Case Title: Murillo v. Hernandez

Citation: 281 P.2d 786, 79 Ariz. 1

Docket Number: 

State: arizona

Court: Arizona Supreme Court

Date: 1955-04-05T00:00:00Z

Document:
79 Ariz. 1 (1955) 281 P.2d 786 Ygnacia F. MURILLO, Administratrix of the Estate of Serapio G. Murillo, deceased; and Ygnacia F. Murillo, a widow, Appellant, v. Sara M. HERNANDEZ, Appellee. No. 5930. Supreme Court of Arizona. April 5, 1955. *3 Alfred C. Marquez, Ralph Estrada, Daniel J. Sammons, Tucson, and H. Earl Rogge, Clifton, for appellant. Gibbons, Kinney & Tipton, Phoenix, and James Boyce Scott, Clifton, for appellee UDALL, Justice. Plaintiff, Sara M. Hernandez (appellee herein), brought an action against defendant-appellant Ygnacia F. Murillo, as administratrix of the estate of Serapio G. Murillo, deceased, and in her own individual capacity, seeking to establish a constructive trust in plaintiff's favor as to a one-half interest in certain realty situated in Clifton, Arizona. The parties will be referred to as they were designated in the lower court. The case was tried to the court sitting without a jury and no findings of fact were either requested or made. Judgment was entered in favor of plaintiff declaring a constructive trust to exist; setting aside a quitclaim deed given by plaintiff to her father (Serapio G. Murillo, now deceased), and ordering defendant to reconvey a one-half interest in certain lots and to make an accounting and pay over to plaintiff one half of the rents and profits accruing from said realty since the death of the decedent. Motion for a new trial was denied and this appeal followed. There is but little, if any, conflict in the evidence and the facts may be summarized as follows: Serapio G. Murillo and Benigna Murillo, husband and wife, had no children as issue of their marriage, and the plaintiff Sara M. (Murillo) Hernandez is their adoptive daughter. During coverture the adoptive parents acquired as community property city lots described in plaintiff's complaint. The wife Benigna Murillo died intestate April 29, 1937 and no steps were ever taken to probate her estate, but her husband continued to exercise control over this property. Thereafter, on October 17, 1937, Serapio married the defendant, Ygnacia F. Murillo, and during the coverture of this second marriage certain improvements were made and seven of the city lots described in the complaint were sold. These sales are in nowise disturbed by the judgment entered herein. On June 21, 1945, Serapio Murillo as grantee obtained from plaintiff a quitclaim deed, conveying all of her right, title and interest in and to the lots described in the complaint. This deed recites that the grantor is the sole heir of Benigna Murillo, deceased, the consideration stated is $10 (though plaintiff testified no money was paid to her), and it is further recited that "The interest hereby conveyed is the sole and separate property of the grantee herein". Details as to the circumstances surrounding the giving of this deed will be set forth later. Serapio G. Murillo died intestate on August 24, 1951, and his widow was appointed as the administratrix of his estate. Upon the latter's refusal to recognize that plaintiff had any beneficial interest in the real property theretofore conveyed by her to decedent this suit was instituted with the result heretofore indicated. *4 Plaintiff testified in response to leading questions of counsel that her father in exercising control and management of the property belonging to him and her deceased mother was "doing it to protect my interest", she relied upon her father a great deal and "I trusted my father very much". Plaintiff and her husband had lived in Richmond, California, for some two years prior to the summer of 1945, when her father and stepmother made a special trip to California to see them. We quote the following from the reporter's transcript: Two other witnesses testified as to statements made to them by Serapio G. Murillo relative to execution of the deed in question. The plaintiff's husband, Julian Hernandez, was asked: "Q. What was that conversation? A. Well, it was about needing some money and wanting my wife to sign a deed so that they could get this amount of money, and he told her that as soon as he was on his feet again he would return it to her." Gregorio Murillo, a nephew of decedent, testified that in June of 1945, he had a conversation with decedent, as follows: Plaintiff related several previous business transactions with her father. She testified that after the death of her mother, the father on August 5, 1939, gave her a quitclaim deed to a tract of realty in Clifton. It was later sold and she received the proceeds amounting to some $800. When shown a group of cancelled checks signed by her father with her named as payee and bearing her endorsement, plaintiff's explanation was that "I was always borrowing money from him." In the year 1947, as an investment plaintiff and her husband and her father bought a ranch in Tempe on a fifty-fifty basis, for which she signed the agreement to buy. The next year decedent purchased the Hernandez interest therein and they deeded this property back to her father, accepting $600 in cash plus a cancellation of her then indebtedness to him amounting to approximately $1,000. Plaintiff built a home on one of the lots now in litigation and has been living in it "off and on" for about six years, although she has never paid any rent thereon because her "father said she did not have to." Her father, and since his death, his second wife have always paid all the utility bills. The record further shows that plaintiff was of sound mind and normal intelligence. She was twenty-seven years of age when her mother died and thirty-five years of age when she executed the quitclaim deed in question. Prior to her marriage to Julian Hernandez she had been married to one Ruben Carvajal, although the date of this marriage does not appear. The record does not disclose that at any time since plaintiff first married she ever lived under the same roof with her parents or was a member of the Murillo household. The only documentary evidence offered in support of plaintiff's testimony that her father wanted her to sign the deed so he could "borrow money" was a realty mortgage given 26 months thereafter (on August 22, 1947) to the Valley National Bank et al. to secure an indebtedness of $7,000. Nor is there any documentary evidence showing the acquisition of other lands to support the nephew's statement the deed in question was given "so he (Murillo) could apply for a loan because he wanted to buy some more property". Defendant Ygnacia F. Murillo's only relevant testimony was that subsequent to her marriage to decedent four houses, financed by mortgage loans from the bank, were built on some of the lots. At the conclusion of the plaintiff's case, the lower court stated: Later counsel asked the trial court to reserve its ruling as they were endeavoring to effect a compromise and more than ten months then elapsed before judgment was finally entered. Defendant first contends that "The court erred in admitting evidence concerning statements of the decedent (grantee) in violation of sec. 23-105, A.C.A. 1939." This statute prohibits testimony of a party in cases brought by or against an administrator concerning transactions and statements of the decedent, "unless called to testify thereto by the opposite party or required to testify thereto by the court * * *." Counsel recognize it has been our uniform holding that admission of such testimony rests in the sound discretion of the trial court, Stewart v. Schnepf, 62 Ariz. 440, 158 P.2d 529, but contends the court abused that discretion in the instant case by admitting testimony of plaintiff and her husband relative to decedent's promise to reconvey. From the record however it appears such an objection was not made to Sara's testimony, the objection made being that a confidential relationship had not been shown and that such statements would be hearsay. It is elementary that it is now too late for defendant to argue this question, as this court will not consider an objection that was not first made in the lower court. Leigh v. Swartz, 74 Ariz. 108, 245 P.2d 262. The logic of this rule is apparent in the instant case for there could be no abuse of a discretion the trial court was not asked to exercise. Later, when plaintiff's husband, Julian, was asked to testify to decedent's statements, the prohibition of section 23-105, supra, was first raised. However, the objection was properly overruled as to his evidence because the statute in question has no application to testimony of one not a party to the lawsuit. Miller v. Miller, 7 Ariz. 316, 64 P. 415. The law is settled in this jurisdiction that an express trust based upon an oral promise modifying the terms of a conveyance absolute upon its face may not be shown. Wright v. Young, 20 Ariz. 46, 176 P. 583. However, when circumstances appear which render it unconscionable for the holder of the legal title to retain and enjoy the beneficial interest, equity, on the theory of an implied fraud, impresses a constructive trust on the property thus acquired in the favor of the one who is truly and equitably entitled to the same. Whether on the facts recited a constructive trust may be impressed in favor of plaintiff is the controlling question presented by this appeal. Both parties recognize the general rule that a constructive trust in the grantee is not created by the mere violation of a parol promise made by the grantee *7 to the grantor to hold the land in trust and to reconvey it on demand, in the absence of fraud in procuring the conveyance, Wright v. Young, supra. However, plaintiff relies upon an exception to this rule which has been recognized by this court, i.e., when a confidential relationship is shown to exist between two parties, even though no active fraud by the grantee in the procuring of a conveyance be shown, the mere existence of such confidential relation, when coupled with a promise to reconvey, creates a constructive trust. MacRae v. MacRae, 37 Ariz. 307, 294 P. 280; Dawson v. McNaney, 71 Ariz. 79, 223 P.2d 907. Whether such a confidential relationship was shown to exist is the major point on which the parties disagree. On the one hand defendant asserts that as a matter of law the proof does not establish the existence of such a relationship. In support of this assertion she cites cases for the proposition that a preponderance of the evidence is insufficient as such proof must be "clear and convincing", and that proof of mere family relationship is not of itself sufficient to meet this requirement. Plaintiff concedes that the proposition of law invoked by defendant is correct, but contends that the evidence adduced is sufficient to establish the confidential relationship on which the trust is necessarily based. Professor Bogert, in his work on Trusts, ably defines the scope of the confidential relation: This court has previously had occasion, in cases seeking to establish a constructive trust upon an oral promise to reconvey, to determine that a wife and *8 husband stand in such a confidential relationship. MacRae v. MacRae, supra, Dawson v. McNaney, supra. However, in an analogous situation we stated: "* * * It [a confidential relation] does not, as a matter of law, spring from the relationship of loco parentis existing between the aunt and the niece * * *." Amado v. Aguirre, 63 Ariz. 213, 161 P.2d 117, 120, 160 A.L.R. 1126. Whether the relation of parent and child is a confidential relation upon which a constructive trust may be predicated has been the subject of much litigation in other jurisdictions. Discussion of many of the cases on the problem may be found in an annotation entitled "Grantee's oral promise to grantor as giving rise to trust." under subdivision III, c. 7 entitled "where parties are parent and child, grandparent and grandchild, father-in-law and son-in-law, etc." 35 A.L.R. 280, 314; as supplemented in 45 A.L.R. 851, 855; 80 A.L.R. 195, 206; 129 A.L.R. 689, 696; and 159 A.L.R. 997, 1009. In the last cited supplement the following statement of the rule as discernible from the cases appears: In most cases in which such a trust has been established it appears there has been shown in addition to family relationship, age and infirmity on one hand, actual dominance on the part of the grantee, an established course of management of the grantor's affairs by the grantee, or other similar facts making it inequitable to allow the grantee to prevail. It is well established that where as here, proof of the oral promise to reconvey is primarily dependent upon the testimony of an interested party who relates purported conversations had with a now deceased grantee, the trial court must scrutinize the entire transaction with great care. The courts recognize the weakness of such evidence, which lies, of course in the ease of its fabrication and in the danger of misunderstanding verbal statements. Furthermore, under the rule, admissions of persons since deceased, to show a trust, are received with great caution. See Annotation 23 A.L.R. 1528, entitled "VI. Effect of delay in assertion of claim, or death of parties to transaction." Therefore, in an equitable proceeding to enforce such a promise there is no question but what the proof of a confidential relationship upon which to base a parol trust *9 must be established by clear and convincing testimony. The text writers and the courts have experienced difficulty in precisely defining this quantum of proof. See 20 Am. Jur., Evidence, sec. 1253; 32 C.J.S., Evidence, § 1023. In 54 Am.Jur., Trusts, sec. 621, the following statements appear: This court came to grips with the problem of what constitutes "clear and convincing" evidence in the equity cases of Costello v. Cunningham, 16 Ariz. 447, 147 P. 701, 710, and Stewart v. Schnepf, 62 Ariz. 440, 458, 158 P.2d 529. We adhere to those pronouncements and in writing this opinion have followed the pattern set in the Stewart case, supra, by setting forth in extenso the testimony necessarily relied upon by the trial court as establishing a constructive trust. The Supreme Court of Utah, in the case of Paulsen v. Coombs, Utah, 253 P.2d 621, 624, laid down this rule: See, also, Northcrest, Inc., v. Walker Bank & Trust Co., Utah, 248 P.2d 692. Our duty, on appeal, begins and ends with the inquiry whether the trial court had before it evidence upon which an unprejudiced mind might reasonably have reached the same conclusion which was reached. Using this test we are unable to say that the trial court's conclusion was so unreasonable that we should hold otherwise. Judgment affirmed. LA PRADE, C.J., and WINDES, PHELPS, and STRUCKMEYER, Jr., JJ., concurring.