Will, Construction of — Trust — Payment of Debts — Vesting of Estate — Evidence.
1. Where property was given by a will to a trustee to be held in trust for A., free from liability for certain debts owing by the latter to others, but to vest in him absolutely in case he should in any manner discharge such debts: Held, that such property did not vest unless all of such debts were paid in the lifetime of A.
2. Where the vesting of an absolute estate depended upon the payment of certain debts by the devisee, and, in the trial of an issue whether all such debts had been paid, a note was produced, signed by him, uncanceled, and found among the effects of another decedent: Held, that the production of such note raised the presumption that the note had not been paid, and, in such case, it is immaterial when the statute of limitations began to run.
(67) FAIRCLOTH, C. J.
The defendants W. W. and R. B. Peebles claim the surplus money in the hands of defendant Gooch as administrator de bonis non, c. t. a., of Virginia A. Johnson by an alleged sale of the land devised in said Virginia's last will and testament, under an execution against her husband, James Johnson. The plaintiffs claim said surplus money which arose from a sale of said devised lands by a proper petition to raise assets to pay debts, and they claim it as devisees of Virginia A. Johnson, in whose will are the following clauses: "I devise and bequeath my whole estate to Catharine Johnson (the plaintiff), my sister-in-law, in trust to hold and preserve the same from all liability to the debts of my husband, James Johnson, which were contracted by him prior to our intermarriage."
"Sixthly. In case the said James Johnson should fully pay off or discharge by any means all and every of the debts contracted by him prior to my marriage with him, then and in that case I declare that he shall take and receive all my aforesaid estate free and discharged from all the trusts in the premises declared, and shall hold the same absolutely for his own sole use and benefit."
James Johnson died 16 March, 1876, and the note of said Johnson was dated 31 July, 1858, which day was prior to said intermarriage.
The important question presented is whether James Johnson fully paid or by any means discharged said note during his lifetime. The payment or discharge of this note during the life of James Johnson was a condition precedent to the vesting of the title to said lands in James Johnson, and it could not vest unless the condition was performed in his lifetime. To create a condition, no particular form of words need be used, for if a corresponding purpose be read in the will, that purpose takes effect. Schouler on Wills, 598.
The possession of an unindorsed negotiable note or bond raises (68) a presumption that the person producing it on the trial is the real and rightful owner, and this presumption is not repelled or altered by a denial of the defendant in his answer of such ownership. Jackson v. Love, 82 N.C. 405. It is prima facie evidence of ownership, and nothing short of fraud, not even gross negligence, is sufficient to overcome the presumption. Commissioners v. Clark, 94 U.S. 62 (4 Otto, 278). This is so between the holder and the maker, but not between the holder and the payee. Holly v. Holly, 94 N.C. 670. And the burden of proof to rebut this presumption is on him who alleges any defect in the title, unless proof of fraud or illegality be offered, and then the burden of proof is shifted to the holder, and he must show that he received it bona fide for value. Pugh v. Grant, 86 N.C. 39.
This is not an action founded on the note for its collection. In the course of the trial the question of payment, as before stated, was an independent and separate fact to be ascertained without any regard to the principles of law, such as would apply in an action on the note between the payor and the payee and their representatives, and when the plaintiffs or defendant Gooch, as administrator of V. A. Johnson the devisor, on the trial produced said note uncanceled, the presumption of ownership and that the note had not been paid at once arose, and without other proof it was proper and it was the duty of his Honor to instruct the jury to find the issue as they did. If the note had been in the possession of James Johnson or his representative, the presumption of payment or discharge would have been equally strong in favor of the defendants.
The defendants excepted because the witness Gooch stated that Mr. Burton said he found the note among the papers of J. J. Long. This exception is without force, because without that statement it was the duty of the court, as above pointed out, to instruct the jury (69) to answer the issue "yes" on the production of the note uncanceled. This was so unless the defendants had shown something to avoid that conclusion. The statement of Burton's declaration was not useful to the jury and could not have influenced their verdict. It was the possession of the note uncanceled that entitled the plaintiffs to have the issue found in their favor without regard to anything else on this aspect of the case.
The defendants did not offer any evidence of actual payment, but relied solely on the presumption of payment from the lapse of time, which presumption had not arisen at James Johnson's death.
It is therefore immaterial when the statute began to run. We understood the defendants to abandon their exception to the competency of the witness Gooch to testify. There is no error, and the judgment is
Affirmed.
Cited: Davison v. Gregory, 132 N.C. 396.