In cases of concurrent jurisdiction, courts of equity consider
themselves bound by the statutes of limitation which govern courts
of law; in many other cases, they act upon the analogy of the
limitations at law; but even where there is no such statute
governing the case, a defense founded upon the lapse of time and
the staleness of the claim is available in equity where there has
been gross laches in prosecuting the claim, or long acquiescence in
the assertion of adverse rights.
The facts are stated in the opinion of the Court.
MR. JUSTICE CLIFFORD delivered the opinion of the Court.
Statutes of limitation form part of the legislation of every
government, and are everywhere regarded as conductive and even
necessary to the peace and repose of society. When they are
addressed to courts of equity as well as to courts of law, as they
seem to be in controversies of concurrent jurisdiction, they are
equally obligatory in both forums as a means of promoting
uniformity of decision.
Stale claims are never favored in equity, and where gross laches
is shown and unexplained acquiescence in the operation of an
adverse right, courts of equity frequently treat the lapse of
time,
Page 99 U. S. 202
even for a shorter period than the one specified in the statute
of limitations, as a presumptive bar to the claim.
Stearns v.
Page, 7 How. 819;
Badger v. Badger, 2
Cliff. 154.
Time, it is said, is no bar to an established trust, which may
be true in cases of concealed fraud, provided the injured party is
not guilty of undue laches subsequent to its discovery.
Circumstances of the kind form an exception to the rule, but the
rule still is that when a party has been guilty of such laches in
prosecuting his equitable remedy as would bar him if his title was
solely at law, he will be barred in equity, from a wise
consideration of the paramount importance of quieting titles.
Michaud v.
Girod, 4 How. 561.
It appears that the complainants are, or claim to be, creditors
of Edwin Walker, deceased, and that they instituted the present
suit in behalf of themselves and other creditors of the deceased to
recover a moiety of certain real and personal property, together
with the rents and profits of the same, which, as they allege,
belonged to their creditor in his lifetime and at the time of his
decease. They allege that their creditor owned and held the
property described in the bill of complaint in common with one
Abram F. Kimmell, of the City of Washington, since deceased, with
whom he was carrying on the livery stable business under the firm
name of Walker & Kimmell, the said property being used for the
purposes of said business; that the said Walker being largely
indebted to the complainants, their testators and intestates, as
well as other parties, dissolved partnership with said Kimmel and
conveyed all his real and personal estate, after payment of all
partnership debts, to one Voltaire Willett by deed dated Oct. 8,
1857, in trust to pay off the complainants, their testators and
intestates, with the proceeds thereof, the remainder to be paid
over to the grantor, his heirs and assigns. Possession of the
property at the time was in the junior partner, and the
complainants allege that he continued in the possession thereof up
to the day of his death, holding the same and applying the proceeds
thereof to his own use, without accounting for the rents and
profits either to the grantor, the trustee, or to the creditors,
and that since his death the property has been in the possession of
his widow and children, who have appropriated the same to their own
use, and that
Page 99 U. S. 203
they utterly deny all right of the complainants to any part or
interest in the same.
Sufficient appears from the preceding statement to show what the
circumstances were on the first day of February, 1871, when the
present bill of complaint was filed against the respondents in the
subordinate court. They are Mary A. Kimmell, administratrix of
Abram F. Kimmell, deceased, his four children, the heirs of the
deceased trustee, and the administrator of the deceased senior
partner, who, as alleged, was the debtor of the complainants.
Service was made, and the respondents appeared and filed
answers, setting up several defenses, the most material of which
are contained in the answer of the widow and children of the
deceased junior partner. They deny all the material allegations of
the bill of complaint, to the effect following:
1. That the complainants or either of them are creditors of the
deceased senior partner of the firm, or that the senior partner of
the firm was ever the owner of the real estate described in the
bill of complaint, or that he ever owned or possessed any personal
property, or that the deceased junior partner ever had in his
possession any personal property which belonged either to the
deceased senior partner or to the firm.
2. They admit the death of the trustee, but they aver that they
are not informed and cannot state whether he ever did any thing in
discharge of the trusts created by the said deed, and they also
admit that the trustee and the deceased junior partners made the
alleged conveyance to the brother-in-law of the latter, but they
aver that it was made in good faith, and that the moiety of the
consideration belonging to the senior partner was appropriated to
pay his just debt, as fully explained in the answer.
3. They also allege as a defense that the debtor of the
complainants left Washington in the year 1846; that he went to
Richmond and entered into business there with a new partner; that
the there contracted large debts for which he was liable; that in
the latter part of 1857 he conveyed to his new partner a large
amount of real and personal property to pay all his debts,
including those set up by the complainants; that all these claims
were fully satisfied and extinguished either by payment
Page 99 U. S. 204
in money or by the acceptance of other securities; and that the
supposed debtor of the complainants, at the time of the dissolution
of the partnership here, before he went to Richmond, relinquished
all interest in the future earnings of the concern, and that the
partnership as between the parties was dissolved, though they admit
that no formal notice of the dissolution was published.
4. They also admit that besides the real estate there was at the
time on hand a large stock of horses, vehicles, and other property,
all of which was taken by the junior partner; but they aver that
the junior partner from time to time made payments and advances to
the retired partner exceeding in amount the value of his interest
in the assets of the partnership, as estimated by himself; and they
aver that no formal settlement of accounts ever took place, but
they allege that if one could be made, which, as they state, it
would be difficult and expensive to accomplish, it would be found
that the estate of the debtor of the complainants is largely
indebted to the estate of the junior partners.
Finally they set up as defense to the suit that the claims are
stale demands, and of a character that courts of equity will not
countenance, because, as they allege, it would now be inequitable
and unjust that the complainants should be permitted to enforce an
account from the respondents, after having slept upon their rights,
if any they have, for so long a time and until all the parties to
the transaction are dead.
By consent, the cause was referred to an auditor, with
instructions to ascertain and report what amount, if any, was due
to the respective complainants, and to ascertain and state the
partnership accounts and the character of the partnership property
at the date of the trust deed, and the disposition made of the
rents and profits by the respondents. Hearing was had before the
auditor, and he made the report set forth in the transcript.
Testimony was taken by the complainants prior to the order of
reference, and they took further testimony before the examiner
subsequent to the appointment of the auditor. By his report it
appears that two schedules were attached to the deed of trust, one
of which purported to be a list of drafts, notes, and
Page 99 U. S. 205
bonds due to a third person, and the other to be a list of debts
due by the debtor to the complainants. Among other things, the deed
recited that the said debtor, independently of his indebtedness to
the firm of which he was a member, owed a large amount to the
persons named in the two schedules, and that he desired, after
paying all the firm debts, to secure
pro rata the debts in
the first schedule, and if sufficient was left after that, to pay
in full the debts in the second schedule.
It appears that the deed was duly executed, and that the grantor
conveyed to the trustee, his heirs, executors, administrators, and
assigns for ever, all of his right, title, and interest in and to
the real and personal property, debts, effects, credits, and assets
of every kind whatever and in any manner belonging to the firm,
subject to the debts and liabilities of the firm and to the right
of the junior partner in winding up and paying off the same, the
true intent and meaning of the instrument being only to convey the
interest of the senior partner after all the liabilities of the
firm have been discharged. Matters of the kind being fully
explained, the auditor proceeds to report that he has not stated
the claims of the respective complainants; and he gives the reasons
for the omission, which appear to be satisfactory, as the report
shows that the complainants did not furnish the means to enable him
to comply with that direction, except perhaps in the single
instance fully set forth in the report.
Directions were also given by the decretal order that the
auditor should state the partnership accounts, which he also failed
to do, for the satisfactory reason, as he states, that no testimony
or other material was furnished by the parties to enable him to
perform the required service. Another direction of the decretal
order was to state the amount of the property belonging to the firm
at the date of the trust deed. For a compliance with that order, so
far as the real estate in concerned, the auditor refers to the
deeds introduced in evidence before the examiner, and in respect to
the personal property he states that there was no evidence given to
show what, if any, belonged to the partnership at that date.
Lots numbered 16, 17, and the west half of 18, in the square
numbered 491, were included in the trust deed. On the 16th
Page 99 U. S. 206
of November, 1858, the junior partner and his wife, the trustee
of the senior partner joining with them, conveyed the west half of
lot 18 and part of lot 17 to the trustee of the sister-in-law of
the first-named grantor, in respect to which the auditor reports
that the deed conveying the same refers to the prior deed of trust
given by the senior partner, and he states that the recitals of the
deed
specify the purpose for which it was executed, and
show that the firm owed the
cestui que trust the sum of
$2,000 money loaned, and that the property was conveyed to her for
the sum of $5,000, one-half of which went to pay that debt and
interest, and the other moiety was paid or secured to the junior
partner of the firm.
Six years later, the grantee in the deed reconveyed the same to
her brother-in-law for five dollars, as expressed in the
consideration of the deed. Complainants charge in the bill of
complaint that the junior partner fraudulently procured the
conveyance to be made in order to secure the title to himself, but
the respondents in their answer deny all fraud and bad faith in the
premises, and the auditor reports that no testimony was given
touching the conveyance. Instead of that, he states, in response to
that charge, that while the circumstances attending the conveyance
may be well calculated to cast suspicion upon it, he finds nothing
in the case to warrant him in pronouncing it fraudulent and
void.
Where the answer of the respondent is responsive to the bill, it
is evidence in his favor, and is conclusive, unless disproved by
more than one witness. Story, Eq.Plead. (7th ed.), sec.
875
a;
Daniel v. Mitchel, 1 Story, 188.
Two witnesses, or one witness with confirmatory circumstances,
are required to outweigh an answer asserting a fact responsive to
the bill, the reason for the rule being that when the complainant
calls upon the respondent to answer an allegation he admits the
answer, if duly filed, to be evidence, and if it is testimony, it
is equal to the testimony of any other witness, and as the
complainant cannot prevail unless the balance of proof is in his
favor, he must have circumstances in addition to his single
witness, else he fails to establish the affirmative of the issue.
Clark's Executors v. Van
Reimsdyk, 9 Cranch, 153;
Hughes v.
Blake, 6 Wheat. 453.
Page 99 U. S. 207
Chancery courts invariably hold, where the answer is responsive
to the bill and positively denies the matters charged, and the
denial has respect to a transaction within the knowledge of the
respondent, the answer is evidence in his favor; and unless it is
overcome by the testimony of two credible witnesses, or of one
witness corroborated by other facts and circumstances which give it
greater weight than the answer, it is conclusive, so that the court
will neither make a decree nor send the case to trial, but will
simply dismiss the bill.
Badger v. Badger, supra.
Only one witness was examined before the auditor as to the rents
and profits received by the respondents, and the report of the
auditor states that the annual rental value of the property,
excluding that charged to have been fraudulently conveyed, was only
$938, and if that be excluded, then the real estate consists only
of lot 16 in square 491, with the improvements.
Ten exceptions to the auditor's report were filed by the
complainants, alleging for error that he did not report their
respective claims as liens against the property in controversy.
Pursuant to the order of the court, the parties were heard upon the
auditor's report and the exceptions thereto, and the court entered
a decree that the bill of complaint be dismissed, from which decree
the complainants appealed to the general term, where the decree of
the subordinate court was affirmed.
Proceedings in the court below being ended, the complainants
appealed to this court, and filed the following assignment of
errors:
1. That the court erred in not entering a decree cancelling and
setting aside as fraudulent the said conveyance to the
sister-in-law of the junior partner.
2. That the court erred in not entering a decree that the real
estate transferred to the trustee of their debtor should be sold
and distributed to his creditors.
3. That the court erred in not entering a decree that the
administratrix of the junior partner should account and pay to the
trustee to be duly appointed so much of the personal assets of the
firm included in the trust deed as were held by her intestate in
his lifetime.
4. That the court erred in dismissing the bill of complaint.
5. That the court erred in not entering a decree that the
representatives
Page 99 U. S. 208
of the deceased junior partner should account for the rents and
profits of the real estate conveyed to the trustee up to the date
of the decree in this cause.
That the partnership existed is not denied, and the proof is
clear that the senior partner left Washington in 1846, and that he
went to Richmond and there formed a new partnership, and engaged
largely in business for twenty years before his death. As before
remarked, the right of the complainants, if any, to prosecute the
suit sprang from the trust deed dated Oct. 8, 1857, and executed by
their alleged debtor to his trustee for the purpose of paying his
debts, including what he owed to the complainants. Annexed as the
deed is to the bill of complaint, it may properly be referred to as
an exhibit, from which it appears that their debtor and the
intestate of the first-named respondent were
"engaged as partners in the City of Washington, and in the
progress of the business acquired real and personal estate,
including horses, carriages, buggies, sulkies, and other
property,"
and that they held claims against various persons, and that the
senior partner was independently indebted to the persons named in
the schedules appended to the deed; that he conveyed all his right,
title, and interest in the real and personal property, debts,
effects, credits, and assets of the firm to the grantee of the
trust deed for the described purposes, subject to the debts and
liabilities of the firm, and the right of the junior partner in
winding up and paying off the same.
There is no averment in the bill that any interest in the
partnership property was ever collected by the trustee or that he
could have made any such collection, nor is it averred that any of
the complainants are judgment creditors.
Fourteen years elapsed from the date of the deed to the filing
of the bill, and throughout that period none of the complainants
during the lifetime of the partners and trustee or any of them took
any step whatever to ascertain or enforce their rights, if any they
had, under that trust deed. Nothing appears to show that the
trustee ever took any beneficial title whatever to the real
property. Beyond doubt, he took the legal title by the words of the
deed, but there is no proof to show that he ever acquired the
possession or the right of
Page 99 U. S. 209
possession, it appearing by the deed that the right of
possession was secured to the junior partner, for the purpose of
winding up the partnership.
Concede that the grantor might have joined the trustee in a suit
for an account on his own motion or at the suggestion of the
trustee or creditors, still the answer to that suggestion, if made,
is that he did not do so, and now, the grantee, the trustee, and
the junior partner all being dead, unless there can first be an
account of the partnership property, the complainants can obtain no
relief, as there is nothing on which a decree in their favor could
operate for their benefit. They do not allege that there was ever
any settlement of the partnership affairs, nor do they in terms
pray in the bill for an account of the partnership assets. By
consent, an auditor was appointed to ascertain and state the
partnership accounts, but he characterizes the proceedings in the
cause as involved in obscurity, and the testimony "as incomplete,
vague, and indefinite," and reports that there is only one instance
in which the amount due to any one of the complainants has been
proven with any reasonable degree of certainty. Except the prayer
that the administratrix and heirs of the junior partner account
with and pay over to the complainants the rents and profits of the
estate conveyed to the trustee, the bill of complaint contains
nothing which can possibly be construed as a prayer for an account
of the assets of the partnership.
Four lots, to-wit, 16, 17, 18, and 19, the complainants claim
were held and used as partnership property; but the answer of the
principal respondents denies that claim and avers that the firm
never owned any of the real estate mentioned, except lot 16 and
parts of lots 17 and 18, and the auditor reports that, excluding
the property conveyed to the other trustee, the assets consist only
of lot 16 with the improvements on the same and that there is not a
particle of testimony to prove that the conveyance to the other
trustee was fraudulent. Attempt is made to set aside that
conveyance without making either the trustee or
cestui que
trust parties to the bill, though it is said by the
complainants that they are both alive, of which, however, there is
no proof in the record.
Exceptions to the auditor's report were taken by the
complainants
Page 99 U. S. 210
because he did not report as liens against the property
described in the cause the claims of each and every complainant,
when his report shows that the evidence given did not enable him,
except in one instance, to ascertain the amount of the claims,
which was much less than the minimum of jurisdiction.
For fourteen years, the complainants slept upon their rights,
and there is not a single allegation in the bill nor a particle of
proof introduced in their behalf to excuse their manifest laches in
not seeking an account until all the parties in interest have
departed this life.
Equity courts in cases of concurrent jurisdiction usually
consider themselves bound by the statute of limitations which
govern courts of law in like cases, and this rather in obedience to
the statute of limitation than by analogy.
Wagner v.
Baird, 7 How. 234. In many other cases, they act
upon the analogy of the statutory limitations at law, as where a
legal title would in ejectment be barred by twenty years' adverse
possession courts of equity will act upon the like limitation, and
apply it to all cases of relief sought upon equitable titles or
claims touching real estate.
Moore v. Greene, 2 Curt.C.C.
202; 2 Story, Eq.Jur. (8th ed.) 520;
Farnum v. Brooke, 9
Pick. (Mass.) 243.
Support to those propositions is found everywhere, but there is
a defense peculiar to courts of equity founded on lapse of time and
the staleness of the claim where no statute of limitations governs
the case. Such courts in such cases often act upon their own
inherent doctrine of discouraging for the peace of society
antiquated demands by refusing to interfere where there has been
gross laches in prosecuting the claim or long acquiescence in the
assertion of adverse rights.
Badger v. Badger, supra; Roberts
v. Tunstall, 4 Hare 269;
Stearns v. Page, supra.
Authorities to support that proposition are numerous and
decisive, nor is it necessary to look beyond the decisions of this
Court for the purpose. Lapse of time, said Mr. Justice Thompson,
and the death of the parties to the deed have always been
considered in a court of chancery entitled to great weight and
almost controlling circumstances in cases where the controversy
grows out of stale transactions.
Jenkins v.
Pye, 12 Pet. 241;
Page 99 U. S. 211
Beckford v. Wade, 17 Ves. 96;
Humbert v.
Rector, 7 Paige (N.Y.) 193.
Few cases can be found more nearly analogous to the case before
the Court than the one in which the controversy had its origin in
this District. It had respect to a deed of trust executed to secure
certain creditors named in the schedule annexed to the deed. Enough
appears to show that the deed was filed by the trustee himself
within twenty years, and that the subordinate court decreed that
the amount of debts enumerated in the schedule should be paid.
Appeal from that decree was taken to this Court, and Mr. Chief
Justice Taney, in disposing of the case and reversing the decree,
remarked as follows:
"We do not found our judgment upon the presumption of payment.
For it is not merely on the presumption of payment or in analogy to
the statute of limitations that a court of chancery refuses to lend
its aid to stale demands. There must be conscience, good faith, and
reasonable diligence to call into action the powers of the court.
In matters of account, where they are not barred by the statute of
limitations, courts of equity refuse to interfere after
considerable lapse of time, from considerations of public policy
and from the difficulty of doing entire justice when the original
transactions have become obscured by time and the evidence may be
lost."
McKnight v.
Taylor, 1 How. 168.
Corresponding views were expressed by Mr. Justice Story prior to
that time, and the Chief Justice referred to the same as having
settled the doctrine of the Court upon the subject.
Piatt v.
Pattier, 9 Pet. 416;
Smith v. Clay, Amb.
645.
Courts of equity, acting on their own inherent doctrine of
discouraging for the peace of society antiquated demands, refuse to
interfere in attempts to establish a stale trust except where the
trust is clearly established or where the facts have been
fraudulently and successfully concealed by the trustee from the
knowledge of the
cestui que trust. Relief in such cases
may be sought, but the rule is that the
cestui que trust
should set forth in the bill specifically what were the impediments
to an earlier prosecution of the claim, and how he or she came to
be so long ignorant of their alleged rights, and the means used by
the respondent to keep him or her in ignorance, and how he or
she
Page 99 U. S. 212
first came to the knowledge of their rights.
Badger v.
Badger, 2 Wall. 87;
White v. Parnther, 1
Knapp C.C. 227.
When a party appeals to the conscience of the chancellor in
support of a claim, says MR. JUSTICE FIELD, where there has been
laches in prosecuting it or long acquiescence in the assertion of
adverse right, he should set forth in his bill specifically what
were the impediments to an earlier prosecution of the claim, and if
he does not, the chancellor may justly refuse to consider his case
on his own showing without inquiring whether there is a demurrer or
any formal plea of the statute of limitations contained in the
answer.
Marsh v.
Whitmore, 21 Wall. 185.
Laches and neglect, says MR. JUSTICE SWAYNE, are invariably
discountenanced in equity, and therefore there has always been a
limitation of suits in such courts from the beginning of their
jurisdiction. Limitations of the kind are dictated by experience
and are founded on a salutary policy, as the lapse of time carries
with it the memory and life of witnesses, the muniments of
evidence, and the other means of judicial proof.
Brown v.
County of Buena Vista, 95 U. S. 161.
Difficulties often arise in controversies of the kind in getting
at the truth so as to administer justice with any thing like
reasonable certainty. That the parties to the original transaction
have long since deceased is shown from the proofs in the case, and
it is not improbable that many or all of their clerks and agents
may be inaccessible as witnesses, for the same or some other
reason, or if alive and their attendance as witnesses may be
secured, they may not be able to remember any thing about the
transactions.
Viewed in the light of these authorities and suggestions, the
court is of the opinion that the last defense set up in the
respondents' answer is fully maintained, and that there is no error
in the record.
Decree affirmed.