In April, 1853, R. made a deed to himself, as trustee, of land
in Georgia for the benefit of his wife and their children during
the life of the wife and, after her death, of such children, which
deed was recorded in May, 1853, in the office of the clerk of the
superior court of the county in which R. resided. In May, 1870, R.
mortgaged to W. the trust land and other land. W. foreclosed the
mortgage, and on a sale, in 1876, bid in the mortgaged lands and
obtained from the sheriff a deed of them and took possession of
them. In 1881, the beneficiaries under the trust deed brought a
bill in equity in the circuit court of the United states against W.
to have the trust established. Among the defenses set up by W. he
alleged that the trust deed was fabricated after the mortgage was
made, and was antedated, and that he had no notice of the existence
of the trust deed at or before the execution of the mortgage of
May, 1870, or before the sheriff's sale in 1876. The Circuit Court,
without making any previous order for the trial of issues of fact
by a jury, had a trial by jury of the two questions above
mentioned. The jury found in favor of the plaintiffs on both
questions. The defendant had bills of exceptions signed to the
rejection of evidence and to the instructions to the jury. The suit
in equity was heard by the same judge who presided at the jury
trial. No motion was made for a new trial. The decree was for the
plaintiffs on the same proofs which were before the jury. On appeal
by the defendant,
Held:
(1) No previous order for a jury trial was necessary, nor any
certificate to the chancellor of the findings.
(2) The submission to the jury of the particular issues was not
an unlawful exercise of the discretion of the circuit court.
(3) The formal exceptions taken on the jury trial will not be
considered by this Court.
(4) The decree was correct on the facts.
(5) The voluntary settlement was authorized by the statute law
of Georgia in force at the time it was made, it having been
recorded within three months, and was good against W., under such
statute law, because of the notice of its existence which he so
had.
In equity. Decree in favor of plaintiffs. Defendant appealed.
The case is stated in the opinion of the Court.
Page 123 U. S. 609
MR. JUSTICE BLATCHFORD delivered the opinion of the Court.
This is a suit in equity, in the Circuit Court of the United
States for the Southern District of Georgia, originally brought as
an action of ejectment by the wife of William C. Riddle, four of
their married daughters, an unmarried daughter, three sons, and two
daughters of a deceased daughter, against J. Benedict Wilson, in
the Superior Court of the County of Washington, in the State of
Georgia, in August, 1881, to recover the possession of 1,500 acres
of land and the mesne profits thereof, alleged to be of the yearly
value of $1,300, since the 1st of January, 1877.
The original petition by which the suit was brought alleged that
in the year 1853, the said William C. Riddle, then being the owner
of the 1,500 acres of land, conveyed the same by deed of trust to
himself as trustee for the petitioners, and that, although the
defendant was in possession of the land, setting up a claim of
title adverse to the title of the trustee and of the petitioners,
Riddle, in violation of his trust, refused to bring suit for the
recovery of the land, or to collect the rents and profits.
In March, 1882, J. Benedict Wilson appeared and disclaimed all
title to the land in dispute, and averred that he had never
received any of the rents or profits thereof. At the same time,
Benjamin J. Wilson, his father, appeared and asked to be made a
party to the suit, claiming to be the owner of the land in dispute,
and was, by an order of the court, made a party defendant. He being
an alien and the petitioners being citizens of Georgia, the suit
was removed by him into the Circuit Court of the United States for
the Southern District of Georgia under the Act of March 3, 1875.
After the removal of the cause, the original petition or
declaration was amended by adding as parties plaintiff William C.
Riddle and the husbands of the four married daughters. The circuit
court then, by an order, placed the case on the equity docket,
Page 123 U. S. 610
and directed that the plaintiffs reform their pleading so as to
present their cause of action in an equitable shape.
In December, 1882, all of the above-named plaintiffs filed in
the circuit court a bill in equity against Benjamin J. Wilson,
making the following averments:
On the 23d of April, 1853, William C. Riddle, in consideration
of natural love and affection for his wife and children, conveyed
to himself, as trustee, for the use, benefit, and advantage of his
wife and their children, for and during the natural life of the
wife "and, on her decease, to such child or children, or
representative of child or children, as she might leave in life,"
two tracts of land in the County of Washington, one of 1,000 acres,
known as the "Brantley Mill Place," and the other of 500 acres,
known as the "Brown Place," to be held forever free from the debts,
liabilities, and contracts of Riddle and all other persons. The
trust deed was duly recorded on the 26th of May, 1853, in the
office of the Clerk of the Superior Court of the County of
Washington. Riddle, after the conveyance, held the lands as trustee
for his wife and children only, and under the terms of the trust
deed. In 1866, Riddle was engaged in planting operations, and in
order to raise money, applied to the firm of Wilkinson &
Wilson, doing business in Savannah, of which the defendant was a
member. That firm, in consideration of consignments of cotton to be
sent to them by Riddle, advanced to him, on his own account and not
for the trust estate, large sums of money. The defendant was
obliged to raise the money so supplied on the credit of his firm,
and to furnish to parties advancing the money to his firm planters'
notes and mortgages and other collateral security. On his request,
Riddle gave a mortgage lien for a large amount upon lands owned by
him in his own right, and in that mortgage included the lands
embraced in the trust deed. Riddle, at the time he created such
mortgage lien, notified the defendant that part of the lands was
trust property, but the defendant replied that it did not matter,
as he only wished to use the lien as collateral. The defendant took
the lien with full notice that it included the trust estate as well
as the individual property of Riddle. In 1870, the first mortgage
was cancelled and a new mortgage lien was
Page 123 U. S. 611
given to the defendant at his request, which lien was taken by
him with full notice that the trust estate was included in the
lien. The defendant, with such knowledge, caused the lien to be
foreclosed, and in 1877 bid in all the lands covered by it,
including the trust estate, and caused a deed of the lands to be
made to him by the sheriff of the county, and took possession of
the trust estate with full notice of the rights of the plaintiffs.
An answer on oath is waived, and the prayer of the bill is for a
decree for the restoration to the plaintiffs of the trust lands and
the recovery of the mesne profits; that the defendant be adjudged
to hold the lands only as trustee for the plaintiffs, and be
required to convey them to Riddle or some other person as trustee,
on the uses and trusts contained in the deed; that the mortgage
lien and the deed to the defendant under the foreclosure be
declared null and void as to the trust estate, and reformed or
cancelled so as to remove the cloud upon the title of the
plaintiffs, and for general relief.
The answer of the defendant to the bill, filed in February,
1883, raises an issue as to the making and recording of the deed of
trust. It avers that after the date of the deed, Riddle continued
in possession of the land as before, claiming and using it and
paying taxes on it as owner in his individual capacity, and not as
trustee. It admits that the firm of Wilkinson & Wilson
furnished money and plantation supplies to Riddle from 1866 to 1870
on consignments by him of cotton to that firm. It avers that at the
close of the transactions, Riddle owed the firm over $80,000; that
he gave no notice of any trust; that he gave a mortgage, as
security for such indebtedness, covering his entire plantation and
embracing the lands in controversy, with others; that he did not,
before or at the time of the execution of the mortgage, notify the
defendant that part of the lands was trust property; that he was
then in possession of the premises, using them as his own; that the
first mortgage was superseded by a second one, which was also taken
without notice and under like circumstances of possession and use
by Riddle; that money and supplies were advanced on the faith of
the second mortgage; that after its foreclosure, the whole
mortgaged premises, except 3,000 acres,
Page 123 U. S. 612
were sold at sheriff's sale under the mortgage
fi. fa.,
and the defendant became the purchaser; that at the sale, no
distinct notice was given of the trust claim or any particular
claim, nor was any specific portion of the premises sold designated
as the subject of an adverse title; that something was said to the
effect that whoever bought would have trouble, but the warning,
such as it was, applied alike to all the premises sold, and there
was nothing to restrict it to the land in controversy or any other
definite part; that the defendant heard nothing then about any
trust; that the 3,000 acres not sold had been claimed, in the mode
applicable to claims under the laws of Georgia, by Mrs. Riddle, and
so could not be sold at that time; that she suffered the property
now in controversy to be sold without interposing any claim to it,
although it was embraced in the same levy with the 3,000 acres
which she did claim; that it is not true that the defendant knew
that the mortgage deed included any trust land when he caused the
mortgage to be foreclosed, nor did he know that the lands now in
controversy were trust lands when he purchased them at the sale and
took the sheriff's deed for them, nor did he have notice of the
alleged right of the plaintiffs when he took possession of his
purchase, unless what was so said at the sale, as above set forth,
amounted to such notice, and that even if it did, the right of the
defendant could not be affected by notice, as he and his firm were
innocent mortgagees for value, and had no notice at the time they
gave credit and took the security. In April, 1883, the answer was
amended by averring that the trust deed was not executed, signed,
or delivered, nor even written at the time it bears date, nor until
within the last few years; that it is a much younger instrument
than the mortgage under which the defendant claims title, and that
it was fabricated and antedated, and not recorded, and could not
have been recorded at the time the certificate of record entered on
it represents it to have been recorded.
Issue being joined, the proofs on both sides were taken by
depositions, according to the usual practice in equity cases. In
December, 1883, a jury trial was had. The record does not disclose
any order of court for the trial of feigned issues, or
Page 123 U. S. 613
of issues of fact, by a jury, but merely states that on the 5th
of December, 1883, a jury was impaneled to try certain issues of
fact, and gives the names of the jurors, and states the appearance
of the respective parties at the trial, and the result, as
follows:
"To the first issue of fact submitted by the court, to-wit, 'Is
the deed of trust presented a true, valid, and authentic instrument
executed at the time it purports to be?'"
"We, the jury, find that the deed of trust presented is a true,
valid, and authentic instrument, executed at the time it purports
to be."
"To the second issue of fact submitted by the court, to-wit,
'Did the defendant, B. J. Wilson, have notice of the existence of
this trust deed at or before the execution of mortgage by plaintiff
to defendant, May 5, 1870, or before the sheriff's sale in
1876?'"
"We, the jury, find that the defendant, B. J. Wilson, had notice
of the existence of this trust deed at or before the execution of
the mortgage by plaintiff to defendant, May 5, 1870, and before the
sheriff's sale in 1876."
There are eight bills of exceptions found in the record. One of
them sets forth an exception by the defendant to the submission to
a jury of the issues of fact arising in the case; four of them
contain exceptions by the defendant to the rejection of evidence,
and three of them contain exceptions to instructions given to the
jury.
On the 6th of December, 1883, the circuit court made a final
decree, which contains no reference to the jury trial, but states
that the cause came on to be heard and was argued by counsel, and
that the court, upon the proof submitted, finds and decrees that
the deed of trust "is a true, valid, and authentic instrument,
executed at the time it purports to be," and
"that the defendant, B. J. Wilson, had notice of the existence
of this trust deed at or before the execution of the mortgage by
the complainant, William C. Riddle, to defendant, May 5, 1870, and
before the sheriff's sale in 1876."
These findings are in the exact language of the findings of the
jury. The decree then proceeds to adjudge that the defendant
Page 123 U. S. 614
acquired no valid title to the lands embraced in the trust deed
by virtue of the sheriff's deed made to him in 1876; that the 1,500
acres of land embraced in the trust deed are the property of the
wife of Riddle, and her children and grandchildren, under the terms
and provisions of the trust deed; that the decree, by its own force
and effect, establishes in and confirms to Riddle, trustee, and his
successors in the trust his right and title to the land, with the
appurtenances and the rents and profits, upon the uses and trusts
set forth in the deed, with full right to the possession, use, and
control of the same; that the defendant, by the 1st of January,
1884, do restore the possession, use, and control of the trust
estate to Riddle, trustee, and his successors in the trust; that
the mortgage lien created by Riddle, May 5, 1870, to the defendant,
and the deed executed and delivered to the defendant by the Sheriff
of the County of Washington in 1876 are null, void, and of no
effect, as to the land and appurtenances embraced in the trust
deed, and that the plaintiffs are entitled to $3,166.50 for the
rents and mesne profits of the land from the period when the
defendant first took possession and control of it to the date of
the decree, to be recovered by Riddle, trustee, or his successors
in the trust; that process of execution for the recovery of the
same issue against the property of the defendant, and that the
plaintiffs recover from him the costs of the suit. From this decree
the defendant has appealed to this Court.
The defendant objects to the submission to the jury of the
issues of fact on the ground that the chancellor should have first
made an order directing a trial by a jury at law, on issues framed;
that the verdict of the jury on such issues should have been duly
certified to the chancellor; that, on the contrary, a jury was
called into the court of chancery and issues were submitted to it
by the chancellor; that the findings of the jury were not properly
before the chancellor, and he should have given no weight to them,
and that no weight should be given to them by this Court.
But we are of opinion that there is no force in this objection.
It appears by the record that the same judge before whom the jury
trial was had acted as chancellor in making the decree in
Page 123 U. S. 615
the suit in equity, and that the proofs taken and relied upon on
the hearing in the suit in equity were the same proofs which were
before the jury on the trial of the issues of fact. Under these
circumstances, a previous order for the trial by jury, and any
certificate of the result by the judge presiding on the trial to
himself as chancellor, were unnecessary, although it would have
been more formal if the court in equity had ordered a jury to be
impaneled on the law side of the court, and the verdict had been
certified by the clerk to the equity side, as was done in
Kerr
v. South Park Commissioners, 117 U. S. 379.
As to the objection to the submission to the jury of the issues
passed upon by them, it is sufficient to say that the question of
such submission was one for the discretion of the circuit court,
and that it seems to have been not an unlawful exercise of such
discretion to submit to the jury the particular issues upon which
they passed.
The defendant assigns for error the rejections of evidence set
forth in the bills of exceptions, and the instructions to the jury
which were excepted to. No motion for a new trial was made in the
circuit court. The submission of the issues to the jury was for the
information of the conscience of the chancellor. It is evident from
the terms of the decree that the chancellor adopted the findings of
the jury as being satisfactory to him upon the whole testimony in
the case, for the decree states that the court makes its finding
"upon the proof submitted." Under such circumstances, it is not the
practice of an appellate court to consider formal exceptions to
rulings in the course of the trial of the issues before the jury.
Brockett v.
Brockett, 3 How. 691;
Johnson v. Harmon,
94 U. S. 371;
Watt v. Starke, 101 U. S. 247.
On the two issues submitted to the jury, we concur with the
circuit court in its conclusions stated in the decree, which were
in accordance with the findings of the jury, and in its other
conclusions stated in the decree. We understand the finding of the
decree to be that the defendant had actual, and not merely
constructive, notice of the existence of the trust deed at or
before the execution of the mortgage to him in
Page 123 U. S. 616
1870, and before the sheriff's sale in 1876, and we concur in
that finding. It is not necessary to discuss the evidence. Nor do
we consider it necessary to pass upon the question of the effect,
as constructive notice to the defendant, of the recording of the
trust deed in the office of the clerk of the Superior Court of
Washington County in May, 1853, in view of the destruction of the
records of deeds in that office by fire in 1864.
The defendant had no dealings as a creditor with Riddle until
the fall of 1866, but nevertheless he contends that a voluntary
deed of trust, such as that in the present case, was not good as
against him as a
bona fide purchaser or mortgagee for
value, even though he had actual notice of the voluntary deed at
the time of the purchase or mortgage. We understand the law of
Georgia to have been otherwise. A voluntary settlement such as was
made in this case was authorized by the statute law of Georgia in
force at the time, provided the conveyance was recorded in the
office of the clerk of the superior court of the county of the
residence of the husband within three months after its execution.
That was done in the present case, as the proof shows.
Section 1776 of the Code of Georgia, in force at the time the
deed was made, provided that a husband might at any time during
coverture, either through trustees or directly to his wife, convey
any property, subject to the rights of prior purchasers or
creditors without notice. Such a conveyance for the benefit of the
children and grandchildren of the grantor was also valid if he was
solvent and if the provision was a proper one and free from fraud.
Section 1778 of the Code, enacted in 1847, provided that every
voluntary settlement made by the husband on the wife should be
recorded in the office of the superior court of the county of the
residence of the husband within three months after the execution
thereof, and that on failure to comply with this provision, such
settlement should not be of any force or affect against a purchaser
or creditor or surety who,
bona fide and without notice,
might become such before the actual recording of the same. Section
2305 provides that a trust estate may be created for the use of
delivered the opinion of the Court
Page 123 U. S. 617
some other person than the grantee; that no formal words are
necessary to create such an estate, and that whenever a manifest
intention is exhibited that another person shall have the benefit
of the property, the grantee shall be declared a trustee. Section
2632 provides that every voluntary deed shall be void as against
subsequent
bona fide purchasers for value without notice
of such voluntary conveyance. It follows from these provisions
that, as the deed in this case was recorded in due time, it was
valid as against the defendant, who had notice of it before the
mortgage to him of May, 1870, was executed, and before the
sheriff's sale in 1876. This result is in accordance with the
decisions of the Supreme Court of Georgia.
Gordon v.
Green, 10 Ga. 534, 543;
Horn v. Ross, 20 Ga. 210,
223;
Cummins v. Boston, 25 Ga. 277, 283;
Brown v.
Spivey, 53 Ga. 155;
Adair v. Davis, 71 Ga. 769.
The decree of the circuit court is
Affirmed.