Powell v. Yearance

67 A. 892, 73 N.J. Eq. 117, 3 Buchanan 117, 1907 N.J. Ch. LEXIS 24

• Court: New Jersey Court of Chancery
• Decided: October 7, 1907
• Status: Published

Opinion

Emery, V. C.

(after statement),

On the questions argued or stated at the hearing before me, I reach the following conclusions: •

First. As to the defendant Mrs. Yearance, the decree entered on remittitur in this case is, for the purposes of this hearing, a final decree as to the character and extent of her liability, and of the liability or charge upon tire share of, or interest in, the Randall estate to which she is entitled.

Second. As to the ■ defendants other than Mrs. Yearance, the original final decree of -the court of chancery, directing that the whole amount claimed 'by the complainant be charged upon the share of the defendant Yearance in the Randall estate, is not a final adjudication in favor of the defendants other than Mrs. Yearance, whose shares in the estate- were sought to be charged. There was no dismissal of the bill as against these defendants other than Mrs. Yearance, claiming interests, in the- Randall estate, nor was there any decree discharging the executors from any payments other than out .of Mrs. Yearance’s share.. In the absence -of any express adjudication or decree in favor of the other defendants by dismissal of. the bill as to them,, or .otherwise, any discharge of these defendants from further liability .on the bill could only be indirect or by way of inference from the decree, and was subject to any change or modification which might be made on appeal from the decree.

As to the modifications of the decree which were made by the court of errors and appeals, I must take the final decree entered January 18th, 1904, on remittitur, on notice to all parties, as conclusive for the purposes of this hearing. Inasmuch as the defendants other than Mrs. Yearance were not made parties to the appeal and were, not heard in that court as to the reversal of the decree in chancery, or the form of decree to be entered on appeal, the decree of January 18th, 1904, is probably, as to them, only an interlocutory decree made before final.hearing and in the course of this suit, and as such, under our practice declared to be settled in Pennington v. Todd, 47 N. J. Eq. (2 Dick.) 569 (Court of Errors and Appeals, 1890), may be subject, after final decree on this hearing, to review by the court of errors and appeals, in respect to its being a proper construction of its opinion. Even as to parties to the appeal and bound by the decree .on appeal, the rule is that a second appeal will, lie to bring up proceedings subsequent to the mandate on remittitur, and this may involve the.question whether the decree follows the direction of the appellate court. 2 Fost. Fed. Prac. (3d ed.) § 519, citing interai Stewart v. Salamon, 97. U. S. 361 (1878), where.Chief-Justice Waite says on the subject: “An appeal will not be entertained by this court from a decree entered in the circuit or other inferior court, in exact accordance with .our mandate upon a previous appeal. Such a decree when entered is, in effect, .our decree, and the appeal would be taken from ourselves to ourselves. If such- an appeal is taken, however, we will, upon the application of the appellee, examine the decree entered, and, if it conforms to the mandate, dismiss the case, with costs. If it does not, the case will be remanded with appropriate directions for the correction of the .error.” This, review on second appeal .for the purpose .of correcting any error of the subordinate court in entering the decree on .the mandate^ is specially necessary, in cases like the present, where'the remittitur-on appeal did not expressly state the terms of the decree, but directed that it be entered in conformity with the opinion filed. There can be no question, I think, that the defendants not-parties to the appeal, may, by appeal, ■ question the correctness of the decree entered on remit tiiur, if it is claimed to affect them. The general rule is that all parties to the record who may be' affected by the reversal of a decree should be inade parties' to the appeal. Davis v. Mercantile Trust Co., 152 U. S. 590, 593 (1893), and I think that if application had been made,‘the court of errors and appeals might have reqúiréd the defendants, other than Mrs. Yearance, to be máde parties, for the reason that as the decree directed that she should pay the whole amount originally claimed by the complainant from all defendants, and the complainant, who was entitled to but one páymenü, did not appeal from that decree, their interests would or might be 'affected by any reversal or modification which would leave the complainant free’to further pursue them, as she has now done. But the question of necessary parties on- any appeal is one for the final judgment of the court of'errors and appeals, and the only practical effect of a decision in appeal, without all'the parties interested being parties to the appeal, would Seem tó be that on a subsequent appeal by persons not parties to the previous appeal, the questions decided in the appellate court may be open for a second argument. On this branch of the cáse I conclude, 'therefore, that as to the defendants other 'than Mrs. Yearance, the question whether their shares or interest in the Randall estate are charged with.the payment of the sum claimed by complainant (and not charged on the Mrs. Yearance share), is still open for final determination, and that under the decree of January 18th, 1904, the proofs previously taken are to be considered. ' ‘ '

Third. The objection that, upon the proofs, no decree can be made other than a decree for specific performance against Mrs. Yearance, of the Brunswick' street lot, and that this is the only decree to which complainant is entitled on these proofs, must- be overruled, so far' as it is' relied on as a legal' or formal'objection to á decree- other than one of specific performance On such proofs. This is upon the ground that'the'decision on appeal in Powell v. Yearance lias tlie force of a precedent, which settles as a matter of law and practice, that on a bill of this character, supported by these proofs, a decree charging the respective shares of the legatees in the hands of the executors, for payment of the amounts respectively due, can be made. In reference to this objection, it may be further observed that the bill specifically prayed such payment and did not pray specific performance; that the decree for conveyance originally directed by the court of chancery practically made the conveyance an optional method of payment and was so construed by the court of errors and appeals, and that the decree on remittitur (by which I am concluded) directed payment of a proportionate amount, without any option for conveyance, this feature of the original decree being omitted.

Fourth. On the facts of the case appearing by the proofs, I reach the same conclusions as those arrived at by Nice-Chancellor Reed, and by the unanimous opinion of the court of errors and appeals, viz., that the testator desired to alter his will which had been prepared for signing, so as to devise to Mrs. Powell a house which he then supposed he owned as part of his estate, and on being informed that this could not be- done, because Mrs. Yearance owned the house, he then proposed to change his will, so as to give Mrs. Powell the sum of $4,500, which he then fixed as the value of the house; that Mrs. Yearance, with the object of inducing him to sign the will as drawn, and not to delay signing for the purpose of making the change, assured him that this would be all right, and I. find that the will was signed as drawn on the faith of this assurance. This assurance was not made in the presence of any of the other devisees, and their first knowledge or information of it was after testator’s death. This assurance, as I further find, was given not with any object or purpose of taking any future advantage, but, solely for the reason that Mrs. Yearance and all the parties then present believed the physical condition of the testator to be such as to render dangerous any delay in the execution of the will for the purpose of making the change.

Fifth. That a promise or assurance thus made, impressed on the share of the estate coming to Mrs. Yearance, a trust for .the. purpose of carrying out the promise by the payment of her proportionate share, was finally decided on the appeal in this cause, and settled as the law of the state. The question left open and undecided is, whether -as to the other devisees and legatees entitled to shares in the estate the promise of Mrs. Yearance, one of the beneficiaries, and the testator’s reliance on it, by leaving out of his will'a direction for-payment of the $4,500, to which all of the shares would have been subsequent or subject, impresses a trust upon the shares of the estate other than those of Mrs. Yearance. Trust, in cases of this character, are impressed on the ground of fraud, actual or constructive,-and ’the basis or ground upon which fraud is imputed is that of holding the estate of testator against conscience. It is not based necessarily on any imputation of fraud, or intention to defraud, at the time of making the promise, but of afterwards holding or attempting to hold the estate," as if the promise, on which "the estate was received in its original condition, had not been made. The fraud consists in holding, or attempting to hold, the estate free from the effect or obligation of a promise, subject to which it was intended to be devised and received and which it is obligatory in conscience to cany out. Where the estate or interest therein is thus received by the person who made the promise, the attempt to hold the estate without performing the promise is an actual fraud, for the reason that the recipient having actually made the promise, knows personally of the obligation, and is guilty of actual fraud in holding, or attempting to hold, the estate without performing the promise, so far as his interest in the estate extends. As to such promisor, it is clearly not a question of modifying or cutting down plain and ambiguous devises in a will, by parol evidence or unattested papers, in violation of the statute of frauds or of wills, for the devise to the promisor is not modified, but he is dealt with as a holder by fraud of property under the will, and a trust ex maleficio is raised from these facts. Williams v. Vreeland, 32 N. J. Eq. (5 Stew.) 136 (Chancellor Runyon, 1880); In re Will of O'Hara, 95 N. Y. 403 (1884), and cases cited (at pp. 413, 414) ■ And where the promise or assurance, on the faith of which-an estate or interest is devised to two or more persons as joint tenants, is made by one of the joint tenants, the'trust is enforced against all, on the ground that in relation to an estate thus jointly- devised the promise of -one joint tenant binds all equally. In re Will of O’Hara, supra (at p. 413), and eases there cited. As all the joint tenants must hold equal and the same estates, and the estate of all the joint tenants was devised on the promise -of one, and all got their rights through the promise of one, it must follow that the joint estate held equally by all is affected by the promise of one, and the retention of the estate on their part, after information or proof of the fraud of their joint tenant, becomes fraud on their part.

But where the devise or bequest is to several persons, either severally or as tenants in common and not as joint tenants, and some of the tenants have had nothing to do with the making of the will, other and different considerations arise, and a distinction has been made. As to such devisees or legatees receiving estates by will, the case involves the application both of the statute of wills and the statute of frauds, and the decisions seem to be almost uniform that where the interest claimed to be charged is devised or bequeathed in severalty or in common, the beneficiary does not in equity hold' the estate as bound by the obligations or assurances to the testator of another beneficiary or tenant in common. It is considered that to give effect to such assurances would contravene the statute of wills and would entitle one beneficiary to deprive the rest of their benefits by setting up a secret trust. Tee v. Ferris, 2 Kay & J. 357 (Eng. Ch.) (Vice-Chancellor Wood, 1856); Robotham v. Dunnett, L. R. 8 Ch. Div. 430 (Vice-Chancellor Malins, 1878); In re Will of O’Hara, supra.

Trusts based on the actual fraudulent conduct of a person in the procuring of a devise either to himself alone or to himself and others, stand upon a different ground, and the settled rule in such cases is that the interests thus obtained by a third person by means of the fraud of another cannot be retained. Bridgeman v. Green, 2 Ves. 627 (Lord-Chancellor Hardwicke), and Huguenin v. Baseley, 14 Ves. 273 (Lord Eldon, 1807), in which interests or estates in remainder were granted or devised to members of the family of the person guilty of fraud in procuring the estate, are the leading eases on this point.-

In Hooker v. Axford, 33 Mich. 453 (1875), the devise by the testatrix was to two persons, an attorney and a third person named by the attorney, upon a secret trust for the husband of the testatrix. It does not appear by the report whether the estate was held in common or in joint tenancy, but it was satisfactorily proved that the devisees were intended to be trustees, and that the third person had recognized the trust. In this case the one-half of the legal title devised to the third person was held, under the facts proved, to be subject to the trust, in favor of the husband, although this grantee had nothing to do with procuring the devise, but this devisee was apparently a stranger to the testatrix, and the case cannot be considered as authority for imposing a trust upon the shares of a testator’s estate given in severalty to his children, by reason of promises of another child, of which they had no knowledge.

The statutes of frauds and of wills are operative in. equity, and the relief from them, in cases of this general character, is upon the equitable principle, that statutes to prevent frauds are not to be used as instruments of fraud, and where the grant of the estate was not procured by actual fraud on the testator, the only basis of imputing fraud is in the holding of an estate under the will, after proof that the testator gave the estate, intending or supposing that it would be charged with a burden or trust. But the statute of wills covers such cases by expressly defining the character of proofs required.

Treating the question as an open one on this hearing, I should advise therefore that the proof of the trust alleged is not made out against the defendants other than Mrs. Yearance, by competent evidence. But the question as to these defendants seems to be controlled in this court by the' opinion of Vice-Chancellor Eeed on the original hearing. In his opinion he holds the, shares of the other tenants in common, Frederick and Edith, not chargeable with any trust, because there was not, on the part of either, toward the testator, any promise or conduct on which he relied in leaving the will unaltered.

On the point of this necessity of personal fraud and that they were not bound by Mrs. Yearance’s fraud, this decision is a precedent. The suggestion of the court of errors and appeals in reference to their liability entitled the complainant to a further consideration of the question in this court,-and especially as the authorities were 'not specifically referred to in the opinion in either court. On such further consideration, I follow the decision of Vice-Chancellor Reed as a precedent controlling my decision, and based on sound reason and equity, and will advise the dismissal of the bill as to the defendant devisees other than Mrs.. Yearance and the executors.'