Lane v. Ewing

Napton, Judge, delivered the opinion of the court. This case was determined upon a demurrer to the petition, after a considerable portion of it had been stricken out. The defendant, Ewing, is a brother of the plaintiff, Mrs. Lane. The plaintiff, William Carr Lane, about the year 1841, was largely indebted, and his real estate, consisting of several detached pieces of land and lots lying in and about the city of St. Louis, was sold under execution, and the defendant became the purchaser at a nominal sum. Previous to this the defendant had become liable, as security, for the payment of a debt from Dr. Lane to Mad. Berthold (the defendant’s mother-in-law) for $15,000, to protect which the plaintiff had mortgaged the same real property afterwards sold under the executions of other creditors and purchased by defendant. A portion of the property thus purchased at sheriff’s sale was applied by the defendant to the payment of Lane’s debts. In 1847 the defendant, being about to leave St. Louis on a long journey, and with a view to secure his sister, Mrs. Lane, in the event of his death, executed the following paper: “ Mem. All the real estate (now remaining unsold) which was bought by me as the property of W. Carr Lane, and conveyed to me by sheriff Milburn, by deed dated January 31, 1843, and recorded in the recorder’s office of St. — 83 — Louis county, Missouri, on the 16th day of January, 1844, book G, No. 8, p. 64 and following, to be conveyed by deed to Anne E. Lane, or any other trustee, in trust for the following purposes: 1st. To refund to me the entire purchase money which was paid for said land, including the money paid in purchasing liens on the same, taxes, &c. 2d. To secure me and my heirs from all accountability on account of my securityship for said W. O. Lane and my sister M. E. Lane, wife of said W. C. L. 3d. All the remaining portions to be held in trust for the sole and separate use of Mary E. Lane, and to be disposed of and applied according to the written order of said Mary.” In 1848, the mortgagees in the deed made to secure Mad. Berthold conveyed to Ewing all the. land embraced in that deed, thus enabling him to dispose of an unencumbered title. The object of this was to enable the defendant more conveniently to raise the money necessary to extinguish this and other debts of Lane. Accordingly, the defendant proceeded to make sales as opportunity offered, and apply the proceeds to the payment of the debts, and in 1849 Mad. Berthold’s debt, then $20,000, was extinguished. Ultimately, it is stated, all of Lane’s debts, for which the defendant Ewing was in any way liable, were extinguished, and all advances were reimbursed, and Ewing proceeded to convey portions of the lands still remaining to trustees for the benefit of Mrs. Lane. In this way, all the real estate purchased by the defendant was disposed of except a tract of thirty-two arpens, situated in the St. Louis common, known as the Vasquez tract; and this tract the defendant now claims as his own. The object of the petition is to have the alleged trust enforced as to this tract. The suit was brought in 1857. It will be seen that the only question presented by the record is, whether the facts stated constituted the defendant a trustee. There is no doubt that where a trust has been created and declared in a mode not countervening the statute of frauds, it will be enforced, notwithstanding the consideration is vol — 84 — untary. It is equally well settled that an executory agreement, upon a voluntary consideration, will not be enforced. The difficulty, in- applying these general principles, is in determining whether the agreement is executory or executed ; or, in other words, whether the relation of trustee and cestui que trust is established. The distinctions, which have been taken upon this point, are exceedingly refined and somewhat obscure, and the decisions are hard to be reconciled. A reference to the cases in England, a review of which may be found in a note to White & Tudor’s Leading Cases (p. 198), will show a considerable fluctuation of opinion as to the criterion by which the character of the transaction is to be determined. In ex parte Rye, 18 Ves. 149, Lord Eldon said, “ A party may so constitute himself a trustee that a court of equity will execute the trust in favor of a volunteer. It is clear that this court will not assist a volunteer, yet, if the act is completed though voluntary, the court will act upon it. It has been decided that, upon an agreement to transfer stock, this court will not interfere; but if the party has declared himself to be the trustee of that stock, it becomes the property of the cestui que trust, without more, and the court will act upon it.” Lord OoflTenham said, in Jeffreys v. Jeffreys, “My impression is, that the principle of the court to withhold its assistance from a volunteer applies equally, whether he seeks to have the benefit of a contract, a covenant, or a settlement.” And this was a case where a father in a settlement covenanted to convey to trustees in trust for his daughters certain freehold estates, and also covenanted to convey in the same way certain copyhold estates. He conveyed the freehold property according to the settlement, but conveyed the copyholds to trustees for his wife, and after his death the copyholds were held to belong to the widow, notwithstanding the previous settlement. Sir James Wigram, the vice-chancellor, in McFadden v. Jenkins, 1 Hare, 462, attempts to reconcile the cases in Eng — 85 — land, and to point out the principle upon which the courts act. “ There may be difficulty,” he observes, “ in reconciling with, each other all the cases which have been cited. Perhaps they are to be reconciled and explained upon the principle that a declaration of trust purports to be and is in form and substance a complete transaction, and the court need not look beyond the declaration of trust itself, or inquire into its origin, in order that it may be in a position to uphold and enforce it; whereas an agreement or attempt to assign is, in form and nature, incomplete, and the origin of the transaction must be inquired into by the court; and where there is no consideration, the court, upon its general principles, can not complete what it finds imperfect.” The same learned judge said, in Meek v. Kettlewell, 1 Hare, 470, that the old cases only went so far as to hold that “ where the legal interest in property is transferred or acquired in pursuance or in execution of an antecedent agreement or direction leading the uses or trusts of that property, or as part of the transaction creating the trust, the court will execute the trust, though voluntary. ” But he afterwards adds that “ there does not appear to be any reason why the doctrine of the court should be so confined, provided the trust is actually created and the relation of trustee and cestui que trust established between the parties.” Therefore his conclusion is, that “ in the case of a formal declaration of trust by the legal or.even beneficial owner of property declaring himself in terms the trustee of the property for a volunteer, the court might not be bound to look beyond the mere declaration. If the owner of property, having the legal interest in himself, were to execute an instrument, by which he declared himself a trustee for another, and had disclosed that instrument to the cestui que trust, and afterwards acted upon it, that might perhaps be sufficient.” The same judge repeats the idea in Hughes v. Shibbs, 1 Hare, 477: “If a person intending to give property to another vests that property in trustees, and declares a trust upon it in favor of the object of his bounty, there are cases which — 86 — establish that, by such acts, the gift is perfected, and the author of the trust loses all dominion over it. The principle has been extended to cases in which the author of the gift has had the legal dominion over the property remaining in him, but has completely declared himself to be a trustee of that property for the object indicated. But it is clear also that a person, not intending to give or part with the dominion over his property, may retain such dominion, notwithstanding he may have vested the property in trustees and declared a trust upon it in favor of third persons.” The result of the cases is, according to vice-chancellor Wigram, that “ the court looks into the nature of the transaction, and determines from the nature of the transaction what the effect of it shall be in divesting the owner of the property to which it relates.” And Lord Collenham said, in Bell v. Cureton, 2 Myl. & K. 511, that the distinction was adopted to promote the views and intentions of the parties. A leading object of inquiry, then, we may infer from the expressions of opinions we have just quoted, is to ascertain whether the transaction is complete or incomplete. Where the gift is imperfect, a court of equity leaves the parties where it finds them, and will not assist either party ; but where there is an actual settlement made for vesting the estate in trustees, or the author of the trust constitutes himself a trustee for volunteers, the courts will enforce the trust. The difficulty is in determining when the transaction is complete, and this difficulty is very much increased when we come to apply the principle to that class of cases in which the trust is supposed to be left in the author of the trust, and there is no transfer of the legal estate to another. In such cases, the existence of the trust may precede the execution of the evidence by which alone it can be established. A trust need not be created by writing, although, when it relates to real estate, it must be proved by writing. (Steeve v. Steeve, 5 Johns. Ch. 1.) It seems to result from the nature of such a transaction that a complete divestiture of equitable title might be produced by a clear and unambiguous declaration to — 87 — that effect, although a further disposition of the legal title was still in contemplation. In determining the effect of the writing executed by the defendant in 1847, it is not easy to lay out of consideration the fact that the property referred to originally belonged to the plaintiff. It is recited in the paper itself. If we could divest ourselves of all knowledge of this fact, and consider the sole fact that the property then was the absolute property of the declarant, it would be going very far to say that this declaration, of itself, constituted the defendant a trustee for Mrs. Lane as to the undisposed portion of the estate. It would seem, from the plain language of the instrument, that something more was contemplated; that the property was “ to be conveyed by deed to Anne E. Lane or a trustee.” And all the cases agree that, even in the case of a trust created or continued in the party from whom the bounty emanates, the transaction must show that the entire equitable interest is parted with. On the other hand, the facts antecedent to the execution of the writing and recited in it might lead to the inference that the declaration was designed as an acknowledgment of an existing trust; that the relation of trustee and cestui que trust already existed when the paper was signed, and that its object was to place the rights of the cestui que trust beyond the reach of casualties. The embarrassment attending a proper understanding of transactions of this character is very much increased, where they occur between family connexions. In such cases courts of equity have always been cautious in affixing a technical trust to acts and declarations which, in the absence of the ordinary motives operating- in the domestic circle, might be regarded as quite unequivocal. It was observed by Chancellor Kent, in the case of Steeve v. Steeve—a case in which a son had purchased his father’s property under execution, and had from time to time made conveyances of portions of it to his brothers and sisters, and made various declarations orally and in writing of his intention to distribute whatever — 88 — remained, after liis own reimbursement, equitably and justly for the common benefit of the family — that considerations arising from the ties of blood and the dictates of family affection would ordinarily lead such a purchaser to offer to restore the property on being reimbursed his advances and indemnified for his trouble, or to engage that all the profits of the purchase should be applied to 'the benefit of the relative whose property has been thus purchased. But he adds that “ intentions and intimations of that kind can not well be considered as amounting to a clear and absolute trust, which a court of equity will recognize and enforce, unless the declaration of it be quite positive and free from all ambiguity.” In the present condition of this case, we do not feel warranted in hazarding a definite opinion. A considerable portion of the petition was stricken out, on the motion of' the defendant. An opinion, upon a partial view of the case, would only tend to embarrass a trial upon an amended petition and answer and a full disclosure of the facts, should the case be further proceeded with. We think the court should have permitted the plaintiffs to state their whole case in their own way, and that the case stated is of such a character as to require a further development in order to arrive at a satisfactory conclusion upon its merits. The judgment is reversed and the case remanded. The other judges concur.