England v. England, 47982

• Decision Date: 05 February 1952
• Docket Number: No. 47982,47982
• Citation: 243 Iowa 274,51 N.W.2d 437
• Parties: ENGLAND v. ENGLAND et al.
• Court: Iowa Supreme Court

Page 437

51 N.W.2d 437

243 Iowa 274

ENGLAND v. ENGLAND et al.

No. 47982.

Supreme Court of Iowa.

Feb. 5, 1952.

James A. Lucas and Ralph C. Jones, both of Bedford, for appellant.

Frank F. Wilson, of Mount Ayr, and Thos. E. Mullin, of Creston, for appellees.

GARFIELD, Justice.

For convenience we refer to Walter W. England as if he were sole defendant. Other defendants are his wife and three mortgage holders.

In July, 1931, plaintiff Joseph England, then 68, owned 520 acres of heavily mortgaged farm land. Like many large owners of mortgaged land about that time he was in financial difficulties. On July 30, 1931, he deeded to his son Sam 120 acres mortgaged for $15,000. In 1932 Sam deeded this land to the mortgagee for $600. This 120 acres is not involved here.

Also on July 30, 1931, plaintiff deeded to his son Walter, then 29, 360 acres for an expressed consideration of $5000 for labor. The 360 acres was mortgaged for about $24,000. In 1933, 160 of the 360 acres was deeded to the holder of the mortgage thereon in satisfaction of it. This 160 acres is also not here involved. But the remaining 200 acres deeded to defendant is part of the land in controversy. The rest of the 520 acres owned by plaintiff before July 30, 1931, was his homestead 40 acres which he continued to own. Plaintiff seeks to recover rent for this 'forty' in this action. The trial court allowed him $1000 rent which plaintiff asserts is not enough.

120 of the 200 acres defendant retained was in 1931 subject to a mortgage for $4000 and 80 of it, together with the homestead forty, were mortgaged to a federal land bank for something less than $8000. Defendant paid the $4000 mortgage in 1937 and had reduced the land bank mortgage to about $4200 at the time of trial in August, 1950.

When plaintiff deeded the 360 acres to defendant in 1931 he also transferred to him about 150 to 200 hogs, 14 cows and some calves, 50 sheep, 10 horses and some farm machinery.

Since 1931 defendant has acquired from third parties 560 acres additional land with a mortgage on 320 acres of it for $25,000. Plaintiff had nothing to do with these purchases.

Plaintiff's petition, filed December 27, 1949, alleges he and defendant each own an undivided half of the entire 760 acres held in defendant's name, 300 cattle, 300 hogs and certain farm machinery, asks sale thereof, division of the proceeds and an accounting. An amendment to petition filed five months later asserts the making of the deed and transfer to defendant of 400 head of livestock and farm machinery in 1931 and states it was then verbally agreed defendant would hold the land and livestock in his name for the benefit of both plaintiff and defendant and they would become equal partners in operating the land. Rent of the homestead forty is also claimed.

Another amendment to petition filed the day before trial commenced alleges defendant intended not to perform the above verbal agreement when made but to defraud plaintiff by not accounting for the proceeds of the land and livestock. It prays a trust be established in plaintiff's favor against the land and personalty for his share thereof.

Defendant's answer admits the deed and transfer to him of some livestock and machinery, denies there was any verbal agreement or fraud, alleges payment of rent of the homestead forty and that the action is barred by laches.

After trial the court held neither a partnership nor fraud was proven and the only relief due plaintiff was $1000 rent of the homestead forty. All costs were taxed to defendant. Plaintiff has appealed. We affirm the trial court.

I. It clearly appears plaintiff deeded the 360 acres to defendant and the 120 acres to Sam in an attempt to prevent his creditors from resorting thereto. Plaintiff frankly testifies on direct examination the reason he made the deed to defendant was the 'loan companies had quite a hold on me. They were going to foreclose on some of it and I wanted to save something. In them days they took it all.' On cross-examination he says, 'The reason that was deeded was to avoid foreclosure and deficiency judgments and to salvage what little I could by all that was legal.' There is much similar testimony.

As a rule, subject to certain exceptions, equity will not aid such a transferror but will leave the parties where it finds them. The maxim 'he who comes into equity must come with clean hands' governs. Shaw v. Addison, 239 Iowa 377, 397, 398, 28 N.W.2d 816, 826, 827, and citations; Willis v. Robertson, 121 Iowa 380, 384, 385, 96 N.W. 900. See also Restatement, Trusts, section 63, and comment b.

However, since defendant does not argue this proposition we base our decision upon other grounds which are urged.

II. Plaintiff relies upon the rule that where one obtains title to property by fraud, abuse of confidence, unconscionable conduct or questionable means, so he cannot equitably retain the property, which really belongs to another, equity will construct a trust upon it in favor of the one in good conscience entitled to it. See Rance v. Gaddis, 226 Iowa 531, 541, 542, 284 N.W. 468, and citations; Annotation 159 A.L.R. 997, and earlier annotations therein cited; Restatement, Trusts, section 44 and comment b; 54 Am.Jur., Trusts, section 218; 65 C.J., Trusts, section 215.

We assume, as defendant apparently does, without so holding, the rule relied upon has application here notwithstanding plaintiff's purpose in transferring the land and personalty to defendant was that stated in Division I hereof.

In any event, plaintiff is entitled to no relief in his main case against defendant, holder of the legal title, unless the oral agreement asserted by plaintiff is proven by clear, satisfactory and convincing evidence. Thompson v. Thompson, 240 Iowa 1162, 1172, 1173, 39 N.W.2d 132, 138, 139, and citations; Copeland v. Voge, 237 Iowa 102, 107, 20 N.W.2d 2, 5; Rance v. Gaddis, supra, 226 Iowa 531, 544, 284 N.W. 468; Willis v. Robertson, supra, 121 Iowa 380, 383, 96 N.W. 900. See also Shaw v. Addison, supra, 239 Iowa 377, 384, 28 N.W.2d 816, 820.

Of course we are justified in giving weight to the findings of the trial court, especially since the credibility of witnesses and defendant's good faith are largely involved. Hilliard v. Hilliard, 240 Iowa 1394, 1398, 39 N.W.2d 624, 626; Thompson v. Thompson, supra, 240 Iowa 1162, 1171, 39 N.W.2d 132, 137, and citations; Hatheway v. Hanson, 230 Iowa 386, 396, 297 N.W. 824, 828.

We are agreed plaintiff has not established his main case by the requisite proof. Testimony for him consists largely of conclusions and opinions of interested witnesses, defendant's brothers or sisters or their spouses, who would probably benefit from a decree for plaintiff, 86 at time of trial. Much of the evidence is hearsay or conclusions therefrom. The disinterested witnesses do not aid plaintiff. Of the five persons with personal knowledge as to the claimed oral agreement two, plaintiff's wife and Attorney Smith, who prepared the 1931 deeds, are dead. Survivors are plaintiff, the son Sam and defendant.

This is a sample of plaintiff's testimony on direct examination: 'BEFORE THE DEED WAS MADE WE HAD AN AGREEmenT with walter we were to go along 50-50 on the land after I deeded it to him.

'Q. Was anything said about how he was to hold the title? A. I don't just remember.

'Q. Was the agreement, to refresh your recollection, that he was to hold it for the benefit of both of you? Objected to as leading. A. Oh yes, I think he was to hold the property.

'Q. For the benefit of both of you? A. Yes.

'Q. And what about the livestock and machinery? A. I just turned that over to him.

'Q. Under the same kind of an agreement? Objected to as leading. A. Yes.'

On cross-examination plaintiff says in part: 'I don't remember what we said, we just entered into an agreement here when the deeds were made. * * * Walter was going to work on it and keep it if something happened to me. I did it so we would have something to work on. I don't like to be out of work.'

A sample of Sam's direct examination is: 'They agreed they would go on a 50-50.

'Q. Was anything said about what was to become of the land? A. They were to go ahead on a 50-50 deal.

'Q. Was anything said about the title? A. I don't know as there was. * * *

'Q. Was Walter supposed to hold this land for the benefit of both him and your father? Objected to as leading. A. That is the way I take it.'

On cross-examination Sam was unable to relate anything his father said when the 1931 deeds were made.

A son-in-law of plaintiff testifies that probably in 1934 when defendant was plowing corn the witness inquired how he was getting along and defendant said, 'We are partners and it don't look like we are going to get much out of it.' A son says that in 1947 defendant told him it was a 50-50 partnership and his father owned half the land and personal 'stuff.' Other testimony for plaintiff consists largely of conclusions of another son, two daughters and their husbands there was a partnership. This is mainly based on indefinite talk among some of the family not in defendant's presence.

Defendant denies anything was ever said between him and plaintiff about a partnership. Several disinterested witnesses who worked on part of the land in controversy or lived near it deny any knowledge of the claimed partnership and relate statements and conduct of plaintiff or other circumstances inconsistent with it. An insurance man and a bank president with whom defendant did considerable business, witnesses for plaintiff, also deny knowledge of any partnership.

The weight of the evidence is that plaintiff relinquished to defendant management and control of the property transferred to him in 1931 and plaintiff made no claim there was a partnership agreement until about 1946 when his wife died and he went to live with Sam. Prior to that plaintiff and his wife had continued to reside on the homestead forty until 1944 when they moved to a small town...