Schumacher v. Dolan

• Decision Date: 13 February 1912
• Citation: 134 N.W. 624,154 Iowa 207
• Parties: G. H. SCHUMACHER ET AL., Appellants, v. B. A. DOLAN ET AL., Appellees
• Court: Iowa Supreme Court

134 N.W. 624

154 Iowa 207

G. H. SCHUMACHER ET AL., Appellants, v. B. A. DOLAN ET AL., Appellees

Supreme Court of Iowa, Des Moines

February 13, 1912

Appeal from Des Moines District Court.--HON. JAMES D. SMYTHE, Judge.

SUIT in equity to establish a lien or trust upon certain lands, the title to which is in defendant Dolan, for the appointment of a trustee in place of Dolan, and for other equitable relief. The trial court dismissed plaintiff's petition, and he appeals.--Reversed and remanded.

Reversed and remanded.

W. J Roberts and Wade, Dutcher & Davis, for appellant.

Blake & Wilson, for appellees.

OPINION

DEEMER, J.

In April of the year 1905, the Midland Blast Furnace Company, by quitclaim deed, conveyed to defendant Dolan a tract of land in Lee county, Iowa, consisting of something over sixty-one acres. Shortly thereafter, and on September 21st of the same year, Dolan executed and delivered to James H. Renihan, now deceased, the following paper "This memoranda made this 21st day of September, 1905, certifies that I hold in trust for J. H. Renihan one-half of the land I secured from the Midland Blast Furnace Co. subject to claims of Anderson Smith and others and costs & expenses against same." On December 12th of the same year, defendant sold nine and a fraction acres of said land, leaving about fifty-two acres still standing in his name. On September 20, 1902, G. H. Schumacher, now deceased, loaned to Renihan $ 1,200, taking as evidence thereof a promissory note, payable three months after date. Renihan added to his signature to the note the following, "Pastor of Saint Francis Church." In other respects, the note was in the ordinary form of such instruments. Interest was paid on the note for the years 1903, 1904, and 1905. In 1906 Schumacher urged payment of the principal sum, and Renihan made some payments thereon, but, being unable to pay it all he (Renihan) attempted to secure the same in the following manner: Evidently, after consultation with Dolan, he (Dolan) wrote the following: "Rev. & Dear Sir: 1. Rev. Jas. Renihan has half interest subject to expenses and advances by me in fifty-two acres. 2. They are not incumbered. 3. As he has no title he could not mortgage. The title stands in my name. 4. I do not care to mortgage it for him, but with his consent on his order I would account to you the amount of $ 1,000 when I sell. I have refused an offer of $ 3,600 recently for this tract. A year ago I was offered just half of that. I will let it go when I get $ 5,200 which may be any day as Judge Parsons told me about the 1st that the rural mail carrier who owns forty acres across the track from this turned down an offer of $ 80 per acre. Yours very truly, B. A. Dolan." This letter was addressed to and was received by Schumacher. This was followed by an agreement between Rev. Gerh. H. Schumacher, creditor, and James H. Renihan, debtor:

"As soon as Mr. B. A. Dolan has sold certain fifty-two acres, in which Rev. James H. Renihan has one-half interest, said B. A. Dolan shall pay off a note of Rev. Gerh. H. Schumacher, signed by Rev. James H. Renihan, from the proceeds of said intended sale. Mr. B. A. Dolan is hereby authorized and ordered to act according to the above agreement. Keokuk, Iowa, June 15, 1906. Rev. Gerh. H. Schumacher. J. H. Renihan.

"I hereby promise and bind myself to act according to the above agreement. B. A. Dolan."

In May of the year 1908, defendant Dolan paid $ 100 on the note to Schumacher, but since that has paid nothing, and now denies that he ever held the land in trust, or subject to any claim or lien of the deceased, Schumacher. Indeed, he avers in his answer that he sold the fifty-two acres of land on August 17, 1907. Because of this conveyance, judgment is asked against him for the balance due on the note now held by Schumacher's administrator. For some reason, not apparent of record, judgment was denied.

Code, section 2918, provides that: "Declarations or creations of trusts or powers in relation to real estate must be executed in the same manner as deeds of conveyance; but this provision does not apply to trusts resulting from the operation or construction of law." It is not essential to the validity of a deed, as between the parties thereto, that it be acknowledged; and by analogy it follows that a written declaration of trust need not be acknowledged or recorded. McMaken v. Niles, 91 Iowa 628, 60 N.W. 199; Kruger v. Walker, 94 Iowa 506, 63 N.W. 320; Jones v. Berkshire, 15 Iowa 248.

Nor is it necessary to the validity of such declaration that it be based upon a consideration passing to the trustee. Upon delivery of the declaration, a perfect and complete trust is established, and it will be enforced, although voluntary. Leeper v. Taylor, 111 Mo. 312 (19 S.W. 955). From the opinion in that case, we quote: "The point is made however, that it is void for want of consideration. It may be conceded that a court of equity will not enforce an executory agreement, based upon a voluntary consideration. But a settler possessed of a legal title may create a valid trust therein by a declaration that he holds the title in trust for the other person. A transfer of the title is not necessary. Bispham on Equity (4th ed.), section 67. Here the...