Martin v. Carroll

• Decision Date: 18 June 1953
• Docket Number: 1 Div. 495
• Citation: 66 So.2d 69,259 Ala. 197
• Parties: MARTIN v. CARROLL et al.
• Court: Alabama Supreme Court

Page 69

66 So.2d 69

259 Ala. 197

MARTIN v. CARROLL et al.

1 Div. 495.

Supreme Court of Alabama.

June 18, 1953.

Holberg, Tully & Aldridge and Albert J. Tulley, Mobile, for appellant.

Alex T. Howard, Mobile, for appellees.

PER CURIAM.

This is an appeal from a final decree of the circuit court, in equity, denying relief to appellant as the complainant and granting relief to appellees on their cross bill. The controversy concerns a house and thirty-eight acres of land in Citronelle, Mobile County, Alabama.

The bill as amended sets up in paragraph 3 the contention of complainant in respect to the property. That paragraph as amended is as follows:

'The complainant O. T. Martin obtained the amounts necessary to purchase said property from officials or employees of the Home Owners' Loan Corporation and obtained all data necessary to make such purchase. Thereafter the complainant and W. E. Carroll decided to purchase said property and did purchase said property with funds provided partly by the complainant and partly by the respondents, and the complainant went into the possession thereof at the time of said purchase and has remained in possession thereof since that date. Complainant alleges that the defendant W. E. Carroll advanced part of the monies for purchasing the property described in this complaint and advanced money for the purchase price of property not subject to this complaint, and the complainant advanced money for the purchase of the property described in this bill of complaint and has demanded an accounting with the defendant W. E. Carroll, and has demanded from him a conveyance of his undivided interest in this property.'

The prayer is that the court decree 'that the complainant owns an undivided one-half interest in and to said property and that the title to the same is vested in the respondent in trust for the respondent and for the undivided half interest owned by the complainant and the court will further enter an order requiring the register to take and state an account between the parties,' and then prays for a sale for division between them.

Demurrers to the bill as amended were overruled. The respondents filed an answer and cross bill. The answer denies the allegations in the third paragraph of the bill, and especially denies that complainant went into possession of the property as the purchaser thereof or that he advanced any money for the purchase price, but alleges that the property was purchased by the respondents and that complainant was not known in the transaction. It alleges that the title to the land is vested in them (respondents) both legally and equitably. The cross bill will be analyzed later.

The contentions made on behalf of appellant do not follow the theory of the bill. The only basis for relief on the allegations and prayer of the bill is to enforce a resulting trust in favor of complainant on account of contributions made by him to payment of the purchase price. But the evidence without conflict refutes that contention. No aspect of it supports a theory that complainant paid any part of the purchase money at the time the land was purchased or became obligated to do so.

The respondents traded with Home Owners Loan Corporation on February 19, 1942 to purchase the property for the principal sum of $3850, and made the first payment of $385 with their own funds, and agreed to pay the balance in monthly installments of $37.42, and on April 9, 1942 the Home owners Loan Corporation executed a deed to them and they began and have continued to make the payments as they fell due.

In January 1943 complainant gave a check to respondent W. E. Carroll 'on the down payment,' as he says, as a part of the purchase price. That Mr. Carroll told him 'we will be partners in the house just like we are in the water business down there, and as far as anything else, there was never nothing else said about it, except that he told me we were partners in the house'. They were then engaged in a partnership business for the sale of mineral water from a mineral spring situated about three and one-half miles from the land in controversy at Citronelle. All the parties then lived in Atlanta. Complainant is now claiming that the house was purchased as an asset of the partnership and for use by complainant who was to devote his attention to the business. Respondents had other business in Atlanta. They advanced practically all the money that went into the partnership. They testified that respondent Mrs. Carroll wanted this property for use as a boys' home near the healing spring waters, and that she paid all the purchase money and it was bought for her. That they allowed complainant to occupy it free of rent as a caretaker since they had no immediate use for it. That complainant had never set up any claim to it or interest in it until this bill was filed. That the occasion for the payment of the $300 was a need of that money by the partnership to pay some pressing claims. That it went into the partnership funds and had no connection with the purchase of the house.

Since this suit was begun a suit for a settlement of the partnership has been heard and determined by consent of the parties and a full settlement of the partnership affairs has been decreed.

The amended cross bill alleges that by reason of that decree there is no necessity for a partnership settlement as prayed for in the original cross bill. The answer to the cross bill admits those allegations.

The contention made by attorneys for appellant is that the property was that of the partnership and the title was taken in the Carrolls for the use and benefit of the partnership, and in equity should be so treated although the partnership affairs have been settled in a court of equity.

To constitute partnership property the land must have been acquired with partnership funds or on partnership credit and for partnership use. Those are the two essential elements of that principle. McGowin v. Robinson, 251 Ala. 690, 30 So.2d 237. In equity it is not controlling that the deed does not indicate the partnership interest. It matters not what else may be said and done about it, those two conditions are controlling and must both concur.

The property here in question was not acquired with partnership funds nor on partnership credit. The $300 which complainant paid to respondent went into partnership affairs of another sort, and was not paid to the Home Owners Loan Corporation or for its account. The partnership assumed no part of the deferred payments. The cash payment was made by respondents without the use of any partnership funds. The only funds of the partnership so used was a check for $37.42, the first monthly deferred installment. A check for that amount was drawn on the partnership account and charged to respondents, and in the accounting on the partnership settlement it was so charged. Respondent W. E. Carroll did that because at the time his personal account was low.

We are impressed that the trial court was correct in finding that this purchase was made by the respondents on their own account and paid for by them, and the balance due was not on the credit of the partnership.

As we have shown the bill as amended sets up facts on which it is prayed that a trust be decreed in favor of complainant on account of payment made by him personally. But the only contention now made, as we have said, is that the property was partnership property because purchased with partnership funds. A resulting trust in favor of the partnership in the land bought with its funds, with the title taken in one of the partners, is not alleged in the bill. But if sufficient allegation had been made, the evidence does not support the contention that the land was purchased with partnership funds.

Our findings and that of the trial court refute all claim for a resulting trust in favor of complainant or the partnership. The payment by complainant claiming to establish his right to the trust must have been made as a part of the purchase money at or before the purchase, and the trust must exist at the time the title passes. Talley v. Talley, 248 Ala. 84, 26 So.2d 586. But no such status is shown by any of the evidence. Nor are the elements of a constructive trust proven or alleged. Talley v. Talley, supra.

If the theory of appellant's counsel were supported that the property here in question became partnership property by its purchase with partnership funds or on partnership credit and for partnership purposes, the inference would be that it figured in the partnership settlement. But the parties here have not so contended and, therefore, we will not so treat it.

On no theory properly presented and proven has the complainant shown any right in equity to an interest in this property as by a resulting or constructive trust in favor of himself personally or in favor of the partnership of which he was a member. That aspect of the decree was rendered without error.

On the Cross Bill.

The court decreed that cross respondents W. E. Carroll and his wife Bertha Carroll are vested with the right, title and interest which they acquired from Home Owners Loan Corporation, as appears from their deed of April 9, 1942, and that as against this appellant they are entitled to the possession, and he is required within thirty days to vacate and surrender...