Trovato v. Walsh

363 Mass. 533 (1973)

295 N.E.2d 899

JOSEPH TROVATO vs. PAUL T. WALSH & others.[1]

Supreme Judicial Court of Massachusetts, Middlesex.

February 6, 1973.

May 4, 1973.

Present: TAURO, C.J., QUIRICO, BRAUCHER, KAPLAN, & WILKINS, JJ.

David Goldman for the plaintiff.

David W. Walsh for the defendants.

BRAUCHER, J.

The plaintiff appeals from a final decree declaring that certain premises in Somerville are situated in an owner-occupied two-family house excepted from rent control. St. 1970, c. 842, § 3 (b) (6). The trial judge made findings, rulings and an order for decree, and the evidence is reported. We summarize the findings.

The defendant, Edith I. Walsh (Edith), now age seventy-six, and her husband acquired the premises, a two-family house, in 1923 as tenants by the entirety. Since then she has lived continuously in the downstairs apartment; her husband died in 1955. In 1964 she conveyed the premises to her son, the defendant Paul T. Walsh (Paul), now age thirty-three, to manage them "as her agent." He lived in the upstairs apartment with his wife, the defendant Irene B. Walsh, and their children until they moved to another residence in 1966. The plaintiff with his wife and seven children moved into the *534 upstairs apartment in 1966 as a tenant at will. Paul showed the apartment to the plaintiff and made all rental arrangements; rental payments were made to Paul.

In June and July, 1970, the plaintiff paid a monthly rent of $125. This was increased to $145, effective September 1, 1970. The plaintiff agreed and has since paid the increased rent. On January 1, 1971, rent control took effect in Somerville, and rents were rolled back to their June, 1970, level. St. 1970, c. 842, § 6. Thereafter, Paul explained the circumstances to the secretary of the Somerville rent control board and was told the premises were covered by rent control so long as he held the title and was not an occupant. He then registered the premises, naming himself and his wife as landlords, and incorrectly recording the June, 1970, rental as $145 instead of $125. In August, 1971, the plaintiff learned of rent control and discovered the incorrect rental recorded on Paul's registration form. At the suggestion of the board, the plaintiff sent a letter notifying Paul of his intent to pay a monthly rent of $125 effective January 1, 1971. On August 31, 1971, Paul conveyed the premises back to Edith.

The judge concluded that in 1964 Paul took only naked legal title to the premises, without any monetary consideration therefor, upon the express understanding that Edith was to be the beneficial owner. Since she was at all times the beneficial owner, he ruled that the premises were excepted from rent control as "owner-occupied" under § 3 (b) (6) of the statute, notwithstanding the fact that Paul held record title. In all other respects, the final decree dismissed the plaintiff's bill of complaint. On appeal the plaintiff argues, first, that Paul was the owner for the purposes of the rent control statute, and, second, that his reconveyance to Edith was undertaken solely to defeat the purposes of the statute and was of no effect. In the view we take of the case, we need deal only with the first argument.

1. The plaintiff first attacks the finding that Edith was the beneficial owner, relying in part on the statute *535 of frauds, G.L.c. 259, § 1. That statute was not pleaded, and in any event it is inapplicable. Oral trusts of land are rendered unenforceable by G.L.c. 203, § 1, but that statute does not prevent the parties from recognizing the oral understanding by conveying the land in accordance with it. Perkins v. Hilton, 329 Mass. 291, 293-294. See Young v. Paquette, 341 Mass. 67, 76. In general third parties may not take advantage of the statute of frauds. Hoffman v. Charlestown Five Cents Sav. Bank, 231 Mass. 324, 329. See Restatement 2d: Contracts (Tent. drafts Nos. 1-7, rev. and edited., 1973) § 218; Restatement 2d: Trusts, § 51. So far as the plaintiff attacks the judge's findings of fact, they are not plainly wrong, and we accept them. Artemis v. Malvers, 322 Mass. 136, 137. Krasner v. Krasner, 362 Mass. 186, 187-188.

2. There is room for doubt whether "owner" in the exception of "owner-occupied" two-family houses from rent control refers to beneficial ownership or to legal or record ownership. See Kirby v. Assessors of Medford, 350 Mass. 386, 390. Compare Breare v. Assessors of Peabody, 350 Mass. 391, 392-393; Assessors of Cambridge v. Bellissimo, 357 Mass. 198, 199-200. The beneficial owner need not be the record owner in order to maintain an action as landlord to recover possession. Connors v. Wick, 317 Mass. 628, 630. The reasons for the exception are suggested in Marshal House, Inc. v. Rent Control Bd. of Brookline, 358 Mass. 686, 694-696. They turn on the facts that the excepted landlords "live with only a few tenants and have to get along with them on a day to day basis," that they have "pride of ownership," that "the premises are not only a business property but also their home," that "they live there," and that they "are not in the business of real estate but are merely renting out portions of their homes not necessary for their own day to day living."

Such facts relate more to beneficial ownership than to legal or record ownership. Their force is somewhat weakened if the beneficial owner turns over the management *536 of the rental portion to a professional real estate agent. In the present case there was undisputed testimony that the agent-son of the beneficial owner was a plumber, and there is no indication that he managed any other real estate. In any event, the statute does not distinguish between landlords or agents who are professionals and those who are amateurs. It is suggested that there may be some administrative convenience in looking solely to record ownership, but that would seem to invite a nonoccupant landlord to evade rent control by transferring record ownership to a tenant who resides in the two or three family dwelling.

We think the statute refers to beneficial ownership. It follows that the judge correctly ruled that the premises were "owner-occupied."

3. The plaintiff contends that the inequitable conduct of the defendants bars them from seeking declaratory relief. So far as Paul's registration of the premises as premises subject to rent control, with Paul and his wife as landlords and a rent of $145 in June, 1970, may have misled the plaintiff to his injury, the elements of equitable estoppel may be made out. Such an estoppel could not subject the premises to rent control, but it might bar the defendants from violating the provisions of the rent control statute designed to guard against retaliatory eviction. St. 1970, c. 842, § 9. Compare G.L.c. 186, § 18, inserted by St. 1969, c. 701, § 1; G.L.c. 239, § 2A, inserted by St. 1969, c. 701, § 2. See McLearn v. Hill, 276 Mass. 519, 524. The record on this appeal is not such as to permit us to make the findings necessary for such a conclusion, but our decision does not foreclose the assertion of estoppel in any pending or future action to recover possession of the premises.

Decree affirmed.

[1] Irene B. Walsh and Edith I. Walsh.