92 Tenn. 293 | Tenn. | 1893
Gen. John F. Wheless died, intestate and without issue, leaving a widow and numerous collateral kiudred. The bill in this cause was filed for a partition of his lands, where that could be done, and for sale and division of proceeds, where partition in kind might not be practicable.
The widow, in her answer, claimed that the undivided interest of her husband in what is known as the Baxter Smith tract was not realty,
The Chancellor decided this question against her, and she appealed.
Bo doctrine is more firmly fixed in English and American jurisprudence than that of equitable conversion, by which, under certain circumstances, real estate is treated in equity as personal property, and. personal estate as real property.
Through this doctrine, Courts of Equity' treat as land money directed to be employed in the purchase of land, and as money land directed to be sold and converted into money; and the direction upon which the conversion arises may be made by will, or by deed, settlement, or other contract inter vivos. Adams’ Equity, * 135, 136; 1 Pomeroy’s Eq., Sec. 371; 1 Story’s Eq., Sec. 790; 4 Am. and Eng. Ency. of Law, 127; 6 Am. and Eng. Ency. of Law, 664, 665.
It was early recognized in this State (Stephenson v. Yandle, 3 Haywood, 109), and has since been applied in several cases upon the construction of wills. McCormick v. Cantrell, 7 Yer., 615; Williams v. Bradley, 7 Heis., 58; Green v. Davidson, 4 Bax., 488.
The difficulty which sometimes arises in the application of 'the principle to a particular instrument, lies not in the subtlety of the principle itself, but rather in ascertaining the intention of the maker from the words employed.
Mr. Pomeroy says: “No express declaration in the instrument is needed that land shall be treated as money! although not sold, or that money shall be deemed land, although not actually laid out in the purchase - of land. The only essential requisite is an absolute expression of an'intention that the land shall be sold and turned into money, or that the money shall be, expended in the purchase of land. * * * The true test in all such eases is a simple one: Has the will or deed creating the trust absolutely directed, or has the contract stipulated, that the real estate be turned .into personal, or the personal estate be turned into real?” 3 Pomeroy’s Eq., Sec. 1159.
Again, “the whole scope and meaning of the fundamental principle underlying the doctrine are involved in the existence of a duty resting upon the trustees, or other parties, to do - the specified act; for unless the equitable right exists, there is no room for the operation of the maxim, ‘Equity regards that as done which ought to be done.’
To the same effect are Wait’s Ex’rs v. Page, 19 N. J. Eq., 375; Ford v. Ford, 70 Wis., 19; Hobson v. Hale, 95 N. Y., 598.
Rumerous other authorities, text-books, and judicial decisions are at hand, but they are, in the main, so harmonious ( and so entirely in accord with the full quotation just made from Mr. Pome-roy, that, we forbear to make further citations with respect ' to the character of direction neces
As a matter of some moment on the question .of construction, it is well to observe that, unless the sale or purchase contemplated is expressly directed to be made .at a specified time in the future, or upon the happening of some particular event, .which may or may not happen, the conversion takes place, in wills, as from the death of the testator, and in deeds' and other instruments inter vivos, as from the date • of their execution. 3 Pomeroy’s Eq., 1162.
The instrument upon which the controversy arises in this cause is a .deed, in the following language: '
“"We, Baxter Smith and wife, Bettie Gr. Smith, •* * * * in consideration of the sum of .$34,395.60, paid and secured to be paid as hereinafter mentioned, have bargained and sold, and do hereby transfer and convey, unto James II. Yar-brough, in trust, as hereinafter mentioned, the following tract of land: * * * *
“ To have and to hold for himself and other beneficiaries hereinafter named, in trust for the following uses and purposes — that is to say, said tract of land has been jointly purchased by James C. Warner, Percy Warner, John P. White, John E. Wheless, B. E. Wilson, W. M. Grantland, Chas. L.' Bidley,. Baxter Smith, and J. II. Yarbrough, L. H. Davis, and Gr. A. Maddux, the last three purchasing as a firm, under the firm name and style*299 -of Yarbrough., Maddux & Davis, each paying and to pay one-tenth of the purchase-money for said land, as hereafter set out, except John P. White, who pays two-tenths; * * * * •said tract of land is conveyed to said J. H. Yar-brough, as trustee for said named purchasers, with power and authority to hold, possess, and manage the same in their interest and behalf, and to sell :and convey the same by deed in fee-simple, upon the written direction of a majority in value of the adult beneficial owners then living, upon such •terms and conditions as they may direct, and to •collect and divide the proceeds of sale among said beneficiaries, their heirs, administrators, executors, .and assigns, as their several interests may appear. '* * * * The aforesaid sum of $34,-395.60 has been paid and secured to be paid as follows: * * * * To secure the payment of the promissory notes herein described, a lien is expressly retained upon the share or interest of the maker alone, and not against the tract as a whole. In case any of the beneficiaries herein named, in order to preserve his or their own title, should have to pay and discharge for another any accruing taxes or other incumbrance or lien upon the whole property, then, in that' event, he or they shall have a lien upon the share or interest of the person who has failed to make such payment. Should said J. II. Yarbrough desire to resign the trust herein given him, he may do so by and with the consent and approval, in*300 writing, of a majority in value of the adult beneficial owners named above, and appoint in his-room and stead a new trustee, and clothe him with like power and duties as those now conferred on him, by a suitable deed of conveyance, in writing, to be recorded in the Register’s Office of Davidson County, Tennessee.”
Such are the material portions of the instrument the Court is called upon to construe in this case;, and the inquiry is, whether the land conveyed thereby is to be treated in equity as realty or as personalty. If as realty, the share of General Wheless passed to his heirs under the statute of' descent; if as personalty, it went to his widow as sole distributee, subject in either case, of course, to-his debts.
A general view of the deed readily discloses a. proposed speculation entered into by several persons jointly — -a syndicate buying land to sell again. In furtherance of the scheme, a trustee was appointed and the land conveyed to him for the benefit of all the purchasers, for each of them according to-his interest.
The idea of a resale, as the ultimate object of the enterprise, runs through the whole instrument. It appears from the nature of the transaction, from the words conferring upon the trustee power and authority “to sell * * * and collect and divide-the proceeds,” and from the provision for appointment of successor in case the trustee should resign,, that a partition in kind should ever occur, or
All this is clear; but it is entirely consistent with the proposition that the trust was created merely as a cheaper and more convenient method ■of preserving and conveying the land.
More is required to make a case of equitable' •conversion. The fact .of a contemplated resale is present in every purchase of land upon speculation, and land purchased with such view is not converted into personalty by the mere appointment of a trustee to receive the title, and as the agency through which the resale is to be accomplished for the owners.
It is manifest that the paramount object of the ■enterprise was a resale of the land, through the trustee as representative of the beneficial owners; yet the deed does not contain any imperative direction that he shall sell. Ho absolute, unconditional duty to sell is placed upon him; “the -equitable ought” is not to be found in the deed, either as a matter expressed or to be necessarily implied. Rot only does it contain no positive direction that he shall sell, but it, in reality, does not even permit him to sell upon his own motion. His only power of sale is made to depend, expressly, upon the direction of others. He has no independent authority in that respect. The words
This language imposes upon the trustee, no-positive, unqualified obligation to sell the land at all events. At most it but gives him authority to-sell, at such time and upon such terms and con. ditions as others, may direct. In effect it but makes him the instrumentality through which a-majority of the beneficial owners, living at any given time, may make a sale. lie has no right to sell without their written direction, and no-authority to demand or require such direction at one time or another. It cannot be that ,a conversion was -wrought by the creation of a trustee-so passive as this one is.
To' meet the fact that the trustee has no power to sell, unless directed by a' majority of the adult beneficiaries to do so, it is suggested that the beneficiaries themselves are clothed with a trust, to,the extent of being empowered to direct when and how the sale shall be made, and that they are-bound to give such direction.
There can be no doubt that it was contemplated that the beneficiaries should, at some time, give-the trustee the required direction to sell the land,: and that a 'duty was, to that extent, indirectly
The purchasers, though intending an ultimate sale, clearly had no thought that the terms of the deed changed the character of the property, and converted the real estate into personalty. That they inteuded the land to be held as realty until actually sold and turned into money, is manifest from the general frame and terms of the deed, and especially from those parts of it retaining separate liens in favor of the grantor, and providing for a special lien in favor of such beneficiaries as might be compelled to pay taxes or discharge liens for others. In the portions of the deed last, referred to, the interest of each of the several beneficiaries is referred to as an interest in land as such, and provisions are made with reference thereto which would be inappropriate as applied to personalty.
We are .of opinion that the deed shows upon its face, when considered as a whole, that the land was conveyed to a trustee merely for convenience, and to save expense and trouble in the ultimate sale and conveyance, and that no conversion took place.
• Our attention has been called to the very instructive and soundly-reasoned case of Crone v. Bolles, — N. J. Eq., — (reported in 24 Atlantic
Affirm the decree.