McIlwain v. Doby
McIlwain v. Doby
Opinion of the Court
The record shows that on or about May 4, 1943, a forfeited tax land patent was issued by the state to Lee Beard conveying to the grantee therein named the lands described as the E% of the NEVt, and the NEVt of the SE%, and the SEVL of the NW% of Section 7, Township 9 North, Range 6 West, in Wayne County; that on February 10, 1948, Lee Beard conveyed to L. Barrett Jones and Ben Stevens, jointly, a one-half full participating mineral interest in the above described lands; that, on or about July 10, 1954, a forfeited tax patent was issued by the state to Mrs. Viola McRae Beard conveying to her the tract of land described as the W% of the SW% of said Section 7, Township 9 North, Range 6 West; and that on July 8, 1954, Mrs. Viola McRae Beard conveyed to Ben Stevens an undivided one-half mineral interest in said 80-acre tract. The record also shows that on May 1, 1955, Ben Stevens executed a deed of trust on an undivided one-fourth mineral interest in and to the above described lands to W. O. Carter, Jr., Trustee for Bancroft-Whitney Company; that the said deed of trust was foreclosed on March 27, 1956, by a trustee’s sale of said undivided one-fourth mineral interest; that sale was duly made at public outcry, at the front door of the county courthouse; and that at said sale F. H. Mcllwain appeared and bid on and purchased said mineral interest for
The record shows that Lee Beard, the owner of the surface interest in the lands described in the forfeited tax land patent issued on or about May 4,1943, died sometime during the year 1953; and that he left surviving him as his only heirs at law his widow, Mrs. Viola McRae Beard, and twelve children and one grandchild, Bonnie Jean Fleming, only child of a deceased daughter of the said Lee Beard; that Mrs. Viola McRae Beard, the widow of the said Lee Beard, deceased, died sometime during the month of November 1957, leaving as her only heirs at law the above mentioned children and grandchild, all of whom are named as complainants in the bill of complaint filed in this cause, except the defendant, Mrs. Opal Beard Mcllwain, who is named as a defendant. The record also shows that oil was discovered on the above mentioned lands about a year and a half after the appellants ’ purchase of the above mentioned mineral interest; and that on March 25, 1958, F. H. Mcllwain and his wife, Mrs. Opal Beard Mcllwain, executed a royalty deed conveying to Nolan Clark a 1/160 mineral interest in and to the property described as the SE^ of the NE/4, and the NE% of the SE1^ of said Section 7, Township 9 North, Range 6 West.
The bill of complaint in this cause was filed by Mrs. Olga Beard Doby, Roland Gr. Beard, Lee A. Beard, Jr., James Calvin Beard, Frances Beard Lee, Mary Beard Covington, Leola Beard Hester, Bonnie Jean Fleming, Beatrice Beard Whitney, Florence Beard Stanley, Andrew McRae Beard and Carolyn Beard Mcllwain, on June 4, 1958.
The complainants prayed that on the final hearing of said cause the defendants be declared to be trustees of the legal title to said mineral interest, and hold the same in trust for the complainants, and that the defendants be ordered to execute and deliver to the complainants, upon payment to them by the complainants of such sum as the court might find to be just and equitable, a deed to said mineral interest.
The defendants in their answer denied the material allegations of the bill of complaint relating to any alleged agreement that the said P. H. Mcllwain should attend the foreclosure sale and purchase the mineral interest in behalf of and for the benefit of the complainants
Several witnesses testified during the hearing before the chancellor. Mrs. Olga Beard Doby, Mrs. Carolyn Beard Allen, Mrs. Ella Hutto and Pete Lee were the main witnesses who testified for the complainants.
Mrs. Olga Beard Doby testified that about a week before the trustee’s sale, while she was in F. H. Mcllwain’s cafe with her sister, Mrs. Carolyn Beard Allen, and Mrs. Hutto, Mcllwain told her that the minerals were “coming up for sale” and asked her if she knew about it, and she said, “Well, I hadn’t heard about it, I guess I better go over there and bid on them and buy them in.” Mcllwain then said to her, “No, don’t go over there and run them up on me, * * * I am going to buy them in and let each one have yours back, but you will have to pay me some interest on the money because I have got to borrow the money.” Mrs. Doby further stated that four or five
Pete Lee testified that he was married to Mrs. Prances Beard Lee, and that he had made plans to bid on the Ben Stevens mineral interest when it was sold. He had planned to put up his personal property and borrow some money from the bank, and bid on the mineral interest for the benefit of the Lee Beard children. He did not bid on the mineral interest, however, for the reason that, on Sunday afternoon before the sale, while he was in McIlwain’s cafe he told McIlwain that he had planned to bid on the mineral interest, and McIlwain said to him, “Don’t go over there and bid against me, I am planning on bidding on it and letting each child have their pro rata share.” Lee stated that he had no further conversation with McIlwain or his wife about the mineral interest until Thanksgiving Day in 1957, when he and some of the other heirs went to McIlwain’s house with an attorney
The defendant, F. H. Mcllwain, testified that he talked to Mrs. Doby while she was in his cafe a few days prior to the trustee’s sale of the minerals; hut he denied specifically that he had any such conversation with Mrs. Doby as that testified to by her, Mrs. Allen and Mrs. Hutto. Mcllwain stated that he told Mrs. Doby that the minerals were to he sold, and that he had been out to see Mrs. Beard to see if she wanted to go fifty-fifty with him and buy the mineral interest, but Mrs. Beard would not agree to do that. He then asked Mrs. Doby whether she would he willing to go in with him on a fifty-fifty basis, and Mrs. Doby said that she was not going to have anything to do with it. Mcllwain stated that he had no further conversation with Mrs. Doby about the matter before the sale. Mcllwain stated that he told Mrs. Beard and Mrs. Mary Lynn Beard Covington on the day that the minerals were sold that, if they wanted to hid on the mineral interest, he would not hid at all. He stated that a week or ten days after the sale he told Mrs. Doby that if the Lee Beard heirs wanted a part of the mineral interest he would let them have it at just exactly what he had paid for it, provided each of the heirs paid him $20 in addition to the purchase price, and that he would give them thirty days to arrange for the purchase and pay him the money, and that if she were interested she should go ahead and get up the money and bring it to him. He stated that Mrs. Doby came back three or four days later and told him that he might as well forget about it, that everyone that she had seen didn’t have the money. He saw Boland Beard later and told him about the proposition that he had made to Mrs. Doby. Boland Beard told
The chancellor stated in his opinion that “The sole question in this lawsuit so far as this court is concerned is, did Mr. F. H. Mcllwain, by his acts and his words, do anything or say anything that would lead the complainants or some of them to believe that he was going to buy the minerals in at the sale and that he was going to buy them in for the interest of all of the heirs.” The chancellor found that the defendant Mcllwain made the representation that he would purchase the mineral interest at the foreclosure sale in behalf of and for the benefit of each of the complainants; that the complainants relied on said representation and were misled thereby and refrained from bidding at the sale; and that the complainants were entitled to the relief prayed for in their bill of complaint.
The appellants’ attorneys argue four points as grounds for reversal of the decree of the lower court. The first point argued is that the court erred in holding that the alleged trust which arose from the representations of F. H. Mcllwain was enforceable and not within
We think that the court erred in holding that the alleged trust which arose as a result of the representations of F. H. McIlwain was enforceable and not within the statute of frauds.
Section 269, Mississippi Code of 1942, Recompiled, provides as follows:
“Hereafter all declarations or creations of trusts or confidence of or in any land shall be made and manifested by writing, signed by the party who declares or creates such trust, or by his last will, in writing, or else they shall be utterly void; * * * but where any trust shall arise or result by implication of law, out of a conveyance of land, such trust or confidence shall be of the like force and effect the same as it would have been if this statute had not been passed.”
The textwriter in Pomeroy’s Equity Jurisprudence, Yol. 4, Fifth Edition, Constructive Trusts, paragraphs 1056, 1056a, after discussing the conditions under which trusts ex maleficio may arise, says:
“Par. 1056. (3) No Trust from a Mere Yerbal Promise. — The foregoing cases should be carefully distinguished from those in which there is a mere verbal promise to purchase and convey land. In order that the doctrine of trusts ex maleficio with respect to land may be enforced under any circumstances, there must be something more than a mere verbal promise, however unequivocal, otherwise the statute of frauds would be virtually abrogated; there must be an element of positive fraud accompanying the promise, and by means of which the acquisition of the legal title is wrongfully consummated. Equity does not pretend to enforce verbal promises in the face of the statute; it endeavors to prevent and punish fraud, by taking from the wrong*853 doer the fruits of his deceit, and it accomplishes this object by its beneficial and far-reaching doctrine of constructive trusts. (By weight of authority failure or refusal to perform a parol promise to hold in trust or convey is not sufficient basis for a constructive trust.) * * *.
“Par. 1056a. — Effect of Confidential Relation. ■ — A recognized exception to the general rule that a constructive trust will not arise from the violation of a mere verbal promise to purchase and convey, or to hold in trust, prevails where a confidential relationship exists between the grantor and the grantee. Thus constructive trusts have been imposed where the relation between the parties was that of principal and agent, attorney and client, husband and wife, parent and child, grandparent and grandchild, and the like in respect of transactions where the promisor was the dominant party. The rule is not applied from the mere showing of relationships such as brother and sister, and employer and employee (See Sec. 963).”
In 54 Am. Jur., 182, Trusts, par. 241, the textwriter says: “An oral agreement to bid in real property at a public, judicial, tax, or similar sale for another who is not the owner and who has no existing interest in the property sold is not only void and unenforceable as an express trust under the statute of frauds, but it is not enforceable as a constructive trust, in the absence of fraud, agency, confidence, or circumstances giving rise to an estoppel. * * *.”
In the case of Miazza v. Yerger, 53 Miss. 135, the complainant alleged in her bill of complaint against Yerger and Helm, that Yerger undertook, promised and agreed, as her agent and attorney, to attend a sale of real estate under a trust deed, and bid in one-half of the property for the complainant, who had made arrangements to obtain from Helm the money to pay for such interest; and that Yerger, instead of doing as he promised, bought the property for himself and had title made to himself in
“Again, it is announced, in an equally authoritative manner and with decided emphasis, that no trust in land can be set up by mere parol agreement, that no trust results from the breach of a mere parol contract, and that parol proof cannot he received to establish a resulting trust in lands purchased by an agent, and paid for by his own funds, no money of the principal being used for the payment; for the relation of principal and agent depends upon the agreement existing between them and the trust in such a case must arise from the agreement and not from the transaction, and where a trust arises from an agreement, it is within the statute of frauds and must be in writing. Perry on Trusts, par. 134,135. ’ ’
The principle stated in that case has been reaffirmed many times in the later decisions of this Court. Robinson v. Leflore, 59 Miss. 148; Ragsdale v. Ragsdale, 68 Miss. 92, 8 So. 315; Bush v. Bush, 134 Miss. 523, 99 So. 151; Wilson v. Martin, 204 Miss. 196, 37 So. 2d 254, 37 So. 2d 775.
In the case of Dunphy v. Ryan (1886), 116 U. S. 491, 6 S. Ct. 486, 29 L. Ed. 703, the Court held that an agreement, on the part of A to acquire title in his own name to a tract of land upon the best terms possible, and when acquired to convey to B an undivided part thereof, and on the part of B to pay A his proportionate part of the purchase money and expenses incurred in obtaining title, was a contract for the sale of lands within the statute of frauds; and the contract being verbal and not in writing as required by the statute, A, after performing his part of the agreement, could not recover from B his share of the price and expenses in an action at law founded upon
Prom the authorities cited above, it clearly appears that, ordinarily, oral agreements to join in the purchase of land do not give one party any enforceable right to claim the benefit of the purchase by the other; that viewed as agreements to transfer an interest in the land to be acquired, they are clearly within the statute of frauds; and that such agreements cannot be given effect as a promise to hold for the benefit of another, save in those jurisdictions where express trusts need not be evidenced by writing. The mere breach of the agreement that the complainant may share in the benefit of the purchase is not fraud in obtaining the title, and so will not give rise to a constructive trust. See Annotation 42 A. L. R., 10, 63, and cases cited.
The charge alleged in the bill of complaint in this cause against the defendant McIlwain is that he agreed that he would attend the foreclosure sale and purchase said mineral interest in behalf of and for the benefit of the complainants and the defendant Opal Beard Me
As stated by the North Carolina Court in Avery v. Stewart, 136 N. C. 426, 48 S. E. 775, “The mere nonperformance of a beneficial parol agreement is not such fraud or bad faith as will induce a court of equity to compel performance.” There must be a salutary and proper limitation of the doctrine of parol trusts, and it will be found, we think, in confining the equity to enforce trusts arising out of parol agreements to transactions involving some element of fraud or bad faith apart from the mere breach of the agreement itself, which makes it inequitable that the vendee should hold the legal title absolutely or discharged of any trust.
The appellees say that there were present in this transaction equitable circumstances which distinguished the case from Miazza v. Yerger, supra, and other cases in which the court has applied the principle laid down in Miazza v. Yerger; and the appellees cite in support of their contention that a constructive trust was created the cases of Robinson v. Leflore, 59 Miss. 148; Risk v. Rishes, 197 Miss. 155, 19 So. 2d 484; Sample v. Romine, 193 Miss. 706, 8 So. 2d 257, 10 So. 2d 346; Pitchford v. Howard, 208 Miss. 567, 45 So. 2d 142; Triplett v. Bridgforth, 205 Miss. 328, 38 So. 2d 756. But the facts in each of those cases are clearly distinguishable from the facts in this case. In Robinson v. Leflore, supra, the record showed that Mrs. Leflore made arrangements with Robinson to borrow the money to enable her to purchase the lands at the foreclosure sale under a mortgage. She and Robinson attended the sale together, and when the sale took place Robinson bid the amount due on the trust deed, proclaiming to the persons present that he was
In Risk v. Risher, supra, the relation of lessee and sublessee existed between the parties and the court held that the relation was a fiduciary relation. In Sample v. Romine, supra, the relationship of the parties was that of joint adventurers, and that relationship had existed prior to the procurement of the leases involved in the controversy. In Pitchford v. Howard, supra, the bill charged that Mrs. Pitchford had employed Howard prior to his taking title to the land in controversy to arrange a loan and had agreed to pay Howard $100 for his services; that Mrs. Pitchford owned the property and was defrauded thereof by the active solicitation of Howard after Howard had been paid to protect her interest. In Triplett v. Bridgforth, the complainants owned an interest in the land which was sold under the mortgage deed of trust.
In the case that we have here neither the appellants nor the appellees owned any interest in the one-fourth mineral interest which was being offered for sale by the trustee on March 27, 1956. McIlwain was not employed as an agent to act for the complainants in bidding on or purchasing said mineral interest. None of the complainants furnished any of the money to pay for the minerals. No fiduciary relation existed between Mcllwain and the complainants or any of them. None of the complainants testified that Mcllwain ever transacted any business for them, or that they confided in or advised with him regarding their business affairs. This Court has held in several cases that of presumption of fraud does not arise because a blood relationship accompanied by affection between the parties; and the relationship between brother and sister is not intrinsically one of confidence.
We think that the chancellor was manifestly wrong in holding that a constructive trust had been created as a result of the refusal of the appellants to convey to each of the appellees a pro rata share of the minerals purchased by them at the trustee’s sale.
For the reasons stated above the decree of the lower court will be reversed, and a decree will be entered here dismissing with prejudice the appellees’ bill of complaint.
Reversed and judgment rendered for appellants.
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