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A trust exists pro tanto the amount of the funds used when the amount thereof is definite or constitutes an aliquot part of the whole consideration. Substance and not form is the important element in equity. The owner of the money that pays for the property should be the owner of the property. Such is the foundation for a resulting trust, and equity should be no less considerate of one whose property has been misappropriated for an investment than for one who intended that the beneficial interest is not to go with the legal title.
Prior to the parties' divorce, the ex-husband entrusted his wife with the purchase of the real estate in question. The ex-husband was unable to read, and believed that the wife was protecting his interests by causing the legal title to the property to be taken in his name as the grantee. Instead, the ex-wife procured a deed with her name as grantee. Plaintiff instituted the instant lawsuit to obtain title to the premises. The court found that the plaintiff was the owner of an undivided two-fifths of the property and that defendant held the title to such interest in trust for plaintiff. Defendant moved for amended findings or for a new trial. The motion was denied and defendant has appealed from the order denying her motion for a new trial.
Under the circumstances, was a trust created in favor of the plaintiff husband?
The court affirmed the trial court’s decision, and held that there was a constructive trust established for the husband's benefit. Under Minn. Stat. § 8088 (1923), a trust could result in favor of a person who paid consideration when the title was taken in another's name if the person taking title took an absolute conveyance without the knowledge or consent of the person paying the consideration. Although the ex-husband did not pay the entire consideration, he paid a definite part of the consideration and was entitled to a trust pro tanto. Furthermore, the evidence rebutted the presumption that the conveyance was intended as a gift to the ex-wife.