62 Ala. 579 | Ala. | 1878
The bill is filed by the appellant, a married woman, to establish and enforce the execution of a parol trust, in opposition to the terms and legal effect of an absolute deed of lands, expressing an adequate consideration, executed by her and her husband in the mode prescribed by the statute to pass her contingent right of dower in the lands of hpr husband, or to pass her separate estate, whether it is
The material question is, however, whether an express trust, that the bargainee or grantee of lands conveyed by deed, expressing a pecuniary consideration, shall hold for the use, and on request of the bargainor reconvey to him, can be created and proved by parol. For there is no evidence that this trust rested in writing ; on the contrary, it is averred in the bill, that because of the intimate relations between the parties, and the great confidence reposed in Beecher, no writing disclosing the character of the transaction was taken. At common law, a use or trust, could be raised upon a conveyance of lands, by deed, or by writing, without seal, or even orally, if the rule of evidence prohibiting the change or contradiction of a writing by parol was not infringed.- — Perry on Trusts, § 75 ; Hill on Trustees, 55; 2 Story’sEq. §971. Contracts, if a statute does not intervene, may be partly expressed in writing, and partly in parol. If the writing does not set out the entire contract, parol evidence of the part omitted may be received, and it is not necessary that the writing should expressly and directly rebut the presumption that it contains the entire contract.— Brown v. Isbell, 11 Ala. 1009. Or a parol agreement, cotemporaneous with a written contract, though it may depend upon the latter and relate to the same subject matter, if separable from it, may be proved and enforced.— Garrow v. Carpenter, 1 Port. 359; Mills v. Geron, 22 Ala. 669; 2 Whart. Ev. § 1015. A trust, resting in parol, was not considered as affected by this rule of evidence, because it did not alter the legal operation of the conveyance, which had full effect in passing at law the absolute title. The trust did not alter, add to, or explain the deed, but was an incident, or a separable part of the contract, not reduced or intended to be reduced to writing, which a court of equity enforced as binding on the conscience of the party. — Shelton v. Shelton, 5 Jones Eq. 292; Lee v. Browder, 51 Ala. 288. When, however, a statute intervenes and declares that contracts must be made in a particular mode, or must be created or proved by writing, the common law rules of evidence are superseded, and the statute must be obeyed. — Perry on Trusts, §§ 78-86.
The seventh and eighth sections of the English Statute of Frauds, (29 Charles, 2, 23,) avoided all declarations or creations of trusts or confidences of any lands, tenements, or hereditaments, unless the same were manifested and proved by some writing, signed by the party who was by law enabled to declare such trust, or by his last will in writing; with a saving in favor of trusts or confidences, arising or resulting
The seventh and eighth sections of the English statute, were as follows : “ All declarations or creations of trusts or confidences, of any lands, tenements, or hereditaments, shall be manifested and proved by some writing, signed by the party who is by law enabled to declare such trust, or by his last will in writing, or else they shall be utterly void and of none effect. Provided always, that where any convevance shall be made of any lands or tenements, by which a trust or confidence shall or may arise or result toy the implication or construction of law^r be transferred or extinguished by an act or operation of law, then, and in every such case, such
The kinds of trusts which these statutes embrace — which the English statute requires shall be manifested, and proved by writing, and which our statute requires shall be created by writing — is made apparent by the exception. All other trusts than such as arise or result by implication or construction of law, are within its operation. Trusts arising or resulting by implication of law may be excluded by, but they do, not arise from, nor are they dependent upon the agreement of the parties. From facts proved, -without any declaration or agreement of the parties, the law raises the trust. A common case, is -when A. purchases lands with the money of B., taking the conveyance of title to himself, the law implies a trust of the title for B. Or, where an agent employs the money of his principal, or a trustee the funds of the cestui que trust, in purchasing lands, taking a conveyance to himself, by construction of law a trust of the legal estate results to the principal, or to the cestui que trust. -Whenever the trust is dependent upon the agreement or declaration of the parties — when it does not arise from facts proved, attending the creation of the legal estate, it can not rest in parol — the statute is positive, it must be created by writing, signed by the party declaring or creating the same. — Perry on Trusts, §§ 79-81; 2 Lead. Eq. Cases, 974-5; Flint v. Sheldon, 13 Mass. 448; Graves v. Graves, 29 N. H. 129; Smith v. Hallenback, 51 Ill. 223 , Lautry v. Lautry, ib. 458 ; Philibrook v. Delano, 29 Me. 410 ; Gerry v. Stinson, 60 ib. 186 ; Barrett v. Dougherty, 32 Penn. St. 371; Miller v. Cotton, 5 Ga. 341.
The want of consideration would simply render the conveyance voluntary, inoperative against the existing creditors of the grantor, but as between the parties it would be valid, operative to pass the legal estate, excluding the implication of a use or trust for the grantor. — Leman v. Whitely, 4 Russell, 423; Soursbye v. Arden, 1 Johns. Ch. 240 ; Wilkinson v. Wilkinson, 2 Dev. Eq. 376; Green v. Thomas, 11 Me. 38; Philibrook v. Delano, 29 ib. 410; Graves v. Graves, 9 Foster (N. H.) 129 ; Titcomb v. Morrill, 10 Allen, 15; Squire v. Hursler, 1 Paige, 494. It is of itself a declaration of uses, and if not otherwise expressly limited, the statute would intervene, and it would pass a fee simple. — Code of 1876, § 2178.
It is also insisted, that if the trust is not an implied ox-resulting trust, but a direct, express trust, it is of the character a court of equity, for the prevention of fraud, is accustomed to withdraw from the operation of the statute of frauds “ In the construction of that statute,” it is said by Judge Story, “ a general principle has been adopted, that as it is designed as a protection against fraud, it shall never be allowed to be set up as a protection and support of fraud. Hence, in a variety of cases, when from fraud, imposition, or from mistake, a contract of this sort has not been reduced to writing, but has been suffered to rest in confidence or in parol communications between the parties, courts of equity will enforce it against the party guilty of a breach of confidence, who attempts to shelter himself under the statute.” 1 Story’s Eq. § 330. That fraud, imposition, or mistake, will in a court of equity, take a case without the statute, all the authorities agree ; but in the application of the principle, as on many of the questions which arise on the construction and operation of the statute, there is great diversity of opinion.
There are authorities, (now invoked by the appellant,) which hold, that though no fraud or imposition is intended or practised, if a deed is executed, or a will made, or any contract; required to be in writing is entered into, if it is attended by a parol agreement, that it shall operate only for particular uses and purposes, though the parol agreement is intentionally omitted from it, and its performance left entirely to the conscience of the party promising, a subsequent violation or repudiation of the agreement, is a fraud against which a court of equity will relieve, by withdrawing the case 'from the grasp of the statute. Other authorities, more numerous, hold that the fraud which will withdraw a case from the
It is insisted this court has recognized and adopted the rule first stated, and that though no fraud, no imposition, no violation' of confidence was practiced or intended at the execution of the deed, its conversion to other uses than such as were expressed by the parol agreement, is a fraud against which courts of equity will relieve. If the rule has been established, it is a rule of property from which we are not at liberty to depart, and its reason or policy would not be open to discussion. The cases supposed to have established the rule are, Kennedy v. Kennedy, 2 Ala. 571; Bishop v. Bishop, 13 Ala. 475 ; Barrell v. Hanrick, 42 Ala. 60. After a careful examination of the cases, whatever may be the expressions found in them, we do not think they can be regarded as an adoption of the rule, or that it was necessary to sustain the results reached in either, unless it was the latter case.- All of them, (except the latter,) originated and were decided before the enactment of the present statute against the creation of parol trusts, while the common law of force, which recognized and enforced such trusts, if the rule forbidding the introduction of parol evidence to vary written instruments was not offended.
In Kennedy v. Kennedy, supra, the grantor and grantee were brothers, who for many years had lived in the most intimate relations, conducted business, if not strictly partners, yet jointly, and in the grantee, the grantor had reposed most unlimited confidence, relying greatly on his advice and judgment. Having fallen into intemperate habits, unfitting him for the intelligent transaction of business, the grantor was induced by the grantee and other relatives, who wished to strip him of the power of making injudicious dispositions of his real estate, to make the absolute conveyance in question. The purpose of the conveyance was, that the grantee should hold in trust for the use and benefit of the children of the grantor, who were infants, and it was attended with the promise that he would so hold. The conveyance proceeded from the suggestion of the grantee — from the confidence re
In Bishop v. Bishop, supra, the trust was of personal property. In the absence of a statute, personal property may be sold and transferred, or trusts thereof created or extinguished by parol. Such trusts are not within the prohibition of our own, or of the English statute of frauds. — Perry on Trusts, §§ 84-86.
The case of Barrell v. Hanrick, supra, is the only case of a parol trust dependent wholly on the agreement of the parties, not arising by implication of law, originating since the enactment of the present statute. The learned judge delivering the opinion, adopts to its fullest extent, the proposition, that though there is no fraud, imposition, or mistake at the execution of the instrument, the subsequent violation of' a parol promise inducing its execution is a fraud, Which authorizes a court of equity to establish and enforce the promise in opposition to the statute. And it is said: “We are precluded from considering the question an open one, by the former decisions of this court.” The decisions supposed to preclude us, are the cases of Kennedy v. Kennedy, supra; Bishop v. Bishop, supra, neither of which, as we have seen, involved the question; each originating and decided before the enactment of the statute, and the latter a trust of personal property, not within the statute, capable of creation, or of extinguishment by parol. It is not necessary now to say how far we would feel bound to follow Barrell v. Hanrick, in a case similar in its facts, or one in which a devisee, or donee, was active in intercepting the bounty intended for another, or in preventing the parol trust from being reduced to writing. ■ We cannot regard it as establishing the proposition, so broadly asserted, that the mere repudiation or violation of a parol promise, or trust, offensive to the statute, is a
The exception of cases from the operation of the statute of frauds, eminent judges have regretted, and have declared they would not carry them further than well defined decisions compelled. In Lindsey v. Linch, 2 Sch. & Lef. 4, Lord Redesdale, said: “ The statute was made for the purpose of preventing perjuries and frauds, and nothing can he more manifest to any person who has been in the habit of practicing in courts of equity, than that the relaxation of that statute has been a ground of much perjury and fraud. If the statute had been rigorously observed, the result would probably have been that few instances of parol agreements would have occurred. Agreements would, from the necessity of the case, have been reduced to writing. Whereas, it is manifest, that the decisions on this subject have opened a new door to fraud.” The observations of Judge Story, are instructive and admonitory to a court called to fix the construction and operation of a statute recently enacted, for the prevention of frauds and perjuries, clear and unambiguous in its terms, prohibiting the creation of parol trusts, dependent for their existence wholly on the agreement of the parties. Of the exceptions, judicial decision has introduced, trenching upon the policy and objects of the statute, he says, “ it is far from being certain, that they do not assist parties in fraudulent contrivances, and increase the temptations to perjury, quite as_ often as they do assist them in the promotion of good faith, and the furtherance of justice. — 1 Story’s Eq. § 765.
The plain meaning of the statute, is, that a trust in lands, not arising by implication or construction of law, cannot be created by parol — that a writing signed by the party creating or declaring the trust, is indispensable to its existence. Fraud, imposition, mistake, in tl^p original transaction, may constitute the purchaser, or donee, a trustee ex maleficio. It is fraud then, and not subsequent fraud, if any exist, which justifies a court of equity in intervening for the relief of the party injured by it — as it is the payment of the purchase money at the time the title is acquired, which creates a resulting trust, and not a subsequent payment, whatever may be the circumstances attending it. — Barnett v. Dougherty, 32 Penn. 371, When the original transaction is free from the taint of fraud or imposition; when the written contract expresses all the parties intended it should; when the parol agreement which is sought to be enforced, is intentionally excluded from it; it is difficult to conceive of any ground upon which the imputation of fraud can rest, because of its subsequent violation or repudiation, that would not form a
It is difficult to conceive of any good motive a grantor can have in the execution of an absolute conveyance, intending that the grantee shall be the mere repository of a naked legal title, while he reserves the exclusive beneficial interest. Such a reservation ,or trust, if written on the face of the conveyance, or declared by writing executed at the same time, would nullify the conveyance, depriving it of all operation, and the legal estate would remain in the grantor. — Code of 1876, § 2185. If the trust was declared, and some active duties were required of the trustee, there would not rest on transaction any just suspicion. But when, as in the present ease, no such duties are required, when he is simply clothed with the naked legal title, and the entire control and exclusive enjoyment is reserved by the grantor, it is difficult to resist the strong expression employed elsewhere, that he is “ guilty of a gross folly, or actuated by a sinister design.” If moved by the latter, he cannot ask a court of justice to relieve him from the toils of his own invention; if the former, he must show that he has been over-reached; that his folly has been practised upon by the more wary, or he cannot ask reasonably that rules of law shall be suspended for his .benefit.
It is a very general rule, that to enable a party to show a secret trust in the face of an absolute conveyance, it must appear the purpose was an honest one, or else by secret fraudulent device, a dishonest man would be sure never to lose, and he has the chance of gaining. He may accomplish his fraudulent design, and then he is sure to get back his property, or what is the same thing, keep it for his family. This would be affording encouragment to such frauds." Murphy v. Hubert, 16 Penn. St. 50.
The bill avers, and the averment is supported by the evidence of the appellant and of her husband, that the conveyance to Beecher was executed because of the husband’s insolvency, and in apprehension that his creditors would, if the title remained in appellant, seek to subject tbe property to his debts. No conveyance, no contract, no trust, designed to defraud creditors will be enforced by courts of justice. This proposition is conceded by the counsel of appellant, but they insist that the property was not liable for the debts of the husband. The deed was harmless, therefore, and the motive to defeat rights having no existence, and to defraud or delay creditors who could not be injured, cannot render it illegal. — Dearman v. Dearman, 4 Ala. 521; Wilson v. Sheppard, 28 Ala. 623; Paulk v. Gillespie, 34 Ala. 541. A conveyance, or a transfer of property, or of rights of property, not
The testimony shows that Beecher paid certainly one-half of the original purchase-money of the premises, and contributed the greater part, probably nine-tenths, of the cost of the improvements. The payment of the purchase-money and of the cost of the improvements, Beecher was to be reimbursed (and was reimbursed to a large extent) according to the evidence of appellant and her husband, by board and lodging, care and attention given him by the appellant. If this be true, to the extent Beecher was so reimbursed, the husband had an interest in the premises which his creditors could have subjected to his debts. It may be, that the appellant devoted her time and attention to the management of the household affairs, and bestowed on Beecher care and nursing in his sickness, and that her energy and industry contributed largely, or entirely, to the maintenance of the family. The earnings and savings of the wife belong to the husband, and he can make no gift of them to her, affecting the rights of existing creditors. A gift of such earnings or savings, is subject to the same rules which apply to other conveyances. — Pinkston v. McLemore, 31 Ala. 308; Shaeffer v. Sheppard, 54 Ala. 244; Carleton v. Rivers, ib. 467. If he should invest, or suffer them invested in improving the real estate of the wife, or in paying the purchase-money of real estate, title to which stands in her name, a court of equity will subject such real estate, at the instance of his creditors, to a liability for such earnings or savings. — Hoot v. Sorrell, 11 Ala. 386. When all the facts of this case are carefully examined, the conclusion is irresistible, that the conveyance to Beecher was intended to withdraw the property from the vigilance of the creditors of the husband, covering it from any effort they could make to subject it to their demands, or that Beecher, having paid the purchaso-money, and made
Let the decree be affirmed.