Court Opinion

ID: 3866583
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:00:27.163655+00
Date Added: 2024-06-11T14:14:57.924033
License: Public Domain

I concur in the conclusion reached by the majority that the complainants' proof is insufficient to warrant the establishment of a trust in their favor but I must respectfully decline to subscribe to the proposition that we might properly have established a constructive trust if the parol evidence of the alleged promise to reconvey had been clear and convincing. If the respondent promised to reconvey, there is no suggestion, either that the conveyance was obtained by fraud, actual or constructive, or that the respondent intended at the time the conveyance was made to violate said promise.
My position is that the Statute of Frauds forbids the establishment by parol evidence of a trust on an oral promise, *Page 496 
accompanied by no fraud, actual or constructive, to reconvey. Section 6, Chapter 333, G.L. 1923, (a portion of the Statute of Frauds) provides that "No action shall be brought: — . . . Whereby to charge any trustee under any express trust . . . Unless the promise or agreement upon which such action shall be brought, or some note or memorandum thereof, shall be in writing, and signed by the party to be charged therewith, or by some other person by him thereunto lawfully authorized." I am aware of the fact that English and certain American courts, in their attempt to do justice in "hard cases", have, in spite of the Statute of Frauds, established constructive trusts on mere oral promises where the only evidence of fraud was the failure to reconvey; and that such decisions have, to some extent, been followed as precedents.
The statute was evidently intended to prevent, in the absence of fraud accompanying the promise parol proof of an oral promise to hold in trust. If the legislature intended that the statute should be readily side-stepped and a trust with a different name established by parol proof whenever an oral promise, made without fraud and in absolute good faith, to hold in trust or reconvey is broken, there appears to have been very little reason for adopting the provision above quoted from the Statute of Frauds — or even mentioning express trusts — because when the provision to reconvey is not broken there is no occasion for bringing action; and when it is broken the court can simply allow the parol proof and establish a constructive trust which is just as effective as an express trust.
The language of certain courts that the Statute of Frauds is inapplicable because such use of the statute would permit a grantee or devisee to benefit by his own fraudulent conduct and that the statute was not intended to be used as an instrument of fraud is very pertinent where the trustee obtained the property or conveyance by fraudulent practice. In such a case the trust was at its inception a constructive as well as an express trust although the defrauded person *Page 497 
being unaware of the fraud and relying upon the express promise which was fraudulently made thought that only an express trust had been created; but when said language is applied to express trusts the courts are simply begging the question. They assume that a promise to hold in trust or reconvey has been established when the only proof available is not admissible.
If a trust is simply an express and not a constructive trust at its inception it remains merely an express trust; its name and character do not change, thereby making the obligation a constructive trust, when the trustee merely refuses to keep his agreement.
It is sometimes stated that the above provision of the Statute of Frauds does not bind courts of equity. Whom was the provision intended to bind if not courts of equity? Does any other court enforce either express or other trusts? I assume that courts of equity are bound as much as any other court by positive legislative injunctions intended for their respective guidance.
In Industrial Trust Co. v. Colt, 46 R.I. 319, there was a written memorandum signed by Mrs. Colt, the trustee, in which she acknowledged that she was obligated by the "arrangement" with her husband to pay, from the income received from him under a deed of trust, "$500 or over a month to the boys" who, by the action, were seeking to enforce the trust against her guardian after she had become mentally incompetent. Perhaps the trust which was established should have been called an express rather than a constructive trust. Without the written memorandum I doubt that a trust would have been established.
No fair-minded person can fail to be in sympathy with the endeavors which courts have made to establish trusts when satisfied that a conveyance without consideration, — and not intended as a gift, — was obtained without fraud by a person who at the time of the conveyance intended to keep his agreement to reconvey. Perhaps it would be wise to repeal the statutory provision and rely upon the court to *Page 498 
require very clear and convincing evidence of the oral promise to hold in trust, but while the intention of the legislature remains as expressed by statute courts should not ignore that intention and thereby abrogate the statute.
(Mr. Justice BARROWS being ill did not sit in either of these causes.)
RATHBUN, J, concurs in the result.