Jaussaud v. Samuels , 58 Idaho 191 ( 1937 )

It is only necessary to consider two of the points raised by appellants: First, that because the $1500, sole consideration for the tri-party agreement above set forth, emanated from appellants there ensued a resulting trust in their favor giving them a lien on the property in question, on the theory that where one advances all the purchase price for property with the understanding that he is to have the property or a lien or some interest therein, title though taken in the name of a third person will be held in trust for the person furnishing the consideration, citing Pittock v. Pittock, 15 Idaho 426,98 P. 719; Coughanour v. Grayson, 19 Idaho 255, 113 P. 724; 26 Rawle C. L. 1219; Smithsonian Institution v. Meech, 169 U.S. 398,18 Sup. Ct. 396, 42 L. ed. 793; Howe v. Howe, 199 Mass. 598, 85 N.E. 945, 127 Am. St. 516; and respondents virtually concede that as a general proposition of law the above is correct. As will be noticed from the authorities an essential and pivotal determinative feature is intent of the parties, not only must the purchase price or part thereof be paid by the one for whom the title is taken, though in the name of another, but it must have been the expressed or necessarily implied intention of the parties that title is so taken for the one advancing the money. If the money was advanced for some other purpose a resulting trust would not ensue.

Herein if the tri-party agreement constituted solely an option or right to purchase by appellants in the manner stipulated in the agreement, no resulting trust would follow. The court by his findings and conclusions held it to be an option agreement. If at the time the agreement was made, Humbird and the Spokane and Eastern Trust Co. had absolute title to the land, the $1500 was paid by appellants for the option, not that title should go to Humbird and the Spokane and Eastern Trust Co. to be held for appellants. The mere fact that part of the consideration went to the Bonner County Banks instead of Humbird and the Spokane and Eastern Trust Co. would not change the situation as appellants parted with value, detriment to them, direct benefit to Humbird and the Spokane and Eastern Trust Co. to the extent of $175, and if Humbird and the Spokane and Eastern Trust Co. were willing to grant appellants an option, because of benefit to the Bonner County Banks by payment to them of the $1325, such would not change the transaction from one in the nature of an option to a trust in absence of intention to that effect. (65 C. J. 141, 401; 66 C. J. 488.) The right granted appellants by the agreement, if an option, which the trial court found it to be, was to buy the property on certain installment payments and the $1500 was no part, of the to-be-paid purchase price. The case is thus clearly distinguishable from Reid v. Keator, 55 Idaho 172,39 P.2d 926, and cases cited and relied upon by appellants.

Appellants' second point is that the agreement constituted an extension or condition of the first mortgage necessitating foreclosure thereof. The answer alleging:

"That any title, right or interest acquired by T.J. Humbird and Spokane and Eastern Trust Company, by virtue of conveyance from the Bonner County National Bank, was a conveyance to them as trustee for the purpose of carrying into effect said agreement of January, 1935, and to preserve the mortgage held by them separate and apart from any interest that they acquired by such conveyance. That the only interest acquired by the said T.J. Humbird and Spokane and Eastern Trust Company, as trustee for H.C. Culver was that of trustee, a trust resulting by reason of the consideration therefor having been paid by the defendant, H.F. Samuels."

One asserting the transaction to be a mortgage must establish it by clear, satisfactory and convincing evidence. (Dickens v.Heston, 53 Idaho 91, 21 P.2d 905, 90 A.L.R. 944;Investors' Mortgage Security Co. v. Hamilton, 51 Idaho 113,4 P.2d 347; Wright v. Rosebaugh, 46 Idaho 526, 269 P. 98;Clinton v. Utah Const. Co., 40 Idaho 659, 237 P. 427; Shanerv. Rathdrum State Bank, 29 Idaho 576, 161 P. 90; Bergen v.Johnson, 21 Idaho 619, 123 P. 484.)

The agreement itself is capable of more than one construction. The major incidents thereof tending to establish the transaction as a mortgage are: The recital that the deed should not constitute a merger; the option price with interest thereon being identical with the mortgage; the recital in the deed from Humbird and the Spokane and Eastern Trust Company to Jaussaud that:

"In so far as the vendors may or might have any lien against these lands on account of a mortgage executed by H.F. Samuels and Ada J. Samuels, dated February 13, 1928, recorded in Book 20 of Mortgages, page 371, Records of Bonner County, Idaho, such lien is hereby released."

and retention of the mortgage and release thereof at a later date. On the other hand incidents tending to show the transaction to be a deed absolute and option are: The provision that H.F. Samuels has no interest legal or equitable but desires to purchase the property; the right given to Humbird and the Spokane and Eastern Trust Company to lease the premises, with permission given Samuels to occupy part of the premises, whereas if a mortgage he had a right as mortgagor to lease or occupy the whole tract; the declaration that it was a unilateral contract imposing no obligation of payment on Mr. Samuels, i. e., no continuing debt.

Appellants contend that there was inadequacy of price in that they claim the property to be worth $150,000 or more, that they had invested more than the amount of the mortgage in the property, and they had a chance to sell the property for more than the mortgage and the indebtedness. Closely connected with this incident is the financial condition of the grantors, that is, appellants. The showing in connection with this however and conclusions to be drawn therefrom are conflicting because while appellants take the position that, they were hard pressed for money they also urge they were solvent. On the other hand the second mortgage for $10,000 and interest had been foreclosed without appellants redeeming therefrom and apparently being unable to redeem therefrom, nor did appellants make the instalment payment of $10,000 by July, 1936, which would have kept alive their option, or been a payment on the first mortgage. The first mortgage had run since 1929 with only small payments thereon.

On the other hand, respondents or their predecessors in interest, contend appellants were insolvent and unable to respond in damages. If the price was inadequate, the value of the land being much greater, it would tend to show that appellants were not hard pressed, but had potentially a large asset available in the land. However, if the land had but little value and appellants had no other resources, they were hard pressed. Under these circumstances the trial court might have justifiably concluded either way.

The provisions with regard to sale of a portion of land by Humbird and the Spokane and Eastern Trust Co. and that appellants in the exercise of their option could demand conveyance to them only of such land as remained unsold, with credit for whatever amounts might be received therefrom, and any taxes paid by Humbird and the Spokane and Eastern Trust Co. would be included in the purchase price, might support either conclusion that the transaction was a mortgage or option; if a mortgage that appellants were consenting to the sale of their land; if an option that they would not have the right to demand on the exercise of the option, transfer of all original property.

There was no direct testimony that it was the intention of any or all of the parties to the tri-party agreement that it was to be a continuation of the first mortgage.

Giving full and complete consideration therefore to the determinative circumstances enumerated in Dickens v. Heston,supra, there was substantial evidence or lack of substantial evidence, depending upon the viewpoint, to support the negatively expressed finding of the trial court that the transaction did not constitute a mortgage, and the judgment should be affirmed.