Sargent v. Baldwin

| Vt. | Oct 15, 1887

The opinion of the court was delivered by

Tyler, J.

The material facts in this case as reported by the master are as follows: On the 9th day of April, 1877, Thomas Williams and bis wife executed and delivered to the defendant Baldwin a deed of certain real estate situated in Chester, and on the same day Baldwin executed and delivered to Williams a mortgage deed of the same lands, conditioned, first, for the support of said Williams and wife during their lives and for the payment to them of a small sum yearly, and then as follows :

“And after the decease of said Thomas Williams and Betsey Williams, within a reasonable time pay $1,000 to each of their heirs; that is, $1,000 to their daughter, Laurenza S. Baldwin, wife of Albert F. Baldwin, $1,000 to their son, Warren C. Williams, and $1,000 to their daughter, Maria A. Sargent, wife of E. P. Sargent; and in case either of the said heirs are not living at the decease of the said Thomas and Betsey, pay to their heirs the said $1,000.”

Mafia A. Sargent died in August, 1878. The petitioners, Alice J. and Carrie B., are her heirs. On February 17, 1879, Williams and Baldwin entered into a new agreement in writing by which they intended to change that part of the condition in said mortgage which relates to these petitioners, and intended and expected that the new agreement would so far take the place of and supercede the condition in said mortgage. Williams and wife died in July, 1884.

The master finds, that Williams and Baldwin acted in. good faith in making the new agreement; that the petitioners' did not consent to it and had no knowledge of it; that it was not beneficial to them, as under it they would have been entitled to a considerably less sum than under the mortgage.

I. The case presents the question as to the rights and power of the mortgagor and mortgagee, by a parol agreement, to alter the terms and conditions of the mortgage so far as the heirs of Mrs. Sargent are concerned, the defendant claiming it was within the power of Williams to make the change evidenced by the new agreement and the petitioners claiming it was inoperative as to them.

The law relating to voluntary soatloments has been the subject of wide discussion in English and American courts. An early case, referred to by text-writers, is Villers v. Beaumont, 1 Vern. 99, decided in 1682. In that case William Beaumont, who was entitled to a lease of a hospital in -Leicester for three lives, a short time before his death; by a little scrap of paper at an ale-house, but under his hand and seal, settled the term upon the plaintiffs, who were his cousins, to the intent to pay his debts, and gave the surplus to them. Afterwards being dissatisfied with the settlement, he made his will in writing, whereby he devised the term, subject to the payment of his debts, to the defendant. After arguments Lord Chancellor NOTTINGHAM said : “There is no color in this case. If a man will improvidently bind himself by a voluntary deed and not reserve a liberty to himself by a power of revocation, this court will not loose the fetters he hath put upon himself, but he must lie down under his own folly ; for if you relieve in such a case you must consequently establish this proposition, viz. : That a man can- malee no voluntary disposition of Ms estate but by Ms will only, which would be absurd.”

A voluntary settlement binds the party making it, nor can he alter it, how much so ever ho may be inclined to do so, unless there be a power of revocation. Ambler, 266.

Boughton v. Boughton, 1 Atk. 625, was a case where a voluntary deed, not at all unfair, which was kept by the person making it and never cancelled, was sought to be set aside by a subsequent will. The Lord Chancellor said: “The will is no more than voluntary, and as there is no case where a voluntary settlement has been set aside by a subsequent will, this no longer remains a question.”

In Curtis v. Price, 12 Ves. 103, the court said: “It is void only against creditors; and only to the extent in which it may be necessary to deal with the estate for their satisfaction it is as if it never bad been made. To every other purpose it is good. Satisfy the creditors and the settlement stands.”

The strictness of the ancient doctrine was somewhat modified by later decisions, in some of which it was held that the absence of a power of revocation was to be regarded as strong evidence that the settlor did not understand the transaction when there was no apparent motive for an irrevocable gift. Bridgman v. Green, 2 Ves. 627; Huguenin v. Baseley, 14 Ves. 273. But in the lattercase Lord EldoN said : “ Repeating therefore, distinctly, that this court is not to undo voluntary deeds.” *. * * In other cases it was held that the absence of a power of revocation was only a circumstance to be considered and of more or less weight according to the other circumstances in the case. Toker v. Toker, 3 De G. & S. 487.

In Ellison v. Ellison, 6 Ves. 656, Lord EldoN said; “ But if the trust is perfectly created, so that the donor or settlor has nothing more to do, and the person seeking to enforce it has need of no further conveyance from the settlor, and nothing is required of the court but to give effect to the trust as an executed trust, it will bo carried into effect at the suit of a party interested, although it was without consideration and the possession of the property was not changed; and this will be true although the person who is intended to be benefited has no knowledge of the act at the time it was done, provided ho accepts and ratifies it ívhen he is notified. But if there is any fraud, accident, or mistake, in the transaction, courts will not carry a voluntary trust into execution.” Perry in his work on Trusts, section 98, adopts this declaration as the law on this subject, and cites numerous authorities in support of it.

In Garnsey v. Mundy, 24 N. J. Eq. 243, it was held that a voluntary trust-deed which reserves no power of revocation and was made with a nominal consideration and without legal advice as to its effect, should be set aside on the application of the settlor, there being evidence that its effect was misunderstood both by the settlor and her relatives who induced her to make tbe conveyance, and that in some particulars it defeated the real intentions of the parties. This case is reported in Yol. 13,. Am. Law Reg. with learned notes by Mr. Bispham, in which he reviews the leading cases on this subject, some of which are above referred to, and from which he draws the following conclusions :

‘ ‘ Where there is a deliberate gift, with full knowledge of the consequences of the act, made by a person sui juris, the absence of a power of revocation is not prima facie, enough to set the instrument aside. The absence of motive is immaterial, if an intent to make an irrevocable gift is apparent; and, it is submitted, that this intent is sufficiently proved, in the first instance, whenever a person of sound mind and sui juris executes an instrument of whose contents he has been informed.”

“It is a well settled rule * * *' that an executed, voluntary settlement, not tainted with fraud, or affected by mistake, is binding on the settlor. No matter how unfortunate, unjust or absurd such a settlement may unexpectedly prove to be, the general rule, above stated, is certainly beyond dispute.” See Kekeaich v. Manning, 1 De G. M. & G. 176; 1 Hill on Trustees, 140.

Upon a careful examination of this subject we have been unable to find any case where equity has set aside a voluntary settlement except on the application of the settlor, and then only on the ground of fraud, or where the settlement was unadvised and improvident, or contrary to the intention of the settlor.

In Salisbury v. Bigelow, 20 Pick. 174, the court said : “It seems to be a well settled principle of equity, that when a voluntary settlement is fairly made it cannot be annulled by the settlor, unless a power of revocation be reserved for that purpose.” See also Stone v. Hackett, 12 Gray, 227; Viney v. Abbott, 109 Mass. 300" court="Mass." date_filed="1872-01-15" href="https://app.midpage.ai/document/viney-v-abbott-6416803?utm_source=webapp" opinion_id="6416803">109 Mass. 300; and Sewall v. Roberts, 115 Mass. 262" court="Mass." date_filed="1874-06-20" href="https://app.midpage.ai/document/sewall-v-roberts-6417709?utm_source=webapp" opinion_id="6417709">115 Mass. 262.

All questions as to voluntary, executed trusts, their creation without pecuniary consideration and without notice to the cestuis que trust, were fully considered and settled by this court in Barber, Adm’r, v. Thompson, 49 Vt. 213" court="Vt." date_filed="1876-10-15" href="https://app.midpage.ai/document/barber-v-thompson-6580557?utm_source=webapp" opinion_id="6580557">49 Vt. 213, a case very similar in its material facts to the present one, and in which the learned judge in his opinion recognized and reaffirmed the well settled law on this subject..

In a recent case the Court of Appeals of New York held that: ‘ ‘ When the owner of lands deeds them and takes from the grantee a mortgage securing the payment of an annual sum to his granddaughters or their guardians until they shall arrive at age, a valid irrevocable trust is thereby created, and the trustee has no power to annul or change the conditions of the trust, and the execution of a discharge of the mortgage by the trustee in contravention of the trust and without its fulfillment, is, as to such trust and the interests of the beneficiaries, unauthorized and void.” McPherson v. Rollins, Cent. Rep. vol. 9 832; Martin v. Funk, 75 N.Y. 134" court="NY" date_filed="1878-11-12" href="https://app.midpage.ai/document/martin-v--funk-3587964?utm_source=webapp" opinion_id="3587964">75 N. Y. 134.

The obvious purpose of Thomas Williams in making the conveyance of his real estate to his son-in-law, Baldwin, was to provide a maintenance for himself and wife during their lives, and upon their decease to settle the sum of one thousand dollars upon each of his three children, Laurenza S. Baldwin, Warren C. Williams and Maria A. Sargent, and upon the heirs of his children, respectively, if the latter should decease before Williams and his wife. The mortgage was given by Baldwin, to Williams to secure the fulfillment of that purpose, and the two instruments, which were executed at the same time, must be regarded as constituent parts of one transaction. They contained no power of revocation, and when delivered and recorded, Williams was divested of the title to the real estate in question beyond recovery, provided Baldwin performed the conditions of the mortgage, and the liability of the mortgagor was fixed to perform those conditions.

The effect of this transaction was to create a trust in Baldwin and to vest in the three children of the settlor a right to the sum of one thousand dollars each, a right of which they could not be divested without their consent. It was a voluntary conveyance in trust, fully executed and completed, for the settlor and his wife and the beneficiaries named. It was not tainted with fraud, and there is no claim that it was made under any misapprehension as to its legal effect.

The right of Maria A. Sargent to her sum of one thousand dollars, which was in legal effect carved out of her father’s estate and deposited in the hands of the trustee for her, by the terms of the trust, vested in her and her heirs without any provision for a defeasance.

The result is we hold that the agreement of February 17, 1879,' was inoperative to disturb the trusts created April 9, 1877, or the rights of the cestuis que trust under the same.

II. The mortgage was made to Thomas Williams and his heirs and assigns ; but it was for the benefit of all the cestuis que trust, as the promise contained in the condition thereof was to them. When the several sums became due to them, on failure of the defendant to make payment they could avail themselves of the mortgage security.

In Keyes v. Wood et al. 21 Vt. 331" court="Vt." date_filed="1849-02-15" href="https://app.midpage.ai/document/keyes-v-wood-grant--co-6574089?utm_source=webapp" opinion_id="6574089">21 Vt. 331, it was held that whore notes secured by mortgage were assigned by the payee, the mortgage in equity went with them, even though the assignee, at the time of the assignment, did not know of the mortgage security, and that on an assignment of a part of the notes a pro rata portion of such security accompanied them. See also Belding v. Manly, 21 Vt. 551.

In Sewall v. Brainerd, 38 Vt. 364" court="Vt." date_filed="1865-11-15" href="https://app.midpage.ai/document/sewall-v-brainerd-6578045?utm_source=webapp" opinion_id="6578045">38 Vt. 364, and Miller v. R. & W. R. R. Co. 40 Vt. 399" court="Vt." date_filed="1867-11-15" href="https://app.midpage.ai/document/miller-v-rutland--washington-railroad-6578483?utm_source=webapp" opinion_id="6578483">40 Vt. 399, it was held that matured coupons of a railroad company mortgage bonds were a constituent part of the mortgage debt, and that an assignment of them carried with it by necessary implication an interest in the mortgage security. The case at bar presents as strong a right in the petitioners, for here the promise is to certain persons named or their heirs.

We have no question as to the right of the petitioners to maintain this form of action. A petition to foreclose a mortgage'is as proper in disputable as in indisputed cases. Wood v. Adams, 35 Vt. 300" court="Vt." date_filed="1862-03-15" href="https://app.midpage.ai/document/wood-v-adams-6577413?utm_source=webapp" opinion_id="6577413">35 Vt. 300.

We are of opinion, however, that Laurenza S. Baldwin, Warren C. Williams and the administrators of Thomas Williams’ estate, having an interest in' the mortgage, should be made parties to the proceeding. The decree of the chancellor dismissing the petition is reversed and cause remanded to. the Court of Chancery with right in the petitioners to ask leave to amend the petition by bringing in the persons above named as parties thereto. When the petition is so amended the petitioners may have a decree according to the prayer of the petition as provided in the mandate.