Court Opinion

ID: 4926405
Source: CourtListenerOpinion
Date Created: 2021-09-24 00:57:23.619912+00
Date Added: 2024-06-11T08:14:21.441065
License: Public Domain

Weston J.
at a subsequent term, delivered the opinion of the Court.
Waiving for the present the effect of the mortgage made by Brewer to Downes, in April, 1827, and its assignment to the de-. fondant, it becomes necessary to consider, whether, while Downes held the land jn controversy, he held it in' trust for Brewer, There was jio declaration of trust in writing, and if any existed, it must have been what is termed in law a resulting trust. As jurisdiction of trusts generally, without qualification or exception, is given to this Court, wherever they arise, according to the settled practice of a court of equity, they must be recognized and enforced. Sugden, in his law of vendors, 443, Philadelphia edition, states the law to be, without a single exception, bearing upon this point, that if one man purchase an estate in the name of another, a trust results to him, who advances the purchase money. He cites a large,number of authorities to sustain his position, to which cases in this country are added by the American editor. It is treated by Chancellor Kent, in Boyd v. McLean, 1 John. Chan. 582, as a well known and a universally admitted rule in equity. As it is not controverted by the counsel for the defendant, it cannot be necessary to advert further to the authorities. But it is a well settled part of the doctrine, that it should appear *24that the payment, from which the trust results, was a part of the original transaction, at the time of the conveyance; and that it cannot arise from subsequent payments. It is further holden that the facts creating the trust must be clearly and fully established; to prove or to repel which, parol testimony is admissible.
It is contended that, as in the deed from Munroe to Downes-, it is recited that the consideration was paid by the latter, parol evidence is not to be received in contradiction to the deed, unless in case of fraud, to prove that it was paid by Brewer. Upon this point, the case of Botsford v. Burr, 2 John. Chan. 405, is cited. The plaintiff there relied upon the assignment of a note to the defendant, in addition to other testimony, to establish a resulting trust. It was holden that it could not have that effect, it being subsequent to the original transaction. The Chancellor further states that the formal assignment of that note to the defendant by an instrument under seal,' could not be contradicted by parol. But in the case of Boyd v. McLean, Chancellor Kent went into an elaborate consideration of the point raised, whether such a resulting trust be within the statute of frauds, and whether the fact, on which the trust arises, may be shown by parol proof in opposition to the language of the deed, and even in opposition to the defendant’s answer. And although he admits that such evidence may be dangerous in its consequences, he felt himself constrained to come to the conclusion that such proof was admissible in courts of equity. The Chancellor examines the cases with his usual ability, and without going over the same ground, which we cannot regard as necessary, we find ourselves compelled by the weight of authority to adopt the same opinion, however distrustful of its policy. In this case however, in the transactions between Brewer and Downes, there was an attempt to put the property out of the reach of the creditors of the former, in a manner which is deemed fraudulent in law. And of this, the defendant, taking an assignment of the fictitious mortgage, without consideration, could not be ignorant.
In regard to the circumstances attending the conveyance from Munroe, there is no conflict of testimony. Brewer made the bargain with him, gave his notes for the purchase money, with Downes as his surety, and by his request the deed was made to *25Downes, who held the land only as security for what he might have to pay, and for what he might advance. Had Downes lent the money to Brewer to pay Munroe, and taken the deed in his own name for security, it would have been a payment of the purchase money by Brewer, to whom a trust would have resulted. So it was decided in Boyd v. McLean, upon such a state of facts. In this case Downes did not in the first instance lend the money, but lent his name to Brewer as surety. Shall he be held a trustee if he lends money, and shall he hold the land free of the trust, if he only lends his credit ? There is no ground in reason or justice for such a distinction. He always regarded Brewer as the purchaser, and the real debtor of Munroe; and that the land was conveyed to him to secure any sum he might have to pay as Brewer’s surety. The defendant, at the request of Brewer, paid to Botones the money he paid to Munroe. At the time of the original transaction with Munroe, Brewer was the purchaser, his note was accepted with such surety, as he had it in his power to offer. This was virtually payment at the time. If upon this security the deed had been made to Brewer, and he failing to pay, Downes had been called upon and paid, could it be said that a trust resulted to Downes, from the payment of the consideration ? If so, every man, who signs as surety for another, for the consideration, in the purchase of real estate, will be secured by a resulting trust, if he has to pay the money. And yet this cannot be pretended. The question who is the purchaser, does not depend upon who is ultimately compelled to make actual payment. If the surety pays, he will be entitled to be reimbursed, upon the implied assumpsit of the principal; hut he has no lien, trust or interest in the land, unless it has been conveyed to him, and then he will hold it only, as in Boyd v. McLean, by way of pledge.
If the consideration was paid or secured to Munroe by Brewer, a trust resulted to Brewer, while the land was in the hands of Downes, charged with his claim for indemnity. Had the defendant notice of the trust ? He denies that he himself was to hold the property in trust for Brewer, or that there was any agreement or understanding between them to this effect, but he was apprized and does not deny, that Downes was ready, upon being indemni*26fied, to convey at the request of Brewer. He did so. The defendant received the conveyance by Brewer’s procurement and direction. He denies any knowledge of the plaintiff’s title; but does not deny that Brewer had an interest in the property, after paying the amount of Downes’ claim. He knew that was less than seven hundred dollars, and that the property was worth more than fifteen hundred dollars. Indeed he admits that he was induced to take the conveyance, to avail himself of the excess of value, over what he would have to pay to Downes, to indemnify himself from loss incurred, or apprehended, from Brewer’s firm. With regard to the legal title, he was truly informed that it was absolutely in Downes; but from the bill and answer, aside from the proof, it is not going too far to hold that he had notice that Breiver had a valuable trust interest in the land, which had been conveyed to Downes.
If we look at the proof, the existence and notice of the trust is. very clearly established. An objection is made to the testimony of Brewer as an interested witness. If the plaintiff prevails, the excess in value, beyond the amount paid by the defendant, will go> in discharge of Brewer’s debts. And if the defendant prevails, the same consequence will follow; as it is then to be applied, as the defendant admits, to the payment of his claims against Brewer. The witness has other inducements to sustain the title of the defendant. He is his relative. He has been permitted to enjoy the property without payment of rent; and he may expect further accommodation. The objection to the witness is overruled. Downes, in his deposition, declares that he held in trust. That he was dissatisfied with his situation, and requested Brewer to get some one to take his place, who thereupon brought in the defendant, to whom he conveyed at Brewer’s request, but that he did not tell the defendant that he held the land exclusively for Brewer’s benefit. How far Downes had an interest, tire defendant was apprized by the amount of his claim, and the residue he could not but see, he held subject to the direction of Brewer. The mortgage, Brewer to Downes, tvas assigned to the defendant also at the request of Brewer, without consideration, and this was a circumstance strongly indicating that Downes held in trust for him.
*27Brewer deposes, that Downes held the land for his benefit, that he told the defendant the situation of the property, and desired him to take it to assist him, informing him that Downes did not wish to have any thing to do with the land, and desiring him to take his place. He adds on cross-examination, that the defendant never agreed or promised to convey the land to him on payment of any sum whatever, and that he did not request him to take the property in trust for him, or any other person. The point we are now examining is, whether Downes held in trust for Br&ioer, and whether the defendant had notice of it. Taking the bill, answer and proof together, both these facts are made out beyond a reasonable doubt.
The defendant calls for proof of the consideration, for which the estate in controversy was conveyed to the plaintiff; and it is furnished by the deposition of Brewer, and the papers thereto annexed. It is objected that when the indenture was made, under which the plaintiff holds, Brewer had nothing to convey, the seizin being then in Artemas Ward; to this it is a sufficient answer, that Brewer was the assignee of the mortgagor, and was in possession, and that the right to redeem, either the equity sold on execution, or the legal estate, had not expired. In respect to the prior mortgage to Downes, it was so clearly fraudulent as to creditors, of which the defendant, who paid no consideration for it, must be holden to have had notice, that it does not stand in the way of the plaintiff’s title.
The defendant being chargeable with notice of the trust to Brewer, it was his duty to inquire, whether Brewer had conveyed it to a third person. He says, in his answer, that he did inquire of Brewer, who denied that he had made any such conveyance. To this he thought proper to confide. If he had examined the records, he would have found the deed to the plaintiff recorded more than a year before. If he did not take proper precaution and was deceived, he must abide the consequences.
But independent of this direct and obvious means of notice of the plaintiff’s title, and regarding him as unaffected with it at the time, he has suffered nothing from the want of it. He took the land, charged with the same trust under which Downes held it, of which he had notice. As to any interest of his own, beyond the *28amount secured to Downes, although set up in the answer, it is disproved by’ the entire silence of Brewer upon that point, by his continued possession, without payment of rent, and by the manner in which the defendant kept his accounts with him. The trust then with which the land was chargeable in favor of Brewer, would enure to the plaintiff in virtue of the indenture, whether the defendant had notice of it or not.
Upon these facts equity requires, that there should be refunded to the defendant all he has paid, with interest upon it, including the amount charged to the Brewer house, which being paid, it is ordered and decreed, that the defendant release to the plaintiff his interest in the land, subject to the trusts in the indenture of July twenty-first, 1829. But under all the circumstances, we do not award costs.