2 Am. Law. Rec. 145 | U.S. Circuit Court for the District of Southern Ohio | 1866
I. Major Amos Stoddard, of the army of the United States, died intestate and without issue in the year 1813. He left surviving him four brothers and two sisters: Philo Stoddard, Simeon Stoddard, Curtis Stoddard, and Eliakim Stoddard, and La-vinia Pierce and Lucy Bunnel. They were his only heirs-at-law. Each of them was entitled to one-sixth of his estate. The complainants, except two of the legal representatives, are the defendants and heirs-at-law of his sister, Lucy Bunnel. Major Stoddard, at the time of his death, claimed title to four hundred arpens of land, lying upon the Missouri river, in Calloway county, in the state of Missouri, and three hundred and fifty arpens in the county of St. Louis, in that state. (An arpen is about fifteen per cent, less than an acre.) Major Stoddard’s title to the land in Calloway county was never questioned. It is worth from three to four thousand dollars. It is still undisposed of.
H. Major Stoddard’s title to the land in St. Louis county was derived through mesne conveyances from the government of Spain. The lieutenant-governor of Upper Louisiana granted a concession of three hundred and fifty arpens (297% acres), with an order of survey, on the 29th of January, 1800, to Mordecai Bell.- On the 29th of May, 1804, Bell conveyed to James Mackey. On the 26th of September, 1805, Mackey conveyed to Major Stoddard, who was then the civil commandant, under the United States, at St. Louis. Major Stoddard caused the concession to be located upon the land in St. Louis county, and the land to be surveyed on the 26th of January, 1806. The conveyances with the certified plat and survey were presented to the recorder of land titles of the district of St. Louis, on the 29th of June, 180S. The claim was filed for confirmation with the commissioners appointed under the
III. After the death of Major Stoddard, the heirs employed Luke E. Lawless, Esq., then an eminent lawyer of St Louis, to prosecute the claim, and agreed to give him for his services, in the event of success, one-ñfth of the property. Lawless submitted the claim to another board of commissioners, appointed under the act of congress of the 9th of July, 1833. They decided on the 8th of June, 1835, it ought to be confirmed, and it was subsequently confirmed by congress by the act of July 4, 1836. On the 15th of November, 1830, the heirs, pursuant to the agreement with Lawless, conveyed to him an undivided fifth part of the tract. On the 12th of October, 1837, Amos A. and Daniel Stoddard for themselves, and as attorneys in fact of the other heirs, entered into a contract with the defendant, Henry Stoddard, whereby it was agreed as follows: “Said Henry Stoddard is to use his best endeavors to perfect the title to said lands, and to obtain patents from the United States therefor, and for that purpose he is to go to the city of Washington if he judges it advisable so to do, and he may procure said patents to issue in the names of said heirs of Major Stoddard, or in his own name in trust for the heirs, or in the name of any other person or persons, as he shall judge proper, and shall be able to procure them from the United States; and when a legal title shall be Obtained he is to cause a suit or suits to be instituted in the United States courts, to establish the title and right so derived under Major Stoddard, deceased; and when the title and right shall be established or admitted to either or both said tracts, said Henry Stoddard.is to make sale of either or both said tracts, or any part of either, as he shall judge most for the interest of all the parties concerned; and the said Daniel and Amos A. Stoddard will make deeds to the purchasers from said Henry, and he is to direct in all such litigation as may grow out of the business, and he is to employ such counsel, attorneys, and agents as he may think necessary, and out of the proceeds of sales first made said Henry is to pay all the expenses that may in any way or manner attend such litigation, assertion, and establishment of title, and also the fees of any counsel or attorney and agents that he may employ in the business; but for his own services said Henry is to receive no other compensation than as is hereinafter provided, but said Henry is to be repaid out of such proceeds any and all sums of money that he has or may hereafter actually pay out, including his traveling expenses on any journey performed on this business; and said Henry having made one journey to St. Louis in April, 1837, and having then paid sundry sums on account of the land and for his expenses, the money that he then or may hereafter expend is to be refunded to him out of the proceeds of sale; and said Henry is to keep an account of the money he may pay out in this business, and his account, verified by his oath, is to be received as his account of money paid out by him in this business; and after paying out of the proceeds of the sale of said lands as aforesaid, ■ the costs, expenses, &c., as above provided for, the said Henry is to have for his personal services in the business one-tenth part of all the proceeds of sale of each and both said tracts (that is to say, of the proceeds of sale, all money actually paid out by the said Henry is to be refunded to him, and the balance is to be so divided as that said Henry is to have one-tenth part, and the heirs of said Major Stod-dard and said Lawless the residue, according to their respective rights and interests, as before stated; and the portions which said heirs are respectively entitled to, said Henry agrees to pay them or their before-named attorneys in fact, or one of them, as soon as he shall receive the same, on request made; but if the title to none of the land shall be established, the said Henry is to receive nothing for his services or expenses).” After-wards Henry Stoddard, to enable him the more effectively to execute the purposes of the agreement, advised that the legal title should be conveyed to him in trust, and thereupon Simeon Stoddard, Curtis Stoddard, Joseph Bunnel, and Lucy, his wife, Jonas Poster, and Lavinia, his wife, Daniel Stoddard, Lucy Cowan, and Daniel Morgan and Aroa, his wife, conveyed accordingly. This conveyance was made in the year of 1839.
IV. Upon the 23d of April, 1846, Henry Stod-dard, as the agent of the heirs, entered into a contract with the Hon. Thomas Ewing, whereby it was agreed that Mr. Ewing should attend to all the litigation pending, or which might arise, involving the title of the heirs in the circuit and supreme courts of the United States; and that he should have for his services ten per cent of what the heirs might receive upon the sale of their interests in the property. On the 17th of February, 1815, congress passed an act whereby it was provided that any person owning lands in the county of New Madrid, in Missouri territory, on the 10th day of November, 1812, and whose lands had been materially injured by earthquakes, should be authorized to locate the like quantity of land on any of the public lands of the said territory, the sale of which is authorized by law. Persons owning less than 160 acres were authorized “to locate and obtain any quantity of land not exceeding 160 acres.” It was further provided: “Nor shall any person be entitled to locate more than 100 acres, nor shall any such location include any lead-mine or salt-spring.” 3 Stat. 211. The recorder of land titles for the territory was authorized to receive proof, and issue the proper certificates for location and survey. On the 28th of November, 1815, a certificate was duly issued to Eustaclie Peltier, authorizing him to locate not exceed
V. Luke E. Lawless conveyed his one-fifth to H. R. Gamble. Gamble appears to have taken possession of a specific part of the-tract, and to have conveyed to Mills and Beaumont. Before the decision in Mills v. Stoddard he made a parol .agreement with Henry Stoddard, that if the Stoddard title should prevail, he, or those claiming under him, should have the tract, and that if it were more valuable than one-fifth they-should pay the heirs the difference, and if less valuable they should take the difference-
VI.Prior to the agreement with Murdock, and prior to January, 1851, Henry Stoddard ' had determined to lay out the residue of the tract into lots and to sell them at public auction. Amos A. Stoddard says that before that time he “had frequent conversations with him as to the most profitable way of bringing the property into market for the benefit of the heirs. I can not tell how often we have conversed on the subject. He said that it was his opinion that it would be best to survey the tract into lots and sell them at public sale. This was the opinion of both of us.” Wm. H. Cozzens was asked whether he had heard Henry express himself to the same effect prior to January, 1851. He answers: “I heard Mr. Stoddard, in conversation with other persons, speak of the suitableness of the tract for being laid out in-. to lots. I heard him so speak in the office of Leffingwell & Elliot. This was the time the lot was being surveyed and laid out into lots about the spring of 1851. I heard Stod-dard speak in the highest and most glowing terms of this land, and gave it as his experience that land having that location would ultimately become very valuable for building purposes, and that all large cities made rapid improvements on their suburban property, and that after an inspection of our city map, he stated that we had not laid out sufficient land to answer the growth of the city, for the coming ten years.” This purpose of Henry Stoddard was carried out in the fall of 1851. He laid out the property as an addition to St. Louis. The streets correspond with those of the city which’ are produced through it. The dedication bears date on the 9th of September. The lots were offered for sale subsequently in that month. Henry Stoddard says in his deposition: •‘Nominally they were all sold. Such lots were sold to actual purchasers as could be sold, which amounted to $178,543.01, and the residue were taken by the parties in order to effect a partition, and it was regarded by the parties as a partition, which amounted to' $518,679.31. I cannot give a particular list from memory, but refer complainants to deeds on record in St Louis.” These two sums make an aggregate of $697,222.32. He says he bid in for himself, his co-defendants, Asa and Daniel Stoddard, by way of partition, lots to the amount of $224,074.96. All the lots have steadily and largely advanced in value since that time.
VII.On the 1st day of February, 1851, the defendant, Asa P. Stoddard, bought from Amasa, Anthony S. and Lucy Bunnel, and on the 6th, from Alva O. Bunnel, their respective shares of the estate of Major Stoddard. Each owned one-seventh of a sixth in right of their mother, Lucy Bunnel, deceased, who was one of the sisters of the intestate. He paid to each, as the consideration, the sum of one thousand dollars, and took from each a separate conveyance. They were the same mutatis mutandis. The granting part was as follows: “Have bargained and sold, and by these presents do bargain, sell, and convey to the said Asa P. Stoddard, all my right, estate, title, and interest as one of the seven heirs-at-law of said Lucy, and also of said Joseph Bunnel, both deceased, in said two tracts of land, and in the proceeds of the sale thereof, to be made by the said Henry Stoddard.” Each instrument, besides a covenant against the acts of the grantor, contained a covenant of warranty, as follows: “And further, that I will warrant and defend the said one-seventh part of one-sixth part so bargained and sold to the said Asa against all claims and demands whatsoever.” They are drawn with great fullness of recitals and with ¿labórate care. The grantee took no risk as to the title. If it had failed he would have been entitled to recover back what he had paid, with interest. The residences of the grantors were as follows: Amasa and Lucy Bunnel lived in Laporte county, Indiana; Anthony S. lived in Marshall county, in that state; Alvah C. lived in Walworth county, Wisconsin; Aviah Bronk, their sister, and her husband, Nicholas Bronk, had sold her seventh of her mother’s sixth to Philo. Green, for three hundred dollars. They claimed that Green had defrauded them, and that the contract was void.
VIII.On the 19th of August, 1851, Asa P. Stoddard entered into a contract whereby it was agreed that he should take all the necessary steps to get the contract with Green set aside; and if he succeeded, the Bronks agreed to sell and convey to him their one-seventh of one-sixth for the sum of eight hundred dollars, in addition to the three hundred dollars paid by Green. Asa, with the aid of his father, prevailed upon Green to rescind the contract, and on the 9th of October, 1851, Bronk and wife conveyed to him their one-seventh. The granting part of the deed is the same with that in the deeds executed by the Bunnels. It contains no warranty. On the 18th day of June, 1856, Bronk and wife executed to Asa a deed of confirmation. He proposed to pay, and did pay them nine hundred dollars as
IX. The validity of the sales depends upon the facts and the law of the case. These will now be considered. And first the facts: The sales were made in the winter and summer of 1851. Asa was then twenty-four years of age. He was unmarried, and had always lived in his father’s family. He had occasionally been a clerk for others, but had never been engaged in any business for himself. The extent of his means was a fund in the hands of his father, as his guardian, which, with interest to the 26th of January, 1851, amounted to $2,919.83. In the fall of 1850, he visited St. Louis with his father, and was there about three weeks, at the expense of the trust fund. In a letter of the 14th of January, 1851, to Anthony C. Bunnel, his father says: “My son and I went to St. Louis, and was there nearly a month attempting to make a partition, but could not effect it.” During a part of the 'time Asa was confined by sickness. He rode over the property. While there he heard of the sales of the interests of some of the heirs. He then conceived the idea of buying himself, and made inquiries with that view.
The evidence discloses that Henry Stod-dard was a man of business and a practicing lawyer of marked ability. He had been connected with the property, as counsel and trustee, since the year 1837. He was interested in it to the extent of ten per cent as a compensation for his services. He visited St. Louis frequently. He was there in April, and again in October and November, 1850. In a letter to Daniel Stoddard of the 9th of December, 1844, he said: “Amos had a conversation (he says) with Governor Miller, of Missouri, who advised him not to make a compromise — that the property was increasing in value rapidly, and will double in value every four years.” In another letter to Daniel Stoddard, of the 19th of January, 1840, he said: “I do not think the land at St. Louis is as valuable as you say the newspapers represent it; but it is still of great value, and increasing, though I could not form any very accurate estimate.” In a letter from Amos A. Stoddard to Henry, of the 2d of April, 1849, Amos said: “When we commenced in 1837, its value was one hundred dollars; it is now considered by professional men to be worth one thousand dollars per acre.” This letter is dated at St. Louis. Amos was one of the heirs, and was then living on the property. In a letter to Henry Stoddard of the 5th of March, 1850, Amos said: “The property has become exceedingly valuable, so that in fact we are gaining by the delay by the litigation; but we are under no obligation to our opponents for it. Our part is now thought by some to
On the 18th of December, 1850, Amasa Bunnel addressed a letter to Henry Stoddard, in which he said: “I understand that the suit concerning our property is brought to a close, and decided in our favor. I want to learn how, and in what condition it is in. I understand Mrs. Morgan has sold her share for $1,500. There are seven heirs of us. I should like to learn what you think my share is worth. I have had an offer for it. Please write soon. Direct your letter to Baporte, Indiana.” On the 14th of January following, Henry Stoddard replied. The letter is long and elaborate in its details as to the property. The parts most material to the present controversy are as follows: “Your interest, then, is one-seventh of one-sixth of three-fifths, subject to the deductions for my expenditures. I cannot state what they will amount to, for they are all not yet paid. I lately received a letter from Mr. Ewing that there is a bill of costs to pay at Washington. The litigation has been pending since 1837 or 1838, in one form or another, and I have generally been once, and more recently twice, a year to St. Louis, and twice or three times to Washington, and there are several bills yet to pay at St. Louis, including lawyers’ fees there. Although the supreme court has twice decided Major Stoddard’s title to be good, yet we have not yet got into possession of but part of the land; and when we were down last fall some of those in possession manifested a disposition to have further litigation, but I trust they will think better of it and give it up. * * * When we were- at St. Louis in October and November last, H. A. Stoddard and his brother and Dean expressed a very great desire that when we should get into possession,, and shall have made a partition with Mills, Beaumont, and Bredell, that I would divide the rest and set off to each his part of the land, so that they may manage it in their own way. I told them I should be very glad to do it, as it would save me the trouble of selling it, but by my contract I was bound to sell, and divide the money, and that without the consent of at least a majority of heirs, I could not divide it among the heirs as they wished, and at their urgent request I agreed to send to the heirs, and see if they would consent to a division instead of a sale; and it is for the purpose of presenting this question for your consideration that I have sent my son, the bearer of this, to see you, and I have made the foregoing statement that you may have the whole statement before you. I am very willing to divide if all the parties wish it, and will agree thus to change my contract, for by so doing I shall get clear of a good deal of trouble. * * * The land near St. Louis is far more valuable than the land in Galloway county, and if we can once get into full possession, and get partition with Mills and Beaumont, and with Bredell (as I think we can), so that we can sell, it will no doubt sell for a good deal of money, but it is utterly impossible to say what it will sell for.” To this letter was added a postscript which bears date on the 18th of January, four days after date of the letter. It is as follows: “P. S. Since preparing the above, my son has stated to me that if he can agree with you, your brothers and sisters, for your interest in the property, he will purchase. He does not go prepared, I believe, to pay for all your shares, but if he agrees with you and gives his notes, I will guaranty their payment as he shall agree, and you can hold this letter as binding me as his security. I several years since, while he was a minor, sold land which he received from his grandfather, on the side of his mother, and from an uncle, and the money is still in my hands, and will pay it for him.”
On the day of the date of this letter to Amasa, Henry. Stoddard addressed a letter to Anthony S. Bunnel, in which he said: “I have made some advances since I wrote to you last summer, but I have not yet got possession of all the lands. My son and I went to St. Louis in October, and was there nearly a month attempting to make a partition, but could not effect it. I expect to go down early in the spring to see if I can get possession, which I regard as very important. You can see the letter which I have written to your brother, as it is open.”
On the 15th of the same month of January, Anthony S. Bunnel, in a letter of that date to Henry, said: “I would like to know how you get along with the St. Louis business. Can you tell us when we will get something from that property? Tell us as near as you can how much there will be for mother’s
That time then was more than thirteen years. When Anthony executed the conveyance he said: ‘He might not get his share in his lifetime if he waited for the business-, to be settled, and for that reason, perhaps, he had better sell his share to Mr. Stoddard.”' Anthony S. Bunnel accompanied Asa to the house of Amasa Bunnel. Asa was there two. or three days. He said there, to Anthony,. Lucy, and Amasa, “that he had been on the-property a number of times, and knew what it was worth. He offered me seven hundred' dollars apiece for their shares. As before stated, he ultimately gave a thousand.” Am-asa says: “We had no knowledge of the situation or value of our interests in said property, except as drawn from Henry Stoddard and from what Asa said at .that time.” He says further, that he sold to Asa “because he said he was paying me more than my interest in said property was worth, combined with the information received from his father, Henry Stoddard, in the letter brought by him. I relied upon his statements, combined with the information brought from his. father, and not upon my own knowledge or-judgment in the matter.” George W. Gilchrist, a witness in nowise interested or connected with the parties, speaking of the con
This letter was delivered to Lake by Asa. Lake accompanied Asa to see the Bronks.
Acres
350 arpens, reduced to acres. 297 74 Deduct Lawless’s 1-5 apart-ed to acres.
Mills & Beaumont. 42 70
Deduct for expenses. 15 57 70
„ 240 04
„ H. Stoddard’s 1-10.24
T. Ewing"s 1-10. 24
- 48
Major Stoddard’s six heirs each 1-6—
32 acres x 6. 192
Lucy Bunnel’s seven heirs, each 1-7 of 1-6 — 4.57 acres x 7. 32
Asa paid the three Bunnels at the rate of $218.81 per acre. The purchase of Mrs. Bronk’s interest was made later, and he paid a trifle more for it The true value of the land in January, 1851. What was the value of the land when he bought out the interests of the Bunnels ? The defendants examined six witnesses on the subject. They estimate it, except the one last named, who gives no estimate, as follows: John H. Hall, $400 to $500 per acre; Albert Todd, $400 per acre; John Krum, $300 to $350 per acre; James F. Donaldson, $200 to $300 per acre; Richard Q. Elliott, $200 to $400 per acre.
Hiram W. Lefflngwell says: “The property was not, in January, 1851, in a condition to be sold to persons wishing to build or occupy, but only for purposes of speculation. It had no known price or value, as a whole or in parcels, in the market at that time.”
John J. Murdock was a merchant He lived in St. Louis twenty-five years. He was a dealer in real estate. On the 30th of November, 1850, he bought one-twelfth of the tract not. subject to claim of Messrs. Ewing and Henry Stoddard, and paid for it $30,000 cash; this was more than $1,200 per acre. He thought at the time he had a margin for profit of $2,000 per acre. Chas. R. Dickson was the partner of Murdock. He had lived in St. Louis the same length of time and dealt in real estate when he saw an opportunity of buying on terms which suited him. The purchase of Murdock was made for Mur-dock and himself jointly. Before buying he consulted the eminent law firm of Greer & Dayton, who assured him that “the Stoddard title was undoubtedly good.” He thinks they bought cheap. His estimate of the value of the property at the time referred to is $2,000 per acre. Daniel R. Garrison lived in St. Louis thirty years. In the spring of 1851, he and his brother purchased the interests of several of the heirs, comprising nearly fifty acres. He paid $1,000 per arpen. Before buying he consulted Messrs. Grant, Gamble & Geyer as to the title. They pronounced it good. His estimate is that he paid $1,000 per arpen, which is about $1,200 per acre. The other nine witnesses were in nowise connected with the parties or the property. Judging from the record, it would seem that thirteen witnesses could hardly have been found whose testimony upon the subject would be of higher moral value. In this connection it is proper to recur again to the purchase by Mr. Ewing and Asa of the title, with the approbation of Henry Stod-dard. They bought Mrs. Foster’s interest in April, 1851, at $1,125 on account. On the 12th of June, following, they bought the interest of Amos Stoddard at the same price. Between the time of the purchase of the Bunnels and these purchases, it is not shown that any change had taken place in the situation or value of the property. The purchase from the Bronks was made after those of Mrs. Foster and Amos A. Stoddard. After the decision in Mills v. Stoddard [8 How. (49 U. S.) 345], in the spring of 1850, Henry Stoddard, as far as the record discloses, always spoke and wrote of the title as finally established. The only difficulty he alleged was in regard to getting possession. In September, 1851, Messrs. Gant and Bates-gave their opinion, which was published, that there could be no interference by any common field-lot title. Mr. Darby, who was. the counsel fcr most of the defendants in the ejectment cases pending in the circuit court, and the warrantor of the adverse title held by many of them — upon learning the result in Mills v. Stoddard [supra] — advised them to make no further resistance, and judgments were accordingly entered by counsel. No witness has testified that after these judgments were rendered Henry Stoddard could not have obtained possession whenever he chose to issue writs of habere facias.
The following passage occurs in the deposition of Mr. Darby: “10th Question — How many of said defendants were you attorney for; and what course did they pursue in regard to the possession after the judgments were obtained? A. I don’t recollect how many I was counsel for — ten or fifteen perhaps. I advised them to give up, notwithstanding their rights had been, as I conceived, grossly outraged. There was no remedy. They gave up. I heard of no resistance afterwards.” Amos A. Stoddard says:“There was no threatening of force or resisting the officers to my knowledge. * * * At this time several of the claimants expressed themselves pleased to know that there was now a way by which they could get a good title. These showed a disposition to make no further opposition. A company that had been making brick on the tract made an application to Henry Stod-dard for a lease for a year. A lease was-given to the applicant. I do not recollect the name. I never heard Henry Stoddard express a doubt as to the Stoddard title being good. He never expressed any apprehension at all about being able to get possession, whenever he should issue the proper writs.” There is other testimony to the same effect, upon this subject, but it is deemed unnecessary particularly to advert to it The school claim is named by some of the
The great fire of St. Louis occurred in Hay, 1849. It appears that the buildings destroyed by the great fire were replaced within eighteen months. It depressed even the real estate burned over, but a very short time. The property speedily appreciated. Several intelligent witnesses think the fire benefited the city, by bringing in the money received for insurance, and clearing the way for the better buildings which were speedily erected. The cholera prevailed as an epidemic in 1849, and to a more limited extent in 1850. John Byrne says: “These events had merely a temporary effect, which lasted until the cholera had disappeared and the burned buildings could be rebuilt. * * * The depression did not extend until 1851.” Sylvester Papin says: “My conviction is, that the years 1850, 1851, and 1852 were peculiarly prosperous years. I was then connected with the city government, &c. * * * The prospects of St. Louis in regard to the increase of her population and business prosperity at the close of 1850, and the beginning of 1851, were bright and promising.” Charles R.. Dickson, Oliver Garrison, Theodore Greene, and John Dagget, also testify that the fire and the cholera exerted no effect upon the value of property as late as 1851. The Hon. John Hogan says: “I am not prepared to say, as before stated, that the fire had more than a temporary effect on the progress of St. Louis. Indeed, business of all kinds, manufactures, improvements, &e., seemed to have received a fresh impulse soon after those apparent calamities, and the city, in all its material interests, grew more rapidly than before, so that I have always regarded the great fire as a real blessing to the place, promotive of most valuable improvements.” Whatever may have been the influences of these causes of depression in January, 1851, it is clear that they did not reduce the market value of the property in question at that time below $12 per acre. This proposition is satisfactorily sustained by a great preponderance of evidence. The facts warrant, and indeed enforce, the conclusion that this was known to the defendants at the time the purchases were made from the Bunnels. Was Henry Stoddard a sharer with Asa in the purchases from the Bunnels and the Bronks, as charged in- the bill? Henry Stoddard was asked in his ■cross-examination as a witness to give an account of his receipts and disbursements with respect to Asa’s share of the trust property. He referred to his answers given to •other interrogatories, and added: “I decline to give any other transactions with Asa, unless the court order it, as it cannot be material unless the court order an account to be taken. My account with Asa involved many compromise transactions. It was always kept strictly.” He gives attached to his deposition, as Exhibit 64, “an account of the sales and partition of the Stoddard addition to the city of St Louis, as settled December 3, 1851. In that account the following statement appears:
H. Stoddard and A. P. Stoddard and others’ account, subject to H. Stoddard’s cost bill, viz.:
H. Stoddard’s fees, 10 por cent.. $ 63,012 00 Daniel Stoddard’s heirs’ share (net) Lucy Bunnel’s share, six-sevenths, part of which belongs to said A. 90,749 45
P. Stoddard. 90,749 45
Asa P. Stoddard’s one-third one-sixth, under assignment from Amos A. Stoddard. 30,249 80
Said A. P. Stoddard’s one-fourth of one-sixth, part of the Poster share, and assigned to him by Ewing. 22,687 38
Total subject to H. Stoddard’s control.$298,348 08
This shows, as doubtless it was intended to show, that Asa’s purchases were, as they appeared to be, solely for himself, and it can hardly be doubted that it was intended to make the further impression that they or the proceeds still belonged to him when the deposition was taken. In consequence of a remark made by the court at the hearing, leave was subsequently asked to file, as evidence in the cage, the account withheld when the deposition was taken. Leave was given. The account was filed and is before us. It does not show anything that purports to be a “compromise transaction” between Henry and Asa. Why is this? It shows a settlement on the 3d of July, 1862, to which Henry, Asa, and others interested were parties. In this statement the proportion of the funds as it existed on the 3d of December, 1851, assumed and claimed to belong to Henry, is, instead of $63,912, enlarged to $116,849. This aggregate is the precise amount of the $63,-912 claimed by Henry in the settlement of 1851, with the addition of the proceeds of the interest bought from the Posters and Amos-taken from Asa and given to Henry. Asa is here represented as owning only the six-sevenths of the Bunnel share, five of them being those in controversy and one not in controversy, bought by Asa of another party. The subsequent avails of the property were divided into the same proportions. The settlement was signed by the parties. It shows conclusively that the interests bought of the Posters and Amos belonged then to Henry. How did he acquire them ? Was it by one of those “compromise transactions” referred to in his deposition? and was that compromise that Asa should have the Bunnel shares and Henry the others? No separate debit account in favor of Asa and against Henry is given. A debit account against Asa appears. Affixed to a part of it is this memorandum: “The foregoing account of payments made
In tbis part of the account • are charges purporting to have been made in' January, February, and March, 1857. This is unexplained. It is to be borne in mind that Henry has the same apparent connection with the purchases from the Bunnel heirs, as with those from the Fosters and Amos A. Stod-dard. The purchases were all made by Asa in his own name. He took the titles to himself, and was held out to the world as the owner. In relation to all of them, Henry- furnished alike his name, his means, and his credit. The whole cost of Asa’s purchases, including interest up to this last payment, which matured in October, 1856, was over $34,000. The entire amount of Henry’s payments to Asa down to the close of 1856, including $2,919.63, accounted for by Henry as guardian, was $11,968.52. ■ Of 1 this sum it appears only $8,948 was applied to Asa’s contract, leaving him destitute of means to meet his engagements to the extent of more than $25,000. The debit account against Asa does not show a dollar which was applied to either the purchase from the Fosters, or from Amos. Henry must have paid for them, and he does- not seem to have thought it worth while, even pro forma, to charge the amount or any part of it in his account against Asa. The profits on these interests when the settlements of 1862 were made, must have been large, perhaps not less than $50,000. By what right did Henry appropriate this fund to himself? That account throws no light on the subject. Even as regards the Bunnel shares, the account and other evidence in the case, as we understand them, show a large fund and a large amount of property* apparently belonging to Asa, still in the hands of Henry. Asa has reached middle life. Why were they so long withheld from him? Was it because some one else claimed the right to share in them with him, and that their respective claims had not been adjusted? It is hard to account for this feature of the case upon any other supposition. Whether Henry Stoddard was or was not interested with Asa in the purchase in controversy, is a question which, in the view we take of the case, is not necessary for us to decide, and we express no opinion upon the subject. The circumstances of his connection with the purchase from the Fosters and Amos, made undeniably manifest by the account, greatly fortify the presumption arising from the other evidence of fraudulent complicity, at least on his part, in the transactions of Asa, impugned by the plaintiffs in their bill.
The Law Considered. The legal principles which apply as far as the case has been considered are well settled. “It is an ancient and well-established principle that whenever suppressio veri or suggestio falso occurs, and more especially both together, they afford a sufficient ground to set aside any release or. conveyance.” In Story’s Equity Jurisprudence (pages 201, 202) it is thus stated: “Wherever the party intentionally, or by design, misrepresents a material fact, or produces a false impressioh, in order to mislead another, or to entrap or cheat him, or to obtain an undue advantage of him, in every such case there is a positive fraud in the truest sense of the term; there is an evil act with an evil intent; ‘dolum malum, ad eir-cumveniendum.’ And the misrepresentations may be as well by deeds or acts as by words; by artifices to mislead as by positive assertions. Whether the party thus misrepresenting a fact knew it to be false, or made the assertion without knowing whether it were true or false, is wholly immaterial; for the confirmation of what one does not know, or believe to be true, is equally, in morals and law, as unjustifiable as the affirmation of what is known to be positively false. And even if- the party innocently misrepresents a fact by mistake, it is equally conclusive; for it operates as a surprise and imposition on the other party. Or, as Lord Thurlow expresses it, in Neville v. Wilkinson [1 Brown, Ch. 546], it misleads the parties contracting on the subject of contract” The author of the treatise last cited thus states the modifications of the doctrine; “The misrepresentation must be of something material, constituting an inducement or motive to the act, or omission of the other, and by which he is actually misled to his injury. In the next place, the misrepresentations must not only be in something material, but it must be something in regard to which the one party places a known trust and confidence in the other. It must not be a mere matter of opinion, equally open to both parties for examination and inquiry; and where neither party is presumed to trust to the other, but to rely od his own judgment.” Smith v. Richards, 13 Pet [38 U. S.] 36, 37. It is a circumstance deserving of attention who made the first proposition. Morse v. Royal, 12 Ves. 375. Inadequacy of price, though not by itself sufficient to avoid a sale, is, in connection with circumstances of suppression or misrepresentation, entitled to great weight. Cockell v. Taylor, 15 Eng. Law & Eq. 101. The fraudulent purchaser becomes ipso facto a trustee for the party defrauded. Hill, Trustees, 146. Courts of equity have power to relieve against deeds and judgments, not only when obtained by fraud and imposition, but also when regularly obtained, if there are circumstances of extraordinary hardship or great inadequacy of consideration. McDonald v. Neilson, 2 Cow. 193; Cranston v. Johnston, 3 Ves. 170. In such cases equity annuls the whole transaction. Whelan v. Whelan, 3 Cow. 577; Daubeny v. Cockburn, 1 Mer. 644. If the fraud be such that, had it not been practiced, the contract would not have been made, then it is material. 2 Pars. Cont. 770. In Turner v. Harvey, Jac. 178, Lord Eldon adverts to
The appositeness of these remarks to the case under ^consideration needs no observation. In Jackson v. King, 4 Cow. 221, the court said: “The distinction between legal and equitable jurisdiction upon fraud is this: that at law it must be proved, and not presumed. . . . The broad ground assumed by Lord Mansfield (1 Burrows, 391) is, that courts of equity and courts of law have a concurrent jurisdiction to suppress and relieve against fraud. The doctrine has, however, been subsequently modified according to the distinction taken by Lord Eldon, which is founded on good sense. I am not aware of any express adjudications in our courts. But in 4 Desaus. Eq. 684, it is sanctioned. It was there held, that fraud may be presumed in equity, but must be proved at law. In accordance with these principles a variety of cases have been decided and relief afforded in equity where, from the nature of the transaction, fraud and imposition might be presumed.” 3 P. Wms. 129; Pow. Cont. 31. I am not entirely satisfied with the rule as thus laid down. As respects setting aside or annulling the conveyance, my understanding is, that a court of law can entertain no question but those which relate to the execution of the instrument (as where the instrument is misread to the grantor, or one draft is fraudulently-substituted for another). Belden v. Davies, 2 Hall, 446; Hartshorne v. Day, 19 How. [60 U. S.] 211. But proof of the fraud relied upon, I apprehend, is as necessary in one form as the other. But in either case it must be sufficient to satisfy the mind to which it is addressed, and it must establish a wrong of such a character as to warrant the judicial action which is invoked. In this class of cases the injured party has the option to rescind in equity, or sue at law for damages. Bradley v. Bosley, 1 Barb. Ch. 149; 2 Pars. Cont. 783. Where he elects to rescind, the “law which abhors fraud does not incline to permit it to purchase indulgence, dispensation, and absolution,” by any measures of compensation from the wrong-doer. Boyce v. Grundy, 3 Pet. [28 U. S.] 219. This is the distinction between the legal and the
The principle is also applied with equal vigor to all employed in any relation of confidence to the trustee, or cestui que trust, or the trust property. The rule includes attorneys, solicitors, their managing clerks, agents, and all others acting in a capacity which gives facilities for acquiring information not open to all the world. If such persons buy for themselves or others, a court of equity, upon being applied to by the proper party, will, without reference to its fairness, annul the transaction, upon consideration of public policy. The law will not tolerate so dangerous a conflict of interest and duty. All the fiduciary learns, and all that he can do, the cestui que trust has a right to claim the benefit of. This disability springs from the relation of the parties. The law will not permit the agent to be both seller and buyer. It proceeds upon the considerations that integrity might give way, and corruption prevail, and that the fraud might so hide itself as to escape detection. Hence the rule that the fact itself of the purchase once established, is fatal to the transaction. The law will not allow the agent to be led into such temptation. It seeks to keep the fountain pure by shutting out, as far as practicable, the possibility that it should be made otherwise. 2 Sugd. Vend. 109; Adams, Eq. 216; Hill, Trustees, 785; Michoud v. Girod, 4 How. [45 U. S.] 554; Davoue v. Fanning, 2 Johns. Ch. 252; Ex parte James, 8 Ves. 337; Ex parte Bennett, 10 Ves. 385; Coles v. Trecothick, 9 Ves. 234; Lowther v. Lowther, 13 Ves. 95.
There is no positive rule that the trustee may not buy of the cestui que trust; but, in •order to do so, he must fully divest himself of all advantages which his character of trustee might confer, and must prove, if the transaction be afterward impugned, that it was in all respects fair and honest. Adams, Eq. 217. In Coles v. Trecothick, 9 Ves. 244, Lord Eldon said: “I agree that the cestui que trust may deal with the trustee, who may become the purchaser of the estate. But though permitted, it is a transaction of great delicacy, and which the court will watch with the utmost diligence, so much that it is very hazardous for a trustee to engage in such a transaction.” And again: “A trustee may buy from the cestui que trust, provided there is a distinct and clear contract ascertained to be such after a jealous and scrupulous examination of all the circumstances, provided that the cestui que trust intended the trustee should buy; and there is no fraud, concealment, no advantage taken by the trustee, of information acquired by him in the character of trustee. I admit it is a difficult case to make out wherever it is contended that the exception prevails.” Lord Erskine, in Morse v. Royal, 12 Ves. 372, said there was so much difficulty in supporting a purchase by a trustee, and it required to be guarded with so much jealousy, that it would have been better to have interdicted it altogether. It is a principle recognized in all the authorities, that the burden of proof lies on the purchaser. Some of the tests which have been applied in such cases will be adverted to. Inadequacy of consideration may well be considered an item that gives the character of fraud to the transaction. Whelan v. Whelan, 3 Cow. 575. If the court sees the “least speck of imposition at the bottom; if there be the least scintilla of fraud,” the court will interpose. Id. 577. The agent must make it perfectly clear that he furnished the cestui que trust with all the knowledge which he himself, possessed. Gross inadequacy of price is strong evidence. He should advise that some one else be consulted as to the value, and he must make it manifest that he gave all the reasonable advice against himself that he would have given against another. Gibson v. Jeyes, 6 Ves. 278. He must show that he has dealt with the other party with the utmost good faith, taking no advantage of his influence, but representing everything fairly. Boney v. Hollingsworth, 23 Ala. 698. When a party is obliged to rely upon the statements of another, and not only may, but should, repose peculiar confidence in him, this is the nature of a special trust, and the law is very jealous of the betrayal of this trust, and visits it with great severity. 2 Pars. Cont. 774. It is a fraud against which equity will relieve. Shaeffer v. Sleade, 7 Blackf. 178. It is the duty of the trustee to see that the cestui que trust is properly advised. Lloyd v. Attwood, 3 De Gex & J. 615. A solicitor or attorney cannot take advantage of his own ignorance, negligence, or indiscretion; and if he acquire the property of the client in a manner inconsistent with his duty, he will be taken to hold it as a trustee. Bulkley v. Wilford, 2 Clark & F. 177; Jackson [Stockton] v. Ford, 11 How. [52 U. S.] 233; Poillon v. Martin, 1 Sandf. Ch. 565. Although the confidential employment ceases, the disability continues as long as the reasons for which it is founded continue to operate. Carter v. Palmer, 8 Clark & F. 657. A solicitor is bound to prove that he paid that price which he would have advised the client to accept from a third person. Champion v. Rigby, 1 Russ. & M. 539. A grossly inadequate price causes a strong, and in general a conclusive, presumption, though there is no direct proof of fraud, that undue advantage has been taken of the ignorance, the weak
X. Our conclusions are: 1. The avowed •object of sending Asa to the Bunnels was a pretext, and not the cause. It was intended to veil the real motive of the journey — which was to buy out the heirs. 2. Henry, in his letter of the 14th of January, suppressed important facts, which it was his duty as trastee, and otherwise, to communicate. The letter was evasive and deceptive, and wrought the purpose of misleading, which it was intended to accomplish. 3. The same suppression was practiced by Asa, and he misrepresented the property and the prospect of further litigation. 4. In regard to the interests bought of the Bronks, there were the same suppression and misrepresentations by Asa; and the suppression of still more important facts by both the defendants. 5. By these means Asa was enabled to purchase the property for less than one-fifth of what it is worth, and could, at the time, have been sold for in the market at St. Louis. 6. In relation to the deed of confirmation there were suppressions which are conclusive. 7. Asa occupied a trust relation to the property, which disabled him from purchasing, except upon the principles which govern the dealings of trustees and cestui que trust S. The wrongs committed by the -defendants upon the vendors were joint throughout. Before the work was begun they combined and confederated for a purpose, and wrought together until that purpose was accomplished. 9. Their wrongs destroy the rights which Asa claims to have acquired. 10. The complainants must prevail unless their case is fatally met by one or more of the legal objections taken by the defendants, which remain to bo considered.
XI. It is objected that the bill is multifarious. The objection was taken by the answer, and the attention of the court was not called to it until the hearing. As stated in the answer, the ground of the objection was, that five distinct sets of complainants had united five distinct- causes of action in the bill. It has since been extended or modified. In a very able argument, submitted since its hearing, it is insisted: First, that by the contract with. Lucy Bunnel, the first, and her husband, with Henry Stoddard, and their subsequent conveyance to him, her interest in the property ceased in equity to be realty and became wholly personalty, and that for any breach of duty by the trustee, her personal representative is the proper person to sue, and the only one who can do so. , Second, that if the conveyances to Asa were procured by fraud — those instruments relating to personalty and not realty — the parties defrauded, who are living, and the personal representatives of the deceased, are the proper persons to sue, and that the heirs-at-law of the decedents are misjoined as complainants. And third, that these distinct causes are improperly joined in the bill.
The objection comes too late. It should have been made by demurrer before the defendants answered. After the labor, expense, and delay, incident to the preparation of the cause for hearing, a defendant is not allowed to interpose this objection. Whaley v. Dawson, 2 Schoales & L. 371; Wynne v. Callander, 1 Russ. 293; Ward v. Cooke, 5 Madd. 122; Campbell v. Mackay, 1 Mylne & C. 603; Nelson v. Hill, 6 How. [46 U. S.] 133; Bryan v. Blythe, 4 Blackf. 249; Grove v. Tresh, 9 Gill & J. 281. We had occasion to examine this point freely in the case of Boyce’s Heirs v. Halliday and others, in this court, and deem it unnecessary to reproduce the views which led us to our conclusions. The court may itself sua sponte raise the objection, but, the case having been fully prepared and argued, we see no reason for the exercise of this power. If, however, the objection had been made at the proper time, we think it could not have been sustained. The analysis presented in the argument referred to is probably correct. But the consequences insisted upon, by no means follow. The complainants, other than the administrators, are distributees of Lucy Bunnel the first, of Lucy Bunnel the second, and of Anthony S. Bunnel. The estates of the decedents are all settled, and all their liabilities satisfied. Under such circumstances, the distributees before the court may well maintain the suit, and there is no necessity for subjecting them to the expense, hazard, and delay of having the fund pass into the hands of the administrators, and of devolving upon them the duty of paying it over to the parties ultimately entitled to receive it.
The rights of the heirs to litigate, and to receive directly the fruits of the litigation, has the sanction as well of authority as of
The objection, as stated in the answer, that the bill embraces five distinct cases, is also untenable. No definite rule can be laid down upon the subject of multifariousness. Every case is governed by its own circumstances. The question is to be decided according to the sound discretion of the chancellor. He is to be careful not unnecessarily to split up causes, multiply suits, and increase the expense of litigation. He is to be equally careful not to oppress the defendant and embarrass the administration of justice, by allowing causes to be united which have no necessary connection. Campbell v. Mackay, 1 Mylne & C. 603; Gaines v. Chew, 2 How. [43 U. S.] 619; Story, Eq. Pl. § 284. The authorities as to what constitutes multifariousness are numerous and conflicting. Mr. Justice Story says: “The result of the principles to be extracted from the cases on this subject seems to be, that where there is a common liability — -a common liability in the defendants, and a common interest in the plaintiffs — different claims to property, at least if the subjects be such as may without inconvenience be joined, may be united in one and the same suit.” Story, Eq. Pl. § 533. Here the complainants all claim under two common sources of title, Major Stoddard, and his sister, Lucy Bunnel. They claim against a common trustee, made such, by a contract and conveyance, executed by Lucy. They assert that a joint wrong has been done to them, or those whom they represent, by the defendants, involving the trust property, and they claim a remedy against both of them. The case is clearly within-the rule laid down by Judge Story. The-best considered authorities are equally decisive. Brinkerhoff v. Brown, 6 Johns. Ch. 139; Fellows v. Fellows, 4 Cow. 683; Shields v. Thomas, 18 How. [59 U. S.] 253; Fitch v. Creighton, 24 How. [65 U. S.] 161; Attorney General v. Cradock, 3 Mylne & C. 96; Mix v. Hotchkiss, 14 Conn. 42; Campbell v. Mackay, 1 Mylne & C. 622; Salvidge v. Hyde,. Jac. 151, 5 Madd. 138.
XII. The objection that there is a mis-joinder of parties plaintiff is sufficiently answered by what has been said in this connection upon the subject of multifariousness. This objection also comes too late. “If there-is misjoinder of parties as plaintiffs, all the defendants may demur; . . . and in case of misjoinder' of plaintiffs, the objection ought to be taken by demurrer; for if not so taken, and the court proceeds to a hearing on the merits, it will be disregarded, at least if it does not materially affect the propriety of a decree.” Story, Eq. Pl. § 544. See, also, Raffety v. King, 1 Keene, 601; Morley v. Lord Hawke, 2 Younge & J. 520. But if the objection had been made in season it could not have been sustained.
XIII. Our attention has been called to alleged variances between the allegations of the bill and the proofs. We recognize the-principle that they must substantially agree. A party can no more recover upon a case-proved, but not alleged, than upon a case alleged, but not proved. Foster v. Goddard, 1 Black [66 U. S.] 518. We find no variances in this case which we deem material. The allegations are proved to .a sufficient extent to sustain the bill. Gresl. Eq. Ev. 139, 241, 242; Taylor v. Benham, 5 How. [46 U. S.] 277; Matthew v. Hanbury, 2 Vern. 187;-Sacket v. Hillhouse, 5 Day, 551; Hooper v. Holmes, 3 Stockt. [11 N. J. Eq.] 125; Baldwin v. Ely, 9 How. [50 U. S.] 580; Reynell v. Sprye, 13 Eng. Law & Eq. 102.
XIV. It is insisted that, as the validity of the deed of confirmation set up in the answer, was not put in issue by an amendment of the bill, it cannot be answered in the present state of the pleadings. Our opinion is that the charging part of the bill should
XY. An equitable bar arising from the statute of limitations and lapse of time is set up by the defendants. The counsel upon both sides have stated fully and correctly the principles settled by numerous adjudications upon the subject. They are exhaustively examined by Chancellor Kent in the case of Kane v. Bloodgood, 7 Johns. Ch. 121. We do not propose to extend this opinion, already too long, by a discussion of the subject. We shall content ourselves with stating, as succinctly as may be, our conclusions, and the grounds upon which they rest. Henry Stoddard was a trustee in a direct trust. He is liable for his malversations, and the principle of the bar, in such cases, has no application. As Chancellor Kent said in Goodrich v. Pendleton, 3 Johns. Ch. 390, it would be a waste of time to look for authorities in support of such a proposition. We have found that Asa occupied such relations, that the same principles must be applied to his dealings with the cestui que trust as to those of the trustee himself. They united in a wrong whereby the cestui que trust lost, and Asa acquired, their property. Can he, any more than the trustee, avail himself of the protection of the bar? The supreme court of the United States has said: “In general, length of time is no bar to a trust clearly established to have once existed, and where fraud is imputed, length of time ought not to exclude relief. Prevost v. Gratz, 6 Wheat. [19 U. S.] 481. Within what time a constructive trust will be barred must depend on the circumstances of the case. Boone v. Chiles, 10 Pet. [35 U. S.] 177. There is no rule in equity which excludes the consideration of the circumstances, and in a case of actual fraud, we believe no case can be found in the books, in which a court of equity has refused to give relief in the lifetime of either of the parties upon whom the fraud is proved, or within thirty years after it has been discovered or becomes known to the parties whose rights have been affected by it.” Michoud v. Girod, 4 How. [45 U. S.] 561. Chancellor Kent said: “The defendant is charged with a breach of his trust, and with fraud in the execution of it. These charges formed an equitable bar to the plea of the statute, and they ought to have been fully, particularly, and precisely denied in the answer put in as an auxiliary to the plea.” Goodrich v. Pendleton, 3 Johns. Ch. 388. These authorities are decisive. The bar insisted upon by the defendants does not exist.
' We have not overlooked the other considerations bearing upon the subject, to which our attention has been called by the learned counsel for the complainants. We will briefly advert to them. First. If such a bar could arise in this case it could be only after the expiration of the statutory period, computing from the time of notice to the injured party. The burden of proving notice-rests wholly upon the party alleging it. Shannon v. White, 6 Rich. Eq. 96; Blair v. Bromley, 5 Hare, 558; Sears v. Shafer, 2 Seld. [6 N. Y.] 268. Saying nothing of the sufficiency of proofs as to Amasa, Lucy, and Anthony Bunnel, in regard to which we express no opinion. There is none whatever as to Alvah and Mrs. Bronk. Second. The remedy sought is in part, at least, to reach the resal estate, covered by the trust deed, still in the hands of the defendants, either for the purpose of taking it in specie upon the principle of election, or to have the trust executed upon it by Henry Stoddard or by another trustee, substituted in his place by reason of his unfaithfulness. If any part of the property has been transmitted into other property, or has gone into the hands of strangers, witn notice, the cestui que trust can pursue it as far as it can be traced in our case, and as far as it has gone with notice in the other. And if, after it went into the hands of a bona fide holder, it was re-acquired by either of the defendants, the right to lay hold of it for the purposes of the trust at once recurred to the complainants, and may be enforced in this suit as a part of their remedy. These principles are applied in equity and in law. Oliver v. Piatt, 3 How. [44 U. S.] 401; Taylor v. Plumer, 3 Maule & S. 562. In this view the time necessary to create a bar by analogy would be twenty-one years. Third. If the vendors were deprived of their property by the joint fraud of Henry and Asa, the transactions of Asa with the vendors can afford Henry no protection. He must account for the trust property as if those transactions had not occurred. Attwood v. Lloyd, 3 De Gex & J. 614; 1 Bob. (Va.) 120. As to him there can be no bar; in his case the principle certainly does not apply. We prefer, however, to leave our discussion of this point wholly upon the ground first indicated, where we placed it.
We think the complainants are entitled to a decree. The case will be referred to a master, and all other questions will await the coming in of his report.