Scoby v. Blanchard

Richardson, C. J.

delivered the opinion of the court.

It is contended on the part of the demandant, that the tenant could not be legally permitted to shew by parol evidence, that the consideration, which in Clarke's deed is expressed to have been paid by D. M. G. was in fact the money of D. Gregg, because the evidence goes to contradict the deed. We shall examine this objection, in the first place ; because if it be well founded, there is clearly an end of the tenant’s claim, which has no other foundation than the fact, that the land was bought writh D. Gregg's money.

There is in the books apparently considerable diversity of ©pinion upon the question, how far the recital in a deed in relation to a consideration may be contradicted. It has been supposed by some, that when a particular consideration is expressed in a deed, no other consideration can be averred. But others seem to have held that a party may aver another eonsideration, not inconsistent with the one mentioned in the *173 deed. 1 John. Rep. 139 , Schemerhorn vs. Vanderkeyden.— 2 P Wins. 204, Clarkson vs. Hanway. —7 John. 341, Maigley vs. Huer. —Phill Ev. 424.—1 Coke's Rep 175, Mildway's case. —7 Coke Rep. 135, Bedell’s case. —2 Coke’s Rep, 76, Ld. Cromwell's case. —4 Mass. Rep. 135, Wallis vs. Wallis.

It is well settled, that when a consideration of money is expressed in a deed, no evidence, nor averment to the con* trary shall be received. Moor 569, Fisher vs Smith. —1 Binney 517. This rale, however, does not apply in cases where the real consideration is illegal. (Phill. Ev. 227.) And mother instances it seems to be restricted in its application to cases where the averment or evidence is attempted to be introduced for the purpose of defeating the operations of the deed. For in an action of assumpsit to recover the consideration money of land sold, it was held, that parol evidence was admissible to shew that the consideration was not paid, although it was expressed in the deed to have been paid by the grantee. 14 John. Rep. 210 , Shepherd vs. Little. So where two trustees for the sale of an estate joined in a conveyance and in the deed both acknowledged the receipt of the consideration money, but all the money went into the hands of one of the trustees, it was held, that the other was not precluded by the deed from shewing, that he received nothing. 4 John. Rep. 23, Kip vs. Deniston.

But we are of opinion, that it is unnecessary in this case to decide, whether the recital in Clarke’s deed, respecting the consideration, can be contradicted ; because it seems to us,that the objection which the demandant makes is not well founded in point of fact. In order to show a resulting trust, it is not necessary to prove that the consideration money, mentioned in the deed, was not paid by I). M. G., but by Gregg. It is enough to show, that the money paid by D. M. G., was Gregg's money, and this does not contradict, but is perfectly consistent with, the recital in the deed. 1 Cruise Ü gest 472.

It is also objected in this case, that a resulting trust cannot be shewn by parol evidence ; and there are many authorities which seem to countenance this objection. 12 Mass. *174 Rep. 104 , North-Hampton Bnk vs. Whiting .—12 Mass. Rep, 377,—Saund. us es 211, 217. —1 P. Wms. 321, Ambrose vs. Ambrose.

-Rut the better opinion seems to be, that a resulting trust may be shewn by parol evidence. Sugden's Law of Vendors 414, 419.—13 Mass. Rep. 448.—4 East 577, note, Bartlett vs. Pickergill —3 John 216, Foot vs. Colvin. —1 Johns, cases 153.—16 John. 197, Seelye vs. Morse. —11 Johns. Rep. 91, Benson vs. Matsdorf.— 2 Vent. 361.—Coke Lit t. 290, a. note 249, sec. 8,—13 Johns. Rep. 463, Whitlocke vs. Mills.

The- next inquiry is, whether the evidence- in this case slewed á resulting trust. It was clearly proved, that Gregg purchased the land with his own money, and took a deed in the name of I). A.I. G. This is the example of a resulting-trust put in many of the books. 1 Saund. uses 211— Sug. 415, 212.—2 Fonblanque 16, note.— 11 John. 96

We shall not, at this time, go into the consideration of the question, whether in the case of a resulting trust, the cestui que trust has a vested legal estafe. Saund. tiscs 89, 90.

But, we shall consider the interest of the cestui que trust as merely equitable

Where lands are held in trust, whoever purchases the land of the trustee, and takes a conveyance with notice of the trust, becomes the trustee. 2 Fonbl. 147,—1 Saund. cases 227.

Scoby, the demandant, then, who purchased the land in this case with notice that his grantor was a mere trustee, must be considered as a trustee, and hold the land subject to the trust. And the tenant holding the land under a conveyance made by the original cestw que trust must now be considered the cestui que trust.— And the question is whether this demandant can set up his mere trust estate against the tenant, who is the cestui que trust '? In England, there has been considerable diversity of opinion, upon this question. Lord Mansfield, Lord Loughborough, with Gould, Jlsbvrst, and Butter, were of opinion that an equitable title might be setup as a defence in ejectment. Cowp. 473, Weakly vs. Bucknell —Doug. 695, Doe vs. Pott. —5 East 138, note.

*175 Lord Kenyon, Eyre, and Heath were decidedly of a different opinion. 7 D & E. 51, Jones vs. Jones. —2 ditto 684, Doe vs. Staple. —2 John. 221, Jackson vs. Peirce. —2 ditto 84, Jackson vs. Chase.

It is now considered as settled in England and in New-York, that an equitable title cannot be set up as a defence ia ejectment. But in England and in New-York there are courts of equity, who can protect the rights of a cestui que. trust. Here we have no court of chancery, and if the rights of this tenant cannot be regarded and protected by this court in this case, he is without redress. For this reason, if this were an action of ejectment, we should not hesitate to decide, that the equitable title of Blanchard was a good defence. But this is a writ of entry, in which the title to the freehold and inheritance is in question, whereas in ejectment, nothing is in issue but the right of possession. This is an important distinction. Here the equitable title is not set up against a mere claim of possession, but in opposition to a claim of the freehold and inheritance. And the question remains to be decided, whether the equitable title can prevail in such a case.

This is not the case of land conveyed to a trustee to receive the rents and profits, and pay them over to some third person. There the cestui que trust would have no claim in law or equity to hold the land against the trustee. But here the cestui que trust is in equity entitled to hold the land, and ought not in good conscience to be disturbed by this de-mandant.

It is the constant practice in all the courts of law in England .and in the United States, to recognize and protect equitable interests. Thus in the case of Winch vs. Keeley, Winch assigned to one Searle an account due from Keeley to Winch, and then became bankrupt. Searle brought an action in Keeley's name to recover the amount due. The defendant pleaded the bankruptcy in bar. To which the plaintiff replied the assignment of the account to Searle. and the replication was held to be sufficient. 1 D. & E. 619.

*176 In Rudge vs. Birch, (1 D. & E. 622,) to debt upon a bond, the defendant pleaded that the bond was given to the plaintiff intrust for A., for a debt due from the defendant to A., and that A. was indebted to the defendant in more money ; and this plea was held to be good. 4 D. & E. 341.—19 John, 342, Ford vs. Stuart.

In Dix vs. Cobb, and Whitney his trustee, ( 4 Mass. Rep. 508 ,) the trustee disclosed that Cobb had a book account against him ; but. that the interest in it had been assigned previous to the commencement of the suit; and it was held, that the trustee could not be charged.

In the case of Dunn vs Snell, ( 15 Mass. Rep. 481 ,) it was decided, that where a judgment had been assigned, a release of the debt by the assignor, made after the assignment, was no bar to an action upon the judgment in the name of the assignor. The same point is decided in Briggs vs. Dorr, ( 19 John. 95 .)

Indeed, the authorities on this subject are too numerous to be particularly enumerated. 16 John. 51 .—15 ditto 405.—2 d itt o 343, 484.—11 ditto 47, 488.—1 B. & P. 447.—3 John. 425, 263. —8 ditto 152. —10 ditto 45.—3 Binney 135.—1 Pickering 461.—14 Mass. Rep. 291.—13 ditto 215. —11 ditto 488.—9 ditto 337.—1 ditto 117.

Thus it seems, that equitable interests in choses in action are constantly recognized and protected by courts of law; and we have no doubt that an equitable interest in land may be so far recognized, as to receive protection against fraud and deceit.

Here the demandant, having full knowledge that the tenant had bought the land and paid for it, and that he had in equity a right to enjoy it, for the purpose of depriving the tenant of this equitable right, went and purchased the legal title ; and upon the strength of that title he now asks us to add him in effecting his purpose. This we cannot do. Such being his purpose, his title must be considered as founded in fraud and injustice, and can receive no countenance in a court of law. On this point there are many authorities. Where one buys an estate, and forgets to have his deed recorded, if another, knowing this, buys the estate for a full *177 price, and puts his deed upon record, he cannot hold the land, because his purchase is a fraud upon the first purchaser. 3 Mass. Rep. 575—1 Burrows 474.

In the case of Jackson vs. Matsdorf, ( 11 John. 97 ,) Thompson, C. J. says, “ But admitting a delivery of the deed, the “ interest created thereby was a resulting trust for Ambrose u Benson, who paid the consideration money ; and if the “ legal estate was by that deed vested in his daughter “ Kedah, the lessor of the plaintiff cannot avail himself of “ his purchase from her and her husband, in the year 1786, “ since he purchased with full notice of the trust, and was “ therefore guilty of a fraud, although he might have paid “ a valuable consideration.” And see the remarks of Judge Trowbridge, (3 Mass. Rep. 576—7.)

In the case of Dunn vs. Snell, ( 15 Mass. Rep. 481 ,) where a judgment had been assigned, the judgment debtors, with a knowledge of the assignment, procured a release from the judgment creditor, Parker, C. J. said, “ the transaction “ between the creditor and the debtors, after knowledge of u this assignment, was a gross fraud, of which they cannot “ avail themselves in a court of law.”

In England, “ where a person purchases of a trustee, with “ notice of the trust, he is guilty of a fraud, even though lie should pay a valuable consideration, and is therefore eon- “ sidered as a trustee for the person entitled to the bene- u ficial interest.” 1 Cruise’s Digest 485.—2 Fonbl. 147.

In any place where there is a court of chancery, the ces-tui que trust is sufficiently protected against the fraud of a purchaser of the legal estate, with notice of the trust, by considering such purchaser as a trustee. Because such a court can compel the trustee to convey the legal estate, and can protect the equitable interest. 1 Cruise’s Digest 489 — 503.

But in this state we have no court of chancery. No means exist here to compel the purchaser in such a case to convey the legal estate. Nor is it yet settled what remedy a cestui que trust may have to protect his rights. When then any person purchases an,estate held in trust under the *178 circumstances, which exist in this case, with notice of the trust, and then, bj bringing a writ of entry, attempts to treat the cestui que trust as a disseizor, and to turn him out of possession against every principle of equity and good conscience, fie must be considered as having made the purchase with an intention to defraud the cestui que trust of his equitable interest, and as having relied upon the absence of a proper tribunal to protect such interest for success in his profligate attempt.

It is then unnecessary now to decide whether, in a case free from fraud, the equitable title of a cestui que trust could, in a writ of entry, prevail against the legal title ; because the title of this demandant, being tainted with fraud,, cannot avail him, let the title of the tenant be what it may. We have, therefore, no hesitation in pronouncing the tenant to be legally entitled to Judgment on the verdict„