Arntson v. First National Bank of Sheldon
| Decision Date | 12 April 1918 |
| Citation | 167 N.W. 760,39 N.D. 408 |
| Court | North Dakota Supreme Court |
Action to quiet title.
Appeal from the District Court of Ransom County, Honorable Charles A. Pollock, Special Judge.
Judgment for defendants. Plaintiff appeals.
Reversed.
Reversed and remanded with directions.
Pierce Tenneson, & Cupler, for respondent bank.
No trust was ever created or existed in this case. The heirs (debtors) received their interest in the real estate and property by virtue of the statutes of succession and by operation of law, and not by any act of the decedent. Nothing was done by the deceased to complete a trust or to bring into existence a valid and legal trust. 39 Cyc. 43, 76; 1 Perry Trusts, 5th ed. § 99, p. 103; Brabrook v. Savings Bank, 104 Mass. 228; Jones v Lock, L. R. 1 Ch. 25.
"There must be some act of delivery out of the possession of the donor, for the purpose and with the intent that the title shall thereby pass." Minchin v. Merrill, 2 Edw Ch. 333; Howard v. Windham Co. Sav. Bank, 40 Vt. 597; Brabrook v. Savings Bank, 104 Mass. 231; Re Small, 50 N.Y.S. 341.
If anything remains for the donor to do to vest the legal title in the donee, the court cannot execute the trust if it is voluntary. 1 Perry, Trusts, 5th ed. § 100, p. 105.
The arrangement as made between the parties as disclosed was void as a testamentary disposition. No interest was to pass or vest until after the death of the father, the so-called trustor. Diefendorf v. Diefendorf, 8 N.Y.S. 617; Hill v. Hill, 7 Wash. 409, 35 P. 360; Chestnut St. Nat. Bank v. Fidelity Ins. Co., 136 Pa. 339, 65 Am. St. Rep. 860, 40 A. 486.
A testator cannot affect the equitable any more than the legal estate for the one is a constituent part of the ownership as much as the other. No such disposition as is here claimed can be made unless it be declared in writing in strict conformity with the statute regulating devises and bequests. 1 Perry, Trusts, §§ 89-94, pp. 91-93.
If a gift or testamentary disposition is intended and the instrument is informally executed, it cannot be held valid as a trust. 1 Perry, Trusts, § 97, pp. 99-100 and cases cited in note 1 (a).
An express trust in real property cannot be created or proved by parol. Comp. Laws 1913, §§ 5364, 5384, 5394, 5511, 5888; 39 Cyc. pp. 46, 49 and notes 65 & 66; Cardiff v. Marquis, 17 N.D. 110, 114 N.W. 1088; Carter v. Carter, 14 N.D. 66, 103 N.W. 425; Smith v. Mason, 55 P. 143; Von Trotha v. Banberger (Colo.) 24 P. 883; Reagan v. McKibben (S.D.) 76 N.W. 943; McCammon v. Pettitt, 3 Sneed, 242, 2 Devlin, Real Estate, 3d ed. § 1183.
Defendant's judgment became a lien upon the interest of Arntson, the heir, immediately upon his father's death. Comp. Laws 1913, § 7691; Union Bank v. Ryan, 23 N.D. 482; Yader v. Bank (Iowa) 119 N.W. 147.
A judgment creditor is placed in the same position as a purchaser or encumbrancer under our recording statute. Comp. Laws 1913, §§ 5594, 5727, 6755; Mer. St. Bank v. Tufts, 14 N.D. 238, 116 Am. St. Rep. 682, 103 N.W. 760; Ilveldsen v. First St. Bank, 24 N.D. 227, 139 N.W. 105.
Statement of facts by BRUCE, Ch. J.
This is an action to quiet title in the plaintiff, Peternelle C. Arntson, in certain real estate owned by her husband while living. The plaintiff claims under a deed executed by her sons after the death of their father, and in pursuance of an agreement made with him shortly before his death. The defendant bank claims title to the interest of one of the sons, Ingebrigt E. Arntson, and bases its claim on a purchase made by him on an execution sale for a deficiency decree on the foreclosure of a mortgage made by the said Ingebrigt Arntson, said mortgage having been made to the said defendant, and the defendant purchasing at its own sale, the levy having been made prior to the execution of the deed by the sons to their mother, but the sale being subsequent to execution and recording of the instrument.
Briefly and in chronological order the facts are as follows:
On August 7, 1912, respondent commenced an action to foreclose its mortgage on real estate owned by one I. E. Arntson, in Ransom county, the action being afterwards decided in favor of Arntson in the lower court and respondent herein appealed.
Meantime, and while the appeal was pending, Eric Arntson, the father of said I. E. Arntson, became sick unto death, called his five boys about his deathbed and said to them, in substance:
The five boys agreed to this and so told their father, who died a few days later, April 17, 1914.
About a month after this agreement between the father and sons and the father's death, this court reversed the decision of the lower court in the foreclosure action, and judgment was entered against I. E. Arntson; the land covered by the mortgage was sold, and a deficiency judgment for $ 669.31 entered.
In November, 1915, execution issued on this deficiency judgment and was levied on the interest of said I. E. Arntson in 260 acres of land of which his father, Eric Arntson, died seised,--the land the sons had agreed at their father's deathbed to convey to their mother.
On December 4, 1915, all the five boys joined in a deed to their mother of their father's land, said deed reciting that it was executed to carry out and execute the parol trust declared and created by their father at his death. This deed was recorded on December 4, 1915.
Thereafter, and on the 5th day of February, 1916, the sheriff sold the lands levied on, and the creditor defendant purchased at such sale, and this action was thereafter brought by appellant, the widow of Eric Arntson and the mother of the five boys, to quiet her title as against the sheriff's certificate held by such creditor bank, the respondent herein. Respondent counterclaimed, appellant replied, and the case was heard by Judge Pollock on said counterclaim and reply, and a decision rendered for respondent, whereupon this appeal was perfected and a trial de novo demanded.
BRUCE, Ch. J. (after stating the facts as above). The question to be decided in this case is whether the deed of the children to their mother was effective as against the levy of the judgment of the First National Bank of Sheldon, and against the sheriff's certificate which it obtained at the sale under said judgment. Did or did not the oral promise of the children of the deceased to convey the property to their mother create a trust which was superior to such lien and to such certificate? Was there any property of the defendant Ingebrigt Arntson on which the lien of the judgment could operate?
(1) The contention of the defendant the First National Bank of Sheldon is that no trust was created because the title to the property remained in the hands of the deceased up to the time of his death and there was no conveyance to trustees.
(2) That from everything that was done and said it clearly appears that the deceased intended that the arrangement should be the same as a will, and that no title or interest should pass from him until after his death; that the arrangement, therefore, amounted to a testamentary disposition, and being oral, and not in writing, and not being executed with the formality required by law in the case of wills, it was null and void.
(3) That the trust, if any, was oral, and that under the statutes of North Dakota an oral trust is void.
(4) That under §§ 5742 and 7691 of the Compiled Laws of 1913, the judgment became a lien upon the interest of Ingebrigt Arntson in his father's estate immediately upon his father's death.
(5) That defendant bank is a judgment creditor of the said I. E. Arntson, and is placed in the same position as a purchaser under § 5594 of the Compiled Laws of 1913, which relates to the recording of deeds.
(6) That at the judgment sale it became a purchaser of the property from the heir, and as such was protected by the provisions of § 5727 of the Compiled Laws of 1913 from secret gifts made by the deceased.
(7) That under the provisions of § 6755 of the Compiled Laws of 1913 a defeasance is not enforceable as against any person other than the grantee, unless it is in writing and recorded.
The sections of the Compiled Laws which need to be considered in this case are the following:
Section 5364: "No trust in relation to real property is valid unless created or declared:
Section 5366: "No implied or resulting trust can prejudice the right of a purchaser or encumbrancer of real property for value and without notice of the trust."
Section 5742: "The property, both real and personal, of one who dies without disposing of it by will, passes to the heirs of the intestate, subject to the control of the county court and to the possession of any administrator appointed by that court for the purpose of administration."
Section 7691: "On filing a judgment roll upon a judgment directing in whole or in part the payment of money, it may be docketed with the clerk of the court, in which it was rendered, in a book...
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