Nelson v. Ratliff

• Decision Date: 20 May 1895
• Citation: 18 So. 487,72 Miss. 656
• Court: Mississippi Supreme Court
• Parties: THOS. E. NELSON ET AL. v. W. T. RATLIFF, EXECUTOR, ET AL

18 So. 487

72 Miss. 656

THOS. E. NELSON ET AL. v. W. T. RATLIFF, EXECUTOR, ET AL

Supreme Court of Mississippi

May 20, 1895

FROM the chancery court of the first district of Hinds county HON. H. C. CONN, Chancellor.

On May 1, 1869, John Nelson executed a trust-deed on certain property in the city of Jackson, to secure Robert Kells a debt therein mentioned, which debt was afterwards renewed. John E. Tarpley was made trustee, with power of sale. On May 2, 1877, Nelson executed another trust-deed, by which he conveyed this and other property to W. H. H. Green, as trustee. The terms of this deed are fully set forth in the opinion. On August 9, 1880, Kells filed his original bill in the court below to foreclose his prior trust-deed. To this bill Mary E. Nelson, the widow of John Nelson, and his five children were made parties defendant, as was Green, the trustee in the second deed. John E. Tarpley, trustee in the first deed, having died, his two heirs at law, who were of full age, were also made defendants. They answered, admitting the allegations of the bill. Green, the trustee in the other deed, also filed an answer, stating that certain debts provided for in that deed had been paid; that, inasmuch as the beneficiaries were all before the court, and he had no interest except as a mere trustee, he did not deem it necessary to litigate for them, and he asked to be dismissed. Pro confesso decree was entered against the widow and all the children of John Nelson. One of these, however, had not been served with process, and another was not at the time of full age. The property in controversy was then in possession of Green, as trustee in the deed of May 2, 1877. After filing the bill and taking the pro confesso decree, Kells was applied to by one of the heirs of John Nelson who wished to purchase the property, and, being advised that the power of sale could be executed in pais by the heirs of Tarpley, the deceased trustee, he procured the property to be advertised and sold by them, and became the purchaser January 11, 1881 and received a deed and went into possession, claiming as owner under his purchase. He then sold the property to one of the children and heirs of John Nelson, deceased, but she failed to pay for the same, and he afterwards foreclosed a trust-deed she had given him for the purchase money and retook the property. He died in 1888. After going into possession under his purchase, January 11, 1881, Kells, and those through whom he claims, and his executors after his death, remained in the open, adverse and continuous possession of the property under claim of ownership. Through some cause, possibly inadvertence, no disposition was made of the chancery suit which Kells had instituted before his purchase. No order was entered therein after the decree pro confesso in September, 1880, and no steps whatever were taken until September 21, 1891, when some of the defendants children of John Nelson, appeared, and, by leave of the court, filed a cross bill. The solicitors for Kells, who filed the original bill, testified that they were of the opinion that it had been dismissed; that the suit had been entirely abandoned, and that no steps were taken therein, or intended to be taken, after Kells purchased at the foreclosure sale in 1881, when it was supposed that he had acquired a perfect title to the property. At the time that Kells made this purchase and went into possession, claiming to be owner, Green, the trustee in the deed of May, 1877, was of full age, as were the widow and children of John Nelson excepting appellant, Thomas E. Nelson, who did not become of age until November, 1882.

The cross appellants sought to vacate the sale under which Kells purchased, and to treat him as a mortgagee in possession, and asked for an accounting of rents, etc., and that they should be permitted to redeem should anything be found due on the secured debt. The executors of Kells, among other defenses set up the plea of the statute of limitations of ten years. On final hearing, a decree was entered in their favor dismissing the cross-bill, from which decree this appeal is taken. The opinion contains such further statement of the facts as is necessary to an understanding of the questions decided.

Section 2694, code 1880, is as follows: "When the legal title to property, or a right in action, is in an executor, administrator, guardian or other trustee, the time during which any statute of limitations runs against such trustee shall be computed against the person beneficially interested in such property or right in action, although such person may be under disability, and within the saving of any statute of limitations; and may be availed of in any suit or action by such person."

Decree affirmed.

A. H. Jayne, for appellant,

Filed an elaborate brief, as to the questions decided making the following points:

1. The statute of limitations is not a bar to the cross bill, because the suit was pending. The jurisdiction of the court having once attached, in the absence of a dismissal, it continued. The property involved was subject to the jurisdiction of the court all the time.

2. After Kells filed his bill and invoked the jurisdiction to foreclose regularly, it was an imposition on the court and a fraud on the defendants for him to seek to dispose of the property by foreclosure in pais. This was never regularly brought to the notice of the court or to the attention of the parties in the cause, and hence they were not affected by it.

The record shows that Kells recognized the full validity of the trust-deed to Green, of May 2, 1877, to which he was a party, and under which he received benefits, and he is estopped to claim the benefit of any position antagonistic to the provisions of that deed. If he is not bound by that trust, then he intruded himself into the affairs of the estate of John Nelson, and became an executor in his own wrong. If the relation of trust existed between Kells and appellants, the statute does not apply. White v. Tucker, 52 Miss. 145.

3. The record does not satisfactorily show that Kells acquired adverse possession of the property in January, 1881, or that he thereafter held it continuously as owner. In view of the Green trust-deed and his relation to the heirs of John Nelson, Kells could not assume the adverse and hostile position of owner without giving the defendants notice, not only of his possession, but as to the means and manner of his acquiring it. It does not appear that the defendants had such notice until shortly before the cross bill was filed.

4. Kells had notice of the violation of trust on the part of Green and of his abandonment of that trust, and, therefore, could not take advantage of such abandonment. Joor v. Williams, 38 Miss. 546.

5. Green, having accepted the trust, could not lawfully disclaim or abandon it, except by a decree of the court or consent of the parties. Perry on Trusts, §§ 268, 602 and notes.

6. Kells was a trustee ex maleficio after taking the deed from the Tarpley heirs. Perry on Trusts, § 245; 31 Conn. 240; 7 Cal. 348; 1 M. & K., 127; 1 M. & G., 607; 21 Beav., 183. Being a constructive trustee, he could not set up the statute of limitations. See, especially, Goodhue v. Barnwell, Rice's Eq. (S. C. ), 198.

7. The statute of limitations is not necessarily controlling as to the time within which relief may be sought in cases of constructive trusts by reason of fraud. Perry on Trusts, §§ 230, 832 et seq.; 1 W. & M., 342; 1 McLean, 146; 9 Peters (U. S.), 408; 9 Ala. 662.

8. Before the statute can begin to run in favor of a constructive trustee, the fact of its disavowal must be clearly brought home to the knowledge of the other parties. 126 Ill. 58; 9 Am. St. R., 523; 8 Ga. 486; 52 Am. Dec., 413; Brown v. Norman, 65 Miss. 369. If the injured party acts promptly after actual discovery of the fraud, it is sufficient. 4 Lawson's Rights & Rem., § 2036; 5 Ib., § 2362; 67 N.Y. 304; 23 Am. R., 117; 9 Am. St. R., 839; 34 Ib., 79; 142 Ill. 269; 116 Ind. 164.

9. That the statute does not apply, by reason of the conduct of the original complainant in the case, see Sugg v. Thrasher, 30 Miss. 135, and see, especially, Tucker v. Wilson, 68 Ib., 693.

10. There is no such thing as a technical discontinuance in our law. Insurance Co. v. Francis, 52 Miss. 457; Allen v. Pool, 54 Ib., 323. Therefore, by reason of the doctrine of lis pendens, cross complainants were not barred. Especially is this true as to the original complainant himself. See Tucker v. Wilson, supra.

11. That the power of sale did not descend to the heirs of Tarpley, see Perry on Trusts, §§ 344, 492, 503; Sugden on Powers, 129; 2 Pom. Eq. Jur., § 995, and cases cited.

J. C. Ward, on the same side.

1. The power to sell under the trust-deed did not descend to the heirs of Tarpley, the trustee. Therefore, the deed under which Kells claimed is void.

2. By reason of the pendency of the suit, the statute of limitations could not bar the cross bill. Bennett on Lis Pendens, § 91; 13 Am. & Eng. Enc. L., 877. At the time of the service of process on the defendants, the lis pendens began. 23 Miss. 62; 26 Ib., 799; Bennett on Lis Pendens, § 52. The termination of lis pendens is the time at which the court ceases to have jurisdiction. 13 Am. & Eng. Enc. L., p. 883.

There is no such thing as a technical discontinuance in this state. Insurance Co. v. Francis, 52 Miss. 457; Allen v. Pool, 54 Ib., 323; Tucker v. Wilson, 68 Ib., 693. Here there was never any dismissal, and the case remained on the docket of the court. The fact that it was supposed that it had been dismissed did not prevent its being a pending suit.

3. Appellants have not lost the benefit of the lis pendens by laches. Bennett, § 109; 13 Am. & Eng. Enc. L., 889, 881. When the...