Court Opinion

ID: 6696277
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:52:12.323694+00
Date Added: 2024-06-11T16:01:14.481902
License: Public Domain

Clark, C. J.,
dissenting: Probably there is no constructive legislation of recent years that is more important and the maintenance of which in its integrity is more necessary to the landowners of North Carolina, whether buyers or sellers, than the Connor Act of 1885, ch. 147, now Ee-visal, 980. Prior to the passage of that act it was almost impossible for a lawyer to advise an intending purchaser of land, or for him to feel sure that he was not buying a lawsuit. An examination of the records would only show the conveyances that were recorded and at any time a prior unregistered conveyance might turn up and oral evidence might satisfy the jury that the purchaser or some of those under whom he claimed, had taken a conveyance with notice ’of the unregistered title. Besides .the disabilities of those under whom the plaintiff claimed by reason of nonage, or marriage, or otherwise, might accumulate and thus a lapse of 80 years has been known to prevent the protection even of possession under color of title.
Under these circumstances it was absolutely necessary that those buying land, especially those coming from other states, should have the protection of a statute in favor of the purchaser against “actual or constructive notice” of an “unregistered” deed or “contract to convey.”
It has been often held under this statute, “No notice to the purchaser, however full and formal, will supply the place of registration. All secret trusts, latent liens, and hidden incumbrances are and were intended to be cut up by the roots by force of our registration laws,” citing Blevins v. Barker, 75 N. C., 438, under the similar statute in regard to the registration of mortgages, on which basis the registration of deeds and contracts to convey was placed. That case has been cited many times since (see Anno. Ed.) as applicable to all conveyances or “contracts to convey” since the Connor Act. Lynch v. Johnson and cases cited, 171 N C., 615-616.
Under the Connor Act, if A registers first a conveyance from B he takes a complete title to B’s interest, however formal and full a notice he may have of a former unregistered conveyance, or of any “secret trust, latent liens, or hidden encumbrances.” It would be strange indeed if by *328tbe terms of the act the purchaser was protected only from an unregistered deed of which he has notice and which it will be dangerous to forge, but would have no security against proof of some unregistered oral agreement that was unknown to him. The latter is necessarily “unregistered,” which is the evil to be eliminated. It was not exempted from the statute because “unwritten” as well as “unregistered.”
In this case, the plaintiffs, the children of D. T. Pritchard who were nephews and grand nieces of D. L. Pritchard, seek to impress a parol trust upon the land described in the complaint in the hands of the defendant after the lapse of 30 years. On 2 January, 1886, more than 30 years-before 14 October, 1916, the date of the summons in this action, D. L. Pritchard made a fee simple deed for the premises to his son in law J. G-. Hughes, which was witnessed by James A. Spencer, and in March, 1886, D. L. Pritchard died. On 14 March, 1888, after levy of execution and allotment of a homestead in part of said land (one of the commissioners to allot being James A. Spencer, witness to the aforesaid deed), the excess was sold by Wright, the sheriff, and bought by James H. Sawyer. After the death of Sawyer the land owned by him was sold by commissioners in partition 11 September, 1899, and conveyed to L. P. Williams. On 15 January, 1900, Williams conveyed to McCoy; 7 January, 1907, McCoy conveyed to Lynch; 14 March, 1911, Lynch conveyed to the defendant.
On 14 March, 1894, Hughes conveyed the other part of the land covered by the homestead to his'wife, who on 3 May, 1907, conveyed to the defendant and her daughter joined in the conveyance.
Each of the above conveyances purported to convey a fee simple and each of the successive grantees possessed the land, claiming absolute ownership. There is evidence that the defendant, since the date of his deed, has been in possession, cultivating the jjremises, and has enhanced its value by $5,000 in cash spent on buildings and other improvements.
The plaintiffs seek to prove the trust solely by the evidence of D. T. Pritchard, father of the plaintiffs, who alleges that at the time of its creation there was present besides the grantor himself Hughes, the grantee, Mrs. Hughes, and the witness Spencer. No action was brought to set up this trust until more than 30 years after the death of the grantor, 15 years after the death of the grantee, many years after the death of the witness Spencer, and more than two years after the death of Mrs. Hughes. Before the beginning of this action, Sheriff Wright and the grantees Sawyer and McCoy had died, Williams had moved to Virginia, and Lynch, the only grantee in the chain of conveyances living and present, denied any knowledge of the alleged trust and testified on the contrary that before he purchased D. T. Pritchard himself expressly advised him to buy, and D. T. Pritchard did not deny this statement on the stand.
*329Thus tbe plaintiffs, tbe most of them at all times sui juris, neglected to sue until every witness by whom tbe defendant could deny the trust bad died and every successive grantee by whom be could negative notice Rad either died or moved out of tbe State, except Lynch only, and be was present and denied tbe trust on tbe witness stand.
Furthermore, when tbe defendant bought tbe land, D. T. Pritchard, ■the sole witness for tbe plaintiffs, and their father, received a part of tbe purchase price in satisfaction of bis judgment, for when tbe homestead was laid off and tbe excess was sold by "Wright as sheriff and purchased by Sawyer, under whom tbe defendant claims, this was done at tbe instance of D. T. Pritchard, individually and also as executor of D. L. Pritchard as judgment creditors in tbe action against Hughes.
Without now discussing tbe m’any well-grounded exceptions taken on “the trial that tbe statute of limitations is a bar to tbe plaintiffs’ action, Lynch v. Johnson, 171 N. C., 615, and especially that suing in equity they are barred by such laches independent of any statute, it would seem that tbe Connor Act is a full protection against such “secret trust and latent lien.”
It is true that tbe Connor Act does'not apply except in favor of pur-•ebasers for value and creditors, but there is no clear and unambiguous finding in this record that tbe defendant was not a purchaser for value, nor is there such unambiguous finding that be bad notice of said trust, .and no evidence justifying such finding.
Tbe issues submitted are: “Did tbe defendant or any of those under whom be claimed, purchase tbe 160-acre tract of land for value and without notice of said trust?” And there is tbe same issue as to tbe 80-acre tract. To both issues tbe jury answered “No,” which is a finding, •construed in tbe light of tbe evidence, that tbe defendant and some or all of those under whom be claimed, purchased for value but with notice ■of said trust. Tbe two negatives make an affirmative. Tbe form used, “'purchase for value and without notice” of said trust, with tbe negative response, may well mean equally that tbe defendant was a purchaser for value, but with notice, or took tbe property not as a purchaser but without notice.
Tbe person intended to be protected by tbe Connor statute was tbe purchaser or creditor who bad full notice of tbe prior conveyance or trust. These findings do not determine that tbe defendant and all those under whom be claims were or were not purchasers for value, but merely •settles that if such purchasers, they did not take without notice of said trust; whereas if they were purchasers, though with notice of said trust, they were protected from the plaintiffs’ claim by tbe terms of tbe Connor Act.
*330It is true it is claimed by the plaintiffs that tbe instructions were so. complete that, though the jury made this ambiguous response, it is cured by the instructions given. But who knows what passed unseen in the minds of the jury? The construction that the verdict finds that the-defendant is a purchaser for value, but with notice, is in accordance-with the evidence and does not conflict with the charge of the judge.
When a “secret trust” is thus attempted to he set up after the lapse-of thirty years by only one witness, D. T. Pritchard, who is the father of the plaintiffs, and who is shown to have received a profit by the sale of the property as belonging to the grantee’s estate, and who did not deny the statement on oath of a witness who testified that D. T. Pritch-ard had told him that the title was good, and in view of the numerous; exceptions of law and the laches of the plaintiffs, who are'proceeding-in equity, it is 'surely proper to require that the findings upon which a court shall proceed to oust the defendant shall be clear and unambiguous whether he and none of those under whom he claims was a purchaser, and. also a separate and distinct finding whether he and all those under whom he claimed acquired the property with notice of the trust.
The oral agreement attempted to be set up by plaintiffs after the-lapse of more than 30 years was that Hughes agreed orally that “after the death of D. L. Pritchard he would execute a deed in fee simple conveying said land to his wife for life, with the remainder to himself for life if he survived her, then with remainder over in two-thirds of said land to her children and remainder in one-third to the plaintiffs on certain contingencies.” This is a “contract to convey” which comes within the very letter of the Connor Act, Revisal, 980, and is therefore invalid as-against the defendant both because unwritten and because unregistered if it had been written. Lynch v. Johnson, 171, bottom of page 616, discusses and decided this very point. The plaintiffs can be in no better-condition because it was not in writing. If in writing, it would be invalid because not registered. The court should therefore have entered a nonsuit against the plaintiffs. At best, for the plaintiff it is an implied or constructive trust arising by operation of law from the acquisition by the defendant of trust property with notice and without adequate consideration. University v. Bank, 96 N. C., 287; Bispham Eq., secs. 20, 93, 95; 3 Pomeroy Eq., secs. 1048, 1006, and notes; Hill on Trustees, 172; Robinson v. Pierce, 45 L. R. A., 56; Starr v. Starr, 6 Wallace, 419.
The statute of limitations runs whether this trust is express or implied, for the possession of a trustee is presumed to be that of the cestui que trust. Mitchell v. Freeman, 161 N. C., 322. Though ordinarily the statute does not run against an express trust until the demand has-been made, there is an exception when there has been an open disavowal *331of it to the actual or constructive knowledge of the cestui que trust. University v. Bank, 96 N. C., 287; Dunn v. Dunn, 137 N. C., 533. The most open and notorious disavowal is the making and registration of a deed. 28 A. & E., 1134; 19 A. & E., 187; 17 R. C. L., title “Limitations,” par. 162, note 14; Coxe v. Carson, 169 N. C., 132, in which last case Walker, J., carefully discusses the whole matter.
In this case, even if the trust had been express, this action has long since been tolled by reason of the open repudiation by the successive deeds made and registered, beginning with the deed for the excess by Wright, the sheriff, and deed for the homestead to Hughes. Indeed, the alleged trustee died more than fifteen years before this suit was instituted, as in Dunn v. Dunn, 137 N. C., 533, and Baker v. McAden, 118 N. C., 744, which converted it into an implied trust and started the running of the statute. As to an implied trust, “No demand is necessary, but the statute is put in motion as soon as the property is taken into possession.” Robertson v. Dunn, 87 N. C., 195.
It is well settled that the rule that the statute of limitations does not run against the cestui trust applies only to express trusts, and that implied or constructive trusts are barred by the statute of limitations. 25 Cyc., 1155; Falls v. Torrence, 11 N. C., 413; Fdwards v. University, 21 N. C., 325; Wheeler v. Piper, 56 N. C., 250; Faggart v. Bost, 122 N. C., 517; Coxe v. Carson, 169 N. C., 132.
A trust to convey, which is alleged in the complaint, with no other active duties to perform, is deemed an active trust. 3 Pomeroy Eq., sec. 992. The plaintiffs could have called for a conveyance in accordance therewith at any time after the death of D. L. Pritchard, now thirty-two years ago, and the statute began to run from the time the right accrued to call upon the court to declare the holder of the legal title a trustee. Greenleaf v. Land Co., 146 N. C., 508; 39 Cyc., 509.
If this were a passive or naked trust (Wilder v. Ireland, 53 N. C., 85), by virtue of the statute of uses (Revisal, 1584), the plaintiffs could have called for the legal title to be conveyed to them in accordance with the terms of the trust at any time; and if so the cause of action accrued thirty-two years ago.
The plaintiffs, on their contention, were vested remaindermen in one-third and contingent remaindermen in the other two-thirds of this land and had a right of action to have a court declare the trusts to protect their remainder from sale to some purchaser for value without notice, and having failed .for thirty-two years to assert it, they are now barred. Greenleaf v. Land Co., 146 N. C., 508; In re Bateman’s Will, 168 N. C., 234; Cedar Works v. Lumber Co., ib., 394; Lynch v. Johnson, 171 N. C., 615; 39 Cyc., 522, 523, 534.
*332The plaintiffs could certainly have instituted a proceeding to have this trust declared on the death of D. L. Pritchard thirty-two years ago, or upon the deed conveying the property to Hughes’ wife in 1894, or upon the conveyance in fee to the defendant in 1911, and certainly upon the death of the grantee, Hughes, fifteen years ago. Greenleaf v. Land Co., 146 N. C., 508; Jackson v. Farmer, 151 N. C., 279.
If one of the plaintiffs is barred, all are, since the declaration of the trust in one action would inure to the benefit of all, for they are all in the same class. Yarborough v. Moore, 151 N. C., 121; Matthews v. Joyce, 85 N. C., 264.
The evidence is complete and overwhelming and practically uncontra-dicted that the defendant and those under whom he claims were purchasers for value. The finding that the defendant and those under whom he claims were not “purchasers for value and without notice,” taken in connection with all the evidence, means simply that they were “purchasers, but with notice.” The issue, in the best light for the plaintiffs, is insufficient and ambiguous.
The trust attempted to be proven that at the time D. L. Pritchard conveyed the land to Hughes the latter agreed verbally that “after the death of D. L. Pritchard that he would execute a deed in fee simple conveying said land to his wife for life, with the remainder to himself for life if he survived her, then with remainder over on certain contingencies,” is not a trust at all, but a mere “contract to convey” which, not being in writing, is void under the statute of frauds, and is moreover barred by the Connor Act as to the defendant and those under whom he claims under a chain of registered deeds.
The integrity of titles is of the greatest importance to the landowners of the State and to those who wish to buy land, and this defendant should not be dispossessed upon the allegations of this complaint and the proof of a secret and latent lien after the lapse of thirty years and after having placed $5,000 improvements on the property. It is not found that the defendant was not a purchaser for value, and if the finding can be construed that he was a purchaser with notice, still the defendant is protected both by the Connor Act and the statute of frauds: