Skeen v. Marriott

61 P. 296, 22 Utah 73, 1900 Utah LEXIS 9

• Court: Utah Supreme Court
• Decided: May 11, 1900
• Status: Published

Opinion

A statement of the case having been made as above,

Bartch, C. J.,

delivered the opinion of the court.

It is obvious that the principal and decisive question presented on this appeal is whether an express trust was created, by the transactions disclosed by the evidence, for, if the plaintiffs are at all entitled to recover in this action, it must be because of such a trust. If a trust was created in this instance, it must rest on parol, for there is no writing on which it can be based. There is no doubt however that a trust in personal property may be declared admitted, or created by parol declarations, and may be proved by parol evidence. Pomeroy’s Eq. Jur. Sec. 1008. The statute of frauds does not apply to trusts of personalty created by word of mouth, although this is otherwise as to trusts of realty. Trusts are enforced in equity and are distinct from the legal estate, in so far as they are merely fiduciary interests. In .this respect they are what - uses were before the statute. In principles, it seems, there was no difference between the ancient use and the modern trust, but there was a wide difference in the application of them. By a more liberal construction of those principles and greater care against abuse, trusts are now made to answer, in general, all the beneficial ends in uses, without their inconvenience or frauds. 2 Bl. Comm. 337. An express or direct trust is usually created by an instrument in writing, which specifies distinctly the person, property and purposes of the trust. In such case the intention to create the trust must appear upon the face of the instrument. Since the statute, it is the generally accepted law of the country that where the trust relates to the disposition óf real estate it must be declared and proved by some writing executed by the person creating the trust. 4 Kent Com. 305.

It has been held, however, that, if a person procure the conveyance of land to him upon the assurance that he will- hold it in trust for another, the trust may be established by parol testimony of the grantor, and that if the land be sold by the grantee, the cestui que trust, may sue for the price. Miller v. Pearce, 6 Watts & S. 97.

A trust may be either executed or executory in kind. When the legal estate, or, if the equitable title passes, in either case', it is executed, but when the trust is to be perfected at some future time by settlement or conveyance it is executory, and the same rules which govern trusts of realty govern trusts of personalty. 1 Perry on Trusts, Sec. 16.

In the application of principles, a court of equity regards the trust as the property and the declaration of trusts as the disposition of the property, and a disposition of property by way of a trust is as effectual and binding upon the parties, as if the property be disposed of by any other means of absolute conveyance. It is therefore, essential to the establishment of a trust, that the person who creates it, be the real owner of the property which is to constitute the trust or fund. So, it is essential that the language, employed in the creation of a trust, should be such as to leave no room for reasonable controversy, as to the intern tion of the donor.

In general, every person competent to make a will, •enter into a contract, or hold the legal title to and manage property, may dispose of it as he chooses, and sui juris, has the power to create a trust and dispose of his property in that way, but in doing so he must use language showing that such disposition is intended by him. To fasten a trust upon personalty, by parol, the same as where a trust of realty is created, the language used must amount to a clear and explicit declaration of trust. The declaration relied upon must point out with reasonable certainty not only the property or subject-matter of the trust, but also the purposes thereof, and the person or persons for whose benefit the trust is created.- Indefinite, vague, and equivocal expressions are not sufficient; nor are declarations of a purpose to create a trust, dr mere voluntary promises to give property to a person or persons, or to dispose of it in the future for the benefit of such person or persons, when such promises remain unfulfilled, sufficient to create a trust, or any right which a court of equity will enforce. Nor is a mere intention or mere voluntary agreement to create a trust, where the owner of the property contemplates some further action by him to make it effectual, sufficient to establish the trust.

It is absolutely essential that the evidence to establish a trust resting on parol should be clear, unequivocal and explicit, and not conflicting in character, as to material points, for if the.terms and object of such a trust be left in doubt or confusion a court cannot enforce it. No particular form of words, -however, is requisite in the creation of a trust, nor for a person to declare himself a trustee. If the owner of personal property transfers it to one person for the use of another in definite and positive terms, or if such owner unequivocally declares, in writing or orally, that he holds it in prcesenti in trust for another person, in either case the trust will be upheld. In either of such cases the trustee is liable and must account to the cestui que trustj and, when once effectually created by parol the trust cannot afterwards be altered or revoked by the person who created it, the same rules governing as where a trust is created by writing.

“If the trust is perfectly created, so that the donor or settler has nothing more to do, and the person seeking to enforce it has no need of further conveyances from the settler, and nothing is required of the court but to give effect to the trust as an executed trust, it will be carried into effect, at the suit of a party interested, although it was without consideration, and the possession of the property was not changed.” 1 Perry on Trusts, Sec. 98.

In Beach on Trusts and Trustees, Sec. 52, it is said: “In the creation of a trust in personalty, as well as in real estate, the language employed must be definite and positive. The property which is the subject-matter of the trust must be clearly and definitely described; the purposes of the trust must be plainly indicated, and as well the -person or persons who are to be the benficiaries. Ambiguous or vague and indefinite expressions will not be held to create a trust. In addition to this, the proof of the trust must be unequivocal. The declaration of a purpose to create a trust is of no value, and a promise to make a donation at some future time, where there is no consideration, at best is only an imperfect gift, and will not be upheld as a trust.” 1 Perry on Trusts, Secs. 24, 77, 86, 97, 252; 2 Pomeroy on Eq. Jur. Secs. 997-8, 1009; 27 Am. & Eng. Ency. Law, 54-5; Hamilton v. Halls Estate, 111 Mich. 291; Harris v. Bratton, 34 S. C. 259; McGinnis v. Jacobs, 147 Ill. 24; Roche v. George’s Ex’or, 93 Ky. 609; Beaver v. Beaver, 117 N. Y. 421; Chambers v. Emery, 13 Utah, 374; Crissman v. Crissman, 28 Mich. 217; Dalton v. Dalton, 14 Nev. 419; Harrison v. McMennomy, 2 Edw. Ch. 251; Stone v. Bishop, 28 Fed. Cas. 154; Allen v. Withrow, 110 U. S. 119.

The question remains whether, in the light of the foregoing well settled principles, the evidence in the case was sufficient to show that a trust had been established in, favor of the plaintiffs, who are children of the defendant and his first wife

The appellants contend that the note of $4,000' was the property of Trezor Southwick and that on February 15, 1888, she delivered it to the respondent for the use and benefit of those children, and thereby created an irrevocable trust

For the respondent it is maintained that the note belonged to the defendant Marriott, and that he never received it or the money which it represented, in trust for his children, and it is further insisted that, even if it were assumed that Trezor Southwick was the absolute owner of the note or money, still there was no creation of a trust, nor the conferring of any power, the exercise of which the court could enforce. «

After careful examination of the testimony we are compelled to concede that the position of the responent is well founded. The evidence shows that the defendant Marriott owned the property out of which the fund was realized, and in the year 1886, fearing that he would be prosecuted and sent to prison, as he afterwards was, conveyed it to Mrs. Southwick his plural wife, with the parol agreement, or understanding between the parties, that when he returned from the penitentiary the property was to be reconveyed to him.

After his return both parties, it appears, recognized and treated the property as belonging to him; and the vendee repeatedly, in accordance with their understanding, offered to re-convey, but for some reason, not appearing, this was not done, and finally the defendant sold the property to a stranger, who arranged with him to retain $4,000 of the purchase price for a year, and, because the title stood in the name of Mrs. Southwick, it was thought best to execute the note, which was dated February 15, 1888, to her, and then she could endorse it over to the defendant, all of which was done. Afterwards the defendant collected the money and used it in the purchase of sheep and otherwise. Counsel for the appellants insist that the parol agreement to reconvey the real estate was void under the statute of frauds, that, if the conveyance was made with" intent to defraud the United States government, the title passed absolutely between the parties; and that therefore the property belonged to Mrs. Southwick. Suppose we accept it as true that the conveyance passed title to the vendee absolutely, as between the parties and that she was under no legal obligation to re-convey because of the parol agreement, can it be said that, under the circumstances, there was no moral obligation for her to perform that agreement ? The conveyance was made to her without consideration, and she knew all about the reasons.why it was so made and accepted the instrument knowing what the understanding or agreement was without protest.

The circumstances in evidence disclose no imposition, oppression or undue influence. The arrangement seemed to be entirely satisfactory to the vendee. While the conveyance was made to her in contemplation of a criminal prosecution, and probably to avoid seizure of the property, there were then no existing rights of any third party disturbed thereby. She was, therefore, under the same moral obligation, to perform the agreement and .restore the property as she would have been, if the agreement had been in writing, and there had been no question of fraud connected with the transaction, and if she had re-conveyed under the agreement and circumstances, she would have effectually divested herself of all title to the property, and would thereafter have been estopped from making any claim thereto, ■ because of the original conveyance to her. If she had made a re-conveyance, the law would not, in the absence of interposition oh the part of a creditor assist her to recover the property back. The law is not so inequiteble and unjust as to prevent a person from fulfilling his obligations of good faith and honor. Such a reconveyance, under the circumstances disclosed, would not have fallen within the statute of frauds, but would have vested the title in the defendant as effectually, in law and equity, as any other conveyance from what source soever.

In Waite on Fraudulent Conveyances and Creditors Bills, Sec. 398, it is said: “Though a reconveyance cannot be enforced, the fraudulent vendee is said, in some of the cases, to be under a high moral and equitable obligation to restore the property. The law is not so unjust as to deny to men the right, while it’ is in their power to do so, to recognize and fulfill their obligations of honor and good faith. And until the creditors of the vendee acquire actual liens upon the property, they have no. légal or equitable claims in respect to it, higher than or superior to, those of the grantor. It has been contended that the transfer only made visible an ownership which already existed, though secretly. While the fact that title to real estate was put in one to hold for another with intent to defraud creditors, might be a defense by the trustee in an action to establish the trust, yet where the trust has been completed by a conveyance to the equitable owner the principle has no application.”

In Springfield Homestead Ass. v. Roll, 137 Ill. 205, Mr. Justice Bailey said: “While a fraudulent grantee is under no legal obligation to reconvey, he is under a moral obligation to do so, and where, in fulfillment of his moral obligation, he actually makes a reconveyance, such act will be valid and binding on him, and if the rights of no innocent third parties have intervened, the fraudulent grantor will become reinvested, both at law and in equity, witbrthe title previously conveyed to his grantee. Such reconveyance is not within the condemnation of the statute of frauds, but vests in him to whom it is made a title which the courts will recognize and protect precisely as they would a title derived from any other source.” Bump on Fraud. Conv., Sec. 448; Wait on Fraud. Conv., etc., Sec. 399; Fargo v. Ladd, 6 Wis. 106; White v. Brocaw, 14 Ohio St. 339; Mahan v. State of Ohio, 10 Ohio, 231; Wolford v. Farnham, 47 Minn. 95; Wait v. Day, 6 Denio, 439; Star v. Wright, 20 Ohio St. 97.

If, as we have seen, a reconveyance of the property would have bound Mrs. Southwick, and revested the title in her grantor, then, as no reconveyance was made, but the property was sold to a third party, without objection on her part, she simply expressing a desire that another home be purchased for her out of the proceeds, which was dope, the delivery -of the note,' which represented the remaining portion of the purchase money, to him, was binding upon her and vested the title to it in him, unless she imposed some valid conditions as to such delivery; for precisely the same principles are involved in either case.

“Had Summer W.,” says Mr. Chief Justice Gilfillan,-in Wolford v. Farnham, 44 Minn. 159, a case cited by the appellants, “upon the sale of the third interest in the Hennepin island property, paid or transferred the purchase money to Eunice E. in performance of the parol trust, that act would have been binding, and the money would have become hers as between the two.”

In this case, the note, which evidenced a portion of the purchase price or proceeds of sale, was delivered to the grantor, under the parol agreement, by the grantee, and the money collected and appropriated by such grantor. It, therefore, remains to be seen, assuming but not admitting that Mrs. Southwick was the owner of the property, whether the delivery was made upon valid conditions, or, in other words, whether she delivered it in trust as claimed. The evidence on this point shows that because the title to the property stood in her name, the note was executed to Mrs. Southwick and she indorsed it over to the defendant.

She testified that after he sold the place he said to her, “I want you to give me $4,000 of that money for my first wife’s children;” and that she did so, “thinking that he would keep that money for those children.” She further stated that he said he would reserve the money for those children at his death; that she did not name the beneficiaries; that she left the matter of provision for those children entirely to him, and was willing to let him protect them. It is shown in evidence that he claimed and treated the property and proceeds of sale as his own, and Mrs. Southwick in her testimony stated that he was the right one to have it, and was willing that he should claim it. Asked, on the witness stand, whether he said anything about keeping the $4,000 for his first wife’s children, the defendant said: “No, sir; it was mine. I could do as I liked with it.”

The record contains other similar expressions and statements, and there is much conflict in the evidence as to what was actually said between the parties as to the $4,000. ’

It may thus De seen that the language relied upon, for the creation of the trust by Mrs. Southwick, is ambiguous indefinite and equivocal, and when such language is considered in connection with the fact that years have elapsed since the transaction, and with the further fact that the person who delivered the money named no beneficiaries and served no notice of the trust, during all those years, until shortly before the commencement of this suit, upon any of these, who, it is claimed, were named as cestuis que trust, by the donee, it is impossible to conclude that a trust was established by her which a court can enforce. Evidently Mrs. Southwick, having been provided with another home out of the proceeds of sale, in accordance with her insistance, and feeling the moral obligations resting upon her, because of the parol agreement, endorsed and handed to the defendant the note as his own property, and, as she says, was willing that he should claim it, and to leave the matter of providing for his children entirely to him.

Mrs. Southwick having created no trust, the next and remaining inquiry is, did the defendant declare an express trust and constitute himself a trustee to hold the money, or the sheep and other property purchased therewith, for the use and benefit of his four children, plaintiffs in this case?

The defendant himself testified at the trial that ever since the sale, in 1888, he claimed the $4,000, and property he purchased with it, as his own, and claimed the right to do with it as he pleased. There is evidence showing that he used the money and managed the other property as an owner. Then there is also evidence showing, among other things, that, from time to time he promised to give the property to four of his first wife’s children, naming those who are plaintiffs herein: that he stated that he expected to reserve the fund for them; that he was going to give it to them at his death; and that on numerous occasions he promised to fix the matter up so that they would get the property at his death. Other similar testimony appears in the record, and, as to mate-, rial facts, it is conflicting. Some of the witnesses attempted to state the exact language used in conversation by the alleged trustee, notwithstanding the great lapse of time intervening since such conversation had occurred. The evidence is too indefinite, uncertain and equivocal. Stripped of useless and immaterial matter, it consists substantially of nothing more than, statements of of admissions and declarations of his intention to provide for his first wife’s children at some time in the future, or at his death, and the proof of the admissions and declarations depends entirely upon the uncertion recollection of the witnesses, as to the exact language employed by the alleged trustee, at a time long anterior to the giving of the testimony.

Such proof is frequently of a most unreliable and dangerous kind, and, while, as we have seen, an express trust, may be -established by parol evidence, still, when, as here, it is sought to establish such a trust, and divest a person of the title to his property and of its use and enjoyment, by proof of admissions and declarations of the owner, the court will receive and consider tbe evidence of tbe same with great caution. Respecting sucb testimony, this court, in Chambers v. Emery, 13 Utah, 374, said: “Evidence of tbis class depends wholly upon tbe uncertain recollection of witnesses, wbo, through lapse of time, or mistake, or imperfect understanding, or improper or corrupt motives, may represent the deceased as having expressed an idea precisely tbe reverse of what was intended by him. Often, too, tbe slightest variation, by tbe witness, from tbe language employed by tbe deceased, or a different intonation or inflection, may impart an entirely different thought from that in tbe mind of tbe speaker at tbe time of tbe declaration, Reflection upon tbe inaccuracy of ordinary witnesses in tbe use of language, upon their want of original comprehension of a conversation, their liability to connect subsequent facts and circumstances with tbe original transaction, tbe impossibility of their recollecting, translating and reproducing the exact terms employed in a conversation, especially after a considerable lapse of time, must impress upon every lawyer and jurist wbo has bad experience in tbe trial of causes tbe danger of placing substantial reliance upon tbis class of testimony.” 1 Greenl. Ev. Sec. 200

It is true, here, tbe alleged trustee testified, but be was very old and feeble in mind and body and died shortly after tbe trial. There was no writing to show that be bad disposed of bis property in trust for bis children. It 'all rests on parol.

For us to bold that the proof in tbis case is sufficient to establish an express trust, would be to open the doors to fraud and endanger the titles of individuals to their property.

While, however, we are clearljr-of the opinion that the proof is wholly insufficient to establish a trust, there is evi-deuce in tbe record tending to show tbat the defendant provided in his lifetime equitably out of his estate*, for all his families and children, except the four who are plaintiffs herein; that he intended also to provide for these four before his death; and that the property here in controversy, in justice ought to belong to them as their proportionate share of their father’s estate. If these things be true, then the unavoidable misfortune which will come to those children upon the announcement of this decision musí be attributed to the neglect, unintentional doubtless, on the part of the owner of the property, to declare an effectual trust, and the infirmity of human law to reach such a case. In such event, ourselves powerless, we can ljut hope and trust that the love and affection which ought to exist in every household, and the ties of consanguinity will be strong enough to do that justice which the security of title to property forbids us to do. While in such a case, under such evidence, a trust can neither be established nor enforced by a court, yet, as we have seen, the law is not so unjust as to prevent the parties themselves from discharging obligations of good faith and honor.

■ Having thus decided the case upon its merits, it becomes unnecessary to pass upon or discuss any of the other questions presented, although they have not escaped our notice.

The judgment is affirmed, with costs.

Miner, J. and Baskin, J. concur.