Randall v. Constans

• Decision Date: 28 April 1885
• Citation: 23 N.W. 530,33 Minn. 329
• Parties: RANDALL, ADM'R, ETC., v CONSTANS.
• Court: Minnesota Supreme Court

33 Minn. 329

23 N.W. 530

RANDALL, ADM'R, ETC.,vCONSTANS.

Supreme Court of Minnesota.

Filed April 28, 1885.

Appeal from an order of the district court, Ramsey county, overruling demurrer of defendant.

Williams & Goodnow, for respondent, John H. Randall, adm'r.

Warner & Stevens, for appellant, William Constans.

VANDERBURGH, J.

It stands admitted upon the pleadings that one William H. Randall held a contract for the purchase of the land described in the complaint, made with one Daniel Hopkins, as vendor, upon which he had paid a portion of the purchase money, and alleged to be of great value to the wife of Randall, for whom the purchase was made. Before the final payment of the purchase money, Randall, having become financially embarrassed, and unable to fulfill on his part, the defendant, who was his personal friend, volunteered to aid him, and to advance sufficient to complete the purchase. And it is alleged that thereupon it was duly agreed between him and Randall-Mrs. Randall also being a party-“that the defendant should take a deed of the premises and hold the same in trust for the benefit of said Elizabeth C. Randall until the same could be advantageously sold; and the said defendant did duly undertake and agree, to and with said Elizabeth, to hold the said real estate in trust and for her benefit, to collect the rents, pay the taxes and incumbrances thereon, and sell the same, and after deducting the difference between the sums collected and the sums he should advance, pay over the proceeds to the said Elizabeth C. Randall.” That defendant, in pursuance of this arrangement, completed the purchase and received a deed of the premises from Hopkins, at the instance and request of Mrs. Randall, and took possession under such agreement, receiving the rents and profits, and paying the taxes, till the year 1883, when he sold and converted the property into cash. In the mean time both Mr. and Mrs. Randall had deceased, and this action is brought by the administrator of the latter for an accounting, and to recover a balance alleged to be due her estate on account of the transaction, after deducting all claims of defendant for advances made by him in and about the trust. It is also alleged that defendant had frequently promised Mrs. Randall and plaintiff, as her agent, to sell the land and account for the proceeds. Subsequent to the sale, plaintiff, as her administrator, duly demanded that he should account for and pay over the balance due the estate, which defendant has refused to do.

The sufficiency of the allegations of the complaint upon the demurrer is the question before the court on this appeal. It does not appear by any averment in the complaint whether the agreement or declaration of trust, if such it may be called, was in writing or by parol. In the absence of any admission on the subject upon the argument, it may be presumed that the agreement referred to was in writing, and valid within the requirements of the statute of frauds. Wentworth v. Wentworth, 2 Minn. 283, (Gil. 238;)Cozine v. Graham, 2 Paige, 178; Reed, St. Frauds, § 505, and cases; Hill, Trustees, § 93, notes. In this view we think the case might easily be disposed of. In equity, Randall was to be deemed the owner of the land, and Hopkins the trustee of the legal title, subject to the payment of the amount due under the contract. Randall had, therefore, a valid interest to protect, which might be made the subject of a trust or power in trust, to be determined by the nature of the agreement between the parties. Stoddard v. Whiting, 46 N. Y. 632, 633;Carr v. Carr, 52 N. Y. 259.

The deed from Hopkins, and the agreement or declaration of trust, (which we have seen must be presumed to have been properly executed,) may be construed together as parts of one transaction, and establishing the trust as to Randall's equity, which was, it seems, to be turned over to Mrs. Randall. Wright v. Douglass, 7 N. Y. 570.

It will be observed, however, that the declaration of trust sought to be created is not among those permitted by the statute of uses. Gen. St. 1878, c. 43. Neither is the instrument in form a power in trust, as defined by the statute; but, except for the statute, the trust would be valid as an express trust; and, in such cases, where it is intended “to authorize the performance of any act which may be lawfully performed under a power,” it shall be deemed valid as a power in trust. Chapter 43, § 14. The form of the instrument constituting the trust in such cases is not material if properly executed. If it were required to be a formal power in trust, then the provisions of section 14 would be meaningless. The trust declared becomes, under that section, constructively a power in trust. The case is illustrated by New York Dry-dock Co. v. Stillman, 30 N. Y. 174. We are of the opinion, therefore, that the complaint may be sustained on this ground.

But plaintiff's argument is largely directed to the establishment of a parol trust. It is proper, therefore, also to consider the case upon the assumption that there was no declaration of trust, though if an answer shall be filed the issues may be so presented that the discussion may, perhaps, prove of little value in the case. The statute controlling the effect of such agreements provides that no trust or power over lands, or in any manner relating thereto, shall be created or declared except by deed or conveyance in writing, saving, however, such as might arise by implication or operation of law.

The purpose of the transaction, as alleged in this case, was, undoubtedly, while securing defendant for his advances, to save for Mrs. Randall the benefit of her husband's equity in the land. McLanahan v. McLanahan, 6 Humph. (Tenn.) 99. To such equity in the land was the trust or power intended to relate. The plaintiff claims that the trust is established, because admitted by the demurrer. He also insists that the defendant, having finally disposed of the estate, has completed the trust, and is liable under the agreement to the cestuis que trust for the net proceeds above the amount of his advances and expenditures. It was undoubtedly entirely competent and lawful for him to recognize and execute the trust, though it could not be enforced while still executory. The trust also rests on a strong moral obligation, in view of the fact, if the complaint be true, that he received the property upon such trust and condition. Robbins v. Robbins, 89 N. Y. 257;Karr v. Washburn, 56 Wis. 306; S. C. 14 N. W. REP. 189. This contention is necessarily based upon the assumption that the stipulation in the agreement to account and pay over the proceeds of the land to the plaintiff's intestate was independent and severable, and not within the statute. So that, upon the consummation of the sale, a cause of action arose in plaintiff's favor for the balance agreed to be paid.

It is held that an agreement upon sufficient consideration to pay over to a third party a certain portion of the price or proceeds received upon the sale of specific real property, is not within the statute of frauds. Gwaltney v. Wheeler, 26 Ind. 416;Hess v. Fox, 10 Wend. 436;Graves v. Graves, 45 N. H. 323. So also of an agreement to share the profits on the sale of lands. Snyder v. Wolford, 22 N. W. REP. 254, and cases cited. An action may also be maintained for the consideration for which land has been conveyed by deed under a parol agreement. The bargain being consummated by the execution and delivery of a deed, is liable to no objection arising from the statute of frauds. Bowen v. Bell, 20 Johns. 339;Basford v. Pearson, 9 Allen, 390.

The agreement, however, set out in the complaint, is not a mere agreement to sell and dispose of land, but a trust or power for the disposition thereof, which is required to be specificially declared, and the management, sale, and accounting to the cestuis que trust together constitute the trust. The net result was to accrue to plaintiff's intestate. It is not admitted that he made the sale in execution of the trust or in pursuance of the agreement, or that he holds the funds as trustee of plaintiff. In Robbins v. Robbins, supra, the sale had been completed under a parol trust, and the securities received therefor had been turned over to the cestuis que trust, though not formally assigned, and the court very properly refused to interfere in behalf of the alleged trustee. In Tracy v. Tracy, 3 Bradf. 57, the trustee admitted the trust as to the moneys in his hands received on a sale of lands which had been conveyed to him under a parol trust, and the trust was sustained as valid, there being an independent declaration or manifestation of a trust in personal property by parol which is permitted, not being within the statute. Day v. Roth, 18 N. Y. 448. It is apparent, therefore,...