Hawe v. Hawe

Decision Date03 August 1965
Docket NumberNo. 9379,9379
Citation89 Idaho 367,406 P.2d 106
PartiesGrace HAWE, Administratrix of the Estate of Arieigh H. Hawe, deceased, Grace Hawe, Raleigh Hawe, Julie Hawe Day, formerly known as Julie Hawe Lashbrook, heirs-at-law of Arieigh H. Hawe, deceased, Plaintiffs-Respondents, v. Agnes M. HAWE and George R. Elliott, Administrator of the Estate of Edward Hawe, deceased, Defendants-Appellants.
CourtIdaho Supreme Court

William D. Keeton and Givens, Doane, Givens & Manweiler, Boise, for defendants-appellants.

Langroise, Clark & Sullivan, Boise, for plaintiffs-respondents.

McQUADE, Chief Justice.

Respondents brought this action to determine their interest in and to certain real property. Respondents contend that they are owners in fee simple of an undivided one-half interest thereto. By counterclaim appellants seek to quiet title in themselves to the entire property.

At the time of trial of this action, the principal participants in the transactions in question, Arleigh H. Hawe and Edward Hawe, were deceased. However, chain of record title to the property is established through documentary evidence.

Title to the property was in Edward Hawe and his wife, Agnes Hawe, prior to 1931. Edward had become indebted to the Federal Land Bank of Spokane. On April 1, 1938, the Federal Land Bank agreed to and did accept the sum of $12,500 in full satisfaction of its claim, $2,000 to be paid at that time and the balance of $10,500 evidence by a note executed by Edward Hawe and Arleigh Hawe and their respective wives. The note was secured by a mortgage on the property. As part of the same transaction the Federal Land Bank and Edward Hawe and his wife executed deeds conveying title to the property to Arleigh Hawe. On May 31, 1938, the initial payment of $2,000 was made and on June 1 the mortgage and deeds were recorded. While the payment of $2,000 was made by the personal check of Arleigh Hawe, $800 of that sum was from Edward Hawe.

From 1938 through 1942 payments on the mortgage-note to the Federal Land Bank amounted to $7,381.70, being payments in the nature of: $1,971.22 by personal check drawn by Arleigh Hawe, $409.50 by check drawn by Arleigh Hawe on the account of Hawe & Hawe, $.98 by chedk drawn by Edward Hawe and Arleigh Hawe, and $3,000.00 by check drawn by Edward Hawe on the account of Hawe & Hawe. The last two checks were dated December 29, 1942. From that date all remaining payments were made by Edward Hawe on the account of Hawe & Hawe, with a total of $7,607.47 being paid in addition. Upon the note being fully paid, a release was executed by the Federal Land Bank in April 1947. On June 1, 1942, Arleigh Hawe and wife, by warranty deed, conveyed an undivided one-half interest in the property to Edward Hawe. The deed was recorded January 4, 1943. During the years commencing 1943 and ending 1947, Edward and Arleigh divided the net income after deducting expenses of operation and taxes paid. After 1947 Edward Hawe reported the entire income for tax purposes.

Arleigh Hawe's wife died in 1947. In 1955 Arleigh married Grace Hawe, a party hereto and administratrix of the estate of Arleigh Hawe. Arleigh died in May 1960. Edward Hawe is the uncle of Arleigh Hawe. Before the matter came to trial, Edward Hawe passed away, and the administrator of his estate was made a party in his stead.

Testimony was adduced by the appellants in support of their contention that Arleigh had agreed to pay the mortgage indebtedness for a one-half interest in the property and that in 1946 Arleigh decided that he had invested enough money in the land and would make no further payment on the mortgage and was abandoning his interest in the property.

For 25 years Arleigh had his horses on the premises. These horses remained until Edward asked Arleigh in 1948 or 1949 to take the horses away because they were a nuisance.

The record shows that Edward was in actual possession of the property from the time of purchase in 1910 until his death. Arleigh never lived upon the land or asserted a desire to do so. Arleigh and his son hunted on the land through November 1959. For of five-year period from 1955 through 1960, Kenneth McKenney farmed the land under the direction of Edward and was unaware of an interest in the land asserted by Arleigh Hawe.

The trial court rendered an interlocutory judgment for the respondents but reserved the issues of partition and accounting pending this appeal.

Appellants specify 18 assignments of error. These assignments relate to the trial court's findings of fact and conclusions of law insofar as they pertain to the evidence. The principles of law involved are resulting or constructive trust, adverse possession, express or implied condition subsequent, and finally, whether the original deed was in effect a mortgage or an instrument of conveyance and unity of possession.

While there are conflicting facts, the rule relating to a trial court's findings of fact is set out clearly in the case of Conley v. Amalgamated Sugar Co., 74 Idaho 416, 424, 263 P.2d 705, 709 (1953):

'After the court has found, the criteria are not what other or different findings the evidence could or would sustain, not what findings are plausible, not the weight or quality of the evidence or credibility of witnesses, but the sole criterion in simply whether there is substantial evidence, regardless of conflict, to sustain the findings as made, with all reasonable inferences and intendments in favor thereof. This proposition is so universal, so oft repeated and adhered to as to need no citation of authority in support thereof. It is not what evidence tends to support appellant, or negative that favorable to respondents, but it is what evidence tends to support respondents, with all reasonable inferences and intendments to be drawn in favor of respondents, which controls the determination of the controversy in this Court.'

See also Jensen v. Chandler, 77 Idaho 303, 291 P.2d 1116 (1955).

On the special question of inferences which may be drawn by the trial court and again by this court on appeal, Cazier v. Economy Cash Stores, 71 Idaho 178, 228 P.2d 436 (1951), held:

'All reasonable inferences drawn by the trial court where it is a trier of the facts, from the evidence adduced, will be sustained on appeal. Smith v. University of Idaho, 67 Idaho 22, 170 P.2d 404. On appeal this court is entitled to draw the necessary inferences from the trial court's express findings in order to support the judgment.'

See also Angleton v. Angleton, 84 Idaho 184, 370 P.2d 788 (1962).

Appellants assign as error the conclusion of law that Arleigh Hawe was vested in fee simple with an undivided one-half interest in the land by virtue of the deeds dated April 1, 1938. The transactions of 1938 were all complete upon their face. The 1942 deed by Arleigh, conveying a one-half interest to Edward, and which was accepted by Edward, is as follows:

'The purpose of this conveyance is to place the legal title, as well as the equitable title which he now holds, to a one half interest and ownership in and to the lands herein described, in the party of the second part, and to make each of the parties hereto an equal owner and title holder of said lands.'

This provision conveyed fee simple title to one-half of the property to merge with the equitable title to one-half then held by Edward. The trial court in its findings of fact so interpreted the conveyance.

Appellants contend the trial court erred in not finding that the 1938 deed was to secure a loan or indebtedness or as part of a security transaction.

It is presumed that the holder of the title to property is the owner thereof. Shurrum v. Watts, 80 Idaho 44, 324 P.2d 380 (1958). The trial court found the consideration for the conveyance in 1938 to be the agreement or promise to pay the obligation owing to the Federal Land Bank.

However, for a deed absolute on its face to be treated as a mortgage, this court has applied the following test:

'(a) Existence of debt to be secured. The controlling test to be applied in determining whether a given instrument is a mortgage is whether at the time of the execution of the deed the grantor sustains the relation of debtor to the grantee. * * *

'(b) Satisfaction or survival of the debt. On an issue as to whether a deed absolute in form was intended as an absolute conveyance or as a mortgage, the test is whether there was a subsisting debt after the conveyance.' Dickens v. Heston, 53 Idaho 91, 21 P.2d 905, 90 A.L.R. 944 (1933).

See also Clontz v. Fortner, Idaho, 399 P.2d 949 (1965); Investors' Mtg. Secur. Co. v. Hamilton, 51 Idaho 113, 4 P.2d 347 (1931); Wright v. Rosebaugh, 46 Idaho 526, 269 P. 98 (1928); Clinton v. Utah Construction Co., 40 Idaho 659, 237 P. 427 (1925).

'A mortgage is an incident of the debt, and without a debt, obligation, or liability there is nothing to secure, consequently there can be no mortgage.' Shaner v. Rathdrum State Bank, 29 Idaho 576, 161 P. 90 (1916).

The trial court found that no debt existed between Edward and Arleigh Hawe, that a loan was not intended, and thus no obligation to repay existed.

The trial court further found that a condition subsequent was not incorporated into the deed, nor could any appropriate language be found therein to imply that such a condition existed. The trial court relied upon the following quotation from Restatement of Property:

'The term 'condition subsequent' denotes that part of the language of a conveyance, by virtue of which upon the occurrence of a stated event the conveyor, or his successor in interest, has the power to terminate the interest which has been created subject to the condition subsequent, but which will continue until this power is exercised' Restatement of Property, § 24.

In Gange v. Hayes, 193 Or. 51, 237 P.2d 196 (1951), it was said:

"Conditions subsequent are not favored in law, and are to be strictly construed, because they tend to destroy estates, and...

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