Spelke v. Shaw

Decision Date09 February 1932
Citation114 Conn. 272,158 A. 809
CourtConnecticut Supreme Court
PartiesSPELKE et al. v. SHAW et al.

Appeal from Superior Court, Fairfield County; Frederick M. Peasley Judge.

Action by Abram Spelke and other's against William G. Shaw individually and as trustee, and others to quiet and settle title to certain lands in the town of Norwalk. From a judgment for defendants for their interests after trial to the court, plaintiffs appeal.

Error and cause remanded.

See also, 155 A. 715.

William H. Comley, of Bridgeport, for appellants.

Charles S. Hamilton, of New Haven, for appellees.

Argued before MALTBIE, C.J., and HAINES, HINMAN, BANKS and AVERY, JJ.

HAINES, J.

The subject-matter of this litigation first came before this court in July, 1920, in an action to foreclose a mortgage upon the real estate in question. McLoughlin v Shaw, 95 Conn. 102, 111 A. 62.

It then appeared that in 1904 the land, known as the Roton Hill Farm, was formerly owned jointly by Cossit and Comstock, who executed a trust agreement providing that Cossit should deed his interest to Comstock, who was to hold the farm as security for payments made by the latter on account of the farm, and after repayment, was to hold the farm in trust for the children of Shaw, who were the grandchildren of Cossit; or he could transfer it to Shaw and his wife or the survivor of them to hold for their children upon the same trust. Comstock chose the latter course and transferred the premises, and at the time of the action Shaw was the trustee thereof. In order to procure a mortgage upon the property, Shaw, as trustee, in 1913 conveyed the premises to a man named Hamilton who then executed a mortgage to Shaw who assigned the mortgage to a man named McLoughlin; Hamilton then conveyed the premises to Shaw, trustee, subject to the mortgage. Executors of the estate of the mortgage holder. McLoughlin, assigned the mortgage to the plaintiff Cornelia McLoughlin, who brought the action for foreclosure of the mortgage, Shaw, trustee, set up two defenses to the action: (1) That the trust agreement conferred no power to make the mortgage; and (2) that the mortgage was procured by fraud and was invalid. We held the mortgage invalid for the reason that the trust agreement did not authorize the incumbering of the lands by a mortgage; " reading this trust deed as an entirety, we think it does not give these trustees the power to mortgage." Page 110 of 95 Conn., 111 A. 62, 65.

In a writ of error which came before us in 1929, Shaw v. Spelke, 110 Conn. 208. 147 A. 675, it appeared that Spelke furnished $20,219 to Shaw, trustee, and had received an absolute deed of certain of the property and had brought an action against Shaw, individually and as trustee, to quiet and settle the title. This is the action we are now considering. The plaintiffs alleged that the defendant as an individual and as trustee was claiming an interest in the property adverse to the plaintiffs, and Shaw again set up two separate defenses: (1) That the money in question had been advanced by Spelke to him as trustee to enable the trustee to redeem the premises from an impending foreclosure; and that Shaw individually and as trustee had given a warranty deed, and his wife and all the children as beneficiaries under the trust had given deeds of their interests to Spelke in consideration for that advancement, and that Spelke had at the same time executed and delivered to Shaw individually a unilateral agreement granting Shaw, in consideration of the prompt payment by the latter of interest on the money in question, together with taxes upon the property, an option to purchase the property for $30,219, all to be exercised by Shaw before July 15, 1927, a period of two years. To these papers was attached an affidavit by Shaw that the facts recited in the option were true, and that the conveyances to Spelke were absolute conveyances in fact as well as in form; (2) that Shaw, trustee, did not intend to make an absolute conveyance to Spelke, and that he executed this affidavit under undue influence and economic pressure, and that the conveyances were in fact only for security for the $20,219 which had been furnished by Spelke, and that he, Shaw, trustee, was still the rightful owner of the property. Spelke by his pleading then denied that the conveyances were for the purpose of security, and denied that the affidavit was procured by duress. He further pleaded that Shaw had been in default in payments required under the option, and had filed a caveat against the property setting forth his claim of title as trustee. In this situation, the parties entered into a stipulation that the court might find the issues in favor of the plaintiff and enter a judgment in accordance with a judgment file attached to the stipulation, and judgment was so entered, holding that the plaintiff had absolute title in fee, and that Shaw, trustee, had no interest, and that the interest of Shaw individually was only such as he acquired under the option referred to; and further that Shaw was in default, but that upon payment by him individually of the sum of $30,771.46 on or before June 1, 1928, he should receive a deed of the premises; otherwise all his rights to terminate. The writ of error referred to brought this judgment in question, and we held that, the judgment having been by consent, the parties would ordinarily be estopped from claiming that the court erred, and the judgment would be held absolutely conclusive; but that under the circumstances disclosed by the record, Shaw had obtained the right to purchase the property in his individual capacity, and the judgment had by its terms confirmed that right to him, with the result that he could thus acquire as his own the very property which he had formerly held as trustee, free from all claims of the beneficiaries. We could not put our stamp of approval upon such a result, and, as the beneficiaries had not been parties to the action, we held their rights could not be concluded in that proceeding, and it was necessary to set the judgment aside.

Thereupon the plaintiff by permission of the superior court amended the complaint, and cited in the wife and children of Shaw as parties in interest. Shaw in his capacity as trustee then made answer admitting that he had no claim upon the property individually, but asserting his ownership as trustee, and answers were filed in behalf of the children as beneficiaries setting up their claims to the property as such. It having thus been conclusively decided that Shaw in his individual capacity had no interest in the property, the controlling question before the trial court was whether the conveyances between the...

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