Haight v. Pearson

• Decision Date: 30 January 1895
• Docket Number: 537
• Citation: 11 Utah 51,39 P. 479
• Court: Utah Supreme Court
• Parties: HECTOR W. HAIGHT, RESPONDENT, v. CHARLES E. PEARSON, APPELLANT

39 P. 479

11 Utah 51

HECTOR W. HAIGHT, RESPONDENT, v. CHARLES E. PEARSON, APPELLANT

No. 537

Supreme Court of Utah

January 30, 1895

APPEAL from the District Court of the Third Judicial District. Hon Charles S. Zane, Judge.

Action by Hector W. Haight against Charles E. Pearson to have an interest bought by defendant in the estate of which plaintiff was executor declared to be held in trust for plaintiff. From a judgment for plaintiff, defendant appeals.

Affirmed.

Mr. T J. Anderson and Mr. M. M. Kaighn, for appellant.

A parol contract under § 3917, 2 Comp. Laws, is void. Dung v. Parker, 52 N.Y. 496; Dunphy v. Ryan, 116 U.S. 495; Welch v. Wheplay, 62 Mich. 15; Reub v Smith, 61 Mich. 549; Osborn v. Endicott, 6 Cal. 154. The complaint fails to allege and the court fails to find that there was a contract in writing between plaintiff and defendant respecting the subject-matter of the suit, and hence, there was no valid contract. No estate in nor any trust relating to real estate can be created except by writing, and no writing is alleged or found by the court to have existed, and no estate or trust was created. A resulting trust cannot be established by parol evidence where no part of the purchase money was paid by the person claiming to be the cestui que trust. Lewin on Trusts, vol. 1, p. 168; Story's Eq. Jur. § 1201a; 2 Sugden on Vend. and Pur. (9th ed.) 163; Burden v. Sheridan, 36 Ia. 125, and cases cited. The denial of the making of a contract puts the burden of proof upon the plaintiff to show that he had a valid written contract, else there was nothing for the court to enforce. Dunphy v. Ryan, supra; Cozin v. Graham, 2 Paige, 181; Hasshagen v. Hasshagen, 80 Cal. 518-9. The court failed and refused to make a finding on the issue raised by the answer that plaintiff was executor and had possession of all the real and personal property of the estate of which the share in controversy was a part. The failure of the court to find on a material issue, is reversible error. Hayne on New Trial & App. § 239-40-41; Gould v. Stafford, 77 Cal. 66; Peirra v. Smith, 79 Cal. 232; Cassady v. Cassady, 63 Cal. 352; Christy v. Waterworks, 84 Cal. 541; Trawaso v. Tate, 82 Cal. 170; Ball v. Kehl, 95 Cal. 606; Spect v. Spect, 88 Cal. 437; Wells v. McGeogh, 71 Wis. 196; Blessing v. Sias, 7 Mon. 103. The plaintiff as executor is the trustee of an express trust and cannot speculate out of his trust. Marshall v. Carson, 38 N. J. Eq. 250; Van Epps v. Van Epps, 9 Paige, 237.

Mr. John M. Zane, Mr. A. B. Sawyer and Mr. Graham F. Putnam, for respondent.

This is an appeal on the judgment roll alone. Appellant has incorporated into his abstract a motion made by him after judgment to amend and supplement the findings of fact and conclusions of law of the court. The motion is not part of the record, as it is not a part of the judgment roll, not having been saved in any statement or bill of exceptions. Even if § 4196 of 2 Comp. Laws has the force claimed for it and prohibits an executor from buying an interest in the estate, the purchase would not be void but only voidable at the option of the cestui que trust, and he alone, if any one, has the right to complain. Boyd v. Blankman, 29 Cal. 20; Ayres v. Jack, 7 Utah, 249. The trustee may purchase from his cestui que trust if the transaction is fair in all respects. The cestui que trust is not here complaining that the transaction is unfair. Pearson, who conducted the transaction for plaintiff, only takes that position. Trusts are divided into two classes with respect to the manner of their creation. (a) Express, which are created by the direct language of the parties and are within the statute of frauds. (b) Implied, which arise by implication of law, and are expressly excepted from the operation of the statute of frauds by its own language and by all the authorities. 2 Comp. Laws 1888, §§ 2831, 2832, 3916, 3917; Bispham's Prin. Eq. 138. Implied trusts are of two kinds: (a) Resulting, which "result by operation or presumption of law from certain acts or relations of parties from which an intention to create a trust is supposed to exist." (b) Constructive, which "exist purely by construction of law without any actual or supposed intention that a trust should be created, but merely for the purpose of asserting rights of parties or of frustrating fraud." Bispham's Prin. Eq. 118. The facts in this case brings it within the class of constructive trusts. Defendant is an implied trustee for plaintiff on account of the confidential relation of attorney and client found to have existed between them. Where the relation between the parties is one of trust and confidence, and where the party taking the advantage is not only the trusted legal adviser, but the warm personal friend, it would be a mockery of justice if the statute of frauds, or any other statute or rule of law could be successfully invoked to shield the wrongdoer. Wood v. Rabe, 96 N.Y. 422; Bryan v. McNaughton, 16 P. 57 (Kan.) ; Vallett v. Tedeus, 122 Ill. 607; Bohm v. Bohm, 10 P. 790 (Cal.) ; Alaniz v. Casanave, 91 Cal. 41; Brison v. Brison, 75 Cal. 525; Bowler v. Curler, 26 P. 226 (Nev.) ; Moore v. Bracken, 27 Ill. 23; 1 Story Eq. Jur. pp. 313-316; Browne, Statute of Frauds, p. 104.

SMITH, J. MERRITT, C. J., and BARTCH and KING, JJ., concur.

OPINION

SMITH, J.:

The facts disclosed by the record are that plaintiff is the executor of Hector C. Haight, and is one of his heirs; that Alma D. Haight was a brother of plaintiff, and also an heir of Hector C. Haight; that the estate of Hector C. Haight was in process of settlement in the probate court; that defendant, Charles E. Pearson, was an attorney at law, who had long been acquainted with plaintiff, and had often been employed by him; that Alma D. Haight was desirous of selling his interest in his father's estate, but would only sell to some one interested in the estate,--that is, to some other brother or sister; that plaintiff employed the defendant to purchase the interest of Alma D. Haight, and defendant accepted this employment; that subsequently defendant bought the interest of said Alma D. Haight, and paid his own money therefor, but at the time of the purchase, in order to induce Alma D. Haight to sell, the defendant represented and said to him that he (defendant) was buying the property for plaintiff; that in a short time thereafter the plaintiff tendered defendant the amount of the purchase price, together with ample compensation for his services, but defendant refused to accept either sum, and claimed that he personally owned the interest of Alma D. Haight in the estate of Hector C. Haight, he having taken the conveyance in his own name from Alma D. Haight. The plaintiff brings this suit, claiming that defendant holds the title to the interest of Alma D. Haight in trust for plaintiff. The defendant answered, and, after denying portions of the complaint, he set up that plaintiff was executor of the estate of Hector C. Haight, and incapable, for that reason, to purchase any interest in the estate. The court made findings substantially as stated above, but failed to find in the affirmative issue set up in the answer. Judgment was entered for the plaintiff as prayed, and defendant appeals on the judgment roll.

The first error assigned is that the court failed to find on the affirmative issue in the answer, as the fact therein alleged to wit: "That plaintiff was the executor of Hector C. Haight, deceased, was admitted to be true on the argument. We have treated it as an established fact in the case, and shall decide the case on this assumption." Upon the facts so stated, the defendant raises two questions: First. The plaintiff was incapable of purchasing an interest in the estate, because he was executor. Being incompetent to purchase himself, he could not have another purchase in trust for him, and cannot, therefore, enforce any trust. Second. The defendant purchased with his own money; and while it is true that he agreed, both with plaintiff and the vendor, that he would purchase and hold for plaintiff, still this agreement was oral, and void under the statute of frauds. Upon the first point defendant relies on section 4196, p. 513, 2 Comp. Laws Utah, which provides: "No executor * * * must directly or indirectly, purchase any property of the estate he represents, nor must he be interested in any sale." This section was construed by this court in the case of Ayers v. Jack, 7 Utah 249, 26 P. 300, where it was held, in substance, that sales under it were not void, but voidable only, when the purchase was the interest of an heir. We are of opinion that this statute simply declares, in the case of executors and administrators, that which was, long before the statutes, a rule in equity, to wit: "that contracts in which a trustee both buys and sells to himself are void." But a contract to purchase the interest of an heir in an estate by an executor does not come within the letter or spirit of either the statute or this equitable rule. The executor has no authority, as such, to sell the interest of an heir in the estate. Such interest is not in any sense property of the estate; it is the property of the heir, and he alone can sell it. Owing to the advantage that might be taken of heirs by executors or administrators, if we were called upon...