Wilson v. Rodgers

468 S.W.2d 739, 250 Ark. 335, 1971 Ark. LEXIS 1264

• Court: Supreme Court of Arkansas
• Decided: April 5, 1971
• Docket: 5-5415
• Status: Published

Opinions

J. Fred Jones, Justice.

This is an appeal by J. B. Wilson from an adverse decree of the Arkansas County Chancery Court, Northern Division, in a case wherein J. B. contended that he is the owner of a one-half undivided interest in certain real property in Arkansas County, the legal title of which was held in the name of his brother, George, who is now deceased.

Until George Wilson’s death, he and J. B. were partners in livestock and farming operations on the land involved in this case. The litigation arose when the widow and heirs of George Wilson filed a petition in chancery for the appointment of a receiver and for an accounting of the partnership assets, consisting primarily of cattle and hogs. They also alleged that J. B. was slandering George’s title to the land, consisting of some 670 acres, by claiming that he owned an interest in the land. J. B. Wilson filed a general denial and alleged rightful possession and control of the partnership assets. He filed a cross-complaint against the widow, Mrs. Kathryn Wilson, as well as against Joan Rodgers, Nancy Tullos, and Kalynn Harris, the three married daughters and surviving heirs of George Wilson, in which he alleged that the lands were partnership assets; that the legal titles to such lands as were held in the name of George Wilson were held in trust for the partnership; that he, J. B. Wilson, owned a one-half undivided equitable interest in the lands and he prayed for a decree to that effect. The chancellor confirmed title to the lands in the estate of George Wilson subject to the rights of dower and to outstanding mortgages and deeds of trust. On appeal to this court J. B. relies on the following points for reversal:

“The findings and decree of the lower court are not supported by the evidence.

It was error to refuse to strike the answer to defendant’s counterclaim, which answer was not timely filed; and refuse to grant counterclaimant a judgment in accordance with the prayers of the counterclaim.

The lower court erred in ruling that the Dead Mans Statute applied and in not permitting appellant to testify about conversations and transactions between him and his deceased brother, because the controversy over the land did not involve the deceased partner’s estate.

It was error to permit appellees’ witnesses to testify about self-serving declarations made by the deceased partner.”

J. B. Wilson alleges a constructive trust in the lands as distinguished from an express trust. He contends that all the property was purchased with partnership funds, and that a constructive, or resulting trust, was created by operation of law. The burden of impressing a constructive trust on the real property in this case rested on the appellant, J. B. Wilson, and he attempted to do so by parol evidence.

Of course, a constructive trust may be proved by parol, but parol evidence for that purpose is received with great caution, and the courts uniformly require the evidence to establish such trusts to be clear and satisfactory. Sometimes it is expressed that the “evidence offered for this purpose must be of so positive a character as to leave no doubt of the fact,” and sometimes it is expressed as requiring the evidence to be “full, clear and convincing,” and sometimes expressed as requiring it to be “clearly established.” Crittenden v. Woodruff, 11 Ark. 82; Trapnall v. Brown, 19 Ark. 39; Johnson v. Richardson, 44 Ark. 365; Richardson v. Taylor, 45 Ark. 472; Robinson v. Robinson, 45 Ark. 481; Crow v. Watkins, 48 Ark. 169, 2 S. W. 659; Camden v. Bennett, 64 Ark. 155, 41 S. W. 854; Tillar v. Henry, 75 Ark. 446, 88 S. W. 573; 1 Perry on Trusts, § 137; Broderick & Calvert v. Flannigan, 176 Ark. 1203, 6 S. W. 2d 8; Spencer v. Johnson, 178 Ark. 1200, 13 S. W. 2d 585.

In Tillar v. Henry, supra, we said:

“Titles to real estate cannot be overturned by a bare preponderance of oral testimony seeking to establish a trust in opposition to written instruments. The conservatism of the courts has prevented the tenure of realty being based on such shifting sands.”

And again in Nelson v. Wood, 199 Ark. 1019, 137 S. W. 2d 929, we said:

“The general rule, as well as the established rule in this state, seems to be well settled that in order for one to establish by parol either a resulting or constructive trust, the evidence must be ‘full, clear and convincing,’ ‘full, clear and conclusive,’ ‘of so positive a character as to leave no doubt of the fact,’ and ‘of such clearness and certainty of purpose as to leave no well founded doubt upon the subject.’ These requirements run through a long line of cases from this court.”

This same rule was more recently applied in the case of Darsow v. Landreth, 236 Ark. 189, 365 S. W. 2d 136. So, measuring the evidence in the case at bar by the above rules of law, we now consider the evidence in this case.

The real property involved consists of five separate tracts purchased from different individuals. Deeds to three of the tracts are in the record and the deeds to two of the tracts are not in the record. The record consists of five volumes totaling 1,189 pages. Much of the evidence is directed to the admitted partnership assets consisting of personal property, and the evidence directed toward impressing a trust on the real property falls short of being so clear, convincing and satisfactory that we would be justified in overruling the decree of the chancellor, who saw and heard the witnesses as they testified.

The undisputed evidence is clear that George and J. B. Wilson were near the same age, and had held themselves out as business partners all of their adult lives. After their father died intestate when they were quite young, they continued to operate an oil business left to them by their father. When George married, he brought his wife to the family home and J. B. continued to live with George and his wife until he also married. After losing the oil business and their home, through mortgage foreclosure during the depression years, George and J. B. remained closely associated with each other and got into the business of farming and raising livestock under the partnership title “Wilson Brothers,” and this relationship continued until George’s death on July 1, 1967.

All of the deeds of conveyance to the lands here involved were made to George Wilson and to his heirs and assigns forever, and the record is completely void of any competent evidence as to why this was done. It would be next to impossible, and of little value, to analyze the separate testimony of the many witnesses who testified, but the record is clear that most everyone considered the Wilson brothers as a partnership; and most everyone assumed that the partnership included the joint ownership of the land. A number of witnesses called by J. B. testified that George always referred to “us,” “our,” “Jay and I,” and "mine and Jay’s,”, when discussing the farm and its operation. In the sale of some of the land with conveyance to George, the grantors testified that they made the deal with J. B. One of the grantors testified that he dealt with J. B. and sold the land to the Wilson Brothers. The deed, however, was made to George, his heirs and assigns, and there is no evidence as to why this was done. Several witnesses testified as to business they conducted with the Wilson Brothers. Those witnesses called by J. B. testified that they dealt directly with J. B. in such matters as clearing land, sinking a well, arranging to rent land, baling hay, purchasing and selling livestock and feed, and in doing dragline work on the farm. Some of these witnesses testified that when they attempted to do business with George, he would delay final decision until he could talk with J. B.

The witnesses who were called by Mrs. George Wilson and the heirs, testified that they transacted all their business with George and that George did business with them without having to consult with J. B. One or two of these witnesses testified that George referred to the land as belonging to him and had stated that he intended it should go to his wife and children at his death. The overall testimony of all the witnesses leaves the preponderance of the circumstantial evidence fairly even on both sides.

The evidence is clear that George Wilson assessed the real property taxes for a number of years in the name of Wilson Brothers. On the income tax returns the profits from the farm were divided equally between George and J. B. Loans from the Production Credit Association were made to George and J. B. jointly until some individual judgments were obtained against them and the procedure was changed, at the insistence of the association. The amounts of the judgments against George were less than those against J. B., so they borrowed money and paid off the judgments against George and the P. C. A. loans thereafter were made to George or in his name. All of this evidence definitely established a partnership relation between George and J. B. in the operation of the farm as the Wilson Brothers farm or ranch.

In spite of the voluminous record in this case, the record is vague or silent as to the two most important aspects of the case. It is vague as to the bank accounts and it is silent as to why the deeds were made to George, his heirs and assigns. J. B. testified that the bank accounts were joint accounts or Wilson Brothers partnership accounts and that both he and George collected money from the farm operations and deposited all they made into the partnership accounts. He testified that they each drew money from the accounts by check when and as they needed it. J. B.’s primary contention is that the lands were purchased by the Wilson Brothers and paid for out of their joint funds.

Numerous canceled checks were offered in evidence. A number of them dated in the 1950’s were signed “Wilson Brothers by J. B.” Some were signed “Wilson Brothers by George,” some were signed “J. B. 8c George Wilson,” some were signed “George and J. B. Wilson by George,” and some were signed “George and J. B. Wilson by J. B.” Some of the checks were signed “George Wilson by J. B.,” but most of the checks introduced by the appellees were dated in the 1960’s and were simply signed “George Wilson.” None of the checks indicate how the accounts were actually carried at the banks and no bank officer testified as to how the accounts were actually carried or what arrangements were made between the banks and the Wilsons in connection with the accounts. Richard Trice testified that he worked in the First National Bank in Stuttgart back in the ’20’s and had known the Wilsons since 1926. He testified that they did business at the bank as “Wilson Brothers” while he worked there. A number of duplicate bank deposit slips were introduced into evidence by the appellees. They were dated from 1957 through 1967; some of them were made out to George Wilson and some were made out to Nancy Wilson. From the documentary exhibits it is impossible to tell whether the bank accounts were joint, or partnership accounts, or whether they were the individual or personal accounts of George or J. B. with checking authority granted to the other. No bank official testified on this point. J. B. also introduced a few deposit slips made out to him.

Mr. J. B. Wilson testified that after it was agreed that the P. C. A. loan would be made in George Wilson’s name rather than the partnership, the business was carried on as before. In this connection he was asked the following questions and made the following answers:

“Q. What about the bank accounts, still carried as Wilson Brothers? were they

A. No, sir, we carried the bank account in Nancy Tullos’ name.

Q. In what bank?

A. In the First National Bank at DeWitt and finally George put an account up here in this bank, once in the Farmers and Merchants and once in the Peoples, in fact he had an account in Peoples when he passed away.

Q. Did you ever have any in the DeWitt Bank and Trust Company?

A. He could have, yes sir, before that but it was before that time.

Q. Mr. Wilson, did you continue to write checks on that bank account?

A. Yes, sir.

Q. Did you write them yourself and sign them?

A. Yes, sir. I put George Wilson by J. B. Wilson.

Q. And did they go through?

A. Yes, sir.

Q. Now did, was there any other provision made for your cashing checks after that change was made?

A. No, sir, George would just give me a book full of signed checks so anything I needed or that come up I could write one.”

Mr. J. B. Wilson testified that he deposited all monies that he made individually, as well as what he collected from the partnership business, into the partnership account.

“Q. You mean that you deposited to the credit of Wilson Brothers all the money that you made individually?

A. Either to Wilson Brothers or Nancy Wilson’s account or George Wilson’s account at the Peoples National Bank because we carried that account in his name. And I have slips for some of the deposits I made, not every one of them because I didn’t keep every deposit slip.”

In rebuttal J. B. testified that he wrote some checks on the George Wilson account after George’s death, but that the account was not in George Wilson’s name. He testified that the account was in Nancy Wilson’s name and that he had authority to write checks on it. He testified that the money in the account was not any more George’s money than it was his; that one-half of the account belonged to him, and that he deposited money to the account.

“THE COURT: Why was that account in Nancy Wilson’s name?

A. George put it in there back when he lived in DeWitt.

THE COURT: Why?

A. I couldn’t tell you that.

THE COURT: Well you were his partner weren’t you?

A. Yes, sir, he just said let’s carry one account in Nancy’s name and I said all right so we can both write checks on it and it was back when her name was Nancy Wilson, she hadn’t even married.

THE COURT: Was there any judgment against you or George at that time?

A. There was against me and at one time there were some against George but I think there was some judgments that we have paid up but that could have been the reason that he did that. Then is when he started getting the account in this bank too with just George Wilson on it.

■JF 7F

THE COURT: I understood you to testify those checks were George Wilson by you.

A. I signed his name, that’s the way we always signed it, George Wilson by me but it come out of Nancy’s account. We didn’t put Nancy’s name, we put George Wilson by J. B. Wilson, and it come out of her account.

THE COURT: And the bank let you do that?

A. That’s what they did. That’s how they are signed and they come out of Nancy’s account.”

Mrs. Lillian Young, an abstractor, testified that about a year, or two years, before George Wilson died, J. B. Wilson came to her office and asked her to prepare a deed for his brother, George Wilson, and his wife, to sign conveying J. B. a one-half interest in the land held in the name of George Wilson. She testified that a few days later J. B. Wilson asked her if she had prepared the deed and she told him that she had not. On this point Mrs. Young testified as follows:

“A. I called Mr. George Wilson and asked him to come to my office and he did and I told him that his brother had told me to prepare a deed from Mr. George Wilson and his wife to Mr. J. B. Wilson, and he said, ‘No, you don’t prepare that deed.’

Q. Did he say whether or not J. B. Wilson had any interest in the property or whether he was the owner of it or just tell you not to prepare any such deed?

A. He told me not to prepare the deed, that was his property and it was to go to his wife and girls when he was no longer living.”

She testified that she had prepared mortgages and deeds for the Wilson Brothers but that she always looked to George Wilson because that was the one with whom she dealt.

“A. George Wilson paid me. He gave me the money.

Q. You can have these trusts but did Wilson Brothers pay you for drawing the deeds and abstract work?

A. These checks may have been given to me that way but I always looked to George Wilson because that was the one with whom I dealt.”

The probative value of this testimony was diminished to some extent on cross-examination when Mrs. Young testified that she addressed her bills for service in care of J. B. Wilson, and when she identified three checks signed “Wilson Brothers by J. B. W.” and made payable to her for abstract work and taxes. Mrs. Young explained that it was always hard for her to get in touch with Mr. George Wilson as he was always out in the country, but “as to Mr. J. B. Wilson, I could find him most any time around on the streets.”

The appellant J. B. Wilson’s witnesses testified that George had indicated all along that he and J. B. owned the land together as partners. J. B. testified that the land was bought and paid for with partnership funds. The appellees’ witnesses testified that George had indicated all along that the land belonged to him individually. The solemn deeds of record sustain the appellees’ contention and although there is ample evidence that J. B. was a full partner in the livestock and farming operations, we are left to surmise and conjecture as to why the legal title to the real property rested in George Wilson, his heirs and assigns. George Wilson was in bad health for a considerable period of time before his death, the real property was heavily mortgaged without assistance or objections by J. B. The record only contains circumstantial evidence that perhaps the deeds should have been made to George and J. B. as joint tenants when the property was purchased but this was not done. There is no evidence at all of why the deeds were made to George, his heirs and assigns when the property was purchased, and there is no clear and convincing evidence of why this court should do so now. We find no merit to the appellant’s other assignment or errors, so the decree is affirmed.

Affirmed.

Byrd J., concurs. Brown and Fogleman, JJ., dissent.