Condit v. Maxwell

• Decision Date: 03 November 1897
• Citation: 44 S.W. 467,142 Mo. 266
• Parties: CONDIT et al. v. MAXWELL.
• Court: Missouri Supreme Court

44 S.W. 467

142 Mo. 266

CONDIT et al. v. MAXWELL.

Supreme Court of Missouri, Division No. 1.

November 3, 1897.

RESULTING TRUST — WHAT CONSTITUTES — EVIDENCE — WHEN ACTION ACCRUES — LACHES — BONA FIDE PURCHASER — MORTGAGES.

1. Where the consideration for an absolute conveyance of land is paid by third persons, the grantee takes the title in trust for such persons, by operation of law.

2. The failure to put a declaration of trust in a conveyance does not prevent a trust resulting by operation of law, from the acts of the parties, which may be proved by parol.

3. To be available in an action to establish and enforce a trust in land, the statute of frauds must be pleaded.

4. Though, under the agreement, the grantee of land had 10 years in which to elect whether he would pay for the same or reconvey to persons entitled thereto, such persons may enforce a trust in the land within that time, where the grantee denies the trust and claims the title absolutely.

5. One who accepts a deed, and enters into possession under it to hold the land for 10 years, without paying any consideration, knowing the purposes for which it was given and accepting the trust agreed upon, and paying rent to some of the beneficiaries for several years, cannot defeat an action, commenced at the end of that period to declare the trust, on account of delay.

6. One purchasing land by quitclaim deed takes title subject to outstanding equities.

7. Where a resulting trust is declared in land

which the grantee has mortgaged along with another tract to an innocent mortgagee, the latter tract will be sold first for the satisfaction of the mortgage.

8. The value of improvements made on land in which a resulting trust has been declared should be estimated at the time of the accounting, and not when made.

Appeal from circuit court, St. Louis county; Rudolph Hirzel, Judge.

Action by Margaret Condit and others against Joseph Maxwell and others. From a decree for plaintiffs, defendant Maxwell appeals. Affirmed.

The suit is in equity to set aside certain deeds conveying a tract of about 53 acres of land situate in St. Louis county. The pleadings are quite lengthy, and a statement of the facts upon which they are predicated will only be necessary in order to make the issues understood. Prior to March, 1884, H. Clay Sexton owned the undivided half of a tract of land in Clinton county, Ill., and plaintiff Margaret Sexton (who afterwards married Condit) and R. E. Lee Sexton owned each the undivided one-fourth of the same, as heirs of John Sexton, deceased. Defendant Thomas Maxwell was the son-in-law of the said H. Clay Sexton. At the same time one Carrie Hewitt owned the tract of land in question, the title thereof being in her trustee, B. F. Webster. On the 6th day of March, 1884, H. Clay Sexton, Margaret Sexton, and Robert E. Lee Sextion conveyed the Illinois land to Webster as trustee for the said Carrie Hewitt. The said Robert was at that time a minor, about 20 years of age. On the 4th of March, 1884, Carrie S. Hewitt and her trustee conveyed the St. Louis county land to Thomas Maxwell. This deed was dated January 29th, but was not acknowledged until March 4, 1884. The expressed consideration was $12,000, and the grantee assumed the payment of a mortgage on the land, amounting to $2,500. That the conveyance of the Illinois land was the consideration for this conveyance is undisputed. H. Clay Sexton was the uncle of the said Margaret and Robert, with whom they lived at the date of these transactions. Thomas Maxwell paid the $2,500 mortgage on the St. Louis land, January 3, 1885. In January, 1887, Thomas Maxwell purchased about 47 acres adjoining the land he acquired from the Hewitts, and on March 3, 1892, he mortgaged both tracts to defendant the Connecticut Mutual Life Insurance Company to secure an indebtedness of $15,000. It is conceded that said company had no notice, at the time of taking this mortgage, of any equities claimed by plaintiffs in the Hewitt land. In May, 1893, Thomas Maxwell executed and delivered to a trustee a deed of trust to secure to defendant Thomas T. Ruby an indebtedness of $3,000, then due, and advances that might thereafter be made. On the 14th day of June, 1893, Thomas Maxwell, by quitclaim deed, for an expressed consideration of one dollar, conveyed both tracts of land to his brother, the defendant Joseph A. Maxwell. The wife of the grantor did not join in this deed. On March 6, 1894, Thomas Maxwell, his wife joining, by another quitclaim deed, for a like consideration, conveyed both tracts to the said Joseph A. Maxwell. On February 5, 1894, the land was sold under execution on a judgment against Thomas Maxwell, and Charles C. Garrett was the purchaser to whom the sheriff made a deed. Garrett conveyed to Ruby, and Ruby to Joseph Maxwell. Garrett, Ruby, and Maxwell all had notice of plaintiffs' claim when these purchases and deeds were made. Thomas Maxwell had possession of the land from the date of the conveyance to him by Hewitt and her trustee until his conveyance to his brother, and while in possession made valuable and lasting improvements upon it. H. Clay Sexton died December 21, 1893, and his heirs join in this suit, as plaintiffs. These facts were recited in plaintiffs' petition, and were not controverted at the trial. Plaintiffs charge that the consideration for the conveyance of the Hewitt land to Thomas Maxwell was paid by the exchange of the Illinois land which belonged to H. Clay Sexton and plaintiffs Robert E. Lee Sexton and Mrs. Condit; that the said Thomas Maxwell held the legal title in trust for them; and that his grantees took their deeds with notice of the trust. They ask that the deeds be set aside; that the title be vested in them; that an account be taken of the rents and profits, and of the improvements, and for general relief. The answer of defendants, while admitting many of the facts charged in the petition, denied all the allegations which charge the trust, and denied all notice thereof. It may therefore be treated as a general denial, with the special defenses noticed in the opinion. A trial resulted in an interlocutory decree in favor of plaintiffs against the Maxwells, subject to the mortgages mentioned. Subsequently an account was taken and a final decree was rendered. Defendant Joseph A. Maxwell appealed.

John D. Johnson and J. S. Laurie, for appellant. W. C. & J. C. Jones, for respondents.

MACFARLANE, J. (after stating the facts).

In respect to the conveyance by the Hewitts to Thomas Maxwell of the land in question, in 1884, and the agreement then made by him with H. Clay Sexton, and Robert E. Lee Sexton and Margaret Sexton, who paid the consideration therefor, there is but little conflict in the evidence. Mrs. Venie Salter, a daughter of H. Clay Sexton, testified: "I remember the time the conveyance was made by H. Clay Sexton and Margaret Sexton and Robert E. Lee Sexton of the land in Clinton county, Illinois, to Hewitt. I was my father's private secretary, and attended to a good deal of business for him. I heard my father tell Thomas Maxwell that he could sell the property in Illinois or make exchange of the property in Illinois for the property in St. Louis county, and that, if he wanted it, he would sell it to him, and give him ten years to pay for it in, and in the meantime he could use it, and pay rent for it at the rate of $20 per month to my father, and $10 a month to each of the children of John Sexton. He also told him if, at the end of the ten years, he did not want to keep the place, he would take it back, and allow him for whatever improvements he had put on the place, and, if he decided to keep the place, he was to pay $10,000 for it. He told him there was a deed of trust on the place for $2,500, which he (Maxwell) was to raise. My father said he could keep the place for ten years, and if he made any improvements on it, and father took the place back, then he was to allow Mr. Maxwell for the improvements." Two or three other witnesses testified to the same, or substantially the same, offer by H. Clay Sexton. The transfer was made, and the deed from Hewitt and her trustee to the St. Louis land was accepted by Thomas Maxwell, and under it he went into the possession. There was evidence by a number of witnesses that during his occupancy of the land Maxwell paid rent to Mrs. Condit under this agreement. It is true that Maxwell, who was permitted to testify, denied that any such agreement was made, or that he paid rent to Mrs. Condit; yet he does not claim that he paid any consideration for the land, except, in a general way, that Clay Sexton was at the time indebted to him, and he understood "that Sexton was making him a present of it." "He [Clay Sexton] said he guessed it would make us even."

1. We have no doubt from the evidence that Maxwell accepted the deed and took possession of the farm under a verbal agreement substantially as that detailed in the evidence of Mrs. Salter, and that the Illinois land, which was at the time owned by Clay Sexton and the two children of John Sexton, deceased, was the sole consideration for the conveyance. Under these acts of the parties, disregarding the agreement, Thomas Maxwell, the grantee, took the title in trust for the use of H. Clay Sexton and Robert E. Lee and Margaret Sexton, who paid the consideration. The trust, in such case, does not arise from fraudulent acts of the grantee, but is implied from the fact that the purchase money was paid by the cestui qui trust. "This rule," it is said, "has its foundation in the natural presumption, in the absence of rebutting circumstances, that he who supplies the purchase money intends the purchase to be for his own benefit, and not for another, and that the conveyance in the name of another is a matter of convenience and arrangement between the parties for collateral purposes; and this rule is vindicated by the experience of mankind." 1 Perry, Trusts, § 126. See Hall v. Hall, 107...