Johnson v. Hayward
| Citation | 103 N.W. 1058,74 Neb. 157 |
| Decision Date | 08 June 1905 |
| Docket Number | 13,840 |
| Parties | DANIEL L. JOHNSON, APPELLEE, v. BENJAMIN D. HAYWARD ET AL., APPELLANTS. [*] |
| Court | Supreme Court of Nebraska |
APPEAL from the district court for Howard county: JAMES N. PAUL JUDGE. Affirmed.
AFFIRMED.
T. T Bell, F. J. Taylor and M. B. Reese, for appellants.
D. L Johnson, A. A. Kendall and O. A. Abbott, contra.
ALBERT, C. DUFFIE and JACKSON, CC., concur.
In this suit the plaintiff seeks to have a trust declared and enforced with respect to certain real estate. The pleadings are unnecessarily voluminous, covering some 35 pages of the record. Reduced to their simplest form, the ultimate facts relied upon by the plaintiff to entitle him to the relief sought are: That the defendant, Benjamin D. Hayward, while under an oral contract of agency with the plaintiff to negotiate on behalf of the plaintiff for the purchase of certain real estate, negotiated therefor and bought the same for his own use and benefit, taking the title thereto in the name of the defendant Day, his nephew, who later conveyed to the defendant Mary F. Hayward, the wife of defendant Benjamin D. Hayward, in trust and for the use of her said husband; that afterwards, the defendants Mary F. Hayward and Benjamin D. Hayward borrowed $ 1,200 of the defendant Paul, and as security therefor deposited the conveyance of the land from Day to Mary F. Hayward, which had not been recorded; afterwards, Benjamin D. Hayward, acting as the agent of his wife, entered into a written contract with the defendant Mathiason for a sale of the land to the latter for $ 2,700, receiving on the purchase price $ 500; that afterwards, Mathiason entered into a written contract with the defendant Kohler for the sale of the land to the latter for $ 3,000, upon which there was paid $ 500. The court found for the plaintiff, took an account of the expenditures and charges of defendant Benjamin D. Hayward in the premises, of the amount due on the Paul mortgage, and the amount due Kohler on account of the $ 500 paid by him on his contract with Mathiason, and entered a decree requiring a conveyance of the land to the plaintiff upon payment of the amount found due Benjamin D. Hayward, and made such order for the distribution of the proceeds of said payment as would protect the defendants Paul and Kohler as to the money by them respectively advanced on the land. The case is here on defendant's appeal, the defendant Paul not participating.
The contract of agency upon which the plaintiff relies rests wholly in parol, and no part of the consideration which the agent Hayward paid for the land was advanced by the plaintiff, and the principal contention of the defendants in this case is that it falls within the provisions of section 3 of our statute of frauds (ch. 32, Comp. St.), which is as follows: "No estate or interest in land, other than leases for a term not exceeding one year from the making thereof, nor any trust or power over or concerning lands, or in any manner relating thereto, shall hereafter be created, granted, assigned, surrendered or declared, unless by operation of law, or by a deed or conveyance in writing, subscribed by the party creating, granting, assigning, surrendering, or declaring the same." Among other authorities supporting this contention are the following: Burden v. Sheridan, 36 Iowa 125; 2 Story, Equity Jurisprudence (13th ed.), secs. 1201, 1201a; 1 Perry, Trusts (5th ed.), sec. 135. The Iowa case just cited deserves more than a passing notice, because it is hardly distinguishable on principle from the case at bar. As in this case the contract of agency was oral, and the principal had advanced no part of the consideration for the land. The court held that the contract, being oral, came within the section of the statute of frauds of that state corresponding with that section of our own statute just quoted, and that, no part of the consideration having been paid by the principal, the case did not fall within another provision, which provides that the section referred to shall not apply where the purchase money, or any portion thereof, has been received by the vendor. In the absence of an express statutory provision, part payment of the purchase price in and of itself is not regarded as such part performance of an oral contract as will relieve against the statute. It seems to us that in the defendants' argument, as well as in the authorities cited in support of it, there is a failure to distinguish between those cases where an estate or interest in land, or some trust or power over or concerning lands, is one of the considerations of the contract, and is acquired as a direct result thereof, and those where such estate, interest, trust or power is not such consideration, and is not acquired as a direct result of the contract, but which arises as a remote result of the contract and from an abuse of the relations thereby established. It is not claimed by the plaintiff that at the time he made his contract with Hayward he thereby acquired any title, legal or equitable, to the land, or that any trust or power over or concerning the land was thereby created. On the contrary, the most he claims for that contract is that it created between him and Hayward the relation of principal and agent. The land itself, or any interest or trust or power over and concerning the land, was no part of the consideration moving from either party to the other. The consideration which the plaintiff agreed to pay was the value of Hayward's service, and the consideration moving from Hayward was the service he undertook to render as the plaintiff's agent. That an oral contract creating an agency, although for the purchase or sale of real estate, is valid, is clearly established by the authorities. In one of the head-notes to Griffith v. Woolworth, 28 Neb. 715, 44 N.W. 1137, the rule is laid down that "where a land owner employs an agent to procure a purchaser for his real estate upon certain terms and conditions, the contract of employment need not be in writing." This was regarded as the settled law of this state up to the time of enactment of section 74, chapter 73, Compiled Statutes (Ann. St. 10258), which took effect April 12, 1897, requiring every contract for the sale of land between the owner thereof and any broker or agent to sell the same to be in writing. There is no similar provision in regard to contracts for the purchase of real estate by agents. In the absence of a statute like the above, there is no such difference in principle between a contract with an agent to negotiate a sale and one to negotiate a purchase, as would make one fall within section 3 of the statute of frauds, and the other without. That the former does not fall within the statute of frauds was the view of this court in Griffith v. Woolworth, supra, and this view was recognized as sound, and acted upon by the legislature by the enactment of sec. 74, supra, otherwise there was no necessity for the enactment of that section. That an oral contract for the employment of an agent to buy or sell land is not within the statute of frauds is settled by a long line of authorities, which are collated in 29 Am. & Eng. Ency. Law (2d ed.), 892.
If then it be competent, and we are clearly of the opinion that it is, to establish the contract of agency by parol testimony the question then arises whether parol testimony is competent to establish the trust in this case, or whether the plaintiff will be relegated to his remedy at law for damages for breach of contract. Section 4 of our statute of frauds expressly provides that section 3 shall not be construed to prevent any trust from arising or being extinguished by implication or operation of law. A similar provision exists in all the states. This provision includes all resulting and constructive trusts, or it might be said, it includes all trusts which are not created by the express terms of a contract. In this case, the plaintiff is not seeking to enforce an express trust. He is seeking to enforce what he claims is a trust which arises or results from an abuse of the confidential relations existing between him and the defendant Hayward, by virtue of their contract of agency. The rule is well settled that an agent instructed to purchase property for his principal will not be permitted, without his principal's knowledge and consent, to become the purchaser of the same property for himself; and if he makes such...
To continue reading
Request your trial