1. Where, as in this case, the evidence exhibited in the record
shows that the purchase of land was made upon certain trusts which,
through mistake, the trustee failed to have properly declared in
the deed, the
cestui que trust is entitled to a decree
directing the deed to be reformed.
2. The jurisdiction of the circuit court is not defeated by the
fact that with the principal defendant are joined, as nominal
parties, the executors of a deceased trustee, citizens of the same
state as the complainant, to perform the ministerial act of
conveying title in case the power to do so is vested in them by the
laws of the state.
MR. JUSTICE CLIFFORD delivered the opinion of the Court.
Trusts are either express or implied, the former being such as
are raised or created by the act of the parties and the latter
being such as are raised or created by presumption or construction
of law.
Cook v. Fountain, 3 Swanst. 585, 592.
Implied trusts may also be divided into two general classes:
first, those that rest upon the presumed intention of the parties;
secondly, those which are independent of any such express
intentions and are forced upon the conscience of the party by
operation of law. 2 Story, Eq.Jur., sec. 1195.
Sufficient appears to show that Sarah S. Walden, the
complainant, on the sixth day of May, 1874, filed her bill of
complaint in the court below against the respondents, to-wit,
Darius S. Skinner and John N. Lewis and Charles S. Hardee,
executors of Charles S. Henry, deceased, who in his lifetime was
the trustee of Penelope W. Tefft and her three children.
Preliminary to the charging part of her complaint, she alleges and
states that on the 28th of October, 1847, she intermarried with
William P. Tefft, who on the 9th of August, five years later,
departed this life intestate and without children, leaving the
complainant as his sole heir and legal representative; that on the
4th of June, six years subsequent to the death of her first
husband, she intermarried
Page 101 U. S. 578
with Charles C. Walden, who, on the eighth day of December of
the next year, departed this life testate, leaving no children by
the complainant, and that he by his will bequeathed to her all the
property and rights owned and possessed by her at the date of their
marriage; and that the father of her first husband died intestate
on the 30th of June, 1862, but that no administration was ever had
upon his estate, and that his widow, the mother of her first
husband, departed this life testate on the 11th of September eleven
years later; that her first husband had two brothers at the date of
her marriage, neither of whom ever married and both of whom died
without children; that at the death of the elder of the two he had
a life policy of insurance for $5,000, which his administrator
collected and paid to his two living brothers.
Allegations then follow in the bill of complaint which relate
more immediately to the subject matter of the controversy, from
which it appears that Elias Fort, June 28, 1831, conveyed a certain
tract of land to Charles S. Henry and Stephen C. Greene, as
trustees and in trust for Penelope W. Tefft and her three sons,
William P. Tefft, Henry D. Tefft, and Charles E. Tefft, and it is
therein declared that the said property is for the use of the
mother during her lifetime and the three sons, and that after the
death of the mother, it shall be for the use of the three sons
alone as tenants in common, and that in case of sale,
"the proceeds to be reinvested upon the same uses and trusts as
aforesaid, and if not sold, then the property, after the death of
the mother, was to be distributed by said trustees to each of the
said sons as shall survive and attain the age of twenty-one
years."
Greene, one of the trustees, subsequently died, leaving Charles
S. Henry the sole surviving trustee under the trust deed, and she
charges that on the 19th of July, 1848, the Mayor and Aldermen of
the City of Savannah conveyed to him as such trustee a certain lot
of land numbered five, Monterey Ward, in said city, the lot being
then subject to certain annual ground rents, as specified in the
conveyance, and the complainant avers that the conveyance is
informal and incomplete inasmuch as the trustee never signed it, as
it was intended, and that it fails to set forth and express the
trust interests of the three children
Page 101 U. S. 579
as it should do. Wherefore she alleges that it should be
reformed and be made to conform to the purposes of the trust as
created and set forth in the original trust deed.
Persuasive and convincing reasons in support of that request are
alleged which will hereafter be reproduced when the merits of the
controversy are considered.
Relief specific and general is prayed, as is more fully set
forth in the transcript. Process was served, and the respondents
appeared, and after certain interlocutory proceedings filed
separate answers.
All of the defenses to the merits are set up in the answer of
the first named respondent, who admits all of the preliminary
matters alleged in the bill of complaint. He also admits that there
was in existence at the time of the first marriage of the
complainant the trust estate held by the surviving trustee arising
under the conveyance from Elias Fort to the said two trustees,
which, as he alleges, was held for the sole and separate use of the
mother during her life, and remainder at her death to her three
sons as tenants in common.
Prior to that transaction, there is no controversy between the
parties as to the facts, and he also admits that the authorities of
the city conveyed the lot called Monterey Ward to the surviving
trustee, but he alleges that by the terms of the conveyance, the
legal title to the lot vested in the trustee in trust for the sole
and separate use of the mother, the trust being executory only so
long and for such time as the
cestui que trust should
remain a
feme covert, and he denies that the conveyance is
informal and incomplete in any particular, or that it was ever
expected or intended by anyone that the trustee should sign the
same, and he avers that it was accepted by the trustee for the
purposes therein set forth.
Attempt is also made to enforce that view by a specific denial
of most of the reasons assigned in the bill of complaint in support
of the request that the conveyance to the trustee of the lot called
Monterey Ward may be reformed so as to conform to the trusts
created and expressed in the antecedent trust deed.
Both of the other respondents allege that they are citizens of
the state where the suit is brought, and deny that the circuit
Page 101 U. S. 580
court had any jurisdiction to make or execute any order,
judgment, or decree against them in the premises.
Proofs were taken, the parties heard, and the circuit court
entered a decree in favor of the respondents dismissing the bill of
complaint. Prompt appeal was taken by the complainant to this
court, and since the appeal was brought up, she has filed the
assignment of errors set forth in the brief of her counsel. They
are ten in number, all of which will be sufficiently considered in
the course of the opinion, without giving each a separate
examination.
Before examining the questions presented in respect to the
second deed, it becomes necessary to ascertain the true
construction and meaning of the original trust deed so far as
respects the second trust therein created and defined. Eight
hundred dollars constituted the consideration of the conveyance,
and it was made upon the trust that if, during the lifetime of the
mother of the three sons, it should be deemed advisable by her to
sell and convey the premises, then upon this further trust that the
trustees as aforesaid, or the survivor of them, upon her
application and with her consent, signified by her being a party to
the conveyance, will sell and convey the lot and improvements, for
the best price which can be obtained for the same, to any person or
persons whatsoever, without applying to a court of law or equity
for that purpose to authorize the same, and the proceeds thereof
upon the same trusts as aforesaid to invest in such other property
or manner as the mother of the sons shall direct and request for
the same use, benefit, and behalf.
Explicit and unambiguous as that provision is, it requires no
discussion to ascertain its meaning, nor is it necessary to enter
into any examination of the third trust specified in the
conveyance, as it is conceded that the trust property was sold by
the surviving trustee for reinvestment during the lifetime of the
mother at her request, she joining in the conveyance as required by
the terms of the instrument creating the trust.
Twenty-four hundred dollars were received for the conveyance of
the trust property, and all of that sum, except $600 turned over to
the mother, was invested in buildings then being erected upon lot
numbered five, called the Monterey Ward.
Page 101 U. S. 581
Purchase of that lot had previously been made by the surviving
trustee named in the original trust deed, and it appears that the
parties understood that it was to be upon the same uses and trusts
as were contained in the trust deed by which the title to the lot
sold was acquired.
Proof that the new lot numbered five, called Monterey Ward, was
purchased by the father and the three sons during the lifetime of
the father seems to be entirely satisfactory, and it is equally
well established that each contributed one-fourth part of the sum
of $240 paid for the purchase money of the lot. Satisfactory proof
is also exhibited that Henry D. Tefft, one of the three brothers,
died Aug. 13, 1849, unmarried and intestate, and that he had a
valid subsisting insurance upon his life in the sum of $5,000,
which his administrator collected and paid to his surviving
brothers.
Eighteen hundred dollars of the proceeds arising from the sale
of the property acquired by virtue of the first trust deed were
appropriated towards erecting buildings on the new lot purchased by
the father and the three sons while in full life, and when the one
whose life was insured deceased, the two survivors appropriated
each his proportion of the money received to the same purpose, with
the understanding that the property was subject to the same uses
and trusts as the property previously acquired and sold.
Competent proofs of a convincing character are also exhibited in
the transcript that the first husband of the complainant
contributed other sums towards completing the buildings, leaving no
doubt that he paid his full proportion for the improvements as well
as for the lot purchased of the city authorities.
Enough appears to show that the buildings were completed more
than two years before the first husband of the complainant died
intestate and without children, when it is obvious that she became
the sole heir to all the interest he possessed in the said estate,
whatever it might be. Two years elapsed after the buildings were
completed before the father of the three sons died, and the proofs
show that during that period, the complainant resided with the
parents of her husband, and that her rights as his heir-at-law were
uniformly recognized by the family; that she continued to reside
there with her mother-in-law after
Page 101 U. S. 582
the death of the senior Tefft until the decease of his widow,
and that throughout that period, she paid one-half of all repairs,
taxes, insurance, and other expenses of the property as if she were
equally interested in the same with her mother-in-law and was
liable to bear an equal proportion of all such expenses.
Opposed to that is the proof that the mother-in-law, one year
before her death, when in a low and depressed frame of mind,
bequeathed the whole of the lot in question to the first-named
respondent, who is her nephew, and on the same day executed a deed
to him of the entire property, to take effect in possession after
her death. Sole title to the premises in fee simple is claimed by
the respondent under those instruments, and he brought ejectment
against the complainant to dispossess her of the premises, and it
appears that she was at great disadvantage in attempting to defend
the suit because the trustee had omitted to see that the title was
conveyed in trust for the benefit of the
cestuis que trust
as in the prior trust deed, as he should have done, to carry into
effect the understanding of all the parties to the sale of the
prior trust premises and the purchase of the lot in question. What
she alleges is that the purchase of the new lot was made for the
same
cestuis que trust as those described in the deed of
the old lot, and that the understanding of all was that the deed of
the new lot should contain and declare the same uses and trusts in
favor of the same persons, and the proofs to that effect are full
and entirely satisfactory.
Support to that view is also derived from the fact that the
surviving trustee in the old deed is the grantee in the new deed,
and that he is therein more than once described as trustee, and in
the introductory part of the instrument is denominated trustee of
Mrs. Penelope W. Tefft, wife of Israel K. Tefft, of the city and
state previously mentioned in the same instrument.
Ten years before the suit was instituted, the trustee in the new
deed departed this life, and the other two respondents were
appointed and qualified as his executors. Unable to obtain complete
redress at law, the complainant prays that the deed of conveyance
from the city of the lot and improvements in question may be
reformed and be made to conform to the true intent and purpose for
which the lot was purchased, and to
Page 101 U. S. 583
that end that it may be made to include the same uses and trusts
raised, created, and declared in the prior deed from Elias Fort,
according to the understanding and agreement of all the
parties.
Besides that, she also prays that her equities in and to the
property, including the improvements, may be set forth, decreed,
and allowed by the court, including such as are in her favor from
the payment of taxes, insurance, and repairs upon the property
during the lifetime and since the death of her mother-in-law, and
that the first-named respondent may be enjoined from further
proceeding in his ejectment suit to recover possession of the
premises.
Courts of equity afford relief in case of mistake of facts, and
allow parol evidence to vary and reform written contracts and
instruments, when the defect or error arises from accident or
misconception, as properly forming an exception to the general rule
which excludes parol testimony offered to vary or contradict
written instruments. Where the mistake is admitted by the other
party, relief, as all agree, will be granted, and if it be fully
proved by other evidence, Judge Story says, the reasons for
granting relief seem to be equally satisfactory. 1 Story, Eq.Jur.,
sec. 156.
Decisions of undoubted authority hold that where an instrument
is drawn and executed that professes or is intended to carry into
execution an agreement, which is in writing or by parol previously
made between the parties, but which by mistake of the draftsman,
either as to fact or law, does not fulfill or which violates the
manifest intention of the parties to the agreement, equity will
correct the mistake so as to produce a conformity of the instrument
to the agreement, the reason of the rule being that the execution
of agreements fairly and legally made is one of the peculiar
branches of equity jurisdiction, and if the instrument intended to
execute the agreement be from any cause insufficient for that
purpose, the agreement remains as much unexecuted as if the party
had refused altogether to comply with his engagement, and a court
of equity will, in the exercise of its acknowledged jurisdiction,
afford relief in the one case as well as in the other by compelling
the delinquent party to perform his undertaking according to
the
Page 101 U. S. 584
terms of it and the manifest intention of the parties.
Hunt v. Rousmaniere's
Adm'rs, 1 Pet. 1 Pet. 1,
26 U. S. 13;
Same v. Same,
8 Wheat. 174,
21 U. S.
211.
Even a judgment when confessed, if the agreement was made under
a clear mistake, will be set aside if application be made and the
mistake shown while the judgment is within the power of the court.
Such an agreement, even when made a rule of court, will not be
enforced if made under a mistake if seasonable application be made
to set it aside, and if the judgment be no longer in the power of
the court, relief, says Mr. Chief Justice Marshall, may be obtained
in a court of chancery.
The Hiram, 1
Wheat. 440,
14 U. S.
444.
Equitable rules of the kind are applicable to sealed
instruments, as well as to ordinary written agreements, the rule
being that if by mistake a deed be drawn plainly different from the
agreement of the parties, a court of equity will grant relief by
considering the deed as if it had conformed to the antecedent
agreement. So if a deed be ambiguously expressed in such a manner
that it is difficult to give it a construction, the agreement may
be referred to as an aid in expounding such an ambiguity; but if
the deed is so expressed that a reasonable construction may be
given to it, and when so given, it does not plainly appear to be at
variance with the agreement, then the latter is not to be regarded
in the construction of the former.
Hogan v. Insurance Co.,
1 Wash. 419, 422.
Rules of decision in suits for specific performance are
necessarily affected by considerations peculiar to the nature of
the right sought to be enforced and the remedy employed to
accomplish the object. Where no question of fraud or mistake is
involved, the rule with respect to the admission of parol evidence
to vary a written contract is the same in courts of equity as in
those of common law, the rule in both being that when an agreement
is reduced to writing by the act and consent of the parties, the
intent and meaning of the same must be sought in the instrument
which they have chosen as the repository and evidence of their
purpose, and not in extrinsic facts and allegations. Proof of fraud
or mistake, however, may be admitted in equity to show that the
terms of the instrument employed in the preparation of the same
were varied or made
Page 101 U. S. 585
different by addition or subtraction from what they were
intended and believed to be when the same was executed.
Evidence of fraud or mistake is seldom found in the instrument
itself, from which it follows that unless parol evidence may be
admitted for that purpose, the aggrieved party would have as little
hope of redress in a court of equity as in a court of law. Even at
law, all that pertains to the execution of a written instrument or
to the proof that the instrument was adopted or ratified by the
parties as their act or contract is necessarily left to extrinsic
evidence, and witnesses may consequently be called for the purpose
of impeaching the execution of a deed or other writing under seal,
and showing that its sealing or delivery was procured by
fraudulently substituting one instrument for another, or by any
other species of fraud by which the complaining party was misled
and induced to put his name to that which was substantially
different from the actual agreement.
Thoroughgood's Case,
4 Coke 4.
When the deed or other written instrument is duly executed and
delivered, the courts of law hold that it contains the true
agreement of the parties, and that the writing furnishes better
evidence of the sense of the parties than any that can be supplied
by parol; but courts of equity, says Chancellor Kent, have a
broader jurisdiction, and will open the written contract to let in
an equity arising from facts perfectly distinct from the sense and
construction of the instrument itself. Pursuant to that rule, he
held it to be established that relief can be had against any deed
or contract in writing founded on mistake or fraud, and that
mistake may be shown by parol proof and the relief granted to the
injured party whether he sets up the mistake affirmatively by bill
or as a defense.
Gillespie v. Moon, 2 Johns. (N.Y.) Ch.
585, 596.
Parol proof, said the same learned magistrate, is admissible in
equity to correct a mistake in a written contract in favor of the
complainant seeking a specific performance, especially where the
contract in the first instance is imperfect without referring to
extrinsic facts.
Keisselbrack v. Livingston, 4
id. 144;
Cathcart v.
Robinson, 5 Pet. 264.
Many cases support that proposition without qualification, and
all or nearly all agree that it is correct where it is invoked
Page 101 U. S. 586
as defense to a suit to enforce specific performance. Little or
no disagreement is found in the adjudged cases to that extent, but
there are many others where it is held that the rule is unsound
when applied in behalf of a complainant seeking to enforce a
specific performance of a contract with variations from the written
instrument. Difficulty, it must be admitted, would arise in any
attempt to reconcile the decided cases in that regard, but it is
not necessary to enter that field of contest and conflict in the
case before the court for several reasons:
1. Because by comparing the original trust deed with the deed of
the lot in question, in view of the attendant circumstances, the
inference is very cogent that the second was designed and intended
as a complete substitute for the first.
2. Because the proof shows to a demonstration that the
consideration for the purchase of the second lot was paid in equal
proportions by the father and each of the three sons.
3. Because it appears that the expensive improvements made upon
the lot in question were made from the moneys of each of the three
sons, advanced at the request of the father.
4. Because it appears that the family and every member of it
understood from the first and throughout that the trustee held the
property in trust for the mother and the three sons.
5. Because the father, from the date of the deed to the time of
his death, recognized the premises as acquired and held for the
benefit of his wife and their three sons.
6. Because the mother of the three sons, after the decease of
the first husband of complainant, recognized her as interested in
the property, and continued to do so at all times throughout her
life until about the time she conveyed the lot in question to the
respondent.
Both the deed and her will bear date Sept. 28, 1872, and the
proofs show that she was at the time in a low, depressed state of
mind, and that she departed this life within one year subsequent to
the execution of those instruments. Prior to that, and throughout
the whole period subsequent to the death of her husband, the proofs
show that she uniformly recognized the complainant as the owner of
a moiety of the lot and the improvements, and always required her
to pay one-half of all repairs, taxes, insurance, and other
expenses of the property.
By the terms of the original deed, the property was conveyed
Page 101 U. S. 587
to the trustees, subject to the payment of taxes, assessments,
and ground rent, to and for the sole and separate use, benefit, and
behoof of the mother and her three sons during her lifetime, and
after her death to the three sons as tenants in common in equal
parts, with the provision that if the mother during her lifetime
should deem it advisable she might sell and convey the premises,
and that in that event the further trust was raised and created
that the trustees or the survivor of them, upon her application and
with her consent signified by becoming a party to the conveyance,
might sell and convey the lot and improvements for the best price
which could be obtained for the same, without any application to a
court of law or equity for that purpose, and to invest the proceeds
thereof upon the same trusts in such other property or manner as
the mother should direct, and for the same use, benefit, and
behalf.
Provision was also made that if no such sale and reinvestment
was made during the lifetime of the mother, then the trustees were
to sell the same for the sole use and benefit of the three sons or
the survivor or survivors of them, share and share alike, until the
youngest should arrive at the age of twenty-one years, when the
trustees might sell and convey the same at the request of such
survivor or survivors, and divide the proceeds to the survivor or
survivors, share and share alike.
Taken as a whole, the proofs show to the entire satisfaction of
the Court that the lot in question was purchased and conveyed to
the surviving trustee upon the same trusts as those raised and
created in the first deed, and that the trustee, through mistake,
failed to have those trusts properly declared in the deed of trust
to him as he should have done, and that the prayer of the bill of
complainant that the deed of the lot and improvements in question
ought to be reformed and the rights of the complainant be
ascertained and adjudged as if the deed in question contained the
same trusts as those raised and created in the original trust deed
is reasonable and proper, and should be granted.
Courts of equity, beyond all doubt, possess the power to grant
such relief, and the proofs, in the judgment of the Court, are such
as to entitled the complainant to such a decree unless
Page 101 U. S. 588
the remaining defense set up by the respondent must prevail.
Cooper v. Phibbs, Law Rep. 2 Ch.App. 149, 186;
Cochrane v. Willis, 34 Beav. 359, 366. Such a decree, of
course, cannot now be made against the trustee, as he is not
living, but the executors, as contended by the complainant, are
competent to perform that duty, and she prays that the decree may
be adapted to the present state of the parties.
Suppose all that is true, still it is contended by the principal
respondent that the decree below is correct because the claim is
barred. Much discussion of that defense will not be necessary
beyond what is required to ascertain the facts.
When the father died, the complainant was living on the
premises, and she continued to reside there most or all the time
during the widowhood of the mother of her first husband, except
while she lived with her second husband, and when he died, she
returned to live with her mother-in-law. During all that time, the
proofs show that she was constantly recognized as the lawful heir
to the estate of her deceased husband until about a year before the
decease of the mother, who also resided on the premises. Prior to
that, the rights of the complainant were unmistakably recognized,
and nothing of consequence had occurred to indicate any intent to
call her just right in question. Soon after that, however, the
respondent commenced an action of ejectment against her to recover
possession of the entire lot and improvements, she still being in
possession, and doubtless hoping and expecting that her rights
would yet be acknowledged without the necessity of expensive
litigation. Expectations of the kind not being realized, she filed
the present bill of complaint. Laches are imputed to her, but the
Court, in view of the circumstances and of the embarrassments
growing out of the obvious defects in the conveyance intended to
secure her rights, is of the opinion that the evidence of laches is
not sufficient to bar her right to recover in the present suit.
Without more, these remarks are sufficient to show that the defense
cannot be sustained, and it is accordingly overruled.
Two or three remarks will be sufficient to show that the
objection that the circuit court has no jurisdiction to enter the
required decree against the executors of the deceased trustee
cannot be sustained. Jurisdiction as between the complainant
Page 101 U. S. 589
and respondent is unquestionable, and if so, it is clear that
the fact that the trustee if living was a citizen of the same state
with the complainant would not defeat the jurisdiction in a case
where he is a mere nominal party and is merely joined to perform
the ministerial act of conveying the title if adjudged to the
complainant. Where that is so, the executor, in case of the decease
of the trustee, if authorized by the law of the state to execute
such a conveyance, may also be joined in the suit under like
circumstances merely to accomplish the like purpose. Where the real
and only controversy is between citizens of different states or an
alien and a citizen and the plaintiff is by some positive rule of
law compelled to use the name of another to perform merely a
ministerial act who has not nor ever had any interest in or control
over it, the courts of the United States will not consider any
others as parties to the suit than the persons between whom the
litigation before then exists.
McNutt v. Bland,
2 How. 9,
43 U. S. 15;
Browne v. Strode, 5 Cranch 303;
Coal
Company v. Blatchford, 11 Wall. 172,
78 U. S.
177.
Cases arise in the federal courts in which nominal or even
immaterial parties are joined, on the one side or the other, with
those who have the requisite citizenship to give the court
jurisdiction in the case, and where that is so, the rule is settled
that the mere fact that one or more of such parties reside in the
same state with one of the actual parties to the controversy will
not defeat the jurisdiction of the court. Decisive authority for
that proposition is found in a recent ruling of Mr. Justice Miller
in which he states to the effect that mere formal parties do not
oust the jurisdiction of the court, even if they are without the
requisite citizenship, where it appears that the real controversy
is between citizens of different states.
Arapahoe County v.
Kansas Pacific Railway Co., 4 Dill. 277, 283.
Nothing is claimed of the executors in this case except that
they shall perform the ministerial act of conveying the title in
case the power to do so is vested in them by the law of the state,
and the court shall enter a decree against the principal respondent
to that effect. From all which, it follows that the complainant is
entitled as between herself and the principal respondent to the
relief prayed in the bill of complaint, but
Page 101 U. S. 590
the Court, in view of all the circumstances, will not proceed to
determine either the proportion of the trust property which belongs
to the complainant or the amount she is entitled to recover of the
said respondent. Instead of that, those matters are left to be
ascertained and determined by the circuit court, with authority, if
need be, to refer the cause to a master to report the facts, with
his opinion thereon, subject to the confirmation of the circuit
court.
Executors of the trustee, in such a case as the complainant
alleges, are under the law of the state the successors of the
deceased trustee, and that as such they may execute whatever
remains executory in the trust at the time of his decease, from
which it would follow, if that be so, that it will be the duty of
the executors of the deceased trustee in this case, when the rights
of the complainant are fully ascertained, to make the necessary
conveyance to perfect her title to the same extent as the trustee
might do if in full life. Express authority is reserved to the
circuit court to ascertain the rights of the complainant as if the
trust deed was reformed, and to make the necessary decree to
perfect her title in such mode and form as the law of the state and
the practice of the state courts authorize and provide.
Crafton
v. Beal, 1 Ga. 322;
Brown v. Tucker, 47
id.
485.
Costs in this Court will be taxed to the principal respondent in
favor of the complainant, but no costs will be allowed against the
other two respondents.
Decree will be reversed and the cause remanded for further
proceedings in conformity with the opinion of the court.
So ordered.