Duffy v. Calvert

| Md. | Dec 15, 1848

Frick, J.

delivered the opinion of this court.

The bill charges that Thomas Cramphin, of Montgomery County, deceased, devised to George Calvert and his heirs, his real estate, to be sold and applied to certain purposes, expressed in his will. That Elizabeth Davis, who claimed as heir-at-law of Cramphin, and' had successfully contested the validity of the will and its codicils, afterwards compromised the dispute by conveying to Calvert, all her interest in the estate, in trust to provide, in the first instance, for the payment of a large sum of money to herself; and then in further trust, for the purposes expressed in Cramphin’s will. The terms creating this trust are, “ in trust to hold, apply and appropriate the estates hereby granted, or in case of the sale of them, or any part of them, the said proceeds, to and for the same uses, trusts, purposes and objects as are expressed and declared in the said instruments of writing, purporting to be the last will and testament, and codicils thereto, of the said Thomas CramphinP

In the month of August, 1837, the appellant purchased from Calvert, a part of the land thus conveyed to him for the sum of $2,852, for which he executed to Calvert, his four several single bills, payable in equal instalments in one, two, three and four years from the date. Calvert afterwards died, and his executor, Charles B. Calvert, instituted suits at law on three of the single bills, which had become due, and recovered judgment against the appellant at March term, 1841, in Montgomery County Court, which judgment was afterwards at November term, 1846, revived, and fi.fa. issued thereon. In the mean time, the fourth and last instalment of the purchase money had become due.

This bill is hereupon filed, invoking all the heirs of George Calvert, and all the cestui que trusts under the will of Cramphin, (many of whom are minors,) as defendants praying that the executor may be enjoined, until a trustee shall be appointed by the court, to receive and apply the whole purchase money, which he is willing to pay whenever there is a person in being competent to convey the land, so sold by George Calvert, in his life-time, to the appellant.

The answer of Charles B. Calvert, the executor, admits the purchase made by the appellant upon the terms mentioned in the bill, and the recovery of the judgment on the three instalments of the purchase money. It insists that the title to the land, which is unquestionable, is now vested in the heirs-at-law of George Calvert, and that the appellant has had sufficient time to obtain from them a conveyance by the proper proceeding in equity.

The injunction which, in the first instance, was issued on the filing of the bill, upon coming in of the answer, was by order of the Chancellor, dissolved,—and from this order, the present appeal is taken.

In support of the appeal, the appellant contends, that the title in question was suspended by the death of George Calvert, the trustee, or vested in persons incapable of making the conveyance; and that the property being subject to limited trusts, which required the purchaser to look to the application of the purchase money, there was no hand in being to receive, and to which he could safely pay, without the intervention and appointment of a trustee by a Court of Chancery.

It has long been a general rule of Chancery practice, that the purchaser shall not be required to pay his money to one who is not competent to give him a good title to the purchase. Where, however, there is such person competent or appointed to receive it, and give a discharge, the purchaser is not generally required to see to the application of the money.

“ The right to a good title is a right, not growing out of the agreement between the parties, but given by the law; that as the purchaser parts with good money, the vendor shall give an estate with a clear title.” Jltkinson on Tit. 37 9. 25 Law Library, 168.

Is there in the case before us such a person competent to convey, and to give the discharge for the purchase money ? It is affirmed in one view taken by the appellee’s counsel, that the legal estate in the lands descended to the heirs-at-law bound by this agreement between the purchaser and the original trustee, while the bonds in question devolved upon the appellee as executor,—and being at his death, converted into personal estate by force of the trust to 11 George Calvert, his heirs, executors and administrators,” the office of this trust devolved upon his executor.

In support of this proposition, Willis on Trustees, page 56, is cited. The doctrine in Willis is thus stated: “ trusts, when of real estate, devolve by the death of the trustee on his heir-at-law; when of personalty,-they vest in his executor or administrator;” and this, of course, in the latter clause, is true, where the trust consists of personal estate. But it is neither said or meant, that where the trust is originally of real estate, and in part executed by sale from the original trustee, that the trust can become personalty, and be consummated by the executor. All the authorities agree, that when the legal estate descends to the heirs-at-law, the trust is transmitted with it. For if otherwise, on the death of every trustee charged with the sale of real estate, the functions of the trust, by a sale in his life-time, would fall into separate hands; the purchase money passing into the hands of the personal representatives, not as assets, but as a trust fund, while the title descends to the heirs-at-law.

At common law, on the decease of the trustee, the estate will descend to the heir. Leviin on Trusts, (242.) 24 Law Lib. 123. Trusts descend to the heir of the person who was last entitled to them, in the same manner as legal estates. Cruise, 1 vol. (485.)

The trust thus devolving upon the heirs-at-law of George Calvert, some of whom are minors, can the purchaser under this trust, safely resort to the usual mode of obtaining his conveyance, without seeing at the same time, that they are capable of giving him a full discharge? Is the law so clear, and the course of the appellant so safe, that he may pay his money without the concurrence of those beneficially interested ? If these trusts are a charge upon the land purchased, is he not bound to see it satisfied? The will and codicils of Thomas Cramphin, which are revived by the terms of the deed from Mrs. Davis, create trusts by way of annuities and pecuniary bequests to the parties there named, which are expressly charged upon the lands conveyed by her to Calvert, and would seem to be precisely such charges as the purchaser is to see extinguished. When the trusts are general, as for the payment of debts generally, no such obligation exists. 3 Sugden, 97, (152.) But if for the payment of legacies or debts, which are scheduled or specified, the trust being defined and limited, equity holds it reasonable, that the purchaser should see to the application of the money. Ibid,, 98.

In equity, the party beneficially entitled to the produce of the estate—that is to say, the cestui que trusts of the purchase money, and not the trustee or donee of the power of sale, is considered to be the owner: and on this principle, it is that the purchaser is bound, at the hazard of having his money to pay over again, to pay it to the cestui que trusts, or see that it comes to his hands; or in other words, to see to its application. Atkinson, 597.

And the only cases in which it would appear safe, that the purchaser shall not look to the application of his money, is where the trusts are undefined and general in their nature; unless the trustee, by the terms of the deed itself, is authorized to give a receipt, and discharge the purchaser from seeing to its application. Without such authority or clause in the deed, where the trust is specific and limited, the rule is uncontroverted, that the purchaser must see his money properly applied. See Atkinson, 598—600. Many of the trusts in the will of Cramphin, are of this character. An annuity to Caroline Calvert for life;—pecuniary legacies to Richard, Ann and Elizabeth Williams, and others. And whatever may be the general nature and character of the other provisions and trusts in the will, these are sufficient to warn the purchaser to look for the proper party, on whom the execution of them devolves by the death of the original trustee. Is it not precisely the case where recourse must be had to the Court of Chancery, to see that a competent hand is appointed to receive the fund, and discharge the specific and ulterior provisions of this trust?

Suppose that George Calvert had, died before this sale to the appellant. The legal estate here descends to all his heirs. Could the execution of this trust, by operation of law, attach to all the heirs named in this bill, infants and others? If they take in the same character, as the original trustee, is such a trust susceptible of execution by all the heirs ? or is not the interposition of a court of equity, indispensable to carry out its provisions, by the hands of some person competent to convey title and discharge the trusts ?

And certainly such interposition is the more necessary now, when after the sale, it is sought to direct the whole fund into the hands of the executor, as competent to discharge this extended trust, while every separate purchaser is required to resort to the circuitous process in equity, against all the heirs of the trustee to secure their title.

The appellant has, in our opinion, adopted the safe and the true course. He seeks by his bill, to place himself in the condition of a purchaser, under the decree of a Court of Chancery; and by bringing the cestui que trusts into court, most of whom are incompetent to convey, to obtain his title by the intervention of a trustee of that court. If he could be compelled to pay the purchase money to the executor, and then seek his title against the heirs, while it was doubtful, under the circumstances of the trust, whether they were the proper parties to convey, it would be a case of severe injustice and hardship. He ought not to be required to incur the costs of such proceeding against absent defendants and infants, for which he may never be reimbursed, and the very question at issue is whether they are competent to convey. It has been argued, and is one of the points made by the counsel of the appellee, that the title in this case devolved on George H. Calvert, the eldest son and heir-at-law, under the act of 1831, in conformity with the doctrine of the common law, in relation to trust; and that George II. Calvert, having conveyed all his interest to the appellee, he is the competent and proper party to convey the title to the appellant.

We shall hereafter shew that the act of 1831, does not reach this case. And yet this is one of the alternatives of title, which the appellee offers, while the other is represented to be in the heirs, conformable to the act of descents. If the title is not, strictly speaking, doubtful, it is, at least, admitted, that it was questionable, on whom it devolved at the death of the original trustee. And was the vendee, in such case, to make the selection, at his own hazard; first to pay his money and then to grope through these multiplied trusts in search of his title ? This was not his affair, and he was therefore right, in withholding the payment, until the beneficiaries under the trusts, presented the hand indisputably entitled to receive it. And when attempted to be enforced at law, it was his only resource, to seek his present remedy and protection in Chan-eery. The bill does not impeach the title of his vendor, but alleges that it has devolved on his heirs-at-law, or some other person, so that he cannot obtain a conveyance, without the aid of the court. He avers his willingness to pay the purchase money, as soon as the hand is in being to receive it; and in the opinion of this court, has made out a good case for the interposition of the Chancellor.

This view of the case is a sufficient answer to the further objection, that the appellant, by his own delay, has waived his right to object, that being in possession of the premises, ever since his purchase, he has no equity now to stay the payment, on pretence of.difficulty in obtaining a conveyance, and that whatever right to equitable interposition may once have existed, he has forfeited by his own negligence. If by the death of George Calvert, the trust devolved upon those who were incapable to perform its functions, he is not required to proceed, at his risk and cost, to unite the office and estate in another trustee competent to execute the trusts and convey the estate. Upon payment of his purchase money, he was entitled to an indisputable legal title. The heir at common law, who it is said takes the estate and the trust under the act of 1831, conveyed the title supposed to be in him, to Charles B. Calvert, the executor and appellee. Suppose the appellant to have paid either, and taken his conveyance, would it not be just matter of complaint that he should, at his own cost, afterwards be turned over to perfect his title, from the heirs-at-law, or the cestui que trusts ? When his resort was not clear and adequate he could only fortify himself, by withholding the purchase money, more especially, where it became his duty to secure its proper application. In this respect the delay is not Duffy's, for if he had been ready to pay the whole purchase money, there was none competent to give him a discharge. In satisfying the bonds he had no assurance that the money would not be applied by the executors as assets of the estate of George Calvert. In procrastinating the payment and holding out against the judgment of the executor, he might, without presuming too far, have supposed proceedings to have been instituted at the same time, to supply the place of the original trustee. The heirs of Calvert were themselves ulterior beneficiaries under the will of Cramphin, and they and the legatees, might, well be supposed to have applied at the proper forum to revive the hand required to execute these trusts. The laches therefore have not been entirely on the side of the appellant. Nor has any serious injury resulted to the parties in interest, by delaying until the means of perfecting the title should be matured by them, because, as is properly said by the appellant’s counsel, the property being bound for the amount, as well as the sureties on the bonds given for the purchase money, the delay is compensated by the payment of interest.

The act of 1831, ch. 311, sec. 31, has been referred to as conferring upon George Calvert, the eldest son and heir-at-law, the legal estate in the lands in question; thus disposing of the whole subject before the court, and relieving all difficulty between the parties, by furnishing the proper hand to execute the conveyance and receive the purchase money.

Naked trusts, when the trustee has the legal title without any beneficial interest in the trust under this act of 1831, are made to descend as at common law. The words of the act are, “trustees who shall be seized of the naked legal estate therein, without having, or being entitled to any beneficial interest or estate whatsoever in the lands.” Is not George Calvert, in every sense, a beneficiary under the deed of Mrs. Davis ?

He is first to reimburse himself out of the estate, the costs, charges, and expenses incurred by him in contesting the will and codicils of Cramphin, and the last codicil of the will provides, that if the previous trusts created by the instrument fail to take effect, then the estate is to devolve upon George Calvert as devisee. The right to reimburse himself, the heavy costs and charges incurred in the attempt to sustain the will of Cramphin out of the very trust in his hands, must clearly bring this case within the exception of the act of 1831.

But when the ulterior limitation in her favor, which confers upon him the whole estate, upon the possibility that the other trusts may fail, is superadded, it is clearly such a beneficial interest, as seems to have been expressly in view, and must exclude this trust from the operation of the act referred to. This being the case, the trust estates have here descended to the heirs of the trustee by the act to direct descents. Some of these heirs, as infants, are legally incompetent to convey, and even if the aid of a court of equity was invoked for this purpose, the title obtained by such proceeding, would not discharge the purchaser from looking to the application of the purchase money. In this view of the case, the cestui que trusts are necessary parties to any proceeding, which looks to a conveyance to the appellant. Any attempt to enforce the payment of the purchase money, without such assurance of title, was properly met by the appellant, in bringing before the court all the parties in interest and estate, united, seeking to enjoin them, until a trustee should be substituted for the original trustee, to receive and apply the purchase money, and convey the lands sold to the purchaser. If this application had been made by the appellant upon the three instalments alone, upon which judgments had passed, and before the last instalment became due, the Chancellor would have been right in dissolving the injunction; because, until the fourth instalment was due, the appellant could have no claim to a conveyance of the lands. But the whole purchase money having decome due at the filing of the bill, and the appellant being willing to pay, upon receiving such discharge and conveyance as he is entitled to, it becomes necessary that time should be allowed, and the proper steps be taken to bring in the parties to the bill.

The order of the Chancellor is, therefore, reversed, and the injunction continued in force. And that such proceedings may be there had, as are in conformity with the principles expressed in this decision, the cause is remanded to the Court of Chancery.

DECREE REVERSED AND CAUSE REMANDED.