20 F. 455 | U.S. Circuit Court for the District of Western Pennsylvania | 1884
The bill in this case was filed by Augustus E. Lii' ton and Phebe B. E. Elwina, his wife, against the administrators, wit i the will annexed, of James E. Brown, deceased, and against his widotv, Kate L. Brown, and infant son, Jamos E. Brown, Jr., (by his guardian, Charles T. Neale,) the Kittanning National Bank, and the
T' e validity of this deed, as before stated, is disputed by the defend mis. They contend that it was never out of James E. Brown’s post ission during his life-time, was never delivered by him, and nev( r beeamb an effectual deed; and whether it was executed and do-livoi ed by him, and became an effectual deed, is the principal question now to be determined. As by the terms of the deed itself Mr. Bro m wa- to be the trustee during his life-time, the fact of retaining it in his possession is of little consequence. If he was not the onli proper custodian of it, there was, at least, no impropriety or re-pug rancy to its validity in liis keeping it. Whether it was sufficiently oxo' utod and delivered by him, so as to become a valid and effectual insl rumont, is another question, which we shall proceed to examine.
J s the surrounding circumstances under which a deed is executed oftc n have an important bearing upon the question of its definitive exe lution and delivery, it will be proper to state the leading eircum-sta tees which existed in this case. When the deed was executed (or pui ported to be) James E. Brown resided in Kittanning, Armstrong cor aty, Pennsylvania, being considerably advanced in life, and posses ¡ed of a very largo estate. He had no family but a wife by a sec-on< marriage, the said Kate L. Brown, one of the defendants in this cat 3. He had an only child by a former marriage, the said Jane B. Fii lay, wife of John B. Finlay, who also resided in Kittanning, adjoining the building in which the First National Bank of Kittan-nii g was located, (of which Mr. Brown was the principal, if not sole, sto ikholder,) and in which he also had his private office. Mrs Fin-la} had an only child, the said Phebo R. E. Elwina Finlay, who was tin n (in 1867) about five years of age. This child, therefore, was at tin t time the only apparent descendant of Mr. Brown in the third ge íeration. The probabilities, therefore, are in favor of such a piro-vis ion for Mrs. Finlay and her child as was made by Mr. Brown by
In the next place, the property embraced in the deed consisted of lands in Pennsylvania, and several western states, which John B. Finlay had recently (mostly in November previous) conveyed to Mr. Brown, and personal estate, judgments, and claims which had been assigned by John B. Finlay to Brown; and also all claims held by Brown against Finlay, Mrs. Finlay, and Finlay & Co., (in which Mrs. Finlay was a partner,) including the property of Finlay & Co. transferred to Mr. Brown by an instrument dated November 7,1866. The subject of the trust, therefore, consisted mostly of property which had belonged to John B. Finlay, or to Jane B. Finlay, his wife, or in which they were interested, and of debts due from them to Mr. Brown, and was not taken from the general mass of Mr. Brown’s own estate, unconnected with the interest of the Finlays. It may be added that the firm of Finlay & Co. consisted of Mrs. Jane B. Finlay and one Joseph Alcorn, and that their business consisted in carrying on a woolen factory in Kittanning, situated on a lot of ground which Mr. Brown,, in January, 1866, had conveyed to his son-in-law, John B. Finlay, in trust for his daughter, Jane B. Finlay; also that on the second of February, 1867, John B. Finlay conveyed to Mr. Brown a tract of land in Kittanning township, in the county of Armstrong, consisting of 819 acres, which the latter, on the same day, conveyed to his daughter, upon the same trusts, for her sole and separate use during her life, and after her death for the sole and separate use of his granddaughter, as are contained and declared in the deed in question ; Mr. Brown reserving the control thereof during his life-time as their trustee, and the reversion of the property in case they should both die in his life-time, precisely as in the said deed, Exhibit A.
The deed in question, therefore, if valid, is but one of a series of acts of the same general character by which James E. Brown had transferred property to or for the use of his daughter and granddaughter. Such being the condition of Mr. Brown’s family, such his relations to the beneficiaries named in the deed in question, and such the character and derivation of the property conveyed thereby, we proceed to consider the circumstances of its execution. The undisputed facts are as follows:
Mr. Brown drew the deed himself; it is all in his own handwriting, even to the attestation clause, so that it required nothing but the signatures of himself and the witnesses to be a perfect deed in form. Sometime on the day of its date, the twenty-third of July, 1867, he called into his private office, in the rear of the bank, the cashier, William Pollock, and another man, by the name of Absalom Reynolds, to witness its execution, and in their presence signed his name opposite a scroll seal, and then the witnesses signed their names- to the attestation clause, which reads as follows: “Signed, sealed, and delivered in presence of Absalom REYNOLDS, W. Polloce. ” Then followed a receipt for the purchase money, also in Mr. Brown’s writing, as follows: “Received of Mrs. Jane B. Finlay five hundred dollars, being the consideration money above mentioned, ” which he also signed, and which Mr. Pollock*459 wita issed as follows: “Attest — W. Pollock.” In the margin, by the side of tl is receipt, is affixed a government internal revenue stamp of 50 cents, cane fed by Mr. Brown himself, by the following memorandum written on its face; “23 July, ’67. J. E. B.” Whether this stamp was affixed before or aftei the execution does not appear. Then follows a certificate of acknowl-edgn .ent, also in Air. Brown’s handwriting, as follows: “Armstrong County, ss.: Before mo, Joseph Alcorn, a notary public in and for said county, came Jam >s E. Brown, above named, and acknowledged the foregoing deed to be his ¡ ct and deed, and as such desired it to be recorded. Witness my hand and lotarial seal the twenty-third July,1867.” On the same day Mr. Brown acln owledged the execution of the deed before Joseph Alcorn, a notary public, vho thereupon affixed his official seal to the certificate, and signed it in his < fiicial character, thus: “Joskpii Alooiix, Notary Public.”
T le fact of the execution is testified to by William Pollock, the other sub-scril dng witness being dead; but all that Mr. Pollock can recollect of the cir-cuir itances is that he was called in from the bank to witness the paper; that Mr. Brown signed it in the presence of himself and lieynolds; and that they sigi ed it as subscribing witnesses, when he, Pollock, went back into the bank. The fact of the acknowledgment is shown by the certificate of acknowledg-mei t, which proves itself, and is also testified to by Alcorn, the notary public. The document thus executed, attested, and acknowledged, and tho acknowl-edg nent thus certified, was found at Mr. Brown’s death in a sealed envelope, wit i his will, executed March 30, 1871, in the custody of William Pollock, win ' was a witness to tho will as well as the deed, and to whom Mr. Brown had intrusted it for safe keeping several years previously. After Mr. Brown’s dec >ase, Pollock produced the envelope to his family, when it was opened, the will read, and the deed delivered to John B. Finlay, (his wife being then dee ;ased.) and both papers were handed back to Pollock, with the request to 1 ave the will registered and the deed recorded, which was done.
' 'he facts as now stated are undisputed, and we might stop hero am i ask whether the deed in question is not, by this evidence alone, we 1 and sufficiently proved to have been duly executed and delivered, so is to become a valid and operative instrument on the day of its daf e ? Or, if not operative as a deed of conveyance to transfer the log il title, whether it was not at least operative as a declaration of trust, binding upon James E. Brown and his heirs at law? We are inclined to think it was both. If valid as a deed of conveyance, of coi rse it was valid as a declaration of tho trusts contained in it, al-th< ugh it might possibly be valid as a declaration of trust, without being valid as a conveyance of title.
3ut there is additional evidence as to the execution and delivery of th<; deed, which, though questioned by the defendants, is not mate-ríe ily contradicted, nor is the credibility of the witnesses impeached. Jo m B. Finlay testifies that he was present when the deed in ques-ticn was written by Mr. Brown; that it was written after consultation with him; that he was present when it was executed; that it ws s acknowledged the same clay, before it was delivered; that after it was executed Mr. Brown went into the dining-room of witness, wl en the family were at dinner, and in presence of witness and one B< bert IT. Sayre delivered tho paper to Mrs. Finlay, witness’ wife; tli it she handed it to witness to take care of; and that he placed it
Mr. Finlay’s testimony is further corroborated by the testimony of Sallie B. Brown, a piece of James E. Brown, who says that .some time in the month of July, 1867, she went to the house of Mr. and Mrs. Finlay, in Kittanning, between 12 and 1 o’clock, at noon, and met her uncle, James E. Brown, coming out of the brqakfast room, and spoke to him, and on going in she found them at dinner, — Col. Finlay, Mrs. Finlay, and Mr. Sayre; that Mrs ..-Finlay first asked her to take dinner, which she declined, and that then Mrs. Finlay, holding up a paper, said, “Come andlet us have a jollification, — father has given me a deed for the western lands, the mill property, and factory;” that she did not examine the paper, but was near enough to recognize her uncle’s handwriting on the back. The deed in question being shown to her, she said it looked like the paper she saw. She fixes the date of the occurrence by the fact that her uncle was going to Butternuts, and did go the next morning. It is shown by other evidence of a conclusive character that Mr. Brown and his wife left Kittanning on the morning of the twenty-fourth-of July for Butternuts, New York, on a visit to Mrs. Brown’s parents, and were absent until near the middle of August; so that the time of the occur-
TI ¡ere is nothing to contradict this very conclusive testimony, unless it be that of Joseph Alcorn, the notary public, who took the ac-knoi rledgment of the deed. He says that the acknowledgment was take a by him at Mr. Brown’s house, in Kittanning, four or five squires from the bank, between sundown and dark, by lamp-light; that he stopped at the house with his seal, at Mr. Brown’s request, and foujnd him at a table with the paper in his hand; that Mr. Brown rem irked that a portion of it was not as he expected, but that he would explain; that 'he then wrote the postscript which is below the aeb íowledgment. The postscript to which the witness referred, and whi ;h he pointed out'on the deed, is a memorandum in Mr. Brown’s handwriting, in the following words: “No indebtedness to the Kit-tan mig Insurance Company, to the Kittanning National Bank, or the Fir; t National Bank of Kittanning, are to be affected by the above trai isfer; none of which is transferred, but remains unpaid and due the eto. J. E. B. 23 July, ’67.” The witness went on to state that at he time Mr. Brown wrote the postscript he said he was sorry he hat not room to write it above the acknowledgment, but that he wai ¡.ted him to recollect it; but that it made little difference, as he did not intend to deliver that deed; that Mr. Brown told him his ob-jec'i was that if he died without making a will he wanted his prop-ert r to go as provided in it; otherwise, if he -made his will, he wanted it i r control.”
11 is to be observed of this evidence that it does not in the least coi tradict the testimony of William Pollock, John B. Finlay, and Sa lie B. Brown, except the statement of Mr. Finlay that the deed -was acknowledged before it was delivered to his wife. But if Mr. Fi day was mistaken in this circumstance it would not detract from th(: legal effect of the execution of the deed and its delivery to Mrs. Fi day. When thus delivered- it became a perfect deed, valid and op native as such, and passed out of the power of Mr. Brown to alter it rr take it back by any subsequent declarations or memoranda. It is unnecessary, therefore, to scrutinize the remarkable statement m ide by Alcorn. In the first place, as an officer authorized to take th 3 acknowledgment of a deed, ho cannot be received to testify to ar vthing repugnant to the legal effect of his certificate of aeknowl-eo gment. In the next place, it is quite possible that Alcorn may be mistaken as to the identity of the instrument on the acknowledg-m 3nt of which the circumstance and conversation referred to by him to rk place. He was constantly in the habit of taking Mr. Brown’s
Both parties have referred, with considerable confidence, to the conduct'of the parties after the execution of the deed with reference to the property embraced therein. But in our view there is nothing in their subsequent dealings with the property, or in their conduct or declarations, that can affect the validity and binding force of the instrument. Mr. Brown assumed the paramount control°.of the property; but this it was his right and duty to do as trustee for his daughter and granddaughter. It was natural, however, that as most of it, except the woolen-mill, had belonged to Mr. Finlay, who was presumably better acquainted with its condition and needs than any one else, the care of it should be deputed to him. And this was in fact the case. Mr. Finlay testifies that the rents of the real estate mentioned in the’ deed were received by him for Mrs. Finlay, or by herself, from the date of the deed until he went to Europe, in 1873, when he was absent about five months, and returned thither again in November, 1874; that the taxes were mostly paid by the tenants, except on the western property, “on which,” he’says, “they were paid by ourselves;” that he generally paid them. Tenant houses were built or repaired on some of the lands, and paid for by Mrs. Finlay, several of which he specifies. In April, 1878, when Mr. Finlay was about to go to Europe again, Mr. Brown, as Finlay testifies, requested him to make out a list of all the real estate, so that the taxes could be looked after, and he made such a list, which is produced in evidence. In 1879 Mr. Brown wrote to the witness, requesting him to come home and assist "in attending to the property, but he did not return until June, 1880.
Avarious times after the execution of the deed, when Mr. Brown had occasion to deal with or to speak of the property comprised in it, l e spoke of it as held by him for his daughter or granddaughter, the former having died on the thirtieth of December, 1876. The onb matters of a positive character in the evidence showing any con-due - or declarations of Mr. Brown, after the deed was executed, in-con listen! with the position held by him under its provisions, are whs fc we shall now specify. It is shown that he used a considerable ami unt of Mrs. Finlay’s money derived from the bank-stock which he lad given her, or from other sources, to pay debts of the firm of Fin lay & Go., or of Mr. or Mrs. Finlay, which, in and by the deed, hat been given to her or for her use. He may have thought he mil fit justly do this. He may have been mistaken, and his estate ma r be liable to account for such application of her money. We do not think that the fact of his doing what he did in this regard should hai e the effect to draw in question the validity of the instrument wli cli he so solemnly executed and delivered.
.■ mother transaction is strongly relied on by the defendants to show tha fc Mr. Brown did not regard the deed in question as binding on bin i, and that his views of the subject were acquiesced in by John B.. Fii lay and his wife. On the first day of April, 1871, James E. Br> wn and his wife, Kate L. Brown, executed a deed of conveyance to lane B. Finlay, her heirs and assigns, for nearly the same real est ite which was conveyed by the deed of July 23, 1867, being de-soí ibed as “all that certain real estate situated in the states of Penney] vania, Wisconsin, and Missouri, Nebraska, and Minnesota, which wa i conveyed to the said James by and more particularly described in he following conveyances, viz.,” — then describing the several deeds gii en by John B. Finlay to James E. Brown, in November, 1866. The pa ’pose of the conveyance is then stated to be “for the sole and separate use of the said party of the second part, (Jane B. Finlay,) an 1 her heirs and assigns, and to be uncontrolled, nor incumbered, no • charged by, nor liable, nor subject in any way to debts, contracts, or engagements of her present or future husband, nor of the future hu iband of her daughter, Phebe E. E. Elwina Finlay;” to have and to hold the said real estate and appurtenances for the purposes and lir dtations aforesaid, unto the said party of the second part, and her he irs and assigns, forever.
Mr. Brown did not constitute himself a trustee by this instrument. The deed appears to be regularly executed by the grantors, and wit-n« ssed by J. B. Heiner and W. Pollock, and acknowledged on the dty of its date before said Heiner as a justice of the peace, and is st imped with government stamps to the amount of §10, the con
Jobn B. Finlay, being examined' with regard to this deed, (of April 1, 1871,) says that he got it after this suit was commenced from W. D. Patton, a lawyer in Kitfanning, and that he knew nothing about it from the time of his wife’s death until it was handed to him or shown to him by Mr. Patton; and, when it was handed to him, there was a paper folded up in it in the handwriting of'his wife. This paper was offered in evidence by the plaintiff, but was objected to as incompetent. It seems to consist of memoranda of instructions to counsel, and cannot have any legitimate effect as evidence, unless it be to show that Mrs. Finlay herself repudiated the deed. Perhaps, as the conduct of the parties is so searchingly inquired into for the purpose of ascertaining their intentions and understanding as to the validity and subsistence of the deed in question, this declaration of Mrs. Finlay, now deceased, is as good for the purpose as the declarations and conduct of Mr. Brown. In the memorandum, which is written and signed by her,.she says—
“That this is not the original transfer; that J. E. Brown transferred to me said lands and said judgment, two years previous to this one, by paper signed, sealed, stamped, by himself and wife, and given into my possession; that said paper was handed to J. E. Brown, as custodian, and two years afterwards present paper was returned to me. Defendant now asks for production of first-named transfer.
[Signed]
' “Jane B. Finlay.”
There .is a'further memorandum on the paper which does not appertain to-this subject. On the back is indorsed a pencil memorandum in the handwriting of Mr. Painter, — a lawyer, — which probably furnishes some clue to the purpose of the memorandum. It is the title of a judgment, “Kittaning Bank v. J. B. Finlay,” and a note as to its date, (June term, 1867,) and that noft. fa. had been issued on it; so, probably, one of the debts or judgments which Mrs. Finlay claimed to have been transferred to her, and on which proceedings against her. were about to be taken. On, the hearing we were dis
But ¡ his whole matter of subsequent conduct and declarations, including the deed of 1871, may be disposed of by the observation that, if the deed of July 23, 1867, was duly executed and delivered, as we have si own that it was, it could not be gotten rid of or taken back by Mr. Brown by any indirect methods of the kind referred to; certainly not as against his granddaughter, the present complainant, who d: I not come of age until February, 1883, after this suit was brougl t, and who has been a married woman since December, 1878. She w< uld not be concluded by any waiver of rights which her mother, Mrs. I inlay, might have submitted to, if she did submit to any.
Une' er the view of the case which we have taken on its facts, it is hardlj necessary to refer to any authorities on the question as to what will at íount to an effectual execution and delivery of a deed and a declaration of trust. We will only indicate briefly a few of those which may 1 o regarded as more directly bearing upon the subject in hand.
Tin case of Doe v. Knight, 5 Barn. & C. 671, settled the principle, if it v as not settled before by the eases there referred to, that where an int trumeut is formally sealed and delivered, and there is nothing to qu¡ lify the delivery but the keeping the deeds in the hands of the execu ing party, — nothing to show he did not intend it to operate imme liaiely, — that it is a valid and effectual deed, aud that delivery to th< party who is to take by it, or to any person for bis use, is not essen dal. Of course, in the ordinary caso between vendor and purchase r, it is not expected, on the one side or the other, that a deed of cc nveyance, though duly prepared and executed, and even ac-knou ledged by the vendor, who retains it in his possession, is to have any effect or operation until the whole transaction is completed by tl e payment or security of the purchase money, and the actual deliv ¡ry of the deed to the purchaser. In such a case there is something to show that the deed is not intended to operate immediately on it i execution, and that something is the very nature of the transacts u itself, and the universal understanding in relation to it. And henc e it does not contravene the rule laid down in Doe v. Knight, but is si dctly within its provision. But in the cases of declarations of trus ., and deeds of conveyance or mortgage, where nothing further is et pected to bo done by the beneficiary or grantee to complete the tran laction as a whole, the rule applies that a formal sealing and de-livei y, without an actual delivery to the other party, or to a third person for bis use, will be sufficient to make the deed or declaration operate immediately, unless something else exist or be done to qualify sue! i formal delivery.
The principle of Doe v. Knight was fully adopted by the supreme court of Pennsylvania in Blight v. Schenck, 10 Barr, 285, in an elaborate judgment prepared by Judge Bogers. The substance of the ease is stated in the head-note, that where a grantor executes and acknowledges a deed before a magistrate, which had been left there for that purpose'by the agent of the grantor and grantee, and leaves the instrument with the magistrate without instructions, the delivery is absolute; and instructions given to the agent on the next day not to deliver the deed until payment of the purchase money are immaterial, and do not amount to an escrow; for matters subsequent to an unqualified delivery to a stranger cannot make a delivery in escrow. The court say: “That the delivery was complete when the grantors declared before the proper officer that they signed, sealed, and delivered the deed, without saying or doing anything to qualify the delivery, is well settled on authority. If the grantee had been present at the time, either personally or by agent, no' person would doubt that the title vested; but it is ruled that this will not prevent it taking effect as a good deed;” and reference is then made to Doe v. Knight, and a number of other authorities. And again the court says: “The general principle of law is that the formal act of signing, sealing, and delivery is the perfection and consummation of the deed; and it lies with the grantor to prove clearly that the appearances were not consistent with the truth. The presumption is against him, and the task is on him to destroy that presumption by clear and positive proof that there was no delivery, and that it was so understood at that time.”
The ease of Blight v. Schenck was cited and relied on in'the subsequent case of Diehl v. Emig, 15 P. F. Smith, 320, where the alleged deed was from a father to his daughter, and was retained in the grantor’s possession, and it was objected that there was no proof of delivery; but the court said “ ‘signed, sealed, and delivered’ was the solemn statement of the grantor, formally acknowledged before a magistrate, and admitted to the witnesses;” and that, on the prinei-
In Hope v. Harman, 11 Jur. 1097, Mr. Hope executed a deed to his nephei • for a box of jewels, in the presence of a witness, who signed the att ¡sting clause, “signed, sealed, and delivered.” The deed never went o it of the possession of the grantor, and Lord Dknman left it to the jmy to say whether it had been duly executed and delivered with intent to operate immediately, and the jury found that it had been. The instruction was hold by the court in bank to have been correct.
But declarations of trust are often sustained by much less regard to evi< ence of delivery than is required for establishing deeds of eon-veyan *.e. Thus, in Fletcher v. Fletcher, 4 Hare, 67, the testator, by a volunl ary deed, covenanted with trustees that in case A. and B., his. two n; dural sons, should survive him, his executors and administrators suould pay to trustees named £60,000 upon trust for them, to be paid ¡ t 21 years of age. He retained the deed in his possession and told n o one of it. By bis will he bequeathed all his property in trust for hi s widow and other persons. The deed was found among his. papei?. It was held by Vice-Chancellor WigRam that it created a. trust 'or A., (who survived the grantor,) though the trustee refused to-sue a , law; and that the retention of the deed in the grantor’s custody, and not communicating its existence to the trustee or cestui que trust, did not affect its validity. On the last point the vice-chan-celloi referred to Dillon v. Coppin, 4 Mylne & C. 660, and to Doe v. Knight, 5 Barn. & C. 671.
This subject is discussed in Adams v. Adams, 21 Wall. 185; in Bunn v. Winthrop, 1 Johns. Ch. 329; Souverbye v. Arden, Id. 255; and in Lewin, Trusts, 152.
M ■. Lewin, as quoted in Adams v. Adams, gives the following rules-on tl is subject:
“0 n a careful examination the rule appears to be that, whether there was-tram nutation of possession or not, the trust will be supported, provided it was, in the first instance, perfectly created. * * * It is evident that a trust is not perfectly created where there is a mere intention or voluntary agrei ment to establish a trust, the settlor himself contemplating some further act f >r tlie purpose of giving it completion. * * * If the settlor propose to cc avert himself into a trustee, then the trust is perfectly created, and will be ei forced as soon as the settlor has executed an express declaration of trust into) ded to be final and binding upon him, and in this case it is immaterial whe lier the nature of tlie property be legal or equitable. * * * Where the t ettlor proposes to make a stranger tlie trustee, then, to ascertain whether a va id trust has been created or not, we must take the following distinctions: If tl e subject of the trust be a legal interest, and one capable of legal trans-mut ition, as land, or chattels, etc., the trust is not perfectly created unless tlie egal interest be actually vested in the trustee. ”
I . seems to us that the deed in question, regarded merely as a declaration of trust, was clearly executed in a manner to fulfill all the-
Our conclusion is that the complainants are entitled to a decree declaring that the deed of July 28, 1867, was duly executed and delivered, and became valid and effectual for all the purposes therein expressed at and from the day of its date; and that all the trusts declared in the several instruments described in the bill of complaint, and annexed thereto as Exhibits A, 0, and D, should be established, carried out, and enforced, and that an account should be required as prayed for m the bill.
Upon an examination of the master’s report we are entirely satisfied .with its correctness, and if it were a regular practice to refer the principal controversy in an equity suit to a master, we should be content to accept and confirm the report, without a particular and detailed examination of the evidence. But as this practice is not strictly regular, and as it is the duty of the court itself. to pass upon the merits of the ■ case, we have felt it our duty to do so. We have examined the form of decree which the master has proposed and annexed to his report, and are satisfied with it as the proper decree to be entered.
It may be proper to observe, before concluding this opinion, that as the deed of February 2, 1867, from James E. Brown and wife to Mrs. Jane B. Finlay, for the tract of 319 acres of land in Kittanning township, Armstrong county, was executed before the deed of July 28, 1867, and contained identically (or nearly so) the same trusts which are declared in the latter deed, it is paramount thereto, and the complainants will be at liberty, if they see fit, to amend their bill of complaint by setting forth the said deed of February 2,1867, and praying for the establishment and execution of the trusts therein contained. It was not exhibited in evidence until the present hearing, and had probably been overlooked in the preparation of the bill of complaint.
