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CHAPTER XXI.

PRESUMPTIONS OF FACT CONTINUED.

Of the presumed Dereliction of the Right to have Fraudulent Purchases, Purchases by Trustees, and Purchases of Reversions, set aside in Equity.

It is an established rule in equity, resulting from the relation between trustee and cestui que trust, that no length of possession by the former shall prejudice the right of the latter (a). The case does not come within the scope or analogy of the statute of limitations, as that statute applies only to cases of adverse enjoyment, and the possession of the trustee is not adverse to, but consistent with, the title of the equitable owner. Lord Redesdale has accordingly observed, that if a trustee be in possession, but does not execute the trust, his possession still is that of the cestui que trust, and if non-performance of the trust be the only circumstance in his favour, such possession will operate nothing as a bar, because it is agreeable with the equitable owner's title:-just as in the case of a lessee for a term; whose possession, though he may not pay rent for fifty years, is no bar to an ejectment after the expiration of the term, the previous occupancy being in reality consistent with the right of the party against whom he seeks to set it up (b).

(a) Hamond v. Hicks, 1 Vern. 432; Lord Hollis's case, 2 Ventr. 345. See also 2 P. Wms. 145; 1

Bro. C. C. 554; 17 Ves. 97.

(b) In Hovenden v. Lord Annesley, 2 Scho. and Lef. 633.

It has been attempted, by a forced application of this doctrine, to extend it to all cases where, during the existence of an outstanding legal estate in a trustee, the beneficial enjoyment, for some considerable time, has been had by a stranger. And for that purpose it was argued, that so long as the interest of the trustee is admitted to subsist, there could be no disseisin of the cestui que trust; that the trustee held, and could only hold, for the benefit of the rightful owner; that he could not divest himself of his character of trustee ; and no stranger could discharge or deprive him of it (a). But to this it was replied that, although a disseisin in the absolute sense of the term might not be effected, yet the possession of the stranger amounted virtually to a disseisin, and was no less adverse to the right of the beneficial owner, than if the latter were invested with the legal estate. And it was further urged, that did the rule, which prevents the statute of limitations applying between cestui que trust and trustee, hold between cestui que trust on the one side and strangers on the other, this would almost annihilate the force and utility of the statute, since a very great, perhaps the major part of the landed property in the kingdom was vested in trustees, and if the point were decided in the way contended for, all such property would be excepted from the operation of the act (b). After much contrariety of opinion, it seems however to be now settled, that if an equitable title be not enforced within the same time that would bar a legal title under corresponding circumstances, courts

(a) See Harmood v. Oglander, 6 Ves. 199; 8 Ib. 106; Marquis Cholmondeley v. Lord Clinton, 2

Mer. 357-8-9.

(b) Llevellyn v. Mackworth, Barnardist. Cha. Rep. 445, 449.

of equity, regulating the aid they afford by analogy to the statute, will not relieve (a). On this very principle indeed, in a recent case before the House of Lords, twenty years' exclusive possession of an equity of redemption was considered to operate as a bar to all adverse claimants, and to produce the same effect as disseisin, abatement, or intrusion, with regard to legal interests. This, their Lordships held, was necessary for the general security of equitable titles (b).

But, although in the case of a direct trust, no length of possession by the trustee will defeat the right of the equitable owner, yet trusts, which arise by implication or the construction of equity, are liable to be barred by the laches of the party. Such, among others, are those which exist in cases of purchases where fraud has been practised on the vendor, and of purchases made, under a trust to sell, either by the trustees themselves, or by persons who from connexion with them have acquired a knowledge of the property which they might be induced to exercise to the prejudice of the persons beneficially interested. In reference to these and similar cases, it was said by Sir Wm. Grant, that so far from courts of equity allowing a constructive trust to be made out at any distance of time after the facts and circumstances happened out of which it arises,-after long acquiescence, relief is refused not only where the length of time renders it extremely difficult to ascer

(a) See in Bond v. Hopkins, 1 Scho. and Lef. 429; Medlicott v. O'Donell, 1 Ball. and Beat. 156.

(b) Marquis Cholmondeley v. Lord Clinton, 2 Jac. and Walk. 1, and p. 191. See also Basket v. Pierce, 1 Vern. 226.

tain the true state of the facts, but where the true state of the facts is easily ascertained, and where it is perfectly clear that relief would originally have been given (a).

It is intended in the present chapter to direct the attention of the reader to some particular applications of this doctrine. Two principal divisions of cases, namely, those of fraudulent purchases and those of purchases by persons sustaining a fiduciary character, have been already adverted to. A third division relates to purchases of reversionary interests. Concerning each of these it is proposed to consider, under what circumstances the neglect of the parties prejudiced will conclude their right to have such purchases set aside by a court of equity.

I. As to Fraudulent Purchases.-The ingredients which in this instance constitute fraud, appear to be reducible to the following heads; breach or abuse of confidence previously placed in the purchaser ;-advantage taken of the ignorance, mistake, necessity, or mental imbecility of the vendor ;—and the undue exercise of a subsisting influence over him. On proof of any of these particulars, accompanied by the fact of inadequacy of price, equity will interfere where the transaction is of recent occurrence. Fixing on the purchaser's want of integrity, it will convert him into a trustee for the vendor, and will decree a re-conveyance of the estate, subject to a lien for the sum ac

(a) 17 Ves. 97.

tually paid for the purchase with interest (deducting the intermediate profits), and for money expended in lasting improvements.

But in cases where the alleged fraud appears to have taken place at a remote period, the matter asFrom unreasonable sumes a very different aspect.

delay on the part of the vendor to pursue his claim, a presumption arises either that the fraud charged never existed, or that after it was committed, the party; for valuable consideration, had confirmed the purchase, had released his equity, or had consented to abandon it. And if it can be shown, that the vendor was acquainted with the fact of the imposition, and has been since free from the purchaser's control,-under these circumstances, a lapse of twenty years where the property is land (a), and of six years, as it should seem, where it is personal estate (b), will extinguish his right to equitable relief.

The period from which acquiescence is calculated where the bargain is obtained through undue advantage of the pecuniary difficulties of a vendor aware at the time of the sacrifice of his interests, is the completion of the purchase (c). The subsequent con

(a) Townshend v. Townshend, 1 Bro. C. C. 550; 1 Cox, 28, S. C.; Hovenden v. Lord Annesley, 2 Scho. and Lefr. 607-610, 636; Medlicott v. O'Donnel, 1 Ball. and Beat. 156, 165-6; Whalley v. Whalley, 3 Bli. 1.

(b) Booth v. Earl of Warrington, 4 Bro. P. C., by Toml. 163; South Sea Company v. Wymondsell, 3 P. Wms. 143.

(c) Hovenden v. Lord Annesley; Medlicott v. O'Donnell, supra; Western v. Cartwright, Sel. Cha.

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