Smith v. Willard

Mr. Justice Phillips delivered the opinion of the court: Under the assignment of error in this case it is urged and argued by appellant that the circuit court erred in dismissing her bill, for the reason the evidence offered was sufficient to entitle her to a decree setting aside the deed of the defendant as a cloud upon her title. It is also urg'ed the land in question having been purchased by the husband with money belonging- to his wife, a resulting trust was established in her favor. From the record in this case there can be no question but the money of appellant was used in the purchase of these lands. The rule is well established, if the husband purchase lands with the separate estate of his wife, or with proceeds or accumulations from it, and takes the title in his own name, a trust results to the wife. (1 Perry on Trusts, (3d ed.) sec. 127; Lathrop v. Gilbert, 2 Stock. Eq. 344; Cass v. Demorest, 10 Stew. Eq. 393; Fillman v. Divers, 31 Pa. St. 429; Hay v. Martin, (Pa.) 13 Cent. Rep. 217; Radcliff v. Radford, 96 Ind. 482.) The whole foundation of a resulting trust is the ownership and payment of purchase money by one and the taking of title in the name of another, and the presumption, founded on such transaction, of the intention of the parties that such trust should result. In this case, where the purchase money was that of the wife and the title taken in the name of the husband, there is a disputed question of fact as to whether or not she consented or agreed that the title should be so taken. She says she had no knowledge of such fact until seven years after the execution of the deed. Whether or not appellant directed her husband to have the deed executed to her, it is apparent after that time she had ample opportunity to know, and in justice to third interested persons she should have known, that her directions were complied with. She was a woman possessing the advantages of a common and boarding school education, and said to be shrewd in business matters. The deed in question was for seven years in a bureau drawer in her house, consisting of two rooms. To the place where it was deposited she had free access, and it would appear a woman of her abilities, having furnished the money for the purchase of the land, and having been so explicit, as she has stated, in directing that the deed should be taken in her name, would at least have manifested enough further interest in the transaction to have ascertained the fact. Where a married woman holds out to the world that her husband is the owner of property in which she has a resulting trust, or permits him to so act as to induce others to believe he is the owner of such property or has power to bind her, third persons acting reasonably on the strength of such belief, and giving credit to him thereupon, will be protected. (Anderson v. Armstead, 69 Ill. 452; 14 Am. & Eng. Ency. of Law, 646.) The party who sold the land to appellant, however, testifies the deed which was executed to the husband was so ordered to be made, and was delivered in the presence of both the husband and the wife at the time the purchase money was paid. The husband afterwards rented the land and collected such rents. Evidence is offered tending to show that the land was considered by people in the neighborhood as belonging to the appellant. Such evidence, however, is of no great value, unless it had the effect of bringing" notice to appellee, at the time he extended credit to the husband of appellant, that the husband was not the actual owner of the land. We do .not deem it necessary to discuss the authorities cited by appellant tending to show that she held a resulting trust in this land by reason of having furnished the purchase money, and that her husband simply held the 1 and as trustee for her. Had this been a bill filed by her to establish such resulting trust, and where the rights of third parties had not intervened or attached by reason of any omission or laches on her part, the evidence would clearly entitle her to a decree vesting in her the title to this land. The question is now presented, however, whether, after the title to this land has remained in the husband for a period of seven years or more, and by proper diligence appellant might have ascertained that fact, there was a duty imposed upon her to know that her directions as to the execution of the deed were carried out, before sh'e will be permitted to maintain title as against one who has extended credit to the husband on the faith of his apparent title, and secured the lien. The further question is also presented as to whether, after ascertaining the existence of title in her husband and securing" from him a deed which would fulfill any trust vested in him, she has, by withholding such deed from record for nearly a year, during which time the rights of her husband’s creditors have matured, lost by such act her right to assert title. At the time of the conveyance by the husband to the wife in fulfillment of this resulting trust it became and was her duty to give such notice as the law requires to all persons that he no longer held any title or interest in these lands. Section 30 of chapter 30 of the Revised Statutes provides as follows: “All deeds, mortgages and other instruments of writing which are authorized to be recorded shall take effect and be in force from and after the time of filing the same for record, and not before, as to all creditors and subsequent purchasers without notice; and all such deeds and title papers shall be adjudged void as to all such creditors and subsequent purchasers without notice, until the same shall be filed for record.” While appellant’s deed was executed in June, 1895, it was not recorded until March, 1896. Meanwhile the judgment of appellee had been rendered and the lands in question levied upon. The undisputed evidence of appellee in this case shows that he gave credit to the husband of appellant upon the strength of the fact that he was the owner of the land in question. The husband, at the time of the execution of the note on which judgment of appellee was based, stated that he was the owner of this land. There is no attempt on the part of appellant to bring notice to appellee that she held any resulting or other interest in this land, nor is there any evidence which indicates that he had any such knowledge until the day of the sale. He had a right to rely upon the condition of the title of these lands as shown by the record and upon the representations of the husband that he was the owner, and in the absence of evidence indicating any knowledge of appellant’s interest, appellee had the legal right to give credit to the husband under the belief that he was the actual owner. “The law is well settled that a bona fide purchaser of the legal estate will be protected against the prior equitable title of another of which he had no notice.” (Robbins v. Moore, 129 Ill. 30.) So, also, in the same case it was said, that “although the grantee in a deed may hold the legal title in trust for another, a third person may acquire the title from the trustee if he has no notice of the trust and acts in good faith.” Peck v. Arehart, 95 Ill. 113; Emmons v. Moore, 85 id. 304; McDaid v. Call, 111 id. 298; 2 Pomeroy’s Eq. 770; Bradley v. Loose, 99 Ill. 234. It is insisted by appellant that because she, through her attorney, gave notice on the day of the sale of this land by the sheriff that she was the owner of it and that it had been purchased with her money, that was sufficient to charge appellee with notice of such fact, and defeat his lien if her claim was well founded. Section 30 above quoted provides that “all deeds * * * shall take effect and be in force from and after the time of filing the same for record, and not before, as to all creditors and subsequent purchasers without notice.” The deed of appellant in this case was not filed until March 30, 1896. The judgment of appellee had been rendered and execution issued before that time. Appellee, being a judgment creditor before the filing of this deed for record, occupied the same position as purchaser, within the meaning of this statute. (Massey v. Westcott, 40 Ill. 160; Martin v. Dryden, 1 Gilm. 187; McFadden v. Worthington, 45 Ill. 362; Milmine v. Burnham, 76 id. 362; Columbus Buggy Co. v. Graves, 108 id. 459; Munford v. McIntyre, 16 Ill. App. 316; Bergman v. Bogda, 46 id. 351.) The notice, therefore, given or attempted to be given by appellant of her claim or interest in this land after the appellee, by virtue of his judgment and the levy of the execution, occupied the position of purchaser, could in nowise affect or diminish his interest. A careful consideration of this record and of the reasons presented by counsel for the reversal of this decree furnishes us no ground -for disturbing the decree of the circuit court dismissing appellant’s bill. The decree of the circuit court of Pike county is therefore affirmed. Decree affirmed.