Freeman v. Freeman
| Decision Date | 30 March 1907 |
| Docket Number | 2,442. |
| Citation | 153 F. 337 |
| Parties | FREEMAN et al. v. FREEMAN. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Rush C Butler (Eldon J. Cassoday, O. J. Wood, and Alfred A. Scott on the brief), for appellants.
Joseph G. Waters (A. H. Case, on the brief), for appellee.
Before SANBORN, HOOK, and ADAMS, Circuit Judges.
This was a suit by the widow and children of John E. Freeman deceased, against Harriet E. Freeman, to establish a trust and to compel a conveyance of a lot in Topeka, Kan. Upon final hearing the trial court dismissed complainants' bill, and they have appealed.
John E. Freeman and the defendant Harriet were brother and sister. The defendant's title, which was sought to be charged with the trust, came to her by warranty deed from her parents. The theory of the trial court in dismissing the bill was that complainants were seeking to establish an express trust in real property by parol evidence contrary to the provision of the Kansas statute (Gen. St. 1901, Sec. 7875) that:
'No trust concerning lands except such as may arise by implication of law shall be created, unless in writing, signed by the party creating the same, or by his attorney thereto lawfully authorized in writing.'
The case of Gee v. Thrailkill, 45 Kan. 173, 25 P. 588, was cited and applied. In that case Thrailkill conveyed real property to Mrs. Gee by absolute and unconditional warranty deed, and afterwards sought to show by parol evidence that the agreement at the time was that Mrs. Gee might sell or mortgage it to raise funds for him, and that whenever he so desired she should reconvey to him any part remaining in her hands. It was held that Thrailkill was endeavoring to establish an express trust by parol, and that the case was therefore within the statute.
This appeal presents three lines of inquiry: What trusts in respect of realty in Kansas are not controlled by the above section of the statute? What was the case stated in the bill of complaint? What was established by the proofs? Of these in their order:
Other sections of the Kansas statute (sections 7880, 7882) provide that when a conveyance for a valuable consideration is made to one person, and the consideration therefor paid by another, no use or trust shall result in favor of the latter, but that this provision shall not apply where it shall be made to appear that by agreement and without any fraudulent intent the party to whom the conveyance was made, or in whom the title shall vest, was to hold the land or some interest therein in trust for the party paying the purchase money, or some part thereof. It will also be observed that the section of the statute applied by the trial court expressly excepts from its operation such trusts as arise by implication of law.
Rayl v. Rayl, 58 Kan. 585, 50 P. 501. In this case a farm consisting of a half section of land was purchased, and the deed taken in the name of Elijah Rayl, under an agreement that he should hold the title for his mother, himself, and a minor brother; that he and the brother were to manage the farm as partners; that the mother and the other minor children were to aid in operating and in paying for the farm and at the end of five years a designated quarter section should be conveyed to her. The mother and a daughter attended to the housework, and all the family and the farm hands boarded with her. Other members of the family helped in raising crops. The mother earned some money in weaving carpets and in keeping boarders. The results of her labors and of those whose services she was entitled to went to the payment of the land, and her contributions exceeded in value the purchase price of the part she was to have. When the time came for Elijah to convey he refused, and in defending her suit contended that she was endeavoring to enforce an express trust resting in parol. The Supreme Court of Kansas held, however, that a trust arose by implication of law which could be established by parol evidence and enforced under the exceptions in the Kansas statutes.
Franklin v. Colley, 10 Kan. 260. In this case two women jointly purchased two lots; each furnishing an equal part of the consideration. But by agreement, and without any fraudulent intent, they had the deed made to one; she to hold the title until the other became of age. They jointly improved the property and afterwards the one who held the title repudiated the right of the other. In a suit to establish the trust and to compel a conveyance, the court held that there was a resulting trust which might be shown by parol evidence, and that the statutes were not intended 'as limitation, restriction, or prohibition upon the creation of what are known as resulting trusts, implied trusts or constructive trusts. ' It is also well settled in Kansas that when the legal title to real property has been acquired, and is being held wrongfully and in fraud of the rights of the equitable owner, a constructive or involuntary trust arises and may be established by parol evidence. Typical cases of trusts of this character are Howard v. Howard, 52 Kan. 469, 34 P. 1114, and Rose v. Hayden, 35 Kan. 106, 10 P. 554, 57 Am.Rep. 145.
Was the bill of complaint framed upon the theory of an express trust, or did it charge a trust arising by implication of law? If the former was intended, it must be said that the existence of the essential writings would have to be inferred, as the pleader made no mention of them in the bill of complaint. On the other hand, the voluminous averments of the circumstances surrounding the acquisition of the legal title by the defendant, the relations between the parties, and the contributions of moneys by complainants' intestate, show that the intention was to exhibit such a state of facts as would give rise to a resulting or constructive trust, as distinguished from one created by written agreement. While the averments of the bill are somewhat lacking in precision and definiteness in this particular, we are of the opinion that they are sufficient. The following appears to be quite clearly charged: Before the conveyance of the lot in controversy to the defendant, her father held the legal title to it, and also the legal title to other lands and property. During his lifetime he and his three children, John E. Freeman, the defendant Harriet, and a son Elijah, had purchased several tracts of land, and the title was taken in the name of the father for the benefit of all of them. Each of them contributed to the purchase price. John E. Freeman, the complainants' intestate, sent from time to time to the father and to defendant Harriet, who was managing the father's business affairs, large sums of money to be applied in the payment of certain notes, some of which were secured by mortgage upon the property held in the name of the father for the benefit of all of them, and those sums of money were so applied. Prior to the death of the father a division of the property so acquired and held was agreed upon by the parties in interest. Each one was to receive certain specific parcels. Under this agreement for division John E. Freeman was to have the lot in controversy, and the defendant was to have other property, exclusive of the lot, in full of her share in the common holdings. On April 7, 1897, the father conveyed to defendant Harriet by warranty deed various pieces of property including the lot in controversy. The mother joined in the deed. This deed was made in furtherance of the relations between the parties with respect to the property, and with the understanding and agreement that Harriet was to hold the legal title in trust, and when the time for division came she was to convey accordingly. While the deed recited a consideration of $500, the defendant paid nothing at the time; the real consideration being as already mentioned. When the deed was made the father was of advanced age and in feeble health, and defendant Harriet was his confidential agent and adviser and attended to his business affairs. She assented to the trust condition upon which the legal title was placed in her, and agreed to make the conveyances to the others of their respective parcels, including a conveyance to John E. Freeman of the lot in controversy. She was also the trusted agent of her brother, John E. Freeman, but after his death, which occurred November 7, 1901, she repudiated the trust relation, and sought to defraud the complainants, who are his heirs, out of the property. There were also averments of a bona fide attempt by the defendant, during the lifetime of John E. Freeman, to execute the trust in respect of the lot in controversy, but which failed for reasons that will be mentioned in a discussion of the evidence. In our opinion these averments are of a trust arising by implication of law within the rule of Rayl v. Rayl, 58 Kan. 585, 50 P. 501, which may be established by parol evidence. It was charged by fair inference that the consideration for the conveyance of the legal title to the defendant was not paid by her at the time the deed was executed, but consisted of the previous payments and contributions of money made by the three children, and particularly by John E. Freeman, and that by agreement, and without any fraudulent intent existing at the time, the lot in controversy conveyed to the defendant was to be held by her in trust for John E. Freeman.
In approaching a consideration of the evidence, it is proper to say that, while this suit directly involves but one piece of property, the actual dealings of the parties took a much wider range, embraced quite a number of parcels of land, and covered a period of more than 10 years. The particular transaction in question did not begin and end on the day the legal title was conveyed to the defendant. It was but a...
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