TRUSTS - STATUTORY ABOLITION OF RESULTING TRUSTS - RECOVERY ON THEORY OF CONSTRUCTIVE TRUST

Authors

Abstract

At common law if A pays the purchase price of land and the deed is made out to B as grantee, a trust arises in favor of A with B as Trustee. This type of trust is called a resulting trust, i.e., a trust resulting from the presumed intention of the parties. Where, in addition, an oral agreement exists between A and B that B is to hold the legal title for the benefit of A, the courts generally enforce the agreement as a resulting trust. Being a resulting trust it is unaffected by the Statute of Frauds, which excepts from its formal written requirements trusts which arise from implication or construction of law. Nearly one hundred years ago, however, these purchase-money resulting trusts were abolished by statute in New York, which statute was followed by enactments more or less similar in Michigan, Minnesota, Wisconsin, Kansas and Indiana. In view of such legislation, what legal consequences follow in New York when a person who pays the purchase price takes a deed in the name of another and the latter claims the beneficial as well as legal interest? The inquiry is suggested by a recent decision which impressed a trust upon the land in favor of the husband who furnished the consideration, took the deed in the name of his wife who promised orally to give him a deed upon demand, but died without carrying out the agreement, the husband having paid all taxes, insurance and interest and having received as his own all the rents therefrom. Before the Statute of Frauds such a trust would have been enforced as an express trust; after the Statute of Frauds but before the statute abolishing purchase-money resulting trusts it would probably have been enforced as a resulting trust ; now it is enforced as a constructive trust. How far will the court go on the theory of constructive trust?

Recommended Citation

TRUSTS - STATUTORY ABOLITION OF RESULTING TRUSTS - RECOVERY ON THEORY OF CONSTRUCTIVE TRUST, 28 Mich. L. Rev. 918 (1930).
Available at: https://repository.law.umich.edu/mlr/vol28/iss7/8