Heiskell v. Powell

1. Where P. enters into an executory contract for the purchase of land, and at the time or afterwards, before the title is conveyed to him, or any part of the xiurchase-money is paid, by P.’s agreement, H. for F. W. H. pays one third of the jmrchase-money, and P. & H. pay the residue, and the legal title is subsequently conveyed to P., such payment by H. for F. W. H. creates a resulting trust, in favor of said F. W. H. and such conveyance of the legal title to P. makes him trustee for F. W. H. as to one third of said land. (p. 721.) 2. When the relation of trustee, and cestui que trust is once established, no subsequent dealing with the trust-property by the trustee can relieve the property of the trust as between the trustee and cestui que trust, (p. 723.) 3. The bar of the statute of limitations will not be applied in equity . to the enforcement of a claim, of which equity alone has cognizance. (p. 723.)

Johnson, Pkgsident, furnishes the following statement of the case: In July, 1880, P. W. Heiskell instituted a suit in equity in the circuit court of Hampshire county, against J. H. Powell and J. C. Heiskell. The bill was filed at October rules, 1880. The bill alleges that plaintiff and Powell made a yer-bal arrangement to buy two certain tracts of land in said county of a special commissioner, who had been appointed by the court; that it was agreed that they were to have each an equal interest iu the same, and that Powell was to be represented as the purchaser, and the deed was to be held by him alone for their mutual benefit; that said purchase was made with a view to and for the purpose of a re-sale, aud the deed was made to Powell as a matter of convenience and in accordance with their mutual agreement; thatthe purchase was made, and the commissioner made the deed to Powell; that Powell very soon after the purchase contracted to sell the said tracts of land to J. B. Hoyt & Co., and on March 14, 1871, conveyed them to said Iioyt & Co.; that subsequent to the contract of sale to Hoyt & Co. it was discovered that a Mrs. Peyton had the title to a moiety of said land, and that Ployt & Co. agreed to pay an additional sum of five hundred dollars for the said title, which sum was by them paid to said Powell for that purpose; that J. C. Heiskell having become the owner of said moiety it was agreed by Powell that said Heiskell should become an equal owner of said lands with the plaintiff and said Powell, and should have his equal share of the profits arising from the sale to Ilojff & Co., in which arrangement the plaintiff' acquiesced, and the purchase-money agreed to be paid to the special commissioner was paid out of the proceeds of the sale to Hoyt & Co.; and after paying the same and all other expenses a large sum was loft as profits of the transactions to be divided between the plaintiff, said J. C. Heiskell, and the said Powell; that in the year 187- the said Powell and Jno. C. Heiskell had a settlement of said matters between themselves, in which J. C. Heiskell received between five hundred dollars and six hundred dollars as his one third of the profits of said business; that plaintiff was not a party to said settlement and did not know that such a settlement had been made, until a long time after it was so made, and is in no wise bound thereby; that plaintiff has received none of the profits arising out of said sale, and claims, one third of the said profits with interest thereon; that Powell denies that plaintiff had any interest in said land, and refuses to make a settlement with him. Plaintiff further alleges that under the agreement, Powell held the legal title to the land as trustee for himself, John C. Heiskell and the plaintiff, and that after the sale he held the money in trust for the benefit of the said parties, and in refusing to pay the plaintiff his share thereof has violated his trust; and the plaintiff prays for proper relief against the said Powell as such trustee. He also prays, that the defendants be required in their answers to disclose fully the amounts received by them and each of them, and the times •when received, the expenses paid by them, and the net amount of the profits of the said land, that proper settlements be made, and the amount due to the plaintiff be decreed to be paid him; and for general relief.' The plaintiff filed an amended bill, in which he alleged, that in order to complete the purchase according to the agreement, he and said Powell employed John 0. Heiskell to make the purchase for them iu the name of Powell alone, and authorized him to do all for them that was necessary, in order to speedily and certainly secure for them the said lands. That in pursuance of said authority and instructions the said Heiskell as agent for the plaintiff and said Powell made the said purchase and paid to the commissioner two hundred and forty-eight dollars and thirty cents of the purchase-money, which was paid by said Heiskell tor the said plaintiff and said Powell; and that soon afterwards said Powell paid for himself and the plaintiff one hundred dollars, the residue of the purchase-money; that it was before the sale to Hoyt & Oo. that John C. Heiskell became entitled to a one third interest, and this was before the defect in the title was discovered; that the allegations of the original bill are incorrect as to these matters; that the said outstanding title was purchased at the request ot and for the benefit of the purchasers Hoyt & Co., and after the sale to them, &c. John C. Heiskell answers the bill, and in his answer he insists, that no decree should be rendered against him, as he only got his one third interest, to which he was entitled, after he had liad a settlement with said Powell. James H. Powell answered the bill, and in his answer he denies, that said P. W. Heiskell paid any part of the purchase-money on said purchase, or that he had any interest whatever in said purchase. He says that ho'alone requested J. C. Heiskell to purchase for him these lands from the commissioner. lie says he entered into a written obligation with the commissioner to pay him two hundred dollars on the confirmation of the 'sale and the residue in six, twelve and eighteen months; that no part of the purchase-money was paid at the time the obligation was executed, nor had any been paid prior to that time; that subsequently in consideration of services rendered in negotiating the purchase he agreed to give John C. Heiskell a third interest in said land, but he denies that plaintiff was ever consulted -by John C. Heiskell or respondent in reference to the interest of J. C. Heiskell in said land; that after respondent’s obligation was given to the commissioner, Heiskell settled with the commissioner for respondent alone, a portion of the purchase-money wholly or principally for taxes due for several years on said lands; that after the sale to Hoyt & Co. it was discovered, that the title to a moiety of the land was in Mrs. Peyton, and Hoyt & Co. refused to complete the purchase or take any part of the land, until the Peyton title could be obtained and conveyed to them; that the title was obtained by respondent and by him conveyed to Hoyt & Co.; chat with this purchase plaintiff likewise had nothing whatever to do, nor was he consulted in any manner whatever in reference thereto. Respondent further says the first intimation he had that plaintiff claimed any interest in the lands or in the proceeds of the sale thereof was shortly after the sale to Hoyt & Co., when plaintiff by his counsel'called on respondent for a settlement of the matter, and respondent replied that he had no settlement to make with plaintiff, and denied that plaintiff had any interest therein in any manner whatever; that it is now ten years or more since said, demand was made, and respondent submits that even had there been such a purchase in trust as is alleged, it. is now barred by the statute of limitations, -which respondent pleads; and he further pleads and relies upon the statute of frauds,as a full and complete de-fence to such a verbal agreement as is set up by plaintiff.. Depositions were taken, and on the 24th day of September, 1881, the cause was heard, and the court held, that from the evidence of the transaction there was a resulting trust in favor of P. W. Heiskell, and that Powell held the legal title to one third of said land in trust for said Heiskell; and that as Powell had sold said property to innocent purchasers, Heiskell was entitled to one third of the profits- of said sale, after expenses were fixed, and as ascertained the amount from the evidence appears to be five hundred and four dollars and sixty-five cents, on the 14th day of March, 1872; and the court being of opinion, that the plaintiff’s claim was not barred by the statute of limitations, and the plaintiff waiving a reference to a commissioner to ascertain the amount due him, and agreeing to accept the amount aforesaid, that being the same that the defendant had agreed to pay John C. Heiskell, at the settlement made with him, entered a personal decree in favor of plaintiff against said Powell for seven hundred and ninety-three dollars and five cents principal and interest together with the costs of the suit. Prom this decree Powell appealed.