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order to put the statute in motion, it must appear that the cestui que trust had, or ought to have had, knowledge of the trustee's denial, repudiation, or adverse claim, and that the trustee has been guilty of no fraud in that regard.1
kins v. Cartnell, 4 Harr. (Del.) 270; Sheldon v. Sheldon, 3 Wis. 699; Tinnen v. Mebane, 10 Tex. 246.
1 Keaton v. Greenwood, 8 Ga. 97; Fox v. Cash, 11 Penn. St. 207; Roberts v. Berdell, 61 Barb. (N. Y.) 37; Moffatt v. Buchanan, 11 Humph. (Tenn.) 369; Grumbles v. Grumbles, 17 Tex. 472; Houseal v. Gibbs, 1 Bailey (S. C.) Eq. 311; Robinson v. Hook, 4 Mas. (U. S. C. C.) 152.
SEC. 213. Exceptions to the Rule relative to Express Trusts. — The rule that a direct and technical trust is not within the operation of the statute is subject to two exceptions: first, that no open denial or repudiation of the trust is brought home to the knowledge of the cestui que trust, which requires him to act as upon an asserted adverse title; and, second, that no circumstances exist to raise a presumption from lapse of time that the trust has been extinguished. There is, as we have seen in a former chapter, a defence peculiar to courts of equity founded on lapse of time and the staleness of the claim, where no statute of limitations applies to it. In such cases, courts of equity often act upon their own inherent doctrine of discouraging antiquated claims, ship by the trustee, lapse of time can constitute no bar to relief. But when the trust relation is repudiated, and time and long acquiescence have obscured the nature and character of the trust, or the acts of the parties or other circumstances give rise to presumptions unfavorable to its continuance, in all such cases a court of equity will refuse relief on the ground of lapse of time, and its inability to do complete justice. Nettles v. Nettles, 57 Ala. 539; Philippi v. Philippi, 61 Ala. 41; Lansdale v. Smith, 106 U. S. 391; Goodwyn v. Baldwin, 59 Ala. 127; Maury v. Mason, 8 Port. (Ala.) 211 ; Philippi v. Philippi, 115 U. S. 157. If twenty years are allowed to elapse from the time from which proceedings could have been instituted for the settlement of a trust, without the commencement of such proceedings, and there has been no recognition or admission within that period of the trust as continuing and undischarged, a presumption of settlement arises which operates as a positive bar. McCarty v. McCarty, 74 Ala. 546; Greenlees v. Greenlees, 62 id. 330; Harrison v. Heflin, 54 id. 552; Rhodes v. Turner, 21 id. 210; Blackwell v. Blackwell, 33 id. 57; Worley v. High, 40 id. 171; Ragland v. Morton, 41 id. 344; and this may be said to be the settled law of equity jurisprudence. Cholmondeley v. Clinton, 2 Jac. & Walk. 1,138. Hovenden v. Annesley, 2 Sch. & Lef. 607; Elmendorf v. Taylor, 10 Wheat. (U. S.) 152; Wagner v. Baird, 7 How.(U.S.) 233; Bowman v. Wathen, 1 id. 189; Kane v. Bloodgood, 7 Johns. Ch. (N. Y.) 90.
When the trust is repudiated by clear and unequivocal words and acts of the trustee, who claims to hold the trust property as his own, and such repudiation and claim are brought to the notice of the beneficiary in such a manner that he is called upon to assert his equitable rights, the statute of limitations will begin to run from the time such repudiation and claim came to the knowledge of the beneficiary. Turner v. Smith, 11 Tex. 620; Williams v. First Presbyterian Society, 1 Ohio St. 478; Oliver v. Piatt, 3 How. (U. S.) 333; Badger v. Badger, 2 Wall. (U. S.) 87; Gratz v. Provost, 6 Wheat. (U. S.) 481; Meriam v. Hassam, 14 Allen (Mass.), 516; Att.-Gen. v. Federal St. Meeting-House, 3 Gray (Mass.), 1; Kane v. Bloodgood, 7 Johns. Ch. (N. Y.) 90; Wedderburn v. Wedderburn, 4 Myl. & Cr. 41; Bright v. Legerton, 2 De G. F. & J. 606.
2 STORY, J., in Baker v. Whiting, 3 Sumn. (U. S. C. C.) 466; Edmands v. University, 1 D. & B. (N. C.) 325.
It is true, as a general rule, that when the relation of trustee and cestui que trust is uniformly admitted to exist, and there is no assertion of adverse claim or owner
8 "Equitable Actions," Chap. VI.
for the peace of society, by refusing to interfere where there has been. gross laches in prosecuting the right, or acquiescence in the assertion. of an adverse right.1
SEC. 214. Stale Trusts not favored in Equity." A court of equity," says LORD CAMDEN, "which is never active in relief against conscience or public convenience, has always refused its aid to stale demands, where the party has slept upon his rights. Nothing can call forth this court into activity but good conscience, good faith, and reasonable diligence. Where these are wanting, the court is passive and does nothing. Laches and neglect are always discountenanced, and therefore from the beginning of this jurisdiction there was always a limitation to suits. But as the court has no legislative authority, it could not properly define the time of bar by positive rule; it was governed by circumstances. But as often as Parliament had limited the time of action and remedies to a certain period in legal proceedings, the Court of Chancery adopted that rule, and applied it to similar cases in equity; for when the legislature had fixed the time at law, it would have been preposterous for equity, which by its own proper authority always maintained a limitation to countenance laches beyond the period that the law has been confined to by Parliament, and therefore in all cases where the legal right has been barred by Parliament, the equitable right to the same thing has been concluded by the same bar."2 But courts of equity do not apply the statute to matters peculiarly and exclusively within their own jurisdiction, and for this reason no lapse of time will preclude a court of equity from investigating transactions and accounts between parties standing in the relative situation of trustee and cestui que trust, where the transactions between them are not closed, and the delay of the claim is attributable to the trustee not having given that information to his cestui que trust to which he was entitled, and accounted with him in such manner as he ought to have done, or where the circumstances are such as to operate as a reasonable excuse for the delay; and where fraud is imputed and proved, the length of
1 Wagner v. Baird, 7 How. (U. S.) 234; Kennedy v. Georgia State Bank, 8 id. 586; Stearns v. Page, 7 id. 819; Piatt v. Vattier, 9 Pet. (U. S.) 405; Fenson v. Sanger, 5 N. Y. Leg. Obs. 43.
2 Smith v. Clay, 3 Bro. C. C. 640, note. In Mellish's Estate, 1 Pars. (Penn.) 482, the court refused to compel a trustee to account after an unexplained delay of thirty
3 Wedderburn v. Wedderburn, 2 Keen, 749; Sheldon v. Weldman, 1 Ch. Cas. 26; Phillips v. Munnings, 2 My. & Cr. 315; Hollis's Case, 2 Vent. 345; Smith v. Pocock, 23 L. J. Ch. 596. Ignorance of one's rights, at law, does not prevent the operation of
the statute of limitations. Campbell v. Long, 20 Iowa, 382; Bossard v. White, 9 Rich. (S. C.) Eq. 483; Martin v. Bank, 31 Ala. 115; Davis v. Cotton, 2 Jones (N. C.) Eq. 430; Abell v. Harris, 11 G. & J. (Md.) 367. And this is so even though the action is founded on a breach of trust. Cole v. McGlathry, 9 Me. 131. But in equity it would operate as an excuse for delay, especially if the trustee had failed to inform the cestui que trust of the facts. Pugh v. Bell, 1 J. J. Marsh. (Ky.) 399; Halsey v. Tate, 52 Penn. St. 311.
4 Prevost v. Gratz, 6 Wheat. (U. S.)
time during which the fraud has been concealed and practised is rather an aggravation of the offence than a circumstance to excuse delay.1 In a Pennsylvania case, where after a delay of seventy years, upon a bill brought for an accounting for certain stocks which had been sold in trust for a person who was then dead, who knew the facts, but never set up any claim under the trust, the court refused to interfere. In a New Hampshire case it was held that lapse of time without any claim or admission of an existing trust, coupled with circumstances tending to show that the trust has been executed, raises a presumption of its execution, and, in the case of a guardian, may authorize the court to require a less specific statement of the items of the account, and raise a presumption of payment to and for the ward to the amount. Equity will decline to interfere to relieve against a trustee after a long lapse of time and the character of the trust has become obscure, or the acts of the parties or other circumstances raise a presumption against it. So, also, equity will refuse to interfere where there has been a clear breach of trust, and the cestui que trust has for a long time acquiesced in the misconduct of the trustee, with full knowledge of the breach."
SEC. 215. Constructive or Resulting Trusts. — The rule relative to express trusts has no application to that species of trusts which arise from implication or operation of law, and consequently are the ground of an action at law. One who is not actually a trustee, but upon whom that character is forced by a court of equity, only for the purpose
1 Bank of the United States v. Beverley, 1 How. (U. S.) 134; Michaud v. Girod, 4 id. 503.
2 Halsey v. Tate, 52 Penn. St. 311. * See Robertson v. Maclin, 3 Hayw. (Tenn.) 76, where great delay in seeking relief under a trust was held to have great weight against the application.
Gregg v. Gregg, 15 N. H. 190. Lapse of time does not operate as a bar of express trusts, especially where the trustee and those claiming under him have not asserted an adverse claim for more than two years, and the rights of the cestui que trust will not be barred, though he has neglected to claim the benefit of the trust for nearly forty years before. In order that lapse of time shall operate to raise a presumptive bar, the trustee must have so conducted with reference to the estate, as to lead to the conclusion that he claimed and regarded it as his own. If he holds it in recognition of the trust, no length of time will bar the cestui. Pinson v. Ivey, 1 Yerg. (Tenn.) 296.
5 Taylor v. Blair, 14 Mo. 437; Whed bee ♥. Whed bee, 5 Jones (N. C.) Eq. 392.
Broadhurst v. Balgany, 1 Y. & C. 28.
7 Wisner v. Barnet, 4 Wash. (U. S. C. C.) 631; Hayman v. Keally, 3 Cranch (U. S. C. C.), 325; Boone v. Chiles, 10 Pet. (U.S.) 177; Lexington v. Ohio R. R. Co., 7 B. Mon. (Ky.) 556; Walker v. Walker, 16 S. & R. (Penn.) 379; Smith v. Calloway, 7 Blackf. (Ind.) 86; Singleton v. Moore, Rice (S. C.) Eq. 110; Ramsey v. Dens, 2 Desau. (S. C.) 238; Mussey v. Mussey, 2 Hill (S. C.) Ch. 496; Spotswood v. Dandridge, 4 H. & M. (Va.) 139; Stephen v. Yandle, 3 Hayw. (N. C.) 231; Talbot v. Todd, 5 Dana (Ky.), 199; Cooke v. Williams, 2 N. J. Eq. 209; Rush v. Burr, 1 Watts (Penn.), 120; Paige v. Hughes, 2 B. Mon. (Ky.) 138; Kane v. Bloodgood, ante; Sheppards v. Turpin, 3 Gratt. (Va.) 373; Wagstaff v. Smith, 4 Ired. (N. C.) Eq. 1; Green v. Johnson, 3 G. & J. (Ind.) 389; Hawley v. Cramer, 4 Cow. (N. Y.) 717; Wylly v. Collins, 9 Ga. 252; Ball v. Lawson, 4 W. & S. (Penn.) 557; Finney v. Cochran, 1 id. 112; Johnson v. Smith, 27 Mo. 591; Alston v. Alston, 84 Ala. 15;, Buchan v. Jones, 1 Speers (S. C.) Eq. 375.
Thus, where a bill in
of a remedy, may avail himself of the statute. chancery was filed by persons residing in Canada, claiming title to property in Detroit, which had been in the possession of the defendants and those claiming under them since 1793, without, as far as appeared, any right being set up by the complainants, or by those claiming under them, to the title or the possession of the premises, until the filing of the bill, or any claim to the rents or profits, or to an account as tenants in common, or for partition, or to be admitted to the enjoyment of any rights as co-heirs, it was held that the case rested upon the enforcement of an implied trust, and that a court of equity must follow the courts of law in applying the statute of limitations. Within what time a constructive trust will be barred must depend on the circumstances of each case. There are few cases where a constructive trust can be enforced against a person who has held peaceable possession for twenty years, claiming in his own right, but whose acts have made him a trustee by implication. And the same rule prevails where a person is converted into a trustee on the ground of fraud, and the statute begins to run from the discovery of the fraud."
SEC. 216. Mistake of Trustee in Possession. We have already seen that the possession of the trustee is treated as the possession of the cestui que trust, consequently a mistake by a trustee in the possession of land, who treats a wrong person as equitably entitled will not affect the rights of the real claimant ; but when the trust is merely implied, the rule is otherwise. Thus, if a person receives money or goods from a person believing that they belonged to him, when in fact they belonged to a stranger, an implied trust is raised, and the stranger is entitled to sue at once, and he is barred by the statute unless suit is brought in time."
SEC. 217. Funds of Societies vested in Trustees. Where the funds of an association in the nature of a benefit society were vested in trustees, it was held that neither the association nor the trustees were trustees for the purposes of the statute; and a claim to a pension due to the widow of a member of such a society was held barred as to the chief part thereof after the lapse of more than twenty years; in the particular case, the claim being to a sum of money payable de anno in annum, the plaintiff was allowed so much thereof as had become due within six years before filing the bill, with interest from the filing of the bill. Persons, however, appointed trustees of the assets of a certain benefit society, called the Rational Society, which was insolvent,
were considered to be trustees for the creditors within the statute. There is no fiduciary relation between a mutual assurance society or its trustees and a policy-holder or grantee of an annuity.'
SEC. 218. The Liability of Trustee for Breach of Trust creates Trust Debt. The liability of a trustee for a breach of trust creates only a simple debt, except when the trust is created by specialty. But when the trust is created by specialty, it is a trust debt to which neither the trustee nor his executor can plead the statute.2 In several Irish cases it has been held that, while the statute will not run in favor of the trustee in his lifetime, it will run in favor of his executor; but according to the doctrine of the English case cited, the trustee and his executor are put upon the same footing as regards the statute in cases of breach of trust, and this is in accordance with the dicta of several previous cases.5
SEC. 219. Vendor and Vendee of Land. - Upon the execution of a contract to convey, the vendee in equity becomes the owner of the land, subject, however, to have his title defeated if he fails to perform his agreement. But upon full performance by him, equity treats him as absolute owner of an indefeasible estate, and the vendor is a naked trustee, having no estate and charged with the simple duty to convey to the vendee upon demand, and the statute does not begin to run upon his right to a specific performance of the contract by a conveyance of the land by the vendor, until the vendor has given him notice of his intention not to convey, or done some other unequivocal act indicating that he claims and holds the land adversely. Equity regards the vendee as owner upon the principle that it regards that as done which ought to be done, and will compel the conveyance of the legal title to him, because at law his equitable title is not recognized, and so long as the vendee is in possession under his contract, the statute cannot run upon his right to a conveyance."
The trust which arises upon the sale of land, where the purchasemoney has been paid, is a resulting trust. It is excepted out of the statute of frauds, and in cases which admit of doubt, parol evidence is admissible to rebut the presumption that a trust was intended, as in the case where lands are purchased in the name of one, and the purchasemoney paid by another. Although from the circumstances a trust would be implied, it may be shown that it was intended as a loan or an
1 Pare v. Clegg, 29 Beav. 589; Banning Bishop, 1 D. F. & J. 137; Story v. Gape, on Lim. 198. 2 Jur. N. s. 706.
2 Brettlebank v. Goodwin, L. R. 5 Eq.
8 Dunne v. Doran, 13 Ir. Eq. Rep. 545; Adair v. Shaw, 1 Sch. & Lef. 243; Brinton v. Hutchinson, 3 Ir. Ch. Rep. 361.
Brettlebank v. Goodwin, ante.
5 Baker v. Martin, 5 Sim. 380; Obee v.
6 Love v. Watkins, 40 Cal. 547, 6 Am. Rep. 624.
7 TEMPLE, J., in Bodley v. Ferguson, 30 Cal. 511; Morrison v. Wilson, 13 id. 498; Richardson v. Kuhn, 6 Watts (Penn.), 299; Martin v. Willink, 7 S. & R. (Penn.) 297.