Case Name: KANE et al. v. KANE et al.
Court: Oregon Supreme Court
Jurisdiction: Oregon
Decision Date: 1930-09-16
Citations: 134 Or. 79
Docket Number: 
Parties: KANE et al. v. KANE et al.
Judges: Bean and Brown, JJ., concur.
Reporter: Oregon Reports
Volume: 134
Pages: 79–118

Head Matter:
Argued November 22, 1929; reargued March 18;
affirmed September 16;
rehearing denied October 14, 1930
KANE et al. v. KANE et al.
(291 P. 785)
Stephen W. Matthieu of Portland (John F. Logan, Frank J. Lonergan, both of Portland, on the brief) for appellants.
James J. Crossley and V. A. G. Ahlf, both of Portland, for respondent.

Opinion:
COSHOW, C. J.
The deed executed by plaintiffs to convey the real property involved to defendant Frank P. Kane was sufficient to convey all of the right, title and interest of the grantors in said deed in and to the real property described therein: Or. L., § 9846. No question is raised about the sufficiency in the form or matter of the deed. Plaintiffs rely on an alleged express trust arrangement and the contention that said deed did not express the intention of the parties.
As a true statement of the position of plaintiffs with reference to the deed executed by them to their father, defendant Frank P. Kane, we quote from the testimony of Francis J. Kane:
"Q. Now, what was the circumstances under which this deed was signed? This is a copy of that deed from yourself—
"A. Well, the circumstances—
"Q. Well, look at it and see what it is.
"A. Well, this here was a deed in trust, a quitclaim deed here, which was signed on a Thanksgiving day. There was no consideration, no value received whatsoever. It was a deed in trust for him to have a home there, and when he didn't want a home — I took it there; the deed was handed to him; he was never supposed to record that deed.
"The Court: Tell what was said, not what you supposed. It speaks for itself. Tell us what was said. That is what you have been asked, Mr. Kane. I don't care anything about conclusions, you know.
"Q. (By Mr. Lonergan): State to the Court, Mr. Kane, what conversation there was between you and your father and the other children about that deed. That is all you have to tell.
"A. Well, we decided to take this deed and put this deed in trust for him, provided he would pay the taxes on that place, which he agreed to do on that day. After leaving there—
"Q. Well, state whether or not it was supposed to come back to the children?
"A. Absolutely; positively.
*
"Q. (By Mr. Lonergan): What was said between you and your father?
"A. Well, what was said there, 'If you take and keep it up, and pay the taxes,' as long as he made his home there, and when he didn't want a home it was to revert right back to those children. That is clear enough. ' '
There is considerable conflict in the details of the testimony on the part of the plaintiffs, but in one particular they agree and that particular is that defendant Frank P. Kane was to have the right to the land described in the deed for his use and benefit for life. In his cross-examination the witness Francis J. Kane testified that he told defendant Alice W. Kane that "this is a deed (referring to the quit-claim deed from plaintiffs to defendant Frank P. Kane) of trust." "I told her, I says, 'That property will go back,' I says, 'right to where it reverted from on that deed of trust,' I says, 'That is where it will go'." The witness stated this conversation occurred on the day his father and the said Alice W. Kane returned to their home immediately after their marriage. As stated above, I repeat that the quit-claim deed is an ordinary quit-claim deed without any limitations, qualifications or restrictions. The learned attorneys for plaintiffs state their position in their brief as follows:
"It was agreed that this deed should not be put on record and that Frank P. Kane should have no beneficial interest in the property, but that he should hold the unrecorded deed rather as evidence of permission and license that the plaintiffs had given him to use such interest as they might have in the property. ' '
The attorney who prepared the quit-claim deed represented the estate of the mother. All of the parties seem to recognize that the father had some interest in the property. There is no pretense whatever that any undue influence or persuasion was used by him to procure the deed. Plaintiffs claim their father expressed a fear that some of his children might sell their interest and jeopardize his possession. To prevent that they executed and delivered the deed. They claim to have executed the deed so as to secure to their father a home for life or as long as he wanted it for a home. There is no evidence of a trust, but rather a desire to convey a life estate. It would have been a very simple transaction to have prepared a lease or other document to effect an intention to pass a life estate. The attorney testified that he drew just what he was asked to draw in the way of a conveyance. One or more of the plaintiffs requested the attorney to draw the deed.
After the deed was executed and certified, plaintiff Francis J. Kane took the deed and delivered it to his father, defendant Frank P. Kane. Thus, we have a deed executed, acknowledged, certified and delivered voluntarily by the plaintiffs. That deed was sufficient to convey, and did convey, all the interest that the grantors therein named owned in and to the property therein described. The title thus conveyed can not be questioned by oral testimony of the intent of the parties. They testify among other things that defendant Frank P. Kane agreed not to put the deed on record. The deed was not put on record until after the marriage. But that can make no difference in passing the title. The deed was delivered, fully executed and the title passed with its delivery: Moore v. Thomas, 1 Or. 201; Bliss v. Miller, 119 Or. 573, 581 (250 P. 218, 763). Defendant Frank P. Kane was in possession and his ownership of the property was thereby protected. He had the written evidence of his ownership and the physical possession of the property. These two evince his ownership and make his title complete: Or. L., §712, 713; Ambrose v. Huntington, 34 Or. 484, 488 (56 P. 513).
The only consideration expressed in the quit-claim deed is one dollar. The witnesses in behalf of plaintiffs testified that no consideration was paid. They testified that defendant Frank P. Kane agreed to keep the taxes paid and maintain the property in good repair. Plaintiffs will not be heard, however, to dispute the recital of consideration, so as to vitiate their deed: Or. L., §798, subd. 3; Marks v. Twohy Bros. Co., 98 Or. 514, 528 (194 P. 675). Plaintiffs will not be heard to con trovert the hahendum in their deed: Or. L., §798, subd. 3; Lange v. Allen, 120 Or. 96, 103 (251 P. 715).
The deed from plaintiffs to defendant Frank P. Kane is not ambiguous. Plaintiffs do not claim that the deed was procured by fraud. No pretense is made that any mistake entered into the preparation, execution or delivery of the deed. The deed was prepared after the discussions between defendant Frank P. Kane and plaintiffs. Whatever agreement or understanding was entered into merged in the deed when it was executed. It is elementary law that the deed represented the intention of the parties and that all prior discussion merged in the deed when it was executed and delivered.
"When the terms of an agreement have been reduced to writing by the parties, it is to be considered as containing all those terms, and therefore there can be, between the parties and their representatives or successors in interest, no evidence of the terms of the agreement, other than the contents of the writing, except in the following cases": Or. L., § 713.
Then follows two exceptions, neither of which is applicable to the ease at bar: Sutherlin v. Bloomer, 50 Or. 398, 406 (93 P. 135); Lange v. Allen, above; Jaloff v. United Auto Indemnity Exchange, 120 Or. 381, 387-8 (250 P. 717); Thomson v. Silsby, 120 Or. 501, 506-7 (252 P. 712). See Hyland v. Oregon Agricultural Co., 111 Or. 212, 217 (225 P. 728), in which Mr. Justice Band used the following language:
"It is a substantive rule of law that as between the original parties to a contract and their privies, in the absence of fraud, mistake in fact or illegality in the subject-matter of the contract, where the parties have entered into a contract which is complete in itself and which has been reduced to writing, it is 'conclusively presumed that the whole engagement of the parties, and the extent and manner of their under taking, was reduced to writing'; and that parol evidence, that is, evidence extrinsic to the writing itself, is inadmissible for the purpose of adding to, subtracting from, altering, varying or contradicting the terms of the written contract or to control its legal operation or effect, and that all oral negotiations or stipulations between the parties preceding or accompanying the execution of the written contract are regarded as merged in it." (Large number of authorities cited.)
The evidence of the oral agreement was properly and timely objected to. There was, then, no legal evidence before the court of any agreement that the defendant Frank P. Kane held title to the land in controversy as trustee.
Plaintiffs rely on De Vol v. Citizens' Banh, 92 Or. 606 (179 P. 282; 181 P. 985). That case differs from the instant case in this, the trustee in the De Vol case executed the alleged trust while she held the title. The learned justice writing the opinion expressed the principle thus:
a The transaction between Mary De Vol and her brother, became in the nature of an executed trust. She held the property subject to his use and disposition, and upon his order and request, she signed the deed to Whitmer in full recognition of the parol trust. Under such circumstances, and when the trust has been so acknowledged and executed, the reason for the rule against admitting parol evidence fails, and when the reason fails the rule fails with it." Citing 1 Perry on Trusts (6th Ed.), §82; Beach on Trusts, §39.
In Chance v. Weston, 96 Or. 390, 395 (190 P. 155), this court, speaking through Mr. Justice Bean, stated the ruling principle thus:
' ' The power, if any, given to the defendant bank to convey the real estate to the three daughters was given by parol, and was void under the statute of frauds. The deed executed by the bank to three of the defendants after the death of Laura I. Chance was executed without authority. A trust in real estate can not be created by parol: De Vol v. Citizens' Bank, 92 Or. 606 (179 P. 282, 181 P. 985)." Citing other authorities.
Plaintiffs also rely on Templeton v. Hollinshead, 119 Or. 620, 624 (250 P. 747), and the quotation therefrom from 3 Pomeroy's Equity Jurisprudence (4th Ed.), § 1053. This case and the citation has reference to constructive trusts. Plaintiffs rely on an express trust. The quotation from 3 Pomeroy's Equity Jurisprudence is not apt nor pertinent. This is the language there expressed:
"In general, whenever the legal right to property, real or personal, has been obtained through actual fraud, misrepresentations, concealments, or through undue influence, duress, taking advantage of one's weakness or necessities, or through any other similar means or under any other similar circumstances which render it unconscientious for the holder of the legal title to retain and enjoy the beneficial interest, equity impresses a constructive trust on the property thus acquired in favor of the one who is truly and equitably entitled to the same
In the instant case there is no pretense that any of the unfair methods stated in the excerpt from Pomeroy's Equity Jurisprudence were employed or used. This court said in Metzger v. Guynup, 125 Or. 507, 513 (265 P. 420) :
"The law is well settled that one who procures the execution of a deed by misrepresentation with intent to deceive and defraud a person will be held a trustee ex maleficio."
If the instant case disclosed that the defendant Prank P. Kane procured the deed by misrepresentations there would be no trouble in annulling the deed from plaintiffs to defendant. Bnt there is no evidence or indication of any deceit, any fraud or any misrepresentations having been used by defendant Prank P. Kane on plaintiffs, inducing them to make the transfer. Hence, there is no place for testimony concerning an oral contract or oral understanding between them prior to the execution of the deed.
Other jurisdictions support this opinion: Price v. Brown, 4 S. C. 144, 151; Waters v. Hall, 218 App. Div. 149 (218 N. Y. S. 31); Straw v. Mower, 99 Vt. 56 (130 Atl. 687); Smith v. Howell, 3 Stockton's Reports (11 N. J. Eq.) 349, 359; Cain v. Cox, 23 W. Va. 594, 604; 1 Perry on Trusts and Trustees (6th Ed.), 68-71, § 76; Goff v. Goff, 98 Kan. 201, 204 (156 P. 26); Thomas v. Robbert, 123 Misc. Rep. 76 (204 N. Y. S. 217, 218).
Every case referred to by plaintiffs, or others, intending to support plaintiffs' contentions where a parol agreement of a trust has been enforced has been based on fraud or mistake, part performance or the execution of the alleged trust by the trustee, or a declaration of trust executed voluntarily by the alleged trustee while he held the legal title. It is claimed that defendant Prank P. Kane executed what is equivalent to a declaration of trust. The only instrument of that kind is a warranty deed executed by him two years after he had conveyed his interest to his then wife. A declaration of trust or other instrument or an attempt to execute a trust must be performed while the trustee has title to the property. A case cited as in support of the alleged trust in the instant case is Bicocchi v. Gasey-Swasey Co., 91 Tex. 259 (42 S. W. 963, 66 Am. St. Rep. 875). An examination of the last case cited clearly discloses that the parties seeking to establish a trust relied on fraud. Among other things the court said in page 881, which states the principle of law upon which I am relying as follows:
"We conclude that the correct rule, and that which is supported by authority and sound reasoning, is that, when the fraudulent grantee has, in compliance with his verbal agreement, made a reconveyance of the property to the fraudulent grantor, the moral obligation under which he placed himself to make this reconveyance is a valuable and sufficient consideration to support the deed of reconveyance. While the legal title to the property remained in Maesa, his creditors might have subjected it to the payment of their debts, and if they had taken proceedings by which they fixed a lien upon the property before the conveyance was made, their rights would be superior to those of Bicocchi, but, having failed to secure any right in the property itself before the conveyance was made, they can not now reach it in the hands of Bicocchi, because his right to have the property reeonveyed was equally binding as were the rights of the creditors of Mazza to have their debts paid; and Mazza having conveyed the property in satisfaction of a promise to do so, that conveyance must be held to be good against the debts of the defendants in error. ' '
The warranty deed is not a declaration of a trust, but an attempt to make a reconveyance. If plaintiffs' evidence proved a trust, defendant Frank P. Kane should not have executed a warranty deed. If Fra.uk P. Kane's title was encumbered with a trust he could not covenant against encumbrances, nor truthfully claim to be the absolute owner in fee. If plaintiffs' claim is true, their father had a life estate in the land. The life estate at least was conveyed to defendant Alice W. Kane, for that deed conveyed all the interest Frank P. Kane had in the land. If the. deed from plaintiffs to Frank P. Kane should be annulled, Frank P. Kane would own his curtesy in the land which would pass to Alice W. Kane by the deed in her favor. That life estate constituted an encumbrance. The warranty deed is a direct denial of a trust estate. The recitals in the warranty deed preclude defendant Frank P. Kane from claiming that his title to the land was conditional, encumbered or in any way differed from the recitals, including the covenants of ownership and against encumbrances in the deed. If defendant Frank P. Kane promised not to record his deed and broke that promise, he did not thereby declare a trust. Breach of a parol agreement does not create a trust: 1 Perry on Trusts (6th Ed.), § 76. Those who seek equity must do equity. Plaintiffs concede they intended to grant a life estate to their father. Now they are asking the court in the prayer of their complaint "and that each and both of the defendants be declared to have no interest whatsoever in said property." That plaintiffs are not seeking to do equity appears from what follows:
It is claimed that the defendant Alice W. Kane had notice of the trust agreement. The evidence upon which they rely on that behalf is set out above. Since there was no trust agreement, there could not be notice of such. The lower court found the evidence indicated not a trust agreement but a life interest in so far as the evidence was admissible to prove anything. In that finding I concur. The letter hereinafter set out from the attorney does not give notice of trust. On the contrary, the purpose is that by reason of the marriage defendant Mrs. Kane would have some interest which would cause complications. She did have an inchoate dower interest.
Mr. Van Hoomissen writes "since the title stands in your name the law perhaps would cause complications to arise as to the rights of Mrs. Kane." That does not indicate that he was referring to a trust, nor is it any notice to Mrs. Kane that there was a trust agreement. It undoubtedly refers to the interest Mrs. Kane had in the property as the wife of defendant Prank P. Kane by operation of law.
The only evidence adduced by plaintiffs in support of their allegations of fraud is the fact that defendant Prank P. Kane executed and delivered the deed conveying said premises to his wife, the defendant Alice W. Kane, within a month after they were married to each other; and the testimony of defendant Prank P. Kane that he signed that deed without knowing what the instrument was, because he was told by her to sign the instrument and that said instrument was reconveying the property to his children, the plaintiffs. She disputes the testimony of defendant and denies that she was present when he executed the deed. She adduced testimony of several witnesses who testified that defendant Prank P. Kane stated that he had deeded the property to his wife, the defendant Alice W. Kane. Mr. James J. Crossley, one of the attorneys for defendant Alice W. Kane, corroborates her to the extent that he prepared the deed at the request of the defendant Prank P. Kane; that his wife was not present when the deed was executed by said Kane; that he read the deed carefully to said Prank P. Kane and after having read it to him he assented to the deed as being according to his intentions. The stenographer in the office of the said Crossley also corroborated defendant Alice W. Kane to this extent that she was not present when Frank P. Kane executed the deed. The evidence is overwhelming that he deliberately executed the deed to Alice W. Kane. He acted very foolishly but that does not justify overturning the law.
Parties relying on fraud to void an instrument must prove their allegations of fraud. It is settled in this jurisdiction that fraud is never presumed. It is significant in the light of the evidence of some three disinterested witnesses to the effect that defendant Frank P. Kane soon after delivering the deed had told them he had conveyed the premises to his wife, defendant Alice W. Kane, and to one or more of them stated his reason for his act. We can not believe his testimony that he did not know what he was signing when he signed the deed, or that he thought he was conveying the land to plaintiffs.
Among other things they caused their attorney Mr. Van Hoomissen to write the following letter to the defendant Frank P. Kane:
"Joseph Van Hoomissen Attorney-at-Law 301-3 Dekum Building Portland, Oregon Office Phone Broadway 6649
April 17,1925.
"Mr. Frank Kane 894 E. Caruthers St. Portland, Oregon.
"Dear Mr. Kane:
"The matter of your recent marriage in relation to the property which was left by Mrs. Elizabeth Kane to yourself and to your children has occasioned your children interviewing me as to rectifying the present status of the title of said estate, that is to say, since the title stands in your name the law perhaps would cause complications to arise as to the rights of Mrs'. Kane, which would be contrary to the understanding at the time the children conveyed their interest to you.
"In any event, Mr. Kane, I am in a position where the children sort of blame me for the present status and look to me for its adjustment, therefore, before I make any further decision I would greatly appreciate it if you would call at my office at your earliest opportunity and discuss this with me.
"Respectfully yours,
"Jas. Yan Hoomissen."
J. CH.EE
Its date shows the letter was written within two days after the marriage of the defendants to each other. According to the testimony of all of the plaintiffs in regard to their intention, that intention was to give to their father the possession and use of the real property during his lifetime, except that plaintiff Francis J. Kane said he was to have it for as long as he wanted it for a home. Plaintiffs demand in their complaint "that each and both of defendants be declared to have no interest whatsoever in said property."
Plaintiff Francis J. Kane was administrator of his mother's estate. Said property was the home of defendant Frank P. Kane and his deceased wife. It was their actual place of abode. Plaintiffs attempted to include the furniture in that home as having been delivered to their father under the alleged trust arrangement. We are not advised how much of said furniture was exempt. In all probability all the furniture belonged to defendant Frank P. Kane and his deceased wife during her lifetime and was exempt from execution. Under the law it was the duty of the probate court of Multnomah county to set the furniture aside to defendant Frank P. Kane as exempt property: Or. L., § 1234. It was the duty of plaintiff Francis J. Kane to have petitioned the court for an order to set aside the exempt property to the surviving husband, defendant Frank P. Kane.
The property in litigation constituted the statutory homestead. As the surviving spouse, defendant Frank P. Kane had his homestead interest and rights in the property: Or. L., § 221-225. As the surviving spouse he was also entitled to his curtesy interest in that property. All these interests seem to have been ignored by plaintiffs. There is no competent evidence in the record to support a trust.
I have been unable to find any evidence tending to prove that defendant Frank P. Kane promised his children, the plaintiffs, to hold the title in trust for them or to return the title to them. Plaintiffs testify only that there was an understanding that the property would revert to them. There were expressions that were indicative that plaintiffs held the opinion that the property would be theirs when their father got through with it. No one contemplated at that time that their father, the defendant Frank P. Kane, would remarry. If the father had died without remarrying, the property would have gone to the children. That was the understanding and was the true condition at the time the deed from plaintiffs conveying the property to their father was made, but there is no other evidence of any agreement to that effect.
It is further claimed that because the quit-claim deed from plaintiffs to defendant Frank P. Kane was not of record and was not to be put of record, as plaintiffs claim, therefore, the deed was held in trust. But that was not evidence of a trust agreement. The testimony of Mr. Van Hoomissen was to the effect that it was understood between them that the property belonged to plaintiffs all the time. If the deed was held without recordation, with the understanding that plaintiffs owned the property, then the natural thing for plaintiffs to have done when they learned their father was to be married would have been to go to him and demand the return of that deed. The return of the unrecorded deed would have resulted in destroying the evidence of a conveyance from plaintiffs to defendant Frank P. Kane. Plaintiffs did not take that course. The evidence in behalf of plaintiffs indicate that their intent to claim a trust or to nullify their own deed duly executed and delivered is an afterthought and an effort on their part to overcome the result of a careless manner of dealing with their property.
The position of plaintiffs can not be sustained without doing violence to the law in the following particulars:
First, it would be necessary to admit evidence to contradict the written agreement of the parties as expressed in the quit-claim deed: Or. L., §712, prohibits the admission of testimony to contradict a deed.
Second, it would be necessary to consider oral testimony to express the intention of the parties to the deed. When there is no ambiguity or uncertainty in the terms of a deed it is an elementary rule of law established, after the experience of centuries, that evidence to explain or prove the intention of the parties in a written document free from ambiguity is inadmissible. In a recent case, Miller v. Paul, 237 Ill. App. 166, the court expressed the principle in this language:
"Oral testimony was introduced in this case, by appellants, tending to vary and contradict the written terms and covenants of the notes and mortgage, over the objections of appellee. It is not necessary to cite cases adhering to the elementary rule that this can not be done unless such testimony is based upon some equity like fraud, accident or mistake, rendering the instrument defective or void. The law is that where there is no ambiguity in the terms used or where the language of the instrument has a settled meaning, the instrument itself is the only criterion of the intention of the parties and its construction can not be explained by oral evidence: Wilson v. Wilson, 268 Ill. 270, 109 N. E. 36."
Third, it would be necessary to admit testimony of the negotiations leading np to the execution and delivery of the deed contradicting the effect of the deed: Or. L., §713, prohibits that being done. All of the prior negotiations merged in the deed.
Fourth, it would be necessary to consider the testimony of Mr. Van Hoomissen to the effect that notwithstanding the deed of conveyance from plaintiffs to defendant Frank P. Kane it was not intended to convey land at all. Van Hoomissen testified that the property was considered to belong to plaintiffs all the time. In effect, that means that the plaintiffs "had their fingers crossed" when they conveyed the land to their father: Or. L., §715, 798, subd. 3, forbids such a construction of the deed. Plaintiffs are estopped by said sections from denying the effect of their own deed.
Fifth, it would be necessary to ignore the testimony of Van Hoomissen, who prepared the document, to the effect that he advised them that a quit-claim deed would necessitate administration of the estate when defendant Frank P. Kane died. Notwithstanding that advice and the effect of the deed plaintiffs executed and delivered the deed. The reason they assign for not recording the deed was to avoid the administration of the estate. The thought of a trust never entered the mind or thought of plaintiffs or defendant Frank P. Kane until they were preparing for the lawsuit.
Sixth, it would be necessary to hold, notwithstanding defendant Frank P. Kane had conveyed to his then wife the land involved in this suit, he could by executing a warranty deed in favor of plaintiffs thereby impress a trust on his own deed and that of his grantor. The warranty deed was executed when Frank P. Kane had no interest in the land other than his curtesy initiate. The warranty deed was an absolute nullity so far as Alice W. Kane is concerned. Its only effect would be to estop defendant Frank P. Kane from asserting his interest flowing from the divorce decree. That interest might pass to the grantees in said warranty deed.
Seventh, it is an elementary principle of law that litigants are bound by their pleadings. Plaintiffs pleaded an express trust. They undertake to establish an express trust by oral testimony. The law requires an express trust in real property to be proven by written testimony: Or. L., § 804.
Another consideration having some weight is this: The learned circuit judge who tried this case has an extensive experience both in the practice of law and in the decision of cases. He is known as an able judge, a just judge, who tries to decide the cases before him in accordance with principles of equity and justice. At the second argument of this case, we were informed that the same judge tried the case between the defendants for the annulment of their marriage. In the divorce case he granted the defendant Frank P. Kane the divorce. The two cases were pending at the same time. The learned trial judge had the witnesses before him and his decision, under the circumstances, should not be disturbed unless clearly contrary to the evidence and the law. He found the equities to be with the defendant Alice W. Kane and assessed the costs and disbursements against the plaintiffs.
The decree should be affirmed.
Bean and Brown, JJ., concur.