Simmons v. Smith

• Decision Date: 18 September 1985
• Citation: 20 Mass.App.Ct. 775,482 N.E.2d 887
• Parties: Richard SIMMONS v. Barbara SMITH.
• Court: Appeals Court of Massachusetts

Page 887

482 N.E.2d 887

20 Mass.App.Ct. 775

Richard SIMMONS v. Barbara SMITH.

Appeals Court of Massachusetts Bristol.

Argued May 10, 1985.

Decided Sept. 18, 1985.

Donald J. Fleming, Mattapoisett, for defendant.

Charles A. Murray, III, Fall River, for plaintiff.

Before PERRETTA, KAPLAN and KASS, JJ.

PERRETTA, Justice.

Central to the various claims asserted in the pleadings of the parties, brother and sister, is the issue whether their mother and father, both deceased, held title to certain premises located in New Bedford as beneficial owners or as trustees for the brother. This question whether "[t]here did exist a resulting trust in favor of" the brother was put to a jury and, upon their affirmative response, judgment in the brother's favor entered on all the claims. We affirm.

1. THE FACTS.

The following evidence was put before the jury. Between the years 1957 and 1962 the brother operated a service station on the property in question as dealer for the Atlantic Richfield Company (Atlantic). In 1960, the brother began negotiating with Atlantic for the purchase of the premises. An agreement was reached, and the brother made a down payment of $10,500 to Atlantic. He borrowed $8,500 from his parents to make that payment. On November 5, 1962, he and his parents took title to the property as tenants in common, granted a mortgage to the Brookline Savings Bank, and signed a mortgage note in the amount of $11,200. Thereafter, the brother operated the service station under an agreement with Atlantic. He conducted the business under the name of Dick's Atlantic, Inc. When the business was expanded in 1965 to include the buying, selling, leasing, and repairing of automobiles, a second corporation was formed, West End Motors, Inc. Although the brother and parents were officers and directors of the two companies, the brother was the treasurer and sole shareholder of each corporation. Additionally, the incorporators of each corporation signed a "Waiver of Notice," which provided that they did "waive notice of the time and place at, and of the purpose for, which any meeting of the Corporation has been, or shall be called or held." ¹

Between the time of the purchase of the premises until April of 1967, the brother reduced the loan from his parents by approximately $5,000. He also made the payments on the mortgage note, and he was responsible for the bills relating to the property, such as water and taxes.

Shortly after the mother's death in April, 1967, the father lent the brother $10,000 to pay off the mortgage note. That note was cancelled and the mortgage discharged in November of 1967. Thereafter, the brother continued to repay the father until July of 1976, when the father died.

The sister's claimed interest in the property originates with the death of her mother, who died intestate and whose one-third interest in the property passed to the father, the brother, and the sister. See G.L. c. 190, § 1(2), as amended through St.1956, c. 316, § 1, and as in effect at the time of the mother's death. The father died testate, leaving all his property, real and personal, to the brother and sister in equal shares. The first mention made by the sister of an interest in the property was in June, 1980, and came about in the following manner. By a note dated January 1, 1978, the brother lent the sister $12,000, which, according to the terms of that note, was payable upon demand. Some time in May, 1980, she told her brother that she wanted to sell her share of the property and asked that he share in the cost of having an appraisal done. The brother agreed to contribute to an appraiser's fee, and no more was said about the property until November.

Exhibits included in the record appendix indicate that in November of 1980 a dispute arose between the brother and sister concerning her use of the money she had borrowed from him in 1978 as it related to her failure to make any repayment. Matters came to a head when the brother, in November, notified the sister that he was demanding payment under the terms of the note she had signed. The sister responded that she did not have the money available but that she was prepared to sell her interest in the garage. The brother repeated his demand for payment, adding that the garage was not a part of the dispute between them. The sister reiterated her original position, that the note would be paid when the "matter of my share of the gas station is settled."

On January 28, 1981, the brother brought a complaint on the note, and the sister denied liability, asserting various affirmative defenses and a set-off due to her supposed share of the garage. She also sought an accounting from the brother for his use of the property. To this claim the brother answered that the parents' interest in the property, and, hence, the sister's interest, was as trustees and that he (the brother) was the sole beneficial owner. The final rally was the sister's response that the brother's claim of a resulting trust was barred by the doctrine of laches.

At the close of all the evidence, the judge directed a verdict for the brother on the sister's note and put the issue of the resulting trust to the jury. See Mass.R.Civ.P. 39(c), 365 Mass. 802 (1974).

2. THE RESULTING TRUST.

The sister makes diffuse arguments on appeal concerning the sufficiency of the brother's evidence of the existence of a resulting trust. She claims that it was error to deny her motions for a directed verdict and for judgment notwithstanding the verdict. In making these contentions, the sister points to the evidence she produced to defeat the brother's claim of sole ownership. The argument misses the mark, as it deals with issues of credibility rather than the sufficiency of the brother's evidence to support his claim.

A resulting trust will be found in favor of one who "buys and pays for real estate, but the conveyance of the title is to another." Howe v. Howe, 199 Mass. 598, 600-601, 85 N.E. 945 (1908). See Murphy v. McKenzie, 1 Mass.App. 553, 555, 303 N.E.2d 744 (1973). This well-established rule has application even where all or part of the purchase price was borrowed from the title holder. See Gerace v. Gerace, 301 Mass. 14, 18, 16 N.E.2d 6 (1938). There is a presumption that "he who supplies the purchase price intends that the property bought shall inure to his own benefit and not that of another, and that the conveyance is taken in the name of another for some incidental reason." Quinn v. Quinn, 260 Mass. 494, 501, 157 N.E. 641 (1927). See also Carroll v. Markey, 321 Mass. 87, 88-89, 71 N.E.2d 756 (1947); Caron v. Wadas, 1 Mass.App. 651, 655, 305 N.E.2d 853 (1974).

Our review of all the evidence leads us to conclude that a verdict for either the brother or the sister could have been returned by the jury, depending only upon how issues of credibility were resolved. It may well have been the numerous cancelled checks from the brother to the mother and father and the various corporate documents that tipped the scales in the brother's favor. In any event, we see no error in the judge's denial of the sister's motions for a directed verdict and for judgment notwithstanding the verdict.

3. THE SISTER'S AFFIRMATIVE DEFENSES.

In her answer to the brother's claim for a resulting trust, the sister affirmatively set forth the defense of laches, but made no mention of the doctrine of estoppel. See Mass.R.Civ.P. 8(c), 365 Mass. 750 (1974). See also Building Inspector of Lancaster v. Sanderson, 372 Mass. 157, 162, 360 N.E.2d 1051 (1977). Her failure to plead estoppel affirmatively does not, however, preclude our consideration of her argument on that issue provided that the defense was "tried by the express or implied consent of the parties and there is no prejudicial surprise." National Med. Care, Inc. v. Zigelbaum, 18 Mass.App. 570, 578-579, 468 N.E.2d 868 (1984). Although the elements of estoppel differ...