Court Opinion

ID: 6596205
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:03:04.908311+00
Date Added: 2024-06-11T15:57:50.790240
License: Public Domain

ON PETITION FOR REHEARING.
Counsel for W. R. Fitch, in his petition for a rehearing in this case, contends that a trust is not created in the absence of payment of purchase money. This, however, depends on the circumstances of each particular case. In *68Nease v. Capehart, 8 W. Va. 95, it was held tnat: “When a debtor has conveyed land to a trustee to secure a debt, and afterwards another person and the debtor agree that the former shall purchase the land, and hold it as a security for the purchase money he pays, and accordingly the debtor acquiesces, and the other purchases the land, the transaction constitutes a trust, which a court of equity will enforce, ” The case just cited was instituted to enforce a parol contract, and no money was paid to the party who agreed to purchase the property and hold for the trust debtor. The case of, Heiskel v. Powell,, 23 W. Va. 717, relied on by petitioner to show that t-he agreement must be followed by payment of money in order to create a trust, is very different in its facts from the one under consideration. In this case when the interest of Potts was to be assigned to him, and he was ready and willing to pay for the one-fourth interest, he was met by the false and fraudulent statement máde by Fitch that he had already conveyed one-half to Lowther, his father-in-law, and that, if he conveyed to Potts one-fourth, he would have none left for himself, and thereby induced Potts to accept one-eighth. Browne, St. Frauds, § 448a,, quotes from Glass v. Hulbert, 102 Mass. 35, as follows: “The fraud,” says Judge Wells in Glass v. Hulbert, “most commonly treated as taking an agreement out of the statute of frauds is that which consists in setting up the statute against its performance after the other party has been induced to make expenditures, or a change of situation in regard to the subject-matter of the agreement, or upon the supposition that it was to be carried into execution, and the assumption of rights thereby to be acquired; so that the refusal to complete the execution of the agreement is not merely a denial of rights which it was intended to confer, but the infliction of an unjust and unconscientious injury and loss. In such cases the party is held, by force of his acts or silent acquiescence which have misled the other to his harm, to be estopped from setting up the statute of frauds.” The fraudulent representation of Fitch in this case induced Potts to change his situation in regard to the subject-matter by accepting ohe-eighth instead of one-fourth, and for that reason tie is estopped from, setting up the statute of frauds. Nothing was said about the original agreement being made as to the *69seventy-four-acre tract when one-fourth was assigned to Thompson, one-fourth to Lowther, and one-eignth to Potts. They each were assigned portions of the ten-acre tract, and the fact that the Wood well was a producer was carefully concealed from Potts. In the case of Campbell v. Fetterman, 20 W. Va. 398, it is held that collateral cir cumstances attending the agreement, and mistake or fraud in the procurement or execution of the agreement, may be proved by parol evidence. See, also, 1 Pom. Eq. Jur. § 431, note 3. Herm. Estop, p. 1072, § 946, says: Estoppels in fiáis are well founded when confined to the legitimate purpose of preventing one man from being injured by the acts or misrepresentations of another.” See, also Bige-low, Estop. 712, where it is said, “It is everywhere conceded, indeed, that the title to land can be affected by es-toppel in fiáis arising from fraud.” It is so apparent that the false representations made by Fitch were induced by the fact that he had heard that the Wood well was a producer, and for that reason he wanted to retain as much of this lease as possible, and made these fraudulent representations, that his reliance upon the statute of frauds cannot avail him. Story, in his Equity Pleadings (section 767), thus states the law: “Whatever may be the doubts in some cases of trust, it seems clear that, where the bill sets up a parol trust, the nonperformance of which would be a fraud upon the plaintiff, or where the parol trust is a secret trust, alleging to be in fraud of the public policy of the country, a pure plea of the statue will not prevail; for the statute will never be allowed to cover fraud.” See, also, Haig v. Kaye, 7 Ch. App. 469, where it is held that “the statute of frauds cannot be used by a defendant to cover a fraudulent act.” It is true that in the case of Nash v. Jones, 41 W. Va. 769, (24 S. E. 592), in one point of the syllabus it was held that, “where a man merely employs an agent to buy an estate, who buys it for himself, and denies the trust, and no part of the purchase money is paid by the principal, and there is no written agreement, he cannot compel the agent to convey the estate to him, as that would be in violation of the statute of frauds;” but in that case the facts were materially different from the case at bar, for Potts did not employ Fitch as his agent to buy an estate, but Potts, Lowther, and Thompson agreed to go *70in with Fitch, and purchase this lease for forty dollars, each to take one-fourth, and for convenience the lease was assigned to Fitch alone, and, no doubt, Fitch intended in good faith to assign a fourth of each of the other three, and would have done so had not the Wood well near by come in a producer. Then he conceived the idea of defrauding Potts out of one-half of his interest by falsely claiming that he had conveyed one-half to Lowther, his father-in-law, and would have none left for himself if he assigned one-fourth to Potts. The statute of frauds will not avail Fitch to cover this fraudulent act, or protect him from its effects.
For these reasons the rehearing should be refused.

Reversed.