Consideration Paid by Another.
The third class of resulting trusts is where the purchase price is paid by one person, and the conveyance taken in the name of another. In these cases equity presumes that it was the intention that the one who paid the money should hold the beneficial estate.86 In order that this presumption may arise, however, the payment must be actually made,87 or a present obligation to pay incurred, at the time of the conveyance,88 and the payment must be made as a
84 Gumbert's Appeal, 110 Pa. St. 496, 1 Atl. 437; Stevens v. Ely, 1 Dev. Eq. (N. O.) 493; Hawley v. James, 5 Paige (N. Y.) 318; Russell v. Jackson, 10 Hare, 204; Pilkington v. Boughey, 12 Sim. 114; Williams v. Coade, 10 Ves. 500.
85 Sturtevant v. Jaques, 14 Allen (Mass.) 523; Morice v. Bishop of Durham, 10 Ves. 521; Dawson v. Clarke, 18 Ves. 247.
86 Sayre v. Townsend, 15 Wend. (N. Y.) 647; Kendall v. Mann, 11 Allen (Mass.) 15; Latham v. Henderson, 47 111. 185; Mathis v. Stufflebeam, 94 111. 481; Moss v. Moss, 95 111. 449; Mclenan v. Sullivan, 13 Iowa, 521; Rogan v. Walker, 1 Wis, 527; Collins v. Corson (N. J. Ch.) 30 Atl. 862; Gashe v. Young (Ohio Sup.) 38 N. E. 20; Lee v. Patten, 34 Fla. 149, 15 South. 775; Hews v. Kenney, 43 Neb. 815, 62 N. W. 204. When a co-tenant takes the legal title to the whole tract, a resulting trust arises. Rogers v. Donnellan (Utah) 39 Pac. 494. For evidence held insufficient to establish this form of trust, see Throckmorton v. Throckmorton (Va.) 22 S. E. 162.
87 Barnet v. Dougherty, 32 Pa. St. 371; Perkins v. Nichols, 11 Allen (Mass.) 542; Alexander v. Tarns, 13 111. 221; Whiting v. Gould, 2 Wis. 552; Sullivan v. Mclenans, 2 Iowa, 442; Howell v. Howell, 15 N. J. Eq. 75.
88 Gilchrist v. Brown, 165 Pa. St 275, 30 Atl 839; Whaley v. Whaley, 71 Ala. 159, purchase, and not as a loan.89 A payment of part of the purchase price will raise a resulting trust, in proportion to the amount paid.90 Trusts of this kind often arise in cases of joint purchase, where the title is taken in the name of one only.91 These resulting trusts are abolished by statute in several states, except where the title is taken in the name of another person without the consent of the person paying the purchase price.92 It is provided in each of these states, however, that these trusts may be enforced in favor of creditors of the one paying the money.93
Same - Deed to Wife or Child.
Where the legal title is taken in the name of the wife or a child of the one paying the purchase price, the usual presumption does not obtain, and no trust results; for it is considered that, when the one advancing the money takes the title in the name of one whom he is under a legal or moral obligation to support, the transaction is intended as an advancement or gift.94 Parol evidence, however, is admissible to show that no such intention existed, and in this way to establish a resulting trust;96 and the transferee may, on the other hand, introduce evidence to show that an advancement was intended.97 Here, as in all other cases where a trust is sought to be established by parol evidence, the proof must be clear.98
89 Francestown v. Deering, 41 N. H. 438. Cf. Mcgowan v. Mcgowan, 14 Gray (Mass.) 119; Cramer v. Hoose, 93 111. 503; Berry v. Wledman (W. Va.) 20 S. E. 817.
90 Smith v. Smith, 85 111. 189; Botsford v. Burr, 2 Johns. Ch. (N. Y.) 405; Say re v. Townsend, 15 Wend. (N. Y.) 647; Latham v. Henderson, 47 111. 185.
91 Robarts v. Haley, 65 Cal. 397, 4 Pac. 385; Paige v. Paige, 71 Iowa, 318, 32 N. W. 3G0. And see cases In the last note.
92 l Stim. Am. St. Law, § 1706; Haaven v. Hoaas, 60 Minn. 313, 62 N. W. 110.
93 l stim. Am. St. Law, % 1706. But see Mccahill v. Mccahill, 11 Misc. Rep. 258, 32 N. Y. Supp. 836; Gage v. Gage, 83 Hun, 362, 31 N. Y. Supp. 903.
94 Cartwright v. Wise, 14 111. 417; Guthrie v. Gardner, 19 Wend. (N. Y.> 414; Seibold v. Christman, 75 Mo. 308.
96 Guthrie v. Gardner, 19 Wend. (N. Y.) 414; Jackson v. Matsdorf, 11 Johns. (N. Y.) 91; Persons v. Persons, 25 N. J. Eq. 250; Taylor v. Taylor, 4 Gilm. (111.) 303; Butler v. Insurance Co., 14 Ala. 777; Dudley v. Bosworth, 10 Humph. (Tenn.) 8.
97 Sldmouth v. Sldmouth, 2 Beav. 455.
98 Cartwright v. Wise, 14 111. 417; Cairns v. Coleburn, 104 Mass. 274.
154. Where the title to real property is acquired by fraud, the law to do justice treats the wrongdoer as a trustee for the one defrauded. Trusts so established are called constructive.
Constructive trusts are raised in order to do justice between the parties, without any reference to the probable intention, and in most cases contrary to the intention, of the trustee. Constructive trusts, in all cases, arise out of fraud.99 The fraud, however, need not be actual, but may be implied,-such as fraud which is presumed from the relation of the parties.100 The kinds of constructive trusts which may arise are as numerous as the frauds by which property may be obtained. Only the principal types of such trusts which arise in relation to realty can be mentioned. Where property which is held in trust is acquired by a purchaser who has notice of the trust,101 or by one who pays no consideration for the transfer, to transferee will hold the property subject to a constructive trust in favor of the one beneficially entitled.102 This same result obtains where the title is transferred by operation of law; for instance, when it descends to the heirs of the trustee.103 In this class of con-btructive trust no actual fraud is necessary, and in fact it might be said that a trust already existing is continued against the transferee
99 Perry, Trusts (4th Ed.) § 1G6. See Frick Co. v. Taylor, 94 Ga. 6S3, 21 S. E. 713; Farris v. Fan-is (Ky.) 29 S. W. 618; Lawson v. Hunt, 153 111. 232, 38 N. E. 629; Goldsmith v. Goldsmith, 145 N. Y. 313, 39 N. E. 1067.
100 See Fetter, Eq. p. 142; 1 Perry, Trusts (4th Ed.) § 194; Roggenkamp v. Roggenkamp, 15 C. C. A. 600, 68 Fed. 605; Cobb v. Trammell (Tex. Civ. App.) 30 S. W. 482; Haight v. Pearson, 11 Utah, 51, 39 Pac. 479. But see Brown v. Brown, 154 111. 35, 39 N. E. 983.
101 Wormley v. Wormley, 8 Wheat. 421; Oliver v. Piatt, 3 How. 333; Caldwell v. Carington's Heirs, 9 Pet. 86; James v. Cowing, 17 Hun (N. Y.) 256; Ryan v. Doyle, 31 Iowa, 53; Smith v. Walser, 49 Mo. 250; Smith v. Jeffreys, (Miss.) 16 South. 377.
102 Caldwell v. Carington's Heirs, 9 Pet. 86.
103 Randall v. Phillips, 3 Mason, 378, Fed. Cas. No. 11,555; Caines v. Grant's Lessee, 5 Bin. (Pa.) 119 of the property, rather than that a new one is created.104 Another class of cases in which constructive trusts are raised is where a trustee or other fiduciary person purchases property with trust funds, and takes the title in his own name. In such case he holds the property so purchased in trust for the one entitled to the money with which the property was purchased.105 From the principle that a trustee will not be permitted to make any profit for himself out of transactions connected with the trust property,106 if one holding a fiduciary position renews a lease to lands held by the beneficiary the renewal will operate to the benefit of the latter. These cases arise principally where leases are renewed by a partner or by a trustee.107 Whenever a man appropriates another's property, or wrongfully converts it into a changed form, the person wronged may treat the other as holding the property in trust for him. This is the case where an agent embezzles money and invests it in land. So long as the money can be traced, a trust may be established in favor of the one defrauded.108 Another class of cases where constructive trusts are raised is where the trustee acquires the trust property by a purchase at his own sale of the property,109 or by purchase or gift from the cestui que trust.110 Where a transfer of property is procured by fraud or misrepresentations, a constructive trust is said to arise ex maleficio.111 An instance of this is where a devise is pro104 Gardner v. Ogden, 22 N. Y. 327; Swinburne v. Swinburne, 28 N. Y. 568; Hubbell v. Medbury, 53 N. Y. 98; Baldwin v. Allison, 4 Minn. 25 (Gil. 11).
105 Rice t. Rice, 108 111. 199; Weaver v. Fisher, 110 111. 146; Murphy v. Murphy, 80 Iowa, 740, 45 N. W. 914; Everly v. Harrison, 167 Pa. St. 355, 31 Atl. 668; Morgan v. Fisher, 82 Va. 417; Pillars v. Mcconnell, 141 Ind. 670, 40 N. E. 689; Merket v. Smith, 33 Kan. 66, 5 Pac. 394; Thompson v. Hartline (Ala.) 16 South. 711.
106 1 perry, Trusts (4th Ed.) § 129.
107 Featherstonhaugh v. Fenwiek, 17 Ves. 298; Ex parte Grace, 1 Bos. & P. 376.
108 Foote v. Colvin, 3 Johns. (N. Y.) 216; Oliver v. Piatt, 3 How. 333; Grouch v. Lumber Co. (Miss.) 16 South. 496.
109 Sypher v. Mchenry, 18 Iowa, 232; Bush v. Sherman, 80 111. 160. Cf. Hawley v. Cramer, 4 Cow. (N. Y.) 717.
110 Berkmeyer v. Kellerman, 32 Ohio St. 239; Johnson v. Bennett, 39 Barb. (N. Y.) 237; Kern v. Chalfant, 7 Minn. 487 (Gil 393); 2 Pom. Eq. Jur. (2d Ed.) § 1053.
111 Hoge v. Hoge, 1 Watts (Pa.) 163.
Cured by a false promise to hold the property for the benefit of another person. The courts will enforce such a promise by making the devisee a trustee of the property for such person.112 So, if one purchases property upon a fraudulent verbal promise to hold it for another, he will be treated as trustee for such person, as where he claims to be purchasing for the mortgagor at a foreclosure sale.113
It is often said that a trust arises in favor of creditors where there has been a fraudulent transfer of a debtor's property; but this is a misuse of the term, because the creditors are only entitled to some of the remedies given against a trustee, and no real trust in fact exists.114 The same objection exists to treating a vendor under a contract of sale as a trustee for the vendee, or a surviving partner as a trustee of the partnership funds.