Opinion
Spring Sessions, 1840.
W. H. Rogers and J. M. Clayton, for plaintiff.
Rodney and Frame, for defendant.
EJECTMENT for a tract of land in Appoquinimink hundred.
The plaintiff claimed title under William Kennedy. He incepted his title more than forty years ago, under an alienation bond from James Carter to David Kennedy, with accompanying possession, and a devise to Wm. Kennedy in 1803. Wm. Kennedy went into possession and continued in actual possession and the receipt of rents certainly until December. 1827, probably up to the date of his deed to Lore in November, 1830; though, from the character of the premises, and other circumstances, he took but little charge of the land, and received no rents, between 1827 and 1839.
The defendant. Henry Hill, was in possession as tenant under his mother, Sarah Hill, claiming under one James Meredith, who entered into possession about three years ago, peaceably; but, so far as appeared, without any title; and built a small log tenement, which he sold to Mrs. Hill.
On the 5th of May, 1829, Wm. Kennedy took the benefit of the insolvent laws, and executed in the Court of Common Pleas for Kent county, an assignment under seal "to the executors of Es. Needham, and Mason Bailey," in trust for all his creditors, of all his lands and tenements, and all his estate, real and personal. It did not appear that these trustees ever accepted the trust, or acted under it, or that any debts were proved under the assignment. The debts returned by the insolvent, with the exception of a debt due to the executors of Needham, had been since paid by Wm. Kennedy.
The defence set up was, that the legal title to the premises was shown by the assignment in the insolvent court to be vested in the trustees, and out of the lessor of the plaintiff; and this was relied upon as sufficient to defeat the present action.
The plaintiff now offered in reply, a deed from Clement Carter (son and heir of James Carter) to Auley Lore, for the premises in question; which was objected to, and ruled out by the court as not being properly evidence in reply. The plaintiff's case as opened, was an equitable title from James Carter to Mr. Kennedy's father, with long possession; the evidence now offered, was to prove the existence of the legal title in the Carter family down to the present time, and a conveyance of it lay this deed from Clement Carter to plaintiff.
The case then turned upon the effect of the assignment made to trustees in the insolvent court; the plaintiff contending that it was inoperative to clivest Kennedy's title — 1st. Because the assignees had never accepted the trust, nor acted under it, nor had any schedule been filed or debts proved within the year, upon which it could operate. 2. Because the insolvent had since paid his debts, without any sale of the property under the assignment; and 3d. Because he had always continued in possession of the land notwithstanding the assignment.
Rogers, jr., for plaintiff. — The plaintiff has proved a good title in himself; a possession of more than thirty years, under an alienation bond. The defendant, a mere squatter, sets up a defence that the legal title is out of the plaintiff, and in certain persons, who are assignees of William Kennedy, under the insolvent laws. A possessory title is sufficient as against a mere wrong-doer, to recover in ejectment. A defendant who is a mere squatter, and who entered without color of the litle, cannot defend by showing title out of the plaintiff. (4 Johns. Rep. 202; 2 ib. 22; 11 ib. 567; 10 ib. 338; Cro. Elis. 437; 2 Saund, Rep. 112; 1 Chit. Plead, 190.)
But if the defendant may set up this defence, we shall contend — 1st. That no assignment under that act will pass the title, unless it be completed by actual acceptance of the trust, and acting under it. The trust must be accepted and acted under within the year; it is for a specific and not for a general purpose; and if the creditors fail to come in and prove their debts within the year, the object of the assignment is spent and the assignment is void; and the legal estate which was assigned reverts to the assignor. No person can be a trustee unless he accepts the trust. Without the acceptance of the trust, the deed becomes inoperative and void. (9 Law Lib. 33; 10 Pet. Rep. 610.) How is the assent to be expressed by assignees, under the insolvent law? By action under it; by converting the property into cash; rendering accounts; giving bond, c.
Again: this was an assignment to trustees for a particular purpose, the payment of debts payable under it, and this purpose has been performed. If a trust be created for a particular purpose, and the legal estate conveyed for that purpose, when that object is performed the legal estate reverts to the grantor. ( Ros. Ev. 326; 8 Eng. C. L. Rep. 92)
The construction of this insolvent law will be much more strict as between third persons, than between the insolvent and his creditors. 1st. For the purpose of defeating a bona fide purchaser without notice, this assignment ought to be recorded in the county where the land lies. 2d. The trustees were bound to take possession of the land, and the possession of it afterwards by the insolvent is deemed fraudulent as against a subsequent purchaser. ( Roberts on F. Con. 555; Ing. on Insol. 221.) 3d. The assignment is informal in itself, and void for want of certainty as to the trustees, being "to the executors of Ezekiel Needham and Mason Baily, their heirs and assigns." Frame and Rodney, for defendant. — In the action of ejectment the plaintiff must recover on the strength of his own title, and cannot rely in any respect upon the weakness of his opponent's title. He must show a valid and subsisting legal title existing in himself at the date of the demise. The defendant may by showing an outstanding legal title in a third person, or by showing any defect in the plaintiff's title, defeat his action without showing any title in himself. This is the familiar law of Delaware. We need not give a reason for it; but might say it can be found in the respect which the law pays to possession, in regard to real as well as personal property. In the latter it is every thing; almost a title in itself: in the former it JS of so much importance that the law will not allow it to be disturbed by any one who has not a clear legal title existing in himself.
The plaintiff in this case shows a title under William Kennedy, and we answer it by showing that the Kennedy title was, before he made the deed to plaintiff, assigned to certain persons trustees in the insolvent court for the benefit of his creditors. Has the assignment the effect of conveying the legal estate in this land to the trustees, and out of Mr. Kennedy? They contend that it has not — 1st. Because there was not express assent of the trustees and acceptance of the trust. The whole argument on 'this subject is misapplied, and the authorities inapplicable. It and they have reference to mere assignments in pais, between individuals, and not to a judicial assignment under the law. No acceptance of this assignment was necessary by the trustees; they could not do otherwise than accept, at least no refusal or neglect of theirs to act could have the effect to deprive the creditors under the assignment of their interest in it. This would be to enable them to defeat the whole law; and, though the insolvent is discharged by force of the assignment, to give the assignees the power to annul the assignment; and thus annul not only the action of the court but the law itself, which discharges the insolvent only on the execution of a valid assignment. It lies not with William Kennedy or any one claiming under him to deny the validity of this assignment. It is not even competent for a third person to controvert it. It was a judicial act, and cannot be questioned or reviewed in this court or any where else collaterally. If there were no sufficient trustees; no sufficient assignment; the discharge of this debtor was unlawful; yet the court discharged him, and necessarily decided that this assignment was a valid assignment, such as would pass the title to the assignees. The assignees are sufficiently designated; and if either of them is, the assignment is good.
The title was then out of Kennedy by force of this assignment. Has it reverted? and what brought it back? 1st. It is said that the debts were paid; and this brought it back. We deny the fact of payment of the debts; and we insist that the title having been out of William Kennedy, it could not come back otherwise than by re-conveyance. It could not revert, because there was nothing left in the insolvent; the whole legal title passed to the trustees, their heirs and assigns: and it could not result; the idea of a resulting legal estate is a novelty. A trust may result but not a legal estate. Mr. Kennedy may have an equity or a right to have the estate back after payment of debts, but he can get the legal estate back no otherwise than by a reconveyance. There is nothing from which the jury can be called on to presume a reconveyance, for Kennedy proved that there never had been any reconveyance.
2d. That the assignment was not recorded in another county, and that this is a defence for a purchaser on a valuable consideration without notice. The first answer is that this is an equitable defence, not to be urged at law. (1 Harr. Rep. 69.) Second. — It does not apply to such a purchaser if he had the means of notice, or his assignor had notice; and Kennedy here had notice. ( Ibid.) Third. — The law does not require or permit it to be recorded in the recorder's office. It is a record in itself, and as the proceeding of a judicial tribunal, it must be noticed by every one Does it lie in the defendant's power to set up this defence ? The cases referred to on this point are from New York, where it is said that a mere wrong-doer, without claim or title, cannot set up this defence against a party who has been in possession. — On the facts this is no such case. There is no proof that Auley Lore ever was in possession of this land. Neither Lore nor Kennedy have been in possession since 1827. There is no proof that the defendant entered into possession tortiously; as a mere wrong-doer; almost forcibly, as the cases referred to seem to require. The defendant is proved to have entered under Mrs. Hill, who rented it to him. This is not an entry without color of title. And it is proved that Mrs. Hill bought the house of one Meredith, who was in possession eight or ten years ago, and had built the house upon the premises. All the cases cited refer to the case of a mere tortious, if not violent, possession; and not to a defendant coming in peaceably under another also peaceably in possession. (11 Johns. Rep. 567; 16 ib. 190; 1 Ch. Pl. 189-90: Adams on Eject. 28-9, 30-1: 2 T. Rep. 749: 16 Johns. Rep. 197, 200.) The New York decisions on this subject are peculiar; a sort of law of their own.
J. M. Clayton, replied.
By the Court:
The plaintiff in ejectment must recover on the strength of his own title. There can be no weighing of titles between him and the defendant, whose possession is good enough for him until the plaintiff shows a valid legal title in himself. This is the general rule and has been regarded as the settled law of this State, hut it is insisted for the plaintiff that it is not applicable to the case of a party in possession without any color of title, who is to be regarded as a mere trespasser. Several cases have been cited to this effect, and there may be good policy in thus qualifying the general principle which protects a possessory title, but the qualification has not heretofore been admitted in this State, and it seems to be against the principles of the common law. At all events, we do not feel at liberty to apply it to the case of a defendant who is in peaceably under another by purchase, and has a possession of as long standing as in this case.
The question is, whether the plaintiff has shown a valid legal title in himself. Independently of the assignment in the insolvent court he has, for he shows a possession of those under whom he claims, originating, to be sure, in a mere equitable title, but of such duration as gives it the validity of a legal title; being more than twenty years.
We are then to consider the effect of the insolvent assignment.
The act of assembly declares, that such a deed of assignment shall pass to and vest in the trustees all the property and estate of the petitioner at the time of executing the same, real and personal, and the trustees shall take possession of the same, and sell and convey it for the purposes of the trust: and the proceeds shall be applied to the payment of such claims as shall be exhibited to the trustees within one year; and the overplus, if any, shall be returned to the petitioner.
The plaintiff insists that this deed of assignment shall not be held valid to establish a legal title to the premises in these trustees, after this lapse of time and under the circumstances of this case, so as to prevent his recovering the land, claiming under a subsequent deed from the insolvent; 1st. because the trustees never accepted or acted under the trust; no debts have been proved within the year, and there is nothing now for the trust to operate upon, and all the debts returned in the schedule, but one, have been otherwise paid: 2d. that the plaintiff is a purchaser for a valuable consideration, without notice of the assignment, which has never been recorded in the county where the lands lie: 3d. that the objects of the assignment never having been acted on, and being now impossible, the assignment itself is inoperative for any purpose; at least that public policy, as in the case of an outstanding mortgage, will not allow a third person to set up such a title in ejectment to defeat the title of the assignee or mortgagor.
In general no person can be a trustee unless he accept the trust, and take a vested interest in the subject of it, ( Willis on Trustees, 33, 9 Law Lib.;) but the estate vests in trustees under the insolvent law by the mere act of assignment; and their refusal to accept, though it may create the necessity of appointing others, cannot divest the estate or deprive the creditors of their interest in it. This results from the nature and objects of their appointment. They are not trustees with an interest, but with a mere authority; the agents of the law for distributing the insolvent's assets, and the depository of the legal title to all his lands, which must necessarily be divested out of him, before he is entitled to his discharge. No act of the trustees is necessary to the vesting of the land; and their refusal to accept the trust cannot divest it. ( Ingraham on Insolvency, 220; Gray vs. Hill, 10 Serg. Rawlc, 436; 13 Eng. Com. Law Rep. 466; 4 Bing. 348, Doe dem. Palmer vs. Andrews.)
The act of assembly ( Dig. 310,) makes this assignment a record of the court in which it is executed, and expressly gives to it the effect of a deed to transfer title. Neither that act nor any other law of the State requires, nor even authorizes, it to be recorded in the recorder's office; and though the law may be defective on this subject, and titles may be endangered, yet this is a consideration for the legislature, and not for us. As a public record it is notice to the world of the assignment of the title. In Pennsylvania, since the case of Gray vs. Hill, the legislature has provided, that although the legal title vests in the trustees by the assignment, yet that a purchase from the insolvent of real estate situate in any other county, made bona fide and for a valuable consideration, and without notice, before the recording the assignment in such county, shall be good notwithstanding the assignment. ( M'Kin. Dig. 467.) Such a provision would be a very proper one in our law, but we do not think it competent for this court to supply it by a construction of the law.
The only remaining question is, whether the title still remains in the trustees, where it was placed by the assignment. The object of the law in vesting the title in them is for the purpose of sale and conveyance by them; there is no reverting or resulting of the title to the insolvent contemplated by the purposes of the act, and no provision made for any other contingency than that of a sale. There can be no doubt that all the title of Wm. Kennedy passed to the assignees by his assignment in the insolvent court, and the purpose of that assignment could be executed only by a sale and transfer of the title to others: no interest remained in the insolvent, for it was only on his parting with all his interest that he obtained his discharge; there was nothing therefore, which in contemplation of law and by the act of the law could remain in or revert to the insolvent, after the purposes of the trust were executed, except the overplus of proceeds of sale which is to be returned to him by the trustees under the provisions of the insolvent law. And in case the debts are paid, or the purposes of the trust answered, otherwise than by a sale of the land, we do not see how that of itself, without any act of the trustees of reconveyance, and there being no provision to that effect in the insolvent law — we do not see how that can revest the title to the land in the insolvent. It is not like the cases cited from 1 Barn. Cres. 342, and 5 East 171, where the question was not whether a fee vested in trustees for purposes requiring a fee was to be divested and returned to the grantor on the execution or expiration of the trust; but whether, the purposes of the trust requiring less than the fee simple, the construction should not be that the trustees took but a chattel interest, or an interest commensurate with the purposes of the trust, and leaving the remainder, that is the legal title, to vest in the devisee over so soon as the trusts were satisfied. The question in the latter case is stated to be whether the trustees took an estate in fee or a chattel interest; and whether, after the trusts were satisfied, the devises over could not take effect as legal limitations. And the decision was, that where the trusts could be answered by a, less estate than a fee simple, a greater interest than was sufficient to answer that purpose should not pass to them; but that the uses in remainder limited on such lesser estate so given to the trustees, should be executed by the statute of uses as legal limitations. The present case presents no questions of that kind. The assignment to the trustees conveyed the fee simple. Apart from the act of assembly, such a transfer would have that effect, for a conveyance to trustees for purposes requiring a fee will carry the fee; but the act of assembly is express that the deed of assignment shall pass to and Test in the trustees all the property and estate of the insolvent at the time of executing the same; with power to sell and convey the same.
The legal title to these premises being thus out of Wm. Kennedy by his deed of assignment, that title could not be restored to him, or reinvested in him, otherwise than by the act of the trustees, or of this or some other court annulling the assignment, or ordering a reassignment. We know of no principle upon which it can be construed to be reinvested in him, except that a jury might presume a reconveyance after a sufficient lapse of time, if such presumption were not rebutted, as it has been in this case.
The title of the lessor of the plaintiff then fails. He took nothing by the deed of Mr. Kennedy, for Kennedy had, at that time, nothing to convey. And this is a sufficient defence in the action of ejectment, where the plaintiff must recover on the strength of his own title.
It is true, that our courts have refused to permit a defendant in ejectment to set up an outstanding title in a mortgagee, but this is by force of the act of assembly, which regards a mortgage merely as a security for the payment of money, and not as a conveyance, of the land. Though a conveyance in form, it is nothing more than, a lien on the land, and not even a lien until it is recorded. The land may be still executed and sold as the property of the mortgagor, subject to the mortgage lien; and it cannot be taken as the property of the mortgagee. Considering it thus in regard to third persons as no conveyance of the legal title to the land, this court has properly held that it was no bar to the suit of a person deriving title under the mortgagor and claiming the land from a stranger. But even in that case, I apprehend it would be a bar in England, and a reconveyance would be necessary to revest the title in the mortgagor.
Verdict and judgment for defendant.