Dray v. Dray

StrahaN, C. J. The appellant presented in the court below a number of exceptions to the referee’s report, which we need not notice seriatim. The exceptions to the referee’s findings of fact cannot be sustained. They appear to be based mainly on the ground that the evidence is incompetent because it tends to prove an agreement in relation to the transfer of land without writing. Some of the evidence is undoubtedly incompetent if it were relied upon for that purpose; but the transfer of the plaintiff’s title to the defendant under the particular circumstances of the case was sufficient to raise a resulting trust in the plaintiff’s favor in the interest transferred. The defendant did not purchase the land. The plaintiff made no gift of his interest to the defendant. The defendant acquired the naked legal title to be used by Mm in raising money to relieve the estate in which he and his brothers were alike interested, from financial embarrassment, and good faith as well as the plainest principles of honesty required that it should be used for that purpose alone, and when that is accomplished the plaintiff’s interest should be returned to him. The particular facts of the case add much strength to this view. The plaintiff and defendant are brothers; the defendant was the administrator of their father’s estate, who had then recently died, [66] and the defendant was in possession of the land in controversy which had descended to the plaintiff and defendant and another brother burdened with their ancestor’s debts. The plaintiff was financially embarrassed, and the defendant represented to him if the entire title were vested in him he could and would raise money on the credit of the estate to discharge its debts. To allow the defendant to retain the title under the facts would give the sanction of the court to a fraud, not perhaps an actual fraud, hut to a transaction that is constructively fraudulent if consummated in accordance with the defendant’s contention. Pomeroy’s Eq. Juris. § 155, states one phase of the rule under consideration thus: “If one party obtain the legal title to property, not only by fraud, or by violation of confidence, or of fiduciary relations, hut in any other uncon-scientious manner, so that he cannot equitably retain the property which really belongs to another, equity carries out its theory of a double ownership, equitable and legal, by impressing a constructive trust upon the property in favor of one who is in good conscience entitled to it, and who is considered in equity as the beneficial owner.” But the appellant contends that he is entitled to hold the property by virtue of the deed which he took from Shelton, the purchaser at the execution sale. It is true this is not a statutory redemption, because the time for redemption under the statute had expired, nor had it at that time been enlarged by the purchaser; but the plaintiff and the defendant as between themselves had a common interest in the property,— the plaintiff’s interest being only equitable, it is true, hut still a beneficial interest,— and any acquisition of title by the defendant under the circumstances must inure to the benefit- of all persons having an interest in the title. In addition to this, the inference from all the facts is too strong to he resisted that the defendant’s conduct in waiting for the time for redemption to expire and then taking a deed from the execution purchaser, was for the express purpose of defeating and cutting off any supposed [67] interest which the plaintiff might have in said property. Viewed in this light, the defendant’s act in taking said deed to himself, whether so designed or not, was constructively fraudulent. By that act he sought to gain an uncon-scientious advantage which he cannot be permitted to retain. There is no specific exception to the referee’s conclusions of law on the part of the defendant. We think some of the findings are open to criticism. For instance, the right of redemption which a judgment debtor has after sale of his realty on execution, is not an equity of redemption; it is purely a statutory right of redemption. The legal title still remains in the judgment debtor until the sheriff’s deed is executed. As long as this statutory right of redemption continues, the purchaser’s title at the execution sale is inchoate and may be defeated by a redemption under the statute; but this right is not an equitable but purely a legal right. But this misuse of terms does not affect the conclusions to be drawn from the findings, or in any manner affect the defendant. The general result of the findings is in harmony with wifat we conceive to be the equities of the case, and we find no sufficient reason in the record for disturbing them. We therefore affirm the decree appealed from.