Story v. Black

5 Mont. 26

• Court: Montana Supreme Court
• Decided: January 15, 1883
• Status: Published

Opinion

Wade, O. J.

This is an action in the nature of ejectment to recover possession of lots 16 and 17, in block A, of Black’s addition to the town of Bozeman. Applicant claims by virtue of a sale on execution and a sheriff’s deed, and the respondents by reason of a parol gift from father to daughter-in-law.

On the trial the court found the following facts:

1st. That on the 31st day of August, A. D. 1875, the said Leander M. Black, father of defendant Madison M. Black, executed to the defendant Bosa Gr. Black a deed to what is known as the Koch property, which deed was delivered by placing it in an envelope and depositing the same upon the piano, among the bridal presents given to the bride on the eve of the marriage, in consideration of the natural love and affection of a parent to a child.

2d. That, by virtue of said deed, defendants entered upon said property, went into possession and occupation thereof, and made valuable improvements thereon.

3d. That they remained so in possession and occupation of the same until about the 1st day of July, A. D. 18'rT, when, by virtue of an exchange of property with the said L. M. Black, they, in pursuance thereof, entered into the actual possession and occupancy of what is known as the Randall property (the property in question), and have ever since had possession of and occupied the same.

4th. This exchange of the Koch property for said Randall property was made by the parties in good faith, and accepted by the defendants and the said Leander M. Black as a bona fide transfer of said property, and all the rights, title and interest therein, from one party to the other.

5th. That no deed or memorandum was made in writing at the time of the exchange and transfer as aforesaid by the said parties.

6th. That upon receiving possession of the said property under said exchange and transfer, the said defendants, on account thereof, and relying in good faith upon the same, made valuable and permanent improvements upon the said property, and now occupy the same.

7th. That after said exchange and transfer, the said Leander M. Black conveyed by deed to E. W. Toole the said Randall property in trust for these defendants, and the said E. W. Toole, in pursuance of his trust, conveyed by deed the same to said defendants; and that soon after such exchange of property, the said Leander M. Black conveyed the property so originally deeded to defendants, and by them exchanged as aforesaid, to one Peter Koch.

8th. That said Leander M. Black, at the time of making said deed of gift to defendants, was worth about $100,000, with small, if any, indebtedness.

9th. That said Story thereafter became a creditor of said Leander M. Black, and, upon a judgment in his favor against him, sold the property under execution issued thereon and became the purchaser of the same at such sale, and received a sheriff’s deed therefor. That said Story had actual notice of the possession of said property by defendants,. and that at the time of the sale, said sheriff read to the bidders, and in the hearing of said plaintiff and those present, a notice setting out the rights of said defendants in the premises then to be sold, being those in controversy.

Findings of fact by the court, like a general or special verdict, will not be disturbed by the appellate court, if there is competent evidence to support them.

Questions presented by this appeal have relation exclusively to the testimony offered and received upon the trial, and a statement of the same will disclose the nature of the case and the relation of the testimony to the findings of fact.

Madison M. Black, one of the defendants, testified as follows: “I married Bosa G-. Black, one of the defendants, at Bozeman on August 81, 1875. On the night of this day a reception was held at the North Pacific Hotel in Bozeman, and my father, Leander M. Black, took me one side and congratulated me, and told me he had presented Bosa, my wife, with the Koch property; that the deed for the same was lying on the piano in the parlor, with the other presents, and directed me to take possession of the same, which I did that evening, and remained in possession .of the same from that night, August 31, 1875, until some time in July, 1877. That upon the faith of the gift, I put permanent and lasting improvements upon the said property, by beautifying and ornamenting the grounds with trees and shrubbery, and by bringing water upon the same and digging ditches for that purpose. I also painted, the house on the outside, and papered and painted on the inside, and built a barn on the back of said lot.

“Some time the latter part of June or the first of July, 1877, I was coming from Miles City to Bozeman; I met my father near Countryman’s place on the Yellowstone, and he said that he desired to exchange the Koch property with me for the Randall property. We talked the matter over and agreed upon the exchange. I informed my wife, and she was satisfied to make the exchange, and we did so exchange the Koch property for the property in controversy, and I immediately took possession of the same, and my wife and myself have been continuously in possession from that time to the present time, and are in possession now. At the time of the exchange, my father agreed to make my wife a deed for the said property, and upon the faith of the agreement to make a deed, and the exchange of the property, we placed upon the property permanent and lasting improvements, amounting, besides my own labor, to the sum of $600.

“Prior to my marriage and the gift of the Koch property on the 31st of August, 1875, my father removed all his furniture, except that portion he gave to me at the time of my marriage, from the Koch property to the Northern Pacific Hotel, and he never occupied it or exercised any control over it from and after August 31, 1875, until he got it back from us by virtue of the trade and exchange in July, 1877, nor did he ever exercise any ownership or control over the Randall property from July, 1877, up to this time.

“In 1875, at the time of the gift, my father had at least $100,000 in cash and personal property, besides his real estate, which was valued and was worth $75,000. At that time there were no debts, liens or incumbrances whatever against my father that I know of. I was his agent at the time and in a situation to know his financial condition and standing.”

Madison M. Black, Rosa G-. Black, James D. Chestnut, L. J. Morrill, Robt. P. Vivion, A. Lamme and C. P. Blakely testified as follows: “That they were present at the Northern Pacific Hotel, in Bozeman, on the night of August 31, 1875, at a reception following the marriage of said defendants on that date; that it was the general talk and understanding at the time that Leander M. Black, the father of said Madison M. Black, had given to the defendants as a wedding present the land and dwelling-house thereon, described as Black’s residence in the answer, and situate in Bozeman; that an envelope was seen upon a piano, on which the wedding presents had been deposited, containing the words: ‘Deed to house and lot, presented by L. M. Black,’ and that none of said witnesses saw any conveyance or deed of said property to any parties.”

The plaintiff objected to the introduction of this testimony on the ground that the same was irrelevant and immaterial, and insufficient to convey or affect real property, and saved an exception.

Leander M. Black testified: “Madison is my son, and Rosa Gr. is his wife. They were married at Bozeman in August, 1875. I was present at the wedding. I was the owner of a lot on corner of Babcock and Black streets, Bozeman. It had a frame cottage on it, which, at the time of the wedding, I gave to them (my son and wife) as a wedding present. Notice of this fact was published in one of the Helena papers, I think the Herald, as among the wedding presents. I do not remember whether I made a conveyance to them of said property, by deed, at that time or not. They immediately after the wedding took possession of said house and premises, and occupied the same until about the summer of 1877. The consideration for this present was the natural love and affection I felt for my son. If there was no deed executed and recorded it was simply neglect on my part, as I would have made it at any time, if called upon, but my attention was never called to it. The intent of the gift was to convey the property absolutely, and I so regarded it as conveyed.

“The property was not incumbered at the time the gift was made. My liabilities did not exceed my assets. I can safely say that I was then worth at least $100,000, over and above all debts, liabilities and exemptions whatever.

“ Some time in the summer of 1877 I made a proposition to them to exchange a house and two corner lots, known as the Randall property, in Bozeman, for the one they occupied; and I told Rosa, one of the defendants, at the time, that if they would exchange I would deed the premises known as the Randall property to her individually, giving the title in her name, which I neglected afterwards to do. She and Madison were both satisfied to do this. It was simply an exchange of properties which we all considered of equal value, and there was no difference paid either way. After the exchange I sold the first piece to Peter Koch.”

Appellate courts pass upon objections that are raised and properly saved in the court below. If, upon the trial, incompetent or irrelevant testimony is received in evidence without objection, the question of its admissibility cannot be raised in the supreme court for the first time.

Appellants contend that there is no evidence to support the findings of fact made by the court, that Leander M. Black executed to the defendant Rosa G-. Black a deed of the Koch property, for the reason that, before any secondary evidence could be given of the existence or contents of such deed, its loss must be accounted for; and for the further reason that, it being claimed that such a deed was once in existence, the court should have required its production, or, if it had been lost' or destroyed, proof of such loss or destruction, before permitting any proof of its contents whatever.

The answer to this is that no such objection was made upon the trial. The point of the objection and exception must be particularly and specifically stated, and this to enable the trial court to correct its own errors and to enable the party to remove the objection if possible. For this reason the rale is general, that the appellate court reviews only what the lower court has passed upon. A party cannot permit in competent testimony to be received in evidence without objection, and in the appellate court ask to have the case reversed because incompetent evidence has been received.

Neither can he object to testimony upon the trial for the reason that the testimony is immaterial or irrelevant, and in the appellate court object to it for the first time for the reason that it is incompetent. The point of the objection and the reason for it must be stated and saved in the bill of exceptions.

The testimony of Madison M. Black, Rosa G-., his wife, and of Chestnut, Morrill, Vivion, Lamme and Blakely, that they were present at the reception that followed the wedding, and heard the general talk that Leander M. Black, the father, had given to the defendants as a wedding present, the lot and dwelling-house thereon, mentioned in the answer and described as Black’s residence, and that they saw an envelope upon a piano, on which the wedding presents had been deposited, containing the words: “Deed to house and lot, presented by L. M. Black; ” and that none of said witnesses saw any conveyance or deed of said property to any parties, was objected to for the reason that the same was irrelevant, immaterial, and insufficient to convey or affect real property.

It was not irrelevant or immaterial to prove the existence of this deed, and as preliminary to and as tending towards such proof, it was competent to establish the fact that a paper or envelope, marked as described, was seen among the other wedding presents. And if the contents of the deed were proved without objection, it is an error that we cannot reach. The insufficiency of testimony does not have to do with its competency, and if competent testimony, or such that we must hold competent because not objected to, supports the finding, it will not he disturbed.

But the question as to the competency or materiality of the testimony in relation to this deed is not vital to the case. The testimony conclusively shows:

First. That on the 31st day of August, 1875, the date of the marriage of his son Madison M. with Rosa G-., the father, Leander M. Black, was the owner of property, over and above all debts, liabilities and exemptions, of the value of $100,000.

Second. That upon that day, as a marriage gift, he gave to the defendants the house and lot known herein as the Koch property, and that they on that day immediately entered into the exclusive possession thereof, made valuable improvements thereon with the knowledge of the donor, and lived and resided in the house for the period of about two years.

Third. That on or. about the 1st day of July, 1877, while so in possession of the Koch property, they entered into an agreement with Leander M. Black to exchange the Koch property for the Randall property (the property in question); and that in pursuance of such agreement and exchange of properties (which were of the same value), they, entered into the actual possession and occupancy of the Randall property and have ever since held possession and occupancy of the same.

Fourth. That this exchange was made in good faith by the parties, and accepted by the defendants and the said Leander M. Black as a bona fide .transfer of said property, and all the rights, title and interest therein, from one party to the other, but that no deed or memorandum in writing was made at the time of the exchange and transfer aforesaid.

Fifth. That upon receiving and entering into the occupancy and possession of the said property under and in pursuance of such exchange and transfer, the defendants on account thereof, and relying in good faith upon the same, made valuable and permanent improvements upon said property with the knowledge of the said L. M. Black, amounting to the sum of $600, besides the work of the defendants thereon.

Sixth. That after said exchange and transfer the said L. M. Black conveyed by deed to E. W. Toole the said Randall property in trust for these defendants, and the said E. W. Toole, in pursuance of his trust, conveyed by deed the same to said defendants; and that soon after such exchange of property the said Leander M. Black conveyed the property he received in exchange to one Peter Koch.

The testimony establishing the foregoing facts is direct, clear and conclusive. It comes up to the requirements that, “in cases of parol gifts or parol sales made by a father to a son, there is peculiar reason why the latter should be held rigidly to the proof of all those facts which courts of equity have been accustomed to regard as equivalent to a written contract.” Harris v. Richly, 56 Pa. 398. “ The very nature of the relation (that of parent and child), therefore, requires the contracts between parents and children to be proved by a kind of evidence that is very different from that which may be sufficient between strangers. It must be direct, positive, express and unambiguous. The terms must be clearly defined, and all the acts necessary for its validity must have especial reference to it and nothing else. ” Poorman v. Kilgore, 2 Casey, 372.

Here, then, we have the case of a parol gift of land from father to son, proven and established as the law requires, with notorious and exclusive possession taken, retained and continued in pursuance of an agreement to give the same, with full knowledge upon the part of the donor, together with permanent and lasting improvements placed upon the land by the donee upon the faith of the agreement to give, and this with the full knowledge of the donor. I believe that such a possession takes the case out of the statute of frauds, and that the title of the donee will be protected in equity. If this were not so, the statute to prevent frauds and perjuries would encourage and protect them. Such a title could be enforced as against the donor; and if this is the case, the donee would have the right to exchange his property for other property, and his equities would follow him and attach to his possession of the property so received in exchange.

Says Mr. Browne in his work upon the Statute of Frauds: “A principle analogous to that upon which taking possession-of and making improvements upon the land claimed, protects the claimant from the operation of the statute of frauds in courts of equity, is,applied to gifts of lands, upon the faith of which such possession has been taken and such improvements made, although there is in such cases no contract enforceable even at common law, the gift, if strictly such, being without a consideration sufficient to support an action for breach of the promise to give.” Sec. 491a, p. 549.

Says Tilghman, C. J., in Syler v. Eckhart, 1 Bin. 380: “Although the courts are not disposed to extend the principles on which parol agreements concerning lands have been confirmed, farther than they have already been carried, yet they are bound by what has been decided. It has been settled that where a parol agreement is clearly proved, in consequence of which one of the parties has taken possession and made valuable improvements, such agreement shall be carried into effect. We see no material difference between a sale and a gift; because it certainly would be fraudulent conduct in a parent to make a gift which he knew to be void and thus entice his child into a great expenditure of money and labor, of which he may reap the benefit himself.”

If, in such a case, the child acquires such an equitable interest in and title to the property as that he can hold it against the parent, so also he can hold it as against any creditor of the parent. The creditor only succeeds to the rights of the debtor. He acquires by attachment and sale only such interests as the debtor might sell or dispose of for himself.

In Freeman v. Freeman, 43 N. Y., Grover, J., speaking for the court of appeals, says: “The question then is, whether a parol promise by one owning lands, to give the same to another, will be enfoi’ced in equity, when the promisee has been induced by the promise to go into possession, and with the knowledge of the promisor make comparatively large expenditures in permanent improvements upon the land. It is and must be conceded that, if the promise by parol was to sell the land for a valuable consideration to be paid therefor by'the promisee, such promise, under this precise state of facts, would be enforced. The ground upon which this equitable jurisdiction is exercised, although sometimes said to be the part performance, really is to prevent a fraud being practiced upon the parol purchaser by the seller by inducing him to expend his money upon improvements' upon the faith of the contract, and then deprive him of the benefit of the expenditure and secure it to the seller by permitting the latter to avoid the performance of his contract. In the case supposed there has been no part performance of the contract, strictly speaking, except the taking possession, no part of the purchase money having been paid; and yet the cases are numerous where performance of such contract has been decreed in equity where possession has been taken under the contract and large expenditures upon permanent improvements made. In the present case possession has been taken under the promise and the expenditures upon improvements made; yet it is insisted that equity will not enforce the promise, for the reason that it was to give, instead of having been to sell the land for a valuable consideration. Permitting the promisor to avoid performance operates as a fraud as much in the latter case as in the former, so far as expenditures upon improvements are concerned. ' The counsel for the appellant insists that there has been no part performance of the contract to give the land. The answer to this is, that possession has been taken and valuable improvements made upon the faith of the promise. These acts constitute part performance by the respondent. It is true that the plaintiff has done nothing by way of performance on his part. It is not necessary that he should. Part performance by the party seeking to enforce the contract is sufficient. It is further insisted that an executory promise, not founded upon any valuable consideration, is a mere nude pact, furnishing no grounds for an action at law, and that performance of such a contract will not be enforced in equity. This is true so long as the promise has no consideration. Anything that may be detrimental to the promisee or beneficial to the promisor in legal estimation will constitute a good consideration for a promise. Expenditures made upon permanent improvements upon land with the knowledge of the owner, induced by his promise, made to the party making the expenditure, to give the land to such party, constitute in equity a consideration for the promise. The statute of frauds has no bearing upon such a case.”

Says Justice Gibson, in Sowers, Adm’r, v. Weaver, 84 Pa. 267: '‘That a parol gift from a parent to a child, properly executed by possession and improvement, is valid, notwithstanding the statute of frauds and perjuries, will be found to be the settled law of this state since the case of Syler v. Eckhart, 1 Bin. 378.” See, also, Stewart v. Stewart, 3 Watts, 253; Young v. Glendening. 6 Watts, 509; Bright v. Bright, 41 Ill. 97; Shellhammer v. Ashbough, 83 Pa. 24; Lobdell v. Lobdell, 33 How. 347; Crosbie v. McDaniel, 13 Ves. 147; Shepard v. Bevin, 9 Gill, 32; Murphy v. Steel, 43 Texas, 123; Neales v. Neales, 9 Wall. 1; Parsons on Contracts, vol. 3, p. 359; Hardesty v. Richardson, 22 Am. Rep. 57; 8 Am. Rep. 665, note; Koutz v. Ritner, 55 Ill. 57; 3 Am. Rep. 657; 19 Am. Dec. 398, and note.

Applying now the doctrine of the law, as indicated by these decisions, to the case under consideration, we hold that these defendants, having taken the notorious and exclusive possession of the Koch property, with the knowledge of L. M. Black, in pursuance of his parol gift of the same to them, and made permanent and lasting improvements thereon upon the faith of such gift, with the knowledge of the donor; and having retained and continued such possession with like knowledge, and upon the faith of such gift, they thereby so became the owners of the property as that, at the time they exchanged the same for the Randall property, they might have compelled a conveyance thereof to them from L. M. Black, the donor. And being so the owners, they had the right to sell the property, or to exchange it in good faith for other property, with whomsoever they would and at their pleasure; and when they did exchange it for the Randall property, the transaction was equivalent to a sale and purchase, with1 possession in pursuance thereof and payment of the purchase money in full. The Koch and Randall property were of equal value. The one paid for the other. By virtue of such exchange the defendants entered into and retained possession of the Randall property, and made permanent and lasting improvements thereon upon the faith thereof, and with the knowledge of L. M. Black.

All this occurred months before Story, the appellant, levied his attachment upon the property in his action against L. M. Black, and hence at the time of such levy the defendants were the owners of the entire equitable interest in and title to the property, and Black had no interest therein that could be reached by attachment or otherwise. At the time of the attachment Black held the naked legal title to the property, but having been fully paid therefor, and the defendants being in possession, he became trustee of the property and held the title in trust for the real o wners. His conveyance to Toole, and Toole’s conveyance to defendants, was in execution of this trust.

The defendants being in possession at the time of the levy of the attachment by Story, he was thereby charged with notice of all their rights and equities in the premises. Hughes v. United States, 4 Wall. 232; McKenzie v. Jewett, 15 Ohio St. 168; Landis v. Brant, 10 How. (U. S.) 348; Jones v. Marks, 47 Cal. 242; Ray v. Birdsey, 5 Denio, 626.

The purchaser at a sale of real property on execution acquires all the right, title, interest and claim of the judgment debtor therein (Code, sec. 329); but he acquires only such right and interest, and he takes the property subject to all the rights and equities of third parties which are capable of being enforced against the judgment debtor. “ The rule of caveat emptor applies to execution sales.” Chumasero v. Viall, 3 Mont. 379.

Says Clifford, J., in Brown v. Pierce, 7 Wall. 218: “The correct statement of the rule is, that the lien of the judgment creates a preference over subsequently acquired rights, but in equity it does not attach to the mere legal title to the land, as existing in the defendant at the time of its rendition, to the exclusion of a prior equitable title in a third person.”

“Guided by these considerations, the court of chancery will protect the equitable rights of third persons against the legal lien, and will limit that lien to the actual interest which the judgment debtor had in the estate at the time the judgment was rendered.” How, Petitioner, 1 Paige Ch. 128; Ellis v. Towsley, id. 283; White v. Carpenter, 2 Paige, 219; Buchanan v. Sumner, 2 Barb. Ch. 181; Lounsbury v. Purdy, id. 494; Kirsted v. Avery, 4 Paige Ch. 15; Averill v. Leucks, 6 Barb. Ch. 27; Doe ex dem. Strong v. Smith, 3 McLean, 362; Mason v. Wallace, id. 148; Bank of Muskingum v. Carpenter's Adm'rs, 7 Ohio, 21; Daniel Lake v. Samuel Doud et al. 1 Ohio, 415.

The judgment is affirmed, with costs.

Judgment affirmed.