Court Opinion

ID: 6603578
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:10:04.535925+00
Date Added: 2024-06-11T15:58:06.355524
License: Public Domain

Cassoday, J.
Section 7, ch.- 84, R. S. 1858, provided, as section 2077, R. S., now does, that “ when a grant for a valuable consideration shall be made to one person, and the consideration therefor shall be paid by another, no use or trust shall result in favor of the person by whom such payment is made; but the title shall vest in the person named as the alienee in such conveyance, subject only to the provisions of the next section.” That section was copied from section 7, ch. 57, R. S. 1849. The purpose of the section is manifest from the “ next sectiontherein referred to, which made such conveyance presumptively fraudulent as against the creditors of the person paying the consideration, and provided that unless such fraudulent intent was disproved a trust should result in favor of such creditors. Section 8, ch. 57, R. S. 1849; section 8, ch. 84, R. S. 1858; and section 2078, R. S. The purpose clearly was to prevent a debtor from defrauding his'creditors by buying lands and paying for them with his own money, and taking the title in the name of another. By doing so, a debtor takes the risk of losing all claim to the land, and yet creating a resulting trust in favor of his creditors, enforceable by them. This statute was taken from the New York statute, and hence the adjudications in that state since its enactment there may be instructive. Garfield v. Hatmaker, 15 N. Y., 475; Wood v. Robinson, 22 N. Y., 564; McCartney v. Bostwick, 32 N. Y., 53; Everett v. Everett, 48 N. Y., 218. The section is clearly aimed at the person who is the active agent' in thus procuring a deed in the name of another; but Christian Kluender was not the active agent in procuring the deed in the name of Ernst, but Ernst, while acting as the agent of Christian, took the deed to himself, but in the name of Ernst Kluender; and hence the section quoted would seem to be, *123strictly speaking, inapplicable. Section 9, ch. 84, R. S. 1858, is the same as section 9, ch. 57, R. S. 1849, and section 2079, R. S., and provided that “ the preceding seventh section shall not extend to cases where the alienee named in the conveyance shall have taken the same as an absolute conveyance in his own name, without the knowledge or consent of the person paying the consideration, or when such alienee, in violation of some trust, shall have purchased the lands so conveyed with moneys belonging to another person.”
Here there is no evidence that the deed was taken in the name of Ernst with the knowledge or consent of Christian Kluender, although it clearly appears, from the admissions of Ernst, that he made the purchase with moneys belonging to Christian; and we think it is fairly inferable from the evidence, relations, conditions and circumstances of the parties, that Ernst had the money for the purpose of buying a home for Christian and his family, and that in making such purchase he was acting for his step-father, and this was followed by Christian moving upon the premises with his family and remaining there, as stated. Upon these facts we are asked to presume that the deed was taken in the name of Ernst with the knowledge or consent of Christian, and that in making the purchase Ernst was not acting as agent for Christian, but for himself, and that Christian intended the money as a loan, gift or advancement to Ernst. Can such a presumption be indulged?
In Day v. Roth, 18 N. Y., 448, an unmarried lady entrusted to the defendant a sum of money, to be invested by him as her agent and for her benefit. The defendant bought certain lands, taking the title in the name of his brother, and then, with the knowledge and consent of his brothe2’, and with the' knowledge on his part of the purposes for which said monej'-s were entrusted to the defendant, used said moneys in paying for and improving the property; and then the two conspired to conceal from her the fact that her money still remained *124invested in the property; but tbe court adjudged a specific lien for the amount due, and that the property be sold in satisfaction thereof, and the judgment was affirmed on appeal.
In Lounsbury v. Purdy, 18 N. Y., 515, it was held that “ where a married woman paid the consideration for the conveyance of land, which was, without her knowledge or consent, taken by her brother absolutely in his own name, without the expression of any trust, she was within the exception by which a'trust results for her benefit, although she had consented to a conveyance [to her brother] which would have been ineffectual as a trust, and would have vested the whole estate in herself.” Comstock, J., giving the opinion of the court, said: “The true inquiry suggested by the statute is, Did she intend an absolute deed to Quereau [her brother]? This has been answered in the negative by the finding, and therefore a trust results from the payment of the purchase money, as it did at the common law. It is by no means necessary that her intentions should be guided by an accurate knowledge of the law,' in order to save her rights. If the conveyance was not in fact taken as she desired,— if, without her knowledge or consent, it purported to vest an absolute title in Quereau,— the conditions of the statute are satisfied, and the case is brought within the exception to the general repeal of resulting trusts. She had in view, as I think we must assume, a trust conveyance, which would have been ineffectual except to vest the whole title in herself.”
In Siemon v. Schurch, 29 N. Y., 612, HogebooM, J., in giving the opinion of the court in a somewhat similar case, said: “Another exception has been engrafted or limitation made upon the apparently sweeping and comprehensive terms of this section, to wit: That if it does not appear that the absolute character of the deed, upon its face, was known to or designed by the person paying the consideration, it will be presumed that it was so written by fraud or mistake, and without any intent to violate the statute. This is clearly the effect *125of the cases of Day v. Roth and Lounsbury v. Purdy," supra. And Davies, J., who gave a separate opinion, said: “We would also be justified in assuming, to maintain this judgment, if it were necessary, that neither Mr. nor Mrs. Siemon gave any consent or had any knowledge that Youngs took the conveyance, as an absolute one, in his own name. It is not found that they, or either of them, had such knowledge or gave such consent, and we therefore assume they had not, and never gave it.”
In Fairchild v. Fairchild, 5 Hun, 407,“ where one member • of a firm was authorized by the other partners to purchase and take title to certain real estate for the benefit of the firm, but they did uot authorize him to take title absolutely in his own name without any recognition of their interests therein, and such partner purchased the real estate, paying therefor out of the partnership funds, but took a deed in his own name, held, that a resulting trust was thereby created in favor of the other members of the firm.” See also Foote v. Bryant, 47 N. Y., 544; Fisher v. Fobes, 22 Mich., 454.
As intimated, the statutes were enacted to prevent frauds on creditors, and not to protect and shield an agent, acting in a fiduciary or trust relation, in the perpetration of an actual fraud or the violation of a trust.- The fact that Ernst kept his surname out of the conveyance, and, for the purpose of taking the title, assumed the surname of Kluender, would of itself seem to indicate a desire to conceal from everybody the fact that he had taken the title to himself. He knew full well, that if he took the title in his true name of Ernst Weiss-fuss, the public would soon become aware of the fact, and that sooner or later it would come to the knowledge of Christian, or some of his family. The same desire of concealment seems to have induced him to devise the land to his sister by the name of Louise Kluender, instead of her true name, Louise Weissfuss. Besides, the devise being to Louise Kluender, she might easily be mistaken for the then wife of Christian, *126Louisa Kluender. Under the- 'facts of this case we are constrained to hold that, (I) Where a person occupying a confidential relation to another is entrusted with money by snch other person for the purpose of buying land, .and the person so entrusted makes the purchase, and pays the consideration from moneys so furnished, taking the deed to himself, but in the assumed surname of the person so furnishing the money, it must be presumed that the person so entrusted took such conveyance to himself by mistake or inadvertence, and without the knowledge or consent of the person furnishing the consideration, or in fraud or violation of the trust so imposed. (2) A party claiming that the money so entrusted was in fact a loan, gift or advancement, has the burden of proving it. (3) A party claiming title as devisee of such alienee is not entitled to the protection of a bona fide purchaser for a valuable consideration, especially where the person furnishing the consideration paid for the land was, at the time of making the devise and of the death of the devisor, occupying the premises with his family as a homestead.
By the Court.-^- The judgment of the circuit court is reversed, and the cause is remanded for further proceedings according to law.