author: Mr. Justice Ceaig Mr. Chief Justice Scott,

text:
    Henry H. Massey et al. v. Bessie B. Huntington.

      Filed at Ottawa June 12, 1886.

    1. Impeachment oe deed—by the grantor—presumption as to his knowledge of contents. Papers for the transfer of property to a trustee, in trust for the grantor and his wife, during their lives, and for the disposal of what might remain after their death, had been prepared on due consultation and due deliberation of the grantor, and the notary who took the acknowledgment of the grantors testified that the deeds had been signed before he came to take the acknowledgment, and that the grantors acknowledged the same: Held, that it would be presumed that the grantors had read- the deeds, and that the wife freely and voluntarily executed the same, with a full knowledge of their contents and bearing on her rights.
    2. Same—prior and subsequent declarations of grantor. The declarations of a testator or grantor, made before or after the execution of a will or deed, may be competent evidence to prove his mental condition, but they are not competent to show undue influence or fraud.
    3. A person can not impeach a deed or other instrument of writing which he has voluntarily executed, by his own subsequent parol declarations.
    4. Testamentary disposition—or a trust. Where a disposition of property made by a written instrument is not to take effect until the death of the maker, it may be regarded as testamentary in character, and it will remain subject to revocation or change during his life.
    5. A trust is created when no act is necessary to be done to give it effect, and when the trust is fully and finally declared in the instrument creating it.
    6. In this case, husband and wife, by deeds, conveyed the real and personal estate of the former to a trustee in trust, out of which the trustee was to pay the husband $40 a month, and such other amount as he might deem necessary for the support of the grantor and his wife; and upon the death of the husband, if before the death of the wife, to make like payments to her, and upon the death of both, to c.onvey and transfer all the remaining property and effects to certain persons named. The deeds were duly acknowledged and delivered, and contained no power of revocation: Held, that the deeds constituted an executed trust, not a mere testamentary disposition, nothing being left by the grantors to give the same effect.
    7. Trust—consideration—whether necessary. Where a trust is complete and executed, so that nothing further remains to be done by the person creating it, to give it effect, the absence of a consideration is not material.

      Appeal from the Superior Court of Cook county; the Hon. H. M. Shepard, Judge, presiding.
    Messrs. Campbell, Hamilton & Custer, and Messrs. Millard & Smith, for the appellants:
    Testimony as to previous statements and declarations of a testator or a grantor in a deed, made prior or subsequent to the making of the deed or will, are admissible only to show mental condition, but are not admissible to show fraud or undue influence exercised upon the testator or grantor. Dickie v. Carter, 42 Ill. 388 ; 1 Jarman on Wills, 135; Richardson v. Richardson, 35 Vt. 238; Robinson v. Hutchinson, 26 Vt. 45.
    If the writing was an executed and delivered instrument, there being nothing left for the donor to do to complete the trust, and it is to take effect immediately, then it is a trust, and it is not testamentary in its character. If, however, it is not executed, or is to take effect in the future, as, on the death of the grantor, then it is testamentary. 1 Sanders on Uses and Trusts. 371, and note.
    A trust is executed, when no act is necessary to be done to give effect to it,—when the trust is fully and finally declared in the instrument creating it. 2 Pomeroy’s Eq. sec. 1001; Perry on Trusts, 100 et seq.; Light v. Scott, 88 Ill. 240; Ellison v. Ellison, 6 Ves. Jr. 662.
    Equity will look to the substance of the act done, and the intention with which it was done, and carry out that intention. Padfield v. Padfield, 72 Ill. 326; Badgley v. Votrain, 68 id. 25.
    Nor is the absence of a consideration material, when the trust is complete and executed, as it was here, not only by making and delivering the trust instrument, but by making and delivering a deed of the real property, and a bill of sale of the personal property, and also delivering the personal property. Ex parte Pye, 18 Ves. 148 ; Otis v. Beckwith, 49 Ill. 135; Padfield v. Padfield, supra; 68 id. 322; Ellison v.
      Ellison, 6 Ves. Jr. 656; Douglass v. Littler, 58 Ill. 348; Stone v. Hackett, 12 Gray, 227.
    Delivery of the deeds on the day of their date is presumed. Jayne v. Gregg, 42 Ill. 413; Hardin v. Crate, 78 id. 533;. Thompson v. Chamberlin, 88 id. 378.
    The law presumes more in favor of delivery in voluntary settlements than in ordinary cases. Bryan v. Wash, 2 Gilm. 557.
    Many cases hold that in voluntary settlements there need, not be delivery of the deed in the grantor’s lifetime. Perry on Trusts, sec. 103; Bunn v. Winthrop, 1 Johns. Ch. 329.
    No weakness of mind is shown, and if there was, it alone would not be sufficient to set aside the trust. Harrison v. Guest, 6 DeGex, M. & G. 424; Brown v. Riggin, 94 Ill. 560.
    Undue influence will not be presumed between husband, and wife. Hardy v. Van Hartigan, 7 Ohio St. 208.
    ■ It has been held that the wife can not set up undue influence against her husband, unless she also proves participation by the grantee. White v. Graves, 107 Mass. 325.
    Undue influence must be such as to overcome the party’s-free agency. Forney v. Ferrell, 4 W. Va. 729; Lynch v. Clements, 9 C. E. Green, (N. J.) 431; Barnes v. Barnes, 66 Maine, 286; Brick v. Brick, 66 N. Y. 144; Sisters, etc. v. Catholic Bishop, 86 Ill. 171; Roe v. Taylor, 45 id. 486.
    Messrs. Dent, Black & Chatty Bros., for the appellee:
    There was no consideration on the part of Mrs. Rexford for the rights she surrendered by the conveyances. It is-proper to consider whether these papers were based upon any consideration as to her, or were a fraud upon her rights..
    Married women and infants are the peculiar care of courts-of equity. Mix v. King, 55 Ill. 439.
    The court will exercise parental solicitude wdiere the wife has acted under the influence of the husband. 2 Story’s Eq. Jur. sees. 1395, 1429.

      Equity will interfere whenever the circumstances are such as to warrant the presumption that undue influence has been exerted, that confidence has been abused, and that improper and unwarrantable advantage has been taken by one party, of the age, weakness or ignorance of the other. 3 Leading Cases in Eq. 119, 120, 126, 127.
    The provision made in the transfer, for the wife, was one which would have left her dependent and almost a pauper. The provision made for her was not adequate, and she would thereby be deprived of her rights. 2 Story’s Eq. Jur. sec. 1416.
    The transfer was a voluntary one, contrived by the husband with a view of defeating the claims of his wife, and she should therefore be aided to the extent of the restoration of her rights. Smith v. Smith, 12 Cal. 217.
    The following cases establish the doctrines on which we rely: Thayer v. Thayer, 14 Vt. 107; Frederick's Appeal, 52 Pa. St. 338; Garnsey v. Mundy, 14 N. J. Eq. 243 ; Schaper v. Schaper, 84 Ill. 603; Coulson v. Allison, 2 DeG., F. & J. *521; Stone v. Stone, 18 Mo. 389; Tucker v. Tucker, 29 id. 350; 32 id. 464; Phillipson v. Kerr, 32 Beav. 628.
   Mr. Justice Ceaig

delivered the opinion of the Court:

This was a bill in equity, brought by Fanny H. Rexford, to set aside a deed, bill of sale, and a declaration in trust, executed by the complainant, and Heber S. Rexford, Jr., her husband, to H. H. Massey, trustee, and Ephraim H. Dennison, successor in trust. The three papers were executed on the 14th day of February, 1882. The deéd, for an. expressed consideration of one dollar and love and affection, and other good and valuable considerations, purported to> convey five acres of land in Cook county, which was then owned by Heber S. Rexford, Jr. By the bill of sale, upon a, like consideration, Heber S. and Fanny H. Rexford granted, bargained, sold and delivered to Massey, trustee, and Dennison, bis successor in trust, a promissory note for $100, and an open account for $2191.21, against Norman Bexford; also, one certificate of insurance, (No. 25,962,) in the Lumberman’s Lodge No. 1815, of Knights of Honor, for the sum of $2000, bearing date the 11th day of February, 1882, on the life of the said Heber S. Bexford, Jr., and payable at his death; also, one policy of insurance issued by the Connecticut Mutual Life Insurance Company, numbered 134,395, on the life of the said Heber S. Bexford, Jr., for the sum of $1000, on the ten year plan, dated May 13, A. D. 1875, and payable at his death.

The declaration of trust provided that “the above conveyance of the real estate therein described, and the above bill of sale of the personal property therein described, are respectively made, executed and delivered by the undersigned, Heber' S. Bexford, Jr., and Fanny H. Bexford, his wife, to the said Henry H. Massey, or his successor in trust, for the following uses and purposes, to-wit: To hold the personal property with power to sell, to lease or incumber the real estate, and—

“First—To pay all necessary expenses, including reasonable compensation for said trustee’s services attending the management of the property above conveyed, and the execution of the trust herein created.

“Second—To pay to the said Heber S. Bexford, Jr., during his life, the sum of forty dollars ($40) per month, and such other amount as he may deem necessary from time to time, for the comfortable maintenance and support of the said Heber S. Bexford, Jr., and Fanny H. Bexford, his wife; and in case of the death of said Heber S. Bexford, Jr., before the death of the said Fanny H. Bexford, his wife, then and in that case the said Henry H. Massey, or his successor in trust, shall pay to the said Fanny IT. Bexford, during her life, the sum of forty dollars ($40) per month, and from time to time such other sums as he may deem necessary for the comfortable support and maintenance of the said Fanny H. Bexford; and all the rest and residue of such proceeds as aforesaid, and any or all of said personal property described in above bill of sale as may remain in the hands of the said Henry H. Massey, or his successor in trust, at the death of the said Heber 8. Rexford, Jr., should he survive the said Fanny H. Rexford, or at the death of the said Fanny H. Rexford, if she should survive the said Heber S. Rexford, Jr., the said Henry H. Massey, or his successor in trust, shall pay over and deliver the same to the following named persons, to-wit: Two hundred and fifty dollars ($250) to be paid to Mrs. Maria D. Huntington, of Blue Island, Cook county, Illinois, mother of Fanny H. Rexford, if she should survive the said Heber S. Rexford, Jr., and Fanny H. Rexford; if she should not survive the said Heber 8. Rexford, Jr., and Fanny H. Rexford, then and in that event the said sum of two hundred and fifty dollars ($250) shall be divided, with the rest, residue and remainder of the estate, as follows: One-quarter (J) thereof to Julia Rexford, mother of said Heber 8. Rexford, Jr., one-quarter (J) thereof to F. D. Rexford, of Centralia, Illinois, one-quarter (¿) thereof to Norman B. Rexford, of Blue Island, Cook county, Illinois, and the remaining one-quarter thereof to Mrs. C. Caroline Massey, wife of said Henry H. Massey, of Blue Island, Cook county, Illinois, or to their or each of their administrators, executors or assigns, and the said Henry H. Massey, or his successor in trust, shall, from the execution and delivery of this instrument, hold the legal title of said real estate above conveyed to him, subject to the other trust herein set forth, in trust for said Julia Rexford, F. D. Rexford, Norman B. Rexford and C. Caroline Massey, share and share alike, and at the time of the distribution of any remainder of said personal property, or the proceeds thereof, and the rentals and incumbrances aforesaid, as above set forth, the said Henry H. Massey, or his successor in trust, shall make, execute and deliver to the said Julia Rexford, F. D. Rexford, Norman B. Rexford and C. Caroline Massey, or their or each of their heirs, legatees or assigns, good and sufficient de.ed or deeds to convey the legal title of said real estate to them, whereupon this trust shall cease and be determined. ”

The deed, bill of sale and declaration of trust were acknowledged before a notary public on the day of their date, and delivered to the trustee, Massey, who filed them for record in the recorder’s office of Cook county on the 13th day of May, 1882. Heber S. Bexford, Jr., died intestate on the 12th day of May, 1882, leaving a widow, Fanny H. Bexford, but no child or children, or descendants of any child. On the 5th day of September, 1882, the widow filed this bill to set aside the deed, bill of sale, and declaration of trust, on the ground of undue influence, the bill charging that the papers were executed without consideration, and that the complainant was overreached in the execution thereof. It is also charged in the bill that the papers executed were intended as a testamentary disposition of the property, and hence not binding on the complainant. The complainant, Fanny H. Bexford, died October 27, 1882. Previous to her death she made a will devising all her estate to Bessie B. Huntington, her sister, who was substituted as a party complainant in the bill.

As respects the execution of the papers by Heber S. Bexford, it is apparent, from the evidence, that they were executed after mature deliberation, and with a full understanding of their terms, conditions, and the manner in which they would affect his rights and also the rights of his wife. He and his wife were both in the last stages of consumption, and his desire no doubt was, to make such a disposition of his property as would afford a reasonable support for himself and wife while living, and after their death have the remainder pass into the hands of his own relatives. While on a visit with a brother, at Centraba, in January, 1882, he requested his brother to consult a lawyer as to the best mode of disposing of his property. It seems that Bexford’s brother, after a consultation, informed him that the lawyer advised that a will might be defeated by an election of the widow, but that the matter might be arranged in the shape of a trust. Soon •after this, Bexford returned to Cook county, and in an interview with Massey obtained his consent to act as trustee, and •sent Massey with a memorandum to Judge Wallace, to have the papers prepared. Wallace desired further information, which was obtained from Bexford, and within a few days the papers were prepared, and placed in the hands of Bexford and his wife for execution, and were executed and acknowledged, •as stated before. So far as appears, there was no haste in the preparation or execution of the papers, but mature deliberation characterized the whole transaction.

But it is said that Fanny H. Bexford, the wife, had not "understood the nature of the papers, and they were a fraud upon her rights. She never testified in the case, and what might have been her account of the transaction had she been •called upon as a witness, is mere conjecture. The evidence of the notary public before whom they acknowledged the, papers is in the record. He stated that the papers were acknowledged on the evening of February 14, 1882, at the house of Mrs. Sammons. He also testified: “When I got there I had •■a little conversation before taking the acknowledgment; then I took the paper and asked Heber and Fanny Bexford if these were their signatures,—if they were their free and voluntary •■act and deed for the purposes set forth in the deed. Heber and Fanny were sitting right near together, and Heber said, * Yes,’ and Fanny gave an affirmative nod of her head in each •of the three acknowledgments. ” The three papers had been signed by Bexford and his wife before the notary called, and the presumption is, that they had read them and understood the contents, and if reliance is to be placed on the evidence ■of the notary, and we perceive no reason to question it, Fanny H. Bexford freely and voluntarily executed tfye three papers, with a full knowledge of their contents and bearing on her nights.

The complainant, Bessie B. Huntington, sole devisee of Fanny Bexford, testified to a certain .conversation between Massey, the trustee, and Mrs. Bexford, which occurred after the death of her husband, and reliance is placed upon this evidence to show that Fanny Bexford was misled in the execution of the papers. She testified that her sister, Mrs. Bexford, called on Massey for money to furnish a- room, and he told her he had no money for that purpose, when Mrs. Bexford said it was not at all as she had understood it when she had signed the paper; she said she understood she was to-have whatever she wanted, and that it was not to be a matter of Mr. Massey’s deciding what she wanted; that she was simply to go to him when she wanted it, and she repeatedly said it was told her so, and that was the way she understood, it, and she said once that Mr. Massey understood it just so, she felt sure. The declarations of a testator or grantor made-before or after the execution of a will or deed might be competent evidence to prove mental condition, but such declarations are not competent to show undue influence or fraud. The law is well settled, that a party can not impeach a deed or other instrument of writing which he has voluntarily executed, by his own parol declarations. Dickie v. Carter, 42 Ill. 384.

As observed before, when the papers were executed, Bexford and his wife were both weak in body, and neither was expected long to live; but so far as is shown by the evidence, their mental faculties were not impaired, and they were fully competent to transact any ordinary business. It is no doubt-true, that after the death of Bexford his wife became dissatisfied with the disposition which had been made of the property,, but this record contains no sufficient evidence to establish-undue influence or fraud practiced upon her, and she and those claiming under her must be held bound by the papers which she voluntarily executed.

Schaper v. Schaper, 84 Ill. 604, has been cited by complainant’s counsel as an authority in her favor. We are entirely satisfied with the decision made in the case cited, but the facts there are so different from the facts of this case that it can not be regarded as an authority here. Thayer v. Thayer, 14 Vt. 107, has also been cited. That case was doubtless decided right, on its facts. There, the wife did not join in the execution of the papers, and the transaction was entered into by the husband in order to defraud her out of her just rights, and the court properly held that she was entitled to relief. Other cases have been cited, but they will all be found, upon examination, to be so widely different in their facts from this case as not to be authority here.

But it is urged that the disposition of the property was testamentary in character, and hence not conclusive on the wife. If the deed which was executed by Bexford and his wife, purporting to convey the property to Massey, was an instrument to take* effect in the future, as, upon the death of the grantor, then it might be regarded as testamentary in character. If, on the other hand, the deed was an executed and delivered instrument, to take immediate effect, and nothing left for the grantors to do in order to complete the contemplated arrangement, then it is a trust. (1 Sanders on Uses and Trusts, 371.) Upon an inspection of the deed under which the property was transferred to the trustee, it is manifest that the transaction is an executed trust. The property is absolutely transferred to the trustee. The grantors retain no control whatever over it. The trustee takes the property, and by the terms of the deed he is required to pay Heber S. Bexford, Jr., during his natural life, $40 per month, and such other amount as he may deem necessary for the support of Bexford and his wife, and upon the death of Bexford before the death of his wife, then the trustee is required to pay her $40 per month, and such other sum as he may deem necessary for her comfortable support. Upon the death of both Bexford and his wife, a certain and absolute disposition of the property remaining is provided for. No power of revocation is reserved, nor ivas anything left for the grantors to do, but the property vested absolutely in the trustée, on delivery of the deed, for certain specified purposes. A testamentary disposition of property does not take effect until the death of the testator, and hence is within the control of the testator, liable to be changed or abrogated at his pleasure. But this transaction contains no element of that character. In 2 Pomeroy’s Equity Jurisprudence, sec. 1001, the author says: “A trust is executed, when no act is necessary to be done to give it effect,—when the trust is fully and finally declared in-the instrument creating it.” Such is this transaction.

It is said, that the transaction has no consideration to sustain it. Where the trust is complete and executed, as in this case, a consideration is not material. Ex parte Pye, 18 Ves. 148; Stone v. Hackett, 12 Gray, 227; Perry on Trusts, sec. 99.

The decree of the court below will" be reversed, and the ■cause remanded for "further proceedings consistent with this •opinion.

Decree reversed.

Mr. Chief Justice Scott,

dissenting:

Dissenting as I do, from both the conclusion and reasoning in this case, I feel at liberty to state my views of the W'hole case.

It is seen the bill in this case was brought in the Superior ■Court, by Fanny PI. Bexford, since deceased, against Maria Huntington, Julia Bexford, Fayette Bexford, Norman B. Bexford, C. Caroline Massey, Henry H. Massey and Ephraim F. Dennison. The object of the bill was to set aside a deed, bill of sale, and a declaration of trust, made by Heber S. Bexford, Jr., now deceased, in which complainant, who was then his wife, joined in the execution, to Henry H. Massey, as trustee for the grantors, and Ephraim H. Dennison, as successor in trust. The real estate conveyed consisted of about five acres, and the personalty consisted mainly of life policies and other choses in action, the whole property, both real and personal, being of near the value of $7500. The hill of sale and declaration of trust, with the deed, were all ■executed on the 11th day of February, 1882, and were all acknowledged before a notary public, both by Heber S. Rex-ford, and Fanny S. Rexford, his wife, the complainant in this bill. On the 12th day of May next after the execution of these several papers, Heber H. Rexford died, leaving him surviving, his widow, (complainant,) but no child or descendants of any child. Neither of the instruments executed by the parties was placed on record until the next day after the death of the husband. The declaration of uses and purposes for which the deed and bill of sale were made to Massey and his successor in trust, and which was executed at the same time and as a part of the same transaction, provided the trustee should have power to sell and deliver all or any portion of personal. property mentioned in the bill of sale, for the uses and purposes therein expressed, and should have power to lease the real estate, or incumber it for such amounts as the trustee might think necessary to carry out the trust therein declared, and further provided, the proceeds of any such sales of the personal property, and any and all money arising from the leasing or incumbering of the real estate, should be held by the trustee named, or his successor in trust, upon the conditions following: First, to pay all necessary expenses of the trust; and second, to pay to Heber S. Rexford, Jr., during his life, the sum of $40 per month, as he might deem necessary for' the comfortable maintenance and support of the said Heber S. Rexford, and Fanny H. Rexford, his wife, and in the case of the death of the husband before his wife, the like sum was to be paid to her at the same stated periods during her life, and on the death of both husband and wife, it was made the duty of the trustee, or his successor in trust, to pay over and deliver any of the trust funds or property that might then remain in his hands, to the following named persons: To Maria B. Huntington, should she survive both donors, the sum of $250, but should she die first, then the $250 was to be divided as other trust property,—that is, one-fourtli to Julia Rexford, one-fourth to Fayette D. Rexford, one-fourth to Norman B. Rexford, and the remaining fourth to C. Caroline Massey; and it was expressly provided, the trustee should hold the legal title to such real estate, so conveyed to him, subject to the other trusts therein declared, in trust for the said Julia Rexford, Fayette Rexford, Norman B. Rexford and C. Caroline Massey, share and share alike, and on the final distribution of the residue of the estate it was made the duty of the trustee to execute to the several parties named, sufficient conveyances of such real estate, whereupon the trust created should cease and be determined.

Prior to her death, which occurred on the 27th day of October, 1882, Fanny H. Rexford made and published her last will and testament, in which she named Bessie B. Huntington as her sole devisee and legatee. The next day after the making of the will, this bill was filed. After the death of the original complainant, her will was duly admitted to probate, and since then this suit, by leave of court, has been prosecuted in, and been maintained in, the name of Bessie B. Huntington, the sole legatee named in the will. The answers of the several defendants were not under oath, and simply put in issue the principal allegations of the bill. On the hearing, the court found the principal allegations of the bill were sufficiently proved, and rendered a decree setting aside the deed, bill of sale, and declaration of trust, so far as the same affected the rights of the original complainant, and giving to the present complainant the same share of the estate of Heber S. Rexford, Jr., deceased, that his widow would have taken under the statute had he died intestate, except as to the right of dower the widow might have had. It is as to this part of the decree that defendants have assigned error.

The transactions out of which this litigation arose are called in question mainly upon two points: First, that of undue influence in procuring the signature of the wife to the deed, hill of sale and declaration of trust, and that she was overreached and entrapped into the execution of the several papers; and second, that the transaction was nothing more than a testamentary disposition of his property made by Heber S. Rexford, and therefore not binding on his widow after his death. On the other hand, it is maintained the deed, bill of sale and declaration of trust were fairly and understandingly executed by the original complainant, without any improper practices being adopted to unduly influence her action, and that the transaction is an executed trust, and is therefore irrevocable by either party to it.

Construing the making of the deed, bill of sale and declaration of trust together, as simply a testamentary disposition of the property by the husband, and not as an executed trust, then it is not binding on his surviving widow, and, on its being set aside as to her, she would take as in ease of intestacy. Undoubtedly, the law is, where there is an executed trust and nothing remains for the donors to do, it is irrevocable. But it is otherwise as to the mere testamentary disposition of property, either real or personal.' The donor, it is understood, may at any time revoke it, and recall all he has done. In that respect it is no more binding than a will, which, of course, is subject to change or revocation at all times, and the proposed beneficiary can not complain. In this case, defendants claiming the estate paid no consideration. If they take at all, it is simply as donees of the bounty of their deceased kinsman, as under a will, and not otherwise. In that respect it may be said both parties now claiming the property stand in the same relation to it. Neither of them has any equities in his or her favor arising out of any valuable consideration.

Much light will be shed on the subject of the inquiry necessary to be made, by ascertaining the exact condition of the-parties at the time the several instruments were executed.. The parties had been married about five years. They had had two children, both of whom had died in infancy, so that, at the date of these transactions they were childless. Both, of them were in very feeble health, being afflicted with consumption, in its last or fatal stages. The witnesses say it. was difficult to tell which of them was most feeble. It was apparent to all their friends, and perhaps to themselves, that neither one could live but a short time, and their fears proved to. be true. Both of them were unable to do any labor. The husband, for some time before the execution of these papers, had been unable to speak otherwise than in a whisper. He-had been advised by his physician, what he must have known himself, that he could live but a brief time. Shortly before-the making of the deed and other papers, Heber, with his. sister, Mrs. Massey, made a visit to their' brother at Gentralia. His wife was left or remained at home. While there,, the subject of what disposition was to be made of the property seems to have been considered, and the advice of a. lawyer taken. Immediately after their return to Blue Island, where the parties resided, ■ Massey, at the request of his-brother-in-law, Heber S. Rexford, had the deed and other-papers prepared by a lawyer in Chicago for execution. Heber was himself too feeble to go into the city to give the matter any personal attention. It was managed for him by Massey, who was to be, and was appointed, trustee. Although the-papers were all signed and acknowledged on the 14th day-of February, 1882, yet they were not recorded until the next, day after the death of the husband, which occurred on the-12th day of May next thereafter. It is probable the papers,. after they had been executed, remained in the hands of the trustee -named, but how that may have been does not distinctly appear. It does not appear, however, he attempted to do anything towards the execution of the trust prior to the death of the truster. Equity, discarding unmeaning and useless forms, will look at the substance of the act done and the intention with which it was done, and carry out that intention. No matter what form the transaction puts on, equity will penetrate it, and discover the true purpose of the parties to it, and will construe it accordingly. That ought to be done in this ease. The trust declared in this case may have been made in the form of an executed trust, with a design to conceal the real intention of the party to make a testamentary disposition of his property. If so, the form adopted ought not to be permitted to stand in the way of a true construction, otherwise great injustice might be done simply by adopting a covering to conceal the real purpose the party intended to accomplish. That, of course, the law will not permit. The trust attempted to be declared in this ease ought not to be permitted to stand simply because it may appear on the face of the instrument to be an executed trust. The circumstances ought to be examined, and if it shall be ascertained it is simply a testamentary disposition of 'the property, it ought to be so declared, without regard to the form in which it is expressed.

Applying these reasonable rules of construction, the case being considered admits of an easy solution. When the deed and bill of sale were executed and the trust declared, it was under the belief the death of both parties would soon occur. The husband had been so advised, and it was a matter that had been talked over, and neither one had the slightest hope of living beyond a few months. Certainly this arrangement was not made for the purpose of creating a trust for the benefit of either party for the brief period they expected to live. This is plain, from the fact it does not appear the trustee was permitted to have any control or management of the property during the lifetime of the husband. Indeed, as has been seen, the papers were not placed on record until the next day after his death. This would seem to indicate that the husband held control, not only of all his property, but of the papers themselves, so long as he lived. There was unseemly haste in making the conveyances a matter of record after his death. There was, and could have been, no reasonable expectation his wife would live to derive any considerable benefit from the trust attempted to be created in her favor. That could not have been the object in placing the property in the hands of a trustee. What, then, was the purpose ? Evidently it was the intention to cut off the interest the wife would have in the estate of her husband under the statute, and in that way save the property to his heirs to the exclusion of hers. A most inadequate provision was made for the maintenance and support for one in such feeble condition, even for the brief time it was known she could live. The purpose to make a testamentary disposition of his property is most obvious from what occurred when he and his sister visited his brother at Centraba, just prior to the making of the papers supposed to have created the trust. Counsel was taken by the brother whom they were visiting, at the instance of his sick brother, and they were advised- if he made a will his wife would not be bound by it if she survived him—that she could renounce it and take under the statute. It was suggested, and so the advice ran, it might be done by conveying the property in trust. The inquiry, no doubt, was how the husband might make a testamentary disposition of his property so as to most effectually preserve it to his heirs, and in that way prevent any portion of it from passing to his wife under the statute, in ease she should survive him. That must have been the reason why the making of a will was abandoned and the other mode adopted. No doubt the plan adopted was matured in the family council before leaving Centraba, for it was executed as soon as practicable after decedent and his sister returned home. This view is greatly strengthened by the fact that at the same time arrangements were set on foot to surrender a life or benefit policy which the husband had directed should be paid to his wife, and take in its stead a new certificate, payable to Massey on the death of the assured. It will be remembered that Massey had not then been named trustee. All this was done without the knowledge of the wúfe, and it does not appear that she was ever informed of it.

Conceding, then, the evident purpose was simply to make a testamentary disposition of his property by the husband, his wife was not bound by it after his death, notwithstanding she may have joined with him in the execution of the conveyances and in the trust declared. It was a mere shift or device employed to cut off all interest the wife might have in the estate of her husband. Such a scheme or device will meet with no favor. She was in extreme ill-health, and it does not appear she was advised by her husband or any one else of the effect of the act she was doing in joining in the execution of the trust. It would have been highly proper to have furnished her with professional advice as to her rights, and as to the effect of the instrument she was called upon to sign. It is plain, from her subsequent conduct, she did not comprehend what she had done,—certainly not the legal effect of her act. Unaided by friendly counsel, she was too feeble to resist any proposition that might be submitted to her by those interested in the scheme to be adopted. A voluntary disposition of property by the husband, no matter what form is adopted, made with an evident intention and purpose to deprive the wife of her interest in it, as the law defines that interest, will find no sanction in the law. It is such a legal fraud on her as the law will not tolerate. The scheme adopted was simply to make such testamentary disposition of the property by the husband that would deprive the wife of any share of his estate under the> statute, and as it does not appear she was sufficiently advised of the effect of her action in consenting to it, she is not bound by what her husband did. On account of her extremely feeble condition, arising from a mortal sickness, she could not be charged with negligence in not procuring legal advice for herself, to enable her to resist what her dying husband, influenced, as he seems to have been, by his heirs, wished to have done. She had neither mental nor physical force to interpose much resistance, and she may have secured temporary rest by yielding to what it was desired she should do. One of two propositions is true: First,, the trust attempted to be declared was simply a testamentary disposition of the property of the husband, made in view of death, upon no consideration, and therefore not binding on his wife after his death; or, second, it was a voluntary alienation of his property, upon no valuable consideration, made-with intent to deprive the wife of her share of her husband’s-estate under the statute, and was for that reason mala fide, and a fraud upon the law and upon the rights of the wife. In either case the law is, so far as the wife is concerned, the-husband is to be regarded as having died seized of the property, and the widow will take the same portion as in case of intestacy. Although not entirely analogous, the reasoning in the following cases in a measure supports the views expressed : Garnsey v. Mundy, 24 N. J. Eq. 243; Smith v. Smith, 12 Cal. 216; Thayer v. Thayer, 14 Vt. 107.

As respects the benefit certificate in the Knights of Honor,, which was renewed and made payable to Massey, it is claimed he would be entitled to the money under that certificate, outside of the trust, and would have been if no trust had been created. The argument in support of this proposition is,, that decedent had a right to dispose of his own personal property, in -his lifetime, without the consent of his wife. A satisfactory answer to the position taken is, he neither sold it nor gave it to Massey. It was intended he should hold the proceeds, as he did the other property attempted to be assigned, in trust. Making the certificate payable to Massey, was simply a means adopted to facilitate the collection, and nothing more. The husband may not dispose of his personal property by mere voluntary assignment, founded upon no valuable consideration, with intent to defeat his widow of her distributive share under the statute, any more than he may his real estate. There is no reason in law for making any distinction in that respect.

In my judgment the decree of the lower court should be affirmed.


source: Caselaw Access Project

author: Mr. Chief Justice Scholfield

license: Public Domain

text:
    David R. Fraser v. Philetus W. Gates.

      Filed at Springfield March 30, 1885

      Rehearing denied June Term, 1886.

    1. Invention—who to be regarded as the inventor. Where one party invents a new principle in machinery, as, to make a hard iron shoe with a soft iron stem, for stamping and pulverizing ores, and for which he applies for letters patent, and another suggests the plan of first pouring in the hard iron and then the soft iron, to fill up the place for the stem, which, on experiment by the inventor of the principle, proves successful, the fact of such suggestion being made to the first party will not defeat his claim as the inventor, especially when the other acquiesces in the claim, and accepts letters patent to both under an assignment of a half interest.
    2. The fact that one claiming to be the inventor of an improvement in machinery, assigns one-half interest to another, who is a manufacturer, and with whom he has an agreement that each is to share equally in any invention of either one, does not afford evidence that the assignor was not in reality the inventor.
    3. Joint patentees of an invention—liability to account. One of several joint patentees of an invention is not liable to account to the others for profits derived from the use of the patent, in the absence of a special agreement providing for such accounting.

      i. Same—character of relation between several owners—agreement to account, as a continuing one. Where an inventor, before receiving letters patent, transfers to another a half interest, under a contract that the patent shall issue to both, and each shall account to the other for all royalties received by them on sales, etc., they will not become partners in the letters, but tenants in common, with the right to require each other to account for one-half of the profits derived by them, severally, for the use of the patent, and the agreement to account and pay over is a continuing consideration for the grant of the letters patent.
    5. Same—bankruptcy of one of the tenants in common — and subsequently acquiring back his interest from the assignee. Where a tenancy in common in letters patent exists, with a continuing obligation of each to account to the other for all profits derived by them, and one is adjudged a bankrupt, but afterward receives the assignee’s deed for his interest, he may, ■notwithstanding the adjudication in bankruptcy, enforce an accounting from his co-tenant.
    ■' 6. Same—Statute of Frauds—as applicable to an agreement to share the profits, etc. Where an inventor of a new principle in mechanics assigns one-half interest in the invention to another, in consideration of an agreement that each shall share equally in the cost of procuring a patent to them jointly, and in the profits and expenses and losses, and the patent is issued to both, and for some time they account to each other, the Statute of Frauds will not be applied to defeat the enforcement of the agreement, for the reasons that the contract has been fully executed on one side, and might have been performed within one year, though not so expected.
    Appeal from the Appellate Court for the First District;— heard in that court on appeal from the Circuit Court of Cook county; the Hon. M. F. Tuley, Judge, presiding.
    Philetus W. Gates exhibited his bill in chancery, in the circuit court of Cook county, against David it. Fraser and Thomas Chalmers, in which, among other things, it .is, in substance, alleged that Gates invented a new and useful improved shoe for stamping or pulverizing ores, for which he made application for letters patent; that before the patent was issued, Gates assigned all his right, title and interest in the invention to himself and David E. Fraser, in consideration that Fraser then verbally agreed with him that each should pay one-half the expense to be incurred in procuring the patent, and that they would be equal partners in all losses and expenses relating to the patent, and in the gains and profits thereof, and in all royalties or patent fees to be derived therefrom; that letters patent for such invention were thereupon issued to said Gates and said Fraser, jointly; that soon after obtaining said letters patent, they, by mutual agreement, adopted and fixed as the royalty, or patent fee to be paid by persons who might sell or furnish for use said patent shoes, one cent per pound weight thereof, which was then, and still is, a reasonable patent fee therefor, and they collected and divided, between themselves, equally, as co-partners, from the date of the issuing of said letters patent until the 1st day of January, 1878, patent fees or royalties on sales of said patent shoes by other persons, at the rate of one cent per pound weight thereof, amounting to from $300 to $1000 ‘or $1200 per year, except during a few months they charged and collected a royalty of only one-half cent per pound on sales, by reason of the competition of others in supplying to the trade, mining machinery of a similar kind. But such competition ceased on or about the 1st day of January, in the year 1878, and thereafter a reasonable and proper patent fee, for making and selling to others said improved shoe, was, and has been, one cent per pound weight thereof. It is alleged, that since May 14, 1879, Fraser and Thomas Chalmers have been doing business as machinists and manufacturers of mining machinery, in the city of Chicago, under the firm name of Fraser & Chalmers, and have manufactured and sold large quantities of said patent shoes, upon which Gates claims that he is entitled to royalty; that Fraser & Chalmers refuse to account for royalty on such shoes; that Gates is willing to account for royalty on sales made by him since said date, etc. Prayer is that Fraser & Chalmers be required to account for royalty on sales made by them, and to pay over, etc.
    The answer of Fraser admits that letters patent were-issued to Gates and himself, as co-owners, as alleged in the bill, but denies that Fraser, at any time, entered into an agreement with Gates in regard to the ownership or use of said letters patent; but he says that, being ignorant of his rights in the premises, he, for a long time, supposed that he was under legal obligation to account to Gates, because he and Gates were co-owners of said patent, and that he did account and pay over to Gates half the profits received by him from the use of the patent, down to January, 1878; that on the 22d of May, 1878, Gates filed a petition in bankruptcy, and was thereupon adjudged a bankrupt, and he insists that by the petition in bankruptcy of Gates, any relation of co-partnership between him and defendant, if any there was, became thereby terminated and dissolved. It is therein further alleged, that Fraser, becoming better advised in regard to his rights as co-owner of the patent, after the 1st of January, 1878, refused to account to Gates for one-half of the profits or royalties arising from said patent; that about the 14th of May, 1879, said letters patent were sold by Gates’ assignee in bankruptcy, and purchased by Gates, to whom the assignee made conveyance; but Fraser denies that this revived any rights of Gates as co-partner with himself in the patent; denies that Fraser, as co-patentee, is, or ever has been, under any legal obligation to account to Gates for any part of the profits, royalties or license fees received by him for the use of the said patent, and denies that he is under any liability to account. The answer admits that since the 14th of May, 1879, and previous thereto, Fraser licensed the firm of Fraser & Chalmers to use said letters patent, upon their paying him a license fee of half a cent a pound upon all articles manufactured under the same. Chalmers also answered, denying any liability to account.
    Subsequently, Fraser filed an amended answer, denying that Gates was the sole inventor of said shoe for stamping ores, and claiming that Fraser was equally entitled with Gates to the patent issued for the same; denying that Gates assigned him a one-half interest in said letters patent because ■of good will, or friendly feeling, or upon the condition that Fraser would divide- any of the royalties coming from the .same, with Gates; but charges that said letters patent were issued to Gates & Fraser, jointly, because of their joint rights .and interests, etc. Replication was filed to the answer.
    The court decreed in favor of the complainant. The decree finds the allegations of the bill to be proved, setting forth, specifically, the facts, and refers the cause to a master in chancery, to “take proof, and state an account since the 14th day of May, 1879, between complainant, and defendant, .'Fraser, in respect to said patent. ” The master afterwards reported, in substance, as follows:
    “After fully considering the evidence and arguments of •counsel, finds that the complainant, since May 14,1879, has licensed, under the patent mentioned in the decree, the firm •of P. W. Gates’ Sons & Co., and the Gates & Scoville Iron Works, to manufacture, and that few sales have been made by them, owing to Fraser & Chalmers having practical control of the mining machinery business; that complainant had ■not collected royalties of said firm and corporation licensed by him, as he had an interest in both, and had not settled his account with them, but he consents that he be charged the royalty on shoes sold, at one cent per pound, which are all shoes sold under his license since May 14, 1879. That ■during said time the firm of Frasér & Chalmers did a large 'business in mining machinery, and all shoes made under the Fraser license were sold by said firm. At said last mentioned •date, the defendant, Fraser, for the purpose of avoiding any •accounting with the complainant for any royalties or license fees with which he might become chargeable if said firm of Fraser & Chalmers continued to have said shoes manufactured, made an arrangement with said Barnum & Richardson Manufacturing Company, by "which he, said David R. ¡Fraser, employed said Barnum & Richardson Manufacturing Company to manufacture said shoes for him, said Fraser, and from March 1, 1881, to September, 1882, all shoes sold by said Fraser & Chalmers were manufactured by said Barnum & Richardson Manufacturing Company, and charged to-said Fraser individually, but his account was paid by the firm of Fraser & Chalmers by their checks, and said Fraser was paid or credited on the books of Fraser & Chalmers, with a one-half or one-fourth cent per pound on said shoes, in pursuance of some sort of indefinite understanding between said Fraser and said firm of Fraser & Chalmers. From September, 1882, to date of accounting before me, Fraser & Chalmers manufactured in their own foundry, under Fraser’s-license, the shoes, except those under date of June, 1882.” From said findings, and evidence attached to report, the-master states the following account under the first direction, in the decree, to-wit:
    Charges Fraser with patent fees or royalties received by him on 950,244 pounds of shoes at one-half cent, and 722,381 pounds at one-fourth
    cent........$6557 IT
    Charges complainant, Gates, with patent fees or
    royalties on 17,521 pounds of shoes at one cent. 175 21
    Excess of Fraser’s over Gates’ royalties. - - $6381 96-
    December 15, 1883, due Gates from Fraser, one-
    half of said excess. ----- 3190 98
    “I have charged the defendant, Fraser, with the amount, allowed to him by his said firm upon the shoes manufactured by him, through the Barnum & Richardson Manufacturing-Company, from March 1, 1881, to September, 1882, because-it appears from said evidence that the change made by said Fraser, by which he caused said shoes to be charged to him upon the books of the Barnum & Richardson Manufacturing Company, instead of to said firm, was done in order to avoid an accounting with the complainant for patent fees or royalties.”"

      From said findings and evidence the master states the following account under the second direction of the decree, viz: “Total shoes manufactured for Fraser & Chalmers by Barnum & Bichardson under Fraser’s license, and sold by Fraser & Chalmers, between May 14,1879, and March 1,1881,713,825 pounds; total shoes manufactured for Fraser by Barnum & Bichardson, and sold to Fraser & Chalmers by Fraser, 758,-825 pounds; total shoes manufactured and sold by Fraser & Chalmers under license of Fraser, 199,978 pounds; total shoes manufactured and sold by P. W. Gates’ Sons & Co., and the Gates & Scoville Iron Works, under license of Gates, 17,521 pounds.
    “The defendant, Fraser, and the witness W. J. Chalmers, who seems, from his evidence, manner and appearance, to be a shrewd, well-informed and careful business man, both say that the firm of Fraser & Chalmers was satisfied with a profit of one-half cent per pound, and while the profit on the sales made by Fraser & Chalmers at $4.20 per hundred pounds, where Fraser has been allowed only one-fourth cent royalty, would amount to but forty-five cents per one hundred pounds,—if he were allowed one-half cent royalty,— still, when all the sales of Fraser & Chalmers in any one year are taken into consideration, their average net profit would be more than one-half cent per pound, after paying to Fraser a royalty of one-half cent per pound.
    “The cost of manufacturing said patent shoes during the period in controversy, as appears from said evidence, is as follows: From May 14, 1879, to October 26, 1879, two and one-half cents per pound; from October 25,1879, to January 21, 1880, three cents per pound; from January 21, 1880, to February 13,1880, three and one-half cents per pound; from February 13, 1880, to June 29, 1880, three and one-quarter cents per pound; from June 29,1880, to July 24,1880, three and one-half cents per pound; from July 24, 1880, to September, 1882, three and one-quarter cents per pound.

      “From September, 1882, said shoes were manufactured by the firm of Fraser & Chalmers in their own foundry, but it does not appear during that period what was the cost of manufacturing said shoes. The prices obtained by the firm of Fraser & Chalmers in the sale of said shoes are shown, as are also royalties paid Mr. Fraser during that period, and from such cash prices at the different periods embraced in this accounting, and- the prices obtained for shoes from time to time, I have made computations, on which are based the' above conclusions. It also appears from said evidence, that a profit of ten per cent on this character of manufacture and sale of machinery is a good profit, and that the average profit of Fraser & Chalmers, after allowing said Fraser one-half cent royalty on all their sales, would be more than fifteen per cent on their investment. Another thing to be taken into consideration is, that the defendant, Fraser, has all along been a member of the firm of Fraser & Chalmers, having from one-half to a third interest in said firm; and it is not to be expected that Mr. Fraser would exercise that business sagacity and strictness with his own'firm that he would have taken with strangers.
    “Although I do not consider that it comes properly under the directions of said decree, at the request of the complainant’s solicitor I have made a computation of what the defendant, Fraser, might and ought to have received, by the exercise of good business prudence and sagacity, as royalty or patent fees upon shoes manufactured by him, as hereinbefore shown, ■as follows : Total number of pounds of shoes from which the ■defendant, Fraser, received royalty after May 14, 1879, as shown by said evidence and exhibits, 1,672,625; amount of royalty on above, at one-half cent per pound, $8363.12; less royalty received by complainant, $175.21; excess of Fraser’s over Gates' royalties, $8187.91. The complainant, Gates, by the foregoing conclusions, under the third direction in said deoree, should receive one-half of this excess, to-wit, $4093.95.”

      Fraser, by his solicitors, filed the following exceptions to the master’s report:
    “First—Defendant excepts to so much of said report as finds any sum due from said defendant to said complainant.
    “Second—Said defendant excepts to so much of said report .as charges him with royalty or license fees upon shoes manufactured by Barnum & Richardson for said defendant during the months of March to September, inclusive, A. D. 1882, namely, the sum of $2429.92, for the reason that the proof shows that said defendant did not receive any royalty or .license fee for the same, but made only a direct profit as .manufacturer.
    “Third—Said defendant excepts to so much of said report ■-as finds he could have received a royalty of one-half cent per pound upon all shoes made by the firm of Fraser & Chalmers, under his license, for the reason that the evidence doos not ■support said finding, and also for the reason that said finding is inconclusive, irrelevant, and not called for by the decree herein.
    “Fourth—Said defendant excepts to all the statements and reports of facts contained in said report, for the reason that they are irrelevant, incomplete, and not warranted by the evidence or called for by the decree, and he asks that the following facts, as shown by the evidence, may be also reported, if any facts are so reported by the master, viz: that the uniform cost of the manufacture of the shoes during the period in controversy was three and three-quarters cents per pound; that in all cases, with one or two possible exceptions, where defendant only received one-fourth of a cent per pound royalty, Fraser & Chalmers only got $4.20 per pound for the shoes; that after deducting said royalty of one-fourth cent, the net manufacturer’s profit to Fraser & Chalmers was j2^- or one-fifth of .a cent, which was at the rate of a trifle less than five per cent; that complainant testified, that under some circumstances twenty per cent was not an unusual manufacturer’s profit. It appears that the shoes licensed to be sold by complainant from May, 1879, to date, realized a manufacturer’s profit to the Gates & Scoville Iron Works Company, of which complainant was chief owner, of one and one-half cents to two cents per pound.
    “Fifth—Said defendant excepts to so much of said report as finds and makes any computation of any amount of royalty received, or that is claimed to have been received by him, above the amount which the evidence shows was received by him, for the reason that the same is not in accordance with the facts, and is uncalled for by the decree, and irrelevant, and if such report means to find that said defendant should so be held for the same, he excepts to said finding for the same reason.”
    Final decree sustaining the third and fifth exceptions of the defendant to the master’s report, and overruling other exceptions. Said report approved and confirmed except as to such portions of the same as relate to any finding or accounting by which there would be due to complainant more than the sum of $3190.98, and disregards and overrules that portion of said report which finds or makes an accounting of or relates to any further sum due complainant; finds there is due from the defendant, Fraser, to complainant, the sum of $3190.98, and directs payment of the same within ninety days; bill dismissed as to defendant Chalmers. Fraser appealed to the Appellate Court for the First District, and that court, on hearing, affirmed the decree of the circuit court. This appeal is prosecuted to reverse the determination of the Appellate Court. Errors were assigned presenting the questions discussed in the opinion.
    Messrs. Isham, Lincoln, Burry & Ryerson, for the appellant:
    If there was any partnership, it terminated when Gates became a bankrupt. Story on Partnership, 494, 495; Parsons on Partnership, 486-489; Fox v. Hanburg, Cowp. 445; Marquand v. Manufacturing Co. 17 Johns. 525.

      The alleged parol agreement falls within the Statute of Frauds. Packet Co. v. Sickles, 5 Wall. 580; Strehl v. Evers, 66 Ill. 395; Comstock v. Ward, 22 id. 248; Harris v. Porter, 2 Harr. 27; Boydell v. Drummond, 11 East, 142; Browne on Statute of Frauds, secs. 272-297.
    Part performance only affects the part performed. Swanzy v. Morse, 22 Ill. 63; Thomas v. Dickerson, 14 Bush, 90; Pence v. Pence, 28 Vt. 34; Lane v. Schackford, 5 N. H. 130.
    Joint owners of letters patent are under no liability to account to one another, or to divide with each other the profits arising from any use of their respective interests in the patent, unless they have expressly and legally agreed so to do. Vose v. Singer, 86 Mass. (4 Allen,) 226; DeWitt v. Manufacturing Co. 12 N. Y. (5 Hun,) 302; Clum v. Brewer, 2 Curtis, 506; Curtis’ Law of Patents, 186-191; Bump’s Law of Patents, 141; Finn v. Freeman, 136 Mass. 260.
    Mr. John W. Ela, for the appellee:
    Appellant having received a half interest in the patent, should be compelled to account to appellee for such license fees or royalties, according to the agreement. Such a contract is not within the Statute of Frauds. Fraser v. Gates, 9 Bradw. 624; Browne on the Statute of Frauds, sec. 279; Fenton v. Emblers, 3 Burr. 1278; Moore v. Fox, 10 Johns. 243; Lockwood v. Barnes, 3 Hill, 128; McLees v. Hale, 10 Wend. 426 ; Blake v. Cole, 22 Pick. 97; Kent v. Kent, 18 id. 569.
    Bankruptcy of one part owner of a patent, who has transferred a half interest in the patent to the other part owner, under such contract and such conditions and circumstances as exist here, does not absolve said other part owner from the performance of his part of such contract while he continues to retain his said half of the patent. Such contract passes to the assignee with the interest in the patent and other assets; and such part owner must account to the assignee of the assignee in bankruptcy (the appellee in this case) for the license fees received by him under the patent since the assignment. Fraser v. Gates, 9 Bradw. 624; Bump on Bankruptcy, (10th ed.) 693, and eases there cited.
    One half owner of a patent is liable in equity to account-to the other half owner for half of the license fees or royalties received by him for licenses issued under the patent, whether there was any special agreement between the parties or not. And the appellee is entitled to the relief sought in this case, even without regard to the special agreement. 1 Story’s Eq. Jur. secs. 466, 566; Pitts v. Hall, 3 Blatchf. 201; DeWitt v. Manufacturing Co. 66 N. Y. 459; Dunham v. Railroad Co. 7 Biss. 223; Parkhurst v. Kinsman, 6 N. J. Eq. 608.
   Mr. Chief Justice Scholfield

'delivered the opinion of the Court:

Although the question is not free from doubt, we think the-weight of authority is, that in case of joint patentees, neither is liable to account to the other for profits derived from the use of the patent, in the absence of a special agreement providing for such accounting. Washburn & Moen Manufacturing Co. v. Chicago Galvanized Wire Fence Co. 109 Ill. 71; Vose v. Singer Manufacturing Co. 4 Allen, 226; Dewitt v. Elmira Manufacturing Co. 12 N. Y. (5 Hun,) 303; Curtis’ Law of Patents, (4th ed.) secs. 186-191; Bump’s Law of" Patents, 141. But the preponderance of evidence here, in our opinion, establishes an agreement, whereby it was mutually agreed between Gates and Fraser, that in considera- ■ tion of the assignment of the invention by Gates to them, jointly, they would each bear one-half the expenses of obtaining the patent, and after the patent should be issued, that-they would mutually account, each to the other, for one-half' of the profits derived from its use. Gates testifies to this-effect, and he is corroborated by the direct testimony of Fargo,. and by the conduct and action of both himself and Fraser. Fraser’s denial is not sufficient to overcome this evidence.

The claim made by Fraser, that Gates was not the inventor, is not sustained by the evidence. The letters patent contradict the claim. Gates’ evidence contradicts it, and he is sustained by the corroborating statements of others. Fraser’s claim to be the inventor consists of a single remark,—which he says he made to Gates, but which Gates denies,—in the nature of a suggestion. It is said in Curtis on Patents, (3d ed.) 121, “that a person may be the real author of the plan of a complicated machine, or other invention which requires for its perfection the skill, and, to some extent, the inventive faculties, of workmen or engineers, in adapting the best means to the successful application of the principle. ”, The principle here was to make a hard iron shoe with a soft iron stem. There is no pretence but that, as to that principle, Gates was the inventor. But difficulty was experienced in making the two metals to mix. Fraser says he suggested, “Why not pour in the hard iron, and then pour in the soft iron, and fill up the place, ” and that ultimately this was done by Gates, and proved successful. The remark, when made, was not based upon actual knowledge, and was evidently intended as suggestive, merely, and until Gates, by repeated experiments, demonstrated that it was practical, Fraser did not know whether it was of value or not. But, at best, it related merely to the mechanical detail by which the principle previously conceived was to be made available. This will be illustrated by reference to Bloxam v. Elsee, 1 Carr. & Payne, 567, and O'Reilly v. Morse, 15 Howard, 62. Fraser acquiesced in this claim of Gates, permitted him to apply for a patent, as inventor, and accepted letters patent to Gates and himself, jointly, reciting that Gates was inventor.

Counsel contend it is absurd, if Gates were inventor, that he should assign one-half interest to Fraser. There is nothing, to our apprehension, absurd, or even unusual, in what Gates says was the arrangement between them. They were brothers-in-law, mutually interested in manufacturing mining machinery, etc., and each somewhat given to experimenting in inventions in the machinery they were manufacturing. Each was to have one-half interest in the inventions of the other. Any advantage which Fraser derived from this patent' might therefore be fully offset by advantages which Gates would derive from other inventions of Fraser. But the sharing in the expense of obtaining the patent, and the advantage of having a manufacturer to aid in introducing the patent to the public, under favorable circumstances might, alone, very reasonably afford a consideration for the assignment of one-half of the patent.

But, conceding an agreement proved, two objections are urged against its enforcement in this action: First, that it was not in writing, and is therefore insusceptible of being enforced, by reason of the Statute of Frauds; and second, that, at most, it was but an agreement of co-partnership, which terminated upon Gates becoming bankrupt.

We think the case is not affected by the Statute of Frauds, in two views authorized by the evidence: First, the contract, on one side, has been fully executed. The letters patent were issued in pursuance of the agreement, and the obligation to account for the profits results from the use of those letters, by virtue of the agreement, and ceases with the use. (White v. Murtland, 71 Ill. 251; Browne on Statute of Frauds, sec. 117.) Second, although the agreement was not expected to be performed within a year, yet, by reason of peculiar circumstances, it might have been performed within the year. Browne on Statute of Frauds, secs. 275, 276, et seq.

It is quite plain, the agreement was not an agreement of co-partnership, because neither has an interest in the use of the patent by the other. They are simply tenants in common, with the right to require each other to account for one-half the profits derived by them severally from the use of the patent. The agreement to account and pay over is a continuing consideration of the grant of the letters patent. Chitty on Contracts, (11th Am. ed.) 73. . Being continuing, it was unaffected by the bankruptcy of Gates,—Bump on Bankruptcy, (10th ed.) 493,—and the right to enforce it hence passed, upon the assignment in bankruptcy, to the assignee, and by the assignee’s deed back to Gates. Fraser’s relations to the letters patent have remained all the time unaffected, and his obligations in respect thereof must, consequently, also remain unaffected. The reasoning of the Appellate Court, in Gates v. Fraser, 9 Bradw. 631, meets with our concurrence, so far as relates to this part of the ease.

The rulings of the circuit court upon the exceptions to the master’s report we think correct, and we deem it unnecessary to review the evidence bearing upon the subject.

We find no sufficient ground in the record to warrant us in disturbing the decree below. It is therefore affirmed.

Decree affirmed.


author: Mr. Justice Craig

text:
    The People ex rel. George E. Bliss et al. v. The Chicago West Division Railway Company.

      Filed at Ottawa May 15, 1886.

    1. Stbeet bailway—grant of right of way for extension of railway track—of a condition which may exempt a company from performance. Am ordinance granting a city railway company the right to extend its railroad track from its then terminus to the city limits, required the track to be extended to a certain park, being a point short of the city limits, by a given time, and from that point on to the city limits as soon as the same could be constructed, operated and kept in repair without actual loss, and the company to accept the ordinance within ten days after its approval by the mayor. The ordinance was accepted, and the track was built and operated to the park. On mandamus to compel the building and operation of the track to the city limits, the answer showed that it could not be constructed, etc., without actual loss, which was admitted by demurrer to the answer: Heldr that the answer showed a good reason for not compelling the company to> build and operate such part of the road.
    2. Same—power of city authorities to change the terms of a grant after its acceptance. Where an ordinance of a city granting a railway company the right to construct and operate a track along a portion of a street, upon certain conditions, has been accepted, so that the ordinance as accepted constitutes a contract, the rights of the contracting parties will be governed by such ordinance, and the city authorities will be powerless to impose new and further conditions and burdens upon the railway company without its consent, such as the construction and operation of an extended line of its road, which it was not required to do under the original ordinance.
    3. Same—of a petition by property owners to grant right of way— whether any conditions are prescribed. Certain property owners in a city petitioned the city authorities to grant permission to a street railway company to extend its line to a point named, and requesting the city council to pass an ordinance, or to issue such order as it might legally issue, to compel such company to lay its tracks and run its cars upon said extended line without unnecessary delay: Held, that the petition did not request the grant of the permission upon any condition whatever, although the consent to the laying: of the track might have been made to depend on conditions which the council could not have disregarded.
    4. Mandamus—to compel corporation to build a street railway. Qucere,. whether a city railway company can be compelled, by mandamus, to construct and operate a line of railroad along a street in accordance with conditions in an ordinance which it has accepted, no such duty being imposed by its charter.
    Appeal from the Appellate Court for the First District;— heard in that court on appeal from the Superior Court of Cook county; the Hon. Joseph E. Gaby, Judge, presiding.
    Messrs. C. C. & C. L. Bonney, and Mr. L. M. Paine, for the appellants:
    Clause 90, section 62, of the city charter, is a limitation on. appellee, as well as on the common council, wherefore the-consent of the abutting property owners, shown herein, was-a prerequisite to the passage of the ordinance, without which said council would have had no jurisdiction, and so much of said ordinance as does not conform to the petition of said property owners is ultra vires and void. That clause is a legislative inhibition against granting “the. use or right to lay-down any railroad tracks in any street of the city to any steam or horse railway company, except on a petition of the owners of the land representing more than half of the frontage of the street, or so much thereof as is sought to be used for railroad purposes. Hickey v. Railroad Co. 6 Bradw. 184; McCartney v. Railway Co. 112 Ill. 639 ; Roberts v. Easton, 19 Ohio St. 86.
    Having shown that the mere naked consent is a prerequisite, we say the property holders may qualify the consent in any way or with such conditions as they may see fit. People v. Dutcher, 56 Ill. 148; People v. Glann, 70 id. 234; Railway Co. v. Barnett, 85 id. 321; People v. Clayton, 88 id. 46; People v. Waynesville, id. 477; People v. Holden, 91 id. 450.
    Appellee is bound to use the entire privilege as contained, in the consent and in section 1 of the ordinance. Hickey v. Railway Co. 6 Bradw. 181; State v. Railway Co. 29 Conn. 546 ; People v. Railway Co. 37 How. Pr. 430 ; People v. Railway Co. 24 N. Y. 267.
    That railway companies and other corporations may be-compelled to perform the duties imposed on them by public: law, see Hawthorn v. People, 109 Ill. 311; Railway Co. v. People, 105 id. 661; Dunne v. People, 94 id. 141.
    Mr. C. Beckwith, for the appellee:
    The relators have no such interest in the construction, maintenance and operation of the railway from Lawndale to the city limits as entitles them to a writ of mandamus. The city of Chicago is the proper party to enforce contracts made with it.

      Mandamus is not an appropriate remedy to enforce an obligation imposed by contract. Appellee’s obligation to construct and operate its road from Lawndale to the city limits 'depends upon whether this can be done without actual loss.
    The consent of the property holders for the use of the street is not subject to any condition.

      The ordinance, when accepted, became a contract between the appellee and the city, which neither party may violate. By that contract the city agreed that the appellee should not be required to construct, maintain and operate a railway upon that end of the line until it could be done without actual loss.
   Mr. Justice Craig

delivered the opinion of the Court:

The Chicago West Division Bailway Company, under the terms of its charter, was authorized to construct, maintain and operate a single or double track railway along such streets in the west division of the city of Chicago as the common council shall, from time to time, authorize, upon such terms and conditions, and with such rights and privileges, as the council has, or may, by contract, prescribe. On the 2d day of August, 1880, a petition was signed by a majority of owners of land, representing more than one-half of the frontage on Ogden avenue, between Western avenue and the city limits, and presented to the common council, in which the common council was requested to grant the Chicago West Division Bailway Company permission to lay its tracks upon Ogden avenue, from Western avenue to Crawford avenue. No conditions were prescribed in this petition, but it contained the request that the common council would also pass such ordinance, or issue such order, as may be legally authorized, to compel the railway company to lay its tracks and run its cars upon the extended line, without unnecessary delay, after permission is given to occupy the streets. On the 7th day of August, 1881, the common council passed an ordinance, section 1 of which authorized the railroad company to extend its line of road from its present" terminus, at or near Western avenue, to the western limits of Chicago. Section 2 is as follows: “Said permission and consent to extend shall be conditional upon the acceptance by said Chicago West Division Bailway Company, of this ordinance, within ten days after its passage, and approval by the mayor, and their agreement to comply with all its conditions; and upon the further conditions that said tracks shall be laid and in actual operation from Western avenue to the western line of Douglas Park on or before the 1st day of June, 1881, and from the western line of Douglas Park to Lawndale, as soon as the same can be constructed, operated and kept in repair without actual loss.” On the 23d of February following, the railroad company filed in the office of the city clerk its written acceptance of the ordinance. The road has been constructed, and is in operation, from Western avenue to Douglas Park, and the question presented by this record is, whether the railway company can be compelled by mandamus to construct and operate a line of road from Douglas Park to Lawndale.

In the answer to the petition, the railway company, among other things, denied that the extension of its line from Douglas Park to Lawndale ever could have been or could then be constructed, operated and kept in repair without actual loss. To the answer the petitioner demurred. The court overruled the demurrer, and as the petitioner abided by the demurrer, the writ was dismissed.

Whether a railway company can be compelled to construct and operate a line of railroad, by mandamus, may w'ell be doubted, but we do not find it necessary to decide that question, as the decision of the case may properly be placed upon other grounds. It is not claimed that the charter, under which the railway company derived its corporate powers, of itself imposed the obligation to construct this particular line of road, but the obligation, if any exists, arises from the ordinance adopted by the city of Chicago, and the acceptance of its provisions by the railway company. This being the case, an examination of the terms and conditions of the ordinance, and its acceptance, seems to be necessary to determine, the rights, the duties and obligations of the parties.

As said before, the first section of the ordinance authorized the railway company to construct and operate a line of road on Ogden avenue, from Western avenue to the western limits of the city. The second section imposed the conditions: 'The first requires the acceptance of the ordinance by the railway company within a specified time. Second, that the tracks shall be laid and the road in operation from Western avenue to the western line of Douglas Park on or before the 1st day of June, 1881; and third, from the western line of Douglas Park to Lawndale, as soon as the road can be constructed, operated and kept in repair without actual loss. These, alone, were the conditions imposed by the city of Chicago upon the railway company when it accepted the ordinance and agreed to be bound by its terms and conditions, and it is plain that other and additional conditions could not be imposed without its consent. Under the ordinance which was accepted by the railway company, it was not bound to construct and operate a line of road from Douglas Park to Lawndale until it could be built, operated and kept in repair without actual loss. In the answer, which is admitted to be true by the 'demurrer, it is clearly alleged that the road can mot be constructed and kept in repair without loss. With this conceded fact in the record, i-t seems too plain for argument that no obligation rests on the railway company to construct and operate this part of the road.

But it is set up in the petition, that on the 4th day of August, 1884, the city of Chicago passed an ordinance requiring the railway company, within sixty days after being notified of the action of the city, to extend its line of road to Lawndale. This evidence can have no bearing on the question involved. In the original ordinance, no right, to alter or change the terms upon which the railway company accepted the terms of the ordinance, was reserved, and in the absence of such reservation we are aware of no principle upon which the city, without the consent of the railway company, can impose upon it other and additional obligations. When the common council gave the railway company permission to occupy the streets of the •city, it then had the right to impose such conditions in regard io the time within which the line of road should be completed, as in its judgment the public interest of the city required, but after it had acted and its terms had been accepted, it would be manifestly unjust and unwise to allow the common council arbitrarily to impose other and different terms. Doubtless the common council, notwithstanding the grant to the railway ■company of the right to use the streets, retained full power ■and authority over the streets to improve them, and use them for all purposes for which they were dedicated to public use. But that reserved power conferred no right on the common •council to compel, by ordinance, the construction and operation of a street railway.

The petitioner, however, concedes, in the argument, that he is bound by the ordinance which was accepted by the railway company, in so far as it conforms to the consent of a majority •of the land owners, but he insists that section 2 of the ordinance, which provides for the building of the road to Lawn-dale as soon as the same can be constructed and operated without loss, is void. This position is founded on a misconception of what we conceive to be a fair and reasonable construction to be placed upon the written consent submitted by ihe land owners to the common council, upon which that body acted when it passed the ordinance. The petition is addressed to the mayor and common council, and after reciting that petitioners are a majority by frontage of those owning property on the q>roposed line, proceeds: “Being desirous of having the West Division City Bailway Company extend its line from its present terminus to or beyond Douglas Park, * * * ■petition * * * your body to grant permission to said company to lay their tracks upon Ogden avenue, from Western avenue to Crawford avenue. And your petitioners would further * * * request your * * * body to pass such ordinance or issue such order as you may be legally authorized to do, to compel said company to lay its tracks and run its cars upon- said extended line without unnecessary delay, after you have authorized it so to do. ” This is the document which led to the passage of the ordinance, section 2 of which it is said is void, as not being authorized by it. It is true, that the property owners might have inserted such conditions in their assent as they thought proper, and the common council might have been powerless to grant the railway company permission to occupy the streets except upon the conditions specified by the property owners in their consent, but the paper does not seem to contain conditions. The grant of the right was not requested upon any condition. The latter part of the paper expresses a request that the railway company might be required to lay its tracks and run its cars without unnecessary delay, but consent is not given on this condition or even any other condition. Under the consent, as expressed in the writing, the common council possessed the power to act as in their judgment the best interests of the public required. This they did by the passage of the ordinance, and it is not for the courts to say that the ordinance, as framed, passed, and accepted by the railway company, was wise or unwise. It is enough that the common council were authorized to pass the ordinance. Their discretionary power as to its terms and conditions is not a subject of review.

Other matters, not however of controlling importance, have been discussed, but it will not be necessary to follow the argument in detail. We perceive no ground upon which the petition can be sustained.

The judgment of the Appellate Court will be affirmed.

Judgment affirmed.