Merit v. Losey

• Decision Date: 14 February 1952
• Parties: MERIT v. LOSEY et al.
• Court: Oregon Supreme Court

Page 933

240 P.2d 933

194 Or. 89

MERIT v. LOSEY et al.

Supreme Court of Oregon.

Argued and Submitted Nov. 15, 1951.

Decided Feb. 14, 1952.

Hugh B. Collins and Warren G. Lesseg, of Medford, argued the cause and filed a brief for appellant.

Edward C. Kelly, of Medford, argued the cause and filed a brief for respondent Pauline B. Losey.

Before BRAND, C. J., and HAY, ROSSMAN, and LUSK, JJ.

HAY, Justice.

This is a suit in which plaintiff, Thomas E. Merit, sought a declaratory judgment to determine the respective legal rights, status, and legal relations of himself and each of the defendants under a contract of sale of real property.

The complaint alleges that, prior to March 30, 1945, plaintiff and defendant Pauline B. Losey had become betrothed; that, on said date, in contemplation of marriage with said defendant, plaintiff procured defendants Charles T. Nahss and Henrietta Nahss, as vendors, to enter into an agreement in writing with plaintiff and defendant Losey, as vendees, for the sale of certain real property in Jackson county, Oregon, described as lot 4 and the north half of lot 6, Springbrook subdivision; that the vendees in such agreement were named as Thomas E. Merit and Pauline B. Merit, and described as husband and wife; that the agreed purchase price was $3,250, payable $600 on execution of the agreement and the remainder, including interest at 6 per cent per annum, in monthly installments of $30; that plaintiff paid the $600 down payment from his own funds, and that thereafter he made all the monthly payments required by the agreement; that defendant Losey contributed no part of such payments, it being understood between them that, in contemplation of their proposed marriage, she should not be required to do so; that defendant Losey broke her engagement to marry plaintiff; that she contends that she has become vested with an undivided one-half interest in said real property, has demanded that plaintiff purchase such interest from her, and has threatened, if he will not do so, to institute a suit against him for partition of the property, although she knows that plaintiff entered into said agreement to purchase said property solely in contemplation of marriage with her; that, by reason of the premises, defendant Losey has no right in the property; and that, if defendants Nahss consent, her name should be canceled from the contract, or that she should be required to quitclaim her interest in the property to plaintiff. A copy of the contract of sale is attached to the complaint as an exhibit.

The defendants Nahss answered, admitting the execution of the contract of sale and the payment of the sums due thereunder to and including the installment payment due in September, 1947, but denying the remaining allegations of the complaint on information and belief. For an affirmative defense they alleged that they have no knowledge as to whether Thomas E. Merit and Pauline B. Losey are husband and wife; that they, as vendors, have fully complied with the contract of sale, and, under the terms thereof, have executed a warranty deed in favor of Thomas E. Merit and Pauline B. Merit, husband and wife, and placed same in escrow with an escrow agent; that all payments under said contract have been made promptly; and that they 'stand ready and willing to comply with any Order of the Court made herein which is not contrary to' their interests.

Defendant Pauline B. Losey answered the complaint, admitting the execution of the contract of sale, and that, at the time of the execution thereof, plaintiff paid $600 to defendants Nahss as a down payment upon the purchase price, and denying generally all other allegations. For an affirmative answer, she alleged that, on or about June 27, 1936, she and plaintiff commenced living together as husband and wife at Colorado Springs, Colorado, which is a common law marriage state, but that they did not go through any ceremony of marriage; that, following June 27, 1936, plaintiff and she lived together continuously as husband and wife, first in California and subsequently in Oregon; that they jointly owned, possessed and held real and personal property as joint venture property in California as husband and wife; that, prior to coming to Oregon, they had accumulated joint venture funds, from which they purchased the real property described in the complaint and certain personal property; that all 'of said joint and community funds' had been acquired through their joint efforts, and that the real and personal property last mentioned was acquired 'from said joint and community funds acquired during the time since they had commenced living together as husband and wife'; that all payments made under said contract toward the purchase price of said real property until about April 1, 1947, were made 'from the joint and community funds of said parties'; that, by reason of the facts in said affirmative answer alleged, plaintiff and she purchased and held said real property as tenants in common. She prayed for a decree adjudging that plaintiff and she are such tenants in common, subject to the rights of the defendants Nahss under said agreement of sale.

A general demurrer by plaintiff to this answer was overruled by the court, whereupon plaintiff filed a reply comprising a general denial of the allegations of the affirmative answer and counterclaim, and three separate affirmative replies. The latter, in effect, alleged that, during the period of time when plaintiff and defendant Losey lived together, and particularly for several years prior to March, 1947, their relationship was intimate and confidential; that said defendant had represented to him that she would marry him, that the confidently expected to marry her, and that she exercised great influence over his actions; that, at all times during said period, he endeavored to please her and to comply with her wishes; that, in consequence of her repeated urging and by reason of her influence over him, and in reliance upon her representations that she intended to marry him, he contracted to purchase the land involved herein in the names of defendant Losey and himself as wife and husband, and made, with his own funds, all the payments upon the purchase price thereof that had been made prior to the time when they ceased to live together.

Thereafter plaintiff filed a supplemental complaint, alleging that, since the filing of the original complaint and continuing to and including the month of January, 1949, he had paid the monthly installments of the purchase price due under said contract of sale.

After a hearing, the court made findings of fact and conclusions of law in favor of defendant Losey, and, based thereon, on March 9, 1950, entered its decree declaring that plaintiff Thomas E. Merit and defendant Pauline B. Losey are the equitable owners in fee simple of the real property herein involved, subject to compliance with the contract of sale between them and defendants Nahss. Plaintiff appeals.

As the defendants Nahss are, in effect, simply stakeholders in the transaction, we shall refer to plaintiff and Mrs. Losey as 'the parties', and to Mrs. Losey as 'defendant'. The parties first became acquainted at San Diego, California, in 1935. Defendant at that time was married, although she had procured an interlocutory decree of divorce in a California court. Plaintiff had been married twice, but had been divorced from his first wife and was living apart from his second. The parties began living together, ostensibly as husband and wife, in about the month of June, 1936. Each of them testified that their association was entered into in contemplation of future marriage, although no definite time for such marriage had been agreed upon. Defendant secured a final decree of divorce on August 14, 1936. A final decree dissolved plaintiff's marriage in either April or May, 1937. Defendant testified that thereafter she frequently urged plaintiff to marry her, but that he always put her off with one excuse or another and finally told her that they were as much married as a piece of paper could make them. They cohabited, she says, ostensibly as husband and wife, at San Diego, California, Seattle, Washington, Klamath Falls, Oregon, Oakland, California, Truckee, California, Yuba City, California, and Los Angeles, California, and finally settled in or near Medford, Oregon, in 1944, still unwed.

Prior to the purchase of the real property hereinafter mentioned, both parties worked for wages, plaintiff fairly continuously, and defendant a considerable part of the time. Whatever moneys they earned they placed in a strong box, which was accessible to both. Money was withdrawn from this box by either of them from time to time to pay current bills. They kept no account of such moneys. They never had any bank account.

They held themselves out to their associates, friends and relatives as husband and wife, and, jointly as such, rented property, entered into business undertakings, purchased war bonds, and filed income tax returns. During a part of the time of their association, plaintiff carried insurance--whether life or accident does not appear--with defendant, named as his wife, as beneficiary.

Both parties testified that the $600 cash down payment on the executory contract of sale and purchase of real property was money taken from the strong box. The real property consists of approximately eight acres of land, and is adapted to agricultural uses. After they purchased the land, the parties bought two cows, and some chickens and turkeys, paying therefor with money taken from the strong box. The parties took up their residence upon the purchased real property, and defendant cared for the property as well as for the livestock. On alternate days, plaintiff would be absent on duties connected with his employment, but when he was home he did the milking. The monthly installments upon the purchase of the real property, subsequent to the down payment,...