166 Ky. 196 | Ky. Ct. App. | 1915
Opinion op the Court by
Reversing.
W. H. Turner sued William Newberry in the Perry Circuit Court to recover a sum of money claimed to be due in virtue of a certain oral trust. Upon a trial of the action, the court directed a verdict for the defendant, and the plaintiff appeals.
The Winchester Bank had sued Turner in the Perry Circuit Court, and it obtained a judgment in that action against Turner and against Newberry as Turner’s surety on a bond executed therein, for the sum of $498.83. Turner was also indebted to one R. F. Fields in the sum of $174.74, which 'was a lien upon a tract of land owned by Turner in Perry County, containing 95.54 acres.
This deed was executed April 20, 1909, and on June 6, 1910, Newberry sold his land and the land so conveyed to him by Turner; for a sum amounting to about $11 per here; and Newberry having failed to account for any excess so realized over the $673.57 paid by him to the
We are informed by the brief of counsel for appellant (appellee has filed no brief) that the trial court sustained defendant’s motion for a directed verdict upon the theory that as there was no plea of fraud or mistake in the execution of the deed, a consideration other than that expressed in the deed could not be shown.
It is well settled in this state that parol evidence is. admissible to impeach the consideration of a deed absolute on its face and to show that it was in fact intended by the parties as a mortgage or security for indebtedness. Vaughn v. Smith, 148 Ky., 531; 146 S. W., 1094; Leibel v. Tandy, 146 Ky., 101; 141 S. W., 1183; McKibben v. Diltz, 138 Ky., 684; 128 S. W., 1082; 137 A. S. R., 408; Brown v. Spradlin, 136 Ky., 703; 125 S. W., 150; Hobbs v. Rowland, 136 Ky., 197; 123 S. W., 1185 (overruling Munford v. Green, 103 Ky., 140; 19 R., 1791; 44 S. W., 419). See also 27 Cyc., 1021.
The recited consideration of a conveyance may be impeached, without allegation of fraud or mistake, and that, too, by parol testimony. Ky. Stat., Section 470, Subsection 7; Stamper v. Cornett, 121 S. W., 623; Ky. Stat., Section 472.
Of course, in the instant case, it was not shown that the conveyance from Turner to Newberry was in fact intended to be a mortgage; it was no.t intended that the land should be held by Newberry as security, but that he should sell it and pay to Turner whatever the sale realized over and above the amounts which Newberry had paid for Turner. The transaction was an oral trust.
In Woolfolk v. Earle, 40 S. W., 247; 19 R., 343, a daughter conveyed to her stepfather a tract of land, for the recited consideration of one dollar. There was a parol agreement at the time that he was to sell the land so conveyed to him and pay the proceeds over to his wife, the daughter’s mother. In a suit to .enforce this trust, the court held parol testimony admissible to show that such was the inducement for the execution of the deed, and to establish the trust by showing the real consideration for the conveyance.
In Spencer v. Richmond, 46 App. Div., 481; 61 N. Y. Supp., 397, it was likewise held that parol evidence was competent to show that a deed absolute on its face was in fact to secure an indebtedness, and that there was also the further parol agreement that the lands thereby
In Texas, where, as in this State, there is no statute adopting the seventh section of the English statute of frauds, or any equivalent declaration, it is held that a parol express trust is raised where a grantor executes a conveyance of land, absolute on its face, under a paról agreement by the grantee to sell the land and account to the grantor. Diffie v. Thompson, 90 S. W., 193; Clark v. Haney, 62 Texas, 514; 50 Am. Rep., 536.
And even in those states where the seventh section of the original statute of frauds is in force, it is held where a creditor of the grantor takes a conveyance of land under a parol agreement to sell the same and account for the proceeds in excess of grantor’s debt, that notwithstanding the original invalidity of snch parol agreement, when the land has in fact been sold, the proceeds are impressed with a trust in favor of the grantor which may be enforced. Bechtel v. Ammon, 199 Pa., 81; 48 Atl., 873.
The trial court therefore erred in directing a verdict for the defendant.
The judgment is reversed.