mortgage (as in Jenkins v. Eldridge (1844) 3 Story, 181, Fed. Cas. No. 7,266; and McConnell V. Gentry (1907) 30 Ky. L. Rep. 548, 99 S. W. 278); and the promisee may claim that, as the money used was really his, a trust results in his favor (as in McBurney v. v. Wellman (1864) 42 Barb. (N. Y.) 390, affirmed in (1869) 1 Abb. App. Dec. 512, 43 How. Pr. 427; Miller v. Saxton (1806) 75 S. C. 237, 55 S. E. 310; and Bailey v. Harris (1857) 19 Tex. 108), or that, as the grantee could not have purchased the property on his own account, the promise upon the strength of which he obtained title must be deemed to have been fraudulently made, thereby raising a constructive trust (as in Jones v. Luffman (1919) 148 Ga. 770, 98 S. E. 262; Avery v. Stewart (1904) 136 N. C. 426, 68 L.R.A. 776, 48 S. E. 775; Seichrist's Appeal (1870) 66 Pa. 237; Hoover v. Strohm (1910) 44 Pa. Super. Ct. 177, and Peterson v. Hicks (1906) 43 Wash. 412, 86 Pac. 634).

The case of Hunt v. Roberts (1855) 40 Me. 187, hereinafter set forth, appears to be out of harmony with the foregoing. The case of Banes v. Morgan (1902) 204 Pa. 185, 53 Atl. 754, hereinafter set forth, in which it was held that there was no implied trust, probably turned on the fact that the court did not regard the transaction. as amounting to a loan.

In Jenkins v. Eldredge (1844) 3 Story, 181, Fed. Cas. No. 7,266, where complainant, who had entered into a contract to purchase land and had begun to build thereon, finding himself without sufficient funds to pay for the land and complete the building, enlisted the aid of the defendant, and agreed that, to enable him to raise money on a mortgage, the property should be conveyed to him, it was held that as between complainant and defendant the conveyance was a mere security for the advances and expenditures of the defendant and the compensation for his services.

Where a purchaser of land took from the vendor a bond for title, and, after paying half of the purchase price and being unable to pay the balance thereof, agreed with a third person that the latter should pay the

balance due on the purchase price, that he and the original purchaser should own the land as tenants in common, and that a deed should be taken conveying the property to them; but the third person, after paying the remaining half of the purchase money, had the property conveyed to a stranger, and by the latter conveyed to himself, an implied trust arose in favor of the original purchaser, who had surrendered his bond for title when he made the agreement first referred to, and he was entitled to a decree establishing his right as tenant in common and an owner of an undivided half interest in the property. Jones v. Luffman (1919) 148 Ga. 770, 98 S. E. 262.

In Stern v. Howell (1925) 160 Ga. 261, 127 S. E. 776, it was held that where one bid off a tract of land at judicial sale, paid a small part of the purchase money and borrowed from another a sum sufficient to pay the balance, under an agreement that the deed to the property shall be made to the lender to secure such loan, an inplied trust arises in favor of the bor

rower.

One who, having purchased and partly paid for land at a commissioner's sale, directed a conveyance to a third person, may show by parol that the land was conveyed as security for money advanced to him. McConnell v. Gentry (1907) 30 Ky. L. Rep. 548, 99 S. W. 278.

In McBurney v. Wellman (1864) 42 Barb. (N. Y.) 390, affirmed in (1869) 1 Abb. App. Dec. 512, 43 How. Pr. 427, it was held that where one having a contract for the purchase of land has procured another to advance the unpaid purchase money and take a conveyance of the land for his security, the latter holds subject to a resulting trust.

In Cloninger v. Summit (1856) 55 N. C. (2 Jones, Eq.) 513, where one who had a contract for the purchase of land, being unable to make his payments, procured a friend to advance the money and take the deed to himself as security, it was held that the Statute of Frauds did not preclude the enforcement of the agreement to reconvey upon repayment, the

contract not being one to sell or convey land. The court said: "The parties did not occupy the relation of vendor and vendee. The defendant did not agree to sell the land to the plaintiff; for at the time of this arrangement, he did not have the land, or any interest therein, to sell; nor was the plaintiff to pay a price for it. But the plaintiff's equity rests upon the idea of enforcing the execution of a trust; and the facts show that the relation of the parties was that of trustee and cestui que trust."

See also, to the same effect, Cohn v. Chapman (1867) 62 N. C. 92, 93 Am. Dec. 600.

A trust arises by operation of law where one who had a contract for the purchase of land, not being able to pay the stipulated price, procures another to buy the land for him and give him additional time to pay the purchase money. Avery V. Stewart (1904) 136 N. C. 426, 68 L.R.A. 776, 48 S. E. 775. The court said: "If the legal title is obtained by reason of a promise to hold it for another, and the latter, confiding in the purchaser and relying on his promise, is prevented from taking such action in his own behalf as would have secured the benefit of the property to himself, and the promise is made at or before the legal title passes to the nominal purchaser, it would be against equity and good conscience for the latter, under the circumstances, to refuse to to perform his solemn agreement and to commit so palpable a breach of faith."

In Seichrist's Appeal (1870) 66 Pa. 237, one who had a contract for the purchase of land, being unable to pay the purchase money, agreed with another to sell him a certain defined portion, provided such other would pay off the balance of the purchase money. The original vendor declined to make two deeds, but suggested that the subvendee, on paying the balance of the purchase money to him, could take a deed for the whole and afterward convey to the original vendee his part when he should pay for it. This was accordingly done; but subsequently the grantee denied the bargain and refused to convey. It was

held that as he had procured the title, which he could not have obtained except by a confidence reposed in him, he was a trustee ex maleficio.

Where one having a contract for the purchase of land procures another to advance the purchase money, and as security therefor to take the title in his own name under a verbal promise to convey the land to the vendee upon repayment, a violation of such promise creates a trustee ex maleficio. Hoover v. Strohm (1910) 44 Pa. Super. Ct. 177.

In Miller v. Saxton (1806) 75 S. C. 237, 55 S. E. 310, where one having a bond for title agreed with another that if he would pay the balance of the purchase money, they would divide the land in proportion to what each paid, and the latter took a deed to the whole tract in his own name, it was held that there was a resulting trust in favor of the other party.

In Bailey v. Harris (1857) 19 Tex. 108, where one loaned money to enable another to pay for land purchased by him, taking the deed to himself, with the purchaser's consent, upon a verbal agreement that the latter should have five years to repay the money and take the land, it was held that as the Texas Statute of Frauds does not require an express trust to be evidenced by writing, there was a valid express trust; and that the transaction also gave rise to a resulting trust, since, the purchase money having been advanced as a loan it was the money of the original purchaser.

In Peterson v. Hicks (1906) 43 Wash. 412, 86 Pac. 634, where one having an option to purchase at a bargain, but no money, another agreed with him to furnish the money, take the title, and give him a bond for a deed in consideration of the repayment of the amount invested and $100 in addition, and took title in the name of his wife, whose money was invested, and she did not give a bond at the time and subsequently said that she had concluded to keep the property for herself, the court, although basing its conclusion that the agreement was enforceable, though not in writing, upon the ground that

the act of the promisee in moving into the house and making improvements was such part performance as to take the case out of the Statute of Frauds, went on to say that, apart from the part performance, a constructive trust would arise in his favor, because the promisor could not have purchased the property on his own account; and that it was immaterial whether or not the wife to whom the property was conveyed knew of her husband's promise; since, having ratified his act in investing the money, she could not renounce his act in making the promise. However, in Farrell v. Mentzer (1918) 102 Wash. 629, 179 Pac. 482, it is said, that the statement made in the foregoing case, that a a constructive trust arose in favor of the plaintiff, "is obiter and in addition misstates the law upon this subject, for the reason that the fraud that is necessary to create a constructive trust is not, as we have already stated, a mere refusal to comply with the terms of the contract. The decision can be sustained on the doctrine of part performance of an express trust, but is not authority on the question of constructive trusts.'

But in Banes v. Morgan (1902) 204 Pa. 185, 53 Atl. 754, where persons having an option to repurchase land formerly owned by them and sold on foreclosure procured another to advance money and take title in his own name, he orally agreeing that if they would raise the money within three years he would convey it to them, it was held that there was nothing to raise a trust by implication.

And in Hunt v. Roberts (1855) 40 Me. 187, it was held that a demurrer was properly sustained to a bill asserting that plaintiff and one Dyer were jointly interested in a bond for the conveyance of land; that the defendant wishing to become interested therein, it was agreed that, in consideration of his furnishing the money for the first payment, he should have an undivided half of the land, and should hold title to the other half as security for money necessary to pay for it, which he was to loan the original vendees upon the security of the land; and that he was to give a bond

to them, conditioned to convey to each a quarter of the tract whenever he should be fully paid and indemnified for the money advanced; that it was agreed that Dyer with a third person, acting for those interested, should call on the vendor with the first payment and close up the contract; and that the title should be transferred to the defendant; that Dyer took a deed to himself and gave his note secured by mortgage on the property for the balance of the purchase money; that Dyer being insolvent and it being feared that his equity of redemption might be attached, he was induced to execute a release to defendant, but that defendant thereafter refused to execute any bond to his associates,on the ground that, it having been agreed that defendant should take title, such title was not obtained by fraud.

IV. Agreements to buy, hold, resell, and account for proceeds.

It has been held that an oral agreement to pay for and take over complainant's real estate sold on foreclosure, and hold it until a desirable sale thereof can be made by complainant, and then to account to complainant for the proceeds of such sale, is within the Statute of Frauds, and not enforceable. McNeill V. McNeill (1917) 204 Ill. App. 287.

And in Grantham v. Conner (1916) 97 Kan. 150, 154 Pac. 246, it was held that a parol agreement between one who had obtained an option to purchase land and another, that the latter would buy the land, pay the full purchase price, and also the amount paid by the first party to obtain the option, taking the title in his own name, and that he would, when the land was sold, pay the first party one half of any profit that might be made thereon, did not create a valid express trust in favor of the first party.

But in Byers v. Locke (1892) 93 Cal. 493, 27 Am. St. Rep. 212, 29 Pac. 119, where the owner of real estate which had been sold under foreclosure orally agreed with another that the latter should advance the sum necessary to redeem it from the sale. that, for the purpose of enabling him

to do so, the mortgagor would convey the premises to the one so advancing the money, who was to hold the property until it might be sold, and that upon the sale of the premises he would, after deducting from the proceeds the money so advanced, with interest, pay the balance to the mortgagor, it was held that the Statute of Frauds did not preclude a suit for the recovery of such balance, the contract or agreement upon which the action was based not being an agreement for the sale of land or the creation of any interest therein.

See also, as holding that an action for profits made by the sale of land is not precluded by the Statute of Frauds although the agreement of the parties was not in writing, Schrager v. Cool (1908) 221 Pa. 622, 70 Atl. 889.

In Eadie v. Hamilton (1915) 94 Kan. 214, 146 Pac. 323, it appeared that the owner of a mortgage assigned it to her brother, who agreed to foreclose it and purchase the land at the foreclosure sale, and hold it for his sister until a favorable opportunity should present itself to sell the land, when he was to account to her for the proceeds, less all expendiexpenditures; and that the brother carried out this program, but died without having rendered an account to his sister, who presented a claim against his estate. It was held that the case was not one involving simply the breach of an oral contract relating to land, but one in which the law itself imposed the trust upon the situation created by the conduct of the parties, and, therefore, that the sister's claim was properly provable by parol evidence.

V. Agreements to negotiate purchase as agent.

a. In general.

1. Generally.

This subdivision does not include cases in which the purchase was to be made at a judicial or tax sale (for which, see subdivision X., infra); nor cases in which the purchase was to be made for the joint benefit of the parties (for which, see subdivision

VII., infra). Cases in which the agreement was to buy property and turn it over to another may be found in subdivision II., supra.

There is a conflict of opinion as to whether an agent verbally employed to buy land for another, but who purchases it for himself with his own funds, may be compelled to convey it to his principal. Some courts seem to have felt that to let in oral proof that the purchase was to have been made for another is virtually to abrogate the Statute of Frauds; while others regard the agreement as creating a relationship of trust and confidence a violation of which will give rise to a constructive trust, to which the Statute of Frauds does not apply. The argument against the existence of a constructive trust is that there is nothing more than a breach of contract, which concededly is not such fraud as will give rise to a constructive trust. The counter argument is that the breach of the agreement shows that the agreement was made by the agent, with actual fraudulent intent to obtain the property for himself. And see Havner Land Co. v. MacGregor (1915) 169 Iowa, 5, 149 N. W. 617, where it is said that a breach by an agent of his fiduciary duty toward his principal is itself a fraud.

In Matney v. Yates (1917) 121 Va. 506, 93 S. E. 694, it is said that the confusion and conflict among the cases upon the question whether an agent verbally employed to buy land for another, and who purchases in his own name and with his own funds, and then repudiates the agency, may be compelled to convey to the principal, arise "from a failure to apply to every case the test of the very simple. question, Was the contract in its essence and effect one of agency, or was it one for the purchase of real estate? If it was the former, it creates a trust relation, is not within the Statute of Frauds, and can be established by parol; if the latter, the parties are to that extent dealing with each other as principals, and the contract is within the statute, and can only be established by such a writing as will meet the requirements thereof."

That one who has orally agreed to

New Jersey. Wallace v. Brown (1885) 10 N. J. Eq. 308; Nestal v. Schmid (1878) 29 N. J. Eq. 458; but compare Rogers v. Genung (1909) 76 N. J. Eq. 306, 74 Atl. 473 and Harrop v. Cole (1914) 85 N. J. Eq. 32, 95 Atl. 378, affirmed in (1916) 86 N. J. Eq. 250, 98 Atl. 1085.

New York.-Wheeler v. Reynolds (1876) 66 N. Y. 227; Bauman v. Holzhausem (1882) 26 Hun, 505; Wheeler v. Hall (1900) 54 App. Div. 59, 66 N. Y. Supp. 257.

Pennsylvania.-Peebles v. Reading (1821) 8 Serg. & R. 484; Robertson v. Robertson (1839) 9 Watts, 32; Kellum v. Smith (1859) 33 Pa. 158; but see Morey v. Herrick (1851) 18 Pa. 123.

Washington.-Cushing v. Heuston (1909) 53 Wash. 379, 102 Pac. 29.

V.

West Virginia. Nash v. Jones (1896) 41 W. Va. 769, 24 S. E. 592. England.-Bartlett Pickersgill (1760) 4 East, 577, note, 102 Eng. Reprint, 952, note; Horsey v. Graham (1869) L. R. 5 C. P. 9; but compare Taylor v. Salmon (1838) 4 Myl. & C. 134, 41 Eng. Reprint, 53; Cave v. Mackenzie (1877) 46 L. J. Ch. N. S. 564; and Heard v. Pilley (1869) L. R. 4 Ch. 548.

But it is to be noted that the rule is otherwise where the person commissioning another is already the equitable owner of the property, as in the case of one having an equitable title and wishing to procure the legal title, or holding under a defective title which he wishes to cure by procuring a conveyance from another (see subd. VI., infra); or where the property is about to be sold at a judicial sale, at which the owner procures another to bid it in (see subd. X., infra).

The contrary view, that the Statute of Frauds does not preclude the establishment by oral evidence of an agency to purchase land; and that a purchase, in violation of the duty thus assumed, gives rise to a constructive trust, or, as it is sometimes termed, a trust ex maleficio, is supported by the following cases: Alaska. Hellenthal v. Sloane (1915) 5 Alaska, 362.

Arizona.-Zeckendorf v. Steinfeld (1909) 12 Ariz. 245, 100 Pac. 784, de