Stephen Harding v. Asa Handy Caleb Wheaton Asa Handy Caleb Wheaton v. Stephen Harding

• Decision Date: 01 March 1826
• Citation: 24 U.S. 103,6 L.Ed. 429,11 Wheat. 103
• Parties: STEPHEN HARDING and Others, Appellants , v. ASA HANDY and CALEB WHEATON, Respondents . ASA HANDY and CALEB WHEATON, Appellants , v. STEPHEN HARDING and Others, Respondents
• Court: U.S. Supreme Court

24 U.S. 103

6 L.Ed. 429

11 Wheat. 103

STEPHEN HARDING and Others, Appellants, v. ASA HANDY and CALEB WHEATON, Respondents.

ASA HANDY and CALEB WHEATON, Appellants,

v. STEPHEN HARDING and Others, Respondents.

March 1, 1826

THESE were cross appeals from the decrees of the Circuit Court of Rhode Island.

The bill filed in the Court below by the appellants, Harding, and Nancy his wife, and Sterling Wheaton, alleged, that they, with four others not made parties to the suit, together with Caleb Wheaton, one of the defendants, were entitled, as heirs at law of Comfort Wheaton, deceased, to the real property mentioned in the bill, and situate in the State of Rhode Island. That Comfort W., about the year 1802, began to exhibit symptoms indicating a loss of intellect, and soon became, from various causes mentioned in the bill, incompetent to the management of his estate, and died in 1810. That, under these circumstances, the defendant, Caleb W., (his son,) and who acted as well for himself, as in behalf of the plaintiffs, and the defendant Handy, (the son-in-law of Comfort W., entered into an agreement to endeavour to take his estate out of his hands, and to preserve it for the benefit of his heirs at law. That it was agreed that Comfort W. should be prevailed on to convey his real property to Handy, for a nominal consideration, who should forthwith execute an instrument of writing, declaring that he took and held the same in trust; first, to provide for the decent support of the grantor, during his life; and, after a full remuneration for his expenses and trouble in that respect, to hold the residue of the estate for the benefit of the heirs at law. That, on the 9th of May, 1805, Handy did procure such conveyance, for the nominal consideration of 2,178 dollars, from Comfort W., and entered upon, possessed, and enjoyed, the property in question; but that he refused to execute any declaration of trust as he had agreed, but held the property, claiming it as his own. The bill then alleged, that the defendant, Caleb W., after the death of his father, Comfort W., acting on behalf, and for the benefit of, the heirs, procured letters of administration of the personal estate of Comfort W. to be issued by the proper Court, and caused such further proceedings to be had, as that the administrator exposed to sale the real property before mentioned, which had been conveyed to Handy, and that Caleb W. became the purchaser thereof, for the general benefit of the heirs. That various suits at law had resulted from these transactions, (and, among others, an ejectment brought by the defendant, Handy, against the defendant, Caleb W.,) by which the value of the property had been much deteriorated. The bill then prayed for an account respecting the property; that a decree might be rendered, exonerating it from the deeds to the defendant, Handy, after satisfying his just claims, and ordering one fifth part of the real estate to be set off to the plaintiff, Nancy H., and one fifth to the plaintiff, Sterling W.; and for general relief.

The answer of the defendant, Handy, denied that Comfort W. was incapable of conveying his property when the deeds of the 9th of May, 1805, were executed; and insisted that his intellect was perfectly sound at that time. It also denied, that he, the defendant, purchased as a trustee, and averred, that he was a purchaser for a valuable and full consideration. The answer of the other defendant, Caleb W., admitted the allegations of the bill, and submitted to any decree the Court might think equitable.

A great mass of testimony taken in the Court below, appeared in the record, which was very contradictory, as to the capacity of Comfort W. to make the conveyance in question.

The Circuit Court, by its interlocutory decree, directed that the deeds of the 9th of May, 1805, should be set aside, as having been obtained by false impressions made on a mind enfeebled by old age, and various other causes; and that an account of the receipts and disbursements of the defendant, Handy, should be taken, and that he should be credited for all advances made, and charges incurred, for the maintenance of Comfort W. during his lifetime, and for repairs and improvements made on the real estate. Exceptions were filed by both parties to the report which was confirmed by the Court below. The final decree declared, that the real estates conveyed to the defendant, Handy, should stand charged with the amount of the balance of the account due to him; that the same should be sold, and the proceeds brought into Court; that the said balance should be paid to him, deducting his proportion of the charges, &c. and the residue, deducting their proportions, &c. should be paid over, and distributed among the heirs at law of Comfort W. If there be any such heirs, not made parties, they to be at liberty to come in under the decree, and receive their shares, paying their proportions of costs and expenses, otherwise to be excluded. That each party before the Court should pay his own costs, excepting the fees of the officers of the Court, which should be a charge on the property, and borne by the parties according to their respective proportions of interest in the proceeds of the sale.

From this decree both parties appealed.

Feb. 22d.

Mr. Wheaton, for the original plaintiffs, made the following points:

1. That the decree ought to be reversed, so far as it declared, that the real property should stand charged with the advances made by the defendant, Handy.

2. That it ought, in all other respects, to be affirmed.

On the first point, he contended, that the deeds having been obtained by the imposition of the grantee on the grantor, the property ought not to stand charged with the expenses incurred by the former. That, even supposing him to have held as a trustee during the lifetime of the plaintiff's ancestor; after that period he ceased to hold in that capacity, and became a malae fidei possessor, who was not entitled to be allowed for improvements made on the land.^a

On the second point, he argued, (1.) as to the objection made in the Court below, of the defect of jurisdiction in that Court; that the words of the Judiciary Act of 1789, c. 20. s. 16. providing that suits in equity should not be sustained in the Courts of the Union, 'in any case where plain, adequate, and complete remedy, can be had at law,' were not intended to abridge the equity jurisdiction of those Courts; that it had been frequently determined, that the proceedings in those Courts were to be according to the English system of equity, both as to principles, practice, and jurisdiction;^b that fraud and trust were familiar subjects of cognizance in the Court of Chancery; and that equity often interfered to redress fraud, even after a verdict and judgment at law.^c That this was not a case analogous to that which had been cited in the proceedings below, where the only ground of equitable interference was a discovery sought to establish the

^a Green v. Biddle, 8 Wheat. Rep. 77-83. 2 Ves. sen. Rep. 516. 2 Ves. Rep. 281. Belt's Supplement, 345. 396. 1 Bro. Ch. Rep.. 420.

^b Robinson v. Campbell, 3 Wheat. Rep. 221. United States v. Howland, 4 Wheat. Rep. 108.

^c 2 P. Wms. 425. 2 Vern. Rep. 146. 2 Ves. sen. Rep. 628 fraud, and the plaintiff having failed in the discovery, and having a complete remedy at law, should not be allowed to proceed in equity.^d

2. Another objection was, that this was an attempt to establish a trust by parol evidence, contrary to the statute of frauds. The Court below did not consider it necessary to determine this point, because, at all events, there was a resulting trust for the heirs, (after allowing for advances, &c.) which, even in England, might, unquestionably, be established by parol. But a comparison of the English statute of frauds, 29 Charles II. c. 3. with the provisions of the local statute of Rhode Island on the same subject, would show, that the latter did not extend to trusts, and, therefore there could be no question of the admissibility of parol evidence in this case.

3. It was a case of imposition practised by a son-in-law upon his father-in-law, an old man, infirm in body and mind, morally and physically incapable of managing his own affairs, and of resisting the influence and importunities of the other party, standing in that intimate relation. It was analogous to other cases of fraudulent and hard bargains made with expectant heirs, and other persons standing in peculiar relations, rendering them liable to imposition. The great leading case on the general analogy, was that of Chesterfield v. Jansen,^e which was not cited

^d Clarke v. Russell, 7 Cranch's Rep. 89.

^e 2 Ves. sen. Rep. 157 as a direct authority, but as illustrating the general principle. Lord Hardwicke there lays down the rule on which the Court of Chancery proceeds, and classifies the cases in which it will interfere. These are, 1. Actual fraud. 2. Such as is apparent, from the nature of the bargain itself, as being fragrantly unequal. 3. A kind of fraud which may be presumed from the circumstances and condition of the parties contracting. 4. Which may be inferred from the nature and circumstances of the transaction, as being an imposition and deceit on other persons not parties to the fraudulent agreement. 5. Fraud, infecting catching bargains with heirs, reversioners, expectants, &c. There are to be found in the books a great variety of applications of these principles. Thus, in Clarkson v. Hanway,^f the suit was brought by an heir at law to set aside a conveyance by his ancestor, who is described as a 'weak man,' 72 years old, who had conveyed his estate for a small annuity. The conveyance was set aside on those circumstances alone, by the Master of the Rolls, and decree confirmed, on appeal, by Lord Macclesfield. In Bates v. Graves,^g the bill was filed by a son, to set aside a conveyance, (which was confirmed by a will,) by his father, to a son-in-law, under...