Title: JOHNSON v JOHNSON
Citation: N/A
Docket Number: 13380
State: Montana
Issuer: Montana Supreme Court
Date: March 15, 1977

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 1 g q 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 de- fendants, 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 h i s wife deeded a half section of the farmland t o Kenneth and another half section t o Howard. A t t h a t time Kenneth was a single man with the United States A i r Force i n California. I n May 1953, the father traveled t o California t o secure a conveyance from Kenneth of h i s half section of the farmland. Although a dispute e x i s t s concerning the reason f o r t h i s , the record establishes it was f o r one o r both of these reasons: (1) A s an e s t a t e planning precaution should Kenneth lose h i s l i f e i n the Korean c o n f l i c t , (2) f o r f e a r the land would be l o s t i n p o t e n t i a l l e g a l action a r i s i n g out of Kenneth's in- volvement with a married woman. According t o the record, the o r i g i n a l idea was f o r Kenneth t o t r a n s f e r the land t o h i s married s i s t e r , Arlene Petersen, who lived i n California. How- ever, she indicated Howard would be b e t t e r able t o take care of the land a s he was l i v i n g on the farm. B y deed dated May 12, 1953, Kenneth conveyed the half section of land i n question t o Howard. This deed was absolute on i t s face and made no mention of a t r u s t . O n the face of the deed appeared $8.80 i n federal documentary stamps indicating a consideration of $8,000 f o r the transfer. The documentary stamps were dated and i n i t i a l e d with Kenneth's i n i t i a l s . Kenneth denies receiving any money o r consideration f o r the deed o r transfer. Kenneth signed and f i l e d a federal gift t a x return covering the calendar year 1953. H e s t a t e d i n t h i s return t h a t the t r a n s f e r was a g i f t , t h a t the value of the Land a t the time of t r a n s f e r was $8,000 and t h a t no t r u s t was created. Kenneth was discharged from the military service and returned home t o Sheridan County i n December 1955. Thereafter Kenneth and Howard farmed the e n t i r e section of land. Kenneth, Howard and t h e i r f a t h e r each received a share of the crops u n t i l the death of the father i n November 1965. Following the f a t h e r ' s death, Kenneth and Howard continued t o 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 i s a subject of dispute i n the record. Kenneth married i n 1959. An exhibit t o Howard's deposition is a l e t t e r from t h e i r father t o Howard dated January 2, 1960, s r a t i n g "Kenneth knows t h a t he has not any t i t l e o r r i g h t t o any of the homestead o r half sec. t h a t I bought from Sparling" and t h a t Kenneth t o l d him it would not work "so he don't need t o t e l l himself. o r anyone t h a t t h a t 112 sec. i s his1'. Kenneth denied knowledge% of t h i s l e t t e r . I n March 1965, conveyances were executed by Howard and h i s wife vesting the half section of land i n question i n themselves a s j o i n t tenants. The deeds creating the j o i n t tenancy were recorded i n the o f f i c e of the c l e r k and recorder of Sheridan County on March 1, 1965. I n 1968, Kenneth secured a loan from the Production Credit Association. I n the loan application he was asked t o l i s t the land he owned. Kenneth admitted i n h i s deposition t h a t he did not l i s t the half section i n question. I n 1971, Howard mortgaged some land t o the Federal Land Bank f o r $56,000. Included i n the mortgage was the half section of land i n question. I n 1973 and 1974, Kenneth delivered 113 of the crop t o Howard pursuant e i t h e r t o an agreement between Howard and Kenneth o r a t 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 substan- tiating 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 con- siderably 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 r e l a t i n g t o summary judgments, Rule 56, M.R.Civ.P., has been construed i n d e t a i l i n a long l i n e of Montana cases and recently was substantially summarized i n Harland v. Anderson, Mont . , 548 P.2d 613, 615, 33 St.Rep. 363,365. I n essence summary judgment i s not a s u b s t i t u t e f o r a t r i a l ; it can only be granted where t h e record discloses no genuine issue of material f a c t and the moving party i s e n t i t l e d t o judgment a s a matter of law; and where the absence of any genuine issue of material f a c t i s disclosed by the record, the burden i s on the party opposing summary judgment t o come forward with evidence creating a genuine issue of material f a c t t o be determined a t t r i a l . I n Harland the Court said: "The primary policy and general purpose underlying Rule 56, M.R.Civ,P., i s t o encourage j u d i c i a l economy through the prompt elimination of questions not deserving of resolution by t r i a l . " With these principles i n mind, we d i r e c t our a t t e n t i o n t o the defense of laches which i s one basis on which the d i s t r i c t court granted summary judgment t o defendants. The doctrine of laches was s e t f o r t h a t some length i n Riley v. Blacker, 51Mont. 364, 370, 371, 152 P. 758, applied i n 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 c i t e d i n Davis v-Steingruber, 131 Mont. 468, 311 P.2d 784: "Laches, considered a s a bar independent of the s t a t e of limitations, i s a concept of equity; it means negligence i n the assertion of a r i g h t ; it is the p r a c t i c a l application of t h e maxim, ' ~ q u i t y a i d s only the v i g i l a n t ' ; and it e x i s t s when there has been unexplained delay of such duration o r character a s t o render t h e enforcement of the asserted r i g h t inequitable. Therefore has it often been held by t h i s court t h a t : While a mere delay short of the period of the s t a t u t e of limitations does not of i t s e l f r a i s e the presumption of laches [ c i t i n g cases] yet 'good f a i t h 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. Con- sideration 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 consti- tutes 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 circum- stances, 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.* * * I 1 ' 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 con- sideration (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 interroga- tories 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 i n joint tenancy with h i s wife i n March 1965, and recorded the convey- ances, a l l i n derogation of the powers and duties of a trustee. Kenneth c i t e s Opp v. Boggs, 121 Mont. 131, 193 P.2d 379, for the rule that the statute of limitations does not begin t o run with respect t o a constructive t r u s t u n t i l r e f u s a l ' by the trustee t o carry out the t r u s t by reconveyance. However, laches, unlike the statute of limitations, begbns.: t o run when the t r u s t is created by operation of law. The rule i s stated r~ i n t h i s language i n 76 Am Jur 2d, Trusts, 5597, p. 804: "Laches constitutes a defense t o a s u i t t o declare and enforce a constructive t r u s t ; and for the purpose of the rule, repudiation of the constructive t r u s t i s not required, and time runs from the moment that the law creates the t r u s t , which i s 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 t o enforce for over 23 years. A material witness to the transaction died more than 10 years prior t o suit. The alleged trustee committed an act i n derogation of the t r u s t some 12 years prior t o s u i t , viz. mortgaging the property. The alleged trustee committed another a c t i n derogation of the alleged t r u s t more than 1 1 years prior to s u i t of which Kenneth i s chargeable with knowledge, Qiz. placing the property i n joint tenancy with h i s wife. Laches is established as a matter of law, justice cannot now be accomplished because of the lapse of time and the material change i n the circumstances, and equity w i l l not intercede 23 years l a t e r t o aid Kenneth i n establishing a claim he has failed t o 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: 7 I , r: (457 " 7 7' -.-- -. [ + r--c;J >4&,&w Chief Jystice " a ' ,