Lloyd v. Brooks

Grasos, J., delivered the opinion of the Court. The bill in this case was filed to enforce an alleged voluntary executed trust in favor of the appellant, and to compel John T. Morris, the alleged trustee, to restore the trust property, or to pay the value thereof in default of such restoration. Was there in this case a valid executed trust which a Court of Equity can enforce? Lewiií, in his treatise on Trusts, page 81, marg., lays down the rule that “a trust is not perfectly created where there is a mere intention, or voluntary agreement to establish a trust, the settlor himself contemplating some further act for the purpose of giving it completion.” This principle is too clear and well established to be seriously controverted. See Bayley vs. Boulcott, 4 Russ., 345; Lister vs. Hodgson, Law Rep., 4 Eg. Ca., 33, 34; Gardner, and others, vs. Merritt, 32 Md., 78. The proof in this case shows that the appellees intended to create a “trust [34] at one time in favor of the appellant, and others, and that John T. Morris was applied to, and consented to act as trustee, and that two hundred and seventy shares of Baltimore and Ohio Railroad Stock were transferred to him as trustee; but the fact is proved beyond question that it was well understood by the appellees and Morris, that the trust was to be declared by deed, which Morris, as the attorney of the appellees, was instructed to prepare and did prepare and send on to them for execution. That deed was never executed by more than one of the appellees and was never delivered, but was destroyed. In the cases of Bayley vs. Boulcott, and Lister vs. Hodgson, as in the case now before us, the party, who was charged with having created the trust, intended to create it by deed, and it was held in both cases that no trust had been created, because in the one case the deed was never executed, and in the other, because the deed, which was executed, did not declare the_ trust. It was contended by the counsel of the appellant that the letters of Peter C. Brooks to Morris constituted a sufficient declaration of trust. The simple and conclusive answer to this is, that they were never intended to be a declaration of trust, but were nothing more than instructions to the attorney for preparing the deed of trust, thereafter to be executed, by which the trust was to have been created. In the case of Jones vs. Lock, Law Rep., 1 Chan. Appeals, 28, Lord Chancellor Cranworth says: “the question in each case is one of fact; has there been a gift or not, or has there been a declaration of trust or not?” In determining this, the acts of the party, as well as his intention in doing those acts, must be considered and regarded by the Court. The appellees in this case, so far from intending the correspondence with Morris as a declaration of trust, would, no doubt, be greatly surprised to be now told that their instructions for the preparation of the deed of trust, had effected what they intended to accomplish by the deed, and divested them of their property and vested it in Morris for the benefit of the appellant. [35] (Decided 10th February, 1871.) If Morris held the stock as the agent and attorney of the appellees, it was his duty as such to transfer the stock to them upon their order to do so. If he held it as trustee, no trust having been declared, a trust resulted in their favor by operation of law and he was therefore justified in transferring it to them when directed by them to do so. The decree of the Court below must be affirmed. Decree affirmed.