Sisemore v. Pelton

| Or. | May 3, 1889

Thayer, C. J.

In order to maintain the appellant’s claim to an equitable estate in the premises in controversy, the facts of the case must show that a trust arose by operation of law in favor of the appellant. He must be able to demonstrate that the various transactions occurring between him and the said E. C. Pelton, and what he did in effecting title to the premises after Pelton’s death, as disclosed by the evidence, created in his favor either a resulting or constructive trust. In other .words, it must appear that in the purchase of the HjTde ranch, as it is called, the appellant paid the consideration money or some distinct part thereof; or that a fiduciary relation existed between him and Pelton at the time the purchase was made, and that the premises were paid for with trust funds.

The two classes of trusts arising by operation of law — • resulting and constructive trusts — are distinct from each other; and the appellant’s case must come within one or the other of them, or else he has no cause of suit. Either class of the trusts referred to may be established by parol evidence, but it must be clear, certain, and convincing.

' Mr. Pomeroy says, in regard to the proof of a resulting trust, that “it is settled by a complete unanimity of decisions that such evidence must be clear, strong, unequivocal, unmistakable, and must establish the fact of payment by the alleged beneficiary beyond a doubt. Where the payment of a part only is claimed, the evidence must show in the same clear manner the exact portion of the whole price which was paid.” (Pomeroy’s Eq. Jur., sec. 1040.)

The same author also says: “In pursuance of the ancient equitable principle that the beneficial estate follows the consideration, and attaches to the party from-whom the consideration comes, the doctrine is settled in England and in a great majority of the American states, that where property is purchased and the conveyance of the legal title is taken in the name of one person, A, while the purchase price is- paid by another person, B, a trust-at once results in favor of the party who pays the price,, and the holder' of the legal title becomes a trustee for him. In order that this effect may be produced, however, it is absolutely indispensable that the payment should be actually made by the beneficiary B, or that an absolute obligation to pay should be incurred by him as apart of the original transaction of purchase, at or before the time of conveyance; no subsequent and entirely independent conduct, intervention, or payment on his part would raise any resulting trust.” (Pomeroy’s Eq. J-ur., sec. 1037.)

And said author, in speaking of constructive trusts arising from the acts of persons already possessing some fiduciary character or standing in some fiduciary relation, says-: “The evidence that the purchase was made with-trust funds must however be clear and unmistakable.” (Pomeroy’s Eq. Jur., sec. 1049.)

Tested by these rules, which are elementary,, the appellant’s counsel cannot reasonably claim that a resulting or constructive trust, in favor of the appellant, arose out of the facts proved in the case.

It is not pretended that- it is shown by the evidence that the appellant paid any part of the consideration money upon the purchase of the premises by Pelton from Ish, nor that the purchase was made with trust funds, although the counsel intimated at the hearing that it might be so inferred. But such facts cannot be so established by inference. They must be proved; not necessarily beyond a doubt, as Mr. Pomeroy states it, but by clear and cogent testimony, tending directly to confirm them.

The appellant did prove that he paid two of the notes, and accrued interest thereon, which were given by Ish in favor of the state of Oregon, upon the purchase by the latter of the premises from the school superintendent; but that of itself would not raise a resulting trust; it was not a payment of a part of the consideration of purchase of the premises by Pelton from Ish; it was a mere advancement upon a debt owed by Ish, and which, as between himself and Pelton’s representatives, Ish was evidently bound to pay. And if it had been a part payment of the purchase price of the premises, upon the purchase by Pelton from Ish, it would not have aided the appellant’s claim, as it was not a payment made “as a part of the original transaction of purchase, at or before the time of conveyance.” I mean by the conveyance, the assignment of the certificate of purchase of the premises by Ish to Pelton.

The appellant’s counsel seemed inclined-to claim at the hearing that the payment by the appellant of the two notes and interest to the state constituted in some way a purchase of the premises from the state, which gave rise to a trust in the appellant’s favor; but that position, in view of the facts, is not tenable. Ish purchased the property from the agent of the state, and sold, his right under the purchase to Pelton. What the terms of the sale from Ish to Pelton were, however, do not appear, although it is evident that Ish understood that he was to pay off the notes given for the purchase-money of the premises. He did pay one of them the same jrear he made the assignment to Pelton of his certificate of purchase, but neglected the payment of the other two, and they remained unpaid until the appellant discovered the fact, long after they had matured, and paid them, and caused the deed to be executed from the state to Pelton, although dead at the time. Ish, it appears, about the same time executed to Felton’s heirs his promissory note, intended to cover the advancement made by the appellant. That the transactions last referred to did not raise a resulting trust, is too apparent to require discussion. The act was a very generous one on the part of the appellant, but he secured to himself no legal rights thereby beyond a claim for money paid, laid out, and expended, if any at all.

Under the view herein expressed, the decree appealed from must be affirmed.

An order will therefore be entered herein accordingly.