Opinion of the Court. justly be charged with knowledge of latent defects which no inspection or examination, at or before the sale, could possibly have disclosed. The jury have, in effect, found the false work to have been insufficient, in that the piles were not driven deep enough; that had they been properly driven, the work would have answered the purposes for which Hamilton purchased it; and that he could not have ascertained such defects in advance of an actual test made during the erection of the bridge. It must be assumed that the company knew, at the time of sale, that Hamilton could not, by inspection, have discovered the latent defects which were subsequently disclosed. And if it be also assumed, as it fairly may be, that Hamilton, being himself a bridge builder, knew that there might be latent defects in this false work, caused by the mode of its construction, and beyond his power by mere inspection to ascertain, it must not be overlooked that he also knew that the company, by its agents or servants, were or should have been informed as to the mode in which the work had been done. That he did not exact an express warranty against latent defects not discoverable by inspection, constitutes, under the circumstances, no reason why a warranty may not be implied against such defects as were caused by the mode in which this false work was constructed. In the cases of sales by manufacturers of their own articles for particular purposes, communicated to them at the time, the argument was uniformly pressed that, as the buyer could have required an express warranty, none should be implied. But, plainly, such an argument impeaches the whole doctrine of implied warranty, for there can be no case of a sale of personal property in which the buyer may not, if he chooses, insist on an express warranty against latent defects. All the facts are present which, upon any view of the adjudged cases, must be held essential in an implied warranty. The transaction was, in effect, a sale of this false work, constructed by a company whose business it was to do such work, to be used in the same way the maker intended to use it, and the latent defects in which, as the maker knew, the buyer could not, by any inspection or examination at the time, discover; the buyer did not, because in the nature of things he Syllabus. could not, rely on his own judgment; and, in view of the circumstances of the case, and the relations of the parties, he must be deemed to have relied on the judgment of the company, which alone of the parties to the contract had or could have knowledge of the manner in which the work had been done. The law, therefore, implies a warranty that this false work was reasonably suitable for such use as was contemplated by both parties. It was constructed for a particular purpose, and was sold to accomplish that purpose; and it is instrinsically just that the company, which held itself out as possessing the requisite skill to do work of that kind, and therefore as having special knowledge of its own workmanship, should be held to indemnify its vendee against latent defects, arising from the mode of construction, and which the latter, as the company well knew, could not, by any inspection, discover for himself. For the reasons stated, we are of opinion that the court did not err in the law of the case, and the judgment must be Affirmed. ALLEN & Another v. WITHROW & Another. ON APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE DISTRICT OF IOWA. Argued December 11th and 12th, 1883.-Decided January 14th, 1884. Deed-Equity-Frauds, Statute of-Iowa-Partnership-Statutes-Trust. 1. The facts in this case disclose no trust attached to the estate and property in the defendants' hands which a court of equity should enforce; at the best they show a promise-without consideration good or valuable—of a simple donation, to be subsequently made, with no relationship of blood or marriage between the parties, and therefore until executed, valueless. 2. A deed of real estate in blank in which the name of the grantee is not inserted, by the party authorized to fill it, before the deed is delivered, passes no interest. 3. Under the Statute of Frauds of Iowa in force when the transactions in controversy took place, a trust could not be created in relation to real estate, except by an instrument executed in the same manner as a deed of conveyance; but a trust of personalty could be created by parol, provided Opinion of the Court. the evidence of the trust was clear and convincing. Mere declarations of a purpose to create a trust were of no value, if not carried out. 4. Real estate owned by a partnership, purchased with partnership funds, is, for the purpose of settling the debts of the partnership, and of distributing its effects, treated in equity as partnership property. Bill in equity by heirs at law of Thusie M. Allen to enforce a trust in relation to real and personal estate claimed to have been made in her favor in her lifetime. Answer denying the trust; and cross-bill by one defendant asking that plaintiffs might be perpetually restrained from setting up their claim. Judgment below for defendants in the original suit and sustaining the cross-bill. Plaintiffs in original suit and defendants in cross-suit, appealed. Mr. C. C. Cole and Mr. B. F. Kretzinger for appellants. MR. JUSTICE FIELD delivered the opinion of the court. In November, 1875, one John F. Tracy, now deceased, executed to the defendant, Thomas F. Withrow, a deed of a large amount of property, real and personal, of great value, situated in Iowa. It is alleged that this deed, though absolute in form, was made in trust for one Thusie M. Allen, also now deceased, and the present suit is brought by her heirs-at-law to charge Withrow, as trustee, and compel him to account to them for the property. Withrow denies the alleged trust, and claims that he owns in his own right an undivided half interest in the property, and that the other undivided half belongs to his codefendant, Wm. L. Scott, as assignee of Tracy. Scott has filed a cross-bill setting up his title and praying that it may be established. The court below sustained the claims of both defendants and dismissed the bill, and the case is brought here on appeal from its decree. The facts which led to the execution of the deed in question, and upon which a trust is sought to be established, collected, so far as practicable, from a mass of conflicting testimony contained in a record of over 850 closely printed pages, are substantially as follows: Opinion of the Court. In the year 1868, when the Chicago, Rock Island & Pacific Railroad Company-a corporation created by the State of Illinois-was about to extend its road from Des Moines to Council Bluffs in Iowa, a company was formed, consisting of B. F. Allen, of Des Moines, Ebenezer Cook and John P. Cook, of Davenport in that State, to purchase land necessary for the stations and use of the railroad company between De Sota and Council Bluffs, and also other lands adjoining or near the several stations located by the engineer of the company. The agreement between the parties was at the time a verbal one, but in April, 1870, a memorandum was signed by them, giving its terms and reciting also the purchases which in the interval had been made. Among other things, it provided that Allen should furnish the money to make the purchases, and provide for the taxes and expenses; that the title to the property should be taken in his name as trustee for the joint account of the parties, and that the net proceeds should be divided between them as follows: one undivided half to Ebenezer Cook, one-fourth to Allen, and the remaining fourth to John P. Cook. The agreement also provided that Allen should keep an account of the amounts paid out by him, and of the sales, receipts, and expenses, so that from his books a statement might at any timę be made showing the condition of the property, the amount sold, and the prices received; that the sales should be made by John P. Cook and Allen on the best terms they could obtain, and by their joint action when practicable; that from the proceeds of the sales Allen should retain the interest on his advances, the taxes on the property, and the expenses incurred, and then pay the advances made for the purchase of the property; and that the money and property remaining in his possession, including notes and contracts, after such payments, should be regarded as net profits, and be divided in kind, or converted into money and then distributed, and in either event according to the respective interests of the parties as mentioned above. During this time Tracey was president of the railroad company, and though he is not named in the agreement, it is conceded that he was entitled to one-half of the interest represented by Ebenezer Cook, and had a right to control and dispose of it. Opinion of the Court. It appears that he had, previously to the formation of the land company, suggested to different parties that in case a litigation then pending, affecting the company, should terminate favorably, a good opportunity would be afforded to make a successful venture in the purchase and sale of land along the line of the road west of Des Moines; and that upon this suggestion the land company was formed. It appears, also, that in a conversation with Withrow, one of his counsel in the litigation referred to, upon the subject of a venture of this kind, Tracey had expressed a desire that his friends should be benefited by the venture; and that he, Withrow, should participate in it, advising him to bear this in mind in making out his bill for legal services. After the land company was formed, and the agreement made had been acted upon, Tracey was reminded by Withrow of this conversation, and of the understanding he had from it, that he was to have an interest in the venture. Tracey not only admitted a similar understanding on his part, but declared that Withrow had an interest in it, and in March, 1871, obtained from Ebenezer Cook a statement in writing to that effect. This statement, after referring to the agreement of the land company and the provision that one-half of the profits arising from the purchase and sale of real estate under it were to be his property; and reciting that it was understood that Withrow and one Johnson should have an interest in the profits of the venture, the amounts of which had not been specified, but were to be thereafter fixed by Tracey and himself, and that the remainder of said profits (if any) should be equally divided between Tracey and himself, declares that he, Cook, holds the interest specified in the agreement, and all amounts to be received thereon, in trust for the uses and purposes mentioned; that is to say, to pay from such receipt: to Withrow and Johnson such amounts, respectively, as should bė agreed upon as aforesaid, and to hold the one-half of the remainder in trust for Tracey, his heirs and assigns. Subsequently, in October, 1872, Withrow, for the nominal consideration of one dollar, executed to Tracey a transfer of his interest in this contract and declaration of trust. In December following, Johnson executed to Tracey a similar transfer upon a like consideration. |