Hammond's Administratrix v. Cadwallader

1. An agreement to purchase land at a sheriff's sale and to hold it in trust for another is within the third section of the statute of frauds; it must be in writing.

Appeal from Jefferson Circuit Court. The petition in this case sets forth substantially that John Hammond, plaintiff’s intestate, became one of the securities of Eli Cadwallader on his bond as guardian of certain minor children; that said Eli died indebted as guardian to said minors in about the sum of $283.72, and did not leave personal property enough to pay his debts; that all the real estate he owned was a certain, tract of one hundred and sixty acres ; that this land was encumbered with a mortgage in favor of defendant Isaac Cadwallader, which plaintiff is informed was actually satisfied but was not released of record ; that one Johnston qualified as executor of said estate and obtained an order from the county court for the sale of said real estate for the payment of the debts of said Eli, specifying among, others the indebtedness of said Eli to his ward; that said executor duly advertised said land for sale; that before the sale defendant came to said Johnston pretending that said mortgage was not satisfied and persuaded said Johnston as executor to confess a judgment for $263.82 as a balance due on said mortgage from said Eli; that on this judgment a special writ of execution issued; that John Hammond, being security for Eli as aforesaid and seeing that it was likely he would have to pay said wards the amounts due from Eli, took measures to secure himself; that he called upon defendant on the subject, and they entered into an agreement that defendant should buy the land aforesaid at his sale under the judgment of confession aforesaid in trust for the said Isaac (defendant) and said Hammond; 'that said Isaac and said Hammond should each pay one-half of the costs of sale, and that said Isaac should retain the land until he could find a private purchaser; that out of the proceeds of sale said Isaac was to pay or to retain enough to satisfy the amount of his judgment, and the balance he was to give to said Hammond to apply to the indebtedness of said Eli to his wards for which said Hammond was security; that according to this agreement said Isaac bought said land at said sale in trust for himself and said Hammond, who paid his half of .the expense of said sale to said Isaac ; that Hammond died; that judgments were recovered against his ad-ministratrix in behalf of said wards for $387, which plaintiff paid.; that said Isaac, defendant, sold said land for $600; that said mortgage was paid off in the lifetime of Mi Cad-wallader. The plaintiff prays that" the defendant may be made to account-'for the proceeds of the sale of said land held in trust, and for judgment for the amount paid by plaintiff for said Eli Cadwallader on his bond as guardian. ■It appeared in evidence that there was an oral agreement such as that charged in the petition entered into between the defendant Isaac Cadwallader and John Hammond, plaintiffs’ intestate. The court instructed the jury that “ if the defendant agreed with- Hammond that, if he would not bid or interfere with him in the purchase of the land, he would buy the land and sell it, and after paying his own debt from the proceeds, and a small balance to B. Johnston, the administrator of Eli, he would apply the balance to liquidate the liability of Hammond as security of Eli Cadwallader, they would find for the plaintiff said balance with interest from the time of sale.” The court refused the following instruction asked by defendant : “ If the alleged promise of Isaac Cadwallader was merely verbal, the jury will find for the defendants. A verbal promise in reference to the conveyance or holding land in trust could not be enforced. If the jury find the promise was not reduced to writing and was not to be performed within one year, they will find for defendant.” The jury found for plaintiff. I. The alleged promise was within the statute of frauds. There is no allegation of fraud on the part of Isaac Cadwal-lader. (See generally 10 Watts, 320 ; 1 Watts & Ser. 376 ; 9 Watts & S. 66; 4 W. & S. 150; 2 Watts, 327; 9 Watts, 42; 15 Wend. 650; 16 Verm. 500 ; 1 Hoff. 95 ; 2 Johns. Oh. 405; Earring. Oh. 12 ; 7 Ind. 308; 3 A. K. Marsh. 947; Meigs, 390 ; 2 Paige, 238 ; 2 Ash. 482; 3 Sumn. 460 ; 4 Johns. 422; 12 Johns. 290 ; Willis on Trustees, 28 ; Coxe Oh. C. 15.) I. The interest that Hammond had in making the land bring a sum sufficient to pay his liabilities, and the foregoing of his right to bid It up to that point, is a sufficient consideration to support the promise to apply the proceeds as stipulated. (27 Penn. 180.) The statute of frauds is not applicable to this class of trusts. This trust is raised by implication of law, and is founded upon the fact that the party asserting the trust had an interest in the subject matter of it prior to his agreement. That interest he yielded in the form it then stood in order that the party to whom he yielded it might use the subject matter of the trust to the mutual advantage of both parties. It would be a fraud were Isaac Oadwallader allowed to repudiate so much of the agreement as enured to the benefit of the other'party. The instruction asked was properly refused. The court correctly declared the law in the instruction given. (27 Ala. 461; 13 Texas, 187; 16 Ill. 118; 2 Snead, 395; 12 Mo. 30; 6 Mo. 171; 20 Mo. 296.)