Brooke v. Berry

2 Gill 83

• Court: Court of Appeals of Maryland
• Decided: December 15, 1842
• Status: Published

Opinion

Dorsey, J.,

delivered the opinion of this court.

We do not think that the exceptions taken by the defendant to the averments in the bill of complaint can be of any avail to him; regarding the bill as sufficiently charging, if established by proof, that the defendant’s title to the land in controversy was obtained by fraud; that if not obtained by fraud, it was acquired from Elisha Berry, a man of such feeble intellect as to be incompetent to the management of his own business, by William F. Berry, the defendant, his agent for the transaction of all his business, in whom he reposed entire confidence, under such circumstances of abused confifidence or practised imposition, or under terms so unjust and unequal, as would affix to it the seal of condemnation, when brought to the view of a court of equity.

Neither can the defendant be benefitted by his exceptions to the proof taken under the commissions, issued for that purpose, because the only tendency of the proof, elicited under those portions of the complainants’ interrogatories which are justly obnoxious to the exceptions taken to them, is to establish facts admitted in the defendant’s answer, or satisfactorily proved by other testimony in the cause, which stands exempt from all objection. Nor is there any force in the defendant’s exception to all the testimony returned under the ex parte commission on the ground that it was vacated and set aside by the Chancellor’s order rescinding the interlocutory decree for the purpose of letting in the defendant’s answer. The third section of the act of 1820, ch. 161, expressly providing that “the filing of such answer or answers shall in no case affect the validity of any commission previously issued to take testimony, or of the proceedings, or any of them, under such commission, or of any testimony previously taken and returned under any such commission.” All the proof under the ex parte commission was taken prior to the rescission of the interlocutory decree on wrhich it issued, and its efficacy is the same, whether previously, or subsequently returned.

There is no ground for the defendant’s exception to the testimony under the ex parte commission, that it wms taken without any notice having been given to the defendant or to his solicitor. No such notice was requisite. The defendant having no power of offering testimony before the commissioner, or of cross examining the witnesses produced on the part of the complainant.

The exceptions of the complainants to the testimony, on the part of the defendant, offered to prove the good character and upright conduct of William F. Berry, we think were well taken. Such evidence being inadmissible in this cause. As authority for which, see note 339 of 2 Cowerfs Phil, on Ev. 456.

These preliminary questions being disposed of, we are brought to the consideration of the real merits of this controversy, as they appear upon the record before us. The allegation of actual fraud, as charged in the bill, has not been proved, and was not insisted on in the argument for the appellants. But it is contended that the feebleness of the intellect of Elisha Berry ; the condition in which he stood in relation to the appellee, his agent for the transaction of all his business; the inadequacy of the price alleged to have been paid for the land conveyed, and all the circumstances surrounding the transaction, are of such a character, that they can receive no countenance from a court of equity; and that the deed complained of ought to be vacated. And in this view of the case we entirely concur. The agency of William F. Berry in the transaction of all the business of Elisha Berry is admitted by the answer and proved by not less than eight witnesses. As to the feebleness of Elisha Berry's intellect and his incapacity to transact his own business, there is a great contrariety of evidence, twelve witnesses having deposed to the existence of such feebleness and incapacity and nine against it. But the opinion of the twelve are corroborated by the declarations of William F. Berry himself, who, at different times, to three different individuals, whose testimony is before us, and to one of them on more occasions than one, stated that his brother Elisha was incapable of transacting his own business. Looking then to this testimony only, and the number of witnesses testifying for each party upon the simple question of mental capacity, there would be perhaps a sufficiency of evidence, not only to control the positive denials in the answer, but also to entitle the appellants to the relief which they have sought. And when we connect this testimony with the relation in which the appellee stood to Elisha Berry, as his agent for the transaction of all his business, and with the fact that the land has been purchased greatly below its value, we cannot see how, consistently with the well established principles of equity, we can withhold relief from the appellants. By averaging the valuations fixed, on the land in question, by the eighteen witnesses who have deposed as to its value, instead of being sold, according to the alleged contract, for three thousand seven hundred dollars, six thousand five hundred and twenty dollars ought to have been paid for it. And this estimate of its value is strongly sustained by the nine witnesses who were examined as to what was a fair yearly rent for the land. By an average of their testimony the yearly rent would be $347.21; the capital to raise which, by an investment in land producing an interest of five per cent, (which is deemed a remunerating income from investments in land in the country,) would be $6,944. And fixing the rate of interest to be derived from such an investment at six per cent, per annum, would be $5,787.

The guards and limitations which a system of enlightened jurisprudence has cast around the dealings of principal and agent, have been so accurately defined by Justice Story, in Ms 1st vol. of Commentaries on Equity, 310, section 315, that we deem it, in this case, unnecessary to cite any other authority on the subject. After treating in the preceding section of the connexion between guardian and ward, trustee and cestui que trust, &e., and of what transactions between them shall stand: In the 315 section, in speaking of the relation of principal and agent, he says: “this is affected by the same considerations as the preceding, founded upon the same enlightened public policy. In all cases of this sort, the principal contracts for the aid and benefit of the skill and judgment of the agent, and the habitual confidence reposed in the latter, makes all his acts and statements possess a commanding influence over the former, indeed, in such cases, the agent too often so entirely misleads the judgment of his principal, that, while he is seeking his own peculiar advantage, he seems, too often, but consulting the advantage and interests of his principal.” “It is, therefore, for the common security of all mankind, that gifts procured by agents, and purchases made by them from their principals, should be scrutinized with a close and vigilant suspicion. And indeed considering the abuses which may attend any dealings of this sort between principals and agents, a doubt has been expressed, whether it would not have been wiser for the law in all cases to have prohibited them, since there must always be a conflict between duty and interest on such occasions. Be this as it may, it is very certain that agents are not permitted” “to deal validly with their principals in any cases, except where there is the most entire good faith, and a full disclosure of all facts and circumstances, and an absence of all undue influence, advantage, or imposition.” If these principles of Justice Story be correct when applied to dealings between principal and agent, where the mind of the principal is exempt from all imputation of imbecility, what must be their influence when applied to a case like that, now before this court.

But in arriving at the conclusion we have formed in reference to the case before us, we are not compelled to rely solely on the oral testimony in the cause to convince us of the incapacity of Elisha Berry to transact his own business; of the excess of confidence reposed by him in the appellee, and the undue influence exerted over him by the latter. The acts of Elisha Berry and William, F. Berry, as shown by the documentary evidence and oral testimony in relation thereto, irresistibly impel us to the opinion we have before expressed. Elisha Berry, it appears, has been in a state of wardship from the time of marriage till his death. If possessed of sufficient intellect to transact his own concerns, why should this have been? In 1829, William F. Berry for the first time became his agent for the transaction of all his business, and so continued until 1833, when he was superseded by Richard H. Marshall being appointed his successor. The first act of the administration of William F. Berry, which has been brought to our notice, is the obtaining from Elisha Berry the deed of the 21st of June 1831, for Springfield or Good Luck, containing upwards of five hundred acres of land (being his dwelling plantation) and ten negroes, all his household and kitchen furniture, plantation utensils and all the stock belonging to Elisha Berry, with a general warranty. Such a deed, for a merely nominal consideration, from a farmer, having a wife and children dependent on him for support, without any explanatory circumstances to sustain it, would bear, upon its face, internal evidence of mental imbecility in the grantor almost amounting to idiocy or lunacy; or that he had been the victim of undue influence; or been so overreached or imposed upon that the interposition of a court of equity, for his relief, would follow as a matter of course. And the presumptions against this deed are strongly fortified by the inconsistent conduct of the appellee, who, when superseded in his agency by the appointment of Richard II. Marshall in 1833 to a bill filed against him, in Prince George’s county court, by Elisha Berry and Richard II. Marshall to set aside the said conveyance, though denying almost every allegation in the bill, insisted on the said conveyance as a fair and bona fide deed of gift from his brother Elisha Berry, voluntarily and freely made, and at his own instance and suggestion. Whilst to his solicitor he stated, notwithstanding the imputations cast upon him by the bill, that he had no design to keep the property against Elisha Berry’s children, but only wished to prevent Richard II. Marshall from having any control over it. And yet, instead of going to his brother and having a full explanation upon the subject, and re-conveying the property to him, or some other person, other than the said Richard II. Marshall, we find the said William F. Berry, a few months after the filing of his answer, voluntarily reconveying the whole of the property, both real and personal, mentioned in the said alleged deed of gift, to Richard H. Marshall, in trust for Elisha Berry and his heirs. If this deed to William F. Berry was, as stated in his answer, a fair and bona fide deed of gift, made at the instance and suggestion of Elisha Berry, why was the property given by it suffered to remain in the hands of the donor from the date of the deed in 1831, till the filing of the bill for its recovery in 1833, without the slightest evidence, as far as the record discloses, of any demand of possession or assertion of title on the part of William F. Berry (then very poor according to all the proof,) to any portion of the property conveyed to him. As fraud is expressly denied by his answer, we can only account for his conduct by supposing him conscious of the mental imbecility of his brother, and of the invalidity of the conveyance executed in his favor.

In 1836, Richard H. Marshall having been dismissed from the service of Elisha Berry, he restored to his favor and confidence William F. Berry, and clothed him with his former plenary powers, as agent: who, as stated in his answer in the case now under consideration, purchased of his brother, in the beginning of the month of December of that year, two hundred and forty-two and a half acres of land, as is alleged, at its full value; that is, $3,700. For which, however, Elisha Berry had three years before paid $3,750, and had been offered for it by Benjamin Duvall, the person of whom, by' his agent Richard H. Marshall, he had previously purchased it, the sum of $6,112.50, which offer had been rejected by Elisha Berry. Connecting this testimony of Benjamin Duvall, the appellee’s witness, with the average value of the lands, as derived from all the witnesses sworn on that subject, it can hardly be insisted, that the appellee has not, in a contract with his principal, obtained a conveyance of his lands at a price greatly below their value. Which of itself would induce a court of equity (apart from the mental incapacity of the principal,) to set aside the contract, unless it were shown by competent testimony, that the contract was entered into in away and under circumstances, which made it apparent, that there had been no abuse of confidence; no undue influence; no imposition or material concealments practised by the agent upon the principal, which could cast a shade of doubt as to the fairness and honesty of the transaction. In this case, the contract is supported by no such conservative testimony. And, cast in the scale of objections to it, the reasonable doubt, if not the established fact, of the great mental imbecility of Elisha Berry, and this contract of 1836, cannot stand the scrutiny of a court of equity.

If, as is alleged in the answer of the appellee, the land was designed to be sold to him for its full value, how can we, consistently with Elisha Perry’s mental capacity for the transaction of business, his exemption from undue influence or imposition, account for his selling his land for $3,700, to his agent, when he had been offered for it $6,112.50, by another person ; and there is nothing in the record to induce a belief, that he could not still have obtained it? But if all other testimony were wanting on the subject, it is difficult to conceive how the written instruments exhibited by the appellee himself, to establish the contract of 1836, can be read without exciting the strongest suspicions, if not a confident belief, in the mental incapacity of Elisha Berry for the transaction of his own business; or that this contract of 1836, was obtained from him by an abuse of confidence, undue influence, or some objectionable means. The first of these instruments is Elisha Berry's receipt to William F. Berry, for $2,000 in advance, for the lands now in dispute, which money, the receipt states, is deposited in bank, to be checked out by William F. Berry, in payment of the debts of Elisha Berry. This sum of $2,000, one of the witnesses proves, was, about the 1st of December, 1836, deposited in his own name by William F. Berry in the Bank of the Metropolis. If Elisha Berry had been capable of transacting his own business, would he have been content that the receipt which he had signed, should be the only receipt signed in relation to this $2,000? Would he not have taken some receipt or written evidence from William F. Berry, that $2,000 had been placed in his hands, to be applied to the payment of Elisha Berry's debts. Suppose William F. Berry had been unfaithful to his trust, and applied the $2,000 to the payment of his own debts; or had denied its receipt, and refused to account for it in any way, what written evidence had Elisha Berry to show the accountability of his agent ? None. Would a man of capacity to transact his own business thus deal with an agent, when placing thousands in his hands ? If he -would, it show's that he reposed a blind confidence in his agent, which should taint with suspicion all contracts, between them, for the purchase of the principal’s property. The contracting parties do not meet on equal terms. Nor would an agent, discharging his duties wdth fidelity to his principal, and protecting, as he ought to do, the interests of his principal with the same care and circumspection that he would his own, thus deal with him.

The next written instrument relied on by the appellee, as showing the fairness of his title under the purchase from Elisha Berry, is the bond of conveyance of Elisha Berry, bearing date four days after his receipt for the $2,000, viz : on the 9th day of December, 1836. It is not pretended, on the contrary, the answer of the appellee disproves it, that when the bond of conveyance was executed, there had been any other payment made on account of the land, except the two thousand dollars. And yet, by the explicit terms of this bond of conveyance, without any condition as to the payment of the balance of the purchase money, or any thing else; and without the said Elisha Berry's receiving any bond, note, or written acknowledgment for such balance, he is bound in a penalty of ten thousand dollars, on or before the first day of November next, thereafter, to make a conveyance in fee simple, clear of all incumbrances, to William F. Berry. This bond of conveyance is virtually an acknowledgement that the whole purchase money had been paid; and in case of the death or infidelity of the appellee, Elisha Berry, as far as the record informs us, had not the semblance of evidence, on which he could rely, for the recovery of that portion of the purchase money remaining unpaid. Can it be believed, that a man capable of transacting his own business, would have placed himself in such a situation ? It is no excuse for it to say, that this money was thus left in the hands of the agent, to be appropriated to the use of the principal, as occasion might require. No principal who knew what was due to himself, nor agent, who looked to the interest of his principal, wrould have assented to such an arrangement. It evinces a degree of mental incapacity, or unbounded confidence on the part of the principal, or undue influence by the agent, that prima facie, should infect and invalidate all contracts and transactions between them. There are other facts in reference to the written instruments, exhibited by the appellee, which, if weighed separately, would be esteemed of little import, but when viewed collectively and in connexion with the testimony and other facts of the case, tend to strengthen the views hereinbefore expressed. The deed of 1831, though asserted to be a voluntary deed of gift, contains a general warranty; which is rather an unusual ingredient in such a conveyance. The bond of conveyance makes the penalty for its breach ten thousand dollars; and this bond is retained by the obligee, instead of being delivered up to the obligor, at the time of his executing the deed of conveyance. This deed states the purchase money paid for the land to be $4,000, instead of $3,700, as shown by the answer, and contains a covenant of general warranty, whilst at the time of its execution, Elisha Berry is made to execute a bond of indemnity, against the claim of dower, in the penalty of five thousand dollars. In these transactions between William F. Berry and Elisha Berry, it is impossible not to see, that whilst the rights and interests of the former were provided for, and protected by every guard which could be thrown around them, the rights and interests of the latter, were disregarded and abandoned, as it were, to take care of themselves.

In pursuance of the foregoing views, this court will sign a decree reversing with costs the decree of the Chancery Court; and remanding this cause thereto, that a decree may be there passed for the annulling and cancelling the said bond of conveyance, and bond of indemnity, and the two deeds of conveyance, from the said Elisha Berry to the said William F. Berry, which said deeds bear date on the 21st day of June, in the year 1839 ; and for the sale of the lands and premises therein mentioned; and for an account between the appellants and the appellee, in which the appellee shall be charged with the rents and profits of the said lands, and be credited for his improvements thereon, during the time he shall have held and enjoyed the said lands under his alleged purchase thereof; and shall be credited with all the sums of money by him bona fide paid, on account of the said Elisha Berry, or which shall be justly due and owing from him to the said William F. Berry. The sum of $2,000 deposited in the Bank- of the Metropolis, and for which Elisha Berry gave a receipt, is not to be credited to him, the said William F. Berry, until additional proof is offered, to shew that the same has been properly applied in discharge of the liabilities of the said Elisha Berry.

And this cause is furthermore remanded, that the chancellor may pass such further orders and decrees therein, as the nature of the case may require. The items in exhibit, No 3, of defendant, to be deemed by the auditor as established, except the first of said items, of $440.32, the balance on settlement.

decree reversed, and cause remanded.