Caldwell v. Sigourney

| Conn. | Jun 15, 1848

Lead Opinion

Storks, J.

No exception has been taken before us to the exclusion of the testimony in regard to the possession of the land released to Lloyd, or the charge of the court below as to the effect of his promise to avoid the statute of limitations. The first was plainly correct; and the other is sanctioned by repeated decisions of this court. Clark v. Sigourney, 17 Conn. R. 511. These topics may, therefore, be dismissed, Without further remark.

The execution of the note in question being admitted, the defendant introduced in evidence, 1. A resolution of the General Assembly of this state, passed at its May session in 1795, appointing a committee, with power to sell and convey all the right, title and interest of the state, juridical and territorial, in and to the lands since called The Connecticut Western Reserve, under certain restrictions not necessary here to be noticed, except that it was to be all sold together ; and it wa;s admitted, that in pursuance thereof, the said committee sold the same, and on the 5th day oL September 1795, executed to the purchasers conveyances thereof.

2. Articles of association and agreement, entered info September 5th, 1795, between the persons concerned in said purchase, by which it was agreed, among other things, that they should be called The Connecticut Land Company ; that' the deeds executed to said purchasers, should be retained, by a committee appointed by the applicants for/ purchasing said land, until the proprietors thereof should convey in fee their respective shares in said purchase to John Caldwell, Jonathan Brace and John Morgan, and their survivors, to be by them held in trust for such proprietors, and disposed of as directed and agreed in said articles; and that when the Indian title to said land should be extinguished, and the land surveyed as therein provided for, the said trustees, or a majority of them, should convey to each of said proprietors, or any number who should agree, his or their proportions or right therein, in sever-alty ; the mode of dividing said property being also provided for in said articles. This embraces substantially all the powers conferred and duties imposed on said trustees, by said articles ; and nothing further is contained in them, which is material to this case.

3. A conveyance by release, made September 5, 1795, by said purchasers from the state, to the said persons named as trustees, of the said property, in trust for the benefit of said purchasers and their associates, and their respective heirs and assigns, according to the terms, provisions, restrictions, covenants and agreements contained in the said articles of agreement ; to which reference is expressly made in said conveyance, in the same manner as if they were therein recited at full length.

4. Minutes of a meeting, and conceded to be the last, of the said Land Company, held January 5, 1809, from which it appeared, that the property of said company was then divided between the proprietors, in the manner therein mentioned.

5. A deed of the 23d March 1836, from the said trustees to Thomas Lloyd, in which, after reciting that he had made an application to them, representing that there remains a small piece of vacant land in the town of Cleveland, (of which the boundaries are then given,) they, “ upon said application and representation, and at the sole risk of the said Thomas Lloyd, and without any covenant of seisin or warranty from [them] respecting the title or quantity of said land, and for the consideration of nine hundred dollars, [thereby] release and quit-claim to him, the said Thomas -Lloyd, and to his heirs forever, all the right, title and interest, which [they] as trustees aforesaid, have to said piece or parcel of land, or any part thereof, if any there be not before conveyed by [them.] expressly reserving to all persons any legal right or title which they may have to the same.”

It was admitted, that the 900 dollars mentioned in said deed, as the consideration thereof, was equally divided into three notes, all signed by Lloyd and the defendant, of which one was payable to said Morgan, one to said Brace, and the other was the note in question in this suit.

No other testimony was adduced relating to the defence which we are now considering.

Upon this evidence, the defendant claimed, that the said release to Lloyd and the agreement between him and said trustees in relation thereto, was a breach of the trust on which the conveyance was made to the latter, by the proprietors of The Connecticut Land Company, and a fraud on the rights of said proprietors ; and that, therefore, the note in suit, given in consideration thereof, was void ; and that the court should so instruct the jury.

This was not a claim that the court should submit this evidence to the jury, for them to find, as a question of fact, whether there was any such breach of trust or fraudulent agreement; but the court were requested to instruct them, that the legal effect of this evidence was, to show that the note was in fact given in consideration of an agreement between Lloyd and said trustees, which, in connexion with the execution of the release to the former, constituted a breach of trust on the part of said trustees, and a fraud on the rights of cestui que trusts, the proprietors of the Land Company. The defendant presented this claim to the court below, as a mere question of law, on the face of the evidence, and requested the judge to dispose of it accordingly; and as such it is now presented before us for revision.

We think, in the first place, that in order to sustain this claim., it was necessary that the evidence on which it was made, should be such that the court below could judicially decide, that such proprietors had some interest in the land released to Lloyd, when the deed was executed to him by the trustees; because, if they had not then any such interest, the tendency or effect of the transaction out of which the note in question originated, could not have been to injure or-defraud them ; and therefore, the ground on which this claim was placed, would fail. If they had any such interest, it was an equitable title to the land of which the trustees held the legal title for their benefit. If they had no such equitable interest, they could not be injured, by any conveyance made, or attempted to be made, by the trustees. A breach of trust respecting this land, on the part of the trustees, on the ground of which alone the defence, which we are now considering, was placed, necessarily implies, that they had the legal title to it for the use of the proprietors ; and that they had unlawfully disposed of it, for other purposes than those for which it was vested in them. Of course, no such breach of trust could appear in this case, unless it appeared that the land released to Lloyd was subject to such use in the hands of the trustees.

But we are of opinion that the judge below could not properly have taken it on himself to decide, that the evidence introduced by the defendant, by legal construction, proved, that those proprietors ever had any interest in said land, or that consequently, Caldwell, Brace and Morgan ever held it in trust for them. There was plainly nothing which tended to show this, unless it was the release to Lloyd, in connexion with the notes given for the consideration of it. Whether, if it were to be submitted as a question of fact to the .jury, for them to find, from this evidence, whether there was such an interest, the release and notes would be admissible for the purpose of showing it, it is not necessary, in the point of view in which the case is presented to us, to determine. That would be a very different question from the one now before us. The enquiry here is, not whether there was evidence which was relevant, or conduced to prove that fact, but whether the release and notes legally imported of themse!vesj or furnished evidence conclusive in itself, independent of any further testimony, to prove that the proprietors or trustees had any interest in the land released. We are clearly of opinion, that they had not that effect; and therefore, that the court below could not dispose of the case on the evidence of the defendant, as a question of law ; it not being its province to find facts from evidence inconclusive m its nature, but only to decide upon facts admitted, or found by the jury or other- - wise, or proved by testimony which the law deems conclusive. A mere release of land, in the ordinary form of what we term, quit-claim deeds, does not import that the releasor has any estate or interest whatever in the property : and we are inclined to think, that such an instrument, or the fact of its execution, would not, unconnected with any other evidence, conduce to prove, for any purpose, or between any parties, that he had such an interest. It is not in fact, nor are we prepared to say that it would be deemed in law, a declaration to that effect. But the release to Lloyd, in this case, is so carefully expressed in regard to the interest of the re-leasors in the land, that it is evident that it was their special object to exclude the idea that they intended to assert that they had any such interest: and it would seem to be a palpable perversion of their meaning, to attach to it, and conclusively too, a different import; and we are aware of no principle that requires it. And with respect to the notes executed for the consideration of that release, they at most only constitute evidence from which an inference might be derived on this subject, but which it was not the duty of the court to deduce.

In the next place, if it be conceded, that the law is so, that the note in question is void, if given in pursuance of a fraudulent agreement between the trustees and Lloyd to divert the trust property held by the former from the purposes of their trust; and it is also conceded, that the land released to Lloyd was a portion of that which was conveyed to said trustees in trust for said proprietors; and that they, contrary to the terms of said trust, conveyed it to Lloyd, on an agreement that the purchase money should be paid to the trustees, or either of them ; it would not, in our opinion, be a case where the court, on the evidence introduced by the defendant, could, as a mere conclusion of law, decide, that the transaction wás fraudulent, and the note consequently void. Such conveyance would indeed be a departure from the terms of the trust; but it would not, for that reason alone, necessarily, be unlawful or fraudulent as to the cestui que trusts. Whether it would be so, would depend on the circumstances attending it. It might have been given in pursuance of an agreement for that purpose between the grantee and cestui que trusts, in which case, so far from being fraudulent, it would be not only entirely innocent, but the performance of * duty on the part of the trustees. Or it might have been executed under a great variety of other circumstances, which may be supposed, which would make it lawful. Neither would the fact that payment of the consideration was to be made to the trustees, make the transaction necessarily and in law fraudulent: indeed, that would not be inconsistent with an intention to account for it to the cestui que trusts.

We therefore think, that this case did not present a question of legal construction upon the evidence for the court to decide ; but at most, only a question of fact, to be submitted to the jury, as to the agreement out of which the note in question originated, and the intention with which it was made. That question was the one which the court below submitted to the jury, namely, whether the deed to Lloyd and the note in suit were given in pursuance of a conspiracy between Lloyd and said trustees to commit a fraud upon the proprietors of the Land Company. On this question the evidence introduced by the defendant was relevant, and it was the province of the jury to determine its weight.

The views which we have thus taken of the principal point made on the trial, renders in unnecessary to examine the other questions which have been argued before us.

The result is, that a new trial should not be granted.

In this opinion Waite, Hinman and Ellsworth, Js. concurred.

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Dissenting Opinion

Church, Ch. J.

dissented on the principal point. In the case of Clark v. Sigourney, in which this note was the subject of discussion before us, 1 concurred in the opinion then expressed, and am now satisfied of its correctness upon the questions then presented and decided. But as I now think, the true nature of the consideration of this note was neither discussed nor determined in that case. We said only that a quit-claim deed, executed at the special request of the grantee, although it conveyed no title, constituted a legal consideration of a note given for the purchase money — that it was a bargain of hazard, and the responsibilities were not to be changed, by the result.

On the present hearing, the bearing of other facts upon the transaction in question, is urged upon us; and I cannot resist the impression, that they show an infirmity in this note, which the law cannot sustain or approve. I do not know that I dissent from the general principles now laid down by the court, as controuling its decision in this case ; but it seems to me, that they do not reach the difficulty, and are not the true principles upon which this defence essentially rests.

Caldwell dnd others were trustees of the Connecticut Land Company, and the irpowers and duties are defined, by the articles of association, and the indenture between the trustees and the proprietors of the Western Reserve. By these, the trustees have no power to execute deeds, except to proprietors, or in conformity to the orders and direction of the board of directors of the company. Indeed, they were only instruments or agents, by whom the territory was to be aparted in severalty, that each proprietor might receive his several legal title.

These trustees, in executing the deed to Lloyd, acted only in their fiduciary capacity, and they so declare on the face of the instrument itself, although they describe themselves as trustees of the late Connecticut Land Company. It no where appears, however, that that company had been dissolved; and if it had been, then the whole action of Caldwell and others professing to be trustees in this transaction, was a farce, if not a fraud; and if any land remained undisposed of, as stated in the deed, each proprietor still had an interest in it, notwithstanding the dissolution of the company, which these individuals had no right, legally or morally, to dispose of, and pocket the avails.

Although the deed was executed by these gentlemen, as trustees, yet the notes which they received as the consideration, were of a different import. These were executed to each trustee, severally, and, as is conceded, for his own individual benefit, and as it would seem, either to induce them to perform a trust duty for a large compensation, which they were bound to perform without a price, or as a persuasive to violate a duty, by executing a conveyance in a capacity and under a pretence, in which they had no right to act. If a public officer has no right to demand a compensation or reward for the performance of an act of duty, beyond the fixed fees of office, it would be a violation of the same salutary principle, to recognize in trustees appointed for a great public purpose, as these essentially were, a right to stipulate for such a reward as was here promised. 1 Rolle’s R. 313. Latch's R. 54. W. Jones, 65. 1 Hawk. P. C. ch. 68. sec. 4. Lane v. Sewall, 1 Chitt. R. 175. (18 E. C. L. 61.) Dew v. Parsons, Id. 295. (18 E. C. L. 87.) Morris v. Burdell. 1 Campb. 218. Bilke v. Havelock, 3 Campb. 374. Preston v. Bacon, 4 Conn. R. 472. Hatch v. Mann, 15 Wend, 44.

It was suggested in the argument, that this transaction was to be considered as a private affair between Lloyd and the trustees, in which the Land Company had no concern, because it did not appear certainly, that the land described in the deed belonged to the company. We cannot presume this: the character of the entire transaction forbids it. On the contrary, the language and import of the deed, as well as the large sum paid, leads me to the conclusion, that the object was, to transfer a title, or at least to prevent the Land Company, or the proprietors, from claiming a title ; and such would be the legal effect of the deed, if it was in truth executed under the powers existing in the trustees. If this was not its purpose and effect, then the execution of the deed was a mere frivolous ceremony, which cannot be said to furnish a good consideration for the note. 1 Sw. Dig. 208.

Some legal consequence was intended to follow from this deed ; and it must be treated, as I think, as a dealing with trust property, by trustees, not for the benefit of the cestui que trust, but for their own individual profit, and for a purpose not authorized by the nature and object of the trust. And if it had no other effect, its tendency was, to throw a cloud and embarrassment about the rights of the Land. Company, or the proprietors of the Reserve, which was unnecessary and improper.

The power of a trustee exists only for the benefit of the cestui que trust; and he is not permitted, on his own account, to speculate with the trust estate, even if no actual injury is shown to result. His duties, which are fiduciary, are quite inconsistent with such a practice. Courts, especially in modern times, have taken care to guard, with great caution, the rights of those whose interests have been placed under the direction and controul of others, and have not permitted trustees’ guardians> executors, &c., to place themselves in situa-where inviting opportunities are afforded for a dangerous conflict between duty and self-interest. Such persons may not taj{e advantage of the position which they occupy, to obtain personal benefit to themselves. This is a conservative principle, which may be more safely extended than relaxed in its application. Trustees, guardians and others, standing in these ’confidential relations, have all the means, both of knowledge and power, in their owe hands, which are neither known nor possessed by those for whom they act, and whose exclusive interest they are bound to protect. Every thing done by them ought to be transacted in the most open and frank manner. But, in the case before us, we have an instance, in which the real purpose of the parties is involved in mystery. We see here a deed, executed professedly in execution of a trust; and yet the consideration is put into the pockets of the trustees, without any explanation. And although the cestui que trust are not here the complaining parties, and perhaps because they know nothing of the affair ; yet such a transaction, in my judgment, is a violation of legal policy, and should not receive the sanction of this court, nor be holden to constitute a good consideration of the note in suit. Schieffdin v. Stewart, 1 Johns. Ch. R, 620. Brown v. Rickets, 4 Johns. Ch. R. 303. Ringo v. Binns, 10 Peters, 270. Michaud v. Girad, 4 Howard, 504. Bailey v. Lewis, 3 Day, 450. Nichols v. Ruggles, Id. 145. Faucett v. Whitehouse, Russ. & Mylne, 132.

New trial not to be granted.