O'Hara v. Dilworth ( 1872 )

The opinion of the court was delivered, by

Sharswood, J.

— A careful consideration of the voluminous record and paper-books in this case has brought us to the conclusion that it all depends upon the solution of a single question, which is whether there was any evidence which ought to have been submitted to the jury of a resulting trust, within the exceptions contained in the Statute of Frauds, in favor of Mrs. O’Hara prior to the execution of the deed of July 10th 1866, by Michael O’Hara to William Harrison and G. L. B. Fetterman in trust for her use ? The verdict of the jury establishes that the deed just mentioned was! fraudulent and void as against the creditors of Michael O’Hara, and we see no reason to doubt that there was evidence in the cause which made that proper for the determination of that tribunal. If, however, there was such a resulting trust as could have been enforced consistently with the provisions of the statute against Mr. O’Hara, before the date of that deed, the evidence should certainly have been submitted to the jury ; for it is very clear that if found by them it was not open to the attack of the creditors. It may be conceded that the deed being upon record, the defendants, deriving title from the assignees in bankruptcy, could not set up the defence that they were bond fide purchasers for value without notice; for the record of the deed was sufficient to put them upon inquiry as to whatever facts might exist to sustain it as a valid conveyance, and was therefore notice of such facts. They knew they must defeat that deed, and must be prepared to meet whatever would be available to disprove the allegation of fraud, and show it to be fair and honest. It may also be conceded that if the deed of trust for the separate use of Mrs. O’Hara could be sustained, her subsequent deed and release were ineffectual to pass her title under the decision of Lancaster v. Dolan, 1 Rawle 231, Thomas v. Folwell, 2 Whart. 11, and the other cases which have followed their lead.

The question being, as we have stated it, whether there was such a resulting trust as could have been enforced against Mrs. O’Hara independently of the deed' of July 10th 1866, the evidence must be such as, if believed by the jury, ought to satisfy the conscience of the judge sitting as a chancellor. This is so well settled and familiar a principle of our jurisprudence that it is no longer necessary to cite the authorities for it.

Mr. O’Hara became the purchaser at a sale under an order of the Orphans’ Court made by William Harrison as guardian of his wife and her two sisters, the children of John McFarland, deceased. The purchase-money was fourteen thousand four hundred and thirty-seven dollars and fifty cents. His bond and mortgage of the premises were taken for twelve thousand four hundred and forty-seven dollars and ninety-two cents, and for the hand-money, two thousand four hundred and eighty-nine dollars and fifty-eight cents, his judgment-note. These amounts were all subsequently discharged: the hand-money from the proceeds of sale of other property of Mr. O’Hara, and the mortgage by 'the purchasers of the land in question from his assignees in bankruptcy, who bought subject to it. No part of the purchase-money was paid by Mrs. O’Hara, but she received her share of the mortgage from the hands of the purchasers. There certainly was in no sense any actual payment by her which could raise a resulting trust. Nor was there any fraud within the sense of the decisions. Had Mr. O’Hara refused to convey according to his promise, it would be a mere breach of a parol agreement, which has been uniformly held not to create a trust within the exception of the statute: Jackman v. Ringland, 4 W. & S. 149; Barnet v. Dougherty, 8 Casey 371. The testimony of the witnesses certainly establishes that it was the understanding of the family that he was buying for his wife, and that he promised that “ he would buy it for Mrs. O’Hara and keep it so that it would not go out of the family while she lived.” It is possible that in consequence of this promise the family made no opposition to his purchase, and he may have acquired the property at a less price than he would otherwise have been obliged to pay. It is sufficient to refer to Nixon’s Appeal, 13 P. F. Smith 279, to show that this was not sufficient- to create a trust e% maleficio. The circumstances of that case are much stronger in these respects than the one in hand. It is true that if a man procures a title from another which he could not have obtained except by a confidence reposed in him, if he abuse that confidence he is converted into trustee ex maleficio, as in Seichrist’s Appeal, 16 P. F. Smith 237. There is no evidence of any such breach of confidence on the part of Mr. O’Hara. He meant to perform his promise, and he did perform it, but unfortunately he was in such circumstances that according to the finding of the jury his performance of the parol promise was in law a fraud on his creditors. As his mere parol promise could not raise a trust in favor of his wife, it ought not to prevail against the superior claims of his just creditors. It has been urged, however, and this is indeed the pinch of the case, that the evidence was sufficient to show that his purchase was under a family arrangement for the partition of Mr. McFarland’s estate among his three daughters, and that in point of fact this land was taken by Mr. O’Hara either in whole or in part on account of his wife’s share. It may be that if this had been clearly and distinctly proved it would have saved her title. But the evidence relied on as tending to show this was so vague and indefinite as clearly not to fall within the strict rule established as to the proof of resulting trusts. Mrs. Barr (one of the daughters) says, “ it was understood that it was sold as part of her (Mrs. O’Hara’s) share.” Mrs. O’Hara testified, “Both my sisters gave it up to me to be a home for me and Mr. Harrison, the guardian, said, “ When I sold the property the understanding was among them that Mrs. O’Hara was to have that part of the hill, and Mrs. Barr the other, where Dr. Barr’s house now is.” There was no evidence of any partition of Mr. McFarland’s estate, and of course none of any deduction from Mrs. O’Hara’s just share of the residue in consequence of the conveyance of this land to her husband. There was no evidence that Mrs. Barr had a similar advantage conceded to her, and certainly none as to the other sister. There was no mutuality in the arrangement so far as appears. Supposing it proved, what would be the interest of Mrs. O’Hara in this land? In justice and equity nothing beyond what it should appear to have been worth more than the sum at which it was bid off at the sale. As to that the evidence is equally vague and indefinite, and indeed from Mr. O’Hara’s own testimony it may well be doubted whether he gave any less for the property than its fair market value at the time of the sale. No chancellor upon a bill for the partition of the remaining property of Mr. McFarland would have allowed any weight to such testimony as this to reduce the equal share of Mrs. O’Hara. The conclusion is that no resulting trust was made out, and the learned judge was perfectly right in not submitting the question to the jury.

Judgment affirmed.