Case ID: sc-eq_20/html/0103-01.html
Source: Caselaw Access Project
Author: {"author": "Dunkin, Ch.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Martha Williams vs. John H. Hollingsworth.
    
    The husband of a distributee, under a will leaving property in trust for the sole and separate use of testator’s daughters, &c., who, at the sale of the Commissioner, under ah order for distribution, hadbecome the purchaser of a tract of land, against the price of which his wife’s share had been discounted, was held to have been a purchaser subject to the trusts declared in the will; and although the land had been sold in his lifetime, for his debts, on application of the wife, after his death, the Court ordered the possession to be surrendered to her, and the rents and profits which had accrued after the death of the husband, to be accounted for.
    The general principle is, that where land is purchased by one who takes a conveyance in his own name, but the purchase money is paid by another, there is a resulting trust in favor of him who pays the consideration; and such trust may be established by paid, after the death of the nominal purchaser.
    To rebut the plaintiff’s equity, in order to entitle the defendant to the protection of a purchaser for valuable consideration, he must prove the actual payment of the money before notice of the plaintiff’s title.
    A purchaser at Sheriff’s sales, who is also the plaintiff in the execution — to whom the money is payable — and who, therefore, parts with no money, is not entitled to the protection of a hcma fide purchaser for valuable consideration.
    
      Before Dunkin, Oh. at Edgefield, September, 1846.
    The complainant was one of the children of William Jeter, deceased. By the residuary clause of her father’s will it is provided as follows, viz: “ All the rest and residue of my estate, real and personal, 1 desire and direct to be divided into five equal shares or parts, one of which I give and devise to the children of my deceased daughter, Charlotte Phillips, one part 1 give to my son, John S. Jeter, and his heirs forever, as above mentioned, and the three other parts I desire may be held by my executors for the sole and separate use of my three daughters, respectively, so that each may have their shares to their own benefit during their natural life, and at their deaths the proportion of each may he divided among the children individually, to said children and their heirs forever. It is my desire, however, that this will, nor any part thereof, is to he so construed as to deprive my said daughters of any right which might promote their own interest, and the interest of their children, so that the said property, or any part thereof, be not made liable to any debts, covenants, or engagements of any present or future husband.”
    The testator died on the 7th September, 1820. Of his will, his son, John S. Jeter, and his sons-in-law, Edward Martin and William W. Williams, (the deceased husbánd of the complainant,) were appointed executors. J. S. Jeter and Edward Martin alone qualified on the will.
    On the 2d February, 1821, a bill was filed by the executors and all the adult legatees and devisees of the residuary estate of William Jeter, deceased, against the two who were minors, praying that a writ of partition might issue for the division of the residuary estate, consisting of eleven negroes and two tracts of land, described in the pleadings. A writ of partition was issued according to the forms of the Act of 1791, and was executed in strict conformity with the provisions of that Act. On the return of the Commissioners, placing an assessed value per acre on the real estate, and recommending a sale, and also on the special report of Mr. Commissioner Brooks, that a sale would be for the interest of the minors, the Court, at June Term, 1821, made an order “ that the land in the report mentioned (except one half acre immediately surrounding the family burial ground,) be sold by the Commissioner in Equity, on the first Monday in September next, on a credit of two years, and that the negroes be sold by the Commissioner in Equity, at the late residence of Wm. Jeter, deceased, on Thursday, 27th December next, on a credit of twelve months, the fees and costs of suit to be paid in cash.”
    In obedience to this order, the Commissioner, between the 1st September, 1821, and the 8th January, 1822, sold the land and negroes constituting the residuary estate. The tract on Cyper creek was purchased by William W. Williams, for one thousand and five dollars; and he also purchased two negroes for two hundred and fifty dollars. For the purchase money of the land W. W. Williams executed his bond to the Commissioner, and for the value of the negroes, gave him his note, according to the terms of sale. The gross sales of the residuary estate amounted to seven thousand four hundred and forty-three dollars. All the property, with the exception of three negroes, was purchased by parties having an interest under the residuary clause of the will. Among others, Mary P. Jeter, one of the testator’s daughters, purchased to the amount of about fifteen hundred dollars, for which she gave her note. She afterwards married Christopher Mantz, and the executors of Wm. Jeter, deceased, having caused a suit at law to be instituted on the note, Mantz and wife filed a bill in this Court on the 5th of January, 1826, against the executors of William Jeter, deceased, praying an account of their interests under the will, and for an injunction against the proceedings at law. At May Term, 1827, it was ordered, among other things, “that William W. Williams and wife be allowed to become complainants; that the Commissioner do take an account of the assets of the estate, and report the several proportions due the complainants, under the will of William Jeter, deceased.” This order was entered on the 29th May — on the 31st May the decree of Chancellor Thompson was filed, declaring the rights of Mantz and wife under the will of William Jeter, deceased.
    In reference to the residuary clause, the Chancellor remarks, “ This clause, taken in connexion with the foregoing, clearly shows that the only object of restriction was to prevent the husbands of the daughters from, in any manner, disposing of the same; but that it was the intention of the testator that the sole and separate enjoyment thereof should be and remain in the said daughters during the term of their natural life.”.
    An injunction was ordered, and also a reference.
    On the same day the report of the Commissioner was filed ; among other things, the account sets forth the shares of the several parties in the sales of the residuary estate.
    The amount of principal and interest then due on the specialties in his hands, taken at the sales, is also set forth. It has already been remarked that the sales amounted to $7443. According to the report of the 31st May, 1827, this was chargeable with expenses amounting to $150, leaving the share of each $1458 60, at the time of the sale. It is not intended here to present any statement of the account, which will, necessarily, constitute a part of the evidence in the case.
    The leading purpose of the proceedings was to settle the difficulty between Mantz and wife and the executors, and, in accomplishing this, to arrange the accounts as between the other parties, and to relieve the executors from further responsibility as such. On the day of making the report, it was confirmed by the Chancellor; and, among other things, it was directed, that “ the Commissioner do credit the bonds and notes of E. Martin, W. W. Williams, J. S. Jeter, and Mary P. Mantz, with their proportions of the sales in his hands, and pay over, or receive, the balance, as the same has been ascertained in the report.”
    At June Term, 1828, the Commissioner reported, in his annual account of estates, that, in Williams and Wife et al. vs. Phillips et al. he had disposed of the funds according to the decretal order in Mantz and Wife vs. Executors of William Jeter, deceased, made at the preceding term.
    It is proposed, first, to consider the case as if W. W. Williams, alone, or the executors of W. W. Williams, were the parties defendant. The particular equities of the purchaser at sheriff’s sale will be subsequently noticed.
    The sale of the plantation, or Cyper tract, in January, 1822, was avowedly for the purpose of partition among those interested under the residuary clause of William Jeter’s will.
    All the proceedings were conducted in strict conformity to the Act of 1791, authorizing a sale for the purpose of partition. In making the order for sale, the Court required neither personal security nor a mortgage of the premises.
    In Pell vs. Ball, Spear’s Eq. 387, the power of this Court to order a sale of real estate, for the purpose of partition, in other cases than that of intestacy, was discussed and affirmed.
    Referring to, the previous practice, as sanctioning the exercise of this authority, the Chancellor says, “The Court may have extended the equity of the Statute of 1791, in relation to intestates’ estates, to all other cases of joint tenancy and tenancy in common, according to a well known practice of the English courts, as being within the mischief or cause of making the Act. Co. Lit.-246.”
    An examination of the proceedings in Williams vs. Phillips will show, very clearly, that the Court referred its authority to the Act of 1791, and the omission to require the purchaser to execute a mortgage of the premises, arose from the conviction that, according to the provisions of that Act, the property sold would stand pledged for the payment of the purchase money. The decision in Pell vs. Ball is conclusive, as to the authority of the Court, and, in thaf view, I cannot doubt that all the provisions of the Act of 1791 should attach to such sales, when made by the' order of this Court. The Cyper creek tract stood pledged, then, in possession of William W. Williams, for the price bid for it. It remains to inquire whether the debt has been paid, or the lien discharged.
    In May, 1827, the Commissioner reported that the bond was in his hands, unpaid. According to the construction given by the Court, at that time, to the will of William Jeter, the extent of the legatees’ rights was to the use of the property, during life. The language of the will left no doubt, and it was so declared by the Court, that this right of the wife was exclusive of the “ debts, covenants, or engagements” of the husband. It would be a manifest and palpable violation, both of the will and the decree, to appropriate the share of the complainant to the payment of her husband’s debts. No such construction would be given to any order of this Court, but from necessity. If the interpretation be irresistible, the Court would regard the order of the 31st May, 1827, as ministerial, and, supposing the husband or his representatives to be now the party defendant, would have it corrected.
    In 'Trescott vs. Trescott, 1 McC. C. It. 428, a receipt was ordered to be expunged, and a cancelled bond set up. But, as has been before suggested, the object of the proceedings of 1827, was to settle the accounts between the several parties.
    In concluding his statement of the accounts, and of the sums severally due, the Commissioner says “which sums are to be paid out of the specialties in my hands, or which I am ready to assign, as may suit the convenience of the parties.” Then follows the order confirming the report, to which reference has been made.
    According to the view which seems to have been taken by the Court, the husband and wife were entitled to the use of the property, and consequently to the interest of the money. It having been ascertained by the Commissioner’s report, that the share of the wife exceeded the amount due on the husband’s bond, and they being entitled absolutely to the interest, it may have been deemed unnecessary that the Commissioner should retain the bond. But if the husband had actually received the money, he held it, knowing the trust, and was chargeable as trustee, and those entitled to it were also entitled to the security of the land, which the law gave, for the debt. No irregular order of this character, obtained for the convenience either of the husband or of the other parties, should be construed to defeat the rights of the wife, and destroy the protection which the will of the testator was intended to secure. If the husband were now alive, and insisting on the effect of the decretal order, as a payment of his bond, to the Commissioner, the Court would give no countenance to a pretension founded on a gross breach of trust, which he, an executor named in the will, could not fail to have known. See Parker vs. Brooke, 9 Yes. 583; Rich vs. Cockell, Id. 369.
    It was faintly insisted that the defendant occupied a position more favorable than the husband himself. It is quite manifest, from the testimony, that he has not even the equity of a creditor of the husband. He was present at the sheriff’s sale, and was informed by Charles J. Glover, of the complainant’s claim. The evidence of this witness is very full on the subject of notice. The land was purchased by Dr. Mendenhall, for seventeen hundred dollars, and was immediately afterwards sold to the defendant, for twenty-five hundred dollars, who required and received from Dr. Mendenhall, a bond with ample security, to indemnify him “against any and all claims, rights or interest of Mrs. Williams, wife of William W. Williams, except as to the dower of the said Mrs. Williams,” against which there was no indemnity or protection.
    The complainant is entitled to have the capital of her legacy secured, and also to have the interest of the same, since the death of her husband. She has a lien on the Cyper creek tract of land, which was sold for partition among the residuary devisees of William Jeter, deceased, to the extent of one thousand and five dollars, with interest from the death of W. W. Williams, in 1845.
    The complainant is also entitled to dower in the surplus, if any, between the value of the said tract, and the amount due on the mortgage, upon the principle indicated in Keith vs. Trapier, Bail. Eq. 63.
    The right of the complainant to dower in the residue of the land purchased by the defendant, was not contested.
    It is ordered and decreed, that unless the defendant pay to the complainant, Martha Williams, the interest on the sum of one thousand and five dollars, from the death of William W. Williams, and also pay to the complainant, John S. Jeter, as trustee for the said Martha Williams and her children, the principal sum of one thousand and five dollars, on or before the first day of January next, the Cyper creek tract aforesaid be sold by the Commissioner, on the last mentioned day, on a credit of twelve months, secured by bond, bearing interest, and good personal security, with mortgage of the premises ; that from the proceeds, the principal sum and interest aforesaid be paid, and the balance be held subject to the future order of the Court.
    It is further ordered and decreed, that a writ issue for the admeasurement of the complainant’s dower in the residue of the lands of W. W. Williams, deceased, purchased by the defendant, and that the Commissioners make their return, according to law. Parties to pay their own costs.
    The defendant appealed, and moved the Court of Appeals to reverse the decree in this case, on the following grounds, viz:
    1. Because the possession by W. W. Williams of the Cyper creek tract of land from January, 1822, to November, 1842, under a conveyance in fee from the Commissioner, vested in him a good title to the land.
    2. Because the order of the Court of Equity, at May Term, 1827, directing the Commissioner to credit the bond of W. W. Williams with the share of himself and wife in the sales of the residuary estate of Wm. Jeter, and this having been done, and reported to the Court by the Commissioner, was a discharge of the bond, and the land from the lien which it is alleged attached upon it.
    3. Because the Act of 1791 does not relate to the case of partition like the one in which this land was sold, but is confined to the partition of the estates of persons dying intestate, and the order of the Court not requiring a mortgage of the land to secure the purchase money, the land did not stand pledged for the same.
    4. Because the remedy of the complainant, Martha Williams, if enforced against any one, should be enforced against her brother, the other complainant, who was a qualified executor of her father’s will, and charged with the protection of her interest; and because her rights, if violated at all, were sacrificed by his general neglect of duty, as her trustee, and particularly in permitting and procuring the bond of her husband to be satisfied and discharged by the order of the Court, aforesaid, at May Term, 1827, and by his neglect to give public notice of her claims, when the land was sold by the sheriff, in November, 1842.
    5. Because Dr. M. T. Mendenhall was a purchaser for valuable consideration, without notice of the claims of Mrs. Williams, and acquired a good and unimpeachable title to the land, which passed to the defendant, under the deed of said Mendenhall.
    6. Because the defendant was himself a purchaser for valuablefconsideration, without notice.
    
      
      7. Because the claims of the complainant were barred by the proceedings in Equity, in the cases of Williams and Wife et al. vs. Phillips et al. and Mantz and Wife vs. The Executors of Jeter, and the lapse of time and the Statute of Limitations.
    8. Because, in any view, the complainant was only entitled to one-fifth of the purchase money of the Cyper creek tract-of land, and that for life, and because she is not entitled to dower in the surplus, if any, of the purchase money that may arise from the sale of that land.
    9. Because W. W. Williams, being in possession of the Cyper creek tract of land for many years, as his estate, obtained credit upon the faith of that land, and the debts to satisfy which the said land was sold by the sheriff, in 1842, having been made in that way with persons having no kind of notice or intimation of the claims set up in the bill, it would be a fraud on such creditors, under the circumstances, to sustain those claims.
    Griffin, and Bonham, for the motion.
    The plaintiff moved the Court of Equity appeals to modify the Circuit decree in this cause, upon the grounds,
    That the tract of land on Cyper creek should have been charged with the aggregate amount of principal and interest due upon the bond of William W. Williams; or, at all events, with the principal sum secured by the said bond, and interest thereon from the 7th November, 1842, the day on which the said tract of land was sold by the sheriff, under judgments recovered against the said Williams.
    Carroll, plaintiff’s solicitor.
   Dunkin, Ch.

delivered the opinion of the Court.

In some respects this Court has taken a different view of this transaction, from that presented in the decree of the Circuit Court, and has arrived at a different conclusion.

It is stated in the decree, that at the sales of the Commissioner, in January, 1822, nearly the whole of the residuary estate was bid off by those interested under the residuary clause of - the testator’s will, and the avowed purpose of the amended proceedings, in 1827, purporting to make Williams and wife et al. parties, was to make a final settlement. The decree of Chancellor Thompson, reciting rather than construing the will of the testator, declared that the property bequeathed to the daughters, under the residuary clause, was not to be subject to the debts or contracts of their husbands, but was to be held to their sole and separate use. On the day of pronouncing the decree, the report made under it ,-was

heard and confirmed, and the decretal order was made, by which the bonds of the purchasers, Martin, Williams, Jeter, and Mantz, were directed to be “credited with their proportions of the sales in the hands of the Commissioner.” Neither Martin, nor Williams, nor Mantz were entitled to any proportion, or share, of the sales in the hands of the Commissioner. But the meaning of the order was not to be misunderstood. They, that is, Martin and Williams, had purchased, as persons entitled to shares, because their wives were interested in the property, and consequently would be interested in the fund. In making up his account, which had been confirmed by the Court, the Commissioner had charged the shares to which Mrs. Williams was entitled, with the purchases which had been thus made, and the interest thereon. Williams certainly was a party to these proceedings. The Court, in the same decree, had declared that the share of Mrs. Williams could not be subjected to the payment of her husband’s debts ; and the only rational construction of the decree and decretal order is, that the purchases were made for Mrs. Williams, or by Williams, as representing the interests of his wife and children, and therefore their shares of the sales were properly ordered to be discounted against the amount due on the purchases. Any other construction renders the order as palpable a violation of the will of the testator, as it is inconsistent with the decree itself. It cannot be doubted, that the land was paid for with the funds of the complainant, and the testimony is abundant to warrant the conclusion that it was so intended to be paid for, at the time of the purchase. No mortgage was required; no security was given; no payments made. It is true that a conveyance was executed to Williams, but it was never put on record, and was found by the complainant among his papers, after his death. The conduct and declarations of Williams confirm the conclusion. Under her father’s will, Mrs. Williams was entitled to a specific legacy of certain negroes, for life, to her sole and separate use, with a limitation to her children. When the Cyper creek tract of land was under advertisement by the sheriff, as the property of Williams, in 1842, he, (Williams,) had a conversation on the subject with the witness, Glover, in which Williams said to him, “ that his wife’s money had paid for this land, and, if she was entitled to the rest of the entailed property, she ought to be entitled to this.” The general' principle is admitted, that where land is purchased by A, who takes a conveyance in his own name, but the purchase money is paid by B, there is a resulting trust in favor of him who pays the consideration. It was formerly doubted whether such trust could be established by parol, after the death of the nominal purchaser; but such doubts have been removed by more recent decisions. Lench vs. Lench, 10 Ves. 511, was a case of that character. Sir William Grant says, “All must depend upon the proof of the fact;” and “ it is now settled, that a claim of this sort may be supported by parol evidence.” He did not think the evidence sufficient, in Lench vs. Lench, and dismissed the bill. But in that case he cites, from the Register’s book, the case of Wilson vs. Foreman, very imperfectly reported 2 Dick. 593. Money was settled for the purpose of being laid out in land. The husband obtained possession of the money, under a power of attorney from the trustee. Soon afterwards he purchased an estate in Kent, and took a conveyance to a trustee. He also purchased an estate in Yorkshire, and took that conveyance to himself and his heirs. The claim of the wife was upon that estate in Yorkshire. Lord Thurlow directed a reference, to inquire whether the estate was purchased with part of the trust money, with an intention to settle the same pursuant to the marriage articles. Upon the evidence, the Master so reported, and the Lord Chancellor directed new trustees to be appointed, and Falling Foss, (the Yorkshire estate,) to be conveyed to such new trustees, upon the trusts in the settlement. In the case under consideration, the Court is satisfied, from the evidence, that the purchase was made and paid for with the trust funds, and that it was the intention of the party that the estate should be held subject to the trusts declared in the will.

It is urged, however, that Williams was in possession of the land for many years, and that the trust ought not to be enforced after so great a lapse of time. As between Williams and his wife it is difficult to perceive in what manner his possession, or the lapse of time, could impair her rights. If the husband were now alive, and the only defendant, the Court would refer his possession to his fiduciary character, and that the enjoyment by the wife was such as was contemplated by the will.

But on the 7th November, 1842, the premises were sold by the Sheriff, under an execution against Williams, and, with other property, were purchased by Dr. Mendenhall, who, .on the following day, conveyed to the defendant, Hollingsworth, and at the same time gave him a bond with security to indemnify him against any claim of the complainant in the premises, except her claim of dower. Williams died in 1845, and this bill was preferred on the 17th April, 1846. For the reasons stated in the decree of the Circuit Court, it is quite clear that Hollingsworth is not entitled to the protection of a purchaser without notice. But it has been insisted in this Court that, as it appears from the recital in the bill that the defendant purchased from Dr. Mendenhall, it ought to have been proved that Dr. Mendenhall had notice. It may be proper to remark that this defence is not taken by the answer, and the facts in that respect were not particularly developed. But there is no difficulty on this point. Mr. Sugden considers the rule as perfectly well settted, that in order to rebut the plaintiff’s equity, in order to entitle the defendant, to the protection of a purchaser for valuable consideration, he must prove the actual payment of the money before notice of the plaintiff’s title. On the part of the defendant himself, this defence is entirely unsupported. — on the contrary, is fully disproved by the evidence. But a purchaser with notice of an equitable claim, may protect himself if he has bought from a bona fide purchaser without notice, although this circumstance may influence the Court with respect to costs. His answer does not, however, assume the ground that his vendor occupied that position, and therefore the complainant may very well have deemed it unnecessary to establish notice to Dr. Mendenhall. But there was no proof whatever that Dr. Mendenhall had paid any part of the purchase money. On the contrary it is alleged here that he was the plaintiff in the execution under which the land was sold, and that he bought to save his debt. But it has been repeatedly held that a purchaser at Sheriff’s sales, who is also the plaintiff in the execution to whom the money is payable, and who, therefore, parts with no money, is not entitled to the protection of a bona fide purchaser for valuable consideration. See Kirby vs. Dillard, Spears Eq. 20; Shultz vs. Carter, Id. 542.

It is ordered and decreed, that possession of the Cyper creek tract of land be surrendered to the complainant, and that the defendant account for the rents and profits of the same since the death of W. W. Williams, in 1845. In other respects the decree of the Circuit Court is affirmed.

Harper, Ch. concurred.