McQuay v. McQuay

263 P. 683, 81 Mont. 311, 1928 Mont. LEXIS 121

• Court: Montana Supreme Court
• Decided: January 18, 1928
• Docket: No. 6,212.
• Status: Published

Opinion

MR. CHIEF JUSTICE CALLAWAY

delivered the opinion of the court.

By this action the plaintiff James McQuay sought to have his son, defendant Ray McQuay, declared a trustee of property of which plaintiff claimed to be the rightful owner.

The record discloses that in 1915 Kate Fogarty executed and delivered to plaintiff a grant deed conveying residence property in Butte for the sum of $950, paid by plaintiff. By express direction of plaintiff the name of the grantee was omitted from the deed, the plaintiff reserving the right to insert the name of a grantee therein when he should choose to do so. The reason for this was that plaintiff did not carry property in his own name. Years before, he had trouble with his wife over the matter of her joining with him in the execution of a deed designed to reeonvey to a borrower property,, which the borrower had conveyed to plaintiff as security for a loan. Plaintiff determined that his wife should not have the chance to embarrass him in that way again.

After purchasing the property from Fogarty, plaintiff made extensive repairs and additions upon it at a cost of $2,400. Plaintiff himself worked upon the house and his son assisted when he was not in school. The son was seventeen years old when the property was purchased. After the house was made habitable, the plaintiff leased it to tenants, among others to one McKenzie, who failed to pay the rent. In September, 1923, McKenzie was far in arrears. The plaintiff, having been obliged, to move some miles away from the property in order to carry on his work as a mine foreman, and as his son was attending school and had the time to give to the collection of the rents, inserted his son’s name in the deed, recorded it, and after its return to him, delivered it to his son, the defendant. The plaintiff testified that he talked over the rental situation with the defendant and suggested the insertion of the defendant’s name in the deed so that the defendant could act as his agent, contemplating that if McKenzie did not pay the defendant could take proceedings against him, and that the defendant had agreed to that course. Some time after the delivery of the deed, defendant having failed to collect the rent from McKenzie, the parties, father and son, called upon Mr. Shone, an attorney at law, at the suggestion of the plaintiff, and talked over the situation with him. The plaintiff told Shone he wanted McKenzie out of the house because he was not receiving any rents and said that defendant was his agent. This testimony was corroborated by Shone but denied by the defendant. The plaintiff testified that from 1923 forward to 192'6, as well as from 1915 to 1923, he paid the taxes upon the property with his own money. He also paid the water rent for the house at all times. He made repairs upon the house himself; he paid for repairs made by others. The plaintiff collected the rentals upon the house at all times until about July, 1925, after which the defendant collected them and turned them over to plaintiff.

In 1926 there was a family quarrel. As a result of this the plaintiff demanded of the defendant that he convey the property to him, which the defendant refused to do. This suit followed.

Plaintiff alleged his ownership of the real property in controversy and his right to the possession thereof, the acquisition of the property by him from Fogarty in 1915, and the delivery to him of a deed in which no one was named as grantee, but with a right reserved in him to insert the name of a grantee; that after the receipt of the deed, but before recording it, he named as grantee therein Kay McQuay, the defendant, plain tiff’s son, in whom as such, plaintiff, when naming him as grantee, reposed a special trust and confidence; that defendant has never paid any consideration for the property, either to the grantor Fogarty or to the plaintiff, but by agreement with plaintiff defendant consented that his name should be used as grantee to hold the legal title to the property in trust for the plaintiff until such time as the plaintiff should request its reconveyance to him, “and upon the express promise that he would convey said property to plaintiff or his nominee”; that about August 1, 1926, plaintiff demanded of defendant that he execute and deliver to him a good and sufficient instrument conveying the property, but defendant refused to execute the same and continued so to refuse; that defendant has not paid out or expended any sum of money or rendered any service of any kind for the benefit of or on account of the property, nor has defendant any claim in equity to or against the property; but if defendant has paid out or expended any sum of money for or on account of the property or if he has rendered any services for the benefit of the property plaintiff is ready, able and willing and offers either to repay the advances which may have been made, or the reasonable value of any services, as the court shall decree to be just and equitable. Plaintiff prayed that the court decree that defendant holds the legal title to the property in trust for the plaintiff, and that defendant be required to execute and deliver to plaintiff a good and sufficient conveyance therefor.

The defendant demurred to the complaint, alleging that it does not state facts sufficient to constitute a cause of action, and that it is uncertain, likewise ambiguous, in that it cannot be ascertained therefrom when the plaintiff named the defendant as grantee in the deed nor whether the agreement between plaintiff and defendant was oral or in writing, nor when the plaintiff requested a reconveyance of the property. The court overruled the demurrer and the defendant answered. In addition to the general denials, the defendant alleged in effect that there was not any memorandum in writing, or written instrument of any description, subscribed by the defendant respecting the property; and that defendant, on September 29, 1923 (the date of the deed), acquired the property by gift from the plaintiff, in consideration of the natural love and affection then existing between the plaintiff and defendant. Other allegations of the answer need not be stated.

The affirmative allegations of the answer were traversed by reply.

The court found that all the allegations of plaintiff’s complaint were true and that those contained in defendant’s answer were not true, except as to the possession of the property by the defendant, and that there was no written agreement between plaintiff and defendant showing the existence of any trust relationship. The court found that according to all of the testimony, including that of defendant and his witnesses, plaintiff and not defendant at all times subsequent to the recording of the deed, exercised such control and supervision over the property as would be natural with the owner of any property, and that the plaintiff’s testimony respecting the nature and purpose of the transfer to the defendant was corroborated by other testimony. Upon its findings the court-entered a decree awarding plaintiff the relief asked for in his complaint. The defendant’s motion for a new trial having been overruled he appealed from the judgment.

1. As the defendant answered over upon the overruling of his demurrer, he cannot now urge his point that the complaint is uncertain or ambiguous. (Robinson v. Woolworth Co., 80 Mont. 431, 261 Pac. 253; Pue v. Wheeler, 78 Mont. 516, 255 Pac. 1043.)

2. The complaint states a cause of action against the defendant.

Section 6785, Kevised Codes 1921, provides that when a transfer of real property is made to one person, and the consideration therefor is paid by or for another, a trust is presumed to result in favor of the person by or for whom such payment is made. (Lynch v. Herrig, 32 Mont. 267, 80 Pac. 240; Feeley v. Feeley, 72 Mont. 84, 231 Pac. 908.) The trust presumed under these circumstances is a resulting trust (Meagher v. Harrington, 78 Mont. 457, 254 Pac. 432), is created by operation of law, not by contract, and may be proved by parol evidence. (Wilson v. Wilson, 64 Mont. 533, 210 Pac. 896; Feeley v. Feeley, supra.)

It is true that if property is purchased by one with his own money and the title is placed by him in another with whom he stands in a confidential relation, such as husband, wife, parent, child or such other relation that one may naturally have a claim upon the bounty of the other, the presumption is that the conveyance is made as a gift. (Clary v. Fleming, 60 Mont. 246, 198 Pac. 546.) We have here two rebuttable presumptions either of which may be overcome by testimony which satisfies the trier of the facts.

It is also true that evidence to establish a trust must be clear, convincing and satisfactory and practically free from doubt. When is the evidence of that character? The answer must be that if it has satisfied the conscience of the chancellor before whom the trial was had, and this court cannot say' that the evidence clearly preponderates against the finding the requirement must be held to be satisfied. We must follow the oft-repeated rule that this court will not overturn the findings of the trial court unless there is a decided preponderance of the evidence against them; and, when the evidence, fully considered, furnishes reasonable grounds for different conclusions the findings will not be disturbed. (Allen v. Petrick, 69 Mont. 373, 222 Pac. 451; Gravelin v. Porier, 77 Mont. 260, 250 Pac. 823.) It must be remembered that a preponderance of the evidence may be established by the testimony of a single witness against a greater number of witnesses who testify to the contrary. (Doane v. Marquisee, 63 Mont. 166, 206 Pac. 426; State ex rel. Bourquin v. Morris, 67 Mont. 40, 214 Pac. 332; Robinson v. Woolworth Co., supra.)

It would be useless to enter into a discussion of the testimony. In places it is in sharp conflict. We have examined the record thoroughly, and cannot say that the evidence preponderates against the trial court’s findings. Indeed, it appears to us that the judge of the trial court who had the witnesses before Mm and who had the decided advantage of hearing their testimony, observing their conduct and demeanor upon the stand, may well have concluded that the evidence clearly and satisfactorily preponderates in favor of the plaintiff. He heard what the witnesses said “and saw how or the manner in which they said it.” (Sanger v. Huguenel, 65 Mont. 236, 211 Pac. 349.)

Rehearing denied February 10, 1928.

3. It is argued that the court erred in receiving the testimony of Mr. Shone as to what was said by plaintiff and de fendant in Shone’s office respecting the relations of the parties concerning the property. Shone was employed to collect the rents from McKenzie, or, failing in that, to bring proceedings to oust him from the premises. Shone testified that he was employed by and paid by plaintiff. He said: “The general conversation all through in my office was that Jim McQuay was the owner of the property and that Ray was just handling the transaction for him.” We think the testimony does not come within the inhibition of section 10536, Revised Codes 1921, as amended (Sess. Laws 1925, p. 109). In other words, we do not think it was a privileged communication within the purview of that section. If it be assumed that Shone acted as attorney for both the parties, and that is the most favorable assumption that can be made for defendant, the evidence was properly admitted. “The witness was asked only to relate what took place at that time between the plaintiff and defendant while he was acting for both. Communications made to an attorney while acting for both parties do not come within the prohibition of the statute when a controversy arises as to the matter about which he has thus been the common adviser.” (Lenahan v. Casey, 46 Mont. 367, 128 Pac. 601; 5 Jones on Evidence, 2d ed., p. 4143.

The judgment is affirmed.

Affirmed.

Associate Justices Myees, Stark, Matthews and Galen concur.