Von Trotha v. Bamberger

• Decision Date: 28 March 1890
• Citation: 15 Colo. 1,24 P. 883
• Parties: VON TROTHA et al. v. BAMBERGER.
• Court: Colorado Supreme Court

24 P. 883

15 Colo. 1

VON TROTHA et al. v. BAMBERGER.

Supreme Court of Colorado

March 28, 1890

Error to district court, Arapahoe county.

Syllabus by the Court

1. A verbal agreement to share the profits arising from the purchase and sale of real estate may be made independent of any contract for an interest in the land itself. When so made, the agreement is not within the statute of frauds, and may become the foundation of an action for a money judgment but not for a decree of specific performance affecting the title to the real estate.

2. In jurisdictions having a statute of frauds like ours, the general rule is that the existence of a direct or express trust cannot be established by parol evidence.

3. When the legal title to land has been acquired in pursuance of a verbal agreement to hold the same in trust for a specified purpose, the agreement cannot be upheld as an express trust but, if it be clearly established that the title has been fraudulently acquired, and is still held in fraud of the rights of another having a valuable interest in the premises a trust by operation of law may be declared upon equitable terms.

4. Parol evidence is admissible to prove facts from which a trust by implication of law may arise, but such evidence is not competent to prove an express trust, where the statute of frauds is relied on as an objection.

5. Averments in pleadings in avoidance of the statute of frauds must not only be direct and positive, but they must be clear and unequivocal, or they will not be regarded as sufficient, either in form or substance.

6. Where the statute of frauds prevails, a mere oral promise to reduce to writing a verbal agreement declaring a trust in land, and the breach thereof, are not admissible to establish such trust, except in connection with other evidence tending to show fraudulent conduct in the acquisition of the title by the party holding it; but, when the existence of fraud is thus shown, equity will declare the party thus acquiring and holding the title a trustee ex maleficio upon the terms of the dishonored verbal agreement, or other equitable terms, for the benefit of a person having a subsisting valuable interest in the premises.

7. Acts of part performance, such as will furnish a foundation for enforcing a verbal contract respecting land otherwise void under the statute of frauds, must be such as are done in pursuance, or according to the terms, of the contract, and which in some manner affect or change the relation of the parties in respect to the property, whereby one of the parties would be defrauded if the contract were not enforced.

8. Actual possession in furtherance of the terms of the contract, especially when accompanied by the making of permanent and valuable improvements upon the premises, may be made the foundation of a decree for specific performance; but mere possession will not be deemed a part performance sufficient to justify such relief when it may fairly be referable to some other cause than the execution of the contract.

A. W. Rucker and Wells, McNeal & Taylor, for plaintiffs in error.

W. J. Sharman and L. S. Dixon, for defendant in error.

ELLIOTT J.

This was an action by Therese L. Bamberger, plaintiff below, to recover possession of certain real estate. In her complaint plaintiff claimed to be the owner in fee-simple of the premises, and charged, in substance, that Claude and Helene L. von Trotha, husband and wife, defendants below, had stealthily entered into a certain building situate thereon, and have falsely asserted that the title thereto was in said defendant Helene, and with force and arms have excluded plaintiff therefrom, notwithstanding plaintiff's title is absolutely plain and clear, and defendants' without right, etc. The defendants by their answer denied plaintiff's title; and, by cross-complaint, the defendant Helene alleged in substance, among other things, that she, through her husband, negotiated and bargained for the land in the first instance, but that, failing in her efforts to complete the purchase, she brought the same to the notice of plaintiff, and thereupon entered into a verbal agreement whereby plaintiff was to pay the consideration, and take the title in her own name, to hold in trust for said defendant; that the agreement between plaintiff and defendant, at the time, was to the effect that the land should be graded and platted into blocks and lots, the plaintiff furnishing the necessary money therefor; that, 'in consideration of allowing plaintiff an interest in the purchase and enterprise,' it was agreed that, when sufficient lots should be sold to reimburse plaintiff for the purchase money and the cost of improvements, 'the remaining part of the premises should be equally divided between plaintiff and defendant;' that, to secure to said Helene the carrying out on the part of plaintiff of the terms of said agreement until such time as the terms should be reduced to writing, it was agreed that defendant should go into exclusive possession of the premises for the benefit of the parties holding and owning the same, and retain possession until the division thereof should be made in accordance with their said agreement; that, in pursuance of such agreement, plaintiff paid for and received the deed of the premises, and undertook to take immediate and exclusive possession of said property; that afterwards said defendant, having procured the removal of a certain tenant who was temporarily occupying the premises, went into the exclusive possession of the property under said agreement, and so remained up to the commencement of this action; that plaintiff now absolutely refuses to execute her said agreement with defendant, and claims the entire right to said property as her own, to the exclusion of defendant, and threatens to sell the same, and convert the profits thereof to her own use; that said premises have greatly increased in value since the purchase; 'that said premises are capable of division at the present time, in accordance with the original contract between plaintiff and defendant;' and defendant asks that 'plaintiff be ordered and adjudged to specifically perform the contract,' and for other relief. The court, upon the evidence, made certain special findings favorable to defendant, but which need not be set out at length, since afterwards, upon the final hearing, the court found 'that all the allegations of the plaintiff's complaint are substantially true, and also that the allegations of the defendant's cross-complaint are true in manner and form as heretofore found and recorded by the court; but that, all and singular, the matters in the said cross-complaint alleged are insufficient in law to enable the defendant to obtain any relief,' etc. Judgment was entered in favor of plaintiff for the possession and peaceable enjoyment of the premises, and the cross-complaint of the defendant was dismissed. To review this judgment, defendants bring the case to this court. In the special findings of the court referred to in the final decree, the trial judge speaks of the defendant's cross-complaint as 'setting up the facts substantially as I have found them.' Nevertheless, such findings differ materially in legal effect from the allegations of the cross-complaint. For example, the findings state the agreement between plaintiff and defendant to have been that, 'upon a sale of the property after payment of all charges, interest, and taxes, in addition to the cost of the property, they should share and share alike in the profits to be derived from the adventure.' And again, the trial court in connection with the special findings says: 'The property, if taken in the name of Mrs. Bamberger would have been held in trust for the purpose of being sold and dividing the profits after payment of all the charges among the persons concerned. * * * She therefore stands to-day, in the view of the court, as a trustee holding the property, not as a permanent investment, but merely and simply for the profit that is to be had from the transaction.' On the other hand, the cross-complaint, as we have seen, sets forth an agreement whereby 'the remaining part of the premises should be equally divided between plaintiff and defendant' after plaintiff should be reimbursed from the sales, etc., and also speaks of defendant as taking possession of the property for the benefit of the parties holding and owning the same * * * as an undivided whole until a division thereof should be made in accordance with their said agreement,' and other similar expressions. The prayer of the cross-complaint is for a decree for the specific performance of the original contract based upon the theory that 'said premises are capable of division.' Nowhere in the cross-complaint is it alleged, either directly or indirectly, that there was ever any agreement between plaintiff and defendant to engage in the buying and selling of the property in controversy, or any part thereof, or any other property or thing, and to 'divide the profits to be derived from the advanture.' Neither in the cross-complaint nor in the special findings is there any statement that plaintiff has sold or parted with any portion of the property or any interest therein, or that there was any time fixed or agreed upon between the parties within which the land or any portion thereof should be sold. Hence, the special findings were not sufficient to support an equitable decree for profits in favor of defendant, even if the cross-complaint had been framed upon the theory that the verbal agreement was a mere contract for the division of profits between parties engaged in the business of buying and selling real estate. A verbal agreement to share the profits arising from the purchase and sale of real estate may...