Watson v. Payne

JOHNSON, J. Plaintiffs alleged that as beneficiaries of a trust declared in their favor by their grandfather, they are entitled to receive the entire trust fund, and this suit is to recover it from the estate of their grandfather who died testate in Sullivan county, November 26, 1906. The answer is long, but its legal effect is to deny the existence of a trust and to plead the statute of limitations. The court resolved the issues in favor of plaintiffs and rendered judgment against defendant executor for $1400. Defendant appealed. Plaintiffs were the children of John S. and Martha J. Page. Addison Payne, a man of wealth who lived in Sullivan county, was the father of Mrs. Page. In 1894, Mrs. Page became the owner in fee simple of a farm of one hundred and twenty acres in Linn county. Her husband was insolvent at that time and was much indebted to her father. Seven months later, Mrs. Page died intestate owing some debts. One of the creditors of her estate procured the appointment of an administrator. The demands allowed against the estate and the expenses of administration amounted in all to $251.68. There was no personal estate and in 1897, the farm was sold at administrator’s sale to pay the — 725 — debts. Addison Payne bought it for $251.68, the exact amount of the total indebtedness. Six months afterward, through the agency of the father of plaintiffs, he sold and conveyed the farm to a stranger for $2000. The sale was consummated December 16,1897. At that time, the ages of plaintiffs were as follows: America 26, Minnie 22, Amanda 20, Reuben 15, Caleb 13, and Plem 6. In 1895, the father of plaintiffs gave a deed of trust to one of his creditors to secure a note of $378. This deed conveyed his life estate in the land as tenant by the curtesy. The farm was worth $2000, and the value of the life estate was $1275. Addison Payne purchased this note and in April, 1897, had the farm sold-under the deed of trust and became the purchaser of the life estate. By this purchase and the purchase at the administrator’s sale, he acquired thé full legal title to the land at an outlay of $251.68 paid the administrator, and $378 paid for the note secured by the trust deed. When he sold the farm, he paid the father of plaintiffs fifty dollars for his services in effecting the sale. His total outlay was $681.68. In arriving at the amount due plaintiffs, the court deducted this sum from $2000, the proceeds realized from the sale of the land, and computed interest on the remainder from the date of the commencement of this suit. The result was a judgment in the sum of $1400. Plaintiffs contend that before he purchased the farm at the trustee’s and administrator’s sales Addison Payne declared a trust in favor of plaintiffs, his grandchildren, and that after he bought the farm and became the fee simple owner thereof, and again after he sold it, he repeated the declaration. Defendant denies that a trust was declared and his evidence tends to show that Mr. Payne, in purchasing the farm, acted solely for his own gain in the expectation that he might he able to recoup some of his own loss as a creditor of his son-in-law. There is no writing to prove the trust, but we find the evidence of plaintiffs is clear and cogent that — 726 — Mr. Payne, before be acquired the land and after he had converted it into money, repeatedly declared his intention and purpose of acting in the matter only as the trustee of his grandchildren. At the time the administrator of his daughter’s estate was appointed, he declared in the presence of the probate court that he “would buy the land, pay the debts against the estate, and if there was any surplus, would hold it for the children of Mrs. Page.” After the conversion of the land into money, he told one witness: “I got it all wound up in good shape and I am going to take care of it . . . for the Page heirs . . . they are my grandchildren and I am going to see that they get it and after they become of age why I will .pay it over to them.” Similar declarations were made to other witnesses and we find that the evidence of a declaration of a trust not only is clear but greatly preponderates in weight over the opposing evidence adduced by defendant. Further, we find there was no denial or repudiation of the trust by the trustee, though he retained the fund intact to the day of his death. Defendant is right in his contention that “an express trust as to land cannot be created by parol.” A trust of that character “shall be manifested and proved by some writing signed by the party who is, or shall be, by law, enabled to declare such trust,” etc. [Sec. 3416, R. S. 1899; Woodford v. Stephens, 51 Mo. 443; Crawley v. Crafton, 193 Mo. 421.] But this rule does not apply for the reason that the trust in question related to personalty and not to land. It is reasonably clear that it was an original purpose of the declarant that the land should be converted into money, but whether such was his avowed purpose, or whether such purpose was declared in a manner certain and definite enough to effect immediately an equitable conversion of the land into personalty, it is certain that the land was turned into money with as much expedition as the circumstances would warrant, and that after, as well as — 727 — before such actual conversion, the intention was declared of holding the proceeds in trust for the benefit of plaintiffs. We approve the doctrine expressed in the following quotation from Maffitt’s Admin. v. Rynd, 69 Pa. St. l. c. 386: “It cannot be disputed that if a deed of land be made to A and B, upon a parol trust that they will hold for the benefit of the grantor, or a third person, which parol trust cannot be enforced against the land, in consequence of 'the 4th section of the Act of April 22, 1856, Pamph. L. 533, yet if they sell the land and convert it into money, a parol declaration made by them, subsequently to such sale and conversion, will be entirely effectual.” The trust estate should be regarded as personal, not real, property. Anticipating that such might be our holding, counsel for defendant argue in their brief: “A trust as to personalty can be proved by parol, but the evidence of it must be of the most cogent and convincing character; it must be so clear, definite and positive as to leave no reasonable doubt in the mind of the chancellor. A mere preponderance of the evidence will not meet the requirements of the rule. There must be certainty in the proof beyond reasonable doubt from end to end.” Citing Mulock v. Mulock, 156 Mo. 431; Pitts v. Weakley, 155 Mo. 109; Rosenwald v. Middlebrook, 188 Mo. 58; Russell v. Sharp, 192 Mo. 271; Kirk v. Middlebrook, 201 Mo. 245; Crowley v. Crowley, 131 Mo. App. 178; Mead v. Robertson, 131 Mo. App. 185. The evidence must be convincing and the terms of the trust must be clear, definite, certain and complete. Mere preponderance of evidence adduced by the party affirming the trust will not suffice, but it would be carrying the rule to an unreasonable and unjust length to say, as defendant apparently would have us say, that the evidence of the trust must be uncontradicted. It suffices if the evidence is strong enough to thoroughly convince the chancellor that a trust was declared and — 728 — the terms of the trust are defined with clearness and certainty. The next rule invoked by defendant is that “A voluntary executory agreement to create a trust as to personal property cannot be'enforced.” But the trust under consideration is executed, not executory, and as such it may be enforced in equity and is irrevocable, though voluntary. An executed trust is one that is completely created or declared; an executory trust, one that is incomplete — a promise to create a trust. [3 Pomeroy, Eq. Jurisprudence (3 Ed.), sec. 996.] Under the rule that a promise without valuable consideration is not bind- • ing, an executory trust, i. e., a promise to create a trust, cannot be enforced if it be unsupported by a valuable consideration. But if the trust be executed, i. e., completely declared, the absence of a consideration is immaterial and it may be enforced though voluntary. [Atkinson, Petitioner, 16 R. I. 413; Harris Banking Co. v. Miller, 190 Mo. 640; Leeper v. Taylor, 111 Mo. 312; Ewing v. Lane, 31 Mo. 75.] We conclude that a valid trust was constituted in favor of plaintiffs with respect to the net proceeds of the land, including that part representing the value of ‘the life estate as well as that part representing the remainder. Defendant is in error in thinking that the statute of limitations began running against each of the plaintiffs as he became of age. “As between trustee and cestui que trust, in the case of an express trust, the statute of limitations has no application and no length of time is a bar. Against an express and continuing trust, time does not run until repudiation or adverse possession by the trustee and knowledge thereof on the part of the cestui[2 Perry on Trusts (5 Ed.), sec. 883; Wood on Limitations, sec. 200; Gillespie v. Stone, 70 Mo. 505; McNew v. Booth, 42 Mo. 189.] There was no repudiation of the trust during the lifetime of the — 729 — trustee and this point must- he ruled against defendant. Certain questions of evidence are presented by counsel, but their decision is not important. Should we resolve them in favor of the position of defendant, it would not alter the disposition we should make of the case. The judgment is affirmed. All concur.