Lady Ensley Coal, Iron & R.R. v. Gordon

DOWDELL, J. The bill in this case was filed- on the 13th day of May, 1904. According to its averrments and prayer for relief it has for its object primarily the enforcement of an alleged trust. No express trust is shown, but it is claimed that a trust exists, arising out of an executory agreement made between the complainant, Eugene C. Gordon, and associates named, of the one part, and David Pounders and his wife, of the other part, in reference to certain described real estate. The executory agreement was in writing, and is attached as Exhibit A to the bill, bearing date of May 9, 1881. After the execution and delivery of said executory contract Pounders and his wife conveyed said property described in said executory contract, together with other property, to Enoch Ensley and his associates, by deed of date of November 21, 1882, and recorded December 1, 1882. It is averred that Ensley at said time had actual and legal notice of said executory contract by the registration of said contract, and also that the conveyance to Ensley and associates expressly stipulated that it was subject to said executory contract. It is further averred and claimed that the- rights and equities of the complainant are paramount to the rights and claims of the said Ensley and his associates and of those holding under them, and it is further averred, rather as a conclusion of the pleader than the statement of fact, that those subsequently deriving title from said Ensley and associates took and now hold the property in trust, to recognize, acquiesce in, and comply with the said right of your orator. We say rather as a conclusion than a statement of fact, since the bill shows that said Poun-ders and wife, in pursuance of the executory contract of May 9, 1881, and subsequent to their deed to Ensley, and on June 17, 1884, executed a deed to the complainant, purporting to convey the legal title to the property [535] in question to tbe complainant, and it is also shown that subsequent to this time Ensley and his associates conveyed by deed to the Lady Ensley Goal & Iron Company, a corporation whose name was afterwards changed to Lady Ensley Coal, Iron & Railway Company, and from this latter company, the respondent the Sloss-Sheffield Steel & Iron ■ Company, a corporation, derived its title through the chancery court of Jefferson county, in a receivership proceeding in that court by creditors of the Lady Ensley Coal, Iron & Railway Company against said corporation. It is manifest from the statements of the bill that the only trust that existed, if any, ivas a constructive trust arising out of the executory agreement between the complainant and Pounders and wife, and under the statements of the bill, if Ensley and associates took the property in recognition of the trust, it is equally clear that they ignored and disregarded it when they conveyed the property on the 3d day of April, 1884, to the Lady Ensley Coal & Iron Company. — In Smith v. Gordon, 136 Ala. 495, 34 South. 838, in passing upon this same exe-cutory agreement, of Pounders and wife of May 9, 1881. it was ruled that by it the legal title to the property in question did not pass, and that it was nothing more than an executory contract by the Pounders to convey the mineral interest in the land upon the fullflllment of certain conditions by the Gordons. The retention of title by Pounders was in the nature of a security to insure the strict performance of the contract by the Gor-dons according to its terms. It may he said that he was in a sense a trustee for the Gordons. But, as we have said, if a trust existed, it was not an express trust, but one created by operation of law, under the broad doctrine that equity regards and treats as done what in. good conscience ought to be done. [536] The execution of the deed to Ensley and associates was a breach of the executory contract by Pounders, notwithstanding the stipulation alleged t-o be contained in the Ensley deed. Pounders thereby rendered himself unable to carry out the terms of his executory contract with the Gordons. It is not averred that any such stipulation as that contained in the Ensley deed was also contained in the deed from Ensley to the Lady En-sley Coal Company. There can be no question but that upon fulfillment of the conditions named in the execu-tory contract by the Gordons, under the statements of the bill,, a right of action existed in the Gordons, as much so as at the time of the filing of the present bill. Yet to the date of the filing of the present bill, since the execution of the deed by Pounders to Ensley and associates on May 9, 1881, and the execution of the deed by Ensley to the Lady Ensley Coal & Iron Company on April 3, 1884, more than 20 years had elapsed. It is not averred in the bill when the Gordons performed the conditions stipulated in the executory contract to be performed by them; but in the construing of the bill on demurrer the presumption is, from the averment that the Pounders, in pursuance of the executory contract with the complainant and associates, executed a deed to them about June 17, 1884, that they (the Gordons) performed the conditions imposed upon them prior to this latter date. No facts are stated in the bill excusing the unreasonable delay in commencing the suit. The statute of limitations is applicable to bills in chancery, and may be asserted on demurrer, when shoAvn on the face of the bill. . Civ Code 1896 § 674, and authorities cited in note. The trust being a constructive trust, the statute runs against it, and the appellee’s rights to enforce the trust were barred after the expiration of 10 years. — Nettles v. Nettles 67 Ala, 599; Waller v. Jones, [537] 107 Ala. 381, 18 South. 277. But, apart from the question of the statute of limitations, we think the complainant was guilty of such laches in the long delay, as' shown by the bill, in the assertion of his alleged rights and equities, as to prevent him from a recovery. Twenty years or more had elapsed since a right of action accrued, and in the meanwhile others had acquired rights.— Montgomery Light & Power Company v. Lahey, 121 Ala. 136, 25 South. 1006; Rives v. Morris, 108 Ala. 527, 18 South. 743; Haney v. Legg, 129 Ala. 619, 30 South. 34, 87 Am. St. Rep. 81; Nettles v. Nettles, 67 Ala. 601. AYe are of the opinion that the chancellor erred in overruling the respondent’s demurrer to the bill, and his decree will be reversed, and one here rendered sustaining the demurrer. Reversed and rendered. Tyson, C. J., and Anderson and McClellan, JJ., concur.