Beckendorf v. Beckendorf

• Court: Washington Supreme Court
• Writing for the Court: ROSELLINI; HUNTER, C.J., HILL and NEILL, JJ., and DONWORTH
• Citation: Beckendorf v. Beckendorf, 457 P.2d 603, 76 Wn.2d 457 (Wash. 1969)
• Decision Date: 31 July 1969
• Docket Number: No. 40324
• Parties: H. W. BECKENDORF and Hazelle Beckendorf, his wife, Respondents, v. Rodney W. BECKENDORF and Mary Jean Beckendorf, his wife, Appellants.

Page 457

76 Wn.2d 457

457 P.2d 603

H. W. BECKENDORF and Hazelle Beckendorf, his wife, Respondents, v. Rodney W. BECKENDORF and Mary Jean Beckendorf, his wife, Appellants.

No. 40324.

Supreme Court of Washington, Department 2.

July 31, 1969.

Rehearing Denied Oct. 6, 1969.

O'Leary, Meyer & O'Leary, Ernest L. Meyer, Olympia, for appellants.

Eisenhower, Carlson, Newlands, Reha & Sinnitt, Merton Elliott, Tacoma, for respondents.

ROSELLINI, Judge.

This is an action by the aged parents of Rodney Beckendorf, brought against Rodney and his former wife Mary Jean, to rescind a deed which the parents made in 1962 covering their ranch in Thurston County. The action was begun the day the divorce decree was entered, which decree awarded to the wife a one-half interest in the property.

Rodney Beckendorf thereafter reconveyed his interest in the property to his parents and defaulted in this action. He appeared as a witness in behalf of his parents and testified that at the time the property was deeded to him and his former wife, he made promises to his parents which he did not intend to keep. The trial court found that these promises were fraudulent and that, although Mary Jean Beckendorf did not participate in them, she knew of them.

The court concluded that Mary Jean held her interest in the property in trust for the plaintiffs and ordered that the title be restored to them. She has appealed from the judgment entered on the findings and conclusions and contends that the evidence does not support the finding of fraud, and that, in any event, the statute of limitations bars the action.

The trial court based its findings and its judgment upon the testimony of Rodney that he intended to defraud his parents. The gist of his testimony was that he promised his parents that, if they would convey the property to him, he would allow them to live upon it for the rest of their lives and would share the profits of the cattle business with them 50-50, paying All of the expenses out of his half, and that he would operate the farm.

The evidence showed that, while Rodney and his wife had lived on the ranch with his parents for periods of time during their marriage (which was entered into in 1943, and as the fruit of which four children were born), the operation of the ranch had been almost exclusively in the hands of the parents; that at the time the deed was executed, the father had suffered a stroke from which it was feared he would not recover; that Rodney was employed by Nalley's in Oregon, and had recently been assigned to work in Tacoma; that he worked at his job during the day and commuted to the ranch during his father's illness, while his wife was preparing to move the family from Oregon to Washington; that his parents knew that the ranch would not support both families and that Rodney would have to continue his job if he was to meet his obligations.

Whether the ranch had been profitable in the past was a question which was not clearly resolved by the evidence. There was no documentary evidence produced to show that it had been profitable, and income tax returns showed that it operated at a loss; however, this was explained as attributable to the deductions for depreciation. While Rodney said he knew that one half of the gross income would not be adequate to pay the expenses, the father was in a better position to know, since he was more familiar with the operation. He testified that it was profitable and that the promise to pay all of the expenses out of one half of the gross income did not appear unreasonable to him, and, in fact, that one half of the gross income had been sufficient to pay them in the past.

If this testimony was correct it was Rodney who was laboring under a misapprehension of the facts. Any lack of good intentions on his part could not harm the plaintiffs, so long as he did not claim any of the proceeds from the ranching business for his own use, and there is no evidence that he ever did assert such a claim. If the testimony of the plaintiff father was incorrect, it was not because he had been deceived as to the facts by his son. The plaintiffs knew better than anyone else whether this testimony was correct. If it was incorrect, it was not because of any deception practiced by the defendants.

There was no showing that the operation was less profitable after the deed was given than before and no showing that Rodney appropriated any of the income to his own use. There was, in fact, no showing that Rodney did not keep his promises, other than the bare assertions by the plaintiffs that he did not pay all of the expenses out of his one half of the gross income and did not use any of his own funds to supplement that income. Of course, it will be noted that Rodney did not expressly promise to pay the expenses out of his income from other sources, he merely promised to pay All of the expenses out of his share of the income. There was no dispute that, if Rodney had kept his promise to operate the farm, he would have had to give up his job with Nalley's; and if he had done that, he would have had no outside income.

In fact, he never attempted to operate the farm. His father recovered and resumed the operation, buying and selling cattle, borrowing money in the spring to finance the raising of the calves and paying it back when they were sold, just as he had been accustomed to do in the past. Rodney continued with his job at Nalley's and all seemed to be satisfactory to the parties until the divorce materialized, and not until the final decree was entered did the parents complain that they had been defrauded.

The evidence does not show that there was any change in the circumstances of the parties other than the divorce itself. The plaintiffs were never ordered to leave the farm and neither Rodney nor Mary Jean ever attempted to interfere with the plaintiffs' operation of the farm or claim any of the proceeds of sales, ¹ except for one incident which occurred after this action was instituted.

On the occasion, Mary Jean learned that wood was being cut on the farm and, although she had agreed that firewood could be cut, she received the impression that wood was being cut and sold. Through her attorney she requested an accounting, reminding the plaintiffs that the court had awarded her a one-half interest in the property. Insofar as the record discloses, the plaintiffs did not offer an accounting, but the cutting of the wood was stopped.

This incident and the occurrence of the divorce are the only changed circumstances which the plaintiffs rely upon as notice to them that the defendants' promises would not be kept. The request for an accounting was not a repudiation of the promises made by Rodney. There was no evidence that Mary Jean demanded possession of the farm or an accounting of the proceeds of the cattle business. Furthermore, a demand for an accounting is not in itself inconsistent with the promise to pay the expenses out of one half of the gross income. An accounting would be necessary in order for the defendants to know whether that portion of the income was sufficient to pay the expenses, and whether there was any surplus to which the defendants would be entitled under the agreement.

Since it was the plaintiffs who operated the farm and conducted the cattle business, who received the proceeds and applied them to the payment of obligations and expenses, it was they who were in a position to prove whether one half of the proceeds was or was not adequate to cover the expenses. They offered no books of account showing the gross income and expenses over the years, although they did produce checks showing that they had paid the expenses. This in itself was not sufficient to show that the expenses exceeded Rodney's half of the gross income, and, as we have heretofore noted, there was no express promise to use his salary to pay expenses if one half of the gross income was insufficient.

Rodney Reckendorf had a family to support and his salary from Nalley's was about $8,000. His parents conceded that he could not afford to subsidize the farm and at the same time meet his family obligations. Their testimony showed that they did not seriously expect him to give up his job and operate the farm if the father was able to resume its operation, which proved to be the case. Certainly they never made any demands upon him. His mother said that she knew it would be useless.

As we have said many times, fraud will not be presumed and must be proven by evidence that is clear, cogent, and convincing. However, as the plaintiffs point...