Court Opinion

ID: 9587866
Source: CourtListenerOpinion
Date Created: 2023-08-21 23:27:19.948064+00
Date Added: 2024-06-11T17:51:46.915189
License: Public Domain

HOWE, Justice
(dissenting):
This case is controlled by the rule of law stated in Section 442 of the Restatement of Trusts 2d (1959), which reads as follows at p. 402:
*607Where a transfer of property is made to one person and the purchase price is paid by another and the transferee is a wife, child or other natural object of bounty of the person by whom the purchase price is paid, a resulting trust does not arise unless the latter manifests an intention that the transferee should not have the beneficial interest in the property.
We recognized and applied the rule in Anderson v. Cercone, 54 Utah 345, 180 P. 586 (1919). In Comment A to Section 443 at p. 404, it is stated that it is the intention of the payor at the time of the transfer, and not at a later time, which determines whether a resulting trust arises. “The conduct of the payor and of the transferee subsequent to the transfer, however, may be such as to show that at the time of the transfer the payor did not intend to make a gift to the transferee.”
The plaintiff’s case must rise or fall by the application of the foregoing rule of law. If the evidence does not support a finding by clear and convincing evidence that the plaintiff manifested an intention that his wife should not have the beneficial interest in each piece of property as it was acquired, thereby rebutting the inference of a gift, the plaintiff is entitled to no relief. A constructive trust does not arise under those circumstances and the majority opinion is in error in so holding. The law presumes that a gift was intended and unless that inference is rebutted, a resulting trust does not arise because the payor gave the transferee the full beneficial interest. That being so, a constructive trust cannot arise either since the payor reserved no equitable interest to himself as the majority opinion maintains.
In the recent case of In the Matter of the Estate of Ruth M. Hock, Deceased, v. Fennemore, Utah, 655 P.2d 1111 (1982), Jack Fennemore brought suit against the personal representative of his sister’s estate to impress a purchase money resulting trust upon certain real estate to the purchase of which he claimed to have contributed. Although title had been taken in the name of the deceased, the trial court impressed a constructive trust upon the property. On appeal to this Court we held that a purchase money resulting trust arose under those circumstances and not a constructive trust. Since the payor and the transferee were siblings (and not husband and wife as in the instant case), Section 442 was not applicable. Instead, Sections 440 and 441 controlled, raising a rebuttable inference that no gift was intended and thus a resulting trust arose in favor of the payor (Jack). We affirmed the trial court’s finding by clear and convincing evidence that a resulting trust arose in favor of Jack. The Supreme Court of California refused to impress a constructive trust in Altramano v. Swan, 20 Cal.2d 622, 128 P.2d 353 (1942), where it stated “a constructive trust does not arise upon the transfer of property from a husband to a wife without consideration.” The court held that the rule found in Section 442 of the Restatement of Trusts was controlling, citing many earlier decisions of that court.
The rule stated in Section 442 that a donative intent is presumed has universally been followed by the courts in this country, both prior to and since the promulgation of the Restatement of Trusts. For cases relying on the rule in husband to wife transfers (and sometimes broadening the rule to wife to husband transfers) see Anderson v. Cercone, supra; Blaine v. Blaine, 63 Ariz. 100, 159 P.2d 786 (1945); Peterson v. Massey, 155 Neb. 829, 53 N.W.2d 912 (1952); Nussbacher v. Manderfeld, 64 Wyo. 55, 186 P.2d 548 (1947); Tarkington v. Tarkington, 45 N.C.App. 476, 263 S.E.2d 294 (1980); Walter v. Home National Bank & Trust Co. of Meriden, 148 Conn. 635,173 A.2d 503 (1961); Scanlon v. Scanlon, 6 U1.2d 224, 127 N.E.2d 435 (1955); Norman v. Kernan, 226 Wis. 78, 276 N.W. 127 (1937); Scott v. Currie, 7 Wash.2d 301, 109 P.2d 526 (1941); Altramano v. Swan, supra. See Bogert, Trusts and Trustees, 2d Ed., § 459 (1977); Scott on Trusts, Vol. 5, § 442 (1967).
The same rule that infers a gift likewise applies to the improvements made to the several properties by the labor and money of the plaintiff. Aycock v. Bottoms, 201 *608Ark. 104, 144 S.W.2d 43 (1940); Hoef v. Hoef, 323 Ill. 170, 153 N.E. 658 (1926); Lewis v. Bowman, 113 Mont. 68, 121 P.2d 162 (1942), overruled on another ground, Mont., 495 P.2d 591 (1972).
The majority opinion grants relief to the plaintiff under Section 160 of the Restatement of Restitution (1937), which states at p. 640:
Where a person holding title to property is subject to an equitable duty to convey it to another on the ground that he would be unjustly enriched if he were permitted to retain it, a constructive trust arises.
That rule of law does not here apply because the law infers that a gift was intended by the plaintiff when he placed title to the property in his wife’s name. Unless he can rebut that inference, which he failed to do here, he has no equitable or beneficial interest because he reserved none. His wife’s estate is under no equitable duty to convey it to him; nor is her estate unjustly enriched by retaining it. The donee of a gift is always enriched thereby but no one would claim that he is unjustly enriched. See Kohr v. Kohr, 271 Pa.Super. 321, 413 A.2d 687 (1979), where the court rejected the application of Section 160 of the Restatement of Restitution when the evidence did not rebut the inference of a gift from mother to son, and establish that a resulting trust was intended by her.
At the trial the defendant moved to dismiss the plaintiff’s case on several grounds, including that the evidence did not establish a resulting trust. The trial court apparently granted the motion as to a resulting trust, but made no written finding of fact as to whether the inference of a gift had been overcome. In his bench ruling, which apparently granted the defendant’s motion to dismiss as regards a resulting trust, the court said:
... but a resulting trust does not result merely because the husband puts up the money to purchase property in his wife’s name. Mr. Park’s testimony, as I recall it, with regard to why this was done, even when they were younger and first started to acquire property, apparently the decision was made by the two of them that he was going to die first. And therefore, they ought to put all of the property in her name. I think that I paid some attention to that because to me it’s quite important as to the reason that it was done.
I interpret that statement of the trial judge to mean that he concluded that Mr. Park intended that his wife should have the full beneficial interest in the several properties, since both he and she believed that he would die first. This assumption was based on the fact that he was in poor and frail health. Having so ruled, and having failed to make a finding of fact that the inference of a gift was rebutted, the trial court should have dismissed the plaintiff’s complaint and not granted him relief under inapplicable rules governing constructive trusts.
The majority opinion cites two cases in support of imposing a constructive trust but those cases are distinguishable. Yohe v. Yohe, 466 Pa. 405, 353 A.2d 417 (1976) involved a husband suing his wife to set aside a deed which he signed conveying to her his interest in their jointly held residence. He claimed that he signed the deed believing it was a new deed they were getting as a consequence of their paying the mortgage in full. The court held that it was a question of fact whether a confidential relationship between husband and wife existed which would have required her to disclose material facts concerning the deed. The court remanded the case for a full eviden-tiary hearing on that question. Obviously, the case dealt with an entirely different problem than we have in the instant case. Adams v. Jankouskas, Del.Supr., 452 A.2d 148 (1982) involved a similar fact situation to our case. The court affirmed a lower court finding that the husband turned over his earnings to his wife “in obvious trust” because they had agreed that the survivor of them should have everything. The rule of Section 442 of the Restatement of Trusts 2d was not mentioned, but the lower court’s finding that a trust was intended supported its imposition of a “constructive or resulting *609trust” (without deciding which). A similar finding in the instant case that a trust was intended is completely lacking. In fact, the trial court’s bench ruling is to the contrary — that no trust was intended. There was no agreement here between Mr. and Mrs. Parks that the survivor was to have everything.
If this case is to be remanded to the trial court for the purpose of making adequate findings as to the value of plaintiff’s equitable interest in his wife’s estate as directed in the majority opinion, two important considerations should be observed upon remand:
First, the trial court should segregate those properties which were purchased with funds contributed either wholly or in part by Mr. Park from those properties which were acquired by inheritance or gift from Mrs. Parks’ mother or her estate. As to the latter properties, there is no basis in the law whatever for imposing any kind of a trust on them, even under plaintiff’s theory. Furthermore, as to the property which they originally took title to in their names as joint tenants but which Mr. Parks after-wards quitclaimed to her, no constructive trust would arise except under the circumstances stated in Section 44 of the Restatement of Trusts 2d where the transferee agrees to hold the property, or an interest therein, for the benefit of the transferor.
Secondly, in any property in which a constructive or resulting trust has arisen, the trial court should determine the extent of the interest which is subject to the trust. Although Mrs. Parks did not work outside of the home and had no income from employment, she contributed her full time and labor to the maintenance of the home and the small orchard and farm surrounding it. If Mr. Parks did not intend that she have the full beneficial interest in the properties to which he provided the purchase money, it is difficult for me to believe that he intended that she was not to have at least a half interest therein. Under that view of the evidence, a trust should not be imposed on more than one-half of the property. Her one-half should be free for her to dispose of by will as she saw fit. Comment B to Section 443 of the Restatement of Trusts 2d (1954) states at p. 404:
Where one person pays the purchase price for property which is transferred at his direction to another who is a natural object of his bounty, and it is shown that the payor intended to have a partial interest in the property, a resulting trust arises in favor of the payor as to such interest but only as to such interest.
Accord: Dougherty v. Duckworth, Mo., 388 S.W.2d 870 (1965).