Court Opinion

ID: 9630240
Source: CourtListenerOpinion
Date Created: 2023-08-22 10:06:00.070817+00
Date Added: 2024-06-11T09:40:50.508309
License: Public Domain

HOWE, Associate Chief Justice
(concurring in the result):
I concur in the result. The most troubling issue raised by appellant is whether the trial court erred in holding that Boulder Mountain Land and Cattle Company was a bona fide purchaser of the ranch from Ruth. On or about July 8, 1966, a stockholders’ meeting of the Wayne Wonderland Development Association, Inc., was held at which Robert, Ruth, and their mother, Myrtle, were in attendance. The written minutes of the meeting, which were signed by all three of them, reflect that they entered into an agreement whereby Ruth and Myrtle surrendered their shares to the corporation in consideration of conveyance to them of certain tracts of corporate real property. Ruth received two parcels; Myrtle was to receive three parcels, including the Torrey home. She agreed to hold her properties in trust for Robert and Ruth, but with the right to sell them for living expenses, if necessary. These conveyances to Ruth and Myrtle were stated to be “as full and final payment for [their] interest in the corporation.” All five properties were particularly described in the minutes, which were recorded in the office of the Wayne County Recorder on July 25, 1967. In the agreement, Robert agreed to “take over the Wayne Wonderland Development Association, Inc. and all remaining assets therein described in the Articles of Incorporation,” except for the properties to be conveyed to Myrtle and Ruth.
Following that meeting, Robert became the sole stockholder until 1973, when Myrtle expressed the desire to reeonvey the Torrey home to the corporation in exchange for 20,000 shares of stock. (Actually, the Torrey home had never been conveyed out of the corporation so reconveyance was unnecessary.) She was issued the stock, which gave her a 25 percent ownership. Robert then had a 75 percent ownership of the stock.
When Myrtle’s estate was administered in California in 1982, the probate court, on the strength of the 1966 stockholders’ agreement, held that Myrtle’s attempted devise of the Torrey home to Robert failed because she had placed that property in trust for both Ruth and Robert. Thus, the court decreed that Ruth and Robert were entitled to that property as tenants in common. However, the court apparently was not informed that the 1966 agreement gave the ranch to Robert by virtue of his being the sole remaining stockholder, entitled to the remaining corporate assets. In apparent ignorance of this provision, the court decreed that since the corporation was no longer in existence, the ranch, which was still held in the corporate name, belonged to Myrtle’s estate since she had equitable title by virtue of the fact that the property had been conveyed to the corporation by her late husband. Being part of Myrtle’s estate, the ranch was distributed to Ruth under the residuary clause of Myrtle’s will. A copy of the California decree, together with a copy of the decree of distribution entered by the District Court for Wayne County, Utah, which confirmed the distribution of the ranch to Ruth, was recorded in the Wayne County Recorder’s office. On the strength of these two decrees, Boulder Mountain Land and Livestock Company purchased the ranch from Ruth. The trial court held that Boulder Mountain was a bona fide purchaser because it had no notice, either actual or constructive, of Robert’s interest.
The troubling aspect of this purchase is that the Wayne County land records contained both the California and the Wayne County probate decrees of distribution showing title in Ruth, but also contained the minutes of the 1966 stockholders’ agreement whereby it was agreed that “all remaining assets” would remain in the corporation, which would be “taken over” by Robert. The ranch was one of those “remaining assets” but was not specifically referred to or described in the minutes. (The five properties which were conveyed *1181to Ruth and Myrtle were particularly described in the agreement.)
With this state of the record, was constructive notice given of Robert’s interest in the ranch by the recording of the minutes? There is no doubt that had the minutes contained a legal description of the ranch, there would have been constructive notice of Robert’s interest. However, without the legal description, it is likely that the minutes could not be indexed in the recorder’s office as pertaining to the ranch property. The trial record before us is silent on this point, and I must presume that it was because of the absence of the legal description that the trial court impliedly found that the recording of the minutes did not give to Boulder Mountain constructive notice of Robert’s interest.