McLoughlin v. Shaw

Decision Date20 July 1920
Citation95 Conn. 102,111 A. 62
CourtConnecticut Supreme Court
PartiesMcLOUGHLIN v. SHAW et al.

Appeal from Superior Court, Fairfield County; Howard J. Curtis Judge.

Action by James H. McLoughlin against William G. Shaw, trustee, and others. From judgment for defendants, both parties appeal. No error.

Action to foreclose a mortgage and for possession of the mortgaged premises, brought to the superior court for Fairfield county and tried to the court before Curtis, J.

On February 12, 1904, Cossitt and Comstock, both residing in Canada, owned jointly Roton Hill Farm, in Norwalk, Conn., and at their request the defendant Shaw a lawyer in Canada, drew a trust agreement, which they executed. It provided that Cossitt was to deed his interest in this farm to Comstock and that Comstock was to hold the farm as security for payments made by him on account of the farm, and after repayment Comstock was to hold the farm in trust for the children of Shaw.

The trust deed further provides that Comstock may transfer and deliver over to Shaw and his wife, or the survivor of them, or to such others as they may designate, any residue of these premises and of the proceeds derived therefrom, to hold the same upon trust for said children upon the following terms:

Such trustee may sell, convey, charge, and dispose of all such residue and increase and hold the proceeds thereof as trustees of said children.

Mr. and Mrs. Shaw shall during their joint lives and the life of the survivor maintain a home for the children, and for the maintenance of the home may devote such part of the residue and increase from time to time at their discretion; " provided that the said William George Shaw and Estelle Cossitt Shaw and the survivor of them, and each of said children as he or she may attain an age enabling them, him, or her so to do, shall contribute in due proportion to the maintenance and support of such home to the best of their, his, or her ability, to the end that said rest, residue, and remainder, surplus and balance, increase and accumulations may be preserved so far as possible."

Mr. and Mrs. Shaw are to devote so much of their time and knowledge, skill, and energy as may be necessary for improving and developing and managing said premises, and all such service shall be deemed to be paid by their occupancy or enjoyment of said home.

All the residue not needed for the maintenance of the home may, at the discretion of Mr. and Mrs. Shaw, be used for the support, education, or advancement of the children. All such residue may be reinvested at the discretion of the then trustee, with the concurrence of Mr. and Mrs. Shaw, with the intention of benefiting the trust fund.

All the residue shall be distributed among the children, at the discretion of Mr. and Mrs. Shaw.

The beneficiary defendants are the children of Mr. and Mrs. Shaw and the grandchildren of Mr. Cossitt, and at the time of execution of the trust deed resided with their parents in Connecticut, where the premises conveyed were located.

Shaw, in using the word " charge" in the trust deed, used it in the belief that it was the equivalent of " mortgage."

In order to procure a mortgage on said property, Shaw, as trustee, on April 7, 1913, conveyed these premises to one Hamilton, and he executed a mortgage for $35,000 to Shaw who assigned this to one McLoughlin, and thereupon Hamilton reconveyed to Shaw, trustee, subject to the mortgages. In fact, the trustee got value from this mortgage transaction of about $16,000.

Shaw did not give these premises or the matters of the trust proper attention, and did not pay the tax and interest.

The plaintiff acquired the mortgage subject to the equities between McLoughlin and defendants.

No evidence was offered of the law of Canada governing the matters in issue.

None of the beneficiaries under the trust deed were consulted by the trustee in said loan, and it did not appear that they had knowledge concerning the same or the purpose of the loan.

The transaction was attacked for fraud. In view of the conclusions reached in the opinion, the facts concerning this issue are not set out in detail.

McLoughlin, the owner and holder of the mortgage, deceased, and the executors of his estate assigned said note and mortgage to the plaintiff.

Edward M. Lockwood, of Norwalk, and Herbert C. Brinckerhoff, of New York City, for appellants.

Henry E. Shannon and Frank L. Wilder, both of Bridgeport, for appellee William G. Shaw.

John H. Light and Truman Light, both of South Norwalk, for appellees Mary E. Shaw, and others.

WHEELER, J.

The note and mortgage in reliance upon which the plaintiff brings his foreclosure were duly executed, and will be presumed valid until the contrary be proven, and the burden of proving this is upon the defendants.

The mortgage and note were executed under the authority of the trust agreement, and the defendants claim in their defenses, first, that the trust agreement gave no power to execute the note and mortgage; and, second, that they were procured by fraud, and hence are invalid.

The trial court held these instruments invalid because " the terms of that agreement do not permit the trustee to mortgage the property," and it refused to find that the agreement was procured by fraud.

The plaintiff's appeal tests the correctness of this decision, while the defendants' appeal seeks to correct the finding and thus substantiate the second defense.

The defendants do not press their appeal in case this court sustains the trial court in its holding that there was no power in the trustee to execute the mortgage. Since this is the conclusion we have reached, we do not consider the defendants' appeal.

There are two grounds upon which the lack of power to execute this mortgage is placed by the defendants.

First, it is claimed there is no power to mortgage given by any of the terms used in the trust agreement; and, second, even though one or more of the terms used might be interpreted as giving this power, the agreement as a whole clearly denies such power.

The plaintiff insists that the agreement is governed by the law of Canada.

If this were true, we must still interpret and construe it by the law of Connecticut, for the finding is that no evidence was offered of what the law of Canada was; hence it is presumed to be like our own law. American Woolen Co. v. Maaget, 86 Conn. 234, 85 A. 583, Ann. Cas. 1913E, 889.

We need not rest upon presumption. This agreement is to be operative in Connecticut, it concerns premises here, and the beneficiaries of its bounty are minor residents of Connecticut.

Where the contract is to be performed elsewhere, or is to have its entire beneficial operation and effect elsewhere, then the law of the latter place, rather than the lex loci contractus, governs; for it is presumed to have been made with reference to the law of the place of its beneficial operation. Chillingworth v. Eastern Tinware Co., 66 Conn. 306, 317, 33 A. 1009; Beggs & Co. v. Bartels et al., 73 Conn. 132, 46 A. 874, 84 Am.St.Rep. 152; White v. Holly, 80 Conn. 438, 445, 68 A. 997; Illustrated Paper Co. v. Holt, 85 Conn. 140, 81 A. 1061.

The only language in the agreement in which the defendants find the power to mortgage is in the clause which provides that the trustees " may at any time sell, convey, charge, and dispose of all such residue," etc.

Narrowing the claim it is that the power to " charge" is equivalent to...

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28 cases
  • Bowman v. Grolsche Bierbrouwerij BV
    • United States
    • U.S. District Court — District of Connecticut
    • July 9, 1979
    ...86, 21 L.Ed.2d 96 (1968). See also Union & New Haven Trust Co. v. Watrous, 109 Conn. 268, 285, 146 A. 727 (1929); McGloughlin v. Shaw, 95 Conn. 102, 106, 111 A. 62 (1920). The evidence presented, construed in the light most favorable to American, establishes prima facie that a contract exis......
  • McDonald v. Hartford Trust Co.
    • United States
    • Connecticut Supreme Court
    • February 23, 1926
    ... ... 234, 243, Ann.Cas. 1913E, 889; Hoxie v ... New York, N.H. & H. R. Co., 73 A. 754, 82 Conn. 352, ... 355, 17 Ann.Cas. 324; McLoughlin v. Shaw, 111 A. 62, ... 95 Conn. 102, 106. Our law provides that every person has a ... domicile somewhere; the rule is a necessary one, since ... ...
  • Spelke v. Shaw
    • United States
    • Connecticut Supreme Court
    • December 7, 1933
    ...occasion of the last preceding appearance in this court. Spelke v. Shaw, 114 Conn. 272, 155 A. 715, 158 A. 809. See, also, McLoughlin v. Shaw, 93 Conn. 102, 111 A. 62; Shaw v. Spelke, 110 Conn. 208, 147 A. 675. On former appeal in the present action (Spelke v. Shaw, supra), this court held ......
  • Buchanan v. Employers Mut. Liability Ins. Co. of Wis., 45105
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    • July 13, 1968
    ...743 (8th Cir.1954), in which, at page 748, the Court said: "While the word 'charge' has a very broad and varied meaning (McLoughlin v. Shaw, 95 Conn. 102, 107, 111 A. 62), a person or thing is not 'in charge of' an insured within the meaning of the policy unless he has the right to exercise......
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