Drath v. Armstrong

• Decision Date: 21 January 1932
• Docket Number: 1 Div. 666.
• Citation: 141 So. 634,224 Ala. 661
• Parties: DRATH v. ARMSTRONG ET AL.
• Court: Alabama Supreme Court

141 So. 634

224 Ala. 661

DRATH v. ARMSTRONG ET AL.

1 Div. 666.

Supreme Court of Alabama

January 21, 1932

Rehearing Denied May 26, 1932.

Appeal from Circuit Court, Baldwin County; F. W. Hare, Judge.

Bills to declare trusts in lands by Emma S. Drath against Phillip G. Armstrong and others. From a decree dismissing the bills complainant appeals.

Reversed and remanded.

Harry T. Smith & Caffey, of Mobile, for appellant.

Webb &amp Shepard, of Mobile, for appellees.

THOMAS J.

The suits were to declare resulting trusts in lands and for general relief. The two cases were consolidated, by agreement, for convenience. One is styled the "Boutell Case" and the other the "Allen Case."

The appellant filed the two bills of complaint, and as consolidated by agreement, they were so considered by the court. One bill was against Phillip G. Armstrong individually, and the other against Josephine Johnson, Elvera C. Armstrong, and Agnes E. Utter, who were the heirs of Oscar Johnson, deceased, and against Phillip G. Armstrong, as the executor of his estate. In each case the appellant sought to enforce a trust, the first, upon certain property which she had purchased from Mrs. Mary L. Boutell, and the second, upon property which she had purchased from Mrs. Lawrence Allen.

It is alleged that Oscar Johnson acted as complainant's representative in carrying out these purchases, in the first of which Johnson took the title in his own name, and in the second, the name of his son-in-law, Phillip G. Armstrong.

It is the theory of these bills that the complainant contracted to purchase the property, employed Oscar Johnson as her representative in each of these matters, and Johnson took the title to the Allen property in his own name, and that to the Boutell property in the name of his son-in-law, Phillip G Armstrong, as a method of securing that portion of the purchase price of the respective properties which he (Johnson) claimed he advanced for complainant.

The answer to the bill against Phillip G. Armstrong sets up that Oscar Johnson had advanced $450 for the complainant on account of the purchase money of this property, and that he had taken the title to the property in the name of his son-in-law, Phillip G. Armstrong, "intending to have the respondent transfer the property to Mrs. Drath (the complainant) when she should have repaid the said Johnson the amount so paid by him, with interest, including taxes and cost of abstract"; that "respondent was the son-in-law of said Johnson and it was his custom to occasionally adopt this plan, but respondent did not learn of this transaction until after Mr. Johnson's death"; that "respondent says that his said father-in-law, Oscar Johnson, was not only the soul of honor, but big-hearted, and frequently did acts of kindness for others, and has many written acknowledgments to that effect from the complainant, and whatever was done for her in connection with the purchase of this property was done with her full knowledge and consent and at her request, and merely as an accommodation"; that "respondent denies that the complainant furnished the money to buy this property, but on the contrary says that Mr. Johnson, from time to time, loaned her money and in addition to paying for this property, also paid out a large amount in connection with property from Lawrence Allen, and while complainant did make some remittances to the said Johnson, no direction was given as to the application of same, and there is a large amount due from the complainant to the Estate of Oscar Johnson, by reason of such transaction."

The answer thus admits that the title was taken in the name of Armstrong for the purpose of securing the amounts advanced by Johnson on account of the purchase price of the property conveyed; yet, as we have indicated above, the offer to reconvey is conditioned upon the repayment of the money advanced on account of this purchase price, and upon the complainant's paying her indebtedness to Oscar Johnson, whether falling within the terms of this security or not. Notwithstanding the admission that the conveyance was made as a security for the repayment of this particular advance, the trial court concludes, upon the whole evidence, that it was made with the understanding that this conveyance should stand as security for all debts existing or created of whatsoever character between the parties. That is to say, admits that the respective conveyances had been taken merely as security for advancements made on account of the purchase price of the property conveyed; that Johnson "not only assisted her in this instance, but also in the purchase of the Boutell property, and from time to time made loans to her, and though she did make some remittances to him, there was no direction as to whether same should be applied to the payment of said loans, or the balance due on said properties, and there is still a large amount due to the estate of Oscar Johnson in this connection, and upon the payment of same, respondents stand willing to make complainant proper conveyance."

The trial court expresses the opinion, from the pleading indicated and the evidence, that the conveyances had been taken not only to secure the advancements on account of the purchase price of the respective properties, but that it was the further intent of the parties that it was to secure the payments of all indebtednesses of the complainant to Mr. Oscar Johnson, whether existing at the time the conveyances were executed or subsequently created per their agreement.

In the answer to the second bill of complaint, which we have quoted above, respondents, the heirs, representatives, and administrator of the estate of Oscar Johnson, deceased, admitted that the conveyance of the Allen property to Oscar Johnson was executed and delivered to secure the balance of the purchase price advanced by Oscar Johnson on account of this property, and expressed the willingness of the respondents to reconvey upon such payment, when this and the other moneys so advanced were fully paid. That is, it was further averred in this answer that numerous payments had been made by the complainant to Oscar Johnson without any specific application thereof, and it appearing that Oscar Johnson had made some advancements on account of the purchase price of each piece of property, as well as other advancements that had no connection with either piece of property, and that the complainant had made a number of payments to Oscar Johnson without specific application thereof to any particular advancement, it was manifest that the consolidation of these causes was necessary, in order that both Armstrong, who held the Boutell property, and the heirs, the beneficiaries, and the administrator of the estate of Johnson, who held the Allen property, should all be heard upon proper application of each payment made by complainant. To meet this difficulty or confusion of advancements and payments, solicitors of record entered into an agreement for the consolidation of the causes, which was acted upon, ratified, and adopted in the final decree of the court.

When the complainant seeks to "establish a resulting trust in land and for general relief," and the grantee in each conveyance admits that it was executed to secure advancements which had been made by a third person on account of the purchase price, and offers a conveyance to the complainant upon the payment of such advancements or proper application of payments made, we are impressed that an order of reference should be made to ascertain the amount of the indebtedness secured, to the end that the complainant might be permitted to pay off the debt and equitable liens required to clear the property and to redeem her property-all proper parties being...