UNITED STATES v. DEVEREUX et al., 90 F. 182

SIMOYTOY, Circuit Judge (after stating the facts). It was suggested in argument that as the United States in this case comes into court claiming rights as cestui que trust under a deed between private parties, and asserting these rights as a private individual would, the case does not involve any governmental right or duty; that, therefore, the ordinary rules controlling courts of equity as to laches should be enforced. This position cannot be maintained. The United States do not and cannot hold property as a monarch may for private or personal purposes. Van Brocklin v. Tennessee, 117 U. S., at page 158, 6 Sup.

Ct. 670. In the present case the United States holds what title it has to the property in question as it holds all other property for public and private purposes (U. S. v. Insley, 130 U. S. 265, 9 Sup. Ct. 485);’ and cannot be prejudiced by the negligence of the officers and agents to whose care their interests were confined; nor are they bound by any statute of limitations (U. S. v. Railway Co., 118 U. S. 120, 6 Sup. Ct. 1006).

With this exception, however, and in perfect consistency with it, when a sovereign comes into one of its own courts of its own accord, and seeks relief, all the rules established for the administration of justice between individuals are applied, and bind all parties. Port Roval & A. Ry. Co. v. South Carolina, 60 Fed. 552; Prioleau v. U. S., L. R. 2 Eq. 659. And in U. S. v. Flint, Fed. Cas.

No. 15,121 (Field, circuit judge), we find: “If, on consideration of the circumstances of a given case, it he inequitable to' grant the relief prayed against a citizen, such relief will be refused by a coui’t of equity, although the United States be the suitor.” The question naturally arises: What interest did the United States take in this land now claimed by defendants, assuming for the present that the deed was recorded in proper time? In Neilson v.

Lagow, 12 How., at page 106, the supreme court, discussing a deed in terms just like this, says: “The deed in question conveyed the land to Badollett and others, in trust to -sell so much thereof as might be necessary to raise sufficient money tO' pay a debt due from the bank to the United.States. It is clear this was not in any sense a purchase of land on account of the United States. In the land itself, the United States acquired by the deed no interest.

They were not even clothed with a right to acquire such an interest through the aid of a court of equity, for their title was not to the whole proceeds of the lands, whatever they might be, but only to so much of them as might be necessary to pay the debt of the bank. To this extent both the creditor and the debtor had the right to insist on a sale; and whatever residue of land should remain was by force of the deed, operating by means of a shifting or secondary use, to go to the bank upon payment in full of the debt due to the United States.

It is true, the deed contains some language, which taken by itself, might raise a use, executed in the United States; but it is well settled that such language is controlled by an intent manifested in the instrument to have the legal estate remain in trustees, to enable them to execute a trust which the deed declares; and where, as In this case, the trust is to sell and convey in fee simple absolute, a legal estate is vested in the trustees commensurate with the interest which they must convey in execution of the trust. Mott v. Buxton, 7 Ves. 201; Leonard v. Sussex, 2 Vent. 526; and the cases in note (

f) to Chapman v. Blissett, Cas. T. Talb. 145-150; Trent v. Hanning, 7 East, 99; Doe v. Willan, 2 Barn. & Ald. 84.” We must deal with this case, therefore, as between the trustee and the defendants. Is there any estate left in the trustee, or any title which can be enforced in any court of law or equity? The defendants, through their ancestor, went into possession of the land in controversy in 1829, under sheriff’s deed, in actual possession, under color of title. Tate v. Southard, 10 N. C. 119; Kron v. Hinson, 53 N. C. 347; Hilliard v. Phillips, 81 N. C. 99.

The present proceedings, seeking to enforce the performance of his duty by the trustee, commenced 21st August, 1893, against them, after a period of actual, continuous, open, adverse; possession for oven' 60 years. During all that time there has been no entry or possession by the trustee or any one claiming under him.

Were he now to attempt to execute his trust, and to enter and offer for sale these lands, or to bring his action of ejectment therefor, or were Ids cestui que trust to adopt the course suggested iu 2 Lewin, Trusts, 868, as the only course to be adopted, and bring the action in Hie name of the trustee, such an action must, of necessity, fail. After this great lapse of time, courts will presume anything arid everything to have been done which, if done, would be a bar to the claim. Id. 869; Roe v. Ireland, 11 East, 280.

This rule of presumption is one of policy as well as of convenience, and necessary for tiro; peace and security of society. “If time,” said Lord Plunkett, “destroys the; evidence of title, the law has wisely and humanely made length of possession a substitute for that which has been destroyed. He comes with a scythe in one hand to mow down the muniments of our rights, but in his other hand the lawgiver has placed an hourglass, by which he metes out incessantly those portions of duration which render needless the evidence he has swept away.

Whart Ev. § 1338, note 5.” It is not necessary to presume that a deed was, in point of fact, executed. It is sufficient if the evidence leads to the conclusion that a conveyance might have been executed, and that its existence would be a solution of the difficulty arising from its mere execution. Fletcher v. Fuller, 120 U. S. 546, 547, 7 Sup. Ct. 667; McLeod v. Rogers, 2 Rich. Law, 22. Presumption does not operate like the statute of limitations, and bar a right which is known to exist; or like laches, which deprives one of a right which did exist.

It operates as evidence, and establishes the conclusion that the right which did exist has been duly relinquished by the possessor of it. Wharton, in his Law of Evidence (section 1348, note 1), puts it in this way: “Thus, the lapse of time (loos not of Itself furnish a conclusive legal bar to t,lie title of the sovereign, agreeably to the maxim, 'Nullum tempus,’ etc., yet, if the adverse claim could have had a legal commencement, juries are instructed or advised to presume such commencement after many years of uninterrupted adverse possession or enjoyment.” Laches and the statute of limitations affect the remedy.

Presumption clothes with a right. The statute of limitations ripens a trespass into a legal title because of neglect of the true owner. Presump-" tion concludes that a lawful origin existed. The supreme court of the United States, in U. S. v. Chaves, 159 U. S., at page 464, 16 Sup.

Ct. 62, says: “It is tile general rule of American law that á grant will he presumed upon proof of an adverse exclusive and uninterrupted possession for 20 years, and that such rule will be applied as a presumptio juris et de jure whenever, by any possibility, a right may be acquired in any manner known to the law. * * * Thus, although lapse of time does not of itself furnish a conclusive bar to the title of the sovereign agreeably to the maxim, ‘Nullum tempus oc-currit reg'i,’ yet, if the adverse claim could have a legal commencement, juries are instructed to presume such commencement after many years of uninterrupted possession or enjoyment.” Apply these to the present case.

The trustees had full power of sale. The purpose of the sale, however, was, among other things, to satisfy a debt due to the United States. The long, continuous, uninterrupted, and open possession and claim of the Walkers may well justify the presumption of a conveyance by the trustee, of a release of the mortgage, or of satisfaction of the judgment by the United States, upon payment, or in any other mode, or of a release of its claim. This presumption is encouraged by the result of the suit by the trustee against William W. Jones in the United States circuit court at Raleigh.

It is made almost certain by the fact that the United States accepted and holds a lease as tenant of these defendants of a part of the land included within the boundaries of the territory they, now claim. 2. Did either Burgwin or Swift have a title to these lands which can prevail against the title of the defendants? There can lie no doubt that the deed of Smith and wife to Burgwin, although absolute in terms, was intended for, and must be deemed to be, a mortgage. This was the substantial object of the conveyance, and equity will look to that. Peugh v. Davis, 96 U. S. 332.

And this is so under the general principles of equity jurisprudence determinable by the federal courts. Russell v. Southard, 12 How. 139. The Burgwin-Swift deeds are deeds of trust in the nature of a mortgage. If this deed be treated as an absolute deed, it was not recorded until 1829, years after its execution, although the act of 1715 required its record within 12 months from its date. If it be a mortgage, it would seem to come within the condemnation of Gulley v. Macy, 84 N. C. 434. “Such a grantee can acquire no title as against creditors,” prior or subsequent (Halcombe v. Ray, 23 N.

C. 340), “or subsequent purchasers; not because of any evil intent to perpetrate a fraud, but because he cannot bring himself within the provisions of a statute which allows a mortgage or deed of trust to take effect from registration only.

As an absolute deed, it cannot be registered, because that was not the intent of the parties, nor as a mortgage, because it does not purport to be one, and so would fail to give the notice the statute desires.” Moreover, both this deed and that of Burgwin to Swift were recorded in 1829, after the sheriff’s deed to Walker. “A mortgage deed not registered in time, when registered, has no relation back to its date, but operates only from the time of registration. It shall not, therefore, avail anything against an execution levied after its dale, and before its registration.” Tate v. Brittain, 10 N. C. 55.

In Cowan v. Green, 9 N. C. 384, it is said: “A mortgage not registered in time is inefficient against purchasers subsequent to the mortgage whose conveyances are registered before the mortgage.” In Davidson v. Beard, 9 N. C. 520, a creditor subsequent to an unrecorded mortgage obtained a judgment and levied an execution, not having notice of the mortgage when the debt was incurred, but he did have notice before levy. The execution was held to have priority over the levy.

In the same case it was held that under the act of 1715 a subsequent purchaser has the. same priority over an unrecorded mortgage as a subsequent mortgagee, and so is any other subsequent incum-brancer. It is said, however, that if the deed of the Smiths to Burgwin, and of Burgwin to Swift, be inoperative as to the defendants, because of nonregistration, this omission was cured by the deed of Burgwin and of Hwift to Devereux, trustee, in 1833, which was duly recorded. The conveyance to Devereux was for such estate and under such terms and conditions and limiiations as remained in the said Joseph G.

Cwift or John F. Burgwin, or either of them, “at and immediately before the signing and ensealing of these presents,” but for no other or greater estate than the said Joseph G. Swift or John F. Burgwin, or either of them, then had and held in the same. What estate had Burgwin in himself wiien this Devereux deed was executed? None, for as between him and Swift he had parted with all Ms interest in the property and power over it, for good and valuable consideration. Nothing was left in him. His deed binds him, and as to him operated, with or without registration. Pike v. Armstead. 16 N. C. 110; Walker v.

Coltraine, 41 N.C. 79; Hodges v. Spicer, 79 N. C. 223. With regard to Swift’s conveyance to Devereux. The latter rests entirely upon Swift. He gets all that Swift had, but no more. The deed was intended to operate, and could only operate, as the substitution of one trustee for another. In establishing the present claim against the defendants, use must be made of Swift’s title; and, as to these defendants, it would seem that that is void. The decree of the circuit court dismissing the bill is affirmed.