Bates v. Kelly , 80 Ala. 142 ( 1885 )

SOMERVILLE, J.

It must be admitted that, if Tulane advanced the money in controversy to the complainant, Kelly, by way of a loan, and had the title of the land, which was purchased with it, taken to himself as security for its payment, he would hold the property updn a resulting trust for Kelly, and upon the repayment of the amount, would be compelled to convey, so far as he himself is concerned. — Rose v. Gibson, 71 Ala. 35; Boyd v. McLean, 1 John. Ch. 582; Lehman v. Lewis, 62 Ala. 129; Perry on Trusts, § 133; Walker v. Elledge, 65 Ala. 51; Rhea v. Tucker, 56 Ala. 450. Such a trust, being one which results by implication or construction of law, does not fall within the provisions of the statute of frauds, and may be established by parol evidence. — Code, 1876, § 2199; Harden v. Darwin, 66 Ala. 55.

The question of fact, then, presented is, was the money used in purchasing the land invested for and on account of Kelly, or was he acting merely as an agent for Tulane in making the purchase. There is an irreconcilable conflict in the testimony on this point, and the finding of the chancellor is in favor of the complainant Kelly. It is our opinion that his conclusion is correct. The parties litigant are closely connected by affinity, and the litigation originates in a family disagreement. The oral testimony bears the natural and customary impress of these vitiating influences. We give more weight, therefore, to the written memoranda which seem to have passed between Tulane and Kelly, touching the subject. In a letter written by the former to the latter, bearing date May 13th, 1881, and referring to their previous oral agreement, he says: “ I am to give you one to five years to pay for the property in, you to pay me 8 per cent, interest, quarterly, on $4,050; I to give you all the benefit of advance in the property, and you to malie all losses good, if any.” On the first of August, 188], after Kelly had been in the occupancy of the property for several months, he paid Tulane the first installment under his agreement, and took from him the following receipt: “ Eec’d of Geo. O. Kelly eighty-one dollars in full payment of first quarter’s interest on purchase money for property occupied by him as a store and residence.”

The real estate in controversy is situated in the city of Birmingham. It is shown that the lot was bought and the storehouse upon it constructed by Kelly for his own use and occupancy as a merchant. It is no where denied that it was purchased especially for this purpose. It may be that Jared Bates, the father of complainant’s wife, as is alleged, agreed to give Tulane a mortgage on certain property in w etumpka to indemnify him against loss, but this, we think, was done entirely in the interest of complainant, who was intended to be the sole beneficiary of the transaction. The fact that he refused to give the mortgage after the money was advanced was immaterial. The promise was verbal and was not binding upon him in law, and his failure to perform it did not operate to revoke a loan already made to Kelly, or to change its nature.

The letter and rdceipt of Tulane are utterly inconsistent with the theory that the money was invested on his own account. It is perfectly and naturally reconcilable with the idea that it was designed as a loan to Kelly, who was the husband of his niece. The payment made is described in both writings as a payment of interest on the money. Kelly is to have the benefit of any advance in price, and to make good any depreciation in the value of the property below the price paid for it; and he is to have the right to redeem the property within five years by paying the amount advanced with eight per cent. interest, quarterly. The fact that Kelly executed no note or obligation for the money weighs but,” little in view of the important incident that he had already vested the legal title of the property in Tulane by the conveyance from Gibson, as he alleges, by way of security. The terms of these writings do not harmonize with the view insisted on by defendant’s counsel, that Tulane was the real owner of this property, and intended merely to rent it to Kelly. . We can discover no element of a lease in the transaction. The chancellor has found that Tnlane held the property in trust for the complainant, and as a security for the payment of the money loaned, with interest at the rate stipulated in the written memoranda, and we fully concur with him in this conclusion.

The testimony leaves no room whatever to doubt that the defendant, Louis A. Bates, purchased the property with full information as to complainant’s equity in it. líe can not, therefore, be protected as a bona fide purchaser for value without notice.

The offer in the bill to do equity is sufficient, a good and proper excuse being shown for not having made a tender of the amount, admitted to be due, prior to the filing of the bill. It is made clearly to appear that Tulane had conveyed the property to Louis Bates, and that each.of them repudiated the claim set up to it by the complainant. The offer would have been fruitless, and the law never requires the performance of a nugatory act. — Robbins v. Battle House Co., 74 Ala. 499; Willard’s Eq. Jur. 297; Elliott v. Boaz, 9 Ala. 772.

We discover no error in the decree of the chancellor, and it is accordingly affirmed.