Hall v. Hall

• Decision Date: 19 July 1989
• Docket Number: No. 16981,16981
• Citation: 777 P.2d 255,116 Idaho 483
• Parties: Carol HALL, Plaintiff-Appellant, v. Anthony HALL, Defendant-Respondent.
• Court: Idaho Supreme Court

Page 255

777 P.2d 255

116 Idaho 483

Carol HALL, Plaintiff-Appellant, v. Anthony HALL, Defendant-Respondent.

No. 16981.

Supreme Court of Idaho.

July 19, 1989.

Swanson & Setzke, Chtd., Boise, for plaintiff-appellant. Raymond W. Setzke, Jr., argued.

Weston & Richardson, Boise, for defendant-respondent. Richard E. Weston argued.

Merrill & Merrill, Pocatello, for amicus. Wesley F. Merrill argued.

Slip Opinion No. 100 of November 18, 1988, is withdrawn and this opinion substituted therefore.

ON REHEARING

HUNTLEY, Justice.

This appeal concerns the characterization of real property in a divorce action. More specifically, the issue is whether, when a deed conveys title to a husband and wife "For Value Received," parol evidence may be utilized to establish that a portion of the estate conveyed was to have been conveyed as a gift. After trial in the magistrate division, the realty was held to be part community in nature and part separate. The wife appealed to the district court where the decision was affirmed. The Idaho Court of Appeals reversed and remanded, 112 Idaho 641, 734 P.2d 666, ruling that the deed could not be varied or amended by such parol evidence. We concur.

The property in question is a ranch located near Horseshoe Bend, Idaho. Carol and Anthony Hall purchased the ranch in 1981 from the husband's grandparents for $60,000. The purchase money was community property. The deed states:

For Value Received, THOMAS R. FAULL, SR., also known as Thomas R. Faull, Thos. R. Faull, Thomas Richard Faull, Sr., and Thomas Faull and FLORA M. FAULL, husband and wife, grantors, do hereby grant, bargain, sell and convey unto ANTHONY M. HALL and CAROLYN S. HALL, husband and wife, the grantees, ... the following described premises....

At trial the husband's grandmother, Mrs. Faull, testified that the ranch was worth about $100,000 at the time of the sale. She indicated that the value above the purchase price was meant to be a gift to the husband alone. The wife's objection to this testimony was overruled.

The magistrate awarded the ranch to the husband and characterized the ranch as 60% community property. The wife was awarded $30,000 as reimbursement for her share of the community funds used to buy the ranch. The magistrate ruled that the remaining 40% was a gift to the husband and therefore was his separate property. The ranch was determined to be worth $100,000 when it was acquired and worth $120,000 at the time of the divorce. The $20,000 enhancement was divided between the parties by the ratio of community and separate property interests found. After deducting community debts from the community's share of the enhancement, the wife was awarded $33,651.29 for her share of the community interest in the ranch.

Carol Hall brings this appeal to challenge the court's characterization of the property. She contends: (1) that Mrs. Faull's testimony concerning donative intent violated the parol evidence rule; (2) that I.C. § 55-606 prohibits the Faulls from changing the terms of the recorded deed; and, (3) that the finding of a gift was not based on clear and convincing evidence. The first issue is dispositive; hence we will not address the second and third issues.

Carol Hall contends that the deed by which she and Anthony took the ranch is plain and unambiguous, and therefore cannot be varied by parol evidence. The only pertinent language of the deed is as stated hereinabove. Where possible, the court should give effect to the intention of the parties to a deed. Gardner v. Fliegel, 92 Idaho 767, 450 P.2d 990 (1969). Where the language of a deed is plain and unambiguous the intention of the parties must be determined from the deed itself, and parol evidence is not admissible to show intent. ¹ Id. Oral and written statements are generally inadmissible to contradict or vary unambiguous terms contained in a deed. French v. Brinkman, 60 Cal.2d 547, 35 Cal.Rptr. 289, 387 P.2d 1 (1963); Neeley v. Kelsch, 600 P.2d 979 (Utah 1979). If the language in the deed is ambiguous, then evidence of all the surrounding facts and circumstances is admissible to prove the parties' intent. Gardner v. Fliegel, supra. The parol evidence rule does not preclude the use of extrinsic evidence to explain the parties' intent when the provisions of a writing are ambiguous. Ness v. Greater Arizona Realty, Inc., 117 Ariz. 357, 572 P.2d 1195 (App.1977). Where, as here, the consideration clause clearly recites that the transfer was made "For Value Received," parol evidence is not admissible to contradict the deed by attempting to show the transfer was in part a "gift" rather than "for value."

The testimony of Mrs. Faull, relied upon by the trial court to support its characterization of the ranch property, was not admissible. Therefore, we remand to the magistrate court for a re-characterization of the property after a review of the admissible evidence and for adjustment of the property division as appropriate. Costs to appellant, no attorney fees awarded.

BISTLINE and JOHNSON, JJ., concur.

SHEPARD, J., sat but did not participate due to his untimely death.

BISTLINE, Justice, specially concurring.

Carol Hall's first brief filed in this Court suggested "that the Court review the entire record for the 'clear and convincing evidence' on which the lower court based its decision." In turn I have asked Justice Huntley, Justice Bakes, and Justice Johnson to favor me by pointing to any evidence tending to prove a gift other than the testimony of Flora Faull, Tony Hall's grandmother. No answer has been forthcoming. This is not surprising, because there is no other evidence of any substance, and certainly none which mounts to the level of clear and convincing.

The controversy boils down to this. The Halls at the time of the divorce had been married long enough to have daughters of ages 14 years and 17 years. They came to Idaho from California. All of their assets were community property. The purchase of the farm property was made with community funds. They received a warranty deed made out to both of them. When some three or more years later the marriage fell apart, Carol Hall was informed in the divorce action that the realty was not theirs, only part of it was, and that a substantial part belonged to Tony Hall by reason of it having been gifted to him by his grandparents, namely Flora Faull and her husband Thomas Faull.

Neither Tony nor the grandparents can produce a single stitch of documentary evidence in support of this claimed gift of real property. Real property can be given, no doubt. But a writing is required, I.C. § 9-503, and that writing is called a gift deed.

The only written instrument by which the Faulls were divested of their ownership was their deed ² naming Tony Hall and Carol Hall as grantees. The issue presented to the magistrate in the first instance, and in turn to a judge of the district court acting in an appellate capacity, and then to the court of appeals, was one of first impression--not only in Idaho, but anywhere--namely whether an oral gift of real property can be sustained, or, if not precisely that issue, whether a warranty deed wholly unambiguous on its face can be modified judicially by oral testimony into a hybrid which includes being secretly a gift deed as well, but only to the husband--to the wife's substantial detriment.

This case should have come to a final conclusion when the Court of Appeals passed judgment on it over two years ago:

In the instant case, the deed conveyed 'For Value Received,' the entire estate, with the reservation of a life estate by the grantors, to 'Anthony M. Hall and Carolyn S. Hall, husband and wife.' The deed conveyed the fee to the Halls unambiguously. Only the consideration clause was open to explanation by parol evidence. The only 'value received' shown by the evidence was the $60,000 paid by the Halls from community funds. The deed was clear and unambiguous as to the grantees and the estate conveyed. Therefore, testimony claiming that the $40,000 'gift' was solely to the husband was in reality an attempt not to clarify the amount of consideration but to vary other unambiguous terms of the deed. When offered for this purpose, the testimony violated the parol evidence rule.

The law of community property supports our conclusion. The ranch was acquired during the marriage with community funds. Thus the ranch was presumed to be community property. Stanger v. Stanger, 98 Idaho 725, 571 P.2d 1126 (1977). This presumption can be rebutted, and the burden of proof lies with the party seeking to prove the separate character of the property. Id. The magistrate here relied on the Stanger case. In Stanger, the husband gave an annuity contract to his parents in exchange for a farm. The husband alone was named in the deed, and as obligor on the annuity contract. The annuity contract, as with the payment in this case, did not compensate the grantors for the full value of the farm. Mrs. Stanger claimed that any gift was to both spouses. The husband was able to meet the burden of proving that the gift was his separate property. He provided gift tax returns showing a separate gift. His parents executed new wills to reflect the gift, and he presented oral testimony on the donative intent. All of this evidence was admitted. Unlike the instant case, the deed in Stanger listed only the husband as grantee. Therefore, none of the evidence contradicted or varied the deed, rather it was consistent with the deed and admissible as evidence to overcome the presumption that the ranch was entirely community property. Moreover, nowhere in the Stanger opinion do we find that a parol evidence rule objection was made to the extrinsic evidence offered to show the intent of the grantors.

Here, the magistrate treated the form of the deed as being inconclusive in determining the status of the property. He relied upon Stanger and Bowman v. Bowman, 72 Idaho 266, 240 P.2d 487 (1952). In Bowman the court stated that ...