Kemp v. . Kemp

RuffiN, J., after stating the case. We think the cases of Lord v. Beard, 79 N. C., 5, and Lord v. Merony Ib., 14, settle definitely, the question of jurisdiction in this case. There is no pretence that any deed has been executed to the purchaser of the land, sold under the order of the court, by any authorized servant of the court and under its permission, and until that be done, the land continues to be in custodia legis, and any relief that may be needed in reference to it, or the purchase money, must be sought in the original proceeding. Conceding it to be true as declared by his Honor that upon the coming of age of the plaintiff Elizabeth, and by reason of the manner of treating her interest in the bond, given for the purchase money of her land at the time of the execution of the marriage settlement, it ceased to be realty, and became personal property, it is still true, that it was her separate estate, settled upon her by expressed deed, and capable of being disposed of only under some power bestowed upon her in that deed. In the case of Hardy v. Holly, 84 N. C., 661, the court held it to be the law of this state, that a married woman is to be *497 deemed a feme sole, as to her separate estate only to the extent of the power conferred upon her in the deed of settlement, and that if no power of disposition be given in that instrument, she is altogether without such power. It is not necessary that we should go so far in this case, for, granting, upon the strength of the authority of Frazier v. Brownlow, 2 Ired. Eq., 237, as explained, in Knox v. Jordan, 5 Jones Eq., 175, that the agreement made between Mrs. Kemp and husband on the one part, and her trustee on the other, and under which she was to take from the latter a tract of land in discharge of her demands upon him, could have had the effect to create a charge upon the income to he derived from her separate estate, still, we suppose, that such a result would hardly under the circumstances have given effect to the intention of the parties. By the terms of the deed, making the settlement, her interest in the property is expressly limited to a life estate, and beyond that (even if to that extent she may do so) she has no power to charge the property itself, or to anticipate its profits. So much is due to the will of the parties as expressed in the deed, and to the rights of the ultimate re-maindermen, whether they be her children or those who™ may, at the time of her death, stand in the relation of heirs-at law to her. We take it that it was this regard to the rights of such-remaindermen which dictated the order of fall term, 1859;,. directing the master to collect forthwith the whole amount of' the purchase money and inhibiting any deduction therefrom, on account of payments made to, and receipts given, by the trustee, and also the succeeding order of fall term,., 1863, which was so careful to express the exact amount of. fl20G, with interest, to be paid by the purchaser, to entitle-him to have a eonveyance of the land. But whether or not this be so, and supposing that the rights of the parties ultimately to be interested, may have been then overlooked,. *498 they are now brought to the attention of the court and must be protected. This does no injustice to any one, for the defendant Fitz Randolph had notice of the settlement, since it is expressly referred to in the said order of fall term, 1863, whereby he was himself directed to pay the amount of the purchase money to his co-defendant Joseph R. Kemp, as her trustee under her marriage-settlement, and this surely was enough to put him upon inquiry as to the terms of the settlement. To take in payment of -a debt due him as trustee, the surrender of a debt due from himself individually, was a breach of trust on the part of the defendant Joseph R., and the defendant Fitz Randolph knowing the relation he bore the parties, and the origin of the note, must be deemed to have co-operated in that breach, and in such case, much less than actual and particular knowledge in detail will be sufficient to convert him into a trustee for the party attempted to be defrauded. Bunting v. Ricks, 2 Dev. & Bat. Eq., 130. It may be however that he acted without any actual dishonest intent, but that relying upon the relationship and good feeling 'then subsisting between the parties, and the abilit}7' of the trustee to make good the amount to his cestui que trust, he acted without giving that scrutiny to the transaction which otherwise he might have done, and perhaps should have doue. Taking this view of the case, we do not feel at liberty to withhold from the defendant Fitz Randolph all aid in the premises, as we should do, if satisfied that he had purposely co-operated with a dishonest trustee in a breach of his trust. But we rather hold that he is entitled to be subrogated to the claim of the plaintiff Elizabeth, upon the tract of land agreed, in 1860, to be conveyed to her by her said trustee, and of which she has been possessed since that time. The result of our deliberations as to the rights of the parties in this cause is, that the plaintiff Elizabeth is enti- *499 tied to have the purchase money due her, for the land sold under the decree of the court, declared to be a lien upon that land, in the possession of the defendant Fitz Randolph, or any one claiming under him. That the rents of the land occupied by her husband and herself since 1890, under the parol agreement of purchase from her trustee, be treated as a charge upon the income, arising from her separate estate, which is or ought to be in the hands of her said trustee, but not to exceed said income, so as to be a charge upon the principal of such separate estate; and that the land, so agreed to be conveyed to her be sold by virtue of such agreement, and its proceeds applied in exoneration of the land purchased at the clerk and master’s sale by the defendant Fitz Randolph. As to the amount of annual income that ought to be due the plaintiff, and the rental value of the land occupied by her since 1860, the necessary inquiries will be made, and the cause will be remanded to the end that the proper accounts may be taken and other proceedings had in accordance with this opinion. In taking the account, the amount of principal and interest due on the bond for the purchase money at the date of the marriage settlement, shall be treated as the true interest bearing principal. It may be that the superior court will deem it most prudent to select a new trustee for the plaintiff Elizabeth. . Per Curiam. Judgment accordingly.