Norton v. Mallory

Prior to the Revised Statutes, no doubt can exist that the arrangement between Russell and his mother would have created a valid trust. “ The most simple form in which an implied trust can be presented is that of property delivered by one person to another, to be by the latter delivered over to or for the benefit of a third person.” 2 Story’s Eq. Jur., § 1196. “ If there be either a good or valuable consideration, equity will raise a use or trust corresponding to such consideration.” Id., § 1197. See, also, id., § 1210. Such trusts are treated as implied or created by operation of law, and are not affected by the provisions of the Revised Statutes. 2 R. S. 728, §§ 50, 51, 52 and 53. The case under consideration is not a resulting trust in favor of creditors, under section 52, because the plaintiff is not a creditor of the person paying the money. She paid the consideration to Russell, who, by her death, took the title to the land in question under a contract by which he held the legal title in trust for and subject to the equitable title of his son. By the 50th section, trusts arising or resulting by implication of law are not abolished. The trust in this case is of that character, and is valid.

The evidence justified the court below in finding the existence of the agreement under which the trust arises. The agreement and payment of the consideration being so found, upon sufficient evidence, the consequences are inevitable. It would be inequitable and unjust that Russell should have the consideration derived from the sale of his mother’s lands for the payment of his debts, and that his creditors should still be at liberty to take the property in dispute devoted by the mother to an entirely different purpose. The creditor would thus have a double fund out of which to secure his debt. The second fund would be one not justly applicable to the payment of the debt or equitably belonging to the debtor, but in fairness and good conscience, belonging to Fred. E. under the agreement. Fred. E. was and is an infant of such tender years as to be incapable of understanding or assenting to the arrangement between *643his father and grandmother. But as the agreement was beneficial to him, the court will presume his assent and acceptance of the property under the deed. This case is stronger for the beneficiary than that of Sieman v. Austin, 33 Barb. 9, affirmed in Siemon v. Schurck, 29 N. Y. 598, where the creditor’s judgment was recovered and became a lien upon the trust property before the conveyance of the trustee to the cestui que trust. In other respects it is very similar. In that case it was held that the Revised Statutes relating to uses and trusts were inapplicable, and that the common law governed the rights of the parties. The same view is taken in 4 Kent’s Com. 307. “ If a trust be created for the benefit of a third person without his knowledge, he may, when he has notice of it, affirm the trust and call upon the court to enforce the performance of it.” It is also held in Súman v. Austin, supra, that the prohibition of section 51 of a trust resulting to the person paying the consideration does not apply to a resulting trust for the benefit of a third person. Such conclusions must be still more clear when such person as in this case was not of an age to know of or assent to the act by which the title vests in the trustee. The authorities are quite conclusive that a trust of the character claimed in this case may be created, and that when created, the equities of the cestui que trust are superior to those of any creditor of the trustee, except perhaps an incumbrancer who has parted with his money upon the security of the property without notice of prior equities.

It is claimed by the appellant that a trust cannot be created by parol. The 2 R. S. 135, § 6, prohibits the creation of trusts except by act or operation of law or by writing,'etc. The next section (7th) provides that the 6th section shall not be construed “ to prevent any trust from arising by implication or operation of law.” Such trust may be proved by parol, provided they flow from acts, relations, situations and conditions of the parties, impressing property with trust character, and imposing upon the party holding property, the obligations of a trustee toward the beneficiary. Foote v. Bryant, 47 N. Y. 544; Perry on Trusts, § 137.

Conceding the findings of the court below to be right (and there is no evidence from which a doubt can arise), the case was properly disposed of. 1'he suggestions of danger from such secret trusts, and from perjury, in establishing them, are pertinent and forcible, but are properly addressed to the court of original jurisdiction. Having produced conviction there, and being in no respect incredible, *644impossible or contradicted, this court would not be justified in disregarding or disbelieving such evidence.

I am inclined to the belief that Davis’ testimony was admissible upon the question of Russell’s good faith in making the deed to his son. But, if it were not, there is abundant and uncontradicted evidence without it, to sustain the conclusions of the court below. In equity cases, errors in the reception of evidence will not be regarded when it is apparent they could not have affected the result. Foote v. Bryant, 47 N. Y. 544, 551; Rundle v. Allison, 34 id. 180, 184; Ashley v. Marshall, 29 id. 494, 502.

If these views are correct, the judgment should be affirmed, with costs.

Judgment affirmed.