Edwards v. Woods

• Decision Date: 28 April 1978
• Docket Number: No. 10502.,10502.
• Parties: Harry D. EDWARDS, Appellant, v. Meredith C. WOODS, Appellee.
• Court: D.C. Court of Appeals

385 A.2d 780

Harry D. EDWARDS, Appellant, v. Meredith C. WOODS, Appellee.

No. 10502.

District of Columbia Court of Appeals.

Argued November 16, 1976.

Decided April 28, 1978.

George H. Windsor, Washington, D. C., for appellant.

F. William Burke, Washington, D. C., for appellee.

Before KERN, YEAGLEY, and HARRIS, Associate Judges.

HARRIS, Associate Judge:

This action to recover possession of real property, see D.C.Code 1973, § 16-1501, involves an analysis of decades-old precedent on the law of purchase money resulting trusts in the context of casual contemporary life-styles. The trial judge made an effort to resolve equitably a confused situation arising from the actions of two people whose financial affairs were disordered and unconventional, as were other aspects of their lives. While we find the nature of the relief granted to be compatible with this jurisdiction's case law, we reverse in part and remand for the further factual findings which are necessary to permit the proper remedy.

Appellant Edwards is a self-employed artist, a maker of stained-glass windows. Appellee Woods, now employed elsewhere, was an airline stewardess when the events leading up to this suit occurred. They met, dated regularly, and eventually began living together. Their landlord decided to sell the building in which they shared an apartment, requiring them to move. While faced with that necessity, Edwards received an insurance check in settlement of an accident claim. He used those funds for a down payment on a Capitol Hill house. Major attractions of the house included store space on part of the first floor, where Edwards could make and sell his stained-glass creations, and a second-floor apartment which could be rented. Woods signed the purchase contract, and title was placed in her name. She assumed the first deed of trust and also became liable on a second one.

The testimony is in conflict as to subsequent events. Woods claimed that Edwards had given her the money for the down payment as a gift. Edwards claimed that Woods took title in her name solely because she was regularly employed and therefore was better able to obtain financing. He also asserted that Woods agreed that he was to receive title after the second-story apartment had been renovated and rented. Two of the parties' friends gave testimony tending to support Edwards' version. Further, the real estate agent who handled the transaction testified that Edwards had little chance of obtaining credit, and that people who do not want their true property ownership interests known often have title taken in another's name. Edwards fell within such a category, for he was divorced, was responsible for the support of a child, and did not want to have property available to satisfy claims against him.

Evidence of the parties' financial dealings after they began living in the house is contradictory and confusing.¹ Payments on the mortgages were made by checks drawn upon Woods' account, and she testified that she made most of the payments. Edwards testified that his dwellingmate made such payments as loans to him. He produced rent checks which named him as the payee after he had renovated the second-story apartment. He also testified that he did not have a separate checking account, and hence used the account of Woods. In 1973 and 1974, Woods reported the rent as taxable income on her personal income tax returns, and from 1972 to 1974 she claimed as deductions the mortgage interest, property taxes, and depreciation. Edwards did not file tax returns for those years.

The relationship between the parties eventually cooled, and Woods moved out. Some time after her departure, Woods gave Edwards her key to the house. Once she came back with a locksmith, intending to change the locks, but Edwards returned before the work was finished. He then had different locks installed. Edwards later decided to refinance the house and unsuccessfully tried to induce Woods to convey the title to him. The friction between the parties ultimately led them to court, where each claimed sole ownership of the house.

Although the trial court found that a resulting trust had not been established in favor of Edwards, in an effort to reach an equitable result it granted half of each party's prayer and ruled that they jointly own the property. No allocation was made of their respective ownership interests. Edwards appealed; Woods did not.

Woods advances several affirmative challenges to the trial court's judgment, but, as noted, she did not file an appeal. See D.C.App.R. 4. Because of that fact, she may not attack the judgment in this court, and may only defend those aspects of the judgment which favored her. See United States v. Reliable Transfer Co., 421 U.S. 397, 401 n. 2, 95 S.Ct. 1708, 44 L.Ed.2d 251 (1975); Swarb v. Lennox, 405 U.S. 191, 201, 92 S.Ct. 767, 31 L.Ed.2d 138 (1972); Porter v. Straughters, D.C.Mun. App., 86 A.2d 410, 411 (1952). In pursuing her defense on this appeal, Woods is free to urge a rationale different from that utilized by the trial court. See Morley Construction Co. v. Maryland Casualty Co., 300 U.S. 185, 191, 57 S.Ct. 325, 81 L.Ed. 593 (1937); United Optical Workers Union Local 408 v. Sterling Optical Co., 500 F.2d 220, 224 (2d Cir. 1974). The Supreme Court has stated specifically that the cross-appeal rule is a rule of practice which may be dispensed with under appropriate circumstances. See Langnes v. Green, 282 U.S. 531, 538, 51 S.Ct. 243, 75 L.Ed. 520 (1931). See also United Optical Workers v. Sterling Optical Co., supra, at 224; 9 Moore's Federal Practice § 204.11[5], at 947-48 (2d ed. 1975). The rule, however, is well established and should not be discarded lightly. We deviate from it here only to the extent necessitated by justice and the circumstances of this case, to allow the trial court to make the more specific findings of fact which are required where a resulting trust exists.

Edwards' principal contention is that the trial court's factual findings are clearly erroneous. To make such a challenge successfully, an appellant must leave this court, after we have studied all of the evidence, with the "definite and firm conviction that a mistake has been committed." United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746 (1948); Kidwell & Kidwell, Inc. v. W. T. Galliher & Bro., Inc., D.C.App., 282 A.2d 575, 576 (1971); Voight & McMakin Air Conditioning, Inc. v. Property Redevelopment Corp., D.C.App., 276 A.2d 239, 241 (1971). Although each party sought to prove that he or she was the sole owner, the record compels the inference that they intended to share ownership. For example, Edwards supplied the funds for the down payment, while Woods testified that she made the payments on the deeds of trust. The trial court could and did infer that each intended to receive some vested property interest in return for his or her contributions. We could not call such a conclusion either "clearly erroneous" [see Super.Ct. Civ.R. 52(a)] or "plainly wrong" [see D.C. Code 1973, § 17-305(a)].

The record, however, fails to support the trial court's finding that the parties did not intend in effect to establish a resulting trust. A resulting trust is a property relationship designed to effectuate the parties' intent when one party takes title to property for which another has furnished the consideration. See Kosters v. Hoover, 69 App.D.C. 66, 69, 98 F.2d 595, 598 (1938); Taylor v. Mercantile Safe Deposit and Trust Co., 269 Md. 531, 307 A.2d 670, 674 (1973); D. Dobbs, Remedies 240-41 (1973). It is an equitable remedy which must be applied in the instant case to effectuate justice, as formal record title is held by only one of the two parties who share ownership interests in the property. We believe the trial court meant that Woods did not intend for Edwards to be the sole owner. However, there may be a resulting trust of a partial interest in property. See Long v. Scott, 24 App.D.C. 1, 4-5 (1904); Restatement (Second) of Trusts § 454 (1959). The trial court apparently concluded erroneously that a resulting trust must be an all-or-nothing proposition. We interpret the trial court's ruling as no more than a determination that Woods did not intend to give Edwards a beneficial interest in the entire property. Viewed as such, the court's conclusion was really a finding of fact flavored with legal terminology. See Solway Metal Sales, Ltd. v. Baltimore & Ohio Railroad, 120 U.S.App.D.C. 183, 184, 344 F.2d 568, 569 (1965). That finding of fact (i. e., that Edwards was not meant to be the sole owner) is not clearly erroneous.²

The record, however, contains no basis for determining the proportions of the parties' respective interests in the property, and the case accordingly must be remanded for further findings and a new conclusion on this point. If the parties intended each to have equal (or disproportionate) shares, that intent should be recognized. As we have said, a purchase money resulting trust is a means to enforce the parties' intent. If their intent cannot be found, a resulting trust must be recognized in Edwards' favor in the same proportion as the amount of consideration furnished by him. See Restatement (Second) of Trusts, supra, § 454.

The payments of the notes securing the deeds of trust should be included in the trial court's determination of the parties' relative contributions. Cf. Haliday v. Haliday, 56 App.D.C. 179, 182, 11 F.2d 565, 568 (1926) (such payments are sufficient to create a resulting trust). The parties' finances, however, appear to be quite disordered.³ If the evidence on remand is inadequate to prove what proportionate share of the total payments Edwards made, he will be entitled to a lien on the property to the extent of the value of the contributions he can prove. See Long v. Scott, supra, at 5-6.⁴

A person seeking to prove a resulting trust must demonstrate his case by clear and convincing evidence. Haliday v....