Wood v. Fox

8 Utah 380 | Utah | 1893

Lead Opinion

BlaoKbueN, J.:

This suit is brought to enforce a trust, and claim a large amount of money, of many thousand dollars, due the plaintiff from the estate of said decedent, — accumulations from the trust property while in the hands of said decedent. Judgment for defendants, and plaintiff appeals, and assigns for error that the evidence does not support the judgment. The complaint is as follows:

“The said plaintiff complains of the defendants, and alleges that the deceased, Joab Lawrence, died in the city and county of Salt Lake, Territory of TJtah, on or about the 28th day of December, 1888. That he died testate, leaving a will, which has since been probated in the probate court of the county of Salt Lake, and that the defendants, Moylan C. Fox and Sarah M. Lawrence, have been appointed executor and executrix of the said last will and testament of.. Joab Lawrence, and have qualified and entered npon the discharge of their dirties as such executors, and are now the acting executors of said estate. Plaintiff further alleges that on or about and prior to the 7th day of October, 1872, he was the owner of 250 shares of the capital stock of the Eureka Mining Company of TTtah. That the said deceased, Joab Lawrence, was the owner of at least 1,500 shares of the capital stock of said mining company. That prior to said day this plaintiff delivered to the said deceased, Joab Lawrence, certificates of his stock, representing 250 shares of said stock, standing in his name on the books of the company, — said Eureka Mining Company of Utah; said certificates being indorsed in blank. That he delivered the same to the deceased to be disposed of with the stock of the said deceased, and for their joint benefit. That the said deceased, Joab Lawrence, on or about the day and year aforesaid, did sell and dispose of the said stock of his own, and of this plaintiff, to one Eber B. Ward, of Detroit, Mich. ’ That, as a part of the consideration for said sale, he received certain real property situate, lying and being in the city of Detroit, Mich., consisting of three city lots, and a building, or hotel erected thereon, commonly known and designated as the ‘ Mansion House Property/ That the said deceased, Joab Lawrence, procured the deed to said real property to be taken to him (the said Lawrence), individually, in his own name. That the same .has since been recorded, and that the said deceased now stands the owner of record of the title to said Mansion House property. That in truth the consideration for the said Mansion House property was the sale -of the said shares of stock, of which the said plaintiff was a part owner. That the said plaintiff was the owner of one-eighth of said shares of stock thus traded to the said Eber B. Ward. That the said sale and exchange was really, although not appearing of record, in trust for this plaintiff, to the extent of one-eighth interest, and the said deed, although absolute on its face, was in truth and in fact secretly charged with a trust in favor of this plaintiff, to the extent of his one-eighth interest therein; he having furnished purchase money to that amount for the purchase of the said Mansion House property. That the said Lawrence, deceased, also received for the said shares of stock large amounts of other property,- — among other things, a large amount of cash in hand, a part of which was invested in taking up an indebtedness against the said Eureka Mining Company, which was a corporation existing and doing business under and by virtue of the laws of the Territory of Utah. That the said amount of cash thus used' was $23,587.50, so that, of the said proceeds of the said sale of stock, the said Lawrence received the amount of $23,587.50 in the form of an indebtedness against the said company, one-eighth of which belonged to, and was the property of, this plaintiff. That in recognition of the said trust in favor of this' plaintiff m the said Mansion House property, and of the said $23,587.50, the said Joab Lawrence executed and delivered to this plaintiff on the 9th day of November, 1872, the following declaration of trust, to-wit:

“ c Salt Lake City, November 9, 1872.

William H. Wood:-

“ ‘ This is to certify that you are entitled to one-eighth interest in the real estate, mining and rolling-mill stocks, and in the $23,587.50 of which .the Eureka Mining Company of Utah are indebted to me,-of the property acquired by me of E. B. Ward, of Detroit, Michigan, October 7, less the farm of 160 acres, which was given to A. A. Griffith. I have received of you twenty shares of Eureka stock, your one-eighth of the 160 shares, which was given to Messrs. Griffith & Mayhue.

“ ‘Joab Lawrence.’

“ Plaintiff further alleges that afterwards said. Eureka Mining Company of Utah executed a certain mortgage to secure tbe said indebtedness, viz., tbe $23,-587.50, and also other $20,000, tbe total amount of said mortgage being $43,587.50, to one Theodore F. Tracy, trustee; tbe said Tracy bolding .the said mortgage, and the promissory note connected therewith, as trustee for the said Joab Lawrence. That the note was dated September 15, 1872, and the said mortgage the 9th day of November, 1872. Plaintiff further shows that the other said $20,000, which the said mortgage was given to secure, was for $20,000, voted by the directors of the Eureka Mining Company for services to the said Lawrence, deceased, to one John N. Whitney, and to this plaintiff. That the amount thus voted was. to Joab Lawrence, $9,000, to J. N. Whitney, $5,500, and to plaintiff, W. H. Wood, $5,500, who had been a director and secretary of said company, and having rendered it services for which the said money was voted. That the said three items of salary account, amounting to $20,000, and the other, $23,587.50, constituted the consideration and face of the said mortgage, or $43,587.50, That the said account was never paid by the said company, in money, to this plaintiff, but was included in the said mortgage to Theodore F. Tracy. That the said mortgage was afterwards, and prior to the 26th day of August, 1874, assigned by said Theodore F. Tracy to the said deceased, Joab Lawrence, who received the same in trust for plaintiff to the extent of his interest therein, to-wit, for one-eighth of $43,587.50, and for the said $5,500. Plaintiff further alleges that on the day and year last mentioned the said deceased, Joab Lawrence, took proceedings to foreclose the said mortgage in the first district court of Utah Territory, where the property upon which the said mortgage was a lien was situate, and such proceedings were had in said cause. That on the 27th day of July, 1876, a decree was duly made and entered, ■foreclosing the equity and redemption of the said mining property and said premises, and decreeing a sale thereof. That thereafter, in pursuance of the said foreclosure and decree, the said property and premises were sold on the 9th day of September, 1876, and conveyed to the said Joab Lawrence, deceased, individually, by deed dated the 13th day of March, 1877, and recorded in the office of the county recorder of Juab county, Utah, on the 27th •day of March, 1877, Book C. That thereafter such negotiations were had that all the right, title, and interest which the said deceased, Joab Lawrence, had acquired by reason of such decree of foreclosure and sale therein, and as a beneficial owner in said trust deed, was conveyed by the said deceased to the Eureka Hill Mining Company, a •corporation organized and doing business under and by virtue of the laws of the Territory of Utah. , That such conveyance was by deed dated the 14th day of March, 1877, and recorded in the office of the county recorder of Juab county, Utah, on the 27th day of March, 1877, in Book C, and that the consideration for the transaction was three-tenths of the entire capital stock of said Eureka, .Hill Mining Company, to-wit, 3,000 shares of the capital •stock of said 'company; its entire capital stock being 10,000 shares, of the par value of $100 each. That said 3,000 shares were issued by the said company to the said deceased in compromise and consideration of the conveyance to it of all the rights acquired by the said deceased •under and by virtue of the said mortgage of $43,587.50. 'That through all these transactions the said deceased was' ■acting, not only in 'his own behalf, but also in behalf and for the use of this plaintiff, to the extent of the interest ■of this plaintiff in and to the said mortgage, which was the amount of one-eighth of the said $43,587.50, and the •amount of said salary, $5,500, making a total of $8,198.-•43; and the said Lawrence, deceased, held the certificate .as trustee for the said plaintiff to the extent of said interest, amounting to 564 and 216-1000 shares. Plaintiff further alleges that he is informed and believes that the said Eureka Hill Mining Company has from time to time declared dividends upon its capital stock.' That the dividends declared since the said Lawrence received the said shares of stock aforesaid, and prior to his decease, amounted to $94 per share. That the same have been declared on the following dates, to-wit:

1879 — August 2_ $1 00 per share

September 15 1 00

October 15_ 1 00 “

1882 — February 23... 3 00

October 11_ 2 00 “

1883 — March 17. 2 00

June 4. 2 00

July 17_ 2 00 “

August 1_ 2 00

August 25_ 2 00

August 22.... 2 00

November 1__ 2 00 “

December 5... 2 00

1884 — January 8_ 2 00 “

February 1_ 2 00 “

March 1. 2 00 “

June 5_ 2 00 “

September 24. 2 00

November 12. 2 00 “

December 10.. 2 00

1885 — January 6_ 5 00

February 3_ 5 00

April 6.. 2 00

June 1_ 2 00 “

September 7.. 2 00

1886 — February 16.. 4 00 “

September 5.. 2 00 “

December 6... 2 00 “

1887 — February 7... 3 00

April 4... 2 00 “

July 6_ 2 00 “

September 5.. 2 00 “

1887 — October 6.-.$2 00 per share

November 7. 2 00 “

DecemberS... 2 00 “

1888 — January 2.-.-.- 2 00 “

February 6. 5 00 “

March 5...-. — . 2 00

May 7...-.- 2 00

August 6.-..,.. 4 00 “

September 3. 2 00 “

Total dividends declared.....894 00

“That plaintiff further alleges, on information and belief, that the said Lawrence, deceased, received the said dividends that were declared prior to the. 1st day of April, 1888, and that he had right to, and his executors now claim, the remainder of the said dividends. That they are now in the hands of the said company, and have not yet been paid over to the. said deceased, or to his executors. Plaintiff further alleges that the said Eureka Hill Mining Company is very prosperous, is doing a large business, has a large amount of property, and that the shares are very valuable, to-wit, of the value of at least $100 per share, and that the said company are now so conducting the business that dividends will be continually accruing, and will be declared in the future. Plaintiff further alleges that there never has been any accounting, settlement, or examination • of the affairs of the trusteeship ■ between said deceased, Joab Lawrence, and this plaintiff, prior to his decease. That the said plaintiff had never demanded a settlement of the said trusteeship until the spring of 1888. That he then demanded a settlement of the said trust matters, which was denied, and suit brought to enforce the same in the supreme court of the city and county of New York. That said suit was unde- , termined at the time of the death of the said Lawrence, and abated by his death. Plaintiff further shows that he did not for many years know of the value and business done by the Eureka Hill Mining Company, or the amoiint of dividends that had been declared by them, and it was only recently that he heard that they were declaring large dividends, and then, at his first opportunity, he demanded a settlement thereof. Plaintiff further shows that the said deceased, up to the time of his death, received all the rents, issues, and profits of the said real estate situate in the city of Detroit, Mich., and that the amount thereof is unknown to this plaintiff. That the title to the said real estate at the time of his said decease stood in the name of the said Lawrence; and plaintiff is fearful, unless restrained by this court, that the said executors may dispose of the said real estate, and of the said shares of stock. Plaintiff further shows that the said defendants, the executors of the estate of said Lawrence, deceased, deny that the said land and the said shares of stock are, or ever were, held in trust by the said deceased, in whole or in part, for this plaintiff, and have caused the same to be inventoried as the property of the said deceased, and threaten to settle the said estate, and divide and distribute the said property, in violation of the said rights of this plaintiff, as if the whole thereof belonged to the said Lawrence, deceased, and as if this plaintiff had no interest therein. That on or about the 10th day of September, 1889, this plaintiff presented his claim, in writing, to the said executors. That on or about the 10th day of September, 1889, the said executors rejected the said claim. Wherefore, this plaintiff demands judgment: (1) That this plaintiff be decreed to be the equitable owner, and entitled to one-eighth (|-) of the said Mansion House property, in Detroit, Mich., and to the rents, issues, and profits thereof, and to the 564 and 216-1000 shares of the said .3,000 of the Eureka. Hill Mining Company stock, and to all the dividends that have heretofore been declared thereon. (2) That the said executors be required to account to this plaintiff for all tbe rents, issues, and profits received by tbe said deceased upon tbe said Mansion House property, since tbe said 7th day of October, 1873, and for all tbe dividends received by the said deceased, Joab Lawrence, on the said 564 and 316-1000 shares of stock of the Eureka Hill Mining Company, and the interest thereon. (3) That the said executors be required to convey to this plaintiff by good and sufficient deed, one-eighth undivided interest in the said Mansion House property, in the city of Detroit, Mich. (4) That the said executors be required to assign to this plaintiff, of the said shares of stock of the Eureka Hill Mining Company, the amount belonging to him, in pursuance of the said trust, to-wit, 564 and 316-1000 shares. (5) That a receiver be appointed of the entire amount of the said shares of stock held in trust, in part for this plaintiff, by tbe said deceased, Joab Lawrence, to-wit, the said 3,000 shares of stock, to receive the dividends thereon, and to hold the same for the satisfaction of any decree that this plaintiff may be decreed to be entitled to recover; and that the said receiver may be also authorized to receive the rents, issues, and profits of the said Mansion House property, in the city of Detroit. (6) That during the pendency of this action the defendants, the said executors, their agents, servants, and employes, may be enjoined and restrained from selling or disposing of, or parting or interfering with, the said real property or the said personal property, the shares of stock in the said Eureka Hill Mining Company, -until otherwise ordered and directed by this court. (7) That the plaintiff have such other and further relief as this court may deem just, together with the costs of this action.”

The answer is a substantial denial, and a plea of the statute of limitations and the statute of Michigan as to the Detroit property.

It is seen by an examination of the complaint that in March, 1877, the 3,000 shares of the Eureka Hill Mining Company were received by the decedent, and the other property claimed to be held in trust before that time, and the plaintiff made no claim to the decedent of any interest in the shares of stock, or in the real estate in Michigan, until in the year 1888, and not until after the decedent had become an imbecile, and wholly incapable of doing any business, as is fully shown by the evidence in the case. And no sufficient reason is given why the plaintiff slept in his rights all this time, and made no claim to the decedent for his interest either in the Detroit property or the mining stock. It is no excuse for his neglect to say that he did not know that dividends were being paid on such stock, and that is the only excuse he gives for not demanding his share of the Detroit property, and his share of the mining stock. He could have found out by inquiry, and he says he did not make any. He could have had his share of the stock set off to him, if he was eD titled to any, and his interest in the Detroit property deeded to him, if, indeed, he had any interest. This has the appearance of being a very stale claim. It is a principle of courts of equity that every case is to be decided on its own merits, and is a direct challenge to the conscience of the chancellor, and precedent and authority are only valuable to educate the chancellor in what are the true principles of equity jurisprudence, and what rules and doctrines should govern the conscience of the chancellor. His decision should not be governed by his own private notions of right and wrong, but by the principles of justice formulated and declared by a long line of decisions of courts of chancery. It is a well-settled principle of equity jurisprudence that courts of equity will not enforce stale claims.

This suit is based upon a declaration of trust, as follows:

“Salt Lake City, November 9, 1872.

“William H. Wood:

“This is to certify that yon are entitled to one-eighth interest in the real estate, mining and rolling mill stocks, and in the $23,587.50 of which the Eureka Mining Company of Utah are indebted to me, of the property acquired by me of E. B. Ward, of Detroit, Michigan, October 7th, less the farm of one hundred and sixty acres, which was given to A. A. Griffith. I have received of you twenty shares of Eureka stock, your one-eighth of the one hundred and sixty shares, which was given to Messrs. Griffith & Mayhue.

“Joab LAWRENCE.”

The important facts are as follows: In 1872 Wood and . Whitney each ow'ned 250 shares of stock in the Eureka Mining Company, which they placed in the hands of the decedent to be sold. He went to Michigan, and sold the stock along with 1,500 of his own, to one E. B. Ward, and received for the stock a good deal of money, and the Mansion House property in Detroit. He took the deed to the Detroit property in his own name, and this title is still in his heirs. The money he brought home to Salt Jjake, and $2,000 he divided with Whitney and the plaintiff, and with $23,587.50 he paid off debts of the Eureka Mining Company, with the consent of the plaintiff and Whitney, and took a mortgage or trust deed for the same, and for $20,000 additional he claimed to have advanced to the company. Afterwards the mortgage was foreclosed, and the property of the company sold to pay the debt; and the decedent became the purchaser, and acquired the title to the property of the company. Afterwards a new company, the Eureka Hill Mining Company, was organized, and the decedent deeded to it the property, and received therefor 3,000 shares of the new company, excepting a mill which he afterwards sold. This transaction was completed in the spring of 1877. The decedent afterwards sold the mill, and in tbe year 1879 commenced receiving dividends on tbe stock, and continued to receive tbe same up to his death, until be bad received a large amount of money. Tbe sale of the mill and the receipt of dividends were known to tbe plaintiff. After 1877 the plaintiff bad frequent meetings with tbe decedent, and made no claim on h¿m for bis interest in tbe trust property until in the fall of 1888. In 1886 tbe decedent’s health began to fail, and it continued to grow worse until, in 1888, be had become entirely imbecile. After tbe trade with "Ward, be (Ward) claimed be had been badly swindled, and commenced suits against Lawrence, Whitney, and Wood, tbe plaintiff, for swindling him. These suits were managed by Lawrence, and tbe expenses thereof paid by him, amounting to somewhere in tbe neighborhood of $20,000. There is no evidence that Lawrence, after 1877, acknowledged the existence of any trust funds in bis hands belonging to tbe plaintiff. On tbe contrary, be acted in every particular as if he was tbe sole and only owner of tbe 3,000 shares of tbe Eureka Hill Mining Company, and the property in Detroit. It appears, also, that as early as 1876 Lawrence had repudiated tbe trust, and the plaintiff knew of it; for on July 18, 1876, among other things, be said in a letter to Whitney:

“July 18, ’76.

* * How are things in Htah, and does Lawrence and you get along? You know you and myself have about $17,000 of our money in the mortgage, besides our portion of the Detroit real estate, and, if necessary, have some money left to present my claim in court for a fair and honest judgment. It seems we should commence and claim our rights very soon by a suit, if in no other way. All I wish is what is justly due me.

“Yours, very truly,

“Wm. H. Wood.”

Also, 'on March 1, 1880, the plaintiff wrote' Whitney, among others:

“What course is best to take with Lawrence, to bring him to a settlement? Will the law work, this late day? * * * I think something should be done, and done promptly and fearlessly, and a full exposure made, if necessary. * * * No other way but to take the bull by the horns. I fear him not. I closed in one today, and he gave down his milk, and came to time.

“Yours, in haste,

“.Wit. H. Wood.”

These letters clearly show that Lawrence had repudiated the trust prior to that time, and the plaintiff knew it. In 1877 all the trust had been performed, and nothing remained to be done but divide the proceeds; and the plaintiff, knowing all the facts, made no claim on Lawrence for his share until 1888, after he had become imbecile, and entirely incapable of doing business. Another fact is that the declaration of trust was not in the hands of the plaintiff, but was found among the papers of Lawrence after his death, and no explanation is made why the declaration of trust was not in the hands of jdaintiff; for by its very terms it is his property, if it is still in force. This would seem to point to a.n abandonment or a settlement and end of the trust relation. We think the evidence clearly supports the judgment. It is unaccountable that the plaintiff would have slept in his rights, where so many thousand dollars were involved, from 1877 to 1888, and until the trustee had become imbecile, without making any demand, or claim of any kind, of or against the alleged trustee, when he was aware in 1880 that the trustee practically denied the trust, considering the further fact that the trustee was financially able to respond to any just claim the plaintiff had against him. In equity a long lapse of time destroys remedies for rights, when no explanation is made for tbe neglect to attempt tbeir enforcement. I think, also, that the evidence clearly shows that Lawrence had repudiated the trnst as early as 1880, and the plaintiff knew of it. I refer to plaintiff’s letter to Whitney, dated March 1, 1880. The law is that the statute of limitations begins to run against a claim growing out of a trnst from the time the trustee repudiates the trust and the cestui que trust has notice. These views are fully sustained by the following authorities: Prevost v. Gratz, 6 Wheat. 504; Lansdale v. Smith, 106 U. S. 391, 1 Sup. Ct. Rep. 350; Hammond v. Hopkins, 143 U. S. 273, 12 Sup. Ct. Rep. 418; Philippi v. Philippe, 115 U. S. 157, 5 Sup. Ct. Rep. 1181. If it be true, therefore, that’ Lawrence denied the obligation of the trust, and the plaintiff had notice, the statute of limitations of the Territory of Utah bars this suit. 2 Comp. Laws, 1888, § 3150. As to the claim of interest in the personal property, and in the real estate in Detroit, and the rents and issues and profits thereof. Id. § 3132. So, if I have construed the evidence rightly, this suit is barred both on account of the laches of the plaintiff and the statute of limitations.

As the evidence in the record very clearly supports the decree it is not necessary to consider the errors assigned as to the finding of facts. But there is another error assigned that should be passed upon. The plaintiff offered himself as a witness, and the trial court excluded his testimony, as to all matters equally within his knowledge and that of the decedent. This is claimed to be error. We think not. This testimony comes clearly within the terms of the statute. It is not only a claim against an estate, but one for many thousand dollars, and I think the trial court held rightly on that point.

Considering the staleness of the claim, the fact that the claim had not been pressed for more than eleven years; that the decedent practically denied the trust, and which the plaintiff knew as early as 18S0, and from that time the statute of limitations began to run,— the judgment must be 'affirmed.

The foregoing opinion is applicable to the case of John N. Whitney against the same defendants. Therefore the^ judgment in that case is affirmed.

ZANE, C. J., concurred.

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Dissenting Opinion

MINER, J.,

(dissenting):

I cannot concur with my brethren. In my opinion, there is no testimony found in the record of either case tending to show that Lawrence had repudiated the trust, or .that Wood or Whitney had any notice of such repudiation. To my mind, the testimony leads to a contrary conclusion. Nor had the statute of limitations run against either claim at the time of the commencement of these actions.