Squires's Appeal ( 1872 )

The opinion of the court was delivered, January 9th 1872, by

Thompson. C. J.

The learned judge below, in rendering his decision, sustaining the defendant’s demurrer, does not in his opinion conceal his own doubts of its accuracy, but, strongly inclining to the belief in its soundness, thought it his duty to end this controversy in the most inexpensive and speedy manner. This was well intended. Had his judgment on the demurrer been unassailable, this view was commendable. But we think it was not.

For the purposes of this argument the facts of the bill being admitted by the demurrer must be regarded as true. In this light how stands the case ? In the second paragraph of the bill it is alleged, and by the demurrer admitted, that prior to the 28th of August 1868, the plaintiff, Mrs. Squires, purchased by parol from one Cundy the interest mentioned in the first paragraph of the bill, viz., the one-fourth of the working interest in the oil-leases and machinery on the McMillian farm, in Rockland township, Venango county, together with the oil on hand in tank, and moneys due to Cundy from the sales of oil from said interests then in the hands of defendant, he, Ridgway, agreeing to pay Cundy therefor the sum of five thousand dollars, which Cundy agreed to take for the property from plaintiff.

In the fourth paragraph of the bill it is alleged, that by reason of the relationship of Ridgway to the plaintiff, and his professions of friendship, she reposed confidence in him, and employed him as her agent to conclude the purchase, and to have an assignment made to himself in trust for her.

In the preceding section it was alleged, that there was an assignment of the interest sold to complainant by Cundy, made to Ridgway and intended by him for the use of, and in trust for 'her, the plaintiff. In the fifth paragraph it is alleged that there was from four to five thousand dollars due from Ridgway to Cundy belonging to plaintiff, by virtue of her purchase of Cundy’s interest in the oil-leases, “ which it was agreed by plaintiff and said Ridgway should be applied in payment for said interests to said Cundy, and in case of deficiency Ridgway should advance the balance and retain said interests until reimbursed from sales of oil from the wells, when he, said Ridgway, was to convey said interests and machinery to said Esther,” the complainant. Then follow the averments of the receipt of large sums of money by the defendant from the sale of oil (produced) from the said wells, charging that the defendant fraudulently contrived to get an absolute assignment on its face of the interests purchased by the plaintiff, when it was intended to be in trust for the plaintiff, and a refusal by him to convey the same to her or account, or to pay to her the proceeds of the property. All this was admitted by the demurrer of the defendant.

Ridgway being thus admitted to be the plaintiff’s agent, it was a fraud on his part, “pure and simple,” to take title in his own name for his own use. The act at once turned him into a trustee ex maleficio. The plaintiff was herself the purchaser from Cundy. It was of no consequence that it was hy parol; Cundy did not object to convey on that account. She paid for it by a transfer of the debt due to the interest in question from Ridgway, which debt became hers by the terms of the purchase. This is1 also admitted by the demurrer. The proviso to the third section of the act of 22d April 1856, excepts all cases of this kind from the requirement of the section that trusts are to be evinced by writing, otherwise to be of no effect. I will not discuss this matter, contenting myself with referring to Seichrist’s Appeal, 16 P. F. Smith 237, and the cases therein referred to by my brother Agnew. All that could be said here is to be found in that ease, and it conclusively rules the point in discussion here, viz.: that the Act of 1856 affords no shelter for a trustee ex maleficio.

The judgment of the court below, sustaining the demurrer and dismissing the bill, is reversed; the bill to be reinstated to be proceeded in according to equity practice, and the costs of this appeal to be paid by the appellee.