Court Opinion

ID: 6965475
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:53:08.000505+00
Date Added: 2024-06-11T16:08:35.619416
License: Public Domain

Mr. Chief Justice Magruder, dissenting: This is a bill filed by appellee against appellant, in which the appellee claims to be the equitable owner of one-balf of certain lots, the legal title to which is in appellant, and asks for an accounting and'partition, and for an injunction against certain actions of ejectment and forcible entry and detainer brought by appellant for the possession of the premises, and also certain actions brought for rents claimed to be due from appellee. The answer denies that the complainant has any interest in the property, and pleads the Statute of Frauds. The defendant below, the appellant here, filed a cross-bill, setting up that he had bought the premises and is the legal and equitable owner thereof, and praying that a certain paper, recorded by complainant, and reciting that defendant held the legal title to one-half of the lots in trust for the complainant, should be set aside as a cloud upon the cross-complainant’s title, etc. The decree of the Circuit court dismissed the cross-bill, and found for the complainant in the original bill, in accordance with the prayer thereof. In 1859, appellee, being the owner of the lots in question, built a house thereon, and has lived there with his family ever since, and is still in possession. In 1873 he executed a trust deed to one Bogue, as trustee, to secure an indebtedness of $12,000. This trust deed was foreclosed in 1877, and in pursuance of the trustee’s sale a trustee’s deed, dated April 21,1877, was executed to the Chicago Theological Seminary. The seminary continued to own the premises from April 21, 1877, until the contract was made with appellant in January, 1886, as hereinafter stated. During the period from the trustee’s sale to May 1, 1886, appellee occupied the premises under lease from the seminary, sometimes paying them rent and sometimes giving his notes for overdue rent, at the rate of $300 or $360 per year. On January 28, 1886, a written contract was made between the board of directors of said seminary and the appellant, by which the board agreed to sell and convey the lots to him for $12,000 to be paid as follows: $2000, in cash upon the delivery of a warranty deed, a note for $2000, payable in one year from March 1, 1886, a note for $2000, payable in three-years from said date, and a note for $6000, payable in five years from said date, the note to be secured by trust deed upon the property with the privilege of paying the first two-before maturity, the sale to be subject to certain assessments-then due and to the lease to Wadsworth expiring on May 1, 1886, certain portions of the property to be released at a certain rate per front foot upon payments being made upon the notes; abstract of title to be furnished by March 1, 1886, a receipt of $250 on account of the purchase money is acknowledged in the contract. Before March 1, 1886, Towle sold a portion of the property to one Evers for $2500 in cash. In March or April, 1886, the-terms of the contract were somewhat modified, and it was carried out in the following way: the board executed a deed to Evers for the part sold to him, and a deed for the balance toTowle, and Towle paid to the board, in addition to the $250 above named $3900 in cash, and gave his two notes, one for $1850 and one for $6000, both dated March 1, 1886, and payable, the first in two years after date, and the second in five years after date, with six per cent interest, and both secured by trust deed upon the property conveyed to Towle. There is no written evidence in the record of the ownership by appellee of any title or interest of any kind in said premises. His claim of interest rests entirely upon parol testimony. His theory is that there was a resulting trust in his favor as to one-half of the property purchased by appellant from the seminary. If the proof showed that he paid one-half of the purchase-money there would be no doubt about the existence of such. resulting trust; but the proof does not so show, nor is it contended that he paid any part of the purchase money. His contention is that there was a joint purchase of the premises by himself and appellant; that Towle agreed to advance for him one-half of the amount to be paid in, cash; in other words, that there was a loan to him by appellant of the amount necessary to make one-half of the cash payment. It is not claimed that any arrangement was made as to the assumption by the appellee of any of the notes for the deferred payments, or that the parties were to make sales and meet the notes with the proceeds of such sales. Inasmuch as the contract and deed were executed to appellant, the presumption is that appellant purchased the property with his own money. In order to overcome this presumption by parol testimony, the proof “should be so convincing as to leave no reasonable doubt in the mind of the court.” (Reeve v. Strawn, 14 Ill. 94.) Parol proof to establish a resulting trust must be full, clear and satisfactory, and must be received with great caution. (Corder v. Corder, 124 Ill. 229 ; Purcell v. Miner, 4 Wall. 513 ; Shaw v. Shaw, 86 Mo. 594; Woodward v. Sibert, 82 Va. 441; Byers v. Daniel, 27 Ark. 88; Reynolds v. Caldwell, 80 Ala. 232; Dudley v. Bachelder, 53 Me. 403.) This rule is especially applicable, where it is admitted that the party claiming the equitable title has not paid any part of the purchase money, and where it is claimed that the alleged cestui que trust has borrowed the money to make the purchase, either in whole or in part, from the party taking the legal title, or has made an agreement with the latter for an advance of the purchase money. (Boyd v. McLean, 1 Johnson’s Chan. Rep. 582; Getman v. Getman, 1 Barb. Ch. Rep. 499; Millard v. Hathaway, 27 Cal. 119; Fickett v. Durham, 109 Mass. 419; Levy v. Brush, 45 N. Y. 589; Page v. Page, 8 N. H. 187; Roberts v. Ware, 40 Gal. 634; Wetmore v. Neuberger, 44 Mich, 362; Raub v. Smith, 61 id. 543; Bottsford v. Burr, 2 Johns. Ch. 405 ; Wilson v. McDowell, 78 Ill. 514; Lantry v. Lantry, 51 id. 458; Holmes v. Holmes, 44 id. 168.) Let us see what the facts are, to which the principles announced in the authorities above referred, to are to be applied. The complainant swears that Fisher, one of the directors of the seminary, had told him the property could be bought for $12,000; that thereafter on January 18,1886, the defendant Towle, came to him on the Hyde Park train on his way to Chicago and asked him what arrangements he had made for the purchase of the property; that he replied: “I know just what I can do. I can buy the property for $12,000, $3000 cash and $3000 more in one year, and the remainder can run as long as we want it at six per cent interest.” That Towle then said: “You see what you can do. If you can do that, I will furnish the money and we will take it together, and I will give you two years’ time on your half;” that complainant went to a meeting of the seminary board in session on that day and obtained from it a proposition to sell the property for $12,000, one-fourth in cash, or securities convertible into cash, and the balance in one, two and three years, at six per cent per annum, payable semi-annually, the proposition to hold good until January 25, 1886, with power in the executive committee of the board to vary it if necessary and advisable in their judgment; that the complainant showed this proposition which he himself had written down as the members of the .board stated it, and which did not mention the name of complainant or of any particular purchaser to the defendant, 'Towle, on the evening of said January 18 and Towle said, “that is all right;” that on the said evening defendant asked complainant for a letter of introduction to the seminary directors, so that he might make an arrangement with them, if possible, to accept $2000, instead of $3000, as the cash payment ; that complainant gave him a letter to the secretary or treasurer of the board; that the next time complainant saw '.Towle, perhaps the next day or second day, he said: “I bought the property for $12,000, and have sold the south fifty feet to Evers for $2500, and paid the $2500 on the $12,000 purchase.” The defendant swears, that he learned that the property was for sale for $12,000, from a real estate agent named True, early in December, 1885; that he had no conversation, with complainant on the train; that he at no time agreed with complainant to buy the property on their joint account; that, he did not pay the $250 paid on January 28, 1886, upon the joint account of himself and Wadsworth; that he paid all the money which he did pay for himself alone; that about December 20, 1885, he met Wadsworth for a few moments on the platform at Woodlawn Park, and told him he had understood the property was for sale at $12,000, and asked him if he expected to buy it or had made any arrangements to buy it, to which Wadsworth said “no,” that he would like to buy it, but was not in such shape as to be able to make the purchase, that he owned a stock farm and a large amount of stock which was not then in a condition to be sold, and a sale of which at that time would necessitate a large loss; that defendant then said to'Wadsworth: “If I could arrange to make the purchase, furnishing the first money, the necessary money on the first payment, how would it suit you for me to buy it, and we could carry the property together;” that complainant said he would like to buy it in that way, and defendant said s “We can seethat complainant suggested that he would see the officers of the seminary; that complainant came to defendant’s house that evening and told him the property could be had for $12,000, and defendant said he would see about it; that complainant did not give defendant any letter of introduction as claimed; that defendant called on Hollister, one of the directors of the seminary, on December 22, 1885, and made an appointment to meet him and Holden, another director; that he met them and learned that, if the sale was made, it would be subject to a lease to Wadsworth, and that Wadsworth had failed to pay his rent, and had given notes for the rent, and that the stock on his farm was mortgaged for $6000; that defendant concluded to take no further risks with complainant because of the information thus received as to his inability to pay the notes and as to the mortgage on his stock; that defendant then made up his mind to have nothing more to do with complainant in the purchase, and finally made a contract with Hollister and Holden for the purchase of the property as above stated. The only direct testimony as to an agreement for the joint purchase of the property is that of the parties themselves, and they contradict each other. Holden and True sustain the statements of appellant as to what occurred between them and him. One Wilbur gives a deposition, in which he states, that, about three years before the date of his testimony, he heard Towle say, that he had made arrangements to handle the property in connection with Wadsworth. But where the question is, whether the holder of the legal title has paid his own money for the purchase of the title for himself, or whether he has taken such title as sueurity for a loan of money advanced to enable another person to make the purchase so as thereby to create a resulting trust in the nature of a mortgage, the character of the transaction cannot be determined by evidence of declarations made by the holder of the legal title to outside parties in chance conversation, “which the witness had no reason to recollect from interest in the subject-matter, which may have been imperfectly heard, or inaccurately remembered, perverted, or altogether fabricated ; testimony, therefore, impossible to be contradicted.” (Purcell v. Miner, supra.) In Reeve v. Strawn, supra, it was held that a resulting trust could not be established by oral testimony which consisted of “ambiguous expressions and uncertain declarations made by the parties sought to be charged, and testified to by witnesses after the lapse of several years.” * * * It is said, that appellant never informed appellee that he intended to make the purchase for himself after he learned of appellee’s financial inability to furnish one-half of the purchase money. Appellee’s own testimony shows, that appellant told him of his purchase from the directors and of his payment to them of the money received from Evers. If the cash payment of $2000 was made with the proceeds of the sale of a part of the land, it was not made with money loaned by appellant to appellee. Nor can the allegation of the bill, that appellant held the title to one-half of the property as security for the loan of one-half of the first payment to appellee, be true when it appears that a part of the property was deeded to Evers, and appellant never did hold the legal title to the portion sold to Evers. Besides the sale to Evers, appellant sold another part of the property in March or April, 1886, for $2000, to one Barber. In June, 1886, he sold another portion for $2000 on time to one Fish. In May, 1887, Fish assigned his contract to appellee, who assumed the payment of $1500 of the purchase money, and swears that he paid the amount in full to appellant. I am unable to understand why appellee thus bought and paid for one of the lots if he regarded himself as the owner of half of it, without taking some measures to see that proper credits were made upon the alleged joint purchase. His conduct in this matter amounted in some respects to a recognition of appellant as the sole owner of the property. At any rate, without going further into the evidence, it is sufficient to say that the two parties, who alone knew what the arrangement was, contradict each other in reference to it, and there is as much testimony tending to confirm the statements of^the one as there is testimony tending to confirm the statements of the other. Under these circumstances it is impossible to say that the existence of a resulting trust is established by such clear and satisfactory proof as the law demands in such cases. In order to constitute a resulting trust, there must be proof of ownership of,the funds at the time purchase is made. Such a trust arises by operation of law, and does not spring from the previous contract of the parties. (McDonald v. Stow, 109 Ill. 40.) Here, however, the proof does not show that a loan of a part of the money necessary to purchase the property was made at the time of the purchase. If the evidence conclusively proves anything, it proves a parol contract entered into by the parties before the purchase, by the terms of which one was to purchase one-half of the land for the use and benefit of the other. The contract is consequently nothing more than a simple parol agreement for the purchase or sale of land, which is cut off hy the plea of the Statute of Frauds. Reeve v. Strawn, supra. Not only is a verbal contract for the sale of lands void, but a verbal agreement by one to purchase an interest in lands for another is void. Raub v. Smith, supra. While it may be wrong in point of morals to violate such a parol agreement, yet its violation is not a fraud against which a court of equity will furnish relief when the Statute of Frauds is pleaded. Mr. Justice Craig, also dissenting.