Loring v. Palmer

after stating the case as above reported, delivered the opinion of the court.

The question which meets us at the outset is whether the trust in favor of Palmer, on which the case depends, has been sufficiently established. A statute of Michigan provides that “ express trusts may be created'for any or either of the following purposes:

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“ 5. For the beneficial interest of any person or persons, when such trust is fully expressed and clearly defined upon the face of the instrument creating it,'subject to the limitations as to time prescribed in this title.” 2 Howell’s Ann. Stat. § 5573, p. 1448.. . \

The trust relied on is an express trust, and it relates to lands in Michigan. Consequently it must be established according to this statute, which it is contended requires proof of the creation of the trust by a written instrument that shall clearly express and fully define on its face the rights of the respective parties thereto. It is not enough, as is claimed, to show the existence of the trust by writing. The proof must be that it was originally created by a written instrument sufficient in form. In the view we take of the case it is unnecessary to inquire whether this is the true rule or not, for, in our opinion, the evidence is sufficient to meet all these requirements.

' We do not understand it to be denied that the letters of Palmer to Loring under date of June 18 and June 19; the memorandum of the agreement made in Michigan at the time of the negotiations by Palmer and Frue with Mason for the purchase, and which was sent by Palmer to Loring in the letter of June

We begin, then, with the fact that Loring, Palmer, and Prue had been operating together for some years in buying mining lands, forming mining corporations, and selling mining stocks. Yery generally the titles, both of lands and stocks, had been, during all the time, taken and held in the name of Loring, as trustee for all concerned. Each party paid for his own share of the purchases, but Loring was the principal capitalist, and both Palmer and Prue relied on him to raise money for them to meet their obligations when necessary. This particular purchase was set on foot by Palmer and Prue, and it was a kind of property in which the parties had been in the habit of dealing. It adjoined or was near to other property in which they were all largely interested at the time, and which they were jointly engaged in advancing in -value. The writings are to be read and construed in the light of these facts.

The contract of purchase, as reduced to writing and finally executed, is in the name of Loring, trustee. This on its face implies that it was made by him for the beneficial interest of others besides himself, in whole or in part. Standing alone, it does not “ clearly define ” the trust which it apparently created but, taken in connection with the correspondence which preceded it, and out of which it confessedly arose, no room is left for doubt that it was made for the benefit of the three persons who had been so long operating together in that kind of property. Palmer, in his letters acquainting Loring with what he and Prue had done in Michigan towards the purchase, says, “ it is a fortune to us if well handled; ” “ when I present the whole

It is said, however, that Frue does not appear to have been included as one of the beneficiaries. He was one of those who had been operating together, and Palmer, in his letter, speaks of him as having been present when the negotiations were had with Mason in Michigan. The language on this subject, in the letter of June 19, is: “ Mason talked this matter over with Frue and myself, and says we shall have this land as agreed, and that his word is as good as his deed; ” and, besides, in the memorandum of the agreement, made at the time of the negotiation, either Palmer and Frue were named as vendees, or Charles H. Palmer and his associates, which, under the circumstances, would imply the same thing.

Again, it is said that the individual interests of the respective beneficiaries are not stated, and, therefore, that the trust is not sufficiently defined to meet the requirements of the statute; but the rule in Michigan, as well as in all other States where the principles of the common law prevail, is that where a conveyance of lands is made to two or more persons, and the instrument is silent as to the interest which each is to take, the presumption will be that their interests are equal. Campau v. Campau, 44 Mich. 31 , 34; Eberts v. Fisher, 44 Mich. 551 , 553,

Finally, it is claimed the letters show that the purchase was made for the Ossipee Company, and not for Loring, Palmer, and Frue individually. We cannot so read what was written. The Ossipee Company had been promoted by these parties. They had bought the land which was made the basis, in whole or in part, of its organization. They were at the time of the purchase from Mason the three largest stockholders. The Ossipee was a corporation, and it nowhere appears that these parties, or either of them, had ever been authorized to make the purchase on its account. There is no doubt that all the parties expected to handle the property with a view to an • enhancement of the value of .Ossipee stock, but there is nothing whatever to indicate that the corporation was to be in any way directly interested in the purchase. The land might have been, and undoubtedly was, necessary to the complete success of the company, but it was nevertheless when bought the property of the purchasers, who occupied no such trust relations to .the company as to make their purchase enure, directly to its benefit; and, besides, the company is not now seeking to charge them as trustees. Palmer does, indeed, say in his letter to Loring, “ the purchase will add to the Ossipee $5 per share at once in actual value,” and “ we must make a family concern of Ossipee, and I would not sell any stock in it; we can make it put on its own importance; this we will do; I see this matter clearly; ” and “ we shall have- a Hecla of our own; ” but this does not make Ossipee the purchaser, or the direct beneficiary under the trust as thus created and defined. The

We conclude, therefore, that the original trust in favor of Palmer for a one-third interest in the property has been sufficiently established.

It is contended, however, that if the conveyance was made' to Loring as trustee for himself and Palmer and Prue, then, under the statutes of Michigan, the legal title vested at once in the beneficiaries, and the remedy of Palmer is at law, and not in equity, because he holds the legal title to his share and not an equitable title merely. The statute referred to is as follows:

“ § 5567. Sec. 5. Every disposition of lands, whether by deed' or devise, hereafter made, except as otherwise provided in this chapter, shall be directly to the person in whom the right to the possession and the profits shall be intended to be vested, and not to any other, to the use of, or in trust for, such person; and if made to one or more persons, in trust for, or to the use of another, no estate or interest, legal or equitable, shall vest in the trustee.” 2 Howell’s Ann. Stat. 1446.

This, it has been held, abolishes all express passive trusts in Michigan, but allows express active trusts when created in accordance with § 5573, cited above. Burdino v. Amperse, 14 Mich. 91 , 96; Ready v. Kearsley, 14 Mich. 215 , 227; Steevens v. Earles, 25 Mich. 40 , 44; Thompson v. Waters, 25 Mich. 214 , 234; Goodrich v. Milwaukee, 24 Wis. 422 , 430. But here the conveyance under which Loring took the title that he has since conveyed to Welch did n,ot create the trust in favor of Palmer. That was done by the original contract of purchase from Mason, read in connection with the contemporaneous correspondence between the parties, and the object of this suit is to charge Loring as trustee under that contract, and to compel him and his grantee to perform the trust which was then created. There is nothing on the face of the deed to Loring to show that Palmer is the person for whom Loring took title in trust. The legal title did not, therefore, vest in him by that conveyance. All he has is the equitable title which he acquired under the contract of purchase, and his purpose now is to com

The trust having thus been established and the jurisdiction of a court of equity over the subject-matter of the suit sustained, it remains only to consider whether the trust, which was originally created, has been abrogated by abandonment or laches. The last payment to Mason was made February 18, 1869, and this suit was not brought until December 20, 1815.

This branch of the case is presented to us very differently from what it was to the court below when the interlocutory decree was rendered, and the cause referred to a master to ascertain how much was due from Palmer to Loring upon the purchase money paid to Mason. It was then supposed that Palmer had no money in the hands of Loring which could be used to pay on the land when the deferred instalments fell due. The court then found that no part of the proceeds of the smelting stock or the Hecla stock was applied to such payment, and that all went into Palmer’s general account with his consent. It now appears that when each of the instalments was paid, or very soon thereafter, Palmer had, or ought to have had, a balance to his credit much more than sufficient to meet his share of what was due. The testimony shows very clearly that neither of the parties had a correct understanding of the state of their accounts with each other at the time. Palmer kept no books of his own, and those of Loring were not at all rehable.

The decree of the Circuit Court is

Affirmed.