Hoyt v. Latham

• Decision Date: 29 February 1892
• Parties: HOYT et al. v. LATHAM et al
• Court: U.S. Supreme Court

143 U.S. 553

12 S.Ct. 568

36 L.Ed. 259

HOYT et al. v. LATHAM et al.

February 29, 1892.

STATEMENT BY MR. JUSTICE BROWN.

This was a bill filed by William H. and Edward P. Latham, who are heirs and owners of two-ninths of the estate of their brother Charles F. Latham, against Ashbel H. Barney and his associates, to compel an accounting for the proceeds of the sale of an undivided one thirty-seventh interest in certain lands belonging to the estate of the said Latham, and for a decree adjudging the plaintiffs to be the owners of two-ninths of his interest in the unsold lands, and for a conveyance of the same. The suit arose upon the following state of facts:

On the 31st day of October, 1867, a contract was executed between Alfred M. Hoyt, Danford N. Barney, Ashbel H. Barney, Charles F. Latham, and five other associates, of the first part, and the Winona & St. Peter Railroad Company of the second part, by which, after reciting that the parties of the first part had loaned and advanced to the corporation large sums of money, and had constructed and equipped 105 miles of its railroad in Minnesota, whereby the corporation had become indebted to them in alarge sum of money, it was provided that certain payments should be made upon that indebtedness by the issue to them of stock and bonds, and that a portion of a congressional land grant owned by the railroad company should be conveyed in satisfaction of the residue. The land so to be conveyed was as many acres theretofore granted by congress as the corporation should receive by reason of the construction of such road for a distance of 105 miles westerly from Winona, reserving the right of way and depot grounds. The lands were to be conveyed to the parties of the first part, as they should direct, whenever, and as soon as, the railroad company had obtained title thereto under the acts of congress. Instead of taking a conveyance of the lands, the parties interested elected to take the proceeds of their sales, as they were permitted by the contract to do, and therefore, as they were sold by the railroad company, the proceeds were from time to time paid over to them. The number of acres to which the company was entitled was ascertained by judicial decree to be 514,266 and a fraction.

Charles F. Latham, one of the parties to this contract, and entitled to one thirty-seventh of these lands or their proceeds, died intestate, August 25, 1870, leaving as his only heirs or next of kin nine brothers and sisters, and the children of a deceased sister; and, up to the execution of the agreement hereinafter referred to, his share of such proceeds was deposited in bank to the credit of his estate. One of his sisters had received her share of his estate in advance, and it is conceded that the estate vested in eight brothers and sisters and the children of the deceased sister, each being entitled to an undivided one-ninth of his one thirty-seventh interest. The plaintiffs are two of the brothers, and each became entitled at his death to a one-ninth interest. No legal proceedings were taken for the settlement and distribution of his estate. No administrator was ever appointed, but, in accordance with a wish expressed shortly before his death, and for the purpose of saving the expenses of administration, the defendant Ashbel H. Barney took possession of the assests of the estate, and proceeded to distribute them. The estate, exclusive of the inter- est in the land grant, amounted to $177,962.48, and was substantially all personal property. The defendant Barney held an interest of his own in the land grant, as one of the parties who contracted with the railroad company. Shortly after the death of Mr. Lathem, two of his sisters and their husbands orally assented to a sale by the defendant Barney of the interest of the estate in the land contract for the sum of $10,000, he at that time advising them that it was worth no more.

It does not appear that any of the other heirs were consulted as to this disposition of the interest in the land. Some time prior to the 9th of September, 1871, the defendant Barney entered into an greement to sell the interest of the estate in these lands for $10,000 to the eight persons who, with Latham, had by such contract purchased the same from the railroad company, Mr. Barney himself being one of such persons.

At or about this time the defendant Barney caused to be prepared a statement of account between himself and the estate, and a release to be signed by each of the heirs. One copy of this statement was prepared for each of the heirs and one for Mr. Barney, and they were all sent together to each heir to be signed, and, after they were signed, one excuted copy was sent to each. One of the copies of this statement and release differed from the others in one particular, hereinafter stated, and all but that one read as follows:

'Whereas, Charles F. Latham, late of Irvington, county of Westehester and state of New York, died intestate, leaving a considerable estate, consisting of personal property, to be distributed among his next of kin, the said Latham having survived his wife and parents and leaving no children or representatives of a child;

'And whereas, the next of kin of said Latham entitled to participated in the distribution of said estate, for the purpose of saving the delay and expense incident to legal proceedings to effect such distribution, have agreed among themselves as to the division of said estate, and the amount going to and receivable by each of the said next of kin, whether in money, stock, bonds, or other property 'And whereas, the persons entitled to participate in such distribution, and who have agreed upon the same, are the following.'

Here follow the names and residences of the next of kin, a recital of the advancement to one of the sisters, and a release by her of her interest in the estate to her brothers and sisters; releases by each of the heirs to the others of all claim and demand against the estate; a recital that Barney had in his possession certain of the assets and property of the deceased, which he had surrendered and delivered to the next of kin; and an agreement 'that the said parties hereto, in consideration of the premises and of the surrender and delivery to the said next of kin of the aforesaid property and assets, have, and each of them hath, released, * * * and each of them do * * * release and forever discharge, the said Ashbel H. Barney * * * of and from all claims, demands, actions, and causes of action on account of the said assets and property of the said Charles F. Latham so in his possession or under his control. In witness whereof,' etc.

This was signed by all of the heirs, including the plaintiffs, and a schedule was attached, 'showing the estate of which the late Charles F. Latham died possessed, and the distribution among the next of kin, in the foregoing agreement mentioned.' This estate consisted almost wholly of cash, shares in corporations, bonds, and coupons, and other personal property, with the following exception: 'Int. in W. & St. P. lands, estimated, $10,000.' Of the 11 releases the one sent to Edward P. Latham accidentally differed from the others in using, instead of the words above cited, the words, 'Interest in W. & St. P. land sales, say $10,000.' About January 1, 1872, defendant Barney inclosed to each distributee, with the release and a supplemental statement of the assets, not material here, a check for his or her share of the estate, which was received and retained by each.

Plaintiffs, in December, 1876, brought this action upon the ground that the foregoing proceedings and the release executed by them did not divest them of their interest in the lands. The circuit court rendered a decree in favor of the plaintiffs, in accordance with the prayer of their bill, both for a money recovery and for an account of the proceeds of such lands as should be subsequently sold. 4 McCrary, 587, 14 Fed. Rep. 433. From this decree an appeal was taken to this court.

Mr. Justice FIELD dissenting. 14 Fed. Rep. 433, reversed.

Thomas Wilson and Lloyd W. Bowers, for appellants.

C. K. Davis, for appellees.

Mr. Justice BROWN, after stating the facts in the foregoing language, delivered the opinion of the court.

This case depends upon the validity of the sale made by the defendant Barney to himself and his associates of the interest of Charles F. Latham in the lands granted in aid of the construction of the Winona & St. Peter Railroad Company, and the binding effect of the releases executed by the plaintiffs and the other heirs of Latham. This sale is attacked upon the ground that it was made by Barney, as trustee for the heirs, to himself and his co-contractors in the construction of the road, and for a grossly inadequate price.

It seems that a few days before the death of Mr. Latham he had an interview with the defendant Barney, in whom he had perfect confidence, and requested him to make a distribution of a part of his property to certain beneficiaries, and to divide the residue among his brothers and sisters and their children. In the early part of 1871, Danford N. Barney, of New York, a member of the syndicate which had constructed the road, and Judge Kelly, of Cleveland, each of whom had married a sister of Latham, met with their wives at Irvington, N. Y., called in the defendant Ashbel H. Barney, and requested him to make a distribution of the estate, for the purpose of saving time and expenses. The value of Latham's interest in the land grant was the principal subject of discussion. To quote Barney's own words: 'I stated to them that it was very difficult, indeed, to fix an accurate value for that property; there were so many contingencies that might affect its value. They seemed to be very anxious, indeed, as to making a settlement without the intervention of the probate court. * * * They asked me to say what I thought it was worth, not stating the facts as I generally understood...