Court Opinion

ID: 3549410
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:02:40.854821+00
Date Added: 2024-06-11T14:06:34.132245
License: Public Domain

The facts sufficiently appear in the opinion.
The plaintiff conveyed certain real property described in the complaint to his father-in-law, the appellant. The deed of conveyance *Page 161 
states that it was made in consideration of the sum of one thousand two hundred dollars. Plaintiff claimed, and the court and jury found, in substance, that the title to the property was conveyed to the appellant, without consideration, upon his promise to hold it in trust for the benefit of the plaintiff, and, in case of the plaintiff's death, for the benefit of his infant daughter; and that the conveyance was made because of the confidential and influential relation which existed between the parties. A decree was entered in favor of the plaintiff, requiring the defendant's son, who was also a defendant in the case, and who received the title to the property without consideration, to make a deed of conveyance thereof to the plaintiff.
Appellant claims that parol evidence was inadmissible to prove the trust. The claim is based upon the statute of frauds. The statute provides: "No estate or interest in lands * * * nor any trust or power over or concerning lands or in any manner relating thereto, shall hereafter be created, granted, assigned, surrendered, or declared, unless by act or operation of law, or by deed or conveyance in writing, subscribed by the party creating, granting, assigning, surrendering or declaring the same. * * *" (Sec. 2624, Gen. Stat.)
If the statute is applicable to the case, the trust is void, because it is an express trust, established by parol evidence only. Nor is the trust one arising by act or operation of law, within the meaning of the statute, for the law never implies a trust when there is an express one declared by word or writing. (2 Washb. Real Prop. 470;Dennison v. Goehriny, 7 Pa. St. 175.) But the statute of frauds has no application.
The plaintiff conveyed the property to the defendant because of the confidence reposed in him, without consideration other than he should hold it subject to the trust mentioned. If defendant were permitted to retain it, plaintiff could be defrauded, and the statute, which was intended to prevent frauds, would be the means for the accomplishment of a fraud. To prevent such a result, equity raises a constructive trust in the grantee and in favor of the grantor.
In the case of Cox v. Arnsmann,76 Ind. 212, a husband and wife conveyed land to a person without other consideration than that he should immediately reconvey it to the wife. It was held that the land was taken in trust for the wife. The court said. "The trust in the present case, being an express trust *Page 162 
in relation to land, cannot be proved by parol without violating the statute, unless there is some equitable rule of construction which takes such a case out of the statute. There are in equity certain trusts called `constructive trusts,' which do not arise by implication of law. They are not resulting trusts, but are said to be in the nature of resulting trusts. (Perry, Trusts, Secs. 240, 241.) Thus, equity will raise a constructive trust to prevent a fraud. (2 Washb. Real Prop. 476.) And whenever property is acquired by fraud, or when, though originally acquired without fraud, it is against equity that it should be retained by the party, then equity raises a constructive trust, which is held to be not within the statute (Id. 482), and which may be proved by parol. Thus, in the case of Hayden v. Denslow,27 Conn. 335, there was an agreement between father and son, by which the son was to convey land to the father, and the latter was to hold it in trust for the son's wife. It was held that, when a deed is given and received for such a purpose, a constructive trust arises, which will be enforced in equity, and that the facts out of which such trust arises may be proved by parol. So, in the case ofHoge v. Hoge, 1 Watts, 163, it was held that, if a testator be induced to make a devise, by the promise of the devisee that it should be applied for the benefit of another, equity, upon these facts, would create a constructive trust, which might be established by parol."
Another case similar in principle is that ofWood v. Rabe, 96 N.Y. 422. In that case, as in this, the trust was oral. The court said: "But, being oral, the trust was void, within the sixth section of the statute, unless the transaction constituted a trust by implication or operation of law, and was, therefore, within the exception in the seventh section. It is not easy to ascertain from the adjudged cases the exact scope of the exception in the statute, Car. 11, of trusts arising by `implication or construction of law,' or of the equivalent exception in our statute of trusts arising by `implication or operation of law.' It is not difficult to name trusts which unequivocally are trusts arising by implication or operation of law. Trusts arising from the presumed intention of the parties, indicated by their acts, although not expressly declared, and those arising from the application of some settled principle of equity to the situation, furnish many instances of implied or constructive trusts. Resulting trusts at common law arising from the payment of purchase *Page 163 
money, or when the trust is not declared, or is declared only in part, or for any reason fails, are illustrations of the former class, and those arising by equitable construction, independently of intention, from dealings by trustees orquasi trustees with trust property, furnish many examples of the latter.
But there is a large class of so-called `constructive trusts,' or trusts ex maleficio, where courts of equity treat the holder of the legal title to land as a trustee, and, through the medium of an assumed trust, male that title subservient to the circumvention of fraud and the attainments of justice. Trusts of this character are not, I assume, within the exception in the statute. * * * (But seeDavies v. Otty, 35 Beav, 208; Seichrist's Appeal, 60 Pa. St. 237.) So, where a trust is sought to be established from the violation of an oral agreement purporting to create a trust, and a court of equity upholds the trust, and enforces specific performance, the trust is not an implied or constructive trust within the statute. (See Bellasis v. Compton, 2 Vern. 294.) The court in granting relief in case of an oral agreement proceeds upon the ground of fraud, actual or constructive, and enforces the agreement notwithstanding the statute, by reason of the special circumstances."
The two principles upon which equity proceeds in this character of case are thus stated: "One is that it will not permit the statute of frauds to be used as an instrument of fraud; and the other that when a person, through the influence of a confidential relation, acquires title to property, or obtain an advantage which he can not conscientiously retain, the court, to prevent the abuse of confidence, will grant relief." (Page 425.)
Some of the decided cases hold that trusts arising out of facts similar to those of the present case arise by implication or construction of law, and are, therefore, within the exception in the statute of frauds; others, that such cases do not fall within the exception; but all agree that either by the exception, or not notwithstanding the statute of frauds, relief may be granted in a proper case. Appellant also claims that if any trust was established it was for the benefit of plaintiff's daughter, and for himself. "The complaint alleges a trust in favor of the daughter; and also a trust for the benefit of plaintiff, and, in the event of his death, then for the benefit of his daughter. The pleading is ambiguous in this respect, but the objection was *Page 164 
not taken, and the evidence was sufficient to support the finding of fact upon this point. The judgment and order are affirmed.