| U.S. Circuit Court for the District of Western Missouri | Jul 20, 1891
(after stating the facts as above.) This is what may not inaptly be termed a many-sided case. There "are, however, a few controlling principles of law which so tar determine the case as to render, in my opinion, an extended review of the evidence unnecessary. There are involved three pieces of real estate. One is known as the “Residence Property,” acquired and owned by the uncle, Dr. McKinnon, Sr., long prior to the complainant’s coming to Missouri; the farm known as the “Watts Farm,” acquired in 1882, after the formation of the partnership by parol; and the Meyers lots, acquired on the 23d day of March, 1885, after the formation of the partnership, under written articles of agreement of January, 1884. As to the lot known as the “Residence Property,” it may as well be said here as elsewhere that there is no foundation for the suggestion that the claim made to that by complainant can be supported upon the consideration that the complainant left his home in the east and moved to Missouri on the faith of the assurance that he was to have this property. The bill itself makes no such claim. The only negotiation between the parties was by letters, as claimed by complainant; and, accepting his own version of their contents, (the letters not being produced,) there was no reference made to this'real estate. The only thing named was the extent and character of the professional practice of the uncle. It was on the faith of that alone he come to Missouri. He made up his mind to come solely on account of the proffered interest in the practice of medicine. He did not, so far as his testimony discloses, even know of the existence of this property until after his arrival here. The bill is framed for and on the theory of a specific performance. He must, therefore, show a parol contract, clear, explicit, and indubitable in its' terms, based upon a valuable consideration, fully performed or paid by him. Without objection to his competency, the complainant was introduced as a witness in his own behalf. Justice to the dead demands not only that the complainant be held rigidly to his own version of the terms of the verbal agreement, but, as he is attempting to affect the title to real estate by the uncertainty of parol proof and his rehearsal in his own behalf of the words and conduct of a dead man,
“ Question. You regarded then, did you not, your uncle’s offer to make you his heir as a free offering on his part? Answer. No, not altogether. It was free in the sense of his giving it, but was not free in the sense of not receiving an equivalent. Q. Explain what you mean by that. A. In this way: Of course it was his to withhold, but, while that was the ease, it was to his interest both financially, and, I suppose, socially, that I remain, because he was unable to do the real hard work of the practice. Q. You were perfectly willing, however, to remain at the time he made the offer, were you not? A. Yes, sir.”
It cannot, therefore, be fairly maintained that this was a promise based upon the consideration of the formation of the partnership. On the contrary, the context, as well as the time and the occasion of the utterances, enforce the conclusion that it was of the nature of a gratuitous promise, as distinguished from a promise based upon a valuable consideration. “The question in such a case is always: Were the representations made by the decedent terms in a contract, or were they merely voluntary, revocable promises, which were not carried out? Did the complainant drive a bargain with him, or did he trust to his generosity, relying upon his word?” 5 Amer. & Eng. Enc. Law, 313. The context shows that this conversation came about casually. They were “talking about home affairs, and one thing and another. I will consider you in the light of my heir, and what we make will be considered as yours. I want it to go that way.” This is no more than a mere testamentary intention. “I want it to go that way” expressed no agreement, and bound the uncle to nothing. It was simply the declaration of a wish, with none of the ear-marks of a contract. The complainant having already come to Missouri upon the prospect of a profitable partnership, to an inexperienced and impecunious young doctor, and having already consented to the partnership, he was really to perform no additional act, nor give any additional consideration, for this promise. In Neal’s Ex'rs v. Gilmore, 79 Pa. St. 421, the decedent, having no children, took two boys of tender years to live with him. A short time alterwards one House, a half-brother of the complainants, met the decedent, and he testified that the decedent had taken a great liking to the children, and that he would like to keep them; and, if their father would stay and work the place, and behave himself, he would give him a certain share of the crop; and, if the children would stay until they were of age, he would take them, and raise them as his own; that he would give them a good common education, and at his death would give them what he had. It was held that this was a mere declaration of intention of the decedent towards the children; that it had nope of the marks of a contract. It was a contract all on one side; and in determining whether it was a contract or not it is a controlling circumstance that all the important benefits were on the side of the promisee.
In addition to all which it is not clear to my mind that the alleged verbal contract respecting the home place is not within the prohibition of the statute of frauds. “No action shall be brought upon any con
“A taking possession doés not withdraw a parol contract from the statute of frauds. The possession taken under such a contract must not only be notorious and distinct, but it must be exclusive of the vendor. Receiving a parol vendee into joint possession with his vendor is*not equivalent with the ancient feudal investiture, for which the statute of frauds intended to declare a writing should be the only substitute. The notoriety and significance of an entry into common possession is much less than when an owner leaves and another person takes the sole and exclusive enjoyment. Hence it has been held that a tenant in common in possession cannot pass his title to his cot'enant in possession by parol, because there cannot be, in such a case, that distinct transfer of possession which equity regards equivalent to a written contract. To constitute a valid parol sale under the statute of frauds, tire possession must be exclusive of the donor. * * * The mischief against which the statute was designed as a guard is greater in cases of parol transfers to partnerships than in any other case. * * * When partners intend to bring real estate into partnership, their intention must be manifested by deed or writing placed on record, that purchasers and creditors may not be deceived. * * * Undoubtedly a partnership may hold real estate, and they may have a resulting trust, where the partnership funds have paid for land. Erwin’s Appeal, 39 Pa. St. 535. So there may be a constructive trust in favor of a firm, as was held in Lacy v. Hall, 37 Pa. St. 360; but these come within the exceptions to the statute of frauds. In both these cases the lands were acquired after the partnerships had been formed, and while the joint business was in progress. But here there is no resulting or constructive trust. The agreement, if there was any, to put the land into the joint stock, was made before the firm had any being, and the partnership funds did not pay for it. A parol agreement to put land into a firm, or to consider it as firm property, made before the firm exists, is wholly ineffectual to pass any title, either in law or in equity.” '
The rule invoked by counsel for complainant, that a complete performance of the contract on the one side may take the case out of the operation of the statute, in my opinion, has no application to-a case like this. The courts have gone quite far enough in this direction, practically wiping out the wise and protective provisions of this statute by equitable construction. The rules laid down by the supreme court in Purcell v. Miner, 4 Wall. 513" court="SCOTUS" date_filed="1867-02-26" href="https://app.midpage.ai/document/purcell-v-miner-87793?utm_source=webapp" opinion_id="87793">4 Wall. 513, may well be applied to this case: The party relying upon such parol contract must make full, satisfactory, and indubitable proof of the contract, — a proof which must show a contract leav
In respect to the property known as the “Watts Farm,” acquired by the uncle in 1882, the complainant’s evidence shows that at least $1,000 or $1,200 of the purchase money was paid out of the moneys of the uncle on hand when the complainant came to Missouri; and the uncle gave his notes for the unpaid balance, which the complainant testifies was paid out of the earnings of the joint practice. The negotiation for the purchase of this farm was conducted wholly by the uncle, and the deed taken in his name. This fact was known to the complainant, without protest or inquiry on his part. In view of the attempt to impress the title to this land with a trust by calling strangers as witnesses, to give rather their impressions than the words of the conversations had with the deceased, to the effect that he spoke of this land as if held for the use of the firm, the letter written by the uncle to his brother in 1883 constitutes more than countervailing evidence. It was written in the abandon of confidence between two brothers. It was written at a time when the writer could have had no conceivable object to either pretend or dissemble. In his letter he said:
“ I bought a farm lately, and it keeps me cramped to make the payments on it, and I want to be as saving as I can. I thought it best to have such a provision made, as I might get crippled, and unable to attend to my profession. You know a doctor runs a good many risks, riding at all times.”
This language is hardly consistent with the testimony of the expectant “heir” that this purchase was made as a mere investment of the surplus earnings of their practice. “I thought it best to have such a provision made, as I might get crippled,” etc., coupled with other evidence that the uncle spoke of this farm as a place of repose, and the attention he was giving to stocking it, furnish little support to the contention of the nephew that it was bought as a joint investment, to be held as a mere partnership asset. On the contrary, the inference is strong that the uncle made this purchase with the pleasing expectation that with advancing age he would in the near future leave to his protege the legacy of the practice he had built up, with its good-will, and retire to the more peaceful pursuit and quietude of agricultural life. Especially would this be a happy provision in the event of the happening of the apprehended physical misfortune. It would be a liberal concession to the complainant to say that a part of the purchase money of this farm came from the earnings of the professional practice of the firm. What, then, would be the -ights and interests of the complainant in this farm? In the absence of
“The note affords no ground for a resulting trust springing out of the purchase of either farm by the defendant, because such a trust arises only from the payment, originally, of the purchase money, (or at least a part of it,) by the party setting up the trust. ⅝ * ⅝ The trust must have been coeval with the deeds, or it cannot exist at all. After a party has made a purchase with his own moneys or credit, a subsequent tender, or even reimbursement, may be evidence of some other contract,- or the ground for some other relief, but it cannot, by any retrospective effect, produce the trust of which we are spending. There never was an instance of such.a trust so created, and there never ought to be, for-it would destroy all the certainty and security of real estate. The resulting trust, not within the statute of frauds, and which may be shown without writing, is when’ the purchase is made with the proper moneys of the cestui que trust, and the deed not taken in his name. The trust results from the original transaction, at the time it takes place, and at no other time; and it is founded on the actual payment of money, and on no other ground. It cannot be mingled or confounded with any subsequent dealings whatever.” Vide Ducie v. Ford, 138 U.S. 587" court="SCOTUS" date_filed="1891-03-02" href="https://app.midpage.ai/document/ducie-v-ford-92982?utm_source=webapp" opinion_id="92982">138 U. S. 587, 11 Sup. Ct. Rep. 417.
So the only possible pretext upon which the complainant could assert a resulting trust -in his favor is upon the assumption that the $1,000 paid by the uncle on the original purchase belonged to the partnership assets. This pretension rests alone upon the unsupported testimony of the complainant, which, under all the Circumstances concerning the relations between these parties and the purchase of this farm, I cannot accept as sufficient to impress the legal title to this property. His own testimony respecting this purchase is that .when the uncle made it and paid the $1,000 he stated to the nephew, “We must .now collect up to raise the balance.” This was nothing more nor less than an agreement at the time of the purchase and conveyance that part of the purchase price might be paid after the original act, and as'such it is within th'e statute of frauds; or, if paid out of the partnership funds, .at the very utmost i.t would only create a charge upon the land pro tanto in favor of the partnership.
In respect to the Meyers lot, acquired after the execution of the articles of agreement of partnership of January 1, 1884, if it is to be treated as partnership property, it is clearly subject to .the terms of .the written instrument. The contention of the¡ complainant is that,the entire .purchase money came, from %⅜ partnership funds. ..If this purchase was made pursuant to and in furtherance of the copartnership, there would be a
“jvnd it is further agreed upon that, should the senior member of the firm die or become incapable of practicing his profession, that the right to continue business should devolve on the junior member, [J. A. McKinnon;] and in the event of the death of the senior member of the firm, that all iiis property, personal and otherwise, which he held in partnership at the time of his death, should go to the junior partner, [J. A. McKinnon,] providing the senior member leaves no family of his own to which it might recur.”
It is to be observed that the property thus designated to go to the complainant on the death of the uncle is expressly restricted to that “which-he held in partnership at the time of his death.” As every species of property held by the uncle, according to the testimony of the complain- • ant, was either held in copartnership or in trust for the benefit of the' partnership, why did the parties to this agreement employ the, teróC “held in partnership?” If it was the understanding of the parties and' the intention of the uncle to leave it to the “junior member,” the-most natural, as the most apt, term possible would have been, “all his property, personal or otherwise, which he hold at the time of his death.”' The limitation, on the contrary, not only indicates that the senior'member held other property than partnership, but that it was his -mind to give none other than his interest in the partnership property." To"'giVb any other construction to the written instrument- is to add to-its-expressed;
In Roth v. Michalis, 125 Ill. 325" court="Ill." date_filed="1888-06-16" href="https://app.midpage.ai/document/roth-v-michalis-6963770?utm_source=webapp" opinion_id="6963770">125 Ill. 325, 17 N. E. Rep. 809, the court say:
“The instrument, it will be observed, does not, as counsel assume, purport to convey an undivided.half of the property which he then owned; but, on the contrary, only that which he might leave at the time of his death, after the payment of all his just debts. What portion of the effects he then owned, if, indeed, any at all would be on hand at the time of his death, and thus brought within the terms of the grant, was at that time, as is manifest, a matter of pure conjecture. This being so, it is clear that no present estate or interest in the property thus owned by him could have passed by this deed, and it therefore follows as a legal sequence that the instrument in question, considered as a conveyance, was and is void. This conclusion rests upon the fundamental principle tiiat a deed takes effect upon its delivery, if at all.”
The court then proceeds to consider the question as to whether such a provision can be given effect to as a declaration of trust:
“It is unquestionably true that, where one for a valuable consideration attempts to make a conveyance of property to another, and by some casualty or inadvertence the instrument is defective and inoperative as a conveyance, a court of equity will, in a proper case, treat the instrument as a declaration of trust, or as a contract for a. conveyance, as the circumstances may require. But this doctrine has no application to a case like the present, where an essential element of the trust is wanting. An existing property right in or to some distinct subject-matter is essential to the existence of every trust; and any instrument, however perfect otherwise, which fails to disclose this, cannot properly be established as a declaration of trust.”
See, also, following authorities: Miller v. Holt, 68 Mo. 584" court="Mo." date_filed="1878-10-15" href="https://app.midpage.ai/document/miller-v-holt-8006111?utm_source=webapp" opinion_id="8006111">68 Mo. 584; Grattan v. Appleton, 3 Story, 755" court="None" date_filed="1845-05-15" href="https://app.midpage.ai/document/grattan-v-appleton-8631834?utm_source=webapp" opinion_id="8631834">3 Story, 755; Sperber v. Balster, 66 Ga. 317" court="Ga." date_filed="1881-02-15" href="https://app.midpage.ai/document/sperber-v-balster-5560083?utm_source=webapp" opinion_id="5560083">66 Ga. 317; Turner v. Scott, 51 Pa. St. 126; In re Diez, 50 N.Y. 88" court="NY" date_filed="1872-11-12" href="https://app.midpage.ai/document/in-re-the-probate-of-the-last-will--testament-of-diez-3632286?utm_source=webapp" opinion_id="3632286">50 N. Y. 88; Cover v. Stem, 67 Md. 449" court="Md." date_filed="1887-06-22" href="https://app.midpage.ai/document/cover-v-stem-7897405?utm_source=webapp" opinion_id="7897405">67 Md. 449, 10 Atl. Rep. 231; Reed v. Hazleton, 37 Kan. 321" court="Kan." date_filed="1887-07-15" href="https://app.midpage.ai/document/reed-v-hazleton-7887018?utm_source=webapp" opinion_id="7887018">37 Kan. 321, 15 Pac. Rep. 177; 1 Redf. Wills, 170.
We do not controvert the doctrine that a contract, based on a valuable consideration, duly performed by the beneficiary, to make a will,
Of the testimony of witnesses called by complainant to depose concerning statements made by decedent in promiscuous conversations, to the effect that he and his nephew owned the property in common, and the like, it may be observed — First, that such desultory talk cannot be accorded more weight than the complainant’s own version of the understanding between him and the deceased; and, second, that such vague and indefinite statements are too meager to be the basis of judicial ascertainment of the exact state of accounts, or terms of compact, between the parties. Such evidence is often easy of coinage against the dead, or, when honest, owing to the weakness of human nature to favor the “living king, ” it enlarges by excessive coloring. As aptly said by Sir William Grant, (Lench v. Lench, 10 Ves. 517:)
“The witness swears to no fact or circumstance capable of being investigated or contradicted, but simply the naked declaration of the purchaser admitting that the purchase was made with the trust money. That is, in all cases, most unsatisfactory evidence, on account of the facility with which it may be fabricated, and the impossibility of contradicting it. Besides, the slightest mistake or failure of recollection may totally alter the effect of the declaration. ”