Bodley v. Jones

• Decision Date: 06 November 1947
• Citation: 59 A.2d 463,30 Del.Ch. 480
• Court: United States State Supreme Court of Delaware
• Parties: HARRY R. BODLEY, Executor of the Estate of William Fortner Deceased, Defendant Below, Appellant, v. RHODA E. JONES, also known as Rhodie E. Jones, Complainant Below, Appellee

59 A.2d 463

30 Del.Ch. 480

HARRY R. BODLEY, Executor of the Estate of William Fortner Deceased, Defendant Below, Appellant, v. RHODA E. JONES, also known as Rhodie E. Jones, Complainant Below, Appellee

Supreme Court of Delaware

November 6, 1947

APPEAL from Chancery Court, New Castle County.

William Prickett, for appellant.

Harry K. Hoch and Philip Cohen, for appellee.

RICHARDS C. J., and SPEAKMAN, TERRY and CAREY, JJ., sitting.

OPINION

TERRY, Judge,

This is an appeal from a decree of the Court of Chancery impressing a trust in favor of the appellee upon the proceeds of a certain bond and mortgage.

The appellee seeks to enforce an alleged resulting trust. She claims to be the real owner of $ 3500 invested in a bond and mortgage by William Fortner during his lifetime.

The appellant is Fortner's executor.

The complainant in her bill alleges, among other things, that William Fortner at the time of his death was the legal owner of a bond and mortgage in the amount of $ 3500, executed by Royden Caulk of New Castle County, dated October 8, 1935, and of record in the Recorder's office, in and for New Castle County. On October 16, 1935, Fortner executed, under his hand and seal, and delivered to the complainant the following instrument in writing:

"Blackbird Del., October 16th, 1935

"To Whom It May Concern:

"This is to certify that the money invested in the Royden Caulk bond and mortgage for Thirty-five Hundred Dollars ($ 3500.00) belonged to Miss Rhodie E. Jones of Appoquinimink Hundred and in the event of my death this bond and mortgage is to be turned over to her by my executor if I have not done so previously.

"Witness my hand and seal this sixteenth day of October, A. D. 1935.

(Seal) Wm. Fortner.

"Witness:

"W W. Hynson."

It is further alleged that Fortner died on July 21, 1940, and did not during his lifetime assign or turn over the Caulk bond and mortgage to the appellee; nor has his executor done so since his death.

The prayers are that the Caulk bond and mortgage amounting to $ 3500 be decreed to be the property of Rhoda E. Jones, and that the respondent be directed to assign the bond and mortgage to her, and, further, that the respondent be directed to account to the complainant for any interest received by him thereon.

The respondent in his answer alleges: (1) that the money invested in the Caulk bond and mortgage is not the money of the complainant; (2) that the instrument set out in the bill of complaint did not transfer title to said bond and mortgage to the complainant; (3) that the interest accruing on the bond and mortgage was collected by Fortner during his lifetime, and was, at all times, received and used by him for his own purposes and benefit; and (4) that from the date of the execution of the bond and mortgage no demand was made by the complainant for the payment to her of interest that accrued thereon.

Upon a motion for a decree notwithstanding the answer the learned Chancellor concluded that the fair and reasonable inference to be drawn from the language of the October 16th paper writing (as set forth in the bill of complaint) was that Fortner, by the execution thereof, intended to declare himself a trustee for the benefit of Rhoda E. Jones, the complainant. 26 Del. Ch. 218, 27 A.2d 84. Prior to the entry of the final decree the bond and mortgage was paid in full. The decree, therefore, was that the Thirty-five Hundred Dollar fund be impressed with a trust in favor of the complainant, and the respondent was ordered and directed to pay to the complainant that sum, together with the sum of $ 84.50, representing accrued interest from the date of the respondent's qualification as executor.

The respondent appealed to this court. The appellee argued before us, as well as in the court below, that the language set forth in the paper writing of October 16th was entirely adequate as a declaration of trust for her benefit. We found, however, that the language used was insufficient for that purpose. We said (27 Del. Ch. 273, 32 A.2d 436) that it seemed to us from the state of the pleading that a more reasonable interpretation would be to say that (1) Fortner, deceased, intended to make a gift in futuro, or (2) that he attempted to make a testamentary disposition not in a manner authorized by law. We found the language to be indicative only of a written acknowledgement of a type of trust called a resulting trust raised by implication of law and presumed to have been contemplated by the parties in favor of the person furnishing the consideration for the transaction. In accordance with this view, a reversal was entered and the cause remanded to the court below for such other proceedings as might be deemed necessary. However, we indicated (27 Del. Ch. 273, 32 A.2d 436) that if it be proved that the money invested in the bond and mortgage was the appellee's money, as the paper writing declared, she would be entitled to a decree in the absence of countervailing circumstances. On the other hand, if it be proved that the money so invested was the money of Fortner, in the absence of facts and circumstances showing clearly and unequivocally the intention of the deceased to declare a trust in the appellee's favor, the appellee would not be entitled to relief.

On October 20, 1943, a final hearing was commenced in the court below. The complainant did not pursue her previous contention; that is, that the paper writing of October 16th evidenced a declaration of trust for her benefit. She contended that the instrument evidenced an implied or resulting trust, and in support of this contention relied upon the language of the instrument, together with the testimony of W. W. Hynson, a witness thereto. Hynson testified that during October, 1935, he was cashier of the Fruit Growers National Bank & Trust Company of Smyrna; that he knew William Fortner, and had previously drawn a will for him; that on October 16, 1935, Fortner asked him to draw the paper writing (set out in the bill of complaint) and at the time the instrument was prepared Fortner told him the $ 3500 invested in the Caulk mortgage belonged to Rhoda E. Jones, and that he (Hynson) was to deliver, as Fortner's executor, the paper writing to Miss Jones in the event Fortner had not done so during his lifetime.

The respondent upon the conclusion of the complainant's case moved that the bill of complaint be dismissed, for the reason that her previous contention, as advanced by her solicitor both at the arguments (1) before the learned Chancellor for a decree notwithstanding the answer and (2) before this court on the first appeal that the October 16th paper writing evidenced a declaration of trust for her benefit, amounted to an irrevocable judicial admission which is conclusive upon her and cannot be disavowed. The motion to dismiss was denied.

The respondent produced several witnesses in support of his position that the money invested by Fortner in the Caulk bond and mortgage was not the money of, nor did it belong to, the complainant; rather, it was the money of, and belonged to, Fortner.

During the presentation of the respondent's case the complainant was called as a witness, but was not present. A subpoena had been issued for her the previous day, October 19th. The subpoena could not be served, because she had previously absented herself from the jurisdiction. It appears that her solicitors, previous to October 19th, had stated to her that she need not appear at the October 20th hearing. At the close of the day the court adjourned the hearing until November 3rd, suggesting to the complainant's solicitor that she be present at the adjourned November 3rd hearing in order that she might be cross-examined by the respondent under Paragraph 4687 of the Revised Code of 1935. The complainant was not present November 3rd, although she had learned prior thereto that she was wanted as a witness. Upon the completion of the testimony taken November 3rd, the Chancellor stated that the case would not be disposed of until the complainant had appeared as a witness. The hearing was then adjourned until November 10th. Because of her non-appearance at the October 20th hearing, the respondent moved that the bill of complaint be dismissed under the equitable maxim of unclean hands. This motion was denied. The motion to dismiss was renewed at the adjourned November 3rd hearing. The respondent contended that the complainant's absence amounted to an attempt on her part to obstruct justice. The court deferred action on the motion. At the adjourned November 10th hearing the complainant appeared and was fully examined by the respondent. Upon the completion of the respondent's case he renewed his motion to dismiss as previously made November 3rd. The motion was again denied.

The substance of the respondent's case may be briefly summarized as follows:

The complainant's father was a farmer in Blackbird Hundred and apparently not in very prosperous circumstances. His farm property was mortgaged and subsequently sold on foreclosure proceedings. The complainant's mother died in 1932, and since then, she has lived with her father and kept house for him without any compensation other than the proceeds from the poultry raised on the farm. She completed her grammar school education but never entered high school. During the year 1918 she worked in a canning factory. Since 1918 she has not been employed away from the farm in any capacity until 1943 when she worked at the Bellanca Aircraft Factory for a part of that year. During 1936 the complainant had a balance of about $ 200 on deposit to her credit in Fruit Growers Bank at Smyrna; and during a period of the same year she had approximately $ 600 on deposit in the National Bank of Smyrna. Royden Caulk, in the fall of...