to set aside a conveyance made in July, 1726, alleged to have been fraudulently obtained. There were some circumstances on which the plaintiff relied, as relieving his case from the laches justly imputable to him for permitting such a length of time to elapse; but they need not be noticed, because they were deemed insufficient by the chancellor, and the bill was dismissed. In discussing this point, Lord Redesdale reviewed the cases which had been determined, and said, "that it had been a fundamental law of state policy, in all countries, and at all times, that there should be some limitation of time, beyond which the question of title should not be agitated. In this country, the limitation has been fixed (except in writs of right, and writs depending on questions of mere title) at twenty years." "But it is said that courts of equity are not within the statute of limitations. This is true in one respect; they are not within the words of the statutes, because the words apply to particular legal remedies; but they are within the spirit and meaning of the statutes, and have been always so considered." After reasoning for some time on this point, and citing several cases to show "that wherever the legislature has limited a period for law proceedings, equity 174*] will, in analogous cases, consider the equitable rights as bound by the same limitation," he says, "a court of equity is not to impeach a transaction on the ground of fraud, where the fact of the alleged fraud was within the knowledge of the party sixty years before. On the contrary, I think the rule has been so laid down, that every right of action in equity, that accrues to the party, whatever it may be, must be acted upon, at the utmost, within twenty years."

This question was fully discussed, and solemnly, and we think, finally decided, in the case of The Marquis Cholmondeley v. Lord Clinton et al. reported in 2d volume of Jacobs & Walker. In that case, the title accrued in December, 1791, and the bill was filed in June, 1812. Other points were made; but the great question on which the cause depended was the length of time which had been permitted to elapse; and this question, after being argued with great labor and talent at the bar, was decided by the court, upon a full review of all the cases which are to be found in the books. It was considered, and was treated by the court, as one of the highest importance; and the opinion was unequivocally expressed, that "both on principle and authority, the laches and non-claim of the rightful owner of an equitable estate, for a period of twenty years (supposing it the case of one who must, within that period, have made his claim in a court of law, had it been a legal estate), under no disability, and where there has been no fraud, will constitute a bar to equitable relief, by 175*] analogy to the statute of limitations, *if, during all that period, the possession has been held under a claim unequivocally adverse and without anything having been done or said, directly or indirectly, to recognize the title of such rightful owner by the adverse possessor." Upon this ground alone the bill was dismissed. The plaintiff appealed to the House of Lords, and the decree was affirmed.

296

The Lord Chancellor, in delivering his opinion in the House of Lords, took a distinction, as to length of time, between trusts, "some being express, and some implied." "In the case of a strict trustee, it was his duty to take care of the interest of his cestui que trust, and he was not permitted to do anything adverse to it; a tenant also had the duty to preserve the interests of his landlord; and many acts, therefore, of a trustee, and a tenant, which, if done by a stranger, would be acts of adverse possession, would not be so in them, from its being their duty to abstain from them."

In a case of actual adverse possession, however, as was that before the House, his lordship considered twenty years as constituting a bar. Lord Redesdale was of the same opinion, and, in the course of his address, remarked that "it had been argued that the Marquis Cholmondeley might, at law, have had a writ of right. That was a writ to which particular privileges were allowed, but courts of equity had never regarded that writ, or writs of formedon, or others of the same nature. They had always considered the provision in the statute of James, which applied to rights, and [*176 titles of entry, and in which the period of limitation was twenty years, as that by which they were bound, and it was that upon which they had constantly acted."

This is not an express trust. The defendants are not, to use the language of the Lord Chancellor in the case last cited, "strict trustees, whose duty it is to take care of the interest of cestuis que trust, and who are not permitted to do anything adverse to it." They hold under a title in all respects adversary to that of the plaintiff, and their possession is an adversary possession. In all cases where such a possession has continued for twenty years, it constitutes, in the opinion of this court, a complete bar in equity. An ejectment would be barred, did the plaintiff possess a legal title.

This point has been decided in the same manner by the courts of Kentucky. The counsel for the plaintiff insist that those decisions are founded on the peculiar opinions entertained by that court respecting writs of right. We do not think so. Their doctrine on that subject is, indeed, used as an auxiliary argument; but it is merely auxiliary to an opinion formed without its aid.

The decree of the Circuit Court is to be reversed, and the cause remanded to that court, with instructions that the entry under which the plaintiff claims is valid; but that the adversary possession of the defendants, respectively, constitutes a complete bar to the plaintiff's bill, *wherever it would constitute [*177 a bar to an ejectment, did the plaintiff possess a legal title.1

1. Although, in general, length of time is no bar to an express trust, clearly established to have once existed, yet, as length of time necessarily obscures all human evidence, and deprives parties of the means of ascertaining the nature of the original transactions, it operates, by way of presumption, in favor of innocence, and against the imputation of fraud. It was therefore held by this court that the lapse of forty years, and charge and extinguish a trust, proved once to have the death of all the original parties, would disexisted by strong circumstances; by analogy to the rule of law, which, after the lapse of time. presumes the payment of a debt, surrender of a deed, and extinguishment of a trust, where cir

178*] *Decree.→This cause came on, etc. ¡

On consideration whereof, this court is of opinion that there is error in the decree of the 179*] said Circuit Court, in this, that the said court determined that the entry in the bill mentioned, made by Walker Daniel, on the first 180*] day of April, 1784, *and explained on the first day of July of the same year, on which the plaintiff's title is founded is invalid; Whereas, this court is of opinion 181*] *that the same is a valid entry. It is therefore ordered and decreed that the decree of the said Circuit Court, dismissing the plaintiff's bill, ought to be, and the same is hereby, reversed and annulled. And this court is further of opinion that in cases of adversary title, such an adversary possession as would bar an ejectment, did the plaintiff possess the legal title, constitutes also a bar to a bill in equity. It is therefore further ordered and decreed that this cause be remanded to the said Circuit Court, with instructions to take such further proceedings therein, conformably to this opinion, as may be agreeable to equity and good conscience. All which is ordered and decreed accordingly.

cumstances require it. Prevost v. Gratz, (ante Vol. VI. p. 481, 497.) In the case of Hillary v. Waller, 12 Ves. 265, the whole subject of presumptions from the lapse of time is gone fully into by Lord Erskine, both as applicable to incorporeal hereditaments, and where there is a written title. He states the doctrine to be founded in reason, the nature and character of man, and the result of human experience. "It resolves itself into this: that a man will naturally enjoy what belongs to him." "It has been said you cannot presume, unless you believe. But it is because there are no means of creating belief or disbelief, that such general presumptions are raised upon subjects of which there is no record or written muniment. Therefore, upon the weakness and in firmity of all human tribunals, judging of matters of antiquity, instead of belief, which must be the foundation of the judgment upon a recent transaction, where the circumstances are incapable of forming anything like belief, the legal presumption holds the place of particular and individual belief."

Although some of the principles laid down in this decision seem to be questioned by Mr. Sugden, in his treaties on the Law of Vendors and Purchasers (p. 250), yet it was cited with entire approbation, and its doctrine adopted by this court, in determining the above case of Prevost v. Gratz, ante, Vol. VI. p. 504.

In the case of Smith v. Clay (reported in 3 Bro. Ch. Rep. 639, note), and which is also cited and adopted by this court in the case of Thomas v. Harvie's Heirs, ante, p. 146, Lord Camden says: "A court of equity, which is never active in relief against conscience, or public convenience, has always refused its aid to stale demands, where the party has slept upon his right, and acquiesced for a great length of time. Nothing can call forth this court into activity, but conscience, good faith, and reasonable diligence; where these are wanting, the court is passive, and does nothing. Laches and neglect are always discontenanced, and, therefore, from the beginning of this jurisdiction, there was always a limitation to suits in this court." After applying this principle to limit a bill of review and appeals, by analogy to the statute concerning writs of error, he proceeds to cite the maxim, Expedit rei publicæ ut sit finis litium, and to state that it had prevailed in the Court of Equity, in all times, without the help of an act of parliament. "But as the court has no legislative authority, it could not properly define the time of bar, by a positive rule, to an hour, a minute, or a year: it was governed by circumstances. But as often as parliament had limited the time of action and remedies to a certain period in legal proceedings, the Court of Chancery adopted that rule, and applied it to similar cases in equity. For where the legislature had

|

[Chancery.]

CARNEAL et al., Appellants,

V.

BANKS, Respondent.

BANKS, Appellant,

V.

CARNEAL et al., Respondents.

The joinder of improper parties, as citizens of the same state, etc. will not affect the jurisdiction of the circuit courts in equity, as between the parties who are properly before the court, if a decree may be pronounced as between the parties who are citizens of the same state.

A decree must be sustained by the allegations of the parties, as well as by the proofs in the cause, and cannot be founded upon a fact not put in issueby the pleadings.

States and France, allowed the citizens of either The treaty of 1778, between the United [*182 country to hold lands in the other; and the title, the United States, was not devested by the abrogaonce vested in a French subject, to hold lands in tion of that treaty, and the expiration of the subsequent convention of 1800.

Bill to rescind a contract for the exchange of lands dismissed under the special circumstances. of the case.

fixed the time at law, it would have been preposterous for equity, which, by its own proper authority, always maintained a limitation, to countenance laches beyond the period that law has been confined to by parliament. Therefore, in all cases where the legal right has been barred by parliament, the equitable right to the same thing has been concluded by the same bar. Thus, the account of rents and profits, in a common case, shall not be carried beyond six years. Nor shall redemption be allowed after twenty years' possession in a mortgagee."

So, also, this court, in the case of Hughes v. Edwards (ante. Vol. IX., pp. 489, 497), adopted the same principle in relation to the effect of the lapse of time upon the respective rights of mortgageor and mortgagee, and of purchasers claiming under the former.

The great case of Cholmondeley v. Clinton, cited in the text, was that of an estate subject to a mortgage in fee, being in settlement with an ultimate limitation to the right heirs of S. R.; A., on the expiration of the previous estate, entered, claiming to be entitled, under the limitation; and he, and after his death, his son, continued in quiet possession, paying interest on the mortgage, for twenty years. It was finally determined, after much litigation, that the devisee of the person really entitled under the limitation, was barred by the length of time.

The case, as first decided in the Court of Chancery, will be found reported in 2 Meriv. Rep. 173, 357, where it was determined, by Sir W. Grant, M. R., that the lapse of time was no bar by analogy to the statute of limitations. Upon its afterwards coming on before his successor, Sir T. Plumer, the latter delivered a learned and elaborate judgment, which will be found reported in 2 Jacobs & Walker, 138, tending to show that wherever in the claim of a legal estate, the remedy is barred in a court of law by the statute of limitations, the remedy for an equitable estate will be equally barred, by the lapse of the same period of time, in a court of equity. An appeal was taken to the House of Lords, and in moving the judgment of the House, Lord Eldon adverted to the general principles adopted by courts of equity on the subject of length of time, and observed on "the vast difference between trusts, some being express, some implied; some, relations formed between individuals in the matter in which they deal with each other. and in which it could hardly be said, that one was trustee, and the other cestui que trust, and yet it could not well be denied that for some purposes they were so. Of this kind, he took the relation between a mortgageor and mortgagee to be. In the case of a strict trustee, it was his duty to take care of the interest of his cestui que trust, and he was not permitted to do anything adverse to it; a tenant, also, had a duty to preserve the interests of

T

Mr. Chief Justice Marshall delivered the opinion of the court:

These appeals are from a decree of the Circuit Court for the district of Kentucky, in which Carneal's heirs were decreed to pay Henry Banks $2,500, for failing to perform a contract entered into between Thomas Carneal, their ancestor, and the said Henry Banks. The bill filed by Henry Banks, charges that his agent, Cuthbert Banks, entered into a contract with Thomas Carneal, whereby he agreed to transfer to Carneal the right of the said Banks in 30,000 acres of land purchased by him from John Harvie, for which right said Carneal "agrees to give a tract of 2,000 acres of land on Green River, patented for Philip Philips, which was sold out of a tract of 22,100 acres, by Philips, to Michael Lacassaign, deceased, by said Lacassaign to said Carneal, on the 30th of July, 1797, for which land said Carneal is to make a general warranty deed whenever thereunto required."

The bill further charges that Carneal was guilty of fraud in pretending to have a good 183*] title *to the said 2,000 acres of land, the whole being covered with better title, and in representing the land as much more valuable than it really is. The bill prays that the contract may be rescinded, and that the plaintiff may be re-instated in his rights to the said 30,000 acres of land, or have the value thereof in damages. And that the heirs of John Harvie, deceased, in whom the legal title to the said 30,000 acres remains, may be decreed to convey the same to him.

The heirs of T. Carneal deny all fraud in his

representation of the value of the land sold to the plaintiff, and insist on their ability to convey the same. They admit that the deed from Lacassaign to him was not recorded within the time limited by law, one of the three subscribing witnesses then required for its proof, having died before it was offered to the court. In consequence of this circumstance, Carneal, in 1779, instituted a suit in chancery against Lacassaign, to perfect his title, which abated by his death. The law being so changed as to his landlord; and many acts, therefore, of a trustee and tenant, which, if done by a stranger, would be acts of adverse possession, would not be so in them, from its being their duty to abstain from them. But the case of a mortgagee was different, he being at liberty to hold possession, and not becoming strictly a trustee until the money was tendered to him, and having a right, if he continued in possession for twenty years, without acknowledging the mortgage, to turn round on the mortgageor, and say that the estate was his own. His lordship could not agree to, and had never 'heard of, such a rule, as that adverse possession, however long, would not avail against an equitable estate; he meant, where there was no duty which the person who has it, has undertaken to discharge for him against whom he pleads adverse posses:sion. The possession of Lord Clinton was adverse; it had been said that it was taken by consent, founded on mistake; but that did not make the possession the less adverse, because Lord Clinton took, and kept it for himself, where he owed, as it appeared to him. no duty to Lord Orford. He concluded by stating his opinion to be, that adverse possession of an equity of redemption for twenty years, was a bar to another person claiming the same equity of redemption, and worked the same effect, as disseisin, abatement, or intrusion, with

scribing witnesses, this deed was recorded in 1814, and the defendants are willing to convey, if directed so to do.

The defendants farther state that the plain. tiff's original claim on the said 30,000 acres of land, was to only a moiety thereof, the other moiety being the property of the locator, which has been transferred to the defendants. The said Banks assigned the survey to J. Harvie, that the patent might issue in his name, in trust for the person entitled to the locator's moiety, and the title still remains in [*184 Harvie's heirs, encumbered by debts due from Banks to Harvie, and by an obligation in which Harvie was bound to Thomas Madison, as surety for Banks, for the conveyance of military lands north-west of the Ohio. To obtain a title from Harvie, the said Carneal, in September, 1799, bound himself to pay the debt due from Banks, with Harvie as his security, to Madison, on condition that Banks would deliver him military land-warrants to the amount of 4,300 acres; and it was expressly stipulated that Carneal should retain the title to the said 2,000 acres of land until Banks should perform this contract. He requires the plaintiff to show how he has performed it. They understand that Harvie's heirs have a claim on the estate of their ancestor, of which they know nothing certain, and aver that the title to the locator's moiety of the said 30,000 acres of land remains in the said heirs. The defendants, then, pursuing a practice authorized by law in the state courts of Kentucky, pray that their answer may be received as a cross bill; and that Harvie's heirs, as well as Banks, may be made defendants to it, and may answer it; and that the whole controversy may be settled.

conveyed to T. Carneal the moiety of the said On the 20th of September, 1799, J. Harvie patent for 30,000 acres, which had been sold by the said banks to Carneal.

On the same day, the following agreement was entered into:

"Thomas Carneal agrees to pay John Preston or John Harvie, 3,200 acres of military land, lying on the north-west side of the [*185 river Ohio, surveyed on or before the 10th day of October, 1795, to satisfy a bond executed by respect to legal estate; and that, for the quiet and peace of titles, and the world, it ought to have the same effect. Lord Redesdale concurred, and the decree was affirmed.

Although, in general, lapse of time is not a bar to a direct trust, as between trustee and cestui que trust, so long as there is a continuing and subsisting trust acknowledged and acted upon between the parties, yet this must be understood as applying to such trusts only as are the creatures of a court of equity, or strict technical trusts, and not to those which are within the cognizance of a court of law; for, in regard to all those trusts which are the ground of an action at law, and where there is a concurrent jurisdiction at law, and in equity, the rule is the same, and the statute is a bar, both in a court of law and equity. Kane v. Bloodgood, 7 Johns. Ch. Rep. 90, 127. And, though in cases of trusts peculiarly and exclusively of equity jurisdiction, the statute does not apply, yet, if the trustee denies the right of the cestui que trust, and the possession of the property becomes adverse, lapse of time may constitute a bar in equity. Ib. And where a person takes possession of property in his own right, and is, afterwards, by evidence or construction, changed into a trustee, he may insist on the lapse of time as a bar. Decouche v. Savatier, 3 Johns. Ch. Rep. 190.

is too well established to be disregarded. It is on this fact only, that the Circuit Court has rescinded the contract, and we do not think there is any other cause which would justify its being set aside. The alleged alienage of Lacassaign constitutes no objection. Had the fact been proved, this court decided, in the case of Chirac v. Chirac (reported in 2 Wheat. Rep., 259), that the treaty of 1778, between the United States and France, secures to the citizens and subjects of either power the privilege of holding lands in the territory of the other; and the omission to record the deed in time may involve the title in difficulty, but does not annul it. That circumstance might oppose con siderable obstacles to a decree for a specific performance, if sought by Carneal's heirs, but does not justify a decree to set aside the contract. There is no subsequent purchaser, nor is it certain that the title which Carneal's heirs can make, will or can ever be disturbed by the creditors of Lacassaign. In such a state of things, there is, perhaps, no sufficient cause for the interference of a court of equity. Did this court, then, concur with the Circuit Court in its construction of the contract between Banks and Carneal, the decree could not be affirmed, because the parties have not put that fact in issue. But the majority is rather dis190*] posed to the opinion that the words "lying on Green River," as used in this contract, with reference to a specific conveyance expressly mentioned, which contains within itself information which could not fail to suggest the idea that the land did not, in fact, bind on the river, may be satisfied with the land actually conveyed by Lacassaign to Carneal. The omission of Banks to charge Carneal with a misrepresentation in this respect, countenances this explanation. At all events, the fact, if relied upon by him, ought to have been put in issue, so as to give Carneal's heirs an opportunity of controverting it, and of bringing before the court such facts as might shed light upon it.

Were this construction to be established, and were there no equitable objections to allowing Banks the full benefit of his contract, a specific performance might be decreed; but the bill seeks to rescind the contract, and contains no prayer for general relief.

There are, too, on the part of Carneal's heirs, weighty objections to such a decree at this time.

3. The third error assigned is, that Banks has no right to relief in equity until he releases Carneal's representatives from their undertak: ing to Harvie; and Carneal's heirs have a right in equity to retain the title to the 2,000 acres of land, as an indemnity for that undertaking. The testimony on this part of the cause is far from being satisfactory.

The contract of the 20th of September, 1799, is expressed in such vague terms as to leave it 191*] in *some measure doubtful whether Carneal would not have been discharged from the obligation it imposed, on the failure of Cuthbert Banks to deliver the military landwarrants for which it stipulates within ninety days after they should be demanded in Lexing ton. But it does not appear that they have ever been demanded; and the fact that Har

vie's conveyance of the land sold by Banks to Carneal was executed on the same day with this contract, goes far in showing that the parties understood the obligation of Carneal to be absolute. The subsequent letters of Harvie to Carneal show his opinion that the obligation of the contract continued; and the admission of Banks, in the cause, goes to the same point. The court must therefore consider Carneal's heirs as still liable for the debt due from Banks, with Harvie as his security, to Madison's estate.

It is alleged that Banks agreed that the title to the 2,000 acres of land should remain in Carneal as an indemnity for this undertaking; but this allegation is totally unsupported by evidence.

Carneal's heirs also charge that they, or some of them, have purchased the interest of the locator in the 30,000 acre tract, and that Harvie's heirs retain the title till Madison's claim shall be adjusted; but of this there is no proof.

Since, however, the legal title to the land sold by Carneal to Banks remains in the heirs of the vendor, the court is not satisfied that equity will force it from them, or compel them to make compensation in money for any breach of the contract, *until Banks shall in- [*192 demnify them for the undertaking of their an

cestor on his account.

It is unnecessary to proceed farther in the examination of this case, because the court is of opinion that for the errors already stated, the decree of the Circuit Court ought to be reversed, and the bill be dismissed without prejudice.

Decree reversed.

[Chancery. Res Adjudicata. Lex Loci.] M'CORMICK et ux., et al., Appellants,

V.

SULLIVANT et al., Respondents.

The courts of the United States are courts of limited, but not of inferior jurisdiction. If the jurisdiction be not alleged in the proceedings, their judgment and decrees may be reversed for that cause, on a writ of error and appeal; but, until reversed, they are conclusive evidence between parties and privies.

The title and disposition of real property is governed by the lex loci rei sita.

cording to the laws of the state or country where The title to lands can only pass by devise, acthe lands lie. The probate in one state, or country, is of no validity as affecting the title to lands in another.

NOTE. As to jurisdiction of federal courts, see

notes to 1 L. ed. U. S. 489, 640; 2 L. ed. U. S. 435, 654; 3 L. ed. U. S. 36; 4 L. ed. U. S. 97, 124, 404.

That title and transfer of real property by

will and devise are governed by laws of state or country where situated, see notes to 5 L. ed. U. S. 335; post, 290, 367, 583; 2 L.R.A. (N.S.)415.