Whitney v. Whitney

• Decision Date: 16 November 1944
• Citation: 57 N.E.2d 913,317 Mass. 253
• Parties: JOHN E. WHITNEY v. FRANCIS W. WHITNEY, executor.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

317 Mass. 253

57 N.E.2d 913

JOHN E. WHITNEY v. FRANCIS W. WHITNEY, executor.

Supreme Judicial Court of Massachusetts, Middlesex.

November 16, 1944

February 7, 1944.

Present: FIELD, C.

J., LUMMUS, DOLAN & RONAN, JJ.

Contract, Validity Consideration. Deed, Consideration. Trust, Termination Conveyance of real estate, Trustee's duty of fidelity. Executor and Administrator, Real estate of decedent, Duty of fidelity.

A transaction whereby real estate, devised under a will in trust for the maintenance and benefit of the testator's daughter for life and to others at her death, was conveyed by a deed joined in by those who were both executors and trustees under the will and by the life beneficiary and all the beneficiaries in remainder, would result in a termination of the trust contrary to the testator's intent and was a perversion of the trust where it appeared that its purposes still were unaccomplished and were not incapable of accomplishment and that the sole consideration for the conveyance was a mortgage by the grantee running only to the beneficiaries in remainder.

This court of its own motion took notice of the illegal conduct of one who, as executor and trustee under a will which gave a power of sale of real estate to him as executor but not as trustee, before the termination of the trust made a conveyance of trust real estate solely in consideration of an obligation of the grantee running, not to the estate, but to the grantor and others as individuals; and ordered judgment for the defendant in an action by such grantor individually to enforce such obligation to the extent of his share therein.

CONTRACT. Writ in the First District Court of Eastern Middlesex dated November 4, 1941.

The case was heard by Daly, J. P. A. Chapman, for the defendant.

W. H. McLaughlin (G.

A. McLaughlin with him,) for the plaintiff.

DOLAN, J. This action of contract is brought to recover $1,000 under an alleged contract described below. A judge of the District Court found for the plaintiff. Upon report to the Appellate Division an order was entered dismissing the report, and the defendant appealed.

The following facts are disclosed by the evidence: The defendant's testator was the father of John E. Whitney, Edward C. Whitney, Francis W. Whitney and Estelle M. Whitney. He survived his wife, who was the mother of these children. By a will dated August 17, 1929, she devised her "land and buildings" located on Fern Street, in Lexington, to her sons John (the plaintiff here) and Edward, in trust, for the use and benefit of her daughter Estelle for and during the term of her natural life, with directions to apply the income therefrom to her maintenance, and upon the death of Estelle to her sons John, Edward and Francis in equal shares. The testatrix devised the residue of her estate to Estelle, who has been a cripple since childhood. There was evidence that the defendant's testator wanted to buy the Fern Street property, that the plaintiff and his brothers agreed to sell it to him for $3,000, and that a mortgage would be executed to pay that sum. The evidence discloses that by quitclaim deed dated October 24, 1938, Estelle and her three brothers, two of them as executors and trustees as well as individually, conveyed all their right, title and interest in the premises to their father, the defendant's testator; that on October 25, 1938, he executed a mortgage of the premises for $3,000 in statutory form to his three sons individually; that in the deed to their father John and Edward were described as executors and trustees of their mother's will, Estelle as cestui que trust under the will, and John, Edward and Francis as devisees under the will. All signed the deed, the executors and trustees in those capacities and individually. The will conferred a power of sale of the real estate of the testatrix upon the executors of her will. The plaintiff testified in direct examination that at a conference prior to the execution of the deed and mortgage Mr. Chapman, the attorney, told him that he "would collect $1,000" and that three or four months "after the death of the defendant's testator he made a demand for the $1,000" as his one-third interest.

On cross-examination he testified that "the father's business was poor and that the meeting [prior to the execution of the instruments in question] was for the purpose of salvaging his business and caring for Estelle who has been a cripple since childhood." Mr. Chapman, the attorney for the defendant, who represented the parties when the instruments were executed and who had prepared them, testified in substance as follows: The purpose of the preliminary meeting of the parties was to cut down the expense of the defendant's testator who was caring for Estelle, a cripple, in a large home and maintaining a separate home for himself; that his business did not warrant such expense; that it was agreed by all that he "dispose of the two homes maintained by him and . . . move to the home in Lexington [that devised in trust] and . . . care for his daughter . . . at that home"; that he wanted title in his own name to which all agreed; that his business at that time was "bad and he had been disposing of his assets at less than their value to secure cash"; that the sons feared that he might also sell the property in which Estelle had "surrendered a life estate"; that at the suggestion of the attorney "a second mortgage [there was a first mortgage on the property for $2,500 which had been given to a trust company] was drawn with an arbitrary figure set high enough so that a buyer could not be secured"; that accordingly the mortgage back was executed "without any note or other personal obligation on the part" of the defendant's testator; that "at no time was there any talk of sale or price or agreement for payment by the sons or father"; that he (the attorney) never told the plaintiff he could get $1,000; and that the purpose "of the stamp on the mortgage was so that it would not be presumed a mortgage of convenience in case creditors of . . . [the defendant's testator] attached the property." This testimony of the attorney was corroborated by the sons Edward and Francis, the "other parties to the conference." The plaintiff himself testified that it was he who suggested that the mortgage be put on the property so that his father could not sell the property.

The mortgage back was for $3,000, and it was provided therein that it was not to bear interest during the life of the mortgagor, and that it was to run for the term of his natural life and was not to become payable until his death, but that if he should sell, assign or transfer the mortgaged property, the mortgage was to "become due and payable immediately upon the date of such sale, transfer or assignment."

The defendant filed certain requests for rulings, among them the following "1. The evidence is insufficient to warrant a finding for the plaintiff"; and "7. The evidence is sufficient to warrant a finding for the defendant." These requests were denied by the judge who made the following findings of fact: "I find as a fact that prior to October 25, 1938, the plaintiff was the owner of a one-third undivided interest in certain real estate situated in Lexington, that on or about said date he agreed to convey said interest in said property to his father, the defendant's testator, for the sum of one thousand dollars ($1,000) which was to become due and payable if the defendant's testator should attempt to sell, assign or transfer said property or upon the death of the defendant's testator. I find as a further fact that said obligation was not represented by a note but was...