Summary
In Futrill v. Futrill, 58 N.C. 61, the court declare it to be "a great principle of public policy, that without any proof of actual fraud, such conveyances obtained by one whose position gave him power and influence over the other, should not stand at all if entirely voluntary, or should stand only as a security for what was actually paid or advanced upon them, where there was a partial consideration."
Summary of this case from Tillery v. WrennOpinion
(December Term, 1859.)
It is an established doctrine, founded on a great principle of public policy, that a conveyance obtained by one whose position gave him power and influence over the grantor, without any proof of fraud, shall not stand at all if without consideration; and that where there has been a partial or inadequate consideration, it shall stand only as a security for the sum paid or advanced.
APPEAL from the Court of Equity of NORTHAMPTON, Dick, J.
Batchelor for plaintiff. (64)
B. F. Moore, Barnes, and Fowle for defendant.
Motion to dissolve an injunction, heard upon the bill and answer. The plaintiff was an old man, weak-minded, and intemperate. The defendant was his relation and near neighbor. The latter had always been upon friendly terms with him, but upon 23 March, 1857, the (62) plaintiff made a conveyance of all the property he owned, consisting of the tract of land on which he dwelt, three slaves, horses, hogs, furniture, debts due to him, etc. The conveyance was to take effect as to the land at the death of the grantor. The consideration expressed in the said deed was the "paying and liquidating a certain just debt of $2,500 which the said Elijah owes the said Littleberry Futrill, and for and in consideration of a decent and good support to the wife of the said Elijah as long as she may be the widow of the said Elijah Futrill." The bill then charges that from and after the time this deed was executed, the defendant, who was an intelligent, active man of business, took the management and entire control of the plaintiff's affairs, worked the land, or had it worked, and received the crops; took charge of the slaves, Lawson and Moses, who were mechanics, and kept them employed at wages, and received the hires and profits; sold some of the property and received the money. The plaintiff says in his bill that he was greatly imposed upon and over-reached in the execution of this deed, and that he was for some time ignorant of its contents, but that it, with other facts and circumstances, formed the occasion of giving the defendant a paramount influence and ascendancy in all his affairs and of subjecting the plaintiff entirely to his will and control. That this subjection on his part continued from the said 23 March, 1857, until the latter part of 1858. That about 7 June, in the latter year, the defendant produced to him an account for the previous year's dealing, which amounted to the sum of $952.83; that being feeble in mind, disqualified by the use of ardent spirits, and overborne by the influence which the defendant had acquired over him by his position as his agent and manager, without canvassing or understanding the grounds of such account, he gave his bond for the same; that he has since been made acquainted with the terms and particulars of the account, and he finds the same extravagant and unjust; one charge in this account is for 389 3/4 gallons of whiskey at $1 a gallon, 8 1/4 gallons of rum at $1 per gallon, and several bottles of French brandy, amounting to (63) $6 — amounting in all, for spirituous liquors sold, to $404.25, from 24 March to 31 December, and that many credits which the plaintiff enumerates were omitted; that such dealing, even if it is in part true, was faithless and unjust, but that as to the great bulk of it he avers it to be without foundation or truth, and at any rate he ought not to be compelled to pay the bond predicated thereon, or any part of it, until the whole of their dealings can be investigated before this court. The bill states that suit has been brought and a judgment at law had on the bond in question, and the defendant threatens to take out execution against him to enforce the payment thereof. The prayer is that the deed for the land and other property may be declared void and be delivered up for cancellation; that an injunction be issued to restrain the defendant from collecting the recovery at law, and for general relief. The injunction issued.
The defendant admits that he took a deed from the plaintiff for the property mentioned, and that he took the chief management of his affairs from the date of the deed to the making of his affairs from the date of the deed to the making of the bond sued on at law, and that he is the relation of the plaintiff and that a very friendly and confidential feeling existed between them; that the plaintiff was in bad health and addicted to the excessive habitual use of spirituous liquors; but he denies that he was ignorant of the contents of deed or bond or of the mode in which his affairs were conducted by this defendant, or that he was so weak-minded as not to be able to understand the nature of the transactions alluded to, or that there was any fraud, imposition or undue influence in obtaining either of the instruments complained of. He says he did furnish him with the spirituous liquor charged, but that the same was furnished that the plaintiff might sell the same, but that he drank up a good deal of it and gave away much.
Upon the coming in of the answer, the court ordered the injunction which had been issued in the case to be dissolved, and the plaintiff prayed and obtained an appeal.
The counsel on both sides have discussed the question whether the injunction in the present case is a common or a special one, according to the distinction taken between the two kinds in Capehart v. Mhoon, 45 N.C. 30, and other cases. This question we deem it unnecessary to decide, because if we assume it to be a common one, as contended by the counsel of the defendant, still there is an equity confessed in the answer upon which the injunction ought to be continued until the hearing.
It is charged in the bill and admitted in the answer that on 23 March, 1857, the plaintiff executed a deed to the defendant, whereby he conveyed to him all his land in fee simple and his personal estate absolutely, to take effect in possession after the death of the grantor upon the expressed consideration of a debt of $2,500 due him from the grantor, and also the support of the grantor's wife, should she become his widow, and as long as she should remain so. The bill charges, and the charge is admitted, that from and after that time the defendant, with the plaintiff's assent, undertook the entire management and control of his affairs and continued in it until some time after the bond in question was given, which was on 7 June, 1858.
Whatever relations may have existed between the parties prior to the execution of the deed above mentioned, it is very certain that after that transaction they assumed the very confidential one of principal and general manager and agent. The principal was an old, weak-minded and intemperate man, while the general manager and agent was his cousin, and was an intelligent, active business man. There was just such an intimate and confidential relation existing between the parties as that which in a similar case induced the great Lord Eldon to set aside a voluntary settlement obtained by a clergyman from a (65) widow whose affairs he had undertaken to manage. In that case ( Huguenin v. Basely, 14 Ves. Jr., 273) Lord Eldon was no doubt greatly aided by the argument of the celebrated Sir Samuel Romilly, an argument so masterly that Lord Cottenham, who heard it while he was at the bar, spoke of it in terms of the highest admiration while he was giving judgment, more than thirty years afterwards, in the somewhat similar case of Dent v. Burnett, 4 Myl. Cr., 269. The principle there decided has been applied, both in England and in this State, to all the various relations of life in which dominion may be exercised by one person over another. Harvey v. Mount, 8 Beavan, 437; Buffalow v. Buffalow, 22 N.C. 241; Mullins v. McCandless, 57 N.C. 425. In all the cases to which we have referred the conveyances were voluntary or were founded upon an inadequate consideration. It was not denied, however, that the grantors had a perfect right to make donations of their property or to enter into whatever contracts in relation to it they might think proper; but it was held upon a great principle of public policy that, without any proof of actual fraud, such conveyance obtained by one whose position gave him power and influence over the other should not stand at all if entirely voluntary, or should stand only as a security for what was actually paid or advanced upon them where there was a partial consideration.
We think the present case, so far as the bond is concerned, comes directly within the operation of this salutary rule. The bond was obtained from a confiding principal, by one who had undertaken the entire management and control of all his wordly affairs. The account, which was the consideration for it, may possibly be just and fair, though it is apparently so extravagant the principal has the right to have the question of its fairness investigated, and a court of chancery ought not to permit the bond to be enforced against him until that investigation has taken place. It is right and proper that the judgment which has been obtained at law — which is itself secured by the injunction bond — should stand as a security for whatever may be found to be justly due from the plaintiff to the defendant. The principle of public (66) policy to which we have already referred forbids that it shall have any other effect.
The order dissolving the injunction must be reversed, and this opinion must be certified to the court below, to the end that an order may be there made directing the injunction to be continued until the hearing of the cause.
It can hardly be necessary for us to say — though to prevent misapprehension we will say — that upon the hearing, all the questions which are presented by the pleadings will be open to investigation. Our present decision relates only to the question of the continuance of the injunction against the judgment obtained at law upon the bond.
PER CURIAM. Decree below reversed.
Cited: Franklin v. Ridenhour, post, 422; Futrill v. Futrill, 59 N.C. 337; Burroughs v. Jenkins, 62 N.C. 34; Hartley v. Estes, id., 169; Reed v. Exum, 84 N.C. 433; McLeod v. Bullard, id., 527; Tillery v. Wrenn, 86 N.C. 220; Costin v. McDowell, 107 N.C. 548; Bean v. R. R., id., 747; Bellamy v. Andrews, 151 N.C. 258; Pritchard v. Smith, 160 N.C. 84.