Court Opinion

ID: 6569284
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:22:34.759714+00
Date Added: 2024-06-11T15:56:50.944256
License: Public Domain

CROCKETT, Justice.
I dissent. The majority opinion proceeds upon the patently erroneous assumption that the trial court based its judgment for the plaintiff upon the idea that the answers of Verdi White in the supplemental proceeding either “vested an interest” in the real property in favor of the White Corporation, or that his admission was such as it “could not be overcome” by his later testimony to the contrary. This fallacy is persisted in notwithstanding the fact that there is nothing whatsoever in the findings or judgment of the trial court to so indicate, and the fact that every effort has been made to make clear to the majority, that neither the judgment of the trial court, nor the former opinion of this Court, nor any advocate of them, so far as the writer knows, has ever contended that such evidence either “vested an interest” in favor of the White Company or that it was such that other credible evidence “could not overcome it.”
The plain and simple basis for the judgment of the trial court, and its affirmance in *398our former opinion, is that this admission against interest, made by Verdi White, who was also President and Manager of the Corporation, amounted to substantial evidence from which the trial court could infer and find that such company had an interest in the property.
i Ifiasmuch as Utah Co-op is entitled to a judgment lien on all of the real property owned by the judgment debtor, White Corporation, for the purposes of this action Utah Co-op stands in the shoes of White Corporation, and the trial court could properly proceed as if White Corporation were proceeding directly against Verdi R. White to assert its claim upon his interest in the property.
As the owner of the property, it cannot be denied that Mr. White was in a position to make an admission against his own interest in favor of the Company. It was both material and competent and I fail to see how it can be contended that it was not substantial. The issue before the Court was whether the White Corporation owned an interest, chargeable against whatever interest Verdi White had in the property. The judgment of the trial court expressly asserted that the lien would attach only against the interest of Verdi White. No rights of third parties, innocent purchasers, or even any interest of Verdi White’s wife are here at risk.
The majority opinion seems to lose sight of the atmosphere of a supplemental proceeding brought to discover property of a judgment debtor, a fact which the trial court was undoubtedly keenly aware of. As very often happens, Mr. White as the responding witness in the supplemental proceeding did not have the desired information. The hearing was continued for two weeks for the purpose of having him bring the records to show the financial status of the White Corporation. After that time had elapsed and the records were not produced, Gaylen S. Young, plaintiff’s attorney, examined Mr. White concerning said records as follows':
“ * * * the record I wanted was concerning the financial statement of the Company. You claim you haven’t got and can’t produce it? A. Correct.”
It was then that Mr. Young, apparently forearmed with information that the White Corporation had constructed a building upon property which Verdi R. White was buying personally, elicited from the latter- the admissions set forth in the majority opinion ending with,
"Q. And so you would say that that [$4600.] would be the interest of the corporation in that property? A. Yes.”
That testimony was introduced in the instant case as evidence that the White Corporation had an interest in the property. The fact pointed out in the main opinion that the admission was made subsequent to the filing of this suit, certainly does not in any way fortify the conclusion reached there, but on *399the contrary lends credence to the finding and judgment of the trial court, Mr. White having made such admission well knowing that this suit against his company was pending.
It is true that upon the trial of the instant action he testified to the contrary. But he was a self-interested witness and I see no reason why the trial court could not disbelieve him under the rule that when a witness is self-interested, or where there is anything inherently incredible, unreasonable or inconsistent in his testimony, it is not mandatory upon the trial court to follow it.1 Consistent with such rule, the trial court refused to find in accordance with his testimony at the trial but instead based its findings upon his admission at the prior hearing (the supplemental proceeding), and found that the White Corporation had spent $4600 in constructing a building on the property White was purchasing and decreed that the judgment of the plaintiff Utah Co-op, as creditor ■of the White Corporation, constitute a lien upon the purchaser’s interest which Verdi R. White owned in the property.
It cannot be contended that Mr. White’s testimony at the trial was undisputed. As above pointed out, it was opposed by his admission at the supplemental proceeding which was properly presented in evidence. It was material, competent and substantial evidence of the critical fact. At the time of the prior hearing Mr. White knew that the purpose of the supplemental proceeding was to discover property owned by the White Corporation for the purpose of satisfying the plaintiff’s judgment against it. If he had paid $1900 for materials in the building; $3500 on the mortgage and/or caused 42 lots to be transferred by his brother for the purpose of discharging his obligation to the White Corporation, all of these things occurred prior to the time he made the admission. Even if these things were done, it would not conclusively prove discharge of his obligation to the White Corporation for constructing the building on his property. There could have been other debts or reasons for such payments and transfers. He was an experienced businessman and he was represented at the hearing by able counsel, yet no explanation of his statement appears to have been made in the proceeding, nor at all until trial of the instant action wherein the judgment lien was being asserted against his property. It would be strange indee.d for him to say that the White Corporation had an interest in his property if obligation upon which the interest was based had in fact been offset by other payments.
The holding of the trial court is criticized as being based upon an expression of an opinion by a non-expert elicited from him by a leading question. Superficially this criticism may appear to have some merit but there are conclusive answers here. First no *400objection was made to the testimony on that basis. Second, and more important it should be considered in the light of the circumstances shown to exist in this case. It is often a difficult feat to uncover assets of an insolvent debtor, as White Corporation was, especially from the mouths of those whose property may go to pay the debt. Mr. Young, plaintiff’s attorney, apparently knew of the facts concerning the White Corporation building the building. Upon being cross-examined as a witness whether he remembered Verdi R. White’s testimony just as reported in this opinion, he affirmed that he did and further testified:
“In fact I questioned him for the purpose of bringing out this particular testimony, because I understood those were the facts.”
Mr. White was no novice in matters pertaining to real estate. He was the head of a business which the record shows involved hundreds of thousands of dollars in acquiring property, financing, building and selling homes. The ownership of property is nothing so mysterious nor inscrutable that it necessarily takes a title expert to testify concerning it. This is particularly true where one makes an admission against his own interest as to the ownership of property, Whether the White Corporation owned an interest in this property, is something which lay peculiarly within his own knowledge and with respect to which he could therefore testify. Wigmore states :2
“ * * * it is a mistake to suppose that an ‘expert’ must be a person professionally occupied upon the matter to be testified to. * * * It is sufficient here to note that the only requirement is that the witness must be fitted to acquire knowledge on the matter he speaks about; and if he is thus fitted, that it is entirely immaterial whether he acquired his fitness by being professionally concerned in such matters. * * * ”
The knowledge and experience of the witness usually go to the weight and credit to be given to his evidence rather than to its admissibility.3 Both the competency and the credibility of the defendant’s evidence were for the trial court’s determination, which will not be disturbed unless it appears that he was patently wrong.4 As indicated in the prior opinion of Mr. Justice Wade, it was the prerogative of the trial court to refuse to believe his testimony, given at this trial when his self interest was directly involved, and to find the facts in accordance with his prior admissions against his interest.
It is further urged that there is no proof of any writing evidencing an interest of the White Corporation in this property; that *401such interest, if it existed, must rest upon some parol arrangement between Verdi R. White and the White Corporation; that to recognize such interest would be in violation of the statute of frauds and also have dire effects upon record titles rendering it hazardous to rely upon them. It seems to he suggested if a written mortgage or contract between White and White Corporation had existed, such fact would in some way have aided the record title and those who might rely upon it.
It is not denied that the statute of frauds requires transfers of interest in land and contracts therefor must he in writing.5 But suppose such document does exist but that it is unrecorded. No one except the parties themselves would have any notice, actual or constructive, concerning it, yet it certainly would not be argued that it would not be enforceable as between the parties. The fact that such document was not recorded would not prevent the White Corporation (or its creditor, the Utah Co-op, which for the purpose of this action stands in its shoes) from enforcing its obligation against the interest of Verdi R. White. Its being enforced against him could give no concern nor cause any hazard to McCabe, the fee title holder, Strand, who purchased from Austin, nor any other person who might be relying upon the record title as it would not in any way adversely affect their interest. It would only affect that interest of Verdi R. White, the party to the agreement who knew all about it. We therefore fail to see why the trial court’s holding in this case should give anyone cause for alarm with respect to the integrity of land titles.
Neither White’s admissions nor other facts shown in evidence provide any basis for determination of whether White Corporation’s interest in the property was outright partial ownership or merely an equitable interest. Neither this fact, nor the fact that White himself had only an equity, that is a purchaser’s interest in the property, would prevent the judgment lien from attaching. In the early case of Unknown Heirs of Whitney v. Kimball, the Supreme Court of Indiana wrote:6
“Where the debtor * * * possesses an equitable interest in real estate, inasmuch as by law the creditor acquires by judgment, a lien on all real estate in which such debtor has the legal interest, equity in aid of the law, carries along the lien, and enforces it against real estate in which the debtor has only such equitable interest.”
Equity views equitable interests in realty as real property.
When White said that it did have an interest, the matter of the nature of the interest, or whether it was evidenced by writing, *402was pursued no further and the record here does not show what the interest of the Corporation in that property was. This does not compel a conclusion that there was no such interest, nor that there was no writing.
The prevailing opinion poses the proposition that: "equally consistent with the statements made by Verdi White and the relationship between him and the corporation are (1) a contract * * * that the building was to remain personalty; (2) that the building was consideration for the lease; or (3) an agreement to give a lien on the property for the amount expended.” This statement pre-supposes that any of those three possibilities are reasonable deductions from the evidence. They are said to be equal to the finding the court made, therefore it must follow that it is also reasonable. If it be admitted that the trial court had at least an equal privilege of making the. deduction he did, it also must be admitted that any slight weight in favor of his deduction would suffice, and that it was his exclusive prerogative to judge the weight of the evidence and to make any reasonable finding therefrom. He having made a finding which is. reasonable from the evidence, it is not within our province to weigh the evidence and cast ourselves in the role of fact-finder by surmising other facts the court reasonably could have found, and rule that he failed to choose the right one.
Should it be assumed that there was no such writing, such fact would not be controlling under the circumstances shown in this case. There is a very good reason why defendant cannot use the statute of frauds as a defense. We must keep uppermost in mind the fact that Verdi R. White was the president, manager and functioning officer of the White Corporation, and as such he had a fiduciary responsibility in handling its affairs.7 In any transaction with the White Corporation, especially where the fruits of the arrangement were to his own advantage, there reposes upon him the burden of showing good faith and fair dealing.8 It is undisputed that White was personally a purchaser of the property and there is competent evidence that the Corporation spent $4600 to put a building on this property which would remain there for Verdi R. White’s personal benefit, for which he recognized the Corporation had an interest therein. As the active manager of the White Corporation it would have been Verdi R. White’s duty to protect and properly secure its investment in the building by having a proper mortgage, lien agreement or other document prepared and executed for its benefit. If he' failed to discharge that duty for the White-Corporation, *403he certainly should not be permitted to take any personal advantage of his own dereliction in that regard. It would be a strange concept of equity and justice which would permit him to so act that his conduct would say in effect: “Yes, I, as the managing head of the White Corporation caused it to spend $4600 to put a building on property I am buying personally and I recognize that the Corporation has an interest in the property to that extent, but because you cannot prove a formal written arrangement to protect that interest, I will not pay the Corporation.” Such conduct would amount to at least constructive fraud, which it has been many times held that the statute of frauds may not be invoked to aid.9 Equity will not permit him to thus unjustly enrich himself, but will impose a constructive trust upon his interest in the property to protect the White Corporation,10 and its creditor, the plaintiff, which stands in its shoes. This is what the judgment of the trial court did.
For the majority opinion in this case to prate of “equities” seems anomalous in this case. I approve of being righteous about the matter, but we better see that we are “squared with the compass.” The indisputable fact is that the result reached in the main opinion permits the defendant to have the benefit of over a thousand dollars worth of materials furnished by the plaintiff without paying for them. This done by reason of the fact that the defendant’s corporation procured the materials, then went broke and' failed to pay the debt, and the benefits inured to the individuals who created and managed the corporation in such a way that this result eventuated. Whereas, the judgment of the trial court at least did that which would comport with my sense of justice: gave the plaintiff as the material supplier, recompense for the materials it furnished, and required Mr. White, who got the benefit thereof to pay for them.
Although the evidence upon which the trial court based his finding was admittedly thin, I believe we should reaffirm our former holding sustaining his judgment, but with certain modifications to safeguard the rights of third parties which need not be expressed in this dissent.
WADE, J., concurs in the dissenting opinion of CROCKETT, J.

. See Jones v. California Packing Corp., Utah, 244 P.2d 640; and authorities therein cited; Kelly v. Jones, 290 Ill. 375, 125 N.E. 334, 8 A.L.R. 796; 32 C.J.S., Evidence, § 1037, p. 1089; 20 Am. Jur. 1031.

. 2 Wigmore Evidence (1940) Sec. 555, p. 635.

. See Ibid., Sec. 555 ff.

. Ibid., Sec. 561 and authorities there cited ; Mary Jane Stevens Co. v. First Nat. Bldg. Co., 89 Utah 456, 57 P.2d 1099.

. 25-5-1 and 25-5-3, U.C.A.1953.

. 4 Ind. 546, 5S Am.Dec. 638. See 30 A.L.R. 504; 31 Am.Jur. Judgments Secs. 316, 324.

. Jansen v. Tyler, 151 Or. 268, 49 P.2d 372. See Jones Mining Co. v. Cardiff Mining & Milling Co., 56 Utah 449, 191 P. 426; 3 Fletcher, Cyclopedia Corporations (1947) Sec. 839; 19 C.J.S., Corporations, § 761.

. Glen Allen Mining Co. v. Park Galena Mining Co., 77 Utah 362, 296 P. 231; Clark v. Clark, 398 Ill. 592, 76 N.E.2d 446. See Fletcher, Cyclopedia Corporations (1948) Sec. 921.

. 4 Pomeroy, Equity Jurisprudence (1941) 144. See Renshaw v. Tracy Loan & Trust Co., 87 Utah 864, 367, 49 P.2d 403, 100 A.L.R. 872; Haws v. Jensen, 116 Utah 212, 209 P.2d 229, 232.

. Hawkins v. Perry, Utah, 253 P.2d 372, 375, wherein we stated, “Equity imposes a constructive trust to prevent one from unjustly profiting through fraud or the violation of a duty imposed under a fiduciary or confidential relationship.” See In re Munsell’s Guardianship, 239 Iowa 307, 31 N.W.2d 360, 376; American Railway Express Co. v. Houle, 169 Minn. 209, 210 N.W. 889, 48 A.L.R. 1268.