Court Opinion

ID: 9794506
Source: CourtListenerOpinion
Date Created: 2023-08-31 03:07:08.151427+00
Date Added: 2024-06-11T08:16:56.145157
License: Public Domain

LUSK, J.,
specially concurring.
So far as the opinion of the court holds that there was an enforceable oral express trust it rests upon a ground not taken by the plaintiff State Treasurer and not suggested in the record, briefs or oral argument. The position of the court, as I understand it, is that such an oral trust will be enforced where the alleged trustee does not repudiate it in reliance upon the statute of frauds, and, as the defendant has not invoked the statute, there is no occasion to look further, either for a resulting trust or a constructive trust.
While it is held by most courts that the defense of the statute of frauds is personal and is deemed waived unless pleaded or raised in some other appropriate manner by the defendant, 49 Am Jur 908, Statute of Frauds § 601, there is indication in our decisions that this is not the rule in Oregon with respect to the creation of a trust. See Presbytery of Willamette v. Hammer, 235 Or 564, 567, 385 P2d 1013; Chance v. Weston, 96 Or 390, 395, 190 P 155; Chance v. Graham, 76 Or 199, 213, 148 P 63.
But as I view it that question is not before us. There are no formal pleadings in this case and none were required as it is a proceeding in probate: ORS 115.010. The issue was made by the State Treasurer’s Objections to the probate court’s Determination of Inheritance Tax—objections based on the ground that the property now involved was not included in the inventory of the estate for the purpose of that determination. There is nothing in the transcript of testimony to indicate on what theory the plaintiff was proceeding, though a lawyer might probably have *414sensed that some kind of a trust was claimed. Tlie precise ground for recovery of the tax is disclosed, however, by the plaintiff’s brief in this court. lie contends that the conveyance of Henry Buesing’s interest in the land to his brother gave rise to either a resulting or a constructive trust. Both arise by operation of law and neither is within the statute of frauds: ORS 93.020.① I think the evidence establishes a constructive trust and that the defendant’s omission to invoke the statute of frauds is in the circumstances of this case immaterial. The oral agreement—or, more accurately in this case, the implied agreement—could be shown “not for the purpose of enforcing it, but simply to restore the parties to the situation which obtained before the voluntary conveyance was made:” Moses v. Moses, 140 NJ Eq 575, 583, 53 A2d 805, 173 ALR 273. As stated by Professor Ames: “His bill is not for specific performance of the express trust, but for restitution of the status quo.” Ames, Constructive Trusts Based Upon the Breach of an Express Oral Trust of Land, 20 Harv L Rev 549, 551. See, also, 1 Scott, Trusts (2d ed) 309, § 44.
The evidence brings the case within the definition of a constructive trust in the Restatement, Trusts 2d, *415§44 (1) (b)② as adopted and applied by this court in Hanscom v. Irwin, 186 Or 541, 208 P2d 330, and Marston v. Myers et ux, 217 Or 498, 342 P2d 1111. Cf. Shipe et al v. Hillman, 206 Or 556, 292 P2d 123. There was a confidential relation between Henry and Charles, not only because they were brothers, but also were partners and, in addition, the testimony shows that, while all three brothers gave their full time to the business of the partnership, Henry and Benjamin relied upon Charles to determine the major questions of policy in the conduct of the business of the partnership. There was no express promise by Charles to reeonvey, but none was needed. As Judge Cardozo put it in Sinclair v. Purdy, 235 NY 245, 254, 139 NE 255, in holding sufficient the evidence of a constructive trust: “Though a promise in words was lacking, the whole transaction, it might be found, was ‘instinct with an obligation’ imperfectly expressed (Wood v. Duff-Gordon 222 N. Y. 88, 91).” As in Sinclair v. Purdy, it can also be said of this ease that the conveyance “was made as a form, that both so understood it, and that the transaction was consummated in confidence that the holder would keep the faith.” Of course, there was in this case no bad faith on the part of Charles, but as we held in Hanscom v. Irwin, supra, 186 Or at 564-566, a constructive trust may arise even though at the time of the transfer the transferee in*416tended to perform the oral trust. His refusal thereafter to perform is an abuse of the confidence.
*415“(b) the transferee at the time of the transfer was in a confidential relation to the transferor, or
$ ‡ ❖ ^
*416It is argued in the opinion of the court that the theory of a constructive trust is not supported because there is no evidence that Charles refused to reeonvey to Henry. But Charles’ refusal to pay the inheritance tax, when demanded by the State Treasurer, on the ground that the deed from Henry transferred to Charles the entire interest, legal and equitable, in the property amounted to a repudiation of his obligation. Were the court to fail to find and declare the constructive trust thus created, Charles would be unjustly enriched by escaping payment of the tax. In the circumstances disclosed Henry had a beneficial interest in the property at the time of his death and Charles’ succession to that interest made it subject to tax under the inheritance tax law of Oregon: In re Lowengarfs Estate, 160 Or 118, 84 P2d 105.
As I read, the opinion of the court it does not hold, though it intimates that it might be held, that ’Charles was the trustee of a resulting trust. If, as the court determines, there was an express trust, a resulting trust could not have arisen.
“A resulting trust arises where a person makes or causes to be made a disposition of property under circumstances which raise an inference that he does not intend that the person taking or holding the property should have the beneficial interest therein and where the inference is not rebutted and the beneficial interest is not otherwise effectively disposed of. ¡Since the person who holds the property is not entitled to the beneficial interest, and since the beneficial interest is not otherwise disposed of, it springs back or results to the person who made the disposition or to his estate, and the person holding the property holds it upon a re-*417suiting trust for Mm or Ms estate.” Restatement, Trusts 2d, 322-323.
In recent cases tMs court has approved section 403, Restatement, Trusts 2d, which reads:
“Where the owner of property transfers it without declaring any trust, the transferee does not hold the property upon a resulting trust although the transfer is gratuitous.”
See Marston v. Myers et ux, supra, 217 Or at 509; Shipe et al v. Hillman, supra, 206 Or at 564-565. See, also, 4 Scott on Trusts (2d ed) 2923-2924, §404.1; Bogert, Trusts and Trustees (2d ed) § 453.
Professor Scott and the Restatement say there are three categories of resulting trusts, to-wit: (a) the failure of an express trust; (b) the full performance of an express trust without exhausting the trust estate; and (e) the payment of the purchase price of property by one who directs that title be taken in the name of another. See Scott, op. cit, §404.1; Bogert, op. cit., §451; Restatement, op. cit., 323 and Comment a to § 404. Resulting trusts in such instances long have been recognized by courts of equity as arising “by implication or operation of law:” ORS 93.020 (2), and, therefore, not within the statute of frauds. Bogert, op. cit., § 452, at page 503.
The opinion of the court rejects the authority of Scott and the Restatement; I would accept it.
I concur in the result.
I am authorized to say that the Chief Justice and Mr. Justice Perry concur in the foregoing opinion.

 “(1) No estate or interest in real property, other than a lease for term not exceeding one year, nor any trust or power concerning such property, can be created, transferred or declared otherwise than by operation of law or by a conveyance or other instrument in writing, subscribed by the party creating, transferring or declaring it, or by his lawful agent under written authority, and executed with such formalities as are required by law.
“(2) This section does not affect the power of a testator in the disposition of his real property by a last will and testament, nor to prevent a trust from arising or being extinguished by implication or operation of law, nor to affect the power of a court to compel the specific performance of an agreement in relation to such property.”

 “(1) Where the owner of an interest in land transfers it inter vivos to another in trust for the transferor, but no memorandum properly evidencing the intention to create a trust is signed, as required by the Statute of Frauds, and the transferee refuses to perform the trust, the transferee holds the interest upon a constructive trust for the transferor, if