Lead Opinion
Thе trust established by the verdict is that J. G. Hughes, the grantee in the deed of 1886, should hold the title in trust to convey the same to the wife of Joseph G. Hughes for life, and then to himself for life if he survived her, and then to Mary Elizabeth Hughes for life, with a remainder over in two-thirds of said lands to her children if any surviving her should live tó be 21 years of age, and in one-third to the plaintiffs; and if she, said Mary Elizabeth Hughes, should die without children her surviving who should live to be 21 years of age, then to convey the whole of said lands after the death of said Mary Elizabeth Hughes to the children of said D. T. Pritchard, the plaintiffs in this action, share and share alike, in fee simple.
The verdict, when considered in connection with the charge, also establishes that neither the defendant nor any one under whom he claims is a purchaser for value, so that the question discussed, but not decided, in Wood v. Tinsley,
The plaintiffs as remaindermen, vested as to one-third and contingent as to two-thirds interest, could have maintained an action to have the trust declared during the existence of the life interest, as withоut this right it would have been in the power of the trustee to defeat the trust, resting in parol, by a conveyance to an innocent purchaser for value. “Where, however, a party has an interest, it is perfectly immaterial how minute the interest may be, or how distant the possibility of the possession of that minute interest, if it is-a present interest. A present interest, the enjoyment of which may depend upon the most remote and improbable contingency, is nevertheless a present estate; and, as in the case upon Lord Berkley's Will, though the interest may, with reference to the chance, be worth nothing, yet it is in contemplation of law an estate and interest, upon which a bill may be supported.” Danll., Oh. Pr., Yol. 1, 317.
“A remainderman is entitled to equitable relief whenever necessary to protect his interest against loss or injury.” 16 Cyc., 658. See to same effect, Story Eq. PL, sec. 301; Allan v. Allan, 6 Ves., 135; Latham v. L. Co.,
This right is in the nature of a bill in equity to perpetuate testimony, with the additional element of declaring the trusts, which is no more than the jurisdiction in equity to enter a decree preserving the property when it is in danger of loss and where, but for such decree, the rights of interested parties might be destroyed.
In such procеeding by the remaindermen, the land itself, with the right of control and possession, is not before the Court.' The res is the establishment of the respective interests in the title, and no order or decree can be entered disturbing the possession of those entitled to interests for life, and it cannot therefore be the equivalent of, nor coextensive with, an action to declare the trust and to recover possession of the land.
If this right did not exist in the remaindermen, lapse of time cannot affect the present action for possession, which could not be maintained until the death оf the life tenant in 1915, and if it did exist it came into being at the same time and by the same act with the right now attempted to be exercised, to establish the trust and to recover possession. The two rights are not only not inconsistent, but one includes the other, and it is only when two rights are inconsistent that the party is put to his election, and that the exercise of one or the failure to do so bars the other.
In Stewart v. Conrad,
In Watson v. Thompson, 12 R. I., 472, it is held that although a remainderman might maintain an action to bave a resulting trust declared during tbe existence of a life estate, that bis failure to do so would not be accounted to him as laches and cause a forfeiture of his right of action on tbe termination of tbe life estate.
In Gibson v. Joyner,
In the first of these cases stock was bequeathed to Charles Bradley in 1854 to hold for Lucy Jewett for life, and upon her death for her surviving children. The stock appeared on the books of the company in the name of Bradley, trustee for Lucy Jewett. In 1869, Bradley, trustee, transferred the stock to Lucy Jewett absolutely and new stock was issued, which in the same year was sold by her to various persons. Lucy Jewett died in 1898, twenty-nine years after the sale, and the children commenced their action the following year. It was held that the action was not barred by the statute of limitations, and the Court, among other things, said: “The defendant further sets up the statute of limitations against the demand of 'the plaintiffs. We are not deciding that the plaintiffs had no right to interfere in the transfer of the stock to have it restored to its proper ownership at any time after the wrongful transfer, but they were not compelled to take action for the recovery of the stock or its value until after the death of their mother, which occurred in 1898. This action was commenced in 1899, and is not therefore barred by the statute of limitations.”
In the Baker case the facts are similar, except the interest'in remain-dermen was contingent and forty-seven years elapsed after the breach of trust before the death of the life tenant, and it approves the Wooten case.
Again, neither the defendant nor any one under whom he claims has held adversely to the plaintiffs during the existence of the life interests, as none of them are purchasers for value and all took with notice of the equity of the plaintiffs.
This deed operated to eonvey to the wife her interest for life, and as she had notice of the plaintiffs’ equity she held the fee in remainder in trust for the plaintiffs, and the same rule prevails as to the conveyance to the defendant. McMillan v. Baker,
In the Balcer case, Ronald McMillan, trustee, was direсted by a court of equity to invest certain money in land to be held in trust for his wife for life, and then for her children, and in 1855, in violation of the trust, he made the investment and took the title in trust for his wife in fee. The trustee died in 1860 and the wife in 1878, and the action was commenced the following year by the children against the defendant, who bought under an execution sale against the wife in 1869. It was held that the deed in favor of the wife, although in form a fee, conveyed the life estate, and that there was no adverse holding against the plaintiffs by the wife or the defendant until the death of the wife.
We are, therefore, оf opinion the plaintiffs’ cause of action is not barred by the lapse of time.
We have considered the other exceptions of the defendant and find no reversible error.
The exception principally relied on is to the refusal of his Honor to permit the defendant to prove, for the purpose of impeachment, by the cross-examination of D. T. Pritchard, who was the principal witness to establish the trust, that he qualified as executor of D. L. Pritchard, and that he made no return of the land in controversy, although the debts of the estate exceeded the-assets.
The first answer to the position of the ^defendant is that the facts sought to be elicited from the witness substantially appeared in evidence.
The witness testified that he qualified as executor, and the fact that the title remained in Hughes and his grantee until the commencement of this action shows that he never proceeded against the land in controversy as the property of D. L. Pritchard. He also testified that he administered the whole estate of his uncle; that the whole estate was sold and his indebtedness paid as far as it went; that the only man he owed was Mr. Hinton, and he оwed him $9,000, which clearly implies that the assets were not sufficient to pay the debts.
No error.
Concurrence Opinion
concurring: If section 980 of our Registration Laws, commonly known as tbe Connor Act, applies to parol trusts, invalidating them as to subsequent purchasers bolding deeds duly registered, the issues are not fully determinative of tbe controversy, and tbe cause should be remаnded for further findings. Owing to tbe way tbe second and third issues are framed, “Is defendant, or any of those under whom be claims, a purchaser for value and without notice of tbe trust?” tbe response “No” may very well signify, and be made on tbe ground, tbat defendant is a purchaser for value, but witb notice. There is evidence to support such a finding, and it has been repeatedly held tbat when tbe Connor Act applies, no notice however formal will affect tbe bolder under a deed first registered on tbe theory tbat tbe act controls tbe rights of tbe parties. Tbe answer, therefore, is not neсessarily conclusive.
I am of opinion, however, tbat tbe act in question does not apply to parol trusts and in no way affects them or tbe rules by which they are established and enforced. Drawn witb intelligent care and foresight by our former Associate Justice Connor, now an honored member of tbe Federal bench, it was professedly designed and intended to affect priorities arising from registrations, and from its very nature and purpose, therefore, is restricted to written instruments capable of registration, and tbe act, in terms, applies only to “conveyances of land, contracts to convey, and leases of land for more than three years” — all required to be in writing by other sections of tbe same statute. I conclude, therefore, tbat these trusts, resting in parol and fully recognized by our law (Jones v. Jones,
This then being tbe correct position and tbe verdict on tbe first issue having established tbe existence of tbe trust estate, tbe findings on tbe
Dissenting Opinion
dissenting: Probably there is no constructive legislation of recent years that is more important and the maintenance of which in its integrity is more necessary to the landowners of North Carolina, whether buyers or sеllers, than the Connor Act of 1885, ch. 147, now Ee-visal, 980. Prior to the passage of that act it was almost impossible for a lawyer to advise an intending purchaser of land, or for him to feel sure that he was not buying a lawsuit. An examination of the records would only show the conveyances that were recorded and at any time a prior unregistered conveyance might turn up and oral evidence might satisfy the jury that the purchaser or some of those under whom he claimed, had taken a conveyance with notice ’of the unregistered title. Besides .the disabilities of those under whom the plaintiff claimed by reason of nonage, or marriage, or otherwise, might accumulate and thus a lapse of 80 years has been known to prevent the protection even of possession under color of title.
Under these circumstances it was absolutely necessary that those buying land, especially those coming from other states, should have the protection of a statute in favor of the purchaser against “actual or constructive notice” of an “unregistered” deed or “contract to convey.”
It has been often held under this statute, “No noticе to the purchaser, however full and formal, will supply the place of registration. All secret trusts, latent liens, and hidden incumbrances are and were intended to be cut up by the roots by force of our registration laws,” citing Blevins v. Barker,
Under the Connor Act, if A registers first a convеyance from B he takes a complete title to B’s interest, however formal and full a notice he may have of a former unregistered conveyance, or of any “secret trust, latent liens, or hidden encumbrances.” It would be strange indeed if by
In this case, the plaintiffs, the children of D. T. Pritchard who were nephews and grand nieces of D. L. Pritchard, seek to impress a parol trust upon the land described in the complaint in the hands of the defendant after the lapse of 30 years. On 2 January, 1886, more than 30 years-before 14 October, 1916, the date of the summons in this action, D. L. Pritchard made a fee simple deed for the premises to his son in law J. G-. Hughes, which was witnessed by James A. Spencer, and in March, 1886, D. L. Pritchard died. On 14 March, 1888, after levy of execution and allotment of a homestead in part of said land (one of the commissioners to allot being James A. Spencer, witness to the aforesaid deed), the excess was sold by Wright, the sheriff, and bought by James H. Sawyer. After the death of Sawyer the land owned by him was sold by commissioners in partition 11 September, 1899, and conveyed to L. P. Williams. On 15 January, 1900, Williams conveyed to McCoy; 7 January, 1907, McCoy conveyed to Lynch; 14 March, 1911, Lynch conveyed to the defendant.
On 14 March, 1894, Hughes conveyed the other part of the land covered by the homestead to his'wife, who on 3 May, 1907, conveyed to the defendant and her daughter joined in the conveyance.
Each of the above conveyances purported to convey a fee simple and each of the successive grantees possessed the land, claiming absolute ownership. There is evidence that the defendant, since the date of his deed, has been in possession, cultivating the jjremises, and has enhanced its value by $5,000 in cash spent on buildings and other improvements.
The plaintiffs seek to prove the trust solely by the evidence of D. T. Pritchard, father of the plaintiffs, who alleges that at the time of its creation there was present besides the grantor himself Hughes, the grantee, Mrs. Hughes, and the witness Spencer. No action was brought to set up this trust until more than 30 years after the death of the grantor, 15 years after the death of the grantee, many years after the death of the witness Spencer, and more than two years after the death of Mrs. Hughes. Before the beginning of this action, Sheriff Wright and the grantees Sawyer and McCoy had died, Williams had moved to Virginia, and Lynch, the only grantee in the chain of conveyances living and present, denied any knowledge of the alleged trust and testified on the contrary that before he purchased D. T. Pritchard himself expressly advised him to buy, and D. T. Pritchard did not deny this statement on the stand.
Furthermore, when tbe defendant bought tbe land, D. T. Pritchard, ■the sole witness for tbe plaintiffs, and their father, received a part of tbe purchase price in satisfaction of bis judgment, for when tbe homestead was laid off and tbe excess was sold by "Wright as sheriff and purchased by Sawyer, under whom tbe defendant claims, this was done at tbe instance of D. T. Pritchard, individually and also as executor of D. L. Pritchard as judgment creditors in tbe action against Hughes.
Without now discussing tbe m’any well-grounded exceptions taken on “the trial that tbe statute of limitations is a bar to tbe plaintiffs’ action, Lynch v. Johnson,
It is true that tbe Connor Act does'not apply except in favor of pur-•ebasers for value and creditors, but there is no clear and unambiguous finding in this record that tbe defendant was not a purchaser for value, nor is there such unambiguous finding that be bad notice of said trust, .and no evidence justifying such finding.
Tbe issues submitted are: “Did tbe defendant or any of those under whom be claimed, purchase tbe 160-acre tract of land for value and without notice of said trust?” And there is tbe same issue as to tbe 80-acre tract. To both issues tbe jury answered “No,” which is a finding, •construed in tbe light of tbe evidence, that tbe defendant and some or all of those under whom be claimed, рurchased for value but with notice ■of said trust. Tbe two negatives make an affirmative. Tbe form used, “'purchase for value and without notice” of said trust, with tbe negative response, may well mean equally that tbe defendant was a purchaser for value, but with notice, or took tbe property not as a purchaser but without notice.
Tbe person intended to be protected by tbe Connor statute was tbe purchaser or creditor who bad full notice of tbe prior conveyance or trust. These findings do not determine that tbe defendant and all those under whom be claims werе or were not purchasers for value, but merely •settles that if such purchasers, they did not take without notice of said trust; whereas if they were purchasers, though with notice of said trust, they were protected from the plaintiffs’ claim by tbe terms of tbe Connor Act.
When a “secret trust” is thus attempted to he set up after the lapse-of thirty years by only one witness, D. T. Pritchard, who is the father of the plaintiffs, and who is shown to have received a profit by the sale of the property as belonging to the grantee’s estate, and who did not deny the statement on oath of a witness who testified that D. T. Pritch-ard had told him that the title was good, and in view of the numerous; exceptions of law and the laches of the plaintiffs, who are'proceeding-in equity, it is 'surely proper to require that the findings upon which a court shall proceed to oust the defendant shall be clear and unambiguous whether he and none of those under whom he claims was a purchaser, and. also a separate and distinct finding whether he and all those under whom he claimed acquired the property with notice of the trust.
The oral agreement attempted to be set up by plaintiffs after the-lapse of more than 30 years was that Hughes agreed orally that “after the death of D. L. Pritchard he would execute a deed in fee simple conveying said land to his wife for life, with the remainder to himself for life if he survived her, then with remainder over in two-thirds of said land to her children and remainder in one-third to the plaintiffs on certain contingencies.” This is a “contract to convey” which comes within the very letter of the Connor Act, Revisal, 980, and is therefore invalid as-against the defendant both because unwritten and because unregistered if it had been written. Lynch v. Johnson, 171, bottom of page 616, discusses and decided this very point. The plaintiffs can be in no better-condition because it was not in writing. If in writing, it would be invalid because not registered. The court should therefore have entered a nonsuit against the plaintiffs. At best, for the plaintiff it is an implied or constructive trust arising by operation of law from the acquisition by the defendant of trust property with notice and without adequate consideration. University v. Bank,
The statute of limitations runs whether this trust is express or implied, for the possession of a trustee is presumed to be that of the cestui que trust. Mitchell v. Freeman,
In this case, even if the trust had been express, this action has long since been tolled by reason of the open repudiation by the successive deeds made and registered, beginning with the deed for the excess by Wright, the sheriff, and deed for the homestead to Hughes. Indeed, the alleged trustee died more than fifteen years before this suit was instituted, as in Dunn v. Dunn,
It is well settled that the rule that the statute of limitations does not run against the cestui trust applies only to express trusts, and that implied or constructive trusts are barred by the statute of limitations. 25 Cyc., 1155; Falls v. Torrence,
A trust to convey, which is alleged in the complaint, with no other active duties to perform, is deemed an active trust. 3 Pomeroy Eq., sec. 992. The plaintiffs could have called for a conveyance in accordance therewith at any time after the death of D. L. Pritchard, now thirty-two years ago, and the statute began to run from the time the right accrued to call upon the court to declare the holder of the legаl title a trustee. Greenleaf v. Land Co.,
If this were a passive or naked trust (Wilder v. Ireland,
The plaintiffs, on their contention, were vested remaindermen in one-third and contingent remaindermen in the other two-thirds of this land and had a right of action to have a court declare the trusts to protect their remainder from sale to some purchaser for value without notice, and having failed .for thirty-two years to assert it, they are now barred. Greenleaf v. Land Co.,
If one of the plaintiffs is barred, all are, since the declaration of the trust in one action would inure to the benefit of all, for they are all in the same class. Yarborough v. Moore,
The evidence is complete and overwhelming and practically uncontra-dicted that the defendant and those under whom he claims were purchasers for value. The finding that the defendant and those under whom he clаims were not “purchasers for value and without notice,” taken in connection with all the evidence, means simply that they were “purchasers, but with notice.” The issue, in the best light for the plaintiffs, is insufficient and ambiguous.
The trust attempted to be proven that at the time D. L. Pritchard conveyed the land to Hughes the latter agreed verbally that “after the death of D. L. Pritchard that he would execute a deed in fee simple conveying said land to his wife for life, with the remainder to himself for life if he survived her, then with remainder over on certain contingencies,” is not a trust at all, but a mere “contract to convey” which, not being in writing, is void undеr the statute of frauds, and is moreover barred by the Connor Act as to the defendant and those under whom he claims under a chain of registered deeds.
The integrity of titles is of the greatest importance to the landowners of the State and to those who wish to buy land, and this defendant should not be dispossessed upon the allegations of this complaint and the proof of a secret and latent lien after the lapse of thirty years and after having placed $5,000 improvements on the property. It is not found that the defendant was not a purchaser for value, and if the finding can be construed that he was a purchaser with notice, still the defendant is protected both by the Connor Act and the statute of frauds: