Osborne v. Endicott , 6 Cal. 149 ( 1856 )

The opinion of the Court was delivered by Mr. Chief Justice Murray.

Mr. Justice Terry concurred.

The opinion of the Court below is based upon two propositions; first, that plaintiff is estopped by the recital of his deed to the defendant; and second, that the trust sought to be established is within the Statute of Frauds.

The general rule of law is, that recitals in a deed bind all persons who are parties or privies thereto; but this rule does not extend to that which is mere description, or an averment which is not essential. The doctrine of estoppels has always been construed with great strictness, because loose statements or recitals may often, so far from expressing the truth, (which no one should be permitted to deny,) exclude the party from setting it up.

Testing the present case by this rule, the correctness of which I apprehend no one will deny, how can it be said that the plaintiff is es-topped by the recital in his deed to Endicott “ that he hold the lot in question for him.” The recital was not necessary for the purposes of the conveyance; the exact facts of the case were within the knowledge of the party taking it; no new parties have intervened to change the character of the transaction; no surprise, fraud, or imposition has been practiced, and in fact the recital is not attacked by this proceeding. Osborne did hold the lot in trust for the defendant, being himself entitled to a certain interest which he now seeks to maintain. We have examined all the authorities cited by the respondents, and can find none that would warrant us in holding the present plaintiff estopped by his conveyance.

Upon the second point, it is equally clear that the plaintiff’s recovery is not barred: First, because the Statute of Frauds is not pleaded; and second, because this is not a case within the statute, but a resulting trust, or trust by operation of law, which is expressly excepted by the statute.

It is a well recognized principle, that where, upon the purchase of real property, the conveyance of the legal estate is taken in the name of a third person and the consideration is paid by another, a trust immediately arises, and the person in whose name the conveyance is taken, is deemed in law to hold as the trustee for the one furnishing the money. So, if two furnish the purchase money, or one money and the other skill, and the deed be taken in the name of one, he will be held to be a trustee for the other.

In order to create such a trust, it is not necessary in all cases that it should appear affirmatively upon the face of the deed that the money was not furnished by the nominal purchaser; but the same may be proved by any note or memorandum in writing of the nominal purchaser admitting the fact, even though he plead the Statute of Frauds, Sanders on Uses and Trusts, 323.

A distinction is to be observed between the seventh section of the statute 29 Charles II, chap. 3d, and .our statute. The former provides that “ all declarations or creations of trusts, etc., shall be manifested and proved by some writing signed by the party, etc. •/’ upon which it was held, that % trust may be created by parol, and the statute fully complied with by establishing it by written evidence; while ours requires that every trust should be created by deed in writing, or by operation of law. So that the difference consists in this, that in the former, théy must be proved in a certain way—in the latter, they must be created in a particular manner.

Before the passage of the English statute, trusts were created (except, probably, in a few cases) and proved by parol; and after the statute, resulting trusts, or trusts by operation of law, were held to be excepted from the operation of the rule. Our statute does not change the common law on this subject, and trusts of this nature may be proved as they could have been before its passage. (Greenleaf on Evidence, section 266.)

On the trial of this cause, the Court below rejected certain evidence which should have been admitted under our view of the case; and inasmuch as the Court seems to have based its judgment upon conclusions of law, and has not found the facts, the cause is remanded, with directions to proceed and determine it according to opinion above expressed.