Court Opinion

ID: 3610892
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:55:04.307693+00
Date Added: 2024-06-11T13:46:56.207544
License: Public Domain

The principle involved in this case is not materially different from that upon which the Court of Appeals pronounced its judgment in Gardner v. Ogden (22 N.Y., 327), and the numerous cases upon which that judgment proceeded. That Lyman L. Wilkinson occupied a very confidential trust relation to the plaintiff cannot, for a moment, be questioned; and he could not, in any way known to the law, so manage the business of his trust that he could derive any pecuniary benefit to himself, either directly or indirectly, beyond the stipulated amount agreed to be paid for the faithful performance of the duties of his trust to the very best advantage of the party who had confided in him. As, in this case, the plaintiff was absent in a foreign country, it *Page 456 
is not too much to say that the agent was charged with a very special degree of duty, as to fidelity and diligence in guarding her interests.
It was not at all necessary for the plaintiff to show any actual fraud in the conduct of her agent, to enable her to disaffirm his acts. It was quite enough to find, on her return home, that her interests had greatly suffered by the agent's acts, at least of very questionable character, and, I think, quite sufficient to indicate that he had been unfaithful to his trust. The undisputed fact that the plaintiff's agent, Lyman L. Wilkinson, leased to his son George, then about twenty-three years of age, living with his father and in no particular business, pecuniarily irresponsible, gave, and was required to give no security for the payment of the rent, all the property of the plaintiff in the agent's charge, with an immaterial exception; and that, thereafter, the father acted as the agent of the son in subletting the plaintiff's property, for which higher rents were realized, presents a transaction offensive to any rule of law, by which the conduct of a trustee or agent ought to be judged. Of this transaction the plaintiff was never informed by her agent, and she knew nothing of it until she returned from Europe, in 1866, two years after the father had leased her property to his son, and had attempted to renounce his allegiance to her and to transfer it to his son, who, it may be fairly assumed, was then supported in the father's family.
I shall never agree that such a transaction can be approved by law. Soon after the lease to the son was made, rents advanced about fifty per cent, and that profit, out of the plaintiff's property, was realized by the father or son, or both, and to my mind it is immaterial by which. Lyman L. Wilkinson, under the circumstances, had no legal right to lease the plaintiff's property to the son, and then assume the agency of it for him at the expense of the plaintiff. The relation of the parties forbid it; and the plaintiff was at liberty to affirm or disaffirm as she pleased. If it be the fact, that the rent received by the father in the lease to the *Page 457 
son was, at the time, apparently reasonable, it does not alter the rule, as was squarely decided in Gardner v. Ogden
(supra), where the agents made a sale of property, then at a fair price, to a clerk having a desk in their office, and which, afterward, largely appreciated in speculative value, and the sale was set aside and the purchaser required to account, because of his apparent confidential relation to the agents of the owner of the property. In that case, I think, the application of the general rule was very rigid, and the doctrine there approved certainly should not be extended; but, in this case, I think, the plaintiff's right to disaffirm the act of her agent, and call him to account, can be vindicated by the application of legal rules that are approved in all courts and places. (Gardner v.Ogden, 22 N.Y., 344; Case v. Carroll, 35 id., 388; Conkey
v. Bond, 36 id., 429; Fox v. Mackreth, 2 Bro. Ch., 400; Sugden on Vendors and Purchasers, 566; Jewett v. Miller,10 N Y, 402.)
It is, I think, apparent that, in the Supreme Court, the case was decided upon the assumption that its real merits were not before the court; for it is very obvious, from the opinions delivered, that the force and legal effect of the apparent infidelity of the plaintiff's agent was, at least to a very large extent, appreciated. It appears to me that, upon the original report of the referee, judgment should have been given for the plaintiff at the Special Term of the Supreme Court. A different result, however, was reached, and upon an appeal from the judgment dismissing the plaintiff's complaint, it was affirmed by the General Term. If it be true, as it seems to be, that the referee's report in such a case is to be regarded as a special verdict, upon an appeal it is our duty to render such a judgment as should have been given in the court below. It is not unlikely that the practice pursued by the plaintiff's counsel was not altogether artistic or prudent. He should have presented, with the referee's several reports upon which judgment was sought, the evidence upon which the several reports were founded, if he desired to assail any fact found by the referee. But he, quite likely, assumed that, *Page 458 
upon the facts found by the referee, the plaintiff was entitled to judgment; and I think he had a correct view of the law of the case as it was then presented. He was, however, admonished by the court, at Special Term, that he was in error, and the admonition was repeated on appeal to a General Term of the same court. After this he applied for leave to move the Special Term of the Supreme Court, upon the proceedings and evidence before the referee, to set aside the reports of the referee and all the judgments then entered, and for a new trial; and such leave was granted, and the motion afterward heard and denied, apparently, upon the ground that the erroneous judgment rendered was beyond the power of the Supreme Court to correct, vacate or set aside. To this proposition I do not agree; and I am of opinion that the judgments should all have been vacated, and either a judgment ordered peremptorily for the plaintiff, or a new trial granted. But, as I am of opinion that, upon the facts found by the referee in his several reports, the plaintiff was entitled to a judgment in her favor, according to the prayer of the complaint, it is not necessary to consider whether an appeal from the order, refusing a new trial, can be heard here.
While a majority of my brethren agree to the general rule of law, in respect to agents and trustees, as I have stated it, they think it should not be applied to this case, for the reason that the doctrine has never been extended, by any reported decision, so as to allow the disaffirmance of a transaction between father and son simply on account of that relation. It is very likely that no such case can be found in the books, and, possibly, for the reason that no such case has ever before occurred — for a transaction, apparently so flagrant as this would very seldom occur. I see no difficulty or danger in giving application to the rigid rule of law, demanding perfect fidelity in the action of all classes of agents and trustees, to this particular case, for, I cannot resist the conviction that a more shameless breach of duty was never committed. There is nothing to show but that the relation of father *Page 459 
and son, in this case, was as confiding and confidential as all the relations of near kindred are generally supposed to be. It may not have been altogether pecuniary, but it is obvious the son was a dependent upon the father. I do not mean to say that every transaction of this character between near relatives would necessarily be void, but I do say, that, upon the facts of this case, the transaction ought to be condemned.
For affirmance, LOTT, Ch. C., GRAY and EARL, CC.
For reversal, REYNOLDS and DWIGHT, CC.
Judgment affirmed.