James v. James

55 Ala. 525

• Court: Supreme Court of Alabama
• Decided: December 15, 1876
• Status: Published

Opinion

BBICKELL, C. J. —

This case is not of intrinsic difficulty, but its consideration is embarrassed by inappropriate and, in some respects, insufficient pleading, and the introduction of much irrelevant matter, tending to obscure the questions really at issue. A demurrer to the bill was interposed, assigning ten different causes, several of whieh rest upon the hypothesis, that the bill is filed under the statute (Bevised Code, § 2274)'for the correction of errors occurring in the final settlement of an administration made in the court of probate. Yet such is not the purpose of the bill, and it contains no averment as to the existence of such settlement, or of any error therein. In this respect, the demurrer is founded on matter introduced by the answer, and not on matter apparent on the face of the bill. Several of the other grounds are not assigned with the particularity which the statute requires, and, for that reason, cannot be entertained. A plea is interposed, averring that the appellant had made a final settlement of his administration in the court of probate, and that more than two years after such settlement, and after the termination of the disability of infancy, under which the complainants labored at the time of the settlement, had elapsed before the filing of the bill. The plea is founded in a misconception of the purposes of the bill, of the rights which the complainants assert, and of the character of relief to which they may be entitled. It is not sought to correct any error intervening in the settlement of the appellant’s administration, nor to disturb the validity and eonclusiveness of the decree rendered by the court of probate. The whole object of the bill is the assertion and enforcement of a constructive trust upon a purchase of lands made by the appellant while administrator, and which were sold by him, in his representative capacity, under the decree of the court of probate. The trust is exclusively a matter of equitable jurisdiction, of which the court of probate had no cognizance, and which was not involved in, or affected by, the decree rendered by that court on the final settlement of the appellant’s administration. We pass from the further consideration of" the plea and demurrer, to the facts of the case, as shown by the pleadings and proofs.

1. There is no controversy about the general principle the bill is intended to invoke. A purchase by a trustee, at his own sale, at the option of the cestuis que trust, seasonably expressed, is voidable, and will be set aside, though he may have acted with fairness, and made no profit. Or, if, after 'such purchase, he should resell for an increased price, a court of equity permits the cestuis que trust to treat the purchase and sale as having been made for their benefit, and will decree to them whatever of profit he may realize.

2. It is insisted, this case does not fall within the operation of this principle — that the appellant was not a purchaser at his own sale, but a subsequent bona fide purchaser from his vendee. It may be that, after a fair, actual sale to a third party, a trustee may purchase of his vendee, and the purchase will be free from the infirmity of a purchase made at his own sale, and not subject to any trust in favor of the ces-tuis que trust. Strong presumptions of indirection, and effort to evade the general principle, necessarily attach, if the purchase is recent after the sale made by him, and the vendee is his near relation; which must be fully repelled, by clear and convincing evidence of the absence of all concert or collusion, and of the fairness of the original sale, and the adequacy of its consideration. — Obert v. Obert, 2 Stock. Ch. 98; Johnson v. Kay, 8 Humph. 142. The sale made by him must, under all circumstances, have been complete, and no duty resting on him, the faithful performance of which is inconsistent with his interest as a purchaser of the property. The foundation of the principle is the equitable maxim, that by no dealing with the trust estate shall a trustee acquire for himself personal, individual profit — the duty of exercising, for the benefit of the cestuis que trust, all the rights, powers, knowledge, and advantages of every description, which he may derive from his position — the necessity of removing all temptation to employ these for bis own gain; and it must apply so long as tbe relation continues, and the relation of purchaser would be inconsistent with it.

The appellant, having reported to the court of probate that he was the purchaser of the lands, at the sale made by him under the decree of the court, and on the report obtained confirmation of the sale, and procured a conveyance to himself as such purchaser, under the decree of the court, cannot now be permitted to deny the fact, and evade the responsibilities resulting from it. Nor was he, at the time he was substituted as purchaser, capable of making a purchase, which would have been indefeasible against the cestuis que trust, and_ which a court of equity would not regard as clothed with a trust for them. In many respects, his vendee was merely a bidder; the sale was inchoate, and its completion dependent on the confirmation of the court of probate. It was his duty to report the sale for confirmation ; and if the price did not approximate, or was greatly disproportionate to the value of the lands, to resist confirmation, and insist on a re-sale. As a purchaser from the bidder, his interest was confirmation, though the price may have been disproportionate to the value of the lands; and the greater the disproportion, the greater his individual gain. Duty as trustee, and interest as purchaser, were directly in conflict, and the purchase was within the spirit, policy, and reason of the principle, and the mischiefs against which it is directed. It may be the facts will not justify the suggestion of actual or intentional fraud, and that the sale was fair, for a full price, and confirmation would have been the duty of the court of probate. As was said by Peabsos, J., in Brothers v. Brothers, 7 Ired. Eq. 156, the court relieves against such purchases, “ not because there is, but that there may not be fraud.” The principle is not remedial, but preventive of wrong; and no inquiry into the facts of a particular transaction is made. If it falls within a general principle, whether any injury has resulted to those having beneficial interests, is not material. They have a clear legal right to avoid the sale, or to treat it as made for their benefit, and claim whatever of profit may have been derived from it by the trustee.

3. Long acquiescence in the purchase, of which no just and reasonable explanation is offered, disables the cestuis que trust from coming into a court of equity to avoid the sale, or to assert that it was in trust for their benefit. — 1 Lead. Eq. Cases, 236, 258; Campbell v. Walker, 5 Vesey, 678; Hawley v. Cramer, 4 Cowen, 718; Wade v. Pettibone, 11 Ohio, 57; Scott v. Freeland, 7 Smedes & Mar. 409; Ashurst's Appeal, 60 Penn. 54, 315. The condition on which the court becomes active for bis relief is, that be apply within a reasonable time after be has information of the facts on which the right depends. Unexplained acquiescence is a waiver of the right, operating as evidence of the confirmation of the act of the trustee. The authorities have not defined, and it is said, generally, that it is not practicable to define, what delay will be unreasonable, authorizing the presumption of a waiver of the right to impeach the purchase by the trustee, and of confirmation, or an election to consider it valid. Each case is necessarily controlled by its peculiar circumstances. In the present case, the relief sought is not an avoidance of the purchase by the trustee. The assertion is, that, in the contemplation of a court of equity, it was, at the election of the ces-tuis que trust, in trust for their benefit. It was, however, a constructive, not an express trust. It is “superinduced upon the transaction by operation of law, as matter of equity, independent of the particular intention of the parties.” — 2 Story’s Eq. §§ 980, 1176. The recovery sought in this case is pecuniary, not of property, or its possession. The uniform course of decision in this court has been, that such trusts are within the operation of the statute of limitations, and all remedy for their enforcement barred by the limitation which would bar a corresponding legal right and remedy in courts of law. — Maury v. Mason, 8 Port. 20; Tarleton v. Goldthwaite, 23 Ala. 346; Martin v. Br. Bank Decatur, 31 Ala. 111. In the absence of circumstances excusing or explaining the delay, acquiescence by the cestuis que trust, in the purchase and re-sale by a trustee, of the trust property, for his individual benefit, if actual fraud does not taint the transaction, for the period which, under the statutes of limitations, would operate a bar to the assertion of the trust implied by a court of equity in their favor (if the statute was pleaded as a defense), must be deemed unreasonable, disabling them from coming into a court of equity for relief. From the acquiescence, a waiver of the right, and an election to accept the purchase and re-sale as for the individual benefit of the trustee, and not as for their benefit, will be presumed. — Scott v. Freeland, supra; Ashurst’s Appeal, supra; Boone v. Childs, 10 Peters, 223; Keyton v. Keyton, 20 Mo. 530. It is to this class of cases a court of equity applies most rigidly the maxim, that reasonable diligence must concur with conscience and good faith.— Johnson v. Johnson, 5 Ala. 91.

It is no longer a question whether a court of equity obeys the statute of limitations, or adopts it by analogy. The statute expressly declares, that the limitation of suits at law shall apply to suits in chancery. — Revised Code, § 3381. If the right now asserted was legal, and the remedy pursued in a court of law, it would be in form an action for use and occupation, and for money bad and received, barred by the lapse of sis years from tbe time the cause of action accrued. The cause of action accrued in November, 1858, when the sale and conveyance was made to Smith. If the appellant had pleaded the statute, or incorporated it as a defense in the answer, two of the complainants, Melissa E. and John James, would have been barred. More than sis years elapsed after. Melissa E. was freed from the disability of infancy, and more than three years after the majority of John, before the bill was filed. The cause of action having accrued during their infancy, and the period of limitation having run, the statute allows them only three years, after attaining full age, to bri^ig suit. — Bevised Code, § 2910.

4. Acquiescence, unreasonable delay, is not, like the statute of limitations, a special defense, which must be pleaded to be available. It arises on the pleadings and proofs, and the court acts upon it, because the party affected by it does not bring himself within the principles on which the right to relief is founded. — Fisher v. Foody, 1 Curtis, 219; Badger v. Badger, 2 Wall. 87.

5. The general rule in equity is, that all the parties complainant to a suit must be entitled to relief, or the suit will fail. If the statute of limitations operates a bar to one, the others cannot recover. — Hardeman v. Sims, 3 Ala. 747; Wilkins v. Judge, 14 Ala. 135; Vaughn v. Lovejoy, 34 Ala. 437. Under the bill, as now framed, no relief can consequently be obtained by the complainant Mary E., whose infancy protected her from the imputation of laches, and who had not been of full age for three years prior to the filing of the bill. Under our liberal statute, she may, however, amend the bill, so as to adapt it to the state of proof, and the equity of the case. We say nothing of the terms on which such an amendment should be allowed, leaving the chancellor, if application is made for amendment, to prescribe such terms for its allowance as may seem equitable.

6. We have not overlooked the averment of the bill, that the complainants were ignorant of the facts .on which their right to relief is founded, until a few months before filing the bill. If the complainants were ignorant of the facts, and of their rights, acquiescence and unreasonable delay would not be imputable. Knowledge of the facts which entitle to relief, and a want of diligence in acting upon it, must coexist, to authorize the presumption of a waiver of the right.' — 1 Lead. Eq. Cases, 236. But the averment of ignorance is not supported by evidence; and the fact itself is inconsistent with the undisputed evidence found in the record. The publicity of the whole transaction, apparent as the greater part of it was on the records of the court of probate; the registration of the conveyance from the appellant to Smith, reciting its real consideration, for more than fifteen years; the change in the possession of the lands immediately on its execution ; the residence of the complainants, until 1866, near to the lands, and their relationship to the appellant, and to Smith, render the averment of ignorance almost incredible, especially when the complainants offered no evidence in support of it. But, by no mere general averment of ignorance, can a party account for long delay and acquiescence. By distinct averments he must show why he was so long igno-raát, and acquit himself of all knowledge of facts which would put him on inquiry. He must show how and when he first came to a knowledge of the facts, or the court “may justly refuse to consider his case, on his own showing, without inquiring whether there is a demurrer, or formal plea of the statute of limitations, contained in the answer.” — Badger v. Badger, 2 Wall. 87; Fisher v. Boody, 1 Curtis, 206; Carr v. Hilton, Ib. 390; Stearns v. Page, 7 How. 819; Martin v. Br. Bank Decatur, 31 Ala. 111.

Reaching the conclusion that two of the complainants are not entitled to relief, and this excluding relief to the other complainant, under the bill as now framed, it is unnecessary to consider other questions which have been presented. íf they arise in the further prosecution of the suit, it will probably be under different circumstances.

The decree of the chancellor must be reversed, and the cause remanded.