THIS was an appeal from the District Court of the United States for the Middle District of Alabama.
The case is fully stated in the opinion of the court.
It was argued by Mr. Johnson and Mr. Butler, for the appellants, and Mr. Bradley and Mr. Davidge, for the appellees.
The counsel for the appellants, after stating the case, proceeded:
It appears, from the record, that the defendants, objected to the reading of the papers of the marriage settlement, because the affidavits of the complainants did not make out such a case of the loss or destruction as would dispense with the production of the original. The objection was sustained by the presiding Judge. By the ruling of the Judge, the complainants' bill was ordered to be dismissed.
It is submitted, that the ruling of the Judge was erroneous; and if it should be sustained here, the complainants must fail in any attempt to recover their rights, because they cannot be allowed to introduce the only evidence on which they rest.
The evidence offered by the complainants, and rejected by the court, was both competent and sufficient to satisfy a Judge, when discretion must, on such questions, regulate his judgment; and especially so in the chancery jurisdiction of the court, where it is usual to receive with a liberal latitude, sub modo at least, all evidence that can lead to a competent judgment on the rights of the parties. The bill was filed by those who were seeking their rights by discovery, and against the acts of those who had a temptation to destroy the evidence against them. But it is submitted, that the question has been authoritatively ruled by the court; and, according to the adjudged cases on the same subject in Alabama, where this case was tried, the evidence rejected should have been admitted. Tayloe v. Riggs, 1 Pet. 591, 596; S. C. 9 Warton, 483; Winn v. Patterson, 9 Pet. 663, 676; S. C. 5 Pet. 233, 240, 242; Sturdevant v. Gaines, 5 Ala. 435; Slerge v. Clapton, 6 Ala. 589.
If the evidence rejected by the Judge, as to the reading of the marriage settlement, should have been received, as we think it should, then it may become necessary to bring in review the questions made by the defendants' answer.
Was the marriage settlement duly and legally recorded in South Carolina. By the laws of South Carolina (see act of 1786 and 1823) marriage settlements, according to the first act, are required to be recorded in the office of the Secretary of State, and by the second act, also, in the office of Register of Mesne Conveyances, within three months after their execution, otherwise they will be regarded as void at law. The marriage settlement, in this case, was executed on the 20th May, and if recorded before the 20th of August, would have been duly recorded, according to the requirements of the act of 1786. It appears from Guiguard's official certificate, that the paper was recorded in the Register of Mesne Conveyances, on the 31st day of July, 1816, the day on which it was proved by Young, one of the witnesses to it.
The certificate of Arthar, the deputy Secretary of State, is not definite as to the time when the paper was recorded in the office of the Secretary of State. There is no doubt, however, that it had been first recorded in that office, as such should have been done, according to the act of 1786, (which is the only act affecting this case). We think such must be the conclusion of the court, as scarcely any other fair inference could be drawn from the premises. If such should be the holding of the court a second proposition arises, was it necessary that it should have been recorded in Alabama?
According to the tenor of the decisions of this court, it was not necessary that there should be such a recording to protect the rights of the complainants against the claims of a subsequent purchasers.
'A marriage settlement or deed, in favor of the wife, duly executed and recorded in Virginia, will be good against the creditors in the District of Columbia, although they may have had no express notice. Bank v. Lee, 13 Peters, 119, 120. Such has been the current of decisions in South Carolina and Alabama?
But the complainants have a right, from the proof in the record, to take refuge in the equity of their rights.
According to the evidence of W. R. Hamilton, Goree, the testator of defendants, who seems to have been a shopkeeper, purchased the slave in question, with express notice of complainants's title, by the marriage settlement of their mother with Yancey. The testimony of Hamilton was duly taken; for, if defectively taken in the first instance, the defendants had an opportunity, and were required, to retake it, if they chose, by an express agreement of the parties.
Such being their condition–that is, purchasers with express notice–he, Goree, took the property subject to the acknowledged claims of the complainants, and having taken under their title, he should not be allowed to claim against it.
The doctrine of notice is well established. He who acquires a legal title, having notice of the prior equity of another, becomes a trustee for that other to the extent of his equity. 1 Cranch, 100.
If a man will purchase, with notice of another's right, giving a consideration will not avail him. 2 Bridgman's Digest, Vendors and Purchasers, IX. 691.
With respect to the operation of the statute of limitations upon cases of turst in equity, the distinction is, if the trust be constituted by act of the parties, the possession of the trustee is the possession of the cestui que trust, and no length of such possession will bar; but if a party is constituted a trustee by the decree of a court of equity founded on fraud, or the like, his possession is adverse, and the statute of limitations will run from the time that the circumstances of the fraud were discovered. 2 Bridgman's Digest, 252.
In the case of Miller v. Kershaw, marriage settlement was held void at law; in equity, however, the party claiming under the settlement, would be protected where the purchaser had actual notice of the settlement. Bayley's Equity, 481.
If the foregoing propositions can be sustained, another question arises, and that is, can the defendants claim to be protected by the statute of limitations? The complainants allege, in their bill, that they were minors at the death of their mother, and could not assert their rights, under the marriage settlement, as remaindermen, after the death of Yancey, their step-father. They aver, furthermore, that they were ignorant as to the time of Yancey's death, from their distant and separated situations. It is also stated expressly in their bill, (and it is a bill of discovery,) that they were not informed as of the time when a fraud had been committed upon their rights, to wit, when Yancey sold, and Goree purchased, with a full disclosure and knowledge of their title. This reduces the parties to the relation of trustee and cestui que trust, and exempts the complainant from the operation of the statute of limitations.
Purchaser from mortgagor, with notice, cannot claim by possession against a mortgage. Thayer v. Craner, 1 McCord, 395.
Court of Equity, bound by statute, upon legal title and demands, except in cases which are excepted upon purely equitable principles, such as trust, fraud, &c. Van Rhyn v. Vincent, 1 McCord, 314.
In cases of fraud, it runs from the time the fraud has been discovered. Id. 4 Dess. Rep. 480.
If one intrudes upon the rights of an infant, and takes the profits, he will be treated as guardian. His character is fiduciary; the statute of limitations is inapplicable; and lapse of time will not bar account. Goodhue v. Barnwell, Rice, Equity, 239.
The ruling of the Judge below was evidently in reference to a single question, in which he clearly was in error. But, independently of his decision, it may become the plaintiffs to satisfy this court this, if he had all these questions before him, the defendants, in any point of view, would have been entitled to a decree in their favor.
Therefore, it becomes the complainants to show that they were entitled to a decree in their favor, upon the ...