Clark v. Burnham

5 F. Cas. 858, 2 Story 1

Opinion

STORY, Circuit Justice,

delivered the opinion of the court, in substance, as follows: The present bill is not founded upon the original paper or receipt of John Black, given to the plaintiff and the defendant, dated on the 18th of December, 1S34, and referred to in the bill and answer. Under that contract, if Clark (the plaintiff) is entitled to any part of the purchase from Black, he is entitled to a moiety, his name being used in that contract as one of the purchasers, and there being no other evidence to explain the interest of the purchaser. It has been said, that the receipt so signed by Black, is nothing but a naked receipt, and not a memorandum of any contract for tlie purchase of the lands. I think ■otherwise; and that however imperfect in its expressions, it purports to contain a memorandum of the terms of the purchase "by Burnham and Clark, viz. the purchase •of the lands (119,000 acres) on the Naragua-gus river, for the sum of $113,000, to be received on or before the next Friday. The terms of the instrument are as follows: “Ellsworth, Dec. 15, 1S34. Received of Daniel Burnham and Cyrus S. Clark one thousand dollars, to be accounted for,, if they shall furnish me satisfactory security for certain lands on the Naraguagus river, say •one hundred and nineteen thousand acres for one hundred and thirteen thousand dollars, on or before Friday morning next; ■otherwise to be forfeited. John Black.” The money, according to the terms of the' memorandum, was plainly to be paid and secured "by Burnham, and Clark, and the lands were to he conveyed or secured .-jointly to them ■upon their complying with the conditions of the contract. But there is the less need to ■dwell on this point, because it does not constitute the groundwork of the present bill.

The case made by the bill, and for which the plaintiff now seeks relief, is founded upon a subsequent substituted contract, by which the same lands were to be purchased •on the joint account of David Webster and Burnham and Clark, in which Webster was to have one moiety, and Burnham three •eighth parts, and Clark one eighth part; and that Clark’s share was to be conveyed to Burnham in trust for Clark. The bill seeks from Burnham a conveyance of this •one eighth part as a trust for Clark, upon the latter's paying and secuxfng his proportion of the purchase-money. The answer denies, that there ever was any such substituted contract as the bill asserts; and insists on the benefit of the statute of frauds. It is clear that the substituted contract was not in writing. It is, therefore, a mere parol contract for the purchase of lands, and open to the objection of being within the statute of frauds, unless it constitutes a case of a resulting trust. But is the substituted contract itself sufficiently pz’oved as an absolute, unconditional parol contract, as asserted in the bill? The answer positively denies it. The proofs are not clear to establish it. The most that can be said, is, that there is proof of some loose talk and indeterminate conversations between Burnham and Clark on the subject. It does not appear to me, that the court can, under such circumstances, say, that the ■contract itself is sufficiently proved. But if the substituted contract were sufficiently proved, as a parol contract, it would be within the statute of frauds, unless, at the time when it was entered into, Clark was entitled to a resulting trust in the lands, in virtue of the original contract of Burnham .and himself with Black. Now, that depends upon this, — whether any part of the purchase-money of $1,000, paid to Black, belonged to Clark. If it did, then the argument is, that a resulting trust arises, by operation of law, in favor of Clark to the extent of the share of the purchase-money paid by him. The argument in its general bearing in cases of joint purchases, is sound; for where lands are purchased with the several funds of two persons, there arises a resulting trust in the land to each, according to his share of the purchase-money, in whosesoever name the conveyance mfiy have been taken. See 2 Story, Eq. Jur. § 120G, and the cases there cited.

The defendant insists, that he paid one half of the sum of $1.000, which was delivered to Black for the purpose of securing the bargain. Now, the answer denies that any part of the money paid to Black was Clark’s, or paid on Clark’s account. It admits, however, a conditional agreement after-wards, to let Clark into an interest in the purchase, if Webster would consent; and that upon this agreement, $200 was paid in money to Burnham, by Clark, and a note given by him for the remaining $300. After-wards the purchase was made exclusively by Burnham and Webster with Black, and they, and they alone, gave their notes and security for the whole purchase-money, in which Clark did not join; nor had any part in the final negotiation. The $200 were afterwards repaid by Burnham to Clark, and the note of $300 was also given up to him. Now, there is no sufficient proof, that the $500 was, at the time, paid by, or on account of, Clark: and, taking the whole evidence, it seems to me, that the final bargain for an interest in the land, by Clark, with Burnham, was a subsequent transaction; and no fixed agreement existed between them at the time, when the money was paid to Black, and the money then paid, was not in any part the money of Clark, but wholly of Burnham. It is true, that the memorandum purports, that the money was paid jointly by Bumliam and Clark; and without that, the plaintiff would scarcely have any ground to stand upon. But this receipt creates only a presumption of a resulting trust for Clark; and a resulting trust may always be rebutted by counter parol evidence. Now, in the present case, the answer, which is responsive to the bill, expressly denies, that the money was paid to Black by, or on account of, Clark; and asserts, that it was all Burnham's own money, and paid upon his own sole account. At all events, the transaction ig so obscure and doubtful in its circumstances, that a court of equity would not be warranted in pronouncing upon such imperfect materials, that there was a clear resulting trust for Clark. If there was any such trust, it would be in a moiety of the whole purchase then contemplated. Besides; there is another most important consideration in the case, and that is, that the money was not paid as a part of a present fixed bargain between the parties for the land. It was a mere deposit, to be forfeited if the purchase was not finally made, and satisfactory security given for the whole purchase-money ($113,000,) on or before the ensuing Friday morning. Now it is manifest that Clark never did give any such security; nor did he ever complete, or offer to complete, the bargain with Black; but it was completed exclusively by and in the names of Burnham and Webster, who gave their own satisfactory security therefor. Indeed, the whole evidence shows, that at this time Clark was utterly insolvent and had failed; and it is certainly extremely improbable, that Burnham would, under such circumstances, become liable in effect as surety for Clark for half the purchase-money; or that Clark would, as an insolvent debtor, attempt to purchase half the land. And yet this is his statement as to the original contract between Burnham and himself. The other fact is not less significant. Clark actually received back his $200, and his note for $300. Why was this done, if he was then understood to be an absolute co-purchaser of any part, much more of a moiety of the land, the purchase being admitted to have been an advantageous bargain? The receipt of the money and the note by Clark certainly furnish strong evidence, under the circumstances, that he either considered the bargain as to himself a conditional one with Burnham, or that he voluntarily waived it upon the ground of his utter inability to furnish satisfactory security for his own part of the purchase-money, or of his consciousness, that he had no claim upon the land, unless Webster would consent to let him in to a participation in the purchase, which Webster refused. The taking back, then, of his money and note by Clark has, or at least may justly have, a twofold operation. I. As evidence pro tanto in support of the allegations in the answer. 2. As evidence of a deliberate waiver of any claim to the enforcement of any right or trust in the land. The bill does not allege any fraud, or mistake, or surprise, in thus taking back the money and note. If the plaintiff meant to rely upon such a ground, it was indispensable, that he should have stated it in his bill. So far from doing so, he silently passes over the whole transaction, as if it never had existed. Now, it seems difficult to suppose a case, where a court of equity would interfere to help a party who had deliberately waived his right under a contract voluntarily, and without any fraud, or mistake, or surprise. A waiver with full knowledge of all the facts, is, we all know, in many eases a complete defence at law, or a good bar to a defence at law, according to circumstances, where it is voluntarily made. Nay,' the doctrine has gone farther, and it has been held, that, if made under a mistake of law with full knowledge of the facts, it binds the party. And equity in this respect generally follows the law. And here, again, I may repeat, that in such a transaction, so obscure and imperfect in its character and proof, a court of equity ought not to act, for the very reason, that the onus probandi is on the plaintiff, and the answer of the defendant admits no part of the case. But in reality, the bill proceeds, not upon the original agreement with Black, (for he is no party to the bill, nor is any relief asked or even pretended to exist with him); but upon an original parol agreement between Burnham and Clark, which was displaced by another substituted parol agreement between them, in which Clark’s interest is reduced from a moiety to an eighth in the land. Now, it seems to me clear, that such an agreement, being for an interest in lands, is within the statute of frauds, and should be in writing; for the statute applies not only to legal interests, but to equitable interests and trusts in lands, except resulting trusts. That the present is not a resulting trust has been already stated.

Upon the whole, my judgment is, and the district judge concurs in it, that the bill must be dismissed with costs.