Court Opinion

ID: 9545150
Source: CourtListenerOpinion
Date Created: 2023-08-07 17:07:15.883815+00
Date Added: 2024-06-11T15:14:11.251386
License: Public Domain

CALLISTER, Chief Justice:
Plaintiffs initiated this action to recover upon two separate types of claims; in their first cause of action, plaintiffs sought a decree quieting title to real property in Salina, Utah. In their second cause of action, they sought the repayment of money advanced in a series of loans to defendant from January, 1962, through September, 1967. This matter was tried before the court, which rendered a decree declaring the plaintiffs the owners of the real property, free and clear of all claims of defendant, and a judgment for the plaintiffs in the sum of $11,666.99 plus costs; defendant appeals therefrom.
Defendant is the brother of Mrs. Taylor, one of the plaintiffs. The versions of the events which transpired, as related by the adverse parties, are in extreme conflict. A survey of the record reveals substantial evidence to support the determination of the trial court; therefore, this review will be in accordance with these findings which reflect a belief in plaintiffs’ version of the transactions. According to plaintiffs, defendant approached them in January, 1962, and requested a loan so that he might go to Australia to start an insurance company. Mr. Taylor, who was in his late sixties, was contemplating retirement. Mrs. Taylor re*41lated that her brother induced them to make a short-term loan of their retirement funds, for a period of six months to one year. He promised them ten per cent interest, a rate which he indicated was much higher than they were receiving from the bank. Plaintiffs advanced $7,000 to defendant about January 12, 1962; defendant promised them some type of written agreement, and shortly thereafter a document came through the mail, which was entitled preincorporation agreement. At the end of this typewritten agreement, defendant had acknowledged in his own handwriting the receipt of $7,000. Subsequently on about January 16, 1962, plaintiffs advanced an additional $2,000.
Defendant asserted that the sum of $9,000 was invested by plaintiffs as participants in a business venture in Australia which failed. He introduced in evidence a second preincorporation agreement, which he insisted was the agreement of the parties. Plaintiff denied that this documentary evidence reflected their agreement and pointed out that this alleged contract recited $8,000, while the parties agreed the initial sum advanced was $9,000. To substantiate their version of the transaction, plaintiffs introduced an insurance policy in the face amount of $8,059, wherein defendant had made Mr. Taylor the beneficiary as a means of providing security; this policy was received by plaintiffs on approximately December 30, 1963. Plaintiffs further received certain payments from defendant by check, which had a notation thereupon of “loan” and “payment of loan.”
Defendant concedes that plaintiffs made him a personal loan of $1500 in February,, 1963, and he claims that the payments mad© to Taylors were solely on this indebtedness. Plaintiffs’ final loan of $500 was made to defendant on September 29, 1967; defendant claims that this was compensation for his assistance in arranging a loan for plaintiffs.
In 1967, the plaintiffs felt impelled to move from their home in Salina, Utah, because of certain disturbances in their neighborhood. They had listed the property with a realtor but had been unable to effect a sale. Mr. Taylor was in his seventies, retired, and in poor health; plaintiffs sought defendant’s assistance in procuring a loan, so they could purchase a home in Aurora, Utah. Defendant was able to arrange a loan but only upon terms where he was personally liable; so plaintiffs conveyed the property to him. Plaintiffs received a check for $10,313; defendant subsequently discharged the mortgage loan including interest and expenses. Defendant sold the home on a contract to one Herrara. Defendant does not deny that the transaction was a security arrangement and stated that he would convey the title and assign the contract for $7,000 cash.
From the foregoing, the trial court found that defendant, as trustee for the benefit *42of plaintiffs, had them convey the property to him to secure financing and to arrange a sale, and that defendant in open court acknowledged that the obligation due him for the funds so secured would be satisfied for the sum of $7,000. This sum, in addition to the three payments made by defendant to plaintiffs, was offset against the total indebtedness of defendant in the judgment.
On appeal, defendant asserts that the trial court erred in construing the pre-incorporation agreement as a loan and not as a speculative venture, i. e., the court permitted parol evidence to alter the express terms of a written contract. This entire controversy is predicated on whether the agreement of the parties was an oral loan or written contract for a business venture. The evidence was sharply conflicting, and the determination of the trial court was adverse to defendant. The court did not vary the terms of a written contract, but, upon substantial evidence, it found that the exhibit presented by defendant was not the agreement of the parties.
Defendant contends that if there were an oral agreement to loan money such an agreement is barred by the Statute of Frauds, Section 25-5-4(1), U.C.A.1953, as an agreement which by its terms is not to be performed within one year from the making thereof. Defendant attempts to refer to a provision in the preincorporation agreement wherein an accounting was not to be made until January 13, 1963.
The trial court did not find this document to be the agreement of the parties. Mrs. Taylor testified that defendant requested a loan for a period of six months to one year. An oral promise to pay within a year is valid and not within the Statute of Frauds, and the mere fact that a party in violation of his promise failed to pay within the stipulated time, does not give him a right to invoke the statute.1
Defendant asserts that the funds loaned in 1962 are barred by the Statute of Limitations as provided in Section 78-12-25(1), U.C.A.1953, wherein an action upon an obligation not founded upon an instrument in writing must be commenced within four years after the last payment is received. Defendant made the following payments: (a) July 25, 1965, $800; (b) October 2, 1966, $75; (c) December 5, 1966, $100. Plaintiffs commenced this action on June 4, 1969, which is within the four-year limitation period. Defendant urges that the payments he made were limited to the indebtedness he incurred in 1963; the trial court did not adopt defendant’s interpretation of the transaction; *43this was a factual determination which cannot be disturbed on appeal.
Defendant contends that the trial court erred in its determination that the plaintiffs were the owners of the real property in Salina, Utah, and that defendant held the property in trust to secure certain funds which were paid to plaintiffs. Defendant pleaded the Statute of Frauds, Section 25-5-1, U.C.A.1953; he urges that there was no instrument in writing concerning this alleged trust relating to real property.
Section 25-5-2, U.C.A.1953, provides:
The next preceding section [25-5-1] shall not he construed ... to prevent any trust from arising or being extinguished by implication or operation of law.
In Wasatch Mining Co. v. Jennings 2 this court construed the foregoing statute and stated that trusts arising by implication or operation of law are expressly excluded from the effects of the Statute of Frauds; and, a deed of conveyance, though absolute in form, if given to secure a debt, is in equity treated as a mortgage — a trust by operation of law.
The Restatement, Trusts (2d), Section 44, provides:
(1) Where the owner of an interest in land transfers it inter vivos to another in trust for the transferor, but no memorandum properly evidencing the intention to create a trust is signed, as required by the Statute of Frauds, and the transferee refuses to perform the trust, the transferee holds the interest upon a constructive trust for the transferor, if
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(c) the transfer was made as security for an indebtedness of the transferor.
The trial court did not err in its determination that the deed, although absolute in form, was in fact executed as security for a loan of money.3 Defendant was a constructive trustee, who held title to secure the funds advanced to plaintiffs.
Finally, defendant contends that the trial court erred in the amount of the indebtedness incurred by defendant for the benefit of plaintiffs in regard to the property subject to the trust. Defendant expended funds far in excess of the $7,000 to repay the mortgage loan he procured, as well as the selling expenses. Defendant sold the property for $12,000, with a $1,000 down payment and the remainder on contract. Defendant proclaimed in open court that he would assign his interest in the contract for $7,000 in cash; he explicitly extended this offer to plaintiffs. Based on the foregoing, the trial court determined *44that the plaintiffs’ obligation to defendant to be satisfied for $7,000. Defendant has not asserted any ground upon which to predicate prejudicial error.
The judgment of the trial court is affirmed. Costs to respondents.
TUCKETT, HENRIOD and CROCKETT, JJ., concur.

. Thompson v. Whitney, 20 Utah 1, 7, 57 P. 429 (1899); also see Zions Service Corp. v. Danielson, 12 Utah 2d 369, 372-373, 366 P.2d 982 (1961).

. 5 Utah 243, 15 P. 65 (1887).

. Corey v. Roberts, 82 Utah 445, 25 P.2d 940 (1933).