Court Opinion

ID: 6139385
Source: CourtListenerOpinion
Date Created: 2022-02-05 14:31:02.968362+00
Date Added: 2024-06-11T08:54:34.005024
License: Public Domain

The Surrogate.
Patrick Tracy purchased three lots on Sheriff-street, in this city, and the deed was taken in the name of his brother Edward. Edward sold two of the lots,and part of the proceeds was deposited in the Savings Bank and part invested on bond and mortgage. The last sale was made in December, 1841—and at that time he told a respectable and credible witness that the lot which he had just sold was really the property of his brother Patrick, and that he was about to invest the proceeds then in his hands for his brother’s use. Edward left the city shortly after, and never having been heard from, administration was granted on his estate. Patrick Tracy now claims that investment as his property. Edward Tracy was in humble circumstances, and there seems to be no room for doubt, upon the evidence of several witnesses, that he held the property in question in trust for Patrick, who at the time was confined in the States Prison, from which he was subsequently released by pardon. A question has been raised as to the competency of parol evidence to establish such a trust, and that in fact involves the whole controversy; for if the evidence is valid, the case is proved.
By the provisions of our statute, 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, but the title shall vest, except as against creditors, in the person named as the alienee in such conveyance. 1 R. S. p. 728, §§ 51, 52, 53. The object of this rule was to *62prevent secret resulting trusts from being created by the act of the party claiming their benefit. (Revisers’ Notes, 3 R. S., 2d ed., p. 583. 1 R. S., p. 728, § 53.) It is obvious, therefore, that if the land standing in Edward’s name had not been sold, the mere fact of the payment of the consideration by Patrick would not have established a resulting trust. ISTor could any interest in the land attach to Patrick by force of a parol agreement, (2 R. S., p. 134, § 6, 7. Brewster vs. Power, 10 Paige, 568), unless the circumstances were such as to raise a trust by implication or operation of law.
The question still remains, however, whether Patrick having advanced the purchase money, Edward was not liable for the amount advanced, or for the proceeds of the estate after it was sold. I do not think the naked fact of advancement would establish a liability. The purchase money was not advanced with any expectation of a return, or of creating a debt, or an obligation on the part of Edward Tracy to repay; and the law having declared there should be no trust as to the land, it makes the title of the grantee absolute, and freed from any trust to account for the proceeds or value.
But although an action would not lie for the recovery of the purchase money, or the proceeds, on the mere ground of advancement, yet the fact that Patrick Tracy paid for the land formed, in the language of the Supreme Court, in a case somewhat similar, (Proseus vs. McIntyre, 5 Barb. S. C. R., 424.) “ a good moral or conscientious consideration for a parol agreement” to account for the proceeds. If the fact of payment of the consideration by Patrick stood alone, there would be. no recourse or remedy—but when that is followed by the declaration of Edward, that the proceeds were not his property, but belonged to Patrick, there seems to me enough to sustain a contract or agreement to hold the proceeds in trust. Although the statute declares the resulting trust in the lands void, that appears to be no reason why the trust should not be sustained as to the proceeds, when the evidence shows clearly an acknowledgment of the trust in those very funds, after the lands had been sold. The section of the stat*63nte which declares void “ every grant or assignment of any existing trust in lands, goods, or things in action, unless the same shall be in writing,” (2 R. S., p. 137, § 2), in its terms, and according to the intention of the legislature, does not refer to the creation of a new trust, but only to the assignment of an existing trust. The Revisers say, in their note to this section, that the 6th section of title 1, chapter 7, of the Revised Statutes, “ provides for the creation of trusts in land—and that a trust in personal property may be created by parol, has never been doubted.” (3 R. S., p. 658.) (See also Bailey vs. Boulcott, 4 Russ. C. R., 345. Benbow vs. Townsend, 1 M. & K., 506. Fordyce vs. Willis, 3 Brown’s C. C., 576.) The case then stands thus:—The intestate at the time of his decease was possessed of certain moneys. It is proved satisfactorily that he declared and acknowledged, freely and repeatedly, that the moneys were the property of his brother Patrick, and were the proceeds of lands, for the purchase of which Patrick had advanced the consideration money. It is proved, that he declared an intention to invest them for his brother’s benefit, and that he did not claim them as his own—the investment in his own name, under the circumstances, being quite consistent with the objects of the trust. There seems to me no reason why the failure of the parties to put this in writing should defeat justice. The law permits a trust as to personal estate to be proved by parol; a good consideration is shown; and although a case of this kind should be received with suspicion and be carefully scrutinized, yet when the facts are well established beyond a doubt, the trust will attach to the property, in consonance with the understanding and agreement of the parties. The disappearance of Edward a short time after this transaction, sufficiently accounts for the lapse of time intervening before the claimant has been able to present his case for judicial determination—and but for that circumstance, there is no ground for supposing the existence of the trust would ever have been controverted. I do not understand that any doubt is entertained as to the facts, and *64indeed it was suggested on the trial, that it was unnecessary to accumulate evidence beyond what" had already been adduced. Being of opinion that there is no technical rule of law in the way of the claimant, and that it is competent to prove a declaration of trust in the proceeds of the lands and their investments, by parol, provided such declaration was made after the land had been sold and .converted into money, I must decree that the trust has been proved and satisfactorily established.