McCulloch v. Tompkins

• Decision Date: 14 June 1901
• Citation: 49 A. 474,62 N.J.E. 262
• Parties: McCULLOCH v. TOMPKINS.
• Court: New Jersey Court of Chancery

49 A. 474

62 N.J.E. 262

McCULLOCH

v. TOMPKINS.

Court of Chancery of New Jersey.

June 14, 1901.

(Syllabus by the Court.)

Bill by Kate McCulloch against George Tompkins to compel the accounting of defendant as trustee. Decree in favor of complainant.

The bill in this case is filed by the complainant against George Tompkins, alleging that, being in feeble health, she had placed herself under the defendant's treatment as a Christian Science healer. She alleges that he fraudulently procured from her a power of attorney to collect her moneys, and Invest the same as he should determine, without her knowledge of its contents and effect; that he obtained from her large sums of money, amounting in the aggregate to $4,030; that he purchased a house and lot No. 426 Linden street, in the city of Camden, with her money, for $4,000, and took the title thereto in his own name, without any reference to the complainant as cestui que trust; that she is unable to get any satisfactory information from the defendant as to where and how her moneys were invested; and she prays an accounting, and restraint upon the defendant from conveying or incumbering the house and lot No. 426 Linden street, Camden, purchased with her money, and for an accounting as to the investments made of her money in defendant's hands, and for a decree that he convey to hex the Linden street property, and that he should return to her the residue of her moneys in his possession. The defendant answers, claiming that the complainant placed herself under his care for the purpose of "pursuing a course in Christian Science for amelioration and restoration in health," and agreed to pay $5 a week therefor, and alleges an agreement on the complainant's part that the total sum thus due is $255. He denies any fraud, but admits that he received from the complainant certain claims due to her for collection. He claims that she proposed a compensation of 20 per cent. to be paid to him for their collection. He alleges that he accepted this proposition, and has collected of the complainant's moneys $4,053.87, for which he claims a commission of $810.27. He denies that the power of attorney was not read to her, and alleges that it was made at her own solicitation. He denies that he purchased the Linden street house for $4,

000, and alleges that he agreed to pay the mortgage thereon to the amount of $2,900, and the further sum of $3,100, by direction of the complainant herself, and declares that he now holds the property for the complainant, subject to the mortgage debt. He denies that the complainant is not informed as to the investment of her money, and avers that she knows where the same is invested, and that it was done by her direction. He claims that he has paid for her at various times $354.45, and alleges that he has many times requested complainant to pay the balance due him, and to accept a transfer of the" said house and lot from him in full discharge of his trust Issue was joined, and the cause came to final hearing.

At the opening of the cause, defendant's counsel tendered a deed, conveying the Linden street property to the complainant for the named consideration of $6,000. In response to this tender, the counsel for the defendant stated that the title in the Linden street property, as held by the defendant, represented an investment of but $1,100, with $2,900 of mortgage debt thereon. The vice chancellor stated to the complainant's counsel that they might accept the tender, or decline it, or hold it under advisement until an opportunity could be had to see whether the deed secured the rights of the complainant. Counsel for the defendant declared that they made the tender of the deed in compliance with the prayer of the bill asking for a conveyance of the property. The counsel for the complainant stated that they would hold the tender under advisement The hearing then proceeded by the examination of the complainant and of the defendant The testimony taken, with the answer of the defendant, showed that there was no dispute between the parties that the defendant had received $4,053.87 of the complainant's money; that he had repaid to her various sums, amounting to a sum more than $300; that he had rendered to her certain services as a Christian Science healer, for which at the hearing she said she was willing to allow a credit of $255. The remaining matters were necessarily involved in any accounting made by the defendant of his disposition of the complainant's money. The principal Items in dispute were the defendant's claim that he had expended $3,100 in cash of the complainant's money in the purchase of the Linden street house, in part payment of an agreed purchase price of $6,000, and the defendant's claims of a commission of 20 per cent. for the collections which he had made for her. The stating of the account was then referred to a master, and the further hearing of the cause was laid over until the coming in of the master's report. The master's report has now been filed. He reports that the purchase of the Linden street house was made by the defendant without the knowledge or consent of the complainant; that the cash payment was $1,100, and the agreement to pay a subsisting mortgage thereon for $2,900, making the sum of $4,000 the full consideration for that property, the title to which the defendant took in his own name. The master further reports that the complainant had, in writing, signified her consent to accept a conveyance of the said premises at the price of $4,000, allowing to the defendant a credit for the $1,100 of her money expended in the purchase. The master allows to the defendant the sum of $249.98 for various incidental expenses attending upon the Linden street property. He further reports that, although the defendant held the complainant's money as trustee for her, no part thereof has been invested by him, except the said sum of $1,100, expended in the purchase of the Linden street house; that there was no specific contract between the parties as to any commissions to be allowed to the defendant, but that the complainant had consented in writing to allow the defendant $100 for collecting and investing her moneys, and for that reason the master allowed the same.

Upon the coming in of the master's report, the defendant filed exceptions—First, because the master exceeded his authority in inquiring as to the good faith of the defendant's investment of the complainant's money in the Linden street house; second, the complainant had given the defendant discretionary authority to invest the money, and, if she accepted the property purchased by him as an execution of his trust, she was bound to accept it with its burdens or to refuse it; third, that the master had perverted the testimony in reporting that the price to be paid for the Linden street property was but $4,000, including the mortgage, when in fact the price was $6,000; fourth, that the master erred in excluding a $2,000 note made by the defendant to Mrs. Baker (the grantor of the Linden street property) from allowance as part of the consideration of that property; fifth, that the master exceeded his authority by inquiring into the advantages of the investment of the complainant's money in the Linden street property; sixth, that there was no special contract shown between the complainant and the defendant as to commissions to be allowed the defendant, that he should have the same commissions as are allowed by statute to a trustee, and that the...