Steele v. Batalo

62 Va. Cir. 102, 2003 Va. Cir. LEXIS 286
CourtRichmond County Circuit Court
DecidedJune 3, 2003
DocketCase No. HS-1132-4
StatusPublished

This text of 62 Va. Cir. 102 (Steele v. Batalo) is published on Counsel Stack Legal Research, covering Richmond County Circuit Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Steele v. Batalo, 62 Va. Cir. 102, 2003 Va. Cir. LEXIS 286 (Va. Super. Ct. 2003).

Opinion

By Judge Randall G. Johnson

In this chancery action, Robert Steele asks the court to impose a resulting or constructive trust on a house and lot in Richmond. Steele also asks the court to find that the defendant, Karen Batalo, has been “fraudulently unjustly enriched” by the actions about which Steele complains. The case is currently before the court on Batalo’s demurrer.

The allegations of the amended bill of complaint, which on demurrer will be taken as true, are that in May 1999, Steele and Batalo purchased together the real property in question. They agreed that title to the property would be in Batalo’s name only, but that it would belong to “each of them jointly as co-owners.” Steele assumed payment for part of the purchase money prior to its purchase through a commitment he made to Batalo to provide fifty percent of the down payment. The parties further agreed that they would each be responsible for fifty percent of the costs and expenses associated with the property. Steele followed through on his commitment by providing fifty percent of the down payment prior to purchase and by making fifty percent of the mortgage, maintenance, and utilities payments associated with the property after purchase. The parties lived together at the property from the time of its purchase until May 2001, when Batalo unilaterally changed the locks. She has excluded Steele from the property since then.

[103]*103Batalo’s demurrer is based on the holding in Tiller v. Owen, 243 Va. 176, 413 S.E.2d 51 (1992). In that case, Ralph Owen brought an action against Vivian Tiller to have the court impose a resulting trust on property. The evidence showed that the parties began dating in 1985 and began living together in 1986. In 1987, Tiller purchased, in her name only, the subject property. She made the loan application and obtained the loan herself. She was also the only party obligated on the deed of trust on the property. Owen gave Tiller two checks totaling $23,000 for the down payment on the house. Tiller placed the checks in her personal checking account and wrote the check for the down payment out of that account. Owen also gave Tiller sufficient money to make each of the mortgage payments until their relationship ended, at which time Tiller moved out of the house. Owen remained in the house and began making the mortgage payments directly. The trial court ruled that Owen was entitled to a lien on the property in the amount of $ 19,315, which was the amount of the down payment minus certain money that Owen owed Tiller. The Supreme Court reversed.

First, the Supreme Court noted that the trial court gave no basis for its ruling; that is, whether it was basing its ruling on a resulting trust or something else. The Supreme Court also noted that the only basis for relief set out in the bill of complaint was a resulting trust. The Court then said:

A resulting trust is an indirect trust which arises from the intention of the parties or the nature of the transaction. It is not dependent on any express declaration of trust. Salyer v. Salyer, 216 Va. 521, 525, 219 S.E.2d 889, 893 (1975). In order for a resulting trust to arise, the would-be beneficiary must pay for the property, or assume payment of all or part of the purchase money prior to or at the time of purchase, and have legal title conveyed to another without any mention of a trust in the conveyance. Leonard v. Counts, 221 Va. 582, 588, 272 S.E.2d 190, 194 (1980). In addition, he must have paid the purchase money as his own, and not as an agent of the title holder, nor as a loan to the latter. Salyer, 216 Va. at 526, 219 S.E.2d at 893. Finally, in instances where the would-be beneficiary has obligated himself to pay purchase money prior to or at the time of purchase, he must have upheld this commitment. Leonard, 221 Va. at 588, 272 $.E.2d at 194-95.
[104]*104In the case presented here, Owen did not obligate himself to purchase all or part of the property in question. He did not sign the sales contract or become obligated on the mortgage. Further, he signed no other documents binding him to pay all or part of the purchase money. Thus, when he delivered the checks to Tiller, both for the down payment and the monthly mortgage payments, it was not done in satisfaction of any obligation he had with regard to the purchase of the property. For this reason, as a matter of law, a resulting trust did not arise.

243 Va. at 180.

Batalo argues that the above language, particularly the language that the would-be beneficiary must pay for “the property, or assume payment of all or part of the purchase money,” gives the would-be beneficiary two choices: he or she must either (1) pay for the entire property at the time of purchase, or (2) commit prior to purchase to pay all or part of the purchase money after purchase. Batalo also argues that the commitment must be made to someone other than the title holder. The court disagrees.

With regard to the need to pay the entire purchase price, Batalo’s argument ignores the language in the paragraph immediately following the language she cites. In holding that a resulting trust was not appropriate, the Supreme Court specifically noted that Owen “did not obligate himself to purchase all or part of the property in question.” If the only way a resulting trust can be created is for the would-be beneficiary to pay for all of the property, that language makes no sense.

Even more telling is the case of Morris v. Morris, 248 Va. 590, 449 S.E.2d 816 (1994), which was decided almost three years after Tiller, and which cites Tiller with approval. That case also cites with approval Kellow v. Bumgardner, 196 Va. 247, 83 S.E.2d 391 (1954), in which the Court said:

The existence of a resulting trust thus depends upon an equitable presumption of intention, based upon the natural precept that one who advances the purchase money for real property is entitled to its benefits. Therefore, after it has been shown that payment of all or a part of the purchase price for property has been paid by one person and title thereto has been placed in the name of another, the factor which will determine whether the title is to be impressed with a trust in favor of the [105]*105payor is the intention of the party providing the purchase money.

196 Va. at 255 (emphasis added).

Also, in Salyer v. Salyer, 216 Va. 521, 219 S.E.2d 889 (1975), one of the cases cited by the Supreme Court in the portion of Tiller relied on by Batalo and quoted above, the Court cited with approval 1 Minor on Real Property § 459 at 613 (2d ed. F. Ribble 1928). On page 612 of that treatise, it is said:

While, to raise [a resulting] trust, it is not necessary that the whole purchase price be paid by another than the one in whom the title is taken, it is necessary that some payment be really, and not merely formally, made by another.

Emphasis added.

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Related

Reid v. Boyle
527 S.E.2d 137 (Supreme Court of Virginia, 2000)
Vega v. Chattan Associates, Inc.
435 S.E.2d 142 (Supreme Court of Virginia, 1993)
Kellow v. Bumgardner
83 S.E.2d 391 (Supreme Court of Virginia, 1954)
Salyer v. Salyer
219 S.E.2d 889 (Supreme Court of Virginia, 1975)
Morris v. Morris
449 S.E.2d 816 (Supreme Court of Virginia, 1994)
Tiller v. Owen
413 S.E.2d 51 (Supreme Court of Virginia, 1992)
Horne v. Holley
188 S.E. 169 (Supreme Court of Virginia, 1936)
Leonard v. Counts
272 S.E.2d 190 (Supreme Court of Virginia, 1980)
Webb v. Webb
37 Va. Cir. 274 (Richmond County Circuit Court, 1995)
Berry v. Clark
42 Va. Cir. 1 (Richmond County Circuit Court, 1996)

Cite This Page — Counsel Stack

Bluebook (online)
62 Va. Cir. 102, 2003 Va. Cir. LEXIS 286, Counsel Stack Legal Research, https://law.counselstack.com/opinion/steele-v-batalo-vaccrichmondcty-2003.