During the fifteenth and sixteenth centuries the custom became prevalent for landowners in England to have the legal title held by others for their use. That practice generated the implication that when a person purchased land and accepted title in the name of another, the latter was expected to hold to the use of the former. The use which thus arose from the presumed intention of the transferor or purchaser was denominated a resulting trust. The presumption was not annihilated either by the enactment of the statute of uses or the statute of frauds. A resulting trust need not be evidenced by a written memorandum. Baldwin v. Campfield , 8 N.J. Eq. 891, 903 (E. & A. 1853).
Professor Ames criticised the existence of the presumption. Ames, Lectures on Legal History (1913), 431 et seq. Many states, notably Kentucky, Michigan, Minnesota, Wisconsin, and New York, abolished legislatively the so-called purchase-money resulting trusts. It was as early as 1830 that the Real Property Commissioners in New York condemned trusts of that nature. In some other states, the common-law resulting trust is sustained by statute. Except, however, in those jurisdictions where the rule has been overthrown by statute, the rebuttable implication of a resulting trust still survives.
The number of reported cases relating to resulting trusts is enormous. The wisdom of recognizing such a class of trusts has been the subject of a conspicuous diversity of opinion. It has been vehemently declared that of all equitable estates, none is "better calculated to promote litigation and perjury." Perhaps in a modified sense, there is some measure of truth in that characterization. Nevertheless the abolishment of such a type of equitable relief might well introduce even greater evils and appalling consequences.
The oppugnancy of views seems to be attributable to the alleged slipperiness of parol evidence often admissible in such cases and to the arbitrary limitations and subtle distinctions employed by some courts in the application of the equitable doctrine.
It is the firmly established law in this State that where, upon the purchase of property, a conveyance of the legal estate is taken in the name of one person and the consideration of the purchase is paid by another -- the parties being strangers to each other -- a presumptive or resulting trust immediately arises in virtue of those circumstances of the transaction, and the legal estate is considered to be held in trust for the person by whom the purchase money was paid, unless the presumption of such a trust be overcome by proof that it was the intention of the party from whom the consideration proceeded that the named grantee should take beneficially. Depeyster v. Gould , 3 N.J. Eq. 474 (Ch. 1836); Johnson v. Dougherty , 18 N.J. Eq. 406 (Ch. 1867); Cutler v. Tuttle , 19 N.J. Eq. 549 (E. & A. 1868); Read v. Huff , 40 N.J. Eq. 229 (E. & A. 1885); Down v. Down , 80 N.J. Eq. 68 (Ch. 1912); Pope v. Bain , 5 N.J. Super. 541 (Ch. 1949).
The presumption, however, does not command conclusive effectiveness. In all species of resulting trusts, intention is the superior element of consideration. Gordon v. Griffith , 113 N.J. Eq. 554 (Ch. 1933).
Where the parties are attached by the relationship of husband and wife and the husband pays the consideration of the purchase of lands and has the conveyance made to his wife,
there is the initial presumption that a gift or settlement was intended. Strong v. Strong , 134 N.J. Eq. 513 (Ch. 1944); 136 N.J. Eq. 361 (Ch. 1945); affirmed, 137 N.J. Eq. 537 (E. & A. 1946).
Where a wife advances money to her husband from her separate estate, the presumption is that the advancement is a loan or a deposit for safe keeping and the burden falls upon the husband to prove it to be a gift. Cole v. Lee , 45 N.J. Eq. 779 (E. & A. 1889); Adoue v. Spencer , 62 N.J. Eq. 782 (E. & A. 1901); Elmer v. Trenton Trust & Safe Deposit Co. , 76 N.J. Eq. 452 (Ch. 1909); Yorn v. Yorn , 139 N.J. Eq. 300 (E. & A. 1947); Van Inwegen v. Van Inwegen , 4 N.J. 46 (Sup. Ct. 1950).
In some jurisdictions it is presumed in the absence of proof of a legal consideration that a transfer made by a man to a mistress with whom he is cohabiting illicitly is the result of undue influence. Vide, ...