C. F. Axtell and E. A. Quayle, for complainant. Theodore Little, for defendant.
(Syllabus by the Court.)
On final hearing on bill, answer, and proofs taken before a master.
C. F. Axtell and E. A. Quayle, for complainant. Theodore Little, for defendant.
VAN FLEET, V. C. This suit is brought to enforce an express trust. Prior to April 2, 1879, the complainant was the owner of a lot of land in Morristown. On that day he conveyed it to his son John, who on the same day conveyed it to the complainant's wife. Both deeds were voluntary. The complainant's wife continued to hold the title until November 26, 1883, when she and complainant conveyed it to their daughter Celia, the defendant in this suit. Celia, on the same day, and as part of the transaction by which she became invested with title, made a deed to the complainant. The object of the two conveyances was to change the title from the wife to the husband.No consideration was paid for either. Celia, at the time of this transaction, was a minor, being only 19 years of age. Her deed, therefore, while not void, was voidable. No acts, in confirmation of her deed, performed since she attained full age, are either alleged or proved. Since attaining full age, she has refused to execute a deed in confirmation of the one she made while a minor, but now insists that that deed, by reason of her minority, is of no effect, and that the title to the land still remains in her, and that she is under no duty to convey it to the complainant. The complainant, on the contrary, insists that the defendant took title subject to a trust, the trust being that she should convey the land to him, and having thus far failed to execute it effectually, and now refusing to do so, the court should compel her to execute it.
There can be no doubt about the fact. The circumstances attending the transfer of the title to the defendant render it conspicuously clear that the purpose of all persons concerned in the transaction was to change the title from the wife to the husband. It is obvious that the transaction had no other object. It is clear, therefore, that the defendant took title subject to a trust, and that the trust was an express one. The only question which the case presents is, is the trust manifested in such manner that equity can take cognizance of it and enforce it? The existence of such a trust can be proved by nothing short of written evidence. The direction of the statute of frauds upon this subject is imperative. It declares that all declarations and creations of trust of lands shall be manifested and proved by some writing signed by the party enabled to declare the trust, or else they shall be utterly void and of no effect. Revision, 445, § 3. This statute merely prescribes a rule of evidence. It declares that the existence of an express trust of lands shall be proved by nothing but written evidence and rigorously excludes all other evidence as a means of establishing the fact of the existence of such a trust, but it does not inhibit the creation of a trust of this kind by parol. It has accordingly been held that a valid express trust of land may be created by parol, provided it is subsequently declared and manifested in the manner directed by the statute.
In Smith v. Howell, 11 N. J. Eq. 349, the trust sought to be enforced was not declared by writing until more than 16 years after its creation, and yet the court decreed its execution. Chancellor Williamson in that case said the statute does not require that the trust shall be created by writing, but that it shall be manifested and proved by writing. And he also held that where the integrity of a trust not put in writing at the time of its creation, but subsequently declared by writing, was assailed, parol evidence was competent to show whether or not it had in fact been created at the time the conveyance was made. On this point he said: "A question of fraud—that is, whether the trust was really created at the time of the execution of the instrument or deed to which the manifestation of the trust refers—is always an open question. Suppose a judgment or some other lien has attached to the property in the interval between the execution of the deed and the declaration of the trust, it would be necessary, in order to defeat such lien, to show that the trust was bona fide created at the time of the execution of the deed. This may, however, be done by parol evidence, because the statute does not require that the trust shall be created, but only manifested by writing." The doctrine of this case was fully approved by the court of errors and appeals in Jamison v. Miller, 27 N. J. Eq. 586. Parol evidence was admitted in this case to establish the fact that a trust had been created by parol contemporaneously with the execution of the deed by which the title was made to the trustee. The trust was declared, some time subsequent to its creation, by several writings, one of which was the defendant's answer. The court said: "The writings [meaning the declaration of trust] are but evidence; the trust is anterior and independent; and the rights which the court regards arethose that spring from the creation, not the mere proof of the trust." The rule must be considered settled that a valid parol trust of land may be created by parol, but the existence of the trust cannot be proved except by written evidence. The written evidence, however, may be made long subsequent to the creation of the trust.
The only written evidence or manifestation of the trust which the complainant has offered in this case is that which is contained in the pleadings. The bill alleges that the land in question was conveyed by the complainant and his wife to the defendant for the sole purpose and with the express understanding that the defendant should, immediately after acquiring title, convey it to the complainant. The defendant was required to answer under oath, and has done so. By her answer she says that she has no reason to doubt the truth of the above allegation of the bill. Does this constitute such evidence of the trust as to render it proper for the court to decree its execution? The proof of the trust, in my judgment, is complete. The declaration is in writing; it is signed by the trustee; it was made after she became competent to declare a trust; it is verified by her oath; and its terms are plainly stated. The principle is settled that an answer to a bill in equity may be sufficient, as a declaration of a trust, to justify the court in decreeing its execution. Chancellor Vroom, in Hutchinson v. Tindall, 3 N. J. Eq. 357, held that, where a complainant files a bill, alleging that a deed made to the defendant is subject to a trust in his favor, and praying that it may be so decreed, and the defendant answers, admitting the trust, the defendant's answer will constitute sufficient evidence of the trust to warrant the court in decreeing its execution. And the same efficacy was given by the court of errors and appeals to an answer in chancery, even in case where the declaration was volunteered, or rather was not made in response to the bill. Jamison v. Miller, 27 N. J. Eq. 586. It is wholly unimportant on what part of the declaration of trust the trustee signs his name. He may sign it at the bottom, at the top, at the side, or in the middle. He may sign by simply making his initials. "Wherever or in whatever form his signature may be made, it will be sufficient within the meaning of the statute, if what he does is done for the purpose of giving authenticity to the instrument. Smith v. Howell, 11 N. J. Eq. 349.
The defendant in this case signed the affidavit to her answer, not only for the purpose of authenticating the answer, but also for the purpose of verifying its contents. It must therefore be held that a valid trust in the land in question in favor of the complainant has been proved by evidence of the kind required by the statute. This being so, the complainant now stands invested with a full and complete estate in equity in the land in question. The land, in equity, belongs to the complainant, and the defendant simply holds the dry, naked legal title in trust for the complainant. In this condition of affairs, the defendant cannot defeat the complainant's right to a conveyance by showing that the land was conveyed to her, or to her grantor, in fraud of creditors. Ownes v. Ownes, 23 N. J. Eq. 60, is decisive against the validity of such a defense. Chancellor Zabriskie in that case said: "I know of no case in which a court of equity has refused to enforce a trust, actually declared and vested, on account of fraud in the conveyance to the trustee who declared the trust." The fraud here charged is against the conveyance by which title was put in the wife. The defendant says that the complainant put the title to the land in controversy in his wife to defraud his creditors. The proof in support of this charge is of the most meager character. But suppose it be admitted that that conveyance was fraudulent as to the complainant's creditors, there can be no doubt that it was good against him, nor that it gave to his wife as full and complete dominion over the land, against everybody except his creditors, as an honest conveyance would have given. As against everybody except creditors her title was unimpeachable, and sheconsequently might, as against all the world except the creditors of her husband, make a valid conveyance of it in trust or otherwise.
The complainant is entitled to a decree.
PAROL TRUSTS IN LAND. An express trust in lands cannot be created by parol in California, Donohoe v. Mariposa L. & M. Co., 5 Pac. Rep. 495; but see Harris v. Harris, 8 Pac. Rep. 8; nor in Connecticut, Todd v. Munson, 4 Atl. Rep. 99; Illinois, Phillips v. South Park Com'rs, 10 N. E. Rep. 230; Lawson v. Lawson, 7 N. E. Rep. 85; Iowa, Allen v. Withrow, 3 Sup. Ct. Rep. 517; McGinnis v. Barton, 33 N. W. Rep. 152; Hain v. Robinson, 32 N. W. Rep. 417; Kansas, Ingham v. Burned, 2 Pac. Rep. 804; Michigan, Shatter v. Huntington, 19 N. W. Rep. 11; Palmer v. Sterling, 2 N. W. Rep. 24: Minnesota, Jones v. Van Doren, 18 Fed. Rep. 619; Tatge v. Tatge, 25 N. W. Rep. 596; Randall v. Constans, 23 N. W. Rep. 530; Montana. Dunphy v. Ryan, 6 Sup. Ct. Rep. 486, 1 Pac. Rep. 710; Nebraska, Hansen v. Berthelson, 27 N. W. Rep. 423; Pennsylvania, Fogel v. Schall, 4 Atl. Rep. 339; Braden v. Workman, 1 Atl. Rep. 655; Longdon v. Clouse, Id. 600; Dilts v. Stewart, Id. 589; but see Berry v. Sawyer, 19 Fed. Rep. 286; Wisconsin, Pavey v. American Ins. Co., 13 N. W. Rep. 925. An express trust may apparently be created by parol in Texas, Smith v. McElyea, 3 S. W. Rep. 258; and in Maryland, but the only competent proof of its execution, under the statute of frauds, is a writing signed by the party who had the power to create it, Gordon v. McCulloch, 7 Atl. Rep. 457. To establish a resulting trust created by a parol agreement, where the subject of the trust is real estate, the evidence must be clear and satisfactory. Laughlin v. Mitchell, 14 Fed Rep. 382.
The existence of an express trust, as distinguished from facts from which the law will imply an express trust, cannot be proved by parol, and the declarations of the person holding the legal title are inadmissible for that purpose. Columbus, H. & G. Ry. Co. v. Braden, (Ind.) 11 N. E. Rep. 357.
Where parol evidence is necessary, and is admitted to establish a trust under a deed which shows no such trust, the same kind of evidence is admissible to defeat it. Newhall v. Le Breton, 7 Sup. Ct. Rep. 225.