Frazier ex rel. Patterson v. Gelston , 35 Md. 298 ( 1872 )

Stewart, J.,

delivered the opinion of the Court.

The bill of complaint in this case substantially alleges the right of the complainant, a fSme covert, under a deed of trust and lease, in pursuance thereof, to receive the rent of her property to her exclusive use; that she had a trustee to attend to her interest in the matter, and that she had full authority to discharge her trustee, and the lessee and his representatives from all claims, on account thereof, by her own receipts.

It further avers, that during the year 1843, “an arrangement, contract or agreement, evidenced by a paper writing, signed by Cabot, her trustee; her husband John Frazier, and Benjamin M. Heighe, (who acted as her attorney and agent,) was entered into with Hugh Gelston, the lessee, (and now the respondent,) by which the annual rent was reduced $ 100 less than she was entitled to receive; that from that time to 1863, Gelston, under the agreement, paid less, by that amount, than she was entitled to; that she never executed any writing, consenting to such reduction; that she never acquiesced in the same, but, on the contrary, by the employment of a different attorney, Gelston was compelled, in 1863, to pay the full rent; that since 1862, she has repeatedly demanded payment of the balance of the rent.”

That this balance of rent, accruing year by year from 1843, when the said arrangement was made, to the year 1863, remains due and unpaid by the respondent.

The bill also alleges, that the respondent is in possession of writings and books of account in regard to the rent; that they contain evidence material to the trial of the cause.

The prayer of the bill, amongst other matters, is that the books of account and M'ritings may be produced by the respondent, and a,n account of the rents rendered by him, and for general relief. In substance, for a discovery as to the true condition of the dealings between the parties as to the rents.

Upon the ground of discovery, and the settlement of an account of the rents, and upon the theory of an implied trust between the parties relating thereto, the interference of the Court of Equity is invoked.

The bill contains no allegation of fraud against the respondent for the non-payment of the rent; nor does it allege that she was ignorant of the true character of her claim, as stated in the bill; nor want of capacity on her part to comprehend her rights, or any excuse for the failure to have asserted them more promptly.

' The respondent, by answer, insists that he has fully settled for all the rents due to which the complainant is entitled, according to his understanding; and denies that the case made by the complainant entitles her to any relief in a Court of Equity, and relies upon the staleness of the demand and limitation.

The bill, in its whole scope, merely claims to recover for the arrears of rent; and it does not appear, but that resort might have been had to legal proceedings for their collection, without the intervention of a Court of Equity, if reasonable diligence had been used by the complainant after she had knowledge of the reduction, made according to her own testimony.

It is well settled, as a general rule, that the complainant must recover upon the case made by the bill, secundum allegata et probata, and if that does not contain matters cognizable in equity, or the allegations are not sustained, the bill must be dismissed.

There is no averment of any fiduciary relation between the parties, nor do any of the allegations or proofs make out a case of fraud or collusion, by which a constructive trust between the parties can arise.

The law never presumes a trust but in case of absolute necessity, for if a Chancery Court presume a trust unnecessarily, or construe a trust by implication of law, any man may be construed out of his estate. Per Lord Nottingham, in Cook vs. Fountain, 3 Swanston, 592.

There is no doubt “ that in cases of fraud, constructive or actual, Courts of Equity have adopted principles broad and comprehensive, in the application of remedial justice, by converting the offending party into a trustee.” Hill on Trustees, 203; but their exercise depends upon the meritorious circumstances of each case.

Giving to this case the utmost latitude of construction, we do not understand it as establishing any implied trust.

Assuming that the Court has jurisdiction upon the ground of discovery, and an account of the rents, we do not think the complainant has made out a case entitling her to relief.

The complainant, with her husband, executed the covenant annexed to the lease, between Cabot her trustee, herself and Harris, bearing equal date with the lease and its acknowledgment, to wit: on the 13th of May, 1833.

All the rights under this case, with its appurtenances, in the year 1839, became vested in Hugh Gelston, the respondent. Gelston, regarding the covenant as a part of the lease, (to use the language of the Court of Appeals in the case of Gelston vs. Frazier, et al., 26 Md., 342,) and as succeeding to the rights of Harris, proceeded to obtain a title to the reversion, by tendering to Frazier and wife the sum stipulated in the covenant, and demanding a conveyance in fee for the property. This tender was made in 1843, and for a consideration, having been withdrawn, his relation as lessee continued to April, 1864, when he again proposed to extinguish the rent, by paying the sum specified in the covenant, and demanding a deed in fee-simple.

This being declined, unless paid in gold and silver, and Gelston insisting upon paying in legal tender notes, and having paid the rent to the 1st of May, 1864, he filed his bill for a specific performance of the covenant. The Court of Appeals decided that Gelston was not entitled to the relief he asked — the specific performance of the covenant between himself and the complainant and her husband, because her trustee, Cabot, was not a party thereto, which was necessary under the provisions of the deed of trust.

The Court, in delivering its opinion, uses the following language: “Applying this test to the contract or covenant entered into with Harris by Frazier and his wife, in relation to the fee-simple interest in the property, we find that the trustee is no party to it, and cannot be bound by it. It is an agreement by Mrs. Frazier (with the concurrence of her husband only,) to sell and dispose of the entire fee-simple estate in the property, to the lessee, his heirs or assigns, at any time during the continuance of the lease, upon his paying or tendering payment of the stipulated price; but it lacks the consent and approbation of the trustee.

The deed ¡ conferring the power of sale and disposition, requires it to be testified by his uniting with the wife, in the due execution of the instrument; unless the trustee consent to the sale, in the way specified in the deed, (in the absence of fraud) a Court cannot treat him as a party to it, and decree him to perform it, and his execution of the deed would be necessary to convey to the purchaser the fee which is legally in him. The agreement is, therefore, without one essential party to it- — the trustee.”

This covenant was made with Harris, and, according to the testimony in the cause, it was supposed by the parties interested in its performance, to have been a stipulation entitling the lessee to a conveyance of the fee, when its terms were complied with, until its character was legally defined by the decision of the Court of Appeals.

The complainant, Mrs. Frazier, was one of the parties to that instrument, before the rights of the original lessee had been assigned to Gelston, who it seems, relied upon it as a valid proceeding. To this extent, at least, she has been instrumental in affecting his conduct in regard to the rent, and such a proceeding involves a question of good faith and equitable estoppel.

Certainly, so far as there was any infringement of the provisions of the deed of trust, or a deviation from its strict requirements to her prejudice, the complainant can claim no superior equity to the respondent, and it would not be just, under such circumstances, to permit her to take advantage of her own wrong and have the settlement of the rent revised in order to give to her what she, after such a lapse of time, claims.

Although that covenant was not sufficient to bind her trustee in regard to the disposition of the property, yet the circumstance of its execution and annexation to the lease to Harris, when other parties are to be affected by her acts, must be considered by a Court of Equity in adjusting the rights of the parties according to the principles of justice and fair dealing, and ought to have its due weight upon the merits of her claim.

The parties, complainant and respondent, seemed to have confided in the validity of this covenant, and to have acted accordingly, until its true character became known to them. This may account for the omission of the complainant to take any steps towards enforcing full rent, knowing the reduction had been made under a compromise, induced by the construction given to the covenant by the respective parties.

“ A Court of Equity does not, in general, relieve for mistake of law. Where a transaction is founded in mutual ignorance or mistake, not of fact, but of law, the Court will not relieve the parties from the consequences.” Story’s Eq. Jur., see. 136 ; Hill on Trustees, 220.

We think the doctrine of equitable estoppel may very justly be applied to the complainant, as to the recovery of any rent beyond that paid and accepted and acquiesced in as an acquittance between the parties.

Especially ought she be estopped after the lapse of such time and failure to make any effort, at law or in equity, to recover these rents now demanded. The Supreme Court, in Bowman, et al. vs.Wotten, 1 Howard, 189, has said, and it is worthy of all commendation, “ that nothing can call forth a Court of Equity into activity, but conscience, good .faith and reasonable diligence. Where they are wanting the Court is passive and does nothing.” There is a failure here to make out a case of conscience, good faith or reasonable diligence.

This Court, in the case of Crook, et al. vs. Glenn, et al., 30 Md., 55, determined that lapse of time w.ould defeat the demand of a eestui que trust, although a, féme covert or an infant, where there was a trustee competent to sue, but failed to do so in reasonable time. An infant or a féme covert may be bound by an equitable estoppel. Hale vs. Timons, 2 Rich. Eq. R., 120; Davis vs. Tingle, 8 B. Monroe, 539; Wright vs. Arnold, 14 B. Monroe, 643.

Where the complainant and her trustee and agents, with knowledge that her claim for full rent, according to the lease, was refused by the respondent, have repeatedly acquiesced, through a long succession of years, and other interests involved, there is no sound reason why the remedial justice of a Court of Equity should be exercised for the relief of a party under such circumstances. It certainly is not the province of such a Court to encourage litigation by the support of claims stale and of doubtful equity at best, even if more industry had been employed to recover them.

. The complainant’s claim is not objectionable alone upon the ground of the staleness of the demand, nor the want of due diligence in its prosecution; but these circumstances considered with the other features of the case, have their due weight.

The fact of the complainant’s execution of the covenant, although insufficient to accomplish the purpose designed, and her continued acquiescence in the receipt of the diminished rent of which she had full knowledge — the fact that she had a trustee and other agents learned in law, to look after her interests, and being entitled herself beneficially to the property, with power to execute acquittances to her trustee or lessee — must, to some extent at least, operate to conclude her by her own acts, from successfully invoking the aid of a Court of Equity, and we think the equitable doctrine of estoppel may with justice be applied to her demand. We concur with the ruling of the Circuit Court, that the bill ought to be dismissed.

(Decided 14th March 1872.)

Decree affirmed.