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PREVOST V. GRATZ, 19 U. S. 481 (1821)

U.S. Supreme Court

Prevost v. Gratz, 19 U.S. 6 Wheat. 481 481 (1821)

Prevost v. Gratz

19 U.S. (6 Wheat.) 481


To establish the existence of a trust, the onus probandi lies on the party who alleges it. In general, length of time is no bar to a trust clearly established to have once existed, and where fraud is imputed and proved, length of time ought not to exclude relief.

But as length of time necessarily obscures all human evidence and deprives parties of the means of ascertaining the nature of the original transactions, it operates by way of presumption in favor of innocence and against imputation of fraud.

In what cases the lapse of time will bar a trust.

Effect of length of time in raising a legal and equitable presumption of the extinguishment of a trust, payment of a debt, &c.

The lapse of forty years and the death of all the original parties deemed sufficient to presume the discharge and extinguishment of a trust proved once to have existed by strong circumstances by analogy to the rule of law, which after a lapse of time, presumes the payment of a debt, surrender of a deed, and extinguishment of a trust where circumstances require it.

This was a bill in chancery filed in the court below by the plaintiff, George W. Prevost, as administrator de bonis non, with the will annexed, of

Page 19 U. S. 482

George Croghan, deceased, against the defendants Simon Gratz, Joseph Gratz, and Jacob Gratz, administrators of the estate of Michael Gratz, deceased, for a discovery and account of all the estate of G. Croghan, which had come to their hands or possession either personally or as the representatives of M. Gratz, who was one of the executors of G. Croghan, who died in August, 1782, having appointed M. Gratz, B. Gratz, T. Smallman, J. Tunis, and W. Powell, executors of his last will and testament. All the executors except W. Powell died before the commencement of the suit. B. Gratz died in 1800, and M. Gratz in 1811. W. Powell was removed from his office as executor in the manner prescribed by the laws of Pennsylvania after the death of M. Gratz, and the plaintiff was thereupon appointed administrator de bonis non with the will annexed. The bill charged M. Gratz and B. Gratz (the representatives of B. Gratz not being made parties) with sundry breaches of trust in respect to property conveyed to them in the lifetime of the testator, and with other breaches of trust in relation to the assets of the testator after his decease, and also charged the defendants with neglect of duty in relation to the property and papers of G. Croghan which had come to their hands since the decease of M. Gratz.

The first ground of complaint on the part of the plaintiff related to a tract of land lying on Tenederah River in the State of New York which was conveyed by G. Croghan to M. Cratz, as containing 9,050 acres, by deed dated 2 March, 1770, for the consideration expressed in the

Page 19 U. S. 483

deed of $1,800. The deed was upon its face absolute, and contained the covenants of general warranty, and for the title of the grantor, which are usual in absolute deeds. At the time of the execution of the deed, G. Croghan was in the State of New York, and M. Gratz was at Philadelphia. The land thus conveyed was, in the year 1795, and after the death of G. Croghan, sold by M. Gratz to one Lawrence in New York for a large sum of money. The plaintiff alleged that this conveyance made by G. Croghan to M. Gratz, though in form absolute, was in reality a conveyance upon a secret trust, to be sold for the benefit of the grantor, and he claimed to be allowed the value of the lands at the time the present suit was brought, upon the ground of a fraudulent or improper breach of trust by the grantee, or at all events to the full amount of the profits made upon the sale in 1795, with interest up to the time of the decree. This trust was denied by the defendants in their answer so far as respects their own knowledge and belief, and if it did ever exist, they insisted that the land was afterwards purchased by M. Gratz, with the consent of G. Croghan, for the sum of 850 15s. 5d, New York currency. It appeared from the evidence that G. Croghan and B. and M. Gratz were intimately acquainted with each other, and a variety of accounts were settled between them, from the year 1769 to a short period before the death of G. Croghan; that he was involved in pecuniary embarrassments, and extensively engaged in land speculations: and some portions of his property were conveyed to one or

Page 19 U. S. 484

both the Messrs. Gratz upon express and open trusts. It also appeared, that in an account which was settled at Pittsburgh in May, 1775, between B. and M. Gratz, and G. Croghan, there was the following item of credit:

August, 1774. By cash received of Howard

for 9,000 acres of land on Tenederah, sold

him for 8,50l. 15s. New York currency, is here . . 797. 12s. 6d.

Interest on 7,97l. 12s. 6d. from August 1774,

to May 1775, is eight months, at 6 percent . . . . . 31. 18s. 1d.


829. 10s. 7d.

Upon the back of another account between B. & M. Gratz and G. Croghan, which was rendered to the latter in December, 1779, there was a memorandum in the handwriting of G. Croghan in which he enumerates the debts then due by him to B. & M. Gratz, amounting to 1,220 1s. 2d., and then adds the following words:

"paid of the above 144 York currency, besides the deed for the land on the Tenederah River 9,000 acres patented, which memorandum appeared to have been made after the conveyance of the land to M. Gratz."

It also appeared that the value of the land, as fixed in the account of May, 1775, was its full value, which was proved by public sales of adjoining lands at the same period when Howard was asserted to have purchased the land. A counterpart of the account of 1775

Page 19 U. S. 485

was also in the possession of M. Gratz, in which the word Howard was crossed out with a pen, but so that it was still perfectly legible, and the name of Michael Gratz, in his own handwriting, written over it. M. Gratz continued in possession of the Tenederah land, paid great attention to it, and incurred great expenses in making improvements on it after the year 1786. The mother of the plaintiff was the heir of G. Croghan, and it was proved that his father had unreserved and frequent access to the papers of G. Croghan, and resided several years in Philadelphia with the view of investigating the situation of the estate, and finally abandoned all hopes of deriving any benefit from it. The account of May, 1775, from which the alleged trust was sought to be proved, was delivered over to him by the representatives of M. Gratz, among the other papers of G. Croghan.

The second principal ground of the plaintiff's complaint respected a judgment obtained by the representatives of one W. McIlvaine, against G. Croghan, which was purchased by B. Gratz, during the lifetime of G. Croghan, and was by him assigned to S. Gratz, one of the defendants, who, under one or more executions issued on that judgment, became the purchaser of certain lands belonging to G. Croghan. It appeared that on 30 March, 1769, G. Croghan gave his bond to W. McIlvaine for the sum of 400, which debt by the will of McIlvaine became on his death vested in his widow, who afterwards intermarried with J. Clark. A judgment was obtained upon the bond against G Croghan, in the name of W.

Page 19 U. S. 486

Humphreys, executor of McIlvaine, in the Court of Common Pleas in Westmoreland County, Pennsylvania, at the October term, 1774, upon which a fi. fa. issued, returnable to the April term of the same court, in 1775. On 8 March preceding the return day of the fi. fa. Bernard Gratz purchased this judgment from Clark and received an assignment of it, for which he gave his own bond for 300 and interest. About this time, G. Croghan was considerably embarrassed and several suits were depending against him. Bernard Gratz, having failed to pay his bond, was sued by Clark, and in 1794 a judgment was recovered against him for 89 6s. 10d., the balance then due upon the bond, which sum was afterwards paid by M. Gratz. The judgment of Humphreys against G. Croghan was kept alive from time to time until 1786, and in that year, on the death of Humphreys, J. Bloomfield was appointed administrator de bonis non with the will annexed of Humphreys, and revived the judgment, and it was kept in full force until it was finally levied on certain lands of G. Croghan. In the year 1800, B. Gratz assigned this judgment to his nephew, S. Gratz, one of the defendants, partly in consideration of natural affection, and partly in consideration of the above sum of 89 6s. 10d., paid towards the discharge of the bond of B. Gratz, by his (Simon's) father, M. Gratz. S. Gratz, having thus become the beneficial owner of the judgment, proceeded to issue execution thereon, at different times, between September, 1801, and November, 1804, caused the same to be levied on sundry tracts of land

Page 19 U. S. 487

of G. Croghan in Westmoreland and Huntington Counties, of five of which he, being the highest bidder at the sale, became the purchaser. The tracts thus sold, contained upwards of 2,000 acres, and were sold for little more than $1,000. The title to some part of this land is still in controversy. Shortly after the assignment of the judgment to B. Gratz, on 16 May, 1775, G. Croghan, by two deeds of that date, conveyed to B. Gratz, for a valuable consideration therein expressed, about 45,000 acres of land. A declaration of trust was executed by B. Gratz on 2 June, 1775, by which he acknowledged that these conveyances were in trust to enable him to sell the same, and with the proceeds to discharge certain enumerated debts of G. Croghan, and among them the debt due on the McIlvaine bond, and to account for the residue to G. Croghan.

The bill charged that the assignment of this judgment was procured by B. and M. Gratz, or both of them, after the death of G. Croghan, and that nothing was due upon the judgment, or if anything was due it was paid upon the assignment out of moneys belonging to the estate of G. Croghan. But the evidence disproved these charges and showed that the assignment was made to B. Gratz in the lifetime of G. Croghan and that the judgment never was paid or satisfied by G. Croghan, or out of his estate.

The defendants, in their answer, denied to their best knowledge and belief all the material charges of the bill, and upon replication the cause was heard in the court below upon the bill, answer, evidence,

Page 19 U. S. 488

and exhibits, and a decree was pronounced dismissing the bill as to all the charges except that respecting the lands lying on Tenederah River, and as to this a decree was pronounced in favor of the plaintiff for all the profits made upon a sale of those lands by M. Gratz. From this decree, both parties appealed to this Court.

Page 19 U. S. 492

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