Gregory v. Gregory

• Decision Date: 03 April 1957
• Docket Number: No. 49122,49122
• Citation: 248 Iowa 672,82 N.W.2d 144
• Parties: Patricia M. GREGORY and Patricia M. Gregory, as Guardian of Donna Lee and James C. Gregory, Minors, Appellees, v. Ida GREGORY and Betty C. Gregory, Appellants.
• Court: Iowa Supreme Court

Page 144

82 N.W.2d 144

248 Iowa 672

Patricia M. GREGORY and Patricia M. Gregory, as Guardian of Donna Lee and James C. Gregory, Minors, Appellees, v. Ida GREGORY and Betty C. Gregory, Appellants.

No. 49122.

Supreme Court of Iowa.

April 3, 1957.

Ralph L. Powers and Henry W. Wormley, Des Moines, for appellants.

George D. Sullivan, Des Moines, for appellees.

LARSON, Justice.

The sole question for our determination in this appeal is whether under the facts disclosed by the record the defendant Ida Gregory is entitled to impress in her favor a resulting trust upon the real estate in controversy. Plaintiff Patricia M. Gregory is a widow and guardian of Donna Lee and James C. Gregory III, minor issue of her marriage to James C. Gregory, Jr., the record titleholder of said property. James C. Gregory, Jr. had married the plaintiff December 20, 1952, and died September 9, 1955, as a result of an automobile accident. At that time and since December, 1954, both parties were residing on the property involved. Shortly thereafter, plaintiff and her children moved elsewhere and commenced this action for forcible entry and detainer against the defendants Ida Gregory and her daughter Betty C. Gregory. In their answer the defendants claim James C. Gregory, Jr. took title to this property for and in behalf of Ida Gregory, his mother, and that she furnished the consideration by agreeing to pay the monthly payments on the G. I. loan under which the property was acquired. The trial court found defendants failed to carry their burden of proof, quieted the title to the real estate in plaintiff Patricia M. Gregory and the heirs of James C. Gregory, Jr., and ordered that plaintiffs be placed in immediate possession thereof. Defendants appealed.

I. A resulting trust must arise, if at all, from the state of facts existing at the time the legal title to the property is acquired, and cannot arise from matters coming into existence afterwards, and the person claiming to be the cestui que trust must occupy such position then as will entitle him to be substituted for the grantee. Cotton v. Wood, 25 Iowa 43; Spring v. Spring, 210 Iowa 1124, 229 N.W. 147; Pomeroy's Equity Jurisprudence, 3d Ed., Vol. 3, page 1992, § 1037; 54 Am.Jur., Trusts, § 204, page 159.

II. One who holds the legal title to land which has been paid for by another, holds as trustee of the latter, no gift being intended, and an agreement under which one pays the purchase price of land and takes possession is not within the Statute of Frauds. Tamingo v. Freiberg, 188 Iowa 788, 176 N.W. 791; Spring v. Spring, supra; Cotton v. Wood, supra. Here the original purchaser was dead. All that he said and did touching this matter must be found in the documents and in the memory of neighbors and relatives. Possession was taken by both parties as the grantee at the time of purchase was single and lived with his parents. With the exception of a letter claimed to have been written by the deceased, all evidence produced by defendants to sustain their contention was parol evidence.

III. The burden rests upon the party claiming the trust to establish by clear, certain, satisfactory, and convincing evidence, the facts out of which a resulting trust would arise. These facts are (1) the purchase and payment by the claimant; (2) the intention of the parties in placing the legal title in the alleged trustee; (3) the acknowledgment by him of the trust or his assent thereto, or his failure to dissent after knowledge of claimant's contention.

All of these facts may be shown by parol. When so established by the quantum of proof required, the law implies the trust. In re Estate of Mahin, 161 Iowa 459, 143 N.W. 420; Cunningham v. Cunningham, 125 Iowa 681, 101 N.W. 470; Malley v. Malley, 121 Iowa 237, 96 N.W. 751; Luckhart v. Luckhart, 120 Iowa 248, 94 N.W. 461; Culp v. Price, 107 Iowa 133, 77 N.W. 848; Hyatt v. First Nat. Bank of Williams, 193 Iowa 593, 187 N.W. 949; Kelley v. Kelley, 189 Iowa 311, 177 N.W. 45; Freeborn v. Servis, 182 Iowa 1350, 165 N.W. 178; Hayes v. Dean, 182 Iowa 619, 164 N.W. 770; DeFrance v. Reeves, 148 Iowa 348, 125 N.W. 655.

Much of the evidence, especially documentary evidence, was undisputed. James, then 20 years of age, having just returned from military service in the navy and being dissatisfied with the property his parents were renting, suggested that they find a more suitable place and he would buy it under his G. I. privilege. Having located such a place, a real estate salesman showed the property to the young man and his parents. On February 25, 1950, James C. Gregory, Jr. alone made a written offer to buy the property for $5,000 and it was duly accepted by the then owners. Young Gregory made application for a G. I. loan, paid and received a receipt for the sum of $20 as an appraisal fee, and later alone signed the mortgage papers and paid the United Federal Savings and Loan Association, as down payment and costs, the sum of $342. On March 20, 1950, he received a warranty deed to the property and, together with his parents, moved into the house thereon. The record further shows he filed verified claims for both homestead exemption and soldiers' exemption, and applied the tax credit to this property. While his mother contends she gave James $100 toward the down payment, this claim is not corroborated in any way, and plaintiff said her husband told her that money came from his discharge pay. This then is the evidence as to who furnished the consideration at the time of the purchase.

Defendant mother, while not signing any papers, contends her agreement to pay the monthly payments, and her performance of that agreement, are sufficient proof of this necessary element. There was no documentary proof of such payments, although both she and her daughter testified the $44 monthly payments were made continuously from April, 1950, until December, 1954, when James and his wife took over the payments as compensation for living with defendants in that property. It is conceded that James Gregory, Jr. then made the payments until his death. The Loan Company's officer had no records as to who had made the payments prior to December, 1954.

As to the intention of the parties in placing the title in James Gregory, Jr. and his acknowledgment of the alleged trust relationship, the defendants rely greatly upon a letter signed by 'The Bug', a signature claimed to be that of James C. Gregory, Jr., which was written by James about the time this property was purchased. It stated:

'I've been trying for two weeks now to get squared away on the house I'm buying. I got dam tired of that dump the folks are living in now so I told them to find a place they wanted and I'd get it for them on the G. I. bill, then they can pay on it just like they were paying rent. They finally decided on a place just two blocks from where we used to live. * * * I'm supposed to know by the end of the week if the government will approve it or not. If they do it'll still be a month I guess before we move in.'

Obviously this statement standing alone is not conclusive as to James' intention to hold title for and in behalf of his parents. But for clarification and corroboration of his testimony and this letter, defendants also rely upon testimony of various neighbors, who testified that on or about the time of the transaction James, Jr. told several of them '* * * he was getting tired of seeing his folks renting and he was going to buy them a house * * * He said he would put the down payment down and his mother would make the payments * * * he was buying it for his mother' and 'He told me that he put the down payment on the place and then his parents was going to make the monthly payments and it was to be their property.' One said: 'He said he was buying it for his folks. He told me that his mother was going to make the payments on it.' Still another said: 'I have heard Mr. Gregory say that he had purchased this home and that he was buying it for his parents' and 'He said he was buying a home for his folks. He said his mom worked hard and needs a home to live in for the future, a permanent home.' Other statements found in the record which tend to reflect the intention of the titleholder at or about the time the deed as procured, and which may be considered, are similar, but enough are set out to give their substance.

True, several months after he purchased the home James, Jr. married, and he and his wife left. But when she became ill and died some three months later, he returned. After his marriage to plaintiff on December 20, 1952, they too lived at some four other places before their return in December, 1954. In the meantime the father had died and only the defendants lived in the property in controversy.

While it is true the evidence of these facts may be shown by parol, this evidence must be so clear and certain as to convince the mind of the trier of the truth of the facts they hope to establish. Fair inferences are usually not sufficient, especially when contradicted. Cunningham v. Cunningham, supra; Malley v. Malley, supra; Luckhart v. Luckhart, supra. In Malley v. Malley, 121 Iowa 237, 239, 96 N.W. 751, we said: 'But the presumption in favor of the legal title, especially one which has stood unquestioned and undisturbed for many years, is so nearly conclusive that something more than a slight preponderance of the testimony is required to establish a trust.'

In In re Estate of Mahin, supra, 161 Iowa 459, 467, 143 N.W. 420, 424, cited by appellants, we said: 'The person who contends that the legal title is held in trust must establish his contention by clear and satisfactory evidence. The burden rests upon the party claiming the trust, to establish, by clear and certain evidence, the facts out of which the resulting trust would arise, to wit, the purchase and payment, and the understanding and intention of the parties in placing the legal title in the alleged trustee.'

In that case, as here,...