Court Opinion

ID: 7129650
Source: CourtListenerOpinion
Date Created: 2022-07-24 15:17:24.059474+00
Date Added: 2024-06-11T16:14:19.478671
License: Public Domain

Judge Stipes
delivered the opinion of the court.
This was a petition in equity brought by appellants as the personal representatives and heirs at law of Henrietta Richardson, deceased, against the appellees, to compel a sale and division of certain slaves alledged to be in the possession of the latter as trustees of said Henrietta Richardson, and for a settlement of their accounts for hire of the slaves whilst in their possession.
The relief was resisted upon two grounds set forth in the answer:
1st. That appellees were the rightful owners of the slaves by purchase from their cestui que trust in her lifetime, and held them, not as trustees, but in their own right; and
2d. That appellants were not entitled to them as the heirs and representative of their intestate, and could not maintain the action.
The circuit court dismissed the petition upon final hearing, and appellants have brought the case up.
It seems that John Estes died in 1833, leaving a widow, Henrietta Estes, but no children, and at his death was the owner of a number of slaves, including those in controversy tor their mother, which he attempted to devise to his wife by a nuncupative will. The widow, claiming title under the will, took and retained possession of the slaves until her marriage with Joseph Richardson, which occurred in a few years after the death of her first husband. Prior *461to this last marriage, she and Richardson made a parol agreement, by which it was understood that each party was to have, control and use their separate property owned before marriage, as though no marriage existed. And in 1841, some years after the marriage, deeds were interchanged between them, carrying into effect, as they supposed and intended, their ante-nuptial contract.
Richardson conveyed his wife’s property, including the slaves, to W. A. Marshall, and Samuel A. Spencer, the appellees, in trust for the separate “use and benefit of the said Henrietta and her heirs forever,” stipulating in the deed, that, in the event of a suit or controversy about the slaves, he was to be free from all liability for costs, &c.; and the trustees were to defend such suit in his wife’s name without the use of his. The deed recited moreover, that the slaves so conveyed, were then on hire until the 25th December next ensuing, at the expiration of which term the trustees were to receive them for the purposes of the trust. The deed was executed on the 15th October, 1841, and, on the same day, the trustees, in writing, formally accepted the trust, and undertook its execution.
On the 26th October, 1841, Henrietta Richardson, the cestui que trust, in the presence of her husband, conveyed the slaves to her trustees, in consideration of five dollars, and that they had, on the same day bound themselves to account to her after the 25th December ensuing for one-third of the slaves or their hire during her life. The obligation referred, to in this bill of sale or conveyance of the slaves, was, in substance, that they, the trustees, would, after Christmas next ensuing, furnish her a suitable maintenance, when she required it, to the amount of one-third of the hire of the slaves conveyed, to be paid her from time to time and in-such things as she should require, &c. The slaves were taken into, possession, by the trustees at the expiration of the year 1841.,
*462Meanwhile, and before these several transactions, the heirs at law of Estes, the first husband, or their vendee, Buckner, asserted claim to the slaves upon the' ground that Mrs. Richardson acquired no title by the nuncupative will, and that whatever interest she had was as widow, and for life only. And, about the same time, proceedings were begun to enforce their claim, and for a division of the slaves, and hire, &c.
This suit was compromised in February, 1842, by a division' of the slaves between the trustees, and Buckner the vendee of Estes’ heirs, and the payment of six hundred dollars by Joseph Richardson the husband in discharge of any liability against him; and,'under this compromise, Buckner transferred and assigned to' Marshall and Spencer, and Richardson his several bills of sale from Estes’ heirs, and executed to Richardson a release from all claim for hire, &c.
The slaves that were allotted to Spencer and Marshall in the division continued in their possession, and were listed for taxation as'trust property, during the life of Mrs. Richardson.
Upon her death, her husband having refused to qualify as administrator, letters of administration were'granted upon her estate tó Beverly Marshall one of the appellants; and^ the trustees having refused to deliver the slaves or .account for hire, this suit was brought by the administrator in conjunction with a portion of the distributees for a sale and' division of the slaves, and for hire, &c.
Joseph Richardson, the surviving husband, was made a defendant, and answered, disclaiming all interest in the subject matter of controversy, arid conceded the right of the plaintiffs to the slaves and hire.
1. The first inquiry is, whether this suit is maintainable in the names of the appellants.
It is contended by appellees, that as, by the terms of .the deed of trust, Mrs. Richardson was invested *463with a separate beneficial estate in fee in the slaves therein mentioned, that such estate upon her death vested in the surviving husband; and, as no sale of the slaves was made by the husband to appellants prior to the commencement of the suit, or could have been made whilst appellees were in adverse possession so as to vest any rights in appellants, that the mere disclaimer of the husband during the pendency of the suit, did not operate as an investiture of title in appellants, or confer any right upon them to maintain the suit. And in support of this position we are referred to Cox. vs. Coleman. 13 Ben. Mon. 452, and other cases therein cited.
1. A husband who has conveyed a separate estate in slaves to trustees for the benefit of his wife is not, upon the death of his wife, entitled to the slaves as survivor of his wife; but as administrator of his wife he had a right to the slaves against all the world, except creditors of the wife. (1 Roper, 203; 11 B. Monroe, 139; Bright on Husband and Wije, 1 vol. 41.)
The interest of the wife in the slaves, at the time of her marriage, under the laws then in force, vested absolutely in the husband when they came to his possession, and constituted a part of his estate. He divested himself of that interest by the deed to the trustees, and conferred upon them the legal title and upon his wife a separate trust estate in fee. In this separate estate he had no interest during her life and could have exercised no control over it, nor in anywise disturbed her or her trustees in its possession. In such cases the right by survivorship does not exist. He had the right to administer on his wife’s estate, and as administrator, would have been entitled, except as to creditors, to retain the assets without distribution. (1 Roper. 203; 11 Ben. Monroe, 139.)
The case of Cox vs. Coleman is not at variance with the opinion here expressed.
The question there was whether the personal representative of the heir at law of a deceased wife could recover from the trustees of the wife slaves held by him for the separate use of the wife and her issue, she having died without issue, but her husband surviving. It was decided that the recovery could not be had, because the surviving husband was entitled either as survivor, distributee, or administrator.. But it was not decided, nor was it then necessary to *464decide, in which capacity he took. It was sufficient to say that in one or the other his right was paramount to that of the plaintiff.
' 2. When an administ r a t o r properly sues in equity to recover assets, the joining a distributee with him in the suit will not prejudice his right to a recovery.
That the court did not intend to say that he took as survivor, is obvious from the reference then made to Payne vs. Payne, (11 B. Monroe, supra,) without questioning the principle, there laid down, that, in cases similar to that of Cox vs. Coleman and the present, the husband is entitled as administrator and not as survivor, and which is in unison with other adjudications of this court, and the courts of England. (Brighton Husband and Wife, 1 vol. 41; 1 Roper 204; and the authorities therein cited.)
Here the husband though entitled to letters of administration, waived his right in favor of Beverly Marshall, one of the appellants, and whatever his rights as distributee may be (a question not necessary to decide) the husband had no right to the possession of the assets of the wife. The administrator under these circumstances could alone sue for their recovery. If any doubt existed as to this right, in opposition to the supposed right of the husband, such doubt could not, in view of the disclaimer of the husband, operate to the prejudice of the administrator.
We are of opinion therefore that the action is maintainable in the name of the administrator, and the fact that some of the distributees united wdth him as plaintiffs does not prejudice his right.
The question next to be considered is, to whom do the slaves in controversy belong.
It is contended by appellants that appellees as trustees of Mrs. Richardson had no right to make profit for themselves out of the trust property; that any advantage resulting to them from the arrangement with the cestui que trust, and the subsequent compromise with Buckner, inured to the benefit of the cestui que trust; and, that they should not, to the prejudice of her estate, be permitted to avail themselves of the pretended title acquired from her, whilst *465they were acting as trustees. And further, that the facts show that they always recognized her right to the slaves and held them as her property up to her death, and not adversely.
3. Courts of equity scrutinize with great jealousy all contracts between parties occupying a fiducial relation to each other—such as guardian and ward, attorney and client, trustee and cestui que trust—and the onus probandi of proving the utmost fairness in the trans action devolves on the fiduciary. (Story’s Equity, 360, 61.)
On the side of appellees, it is insisted that, the interest of the cestui que trust in the slaves mentioned in the trust deed, was, by the terms of the deed, made her seperate property, subject to her control and disposal, and that she had the right to convey it at her discretion. And also, that, although they were her trustees, the property was not then in their possession, and inasmuch as her husband was present, and assented to the sale of her interest, and the consideration was adequate, and there was neither fraud nor imposition on their part, that the sale was valid and should be upheld.
Courts of equity view with jealousy and watchfulness all contracts made between parties occupying fiducial relations, such, as guardian and ward, attorney and client, and trustee and cestui que trust. And so great is the apprehension that some undue advantage may have been taken by am attorney, trustee or guardian, in contracts with client, cestui que trust, or ward, and resulting beneficially to the former, that the onus prolancli rests upon them to show the utmost fairness on their part. Or in other words, the good faith and honesty of purpose which the law presumes in ordinary contracts between strangers, must be made to appear in transactions between persons holding the relations mentioned. No presumptions are indulged in their behalf.
And in some of these relations, such as trustee and cestui que trust, it is not necessary in order to avoid such contracts, that the latter should show that some benefit has resulted to the trustee.
The rule is that a trustee cannot purchase of his cestui que trust unless there is a distinct and clear contract ascertained to be such by a jealous andscrupulous examination of all the circumstances, showing that the latter intended that the trustee should *466buy, and also that there is no fraud, concealment or advantage taken. And, as has been said, it is difficult to make out such a case. (1 Story's Equity 360-61.
4. A trustee will not be allowed to make profit for himself in conducting the business of his cestui que trust, nor to place himself in an attitude inconsistent with the interest of the cestui que trust, or which may tend to interfere with the faithful discharge of his duty as trustee.
5. That the trust property has not come into the possession of the trustees when a contract of purchase is made, will not give the contract any additional validity. If it appear not to be fair and equal the court will vacate and set it aside.
Neither will a trustee be permitted to make profit for himself in managing the business of his cestui que trust. He is not allowed to put himself in any attitude inconsistent with the interests of his trust or which will tend to interfere with his duty in discharging it. {Ibid, 361.)
Applying these well established principles to this case, and we are compelled to the conclusion that the slaves held and claimed by the trustees in their own right, should be regarded as trust property, and as assets properly belonging to Mrs. Richardson’s estate.
The trust was created and accepted before the contract of October 26th, 1841, was made. The relation of trustee and cestui que trust then subsisted, and all the safeguards and protection incident thereto were thrown around the latter, and interposed between her trustees and herself. The fact that the slaves had not then come áo their hands, made no difference. They were vested with control over them, subject to the then almost expired term of the hirers, and took upon themselves all the duties imposed by the trust.
The contract in its most favorable aspect and conceding all that is claimed for it, was not such as she was entitled to. It only gives to her a life estate in one-third of the slaves conveyed, when by law she was a widow of Estes, who left no children, entitled to such estate in one-half. .(7 Ben. Monroe, 113.) To this extent she was certainly prejudiced, and her trustees benefitted, and upon this ground if upon no other would the contract as between the cestui que trust and her trustee be vacated.
But again it appears that the trustees themselves, or at least Spencer, recognised as late as 1849, her right to the slaves by executing a note to her for *467hire in which he expressly says the slave therein named was held by him in trust for her. Thus showing that he in his transactions with her, induced her to believe that she was the owner of the property. The language of the' obligation to her is inconsistent with the claim of ownership of the trustees, and is a circumstance that a court of equity will not disregard in scrutinizing a transaction between a trustee and cestui que trust.
In addition to this it appears that the slaves were listed for taxation as trust property and the lists furnished by the trustees.
These facts and others tending the same way force upon us the conviction that the contract was prejudicial to the interest of the cestui que trust and is not within that class of contracts between a cestui que trust and trustee, which a court of equity tolerates; and in our opinion the circuit court erred in not vacating it and adjudging the slaves in controversy to belong to Mrs. Richardson’s estate.
Upon the return of the cause the court below will vacate the contract between the appellees and Mrs. Richardson, and direct the slaves to be divided among the distributees of her estate, if susceptible of a division in kind, .if not, to be sold and the proceeds distributed. An account should be taken of hire, and after allowing appellees a reasonable and adequate compensation for their services as trustees, and for all necessary expenses incurred by them as trustees, the balance, if any, should come into the general fund for distribution. If the hire due the estate should not equal the amount herein directed to be allowed the trustees, any balance against the -estate should be paid by the administrator out of assets in his hands.
For the reasons stated the judgment is reversed, and cause remanded for further proceedings not inconsistent with this opinion.