Court Opinion

ID: 3513805
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:24:56.8556+00
Date Added: 2024-06-11T14:17:54.699497
License: Public Domain

We are to decide whether this land can be sold under an execution on a judgment against the appellee's husband. The legal title to the land is vested in the appellee by a deed to her from her husband, but, as that deed was made after the rendition of the judgment on which this execution was issued, it cannot be invoked by the appellee against the lien of that judgment.
The appellee purchased the land in controversy from the Grenada Bank, agreeing to pay therefor $500 on the execution of a deed thereto and an additional sum in deferred payments to be evidenced by promissory notes. She paid the $500, but requested Adams, the bank cashier, to have the deed made to her husband and let the notes be signed by him instead of by her. Adams hesitated to accept the husband's notes, but, on the appellee's assuring him that she herself would pay the notes, he agreed thereto and the deed and notes were executed accordingly. The notes were paid when due by the appellee with her own money.
The appellee's claim is that when this deed to her husband was executed, he received the land thereby conveyed impressed with a resulting trust for her *Page 130 
benefit. If this is true, the court below committed no error in enjoining the sale of the land under the execution.
My reversing associates say that no trust here appears, but differ among themselves as to the reason therefor. Judge McGehee is in doubt on this question but thinks the decree of the court below should be reversed and the case remanded for trial on the appellee's claim (see Judge Ethridge's opinion) that the land is the homestead of herself and her husband. Judge Griffith is of the opinion that no trust here appears for the reason that the appellee had the title to the land placed in her husband's name for the accomplishment of a fraudulent purpose. Judge Ethridge, with whom I presume Judge Anderson concurs, says that the court below erred "in holding that the wife was entitled to a trust, and that the husband held as a trustee for her benefit."
I will have no occasion to hereinafter specifically refer to the opinions of Judges McGehee and Griffith, and what I have to say with reference to the opinion of the latter will appear in my discussion of Judge Ethridge's opinion, to which I now come.
I presume that the broad language of this opinion hereinbefore set forth should be limited to the facts of this case; and what is intended thereby is that no trust here results to the appellee which she could invoke against a party other than her husband, for the reason given therefor is, that as the claimed resulting trustee and the cestui que trust are husband and wife, the trust must have been evidenced under Section 1944, Code of 1930, by a writing signed and acknowledged by the husband and recorded, as a mortgage or deed of trust is required to be. That section is as follows: "A transfer or conveyance of goods and chattels, or lands, or any lease of lands, between husband and wife, shall not be valid as against any third person, unless the transfer or conveyance be in writing *Page 131 
and acknowledged and filed for record as a mortgage or deed of trust is required to be; and possession of the property shall not be equivalent to filing the writing for record, but, to affect third persons, the writing must be filed for record."
This holding is based on a fundamental misconception of the nature of a resulting trust, of when, and from what sources, it arises, and is applicable only to an express trust.
"A resulting trust arises where a person makes or causes to be made a disposition of property under circumstances which raise an inference that he does not intend that the person taking or holding the property should have the beneficial interest therein, unless the inference is rebutted or the beneficial interest is otherwise effectively disposed of." 2 Rest. Trusts, Sec. 404. It is a creation of equity to carry out the presumed intention of the parties to a transfer of property. Robinson v. Strauther,106 Miss. 754, 64 So. 724; Maas v. Sisters of Mercy, 135 Miss. 505, 99 So. 468.
"Where a transfer of property is made to one person and the purchase price is paid by another, a resulting trust arises in favor of the person by whom the purchase price is paid," 2 Rest. Trusts, Sec. 440, unless the person "by whom the purchase price is paid manifests an intention that no resulting trust should arise," op. cit., Sec. 441; or the placing of the legal title to the property in one other than the one who pays therefor is for the accomplishment of an illegal or fraudulent purpose, op. cit., Sec. 444. So say all of the authorities, including numerous decisions by this Court, many of which are collated in Cannon v. Holberg Mercantile Company, 108 Miss. 102, 66 So. 400; Moore v. Moore, 74 Miss. 59, 19 So. 953; and all of them in the Mississippi annotations to 2 Rest. Trust, Sec. 440. See also 65 C.J. 382 and 26 R.C.L. 1216. All that is necessary to create such a trust is that the purchase money for the property, the title to which is *Page 132 
placed in another, shall be paid or agreed to be paid at or before the deed to the property is executed.
A resulting trust does not depend on a promise therefor, and may arise though no such promise was made. Maas v. Sisters of Mercy, supra, and the transferee did not know of the transfer of the property to him. A trust always arises, it matters not what the relationship of the parties may be (including husband and wife, Greaves v. Atkinson, 68 Miss. 598, 600, 10 So. 73; Shrader v. Shrader, 119 Miss. 526, 81 So. 227), "where a transfer of property is made to one person and the purchase price paid by another," under the facts and circumstances that here appear. Authorities, supra.
The appellee not only did not manifest an intention that no resulting trust should arise, but, on the contrary, clearly indicated that the title to the property was intended only to be temporarily in her husband, the beneficial interest to remain in her. If she had the legal title to this land placed in her husband for the purpose of defrauding her creditors, no resulting trust in her favor would arise. Snider v. Udell Woodenware Co.,74 Miss. 353, 20 So. 836. The evidence bearing on her purpose in so doing discloses without conflict therein that she was engaged in the mercantile business; and if she signed the notes for the deferred payments on the property, and became thereby liable for the payment thereof, she would have to disclose this liability in making her financial statements when requested or required so to do for the benefit of persons from whom she purchased her stock in trade, and to that extent her credit would be impaired. No claim is here made that she intended thereby to defraud her creditors or any other persons, or that any harm resulted to anyone therefrom. Because of the fact that the grantee in the deed to this property was the appellee's husband, no resulting trust arises unless she indicated when or before the deed was made that the payment by her of the money therefor was not *Page 133 
intended as a gift or advancement to him. That she so indicated clearly appears from the evidence.
As the appellee paid $500 of the purchase money for this land at the time the deed to her husband was executed, under Shrader v. Shrader, 119 Miss. 526, 81 So. 227, and all of the authorities, a resulting trust for her benefit arises to that extent. In order for this resulting trust to be increased by the payment by her of the deferred payments for the property, she must have promised to make these payments when or before the deed was executed. Her promise so to do was made when the deed was executed.
In Judge Ethridge's opinion there appears an obiter dictum that were Sec. 1944, Code of 1930, left out of view, a trust would here result to the extent of $500 cash paid by appellee for the land, but not as to the deferred payments made by her thereon, for the reason that she had not obligated herself legally to make these payments. This is not given as another reason for reversing the decree of the court below. If Sec. 1944 of the Code should be held not to apply, the opinion admits that a trust would here result to the extent of $500; and if this be true, the decree of the court below would be affirmed. If the land is held in trust to any extent for the appellee by her husband, it cannot be sold under an execution on this judgment against him. The judgment creditor would have to resort to a suit in equity for that purpose, wherein her rights, as well as those of the judgment creditor, would be protected.
In what the illegality of the appellee's promise to make these deferred payments consists, is not stated in this opinion, but I presume it is supposed to rest on the fact that her promise was verbal, not written, and therefore unenforceable under some of the sections of the Statute of Frauds. Sec. 3344 et seq., Code of 1930. A promise in the form required by the Statute of Frauds is not illegal, but simply unenforceable over the objection of the *Page 134 
promissor. As this dictum is without effect here, I shall not pause to discuss it except to say that I do not agree thereto and am content to rest for the present on 2 Rest. Trusts, Sec. 456, and comments and illustrations thereunder; Crowley v. Crowley,72 N.H. 241, 56 A. 190; and Gerace v. Gerace, Mass., 16 N.E.2d 6, 117 A.L.R. 1459 (cf. Shrader v. Shrader, supra, and Bush v. Bush,134 Miss. 523, 99 So. 151), and also to say that none of the cases cited by my reversing associates sustain this dictum. The form by which the facts and circumstances creating a resulting trust is evidenced, is of no consequence. This land was conveyed to the appellee's husband solely on her credit, — on her promise to pay therefor, which promise she kept. To hold that this promise to her grantor, in order to be effectual against the grantee, must have been in writing would be to furnish a like grantee in other cases with a shield to protect him in declining to recognize the trust and thereby commit a fraud — a moral wrong.
Sec. 1944, Code of 1930, can have no application here for this trust does not rest on any transfer or conveyance of the land to the appellee from her husband. It rests on the facts and circumstances under which the deed from the Grenada bank to him was made. That deed, in equity, conveyed no beneficial interest in the land to him, for, in equity, the entire beneficial interest therein vested in the appellee as a resulting trust atthe moment that deed was executed. This being true, the appellee's husband has no interest in the land to be sold on an execution on this judgment. 2 Rest. Trusts, Sec. 308; Cannon v. Holberg Mercantile Company, supra, and authorities there cited. Sec. 3348, requiring declarations of trust to be in writing and recorded to be effective as such, expressly provides, "but where any trust shall arise or result, by implication of law, out of a conveyance of land, such trust or confidence shall be of the like force and effect *Page 135 
the same as it would have been if this statute had not been passed."
The decree of the court below should be affirmed; but, if it is to be reversed, a final decree should be rendered here for the appellant unless some question remains to be tried and determined in the court below. Two such questions are said to appear: (1) Whether the appellee should be subrogated to the mortgage on the land paid off by her; and (2) whether the land is a homestead, and of not more than three thousand dollars in value after deducting the mortgage thereon from its actual value.
No claim to such subrogation appears in the appellee's bill of complaint and could not be made unless she had an interest in the land to protect when she paid off the mortgage.
The second question is brought into the case by the overruling of Clark v. Edwards, 180 Miss. 97, 177 So. 361. I concur in overruling that case, but have this to say thereon:
1. It does not appear from the amendment to the bill of complaint whether the mortgage on the land was executed before or after the appellant's judgment was rendered. If it was executed subsequent to the judgment, the lien of the judgment would not be affected thereby. When the judgment was rendered, it was a lien on the land to the extent of its value in excess of three thousand dollars, and this lien could not thereafter be voluntarily impaired, by the judgment debtor, by the execution of a mortgage on the land. This defect in the amended bill seems not to have been challenged in the court below, and, if challenged, can be cured by amendment. Cf. Le Blanc v. Illinois Central R. Co., 73 Miss. 463, at page 469, 19 So. 211.
2. The appellee by withdrawing her amendment to her original bill of complaint (see Judge Ethridge's opinion), removed the homestead question from the case, and, technically, is not now entitled to a remand of the *Page 136 
case in order that she may again present that question. This withdrawal, however, having been caused by an erroneous decision of this Court, may be said not to have been voluntary, and justice seems to require that she be not held to it.
3. Clark v. Edwards, supra, correctly interpreted Sec. 1765, Code of 1930, the homestead exemption statute, and what I shall now say is only supplementary to what was there said, and this opinion should be read in connection therewith.
Section 1765, Code 1930, is as follows: "Every citizen of this state, male or female, being a householder, and having a family, shall be entitled to hold exempt from seizure or sale, under execution or attachment, the land and buildings owned and occupied as a residence by him or her, but the quantity of land shall not exceed one hundred and sixty acres, nor the value thereof; inclusive of improvements, save as hereinafter provided, the sum of three thousand dollars." The question here is, and in Clark v. Edwards, supra, was, the meaning to be given the words "the value thereof" in this section. Do they mean the value of the land itself or the value of the owner's interest therein — here his equity of redemption. The statute provides that the "quantity of the land shall not exceed one hundred and sixty acres, nor the value thereof, . . . the sum of three thousand dollars." The word "thereof" manifestly refers to the preceding words "the land," so that the words "the value thereof" mean "the value of the land." The three-thousand-dollar value provision of the statute is not of itself alone a grant of an exempt value of that sum. The entire one hundred and sixty acres, regardless of value, would be exempt except for the three-thousand-dollar value provision; consequently, that provision is simply a limitation on the exemption granted of one hundred and sixty acres of land.
But it is now said in effect, that Section 1772, Code 1930, requires the words "the value thereof" to be interpreted *Page 137 
as meaning the value of the owner's interest therein in determining which debts due by the owner, secured by a lien on the land, should be deducted from the value of the land. The words of the statute said to necessitate this interpretation are, "if the same [referring to the land claimed as a homestead] shall bring [at an execution sale thereof] a greater sum than the exempt value." This excerpt from the statute does not define the words "exempt value," but manifestly refers to the exempt value provided in Section 1765 of the Code; and when we turn thereto, we find, as hereinbefore said, that the exempt value is of the land itself — not the owner's interest therein — not to exceed the sum of three thousand dollars. That Section 1772 does not change the clear meaning of Section 1765 is so obvious that I will not further discuss it.
Clark v. Edwards, supra, is in conflict with Koen v. Brill,75 Miss. 870, 23 So. 481, 65 Am. St. Rep. 633, which case was not considered when the former was decided. Had it then been considered, the division of the Court which decided the case would have either followed it or remanded the case to the Court in banc for decision by it. It is manifest from the opinion in Koen v. Brill, supra, that the decision was there based on an assumption by the Court of the meaning of the statute without having given it mature consideration. None of the provisions of the statute were specifically referred to, and no attempt was made to justify the court's interpretation of it. The case, however, was decided forty years ago, and the statute there construed, Section 1970, Code of 1892, Section 1765, Code of 1930, had been twice re-enacted by the legislature, with its then interpretation, when Clark v. Edwards, supra, was decided. Consequently, I do not think it should have been there departed from, or that it should be now overruled.
In 1938, the legislature amended Section 1765, Code of 1930, so as to provide "that in determining this value, *Page 138 
existing encumbrances on such land and buildings, including taxes and all other liens, shall first be deducted from the actual value of such land and buildings." Chapter 125, Laws of 1938. This amendment to the statute, however, can have no retroactive effect and could not be invoked by the appellant here.
McGowen, J., concurs in this opinion.