Greenleaf v. Land & Lumber Co., 146 N.C. 505 (1908)

Feb. 19, 1908 · Supreme Court of North Carolina
146 N.C. 505


(Filed 19 February, 1908).

1. Corporations — Parties—Receivers, Courts of Equity Appoint, When.

While it is more orderly to proceed under Revisal, sec. 1196, to appoint a receiver for a corporation, such may be done in a court of equity wherein, under the decree, all parties are before the court or thereunder will be brought in, and the same relief awarded as if the provision of the statute had been complied with.

2. Corporations — Receivers—Application of Funds.

In proceedings in equity to administer upon the assets of an insolvent corporation, it is competent for the courts in proper instances to appoint a receiver, and instruct him to sell the property, after ascertaining the names of creditors, the amounts due them and the interest of stockholders, and before final judgment declare a dissolution and direct the funds to be administered in accordance with the rights of the parties.

3. Corporations — Deed by President to Himself — Uses and Trusts— Consideration.

A convesmnce of land, made by one to himself as president of a corporation, reciting that he had purchased it as agent for said *506company, is ineffectual to convey the title, but is a valid declaration of an express trust in favor of the corporation, upon a valuable consideration.

4 Uses and Trusts — Express Trusts — Statute of Limitations, Accrues When — No Adverse Holding. ,

The statute of limitations does not begin to run against an express trust except from the time the right or cause of action accrues; and when such is impressed upon lands and there is no holding adverse thereto as expressed in the deed, the statute cannot successfully be pleaded in bar.

Civil actioN, beard before W. B. Allen, J., at September Term, 1907, of the Superior Court of PasquotaNK County.

By consent, the court passed upon the facts and law.

Judgment for plaintiff. Defendant Underwood appealed.

The admissions in the pleading's and recitals in the judgment disclose this case: Prior to 25 September, 1869, the Land and Lumber Company was chartered and organized, with William Underwood as its president. On the said 25 September, 1869, said William Underwood, together with Joseph Underwood, executed a deed containing the following language, material to a decision of this appeal: “This indenture, made and entered into by and between William Under-wood and Lorane J., his wife, and Joseph Underwood and Ann Ada, his wife, as parties of the first part, and the Land and Lumber Company of North Carolina, party of the second part: Witnesseth, that, whereas the said William and Joseph Un-derwood have at various times purchased, as agents for the said Land.and Lumber Company, certain real estate, which they wish to convey to said company: Now, therefore, for and in consideration of the premises, and the further consideration of ten dollars, * * * we, the parties of the first part, have given, granted, bargained and sold * * * unto him, the said William Underwood, president of the Land and Lumber Company of North Carolina, and his successors in office, the following tracts of land: * * * To have and to hold all the above-bounden land, * * * to him, *507tbe said William TJnderwood, president of the Land and Lumber Company of North Carolina, and his successors in office, to hold the same for the use and benefit of said company in fee simple, forever.” It is conceded that the land described in the deed is the same as that referred to in the complaint. The Land and Lumber Company ceased to do business about twenty-five years ago. William Underwood is dead, and the defendants are his heirs at law. The land in controversy is woodland, and no person was in the actual possession prior to 1900, when defendant Zimmerman went into possession pursuant to a tax deed. William Underwood acquired title under one Hinton. Plaintiff owns shares of stock in said corporation. There are no officers of said corporation in existence and no organization is maintained. Plaintiff avers that there are no debts outstanding. His Honor was of the opinion “that the deed of 25 September, 1869, is a declaration that the title to said land is held in trust for the Land and Lumber Company, making it the equitable owner thereof.” He rendered judgment, appointing a receiver of said company, directed said receiver to advertise for creditors and stockholders,-etc., and to report to the next term of the court, retaining the cause for further orders. Defendants excepted and appealed.

Aydlett & JEhringhaus for plaintiff.

Pruden & Pruden, Shepherd & Shepherd and W. M. Bond for defendants.


after stating the case: Defendants insist that the plaintiff cannot maintain the action, for that the corporation, the Land and Lumber Company, has not been dissolved in accordance with the provisions of the statute (Revisal, sec. 1196). It must be conceded that a proceeding instituted and prosecuted pursuant to the statute would have been more orderly. We can perceive no good reason, however, for dismissing this action, wherein all parties in interest are now or, under his Honor’s order, will be brought into court and the *508same relief awarded as if tbe provisions of tbe statute bad been complied with. TIis Honor’s order is in strict accord with that which would have been made in tbe statutory proceeding. Tbe receiver will, under tbe orders of tbe court, sell tbe property, after ascertaining tbe names of the creditors, if there be any, and tbe amounts due them, and the interest of tbe stockholders. Tbe title to tbe property of tbe corporation is vested in it upon these trusts. Before any final judgment is rendered, a dissolution will be declared and tbe fund administered in accordance with tbe rights of tbe parties. This is an equitable proceeding, and it is competent for tbe court, under its jurisdiction, to administer trust funds and mould its decrees so that tbe rights of all beneficial owners are protected.

Tbe defendants insist that tbe deed, or paper-writing, executed by William and Joseph Underwood on 25 September, 1869, is ineffectual to convey tbe title, because Underwood could not be tbe grantor and grantee in tbe same deed. His Honor concurred in that view and held that tbe deed was a valid declaration of a trust, thereby attaching to tbe legal title, which remained in Underwood, an express trust for tbe corporation. We concur with bis Honor’s opinion. Tbe recitals in tbe deed show that tbe property was purchased by Underwood as agent for tbe corporation. Tbe declaration of trust is sustained by these recitals and a recited valuable consideration. The learned counsel for defendants insists that no express trust is declared, but that tbe paper-writing is only evidence upon Avhieh the court may declare a trust; that tbe plaintiff, claiming through tbe corporation, is barred from enforcing this equity by lapse of time. It is conceded that, if tbe premises be correct, tbe conclusion follows. Tbe statute never runs -against tbe enforcement of an express trust until by some declaration or act of tbe trustee an end is put to tbe relation of trustee and cestui c[ue trust, and tbe latter is put to bis action. If tbe equity consists of a right on tbe part of tbe *509plaintiff to call upon tbe court to declare tbe bolder of tbe legal title a trustee for any of tbe causes recognized by courts of equity, tbe statute runs from tbe time tbe right or cause of action accrues. Tbe distinction is universally recognized and enforced; it is conceded by tbe learned counsel for defendants. He seeks to bring tbe case witbin tbe class of trusts created by operation of law or tbe decree of tbe court. We concur with bis Honor that tbe language of tbe deed executed by Under-wood is a declaration of an express trust, and that no act bas been done by Underwood or bis representatives to put an end to tbe relationship. They never took actual possession of tbe land or asserted any ownership inconsistent with tbe declaration in tbe deed. It seems that, some seven years ago, the land was purchased by defendant Zimmerman for taxes, and be entered into possession. Judgment was rendered adversely to bis claim, and be does not appeal. Tbe interlocutory judgment of bis Honor must be affirmed. Tbe receiver will proceed as directed. Let this be certified.