Smith v. Darby

G-kason, J., delivered the opinion of the Court. The object of this suit is to enforce a trust against the executors of John McKee, which, it is alleged, was created by him in his life-time, in favor of the three infant children of his son Leander McKee. The proof shows that Leander, before and at the time of his death, was indebted to his father in the sum of four thousand dollars, and that John McKee had repeatedly expressed the intention not to collect that sum from Leander, but to secure it to his, Leander’s children. After Leander’s death, John McKee had some correspondence and frequent conversations with William M. McDowell, who was the agent of Leander’s administratrix in the settlement of his estate, in relation to the sum thus due him, and the best method of investing it for the children, and it was finally determined that the money should be lent to McDowell; the loan was accordingly made to him; the evidences of Leander’s indebtedness were delivered up to McDowell to be cancelled, and ²⁷⁷ the latter executed and delivered to John McKee the note or single bill, a copy of which is set out in the record.

This note was drawn at the request and under the direction of John McKee, and was executed and delivered to him on the seventeenth day of April, 1866. It appears that this note was taken up by the substitution of another note of McDowell for the same amount, dated October 19th, 1867, and made payable to “ John McKee, or order.” It farther appears that John McKee became uneasy about" the safety of the investment, and that in January 1868, he wrote to McDowell requesting security or payment. McDowell had offered to have his life insured for five thousand dollars and to transfer the policy to John McKee as collateral security for the loan to him. This was declined, and nearly the whole sum was paid to John McKee in his life-time, and the small balance then remaining, was paid to bis executors after his death.

It also appears that John McKee, by his will, bequeathed the sum of six thousand dollars to Leander’s children. In the argument of the case three questions were presented for our consideration ; first, was there a valid trust created by John McKee in favor of Leander’s children of this sum of four thousand dollars ? second, was the bequest of six thousand dollars to those children by John McKee’s will a satisfaction of the trust, and third, if the trust is valid and not satisfied, what interest ought to be allowed on the trust fund against John McKee’s estate? First. It is a well established principle that a parol declaration of a trust of personal estate is sufficient.

This was admitted in the argument ; but it was contended that in this case no trust had been completed, so as to be capable of being enforced, because John McKee had not signed his name to the single bill executed to him by McDowell; had retained possession of it, instead of delivering it to the children, or to some person for them, and had never given them notice of the trust. The note was ²⁷⁸ prepared at the instance and under the instructions of John McKee for the express purpose of securing the payment of the money for the use of the children, and by its very terms the money was to be paid to him as trustee for the children, aDd he,.well knowing its contents,- accepted it from McDowell. . By so doing he constituted himself trustee for the children, of the money, for which the note was given, as fully and completely as if he had signed a written declaration of the trust. It was not necessary to the validity of the trust that he should have signed his name to the note, or notified the children of the existence of the trust, or have delivered the note to them, or to some person for them.

Pye, Ex parte. Dubost, Ex parte, 18 Ves., 145; Cox vs. Sprigg, 6 Md., 284 ; Gardner vs. Merritt, 32 Md., 84 ; Wheatley vs. Purr, 1 Keen, 558. If John McKee had designed to revoke the trust at the time he took the note payable to himself or order, in the place of the single bill which was