Crain v. Crain (17 Tex. 80, 1856)

Hemphill, Ch. J.

The appellants, who were plaintiffs below, represent that one Ambrose Crain departed this life on — day of November, 1850, leaving the said Ambrose H., the said Emily N., and the said Patience, who are plaintiffs, as also the defendants Newell W. Crain and Jowell B. Crain, his legitimate children and heirs at law; that for many years before his death, and as petitioners believe at his death, the said Ambrose owned and possessed a large amount of property, real and personal, particularly described in exhibits A and B, made a part of the petition, (the exhibit A being copies of deeds of conveyance and bills of sale from the said Ambrose to the said Newell B. Crain, and B being a copy of the inventory of the estate ;) that before the death of the said Ambrose Crain, deceased, he had made no advancements or gifts to the petitioners, except that to said Patience he had in his life time given property to the amount of one hundred and thirty-two 50-100 dollars; to the said Ambrose H., property estimated at one thousand and eighty dollars; and to the said Emily property and cash amounting to thirteen hundred and seventy dollars ; that the said Ambrose Grain, being old and infirm in body and mind, in feeble and exceedingly precarious health, contemplating his death as being near at hand, being in the last stages of a lingering disease which for a period of two years had threatened his dissolution, and the said Ambrose fraudulently and unlawfully intending, during all that period, to defraud the petitioners out of their legal rights as forced heirs to their portions of his estate, confederated with the said Newell W. Crain, to the'end that petitioners, at his death, should be defrauded of their lawful inheritance, and that the said Newell, by means of such fraudulent combination, should, at his death, have and hold the whole property set forth in the conveyances and bills of sale ; and the said Ambrose, dec’d, so combining and confederating, did, on the days of the dates of the several deeds, conveyances and contracts, convey to the said Newell W. Crain property specifically enumerated and amounting in the aggregate value to about twenty-four thousand dollars, constituting nearly the entire mass of the property of the deceased, his inventory presenting but a beggarly account of trifling articles and a few small, hopeless claims in favor of the estate. And the petitioners further represented that the said Ambrose Crain, deceased, did, notwithstanding such deeds and conveyances, retain the use and possession of all of said property, and enjoy the fruits and revenues arising therefrom, continuously to the time of his death; and that the deeds, &c., were drawn with the full understanding and intention between the parties, that they should have no effect or operation during the life time of the said Ambrose, dec’d, but to all intents and purposes were to have the effect and operation, as between them, of a will, or of deeds to defraud the rights of the petitioners in contemplation of death, and to avoid the laws óf the State ; and that all of said deeds, contracts, or purchaser, in order to hold that a fraud may be committed against him. These are not the only classes against whom fraud may be committed. For instance, in countries where the Common Law prevails in its rigor, with regard to marital rights, where by marriage the civil existence and the personal property of the wife are absorbed in the husband, a fraud may be committed against the husband, by a conveyance by a wife of her property, made before marriage, even although this property may be settled to her separate use. Though at the time of making such conveyance she is the absolute owner of the property, and has the unlimited power of disposition incident to ownership, yet a transfer made by her without the knowledge of her intended husband, will be considered as a fraud on his just expectations of acquiring the property of the wife by marriage, and will be set side. His rights were merely contingent, dependent on a marriage which might never take place ; yet they are regarded by the law as having such efficacy, that a fraud may be committed against them, by the conveyance of the wife, though at the time of such conveyance she be the unqualified owner of the property. (Countess of Shathmore v. Bowes, 1 Ves. Jr. 22 ; 1 White's Equity Cases, p. 269.)

But there is a class of cases in which the assignments of owners of property have been adjudged frauds against others, which bear a closer analogy to the acts and rights of parties in this case. The first is that of Gregor v. Kemp, 3 Swanston, 404. The mother had covenanted that by her last will, or otherwise, she would give to John Kemp, &c., a fourth part of all the real and personal estate she should be seized of or entitled to at her death. She conveyed by deed in her lifetime one thousand pounds to her daughters and grandchildren. The Court was of opinion that this disposition was in fraud of the articles; that Mrs. Kemp was not restrained from disposing of her estate in any way in her lifetime, with the single exception, that she was restrained from making a distribution on purpose to defeat the covenant. But if the disposition had not been made with the avowed design to defeat the articles, yet it should, under the circumstances, be regarded as a donatio causa mortis, otherwise articles of this nature would signify nothing, if they are to be eluded by a disposition a day or two before death. But the disposition was good to affect the remaining parts of the estate, and was ordered to be satisfied out of it. Here the covenant was to give the fourth part of such estate only as she was seized of at the time of her death; and, literally, she was not at death seized of this one thousand pounds ; but the Court held that by collusion she could not defeat the covenant, and that she should, for the purposes of her covenant, be regarded as seized at her death of the property. The obligations of the Law of Wills, on parents, to leave three-fourths of their estate, possessed by them at their death, to their children, have as much force as the obligations of this covenant had upon Mrs. Kemp, to leave the one-fourth of her estate, at death, to the covenantee ; and they can be no more eluded or defeated by fraud in one case than in the other.

I shall next refer to Jones v. Martin, 5 Ves. 266, (in note.) By articles, T. Martin, the father of Mrs. Jones, covenanted, among other things, to leave her, at his decease, an equal share with her brother and sister, of all his personal estate, to be enjoyed immediately after the decease of himself and wife, and not before. He transferred, during life, all his personal estate to Ms son, except ninety pounds, which he directed by will to be divided according to the conditions of his covenant. The bill was filed by Mrs. Jones and her husband, against her brother, for an equal distribution of the property that had been transferred to and received by him in the lifetime of his father. The property was in stock, and it was a question whether the father had completely divested himself of the property during his life. There was evidence of frequent declarations by the father, that he had transferred the stock to defendant, reserving only the dividends for his own life, and there was much other evidence. The Court was of opinion that the transfer was not complete ; that such covenants did not confine the father’s powers ; that he' might give scope to projects, or indulge in free and unlimited expense. But if he indulged in partialities between his children, and made a difference, he must do it directly, absolutely, and by an unqualified gift, surrendering all his own interest. He must give out and out. He must not exercise his power by an act which is to take effect, not against his own interest, but only at a time when his interest will cease. The case of Turner v. Jennings, supra, on the custom of London, was referred to and approved. It was said that the transfers to the son were a fraud upon the. articles ; that the property continued to answer all the father’s purposes during life. If a father will be partial and give a preference, he must give it against himself, and not make a mere reversionary gift. He should immediately feel himself the poorer for the gift. If he is willing to suffer that, then let him yield to the impulse of his partiality. Bqt if a father may effectuate his purpose by any thing short of this, it will furnish perpetual opportunity for subterfuge and scheme to defeat and defraud these covenants, which ought to be most honorably observed.

In Fortescue v. Hennal, 19 Ves. 67, the father covenanted for an equal division, at his death, of all the property he should die seized and possessed of, between his two daughters or their families ; held, that though he retained the power of free disposition by act in his life, yet he could not defeat the covenant by a disposition, in effect, testamentary, as by reserving to himself an interest for life. The Master of the Rolls said that he could not defeat the covenant by testamentary act, and the question was whether he could defeat it by acts which, •though not testamentary, were not to take effect until after his death; that such a covenant would be of little value, if its •effect were to depend on the form of the instrument. Against a diminution of his property in Ms lifetime, Ms own interest and convenience form a pretty good security. Not so where, without any diminution of his enjoyments, he exercises a merely posthumous bounty, through an irrevocable instrument; that the custom of London, like tMs covenant, attached only upon the property which the freeman has at his death. During Ms life he has full liberty to dispose of his property, in any manner he thinks fit; yet it has been held, a disposition by a freeman, that is not to take effect until after Ms death, though by an irrevocable instrument, is a fraud upon the custom.

The conditions of the covenants in the above cases, are in strict analogy with the provisions of our Statute of wills, securing the distribution of the estate which a parent dies seized and possessed of at Ms death, among his children ; and the decision upon these covenants carefully guarding, as they do, the right of free disposition of property, but at the same time vigilantly repressing frauds against the covenantee, are entitled to very great weight and consideration when similar questions are presented under our statute.

It is not necessary to repeat here the circumstances under which the conveyances in this case were made, or their conditions and reservations, as represented in the petition. They were not intended to be of any force during the life of the parent, but that he should retain the control and enjoyment of the property until Ms death, and that the property should, by operation of the deeds, then vest in the son. Whether such conveyances as these be tested by original principles, or by the decisions in analagous cases, which have been just examined, it seems that they should be held void, and as in fraud of the law securing appellants a portion of their father’s estate. It is unfortunate that a question of this character should have come up on demurrer. The conveyance, or some of the earlier only may, on proof, be found not obnoxious to the charges against them in the petition. But this decision is on the facts as they are presented, and not as they may appear subsequently in proof. Having examined the points material to the decision of this cause, and being of opinion that the judgment sustaining the demurrer to the petition was erroneous, it is ordered that the judgment be reversed, and the cause remanded for further proceedings.

Reversed and remanded.