11 S.C. 56 | S.C. | 1878
The opinion of the court was delivered by
This is a complaint in the nature of a bill by a trustee, to have the nature and extent of his interests and duties in' regard to the trust property defined and settled, as against the grantor in trust and the eestuis que trust. It has been erroneously supposed by the Circuit decree that the case is one of interpleader. When one admits himself to be liable to perform some act, to the performance of which others make conflicting claims, he may interplead them to ascertain to whom the duty is due. But that is not this ease, for the conflict does not depend on the fact that each party claims the same duty from the trustee; on the contrary, the demands of the grantor and the eestuis que trust, are of separate natures, claiming the performance of acts of a different character on the part of the trustee. From the character of the demand it will appear to bear a closer resemblance to a bill for the specific performance of a parol contract for the sale of land in part carried out, than to a bill of interpleader.
The complaint alleges that the defendant, C. B. Jones, being indebted by judgment to the defendant, Mrs. Davie, in an amount exceeding $6000, they agreed to compromise such indebtedness on the following terms: Jones was to pay to Mrs. Davie $500, and to convey to her the land described in the complaint, by way of mortgage, to secure the payment of $1000 more, in installments, with interest at an agreed rate; Mrs. Davie to assign the judgment for the protection of Jones. It is alleged, however, that Jones, without consultation with Mrs. Davie, changed the plan of arrangement in the following manner:
Mrs. Davie* alleges that she was induced to execute such a deed, but with the understanding that it should be retained by the trustee, and not recorded until that portion of the agreement that related to the payment of the $1000 had been complied with. The effect of this agreement will be hereafter considered, but it will be assumed for the present purpose that its object was to render the deed inoperative until the sum of $1000 was paid, or secured to be paid, according to the terms of the compromise.
Defendant Jones contends that the terms of the original agreement were, by mutual understanding, changed to such extent that the land in the hands of the trustee was to be actually discharged from the lien of the judgment of Mrs. Davie upon her receiving the cash payment of $500, she to look to her judgment alone for the balance of her demand. This statement of a new contract appears to be incomplete, as it leaves it quite in doubt what was to become of the balance of the judgment, over and above the $1000 secured by it and the credits upon it. This being the nature of the controversy, the exact question is, whether certain acts are required to be performed by the plaintiff, or by the defendant, Jones, before the deed is operative, so as to accomplish the objects intended by the trust expressed in it. In such a case it cannot be doubted that a trustee may come into a court of equity to have his rights and duties defined, and for a determination whether some act on the part of a defendant is not essential to give stability to the trust, and this does not militate
It is clear that the nature of the controversy demands the interposition of a court of equity in behalf of the trustee to relieve him from the embarrassments of his position, and we find no reason for the severe strictures on his conduct pronounced by the Circuit decree.
There is no controversy as it regards the terms and objects of the original agreement; the controversy relates wholly to the question whether any rescission or modification of that agreement has been made by the acts of the parties. There are two modes under the facts of the case by which such a rescission or modification might have arisen — first, by the mutual agreement of the parties upon consideration ; or, second, by waiver on the part of Mrs. Davie of the conditions in her favor, by the acceptance of less than the contract called for, as the consideration of doing that which she was called on to perform as her part of the agreement. Has either of these cases arisen ?
It should be remarked that the contract and dealings between the parties rest wholly on a valuable consideration. The creation of a trust does not appear to have been contemplated by the original contract, unless a secret trust was intended by defendant, Jones, in the event that he should require the judgment to be assigned to a third party, intending thereby protection to himself as against his creditors.
As such a trust is not a necessary inference from the terms of the original'contract as stated, and has not gone and need not go into effect, it is unnecessary to consider its possible effect as an element of the contract. As far as the original contract was concerned, it was indifferent to Mrs. Davie whether the benefits of the compromise were secured to Jones indefinitely, or to him and his family. The terms of the trust deed proceed wholly from Jones, who prepared it. When one agrees to convey to another, and the latter prepares a deed of trust for signature, professing to be upon the consideration of natural love and affection, equity will look beyond the terms of the deed to the true consideration,
The main question in the case as above stated is one of fact, and in order to disturb the findings of the Circuit Court, it is necessary that a conclusion opposite to that of the Circuit Court should rest on clear and indisputable grounds.
We are satisfied that the conclusion of the Circuit Court holding that there was a complete and full delivery was erroneous, as unsupported by the proper legal effect of the proofs and allegations. This question is fundamental to the question already stated as presented by the case, viz., whether any rescission or modification of the original agreement has been effected by the agreement or waiver of the parties, and it will be first considered. The testimony of Mrs. Davie and that of Fraser are in substantial concurrence. The proper deduction from their testimony is, that according to the understanding of both, the •deed was to remain in the hands of Fraser, inoperative, until provision was made as it regards the payment of the $1000. This fact becomes extremely important as these parties were the. proper parties to the delivery, if one was made, Mrs. Davie as the grantor, and Fraser as the grantee in trust.
Unless, then, this testimony is successfully shaken, it would be extremely difficult to get rid of the consequences of such a mutual understanding between the immediate grantor and grantee, as it regards the nature and intention of the delivery.
It has been objected to Mrs. Davie’s statement that she has ■stated in her answer that it was only the withholding of the ■deed from record that was contemplated by the condition annexed to the manual delivery of the deed as admitting the deed to be recorded is not essential to its effect as a valid deed between the parties. But it is clear that Mrs. Davie assumed that by withholding the deed from record, it would remain inoperative; and as delivery is an act of the mind, as well as a manual act, presupposing consent that the deed should become operative, evidence showing the absence of that consent must have weight against the inferences arising from mere manual delivery. Mrs. Davie was an aged lady, of seventy-four, dealing with a nephew, and, it is evident .from her testimony, had an imperfect knowledge of
She was examined upon written interrogations and appears to' have answered directly, but briefly. Although she does not state, in terms, that it was stipulated that the deed should not become operative until the conditions as to the $1000 were complied with, that question not having been put to. her, yet she-stated the incomplete state of the transaction at the time the deed is alleged to have been delivered, in a manner that fully accords-with and corroborates the more full statement of the matter made by the trustee, Fraser. Fraser states that the deed was not recorded because, as he understood, “ it was not to be recorded' until all the conditions of the compromise had been complied! with.”
This testimony has been criticised for the reason that it is the statement of the witness’ understanding alone. It is true that when it is sought to prove the existence of a fact by the statement of a witness that he understood the fact so to be, the proof is of the weakest character, for in that form of statement the sense of “understood” is equivalent to that of “believed,” and that belief 'might be founded on hearsay or conjecture. But here the existence of such an understanding is the very fact to be proved, that word being used in the sense of “ agreement,” and, therefore the mere statement of its existence by a party to it, is-direct proof in itself.
The subsequent conduct of the parties shows that they mutually understood that withholding the deed from record was equivalent to withholding it from operating as a deed. . It was handed by Fraser to Mr. Hamilton, and retained in his possession unrecorded until the commencement of this action. It does not appear that any act asserting title under the deed has been performed by the trustee.
The Circuit decree arrives at the conclusion that Mr. Hamilton is not to be regarded as the attorney of Mrs. Davie, but on this point the testimony is so clear and conclusive that it does not need comment or illustration. We hold the proof sufficient to show that Mr. Hamilton in taking possession of the deed and holding the same, did so as the attorney of Mrs. Davie.
Opposed to this are the statements contained in the answer of the defendant, Jones, which, by the stipulation of the counsel for «the parties, are to be treated as if sworn to by Jones as testimony in the case. The statements of the answer, as it regards the intended effect of the deed, are in general terms, and do not show any facts or circumstances tending to give probability to his statements, as against those of the trustee. Primarily it must be assumed that the immediate grantor and grantee had the best knowledge of what was intended between them, but this inference might give place to a different result, if it was made to appear that the transaction was actually with Jones, and only nominally with Fraser. But the statements of Jones lay no «sufficient foundation for such a conclusion. So, too, if any purpose of equity was to be subserved thereby, Jones might be treated as the actual party j but on the contrary, the equities are with Mrs. Davie to have the purposes of her contract carried into effect. We must therefore give effect to the mutual understanding of the parties between whom the transaction was in form of law perfected.
It is clear that the course pursued by the defendant, Jones, was at variance with the original contract, and tended to place Mrs. Davie in a position in which Jones would obtain the substantial benefits intended by the transaction, without affording to her the advantages contemplated in her favor. It is not to be presumed that Mrs. Davie intended to relinquish those benefits, nor was Fraser, though interested as trustee, bound to assist •Jones in stripping Mrs. Davie of these advantages. No principle of equity requires that a trustee should yield himself as a party to an overreaching transaction against his grantor. He is -as much bound to good faith as one who deals in his own interest. The testimony of Fraser must, therefore, be considered as proceeding from one devoid of personal interest and acting wholly
A subject may pass entirely out of the mind, and yet, upon-being recalled, the memory of the various matters connected with it may be entirely reliable.
The principles on which the foregoing conclusion, as to the-bearing on the effect of manual delivery of the intentions of the-parties, were recently considered by this court in Arthur v. Anderson, 9 8. O., and the cases bearing on that subject there-noticed. It is not necessary to re-examine the foundations on which they rest. There is no question of an escrow in the case, the true question being the effect in equity of the understanding of the parties under which manual delivery was effected. It is,, therefore, unnecessary to consider the propositions advanced, relating to the validity of escrows.
There being, then, no absolute delivery of the deed, its recitals cannot be employed against the grantor, as has been attempted not having direct effect in that respect, it cannot act indirectly upon the parties.
The only proof offered of any change in the terms of the original contract comes from the answer of the defendant, Jones, considered as testimony in the case. The onus probandi is on Jones, who alleges such change. His testimony is rebutted by that of'both Mrs. Davie and Fraser, and tails to repel the presumption of the continuance of the contract in the form originally made.
The want of operation in the deed precludes the charge that Mrs. Davie had waived full performance of the terms of the original contract-, for no other act of hers is alleged as having produced.
The cause must be remanded to the Circuit Court for an inquiry whether the situation of the property and of the parties is such that the deed of trust can take effect in substantial compliance with the terms of the contract between the parties as hereby established, and for a final decree upon the principles hereinbefore stated.
Decree reversed.