Court Opinion

ID: 9658842
Source: CourtListenerOpinion
Date Created: 2023-08-23 21:17:58.861253+00
Date Added: 2024-06-11T18:14:00.398700
License: Public Domain

Garrett, J.
(dissenting) — I am unable to agree with the majority and therefore respectfully dissent. The majority opinion, as I view it, overrides some well-established principles of law and ignores some facts which should be controlling. No one disputes the maxim that “he who comes into equity must come with clean hands.” The trial court correctly found appellants did not bring themselves within this rule. The record amply sustains the following statement of the learned trial court in his findings of fact: “Much of the evidence offered by the plaintiffs in support of their claims is not sufficiently credible to be worthy of belief. It is replete with inconsistencies. It acknowledges that the deed in question was the result of a deception and deceit to secure a tax advantage which the state of Iowa was not then granting. It acknowledges that the state of Iowa was deprived of inheritance taxes twice by the deed in question if the plaintiffs’ claims were sustained.”
The majority urge that the deed to Harry G. Todd was unnecessary to accomplish the desired tax relief in view of the law, but that does not alter the fact that, if appellants’ present position is correct, they were seeking to circumvent what they thought was the law. They were implementing their purpose and desire to defeat the state whether they accomplished it or not. With reference to the failure and refusal of Thomas Todd as executor of Elmer Todd’s estate to report for tax liability and pay the tax due, if appellants’ position is correct the following quotation from Sisson v. Janssen, 244 Iowa 123, 131, 56 N.W.2d 30, 34, is in point:
“It is argued on behalf of plaintiff that the ‘clean hands’ doctrine is inapplicable here for various reasons: e.g., that the claimed oral agreement was neither illegal nor malum in se because the defendant failed to show any express statute or racing association rule which forbade such a transaction as defendant claims this was. * * * It is clear that a transaction of the sort claimed by plaintiff would be against public policy and immoral. Equity cannot be a party to it. We know of no case that holds the maxim merely condemns acts violative of statute and acts malum in se. We think it means ‘that equity refuses to lend *1095its aid in any manner to one seeking its active interposition, who has been guilty of unlawful or inequitable conduct in the matter with relation to which he seeks relief’, and that ‘the maxim is based on conscience and good faith.’ ” 30 C. J. S., Equity, section 93, pages 476, 477.
The admitted conduct of appellants and their attorney, W. H. Scott, is difficult to reconcile with any theory other than that they considered the conveyance to Harry of the 100-acre Huntley farm as an absolute conveyance in fee simple or if they did not so consider it then they chose to make it so appear for fraudulent purposes. The only excuse they offer for affirmatively excluding this farm from Elmer’s estate is that Attorney Scott overlooked it. It must be said of Thomas and Floyd Todd that they are businessmen of more than ordinary ability and acumen as evidenced by their accumulation of property, buying, with their brothers one farm after another with a full complement of stock and equipment. It is believable the omission from the inventory might be excused but the repeated and continued exclusion of this land in the further administration of Elmer’s estate, the closing of the estate without paying the inheritance tax and the failure ever to pay the inheritance tax cannot be accepted as oversight on the part of these two brothers and their fully informed legal adviser. If this record against the appellants is to be excused as an oversight then this case will be a precedent for excusing as an oversight almost any conduct a litigant wishes to have excused. For the many months it took to administer Elmer’s estate, Floyd and Thomas and their attorney conducted themselves in all respects, even to the filing of many verified documents to that general effect, as though the deed to Harry was just what, on its face, it purports to be.
The majority opinion refers to three blank deeds executed by Harry and left with Mr. Scott who testified: “Regarding Exhibit I [three blank deeds] there were three parties that conveyed legal title in trust to Harry Todd. This is the only significance I can think of as to why there were three blank deeds. One was made for the benefit of each. I presume Harry could have reconveyed the 100 acres in one deed had he wanted to.”
This is rather vague and indefinite testimony, coming from one so eager to sustain his clients’ cause. He gave other testi*1096mony, mostly incompetent, but tbe chain of his testimony can be no stronger than the weakest link and there were several weak links in addition to- his intense interest.
The attorney for the executors was the same W. H. Scott who had drawn the deed to the 100 acres to Harry G. Todd, and who was attorney not only for the “Todd Brothers” partnership but for the individual members thereof and for the Elmer Todd estate and the Harry G. Todd estate. Harry’s widow, Marion Todd (now Marion Todd Reints) testified she relied upon the advice of the attorney, W. H. Scott, and acquiesced in all the suggestions made by him and upon his advice and recommendations, and that “Floyd after his appointment [as trustee] never conferred with me or the girls in regard to the administration of the property. We never received a report. * * * I never requested this information from Floyd. I never felt very free to talk to Floyd about the business. * * * I went along with whatever they did.”
Floyd rented an apartment in town for her and her three daughters and later bought a house without consulting her.
The majority seek to make capital of the fact that Marion Todd signed whatever she was asked to sign and whatever Attorney W. H. Scott prepared for her signature, and that she did not know of the deed to Harry until after his death. It is so plain in the record here “that he who runs may read” that Marion and her daughters were never consulted or kept informed on anything relating to their business interests and the interests of the Todd Brothers until this suit was commenced.
It is most obvious that at all times Floyd and Thomas and their attorney maintained a confidential relationship between themselves and appellees in which appellants were the dominant persons and the appellees the .subservient ones. They now seek to benefit by their dominant position and the advantage they gained by instructing appellees what to sign.
It seems most significant that appellants have never been able to explain why they conveyed the entire 100-acre farm to Harry in order to secure the 40-acre homestead tax deduction. The fact he was the only one who had direct heirs would be reason enough for this conveyance. It is equally difficult to understand why Harry and Marion were never asked to recon*1097vey this tract if what appellants now claim is true. Harry was very ill for several years but they chose to wait until he could not speak.
The majority minimize the effect of the only vital testimony coming from a disinterested party. A neighbor of Harry’s testified:
“A. I was on my place and he [Harry] was on his, his across the road on the Todd Brothers 80, and I had to drive my cattle about a mile to pasture, and he knew it, and he said ‘Fred, I am trying to get the boys so I get this 80 to go with mine, and then I will rent you a pasture and you won’t have to drive them around the road.’ Q. He referred to his place as mine, did he at that time? A. That is right. He said ‘I will try to get that with mine.’ That 80, the north 80 of the Todd Brothers at that time. Then he was going to rent me the pasture and I wouldn’t have to drive them around.”
This is clear, positive, undisputed testimony and shows most clearly and convincingly that Harry considered this land as his.
It is most difficult to understand how the majority ean accept as satisfactory, clear and convincing evidence the shifting positions of appellants. If they could not make up their own minds how are we to do it for them? In their original petition they allege that the ownership of the entire 670 acres and ail of the personal property was in thirds. In their Second Amendment they allege their interest in the north 160 acres to be two thirds, three fourths in the South 410 acres, and two thirds in the 100 acres. In this same amendment they claim two thirds of the personal property, alleging one fourth as belonging to appellees and that the remaining interest belonged jointly to all of the parties. In their Third Amendment they changed their claim of ownership in the 100 acres from two thirds to three fourths. In their Fourth Amendment they admitted legal title to the 100 acres to be in Harry G-. Todd and for the first time alleged that he held title in trust and that the appellees were entitled to only one fourth of the 100 acres.
The question confronting us is whether or not the deed of December 30, 1937, created a resulting or constructive trust in favor of the grantors, Elmer, Thomas and Floyd G. Todd. No *1098resulting trust arises in favor of the transferor where he transfers his own property without consideration to another. This court has so held in the recent case of Shaw v. Addison, 239 Iowa 377, 389, 390, 28 N.W.2d 816, 823, where the court said:
“But the rule that a prima-faeie case of resulting trust is established by showing the consideration moved from the claimant has no application with respect to these transfers for two reasons. In the first place, in both instances the decedent transferred his own property. The rule only has application in the purchase of property where the title moves direct from the seller to one who does not furnish the consideration. There is no rule of law that creates a presumption of resulting trust in transferor’s favor when he transfers his own property to another without consideration. The rule is thus stated in Restatement of the Law of Trusts, section 405:
‘Where the owner of property transfers it without declaring any trust, the transferee does not hold the property upon a resulting trust although the transfer is gratuitous.
‘* * # where a transfer of property is made without consideration, the inference is that the transferor intends to make a gift to the transferee, not that he intends that the transferee should hold the property for the benefit of the transferor. This is true even though it appears in the instrument of conveyance that no consideration is paid for the conveyance.’ ”
Before appellants are entitled to prevail in this case they should show by competent, admissible evidence that an express trust was created at the time of the execution of the deed. The degree of proof required to establish an express trust has been many times clearly stated by this court. Sinclair v. Allender, 238 Iowa 212, 223, 26 N.W.2d 320, 327, states the rule as follows : “ ‘One of the parties to the transaction being dead, the proof should be clear, unequivocal and without doubt and uncertainty.’ ”
Appellants have fallen far short of meeting this burden. I would affirm.
Larson, Hays and Thornton, JJ., join in the dissent.