Dowgialla v. Knevage

• Citation: 48 Wn.2d 326,294 P.2d 393
• Decision Date: 16 February 1956
• Docket Number: No. 33136,33136
• Parties: Napolian DOWGIALLA, Respondent, v. John KNEVAGE and Rose Knevage, husband and wife, Appellants.
• Court: United States State Supreme Court of Washington

Page 326

48 Wn.2d 326

294 P.2d 393

Napolian DOWGIALLA, Respondent, v. John KNEVAGE and Rose Knevage, husband and wife, Appellants.

No. 33136.

Supreme Court of Washington, En Banc.

Feb. 16, 1956.

Rehearing Denied April 4, 1956.

John Panesko, Chehalis, for appellants.

Arthur R. Paulsen, Tacoma, Max R. Nicolai, Seattle, for respondent.

OTT, Justice.

May 19, 1900, Napolian Dowgialla obtained a patent from the United States government to one hundred sixty acres of timberland in Lewis county. April 4, 1924, he and his wife deeded the property to his nephew, John Knevage. August 20, 1952, Mr. Dowgialla commenced this action.

His complaint alleged that he deeded the property to defendant Knevage (who will be referred to herein as though he were the sole defendant) to take care of it until it could be sold; that plaintiff trusted the defendant; that the defendant orally promised that he would take the property, pay the taxes, and, when he sold it, plaintiff would receive one half of the proceeds after the expenses were paid; that, relying upon these promises and the confidential relationship existing between them, plaintiff deeded the property to defendant, and that no consideration was paid to plaintiff at the time of the execution and delivery of the deed.

Plaintiff further alleged that the promises were false and fraudulent; that defendant had no intention of keeping them at the time they were made; that, February 23, 1951, defendant sold the timber for $42,000 at which time he paid plaintiff the sum of $1,000; that demand had been made for the balance due, and the payment thereof had been refused.

The complaint prayed for an accounting of the proceeds of the sale and that plaintiff be adjudicated to be the owner of an undivided one-half interest in the real estate.

The defendant answered the complaint, admitting the execution and delivery of the deed and denying the allegations of fraud or that any oral agreement had been made. The defendant affirmatively pleaded that such an oral agreement, if found to exist, was void as being within the statute of frauds, in that such an agreement involved an interest in real estate which was not in writing and which, by its terms, was not to be performed within one year from the making thereof. The answer also pleaded laches.

The reply denied the affirmative matters pleaded in the answer.

The cause was tried to the court, with an advisory jury.

At the trial, plaintiff and defendant were the only witnesses who testified to the transactions leading up to the execution and delivery of the deed. Plaintiff testified that he had faith and confidence in his nephew and wanted him to have the land, and that, when the deed was delivered, defendant orally promised to pay him one half of the proceeds when he sold the land or the timber. His testimony concerning the actual oral promise made in 1924 was as follows 'Q. Did John make any promise to you at that time? A. We talked and talked about that, I said, 'John is the best man for that, to head that.' Then I told him, 'John, of course, I put lots of work there and the money--so when you sell it, then we go and split fifty fifty.' 'Well,' he says, 'that's all right.'

'Q. And did you have this talk with him before you made the deed? A. I talked to him before I made the deed.

'Q. And did you trust him at that time? A. Yes.

'Q. And was it because you trusted him that you gave him the deed? A. Well, I trusted him--well, to be the best man, I trust him.'

When asked why he gave defendant the deed, plaintiff testified:

'I give it--you see, it's pretty far to walk for the children to school. That is why I moved to Burnett, and worked in the mines. They couldn't go to school two miles and a half. * * *

'Q. Tell me, why did you give John Knevage the deed to the place? Really now, why did you give it to him? A. He was a good boy, you know. He was the best boy around here, so he is working in the woods and I working in the mines. Well then, taking care of it--* * * If I got enough money to stay there, then work on the farm--but on account of them children, they got to go to school, so I got to go there and work there.

'Q. Well, Mr. Dowgialla, you didn't live on the place from 1902 to 1924. Who took care of it them? A. That's what I said, I ain't got enough money to stay there.'

Although the taxes were five years' delinquent, plaintiff testified that he could have paid the amount then due by borrowing the money.

When questioned as to whether the alleged oral agreement was to be performed within one year, plaintiff testified as follows:

'Q. All right now, going back to this timber, when you gave John the deed in 1924 how long was John supposed to keep the place? * * * how many years? A. When the timber going to be ready to sell--second growth too small. * * *

'Q. * * * did you have it in mind that he had to keep it for several years, for quite a while? A. Yes.

'Q. Could he sell it the first year, or was it too small? A. Was to small, but he keep it until some right time to sell. * * *

'Q. And would that take several years or not? A. Several years, yes. * * *

'Q. And isn't it true that according to your story, you planned that John was to keep it for several years, until it grew up, is that right? A. That's right.'

The defendant testified that, in 1924, five years' taxes, in the sum of $700 were delinquent, and that he suggested that plaintiff deed the land to him, if he was going to let it be sold for taxes. After considering defendant's proposal, the plaintiff and his wife voluntarily went to a justice of the peace the next morning, where, at their request, the deed was prepared and delivered to defendant. He denied promising to pay any consideration. He further testified that plaintiff has stated that he was indebted $2,000 or $3,000 on his new home and that he could not raise the $700 for delinquent taxes and intended to let the property be sold; that defendant was advised that the county commenced foreclosure proceedings after five years' taxes were delinquent and so informed plaintiff. Defendant told plaintiff that others were interested in acquiring the land, but that he did not know if they would pay any more than the delinquent taxes for it, and that he had suggested to those who had made inquiry to contact plaintiff direct.

Defendant testified that, in 1932, he sold the timber on seventy-eight acres of the land for $1,080 and, in 1936, permitted the seventy-eight cares to be foreclosed for taxes. He gave no part of the 1932 proceeds to plaintiff. In February, 1951, he sold the timber on the remaining eighty-two acres for $42,000. Shortly after this sale was consummated, he gave plaintiff $1,000 as a gift. Nearly a year thereafter, plaintiff for the first time approached defendant, contending that there had been an oral agreement in 1924 to divide equally the proceeds from the sale of the timber.

Although the law permitted foreclosure for delinquent taxes after five years, a deputy county treasurer testified that the practice in Lewis county at that time was to permit seven years of delinquency before foreclosure. There was no testimony that defendant knew of this custom.

The court found that defendant obtained the deed by fraud, in falsely representing that there would be a tax sale in the fall, when two years of grace remained, and that defendant fraudulently failed to disclose that there were other prospective purchasers for the timberland. The trial court further found that the deed was executed and delivered upon the terms of the alleged oral agreement; that defendant's promise was made in bad faith, without any intention of performance, and that defendant took advantage of the relationship, confidence, and trust that existed between him and plaintiff at the time the deed was executed. The court ordered an accounting, and thereafter entered judgment against the defendant for one half of the net proceeds of the sale of the timber.

The defendant has appealed. He assigns as error the court's finding of fact that there was an oral agreement to sell the land or timber and divide the net proceeds.

No aspect of fraud or abuse of a confidential relationship is involved concerning this particular finding. The testimony with reference thereto was in direct conflict. In our view, the court's finding is not contrary to the clear preponderance of the evidence.

Appellant next challenges the court's finding of fact to the effect that he was guilty of actual fraud in connection with the transaction, and that a confidential relationship existed between respondent and appellant, which the latter abused.

This finding was made in support of the trial court's conclusion of law that the transaction in question had given rise to a constructive trust.

The pertinent statutes provide, in part, as follows:

RCW 19.36.010 [cf. Rem.Rev.Stat. § 5825]: 'In the following cases any agreement * * * shall be void, unless such agreement * * * is in writing, and signed by the party to be charged therewith, * * *:

'(1) Every agreement that by its terms is not to be performed in one year from the making thereof; * * *.'

RCW 64.04.010 [cf. Rem.Rev.Stat. § 10550]: 'Every

conveyance of real estate or any interest therein, * * * shall be by deed: * * *.' (Italics ours.)

RCW 64.04.020 [cf. Rem.Rev.Stat. § 10551]: 'Every deed shall be in writing, signed by the party bound thereby, and acknowledged by the party before some person authorized to take acknowledgments of deeds.'

Because of these statutes, an express trust in land cannot be established by parol. Laughlin v. March, 1944, 19 Wash.2d 874, 877, 145 P.2d 549, and cases cited. These statutes, however, do not preclude the use of parol evidence to establish a constructive trust. Moe v. Brumfield, 1947, 27 Wash.2d 714, 717, 179 P.2d 968, and case cited; Kausky v. Kosten, 1947, 27 Wash.2d 721, 727, 179 P.2d 950.

In the instant case, respondent's complaint contains no allegations of...