Slike stranica


tion of fraudulent intent, in all cases aris- one at bar as to make the language quoted ing under the provisions of this act, shall be as applicable here as in the case considered deemed a question of fact.' It is enough to by the learned judge who wrote that opinion. say that the rights of the appellees do not in the case at bar the facts alleged show depend upon the statute of frauds.

* fraud as conclusively as those found by the As to the recognition in this state of con- court in the case from which we have quotstructive frauds, that is, cases where actual ed, and, in addition thereto, the complaint fraud was not intended, but, from the con- in this case contains general charges of duct of the parties, some rule of public pol- fraud in the procurement of the judgment. icy has been violated or some advantage has While, under the foregoing decision, such been gained by reason of some special confi- allegations may not be essential where the dential or fiduciary relation, the cases are relation of parent and infant children is numerous. Where, in a pleading or special shown, they clearly indicate the theory of finding, fraud must be made to appear, except the pleading, and do not detract from its there be some statute or special rule to the sufficiency. contrary, the facts constituting the fraud The essential principle which differentiates must be stated, and mere epithets are not the class of cases to which the one at bar required, nor are they available.

* belongs from many cases where fraud is alIt would seem a contradiction of terms to leged in the procurement of a judgment, is say that constructive fraud must be found as the relation of trust and confidence which a fact, when in relation to certain well-rec- the law recognizes as existing between parent ognized transactions, it is fraud ipso jure. and infant children, with the resulting duty Nor is it less a contradiction as to actual of the parent not to so deal with his helpfraud to say that it exists as a fact when it less and dependent infant children as to obonly exists by the application of legal or tain any advantage or profit on account of

their relation to, and dependence upon, him. equitable rules to the facts.

In the absence of the facts making it manifest, the Where such relation is shown to exist, and it law will not indulge the presumption that further appears that the parent, or one ocfraud exists. On the contrary, presumptions the other one in such a way as to obtain a

cupying a superior position, has dealt with are in favor of honesty and fair dealing. substantial benefit or advantage in any

a But when facts appear the legal test is ap-business transaction, it has been held that plied, and the question is determined. The the presumption of undue influence arises. remaining question is as to the sufficiency Keys v. McDowell, 100 N. E. 385–387. of the facts found to raise the inference of fraud. We have no doubt of their sufficiency. said: “Where the relation of trust and con

$ , is The father of children-mere babes—having fidence exists between two parties, whether the custody of their persons, and being their it be actual or in contemplation of law, it natural guardian, both as to person and prop-is the duty of the person in whom confidence erty, owed to them the highest concern for is reposed to disclose to the other all the their welfare. Above all interests, it was material facts which are within his knowlhis duty to see that they were not deprived edge, and, knowing the other party to be cf their rights by his own wrongful conduct. ignorant of those facts, he is guilty of conHe owed a duty also to the court in which cealment if he does not disclose them, and is the cause was pending, and that was to cre- guilty of fraud in both law and equity. ate no misapprehension in the mind of the court as to the bona fides and adversary char-relations duty requires and the law exacts

Between parties occupying these acter of the cause. The facts found dis- the utmost good faith and fair dealing, and close a violation of all these duties. As to omission to disclose facts known to one and the merit of his claim of title, little or no not to the other is in law concealment.” defense is made in this court, and it appears

The question of fraud in the procurement that he not only secured active support for his of a judgment by a parent against his infant own side of the case, but secured the partic-child, wholly under his control, is determined ipancy of a guardian ad litem, appointed and from principles which are identical with serving for the purpose of accommodating the those which are applicable to cases where plaintiff in the procurement of the order and a parent obtains an undue advantage in a decree he desired in said cause.' He was business transaction with his infant children thus enabled to control both sides of the out of court. In the case at bar it appears case and give to it the appearance o bona from the pleading that the relations of parfides as an adversary proceeding, while it was ent and children existed; that the children all for his accommodation, to his advantage were minors not under guardianship, and and to the detriment of most helpless infants. wholly under the control and influence of Such control, with such results, amounts to the parent; thai they were wholly ignorant fraud. Burnett v. Milnes, 148 Ind. 230 [46 of their rights and the nature of the transN. E. 464], and cases there cited."

action; that the parent failed to inform We have quoted at length from the fore them thereof and wrongfully obtained a sulgoing decision because the facts and issues stantial advantage by procuring a judgment



both sides of the case; that by his manipula- , and child or any similar relation of trust tion the guardian ad litem was appointed and confidence existed between the plaintiff and the case so managed that no considera- and the minor defendant in that case. In tion was given by him to the rights of the the second place, it is not shown that both infant defendants, and he was not present sides of the case were manipulated and conwhen the judgment was rendered. For such trolled by the plaintiff. The case turns upon a state of facts the conclusion is inevitable the proposition that a sheriff had made a that the court was so deceived, misled, or false return to the summons, which was in thrown off his guard that a judgment was all things regular upon its face, but it does secured that could not have been obtained not appear that the plaintiff was in any except by such deceptive and fraudulent sense responsible for or a party to the makmethods. Such manipulation is misleading ing of such false return. The paragraph was both as to the good faith of the parent and held insufficient to show fraud in the prothe adversary character of the proceeding. curement of the judgment. The opinion In fact, the latter and essential element does shows that the theory was that the court not exist except in naked form which does had been misled by the false return of the not meet the requirements of the law. The sheriff, for which the plaintiff was not relaw is jealous of the rights of infants and sponsible, and that the court has a right to other dependents. It presumes that parents rely and act upon the return of the sheriff. who owe both the natural and legal duty of The opinion cites Cotterell v. Koon, and in guarding and protecting the persons and no way criticises it. The two decisions are property of their children will faithfully not in conflict. discharge such duty. While the rules of law The conclusion we have reached is that are the same as to all persons in like situa- each paragraph of the complaint is sufficient, tion, the law takes cognizance of the help- and that the demurrers should have been less and defenseless situation of minors overruled, since they show that the judgwhen their parents turn against them, be- ment was procured by fraud and is void, it tray the trust reposed in them, and use it affords no protection to an innocent purchasas a means of obtaining an advantage they er for value. From one viewpoint this seems could not secure without the abuse of the to be a harsh rule, but, on the other hand, confidence and dependence of their children. it is an equally hard proposition to permit Where it is made to appear that the relation helpless and dependent minor children to be of parent and child has been abused to the defrauded out of property. advantage of the parent, and that such abuse [7] Where the record discloses, as in this has enabled the parent to procure a judgment case, that a father has procured a judgment against his children that otherwise could against his infant children without any presnot have been obtained, the law declares the entation of their meritorious defense, which judgment so procured void, and recognizes defense is apparent from the record itself, any suit that seeks to relieve the children the facts. so appearing constitute a warning from the effects thereof on the ground of to any purchaser, which should cause him fraud in its procurement as a direct, and to investigate and learn to his satisfaction not a collateral, attack upon the judgment. that the judgment showing such relationship

In the Cotterell Case, supra, it is express- and apparent injustice has not been obtained ly stated that such control, with such result, by any fraud or deception. amounts to fraud. And in the case of Bur

The judgment is reversed, with instrucnett v. Milnes, 148 Ind. 230, at page 234, 46 tions to the lower court to overrule the deN. E. 464, at page 465, wherein concealment murrer to each paragraph of the complaint of facts from infant defendants was shown, and for further proceedings not inconsistent the court said: "The facts here stated make with this opinion. a case of fraud upon the court and upon the rights of the infant defgndants.


It is shown by the allegabions of the complaint SHEA, and IBACH, JJ., concur. that appellant either directly or indirectly managed and controlled both sides of the

(214 Mass. 525) case, and that the judge was imposed upon. Under such circumstances, a final judgment, WHITMORE v. INTERNATIONAL FRUIT even in a criminal case, has been declared

& SUGAR CO. et al. void.”

(Supreme Judicial Court of Massachusetts. The appellee cites the case of Miederich v.

Suffolk. May 23, 1913.) Lowenstein, supra, as decisive of the ques- 1. CORPORATIONS (8 473*) INSOLVENCY tion that the judgment quieting the title


PAIRMENT OF SECURITY. against appellants is an absolute bar to any

A bill alleged that defendant corporation interest they may have had in the land in con- was insolvent; that it had issued bonds, part troversy. The case may be readily distin- of which had been sold, by means of frauduguished from Cotterell v. Koon, supra, and lent representations; that it still held part of


the bonds, and the property mortgaged was not other similar decisions. In the first place, sufficient 'to pay those already sold; that there it does not appear that the relation of parent' had been default in interest on the bonds sold

*For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep'r Indexos

which continued, and that the individual de does not exceed in value $50,000. There fendants were officers of the corporation and have been issued bonds secured by said had improvidently at least endeavored to sell further bonds, which would increase the bond- | mortgage to the par value of $100,000, of ed indebtedness of the company and decrease which amount bonds to the par value of the security of those already sold ; that notwith- $250,000 are still the property of the Fruit standing the corporation's insolvency, acting Company; but bonds to a par value in exthrough the individual defendants, it had sought to sell the most valuable part of its property cess of $75,000 have been transferred to cerand to wrongfuliy take such part from the se- tain of the defendants as trustees of the Cucurity of the mortgage; and that the trurtee ban-American Trust, of which amount bonds had declined to proceed for the bondholders' to a par value in excess of $40,000 are still protection. Held, that the bill was maintainable, whether the principal of the bonds was due in the possession of the persons named as or not, or whether the coupons were paid or trustees, either individually or as such trusunpaid, in order to prevent the impairment of tees, and 'a large number of the bonds have the value of the bondholders' security. [Ed. Note. For other cases. see Corporations, fide purchasers through false and fraudulent

been sold by the Fruit Company to bona . Dig. $; 473.*]

misrepresentations, set forth in detail, some 2. EQUITY (S 150*) BILL - MULTIFARIOUS- of which were clearly statements as to existNESS.

ing facts. Where all the defendants to a bondholder's

"2. The individual defendants caused the bill to restrain impairment of the security, Fruit Company to be organized as a frauduwere materially concerned, some in one way and some in another, with the matter of which lent scheme for the purpose of transferring plaintiff complained, the bill was not multifari- to it the property included in the mortgage ous because, to a certain extent, the particular at a grossly excessive price, and of selling acts of one of the defendants were distinct from said bonds and the stock of the corporation those of others; all, however, tending to the said bonds and the stock of the corporation same general result injurious to complainant. by means of false and fraudulent represen

[Ed. Note.-For other cases, see Equity, Cent. tations, all as set forth in paragraphs 3, 4, Dig. $$ 342, 371-379; Dec. Dig. $ 150.*] and 5 of the amended bill. Recitals of sub3. EQUITY (8 232*)-BILL-DEMURRER.

sequent action are made in said paragraphs. Where a demurrer to a bill could not have It seems that at the most these allegations been sustained as a whole, it was properly overruled, though some of the grounds were well and the recitals referred to are either pretaken.

liminary to the main part of the bill or [Ed. Note. For other cases, see Equity, Cent matters of inducement and not sufficient for Dig. § 508; Dec. Dig. § 232.*]

the granting of relief. Report from Superior Court, Suffolk Coun- "3. The plaintiffs, relying on said reprety; Charles F. Jenney, Judge.

sentations and believing them to be true, Bill by Charles 0. Whitmore against the purchased for a valuable consideration, and International Fruit & Sugar Company and still own, certain of the bonds. others. A demurrer to the bill was overrul- "4. The individual defendants controlling ed, and the case reported to the Supreme the Fruit Company have caused it to transJudicial Court. Affirmed.

fer to themselves, individually or as trustees Wm. D. Turner and Stephen S. Fitz Ger- of the Cuban-American trust, the bonds in ald, both of Boston, for plaintiff. Young, excess of the par value of $75,000 as hereinHill, Ludden & Marks, of Boston, for defend before referred to without adequate considants.

eration, and these transfers are alleged to

be a fraud on the bona fide holders. These HAMMOND, J. The demurrers were over- allegations are vague. But the individual ruled by a justice of the superior court, and defendants stand in a confidential or trust the case is before us upon a report made by relation to the corporation. See paragraph him under R. L. C. 159, § 27. If the order 1 of the bill. These bonds in excess of $40,overruling the demurrers was erroneous, the 000 in par value are still in the possession bill is to be dismissed with costs, unless fur- of the defendants, who are trustees of the ther amendment shall be allowed. If the Cuban-American trust, individually or as order was right, the defendants are to an- such trustees. swer over.

“5. The individual defendants, as officers [1] We adopt as a sufficiently full and ac-of the Fruit Company, have misappropriated curate summary of the bill the one given by money and property of that company and the justice of the superior court in his have fraudulently and for their own profit "Memorandum of Decision,” which is in the caused unfair and inequitable contracts to following language:

be entered into between it and three of their “The bill as amended, in substance alleges: number as trustees for said Cuban-American

"1. The entire property, 'for the most part Trust Company. for the sale of the bonds of barren or covered with woods, of the Inter- the company, which must be construed as national Fruit & Sugar Company, herein- including the bonds of the par value of $250,after called the Fruit Company, is included 000 still owned by the Fruit Company, and it in a mortgage to the International Trust is alleged that said unfair and inequitable Company, hereinafter called the Trustee, and contracts have been secured by means of false and fraudulent representations. Many | lar acts of one are distinct from the particuof these allegations are also somewhat in- lar acts of others, all •tending to the same definite.

general result injurious to the plaintiff. See "6. The company is alleged to be insolvent, Parker v. Simpson, 180 Mass. 334, 341, 62 N. and on July 1, 1911, defaulted on the pay- E. 401; Davis v. New England Railway Pubment of the interest due on some of its lishing Co., 203 Mass. 470, 89 N. E. 565, 25 bonds, and that default still continues as to L. R. A. (N. S.) 1024, 133 Am. St. Rep. 318. some bonds, including the bonds owned by [3] The demurrers therefore, could not the plaintiff Cadwell. The trustee has no- have been sustained as a whole, and hence tice of said default and has been requested were rightly overruled; and that would be by the plaintiffs to commence proceedings for so even if they were sustainable as to some the foreclosure of the mortgage, but refuses of the grounds alleged. so to do. The provisions of the mortgage as It follows that by the terms of the report to foreclosure are set forth in paragraphs the defendants are to "answer over"; and 11 and 12 of the amended bill.

it is 7. The individual defendants fraudulently So ordered. plan to cause the Fruit Company to transfer 5000 acres of its lands, including its only

(214 Mass. 475) valuable and income producing property, without fair or adequate consideration,

SHAW v. OGDEN. which if done by this insolvent corporation

(Supreme Judicial Court of Massachusetts. will seriously impair the security of its

Norfolk. May 22, 1913.) bonds. The trustee, it is alleged, intends to release this land from the mortgage, al- 1. NEGLIGENCE (8 32*)—DANGEROUS PREMISES

- LIABILITY OF OWNER. though it knows of the default on the inter

One impliedly inviting another to use a est of the bonds, without payment of the private driveway owes the duty of using reasonamount required by the mortgage.

able care to keep the way in a safe condition for "8. The mortgaged property is not suffi. use, or at least give warning of any dangers

attendant on its use which are not known to cient to pay in full the bonds now in the the latter, and which the former knows, or in hands of bona fide bondholders for value. the exercise of reasonable care ought to know.

"To summarize in part: An insolvent cor- [Ed. Note.-For other cases, see Negligence, poration has issued mortgage bonds, a part Cent. Dig. 88 42–44; Dec. Dig. $ 32.*] of which have been sold by means of fraud. 2. NEGLIGENCE (8 50*)-DANGEROUS PREMISES It still holds part of the bonds. The mort- - LIABILITY OF OWNER. gaged property is not sufficient to pay the A driver, using a private way on the imbonds already sold. There has been a de- plied invitation of the owner, was knocked from

his wagon by an overhanging branch. The way fault in interest on the part of the bonds, was sufficiently wide, and there was only a narwhich default still continues. The individual row space, near the outside edge of the gutter, defendants, the officers of said corporation, where the branch was near enough to the surare improvidently at least endeavoring to wagon driven by the driver.

face of the ground to reach the top of the

. He had been using sell bonds which will increase the amount the driveway almost daily for several months, of the bonded indebtedness and decrease the driving immediately under the branch.



owner of the driveway knew that fact. security for the bonds already sold. Not

that the owner was not guilty of actual negliwithstanding its insolvency, the corporation, gence in allowing the branch to overhang the acting through the individual defendants, driveway, or in not warning the driver of the seeks to sell the most valuable part of its danger arising therefrom. property and to wrongfully take said part

[Ed. Note.-For other cases, see Negligence, out from the security of the mortgage. The Cent. Dig. $$ 62, 63; Dec. Dig. $ 50.*] trustee declines to proceed for the protec- Exceptions from Superior Court, Norfolk tion of the bondholders."

County; John C. Crosby, Judge. The relief prayed for is substantially the Action by Mary E. Shaw, administratrix, foreclosure of the mortgage with appropriate against Lizbeth D. Ogden. There was a proceedings to prevent the impairment of the verdict for plaintiff, and defendant brings value of the security of the bondholders ei- exceptions. Sustained, and judgment enterther by fraudulent issue of additional bonds ed in her favor. or by an improvident and unwarrantable sale

Louis s! Thierry and John H. Appleton, of the land covered by the mortgage. There can be no doubt that at least to prevent such both of Boston, for plaintiff. John Lowell impairment the bill is maintainable whether and Jas. A. Lowell, both of Boston, for de

fendant. the principal be due or not, or whether the coupons be paid or unpaid.

[2] The bill is not multifarious. All the de- SHELDON, J. The case was submitted to fendants were materially concerned, some in the jury under instructions which do not one way, some in another, with the matter appear to have been excepted to and which of which the plaintiff complains, and it mat- we now must take to have been full and acters not that to a certain extent the particu- curate, unless the defendant was entitled to

*For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key-No. Series & Rep'r Indexes

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have a verdict ordered in her favor. That she was not negligent either in maintaining is the only point which we have to consider. the branch or in failing to warn him of a

[1] The jury had a right to find that the possible danger therefrom. If she had given plaintiff's intestate, while in the exercise of the same implied invitation to one who was a due care, was knocked from the seat of his mere stranger to the locality, or to one wagon upon the defendant's driveway by the whose team reached above the height of the overhanging branch of a tree. He had come branch, as in Embler V. Wallkill, 57 Hun, upon the premises and was using the drive- 384, 10 N. Y. Supp. 797, a different situation way of the defendant at her implied invita- would have been presented. tion. She owed to him the duty of using A verdict for the defendant should have reasonable care to keep the driveway in a been ordered in accordance with her request; safe condition for him to use, or at least of her exceptions must be sustained; and under warning him against any dangers attendant St. 1909, c. 236, judgment must be entered in upon its use which were not known to him her favor. and which either were known or in the ex- So ordered. ercise of reasonable care ought to have been known to her. Elliott v. Pray, 10 Allen, 378, 87. Am. Dec. 653; Carleton v. Franconia Iron

(214 Mass. 573) & Steel Co., 99 Mass. 216; Currier v. Boston JAGLENASKI V. ANDERSEN COAL MINMusic Hall, 135 Mass. 414; Curtis v. Kiley,

ING CO. 153 Mass. 123, 26 N. E. 421; Garfield & Proc

(Supreme Judicial Court of Massachusetts. tor Coal Co. v. Rockport-Rockland Lime Co.,

Suffolk. May 23, 1913.) 184 Mass. 60, 67 N. E. 863, 61 L. R. A. 946, 700 Am. St. Rep. 543; Hamilton v. Taylor, 1. TRIAL ($ 234*)-INSTRUCTIONS-COMMENTS 195 Mass. 68, 80 N. E. 592; Marston v. Rey

ON EVIDENCE. nolds, 211 Mass. 590, 98 N. E. 601; Chapman the issue was whether he was injured by a

Where, in an employé's action for injuries, v. Rothwell, E., B. & E. 168; Indermaur v. fence falling on him, as claimed by him, or by Dame, L. R. 1 O. P. 274, and 2 C. P. 311; falling off a ladder resting on a hopper while Marney v. Scott, [1899] 1 Q. B. 986. For the engaged in the repair of the hopper, and where purposes of the case at bar we need not at- by plaintiff that he was injured by falling

witnesses for defendant testified to statements tempt to distinguish between these different from a hopper," it was error to charge that it duties. See Clark & Lindell's Law of Torts was defendant's claim that plaintiff said the ac

" (5th Ed.) 498, 499; Salomon on Torts (3d cident occurred while he was working on the

" , Ed.) 361, 362; and the note to Indermaur v. this meant, that in common language it would Dame, in Bohlen's Cases on Torts, p. 267. be said that a man was working on a building

[2] The difficult question is whether there if doing some work towards its erection or rewas any evidence of negligence on the part pair, although not actually upon the building

it of the defendant in allowing the branch meant any more than that he was helping the to overhang the driveway or in not warning man who was putting boards on the hopper, the intestate of the danger that might arise since it did not correctly state defendant's evi

dence. therefrom. There was no defect in the driveway itself. It was sufficiently wide and well Dig. $8 534-538, 566; Dec. Dig. $ 234.*]

[Ed. Note. For other cases, see Trial, Cent. wrought. There was only a narrow space near the outside edge of the gutter where 2. TRIAL ($ 296*) – INSTRUCTIONS — CURE BY

OTHER INSTRUCTIONS. the branch was near enough to the surface

Such error was not cured by a subsequent of the ground to reach the top of the wagon instruction that the jury were to act upon their driven by the intestate. It is no unusual own understanding of the testimony, and not thing to find trees very near to the edge of a

upon that of the judge. private driveway and overhanging it as this

[Ed. Note.-For other cases, see Trial, Cent. one did. The tree was a large one; the over

Dig. 88 705–713, 715, 716, 718; Dec. Dig. 8

296.*] hanging branch was "a big, stout limb,” as one of the plaintiff's witnesses described it. 3. WITNESSES ($ 328*)—IMPEACHMENT. Both the tree and the branch were conspicu- who was a foreigner and as to whose ability to

In an action for injuries to an employé, ous objects, not only plain to be seen, but understand or speak the English language the scarcely capable of not being seen by any one evidence was conflicting, where a stenographer using the driveway. The intestate had been testified for defendant as to a statement taken

The intestate had been by her from plaintiff shortly after the accident, using the driveway, with the tree and the evidence as to her compensation was incompebranch in the same position, almost daily for tent; it having no tendency to show whether or some eight months before the happening of not she could or did rightly understand plain

tiff. the accident, driving immediately under the branch, as the defendant knew. She had a

[Ed. Note.-For other cases, see Witnesses, right to believe that he was fully acquainted Cent. Dig. 1103; Dec. Dig. $ 328.*] with the situation and with the risk of going 4. TRIAL (

S206*)—INSTRUCTIONS-APPLICAto or near to the very edge of the gutter at

TION OF LAW TO FACTS. this point. Under these circumstances we defendant had no witnesses who saw the acci

In an employé's action for injuries, where are of opinion that as to him at any rate dent, and was compelled to rely on contradicto

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