Judy v. Farmers & Traders' Bank

• Decision Date: 30 April 1884
• Citation: 81 Mo. 404
• Court: Missouri Supreme Court
• Parties: JUDY v. THE FARMERS & TRADERS' BANK, Appellant.

81 Mo. 404

JUDY

v.THE FARMERS & TRADERS' BANK, Appellant.

Supreme Court of Missouri.

April Term, 1884.

Appeal from Audrain Circuit Court.--HON. ELIJAH ROBINSON, Judge.

AFFIRMED.

Macfarlane & Trimble for appellant.

In chancery cases this court will review the evidence upon which the finding and judgment of the trial court was made, and reverse, affirm or modify the same according to equity. Ringo v. Richardson, 53 Mo. 385; Moore v. Wingate, 53 Mo. 398; Freeman v. Wilkerson, 50 Mo. 554. The evidence fails to show that any trust was ever created, or that the bank ever agreed to accept the money and pay the Dyson note. An express trust can only be created by an express agreement between the parties. They are created by the direct or express words of grantor or settler. 1 Perry on Trusts, § 73; Foster v. Fried, 37 Mo. 43. Judy, Cassidy and Dyson all deny making any agreement with the bank about this money. Judy says he had nothing to do with it. He supposed “the arrangements were between the bank and Cassidy.” Cassidy says, “I gave no directions at all about it.” Dyson knew nothing about it. There could then have been no express agreement between the bank and the party who delivered the money to the bank. In fact, it does not appear who did have or exercise any right to control the money before, or at the time, it was deposited. A trust cannot be implied from the evidence in this case. A trust, it is true, may be implied from the acts and declaration of the person in possession of the property, and by his dealings with it. Yet loose, vague and indefinite expressions are insufficient to create the trust. It must be clear that the bank assumed the duties and liabilities. 1 Perry on Trusts, § 86, and authorities cited; Underwood v. Underwood, 48 Mo. 528; Story's Eq., § 764; Willard's Eq., 76; Childs v. W. C. Association, 4 Mo. App. 74; Day v. Rath, 18 N. Y. 458. The money at the time it was received was deposited to the credit of Clark. The legal title never rested in the bank, which was necessary in order to make it a trustee. Foster v. Fried, 37 Mo. 43; 1 Perry on Trusts, § 73. The acts of the bank and the dealings with the funds, not only fail to show any recognition of the trust on its part, but show in the very strongest terms the contrary. The evidence shows not only that the bank was not made the trustee by the parties, but that Clark was, either by Cassidy, Judy or each other. The conclusion is irresistible from the evidence, that the money was deposited to Clark's credit by authority of both Judy and Cassidy, and if not, by their subsequent acts they ratified the action of the bank in so doing.

M. Y. Duncan for respondent.

The bank received the $2,500 in trust to pay off the Dyson debt. The deposit ticket, as well as every other circumstance in evidence, goes to prove this. A valid trust can be created by parol declarations. Hill on Trustees, (3 Am. Ed.) side pp. 59, 60. The case of Ringo v. Richardson, 53 Mo. 385, has no application to a trust in relation to personalty created by parol. The bank took Judy's draft, collected his money, took credit for it, and without his authority, put it to the credit of Clark, and then, after being fully advised of the matter, refused to correct the mistake, and it should now be required to pay the money.

D. H. McIntyre and F. M. Brown also for respondent.

A trust was created in this case, and being by the direct and express words of the grantor and the head and representative of the trustee, the appellant, and for the benefit of another, it was express or direct. Perry on Trusts, (3 Ed.) § 73; State ex rel. v. Gambs, 68 Mo. 289. A trust can be established as to personal property by parol. Perry on Trusts, § 86. But it is a matter of little consequence whether the trust is direct or implied, or was constructive. If there was a trust, then there was obligation on the bank, arising out of a confidence reposed in it, to apply the money left with it according to such confidence, and if the court is satisfied of this, it will not withhold the relief prayed for. Equity will give relief in such cases. Story's Eq. Jur., (12 Ed.) § 29. Any declaration, however informal, evincing the intention with sufficient clearness, will have the effect to establish the trust, and, besides, the bank got the legal possession, and there was a valuable consideration underlying the trust. Day v. Roth, 18 N. Y. 448, 453. Again, if the trust was not perfectly created, a court of equity can enforce it as a contract, if there is a valuable consideration; wherever there is a valuable consideration, the contract will be executed as near to the intention of the parties as possible. “In such cases effect is given to the consideration to carry out the intentions of the parties, though informally expressed.” The deposit ticket shows, beyond question, that a trust was created to pay off the Dyson debt. The deposit ticket and other facts in evidence corroborate the testimony of Judy, that the bank was to pay off the Dyson debt.

S. M. Edwards for Cassidy.

Cassidy has the right to enforce the collection of the Dyson note now owned by him out of the Judy land. He thought the land was free from all liens, and was so led to believe by both Judy and the bank. The bank got the $2,500 for the purpose of paying the Dyson note. “When one accepts a trust or confidence reposed in him by another, he will be converted into a trustee for the use of that person.” Foote v. Foote, 58 Bar. 258; Foster v. Fried, 37 Mo. 37.

HENRY, J.

Plaintiff filed his petition in the Audrain circuit court, alleging that, on the 14th of October, 1872, the plaintiff borrowed of one Dyson $2,000 for three years, and executed his note of that date, payable three years after, with ten per cent interest per annum compounded annually, and a deed of trust conveying about 1,000 acres of land, as security therefor. About the 1st of January, 1875, he applied to Cassidy to borrow for a term of years $5,000, and proposed to secure it by a deed of trust on the same land, to which Cassidy assented, on the condition that out of the money so borrowed, plaintiff should cause the Dyson note to be paid, and procure a release of the deed of trust, given to secure it.

Thereupon, plaintiff executed a note for $5,000 to Cassidy, payable in five years, and a deed of trust, conveying said land to secure it, which were delivered to Cassidy, who then authorized plaintiff to draw on him for the money through some bank “upon the express condition that said bank should hold $2,500 of the amount, and place it to Dyson's credit, and hold it for the use...