Whitfield v. Lyon
| Decision Date | 25 May 1908 |
| Docket Number | 12,083 |
| Citation | 46 So. 545,93 Miss. 443 |
| Court | Mississippi Supreme Court |
| Parties | NATHAN W. WHITFIELD ET AL. v. ADELAIDE E. LYON |
FROM the chancery court of Lowndes county, HON. JAMES F. MCCOOL Chancellor.
Mrs Lyon, appellee, was complainant in the court below: Whitfield and others, appellants, were defendants there. From a decree largely in complainant's favor, but not granting all relief for which she prayed, the defendants appealed to the supreme court and complainant prosecuted a cross-appeal.
The facts are sufficiently stated in, or are plainly apparent from, the opinion of the court.
Decree affirmed.
William Baldwin, for appellants and cross-appellees.
The rights of the Whitfield children to these lands are based upon the following propositions. Their grandfather, William Whitfield, certainly owned these lands, he certainly executed a will in which in clear and unmistakable terms and provisions he devised these lands to these appellants as tenants in remainder. The rights of appellees rest solely upon the deed of William W. Whitfield and Lucy A. Whitfield to Theodoric C. Lyon. Whatsoever rights Lyon obtained by this conveyance she has, no more and no less. What now were the rights of T. C. Lyon under this conveyance from William W Whitfield and Lucy A. Whitfield?
We have by the will of William Whitfield, an express life estate given them, and added to this express life estate, a power of sale for reinvestment. Had this sale been made for cash money in hand paid, it is not contended but that Lyon would have received a good title to the property.
The old English rule compelling a purchaser from a trustee to look to the application of the purchase money has never obtained in this country, and ought never to have prevailed anywhere. It was without any reason or justice to support it. This court has had occasion to pass upon this question growing out of this very clause of the will of William Whitfield, in Whitfeld v. Burke, 86 Miss. 435, 38 So. 550.
The purchaser, Lyon, bought the lands wholly on credit and never paid for the lands except in part. Such part as Lyon, the purchaser, did pay was, as he well knew, but paying the individual debts of William W. Whitfield and Lucy A. Whitfield.
The purchaser, Lyon, himself made the investment of such part as he did pay and instead of making the investment as the will required and his agreement recognized, so that the property bought should be "held under like limitations with the property sold, " he in every instance invested it without any sort of limitation, so that it was quickly sold by the trustees and absolutely lost to the remainder man.
A man who makes himself party to the administration of a trust must execute that trust honestly and with good faith to the beneficiary, and a man who knowingly participates with a trustee in the abuse of his trust, can derive no advantages from that abuse. He is charged with the same liabilities as the trustee himself, if he becomes accessory to a violation of that trust, so far as claiming any benefit or reaping any advantage of that violation is involved. 2 Pom. Eq. Jur. 1048; Field v. Schieffelin, 7 Johns. Chanc. 207, Beach on Trusts and Trustees, § 721.
As to the insistence that Mrs. Lyon is a purchaser for value without notice. This defense first appears in the pleadings of this case as an affirmative defense set up in the answer of Mrs. Lyon to the cross-bill of appellants. In the original bill filed in this cause by Mrs. Lyon, she deraigned title and relies upon the title of Theodoric C. Lyon by reason of the fact that she and others are his heirs at law, and sets up a conveyance from the other heirs at law to her. It is true that she states that Lyon made a conveyance of said property to her and her husband, yet it is not alleged in the bill that she paid a valuable consideration therefor, and the fact that she procured other deeds from the co-heirs, would negative rather than affirm that she paid a valuable consideration for said land, as a bona fide purchaser without notice.
This being an affirmative defense, and not in response to any allegations of the cross-bill of appellants, we submit that the burden of proof is upon the appellee to show such payment. There is no proof in this record, unless it be held by the court that the recital in the deed from Judge Lyon to Mrs. Lyon is to be treated as proof on this question. We confidently submit that such is not proof.
Counsel for appellants most earnestly insist that the recital in the deed from Lyon to Mrs. Lyon is proof of the purchase price there named, and is evidence of her bona fide purchase without notice, and seems to rest their case upon this proposition, citing the case of Hiller v. Jones, 66 Miss. 636, 6 So. 465 as conclusive of this question.
We submit that the case before the court is dearly distinguishable from Hiller v. Jones. Judge CAMPBELL in announcing the rule laid down by him in that case rested his opinion upon the fact that purchasers of property had a right to rely upon the muniments of title as found upon the records, and the facts before the court in that case were a chain of record titles upon which the purchasers relied.
We have no such case before the court. Here, the counsel insist that the deed made to Mrs. Lyon, in which it is recited that she paid a valuable consideration, is to be taken as evidence of her payment. It cannot be insisted that she relied upon any recitals in that deed, or that she was misled by any record of that deed. Whatever transactions occurred between the purchaser and the seller was simultaneous; she knew the facts; she could not rely upon any recital in that deed for the facts. Hence the principles announced by Judge CAMPBELL in Hiller v. Jones cannot prevail in this case.
Before Mrs. Lyon can rely upon a recital of payment of the consideration contained in the deed from Whitfield to Judge Lyon, she must first show that she was a purchaser for value in good faith without notice, of the lands conveyed by Whitfield to Lyon before she can set up any such recital as evidence. The facts set up in her bill show that Lyon dealt with this trust property in such manner as to become himself a trustee, charged with all of the trusts fixed upon said property. What if she did not know, at the time this property was conveyed to her, of these trust relations! If she did not pay a valuable consideration for said property without notice of said trust, then she cannot be heard to complain. Hence we repeat that she must first show that she has paid a valuable consideration for said property without notice, before the recitals of payment of consideration in the deed from William W. and Lucy Whitfield can avail her any relief.
The great weight of authority, including the supreme court of the United States, is against the rule announced by Judge CAMPBELL in the case of Hiller v. Jones, and we think sound reason and justice is with the weight of authority.
Orr & Harris, for appellee and cross-appellant.
It is now conceded by the solicitor for the appellants that the English rule does not obtain in this country and that the purchaser of a trust estate is not bound to look to the proper application of the purchase money. We assume, therefore, that William Whitfield, Sr., meant exactly what he said in his will--That his son was fully vested with the power and discretion to sell any portion of his estate, negroes or land, whensoever and to whomsoever he might please, and that he intended for the purchaser to obtain a good title; for the language of the will is "that the son may sell and convey a good title." 1 Leading Cases in Equity 123; Elliott v. Merryman and numerous cases therein cited. See page 130; Davis v. Christian, 15 Grattan, 11, 62 Texas, 351; Harris v. Smith, 98 Tenn. 14 (Pickle) ; Carroll v. Shea, 149 Mass. 317.
The charge of bad faith on the part of Theodoric C. Lyon is without any foundation in fact. It does the memory of that gentleman a grievous injustice. He was known in the community in which he had been reared, and lived for many years, as an honorable, high-toned, truthful gentleman. The example, the training, the teaching of his distinguished father had been such as to leave its imprint on the life and character of this son; and he was known to be the type of man who would have scorned to do a wrong or perpetrate such an act as he is charged with in this instance.
It is shown by the record beyond the possibility of controversy, that Lyon paid every dollar of the $ 17,400.00 which he promised to pay, for these lands.
Alexander & Alexander, on the same side.
The power conferred upon the life tenants, William W. and Lucy A. Whitfield, by the will of their father, is not a simple power to sell.
Viewing this provision merely as an ordinary power to sell for reinvestment of the proceeds, this court has already held that there was no duty on the purchaser to see to the application of the proceeds, but this clause goes further than to give an ordinary power to sell for reinvestment. It expressly provides that if a sale is made "the title shall be good to the purchaser," and then proceeds to direct that the fund is to be reinvested. It is not left to implication or inference or as a mere legal conclusion that the purchaser shall get a good title, but, as if to put the matter beyond all question, the clause itself declares that the purchaser shall get a good title and immediately afterwards directs that the life tenant shall invest the proceeds. It is very material also to notice that the reinvestment is not required to be made in lands but "in any other productive anti valuable property." The clause deals with both real and personal property, and the...
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