Richtman v. Watson , 150 Wis. 385 ( 1912 )

The following opinion was filed June 4, 1912:

MaRshalu, J.

The Teal facts in this case are not in serious dispute on the evidence, and the controversy is governed by familial’- principles of written and unwifitten law.

The first proposition is this: If a person, having real estate, verbally forms a copartnership with others to conduct a particular business, such real estate being remote from and not suitable for nor intended to be used as'such, or in any form, in sucb business, agrees that it shall be considered part of the partnership property, does that transfer the title thereto in ■equity so that such partnership or the members thereof can acquire the legal title, adverse to such person or those claiming under him, or the proceeds of the property, in case of such person having changed such property into some other form, -or his grantee with notice of the facts having done so ?

The stated proposition is involved in the first finding ex•cepted to and the inferences which the trial court drew there■from. It is ruled in the negative by sec. 2302, Stats. (1898), providing that “Eo estate or interest in lands, other than leases for a term not exceeding one year, nor any trust or power over or concerning lands or in any manner relating thereto shall be created, granted, assigned, surrendered or de-"dared unless by act or operation of law or by deed or conveyance in writing, subscribed by the party creating, granting, .assigning, surrendering or declaring the same or by his lawful agent thereunto authorized by writing.”

The case should not be confused with those where real •estate was bought with partnership money for partnership purposes or as an incident to its business. As in Kyle v. Carpenter, 130 Wis. 310, 110 N. W. 187. The position of counsel for appellant is sound on that subject.- Eor does it fall within the class covered by the language “by act or operation of law.” The proposition contemplates an act by the parties only, involving an agreement of no higher dignity than to •deal in real estate which has been many times declared void. Bird v. Morrison, 12 Wis. 138; Langley v. Sanborn, 135 Wis. 178, 114 N. W. 787. Eo authority is produced which sustains, at all, the affirmative of the proposition, and it is clear that it is not sustainable. So we pass to the second point.

If a person, in forming a partnership with others, to conduct particular business, either at the time thereof or thereafter, pursuant to a verbal agreement, then or thereafter made with his associates, from time to time takes a part of the net, earnings of the business, not thought to be necessary thereto, and deposits the same with another to be invested in real estate, not suitable for or intended to be used in the partnership business, but to be owned by the members as tenants in common, and such other invests the money pursuant thei’eto, either taking the title in his own name by their consent or his-act in that regard is subsequently ratified; do the owners of the money so invested thereby become equitable owners of the land as tenants in common ?

The court found facts satisfying the elements of the proposition stated as to the particular land in controversy except that of taking title by Mr. Watson in his own name by previous consent or subsequent ratification. The only finding thereon is that plaintiffs did not know anything about the state of the title till 1905 and were then informed that it was held by Mr. Watson for the benefit of the persons belonging to the particular branch of the Mormon Church to which all parties belonged. The findings are to the effect that they did not learn all the facts as to the title till some time after 1905. Inferentially, from the findings, plaintiffs acquiesced in the situation in 1905 with that understanding that the title was held by Watson as he then claimed, which is in accordance with the undisputed evidence. Moreover, letters written by the respondents before and after 1905 show that they made no personal claim to the land. On the whole the record shows that all the business in relation to thé matter was left to Mr. Jacob Richtman; that he knew all the facts and acquiesced therein, and conclusively indicates, in our judgment, that it was expected the title to the land would be vested in some one person. So the proposition embodies the facts as they appear from the findings and the substantially undisputed evidence.

•While it seems clear there was consent to vesting of the title in Mr. Watson before the land was purchased, at least intrust for the members of the religious sect to which all the parties belonged, and tbe only mistake made, if any, was in not baying tbe deed sbow be beld in trust, tbe subsequent ratification was equivalent to prior consent. Tbe facts showing acquiescence seem clear, and tbe law likewise clear. In Bosworth v. Hopkins, 85 Wis. 50, 59, 55 N. W. 424, subsequent acquiescence was treated, as matter of course, equivalent to prior authority, and that is elementary.

Tbe proposition explained, as indicated, is ruled in tbe negative by tbe statute before referred to as regards tbe respondents having any right to tbe land in controversy as tenants in common. - On that -the court has before spoken. Clarke v. McAuliffe, 81 Wis. 104, 51 N. W. 83; McMillen v. Pratt, 89 Wis. 612, 630, 62 N. W. 588; Seymour v. Cushway, 100 Wis. 580, 76 N. W. 769.

Tbe proposition is also ruled in the negative by sec. 2071, Stats. (1898), abolishing resulting trusts. Formerly if a person deposited money with .another for tbe purpose of having such other invest tbe same in land, and tbe purpose of tbe deposit was executed, title being taken in such other by consent of such person, a trust resulted in-favor of such person enforceable in equity. Tbe case in band should not be confused with those decided where or when tbe old rule prevailed recognizing resulting trusts creatable by acts of tbe parties. Tbe statute was expressly designed to abolish such trusts. It provides that “When a grant for a valuable consideration shall be made to one person and tbe consideration therefor shall be paid by another, no use or trust shall result in favor of the person by whom such payment is made; but tbe title shall vest in tbe person named as tbe alienee in such conveyance” (sec. 2077, Stats. 1898), subject to a constructive trust in favor of creditors under sec. 2078 in case of intent in tbe transaction having been to defraud them. True, to bring a case within this section, there must be tbe element of prior consent or its equivalent, — that must not be lost sight of; but there was such here, it seems, as before indicated, by necessary inference from the findings and the undisputed evidence.

Neither the conclusions of law nor the judgment goes upon the ground that Mr. Watson held the property in trust because it was partnership property; the findings negative that; but because it was bought with money set aside to buy land for the individual members of the partnership. It seems to have been thought that, in any event, whether Mr. Watson took title in his 'own name by consent or not, he became a trustee and would remain so unless respondents lost their right to charge him as such by laches or the statute of limitations. The findings on the subject seem to treat the time when knowledge came to respondents merely in respect to whether they were guilty of fatal laches.

The conclusions of fact are to the effect that Mr. Waisouheld the land in controversy upon an implied trust for respondents and their father. There could be no such thing as an implied trust without some element of fraud, — such as Mr. Watson taking title in violation of an agreement that it should be vested in the owners of the money, — the respondents and their father, if they were such, or in himself as trustee for the members of the branch of the Mormon Church to which all belong. Then there would be an implied or constructive trust by the common law, sometimes confused with resulting trusts, strictly so called, mentioned in sec. 20*77. There was no breach of confidence in this case as to respondents personally, if we read the evidence right; but, if it be otherwise, the breach as to them was waived long before this action was commenced. If there were any breach as to the members of the sect to which the parties belonged, it was also waived as to respondents personally, and, in any event, the right of action to enforce the implied trust did not accrue to them.

The opinion may be read, up to this point, upon the theory that the evidence may be regarded as sustaining the finding to the effect that, by verbal agreement, money was deposited with Mr. Watson to buy land for the benefit of the members of the partnership as tenants in, common and that the land in question was purchased accordingly, the title being taken in Mr. Watson by previous understanding, implied from the whole situation, though not with actual knowledge of all the facts; but, in any event, with subsequent acquiescence in its not having been taken in the names of respondents and their father or any of them; but, we quite agree with counsel for appellant that there is no satisfactory evidence that partnership money was so deposited with such understanding and that the findings are all wrong in respect to that matter. In fact, as we read the record, it is all one way, that the money deposited with Mr. Watson for investment was regarded by all as tithing money to be held and invested for the use and benefit of the sect to which all belonged. Jacob Richtman, who did all the business with the 'knowledge of respondents and makes no complaint, united with Mr. Watson in so. testifying. The evidence of respondents and their letter indicate clearly the same thing.

Mr. Watson was induced to remove from Michigan to Wisconsin by the elder Richtman to do just what he did do, and he carried out the plan agreed upon with strictest fidelity, as it seems, for many years. He was recognized as substantially the head of the sect with authority to exact, collect, use, and invest tithings, for its benefit. All were parties to the arrangement. To give a full history of this would take much space, and it will be omitted. Suffice it, in the main, to say that the evidence leaves no reasonable doubt on the question, and the findings, in the latter part, seem to fairly recognize that they could not have been at all fairly framed without taking note of this phase of the case, and so it was done after the first few paragraphs as to the ‘money invested in the land having been deposited with Mr. Watson to buy it for the members of the partnership as tenants in common.

Even in the first part of the findings, as we have seen, respondents made no complaint upon learning that the land had been bought for the benefit of the members of the sect and till they found out that the deed did not show that fact. Jacob Richtman testified fully to the effect that he did all the business with Mr. Watson and acquiesced in his doing as he did. The idea that there was any breach of faith in the matter by Jacob Richtman or Watson is negatived by both in the most emphatic way. Neither of respondents made any claim to having any interest in the land for years, but on the contrary, in writing, declared that they had none. Both Mr. Watson and Mr. Jacob Richtman said that the purchase money was mainly collections for church dues. Respondents admitted they knew there were dues being sent to Mr. Watson, and that they submitted to being thus burdened.

The record, from beginning to end, shows there were business transactions between Watson and Jacob Richtman in connection with the church matters, whereby, on the whole, private means of the latter, the tithing money, and the former’s private funds became confused together, leading to some sharp differences of opinion, in time, between the two men as to the exact situation, which, in the end, were settled, as we shall see.

No further time will be spent on the branch of the case relating to the character of the money invested by Mr. Watson; but we repeat again that the finding that the land in controversy was bought with partnership funds deposited with him for investment, as suggested in the findings, is contrary to the evidence.

The record shows that after the differences had arisen as aforesaid, which were well known to respondents, and long after Mr. Watson had paid Jacob Richtman $3,000 received out of the Webber farm, mentioned in the findings, — paid not thin Icing it was due him, all the money as he thought having been given to buy land for the benefit of the members 6f the sect to which all belonged, — the two met for the purpose of making a full settlement. That the purpose was to close up all differences, is evident from what occurred and from the evidence of both — Mr. Eichtman acting as he had always done, in his own name, but as head of the Eichtman family. Eespondents knew his manner of doing business and made no protest. Their whole attitude was that of acquiescence in such matter. At this meeting Mr. Watson insisted that Mr. Eichtman owed him $1,000 of borrowed money, and the latter claimed he should be paid .a considerable sum by the former,' — thinking particularly "of the money received out óf the Webber farm sale some two years previously. Finally Mr. Eichtman proposed to call the credit that should be allowed him $4,000 and that, if a. settlement were made on that basis, Mr. Watson might have any one in Burlington, Wisconsin, draw up a receipt covering all dues and demands whatsoever up to date and he would sign it. That was agreed to with the modification that the latter should be allowed out of the $4,000 the $1,000 of borrowed money. The settlement so agreed upon was carried out, Mr. Watson paying Mr. Eicht-man-$3,000 and the latter signing and delivering to the former a contractual receipt in the following words:

“Uauvoo, Illinois, May 22, 1908. This is to acknowledge receipt of Wing-field Watson of $1 and- other good and valuable consideration in full payment, discharge and acquittance of all charges, claims and demands against him of whatsoever kind or nature, and I do hereby acknowledge that all accounts and claims between us have been fully discussed, considered and settled and this is a full discharge and settlement thereof.

“In the presence of Jacob Eiciitmau.

“Albert Ketchum.

“August Blum.”

That, since Mr. Eichtman in this transaction, clearly, by the implied assent of respondents, represented them as well as himself, the paper signed made a settlement which could not be impeached except for fraud or mistake, seems clear. Such, is the rule respecting such contracts. Conant v. Estate of Kimball, 95 Wis. 550, 70 N. W. 74.

It seems the whole case might well have been disposed of below, and might be here, on the mere history leading np to the execution of the receipt and such execution. -Manifestly, everything was intended by Mr. Richtman, who had done all the business with Mr. Watson on behalf of himself and family, and by Mr. Watson, to be included in the settlement. The former loyally stands by such settlement and malíes no claim to the land in question and never has in the sense insisted upon by respondents, yet, singular as it may seem, the trial court awarded him an interest therein equal with respondents. The theory upon which that was done is not perceived.

Notwithstanding the opinion might, as indicated, stop here, it seems best to take notice of some other features of the case. There is a finding that the trust, considering the answer as a declaration in writing in respect to it as to facts therein stated, is void for want of sufficient indication of beneficiaries, or any method for ascertaining them, and because the object is not sufficiently ascertainable to enable the court to enforce it. In that the court fell into the old confusion between charitable and private trusts supposed to have been entirely eliminated from our jurisdiction in Sawtelle v. Witham, 94 Wis. 412, 69 N. W. 72; Harrington v. Pier, 105 Wis. 485, 82 N. W. 345; Kronshage v. Varrell, 120 Wis. 161, 97 N. W. 928; Kavanaugh v. Watt, 143 Wis. 90, 126 N. W. 672; and other cases.

The trust in this case is a charitable one, if any. Mr. Watson, according to the record, holds the title for the general welfare, .in a broad sense, yet limited to some extent, of a particular class of persons in esse, which may be changed by dropping out or coming in of members in the natural course of events, but ascertainable at any time, in prcesenti, by the head of the sect.

Indefiniteness, to a large extent, is one of tlie characteristics of a charitable trust. “Indeed,” as said in Sawtelle v. Witham “vagueness is in some respects essential to a good gift for . . . charity.” Courts will not allow such a trust to fail because the objects of the charity are uncertain. The individual beneficiaries cannot well be named. The class may be very small or very large; as said in the cases cited, SO' may be the purpose. It may be single or may be broad to anything less than general charity, as said in Kronshage v. Varrell. If the general limits of the purpose, however broad, within the boundaries mentioned, and also the class, be reasonably ascertainable by the most liberal methods which can be devoted to the matter, though there be great indefiniteness in mode of carrying out the purpose and there be absence of details or even a trustee who is willing to act, and in some cases a trustee at all, — so long as the purpose is within the field of charity in the broadest sense, — the trust is a good one and a way can be found of carrying it out, as said in Harrington v. Pier.

The trial court made the findings of fact entirely misconceiving the law in respect to the trust matter. If they were correct they would likely jeopardize many trusts existing and prevent many which would be otherwise probable or possible1 in the future. Courts tread on almost consecrated ground, so< to speak, when dealing with the law of charitable trusts. The subject did not necessarily have anything to do with this-case. But being injected into it, occasion has been taken to make observations at some length to prevent the history of the-case in the record operating to mislead.

The finding just condemned was doubtless supposed to be1 essential to a decision in favor of respondents because of previous findings and evidence indicating acquiescence in the-state of the title so long as they thought it was held upon a valid trust for the members of the sect to which all belonged.. The ease on that subject seems to have been, too strong, as before indicated, to be ignored; so, the finding was made to the effect that, if the lands were taken upon a trust, as Mr. Watson claimed, and respondents ratified it by not objecting so long as they in good faith supposed he so held the property of record, the trust, in fact, was void.

If it were true that the trust was void as stated in the findings, it is not perceived how that would help respondents. . In that case the title to the land would be in Mr. Watson, as we have seen, discharged of the trust. It would not, to any extent, fall to them and Jacob Richtman as tenants in common, .■as evidently the trial court supposed, by reason of their furnishing part of the money to buy the land.

There are some other questions, incidentally discussed in the briefs of counsel; but what has been said covers all which from any viewpoint we think best to treat.

By the Court. — The judgment is reversed, and cause remanded with directions to dismiss the same with costs.

Timlot, J., dissents.

A motion for a rehearing was denied October 8,1912.