conveyance of land obtained by undue influence operating on the abject poverty of the plaintiff, which was so great that a bill filed four years after the transaction was abandoned for want of means to carry it on.
In Murray v. Palmer, [2 Schoals & Lefroy, 474,] after the lapse of twelve years, a conveyance for land was set aside as having been fraudulently obtained. The chancellor admitting the difficulty from lapse of time, granted relief principally on account of the ignorance of her rights. In the subsequent case of Webb v. Korke, 672 of the same book, where the delay was about eleven years in an application to set aside a lease for 999 years, improperly obtained, tire chancellor admitted that the objection would be available if the lease had been acted on by the parties, which he showed was not the case.
In Bergen v. Bennett, [1 Caine’s Cas. 1,] the court refused to set aside a purchase by a trustee of mortgaged premises at his own sale, after the lapse of sixteen years. In Ray v. Bogart, [2 Johns. Cases, 436,] where eleven years had elapsed without a settlement of partnership accounts; the court refused to entertain a bill. In Raynor v. Pearsall, the court refused to compel the administrator of an executor to account after the lapse of twelve years; and in Bertine v. Varian, [1 Edwards, 347] refused to compel the guardian and administrator of a guardian to account after a delay of eleven years.
It would be a useless consumption of time, to attempt even a *101notice by name, of all the cases upon this question. It may, however, we think, be stated as the result of the modern authorities at least, that even where there is a subsisting trust, unless the party was ignorant of his rights, courts of equity will, after a great lapse of time, presume a satisfaction. That if the possession of the trustee becomes adverse to the cestui que trust, lapse of time from that period may constitute a bar in equity; and this is re-cognised as the present state of the law upon this subject, in Hatfield v. Montgomery, [2 Porter, 76.]
In this case, as already stated, the trust was destroyed by the contract between the parties. However suspicious that transaction may be, it must, until it is set aside, put an end to the relation which had previously subsisted between them.
But it is insisted thatthis contract wasitself fraudulent, andis therefore void. It by no means follows, that because the contract was fraudulent, that it is therefore a nullity; even a fraudulent contract may be ratified by express agreement, or by long and unreasonable acquiescence in the assertion of rights thcrejby acquired, with knowledge of the facts. And if during the whole or the principal part of the time which has been permitted to elapse in this /ase, the plaintiff was cognizant of his lights, and permitted the defendant to act and deal with the property conveyed as his own, he must in this court, be presumed to have abandoned them.
To come to a proper consideration of this part of the case, it is necessary to ascertain what is the case made by the bill. The bill charges that the plaintiff “ was not advised until long after the settlement was made between himself and said James ; that his claim to his share and part of Ms father’s personal estate and effects was greatly more valuable than the said James had represented the same to be, and that he had been grossly and fraudulently imposed on in said settlementby said James ; and your orator immediately after he was so advised, offered said James to come to a fair and just account, &c” If the design of this allegation was, by anticipation, to remove the objection arising from lapse of time, it must be unavailing. The allegation that he was not advised of the fraud until long after the settlement, is too vague and uncertain to be the basis of any action in a court of justice. One man might consider one year, or indeed a shorter period, a long space of lime, whilst another might not consider ten *102years as entitled to that appellation. In Bertine v. Varian, [1 Edwards, 343,] a similar allegation, in a bill to prevent the operation of the statute of limitations, was rejected for uncertainty.
When lapse of time is relied on by the defendant, if the complainant wishes to bring his case within any of the exceptions, he must amend Ms bill or file a special replication, putting such new matter in issue. [South Sea Comp. v. Wymondscll, 3 P. Wms, 145; Bertine v. Varian, 1 Edwards, 343; Maury’s adm’r v. Mason’s adm’r, 8th Porter, 211; Hatfield v. Montgomery, 2 Porter, 58.] And as this has not been done, evidence could not be received to repel the presumption arising from lapse of time.
We are however of opinion, that if the case made by the bill, admitted of proof of facts to excuse the delay in bringing the suit, that it does sufficiently appear that the plaintiff was apprised of the fraud, if not at the time the contract was made, at least soon afterwards.
y The law upon this subject is usually stated, that time does not commence running until after the discovery of the fraud. How-cver true this may bo, as it respects the plea of the statute of limitations, in a court of law, its correctness may well be doubted, when applied to a suit in chancery in a case where the court acts upon its own peculiar doctrine of discouraging stale demands. If a considerable period of time has elapsed before the discovery of a fraud, the efflux of time already past should quicken the diligence of one who desired to avoid a contract for that cause,/especially in a case, where by the exercise of any diligence, the true state of the case might have been known at an earlier period.
In the late case of Byrne v. Frere, [2 Molloy, 157] already referred to, the chancellor holds this language: “ Now, length of time, of more than twenty years, bars even in a case of fraud, if the party to be barred has become, within any reasonable period, cognizant of the facts. tEor if there is the full period of twenty years, it is immaterial that, during much of that time, he had no notice of the fraud. It is a common mistake to suppose that time only begins to run from notice of the fraud. If the full twenty years are run, and the party has during a reasonable period within that time been cognizant of the facts constituting the fraud, always supposing no disability proved, by which I mean legal disability, and not want of means or poverty, he is barred. This *103court will give him no aid. It will refuse to be active, even to^, the extent of compelling a discovery.”
In this case, it will be observed, that when the chancellor speaks' of twenty years being a bar, ho has reference to the statute of limitations barring an entry into lands after that period, and which, by analogy, applied to the case before him; but the case is a full^ authority to show that in equity, the computation of time is not( made from the discovery of the fraud, but that if one having know-f ledge of the fraud will still lie by and permit the full time to run,r within which, if no fraud existed, the court would not interfere,' the fact of fraud will not entitle him to relief, although during! much of the time, he had no notice of the fraud.
^ Here, the plaintiff, as appears by the proof, and the internal evidence afforded by the case itself, had such notice previous to the contract being made, as should have put Mm on enquiry, and subsequently, full and complete notice. '
The contract now sought to be set aside, appears not to have been hastily or unadvisedly made. The relations of the plaintiff were fully apprized of the value of the property which the defendant had in possession, as administrator, as is fully shown by their testimony. It also appears that they considered that the defendant had treated the plaintiff badly during his minority, and it would be a fair presumption that they advised him of his rights when he came to years of maturity: such appears from the testimony to have been the facts. The defendant in Ms answer, denying that the plaintiff was ignorant of Ms rights, says that the settlement was made after the plaintiff had taken the counsel and advice of his friends, and that he well understood what property belonged to his father’s estate, and had been often told of its value and amount. From the testimony of John D. Johnson, it appears that the plaintiff informed him that he had been advised by his relations, and persons of intelligence, not to settle with the defendant. Joseph Johnson, another-witness, deposes, that plaintiff told him previous to the settlement, that lie did not intend to settle with the defendant, unless ho settled fairly. After the settlement, he expressed Ms satisfaction with it, and has done so repeatedly since. In addition to this, it must bo added, that the plaintiff had been familiar, from his boyhood, with the property of his father’s estate, in the possession of the defendant, consisting as it did, almost entirely, of slaves.
*104Those facts would have opposed no obstacle to the rescisión of the contract, if a Seasonable application had been made for that purpose, but they are potent against the application after such long delay. As they show satisfactorily that the plaintiff was put on his guard — 'that he always had the means of ascertaining the facts — the same means indeed Were within his reach, and the same facts were within his knowledge, when the contract was made, or soon after, which existed at the time of the filing of the bill. In 1830 the defendant settled with the husbands of two of the plaintiff’s sisters, and paid them a sum as their share of their father’s estate, greatly in amount beyond what he had paid the plaintiff. If before, he only had doubts whether the settlement made with the defendant, was correct, here was a fact which should have opened his eyes to the truth. Yet he lies by five years longer, and finally, as appears from the testimony, yielded to the importunity of his friends, when the suit was instituted.
It is not credible that the plaintiff was ignorant of those facts which all the other members of his family were cognizant of, being, as it appears he was, in intercourse with them, and in fact, it appears that they advised him against the settlement, when made, and expressed dissatisfaction with it afterwards. The conclusion, therefore, is irresistable, that he was as well acquainted with the facts, upon which relief is now sought, when the contract was made, or soon afterwards, as he was when the bill was filed. — ■ Nor is-there any allegation in the bill entitled to notice, that such is not the fact. The delay which has taken place cannot be ascribed to the defendant, but is the voluntary act of the plaintiff. If the knowledge of the plaintiff of unfairness in "the settlement, previous to the settlement of the defendant with the sisters of the plaintiff could be considered as amounting to conjecture or suspicion only, certainly after that event he must have known the value of his interest, yet he lies by five years longer. According to the decision of Byrne v. Frere, (previously cited,) in computing the time, this must be added to the previous delay, even ifthat was the first distinct intimation of the fraud, which is hardly possible.
This may be, and probably is, a case in which injustice has been done to the plaintiff, but we feel ourselves constrained to hold, that his laches has been so great, as to require this Court not to set so pernicious a precedent, as would be established by granting the relief sought by the bill.
*105In the argument of the cause, some stress was laid upon the ignorance and supposed imbecility of mind of the plaintiff. There can be no doubt that when the contract was entered into, the plaintiff was an ignorant young man, with but little knowledge of the world; and although it does not appear, and indeed is not alledged in the bill, that his incapacity was so great as to authorize the rescission of the contract for that cause alone; it would certainly have been an important fact if a seasonable application had been made. It can exert no influence whatever now. This decision is not based on the ground that the contract is fair and equal between the parties. On the contrary, we do not doubt that a most unfair advantage was gained by the defendant, but it is founded on the acquiescence of the plaintiff, with knowledge of his rights in this imposition for such a length of time that to permit him now to unravel the transaction, would in effect be to permit him to commit a fraud on the defendant. As to his capacity, it appears that he is a man of ordinary intelligence, having, as appears from the testimony, been the owner of a store, and engaged in the business of merchandize.
The decree of the chancellor must be affirmed; but this is not considered a proper case for costs. Each party will pay his own costs in this court.