Matthews v. Matthews

• Decision Date: 27 September 1973
• Citation: 288 So.2d 110,292 Ala. 1
• Parties: James W. MATTHEWS v. Mary MATTHEWS and Lois Matthews, a minor. SC 86.
• Court: Alabama Supreme Court

Page 110

288 So.2d 110

292 Ala. 1

James W. MATTHEWS v. Mary MATTHEWS and Lois Matthews, a minor.

SC 86.

Supreme Court of Alabama.

Sept. 27, 1973.

Rehearing Denied Jan. 24, 1974.

Gray, Seay & Langford, Tuskegee, for appellant.

Russell, Raymon & Russell, Tuskegee, for appellees.

COLEMAN, Justice.

Plaintiff appeals from a decree granting him relief in a suit to establish in his favor a resulting trust in real property. Respondents have cross assigned errors.

The bill of complaint was filed February 20, 1970. In paragraphs numbered in the bill as follows, complainant makes averments to the following effect:

1. He is sui juris and a resident of Macon County; that respondent Mary Matthews is sui juris and a resident of Dale County; that respondent Lois Matthews is sixteen years old, is the daughter of respondent Mary Matthews and Herman Matthews, deceased, and is in the care and custody of her mother with whom Lois resides.

2. The property involved is Lot 27 of a subdivision in Macon County.

3. On April 4, 1950, the lot was vacant and unimproved. On that date complainant entered into a written contract with a construction company and the owner of the lot whereby the company agreed to construct a dwelling house on the lot and complainant agreed to pay $8,300.00 therefor. Complainant paid $350.00 earnest money and agreed to pay the balance of the purchase price.

4. For convenience of the parties to the contract, title to the lot was transferred to complainant's nephew, Herman Matthews, then living, on November 15, 1950, at which time construction of the dwelling house had been completed. Herman Matthews has never claimed the lot to be his nor asserted any right or interest therein. Complainant has occupied the house continuously since said purchase, has maintained the house in a state of repair and has treated the same as his own. Complainant paid the $350.00 earnest money and has paid each and every installment of the balance of the purchase price and continues to pay the same as they mature.

5. On June 9, 1968, Herman Matthews died intestate leaving as his sole heir the said minor child, respondent Lois Matthews, and his widow, respondent Mary Matthews. 'No administration has been had upon the estate of said decedent, and he died seized and possessed of the said real property.'

6. Complainant offers to do equity.

Complainant prays that upon a final hearing the court will:

1. Ascertain and establish a resulting trust in favor of complainant in and to said lot.

2. Divest all title to said lot out of respondents and vest title in complainant.

3. Grant to complainant such other and general relief to which he is entitled and which the court may deem proper.

Guardian ad litem was appointed for the minor respondent.

Respondents filed demurrers which the court overruled.

Respondents filed an answer. They admit the averments of paragraphs 1, 2, and 5 of the bill of complaint and deny the averments of paragraphs 3 and 4.

3. Complainant has occupied the premises in suit from November 15, 1950, as the tenant of Herman A. Matthews, until June 9, 1968, and, since said date, as the tenant of respondents; thas as rent, complainant has paid the payments due on the mortgage indebtedness from Herman A. Matthews to Alabama Exchange Bank; and that said mortgage is for the principal sum of $8,300.00, is dated February 9, 1951, and is recorded in the 'Probate Office of Macon County, Alabama.'

4. Said lot was conveyed to Herman A. Matthews by warranty deed dated November 15, 1950, and recorded February 20, 1951. Complainant knew that the lot was owned by Herman A. Matthews. Complainant, since 1951, has assessed the property for taxes in the name of Herman A. Matthews and after his death in 1968 in the name of "Herman A. Matthews' estate'.' 'That complainant admits in his Bill of Complaint that he knew on November 15, 1950, that title to said property was taken in the name of Herman A. Matthews. However, over 19 years passed before he filed his Bill of Complaint in this cause. Therefore, complainant is barred from bringing this action by the statute of limitations of ten years for the recovery of real estate. The complainant, further, waited until more than twenty months after the death of Herman A. Matthews to bring this proceeding, allowing Respondents to lose the testimony of Herman A. Matthews, deceased. Respondents further allege that complainant is now barred by laches from maintaining this proceeding.'

It appears that the Herman Matthews referred to in the bill and the Herman A. Matthews referred to in the answer are one and the same person.

Decree.

After hearing testimony ore tenus, the court rendered final decree which, as here pertinent, is to the following effect.

The court finds that complainant entered into a contract with Southern Construction Company on April 4, 1950, to purchase the lot together with house to be constructed thereon for $8,300.00. Subsequently, complainant represented to the Alabama Exchange Bank that complainant was the father of Herman A. Matthews, a member of the United States Armed Forces at the time and entitled to a 'VA insured loan'; that the bank, acting through its president, understood that the house and lot were being purchased as a home for the father of Herman A. Matthews, when in fact, the bank had been misled and the property was being purchased for the use of Herman A. Matthews' uncle, the complainant. Therefore, title to said property was taken in the name of Herman A. Matthews and he executed a 'V. A. Insured Mortgage' to the bank for $8,300.00 dated February 9, 1951, and he and complainant executed the note secured by said mortgage. 'Therefore, the Court is of the opinion that the Complainant, through his own misrepresentation obtained the use of a four per cent (4%) Veterans Administration Loan when, in fact, he was not entitled to such loan and at the time, would have had to pay at least six per cent (6%) interest on any money that he may have borrowed to purchase a home with. For these reasons, the Court if (sic) of the opinion that the Complainant does not come into this Court with clean hands.'

The court further states that the court 'is satisfied from the evidence' that the mortgage to the bank has been paid; however, the testimony is in conflict as to whether Herman A. Matthews sent money to complainant which was to be applied upon the mortgage payments and whether the complainant was making the payments as rent.

The court further found that at this time the legal title is in respondents and stated: 'In view of the facts and the equities of this cause, the Court is of the opinion that title to said real estate should be vested in the Complainant, if the Complainant will do equity in this cause by paying to the Respondents the benefits he received on the lower interest rates on said mortgage by virtue of his obtaining through deception the benefits of the Veterans Administration loan to which veteran, Herman A. Matthews, deceased, was entitled.'

The court decreed to the following effect:

1. That complainant comes into court with unclean hands due to the fact that he obtained the benefits of the V.A. loan granted to his nephew at four per cent per year, and due to complainant's inequitable conduct, he saved at least $2,408.00 in interest, being the difference in interest between a 4% Loan and a 6% Loan for twenty years.

2. That if complainant will pay to the register on or before July 15, 1972, the sum of $2,408.00, to be paid to respondents to do equity to them, then complainant is entitled to have a resulting trust declared and title vested in him.

3. Upon payment of said sum into court, the register is ordered to report the same to the court, and the court will enter a final decree vesting title in complainant. If complainant has not paid said sum into court by July 15, 1972, the court will enter a final decree dismissing complainant's bill for his failure to do equity.

On the appeal.

Complainant assigns as error the action of the court in ordering appellant to pay into court the sum of $2,408.00 to be paid to respondents.

Among the reasons relied on by complainant in support of this assertion of error is the rule that affirmative relief can be granted to a respondent only on a cross bill, and the rule that that relief granted to a party in equity must be within the scope of the issues as framed by the pleadings.

In Sturdivant v. Sturdivant, 276 Ala. 390, 162 So.2d 484, this court reviewed a decree in a suit for divorce. The complainant wife prayed for divorce and that the court award to her as permanent alimony the one half interest in a house and lot which the respondent husband claimed he was entitled to have her convey to him under an agreement the parties had made. The respondent filed a cross bill in which he prayed that complainant be required to deliver a deed to him for his interest in the property. The trial court granted a divorce to the complainant but dismissed the cross bill. Finally, however, the trial court awarded the property to complainant, but subject to a lien for $3,300.00, testified to by respondent as money spent by him in building the house. He did not pray for a lien on the house and lot.

This court, in Sturdivant, reversed and held that the award to respondent of the lien on the house and lot was error. This court said:

'Affirmative relief can be granted only on a cross bill. Marshall v. Rogers, et al., 230 Ala. 305, 160 So. 865; Hendrix v. Southern Ry. Co., 130 Ala. 205, 30 So. 596. The cross bill having been dismissed, there was no basis for the court to grant to the respondent the affirmative relief it sought to give him.

'The awarding of a special relief to the respondent granting the lien in his favor was not within the scope of the pleadings as framed. That portion of the decree is erroneous and is hereby reversed, and is remanded to the lower court for such further proceedings as may be undertaken by...