Albino v. Albino

Decision Date13 September 1977
Citation568 P.2d 1344,279 Or. 537
PartiesVictor P. ALBINO and Madonna Albino, husband and wife, Appellants, v. Catherina ALBINO and Frank Albino, wife and husband, Respondents.
CourtOregon Supreme Court

Frank E. Bocci, P. C., Eugene, argued the cause and filed the brief for appellants.

L. M. Giovanini, Beaverton, argued the cause and filed the brief for respondents.

Before DENECKE, C. J., and HOWELL, LINDE and CAMPBELL, JJ.

CAMPBELL, Justice Pro Tem.

This is a suit in equity to declare a constructive trust and to require the defendants to hold the sum of $18,380 in trust for the plaintiffs.

The plaintiff Victor P. Albino is the natural son of the defendant Catherina Albino and the stepson of the defendant Frank Albino. The plaintiff Madonna Albino is the wife of plaintiff Victor Albino.

The complaint alleges that in January, 1956, the plaintiffs entered into a written agreement to purchase Lots 3 and 4, Sunset View, located in Washington County, Oregon, from the agents of Catherina Albino for the sum of $8,500. The plaintiffs were credited with a down payment of $4,250 and made monthly payments upon the purchase contract until March of 1962, reducing the balance due to $1,620. In March, 1962, defendant Catherina Albino represented that she was in dire need of funds, whereupon the plaintiffs redelivered the real estate contract to her in order that she might sell the property for $23,000 to relieve her financial situation. The plaintiffs allege that they redelivered the contract without consideration and "in reliance upon their confidence in Defendant Catherina's promise to repay them." The defendants allegedly used the funds for their own purposes to the exclusion of the plaintiffs, except they did pay the plaintiffs the sum of $3,000. There was a balance due on the purchase price under the contract from the plaintiffs to defendant Catherina of $1,620. Therefore, the plaintiffs prayed that the balance of the sale, the sum of $18,380, be held in trust. The plaintiffs also asked for punitive damages.

The defendants' amended answer denied the plaintiffs' complaint and by way of an affirmative defense alleged that the plaintiffs should be barred by laches.

The trial court found for the defendants and dismissed the plaintiffs' complaint. We review de novo. ORS 19.125.

At the time of trial the plaintiffs, Victor and Madonna, had been married 29 years. Madonna was 54 years of age. Victor's age is uncertain, but he was born before 1924 and was in the military service in World War II. The plaintiffs have lived all of their married lives in Eugene. Madonna completed one year of college in Iowa. She taught in kindergartens and rural schools and worked as a waitress. Victor managed a club in Eugene for 18 years. He had some health problems in 1971 caused by a heart attack.

The defendants, Catherina and Frank, were married in 1924, divorced in 1956, and remarried in 1970. At the time of the trial Catherina was 83 years of age and Frank was 79. Catherina had a total of nine children, of which five were born to her and Frank. Both defendants' formal education was limited to three years of school in Italy. As late as 1965, at least a part of Catherina's correspondence was written in Italian. Frank had worked as a coal miner in Utah and as a carpenter in the Beaverton area. Catherina, or "Mama," had never worked outside the home, but she had developed an expertise in buying and selling real property in Washington County. She had a business card printed with her name, a red rose, and the words "Property Investments."

Catherina did not testify at the trial. Frank was Catherina's power of attorney and between them they own five rental houses and have overall assets in excess of $100,000.

In June, 1951, Madonna and Catherina entered into a contract to purchase Lot One of Block E in Steele's Addition to Beaverton for the sum of $12,000. Each of them paid one-half the required down payment of $1,000. The balance was to be paid in monthly installments of $100, including interest at the rate of 5 percent per annum. Although Madonna did pay taxes in 1954 and 1955 totaling $505.65, she testified that she did not pay any of the monthly installments because Catherina had arranged that the rent would pay the taxes and the contract balance. The defendants contradicted that assertion by pointing out that some of the tenants did not regularly pay their rent and that at least one tenant had to be sued. In March, 1967, Catherina granted a 10-year lease on the property for $75 per month plus the taxes. Madonna refused to join in this lease. The contract balance was ultimately paid, and in July, 1968, Madonna and Catherina received and recorded a warranty deed vesting them with the title to the property as tenants in common.

The plaintiffs claim that prior to January, 1956, they had been sending to Mama at irregular times various amounts of money for investment in real estate. These sums totaled $4,250 and were separate and apart from Madonna's one-half interest in the lot in Steele's Addition. Plaintiffs believed that Mama was investing this money in various tracts and that they did not have an identifiable interest. Plaintiffs then told Catherina that they wanted to invest in one tract separate from other members of the family.

According to the plaintiffs' testimony, Mama presented them with a contract in January, 1956, to buy the land in question Lots 3 and 4, Sunset View Acres, Washington County. Victor and Madonna both testified that the contract was dated January 1, 1956, and that the sellers were Angelina J. Albino and Anita M. Albino. The sale price was allegedly $8,500, of which $4,250 was acknowledged as having been received as the down payment, and the balance was to be paid at the rate of $50 per month, including interest at 5 percent per annum. 1 The contract was alleged to have been signed by the plaintiffs and Catherina at the latter's home in Beaverton. The contract was not recorded.

Angelina J. Albino and Anita M. Albino, both single women in January, 1956, are the sisters of Victor and the daughters of Catherina. Anita testified that in 1956 she was living in California and that she did not sign a contract to sell Lots 3 and 4 of Sunset View Acres. Her sister Angelina was residing in Maryland at the time of the trial. The plaintiffs tried to explain the involvement of Angelina and Anita by saying that it was Mama's custom to place the names of her children on documents in real estate transactions. Victor testified, "I know she had my name down on four or five pieces of property like she had my sisters down on the deal." However, a search of the records of Washington County did not support the plaintiffs' position. Only one quitclaim deed was found from Joseph Albino to Catherina Albino in 1962.

Commencing in February, 1956, Mrs. Victor Albino each month drew a check in the amount of $50 on a Eugene bank and forwarded it to Catherina Albino in Beaverton. The last check was sent in February, 1962. There were 73 payments of $50 for a total of $3,650. 2 The plaintiffs also paid the taxes on Lots 3 and 4, Sunset View Acres, commencing with the fiscal year 1956-57 through the year 1961-62. The total amount of taxes paid was $603.62. The tax notices, together with a notice of change in assessed valuation, were sent to Marie Anna Bauer, c/o Mrs. Victor Albino, 221 West 13th Avenue, Eugene, Oregon. 3

The plaintiffs testified that on March 1, 1962, Mama Catherina called them in Eugene and wanted them to return to her the contract of January 1, 1956, covering Lots 3 and 4 of Sunset View Acres. She wanted to sell the property for $23,000 and use the money to relieve some financial difficulty. The plaintiffs were reluctant to do this. Finally, the plaintiffs talked to Catherina's lawyer who said that "Mama was in a very great financial bite and unless we would consent to the sale of this property * * * she had a lot to lose." 4 Plaintiffs then consented to mail the contract to the lawyer. Mama promised the plaintiffs on the telephone on that date that "when she got back on her feet * * * she would take care of the responsibility with us." Before mailing the contract to the lawyer, Madonna claims that she typed out and kept a synopsis of it, as follows:

"CONTRACT OF LOTS # 3 & # 4 SUNSETVIEW

"This contract made January 1st 1956 between Angelina J. Albino and Anita M. Albino both single women of the county of Washington, State of Oregon, hereinafter called the 1st party and VICTOR P. ALBINO and MADONNA ALBINO, husband and wife of Lane County and State of Oregon hereinafter called the 2nd party as hereinafter specified the 1st party hereby agrees to sell and the 2nd party agrees to purchase, the following described real estate, situated in the County of Washington State of Oregon, towit:

"Lots # 3 and # 4 Sunset View, Washington County, State of Oregon for the sum of $8,500 on account of which $4,250 is paid on the execution hereof (the receipt of which is hereby acknowledged by the 1st party) and the remainder to be paid to the order of the 1st party with interest at the rate of 5% per annum on the dates and in the amounts as follows:

"At the rate of $50.00 per month, which will include principle (sic) and interest. The First payment will be due of the 1st doy (sic) of February, 1956 and the 1st of each month thereafter until the full amount is paid."

In March, 1962, Catherina sold Lots 3 and 4 of Sunset View Acres to Robert E. and Virginia L. Nelson for the sum of $23,000. The purchasers paid the sum of $3,600 cash and gave to Mama a mortgage in the amount of $19,400, payable at the rate of $300 per month including interest at the rate of six percent per annum. The plaintiffs received no money from this sale.

Unknown to the plaintiffs, Catherina Albino had contracted on February 4, 1956, to purchase Lots 3 and 4, Sunset View Acres, from ...

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