Allen v. Rees
| Decision Date | 09 February 1907 |
| Parties | GEORGE L. ALLEN, Appellant, v. S. C. REES, Appellee |
| Court | Iowa Supreme Court |
REHEARING DENIED, WEDNESDAY, NOVEMBER 20, 1907.
Appeal from Fremont District Court.--HON. O. D. WHEELER, Judge.
ACTION at law to recover a sum alleged to be due as part of the purchase price of certain real estate. There was a directed verdict and judgment in favor of defendant, and plaintiff appeals.--Reversed and remanded for a new trial.
Reversed.
W. E Mitchell and T. S. Stevens, for appellant.
Chas M. Harl and Eaton & Estes, for appellee.
The evidence for plaintiff tended to show a state of facts substantially as follows: In May, 1899, the parties to this action and one Butterfield, all of whom lived at Hamburg, Fremont county, were the joint owners of a tract of land in Harrison county, this State, consisting of five hundred and sixty acres. During that month plaintiff sold and conveyed his one-third interest in said lands to the defendant and said Butterfield -- the consideration as alleged in the petition being "$ 30 per acre, or, in the aggregate, $ 5,600, and other consideration; that in addition to said $ 5,600 the defendant and said Butterfield agreed as a further consideration and inducement to plaintiff to execute said conveyance that they would take charge of said land and sell the same to the best possible advantage, or they would offer the same for sale, and if able to sell at a reasonable price, they would either do so or retain the land for themselves and pay to plaintiff one-third the whole amount realized from the sale, or that would be realized if the offer of purchase obtained were accepted in excess of the sum of $ 16,000." Plaintiff was a stockman and merchant, and at the time of the making of the deed in question was in failing circumstances. Defendant, Rees, and the said Butterfield were sureties on his notes held by the Hamburg Bank, of which bank Butterfield was cashier, to the amount of about $ 4,000, and they expressed themselves as anxious to have the notes paid. Before the making of the deed an attempt was made to sell the land in Harrison county, which failed. Thereupon it was agreed that Rees and Butterfield should take title to the land and sell the same as soon as they could; that they should pay to plaintiff at the time $ 30 per acre, and should allow him, in addition, one-third of the net amount realized from the sale when made; that in case Rees and Butterfield did not elect to sell the land "they said they would take it at whatever offer they had for it and pay me the difference." On the delivery of the deed Rees and Butterfield deposited to the credit of plaintiff in the Hamburg Bank the sum of $ 5,600, and as against this credit the bank charged up the amount of plaintiff's notes, and they were surrendered. Thereafter, in a conversation between plaintiff and Rees, the latter, in speaking about the construction of a ditch across the land, told plaintiff that he would have to pay one-third the expense thereof, to which plaintiff assented; also Rees talked to plaintiff about selling him a house, and said in that connection, "You can have it on time, and when we settle up the Harrison county land deal you can pay me out of your third." Later on an intending purchaser, ready, able, and willing, sought to buy the land of defendant and Butterfield at $ 60 per acre, and the offer was not accepted. Still later Rees conveyed his one-half interest in the land to Butterfield.
The motion for a directed verdict was put on the ground that the contract pleaded was an attempt to establish a trust in real estate or the proceeds thereof by parol, and was within the statute of frauds. As we have seen, the court below ruled that the motion was well taken. The correctness of such ruling presents the only question on this appeal.
The provision of statute relating to trusts in real estate reads as follows: "Declarations or creations of trust or powers in relation to real estate must be executed in the same manner as deeds of conveyance," etc. Code, section 2918. The statute of frauds is a rule of evidence, and reads as follows: "No evidence of the following enumerated contracts is competent, unless it be in writing and signed by the party charged: Those for the creation or transfer of any interest in land," etc. Code, section 4625. In view of these provisions of statute, if it must be said that the contract pleaded and relied upon amounted to a declaration of trust, or that the effect thereof was to create or transfer an interest in lands, the ruling on the motion was correct, and should be affirmed. On the other hand, the ruling was error if the conveyance by plaintiff to defendant and Butterfield was absolute and unqualified, and the contract went only to the question of consideration. This is so because it is fundamental that questions having relation solely to consideration involve no element of trust or interest in the lands themselves. The recital of the deed is not conclusive, and the subject is open to modification or explanation by parol as to time, place, amount, and other considerations. Authorities are not necessary, but see Trayer v. Reeder, 45 Iowa 272; Bank v. Stiger, 86 Iowa 344, 53 N.W. 265; Bossingham v. Syck, 118 Iowa 192, 91 N.W. 1047. Now, a trust is defined as an obligation arising out of a confidence reposed in one who has the legal title to property conveyed to him, that he will faithfully apply and deal with such property according to the confidence reposed. 28 Am. & Eng. Ency., 858. Therein is implied two estates or interests -- one equitable and one legal; one person as trustee holding legal title, while another is cestui que trust. Hospes v. Northwestern Co., 48 Minn. 174 (50 N.W. 1117, 15 L. R. A. 470, 31 Am. St. Rep. 637).
Must it be said that any such property status and relationship of parties arises out of the contract facts here relied upon? We think not. Reduced to simple form of statement, we have a conveyance of lands absolute in form and unaccompanied by any agreement providing for the reclamation thereof, on condition, by the vendor, or the withholding by him of any enforceable interest therein. The contract sought to be established by parol went no further than to provide that, in case of future sale for a sum in excess of the amount paid plaintiff, he should become entitled to a further sum represented by one-third of such excess as consideration for his conveyance additional to that already received. A like result was to follow should defendant and Butterfield, having opportunity to...
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