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30 L.Ed. 718
U.S.
Supreme Court
SPEIDEL
and another, Executors, etc.,
v.
HENRICI
and another, Trustees, etc. [FN1]
120
U.S. 377, 7 S.Ct. 610
March
7, 1887
Appeal
from the Circuit Court of the United States for the Western
District of Pennsylvania.
West
Headnotes
Equity
k71(1)
150k71(1)
In
case of an implied or constructive trust, unless there has
been a fraudulent concealment of the cause of action, lapse
of time is as complete a bar in equity as at law.
Equity
k219
150k219
When
a bill in equity shows on its face that plaintiff, by reason
of lapse of time, and of his own laches, is not entitled
to relief, the objection may be taken by demurrer.
Trusts
k365(5)
390k365(5)
A former
member of a "community" sought by bill in equity, brought
more than 50 years after he had left it, to recover a share
of the property, alleging fraud and false representations
upon the part of the originator of the society in inducing
the members to give up their property, and claiming that
the property was accepted and held by the originator and
his successors in trust for the common benefit of the members.
Held, upon demurrer, that the bill could not be maintained
on the ground of an implied or constructive trust since
that would be barred by lapse of time.
**611
*385 Wm. Reinecke, Geo. Hoadly, E. M. Johnson, and
Edwd. Colston, for appellants.
George
Shiras, Jr., for appellees.
GRAY,
J.
This
bill was filed against the trustees of the Harmony Society,
an unincorporated association of persons living together
as a community, by a former member of the society, claiming
a share in property in the hands of the trustees. The bill
is sought to be maintained on the ground that the trust
was not a charity, in the legal sense, and the members of
the society were equitable tenants in common of the property
held in trust. The learned counsel for the appellants differ
in their views of the trust; the one insisting that it was
unlawful, because founded in fraud and against public policy,
and should therefore be dissolved; and the other contending
that it was a lawful and continuing trust. We have not found
it necessary to consider which of these is the sound view,
because we are of opinion that the plaintiff did not show
himself to be entitled to invoke the interposition of a
court of equity.
*386
As a general rule, doubtless, length of time is no bar to
a trust clearly established, and express trusts are not
within the statute of limitations, because the possession
of the trustee is presumed to be the possession of his
cestui que trust. Prevost v. Gratz, 6 Wheat.
481, 497; Lewis v. Hawkins, 23 Wall. 119,
126; Railroad Co. v. Durant, 95 U. S. 576.
But this rule is, in accordance with the reason on which
it is founded, and as has been clearly pointed out by Chancellor
KENT and Mr. Justice STORY, subject to this qualification:
that time begins to run against a trust as soon as it is
openly disavowed by the trustee insisting upon an adverse
right and interest which is clearly and unequivocally made
known to the cestui que trust; as when, for instance,
such transactions take place between the trustee and the
cestui que trust as would, in case of tenants in common,
amount to an ouster of one of them by the other. Kane
v. Bloodgood, 7 Johns. Ch. 90, 124; Robinson
v. Hook, 4 Mason, 139, 152; Baker v. Whiting,
3 Sum. 475, 486; Oliver v. Piatt, 3 How. 333,
411. This qualification has been often recognized in the
opinions of this court, and distinctly affirmed by its latest
judgment upon the subject. Willison v. Watsins,
3 Pet. 43, 52; Boone v. Chiles, 10 Pet.
177, 223; Seymour v. Freer, 8 Wall. 202 218;
Bacon v. Rives, 106 U. S. 99, 107, 1 Sup. Ct.
Rep. 3; Philippi v. Philippe, 115 U. S. 151,
5 Sup. Ct. Rep. 1181. In the case of an implied or constructive
trust, unless there has been a fraudulent concealment of
the cause of action, lapse of time is as complete a bar
in equity as at law. Hovenden v. Annesley,
2 Schoales & L. 607, 634; Beckford v. Wade,
17 Ves. 87. In such a case, Chief Justice MARSHALL repeated
and approved the statement of Sir THOMAS PLUMER, M. R.,
in a most important case in which his decision was affirmed
by the house of lords, that, 'both on principle and authority,
the laches and non-claim of the rightful owner of an equitable
estate, for a period of 20 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 analogy **612 to the statute
of limitations, if, *387 during all that period,
the possession has been 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.' Elmendorf v. Taylor,
10 Wheat. 152, 174; Cholmondeley v. Clinton,
2 Jac. & W. 1, 175, and 4 Bligh, 1. Independently of
any statute of limitations, courts of equity uniformly decline
to assist a person who has slept upon his rights, and shows
no excuse for his laches in asserting them. 'A court of
equity,' said Lord CAMDEN, 'has always refused its aid to
stale demands, where the party slept upon his rights, 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
discountenanced, and therefore, from the beginning of this
jurisdiction, there was always a limitation to suits in
this court.' Smith v. Clay, 2 Amb. 645, 3
Brown, Ch. 640, note. This doctrine has been repeatedly
recognized and acted on here. Piatt v. Vattier,
9 Pet. 405; McKnight v. Taylor, 1 How. 161;
Bowman v. Wathen, 1 How. 189; Wagner v.
Baird, 7 How. 234; Badger v. Badger, 2
Wall. 87; Hume v. Beale, 17 Wall. 336;
Marsh v. Whitmore, 21 Wall. 178; Sullivan v.
Portland & K. R. R., 94 U. S. 806; Godden
v. Kimmell, 99 U. S. 201. In Hume v. Beale,
the court, in dismissing, because of unexplained delay in
suing, a bill by cestuis que trust against a trustee
under a deed, observed that it was not important to determine
whether he was the trustee of a mere dry legal estate, or
whether his duties and responsibilities extended further.
17 Wall. 348. See, also, Bright v. Legerton,
29 Beav. 60, and 2 De Gex, F. & J. 606. When the bill
shows upon its face that the plaintiff, by reason of lapse
of time and of his own laches, is not entitled to relief,
the objection may be taken by demurrer. Maxwell v.
Kennedy, 8 How. 210; National Bank v. Carpenter,
101 U. S. 567; Lansdale v. Smith, 106 U. S.
391, 1 Sup. Ct. Rep. 350.
The
allegations of this bill, so far as they are material to
the defense of laches, are in substance as follows: *388
The Harmony Society is a voluntary association, formed in
1805 by the plaintiff's parents and other heads of families,
who had emigrated from Germany under the leadership of one
Rapp, and become subject to his control in both spiritual
and temporal affairs. In that year, Rapp, for the purpose
of acquiring absolute dominion over their means and mode
of living, falsely and fraudulently represented to them
that they could not be saved from eternal damnation except
by renouncing the plan of a separate home for each family,
yielding up all their possessions, as had been done by the
early Christians, and laying them at the feet of Rapp as
their apostle, to be put into a common fund of the society,
and thenceforth living as a community under his control,
receiving in return only the necessaries of life; and they,
induced by and relying on his false and fraudulent representations,
immediately yielded up all their possessions to the common
fund of the society, and placed the fund in his keeping
as their trustee, and thenceforth lived as a community or
common household, submitted themselves and their families
to do for the community such work as he directed, allowed
the avails thereof to form part of the common fund, and
relinquished to him and his successors in the leadership
of the community the management of the trust fund and the
control of their own persons and those of their wives and
children, and received only the necessaries of life in return.
Rapp received and accepted the trust fund, and all the accretions
to it by the work of the inhabitants of the community or
otherwise, not as his own, but in trust for the members
of those families and the contributors to the fund, and
for their common benefit; and always, up to his death in
1847, recognized and acknowledged said trust, and disclaimed
any greater interest in the fund than that of any other
contributor, and any other right to its management and control
than by virtue of his leadership of the community. In 1807
Rapp **613 obliged his followers to abjure matrimony,
and thenceforth did not permit them to marry in the community,
and compelled any one about to marry to leave it. The plaintiff
was born in the community in 1807, and was reared in and
as a part of it, under Rapp's teachings and control, and
faithfully*389 worked for it from the age of 12 to
the age of 24 years, and allowed the avails of his work
to become part of the common fund, and received in return
nothing but the necessaries of life, which were of far less
value than the avails of his work; and in 1831, being about
to marry, had to leave and did leave the community. The
trust fund so received and accepted by Rapp, with its profits,
interest, and accretions, now amounts to $8,000,000, and
yields an annual income of $200,000, and is held by the
defendants on the same trust on which Rapp held it in his
life-time; and neither Rapp nor the defendants ever rendered
any account to the plaintiff or to the beneficiaries of
the fund, although the plaintiff, before bringing this suit
in May, 1882, demanded of the defendants an account and
a settlement of his share. The trust on which Rapp, and
the defendants as his successors, held the common fund of
the Harmony Society, is described in one place in the bill
as 'for the members of said families and the contributors
of said fund, and for their common benefit;' that is to
say, as is clearly explained by what goes before, in trust
for their common benefit as a community, living together
in the community, working for the community, subject to
the regulations of the community, and supported by the community.
This was the 'said trust,' which, as the bill afterwards
alleges, Rapp, up to his death, and his successors, until
the bringing of this suit, 'always recognized and acknowledged.'
The constant avowal of the trustees that they held the trust
fund upon such a trust is wholly inconsistent with and adverse
to the claim of the plaintiff that they held the fund in
trust for the benefit of the same persons as individuals,
though withdrawn from the community, living by themselves,
and taking no part in its work. The plaintiff, upon his
own showing, withdrew from the community in 1831, and never
returned to it, and, for more than 50 years, took no step
to demand an account of the trustees, or to follow up the
rights which he claimed in this bill. If he ever had any
rights, he could not assert them after *390 such
a delay, -- not on the ground of an express and lawful trust,
because the express trust stated in the bill, and constantly
avowed by the trustees during this long period, was wholly
inconsistent with any trust which would sustain his claim;
not on the ground that the express trust stated in the bill
was unlawful and void, and therefore the trustees held the
trust fund for the benefit of all the contributors in proportion
to the amounts of their contributions, because that would
be an implied or resulting trust, and barred by lapse of
time. In any aspect of the case, therefore, if it was not
strictly within the statute of limitations, yet the plaintiff
showed so little vigilance and so great laches, that the
circuit court rightly held that he was not entitled to relief
in equity.
It
is proper to add that this decision does not rest in any
degree upon the judgments of the supreme court of Pennsylvania
and of this court, in the cases cited at the bar, in favor
of the trustees of the Harmony Society in suits brought
against them by other members, because each of those cases
differed in its facts, and especially in showing that the
society had written articles of association, which are not
disclosed by this bill. Schriber v. Rapp,
5 Watts. 351; Baker v. Nachtrieb, 19 How.
126.
Decree
affirmed.
Footnote
[Footnote
1] Affirming 15 Fed. Rep. 753.
Reprinted from Westlaw with permission of Thomson/West. If you wish to check the currency of this case, you may do so using KeyCite on Westlaw by visiting http://www.westlaw.com/.
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