Tucker v. Ottenheimer

81 P. 360 | Or. | 1905

Mr. Chiee Justice Wolyerton

delivered the opinion.

The only question presented by the appeal is whether the cross-bill states facts entitling the plaintiff to equitable relief. The order of final settlement referred to in the complaint is made a part thereof, and shows that the estate was finally settled and the administrator discharged, and it was ordered by the court, among a great many other things, that the amount allowed the administrator over and above the receipts, to wit, the sum of $3,440.42, be declared a lien upon the real estate of the deceased. After ascertaining the present ownership of the real estate, the order further recites “that each and all the said parties are desirous and anxious that said estate should be finally settled, and that the charges thereon growing out of the administration of said estate should be ascertained herein, and that same should be made a charge upon the said real estate, to be hereinafter settled and adjusted and paid by the several owners thereof in accordance with their equities therein,” and thereupon decrees that “said administrator turn over to the said parties * * all of the real estate belonging to said estate, and that the said several parties take the said real estate subject to the said lien in favor of this administrator for the said sum of $3,440.42, the same to be adjusted and settled between them in such manner and by such course or process as they may adopt therefor.” There was no appearance by any of the heirs or their successors, except the administrator himself.

The verbal contract relied upon is not a contract for the sale of land where the purchaser has gone, into possession in pursuance of it and made valuable improvements, nor is it a contract to give or execute a mortgage or other instrument with a view to creating a lien upon the premises, but. it is set forth as itself creating the lien, and reliance is had thereon solely for the equitable relief pra3red for. It is conceded that the county or probate court had no power or authority to adjudge a lien upon-the realty of the estate in favor of plaintiff so as to bind the heirs, and its order or decree is hot relied upon as within itself, impressing the lien.

A verbal contract for a mortgage, based upon a consideration, where there has been part performance in pursuance of the contract, may be specifically enforced, upon the same principle as equity will -enforce a verbal contract for the sale of realty. The ground of the equity is well stated in Dean v. Anderson, 34 N. J. Eq. 496, 500: “Where an agreement has been executed or in part performed by the. complainant, and the acts done place him in a situation which is a fraud upon him unless the agreement is executed, equity will not permit the defendant to protect himself from executing his part of the agreement by' pleading that it was not in writing. The ground upon which this court acts in cases of part performance is fraud in refusing to perform after performance by' the other party, and the court will interpose and grant relief, notwithstanding the statute, when the complainant shows a performance on his side, by which he would suffer an injury amounting to' fraud by the refusal to execute the agreement on the part of the.defendant.” The doctrine is well settled: King v. Williams, 66 Ark. 333 (50 S. W. 695); Irvine v. Armstrong, 31 Minn. 216 (17 N. W. 343); Hicks v. Turck, 72 Mich. 311 (40 N. W. 339); Baker v. Baker, 2 S. D. 261 (49 N. W. 1064, 39 Am. St. Rep. 776). But such •is not the case here. There is no agreement for a mortgage or other lien, and part performance in pursuance thereof. The agreement is direct and explicit between the parties, and itself constitutes the lien, or else there is none. The condition is the same as if one party had attempted by purely verbal arrangement to create a mortgage in favor of another upon realty for the security of a sum loaned. Could the agreement be enforced, not having been entered into in writing ? A mere statement of the. proposition shows it so clearly to come within the statute of frauds that it is scarcely necessary to dilate upon the subject. Were such a transaction tantamount to an equitable mortgage, the formal written mortgage would not at all be necessary, and the statute of frauds, as it relates to mortgages of realty, would be a dead letter. A mortgage is in form a conveyance: Watson v. Dundee Mtg. Co. 12 Or. 474 (8 Pac. 548). And it should be in writing, and executed with like formalities as a deed; and to permit a debt to be charged upon realty as a lien by verbal agreement would be evasive of the statute. If there has been part performance or possession given, it has been in pursuance of an agreement that never created a lien, and the acts of part performance will not create it. Acts of part performance, as they relate to a contract of sale, will usually create an equity that will afford relief by way of specific performance; but, where neither the contract nor the acts of part performance are tantamount to the creating of a lien, there can be no enforcement of it. The debt in qiiestion was not contracted on the credit of the property, and, the agreement being insufficient to impress a lien on account of it, equity will not afford the relief sought: Bennett v. Nichols, 12 Mich. 22.

The further contention is made that the defendant should be held to be a trustee ex maleficio of the legal title, subject to the lien of plaintiff for his claim of $3,440.42. The principle invoked is that it would be a fraud upon the plaintiff to allow the defendant to retain the land, or his part of it, freed of the incumbrance of the indebtedness of the estate, because in reliance upon the alleged agreement the plaintiff was induced to forego his right to sell the land in probate for its payment of such indebtedness. The statement of the complaint is somewhat vague, which is that in order to effect a final settlement of the estate, and get the same out of court, it was agreed that said sum should be and remain a lien upon the real estate in the nature of an equitable mortgage; that plaintiff should enter into possession of the real estate, and that said, sum, with interest, should be paid out of the rents and profits thereof, or the sale of the premises in case sale thereof was made; and that the balance of the property should be divided equally among the parties. The agreement provides for no sale, but that if one should be made, the proceeds should be applied towards the indebtedness, and one. would suppose that the intendment was that the rents and profits should finally cancel the demand; the defendant assuming no personal obligations to pay any part of it. Defendant’s ownership of the legal estate comes to it naturally enough by descent and purchase, and none of plaintiff’s funds have been employed in its acquirement. So there can arise no resulting or constructive trust out of the situation. The only element of mala fides that can be injected into the transaction is that it would be a fraud upon the plaintiff not to let him get his money out of the property, because it was agreed -verbally betwe.en the. parties or their predecessors that the estate’s indobtness should be and remain a lien upon the real estate in the nature of an equitable mortgage. But this brings us back to the first question, which is whether the agreement is within the statute of frauds, and this we have resolved against its validity.

It is urged that plaintiff was induced to waive his lien upon the land for the money due him from the estate, but that stands as the only consideration for the verbal agreement, and, being performed on his part, stands in no stronger light than if he had loaned the money direct to the defendant, and thereupon entered into a verbal agreement depending upon it alone to constitute the lien, or, as it is termed, an equitable mortgage. The agreement is wholly incompetent to impress a lien of any sort, and part performance cannot help the situation. So, too, the entering into possession could not avail for the purpose. If any rights have arisen by virtue of possession and the making of improvements upon the land by assent of the defendant, they do not operate to confer a lien through the verbal agreement which constitutes the very groundwork of his cause of suit.

The cases of Paine v. Wilcox, 16 Wis. 215, and Cutler v. Babcock, 81 Wis. 195 (51 N. W. 420, 29 Am. St. Rep. 882), so much relied upon, do not seem to us to he in point. In each of these cases the. party complained against had obtained the legal title to the property under conditions that it was accounted a fraud to permit him to retain it, and he was therefore held to be a trustee ex maleficio. But here the conditions are quite the contrary. The defendant has simply come into its own, with a verbal agreement that a lien should be continued thereon; and, while, it may be a breach of a void contract for it to disavow the agreement, it has acquired nothing that it would be a fraud upon the plaintiff to permit it to retain. Mortgages do not usually arise ex maleficio, but a trust might.

For these reasons, we do not think the complaint sufficient, and the decree of the trial court will therefore be affirmed.,

Aeeirmed.