The opinion
Rehearing denied January 5, 1926.
On Petition for Rehearing.
( 242 Pac. 605 .)
McBRIDE, C. J.
In a petition for rehearing, which is apparently studiously designed to be offensive rather than to discuss calmly the matter in hand, counsel begins by charging the court with making a misstatement as to the character and quality of this suit, in that the court used this language:
“This is a suit to declare a resulting trust in certain lots situated in the City of Portland.”
It does not require any lengthened argument to show that the complaint either was directed to a resulting or constructive trust, or that it had no object whatever. Our statute requires the evidence of an express trust to be in writing. In view of this *604 statute, uo sane lawyer would attempt to enforce an express trust without alleging that the trust was in writing. In this state an express trust is one created by contract of the parties intentionally and in writing. Every other trust is either constructive or resulting. There was no demurrer to the complaint in this case, but counsel demurred to the evidence objecting that the alleged trust or declaration of trust was not in writing, which raised the question of an express trust at once. The plaintiff either had a cause of suit for a resulting or constructive trust or he had no cause of suit whatever, and all of the testimony offered by him should in that case have been excluded. The court allowed it to go in subject to tne objections but finally overruled all objections and discussed the matter upon its merits. It is not true that an agreement or understanding between the parties will absolutely destroy the trust if equity can say that it would be fraud on the. cestui que trust to allow the grantee of the legal title to retain possession of the property.
In Robinson v. Leflore, 59 Miss. 148 , it was said:
“If the facts make out a case of resulting trust independently of the agreement, relief will not be denied because of the agreement; it being well settled that an invalid agreement cannot destroy an otherwise good cause of action, and this is no less true of resulting trusts than of other leg’al rights.”
In Jackson v. Jackson, 150 Ga. 544 ( 104 S. E. 236 ), the court quotes with approval in Brennaman v. Schell, 212 Ill. 356 ( 72 N. E. 412 ) as follows:
“A resulting trust arising by operation of law is not defeated because the grantee verbally agreed to convey the title to the cestui que trust upon request.”
*605 In Jackson v. Jackson, supra, the court uses this language:
“Where A. pays the purchase money and causes the deed to be made to his wife, and an oral agreement to hold in trust for A. is shown to rebut the presumption of gift, the majority view is that the trust is nevertheless resulting if the oral agreement is not different from the agreement which would be implied if the grantee were legally a stranger to A. Smithsonian Institution v. Meech, 169 U. S. 398 ( 42 L. Ed. 739 , 18 Sup. Ct. Rep. 396, see, also, Rose’s U. S. Notes); Harden v. Darwin, 66 Ala. 55 ; Milner v. Freeman, 40 Ark. 62 ; Harbour v. Harbour, 103 Ark. 273 ( 146 S. W. 867 ); Corr’s Appeal, 62 Conn. 403 ( 26 Atl. 478 ); Sherman v. Sherman, 20 App. D. C. 330; Dorman v. Dorman, 187 Ill. 154 ( 58 N. E. 235 , 79 Am. St. Rep. 210 ); Bachseits v. Leichtweis, 256 Ill. 357 ( 100 N. E. 197 ); Cooley v. Cooley, 172 Mass. 476 ( 52 N. E. 631 ) (semble); Howe v. Howe, 199 Mass. 598 ( 85 N. E. 945 , 127 Am. St. Rep. 516 ) (semble); Sherwood v. Davis, 168 Mich. 398 ( 134 N. W. 463 ) (semble); Price v. Kane, 112 Mo. 412 ( 20 S. W. 609 ); Curd v. Brown, 148 Mo. 82 ( 49 S. W. 990 ) (semble); Bartlett v. Bartlett, 15 Neb. 593 ( 19 N. E. 691 ); Bailey v. Dobbins, 67 Neb. 548 ( 93 N. W. 687 ); Lahey v. Broderick, 72 N. H. 180 ( 55 Atl. 354 ); Duvale v. Duvale, 54 N. J. Eq. 581 ( 35 Atl. 750 ); McGee v. McGee, 81 N. J. Eq. 190 ( 86 Atl. 406 ) (semble); Yetman v. Hedgeman, 82 N. J. Eq. 221 ( 88 Atl. 206 ); Livingston v. Livingston, 2 Johns. Ch. (N. Y.) 537; Jackson v. Matsdorf, 11 Johns. (N. Y.) 91 ( 6 Am. Dec. 355 ); but see Binkowski v. Moskiewitz, 144 App. Div. 161 ( 128 N. Y. Supp. 803 ); Gould v. Gould, 51 Hun, 9 ( 3 N. Y. Supp. 608 ); Jeremiah v. Pitcher, 26 App. Div. 402 , ( 49 N. Y. Supp. 788 ), affirmed 163 N. Y. 574 ( 57 N. E. 1113 ); Short v. Short, 62 Or. 118 ( 123 Pac. 388 ); Hickson v. Culbert, 19 S. D. 207 ( 102 N. W. 774 ); Shepherd v. White, 10 Tex. 72 (semble); Bickford v. Bickford, 68 Vt. 525 ( 35 Atl. 471 ); Walston v. Smith, 70 Vt. 19 ( 39 Atl. 252 ) (semble); cf. Borrow *606 v. Borrow, 34 Wash. 684 ( 76 Pac. 305 ); Collinson v. Collinson, 3 De Gex, M. & G. 409; Seawin v. Seawin, 1 Y. & C. C. C. 65; Williams v. Williams, 32 Beav. 370 (semble); Re Gooch, 62 L. T., N. S. 384 (semble); Devoy v. Devoy, 3 Sm. & G. 403 (semble).”
Other cases to the same effect might he cited, as well as a few cases to the contrary, but these are deemed sufficient. So we feel, briefly stated, that we have not misnamed or misstated the cause of suit; nor, upon the trial, was the defendant’s counsel so dumbfounded by the fact that a resulting trust is claimed as he now assumes.
Upon page 57 of the transcript of testimony we find the following:
“Mr. Stapleton [addressing the court]: Weil, of course, I don’t know how you want this presented, or the way you want it presented, but the way you do want it presented is the way we will have to present it. My idea of it now would be to discuss whether or not, a prima facie case of a resulting trust had been made out, as a matter of law.”
Although counsel now says that no one until now seriously and sincerely urged that there was any evidence of a resulting trust, the sufficiency of the evidence on that point was the very first thing he proposed to discuss in the court below, and the court’s opinion, which accompanies the transcript, shows that he decided the case upon the theory that it was a case where the plaintiff was endeavoring to establish a resulting trust and decided against the plaintiff, not upon the theory that he had not produced any evidence of a resulting trust, but that he had not proved it beyond a reasonable doubt. So, it appears that upon the trial nobody was deceived as to what the plaintiff was claiming, or as to what was the nature of the suit. So much for the matter of *607 misstatement. The object of the suit was correctly stated and counsel knows it.
Counsel cites Perry on Trusts to the effect that a resulting trust can never arise from any contract of agreement of the parties. While this is true in a general way, the language used is broader than the law warrants, because no resulting trust ever arose where there was an intent that the party in whose name the property was taken should hold it as his own and evidence, therefore, of the agreement of the parties of all the circumstances of the case is admissible to show that the party paying the money was to be the ultimate owner of the property, and that in the taking of the deed he was merely an intermediary.
While counsel is quoting from Perry on Trusts, it would be well to consider note (a) to Section 124, last edition, and the authorities there cited.
“Nor will proof of a parol trust which is unenforceable because of the statute of frauds and which the title holder declines to recognize prevent a trust from resulting unless the agreement has the effect of showing that the intention of the purchaser was that the beneficial interest should pass to the grantee of the legal title; and the fact that the enforcement of a resulting trust amounts to substantially the same thing as enforcing the express parol trust, which is void under the statute of frauds is no objection.,,
This note is the law.
Counsel challenges the statement in which we say that there is evidence corroborating the statement of Mr. Neppach that he paid the money, and like Ajax defying the lightning, he defies the court to point to any such testimony. We only alluded briefly to this testimony, but it seems proper now to *608 call counsel’s attention to the additional testimony of Mrs. Shipherd not noticed in the original opinion.
“That evening after dinner, they [speaking of Mr. and Mrs. Neppach] told us about buying this property,—that Mr. Neppach had just bought a piece of property to build them a new home.”
Not that Mrs. Neppach had bought it, or both of them had bought it, but that Mr. Neppach had bought it.
And again, on another occasion, Mrs. Shipherd relates this conversation with Mrs. Neppach:
“We were discussing homes, and I told how badly I felt to give up my home in Portland, and she said how glad they would be to have a home again, and that Mr. Neppach had just bought a piece of property on Twenty-fifth and Northrup to build them a home.”
And again, on page 50 of the transcript of testimony, on another occasion, she relates, that when her husband and Mr. Neppach were playing cards she and Mrs. Neppach had this conversation:
“We were talking about the home and I said, ‘How nice that you own a home all by yourself’; and she said, ‘The property belongs to Mr. Neppach.’ ”
Further on, relating to the same conversation, Mrs. Shipherd used this language:
“She said that the property had been placed m her name in trust owing to his illness of diabetes and some lawsuit—I don’t remember what.”
So, if this testimony, by an absolutely disinterested witness, does not corroborate Mr. Neppach, it would be hard to find testimony that would corroborate these statements. The witness, Thomas, gave this *609 testimony, found on page 53 of the transcript of testimony:
“We was talking about Mr. Neppach’s health; he was in poor health and just in the conversation, Mrs. Neppach was stating his conditions and all about it, and then the conversation just went off onto their home, and about Mr. Neppach having so many irons in the fire, and she wished he could sell off that sawmill to get that off his hands. Then we got to talking about the home, and she says, ‘Mr. Neppach,’ she says, or ‘We went out and picked our lot out, and this home where we are now, we built that,’ she says, ‘We had that lot there,’ she says, ‘and Mr. Neppach had that built just exactly the way I wanted it,’ and she was so taken and wrapped up in the home that she had an awful lot to say about it; and then they commenced talking about the conditions of Mr. Neppach’s health again, and she said, before it was wound up, she said that Mr. Neppach—that she was holding but very little property in her name, but she did hold that home, that Mr. Neppach had made it over to her under the conditions for his own benefit, as he was so much in business and his health absolutely was so impaired, and I think that was just about what she stated.”
Further on, in answer to a question by the court, the witness said:
“I said Mr. Neppach was in awful bad health, and this here deed was made for the protection of Mr. Neppach on account of his health and his business ability; they was really looking for him to have absolutely a nervous breakdown.
‘ ‘ The Court: For his protection.
“A. For his protection; that’s what she said; that is the first I ever heard of it.”
So, it appears there is some corroboration and strong corroboration of Mr. Neppach’s testimony. Of course it is easy for counsel to assume that witnesses *610 who do not agree with him are liars, bnt all the circumstances tend to sustain Neppach’s theory. There is no question that plaintiff physically paid over the money to Goldsmith. Whether he got it from his wife, or whether it was his own money, is one of the principal questions here at issue, but he had it and paid it over and probably paid the whole purchase price of the two lots so far as actual payment of the money is .concerned. That the original purchase was in the nature of some sort of a trust, at least, partially, cannot be denied.
Neppach and Sengstake bargained for the property together and the deed to the whole or the two lots was made to Mrs. Neppach, so it is evident that the intent was not that she should hold the whole property as her own, although there is just as much reason for counsel claiming that as there is that the intent was for her to hold Mr. Neppach’s share of it as her own. Equitably, the purchasers were tenants in common and Mrs. Neppach their common trustee. That she recognized the trust by deeding half of the property upon request to Mr. and Mrs. Sengstake is conceded. She was the holder of the whole title for the benefit of herself and Sengstake or for Sengstake and Anthony Neppach, which later we held to be established in this case. The division of the property took place afterwards. Of course, if it had been the intent that Mrs. Neppach should be the owner of the property, even if Mr. Neppach appears to have paid for a one-half interest in the property, that intent would have had the effect to bar this suit, but we do not think the testimony so indicates and she was under as much obligation to hold Neppach’s interest for him as she was to hold Sengstake’s interest for him.
*611 Counsel, for some unexplained reason, has joined to his petition an exhibit, being Mrs. Neppach’s account with the United States National Bank. He says it has no business here and was merely put in to show that Neppach is a liar and unworthy of belief. But, if it was competent for any purpose at all, we wonder why it was not introduced at the trial.
Counsel claims that Mrs. Neppach paid $5,000 in cash for this property in the first instance and $500 to Sengstake later. If she did business by check and if this exhibit could be considered for that purpose, it would have shown these transactions, but no such amounts appear by any check -drawn by her. It appears that about March 16th she checked out $3,000 for some purpose, and that about June 5th of the same year the same amount was deposited to her credit and that numerous other sums were checked out or deposited from time to time. But it does not appear, in going over these amounts, that she had at the time of this transaction a sufficient amount of money on deposit to have made the payment of $5,500. There was ample reason why counsel did not go into the matter on the trial of the case. He says he did it to show that Neppach lied when he said he did not know whether she had any money or not. Neppach was very rigidly cross-examined and being an elderly gentleman, possibly smarting under the feeling that he had been unjustly dealt with, some of his answers were rather peppery, but, taking his testimony all together, he never testified that he did not know that his wife had money of her own, but did testify that he did not know of her getting sums of money from her father. In fact, he stated that it was frequent for her to take his money, or for him to givé her *612 money, as lie considered it just as safe in her hands as in his. We cannot speak of the relations of these parties with respect to their business as to how confidential they were. The fact that since 1912 she had in her possession or control a will which attempted to reduce his estate in that property from ownership to a mere life tenancy, and, so far as appears, without consultation with him in any way, would indicate that however confidential he may have been in his relations with respect to her, her relations with him were not entirely confidential, and that he really did not know how much money she had, or, having plenty himself, did not care how much she had or what she did with it. It is far from an impeachment of his integrity. The fact that he testified that in 1908 he considered himself worth $200,000, while the tax-roll showed his property to be of'comparatively small value, is also referred to. Whether he ever made any return to the assessor does not appear. Whether the assessor appraised this property or that of the Nicolai-Neppach Company, or whether it' was all situated in Multnomah County or elsewhere, does not appear. It is a matter of common knowledge that the average Portland business man does not boast about his wealth to the assessor. It is a very small peg upon which to hang a charge of perjury. We have the testimony very clearly that about the time he had received $50,000 in cash, he was financing Shipherd in his springs project to the extent of thousands of dollars; that he was able to build a house on the property and pay for it to the extent of several thousand dollars; was able to build a stone wall around it and pay for it; and that he had certainly enough money to spare to have made this purchase.
*613 We believe the affirmative evidence, with the exception of the testimony of Mrs. Norval, an interested party, is all one way. In onr opinion, he not only purchased the property with his own money, but with the intention, known to Mrs. Neppach, to spend a large amount of money in building a home on the property and having done this, it would be a gross fraud to allow it to be taken from him and his interest in it reduced to what will probably be a very brief life estate.
Counsel seems to intimate that the court was probably misled by their sympathies with the plaintiff on account of his age. So far as the writer of this opinion is concerned, he is not disposed tq weep tears of sympathy over a man who admits being worth $200,000 and having forty or fifty thousand dollars worth of bonds in the bank, No sympathy seems to be needed as far as he is concerned. The other parties may be equally well off for all we know. There is no sympathy required. It is a matter of applying the law to the facts as we view them.
Counsel complains that the court has ignored his contention that the title to the property in question has vested in Florence Norval. It is so apparent that the legal, not equitable, title to the premises vested in Mrs. Neppach and that by her will the legal, not equitable, title thereto vested in Anthony Neppach for life with a vested legal remainder in fee in Florence Norval, that notice of the contention was not deemed necessary, but the corollary which counsel seeks to draw from this elementary legal proposition is a non sequitur. Counsel’s proposition is substantially this: By the terms of the will Florence Norval was devised a vested remainder in the property and had no knowledge of any equities *614 or supposed equities of Mr. Neppach therein. Therefore, she is an innocent purchaser for value. How a devisee under a will can ever he an innocent purchaser is not explained. A devisee takes the estate subject to all equities, latent or patent, which existed between the holder of the legal title and the person who paid the purchase money.
It is also complained that the court has ignored the fact of Mrs. Neppach having made a will devising this property as evidence that she in good faith believed it was hers. This fact was not ignored in the opinion, but such fact was not and is not controlling. She probably reasoned, as counsel does, that if adverse business conditions overtook her husband, he would still have a home which might be swept away if he held the legal title, or she might justly have reasoned that he was already well-to-do and had no use for the property except for a home during his life and allowed her affection for her own relatives to so influence her conduct that she saw no moral wrong in disposing of the ultimate title in the manner shown in the will. .Holding as we do that the estate vested in her in trust for her husband, whatever motive induced her to ignore the trust, the act must be held to have been a constructive fraud. The fact that the deed was taken in the name of the wife instead of some other person, while important, is not controlling. If A. purchases property and takes the title in the name of B. the law raises a presumption of fact, prima facie, that the purchase was for A.’s benefit. If A. purchases property with his own funds and takes the title in the name of his wife, the law raises a presumption of fact, prima facie, that in so taking the title he intended to make a gift or advancement to her, and he is required to overcome that *615 presumption by satisfactory evidence. This we think be has done.
In view of tbe request of counsel for an examination of tbe case by all of tbe justices, tbe decision bas been delayed longer than usual. Tbe case was carefully examined and considered in' tbe first instance and bas received a tborougb re-examination upon counsel’s petition for rebearing with tbe .result that tbe court is more firmly than ever convinced that tbe original opinion was correct.
Tbe petition for rebearing is denied.
Rehearing Denied.
Bean, Brown and Belt, JJ., concur.