NEEL'S EX'R et al. v. NOLAND'S HEIRS. (Court of Appeals of Kentucky. Oct. 28, 1915.) 1. TRUSTS 63-RESULTING TRUST-PAYMENT OF CONSIDERATION FOR CONVEYANCE TO ANOTHER-STATUTE.

Ky. St. § 2353, relating to resulting trusts, abolishes the old doctrine of resulting trusts, except in the two expressed cases where title is taken in the name of the nominal purchaser without the consent of the real purchaser, and where the grantee, in violation of some trust, buys the land with the money or property of another.

[Ed. Note.-For other cases, see Trusts, Cent. Dig. 90; Dec. Dig. 63.]

2. TRUSTS 89-RESULTING TRUST-WEIGHT AND SUFFICIENCY OF EVIDENCE.

To establish a resulting trust by parol evidence as against the holder of the legal title to property, the proof of all the essential facts and circumstances must be clear, convincing, and satisfactory, and of such a character as to disclose the exact rights and relations of the parties and take the matter out of the realm of conjecture and presumption, especially after a long lapse of time.

abandonment was not devested out of the orig-
inal owner, who might obtain its restoration.
[Ed. Note. For other cases, see War, Cent.
Dig. §§ 105, 106, 108; Dec. Dig. 21.]
6. LIFE ESTATES
SUMPTION.

23-REINVESTMENT-PRE

Under a deed of a farm, reciting the husband's payment of the purchase price, made to the wife and her heirs for the separate use of herself and any children thereafter born of the marriage, and enabling her, with the husband's written consent, to sell any part of the land, and to reinvest any part of the proceeds, as she might deem expedient, which, if reinvested, was to be held for the same purposes, and on her survival of her husband, giving her such privilege without his consent, the proceeds to be reinvested for such purposes, and on her decease the property, or its proceeds if reinvested, to go to the husband or his heirs on failure of issue, and in fee simple to any issue then living, no presumption would be indulged, in the absence of evidence thereof, that money from the sale of a part during the husband's lifetime was received or spent by the wife, or reinvested under the clause permitting, but not requiring, reinvestment during the husband's lifetime. [Ed. Note.-For other cases, see Life Estates, Cent. Dig. §§ 21, 42-45; Dec. Dig. 23.]

[Ed. Note. For other cases, see Trusts, Cent. 7. LIFE ESTATES 23-CONDITION OF DEED Dig. §§ 134-137; Dec. Dig.

89.]

3. TRUSTS 89-RESULTING TRUST-SUFFI-
CIENCY OF EVIDENCE.
Evidence, in an action by the executor and
devisees of a decedent to establish a resulting
trust in a farm, on the theory that certain bales
of cotton originally belonged to the decedent's
first husband; that his title thereto was devest-
ed and placed in the federal military authorities
by its seizure, that such authorities then gave
it to decedent; that she sold it and turned over
the proceeds of sale to her husband for invest-
ment; and that he, in violation of the trust and
without her consent, bought the farm and took
the deed in her name for life only, with a re-
version to his heirs-held not of that clear, full,
and satisfactory character requisite to establish
such a trust.

[Ed. Note.-For other cases, see Trusts, Cent. Dig. §§ 134-137; Dec. Dig. 89.]

4. HUSBAND AND WIFE 11-WIFE'S PROPERTY HUSBAND'S REDUCTION TO POSSESSION.

-EXPENDITURE ON IMPROVEMENTS.

Under such deed, the wife's expenditure of the amount received from a sale of part of the land, after her husband's death, in making permanent improvements on the farm, to that extent satisfied the terms of the deed as to rein

vestment.

[Ed. Note.-For other cases, see Life Estates, Cent. Dig. §§ 21, 42-45; Dec. Dig. 23.] 8. LIFE ESTATES 17-IMPROVEMENTS-RECOVERY AGAINST REMAINDERMEN.

A life tenant is not bound to make any permanent improvements on the estate; and, if he makes them, it will be presumed that they are for his own benefit, and he cannot recover anything therefor from the remaindermen or reversioners.

[Ed. Note.-For other cases, see Life Estates, Cent. Dig. §§ 37, 38, 42; Dec. Dig. 17.]

Appeal from Circuit Court, Shelby County. Action by Pearce Noland's Heirs against Bettie Neel's Executor and others. Judgment for plaintiffs, and defendants appeal and plaintiffs take a cross-appeal. Affirmed on the original and the cross-appeals.

Under the law in Kentucky in 1864 prior to the Married Women's Act of 1894 (Laws 1894, c. 76), the husband, by virtue of his marital rights, might reduce his wife's general estate to possession and thereby make it his own, so that money received by the wife from the sale of her cotton and her other money, used by the husband in the purchase of a farm taken in her name, with reversion to his heirs, was re-ville, for appellees. duced to possession.

[Ed. Note. For other cases, see Husband and Wife, Cent. Dig. §§ 39, 40, 47-57; Dec. Dig. 11.1

O'Rear & Williams, of Frankfort, for appellants. Hudson & McKay, of Vicks! urg, Miss., and Willis, Todd & Bond, of Shelby

MILLER, C. J. In this action the appellants, who are the executors and devisees of 5. WAR 21-ENEMY PROPERTY-STATUTES. Bettie Neel (formerly Mary Elizabeth NoNo act of the military forces, or of any land), are seeking to establish a resulting officer thereof, in the Civil War could, under the trust, in their favor, to a farm of 200 acres law, devest a citizen of his title to cotton, since private property on land not used in aid in Shelby county. The facts upon which the of the war is not subject to confiscation by the claim is based are wide in range, and neburules of international law, which rule was rec- lous in character. Substantially, they are as rec-lous ognized by the Captured Property Act (Act Cong. March 3, 1863, c. 120 [12 Stat. 820]), declaring that the title to any property except that used in actual hostilities could not be devested in the insurgent states unless by judgment after due legal proceedings, so that the title to the proceeds of cotton coming into possession of the federal government by capture or

follows:

In May, 1858, Pearce Noland, a prosperous young planter, living near Vicksburg, in Warren county, Miss., married Mary E. McGaughey, of Shelby county, Ky. They immediately went to live upon his Mississippi

plantation, and continued to reside there un- [livered to the Nolands was a part of 114 til late in October, 1863. Upon the surrender bales taken from the plantation of J. & M. of Vicksburg on July 4, 1863, to the federal Britton. The 69 bales were shipped to Yeatforces under Gen. Grant, the surrounding man, United States treasury agent at Memcountry was overrun and largely devastated phis, by C. A. Montross, treasury agent at by the troops. By general order No. 50, is- Vicksburg, per the steamer J. S. Pringle, on sued by Gen. Grant at Vicksburg on August October 24, 1863, before Pearce Noland's 1, 1863, it was provided that persons having mark ("P. N.") could be put on the bales. cotton or other produce not required by the Shortly after the 69 bales were received by army would be allowed to bring the same to Yeatman at Memphis, an order was presented any military post within the state of Missis- to him by the agent of the Nolands, signed by sippi, and abandon it to the agent of the Gen. Grant, for the 69 bales of the cotton Treasury Department at said post, to be dis- that had been shipped from Vicksburg. At posed of in accordance with such regulations first Yeatman declined to surrender the cotas the Secretary of the Treasury might es- ton; but the agent subsequently returned, tablish. Pearce Noland had 69 bales of cot- accompanied by Brigadier General James C. ton on his plantation, near the Big Black Veatch, the commander of the post at Membridge, and within shipping distance of the phis, who insisted on the delivery of the cotrailroad running out of Vicksburg, eastward- ton pursuant to Gen. Grant's order; and, ly. This railroad had been taken over by Gen. Veatch having indorsed his name upon the federal government, and was operated the order, Yeatman surrendered the cotton. as a United States military railroad. Pearce According to Yeatman, Mrs. Noland did not Noland was then in delicate health, although claim this cotton as her own, but said that it is not made clearly to appear to what ex- 69 bales of her cotton had been taken, and tent he was disabled from attending to busi- that Gen. Grant had given her an order for ness. It is claimed by the appellants that the delivery of the same number of bales, out Pearce Noland's cotton was seized by the of some other lot. The remaining 45 bales of federal troops and carried to Vicksburg. The the 114 bales were shipped to Cincinnati, and testimony, however, as to the seizure is sold for 784 cents per pound. The Nolands quite vague and indefinite. The first bit of departed with their 69 bales, and presumareliable evidence relating to the story of bly sold it for about the same price, although Pearce Noland's 69 bales of cotton is found there is nothing in the record to show precisein the following receipt found in the archives ly what they received for it. Pierce Noland of the War Department: and his wife thereupon returned to Shelby county, and spent the following winter of 1863-64 with Mrs. Noland's mother.

"Received, Vicksburg, Mississippi, October 8th, 1863, of Mr. P. Noland, three hundred and forty-five dollars, being freight on 69 bales cotton transported to Vicksburg by United States military railroad.

"J. D. Bingham,

"Lieut. Col. and Chief Q. M. Dept. Tenn." It will be observed that this receipt does not indicate that the 69 bales of cotton in question had been seized by the federal troops. On the contrary, the fact that Pearce Noland paid $345 freight thereon to Vicksburg would raise the presumption that he was the shipper of his cotton. However that may be, the Nolands experienced quite a good deal of trouble in getting their 69 bales shipped out of Vicksburg.

It is contended by the appellants that Pearce Noland, being a southern sympathizer, could accomplish nothing toward liberating his cotton, and that Mrs. Noland, through her personal efforts with Gens. Grant and Logan, finally succeeded in getting 69 bales of cotton turned over to her, as appears from the following permit:

"Headquarters, Commander of the Post.

"Vicksburg, Miss., October 12, 1863. "Mrs. P. Noland has permission to ship 69 bales of cotton marked (P. N.) to Memphis, Tennessee.

"By order of Maj. Gen. John A. Logan.

"Jno. S. Hoover, Lieut. and A. D. C." Evidently Pearce Noland's 69 bales became intermingled with other cotton beyond identification, and that the 69 bales of cotton de

On January 23, 1864, Pearce Noland bought the farm of 303 acres (of which 200 acres are now in controversy), from Fielding Neel and J. A. Glass, for $21,249.80. Of this sum he paid $14,000 in cash, and gave his four notes for $1,812.45 each, for the remainder of the purchase money. The deed recited that Pearce Noland had made the cash payment of $14,000, and had executed his four notes for the deferred payments. The deed contained the following clauses:

"To have and to hold the above two described tracts of land, together with all and singular the appurtenances thereunto belonging unto the said Mary E. Noland, her heirs and assigns forever, for and to the sole and separate use and benefit of the said Mary E. Noland and such her husband, Pearce Noland, and with the conchildren as may hereafter be born unto her by sent of her said husband given in writing the said Mary E. Noland shall have the right and privilege to sell, transfer, exchange or dispose of all or any part of the land hereinbefore mentioned, for such price and to such person or persons as she may desire, and to reinvest all or any portion of the proceeds or not, as she may deem most expedient, but if reinvested to be held by her as aforesaid; and, for the purpose aforesaid, and in case she should survive her said husband, she shall have such rights and privileges without his consent so given, the proceeds in this event shall be reinvested for the purposes hereinbefore mentioned.

"This indenture further witnesseth: That upon the decease of the said Mary E. Noland, the above property in whole or in part or the proceeds thereof if reinvested shall go to the

said Pearce Noland or his heirs, in the event there is no issue of the body of the said Mary E. Noland by her husband, Pearce Noland, living at the time of her death, but if there be such issue then living then the same shall go in fee simple to such."

land's death. The remainder of his testimony is immaterial.

The third and last witness is Miss Emma McGaughey, a niece of Mrs. Neel, who frequently saw her aunt while she lived with the witness' grandmother after her return to Kentucky in the winter of 1863-64. The witness was then less than 16 years of age. Her testimony consists of a narrative of fam

Pearce Noland occupied the Kentucky farm, as a home, from 1864 until his death in 1876. Under the power thus given her, Mrs. Noland sold 103 acres of the farm to Reuben Scobee in February, 1875, for $4,-ily lore, and is largely concerned with the 120, and Pearce Noland signed the deed in indication of his consent thereto. Pearce Noland died in 1876, leaving no issue, and his widow, Mary E., married Fielding Neel in the winter of 1878. She was ever after. wards known as "Bettie Neel." Fielding Neel died on September 21, 1881; and his widow, Bettie Neel, died on October 8, 1913, leaving a will by which she devised the Shelby county farm to her nieces and nephews, who are the appellants.

This action was instituted by the heirs at law of Pearce Noland against the devisees under Bettie Neel's will, to recover the farm in question. The devisees claim that, Bettie Neel having furnished the consideration, and the deed having been taken in the form it was taken, without her consent, a trust thereby resulted to her, whereby she held and owned the farm in question; and, the circuit court having decided against them they peal.

The appellants introduced only three nesses to sustain their claim.

war conditions of the South, which she acquired from hearsay. She says her parents and other relatives told her that Pearce Noland's cotton had been confiscated; that Mr. and Mrs. Noland and the witness' father had obtained an order for the cotton and transportation for it and the family to Memphis in 1863; and that both Mr. and Mrs. Noland and the witness' father went to Memphis, sold the cotton, and collected the proceeds. Miss McGaughey is the only witness by whom appellants attempted to prove that Pearce Noland agreed to invest the cotton money in the farm and take the title to his wife; and her testimony is found in the following ques

tions and answers:

tween Mr. P. Noland and his wife, Bettie Noland, "Q. 40. What was the agreement, if any, beconcerning that investment? State what they each said to the other so far as you heard it, or heard Mr. P. Noland recite it? A. I know of no ap-ous times, as to the safest investment. My aunt agreement, but heard them discussing, at vari

seemed to prefer investing in a farm, and they wit-looked at several and decided to buy, which he did. Q. 41. Relate the circumstances of the investment by Mr. P. Noland in the farm bought John T. Ballard testified that he wrote the from Neel and Glass, in Shelby county, Ky., deed in 1864, in the presence of Pearce No- January 7, 1864, so far as you heard Mr. P. land, the grantee, and Neel and Glass, the Noland state them to his wife, Bettie Noland, or as she may have stated them in Mr. P. Noland's grantors therein; that Pearce Noland direct-presence and hearing. A. I was at my granded him to add the clausé which created a mother's, in the living room with my parents, remainder in the heirs of Pearce Noland upon grandmother, and my aunt Mrs. Noland. Mr. the failure of issue of his marriage with Mary E. Noland; that Pearce Noland told him he had paid the $14,000 in cash; and that when the witness suggested to Pearce Noland that he had already given the farm to his wife to do with as she pleased, and to sell and to reinvest the proceeds as she pleased, Pearce Noland answered that he wanted the reversionary clause added to the deed, and it was done.

Ballard further testified that James McGaughey, a brother of Bettie Neel, was the first to notify her, in 1881, after the death of her second husband, Fielding Neel, of the reversionary clause in the deed. It is claimed she did not know of it at the time the deed was made, or at any time before 1881. But Ballard's testimony upon this point is but a repetition of what James McGaughey told him.

that he had bought the farm from Neel and Noland returned from town and told his wife Glass for her, and had Mr. John Ballard write the deed in her name, and record it."

She further testified that her aunt did not know, at the time of the purchase of the Shelby county farm, that the title had been taken to her for life only, with remainder to the heirs of Pearce Noland upon failure of issue. But it should not be overlooked that practically all of her testimony, with the exception of that part which related to the statement of Pearce Noland to his wife at the time he bought the farm, is hearsay given 50 years afterwards. Furthermore, the statement attributed to Pearce Noland that he had bought the farm for his wife, and had taken the deed in her name, was not inconsistent with the deed as it was written, since it did convey the land to her upon the reasonable conditions therein stated.

John R. Deering, the executor and principal It appears that Pearce Noland subsequentdevisee under the will of Bettie Neel, iden- ly became insolvent through endorsements for. tified a diary which Pearce Noland had kept, his brothers; and, at the time the Kentucky in which he spoke of the farm in controversy farm was bought, his Mississippi plantation as "my farm," and further testified that Mrs. was, by reason of war conditions, an incumNeel spent exceeding $850 for improvements brance rather than an asset. And there is

Mrs. Noland certainly knew the provisions of the deed which she, at first, claimed was a mistake, as early as 1881, 31 years before her death, she never took any action towards correcting the mistake, or asserting her alleged title.

and wife, or father and son, the evidence must be positive and free from all ambiguity; and loose and general expressions of intention, in common conversation, acknowledging a general obligation, etc., will not be sufficient."

See Devlin on Real Estate (3d Ed.) vol. 2, § 1183, to the same effect.

The argument of counsel for appellants In the late case of May v. May, 161 Ky. rests upon the following propositions: (1) That the 69 bales of cotton originally be-ered at length. In that case one Allen Leslie, 114, 170 S. W. 537, the question was considlonged to Pearce Noland; (2) that his title in 1847, conveyed a tract of land to his sonthereto was devested, and placed in the fed-in-law Thomas P. May, the deed reciting the eral military authorities by the seizure of the cotton; (3) that Gen. Grant then gave the cotton to Mrs. Noland; (4) that she sold it and turned over the proceeds of sale to her husband for investment; and (5) that he, in violation of the trust, and without her consent, bought the Shelby county farm and took the deed in her name, for life only, instead of

in fee.

consideration to be the love and affection which the grantor had for his daughter, the wife of May, and $1,100 in cash paid by Thomas P. May. The deed contained no restrictions upon the title, but certain grandchildren of Thomas P. May, being dissatisfied with the provision made for them by their grandfather's will, brought an action, claiming a resulting trust for the benefit of the children and heirs at law of their grandmother, who was the wife of Thomas P. May. The opinion called attention to the fact that it had not been shown that the grandmother had ever claimed the land was held in trust for her; and there, as here, the deed truly recited that the cash payment had been made by the husband. Allen Leslie lived 30 years after making the deed; in the case at bar Pearce Noland lived twelve years after the deed was made to the Shelby county farm, This statute abolishes the old equitable doc- and Mrs. Noland lived forty-nine years theretrine of resulting trusts except in two cases: after. After conceding that a resulting trust (1) Where the title is taken in the name of might be established by parol proof, and that the nominal purchaser without the consent of numerous cases so holding appear in the the real purchaser; and (2) where the gran- books, the court, in the May Case, quoted tee, in violation of some trust, buys the land with approval the following passage from the with the money or property of another. Fou-opinion in Nelson v. Nelson, 96 S. W. 794, shee v. Foushee, 163 Ky. 524, 173 S. W. 1115. [2] In view of the well-established doctrine in this jurisdiction upon the subject of resulting trusts, we hardly deem it necessary to again review the authorities, at length. It will be sufficient to point out the general rule, and to refer merely to the leading cases upon the subject, which are uniform in their scope and application. In 39 Cyc. 166, the rule is stated, as follows:

[1] Section 2353 of the Kentucky Statutes under which appellants claim a resulting trust, reads as follows:

"When a deed shall be made to one person, and the consideration shall be paid by another, no use or trust shall result in favor of the latter, but this shall not extend to any case in which the grantee shall have taken a deed in his own name without the consent of the person paying the consideration, or where the grantee, in violation of some trust, shall have purchased the lands deeded with the effects of another person."

29 Ky. Law Rep. 885:

"But these were cases in which it was clearly made to appear, either that the deed to the land conveyed was received by the grantee under an agreement with the grantor, or one paying the third person, or where the grantee in violation consideration, to hold the title in trust for a of a trust purchased the land with the means of another. There are yet other cases in which, upon parol evidence of a secret trust in behalf of an insolvent debtor, created by his act in conveying, or causing to be conveyed, to another property which, but for such conveyance, would be liable for his debts, the courts, at the suit of creditors, have declared the conveyance a fraud upon them, and subjected the property to the payment of his debts."

In the May Case, the court also quoted from Devlin on Real Estate (3d Ed.) § 1183, as follows:

"In order to establish a resulting trust by parol evidence, as against the holder of the legal title to property, the proof of all the essential facts and circumstances must, as a general rule, be clear, full, convincing, and satisfactory, and of such a character as to disclose the exact rights and relations of the parties, and take the matter out of the realm of conjecture or presumption, especially after a long lapse of time; and where the evidence is uncertain, conflicting, doubtful, or unsatisfactory, or is capable of reasonable explanation on a theory other than the existence of a resulting trust, no trust will be held to be established. The language used by the courts, however, in stating this rule has not been by any means uniform; but it has been variously stated that the proof must be clear and unequivocal, most convincing and ir-ing in all the cases that, where a right or title refragable, clear and unquestionable, clear and undoubted, or so clear, strong, and unequivocal as to banish every reasonable doubt of the existence of such trust; or if the evidence is wholly by parol, that it should be received with great caution. Thus to raise a trust between members of the same family, as between husband

"As it is sought, in attempting to establish a resulting trust, to raise an equity superior to the deed, and thus give it an effect not apparent upon its face, the proof that one other than the grantee is beneficially interested must be clear and convincing. We recognize the doctrine to the fullest extent, and such is the uniform hold

is claimed against a writing, in this or any other class of cases, where it is permitted at all, it must be sustained by proof of the most convincing and irrefragable character. The courts have been deeply impressed with the danger of this kind of proof, as tending to perjury and insecurity of paper titles. Kent and other eminent

judges regret that the doctrine was ever intro- | St. Rep. 430; Mitchell v. Violett, 104 Ky. duced, as it opens a wide door to frauds and 77, 47 S. W. 195, 20 Ky. Law Rep. 378; Philperjuries, which the statute was intended to close. * * * This rule is based upon the lips v. Farley, 112 Ky. 837, 66 S. W. 1006, soundest legal principles, for the parol proof 23 Ky. Law Rep. 2201; Helm v. Board, 114 must, of necessity, be the testimony of witnesses Ky. 289, 70 S. W. 679, 24 Ky. Law Rep. 1037; as to what the parties have said or verbally Bennett v. Bennett, 134 Ky. 444, 120 S. W. agreed to a class of testimony notoriously weak -and the fact to be overturned is a writing, the 372; Fowler v. Fowler, 138 Ky. 326, 127 S. best evidence as to where the legal title is." W. 1014.