Peralta v. Castro , 6 Cal. 354 ( 1856 )

The opinion of the Court was delivered by Mr. Justice Terry.

Mr. Chief Justice Murray concurred.

On the trial of an issue of fact involving the validity of the will of Luis Peralta, deceased, the appellants offered as a witness one J. A. Forbes, a subscribing witness to said will. The respondents objected to the competency of the witness, and in support of their objection produced the record of certain deeds executed by two of the appellants in favor of witness, conveying certain lands inherited from Luis Peralta, being part of the property devised by said will; also a certain agreement between witness and one Sullivan, in which witness bound himself to warrant the title of certain land, sold by him, as assignee of one of the appellants against the claims of the heirs of Luis Peralta. Witness being examined on his voir dire, stated, that the conveyances had been executed for the purpose of enabling him to manage and dispose of the property for the benefit of the grantors; that he paid no consideration for said conveyances, and was not interested in any part of the land conveyed. Witness also stated that he had executed the agreement with Sullivan; that he had retained in his hands a portion of the purchase money of the lands, as indemnity against his liability upon the warranty, and had been fully indemnified by Antonio Peralta against all liability by reason of the contract.

The Court below held that the witness was incompetent, because, as a subsisting grantee of a portion of the lands devised, he had a present, certain, and vested interest in the proceeding; as a judgment sustaining the will would establish his title against the heirs-at-law, and also because of his contract of warranty.

The tendency of the modern decisions is against the exclusion of witnesses, and many matters which formerly were held to render a witness incompetent, now only go to affect his credibility.

“ It is a general rule, that a witness will not be incompetent on the ground of interest, unless the alleged interest be certain in its nature; for if it be a matter of uncertainty, whether the witness will gain or lose by the "event of the cause, it cannot be said of him, that he is in fact interested, and his testimony will, therefore, be received.” 1 Phillips’ Ev., 86.

This principle is also announced by Greenleaf, who says, that “ The interest must be a present, certain, and vested interest, and not uncertain, remote, or contingent, and if the interest be of a doubtful nature, the objection goes to the credit of the witness, and not to his competency.” See 1 Gr. Ev., 390. Again he says, “ The true test of the interest of the witness is, that he will either gain or lose by the direct legal operation, or effect of the judgment, or that the record will be legal evidence for or against him in some other cause.” This test was adopted by our Legislature in the precise language of Mr. Greenleaf. See Practice Act, 392.

It is evident that the interest of Forbes, arising out of his contract with Sullivan, was not a present or certain interest; he testified that he had been fully indemnified by Antonio Peralta, and that he had retained in his hands a portion of the purchase money of the lands which he thought sufficient for his indemnity. It also appears that the assignor of Forbes, for whose benefit the contract was made, was one of the heirs at law of Luis Peralta, and it is not shown, that his distributive share of the estate is not greater than the lands mentioned in the warranty. This being the case, it would be in .the power of the Court, in making a distribution of the estate, to so apportion the lands, as to confirm the disposition so made.

The effect of the conveyances from Peralta to Forbes, made under the circumstances stated, was, that a trust, by operation of law, resulted in favor of the grantor.

Before the Statute of Uses, “if a person had conveyed his lands to another, without any consideration or declaration of the use of such conveyance, he became entitled to the use or permanency of the profits of the land so conveyed. This doctrine was not altered by that statute, and, therefore, it became an established principle, that where the legal seizin and possession of lands is transferred by any common law conveyance or assurance, and no use is expressly declared, nor any consideration or evidence of intent to direct the use, such use shall result back to the original owner of the estate.” Greenleaf’s Cruise, tit. XI, ch. 4, § 16. See also Hill on Trustees, 107, and cases cited.

But it is said that the conveyances to Forbes are absolute on their face, and that parol evidence is not admissible to contradict or vary the terms of a written contract. On this question, the authorities are not uniform; but it is settled, that a plaintiff is entitled to an answer to allegations contained in a bill suggesting the existence of a parol trust; and a general demurrer to a bill of that nature will be overruled. See Hill on Trustees, 61, and cases cited. If he denies the trust in his answer, then it appears that no parol evidence will be admitted to establish it; though it has been held that any admission in writing, such as the entry in a book of accounts, of payment of money on account of the trust, or a letter acknowledging the trust will be sufficient to take the case out of the Statute of Frauds. See Osborn v. Endicott, decided April T., 1856.

A question of this kind could only arise in a suit between the trustee and cestui que trust, upon a denial of the trust by the grantee; here the grantee avows the trust, and no authority has been adduced to show that a parol agreement in contradiction to the terms of a deed, may not be established by the admission of the party.

The authorities cited by the respondent are cases in which the allegations of trust were denied by the grantees, except the case of Seman v. Whitney, 4 Eng. Ch. R. In that case the grantee having died after devising the property, it was held, that in a contest between the grantor and the legatee, parol proof was not admissible to contradict the deed.

Forbes, being a mere naked trustee, haling no beneficial interest in the land, was a competent witness. 1 Phil. Ev., 124.

Judgment reversed, and a new trial ordered.