Fitch v. Double "U" Sales Corp.

• Decision Date: 14 February 1957
• Docket Number: No. 103,103
• Citation: 129 A.2d 93,212 Md. 324
• Parties: Page 324 212 Md. 324 129 A.2d 93 Naoml FITCH v. DOUBLE 'U' SALES CORP. Court of Appeals of Maryland
• Court: Maryland Court of Appeals

Page 324

212 Md. 324

129 A.2d 93

Naoml FITCH v DOUBLE 'U' SALES CORP.

No. 103.

Court of Appeals of Maryland.

Feb. 14, 1957.

Samuel J. Friedman, Baltimore, for appellant.

Edward Azrael, Baltimore (Gerald H. Cooper, Baltimore, on the brief), for appellee.

Before BRUNE, C. J., and COLLINS, HENDERSON, HAMMOND and PRESCOTT, JJ.

COLLINS, Judge.

This is an appeal from a decree holding that real estate was held under a resulting trust, but that a judgment was a valid lien against the property.

On December 2, 1955, Naomi Fitch, appellant, filed a bill of complaint against Double 'U' Sales Corporation, appellee, in which she alleged substantially that formerly she owned a home, 6911 Proctman Avenue, in Baltimore. Her husband died and she had an opportunity to purchase certain property at 533 N. Curley Street in Baltimore City. Being a widow and without any available source of income she was unable to procure a mortgage on said property at a favorable rate of interest to pay the balance of the purchase price. She therefore requested Louis Cooperman, a friend of the family, to take title to the property and execute a mortgage thereon. He, being a young man, single and in a position to obtain a mortgage with an interest rate of four percent per annum, agreed to said arrangement and to convey the property to her at her request after settlement was consummated. Pursuant to such an arrangement a contract for the purchase of the Curley Street property was entered into on May 26, 1952, between the owners as sellers and Louis Cooperman as buyer. On August 4, 1952, Mrs. Fitch sold the Proctman Avenue property and on the next day, August 5, 1952, settlement for the Curley Street property took place and by deed of that date title was conveyed to Cooperman in fee simple. He, on the same date, executed a purchase money mortgage, as agreed to by him, to the Eutaw Savings Bank.

All of the money was paid on account of the purchase price of the Curley Street property by the appellant out of her own funds realized from the sale of the Proctman Avenue property. Also, all funds on account of said mortgage were paid by the appellant from her own funds. At no time did Cooperman contribute any money or other consideration toward the payment of any part of the purchase price, or on account of the mortgage indebtedness, nor did he receive any beneficial interest therein. Appellant has continually occupied the premises and has collected all income accruing therefrom. After the settlement and passage of said deed to Cooperman she requested him to convey the property to her, pursuant to their aforesaid understanding, with which he complied. Thereafter the appellant learned that the appellee, Double 'U' Sales Corporation, had obtained a judgment against Cooperman in the Superior Court of Baltimore City in the amount of $3,265.08 and attorney's fees and court costs, prior to the deed from Cooperman to her. Although she, through her attorney, had requested the appellee to waive and release its aforesaid alleged lien against the Curley Street property by virtue of its judgment, after fully advising the appellee's attorney of all the aforementioned facts in regard to the true ownership of the property the appellee refused to waive or release its aforesaid lien. She was fearful that there would cause to be levied an execution against the property and that the same would be sold to satisfy the judgment held by the appellee against Cooperman. She prayed that the court by decree enjoin the appellee 'from levying, attempting to levy or otherwise attempting to enforce the alleged lien of its aforesaid judgment against Louis Cooperman, against the said property, 533 North Curley Street', and that the property be held by her forever, free and clear of the alleged lien of said judgment, and for other and further relief.

After answer filed, testimony was taken in open court before the chancellor. He decreed in part that, while Cooperman held title of record to the Curley Street property in fee simple, he held the legal title only as trustee for the appellant as cestui que trust, she being the sole owner of the equitable interest in said property. Appellant knew or should have known that Cooperman was purchasing merchandise on credit and that his creditors had a right to rely on his legal ownership of the Curley Street property. Appellant was therefore estopped from impressing a trust upon said property which would apply to the appellee for credit extended by it to Cooperman during the time he held title to the property. The judgment of the appellee against Cooperman was declared to be effective against the Curley Street property, which property was then titled in the name of Naomi Fitch, the said judgment being a lien taken only to the extent of $2,092.60. The appellant should pay the cost of the proceedings.

The appellant appeals here from that part of the decree which found that she was estopped from assertiing her rights as owner of the equitable interest against said judgment lien and she contends that the appellee should be permanently enjoined from issuing an execution or attachment on said judgment against the Curley Street property.

The appellee, on the other hand, contends that the holding that appellant was the owner of the beneficial or equitable interest in the property under a resulting trust was erroneous. The appellee did not cross appeal. In Sprecher v. Sprecher, 206 Md. 108, 110 A.2d 509, the lower court by decree set aside a deed, but also impressed an equitable lien on the property for sums expended by the appellant in improvements to the property and required the appellee to pay the costs. It was there held that, as the appellee had not appealed from the part of the decree impressing the lien and requiring the appellee to pay the costs, the question was not before this Court. See also Lynch v. Kamanitz, 148 Md. 381, 129 A. 362; Syfer v. Fidelity Trust Co., 184 Md. 391, 397, 41 A.2d 293; Nowell v. Larrimore, 205 Md. 613, 623, 109 A.2d 747. It was said by Judge Offutt in Harrison v. Robinette, 167 Md. 73, 83, 173 A. 60, 65: '* * * a decree may not be reversed for the benefit of one who did not appeal therefrom, even though as to him it was both erroneous and injurious. County Com'rs of Frederick County v. Page, 163 Md. , 631, 164 A. 182; Gordon v. Miller, 14 Md. 204; Lanahan v. Latrobe, 7 Md. 268; 4 C.J. 697.' However, for the purposes of this case, we will assume, without deciding, that the question is properly before us.

It is well settled as a general rule that where the purchase price is paid by one person and the title is taken in the name of another, there arises in favor of the person paying the purchase money a resulting trust, and the holder of the legal title becomes a trustee for him. Dixon v. Dixon, 123 Md. 44, 55, 90 A. 846; First National Bank of Catonsville v. Carter, 132 Md. 218, 103 A. 463; Mountford v. Mountford, 181 Md. 212, 218, 29 A.2d 258; Tiemann v. Welsh, 191 Md. 1, 6, 59 A.2d 628. Of course, where a person attempts to establish a resulting trust, the burden is on him to prove such trust, and it must be made out by plain and unequivocal evidence, and the payment of the purchase money by the party claiming the trust before or at the time of the purchase is indispensable. The Courts should review parol evidence to establish such a trust with the greatest caution for it impeaches a solemn instrument executed according to law and recorded as an evidence of title. Any other rule would make insecure the title to real estate. Vogel v. Vogel, 157 Md. 147, 153, 145 A. 370; Cropper v. Lambertson, 174 Md. 24, 197 A. 576; Kelley v. Kelley, 178 Md. 389, 399, 13 A.2d 529; Fasman v. Pottashnick, 188 Md. 105, 110, 51 A.2d 664. As pointed out in Bogert, Trusts and Trustees, Volume 2A, 1935 Edition, Section 464, the reasons for caution of the courts in approving this type of trust are manifest because there is a formal deed without any mention of a trust and reciting the payment of consideration. The deed is recorded and is a public record. The establishment of the resulting trust depends upon oral evidence sometimes supplemented by proof of conduct of the parties to overcome the record title. Also, an additional reason why the courts should be strict in this matter is the ease with which fraud can be worked on creditors by the use of this type of trust.

Mrs. Fitch testified that the reason she sold the Proctman Avenue property was because her husband had died, consequently she was compelled to live alone and was afraid she would get sick. She wanted to get a house further in town. She did not want to buy the Curley Street house in the name of either of her sons because one had just gotten married and the other was getting a divorce. She had known Cooperman for many years. She received $250. as a deposit on the Proctman Avenue property which was applied as a deposit on the Curley Street property. A receipt for that amount was offered in evidence. She received a check for $5,404.58 representing the balance de for the Proctman Avenue property which she endorsed over to Cooperman. This check was deposited by him in his bank, and was paid on the Curley Street house. Cooperman had no interest in the property, she made all payment, on the mortgage due the Eutaw Savings Bank. She paid the taxes, and for all repairs and improvements on the Curely Street property, and Cooperman contributed nothing thereto. The mortgage placed on the Curley Street property on August 5, 1952, was $3,350. She occupied the house from the time of its purchase and Cooperman never lived there. She was never obligated or indebted to Cooperman and paid him no money for occupying the property. She had known him since he was a small boy and he called her 'Ma'. She knows nothing about Cooperman's private bubiness. Cooperman for a time boarded at the home of her daughter and her husband. The daughter and her husband 'broke up'. Cooperman was in the...