Court Opinion

ID: 8175502
Source: CourtListenerOpinion
Date Created: 2022-09-09 22:20:36.358313+00
Date Added: 2024-06-11T16:39:56.176738
License: Public Domain

PoeeeNBARGER, PRESIDENT,
(concurring) :
The bill alleges a conveyance by the plaintiffs and other heirs to Arm McConaughey of certain real estate upon the understanding and agreement that she should immediately execute to the grantors severally deeds, re-convejdng to them certain portions of the land so conveyed to her, reserving to herself life estates in the several tracts so to be reconveyed, and that the particular tract to be conveyed to the plaintiffs was described and identified and a deed for the conveyance thereof to them prepared for execution by the said Ann McConaughey. The conveyance to her was a step in the performance of an antecedent agreement for the partition of real estate among the grantors, subject to a life estate therein to the grantee. Ann McConaughey, under this agreement, was to act as a sort of conduit or agency for the exchange of titles in affecting partition, and the titles were to pass in and out of her instantaneously. It was upon this agreement that the conveyances were made to her. The bill does not allege that she took the land conveyed to her upon a trust for the grantors. It does not say she agreed to hold the lands for' them. It does not attempt to set up an .express parol trust in contradiction of the deed. It attempts to allege that she committed a fraud upon the grantors in refusing to perform a contract upon the faith of which the conveyances were made to her. The facts alleged in the bill and proposed to be established by parol evidence, if they were sufficiently alleged, constitute what, in law", is termed a con*557structive trust, a trust springing out of a fraud, and to such a trust the statute of frauds does not apply. The case is, therefore, not within the third point of the syllabus in Troll v. Carter, 15 W. Va. 567, but falls within the exception to the statute of frauds mentioned in points of the syllabus of that case, which says, among other things: “If a grantee in a deed has procured.it by fraud, he will be held by a court of equity to be a trustee of the-real owner.”
This is a principle almost as old as the Statute of Frauds itself. At an early day the courts established the doctrine that a statute which had been enacted for the purpose of preventing and suppressing frauds and perjuries could not be allowed to become itself an instrumentality or engine for the perpetration of' fraud. “A second well-settled and even common form 'of trust' ex maleficio occurs whenever a person acquires the legal title to» land or other property by means of an intentionally false and1 fraudulent verbal promise to hold the same for a certain specified1, purpose, — as, for example, a promise to convey the land to a designated individual, or to reconvey it to the grantor, and the like,. —and having thus fraudulently obtained the title, he retains, uses, and claims the property as absolutely his own, so that the1 whole transaction by means of which the ownership is obtained is-in fact a scheme of actual deceit. Equity regards such-a person-as holding the property charged with a constructive trust, and’ will compel him to fulfill the trust by conveying according to his-engagement.” 2 Pom. Eq. Jur. sec. 1055.
“The fraud against which equity will relieve, notwithstanding the statute, is not the mere moral wrong of repudiating a contract' actually entered into, which, by reason of the statute, a party is-not bound to perform for want of its being in writing. This was early laid down by Lord Macclesfield, Chancellor, in a case arising upon a promise of a defendant, about to marry, that his wife ■ should enjoy all her own estate, to her separate use after the marriage, which promise, as one made “upon consideration of marriage/ could not regularly be enforced. His lordship declared that fin cases of fraud, equity should relieve, even against the-words of the statute; as if one agreement in writing should be proposed and drawn, and another fraudulently and secretly orought in and executed in lieu of the former; in this or such like eases of fraud, equity would relieve; but where there is no» *558'fraud, only relying upon the honor, word, or promise of the defendant, the statute making those promises void, equity will not ■interfere/ ” Browne on Statute of Frauds, sec. 439.
“Parol evidence is admissible to establish a trust, even against ■a, deed absolute on its face, if it would be a fraud to set up the form of the deed as conclusive. Lord Hardwicke stated ‘that the ■court adhered to this principle, that the statute of frauds should never be understood to protect fraud, and therefore wherever a ..case is infected with fraud, the court will not suffer the statute to protect it/ Lord Thurlow added, that ‘the moment you im-peach a deed for fraud you must either deny the effect of fraud upon the deed, or you must admit parol evidence to prove it/ If •this was not so, the law would be reduced to this absurdity — if a -fraud could once succeed in procuring the transaction tea be re■duced to writing and signed by the parties, it would be protected 'by the law itself, and there would be no possible means of reaching and correcting the wrong. But in such case the bill must «contain a clear and distinct charge of fraud. Therefore, wheit-.ever the bill sets out a clear case of fraud, parol evidence will be .■admitted to prove it, even if the effect of such evidence is to contradict, vary, altar, or destroy written instruments. The mere refusal of a grantee to execute, or the denial of the existence of ■an invalid parol trust upon which she promised to hold the prop- • erty, is not such a fraud as will take the case out of the statute. But where a valuable interest passes to one on the faith of a contract he refuses to perform, equity will compel restitution or give ■other appropriate relief. In any case if the trust arises from the acts of the parties, and not exclusively from their agreements, the statute of frauds is not a bar to the proof.” Perry on 'Trusts, sec. 226.
But the bill is defective in this, that it fails to allege or charge •that the defendant, Ann McConaughey, fraudulently procured ■the making of said- conveyance to her. It should have charged •that she procured the making of said conveyance by falsely and fraudulently representing and promising that she would immediately reconvey a certain portion of the land in accordance wi th •the agreement of partition, and took said conveyance fraudulently intending, at the time, not to comply with her said promise to re-convey, and, with the like fraudulent intent, has refused to .comply with said promise. Manning v. Pippen, 95 Ala. 537; *559Alaniz v. Casenave, 91 Cal. 41; Pexry on Trusts, sec. 226. The bill only charges that, after having made this agreement, and obtained the conveyance in pursuance thereof, she refused to perform. This is not enough. Mere breach of the agreement does not raise a trust and take the case out of the statute of frauds. Browne on Stat. of Frauds, sec. 94a, 439. The same work, at sec. 441, says: “A simple illustration of the rule that when the Stat. of Frauds has been used as a cover to a fraud, equity will relieve against the fraud, notwithstanding its provisions, is found-in a case reported by Viner, and stated by him to have occurred in Lord Nottingham’s time, and to have been the first instance in which any equitable exception to the statute appears. There was a verbal agreement for an absolute conveyance of land, and for a defeasance to be executed by the grantee; but he, having obtained the conveyance, refused to execute the defeasance and relied upon the statute; but his plea was overruled, and he was compelled to execute according toi his agreement. Here the attempted fraud consisted not merely in refusing to do what he agreed, but in deceiving the plaintiff out of his property.. And the case is analagous to that put by Lord Maccelsfield, as falling within the rule, where one agreement in writing is proposed and drawn, and another fraudulently and secretly brought in and executed in lieu of the former.”
It may be that the facts set up in the bill, if established by -evidence, would sustain the charge of fraud. Browne on Statute of Frauds, sec. 94a, 439. But the bill ought to charge fraud in express terms. Nothing is to be considered here but the bill, as the case stands upon the ruling of the court upon the demurrer, and the count say the bill must contain a clear and distinct charge of fraud. Irnham v. Child, 1 Bro. Ch. 94; Portmore v. Morris, 2 Bro. Ch. 219; Forsyth v. Clark, 3 Wend. 637; Gouverneur v. Elmendorf, 5 Johns. Ch. 79; Kennedy v. Kennedy, 2 Ala. 571. In Troll v. Carter, 15 W. Va. 567, 583, Judge G-keeN directs particular attention to the want of any charge of fraud in the bill otc the evidence.
Intent is a necessary element of fraud in such case The agreement may have been made, and the conveyance taken, in good faith and with an honest intention to reconvey, and the fraudulent design oif dishonestly retaining the property or disposing of it in violation of. the agreement may have been formed *560afterwards. This would amount to no more than a breach of the agreement, and the bill alleges nothing inconsistent with such a state of facts. The court cannot assume that there was-fraud in the procurement of the conveyance. It must be alleged as well as proved. It is fraud in acquiring the title, not merely in the retention of it, that raises the trust.
If the evidence, establishing such fraud, were before the court,an amendment could be allowed, but the court cannot say whether an amendment would avail anything or not. Hence, under-the rule, the plaintiffs having declined to amend in the court below, the decree of dismissal must be affirmed.
For the foregoing reasons, I concur in the decision, but not hr all the reasoning of the opinion prepared by Judge McWhoeteR-