Court Opinion

ID: 6696751
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:53:56.863963+00
Date Added: 2024-06-11T13:31:24.517266
License: Public Domain

Walkee, J.,
after stating tbe case, delivered tbe following opinion for tbe Court: Tbe judgment of tbe court as rendered by Judge B. E. Long is so clear, comprehensive, and conclusive, both as to tbe facts and tbe law applicable thereto, that it is hardly necessary to do much more than state it and adopt it as tbe opinion of this Court. .
It may be well to refer as briefly as we can to that phase of resulting trusts to which tbe one under consideration belongs. Perry, in bis excellent treatise on tbe Doctrine of Trusts (edition of 1899), p. 212, and secs. 159-160, says, at least substantially: If a trust for a specific purpose fails by tbe failure of tbe purpose, tbe property reverts to tbe donor or bis heirs. If tbe gift is made upon a trust, and tbe trust is insufficiently or ineffectually declared, as, if it is too indefinite, vague, and uncertain to be carried into effect, it will result to tbe settler, bis heirs, or representatives. 'Whether a trust is insufficiently declared or not depends of course upon tbe particular construction to be given to each individual deed or will; and so, whether a trust is too vague to be executed or not, depends upon tbe interpretation given to each instrument. If tbe declaration of trust is too imperfect to establish that purpose, and yet plainly shows that tbe intention was that tbe donee should not take beneficially, and that tbe sole purpose of tbe gift or grant was to carry out tbe purpose of tbe trust, which fails, tbe donee will take in trust for tbe donor or bis heirs; but if it appear from tbe whole instrument that some beneficial interest was intended for tbe donee, or that be was intended to take beneficially in case tbe particular purpose fails, no trust will result, but be will take tbe estate discharged of all burdens. Where a gift is made upon trusts that are void, in whole or in part, for illegality, or that fail by lapse or otherwise, during tbe life of tbe donor, a trust will result to tbe donor, bis heirs, or legal representatives, if tbe property is not otherwise disposed of4 Thus, where tbe gift or trust is void by statute, as a disposition in favor of persons or objects prohibited from taking, or given at a time and in a manner forbidden, as in violation of tbe statutes of mortmain, or similar statutes, or where tbe gift contravenes some policy of tbe law, as tending to a perpetuity, or where it fails by tbe death of tbe beneficial donee or cestui que trust, a trust, to tbe extent of tbe estate given, will result to tbe donor, or bis heirs, or legal representatives, if it is not otherwise disposed of Bond v. Moore, 90 N. C., 239; Ackroyd v. Simpson, 1 Bro. Ch., 503; Cox v. Parker, 22 Beavan, 188; Harker v. Reilly, 4 Delw. Ch., 72.
*414We deem this elucidation of tbe question perfectly adequate and inclusive to illustrate this doctrine relating to voluntary conveyances, or wills, when the trust is not declared, but arises by operation of law, or where it is expressly, or by clear and manifest implication, declared, and in the latter the declared purpose of the trust fails or becomes impossible of execution or performance, and no beneficial interest is intended for the donee in trust. Sometimes the circumstances of a transaction are such that the person who takes the legal estate in property cannot also enjoy the beneficial interest, without necessarily violating some established principle of equity; the court will immediately raise a constructive trust, and fasten it upon the conscience of the legal owner, so as to convert him into a trustee for the parties, who in equity are entitled to the beneficial enjoyment. These constructive trusts may be separately considered under two distinct classes of cases: one where the acquisition of the legal estate is tainted with fraud either actual or equitable. And the other, where the trust depends upon some general equitable rule, independently of the existence of fraud. Hill on Trustees (Wharton’s Ed. of 1854), top p. 197, star page 144. “There is one good general and infallible rule that goes to both kinds of trusts. It is such a general rule as never deceives; a general rule to which there is no exception; and that is this: the law never implies, the court never presumes a trust, but in case of absolute necessity. The reason of this rule is sacred; for if the chancery do once take liberty to construe a trust by implication of law, or to presume a trust unnecessarily, a way is opened for the Lord Chancellor to construe or presume any man in England out of his estate. And so at last every case in court will become casus pro amico.” (Per Lord Nottingham, in Cook v. Fountain, 3 Swans., 585.)
In this case, however, the trust, which was created by express agreement of the parties, clearly resulted to the donor or trustee, who was capable of taking it at the time, the Oakhurst Land Company, and its deed, passed the indefeasible fee it thus acquired, to Mrs. Ada H. Montgomery, whose deed, with joinder of her husband and proper acknowledgment by her and her husband, and her privy examination, when registered, will, under the agreement, pass it on to the purchaser (who is the defendant) from her.
But the appellee takes another position, which is, at least, plausible if not tenable. It is this, as he says: “If the deeds of trust in question created a resulting trust in favor of the Oakhurst Land Company, either before or after the death of Harry M. Heath, then its deed to the plaintiff, Mrs. Ada Heath Montgomery, dated 25 September, 1919, conveyed a fee-simple title to the lot of land contracted by her to be sold to the defendant, and she can, therefore, convey to him a fee-simple title thereto. It will be noted that section four of the agreed ‘statement of *415facts’ recites tbat tbe Oakhurst Land Company conveyed to Mrs. Ada Heath Montgomery the land described in paragraph three of said statement, by its deed dated 25 September, 1918, pursuant to the orders and directions of B. D. Heath, who then owned the entire stock in said corporation. It therefore follows, if we are correct in the foregoing proposition as to the legal effect of the deeds of trust in question, that the Oak-hui’st Land Company had a fee-simple title to this land, on 25 September, 1918, when it conveyed the same to Mrs. Ada Heath Montgomery, and that she being seized in fee of said land by virtue of said deed, can convey a fee-simple title thereto to the defendant. If the deeds of trust in question did not create, by operation of law, a resulting trust in favor of the Oakhurst Land Company, then such deeds of trust created a fee-simple title to said lands in B. D. Heath, the trustee, which he had a right to dispose of by his will and testament.
This was expressly held by this Court in St. James v. Bagley, 138 N. C., 385, in an elaborate and well considered opinion by the Court, where it was held that a deed made by the grantors “to the vestry and wardens of St. James Church in the town of Wilmington for the purpose of aiding in the establishment of a home for indigent widows or orphans, or in the promotion of any other charitable or religious objects to which the property hereinafter conveyed may be appropriated by said parties of the second part,” conveyed a fee-simple title (absolute) for said lands to the grantees, for the reason that no imperative trust was created by the language of the deed, and there appeared no intention on the part of the donors, or the deed itself, that the title should revert to them upon the termination of the uses and purposes for which it was conveyed.
In 1 Perry on Trusts (6 ed.), sec. 152, it is said: “But a distinction must be observed between a devise to a person for a particular purpose, with no intention of conferring upon him any beneficial interest, and a devise with a view of conferring the beneficial interest, but subject to a particular charge, wish, or desire. Thus, if a gift be made to one and his heirs, charged with the payment of debts, it is a gift for a particular purpose, but not for that purpose only; and if it is the intention to confer upon the donee of the legal estate a beneficial interest after the particular purpose is satisfied without exhausting the whole estate, the surplus goes to the donee and does not result.. But if the gift is upon a trust to pay debts, that is a gift for a particular purpose and nothing more. If the whole estate is given for that one purpose, and that purpose does not exhaust the whole estate, the remainder reverts to the donee or his heirs. Or, as Vice-Chancellor Wood stated the rule: (1) Where there is a gift to one to enable him to do something, where he has a choice whether he will do it or not, then the gift is for his own benefit, the motive why it is *416given to him being stated; (2) where yon find the gift is for the general purposes of the will, then the person who takes the estate cannot take the surplus, after satisfying a trust, for his own benefit; (3) where a charge is created by the will, the devisee takes the surplus for his own benefit, and no trust is implied.”
In this connection it must be borne in mind that B. D. Heath was in fact, though not in law, the owner of the land described in the deeds of trust; that in said deeds of trust an absolute right was conferred upon him, and reserved by him, to dispose of the property therein described, as and when and for such purposes as he might see fit. These facts might tend to show that the parties to the transaction intended to convey to him a fee-simple title to said property to do with it as he saw fit, subject to the stated charge thereon for the benefit of his afflicted son, in which event, of course, there could be no resulting trust to the 'donor, the Oakhurst Rand Company, as no distinct and imperative trust would be imposed upon the gift, the said B. D. Heath would therefore have the right to dispose of said land at his will and pleasure. But in our case there was a distinct and imperative trust created and imposed upon the land, by the Oakhurst Land Company’s deed to B. D. Heath, as trustee, which was that he would apply the income or profit thereof to the support and maintenance of his insane and helpless son who was, by reason of his unfortunate infirmity, unable to take care of himself. There was no discretion given him here, but the trust, and the object thereof, were clearly and definitely expressed in the deed creating it, and no one can say, with any show of reason, that the land was conveyed, or the trust created, for the individual benefit or advantage of B. D. Heath. It would therefore seem to be a clear case for a reverter to the donor, as the trust had wholly failed before the death of B. D. Heath. This could not be regarded as a mere charge upon the land for the benefit of the son, but must be considered as a well declared and specific trust.
It may well be added that in both deeds B. D. Heath is described “as trustee,” and, in Exhibit “I-A,” he is described as “trustee of Harry M. Heath,” and in the latter it is expressly stated that his object was to make provision for the care and support of his son, Harry M. Heath, and by clear implication, not for himself, but merely in fulfillment of his filial duty. The large powers given him by the deed of trust relate to his manner and methods of selling, disposing of, or exchanging the land, or substituting other lands therefor, and the deed providing that, he shall not in any manner answer to his son, Harry M. Heath, for the execution of his trust. The provision as to the appointment of another' trustee, should B. D. Heath die before fully administering the trust, and his son Harry M. Heath should survive him, was inserted to prevent the failure of a trustee, by reason of his own death, to complete the full *417execution of tbe trust. Tbe specific requirement is tbat if B. D. Heatb shall fail to appoint a trustee to take bis place, in case of bis death before completing tbe execution of bis trust, then tbat some one be appointed for tbe purpose, but be clearly recognizes tbe fact tbat be is nothing more than a trustee for tbe specific purpose declared, for bis son, and in no sense for himself. This, without other considerations, conclusively shows tbat there was no beneficial interest in B. D. Heath to prevent a reverter to tbe land company.
So it is argued and concluded tbat in any admissible view tbe title in tbe defendant will be a perfectly good one.
It would be useless to discuss tbe other questions raised by counsel.
"We can find no error in tbe proceedings, or in tbe judgment, and we therefore approve and affirm tbe same.
Affirmed.