Case Name: Phelps v. Seely & als
Court: Supreme Court of Appeals of Virginia
Jurisdiction: Virginia
Decision Date: 1872-08
Citations: 22 Gratt. 573
Docket Number: 
Parties: *Phelps v. Seely & als.
Judges: 
Reporter: Virginia Reports
Volume: 63
Pages: 206–213

Head Matter:
*Phelps v. Seely & als.
August Term, 1872.
Staunton.
I. Rescission of Contract by Parol Agreement. —By article of agreement under seal, S sells to H a lot of land, of which at the time H is in possession as tenant of S. Sometime afterwards, H informs S, that he cannot pay for the lot, and proposes to rescind the contract; which S consents to: and H informs S that P will buy the lot at the same price. S thereupon agrees to sell to P, and with the assent and at the request of H, S sells and conveys the lot to P. Held :
1. Same—Valid.—The written contract, whether delivered up or not. may be rescinded by a subsequent parol agreement, which has been fully carried out; and in this case the contract was rescinded.
2. Same -Estoppel.—The sale to P having been at the instance of H, and with his concurrence, even if the contract could not be rescinded by a subsequent parol agreement, H would be estopped In equity, by his own acts, from setting up the written contract.
2. Resulting Trust by Parol Testimony—Absolute Deed a flortgage. —A resulting trust may be set up by parol testimony, against the letter of a deed; and a deed absolute on its face may, by like testimony, be proved to be only a mortgage. But the testimony to produce these results must, in each case, be clear and unquestionable. Vague and Indefinite declarations and admissions, long after the fact, have always been regarded, with good reason, as unsatisfactory and insufficient. For comment on such evidence see the opinion.
In October 1866, Mary A. Seely brought her suit in equity in the Circuit court of Augusta county, against Rachel Phelps and others purchasers from her, to enjoin the defendants from taking possession of a lot of ground in Staunton, and to redeem what she alleged was intended to be a mortgage upon the lot. The bill stated that about the year 1846, Horace Seely, the father of the plaintiff, purchased of A. H. H. Stuart lot No. 16 in the town of Staunton, containing one acre; that he '"'took possession of it, and improved it by erecting a dwelling thereon, and occupied it until his death in 1859; that thereafter the plaintiff’s mother occupied it until her death in 1864; and since that time, the plaintiff, the only child of Horace Seely, has held exclusive and adverse possession of said house and lot, by herself and through her tenants.
The price which Seely agreed to pay for the lot was $400, which, owing to his limited means, the expense of improving the lot and his bad health, he found it inconvenient to pay. In this situation, Mrs. Phelps, an elderly widow lady, possessed of ample means, and member of the same church with Seely, offered to pay the purchase money for the lot, with the understanding that it should stand as security for what she paid, and Seely should have a right to redeem it at any time by refunding the money she might pajL In 1850 Mrs. Phelps procured a deed from Stuart, conveying the lot to her, without any trust, condition or reservation. The deed purports to be made in consideration of $440, bears, date 28th December 1850, was acknowledged on January 1st, 1851, but not recorded until March 1, 1855. Plaintiff cannot say what, if any, agency her father had in making said deed, but she knows from his repeated assurances, that he never intended to surrender or abandon his contract with said Stuart; and that his right to redeem the house and lot was just the same after the deed as before. Plaintiff charges that the deed to Mrs. Phelps was made with the express understanding and agreement between her and her father that said deed should be held by said Phelps as a mortgage, with the conditional right reserved by him to redeem, at any time, by repaying her the money with the interest. And plaintiff states that at the time of making the deed the lot with its improvements was worth perhaps $1,000 or $1,500. As soon as plaintiff had reason to believe that it was the intention of said Phelps to claim said property, "'plaintiff caused a tender to be made to her of the money she had paid, with interest on it, through a friend in Washington city, which said Phelps declined to receive.
The plaintiff stated that Mrs. Phelps had conveyed the lot to Aaron Shoveler, and eight others named, trustees for the Methodist Episcopal Church of the United States, by deed bearing date the 15th of September 1866, the consideration named therein being $2,200; and she charges that said Shoveler and others, at the time of taking said deed, had full notice in fact of her full right to redeem said property; and that they cannot claim the protection of purchasers without notice, as they have not paid the purchase money.
The bill charges that the said Shoveler and other trustees-had, within a few days past, entered upon said lot, and are engaged in digging out the foundation for a church. And she prays for an injunction to restrain them, 'until she has an opportunity of bringing forward proof to sustain the allegations of her bill; and that she may be permitted to redeem said property by returning to Mrs. Phelps her money with interest, and for general relief. The injunction was granted.
Mrs. Phelps answered the bill. She says it is true that Horace Seely did contract with A. H. H. Stuart for the purchase of lot No. 16, in the town of Staunton; but this contract was dated the 11th of July 1843, not in 1846, as stated in the bill. It is also true that Seely took possession of said lot, and did erect on it a small dwelling-house, in which he resided until his death in 1859. After his death the widow of Seely continued to occupy said property, until her death in 1864; and since her death, which occurred during the war, the plaintiff was left in possession of the property. But it is not true that the possession of Horace Seely, or his widow, or the plaintiff, was adversary to the rights of the respondent; but, on the contrary, said possession was held *under this respondent as a matter of grace and favor extended to them by her.
The defendant further says: On the 11th of July, 1843, Horace Seely entered into the contract with A. H. H. Stuart or the purchase of the lot for the price of $400, with interest from the 1st of November 1841. That Seely entered on the lot as lessee on the 1st of November 1841; and hence it, was stipulated that the interest should commence from the date of possession. After making the contract Seely employed Wm. Grove to erect on the lot, a small frame dwelling-house, and executed to Grove two notes for $77.88 each, dated 25th December 1843, which was about the time the carpenters’ work was finished.
Seely having failed to pay the notes, Grove recovered a judgment against him, and he was taken in execution, under writs of ca; sa. and committed to jail. These executions were issued May 7th, 1845. About this time respondent came to reside in Staunton. Shortly after her arrival she learned • the distressed condition of Seely and his family, and became interested in his behalf. Upon a conference with him it was agreed that Seely should abandon his contract with Mr. Stuart, and that respondent should become the purchaser from Mr. Stuart; she agreeing to give her bond to Mr. Stuart for the purchase money and unpaid interest, then - ascertained to be $440, and also to pay off the debts due to Grove, including costs and jail fees. Respondent’s only object in making this arrangement,, was of kindness to Seely and his family. In accordance with this understanding respondent paid off the execution against Seely. He then called on Mr. Stuart and surrendered the contract of purchase, and delivered up to him the article of agreement; and a new agreement was then entered into between respondent and Stuart, by which she became the purchaser of lot No. 16. Since the institution of this suit, at the request of an agent of this respondent, Mr. Stuart has ^searched his papers and found, the original contract between himself and Seely, which Seely had surrendered to him, and which he had happened to preserve as evidence of his being free to sell to respondent. And she exhibits it.
At the time of the purchase by respondent from Mr. Stuart, she paid to him a part of the purchase money, and gave her bond for the residue, which she afterwards discharged in full a short time before he executed the deed to her. She emphatically denies that she was mortgagee of the property, or that she bought it subject to any trust, condition or understanding with Mr. Seely, or any one else, that he was to have the right to redeem it by refunding the purchase money. Any such understanding or agreement would have been perfectly idle, because Mr. Seely was notoriously and hopelessly insolvent, and the whole transaction was founded on the knowledge of that fact. She thinks it altogether probable, that if, within a reasonable time after the purchase, Mr. Seely, by any good fortune, had been able to purchase the property, she would have let him have it at what it cost her; but she would have done so, not. in consequence of any obligation, legal or moral, to do so, but purely as a matter of personal favor to him. She paid a full and fair price for the lot and house, according to the market value of property in Staunton at that date. Her purpose in making the purchase was to befriend Mr. Seely and his family; and in fulfilment of this purpose she allowed him to occupy the house and lot rent free, as long as he lived; and after his death she accorded the same privilege to his widow. And in the twenty-one years she has been the absolute owner of the property, she has never demanded or received one dollar of rent from the Seely family.
Respondent removed from Staunton many years since, and has but recently returned to live here. And she says it is not true that the plaintiff, at any time or place, *made a tender to respondent of the purchase money and interest. But if she had done so, respondent would not have received it after the lapse of twenty-one years.
Shoveler and the other trustees answered, denying notice of the plaintiff’s claim. They purchased the lot, believing Mrs. Phelps had a clear, unincumbered legal title to it, at the price of $2,200, of which they had paid $1,200.
A. H. H. Stuart, who was examined as a witness by the defendant, states that he sold the lot to Seely on the 11th of July 1843; though Seely had been in possession of it, as tenant, for about two years before that time. Seely held the lot a year or two, and did some painting for witness on account of the price. He then came to witness and stated he would be unable to pay for it, and proposed to surrender his purchase. To this witness agreed, and Seely surrendered to him the contract filed with defendant’s answer. At the same time, or shortly thereafter, Seely informed witness that Mrs. Phelps would give witness $440 for the lot, and witness agreed to let her have it. Mrs. Phelps accordingly became the purchaser, and made payments to witness from time to time, until the whole price was paid, and witness executed a deed to her for the property. Being asked, Was anything said to you by Seely or Mrs. Phelps, either when the contract was surrendered by Seely, or when the deed was exerated to Mrs. Phelps, or at any* other time, about Seely’s having the right of redemption? the witness says: I have no recollection of having any interview with Mrs. Phelps on the subject; if I did, it has escaped my memory'; nor have I any recollection of hearing anything from Mr. Seely in regard to the matter. He says the contract with Seely was in dttplicate, and he thinks the paper filed with the answer is the copy which was in Mr. Seely’s possession. It is in his handwriting, and my impression is it is the copy which he had and surrendered to me.
*N. J. B. Morgan, the son-in-law of Mrs. Phelps, in whose family she lived whilst in Staunton, and who was at that time minister of the Methodist church at that place, says he found Mr. Seely in the county jail, for a debt due to some one, whose name he did not remember, nor does he remember the amount of the debt; but it was for carpenters’ work. He mentioned his case at home, and Mrs. Phelps and his ■wife felt much sy'mpathy for him, and made arrangement to pay the debt. He was not formally Mrs. Phelps’ agent, but he attended to some business for her with Mr. Stuart, in regard to a lot which had been purchased by Mr. Seely from Mr. Stuart. Mr. Seely was anxious for Mrs. Phelps to take the lot, on the ground that he could not pay for it. He thought the bargain a good one, and proposed to her to take his place in the purchase. Witness had frequent conversations with Seely' on the subject. Mrs. Phelps agreed to his proposition, and purchased the property from Mr. Stuart, Seely' giving up his contract with Mr. Stuart. Witness was privy to the whole transaction. Mrs. Phelps left Staunton with witness’ family in January, or early in February, 1846 ; witness remained sometime after their departure, and closed up the business for Mrs. Phelps with Mr. Stuart, so far as arranging payments was concerned; and to his knowledge there was not any contract, stipulation or trust by which Mrs. Phelps agreed to buy said lot for Seely; and there was no contract or understanding (so far as witness knew) by which a right of redemption of said lot, or anything of the kind, was secured by Phelps to Mr. Seely.
James F. Patterson was examined as a witness by the plaintiff. He says he was very intimate with Horace Seely, who told him of his arrangements with Mrs. Phelps; but at the distance of time he could not undertake to detail circumstances or statements then made. Seely showed him three letters he had received from *Mrs. Phelps. In one of these letters Mrs. Phelps was repeating assurances which she had given him that she held the title to the lot in her own name, for the time being, that she might secure it to his wife and children. She reminded him that he was in debt, and assured him that she would secure it to his wife and children, and in that -way he would be sure of a home; and that nothing could happen to her that would deprive the wife and children of the lot. I gave my interpretation to that part of the letter, by say-iug to Mr. Seely, that Mrs. Phelps had certainly made her will, and bequeathed the lot to his wife and children, so that, in case of her death, his family would be sure of the lot. My construction of that part of Mrs. Phelps’ letter was received by' Mr. Seely with marked satisfaction. All the letters were written in language a mother might address to a son. The sum Mrs. Phelps had paid for the lot was mentioned, he thinks, in two of the letters, which she expected he would be able to pay; but nothing was said about interest.
This witness further says: From the numerous conversations I had with Mr. Seely' on the subject of the lot, and of Mrs. Phelps having a deed for it, but more particularly from the letters of Mrs. Phelps to Mr. Seely, of which I have spoken, my decided opinion has been, and is, that Mrs. Phelps, actuated by a strong feeling of sympathy' and interest in the family of Mr. Seely, and having money at her command, paid the balance that Mr. Seely was owing on the lot, and took a deed to herself, with no other intention than to secure the lot to the family of Mr. Seely; and that upon being paid back the amount she had advanced, by Mr. Seely or his family, she would, in good faith, make a conveyance in fee simple to such member of Mr. Seely’s family as he might direct, or might be entitled to it, and in that way carry' out the understanding between herself and Mr. Seely. *This witness further stated, that he saw the contract between Mr. Stuart and Mr. Seely, in the possession of Mr. Seely', in the handwriting of Mr. Stuart. He saw the contract on several occasions in the possession of Mr. Seely, prior to the arrangement with Mrs. Phelps, and he thinks he saw it in Seely’s possession after that arrangement.
M. G. Harman, another witness for the plaintiff: He says he acted as agent for Mrs. Phelps at her solicitation, and his recollection is that he had several interviews with Seely, and Mrs. Phelps was willing, at all times, that he should take the property by his refunding to her the money and interest she had paid for the property. Mr. Seely was extremely desirous to secure the propertv or a part of it, and proposed to cut off a small lot with the house, and sell the remainder to pay the amount which Mrs. Phelps had paid Mr. Stuart, with its interest. Mrs. Phelps’ witness understood as doing this owing to the very kind feeling she entertained for Mr. Seely and his family. At witness’ instance the , lot was divided, cutting off about three-fourths, with the intention of having it sold off to pay the debt and interest paid to Mr. Stuart; but for some cause it was postponed. The balance of the lot, with the house, was to be Seely’s, if the three-fourths cut off sold for enough to pay the principal and interest of the debt paid to Stuart. He thinks this was in 1858 or 1859; of the time he is not certain. In all witness’ correspondence with Mrs. Phelps, she expressed a willingness that Seely should have the property on the terms mentioned; but he never was able to raise the money. It was, witness considered, a matter of favor on Mrs. Phelps’ part to redeem the property, and give Mr. Seely an opportunity to repay her the amount she paid for it, with its interest.
A. D. Trotter, another witness for the plaintiff, refers to a correspondence he had with Mrs. Phelps in 1849 or 1850, with reference to the purchase of the lot, for the *purpose of building upon it the Wesleyan Female Institution. He says terms were made with her provided we could arrange the matter with Mr.- Seely, as to his interest or right in the property. He states how it was proposed to divide the lot, and what part Seely was to have; and that the trustees for whom witness acted, were to pay Mrs. Phelps the amount of her claim for the part they were to get; but the negotiation fell through. He says he was in Baltimore in the spring of 1856 or 1857, and met with Mrs. Phelps, who referred to a claim on the property occupied by Mr. Seely, and requested him to attend to the matter for her. He declined it; and recommended M. G. Harman. Sometime after this Harman called on witness and said he was Mrs. Phelps’ agent, and told him that he arranged the whole difficulty for Mrs. Phelps with the Seelys, and had done better for her than she expected. Harman requested him to lay off for the Seelys one-fourth of an acre with the improvements; which he did; and the Seelys put their fence on the lines laid off by witness, leaving the balance of the lot uninclosed. The arrangement Harman thought he had made was not for some cause consummated, and the Seelys have continued to occupy the property. Prom all he could learn-, he concluded that as Mr. Seely was much involved in debt, Mrs. Phelps, as his friend, undertook to advance the means to secure him a home, with the understanding that she must, upon being reimbursed, convey to or secure for Mr. Seely and his family the property; .and he was surprised when' he learned that Mrs. Phelps asserted now that the Seelys had no right to nor interest in the property. Witness did not pretend to speak with distinctness, as lapse of time and exciting intervening events have done much to take facts from his memory, and he only gives his best impression and recollection.
The plaintiff introduced a letter from Horace Seely to M. G. Harman, dated March 10th, 1856, in which he *says I am sorry it is not in my power to pay any part of the rent demanded by Mrs. Phelps. I cannot at this time raise a dollar. I w-ould pay it without hesitation if it were possible. I can say, however, that by the assistance of my daughters, who are teaching school, that I expect to be able to pay a part by the end of this quarter, if possible the whole of it. As to rent, Harman says he has no recollection of ever having demanded rent, but from this letter he supposes he must have been requested to collect rent. His impression is he called to collect rent at the request of the Rev’d Mr. Phelps. He did not attempt to coerce the payment.
On the 29th November 1866, the administrator of Horace Seely was, by consent of parties, made a plaintiff in the cause. And then the cause came on to be heard, when the court held that Seely had surrendered absolutely his contract with Stuart, and that Stuart’s conveyance to Mrs. Phelps was equally absolute and unconditional, and no mortgage was sufficiently established. But that under the circumstances of the case, Mrs. Phelps must be construed as having, in equity, taken the conveyance to herself with a resulting trust in favor of Seely, at the time he abandoned the Stuart contract in her favor. The court, therefore, whilst it dissolved the injunction as to Shoveler and the other trustees, referred the case to a commissioner, with directions to ascertain and report to how much of the proceeds of the sale of the house and lot the parties are equitably entitled, taking said Phelps as entitled to the proceeds of sale in proportion to her investment in the property, and Seely’s administrator to the proceeds of sale in the proportion of the investment of said Seely, &c.
■ The commissioner made two reports, to both of which the defendant excepted. By the last he fixed the proportion of the purchase money of the lot to which Mrs. Phelps was entitled at $1,555.55; and Seely’s share at $684.44.
*The cause came on to be finally heard on 21st of November 1867, when the court overruled the exception of the defendant to the last report, and made a decree that Mrs. Phelps should pay to Seely’s administrator the sum of $684.44, with interest thereon from the 15th of September 1866 till paid, and costs.
Prom this decree both parties obtained appeals to the District court of Appeals at Charlottesville. The case came on to be heard in that court on the 4th day of July 1868, when the court held that the deed from A. H. H. Stuart to Mrs. Phelps, though absolute on its face, was intended as a mortgage to secure to her the money advanced by her for. the use of Seely; and reversed the decree of the Circuit court, and remanded the cause. Mrs. Phelps thereupon applied to a judge of this court for an appeal, which was allowed.
Stuart, for the appellant.
Fultz, Echols, Bell & Catlett, for the appellee.
Rescission of Contract by Parol Agreement.—The rule laid down in the principal case, that a written contract creating an equitable lien, maybe rescinded by a subsequent parol agreement partially acted on or fully performed is followed as authoritative in several subsequent cases. See Jordan v. Katz, 89 Va. 630, 16 S. E. Rep. 866; Ballard v. Ballard, 25 W. Va. 473.
In Straley v. Perdue, 33 W. Va. 375, 10 S. E. Rep. 784, the court saying: “In the case of Minor v. Edwards, 12 Mo. 137, it was held that ‘an acceptance of a deed of inferior value to such a one as the grantee is by his contract entitled to, as a compliance with such a contract, is equivalent to a waiver of such better title,’” cites the principal case, and Jarrell v. Jarrell, 27 W. Va. 743.
Resulting Trust Established by Parol Testimony-Absolute Deed a Mortgage.—The principal case is cited and followed by many subsequent ones as authority for the proposition that a resulting trust may be established by parol testimony. But the evidence, to produce such results, must be clear and unquestionable. Loose, indefinite and vague declarations, especially when made long after the fact, are unsatisfactory and insufficient. See Borst v. Nalle, 28 Gratt. 436. and foot-note on Resulting Trusts; Jennings v. Shacklett, 30 Gratt. 771; Kane v. O’Conners, 78 Va. 76; Sinclair v. Sinclair, 79 Va. 42; Moorman v. Arthur, 90 Va. 477. 18 S. E. Rep. 869; Riggan v. Riggan, 93 Va. 90, 24 S. E. Rep. 920; Throckmorton v. Throckmorton, 91 Va. 43. 22 S. E. Rep. 162; Donaghe v. Tams, 81 Va. 143. 146; Bright v. Knight, 35 W. Va. 40, 13 S. E. Rep. 66; Tennant v. Tennant, 43 W. Va. 547, 27 S. E. Rep. 338. dissenting opinion of Bbanhon, J.; Troll v. Carter, 15 W. Va. 582, 583. The principal case is also cited as authority for the proposition that parties to a deed absolute on its face, may, by parol evidence, prove the deed was intended as a mortgage or as a mere security for a debt. See Snavely v. Pickle, 29 Gratt. 31, and foot-note; Miller v. Blose, 30 Gratt. 744; Edwards v. Wall. 79 Va. 322; Nease v. Capehart, 8 W. Va. 125.
As to the weight of such parol evidence, see Edwards v. Wall, 79 Va. 323; Donaghe v. Tams. 81 Va. 151: Kent v. Kent. 82 Va. 212; McDevitt v. Frantz, 85 Va. 922, 9 S. E. Rep. 282, all citing the principal case as authority.
In Troll v. Carter, 15 W. Va. 582, the court citing the principal case, and many others, said: “So, too, all th e authorities agree that an equitable claim of any sort, and especially one which depends on parol testimony only, will not be recognized after great lapse of time, during which time it has been ignored, where no satisfactory reason can be assigned for not setting up the claim sooner. And that this is more especially true when the equitable claim is of a character which required clear and explicit evidence to sustain it; such lapse of time itself rendering the evidence, which might otherwise have been regarded as sufficiently clear and explicit, unsatisfactory.”

Opinion:
BOULDIN, J.
It is perhaps unnecessary to decide in this case, whether the written contract of the 11th of July 1843, between Stuart and Seely, could be waived or rescinded by a subsequent parol agreement, as it is apparent, as well from the theory of the bill, as from the proofs in the cause, that all that was done by Stuart in that respect, was done not only with the full knowledge and consent of Seely, but in fact at his instance and request. Under such circumstances Seely would be estopped in a court of equity from setting up any claim or interest in himself in derogation of the act of Stuart, thus assented to and authorized by himself. But the question, whether the contract of the 11th of July 1843, could be thus waived or rescinded, has been very earnestly and elaborately argued by learned counsel on both sides of this case; and it may be expected, and is perhaps proper, that the views of the court on that question should be expressed.
*No rule of law is better established as a general rule than this,—that a written contract, whether under seal or not, and whether relating to land or not, cannot be explained, varied, or controlled by parol evidence. But that is not the question before us. The question is, whether an executory contract in writing, creating an equitable interest in land, may not in equity be rescinded, waived or abandoned by a subsequent distinct and independent parol agreement between the parties, partially acted on or fully performed by them.
If part performance of an original parol contract be sufficient in a court of equity to withdraw the case from the operation and influence of the statute of frauds, as it unquestionably is, no good reason is perceived, why part or full performance of a subsequent distinct and independent parol contract, rescinding the former contract for full consideration, and substituting another in its place, should not in like manner withdraw the latter contract from the influence of the statute. The principle of the two cases would seem to be precisely the same.
But we are not left to mere analogy. The precise question seems to have been decided in more than one case both in England and America. In a note to the case of Pym v. Blackburn, 3 Ves. R. 34, 40, the annotator, after citing among other cases, the cases of Goman v. Salisbury, 1 Vern. R. 240, and Legal v. Miller, 2 Ves. Sr. R. 299, says, "In each of the last two cases, an agreement executed according to the statute, was discharged by a subsequent parol agreement, of which evidence was given, on the ground of part performance. For this purpose the evidence must prove a distinct subsequent, independent agreement. ' '
In the case of Rich v. Jackson, reported in a note to the subsequent case of the Marquis of Townshend v. Stangroom, 6 Ves. R. p. 334-5-6, Lord Hardwicke's opinion that parol evidence is admissible to rebut an equity, was approved; and it was held that the rule which denies *the right to vary by parol the effect of a written agreement within the statute of frauds does "not affect the case of a subsequent, distinct, collateral agreement." And in Price v. Dyer, 17 Ves. R. 535, 363-4, Sir William Grant, after saying that the case then before him did not render it necessary for him to express an opinion directly on the question, whether a written contract in relation to land could be waived or discharged by parol, says, "But as at present advised, I incline to think, that upon the doctrine of this court such would be the effect of a parol waiver, clearly and satisfactorily proved;" but he goes on to say, "but here there was no such waiver. The waiver spoken of in the cases, is an entire abandonment and dissolution of the contract restoring the parties to their former condition."
Such, however, was precisely the character and purpose of the abandonment and dissolution of the contract in this case, between Stuart and Seely as proved by Stuart. The American cases are to the same effect as the English.
Mr. Hilliard in his work on Vendors, ch. 10, 'i 19, p. 173, says, "And the general rule is, that a written agreement within the statute of frauds may be varied by a subsequent parol, distinct and collateral agreement;" citing among others the following American cases, viz: Dearborn v. Cross & al., 7 Cow. R. 48, and Baldwin v. Salter, 8 Paige R. 473.
In the first case, Dearborn v. Cross, the plaintiff sold a dwelling-house and distillery to the defendant, gave him a bond to make the title, took from him his several notes for the consideration, and delivered to him the possession of the premises.
One of the notes given in consideration of the sale, was afterwards put in suit; and the defence at the trial was, that the contract of sale had been rescinded by a verbal agreement between the parties; and that the plaintiff pursuant to that agreement, and with defendant's ^consent, had re-entered upon and rented the house, and finally sold the whole premises to another. The title bond, however, had never been delivered up or cancelled. The defence was overruled by the Circuit court, upon the ground that the contract could not be rescinded by a parol agreement of this description; that it could be discharged only by a release, or a sur render and cancelling of the contract. The .case was taken to the Supreme court of New York, which held that no action would lie on the note, the whole contract of sale being discharged by the new, parol, executed agreement. The court say, p. 49, "The evidence given and that which was offered to be given, show not merely an ex-ecutory agreement to rescind the contract, but an agreement executed and carried into effect, by a surrender of the possession and a subsequent sale of the premises." And after citing several pertinent authorities, the court goes on to say, "the defendant Cross, therefore, could not enforce this contract against the plaintiff; and there seems to be no necessity for sending him to a court of equity in order to restrain the plaintiff from collecting the notes; which were the consideration of the contract."
There is a very striking analogy between the case of Dearborn v. Cross and the case before us. There is in this case clear and conclusive proof of a subsequent, distinct and independent parol agreement, between Stuart and Seely, by which the contract of sale was abandoned and rescinded; and this agreement was acted on and fulty executed by the subsequent sale of the property by Stuart to Mrs. Phelps, with the consent and at the instance of Seely, and by Seely's surrender in effect, of the premises to Mrs. Phelps by his acceptance of the position of her tenant. Under'such circumstances, my opinion is, that the contract of sale, whether surrendered for cancellation or not, was wholly rescinded, and that the parties were restored to their former position.
The next and only other question necessary to be considered *"is, whether at the time of the deed from Stuart to Mrs. Phelps, or prior thereto, there was any understanding or agreement between Mrs. Phelps and Seely, that the money paid or to be paid by Mrs. Phelps for the land, should be advanced by her as a loan to Seely, and that she was to take a deed for the land from Stuart directly to herself, as a security for the loan. No such agreement appeared on the face of the deed; and if it existed it must be established by testimony. The question is, therefore, one of fact only.
Was any such agreement made? Mrs. Phelps, in her answer to the bill, denies emphatically "that she was mortgagee of the property, or that she bought it subject to any trust, condition or understanding with Mr. Seely, or any one else, that he was to have the right to redeem it by refunding to her the purchase money." She says that any such arrangement would have been perfectly idle, as Mr. Seely was hopelessly and notoriously insolvent, and the whole transaction was founded on the knowledge of that fact. She admits that she made the purchase with a view "to befriend Mr. Seely and his family," and thinks it probable that if, in a reasonable time, Mr. Seely had been able to re-purchase the property at the price paid by her, she would have let him have it, not under any legal or moral obligation, "but purely as a matter of personal favor to him." This is the substance of her answer, and it-amounts to an emphatic and unequivocal denial ' of the loan and mortgage. Mr. Stuart, who sold her the property and made the deed, looked on it as an absolute conveyance to Mrs. Phelps, without reservation or condition, having heard nothing to the contrary from any of the parties. So far from it, when his contract with Seely was rescinded, the latter informed him that he was utterly unable to complete his purchase from him, but that Mrs. Phelps would buy the lot at the same price—$440. If it was to be an advance for him, it is reasonable to suppose that *he would have said so, instead of speaking of it as a purchase by her. And Mr. Morgan, the son-in-law of Mrs. Phelps, and the active agent between the parties—privy, as he says, to the whole transaction—took the same view of the matter,, never having heard, as he proves, of any loan or mortgage. On the contrary, he proves that Mr. Seely acknowledged himself unable to complete his purchase, and that he- requested Mrs. Phelps to take his place and bu3r the property from Mr. Stuart; which she did.
This is all we have from the persons immediately cognizant of and party and privy to the transactions occurring at and prior to the date of the deed, except the subsequent admission of Seels'- himself, that he was debtor to Mrs. Phelps for the rent of the property, and would pay it when able —an admission utterly inconsistent with the idea that he owned the property, subject only to an encumbrance. Against all this there is nothing in the record but the loose and unsatisfactory testimony of several witnesses, testifying to vague and indefinite declarations and admissions of Mrs. Phelps, made long after the date of the transaction —declarations and admissions not only having no direct reference either to a loan or mortgage, but all of them applying as forcibly to the position of Mrs. Phelps as to the pretensions of the appellee.
There is no doubt that a resulting trust may be set up by parol testimony against the letter of a deed; and it is also true that a deed absolute on its face may, by like testimony, be proved to be only a mortgage; but the testimony to produce these results must, in each case, be clear and unquestionable. Vague and indefinite declarations and admissions long after the fact, such as have been relied on in this case, have always been regarded—and I think with good reason—as unsatisfactory and insufficient.
In Lench v. Lench, 10 Ves. R. 511, 517-18, Sir Wm. *Grant, speaking of parol evidence of subsequent admissions or declarations to establish a trust, says: "The witness swears to no factor circumstance capable of being investigated or contradicted, but merely to a naked declaration of the purchaser admitting that the purchase was made with trust money. That is in all cases most unsatisfactory evidence, on account of the facility with which it may be fabricated and the impossibility of con tradicting it. Besides, the slightest mistake or failure of recollection may totally alter the effect of the declaration. ' '
And so in Bostford v. Burr, 2 Johns. Ch. R. 405, 411, Chancellor Kent, commenting on the parol testimony by which a trust was sought to be engrafted on a written instrument, says: "This is a remarkable instance of the inaccuracy and fallacy of parol testimony, and shows the great danger there is of giving much latitude to these implied trusts founded on naked declarations in opposition to the solemnity and certainty of written documents."
The case of Bostford v. Burr will be found, in all of its essential features, to be very much like the case before us, but with this difference, that the testimony in that case tending to establish parol admissions of the trust was much more direct and pertinent than any offered in this; yet Cha ncellor Kent held that it was wholly insufficient to change the terms of the deed. He said, page 412, "all the proof seems to consist of the confessions of the defendant; yet those confessions will, most of them, apply as well to the pretence of the one side as the other" ; and in noticing and commenting on the testimony, he quotes, with approbation, the language of Sir William Grant in Lench v. Lench, already referred to.
Now, it will be seen that Mrs. Phelps had always expressed a willingness and a purpose "to befriend Mr. Seely and his family"—to provide for them a home in *their destitute condition—not, however, as a matter of obligation and contract, but purely of kindness and favor; and she admits in her answer that she purchased the property with that view, and would, within any reasonable time, have re-sold it to Seely at the same price, had he been able to make the purchase. All her acts and declarations, as proved in the cause, are entirely consistent with this position. ,By none of them did she ever admit that there was either a loan or a mortgage: on the contrary, Col. Harman, one of the witnesses relied on to establish the mortgage, proves distinctly that he regarded the provision intended by Mrs. Phelps for Mr. Seely and his family to be purely a matter of favor.
My opinion is, that such testimony, long after the execution of the deed, is not sufficient to alter and overthrow its plain terms, supported as it is by the statements on oath of Mrs. Phelps, in her answer; by the direct and positive testimony of Morgan, the active agent between the parties, privy to the whole transaction; by the positive and negative testimony of Stuart, the grantor; and by the subsequent solemn admission of Seely himself, in writing, that he was debtor to Mrs. Phelps for the rent of the property, and would pay the same when able.
Upon the pleadings and proofs in the cause my opinion is, that from and after the date of her purchase from Stuart, Mrs. Phelps was entitled to the property in controversy absolutely, and without reservation or condition, whensoever she might think proper to demand the possession thereof; that as matter of favor, and not of contract, she allowed Mr. Seely and his family to enjoy the property without rent for more than twenty years—until, in fact, both Seely and wife, the chief objects of her bounty, were dead; and that in so doing she fully discharged all obligations of duty and charity.
The decrees of the District and Circuit courts must be ^reversed, with costs to the appellant, and the bill dismissed.
MONCURE, P., and CHRISTIAN and ANDERSON, Js. concurred in the opinion of Bouldin, J.