Griffin v. Blanchar

Citations

• 17 Cal. 70

Syllabus

<p>The trustee of a naked trust has no power to mortgage the trust estate.</p> <p>Where the trustee of a naked trust is in actual possession of the trust estate, and conveys it, for a valuable consideration, to a purchaser without notice of the trust, the title of the purchaser will prevail.</p> <p>Plaintiff conveyed to Mrs. B., with the consent of her husband, a tract of land in trust for certain children of Mrs. B. by a former marriage. The conveyance acknowledged the payment of a consideration of $12,000, but no part of this sum was actually paid. To secure its payment, together with other indebtedness, Mrs. B. and her husband executed their promissory notes, and a mortgage upon other property also held by her in trust for her children. By a subsequent arrangement between the parties, these securities were given up and canceled, and other notes of the same character executed, with a mortgage upon both pieces of property to secure their payment. Plaintiff seeks to enforce a lien against the property for the amount of these notes : Held, that as the plaintiff had actual notice of the trust, no equity was created in his favor by the execution of the mortgage, and that the mortgage as such was void; that his lien as vendor was waived by the acceptance of the personal security of Mrs. B. and her husband, and his only remedy is personal action on the notes.</p> <p>Any conduct which shows an intention on the part of a vendor of real estate to give up his lien for the purchase money, will be a bar to its assertion, and the acceptance of collateral security raises the presumption of such intention— though this presumption may be rebutted by evidence.</p> <p>After plaintiff has obtained judgment on the notes in this case, he may subject the property to its payment. A Court of Equity would hold the property as that of Blanchar and wife, responsible for their debts before it goes as a mere donation to the children. Baldwin, J.</p>