66 conveyance also furnishes the money to pay for the same,1 nor where a person conveys land to another absolutely, under an agreement that he shall reconvey upon request.2 "A trust," says the court in a Massachusetts case, 8 "must result, if at all, at the instant the deed passes," and this is the general rule. Where it is attempted to avoid the bar of the statute on the ground that the possession of the defendant is fiduciary, it must be shown that it is fiduciary in respect to the plaintiff, or those under whom he claims; it is not sufficient that it is fiduciary as to a third person.5 It is held SEC. 202. Assignees in Bankruptcy, Insolvency, &c. that an assignee in bankruptcy, after the property of the bankrupt is vested in him, becomes a trustee for the creditors, and from that time the statute ceases to run against them." In the case last cited, upon appeal, the Lord Chancellor said: "The effect of the commission is clearly to vest the property in the assignees for the benefit of the cred Johnson v. Dougherty, 18 N. J. Eq. 406; Williams v. Hollingsworth, 1 Strobh. (S. C.) Eq. 103; Thomas v. Walker, 6 Humph. (Tenn.) 93; Taliafero v. Taliafero, 6 Ala. 404; Dorsey v. Clarke, 4 H. & J. (Md.) 551; Claussen v. La Franz, 2 Iowa, 437; Murdock v. Hughes, 15 Miss. 219; Paul v. Choteau, 14 Mo. 580; Hollis v. Hayes, 1 Md. Ch. 479; Bank v. Carrington, 7 Leigh (Va.), 566; Creed v. Lancaster Bank, 1 Ohio St. 1; Ragan v. Walker, 1 Wis. 527; Pinney v. Fellows, 15 Vt. 512. 1 Dorsey v. Clarke, 4 H. & J. (Md.) 551; Fawke v. Slaughter, 3 A. K. Mar. (Ky.) 56. In Sample v. Coulson, 9 W. .& S. (Penn.) 62, it is held that a trust in lands cannot be established by the proof of parol declarations made by the purchasers of land, at or after the sale; there being no allegation of the payment of money by the cestui que trust, or fraud, whereby a resulting trust would be established. The rule is that a trust can only arise in favor of a party who pays the whole or some part of the purchase-money at the time the purchase is made, and, after the title has once passed, without fraud, a trust cannot be raised by implication, so as to divert the legal title by the subsequent application of the funds of a third person to pay the whole or a part of the purchase-money. Gee v. Gee, 32 Miss. 190; Francestown v. Deering, 41 N. H. 438; Pinnock v. Clough, 16 Vt. 500; Alexander v. Tams, 13 Ill. 221; Cut- that the part payment must be a definite 2 Dean v. Dean, 6 Conn. 284; Titcomb v. Morrill, 10 Allen (Mass.), 15. 3 Gould v. Lynde, 114 Mass. 366. 4 Midmer v. Midmer, 26 N. J. Eq. 299; Sale v. McLean, 29 Ark. 612; Payne v. Patterson, 77 Penn. St. 124. 5 Spotswood v. Dandridge, 4 H. & M. (Va.) 139. & Ex parte Ross, 2 Glyn & Jam. 46. 7 Ex parte Ross, 2 Glyn & Jam. 330. 1 itors, and therefore they are in fact trustees; and it is an admitted rule that unless debts are already barred by the statute of limitations when the trust is created, it is not afterwards affected by lapse of time." The same rule also applies to insolvent debtors who avail themselves of insolvency statutes, or who are forced into insolvency by their creditors, and the statute is suspended from the time when notice of the proceedings is given in the manner provided by law. So, too, this 1 In re Eldridge, 12 Nat. B. R. No. 12, braces legal actions, yet, in all cases of con1875. 2 Minot v. Thacher, 7 Met. (Mass.) 348. In the Matter of Leiman, 32 Md. 225, 3 Am. Rep. 132, this question came before the Supreme Court of Maryland, and the authorities were carefully reviewed by ROBINSON, J., who said: "The main question in these appeals is, whether the statute of limitations continues to run against the creditors of an insolvent debtor, after his application, and before an audit and order of the court distributing the insolvent estate. Important as this question is, it comes now before this court for the first time for decision. In the absence, how ever, of direct authority to guide us, we think there can be but little difficulty in its determination upon principle. "It is unnecessary to cite authorities to support the long-established doctrine that, as between the cestui que trust and the trustee, in the case of an express subsisting trust, length of time constitutes no bar to relief. Such is the privity existing between them, the possession of the one is the possession of the other, and if the trustee fails to perform the trust, his possession is not adverse, but according to his title. Lewin on Trusts and Trustees, 612; Hovenden v. Lord Annesley, 2 Sch. & Lef. 633. "In regard, however, to implied or constructive trusts, arising by operation of law, the rule is different, because it rarely happens that such trusts are admitted or recognized by the parties; and, moreover, the facts out of which they spring, necessarily, from their very nature, presuppose an adverse claim of right on the part of the trustee. Hill on Trusts, 264. The remedy, therefore, of the cestui que trust in such cases is put upon the same footing of other equitable rights, and although the statute of limitations in terms only em current jurisdiction, where a party has a legal and equitable remedy in regard to the same subject-matter, courts of equity obey the law, and give to the statute the same effect and operation in the one court as in the other. Dugan v. Gittings, 3 Gill (Md.) 138; Hertle v. Schwantze, 3 Md. 383; Kane v. Bloodgood, 7 Johns. (N. Y.) Ch. 90. The question, therefore, as to whether the statute operates as a bar in these appeals, must depend upon the nature and character of the trust created by the operation of the insolvent laws of this State, for it is clear, by all the authorities, that if it be an express trust, the plea of the statute cannot avail as against the cestui que trust. Now, by the insolvent laws of this State, the debtor, in consideration of his discharge from the payment of his debts, is required to convey and deliver to a trustee, appointed by the court, all of his property of every kind and description, in trust for the benefit of creditors, being such at the time of application in insolvency, and, for the faithful performance of his trust, the trustee is obliged to give his bond, with approved security. The property, thus being vested in the trustee, is no longer within the reach of process by the creditors, and the insolvent, being discharged from the payment of his debts, is no longer liable to suit, and the trustee being answerable only for a breach of trust, no proceedings can be instituted against him until the ratification of the audit, because, until then, and notice thereof, he is not guilty of a breach of trust. Williams v. Williams, 3 Md. 163; Buckey v. Culler, 18 id. 418. It is clear, therefore, that the rights of creditors must be worked out through the medium of a trust, the property affected by which, the code provides, shall be distributed according to the prin rule applies when an insolvent debtor makes an assignment under the statute for the benefit of his creditors, and it is held in such cases that ciples of equity, and the trustee thereof subject to the same control of the court as trustees appointed by a decree in equity. "Here, then, is an express subsisting trust, created by statutory enactment, the uses, terms, and conditions of which are declared, the property affected by the trust ascertained and defined, and the cestuis que trust, namely, the creditors of the insolvent at the time of his application, designated with as much certainty and precision as if they were severally named in the deed of trust. The acts of the trustee in converting the property into a fund for distribution, and in preparing the subject matter of the trust for the action of the court, are to be considered as the active assertion of the rights of the creditors, the cestuis que trust as against the property, and it cannot be that the delay incident to the execution of the trust shall work to their prejudice or injury. And hence, in Ex parte Ross, 2 Glyn & Jam. 46, the Vice-Chancellor said, 'that after a commission issued, the statute of limitations did not run against a creditor; that the commission was a trust for the benefit of all the creditors, and it was a known principle that the statute did not run against a trust.' This decree was, upon appeal, affirmed by the Lord Chancellor, who held that, 'whatever may be the technical objection, the effect of the commission is clearly to vest the property in the assignees for the benefit of the creditors; they are, therefore, in fact, trustees; and it is an admitted rule, that, unless debts are already barred by the statute of limitations when the trust is created, they are not afterward affected by lapse of time.' Also, in Minot v. Thatcher, 7 Met. (Mass.) 348, it was held, under the insolvent laws of Massachusetts, that the statute did not run against the creditors of the insolvent after the publication of the messenger. JUSTICE DEWEY, in delivering the opinion of the court, said: 'By force and effect of the appointment of a messenger, and the publication thereof conformably to the statute, the property of the insolvent debtor is sequestered for the benefit of all the then existing creditors. After such a publication, a suit by a creditor would be of no avail, as the property is all transferred to the assignee, and the body of the debtor is to be discharged from arrest on execution. The debts presented for allowance against the insolvent are to be considered with reference to their validity at the date of the publication by the messenger, and unless barred at that time they must be allowed.' Any other rule would be obviously unjust. Take the case of a creditor, whose debt will not be barred for at least a year; he knows that, under the statute, he has until within the last day of the year within which to bring suit; but, before that time, the debtor becomes insolvent, and his right of action is gone. Now, if the principle contended for by the appellee be correct, and more than a year should elapse before the insolvent estate is ready for an audit, the insolvent, or his assignee, could interpose the plea of the statute, and thus defeat the claims of creditors. In this view we do not concur, but are of opinion that after the application in insolvency, and during the execution of the trust, the statute does not operate against the then existing creditors. "This construction certainly accords with the plainest principles of justice in these appeals. Here was attempt, on the part of the insolvent debtor, to cheat and defraud his creditors. Having fraud. ulently conveyed his property for that purpose, he applies for the benefit of the insolvent laws, and declares, in the schedule annexed to his petition, he has no property liable for his debts. After his final discharge, Schaferman, the fraudulent grantee, reconveys the property to Leiman, the insolvent debtor, and he in his turn, in eonsideration of one dime, conveys it to his son. The trustee in insolvency refuses, upon the application of the creditors, to file a bill in equity assailing the fraudulent conveyance, and the creditors are obliged themselves to institute proceedings. After a long and protracted litigation, extending from the court below to the court of last resort, the conveyance is condemned as being fraudulent, and the property directed to be sold; and, when the proceeds of sale are brought into court for the purpose the statute ceases to run from the date of the assignment.' The discharge of a debtor under insolvent laws does not suspend the running of the statute in his favor.2 SEC. 203. Cestui que Trust in Possession. Where a cestui que trust under an express trust is in possession of the trust estate, he is held to occupy the relation of tenant at will to the trustee, and consequently no lapse of time will give him a title as against the trustee. But this rule only holds as between the trustee and cestui que trust, and does not apply where an assignee of the cestui que trust, or other person claiming under him, is in possession, as such persons are not precluded by the fact that the property is subject to a trust from availing themselves of the benefit of the statute; nor does it apply to a constructive trustee in possession, as a purchaser holding under an agreement to purchase. This latter doctrine was affirmed in a case before the United States Supreme Court, and the court say: "Equity makes the vendor without deed a trustee for the vendee for the conveyance of the title; the vendee being distributed among the creditors, the plea of limitations is interposed by the assignee of the insolvent debtor on the one hand, and by the assignee of the fraudulent grantee, Schaferman, on the other. If the plea of the statute could avail under such circumstances, if the delay incident to the execution of the insolvent trust, and occasioned by the fraudulent acts of the very parties under which these assignees now claim, could operate to defeat the pay ment of honest creditors, it would indeed be a just reproach to the administration of the law. While it is true that a court of equity extends a reluctant hand of relief in case of stale demands, where a party has slept upon his rights, and where time and long acquiescence have obscured the true nature and character of the trust, it will never visit upon a party the consequences of a delay for which he is in nowise respon sible, nor hold him guilty of laches in not prosecuting his demands when there was no process by which they could be enforced. "The case is widely different from a creditor's bill, because there the creditor has no one to represent him until his claim is filed. Moreover, the death of the debtor does not suspend the right of action on the part of the creditor, he may still sue the administrator or executor, and, if there should be an insufficiency of the personal estate, he may file his bill for the sale of the real estate. "In Strike's Case, 1 Bland. (Va.) 57, the proceeding was to set aside certain fraudulent conveyances, and for a sale of the property for the benefit of creditors, and although in the disposition of some of the questions which arose, the Chancellor likened it to a case of insolvency, the distinct question in regard to the statute of limitations raised by these appeals did not arise, and cannot be said to have been directly passed upon. No such question was decided by this court in Strike v. McDonald & Son, 2 H. & G. (Md.) 191." 1 Willard v. Clark, 7 Met. (Mass.) 435. In Heckert's Appeal, 24 Penn. St. 482, the court held that an assignment for the benefit of creditors is a trust exclusively cognizable in equity, and that the trustee could not interpose the statute of limitations to the claim of a creditor. 2 Shoenberger v. Adams, 4 Watts (Penn.), 436; Gest v. Heiskell, 5 Rawle (Penn.), 136; West v. Creditors, 1 La. An. 365. 8 Freeman v. Barnes, 1 Vent. 86. 4 Reade v. Reade, 8 T. R. 118; Keen v Deardon, 8 East, 248; Pomfret v. Wind. sor, 2 Ves. 272; Smith v. King, 16 East, 283; Garrard v. Tuck, 8 C. B. 231; Burrell v. Egremont, 7 Beav. 205; Jacobs v. Phillips, 10 Q. B. 130. 5 Melling v. Leake, 16 C. B. 652; Stanway v. Rock, 4 M. & G. 30. Blight v. Rochester, 7 Wheat. (U. S.) 535; Stanway v. Rock, ante. is a trustee for the payment of the purchase-money, and the performance of the terms of the purchase. But the vendee is in no sense the trustee of the vendor as to the possession of the property sold. The vendee claims and holds it of his own right, for his own benefit, subject to no right of the vendor, save the terms which the contract expresses; his possession is therefore adverse as to the property, but friendly as to the performance of the conditions of the purchase." The vendor of lands under an executory contract, having performed, holds the land in trust for the vendee, and continues to do so until he manifests an intention to hold them as his own; and the same rule prevails as to one who enters into possession under a contract to purchase 3 until after the purchase-money is due, and from that period the statute begins to run in his favor.* If a portion of trust funds, the income of which is to be paid to a married woman for her life, and after her death to her husband for his life, with remainder over of the principal fund, is lent to the husband upon his note, payable with interest semi-annually, and it is agreed by all the parties that the trustee shall not collect the interest, in order to avoid the trouble of receiving the same from the husband and paying it over to the wife, and in pursuance of this agreement the trustee omits for more than six years to collect the interest, the note is not thereby barred by the statute of limitations; but the trustee may set off the same in equity, after the wife's death, against a claim of the husband for the income.5 6 SEC. 204. Guardians. While the relation of guardian and ward subsists, the guardian stands in the relation of trustee to the ward, and the statute is not applicable to his account; and even after the relation is terminated, it has been held that the statute will not bar a guardian's claim against his ward if the delay is sufficiently explained; but there would seem to be no good ground for such a doctrine, and the better rule seems to be that the statute begins to run from the termination of the guardianship, except in cases where the cause of action arises from matters occurring after the guardianship has ceased.' 8 1 In Garrard v. Tuck, 8 C. B. 231, under the Statute 3 & 4 Wm. IV., it is said, "The object of the statute is to settle the rights of persons adversely litigating, not to deal with cases of trustee and cestui que trust, where there is but one simple interest, viz. that of the person beneficially interested." 2 Hemming v. Zimmerschitte, 4 Tex. 159. The rule may be said to be that after a sale of real estate, and before a conveyance, the vendor is trustee of the legal title for the vendee; and the vendor's possession, while it can be reasonably supposed to be in accordance with the trust, will be construed to be that of the vendee, and the |