Court Opinion

ID: 5514547
Source: CourtListenerOpinion
Date Created: 2022-01-10 04:28:08.98182+00
Date Added: 2024-06-11T08:34:15.435242
License: Public Domain

*179
By the Court,

Nelson, J.
The first question to be considered is, whether the remedy of the plaintiffs, if there be one, exists at law; and this must depend upon the further question, whether the estate claimed be a legal or an equitable estate. Courts of law regard only the legal rights of the parties, and this rule has been adhered to with commendable strictness. It was conceded upon the argument by the counsel for the plaintiffs, and there can be no doubt of the propriety of the concession, that before the revised statutes, the title set up by their clients was purely equitable, and they would have been obliged to resort to another forum to have enforced it. Since these statutes, it is claimed to be good at law, and of course recoverable in ejectment.
The proposition is not to be controverted, that since, as before those statutes, trusts or equitable titles belong exclusively to the consideration of a court of chancery. The well known and acknowledged boundary between the jurisdiction of the courts, has neither been obliterated or altered in this respect. A large class of trust estates have been converted into legal estates by the operation of the revised statutes, 1 R. S. 727, 731; and for that reason, and that only, are the subject of common law jurisdiction : all other trust estates remain, as before, under the control of the court of equity. The section chiefly instrumental in changing the legal character of these estates is the 47th, page 727. It is as follows: "Every person who, by virtue of any grant, assignment or devise, now is or hereafter shall be entitled to the actual possession of lands and the receipt of the rents and profits thereof, in law or in equity, shall be deemed to have a legal estate therein, of the same quality and duration, and subject to the same conditions as his beneficial interest.” By this section, all formal trusts that have heretofore existed are at once turned into legal estates, and of course subject to the rules of practice applicable thereto ; its operation is confined by the next section to trusts, merely nominal; and the 50th section provides, that it " shall not extend to trusts arising or resulting by implication of law.” The language of the 47th section is broad: “now is or hereafter shall be entitled to the actual possession of lands and *180the receipt of the rents and profits thereof, in law or in equity^ shall be deemed to have the legal estate and it is clear, unless the present case falls within the exception or 50th section, whatever title the plaintiffs possess must be a legal one.
It is not at this day important to go back to the 27 Hen. 8, commonly called the statute of uses, nor to look at the doctrine of uses and trusts, or the supposed failure of the great purpose of that statute, (by the limited construction of the courts of law,) which was to convert nominal uses into legal estates. The first use only was executed; and every other, though merely formal, being rejected at law, was taken, up by the court of equity, and supported and enforced as a trust. It has been well remarked, that trusts since this statute are what uses were before its passage. Now the operation of the 47th section accomplishes all that could have been effected by the most liberal construction claimed for the statute of uses. All formal trusts created, however numerous or extended the series, are as by magic transformed into legal estates. A conveyance to A. in trust for B. in trust for C., at once vests the title in C., and would vest it in the cestui que trust last named, however numerous the trusts created. Whether the legal title "would pass through each cestui que trust, or at once pass from the gran-. tor or devisor to the last, it is not now important to determine. It is a question that may hereafter arise under this section, and call for consideration.
Thus far there can be no doubt as to the operation of these provisions, and the intent of the legislature ; and according to the notes of the revisors, the above result is all that was designed. See Reports of Revisors, ch. 1 ,pt. 2, p. 40, 41. If this section is extended by construction beyond formal express trusts, we do not know where a line is to be drawn between a legal and equitable title. Implied trusts are well known in the law as contra-distinguished from express trusts, and are classed by approved authorities under a distinct head. If any are embraced within the section, which are they ? Resulting trusts are not, because they are expressly excepted ; so all others arising by implication, that is, by construction or operation of law. 50th section. The defendant, if a trustee *181at all, falls under this latter class, and is so considered by all the authorities. 1 Cruise, tit. Trust, ch. 1, § 29, 61, 62.
Mr. Haddock, in his treatise on the principles and practice of the court of chancery, says that trusts “ are either express or implied: under which head of implied trusts, may be included resulting trusts, and all such trusts as are not express. Express trusts are created by deed or by will 5 implied trusts arise in general by construction of law upon the acts or situation of the parties.” 1 Maddock, 446; see also pages 577, 8, and 2 id. 125. In the case of Lloyd v. Spillet, 2 Atk. 150, Lord Hardwicke, after specifying two instances of resulting trusts since the statute of frauds and perjuries, says, “ I do not know in any other instance, besides these two, where this court have declared resulting trusts by operation of law, unless in cases of fraud, and where transactions have been carried on mala fide ” 2 Fonbl. 116, and note. 2 Vernon, 20, n. 2 Madd. 112, and note. Purchasers, for a valuable consideration, with notice of a trust, are deemed guilty of a fraud, and' upon that ground are held to be trustees for the person beneficially interested. 1 Cruise, tit. Trust, ch 1, § 61, 62. 2 Fonbl. 151. Ld. Bacon's Read. 16. 1 Johns. Ch. 575, 301. The class of cases in chancery, where the statute of limitations has been set up by the constructive trustee to bar the claim of the beneficial owner, may be referred to upon this point. No lapse of time bars a direct trust between the trustee and cestui que trust; but where a purchaser takes possession of property in his own right, and is afterwards by matter of evidence or construction turned into a trustee, lapse of time may be pleaded in bar. 3 Johns. Ch. 216. 17 Ves. 87. 2 Sch. & Lef. 633. 1 Madd. 446. Again; the exception contained in the 50th section was obviously taken from the proviso to that section of the statute of frauds that requires all declarations of trusts to be in writing. 29 Car. 2, § 20. 1 R. L. 78, § 12, 13. 2 R. S. 134, § 6, 7. The language of the proviso to 29 Car., after enacting that all declarations and creations of trusts shall be in writing, is, that all conveyances where trusts and confidences shall arise or result by implication of law shall be as if that act had never been made. If is under this *182exception that the somewhat numerous class of implied trusts have been saved from the effect of this statute.
Now if the trust in this case (and one must be raised to be executed under the 47th section, for the deed is not void but only voidable,) does not arise by implication of law, then it cannot be created or exist, without some writing signed by the party or his agent. Nothing of that kind appears. It is true, the trust deed is in part recited, and referred to in the deed to the defendant, and is therefore sufficient notice of the trust, and also perhaps of the want of power (if none exists) to convey an indefeasible title, as it was a fraud in the defendant to buy another person’s estate knowingly; but there is no other trust existing than what arises in ail cases of a purchase of a trust estate, with notice. The defendant has not declared or created a trust, unless the law imposes it upon Mm by matter of evidence and construction. Notice from the deed is no higher or more operative than if proved aliunde.
The transmutation of formal express trusts into legal estates was a very simple operation, because, in equity, the cestui que trust is deemed the legal owner, and exercises substantially-the same dominion over the estate as he now can at law. A trustee in such a case seemed a very useless personage, and in truth was so, except so far as it enabled the cestui que trust, his friend, to cheat his creditors, and to be himself in turn cheated, and to bring the estate within the control of the court of chancery. Trusts, however, that arise from matter of evidence, and by construction are more complicated, are “ creatures of equity,” depending wholly upon the application of equitable principles, and have been wisely left to the superintendance of that jurisdiction. It would be confounding two distinct departments of the law, and turning courts of common law into equitable tribunals, if we were to entertain them. We therefore repudiate all constructive trusts, all that are not expressly declared within the provision of the statute of frauds. 1 R. L. 79, § 12, 13. 2 R. S. 134, § 6, 7.
If the deed to the defendant had been executed since the revised statutes, the question between the parties would have been triable at law. By the 67th section, 1 R. S. 730, " When the trust shall be expressed in the instrument creating the es*183tate, every sale, conveyance or other act of the trustees, In contravention of the trust, shall be absolutely void? This is a new rule, and must be construed to apply prospectively. It will behove purchasers hereafter to examine the deed under which the vendor holds his title.
On the second question, whether the power given to the trustees to sell was properly executed, there can be no doubt the fee existed in Gilbert Van Mater, the survivor, at the time of his conveyance to the defendant, and of course the legal title passed to the defendant. Having purchased with notice, however, in equity he would be deemed to hold subject to the trusts, unless he can protect himself under the power. The execution of the power, therefore, will be the important question in the case ; and that must depend apon the construction of the deed of trust. As we have come to the conclusion on the first point, that the case belongs to the consideration of another forum, it would be indelicate and presumptuous in us to express an opinion upon what is deemed the only serious question involved.
Judgment for defendant.