McCormick v Grogan [1869] UKHL 1

UKHL

McCormick v Grogan

[1869] UKHL 1 · 1869-04-23

It is averred by the Appellant that Mr. Grogan having been so informed of the letter as well as of the will, he acted in such a manner as to bring himself within the operation of the rule which has been long established in Equity, that a person apparently taking property by devise or bequest from a testator with this knowledge of the existence of another instrument, which he actually or impliedly undertakes to carry into effect, will be fixed as trustee with the performance of such instructions and directions as are given in that other instrument. Mr. McCormick, the Appellant, therefore, says that this annuity of £10 a year was by those instructions and that letter directed to be given to him, and that Mr. Grogan was informed, from the first, if not of the exact contents of that letter, yet of its existence, as a letter which was to guide and direct him in carrying into effect the testator's instructions, though unexpressed in the will; and that Mr. Grogan impliedly undertook to execute the instructions in that letter, and by not performing that undertaking, committed a breach of trust.

Now this doctrine has been established, no doubt, a long time time since upon a sound foundation with reference to the jurisdiction of Courts of Equity to interpose in all cases of fraud; and therefore if, for example, an heir said to a person who was competent to dispose of his property by will, "Do not dispose of it by will, I undertake to carry into effect all such wishes as you may communicate to me." And if the testator, acting on that representation, did not dispose of his property by will, and the heir has kept the property for himself, without carrying those instructions into effect, the Court of Equity has interposed on the ground of the fraud thus committed by the heir in inducing the testator to die intestate, upon the faith of the heir's representations that he would carry all such wishes as were confided to him into effect. And the Court has said that the heir shall not be allowed to hold the property otherwise than as trustee for those with regard to whom the testator gave him the directions in question. So again, if a legatee states to the testator that upon the testator's confiding his property, apparently disposing of it, to him, the legatee, by a regular and formal instrument, he will carry into effect all such intentions as the testator shall confide to him, then that legatee, although he apparently may be held in law to take the whole interest, shall have fastened upon his conscience the trust of carrying into full effect those instructions which he received upon such representations as I have described. And, farther than that, such an undertaking or promise on the part of the legatee has been held, in some cases, to be capable of being inferred from the conduct of the person when secret instructions have been communicated to him by the testator, which conduct has been held by the Court to be equivalent to an undertaking or promise on his part that he will abide by the instructions so communicated to him.

But this doctrine evidently requires to be carefully restricted within proper limits. It is in itself a doctrine which involves a wide departure fi om the policy which induced the Legislature to pass the Statute of Frauds, and it is only in clear cases of fraud that this doctrine has been applied - cases in which the Court has been persuaded that there has been a fraudulent inducement held out on the part of the apparent beneficiary in order to lead the testator to confide to him the duty which he so undertook to perform.

Now, in the case before us, Mr. Grogan, the Respondent, undoubtedly stands in a very favourable position in this matter. The will was made three years before it was communicated to him. He in no way induced the testator to appoint him sole executor and sole legatee of the whole property. On the contrary, it appears from the evidence that he was somewhat surprised when he was informed of the fact. There is therefore no anterior act on the part of Mr. Grogan which should induce the Court to come to the conclusion upon imperfect evidence of any fraud having been meditated and perpetrated on his part. He is therefore entitled to the benefit of having his conduct regarded as that of a man who stands perfectly rectus in curiâ at the outset of the transaction.

The will is kept by the testator for the period I mentioned with out any communication with Mr. Grogan . On the day of his death he appears to have sent for Mr. Grogan, and to have communicated to him for the first time that he had been made sole devisee and legatee and sole executor. From all that we can judge by the evidence we have in the case (which certainly, in the peculiar circumstances of the case, is only the evidence of Mr. Grogan himself), it would seem that the whole matter might have rested there, as it had rested for three years before, without any farther communication being made to Mr. Grogan, except for an exclamation on his part which indicates, so far as any judgment is to be formed upon his conduct, a sense of moral right and propriety that does him credit. He was aware that the testator had many relations and friends, and when he was thus informed that the whole property was bequeathed to him, he said, "Is it right?" Except for that observation on his part, we have no reason to suppose that anything more would have been communicated to him than had been communicated during the three years previous. That observation having been made, the testator said that he would not have it otherwise.

Now from the expression so used by the testator, it appears to me, I confess, that he wished at once to indicate that he had formed a fixed determination to deal with his property in the mode in which he has dealt with it by his will, and there was nothing in that expression which could possibly lead Mr. Grogan to infer that there was any other purpose in the mind of the testator than that which he had formed (as it now appears) several years before, although that fact was not then communicated, and which he now informed Mr. Grogan it was his fixed determination to carry into effect. "The testator said he would have it no other way; and then, after two or three minutes' pause, he said I should find the will in his desk and the letter with it. I said I did not know which was his desk. There were several desks in his office, and I did not know which it was. He said that his brother John would shew me. I said that I hoped he was getting better, and that it was time enough to look after that, or something to that effect. That is, as near as I can recollect, what took place."

Now I think that we have here really a statement of all that passed. There is a great deal of cross-examination as to what impression was made on Mr. Grogan's mind by this communication, and this statement on the testator's part that the letter existed and was to be found in the desk. But I think we have reason to believe that all the words spoken, and the whole of the res gestæ, are exactly before us; and I think this remark may be made in Mr. Grogan's favour, that it was in his power undoubtedly, were he a dishonest man, being the only person present on that occasion, to have narrated just as much or just as little as he pleased of what took place at that interview.

I think, therefore, we are bound to hold that he has disclosed all that then took place. And our judgment is to be formed upon that transaction; and we have to consider whether or not that conversation, coupled with the existence of the letter found in the same envelope with the will, brings the case within the rule of Equity to which I have referred. My Lords, I confess it appears to me that we should be pushing that rule to an extremely dangerous extent if we came to any such conclusion.

There has been a great deal of dexterity and skill shewn in the cross-examination of Mr. Grogan. I cannot myself see that there was any error, or mistake, or misapprehension, on the part of the learned counsel who cross-examined him in his mode of putting his questions. On the contrary, they appear to me to have been put with great skill. And all that he elicited was this, that Mr. Grogan states that he thought that the letter was connected with the testator's property. That has been turned about in the argument in a vast variety of modes. Mr. Jessel has endeavoured to persuade us that when Mr. Grogan said that he thought that that letter was connected with the testator's property, that was equivalent to his admitting that he thought that the letter was connected with the disposition of the testator's property, and that he therefore was content to acquiesce in taking the testator's property on the condition of performing all that might be found within the four corners of that letter.

Now, if you look at the whole conversation that passed, I think it comes to no more than this, that Mr. Grogan was startled at finding that the whole of this property was given to him by the testator, and that he felt a certain amount of scruple about it. But he had not brought about that state of things; and, so far, this case is wholly outside the authorities to which I have referred. He had been in no way instrumental in producing this result, but, being struck with it, he put it to the testator whether it is right that this shall be done. The testator tells him:

"I will not have it in any other way."

That being so, there was everything to confirm Mr. Grogan in the belief of this being the testator's intention and determination. And then, a few minutes afterwards, the testator makes the additional remark:

"You are to be my executor; you will find my will, and you will find a letter with it."

And Mr. Grogan, in his cross-examination, says:

"I thought that the letter would be found to have relation to the testator's property."

That was a very natural conclusion to form; but I do not think that in any part of the subsequent cross-examination there is anything that would justify us in coming to the conclusion that this gentleman believed that the letter contained directions which he should be in any way bound to execute. Upon this subject there is this answer, upon which some reliance has been placed. It is in answer to the 46th question, which was put to him by the cross-examining counsel:

"You left him under the impression that you would see his intentions that were stated in the letter carried out?" (Answer): "

My impression was at the time that he purposely did not tell me the contents of the letter."

The argument before us has turned very much upon this, that Mr. Grogan is said to have been fencing with the questions put to him, and that whenever a difficulty was pressed upon him with respect to his knowledge or suspicion of the contents of the letter, from the mode and style of the testator's conversation respecting it, he always evaded it by saying:

"I do not know the contents;" or, as in this instance, "

I thought that he purposely avoided telling me the contents of the letter." Now, looking at the whole of the cross-examination, and the state of the facts which occurred at the time of this transaction, and the state of facts anterior to this conversation, with regard to Mr. Grogan's not having in any way brought about this state of things, I think that when all these circumstances are considered together we are bound to accept the evidence of Mr. Grogan as he gives it, namely, that upon being left for half an hour with his dying, friend he was informed, for the first time, of his having left him his whole property, and his first impression, like that of an honest man, was:

"Is the thing right?"

In reply to which he is told that it must necessarily be so. And he is informed of the existence of the will, and of the existence of the letter to be found with it. And when he is called upon to ransack his memory eleven and a half years afterwards, it is not surprising that nothing more can be brought out than his statement that he thought that it related to the will.

I think that in such a meagre state of evidence, it would be carrying the doctrine to which I have referred much too far to apply it to the case of a person who has shewn no complicity in getting the will made, and who, upon the first communication which he received on the subject, seems to have sought to induce the testator to make a different arrangement, and is then informed that it is the testator's fixed determination to persevere in the arrangement which he has made. It would be a great deal too much to say that such a case can be brought within the scope of the authorities to which I have referred.

But there is a farther reason in my mind - my impression, he says, at the time was that the testator purposely did not tell me the contents of the letter. I do not think that we can fairly say that this gentleman, being pressed as he was in cross-examination by counsel, had the bearings of all the facts of the case prominently before his mind. Yet what do we find when we look at all the facts of the case, and at that letter. We find that the testator in that very letter expresses his desire that the letter should not be shewn by Mr. Grogan to anyone else, but that he should act upon it entirely according to his own judgment. I am not now introducing the second part of the case. I am only mentioning this now because it tallies exactly with what Mr. Grogan states to be his impression of the result of the conversation:

"He told me that there was a letter in his desk, which I supposed had something to do with his property, but, as far as I could tell, he was desirous of not explaining what the contents of the letter were."

I take that statement of Mr. Grogan's to be really an honest statement on his part of the facts. If you choose to say (which is the most that can be said upon the subject) that possibly it covered some little degree of self interest, regard being had to the increase in the value of the property, I think that it would be very unjust to press that to any extent with regard to a gentleman who seems to have been entirely unmixed with the transaction in its first inception; but, giving every possible weight to the effect which his position of interest might have upon his mind, it seems to me that the learned Lord Chancellor of Ireland, who first decided this case, drew an inference from the evidence which went far beyond what the evidence itself would justify.

But we are told that it is not right to mistrust the weight of a judgment formed by a Judge of great eminence, who saw the witness and noticed his demeanour, and might gather much from that demeanour; and that we cannot have the same advantage in forming our conclusions. Now I confess that that remark would have had more weight with me, if it had not been for the concluding observations of the learned Judge, which, I must say, have impressed my mind with a doubt as to whether he was not influenced by considerations which have nothing whatever to do with the demeanour of the witness; and which, as far as I am competent to form a judgment upon them, lead in exactly a contrary direction to the conclusions of the learned Judge. He seems to have been impressed with the circumstance that this gentleman did, to a certain extent, carry into effect the arrangements described in this letter of instructions. Now that appears to my mind the most natural thing in the world, it seems to be perfectly consistent with the character of a correct and honest man, which we must assume him to be until the contrary is shewn. Finding himself thus placed in a position which was in no way of his own seeking, and finding this letter of his friend, he has, to the best of his judgment, carried those instructions into effect, with the desire, doubtless, of doing that which he would think it right and reasonable to do, though under no possible legal obligation to effectuate intentions which were not properly and legally conveyed to him.

Now, with regard to the second part of the case, having formed this opinion upon the first part, it will not be necessary perhaps to say much beyond shewing how the instructions themselves, when they came to be looked at, really very strongly support the correctness of the conclusion that I have arrived at as to the whole result of the communications between the testator and Mr. Grogan on the day of his death. The instructions on their very face appear to bear this interpretation, that it was the testator's intention to leave Mr. Grogan sole and complete master of his property. Now, in the first place, what other theory is there that can give any account of his taking this singular mode of disposing of his property, except that he did not intend the instructions to have legal effect? There was no charitable trust concealed, nor any other trust of any sort which the testator was desirous of keeping back, because either the trust might be illegal, or he might have doubts of its legality. There was no question of perpetuity, or anything else which could render it in any way more desirable for him, instead of effectuating his intentions in a proper and legal manner; by expressing them in a regular instrument, to do it in this strange and circuitous mode of giving the whole property to one man, and leaving an instrument utterly inoperative in law for carrying his intentions into effect. When you look at this instrument, and see the mode in which it is framed in its several parts, beginning with something which certainly looks like express gifts, and then qualifying those gifts in the very extraordinary manner in which he does quality them afterwards, I think the letter itself, and all the circumstances attending it, lead to the conclusion that it was the full intention of the testator, uninduced by anything except that it was his own wish so to deal with his property, to give Mr. Grogan full and complete control over the property, and to leave the instructions simply as a guide which might assist him in the discretion which he would himself exercise. In fact, what I believe to have been his intention is better expressed than I can myself express it in the words of the Court of Appeal when reversing the decision of Lord Chancellor Blackburne . It is there said by

the Lord Justice of Appeal:

"If we could look into the thoughts of Abraham Walker Craig as they were at the moment when he was inditing the will and letter, I am persuaded that what we should find there would be a purpose to this effect, to set up after his decease not an executor or a trustee, but as it were a second self, whom, while he communicates to him confidentially his ideas as to the distribution of his property, he desires to invest with all his own irresponsibility in carrying them into effect."

That, I think, is not by any means an unjust description of the instrument in question, because, after giving various gifts, and then speaking of a particular class of children, he says:

"Should any of them die before their mother, and not leave children, then the share of the deceased to go to the survivors in equal proportions, or in whatever proportion you may consider them deserving of."

That was commented upon by Mr. Jessel as shewing that the expressio unius in one case was to be taken as an exclusion of other cases, but I do not think that is the true interpretation of the words. Then he goes on to say, "after arranging for the due payment of the foregoing in whatever manner you may think best, I wish the remainder of my property to go to yourself and to my brothers Thomas, James, and John in equal proportions, and to be sold or not as you may consider best for the benefit of all parties. I do not wish you to act strictly to the foregoing instructions, but leave it entirely to your own good judgment to do as you think I would if living." So far it might be said that that had reference only to the management of the property, but then follow these words, "and as the parties are deserving, and as it is not my wish that you should say anything about this document, there cannot be any fault found with you by any of the parties should you not act in strict accordance with it." What can that mean but this:

"I do not intend to fetter you by these instructions. I desire you not to produce them. I wish to give nobody any control or power over you. I wish to leave you entirely to your own discretion as to whether you think the parties to be or not to be deserving."

The character of that instrument appears to me materially to assist the view which I have taken of the evidence that Mr. Grogan gives with respect to the whole transaction between the testator and himself, namely, that the testator said to him, "You, Mr. Grogan, are to have the whole of my property." And when questioned as to whether that was right, he said, "I will not have it in any other way; you shall have the whole of my property;" then telling him that he would find the will and the letter with it, but purposely saying nothing whatever about the contents of the will or of the letter, because he knew that in that letter he had left it to Mr. Grogan to act entirely as he thought fit as his alter ego, and to give to the parties as he thought they deserved.

It appears to me, therefore, my Lords, that the judgment of the Court of Appeal in Ireland was a correct judgment, and that it properly reversed the anterior decision which had been come to by the Lord Chancellor, and it is a decision which I should advise your Lordships to affirm, and I think that, under all the circumstances, it should be affirmed with costs.

LORD WESTBURY :-

My Lords,

I should not deem it necessary to add anything to what has fallen from my noble and learned friend, were it not for the feeling of respect which I entertain for the able arguments of the counsel for the Appellant.

My Lords,

the jurisdiction which is invoked here by the Appellant is founded altogether on personal fraud. It is a jurisdiction by which a Court of Equity, proceeding on the ground of fraud, converts the party who has committed it into a trustee for the party who is injured by that fraud. Now, being a jurisdiction founded on personal fraud, it is incumbent on the Court to see that a fraud, a malus animus, is proved by the clearest and most indisputable evidence. It is impossible to supply presumption in the place of proof, nor are you warranted in deriving those conclusions in the absence of direct proof, for the purpose of affixing the criminal character of fraud, which you might by possibility derive in a case of simple contract. The Court of Equity has, from a very early period, decided that even an Act of Parliament shall not be used as an instrument of fraud; and if in the machinery of perpetrating a fraud an Act of Parliament intervenes, the Court of Equity, it is true, does not set aside the Act of Parliament, but it fastens on the individual who gets a title under that Act, and imposes upon him a personal obligation, because he applies the Act as an instrument for accomplishing a fraud. In this way the Court of Equity has dealt with the Statute of Frauds, and in this manner, also, it deals with the Statute of Wills. And if an individual on his deathbed, or at any other time, is persuaded by his heir-at-law, or his next of kin, to abstain from making a will, or if the same individual, having made a will, communicates the disposition to the person on the face of the will benefited by that disposition, but, at the same time, says to that individual that he has a purpose to answer which he has not expressed in the will, but which he depends on the disponee to carry into effect, and the disponee assents to it, either expressly, or by any mode of action which the disponee knows must give to the testator the impression and belief that he fully assents to the request, then, undoubtedly, the heir-at-law in the one case, and the disponee in the other, will be converted into trustees, simply on the principle that an individual shall not be benefited by his own personal fraud. You are obliged, therefore, to shew most clearly and distinctly that the person you wish to convert into a trustee acted malo animo. You must shew distinctly that he knew that the testator or the intestate was beguiled and deceived by his conduct. If you are not in a condition to affirm that without any misgiving, or possibility of mistake, you are not warranted in affixing on the individual the delictum of fraud, which you must do before you convert him into a trustee.

Now are there any indicia of fraud in this case? The first thing which it is incumbent on the party to make out is, not only that the testator communicated to Mr. Grogan that the letter contained some directions touching the ownership of his property different from what appear on the face of the will, but you must also prove that the testator considered that Mr. Grogan had accepted the obligation, and had made a promise to carry those different dispositions into effect. But, when we examine the evidence, it amounts merely to this, that Mr. Grogan, like an honest man, at first expressed his surprise, and even remonstrated with the testator as to the disposition which he had made. The testator is not represented as telling Mr. Grogan, "That disposition is not the real one, the real disposition is contained in the letter." But the testator asserts that he will have no other disposition made of his property; and the meaning of that is very clearly shewn (as was observed by my noble and learned friend) when you connect the letter with the will, from which it is plain that the testator meant, "I will not have any other disposition than that; I place you in my shoes, and give you the absolute dominion over my property which I have myself, and leave you at liberty to carry out my present wishes, or not to carry them out, according to your discretion, which shall be absolute and uncontrolled." Even if that letter had been communicated to Mr. Grogan there would have been no trust in favour of any individual. But there is nothing in the evidence that amounts to more than this - that the testator told him, "I will have my property disposed of in the way in which I tell you I have disposed of it by will, and you will find a letter in connection with my will." And when we come to the evidence, there is nothing to be extracted from that evidence that can be carried beyond this, - that the individual to whom those words were addressed supposed, and naturally supposed, that the letter would have some connection with the property. My Lords, it is impossible to hold that that amounts to a distinct promise, the breach of which would constitute a fraud; for you cannot constitute a fraud in this matter unless you find that there is a distinct and positive promise, the non-fulfilment of which brands the party with disgrace as having personally imposed on the testator. There is nothing, I repeat, in the circumstances of this case that would warrant us in arriving at that conclusion; and there is nothing, therefore, to justify the Appellant in coming here to fasten that personal imputation upon the Respondent, and then to derive from that a conclusion of trust in favour of himself.

I am sorry that I am compelled to accede to the motion of my noble and learned friend, that this appeal should be dismissed with costs; but it is absolutely necessary that it should be so, because it is a case where a right of property is claimed, and is sought to be enforced through the medium of fastening an imputation of fraud, for which there is no justification. Cases of that nature eminently deserve to be dismissed with costs, and such, I apprehend, will be the conclusion to which the House will come in this case.

LORD COLONSAY concurred.

LORD CAIRNS :-

My Lords,

I entirely concur in the motion which has been made, and in the observations that have been made by those of your Lordships who have spoken.