62 Ala. 129 (Ala. 1878), Lehman v. Lewis

Citation:62 Ala. 129
Opinion Judge:BRICKELL, C.J.
Party Name:Lehman et al. v. Lewis.
Attorney:STONE & CLOPTON and H. C. TOMPKINS, for appellants. J. N. ARRINGTON, contra.
Judge Panel:STONE, J., not sitting.
Court:Supreme Court of Alabama
 
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Page 129

62 Ala. 129 (Ala. 1878)

Lehman et al.

v.

Lewis.

Supreme Court of Alabama

December Term, 1878

Bill in Equity to declare and enforce Resulting Trust.

APPEAL from Bullock Chancery Court.

Heard before Hon. B. B. MCCRAW.

The opinion states the case.

STONE & CLOPTON and H. C. TOMPKINS, for appellants.--It is enacted that no trust concerning lands, except such as results by implication or construction of law, or which may be transferred or extinguished by operation of law, can be created, unless by instrument in writing.--Rev. Code, § 1590. By this statute, all trusts are prohibited which do not result from operation of law; from certain facts being shown to exist, and independent of any agreement. A resulting trust is not founded on any contract, and a verbal agreement to purchase lands for the benefit of another is void under the statute of frauds.--13 Ill. 186; 16 Dana, 331; 4 Md. 465; 9 Watts, 32.

Locke did not occupy any fiduciary relation to the appellee, nor did he have any of her money in his hands at the time of the purchase or the conveyance. To raise an implied trust, an actual payment, or actual loan of money by the cestui que trust at the time of the purchase, must be shown. It is a presumption of law, and must arise, if at all, at the time of the conveyance, and the money, which is the foundation of the trust, must be then paid or secured to be paid. 2 John. Ch. 404; 5 John. Ch. 1; 2 Paige, 217-238; 16 Verm. 500; 1 Hoffman Ch. 90; 3 Ala. 302. The evidence in this case fails to show any purchase by Locke which would create a resulting trust in favor of appellee.

J. N. ARRINGTON, contra.--The trust set up by the appellee is not within the statute.--R. C. § 1590. It is a resulting trust, and such trusts are expressly excepted from its operation.--42 Ala. 60; Perry on Trusts, 2d Ed. § § 137-226. The money first advanced by Locke was a loan to appellee, and it is the same as if she had advanced to him so much cash. 44 Ala. 236. The cases cited by Mr. Perry in his work on Trusts, § 133, fully establish this proposition. The trust in this case arose, not from the agreement by Locke to purchase for appellee, but from his purchase with money which was hers at the time he took the title to himself. It resulted from his acts and not from his agreement, and does not fall within the operation of the statute of frauds.--25 Iowa; Perry on Trusts, 2d Ed. § 134, and note. The appellee was in the undisturbed possession of the land at the time of the appellants' purchase from Locke, and there can be no question of bona fide purchaser. The cases of Barrell v. Hanrick, 42 Ala. 60, and Robinson v. Robinson, 44 Ala. 235, are conclusive of this case in favor of the appellee.

BRICKELL, C.J.

The bill was filed by the appellee, a married woman, and alleges, in substance, that in the latter part of 1869 her husband purchased for her, of one King, a tract of land, at the price of three thousand dollars. At the time of the purchase, one Henry Clark had in his hands about three thousand dollars, the statutory estate of the appellee, and her brother, M. B. Locke, was the agent for its collection. To enable her husband to make the purchase of the lands, said Locke advanced to him, as a loan to her, the purchase-money of said lands, on the agreement that he was to be repaid from the moneys in Clark's hands when collected; and the moneys were by him collected subsequently, and that she assented to the appropriation of the same to his reimbursement of the money loaned. The conveyance of the title to the lands was made to Locke, but of this fact the appellee avers her ignorance until after the death of Locke. On the 22d April, 1870, Locke, by absolute deed, intended as a mortgage to secure pre-existing debts, conveyed the lands to the appellants, who had commenced against the husband of appellee an action of ejectment for the recovery of possession thereof. The prayer of the bill is, that the action of ejectment be perpetually enjoined, and the appellants required to convey the lands to appellee, and for general relief.

The answer of the appellants is a general denial of all the material averments of the bill, or a general disclaimer of all knowledge or information of them, demanding full proof.

Two questions arise: 1. Whether the transaction, as averred in the bill, resting wholly in parol, creates an equity in favor of the appellee, which can be enforced. 2. Whether the evidence is sufficient to establish the equity. The statute declares, "no trust concerning lands, except such as results by implication or construction of law, or which may be transferred or extinguished by operation of law, can be created unless by an instrument in writing, signed by the party creating or declaring it, or his agent, authorized in writing."-- Code of 1876, § 2199. This is a substantial reenactment of the seventh and eighth sections of the English statute of frauds, and by its terms, the creation, and consequently the proof by parol of all direct or express trusts, springing from and dependent upon the agreement of parties, not arising or resulting by implication or construction of law, is prohibited. There not being any declaration in writing of the trust now asserted, no memorandum of the agreement it is averred Locke entered into, the first question must be limited to the inquiry, whether, from the facts stated, a trust of the legal estate taken to himself by Locke, results by construction of law to the appellee.

It is the unquestionable doctrine of courts of equity, in the absence of statutes providing otherwise, that if the purchaser of lands, paying the price with his own money, takes the conveyance in the name of another, the trust of the lands results by construction to him from whom the purchase-money moves. Or, if the purchase is made through an agent, who takes title to himself, the trust will result to the principal, who advances the purchase-money. Or, if a trustee employs the funds of the cestui que trust, or an agent, the moneys of the principal, in the purchase of lands, at the election of the cestui que trust, or of the principal, the trustee, or the agent, may be made personally liable, or the money followed into the land, or a trust of the legal estate will result by implication of law. This class of trusts, not arising from or dependent upon any agreement between the parties, implied by the law from facts proved, are specially excepted from the operation of the statute of frauds, and it is said the exception, if not expressed, would have been a necessary implication.-- Hoxie v. Carr, 1 Sumn. 187.

The whole foundation of this class of trusts is the payment before, or at the time of the purchase, of the money by the cestui que trust, or by the trustee, or the agent, of funds which are the funds of the cestui que trust, or of the principal. Mere parol agreements, or parol declarations of the purchaser that he is buying for another, or that the purchase is intended for the benefit of another, without the employment of the money of the other, will not create a resulting trust. In Botsford v. Burr, 2 Johns. Ch. 405, said Ch. Kent: "The trust must have been coeval with the deeds, or it cannot exist at all. After a party has made a purchase with his own moneys or credit, a subsequent tender, or even reimbursement, may be evidence of some other contract, or the ground of some other relief; but it cannot, by any...

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