Hayes v. Huddleson
Hayes v. Huddleson
Opinion of the Court
delivered the opinion of the Court:
1. The first proposition on behalf of the appellant is: “The burden of proof is upon persons dealing with holders of expectant interests to show affirmatively that a full and valuable consideration was paid.”
Upon whom is imposed the burden of proof in such cases is a matter of no importance in the present case. What the actual market value of plaintiff’s interest was, at the time of her conveyance, is a matter of uncertainty. The elder life tenant was about ninety or ninety-one years of age at the time; but the other, whose age and state of health do not appear, was evidently not a very old woman. While the restraint upon alienation in the mother’s conveyance to plaintiff and her sisters was doubtless inoperative, as matter of law, it would probably tend to deter purchasers, and therefore depreciate the market value. Without undertaking to determine the value of the interest from the evidence introduced, which is not definite in some important particulars, we are satisfied that it was worth considerably more than the $10,000 consideration paid. That the defendant thought it was worth more than $10,000 is apparent from his offer. That it was worth more at the time this
The interest of the plaintiff at the time of conveyance was, however, more than a mere expectancy in the legal sense. The will of Columbus Alexander devised his entire estate to his widow for life.
The particular lot to which this' controversy relates was devised to trustees, who, after the death of the life tenant, were directed to pay a portion of the net rents to a son, Columbus S. Alexander, during his life, and the remainder to three daughters, one of whom was the mother of plaintiff. After the death of Columbus S. Alexander the trustees were directed to sell the entire lot, and distribute the proceeds equally between the said three daughters, “the children of any one who may be deceased to take the parent’s share.” Columbus S. Alexander died before the plaintiff conveyed; the grandmother and mother were alive. The interest of plaintiff as one of the three children of her mother was contingent upon the death of her mother before the direction to sell and divide the proceeds could be carried out. Whatever interest she took, therefore, was under the will; it was not a mere hope or expectancy of succeeding to the estate by inheritance from her mother. At the time of her conveyance to the defendant, one third of the mother’s vested remainder had passed to her by the mother’s conveyance; the latter reserving the rents and income thereof to herself for life.
It is unnecessary to show that the law was settled, at an early day in England, that expectant heirs are entitled for mere inadequacy of price, to have contracts for sale rescinded upon terms of refunding the money actually received, with interest. Such contracts were regarded as a fraud upon the ancestor from whom was the expectation of the estate, who, being kept in ignorance of the transaction, was misled to leave his estate, not in fact to his heir, but to artful persons who had taken advantage of the improvidence and necessities of the expectant heir. The rule has been regarded as declaratory of sound pub-
As this was not a sale of a mere expectancy, the question to be determined is whether the same rule shall be applied in the case of a sale of a vested interest not in possession of the vend- or. The earlier cases in England seem to hold that there is a substantial distinction between the two conditions; but the doctrine that the person entitled to such reversion or remainder is to be treated as an expectant heir, and his contracts of sale governed by the same rule was finally established, and remained in force until abolished by act of Parliament in 1868. 31 Vict. chap. 4. While the rule of the later English cases, that contracts of sale by a reversioner or remainderman will be vacated for mere inadequacy of consideration alone, has the support of eminent text writers and some judicial decisions in this country, it has not received the sanction of the Supreme Court of the United States. On the contrary, it may be regarded, inferentially, as having been denied. Jenkins v. Pye, 12 Pet. 241—252, 9 L. ed. 1070—1074. In that case a daughter had conveyed her remainder in an estate to her father, who was tenant for life. As in this case, the present value of the remainder was rendered uncertain by the existence of the life estate of the father, who was apparently in good health. Under the circumstances, it was said that the sum received “might be considered nearly, if not quite, an adequate consideration.” It was found that no imposition had been practised, no undue influence exercised by the parent; and the conveyance was upheld. Mr. Justice Catron, who concurred with the majority of the court in dismissing the bill on account of laches, in a separate opinion in which the English cases are reviewed, maintained the doctrine which governed in the court below, that the daughter was “an heir of an estate in reversion, which descend
Since that case (decided a. d. 1838), the question seems not to have arisen. The court of appeals of Virginia, in a well-considered case, in 1856, rejected the English rule as inapplicable. In a most able and learned opinion delivered by Allen, P., it was said: “Whatever principle may be adopted in reference to contracts with expectant heirs secretly selling the chance of a parent’s or some relation’s bounty; it seems to me that the actual adult owner of a vested interest in property, whether in reversion or remainder, should not be reduced to the condition of pupilage from regard to any supposed rule of public policy, or for the purpose of extending to him any particular protection. No such rule of public policy exists in this country; and all attempts to fetter the action of the owner by restricting his power of alienation operate injuriously to him. They lessen competition, and so depreciate the market price of his property. There is no valid reason for making this an exceptional case. The contracts of such reversioners or remaindermen, * * * if ma(je by those competent to contract, if they are not gained by ill practice, nor made against the laws, should be kept.” Cribbens v. Markwood, 13 Gratt. 495—507, 67 Am. Dec. 775. We are well satisfied with the reasoning of that opinion and the conclusion reached. See also Whelen v. Phillips, 151 Pa. 312, 25 Atl. 44; Phillip's Estate, 205 Pa. 511, 55 Atl. 212.
. There being no proof of actual fraud or imposition practised upon the plaintiff, the mere fact that she did not receive full market value for her interest did not warrant the rescission of her conveyance, and the court below was right in so holding.
It remains to inquire how far the validity of the conveyance is affected by the relations of the parties. The evidence does not show any contractual or active fiduciary relation. The defendant Henry P. ITuddleson was the husband of the daughter of Thomas W. Hay, the trustee in the will, who was the great-uncle of plaintiff.
She wrote defendant, saying that, while she thought her interest worth $20,000, she would sell for $10,000. Defendant then wrote, saying that he would purchase at $10,000, provided the sisters would consent to the conveyance. The sisters preferring that defendant rather than a stranger would make the purchase, defendant submitted the terms of payment, which, with some changes, were accepted by plaintiff. "When the deed was sent to plaintiff to execute, the consent of the sisters was indorsed thereon. She executed, acknowledged, and returned it, and the consideration was paid. While, as we have said, there were not express fiduciary relations between the parties, there was such relation as that of confidence reposed by the plaintiff, and the probable amount of influence on the part of the defendant growing out of that confidence is of a nature that a court of equity would not permit an advantage to be taken and retained in a transaction which could not be impeached where no such confidential relations existed. Tate v. Williamson, L. R. 2 Ch. 55, 15 L. T. N. S. 549, 15 Week. Rep. 321. That case is a leading one on the subject of transactions between persons where relations of confidence exist, and has been cited with approval by us in several cases. Murray v. Hilton, 8 App. D. C. 281—285; Holtzman v. Linton, 27 App. D. C. 241-256. As was said in Murray v. Hilton, supra: “Where those relations are contractual and active, as in the case of trustee and beneficiary in a deed or will, of guardian and ward, and of attorney and client, and the like, the safest ruleis to declare void, on grounds of public policy and utility, all conveyances made by the cestui que trust, and so forth, upon his application therefor within a reasonable time, subject, of course, to the return of any actual benefits received. Where, however, the relations are not of this active and positive character, but are imputed, in equity, to certain special circumstances and conditions that may exist for a time between particular persons, or in a particular case, the rule cannot, with good rea-
Reference
- Full Case Name
- HAYES v. HUDDLESON
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- Syllabus
- Vendor and Purchaser; Deeds; Remainders; Rescission; Inadequacy of Consideration; Pleading; Amendment. 1. The English rule that a sale of a vested interest in property, whether in reversion or remainder, will be vacated for inadequacy of consideration alone, will not be followed in this jurisdiction. 2. Inadequacy of consideration, in the absence of fraud or imposition, is insufficient to warrant the rescission of a conveyance of her interest by the daughter of the devisee of a vested remainder which was subject to a life estate not yet ended, where by the terms of the will the daughter would have succeeded to the remainder upon the death of the parent before the remainder came into possession, and the parent had by deed conveyed to the daughter, subject to a life estate in herself. 3. There is nothing in the relations of the parties, which, coupled with inadequacy of consideration, will warrant the avoidance of a conveyance by a woman of mature age, familiar with the property, for the purpose of raising money in an emergency to protect her interests in other property, to one who bore her no express fiduciary relation, but whom she regarded as a friend and kinsman, accepting his advice and assistance generally in her transactions, where there is nothing to indicate fraud or undue influence, and a period of two years elapsed between the conveyance and the filing of the bill for rescission, and the plaintiff does not profess to have knowledge not possessed by her at the time of the transaction or obtainable immediately thereafter. (Citing Murray v. Hilton, 8 App. D. C. 281, and Hollmmam v. Linton, 27 App. D. C. 241.) On rehearing. 4. The plaintiff in a suit to rescind a conveyance upon the ground of inadequacy of consideration and fiduciary relations of the grantee, having had an opportunity in the lower court to amend by showing an agreement to reconvey in two years, cannot, upon rehearing after a decision on appeal adverse to her, be permitted to make the ! amendment,—especially where the contractual period of reconveyance has elapsed without demand therefor.