This case concerns a controversy affecting the title to land known as the Red Farm and situated in West Tisbury in the County of Dukes and the Island of Martha's Vineyard. The parties do not dispute that the plaintiff owns an undivided one-half interest therein. The question before the Court is the title to the remaining one-half interest. The complaint was filed pursuant to G. L. c. 240, §§l and 6, to remove a cloud and quiet title to the Red Farm. The cloud consists of an interest of record held in a trust established by the defendant, Joseph G. Glass (the "Glass Trust") (Exhibit No. 6), for the benefit of Margaret Iten Scott Hammond, Abigail Hart Scott Higgins, Katherine Litchfield Scott and Albert Lyon Scott, III, children of the plaintiff's first marriage to Albert Lyon Scott, Jr. William Everett Glass is the son of Joseph G. Glass; the latter is the present trustee of the trust and his son is named therein as successor trustee.
The facts are largely undisputed, and on all the evidence I find as follows. The plaintiff and Albert Lyon Scott, Jr. met while he was speaking in Maine on behalf of the American Friends' Service Committee and the Center for Peace Services. They were married in 1940, and the financially lean years of their marriage began with the plaintiff's first husband initially imprisoned in Danbury as a conscientious objector during World War II, and thereafter serving in a lumber camp at Petersham, New Hampshire. After the war terminated, the Scotts moved to Martha's Vineyard, and in due course Mr. Scott purchased the Red Farm with a small inheritance. Title was taken in his name alone (Exhibit No. 1). The deed ran from Mary W. Butler to Albert L. Scott, Jr., was dated December 19, 1946 and duly recorded in Book 212, Page 190. The family's income was small, both husband and wife struggled to provide it, and Mr. Scott's mother regularly sent a monthly allowance. Marital difficulties increased with the passage of time, and the plaintiff eventually persuaded her then husband to convey an interest in the Red Farm to her. This was done by deed dated May 8, 1954 and recorded in Book 226, Page 122 (Exhibit No. 2). The deed ran to the Scotts as joint tenants, and no question has been raised as to the nature of the tenancy created thereby (i.e., joint tenancy, tenancy by the entirety or tenants in common). In the light of subsequent events, the nature of the holding becomes immaterial. Two years later Scott left his wife, children and the Island and moved to New York. He eventually moved to Puerto Rico and opened a school there with the woman who was to become his second wife. He apparently met the defendant Glass in 1956 during his work with the American Friends' Service Committee and Socialist Party, and over the years Glass performed legal services for him. After her husband left her, the plaintiff had a difficult time in providing for herself, her four children and the Red Farm, but her mother-in-law continued to furnish monthly support. The Dukes County Probate Court entered an order granting separate support to the plaintiff, and when her husband defaulted in payments, legal counsel advised the plaintiff to have the husband's interest in the Red Farm levied on by execution and sale. Scott was notified of the pending sale, and consulted defendant Glass who was vacationing in Puerto Rico. It was arranged that Glass would attempt to sell the property prior to the sale, and in any event, would collect the proceeds of any overage and remit them to Scott. Scott executed and delivered to Glass the following (Exhibit No. 4):
KNOW ALL MEN BY THESE PRESENTS, that I, ALBERT L. SCOTT, JR., being one of the owners of RED FARM, as tenant by the entirety, do hereby make, designate appoint and authorize JOSEPH G. GLASS, Esq. of 54 Wall Street, New York City, State of New York, to act for and on my behalf, in all matters relating to the sale of the said "RED FARM", whether it be to execute any documents on my behalf, or to receive or payout any monies on my behalf, or to make any arrangements that I could legally and lawfully enter into if I were personally present, it being my intention to bestow upon the said Joseph G. Glass, Esq. the fullest degree of authority to act as my representative, without limitation of any kind or nature whatsoever, and further to assert that he is authorized without limitation to execute any and all documents that I could have executed were I personally present.
The plaintiff attended the sale at the court house in Martha's Vineyard with her then attorney, Alan S. Barkin, with defendant Glass also present. Glass did not approach the plaintiff nor did he make any attempt to sell her husband's interest to her before the bidding began. The plaintiff being without funds was able to bid only the amount of the execution, $570.00, and defendant Glass quickly bid $786.19, of which plaintiff received $570.00. $97.39 was applied to costs and fees, and the surplus was "paid to Albert L. Scott, through his attorney Joseph G. Glass" (Exhibit No. 4). The sheriff's deed ran to Joseph G. Glass and covered Mr. Scott's right, title and interest (Exhibit No. 3). There followed a series of negotiations between at least three "pro bono" counsel for the plaintiff and defendant Glass. By agreement the plaintiff retained the rents derived from the Red Farm and paid all expenses including insurance premiums, taxes and repairs. Glass was unwilling to execute the leases as a party but would consent to them. He continually refused to convey his interest to the plaintiff until Scott paid the legal fees which he allegedly owed to Glass. On one occasion Glass offered to sell his interest to the plaintiff for $7,700, which he later increased to $10,000. At the time these offers were made, the plaintiff was without funds to accept them. If Glass at this time was holding legal title for Scott's benefit, it would seem that a conveyance to the plaintiff would have been wrongful.
In 1960 Scott commenced divorce proceedings in Puerto Rico against the plaintiff. As part of the divorce settlement he conveyed to her by quitclaim deed, dated May 11, 1961 and recorded in Book 241, Page 349 (Exhibit No. 5), all his right, title and interest in the Red Farm. The divorce decree was entered immediately thereafter. Sometime in 1965, Scott settled his debt with the defendant, Glass. Soon thereafter by instrument dated March 8, 1965, Glass placed his interest in the Red Farm in an irrevocable trust for the benefit of the plaintiff's four children. Joseph G. Glass was the trustee named therein with his son, William Everett Glass, as successor trustee. The trust is to terminate when Albert Lyon Scott, III, reaches his thirty-fifth birthday on June 12, 1983, but there is a power of sale in the trust instrument by which it would be possible for the trustee to sell what appears to be the only asset in the trust, an undivided one-half interest in the Red Farm.
Over the years the Scott children, with the exception of Katherine, were married, divorced, remarried in two instances, and visitors to the Red Farm at varying intervals. Abigail, with her second husband, has been the only child to make her residence on the property. The plaintiff and her second husband made a gift of $10,000 by which Abigail and her husband were enabled through their own labors to build a home on the locus. With the financial assistance of her husband, the plaintiff was able to expend $50,000 on the Red Farm. The plaintiff had been told of the trust, but did not see a copy until the commencement of this action. The instrument was recorded by her son, Albert, on November 7, 1975. The plaintiff's efforts to obtain Glass' interest in the property continued at least until early 1966, but ceased when she remarried on June 11 of that year. In 1975 relations deteriorated between the plaintiff and her daughter, Abigail. Eventually, Albert and Katherine sided with Abigail, and Margaret with her mother. This suit was brought on February 18, 1976.
A trial was had at the Land Court on September 26, September 27 and November 9, 1978 at which a stenographer was appointed to record the testimony. All exhibits introduced into evidence are incorpor- ated herein for the purpose of any appeal.
At the trial, Albert Scott and Joseph G. Glass insisted that Mr. Scott had consented to the purchase by Mr. Glass of Scott's interest, that Glass was acting on his own behalf when he made the purchase, and that the only purpose of the power of attorney was to enable Mr. Glass to collect any overage from the sheriff, as indeed he did. I have viewed the events in October of 1959 very differently.
Mr. Glass is a member of the New York bar and is authorized to practice before the federal district court for the southern and eastern districts of New York and numerous New York state boards and agencies. He is not a member of the Massachusetts bar, but the same standards should be applied to his relationships with his clients within the Commonwealth as would govern local counsel. The parties have not suggested otherwise. The standard to be followed in a case like the present which concerns a purchase by an attorney of his client's interest in real property was spelled out in Hill v. Hall, 191 Mass. 253 (1906), wherein the attorney was the seller, rather than the buyer but where like rules governed. At page 262, Justice Sheldon eloquently wrote:
It is a well settled rule in equity, applicable to all transactions between attorney and client by way of purchases, sales or gifts, that the attorney who bargains with his client in a matter of advantage to himself must show, if the transaction afterwards is called in question, that it was in all respects fairly and equitably conducted; that he fully and faithfully discharged all his duties to his client, not only by refraining from any misrepresentation or concealment of any material fact, but by active diligence to see that his client was fully informed of the nature and effect of the transaction proposed and of his own rights and interests in the subject matter involved, and by seeing to it that his client either has independent advice in the matter or else receives from the attorney such advice as the latter would have been expected to give had the transaction been one between his client and a stranger. The attorney must see to it that his client is so placed as to be enabled to deal with him at arm's length, without being swayed by the relation of trust and confidence which exists between them.
There are numerous cases decided since Hill wherein the same principle is enunciated. See, e.g., Barnum v. Fay, 320 Mass. 177 (1946); Israel v. Sommer, 292 Mass. 113 (1935); Webster v. Kelly, 274 Mass. 564 (1931); Goldman v. Kane, 3 Mass. App. Ct. 336 (1975). The burden is on the attorney to establish the propriety of his action. Manheim v. Woods, 213 Mass. 537 , 542-43 (1913).
Messrs. Scott and Glass, whose interests now are the same, make much of the fact that Scott is not challenging the actions of Glass, but it is not with the light of hindsight that we are to judge. It was the duty of Mr. Glass in 1959 to obtain indepen- dent advice for Scott or to give him the advice he would have given were a third party to be entrusted with the power of attorney. This was not done, and the transaction therefore is vulnerable. It can hardly be said that the bearer of the broad power was not acting as Scott's attorney at the sale; even if Glass were his attorney only in other matters, the resulting trust, confidence and deference which are a natural consequence of the relationship between attorney and client would carry over. Massachusetts statutes provide a period of one year during which a judgment debtor may redeem his property. See G. L. c. 236, §33 et seq. There was no mention in testimony that this right ever was brought to the attention of either the plaintiff or her first husband. Cf. Salter v. Quinn, 334 Mass. 220 (1956).
"A constructive trust is imposed in order to avoid the unjust enrichment of one party at the expense of another where the legal title to the property is obtained (a) by fraud, (b) in violation of a fiduciary relationship, or (c) where information confidentially given or acquired is used to the advantage of the recipient at the expense of the one who disclosed the information." Sanguinetti v. Nantucket Construction Co., Mass. App. Ct. , (1977) [Note 1]; accord, Kelly v. Kelly, 358 Mass. 154 , 156 (1970); Barry v. Covich, 332 Mass. 338 , 342-43 (1955). An attorney's abuse of his relationship with his client is similar to a breach of trust (although not always the same), Warsofsky v. Sherman, 326 Mass. 290 , 292-93 (1950), Kelly v. Allin, 212 Mass. 327 , 332-33 (1912), and it is well established that he holds the property as a constructive trustee if the breach is proven. Rolikatis v. Lovett, 213 Mass. 545 , 548 (1913). This still leaves unanswered the question of whether a third party can attack the transaction if the client does not elect to do so. Where as here, the client has transferred any interest he might have in the property which is the subject of the constructive trust, the conveyance by implication carries with it such right. While the problem has not been addressed in this light in previous cases of our Commonwealth, it is apparent from a study of the facts that some of the attacks mounted against counsel were by successors, not by the client. This was so in Israel v. Sommer, supra. And, a like result has been reached in other jurisdictions. In New York, a plaintiff has the right to sue to impress a constructive trust if he can establish that, but for the wrongful acts of the defendant, he would have been entitled to a share of the property. See Schaffer v. Schaffer, 17 Misc. 2d 592, 593 (Sup. Ct. 1959); Lesser v. Ringelheim, 154 N.Y.S. 2d 554, 557-58 (Sup. Ct. 1956). The Nebraska court, in Workman v. Workman, 174 Neb. 471 (1962), adopted the following rule:
'A suit for the establishment or enforcement of a constructive trust may be maintained by the person prejudiced or deprived of a benefit by the fraud, actual or constructive, which gives rise to the trust, or by the successors in interest of such person.
Id. at 482, quoting 90 C.J.S., Trusts §433, at 831. The New Hampshire court has permitted the heirs-at-law of a decedent to maintain a cause of action to impress a constructive trust on land wrongfully obtained by the defendant. Patey v. Peaslee, 101 N.H. 26, 29-30 (1957) (per curiam).
The plaintiff had not consented to Scott's Puerto Rico divorce until a deed of his interest in the Red Farm was delivered to her in 1961. The deed conveyed all of her husband's right, title and interest in the Martha's Vineyard property, and contrary to Albert's view that this was intended to extinguish any rights he might have in the plaintiff's estate, it seems clear that its principal focus was the interest of record held by Glass. As to this, Glass was trustee of a constructive trust, and the beneficial or equitable interest in the trust passed with the deed. The plaintiff therefore has standing to maintain the instant suit.
None of the beneficiaries of the trust are bona fide purchasers for value. Accordingly, the conveyance by Glass of the property to the trust does not bar relief. As was held in Parker v. Lloyd, 321 Mass. 126 , 134-35 (1947), the transferee of one who receives trust property and who takes without consideration, however innocently, has no greater rights than his transferor. To the same effect are Tierney v. Coolidge, 308 Mass. 255 , 259 (1941); Banks v. Everett National Bank, 305 Mass. 178 , 182 (1940); Berry v. Kyes, 304 Mass. 56 , 59 (1939).
The defendants raise the defense of laches, and indeed it has been nearly twenty years [Note 2] since the ill-conceived sheriff's sale which gave rise initially to the problem. During these years the plaintiff or more precisely, her several lawyers, did not attack the Glass record title or the trust. Rather her efforts were directed first to securing a conveyance of Glass' interest in lieu of support or to buttress the settlement. After the trust had been established other matters intervened, but the basic reason why the plaintiff then did nothing was her conviction that ultimately the trust's share would pass to her children and she was content to have it do so. As was said in Davis v. Downer, 210 Mass. 573 (1912), there was no reason to sue until the quarrel.
In the instant case, the delay in pressing the plaintiff's case does not amount to laches. It has repeatedly been said that mere delay alone does not constitute laches. There must be delay coupled with substantial harm on account thereof. Shea v. Shea, 296 Mass. 143 , 147-48 (1936); Raytheon Manufacturing Co. v. Radio Corp., 286 Mass. 84 , 100-01 (1934); Stewart v. Finkelstone, 206 Mass. 28 , 36 (1910); Loud v. Pendergast, 206 Mass. 122 , 124 (1910); Sanguinetti v. Nantucket Construction Co., supra at 418; Erickson v. Waltham, 2 Mass. App. Ct. 436 , 450-51 (1974). Laches, of course, is an affirmative defense, a question of fact as to which the defendants have the burden of proof. Three Sons, Inc. v. Phoenix Insurance Co., 357 Mass. 271 , 278-79 (1970). That burden has not been met.
The defendants rely heavily on Dunne v. Cunningham, 234 Mass. 332 (1920), where the defendant with the consent of at least one equity owner purchased for his own account. This case is distinguishable, for I have not found the type of informed consent which is necessary if the transaction is not to be vitiated. In Dunne the clients were content that the attorney buy in order to recover the charges for services he had rendered but for which he otherwise would not be paid. In the present case, the attorney held the husband's interest as ransom for payment or more conventionally, as security for the sums allegedly owed to him. See Cullen v. Carey, 146 Mass. 50 (1888). In addition to the constructive trust which I have found there also is evidence that the purchase by Glass, outright in form, in actuality was a mortgage. This explanation is consistent with the attorney's refusal to be a party to the lease or to incur expense; it explains why, when paid, he transferred his record share in the real property to the trust for the Scott children, why he never used the property. It softens the picture of one akin to a fiduciary buying a valuable interest for a nominal consideration. Occasional statements by Glass about his rights seem prompted by exasperation with his client rather than a true claim of title or of more than the bare legal title.
On all the evidence I therefore find and rule that at the time of the sheriff's sale of the interest of Albert Scott, Jr. on October 17, 1959 the purchaser at the sale, the defendant Joseph G. Glass, was attorney for Mr. Scott; that Mr. Scott had not given his informed consent to the purchase by Mr. Glass, which was a breach of his duty to his client; that in any event the purchase was intended to be for security only although absolute in form; that Albert L. Scott, Jr. either was the beneficial owner of the Red Farm or the owner of the equity of redemption; that this interest passed to the plaintiff when he conveyed to her his entire interest in the Red Farm in 1961 as part of the divorce settlement; that upon payment of Scott's debts to Glass, if not before, the plaintiff, as Scott's grantee, was entitled to a release from Glass of any right, title and interest he held of record or otherwise in the Red Farm; that he had no interest not already impressed with a trust; that the rights of the trustees and beneficiaries under the Glass Trust, who are not bona fide purchasers for value, cannot rise above those of the settlor; that the Glass trust has no interest in the Red Farm; and that the plaintiff holds title thereto free from any claims of said trust.
[Note 1] Mass. App. Ct. Adv. Sh. (1977), 404, 416.
[Note 2] Seventeen years when the suit was commenced.