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1938 Supreme(SC) 1
Privy Council At Newfoundland
Maugham, Wright, Russell of Killowen, Thankerton, Justice Lord Atkin, JJ.
Martin Cashin and others -Appellant
Versus
Peter J. Cashin -Resopndent
Appeal No. 16 of 1937
Decided On : 13-01-1938
B.J. Mackenna, H.A. Winter, Walter Monkton, Lawrence Jones and Co., Overy, Allen, R.O. Wilberforce
A family arrangement entered into without fraud or concealment is binding in equity, even if the parties misunderstood their legal rights. Furthermore, a person of full capacity who has the opportunity to read a deed is bound by it regardless of whether they actually read it.
Headnote:(A) Family Arrangements - Validity of agreements - Where family agreements are fairly entered into without concealment or imposition, and with no suppression of truth or suggestion of falsehood, a Court of equity will not disturb the agreement even if the parties misunderstood their situation or were mistaken as to their rights.
(B) Execution of Deeds - Binding nature - A person who is neither blind nor illiterate, where no fraudulent misrepresentation is made, and who has ample opportunity to read a deed, is bound by the execution of said deed regardless of whether they actually read or understood it, provided the plea of non est factum is not open.
(C) Fiduciary Position - Release of claims - A release of a doubtful claim against a spouse in a family arrangement does not constitute an improper release to a fiduciary if the spouse was not acting as a trustee and the agreement was not tainted by undue influence.
Facts of the case:
A testator attempted to gift bonds to his spouse by transferring the lease of a safety deposit box to her, although he continued to collect the interest during his lifetime. Upon his death, the estate was insufficient to cover legacies. A deed was executed as a family arrangement whereby the spouse agreed to provide funds to cover the legacies and death duties in exchange for the children releasing any claims to the bonds. One of the children later sought to set aside the deed, alleging it was based on misrepresentations and a failure of full disclosure regarding the validity of the original gift.
Findings of Court:
The court found that there was no concealment of material facts or misrepresentation. The party seeking to set aside the deed was a person of experience and capacity who was aware of the facts surrounding the collection of interest and the claims made by the revenue authority. The transaction was not unfair, as it was a release of a doubtful claim.
Issues: Whether a family arrangement deed can be set aside on the grounds that it was a release to a fiduciary based on inaccurate statements, or that it was an agreement uberrima fidei requiring full disclosure which was not provided.
Ratio Decidendi: The court held that equity will not interfere with a family settlement entered into in good faith, even if the parties were mistaken about their legal rights. Since the respondent had the capacity to contract and the opportunity to read the deed, and since no fraud or concealment was proven, the deed remained binding.
Result: Appeal allowed.
Legal Category Hierarchy
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equity
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family arrangements
- validity and fairness
- misrepresentation and concealment
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family arrangements
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property law
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gifts
- imperfect gifts
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gifts
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contracts
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execution of deeds
- non est factum
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execution of deeds
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tax law
- death duties
Lord Maugham:-
This is an appeal from the judgment of the Supreme Court of Newfoundland (Sir William H. Horwood C.J. Kent J. and Higgins J.) given on 8th January 1937, dismissing by a majority (Kent J. dissenting) an appeal from the judgment of Sir William H. Horwood C. J. given on 21st July 1936. By the judgment it was ordered that an agreement under seal dated 8th September 1927, to which the appellants and the respondent were parties be set aside, and declared to be null and void. The agreement under seal dated 8th September 1927, (which will be referred to as "the deed") related to the estate of Sir Michael P. Cashin who died on 30th August 1926. He left surviving him his wife, the appellant Gertrude C. Cashin (Lady Cashin) and four adult children, the appellants Lawrence V. Cashin, and Martin Cashin, the respondent Peter J. Cashin, and a married daughter Mrs. Mary Fox. Sir Michael Cashin had made his last will on 15th November 1925. By it the appellants Lady Cashin and Lawrence Cashin were appointed to be the executors. He bequeathed to each of his sons $40,000, and after some small charitable and other legacies he bequeathed the residue of his estate to Lady Cashin for life and after her death to his three sons in equal shares. The two executors proved the will on 20th September 1926. According to the inventory and valuation of the property filed with the petition for letters of probate the total value of the estate was $99,496. The sum of $4702, being the duty payable on this amount under the (Newfoundland) Death Duties Act, 1914 to 1916, was promptly paid. On this footing the estate was insufficient to pay the legacies in full and in fact the three sons would have received roughly only $20,000 apiece, and there would have been no residue.
Sir Michael in the year 1924 had made or at least attempted to make some large gifts to Lady Cashin. In particular ha had, in circumstances which were investated at the trial, transferred to her 300,000 Dominion of Canada 5 per cent. .943 Bearer Bonds. That transaction took place on 8th May 1924. He also on the same day had given to her $40,000 which had been standing to his account at the fontreal Trust Company, St. John's ; and on 21st May 1924, he gave to her a further sum of $20,000 which had been standing to his account at the Bank of Montreal, St. John's. No attempt has been made by any person to impeach either of these latter gifts; but the respondent alleged in the action that the gift of the bonds was imperfect and therefore void; and it is necessary to state certain undisputed facts as to this alleged gift. Sir Michael had purchased the bonds through agents in Canada in March 1924, and they were forwarded to him at the Bank of Montreal, St. John's. After the arrival of the bonds, Sir Michael with his son Mr. Lawrence Cashin, went to the Bank of Montreal, took possession of the bonds and placed them in a safety deposit box rented by him in the vaults of the Royal Bank of Canada, and in which he kept his personal papers and securities. Shortly afterwards, Sir Michael, wishing to present these bonds to his wife as a gift, consulted his son-in-law, Mr. Cyril J. Fox, K.C., a lawyer of experience practising in St. John's, as to how he could effect the gift.
The interview with Mr. Fox took place in Sir Michael's bedroom at his home in the presence of Lady Cashin and of his son Mr. Lawrence Cashin. Sir Michael told Mr. Fox of his intention to give the bonds to his wife and asked him what he should do to carry out his intention. Mr. Fox told him he might do so either by deed or by manual delivery of the bonds themselves to Lady Cashin. Accordingly on or about 8th May 1924, shortly after his conversation with Mr. Fox, Sir Michael, accompanied by his son Mr. Lawrence Cashin, went to the Royal Bank of Canada for the purpose of transferring the bonds to Lady Cashin. At the bank he was told by the officials that it was necessary for Lady Cashin to be present to effect the gift and sign the l
