Hawkes v. Lackey
| Decision Date | 05 January 1911 |
| Citation | 93 N.E. 828,207 Mass. 424 |
| Parties | HAWKES v. LACKEY et al. (Two cases). |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Jan. 5 1911.
B. B Jones and Grosvenor Calkins, for plaintiff.
Frank Paul, for defendants.
The first contention made by the defendant Lackey, hereinafter called the defendant, is that these bills ought to be dismissed by reason of laches on the part of the plaintiff. That defense was not set up in the pleadings, and is not now open to the defendant as of right. Stewart v. Joyce, 201 Mass. 301, 87 N.E. 613. Nor, considering the character of the actions, and the facts found by the master, ought such a defense to be sustained. As to most of the transactions complained of, the delay in bringing suit has been largely due to the misplaced confidence reposed in the defendant by the plaintiff and her aunt and sister, in whose right the second suit is brought. The defendant has not changed his position or lost anything from the fact that the suits were not brought earlier. Stewart v. Finkelstone, 206 Mass. 28, 36, 92 N.E. 37. As to some of the complaints made against him, he rests his defense on the ground that the bills were prematurely brought.
The judge of the superior court sustained the defendant's exceptions numbered 13 to 20 inclusive, so far as they related to the master's assumption of law that there was no merger of the defendant's obligation of $2,050 to Elizabeth S. Hawkes by the two 10-year notes, each for half that sum, which the defendant gave respectively to the plaintiff and her sister Sarah. The plaintiff did not appeal, and the correctness of this ruling is not before us. But the judge also found as a conclusion of fact and law from the whole of the master's report that the plaintiff and her sister were induced to receive the payments of interest upon these notes by undue influence of the defendant, and that the notes should be reformed into demand notes carrying interest at 4 per cent. to the date of the filing of the bill and thereafter at 6 per cent. The right of the judge to make further or different findings by inferences drawn from the facts reported by the master is settled. Rosenberg v. Schraer, 200 Mass. 218, 86 N.E. 316; American Circular Loom Co. v. Wilson, 198 Mass. 182, 200, 84 N.E. 133, 126 Am. St. Rep. 409, and cases cited. And see Knowles v. Knowles, 205 Mass. 290, 294, 91 N.E. 213. But the defendant contends that this finding, that the conduct of the plaintiff and her sister was induced by the undue influence of the defendant, was unsupported by the facts found and reported by the master and was unwarranted. This contention makes it necessary to examine the master's report.
He has found that at the time of the transactions in question the plaintiff and her sister were each more than 50 years of age, with no property except what had come to them from their aunt, Elizabeth S. Hawkes. They were intelligent and well educated and knew the character and meaning of interest on money and of the time at which a note was payable. But they had scarcely any business experience, and at the beginning of the time in question were almost like children in money matters; and these facts were known to the defendant. They trusted him implicitly, and apparently always did what he asked or advised, although the legal matters connected with their aunt's estate were, as the defendant knew, in the hands of an attorney, who had not been consulted about these notes and was not present when they were given. The defendant was a relative of these ladies, was intimate with them, and they had confidence in him. He was about 30 years of age and a college graduate. He had had little business experience except through his speculations in stocks, which seem to have been extensive and long continued, and apparently were finally disastrous. For about two years he had acted for these sisters, and for their aunt in her lifetime, making some investments for them with a part of the money which he procured from them. That fiduciary relation and their confidence in him continued until some months before the first of the suits was brought. He asked for the 10-year extension of the notes, for his own advantage and not in the interest of their aunt's estate, which had become practically theirs. He did not make any false or fraudulent representation of fact to them in connection with this matter. They acted, and it is a fair and really a necessary inference from the findings of the master that he knew that they acted and intended that they should act, from a feeling of blind and unquestioning trust in him, and also of accommodation towards him, apparently without considering or appreciating the possible effect of their accepting the notes; partly also from a desire which began in them soon after their aunt's death to help his speculations and themselves to participate in these, as they afterwards did in one of them. But they acted in taking these notes and in receiving payments of interest thereon without any coercion or inducement on his part, unless his letting them do so without any special warning or discussion or any suggestion that they should consult their attorney, and knowing their trust and confidence in him, constitute in law such inducement or coercion. In other words, owing to them the duties which grew out of the fiduciary relations that existed between them and him, he acted, and availed himself of their trust and confidence in him to lead them to act, for his own benefit and advantage and to their hazard and detriment with reference to the fiduciary obligations which he owed to them.
The law in relation to such transactions is well settled. It was succinctly stated by Lord Chelmsford in Tate v Williamson, L. R. 2 Ch. 55: 'Wherever two persons stand in such a relation that, while it continues, confidence is necessarily reposed by one, and the influence which naturally grows out of that confidence is possessed by the other, and this confidence is abused, or the influence is exerted to obtain an advantage at the expense of the confiding party, the person so availing himself of his position will not be permitted to retain the advantage, although the transaction could not have been impeached if no such confidential relation had existed.' The principle has been affirmed by this court in many case where, under diverse circumstances and by reason of different relations, a special duty was owed by...
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