EBENEZER G. WHITING, Complainant and Appellee, vs. EDWIN GOULD and JAMES R. HAWKINS, Defendants and Appellants, 2 Wis. 552

By the Court, Crawford, J. After a careful examination of this causé, we are unable to find any thing in it which would warrant a decree in favor of the complainant. Independent of the objection that there is a palpable variance between the case made by the bill, and that which is sought to be ed by the proofs, it is impossible to discover the existence of a trust, either express or by implication, enuring to the benefit of the complainant.

By his original contract with Wright & Knapp, he acquired no estate in the lots in question, but merely a chose in action, which upon performance of the conditions imposed upon him by that contract, he might enforce by a bill for specific performance, and until he. had, by the construction of the dwelling house on one of the lots, and the furnace on another, entitled himself to .a conveyance, his equitable interest in the property, was not such as to be enforced in equity. Bogert vs. Perry, 17 John. 354.

Upon the mating of the contract, there was certainly no trust estate created for the reason that neither the whole consideration, nor any aliquot part of it, had been paid, and the contract remained executory. But within a few days after the making of this contract, the complainant executed an absolute transfer or assignment of the same, and of all right and interest to which he might become entitled by virtue thereof, to his brother David H. Whitney, which assignment recited a consideration, (fifteen hundred dollars).

There is no declaration in this assignment that it is made in trust, but parol proof is introduced to show that the assignment was intended for the benefit of the complainant, and was without consideration.

If there was any pretence that through fraud or mistake, and against the intention of the parties, the recital of a valuable consideration found its way Into the instrument, there can be no doubt that a court of equity ought to admit parol evidence of the absence of such consideration, but unless such fraud or m^s^a^e is shown, proof of this kind is inadmissible for the purpose of destroying the effect of the assignment'. (Vide Wilkinson vs. Wilkinson, 3 Devereux's Eq. 376; Franklin vs. Roberts, 2 Iredell's Eq. 500; Kelly vs. Bryan, 6 id. 283; Stephens and others vs. Cooper and others, 1 John. Ch. 425; Movan vs.

Hayes, 1 id. Ch. 339; Morris vs. Morris, 2 Bibb, 311; Morse vs. Shattuck, 4 N. H. 229; Belden vs. Seymour, 8 Conn. 304; McCrea vs. Purmont, 16 Wend. 460; Wilt vs. Franklin, assignee, 1 Binney, 502; Allison vs. Kurtz, 2 Watts, 187; Leman vs. Whitley, 4 Russ. 423. There is no objection to this document on the ground of fraud, mistake or surprise, and the parol proof of a want of consideration, which would render an effective transfer a mere voluntary conveyance, is therefore insufficient and improper. Nor can it be shown by parol, that the transfer which completely vested in David W.

Whiting, all of the interest of the complainant, was intended nevertheless to be in trust for the use and benefit of the latter. At the time of the execution of the assignment, (February, 1839,) the statute of Michigan “for the prevention of frauds,” was the law in force and applicable to the transaction. The eleventh

section of that statute declares, “that all declarations or creations of trusts or confidence of any lands, tenements or hereditaments, shall be manifested or proved by some writing signed by the party” able to declare such trusts, or they shall be utterly void. (Stat. of Mich. 252.) This statute created a rule of evidence applicable to trusts in lands, by requiring that they should be manifested or proved by some writing, and as there is no such evidence of a trust in this transaction, we must hold that it was not competent to establish it by parol proof, for that •would be a virtual abrogation of the statute of frauds.

Vide Steere el al. vs. Steere et al., 5 John. Ch. 1; Movan vs. Hays, id. 339; Lord Irnham vs. Child, 1 Bro. 92; Portmore vs. Morris, 2 Bro. 219; Stevens vs. Cooper, 1 John. Ch. 425; Hare vs. Shearwood, 1 Ves. Jr. 241; Hutchinson vs. Tindall, 2 Green's Ch. 357; Botsford vs. Burr, 2 John. Ch. 404-415. The provisions of the statute of frauds do not apply to implied trusts, or those which are raised or created by operation of law, and not from the agreements or contracts of the parties, which would render the trusts express.

The latter come within the intention and words of the statute which requires that all such agreements shall be in writing, but the former are not affected by the statute. It is hardly necessary to remark, however, that in the transaction between the complainant and his brother David, there is no ingredient of an implied or resulting trust. The assignment must be taken to have been for a valuable consideration, and its effect was to divest the complainant of all interest, legal or equitable, in the contract with'Wright and Knapp, or in the property.

It appears that in 1839 or 1840, the title to the lote in question vested in Lorenzo Janes, and that the portion of the original contract which provided for- the building of a furnace on one of the lots, was by the consent and desire of David (who claimed to be the owner or assignee of the contract,) changed, and instead thereof, Mary E. Whiting, who was then unmarried, agreed to take a deed of the premises from Mr. Janes to her, and to give a mortgage on the same to secure the payment of two hundred dollars.

In pur-stance of the agreement, the property was conveyed by Janes and wife to Mary, who executed a mortgage thereon, securing the payment of two hundred dollai’S £0 janeg> yy-Q thus/find that the actual consideration for this property consisted of five hundred dollars, paid in the first instance by the complainant, but which payment enured to the benefit of David by the assignment, two hundred dollars secured to be paid by Mary, and the labor and expense incurred in the erection of the dwelling house on one of the lots, which seems, by the proof, to have been contributed by the complainant and David ; but in what proportions, or to what amount, is not clearly shown.

It is claimed that the title was conveyed to Mary E. Whiting “for the use and benefit of the complainant ”; in other words, that she acquired the property as trustee for her brother, the complainant.

If the intention, at the time, really was to secure the estate ' to Ebenezer (the complainant,) as the person equitably entitled to it, the parties to the transaction were most unfortunate in omitting all efforts or means to express such intention, for we here find the only person who could legally insist on any right under the first contract voluntarily abrogating it in part, and participating in a new arrangement, by which the title was to vest absolutely in Mary, and she alone was to secure the payment of the sum thereby agreed to be paid. The deed from Janes and wife to Mary E.

Whiting bears date the 28th day of July, 1840, and at that time the Statute of Michigan for the prevention of frauds had given place to the Statute of the Territory of Wisconsin, “to prevent fraudulent conveyances and contracts relative to real and personal property.” The sixth

section of this statute provided that no trust or power over, or concerning lands, or in any manner relating thereto, should be created, granted or declared, unless by act or operation of law, or by deed or conveyance in writing.

Under this provision of the statute, an express trust could be created by deed or conveyance only, and not bj parol, while an implied or resulting trust might be .raised or created by the operation of law, and proved by parol, for the obvious reason that the latter hind of trust has its origin, not in the agreement or contract of the parties, (which must be in writing,) but in the absence of all such agreement, and arises out.of the transaction merely.

The latter is but the creature of equity, the former is the result of compact ; and although a trust by operation of law is not affected by the statute of frauds, it is now, as it was before the enactment of the statute, entirely inconsistent with even a bare declaration of the trust by parol. JEx-pressum facit cessare taciturn. (See Lord Bellasis vs. Compton et al., 2 Vernon, 294.

We may here remark that it is not pretended that a trust relating to this property, and in favor of the complainant, was at any time created or declared in writing; but we are called upon to find and establish from the proofs, a resulting or implied trust. If this cannot be done, the whole case fails. It cannot, we think, escape observation, that the proof throughout has relation to parol agreements and arrangements between the parties, having for their object the preservation of the complainant’s interests, notwithstanding their inconsistency with the written instruments.

We have already stated that such agreements are insufficient to create a trust, or to vary the effect of a deed or contract in writing, and ^ence we will dismiss any further consideration of a trust arising from agreement or contract, with the remark, that an agreement cannot rest partly in writing anq partly in parol, because the written contract extinguishes any previous parol agaeement, in the absence of fraud or mistake; and furnishes the most reliable evidence of what was intended by the parties. Vide Mumford vs. McPherson, 1 John. 414; Parkhurst et al. vs. Cortlandt, 1 John. Ch. 273, and cases there cited.

If we correctly understood the counsel for the complainant, it is claimed that a trust results to him from the payment of the consideration, and if the principle were opposite to the case, there would be little difficulty in disposing of it, for ever since the case of Dyer vs.

Dyer, 2 Cox, 92, decided by Lord Chief Baron Eyre in 1788, in accordance with all the pre-preceding cases, it has not been questioned, “ that the trust of a legal estate, whether freehold, copyhold or leasehold, whether taken in the name of the purchaser and others jointly, or in the names of others without that of the purchaser, whether in one name or several, whether jointly or successively, results to the man who advances the purchase money.” But there are insurmountable objections to the application of this principle to the present case.

The whole consideration for the property was not originally paid by the complainant; he advanced five hundred dollars, and agreed by his contract with ’Wright Knapp, to erect a dwelling house and a furnace on the property, the cost of which was not at the time defined, nor has it yet been shown what the cost of the erection of the dwelling house has been, for the evidence on this subject is not such as to enable us to compute tlie amount expended.

It may perhaps be urged that such expenditure was calculated to increase the value of the property, and this is true ; but at the same time it may have been important and beneficial to the vendors of the lots, who perhaps were owners of adjacent property, and at all events the construction of these buildings was none the less a portion of the consideration, equally obligatory upon the purchaser, as would be the payment of a further sum of money. See Sayre Tvs. ownsend, 15. Wend. 647. By the subsequent agreement, at the time of the conveyance of the property to Mary E.

Whiting, she gave a bond for the sum of two hundred dollars, and secured the payment thereof by a mortgage of the property, as a further consideration for the purchase, and we can find no evidence that the complainant ever paid any portion of this sum. It is insisted, however, that the two hundred dollar bond was paid by a sale of a part of the property; but it is idle to contend that a resulting trust from the advance of the purchase money, can be thus raised by something like reimbursement, long after the execution of the deed by which the estate vested in the alleged trustee.

The trust must have sprung into existence (if at all) cotemporaneously with the deed, and if the consideration for the conveyance consisted, in whole or in part, of a credit given to Mary, no subsequent tender or reimbursement could have a retrospective effect to produce a resulting trust to the extent of such credit. Chancellor Kent, in Botsford vs. Burr, (2 John.

Ch. 405,) while discussing this subject, says, “The trust must be coeval with the deeds, or it cannot exist at all.” “ The trust results from the original transaction at the time it takes place, and it is founded on the actual payment of money, and on no other ground. It cann°t he mingled and confounded with any subseqUent dealings whatever.” The same principle is declared m Rogers vs. Murray, (3 Paige, 398,) by Chancellor "Walworth, and in the elaborate opinion of Chancellor Jones, in White vs.

Carpenter, (2 Paige, 217-238.) How can the court ascertain the precise portions of the consideration furnished by the different contributors, so as to determine the exact quantity of the estate to be decreed to each ? For it is certain, that independent of the payment of five hundred dollars, made by the complainant when he obtained the contract from Wright and Knapp, Mary and David must be considered as furnishing portions of the consideration; the former by her bond, and the latter by his work and labor in the construction of the dwelling.

As to the necessity of showing some definite portion of the consideration, vide Sayre vs. Townsend, 15 Wend. 647; White vs. Carpenter, supra; Smith vs. Burnham, 3 Sumn. 466. We think it is impossible to say how much of this estate ought to be awarded to each of these parties, even if it were clearly shown that a trust existed in favor of all of them, and it .is not the duty of the court to supply, by a mere arbitrary allotment, this defect in the case. Again, the complainant can claim no trust, by implication, from the payment of any part of the purchase money at the time of the conveyance.

After the assignment of his interest in the contract for the lots, to his brother, David W. Whiting, the complainant was, for all the purposes of the present case, a stranger to the transaction, and the payment which he had made ennred to David, who may he considered the person furnishing the amount so previously paid towards the purchase, at the time the deed to Mary E. Whiting was given. Vide Jackson vs. Morse, 16 John. 197.

Hence, we are led to conclude that the complainant cannot he deemed to have advanced any part of the consideration for the property, unless we permit his assignment to he affected, and its efficacy impaired, hy parol proof of a want of consideration. It follows then that a trust resulting from the payment of the consideration, could only have heen in favor of David W. and Mary E. Whiting, in proportion to the share of consideration furnished hy each of them.

But hy reference to the testimony of David W., (who was examined as a witness in the case,) we find that he claims to have acted as the agent of the complainant in the arrangement whereby the lots were conveyed to his sister, Mary, hy Mr. Janes, and assuming this to he true, and (as he swears) that “ he had no personal pecuninary interest in these lots,” althpugh Mr. Janes testifies that he professed to he the owner of the original contract, and entitled of course to all benefits from it, and as such had actually revoked and changed it in some respects, how can it he claimed that any trust would result to him ?

He disclaims all interest in the property, (notwithstanding his attempt on another occasion, to render it liable as his own for the payment of his debts, hy virtue of the assignment by the complainant to him,) and the intention of both Mary and David, it is insisted, was to take the title for the benefit of Ebenezer. Here then is a complete overthrow of everything like an implied trust in favor of David, because such a trust will never be decreed against the intention of the parties ; (vide White vs.

Carpenter, 2 Paige, 217-265;) and having already seen that that the complainant cannot be considered as furnishing any part of the consideration for the deed to Mary, he is not at liberty to show by parol that the conveyance was intended for his benefit. (See Botsford vs. Burr, above cited.) We may'here remark that David’s testimony is sufficient to destroy any implied trust in his favor, because where a trust may be shown by parol proof, it may also be rebutted or extinguished by the like kind of proof; its existence or non existence may thus be shown. (Vide Walker vs. Walker, 2 Atk. 98; Poe vs.

Popham, Doug. 24; Botsford vs. Burr, supra; Stere vs. Stere, 5 John Ch. 1, 18. From the view which we have taken of the case, it follows that neither the complainant, nor his brother David, had a trust estate in the property, and consequently the latter had no interest therein which could pass to the former by the transfer of the 20th March, 1850. The whole estate had vested in Mary long before that time, and had come under the control of her husband, (the defendant Gould,) by whom it was af-terwards sold to the defendant Hawkins, before David attempted to reconvey to the complainant.

And even if David had a trust estate which he might convey to-the complainant, still this would not entitle him to relief on the case made by his bill, for he does not claim as' the assignee of David, but as' the original cestui gue trust. In relation to the letters of Gould, introduced in evidence, we have only to say that without dealing in conjecture, no court could give them any certain application to the property, or hold them to he evidence of any interest therein, in the nature of a trust in favor of the complainant, or any other person. They are addressed to David W.

Whiting, and seem to have been written in that spirit of affection and confidence which is so very becoming in the intercourse of members of the same family. But they are entirely insufficient to establish the trust which is claimed in this case, and we cannot better dispose of the subject than by reference to the history of the case of Stere and others vs. Stere and others, 5 John.

Ch. 1, and to the opinion of the learned chancellor in that case, for ample reasons why the letters of Gould should have no influence in the present case. “It would be injurious to that freedom of intercourse, and to the operation of those kind and generous affections which ought to be cherished in the circle of the domestic connections, to make such deductions from loose and general expressions in a confidential correspondence between one member of a family and another, and to give them the force and vigor of legal obligations.” In the argument of this case much stress was laid upbn the fact that the defendants had not insisted upon the statute of frauds, by plea or answer, as a de-fence.

We cannot appreciate the objection. The bill merely sets up the trust in favor of the complainant, and does not contain any averment that it was created by deed or otherwise, as indeed it was unnecessary it should, because the court would intend that it was created in the manner required by law, unless the contrary appeared. In their answers, however, the defendants deny the existence of any trust, so that upon tMs issue, we tliink, it was incumbent on the complainant to prove the creation or existence of the trust by competent evidence.

On this subject, from an examination of the authorities, we believe the rule may be stated thus : If a defendant admits an agreement or trust, but insists on the statute of frauds as a defence, the court will not permit his admission to override the positive provisions of law, unless the statute is sought to be made a cover for fraud, and will not decree against the defendant; but if, after admitting the agreement or trust, he does not rely, by plea or answer, on the statute, a decree may be rendered against him, because he may be deemed to have renounced the benefit of the statute, and no objection to the nature of the proof can be offered, because the agreement or trust is admitted, and no proof of any kind is required.

But if, as in this case, the statement of a trust, or agreement, is met in the answer by a denial, and the complainant finds it necessary to support his bill by proof, he must show a trust or contract; as the case may be, evidenced by writing, and if he fail to do so, his case in that respect must fail. (Vide Talbot vs. Bowen, 1 A. K. Marsh Rep. 437; Cozine vs. Graham et al., 2 Paige, 177; Ontario Bank vs. Root, 3 Paige, 478; Harris vs.

Knickerbocker, 5 Wend. 638; 6 Vesey, 39.) It is unnecessary to discuss the mode of pleading the statute, and supporting the plea by an answer in cases of trusts, as- distinguished from cases of specific performance, where the trust or agreement insisted upon is admitted in the answer. On this subject see Story's Eg. Pl., p. 766-7, and note 1. But there can be no difference in the kind of proof necessary, where the trust or agreement, as the case may be, is denied.

We do not feel called upon, the present case, to consider the question whether the notice of an outstanding equity received by the defendant Hawkins before and about the time of his purchase, was such as to affect him. If it were necessary to do so, the notes to the case of Le Neve vs. Le Neve, (White & Tudor's Equity Cases, vol. 1,

part 1, p. 21,) furnish a copious reference to the English and American decisions on the subject. For the reasons above given, we are of the opinion that the complainant has not shown himself entitled to the relief which he seeks as cestui que trust, and that therefore the decree of the Circuit Court in this cause ought to be reversed, and the bill dismissed.