Barnum v. Fay
| Decision Date | 13 September 1946 |
| Citation | 69 N.E.2d 470,320 Mass. 177 |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
| Parties | MARCELLE GALE BARNUM v. ELIZABETH B. FAY & others. |
November 8, 1945.
Present: FIELD, C.
J., LUMMUS, DOLAN RONAN, & SPALDING, JJ.
Fiduciary. Attorney at Law.
Trust, Express trust: validity; Rescission. Fraud. Undue Influence.
A voluntary settlor, who has not reserved to himself alone the power of revocation of a trust indenture executed by him, cannot have it set aside where there was no mental incapacity or mistake on his part or fraud or undue influence which induced its execution.
The mere fact, that an attorney at law permitted a client, without the benefit of independent advice, to execute and deliver to him an instrument appointing him trustee of a substantial amount of the client's property with broad discretionary powers and not containing a power of revocation, did not require rescission of the instrument in a suit in equity by the settlor where it appeared, from findings of the trial judge not plainly wrong on reported oral testimony, that the attorney had sustained the burden upon him in such circumstances of proving that any influence over the client which might be presumed to have arisen out of the relationship of attorney and client had been neutralized by other means than independent advice so that there had been no over-reaching of the client and no abuse of confidence.
The fact that the trustee in an inter vivos trust received fees as a director of corporations of which he was a stockholder in his capacity as trustee, although originally one of the relevant facts in a suit in equity by the settlor to rescind the trust instrument on the ground that its execution had been induced by breach of an attorney and client relationship existing between the trustee and the settlor, became immaterial in that suit upon a finding, not plainly wrong on all the evidence, that the execution of the trust instrument had not been so induced; the propriety of the trustee's receipt of the fees was left a matter to be determined in his accounting.
BILL IN EQUITY filed in the Superior Court on September 6, 1944. The suit was heard by Beaudreau, J.
E. S. Farmer, (R.
Rambach with him,) for the plaintiff.
M. A. Shattuck, for the defendant Brink. J. N. Welch, for the defendants Fay submitted a brief.
The plaintiff seeks to set aside an instrument dated December 9 1941, and amended October 16, 1942, purporting to transfer in trust to the defendant Brink certain property given to her under the will of her grandfather John A. Gale, alleging that she was induced to execute the indenture and amendment through the fraud and undue influence of her sister, the defendant Elizabeth B. Fay, and of her sister's husband, the defendant C. Norman Fay, and further alleging that the defendant Brink assisted them in procuring the execution of said instruments. The three remaining defendants are the minor children of the defendants Fay and are represented by a guardian ad litem. The plaintiff appealed from a final decree dismissing the bill. The judge made a report of the material facts and we have a transcript of all the evidence.
Many of the material facts furnishing the background of this controversy are not in dispute. The plaintiff was the granddaughter of John A. Gale who by the third clause of his will left her the income for life of a trust fund of $20,000, by the fourth clause left his other granddaughter, Elizabeth B. Fay, a similar interest in a trust fund of $25,000, and by the tenth clause of his will established a trust which upon the death of their mother, Jessie M. Barnum, later Mowat, was to be terminated, whereupon the property was to be equally divided between these two granddaughters. The assets of this trust amounted to $249,000 on February 9, 1942, about the time that Mr. Brink became the trustee. After the death of Mrs. Mowat, which occurred on March 4, 1944, the plaintiff demanded that Mr. Brink transfer to her half of the property in this trust. He refused to do so on the ground that it was held by him as trustee under the indenture of trust.
The plaintiff was born in 1900. Her first marriage in 1923 had terminated in a divorce in 1925 and she returned to her mother's home where she lived until her mother married Mowat in 1926. The plaintiff thereafter lived alone in Boston for a time and later in New York where she worked in a department store and as a social worker. She returned to Boston in 1933 and married one Olmsted in 1934 but they lived together for two months or less. She continued to live in Boston depending for her maintenance in part upon the income from the trust established by the third clause of her grandfather's will and to a large extent upon financial aid given by her mother. The death of Mowat on October 22, 1941, if it did not lead to, was at least followed by a series of events. Mrs. Mowat declined to act as executor of her husband's estate and Mr. Brink was appointed administrator with the will annexed. The accounts of the trust company as trustee under the Gale will were assented to and upon their allowance and resignation of the trust company Mr. Brink became trustee. Mrs. Mowat executed a will on December 9, 1941, in which Mr. Brink was named executor. On the same day the plaintiff consulted Mr. Brink with reference to securing a divorce from Olmsted, which she obtained in June, 1942. She also executed the indenture of trust which, among other things, authorized Mr. Brink to make such payments of income and principal to her as he might deem necessary for her comfortable support, and upon her death to make similar payments to her sister Elizabeth, and, on and after the latter's death, to her children who upon becoming twenty-one years of age were to take a share in the trust property. The trustee was given broad powers to determine income and principal, the amounts to be paid to the plaintiff, and the securities in which the trust funds might be invested. He was to be held liable only for actual fraud. In case of vacancy a successor trustee was to be appointed by a writing signed by a majority of the senior partners of the law firm with which Mr. Brink was associated. The last clause of the trust indenture, which appeared directly over the plaintiff's signature, provided that the trust indenture might be amended or revoked with the written consent of the trustee. After making various subsidiary findings narrating the events which immediately preceded the execution of the trust indenture, the judge found upon all the evidence that Mr. Brink discharged his fiduciary relationship with the plaintiff in an honorable manner; that his refusal to consent to the termination of the trust was actuated both by her mother's and his desire to protect her; that the trust indenture was drawn at her request; that it was "read, explained and understood by her" and that she executed it voluntarily without fraud, deceit or coercion upon her by any of the defendants; that the amendment to the trust indenture was drafted for the purpose of avoiding taxes; and that the plaintiff, after it had been "read, explained and understood by her," voluntarily signed it.
These findings, if justified by the evidence, bring the case within the principle that a voluntary settlor, in the absence of mental incapacity, fraud, undue influence or mistake, cannot set aside an indenture of trust in which he has not reserved to himself alone the power of revocation. Taylor v. Buttrick, 165 Mass. 547 . Sands v. Old Colony Trust Co. 195 Mass. 575. Coolidge v. Loring, 235 Mass. 220 . Clune v. Norton, 306 Mass. 324 , 326.
The plaintiff while recognizing this general principle contends that it is not applicable because the findings of the judge are plainly wrong. Findings made by a judge on oral testimony given at a trial of a suit in equity are not to be reversed unless shown to be plainly wrong. Trade Mutual Liability Ins. Co. v Peters, 291 Mass. 79 , 84. Lowell Bar Association v. Loeb, 315 Mass. 176 , 178. Jurewicz v. Jurewicz, 317 Mass. 512, 513. Rayner v. McCabe, 319 Mass. 311 . The reason for this rule is that a judge who has seen and heard the witnesses is in a much better position to determine their credibility than we are from a printed record. Berman v. Coakley, 257 Mass. 159 , 162. Spiegel v. Beacon Participations, Inc. 297 Mass. 398, 407-408. Boston v. Santosuosso, 307 Mass. 302 , 331-332. New...
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