Colorado § 38-10-106 - Conveyance - trust - power must be in writing.

§ 38-10-106. Conveyance - trust - power must be in writing.

No estate or interest in lands, other than leases for a term not exceeding one year, nor any trust or power over or concerning lands or in any manner relating thereto shall be created, granted, assigned, surrendered, or declared, unless by act or operation of law, or by deed or conveyance in writing subscribed by the party creating, granting, assigning, surrendering, or declaring the same, or by his lawful agent thereunto authorized by writing.

Source: R.S. p. 338, § 6. G.L. § 1256. G.S. § 1515. R.S. 08: § 2660. C.L. § 5105. CSA: C. 71, § 6. CRS 53: § 59-1-6. C.R.S. 1963: § 59-1-6.

ANNOTATION

I. General Consideration.

II. Express Trusts.

III. Resulting and Constructive Trusts.

IV. Authority of Agent.

I. GENERAL CONSIDERATION.

Law reviews. For article, "Express Trusts in Colorado", see 10 Rocky Mt. L. Rev. 9 (1937). For article, "An Aspect of Estate Planning in Colorado: The Revocable Inter Vivos Trust", see 43 Den. L.J. 296 (1966). For note, "A Survey of Colorado Water Law", see 47 Den. L.J. 226 (1970). For article, "Signatures on Documents Affecting Title to Colorado Real Property — Part III", see 12 Colo. Law. 447 (1983).

Statute of frauds only concerns making of contracts. Niernberg v. Feld, 131 Colo. 508, 283 P.2d 640 (1955).

Statute of frauds is inapplicable to revocation of contracts. Niernberg v. Feld, 131 Colo. 508, 283 P.2d 640 (1955).

Statute of frauds inapplicable to executed contracts. Sherman v. Randle, 79 Colo. 243, 245 P. 717 (1926).

Rescission of executing contract by parol agreement permitted. An executory contract involving title to, or an interest in, land may be rescinded by an agreement resting in parol. Niernberg v. Feld, 131 Colo. 508, 283 P.2d 640 (1955).

Statute of frauds is inapplicable to equitable trusts. Page v. Clark, 40 Colo. App. 24, 572 P.2d 1214 (1977), rev'd on other grounds, 197 Colo. 306, 592 P.2d 792 (1979).

Agreement restricting use of land is not within statute of frauds because it does not relate to an interest in land but merely to its use. Thornton v. Schobe, 79 Colo. 25, 243 P. 617 (1925).

Interest in deed of trust is not an interest in the underlying land. Since Colorado is a lien theory jurisdiction, statute of frauds does not bar suit on oral agreement to execute and deliver a mortgage upon real estate. Bigelow v. Nottingham, 833 P.2d 764 (Colo. App. 1991), rev'd on other grounds sub nom. Haberl v. Bigelow, 855 P.2d 1368 (Colo. 1993).

Promissory note secured by a deed of trust for real property does not create an interest in land. Crown Life Ins. Co. v. Haag Ltd. P'ship, 929 P.2d 42 (Colo. App. 1996).

Settlement of accounts following partnership termination independent of status of realty. When the business of a partnership, organized to lease and operate a mine during a limited period for the sole purpose of making a profit through the extracting and marketing of ores therefrom, had been terminated in a suit brought by one of the partners to settle the partnership accounts and distribute the partnership profits and other assets, no interest in realty was involved, and, in such cases, the right to a settlement and distribution in no way depends upon the legal status of realty under the statute of frauds, therefore, this section is inapplicable to the right to a settlement and distribution. Meagher v. Reed, 14 Colo. 335, 24 P. 681 (1890).

A written conveyance from a partner who contributes real estate to a partnership is not required to convert the property into partnership property because the partnership statutes and the trust relationship between partners sufficiently protect partners from fraud. In re Estate of Grosboll, 2013 COA 141, 315 P.3d 1284.

Partial performance removes contract from scope of statute. Where there is an accounting between parties when one party paid over half the profits from jointly owned land, there is such partial performance of a contract conveying a one-half interest in land as would remove the contract from the scope of the statute. Bushner v. Bushner, 134 Colo. 509, 307 P.2d 204 (1957).

Method of use of land not subject to section. Method of use of land is not estate or interest in land, subject to this section. Thornton v. Schobe, 79 Colo. 25, 243 P. 617 (1925).

Profits on purchase and sale of land not an "estate or interest" in the land, subject to this section. Von Trotha v. Bamberger, 15 Colo. 1, 24 P. 883 (1890); Thornton v. Schobe, 79 Colo. 25, 243 P. 617 (1925).

Defense involves questions of fact and law. The defense of the statute of frauds involves questions of fact as well as law. Bushner v. Bushner, 134 Colo. 509, 307 P.2d 204 (1957).

Proof of parol agreement prohibited absent fraud, accident, or mistake. In the absence of the elements of fraud, accident, or mistake, the grantor in an absolute conveyance is prohibited by the statute of frauds from setting up and proving a parol agreement, in which the grantee was to hold the land in trust for his benefit. Hall v. Linn, 8 Colo. 264, 5 P. 641 (1885); Bohm v. Bohm, 9 Colo. 100, 10 P. 790 (1885); Von Trotha v. Bamberger, 15 Colo. 1, 24 P. 883 (1890).

To exclude the operation of the statute on the ground of fraud where an oral agreement is alleged as a foundation of the trust, it must appear that the promise is used as a means of imposition or deceit; the promise may be received in evidence as one of the steps by which the fraud was accomplished. Bohm v. Bohm, 9 Colo. 100, 10 P. 790 (1885).

Unless the transaction was tainted with either actual or constructive fraud, trust could not be created by parol. Hodgson v. Fowler, 7 Colo. App. 378, 43 P. 462 (1896).

While Colorado recognizes that the intent to create a trust can be inferred from the nature of property transactions, the circumstances surrounding the holding of and transfer of property, the particular documents or language employed, and the conduct of the parties, the inference of an intent to create a trust must come from clear, explicit, definite, unequivocal, and unambiguous language or conduct. No finding of a trust is warranted as a matter of law where neither the language of the relevant documents nor the conduct of the parties satisfies this standard. Bishop & Diocese of Colo. v. Mote, 716 P.2d 85 (Colo. 1986) (en banc); In re Fairfield Pagosa, Inc., 97 F.3d 247 (8th Cir. 1996).

Applied in Farrand v. Beshoar, 9 Colo. 291, 12 P. 196 (1886); Beulah Marble Co. v. Mattice, 22 Colo. 547, 45 P. 432 (1896); Heron v. Weston, 44 Colo. 379, 100 P. 1130 (1908); Griffith v. Sands, 84 Colo. 456, 271 P. 191 (1928); Quelland v. Roy, 148 Colo. 316, 365 P.2d 899 (1961).

II. EXPRESS TRUSTS.

Parol evidence cannot establish existence of express trust. Von Trotha v. Bamberger, 15 Colo. 1, 24 P. 883 (1890); Johnson v. Calnan, 19 Colo. 168, 34 P. 905, 41 Am. St. R. 224 (1893).

Parol evidence admissible to show truth of transaction. Where there is some written evidence showing the existence of a trust, the door is thereby opened to the admission of parol evidence to show the truth of the transaction. Johnson v. Calnan, 19 Colo. 168, 34 P. 905, 41 Am. St. R. 224 (1893).

Written evidence of trust required. It is not required by this section that a trust should be created by a writing, but that there should be evidence in writing, proving that there was such a trust; the proof may be made by letters and informal documents. Johnson v. Calnan, 19 Colo. 168, 34 P. 905 (1893); Waterbury v. Fisher, 5 Colo. App. 362, 38 P. 846 (1894), aff'd, 23 Colo. 256, 47 P. 277 (1896).

To constitute a valid express trust in relation to realty, the conditions thereof must, by virtue of the statute of frauds, be in writing. Armor v. Spalding, 14 Colo. 302, 23 P. 789 (1890).

III. RESULTING AND CONSTRUCTIVE TRUSTS.

Resulting and constructive trusts arise by operation of law upon the transaction of the parties. Kayser v. Maugham, 8 Colo. 232, 6 P. 803 (1885); McPherrin v. Fair, 57 Colo. 333, 141 P. 472 (1914).

A constructive trust is a creature of equity and springs from a desire to prevent the statute of frauds from being used as a shield which would allow a party to be unjustly enriched. Page v. Clark, 197 Colo. 306, 592 P.2d 792 (1979); Ralston Oil & Gas Co. v. July Corp., 719 P.2d 334 (Colo. App. 1985).

Situations giving rise to resulting trusts. There are three situations in which the trust which arises is properly called a resulting trust: (1) Where an express trust fails in whole or in part; (2) where an express trust is fully performed without exhausting the trust estate; and (3) where property is purchased and the purchase price is paid by one person and at his direction the vendor conveys the property to another person. Page v. Clark, 197 Colo. 306, 592 P.2d 792 (1979).

A trust in operation of law may occur where a trust is declared only as to part of the conveyance and nothing is said as to rest. Walker v. Bruce, 44 Colo. 109, 97 P. 250 (1908).

Statute of frauds does not prevent declaration of constructive trust nor does it prevent recovery of property delivered conditionally by one to himself and another as joint tenants in contemplation of marriage. In re Heinzman, 198 Colo. 36, 596 P.2d 61 (1979).

If the conditions for imposing a constructive trust are present, such remedy will not be precluded by application of the statute of frauds. Ralston Oil & Gas Co. v. July Corp., 719 P.2d 334 (Colo. App. 1985).

Resulting trust in lands may be established by oral testimony. Knox v. McFarran, 4 Colo. 586 (1879); Kayser v. Maugham, 8 Colo. 232, 6 P. 803 (1885); Bohm v. Bohm, 9 Colo. 100, 10 P. 790 (1885); Von Trotha v. Bamberger, 15 Colo. 1, 24 P. 883 (1890); First Nat'l Bank v. Campbell, 2 Colo. App. 271, 30 P. 357 (1892), rev'd on other grounds, 22 Colo. 177, 43 P. 1007 (1896); Warren v. Adams, 19 Colo. 515, 36 P. 604 (1894); Berry v. French, 24 Colo. App. 519, 135 P. 985 (1898); Walker v. Bruce, 44 Colo. 109, 97 P. 250 (1908); O'Byrne v. McNeill, 90 Colo. 226, 7 P. 956 (1932).

Statute of frauds has no application to resulting trust, for such a trust is created by operation of law. Kayser v. Maugham, 8 Colo. 232, 6 P. 803 (1885); Walker v. Bruce, 44 Colo. 109, 97 P. 250 (1908); McPherrin v. Fair, 57 Colo. 333, 141 P. 472 (1914); In re Doerfer's Estate, 100 Colo. 304, 67 P.2d 492 (1937); Vandewiele v. Vandewiele, 110 Colo. 556, 136 P.2d 523 (1943).

When constructive trust operates. It has been held that a constructive trust is the formula through which the conscience of equity finds expression; when property has been acquired in such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest, equity converts him into a trustee. Page v. Clark, 197 Colo. 306, 592 P.2d 792 (1979).

Where legal title to land has been fraudulently acquired, and is still held in fraud of the rights of another having a valuable interest in the premises, a trust by operation of law may be declared upon equitable terms. Learned v. Tritch, 6 Colo. 432 (1882); Kayser v. Maugham, 8 Colo. 232, 6 P. 803 (1885); Stewart v. Stevens, 10 Colo. 440, 15 P. 786 (1887); Von Trotha v. Bamberger, 15 Colo. 1, 24 P. 883 (1890); Walker v. Bruce, 44 Colo. 109, 97 P. 250 (1908).

Essence of constructive trusts seems to be fraud, deceit, or bad faith; no effort is made to include them in the intention of the contracting parties. Kayser v. Maugham, 8 Colo. 232, 6 P. 803 (1885).

Fraudulent conveyance prevents trust from resulting to grantor. No trust can result to grantor when conveyance is made for a colorable, illegal, or fraudulent purpose. First Nat'l Bank v. Campbell, 2 Colo. App. 271, 30 P. 357 (1892), rev'd on other grounds, 22 Colo. 177, 43 P. 1007 (1896).

Confidential relations sufficient to create constructive trust. Confidential relations between the parties are sufficient to create a constructive trust. Bohm v. Bohm, 9 Colo. 100, 10 P. 790 (1885); Young v. Hinds, 68 Colo. 164, 188 P. 739 (1920); Vosburg v. Knight, 71 Colo. 473, 207 P. 1112 (1922); Herrick v. Woodrow-Shindler Co., 75 Colo. 363, 226 P. 137 (1924); O'Byrne v. McNeill, 90 Colo. 226, 7 P.2d 956 (1932).

Setting aside transaction for abuse of confidential relationship. If the existence of a confidential relationship has been established, a transaction may be set aside if that relationship has been abused. It is not necessary that the abuse of the confidential relationship be the procuring cause of the original conveyance, but rather the refusal to perform the promise to reconvey is itself a sufficient abuse of confidence to allow the conveyance to be set aside. Page v. Clark, 197 Colo. 306, 592 P.2d 792 (1979).

IV. AUTHORITY OF AGENT.

Agency for sale of lands can be created only by writing. Springer v. City Bank & Trust Co., 59 Colo. 376, 149 P. 253, 1917A Ann. Cas. 520 (1911).

In the absence of written authority from a wife, the owner of real property, to her husband, authorizing it, a lease and option given by him on a part of the land was void under the statute of frauds. Simpson v. Nelson, 71 Colo. 490, 208 P. 455 (1922).

Written authority required to create power of attorney in fact. A contract and deed, executed by father, professing to act as attorney in fact for his daughter, were void under the statute of frauds, so far as the daughter was concerned, because he was not authorized in writing to execute the contract and deed. Clement v. Major, 1 Colo. App. 297, 29 P. 19 (1892); Hagerman v. Bates, 5 Colo. App. 391, 38 P. 1100 (1895), rev'd on other grounds, 24 Colo. 71, 49 P. 139 (1897); Newman v. Tibbitts, 27 Colo. App. 325, 149 P. 266 (1915), aff'd, 63 Colo. 74, 163 P. 720 (1917).

Ratification of signing of contract requires writing. In an action to enforce specific performance of a contract required by the statute of frauds to be in writing, where the statute of frauds was pleaded, ratification of the signing of the contract by one party for another could be shown only in writing. People's Mining & Milling Co. v. Cent. Consol. Mines Corp., 20 Colo. App. 561, 80 P. 479 (1905).