Farrah v. Farrah

446 A.2d 1075, 187 Conn. 495, 1982 Conn. LEXIS 547
CourtSupreme Court of Connecticut
DecidedJuly 6, 1982
StatusPublished
Cited by32 cases

This text of 446 A.2d 1075 (Farrah v. Farrah) is published on Counsel Stack Legal Research, covering Supreme Court of Connecticut primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Farrah v. Farrah, 446 A.2d 1075, 187 Conn. 495, 1982 Conn. LEXIS 547 (Colo. 1982).

Opinions

Aumentado, J.

This appeal questions the propriety of the trial court’s finding that the plaintiffs did not hold a beneficial interest by way of a resulting trust in residential property owned by the defendants. The plaintiffs, husband and wife, sought a temporary and permanent injunction enjoining the defendants, the brother and sister of George H. Farrah (hereinafter Farrah), from proceeding with their summary process action against the plaintiffs, and sought a judgment declaring that the plaintiffs are the beneficial owners of residential property located at 250 Kenyon Street in Hartford.

The plaintiffs and their five children have resided in the home since Farrah first purchased it on June 6, 1966 from the previous owner. As consideration for the conveyance, Farrah paid $35,000, which funds he borrowed from the Rodell Corporation. The Rodell Corporation received from Farrah a mortgage deed and a mortgage note in the amount of $40,000, payable within six months, with interest at 1 percent per month payable monthly. Farrah has not held title to the property since the day he purchased it on June 6, 1966. On that date he conveyed the property by a quitclaim deed to the Farrbeck Corporation, a closely held corporation which he controlled.

[497]*497On February 3, 1967 the Rodell Corporation brought a foreclosure action against Farrah and the Farrbeck Corporation. Before the matter was settled, the Farrbeck Corporation conveyed title to the property by warranty deed to the Connecticut Betterment Corporation, on the day of its incorporation, March 8, 1967. The Connecticut Betterment Corporation gave a certificate stating that it was holding its interest in the property for the children of the plaintiffs, and the plaintiff, Aynesse Farrah, as guardian of the children. The case was settled by agreement among the parties pursuant to the terms of which Herman Fishman, loaned Farrah $31,000 for eighteen months to pay part of the Rodell Corporation mortgage, and Rodell Corporation conveyed its interest in the property to Edward Fishman, Herman Fishman’s son, on October 24, 1967. The remaining funds were provided by a family friend and an officer of Connecticut Betterment Corporation, William Beckerman, who loaned the plaintiffs $6500, and executed a $2000 note to the Rodell Corporation. The plaintiffs executed a note on October 11, 1967 to Beckerman or Connecticut Betterment Corporation in the amount of $6500, but made no payments on the note for at least two years.

Edward Fishman served a notice to quit on the plaintiffs on February 18, 1969, followed by a summary process action on March 18, 1969. Farrah brought an action against both Herman and Edward Fishman on March 1, 1969 seeking a judgment declaring that Edward was holding title to the property only as security for his father’s loan to Farrah. For purposes of settlement, on June 25, 1969, Edward Fishman executed a bond for deed to Farrah, which Farrah assigned to the defendants [498]*498on the same day. Farrah was to pay Edward Fishman $3500 by July 20, 1969, plus $31,500 and a per diem for use and occupancy to Fishman by September 20, 1969. Farrah also was to pay all outstanding liens on the property.

Because Farrah had a poor credit rating, and no funds, he could not obtain a mortgage with which to pay Edward Fishman. The defendants agreed to obtain a mortgage and hold title to the property free from encumbrances. The other terms of their agreement are disputed. The plaintiffs allege that the defendants held the property in a trust resulting to them as the payors of the purchase price because they promised to satisfy the mortgage obligation of the defendants. On the other hand, the defendants allege that the parties agreed that any payments made by the plaintiffs would be in the nature of rent for use and occupancy.

Edward Fishman refused to execute a warranty deed to the defendants. Accordingly, the defendants’ attorney arranged to have all possible holders of any interest in the property, Edward Fishman, Connecticut Betterment Corporation, William Beckerman, Farrbeck Corporation and Farrah, to convey that interest by quitclaim deed or release of attachment, to Raymond Ganim, counsel for the plaintiffs, who then executed a warranty deed to the defendants on September 17, 1969.

As consideration for conveyance of his interest, Edward Fishman was paid the proceeds of the defendants’ $28,000 mortgage from the Society for Savings, $4507 which Ganim paid and for which he received a mortgage in that sum executed by the defendants, plus a $3500 deposit the source of which [499]*499is in dispute.1 Ganim testified that he advanced the $4507 to the defendants as a loan for a few days and was surprised to receive the mortgage in return. Beekerman and the plaintiffs testified that Beckerman paid $8500 for which he received a note signed by Aynesse Farrah as guardian, and Farrah as guarantor. The defendants conveyed a mortgage deed to Society for Savings on September 18, 1969.

Farrah paid the defendants the amount of the mortgage payments until 1972, when he started falling behind. On April 27, 1973, counsel for the defendants demanded by letter that the plaintiffs arrange to buy the house or vacate it. The next month Farrah brought suit against the defendants, but withdrew it before the trial began.

Five years later, the defendants instituted a summary process action against the plaintiffs, which was followed soon thereafter by the present action. After a trial to the court, the court found that the defendants agreed to take title to the premises on the condition that the encumbrances would be cleared and that they would be obligated on the two mortgages, one to the bank and one to Ganim. The plaintiffs would pay rent in the amount of the mortgage, taxes, insurance, and other assessments on the property. The court further found that there was no discussion of intent to hold the property in trust, but that the defendants purchased the property to provide a home for the plaintiffs’ family and for investment purposes. After concluding that the plaintiffs failed to prove by a fair [500]*500preponderance of the evidence that a trust was agreed upon or resulted in the plaintiffs, the court rendered judgment for the defendants. In their appeal the plaintiffs claim that the trial court’s finding that there is no resulting trust is clearly erroneous, and unsupported by the law and facts.

The law on resulting trusts in Connecticut is well settled. Resulting trusts arise by operation of law at the time of a conveyance when the purchase money for property is paid by one party and the legal title is taken in the name of another. Cohen v. Cohen, 182 Conn. 193, 201, 438 A.2d 55 (1980) ; Zack v. Guzauskas, 171 Conn. 98, 101, 368 A.2d 193 (1976) ; Walter v. Home National Bank & Trust Co., 148 Conn. 635, 638, 173 A.2d 503 (1961) ; Ward v. Ward, 59 Conn. 188, 195, 22 A. 149 (1890) ; Dean v. Dean, 6 Conn. 285, 288 (1826) ; 2 Restatement (Second), Trusts §§ 404, 440; Scott, “Resulting Trusts Arising Upon the Purchase of Land,” 40 Harv. L. Rev. 669, 670 (1927). The presumed intent from which the law infers a trust may be rebutted by proof of contrary intent. E.g., Walter v. Home National Bank & Trust Co.,

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Bluebook (online)
446 A.2d 1075, 187 Conn. 495, 1982 Conn. LEXIS 547, Counsel Stack Legal Research, https://law.counselstack.com/opinion/farrah-v-farrah-conn-1982.