Condos v. Felder
| Decision Date | 28 December 1962 |
| Docket Number | No. 7252,7252 |
| Parties | Steve CONDOS, Administrator of the Estate of Gust Stallos, deceased, Appellant, v. Peter FELDER, Appellee. |
| Court | Arizona Supreme Court |
Charles Christakis, Phoenix, for appellant.
Charles M. Brewer and Walter F. Brinkman, Phoenix, for appellee.
From a judgment in the Maricopa County Superior Court declaring appellant Steve Condos, administrator of the estate of Gust Stallos, deceased, the constructive trustee of certain real and personal property for the benefit of the appellee Peter Felder, and ordering appellant to make an accounting and to convey to appellee the legal title to the property of the estate as well as awarding appellee his costs expended therein, appellant appeals.
Appellant assigns as error the court's refusal to grant his motion for judgment, and its denial of his motion to set aside the judgment and grant a new trial. The assignments of error are based on the following propositions: (1) The existence of a constructive trust was not proved by clear and convincing evidence. (2) Since the deed to the property was in the name of the deceased Gust Stallos, and was so recorded, and there was evidence that he alone purchased it, appellee's action is barred by the Statute of Frauds. (3) The evidence that was adduced was admitted in contravention of the Arizona Dead Man Statute. 1 (4) There was competent evidence to show that appellee's cause of action was barred by the Statute of Limitations as well as equitable laches. (5) The judgment was excessive.
Some twenty years ago Gust Stallos and Peter Felder, both immigrants to this country, developed a friendship which brought them together in business. In the course of their dealings they purchased property in Phoenix, Arizona, upon which a grocery store stood. Both men moved onto that property to live and work the grocery business. Stallos had a good knowledge of the English language and was acquainted with business affairs to a much greater degree than Felder. Therefore, he took over the management of their business.
On September 25, 1946, the two men executed a copartnership agreement for the conduct of the grocery business in which it was stated that Stallos owned the real property and was to receive $150 a month rental from the profits of the store. Felder was given the right to live on the premises and was given a one-half interest in the grocery stock for $2,060, the receipt of which was acknowledged. Under the terms of the agreement Felder was never to own any interest in the real estate. Felder being illiterate was unable to read this agreement before he signed it.
The alliance proved satisfactory for both men until February 13, 1960, when Stallos died and his property was put into the hands of his administrator. It was then that Felder discovered that by virtue of the copartnership agreement and the deed being in Stallos's name alone he had no interest in the real estate and that he was going to have to move from the premises. Following these events Felder brought this action to acquire title to the land, buildings and merchandise. The facts heretofore set forth are not in dispute. However, Felder contends that the written agreement does not reflect all the facts with regard to the relationship of the parties and the ownership of the property, and that he signed it believing it to be a deed giving him an interest in joint tenancy in the real property.
Felder states that he was told by Stallos that the property upon which the store was situated belonged to both of them in joint tenancy and that in the event of the death of one of them the survivor would take it all. He further asserted that he furnished the money with which the property was purchased and did so with the understanding that he was to be a joint tenant thereto. Being illiterate and unable to read the copartnership agreement he was told by his copartner that the instrument was a deed of title and gave them both an undivided half interest in the property. On the strength of this assurance he signed the document, and not until after the death of his copartner did he learn that these representations were untrue.
The evidence shows that during the years of their association Stallos ran the affairs of both himself and Felder. Felder had few dealings with anyone except through Stallos. Stallos did the thinking, and Felder very willingly submitted to this arrangement. Consequently, a high degree of trust and confidence was imposed in Stallos by Felder. To substantiate this fact Felder presented the testimony of a number of witnesses who had been intimately acquainted with both of them. They testified not only of the actual relationship between these men but also of hearing Stallos state on numerous occasions that he and Felder held the property in joint tenancy and that Felder had furnished the money for the purchase of the property. The foundation for this evidence was properly laid in each instance and the appellant does not contend otherwise on this appeal.
To support appellant's position at the trial, witnesses who were only casual associates of Stallos and the appellant himself were sworn and testified. None of the evidence advanced by both parties shows that the relationship between Felder and Stallos was anything but that of a high trust and confidence or that the circumstances were such that Felder was not led to believe that he was a joint tenant. There was testimony to the effect that Stallos had used his own money at the time the property was purchased and that he had told at least two people that he owned the property himself. But these people were unfamiliar with the situation even to the extent that they knew little if anything about Felder, Stallos's most intimate associate, let alone Stallos's business dealings.
When Steve Condos, the appellant and the administrator of Stallos's estate testified, the question arose as to his integrity. He had alleged in his application for letters of administration that he was a relative of Stallos, when in fact evidence shows that he was not related. Other affirmations in the application were established as being untrue.
As to the receipts for the purchase money they proved only that money was received from Stallos but indicated nothing as to his source for the funds. Furthermore, we cannot see that the terms of the copartnership agreement are of any special consequence if the court accepted appellee's evidence as true.
A constructive trust is remedial in nature. Justice Cardoza said in Beatty v. Guggenheim Exploration Co., 225 N.Y. 380, 122 N.E. 378, 380 and 381, (1919):
'* * * A constructive trust is the formula through which the conscience of equity finds its expression. When property has been acquired in such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest, equity converts him into a trustee.
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2
This being true our court said in Smith v. Connor, 87 Ariz. 6, 347 P.2d 568, 570 and 576 (1959):
'Unquestionably, a person who wishes to impose a trust on a transaction which on its face appears to be a valid transfer must convince the trier of fact of the trust by clear and convincing proof.
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'Even where actual fraud does not exist in the acquisition of property, a constructive trust will arise whenever the circumstances make it inequitable that the property should be retained by the one who holds the legal title.'
Then with regard to such a trust being imposed on land we said:
'* * * Although the statute of fraud prohibits the enforcement of an express parol trust in lands, Rogers v. Greer, 70 Ariz. 264, 219 P.2d 760, it has no application to constructive trusts which arise by operation of law and not by agreement.' 3
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