Case Title: Newton v. Pickell

Citation: 201 Or. 225, 269 P.2d 508

Docket Number: 

State: oregon

Court: Oregon Supreme Court

Date: 1954-04-21T00:00:00Z

Document:
Affirmed April 21, 1954.
*226 Ray Rhoten argued the cause for appellants. On the briefs were Rhoten, Rhoten & Speerstra, of Salem.
James O. Goodwin, of Oregon City, argued the cause for respondent. With him on the brief was Glenn R. Jack, of Oregon City.
Before WARNER, Acting Chief Justice, and LUSK, BRAND and TOOZE, Justices.
AFFIRMED.
WARNER, A.C.J.
The plaintiff Ida A. Newton brings this suit to set aside the deed hereinafter referred to as being a conveyance in fraud of her rights accruing under an antenuptial agreement made between her and her husband in 1947. From a decree favorable to plaintiff, the defendants appeal.
Plaintiff and William L. Newton were married on June 17, 1947. Marital difficulties led to their separation sometime in March 1949. This culminated in a suit for divorce wherein each party prayed for a decree; but the suit, after trial in August 1949, terminated in a dismissal. The separation, however, continued until Mr. Newton's death in February 1951.
Mr. and Mrs. Newton had each been married before, and each was the owner of properties accumulated prior to their union in 1947. The day before their marriage they entered into an antenuptial agreement as prepared by Mr. Newton's attorneys. The essential provisions of this agreement, in which plaintiff was first party and the decedent Newton was second party, insofar as they relate to the subject real property read as follows:
We have for the convenience of later reference numbered the foregoing paragraphs one through six, although that device was not employed in the instrument as executed.
No issue is raised as to performance on plaintiff's part under the agreement.
Long prior to and at the time of this marriage, Mr. Newton owned and occupied a parcel of residential property situated in West Salem, Polk county, Oregon. This is the parcel which is referred to in paragraph 5 above and which is the subject of the instant suit. The Newtons continued to make their home in the West Salem property until they acquired and thereafter occupied a place which they purchased in Salem, Marion county, Oregon. This Salem home was purchased with funds which each had deposited in the joint bank account referred to in the antenuptial agreement. *229 During the entire period from the date of his marriage to plaintiff until the date of his death, Mr. Newton received and retained such rentals as accrued from the West Salem property, notwithstanding the alleged delivery of the deed to his son Gerald Newton, hereinafter referred to.
It appears that on the 14th day of June, 1947, three days before his marriage to plaintiff and two days before the antenuptial agreement was signed by the parties, Mr. Newton executed a deed to the West Salem parcel in favor of his son, the defendant Gerald Newton. There was no consideration for this conveyance. The deed was not recorded until March 12, 1948, and was thereafter returned by the county recorder to the office of the attorneys who had prepared it for plaintiff's husband. Some time later, "about 2 1/2 or 3 months" prior to the divorce trial in August 1949, the deed was mailed to Gerald Newton, then in Tillamook, Oregon. He testified that prior thereto he had neither seen nor heard about the deed. Gerald now claims title to the premises by reason of that instrument.
It is the contention of the appellants that paragraphs 5 and 6, when read together, make it clear that the parties contemplated that any new home which they purchased would be substituted for any home jointly owned by the entireties. Under this construction of the contract, appellants claim that the purchase of the Salem property effected a substitution for the West Salem property and voided any claims that Mrs. Newton might have in and to the West Salem parcel, notwithstanding her substantial contribution to the purchase price of the Salem property.
We cannot accede to this construction. Paragraph 5 above is clear and unambiguous that "there shall *230 be excepted from the operation of this agreement the home * * * now belonging to the party of the second part [William Newton], and the party of the second part agrees to convey unto the party of the first part [plaintiff] an undivided one-half interest therein by the entirety". (Italics ours.)
1. The relationship between the parties to an antenuptial agreement is fiduciary in character if the agreement was entered into after the parties became engaged. Squibb v. Catching, 264 Ill App 499; 41 CJS 573, Husband and Wife, § 99. It is a confidential relationship wherein the parties are not dealing at arms' length. Lindey, Separation Agreements and Ante-Nuptial Contracts, p. 652.
In 26 Am Jur 889, Husband and Wife § 281, it is said:
2. The agreement between the Newtons gave rise to a trust between them as to the instant property, creating an equitable interest in the plaintiff with the legal title reposing in the decedent as trustee. "* * * Antenuptial contracts in regulation of the interest that each shall have in the property of the other then owned or subsequently to be acquired are favored, and will be enforced by imposing a trust on the property. * * *" 1 Perry, Trusts and Trustees 7th ed, 173, § 122. Among the many cases cited by Perry in support of the foregoing rule is Johnson v. Spicer, 107 *231 NY 185, 13 NE 753, 755, wherein the New York Court of Appeals makes this cogent statement:
The same thought finds expression in 3 Scott, Trusts, 2338, § 470, in this statement:
What then is the position of a grantee to the title to property which is the subject of an antenuptial agreement? The rule which operates either for or against him, according to the facts, in confirmation or rejection of his title so taken from one of the parties to the marital settlement is indeed a familiar one touching the title to all holders of title to property derived from a trustee. It is well stated in 4 Pomeroy, Equity Jurisprudence 5th ed, 102, § 1048:
Also see 2 Restatement, Trusts, 879, § 289; Scott, Trusts, 1598, 1600, § 289.
3. A trust having arisen with respect to the challenged title and the defendant Gerald Newton claiming title under a deed without consideration, it follows that he holds the same as a constructive trustee for the use and benefit of the plaintiff.
The decree will be affirmed.