THE PROGRESS OF THE LAW, 1918-1919

EQUITY!

LITTLE that is new is involved in the decisions upon equity

during the past year. There are a few interesting applications of settled principles. Also there are occasional instances of what the critical student of equity must pronounce judicial slips. But for the most part a reviewer may do no more than discuss the reasoning by which courts arrived at sound results called for by well-understood doctrines and point out certain tendencies in the administration of equity to which they appear to testify. In one aspect such a condition is gratifying, as indicating that the judicial system is functioning as it should. From another standpoint, however, it cries out for change. After reading upwards of fourteen hundred double-column pages of judicial opinions, carefully sifted from many thousands of pages in the National Reporter System, one is impelled to ask why paper, printer's ink, labor, and shelfroom should be devoted to the perpetuation of what for the largest part is avowedly but repetition of things long familiar and is too often merely elaborate elucidation of the obvious.

I

NATURE OF EQUITY JURISDICTION AND OF EQUITABLE RIGHTS

1. EQUITABLE REMEDIES

A group of cases involving constructive trusts invite consideration of what such a "trust" really is. An express trust is a substantive institution. Constructive trust, on the other hand, is

1 This is the fourth article in a series written by professors in the Harvard Law School in which it is intended to point out the most notable decisions, books, articles, and statutes, coming under the notice of the author, which affect or explain the law in the topic under discussion. The following articles have appeared: Joseph H. Beale, "The Conflict of Laws," 33 HARV. L. REV. 1; Austin W. Scott, "Civil Procedure," 33 HARV. L. REV. 236; Zechariah Chafee, Jr., "Bills and Notes," 33 HARV. L. REV. 255. The series will be continued in the February number. - ED.

purely a remedial institution. As the chancellor acted in personam, one of the most effective remedial expedients at his command was to treat a defendant as if he were a trustee and put pressure upon

his person to compel him to act accordingly. Thus constructive trust could be used in a variety of situations, sometimes to provide a remedy better suited to the circumstances of the particular case, where the suit was founded on another theory, as in cases of reformation,2 of specific performance,3 of fraudulent conveyance, and of what the civilian would call exclusion of unworthy heirs, and sometimes to develop a new field of equitable interposition, as in what we have come to think the typical case of constructive trust, namely, specific restitution of a received benefit in order to prevent unjust enrichment. In the latter case, constructive trust appears as what might be called a remedial doctrine, alongside of election, subrogation, contribution, and exoneration. In the cases first put it is rather to be compared to negative decrees where historical prejudice or practical difficulties make courts hesitant to frame decrees affirmatively, to enforcement of incidental negative covenants in order to bring about performance of affirmative covenants which cannot be coerced directly because of practical obstacles, and to enforcement of arduous alternative duties at home in the expectation of coercing affirmative action abroad. In neither case is there the substance of a trust. This is not a matter of mere academic classification. Of the cases decided during the past year, two clearly recognize that a constructive trust is imposed simply as a remedy-in those cases as a convenient form of specific performance. Other cases where it is used in the same

* Cole v. Fickett, 95 Me. 265, 49 Atl. 1066 (1901).

› Compare the doctrine of the "equitable ownership" of purchaser in a land contract; the Massachusetts doctrine as to when vendor is a "trustee" under the statute allowing real enforcement of decrees as to land held in trust, Felch v. Hooper, 119 Mass. 52 (1875); the "trust" in Parker v. Garrison, 61 Ill. 250 (1871); and the constructive trust imposed on one who takes subject to a vendor's duty of conveying.

4 I PERRY, TRUSTS, § 164.

DIG. XXIV, 9, 9, § 1; Nov. 115, c. 3, § 12, c. 4, § 6; FRENCH CIVIL CODE, art. 727; GERMAN CIVIL CODE, §§ 2339-2344.

Lane v. Newdigate, 10 Ves. 192 (1804); Hood v. North Eastern R. Co., L. R. 8 Eq. 666 (1869).

? Lord Davey in Yorkshire Miners' Ass'n v. Howden, [1905] A. C. 256, 269. • California Development Co. v. New Liverpool Salt Co., 172 Fed. 792 (1909). Trout v. Ogilvie, 182 Pac. (Cal. App.) 333 (1919); Signaigo v. Signaigo, 205 S. W.

(Mo.) 23 (1918).

way seem to think of it as something substantive, 10 and in one this confusion discloses serious possibilities, leading the court to decide a question of the statute of limitations, in a suit by a donee in a parol gift who had partly performed, upon the principles applicable to an express trust."1

12

In Hausner v. Wickham a testator was about to devise land to his granddaughter, subject to a life estate in his son, her father. By reason of threats made by the son, and upon the son's agreement to leave the land by will to his daughter, testator devised it to the son. It will be seen that the case is in substance the same as Cassey v. Fitton,13 and it was properly decided in the same way. But the court treats it as a case of specific performance of a contract and thus becomes involved in the theoretical difficulties which are encountered in Cassey v. Fitton. If one bears in mind the purely remedial nature of constructive trust, the results which courts have reached in this sort of case are attained with much less difficulty. They should be compared with the cases where the heir murders the ancestor or the devisee murders the testator.14 In those cases courts have been willing, on the one hand, to read a judge-made exception into the statute of descents or statute of wills, or, on the other hand, to allow the murderer to retain the fruits of his crime because the latter was not enriched at the expense of those next in succession and there were theoretical difficulties in raising a constructive trust as something substantive.15 Likewise in such cases as Cassey v. Fitton courts have struggled vainly with a contract theory, being deterred by similar theoretical difficulties in raising a constructive trust. But in truth, when put in this way, the choice is between the frying pan and the fire.

10 Stewart v. Todd, 173 N. W. (Ia.) 619 (1919).

11 Peixouto v. Peixouto, 181 Pac. (Cal. App.) 830 (1919). This case will be considered more fully in another connection.

12 105 Misc. 735, 172 N. Y. Supp. 680 (1918).

13

2 HARGRAVE, JURIDICAL ARGUMENTS, 296; I AMES, CASES IN EQUITY JURISDICTION, 145.

14 Kuhn v. Kuhn, 125 Ia. 449, 101 N. W. 151 (1904); Holdom v. Ancient Order, 159 Ill. 619, 43 N. E. 772 (1896); Wellner v. Eckstein, 105 Minn. 444, 117] N. W. 830 (1908); Perry v. Strawbridge, 209 Mo. 621, 108 S. W. 60 (1908); Shellenberger v. Ransom, 41 Neb. 631, 59 N. W. 935 (1894); Riggs v. Palmer, 115 N. Y. 506, 22 N. E. 188 (1889); Deem v. Milliken, 53 Ohio St. 668, 44 N. E. 434 (1895); Carpenter's Estate, 170 Pa. 203, 32 Atl. 637 (1895).

15 Kuhn v. Kuhn, supra; Wellner v. Eckstein, supra.

are t

One who succeeds by operation of law or by devise, when in equity and good conscience he should be excluded, and hence another should take in his stead, may be made to give up what he ought not to be suffered to hold by the remedial device of a constructive trust. The task is to find a solid theory of why he should not be allowed to take, not one of finding an enrichment at some one's expense who is to be beneficiary of a substantive trust.

A like remedial device, easily confounded with a substantive legal institution, is the imposition of an equitable lien. Recent cases generally perceive the true nature of this lien.1

2. ENFORCEMENT IN REM

16

Although legislatures are grinding out a huge grist annually, the power of courts of equity to give real effect to their decrees is still in doubt or undefined or over-narrow in too many jurisdictions.17 During the past year two courts have had to pass upon the question,18 and in one case the matter was so doubtful that two out of five judges dissented.19 When we remember that an excellent model was set up in this country as far back as 1785,20 it is significant of our toleration of archaic legal machinery that such questions should remain open anywhere in the second decade of the twentieth century. This matter deserves to be taken up by bar association committees.

3. FOREIGN DECREES

This mooted question is passed on in Matson v. Matson 21 and is considered in Professor Barbour's paper on "The Extra-Territorial Effect of the Equitable Decree." 22 The Iowa court adopts and Professor Barbour urges the view taken in Mallette v. Scheerer, 23 in which an Illinois decree awarding alimony out of Wisconsin lands was enforced in Wisconsin, as against the contrary view taken in Bullock v.

16 Fleming v. Fleming, 202 Mich. 615, 168 N. W. 457 (1918); Hodgson v. Martin, 90 Ore. 105, 175 Pac. 671 (1918).

17 See HUSTON, THE ENFORCEMEnt of Decrees IN EQUITY, Appendix of Statutes. 18 Bush v. Aldrich, 96 S. E. (S. C.) 922 (1918); Birch v. Covert, 99 S. E. (W. Va.) 92 (1919).

19 Bush v. Aldrich, supra.

20 LAWS OF MARYLAND, 1785, c. 72, § 14.

21

173 N. W. (Ia.) 127 (1919).

2164 Wis. 415, 160 N. W. 182 (1916).

22 17 MICH. L. REV. 527.

Bullock,24 Fall v. Fall,25 and Fall v. Eastin.26 The analogy of enforcement of foreign judgments and of foreign money-decrees on which they chiefly rely does not seem to me in point. Under modern statutes allowing enforcement of money-decrees by execution they are on the same basis as money judgments. But it is to be noted that it is only money judgments that are enforced abroad, and that this "enforcement of the judgment" is a dogmatic fiction. In the Roman law the claim sued on underwent a novation in the "procedural contract" of litis contestatio.27 In our law the debt sued on was merged in the judgment. Hence in legal theory the original claim no longer existed, and in order to allow it to be asserted abroad it became necessary to invoke a "quasi-contractual” obligation to pay the judgment.28 But in equity the suit is to compel defendant to do his duty, and that duty is not necessarily merged in the decree, so that if the decree fails of effect, an action may still be brought upon plaintiff's legal right, if he has one. Thus there was never any necessity for proceeding subsequently on a theory of enforcing the decree rather than the original claim. Moreover, in such cases as Bullock v. Bullock there is no need of suing on a right created by the decree. The right to alimony exists independently of and anterior to the decree. It may be asserted as such where the land lies,29 and a decree may be had there either awarding the land or money which can be made from the land. If conveyances have been executed with notice in fraud of that claim the ordinary equitable remedy against such conveyances will meet the case.30 On the other hand, if we are to allow

27 KELLER, DER RÖMISCHE CIVILPROCESS UND DIE ACTIONEN, 5 ed., § 60.

28 "For just as a contract is made by stipulation

. so there is a contract by judgment; therefore we must not look to the origin of the proceeding, but to the very obligation, as it were, of the judgment." Ulpian in DIG. XV, 1, 3, § 11. Compare KEENER, QUASI CONTRACTS, 16–17.

29 Cochran v. Cochran, 42 Neb. 612, 60 N. W. 942 (1894).

30 Matson v. Matson, as the court points out, may be distinguished from Bullock v. Bullock, Fall v. Fall, and Fall v. Eastin in that in the Iowa case the husband was a party to and was served with process in the second suit, which thus becomes in substance one to assert the claim to alimony existing by the laws of Iowa, as well as those of Washington, anterior to and proved by the foreign decree, and to set aside the conveyance in fraud thereof. There seems no good reason why these could not be joined in one proceeding.