Lamar v. Wright

The opinion of the court was delivered by Mr. Justice McGowan. On sales-day, February 3, 1887, the master of Richland County, John T. Seibels, Esq., under a decree of foreclosure in the case of “Building and Loan Association v. R. G. Lamar,” sold at public auction a small tract of land near the eastern line of the city of Columbia, containing 80 acres, more or less, as the property of the defendant, Lamar. The terms of sale were one-third cash and the remainder on one and two years’ credit. George K. Wright was the highest and last bidder at the price of $2,100. The sale was not complied with and closed up until March 17, 1887 (about six weeks), when Wright paid the whole purchase money in cash and took titles in his own name. The sale was confirmed and the proceeds were applied as follows, viz.: costs, .$189.68; to two mortgages, $1,-854.45; and the remainder upon the homestead of R. G. Lamar, which had been previously assigned in money to him, $55.87. Soon after the master’s deed was executed to Wright, R. G. Lamar sold to him the cotton seed and a pile of manure on the place for $40, and with his family left the place. Wright took possession, made a crop, and did some repairing of buildings and fences, probably to the value of $1,000. On February 15, 1888, a year after the salé, Mrs. Carrie M. Lamar (wife of R. G. Lamar) caused a tender to be made of the purchase money paid, and commenced this action against the defendant, Wright; alleging substantially that her husband, R. G. Lamar, before the master’s sale, made a verbal arrangement with the defendant that he (Wright) would bid in the land for the plaintiff, and secure himself by a first mortgage upon the same; — 68 — and that in accordance with said arrangement he did bid for her, thereby having the land knocked off to him at less than its market value; but in violation of said arrangement with her husband, had it set down in his own name, and now fraudulently refuses to make titles to her as he had agreed to do; and praying that a trust should be declared against said Wright in her favor; that an account be taken as to the amount of purchase money paid by him, and that the land should be sold, and all over refunding to the defendant the purchase money, may be paid to the plaintiff as her property, under the arrangement made for her benefit by her husband as aforesaid. The defendant, Wright, answered in substance, that he is a broker and real estate agent of Columbia; that he never had any communication, written or .verbal, with the plaintiff concerning the land in question; that before the sale, R. G. Lamar, husband of the plaintiff, approached him, and requested defendant to place a mortgage on the land, and he (Wright) answered that he could procure $1,500 on the security of the first mortgage upon the land ; that to this R. G. Lamar assented, and agreed to raise all that would be necessary to pay the bid over $1,500; that it was fully understood that the master was to be paid in cash, so that titles would be made to enable Lamar to make the mortgage to secure the $1,500 ; and that defendant was not to advance a dollar on the purchase; that he (Wright) bid off the property in his own name for $2,100, but with the full intention of transferring the bid to Lamar whenever he paid the money he was to raise; that he certainly said or did nothing to prevent free and full competition in the bidding ; that after the sale he had frequent interviews with Lamar, in all of which he (Wright) expressed his willingness to do all that he had promised, and urged Lamar to do what he had promised, and let the matter be closed up, and in order to help Lamar, he discovered that he could procure $1,800 on the security of the land; Lamar did make efforts to raise the additional $300 necessary, tendered him a note for that amount signed by B. B. McCreery, which he (Wright) declined to take, declining then and always to advance any money himself in the business; believes that Lamar then made an effort to raise the whole $2,100 from the Carolina Bank and failed; — 69 — the master was pressing to have the bid closed up, and believing that Lamar could not comply with the terms of the arrangement, they went together to the office of Mr. Shand, who prepared and they signed the following written agreement: “Memorandum of agreement between George K. Wright and Robert G. Lamar, made March 4, 1887, at 10 a. m. Whereas George K. Wright bid off at foreclosure sale my tract of land of eighty acres, near eastern line of city of Columbia, on sales day in February last, at twenty-one hundred dollars, but has not yet complied. Now, the said George K. Wright agrees to transfer his said bid to Mrs. Caroline M. Lamar, if the sum of twenty-one hundred dollars be paid to him in cash by three o’clock this afternoon. And the said Robert G. Lamar agrees, if said payment be not paid by 3 o’clock as aforesaid, that he will at once surrender possession to said George K. Wright, and that any holding of said land thereafter by said Robert G. Lamar will be as agent of said George K. Wright. Given under our hands and seals: (Signed) R. G. Lamar, [l.s] George K. Wright, [l.s.] Witnesses: Robt. W. Shand, M. H. Moore.” That this was the first and only written agreement upon the subject matter of this land, and the first time, as far as defendant remembers, that plaintiff’s name tvas mentioned; “that the defendant (as Wright states) still delayed, wishing to give said Lamar, or his. wife for him, every opportunity to make this purchase, but finally, on March 17, 1887, defendant was compelled to assuthe the bid, and he complied by paying the entire amount in cash — all parties agreeing. He complied in his own name, with his own money, for his own benefit, and took deed to himself. Lamar surrendered the possession, sold to defendant a pile of manure thereon and received pay therefor; received from the master a portion of the proceeds of sale, and permitted the report of sales and disbursements to be confirmed without objection. Defendant never heard of any claim after that by R. G. Lamar or the plaintiff to any interest in the land until it was published in the newspapers that defendant had sold the land at a profit, &c., whereupon this action was brought by Mrs. Lamar.” The case was referred to the master, John T. Seibels, Esq., to — 70 — take and report the testimony, which was done. Much of the evidence was parol as to the alleged verbal agreement of Wright to bid off the land for Mrs. Lamar, the plaintiff. To this testimony defendant objected that it was not admissible under the statute of frauds; but the master, holding that he had no right to decide the question, took down all of the testimony, subject to objection, to be determined by the court above. It was voluminous, and of course cannot be reproduced here, but it is all printed in the record. It may, however, contribute somewhat to clearness to give a very condensed outline of it. In brief, it appeared that Wright, under some arrangement, expected to place a first mortgage upon the land to secure some advance to be made for a friend, and with a view to such transaction, he was to bid for the property when it was offered for sale, which he did, and it was knocked off to him at $2,100; that the terms of sale were not complied with, but remained unclosed until March 17, 1887, when Wright assumed the bid and complied with the terms of sale, paying his own money and taking titles in his own name. Up to that time, as Wright claimed, the bid was left open to allow It. G. Lamar time to comply with the agreement; but they differed essentially as to what were the terms of the verbal arrangement, Lamar claiming that Wright agreed to bid off the land for Mrs. Lamar and to advance the whole purchase money, and secure himself by a first mortgage on the property; while Wright most positively affirms, both in his answer and in his testimony, that he iiever agreed to advance a dollar of his own money: but that (being a land agent) he agreed to advance for a customer as much as $1,500 on the land, and that Lamar was to raise the remainder out of his money, homestead, or otherwise; that after the sale Wright enlarged the amount to be procured by him to $1,-800; that R. G. Lamar made efforts to raise the $300, and offered a note for the amount, signed by B. B. McCreery, which was declined. Wright informed Lamar that the parties were “cursing him” for not closing the purchase, and Lamar said, “If I cannot arrange the $300 in three or four days’ time, I will surrender the place.” Finally they went together to the office of Mr. Shand, and the written agreement of March 4, 1887, was exe — 71 — cuted. Soon after R. Gr. Lamar sold the manure on the place to the defendant and surrendered the possession. The cause came on to be heard by Judge Kershaw, who held that all the testimony was admissible, and upon his view of it, granted the relief prayed for, saying, among other things, “That the answer shows that there was some agreement between the defendant and Lamar for the purpose of securing to him the benefit of the sale, and this should open the door to the admission of evidence to show the whole truth in regard thereto, and for whose benefit it was intended. In consequence of that agreement having been mentioned, an understanding prevailed among the intended bidders at the sale to some extent, that the defendant was bidding for the family, in consequence of which some were induced to refrain from bidding, who would otherwise have offered more for the land than it was bought for by defendant. Under these circumstances the parol evidence will be admitted, and the purchaser be charged with a trust upon the land, according to the principles declared in Kinard v. Hiers, 3 Rich. Eq., 423; Schmidt v. Gatewood, 2 Rich. Eq., 178; and McDonald v. May, 1 Rich. Eq., 95. * * * This ease, therefore, does not fall within the statute. The parol evidence is admissible to show the previous agreement, as one of the means whereby an unjust and inequitable advantage in the sale was secured to defendant, and the property will therefore be charged with a trust in favor of the plaintiff,” &c. From this decree the defendant appeals to this court upon 14 grounds (1 and 2 of which, challenging the correctness of certain findings of fact, are very long, and will be omitted), charging error as follows : “3. That his honor erred in holding that defendant’s purchase was charged with a trust in plaintiff’s favor. “4. That he erred in receiving parol testimony to establish a trust in land under the facts of this case, and in holding that this case ivas outside the statute of frauds. “5. That he erred in holding that because defendant admitted an agreement with Mr. Lamar, parol evidence was admissible to prove a different agreement with another person (Mrs. Lamar), or that Lamar was acting only as agent for his wife. — 72 — “6. Having found that R. Gr. Lamar was acting for his wife, his honor erred in not finding that such agency continued throughout the negotiations, and in not holding plaintiff to acts done and agreements made by R. Gr. Lamar with defendant. “7. That he erred in permitting plaintiff to reap the advantage, if any, derived from statements made at the sale by R. Gr. Lamar (who, the plaintiff claims, was her agent and through whom she claims), intended by said R. Gr. Lamar to discourage bidding. “8. That his honor erred in holding that plaintiff was not bound by the written agreement. “9. That he erred in construing the written agreement to affect only the possession of the land, .and, in arriving at such conclusion, he has further erred in charging defendant with an agreement, which finds no support whatever in the testimony. “10. That his honor overlooked the testimony of R. G. Lamar himself, and did the defendant great injustice by the following finding: ‘It (the agreement) seems to have been resorted to by defendant as a means whereby to get possession of the land, for he was satisfied that Lamar could not raise the money in the few hours to which he was limited. It was under the circumstances an unreasonable abuse of the advantage of his position and the supposed necessities of Lamar, to exact such an agreement; but it succeeded.’ “11. That his honor does defendant great injustice and disregarded the concurrent testimony of all parties, in holding that ‘The terms of the sale were one-third cash and the balance on one and two years. 'Under the circumstances, the land being worth much more than the defendant’s bid, it was inequitable in him to demand of plaintiff the payment of the purchase money. It was an abuse of his position and a breach of his duty, who was entitled to a reasonable time with reference to the conditions of the sale, to comply with her contract with defendant.’ “12. That he erred in holding that the plaintiff had an interest in the land, and in permitting her to redeem it, or on her failure to do so, in directing a sale. “13. That he erred in failing to decree, upon the sale ordered by him being had, defendant should have judgment against plaintiff for the deficiency, if any,” &c. — 73 — There is no doubt that Wright has a chain of paper title— legal title. Section 2019 of the General Statutes (statute of frauds) declares “that no action shall be brought upon any contract or sale of lands, or any interest in or concerning them, * * unless the agreement upon which such action shall be brought, or some memorandum or note thereof shall be in writing, signed by the parties to be charged therewith,” &c. This action is brought to set up an interest in lands, without any such agreement in writing, and, by the great conflict in the parol testimony, would seem to afford another proof of the wisdom of the law. There are, however, well established exceptions. One is where a paHy pays the money of another and takes title in his own name. That raises what is called a resulting trust in favor of the party whose money is so used, and the facts may be proved by parol. Wright paid for this land with his own money, and there can be no resulting trust here. Ex parte Trenholm, 19 S. C., 126; Nesbitt v. Cavender, 27 S. C., 1. There is still another exception, when the legal title is acquired under such circumstances as to avoid the sale or to impress upon it a constructive trust ex maleficio. In order, however, to make out such a case, it is necessary to show actual fraud, such as misrepresentions, concealments, &e.; and we may add, where a purchaser at a public sale enables himself to obtain the legal title at less than the value of the property, by declaring, truly or falsely, that he is bidding for others and not for himself, as in the cases of McDonald v. May, 1 Rich. Eq., 98, and Kinard v. Hiers, 3 Rich. Eq., 421, cited in-the Circuit decree. In such case parol testimony is admissible, for the reason that, in contemplation of law, there has been no legal sale, and there is really no title; the property still remains as if there had been no sale, and the trust is declared is favor of him who was the owner before the fraudulent sale. As Chancellor Johnstone, with his usual clear discrimination, said in McDonald v. May, supra: “The establishment of an agreement is not the essential feature of the case. Let it be admitted that there never was an agreement of any description between the parties. The bill not only charges that there was an agreement, but that May was enabled to make his purchases by his statements that he was — 74 — acting for McDonald. * * * The statute of frauds, it appears to me, has no application here. This branch of the case does not proceed upon the contract — does not look to an execution of the contract, but founds the remedy upon a fraud,” &c. If the action had been brought by R. G. Lamar to set aside the sale for his benefit, parol testimony would have been admissible as to any matter touching the bona fides of the sale. As such, however, is not the character of the action, we will not, of course, undertake to decide anything as to the force of the testimony in that aspect. But we think we ought to say that we do not see the evidence justifying the conclusion that the defendant, Wright, obtained title to the land for less than its market value, by representing himself as bidding for Mr. or Mrs. Lamar. We have read the testimony carefully, in order to ascertain whether, at the sale or before it, he declared directly or indirectly that he would bid or was bidding for any other person than himself; and we have failed to find any such proof — Wright denies it positively, and, as it seems to us, he really had no motive to attempt to chill the biddings; for as the arrangement stood at that time, he was not to get the land itself, but simply a mortgage upon it to secure a certain amount to be loaned. He did say after the sale, in general terms, that he had bought for R. G. Lamar, which,' however, was not inconsistent with his understanding of the arrangement, which it seems he expected to carry out, and for that purpose kept the bid open for more than a month. Besides, mere opinions as to the market value of land, are more or less uncertain and apt to be somewhat speculative. From the homestead proceedings and the other evidence on the point,, we are inclined to think that the market value of the land at the time of the sale was somewhere about $2,500; for within a year after, when improvements had been placed upon it to the extent of $1,-000, it W'as bargained at private sale to the trustees of the university for $3,500, and the trade only broken up by notice of this proceeding. If the sale was affected by anything which fell from Mr. Lamar as to the defendant, Wright, bidding for Mrs. Lamar, of course they could not complain of that. Baggott v. Sawyer, 25 S. C., 405. It will be observed, however, that the action is not brought by R. G. Lamar to set aside the sale as — 75 — fraudulent and void, but by his wife, Mrs. Carrie M. Lamar, as a separate and distinct person, not to set aside the sale, but assuming its validity, to give to her the advantage supposed to arise out of it. If the sale were set aside, it would not enure to her advantage; fraud in the sale is no part of her case. We do not clearly see how the sale can be void for one purpose and good for another. It is elementary that no right can arise out of, or be engrafted upon, that which is void for fraud. We cannot think there is anything in the allegation that it was a distinct fraud upon the plaintiff to require the cash, when the sale, as to two-thirds, was upon a credit; for a first mortgage could not be given until title was executed, and that could not be expected until the money was paid. All agree that such was the express contract of the parties. But be that as it may, it is quite clear that Mrs. Lamar was a stranger — a new party. Before the sale she had no interest in the land, and cannot now possibly have any, except through the alleged agreement of Wright that he would buy it for her. That agreement was not in writing, within the statute of frauds, and parol evidence to prove it ivas inadmissible. Schmidt v. Gatewood, 2 Rich. Eq., 177; Johnston v. LaMotte, 6 Id., 351; Harrison v. Bailey, 14 S. C., 334; Howell v. Howell, Harper Eq., 158; Burden v. Sheridan, 14 Am. Rep., 505; Purcell v. Miner, 4 Wall., 517; Perry on Trusts, § 134. The doctrine is so well put in Schmidt, v. Gatewood, supra, that we do not think it can be necessary to do more than state it: “It is alleged that this purchase was made at a sacrifice, under an agreement on the part of the plaintiff that the family should have the benefit of it. The evidence rests in parol. It is argued that the family, trusting to the agreement, permitted the plaintiff to purchase at a sacrifice; that to allow him to retain the property under such circumstances would encourage fraud, and that, upon this distinct ground, independently of the statute of frauds, a trust should be decreed. Undoubtedly there are cases (such as McDonald v. May, 1 Rich. Eq., 91) where a party, who enables himself to purchase at an under rate by representing that he is buying for another, is liable to have his purchase set aside for fraud. There are cases where competition is fraudulently — 76 — reduced or destroyed. In such cases it matters not whether there was an agreement or not. Indeed, in the latter case, where of course the representation is wholly false, that circumstance serves only to enhance the fraud complained of. Such cases as these steer entirely clear of the statute of frauds. The evidence of the purchaser’s representations is received, not for the purpose of substantiating the supposed agreement, but for the purpose of showing the means by which he effected his fraudulent design, and when received it is employed not for the purpose of enforcing the contract, but for that of setting it aside. But no such circumstances have been developed in this case. The fraud insisted on consists merely in the non-fulfilment of the alleged agreement, and depends, of course, entirely upon the question whether there was in fact an agreement to be performed, and that preliminary fact the statute will not allow to be established by parol,” &c. We can add nothing. But there is another view which, as it seems to us, must lead to the same result. Wright says that he never met the plaintiff, Mrs. Lamar, nor exchanged a word with her during the negotiations about the sale and loan; that Mr. Lamar always spoke in the first person as to what he would or would not do, and he (Wright) thought he was acting for himself — certainly until March 4, 1887, when he desired the name of his wife inserted in the agreement then signed. But Mr. Lamar says that in the negotiations he was always acting for his wife, and we see that she did endeavor to assist him in raising the $300 required to make the purchase money $2,100. Now, taking that view, w'e think we are bound to consider that he was still acting for her when he signed the agreement that if the money was not paid by a certain hour, he would surrender the possession, and did so. We find it impossible to concur in the construction and effect given to that paper, that it did n'ot bind Mrs. Lamar; that Mr. Lamar only agreed to surrender his possession, as distinct from that of his wife; and that such surrender could in no wise affect plaintiff’s rights, for they were in no way dependent'upon her possession. We think it is not unusual for the husband (accustomed to out-door business) to act in such matters as the agent of his wife, considered as a separate person. But we cannot doubt that such — 77 — agency in a particular business being once established, it should, as in an ordinary case of principal and agent, continue until the particular business is ended or the agency revoked. As it seems to us, the husband acting for his wife, could not as to a particular act disclaim the agency and assume the personal responsibility, and that the said agreement was binding upon the plaintiff. That paper was the first written agreement upon the subject; and unfortunately the parties were not able to comply with it. The judgment of this court is, that the judgment of the Circuit Court be reversed, and the complaint dismissed. Mr. Justice McIver concurred.