Opinion ID: 2080449
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Heading: Did Trial Court Err in Deciding the Equitable Issues?

Text: At the outset we refer to an issue we are not required to explore extensively in this appeal. Over eight pages of plaintiff's brief are devoted to the proposition that judicial resolution of disputes arising out of division of property accumulated by unmarried cohabitating couples does not contravene public policy. Plaintiff cites the well-known palimony decision, Marvin v. Marvin, 18 Cal.3d 660, 557 P.2d 106, 134 Cal.Rptr. 815 (1976), and its progeny spawned in a number of jurisdictions, most of which, unlike Iowa, do not recognize common-law marriages. Defendant relies on other decisions, including Hewitt v. Hewitt, 77 Ill.2d 49, 394 N.E.2d 1204, 31 Ill.Dec. 827 (1979), a case that raises sobering public policy questions relating to property claims and other issues arising from such relationships. Michigan and New York have refused to adopt the entire Marvin holding; both limit such actions to enforcement of express contracts and deny judicial approval to any contract that must be implied. See Carnes v. Sheldon, 109 Mich.App. 204, 211-17, 311 N.W.2d 747, 752-53 (1981); Morone v. Morone, 50 N.Y.2d 481, 486-89, 413 N.E.2d 1154, 1157-58, 429 N.Y.S.2d 592, 595-96 (1980). We considered a related issue in Laws v. Griep, 332 N.W.2d 339, 341 (Iowa 1983), where, in denying an unmarried cohabitant's loss of consortium claim, we wrote: The policy of this state is that the de jure family is the basic unit of social order. This policy is reflected in statutes governing the right to marry. See Iowa Code chapter 595 (1983). It is reflected in the rule recognizing common law marriages. It is demonstrated by statutes defining the rights and responsibilities of husbands and wives toward each other and toward their children. See, e.g., chapters 597 and 598. The policy favoring marriage is not rooted only in community mores. It is also rooted in the necessity of providing an institutional basis for defining the fundamental relational rights and responsibilities of persons in organized society. This policy would be subverted if persons could gain marital legal rights without accepting correlative marital legal responsibilities. We need go no further than this in rejecting plaintiffs' invitation in the present case. See also Baldwin v. Sullivan, 201 Iowa 955, 957-61, 204 N.W. 420, 421-23 (1926) (denying an unmarried cohabitant's right to compensation under the workers' compensation laws). Although in affirming a denial of a claim in probate for services rendered by an unmarried coinhabitant we stated such claims generally are denied, In re Ballard's Estate, 252 Iowa 548, 553, 107 N.W.2d 436, 439 (1961), we have allowed recovery when the claimant believed she and the deceased were legally married. In re Fili's Estate, 241 Iowa 61, 69-71, 40 N.W.2d 286, 291-92 (1949). See Annot., 94 A.L.R.3d 552 (1979). In this case there are two reasons why we do not believe we are required to confront the basic issue plaintiff raises. First, it apparently was not urged by defendant in district court, and may not have surfaced here had plaintiff not voluntarily raised it. Second, we believe that even if the validity of plaintiff's proposition were conceded, under this record she nonetheless is not entitled to the relief she seeks. Trial court filed Findings of Fact, Conclusions of Law and Decree in adjudicating plaintiff's three equitable claims. Among other facts, the court found the relationship between the parties was limited to their agreement to cohabit together without marriage; there was no substantial evidence of an agreement to share in the costs and expenses of building the house; defendant purchased the real estate and plaintiff refused to sign any of the related documents; defendant proceeded to construct his residence with the help of his friends and co-workers. The court further found [t]hat the assistance that the plaintiff may have given in the selection, delivery, or application of any materials, like that of the defendant's other friends, was gratuitous and a part of the friendly relationship which then existed between the parties. Trial court further found defendant furnished all the funds for construction of the house, furnished funds for plaintiff's personal needs, supplied her with various automobiles for her personal use, and paid for her tuition at a cosmetology school and for real estate sales classes. The court found that although plaintiff deposited monies in defendant's checking account, plaintiff withdrew for her personal use funds far in excess of those deposited. Further, defendant encouraged plaintiff to open her own savings account for her own funds and the proceeds of the sale of her Des Moines house. In our de novo review, Iowa R.App.P. 4, we find ample support in the record for each of the above factual findings, and adopt them as our own.
In Glass v. Minnesota Protective Life Insurance Co., 314 N.W.2d 393, 397 (Iowa 1982), we quoted the following from Smith v. Stowell, 256 Iowa 165, 173, 125 N.W.2d 795, 799-800 (1964): Restitution and unjust enrichment are modern designations for the older doctrine of quasi contracts or contracts implied in law, sometimes called constructive contracts. The doctrine rests upon the equitable principle that one shall not be permitted to unjustly enrich himself at the expense of another or to receive property or benefits without making compensation therefor. See also Iconco v. Jensen Construction Co., 622 F.2d 1291, 1295-96 (8th Cir.1980); Restatement (Second) of Contracts § 4 comment b (1981). We do not perceive this doctrine to invest this court with a roving mandate to sort through terminated personal relationships in an attempt to nicely judge and balance the respective contributions of the parties. Plaintiff argues she contributed all of her time, money and labor for seven years to help Tom Hammond build a house for the two of them, [thus] was entitled to recover half the value of the Hartford property, under the theory of unjust enrichment. There is nothing in this record to show that defendant's retention of the house would be unjust or that it would be inequitable for the defendant to retain the [benefit], Key Pontiac, Inc. v. Blue Grass Savings Bank, 265 N.W.2d 906, 908 (Iowa 1978). Clearly, plaintiff furnished less labor on this project than many of defendant's friends, in whom we would recognize no interest in the real estate. She contributed no capital and took no risk. We agree with trial court that the record discloses no evidence to show that the defendant profited or enriched himself inequitably or unconscionably at the plaintiff's expense.
There are three situations in which a resulting trust may arise. Restatement (Second) of Trusts, ch. 12 at 323 (1959). Plaintiff classifies her claim as a purchase money resulting trust. Ordinarily such a situation arises when the purchase price of the property is paid by one person and at his or her direction the vendor transfers the property to another. The latter is deemed to hold the property in trust for the person furnishing the consideration. See United States v. Schroeder, 242 F.Supp. 430, 433 (S.D.Iowa 1964), aff'd, 348 F.2d 223, 228 (8th Cir.1965); Gregory v. Gregory, 248 Iowa 672, 674-75, 82 N.W.2d 144, 146 (1957); Shaw v. Addison, 239 Iowa 377, 383-84, 28 N.W.2d 816, 820 (1948). The critical time occurs when the legal title to the property is acquired. A resulting trust cannot arise from matters coming into existence afterwards, and the person claiming to be the cestui que trust must occupy such position then as will entitle him or her to be substituted for the grantee. Gregory, 248 Iowa at 674, 82 N.W.2d at 146. The plaintiff has the burden to establish all necessary facts with proof that is clear, certain, satisfactory and convincing. Ross v. Ross, 256 Iowa 326, 333, 126 N.W.2d 369, 374 (1964); Gregory, 248 Iowa at 674, 82 N.W.2d at 146. Plaintiff argues consideration furnished by the cestui que trust may be only partial, and may be in the form of services, citing Restatement (Second) of Trusts, sections 454 and 455. Those sections, however, indicate that the consideration must flow to the vendor, not to the person taking title. Taking plaintiff's assertions at face value, the situation is that described in section 457 comment b: Where the transferee pays the purchase price to the vendor, the mere fact that another person subsequently pays the amount of the purchase price to the transferee or agrees to do so is not sufficient to create a resulting trust in his favor, if at the time of the purchase he did not agree to pay the purchase price or any part of it. In this case we find, as did trial court, there was no evidence plaintiff paid or agreed to pay the vendor, and no agreement that she would provide any part of the consideration to anyone. The undisputed evidence is that she refused to sign the note and mortgage for the money to pay for the property, and the purchase price was borrowed and paid by defendant. A resulting trust is an intent-enforcing trust. G. Bogert, The Law of Trusts and Trustees § 463 (rev. 2d ed. 1977). Plaintiff's refusal to permit her name to be placed on the deed negates the necessary intent that she was to have an interest in the property. See Newell v. Tweed, 241 Iowa 90, 98, 40 N.W.2d 20, 25 (1949) (Although [plaintiff] knew that the title to the farm had been taken in [defendant's] name she made no demand to have her interest in it conveyed to her ....). Trial court was right in rejecting plaintiff's claim that a resulting trust arose in the circumstances shown by this record.
Plaintiff contends she is entitled to a constructive trust equal to an undivided one-half interest in the rural Hartford property. We described this remedy in Regal Insurance Co. v. Summit Guaranty Corp., 324 N.W.2d 697, 704-05 (Iowa 1982): A constructive trust is a remedy, applied for purposes of restitution, to prevent unjust enrichment. It is an equitable doctrine. In Loschen v. Clark, 256 Iowa 413, 419, 127 N.W.2d 600, 603 (1964), we approved the following definition: A constructive trust is a creature of equity, defined ... as a remedial device by which the holder of legal title is held to be a trustee for the benefit of another who in good conscience is entitled to the beneficial interest. So, the doctrine of constructive trust is an instrument of equity for the maintenance of justice, good faith, and good conscience, resting on a sound public policy requiring that the law should not become the instrument of designing persons to be used for the purpose of fraud. E.g., Hillman, Contract Remedies, Equity, and Restitution in Iowa, § 3.3 at 63-68 (1979); Restatement of Restitution, § 160 (1937); 89 C.J.S. Trusts § 151 at 1066-68; 76 Am.Jur.2d Trusts § 221 at 446. Constructive trusts fall into three categories: (1) those arising from actual fraud; (2) those arising from constructive fraud (appropriation of property by fiduciaries or others in confidential relationships); and (3) those based on equitable principles other than fraud. Loschen, 256 Iowa at 419-20, 127 N.W.2d at 603; Hillman, supra, at 64. One seeking the remedy must establish the right by clear, convincing, and satisfactory evidence. Copeland v. Voge, 237 Iowa 102, 107, 20 N.W.2d 2, 5 (1945). The distinguishing feature of the constructive trust is that it arises by construction of the court and ordinarily the result is reached regardless of and contrary to any intention to create a trust. Westcott v. Westcott, 259 N.W.2d 545, 547 (Iowa Ct. App.1977). We agree with trial court's conclusion that plaintiff has produced no clear and convincing evidence showing defendant has enriched himself inequitably or unconscionably at plaintiff's expense. Plaintiff absented herself for months while much of the construction took place. The record reflects she is a bright, aggressive person who followed her own interests and who was fully capable of legally protecting any right she might have asserted in the real estate. It was only after the house virtually was completed and paid for that she presented defendant with a quitclaim deed to sign, conveying to her a one-half interest. Upon his refusal, she continued to live in the house until her occupancy was terminated, whereupon she commenced this action. There is a clear inference in the evidence that the services and benefits these parties conferred upon each other during the course of their cohabitation were gratuitously rendered and extended. We find nothing in this situation that would invoke the conscience of an equity court.