Court Opinion

ID: 3888786
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:18:03.702713+00
Date Added: 2024-06-11T07:42:08.050726
License: Public Domain

This is an action in equity, and "the court will look at the facts and circumstances surrounding the transaction, regardless of mere matters of form and determine therefrom the real nature of the transaction." Watt v. Morrow, 19 S.D. 317, 103 N.W. 45, 47.
The facts in this case are that Ella Steele sold this land to John W. Steele and Sarah Steele in equal shares, on an executory contract, for a consideration of $5,652 payable in installments. The purchase price for John W. Steele's half interest has been paid from funds in which he also had a half interest. John W. Steele was insolvent when the contract was made and has been insolvent ever since. His obligation to plaintiff, now in judgment, existed when the contract was made and has never been paid. Ella Steele did not give the property away, but sold it for a valuable consideration. Since the consideration has been paid John W. Steele is now entitled to a deed conveying his half interest in the property. The contract however contains a provision to the effect that the interest of John W. Steele is held in trust for his two minor daughters. These daughters have never paid anything to any one for an interest in this land. The land was bought and paid for with John Steele's money, and to the extent of his investment it is his property subject to his debts, existing at the time the investment was made. As this court said in Smith v. Tosini, 1 S.D. 632, 48 N.W. 299, 302: "She suffers nothing from such a decree. The law simply takes the money, or the property into which it has been converted, which he has *Page 618 
attempted to give to her, and subjects it, or so much of it as may be necessary, to the payment of his debts. It uncovers the fraudulent donation, and exposes it to the view and reach of his creditors."
If the conveyance had already been made to the father and by him to the daughters the rule stated in Dorrington v. Jacobs,213 Wis. 521, 252 N.W. 307, 91 A.L.R. 737 and annotation 741 would apply.
Respondents argue that the minor daughters are obligated by the contract to reimburse the father for his investment in the property, less rental for the period of his occupancy. In my opinion this argument is unsound for the following reasons: First; John W. Steele bought the land and promised to pay the purchase price. Second; the contract gives possession of the property to John W. Steele, the purchaser, not to the daughters, and contains no obligation to pay rent during the period that the contract remains executory. Third; the daughters were six and eight years of age when the contract was made, and the record shows no acceptance of the benefits of the so-called trust on behalf of the minors, nor the assumption by the minors of the obligation of the father to pay the purchase price of the land.
For the reasons stated I believe the judgment should be reversed.