McCracken v. McBee

Wood, J. i. Cancellation of instruments is one of the well-recognized grounds of equity jurisdiction. It operates indirectly to establish or protect primary rights. It is often granted as ancillary and “preliminary to the final relief by which a party’s primary right, estate or interest is established and enforced.” It is a remedy which belongs exclusively to the equity jurisdiction, and is exercised in order to remove the obstacle which stands in the way of the enjoyment of one’s right, interest or estate. “The occasions giving rise to the jurisdiction are mistake, fraud and other instances where enforcing instruments or agreements would be inequitable or unjust. A doubt was formerly entertained as to whether a court of equity ought to exercise its jurisdiction to order instruments absolutely void at law, and not merely voidable, to be delivered up and cancelled, since the legal remedy of a party was adequate and complete, and no case was presented for equitable interference, but it is now well settled that jurisdiction will be exercised in such cases except where the invalidity of the instrument is apparent on its face.” Pomeroy, Eq. Jur., § § 170-2, 1377. But, while the chancery court had jurisdiction of the subject-matter of the cancellation of the deeds and bill of sale, it had no jurisdiction over the 'settlement of the guardian while that was still pending in the probate court. The bill of sale on its face was evidence of the settlement of appellant with appellee. But it was not the settlement itself. Unattacked for fraud or mistake, it would have to be taken as conclusive evidence of the settlement. Hence appellee could go into chancery to have the bill of sale cancelled. Such relief was only ancillary to the settlement itself, and, the bill of sale being out of the way, the question of settlement still remained in the probate court. The chancery court therefore did not err in refusing to entertain the question of accounting, leaving that matter for final determination by the probate court. This is not a complaint to surcharge and falsify a confirmed settlement in the probate court for fraud. As to the accounting, it is sought to take it out of the probate court before that court has finally disposed of it. That can not be done. Coppedge v. Weaver, 90 Ark. 444; Turner v. Rogers, 49 Ark. 51; Hankins v. Layne, 48 Ark. 544; Dyer v. Jacoway, 42 Ark. 186. 2. The next question is, did the court err in setting aside the bill of sale? Says Professor Bispham: “Cancelling an executed conveyance is the exertion of a most extraordinary power in courts of equity, and when asked for on any ground it will not be granted unless the ground for its exercise most clearly appears.” Bisp., Eq. Prin., § 475. The evidence to overcome the “written memorial must be clear, unequivocal and decisive.” Carnall v. Wilson, 14 Ark. 167; Rector v. Collins, 46 Ark. 167; McGuigan v. Gaines, 71 Ark. 614; Goerke v. Rodgers, 75 Ark. 72. Appellee alleges and contends that the mistake he made in signing the instruments was caused by the misrepresentation and concealments of appellant and his misplaced confidence in her. In other words, he charges appellant with actual fraud, and seeks relief solely on that ground. The evidence fails to convince us that appellee is the victim of misplaced confidence. He says he trusted the appellant as a boy would trust his mother, and hence signed the papers without reading them and without understanding them, and thought that he was only signing a deed to the land, as that was what appellant represented. In the light of all the other evidence, we are of the opinion that there was no misrepresentation and no concealment upon the part of appellant. Nor did appellee execute the instruments through any misapprehension caused by appellant, or because of any trust and confidence reposed in her. His own letters and the testimony of his own brother show that before the instrument was executed he had begun to distrust appellant, and that he was determined, when he made the settlement with her, “to get all that was coming to him.” He assured his brother of that fact, and there is no doubt from all the testimony in the record that when he made the settlement with appellant and when he executed the instrument evidencing such settlement he was dealing with her at arm’s length. Appellee was of age, had received excellent advantages of education, and the record does not disclose any evidence of mental imbecility on his part, but rather the opposite. The law is that “a settlement of a guardian with his ward shortly after the latter’s majority will be closely scrutinized. The burden of proving good faith rests upon the guardian. To sustain a private settlement, the guardian must show that he fully and clearly disclosed the condition of the ward’s estate at the time of the settlement, that he exercised no undue influence, and that the settlement is fair and equitable.” 21 'Cyc. 169. The conduct of appellant in dealing with appellee measures fully to the required standards. There is a general finding by the court that appellee executed the bill of sale to appellant “without understanding his rights and without full knowledge of the facts pertaining thereto.” The evidence does not warrant the finding that appellee signed the bill of sale without full knowledge of the facts pertaining thereto. The testimony of appellant is .certainly entitled to as much credit as that of the appellee. Appellant testifies (and her testimony is corroborated) that appellee did understand that the settlement was to be a full settlement, and that she explained everything thoroughly pertaining to the McBee estates. Appellee testified that he did not know, at the time he signed the bill of sale, that the life insurance was payable to him and his sisters, but the testimony of appellant shows that as early as 1903 he knew that the insurance was payable to him and his sisters, Myrtle and Maude, and his own testimony shows that after he was of age, and in February or March before he signed the bill of sale, he signed one of the insurance coupons which showed on its face that he was a beneficiary in the policy. lie testified that he did not know that the bill of sale included his interest in the life insurance policy, but again he is contradicted by appellant, who says that she told him that she “was going to insert it in the bill of sale,” and “what the personal property consisted of, which was notes, accounts, and money and Equitable life insurance policy.” The decided preponderance of the evidence is against him on the facts. The record, however, does disclose that both appellee and appellant were ignorant of the law giving to appellee the right, if he elected, to take his interest in the life insurance, notwithstanding the testator had disposed of it in his will and .had given most of it to appellant. Conceding that appellant as guardian should have known the law in this respect and should have imparted that knowledge to appellee, still it does not follow that the bill of sale should have been cancelled under the facts of this record. It clearly appears that in a settlement with appellant appellee would have to accept the provisions of the will as to the disposition of his insurance money, or else repudiate the will and reimburse appellant the amount she has lost by reason of such repudiation. The language of the will is unmistakable. The testator disposed of the insurance money of appellee, giving most of it to appellant and making other- provisions for appellee in the will. Its language is such as to require an election on the part of appellee. “The doctrine,” says this court in Fitzhugh v. Hubbard, 41 Ark. 68, “rests upon the principle that a person claiming under an instrument shall not interfere, by title paramount to prevent another part of the same instrument from having effect according to its construction. He can not accept and reject the same instrument. * * * If he chooses to disregard the will and retain his own property, he must make good-the value of the gift to the disappointed beneficiary.” See other authorities cited by appellant and McDonald v. Shaw, 92 Ark. 15. Now, under the will appellant received of the insurance money belonging to appellee the sum of $1,650. If appellee rejected the will, then he would have to reimburse appellant out of the other property which he received under the will. If appellee was ignorant of his rights when he executed the deeds and bill of sale, he was full panoplied with legal advice when he went into a court of chancery nearly three years after to have those instruments set aside. He was not ignorant then, yet he seeks the equitable remedy of cancellation without himself offering to do equity. He should be held to his election, either to accept the terms of the will or to reject them. He cannot hold on to the estate given him 'by the will, and take away from appellant the part of his estate that was given to her. He must renounce the will and take the property, making compensation to appellant out of the other property given to him by the will for the loss she has sustained by reason of his renunciation, or else he must content himself with the provisions made for him in the will. He can not take all of his property under the will and his insurance money, too. But this is precisely what he is trying to do. He does not offer in his complaint to restore to appellant, if she desires, the purchase money that he received from her for the lands and other property conveyed and transferred to her, for which she paid him the sum of $1,125 He did not offer, if the deeds and bill of sale were cancelled, to take back the land and to return the purchase money given in consideration for these conveyances. He did not propose, and the court did not require as a condition upon which the relief would be granted, that he put appellant, as far as possible, in staht quo. This was indispensible to any relief. Furthermore, if this had been required, and appellee had been held to his election under the will, still this record discovers no facts to warrant the court in granting him the extraordinary remedy of cancellation of full settlement he had made with appellant. For, if appellant be charged with all that she received of the estate of appellee under the will, and credited with all she paid out to and for him and reimbursed the life insurance money she would lose by his election, then she would owe him nothing. The testimony shows the interest of appellee in the land at the time the bill of sale was executed was worth not exceeding $500, and the interest he claimed in the Lucy McBee estate amounted to $140. This makes a total of $640 that appellant paid appellee for his interest in the land and in the McBee estates if the notes, accounts, and insurance money were not to be included in the settlement, as appellee contends. But appellant actually paid the sum of $1,125, or the sum. of $485 in excess of the', value of -appellee’s alleged interest in the Lucy McBee estate and his interest in the unsold land of his father’s estate. This court may consider what would be the result of a settlement under the facts of this record- in order to determine whether there is any equity in appellee’s complaint. The result of such a settlement, stating the account according to the undisputed facts, would be about as follows: Winnifred McCracken, Guardian, in account with Victor B. R. McBee, her ward: Dr. To amount of estate not including life insurance.....$1,428.21 To value of land and interest in Lucy McBee estate... 640,00 To life insurance money'.......................... 2,000.00 Total ...... $4,068.21 Cr. By amount -conceded by appellee ..................$1,600.00 By life insurance money to be returned to her........ 1,650.00 By amount paid for land and interest in McBee estate.. 640.00 By amount of difference as consideration paid for settlement ................................... 485.00 Total .......................................$4,375.00 making a difference in appellant’s favor of $306.79. In no event, therefore, could appellee be benefited by a settlement, and the court erred in cancelling the evidence of such settlement. Reversed and dismissed for want of equity.