This section is from the book "A Treatise On The Construction Of The Statute Of Frauds", by Causten Browne. Also available from Amazon: A treatise on the construction of the Statute of frauds.
1 The same principle applies to Delaware, which was part of Pennsylvania. Hall v. Livingston, 3 Del. Ch. 348.
2 A very full and clear discussion of the Pennsylvania cases on this subject will be found in Freeman v. Freeman, 2 Pars. Eq. Cas. 81.
1 German p. Gabbald, 3 Binn. 302; Wallace v. Duffield, 2 Serg. & R. 521; Peebles v. Reading, 8 Serg. & R. 484; Slaymaker v. St. John, 5 Watts, 27; Randall v. Silverthorn, 4 Pa. St. 173; and other cases referred to in the foregoing. See also Hall v. Livingston, 3 Del. Ch. 365; Fleming v. Donahoe, 5 Del. Ch. 255; Foy v. Foy, 2 Hayw. (N. C.) 296.
2 Murphy v. Hubert, 7 Pa. St. 420, per Gibson, C. J. In California it is held that a parol declaration of trust in a mortgage of land is good, on the ground that by the law of that State a mortgage conveys no estate in the land.
3 Troll v. Carter, 15 W. Va. 567. This case contains a valuable discussion of the question how far the function of the seventh section is not really performed by the fourth section.
§ 82. In regard to what kinds of trusts are embraced by the statute, there seems to have been little question made, the language of the sections relating to that subject being simple and comprehensive, and the word "trusts" having been long since determined to comprehend uses.1 The section is, in terms, confined to trusts of real estate, and it has been repeatedly held that trusts of personalty are not affected by its operation.2 The distinction is thus clearly illustrated by Sharswood, J.: "If a deed of land be made to A. and B. on a parol trust that they will hold for the benefit of grantor, or a third person, - which parol trust cannot be enforced against the land, . . . yet if they sell the land and convert it into money, a parol declaration made by them, subsequently to such sale and conversion, will be entirely effectual."8 On the other hand it is equally clear that the statute embraces and applies to chattels real.4 A trust in a contract to convey land may be proved by parol:5 so also a trust in a mortgage.6 And a written contract for the conveyance of land may be assigned by parol.7 In New York, it was held in the Supreme Court, that an exception was to be admitted of uses or trusts in favor of religious societies. This may have been in consequence of, and by inference from, the peculiar condition in which the statutory law of that State concerning the incorporation of religious societies has been left. Upon appeal, however, the ruling was reversed, the court holding that there was "no qualification or exception, express or implied, in favor of public trusts or charitable uses."1 It has been decided in Massachusetts, that the statute does not apply to secret trusts and confidences for the purpose of delaying or defrauding creditors, but that they may always be proved by parol, and, when so proved, render wholly inoperative the formal transactions which may have been adopted for such purposes by the parties.2 It could hardly be doubted that such cases must be excepted from the statute, even if it were required to treat them as exceptions; but though its language is general, applying to all cases where creations of trust estates are to be manifested or proved, it seems clearly the meaning of the statute that no such trust shall be set up by means of verbal proof, an object just the reverse of the verbal proof held to be admissible in the case referred to.
1 Holt, 733; Roberts on Frauds, 94.
2 Nab v. Nab, 10 Mod. 404; Kimball v. Morton, 1 Halst. (N. J.) Ch. 26; 2 Story Eq. Jur. § 912; Roberts on Frauds, 94; Williams v. Has-kins Est., 29 Atl. Rep. (Vt.) 371.
3 Maffitt v Rynd, 69 Pa. St. 386; Hess' Appeal, 112 Pa. St. 168.
4 Skett v. Whitmore, Freem. Ch. 280; Forster v. Hale, 5 Ves. 308; Riddle v. Emerson, 1 Vern. 108. And see Hutchins v. Lee, 1 Atk. 447; Bellasis v. Compton, 2 Vern. 294.
5 Hazewell v. Coursen, 36 N. Y. Sup'r Ct. 459.
5 Bucklin v. Bucklin, 1 Abb. (N. Y.) App. Dec. 242. In Dow v. Jewell, 21 N. H. 488, where there was a parol agreement that a party who had advanced part of the purchase-money for an estate should have the right for life of taking timber from the land, it was held that this privilege, while it might be secured by an express trust, could not be by one arising by implication of law. See Thacher v. Churchill, 118 Mass. 108; Japia r. Demartini, 77 Cal. 383.
7 Currier v. Howard, 14 Gray (Mass.) 511. As to assignments of existing estates in land, see § 45, ante.
§ 83. The eighth section of the English Statute of Frauds, however, expressly enacts that the statute shall not apply to any cases of trusts arising by act or operation of law, upon any conveyance of any lands or tenements, and it may be convenient to examine what are the trusts here referred to, so as to arrive at a clear understanding of the subject-matter to which the statute applies, before proceeding to inquire what are the formalities which it requires to be observed.
§ 84. In Lloyd v. Spillet, Lord Hardwicke took occasion to classify these trusts by act or operation of law, or, as they are commonly called, resulting trusts, and he divided them into three classes: first, where an estate is purchased in the name of one person, but the money or consideration is given by another, and a trust in the estate results to him who gave the money or consideration; second, where a trust is declared only as to part, and nothing said as to the rest, and what remains undisposed of results to the heir-at-law; and third, where transactions have been carried on mala fide. In the report of the same case in Barnardiston, the third class is stated to have been explained more clearly by his Lordship, as embracing cases "where there has been a plain and express fraud. Where there has been a fraud in gaining a conveyance from another, that may be a reason for making the grantee in that conveyance to be considered merely as a trustee." 1 These resulting trusts are not the creations of the statute, and in declaring them to be provable by parol it has only affirmed the common law. Thus in several of our own States whose Statutes of Frauds are silent upon the subject, resulting trusts have been sustained on common-law principles.2 They do not depend upon any agreement between the parties, but are mere implications of law from the fact of the purchase with another's money, or the fact of the declaration of trust as to part of the estate only and silence as to the remainder, or the fact of fraud in procuring the legal title.3 They arise upon actual conveyance of land, and by implication of law, it must be of an aliquot part of whole interest in the property. The whole consideration the whole estate, or for the moiety or third or some other definite part of the whole, must be paid; the contribution or payment of a sum of money generally for the estate, when such payment does not constitute the whole consideration, does not raise a trust by operation of law for him who pays it; and the reason of the distinction obviously is, that neither the entire interest in the whole estate nor in any given part of it could result from such a payment to the party who makes it, without injustice to the grantee by whom the residue of the consideration is contributed.1 Upon the same view, it is held that if the proportion paid towards the consideration by the party claiming the benefit of the trust cannot be ascertained, whether because its valuation is from the nature of the payment uncertain, or because the sum paid is left uncertain upon the evidence, no trust results by operation of law.2 § 87. It is not necessary that the person claiming the benefit of the purchase should make actual payment of the price in money. If it be upon his credit as by his giving his note for the price,3 or by his being credited for the price by the vendor,4 it is sufficient. So also if the compromise of a claim of his against the vendor be the consideration,1 or the allowance to the vendor of an old debt.2 Where it is his credit that is used in the transaction originally, it makes no difference that the money to meet the obligation is subsequently furnished him by another,3 unless there was a previous agreement to that effect, in which latter case it is clear that the credit at risk was really that of the party who had engaged to furnish the money.4