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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) (1).. 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
(a) Hamond v. Hicks, 1 Vern. 345. See also 2 P. Wms. 145 ; 432; Lord Hollis's case, 2 Ventr. 1 Bro. C. C. 554; 17 Ves. 97.
(1) Harrison v. Harrison, 1 Call. 419. Hunter's exrs. v. Spottswood, 1 Wash. 145. Redwood v. Riddick, 4 Munf. 222. Johnston v. Humphreys, 14 Serg. & Rawle, 394. Prevost v. Gratz, 6 Wheat. 481. Wallace v. Duffield, 2 Serg. & Rawle, 521. Scott v. Galligher, 14 Serg. & Rawle, 333. Thomas v. White, 3 Littell, 384. Hughes v. Wynne, 1 Turn. & Russ, 307. Howard v. Aiken, 3 Mc Cord, 467. Hemenway v. Gates, 5 Pick. 321. Pipher v. Lodge, 4 S. & R. 315. Walker v. Walker, 16 Serg. & Rawle, 379.
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 a 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 upł(a).
[*]lt 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(6). 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
(a) In Hovenden v. Lord An- 6 Ves. 199; 8 ib. 106 ; Marquis nesley, 2 Scho. and Lef. 633. Cholmondeley v. Lord Clinton, 2 () See Harmood v. Oglander, Mer. 357-8-9.
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(a). 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,(1)courts [*]of equity, regulating the aid they afford by analogy to the statute, will not relieve(6). 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(c).
But, although in the case of a direct trust, no length
(a) Llevellyn v. Mackworth, (c) Marquis Cholmondeley v. Barnardist. Cha. Rep. 445, 449. Lord Clinton, 2 Jac. and Walk. 1,
(b) See in Bond v. Hopkins, 1 and p. 191. See also Basket v. Scho. and Lef. 429 ; Medlicott v. Pierce, 1 Vern. 226. O'Donell. I Ball and Beat. 156.
(1) Wallace et al. v. Duffield et al. 2 Serg. & Rawle, 527. Spotswood v. Dandridge, 4 Hen. & Munf. 139.
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(1). 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 ascertain [*]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)(2).
(a) 17 Ves. 97.
(1) Kane v. Bloodgood, 7 Johns. Ch. 90—127. Berrien v. Lenoir, i Car. L. R. 508. Hamilton v. Shepherd, 2 Murphy, 115. Murray v. Coster, 20 Johns. 576. Thomas v. White, 3 Litt. 183. Jones v. Person, 2 Hawkes, 290. Scott v. Gallagher, 14 Serg. &'Rawle, 333. Hawley v. Cramer, 4 Cowen, 717. Thomson v. Blain, 3 Murph. 583. Wisner v. Barnett et al. 4 Wash. 631.
(2) Vide Kane v. Bloodgood, 7 Johns. Ch. 90. 127. Decouche v. Lavatier, 3 Johns. Ch. 190. Goodrich v. Pendleton, 3 Johns. Ch. 384. Coster v. Murray, 5 Johns. 522, 20 Johns. R. 576. Roosevelt v. Mark, 6 Johns. Ch. 266. Fisher's exr's. v. Tucker's repre
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 bim into a trustee for the vendor, and will decree a re-conveyance of the estate, subject to a lien for the sum actually [*]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 as
sentatives, 1 McCord, 169. Van Rhyn v. Vincent's .exr, ib. 314. Wamburzee v. Kennedy, 4 Dessaus, 48.