Down v. Down

• Decision Date: 07 February 1912
• Citation: 80 N.J.E. 68,82 A. 322
• Parties: DOWN v. DOWN.
• Court: New Jersey Court of Chancery

82 A. 322

80 N.J.E. 68

DOWN

v. DOWN.

Court of Chancery of New Jersey.

Feb. 7, 1912.

Suit by Matilda Down, by next friend, against Everett M. Down, who filed a crossbill. Decree for complainant advised.

Lewis Starr, for complainant .

Garrison & Voorhees, for defendant.

LEAMING, V. C. The present controversy involves the ascertainment whether certain real estate is owned by Matilda Down, complainant herein by her next friend, or by her husband, Everett M. Down, defendant and cross-complainant herein. The legal title to the real estate in question now stands in the name of complainant. Her husband claims to be the equitable owner, and by his crossbill seeks to compel a conveyance to him of the legal title.

On and prior to July 12, 1905, the husband was the absolute owner of the property in dispute; on that day, by deed of conveyance, in which his wife joined, he conveyed the same to one Percy R. Conner. The deed to Conner is in form an absolute deed of conveyance, with an expressed money consideration, full covenants, and declaration to the use of the grantee; but it is admitted that the deed was made to Conner without consideration, and for the sole purpose of enabling Conner to hold the naked legal title, and that the equitable title was undisturbed by that conveyance. It is also admitted that Conner held the legal title under the deed referred to until April 8, 1910, on which date he conveyed the property to complainant, at the request of defendant, her husband. The present suit is to determine whether this last-named conveyance vested in Matilda an absolute estate, or whether she holds title in trust for Percy, her husband.

The conveyance from Conner to Matilda was in form an absolute deed of conveyance, with full covenants and declaration to the use of the grantee and an expressed money consideration. The deed was prepared by the husband and executed by Conner at his request. No writing exists which manifests a trust. Any trust that may exist in favor of the husband of complainant must exist, if at all, by operation of law, either as a resulting trust arising from his having supplied the consideration of the conveyance to his wife without intending a gift, or as a constructive trust arising through fraud, actual or constructive.

At the hearing, I entertained the view that a resulting trust could arise in favor of a husband by reason of a conveyance made by him to his wife, through an intermediary, without consideration, although the two conveyances by which the transfer should be effected contained expressed money considerations and full covenants and declarations to the use of the respective grantees. Accordingly, the hearing was conducted upon the theory that proofs could be entertained to rebut the presumption of gift, and if found to be sufficient for that purpose relief could be awarded in behalf of the husband (cross-complainant) to the same extent as in a case in which a husband or father had purchased a property and caused the deed therefor to be made to his wife or son. A further consideration of the subject leads me to the conclusion that I was in error. I am now satisfied that a resulting trust cannot arise in favor of a husband, in the absence of fraud, under a conveyance made by the husband to his wife, through an intermediary, of property already owned by the husband, by deeds of conveyance which express money consideration and declaration to use of the grantee. My reasons for this conclusion are: First. Because the rule which permits the presumption of a resulting trust to arise from a deed which expresses a money consideration and declares the use to the grantee appears to be confined, in the absence of fraud, to cases in which a property is purchased by one person and title taken in the name of another. Second. Even though it should be held that the rule referred to is not confined to cases in which property is purchased by one and title taken in the name of another, a resulting trust cannot arise in favor of a grantor, in the absence of fraud, under a deed of conveyance expressing a money consideration with declaration to the use of the grantee; and a conveyance from a husband to his wife, through an intermediary, must be regarded as in substance a deed from the husband to the wife.

My views in amplification of the first proposition may be stated as follows: All true resulting trusts may be reduced to two general types, says Professor Pomeroy, in 3 Eq. Jur. § 1031: First. "Where there is a gift to A., but the intention appears, from the terms of the instrument, that the legal and beneficial estates are to be separated, and that he is either to enjoy no beneficial interest or only a part of it." "The second type includes the cases where a purchase has been made, and the legal estate is conveyed or transferred to A., but the purchase price is paid by B." In explanation of the first type, the learned author says: "In order that a case of this kind may arise, there must be a true gift, so far as the immediate transferee, A., is concerned; the instrument must not even state a consideration, and no valid complete trust must be declared in favor of A. or of any other person."

In further explanation of the first type referred to, the same author says: "In this and all other forms belonging to the class under present consideration, there must be no pecuniary consideration coming from the grantee; for such a consideration would raise a trust in his own favor, and clothe him with the beneficial interest. Even if the conveyance merely recites a pecuniary consideration, the same effect would be produced. Furthermore, the deed or will must contain no declaration of use covering the whole estate in favor of the grantee or devisee; such declaration of use would raise a trust in his favor, vest in him the beneficial estate to its extent, and so far defeat any resulting trust." Section 1033.

Judge Story's consideration of resulting trusts in his Equity Jurisprudence is, in effect, the same. Touching the second class of resulting trusts above referred to by Professor Pomeroy, he says: "Where a man buys land in the name of another and pays the consideration money, the land will be generally held by the grantee in trust for the person who pays the consideration money." Section 1201. And in section 1201a, the same author states that the doctrine is strictly limited to cases where a purchase has been made in the name of one person and the purchase money has been paid by another. In section 1203, in speaking of the rule that where the purchase is made by a father and the conveyance made to a son the presumption of gift arising from the relationship may be rebutted, the learned author says: "It is, perhaps, rather to be lamented that it [the presumption of gift], has been suffered to be broken in upon by any sort of evidence of a merely circumstantial nature." In 3 Reed on the Statute of Frauds, § 891, the general classification of trusts by operation of law is stated as follows: "The classification of trusts which Lord Hardwicke makes is most often quoted: 'The two classes of resulting trusts are, first, when an estate is purchased in the name of one person, but the money or consideration is given by another; or secondly, where a trust is declared only as to part, and nothing said as to the rest. What remains undisposed of results to the heirs at law, and they cannot be said to be trustees for the residue. I do...