Griffin v. Blanchar

| Cal. | Jul 1, 1860

Lead Opinion

Cope, J. delivered the opinion of the Court

Field, C. J. concurring.

On the tenth of July, 1853, the plaintiff conveyed to Martha J. Blanchar, with the consent and approbation of I. D. Blanchar, her husband, a tract of land, in trust for certain children of Mrs. Blanchar by a former marriage. The conveyance acknowledged the payment of a consideration of §12,000, but no part of this sum was actually paid. To secure its payment, together with other indebtedness, Mrs. Blanchar and her husband executed their promissory notes, and a mortgage upon other property also held by her in trust for her children. By a subsequent arrangement between the parties, these securities were given up and canceled, and other notes of the same character executed, and a mortgage given upon both pieces of property to secure their payment. Upon these facts the plaintiff seeks to enforce a lien against the property for the amount of these notes.

It is well settled that the trustee of a naked trust has no power to bind the trust estate by a mortgage. His powers over the estate are very limited, and it is a general rule in equity that he can do no act to the prejudice of the cestui que trust. The only exception seems to be, that where the trustee is in actual possession of the estate, and conveys it, for a valuable consideration, to a purchaser who has no notice of the trust, the title of the purchaser will prevail. (Hill on Trustees, 316.) In this case the plaintiff had actual notice, and no equity was created in his favor by the execution of the mortgage. His equitable lien as vendor was waived by the acceptance of the personal. security of the Blanchars for the payment of the debt. Upon this subject see Wilson v. Graham, 5 Munf. 297" court="Va." date_filed="1816-12-13" href="https://app.midpage.ai/document/wilson-v-grahams-7384926?utm_source=webapp" opinion_id="7384926">5 Munf. 297; Williams v. Roberts, 5 Ohio, 35; Boon v. Murphy, 6 Blackf. 273; Conover v. Warner, 1 Gilm. 498, and Campbell v. Baldwin, 2 Humph. 248. The rule is, that any conduct which shows an intention to give up the lien will be a bar to its assertion, and the acceptance of collateral security is sufficient to raise the presumption of such an intention. This presumption may be rebutted by evidence, but there is nothing in this case to show that an intention existed different from that indicated by the facts stated.

The case may be one of great hardship, but we cannot administer relief on that ground. The plaintiff has no remedy as against the property, and must be remitted to his personal action upon the notes.

Judgment affirmed.

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Concurrence Opinion

Baldwin, J.

I concur in the opinion and judgment. I think, however, that the plaintiff is not without remedy. The plaintiff sold to Blanchar and wife—they were to pay—the children were mere donees of them, receiving the benefit of this purchase. Blanchar and wife executed a mortgage on other property of which they were trustees ; this they had no right to do, so as to bind the property; but this arrangement was afterwards set aside, and then Blanchar and wife executed a mortgage on this property, which they had no power to do. On a judgment against Blanchar and wife, this property could be subjected, for the debt was created by Blanchar and wife previously to the conveyance to the children— which conveyance seems to have been a mere voluntary donation— and they being such donees, the conveyance by the act and credit of Blanchar and wife, though made to the wife as trustee for the children, would be, in equity and effect, a conveyance by Blanchar and wife to the children. But Blanchar and wife could not convey this property while they owed debts, so as to deprive the creditor of this means of payment, especially of a debt created for the purchase of the very property conveyed. But this remedy of the plaintiff can only arise after judgment on the notes, though, after judgment, he might sell the property under execution, or file a bill to subject it. The debt must be reduced to judgment before this property can be subjected.

I can see no difference between Blanchar and wife taking a deed in their own names for this property and then conveying it to these children, and their making this bargain, and getting the plaintiff to convey to them, or either, as trustees for the children. In either case, the contract made by them on their individual responsibility, for the conveyance of this property, would be in effect a gift or voluntary settlement upon the children. But the children could not get the property without paying for it. It would be fraudulent to do so, and a Court of Equity would hold the property as that of Blanchar and wife responsible for their debts, before it went as a mere donation to these children.