Ewing v. Clark

This case involves the same deed of trust which was considered in Ewing v. Warner, 47 Minn. 446, 50 N. W. 603, and also in Ewing v. Jones, 130 Ind. 247, 29 N. E. 1057, and in Ewing v. Shannahan, 113 Mo. 188, 20 S. W. 1065, in all of which the courts arrived at the same conclusion, to wit, that the deed in question created a valid trust, in favor of the heirs of the grantor, which could not he destroyed, either by revocation by the grantor, or by the deed of reconveyance by the trustee to the grantor, made, not in execution of the trust, but for the purpose of terminating and destroying it.

In Ewing v. Warner defendants’ counsel really admitted that the deed created a valid trust, but contended that, under the facts, the grantor and the trustee had the power to terminate it. Hence, if the question was material, we would not feel bound, by that decision, to hold that the deed created a valid trust. It will be observed however, that in the cases cited the supreme courts of Indiana and Missouri so held where the question appears to have been contested. But in all these cases the defendants rested exclusively upon the terms of the deed of trust and the deed of reconveyance, but here the defendant claims that the deed of trust was unconscionable, and procured by fraud and undue influence on part of the grantee or trustee, and introduced evidence to establish that fact.

The deed of trust was executed in December, 1863, and the deed of reconveyance, by which the parties assumed to terminate the trust, was executed in March, 1866. The deed of trust included about $50,000 worth of property, which the grantor had inherited from ar uncle, and which was all the property he owned. The parties were father and son. The son was a young man, between 22 and 23 years of age, without business experience or knowledge, intemperate in his habits, and easily influenced by others. He had neither wife nor children, and hence was without any heirs for whom he might be presumed desirous to make provision. His father was a man of large wealth and force of character, and of strong will, and had commanding influence over his son. The conveyance was made for the nominal consideration of $600, but no consideration was in fact paid.

The evidence tends strongly to prove that the son had no disinterested or independent advice, and that the deed was prepared and executed in the father’s office. There was also evidence that the son *78stated that the conveyance was executed as a matter of convenience, to enable the father to transact his business during his absence in California, and with the understanding that, in case he returned, and desired a reconveyance, his father was to make it, and that, when these statements were communicated to the father, he did not ■deny their truth. Of course, this was inadmissible for the purpose <of varying the terms of the deed, but it was competent as tending to prove one of the influences which may have.been brought to bear on the son to induce him to execute the deed. The improvident terms of the deed itself are very significant. Here was this boy, without either wife or children, and no certainty that he ever would have ■any, conveying away this large amount of property, — all he had,— giving to the grantee, as trustee, practically unlimited control of it, to manage, sell, and reinvest as he saw fit, and without any provision for the benefit of the grantor, except that, out of the income and profit, the trustee might expend such reasonable sum as the trustee deemed sufficient for the maintenance of the grantor. Moreover, this deed contained no power of revocation, which, in the case of a voluntary settlement in trust, is viewed as a circumstance of suspicion; and, in such a case, very slight evidence of mistake, misapprehension, or misunderstanding on part of the settlor will be laid hold of to set aside the deed. 1 Perry, Trusts, § 104.

The way in which courts of equity scrutinize and deal with transactions of this nature is too familiar law to require discussion. . That equity, so far from enforcing this deed to the father, would have, on the son’s suit, set it aside as improvident and unconscionable, seems to us clear, under all the authorities. Had the trust continued to have been administered up to this time, a court might have been justified in refusing to set aside the deed. Certainly, under such circumstances, and after such a lapse of time, the evidence ought to be clear and strong to justify setting it aside. But over thirty years ago, and within a little over two years after the trust was created, the parties terminated it, so far as they could do so, and the father voluntarily did what he ought to have done, and what any court would have compelled him to do, viz. reconveyed the property. Under these circumstances, the plaintiff, who, being the sole ■heir of the grantor, claims as cestui que trust under the deed, has no equity which entitles him to have the trust upheld and enforced. *79It is immaterial that he was not guilty of any wrongdoing. He is not an innocent purchaser for value; and it is well settled that the fraud or undue influence need not proceed from the recipient of the donor’s bounty, but it is equally fatal to the validity of the gift that such fraud or undue influence was practiced or exerted by a third person, as, for instance, by the trustee. When this deed of trust ■came before the supreme court of Indiana, in a second case, in which it was assailed on the same ground as in this case, that court, upon substantially the same evidence as is before us now, arrived at the same conclusion at which we have arrived, expressed m a very able and exhaustive opinion by the same eminent jurist, Chief Justice Elliott, who delivered the opinion in the first case. Ewing v. Wilson, 132 Ind. 223, 31 N. E. 64.

This really disposes of all the points raised by the assignments of error that are entitled to any special consideration. Possibly some of the findings of fact are in certain particulars stronger than the evidence justified, but the essential findings necessary to support a judgment in favor of the defendants are abundantly justified by the evidence. We do not think that the court committed any error in the admission of evidence. Great latitude is permissible, in a case of this kind, in inquiring into the condition and character of the parties, and all other circumstances having any logical tendency to throw light upon the probable influences which induced the execution of the deed in question. This is especially true where, as in this case, both parties to the conveyance aré dead.

Order affirmed.