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CLARKE V. BOORMAN'S EXECUTORS, 85 U. S. 493 (1873)
U.S. Supreme Court
Clarke v. Boorman's Executors, 85 U.S. 18 Wall. 493 493 (1873)
Clarke v. Boorman's Executors
85 U.S. (18 Wall.) 493
1. The construction of a will on the question of estate in fee, or life estate with vested remainder, left undecided, with comments on the inefficiency of rules of decision and decided cases as guides.
2. A violation of trust growing out of a mistaken construction of a will by the executors, unaccompanied by fraudulent intent, is within the ten years statute of limitation of the State of New York concerning actions for relief in cases of trust not cognizable by courts of law.
3. The Court expresses itself as inclined to the opinion that such a case is not within the protection of the statute which allows bills for relief on the ground of fraud to be filed within six years after the discovery of the fraud.
5. Where the party interested in his lifetime had notice of all the facts which constituted the ground of fraud alleged in the bill, and for eight years that he lived after the cause of action accrued to him, with notice of his rights and of the whole transaction, brought no suit nor set up any claim, his heirs are not entitled to the benefit of this exemption from the bar of the statute on the ground of recent discovery of the fraud.
6. When a trustee has closed his trust relation to the property and to the cestui que trust, and parted with all control of the property, the statutes of limitation run in his favor, notwithstanding it is an express trust. The general doctrines of courts of equity concerning lapse of time, laches,
and stale claims will protect the executors of a trustee sued after his death for matters growing out of the trust which occurred forty years before suit brought, which were known to the ancestor under whom the plaintiffs claim for over twenty years before his death, and where the suit is brought by those heirs fourteen years after his death, and two years after the death of the trustee, and where no person connected with the transactions complained of remains alive.
James R. Smith, a merchant of New York, died in June, 1817, leaving a will, which was duly proved on the 11th day of that month. By this will he appointed as his executors Hannah Smith, his widow, Andrew Foster John Thomson, James Boorman, and Matthew St. Clair Clarke. All of them qualified as trustees except Foster but before any of the transactions under the will which were the subject of the present suit took place, the acting executors were reduced to Boorman and Clarke. The testator authorized his executors to sell the whole or any part of his real estate in their discretion, and by a codicil he directed the disposition of that part of his estate destined for his children. Of these there were four, namely, Jeanet (then married to John X. Clarke), Hannah (married to Matthew St. Clair Clarke, one of the executors), Elizabeth (a minor, unmarried), and James (a minor, unmarried).
After providing for the payment of specific bequests, education and care of the minors, and declaring that the residue of his estate should be equally divided among these four children, share and share alike, and directing that his son James should not come into the full possession of his portion until he arrived at the age of twenty-five years, this paragraph of the twelfth clause of the codicil succeeds, which was the foundation of the present suit. It was verbatim, as follows:
"I further direct that my daughters Jeanet, Hannah, and Elizabeth, if she should arrive at the age of twenty-one years, shall have the privilege of expending and appropriating, by and with the consent of the executors, one-third part of their portion
of my estate herein devised to them, in such manner as they may think proper, and over which, when so appropriated, they shall have absolute control; and the remaining two-thirds of the portions or shares of my daughters shall be held separate and distinct and not liable to the control, debts, or engagements of either of their husbands which they now have or may hereafter have, as well those who are married as she who may hereafter marry [giving, however, to the husbands of either or all of them in case the wife shall die first, either with or without issue, the income of said reserved part of my estate, as long as he shall live, arising from his wife's portion, and after his death then to the child or children of my said daughter so dying], and if either of my daughters shall die without lawful issue, or having issue which shall not attain the age of twenty-one years and [sic] without issue, then the share or portion of my said daughter after the death of her husband, or if there be no husband living at her death, shall go and be divided among my other children, share and share alike, and to their issue, in case of the death of either of them, share and share alike, such issue to take the portion that would have belonged to his, her, or their father or mother."
The controversy concerned the interest here devised to Jeanet Clarke. At the time of the making of this codicil and of the death of the testator, she had a son, George, born in 1815, who died in October, 1855. His father, John X. Clarke, died in 1824, and his mother, Jeanet, died in 1847. The complainants in this suit were the children of the said George, the grandchildren of Jeanet Clarke, mentioned in the codicil, and the great-grandchildren of the testator. They alleged that by the true construction of this codicil as applied to the foregoing facts, Jeanet Clarke took but a life estate in the real property, or a life interest in the proceeds of sale so far as it might have been sold, and that their father, George, son of Jeanet, had a vested remainder or interest in the property so devised to Jeanet. They charged that the two executors, Boorman and Clarke, in violation of their duties as executors and trustees, and in fraud of the rights of said George, sold the real estate which was the chief part of the testator's property left to the operation
of this codicil, and contrived that it should come to the hands of said Jeanet Clarke, divested of his interest or title in it; that settlements and arrangements were made with her by reason of undue influence of Matthew St. Clair Clarke, one of said executors, with whom she resided, by which the executors pretended to have been discharged from the obligations of their trust, and that said Clarke in effect reaped all the benefit of such arrangements at the expense of their ancestor, the said George.
The real estate having passed by these conveyances of the executors into the hands of innocent purchasers, divested of the trust in favor of said George, and Matthew St. Clair Clarke having long since died insolvent, and the said Boorman having also died in 1866, these complainants sought by the present bill against the executors of Boorman, to hold his estate responsible for the wrong done to their father by Boorman's participation in the violation of the trust, and the fraud upon his rights.
The transaction which was charged upon Boorman as a violation of his trust and a fraud on the rights of George Clarke was thus:
In 1829, the minor son, James Smith, having arrived at majority, the debts and specific legacies left by the testator being paid, and the estate being settled except as respected the general residue, he, the three daughters, and the executors Boorman and Matthew St. Clair Clarke proceeded to settle this residue. It was divided by them into four parts, agreed to be of equal value. One of these parts the executors and the three daughters conveyed, on the 15th of November, 1829, to James Smith, in fee, as his share under his father's will, and he accepted it in form as such. Conveyances were made on the same day in similar form, mutatis mutandis, to each of the daughters, of specific property agreed on and valued as one-third of their fourths, which thirds by the terms of the codicil were to be at their "absolute control."
Up to this point of what was done, no objection was taken in the present proceeding.
But there still remained, of course, in the hands of the
executors two-thirds of three several one-fourths. The objection was as to what was now done with these, or rather with the two-thirds of the fourth devised for Mrs. Jeanet Clarke and her children, husband &c. That part of the matter was thus:
On the 26th of December, 1829, the two executors, James Smith, and the three daughters, with their husbands, conveyed by deed -- the executors reciting in it that they were acting in pursuance of the power contained in the will -- the whole, in a body, of this remaining residue -- the same being composed chiefly of lots of ground in the City and state of New York -- to one Robert Dyson in fee for the consideration as expressed in the deed of $64,710.39, in cash paid to Matthew St. Clair Clarke, and which sum he acknowledged to have received. This conveyance included, of course, the two-thirds of Mrs. Clarke's fourth. In all this transaction Boorman seemed to have taken a passive rather than active part. In what he did, however, he acted under the advice of P. W. Radcliffe, Esq., of the New York bar, a gentleman well reputed at that bar for integrity, law-learning, and care in all that he either did or advised.
As a part of this arrangement, Matthew St. Clair Clarke, James Smith, Jeanet Clarke, and her sister Elizabeth executed an instrument of indemnity to Boorman. It recited the provisions of the twelfth clause of the codicil, the conveyance of real estate to the son for his one-fourth share, the conveyance of other real estate for the one-third part of the share of each daughter, the conveyance to Dyson, the fact that no portion of the consideration of the sale to Dyson had been received by Boorman, but that it had, with the consent of all parties interested, gone exclusively into the hands of Matthew St. Clair Clarke, and the fact that Boorman had accounted for all the effects of the estate which had come to his hands, and had discharged himself of all the trusts reposed in him by the will and codicil, and then discharged Boorman from all moneys which he could have received in his trust, and from all claims concerning the estate of the testator, or any trust relating thereto, and agreed
indemnify him from all demands by reason of his having executed any of the conveyances thereinbefore mentioned or by reason of any other thing by him done, committed, or suffered, concerning the estate of the testator, whether under the trusts in the will and codicil, or otherwise."
On the same day that the conveyance above-mentioned was made to Dyson, Dyson reconveyed to each of the three daughters one-third in specific lots of the whole, the consideration as expressed in the deeds being,
Jeanet . . . . . . . . . . $21,573.13
Hannah . . . . . . . . . . 21,614.56
Elizabeth. . . . . . . . . 21,522.70
The lots in New York City having increased in value, Mrs. Jeanet Clarke in 1843 advertised for sale at public auction all the lots conveyed to her, and they were so sold. She was at this time resident in Washington, and in the family of Matthew St. Clair Clarke of that city, who, as already said, had married her sister Hannah. Her son George, already mentioned, who was born in 1815, and was therefore twenty-eight years old, and at the time about to marry, went to New York to attend to the matter of the sales. When he got there, he called upon L. B. Woodruff, Esq., then at the bar and now the circuit judge for the Second Circuit of the United States, to obtain Mr. Woodruff's professional assistance in the preparation of the deeds, bonds, and mortgages, and generally to superintend the closing of the matter of the sale of the lots. The deeds having been prepared (five in number), George took them to Washington, where they were executed by his mother. The consideration money was $7,515. Soon after the deeds had been thus prepared and ready for delivery to the purchasers, Mr. Woodruff was called on by Mr. Andrew Thomson, Mr. Stephen Cambreleng, and Mr. Peter De Witt, members of the bar, who had been requested by different purchasers at the sale, to examine the title of the lots sold, and informed by them that they had doubts about the validity of the title
which Mrs. Clarke proposed to convey, the doubts being founded on the language of her father's will. The question, as the same was now recalled by Mr. Woodruff after a lapse of twenty-seven years, was
"whether under the codicil Jeanet Clarke took an estate in fee; or whether her death without issue would devolve the title upon her brother and sisters or their issue, and, connected with that, whether on the birth of issue, which issue should attain twenty-one years, her estate became absolute; whether it was so before or not, and hence, if she had issue then living who was twenty-one years of age, whether his conveyance would not remove all chance of doubt."
The will of Mr. Smith, the father, being put before Mr. Woodruff, the last-named gentleman endeavored to satisfy the objecting counsel that their doubts were unfounded. Two of them were apparently convinced, but they had already advised their clients to decline the title. Being however now informed that Mrs. Jeanet Clarke had a son -- the said George, then in New York -- it was finally agreed, if he would execute an instrument by way of release or confirmation of the sale, that the hesitating or declining purchasers would be satisfied. George, either "by his presence at all or some of these interviews, or by direct and immediate communication" from Mr. Woodruff, "was informed of the objection made in behalf of the purchasers by their counsel, and that they desired the execution by him of the release or grant," such as is above mentioned. Extracts of the will were had in this discussion; whether a copy of it entire was before the parties did not so plainly appear.
George did accordingly execute a release or grant prepared by Mr. Woodruff, received what money was to be paid, and went home to Washington again. He was soon afterwards married, and long held the post of a clerk (not of the higher grades) in the Treasury. He died in 1855 -- that is to say, twelve years after these transactions -- never having set up title to any of these lots then sold by his mother. His mother, as already said, had died in 1847, having been a widow since 1824.
The children of George -- two infants, one aged fifteen and the other eighteen -- now, April, 1869, filed this bill, as already said, against the executors of Boorman.
It appeared as part of the case that in 1861, Boorman, as surviving executor, received the dividends in arrear on $50 worth of stock in a New York bridge company, and sold the stock itself; the produce of both transactions amounting in the whole to $115.
The defendants set up that Jeanet Clarke at the time of the conveyances which she made, A.D. 1829, had a fee simple estate in her two-thirds. They set up also in their answer the New York statutes of limitation and long acquiescence by George, father of the complainants.
The statutes of limitation then in force were the New York Revised Statutes of 1830, and were as follows:
"Of the time of commencing actions relating to real property"
"No action for the recovery of any lands, tenements, or hereditaments, or for the recovery of the possession thereof, shall be maintained unless it appear that the plaintiff, his ancestor, predecessor, or grantor, was seized or possessed of the premises in question, within twenty years before the commencement of such action. [Footnote 1]"
"Of the time of commencing suits in courts of equity"
"Whenever there is a concurrent jurisdiction in the courts of common law and in courts of equity, of any cause of action, the provisions of this title limiting a time for the commencement of a suit for such cause of action in a court of common law shall apply to all suits hereafter to be brought for the same cause in the court of chancery."
"Bills for relief, in case of the existence of a trust not cognizable by the courts of common law, and in all other cases not herein provided for, shall be filed within ten years after the cause thereof shall accrue, and not after."
"Bills for relief, on the ground of fraud, shall be filed within
six years after the discovery, by the aggrieved party, of the facts constituting such fraud, and not after that time."
The complainants contended, as already said, that Jeanet Clarke's estate was one but for life, with remainder to her son. They also contended that the statutes set up did not apply for several reasons: first, because the claim was for a breach of trust, which no lapse of time would bar; secondly, because the act of Boorman was a fraud, which no time would bar; and thirdly because George never discovered the fraud, was poor, wholly occupied in providing through the labors of his office for the day that was passing over his head, and subject to the control of Matthew St. Clair Clarke, one of the executors. They further contended that the peculiar remedy in equity against a concealed fraud before adverted to, was allowable against a party who by mistake committed or participated in injurious acts.
The defendants denied all fraud, and asserted full knowledge of the material facts on the part of George, notice of all material facts to him and ratification by him of the acts complained of as vesting in his mother full control over her reserved two-thirds. And they also denied the said allegations of control, undue influence &c.
The court below considered that when Jeanet sold, she had an estate in fee. This view rendered unimportant a consideration of any other parts of the case.
The court observed, however, in regard to the instruments of indemnity taken by Boorman:
"At the time the two-thirds of Jeanet Clarke's share of the estate was conveyed to her (1829), her son was but fourteen years old. So far, therefore, as her share was concerned, Mr. Boorman needed indemnity against the contingency that such son might die under the age of twenty-one years and without issue, in which case the mother and sisters of Jeanet Clarke, or their issue, would come to take the two-thirds of her share. "
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