Johnson v. Elkins

1 App. D.C. 430 | D.C. Cir. | 1893

Mr. Justice Shepard

delivered the opinion of the Court.

1. The first point made on the demurrer is, that complainant, shown to be a foreign corporation on the face of the bill, cannot maintain the action because prohibited from acquiring title to land by act of Congress of March 3, 1887. This act prohibits aliens and corporations not created under the laws of the United States, or some State or Territory thereof, “to hereafter acquire, hold or own real estate so hereafter acquired, or any interest therein, in any of the territories of the United States, or in the District of Columbia, except such as may be acquired by inheritance, or in good faith in the ordinary course of justice in the collection ■ of debts heretofore contracted.” U. S. Stat. at Large, Vol. 24, p. 476.

It is not directly alleged in the bill that the complainant corporation acquired its title before the passage of the act, though such is the inference reasonably to be deduced from the language used. And here we think it proper to add, that this bill throughout leaves too much to inference that which is capable of precise statement. If the title were acquired before the passage of the act, that of course would settle the question. But if acquired since, the defendants cannot set up the forfeiture of the statute in bar of complainant’s right. The statute is not self-executing. Section 3 provides that property so held or acquired shall be forfeited to the United States, and makes it the duty of the Attorney-General “to enforce every such forfeiture by bill in equity or other proper process.” Until this be done,-the title is not subject to attack by others. Cross v. De Valle, 1 Wall., 5 ; Governeur's Heirs v. Robinson, 11 Wheat., 333 ; Osterman v. Baldwin, 6 Wall., 116; Phillips v. Moore, 100 U. S., 208.

2. It is next claimed that the allegations in the ninth and tenth paragraphs of the bill are too indefinite' to enable the court to determine whether complainant Johnson holds the estate in his own right or as trustee for a syndicate, or as trustee for the Land Company. While lacking again in precision, which would have avoided the raising of this question, we think that, taking the allegations as a whole, they show that the title made to Johnson was in trust for the Land Company.

3. The objection to the third paragraph of the bill is not well taken. It appears plainly enough from the recital of the original contract between Elkins, Smoot and others for the purchase of the Mora Grant, that it was contemplated the title to the lands, as purchased, should be taken in the name of one of the number, who should hold one-fifth of the same in trust for each of his four associates. Hence, the clause binding him (whoever might be selected) to convey an undivided one-fifth to each of the four others. This has no reference to any disposition that might be made by any one of the members of his own interest under the contract.

The same may be said also of the provision “ that no sale of said grant, or that part that might be purchased, should be made unless four of the contracting parties thereto should give their consent in writing that such sale should be made and consummated.” This seems to be a limitation of the powers of the one holding the title in trust for all. It would require a plain and unmistakable declaration to that effect (even if that could be enforced) to restrict each individual’s power of alienation of his own interest.

We think also that the allegations of the fifth paragraph are sufficient to show that the contract therein alleged with Smoot contemplated a sale by him of so much of his one-fifth share as would amount to one-sixth of the whole grant; and this is made perfectly clear by the allegations of the sixth paragraph.

4. The Statute of Limitations does not apply to the case made by the bill of the complainants. The trust is direct and the case is one of exclusive equity jurisdiction. There has not been such laches by complainant as to bar him of relief in equity upon the facts stated. Elmendorf v. Taylor, 10 Wheat., 152 ; Badger v. Badger, 2 Wall., 87 ; Insurance Co. v. Eldredge, 102 U. S., 545.

5. The allegations of the bill of knowledge by Butler and those who claim under him of the equitable rights of complainant in the premises are sufficiently definite.

6. The same may also be said of the charge that Butler obtained the conveyance from Smoot by threats of prosecution for obtaining money through fraudulent representations. It was not necessary to allege the particular facts constituting the alleged fraud practiced by Smoot upon Butler, in order to see if they would make a case sufficient to support a prosecution for crime. The fraud or crime is a collateral fact, an incident, or matter of inducement only to the main question, which is, Did Butler obtain the deed from Smoot through threats of criminal prosecution? However, if Butler did obtain the deed from Smoot in this manner and upon this consideration, complainant cannot avail itself of that fact to annul it. The only bearing, therefore, that this matter can have is in connection with the fourteenth paragraph, where it is charged that Butler is not a purchaser for value.

7. The important question raised by the demurrer lies in the allegations of the sixth, seventh and eighth paragraphs of the bill. It is contended that the deed made by Elkins to Smoot passed the legal title to him, which remains in him notwithstanding the surrender of the deed without record and the endorsement of the terms of surrender thereon signed by both Elkins and Smoot.

We shall assume that the deed was not recorded, because in the absence of allegations concerning this, we must presume that the common law prevails in New Mexico. It is strange, however, that the bill should be silent with respect to a fact so important and susceptible of such easy and certain ascertainment.

The general rule as to the effect of the cancellation or mutilation of a deed to land is well stated by the chief justice of this court in the opinion in Fitzgerald v. Wynne, ante, p. 120, as follows: “ It is certainly a general rule, that where a party makes a perfect deed of conveyance of an estate in land, that is to say, where he executes and delivers a deed of conveyance as his final act, the estate in the property, if equitable, at once passes to the grantee, equally as it would on a conveyance of a legal estate, unless the operation of the deed be restrained by statute. The grantor cannot revoke such deed, unless he has reserved to himself a power of revocation. And where such deed has been destroyed, by the grantor, after delivery' to the grantee, secondary evidence of its contents may be given, and the deed set up against the grantor and his heirs and devisees, and against volunteers claiming under him. . . The deed here- was executed and delivered as the final act of the grantors, and the equitable interest in the property thereupon passed and became vested in the grantee, and that interest was not divested by the subsequent unauthorized obliteration or erasure of the signatures of the grantors from the deed.”

It will be noticed from this guarded statement of the rule, in a case, too, entirely different from this one, that it is not without limitations and exceptions. From the allegations of this bill it appears that the deed from Elkins to Smoot of September 17, 1873, was made at Blackmore’s request, and for the sole purpose of enabling Smoot to convey to Black-more the portion of his interest in the grant according to their then existing contract. Elkins made the deed for this purpose and sent it to Smoot. Blackmore and Smoot extended their trade for the land and no deed was made by Smoot to him, as originally contemplated, on that account.

As a result of the additional negotiations Blackmore purchased all of Smoot’s interest and paid him for it. The object of Blackmore seems at first to have been to obtain a perfect legal title to his partial interest and hold it independently of Smoot — who still then had a small interest — and his associates and discharged of the trust in Elkins. Having at last purchased the whole of Smoot’s interest, he seems to have changed his intention and to have concluded to take Smoot’s place in the syndicate and leave the legal title as before in Elkins. It appears, therefore, that the object of the deed was not to vest a title in Smoot except as a means to enable him to vest one in Blackmore. He was to be merely a conduit of the title to its ultimate destination. Upon these facts we must hold that the legal title to the land in controversy is still in Elkins. The facts as alleged bring the case within the exception to the general rule established in Holmes v. Trout, 7 Pet., 171, the facts in which are quite similar. McLean, J., in delivering the opinion of the court, said: “They allege expressly that the deed executed by Short to Holmes, never having been recorded, was delivered up and cancelled by those who had full powers on the subject, and that another deed was executed by Short upon proper authority, vesting the fee to one moiety of the land in Breclcenridge, and the other in the complainants. . . . The principle is admitted that the mere cancelling of a deed does not reinvest the title in the grantor under the laws of Kentucky; but, under the circumstances of this case, the court are clear that the deed to Holmes must be considered as a nullity. . . . The conveyance may have been made with the sole view of enabling Holmes to convey to others who had purchased; and a different arrangement being made, as the deed had not been recorded, and Holmes not having acted under it, it was probably surrendered, with all other papers relating to the land, to Breclcenridge, by those who had full power to do so, as stated in the amended bill; on which surrender Short executed the deed to the complainants and Breclcenridge. Whatever may have been the facts in regard to the delivery of the deed to Holmes and its surrender, this court have no difficulty in treating it as a void instrument, under all the circumstances of this case,”

This doctrine, if it needed any support, would find it in the following well-considered cases, in the majority of which, under facts nearly allied, it was held that the surrender or destruction of the deed operated to recreate a legal title in the grantor by estoppel. Commonwealth v. Dudley, 10 Mass., 403 ; Holbrook v. Tirrell, 9 Pick., 105 ; Lawrence v. Stratton, 6 Cush., 163 ; Trull v. Skinner, 17 Pick., 213 ; Farrar v. Farrar, 4 N. H., 191; Howard v. Massengale, 13 Lea, 577; Faulks v. Burns, 1 H. W. Green (N. J. Ch.), 250; Stanley v. Epperson, 45 Tex., 644.

It follows from what has been said that the demurrer must be overruled, with costs to the complainants, and the cause remanded to the Supreme Court of the District of Columbia, with direction to pass a decree overruling the demurrer, whereupon the cause will be proceeded with according to the practice of said court.

Demurrer overruled.