Kennerson v. Nash

Loring, J. When A., who has agreed by word of mouth to buy land as an agent for B., betrays his trust and buys it in his own name for his own account, the statute of frauds prevents B. maintaining a bill in equity to have A. decreed to hold the land for him, B. That is settled, at least in this Commonwealth. See Tourtillotte v. Tourtillotte, 205 Mass. 547, where the earlier cases are collected; in addition to those there cited see Hall v. First National Bank, 173 Mass. 16. The reasons of this rule and the effect of it are stated with accuracy in Bourke v. Callanan, 160 Mass. 195, 196, 197. That in effect has been conceded by the plaintiff in the case at bar, and he has sought to escape from it by making out a resulting trust on the ground that in the case at bar the purchase money was paid by him. But the purchase money was not all paid by him. The purchase money was $1,000 in cash paid on the day of the foreclosure sale (August 19), and a mortgage back for $28,000 given on the day when the defendant received the deed pursuant to the foreclosure sale (August 24). The defendant had agreed to lend the plaintiff the $1,000, and for that reason that sum in legal contemplation might be held to be his money within the doctrine of Kendall v. Mann, 11 Allen, 15, [398] acted upon in McDonough v. O'Niel, 113 Mass. 92. But the mortgage back was made by the defendant, and on the master’s report it must be taken that the defendant alone signed the mortgage note. Where the purchase money is made up in part of cash furnished by the plaintiff (but not for an aliquot share) and in part of a mortgage back made by the defendant, there is no resulting trust in favor of the plaintiff. That was decided in Dudley v. Dudley, 176 Mass. 34, and Olcott v. Bynum, 17 Wall. 44. It was conceded in McGowan v. McGowan, 14 Gray, 119; and it was one of the grounds of the decision in Bourke v. Callanan, 160 Mass. 195. The facts in McDonough v. O’Niel, 113 Mass. 92, were quite different from those in the case at bar and from those in the cases cited above of Dudley v. Dudley, McGowan v. McGowan, Olcott v. Bynum and Bourke v. Callanan. In the case of McDonough v. O'Niel, the purchase price was $3,000. Fifteen hundred dollars of this was paid in cash lent to the plaintiff’s testator, and the other $1,500 was paid by a mortgage back made by the defendant to take the place of a mortgage for that amount which was on the land when it was bought by the plaintiff. It is stated in the opinion in McDonough v. O'Niel that Clements, who held the previous mortgage for $1,500, “ testified that before the purchase the defendant came to see if that mortgage could lie on the property, and told him that he was going to buy the land for the testator, and was told by the mortgagee that he must give a new mortgage, as he afterwards did, in discharge of the old one.” It is because of this fact that it was said in the subsequent cases of Bourke v. Callanan, 160 Mass. 195, 196, and Dudley v. Dudley, 176 Mass. 34, 37, that the purchase in McDonough v. O'Niel was the purchase of an equity of redemption. No such view however can be taken of the case at bar. The purchase in the case at bar was a purchase at which $1,000 had to be paid in cash on the day of the sale. That means that the balance had to be paid in cash on delivery of the deed. And there is an express finding by the master in the case at bar that “ after the sale the defendant arranged with said Fallon for a new mortgage to one Nehemiah W. Bice for twenty-eight thousand dollars ($28,000) ” which was the mortgage back. Not only that but under the original arrangement by which the [399] defendant agreed to lend the plaintiff the $1,000 to be paid down on the day of the foreclosure sale the mortgage back was to be made not by the defendant for the benefit of the plaintiff but by the third person who was to be employed by the plaintiff to buy in the property for the benefit of the plaintiff and the defendant. On the findings of the master the purchase here in question was a purchase of unincumbered land which the defendant carried through by paying $1,000 which he had agreed to lend to the plaintiff and by giving on his own account a mortgage back for $28,000. In such a case it is settled by the cases cited above that there is no resulting trust in favor of the plaintiff. The entry must be Bill dismissed.