Kern v. Smith

139 A. 450, 290 Pa. 566, 1927 Pa. LEXIS 690
CourtSupreme Court of Pennsylvania
DecidedMay 18, 1927
DocketAppeal, 164
StatusPublished
Cited by26 cases

This text of 139 A. 450 (Kern v. Smith) is published on Counsel Stack Legal Research, covering Supreme Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kern v. Smith, 139 A. 450, 290 Pa. 566, 1927 Pa. LEXIS 690 (Pa. 1927).

Opinion

Opinion by

Mr. Justice Kephart,

A committee, representing a fraternity of college students, in 1920, entered into a contract with the owner of 3611 Locust Street, Philadelphia, to purchase that property. James A. Smith, one of the defendants, was a member of that committee. It was arranged, after some intermediate negotiation, that Smith should take the title for the appellees, and, at the expiration of four years, on repayment to him of certain advances, he was to convey the premises to a corporation to be organized by the appellees, The fraternity was not incorporated *569 at the time of the preliminary contracts. During the interim of four years, Smith leased the property to the fraternity. Instead of taking title in his own name, as,, provided in the agreement, and without the knowledge of the appellees, Smith permitted the property to be conveyed to his wife, who had full information of the arrangements between the committee and her husband. The purchase price was $8,000. It was to be accounted for in the following manner: $1,000 was to be paid by the fraternity; a first mortgage of $3,000 on the property at the time of purchase was to remain; $3,000 was to be raised by a second mortgage to be placed thereon; and $1,000 was to be advanced by Smith. Appellees paid $1,000 on account of the purchase price, and an additional sum of $150 was paid to Smith.

The property was conveyed to Mrs. Smith in performance of the owner’s contract to sell to Russell M. Cox, treasurer of the fraternity, and there was no contract of any nature between the vendor and Mrs. Smith. Neither Mr. nor Mrs. Smith paid any of their money on account of the purchase price. Smith, hoAvever, advanced money that was to be repaid by the fraternity. As late as May, 1924, Smith agreed to transfer the property, but in June of the same year, after the committee learned the title was in her name, his wife declined to carry out the contract when tendered the money advanced; thereupon this bill in equity to compel performance of the contract was filed, and the facts above related were found by the court below. Specific performance was decreed; defendants have appealed.

We have carefully examined the evidence in support of the findings, and while there are many contradictions, they are all supported by evidence. The findings of a chancellor, based on evidence and approved by the court below, must be given the same weight as the verdict of a jury and will not be disturbed on appeal: Glenn v. Trees, 276 Pa. 165; Miller v. Trust Co., 285 Pa. 472; Houghton v. Kendrick, 285 Pa. 223.

*570 As we said above, the vendor agreed to sell to Cox, agent of the committee. Through the insistence of Smith, another building and loan was substituted for the one proposed by the fraternity to lend the money to complete the bargain. This circumstance, with the offer to advance $1,000 to enable the conveyance to be made, caused the appellees to agree to place the title in Smith’s name rather than Cox’s. Smith agreed in writing to convey the property to the fraternity within four years, when he was to be repaid his advancement. As agent of the fraternity, he could not obtain title for himself against their interest. This would have been a fraud, and where one employed to buy land for another uses the opportunity to his own advantage, a trust relation will spring from such fraud: Schrager v. Cool, 221 Pa. 622. Even if the arrangements were altogether oral, Smith could not have held title as against his principals as the purchase-money was paid by the fraternity. A resulting trust arises from such payment when it is proved by competent evidence, as it was in this case: Lloyd v. Woods, 176 Pa. 63; Gates v. Keichline, 282 Pa. 584; Hoover v. Strohm, 44 Pa. Superior Ct. 177. The fact that the agent was to, and did, advance additional money to enable title to pass will not change the result so far as the enforcement of the trust is concerned : Schrager v. Cool, supra.

Title was taken in the name of the wife. She executed no writing, and, if plaintiffs are entitled to a decree against her, it must be upon the theory that she holds the property subject to a resulting trust for the benefit of those who paid the purchase-money. This must necessarily be proved by parol evidence, but there can be no objection to this, since our Statute of Frauds (Act of April 22, 1856, P. L. 533) expressly excepts from its operation, a trust in land arising or resulting by implication of law. As early as Evans’s Est., 2 Ashmead, 470, and in a long line of cases to Gates v. Keichline, supra, this court has repeatedly held that when title to land is *571 taken in the name of one person but is paid for with the money of another, a trust in favor of the latter results by implication of law, and such trust may, under the statute, be established by parol evidence. Where an agent to buy land, who receives the purchase-money called for by an agreement, procures or permits the title to be placed in the name of a third person who has knowledge of the deal, he will not be permitted to retain the title as against the principals lawfully claiming it, unless the third person has independent rights to be protected.

In considering the evidence to sustain the findings of fact, we have kept in mind the rule that there is a strong presumption of right in favor of one in whom the title is lodged by deed; he cannot be deprived of it by anything less than a direct attack made and maintained by clear and consistent proof that the deed, although absolute in form in the supposed vendee, is in reality for the use and benefit of those who claim under the resulting trust. We repeat that the presumption in favor of the titleholder is a strong one and cannot be overcome except by clear, satisfactory evidence to the contrary; it should not be subjected to the peril of attack by evidence of any other character. Every element essential to the existence or creation of a resulting trust in a given case must be made to appear by evidence that is clear, explicit and unequivocal: Earnest’s App., 106 Pa. 310.

It is urged that the allegations in the bill of complaint and the proofs submitted were so widely at variance that the court below should have dismissed the bill. The motion to dismiss was in the following form: “I move to dismiss the bill on the grounds of material variance between plaintiff’s allegata and probata.” Where a motion is made to dismiss,, the reasons for so doing should be set forth with sufficient clarity to enable the court below to act intelligently thereon, otherwise the motion need not be considered. The motion was made at the close of appellee’s case. It did not con *572 tain a single specification of variance from among the many now assigned in this court. The court below, on the motion as quoted, was not required to do anything more than overrule it.

We shall consider in detail two of the reasons now urged in support of the motion to dismiss: (1) the failure of the appellees to set out the lease in the bill, and (2) that the bill averred payment to the vendor by the fraternity of $400 while the proof showed it to be $600. A material variance consists in a substantial departure from the issues on which the cause of action must depend. If the evidence can reasonably be made to conform with any of the pleadings, there is no variance.

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Bluebook (online)
139 A. 450, 290 Pa. 566, 1927 Pa. LEXIS 690, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kern-v-smith-pa-1927.