90 N.J. Eq. 47 | New York Court of Chancery | 1919
This suit is to establish and enforce a trust of real estate in favor of complainant.
The primary inquiry herein is whether the trust which is claimed to exist is adequately manifested and proved by the writings which have been offered in evidence for that purpose.
By our statute of frauds it is declared as a rule of evidence that all declarations and creations of trust of lands shall be manifested and proved by some writing, signed by the party who is or shall be by law enabled to declare such trust, or else the trust shall be utterly void and of no effect. The exclusion
No consideration is necessary to support an express trust of lands if the existence of the trust and its terms are adequately established in the manner required by our statute, since when a trust of lands is thus established as definitely and completely declared it stands as in the nature of a completed gift, vesting an absolute equitable estate or title in the ceshoi qua trust. But like other gifts it must be fully completed to become effective as a gift. As equity cannot aid in perfecting a gift it can only recognize a voluntary intention to create a trust in land in favor of another when the trust has been executed, that is, when the trust has been perfectly and fully declared, and has thus resulted in the creation of a defined equitable .estate in the donee; until then, in the absence of a consideration, equity will not enforce it but will consider it a nullity.
But when a valuable consideration exists between the alleged trustee and cestui que trust, a court of equity may deem a contract to declare a trust as equivalent to an actual declaration, upon the equitable rule that what ought to be done will be considered as done; this is sometimes expressed in the formula that a valuable consideration will induce a court of equity to complete an imperfectly created trust.
These general principles are given recognition in the following decisions in this state: Janes v. Falk, 50 N. J. Eq. 468, 472; Landon v. Hutton, 50 N. J. Eq. 500; Wittingham v. Lighthipe, 46 N. J. Eq. 429; Ownes v. Ownes, 23 N. J. Eq. 60, 62. See, also, 3 Pom. Eq. Jur. §§ 996, 997. It is also the privilege of the answering defendants in this suit, who claim as innocent purchasers for value without knowledge of the alleged trust, to require the trust to be established by evidence in conformity to our statute without speci fically pleading the statute as a bar. Whyte v. Arthur, 17 N. J. Eq. 521.
The exaction that the terms of an express trust.must be disclosed by the written evidence with sufficient certainty to enable a court of equity to enforce its performance by -its decree, in no way denies to parole evidence its recognized office to disclose the
Since it may bo thought that the several writings which have been offered in evidence should, when considered together, be treated as an agreement to declare a trust, it must be first ascertained whether any consideration has existed to support an agreement of that nature.
By the testimony of complainant it appears that defendant Young told complainant that he, Young, would buy the property here in controversy and would from time to time collect enough rents to pay for its maintenance, and when he should be p$id his expenditures in the transaction he, Young, would convey the property to complainant. The property had formerly belonged to complainant and had been sold on foreclosure to the mortgagee; but complainant does not claim that Young was responsible for that. The utmost claimed by complainant is that Young, as his friend, advised him to let the property be sold at the foreclosure sale, and stated that he, Young, would then go to the purchaser and fix it up for complainant, and that after the foreclosure sale Young- stated to complainant that he would buy the property and hold it for complainant in the manner already stated. This promise on the part of Young was by parole and was purely voluntary. It was merely the expression of a friendly purpose of one friend to another to buy a property and carry it until the other should be able to take it over and relieve the purchaser from the expenditures or obligations incurred by him. Young was financially able to buy the property, while complainant was not; as a friendly act Young accordingly volunteered to buy it for the benefit of complainant in the manner stated. No amount appears to have been suggested as the price at which Young should purchase; the whole plan was apparently based upon the hope that Young would be able to buy at a favorable price and the further hope that he might become relieved from his expenditures and obligations incurred in connection with it, in which event he was to turn it over to complainant. The transaction was in no sense a loan of
The foregoing brief statement of facts antecedent to the purchase by Young sufficiently discloses that the original promise of Young was purely voluntary and was no more than a parole promise, wholly unsupported by any consideration, to purchase land with his own money and hold it in trust for complainant in the ma,nner stated. A voluntary parole promise by one person to purchase land with his own money and hold it in trust for another is, of course, within the statute of frauds and unen
Subsequently to the parole engagement of Young, already referred to, Young negotiated the purchase of the property in question. Title was taken by a corporation by the name of Estates of Chelsea. The most favorable view that can be adopted on behalf of complainant -is to assume — an assumption perhaps admitting of some doubt under the evidence — that that corporation was so far owned and dominated by Yortng as to be, in legal effect, Young. In that view tire adverse effect upon complainant of the resolution of the board of directors of that corporation touching the purchase of the property by it could be measurably disregarded. The purchase appears to have been made for the amount of the foreclosure decree, with costs, interest, taxes and some other expense items added. 'Part of the purchase price was paid in cash with money of either Young or the corporation referred to and the balance by a purchase-money mortgage executed by the corporation, the bond secured by the mortgage being signed by the corporation and Young. The corporation thereafter executed a new mortgage on the property for approximately the entire original purchase price and discharged the purchase-money mortgage referred" to, the new mortgage securing a bond of the corporation; in that manner the amount of cash originally paid was restored to Young or the corporation, but the obligation on the new bond secured by the mortgage continued. Thereafter the corporation collected most of the rents of the property; complainant appears to have collected some of the rents; complainant also took a lease from the corporation for the apartment occupied by him.
Written financial statements were from time to time supplied to complainant by one Albertson, who was secretary and bookkeeper of the corporation, and also an employe of Young. These written statements, so far as produced, disclose the revenues received by the corporation from the property and various
It is evident that for these writings to adequately establish a voluntary trust and its terms they must meet the requirements already referred to; they must be signed by the party who is or shall be by law enabled to declare such trust, and they must not only disclose/ the existence of a trust declared in prossenli, hut must disclose its terms with sufficient clearness and certainty to enable a court to enforce it. As phrased in 28 Am. & Eng. Encycl. L. (2d ed.), at p. 879: “They must be sufficient to establish the whole trust; not only that there is a trust, but what the trust i's.” As stated by Prof. Pomeroy:
• “The fact that a trust of lands is created must not only be manifested and proved by a writing properly executed, but it must also be manifested and proved by such a writing what the trust is. The declaration of trust, whether written or oral, must be reasonably certain in its material terms; and this requisite of certainty includes the subject-matter or property embraced within the trust, the beneficiaries or persons in whose behalf it is created, the nature and quantity of interests which they are to have, and the manner in which the trust is to be performed. If the language is so vague, general or equivocal, that any of these necessary elements of the trust is left in real uncertainty, then the trust must fail.” 3 Pom. Eq. Jur. § 1009.
See, also, Newkirk v. Place, 47 N. J. Eq. 477, 486.
Most of these revenue statements are unsigned. Two of them are signed.- But as they have apparently been prepared for some single purpose, and if all could be produced, such would no doubt connect with the others, they probably may be all regarded as component parts of the two which are signed.
Of the two which are signed, one is signed “Estates of Chelsea, by F. S. Albertson, Sec.;” the other “F. S. Albertson, Agt.” Albertson, who prepared and signed these statements and who kept the books of Estates of Chelsea, has testified that it was his understanding from parole statements made to him by
But if either the revenue statements or book entries, separately or together, could be deemed to satisfy the statutory requirement for a signature by the party who is or shall be by law enabled to declare such trust, there yet remains entire uncertainty, so far as written evidence is concerned, as to the nature and terms of any trust that may have existed. In this connection it should be still borne in mind that any trust or engagement to hold in trust that may have existed in favor of complainant was without consideration, and accordingly any writing, to be effective, must presently and completely declare the trust and its terms — in a word, must execute it — and cannot be seized upon by a court as an agreement to declare a trust and be enforced as such.
These several revenue statements include, as debit entries, moneys paid by Estates of Chelsea for repairs, taxes, insurance, interest on mortgage, sewer rent and other expenses incident to
Herein complainant’s case must fail. Unless resort can be had to parole evidence to define the nature and terms of any trust that may be claimed to have existed that information cannot be had. So far as the writings disclose, and wholly consistent with them, the property may have been held to secure some undefined obligation of complainant to the corporation or to Young or to some other person, thus constituting complainant the owner of a mere equity of redemption; the writings are equally consistent with a variety of contractual engagements which may have existed, between the-parties touching the property; the writings may be said to be also consistent with the existence of a trust of some kind in fa-vor of complainant. It is accordingly obvious that parole evidence must be resorted to first to determine whether the writings import a trust in favor of complainant, then, with that so ascertained, parole evidence must be further depended upon to disclose the nature and terms of the trust. That cannot be done. Authorities specifically to that- effect have been already cited' herein, to which may be advantageously added Smith v. Matthews, 3 DeG. F. & J. 109. It is there said (at p. 152) : “When this court is called upon to establish or act upon a trust of lands by declaration or creation, it must not only be manifested and proved by writing, signed by the party by law enabled to declare the trust, that there is a trust, but it must also be manifested and proved by writing, signed as'required, what the trust is.” And (at p. 151) the language of Lord Alvaney, in Forster v. Hale, 3 Ves. Jr. 707, is quoted with
It may be appropriately added that the testimony of complainant touching the nature and terms of the trust was to the effect that it was conditional — that is, that when the obligations incurred by Young with reference to the property should be discharged, complainant was to become entitled to a conveyance of the property. The testimony of Albertson discloses a further possible condition, to the effect that complainant was to also discharge the obligations which Young had incurred as endorser on notes of complainant. But it is upon the parole testimony and not upon the writings that complainant must in this suit rely to establish either the certain existence of a trust in his favor or its nature, terms and conditions.
This view renders it unnecessary to consider whether the purchasers of the property acquired their titles without notice of complainant’s claim.
I am obliged to advise a decree dismissing the bill.