Article 2. CREATION AND VALIDITY OF EXPRESS TRUSTS  

JUDICIAL DECISIONS
 
EDITOR'S NOTES. --In light of the similarity of the statutory provisions, decisions under former Civil Code 1910, § 3731 et seq., former Code 1933, § 108-101 et seq., and former O.C.G.A. § 53-12-22 are included in the annotations for this article.
 
PAROL EVIDENCE. --In all cases when a trust is sought to be implied, a court may hear parol evidence of the nature of the transaction, or the circumstances, or conduct of the parties, either to imply or rebut a trust. Jansen v. Jansen, 180 Ga. 318, 178 S.E. 654 (1935) (decided under former Civil Code 1910, § 3739).
   While an express trust must be created by writing and cannot be proved by parol, implied trusts may be established by parol evidence, although the effect of such evidence is to alter or vary a written instrument, and although the defendant sets up and insists upon the statute of frauds. Jansen v. Jansen, 180 Ga. 318, 178 S.E. 654 (1935) (decided under former Civil Code 1910, § 3739).
 
PRINCIPLE IN FORMER CIVIL CODE 1910, § 3258 (SEE O.C.G.A. § 44-14-32) that "a deed or bill of sale, absolute on its face, and accompanied by possession of the property, shall not be proved (at the instance of the parties) by parol to be a mortgage only, unless fraud in its procurement is the issue to be tried," is not applicable to an action seeking to set up an implied trust. Jansen v. Jansen, 180 Ga. 318, 178 S.E. 654 (1935) (decided under former Civil Code 1910, § 3739).
 
PROMISES MADE DECEITFULLY FOR PURPOSE OF ACCOMPLISHING FRAUDULENT DESIGNS, whatever may be their terms, do not, unless reduced to writing, raise express trusts; but the law, acting upon them according to their nature, makes them a basis upon which to build up in favor of the defrauded party an implied trust. Jansen v. Jansen, 180 Ga. 318, 178 S.E. 654 (1935) (decided under former Civil Code 1910, § 3739).
 
INTRODUCTION OF EVIDENCE GENERALLY. --Parties in an action to establish a trust are entitled to introduce, and the jury is entitled to consider, as tending to prove the intention of the parties, evidence relating to the nature and circumstances of the transactions and the conduct and declarations of the parties. Epps v. Wood, 243 Ga. 835, 257 S.E.2d 259 (1979) (decided under former Code 1933, § 108-101 et seq.).
 
CITED in Jenkins v. Lane, 154 Ga. 454, 115 S.E. 126 (1922); Bryant v. Green, 176 Ga. 874, 169 S.E. 123 (1933); Ross v. Rambo, 195 Ga. 100, 23 S.E.2d 687 (1942); Bradley v. Thompson, 202 Ga. 785, 44 S.E.2d 898 (1947); Hodges v. Hodges, 213 Ga. 689, 100 S.E.2d 888 (1957); United States Epperson Underwriting Co. v. Jessup, 22 F.R.D. 336 (M.D. Ga. 1958); Lucas v. Bonner, 216 Ga. 334, 116 S.E.2d 548 (1960); Hodges v. Hodges, 221 Ga. 587, 146 S.E.2d 313 (1965); McCann v. McCrain, 228 Ga. 814, 188 S.E.2d 484 (1972); King v. Tyler, 148 Ga. App. 272, 250 S.E.2d 784 (1978); Conner v. Conner, 250 Ga. 27, 295 S.E.2d 739 (1982); Georgia Farm Bureau Mut. Ins. Co. v. Smith, 179 Ga. App. 399, 346 S.E.2d 848 (1986); Wasson v. Waid, 188 Ga. App. 177, 372 S.E.2d 508 (1988).
 
EXPRESS TRUST MAY NOT BE IMPRESSED BY PAROL EVIDENCE UPON A DEED, as all express trusts must be created or declared in writing. Fowler v. Montgomery, 254 Ga. 118, 326 S.E.2d 765 (1985) (decided under former O.C.G.A. § 53-12-22).
 
PLAINTIFF CANNOT ASSERT EXPRESS TRUST AND ENGRAFT DEED BY PAROL. --When father executed to plaintiff's sister a deed to land, absolute upon its face, with the agreement between all of them that the sister was to deed a specified portion of the land to plaintiff (her brother) whenever he or the father requested its execution, such an agreement, if properly executed in writing, would create an express trust; however, when the plaintiff tendered no written evidence but sought to establish the agreement by parol testimony, the court did not err in directing a verdict for the defendant, as plaintiff was attempting to assert an express trust and engraft it on a deed by parol, which cannot be done. Jones v. Jones, 196 Ga. 492, 26 S.E.2d 602 (1943) (decided under former Code 1933, § 108-104).
 
IMPACT OF FRAUDULENT UNDERTAKINGS OR PROMISES. --While fraudulent undertakings or promises, whatever their terms, do not unless reduced to writing raise express trusts, the law, acting upon them according to their nature, makes them a basis upon which to build up in favor of the defrauded party an implied or constructive trust. Pittman v. Pittman, 196 Ga. 397, 26 S.E.2d 764 (1943) (decided under former Code 1933, § 108-106).
 
APPOINTMENT OF AGENT TO PURCHASE LAND FOR PRISONER'S FAMILY does not create express trust. Beasley v. Kendrick, 78 Ga. 121 (1886) (decided under former law).
 
AN IMPLIED TRUST MAY REST UPON EXPRESS PAROL AGREEMENT, fraudulently made, by which a person acquires title to property of another; and in such case the express promise or agreement may be proved by parol to raise not an express but an implied trust. Pittman v. Pittman, 196 Ga. 397, 26 S.E.2d 764 (1943) (decided under former Code 1933, § 108-106).
   
   
 
IMPLIED TRUSTS ARE SUCH AS ARE INFERRED BY LAW FROM THE NATURE OF THE TRANSACTION or conduct of parties, and are either resulting or constructive. Hemphill v. Hemphill, 176 Ga. 585, 168 S.E. 878 (1933) (decided under former Code 1910, § 3732); Aetna Life Ins. Co. v. Weekes, 241 Ga. 169, 244 S.E.2d 46 (1978) (decided under former Code 1933, § 108-105).
   When temporary administrator brought an equitable action alleging that the administrator's intestate had purchased certain real estate and had agreed to place title jointly in the defendant's name in order to secure a debt owed defendant, and that defendant was to reconvey title to deceased and had refused to reconvey the half interest held in the defendant's name, the temporary administrator has alleged an implied trust in favor of the estate of the intestate from the facts and circumstances. Royal v. Lane, 214 Ga. 375, 104 S.E.2d 901 (1958) (decided under former Code 1933, §§ 108-104 and 108-106).
   When a grantee holds property impressed with a constructive trust in favor of the grantor, and conveys such property to another who has notice and knowledge of the circumstances creating the constructive trust, the latter takes the property subject to the equities of the original grantor and is a proper party in an action seeking to impress the property with a constructive trust. Hancock v. Hancock, 205 Ga. 684, 54 S.E.2d 385 (1949) (decided under former Code 1933, §§ 108-104 and 108-106).
   When the contract of rescission was executed, the equity in the house and lot reverted to the vendor (in an exchange of property), and it became impressed with a trust, and the vendee held it for the benefit of the vendor as an implied trust. Eller v. McMillan, 174 Ga. 729, 163 S.E. 910 (1932) (decided under former Civil Code 1910, §§ 3732 and 3739).
   When deed was wholly without any good or valuable consideration, other than trust assumed by grantee (to sell the land and pay grantors their half interest in the proceeds), and the only title at all that grantee could have had was a title in trust, claim of grantors was not an attempt to engraft on an otherwise good and valid absolute deed an extraneous parol trust, but an effort either to void the deed or else to sustain the deed in the only way that it might possibly be given effect, if allowed to have any effect at all. Pittman v. Pittman, 196 Ga. 397, 26 S.E.2d 764 (1943) (decided under former Code 1933, § 108-106).
 
OBTAINING PROPERTY FRAUDULENTLY. --Trust is implied when from any fraud one person obtains title to property which rightfully belongs to another. Jansen v. Jansen, 180 Ga. 318, 178 S.E. 654 (1935) (decided under former Civil Code 1910, §§ 3731 and 3739).
   An implied trust arises wherever a person acquires the legal title to land or other property by means of an intentionally false and fraudulent verbal promise to hold the land for a certain specified purpose, and after having thus fraudulently obtained title, one retains, uses, and claims the property absolutely as one's own, so that the whole transaction by means of which the ownership is obtained is in fact a scheme of actual deceit. Jansen v. Jansen, 180 Ga. 318, 178 S.E. 654 (1935) (decided under former Civil Code 1910, §§ 3731 and 3739).
   If by a false and fraudulent oral promise, which one intends at the time of making it afterwards to violate, the vendee of two contiguous parcels of land, which one has contracted for by separate and distinct contracts, induces the vendor to convey to one both parcels by one and the same absolute unconditional deed, one paying for one parcel but not for the other, equity by reason of one's fraud will fasten upon one a constructive trust on behalf of the vendor, as to the parcel not paid for, although the two parcels are not described in the deed as several tracts, but both together are treated as one tract. Jansen v. Jansen, 180 Ga. 318, 178 S.E. 654 (1935) (decided under former Civil Code 1910, §§ 3731 and 3739).
   When a conveyance absolute in form is made to one person, but the circumstances show that the real intention of the parties was not to make an absolute conveyance but a conveyance with restrictions or reservations, when it is alleged and appears that there was fraud on the part of the grantee to induce the execution of the deed, a court of equity will set up an implied trust in the property, by construing the conveyance so as to do full justice to the parties as their interests may appear, and in such cases the courts have held that to allow an oral agreement to be set up which restricts the original instrument does not contravene the statute of frauds, since the jurisdiction of the court is predicated upon the fraud of the grantee; and the parol evidence rule does not exclude oral testimony which tends to establish the fraud and show the real intention of the parties. Jansen v. Jansen, 180 Ga. 318, 178 S.E. 654 (1935) (decided under former Civil Code 1910, §§ 3731 and 3739).
   While it is the general rule that a parol trust cannot be grafted on an absolute deed, such instrument must be taken to mean a deed which is valid, not one without any good or valuable consideration, under which the grantee holds in fraud; under such circumstances, even though the language might otherwise be construed as setting up an express trust, it will nevertheless be taken as negativing any intent or purpose to pass title, and for such purpose it will be held to create a valid implied trust insofar as it imposes duties and obligations naturally arising from the nature of the transaction and the conduct of the parties. Pittman v. Pittman, 196 Ga. 397, 26 S.E.2d 764 (1943) (decided under former Code 1933, § 108-106).
 
IMPLIED TRUST DOES NOT ARISE FROM AGREEMENT, but by implication of law from acts and conduct. Epps v. Epps, 209 Ga. 643, 75 S.E.2d 165 (1953) (decided under former Code 1933, § 108-106).
   While an express trust can only be shown by a writing, an implied trust may rest upon an express parol agreement, fraudulently made, by which a person acquires title to property of another; and in such case the express promise or agreement may be proved by parol to raise not an express but implied trust. Jenkins v. Lane, 154 Ga. 454, 115 S.E. 126 (1922) (decided under former Civil Code 1910, § 3731).
   When property was purchased by plaintiffs, defendants, and their father, and conveyed to the mother upon understanding that upon her death it was to be equally divided between her heirs, no implied trust was created. King v. Tyler, 148 Ga. App. 272, 250 S.E.2d 784 (1978) (decided under former law).
   When the children executed a deed to father to consummate sale which he failed to do, but claimed land as own, an implied trust was created and the deed will be reformed. Summerour v. Summerour, 148 Ga. 499, 97 S.E. 71 (1918) (decided under former Civil Code 1910, §§ 3732 and 3739).
   When A. promises X. and X.'s relative to come by a hotel for her and accompany them to a public sale, but fails to come by, telling the relative A. will buy property for X., an implied trust is created when A. buys in the property. Rives v. Lawrence, 41 Ga. 283 (1870) (decided under former law).
   An implied trust results from the fact that one person's money has been invested in land, and the conveyance taken in the name of another. Bullard v. Bullard, 214 Ga. 122, 103 S.E.2d 570 (1958) (decided under former Code 1933, § 108-116).
   Trusts are implied whenever the legal title is in one person, but the beneficial interest, either from the payment of the purchase money or other circumstances, is either wholly or partially in another. Eller v. McMillan, 174 Ga. 729, 163 S.E. 910 (1932) (decided under former Civil Code 1910, §§ 3732 and 3739).
   When the purchase money for a tract of land was paid by one and the title thereto taken in the name of one's brother, an implied trust arises. Such a trust does not arise from an agreement but by implication of law from acts and conduct. Stevens v. Stevens, 204 Ga. 340, 49 S.E.2d 895 (1948) (decided under former Code 1933, § 108-106).
   In order to set up an implied resulting trust in favor of one paying the purchase money where the title is placed in another, it is indispensable that it be shown that the purchase price was paid by the beneficiary of the trust at or before the time the conveyance was made, or that it be shown, other than by a void parol agreement, that it was the intent and purpose of the parties at the time the conveyance was made that the one claiming the benefit of the trust should pay the purchase money in conformity with such original intent and purpose of the parties. Such intent may be established by proof of an initial payment by the one claiming the benefit of the trust, at or before the time the title is conveyed to another. Loggins v. Daves, 201 Ga. 628, 40 S.E.2d 520 (1946) (decided under former Code 1933, §§ 108-104, 108-105, and 108-106).
 
IMPLIED TRUST IS NECESSARILY BASED UPON IMPLIED CONTRACT, implied either in fact or in law. Jones v. Jones, 196 Ga. 492, 26 S.E.2d 602 (1943) (decided under former Code 1933, §§ 108-104 and 108-105); Beckwith v. Peterson, 227 Ga. 403, 181 S.E.2d 51 (1971) (decided under former Code 1933, §§ 108-104 and 108-105).
   
 
IMPLIED TRUST NOT DESTROYED BY EXPRESS VERBAL AGREEMENT. --If from all the facts and circumstances an implied trust is otherwise established, it is not destroyed by the express verbal agreement which may have constituted a part of the transaction. Pittman v. Pittman, 196 Ga. 397, 26 S.E.2d 764 (1943) (decided under former Code 1933, § 108-106).
   Petition seeking to establish an implied trust will fail when all the allegations relied on are based solely upon an oral agreement setting up an invalid express trust. If, however, it is made to appear from all the alleged facts and circumstances surrounding a transaction that an implied trust was established, the mere fact that there may have been an abortive attempt to establish by parol an express trust does not operate to destroy the implied trust which the facts and circumstances otherwise establish. Johnson v. Upchurch, 200 Ga. 762, 38 S.E.2d 617 (1946) (decided under former Code 1933, §§ 108-104 and 108-105).
   
 
RECOVERY BY OWNER OF CONSTRUCTIVE TRUST. --When a constructive trust arises in favor of an owner, the owner may enforce such trust by following the property or its product in the hands of a third person who is not a bona fide purchaser, whether the product be land, chattels, choses in action, or money. Pittman v. Pittman, 196 Ga. 397, 26 S.E.2d 764 (1943) (decided under former Code 1933, § 108-106).
   In an action to establish an implied resulting trust after the plaintiff made the first payment of the purchase price, the recovery by such plaintiff should be limited to the extent and in the proportion that plaintiff's money has actually gone to pay for property where the title is put in another. Loggins v. Daves, 201 Ga. 628, 40 S.E.2d 520 (1946) (decided under former Code 1933, §§ 108-104, 108-105, and 108-106).
 
RESEARCH REFERENCES
 
AM. JUR. 2D. --76 Am. Jur. 2d, Trusts, §§ 17, 128.
 
C.J.S. --90 C.J.S., Trusts, § 9.
 
ALR. --Grantee's oral promise to grantor as giving rise to trust, 35 ALR 280; 45 ALR 851; 80 ALR 195; 129 ALR 689; 159 ALR 997.
   Attorney as trustee for purpose of running of statute of limitations against claim for money or property received or collected by him, 151 ALR 1388.
   Devise or legacy upon promise of devisee or legatee that another shall benefit as creating trust, 155 ALR 106.
   Rights of parties under oral agreement to buy or bid in land for another, 27 ALR2d 1285.
   Constructive trust with respect to partnership personal property assets knowingly received from individual partner for payment of his private debt, 45 ALR2d 1211.
   Creation of express trust in property to be acquired in future, 3 ALR3d 1416.