Case Name: Richtman and others, Respondents, vs. Watson, imp., Appellant
Court: Wisconsin Supreme Court
Jurisdiction: Wisconsin
Decision Date: 1912-10-08
Citations: 150 Wis. 385
Docket Number: 
Parties: Richtman and others, Respondents, vs. Watson, imp., Appellant
Judges: Timlot, J., dissents.
Reporter: Wisconsin Reports
Volume: 150
Pages: 385–400

Head Matter:
Richtman and others, Respondents, vs. Watson, imp., Appellant
May 17
October 8, 1912.
Partnership: Assets: Beal estate: Title taken ~by one partner: Resulting trusts: Implied, trusts: Breach of faith: Waiver: Accord and satisfaction: Parol evidence affecting writing: Charitable trusts: Definiteness. -,
1. Real estate, not suitable for a particular partnership business nor intended to be or ever is used therein, does not become assets of the firm in equity by mere verbal agreement of the owner, for a consideration, with his_ partners in such business that it shall be considered such.
2. The foregoing is because, “No estate or interest in lands, other than leases for a term not exceeding one year, nor any trust or power over or concerning lands or in any manner relating thereto shall be created, granted, assigned, surrendered or declared unless by act or operation of law or by deed or conveyance in writing, subscribed by the party creating, granting, assigning, surrendering or declaring the same or by his lawful agent thereunto authorized by writing.” Sec. 2302, Stats. (1898).
3. Real estate, purchased with partnership money, actually or constructively, for partnership purposes, belongs to the firm though the title be taken in the name of one partner with or without the consent of his associate.
4., If a person purchase land with money of a partnership given him to buy land for the members to hold as tenants in common, taking title in his own name by previous consent, or subsequent acquiescence, the partners cannot claim it on a resulting trust.
E. The rule above stated is because of the abrogation of resulting trusts. Sec. 2071, Stats. (1898).
6. If a person deposit money with another to buy land for such person or to hold upon a charitable trust for a class, and such other invests the money, taking title in form as owner, involving a breach of good faith, an implied trust is created in favor of such person or such class according to the facts.
7. In the circumstances last stated, if the purpose of the deposit is for the depositee to invest the money in property to be held for a class, and a breach of faith committed by not having the deed show the facts be waived by the depositor, that does not affect tbe title; as to him, in case oí the breach being against, tbe depositor it changes the implied trust into the common-law field of resulting trusts, leaving the depositor no remedy but to recover bach the money, because there is no implied trust, strictly so called, without breach of faith and no enforceable resulting trust.
8. Where two persons close an accord and satisfaction by a contractual receipt in writing, it cannot be varied, contradicted,, or explained by verbal evidence.
9. The rule as to trusts requiring definiteness of scheme and of beneficiaries who can enforce it, does not apply to charitable trusts.
10.In case of a trust for charity, individual beneficiaries may be uncertain and the particular object vague, the latter may be single or broad, only stopping something short of general charity. So the class may be great or small and there may be vagueness in many respects without jeopardizing the trust.
[Syllabus by Maksiiall, X]
Appeal from a judgment of the circuit court for Walworth county: Laweewoe W. Halsey, Judge.
Reversed.
Equitable action to establish title in plaintiffs to an undivided three-fourths interest in certain lands, charge defendants Wingfield Watson and Elizabeth White as trustees of such title for plaintiffs, and compel conveyance thereof to them.
The facts upon which plaintiffs grounded their claim are indicated in the epitome of the findings hereafter given.
Defendant Watson joined issue as to all allegations in the complaint which, if true, would support plaintiffs’ theory as to his holding title in trust for them, and pleaded this: The greater part of the purchase money of the lands in controversy was furnished by defendant Jacob Richtman, father of plaintiffs, under an agreement that it should be invested in land for the welfare of a religious sect, known as the Strangite Branch of the Church of the Latter Day Saints, particularly for any such as might be needy, and the lands have been, and so far as not disposed of are, held upon such trust. The title was, in form, taken in the name of said Watson with said Richtman’s consent at the time, or given immediately thereafter. Plaintiffs, after the purchase, became fully informed of the facts and acquiesced therein. Such situation was maintained for years after with approval of plaintiffs and defendant Iiichtman. The purchase was made without any knowledge that plaintiffs were interested as partners or otherwise in the money furnished therefor. Such money was received for the purpose for which it was used, and all acts in regard to the matter were performed without intent to deceive any one. It was not partnership money nor invested to hinder or delay creditors of defendant Richtman and plaintiffs as partners, nor was fraud intended or perpetrated on such creditors or plaintiffs; hut the sole purpose was to hold the title to the lands in trust as before indicated, in which purpose defendant Richtman joined -and plaintiffs acquiesced with knowledge of the facts. The deeds sought to be impeached were duly recorded soon after being made and the grantees therein immediately entered into possession of the premises and have ever since so remained, covering a period of more than ten years, adverse to any personal claim of plaintiffs, thus satisfying the statutes of this state as to title by adverse possession, particularly secs. 4211, 4212, 4214, and 4215 thereof. Eor more than thirteen years prior to commencement of this action plaintiffs knew of such possession and made no objection thereto.
The issues were thus closed: In the spring of 1895, at Sterling Island, state of Missouri, defendant Richtman and plaintiffs, his three sons, formed'a copartnership in constructing and operating steamboats and barges on the Mississippi river and its tributaries, taking and executing contracts for river improvements and in mercantile business, — they to be equally interested in all property put into such business and the firm to be responsible for all existing individual liabilities ; which property then consisted, in part, of a land contract interest owned by said defendant Richtman in agri ■cultural land, described in the complaint, located near Burlington, Wisconsin, called the “Webber” land, the title to which, pursuant to such contract, was, in June, 1895, conveyed to him, but never to the partnership or members thereof.
Such partnership' ended in 190’3, all accounts in the meantime being kept and funds handled by defendant Richtman, ■and all property used in the business, prior to such termination or soon thereafter, used in paying firm liabilities.
After the formation of the partnership and before purchase ■of the lands in controversy, it was agreed to invest the profits ■of the business in real estate in the vicinity of Burlington, Wisconsin, for the individual members, so that each might acquire, in his individual right, a farm, none of the land to be taken as partnership property or used in the partnership business, and the lands in controversy were purchased pursuant thereto.
Pursuant to such agreement partnership profits were deposited with defendant Watson and therewith he acquired the particular lands. He took title to the land purchased in his •own name and has since retained the same, except a portion deeded to his daughter.
Defendant Elizabeth White, without knowledge of her father’s actual interest in the land, took title and subsequently, without such knowledge, made valuable improvements on the land.
Watson contributed $2,000 in buying the land and the balance, $8,350, was made up of firm money deposited with him by-defendant Richtman pursuant to the agreement aforesaid.
Watson took the title without intent to claim the property in his own right, or prior authority from the copartners, or any of them, but as matter of convenience in dealing with the property, — not upon the trust claimed in the answer.
Prior to 1900 the partnership business was profitable; but it then became financially embarrassed and defendant Richt-man, without consideration, conveyed the land to Watson>. which, for eight years, he had theretofore occupied under a written lease from Richtman, paying rent therefor, and so continued till 1906, when the property was sold for $9,300,. he receiving the proceeds, and thereafter, March 14, 1907, paying members of the former partnership $3,000 for use in discharging its debts, and May 22, 1908, paying defendant Richtman $3,000 for the same purpose, using $1,000 to satisfy his alleged claim against such defendant for borrowed money, $2,000, to loan upon note and mortgage to said defendant and wife, $300 to deposit in bank, — the loan and deposit being in his name.
He has had the use of the land in controversy since March 1, 1907, and whatever consideration was paid by his daughter, but has kept up the taxes, though neither the amount received for such use nor such consideration, nor amount paid for taxes, appears from the evidence,
Prior to 1905, neither of plaintiffs knew of the status of the title to said land, and when they learned that Watson held the same they were informed by him and defendant Richt-man, and believed, that he so held for the use and benefit of the religious sect to which all parties belonged, known as the Strangite Branch of the Church of Jesus Christ of. the Latter Day Saints, and were not informed that the title was in his name, in form, as individual property until 1910.
He has not claimed and does not claim the title in his individual right, and did not assert, till December 22, 1900, to hold the same in trust as alleged in the' answer; but pretended to do so as matter of convenience in handling the property.
The trust upon which Watson claims the land has not been declared in writing, except by the answer herein, neither have the beneficiaries thereof been sufficiently indicated, nor any method for their ascertainment, nor its object been made sufficiently certain to enable a court of equity to enforce execution thereof, and it is too intangible and indefinite to be carried into execution.
Watson has not changed his position in respect to the land; relying on acts or conduct of plaintiffs in respect thereto.
Upon such facts these conclusions were reached: The action should be dismissed as to defendants White. The trust under which Watson claims the lands is void. He holds the legal title, so far as not parted with to his daughter Elizabeth, in trust for plaintiffs and defendant Jacob Richtman as tenants in common, subject to an equitable lien for $2,000 in his favor, less any amount realized from the property in excess of taxes and other charges which he has paid. The implied trust upon which he holds the title should be executed by appropriate conveyances, each interest to be subject to its proportionate share of the amount of Watson's lien, to be determined by an accounting in the case. In case of failure to so execute the trust the judgment should operate to pass title in lieu thereof and a certified copy thereof be duly recorded, to perfect the title of record. Judgment was entered in ac-coi’dance with such conclusions.
Eor the appellant there was a brief by Louis H. Bohr, attorney, and Simmons & Walker, of counsel, and oral argument by Mr. Jolvn B. Simmons and Mr. Bohr.
Eor the respondents there was a brief by M. L. Fugina and Webber & Lees, and oral argument by Mr. Fugina and Mr. Edward Lees.

Opinion:
The following opinion was filed June 4, 1912:
MaRshalu, J.
The Teal facts in this case are not in serious dispute on the evidence, and the controversy is governed by familial'- principles of written and unwifitten law.
The first proposition is this: If a person, having real estate, verbally forms a copartnership with others to conduct a particular business, such real estate being remote from and not suitable for nor intended to be used as'such, or in any form, in sucb business, agrees that it shall be considered part of the partnership property, does that transfer the title thereto in equity so that such partnership or the members thereof can acquire the legal title, adverse to such person or those claiming under him, or the proceeds of the property, in case of such person having changed such property into some other form, -or his grantee with notice of the facts having done so ?
The stated proposition is involved in the first finding ex•cepted to and the inferences which the trial court drew therefrom. It is ruled in the negative by sec. 2302, Stats. (1898), providing that "Eo estate or interest in lands, other than leases for a term not exceeding one year, nor any trust or power over or concerning lands or in any manner relating thereto shall be created, granted, assigned, surrendered or de-"dared unless by act or operation of law or by deed or conveyance in writing, subscribed by the party creating, granting, .assigning, surrendering or declaring the same or by his lawful agent thereunto authorized by writing."
The case should not be confused with those where real •estate was bought with partnership money for partnership purposes or as an incident to its business. As in Kyle v. Carpenter, 130 Wis. 310, 110 N. W. 187. The position of counsel for appellant is sound on that subject.- Eor does it fall within the class covered by the language "by act or operation of law." The proposition contemplates an act by the parties only, involving an agreement of no higher dignity than to •deal in real estate which has been many times declared void. Bird v. Morrison, 12 Wis. 138; Langley v. Sanborn, 135 Wis. 178, 114 N. W. 787. Eo authority is produced which sustains, at all, the affirmative of the proposition, and it is clear that it is not sustainable. So we pass to the second point.
If a person, in forming a partnership with others, to conduct particular business, either at the time thereof or thereafter, pursuant to a verbal agreement, then or thereafter made with his associates, from time to time takes a part of the net, earnings of the business, not thought to be necessary thereto, and deposits the same with another to be invested in real estate, not suitable for or intended to be used in the partnership business, but to be owned by the members as tenants in common, and such other invests the money pursuant thei'eto, either taking the title in his own name by their consent or his-act in that regard is subsequently ratified; do the owners of the money so invested thereby become equitable owners of the land as tenants in common ?
The court found facts satisfying the elements of the proposition stated as to the particular land in controversy except that of taking title by Mr. Watson in his own name by previous consent or subsequent ratification. The only finding thereon is that plaintiffs did not know anything about the state of the title till 1905 and were then informed that it was held by Mr. Watson for the benefit of the persons belonging to the particular branch of the Mormon Church to which all parties belonged. The findings are to the effect that they did not learn all the facts as to the title till some time after 1905. Inferentially, from the findings, plaintiffs acquiesced in the situation in 1905 with that understanding that the title was held by Watson as he then claimed, which is in accordance with the undisputed evidence. Moreover, letters written by the respondents before and after 1905 show that they made no personal claim to the land. On the whole the record shows that all the business in relation to thé matter was left to Mr. Jacob Richtman; that he knew all the facts and acquiesced therein, and conclusively indicates, in our judgment, that it was expected the title to the land would be vested in some one person. So the proposition embodies the facts as they appear from the findings and the substantially undisputed evidence.
•While it seems clear there was consent to vesting of the title in Mr. Watson before the land was purchased, at least intrust for the members of the religious sect to which all the parties belonged, and tbe only mistake made, if any, was in not baying tbe deed sbow be beld in trust, tbe subsequent ratification was equivalent to prior consent. Tbe facts showing acquiescence seem clear, and tbe law likewise clear. In Bosworth v. Hopkins, 85 Wis. 50, 59, 55 N. W. 424, subsequent acquiescence was treated, as matter of course, equivalent to prior authority, and that is elementary.
Tbe proposition explained, as indicated, is ruled in tbe negative by tbe statute before referred to as regards tbe respondents having any right to tbe land in controversy as tenants in common. - On that -the court has before spoken. Clarke v. McAuliffe, 81 Wis. 104, 51 N. W. 83; McMillen v. Pratt, 89 Wis. 612, 630, 62 N. W. 588; Seymour v. Cushway, 100 Wis. 580, 76 N. W. 769.
Tbe proposition is also ruled in the negative by sec. 2071, Stats. (1898), abolishing resulting trusts. Formerly if a person deposited money with .another for tbe purpose of having such other invest tbe same in land, and tbe purpose of tbe deposit was executed, title being taken in such other by consent of such person, a trust resulted in-favor of such person enforceable in equity. Tbe case in band should not be confused with those decided where or when tbe old rule prevailed recognizing resulting trusts creatable by acts of tbe parties. Tbe statute was expressly designed to abolish such trusts. It provides that "When a grant for a valuable consideration shall be made to one person and tbe consideration therefor shall be paid by another, no use or trust shall result in favor of the person by whom such payment is made; but tbe title shall vest in tbe person named as tbe alienee in such conveyance" (sec. 2077, Stats. 1898), subject to a constructive trust in favor of creditors under sec. 2078 in case of intent in tbe transaction having been to defraud them. True, to bring a case within this section, there must be tbe element of prior consent or its equivalent, — that must not be lost sight of; but there was such here, it seems, as before indicated, by necessary inference from the findings and the undisputed evidence.
Neither the conclusions of law nor the judgment goes upon the ground that Mr. Watson held the property in trust because it was partnership property; the findings negative that; but because it was bought with money set aside to buy land for the individual members of the partnership. It seems to have been thought that, in any event, whether Mr. Watson took title in his 'own name by consent or not, he became a trustee and would remain so unless respondents lost their right to charge him as such by laches or the statute of limitations. The findings on the subject seem to treat the time when knowledge came to respondents merely in respect to whether they were guilty of fatal laches.
The conclusions of fact are to the effect that Mr. Waisouheld the land in controversy upon an implied trust for respondents and their father. There could be no such thing as an implied trust without some element of fraud, — such as Mr. Watson taking title in violation of an agreement that it should be vested in the owners of the money, — the respondents and their father, if they were such, or in himself as trustee for the members of the branch of the Mormon Church to which all belong. Then there would be an implied or constructive trust by the common law, sometimes confused with resulting trusts, strictly so called, mentioned in sec. 20*77. There was no breach of confidence in this case as to respondents personally, if we read the evidence right; but, if it be otherwise, the breach as to them was waived long before this action was commenced. If there were any breach as to the members of the sect to which the parties belonged, it was also waived as to respondents personally, and, in any event, the right of action to enforce the implied trust did not accrue to them.
The opinion may be read, up to this point, upon the theory that the evidence may be regarded as sustaining the finding to the effect that, by verbal agreement, money was deposited with Mr. Watson to buy land for the benefit of the members of the partnership as tenants in, common and that the land in question was purchased accordingly, the title being taken in Mr. Watson by previous understanding, implied from the whole situation, though not with actual knowledge of all the facts; but, in any event, with subsequent acquiescence in its not having been taken in the names of respondents and their father or any of them; but, we quite agree with counsel for appellant that there is no satisfactory evidence that partnership money was so deposited with such understanding and that the findings are all wrong in respect to that matter. In fact, as we read the record, it is all one way, that the money deposited with Mr. Watson for investment was regarded by all as tithing money to be held and invested for the use and benefit of the sect to which all belonged. Jacob Richtman, who did all the business with the 'knowledge of respondents and makes no complaint, united with Mr. Watson in so. testifying. The evidence of respondents and their letter indicate clearly the same thing.
Mr. Watson was induced to remove from Michigan to Wisconsin by the elder Richtman to do just what he did do, and he carried out the plan agreed upon with strictest fidelity, as it seems, for many years. He was recognized as substantially the head of the sect with authority to exact, collect, use, and invest tithings, for its benefit. All were parties to the arrangement. To give a full history of this would take much space, and it will be omitted. Suffice it, in the main, to say that the evidence leaves no reasonable doubt on the question, and the findings, in the latter part, seem to fairly recognize that they could not have been at all fairly framed without taking note of this phase of the case, and so it was done after the first few paragraphs as to the 'money invested in the land having been deposited with Mr. Watson to buy it for the members of the partnership as tenants in common.
Even in the first part of the findings, as we have seen, re spondents made no complaint upon learning that the land had been bought for the benefit of the members of the sect and till they found out that the deed did not show that fact. Jacob Richtman testified fully to the effect that he did all the business with Mr. Watson and acquiesced in his doing as he did. The idea that there was any breach of faith in the matter by Jacob Richtman or Watson is negatived by both in the most emphatic way. Neither of respondents made any claim to having any interest in the land for years, but on the contrary, in writing, declared that they had none. Both Mr. Watson and Mr. Jacob Richtman said that the purchase money was mainly collections for church dues. Respondents admitted they knew there were dues being sent to Mr. Watson, and that they submitted to being thus burdened.
The record, from beginning to end, shows there were business transactions between Watson and Jacob Richtman in connection with the church matters, whereby, on the whole, private means of the latter, the tithing money, and the former's private funds became confused together, leading to some sharp differences of opinion, in time, between the two men as to the exact situation, which, in the end, were settled, as we shall see.
No further time will be spent on the branch of the case relating to the character of the money invested by Mr. Watson; but we repeat again that the finding that the land in controversy was bought with partnership funds deposited with him for investment, as suggested in the findings, is contrary to the evidence.
The record shows that after the differences had arisen as aforesaid, which were well known to respondents, and long after Mr. Watson had paid Jacob Richtman $3,000 received out of the Webber farm, mentioned in the findings, — paid not thin Icing it was due him, all the money as he thought having been given to buy land for the benefit of the members 6f the sect to which all belonged, — the two met for the purpose of making a full settlement. That the purpose was to close up all differences, is evident from what occurred and from the evidence of both — Mr. Eichtman acting as he had always done, in his own name, but as head of the Eichtman family. Eespondents knew his manner of doing business and made no protest. Their whole attitude was that of acquiescence in such matter. At this meeting Mr. Watson insisted that Mr. Eichtman owed him $1,000 of borrowed money, and the latter claimed he should be paid .a considerable sum by the former,' — thinking particularly "of the money received out óf the Webber farm sale some two years previously. Finally Mr. Eichtman proposed to call the credit that should be allowed him $4,000 and that, if a. settlement were made on that basis, Mr. Watson might have any one in Burlington, Wisconsin, draw up a receipt covering all dues and demands whatsoever up to date and he would sign it. That was agreed to with the modification that the latter should be allowed out of the $4,000 the $1,000 of borrowed money. The settlement so agreed upon was carried out, Mr. Watson paying Mr. Eicht-man-$3,000 and the latter signing and delivering to the former a contractual receipt in the following words:
"Uauvoo, Illinois, May 22, 1908. This is to acknowledge receipt of Wing-field Watson of $1 and- other good and valuable consideration in full payment, discharge and acquittance of all charges, claims and demands against him of whatsoever kind or nature, and I do hereby acknowledge that all accounts and claims between us have been fully discussed, considered and settled and this is a full discharge and settlement thereof.
"In the presence of Jacob Eiciitmau.
"Albert Ketchum.
"August Blum."
That, since Mr. Eichtman in this transaction, clearly, by the implied assent of respondents, represented them as well as himself, the paper signed made a settlement which could not be impeached except for fraud or mistake, seems clear. Such, is the rule respecting such contracts. Conant v. Estate of Kimball, 95 Wis. 550, 70 N. W. 74.
It seems the whole case might well have been disposed of below, and might be here, on the mere history leading np to the execution of the receipt and such execution. -Manifestly, everything was intended by Mr. Richtman, who had done all the business with Mr. Watson on behalf of himself and family, and by Mr. Watson, to be included in the settlement. The former loyally stands by such settlement and malíes no claim to the land in question and never has in the sense insisted upon by respondents, yet, singular as it may seem, the trial court awarded him an interest therein equal with respondents. The theory upon which that was done is not perceived.
Notwithstanding the opinion might, as indicated, stop here, it seems best to take notice of some other features of the case. There is a finding that the trust, considering the answer as a declaration in writing in respect to it as to facts therein stated, is void for want of sufficient indication of beneficiaries, or any method for ascertaining them, and because the object is not sufficiently ascertainable to enable the court to enforce it. In that the court fell into the old confusion between charitable and private trusts supposed to have been entirely eliminated from our jurisdiction in Sawtelle v. Witham, 94 Wis. 412, 69 N. W. 72; Harrington v. Pier, 105 Wis. 485, 82 N. W. 345; Kronshage v. Varrell, 120 Wis. 161, 97 N. W. 928; Kavanaugh v. Watt, 143 Wis. 90, 126 N. W. 672; and other cases.
The trust in this case is a charitable one, if any. Mr. Watson, according to the record, holds the title for the general welfare, .in a broad sense, yet limited to some extent, of a particular class of persons in esse, which may be changed by dropping out or coming in of members in the natural course of events, but ascertainable at any time, in prcesenti, by the head of the sect.
Indefiniteness, to a large extent, is one of tlie characteristics of a charitable trust. "Indeed," as said in Sawtelle v. Witham "vagueness is in some respects essential to a good gift for . . . charity." Courts will not allow such a trust to fail because the objects of the charity are uncertain. The individual beneficiaries cannot well be named. The class may be very small or very large; as said in the cases cited, SO' may be the purpose. It may be single or may be broad to anything less than general charity, as said in Kronshage v. Varrell. If the general limits of the purpose, however broad, within the boundaries mentioned, and also the class, be reasonably ascertainable by the most liberal methods which can be devoted to the matter, though there be great indefiniteness in mode of carrying out the purpose and there be absence of details or even a trustee who is willing to act, and in some cases a trustee at all, — so long as the purpose is within the field of charity in the broadest sense, — the trust is a good one and a way can be found of carrying it out, as said in Harrington v. Pier.
The trial court made the findings of fact entirely misconceiving the law in respect to the trust matter. If they were correct they would likely jeopardize many trusts existing and prevent many which would be otherwise probable or possible1 in the future. Courts tread on almost consecrated ground, so< to speak, when dealing with the law of charitable trusts. The subject did not necessarily have anything to do with this-case. But being injected into it, occasion has been taken to make observations at some length to prevent the history of the-case in the record operating to mislead.
The finding just condemned was doubtless supposed to be1 essential to a decision in favor of respondents because of previous findings and evidence indicating acquiescence in the-state of the title so long as they thought it was held upon a valid trust for the members of the sect to which all belonged.. The ease on that subject seems to have been, too strong, as before indicated, to be ignored; so, the finding was made to the effect that, if the lands were taken upon a trust, as Mr. Watson claimed, and respondents ratified it by not objecting so long as they in good faith supposed he so held the property of record, the trust, in fact, was void.
If it were true that the trust was void as stated in the findings, it is not perceived how that would help respondents. . In that case the title to the land would be in Mr. Watson, as we have seen, discharged of the trust. It would not, to any extent, fall to them and Jacob Richtman as tenants in common, .as evidently the trial court supposed, by reason of their furnishing part of the money to buy the land.
There are some other questions, incidentally discussed in the briefs of counsel; but what has been said covers all which from any viewpoint we think best to treat.
By the Court. — The judgment is reversed, and cause remanded with directions to dismiss the same with costs.
Timlot, J., dissents.
A motion for a rehearing was denied October 8,1912.