Coles v. Allen, Freer & Illges

64 Ala. 98

• Court: Supreme Court of Alabama
• Decided: December 15, 1879
• Status: Published

Opinion

BBICKELL, C. J.

The purpose of the bill is a confirmation of the title the mortgagees acquired indirectly, through the purchase made by Mitchell, at the sale under the power in the mortgage executed by Connor; and to remove the cloud cast upon the title, by the decree obtained by Mrs. Coles against Connor, subsequent to the execution of the mortgage. It is only as between parties and privies that a judgment or decree is final and conclusive of the matters in controversy, or, collaterally, evidence of the facts upon which it may be founded. Bes inter alios acta alteri nocere non debet, is an inflexible maxim in its application to judicial_ proceedings, shielding the stranger from injury, while it precludes him from taking benefits under judgments or decrees to which he was not a party, in the absence of any relation of privity with the parties which made him answerable for the results of the litigation. No alienee, grantee, or assignee, is bound or affected by a judgment or decree, rendered in a suit commenced against the alienor, grantor, or assignor subsequent to the alienation, grant, or assignment; for the plain reason, that otherwise his rights of property could be divested without his consent, and the fraud or laches of the grantor could work a forfeiture of estates he had created by the most solemn conveyances. Whatever may be the force and effect of the judgment or decree against the grantor, if it is sought to be used to the prejudice of the grantee, 'there must be independent, distinct evidence of the facts which authorized its rendition. — McLemore v. Nuckols, 37 Ala. 662; Branch Bank at Montgomery v. Hodges, 12 Ala. 118; Spencer v. Godwin, 30 Ala. 355.

2. The whole theory of the original bill filed by Mrs. Coles, in which the decree against Connor was rendered, rests upon the proposition, that Connor had employed the funds in his hands as guardian, in purchasing the lands mortgaged, taking title to himself, whereby a trust of. the legal estate resulted to her; or that subsequent to the purchase he applied such funds to the payment of the notes given for the purchase, thereby creating an equity in her to charge the lands with the repayment of the funds so applied. The proposition, in either aspect, is wholly unsupported by the evidence. It is well settled, that if a trustee employs the moneys of the cestui que trust in making a purchase of lands, and takes to himself the conveyance of the legal estate, by operation of law a trust results to the cestui que trust; and a payment of part of the purchase-money will, to the extent of the payment, create a corresponding trust. But, to the creation of the trust, as was said by Chancellor Kent, in Botsford v. Burr (2 Johns. Ch. 414), “the trust must have been coeval with the deeds, or it can not exist at all. * * * "" * * The resulting trust, not within the statute of frauds, and which may be shown without writing, is when the purchase is made with the proper moneys of the cestui que trust, and the deed not taken in his name. The trust results from the original transaction, at the time it takes place, and at no other time ; and it is founded on the actual payment of money, and on no other ground. It can not be mingled or confounded with any subsequent dealings whatever. They are governed by different principles; and the doctrine of a resulting trust would be mischievous and dangerous, if we once departed from the simplicity of the rule.”

The authorities in this court, and elsewhere, following this clear statement of principle, certainly leave no room for doubt, that a resulting trust springs from the original trans action, and that it is impossible to raise it, so as to divest the legal estate, by the application of the funds of a third person, whether he is a principal or a cestui que trust, to satisfy the unpaid purchase-money. Connor had purchased the lands, and received a conveyance of the legal estate, eighteen months before he became the guardian of Mrs. Coles, giving his own notes for the purchase-money; it not being then contemplated that he would become her guardian. The note for the purchase-money,' first falling due, was paid with his own funds, more than twelve months before he became guardian; and the other note, about two months before he became guardian, with moneys borrowed from his predecessor in the guardianship, for which he gave to him promissory notes. Now, that no resulting trust can be raised upon these facts, is too clear for argument.

3. Nor was an equity to charge the lands with the payment of the money borrowed by Connor, created by the transaction with Upshaw, the former guardian, though it was contemplated, when the loan was made, that Connor would, on Upshaw’s resignation, become guardian, and receive as money his own notes. There was then no fiduciary relation between Connor and Mrs. Coles; and when the money was received by Connor, on loan, it became his own money, for the repayment of which he was liable at all events. No diligence on his part, in keeping the money, could have absolved him from the obligation and duty of repayment, though by accidents, against which human prudence could not guard, it had been lost.

4. It is unnecessary to enter on the inquiry, whether, if there was a resulting trust, or an equity residing in Mrs. Coles to charge the lands, the mortgagees are entitled to protection as bona fide purchasers. The mortgage is a valid security for a debt, which we concur with the chancellor in regarding as well established; and the evidence does not establish the trust or the equity. Consequently, the mortgagees were clothed with a title, which the appellants have no right or interest in questioning. The title is derived from the mortgage — that is its origin and source; and that having been executed before the commencement of Mrs. Coles’ suit against Connor, there is no room for the application of the doctrine of lis pendens.

Let the decree be affirmed.