Case Title: Trengen v. Mongeon

Citation: 206 N.W.2d 284

Docket Number: 

State: north-dakota

Court: North Dakota Supreme Court

Date: 1973-02-15T00:00:00Z

Document:
206 N.W.2d 284 (1973) Elaine TRENGEN, as Guardian of the Persons and Estates of Louis J. Mongeon and Margaret E. Mongeon, et al., Plaintiffs and Appellants, v. Pearl MONGEON, Defendant and Respondent. Civ. No. 8811. Supreme Court of North Dakota. February 15, 1973. Rehearing Denied April 12, 1973. *285 Duffy & Haugland, Devils Lake, for plaintiffs and appellants. Foughty, Christianson, Thompson & Rutten, Devils Lake, for defendant and respondent. TEIGEN, Judge. This suit was brought on behalf of Louis and Margaret Mongeon by their daughter, as guardian, against Pearl Mongeon, the widow of their son Ernest, to recover six quarters of land which were conveyed by Louis and Margaret to Ernest and Pearl on May 9, 1967. The district court dismissed the action, holding that there was consideration for the conveyance and that the plaintiffs failed to substantiate their charge of fraud and undue influence by the decedent. This appeal is from the judgment of dismissal. Ernest Mongeon worked and farmed for his parents until the early 1940's when he married Pearl. At that time Louis and Margaret moved off the farm and Ernest farmed their land on a crop-share basis, although Louis continued to help the farming operation both financially and physically. In 1950 Ernest purchased three quarters of land from Louis and Margaret and also received one quarter from them as a gift. In 1965 Louis and Margaret joined with Ernest in a note and mortgage covering Ernest's land plus three quarters owned by Louis and Margaret in order that Ernest could increase an existing loan from the Federal Land Bank. They also built a barn on Ernest's land as a gift and helped him finance the purchase of a combine. There is no record of any discord between Ernest and Pearl and Louis and Margaret. *286 The transaction which constitutes the basis for this action took place on May 9, 1967. On that date Louis and Margaret executed a warranty deed for approximately 960 acres of land to Ernest and Pearl. The deed contains a recital and an acknowledgment of the receipt of $38,400 as consideration for the conveyance. At the same time an agreement was entered into between the two parties whereby Ernest and Pearl agreed to pay to Louis and Margaret the sum of $1,800 annually for as long as both or the survivor of them shall live. The agreement states that The first issue to be discussed concerns the construction of the two instruments, the deed and the agreement. Instruments which have been executed at the same time, by the same parties, in the course of the same transaction, and concerning the same subject matter, are to be read and construed together. American Poster Co. v. Cammack, 139 Minn. 372, 166 N.W. 501 (1918); Place v. Place, 207 Kan. 734, 486 P.2d 1354 (1971); Parks v. Frankfurt, 476 S.W.2d 717 (Tex.Civ.App. 1972); Hoerner Waldorf Corp. v. Bumstead-Woolford Co., 494 P.2d 293 (Mont. 1972). Section 9-07-07, N.D.C.C., provides that "[s]everal contracts relating to the same matters between the same parties and made as parts of substantially one transaction are to be taken together." In First Nat. Bank v. Flath, 10 N.D. 281, 86 N.W. 867 (1901), the court said that this statute "plainly means that they are to be `taken together' for the purpose of interpreting, either the transaction to which they relate, or the several contracts themselves." See also Knox v. Krueger, 145 N.W.2d 904 (N.D.1966). The deed and the agreement must therefore be construed together. In construing these two instruments "[t]he rule is that a party to a written contract may show that the consideration therefor is different from that recited in the writing. [Citations.] But this rule is simply that, in so far as the writing is a receipt, a statement of a fact, it is subject to modification, explanation, or contradiction. * * * It is never applied to the extent of permitting a party to show that the agreement was other than that set forth in the writing." Clark v. Henderson, 62 N.D. 503, 244 N.W. 314, 315, 316 (1932). In Allgood v. National Life Ins. Co., 61 N.D. 763, 240 N.W. 874, 875 (1932), the court quoted with approval the following statement from Harding v. Robinson, 175 Cal. 534, 166 P. 808 (1917): Therefore the trial court properly allowed parol evidence to show a failure of consideration recited in the deed and did not allow parol evidence to vary the terms of the agreement, such terms being the annual payment of $1,800 in exchange for the conveyance of the land in question. The above holding of the trial court is predicated upon an absence of fraud or undue influence on the part of Ernest. The second issue, therefore, is whether Ernest took advantage of the confidential relationship which existed between himself and his parents, and by means of fraud and undue influence caused them to convey the land in question to himself and the defendant, thereby giving cause for the imposition of a constructive trust in favor of his parents. Section 59-01-05, N.D.C.C., provides that "[a]n implied trust is one which is created by operation of law." A constructive trust comes within the definition of an implied trust. Van Sickle v. Olsen, 92 N.W.2d 777 (N.D.1958). Under Section 59-01-06, N.D.C.C., an implied trust arises in the following manner: In Wildfang-Miller Motors, Inc. v. Miller, 186 N.W.2d 581, 582 (N.D.1971), the court held as follows in paragraphs 1, 2 and 3 of the syllabus: The plaintiffs' charge of fraud and undue influence rested in part on testimony of conversations which Louis had with Ernest prior to the conveyance. The trial court held that testimony came within Section 31-01-03, N.D.C.C., and was inadmissible. That section reads in part as follows: Plaintiffs argue that because this action is brought against the defendant as the survivor in a joint tenancy deed she is not appearing in any capacity which brings her within this statute. We agree. In Mowry v. Gold Stabeck Co., 48 N.D. 764, 767, 186 N.W. 865, 866 (1922), an action to determine adverse claims to a half section of land, the plaintiff had received a deed to the land from his father prior to the father's death. At the trial the defendant was allowed to testify concerning many transactions and arrangements he had with the deceased. On appeal the plaintiff contended that the trial court had erroneously *288 received the defendant's testimony. The court held as follows: To the same effect see also Heuer v. Heuer, 64 N.D. 497, 253 N.W. 856 (1934); McDonald v. Miller, 73 N.D. 474, 16 N.W.2d 270 (1944); Shong v. Farmers' & Merchants' State Bank, 70 N.W.2d 907 (N.D. 1955). An analagous fact situation is present in this case. The land in question passed to the defendant by right of survivorship upon Ernest's death and was not a part of his estate. The trial court was therefore in error in ruling that the court would not consider testimony of conversations Louis had with Ernest. Plaintiffs' counsel was allowed to make an offer of proof by stating what Louis would testify, but was not allowed to make the offer of proof in the form of direct examination of Louis. The substance of the offer of proof is that the conveyance of the land in question took place because Ernest approached his father with the request that he deed the land to him so that he could obtain a loan from the Federal Land Bank. Following the offer of proof the plaintiffs testified to the effect that they understood that the transaction was neither a gift nor a sale, but was to be only a temporary conveyance and that the land would be returned to them after Ernest had paid off the loan. The content of the conversations between Louis and Ernest can therefore be inferred from this testimony, which was received by the trial court and is more extensive than the offer of proof. The trial court, at pp. 3 and 4 of its opinion, said: It is clear from the record that the trial court had all of the facts contained in the offer of proof before it and that it *289 considered these facts in its decision. Thus, although it was error to have rejected the testimony of the conversations, we feel such error was not prejudicial. The erroneous rejection of evidence will not be deemed prejudicial in a court-tried case where the facts of the transaction are before the court from other evidence. Horton v. Kyburz, 53 Cal. 2d 59, 346 P.2d 399 (1959); Ellis v. Williams, 312 S.W.2d 97 (Mo.1958); Bank of Dallas v. Wright, 47 S.D. 88, 196 N.W. 300 (1923); Hagin v. DeGeest, 85 S.D. 418, 185 N.W.2d 478 (1971). The trial court's finding of fact No. 12 is "[t]hat the plaintiffs have failed to prove that the defendant and her husband were guilty of fraud, duress, or undue influence towards the plaintiffs herein." The scope of review of that finding on an appeal to this court from a case tried without a jury is limited by Rule 52(a) of the North Dakota Rules of Civil Procedure, which provides in part: In applying the above rule this court must give great weight to the findings made and the inferences drawn by the trial court. We will set aside a finding only if we find, based upon all the evidence, that it is clearly erroneous. We have reviewed the evidence and conclude that we cannot hold that finding of fact No. 12 is clearly erroneous. The final issue that it is necessary to discuss is the plaintiffs' contention "[t]hat the Court erred in finding the consideration adequate for the six quarters of land in that $1800 per year for the lives of Louis Mongeon and Margaret Mongeon who were of the age of 87 and 83 years old respectively at the time, is so shocking and inequitable that it taxes the credibility." The trial court's finding of fact No. 13 is as follows: In Rose v. Lurvey, 40 Mich.App. 230, 198 N.W.2d 839, 841 (1972), the Michigan Court of Appeals held: The court in Rose cancelled the defendants' quitclaim deed and land contract assignment where the entire consideration for the transfer of equity in the property worth approximately $12,000 amounted to $1.05. In the present case the consideration is of an indeterminable value. Monetarily, payment of the sum of $1,800 was made in the fall of 1967, and that sum will continue to be payable on or before November 1 of every year for as long as both or the survivor of the plaintiffs shall live. Payments received by the plaintiffs to the present time total $10,800. See also 23 Am.Jur.2d Deeds, § 66. The trial court also found that the plaintiffs' love and affection for their son Ernest was both a motivating factor and part of the consideration for the transaction. 23 Am.Jur.2d Deeds, § 64; 26 C.J.S. Deeds § 18. The love and affection the plaintiffs felt toward Ernest is evidenced by the fact that, as stated in the agreement, the land in question had been devised to Ernest by the wills of both Louis and Margaret, and nine days after the land was conveyed to Ernest and the defendant, Louis and Margaret executed new wills, each of which contained this provision: Since the plaintiffs' brief places the value of the land conveyed at $80,000 in 1967, an inference that can be drawn from the above provision is that the plaintiffs regarded both the money and their love and affection for Ernest as consideration for the transaction. We conclude that, in the absence of a finding of fraud or undue influence, the evidence is sufficient to support a finding that there was adequate consideration to uphold the conveyance of the land from the plaintiffs to Ernest and the defendant. Judgment affirmed. STRUTZ, C. J., and ERICKSTAD, PAULSON, and KNUDSON, JJ., concur.