Davis v. Downer

• Decision Date: 04 January 1912
• Citation: 97 N.E. 90,210 Mass. 573
• Parties: DAVIS v. DOWNER et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

210 Mass. 573

97 N.E. 90

DAVIS v. DOWNER et al.

Supreme Judicial Court of Massachusetts, Essex.

January 4, 1912

Jan. 4 1912.

COUNSEL

Fred'k H. Tarr, for appellant.

A. B Tolman, for respondents Iretta Davis and Flora Downer.

OPINION

RUGG C.J.

This is a suit in equity by which the plaintiff seeks to establish the right of a partnership, composed of himself and his brother Oscar, to the conveyance of two parcels of real estate. The two parcels are known respectively as the factory lot and the home lot. The master's findings of facts must be taken as final, the evidence not being reported.

I. The title to the factory lot was taken in the name of Iretta Davis in 1897. The purchase price was $250, of which $50 was paid in cash by the partnership, and the balance by two mortgages, each for $100, executed by Iretta Davis. It was the oral understanding that she held title in trust for the benefit of the firm, and would convey it to the firm at any time on demand. In March, 1901, the mortgages were paid by the firm. A factory was built upon the land by the firm wholly with its money, with an exception so trifling as to be negligible. These facts are sufficient to establish a resulting trust under the well recognized equitable principle, that where one pays for real estate but the conveyance is to another, a resulting trust arises in favor of the one who pays the purchase price against the grantee named in the deed, the latter being treated as subject to all the obligations of a trustee, notwithstanding the statute of frauds. Howe v. Howe, 199 Mass. 598, and cases cited at 601, 85 N.E. 945, 127 Am. St. Rep. 516; Lombard v. Morse, 155 Mass. 136, 29 N.E. 205, 14 L. R. A. 273; Bailey v. Hemenway, 147 Mass. 326, 328, 17 N.E. 645; Cooley v. Cooley, 172 Mass. 476, 477, 52 N.E. 631; Frankel v. Frankel, 173 Mass. 214, 53 N.E. 398, 73 Am. St. Rep. 266. Sometimes there may be a presumption of a gift instead of a resulting trust where the parties are not strangers and the person paying the consideration is under some natural or legal obligation to provide for the one in whose name the title is taken. But that question is not material here, for the facts have been expressly found. It is always open to show the facts to rebut such presumption. Lufkin v. Jakeman, 188 Mass. 528, 530, 74 N.E. 933. The application of the principle just stated is not affected by the circumstance that at the time of the original purchase the grantee executed mortgages for a part of the purchase price. This was done upon the understanding that the mortgages should be paid by the partnership, an agreement which was carried out, and the grantee was thereby exonerated from all liability, and the entire consideration really was paid by the partners. It was the equivalent of a loan of credit by the grantee for the benefit of persons paying for the purchase. It can stand on no different ground from a loan of money. McDonough v. O'Niel, 113 Mass. 92. It follows that the rule of McGowan v. McGowan, 14 Gray, 119, 74 Am. Dec. 668, and Dudley v. Dudley, 176 Mass. 34, 56 N.E. 1011, Kennerson v. Nash, 208 Mass. 393, 94 N.E. 475, and other like decisions, to the effect that where two or more persons contribute indiscriminately to the purchase price without agreement as to the proportion of interest to be held by each and the title is taken by one no trust results in favor of the others, does not govern the case at bar.

II. The facts as to the home lot were that, being then vacant land it was conveyed to Iretta Davis, who paid therefor $265 partly in cash and partly by mortgage on it, upon an understanding that she would convey the property to the two members of the partnership at any time for $300. Pursuant to this understanding and in reliance upon it, six months later the firm paid the mortgage given in part for the purchase price and afterwards expended money for the partial construction of a dwelling house, and subsequently Iretta Davis gave a mortgage, still outstanding, to a savings bank for $2,000, the proceeds of which were used toward the house, and when it was completed the two partners moved into it. Its total cost was considerably in excess of the savings bank mortgage, and this excess was paid by the partnership. During the several years since the purchase, they have paid the taxes, insurance and interest upon the mortgage, and have continued...