Summary
In Battle v. Petway, 27 N.C. 576, Ruffin, C. J., says: "Beyond doubt, equity would not compel nor allow the trustee to convey the legal estate to the tenant for life, but require him to retain it for the security of the remainderman.
Summary of this case from Cameron v. HicksOpinion
(June Term, 1845.)
1. A cestui que trust is not entitled to call for the legal estate when, from the nature of the trust, his ownership is not immediate and absolute, and when it would defeat or put it in his power to defeat or endanger a legitimate ulterior limitation of the trust.
2. Where by will made since 1827 property is conveyed to A. in trust for the use of B., and that he will pay over to him annually the net income or interest accruing therefrom; but if B. should die without lawful issue, then the property to be held for others: Held, that B. could not compel A. to convey to him the legal estate.
3. The act of 1812, Rev. Stat., ch. 45, sec. 4, was not intended to embrace any case in which the trustee could not voluntarily convey to the debtor the legal estate without incurring a breach of trust to other persons with whose interests he is also charge.
4. Where the court cannot decree a conveyance of the legal title at the suit of the cestui que trust, the trustee's estate cannot be divested by a sheriff's sale under an execution against the cestui que trust.
APPEAL from EDGECOMBE Spring Term, 1845; Dick, J.
Mordecai for plaintiff.
B. F. Moore for defendant.
Trespass, brought by James L. Battle against the sheriff of Edgecombe, for seizing certain slaves, the property of the plaintiff, which the defendant justifies under writs of fiere facias against the property of Jethro D. Battle, which came before the court on a case agreed.
Mary E. Taylor owned the slaves in question, and made her will in August, 1843, and died. By it she bequeathed one-third part of her estate to M. L. Battle, her heirs and assigns, and one-third to James L. Battle, his heirs and assigns. Then came the following clauses: "Item 3. I give and bequeath likewise to James L. Battle one-third of my estate, in trust for the use and benefit of my nephew, Jethro D. Battle, to him and his heirs forever; and that the said James L. pay over to him the said Jethro, annually, the net income or interest accruing therefrom. Item 4. My will is that should either of the (577) above legatees die without lawful issue of their body, then the other two shall heir the property of the deceased; but that Jethro D. Battle's portion shall be controlled, as in the third item directed."
The slaves belonging to the testator were divided into three shares, and those which are the subject of the present action were allotted to the plaintiff, as the trustee for Jethro D. Battle, and were held by him as such when the defendant seized them.
It was agreed that if the opinion of the court should be for the plaintiff there should be judgment for him for certain damages and the costs; and if for the defendant, then a nonsuit should be entered. The court gave judgment for the plaintiff, and the defendant appealed.
The question is whether this is a case within the act of 1812, concerning equitable interests in real and personal estate. We may premises that we do not agree with counsel for the plaintiff, that there is an analogy between the cases under this act and those involving the inquiry what uses are, or are not, executed under the statute of uses. For the act of 1812 assumes that there was not only an intention that the legal and equitable estates should not coalesce, but that they are actually separate. The sole subjects of the act are trusts — uses not executed. We think, too, that this question does not depend merely on the intention of the creator of the trust that the cestui que trust should have only the trust, and not be entitled to call for the legal estate. For, in truth, that is always the intention, and it can be no other in any trust. It is the very object of separating the legal and equitable ownership. But, although that be the intention, it cannot be respected, because it is inconsistent with the other express (578) intention that the cestui que trust should have the whole profits and the entire beneficial ownership of the property. As it would be repugnant to the nature of legal property that it should not be subject to the debts and disposition of the proprietor, so it is equally repugnant to the entire equitable ownership that the owner should not be entitled to call for a conveyance from his trustee, and thus take the control of his own estate into his own hands. Trusts, in this respect, are governed by the same rules which govern legal interests. Snowden v. Hales, 6 Sim., 524; Jasper v. Maxwell, 16 N.C. 357; Dick v. Pitchford 21 N.C. 480. Still the intention is so far respected, that a cestui que trust is held not to be entitled to call for the legal estate when, from the nature of the trust, his ownership is not immediate and absolute, and when it would defeat or put it in his power to defeat or endanger a legitimate ulterior limitation of the trust. Hence, when the express purpose is that the trustee shall have the management of the trust property and shall receive and lay out the profits with his own hands at future periods in such cases the trustee cannot be compelled to give up his legal estate to the cestui que trust. So, if the trust is not for a particular person only, but it is limited over for other persons for whose protection the trustee's legal estate is necessary, or may be highly useful, it is plain that the duty of the trustee to those entitled in futuro requires him to retain, his estate, and therefore the court would not decree him to convey it. Suppose a conveyance by deed of a slave in trust for one for life, and then in trust for another, which was formerly the only method by which personal property could, by an act inter vivos, be limited over after a life estate. Beyond doubt, equity would not compel nor allow the trustee to convey the legal estate to the tenant for life, but require him to retain it for the security of the remainderman. And so in any case of a contingent limitation over it would be the duty of the trustee to retain the title and the control over the possession of the trust property, and the court of equity will not take it from him, as was held in the case cited of Dick v. Pitchford, supra.
Now, the act of 1812 did not mean to change the nature of (579) trusts, the relation between the trustee and cestui que trust, or the rights of the latter against the former. The sole purpose of it was to render the interest of the cestui que trust liable at law, as it was below in equity, for the debts of the cestui que trust in certain cases, by transferring by a sale on execution against the cestui que trust the legal estate of the trustee, as well as the trust estate of the debtor. It is not a necessary construction of such a provision, that it was not intended to embrace any such cases as those just adverted to, in which the trustee could not voluntarily convey to the debtor without incurring a breach of trust to other persons, with whose interests he is also charged. As was said in Gillis v. McKay, 15 N.C. 172, "the principle is that the legal estate is not to be divested out of the trustee, unless it may be done without affecting any rightful purpose for which it was created; and, therefore, that if others had an equity in the same property, that is, in the debtor's particular share, the act did not operate on it. We need not in this case discuss the question on the third clause of the will, for whatever doubts might be suggested on that provision per se, it is clear upon that and the fourth clause, taken together, that it was both the intention of the testatrix that the legal title of Jethro D. Battle's share should be kept outstanding in the trustee, and that it is proper and needful so to keep it, as a shield against the acts of imprudence or injustice of that person, for the benefit of those that may be entitled under the contingent limitation over, upon his death without leaving issue — which is the construction of that clause under the act of 1827. It was probably one of the objects of interposing a trustee to vest in him the continued right of possession, so that the first taker (if he may be so called) should not be able by removal and alienation in distant parts, to defeat those to whom the property is limited over, of whom, indeed, the trustee is one. Dick v. Pitchford is directly in point, for the court there refused to decree even the possession to the tenant for life, much less a conveyance, as it was necessary to secure the contingent interest. As the court would not decree a conveyance at the suit of the cestui que trust, it follows that we must hold (580) that the trustee's estate would not be divested by a sheriff's sale, under execution against the cestui que trust. Therefore the judgment must be
PER CURIAM. Affirmed.
Cited: Forbes v. Smith, 43 N.C. 31; Williams v. Council, 49 N.C. 214; Turnage v. Green, 55 N.C. 66; Swann v. Myers, 75 N.C. 594; Love v. Smathers, 82 N.C. 372; King v. Rhew, 108 N.C. 703; McKenzie v. Sumner, 114 N.C. 428; Cameron v. Hicks, 141 N.C. 31; Cherry v. Power Co., 142 N.C. 410.