Case ID: ohio-st_33/html/0035-01.html
Source: Caselaw Access Project
Author: {"author": "Johnson, Chief Judge.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Watson v. Erb.
    1. The fraud against which equity will grant relief, notwithstanding the statute of frauds, consists in the refusal to perform an agreement upon the faith of Avhieh the plaintiff has been misled to his injury, or the defendant has secured an unconscionable advantage, and not in the mere moral wrong involved in a refusal to perform a contract, which, by reason of the statute of frauds, can not be enforced by action.
    2. A., in pursuance of a parol agreement for that purpose with B., who desired to become the owner of a certain tract of land adjoining his, and for personal reasons was not to be known in the transaction, but was to save A. harmless from all loss or trouble, purchased the land, made a cash payment thereon, took the title in fee to himself, as per the agreement, and gave to the seller his own several promissory notes and mortgage back, to secure the deferred payments. After the contracting for the land, but before making the cash payment or receiving the title, A. repudiated his agency, and gave notice lo B. that he would purchase for himself, with his own money, and refused to receive from B. the money to make the cash payment, but consummated the purchase for himself: Held that the breach of the verbal contract to convey to B. is not such a fraud upon him as authorizes a court of equity to decree a trust in the land, and compel its execution.
    3. Even if such contract could be enforced in equity, it could not be done until adequate indemnity was tendered against the notes and mortgage of A. outstanding, as well as an offer to pay or refund the cash payment.
    Error, to the District Court of Union county.
    This action was brought by the plaintiff against Charles Erb, to compel him to convey certain real estate purchased by him of one Jones and wife.
    On appeal, the district court found its conclusions of fact and law separately, as follows:
    
      In the District Court of Union county, Ohio, March 2Oth, A. d. 1874.
    This day came the parties, by their attorneys, whereupon this cause came on to be heard upon the pleadings and the testimony; and the court having heard the testimony and the agreement of the counsel, do, at the request of the plaintiff, state in writing the court’s conclusions of fact separately from their conclusions of law, as follows :
    
      First. That the plaintiff, in the year 1871, being the owner of a large farm adjoining the 104-f acres of land described in his petition in this case, to which the same would be of peculiar value, was desirous of purchasing .the said 104f acres of land.
    
      Second. That the defendant, Erb, having been negotiated with by the attorneys of George W. Jones and his wife, Jane O. N. Jones, the owners of said 104|- acres of land, for the purchase thereof, and having, as the defend ant, Erb, informed the plaintiff, concluded that he would not accept the terms on which the same could be bought, and that he had concluded to abandon the negotiation, the plaintiff, believing he could buy said land on fairer terms through the agency of the defendant, Erb, than by himself, verbally employed the defendant, Erb, to act for him, plaintiff, and to make a purchase of said land for the plaintiff, and that the defendant, Erb, then professing to be a friend of the plaintiff, on the 13th day of December, a. d. 1871, verbally agreed with the plaintiff' to act for him and negotiate for the purchase of said 104f- acres of land for him, the plaintiff, as a friend; that said Ei'b was to be saved from all loss and trouble by the plaintiff; by reason of said purchase; that the plaintiff, at the same time, offered to deliver to the defendant, Erb, a certain horse, then owned by the plaintiff, so soon as Erb made a purchase of said land for the plaintiff, and as compensation for his (Erb’s) service in making the same as plaintiff’s agent, but that said Erb thereupon declared he would not accept compensation for such services to be by him. performed, on account of the favors which the plaintiff had theretofore conferred upon him; that it was understood and agreed by and between the plaintiff" and said Erb that the contract of purchase was to be made in the name of Erb with said Jones, and nothing was said in regard to making the deed to be executed by Jones and wife for said land directly to the plaintiff.
    
      Third. That the said Erb, in pursuance of said employment, negotiated for the purchase of said 104f acres of land, with the attorneys of said Jones and wife, and from time to time obtained propositions for the sale by them of said land, and on the 16th day of December, 1871, said Erb having reported to plaintiff that he had a definite offer from said Jones and wife for the sale of said land upon the terms following, to wit: $2,000 on the 15th day of January, 1872 ;' $2,000 on the 1st day of March, 1873 ; and $2,000 on the 1st day of March, 1874; with interest on the two last named installments, from the 1st day of March, 1872 ; the plaintiff expressly authorized and requested said Erb to conclude and make a contract for the pui’chase of said land for him (plaintiff), upon the terms above stated; and agreed to have the money ready to pay the first installment of said purchase-money ; that afterward, on the 16th day of December, a. d. 1872, said Erb accordingly made aud entered into a contract in writing with said Jones and wife for the purchase of said land upon the terms aforesaid ; which contract was reduced to writing, and signed by said Erb, and said Jones and wife, and is in the words and figures following, to wit:
    Article oe agreement. — Article of agreement entered into this 16th day of December, 1871, by and between George W. Jones and Jane O. N. Jones, his wife, of the first part, and Charles Erb, of the second part, witnesseth : That the party of the first part has this day sold, and hereby agreed to convey by deed of general warranty to tho said party of the second part at the time hereinafter mentioned, thefollowing real estate, to wit: Situate inUnion county, and State of Ohio ; being iu survey No. 5,726, and being all of lot No. 1, assigned to said Jane O. N.-Jones, in a partition ease of said Jane O. N. Jones and George W. Jones against Ketura M. Hodge and others, in Union county Common Pleas, and being now in the occupation of David Watson, containing 104f- acres, more or less, including the house and all the appurtenances belonging; in consideration therefor the said pai’ty of the second part agrees and binds himself to pay to the parties of the first part the sum of $6,000, as follows : $2,000 on the 15th day of January next, and the balance, $4,000, is to be paid as follows : $2,000 is to be paid in one year from the 1st day of March next; and $2,000 in two years, from March 1st, next; said deferred payments to draw interest at six per cent, from said date, March 1,1872, until due; and, if not paid when due, then said deferred payments are to draw interest at (8) per cent, per annum until paid; the deed is to be made on said March 1, next. At that time a mortgage is to be executed on said premises back to the party of the first part, to secure said deferred payments, according to the tenor of this article.
    In witness we hereto set our hands, the day and year first above written.
    [seal.] Geo. W. Jones,
    [seal.] Jane O. N. Jones.
    [seal.] Charles Erb.
    
      Fourth. That between the 25th day of December, 1871, and the 1st day of January, 1872, the plaintiff made a verbal agreement with one James I. Minshall for a loan of money with which to pay the consideration money for said land (said Minshall was then president of the Madison National Bank, of London, Ohio, and a.man of capital and means), according to said contract of purchase; and afterward, that is, between said 8fh of January and the 13th of the same mouth, the plaintiff made a verbal agreement with one Charles Phellis, whereby it was agreed, that upon a deed being executed to said Phellis for said land, he, said Phellis, verbally agreed with the plaintiff to advance the money to pay the two last installments of said consideration, said Phellis to execute to the plaintiff a bond binding him to reconvey said land to the plaintiff when he reimbursed said Phellis for the money so advanced, and no other provision was by the plaintiff’ made to save said Erb from loss and harm by reason of said purchase; that said Phellis was theu, and still is, worth upward of $50,000 ; and that on the 8th of January, 1872, the plaintiff "would have informed said Erb that he had made an arrangement with said Minshall, but he was prevented from so doing by Erb’s harshness of manner and his refusal to hear him ; that the said Erb then declared to the plaintiff that he, said Erb, did not care whether he got the money or not; that the plaintiff should not have said land anyhow ; and then, and ever afterward, refused to recognize any right of the plaintiff under said contract, or any interest in or to said land in him, but then, and always afterward, utterly renounced said contract, and denied any obligation on his part under the same; and the agreement between the plaintiff and the said Phellis was not communicated to said Erb.
    
      Fifth. That on the 13th day of January, 1872, the plaintiff duly tendered to the said Erb the sum of $2,000, with which to pay to said Jones and wife the first installment of the consideration money'- for said land, according to the the tenor of said written contract; that said Erb refused to accept said sum of $2,000, or any part thereof, and declared he would pay for said land with his own money, and the title to the same, as his own exclusive and absolute property.
    
      Sixth. That on the 13th day of January, 1872, after said tender had been made to him, a deed, executed by said Jones and wife, in accordance with said contract, was delivered by their attorneys to said Erb, conveying to him, Erb, in fee-simple absolutely, the said 104|- acres of land; that, at the same time, said Erb paid out his own money to said attorneys of said Jones and wife, the first installment of said consideration money, and made and delivered to said Jones and wife his (Erb’s) promissory notes and a mortgage on said land to secure the payment of said second aud third installments of said consideration money for said land, according to the terms of said written contract; that on the 15th day of January, 1872, the plaintiff again tendered to said Erb the said sum of $2,000, the first of said installments, but the said Erb refused to accept the same, or any part thereof; that at that time nor at any other, the plaintiff did not tender actual indemnity to said Erb against his (Erb’s) liability on said notes; that prior to said employment of said Erb by the plaintiff, the latter had himself made a contract with said Jones for the purchase of said land which he (plaintiff) failed to perform on his part by not paying a part of the purchase price, and thereupon the same was rescinded by a decree of the Court of Common Pleas of Union county, sometime prior to said employment, and that said Jones would, after that, have refused to have contract with the plaintiff', or to have had any dealings with him: thereupon the court are of the opinion that the said contract whereby the said plaintiff employed the said Erb to purchase said land of said Jones and wife for him (plaintiff) was a valid and biudiug contract, although the said Erb was not to receive compensation for his services, and said contract was not reduced to writing, and no note or memorandum thereof was made in writing, but that the plaintiff’ is not entitled to any relief in this cause for the reason that the plaintiff did not tender to said Erb adequate indemnity against his liability upon said promissory notes and mortgage, and because the renunciation by said Erb of said contract of agency and of all rights of the plaintiff’ under the same, and of any interest or right in him to said land, did not dispense with the necessity of an actual tender by the plaintiff of said indemnity; to which conclusion of the court, that the plaintiff is not entitled to any relief in this cause the plaintiff excepts. It is therefore ordered and adjudged that the injunction hereinbefore granted be, and the same is, hereby dissolved, and that the plaintiff’s petition stand dismissed with costs, and that in default of the payment of the costs of this suit within sixty days, an execution issue for the same. To which order and judgment the plaintiff excepts.
    "W e approve the foregoing entry.
    James Maokemzie, \ r , „ E. M. Phelps, }Ju^es’
    The petition charges that, in making this purchase, the. defendant verbally undertook to, and did in fact, act as the agent of the plaintiff, and that the title which he received he holds in trust for the plaintiff.
    These allegations are denied by the answer.
    
      Harrison, Olds Marsh, and M. C. Lawrence, for plaintiff in error:
    1. The defendant did not plead the statute of frauds, and hence waived the bar of the statute. Minns v. Morse, 15 Ohio, 568; Browne on Frauds, § 508; Vose v. Woodford, 29 Ohio St. 245; Swan’s Pl. under the Code, 254, note A.
    
      2. Trusts of real estate are not embraced in the statute of frauds of Ohio, and may be proved, as at common law, by parol.
    The seventh section of the statute of frauds of 29 Charles II, which required the declaration of an express trust to be in writing, has never been adopted in Ohio. Fleming v. Donahoe, 5 Ohio, 256; Miller v. Stokeley, 5 Ohio St. 194; Stall v. Cincinnati, 16 Ohio St. 139; Hubbell v. Hubbell, 22 Ohio St. 208; Mathews v. Seaman, 24 Ohio St. 615 ; 22 Ohio St. 62 ; 24 Ohio St. 28. So also, in Virginia, 7 Leigh, 566; 2 Patton & Heath, 547.
    In Pennsylvania, under the first act enacted in that state, in 1799, it was held that trusts in real estate might be created by parol. Wallaces. Duffield, 2 Ser. & R. 521; German v. Gabbald, 3 Binney, 302; Blyholder v. Gilson, 18 Penn. St. 134; Money v. Herrick, Ib. 128; Tritt v. Cootzer, 13 Ib. 452; Wetherel v. Hamilton, Ib. 191; Slaymaker v. St. Johns, 5 Watts, 27; Murphy v. Hubert, 7 Barr, 420.
    In 1851 the original act was amended.
    So held, also, in Tennessee. Thompson v. Thompson, 1 Yerger, 100; Wilburn v. Spofford, 4 Sneed; McLanahan v. McLanahan, 6 Humphrey, 99; Haywood v. Ensley, 8 Humphrey, 460.
    Also in North Carolina. Shelton v. Shelton, 5 Jones (Eq.), 292; Fay v. Fay, 2 Haywood, 131.
    Also in Texas. James v. Fulcrod, 5 Texas, 512; Mead v. Randolph, 8 Ib.; Hale v. Layton, 16 lb. 262; Miller v. Thatcher, 9 Ib. 484 ; Osterman v. Baldwin, 6 Wallace (U. S.), 116.
    And see 21 Mich. 374 ; Fry on S. P. § 354; 4 Mylne & C. 139.
    A tender of indemnity was not necessary. Brock v. Hily, 13 Ohio St. 306.
    No principles of law are better settled than these :
    A distinct and unconditional refusal to perform a conditional covenant and promise will be a waiver of performance of the condition; for the law will not compel the performance of a nugatory act. Jones v. Barkley, Douglass, 684.
    
      So will a notice from the covanantee or promisee, given before performance is due, that he will not perform, if persisted in, i. e., if not retracted. Withers v. Reynolds, 2 Barnewell & Adolphus, 882; Ripley v. McGlare, 4 Exchequer, 345; Cort v. The Ambergate Railway Co., 17 Queen’s Bench, 127.
    And after receiving such a notice, the covenantee or promisee is not bound to provide the means to perform the condition. Cort v. The Ambergate Railway Co., 17 Queen’s Bench, 127.
    
      West, Walker § West, for defendant in error:
    This was a parol agreement to grant or convey an interest or estate in lands, and is therefore clearly within the statute of frauds. Burden v. Sheridan, 36 Iowa, 125; 2 Story Eq. Jur. § 1201.
    The defendant, by his answer, denies all agency and trust, as alleged in the petition. This, according to Judge Story, and also 'according to Hooker v. Gentry (3 Metcalfe; 463), makes the statute of frauds available in defense, although not specially pleaded.
    The following authorities are cited by Justice Miller in support of the doctrine laid down in Burden v. Sheridan, supra: Perry on Trusts, §§ 133-135; Willard v. .Willard, 56 Penn. St. 119; Pollard v. Kinner, 6 Ohio St. 528 ; Bartlet v. Pickersgill, 1 Eden, 515, and 4 East, 577 note; Botsford v. Burr, 2 Johns. Ch. 405; Steere v. Steere, et al., 5 Johns. Ch. 1; Pinnock v. Clough, 16 Vern. 500; Perry v. McHenry, 13 Ill. 227 ; Walker v. Klock, 55 Ill. 362 ; 2 Sugden on Vendors (9th ed.), 163.
    Did the transaction raise a trust in the defendant ? The “ doctrine of resulting trusts ” is strictly limited to cases where the purchase has been made in the name of one pier-son, and the purchase-money has been paid by another. 2 Story’s Eq. Jur. § 1201a; 36 Iowa, 125.
   Johnson, Chief Judge.

From the finding of facts it appears :

1. That the agreement upon which this action is founded rested in parol — that by the terms of that agreement the purchase was to be made by defendant, and in his own name, and not in that of plaintiff, and the reason for this was, that owing to difficulty with Jones, the owner, he would not deal with plaintiff.

This undertaking was founded on no consideration, but was purely voluntary, though plaintiff was willing, and offered, to pay a reasonable compensation, which defendant refused, alleging as a reason, prior favors received.

2. The plaintiff was to save defendant harmless from all loss and trouble in making the purchase.

3. On the 16th of December, 1872, defendant reported to plaintiff, as the result of his negotiations for a purchase, that Jones and wife had offered to sell to him the land for $6,000 — $2,000 cash January 15, 1872; $2,000 March 1, 1873 ; and $2,000 March 1, 1874, with interest on deferred payments from March 1,1872.

Plaintiff authorized him to accept, and on the same day Jones and wife and the defendant entered into the written contract of sale and purchase set out in the statement of facts, by which a deed was to be made in fee to defendant, March next, he to execute notes, and mortgage back for the ■ deferred payments.

Before the time arrived for consummating the contract, plaintiff arranged to borrow the money to meet the cash payment, and also verbally agreed with one Phillis, by which he, on receiving a deed for the land, as security, was to advance the amount to pay the deferred payments as they matured.

4. On the 8th day of January, 1872, seven days before the cash payment was to be made, plaintiff undertook to inform defendant that he had arranged for the cash payment, but was prevented by the harshness of defendant, and by his refusal to hear him. At that time the defendant declared that plaintiff should not have the land; that he would purchase, pay, and keep it himself; and then, and ever after, refused to recognize plaintiff’s rights.

5. A tender of the $2,000 was duly made, but refused, but at no time did the plaintiff' ever offer indemnity to defendant for his liability to pay the deferred payments.

6. In accordance with the terms of the verbal agreement between the parties, and in performance of his written contract of purchase, the defendant took the title in fee in his own name, and executed to Jones, notes and amortgage for the deferred payments.

The district court, upon this state of fact, was of opinion that this verbal agreement was valid and binding, but re fused the relief sought on the ground that no indemnify was tendered to the defendant against the obligations he had incurred for the payment of the purchase money.

Two questions arise:

1. Was this verbal agreement valid and binding, and does it and the facts and circumstances shown create a trust of the legal title in favor of the plaintiffs, such as equity will enforce as against the defendant ?

2. Assuming that it does, has the plaintiff performed all the conditions to entitle him to have the trust enforced; or does his failure to tender indemnity to defendant against his liability on the notes and mortgage, defeat his right to such enforcement ?

1. As to the first question :

A careful analysis of this verbal contract shows that it is not the case of the employment of an agent to purchase property, and take the title in the name of his principal, and a breach of his undertaking, by taking the title in his own name. Nor is it the case of a purchase with the means of the principal.

The defendant was to, and did, purchase in his own name, according to the terms of his contract, and with his own means. The owner of the land would not deal with plaintiff, and he was not to be known in the purchase.

Defendant’s purchase in his own name was no breach of contract even, much less a breach of trust, properly speaking. He only broke his agreement to convey to the plaintiff the title so acquired. In fact, before he consummated the purchase, ho notified plaintiff that he would not purchase for him, but for himself — that he would not accept plaintiff’s money, but would use his own. He held no money or property of the plaintiff in trust to make the purchase, but bought with his own means, and gave his own obligations for the deferred payments. Neither did he, by deceit, prevent the plaintiff from becoming a purchaser. There was no mala fieles in taking the deed in defendant’s own name, as that was the agreement, nor in misappropriating plaintiff’s property or money for he had none, nor in deceiving and misleading the plaintiffj so as to prevent him from acting for himself, as he was not thereby prevented from competing in the purchase. Whatever bad faith existed, consisted in repudiating his agreement to convey the land so purchased.

This action is to specifically enforce that agreement. It is an action on the contract, to acquire lands. Our statute of frauds prohibits an actio if on such a verbal contract.

Equity only relieves when, by means of such contract, a fraud is perpetrated.

The equitable action is not on the verbal contract, but grows out of fraudulent acts committed under it. In such case, the parol agreement is admissible in connection with the fraudulent acts out of which the right to relief arises.

In Lloyd v. Spillet, 2 Atk. 148, Lord Hardwicke classified resulting trusts as follows:

First. Where an estate is purchased in the name of one person, but the consideration is given by another, and a trust in the estate results to him who gave the consideration.

Second. When a trust is declared as to part only of an estate, and nothing is said as to the rest. 'In such case, what remains results to the heir at law.

Third. Where the transactions have been carried on mala fide; where there has been a fraud in gaining the conveyance from another, that may be a reason for making the grantee in that conveyance to be considered merely as a trustee.

In this ease, the plaintiff did not furnish-the purchase money, and, hence, it does not come within the first class named by Lord Hardwieke.

If there is a resulting trust at all it belongs to the third class, where there has been a fraud in gaining a conveyance in his name from another, whereby he becomes a trustee, and holds the property for another, to whom, in equity and good conscience, it belongs.

In such cases, parol evidence is always admissible to show the real consideration of a conveyance, and by whom it was actually paid, for the purpose of raising a trust where the deed is absolute on its face. The trust reverts to the source and origiu of the consideration, whatever may be its character or nature.

Equity will relieve against a fraudulent purchaser, by converting him into a trustee for the person injured, and parol evidence of the facts is admissible to show that he is such fraudulent purchaser. This doctrine rests upon the ground, that where a party has parted with his money or property, and an attempt is made to rob him of the fruits of it, equity will decree a trust in such fruits. If, however, he has made no payment, he can not, as a general rule, be permitted to show by parol, that the purchase was made for his benefit; nor would a subsequent advance of the money to the purchaser, after the title is vested, alter the ease. Botsford v. Burr, 2 Johns. Ch. 405; Hollida v. Shoup, 4 Md. 465. The trust must attach, if at all, at the time of the conveyance, for it is the money which has gone to the vendor, as the inducement of the title with which he parts, that creates the equity in favor of him who advances it. White v. Carpenter, 2 Paige, 238; Botsford v. Burr, 2 Johns. Ch. 405; Walter v Klock, 55 Ill. 362.

In resulting trusts of this class, the real foundation is, that the ownership of the consideration money determines the equitable ownership of the estate.

Thus, if the actual purchaser agreed to buy and hold for the real purchaser, with money loaned by him to the latter for that purpose, he is a trustee of the title for the borrower. McDonough v. O’Neil, 113 Mass. 92; Kendall v. Mann, 11 Allen, 15; Blodget v. Hildrieth, 103 Mass. 484; Jackson v. Stephen, 108 Mass. 94.

Upon the same principle, a deed absolute on its face, may be converted into a mortgage, by showing that it was in consideration of a loan, and equity will treat the grantee as a trustee of the title, and compel a reconveyance on payment of the debt. This is so, whether there was a verbal defeasance, or not. But the mere breach of a parol agreement, is not such a fraud as takes the case out of the statute. Rodgers v. Simmons, 55 Ill. 76; Merrit v. Brown, 6 C. E. Green, 401.

If this were not so, the consequence would be, that the common law rule, that parol contemporaneous evidence can not be admitted to vary the terms of a written agreement, and also the provisions of the statute of frauds, would be abrogated.

Evidence of fraud opens the terms of a written agreement to proof of a parol contemporaneous agreement which has been broken by the opposite party; or in other words parol evidence is only admissible upon proof of fraud.

It must appear that the promise was used as a means of imposition and deceit. If the case taken as a whole is one of fraud, the verbal promise may be received in evidence as one of the steps by which the fraud was accomplished. To deduce the fraud from the contract and then give effect to the contract on the score of fraud, is reasoning in'a circle. The fraud which will give jurisdiction to compel a performance of the parol trust, must consist in something more than a mere breach of parol undertaking. Bigelow on Frauds, 118, 119, and cases; 2 Leading Oases in Equity, 1015.

A parol agreement that another shall be interested in the purchase of lands, or the declaration that he buys for another, where no money is advanced, comes directly under the statute of fraud. Irvin v. Ivers, 7 Ind. 308. So-when it is orally agreed by a purchase!’, at sheriff’s-sale, to hold the land for defendant in execution, in the ab-sense of proof showingthatthedefendantwaspreventedfrom keeping his land from sale, will not render the purchaser a trustee. Mincott v. Mitchell, 30 Ind. 228; Kisler v. Kisler, 2 Watts. 323. And if one takes a conveyance of land in his own name and pays for it with his own money, parol evidence is not admissible to show that he was employed as agent for another. Barnett v. Dougherty, 8 Carey, 272.

In Burden v. Sheridan, 36 Iowa, 125, the cases are ably reviewed, and it was held, that where A. hires B., by parol, as agent to buy au estate for him, and B. makes the purchase in his own name, and gives his own notes for the purchase money, and denies the trust; A. can not compel a conveyance of the estate to him — that the fraud against which a court of equity gives relief, consists in the repudiation of a contract, upon the faith of which an innocent party has been misled to his injury, and not in the mere-moral wrong involved in the repudiation of a contract which, by reason of the statute of frauds, can not be enforced. 2 Story Eq. § 1201a; 2 Sugden on Vendors, 163;. Bartlet v. Pickersgill, 1 Eden, 515 ; Botsford v. Burr, 2 Johns. Ch. 405 ; Steere v. Steere, 5 Johns. Ch. 1; Pinnock v. Clough,. 16 Vern. 500.

In Perry v. McHenry, 13 Ill. 227, it was held that noparo] agreement, made at the time or prior, that the purchase is to be made for the benefit of some other person,, will raise a trust in such person’s favor, in the absence of any other than that which arises from a violation of the purchaser’s parol agreement, when he takes the title in his-own name, and pays the consideration out of his own. funds. Brown on Frauds, § 441, and notes. But where-the fraud consists, not merely in refusing to do what he-agreed to do, but in deceiving the plaintiff out of his property, equity will grant the relief. When the parol agreement is the instrument or means by which one deceives and defrauds another, to his injury, it is unconscionable that he should retain the fruits of his acts, which in equity belong to another.

The claim here is, that an express trust arose out of the verbal agreement, which may be proved and enforced in Ohio, as this state has never adopted the provisions of the statute of frauds of 29 Car. 11, chap. 3, relating to declarations of trusts.

Without undertaking to define and limit the power of courts of equity to grant relief when fraud is alleged, or the extent to which a court will allow a parol contract to establish a trust in a deed absolute, we think it safe to say that, in all such cases, something more must appear than the mere breach of such parol agreement and the damages consequent on such breach. The facts disclosed should make it clear and convincing, that by the breach of such contract the party has acquired an unconscionable advantage, or that the parol agreement has been employed to deprive the other party of his property.

By our statute of frauds no action shall be brought to charge the defendant upon any contract concerning lands, unless the agreement upon which such action is brought, or some note or memorandum thereof, shall be in writing. This statute operates in equity as well as at law. But as this is a statute to prevent frauds, equity will grant relief — not allow it to be used as an instrument to promote fraud.

Fraud is so multifarious in its forms that it would be dangerous to attempt a definition of the powers of a court of equity in such eases. Each case depends upon its own facts and circumstances. It may be said, however, that in all such actions, the action is brought, not on the verbal agreement, but because of the bad faith, fraud, and injury in refusing to perform it. As in the case of a verbal -contract to sell land, equity only intervenes when it would be a fraud and injury not to enforce it. In such ease the chancellor will not permit a party to shield himself behind the statute.

Matthews v. Learner, 24 Ohio St. 615, is strongly relied on by plaintiffs in support of the claim that the parol agreement can be engrafted on the absolute deed, in this case.'

It was there held, that it was competent to establish by parol evidence, that an absolute deed was executed on the ■consideration, that the property conveyed was to be held in trust for the grantor and reconveyed on demand.

That was the case of a resulting trust coming within Lord Hardwicke’s third class, and the opinion so treats it.

The case was not placed on the mere ground of a breaeh •of an agreement to convey land, but on the fact that plaintiff had conveyed his property, and the trust assumed to hold and reconvey was the sole consideration.

It is said: x The trust does not arise on the mere agreement, but on the conveyance of the property for which the trust assumed was the sole consideration. The trust is not raised so much because of the fraud in the original acquisition of the property as in the subsequent refusal to execute the trust.”

In that ease the land belonged to the -plaintiff. He placed the legal title in defendant, and by verbal contract she was to recouvey on demand. She assumed the trust, .and it would have been unconscionable to allow her to retain the title thus acquired. Eor a breach of trust resulting in such injury to the plaintiff, when the defendant paid no consideration, the right to invoke equitable relief was ■clear. In that case the same equity arose as if the plaintiff had furnished the money to buy the land instead of furnishing the land itself.

In the case before us, as has been said, the only breach of the verbal contract consists in refusing to convey land bought with his own money. In such case, no resulting or ■constructive trust arises by operation of law, and there are no such acts of fraud as takes the case out of the 5th section of the statute of frauds. The agreement was to buy land in his own name, and convey it to plaintiff. Before consummating the purchase, he repudiated his agency, and. refused to act as a trustee for plaintiff^ by refusing to receive his money or to act for him. Wherein does this differ from a verbal agreement to convey land already purchased ?

In coming to this conclusion, w-e assume that parol evidence is admissible to establish an express trust in case,of a deed absolute, wherever to refuse it would operate to-deprive the party of his property in the land, to which by law or equity, he is justly entitled.

In the present case, while the defendant has been guilty of a moral wrong, a breach of faith' in not conveying the land, yet it is but the repudiation of a parol contract, which has misled no one to his injury, nor defrauded any one out. of his money or property. Eor this reason the judgment should be affirmed.

II. Assuming that we are in error in this, still the judgment must be affirmed for the reason that no adequate indemnity was offered the defendant against his notes and. mortgage. By the terms of the agreement he was not entitled to a conveyance until this was done.

Judgment affirmed.