Title: Tostenson v. Ihland

State: north-dakota

Issuer: North Dakota Supreme Court

Document:

147 N.W.2d 104 (1966) Thomas TOSTENSON, Plaintiff and Appellant, Caroline Steger, Alma Rasmussen, and Olga Wold, Plaintiffs, v. Edward IHLAND, Mae Anderson, August L. Johnson, and to all persons unknown who have or claim any interest in the real property described in the complaint, Defendants and Respondents. No. 8321. Supreme Court of North Dakota. December 19, 1966. *107 Johnson, Milloy & Eckert, Wahpeton, for appellant. Lewis & Bullis and McMichael & Haugen, Wahpeton, for respondents. ERICKSTAD, Judge. Two actions were commenced in the District Court of Richland County. The first action was brought by Alma Rasmussen and Olga Wold against Edward Ihland to set aside quitclaim deeds which had been given by the plaintiffs to the defendant, to impose an implied trust, and to secure a reconveyance of the property. The second action was brought by Thomas Tostenson, Caroline Steger, Alma Rasmussen, and Olga Wold against Edward Ihland and others to determine title to real estate, to secure a partition thereof, and to obtain an accounting. The cases were consolidated for trial by agreement of the parties. The district court, acting without a jury, ordered judgment in favor of the defendants. Only the plaintiff Thomas Tostenson appeals from the judgment entered on this order. Trial de novo is demanded. The basic issue in this appeal is whether title to an undivided 1/8 interest in the real property in this action is in the plaintiff Thomas Tostenson or in the defendant Edward Ihland. It is undisputed that when Gunne Tostenson, a resident of Richland County, died on September 27, 1939, he was the owner of the property described in Mr. Tostenson's complaint; that, because he died intestate without a surviving wife, his eight children, among whom was the plaintiff Thomas Tostenson, became entitled to his estate; that each of the said children was decreed an undivided 1/8 interest in the real estate in the final decree of the County Court of Richland County dated October 10, 1942; that Rudolph Tostenson, one of the eight children, died December 11, 1943; and that in the probate of his undivided 1/8 interest in the real estate in contest here, Rudolph's 1/8 interest was sold by the administrator of his estate to the defendant Edward Ihland for the sum of $650. In the probate of Rudolph's estate Thomas was served the citation of the hearing of the petition for letters of administration by the sheriff of Cass County. The citation of the hearing of the petition for the sale of the real estate (the 1/8 interest of the decedent in the property formerly owned by his father, Gunne Tostenson) was not mailed to Thomas, because, as indicated by the affidavit of Mr. Forbes, the attorney for the administrator of the estate, Thomas's postoffice address was unknown. *108 The defendants contend that in 1946 each of the Gunne Tostenson heirs sold his or her interest in the real estate to the defendant Edward Ihland, subject to a mortgage in the defendant August L. Johnson in the sum of $3,000; that each of the said persons executed a deed conveying his or her interest in the property to Mr. Ihland; that all of said deeds have become lost or mislaid; that the plaintiff Thomas Tostenson is now estopped from denying the title of the defendant Edward Ihland or the mortgage of the defendant August L. Johnson; and that he is barred by the statute of limitations or through laches from asserting any claim to the property. The following paragraphs of the trial court's finding are relevant to the issues in this appeal: *109 In this appeal Mr. Thomas Tostenson asserts eighteen specifications of error. He has grouped these specifications of error in argument on appeal into six points which we shall consider in the order in which he has stated them in his brief. His first contention is that Attorney Vernon Forbes was not the agent of Thomas Tostenson in the sale of his interest in the land. The judgment of the district court is based upon the premise that Mr. Forbes was acting as an agent for the plaintiff at the time the sale was consummated. Mr. Thomas Tostenson denies that any agency for the sale of his interest in the property existed at any time. When agency is denied, the burden of proving it by clear and specific proof is on the party asserting it. In the case of Lander v. Hartson, 77 N.D. 923, 47 N.W.2d 211, in which Mr. Lander contended that Mr. Hartson purchased certain stock for Mr. Lander as Mr. Lander's agent, and Mr. Hartson denied the agency and contended that he purchased the stock for himself and not as agent for Mr. Lander, this court said: Our statute on agency has not been amended since that decision, nor has that decision been overruled. Lander has been quoted with approval in Vaux v. Hamilton, 103 N.W.2d 291 (N.D.1960). What evidence do we have to sustain this burden of proof? Mr. Forbes, testifying through a deposition taken in Alaska, stated that he represented Mr. Thomas Tostenson in the sale of the land to Mr. Ihland. Part of his testimony reads as follows: However, it is interesting that at the time of the probate of Rudolph Tostenson's 1/8 interest, Mr. Forbes did not even know Mr. Thomas Tostenson's postoffice address. Mr. Ihland asserts that all eight of the Gunne Tostenson heirs, including Thomas, employed Mr. Forbes or his law firm to prevent the sale of the land by the administrator of the Gunne Tostenson estate during the process of the probate of that estate, and that this establishes or supports his contention that Mr. Forbes was an agent for Mr. Thomas Tostenson in the sale of Mr. Thomas Tostenson's 1/8 interest in the land. Our view is that the employment of Mr. Forbes for such a purpose did not make him an agent of Mr. Thomas Tostenson for a wholly unrelated purpose, the sale of his interest in the property. Agency cannot be proved by showing the declarations of the alleged agent. See: Rigler v. North Dakota Const. Co., 57 N.D. 37, 220 N.W. 441, Syllabus 1. An examination of ledger sheets 1 and 5, offered by Mr. Ihland as Defendant's Exhibits "B" and "C," as the records of Mr. Forbes's law firm relating to the Rudolph *110 Tostenson estate, disclose that the firm received $2,200 from Mr. Ihland on April 4, 1945. A check dated April 3, 1945, payable to Forbes & Forbes in the sum of $2,200, signed by Edward Ihland, was also received in evidence. Although the ledger sheets indicate that Thomas Tostenson's six brothers and sisters each received checks of $50 and $116.31, and that four of them each received checks of $16.00, the ledger sheets fail to disclose that Thomas Tostenson received any money whatsoever. There appears to be an undistributed balance in the account; however, the amount, $111.86, does not equal the amount the other heirs received. These records cannot be said to support the contention that Mr. Forbes was an agent of and represented Mr. Thomas Tostenson in the sale of his 1/8 interest in the land acquired by him and his brothers and sisters in the Gunne Tostenson estate. The argument that Mr. Thomas Tostenson received no money for the reason that there was a judgment docketed against him is also without merit, for there is no proof in this record that any part of the judgment, which is still of record for the full amount, was paid out of the proceeds of the $2,200 paid by Mr. Ihland. Mr. Ihland draws our attention to the following statute: North Dakota Century Code. As this statute recognizes that an attorney must act "within the scope of his proper duties and powers," and as the record does not disclose that he had any more authority than was necessary to act as attorney for the administrator of the Rudolph Tostenson estate, his authority did not extend to the sale of Mr. Thomas Tostenson's 1/8 interest in the property acquired from his father Gunne Tostenson. That the Gunne Tostenson heirs employed Mr. Forbes in 1942 to prevent the sale of the land at that time and that the law firm of Forbes & Forbes asserted in the petition on behalf of the heirs that the real estate was then worth at least $6,000 weighs against Mr. Ihland's contention that in 1946 he received the full interest in the property by paying $2,200 and assuming the mortgage of $3,000, thereby paying only $5,200. We therefore find that Mr. Ihland has failed in his burden of proving the existence of an agency for the purpose of the sale of Mr. Thomas Tostenson's 1/8 interest. The second contention of the appellant, Mr. Tostenson, is that Mr. Ihland has failed to prove the existence of an enforceable oral purchase agreement with the plaintiffs through an agent or otherwise. There was no written authority given by Mr. Thomas Tostenson to Mr. Forbes to sell the real estate. The only evidence of oral authority was the testimony of Mr. Forbes himself. Certain of our statutes appear pertinent at this point: North Dakota Century Code. The statute relating to the form of authorization of agency in effect at the time of the purported agency read as follows: North Dakota Century Code. In the case of Severson v. Fleck, 148 F. Supp. 760 (D.N.D.1957), an action by a real estate broker (not an attorney) for a real estate broker's commission on the sale of real estate based upon a purported oral agreement, the United States District Court said: Severson v. Fleck, supra, at 766. We believe that the rule applied in Severson, that a contract of sale of realty entered into with a purchaser by an agent who has only verbal authority from the owner is void, applies in the instant case, although the purported agent in this case is an attorney, whereas the purported agent in Severson was a real estate broker. Mr. Ihland's contention is that there has been sufficient partial performance to take the agreement out of the statute of frauds, and thus that the district court had authority to order specific performance of the alleged oral agreement for the sale of the real property. In the instant case Mr. Ihland testified that he paid Mr. Forbes $2,200, assumed a mortgage on the property for $3,000 and made payments thereon, paid the real estate taxes, and has been in possession since sometime in 1945 or 1946. No evidence was submitted as to improvements. In support of his contention that this case does not come within the statute of *112 frauds because he has substantially performed the agreement, Mr. Ihland states that an oral agreement for the conveyance of an interest in real property, within the statute of frauds, may be enforced, although not in writing, if the party takes possession and makes improvements on the property. He cites § 47-10-01, N.D.C.C., and Brandhagen v. Burt, 117 N.W.2d 696 (N.D.1962). An examination of Brandhagen discloses facts much different from the facts in this case. In Brandhagen the alleged agreement was that the plaintiffs had orally agreed with the defendant at the time of the construction of the plaintiffs' and the defendant's buildings that the defendant could use the east wall of the plaintiffs' building as a party wall if the defendant would pay one-half of the cost of erecting the east wall of the plaintiffs' building; that inasmuch as the plaintiffs' building's east wall was to be 18 inches from the plaintiffs' east lot line, the plaintiffs would give to the defendant an easement to the 18-inch strip; that in consideration of the use of the plaintiffs' wall by the defendant as a party wall and in further consideration of the plaintiffs' giving to the defendant an easement to the 18-inch strip, the defendant would restrict the use of his building and would not carry on certain designated types of business therein for so long as the agreement between the parties continued to be in force; that the cost of a common or joint sewer or water line to the properties would be shared equally; and that the defendant would pay any repairs necessary to the plaintiffs' building's east wall for so long as it was being used as a party wall by the defendant. It was further shown in Brandhagen that the plaintiffs' and the defendant's buildings were erected in due time; that in constructing the east wall of their building, the plaintiffs caused notches to be placed in the concrete for the express purpose of tying in the joists of the defendant's building; and that the defendant's building was then so constructed that it made use of the plaintiffs' building's east wall as the west wall of the defendant's building. The plaintiffs then allowed eleven years to go by before commencing their action to quiet title and for damages for the use and occupation of the 18-inch strip of their property. The facts are obviously so dissimilar that Brandhagen cannot be used as a precedent in this case. However, we believe that the facts in this case are much more comparable to the facts in Parceluk v. Knudtson, 139 N.W.2d 864 (N.D.1966). That case was an action brought by a tenant in common to quiet title to her undivided 1/9 interest in certain real estate. Parceluk differs from the instant case in that the defendant in this case was not a cotenant. Nevertheless, we believe that the reasoning applied in Parceluk applies in this case. In Parceluk the record discloses that the plaintiff acquired an undivided 1/9 interest in certain land through her father's estate. The defendants contended that subsequent to the closing of the estate the plaintiff sold her 1/9 interest in the estate, both real and personal, to her mother and her three brothers; and that, although the sale was made orally, the full purchase price agreed upon was paid to the plaintiff. The defendants further supported their claim to the property by asserting that they had remained in possession for thirteen years after the alleged sale had been made without any objection from the plaintiff, and that, relying on such oral sale, the defendants had made valuable and permanent improvements upon the real estate. The plaintiff admitted receiving $2,345 but alleged that this was for the sale of the personal property in the estate; the trial court found that she had been paid $2,529.19, and that another sister had sold her entire interest in the estate, including her interest in the real estate, for approximately the same *113 amount. Notwithstanding these facts, this court held that there was an insufficient showing of partial performance to take the oral agreement for the sale of the interest of the plaintiff in the real estate out of the statute of frauds. In so finding this court applied two rules: First, the mere payment of money consideration by a buyer generally is not sufficient justification for enforcing an oral contract to convey land. Second, the acts relied upon for partial performance, in order to be sufficient to relieve an oral agreement from the effect of the statute of frauds, must be such as to be incomprehensible unless related to the contract to convey an interest in land. In Parceluk this court said that the defendants' possession and the making of improvements upon the premises were consistent with the operation of the ranch under the 8/9 ownership of the defendants and thus were acts of performance insufficient to take the case out of the statute of frauds. In the instant case there is no proof whatsoever of any improvements having been made nor of any payment having been received by Mr. Tostenson for any part of his interest in the real estate. The payment of the taxes, partial payment of the $3,000 mortgage, and the possession of the premises by Mr. Ihland are consistent with his operation of the land under his 7/8 ownership of the property. Therefore, we do not believe that the acts relied upon by Mr. Ihland for partial performance are such as to be incomprehensible unless related to the contract to convey. In light of what has already been said and also applying the rules laid down in the syllabus of Syrup v. Pitcher, 73 N.W.2d 140 (N.D. 1955), we conclude that Mr. Ihland has failed in his burden of proving that he is entitled to have the alleged oral contract specifically performed. Those rules read as follows: Syrup v. Pitcher, supra, at 142. The third general area we must consider in this case arises from Mr. Ihland's contention that Mr. Tostenson is estopped from asserting his title. In support of his contention that Mr. Tostenson is estopped from asserting his title to his 1/8 interest in the land, Mr. Ihland refers us to the following from Corpus Juris Secundum: 31 C.J.S. Estoppel § 94, at 505-509 (1964). The paragraph which we have italicized is more in support of Mr. Tostenson's position than of Mr. Ihland's position. Having sought to purchase the property, it was Mr. Ihland's privilege, if not his responsibility, to have obtained an abstract of title to the property and to have secured an opinion from an attorney disclosing the state of the title both prior to the sale and following its consummation continued to the date of the purchase. The records in the Richland County Register of Deeds office were a convenient and available means of acquiring knowledge of the true state of the title and were actually more available to Mr. Ihland, who lived in that county, than they were to Mr. Tostenson, who lived in Cass County. It must be assumed that Mr. Ihland had knowledge that the title records were available in the Register of Deeds office. In the syllabus of a decision rendered by this court in 1966, a case in which a plaintiff sought to quiet title to certain real estate, alleging that the defendant was estopped from asserting her title to the property because of her conduct, we said: In the instant case the conduct said to have affected the title to the property is Mr. Tostenson's failure to complain to Mr. Ihland during Mr. Ihland's nineteen years of possession of the property. However, there is no evidence clearly indicating that Mr. Tostenson was apprised of the true state of his own title. He had a very limited education, and it appears that he had entrusted the management of the land to his sister. There is nothing in the record to show that Mr. Tostenson ever knew that Mr. Ihland took possession and claimed the farm as his own. During the years that Mr. Ihland was in possession of the land *115 Mr. Tostenson lived in Fargo. The records show that he was not sent the notice of the hearing for the petition for the sale of his brother's 1/8 interest because, as explained in Mr. Forbes's affidavit, Mr. Forbes did not know Mr. Tostenson's postoffice address. He at no time received any money to place him on notice of Mr. Ihland's claim of ownership. His testimony was that it was not until 1962, when he received a letter from the law firm of Forbes, Warner & McMichael asking him to execute a quitclaim deed to the property that he realized that Mr. Ihland was claiming title to the property. He further testified that when he received this letter, he employed Mr. Hendrickson, an attorney at Fargo, to check the records, and that, after checking the records, he commenced this action. Analyzing the facts of this case in light of the rule laid down in Sittner, it can hardly be said that Mr. Tostenson was apprised of the true state of his own title; that his conduct, consisting of a failure to object to Mr. Ihland's nineteen years of possession and his payment of taxes and partial payment of the mortgage, was with the express intention to deceive, or that under the circumstances the conduct was with such careless and culpable negligence as to amount to constructive fraud; that Mr. Ihland was without the means of acquiring the knowledge of the true state of the title; and that Mr. Ihland relied directly upon Mr. Tostenson's failure to object and will be injured thereby. As Mr. Ihland is the owner of an undivided 7/8 interest in the land, there is no proof that he has been injured at all by Mr. Tostenson's failure to act or object or that he has been injured by having had the benefit of the possession of the land, the payment of the taxes, or the payment of $1,000 of the $3,000 mortgage. Obviously, the possession was a benefit, not a detriment. The payment of the taxes and the partial payment of the mortgage can be taken into consideration when the action for an accounting is considered, that action having been postponed by stipulation of the parties until a final determination of the matter of title. Therefore, we find that Mr. Ihland has failed in his burden of proving that the doctrine of equitable estoppel applies in this case. The lower court made no finding as to the issue of a lost deed, but as Mr. Ihland, in his amended answer and counterclaim, alleged that Mr. Tostenson executed a quitclaim deed conveying his undivided 1/8 interest in the land to Mr. Ihland and that this deed was delivered to Mr. Ihland, and as evidence was offered in respect thereto, the issue of a lost deed will be discussed herein. In a 1902 decision of this court involving an action brought by a plaintiff to quiet title to certain real estate, of which the plaintiff was the original patentee, and the defendant bank denied the plaintiff's claim to title and asserted that it was the owner of the land through a lost deed, this court said: In a decision rendered by this court in 1931 in which a defendant sought to assert title to certain real estate through a lost deed, we said: Corpus Juris Secundum has stated it this way: In the instant case how has the person seeking to establish the lost instrument sustained that burden of proof? Mr. Ihland testified that on April 3, 1945, he presented his check in the sum of $2,200 to Mr. Vernon Forbes as the cash payment on the land, and that at that time Mr. Forbes showed him the deeds from the Tostenson heirs. He further testified as follows: On the other hand, the attorney, Mr. Vernon Forbes, through a deposition taken in Alaska, testified as follows: Mr. Thomas Tostenson denied that he ever sold or deeded any part of the land to anyone. He further denied that he had any dealings with Mr. Ihland or conversations with him about the land or about anything. It is interesting that, although Mr. Ihland testified that a Mr. A. W. Lee notarized the deed, Mr. Lee was not called to corroborate the testimony regarding the execution of the deed, nor was any attempt at explanation made for the failure to call him. In light of the descrepancies between the testimony of the attorney and that of Mr. Ihland concerning the form of the deed, the parties who secured its execution, and the witnesses to its signing, we find that the existence of the deed has not been proved by evidence that is clear and convincing and accordingly hold that Mr. Ihland has failed in his burden of proving title through a lost deed. The trial court made no determination of Mr. Ihland's contention that Mr. Tostenson was barred from asserting his title by the statute of limitations, and we need not discuss this contention in detail, as it is obvious that Mr. Ihland has failed to prove that he adversely possessed the real estate for ten years under color of title, as is required under § 47-06-03, N.D.C.C., or that he adversely possessed the land under claim of title for twenty years under §§ 28-01-04, 28-01-05, and 28-01-07. This conclusion appears clearly from the fact that Mr. Ihland claims to have taken possession of the property in April 1946, whereas this action to quiet title was initiated by Mr. Tostenson in September 1964, leaving less than twenty years of adverse possession. There being no written document constituting color of title, Mr. Ihland has failed to establish his claim under the ten-year statute of limitations. *118 In view of the determinations made herein on the various issues presented, we conclude that the judgment, as it affects Mr. Thomas Tostenson, must be reversed, and accordingly we remand the case to the trial court with instructions to order judgment quieting title in Mr. Thomas Tostenson to an undivided 1/8 interest in the real estate described in his complaint, subject, as is Mr. Ihland's 7/8 interest, to the mortgage of the defendant August L. Johnson. Having so concluded, it is not necessary for us to discuss the propriety of the costs which were assessed by the trial court against Mr. Tostenson and the other plaintiffs in the sum of $61.40 for mileage to Menominee, Wisconsin, to take the deposition of the plaintiff Olga Wold. As Mr. Thomas Tostenson is the prevailing party on this appeal, those costs cannot be assessed against him. TEIGEN, C. J., and MURRAY, STRUTZ and KNUDSON, JJ., concur.