Case Name: Matthew McGovern and Wife v. Frances Knox
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1871-12
Citations: 21 Ohio St. 547
Docket Number: 
Parties: Matthew McGovern and Wife v. Frances Knox.
Judges: Welch, O. J., and White, Day and McIlvaine, JJ., concurred.
Reporter: Ohio State Reports, New Service
Volume: 21
Pages: 547–554

Head Matter:
Matthew McGovern and Wife v. Frances Knox.
1. A conveyance of land to another than him by whom the consideration or some part thereof, is at the time paid or secured, vests in the latter an equitable estate pro tanto, by resulting trust, unless otherwise intended.
2. Where a loan of money to a trustee holding the legal title, on his personal account, is in no manner induced or influenced by the conduct of the cestui que trust, the latter will not he estopped to assert his equitable estate against the creditor seeking to subject it.
Error to the superior court of Cincinnati.
The original action was brought in the superior court of Cincinnati by Frances Knox against Matthew McGovern and wife, and several lien holders, to subject certain real estate on Laurel street, in Cincinnati, to the payment of a judgment against Matthew McGovern, held by Frances Knox as assignee. The petition averred that the real estate in question belonged to Matthew McGovern, that execution, issued on the judgment, had been levied on the property ; that there were incumbrances upon it, etc. A dercee was asked to determine the rights of the parties, and for the sale of the real estate, and that the proceeds, after prior liens were satisfied, might be applied to the payment of the plaintiffs judgment.
The record shows the facts to be in substance, as follows : Shortly previous to the 24th of May, 1866, Mrs. McGovern visited the property in controversy, situated on Laurel street, with a view to its purchase from John C. Parker, as a residence for herself. Finding the property suitable, a purchase was resolved on. It seems to have been the understanding that payment therefor should be made from the proceeds of her separate property, inherited by her, on Race street.
McGovern, the husband, negotiated the purchase of the Laurel street property, by written contract for $4,000, of which $2,000 were to be paid in hand, on the execution of the conveyance, and the residue in two annual installments. But the contract was made in his own name, the interest of Mrs McGovern not being disclosed to the vendor.
On the 24th of May a deed of the premises was drawn to Matthew McGovern, the husband, Mrs McGovern not being present nor having any knowledge thereof; but the same was not delivered until the following day. On the 25th of May,- 1866, the cash payment of $2,000 not being made, Matthew McGovern gave his note therefor, at one year, to secure which he and Mrs McGovern executed a mortgage charging her separate property on Race street. He, at the same time, gave his other two notes for the deferred installments, securing the same by mortgage, in which Mrs McGovern j oined, on the property purchased. These mortgages were given to John C. Parker, and in form are identical.' In the condition of each it is provided that “ if the Said Matthew McGovern and Laura Y. McGovern shall pay,” &c., and in each she specially “ releases her right and expectancy of dower,” &c.
Afterward, on the 7th of July, 1866, McGovern and wife executed a power of attorney to John Kebler in which it is recited that: “ Whereas Matthew McGovern has, on the 25th May, 1866, executed to the order of John C. Parker three several notes of that date, one for, $1,000 at one year, one for $1,000 at two years, and one for $2,000 at one year, with interest, each which notes were given in payment of a house conveyed by John C. Parker and wife to Matthew McGovern, the two notes for $,1000 each, being secured by mortgage on the house so sold by Parker and wife to McGovern as above ; and the $2,000 note secured by mortgage on property of Laura Y. McGovern, wife of said Matthew, who is one of the children of James R. Horrocks, deceased; and whereas there is now pending in the court of common pleas, a suit at the instance of said Matthew and Laura, for the partition of the real estate left by the said James R. Horrocks; and whereas, at the time of the conveyance of said house by Parker to McGovern, it was agreed by said Matthew and Laura Y. McGovern as part of the agreement of conveyance, that said $2,000, and afterwards said two $1,000 notes should be paid out of the first proceeds of the sale of said Iiorrocks property when sold on partition : now, therefore, “ in order to carry out the said agreement,” &c. The paper which is signed by McGovern and his wife then constitutes John Kebler agent, to lift the moneys and discharge said notes.
Subsequently, in August or September, 1866, William Knox became endorser for Matthew McGovern on a promissory note to P. C. Brown, for a personal loan of $500.
Afterwards on the 20th of December, 1866, Matthew McGovern executed to Dr. Ellis a mortgage for $500 on the Laurel street property, in which Mrs. McGovern joined, releasing “ her right and expectancy of dower.”
In March, 1867, Brown took judgment on his note against Matthew McGovern and William Knox for $503.50. This judgment was assigned to Frances Knox, sister of the said William, who caused the same to be levied on the said Laurel street property, and then brought this action to subject the same and marshal liens. McGovex-n and wife axxd the mortgagees were made parties.
Mrs. McGovern, by answer and cross-petition, denies that her husband has any interest in the property, but avex-s that it belongs to her, and prays that the levy may be set aside, and the plaintiff exxjoined from further proceeding against her separate estate.
Oix the trial the plaintiff having given in evidence the deed to Matthew McGovern, the record of the judgment, the assignment thereof, aud the levy, rested.
Mrs. McGovern then testified that the Laurel street property “ was bought for her, and so far as it had been paid for was paid for with her moxxey, and that her husband had no ixxterest in the same ; ” that the $2,000 secured by mortgage on the Eace street property had been paid, and further, “that she had xxever authorized her husband to represeixt that he was the owner of said property, and never knew that he had done so ; that she did not know that the deed was made to her husband at the time it was executed, and that she was not present at the time, and that she never authorized the deed to be made to him.”
Mrs. McGovern also produced John Kebler as a witness, who testified that all the money paid on the Laurel street property was paid out of the moneys of Mrs. McGovern.
Frances Knox, in rebuttal, offered William Knox, who testified that he was endorser on the note for $500 on which the judgment had been rendered in favor of P. C. Brown, and on which the execution was issued and levied, as stated in the petition ; that the defendant Matthew McGovern, at the time the note was executed, was in the employment of A. Strickland & Co., of which company witness was a partner ; that at the time he wanted to borrow this $500 he said that he was the owner of the premises levied on, and wished to obtain the witness’ endorsement on the note ; that thereupon, and before he endorsed the note, the witness went to his attorney, J. C. Healy, and had him examine the title to the premises, to ascertain if this fact was true ; that his attorney reported that Matthew M°Govern, as it appeared upon the records, was the owner of the premises, but that the same were encumbered by a mortgage to John C. Parker for $2,000, and that he endorsed the note on the faith of his being the owner of the property, and that he would not have endorsed it but for that.
Judgment was entered for Frances Knox at special term of the superior court, and affirmed, on error, at general term, charging the real estate in question with the payment of the plaintiff’s claim.
To reverse this judgment the present petition in error was filed.
Kebler & Whitman, for plaintiffs in error,
submitted the dissenting opinion of Judge Taft, in the court below, maintaining that the facts of the case do not estop Mrs. McGovern from setting up her ownership against the judgment creditors of her husband, and citing Robinson v. Bates, 3 Metc. 42 ; 2 Smith’s Lead. Cas. 755 ; Lowell v. Daniels, 2 Gray, 161 ; Pichard v. Lears, 6 Ad. & Ell. 475 ; Freeman v. Cook, 2 Exch. 654; McAfferty v. Conover’s Lessee, 7 Ohio St. 105 ; McShure v. Douthill, 6 Barr, 414 ; Palmer v. Crow, 1 S. & M. 48 ; Wilks v. Fitzpatrick, 1 Humph. 55 ; Drake v. Glover, 30 Ala. 382; Gatling v. Rodman 6 Ind. 292.
Yaple eg Healey, for defendant in error,
argued that Mrs. McGovern, as against William Knox, who dealt with her husband on the faith that he owned the land, had no title to or interest in it, and is estopped from setting up against Mrs. Knox that she had any interest whatever, and cited Creed v. Lancaster Bank, 1 Ohio St. 1; Hardy v. Van Harlingen, 7 Ohio St. 208; Bocook v. Pavey, 8 Ohio St. 270 ; and submitted, also, the majority opinion of the court below, delivered by Judge Storer, holding that the facts in the record would estop the husband, and that there could be no sufficient reason to make the wife an exception to the rule, and citing Smiley v. Wright, 2 Ohio, 506 ; Carter v. Longworth et al. 4 Ohio, 384; Riley v. Miami Exporting Co. 5 Ohio, 333 ; McFarland v. Febiger’s heirs, 7 Ohio (pt. 1), 7 ; Buckingham et al. v. Smith et al. 10 Ohio, 228, 298; Wendell v. Van Rensselaer, 1 Johns. Ch. 344, 357; Savage v. Foster, 9 Modern R. 35 ; 1 Fonblanque’e Eq. ch. 3, sec. 4; Evans v. Bushnell, 6 Ves. 180 ; Lord St. Leonard on Vendors (1st Am. ed.) 180; Vaughan v. Vaughan, Doeroy, 397 ; Jones v. Kearsily, 1 Drury & Warren, 167; Holidays. Peters, 28 Beavan, 360; 1 Story’s Eq. Jur. secs. 384, 389 ; Mount v. Martin, 20 Barb. 131; Roper on Husband and Wife, 220, 221; Bartlett v. Gillan, 3 Russ. 152 ; Jacques v. M. E. Ghurch, 14 Johns. 577 ; Hardy v. Van Harlingen, 7 Ohio St. 208; Glidden et al. v. Taylor et al. 16 Ohio, 517.

Opinion:
West, J.
Two questions are raised on this record :
1. Has Mrs. McGovern an equitable estate in the controverted premises ?
2 Is she estopped to assert it against the judgment set up by the defendant in error ?
The judgment of the superior court at special term was •affirmed at general term by a divided bench. The elaborate opinions delivered by the learned judges, at general term, have been adopted by the opposing counsel respectively, and submitted as their arguments for consideration here. A clear understanding is thereby furnished of the points on which the case turned below.
A subsisting equitable estate in Mrs. McGovern seems to have been conceded, or at least not seriously questioned; and estoppel in pais relied on by a majority of the court to bar its assertion. To us the first proposition is of the greater gravity, and presents the only question of real difficulty.
I. If Mrs. McGovern has an estate in the controverted premises, it arises upon a resulting trust. Do the facts disclosed vest in her such estate.
As between strangers, it will be presumed, and as between members of the same family it may be shown that a conveyance of lands to another than him by whom the considertion, or some part thereof, is, at the time, paid or secured, vests in the latter an equitable estate pro tanto, by resulting trust. Bottsford v. Bur, 2 Johns. Ch. 405; Wray v. Steele, 2 Ves. & Beam. 388 ; Creed v. Lancaster Bank, 1 Ohio St. 1. It is sufficient if the payment of the consideration be secured for and on behalf the cestui que trust by the promissory note of a third person, Morey v. Herrick, 18 Penn. St. 123 ; or of him to whom the legal title is conveyed. Lounsbury v. Purdy, 16 Barb. (N. Y.) 376; and 1 Leading Cases in Equity, 276, where the authorities are collected. The foundation of a resulting trust is the payment, or the securing to be paid, by the cestui que trust, out of his own means, the consideration of the conveyance, or some part thereof, at its completion.
In the present case, the proof is clear that $2,000, part of the consideration for the conveyance of the Laurel street property to her husband, has been paid by Mrs. McGovern, out of her separate moneys. It is also clearly shown that the property was originally intended for her, to be paid for from the proceeds of her inheritance. But not being able to raise the cash payment of $2,000 at the completion of the conveyance, and being under the disability of coverture disqualifying her from binding herself by any form of commercial obligation, the payment was secured, and made a charge upon her separate estate by mortgage, which was the highest and only security binding the same, that she could give, her husband's note being made its basis. To the extent of this |2,000 charged upon her separate property, the original credit was given to her ; whence an equitable estate pro tanto at least became vested in her by resulting trust.
Unless she is estopped to assert this estate, the judgment of the superior court must be reversed ; thus rendering it unnecessary to consider the question or determine the extent of her interest resulting from the mortgage of her equitable estate in the purchased premises to secure the deferred installments.
II. Is Mrs. McGovern estopped to assert her estate, in this action ?
It is the dictate of natural justice that he who, having a right or interest, by his conduct influences another to act on the faith of its non-existence, or that it will not be asserted, shall not be allowed to afterwards maintain it to his prejudice. Out of this just principle- has grown the equitable doctrine of estoppel in pais, so well stated and strongly approved by Fonblanque in his treatise on Equity, vol. 1, ch. 3, sec. 4 ; by Chancellor Kent, in Wendell v. Van Rensselaer, 1 Johns. Ch. 344 ; by Lord Macclesfield, in the leading case of Savage v. Foster, 9 Modern R. 35 ; and by the other authorities cited in support of the judgment below.
The doctrine has been characterized as one of harshness, But it has its foundation in the solicitude of the law to prevent fraud from consummating its ends, and to promote good faith in the conduct of men ; its apparent harshness arising from its injudicious application.
Probably no inflexible rule can be laid down defining the several conditions of its application in all cases. One condition, however, is fundamental and essential in every case, which is, that the particular right or interest invoking the protection of the doctrine must have been influenced by the conduct, the encouragement, concealment, or denial of him who, or with whom one in privity, is sought to be estopped. Only parties and privies are affected by it, or can invoke its interposition.
The non-observance of this fundamental condition doubtless determined the judgment below. The origin of the controversy was a loan of money by Pearson O. Brown to Matthew McGovern. The defendant in ez-ror, now asking the application of the doctrine, is the assignee of Brown, standing in privity with hizn. Her equity is not superior to his. If he could not, zieither cazi she be aided by estoppel.
The original loan by Brown to Matthew McGovern was not made on the faith of title in him ; but ozi the credit of William Knox, his personal indorser. Brown, therefore, did not act, azzd hence acquired no right, ozi the faith that Mrs. McGovern had no estate, or that it would not be asserted. In fact, it does not appear that she had azzy knowledge of the loan; that any act or utterance of hers influenced Brown in making it; or that he was aware of her existence. As to him, then, and hence as to the defendant in erroi-, who is in privity with him, izo sizzgle conditiozz of estoppel is shown by the record.
It is insisted, however, azzd the judgment below seems tc liave resulted from the misapprehension that a case of estoppel is raised in favor of the defendant in error, by the evidence of representations and iziformation, on the faith of which William Knox became indorser. In our opinion this evidezzce is izicompetent. William Knox is not before the court. His right is not involved. He is not asserting it. The defendazit in error is not in privity with, but claims adversely to him. Her title is dei-ived through Brown, not William Kzzox.
The judgment of the superior court, at general and special term, will be reversed, and the cause remanded for further proceedings.
Welch, O. J., and White, Day and McIlvaine, JJ., concurred.