Hagan v. Varney

Mr. Justice Bailey delivered the opinion of the Court: It seems to us to be very clear, that the construction put-up on the deed from Lucy J. Varney to Lydia M. Varney by the Circuit Court is the correct one. The deed, though conveying to the grantee and her heirs the entire legal estate, recites as a consideration, the sum of $1, and the faithful performance of the trusts therein mentioned, and in the habendum clause, in which the trusts referred to in the premises ■of the deed are fully set forth, it is provided that the grantee .and her heirs are to have and to hold the land conveyed, “in trust for the following purposes,” etc., and among the trusts and purposes declared is the following: “Upon the further trust to convey said property in fee simple, by good and sufficient deed, to such children as aforesaid, (that is, the issue •of the grantee’s marriage with Bowman Varney), upon the ■death of both the party of the second part and her husband.” Here is a clear and manifest creation of a trust, of ;which the grantee’s children were to become the beneficiaries, after the -death of both their parents. We have attentively considered the suggestions of counsel in support of the view that no trust was created, but that the conveyance was merely upon condition subsequent, and are not impressed with their soundness. It is not important, for the purposes of this decision, to attempt to define with ae•curacy the nature of the beneficial estate vested in Lydia M. Varney and her husband during their joint lives and during the life of the survivor of them. Whether the deed is to be ■construed as creating a trust for their benefit during that period, or as vesting in them a life estate, subject to the ■condition that during that time they should suitably support ■and educate their children, is no longer material. Those ■clauses, however interpreted, relate to interest's which terminated on the death of the grantee and her husband, and are therefore to be regarded as functus officio, and as no longer of •any importance in determining the equitable rights which, on the death of both the grantee and her husband, became vested in their children. It is a principle too well settled to require citation of authorities, that no particular form of words is necessary to •create a trust. Whenever an intention to create a trust can be fairly 'collected from the language of the instrument and the terms employed, such intention will be supported. Fisher v. Fields, 10 John. 494; 2 Story’s Eq. Juris, sec. 980. Here the language of the deed clearly indicates an intention that upon the death of both the grantor and her husband, the title should be held in trust to be conveyed to their children. It is difficult to see how' a trust in favor of these designated beneficiaries could be more clearly and positively declared. But it is said that, as the conveyance was to be made to their children upon the death of both Lydia M. and Bowman Varney, it is a trust impossible of performance, and must therefore be held to be void. This contention, though put forward with much apparent confidence will not stand the test of examination. Of course if the conveyance to their ■children was necessarily to be made by Lydia M. and Bowman Varney in person, and if it could' not be made, consistently with the terms of the trust, until the death of the survivor of them, it of course involved an impossibility. A conveyance by them, if made at all, must be made in their lifetime, and not at or after their death. As actually happened, Lydia M. Varney, in whom the legal title was vested,'died nearly three years prior to the death of her husband, and of course she -could not execute a conveyance to her. children at her husband’s death. But it was not impossible for Mr. and Mrs. Varney, in their lifetime, to execute a conveyance which would be effectual to vest the legal title in their children upon the death of the survivor of them, and we are unable to see why the trust might not have been properly executed in that manner. But even that was not necessary. There is nothing in the ■deed requiring the conveyance to their children to be made by Mr. and Mrs. Varney in person. The legal title was vested not in Mrs. Varney alone, but in her and her heirs, and the manifest intention shown by the declaration of trust was, that if Mrs. Varney should die leaving her husband surviving her, the legal title should pass by descent to her heirs, to be held by them upon the same trusts, viz., for the use and benefit of Bowman Varney during the residue of his natural life, and at his death, to convey the legal title to the children. Such would have been the situation of the trust if no conveyance of the land had been made by Mrs. Varney in her lifetime. The instant the fact is recognized that the trust was imposed, not upon Mrs. Varney alone, but upon her and her heirs, all practical difficulty in the way of its execution according to its-terms instantly disappears. The defendants having taken a conveyance of the land from Mr. and Mrs. Varney, they took it burdened with the same trust, and the right of the complainants to a conveyance having accrued by the death of both their parents, the defendants now hold only the mere naked legal title, the entire beneficial estate being in the complainants. Nor are the defendants entitled, as against the complainants, to the position and rights of bona fide purchasers of the-land for value. The fair inference from the evidence undoubtedly is, that they were grossly deceived as to the condition of the title. Their grantors represented themselves to be-the owners of the land in fee, and the abstract of title furnished by them so far as it went, showed that such was the character of their interest. The defendants purchased supposing that they were obtaining a perfect equitable as well as-legal title, and they paid the fair cash value of the land, and there is no evidence that they had any actual notice of any of the trusts declared in the deed to their grantors. But there-is no rule of law by virtue of which these facts can be charged against the complainants. They had nothing whatever to do-with the transaction, and at the time most 'if not all of them were minors. Furthermore, the evidence of their equitable-rights was on record, and the defendants were charged with constructive notice of it. Upon no principle can it be held that their interests were in any degree affected by the defendants’ purchase, however much the defendants may have been deceived, or whatever may have been their' good faith in supposing that their grantors had a perfect title. The defendants were doubtless entitled to their remedy against their grantors for a breach of the covenants in the deed, and they may perhaps have been entitled to a remedy against the parties who compiled the abstract of title, for negligence in failing to give a proper statement therein of the trusts declared in the deed to the defendants’ grantors. But none of these remedies are available in their litigation with the complainants. Here they must be held to have taken their deed with notice of those trusts, and their title must therefore yield to the superior equities- of the complainants, who are the beneficiaries of those trusts. But counsel finally insist that, even if the complainants are entitled to have the land conveyed to them, they should be-charged with the amount of the mortgage thereon which the defendants have paid and discharged, and also with certain-moneys which the defendants have been compelled to pay to redeem the land from tax sales made prior to their purchase. The theory upon which this contention seems to be based is, that the redemption from the tax sales having been made for the preservation of the fee, and the indebtedness for which the mortgage was given having been incurred in placing permanent improvements upon the land whereby the estate coming to the complainants was largely increased in value, it is but equitable that they should be charged with expenditures thus made for their benefit. In this view however we are unable to concur. Between the complainants and defendants there is no privity of contract, and the right therefore to charge thése expenditures against the complainants can not arise from any contractual obligation into which the complainants have entered. Whatever rights then the defendants may have in the premises must arise solely from the conveyance to them from Mr. and Mrs. Varney. It may be admitted that by that conveyance, they obtained whatever rights or equities, as against the complainants, their grantors had, so as to be entitled to be subrogated to them, and to enforce against the complainants any claim growing out of these expenditures which their grantors might have done, if no conveyance of the land had been made. The question then is, whether the defendants’ grantors, or their legal, representatives, could have enforced against the complainants a claim or lien for moneys expended in improvements on the land, or in redeeming it from tax sales. So far as this question is concerned, Mr. and Mrs. Varney and their children Occupied equitable positions closely analogous to those occupied by life tenants on the one hand, and those in whom is vested the remainder in fee on the other. The rule is well settled that the burden of paying current taxes is upon the life tenant rather than upon the remainder man, and the life tenant can not, by paying taxes, or by redeeming from tax sales where he has allowed the land to go to sale for taxes, create a claim which he can enforce against the remainder man. If in this case, Mr. and Mrs. Varney had redeemed from the tax sales themselves, they would have merely discharged their own legal obligation, and we are unable to see how the defendants, after having purchased their title and thereby assumed their liability as to taxes, are in any better position in this respect than were their grantors. Nor can a life tenant, by placing permanent improvements on the land, however much they may enhance the value of the estate, create any charge for the moneys thus expended against the remainder man. Such improvements must be deemed to have been made by the life tenant for his own benefit and enjoyment during the pendency of his own estate, and upon the termination of the life tenancy, they being a part of the realty, pass as such to the one in whom the remainder is vested, and he takes them without any liability to recompense the life tenant for his expenditures. These well known principles applicable to the relative rights of life tenants and remainder men would seem to be equally applicable here. Mr. and Mrs. Varney, the life tenants, could ' not, by expending money in improvements and the payment of taxes, create a charge against their children, who were entitled in equity to the remainder. Nor have the defendants, by purchasing the estate of the life tenants, and coming in under them, placed themselves in any better position in this respect than that held by their grantors. In our opinion the decree properly declares and adjusts the legal and equitable rights of the parties, and it will accordingly be affirmed. Decree affirmed.