Shelton v. Harrison

• Decision Date: 02 June 1914
• Docket Number: No. 1113.,1113.
• Parties: SHELTON et al. v. HARRISON et al.
• Court: Missouri Court of Appeals

167 S.W. 634

182 Mo. A. 404

SHELTON et al. v. HARRISON et al.

No. 1113.

Springfield Court of Appeals. Missouri.

June 2, 1914.

1. TRUSTS (§ 359)—JURISDICTION—ESTABLISHMENT.

The establishment of trusts and the enforcement of trust relations is an ancient ground of equity jurisprudence.

2. JURY (§ 14)—RIGHT TO JURY TRIAL—ENFORCEMENT OF TRUST.

A suit to establish and enforce a resulting trust as to the proceeds of a sale of land alleged to have been purchased by defendant's husband, since deceased, with money contributed by complainants, was a suit in equity, though the judgment prayed was for money only, and hence defendants were not entitled to a jury trial.

3. EQUITY (§ 91)—PARTIES—JOINDER.

In a suit in equity, every person having any material interest, whether legal or beneficial, in the subject-matter is properly made a party, regardless whether the interests of the parties be joint or several, nor is it material whether they are joined as co-complainants or brought in as defendants; the object being to settle the whole controversy and secure a decree binding on all the parties in interest.

4. TRUSTS (§ 366)—RESULTING TRUST— PARTIES.

Where several persons paid money to plaintiff's husband, since deceased, as their agent or representative, with which he purchased land to be used as a co-operative fruit farm, and, he having died after purchasing the property, the scheme collapsed and the land was sold under foreclosure, which sale resulted in a surplus, all of the contributors were proper parties to a suit against decedent's widow to enforce a resulting trust as to such surplus, and were not bound to institute separate suits to enforce the rights of each.

5. TRUSTS (§ 1)—WHAT CONSTITUTES—DEFINITION.

A trust in real estate exists whenever the legal title is in one person and the equitable or real title in another, or when the title is in one person and the ownership in another; the trust being the beneficial title or ownership of property of which the legal title is in another.

6. TRUSTS (§ 72)—RESULTING TRUST—PURCHASE OF REAL PROPERTY—PAYMENT OF PRICE—TITLE IN THE NAME OF ANOTHER.

When one person pays the purchase money for land, and the title is conveyed to a stranger, a trust prima facie results in favor of the party who pays the money, nor does the fact that the person furnishing the money directs or consents or agrees that the title be placed in such other party, to be held by him in trust, make the trust an express rather than a resulting one.

7. TRUSTS (§ 72)—"RESULTING TRUST"— STATUTES.

A resulting trust arises as a matter of law from the fact that the consideration for land is paid by one person and the title taken in the name of another; the trust arising whether in accordance with or against the intentions of the parties.

8. TRUSTS (§ 72)—RESULTING TRUST—ESTABLISHMENT.

A resulting trust never arises in the hands of one who is the real owner of the property, but is impressed on the property by the very act and at the time of the vesting of the title, and hence cannot arise by the act or agreement of one party who both pays the consideration and takes the title in himself, nor by act or agreement subsequent to the conveyance.

9. TRUSTS (§ 75)—RESULTING TRUST—BORROWED FUNDS.

That credit is given or money borrowed and subsequently paid is sufficient to raise a resulting trust where property is purchased with funds furnished by one person and the title taken in the name of a stranger.

10. TRUSTS (§ 62)—RESULTING TRUST— "PASSIVE OR DRY TRUST."

A resulting trust which may be established by parol is always a passive or dry trust, as the mere holding of the title for the benefit of another does not impose on the trustee any duty or responsibility as to the management, control, or disposition of the property, except to convey the legal title to the cestui que trust or at his direction.

11. TRUSTS (§ 72)—RESULTING TRUST— PROOF.

Where plaintiff's husband, since deceased, organized an association to purchase a fruit farm, the members of which made monthly payments to him with which the farm was purchased, but not fully paid for, and there was no evidence of any express agreement either that the title should be taken in decedent's name, as was done, or that a corporation should be formed and the property transferred to it,

there was no express trust, but a trust of the surplus proceeds on a sale of the property on foreclosure resulted in favor of the contributors, which was provable by parol.

Appeal from Circuit Court, Jasper County; D. E. Blair, Judge.

Suit by George A. Shelton and others against Edna Harrison and others. Decree for complainants, and defendants appeal. Affirmed.

T. D. Steele, of Monett, and Hugh Dabbs, of Joplin, for appellants. Mayhew, Sater & Gardner, of Monett, for respondents.

STURGIS, J.

The relief prayed for and granted in this case in the trial court is to declare and adjudge a resulting trust in favor of plaintiffs and against the defendant Edna Harrison, widow of A. H. Harrison, in the excess proceeds of 80 acres of land in Barry county, Mo., over and above the amount due on a deed of trust thereon, in default of which the land was sold and such excess proceeds paid to defendant Edna Harrison. The salient facts giving rise to this controversy are that A. H. Harrison, a route agent of an express company, living at Monett, originated and promoted a scheme having for its object the purchase of this land for a fruit farm with money to be paid in monthly installments by him and his associates, the 12 plaintiffs and the other 4 defendants. These 4 defendants failed to make the payments and have disclaimed any interest in the fund in controversy. The execution of the plan contemplated the forming of a corporation, after the land was paid for, to own and hold the land, in which said Harrison and his associates, these plaintiffs, would be stockholders in proportion to the amounts paid by each. Each stockholder was to pay $10 per month for 12 months. There were originally other parties in the scheme, but a number of these dropped out early. The management of the matter seems to have been left almost entirely to said Harrison; his associates being his friends and for the most part employés of the same express company, and who had entire confidence in him. This confidence was in no wise abused by Harrison, as he kept a faithful account of all the money paid to him, applied same to the purpose for which it was paid in as fast as needed, and made known in every way the fact that he was acting for his associates. Whenever payment was made to him, he issued a receipt in this form:

"Received of ____ the sum of $10.00 being the ____ monthly payment on the purchase price of land in S. ½ of S. W. ¼, 36, 24, 28, to be incorporated and stock to be issued for the amount paid in, when twelve (12) monthly payments of $10.00 (dollars) each have been paid."

Soon after the first payments were made to him, Harrison purchased said tract of land for $1,777.50, paying $200 cash, taking the title in his own name, and executing his notes to the vendor, payable monthly, for $100 each, secured by a deed of trust on said land. Thereafter he continued to collect the monthly payments from his associates, paid the purchase-money notes, with interest, as same became due each month, until eight notes, with interest, in addition to the initial cash payment of $200, were paid, making $1,000 and interest, $2.85, paid and invested in this land. Thereupon Harrison died. No one was left to manage or look after the business, monthly payments were no longer paid or collected, default was made in paying the remaining purchase-money notes, and in due time the deed of trust was foreclosed, the land sold thereunder for $1,665, the unpaid notes and expenses of the sale paid out of such proceeds, leaving a balance of $752.42, which was paid over to and received by the defendant Edna Harrison, wife of said A. H. Harrison, deceased.

At the time of his death, the said A. H. Harrison had collected from each of his associates, the 12 plaintiffs, 9 monthly payments of $10 each, except that one plaintiff only paid 8 of such payments, making a total collected by Harrison of $1,070. He had paid out in addition to the $1,002.85, paid on the purchase price of the land, other legitimate items for recording, abstract of title, postage, etc., making the total expenditures $1,044.95. All these facts are shown by the books and papers kept by said Harrison, and he seems to have been careful to keep and leave a complete record of the whole transaction. There is no doubt whatever that the part of the purchase price of the land paid at and prior to Harrison's death was paid with money furnished by these plaintiffs. The defendant Mrs. Harrison knew these facts and testified to the same on the witness stand. In fact, after her husband's death, Mrs. Harrison furnished one of the plaintiffs a written statement showing the names of the parties who had furnished money to buy this land and the amounts contributed by each, making a total of $1,140, but in making such statement she had figured her husband as paying to himself, which he did on paper, the same monthly payments as his associates, making $90 contributed by him, and overlooked the fact that one plaintiff had taken over the share of another party after two payments of $10 each had been made, and thereby credited him with paying only $70 instead of $90. She also stated therein that there was a balance due on the land of about $800, and referred to the receipts given to the plaintiffs and the deed to her husband for a description of the land. It is also shown and admitted that Mrs. Harrison had some negotiations after her husband's death and before the sale of the land under the deed of trust, and made an offer looking to the purchase by her of the "shares" of the various plaintiffs in this land.

Under the facts of this case, there can be no doubt but that these plaintiffs...