A court of equity will not aid a party whose application is
destitute of conscience, good faith, and reasonable diligence, but
will discourage stale demands for the peace of society by refusing
to interfere where there has been gross laches in prosecuting
rights or where long acquiescence in the assertion of adverse
rights has occurred, and in these respects each case must be
governed by its own circumstances.
A purchase by a trustee of trust property for his own benefit is
not absolutely void, but voidable, and it may be confirmed by the
parties interested, either directly, or by long acquiescence, or by
the absence of an election to avoid the conveyance within a
reasonable time after the facts come to the knowledge of the
cestui que trust.
Two partners owned real estate in common, some of which was used
in the partnership business. One died, making the other by his will
a trustee for the testator's children, with power of sale of all
the real estate, and directing that the business be carried on.
After carrying on the business for some time, the trustee sold the
real estate by auction and bought portions of it in through a third
person, and accounted for the half of the net proceeds. This
transaction was open, and was known to all the
cestuis que
trustent, and was objected to by none of them.
Held
that there was nothing in all this to indicate fraud.
Page 143 U. S. 225
In all cases where actual fraud is not made out, but the
imputation rests upon conjecture, where the seal of death has
closed the lips of those whose character is involved, and lapse of
time has impaired the recollection of transactions and obscured
their details, the welfare of society demands the rigid enforcement
of the rule of diligence.
The Court stated the case as follows:
This was a bill filed in the Supreme Court of the District of
Columbia April 8, 1884, by William B. Hopkins, Anna B. Hopkins, by
her next friend, William B. Hopkins, Sarah E. Hopkins, by her next
friend, Elizabeth A. Early, Elizabeth A. Early, Mary V. Wailes,
Alice C. Hall, and Ida M. Stone, against Bertha Hopkins, Bertha
Hopkins, administratrix of John S. Hopkins, Esther E. Hopkins,
Elizabeth B. Luttrell, Ira W. Hopkins, Mary E. Hopkins, Bettie
Davenport, Samuel C. Raub, trustee for Bettie Davenport, Samuel C.
Raub, executor of George N. Hopkins, L. Freddie Hopkins,
administratrix, Thomas J. Luttrell, administrator of George W.
Hopkins, and Thomas J. Luttrell, executor of Cornelius Hopkins,
alleging that prior to and on the 23d day of November in the year
1858, John Hopkins and George W. Hopkins were seised and possessed
in fee simple each of an undivided moiety, as tenants in common, of
squares numbered 94, 95, 96, 110, 111, in the City of Washington,
as laid down on the public plats of the city, and that John
Hopkins, on that day, executed his last will and testament, a copy
of which was annexed. That John Hopkins died November 27, 1858,
leaving his children and heirs at law, Isaac H. Hopkins, Elizabeth
A. Early, born Hopkins, George Washington Hopkins, William M. S.
Hopkins, Emeline V. Lilburn, born Hopkins, Mary V. Wailes, born
Hopkins, Alice C. Hall, born Hopkins, John S. Hopkins, and Levin
Hopkins. That Isaac H. and Levin Hopkins have since died intestate
and without issue. That George Washington Hopkins died in the month
of July, 1870, leaving as his only children and heirs at law,
William B. Hopkins, then eleven years of age, and Anna B. Hopkins,
then two years of age. That the said Emeline V. Lilburn
conveyed
Page 143 U. S. 226
on April 7, 1884, all her right and title, absolutely and
unconditionally, in said estate to her daughter Ida M. Stone, and
that John S. Hopkins died May 7, 1883, leaving as his only child
and heir at law the defendant Bertha Hopkins.
That the said George W. and John S. Hopkins accepted the said
trust, entered into possession of said premises, carried on the
business of brickmaking for several years, collected the rents and
profits of said estate, and, as is charged upon information and
belief, sold at various times prior to May 1, 1864, portions of
said property for which they received certain moneys, the
particulars of which complainants propose to prove before the
auditor.
It was then charged that it had lately come to the knowledge of
the plaintiffs that "at this period" the trustees meditated a
fraudulent scheme to obtain the entire estate in their own right,
"freed and discharged of the trusts under which they held it," and
that, "in pursuance of this scheme of fraud," John S. Hopkins
persuaded his brother William M. S. to convey to him his share in
his father's estate, William being of dissipated habits, and
mentally enfeebled by alcoholic excesses, by deed dated June 20,
1860, and recorded July 7, 1860, and under his command and
direction to sign the name of his wife, Sarah E. Hopkins, thereto,
and by means of fraud obtained the certificate of acknowledgment to
said deed of two justices of the peace. Ignorance of these facts
was averred, the circumstances of their discovery to be thereafter
stated at length.
It was further stated that William M. S. Hopkins, on January 28,
1864, conveyed all his right, title, and interest in his father's
estate to one Christopher Ingle, in trust for the benefit of his
wife, Sarah E. Hopkins, which fact had lately come to the knowledge
of the complainants under circumstances that would thereinafter be
set forth at length.
The bill then alleged that in pursuance of the fraudulent scheme
before mentioned, the trustees advertised the property for sale at
public auction on May 10, 1864, a copy of which advertisement was
annexed. That they fraudulently procured James Chapman to attend
the sale, and bid on their behalf as individuals, and that Chapman
became the purchaser for them
Page 143 U. S. 227
of squares 95, 96, and 111; of lot 1, square 94, and lots 16,
17, 18, 19, 20, 21, 22, 38, and 39, in square 110, and that on May
20, 1864, George W. and John S. Hopkins conveyed the property to
Chapman for the consideration of one dollar, and Chapman
reconveyed, under the same date, square 111, to George W. Hopkins,
as an individual, for the alleged consideration of $9,093.42, and
the other property to George W. and John S. Hopkins, as
individuals, for the alleged consideration of $10,842.24, all the
conveyances being recorded November 16, 1864. Plaintiffs averred
that the purchases by Chapman were for the benefit of the trustees
as individuals, without the knowledge or consent of the
plaintiffs.
It was further charged that
"the said trustees, in furtherance of their said fraudulent
scheme to possess themselves individually of the said trust estate
and brick business and in order to give a semblance of right to
their said fraudulent conduct, did, after a lapse of nearly seven
years from the death of their testator, file in the orphans' court
of said district 'a first and final account' of what purported to
be an 'account of the personal estate of John Hopkins, deceased, by
George W. and John S. Hopkins, executors,' alleged to consist of
the personal estate of said decedent, of the profits made out of
the brick business, and the value of the deceased's interest in the
firm of John and George W. Hopkins, showing that there was for
distribution the sum of $22,131.46, and these plaintiffs have
caused diligent search to be made among the records of said
orphans' court for the vouchers and papers on which said account
was based, but have not been able to find the same, so as to
discover in what manner the item of $14,952.66 -- the proceeds of
sale of the half interest -- was made up, a certified copy of which
account is herewith filed and prayed to be read as a part of this
bill, and the said trustees, without explaining the nature of their
trust or their fraudulent conduct in regard to said sales, and
without actual notice to or any personal knowledge of any of these
plaintiffs, did obtain an order of said court directing a
distribution of the sum of $2,667.60 to each of the children then
living of said John Hopkins as heirs at law."
The payment of the distributive shares under the order
Page 143 U. S. 228
(except that allotted to William M. S. Hopkins) was admitted,
but the jurisdiction of the court denied, and ignorance of the
alleged fraud set up in excuse of any estoppel arising from the
acceptance of and receipts for their shares.
Certain sales to
bona fide purchasers prior to November
16, 1864, and prior to December 22, 1875, were referred to, and the
receipts of moneys therefor. It was then alleged
"that the said trustee, George W. Hopkins, trustee as aforesaid,
died intestate on the 22d December, 1875, leaving as his only
children and heirs at law George N. Hopkins; said defendants,
Elizabeth B. Luttrell, born Hopkins; Ira W. Hopkins; Mary E.
Hopkins, and Cornelius Hopkins. That letters of administration on
his estate were granted to said defendants L. Freddie Hopkins and
Thomas J. Luttrell. That said George N. Hopkins has since died on
November 18, 1881, having first devised, by way of executory
devise, all his real estate to said defendant Samuel C. Raub, as
trustee for said defendant Bettie Davenport, her heirs and assigns.
That the contingency on which said devise was limited has happened,
and the equitable estate in fee simple is vested in her, as all of
which will more fully appear by reference to said will, hereto
annexed, and prayed to be read as part of this bill. That letters
of administration on said George N. Hopkins' estate were granted to
said defendant Samuel C. Raub. That said Cornelius Hopkins has
since died on July 17, 1883, having devised his entire estate as
follows: one-half to said defendant Mary E. Hopkins, one-quarter to
said defendant Elizabeth B. Luttrell, and one-quarter to said
defendant Ira W. Hopkins. That to said Thomas J. Luttrell letters
testamentary have been granted as executor of said Cornelius
Hopkins."
Partition proceedings between John S. Hopkins and the heirs of
George W. Hopkins, and between the heirs of George W. Hopkins, were
then set up, and the sale by John S. Hopkins of lots allotted to
him to
bona fide purchasers, as also by the heirs of
George W. Hopkins. It was further averred that John S. Hopkins died
May 7, 1883, leaving, him surviving, his widow, Esther E. Hopkins,
and Bertha Hopkins, his only child and heir at law, and that
letters of administration
Page 143 U. S. 229
on his estate had been granted to Bertha Hopkins as sole
administratrix.
The bill then stated:
"That these plaintiffs do severally aver that they have within
the last past few weeks discovered for the first time the following
circumstances in the manner herein set out, namely, that when the
said John S. Hopkins, trustee, induced his brother and
cestui
que trust, William M. S. Hopkins, to convey to him his estate,
as alleged in paragraph eight, the said John S. Hopkins charged the
said William that he should not tell his wife, the said plaintiff
Sarah E. Hopkins, of his having made such deed, and threatened him
that if he did, his said wife would leave him and return to
Baltimore, to her father. That numberless times from that time to
the date of his death, the said John S. Hopkins inquired of the
said William if he ever informed his wife of the conveyance to him,
and on every occasion urged him not to do so. That the said
William, being always poor and frequently in positive want for the
absolute necessities of life, was constantly importuning the said
John S. Hopkins for his share of the estate, and waiting for a
division, when the said John S. Hopkins did pay to the said William
at various times, in all, about nine hundred dollars, and put him
off by alleging that he was waiting for the property to rise in
value, and when he sold that, the said William would get his share.
At other times when the said William would threaten to sue the said
John S. Hopkins, the latter would bluff him off by such statements
that, if he did sue, he would not get a cent, but that he would
give it to his wife, who had separated from said William, and that
so it was, by intimidations, threats, and promises, the said
William was always waiting to the hour of the death of the said
John S. Hopkins in the hope that he would get his share of the
estate. That when the said John S. Hopkins died unexpectedly on May
7, 1883, and had made no provision for the said William, the said
William began to seek the advice of counsel as to what were his
rights, and, after having consulted several without effect at a
considerable waste of time, finally placed his case, about the
first of February last past, in the
Page 143 U. S. 230
hands of Samuel L. Phillips, attorney at law. That the said
attorney undertook the investigation of the case, and discovered
for the first time from living disinterested witnesses that the
said James Chapman had never paid one dollar of consideration for
said land, but had bought the same for and on account of said
trustees, and that the sale was fraudulent and void. That the said
attorney discovered that the said William had conveyed his interest
to said Ingle, in trust for said plaintiff Sarah E. Hopkins, his
wife, and if any recovery was to be had, the said Sarah E. Hopkins
should be informed of her rights. The said attorney thereupon wrote
a letter to said Sarah E. Hopkins, residing in Baltimore, Maryland,
and who, in a day or two after its receipt, came to Washington,
called on said attorney, and, this plaintiff Sarah E. Hopkins
avers, was told for the first time in her life on the 5th of
February, 1884, either of the conveyance by said William to said
John S. Hopkins or the conveyance of William to said Ingle in trust
for her benefit, or of the fraudulent practices of said trustees as
hereinbefore set forth as to the purchase of said land, and the
said Sarah E. Hopkins had thereupon authorized said attorney to
bring suit to enforce her rights. That in order to secure further
information, if any existed, the said attorney instructed the said
William to call on his sisters, and make an "
brk:
appointment with them to see him, said attorney, which the said
William did do during the month of February of March, 1884, and at
which interview the said William informed these plaintiffs
Elizabeth A. Early, Mary V. Wailes, and Alice C. Hall of the
discovery of witnesses who would testify that the said sales from
said trustees to said Chapman, and said Chapman to said George W.
Hopkins and John S. Hopkins jointly, and to said George W. Hopkins
individually, were without consideration, fraudulent, and void, as
hereinafter set forth, and these plaintiffs aver that this was the
first time in their lives that they, or either of them, had ever
been informed or in any manner known of said fraudulent sales, or
had any reason to suspect that the same were not true and
bona
fide. That the said attorney called March 27th last past on
these plaintiffs Elizabeth A. Early, Mary V. Wailes, and Alice C.
Hall, and
Page 143 U. S. 231
said Emeline V. Lilburn, and they severally aver that they were
informed by said attorney for the first time of the particulars of
the fraudulent practices of said trustees in buying at their own
sales through said Chapman, as hereinbefore set forth, but, on the
contrary, aver that by the assurance of said trustees that the same
were
bona fide, by the suppression of the truth these many
years, by the fact that they were always informed that the said
trustees had plenary power under said will of their father, by the
great confidence they had in the integrity of their said uncle, by
their incapacity as females, entirely unused to business, these
plaintiffs Elizabeth A. Early, Mary V. Wailes, Alice C. Hall, and
their sister, Emeline V. Lilburn, have uncomplainingly submitted to
what they have often deplored as their ill fortune, while another
member of the family, their own brother, and his daughter, claiming
through the same ancestors, were in possession of estates worth
over two hundred thousand dollars. That these plaintiffs thereupon
immediately resolved to enforce such rights as they were entitled
to, and authorized said attorney to take the necessary legal
proceedings. That this plaintiff William B. Hopkins was a child
only five years of age when said fraudulent sale was made, and said
plaintiff Anna B. Hopkins was not born for nearly five years
afterwards, and that this plaintiff William B. Hopkins, on the 31st
day of March last past, was for the first time in his life informed
of the facts hereinbefore recited as to said fraudulent conveyances
by said trustees and Chapman. The said Anna B. Hopkins is still an
infant, fifteen years of age. That Emeline V. Liburn, the grantor
of this plaintiff Ida M. Stone, was present on March 27th last past
at the interview of said attorney with her said sisters, and heard
for the first time in her life that the said sales from said
trustees to said Chapman, and back to said George W. Hopkins and
John S. Hopkins and George W. Hopkins individually, were fraudulent
and void for the causes herein set forth, and the said plaintiff
Ida M. Stone does aver that down to said 27th day of March the said
Emeline V. Lilburn knew nothing of said fraudulent practices of
said trustees, or either of them, but, on the contrary, discovered
the same in the manner hereinbefore set forth,
Page 143 U. S. 232
and the said plaintiff Ida M. Stone does aver that she was
ignorant of the same down to April 7, 1884, the date of the
conveyance to her, said plaintiff, by her mother, said Emeline V.
Lilburn.
"Whereby, if these plaintiffs shall prove these facts to the
satisfaction of your honorable court, they allege that they have
been guilty of no negligence in the prosecution of their rights,
and are entitled to relief."
"That these plaintiffs have been informed, and so aver, that
there is yet unsold a large portion of said estate, and in the
possession of said defendants, namely, sublets four and six, in
square 95; subdivision lots 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14,
15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 39, and 40,
in square 96; subdivision lots 14 and 15, in square 94, and that
the same are worth two hundred thousand dollars, and that the
distributive share of each of these plaintiffs will amount to
twenty thousand dollars."
Complainants thereupon prayed that the deeds
"from said trustees to said Chapman, and from said Chapman to
said George W. Hopkins and John S. Hopkins jointly, and to said
George W. Hopkins individually, may be declared void and cancelled,
and that the said estate is held by the defendants, as heirs at law
of said George W. Hopkins, on the original trusts mentioned in said
will of John Hopkins, deceased. That the said estate may be divided
as it was the duty of said trustees to have done. That an account
may be stated of the sums received, with interest, on all sales
made by said trustees or either of them, or by any of the
defendants, and also of what these plaintiffs, or either of them,
received, with interest, on said pretended division, and that these
plaintiffs may be allowed, according to their respective interests,
their shares of such sales, and that such sums found to be due to
each of these plaintiffs may be declared to be a lien on the said
real estate respectively held by them, the defendants,"
and for judgment and execution, injunction, a receiver, and
general relief. Answers under oath were expressly waived.
Among the exhibits attached was a copy of the will of John
Hopkins, as follows, omitting some formal and immaterial
portions:
Page 143 U. S. 233
"I give and bequeath my little slave boy, Frank, to my daughter
Victoria Hopkins, as her sole and absolute property."
"I give and bequeath my servant woman, Leah, aged about
twenty-seven years, and her youngest child, Robert, and any
increase of said slave woman, to my daughter Alice, as her sole and
absolute property."
"I give and bequeath my slave woman, Hannah, and any increase
she may have, to my daughter Elizabeth A. Early, as her absolute
property, on the condition, however, that the sum of four hundred
dollars shall be deducted from my said daughter's share in the
final distribution, as hereafter provided."
"I give and bequeath all the rest and residue of my property of
every description, real, personal, and mixed, situate and being in
the District of Columbia or elsewhere, to my brother George W.
Hopkins and my son John S. Hopkins, and the survivor of them, and
the heirs, executors, administrators, and assigns of such survivor,
in trust, nevertheless, and to and for the uses and upon the trusts
following, and none other, that is to say:"
"To carry on the brickmaking business, as now conducted by may
said brother George W. Hopkins and myself in Washington City, D.C.
Said business to be under the direction of my said brother George
W. Hopkins, assisted by my said son John S. Hopkins as clerk, for
which he is to receive a regular stated salary."
"To receive the rents, profits, issues, and income of said
estate and of said business, or my portion thereof, and to apply
the same first and immediately, without waiting for the year
allowed by law to expire, to the payment of my funeral expenses,
and all my just debts, which are few; next, to a reasonable and
proper pay or salary to my said son John S. Hopkins, as clerk in
said business at the kiln, said pay to be sufficient for the
reasonable and proper maintenance of my said son and his family,
and then to the proper and reasonable expenses and support of my
family (including my said daughter Elizabeth A. Early and her
daughter) as it now exists, and the education of the younger
members thereof. And the surplus of such rents, issues, profits,
and income, if any, shall be,
Page 143 U. S. 234
from time to time, after the payments from time to time as
above, invested by my said trustees as hereafter stated, or may,
from time to time, in such sum or sums advanced by my executors and
trustees as they may in their discretion deem fit, to such of my
children as my said trustees and executors may think really need
and deserve it, such sums so advanced to be, without interest,
deducted from the share or shares of the child or children
receiving the said advances in the final distribution of my estate
as hereafter provided. And upon further trust that my said trustees
shall, where in their judgment a sale of the real property owned by
me and my said brother George W. Hopkins, or any part thereof, or
of the brick kilns and the materials or implements thereunto
belonging, or of said business, is essential or necessary for any
cause whatever, or would be advantageous, sell and dispose of at
public or private sale at such time or times, after such notice,
and upon such terms as they may deem most for the interest of my
estate, and by proper conveyances convey the same to the
purchasers, who, having paid his or her purchase money to my said
executors, shall be under no obligation to see to the application
thereof under the trust of this, my will, nor answerable for the
misapplication of the same. And upon further trust that the
proceeds of any such sales, as well as the surplus proceeds or
incomes, as hereinbefore stated, if any there be, shall be by my
said trustees rein vested in such safe and profitable securities as
to my said trustees shall seem best, whether the same be in real
estate, mortgages, deeds of trust, or stocks, subject, however, to
the privilege of advances as already given and stated, of which the
said trustees are alone to judge. And upon further trust that upon
the arrival of my daughter Alice to the age of eighteen years,
which will occur on or about the first day of May, eighteen hundred
and sixty-four, my estate of every kind shall be divided by my said
trustees and executors among my children, deducting from the share
of each child in such division the amount of such advances so as
aforesaid made to him or her, and deducting from the share of my
said daughter Elizabeth A. Early the sum of four hundred dollars
for the slaves aforesaid bequeathed
Page 143 U. S. 235
to her, provided, however, that no deduction is to be made in
such final division from the shares of those children now at home
and remaining there as of my family, nor from the share of my said
daughter Elizabeth A. Early for the board and maintenance of her
said daughter Mary, for any amount advanced for the support of the
family for the education of Alice. And in further trust that my
daughter Alice's portion in such division shall be held and taken
by my said trustees in trust for her until her arrival at the age
of twenty-one years, or her marriage, and the interest of her share
until the happening of either event shall be paid toward her
support and comfort, and upon her arrival at the age of twenty-one
years, or her marriage, her portion shall be paid or delivered at
once to her in such manner as my said trustees shall think most for
her interest; and, in case of her death before marriage or becoming
of the age of twenty-one years, her said share be divided equally
among the rest of my children."
"And upon further trust that the respective shares of my sons
Isaac and Levin shall also be taken and held by my said trustees in
trust for said sons Isaac and Levin, or be paid over to them by
installments, or in whole, or retained, and the interest paid them,
as in the judgment of my said trustees may seem best and most for
the interest of my said sons Isaac and Levin."
"I wish and direct that in the division of my estate as
aforesaid such of my slaves as have not been hereinbefore
bequeathed shall be appraised by agreement among my children, by my
said trustee, or by disinterested persons elected by said trustee,
and that my children shall each select for herself or himself the
slave or slaves they may each desire, or, if that cannot be done,
that the distribution of such slaves among my children be by lot,
and that the amount of the appraisement of such slaves so selected
or drawn shall be so much of the share of the child so selecting or
drawing. I wish and direct that my slaves shall not be sold out of
the family before such final division of my estate, nor after such
division, by the children to whom they may be respectively allotted
in such division, unless for grossly improper conduct or
insubordination. I
Page 143 U. S. 236
greatly desire, as already stated, that my family shall remain
as it now is, without change or modification or sale or valuation
of the furniture or slaves until the said division of my estate,
and that it shall until then be supported by the brick kiln
business as though I were living, and as I believe the squares and
lots of ground owned by my brother George and myself is now and
will continue to increase in value, I desire, if possible, that
said land may be kept unsold and undivided until as above stated,
as it will thus be greatly to the advantage of my family; but, as
circumstances now unforeseen may make a change necessary or
desirable, I cheerfully trust in the prudence and discretion of my
said trustees, and I give them full power, as above, to exercise
their judgment as circumstances may arise making it proper to
dispose of said land and business, or to change and alter the same,
believing that they will have the comfort and welfare of my family
and their relatives much at heart."
"Lastly, I hereby nominate and appoint my said brother George W.
Hopkins and my said son John S. Hopkins executors of this, my last
will and testament, hereby revoking and annulling all other wills
heretofore made."
Also the advertisement of the sale of May 10, 1864:
"
By Jas. C. McGuire & Co., Auctioneers"
"
Executors' Sale of Valuable Brick-Yard and
Appurtenances"
"The whole square No. 111, with fine brick residence and
outbuildings, large number of lots, some of them improved with
frame dwelling houses, together with the machinery, material, and
implements for the manufacture of bricks. On Tuesday afternoon, May
10th at 3 o'clock, on the premises, we shall sell the whole of
squares Nos. 95 and 96, in the northern part of the First Ward, on
Twentieth Street West, known as 'Hopkins' Brick-Yard,' which is
believed to be one of the best located in the District, having both
Georgetown and Washington for a market, an abundance of fine clay,
brick, and tempering sheds, kilns, offices, and all necessary
outfit for a first class brickyard. The yard will be worked until
the day of sale. "
Page 143 U. S. 237
"Immediately after, we will sell the stock of horses, mules,
carts, wheelbarrows, buggy, moulds, sieves, sand &c. &c.;
also the whole of square No. 111, formerly the residence of Colonel
Eaton, fronting, respectively, on Connecticut Avenue, 20th Street
North, Q and R streets, and 19th Street West, improved by a large,
brick dwelling house and back buildings, carriage houses, stabling
&c. &c., the whole enclosed and beautified with fruit and
ornamental trees and shrubbery."
"
Also --"
"Lots Nos. 8, 9, 10, 15, 16, 17, 18, 19, 20, 21, and 24, in
subdivision of square No. 110, fronting each on 20th street,
between R and T Streets."
"Lots 36, 37, 38, 39, 42, 43, 44, and 45, in same square,
fronting on 19th Street west, between R and T Streets. Four of the
latter are improved each with a small frame dwelling house, and
will be sold separately."
"
Also --"
"The whole of square No. 94, fronting, respectively, on
Massachusetts Avenue, 20th and 21st Streets west and north, Q
Street, with the improvements, consisting of one large frame stable
and sheds, two small frame houses, and an office."
"Terms of sale: one-third cash; the remainder in 6, 12, and 18
months, with interest, secured by a deed of trust on the premises.
All conveyancing, including revenue stamps at the cost of the
purchaser."
"A cash payment on each piece of real estate will be required at
the time of sale."
"GEO. W. HOPKINS,"
"JOHN S. HOPKINS,
Executors"
"(Chron. & Star.) JAS. MCGUIRE & Co.,
Auct's"
A copy of the "first and final account of George W. and John S.
Hopkins, executors of John Hopkins, deceased, the requisite legal
notice having been given" was also annexed, and other exhibits.
Defendant Davenport answered setting up, among other things, the
death of the child referred to in the will of George N. Hopkins and
the conveyance of the real estate therein
Page 143 U. S. 238
named to her by defendant Samuel C. Raub, as to whom the bill
was taken as confessed.
The answers of defendants Bertha Hammond, Esther E. Hopkins,
Elizabeth B. Luttrell, Ira W. Hopkins, Mary E. Hopkins, and Thomas
J. Luttrell were duly filed, denying specifically the different
allegations of fraud. They admitted that Chapman purchased for the
benefit of the trustees, and one of them, but with the knowledge
and acquiescence of all parties interested, and the circumstances
in reference to the sale were thus set forth in the answer of
Bertha Hammond:
"Further answering, on information and belief, the matters
alleged in the three foregoing paragraphs, I say that the said
George W. Hopkins and the testator, John Hopkins, were partners in
trade for years before the death of the latter, and that their
business consisted in the manufacture of bricks, and that the
property mentioned was purchased in the years 1849, 1854, and 1855,
for the purposes of their said business, and used for such
purposes, so far as required, until the death of the said John
Hopkins, and afterwards, in pursuance of the provisions of his last
will and testament, until the youngest child, Alice, had attained
the age of eighteen years, which event occurred in April, 1864;
that until such time, the business of brickmaking had continued as
before the death of the testator, in pursuance of the provisions of
his will, but under the authority thereby conferred it had been
necessary to dispose of some few pieces of ground, the purchase
money whereof was duly accounted for; that upon the happening of
such event -- the period fixed by the will for the division of the
estate -- the children of the said testator were eager to obtain
their respective shares of the estate; that it was well known to
all the said children that the said George W. Hopkins and John S.
Hopkins proposed to continue the said business, and to that end to
purchase the necessary parcels of ground at the prices at which the
same should sell at public auction; that the said children were not
only willing but desirous that the business should be continued and
the necessary purchase made, their only interest being in obtaining
the best prices; that in
Page 143 U. S. 239
order to obtain such prices, the whole title to the property was
sold, as well the interest of the said George W. Hopkins as of the
testator; that the said sale was of the property in separate
parcels, and was in all respects fairly conducted, and that the
prices obtained were the full value of the property; that the said
George W. Hopkins and John S. Hopkins bought with full knowledge
and consent of the said children, and duly accounted for the
purchase money; that at the time of the sale, the property, except
where the residence of George W. Hopkins stood in square 111, was a
common, the streets of the city not having been opened, and the
kilns for burning bricks standing on square 94; that there were no
circumstances of suppression or concealment, but the deed to James
Chapman, placed upon record, on its face showed only a nominal
consideration, and that all parties interested well knew that said
Chapman bought for the benefit of the said George W. Hopkins and
John S. Hopkins, and that the latter, after the said purchase,
continued the said business with the knowledge and acquiescence of
the said children of the testator until the death of the said
George W. Hopkins, in 1875."
The answers averred that the account of the trustees and
executors was properly in bar the order of that court, carried into
in bar the order of the court, carried into execution by the
parties interested. The matters in excuse of laches were denied,
and the great length of time, the death of parties and witnesses,
the increase in value of the property, and other circumstances,
were set up as an equitable bar.
July 8, 1884, and amendment was filed as to paragraphs 10 and 13
of the bill. These amendments alleged prearrangement to prevent
competition, and that squares 95 and 96 were offered and sold as an
entirety, and thereby brought a price far below what they would
have brought if advertised to be sold and sold in lots; that the
time was unpropitious for a sale, etc., and that the trustees had
appropriated to themselves part of the personal property belonging
to the brick kiln business, and notice, either actual or
constructive, of the proceedings in the orphans' court was
denied.
These amendments were answered by the principal defendants,
Page 143 U. S. 240
and the allegations denied, the defenses reiterated, and the
want of explanation of laches set up.
June 4, 1885, paragraph 13 of the original bill was again
amended by charging that the order of settlement and distribution
of the orphans' court was fraudulently obtained in that neither of
the trustees made known to the court the nature of their trust, if
the accounts included the proceeds as well as the sales of the real
estate, nor informed the court of their fraudulent conduct in
regard to the sales, nor that any notice, either actual or
constructive, had been given the complainants of the settlement and
distribution of the estate, and prayed that the order of
distribution might be disregarded and set aside, and distribution
made of the estate as by law it should be, and the defendants by
prohibited from availing themselves of the fraudulent settlement
and distribution. Paragraph 16 was also amended by adding that the
trustees failed to account for the sale of lots 12, 13, 14, 15, 25,
26, 29, and 40 of square 110, and had sold and fraudulently paid
over to George W. Hopkins one-half of the proceeds of lots 3, 4,
and 5, in square 67.
The principal defendants answered these amendments and traversed
their allegations. They admitted the sale of the lots in square
110, which were made before May 10, 1864, and averred that the
proceeds had been accounted for. They further averred that lots 3,
4, and 5, in square 67, belonged to George W. and John S. Hopkins
in common; that the said George W. and John S. Hopkins were
partners in the brickmaking business prior to 1858, and that these
lots were acquired for the purposes of said business, and were so
used by them, and that the proceeds of sale were duly accounted
for. Replications to all the answers were filed. The cause came on
to be heard in special term, before Mr. Justice Merrick, and the
bill as amended was decreed to be dismissed, with costs. The
opinion appears in the record.
On appeal, the court in general term reversed the decree of the
special term and adjudged that the sales to Chapman of May 10,
1864, were fraudulent and void, and that the deeds from the
trustees to Chapman, and from Chapman to George
Page 143 U. S. 241
W. and John S. Hopkins as individuals, and the deed from Chapman
to George W. Hopkins individually were null and void, and that the
same be set aside. It was further adjudged that the title of the
defendants to the real estate remaining unsold should be divested,
and that the defendants should account to the complainants before
the auditor for the purchase moneys arising from all sales made by
the trustees of portions of the real estate bought through Chapman,
with interest, and also for the purchase moneys arising from all
sales made by the defendants, and also for all rents and profits
received by the defendants. In the account the one-half of the
proceeds of the sale of lots 3, 4, and 5, square 67, received by
George W. Hopkins, with interest from June 18, 1872, was directed
to be included. And the decree provided for a partition or sale of
the unsold real estate, with directions to the auditor as to the
mode of dividing the proceeds if a sale should take place.
From this decree the defendants, and each of them, prayed an
appeal to this Court, which was allowed.
It appeared from the evidence that George W. Hopkins and John
Hopkins were brothers and co-partners in the business of
manufacturing bricks, and for the purposes thereof acquired and
used certain squares of ground in the City of Washington on which
there were clay deposits. As early as 1846, they carried on the
business on square 67, and in July, 1849, purchased squares Nos.
94, 95, and 96 at a cost of between one and two cents per square
foot. Their office and stable were on square No. 94, and their
kilns and drying sheds on squares Nos. 95 and 96. August 9, 1854,
they purchased square 111, on which was a brick dwelling house at
the price of five cents per square foot, and on December 27, 1855,
square 110 at two cents per square foot. By the deeds for these
squares, the property was conveyed to the grantees in fee simple as
tenants in common. Immediately after the purchase of square 111,
George W. Hopkins moved into the dwelling house thereon, and
resided there until his death in 1875. On the 27th of November,
1858, John Hopkins died, leaving the last will and testament
attached to the bill, which was duly admitted to
Page 143 U. S. 242
probate by the orphans' court December 4, 1858, and George W.
and John S. Hopkins qualified thereunder as executors December
14th, and the business was conducted as before.
The family of John Hopkins consisted of nine children, one of
whom, Levin, died in 1863, unmarried and intestate, and his share
devolved upon the other children, so that when Alice attained the
age of eighteen on April 13, 1864, the estate of John Hopkins was
represented by the eight surviving children, his devisees and next
of kin. His estate consisted mainly of his undivided moiety of
squares 94, 95, 96, 110, and 111.
On September 16, 1859, George W. Hopkins, in his own right, and
he and John S. Hopkins as executors, made a subdivision of the
original lots in square 110, and subsequently sold at different
times a number of the subdivision lots. On April 13, 1864, there
were unsold in this square the following lots: 8, 9, 10, 15, 16,
17, 18, 19, 20, 21, 24, 36, 37, 38, 39, 42, 43, 44, and 45. John
Hopkins resided in Georgetown at the time of his death, and his
children, or some of them, continued to reside there until 1862,
when they removed to the dwelling house on square 111, occupied by
their uncle, George W. Hopkins. When Alice attained the age of 18,
the seven other children were of about the following ages: Isaac
H., 40; Elizabeth A. Early, 39; John S., 37; Emeline V. Lilburn,
36; George Washington, 35; William M. S., 33; Mary V., 25. Mrs.
Lilburn lived in St. Mary's county, Md. and Elizabeth A. Early,
Mary Victoria, Alice C., John S., and Isaac H. Hopkins lived with
their uncle, George W. William M. S. and George Washington lived
elsewhere in Washington. Mary subsequently married one Wailes, and
Alice one James R. Hall.
Under the will, upon the arrival of Alice at the age of eighteen
years, the estate was to be divided, and in order to do this, it
seems to have been deemed advisable to sell the undivided moiety of
the real estate. The other undivided moiety belonged to George W.
Hopkins, and the trustees and executors, instead of selling one
moiety, advertised and sold the whole interest in the property, as
well that owned by
Page 143 U. S. 243
George W. as that owned by the estate. The advertisement bears
date the 20th of April, 1864, and advertises the sale at public
auction for the 10th of May following. This advertisement has
already been set forth, and under it squares 95 and 96, known as
"Hopkins' Brick-Yard," were, with the outfit, advertised to be sold
as a whole, as was also square 111, with the dwelling house and
other improvements. At the sale, the trustees purchased the squares
95 and 96 at four cents per square foot; lot No. 1 in square 94 at
ten cents per square foot, and lots 16, 17, 19, 20, 22, and 39, in
square 110 at eight and one-half cents per square foot. George W.
bought square 111 at nine cents per square foot. These purchases
were made through one James Chapman, who acted on behalf of the
purchasers. Lot 6, in square 94, was sold to August Miller at
thirteen cents per square foot; lots 2, 3, and 4 at ten and
one-half cents, and lot 5 at fourteen cents. Lots 8 and 9, in
square 110, were sold to James L. Roche at eleven cents per square
foot; lots 10 and 24, to Joseph Gawler at ten cents; lots 36 and
37, with improvements at $290 apiece; lots 41, 42, 43, and 44, to
W. C. Longstreth at six and one-half cents per square foot. On May
20, 1864, the property in question was conveyed by the trustees to
James Chapman, and he on the same day conveyed to George W. and
John S. Hopkins the squares and lots purchased by them jointly, and
to George W. the square purchased by him alone. The deeds were
recorded November 16, 1864. The consideration in the conveyance to
Chapman was merely nominal -- one dollar -- while the
considerations in the deeds from him recite as paid by the grantees
the price for which the property was purchased at the sale. On
August 23, 1864, orphans' court passed an order appointing
September 13, 1864, as the time for the final settlement and
distribution of the personal estate of the testator, and notifying
his devisees and heirs to attend the court on that day. The copy of
the order was published, in accordance with the direction of the
court, in the National Intelligencer, nine times, commencing August
24 and ending September 12, 1864.
It appears by the minutes of the court that on March 28, 1865,
the register of wills reported to the court the first and final
account of the executors, and the same was approved and
Page 143 U. S. 244
passed by the court, and it was ordered that "the executors
aforesaid make distribution of the assets in hand to the heirs in
accordance with the provisions of the will of the deceased." This
account treated the moiety of the proceeds of the sale of the real
estate, including the sale of May, 1864, as partnership property,
to be accounted for in the orphans' court as personalty. In the
account, the executors charged themselves with the amount of the
inventory, a policy of insurance, certain sums paid for slaves
emancipated in the district, and some items of interest, etc. The
debit account amounted to $24,155.59, and contained this item:
"And with this amount, being one-half the earnings of firm of J.
& G. W. Hopkins in conducting the brick kiln, owned in part by
deceased, from the day of his death to date of rendering this
account, first deducting the expenses of the family of deceased and
other expenses, directed by the will of said deceased to be
defrayed out of said earnings, and also the value of deceased's
interest in said firm, as per affidavit filed with vouchers,
$14,952.66."
The credits amounted to $2,024.13. No commissions were charged,
and the balance shown was $22,131.46. This was followed by a
distribution account, which after deducting $8 fees from the
balance $22,131.46, and $782.60 paid out on specific legacies, left
$21,340.86, which was distributed among the eight surviving
children of the decedent, namely Isaac H. Hopkins, John S. Hopkins,
Elizabeth A. Early, George W. Hopkins, William M. S. Hopkins,
Emeline V. Lilburn, Mary V. Hopkins, and George W. Hopkins, being
the sum of $2,667.60 3/4 each. This account was filed and recorded
March 28, 1865, and passed by order of court.
The affidavit and vouchers mentioned do not appear in the
record, and it is said that after diligent search, they cannot be
found. Within a few days after the passage of the order,
distribution was made and the receipt of the different parties
entitled were delivered by the executors to the register and by him
recorded. The share of William M. S. was receipted for by John S.;
the share of Alice, receipted for by the executors, was by them
held in trust until she attained the age of 21,
Page 143 U. S. 245
and was afterwards paid to her and her husband. After the sale
of May 10, 1864, George W. and John S. Hopkins carried on the
brickmaking business on squares Nos. 95 and 96, and lot 1, square
94, until as late as 1873, and probably as 1875, when George W.
died. After his death, John S. field a bill for the partition of
the property owned in common, the other lots purchased in common
having been sold, and by the decree of the court below of February
27, 1877, lots 1, 2, 3, 4, and 6, in square 95, and lots 5, 6, 7,
8, 9, and 10 and 11, in square 96, were allotted to him in
severalty. Lot 1 in square 94, and lot 5 in square 95, and lots 1,
2, 3, 4, 12, 13, 14, 15, and 16, in square 96, were allotted to the
heirs of George W. Hopkins. Thereafterwards the children and heirs
at law of George W. filed a bill for the payment of his debts and
for a partition of the property allotted to them in the first suit,
and also of square 111, where he resided until his death, and a
decree was rendered in which a part of the property was sold for
the payment of debts, and the remainder allotted to the heirs at
law in severalty. Nearly all of the lots thus allotted had been
sold when the bill in this case was filed. John S. Hopkins, the
other trustee, died intestate May 7, 1883. He left a widow, Esther
E. Hopkins, and an only child and heir at law, Bertha Hopkins, who
was at that time twenty-five years of age. After the partition
between John S. and the heirs at law of George W., John S. built a
row of houses on the lots in square 96 at a considerable cost. None
of the property allotted to him in the partition suit was sold by
him prior to his death except the east part of square 95.
As already stated, George W. and John Hopkins, in 1846, carried
on their business on square 67, and in 1869, after the death of
John Hopkins, a deed was made by Charles E. Mix to George W.
Hopkins and John S., as executors and trustees, for lots 3, 4, and
5 in said square. These lots were sold and conveyed by the
executors and trustees, June 18, 1872, for $6,784, and of these
proceeds George W. received one-half as co-partner, or $3,392, and
the other half was paid over to the beneficiaries entitled, who
duly receipted for their respective shares in full of all demands
to date. The share of George
Page 143 U. S. 246
Washington Hopkins was receipted for by Mary A. Hopkins, his
administratrix.
June 20, 1860, William M. S. conveyed in fee simple all his
interest in his father's estate to his brother John S. for the
consideration, as expressed in the deed, of $3,000. This deed was
also signed by Sarah E. Hopkins, the wife of the grantor, and was
acknowledged on the day of its date by the grantor and his wife
before two justices of the peace, and recorded July 7, 1860. By
deed dated January 28 and acknowledged, and recorded January 29,
1864, William M. S. conveyed the same share, with all his property,
to Christopher Ingle in trust for his wife for life, and then over
to his children and himself.
Page 143 U. S. 249
MR. CHIEF JUSTICE FULLER, after stating the facts in the
foregoing language, delivered the opinion of the Court.
This bill was filed April 8, 1884, and attacked the purchases
through Chapman at the sale of May 10, 1864, and the account stated
and settled in the orphans' court March 28, 1865; the settlement
made in 1873 of the proceeds of the sales of lots 3, 4, and 5, in
square 67, and also the deed from William M. S. Hopkins and wife to
John S. Hopkins, of June 20, 1860. The
Page 143 U. S. 250
executors and trustees of John Hopkins -- James Chapman, who
purchased at the sale, Isaac and George Washington Hopkins, two of
the sons and devisees of John Hopkins, and who were present at the
sale -- were all dead; the affidavits and vouchers filed in the
orphans' court at the executors' settlement could not be found;
partition had been had by judicial proceedings between one of the
trustees and the heirs at law of the other, and also between the
latter, and great changes had taken place in the quarter of the
city where the lots and squares were located, coupled with an
enormous increase in their value, in the lapse of twenty years, and
because of the improvements which had in the meantime been made in
their vicinity.
No rule of law is better settled than that a court of equity
will not aid a party whose application is destitute of conscience,
good faith, and reasonable diligence, but will discourage stale
demands, for the peace of society, by refusing to interfere where
there have been gross laches in prosecuting rights or where long
acquiescence in the assertion of adverse rights has occurred. The
rule is peculiarly applicable where the difficulty of doing entire
justice arises through the death of the principal participants in
the transactions complained of, or of the witness or witnesses, or
by reason of the original transactions' having become so obscured
by time as to render the ascertainment of the exact facts
impossible. Each case must necessarily be governed by its own
circumstances, since, though the lapse of a few years may be
sufficient to defeat the action in one case, a longer period may be
held requisite in another, dependent upon the situation of the
parties, the extent of their knowledge or means of information,
great changes in values, the want of probable grounds for the
imputation of intentional fraud, the destruction of specific
testimony, the absence of any reasonable impediment or hindrance to
the assertion of the alleged rights, and the like.
Marsh v.
Whitmore, 21 Wall. 178;
Landsdale v.
Smith, 106 U. S. 391;
Norris v. Haggin, 136 U. S. 386;
Mackall v. Casilear, 137 U. S. 556;
Hanner v. Moulton, 138 U. S. 486.
The main contention here is that the sale of May 10, 1864,
should be set aside as to the purchases by the trustees through
Page 143 U. S. 251
Chapman on the ground of constructive, coupled with actual,
fraud.
Undoubtedly the doctrine is established that a trustee cannot
purchase or deal in the trust property for his own benefit or on
his own behalf, directly or indirectly. But such a purchase is not
absolutely void. It is only voidable, and, as it may be confirmed
by the parties interested directly, so it may be by long
acquiescence, or the absence of an election to avoid the conveyance
within a reasonable time after the facts come to the knowledge of
the
cestui que trust.
The often-cited case of
Michoud v.
Girod, 4 How. 503, laid down the general rule that
a person cannot purchase legally on his own account that which his
duty or trust requires him to sell for another, nor purchase on
account of another that which he sells on his own account, and that
a purchase
per interpositam personam by a trustee or agent
of the particular property of which he has the sale, or in which he
represents another, whether he has an interest in it or not,
carries fraud on the face of it; but there was actual fraud in that
case, and the rule that within what time a constructive trust will
be barred must depend upon the circumstances was recognized. In
Stearns v.
Page, 7 How. 819,
48 U. S. 829,
Mr. Justice Grier, speaking for the Court, said that a complainant
seeking the aid of a court of chancery under such circumstances of
lapse of time as there existed
"must state in his bill distinctly the particular act of fraud,
misrepresentation, or concealment -- must specify how, when, and in
what manner it was perpetrated. The charges must be definite and
reasonably certain, capable of proof, and clearly proved. If a
mistake is alleged, it must be stated with precision, and made
apparent so that the court may rectify it with a feeling of
certainty that they are not committing another, and perhaps
greater, mistake. And especially must there be distinct averments
as to the time when the fraud, mistake, concealment, or
misrepresentation was discovered and what the discovery is, so that
the court may clearly see whether, by the exercise of ordinary
diligence, the discovery might not have been before made. Every
case must, of course, depend on its own peculiar circumstances, and
there
Page 143 U. S. 252
would be little profit in referring to the very numerous cases
to be found in the books on this subject. In the case of
Michoud v. Girod, 4 How.
504, lately decided in this Court, transactions were investigated
after a lapse of more than twenty years, but the facts proving the
fraud were all on record, and were not disputed. The false accounts
made out against the estate of the deceased by the executors were
on file, and their iniquity was apparent on their face. Moreover,
the complainants resided in Europe, and were kept in ignorance of
their rights and hindered from prosecuting them by the promises,
threats, and fraud of the guilty parties."
And in
Badger v.
Badger, 2 Wall. 87,
69 U. S. 95, the
same eminent judge observed that a party seeking to avoid
laches
"should set forth in his bill specifically what were the
impediments to an earlier prosecution of his claim; how he came to
be so long ignorant of his rights, and the means used by the
respondent to fraudulently keep him in ignorance, and how and when
he first came to a knowledge of the matters alleged in his bill;
otherwise the chancellor may justly refuse to consider his case, on
his own showing, without inquiring whether there is a demurrer or
formal plea of the statute of limitations contained in the
answer."
It is conceded that the proposition that where a trustee or
person, acting for others, sells the trust estate and becomes
himself interested in the purchase, the
cestuis que
trustent are entitled as of course to have the purchase set
aside is subject to the qualification that the application for such
relief must be made within a reasonable time and that laches and
long acquiescence cannot be excused except by showing some actual
hindrance or impediment, caused by the fraud or concealment of the
party in possession, which will appeal to the conscience of the
chancellor. But it is argued that such fraud and concealment
existed here, and in that connection assertions and insinuations of
fraud in fact are made.
Apples' counsel contend that although George W. Hopkins and John
S. Hopkins were men of character and integrity, yet they were good
businessmen, and that John S. was self-reliant, reticent, and close
in money matters, while the four
Page 143 U. S. 253
daughters were unaccustomed to business, and of the other three
sons two were dissipated and one lacked business capacity; that the
family was a united one, and entire confidence was reposed in the
uncle and brother, and hence that trustees might easily have
cheated their
cestuis que trustent.
That the trustees had full knowledge of the future value of the
property and desired to possess themselves of it at the lowest
possible price, and therefore determined not to divide by
partition, but to sell, and purposely sold at a time when the real
estate market was prostrated and the building business so depressed
that there was no demand for bricks, notwithstanding they had ample
power to change the time of sale if circumstances rendered it
necessary or desirable, and advertised and sold squares 95 and 96
as a brickyard as a means of reducing the price, although the
property was worthless as a brickyard, and there was no demand for
bricks or for real estate in large quantities, and that these
squares were sold as an entirety, in order to enable the trustees
to buy at a less price than a sale by subdivision would have
produced, and in this way a loss occurred of not less than
$15,930.87; that square 111 was sold as an entirety when it should
have been sold in lots, and this resulted in a loss of $6,061.98;
that the difference between what these squares actually realized
and what they should have was not less than $22,092.85, or a loss
to the eight heirs of John Hopkins of $11,046.42 1/2.
That "these were frauds perpetrated secretly under such
circumstances of confidence inspired by the trustees as to prevent
these owners from discovering them," and this is alleged to be
established (a) by the employment of Chapman to make the purchase;
(b) by the deed to Chapman, reciting a consideration of one dollar,
and the deed of Chapman to George W. Hopkins, "having the false
recital" that Chapman had sold him square 111 for $9,093.42, and
that to George W. and John S., "having the false recital" that
Chapman had sold to them squares 95 and 96, and parts of 94 and
110, for $10,842.24; (c) by the fact that the deeds were not
recorded until November 16, 1864.
That, in order to "give a semblance of judicial sanction to
Page 143 U. S. 254
their acts and further deceive appellees," the trustees went
into the orphans' court, and by
ex parte proceedings had
their account passed upon, although the court had no
jurisdiction.
And further that appellees were ignorant of the purchase of the
property by the trustees until so informed by their attorney a few
days before the institution of this suit; that it had been
represented to them that a bricklayer had bought it, of whom their
uncle and brother had subsequently purchased, and that it was
represented to them by the trustees that the sale was
bona
fide, and that the property had brought all it was worth at
the time. It is insisted that the evidence discloses an actual
hindrance and impediment to the appellees discovering their rights,
caused by the fraudulent assertions of the trustees that the
property brought its full price, and that the sale was particularly
conducted for the interest of the heirs. And it is earnestly urged
that when the confidential relation of trusteeship and kinship
exists, if the trustees and kinsmen inform those for whom they act
that their administration has been honest and faithful, when that
is not the fact, that constitutes such fraudulent concealment as
excuses laches.
It will be perceived that the main charge of fraud in fact
consists in an alleged conspiracy to obtain the property for less
than it was worth. The claims that the sale was fixed at a
unpropitious time, and that the squares should have been subdivided
and sold in lots, go to the adequacy of the price. If there were no
such conspiracy, the specific charge falls to the ground, and if
all the circumstances relied on to sustain it were actually known
or the appellees were chargeable with such knowledge, then it comes
too late. And if they were fully informed that the trustees
purchased, and the latter made no false representations in relation
to the sale which misled them, the attempted explanation of the
lapse of time as bearing on the purchase by the trustees themselves
also fails.
We can hardly see how appellees can now be permitted to plead
ignorance as to the time and manner of the sale, the prices
brought, the deeds to and from Chapman, and the settlement of the
account, and if they are held to knowledge
Page 143 U. S. 255
on these points, the question in either aspect becomes reduced
to the inquiry whether they knew or might have known that the
trustees purchased the property, or were kept in ignorance by any
false representations. But in answering this inquiry, it is perhaps
desirable to look somewhat into the basis of these charges.
We do not understand it to be contended that the trustees were
bound to carry the John Hopkins half, or attend to the support of
his children, or any of them, out of the brick business or
otherwise, indefinitely.
By his will, after certain bequests, John Hopkins had devised
his property to his brother and son in trust,
"to carry on the brickmaking business as now conducted by my
said brother George W. Hopkins and myself in Washington City, D.C.,
said business to be under the direction of my said brother, George
W. Hopkins, assisted by my said son, John S. Hopkins, as clerk, for
which he is to receive a regular stated salary,"
and further, to receive the income of the estate and business or
the testator's portion and apply the same to the payment of his
debts and funeral expenses, of a reasonable salary to John S.
Hopkins, as clerk, and the reasonable expenses and support of the
testator's family, and the education of the younger members
thereof.
"And upon further trust that my said trustees shall (where, in
their judgment, a sale of the real property owned by me and my said
brother, George W. Hopkins, or any part thereof, or of the brick
kilns and the materials or implements thereunto belonging, or of
said business, is essential or necessary for any cause whatever, or
would be advantageous) sell and dispose of at public or private
sale at such time or times after such notice, and upon such terms
as they may deem most for the interest of my estate, and by proper
conveyances convey the same to the purchasers, who, having paid his
or her purchase money to my said executors, shall be under no
obligation to see to the application thereof under the trust of
this, my will, nor answerable for the misapplication of the
same."
Surplus income and proceeds of sales were to be reinvested or
advanced to such of the children as might need or deserve the same.
And the will further provided:
Page 143 U. S. 256
"that upon the arrival of my daughter Alice to the age of
eighteen years, which will occur on or about the first day of May,
1864, my estate of every kind shall be divided by my said trustees
and executors among my children."
But the trustees were invested with power to make an earlier
disposition in their discretion, as above shown, and by the further
clause:
"I greatly desire, as already stated, that my family shall
remain as it now is, without change or modification or sale or
valuation of the furniture or slaves until the said division of my
estate, and that it shall until then be supported by the brick kiln
business as though I were living, and as I believe the squares and
lots of ground owned by my brother George and myself is now and
will continue to increase in value, I desire, if possible, that
said land may be kept unsold and undivided until as above stated,
as it will thus be greatly to the advantage of my family; but, as
circumstances now unforeseen may make a change necessary or
desirable, I cheerfully trust in the prudence and discretion of my
said trustees, and I give them full power, as above, to exercise
their judgment as circumstances may arise, making it proper to
dispose of said land and business, or to change and alter the same,
believing that they will have the comfort and welfare of my family
and their relatives much at heart."
It is unnecessary to consider the rights and powers of George W.
Hopkins as surviving partner. The trust was accepted, the business
carried on, the children assisted and supported, and the land kept
unsold and undivided (except certain lots in square 110, which were
disposed of in 1859) "until as above stated" -- that is, until
Alice attained the age of eighteen, which was April 13, 1864, when
it became the duty of the trustees to divide the testator's estate
of every kind among his children.
To divide this real estate required a partition as between
George W. and the estate, and thereupon a partition of their half
as between the testator's children. To sell an undivided half would
probably prove disadvantageous, but if George W. allowed his half
to be sold with the other, so that complete title could be given
without subsequent legal proceedings, the
Page 143 U. S. 257
trustees apparently concluded a sale would be the best mode of
arriving at a division. It is impossible to say that there was
anything unreasonable in such a conclusion.
There is nothing, then, in the trustees dividing at the time
specified by the testator, and resolving to do this by the ordinary
method of a sale, which gives color to the charge of
conspiracy.
Squares 95, 96, and part of 94 were used in the brick business,
and George W. Hopkins lived on square 111. He owned one-half of
these squares, and it was natural that the should desire to own the
whole of his homestead, and that he and his nephew should wish to
own all that portion used in the business in which they were
engaged. But it is not therefore to be assumed that in the
gratification of their wishes in this regard they would commit
deliberate fraud upon the brothers and sisters of the one and the
nephews and nieces of the other. It is not denied that George W.
and John S. Hopkins were honest and reliable, and sustained a high
reputation for integrity, and if fraud or breach of trust ought not
lightly to be imputed to the living, the evidence of fraud should
be convincing before the sanctity of the grave is disturbed. Yet
here the stress of the argument that the deceased were guilty is
thrown upon the alleged inadequacy of price claimed to have been
the result of selling squares 95 and 96 as an entirety and square
111 in the same way. That they brought full prices as squares is
satisfactorily established by the evidence, and scarcely
disputed.
The condition of the squares in that part of the city, including
squares 94, 95, 96, 110, and 111, in May 1864, is described by one
of appellees' witnesses as just laid out
"in old fields, as it were. You could hardly tell one street
from another. Very rarely you would see any improvement on any of
them, unless it were some old shanty, which had been built there
probably thirty or forty years. . . . All these squares were pretty
much set out in nurseries, you will remember; but I do not think
any nurseries were on these squares at that time. I think they laid
out in a common."
"Q. Were the Streets graded?"
"A. I think not. I do not think there were
Page 143 U. S. 258
any Streets graded there."
"Q. How many houses can you recollect in the neighborhood of
what is now known as 'Dupont Circle?'"
"A. There were very few houses in that neighborhood. I want to
state that there were very few. George Hopkins' house was there at
the time, but houses were very scarce, I tell you. There may have
been some old landmarks torn away that may have escaped my memory,
but the whole place laid out in old fields and commons. I cannot
recall any houses; but further out, near the boundary, there were
some houses. I remember a house right at the head of Twentieth
Street. It is there still. Well, they were scattered around.
Probably you would have to walk two or three squares to find
houses."
"Q. Were there any pathways to get to the houses?"
"A. I think there was a road which led to Holmead's
burying-ground; a kind of highway known as the 'burying-ground
road.' I went out that road when I was in that part of the city.
But as for squares, I do not think anybody could tell one square
from another by going there, so far as distinguishing them by roads
or anything of that kind is concerned."
Other evidence is to the effect that in 1866 and 1867, there
were no Streets open running north of K and west of Fourteenth
Streets, except Twentieth Street; that no street had been brought
to anything like an established grade at that time, though
Twentieth Street was graded a portion of, and perhaps all, the way;
that none of the streets running east and west were opened in that
locality west of Seventeenth or Eighteenth Streets, except a
portion of L Street; that no streets north of L Street were opened
on any established grade across Twentieth Street; that M Street was
very nearly on the grade about Twentieth Street, but not at
Twenty-First Street; that there were scarcely any blocks or any of
the streets opened north of L and west of Fourteenth Streets in
that portion of the city in 1867, and Massachusetts Avenue had not
been opened, not P nor O Streets; that the property in that section
of the city west of Dupont Circle,
"a good deal of it, or some of it, was enclosed, and used for
cultivation, for pasturage. A portion of it was used for the
manufacture of brick, and other portions were laid out in pasturage
for hogs and cows and goats, etc. . . .
Page 143 U. S. 259
A person could tell about where the streets were, but not by any
defined lines. There were roads passing here and there up
Massachusetts Avenue, which was barely passable. There was no
bridge over Slash Run at Massachusetts Avenue."
There were no water mains nor sewers. Brick kilns were on square
95, and sheds and yards for drying bricks were on square 96. The
surface of the squares was rough and irregular and full of holes
made in digging for brick clay. One witness said that in the middle
of those squares "you might have buried "Jumbo," and you could not
see him." How far the squares might be above grade when the Streets
were opened seems to have been regarded as in doubt,
notwithstanding the books of the surveyor's office gave the future
grades.
It was in proof that the manufacture of brick was carried on
there "until 1872 or 1873," and that square 96 was "used for
digging clay for the manufacture of brick in 1876, 1868, and 1869;
along about that time." The principal witnesses concur that the
business of brickmaking was carried on after the sale as it had
been before.
Evidence was adduced on behalf of appellees tending to show that
there was but little brick clay on these squares after 1864; that
the concern gathered it from the streets; that the two kilns on
square 95 were old and out of shape, and that the brick the
Hopkinses made was too soft for pavements. But the fact remains
that the brick business was carried on upon these squares for years
after the sale. They were thus advertised as a
"brickyard, believed to be one of the best located in the
District, having both Washington and Georgetown for a market, an
abundance of fine clay, brick, and tempering sheds, kilns, offices,
and all necessary outfit for a first class brickyard."
There is evidence of probable ground for the belief that the
squares would in any view bring better prices by being sold in
blocks, but apart from that, we think the inference of bad faith
because they were sold as a brickyard a strained one. Conceding
that the judgment of the trustees was influenced by their own
intention to continue the business, that is not enough to sustain
the assumption of actual fraud in the matter
Page 143 U. S. 260
of the prices, and the knowledge of the parties now complaining
of the continuance of the business is admitted. So as to square
111, that was advertised as
"improved by a large, brick dwelling house and back buildings,
carriage houses, stabling, etc., the whole enclosed and beautified
with fruit and ornamental trees and shrubbery."
The reason is thus given for selling it as an entirety, and it
was an obvious one. As we have said, it was George W. Hopkins'
home, and most of the children of his brother John were living
there with him. He naturally desired to own it not for subdivision,
but for a residence. The house is shown not to have materially
enhanced the value, and the price of nine cents per square foot was
a full price. Several years after, he did subdivide a part of this
square, and sold the lots constituting the north half for eleven
cents per square foot. This was nearly five years after the sale.
The first subdivision of six of the original lots was August 6,
1868, and the second of the remaining six was November 7, 1870.
The Board of Public Works, created by the Act of Congress of
February 21, 1871, thereafterwards opened up and reclaimed the
territory in this quarter of the city, and many thousands of
dollars were imposed in special assessments upon all this property
and paid by the owners. The property had increased in value between
its original purchase and the sale to a considerable extent, as the
prices at the sale showed, but twenty years thereafter, these
values had increased several thousand percent. Square 96 was not
subdivided until October 20, 1877, more than thirteen years after
the sale.
Undoubtedly the argument is ingenious and forcible that squares
94, 95, and 96 were of about the same value and that if the lots in
square 94 brought a higher price per square foot, the lots in the
other squares, if subdivided, would have done so also, but
considerable differences between square 94 and the others are
shown, and it appears that the five lots in 94, purchased at the
sale by August Miller, were then occupied by him as a garden, and
upon the issue of fraud in fact, an intentional attempt to acquire
the property at an inadequate price cannot safely be inferred upon
equivocal and conflicting
Page 143 U. S. 261
theories as to why one piece sold at a better price than
another. Taking all the evidence together, even if it were now seen
that if the brick business had been abandoned and the property
subdivided, more might have been realized, fraud is not to be
imputed because this was not done.
No exception seems to be taken for want of publicity in the
sale. The advertisement was published in the National
Intelligencer, the Evening Star, and the Daily Chronicle from April
20, 1864, to May 10, 1864, daily. The sale was conducted by J. C.
McGuire & Co., an established firm in the conduct of such sales
in 1864, and apparently by Thomas J. Fisher, then a member of the
firm, who, however, by reason of the lapse of time, and through the
distractions of a large business, testified that he did not have
the slightest recollection of making it. The proofs indicate that
there were many persons present, and more than one bid -- perhaps
three. An account of the sale to Chapman and others, and the prices
realized, appeared in the Star the next evening.
The deeds to Chapman were for a nominal consideration, while the
consideration in each of the deeds from Chapman to George W. and
John S. jointly, and to George W., was the aggregate amount for
which Chapman had bid in the property described in the deeds
respectively. They were all simultaneously recorded on the 16th of
November following, and spoke for themselves, carrying upon their
face the evidence of the transaction as being a purchase by the
trustees through Chapman. Thus viewed, their recitals were not
false. If the consideration in the deed to Chapman had been the
amount of his bids, there would have been more ground for such a
suggestion. It was the trustees who paid, and the deeds showed it
according to the fact. The delay in recording the deeds is of no
moment. If the evidence shows, as we think it does, that the
purchase was openly announced in the family of George W. and John,
it would be unreasonable to ascribe to them the motive of
concealment in neglecting to record the deeds before they did. The
argument as to confidence reposed is inconsistent with such an
idea, and meditated fraud would have put the conveyances on record
at once.
Page 143 U. S. 262
It is said that the accounting in the orphans' court was had in
order to "further deceive appellees." We find that on the 12th of
July, 1864, citation was issued against the executors to settle an
account, and that on the 23d of August, the court appointed the
13th of the succeeding September for the final settlement and
distribution of the personal estate of the deceased, and issued the
requisite legal order for publication to be inserted once a week
for three weeks in the National Intelligencer prior to said day,
which was accordingly done. No proceedings took place on September
13, 1864, and on January 7, 1865, another citation was ordered to
be issued against George W. Hopkins, which was, however, as was the
first one, returned without service. On March 28, the accounting
was had, as hereinbefore stated. Perhaps there was undue delay in
this accounting, but the proceedings in court were regularly
conducted, and the shares of the devisees ascertained and duly
receipted for by them. The account shows that the proceeds of the
business and of the sales prior to May 10, 1864, were included,
though not itemized, and it is certainly too late to open up that
account as such, and especially in the absence of evidence of any
fraudulent charges or omissions. Indeed, the account can hardly be
said to be attacked on any ground inherent in itself, but simply in
order to obviate its operation as a settlement, precluding any
further investigation of the matters complained of. The executors
accounted for half the proceeds from the sale as personalty,
treating the real estate as having been acquired and used for
partnership purposes, and as being partnership property. We are at
a loss to conceive how the conspiracy charged is sustained in any
degree by the mere fact that the executors accounted.
It appears also that after the conveyance by Chapman to George
W. and John S. Hopkins as individuals, they conveyed, between July
26, 1865, and March 4, 1871, by four separate deeds, lots 16, 19,
39, and 17, in square 110 to different purchasers, and that the
first, second, and fourth of these purported to be given by them as
executors, while the third did not. These deeds were drawn by the
same scrivener who had been in the habit of preparing deeds for
George W. and
Page 143 U. S. 263
John S. Hopkins, as executors, before the sale. Between the
dates of the first and last of these four deeds George W. Hopkins,
as an individual, conveyed a number of lots in square 111, in which
John S. Hopkins did not join, and between the date of the fourth
deed and April 30, 1875, George W. and John S. Hopkins, as
individuals, conveyed by four separate deeds at different times,
four lots in square 110 to different purchasers, while George W.
Hopkins, between the same dates, conveyed a number of lots in
square 111. We think the form of the three deeds was obviously a
blunder of the conveyancer, and that it cannot rightly be laid hold
of as showing that the deeds were intentionally so drawn to conceal
the fact that George W. and John S. Hopkins owned the property
therein named as individuals, or that they purposely, for that
reason, continued to deal with portions of the real estate they had
purchased as if they still held it as executors and trustees.
We are brought, then, to consider whether appellees were
ignorant of the purchase of the property by the trustees, and
whether there were any false representations on their part which
misled them.
George Washington Hopkins and Isaac H. Hopkins were at the sale,
and Mrs. Lilburn, Mrs. Wailes, Mrs. Early, and Alice were at the
house of George W. at the time it took place, Mrs. Lilburn having
been sent for to come up. The National Intelligencer was taken at
the house, and the advertisement had been read, certainly, by Mrs.
Early, some time before. George Washington said to a witness, while
Chapman was bidding, "He is buying for Uncle George," and Isaac H.
was
"the first to come in from the sale, and he said that Chapman
had bought the property for Uncle George W. Hopkins and John, and
he said they had paid as much for it as the property was
worth."
The subject of the sale, and that George W. and John S. would
purchase, was frequently talked over as well before as after the
sale, and the evidence demonstrates that there was no secrecy or
concealment about it.
The interesting fact is testified to by appellees' solicitor
that
Page 143 U. S. 264
he brought to the attention of his clients the case of
Landsdale v. Smith, 106 U. S. 391, and
that he
"read to them the rule of law that in order to excuse long delay
in the prosecution of a suit, it must be shown by the plaintiff
that the delay was caused by some hindrance, impediment, or
concealment of a party in possession. I think I read it over to
them half a dozen times, and tried to explain it to them."
In that case, it is stated:
"It has been a recognized doctrine of courts in equity from the
very beginning of their jurisdiction to withhold relief from those
who have delayed for an unreasonable length of time in asserting
their claims. In
Wagner v. Baird, 7 How. 234,
it was said that long acquiescence and laches by parties out of
possession are productive of much hardship and injustice to others,
and cannot be excused except by showing some actual hindrance or
impediment, caused by the fraud or concealment of the party in
possession, which will appeal to the conscience of the
chancellor."
Nevertheless, although thus admonished, the testimony of the
four sisters, Mrs. Early, Mrs. Lilburn, Mrs. Wailes, and Mrs. Hall
-- who appeared to be intelligent and well educated -- if treated
as competent, falls far short of overthrowing the evidence on the
part of the defendants that they were acquainted with the fact that
the purchase was made for the trustees. No one can carefully peruse
their evidence without being impressed with the belief that they
were aware of that fact. Three of them testified that they knew
their uncle and brother had become purchasers of the property from
a bricklayer, or Chapman, who bought at the sale, not that they did
not know or hear that he bought for the trustees. Mrs. Hall, who
was but just eighteen at the time, denied that she knew who bought
the property until March, 1884, but said that she had no doubt that
if she had applied to her uncle or brother for information in
regard to the estate, they would have given it. Mr. Luttrell
testifies that in 1876, she told him that Chapman bought for George
W. and John S., and in 1867 and 1868, she, or her husband for her,
received and receipted for the full amount of her share -- which
under the will was not to be paid over until she reached twenty-one
-- on an account rendered. All these
Page 143 U. S. 265
complainants saw the brickyard being carried on as before, and
George W. and John S. continuing to exercise acts of ownership over
the property. They all had no doubt that either of the trustees
would have given them any information they desired, and they all
evidently had no objection to the trustees becoming the purchasers
in and of itself.
The following is from the testimony of Mrs. Early:
"Q. I understand you now to say that you would not have objected
to George W. and John S. Hopkins buying the property had they given
a fair price for it."
"A. No, sir; I would not have objected to it."
"Q. And your whole complaint is that you were told they did not
give a fair price for it?"
"A. That justice was not done us."
"Q. I understand your complaint now is that George W. and John
S. Hopkins did not give a fair price for what they bought."
"A. Well, I think they got as much as they could for the sale at
the time."
"Q. You had no objection, as you stated yesterday, to George W.
and John S. Hopkins buying it?"
"A. No, sir."
"Q. And you did not care who bought the property, so that you
got a fair price for it?"
"A. No, sir."
The force of this admission is attempted to be broken by a
letter to Mrs. Early from her attorneys, calling her attention to
her answer as to the trustees getting as much as they could at the
time, and, among other things, notifying her
"that, unless this statement was a mistake, honestly made, and
as honestly corrected, we shall feel obliged to ask the court, when
the case shall be called for hearing, to consider us as no longer
counsel for your interest,"
and her reply that she meant "what I thought the day of the
sale, but since then, I do not think they got as much as they could
for the property," etc. This correspondence may have soothed the
susceptibilities of counsel, but it is not evidence, and if it
were, it fails to remove the impression that Mrs. Early believed
that a full price was realized.
It will subserve no useful purpose to go more minutely into the
evidence. We regard the conclusion as irresistible that the fact
that the purchase was made for and by the trustees was known to all
of these children at or about the time of the sale.
Page 143 U. S. 266
The excuses for want of diligence in the premises set forth in
the bill amount only to this: that in February, 1884, an attorney
undertaking the investigation of William's case, which had been in
hand since 1873,
"discovered for the first time that Chapman had never paid one
dollar of consideration for said land, but had bought the same for
and on account of said trustees, and that the sale was fraudulent
and void,"
and that thereupon the plaintiffs' attention was called to this
so-called discovery. The point seems to be that complainants
counsel concluded from the conveyances, as he very well might, that
the trustees had bought at their own sale. This was true, and was
an obvious deduction from the deeds, but it did not therefore
follow that those conveyances were absolutely void, nor that they
could be held so nineteen years after they were executed, if the
complainants had known or should have known that fact during the
intervening time, or a large part of it.
Whether appellees were informed before 1884 of the rule in
relation to trustees purchasing at their own sale is immaterial.
Probably George W. and John S. Hopkins were unacquainted with it,
and made the purchase through Chapman because obliged to in order
to pass the legal title. The vital question is did appellees
actually know, or were they chargeable with knowledge of, the fact
of the purchase itself? What we have said in effect disposes of the
suggestion that by false representations, appellees were misled
into believing that the sale was fairly conducted when it was not,
and that this constitutes a sufficient explanation of the lapse of
time.
The bill averred that George W. Hopkins assured Mrs. Lilburn,
when she expressed surprise that the property had brought so low a
price, that the sales were "each and all
bona fide." But
the testimony of Mrs. Lilburn was not quite that. She testified
that when her uncle came in from the sale, she remarked to him:
"Uncle George, is the land all sold?" He said, "Yes." I said, "You
did not get but very little for it." He said, "No, it was a
bona fide sale." In addition to this, counsel refer to the
evidence of Mrs. Dashiell on cross-examination, where she said that
she understood the property
Page 143 U. S. 267
brought its full value, and a great many people thought it
brought more, and was asked: "Question. It was looked upon, then,
as a sale particularly conducted for the interests of the heirs? A.
Yes, sir; it was." And of the widow of John S. Hopkins that
"My uncle, George W. Hopkins, and my husband, John S. Hopkins,
told the family that they were going to buy the brickyard property;
that they would give as much for it as anyone else, and none of
them objected at all."
And that of other witnesses that there was no dissatisfaction
expressed, and no suspicion entertained.
Upon testimony of this kind, we cannot hold that either of these
deceased trustees made statements with the view to induce their
cestuis que trustent to act upon them or that appellees
were lulled into repose by any affirmative conduct on their part.
Still less does this class of evidence tend to show an effort to
conceal from appellees that the trustees had purchased at their own
sale.
By the amendment made in June, 1885, these trustees were charged
with fraudulently appropriating one-half of the proceeds of lots 3,
4, and 5, of square 67, known as the "Mix Lots," to the benefit of
one of them. The evidence showed that John and George W. Hopkins
carried on the business of brickmaking on square 67, using the clay
derived therefrom, before they occupied squares 94, 95, and 96, and
that the brick business had been carried on on that square, before
their occupancy, by a firm, one of whom was named Mix. It further
appeared that John Hopkins had been engaged in business on his
individual account, and had failed, and that he had had
transactions in which George W. was not interested. And one of his
daughters, Mrs. Early, testified, under objection, to a
conversation between her father, John Hopkins, shortly before his
death, and Mr. Mix in which Mix told Hopkins that he would give him
a deed for some lots. On October 27, 1869, Charles E. Mix and wife,
for the nominal consideration of $5, conveyed to George W. and John
S. lots 3, 4, and 5 in square 67 in fee simple,
"in trust, nevertheless, to have and to hold the same for the
benefit of the estate of the late John Hopkins, upon like trusts
and conditions
Page 143 U. S. 268
and with all the rights and powers, contained and vested in the
said parties of the second part under and by virtue of the last
will and testament of the late John Hopkins."
On June 18, 1872, George W. and John S., as executors of the
estate of John Hopkins, deceased, and also as trustees under the
deed from Mix and wife, conveyed to James M. Latta said lots 3, 4,
and 5 for $6,784. On July 1, 1873, John S. gave to Mrs. Early a
paper written by himself, containing a statement by the trustees of
the sale of these lots. This paper was as follows:
Sales of lots 3, 4 & 5, square 67 . . . . . . .
$6,783.99
Balance in interest, rents &c. . . . . . . . . 262.10
---------
$7,046.09
One-half to Geo. W. Hopkins -- . . $3,523.04 1/2
Do. J. Hopkins . . 7)3,523.04 1/2 3,523.04 1/2
------------- ------------- 7,046.09
July 1st, 1873 503.29
Prior to this date, two of the nine children of John Hopkins,
namely, Levin and Isaac, had died intestate, and without issue, and
the other seven children were the beneficiaries under the will.
According to this account rendered, one-half of the sum for which
the lots had been sold to Latta went to George W., and the other
half to John Hopkins' estate, and the half of John Hopkins was
divided by seven, giving the share of each of the children as
$503.29. October 11, 1873, Mrs. Early was paid her share, and on
the same day signed the following receipt:
"Rec'd of Geo. W. & J. S. Hopkins, executors and
administrators of Jno. Hopkins' estate, five hundred & three
29-100 dolls., in full of all demands due me from the said estate
to date."
"$503.29. Washington, Oct. 11th, 1873."
November 29, 1873, Mrs. Lilburn, and December 24th, Mrs. Hall
and Mrs. Wailes, respectively signed similar receipts for the sum
of $503.29 each. George Washington Hopkins had
Page 143 U. S. 269
died intestate, and July 9, 1870, letters of administration had
been issued on his estate to Mary A. Hopkins. October 1, 1873, Mary
A. Hopkins, the administratrix, gave a similar receipt for George's
share of the proceeds, $503.29, December 2, 1873, William M. S.
signed the following receipt:
"Rec'd of Geo. W. & J. S. Hopkins, executors and
administrators on John Hopkins' estate, five hundred and three
29-100 dolls., in full of all demands due me from the said estate,
and also in full of any or all demands due me from the said parties
above-mentioned up to this date -- Dec. 2d 1873."
"Washington, D.C."
"$503.29."
George W. and John S. Hopkins have passed away, and therefore
cannot explain the reasons for their action in thus treating these
lots as belonging to the co-partnership, but they were conversant
with the facts, and must be regarded as having acted
understandingly upon that basis. The square was used by the
partnership for partnership purposes, and it is not a violent
presumption that these lots were purchased with partnership funds.
The question on this branch of the case is whether, by bill filed
fifteen years after Mix and his wife gave their deed and eleven
years after the distribution just stated, the heirs of the trustees
ought to be held to account for the other half of the proceeds upon
the ground that the lots belonged to John Hopkins individually. In
our judgment, such a conclusion is inadmissible under the
circumstances.
The bill averred that the conveyance of William M. S. and his
wife to his brother John S., executed June 20, 1860, and recorded
July 7, 1860, was fraudulent and void, and procured in pursuance of
a general scheme of fraud on the part of the trustees. William was
not a party to the suit, but by the decree the deed seems to have
been ignored, and Sarah E. Hopkins, William's wife, treated as
assignee of his share. It is admitted that William signed this deed
and delivered it to his brother, and we think it cannot be properly
claimed that he was at the time mentally incompetent to execute it.
It is
Page 143 U. S. 270
true, he was in the government hospital from August 13, 1864, to
September 2, 1864, and from January 19 to March 23, 1865, and also
from September 19, 1868, to August 6, 1870, for dipsomania, the
last time being after he had received a blow on the head; but there
is much evidence that he was a man of intelligence and business
capacity when not under the influence of liquor, and if there were
any mental failure after September, 1868, that is not material
here. He was called as a witness on behalf of complainants, and
testified that his brother persuaded him to sign the deed, that he
did not acknowledge it, that he signed his wife's name to it at the
suggestion of his brother, and that she never knew about it.
January 28, 1864, William conveyed to Christopher Ingle, for the
benefit of his wife, all his interest in his father's estate, and
the deed was recorded January 29, 1864. Ingle was not a party to
the suit. On the margin of the book in which this deed was recorded
is an entry, according to the custom in the recorder's office, of
the effect that the original deed was delivered to the beneficiary
in May, 1864.
Counsel on both sides refer to certain correspondence between
John S. and Sarah E. Hopkins in the summer of 1873, in which both
these deeds are mentioned. As to that, to John S., Mrs. Hopkins
wrote:
"What William did I do not know, and if I signed it, I signed it
not knowing what it was -- which fault was not yours -- for the
deed of trust in which William gives me the portion of his father's
estate is duly recorded, and was January 29, 1864."
In her testimony in chief, Mrs. Hopkins denied that she had
joined her husband in a deed to John S., and asserted that she had
never signed but one deed, which was a deed to sell a small house,
in 1858 or 1859. She remembered that one of the magistrates who
took the acknowledgment was named Donn. It appeared that the
acknowledgment of the deed of 1860 to John S. was made before two
magistrates, one of whom was Mr. Donn, while he was not one of the
two justices of the peace before whom the deed of 1859 was
acknowledged, and Mrs. Hopkins some days afterwards explained the
reference to Mr. Donn as arising from a remark of counsel. However,
upon cross-examination, she
Page 143 U. S. 271
testified that she was afraid she would not recommend anyone to
trust her memory twenty years back, and that, as to the deed, she
still did not recollect anything but the one deed, and yet she
might have signed another. She had also completely forgotten her
knowledge of the existence of the deed of January 28, 1864, to Mr.
Ingle, to which she had referred in her letter of 1873, and which
the record in the recorder's office showed had been delivered to
the beneficiary in May, 1864.
We understand it to be conceded that when the evidence was taken
in this suit, both of the justices of the peace before whom the
deed of 1860 was acknowledged, as is admitted by the bill, were
dead, and, in the absence of evidence of fraud or collusion on
their part, their certificate ought to prevail. Mrs. Hammond stated
in her answer upon information and belief that this deed of 1860,
though absolute on its face, was availed of by her father solely as
a security and for the protection of his brother, the said William
M. S., who was addicted to intoxication, and that the full share of
William M. S. in the estate of his father was duly accounted for
and paid to him. In the settlement of March 28, 1865, William's
share, namely, $2,667.60, was receipted for by John S., the latter
presumably claiming the power to do this by virtue of William's
deed to him. On March 29, 1865, William was credited with $2,667.60
in an account opened before that time in a book kept by George W.
and John S., and that account showed that there was paid to him, on
or before June 5, 1865, in installments, the aggregate sum of
$2,667.60, after deducting $1,641.01, made up of $1,579.49 due John
S. and $61.52 for bill of furniture. On December 2, 1873, William
receipted for $503.29, his share of the purchase money from the Mix
lots, and in full of any or all demands to date. This amount is
shown on the same account, and is made up of nine items of cash
paid him, commencing with January 6, 1872, and closing with
December 2, 1873. This was not a bill to set aside the deed, nor is
it framed in the aspect of repudiating the payments to William as
made in fraud of his wife. We do not care to comment upon the
testimony of William in this
Page 143 U. S. 272
connection. We think complainants failed to make out their
charges of fraud, and that apart from that, the defense of laches
interposes an insuperable bar to contention upon this subject.
We perceive no adequate reason given for the delay in the attack
upon this deed, nor in respect of the proceeds of the Mix lots, nor
in the assault upon the account stated and settled in the orphans'
court in 1865. We fail to find any ground assigned for the
ignorance of plaintiffs of the proceedings upon the executors'
accounting, or why they received and receipted for their
distributive shares as determined thereby. Indeed, all the matters
relied on to justify the imputation of fraud were known or could
have been known to the plaintiffs just as well at the time when
they transpired as when the bill was filed. No facts are shown of
which plaintiffs were ignorant. No discovery was made which might
not have been made during the nineteen years. It is true that the
children of John Hopkins had confidence in their brother and uncle,
but, as for nearly twenty years they apparently saw no reason for
believing that that confidence had been misplaced, it would require
much more convincing evidence than this record affords to justify
the conclusion that they had been in fact the victims of
imposition. Indeed we do not understand the testimony of the
survivors as affirmatively questioning the integrity of the
trustees.
Mr. Justice Merrick, in his well considered opinion in this
case, after saying that
"the question then reduces itself to the naked question whether
the doctrine of a court of chancery, with regard to the necessity
of the repose of society, is not sufficient to prevent the opening
of this inquiry under these circumstances,"
proceeds to examine the two classes of cases to which the
doctrine is applied -- that of constructive fraud in the dealing by
a trustee with the subject of the trust through an intervening
person for the acquisition of the legal title and that of actual
fraud and concealment -- and points out the greater liberality in
respect of lapse of time in the latter class than in the former.
Where there is no fraud in fact, he says:
Page 143 U. S. 273
"If the party, in view of all the facts of the case, has slept
upon his rights, a court of chancery will not intervene, and in
measuring laches, there are two extremely important considerations
always taken notice of by a court of chancery which limit and
narrow the measure of time which otherwise would be liberal. Where
there has been no change of circumstances between the parties and
no change with reference to the condition and value of the
property, a court of chancery will run very nearly, if not quite,
up to the measure of the statute of limitations as applied in
analogous cases in a court of law. But where there has been a
change of circumstances with reference to the parties and the
property, and still more where death has intervened, so that the
mouth of one party is closed, and those who represent his interests
are not in a predicament to avail of the explanations which he
might have made, out of the charities of the law and in
consideration of the fact that fraud is never to be presumed, but
must always be proved, and proved clearly, the courts limit very
much in such cases the measure of time within which they will grant
relief, because the presumption comes in aid of the dead man that
he has gone to his account with a clear conscience. In this case,
one of these trustees, the survivor, remained in active life and
energy for nineteen years after the alleged technical fraud is
supposed to have been committed. There was no challenge during that
time of the transaction. Had there been, the law has a right to
presume, and does presume, that he would have had opportunities of
explaining these transactions and vindicating himself, which
opportunities are now lost. The counter-presumption now arises that
there has been delay with a view to have the undue advantage of
evidence on one side no longer capable of explanation on the
other."
"This is this case, stripped of all the surroundings with
reference to it, stripped of all the imputations and suspicions
piled one upon another with artful ingenuity arising out of a
number of minute circumstances, no one of which has in itself,
apart from others any significance. The effort has been made, I
say, under such circumstances, to impute fraud."
"But it is very remarkable that while the circumstances, of
Page 143 U. S. 274
themselves, do not carry any persuasive evidence of fraud to the
trained judicial mind, the parties themselves who are impeaching
the transaction, the surviving children, who had knowledge of what
occurred, in their evidence in this cause, and under all the
temptations to strain or overtop their testimony, do not today
impute any actual malversation to either of the trustees. The
utmost they say is that if they have rights, they want them. They
never did call in question, in the lifetime of the trustees, the
integrity of the trustees. They do not affirmatively call it in
question today. They simply say at the uttermost that if they have
rights, as has been suggested to them, in regard to the
possibilities of a legal administration of a trust in the manner in
which I have stated, they want those rights. Now under all these
circumstances, with all this lapse of time, with all the knowledge
they had then and there while the transactions were fresh, with all
the temptations now in their own minds to pervert the facts, there
is no one of those who are at all reliable in testimony -- and I do
not include W. M. S. Hopkins in this remark -- who ventures to
impute actual fraud to the trustees whose estates they are now
calling in question."
We concur in these views. In all cases where actual fraud is not
made out but the imputation rests upon conjecture, where the seal
of death has closed the lips of those whose character is involved,
and lapse of time has impaired the recollection of transactions and
obscured their details, the welfare of society demands the rigid
enforcement of the rule of diligence. The hourglass must supply the
ravages of the scythe, and those who have slept upon their rights
must be remitted to the repose from which they should not have been
aroused.
The decree is reversed, and the cause remanded, with
directions to dismiss the bill.
