Gaylord v. Gaylord
Opinion of the Court
after stating the case: The alleged deed recites a valuable consideration paid by defendant Sam Gaylord, the grantee in the deed; contains a habendum, “to have and to hold the said tracts of land, free and clear of all privileges and appurtenances thereunto belonging, to the said Sam M. Gaylord
This doctrine of a trust or use resulting to a grantor when there was no consideration paid was a rule of the common law incident chiefly to conveyances of feoffment, and never obtained when there was a contrary declaration made by the grantor at
And Walton, the Chancellor, in Squires v. Harder, supra, said: “No resulting trust can be raised or effectuated to the express terms of a conveyance and in fav.or of a grantor. In this case the complainants have given an absolute conveyairce, with warranty; they are therefore estopped from alleging that a part of the consideration was received in their own money.”
Nor do we think it permissible upon the evidence that the plaintiffs should engraft a parol trust on a deed of the kind presented here by express declaration or agreement. The seventh section of the English Statute of. Frauds, forbidding “the creation of parol trusts or confidences of lands, tenements or heredit-aments, unless manifested and proved by some writing,” not being in force with us, and no statute of equivalent import having been enacted, these parol trusts have a recognized place in our jurisprudence and have been sanctioned and upheld in numerous and well-considered decisions. Avery v. Stewart, 136 N. C., 436; Sykes v. Boone, 132 N. C., 199; Shelton v. Shelton, 58 N. C., 292; Strong v. Glasgow, 6 N. C., 289. Upon the creation of these estates, however, our-authorities seem to havei declared or established the limitation that except in cases of fraud, mistake or undue influence, a parol trust, to arise by reason of the contract or agreement of the parties thereto, will not be set up or engrafted in favor of the grantor upon a written deed conveying to the grantee the absolute title, and giving clear indication on the face of the instrument that such 'a title was intended to pass. Dickenson v. Dickenson, supra; Bonham v.
In this last reference will be found a comprehensive and very satisfactory treatment of this question in the notes by the American editor, in which the writer refers to the North Carolina decisions as establishing the proposition stated, and, among other things pertinent to the inquiry, says: “The second head (that presented here, when the deed purports to be for a full and valuable consideration but is in fact gratuitous) is also capable of subdivision. The trust may be set up between the original parties or in favor of a third person. In the former instance the objection is twofold, under the provisions of the Statute of Frauds, and that the evidence contradicts a writing under a seal. See Porter v. Mayfield, 9 Harris, 264. The trust cannot be alleged consistently with the deed, because it is impossible to believe that the grantee gave a full and valuable consideration forthe privilege of holding the land for the use of the grantor. / A deed may be regarded in two aspects: In one it is'the means by which the title is conveyed; in the other, a memorandum of the terms and conditions of the transfer. If a man deliberately executes a sealed instrument, reciting that he has transferred the right of ownership for value received, he should not be permitted to put the grantee to the proof of that which has been established with the 'Utmost solemnity known to the law. I This is the more true because such a disguise is generally” adopted for some sinister purpose, to defraud creditors or deprive'a wife of dower. See Murphy v. Hubert, 4 Harris, 50. If there be any instance to the contrary, it is better that the grantee should suffer for his folly in putting the transaction in a form contrary to the truth than that the stability of titles should be endangered by rendering it impossible to frame a conveyance that shall be secure from attack. Leman v. Whetlet, 4 Russell, 323; Porter v. Mayfield, 9 Harris, 264, post; Hogan v. Jaques, 4 C. E. Green, 123. If it be proved that the deed
The law was so held in Bogett v. Hildreth, 103 Mass., 484, where Wells, J., used the following language in delivering judgment : “As to the share of Lucinda, conveyed by her to Sophro-nia, without consideration, and upon an agreement to reconvey or hold it for the benefit of Lucinda, no valid trust arises from that transaction. Walker v. Locke, 5 Cushing, 90. A voluntary deed is valid between the parties as a gift, and does not raise any trust in favor of the grantor. It is otherwise with a feoffment, and perhaps in other conveyances, wherever there is no declaration of the uses or the consideration is open to inquiry in determining the effect of the deed between the parties and their privies. Cruise Dig. (Greenleaf Ed.), title 11, ch. 4, p. 16, and title 32, ch. 2, p. 38. In this Commonwealth the consideration is not open to such inquiry. Supposing the deed in question to have been in the common form, the recital of a consideration and the declaration of the use to the grantee and her heirs in the habendum, are both conclusive between the parties and exclude any resulting trust to the grantor. Squire v. Harder, 1 Paige, 494; Hill on Trustees, 112; 2 Story’s Eq., p. 1197; Philbroke v. Delano, 29 Maine, 410; Farrington v. Barr, 36 N. H., 86; Graves v. Graves, 9 Foster, 129.” See Haigh v. Reye, 4 L. R., Ch. Appeals, 473.
It was held in like manner in Wilkinson v. Wilkinson, 17 N. C., 378, that the recital of a valuable consideration is conclusive on the parties and those claiming under them, unless it is shown to have been introduced by mistake or fraud. Gaston, J., said: “The plaintiffs here allege that the defendant caused this consideration of value to be untruly inserted in the deed, either without the knowledge of the grantor or by availing himself of the misconception of the grantor, that it was a necessary form to give the instrument validity. The parol evidence is admissible to support this charge; for if it be made out, then the instrument must be considered as if it had truly been what the contracting parties intended it to be. But it is admissible for this purpose only.”
Thus it will be seen that, while in North Carolina, the seventh section of the English Statute of Frauds not having been enacted here, parol trusts will be upheld in given instances in favor of third persons, as in Shelton v. Shelton, supra, or even creditors of the grantor, as in Shields v. Whitaker, 82 N. C., 516, such trusts will not be permitted or established here by reason- of cotemporaneous parol contracts and agreements between the parties when the same are in direct conflict with the expressed stipulations of the written deed and the entire purport of the instrument. In such case and to that extent the doctrine of parol trusts is subordinated to another well-recognized principle of law, that when parties have formally and explicitly expressed their entire contract, in writing, the same shall not be contradicted or changed by ccStemporaneous stipulations and agreements resting in parol. This position is well brought out and supported in the two decisions cited here: Dickenson v. Dickenson, supra, and Strong v. Glasgow, supra. In Dickenson v. Dickenson it was held: “Where an absolute deed is made, parol evidence is not admissible to prove that the deed was made under any special trust (for the grantor), and that a valuable consideration was not paid.” And, a few pages further on, in Strong v. Glasgow, a parol trust was engrafted or enforced where A. bought the property of B. at a sheriff’s sale and took a conveyance of same under agreement with B. to hold the prop-
Tbe same position is very well expressed by Green, J., in Cain v. Cox, supra: “In tbis state of facts, wbat was tbe operation of tbis deed of 1854, whereby Rezin Cain conveyed tbis tract of land to bis sisters upon a parol trust for bis own use? In Troll v. Garter, 15 W. Va., 578, tbis Court decided: ‘If land be conveyed0 by a deed of bargain and sale for a merely nominal consideration, tbe courts of equity will not receive parol evidence to prove that tbe grantee agreed to bold tbe land for tbe grantor’s use, as tbe deed in such a case must have been made for tbe express purpose of divesting tbe grantor of bis title and vesting tbe same in tbe grantee. Such parol evidence, if admitted, would defeat tbe very purpose for wbieb tbe deed was made, and must be regarded as contradicting tbe deed, and tbe general rule of evidence requires in such case the rejection of parol evidence.’ ”
And in Adams’ Equity, 28, it is said: “Tbe declaration of trust by' tbe parties is not, independently of tbe Statute of Frauds, required to be made or evidenced in any particular way. And, therefore, previously to that statute, a trust, whether of real or personal property, might be declared either by deed, by writing not under seal or by word of mouth, subject, however, to the ordinary rule of law, that if an instrument in writing existed it could not be explained or contradicted by parol evidence.”
There are decisions to tbe contrary in other jurisdictions, and no doubt like expressions in some of our own cases. Thus, in Hall v. Livingston, 3 Del. Chan., 348, tbe chancellor, in a learned and elaborate opinion, contended that a parol trust could be set up against tbe grantee in a deed absolute on its face and without any allegation in tbe bill that tbe alleged trust was omitted by fraud or mistake. In tbis case it will be noted that in tbe first instance tbe trust declared was in favor of certain creditors of tbe grantor by lien and otherwise, and tbe decision might be reconciled on tbe principle that when there has been a severance of tbe legal and equitable estate by a valid
There are also decisions to the effect that when there is a contract or agreement to hold in trust for the grantor or other parties to the deed, and in direct contravention of the written provisions the refusal to carry out the oral agreement would of itself constitute such a fraud that a trust could be engrafted in the deed ex malificio. Some of the cases so hold in England, though the Statute of Frauds, forbidding oral trusts, prevails in that country. This position, however, is clearly untenable in-those .cases where the agreement itself cannot be established by competent testimony. The better-reonsidered authorities are to the effect that there can be no actionable fraud arising from breach of an agreement, without more, when the law forbids that the agreement should be set up or established. Wills v. Robertson, 121 Iowa, 381; note to Jachson v. Cleveland, supra, 90 Amer. Dec., 266.
And we are of opinion that the doctrine as it obtains with us, and as heretofore stated, making,' as it does, for the stability of titles which rest so largely on written instruments, and well supported by authority, should prevail, and, applied to the facts presented here, would forbid, that a trust should be declared or established in plaintiffs’ favor in case the deed from Eben-ezer to Sam Gaylord had been fully executed. "While we hold the opinion as indicated, and have expressed the views of the Court thereon at some length, because of the importance of the question, and of the suggestions that the claim of plaintiffs could in any event be sustained under the doctrine of parol trusts, we do not approve the ruling of the trial judge in dismissing the case as on judgment of nonsuit; for on the allegations and evidence we are further of opinion that an issue is presented as to whether the deed from Ebenezer to Sam Gaylord was. in fact ever delivered. It is a familiar principle that the question of the delivery of a deed or other written instrument is very largely dependent on the intent of the parties at the time and is not at all conclusively established by the manual or physical passing of the deed from the grantor to the grantee. As said by this Court
Tbe views we have expressed will be found to accord with well-considered decisions in tbis and other jurisdictions; notably, Fortune v. Hunt, 149 N. C., 358; Tarlton v. Griggs, 131 N. C., 216; Roe v. Lovick, 43 N. C., 88; Wilson v. Wilson, 158 Ill., 567; Porter v. Woodhouse, 59 Conn., 568. In Tarlton v. Griggs, supra, Cook, J., delivering tbe opinion of tbe Court,
And in Porter v. Woodhouse, supra, Andrews, C. J., said: “Tbe delivery of a deed implies a parting witb the possession and a surrender of authority over it by tbe grantor at tbe time, either absolutely or conditionally; absolutely, if tbe effect of tbe deed is to be immediate and tbe title to pass or tbe estate of tbe grantee to commence at once; but conditionally, if tbe operation of tbe deed is to be postponed or made dependent on tbe happening of some subsequent event. A conditional delivery is and can only be made by placing the deed in tbe bands of a third person, to be kept by him until tbe happening of tbe event upon tbe happening of which tbe deed is to be delivered over by tbe third person to tbe grantee. But it is an essential characteristic and an indispensable feature of its delivery, whether absolute or conditional, tbat there must be a parting witb tbe possession of tbe deed and witb all power and control over it by tbe grantor for tbe benefit of tbe grantee at the time of delivery. Prestman v. Baker, 30 Wis., 644. Tbe delivery of a deed is as essential to tbe passing of tbe title to tbe land described in it as is tbe signing of it or tbe acknowledgment. It is tbe final act, without which all other formalities are ineffectual. To constitute a delivery tbe grantor-must part witb tbe legal pos
Nor is the objection available that there is evidence tending to show that it was the purpose and motive of Ebenezer in this transaction to put his property in such a position that his then wife could not successfully establish a claim upon the property in case of expected litigation between them. It is an undoubted principle that a court will not lend itself to establish a right growing out of a fraudulent transaction, a wholesome principle that has found expression in the maxim, ex malificio non oritur contractus; but this principle only applies when it becomes necessary to invoke the aid of the court to establish or assert the right arising by reason of such a transaction, and does not obtain when the right otherwise exists. See York v. Merritt, 80 N. C.,285. If there was no delivery of the deed in question, the title never passed from Ebenezer, and the plaintiffs, his children, whether as devisees or heirs at law, can assert their claim by reason of the title that was originally his. It may be well to note that while the testimony touching the transaction could not have been admitted to establish a' right or claim, as stated, when otherwise relevant it may still be received on the question of delivery.
From what has been said, it follows that the order of nonsuit will be set aside, and the 'cause will be submitted to the jury on some determinative issue involving the question as to whether the deed under which defendant claims was turned over to him with intent that the title should pass, or was the same to be held by defendant as a depository and subject to the control and call of Ebenezer, the grantor.
Reversed.
Concurring Opinion
concurring: I concur in the decision of this case and the reasons upon which it is based. I think no other question is presented for decision, and that what is said in regard to the validity of the alleged parol trust is obiter. The question was not passed upon by the judge nor argued' in this Court. "Whether such a trust,' upon the evidence taken as true, can be declared by parol and enforced by the court is not free from doubt. I therefore think that we should not decide it and fore
1. “At common law it was not necessary that a trust should be declared in any particular way; the• declaration could be made by deed or by mere word of mouth. In either case, if the trust could be proved, the chancellor would enforce its execution.
2. “In England, by the seventh section of the Statute of Frauds (29 Car. II), all declarations of trust are required to be ‘manifested and proved’ by some writing, signed by the party, etc.
3. “In this State there is no statute which requires the declaration of a trust to be in writing, and the matter stands as at common law. . '
4. “That the statute of 1819 [Revisal, sec. 976] does not include the declaration of a trust; it is not ‘a contract to sell or convey land.’ [Oases cited in Pell’s Revisal, 976.]
5. “That the rule which excludes parol evidence for the purpose of ‘explaining, altering or adding to a written instrument’ has no application,” because, as said by Pearson, C. J., “the declaration of a trust neither contradicts, explains nor adds to the deed.” Replying to the suggestion to the contrary, he says: “If this position be true, the English statute, in respect to the declaration of trusts, was uncalled for, and the doctrine of verbal declaration of trusts would not have obtained at common law. The truth is, neither the declaration nor the implication of a trust has ever been considered as affected by that rule of evidence. The deed has its full force and effect in passing the absolute title at law, and is not altered, added to or explained by the trust, which is an incident attached to it in equity as affecting the conscience of the party who holds the legal title.”
The language used by the learned Chief Justice has been cited in aUarge number of casés with approval.. Riggs v. Swann, 59 N. C., 118, in which he says: “The objection that the declaration of trust was not in writing, and .was therefore void, is not tenable. There is in this State no statute which requires the declaration of a trust, made at the time the legal, title passes
I am unable to see bow tbe warranty in tbe deed, which is a personal covenant of quiet enjoyment, for tbe breach of which no damage could be recovered, as no purchase money was paid, can estop tbe plaintiffs. Tbe declaration of trust is not inconsistent with or contradictory of any recital or assertion in the deed, which has full operation at law. Decisions of other courts, wherein tbe seventh section of tbe Statute of Frauds has been enacted, are not helpful to us. It will be noted that many of those cited in tbe opinion are discussions of implied or resulting trusts, because no consideration was paid. It is conceded that, by an express provision (eighth section).of tbe statute, implied and resulting trusts are excepted. Tbe effort to bring cases where no consideration is paid by tbe grantee within the saving provisions of that section has given rise to much discussion. Tbe plaintiffs’ case is not affected by it. They rely upon an express trust, affected by tbe seventh section. As said by Judge
Without further discussing the subject, I am of the opinion that a question of so much importance, and concededly not free from difficulty, should not be decided until it is fairly presented as the decisive question in the case. I have no disposition to extend the doctrine of parol trusts, as held by our predecessors. I think that the opinion restricts it in narrower limits than has heretofore been done, and prefer to leave the question as I find it until, after full argument and mature reflection, it becomes our duty to decide it. I have not overlooked the decision in Bonham v. Graig, 80 N. C., 224, and several other cases, which appear to conflict with Shelton’s case. It would seem that the Court regarded the parol agreement in those cases as attempts to attach a condition rather than declare a trust. The distinction is clearly pointed out in Shelton v. Shelton. I do not care to discuss the question of the purpose for which the deed was made, as affecting.the validity of the trust, or, rather, the right of the plaintiffs to come into a court of conscience.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.