Lasker-Morris Bank & Trust Co. v. Gans

SMITH, J., (after stating the facts). (1-2) We think the statute of frauds does not apply here. It is not sought to enforce an express trust. The suit was brought upon the theory that the Gans had agreed to furnish, and had, in fact, furnished, part', if not all, of the consideration used in the purchase of the land, and had donó so under the agreement that the purchase should inure to the benefit of the persons so furnishing the purchase money in proportion to the amount furnished. The writing offered in evidence does not create an express trust; but it is evidentiary of the facts out of which a resulting trust arises. Section 3667 Kirby’s Digest. The Gans, by the execution of the note to the bank, furnished money to Heiseman with which to buy the lands for their joint benefit. Heiseman took the money so furnished and bought lands the title to which was taken in his name individually. A trust results by implication of law for their benefit to the extent of the money furnished. Grayson v. Bowlin, 70 Ark. 145; Foster v. Treadway, 98 Ark. 452; Jones v. Jones, 118 Ark. 146; Keith v. Wheeler, 105 Ark. 323, and cases there cited. (3) Nor does the fact that the writing set out acknowledges the existence of a trust, change the character of the transaction from a resulting trust, which may be established by parol, to an express trust, which is within the statute of frauds. Transactions between the parties subsequent to the purchase of the land could not create a resulting trust; but if such a- trust arises out of the purchase of the land, its character as a resulting trust is not altered by a writing subsequently executed which acknowledges the existence of the trust. Grayson v. Bowlin, 70 Ark. 145. (4) Appellant strongly argues that no trust ever existed, and presses upon our attention the fact that the land was purchased in 1899, and that there were many transactions in regard to it which the Bans never questioned ; that it was sold to the Union Trust Company by Heiseman and divided into lots, and that during many years no settlement of the trust was' had, and that no accounting was asked until after Heiseman’s death in 1915. It appears, however, that the deed from the real estate company to Heiseman was executed on the 19th of August, 1899, for a recited consideration of $6,600.00, and G-ans produced at the trial the note of himself and Heiseman for that sum of money and which also was dated on the 19th of August, 1899, this being the note referred to above. This testimony, and the other testimony set out above, we think, supports the finding made by the court below that Heiseman took the title, to the property as trustee for himself and for the Grans, who united with him in furnishing the purchase money. (5) Does the statute of limitations apply, and are the plaintiffs barred from asserting their rights by laches? It is true a great many years expired here between the time of the creation of the trust and the date when the Guns asked for an accounting. But the testimony shows that there was never any repudiation of the trust and that the-confidence of the Gans in Heiseman was unreserved; that there were many and large transactions between them; and, as there was no repudiation of the trust, and no change in the situation of the parties resulting from inaction, we conclude that the cause of action was not barred, either by limitation or laches. (6) The form of affidavit attached to the complaint which we set out above, does not conform to the requirements of Section 114 of Kirby’s Digest, which prescribes the form of affidavit to be made to a demand against the estate of a deceased person. It appears, however, from the pleadings in the cause, that a properly authenticated and verified statement of the account had been presented to the administrator in apt time, and that the same had been disallowed, and that the affidavit attached to these demands fully complied with Section 114 of Kirby’s Digest. This sufficiently complied with the law. (7) "We are also of the opinion that interest was properly allowed on this demand. The court computed the interest from the date of each of these sales, the result of which is to charge Heiseman with the interest on the money during the time it was in his possession. The argument that a great length of time was permitted to expire before any demand was made for a settlement, has more force when made in support of the plea of laches than it has when made against the .allowance of interest. If the estate of Heiseman should be held for this money at all, it should also be held for the interest which accrued from the date of the sales, at which time, as a matter of law, it was the duty of Heiseman to account to his associates for their pro rata share. (8-9) It is finally insisted that much of the testimony of Sol Gans is incompetent, because it involved transactions with the deceased Heiseman in a suit against his administrator, and thereby offends against the inhibition of Section 2 of the Schedule to the Constitution prohibiting such evidence. The testimony that the relation between witness and Heiseman was one of unreserved and unlimited trust and confidence related to a relationship, rather than to a transaction, and is not, therefore, incompetent. The testimony of Gans, that Heiseman suggested to him, at a meeting of the stockholders of the Co-Operative Real Estate Company, that they purchase the assets of that corporation, was incompetent, because it does relate to a transaction between the witness and the' administrator’s intestate. But we try chancery cases de novo, and it is our duty as well as that of the chancellor to disregard incompetent testimony-; and, when we have disregarded this incompetent testimony, we are of the opinion that the finding of the chancellor is in accordance with the preponderance of the evidence. It was competent for the witness to produce the note which he and Heiseman executed to the bank; and it was competent for him to state that he paid the note, as this testimony relates to a transaction with the bank. From the note itself, it appears that it was of even date with the deed to Heiseman, and covered the consideration recited in the deed. We think this testimony, and the declaration of trust executed by Heiseman in his own handwriting, warranted the court in finding that Heiseman and the Gans had jointly furnished the purchase money with which the land was acquired and that it was purchased for their joint benefit, in proportion to the part furnished, and that, therefore, a trust resulted as declared by the court. The decree of the 'court below is therefore affirmed.