Turner v. Smith

| Tex. | Jul 1, 1854

Wheeleb, J.

It is insisted on behalf of the appellant, that the statute of limitations did not apply as between the plaintiff and Waller, the cestui que trust, under whom the defendants claimed, by reason of the relation between them created by the deed of trust; and, consequently, that the plea of the statute cannot avail the defendants.

It, doubtless, is the well settled rule that direct technical trusts, as between trustee and cestui que trust, are not affected by the statute of limitations, so long as the trust subsists. For, “ if the trustee is in possession and does not execute his trust, “ the possession of the trustee is the possession of the cestui “ que trust; and if the only circumstance is, that he does not “ perform his trust, his possession operates nothing as a bar, “ because his possession is according to his title.” But a trustee may disavow and put an end to the trust; and then the rule does not apply. In Angell on Limitations, (p. 471,) it is said, “ Though it has invariably been maintained that the “ Statute of limitations does not apply directly to trusts of the “ nature above considered, (that is, express, technical trusts,) “ yet it has ever been as invariably maintained, that if a trus- “ tee should deny the right of the cestui que trust, and as- “ sume absolute ownership of the property he holds in trust, “ he abandons his fiduciary character, and the cestui que trust “ must commence legal proceedings within six years there- “ from.”

“ There can be no stronger case put,” (it has been said,) “ to illustrate the doctrine, that the statute does not run “ against an established and continuing trust, than that of “ landlord and tenant. On general principles, the tenant is “ not permitted to dispute the landlord’s title. Having entered “ under that title, he can set up no adversary title to protect “ his possession. And yet, if he publicly disclaim his land- “ lord’s title, and profess to hold under a hostile title, the stat- •• ute of limitations will begin to run from the time of such disclaimer.” (2 McLean, C. C. R. 376.)

The principle of estopel, (it is said,) applies to the relation between landlord and tenant, and operates with full force to prevent the tenant from violating the contract, by which he claimed and held possession. He cannot change the character of the tenure, by his own act merely, while the relation subsists, so as to enable him to hold against his landlord, who reposes under security of the tenancy, believing the possession of the tenant to be his own, held under his title, and ready to be surrendered by its termination by the lapse of time, or a demand of possession. The same principle applies to a mortgagor and mortgagee, trustee and cestui que trust, and, generally, to all cases, where one man obtains possession of the property belonging to another, by a recognition of his title. Yet, where the tenant disclaims to hold under his lease, he becomes a trespasser, and his posession is avderse, and as open to the action of his landlord, as a possession originally acquired by wrong. The relation of landlord and tenant is dissolved, and each party is to stand upon his right. (3 Peters. R. 47-49.)

So of the relation of trustee and cestui que trust, if an open, public, adverse claim is set up by the former against the latter, such open denial or repudiation of the trust, brought home to the parties in interest, determines the trust relation. It ceases, from the time of such adversary claim, to be a subsisting trust; and the statute commences to run in favor of the adverse possession.

The question how far trusts are exempted from the operation of the statute, was considered by this Court in the case of Tinnen v. Mebane, (10 Tex. R. 246,) and in the more recent case of Wingate v. Wingate, at the present Term. The general rule is recognized, that a direct, technical, subsisting trust, as between trustee and cestui que trust, is not affected by the statute. “ But even this rule,” (it was said in the former case,) “ loses its force, where the trust is repudiated by “ acts or words of the parties. Where, for instance, the trus- “ tee, in disregard of the cestui que trust, claims absolute own- “ orship in himself, the latter will be barred by the law of lim- “ itations, and the rules in relation to the effect of the lapse of “ time, in other similer cases.”

Applying the law, thus settled, to the present case, there can be no doubt, we think, that the statute of limitations ran in favor of the possession of Waller, from the period when he set up an open, public claim to the property, adverse to the plaintiff, by assuming the absolute ownership, and his open denial and repudiation of the trust was brought home to the plaintiff; as it appears, by the evidence, it was, more than time sufficient to bar the plaintiff’s right of action, before he commenced his suit. Waller had no right to the possession, either before or after the maturity of the debt secured by the deed of trust; unless, upon the execution of the trust, he had become the purchaser. And in that case his title and possession were adverse to the title of the plaintiff. In reference to real estate, and the principle is the same as to personal property, the Supreme Court have said, “ If the entry was by “ purchase, and the purchaser claims the land in fee, he is not “ a trustee; his title, though derivative, is adverse to that of “ the vendor; he enters and holds for himself.” (10 Peters, R. 223.) “ The vendee acquires the property for himself, and “ his faith is not pledged to maintain the title of the vendor.” (4 Id. 506.) “ The vendee is in no sense the trustee of the “ vendor, as to the possession of the property sold : the vendee “ claims and holds in his own right, for his own benefit.” (10 Id. 224.)

The evidence warrants the conclusion that there had been a sale of the property under the power contained in the deed of trust, at which Waller became the purchaser; and that it was by virtue of his purchase, that he asserted an absolute right in himself to the property. However his possession was acquired, it is clear that it was openly and avowedly adverse to the right of the plaintiff; and was a virtual and unequivocal repudiation of the trust, publicly, and within the knowledge of the plaintiff.

If the title of the plaintiff had not been divested by a legal sale under the deed of trust, he had his right of action, to be restored to the possession of the property; subject only to any equity which may have arisen in favor of the purchaser, and to the rights appertaining to the trustee, for the purpose of exempting the trust. And he was fully aware of his rights: for he asserted them in conversation with a witness, and threatened to commence legal proceedings for the recovery of the property. If the plaintiff’s title had not been divested by a sale of the property, his right of action for its recovery, was as perfect and unquestionable when it first came to the adverse possession of Waller, as it was after he had parted with the possession, or when the present action was commenced: and, from the period when the right of action accrued, the statute commenced to run. More than two years from that period had elapsed before the bringing of the suit; ánd the right of action, therefore, was clearly and effectually barred.

But it is insisted that the defendants by voluntarily submitting the property to sale by the trustee in 1848, and becoming the purchasers, admitted the title of the plaintiff, and are estopped from controverting it in this action.

If it be true that subjecting the property to sale, under the circumstances; operated as a relinquishment of the previously acquired title of the defendants, their subsequent purchase, it would seem, would also operate to reinvest them with the title.

But, to this it is objected, that the sale was inoperative to pass the title, because the debt, secured by the deed of trust, was, at the time, barred. It is true that the right of action was lost; but the debt was not extinguished. The money had not been paid. And I do notperceivethat it is a necessary, or legitimate consequence of the right of action having become barred, that the power to sell, conferred upon the trustee by the deed of trust, would be thereby revoked, or annulled. But, whatever opinion may be entertained of that question, it is certain that the proceeds of the sale were applied in payment of the debt, which the plaintiff, though not legally, was morally bound to pay. And before a Court of equity would lend him its aid to set aside the sale, and recover back the property, it would require of him to restore to the purchaser the price.

But it may well admit of a question, whether, by subjecting the property to sale under the deed of trust, the defendants ought to be held to have relinquished their previous acquired title. It cannot be supposed that, by so doing, they intended to admit the superior title of the plaintiff. They were contesting his title in the suit then pending, and asserting a superior title in themselves, by every means in their power. And their object, in their subjecting the property to sale, doubtless was, to protect their possession and place their own title beyond dispute, by extinguishing the only adversary claim.

In every case where a defendant or one in possession, for the purpose of protecting his possession, buys in an outstanding title, derived from one who claims adversely, the purchase, and assertion of the title so acquired, is, in so far, an acknowledgment of the adversary title. But it is not such an acknowledgment as will operate a relinquishment of a previously acquired title, or as will estop the party from controverting the title of his adversary, and showing that his own was the superior and better title. A party may protect his possession, or fortify his right, by bringing in, and thus removing adverse claims, which occasion a cloud upon his title, however or by whomsoever held, without incurring the hazard of forfeiting his title, and without prejudice to his right. And the exercise of this undoubted right was, evidently, all the defendants had in view or sought to accomplish by means of the sale in question. If the title thus acquired was worthless, the having asserted it, cannot, under the circumstances, justly be held to defeat any previously acquired valid title, which the party may have had."

But it is not necessary to the decision of the case, to determine what effect subjecting the property to sale, under the circumstances, had on the rights of the defendants. There is another view of the case, which, independently of the statute of limitations, is decisive against the right of the plaintiff to a recovery.

It sufficiently appears by the evidence, that there had been a sale of the property previous to the 20th of July, 1842, and consequently, long prior to the commencement of this suit. The proceeds of the sale appear to have been credited upon the notes, which the deed of trust was given to secure, and of which the defendants became the assignees. The plaintiff, when speaking of his intention to bring suit to recover back the property, assigned as a reason that the sale had not been legally and fairly made. But whether it was so made or not, the plaintiff received the benefit of the proceeds of the sale ; and before he could maintain his action, in effect, to set aside the sale and recover back the property from the purchaser, or those claiming under him, it was incumbent on him to restore the price which had been paid for it, and reeivced to his use. It would be repugnant to the plainest principles of equity and justice to permit him, thus to set aside and annul the sale, and recover back the property, while he retained the price. To entitle the plaintiff to maintain the action, therefore, he must have refunded or offered to refund the purchase money. This he has not done; and this, of itself, is an answer to the right of action he has asserted, leaving out of view the defence of the statute of limitations, and the several other special defences by which a recovery was resisted. In this view, the rulings of the Court, in refusing instructions asked by the plaintiff, having reference to those special defences, are immaterial. The instructions asked by the defendants cannot be considered as properly the subject of revision, for the obvious reason, that it does not appear by the record whether they were given or refused. (4 Tex. R. 8.) The plaintiff manifestly has failed to make out a right to a recovery; and the judgment must be affirmed.

Judgment affirmed.