130 U.S. 122 (1889), Moore v. Crawford

Citation:130 U.S. 122, 9 S.Ct. 447, 32 L.Ed. 878
Party Name:MOORE et al. v. CRAWFORD et al. [1]
Case Date:March 18, 1889
Court:United States Supreme Court
 
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130 U.S. 122 (1889)

9 S.Ct. 447, 32 L.Ed. 878

MOORE et al.

v.

CRAWFORD et al. 1

United States Supreme Court.

March 18, 1889

Appeal from the Circuit Court of the United States for the Western District of Michigan.

Appellees, the widow and heirs of John Monroe, deceased, filed their bill against Nathaniel D. Moore and Helen Moore, to compel a conveyance of the one undivided sixth part of 160 acres of mineral land in Ontonagon county, Mich., which had been located by Nathaniel D. Moore, under an agreement with James H. McDonald and John McKay that Moore should have a one-third interest in consideration of his services in prospecting for land having iron ore, and selecting and locating that in question. It was upon Moore's application that the patent was issued from the state land-office at Lansing, in January, 1875, to McDonald and McKay, the purchase money being furnished by them and paid over by him. By the testimony of Moore and McKay it was established that Moore was to have a one-third interest, while McDonald admitted that he was to have an interest, but was uncertain whether it was to be one-third or one-fourth. One McIntyre

COUNSEL

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[9 S.Ct. 448] John F. Dillon,

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Dan H. Ball, and Irving D. Hanscom, for appellants.

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T. L. Chadbourne and L. H. Boutell, for appellees.

OPINION

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Mr. Chief Justice FULLER, after stating the facts as above, delivered the opinion of the court.

Had the conveyance of McDonald and McKay, lodged in Viele's hands, been actually delivered to Moore, no question would have arisen; but, that deed having been suppressed or lost, when Moore subsequently induced McDonald and McKay to convey to his wife, for the avowed purpose of avoiding the deed he had given Monroe, Moore's wife being fully advised of the purpose, and paying no consideration for the conveyance, the transaction must be regarded in equity as if McDonald and McKay had conveyed to Moore, and Moore had conveyed to his wife, she holding in trust for Monroe and his heirs one-half of the interest conveyed to her, namely, one-sixth of the whole. 'Fraud, indeed, in the sense of a court of equity, properly includes all acts, omissions, and concealments which involve a breach of legal or equitable duty, trust, or confidence, justly reposed, and are injurious to another, or by which an undue and unconscientious advantage is taken of another. And courts of equity will not only interfere in cases of fraud to set aside acts done, but they will also, if acts have by fraud been prevented from being done by the parties, interfere and treat the case exactly as if the acts had been done.' 1 Story, Eq. Jur. § 187. Whenever the legal title to property is obtained through means or under circumstances 'which render it unconscientious for the holder of the legal title to retain and enjoy the beneficial interest, equity impresses a constructive trust on the property thus acquired in favor of the one who is truly and equitably entitled to the same, although he may never, perhaps, have had any legal estate therein; and a court of equity has jurisdiction to reach the property, either in the hands of the original wrong-doer, or in the hands of any subsequent holder, until a purchaser of it in good faith and without notice acquires a higher right, and takes the property relieved from the trust.' 2 Pom. Eq. Jur. § 1053.

In Huxley v. Rice, 40 Mich. 82, it is said: 'It is the

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settled doctrine of the court that where the conveyance is obtained for ends which it regards as fraudulent, or under circumstances it considers as fraudulent or oppressive, by intent or immediate consequence, the party deriving title under it will be converted into a trustee in case that construction is needful for the purpose of administering adequate relief; and the setting up the statute of frauds by a party guilty of the fraud or mistake, in order to bar the court [9 S.Ct. 449] from effective interference with his wrongdoing will not hinder it from forcing on his conscience this character as a means to baffle his injustice or its effects.' The fraud of which Moore was guilty was in preventing the conveyance to himself, which would have inured to Monroe, and in obtaining it to his wife, so as to reap the benefit which belonged to his grantee. Mrs. Moore stands in her husband's shoes, and, by accepting with knowledge, is to be treated as a party to his fraud and profiting by it, or, as a mere volunteer, assisting him to perpetrate the fraud and to profit by it, and is hence to be held, as he could have been, a trustee ex maleficio. Nor do we see that the statute of frauds can be invoked as a defense. The fact that McDonald and McKay could not have been compelled to convey to Moore because of the want of written evidence of their agreement to do so does not entitle Mrs. Moore to object that they were not legally bound to do what they were morally, they having kept their faith with Moore by conveying under his directions. If McDonald and McKay had violated their agreement with Moore, and in furtherance of such violation had conveyed to a stranger, such grantee might have difended, even though cognizant of the verbal agreement of McDonald and McKay to convey to Moore; but McDonald and McKay never repudiated their obligation to Moore, and conveyed as he directed, thereby, so far as he was concerned, carrying out the trust upon which they held one-third of the land. There is 'no rule of law which prevents a party from performing a promise which could not be legally be enforced, or which will permit a party morally, but not legally, bound to do a certain act or thing, upon the act or thing being done, to

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recall it to the prejudice of the promisee, on the plea that the promise, while still executory, could not, by reason of some technical rule of law, have been enforced by action.' Newman v. Nellis, 97 N.Y. 285, 291; Patton v. Chamberlain, 44 Mich. 5, 5 N.W. 1037; Barber v. Milner, 43 Mich. 248, 5 N.W. 92. Mrs. Moore did not take as a stranger would have taken, but took in execution of the agreement with her husband. Clearly, then, she cannot be permitted to ser up a statutory defense personal to McDonald and McKay, who could not, in fulfilling their agreement, transfer an excuse for non-fulfilment. It is undoubtedly the rule that the breach of a parol promise or trust as to an interest in land does not constitute such fraud as will take a case out of the statute, (Montacute v. Maxwell, 1 P. Wms. 620; Rogers v. Simons, 55 Ill. 76; Peckham v. Balch, 49 Mich. 179, 13 N.W. 506;) but here McDonald and McKay did not fail to perform their promise, and, when they performed, their grantee took one-half of the one-third, charged with a trust to hold it for Monroe by reason of the deed of Moore to Monroe, under the covenants of which Moore was equitably bound, when he acquired the title, to hold it for Monroe's benefit. That deed contained a general covenant of warranty.

In Irvine v. Irvine, 9 Wall. 617, 625, Mr. Justice STRONG, speaking for the court, said: 'It is a general rule that when one makes a deed of land, covenanting therein that he is the owner, and subsequently acquires an outstanding and adverse title, his new acquisition inures to the benefit of his grantee, on the principle of estoppel.' And in Van Rensselaer v. Kearney, 11 How. 297, it was pointed out that it is not always necessary that a deed should contain covenants of warranty to operate by way of estoppel upon the grantor from setting up the after-acquired interest against his grantee, the court saying (page 325) 'that, whatever may be the form or nature of the conveyance used to pass real property, if the grantor sets forth on the face of the instrument, by way of recital or averment, that he is seised or possessed of a particular estate in the premises, and which estate the deed purports to convey,

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or, what is the same thing, if the seisin or possession of a particular estate is affirmed in the deed, either in express terms or by necessary implication, the grantor and all persons in privity with him shall be estopped from ever afterwards denying that he was so seised and possessed at the time he made the conveyance. The estoppel works upon the estate and binds an after-acquired title as between parties and privies.' The rule is thus stated in Smith v. Williams, 44 Mich. 242, 6 N.W. 662: 'It is not disputed that a deed with covenants of seisin and title would be effectual to give the grantee the benefit of an after-acquired title, under the doctrine of estoppel; but these covenants were absent from the deed in question, and the covenant of quiet enjoyment, it is said, would not have a like effect. No reason is given for any such distinction, and it is not recognized by the authorities. When one assumes, by his deed, to convey a title, and by any form of assurance obligates himself to protect the grantee in the enjoyment of that which the deed purports to give him, he will not be suffered afterwards to acquire or assert a title, and turn his grantee over to a suit upon his covenants for redress. The short and effectual method of redress is to deny him the liberty of setting up his after-acquired title as against his previous conveyance. This is merely refusing him the countenance and assistance of the courts in breaking the assurance which his covenants had given.' Conceding that a covenant of general warranty operates by way of rebutter to preclude the grantor and his heirs from setting up an after-acquired title, rather than to actually transfer the new estate itself, the subsequent acquisition creates an equity for a conveyance in order to make the prior deed effectual. Noel v. Bewley, 3 Sim. 103, 116; Smith v. Baker, 1 Younge & C. Ch. 223.

In McWilliams v. Nisly, 2...

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