A trust may result to him who pays the consideration for real
estate where the title is taken out in the name of another, which
is not within the statute of frauds, and it may be shown, by parol
testimony, whose money was actually paid for it; but such trust
must have arisen at the time the purchase was made, and the whole
consideration must have been paid or secured at the time of or
prior to the purchase, and a bill in equity to enforce it must show
without ambiguity or equivocation that the whole of the
consideration appropriate to that share of the land which the
plaintiff claims by virtue of such payment, was paid before the
deed was taken.
Two parties had located and claimed a lode. Plaintiffs were
preparing to contest defendant's application for a patent when it
was agreed orally that they should relinquish to him such
possession as they had, in consideration of his agreeing to
purchase the land upon their joint account.
Page 138 U. S. 588
He took out a patent and worked the lode. In an action to have
him decreed to hold one-half as trustee for the plaintiffs,
held that such taking possession was not part performance
of the contract so as to take it out of the statute of frauds.
This was an appeal from a decree of the Supreme Court of the
Territory of Montana sustaining a demurrer to a complaint
originally filed in the Second Judicial District of such territory.
The complaint set forth, in substance, that the plaintiffs, on
September 18, 1878, "became possessed of and owned" certain
premises upon which they had discovered a vein or lode of valuable
quartz. That they "duly located" such lode "as a mining claim"
under the laws of the United States, "and posted a notice of such
location," and established, by posts and corners, boundaries
thereto, designating it as the "Figi" lode, and further claimed to
have possessed and owned said premises up to the 15th of March,
1881, when the defendant was about to procure a patent to himself
for the same premises "under a pretended location and claim
designated by him as the
Odin' lode." The plaintiffs apprised
the defendant of their claim, and notified him that they "would
adverse and contest" his application for a patent. Thereupon they
"entered into a mutual and verbal agreement" by which it was
understood that in consideration of the plaintiffs' "promising and
agreeing to relinquish and give up the possession of such premises"
to the defendant, and to abstain from filing any adverse claim or
protest against defendant's application for a patent, and to permit
him to proceed and procure a patent, the defendant that he would be
tenant in common of the plaintiffs in an undivided half of the
premises; that plaintiffs and defendant should purchase the
premises jointly, but in defendant's name, defendant acting as
"purchasing agent and as trustee of the plaintiffs," and that after
the issuance of a patent, defendant would execute and deliver to
plaintiffs a deed of an undivided half of the premises. That,
relying on defendant's honesty, the plaintiffs relinquished and
delivered up possession to the defendant withdrew all objections to
defendant's claim, and permitted him to procure a patent, and "from
time to time thereafter" paid him their
Page 138 U. S.
589
share of the purchase money of the premises. And that a
patent was subsequently issued to defendant in pursuance of such
agreement, but he refused, and still refuses, to convey their share
to the plaintiffs.
The prayer was as follows: first that defendant be declared to
hold the legal title to an undivided half of said premises as
trustee for the plaintiffs; second that he be directed to execute a
deed of such undivided half to plaintiffs; third that he be
required to account to them for the rents, issues, and profits
accrued from such undivided half. Defendant demurred upon the
ground first that the complaint set forth a contract within the
statute of frauds, that no part performance was averred, and that
mere delivery of possession to another does not pass title, and
cannot be given in evidence as affecting the transfer of real
estate; second that the complaint is ambiguous, uncertain, and
unintelligible, in that it does not show how much or at what times
plaintiffs were to pay to defendant any money, nor what amount of
money they are willing to pay, and they make no tender. The
demurrer was sustained, an appeal was taken to the supreme court of
the territory, and the judgment of the court below affirmed.
Plaintiffs thereupon appealed from such affirmance to this
Court.
Page 138 U. S. 591
MR. JUSTICE BROWN, after stating the facts as above, delivered
the opinion of the court.
By Rev.Stat. § 2319, all valuable mineral deposits in lands
belonging to the United States are declared to be free and open to
exploration and purchase "by citizens of the United States, and
those who have declared their intention to become such, under
regulations prescribed by law." By § 2324, the miners of each
mining district may make regulations not in conflict with the laws
of the United States or of the state or territory governing the
location, manner of recording, and amount of work necessary to hold
possession of a mining claim, subject to the requirement, among
others, that
"upon each claim located after May 10, 1872, and until a patent
has been issued therefor, not less than one hundred dollars' worth
of labor shall be performed or improvements made during each
year."
By § 2325, a patent for any land so claimed and located may be
obtained by filing in the proper land office an application showing
compliance with the terms of the act, together with the plat and
field notes, showing the boundaries of the claim, which shall be
distinctly marked by monuments, and by posting a copy of such plat,
with the notice of such application for a patent, in a conspicuous
place on the land, etc. Section 2326 provides also for proceedings
upon filing adverse claims, declaring that it shall be the duty of
the adverse claimant, within thirty days after filing his claim, to
commence proceedings in a court of competent jurisdiction to
determine the question of the right of possession, and prosecute
the same with reasonable diligence to final judgment.
The sole question in this case is whether the contract between
these parties is not within the statute of frauds. Section 217 of
the Compiled Statutes of Montana declares that
"No estate or interest in lands . . . shall hereafter be
created, granted, assigned, surrendered, or declared unless by act
or operation of law or by deed or conveyance in writing,"
etc. To take the case out of the operation of the statute,
Page 138 U. S. 592
plaintiffs claim first that the transaction constitutes a trust
by operation of law, and is therefore within the express exception
of § 217; second that there was such part performance, by taking
possession under the contract, as takes it out of the statute.
1. While there is no doubt of the general proposition that a
trust results to him who pays the consideration for an estate where
the title is taken in the name of another; that such trust is not
within the statute, and that parol evidence is admissible to show
whose money is actually paid for the property, it is equally clear
that the trust must have arisen at the time the purchase was made,
and that the whole consideration must have been paid or secured at
the time of or prior to such purchase.
Olcott v.
Bynum, 17 Wall. 44;
White v. Carpenter, 2
Paige 217, 241;
Buck v. Swazey, 35 Me. 41; 1 Perry on
Trusts § 133; 2 Pomeroy Eq.Jur. § 1037. But, as before stated,
parol evidence is competent to prove that the consideration
actually moved from the
cestui que trust. Boyd v.
McLean, 1 Johns.Ch. 582;
Baker v. Vining, 30 Me. 121;
Whitmore v. Learned, 70 Me. 276;
Page v. Page, 8
N.H. 187, 195; 2 Pomeroy Eq.Jur. § 1040. It follows that the bill
or complaint should show without ambiguity or equivocation that the
whole of the consideration appropriate to that share of the land
which the plaintiffs claim by virtue of such payment was paid
before the deed was taken. Tested by these rules, we think the
plaintiffs have failed to make out their case with that clearness
which the law demands. They aver that, after they had delivered up
possession of the premises to the defendant,
"they withdrew all objections, protest, and adverse claims to or
against the defendant's claim and abstained from filing any adverse
claim or protest in the United States land office against
defendant's application, and thereby permitted and enabled the
defendant to procure a patent for said premises, and
from time
to time thereafter paid to defendant their share of the
purchase money of said premises, and that
thereafter,
to-wit, on or about the 15th day of May, 1881, the defendant, in
pursuance of said agreement and of said trust, purchased from
the
Page 138 U. S. 593
United States of America, for the use and benefit of the
plaintiffs, an undivided half of said premises,"
etc. And they further aver in a subsequent allegation that
"if there be, or if defendant claims that there is, anything or
any amount due by plaintiffs in connection with the procuring of
said patent, or with said agreement, the plaintiffs are ready and
willing and fully able to pay the same, and offer to do so; that
the defendant has refused to inform plaintiffs whether there was,
or whether he claimed that there was, any money or thing due from
the plaintiffs, although requested to do so, and that plaintiffs
had many times offered to pay defendant whatever he might claim
that there was due in said connection, and that defendant has
refused, and that, on account of said refusals of defendant,
plaintiffs are not informed in relation to said matter."
Not only is there a failure to aver when and how much money was
paid before the purchase was made, but the first allegation above
quoted leaves a doubt whether the payment was made before or after
the patent was taken. In one place they say that they thereby
permitted and enabled the defendant to procure a patent for said
premises, and
from time to time thereafter paid the
defendant, and immediately follow it by an averment that
thereafter, to-wit on or about the 15th day of May, the
defendant made the purchase. The subsequent allegation throws
additional doubt upon the question, and in fact is susceptible of
the implication that plaintiffs were by no means confident that
they had paid any considerable amount, but were willing to pay
their share upon being informed of the amount still due.
We think the contention of the plaintiffs that a trust is made
out by operation of law is not sustained. The allegations amount to
nothing more than that they made certain advances of money to
defendant for the purchase of this interest; but when, or in what
form, or at what time such advances were made is left entirely
unanswered. As plaintiffs have chosen to stand upon their complaint
without apparently asking leave to amend, which we cannot doubt
would have been readily granted, we are constrained to hold the
allegations insufficient to create a trust.
Page 138 U. S. 594
2. Was there a part performance of the parol contract with the
defendant sufficient to take the case out of the statute? The only
act alleged in that connection is the surrender of possession to
the defendant, or, in the language of the complaint, that,
"relying upon the good faith and honesty of the defendant,
plaintiffs thereupon relinquished and delivered their possession of
said premises to the defendant, and that the defendant then and
there was admitted and went into possession of the same, in
compliance with and under said agreement and said trust."
This, however, must be taken in connection with the prior
allegation that the "defendant was about to proceed to procure a
patent" to himself for the same premises, "under a pretended
location and claim designated by him as the
Odin' lode,"
whereupon plaintiffs apprised him that they "claimed, owned, and
possessed said premises," and would adverse and contest his
application. Now, conceding that the surrender of possession to the
defendant is a sufficient performance to take a case out of the
statute, such surrender must be made in pursuance of the contract,
and be referable to it. In short, it must be a new possession under
the contract, and not merely the continuance of a former possession
claimed under a different right or title. Pomeroy on Contracts
secs. 116, 123; Morphett v. Jones, 1 Swans. 172; Wills
v. Stradling, 3 Vesey Jr. 378; Anderson v. Chick, 1
Bailey's Eq. 118; Smith v. Smith, 1 Rich.Eq. 130;
Jacobs v. Peterborough & Shirley Railroad Co., 8 Cush.
223; Jones v. Peterman, 3 S. & R. 543; Christy v.
Barnhart, 14 Penn.St. 260; Johnston v. Glancey, 4
Blackford 94. As stated by Mr. Justice Grier in Purcell v.
Miner, 4 Wall. 513, 71 U. S. 518,
delivery of possession "will not be satisfied by proof of a
scrambling and litigious possession."
Taking the averments of the complaint together, it appears that
both these parties had located and claimed this lode, and that
plaintiffs were preparing to adverse and contest defendant's
application for a patent, when a bargain was made between them by
which it was agreed that plaintiffs should relinquish such
possession as they had to defendant in consideration of the
latter's agreeing to purchase the land upon
Page 138 U. S. 595
their joint account. In
Clinan v. Cooke, 1 Sch. &
Lef. 41, Lord Redesdale indicated, as a test, whether the party let
into possession could have been treated as a trespasser in the
absence of the parol agreement, and this has been accepted by many
writers upon equity jurisprudence as a most satisfactory criterion.
Now it does not appear in this case that the antecedent relations
of the defendant to this land were changed by reason of this
contract, and it does appear that the only change that took place,
in fact arose from the plaintiffs' withdrawal in favor of the
defendant, and from their refraining to prosecute an adverse claim
which was never filed. This would clearly be insufficient to take
the case out of the statute. If in fact plaintiffs had been in the
exclusive possession of the lode in question and defendant had
never been in possession or exercised acts of ownership until the
bargain was made between them, and the plaintiffs had surrendered
possession in pursuance of the contract, it would have been easy to
set forth such facts in unequivocal terms, and not have left them
to be inferred from the ambiguous averments of this complaint.
There was no error in sustaining the demurrer, and the judgment
of the court below must be
Affirmed.
