HILLIARD v HILLIARD
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92-225 NO. IN THE SUPREME COURT OF THE STATE OF MONTANA 1992 MILTON J. HILLIARD, HILLIARD, a/k/a J. a/k/a MEL J. HILLIARD, Plaintiff and Respondent, LaDONNA M. HILLIARD, individually as Personal Representative of ESTATE OF HARLAN F. HILLIARD, Defendant APPEAL FROM: and the Deceased, and Appellant. District Court of the Nineteenth In and for the County of Lincoln, The Honorable Robert S. Keller, Judicial Judge District, presiding. COUNSEL OF RECORD: For Appellant: Donald For L. Shaffer, Attorney at Law, Libby, Montana Respondent: William Montana A. Douglas; Douglas Submitted on Briefs: Decided: & Sprinkle, October December Libby, 14, 15, 1992 1992 Justice John Conway Harrison This is Lincoln an appeal County, Appellant after real (Milton) and ordered in trust complaint to quiet the property in Robert that Keller presiding. appeals Milton a constructive theory trust in his proposed of in his by the found. brief these Thompson v. Steinkamp even though We affirm. the Gitto that 239 316, 815 concludes trust' is be disturbed." trust 120 Mont. case upon (1989). Milton not act or basis 249 Mont. a constructive (1947), However, 'resulting and should held wrongful Court, In He also of law. v. a trust. benefit. (1991), of whether appellant are Gitto Court LaDonna argues against as authority, his to this grounds that or other although lower upon reasonable a 1947 case, 1018, is to him. conclusions of fraud such, trust Further, In her brief, Hilliard J. seem unclear for 47, 778 P.2d 906; Howard v. Dali0 predicated she held Milton asserted Mont. finding found that or a constructive a constructive "a entered Court which that a judgment respondent trust title, any evidence P.2d 1150. S. the parties not make any allegations present District, her to convey the property his that Judicial for a resulting of the Court. Nineteenth (LaDonna) at the outset case involves included the Opinion in which the District property We note the Honorable LaDonna Hilliard certain he did from the a bench trial this delivered involved and cites 475, 187 P.2d a resulting trust. We also whether it note that the found a resulting District trust Court did not make it or a constructive 2 trust clear in this matter. In had created, been resulting that its conclusions but trust or "LaDonna would to of party holding the real Section intent of and either the found in trust--to this resulting Court court then stated when she were to for with court spoke dealing MCA. The court MCA, finding that Frauds. then this However, resulting it which to the with cited $j§ action did trust--or clearly constructive when intent to enrichment also 72-33-218, in permitted unjust dealing The indicate Milton The if a was not cite § 72-33-219- type of trust it a theory of case. Because was We look 5 72-33-218--purchasemoney -constructive trust We look of a trust the MCA. Statute that whether enriched 72-33-208(3), by found trust. property Section trusts. barred the court state property." parties. 72-33-220 the not 72-33-219, the resulting not did be unjustly title trusts. it law, a constructive retain the of trust, actually LaDonna made findings and the court and restate 1. prevent defended on that had proceeded Although appellant them Do the Milton presented that theory, case theory, on and we will speak theory four issues as if the District alone. on that raises his on appeal, the parties we combine as follows: clean hands from claiming doctrine and other a resulting principles trust on the finding that of equity property in question? 2. trust Did had been In August the District Court err in a resulting created? 1987, Milton filed a complaint 3 against LaDonna and Harlan's estate located seeking in Lincoln son. to quiet giving Harlan time his attorney own name to prevent rise placed certain this complete testified that a joint Hilliard knowledge tire (the at Coles). as space for to was purchased payment time shop. began in a At property in his Therefore, on it. When Milton guitclaim he sold deed to the money. holdings in Oregon. from those Bank of Libby Once again, He sales in under the name of the purpose LaDonna denies Libby, was to having any and establish the piece was owned by Carl the property The terms price Montana, a suitable with a and Velmeda Cole a house, of the contract period. and LaDonna's account included of property--the for as well deed were a $10,000 down payment and equal over a ten-year in Harlan's came from holding he received move to here--which At that installments his own name. He located $25,000 as the purchase monthly 1987. account. store. a tire 10, ended in divorce. with all $23,800 in his intended issue was Milton's initially name. received at the United assets of that Milton property Milton and LaDonna Hilliard." putting retail him liquidated bank account avoid in Harlan's provided he put the property on April matter from levying property eventually died him to avoid ex-wife Harlan (Harlan) second marriage the transaction. Milton "J. real property, to this advised his real and is now LaDonna Mack. Oregon in 1971 when Milton's that certain Hilliard wife. remarried The incidents to Harlan County. LaDonna was Harlan's LaDonna has since title Milton 4 In 1974 the property names, but the $10,000 established. down The $13,800 remaining in the construction executed of a tire a quitclaim testified for account that store deed and Harlan off. was recorded. at that for was paid and LaDonna Milton when the contract off on February Coles to Harlan not receive did the the 4, and LaDonna quitclaim deed time. On August reciprocal 20, wills If spouse. 1984, in which neither the property their Milton pay Harlan was to be delivered deed from the However, to gave a copy to Milton. The contract and the warranty used on the property. the original deed was paid 1982, was partially all and property spouse survived, at issue children. Harlan here if In the event LaDonna, he was to receive on April 10, 1987 without the property delivering quitclaim deed would be forthcoming. Milton is filed only this entitled that suit to a life both assured title. estate Harlan Harlan quitclaim She denies to quiet surviving including in question. LaDonna mutual was devised survived the original Milton Milton testified property, was not alive, Milton Milton. executed was to go to the specific Milton that LaDonna to and died deed to him that the this. LaDonna that claims in the property. I Do the prevent clean Milton hands doctrine from claiming and other a resulting principles trust of equity on the property in question? LaDonna contends seeking his to assets enforce that a resulting in Harlan's Milton trust cannot now when his come purpose and her name was to avoid 5 to the court in placing execution by his She quotes ex-wife. asked to determine Thompson, to extensively Fred buy real the the in her name. because "Ihe was paying alimony, to Thompson, 187 P.2d Thompson's the estate general transfers or defraud his want should rule his didn't that property creditors. at of another take equity will the intent in defendant he did to whom he crack at argued property not In facts. wife, a . because aid to hinder, one of who delay, Thompson: . The rule is likewise stated in the Restatement of the Law of Trusts, section 422, as follows: "Where the owner of property transfers it inter vivos upon an intended trust which fails for illegality, a resulting trust does not arise if the policy against permitting unjust enrichment of the transferee is out-weighed by the policy against giving relief to a person who has entered into an illegal transaction." As stated in the Comments in the Restatement, 'I. . . It is impossible to state a definite rule which will determine in all cases whether a resulting trust will be imposed or not, since the court will consider all the circumstances involved in the particular case." 6 the that The general rule is as contended for by defendant but it is not a universal rule. Thus in Scott on Trusts, vol. 3, section 444, it is said: "Although a resulting trust ordinarily arises where A purchases property and takes title in the name of B, A may be precluded from enforcing the resulting trust because of the illegality of his purpose. If A cannot recover the property, B keeps it and is thereby enriched. The question in each case is whether the policy against the unjust enrichment of the grantee is outweighed by the policy against giving relief to the payor who has entered into an illegal transaction. . was that The defendant the Court the testified second to with We said money to his 1020. this similar and back be entitled a court to gave have where very A witness to come not under decedent, this property."' Thompson same question Thompson, property from 187 P.2d Thompson, Restatement In (Second) holding discretion no 1021-1022. of Trusts that in finding the no creditor These rules a resulting Court no evidence against creditors, including on the his true today. abuse its in Thompson, we noted trust did not that the decedent's had been defrauded. is hold § 422. District had been presented claims there at Likewise, record ex-wife, in that by estate the present Milton following and that case, defrauded his any attorney's advice. LaDonna also he is allowed worked argues that to keep the property on the construction memorandum to Judgment, Milton its of the Findings the District of Court would be unjustly because tire Fact, Harlan shop. enriched supervised We disagree. Conclusions if and In a of Law and added the following: It would appear that Harlan assisted his father in constructing the building initially and in the construction of two additions which were made to the property. There is no evidence indicating that the Plaintiff intended to make a gift of the property to Harlan and LaDonna. The evidence does however tend to suggest that the work done by Harlan was intended as a gift to his father. Milton evidence than financed does not to assist his not be unjustly this do not property establish father that and the Harlan in the matter. improvements. intended The anything Therefore, Milton and other principles other will enriched. We hold that equity the the clean prevent Milton hands doctrine from property. 7 claiming a resulting trust of in Did the District Court err in finding that a resulting trust had been created? As noted above, the implied trust involuntary or established by evidence free from doubt. P.2d 991. 988, Therefore, MCA, which questions this requires of Court fact will the record them. Gitto, Neither statute in this Hubbard (1979), matter Court and law. We are disturb the review also lower shows a decided in nature. by 5 3-2-204(5), and guided must be 320, 325, 602 equitable we are guided to an and practically 184 Mont. are that Trusts convincing trusts this this not unless is clear, Involuntary in reviewing concluded had been created. that Eckartv. Court District determine both by the preponderance that findings court's rule of fact of evidence against 778 P.2d at 908. the parties case. nor That the statute court cited provides the controlling in pertinent part: 72-33-218. Purchase money resulting trust. (1) Where a transfer of property is made to one person and the purchase price is paid by another, a resulting trust arises in favor of the person who paid the purchase price. (2) following Subsection (1) circumstances: does not . . . apply in any of the (b) whenever the transferee is a spouse, child, or other natural object of the bounty of the person who paid the purchase price: . . . (3) Subsection (2)(b) does not apply if the party paying the purchase price manifested an intention that the transferee should nothavethe beneficial interest in the property. Subsection money resulting (1) trusts. states the general As noted 8 above, rule regarding Milton placed purchase $23,800 in an account $10,000 with of the funds the purchase on the contract in that for was placed Subsection (2) this subsection creates a gift. showing that this However, the payor established of sold property. consistent located points the a gift that negotiations. improvements in the for that This transaction a rebuttal by the transferee by guitclaimed Milton placed it back Milton for Cook was not Milton the tire paid for his property in its to him when Milton Libby wholly that purchase. he LaDonna that he was the property present the is testified at the property shop and two additions 9 that and Harlan from Roy Cook who testified Mr. 249 in followed Also, and establishing where Milton clear (1991), of Lettenqarver and LaDonna were discussing Further, including that be overcome Oregon and negotiated However, inapplicable and son. The evidence 471. practice. testimony when Harlan Coles. must The procedure property to the present the with (1) an intention whereby name and Harlan Therefore, interest. begins Harlan's that statute. (3) provides In re the Estate a gift name. for payments no dispute father presumption manifested a practice the between subsection 96, 813 P.2d 468, was not is makes subsection a rebuttable evidence. 92, There (1) of this occurred The presumption Mont. Coles. also made all subsection not have a beneficial convincing Milton and LaDonna's transaction created should property. seemingly showed that were used as down payment in Harlan's within because account deed to the case falls The evidence Bank of Libby. of the Coles' the property this United with final and all to the shop. Milton also taxes collected all and maintained as his the own by taking and using it for On the the exclusive his expenses associated evidence that they establish of that Further, original would between admits Harlan and to show and LaDonna's manifested facts intended the renters, of clearly was was the a different intent: different clearly resulting trust of to for of light tax the convincingly not that the the property. dealings present between during their wills, which the Harlan we do not look and LaDonna, to intent. Milton's establish to Milton's the an understanding have he survived perspective, we look facts if in and Although property. only the presented property doubt evidence Milton she of deed and statement are that none parties on the to do with to Milton a quite property here. quitclaim that concerning tend and the bore Both and property money of the LaDonna she had nothing Milton the a shadow The and Milton left The cast forthcoming that conversations insurance excepting property. was not copy and depreciation record. be Harlan LaDonna not a gift the the claimed does evidence the treated possession, Harlan with other all business. hand, This and paid And Milton property. other purposes. rents that Harlan's actions intent. and convincingly was intended Affirmed. 10 and created. a purchase
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