Case ID: ny-super-ct_47/html/0193-01.html
Source: Caselaw Access Project
Author: {"author": "By the Court.—Freedman, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

MARSHALL ROBBINS, Respondent, v. LOUIS S. ROBBINS, Appellant.
    
      Statute of uses and trust.—Statute of frauds.—Equitable assignment of, or trust in bond and mortgage—when established by acts and unwritten declarations of obligee.
    
    Where the deed of certain premises is, at the request of A., who pays the consideration therefor, delivered to B. as the grantee therein named, and B., in pursuance of a previous understanding with A., and at his request, and without consideration, conveys such' premises to C. (the son of A.), who pays no consideration therefor, and who at the time agrees verbally to hold the title to the said premises for the use, benefit and convenience, and subject to the order of A.,— under the statute relating to uses and trusts, no trust results to A.; and mere acts and oral declarations of C. áre insufficient to establish the existence of such a trust. If 0. thereafter, and upon the request and direction of A., conveys the premises, and takes as part consideration therefor, the grantee’s bond running to himself (C.), secured by mortgage upon the premises, such bond and mortgage are the property of 0.
    What acts and declarations of 0. in such case, in regard to the real estate and the bond and mortgage, will establish a trust in said bond and mortgage, in favor of A., or an equitable assignment thereof to A., considered by the court.
    The act in relation to uses and trusts, and its nature and purpose, considered by the court.
    Before Speib and Fbeedman, JJ.
    
      Decided February 1, 1881.
    
      Appeal from judgment, for plaintiff, entered npon decision at special term.
    The action was to obtain possession of a bond and mortgage, drawn payable to plaintiff, and to restrain defendant from parting therewith, &c. Title thereto was claimed by both plaintiff and defendant.
    The facts in the case, as found by the court below, on defendant’s requests, are substantially as follows:
    In September, 1869, Benjamin Loder sold certain lands and premises, situated at Bye, Westchester county. Defendant paid the consideration therefor, and the deed thereof was executed and delivered to A. Goodrich Fay, a counselor at law employed by the defendant in and about the purchase of said property.
    Said Fay accepted the conveyance of said property at the request and for the convenience of the defendant, and upon an oral understanding that he (said Fay) would hold the premises subject to the order and convenience of the defendant.
    In December, 1871, said Fay conveyed said premises to the plaintiff. There was no pecuniary or valuable consideration for such last-mentioned conveyance, but it was made only in consideration of the request of the defendant, and in execution of the trust and confidence (not expressed in any writing) reposed in said Fay and the plaintiff by the defendant.
    At the time of said conveyance by Fay to the plaintiff, plaintiff expressly agreed, verbally, to hold the title to the said lands for the use, benefit and convenience, and subject to the order of the defendant. Plaintiff was a son of the defendant, who then had, and now has, two other sons, and a wife.
    In October, 1872, plaintiff executed and delivered to one Ferris and one Shillito a conveyance of the said premises ; the consideration expressed in the deed was $100,000; and such conveyance was made by plaintiff at the request of the defendant, and for his benefit and convenience.
    A part of the consideration expressed in such last-mentioned deed was furnished by said Ferris and Shillito, by giving their two certain bonds, one for $15,000 and one for $45,000, each secured by a mortgage upon the said premises.
    The custody of said bond and mortgage for $45,000 (for the recovery of which this action was brought), was, a few days after execution and delivery to plaintiff, with the knowledge and consent of the plaintiff, given to the defendant, and they have ever since ermained in his custody.
    Thereafter defendant acted in procuring a sale of the $15,000 bond and mortgage, and plaintiff executed an assignment thereof, to enable defendant to raise money thereon, defendant at the time of the-transaction stating, in plaintiff’s presence, that he (defendant) had bought the property, and stating the reason why he had it in plaintiff’s name.
    Defendant was in actual possession of said premises, except when tenants were in actual possession, and defendant at all times received the proceeds and rent of the land, and always solely, and without direction from plaintiff, managed the property.
    On or about the year 1875 or 1876, and before the-commencement of this action, the plaintiff stated to-one Pultz that the said Shillito was indebted largely to-his father, the defendant; and said Pultz inquired in what way and how the indebtedness arose, and the plaintiff said that it was on a bond of said Shillito and Mr. Ferris. And on that occasion the plaintiff spoke to said Pnltz cf the property in Westchester, covered by said mortgage of said Shillito and Ferris, as belonging to the defendant, and that the title thereto was in the plaintiff’s name, and had been in his name, and. that the said property had been sold; and that Mr. Shillito had bought it from the defendant subject to quite a large amount of indebtedness secured by a mortgage upon the property, and had given back their bond for the balance of the consideration.
    The court, at plaintiff’s request, among other things, found: ' “That the plaintiff has never voluntarily parted with the possession of the said bond and mortgage, or his interest therein, nor any part thereof.”
    And as conclusions of law: “That the plaintiff is, and always has been, the sole owner of the said bond and mortgage, and that he is entitled to the immediate possession thereof from the defendant, and that plaintiff is entitled to judgment that the defendant deliver the said bond and mortgage to the plaintiff, or his attorneys herein.”
    “That the defendant, his agents and attorneys, be enjoined from parting with said bond and mortgage, or either of them, except as aforesaid, or from settling with said Frederick J. Ferris and John Shillito, Jr., or either of them thereon; or from commencing any action or proceedings thereupon ; or selling, pledging, or otherwise using or disposing of the said bond and mortgage, or either of them, against the rights of the plaintiff.”
    The following opinion was delivered at special term:
    “ Sedgwick, Ch. J.—On the facts testified to by the defendant, the plaintiff was the absolute owner in fee of the land at Rye, and the defendant had no beneficial interest in it. Whatever the obligations between the defendant and Fay were before the conveyance to the plaintiff, the conveyance by Fay to plaintiff was made by defendant’s direction, and according to his intention. If defendant paid no consideration for the deed by Fay, no trust or use resulted in favor of Fay or defendant. • Ordinary deeds in modern use, like the one in question, avoid the effect of raising a resulting use in favor of the grantor, first by inserting therein an acknowledgment of a consideration received by the grantor, and secondly, by declaring thereby the uses of the estate granted in favor of the grantee (2 WasTib. It. P. 104; Rathbun v. Rathbun, 6 Barb. 107; Van der Yolgen v. Yates, 9 JV. 7. 219).
    “Or if it be supposed that the defendant has the position of one paying a consideration, the statute is. conclusive that no trust or use results therefrom. The verbal statements by plaintiff as to defendant’s interest in the land, of course did not create or prove the existence of a trust, or lessen plaintiff’s rights as owner in fee. I do not understand that counsel for defendant disputes these propositions in their application to the real estate ; I understand his claim to be that the evidence as to the actual relation of defendant to the real estate, and the actual intention of defendant in placing the title in Fay, and then in the plaintiff, and plaintiff’s acquiescence in that relation, and his verbal promise to observe that intention, the plaintiff’s declarations as to defendant’s interest in the land, and his-other acts, are competent for the purpose of determining whether or not the delivery of the bond in question to the defendant was a delivery by or on behalf of the plaintiff with an intention on his part of transferring his property in it to the defendant.
    “ Assuming the validity of this claim, the evidence referred to must be considered with the other facts of the case, and from them all it must result that there was in fact a delivery by the plaintiff, with intent to transfer the title to the bond. The position necessarily assumes that before the assignment to the defendant, the plaintiff was owner of the bond. The circumstances antecedent to the execution of the bond disclose no obligation on the part of the plaintiff to assign the bond, and there could be no trust that affected the title. The defendant’s testimony should be credited that when he informed the plaintiff that he would put the title in the plaintiff’s name, for his convenience, the plaintiff assented, virtually promising to hold it for the defendant’s convenience. But if this is supposed to be a promise that plaintiff would assign the proceeds of the sale of the land, it would be void by the Statute of Frauds. No doubt there was strong circumstantial and direct evidence that the plaintiff intended to give to his father the entire management and benefit of the land, and of its proceeds, and I think there can be little doubt that he remained of that mind long after the bond had been executed and placed in defendant’s possession. In such a case very slight evidence would be enough to prove a kind of delivery that must be made to transfer the title or property. .
    “But the testimony strongly repels the notion of such a delivery. It shows that the intention of both parties was that the title and the rights of the plaintiff to the bond should remain perfect, and the defendant should have no title to or right in the bond until some time in the future, and it was expected and intended that in that future time a competent transfer of the bond should be made either to the defendant or for his benefit. When the custody of the bond was transferred from Mr. Cushing to Mr. Shillito, and then to the defendant, with the knowledge of the plaintiff, the property was not and was not intended to be changed. The general reason that it was not, is that there is no fact in the case that gave rise to the adoption of an unusual and, in a sense, a doubtful mode of transferring property, at the time when there was no reason, if it was meant to transfer the property, that it should not have been done by the usual and explicit method •of written assignment, and, indeed, when there was no other reason for not making the bond payable to the defendant in the first place, than that it was the intention of the parties that the property in the bond should remain in the plaintiff for an indefinite period.
    
      “The postscript of plaintiff’s letter, in which he writes of defendant getting money on the bond, is consistent with the title in the bond being in either the plaintiff or defendant.
    “I am of opinion, therefore, that title to the bond having been in the first place in the plaintiff, the evidence does not show that he has parted with the title.”
    
      Walter Edwards, Jr., for appellant, urged:
    I. The conveyance by Fay to Marshall Robbins was not within the provisions of the statute. The statute reads : “ Where a grant for a valuable consideration shall be made to one person and the consideration therefor shall be paid by another, no use or trust shall result in favor of the person by whom such payment shall be made, &c., &c.” (1 Edm. Stat. 677, § 51). The conveyance to Marshall Robbins was not for a valuable consideration. The consideration was “ the request of Louis S. Robbins, and in execution of the. trust and confidence reposed in said Fay and Marshall Robbins.” All the conditions expressed in tile statute must concur in order to prevent a resulting trust. This grant not being “for a valuable consideration,” it fails to fall within the direct verbal provisions of the statute.
    II. This case would be excluded from the operation of the statute by the established rules of construction. (a) The statute prohibiting a trust which would other- • wise result or be implied, is in derogation of the common law and must be construed strictly. “If their terms” (the terms of such statutes) “admit of two interpretations, that which will most nearly conform to rules of the common law is in all cases to be adopted” (22 Wend. 395, and cases cited; 5 Add. Dig. [new ed.] 601, &c. ; Rathburn v. Acker, 18 Bard. 393). (5) This statute imposes substantially a penalty upon the person paying the consideration, by depriving him of the trust which resulted at common law (29 N. Y. 611). “In statutes giving a penalty, if there be reasonable doubt of the case, made upon the trial or in the pleadings, coming within the statute, the party of whom the penalty is claimed i's to have the benefit of such doubt ” (Chase v. N. Y. Central R. R. Co., 26 N. Y. 523, 525). (c) To apply the statute in the present case would enable the plaintiff to appropriate to his own use and benefit the property which he procured to be conveyed to him by an express verbal agreement to hold the same ‘ ‘ for the use, benefit, and convenience, and subject to the order, of the defendant.” This would be manifestly unjust. A construction contrary to natural justice and equity . . . is to be rejected unless the language of the lawgiver is so plain as not to admit of a different construction (Donaldson v. Wood, 22 Wend. 395, 397). A fraudulent use of a statute for the prevention of frauds will not be permitted, and a court of equity will interfere against a party intending to make such a statute an instrument of fraud (Ryan v. Dox, 34 N. Y. 307, cited with approval, 45 N. Y. 596; also-see Carr v. Carr, 52 N. Y. 251, 260). Our courts have construed this very statute more than once with a special view to prevent the perpetration of a fraud and to promote justice and fair dealing (Siemon v. Schurck, 29 N. Y. 598). In which case it was held “ that the statute is not necessarily prohibitory of a resulting trust for the benefit of a third person” (Id. 611; see also Foote v. Bryant, 47 N. Y. 544). A statute similar in all respects to the one under consideration, except that the word ‘! valuable” is omitted, exists in Kentucky, and has been construed by the court of appeals of that State in Martin v. Martin, (5 W. P. D. Bush, 47); in which case the court says: “In case one party shall receive a deed at the instance, of another who has paid the consideration, although the policy of the statute forbids a resulting trust- in the land, its object was not to enable one party to rob another of his substance by undertaking a trust that the law would not enforce, and at the same time refuse both to execute the trust or return the money. It neither conflicts with the policy of the statute nor its integrity of purpose, to require a party thus receiving a title to" refund to the party paying for the land, the money thus laid ont and expended by his consent.” (d) In this case a trust is implied or results from the conveyance to plaintiff upon the trust and confidence reposed in him by defendant, which plaintiff accepted by his verbal promise (Willard,’s Eq. [Potter’s ed.] 599; Hill on Trustees, 144; Ryan v. Dox, 34 N. Y. 307 ; Foote v. Foote, 58 Barb. 258; Foote v. Bryant, 47 Id. 544; Carr v. Carr, 52 Id. 251-260). In such a case equity makes the one accepting the confidence a trustee. The statute of fraud, has no relevancy to the case (Section 50 ; Foot v. Foote, 58 Barb. 258, 262 ; Willard’s Eq,. 599 ; Hill on Trustees, 144 ; Foote v. Bryant, supra). All the preceding points apply only to the real estate while it remained in the name of the plaintiff ; if any of them are well founded it clearly follows that while-the title to the land remained in Marshall Robbins, he held it as trustee for his father, the defendant.
    III. But, whatever view the court may take as to the application of the statute to the real estate in the hands of the plaintiff, still the two facts remain that the plaintiff accepted the title to said land upon an express verbal agreement to hold the same for the use, benefit and convenience, and subject to the order of the defendant; and also that he has always recognized the obligation imposed by said promise and has completely performed the same by his conveyance to Ferris and Shillito.. The court below has found that-such conveyance was “at the request and for the benefit and convenience of the said Louis S. Robbins.” If, therefore, we assume for the moment that there was no trust in the lands, and that plaintiff’s verbal promise was void by the Statute of Frauds, still that promise imposed a moral obligation of a high character, the recognition of which has been repeatedly commended by the courts of the State, and conveyances pursuant to which have been sustained even as against the creditors of the person in whom the title to the land was (Ocean Natl. Bank v. Hodges, 9 Hun, 161, 165 ; Davis v. Graves, 29 Barb. 480, 485. See also the language used by court of appeals in 29 N. Y. 612, 613; and 47 Id. 549). The real estate having been held and conveyed by the plaintiff in recognition and performance of the trust and confidence reposed in him ; and the subject of controversy in this action being a bond and mortgage, personal property, part of the proceeds of such conveyance, it is not easy to see how the statute, so often quoted, has now any relevancy to the question before the court. The statute of uses and trusts has to do only with real estate, and is not applicable to personal property (Kane v. Gott, 24 Wend. 641 ; Savage v. Burnham, 17 N. Y. 561 ; Brown v. Harris, 25 Barb. 134 ; Tracy v. Tracy, 3 Brad. 57).
    IV. The bond and mortgage in controversy being personal property, and so unaffected by the statute of uses and trusts, a trust in them may be established by parol (Day v. Roth, 18 N. Y. 448, 453, and cases there cited; Tracy v. Tracy, 3 Brad. 57). The circumstances under which plaintiff took- the real estate ; his verbal promise made at the time, and the high moral obligation imposed thereby, clearly furnish a meritorious consideration (Ocean Bank v. Hodges, 9 Hun, 161-165 ; Davis v. Graves, 29 Barb. 480-485 ; 29 N. Y. 612, 13 ; 47 Id. 549 ; Tracy v. Tracy, 3 Brad. 57). The facts in Tracy v. Tracy are almost identical with the one at bar, except that in the present case the proceeds of the sale, standing in the name of the plaintiff, have, with the plaintiff’s consent, been delivered to, and constantly remained in, the custody of the defendant. The fact is one of those upon which is founded the claim made and position taken in the next point.
    V. But it is insisted that all the facts and circumstances of this case, the conduct and declarations of the plaintiff, the constant possession of the bond and mortgage by defendant, with plaintiff’s consent; the use by defendant of such portion of the proceeds of the sale of the land as were realized ; his constant use, enjoyment and occupation of the land before it was sold ; his payment of all charges and expenses thereon, and receipt of all income or profit therefrom, are all only consistent with, and go to prove, an absolute, equitable and beneficial ownership of the bond and mortgage in question by the defendant. It is submitted that all the facts and all the testimony point to the conclusion that the delivery of the bond and mortgage to the defendant was with the intention of thereby acknowledging defendant’s ownership ; that against all these the only reason suggested in the opinion is, “ that there is no fact in the case which gave rise to the adoption of an unusual and, in a sense, doubtful mode of transferring property.” It has been repeatedly held that a bond "and mortgage will pass by delivery without any written assignment (Wilson v. Troup, 2 Cow. 195-231; Penfield v. Thayer, 2 E. D. Smith, 305-309 ; Allerton v. Lang, 10 Bosw. 362 ; Malins v. Brown, 4 N. Y. 403-409; Power v. Lester, 23 Id. 527-531).
    
      Royal S. Crane, for respondent.
   By the Court.—Freedman, J.

The case presents no conflict as to the material facts, and the findings originally made, together with the findings made at the request of the defendant,, correctly set forth all the facts that could properly be found. The conclusions of law based upon these facts follow as a necessary consequence, under the application of the statute relating to uses and trusts, which was designed to render a verbal trust in such a case impossible. The object of the statute was to put an end' to the practice of abuses, the defrauding of creditors and purchasers, the defeating of dower and curtesy, and the great confusion and obscurity of title, which before its enactment were so prevalent;. and though in individual cases, and perhaps in the present case, a strict enforcement may involve great hardship, the courts must enforce it in a case which clearly falls within its provisions. Whatever, therefore, our opinion may be of the conduct of a son who violates the confidence reposed in him by his father, by invoking the statute, it can have no weight with us in opposition to the plain mandate of the law. The statute abolished all uses and trusts ■ except as authorized and modified by it, and the one relied upon by the appellant belongs to the prohibited class. The case of Tracy v. Tracy (3 Bradf. 57), is clearly distinguishable. In that case' there was a declaration of trust after the real had been converted into personal property, and it was upon this ground that the trust was sustained as to the proceeds. In the case at bar there is no such declaration as to the proceeds, and the trust as to the real property being void, the proceeds follow the legal title.

The judgment'appealed from should be affirmed, with costs, upon the opinion delivered by the learned chief justice below.

Sreir, J., concurred.