Young v. Shepard's Estate

| Mich. | Jul 7, 1900

Grant, J.

(after stating the facts). Counsel for plaintiff contend that there is no evidence of fraud, misrepresentation, or want of consideration. This presents the principal issue, and renders necessary careful examination of the circumstances surrounding the transaction, and the testimony of a large record. The note itself imports a valid consideration, and, its execution being admitted, the onus is cast upon the defendant to show its invalidity. It could only do this by making Mrs. Lockerby its witness, as she and Mrs. Shepard were the sole witnesses to the execution of the note and the consideration for it. There is no pretense that Mrs. Shepard was not competent to execute it. She wrote it herself. She recognized the validity of the first note by making payments thereon, and finally by taking it up, and giving another in its place, and by making five payments upon that. Thus, .for more than three years she did not question the note, but by solemn acts recognized its validity. She executed the deed to Mrs. Lockerby, and was one of the executors of her husband’s will, and it is a just conclusion that she was familiar with the entire situation. There is no evidence that she was not. The jury found the original and renewal notes valid to the extent of $3,900, of which $3,400 had been paid by Mrs. Shepard during her lifetime; the verdict being for the other $500. How they reached this is a matter of conjecture.

Defendant seeks to limit the consideration to the rents received by the assignee and Mrs. Lockerby’s payments to her attorneys. Defendant’s counsel concede in their brief that the gross receipts of the assignee while he held possession were $4,684.54. They claim the expense of the assignee during that time was $1,944.05, leaving a net balance of $2,740.49; to which add the attorney’s fees, and the total would be $3,709.58. But why should Mrs. Lockerby pay the assignee for collecting these rents, and taking care of the property, when she herself, under the claim of the defendant, was entitled to the possession of the property and to the collection of the rents ? If this be the theory of the verdict, I see no reason why Mrs. Lockerby was not entitled to a verdict for $5,653.63 and interest, less what Mrs. Shepard had paid her. This would entitle her to a verdict of $2,253.63 and interest. In one of defendant’s requests to charge, which was given, counsel state their claim on this point as follows:

“The defendant claims that the gross rents of the property from October 10, 1892 (the date of Alice G. Lockert^’s proposition to purchase), down to May 10, 1893 (the date when the litigation was settled and the property given into her possession), amounted to $4,666.38, or, including doubtful items, $5,202.98, and that the net rents for the same period were only $2,722.87. It is further claimed by the defendant that the law bills paid by Alice G. Lockerby on account of litigation did not exceed the sum of $625. And it is claimed by the defendant that, in any event, Alice G. Lockerby would not be entitled to recover on account of the note any more than the total of her law bills and the rents which she had lost on account of the litigation, less the payments _ which Dorinda N. Shepard made upon the note, which payments the evidence shows amount to the sum of $3,300.”

There is no testimony to show that the charges of the assignee for collecting rents were to be deducted. Mrs. Lockerby had evidently expended all her means in the purchase of this property. She was unable to make her payments without its possession and the income therefrom. Her attorney had advised her that the estate of Mr. Shepard ought to pay something to secure a settlement. Both she and her attorney had tried to induce Mr. Norris, the principal executor of the estate, to thus assist in a settlement, but he declined, claiming that the estate was not liable. But, notwithstanding his opinion, the injunction was retained by the court for seven months against strenuous efforts to dissolve it. Mrs. Shepard was an executrix and the devisee of a large amount under her husband’s will. The bill filed by the assignee charged her husband with fraud. It was not only laudable, but legal, for Mrs. Shepard to pay money or give her note to effect a settlement, close the litigation, and release the estate from the expense of litigation. She knew that her co-executor declined. She chose, therefore, to do it herself.

While it is true that Mrs. Lockerby was unable to state the exact amounts which went into the note, five or six years afterwards, I think it entirely clear that Mrs. Lockerby made no false representations, and that Mrs. Shepard fully understood the situation, and voluntarily gave this note to compensate her for losses and to end the litigation. It was argued to the jury, and is argued here, as a suspicious circumstance, that this settlement was made by these women without the knowlédge of, or consultation with, their attorneys, and that they kept the settlement secret. Mrs. Lockerby testified that Mrs. Shepard expressly requested her to keep the matter secret. There is nothing suspicious in their doing so, especially in the face of the fact, testified to by Mr. Norris, that 14 other notes were presented against Mrs. Shepard’s estate, of which he had no notice or knowledge until they were presented for probate. Such circumstances are not badges of fraud. I think it manifest that Mrs. Lockerby lost in the transaction the full amount of the note. But, whether this be so or not, the main point was the settlement of the litigation, and getting the property of all the parties out of the courts, and saying the expense of further litigation.

A full statement of the testimony would make this opinion of unnecessary length, and be of no benefit to the profession. I think the court should have directed a verdict for the plaintiff. This disposal of the case renders it unnecessary to discuss the other assignments of error.

Judgment reversed, and new trial ordered.

The other Justices concurred.