Appeal from decree of Court of Common Pleas No. 6 of Philadelphia County, June T., 1964, No. 3335, in case of Esther Silver v. Lena Silver, administratrix of estate of Jack Silver, and Aaron Silver.
Lee B. Sacks, with him Samuel I. Sacks, for appellant.
Sidney E. Herold, for appellee.
Bell, C. J., Musmanno, Jones, Cohen, Eagen, O'Brien and Roberts, JJ. Opinion by Mr. Justice Roberts. Mr. Justice Cohen concurs in the result. Mr. Chief Justice Bell and Mr. Justice Eagen dissent.
This appeal arises from a suit in equity instituted by Esther Silver against her son, Aaron Silver, and the estate of her deceased son, Jack Silver, seeking to have a constructive trust imposed upon certain realty allegedly transferred to the co-defendants subject to an oral promise to reconvey the property upon request.
The facts, as found by the chancellor and supported by the record,*fn1 establish that in May of 1952, Mrs. Silver, a widow, was the sole owner of the property here in dispute. Intending to remarry, and fearful that the property might pass to the heirs of her husband-to-be rather than to her own children, she deeded the property to two of her sons,*fn2 without consideration, one week prior to her marriage in June of 1952. Although the deed was absolute on its face, and no written agreement or memorandum made, it was orally agreed that the property would continue to belong to Mrs. Silver, and that the two sons whose names appeared on the deed would reconvey the property to her whenever she requested.
In 1958, Mrs. Silver was again widowed, but it was not until after the death of her son Jack, in 1963, that she requested the return of the property in accordance with the oral promise to reconvey. However, the administratrix of the estate of Jack Silver denied knowledge of such a promise and refused to reconvey the property. Mrs. Silver then instituted the present suit
in equity. After hearing, the chancellor concluded that the facts warranted the imposition of a constructive trust, and entered a decree nisi directing that the property be reconveyed to plaintiff. Only the administratrix filed exceptions to this adjudication, the other son, Aaron, having admitted the oral promise to reconvey and having expressed his willingness to comply with the order. Following argument before the court en banc, the exceptions were dismissed and the decree made final. This appeal by the administratrix followed.
Appellant first contends that the court erred in imposing a constructive trust, and that, if such a trust were not imposed, the Statute of Frauds, Act of April 22, 1856, P. L. 532, 33 P.S. § 2,*fn3 would preclude the enforcement of the oral promise to reconvey. It is clear, however, that if the chancellor was correct in imposing a constructive trust, the Statute of Frauds would not be operative in this case, since a constructive trust, being implied by law, is expressly excluded from the operation of the Statute. Metzger v. Metzger, 338 Pa. 564, 14 A.2d 285 (1940); Hatcher v. Hatcher, 264 Pa. 105, 107 Atl. 660 (1919); McCloskey v. McCloskey, 205 Pa. 491, 55 Atl. 180 (1903); Seichrist's Appeal, 66 Pa. 237 (1871). The first issue to be considered, therefore, is whether the facts as found by the chancellor justify the imposition of a constructive trust.
It is settled that where property is conveyed to one in a confidential relationship to the transferor, subject to a promise to reconvey which is subsequently breached, equity will intervene by imposing a constructive trust to prevent the unjust enrichment of one so abusing a confidential relationship. Metzger v. Metzger, supra; Hatcher v. Hatcher, supra; Restatement 2d, Trusts, § 44 (1959); Restatement, Restitution, § 160 (1937); Bogert, Trusts & Trustees § 471 (2d ed. 1960); see 4 Scott, Trusts § 462.1 (2d ed. 1956). It is necessary that both a confidential relationship and reliance upon a promise to reconvey induced by that relationship ...