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Equitable Trust Co. v. Gallagher

Supreme Court of Delaware

February 5, 1954

EQUITABLE TRUST CO.
v.
GALLAGHER.

Page 539

Suit was brought for specific performance of written instrument calling for delivery by defendant of 19 shares of corporate stock in fee simple to plaintiff's intestate. The Court of Chancery, 95 A.2d 470, entered an order in favor of defendant. The Supreme Court, 99 A.2d 490, held that agreement was supported by consideration and remanded cause with directions. Defendant made a motion for reargument. The Supreme Court, Tunnell, J., held that plaintiff was not entitled to specific performance and was merely entitled to damages.

Judgment reversed, and case returned for assessment of damages.

Page 540

[34 Del.Ch. 251] Stephen E. Hamilton, Jr., and H. Albert Young, Wilmington, for appellant.

Joseph Donald Craven, Wilmington, and, on the reargument, Edwin D. Steel, Jr. (of Morris, Steel, Nichols & Arsht), Wilmington, for appellee.

David F. Anderson (of Berl, Potter and Anderson), Wilmington, for J. Harry Gallagher, Hugh F. Gallagher, Jr., and Donald J. Gallagher, amici curiae in respect to the reargument.

SOUTHERLAND, Chief Justice, and WOLCOTT and TUNNELL, Justices, sitting.

TUNNELL, Justice.

This is an opinion following reargument. Our former opinion, reported in 99 A.2d 490, contains a statement of the facts of the case and a review of the meandering course of this litigation, so we shall not repeat them here.

[34 Del.Ch. 252] Defendant's several contentions are divisible into three principal classifications: (1), that our decision recognizes as consideration something which the record does not factually establish and which could not be established without violating the parol evidence rule; (2), that the opinion overrides certain adequately supported findings of fact of the lower court and the ‘ law of the case’ as previously settled in this court; and (3), that it accords legal force to an illegal contract. The most thorough manner

Page 541

in which these matters have been presented on reargument deserves their consideration in detail.

It is necessary first to re-examine our vital factual finding that Miss Kane orally obligated herself to surrender her life interest in 19 shares of Union Park Motors stock, releasing defendant from his trusteeship, in exchange for an absolute title to the same quantity of shares.

If we had no thoughts in the matter in addition to those we formerly expressed, it would, nevertheless, be quite impossible for us to escape the conclusion that the 1946 transaction was an attempted contractual substitution for the 1941 arrangement. The defendant's admissions-in the pleadings and deposition-and the statements of his trial counsel on the record preclude any other result and, since all these were quoted in the first opinion, there is no need to repeat them here.

But in our previous opinion we left much unsaid. Indeed, since we have restudied the record and reheard the arguments, we are now convinced that we were wrong in holding as we did that Miss Kane's promise was only oral. It was at least oral, but it may very well have been a part of the paper writing, and there is no good reason why we should have excluded that possibility.

This instrument was drawn by an attorney. It was to be, and was, signed by Miss Kane. Why, if she promised nothing? The draftsman of the contract was representing the defendant, and since the obligations of defendant were spelled out in detail, and executed under seal, does it not seem strange that the paper writing would altogether omit a statement of the obligation of the other party? Further, the draftsman was the same individual who filed the defendant's [34 Del.Ch. 253] answer, in which it is expressly acknowledged that the 1946 instrument was ‘ meant to take the place of’ the 1941 agreement.

By far the most eloquent fact, however, is defendant's course of conduct. Some time after Miss Kane's death, he got possession of all existing copies of this agreement and, although he denies the testimony that her mother vainly tried to persuade him to return Miss Kane's copy, he did not in fact return it, but proceeded to destroy all copies. He knew that the Kanes were under the impression that it conferred rights upon Miss Kane's estate. His explanation was that he destroyed these papers because he himself knew that the agreement was not enforceable after her death, and that he did not do so until after he had obtained legal advice as to its binding force, and even then not until someone had told him-falsely as it turned out-that the Equitable Trust Company was not going to serve as executor. In such a situation, of course, the normal reaction would have been to preserve the evidence in order to establish the supposed defense. The explanation-wholly lacking in logic-is almost as illuminating as the act of destruction itself. Both strongly suggest that the agreement was binding.

It is the duty of a court, in such a case of wilful destruction of evidence, to adopt a view of the facts as unfavorable to the wrongdoer as the known circumstances will reasonably admit. The maxim is that everything will be presumed against the despoiler. Armory v. Delamirie, 1 Strange 505, 93 Eng.Rep. 664; Hudson v. Hudson, 287 Ill. 286, 122 N.E. 497; 54 C.J.S., Lost Instruments, § 13, page 816. Wigmore on Evidence, 3d Ed., Vol. II, Sec. 291, at page 186, indicates preference for a rule of the strongest import:

‘ The truth is that there is no reason why the utmost inference logically possible should not be allowable, namely, that the contents of the document (when desired by the opponent) are what he alleges them to be, or (when naturally a part of the possessor's case) are not what he alleges them to be.’

This attitude of the law is in truth no more than the application of a rule of common sense, based upon the ...


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