McLaughlin v. Fulton

• Decision Date: 29 October 1883
• Citation: 104 Pa. 161
• Parties: McLaughlin <I>versus</I> Fulton.
• Court: Pennsylvania Supreme Court

104 Pa. 161

McLaughlin versus Fulton.

Supreme Court of Pennsylvania.

October 3, 1883.

October 29, 1883.

October 3d 1883.

Before MERCUR, C. J., GORDON, TRUNKEY, STERRETT, GREEN and CLARK, JJ. PAXSON, J., absent

ERROR to the Court of Common Pleas of Westmoreland county: Of October and November Term 1883, No. 35.

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H. P. Laird (with whom was J. A. Marchand), for plaintiffs in error.—A constructive trust can be raised only from fraud in obtaining the title or from payment of the purchase money at the time of acquiring it: Bickel's Appeal, 86 Pa. St. 204; Cross' Appeal, 97 Pa. St. 471. The right of reclamation is at an end when trust moneys have been so mixed with other funds as to be incapable of identification: Schneider's Estate, 11 Phila. 71; People's Bank's Appeal, 93 Pa. St. 107. The mother gave no direction as to the purchase of the Dunn farm, and there was no prior agreement. A resulting trust cannot be raised by a subsequent payment of the purchase money: Barnet v. Dougherty, 32 Pa. St. 371; Nixon's Appeal, 63 Pa. St. 279. The answer of the court to the defendant's eight point, in regard to the notice at the sheriff's sale, of Eleanor Fulton's claim, was clearly error: Kaine v. Denniston, 22 Pa. St. 202; Meehan v. Williams, 48 Pa. St. 238; Scott v. Gallagher, 14 S. & R. 333. Rachel Fulton's testimony was inadmissible: Chase v. Irvin, 87 Pa. St. 286; Ewing v. Ewing, 96 Pa. St., 381; Hess v. Gourley, 89 Pa. St. 195.

J. Alexander Fulton (with whom was Alexander Eicher), for defendant in error.—Where the purchase money is paid by one, and the title taken in the name of another, there is a resulting trust, in favor of the one who paid the money, and this may be established by parol: Clark v. Trindle, 52 Pa. St. 492; Seichrist's Appeal, 66 Pa. St. 237; Wiser v. Allen, 92 Pa. St. 317. These decisions also show that the case at bar is clearly excepted from the Act of April 22d 1856, by the proviso to section 4 of said Act. The conversion of a trust fund into money, and the money into land does not divest the trustee of his fiduciary character; and a court of chancery will follow the fund for the benefit of the cestui que trust, wherever it can be identified, and when the amount of the fund is uncertain, it may be ascertained by a jury: Pierce v. McKeehan, 3 W. & S. 280; Reed's Appeal, 34 Pa. St. 207; Coble v. Nonemaker, 78 Pa. St. 501; Sadler's Appeal, 87 Pa. St. 154. The possession of land is notice of any title under which the occupant claims, unless he has put on record a title inconsistent with his possession: McCulloch v. Cowher, 5 W. & S. 427. Rachel Fulton was a competent witness: Brightly's Purdon, 623, 624, 625, pl. 12, 13, 16, 17, 20; Cox v. McKean, 56 Pa. St. 243; Richter v. Cummings, 60 Pa. St. 441; Rowley v. McHugh, 66 Pa. St. 269; Karns v. Tanner, 66 Pa. St. 297.

Mr. Justice CLARK delivered the opinion of the court, October 29th 1883.

On the 28th day of March 1872, John Dunn conveyed the title to the lands in controversy to William A. Fulton; the consideration of the purchase as expressed in the deed being $3,150.

Eleanor Fulton, the mother of William, in her lifetime claimed that the purchase was in part made with her money, and that her son held the title to that extent in trust for her. She died in January 1880, having first made a last will and testament, wherein she devised all her estate, real and personal, to Rachel Fulton, the plaintiff below.

William A. Fulton, having taken the title in his own name, entered it on record on the 7th day of May 1872. He subsequently became largely indebted; judgments were obtained against him, and the lands in dispute were levied upon by the sheriff, and sold on the 12th day of May 1879, to J. B. Chamber, trustee for the Apollo Savings Bank, for the sum of $1,401. Lawrence McLaughlin having, by deed of 10th June 1881, purchased the title of the Apollo Savings Bank, the defendants below went into possession under the sheriff's title. The subject of this litigation, the thing in action, is the land, and it seems very clear at the outset that Eleanor Fulton, through the operation of her will, is to be taken as the assignor of the land; her rights therein, whatever they were, passed under it to Rachel, the plaintiff. The title of Rachel was dependent altogether upon the true nature of the transaction involving the purchase of the land from John Dunn; the conveyance from Dunn formed a link in the chain of her title, as well as of the title of William and Lawrence McLaughlin. Rachel, under the assignment of the will, claimed the alleged trust on the land under William's deed, while McLaughlin claimed under the same title, repudiating the trust. Thus the deed from Dunn is the common source of title to both parties, and the matter of fact in controversy, which is the alleged trust, springs directly out of that transaction. The relations of the parties, therefore, show such privity between them as brings them clearly within the proviso of the Act of 15th April 1869, under the construction adopted in Craig v. Brendel, 19 P. F. Smith 153, and other cases.

If William A. Fulton's interest in the land had not been sold by the sheriff, and this controversy had been one between Rachel and William, there could be no doubt whatever as to the incompetency of both as witnesses, to establish facts occurring in the lifetime of Eleanor. It seems equally clear that if the defendants below, who claim under William, had been called in their own behalf, to prove the acts and declarations of Eleanor, touching the alleged trust, they would certainly have been incompetent for that purpose. The Act of 1869 expressly provides that it "shall not apply" where the assignor of the thing or contract in action may be dead; such actions are to be tried as if the Act of 1869 had not been passed, and, therefore, all parties and interested persons, on both sides, are incompetent to testify as to any facts occurring prior to the death of the assignor.

William A. Fulton was not a party, and as a consequence of the sheriff's sale he appears to be without interest in the suit; but Rachel was a party, and interested in the result. She was, therefore, an incompetent witness for the purpose for which she was offered and examined. The 8th assignment of error is therefore sustained.

The testimony of Rachel Fulton being thus eliminated from the case, it stands mainly upon that of William A. Fulton, her brother. There is perhaps enough left, however, as the case is now presented, to justify a submission to the jury. When the cause is again tried, facts may be developed which would readily justify a different conclusion.

If the testimony of William A. Fulton is believed, however, the $3,000 which was realized from the sale of the Armstrong county farm to Ford, was certainly the money of Eleanor Fulton. The old lady was then seventy-two years of age; she was illiterate, could neither write nor read writing, and was altogether unacquainted with ordinary business matters. The transaction with Ford was conducted by William in behalf of his mother, and it was undoubtedly true, if his testimony is believed, that as a son he occupied in regard to her fiduciary relation of...