Hollis v. Hayes

The Chancellor :

That the defendant Hayes, if his deed is allowed to stand, will have acquired a property, at a price greatly below its ■ value, even if he pays the $100 to Mrs. Herbert, out of his pocket, is clear beyond controversy. He paid but $100 for the land, and there is no witness, who does not estimate it to be worth $1400, whilst one of them carries it as high as $2000. The average of the estimates is not much, if any, below $1750, The contract, therefore, appears to be grossly against conscience, unreasonable, and oppressive, and there can be no question, as it seems to me, that if the defendant in this case, was a complainant seeking to enforce such a contract, the court would refuse to enforce it, upon the ground of the great inadequacy of the price. But this is a case, in which an attempt is made to set aside a conveyance actually executed, and the circumstances which will warrant the court in executing such a power, must- be much stronger than would be required to induce it to withhold its aid, if applied to, to compel an execution of a mere agreement to convey. The inadequacy of price, may, however, be so great, as to induce the court to vacate a conveyance actually made. The difference between the price paid, and the value of the thing purchased, may be so gross and manifest, that, as said by a distinguished writer on this branch of the law, “it must be impossible to state it to a man of common sense, without producing an exclamation at the inequality of it.” Sugden on Vendors, 193.

The idea of fraud, or undue imposition, or of some circumstance which vitally affects the bona fides of the transaction, necessarily and unavoidably presents itself, when the property is parted with upon terms so utterly disproportioned to its value.

It is not, however, deemed necessary to decide in this case, *482 whether the conveyance to the defendant Hayes, would be avoided upon the ground of inadequacy of price, as it seems to me, that there are other grounds upon which the relief sought by the bill might be granted, if the case was in a condition for a final decree.

The bill alleges, and the evidence shows, that the consideration for the conveyance was paid by the complainant, or borrowed upon the credit of her title, and, therefore, that there is a resulting trust in her favor, a trust implied by law, from the' presumed intention of the parties, and the obvious jnstice of the case, and if such is the case, the statute of frauds relied upon in the answer, is no defence, these trusts being excepted from its operation. 4 Kent’s Com., 305 ; Dorsey vs. Clarke, 4 H. & J., 551, 556 .

That such trusts do result, and that parol evidence is admissible to establish the facts upon which they arise, not only against the deed, but in opposition to the answer, has been shown by Chancellor Kent upon a careful review of the cases. Boyd vs. McLean, 1 Johns. Ch. Rep., 582 .

The inclination of my mind, therefore, is, that there is a resulting trust in this case in favor of the complainant, and I might proceed at once to pass such a decree, but it seems to me to be proper before any final decision is made, that the mortgagee who advanced the money with which Hendon was paid, should be before the court, as it does not very clearly appear what effect such a decision may have upon the mortgage.

That mortgage was executed by Hayes, as the absolute owner of the property, and a decree pronouncing him to be only the trustee of the complainant, or vacating the conveyance to him, and appointing a new trustee, might so affect the validity or operation of the mortgage, as to require the presence of the mortgagee as a party to the bill. This is a question which is certainly not meant to be decided now,1 nor any intimation even given of the impression which may have been made upon the mind of the court; all that is intended at this time to be said is, that it is thought advisable that the mortgagee should be brought in as a party; and the case will be *483 ordered to stand over, with liberty to amend the bill to that effect.

. [The required amendment having been made, and some additional testimony, (not materially varying the merits of the case) having been filed, the case was again submitted to the Chancellor, who thereupon passed a decree requiring Hayes to convey the property in dispute to a new trustee, to be held by the latter for the sole and separate use of the complainant— subject to the mortgage debt of Mrs. Herbert; and said Hayes was decreed to account with the new trustee for the profits of the estate received by him, from the time it came into his possession to the time of his delivering it up to the new trustee, subject to such allowances as he might prove himself entitled to.]

[The decree in this case was reversed upon appeal.]