Title: Keen v. Larson

State: north-dakota

Issuer: North Dakota Supreme Court

Document:

132 N.W.2d 350 (1964) Viola KEEN, Plaintiff and Appellant, v. William G. LARSON, as administrator of the estate of Nick Sekulich, deceased, and State of North Dakota, Defendants and Respondents. No. 8176. Supreme Court of North Dakota. December 30, 1964. *351 Duffy & Haugland, Devils Lake, for appellant. Paul L. Agneberg, Cando, for respondent William G. Larson. Helgi Johanneson, Atty. Gen., and Vance K. Hill, Asst. Atty. Gen., Bismarck, for respondent State of North Dakota. TEIGEN, Judge. The plaintiff has appealed from a judgment of dismissal in an action for specific performance of an agreement to leave property to her at the death of her stepfather, Nick Sekulich. The action was brought against the administrator of his estate and the State of North Dakota. Nick Sekulich died intestate leaving no heirs at law and, therefore, the residue of his estate is subject to escheat to the State of North Dakota. The action is resisted by the State. Trial de novo has been demanded. The plaintiff was born in Missouri in 1906. She moved with her parents to Rock Lake, North Dakota, in 1912. Her father died in 1913. She was then 7 years of age. The plaintiff's mother married Nick Sekulich on October 6, 1915. He moved into the home in which the plaintiff and her mother resided. No children were born the issue of this marriage. The evidence establishes that Nick Sekulich had no property. The plaintiff's mother financed the purchase of a pool hall business which they operated for about one year. He then worked at odd jobs for approximately two years. Thereafter the mother and stepfather rented a farm and commenced farming. The plaintiff's mother purchased the necessary farm tools, equipment, and livestock to operate the farm. The plaintiff remained in the home until she married in December of 1920. In 1943 the plaintiff's mother and her stepfather, Nick Sekulich, purchased two quarter sections of farm land on a contract for deed for the sum of $4,000. The sum of $500 was paid down on the contract and the balance was payable in nine annual installments of $300 each, and a tenth annual installment of $800, together with interest at the rate of 5% per annum. The contract names the plaintiff's mother and her husband, Nick Sekulich, as joint tenant purchasers. The land is the principal asset in the estate. It was appraised at $13,000. The plaintiff's mother died in 1949. Her stepfather continued to operate the farm until February of 1951 when he was committed to the State Hospital for the mentally ill. Except for brief visits, he remained in the hospital until his death. A guardian was appointed for his estate. He died intestate on November 18, 1960, and left no surviving heirs or next of kin. The plaintiff pleads and contends that following the death of her mother in October of 1949, her stepfather, Nick Sekulich, promised and agreed with her that, if she made no claim to her mother's interest in the property and permitted him to use and occupy it as long as he lived, he would leave it all to her upon his death. Therefore, she made no demand upon him during his lifetime *352 for a share of her mother's estate. There was no probate of the plaintiff's mother's estate. It appears the land contract was paid up and we assume the deed was secured in the name of Nick Sekulich, whose estate is now in the process of probate. This action is brought against the administrator for specific performance of the agreement which the plaintiff contends was entered into between herself and the said Nick Sekulich that she should receive all of his property upon his death. The defendants answered separately denying the agreement and affirmatively alleging that the oral contract falls within the statute of frauds. The case was tried to the court without a jury. The trial court found for the defendants and dismissed the action. The trial court in its memorandum opinion stated: However, the trial court determined that the proof was not sufficient to establish the rendition of a valuable or adequate consideration or that such proof established that the oral contract relied upon was fair and just and, therefore, the plaintiff had failed to bring the alleged contract within the prerequisites for equitable relief. We agree with the trial court that the evidence does establish an agreement. The plaintiff testified: The plaintiff's son testified: On cross-examination he testified: On recross-examination, he testified: The plaintiff's husband testified on direct examination as follows: Mr. Al Fosaaen, an attorney, testified that Nick Sekulich called at his office in 1950 at which time he acted as his legal advisor and, relative to this matter, testified as follows: On cross-examination, he testified: On recross-examination, he testified in part as follows: We find the evidence ample to sustain the trial court's finding that there was an agreement entered into following the plaintiff's mother's death between herself and the deceased, Nick Sekulich, to the effect that, if the plaintiff would forbear a demand upon him for her mother's interest in the property and permit him to possess it during his lifetime, the plaintiff would receive the entire estate upon his death. The plaintiff testified that her mother's money was used to acquire the property. In this she is corroborated by a neighbor who had known the plaintiff's mother since 1912 and her stepfather since before 1910. The neighbor testified to a conversation with the deceased, Nick Sekulich, at the time when he and his wife purchased the farm, as follows: On cross-examination, she testified: The evidence establishes the deceased, Nick Sekulich, was fond of the plaintiff. On occasion he would introduce her by using such endearing words as: "This is my daughter, the best girl in the world." The evidence also establishes the plaintiff helped her stepfather in various ways and that, subsequent to the death of the plaintiff's mother and until Nick Sekulich was committed to the State Hospital, the relationship between the two continued to be amicable. The plaintiff's stepfather often called at her home in Cando and had meals there. The only probative value this evidence has is to cast light on the probabilities of the agreement. We find the evidence of friendly relationship, together with the other evidence alluded to herein, establishes the agreement was not contrary to reasonable probabilities. The defendants also urge the agreement, if any, is void as it transcends the statute of frauds, because it was not in writing. Section 9-06-04(4), N.D.C.C. This argument has no merit as there was performance sufficient to take the transaction out of the statute. The plaintiff had fully performed her part of the agreement. She did not press a claim for her interest in her mother's estate. Nick Sekulich accepted the benefits. He remained on the land, operated it, and received the earnings from it until he was committed to the mental hospital. Thereafter a guardian was appointed for his estate and the land was farmed under the jurisdiction of the probate court for the benefit of his estate until his death. We find this was sufficient performance of the oral agreement to remove it from the operation of the statute of frauds. O'Connor v. Immele, 77 N.D. 346, 43 N.W.2d 649; Hagen v. Schluchter (N.D.), 126 N.W.2d 899. The defendants further argue there was a failure of consideration in that performance by the plaintiff could only be termed "failure to do anything." They argue that a failure to contest a part of almost nothing would not be sufficient consideration for the property. They also argue that the land at that time was purchased in joint tenancy; that the personal *356 property consisted of the furnishings of the dwelling and some old farm equipment which was listed in the inventory as scrap; and that if the plaintiff had instituted such action at the time she would not have been successful. The contract was fully performed by the plaintiff and we believe there was adequate consideration for the agreement. The plaintiff's mother financed Nick Sekulich in getting started; he had nothing. The plaintiff's mother financed the pool hall business. She purchased the livestock, farm machinery, and tools when they started farming, and she also furnished the money for the downpayment on the purchase of the land. It appears Nick Sekulich rented the land in question before it was purchased in 1943. An exhibit indicates that in 1941 Mr. Sekulich was delinquent on some notes due his landlord and was threatened with termination of the rental agreement unless he made payment. The record does not establish whether or not he paid. The evidence that plaintiff's mother furnished these moneys is not rebutted and apparently the plaintiff's mother thought she had an interest in the property. While she was on her death bed, she requested that the property be divided equally between the daughter and her husband. It is also apparent from the evidence that Mr. Sekulich thought she had an interest. It appears he thought she would move him off the property and he made the agreement on the consideration that plaintiff would permit him to occupy it as long as he lived. The evidence negatives any intention by the mother to make a gift to her husband. The evidence also establishes that Mr. Sekulich attempted to carry out the agreement when he contacted Mr. Fosaaen, his attorney, and was told that upon his death his property would go to the plaintiff under the laws of intestacy and without a will. The evidence tends to negate the proposition that taking the contract for deed as joint tenants with the right of survivorship and not as tenants in common established a contract that the survivor should take all. We believe the evidence establishes that the plaintiff had a cause of action on the theory that an implied trust was created presumptively by operation of law (Section 59-01-05, N.D.C.C.) when the transfer of real property was made to Nick Sekulich and the consideration therefor was paid by his wife under Section 59-01-06(4), N.D.C.C., although such presumption might be rebutted by competent evidence. Redman v. Biewer, 78 N.D. 120, 48 N.W.2d 372. It was not rebutted. There is no statutory presumption of gift where a wife furnishes the consideration for a transfer of real property taken in the names of the husband and wife as joint tenants in this State and the historic common law rule does not apply. Section 1-02-01, N.D.C.C. Our Constitution provides that the property of any woman in this State acquired before or after marriage shall be her separate property and she is not liable for the debts of her husband. Section 213, Constitution of North Dakota. The evidence establishes that the agreement was based on a forbearance to bring suit for the enforcement of a claimed legal right. This constitutes consideration to support a promise to leave all of the property in question to the plaintiff upon his death. 57 Am.Jur., Wills, Sec. 172; Frieders v. Frieders' Estate, 180 Wis. 430, 193 N.W. 77, 31 A.L.R. 118; Murtha v. Donohoo, 149 Wis. 481, 134 N.W. 406, 136 N.W. 158, 41 L.R.A.,N.S., 246; Ashbauth v. Davis, 71 Idaho 150, 227 P.2d 954, 32 A.L.R. 2d 361. Refraining from bringing a suit may be sufficient consideration. See 17 C.J.S. Contracts § 104(1). *357 Refraining from enforcing a claim which might reasonably be thought to be doubtful is a sufficient consideration. See 17 C.J.S. Contracts § 104(2). Nick Sekulich had no children. In fact, he had no heirs to succeed to his estate under the laws of succession. He was an immigrant who had no formal education in this country. Under the circumstances, as they existed in this case, we find there was sufficient consideration for the agreement, that it was not contrary to reasonable probabilities, and that it was not inequitable to third persons. For these reasons, we believe, the plaintiff had a bona fide claim against Nick Sekulich for at least a substantial interest in the property. We need not determine whether she would have prevailed had an action been commenced and tried. The evidence is sufficient to establish that both persons had reasonable grounds for believing the plaintiff had a bona fide claim and that both parties acted in good faith. A compromise of a bona fide controversy constitutes a good consideration for a promise. McGlynn v. Scott, 4 N.D. 18, 58 N.W. 460; Fryar v. Cetnor, 6 N.D. 518, 72 N.W. 909; Silander v. Gronna, 15 N.D. 552, 108 N.W. 544. A legal detriment may be sustained by a promisee by the surrender of a legal right, whether such right has substantial value or not. Divide County v. Citizens State Bank, 52 N.D. 29, 201 N.W. 693. Judgment is reversed. MORRIS, C. J., BURKE and ERICSTAD, JJ., and EUGENE BURDICK, D. J., concur. STRUTZ, J., did not participate; EUGENE BURDICK, D. J., sitting in his stead.