Opinion ID: 1564053
Heading Depth: 1
Heading Rank: 3

Heading: ownership of the disputed lands

Text: While the bulk of the total family properties was undisputedly owned by Sam Epstein solely prior to his death, or was acquired by his estate and/or trust after his death, there were various lands estimated by us to exceed 3,200 acres and town lots the legal title to which was variously vested of record in the three daughters and their mother. It is virtually undisputed that the interests in the various tracts of land acquired by Sam Epstein during his life in his wife's and daughters' names resulted from transactions initiated and handled to conclusion by the father. Further, prior to his death, Sam Epstein or employees of his office were solely responsible for managing, farming, renting, paying taxes and collecting rents or income from these properties. After Sam Epstein's death, some sketchy records were kept in the Epstein office of receipts and expenses received and paid in connection with these disputed lands but apparently all actual distributions of income were made equally among the three daughters and their mother. From 1951 or 1952 all of the disputed lands were treated as part of the Sam Epstein Testamentary Trust for all purposes of managing, preserving, improving, leasing, collecting rents and profits therefrom, paying expenses in connection therewith and distributing the net rents and profits. Prior to the institution of this litigation, the net rents and profits, after the payment of expenses, were divided into five portions, one part of which was kept in the trust for replacement of depreciable items and capital investments, and four remaining parts were distributed equally to Mrs. Epstein and the three daughters. After Mrs. Epstein's death, her share was continued to be set apart to her and it was distributed to her grandchildren, the beneficiaries of the Becke Ruth Epstein Testamentary Trust. The appellants assert that the treatment of the disputed properties, both before and after Sam Epstein's death, indicates that, at the time of the acquisition of these properties, a resulting trust existed by which the legal title was vested variously among the mother and three daughters but equitable title remained in Sam Epstein and after his death became a part of his estate and testamentary trust. At the outset, it should be pointed out that the appellants had a very heavy burden of proof. Under our cases, the party asserting the resulting trust must prove by clear, cogent and convincing evidence that such trust existed at the time of the transaction which vested title in the resulting trustee's name. Standridge v. Standridge, 253 Ark. 1004, 490 S.W.2d 125 (1973); Ripley v. Kelly, 207 Ark. 1011, 183 S.W.2d 793 (1944); Harrison v. Cruse, 233 Ark. 237, 343 S.W.2d 789 (1961); and Bebout v. Bebout, 241 Ark. 291, 408 S.W.2d 480 (1966). Further, since the parties involved were the wife and daughters of Sam Epstein and, therefore, the natural objects of his affection and largess, the law presumes that his purchase of property and registration of legal title thereto in the family members' names were intended as gifts by him to them. Milner v. Freeman, 40 Ark. 62 (1882); James v. James, 41 Ark. 301 (1883); White v. White, 52 Ark. 188, 12 S.W. 201 (1889); Harbour v. Harbour, 103 Ark. 273, 146 S.W. 867 (1912); Roller v. Roller, 214 Ark. 382, 216 S.W.2d 399 (1949); and Harrison v. Knott, 219 Ark. 565, 243 S.W.2d 642 (1951). While at first blush the proof that Sam Epstein, during his lifetime, exercised dominion, management and control of the disputed properties, and after his death Ben Angel, who managed the Sam Epstein Testamentary Trust properties, did so likewise, would seem to indicate that a resulting trust existed, the chancellor was not convinced that this rose to the standard of proof required of the appellants. Indeed, the explanation of the appellees that the properties were managed and operated as an integrated unit for economic efficiency and convenience to the parties seems plausible. This is especially so when it is remembered that in addition to the farmlands involved, the undisputed properties included a cotton gin, feed, seed and chemical warehouse and business properties, all of which required a large land base which the combined farming properties provided. Further, some of the family members were able to produce receipts for payments on land issued in their names and other documents where mortgage lienholders had been paid and the satisfied documents were returned to the record title owners and not to Sam Epstein. When Mrs. Epstein died, the probate proceedings of her estate and the estate tax return thereon showed that the family members reported the property titled in Mrs. Epstein's name as having been owned by her at the time of her death. The trial court heard all of the evidence and was in a position to evaluate the demeanor of the witnesses and followed the development of the case much better than we can from the cold record and abstract thereof. With the exception of the specific tracts discussed hereinafter, we cannot say that the chancellor's finding was clearly erroneous and, therefore, with the exception hereinafter described, we affirm. Rule 52 of the Arkansas Rules of Civil Procedure; Ford Motor Co. v. Yarbrough, 266 Ark. 457, 587 S.W.2d 68; Titan Oil & Gas v. Shipley, 257 Ark. 278, 517 S.W.2d 210 (1974). There were four tracts purchased by Sam Epstein during his lifetime, the legal title to which he caused to be registered in the name of his son-in-law, Ben Angel, in addition to his wife and/or daughters. Tracts 1 and 14, containing 235 acres and 501 acres, respectively, were conveyed of record in 1941 to Ben Angel, Sylvia Angel, Melvyn Epstein, Helen Epstein and Ruth Epstein. Tract 4, containing 181.63 acres, was conveyed in 1941 to Ben Angel, Sylvia Angel and Helen Epstein. Tract 76, containing 32 platted lots with lakeside frontage, was conveyed in 1938 to Ben Angel and Sylvia Epstein Angel. The position of Ben Angel is best described by the following quotation from the excellent memorandum opinion of the chancellor: ... Ben Angel had the utmost respect and trust of Sam Epstein, Mrs. Epstein, and each of his two sisters-in-law as well as of their respective husbands, and ... this respect and trust have survived him. The record in this case establishes that he was a person of sound business judgment and acumen and of unquestioned integrity, was deserving of the great trust that his family placed in him and was equal to the responsibilities of his position, which might be said was that of patriarch in this family following Sam Epstein's death. The provision to be discussed immediately below incorporated into his will perhaps characterizes this man's qualities just referred to. The first sentence of the provision in Ben Angel's will described by the chancellor states: While the entire or undivided interest in the naked legal or record title of the separate parcels of real estate hereinafter identified in this Item Third of my will at my death may be in my name, such parcels of real estate are not owned by me personally and are not to be included in the assets of my estate. The chancellor found that this provision of Ben Angel's will was clear, cogent and convincing proof as to Ben Angel's interest only that he was a resulting trustee; declared Ben Angel's interest reflected in each of the deeds to be that of an undivided interest in common with the other record title owners and vested that interest in Sam Epstein and his testamentary trust. We agree with the chancellor's reasoning that the provision of Ben Angel's will, when taken together with the other evidence, does meet the standard of clear and convincing proof of a resulting trust as to the lands described in his will. We would not limit the trust to Ben Angel's interest only however. Since each of the deeds to the four tracts treated Ben Angel in the same manner as the other grantees and since all four of these tracts were handled in precisely the same manner as those tracts referred to as undisputed properties we believe that Ben Angel was not the only resulting trustee of these tracts but also all of the record title owners were resulting trustees of these four tracts for the use and benefit of Sam Epstein and after his death for his estate and testamentary trust. Therefore, as to Tracts 1, 4, 14 and 76 we hold that legal title should be divested from the record title owners thereof or their successors and vested in the trustees of the Sam Epstein Testamentary Trust to be distributed in accordance with the terms of Sam Epstein's will as construed hereinabove. With these exceptions, the decision of the chancellor relating to the disputed lands is affirmed.