Court Opinion

ID: 6484135
Source: CourtListenerOpinion
Date Created: 2022-06-26 23:07:42.633537+00
Date Added: 2024-06-11T15:54:15.818589
License: Public Domain

DISSENTING OPINION OF
PERRY, J.
It may be assumed for the purposes of this case that a deed of trust irrevocable by the grantor alone may nevertheless be revoked by him if all of the beneficiaries consent and also that the evidence shows that the three Ellises, Maria S. Davis. W. Davis and the Bishop on hehalf of the Catholic Church and St. Louis College consented that this deed be revoked and the trust terminated. Still from such consent an effective revocation did not result for the Ellises, the Davises and the two institutions named were not the only possible beneficiaries under the deed. The provisions of the will made September 17, 1898, became, by the express terms of the deed, a part of the deed and this, too, whether the will was made before or after or concurrently with the execution of the deed. It is well settled that if a deed refers to a will for a statement of some of its provisions, the parts of the will so referred to thereby become a portion of the deed just as though they had been incorporated in the same instrument and thereupon take effect, not as a will, but as a part of the deed, that the Ellises, the Davisds and the Bishop are not the only possible beneficiaries under the terms of the trust as set forth in the will is made clear in the majority opinion; I concur in the views there expressed on that subject.
*100The only question remaining is whether or not the deed is revocable by Sumner alone. I say the only question, advisedly, for it seems to me that the question of whether or not the deed should be cancelled or set aside on the ground that it wa? the act of one incapable of contracting or was executed under mistake or obtained by undue influence or other species of fraud is not before the court for determination. The issue last mentioned is not presented by the pleadings, — on 'the contrary the parties in their pleadings all proceed on the theory that the deed was validly executed and that the trust thereby created continued until at least some time in the latter part of the year-1902, when, as is claimed in Sumner’s answer, a revocation was effected. No averment, either in express words or even by implication, is to be found in any of the pleadings to the effect that the deed was procured by fraud or as a result of misunderstanding or mistake, nor is there any prayer to have the deed, for any such reason, declared null and void and cancelled and set aside. The substance of the averments of Sumner’s answer is, admitting the truth of the petitioner’s allegation that a deed of trust was executed on September 1Y, 1898, that such deed •was revoked and the trust terminated by reason of certain acts done in or about the month of October, 1902. One averment is that the payments to the Ellises and to Maria S. Davis were made by him "in contemplation of the revocation of the said deed of trust and the termination of the right of the said petitioner in and to the said property”; another, that on October 21, 1902, the petitioner delivered over to him (Sumner) the will and certain property “for the purposes of further carrying out the intention of the respondent as aforesaid to terminate said trust”; and still another that such delivery and cancellation and certain other named acts of a similar nature were done “by petitioner and respondent” “with the full understanding of the said petitioner that the said trust existing under the said trust deed was to all intents and purposes then and there terminated and ended.” “Wherefore”, (that is, by reason of the averments contained in the answer) Sumner prays, not that the *101■deed be declared null and void and be set aside, but that the deed may be “cancelled and declared to be no longer in force and effect.” Not only do the pleadings show that the question is not allowed but at the argument each of the‘attorneys in the case said', in substance, in answer to a specific question by the court, that it was not claimed that the deed should be set aside on the ground that its execution had been obtained by fraud.
Assuming, however, that the question last discussed is presented by the pleadings, my conclusion is that the evidence utterly fails to show that the deed was obtained by any species of fraud whatever. In the first place, I take it to be clear that for the purposes of this case Sumner must be regarded as having been on September 17, 1898, and ever since and as being now mentally capable of contracting and of executing a deed or will. The decree of the Circuit Judge, made shortly prior to that date, declaring Sumner mentally incapable was, on appeal, vacated by the Supreme Court; and on October 13, 1903, a court of competent jurisdiction, in a direct proceeding, made a decree declaring him sane. None of the parties to this proceeding or their attorneys claim that he was at the time in question mentally incapable but, on the contrary, all of the attorneys claim in argument that he was mentally capable. In the second place, the general rule is that fraud is not to be presumed but must be proved by the party alleging it. There is, it is true, an exception, real or apparent, to this rule, in cases where a benefit has been obtained or an advantage gained by one who stands towards the giver or grantor in a relation of trust and confidence, as, for example, where the relation is that of sgent and principal, attorney and client, or guardian and ward. In such cases the law, recognizing the very great advantage possessed, by virtue of the relation and of the resulting confidence, by the agent over the principal, the attorney over the client, and the guardian over the ward, in dealings had between them, and in order the more readily to effect justice, does not permit the party having such advantage to retain the benefits unless the entire fairness of the transaction is proven by him. But the *102present case is not one falling witbin tbe exception. Maria S. Davis and ber son, — to say nothing of tbe fact that tbe possibility of benefit to either of them under the deed was extremely remote and improbable — did not stand towards Sumner in any relation of trust or confidence. Tbe evidence shorvs beyond doubt that for a considerable time next prior to September 17, 1898, they bad been engaged in litigation which, while intended for his benefit, was regarded by Sumner as antagonistic to him, such litigation culminating in the attempt to have him placed under guardianship. In September, 1898, Sumner, far from placing any trust or confidence in them, regarded them as hostile to him. There is no evidence whatever tending to show that Sumner reposed any confidence in the Ellises, his grandnephews and grandniece, to any greater extent than a man naturally would in those related to him in that distant degree. The Bishop, too, is not shown to have possessed Sumner’s confidence to any such degree as would bring him within the class under consideration, or even that he had prior to that time ever acted for Sumner as his agent or adviser or otherwise in any matter of business. None of the attorneys who acted obtained any benefit under the trust, except, possibly, in being paid their fees, but as to those no complaint has ever been made.
The rule, then, and not the exception, applies in this case. The burden imposed by that rule upon Sumner has not been sustained. None of those who were present and took part in the transaction leading up to the signing of the deed or will give any testimony as to what was said or done at that ¡ ¡me. The only attempt to introduce such testimony was made by the attorney for the Ellises, but the testimony was excluded, on Sumner s objection, on the ground that the witnesses were his, Sumner’s, attorneys at the time and that the communications then had between them were privileged. This privilege, if it existed at all, was, it must be remembered, Sumner’s and not his attorneys’, and it was entirely competent for him to have waived it if light was indeed desired on the transaction. Having shut out this testimony, the best evidence obtainable on the *103subject, Sumner cannot now be beard to complain that the-Ellises" did not prove in detail the circumstances attending the preparation and execution of the instruments and the entire-fairness of the transaction. The subject of mistake will be referred to with more particularity on another branch of the ease-
ls the deed revocable by Sumner alone? And hereunder,, first, is it testamentary in character ? In my opinion, it is not. “Whether an instrument is a deed or a will depends upon the-time when it is to take effect, rather than upon its form or manner of execution. A deed takes effect upon its delivery in the-grantor’s lifetime. A will takes effect from the death of the-testator.” — 2 Jones, Eeal Prop, and Conveyancing, 1230. This instrument was intended to take effect upon delivery and to" convey at once to the trustee the legal, title to the property subject to the trusts specified. The trustee was given-active duties to perform and it is necessary that he should have the title in-order to carry out the directions of the deed. If the language-of the deed means anything at all it means that the grantor placed it beyond his power to make after September 1Y, 1898, a will of the property covered by the deed. The use of the words “and in default of such appointment” is not an indication to-the contrary, for even in 1 he view that they show that the grantor reserved liberty to revoke thereafter the will of that date so-as to eliminate its provisions as provisions of the deed, the remainder of the context of the deed shows that the direction to-the trustee in the event of such revocation was to convey to-those who would be entitled by law in case of intestacy. But I think that the correct construction of the language used (“hat is, if the will was not made prior to or concurrently with the-deed) is that if the will should be actually made on September 1Y, 1898, its provisions should thereupon become incorporated by express reference as provisions of the deed and no attempted revocation of the will, subsequent to that date, could operate to eliminate those provisions from the deed although it might be operative as a cancellation so far as the disposition of property not covered by the deed is concerned. It is at least, *104equally clear that if tlie will was made before or concurrently witli tire deed, it could not be thereafter revoked so as to affect its provisions as a part of the deed. ' At whatever hour of the day the will was executed, the provision as to “default of such appointment” may well have been inserted to meet the possible contingency of the will being subsequently declared null and void and set aside by judicial order.
The contention that the nearest blood relatiyes mentioned in the will are only heirs of Sumner and that when a devise is made to heirs the latter take by descent and not by devise, and hence that this is merely a case of a reversion to Sumner, that the whole equitable title is in Sumner and that therefore he can revoke the deed without the consent of others, is sufficiently disposed of in the majority opinion. In that disposition I concur.
The deed on its face is irrevocable. Much stress is laid upon the fact that the deed recites that Sumner is a “resident of Tahiti, at present temporarily in Honolulu”, that “whereas the party of the first part desiring that his property and interests in the Hawaiian Islands shall be in charge of some competent and disinterested person * * * and in order to effectuate such desire and agreement” the grantor doth convey, etc., and that the trustee is authorized “in all respects to conduct and manage the said property and the matters hereinabove mentioned as fully and effectually to all intents and purposes as the party of the first part could do,” and it is argued that to a man like Sumner this language .would seem to indicate that the deed was revocable and that he would also suppose, naturally, the will to be revocable. So far as the probabilities go, the fact in all probability is that a formal instrument such as this, couched in legal language, would have conveyed to Suihiu.r’s mind, if left to him alone to read and study, very little, if any, light as to its meaning, and further that it was not left to him alone to read and study but that the substance and effect of the instrument was explained to him by others of greater intelligence and better versed in those matters. There is no reason *105to suppose on tlie evidence that he was incorrectly advised as to its legal effect. The instrument must be construed as a whole. Its essential, operative parts must be considered as well as the recitals and the general and practically immaterial clause above quoted. So considered the instrument on its face should, in my opinion, be construed and understood as an absolute and irrevocable conveyance.
It is contended, however, that in view of the peculiar and exceptional circumstances of this case, it must be held that at the time of the execution of the deed Sumner understood and intended it to be revocable, that he executed it in its present form by mistake, and that therefore the court must now by decree declare that he has successfully revoked it and that the trust has terminated. The fact that the clause of revocation was omitted is one of the circumstances thus relied upon. Formerly in England and in Pennsylvania and perhaps some c:her States it was held that the omission of a clause of revocation from a deed such as this was of itself prima facie evidence of mistake and of the understanding of the grantor that the deed was revocable and that it was sufficient to throw the burden on the party seeking to sustain the trust to prove that the omission was not by mistake, but this view no longer prevails and it is now generally held that such omission is a mere circumstance which, like any other relevant circumstance, is to be considered and given such weight, one way or the other, Vo it may be entitled to upon all the evidence. This would seem to be as favorable a rule as those attacking the trust may well expect. The very essence of the inquiry is whether the omission was by mistake or understandingly, and to say that because the clause was omitted that is any evidence tending to show that it was omitted by mistake seems to me to be at least a happy method of solving the difficulty. But let it be assumed that the modern rule is good and that the circumstance of the omission may be considéred. Still, “the question of the right to revoke a voluntary trust resolves itself into a question of intention, and the proper subject for inquiry in this, as in every *106case, is, did the settlor, when he executed the deed, deliberately intend that his settlement should be revocable, or not?” — Polter v. Trust Co., 199 Pa. St. 360, 362.
The deed on its face does not, as I think, contain sufficient evidence of an intention to make it revocable to throw the burden upon those seeking to sustain the trust to show by other evidence that such was not in fact the intention. The circumstances shown by the extrinsic evidence and the inferences derivable from the facts so proved lead me irresistibly to the conclusion that the deed was, at the time of its execution, actually intended to be irrevocable. The motive, too, for the grantor’s taking such a course appears. Sumner was an old man, weak-minded and easily influenced. Within at least the four or five years next preceding September, 1898, he had made a number of foolish and improvident business transactions and had been taken advantage of by unscrupulous and designing persons who had secured and for the time being possessed his confidence. ITad those transactions been permitted to stand, his property would have been in large part consumed thereby and the rest would soon have followed in a similar way. By various judicial proceedings instituted by her for the purpose, his sitter, Maria S. Davis, caused the most important of those transactions to be set aside and the property to be restored to its owner and put an end to the influence of those with whom he had been dealing. While he was capable of being easily influenced to his detriment he was also capable of being persuaded, though at times with much difficulty, of the mistakes he had been led to commit and of the real character of his supposed friends. Finally, in 1898, came the guardianship proceedings and the decree of the Circuit Judge placing him under guardianship. That decree was rendered on June lY, 1898, and Maria S. Davis’ consent to its reversal and her discontinuance were given in writing on September 19, 189S, two days after the execution of the deed. From these facts the most natural and the strong inference is that he was advised and influenced, not unduly, but properly and legitimately to make such a deed for *107protection from his own weakness and to put an end to the possibility of having his property taken from him by unscrupulous persons. Such advice would have been wise. The execution of the deed was certainly the wisest business transaction the plaintiff ever performed, that is, after he became mentally weak. He was advised in the matter by Messrs. W. E. Castle and P. L. Weaver of the bar, Messrs. W. A. Kinney and S. M. Ballou advised Mrs. Davis and Mr. Alfred S. Hartwell also acted for some one interested, whose name, however, was not disclosed by the testimony, in consequence of an objection by Sumner. Hpon the evidence there is not room for even the slightest suspicion that any of these men acted towards Sumner otherwise than with the greatest fairness not only in advising him what to do but in making him fully acquainted with the terms and legal effect of the deed. Sumner was capable of' being influenced for good as well as to his detriment and, while it is true that he seemed to abhor above all things being placed under guardianship or being judicially declared mentally incompetent to care for his property, he still was, at times at least, capable of recognizing his own weakness. A sufficient motive for the deed, protection from himself, existed. That he was not a drunkard or a spendthrift does not alter the case. Deeds of trust made by drunkards are sustained by courts, so far as the question of motive is concerned, not because the grantors are habitually intemperate, but because by reason of such habitual intemperance they, like those who are spendhtrifts, waste their property and need protection from their own weakness ’in that respect. Equity should, and I believe does, lend her aid to sustain voluntary conveyances made to protect the grantor from weakness of the nature of that under which Sumner labored as readily as it does in cases of conveyances made as a protection from weakness of other classes. “Where the intent to make an irrevocable gift is perfectly apparent, or where, even in the absence of such a clear intent, a sufficient motive (such as protection against the grantor’s own extrava*108gance, or the Wee) for making such a gift exists, the settlement cannot be disturbed.” — Bispham, Equity, pp. 106, 107.
Again, is it natural to suppose that his sister, who had spent the better part of three years in litigation of an extremely disagreeable nature, in the endeavor to save and protect his property and who had obtained the decree (although appealable) of a court of competent jurisdiction placing his property under the control of a guardian, would have yielded all of the advantage so gained by acquiescing in the execution of a deed which Sumner would have the power to revoke at any time, within three months as effectually as after five years? On the contrary, it seems to me that the very strong inference is that she would not have done so and that she gave up the benefit of the judicial proceedings only because by another method equally effective although milder in form the property had been placed beyond the power of Sumner to lose. _ If it be said that she knew that she could bring new guardianship proceedings at any time if he should revoke the trust, the obvious answer is that that is unreasonable. One who, especially a woman, had just gone through the details of such a contest in court, is not at all likely to abandon results actually obtained for any .arrangement of wholly uncertain duration or to consent to renew the contest when that course can be avoided. It is suggested in this connection that the inference is that Maria S. Davis desired and understood the trust to be revocable because it was to her interest that it should be, there being practically no provision in the will for her benefit. But it does not appear that she knew at the time what the contents of the will were and the evidence does show that Sumner was averse, even during the negotiations of 1902, to making known those contents. (Incidentally, this explains why not all the terms of the trust were inserted in the deed itself.) Moreover, I am satisfied from the evidence that, whatever were her motives in the litigation of 1902, Maria S. Davis was, in the proceedings of 1895 to 1898 and in her conduct towards her brother at that time, *109not actuated by any selfish motives, but acted solely for what she believed to be his best interests.
The point is made that the Davises, the Ellises, the Eishop and the attorneys, as well as Simmer, all showed by their conduct in the events of 1902 and more particularly by the acceptance of portions of the trust fund, that they understood that the trust was revocable. Assuming that the Ellises so understood the matter in 1902, that throws no light on the question of what Sumner understood in 189S, for they are not shown to have taken any part in the transaction leading up to the execution of the deed and their understanding in 1902 must have been based upon hearsay or upon their own construction of the instrument or that of their attorneys if they consulted any. Similarly of the attorneys. They were not present, in 1898. Their opinions have value as those of men learned in the law, but not as evidence of the actual occurrences of 1898 or of the belief produced by those occurrences in Sumner’s mind. The Bishop, too, is not shown to have been present in J898. Eor aught that appears to the contrary, he was merely offered the trust and accepted reluctantly as an accommodation to the old man. Moreover, the evidence shows, as it seems to me, that he concurred in the payments made out of the trust fund because, as he thought, all the beneficiaries were consenting, and delivered the remainder of the trust property to Sumner because of a mistake on his part as to the legal effect of the Circuit Judge’s order (in October, 1902,) dismissing the petition for the appointment of a guardian and declaring Sumner sane. When shown by Sumner a newspaper article to the effect that the $50,000 had been left in trust for the Ellis heirs, the Bishop said: “That is not true, because, you know, Mr. Sumner, you have been discharged by the court and now you are a free man- and you can do what you like.” As to Sumner himself I doubt very much whether in 1902 the thought ever occurred to him that he could revoke the deed without the consent of the beneficiaries until it was suggested to him at the trial by one of his attorneys. The Davises had brought pro*110•ceedings (in 1902) to prevent the execution of the deed demanded by the Oahu Eailway & Land Company and the Ellises or some of them had threatened similar proceedings. The Oahu Eailway & Land Company wanted the deed signed by all of these parties to secure a title perfect beyond dispute. In order to place himself in a position to execute the conveyance and to secure its' execution by the others and also to obtain from them a release of all of their claims under the trust deed or otherwise, and having no thought that there were any other possible beneficiaries, he made the payments out of the proceeds of the sale. Even if, however, Sumner in 1902 did thinlc that the deed was revocable by himself, that fact would be ■ entitled to very little, if any, weight in ascertaining what he thought in 1898 because of his weakness of mind and memory.
The averment in the answer of the Ellises that Sumner, “being greatly harrassed, annoyed and distressed by the several suits and proceedings hereinbefore referred to and being advanced in years and greatly broken by bodily infirmities and desiring to end his remaining years in peace and without strife and friction with those who were bound to him by ties of blood and to avoid the humiliation, mortification and anguish of having the said order declaring him to be an insane person affirmed by said Supreme Court in which an appeal from said order was then pending” executed the deed, is not, as seems to be contended, the equivalent of an admission that he was forced -or “blackmailed” into executing the deed for the purpose of tying up his property for his relatives, and is not inconsistent with the claim that the deed was executed freely and under.standingly.
As to improvidence. The deed made practically no provision for any future wife or child of the grantor after the latter’s death. Ample provision is made for such wife or issue during Sumner’s lifetime in that all of the income is reserved to him for that period. Sumner’s wife, Ninito, had died only a few months prior to the execution of the deed. While there was still a possibility of his re-marrying and having issue, there *111was very little probability, at Ms age and under all the circumstances, of either. Such a possibility would very naturally escape the attention of Sumner, of those advising him and of all others concerned. Moreover Sumner had some property in Tahiti which would not be affected by the deed, — in his answer he says that he has “large property interests there located.” If the execution of the deed was free from imposition, undue influence and every other species of fraud, mere improvidence would not be a sufficient ground for setting it aside or terminating the trust, — at least not until the contingency, with reference to which alone the conveyance could possibly be deemed improvident, should happen — and would at most be relevant only in so far as it might together with other circumstances tend to throw light on the question of the fairness of the transaction at its inception and of the intention and understanding of the grantor at that time.
The fact that a large portion, more than one-half, of the trust fund has passed out of the control of the trustee at the request or with the consent of Sumner, appeals to me, not as a reason for passing the remainder into Sumner’s control, but as strong evidence of the continued existence of the necessity for protection from himself which, as I believe, prompted the creation of the trust in the first instance.
Further discussion of the conduct and motives of the Ellises, the Davises and the attorneys in the transactions of October, 1902, and comments thereon are here omitted because, except as above pointed out, those matters seem to me to be immaterial and irrelevant in a consideration of the issues involved in this case. If the recent payments or any of them were made under mistake or obtained by undue influence or fraud of any other kind, that might be good ground for setting aside those payments but does not tend to show that in September, 1898, there was airy mistake, misrepresentation, undue influence or other species of fraud; and if the court finds that the deed has not been successfully revoked and is of the opinion that the trust should not be terminated, it should not order the money paid *112over to Sumner in disregard of the terms of the trust even though the conduct of the Ellises has been such as to estop them from claiming that the trust is irrevocable.
As to the authorities, in none of the more recent cases,, as I understand them, whether in England or in Pennsylvania or in any other State, is it held that upon facts such as I have found in this case equity will either enforce a revocation by the grantor or itself terminate the trust. If any of them do so hold, I decline, with respect, to follow them. Rich’s Appeal and Fredericks Appeal and other similar decisions have been distinguished and limited in later Pennsylvania cases to such an extent that there is very little, if anything, left of the extreme doctrines there laid down. “Generally the cases in which voluntary settlements have been set aside have been where there have been fraud or imposition in their procurement; where the design had been to give the settlor full enjoyment of his property for life, with power of testamentary disposition, and at the same time to protect it from his creditors; where the instrument was in itself or in connection with other instruments testamentary in character; -where the intention to make the instrument revocable clearly appeared; where the purpose of the settlement had failed; or where the trust created was merely a naked one. The rule is that a voluntary settlement will be sustained and enforced in favor of the' beneficiaries, unless it is shown that it was procured by fraud or imposition, or executed under misapprehension of the facts or of the law.” — Potter v. Fidelity Ins. Trust & Safe Deposit Co., 199 Pa. St. 360, 365 (1901), approved in Kraft v. Neuffer, 202 Pa. St. 558, 565 (1902). “Settlements like that before us, reserving a present interest in the creator of them, and carrying a future benefit or bounty to other designated parties, are very usual. If fairly made and carried into effect, uninfluenced by fraud or circumvention, they cannot be subsequently impeached, as is shown, among other determinations, by our own case of Ruth v. Reese, 13 Ser. & R. 434.” — Greenfield’s Estate, 14 Pa. St. 489, 501. See, generally, Wilson v. Anderson, 186 Pa. St. 531; Merriman *113v. Numson, 134 Pa. St. 114; Reese v. Ruth, 13 S. & R. 434; Toker v. Toker, 3 De Gex, J. & S. 486; Hall v. Hall, L. R. 8 Ch. App. Cases 437; Reidy v. Small, 154 Pa. St. 505; Rynd v. Baker, 193 Pa. St. 486; Taylor v. Buttrick, 165 Mass. 547.
The point is' made, but- evidently not much relied oar, that the proceeds of the land sold to the Oahu Railway & Land- Company of which the fund in court is a part, is payable to Sumner under the provision of the deed that the trustee is to “collect all moneys now or hereafter due, payable and coming to-the party of the first part within the Hawaiian Islands and to-apply the same as above directed in respect of the income of said property.” Construing the instrument as a whole, I am of the opinion that that clause was not intended to apply to a transaction such as that in question. The purpose of the deed' and the motive for its execution strengthen this view.
In my opinion the deed cannot be revoked by Sumner alone- and the court should not now terminate the trust. No sufficient reason is shown why it should be terminated and there is a strong reason why it should be continued. Its purpose has not failed. The weakness against which it was intended to afford protection is certainly not less now than it was at the inception of the trust and is perhaps greater. The prayer of the bill for the appointment of a new trustee should be granted and the-fund in court should be paid over to such trustee.