Court Opinion

ID: 7290685
Source: CourtListenerOpinion
Date Created: 2022-07-25 20:33:26.948471+00
Date Added: 2024-06-11T16:19:19.507151
License: Public Domain

The Chancellor.
It is settled by the adjudications of this court that a lapse of twenty years after a mortgage has become due, within which there has not been either payment or demand of the principal or interest, or part thereof, or entry by the mortgagee into possession of the mortgaged premises, will raise a presumption that the mortgage has been satisfied, though in fact it be not paid. Wanmaker v. Van Buskirk, Sax. 685; Evans v. Huffman, 1 Halst. Ch. 354; Barned v. Barned, 6 C. E. Gr. 245; Murphy v. Coates, 6 Stew. Eq. 424. And this presumption may be taken advantage of by demurrer to a bill which alleges the facts raising it, without averring circumstances which will rebut it. Olden v. Hubbard, 7 Stew. Eq. 85. The formal averment in a foreclosure bill, that the principal and interest of the mortgage are now due and owing, manifestly a mere conclusion argumentatively insisted upon, is not admitted by demurrer. Olden v. Hubbard, supra; Redmond v. Dickerson, 1 Stock. 507, 516.
The allegations of the bill considered show that no payment of either principal or interest of the mortgage in question has been made since the year 1872, that is, for a period of twenty-two years prior to the filing of the bill, during which time the mortgagor, his assigns and devisees have been in possession of all parts of the mortgaged premises, and it fails to show that within that time any demand has been made for the payment of principal or interest, or any part thereof. From these facts the presumption invoked clearly arises, and the principal question of the case becomes, whether other circumstances averred are sufficient to rebut the presumption.
It appeal’s that in 1852 the mortgagor became one of the executors of the will of th°e mortgagee, which will devised and bequeathed all the testator’s estate to his widow during her life or widowhood with this addendum, “ but not to commit waste,” and at her death to his children, of whom the mortgagor was *21one. As executor of that will it became the mortgagor’s duty, together with his mother, to collect the assets of the estate, pay the testator’s debts, account for the executorship in a year and transfer the residue of the estate to the life tenant, who thereafter would become accountable for it to those who were to take it in remainder. The estate was not given to the executors in trust for the widow for life and then to distribute it to those taking in remainder, but was given directly to the life tenant, and hence the trust confided to the mortgagor through the executorship, so far at least as the mortgage in question is concerned, would, in regular course, terminate with the accounting, which became due in the year 1853, and his transfer of it at that time to the life tenant. It appears that there never was, in fact, an accounting, and because of this circumstance, coupled with the official action of the executor in 1887, when he satisfied the mortgage of record, it is claimed that the trust of the executor-ship, an express trust, continued until the mortgagor died, in 1891, and, this being so, that lapse of time will not avail to defeat the relief sought by the complainant, or, in other words, that the presumption already referred to is rebutted.
It is the rule that lapse of time will not be allowed to defeat an express trust cognizable in equity alone, which continues to be acknowledged and acted upon by the parties. Kane v. Bloodgood, 7 Johns. Ch. 111; Conover’s Executor v. Conover, Saxt. 403 ; Wanmaker v. Van Buskirk, supra; Allen v. Woolley, 1 Gr. Ch. 209; Stark v. Hunton, 2 Gr. Ch. 311; Dean v. Dean, 1 Stock. 425 ; McClane’s Administrator v. Shepherd’s Executor, 6 C. E. Gr. 76; Marsh’s Executor v. Oliver’s Executors, 1 McCart. 259; Lindsley v. Dodd, 30 Atl. Rep. 896.
The reason is, that the possession of the trustee, while the relation of trustee and cestui que trust is admitted to exist, is deemed to be possession for the cestui que trust and coincident with the title of the cestui que trust. But when the trustee denies the right of the cestui que trust and his possession of the property becomes adverse, lapse of time from that period may constitute a bar in equity. Kane v. Bloodgood, supra; Dean v. Dean, supra; Young v. Young, 18 Stew. Eq. 40; Starkey v. Fox, 7 *22Dick. Ch. Rep. 758; S. C. affirmed on appeal, 8 Dick. Ch. Rep. 239.
And even if the proof be satisfactory that possession and the relationship of trustee and cestui que trust was at one time coincident, there may be certain conditions which will prevent the application of the rule that time does not run against an express trust, for when the relationship is no longer admitted to exist or gross laches in enforcing a known right, or long acquiescence in the alleged breach of trust, is shown, and lapse of time has obscured the nature and character of the trust, or the acts of the parties or other circumstances give rise to presumption unfavorable to its continuance, a court of equity, even in a case of express trust, will refuse relief upon the ground of lapse of time and its inability to do certain and complete justice. Starkey v. Fox, supra. Vice-Chancellor Green, who wrote the opinion in the case just cited, which opinion was adopted by the court of errors and appeals, said: “This doctrine is not an exception to the rule, but proceeds on an inference from facts other than, but in connection with, the lapse of time; that the trust has been executed and in some way extinguished, as is said by the master of the rolls in Pickering v. Stamford, 2 Ves. Jr. 583: ‘ Every presumption that can fairly be made shall be made against a stale demand. It may arise from the acts of the parties, or the very forbearance to make the demand affords a presumption either that the claimant is conscious it was satisfied or intended to relinquish it.’ ” In Starkey v. Fox, an administrator who had prosecuted a suit for the foreclosure of a mortgage belonging to his intestate to sale, bought the mortgaged premises at the foreclosure sale in his own name as administrator, and subsequently, in the year 1841, accounted for it as an asset remaining in his name undisposed of, in trust for the intestate’s estate. It was made to appear that, a year or two later, through proceedings in ejectment, he secured possession of the mortgaged premises, and that, later, he exercised acts of ownership over that property, building thereon and clearing, tilling and improving the soil, paying all taxes and taking all income, without accounting, and that thus he lived in the enjoyment of the prop*23erty until the year 1891, when he died. After his death persons entitled to shares of the intestate’s estate filed a bill to enforce the trust in the property, and it was held, among other things, that a presumption had arisen that the trust was extinguished, which presumption had not been rebutted.
In the case in hand the executors could have been compelled to account in the year 1853, and thus the estate which was to go to the life tenant could have been ascertained, and security for its safe preservation, upon proof that it was in danger in the hands of the life tenant, if need be, might have been exacted, but those who were to take in remainder, who then, for aught that appears to the contrary, arid from thence to the present time, save in the case of Henry Stimis himself, were living and sui juris, remained inactive. After twenty years the life tenant died, and then those in remainder became entitled to possession, and yet thereafter for nineteen years, until Henry Stimis died, they stood by, witnessing the possession of the mortgaged lands by him and his grantees, and acquiescing all that time in his failure to pay them interest upon the mortgage. For three years after his death the same conditions continued, and then the present action, was begun. Thus, for upwards of forty years, the remaindermen were silent when they might have spoken, and for more than twenty years they acquiesced in the attitude of the mortgagor so far adverse to his holding the mortgage in trust as withholding interest and failure to acknowledge the mortgage as a valid obligation establishes. Besides, during such acquiescent inaction and laches, the lapse of time carried with it lives of both life tenant and mortgagor, who could have spoken as witnesses, and we know not what other evidences. Did the defendant’s claim of rebuttal rest alone upon the mortgagor’s failure to account as executor, I think I would feel constrained, notwithstanding the importance of his due discharge from his trust (Bank v. Heiron, 5 Ex. Div. 319), to decide that the presumption of the satisfaction of the mortgage has been rebutted. Phillippi v. Phillippe, 115 U. S. 151. But not only did the mortgagor fail to terminate his trusteeship of the mortgage by accounting as executor, but, on the contrary, he affirmed the continuance thereof in the year *241887, seven years before the filing of the bill, when, by deliberate writing executed in virtue of a still existing executorship and continued dominion over the mortgage in that fiduciary character, he declared it to be satisfied and paid. This declaration does not say when the payment was in fact made, but,, standing alone, it will not be assumed to speak of a condition prior to its date. The instrument appears to me to amount to an acknowledgment of the existence of the mortgage and continuance of the executorship in control of that instrument to the date of the satisfaction in 1887. The satisfaction is consistent with the executor’s failure to account and, by that means, to throw off his fiduciary character and place himself in the position of a stranger to the beneficiaries, and, considered in connection with that fact and the near family relationship between the executor and the beneficiaries, I deem it sufficient, at least while it remains unexplained, to rebut the presumption invoked by the demurrants.
There is absence of laches with reference to the attack upon the satisfaction, if for no other reason, because it does not appear that the existence of that instrument was known to the cestuis que trustent. Lindsley v. Dodd, supra.
I will overrule the demurrer", with costs.