Taylor v. Miles

• Citation: 25 P. 143,19 Or. 550
• Parties: TAYLOR v. MILES.
• Decision Date: 03 November 1890
• Court: Supreme Court of Oregon

25 P. 143

19 Or. 550

TAYLOR v. MILES.

Supreme Court of Oregon

November 3, 1890

Appeal from circuit court, Multnomah county; L.B. STEARNS, Judge.

This is a suit in equity, brought by the plaintiff, to quiet title and to have a trust declared in certain lands described and lying in East Portland, standing in the name of his wife Elizabeth Taylor, now deceased. The plaintiff alleges that now, and since the 16th day of December, 1869, he has been the owner and in possession of the said property, describing it; that on that day he purchased and paid for said described property, and had the legal title to the same conveyed to his wife, Elizabeth Taylor, in trust for himself; that she received such title in trust for him, and agreed to hold it subject to plaintiff's directions and control, and to convey the title to him, when demanded, and that, in case of her decease before the property was otherwise disposed of she would leave a will devising the legal title to the plaintiff; that, on the 30th day of April, 1882, the said Elizabeth Taylor made her will devising said property to the plaintiff, and died on that day; and that the defendant claims an estate or interest in said property adverse to the plaintiff, etc. The defendant by his answer, after denying the facts, as alleged, sets up, affirmatively, (1) that the said Elizabeth Taylor was seised in fee-simple of said lands and that she died intestate, leaving no heirs at law, except three daughters, naming them, each of whom inherited an undivided one-third of said property, etc., and that the defendant, by a regular chain of conveyances, has succeeded to the interest of two of such heirs; and (2) that the plaintiff ought not to be permitted to maintain his suit on account of facts alleged to create an estoppel, etc. Upon issue being joined the evidence was taken and submitted to the court, which, being duly advised by argument, after mature deliberation, found that plaintiff had no right or title to the described lands, except by estate by curtesy and that the said Elizabeth Taylor did not hold the same in trust for plaintiff, nor subject to his direction and control; that she did not make a will devising the said property to the plaintiff, but that she was the owner thereof in fee-simple, and that the defendant had succeeded to her right in an undivided two-thirds thereof, subject to the curtesy of the plaintiff; and thereupon decreed that the plaintiff had no right, title, or interest therein, except an estate by curtesy for his own life; and that the defendant is the owner in fee-simple of an undivided two-thirds of said land, subject to said estate by curtesy, etc. From this decree the present appeal is brought.

(Syllabus by the Court.)

When land is conveyed to one person, and another pays the consideration, a resulting trust will be presumed in favor of the one paying the consideration. It rests on the equitable principle that the property belongs to him who advances the money to pay for it.

As the trust results from the payment of the consideration, if the party claiming to be the beneficial owner has made no payments, he cannot show, by parol evidence, that the purchase was made for his benefit, for that may not involve anything more than a breach of a parol agreement to purchase and hold in trust for another.

It is not essential that the payment of the consideration be in money, but it may be made in anything of value.

The presumption that the party paying for the property intended it for his own benefit applies only when the transaction is between strangers, where there is no moral or legal obligation resting on the purchaser to pay the consideration for another.

When a purchaser takes conveyances in the name of his wife, the rule is reversed, and equity raises the presumption that the purchase and conveyance was intended as an advancement or gift.

If a purchaser takes a deed in the name of his wife for the purpose of hindering and delaying his creditors, and not for the purpose of making an advancement, a trust will result to the purchaser, and the land be liable for his debt.

The law enforces a careful regard for the rights of creditors against conveyances without consideration made by a party largely indebted, and unless he makes provision for the payment of his debts, or retains other property of sufficient value for that purpose, they are of no validity as to such creditors.

Whether a party largely indebted can put his property in the hands of another to hold until he can pay his debts, and, when the debts are paid, the transaction will be relieved of its fraud, not decided.

Where a party, in order to secure his property against the claims of his creditors, conveyed it to another to hold until he could pay his debts, and, after such debts were paid, directed it to be conveyed to his wife, and subsequently joined with her in a deed in exchanging said property for other property with C., held, that not trust resulted to him in such property.

A.L. Frazer and E.B. Williams, for plaintiff.

B. Killen and W.E. Thomas, for defendant.

LORD, J., (after stating the facts as above.)

The question raised by this record is whether, upon the facts the wife of the plaintiff held the property in dispute in trust for him, or in her own right as the intended beneficiary of it. Where one purchases an estate, and pays for it, and takes the title in the name of another, or where one purchases land with the money of another, and takes the title to himself, there arises, by operation of law, a resulting trust in favor of him whose money paid for it. Parker v. Newitt, 18 Or. 274, 23 P. 246. It rests on the equitable principle that the property belongs to him who advances the money to pay for it, or that the beneficial ownership follows the consideration. If the party claiming to be the beneficial owner has made no payments, he cannot show, by parol evidence, that the purchase was made for his benefit, for that might involve no more than a breach of a parol contract to purchase and hold in trust for him. Nor is it essential that the payment of the consideration be in money, but it may be made in anything of value. "It is sufficient," said WELLS, J., "if that, in fact, which formed the consideration of the deed moved from the party for whom the trust is claimed to exist, or was furnished in her behalf, or on her credit. The trust results from the purchase and payment of the consideration by or for one party, and the conveyance of the land to another. The receipt of a deed founded on such a transaction raises a presumption that it was taken for the benefit of the party supplying the consideration." Blodgett v. Hildreth, 103 Mass. 487. As a consequence, it follows that a trust must arise, if at all, at the time of the conveyance, and that the money, or other consideration for the deed, which is the foundation of the trust, must then be paid or secured to be paid. White v. Carpenter, 2 Paige, 238. The resulting trust must arise at the time of the purchase, and cannot be created afterwards. But the presumption that the party paying for the property intended it for his own benefit applies only when the transaction is between strangers, where there is no natural or legal obligation resting on the purchaser to pay the consideration for another. When the purchaser takes the conveyance in the name of his wife, the sale is reversed, and equity raises the presumption that the purchase and conveyance was intended to be an advancement or gift. "Whenever," says Mr. Pomeroy, "the real purchaser--the one who pays the price--is under a legal or even a moral obligation to maintain the person in whose name the purchase is made equity raises the presumption that the purchase is intended as an advancement or gift, and no trust results." 2 Pom.Eq.Jur. § 1039. But if a husband purchases an estate, and pays the consideration thereof, and procures the title to be conveyed to his wife, with the understanding that she shall convey the same to him ...