Clay v. Layton

134 Mich. 317 | Mich. | 1903

Hooker, C. J.

(after stating the facts). Complainant contends:

(1) That the acts of the deceased constituted him a trustee for the several persons named in the papers executed by him.

(2) That, if not, the deeds and assignments should be held to operate as a testamentary disposition of the property therein described.

Counsel for the defendants discuss three questions, into which they say that the case should be resolved, viz.:

“(1) Are the checks, including the one to Mrs. Freitag, legal transfers of the funds in the bank, and are the payees named therein entitled to draw the money from the bank thereon, or are they void ?

“ (2) Are the transfers of the real estate by way of deed and the transfers of mortgages by way of assignments valid and legal transfers of the property attempted to be transferred to the persons named therein, or are they void for want of delivery ?

“ (3) Do the deeds and the assignments of mortgages operate as a will ? ”

We can have no doubt that the papers found in the tin box indicate the deceased’s wishes as to the disposition of his property. Had he seen fit during his life to deliver the deeds and assignments to those for whom they were intended, the title would have passed, and they would have become valid gifts. Had he made a formal will directing such disposition, the law would carry out his expressed wishes. But he did neither.

1. Did the deceased hold the property in trust ? This cannot have been, unless he devested himself of the equitable title to the property, and vested it in others. He executed deeds, and assignments of mortgages of real estate, and set them aside in packages for the respective parties. He drew checks upon his banker, and made the same disposition of them. He kept all of these in his own possession up to the time of his death. Clearly, if this was all that he did, these were not gifts, for want of delivery. See Young v. Young, 80 N. Y. 422 (36 Am. Rep. 634). Indeed, it is not claimed that they were gifts. The case last cited was much like the present, and, while it was intimated that a delivery to a trustee would be sufficient to complete a gift inter vivos, it was said that a trust would not be created except by acts or words, unequivocal, implying that the person held the property as trustee for another; and, while it is not necessary that the declaration of trust be in terms explicit, the donor must have evinced by acts which admit of no other interpretation that such legal right as he retains is held by him as trustee for the donee, or, as said in Milroy v. Lord, 4 De G., F. & J. 264, “ The settler must transfer the property to a trustee, or declare that he holds it himself in trust.” We have held that a donor may be a trustee for the donee. See O’Neil v. Greenwood, 106 Mich. 572 (64 N. W. 511). But it does not follow that the donor of an uncompleted gift is a trustee in all cases. In the case of Young v. Young, supra, attention is called to two cases where the courts practically-held such a rule. Morgan v. Malleson, L. R. 10 Eq. Cas. 475; Richardson v. Richardson, L. R. 3 Eq. Cas. 686. But the writer of the opinion says:

“In speaking of these cases in Richards v. Delbridge, L. R. 18 Eq. Cas. 11, Sir George Jessel, M. R., says:

“ ‘If the decisions of Lord Romilly [in Morgan v. Malleson] and of Vice Chancellor Wood [in Richardson v. Richardson] were right, there never could be a case where an expression of a present gift would not amount to an effectual declaration of trust.’

“And it may be added that there never could be a case where an intended gift, defective for want of delivery, could not, if expressed in writing, be sustained as a declaration of trust. Both of the cases cited are now placed among overruled cases. ”

He continues:

“In Moore v. Moore, 43 L. J. Ch. (N. S.) 623, Hall, V. C., says:

‘“I think it very important, indeed, to keep a clear and definite distinction between these cases of imperfect gift and cases of declarations of trust, and that we should not extend, beyond what the authorities have already established, the doctrine of declarations of trust, so as to supplement and supply what otherwise would be mere imperfect gifts.’

“If the settlement is intended to be effectuated by gift, the court will not give effect to it by construing it as a trust. If it is intended to take effect by transfer, the court will not hold the intended transfer to operate as a declaration of trust, for then every imperfect instrument would be made effectual by being converted into a perfect trust. Milroy v. Lord, 4 De G., F. & J. 264.

“The case of Martin v. Funk [75 N. Y. 134] and kindred cases cannot aid the respondent. In all those cases there was an express declaration of trust. In the one named, the donor delivered the money to the bank, taking back its obligation to herself in the character of trustee for the donee; thus parting with all beneficial interest in the fund, and having the legal title vested in her in the character of trustee only. No interposition on the part of the court was necessary to confer that character upon her; nor was it necessary by construction or otherwise to change or supplement the actual transaction. None of the difficulties encountered in the present case stood in the way of carrying out her intention. It was capable of being executed in the form in which it was expressed.

“The question whether a remainder in a chattel may be created and given by a donor by carving out a life estate for himself and transferring the remainder, without the intervention of a trustee, is learnedly discussed in the appellant’s brief; but the views we have expressed render it unnecessary to pursue that inquiry. We are satisfied that it is impossible to hold that the facts as they appear establish a valid transfer of any interest in the bonds in question to the donee, and that the attempted gift cannot be sustained as a declaration of trust.”

Accordingly, we have held that an expression of an intention to pay another $1,000, in accordance with the expressed wish of the husband of the person expressing such an intention, did not create a trust. Hamilton v. Hall’s Estate, 111 Mich. 291 (69 N. W. 484). It was there said that, “to create a trust, where the donor retains the property, the acts or words relied upon must be uneqivocal,” — citing 27 Am. & Eng. Enc. Law, 56; and that ‘ ‘ this rule applies with peculiar force where it is claimed that the donor constituted himself trustee.” As said there:

“The mere declaration of an intention or purpose to create a trust, which is not carried out, is of no value, and a mere agreement or statement of an intent to make a gift in the future is not sufficient. It must be such that, from the time it is made, the beneficiary has an enforceable equitable interest in the property, contingent upon nothing except the terms imposed by the declaration of the trust itself.”

See, also, Peninsular Sav. Bank v. Wineman, 123 Mich. 257 (81 N. W. 1091).

These cases show that the mere making of the deeds and checks and keeping them in possession are as far from creating a trust as they are from making a completed gift inter vivos. We must, therefore, look at these and other writings, and the acts and words of the deceased, for a declaration of a trust, or its equivalent, failing to find which we - must say there was no trust. Counsel call attention to the directions given Mr. Clay; also deceased’s actions in two instances in dealing with the property, where he is said to have accounted for certain moneys collected upon two mortgages previously assigned. These instances appear from memoranda of the deceased found in two of the envelopes. They have been quoted, but are repeated for convenience:

“Adrian, June 10th, 1897.

‘ ‘ As the Lehman mortgage has been assigned to Charles Herbert Whitney, of Baker City, Oregon, and Lehman paid $200 on it, I make a check for that amount, payable to the order of said C. H. W., to take the place of the $200 indorsed on that mortgage; the check to be sent to him in case of my death at once, by whosoever has charge of my business.

“A. Whitney.”

“This mortgage was assigned to Mary Waller Bohn, but soon after Mr. ICrigger paid it. I therefore make my check payable to her, so in case of my death she can get the money that was paid on the mortgage as principal, viz., $100.

“A. Whitney.”

So far as these two transactions are concerned, the action of the deceased is as consistent with defendants’ theory as complainant’s, and therefore should not be said to declare a trust.

Coming next to the conversations with Clay, decedent’s statements to him and others that he had disposed of his property as he wanted it to go are as consistent with the idea that he had made a will (as he had at one time apparently done), or that he had parceled it out in the way that the record shows, to be given effect after death, if not changed, as that he intended Clay to understand that he was holding it as trustee, which he could easily have said if it was his design. See Young v. Young, 80 N. Y. 435 (36 Am. Rep. 634), for a parallel case on this point.

We will next examine the contents of the envelopes.

No. 1. In this deceased says: “In addition to the inclosed deed, I want each one named in it to have the following sums in money, and I have made checks for the amounts, to be delivered to them at my death.” He concludes as follows: ‘ ‘ Mr. Clay, or whosoever has these papers, deliver them to the parties at my death.” Clearly, he did not hold the checks in trust; and why should not this fact, and the language used, characterize his holding of the deed inclosed and withheld from the grantees ? This is certainly no declaration of trust.

No. 4. “ This is to be handed to the officers of the Oak-wood Cemetery Association in case of my death.” This envelope contained two checks. Why were these retained, if he intended to pass title to the money P

■ No. O. The contents of this envelope were to be “sent to Emily Jane Van Buskirk, in lieu of anything in my ivill. ” This indicates that he had made or contemplated a will, and is not consistent with the idea of a trust.

No. 7. Contents “to be delivered to him at the time of my death. ”

No. 8. A similar provision is found here.

No. 15. “At my death, ivhosoever has charge of my matters, hand this to.Mary Bohn.” This was one of the cases where he subsequently made a collection, hereinbefore mentioned, and substituted his check for the security paid.

No. 16. Here he “gives and bequeaths” a bond, “to be handed to her at my death, without further ceremony, by ivhosoever has charge of my estate.” He afterwards added another bond, to be delivered to her in like manner. The words “ give and bequeath ” are suggestive of a future, rather than a present, delivery, and is not appropriate language for a declaration of. trust.

No. 17. “Note of S. N. Dada, to be sent or given to him at my death.” And again: “In case of my death, these notes inclosed are to be given to the parties who made them.”

There is not any evidence of a trust in these papers. On the contrary, it seems plain that the deceased proposed to keep them until he died. The letters contained in envelopes A, B, and C do not indicate that the deceased supposed that he held this property in trust. On the contrary, they direct distribution after death, and’ one, found in Exhibit B, states that he “left matters in this form to avoid going into probate, and this course is in all respects my will and wish; ” while in another he discusses Mrs. Freitag, and directs whoever shall have charge of his matters to see to it that she gets what he intends for her, and, “if necessary, spend all the rest of my estate to that end. This is cogent evidence that he proposed to keep control of his estate during life. The letter in Exhibit 0 has all of the attributes of a will, except a proper execution, as far as it goes. It contains nothing in the nature of a declaration of trust as to the articles mentioned.

Counsel rely, in their contention that this property was held in trust, upon the cases of Ellis v. Secor, 31 Mich. 185 (18 Am. Rep. 178), and O’Neil v. Greenwood, 106 Mich. 572 (64 N. W. 511). The former was a trover case, and the defense was based upon a gift causa mortis. The circumstances in that case show that the donor was in extremis, and did all that she could to express a present intention to make a gift, and this was held sufficient to defeat trover brought by the administrator. The case of O’Neil v. Greenwood was much stronger than the present case, and there was strong evidence of an explicit declaration of trust.- No trust was created in the present case, for there is nothing which indicates an intention that effect should be given to any of the papers before his death.

This discussion has not taken into consideration the question whether a trust in real estate can be created in the way claimed, under our statute of uses and trusts.

2. Can the deeds and assignments of mortgages be treated as a testamentary disposition of the property ? Counsel for the complainant appears to concede that the checks cannot be so treated, and there is nothing upon the faces of the deeds and assignments to indicate that they were not to take immediate effect, which they would have done had they been delivered. We must look, then, to other circumstances to show the testamentary character, and there is plenty of evidence tending to show that intent, provided it can be said to be such evidence as the law accepts. Thus we have seen that most of the envelopes contained memoranda showing an intent that these gifts should be given effect after death, and the letters to Clay contain similar indications; but no writing which contains such evidence was executed in conformity to the statute of wills. Had such memoranda not been accompanied by the deeds and assignments, no one would claim that they could be given effect as wills; and whatever force is to be given to them must come from the fact that formal deeds and assignments, duly witnessed, were inclosed with them. We think it obvious that no paper not executed in conformity to our statute can be considered a will, and, with the exception of the deeds and assignments, these papers were not. Whether the deeds and assignments may be so considered depends on the intent of the deceased and the character of the proof disclosing such intent. If the intent must appear upon the face of the instruments themselves, we cannot hold them to be testamentary, for it does not so appear; but, on the other hand, if the question of intent is susceptible of proof by parol, and is permissible where the instrument is unambiguous upon its face, it will be easy to infer such intent.

The'cases may be divided into three classes:

(1) Those in which the testamentary intent is clearly deducible from the writing.

(2) Those where the instrument is ambiguous, or of doubtful meaning.

(3) Those where there is nothing to indicate a testamentary intent, but, on the contrary, the instrument is in terms plainly a deed.

In the first class of cases there is no difficulty in holding, the document to constitute a will, if properly executed. In the second class the instrument may doubtless be interpreted in the light of the circumstances. In cases of the third class (and it is in this class that the documents properly belong), may the instrument be contradicted, and determined to be a will, upon extrinsic evidence of an intent on the part of the deceased that it be given effect by delivery upon his death? This is really the only important question in the case, for, answered in the affirmative, we have ample evidence to justify us in calling the instruments a will, while a negative answer will require us to treat them merely as undelivered deeds, without force.

We have been unable to find a Michigan case directly in point. Bigley v. Souvey, 45 Mich. 370 (8 N. W. 98), is a case of the first class. In Lautenshlager v. Lautenshlager, 80 Mich. 285 (45 N. W. 147), the writing contained evidence indicating an intent that it was to take effect at death, and, like Ferris v. Neville, 127 Mich. 444 (86 N. W. 960, 54 L. R. A. 464, 89 Am. St. Rep. 480), it belongs to the second, if, indeed, it does not belong to the first, class. The remaining case of Lincoln v. Felt, 132 Mich. 49 (92 N. W. 780), arose over a lost deed. The case went to the jury upon the question whether the decedent’s intent was that the gift should take effect only after death, and that such intent was expressed in the instrument in some appropriate form. The jury found it to be a will, and the order entered in accordance with the verdict was affirmed. Clearly, this was as favorable instruction as the contestants could ask; but it is obvious that the question before us now was not passed upon.

The proposition is to show that certain instruments, which could only become effective by delivery, can be made effective by calling them by another name, and giving them an interpretation which their words do not warrant, through parol evidence tending to show that such was the decedent’s intention. The authorities cited in support of this contention are the Lautenshlager Case, hereinbefore mentioned, which does not support it, and a statement in 29 Am. & Eng. Enc. Law, at page 158, where it is said that “ evidence is admissible to show that a deed or other instrument of gift, which on the face of it is not testamentary, was not intended to operate until the death of the person executing it; to show that an instrument on the face of it testamentary was not written animo testancli; but not to show that the operation of a will absolute in its terms depends upon a condition.” An examination of the authorities cited in support of the first proposition will show that they are for the most part cases where the instrument was reasonably open to two constructions, and related to personal property. Thus in Cock v. Cooke, 1 L. R. P. & D. 241, a paper was executed in the following language: “I wish Mym Sister, Louisa Cock, * * * to have my Schering (Charing) Cross bank book for her own use.” Proof that it was executed in contemplation of death, and as a bequest, was admitted. It was clearly open to that construction upon its face, and can hardly be said to have been a valid present gift or assignment. In the Goods of Morgan, 1 L. R. P. & D. 214, the instruments all contained clauses directing that the conveyances were not to take effect until after the testator’s decease. Nothing is said in this case about extrinsic evidence. In Robertson v. Smith, 2 L. R. P. & D. 43, the deceased died November 8th, having made a will July 29th, and a codicil October 12th, previous. November 7th he executed a document in the presence of two witnesses, to the following effect, viz.: “I hereby make a free gift to Maria R. of sixty pounds, and to John Y. of fifty pounds, being the sum deposited by me with,” etc. Parol evidence of the situation was admitted to show the intent to make a testamentary gift. In Goods of Coles, 2 L. R. P. & D. 362, the paper was plainly as consistent with the intention of a testamentary disposition as a gift inter-vivos; in fact, more so. The circumstances were shown, and it was held a will. Lister v. Smith, 3 Swab. & T. 282, is not in point upon this question, while In re Goods of English, 3 Swab. & T. 586, is similar to Cock v. Cooke, supra. The instrument considered in Robertson v. Dunn, 6 N. C. 133 (5 Am. Dec. 525), was doubtful upon its face. If the text is construed in the light of these decisions, it does not support the proposition that parol evidence may be offered to show that a deed not doubtful upon its face was intended to have a testamentary effect.

In 1 Underhill, Wills, § 37, it is said:

“The courts, in determining whether an, instrument disposing of real estate is a deed or a will, are guided by the following considerations: If the instrument, whatever its form or the mode of its execution, passes a present interest, which vests from the time of its execution, it will he a deed, though the possession and the enjoyment of the estate granted in it do not accrue to the grantee until a future time. On the other hand, if the instrument, though it is in form a deed, does not convey any vested interest, right, or estate until the death of the person executing it, it will be regarded as testamentary and revocable.

“The employment of language appropriate to either instrument is never controlling. Nor is the belief of the maker or an understanding between the parties interested that the instrument is a will or a deed conclusive upon the court (except when made so by statute), though evidence as to the belief of the parties as to its operation and effect is relevant to show their understanding as to the intention in executing it. The court must take into consideration the language of the instrument, and the circumstances surrounding the parties and attendant upon its execution; and if, from all the evidence, it appears to have been the intention of the maker that the instrument shall have a post mortem effect only, it will be held to be a testament, and not a deed. ”

In discussing the admissibility of parol evidence, the author says:

“ In seeking the intention of the maker of an instrument, the court must, in the first instance, consult the language of the writing itself. The fact that the writing which is presented for probate is testamentary in form is some evidence that it is a will. The form of the instrument is not controlling. The court of probate may go outside of the writing to ascertain its character; not to supply an intention which cannot he found in it, but to ascertain with what intention .the execution of the instrument was accompanied.” Id. § 39.

This plainly implies the correct rule that the writing must be susceptible to such a construction without doing violence to its plain terms, and no amount of parol testimony should authorize a court to vary the unmistakable terms of the instrument alleged to be a will. These papers plainly provide in terms for a present transfer of property, and to show that a different intention existed would be to contradict them, and this cannot be done.

We have examined many authorities where the question involved was whether papers in form deeds were testamentary in character, and it is a significant fact that not one has been found which supports the complainant’s contention. In nearly every instance the question is solved from the writing itself, or, if not, the construction adopted is not contradictory to its provisions, which are open to two interpretations. We cite a number of the cases alluded to: Stevenson v. Huddleson, 52 Ky. 299; Armstrong v. Armstrong, 4 Baxt. 357; Miller v. Holt, 68 Mo. 584; Brewer v. Baxter, 41 Ga. 212 (5 Am. Rep. 530); Fulcher v. Royal, 55 Ga. 68; Williams v. Tolbert, 66 Ga. 127; Worley v. Daniel, 90 Ga. 650 (16 S. E. 938); Goff v. Davenport, 96 Ga. 423 (23 S. E. 395); Hall v. Bragg, 28 Ga. 330; Herrington v. Bradford’s Ex’x, Walk. (Miss.) 520; Wall v. Wall, 30 Miss. 91 (64 Am. Dec. 147); Sartor v. Sartor, 39 Miss. 760; Sewell v. Slingluff, 57 Md. 537; Lauck v. Logan, 45 W. Va. 251 (31 S. E. 986); Wren v. Coffey, (Tex. Civ. App.) 26 S. W. 142; Bowler v. Bowler, 176 Ill. 541 (52 N. E. 437); Robinson v. Brewster, 140 Ill. 649 (30 N. E. 683, 33 Am. St. Rep. 265); Burlington University v. Barrett, 22 Iowa, 60; In re Longer’s Estate, 108 Iowa, 34 (78 N. W. 834); President, etc., of Bowdoin College v. Merritt, (C. C.) 75 Fed. 480; Cates v. Cates, 135 Ind. 272 (34 N. E. 957); Stroup v. Stroup, 140 Ind. 179 (39 N. E. 864, 27 L. R. A. 523); Bromley v. Mitchell, 155 Mass. 511 (30 N. E. 83); Walker v. Jones, 23 Ala. 448; Gillham v. Mus-tin, 42 Ala. 365; Mosser v. Mosser’s Ex’r, 32 Ala. 551; Hall v. Burkham, 59 Ala. 349; Sharp v. Hall, 86 Ala. 113 (5 South. 497, 11 Am. St. Rep. 28); Jordan v. Jordan’s Adm’r, 65 Ala. 301; Crocker v. Smith, 94 Ala. 295 (10 South. 258, 16 L. R. A. 576); Turner v. Scott, 51 Pa. St. 126; Patterson v. English, 71 Pa. St. 454; Knox’s Estate, 131 Pa. St. 220 (18 Atl. 1021, 6 L. R. A. 353, 17 Am. St. Rep. 798); Outlaw v. Hurdle, 46 N. C. 150; Lyles v. Lyles, 2 Nott & McC. 531; Hone v. Van Schaick, 3 N. Y. 538; Hazleton v. Reed, 46 Kan. 73 (26 Pac. 450, 26 Am. St. Rep. 86); Lacy v. Comstock, 55 Kan. 86 (39 Pac. 1024); In re Ogle’s Estate, 97 Wis. 56 (72 N. W. 389); Clarke v. Ransom, 50 Cal. 595; Leaver v. Gauss, 62 Iowa, 314 (17 N. W. 522); Daniel v. Hill, 52 Ala. 430; Frew v. Clarke, 80 Pa. St. 170.

That parol evidence is not admissible to add to, alter, vary, or contradict a will, see the following: 1 Redf. Wills, p. 426, sub. 8, and cases cited, and page 435, sub. 21, page 496, sub. 2, page 501, sub. 10, page 507, note 21; Hone v. Van Schaick, 3 N. Y. 544; President, etc., of Bowdoin College v. Merritt, (C. C.) 75 Fed. 480, syl. 3; Sewell v. Slingluff, 57 Md. 537; Herrington v. Bradford’s Ex’x, Walk. (Miss.) 520; Miller v. Holt, 68 Mo. 584; Armstrong v. Armstrong, 4 Baxt. 357. For a discussion of this general subject, see 19 Cent. L. J. 46.

We have had difficulty in finding a case in which the exact point before us is raised, but it seems manifest that the same rule that forbids the contradiction of an established will should forbid the contradiction of the same instrument as a means of establishing it as a will, when its terms plainly show it to be a deed conveying a present interest. It is only when the writing is of doubtful import that interpretation by the aid of extrinsic evidence becomes necessary, and in such case interpretation, not contradiction, is permissible.

We are reluctantly driven to the conclusion that we cannot give effect to the deceased’s manifest desire, a desire so well established, and so apparently well grounded and just, as to merit our approbation; but we fear that the trite saying that “hard cases make bad law” would be applicable should we sustain the complainant’s contention. To do so would be to override established rules and principles essential to the protection of the rights of heirs.

It remains to refer to the rights of Mrs. Freitag. The record indicates that the papers designed for her were delivered to her, and we do not know that any one disputes it. Being delivered, they became gifts inter vivos, and conveyed title to her. As to the check for $500, we feel justified in finding it tobe based upon a valid and sufficient consideration, and therefore collectible against the estate.

' The parties are all before the court, and we think that her rights should be set at rest by this decree. Otherwise we are of the opinion that the property should be decreed to be assets of the estate, subject to administration in accordance with law. Neither party will recover costs, except Mrs. Freitag. She will recover costs from the estate. The disbursements of the complainant should be allowed him from- the estate.

Decreed accordingly.

The other Justices concurred.