Kelly v. Johnson

Napton, Judge,

delivered the opinion of the court.

A resulting trust arises by operation of law, where the purchase money of an estate is paid by one and the legal title is made in another. In such case the person named in the conveyance is regarded as a trustee for the party from whom the consideration proceeds. This doctrine is based upon the common law principle that a feoffment without consideration results to the use of the feoffor. But the relation of trustee *252 and cestui que trust in such cases must result from the facts which occur at the time of or anterior to the purchase, and can not be created by subsequent occurrences. Hence where an agent is employed to purchase a tract of land and the purchase is made and the title taken in the name of the agent, and no part of the purchase money is paid by the principal at the time of or previous to the purchase, the trust is within the statute of frauds and can not therefore be enforced if its existence is denied by the agent. (Hill on Trustees, 97 and cases cited.) Where a trustee purchases in the name of a third person with trust funds, the resulting trust, it has been held, will not be to himself but to his cestui que trust. (Russell v. Allen, 10 Paige, 249 .) So it has been held that it is not essential to a resulting trust that the money advanced should come directly from the cestui que trust, if it satisfactorily appears that the person who supplied it intended it as a gift or loan to such cestui que trust. (Page v. Page, 8 N. H. 187; Gower v. Tradesman’s Bank, 4 Sand. 106; Boyd v. Maclean, 1 John. Ch. 582.)

The answer in this case alleges that Johnson (one of the defendants) made the payment of one-half of said purchase money out of his own means, and gave his notes, secured by a deed of trust on the property, for the unpaid balance; “ that at the maturity of said notes, he paid and discharged them with money which said Graham advanced and paid to him under the express and distinct verbal Tinderstanding and agreement that he, said Johnson, should thenceforth hold said one-half of the interest in said land which he had purchased in trust for the sole and separate use and benefit of his defendant Prances A. Graham, then the wife and now the widow of said Robert Graham,” &c. This answer admits a trust as to one-half of the land, but seems designed to raise a resulting trust in Mrs. Graham, and not in her husband. It is not stated in so many words that the money advanced by Graham was money belonging to the wife, nor that Graham designed it or treated it as a gift to his wife ; but it was probably intended so to be inferred that the money was a gift to the separate *253 use of tlie wife, and, consequently, that the use of the land would result to her and not to the husband. It is evident that if the money advanced by Graham was not either the separate property of the wife or a gift to the wife, the resulting trust would be to the husband, and a parol declaration changing the direction which the implication of law would give it, if valid at all, could- at all events be revoked by similar ones at a subsequent period. If' the deed had been made in the name of the party intended to be benefited by it, this would not be so, for then a subsequent change of intention could not have the effect of altering the nature of the transaction so as to convert the donee into a trustee for vol unteers subsequently claiming under him. (Birch v. Blagrove, Ambl. 266.) But even in such cases, a subsequent disposition of the property by will would raise the case of an election against the donee if the donee claimed any benefit under the will. (Cecil v. Butcher, 2 Jac. & Walk. 578 ; Dummer v. Pilcher, 2 Mylne & Keen, 262.)

It will be seen from the bill of exceptions in this case that none of the questions we have here briefly alluded to, and which we suppose must ultimately determine the merits of this suit, were decided in the land court. The case went off on an instruction that the deed from Johnson to Mrs. Graham, if genuine, was an end of the controversy so far as the relief asked for in the petition was concerned, and precluded the necessity, we suppose, of investigating the effect of the will and the alleged trust. As Mrs. Graham and Johnson were both parties to the suit, and the former was a mere volunteer, we do not see what obstacle the deed could form to an equitable decree settling the rights of the parties and placing the title wherever the testimony and law might warrant. In the present position of the case, it is impossible for us to express any opinion decisive of the merits. Not regarding the deed from Johnson however as a bar to the relief sought, we will reverse the judgment and remand the case for a new hearing in the land court. Judgment reversed and remanded ;

the other judges concur.