Barrell v. Hanrick

JUDGE, J. Charles Barrell, by his will, after expressing a desire that all his just debts should be paid, bequeathed to Edward Hanrick, in absolute right, “ the rest and remainder” of his estate, “both real, personal, and mixed, of whatever kind.” He subsequently, by a codicil to his will, gave to Miss Olivia Benson, and to Miss Louisa Benson, five hundred dollars each. George Barrell, a resident of the State of New Jersey, and brother of the testator, filed the bill in the present case, for the purpose of having established a secret parol trust, created for his benefit in connection with the bequest to Hanrick. It is alleged in the bill, that the will was executed “ during the pending of war between the United States ahd the late Confederate States; that under the laws of the late Confederate States, a citizen of the State of New Jersey was regarded as an alien enemy, and any property to which he might have acquired a title during said war, in any State of the late Confederate States, would, under the laws of the said Confederate States, have been subject to sequestration; that for the purpose [71] of securing his property to the said George Barrell, after the death of the testator, and placing it in such a condition as would prevent it from being sequestrated, it was agreed and understood between the testator and the said Edward Hanrick, that the will should be executed as aforesaid, and that said Hanrick should hold the property bequeathed to him, for the use and benefit of the said George Barrell; and should, at a proper time, convey the same to the said George Barrell, or otherwise dispose of the same for his use and benefit.” It is further alleged, “ that in accordance with said agreement, and relying upon the performance of said trust, the will was executed.” The evidence very satisfactorily establishes the agreement between the parties, as above set forth; and from their long acquaintance, and the strong friendship that existed between them, the character and business capacity of each, and the great confidence of the testator in Hanrick, and the peculiar control and influence of the latter over the former as to all business transactions, we think it a fair inference that the bequest to Hanrick, and the parol stipulation in relation thereto, had birth as the result of Hanrick’s suggestions and advice. This being established the next question which presents itself is this: Gan the trust be established, and its performance be enforced, in view of section 1320 of the Code, which declares that, “ No trust concerning lands, except such as results by implication, or construction of law, or which may be transferred or extinguished, by operation of law, can be created, unless by instrument in writing, signed by the party creating, or declaring the same, or his agent or attorney, lawfully authorized thereunto in writings.” This section of our Code is a substantial re-enactment of a section of the English statute of 29 Oh. 2, commonly called the statute of frauds, which, it is believed, has also been adopted, in substance, by most of the States of the Union; and under the operation of this statute, it has been well settled, in both England and America, that, in avoidance of a fraud, a parol trust may be engrafted upon an instrument, which purports to be absolute on its face, notwithstanding the prohibition of the statute — and this [72] upon the ground that the statute being intended to prevent fraud, its original design would be thwarted, if it could be used as a cover under which fraud could be successfully perpetrated. Such has long been the established doctrine of this court. — See Kennedy v. Kennedy, 2 Ala. 571, in which the principal authorities are collated, and the question is elaborately discussed, in a thorough and very able opinion by Collier, C. J. See also, Tiffany & Bullard on Trustees, t. pp. 189, 195; 1 Story’s Equity Jurisprudence, sec. 184 and notes, on pages 186, 187. But conceding the proposition as above announced to be correct, still it is contended that to constitute fraud, and suspend the operation of the statute, there must be deceit, or misrepresentation, or evidence that the subsequent failure to fulfil the engagement, was the result of an original fraudulent design. It is admitted that there are high authorities which hold such to be the correct doctrine, on the ground that “ those who choose to rely upon an oral assurance, in cases where the legislature has required a writing, must trust to the honor of those with whom they deal, and cannot look to the law for indemnity for the breach of an agreement which it has solemnly deprived of all legal value.” — (2 L. C. in Eq. 708.) But the contrary doctrine is also well sustained by authority, and we are precluded from considering the question an open one, by the previous decisions 'of this court. In this State, while it is well settled that the fraud which avoids a specialty at law, must relate to the execution of the instrument, it is equally as well settled that the jurisdiction of chancery is much more extensive ; and that “ fraud, as denounced in equity, includes all acts, omissions, or concealments which involve a breach of a legal or equitable duty, trust, or confidence, justly reposed, which are injurious to another, or by which an undue, or unconscientious advantage is taken of another.” (Kennedy v. Kennedy, supra.) Hence, Dargan, J., in Bishops Heirs v. Bishop’s Adm’r, 13 Ala. 483, says : “The ground upon which courts of equity undertake to establish trusts of this character, is that of preventing the fraudulent use of a deed ; for although there is no fraud in the execution of the deed, if it be afterwards converted to a [73] fraudulent purpose, or to one wholly different from the one intended by both parties at the time of its execution, equity ought to interpose, and .prevent such an improper use of it, and establish the trusts for which it was executed. — See 6 Paige’s R. 147 ; 1 Dallas Rep. 424.” There is no reason' to believe that Hanrick practiced any fraud or deceit in procuring the bequest to him in the will of Charles Barrell; on the contrary, there ■is every reason to believe, that at the time of the execution of the will, Hanrick intended, honestly and fairly, to execute the trust in question; and, doubtless, his death alone prevented it. But having died without complying with his agreement, e'quity and good conscience forbid that the property should go to Hanrick’s heirs ; and the failure of Hanrick to execute the trust, from whatever cause, is a constructive fraud, against which relief should be decreed. — Lessee of Thompson, et ux, v. White, 1 Dallas, 424; see also, Kennedy v. Kennedy, supra ; Tiffany & Bullard on Trustees, t. pp. 189, 195 ; 1 Story’s Eq. Jur., sec. 184, and notes on pp. 186, 187. It is contended, however, that the bill cannot be entertained, as it sets out on its face that the agreement from which springs the trust, was made with a view to evade the confiscation acts of the government of the Confederate States; and that therefore the appellant does not come into equity with clean hands. This precise question was made in Blossom v. Van Amringe, and decided by the supreme court of North Carolina, at the January term, 1867. — (1 Phil. Cases in Equity, 133.) The court held that the objection would have been fatal, if taken before a court of the de facto State government, which formed a part of the 'Confederate States; but that the supreme court of North Carolina was a co-ordinate branch of a rightful State government forming a part of the United States, and could not entertain such an objection. We concur in this conclusion, which is decisive of the same point in the present case, and is not in conflict with the previous decisions of this court, relative to the enforcement of executory contracts based on the treas [74] ury notes of the late Confederate States, after they had become the currency of the country. "We deem it unnecessary to elaborate this proposition, as the reasons for the distinction indicated will readily present themselves. The cross assignments of error, makes, under a rule of this court, two causes between the same parties. In the case of George Barrell, appellant, the decree of the chancellor dismissing the bill, so far as it seeks to establish the trust as to the realty, must be reversed. In the case of Edward Hanriek, administrator, et al., appellants, so much of the decree as declares and establishes the trust as to the personalty, must be affirmed; and George Barrell must' recover his costs in this count, as appellant in the one case, and as appellee in the other. The court below will render a decree declaring and establishing the trust, as to both the realty and personalty remaining after the payment of the debts of the estate, and the specific legacies; and the principal cause must be remanded for further proceedings in conformity with this opinion.