No. 13380 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1977 

KENNETH F. JOHNSON, 

Plaintiff and Appellant, 

HOWARD R. JOHNSON and 

CARRIE M. JOHNSON, 

Defendants and Respondents. 

Appeal from: District Court of the Fifteenth Judicial 

District 

Honorable L. C. Gulbrandson, Judge presiding 

Counsel of Record: 

For Appellants: 

Habedank, Cumming and Best, Sidney, Montana 

Otto T. Habedank argued, Sidney, Montana 

For Respondents: 

John M. McCarvel argued, Great Falls, Montana 

Submitted: January 14, 1977 

Filed: BAR 5 6 1gq 
Mr. Justice Frank I. Haswell delivered the Opinion of the 

Court. 

Plaintiff filed an action against his brother and his 

brother's wife seeking (1) a reconveyance of a half section of 

farmland to him, (2) to quiet title to the land, and (3) an 

accounting of crop proceeds. The district court of Sheridan 

County, the Honorable L. C, Gulbrandson, district judge, presiding, 

granted summary judgment to defendants. Plaintiff appeals. 

Plaintiff's complaint in essence alleges a conveyance 

by him to his brother in 1953 by warranty deed absolute on its 

face; that the deed was given without consideration and upon an 

express oral agreement to reconvey; and a request for and refusal 

to reconvey on October 2, 1974; The complaint seeks to impress 

a trust on the land and compel a reconveyance to plaintiff. 

~efendants' answer in substance denies the existence of an 

oral agreement to reconvey or any trust in the land and sets 

up the following affirmative defenses: (1) Laches, (2) estoppel, 

(3) statute of limitations, (4) waiver, (5) statute of frauds, 

and (6) adverse possession. 

Pretrial discovery consisted of interrogatories by defendants 

and answers by plaintiff, depositions of plaintiff and both defendants, and documentary exhibits. Defendants moved for summary 

judgment which was granted by the district court, 

The single issue on appeal is whether summary judgment was 

proper. 

The record before the district court disclosed that John 

P. Johnson, father of plaintiff Kenneth Johnson and defendant 

Howard Johnson, owned a farm in Sheridan County, Montana. In 
$22 December -f 2, the father and his wife deeded a half section 

of the farmland to Kenneth and another half section to Howard. 

At that time Kenneth was a single man with the United States 

Air Force in California. 

In May 1953, the father traveled to California to secure 

a conveyance from Kenneth of his half section of the farmland. 

Although a dispute exists concerning the reason for this, the 

record establishes it was for one or both of these reasons: 

(1) As an estate planning precaution should Kenneth lose his 

life in the Korean conflict, (2) for fear the land would be 

lost in potential legal action arising out of Kenneth's involvement with a married woman. According to the record, the 

original idea was for Kenneth to transfer the land to his 

married sister, Arlene Petersen, who lived in California. However, she indicated Howard would be better able to take care of 

the land as he was living on the farm. By deed dated May 12, 

1953, Kenneth conveyed the half section of land in question to 

Howard. This deed was absolute on its face and made no mention 

of a trust. On the face of the deed appeared $8.80 in federal 

documentary stamps indicating a consideration of $8,000 for the 

transfer. The documentary stamps were dated and initialed with 

Kenneth's initials. Kenneth denies receiving any money or 

consideration for the deed or transfer. 

Kenneth signed and filed a federal gift tax return 

covering the calendar year 1953. He stated in this return 

that the transfer was a gift, that the value of the Land at 

the time of transfer was $8,000 and that no trust was created. 

Kenneth was discharged from the military service and 

returned home to Sheridan County in December 1955. 
Thereafter Kenneth and Howard farmed the entire section of 

land. Kenneth, Howard and their father each received a share 

of the crops until the death of the father in November 1965. 

Following the father's death, Kenneth and Howard continued to 

farm the land with each receiving a share of the crop. The 

precise arrangement on sharing the crops, payment of taxes, and 

sharing of expenses is a subject of dispute in the record. 

Kenneth married in 1959. An exhibit to Howard's deposition 

is a letter from their father to Howard dated January 2, 1960, 

srating "Kenneth knows that he has not any title or right to any 

of the homestead or half sec. that I bought from Sparling" and 

that Kenneth told him it would not work "so he don't need to tell 

himself. or anyone that that 112 sec. is his1'. Kenneth denied 

knowledge% of this letter. In March 1965, conveyances were executed 

by Howard and his wife vesting the half section of land in 

question in themselves as joint tenants. The deeds creating the 

joint tenancy were recorded in the office of the clerk and 

recorder of Sheridan County on March 1, 1965. 

In 1968, Kenneth secured a loan from the Production Credit 

Association. In the loan application he was asked to list the 

land he owned. Kenneth admitted in his deposition that he did 

not list the half section in question. 

In 1971, Howard mortgaged some land to the Federal Land Bank 

for $56,000. Included in the mortgage was the half section of 

land in question. 

In 1973 and 1974, Kenneth delivered 113 of the crop to 

Howard pursuant either to an agreement between Howard and Kenneth 

or at Howard's request. 
During the years they farmed the section of land together 

Kenneth listed his income as a share of the crops sold. 

Kenneth's answers to defendants' interrogatories state 

there was an oral agreement by Howard to reconvey the land made 

at the farm in Sheridan County in December 1952,and in San 

Mateo, California in May 1953; that he has no writing substantiating this; that the witnesses to the oral agreement were 

himself, Howard, their father, and their sister, Arlene Petersen; 

that he deeded the property over to Howard at the request of 

his father and sister, Arlene Petersen; that he did not request 

recovery prior to October 2, 1974, because he had no reason to 

believe Howard was holding the land other than as a trustee prior 

to that time; that he in effect paid taxes on his half section 

by dividing the crops equally because his half section had 

more farmland than'-Howard's half section and Howard received 

the use of feed grown to offset the payment of taxes. 

Kenneth's deposition reflects similar testimony in considerably more detail. Additionally, it indicates that on 

June 30, 1964, he went with Howard to Ludwig Tande's office in 

Plentywood, Montana, and signed an affidavit that he was single 

when he deeded the half section to Howard to enable Howard to 

mortgage the land in question. 

No deposition was taken of Arlene Petersen, their sister. 

The basis of the summary judgment granted defendants as 

reflected in the district court's order was: (1) There was no 

genuine issue as to any material fact; (2) Kenneth was guilty 

of laches; (3) he is estopped to allege ownership in the land; 

(4) his action is barred by the statute of limitations; and (5) 

he has waived any right, title or interest in the land. 
The law relating to summary judgments, Rule 56, M.R.Civ.P., 

has been construed in detail in a long line of Montana cases and 

recently was substantially summarized in Harland v. Anderson, 

Mont . , 548 P.2d 613, 615, 33 St.Rep. 363,365. In 

essence summary judgment is not a substitute for a trial; it can 

only be granted where the record discloses no genuine issue of 

material fact and the moving party is entitled to judgment as 

a matter of law; and where the absence of any genuine issue of 

material fact is disclosed by the record, the burden is on the 

party opposing summary judgment to come forward with evidence 

creating a genuine issue of material fact to be determined at 

trial. In Harland the Court said: 

"The primary policy and general purpose underlying 

Rule 56, M.R.Civ,P., is to encourage judicial economy 

through the prompt elimination of questions not 

deserving of resolution by trial." 

With these principles in mind, we direct our attention to 

the defense of laches which is one basis on which the district 

court granted summary judgment to defendants. 

The doctrine of laches was set forth at some length in 

Riley v. Blacker, 51Mont. 364, 370, 371, 152 P. 758, applied 

in Hynes v. Silver Prince Mining Co., 86 Mont. 10, 281 P. 548 

and Montgomery v. Bank of Dillon, 114 Mont. 395, 136 P.2d 760; 

and cited in Davis v-Steingruber, 131 Mont. 468, 311 P.2d 784: 

"Laches, considered as a bar independent of the 

state of limitations, is a concept of equity; 

it means negligence in the assertion of a right; 

it is the practical application of the maxim, ' ~quity 

aids only the vigilant'; and it exists when there 

has been unexplained delay of such duration or character 

as to render the enforcement of the asserted right 

inequitable. Therefore has it often been held by this 

court that: While a mere delay short of the period of 

the statute of limitations does not of itself raise the 

presumption of laches [citing cases] yet 'good faith and 
reasonable diligence only can call into activity 

the powers of a court of equity, and, independently 

of the period fixed by the statute of limitations, 

stale demands will not be entertained or relief 

granted to one who has slept upon his rights. Consideration of public policy and the difficulty of 

doing justice between the parties are sufficient to 

warrant a court of equity in refusing to institute an 

investigation where the lapse of time in the assertion 

of the claim is such as to show inexcusable neglect 

on the part of the plaintiff, no matter how apparently 

just his claim may be; and this is particularly so 

where the relations of the parties have been materially 

altered in the meantime.' [Citing cases] What constitutes a material change of condition has been the subject 

of much judicial discussion and some judicial dissention; 

but whatever doubt there may be as to other circumstances, it never has been questioned, to our knowledge, 

that the death of one of the parties to the transaction 

is such a change. 'A specific application of the general 

rule just stated is in the refusal of the courts to 

afford relief to one who has lain idly by until the 

important witnesses to the transaction involved have 

died.* * *I1' 

In this case there is a genuine issue of material fact 

concerning the existence of an involuntary trust by operation 

of law in 1953, at the time the half section of land was deeded 

by Kenneth to Howard. The record is sufficient to establish 

a factual issue as to whether the transfer was without consideration (resulting trust) or a transfer based on an oral 

agreement to reconvey (constructive trust). 

Therefore we must assume, arguendo, that the half section 

of land was impressed with a trust in favor of Kenneth by 

operation of law in 1953. Thereafter the record shows, without 

contradiction, the following facts actually known by Kenneth or 

of which he is chargeable with knowledge: 

1. The deed of the half section of land from 

Kenneth to Howard, in 1953, was absolute on its face, indicated 

a consideration of $8,000 by federal documentary stamps on its 

face and was recorded in May 1953. 
2. Kenneth filed a federal gift tax return in 1954 

covering the 1953 transfer in which he stated under penalties of 

perjury that the transfer was a gift to Howard and that no 

trust was created in 1953. 

3. In June 1964, Kenneth executed an affidavit that he 

was a single man at the time of the 1953 deed to enable Howard 

to mortgage the land in question. 

4. In March 1965, the alleged trustee, Howard, executed 

and recorded conveyances vesting the land in question in Howard 

and his wife as joint tenants. 

5. In November 1965, the father died. 

6. In 1968, Kenneth applied for a loan in which he was asked 

to list the land he owned and he did not list the land in question. 

7. In 1973 and 1974, Kenneth delivered 113 of the crop to 

Howard. Additionally, Kenneth stated in his answers to interrogatories and in his deposition that the first time he asked Howard 

to reconvey the land back to him was on October 2, 1974, because 

he had no reason to believe Howard was holding the land other 

than as trustee and would refuse to reconvey. 

We hold that under these circumstances laches is established 

as a matter of law. Kenneth's is a stale claim based on a 

transaction that occurred more than 21 years prior to his first 

request for reconveyance and more than 23 years before suit was 

filed. There was a material change in circumstances by reason 

of the father's death some 9 years prior to Kenneth's first 

request for reconveyance and more than 11 years before suit was 

filed. The alleged trustee, Howard, was in the process of 

mortgaging the property in June 1964, a fact known to Kenneth. 
The alleged trustee, Howard, placed the property in joint 

tenancy with his wife in March 1965, and recorded the conveyances, all in derogation of the powers and duties of a trustee. 

Kenneth cites Opp v. Boggs, 121 Mont. 131, 193 P.2d 379, 

for the rule that the statute of limitations does not begin 

to run with respect to a constructive trust until refusal' by 

the trustee to carry out the trust by reconveyance. However, 

laches, unlike the statute of limitations, begbns.: to run when 

the trust is created by operation of law. The rule is stated 

r~ in this language in 76 Am Jur 2d, Trusts, 5597, p. 804: 

"Laches constitutes a defense to a suit to declare 

and enforce a constructive trust; and for the 

purpose of the rule, repudiation of the constructive 

trust is not required, and time runs from the moment 

that the law creates the trust, which is the time 

the cause of action arises." 

See also: Stianson v. Stianson, 40 S.D. 322, 167 N.W. 237, 

6 A.L.R. 280. 

Here, Kenneth has slept on the claim he now seeks to 

enforce for over 23 years. A material witness to the transaction 

died more than 10 years prior to suit. The alleged trustee 

committed an act in derogation of the trust some 12 years prior 

to suit, viz. mortgaging the property. The alleged trustee 

committed another act in derogation of the alleged trust more 

than 11 years prior to suit of which Kenneth is chargeable with 

knowledge, Qiz. placing the property in joint tenancy with his 

wife. Laches is established as a matter of law, justice cannot 

now be accomplished because of the lapse of time and the material 

change in the circumstances, and equity will not intercede 23 

years later to aid Kenneth in establishing a claim he has failed 

to assert for over 20 years. 
As Kenneth's claim is barred by laches as a matter of 

Law under the undisputed facts set forth above, no useful 

purpose would be served by discussing the additional grounds 

on which the district court predicated its summary judgment. 

The summary judgment is affirmed. 

Justice 

We Concur: 

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