Opinion
01-14-1895
LINDSLEY v. DODD et al.
J. E. Howell, for complainant. Alfred E. Skinner, for defendants.
(Syllabus by the Court)
Bill by James T. Lindsley, administrator, against Amzi T. Dodd and others. Decree for complainant.
J. E. Howell, for complainant.
Alfred E. Skinner, for defendants.
PITNEY, V. C. This action, as originally framed, was brought by the administrator de bonis non cum testamento annexo of Stephen H. Dodd, late of the county of Essex, deceased, against the several heirs at law and devisees of the executors named in the will of said Dodd. Its object is to recover the amount of the estate of said Stephen H. Dodd, once in the hands of his executors, and which has been lost, as is alleged, by their neglect. The particular act of neglect relied upon is the failure to cause to be filed for record a mortgage for $1,500, given by one Van Orden to the executors, to secure his bond to them for that amount, payable in one year, with interest. After the giving of the mortgage, the land which it covered was sold away from Van Orden by the sheriff of Essex county, by virtue of judgments against Van Orden, and came to be held by bona fide purchasers without notice of the unrecorded mortgage, whereby, Van Orden having died insolvent, a total loss has occurred.
The first question is as to the right of the administrator c. t, a. to maintain the action. I think the clear weight of authority in this state, as well as elsewhere, is that, in the absence of a statutory provision giving an ordinary administrator de bonis non such right, it does not exist. There is no such statute in this state, except in the case of a removal of an executor, administrator, or trustee for misconduct by the probate court, and the appointment of a successor to take his place. In such case a suit of the nature of the present is expressly authorized, as pointed out by the chief justice in McDonald v. O'Connell's Adm'rs, 39 N. J. Law, 317. The case of Beall v. New Mexico, 16 Wall. 535, seems precisely in point against the right of the administrator to recover in this action, and many authorities are collected by Mr. Justice Bradley in his opinion in that case. That suit was in form an action by the territory of New Mexico against the first administrator and his sureties upon his official bond, to recover the amount of the estate of the decedent, as shown by the inventory thereof, made by the first administrator, and which it was alleged he had lost by selling it upon credit, and failing to take proper security for it. The action, though in the name of the territory, was prosecuted by and for the use of the administrator de bonis non, and it was held it would not lie. In the course of his opinion, the learned judge says: "For the delinquency of the former administrator in not prosecuting [claims which it was his duty to prosecute], he is responsible to the creditor, legatees, and distributees directly, and not to the administrator de bonis non." This rule was distinctly recognized and applied by Chancellor Zabriskie in Carrick v. Carrick, 23 N. J. Eq. 364, and is stated to be settled law by the chief justice in Mc Donald v. O'Connell's Adm'rs, supra. And see, also, Bradway v. Holmes, 50 N. J. Eq. 311, 25 Atl. 196. The only authority looking the other way is Lindsley v. Personette, 35 N. J. Eq. 355, decided by Chancellor Runyon. For the reason stated in Bradway v. Holmes, I feel constrained not to follow Lindsley v. Personette, and come to the conclusion that the action cannot be maintained by the administrator. However, this point was not taken in the answer, but the defendants answered fully to the merits, and they were fully gone into at the hearing. The wife of the complainant is the sole legatee and devisee in remainder of the testator, and is the real complainant in the cause. Motion has been made to amend by making her complainant in place of the present complainant, and making him a party defendant. A perusal of the bill shows that this can be done without materially altering its frame or prayer, or stating any new matter requiring an answer. Under these circumstances, I think the motion should be allowed. A similar course was pursued in Bradway v. Holmes.
Looking at the merits, complainant's case, briefly stated, is this: Calvin Dodd and Philip Ward, surviving executors of Stephen H. Dodd, deceased, on the 28th of November, 1873, held the bond of Isaac L. Van Orden for $3,000, secured by a mortgage given to them, as such executors, by Van Orden and wife, on land in Essex county, which was ample to secure it. The bond and mortgage bore date March 3, 1858, and the mortgage was duly recorded on September 1, 1858, in the proper book of records. On or about the 28th of November, 1873, they surrendered these securities to Van Orden, and took in their place a new bond and mortgage to them, as executors of Stephen H. Dodd, to secure $1,500, in one year, with interest, the mortgage covering a small part only of the land which had been covered by the first mortgage. The actual surrender of the old mortgage and the taking of the new mortgage were probably done on or about the 18th or 19th of December. On the date last named, Van Orden caused the old mortgage for $3,000 to be canceled of record, but the executors failed and neglected to cause the new mortgage to be registered or recorded. Van Orden shortly afterward became financially embarrassed. Judgments were recovered against him. Executions thereon were levied upon the lands covered by the mortgage, and the same were subsequently sold thereunder by the sheriff of Essex county, and the title became vested in bona fide purchasers for value, without notice of the unrecorded mortgage. Van Orden died insolvent, and the debt is wholly lost. It abundantly appeal's that the value of the property covered by the $1,500 mortgage is, and always has been since it was given, ample to secure it. It also appears that neither the complainant nor her mother, who are the sole beneficiariesunder the will of Stephen H. Dodd, ever had any knowledge or suspicion of the existence of the $1,500 mortgage until about July, 1889, when it was accidentally discovered among the papers of Calvin Dodd, one of the executors, after his death. He died In 1878. In the meantime both mother and daughter supposed that they had some right and interest in the lands covered by the old mortgage, which lands had belonged to Stephen H. Dodd's father, Samuel Tyler Dodd, and they had made industrious and continued inquiries into the affair, with the view of ascertaining what that interest was, and whether the purchaser at sheriff's sale of Van Orden's right had notice of it. Such inquiries commenced shortly after the death of Calvin Dodd, in 1878, and the death, which occurred a year or two later, of Eliza Dodd, who was the widow of Samuel Tyler Dodd, and entitled to a life estate in the lands. Such inquiries resulted in discovering the unrecorded mortgage above stated, and that no proof could be produced to show that the holders of the title had any notice. It is proper, however, to remark here that no burden was cast upon the beneficiaries under the will of Calvin Dodd to show lack of notice to the holders of the title of the lands. The natural presumption is against such notice, and the burden is on the executors or their representatives to show the contrary. No account was ever rendered by the executors of Stephen H. Dodd of their dealing with the estate, either privately to the beneficiaries, or to the orphans' court, or otherwise, so far as appears.
Now, it seems to me that these facts show a complete case against the deceased executors. It should be observed that the executors are in reality not sought to be charged because they have lost the estate through their own negligence, though such negligence is stated as a part of complainant's case. Their liability arises out of their having once had the estate in their possession in the shape of a good bond and mortgage, and they cannot discharge themselves from this liability by saying that they lost that estate by their own breach of trust or negligence in the care of it. This proposition seems so self-evident as to require no authority to support it. There is, however, abundance of authority for that purpose. In Burrowes v. Gore, 6 H. L. Cas. 907, at page 956, Lord St. Leonards said: "What is the position of Thomas Burrowes [the trustee] and of Robert Burrowes, his son [the defendant], as his representative? He ought to have the £1,500 In his hands ready to be paid over to the complainants. He is liable in a court of equity as having committed a breach of trust in not having that money forthcoming. * * * In his answer, Robert Burrowes says that he believes that the sums [of money demanded] have * * * been lost through the default of the trustee to the settlement [Thomas Burrowes]. Lost by the neglect of the trustees! Who are the trustees? Why, he himself is a trustee at this moment. He is the representative of his father, Thomas, who was himself a trustee. How is it possible for him for a moment to be heard to say, 'I have lost the money by my breach of trust'? The answer should have been, 'If you have, you will be so good as to pay it.' No trustee can say, as a defense, 'I have committed a breach of trust.'" In Holcomb v. Holcomb, 11 N. J. Eq. 281, at page 300, Chancellor Williamson said: "As to the promissory notes and all other debts not properly secured, it was the duty of the executors to have collected them and made them secure. If, by permitting them to remain without security, they afterwards were lost to the estate, it was through the negligence of the executors in not properly discharging their duty, and they must be charged with their loss." The same principle is recognized in McCartin v. Traphagen, 43 N. J. Eq. 323, at page 334, 11 Atl. 156. Both executors are dead. Philip Ward left no property, and no defense is made by his heir at law. Calvin Dodd, the other executor, left a considerable estate, which, by his will, he gave to the defendant Samuel T. Dodd, who was his grandson. His executors settled his estate many years ago, and were not made parties.
Several defenses are set up by Samuel T. Dodd, the grandson and devisee of Calvin. I will notice them.
First, he alleges that after the giving of the unrecorded mortgage of November 28, 1873, viz. on December 5, 1873, seven days later, the present complainant and her mother conveyed, released, and quitclaimed all their right, title, and interest in the premises covered by the mortgage to the mortgagor, Van Orden. Such a deed, or certified copy of it, is produced, and it covers the whole premises covered by the first mortgage. It purports to be recorded December 19, 1873, the very day on which the old mortgage for $3,000 was canceled of record. Now, the giving of this release, whose consideration is one dollar, by these ladies, who were mere beneficiaries under the will of Stephen H. Dodd, and not mortgagees, does not and cannot upon its face have the effect of discharging a mortgage given substantially at the same time to the executors of the will of the husband of one and father of the other. Even if the release had been given by the mortgagee to the mortgagor, no presumption would, under the circumstances, have arisen that it was intended to discharge the mortgage. The presumption would be all the other way, viz. that the bond and mortgage were given to the executors in consideration, in part at least, of the giving of the release. The presumption is that, if the parties had intended to discharge the mortgage, they would have done so directly, and would not have adopted so expensive and roundabout a mode as the giving a release within seven days afterits date, and before its record, by a person not a party to it. I shall have occasion further on to state the circumstances attending the giving of this release.
But, in the next place, the defendant, not relying upon the release alone to show that the mortgage never had any vitality, falls back upon the previous history of the dealings of the parties interested in these mortgaged premises. That history is, briefly, as follows: Samuel Tyler Dodd, the grandfather of the now complainant, and the father of Stephen H. Dodd, died seised of them in April, 1849, testate, leaving a widow, Eliza, and seven children, viz. Stephen H., Phebe L. Van Orden, wife of Isaac L. Van Orden, John, Israel, Zebina, James W., Samuel T. Some of these children were under age. So much of his will as bears upon the present question is as follows: "Second. I give and bequeath to my wife, Eliza, the use of all my household furniture during her widowhood. * * * Third. I do authorize, empower, and direct my executors, hereinafter named, or the survivor of them, to sell and convey my lot of salt meadow, lying between meadows of Daniel Dodd and Calvin Dodd, for the best price that can be obtained for the same, and also to sell my personal estate, except the household furniture, and, by and with the advice of my son Stephen H. Dodd, either to sell and convey so much of my real estate as may be sufficient to pay all my just debts, or raise such amount as may be necessary for that purpose by a mortgage upon my real estate, the reason whereof will hereafter appear. Fourth. I do authorize my son Stephen II. Dodd to take, or my executors to convey to him, his heirs and assignees, all the remainder of my real estate, at the sum of three thousand dollars, by his paying to the other of my legal heirs their share of the same, as he may agree with them, upon the following conditions, that it to say: All my estate to remain, except the amount for debts, which may be sold or mortgaged, for the use of my wife, Eliza, if she remains my widow, to maintain and educate my minor children; and, when the youngest shall have attained the age of twenty-one years, then one-half the value above mentioned, my just debts and other charges on my estate being deducted from the said three thousand dollars, be paid, share and share alike, to my heirs, the other half to remain for the support of my wife, Eliza, during her widowhood, and no longer. In case of the marriage or death of my said wife, then my son Stephen H. Dodd to pay my heirs au equal share each, himself included, out of what may remain. In case my daughter Phebe should marry before the first dividend of the estate, I direct my son Stephen H. Dodd, should my estate then be in his hands, or my executors, should it not, to give her one hundred dollars at her marriage, to be deducted from her share in the first dividend." And he appointed Calvin Dodd and Philip Ward his executors. Besides the salt meadow mentioned in the will, the testator seems to have died seised of five several tracts of land: One of 12 acres, called the "homestead," and one of 6 acres (these two were afterwards conveyed to Van Orden, and the $3,000 mortgage above mentioned was given as consideration money); two tracts, one containing 14.41 acres, and the other, contents not given, sold together by the executors, in 1851, for $053.50; one containing one-fifth of an acre, sold, in 1857, for $910. The salt meadow procured $75. Stephen appears to have taken possession of the homestead, and to have held it as a home for his mother and younger brothers and sisters while he lived. In June, 1854, he purchased from his brother Israel L. Dodd, then just of age, his interest in his father's estate, paying therefor $100, and taking his deed of conveyance for the land, which deed was duly recorded.
Stephen died, testate, in January, 1856, leaving the present complainant, his only child, about two years old, and his widow, him surviving. By his will he provided as follows: "I hereby constitute and appoint Calvin Dodd, Philip Ward, and Amzi S. Dodd, son of Calvin, of said township, county, and state, and their survivors and survivor, executors and executor of this, my last will and testament, whom I do hereby authorize and empower to sell and dispose of my property, real and personal, for the payment of my just debts and charges, and, as they shall think expedient, from time to time to convey the same in fee simple or for a term of years for the benefit and behoof of my heirs at law, and to carry out and fulfill the intentions of the will of my father, Samuel T. Dodd, and, with the consent of my father's widow, to sell, dispose of, and invest the proceeds of such sale or conveyance for the benefit of my own and my father's heirs at law. I give and bequeath unto my loving wife, Letitia, the residue of my property, real and personal, to have and to hold the same during her widowhood, and, upon her marriage or decease, the same to go to my daughter, her heirs and assigns, forever: provided that, if my said daughter should die leaving no heirs of her body, then and in that case the same shall revert to the heirs of my said father, deceased." It will be observed that he named the same executors as those named in his father's will, adding Amzi S. Dodd, who was the son of Calvin Dodd, and father of the defendant Amzi T. Dodd. By deed dated March 23, 1858, acknowledged March 25, 1858, and recorded September 1, 1858, the three executors above named (Calvin Dodd and Philip Ward being named as executors of Samuel T. Dodd, and all three being named as executors of Stephen H. Dodd), after reciting the power of sale contained in each will, conveyed the two tracts of 12 acres (called the "homestead") and 6acres, respectively, to Isaac L. Van Orden, in consideration of $3,000. In satisfaction of this consideration, Van Orden and his wife gave back to the three executors, as executors of Stephen H. Dodd only, a bond of like date with the deed, to secure the sum of $3,000, "or whatever less sum shall be found to be due from the executors of Stephen H. Dodd, deceased, at the time the youngest child of Samuel T. Dodd, deceased, shall attain the age of 21 years, to the heirs and for the widow of the said Samuel T. Dodd, deceased, under and by virtue of his last will and testament, which sum hereby required to be paid, and intended to be secured, is the sum which said will directs to be divided into two equal parts upon the said youngest child's coming of age, one part to be paid to the heirs of the said Samuel T. Dodd, deceased, and the other part to remain for the support of his widow." This mortgage appears to have been acknowledged March 30, 1858, before a different master from the one taking the acknowledgment of the executor's deed, but was recorded on the same day,— September 1, 1858. The language of the condition of the bond indicates that Van Orden had taken the property upon the same terms upon which it was given to Stephen, viz. at $3,000; and out of this sum Van Orden was to pay the debts of the first testator, and support the widow and minor children, and the next balance was to go to and be divided between the children of the first testator, Samuel T. Dodd. There is further proof that this was the understanding of the parties. A receipt following a statement in the handwriting of Van Orden, and signed by the attorney of Letitia H. Dodd, the widow of Stephen, is produced, by which it appears that on May 7, 1860, two years after this deed was given, Van Orden paid her a balance of $150.89, due on a total of $255.95, composed of $167.37, the amount of divers small debts of Samuel T. paid by Stephen H., and $88.58 of interest thereon. Further, the bond of Van Orden, above recited, bears the following indorsement, in the handwriting of Calvin Dodd, the executor now sought to be charged: "Orange, January 27th, 1859. Received of Isaac L. Van Orden seventy dollars for Letitia A. Dodd, widow, of Stephen H. Dodd, as per receipts. $70.00. Do. Received of Isaac L. Van Orden ninety-four dollars for David Riker's account, as by receipt. $94.00. Do. Received of Isaac L. Van Orden two hundred thirty-seven 37/100 dollars, one hundred thirty-seven 37/100 dollars being money advanced for the estate of Samuel T. Dodd's estate, and one hundred dollars for services as executor of estate. $237.37. Calvin Dodd, One of the Executors of Stephen H. Dodd, Deceased." This receipt was, I think, intended as a memorandum of credits which Van Orden would be entitled to upon the sum of $3,000 at the time the youngest child came of age. What became of the interest on the whole sum, or how much went to support Eliza, the elder widow, and how much to educate the children, does not appear.
Another document produced by the defendant is as follows:
"$75. Orange, Dec, 1861. Received of I. L. Van Orden seventy-five dollars, being an installment on a dividend of $150 payable to each of the heirs of the late Samuel T. Dodd from his estate. The other half of said hundred and fifty dollars I direct to be paid to the order of Eliza Dodd, and indorsed upon an order given to her for one hundred and seventy-five dollars upon the executors of the estate of Stephen H. Dodd, deceased. Letitia A. Dodd."
"Executors of Estate of Stephen H. Dodd, Dec'd: Pay to the order of Eliza Dodd one hundred and seventy-five dollars, as follows: Seventy-five dollars of the amount now due the estate of Stephen H. Dodd, deceased, from the estate of Samuel T. Dodd, dec'd, and the balance of one hundred dollars to be paid when the next dividend comes due, which total amount you will charge to the estate of Stephen H. Dodd, deceased. Letitia A. Dodd."
A close study of these memoranda Indicates that the accounts, stated roughly, stood thus:
| Land sold by the executor a in Stephen's lifetime | $ 653 50 | |
| After his death | 985 00 | |
| Total | $1,638 50 | |
| Debts paid by Stephen, as per Van Orden's memorandum | $167 31 | |
| Interest by Calvin Dodd | 26 57 | |
| Advanced by Calvin Dodd | 108 35 | |
| Interest | 29 02 | |
| Calvin Dodd's charges | 100 00 | |
| Riker's bill | 94 00 | |
| Total | 525 25 | |
| Which deducted from | $1,638.50 | |
| leaves in the executors' hinds | $1,113 25 |
With regard to the release from Mrs. Letitia Dodd, widow of Stephen H., and her daughter, the now complainant, it purports to be in consideration of one dollar; and the proof is clear that nothing was paid for it The evidence of Mrs. Lindsley, the complainant, upon this subject, was given in such a manner as to command belief in the honesty of the witness and reliance in the accuracy of her evidence. At the date of its execution she was just past 21 years of age, was living with her mother, and engaged in teaching a public school in the city of Orange about a mile from their residence. She was called upon at the schoolhouse, during school hours, and while in the midst of her school duties, by Mr. Van Orden and Mr. E. D. Pierson, and asked to sign the deed in question. She was told by one of them that her mother had already signed it. She had just commenced teaching that school, and was agitated and excited. No previous appointment had been made for that purpose, nor had the subject been previously mentioned to her by anybody. As a reason for wishing the release signed, Pierson said to her, in Van Orden's presence: "Mr. Pierson said that Mr. Van Orden wished to make some improvements on the property, and that he could not make them without my signature, and told me it was to my interest that these improvements should be made, and wanted me to understand distinctly that it did not cut me off one cent. Those were his exact words; and he reiterated that remark to me in the aisle as he passed out. He said: 'You understand that this don't cut you off one cent.'" And, again, on cross-examination: "Q. You say he told you it would not cut you out? A. He told me it would not cut me off one cent. Q. Then what did you think you were signing? A. I thought I was simply giving Mr. Van Orden permission to go ahead and improve the property; that was the idea I had." Now, if we give full effect to all the foregoing evidence, and draw every inference it will bear in favor of the defendant, it still falls short of showing that in December, 1873, when the old mortgage was canceled, it had been fully paid. This would be the result leaving out of view the fact that the new mortgage for one-half the amount was given back at the time of its cancellation. Taking that into account in connection with the clause in the will of Samuel Tyler Dodd providing for dividing the estate when the youngest child attained majority, I think it clear enough that the cancellation of the old mortgage and the giving of the new one were brought about in this wise: Van Orden was able to satisfy the executors, or rather Calvin Dodd (for the evidence shows that he was the acting executor), by the production of the releases from the four children, given for a consideration, or by other means, that $1,500 was all that was due, and the new bond and mortgage were given for that amount, and that it should have been, and but for the failure to record it and the insolvency of Van Orden, would have been, a valid security for that sum.
In the next place, the defendant relies upon great lapse of time, and pleads the statute of limitations. It will be observed that by the will of Stephen H. Dodd, his estate was given to his wife during her widowhood. She did not marry a second time, and died October, 1892, less than six months before the present bill was filed. Up to that time the present complainant had no right at law to sue the executors or their representatives for the residue of the estate. She may have had, and probably did have, a right to call them to an account in order to ascertain the exact amount and condition of the estate in their hands; and, if she was aware that there had been any loss of the estate by their neglect it may be that she had, as a person interested in the preservation of the fund, the right to come into equity, and compel them to make it good in advance of the maturity of her right of enjoyment. But, if that is so, I still do not see how she can be said to be in laches in not pursuing such right before she knew of the default out of which it arose. And it is clear that she had no knowledge ofthis default until the unrecorded mortgage was found, in July, 1889. It is abundantly clear, as before remarked, that neither the complainant nor her mother ever knew anything definite about the details of the dealings with the two estates. They saw the two wills, and understood that the right, whatever it was, of the present complainant, was subject to her mother's life estate, and that the rights of both mother and daughter were subject to the life right of Eliza, the widow of the elder Dodd; and she lived until 1879, having survived Calvin Dodd, the executor, by one year.
Now, the complainant swears that her mother called on Calvin Dodd about her and her daughter's supposed right in this land, and that her mother informed her that Mr. Dodd said that their rights were secured in some unexplained way in the property, but that no settlement of it could be made until the elder widow, Eliza, died. That explanation was probably strictly true, for it is quite probable that Van Orden, who was living on the homestead with his mother-in-law, claimeu that she was entitled to the interest on the .$1,000 during her life. The judgments went against Van Orden in July and August, 1875, and amounted to a small sum, considering the value of the land over and above all incumbrances at that time. They were sold by the sheriff for the comparatively trifling sum of $490, to John A. Van Orden, a brother of Isaac, and one Josiah F. Dodd, a neighbor, but not a relative. Calvin Dodd was a near neighbor. Subsequently, John A. Van Orden conveyed his interest to Josiah F. Dodd. The circumstances of the conveyance render it probable that, if Calvin Dodd had at that time—that is, shortly after the sale —discovered or known that his mortgage was not recorded, he might have saved it by recording it after the judgments, because the land was worth enough to pay both the judgments and the mortgage, and it is by no means improbable that he could have enforced it against Josiah F. Dodd and John A. Van Orden, even after the sale. The circumstances also indicate that Calvin Dodd did discover that the mortgage was unrecorded at a period some time after the sheriff's sale. I infer this from his failure to mention its existence to Mrs. Letitia Dodd in her various interviews with him, in which he put her off until after Eliza's death. Certain it is that, so far as appears, he never did state to Mrs. Letitia Dodd that her claim under her husband's will was satisfied, but always encouraged her to believe that it was still alive, in force, and secure; and equally certain it is that he never disclosed to her the existence of the mortgage. It is impossible to account for the condition of the minds of the mother and daughter, as shown by the evidence, upon any other theory.
After the death of the older widow and life tenant. Mrs. Letitia Dodd, widow of Stephen, prosecuted her inquiries, and therein had the assistance of a competent member of the New York bar, who gave his aid without charge. He had no suspicion of any mortgage, but, after examining the records and getting what information the two ladies could give him, went upon the hope that, under the circumstances, he might make out a case of an equitable interest in their favor in the land; and that the purchaser at the sheriffs sale had notice of it. There can be no doubt that Calvin Dodd occupied in this matter the position of a trustee of an express trust towards the complainant; and it is equally certain that the neglect of duty which led to the loss occurred as early as the time of the recovery of the judgments, in 1876, if not in 1873, the date of the mortgage.
The statute of limitations does not, in express terms, apply to equitable actions. Nevertheless, courts of equity feel bound to follow and apply it in all cases where an action at law is a concurrent remedy (Bank v. Veghte, 42 N. J. Eq. 39, 6 Atl. 278); and also in cases of acquiescence in wrongs for remedy of which the party must come into equity, where the party has acquiesced in the wrong for the statutory period, with knowledge of his rights, and without excuse for the delay (1 Pom. Eq. Jur. § 419). Actions by a cestui que trust against his trustee, where the trust is what is called an express one, cognizable only in equity, are usually not within the statute of limitations as applied in equity, for the reason that, ordinarily, the possession of the trustee is the possession of the cestui que trust. Their attitude towards each other is not hostile or antagonistic, and there is no cause of action to be barred. Dyer v. Waters, 46 N. J. Eq. 485, 19 Atl. 129, and cases. But, if the trustee of an express trust has assumed a hostile attitude against the cestui que trust,—has disavowed the trust, and denied the right of the cestui que trust, or has committed a breach of trust, resulting in the loss of the estate, which has come to the knowledge of the cestui que trust, and has refused to make it good,—then there is a present cause of action by the cestui que trust against the trustee, and the ease so presented seems to me not to be within the rule that the statute of limitations does not run against an express trust. Nevertheless, there are numerous authorities which hold that the statute of limitations does not run in equity against such a breach of an express trust. 2 Lewin, Trusts (Flint's Ed.; 8th Eng. Ed.) *900, *901. Bank v. Heiron (1880) 5 Exch. Div. 319, at page 325: "Where a trustee has a fund in his possession, and wastes it either by neglect of duty or by doing an act not justified, and the cestui que trust comes to recover his money, no time will bar his suit, for it is a claim by the cestui que trust against the trustee for money or property which was in the possession of the trustee, and must be considered as in the possession of the trustee for the benefit of the cestui que trust until the trustee duly dischargeshimself. To such a suit there is no bar by statute." See, also, Obee v. Bishop. 1 De Gex, P. & J. 137, at page 140; Woodhouse v. Woodhouse, L. R. S Eq. 514; Burrowes v. Gore, 6 H. L. Cas. 907; Butler v. Carter (1868) L. R. 5 Eq. 276; Brittlebank v. Goodwin, Id. 545. In this case there is a review of the authorities. The case itself is very much in point with the one before the court, and it has been cited with approval and followed in many other cases. In Re Cross (Harston v. Tenison; 1881) 20 Ch. Div. 109, at page 121, Baggallay, L. J., in his written judgment, said: "With reference to the contention that any claim which the parties interested in the trust estate, whether as trustee or cestui que trust, ever had against Hannah Cross, was barred by the statutes of limitation before the present action was commenced, it is sufficient to state the recognized doctrine of equity that, as between the trustee and the cestui que trust, no time will operate as a bar to the equitable claim of the latter in respect of a breach of an express trust; the second rule of the twenty-fifth section of the judicature act of 1873, which provides that 'no claim of a cestui que trust against his trustee for any property held on an express trust, or in respect of any breach of such trust, shall be held to be barred by any statute of limitations,' is but a statutory declaration of a law which had always been recoguized and administered in courts of equity." See, also, Story v. Gape, 2 Jur. (N. S.) 706; Williams v. McKay, 40 N. J. Eq. 189; Williams v. Reilly, 41 N. J. Eq. 137, 3 Atl. 692. Conceding, however, that for a direct and open breach of trust, avowed by the trustee, and for which he refuses to make amends, and places himself in an attitude of hostility to his cestui que trust, the court ought to apply the rule governing in other cases of equitable wrongs, yet it is entirely clear that such rule will not be applied unless the injured cestui que trust had notice and knowledge of the injury and the right growing out of it Just here is found the radical weakness in the trustees' plea of laches.
It is quite clear in this case that complainant has not knowingly slept on her rights for the statutory period. It is true that if she had employed counsel as soon as she became of age, in the lifetime of both the life tenants, it is probable that such counsel would have discovered the true state of the affair; but I can find no authority for debarring her from relief because she was not diligent in ascertaining just what her rights were when, as here, the mystery surrounding them was due to the neglect of duty of the trustee. It was his duty to keep a record of his dealings with both estates, and he kept none; and to render an account of those dealings either to the cestui que trust or to the court, voluntarily, and he rendered none. The duty to account arose at least as soon as the youngest child of Samuel T. Dodd arrived at age, and that could not have been later than 1871, for the father died in 1849. There must have been some sort of a settlement in 1873, when the old mortgage was canceled and the new one taken. To believe otherwise is to charge Calvin Dodd with utter neglect of his duty. But, if any such settlement was had, no record of it was kept or rendered. It may be, as before suggested, that Van Orden induced Calvin Dodd to act upon the release, for value, given by the four children. Be that as it may, the new mortgage was not recorded, and these helpless ladies were left entirely in the dark as to the condition of their affairs, and for this ignorance the executor was responsible. That being so, it seems to me that it does not lie in his mouth to say to the complainant, "You might have ascertained the facts if you had employed competent counsel."
The result is that the defense of lapse of time fails, in whatever view we take of the case. The complainant had no right at law till the death of her mother, in 1892; and, if she had a right in equity, it was one which it is doubtful, at least, if she was under any obligation to enforce until her mother's death; and she is not in the situation of being chargeable with having knowingly slept on her rights. It follows that the complainant, as the sole legatee of her father, Stephen H. Dodd, is clearly entitled to relief against the answering defendant, as sole legatee of Calvin Dodd, the only one of the negligent trustees who has left any property. The only question is as to the amount which she is entitled to recover. Clearly, she is not entitled to any part of the interest on this fund during her mother's lifetime. For that interest the personal representative of her mother must sue.
The only remaining question is as to whether there is any presumption here that the other children of Samuel Tyler Dodd, the first testator, have any interest in this fund which can or should be recognized and protected in this suit. The bond and mortgage were given to Dodd and Ward, as executors of Stephen H. Dodd, deceased. Prima facie the money belonged to his estate. If his brother and sisters had any interest in it, they should make claim against his estate for it No such claim has ever been made, so far as appears. The evidence shows that they did receive substantial payments from Van Orden. Israel Dodd received a payment from him, in addition to the payment Which he previously received from Stephen H. Dodd, at the time he gave him his conveyance. On the back of one of the exhibits hereinbefore set out are receipts from the other brothers and sisters for shares in the fund, and the release from the four children, which was put on record at the date that the $1,500 bond and mortgage was given, is expressed to be in consideration of $1,000. Such papers as are in the handwriting of Isaac L. Van Orden show a great confusion of ideas, and it is not easy to interpret them. The fact remains thatwhen the $3,000 bond and mortgage were surrendered, and the $1,500 bond and mortgage taken in their place, no money was paid to the complainant or her mother, while the other legatees of Samuel T. Dodd did receive money, and have made no claim for any part of this fund, although some of them had notice of the suit. And I think that the fair presumption is that the whole of this fund belongs to the complainant. In the absence, then, of any defense based on the contrary notion, I will advise a decree in favor of the complainant against the answering defendant for $1,500, with interest from the date of the death of her mother.