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clearly make the condition in this case a condition subsequent to the vesting of the property in the society.
But it is said that the power given to the Court of Probate, to extend the time for the building of the chapel indefinitely, ties up the property indefinitely in the hands of the society, thereby rendering the donatiou obnoxious to our statute against perpetuities, for until the chapel shall be built the property is not the absolute property of the society, and they have no right to appropriate it to the charitable purpose desiguated in the will. But the appellant is in error in regard to the power given to the Court of Probate to extend the time for the building of the chapel. The language of the will is: In case there shall be any good reason for extending the time beyond the three
The cases cited from New York therefore are not authority in regard to our statute.
We think the donation to the society is not obnoxious to our statute of perpetuities.
We advise the Superior Court that the reasons of appeal are insufficient.
manufacturing, mining, mechanical, or chemical pur-
There must be a good reason shown before the Court of Probate can extend the time at all, and even then the court is limited to a reasonable time for the build.
ing of the chapel under the circumstances then existing. The will contemplates only a short period of time-such time only as is reasonably necessary for the completion of the work. The judge of Probate has no discretion in the premises, other than what the will gives him, and if he errs on the subject, his action is reviewable by a higher court.
But it is said that the tying up of the property in the hands of the society for the period of three years renders the conveyance obnoxious to the statute, and authorities are cited from the State of New York to that effect.
"Section 12. Every such twenty days from the first day of January, if a year company shall, within from the time of the filing of the certificate of incorporation shall then have expired, and if so long a time shall not have expired, then within twenty days from the first day of January in each year after the expiration of a year from the time of filing such certificate, make a report, which shall be published in some newspaper published in said town, city, or village; or if there be no newspaper published in said town, city, or village, then in some newspaper published nearest the place where the business of the company is carried on, which shall state the amount of capital, and of the But it should be remembered that the statute of proportion actually paid in, and the amount of its exNew York is very different from our own on the sub-isting debts; which report shall be signed by the presiject of perpetuities. dent aud a majority of the trustees, and shall be veriThe statute there provides that "the absolute power fied by the oath of the president or secretary of said of alienation shall not be suspended by any limitation company, and filed in the office of the clerk of the or condition whatever longer than during the term of county where the business of the company shall be two lives in being." And it has there been held that the carried on; and if any of said companies shall fail so to suspension for a certain definite period, however short, do, all the trustees of the company shall be jointly violates the statute, for it may be longer than two lives and severally liable for all the debts of the company in being. By our statute the suspension may be made then existing, and for all that shall be contracted beduring any number of lives in being when the will is fore such report shall be made. But whenever under made creating the suspension, and during such time this section, a judgment shall be recovered against a afterward as will leave it impossible for the estate to trustee severally, all the trustees of the company shall be carried by the terms of the will to parties not in contribute a ratable share of the amount paid by such being when the will was made, and not the immediate trustee on such judgment, and such trustee shall have issue of parties then in being. A will must make it a right of action against his co-trustees, jointly or sevpossible by its terms for parents to be born after the erally, to recover from them their proportion of the making of the same, whose issue will take the estate, amount so paid on such judgment; provided that nothin order to render the will obnoxious to our statute, ing in this act contained shall affect any action now which manifestly would require a much longer period pending." than three years. This is obvious. Our statute allows wills to be made conveying property to parties in being when the will is made, or to their immediate issue, born or unborn. Hence to make them obnoxious to the statute, they must go one step further. The will must leave it possible for the issue of unborn issue to take the estate.
H. J. Scudder and G. A. Black, for plaintiff in er
MANUFACTURING CORPORATION — LIABILITY
IN error to the Circuit Court of the United States
for the Southern District of New York. The statute on which the action is founded is as follows (Laws N. Y. 1875, ch. 510):
"Section 1. The twelfth section of the 'Act to authorize the formation of corporations for manufacturing, mining, mechanical, or chemical purposes,' passed February 17, 1848, as snid section was amended by chapter 657 of the Laws of 1871, is hereby further amended, so that section twelve shall ad as fol
G. P. Lowrey, for defendants in error.
MATTHEWS, J. It is the well-settled rule of decision, established by the Court of Appeals of New York in numerous cases, that this section of the statute, to enforce which the present action was brought, is penal in its character, and must be construed with strictness as against those sought to be subjected to its liabilities. Merchants' Bank v. Bliss, 35 N. Y. 412; Wiles v. Suydam, 64 id. 173; Easterly v. Barber, 65 id. 252; Knox v. Baldwin, 80 id. 610; Veeder v. Baker, 83 id. 156; Pier v. George, 86 id. 613; Stokes v. Stickney, 96 id. 323 In the case last cited the action authorized by it was held to be ex delicto, and that it did not survive as against the personal representative of a trustee sought to be charged.
In Bruce v. Platt, 80 N. Y. 379, it was said: "It is settled by repeated decisions applicable to this case, that the statute in question (Laws 1848, ch. 40, § 12) is penal, and not to be extended by construction; that in an action to enforce a liability thereby created,
nothing can be presumed against the defendants, but that every fact necessary to establish their liability must be affirmatively proved;" citing Garrison v. Howe, 17 N. Y. 458; Miller v. White, 50 id. 137; Whitney Arms Co. v. Barlow, 63 id. 62. The rule of construction in reference to this and similar statutory provisions has been heretofore adopted and applied by this court. Steam-engine Co. v. Hubbard, 101 U. S. 188; Flash v. Conn, 109 id. 371.
In the case last mentioned this court, following the Court of Appeals of New York in the case of Wiles v. Suydam, 64 N. Y. 173, showed the distinction between the liability of stockholders for the debts of the corporation, under a section of the same act, making them severally individually liable for the debts and contracts of the company to an amount equal to the amount of stock held by them respectively until the whole amount of the capital stock fixed and limited by the company has been paid in, and the liability imposed upon the trustees by the section now under discussion. It was held that the former was a liability ex contractu, enforceable beyond the jurisdiction of the State, and that the statute should be construed liberally in furtherance of the remedy; that the latter was for the enforcement of a penalty, and subject to all the rules applicable to actions upon statutes of that description. The distinction is illustrated and enforced in Hastings v. Drew, 76 N. Y. 9, and Stephens v. Fox, 83 id. 313.
The precise question involved here was decided by the Court of Appeals of New York in the case of Miller v. White, 50 N. Y. 137. In that case the complaint set forth the recovery of a judgment against the company, but not the original cause of action against it, on which the judgment was founded. The defendant moved for a dismissal on this ground which was refused, and judgment was rendered in favor of the plaintiff on the production in evidence of the judgment roll. This was held to be erroneous on the ground that the judgment was not competent as evidence of any debt due from the corporation, and that no action could be maintained thereon against the trustees under this section of the act. Judge Peckham, delivering the unanimous opinion of the court, said: "It will be perceived that this is a highly penal act, extremely rigorous in its provisions. It is absolute that the trustees shall be liable for all debts of the company, if the report be not made, no matter by whose default. If one of the trustees did all in his power to have it made, yet if the president, or a sufficient number of his co-trustees to constitute a majority, declined to sign it, or if the president and secretary declined to verify it by oath, the faithful trustee seems to be absolutely liable as well as those who refuse to do their duty." It was accordingly held "that as against these defendants, the judgment did not legally exist, as they were neither parties nor privies to it. * * It is not a judgment as to these defendants; no action could be maintained thereon against them. * * *Nor is the judgment prima facie evidence of the debt as against these defendants." This doctrine was repeated and reaffirmed by the same court in Whitney Arms Co. v. Barlow, 63 N. Y. 62-72. In that case the court said: "The debt must be proved by evidence competent against the defendauts. The facts upon which the debt is founded must be proved. The naked admissions of the corporation, or judgment against the corporation, are not evidence against the trustees. They are res inter alios acta; but when facts are proved which would establish the existence of a debt against the corporation, the liability of the trustees for the debt follows upon the proof of the other facts upon which the liability is made by statute to depend."
The case of Miller v. White, ubi supra, has never
been overruled nor questioned by the New York Court of Appeals. On the contrary, it has been repeatedly and expressly cited and approved, and either followed or distinguished from the case under decision in the following cases: Rorke v. Thomas, 56 N. Y. 559-565; Hastings v. Drew, 76 id. 9-15; Stephens v. Fox, 83 id. 313-317; Knox v. Baldwin, 80 id. 610-613; Bruce v. Platt, id. 379-381.
It is attempted however in argument to distinguish the present case from that of Miller v. White, ubi supra, upon the facts, so as to except this from the rule of that decision. In the case of Miller v. White, ubi supra, the judgment sued on was not recovered until after the alleged default on the part of the defendants, as trustees, in filing their report; whereas in the present case the default is alleged to have occurred after the recovery of the judgment sued on. But in Miller v. White, the plaintiffs did aver defaults occur. ring after the rendition of the judgment, although none were proved, exccpt one occurring before it was recovered; and the court said (50 N. Y. 140): "The right of action in this case arose, if ever, at the expiration of the twenty days from the first day of January, 1865. At that time the judgment had no existence. It was not recovered until June, 1866." But this language plainly shows that the very point of the decision was that no right of action could arise upon the judgment itself, but upon the debt alone, on which the judgment was founded; and as to this it is, as we have already seen from other parts of the opinion, expressly declared that the judgment was, as against the trustees, evidence neither conclusive nor prima facie of the existence of a debt due from the corporation, for the payment of which they could be charged.
Upon this point, it is further said in argument that it is reduced to a question of evidence, and that the rules of evidence enforced in the courts of a State do not necessarily govern courts of the United States, although sitting in the same State. However this may be in other cases, or where the laws of the United States prescribe rules of evidence for their own tribunals, it is not true that the courts of the United States, in a special statutory proceeding, would give to a judgment of a State court any other or greater effect, either as matter of evidence or as ground of action, than must be lawfully given to it in the courts of the State, whose laws are invoked to enforce it.
It is however further urged upon us in argument that in cases like the present, which is shown by the record and admitted to be founded on an action on the case for a tort, the judgment against the corporatiou must be evidence of the debt ex necessitate. On this head the language of counsel in their priuted argument is as follows:
"The action was for trespass on the case for a tort (entering upon and taking oils from the lands of the plaintiff), which was unliquidated except by the verdict, which possibly contained an allowance in the nature of punitive damages. It was impossible of exact computation, containing allowances for costs provable in no other way. It would be absurd, unreasonable, and productive of uncertainty and confusion, to require the submission to another jury of the facts which led to this verdict, for if they found a less amount it is palpable that a part only of the debt of the company would be recovered against these defendants, who are liable for all the debts of the company. If they gave a larger verdict, these defendants would be the first to complain. Under the statute they are severally as well as jointly liable. Each one could be sued apart from the others, and if one trustee is sued alone, all the trustees shall contribute a ratable share of the amount paid on such judgment. If in each suit against each trustee the whole evidence of the original claim had to be gone into and separate verdicts rendered,
But if this proves any thing it proves too much, and instead of showing the thing to be proved, that the judgment is conclusive evidence of a debt, it establishes on the contrary, that a liability on the part of the corporation for a tort, though afterward reduced to judgment against it, is not a debt of the corporation, even when in judgment, within the meaning of the statute imposing upon the trustees the penalty sought to be enforced in this action for not making and publishing an annual report showing, among other things the amount of its existing debts. For keeping in view the statement now urged by counsel of the impossibility in advance of liquidation by the verdict of a jury of even approximately, much less accurately, stating the amount of such liability, can it be supposed that the duty to do so is devolved upon theẞtrustees, within either the letter or spirit of this statute, under penalty of becoming personally liable to pay whatever judgment may be thereafter rendered on account thereof against the corporation? Surely not. Such claims are not within the contemplation of the act. The mischief to be prevented by its requirements has no relation to liabilities of that description. The creditors to be protected are those only who become such by voluntary transactions, in reference to which for their benefit the information becomes important as to the debts of the company.
The precise point does not appear to have arisen under this act, so as to have become the subject of a decision by the New York Court of Appeals. But it seems to be virtually decided in Heacock v. Sherman, 14 Wend. 59. That was an action on the case for the recovery of damages against the stockholders of a corporation, occasioned by not keeping in repair a bridge, the liability arising, as it was alleged, upon the eighth section of the act incorporating the Buffalo Hydraulic Association (St. N. Y. 1827, p. 45), which was as follows:
"That the stockholders of the said corporation shall be holden jointly and severally to the nominal amount of their stock for the payment of all debts contracted by the said corporation or by their agents; and any person or persons having any demand against the said corporation may sue any stockholder or stockholders in any court having cognizance thereof, aud recover the same, with costs, provided that no stockholder shall be obliged to pay more in the whole than the amount of the stock he may hold in the said company at the time the debt accrued." Mr. Justice Nelson, delivering the opinion of the court, said: "The term 'demand' is undoubtedly broad enough, if it stood alone, to embrace the claim of the plaintiff. * ** We must however look at the whole section, and the connection in which it stands, in order to fix its meaning in this case. The stockholders in the first place are made jointly and severally holden for the payment of all debts contracted by the corporation or by their agents. The liability is here declared; it is new and unknown to the common law, and is in terms limited to demands ex contractu. The residue of the section was not intended to extend the liability thus declared, but is in furtherance of the remedy. *** But the proviso to the section is conclusive upon the point. Any person having a demand against the corporation is authorized to sue any stockholder in any court, etc., 'provided that no stockholder shall be obliged to pay more in the whole than the amount of the stock he
may hold in said company at the time the debt accrued;' thereby clearly qualifying the enlarged meaning of the word 'demand,' and showing satisfactorily that it was used by the Legislature to denote a demand arising upon contract. Damage arising upon tort is not a debt accrued within any reasonable con⚫ struction of that term. It is apparent as well from a view of the whole section as from an analysis of its parts, that the intent of the framers of it was only to make the stockholders individually responsible for the debts of the company."
This reasoning and conclusion, as applied to the present case, is not weakened, but rather strengthened by the language cited and relied on by counsel in support of his proposition, from the opinion of Mr. Justice Story in Carver v. Braintree Manfg. Co., 2 Story, 448, construing a Massachusetts statute, enacting that
every person who shall become a member of any manufacturing corporation shall be liable in his individual capacity for all debts contracted during the time of his continuing a member of such corporation." He there admits that debts, in the strict sense of the term, include only contracts of the party for the payment of money and nothing else; but feeling required to construe the statute broadly, as a remedial statute, he gave to the word "debts" a meaning, not unusual, as equivalent to "dues;" and to the word contracted," a meaning which though more remote, he said, was still legitimate, as equivalent to "incurred;" so that the phrase, "debts contracted," in that sense, would be equivalent to "dues owing" "or liabilities incurred;" and would therefore cover unliquidated claims arising from torts. But as we have already seen, the statute involved in this discussion is not a remedial statute, to be broadly and liberally construed, but is a penal statute, with provisions of a highly rigorous nature, to be construed most favorably for those sought to be charged under it, and with strictness against their alleged liability. Under such a rule of construction its language is limited by its own terms, to a liability on the part of the trustee to debts of the corporation existing and arising ex contractu.
It is finally insisted that a judgment against the corporation, although founded upon a tort, becomes ipso facto a debt by contract, being a contract of record, or a specialty in the nature of a contract. But we have already seen that the settled course of decision in the New York Court of Appeals rejects the judgment against the corporation as either evidence or ground of liability against the trustees, and founds the latter upon the obligation of the corporation on which the judgment itself rests. And it was decided by this court in the case of Louisiana v. New Orleans, 109 U. S. 285, that a liability for a tort, created by statute, although reduced to judgment by a recovery for the damages suffered, did not thereby become a debt by contract in the sense of the Constitution of the United States forbidding State legislation impairing its obligation, for the reason that "the term 'contract' is used in the Constitution in its ordinary sense as signifying the agreement of two or more minds, for considerations proceeding from one to the other, to do' or not to do certain acts. Mutual assent to its terms is of its very essence." The same definition applies in the present instance, and excludes the liability of the defendants, as trustees of the corporation, for its torts, although reduced to judgment.
We find no error in the judgment of the Circuit Court, and it is accordingly affirmed.
NEW YORK COURT OF APPEALS ABSTRACT.
ATTORNEY AND CLIENT-WHEN RELATION DOES NOT EXIST-UNDUE INFLUENCE.-This action was brought
to recover damages on account of fraud arising out of various transactions in the exchanging or sale of farms between the defendant and Alfred and Andrew Stout, the latter being now dead. Alfred and Andrew were colored people, and owned a farm in the town of Hec tor, Schuyler county, together with personal property, and it is claimed that the defendant defrauded them out of this farm and property. The principal acts con. stituting the transactions between the parties consisted of the sale of his farm in Hector to the defendant, by his obtaining from the Stouts a deed of the same; the sale to them by written contract of defendaut's farm; the surrender of this contract afterward, and the sale back to them in 1872 of the Hector farm by a written contract with defendant; the surrender of this contract; the alleged fraudulent settlement in the spring of 1873, and the sale of the Stout farm at that time by defendant to a third person. The complaint alleges that all the dealings and transactions between the defendant and the Stouts, above referred to, were fraudulent and dishonest; that they were all part of a scheme on his part to cheat and defraud Alfred and Andrew out of their property, and were all done by defendant for that purpose; that by this means he did cheat and defraud them out of all their property; that Alfred and Andrew signed papers for defendant without reading them, and that they signed some paper relating to the personal property on said farm, which paper was fraudulently obtained by defendant, and may have signed other papers to defendant, which, if so, were also procured for fraud; that the defendant could get them to sign any paper he wished to. The complaint contained allegations of other fraudulent acts, and claimed damages by reason of the fraud and deceit practiced. The evidence taken together does not establish that the relationship of attorney and client existed between the parties. The fact that the defendant was an attorney, and that he was willing to do all the writing without compensation, is not enough to show the existence of such a relationship. The papers which were drawn were in proper form, and no legal advice was required in regard to the same. No advice was offered or obtained, and the defendant never received a retainer or agreed to act as attorney for the Stouts. It nowhere appears that he assumed the obligations of a professional man in these transactions, or that the Stouts regarded him as acting in that capacity. He was merely engaged as an individual in making a bargain for the sale or exchange of real estate, and evidently drew up the papers gratuitously without assuming to act as attorney for the Stouts. The defendant as an individual had a perfect right to make a bargain with the Stouts as he did, aud draw up the papers without charge, and he did not thereby necessarily place himself in the position of the attorney or adviser of those with whom the bargain was entered into. If he in these transactions gained any advantage it did not arise from the relationship of attorney and client, but from the fact that he was dealing with persons of less capacity than himself to make a bargain or transact business. He may have been chargeable with deceit and fraud, and therefore liable if they were proved against him, but under the ciroumstances there seems to be no valid ground for the contention that he was liable for a vialation of his duty in a professional capacity. As the case stood there was not sufficient evidence to establish the fact that the relationship of attorney and client existed between the defendant and the Stouts, and that question was improperly submitted to the consideration of the jury. In view of the evidence a case involving the principle of undue influence does not arise, nor was it proper to present any such question to the consideration of the jury. Stout v. Smith. Opinion by Miller, J. [Decided Jan. 30, 1885.]
JUDGMENT -SATISFACTION OF FOLLOWING PROCEEDS OF PROPERTY SOLD.-Pending an action to set aside a sale made on credit by agents to a corporation of which they were the managing officers, the agents, as such officers, sold the property to a third party,and subsequently plaintiff obtained judgment setting aside the sale and directing the delivery of the property to it. Held, that after perfecting judgment therein, an assignor of the plaintiff was entitled to bring an action to recover the proceeds of the sale received by said agents from the corporation. The judgment entitled the plaintiffs' assignors as owners to the immediate possession of the property then in question and required its delivery to them. But the defendants now here had, by converting the property, put it out of their power to comply with the judgment, and that fact is in substance the defense set up. It should not prevail. It would require us to hold that an ineffectual judgment divested a successful plaintiff of his property, and gave the wrong-doers a new advantage. This is not the law. On the contrary, the title is not disturbed until in some way he receives satisfaction for it. Osterhout v. Roberts, 8 Cow. 43; Ball v. Liney, 48 N. Y. 6. Although they have disposed of the property the defendants still hold the proceeds of the sale, and the judgment appealed from required them to pay it over to the person appointed by its owner to receive it. Avila v. Lockwood. Opinion by Danforth, J. [Decided Jan. 20, 1885.]
WILL-DEVISE VOID AS TRUST; VALID AS A POWER -POWER OF SALE-DISCRETION-1 R. S. 729, § 55 - RECEIVER CANNOT EXECUTE.-The will of P. by its terms gave all the estate to his executors, with power to receive the rents and profits, and to sell and convey the same, in their discretion, upon trust, to divide the same or its proceeds, after payment of debts, among the testator's four children. The executors were by judgment in this action brought by one of the beneficiaries removed, and a receiver appointed, with the powers of an administrator with the will annexed. On motion to compel the receiver to sell the real estate, held, that the trust attempted to be created was unauthorized, and so no trust estate was vested in the executors, but the title passed to the beneficiaries named as devisees in fee; that the devise, although void as a trust, was valid as a power, but that the receiver had no authority to execute the power. The statute authorizes a trust to sell lands for the benefit of creditors, and also to sell, mortgage or lease lands for the benefit of legatees. 1 R. S. 729, § 55. But we are of opinion that it is essential to the constitution of a valid trust for either of these purposes that the power conferred upon the trustee to sell, mortgage or lease the trust estate must be absolute and imperative, without discretion, except as to the time and manner of performing the duty imposed, and that is not sufficient to invest him with a merely discretionary power of sale, which he may not exercise at his option and which does not operate as a conversion. The sale or other disposition mentioned in the statute must be the direct and express purpose of the trust. Any other construction would open the door to an evasion of the manifest intention of the Legislature to prevent the separation of the legal title and beneficial interest in lands through the medium of a trust, except in the specific cases and for the precise purposes enumerated in the statute. In the will in question not only is the power of sale conferred upon the executors discretionary, but it is apparent that it was incidental to the testator's main purpose in constituting the trust, viz., to provide for a division of his estate by his executors. Nor can the trust be sustained as a trust to receive the rents and profits of land under the third subdivision of section 55. There is no direction to
apply them to the use of any person or for any period. When received they are distributable, not as rents and profits, but because incorporated into the mass of the estate, to be divided by the executors. See Heermans v. Burt, 78 N. Y. 259. The only remaining question relates to the authority of the receiver to execute the power of sale vested in the executors. The power of sale was a power in trust, which although discretionary, could on the death or removal of the executors be executed under the discretion of the court by a trustee appointed for that purpose. 1 R. S. 731, §§ 71, 102; Leggett v. Hunter, 19 N. Y. 445, and cases cited; Roome v. Philips, 27 id. 357. But we are of opinion that by the true construction of the judgmeut appointing the receiver, he was invested with no greater power than that of administrator with the will annexed. The point must now be deemed to be settled that a discretionary power of sale vested in executors cannot be executed by an administrator with the will annexed. He succeeds to the power of sale giyen to the executor, only when the direction to sell is imperative. Mott v. Ackerman, 92 N. Y. 540, and cases cited. Cooke v. Platt. Opinion by Andrews, J. [Decided Jan. 20, 1885.]
CREDITOR'S ACTION WHAT PROPERTY MAY BE REACHED BY-TITLE IN THIRD PERSON-CONSIDERA
TION PAID BY DEBTOR-RESULTING TRUST.-A judgmeut creditor's action, whether instituted under the provisions of the Revised Statutes (2 R. S. 173, §§ 38 et seq.) or the Code of Civil Proceedure (§§ 1871 et seq.) can reach only property belonging to, or things in action due to, the judgment debtor, or held in trust for him. Here the sole fact on which the plaintiff relies is the alleged payment of consideration by his debt or for property conveyed at his instance to the other defendant. But as between the two that circumstance is immaterial. The property is as against him her own absolute property, whether he paid for it, or whether, as she asserts, the judgment was made from her own estate. The debtor never had the title, nor was it at any time subject to the plaintiff's judgment or execution. Nor would it be if the deeds under which she holds should be cancelled. The debtor had neither title nor any legal or equitable interest to which either could attach. This follows from the statute, which declares (1 R. S. 728, § 51) that where a grant for a valuable consideration shall be made to one person, and the consideration therefor shall be paid by another, no use or trust shall result in favor of the person by whom such payment shall be made, but the title shall vest in the person named as the alienee in such conveyance." As his case is presented by the pleadings, the plaintiff therefore must fail. Garfield v. Hatmaker, 15 N. Y. 475; McCartney v. Bostwick, 32 id. 53; Everett v. Everett, 48 id. 218. The statute last cited however contains an exception, and provides (§ 52) that such conveyance shall be deemed fraudulent as against the creditors at the time of the person paying the consideration, and declares that "where a fraudulent intent is not disproved a trust shall result in favor of such creditors, to the extent that may be necessary to satisfy their just demands," and the respondent seeks to maintain the judgment in the case before us as one coming within this statute. It should, we think, be a sufficient answer that it was not put upon that ground by the complaint, nor at the trial. But waiving that, we are not able to see how the claim can be supported. The doctrine to be applied is well settled. To make out such a trust the money must be paid at or before the execution of the conveyance, and not after. Jackson v. Moore, 6 Cow. 706; Botsford v. Burr, 2 Johns. Ch. 405; Steere v. Steere, 5id. 1; Jackson v. Morse, 16 Johns. 107; Rogers v. Murray, 3 Paige, 390, 391; Russell v. Allen, 10 id. 249. The
whole foundation of a trust of this nature is the payment of the money by the cestui que trust, the real, not the nominal purchaser, and so its conversion into land. The respondent cites Wood v. Robinson, 22 N. Y. 564; McCartney v. Bostwick, 32 id. 53, supra; Baker v. Bliss, 39 id. 70; Ocean Nat. Bank v. Olcott, 46 id. 12. In each of these the entire consideration for the property sought to be reached was paid by the debtor at or before the conveyance, and so they came directly within the statute (supra), and entitled the creditor to the benefit of the trust declared in his favor. On the other hand, the doctrine that the trust, in order to exist, must have been coeval with the deeds, and that after one person has made a purchase with his own money or credit, no subsequent transaction, whether of payment or reimbursement, can produce such a trust in his favor, is well settled. Says Chancellor Kent in Botsford v. Burr, supra: "There never was an instance of such a trust so created, and there never ought to be, for it would destroy all the certainty and security of conveyances of real estate. *** The trust results from the original transaction at the time it takes place, and at no other time; and it is founded on the actual payment of money, and on no other ground." And in Rogers v. Murray, supra, it is said to be "impossible to raise a resulting trust so as to divest the legal estate of the grantee by the subsequent application of the funds of a third person to the improvement of the property, or to satisfy the unpaid purchase-money." Niver v. Crane. Opinion by Danforth, J.
[Decided Jan. 20, 1885.]
EVIDENCE-DECLARATION OF GRANTOR AS AGAINST GRANTEE-ILLEGAL EVIDENCE NOT HARMLESS-DEED -RESERVATION CANNOT BE PROVED BY PAROL.-(1) Evidence of declarations made by a former owner before he acquired title to the property as to what he intended or wanted to do when he should acquire it, and his motive in acquiring it, were, we think, inadmissible as against his grantee. It is only when the party making the declarations has at the time of making them the title to the property, that such declarations bind his successor in interest. We are not referred to any authority holding that declarations made before or after that time have that effect. An actual agreement between him and the party from whom he afterward obtained title might be effectual, but no such agreement was shown. A declaration to a stranger is mere hearsay. (2) The defendant was allowed to prove under objections that Phineas Hutchins was supposed to be worth $15,000, while he testified that he himself was not a man of property. The evidence as to the wealth of Phineas was clearly irrelevant and improper, and cannot be said to have been harmless.
Illegal evidence that would have a tendency to excite the passions, arouse the prejudices, awaken the sympathies, or warp or influence the judgment of the jurors in any degree, cannot be considered harmless" (Anderson v. R. Co., 54 N. Y. 334), and as remarked by Learned, J., in his dissenting opinion at General Term in the present case, "nothing could be better fitted to divert the minds of the jury from the true issue than a pathetic contrast between the widow of a rich brother and the poor defendant." (3) A reservation by parol of a life estate of the grantor, in case of a deed in fee, cannot be sustained on any principle. The proposition was not that the deed was to secure a debt which the defendant should have all his life to pay, but that independently of the question of mortgage the promise of a life estate was valid. This is attempted to be sustained by coupling it with the supposition that in consideration of and relying upon such promise, the defendant kept possession and made valuable improvements upon the laud, aud the case of