Mahler v. Tieman, 37529

• Decision Date: 26 April 1977
• Docket Number: No. 37529,37529
• Citation: 550 S.W.2d 623
• Parties: Gizella MAHLER, Plaintiff-Respondent, v. Richard TIEMAN and Mary Ann Tieman, Defendants-Appellants. . Louis District, Division Three
• Court: Missouri Court of Appeals

Page 623

550 S.W.2d 623

Gizella MAHLER, Plaintiff-Respondent, v. Richard TIEMAN and Mary Ann Tieman, Defendants-Appellants.

No. 37529.

Missouri Court of Appeals, St. Louis District, Division Three.

April 26, 1977.

Whaley & McAuliffe, Clyde C. Farris, Jr., Clayton, for defendants-appellants.

Edward T. Wright, Sr., Edward T. Wright, Jr., St. Louis, for plaintiff-respondent.

JAMES R. REINHARD, Special Judge.

This is an appeal by defendants from a decree in equity creating a constructive trust in land and ordering that title be transferred by defendants Mary Ann Tieman and her husband, Richard Tieman, to plaintiff Gizella Mahler. The court also rendered judgment on defendants' cross-bill in favor of the defendants in the amount of $3,214.12 plus $85.05 interest for loans made to the plaintiff.

When this suit commenced, the title to the property, a residence in Webster Groves, Missouri, was held by the parties as joint tenants. Both sides claim ownership of the entire fee. Plaintiff claims defendants purchased the property on her behalf but put their names on the title. The defendants claim they purchased the property for themselves under an agreement by which the plaintiff could rent the premises.

The undisputed facts are as follows: Mrs. Mahler is the mother of Mary Ann Tieman. She was 82 years of age at the date of trial, worked as a seamstress most of her life, and had no experience with real estate purchases. Defendant Mary Ann Tieman is a school teacher, she and her husband own sixteen apartments, and both are experienced in real estate purchases.

In the spring of 1969 Mrs. Mahler asked the defendants to advise her in the purchase of a home. Her decision to purchase a home arose after Mrs. Tieman and Mrs. Mahler's minister convinced the plaintiff to move from the home of "the Albachs". The defendants had offered Mrs. Mahler a room in their house, but she declined, preferring to have the privacy of her own place.

In May, 1969 Mrs. Mahler became interested in the property which is the subject of this lawsuit and went to the realtor with her daughter. On May 5, 1969 a sales contract was signed by Mrs. Mahler wherein she offered to pay $10,000.00 for the property with a $2,500.00 down payment. When the realtor presented the contract to the seller it was refused and the seller sent Mrs. Mahler a counter-offer of $11,000.00 with a $3,500.00 down payment. The second offer was made by interlineation on the original contract; only the amounts and acceptance date were changed. Acceptance of the counter-offer was shown by the initialing of the changed portions by the seller and Mrs. Mahler. Both Tiemans were present when Mrs. Mahler signed on May 5, 1969.

Mrs. Mahler had intended to pay the original down payment herself with some $1,600.00 which she had saved and another $1,200.00 owed her by the Albachs. She learned, however, that she would be unable to collect the money from the Albachs. After the second offer was made and accepted, Mrs. Mahler needed an additional $2,000.00 to make the down payment. She received $500.00 from her son in California, which she repaid within two months after the purchase. Defendants contributed over $1,600.00 to the down payment.

Mrs. Mahler delivered the $1,600.00 of her own money and the $500.00 loaned to her by her son to the Tiemans. On May 28, 1969 the closing took place with the Tiemans present. Mrs. Mahler did not attend. She entered the hospital shortly after the closing and according to Mrs. Tieman was "near death". The property was transferred by a deed which listed Richard Tieman and Mary Ann Tieman, his wife, as the sole owners of the property. They obtained a loan in the amount of $7,500.00 from Lafayette Federal Savings & Loan Association of St. Louis. On June 16, 1969 the Tiemans executed a note and deed of trust in favor of Lafayette Federal. The plaintiff moved into the house in May, 1969 and continues to reside there.

The written contract between Mrs. Mahler and the seller had a clause which stated: "Deed to Mrs. Gizella Mahler and Mrs. Mary Ann Tieman." Mrs. Tieman signed the contract under the signature of Mrs. Mahler. Mrs. Tieman did not initial the changes. There is no explanation as to why the clause above was in the contract since Mrs. Tieman testified that she did not sign as purchaser but only at the request of the realtor to show that she was in agreement with her mother. She further testified that at the time of the execution of the contract between her mother and the seller, her mother was to be the sole purchaser and owner of the property. The defendants base their claim to title on a subsequent oral agreement between them and plaintiff, and not on the written document.

On August 30, 1969 a quit claim deed was executed deeding the property from defendants to Gizella Mahler, Richard Tieman and Mary Ann Tieman, his wife, as joint tenants. This was done to satisfy the Division of Family Services so that Mrs. Mahler could obtain welfare. Defendants' cross-bill in this action sought to have plaintiff's name removed from the deed because the transfer was made without consideration.

The parties dispute those facts which concern the intent of the parties in making various contributions towards the purchase and maintenance of the property. Mrs. Mahler testified that the Tiemans' money was a loan (the same as her son's); that her daughter had offered to give her all the financial help she needed in the purchase; that she had attempted several times to repay the loan; that she had not intended that the Tiemans share in the ownership of the house; and that she thought their names appeared on the deed because of the loan.

The Tiemans deny their contribution was a loan. Mrs. Tieman testified that the parties made a detailed oral agreement which provided for the Tiemans to purchase the property in their names alone; that this agreement came about when her mother accepted the counter-offer on the house; that her mother did not have the financial ability to meet the terms of the contract and was about to lose her $600.00 earnest money; that the agreement provided that her mother would give the Tiemans her $1,600.00 (which she had saved for her funeral) plus the $500.00 from her son; that the Tiemans would in return pay for her funeral, purchase the property in their own names, and rent it to her; that Mrs. Mahler would pay the mortgage payments and a one-year premium on the house; and that they would be responsible for the major repairs. Defendants documented $1,603.34 for the down payment, $1,326.68 (twelve mortgage payments), and about $275.00 for other expenses.

Mrs. Tieman testified that she and her husband had acted as owners in that they took out the mortgage in their own names; that they made payments on the house when Mrs. Mahler was unable; that they undertook various repairs around the house; and that they made some insurance payments. Mrs. Tieman admitted that she did not report Mrs. Mahler's payments as rent on her tax returns; that she had never purchased a prepaid funeral for her mother; and that her mother had made demands for the title. She further testified that she went into the transaction as part investor and part protective daughter.

Mrs. Mahler denied the creation of a rental arrangement or any discussion of a prepaid funeral. She denied that she had saved her money for a funeral. She testified that she had made most of the mortgage payments during the four years and that she had made her payments directly to the lien holder. She claims she requested her daughter to make some of the payments so that she could save money to go to Europe on two different occasions to visit her sick sister. She testified that these were the only substantial sums that her daughter paid toward the purchase and upkeep of the house other than the amount paid toward the down payment.

In the court's decree it found that the plaintiff had purchased the property through defendants as her agents, but that defendants failed to have title transferred to Mrs. Mahler. The court decreed that the defendants held the property in constructive trust for the plaintiff and ordered the property conveyed to plaintiff. The court also found that the Tiemans had loaned money in the amount of $3,214.12 toward the purchase and maintenance of the property, and therefore ordered the plaintiff to pay this sum plus interest to defendants.

On appeal, the defendants argue the court erred in finding a constructive trust existed because: 1) the plaintiff was permitted to introduce evidence of a constructive trust although it was not raised in the pleadings, and 2) the finding goes against the weight of the evidence. Plaintiff's petition alleged that she purchased the real estate and subsequent thereto the defendants had plaintiff transfer it to the names of the plaintiff and defendants for the purpose of avoiding probate with the full assurance to her that she could have it transferred back to her sole name. On the morning of the trial the plaintiff attempted to amend the pleading to state that the legal theory of her pleaded facts was a...