Bodley v. Jones

• Decision Date: 26 April 1943
• Citation: 32 A.2d 436,27 Del.Ch. 273
• Court: Court of Chancery of Delaware
• Parties: HARLEY 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:

32 A.2d 436

27 Del.Ch. 273

HARLEY 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:

Court of Chancery of Delaware

April 26, 1943

APPEAL from a decree of the Court of Chancery for New Castle County entered in accordance with the opinion reported 26 Del.Ch 218, 27 A.2d 84.

Reversed and remanded.

William Prickett, for appellant.

Philip Cohen, for appellee.

LAYTON C. J., and RICHARDS, RODNEY, SPEAKMAN, and TERRY, JJ. sitting.

OPINION

LAYTON, Chief Justice.

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 bond and mortgage.

The appellant is the executor of the last will and testament of William Fortner, deceased, who at the time of his death, was the mortgagee and obligee named in a certain mortgage and bond given and executed by one Royden Caulk, bearing date October 8, 1935, to secure the payment of the sum of $ 3500.00, and of record in the office of the Recorder of Deeds for New Castle County.

Subsequent to the mortgage, on October 16, 1935, William Fortner signed, sealed and delivered to the appellee a paper writing in these words:

"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."

William Fortner died on July 21, 1940, without having transferred the bond and mortgage to the appellee. The appellant, as executor, refused to make the transfer. Consequently, on January 17, 1941, the appellee filed a bill of complaint in the court below against the executor praying that the bond and mortgage be impressed with a trust in her favor; and that the appellant, as executor, be directed to transfer the bond and mortgage to her.

The appellant in his answer averred that the money invested in the bond and mortgage was not the money of the appellee; and that the paper writing made and delivered by the deceased to the appellee was not sufficient to, and did not, transfer title to the bond and mortgage to her.

The appellee promptly moved for a decree notwithstanding the answer. Thereupon, the appellant was allowed to amend his answer by averring that the money invested in the mortgage was the money of William Fortner, the deceased; and that he, from the date of the bond and mortgage to the time of his death, took all payments of interest on the bond and mortgage for his own use.

On June 24, 1942, the Chancellor filed an opinion in which it was stated that a decree would be entered in favor of the appellee pursuant to the prayers of his bill. To clarify an averment in the answer to which reference was made in the opinion, the appellant, upon leave granted, filed a further amendment to his answer in which it was averred that the interest on the bond and mortgage became due and payable at regular intervals, and that at all times the interest was paid to and collected by the deceased mortgagee, who received and used the payments of interest for his own benefit and purposes; and that during the lifetime of the deceased, the appellee never made demand for the payment to her of the interest as it accrued. It was held, however, that the amended answer did not affect the conclusion reached in the opinion filed that the deceased intended to declare a trust. Jones v. Bodley 26 Del.Ch. 218, 27 A.2d 84. A final decree was entered, and this appeal followed. Since the hearing, and by consent, the mortgage debt was paid, and the proceeds are in the possession of the appellant.

There is a preliminary comment to be made. At one place in the opinion of the Chancellor he is careful to say that the allegations of the first amendment to the answer were on information and belief. Standing alone the statement is of small significance; but again, in the note appended to the opinion proper having relation to the second amendment to the answer, the Chancellor stated that the defendant was subsequently permitted further to amend his amended answer by specifically alleging, "though on information and belief" the facts averred therein. The reiteration of the statement that the averments of the amendments were on information and belief has given rise to some speculation whether the fact was given weight in arriving at the conclusion. If the statements were not idly made and were intended to have significance, it must have been for the reason that the allegations of the amendments were not regarded as positive in character. The language of the pleader in each instance, however, was that the respondent "is informed, believes, and, therefore, avers." There are cases holding that an averment on information and belief puts in issue only the party's information and belief, and not the truth or falsity of the facts referred to. 21 C.J. 395; 30 C.J.S., Equity, § 223; 3 Ency. Pl. & Pr., 360. But where the party states that he is informed, believes and, therefore, avers the truth of a fact, it is more than an averment of confidence in the source of information, and is a sufficiently positive allegation of fact. 21 C.J. 395; 30 C.J.S., Equity, § 223; Read v. Walker, 18 Ala. 323; Coryell v. Klehm, 157 Ill. 462, 41 N.E. 864.

The applicable principles of law are well settled. The legal owner of personal property is prima facie entitled to its beneficial use and enjoyment. He may, by a declaration of trust, constitute himself a trustee of the property for the use and benefit of another even without receiving consideration therefor. Technical words are not necessary, nor is any particular form required. It is the intention of the donor that is to be discovered; and the intention to change position from that of owner to one of trustee is that which is outwardly manifested by either written or spoken words or by conduct. Such intention effectuated means a present gift of the equitable estate with reservation of the legal title. Instability of titles with dangerous and far reaching consequences would ensue if an express trust could be created by language or circumstances capable of another construction, or consistent with a different intention; and the authorities are agreed that in order to create an express trust the intention so to do must be evidenced by definite, explicit and unequivocal words, or by circumstances so...