Davis v. Pearce

205 S.W.2d 653, 1947 Tex. App. LEXIS 1216
CourtCourt of Appeals of Texas
DecidedOctober 24, 1947
DocketNo. 14873
StatusPublished
Cited by5 cases

This text of 205 S.W.2d 653 (Davis v. Pearce) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Davis v. Pearce, 205 S.W.2d 653, 1947 Tex. App. LEXIS 1216 (Tex. Ct. App. 1947).

Opinion

McDONALD, Chief Justice.

Appellant, as plaintiff in the court below, sued defendant for title and possession of a house and lot located in Greenville. The substance of plaintiff’s claim is that he paid the purchase price, that title was taken in the name of defendant by virtue of an agreement made before the purchase that defendant would hold the property for plaintiff’s benefit and would convey it to plaintiff upon his demand, and that, as a consequence, there arose a resulting trust in plaintiff’s favor.

There appears in the statement of facts a stipulation to the effect that at the time of trial there was an outstanding lien against the property to secure a debt of $2600 owing to a third party, and that any judgment entered should be subject to such lien. It is not disputed that plaintiff paid the down payment, and that he also paid several hundred dollars on the debt against [655]*655the property. The conveyance names defendant'as the grantee, and recites the assumption by defendant of the indebtedness against the property.

In a trial without a jury the court below rendered judgment in favor of defendant. He filed separate findings of fact and conclusions of law, which are in substance as follows: 1. On December 24, 1943, plaintiff purchased said property for the use and benefit of defendant. 2. Plaintiff intended to and did vest title in defendant. 3. The total consideration for the purchase of the property was approximately $3400. The down payment of $532.20 was made by plaintiff. 5. The property was encumbered with an indebtedness of approximately $2800, which was assumed by defendant. 6. Plaintiff, after the property was purchased, made payments on the indebtedness in approximately the amount of $440, said payments being made in accordance with an agreement and understanding between plaintiff and defendant that plaintiff would make the payments for her. 7. The deed was delivered to defendant and was duly recorded. 8. At no time was there any intention or agreement between plaintiff and defendant that defendant would convey the property to plaintiff when he should demand it. 9. The consideration which induced plaintiff to purchase the property for defendant was the following: (a) During the year 1933 plaintiff was a married man about 65 years of age and defendant was a widow about 25 years of age. She was the mother of three children, and was then living on one of plaintiff’s farms, (b) During 1933 plaintiff began keeping company with, or having dates with, defendant and such relation continued between plaintiff and defendant for about twelve years, until a short time before the present suit was filed, (c) During the time of such relationship defendant drove plaintiff’s automobile for him on business trips; she accompanied him to his various farms; she assisted him in keeping a record of his rents and subsidy payments from the Government; plaintiff spent a great deal of time in defendant’s home; defendant mended, cleaned and pressed plaintiff’s clothing; defendant nursed plaintiff during his illness; defendant cooked and prepared meals for plaintiff. 10. During the time plaintiff was keeping company with defendant he was extended sexual favors by defendant and as the result thereof she became pregnant and bore him two children.

The conclusions of law read as follows:

“In the absence of an intention or agreement of the parties hereto, as shown by the foregoing findings, that the property in question was to be conveyed to the plaintiff on his demand, I conclude, as a matter of law, no trust was created in the purchase of the property in controversy and that the plaintiff acquired no equitable lien upon' said property for the payments he made on the same.

“The deed of conveyance to the above described property executed by Fred H. Lowe and wife, Aline Lowe, to the defendant, Opal Pearce, having been delivered to her by the plaintiff herein after its purchase, I conclude that title to the same effectually was vested in the defendant.”

Plaintiff’s appeal is based on five points of error. We shall discuss all of the contentions raised under them.

Plaintiff’s claim of a resulting trust in the property is 'based on the fact that he paid the down payment and all that had been paid on the indebtedness against the property up to the time the present controversy arose. Clear statements of the rules governing resulting trusts of this kind are contained in Volume Two, Restatement of the Law of Trusts, beginning at page 1339. A resulting trust of this sort does not depend on an agreement of the parties. If there is an agreement of the parties that the property shall be held in trust, an express trust arises. See pages 1352, 1353. If the agreement of the parties is depended on to establish the trust, it must be a valid one under the Statute of Frauds. An oral agreement may be proved, not to create an express trust, but to negative the inference that the settlor intended that the conveyance should be for the benefit of the grantee, as, for instance, in case of a gift of the property. Thus, proof of an oral agreement that the property should be held in trust and that the grantee in the conveyance would convey it on demand, will [656]*656•not establish an express trust, nor will the lack of such an agreement necessarily defeat the claim of a resulting trust. An example of a resulting trust is set out at page 1342:

“1. A purchases the land and pays the purchase price to the vendor and at his direction the vendor transfers the land to B. B holds upon a resulting trust.”

The resulting trust is based on the inference that although A consented to the transaction, he did not intend that B should have a beneficial interest in the land. The general rule is stated on page 1343:

“Where a transfer of property is made to one person and the purchase price is paid by another, a resulting trust arises in favor of the person by whom the purchase price is paid, except as stated in ## 441, 442 and 444.”

The resulting trust arises even though the deed recites that the consideration was paid by the grantee named in the deed. Page 1345.

But, as above indicated, there are exceptions to the general rule. For instance, at page 1348 it is said:

“a. Manifestation of intention that transferee should have the beneficial interest. Where a transfer of property is made to one person and the purchase price is paid by another, the inference that a resulting trust was intended is rebutted if it appears that the payor intended that the transferee should have the beneficial interest in the property transferred. 'This is the case where it appears that the payor intended to make a gift of the property to the trans■feree (see # 447) or to make a loan of the purchase price to the transferee (see # 445). So also, no resulting trust arises where the purchase price was paid to discharge a debt or other obligation owed by the payor to the transferee (see # 446).”

In order to determine whether the one paying the consideration intended to make a gift of the property, or, to put it another way, in order to determine whether he did or did not intend that the property should be held for his benefit, the court -may consider declarations made by him as to his intentions before, at the time of, or subsequent to, the time of the transfer of the property. Page-1348. Thus, his Oral declarations áre admissible to show that he intended that the transferee should have the beneficial interest in the property. As a resulting trust arises from parol evidence, so it may be rebutted by parol evidence. Pages 1348, 1349.

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Bluebook (online)
205 S.W.2d 653, 1947 Tex. App. LEXIS 1216, Counsel Stack Legal Research, https://law.counselstack.com/opinion/davis-v-pearce-texapp-1947.