BURTON, Circuit Judge,
after making the foregoing statement, delivered the opinion of the court.
The theory of the bill is that E. W. Morgan fraudulently possessed himself of the books, letters, and papers of the deceased, Eovett Eames, and thus deprived the administratrix of the means to resist or defend against his claims; and that he obtained possession of these books, letters, and papers as the legal adviser and confidential agent of his sister, who was the representative of the estate; and abused her confidence by procuring in his own favor the allowance of claims for an amount greatly larger than the sums justly due him. The further idea of the draftsman of the bill seems to be that as heirs and creditors they had and have some kind of a lien upon the property of the estate which was acquired by E. W. Morgan in satisfaction of his fraudulent claims,, and have a right to recover said property from said Morgan and those to whom he conveyed it with notice of his fraud, and to hold the estate of said Morgan and his co-conspirators liable for the value of all-moneys and properties which came into the possession of either of them which properly constituted assets of the Eames estate. They specifically seek to have the deed made in 1859 by Eovett Eames and his wife to said Morgan for the machine shop and homestead held to be only a mortgage, and to have a full accounting with said Morgan.
Assuming, as we must, for the purposes of this case, the truth of the averments of the bill, it is very clear that no. case of an express trust such as arises out of contract is charged. However false the claims may have been which were preferred by Morgan against the Eames estate, and however iniquitous his conduct in concealing the letters, papers, and books of the deceased from the administratrix or heirs or creditors of the deceased, it is very clear that in presenting claims' against the estate for himself he was acting adversely to the estate, and in his own interest. It is also evident that in acquiring property of the estate at a sale held to satisfy his claims, whether his claims were secured by mortgages or not, he was acting adversely to the estate, and acquiring whatever he did acquire for himself, and not for the estate. The trust relation, if any, here was or is in respect to the property of' the estate acquired by him under the sales attacked, was one imposed upon his conscience by operation of legal principles, and was not one of that class of trusts called express. Hughes v. Brown, 88 Tenn. 578, 589, 13 S. W. 286, 8 L. R. A. 480. Time, therefore, runs against such a trust, for the open attitude of the persons against whom the trust is implied is adverse to those defrauded. In view of the allegations of the bill that Morgan was the legal and- confidential adviser of his sister as administratrix, and that she throughout submitted her .entire conduct to his advice, and that she had no knowledge- of any 'defense to his claims, and that both she and the complainants believed ihis repeated assurances of the correctness and justice of his claims, it ¡may be conceded that until the discovery of the fraud so practiced by ihim mere lapse qf time would not defeat an application to a court of [391] equity to bring him to an account, and compel a disgorgement of the gains so fraudulently acquired.
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BURTON, Circuit Judge,
after making the foregoing statement, delivered the opinion of the court.
The theory of the bill is that E. W. Morgan fraudulently possessed himself of the books, letters, and papers of the deceased, Eovett Eames, and thus deprived the administratrix of the means to resist or defend against his claims; and that he obtained possession of these books, letters, and papers as the legal adviser and confidential agent of his sister, who was the representative of the estate; and abused her confidence by procuring in his own favor the allowance of claims for an amount greatly larger than the sums justly due him. The further idea of the draftsman of the bill seems to be that as heirs and creditors they had and have some kind of a lien upon the property of the estate which was acquired by E. W. Morgan in satisfaction of his fraudulent claims,, and have a right to recover said property from said Morgan and those to whom he conveyed it with notice of his fraud, and to hold the estate of said Morgan and his co-conspirators liable for the value of all-moneys and properties which came into the possession of either of them which properly constituted assets of the Eames estate. They specifically seek to have the deed made in 1859 by Eovett Eames and his wife to said Morgan for the machine shop and homestead held to be only a mortgage, and to have a full accounting with said Morgan.
Assuming, as we must, for the purposes of this case, the truth of the averments of the bill, it is very clear that no. case of an express trust such as arises out of contract is charged. However false the claims may have been which were preferred by Morgan against the Eames estate, and however iniquitous his conduct in concealing the letters, papers, and books of the deceased from the administratrix or heirs or creditors of the deceased, it is very clear that in presenting claims' against the estate for himself he was acting adversely to the estate, and in his own interest. It is also evident that in acquiring property of the estate at a sale held to satisfy his claims, whether his claims were secured by mortgages or not, he was acting adversely to the estate, and acquiring whatever he did acquire for himself, and not for the estate. The trust relation, if any, here was or is in respect to the property of' the estate acquired by him under the sales attacked, was one imposed upon his conscience by operation of legal principles, and was not one of that class of trusts called express. Hughes v. Brown, 88 Tenn. 578, 589, 13 S. W. 286, 8 L. R. A. 480. Time, therefore, runs against such a trust, for the open attitude of the persons against whom the trust is implied is adverse to those defrauded. In view of the allegations of the bill that Morgan was the legal and- confidential adviser of his sister as administratrix, and that she throughout submitted her .entire conduct to his advice, and that she had no knowledge- of any 'defense to his claims, and that both she and the complainants believed ihis repeated assurances of the correctness and justice of his claims, it ¡may be conceded that until the discovery of the fraud so practiced by ihim mere lapse qf time would not defeat an application to a court of [391] equity to bring him to an account, and compel a disgorgement of the gains so fraudulently acquired.
These claims were allowed by the local tribunal in 1864. This bill was not filed until 36 years had elapsed. In the meantime all of the persons whose conduct is impeached have long since died. Why this delay? The propriety of examining such papers and books in reference to any claims, especially one so large as that presented by E. W. Morgan, could' not but have occurred to the administratrix and. to the complainants as creditors and distributees. When did they learn that E. W. Morgan had possession of these papers? The inference from the rather vague averments of the bill is that this was known from the beginning, and that no one questioned his custody. Certainly there is no averment of a recent discovery that these papers were in his custody, or of any effort to obtain them prior to the insanity of said Morgan in 1885. The bill admits the discovery of the alleged fraudulent character of the claims allowed Morgan in 1889, and that two years before that “they began to suspect the fraud set forth in the bill.” This distinction between the suspicion of the fraud and its actual discovery two years later is important. Twelve years after the discovery that the claims of E. W. Morgan against the estate had been fraudulently inflated from $11,000 to $40,000, the complainants file this bill to bring hirfi to account for the fraud thus perpetrated, and to recover the property of the estate which had been acquired by him in satisfaction of his fraudulent claims. Assuming that a right of action under such circumstances exists in favor of creditors and heirs, and that they may sue without showing the complicity of the personal representative of the estate, or her refusal to bring the suit, how long may such creditors and heirs or distributees wait before instituting a proceeding after discovering the fraud? There is a vague effort to explain the delay in bringing the present suit by indefinite reference to certain former proceedings in various courts between 1890 and the filing of the present suit, having as an object the recovery of the books, letters, and business papers of Eovett Eames from the guardian or administrator of E. W. Morgan. If those books, papers, and letters were essential to a discovery of the truth of the case against E. W. Morgan or his estate, and the evidence afforded by them was competent in a suit between his estate and that of Eovett Eames, or those representing it, nothing was easier than to have obtained their production. In Eames v. Manley, 121 Mich. 308, 80 N. W. 15, which is one of the proceedings referred to by the bill of complainants as instituted against the E. W. Morgan estate prior to the present suit, the suit was by Mrs. Eucy C. Eames, as administratrix of Lovett Eames, to set aside for fraud the sales of the Eovett Eames lands, etc. The bill was demurred to for laches. One of the excuses for the delay was that “she did not have the possession of the books and papers necessary to advise her of the situation.” To this the supreme court of Michigan replied: “The probate court, upon her petition, had abundant authority to require the discovery of any and all books and papers belonging to the estate.” 2 How. Ann. St. § 5876; Perrin v. Calhoun Probate Judge, 49 Mich. 342, 13 N. W. 767; Manly v. Washtenaw Probate Judge, 99 Mich. 441, 58 N. W. 367. Aside from the power of [392] the probate court to compel the production of papers and books belonging to the estate upon proper application, the power of a court of equity to compel the production of such papers in aid of a discovery cannot be questioned. The judicial and semijudicial proceedings referred to do not show any proper diligence in the pursuit of the rights of these complainants,—rights which must have existed just as effectually 12 years ago as upon the day they filed this bill. They have waited until every one of the parties capable of explaining the transaction attacked has died. There is no security that the truth of the matter can now be satisfactorily discovered. On their own showing complainants have made no discovery in relation to the inflated character of the Morgan claims since the suit of 1889, when it was shown by evidence then filed that there had been some stuffing of his claims. The evidence then discovered has all this time been open to them, as well as the undoubted right to compel the production of the books and papers belonging to the estate of Lovett Eames. So far' as the bill seeks to- have the deed of 1859 by Lovett Eames and wife to E. W. Morgan for the machine shop property declared a mortgage, it is defective in many particulars. It does not appear that its true character as a mortgage has ever been disputed. On the contrary, we infer from the rather indefinite averment of the bill that E. W. Morgan enforced it as a mortgage, and that the interest of the estate, subject to his claim as a mortgagee thereunder, was regularly sold by the administratrix under the power granted her by the Kalamazoo probate court. However this may be, the bill shows that the complainants knew of the defeasance when or about the time the property was sold, and acquired by E. W. Morgan, and that they have ever since had a copy of the defeasance in their possession. The demand is a remarkably stale one, and no reasonable excuse is shown for the long delay in bringing this suit. The opinion of this court in Lant v. Manley, 21 C. C. A. 457, 75 Fed. 627, affords no excuse for the delay of this proceeding. Lant was a judgment creditor, and had levied on property of E. W. Morgan during the life of the latter. The bill was to reach property fraudulently conveyed, in aid of his execution. His efforts to discover the fraud were shown to have been constant, and his bill filed so soon as the discovery was made.
Assuming that complainants have been guilty of no fault or negligence' in coming to the knowledge-of the alleged fraud practiced upon the estate of their father, they fail to show any such diligence since their alleged discovery as is due under such circumstances. We say nothing of the failure to make averments in respect to the diligence of the administratrix in coming to a knowledge of the fraud, or of the privity which must exist between her and the complainants. We put our judgment upon the fact that the complainants came to the knowledge of the alleged fraud 12 years before filing this bill, and that during all that time there existed no impediment to the filing of this suit. The suits they instituted or caused to be instituted by the administratrix, if they do not operate as a bar to the present suit, are, as stated in the pleadings, wholly insufficient as an excuse for so great a delay. The circumstances were such as to demand diligence in the assertion of any right which the complainants had to open up these [393] ancient transactions after learning of the fraud. Equity will not aid a slothful suitor to reopen so stale a matter, especially when the opposite parties are dead, and unable to give their explanation of the transaction.
The decree dismissing the bill for laches is affirmed.