Willard v. Sturkie , 213 Ala. 609 ( 1925 )

"Trust in Lands; How Created; Exceptions. — No trust concerning lands, except such as results by implication or construction of law, or which may be transferred or extinguished by operation of law, can be created, unless by instrument in writing, signed by the party creating or declaring the same, or his agent or attorney lawfully authorized thereto in writing." Code, § 6917.

Does the evidence, without conflict, disclose an effort to establish a parol trust in lands within the meaning of this statute?

Appellant insists the transaction was merely a contract for personal services; the measure of compensation being a sum equal to the amount realized upon a sale of the property in excess of the mortgage, interest, and expenses. We cannot so construe the evidence on behalf of plaintiff. Throughout the testimony runs a common import that the making of an absolute deed, extinguishing the mortgage debt and vesting in the grantee a fee-simple title with absolute power of disposition, was coupled with a parol agreement that the parties would lend their mutual efforts to sell the property, and any "overplus" should be the property of plaintiff and paid over to him. Such an agreement carries a beneficial interest in the real estate. If reduced to writing, either by incorporation in the deed or by separate instrument executed according to the statute, it cannot well be questioned that it would impose active duties upon the grantee as trustee of an express trust. We think the case within the above statute avoiding parol trusts in lands. Chesser v. Motes, 180 Ala. 563, 61 So. 267; Patton v. Beecher,62 Ala. 579; Brock v. Brock, 90 Ala. 86, 8 So. 11, 9 L.R.A. 287; Brindley v. Brindley, 197 Ala. 221, 72 So. 497; Manning v. Pippin, 86 Ala. 357, 5 So. 572, 11 Am. St. Rep. 46; Moseley v. Moseley, 86 Ala. 289, 5 So. 732; White v. Farley, 81 Ala. 563,8 So. 215; Moore v. Campbell, 102 Ala. 445, 14 So. 780; Sanders v. Steele, 124 Ala. 415, 26 So. 882; Coleman v. Coleman,173 Ala. 282, 55 So. 827; Junkins v. Lovelace, 72 Ala. 303; Tolleson v. Blackstock, 95 Ala. 510, 11 So. 284; Tillman v. Kifer, 166 Ala. 403, 52 So. 309; Brackin v. Newman, 121 Ala. 311,26 So. 3; O'Briant v. O'Briant, 160 Ala. 457, 49 So. 317; Bailey v. Irwin, 72 Ala. 505; Jacoby v. Funkhouser, 147 Ala. 254,40 So. 291.

The further point is made that upon a sale of the lands by defendant, and receipt of the purchase money, the contract was executed, and no longer subject to the statute of frauds.

It is true the statute of frauds avoids executory and not executed contracts. As applied to ordinary sales of land, the statute expressly provides that part performance, that is, payment of a portion of the purchase money and putting the purchaser in possession by the seller, withdraws the transaction from the statute. Code, § 8034, subd. 5.

The statute against parol trusts, as applied to the case before us, aims at security of titles by avoiding parol agreements engrafting a trust upon an absolute conveyance, the grantee taking a less estate than declared in the deed. The transaction does not contemplate the passing of possession, the indicia of ownership, to the beneficiary in the alleged trust. Chesser v. Motes, 180 Ala. 563, 61 So. 267, was, as here, an action of assumpsit. The husband had conveyed lands by warranty deed to his wife, under a parol agreement that, after his death, she should sell the lands and divide the proceeds among the children of his first wife. The widow sold the lands, and received the purchase money, and the suit was to recover this fund. This court declared the transaction void as a parol trust in lands. The point was made that the money had become personalty by the sale of the lands, or, to state it differently, by an execution of the trust. The court pointed out that the deed made no provision for a sale, and the right to the proceeds could be maintained only upon proof of an agreement creating a parol trust in violation of the statute. This case seems to us conclusive of the case before us.

In the leading case of Patton v. Beecher, 62 Ala. 579, the history of our statute was given, and its scope and effect carefully defined. It was declared that at common law a parol trust could be established in equity upon lands passing by absolute conveyance; that parol testimony was not refused as tending to vary the terms of the deed, because it did not defeat the absolute title at law. After quoting sections 7 and 8 of the English statute of frauds, and section 1320, Code of 1852, now section 6917, above quoted, it was said:

"Between this and the English statute, there are differences of phraseology, not affecting any question now presented, and whether these differences will require a difference of construction, it is not now necessary to discuss. The statutes have a common purpose — the requisition of written evidence of trusts concerning lands, and the prohibition of the enforcement of such trusts resting merely in parol; unless they fall within the exception of trusts resulting by implication or construction of law, or which may be transferred or extinguished by operation of law."

Proceeding to discuss the exceptions in the statute, "trusts resulting by implication or construction of law," it was pointed out that these exceptions arise, not from contract, but from the acts of the parties upon which a court of equity raises a resulting trust or trust de son tort for the prevention of fraud; that upon the same ground it is permitted in a court of equity to show an absolute conveyance to be a mortgage. It is then declared that the mere violation of a parol agreement to hold in trust is not such fraud as will raise a constructive trust; no fraud or mistake appearing in the original transaction. This case (Patton v. Beecher), followed by Brock v. Brock, 90 Ala. 86, 8 So. 11, 9 L.R.A. 287, has established a clear and sound construction of our statute against parol trusts. They well state and approve the views of eminent authorities elsewhere deprecating a tendency to create exceptions to the statute tending to defeat its salutary purpose. We think Chesser v. Motes, supra, in harmony with this construction.

It may be there are cases in which the equitable action for money had and received may be maintained for money held by a trustee of a fully executed trust, leaving nothing to be done but to pay over money which in equity and good conscience belongs to another. We do not seek to define them here. Such action should not be substituted for an accounting in equity. When the right to the money depends upon proof of a parol trust, void under the statute, to allow a recovery is to strike down the statute.

The case before us illustrates the effect of such holding. The grantee had an absolute deed; took possession as absolute owner; plaintiff was a tenant thereon; in this status the lands were sold several years after the deed was made; no act in dealing with the property, controlling it or selling it, indicated, to outside observation, any recognition of a trust. The existence thereof rests wholly upon parol evidence of plaintiff and his wife that such was the original agreement, and that later promises were made to carry it out; but never, at any time, was anything paid in recognition of the obligation. We think the right of recovery rests solely upon proof of a parol trust.

The right to recover the consideration paid, if any, in the form of work and labor done or expenses incurred by plaintiff, in compliance with a contract avoided by the statute of frauds, is not presented in argument.

The giving of the affirmative charge was not erroneous upon any of the grounds presented upon this appeal.

Affirmed.

ANDERSON, C. J., and SOMERVILLE and THOMAS, JJ., concur.