Peal v. Luther

• Court: Virginia Supreme Court
• Writing for the Court: HUDGINS
• Citation: Peal v. Luther, 199 Va. 35, 97 S.E.2d 668 (1957)
• Decision Date: 26 April 1957
• Docket Number: No. 4662,4662
• Parties: ERWIN P. PEAL v. ROBERT L. LUTHER, ET AL. Record

Page 668

97 S.E.2d 668

199 Va. 35

ERWIN P. PEAL v. ROBERT L. LUTHER, ET AL.

Record No. 4662.

Supreme Court of Appeals of Virginia

April 26, 1957.

Robert Cantor (Cantor, McMullan & Cantor, on brief), for the appellant.

L. A. Belcher (Elmore & Belcher, on brief), for the appellees.

JUDGE: HUDGINS

HUDGINS, C.J., delivered the opinion of the court.

Erwin P. Peal filed his bill in chancery against Robert L. Luther, alleging, inter alia, that he was the sole equitable owner of an apartment house known as 219 South Third Street, Richmond, Virginia, and praying that the legal title thereto, which was held by Robert L. Luther, be conveyed to him. Robert L. Luther filed an answer and cross bill in which he admitted that he was the holder of the bare legal title to the property, but claimed that he held the same in trust for his mother, referred to as Nora Peal, who died intestate on September 23, 1948, leaving him and four other children by her first husband, Charles Taylor Luther, and another child, Nora Peal Fowler, by Erwin P. Peal, as her heirs at law. The prayer of the cross bill was that the children of Nora Peal be made parties to the cause and that the court declare them to be the owners in fee of the property. The court by a proper order made the heirs at law of Nora Peal parties to the suit.

Upon the pleadings and the depositions duly taken and filed by the parties, the learned Chancellor entered a decree dismissing complainant's bill and declaring that Robert L. Luther held the property 'upon a resulting trust for the benefit of the heirs of Lenora Elkin Luther, (also known as Nora Peal);' that Erwin P. Peal was not legally married to Lenora Elkin Luther, and ordering Robert L. Luther and his wife to unite in a proper deed conveying the property to himself and the other five children of his mother. From that decree Erwin P. Peal obtained this appeal.

The only error assigned is that the decree dismissing the bill of complaint and declaring that Robert L. Luther held the property in trust for the sole benefit of the heirs at law of Nora Peal, is contrary to the law and the evidence.

Robert L. Luther admits that he paid no part of the purchase price and that he accepted legal title to the property under an express parol agreement to hold it in trust. The decisive question in dispute is whether he agreed to hold title for the joint benefit of Erwin P. Peal and Nora Peal or for the sole benefit of one of them to the exclusion of the other.

There is a well defined distinction between a resulting trust and an express trust. A resulting trust is created where a party makes or causes to be made a transfer of property under circumstances from which it is inferred that he did not intend that the transferee should have the beneficial interest in the property. An express trust is created where it is established that there was an affirmative intention to create it. In other words, a resulting trust is based on a presumption or inference of law from the circumstances, while an express trust is based on proof of the declared intention of the trustor. Young v. Holland, 117 Va. 433, 84 S.E. 637; Woods v. Stull, 182 Va. 888, 30 S.E.2d 675; 19 Michie's Jur., Trusts and Trustees, § 5 et seq., p. 50 et seq.; 54 Am. Jur., Trusts, § 187, p. 146; 89 C.J.S., Trusts, § 11, p. 722; 2 Restatement of the Law of Trusts, § 404, p. 1246. See also, Kellow v. Bumgardner, 196 Va. 247, 83 S.E.2d 391.

It is well settled in this jurisdiction that an express trust in land may be established by parol. Ingles v. Greear, 181 Va. 838, 27 S.E.2d 222; Va. Trust Co. v. Minar, 179 Va. 377, 18 S.E.2d 879; Jackson v. Greenhow, 155 Va. 758, 156 S.E. 377; Daniel v. Viar, 147 Va. 323, 137 S.E. 526; Brame v. Read, 136 Va. 219, 118 S.E. 117; Young v. Holland, supra.

A decree based upon depositions is not entitled to the same weight as a decree based upon testimony heard ore tenus; however, such a decree is presumed to be correct and the burden is upon the losing party to rebut the presumption. Porter v. Frost, 183 Va. 549, 32 S.E.2d 687; Lavenstein v. Plummer, 179 Va. 469, 19 S.E.2d 696.

There is some testimony tending to prove that Robert L. Luther agreed to hold the title for the sole benefit of his mother, Nora Peal, but the preponderance of the evidence proves that he accepted title to the property under an express trust for the joint benefit of Erwin P. Peal and Nora Peal.

In 1907 Lenora Elkin married Charles Taylor Luther, by whom she had five children. She left him in 1919 or 1920, and on February 15, 1921 went through a marriage ceremony with Erwin P. Peal, in the county of El Paso, Texas, with whom she lived as his wife until her death in 1948. For a number of years all the children of the former marriage, except one, lived with their mother and Erwin P. Peal. Several of the children made their home with them after they moved to 219 South Third Street in Richmond. Nora Peal Fowler, the only child of Erwin P. Peal and Nora Peal, lived with her parents on the property until her mother's death and was living there when her deposition was taken in this case.

On August 19, 1932, the property, containing five apartments, was conveyed to Erwin P. Peal and Nora Peal who, as a part of the purchase price, assumed the payment of an outstanding obligation that was secured by a deed of trust on the property. The parties then or soon thereafter moved into one or more of the apartments and occupied it as a home. On July 25, 1936, Erwin P. Peal was declared a bankrupt and failed to pay the notes secured by the deed of trust. He and Nora Peal were told by a real estate agent, E. F. Schmidt, that if they desired to save their interest in the property, they should permit it to be sold under the deed of trust and to arrange to have it purchased by some member of the family who would hold it in trust for their benefit.

One E. V. Askew purchased the property and by deed dated June 21, 1937, conveyed the same to Robert L. Luther, the son of Nora Peal. Luther, on the same date, executed two deeds of trust conveying the property to E. F. Schmidt and A. D. Smith, Jr., trustees. The first deed of trust was executed to secure the payment of...