Bingham v. National Bank , 105 Mont. 159 ( 1937 )

In my opinion, the majority opinion announces incorrect statements of law leading to an erroneous conclusion. While the authorities are not uniform on the question, the decided weight of judicial authority supports the view that where a wife advances money for the purchase of property the legal title to which is taken in the name of the husband, a resulting trust arises in favor of the wife and the transaction is not to be deemed a gift by the wife to the husband. The majority have announced the correct rule where the husband advances the money and title is taken in the name of the wife, but the same rule does not apply where the wife furnishes her separate funds for the purchase of property taken in the name of the husband. (Restatement of the Law of Trusts, section 442, and comments page 1356.) For cases recognizing the distinction, see the following:Hinshaw v. Russell, 280 Ill. 235, 117 N.E. 406; Zeller v.Knapp, 135 Cal. App. 122, 26 P.2d 704; Mandelcorn v.Mandelcorn, 228 Ala. 590, 154 So. 909, 93 A.L.R. 322; Rhea v.Thomson, 115 Cal. App. 466, 1 P.2d 1091; Johnson v.Foust, 158 Iowa, 195, 139 N.W. 451; Gilbert v. Gilbert,180 Ark. 596, 22 S.W.2d 32; Brooks v. Fowler, 82 Ga. 329,9 S.E. 1089; Helvie v. Hoover, 11 Okla. 687, 69 P. 958; and see cases listed in note in 43 A.L.R., p. 1433; Walker v.Walker, 2 Tenn. App. 279; Stickney v. Stickney,131 U.S. 227, 9 Sup. Ct. 677, 33 L. Ed. 136; Rhodes v. Peery, 142 Or. 165, 19 P.2d 418.

Prior decisions of this court, while containing statements which seem to militate against this view, have never had this question directly presented.

In the case of Clary v. Fleming, 60 Mont. 246,198 P. 546, where the rule contended for was first announced in general terms, the husband, not the wife, paid the consideration.

In Humbird v. Arnet, 99 Mont. 499, 44 P.2d 756, the main issue was one of fraud which the lower court found existed and which the supreme court sustained because there was supporting evidence. Moreover, the evidence in that case tending to show that the alleged cestui que trust advanced the money was unsatisfactory.

The case of Bast v. Bast, 68 Mont. 69, 217 P. 345, is also distinguishable, for there the issue was whether a judgment in favor of the divorced wife in the sum of $3,900 was for a debt or for alimony. When that was determined the case was decided and the other statements relative to the presumption of a gift were in the nature of dicta.

The case of Roman v. Albert, 81 Mont. 393, 264 P. 115, turned upon a question of fraud. The court pointed out that the evidence of payment of money by the wife was vague and uncertain, and sustained the lower court's finding of fraud with the intent to defeat creditors. Here the evidence showing that Mrs. Bingham advanced the money was definite, certain and undisputed.

The case of McLaughlin v. Corcoran, 104 Mont. 590, 69 P.2d 597, was not one where the relationship between the person advancing the money and the holder of the legal title was that of wife and husband.

In none of the prior decisions of this court wherein it made the general statements relied upon here does it appear that the court was aware of the distinction recognized by the great weight of authority between the case where the wife, and not the husband, advances the money. Had the court been aware of this distinction and yet desired to disregard it, it would seem clear that it would have made some explanation for taking a view out of harmony with the decisions of other courts on the subject.

I believe it cannot be said that this court in any of its prior decisions has determined this question contrary to the views expressed by the great weight of authority. Prior to now it has never had the question pressed upon it for consideration. In all of the prior decisions this court simply made the general statement of the rule but did not rest the decision on that point.

I do not attach importance to sections 5782, 5784, 5790 and 5799, Revised Codes, cited in the majority opinion, for similar statutes are found in other states adopting the majority view. Neither do I see any merit in the suggestion that the majority rule was developed in some instance prior to the Married Woman's Acts. This cannot be so, for prior to the Married Woman's Acts the wife could hold no separate personal property of her own, and hence of necessity the question before us never could have arisen. The reason for adopting a different presumption when the wife advances the money was to safeguard and conserve her property rights granted by the Married Woman's Acts and thus to carry out the letter and spirit of those Acts. There is as much reason for the rule today as there ever was.

Furthermore, if there were a presumption of gift in this case it was rebutted here, for there was evidence from which it could be inferred that, as between the husband and wife, the intention was to create a trust and not to regard the advancement as a gift from wife to husband. This intent is inferable from the fact that both advised the bank before signing the mortgage to the bank, that the wife owned a one-half interest in the property. (See Bogert on Trusts, sec. 459, note 47.) I think under the evidence here a resulting trust arose in favor of Mrs. Bingham, entitling her to a one-half interest in the property where the acts here complained of were committed. Neither is there an estoppel on her part because of laches in claiming her interest under the rule stated in Clary v. Fleming, 60 Mont. 246, 198 P. 546, for there never can be an estoppel by lapse of time where there never has been a repudiation of the trust by the trustee. (Rhodes v.Peery, supra; Hofteizer v. Prange, 45 S.D. 228,186 N.W. 963; Fawcett v. Fawcett, 85 Wis. 332, 55 N.W. 405, 39 Am. St. Rep. 844.) Here the husband never repudiated the trust. Husband and wife both testified that the bank was informed of the wife's interest at the time the mortgage was executed by them jointly, and hence the bank took the property subject to the trust. (First Nat. Bank of Sayre v. Sanders, 169 Okla. 192, 35 P.2d 889; Phelps v. Davies, 126 Cal. App. 419,14 P.2d 922.)

The wife's interest has never passed to the bank or to anyone else. In consequence it was not error to refuse to give defendant's offered Instruction No. D-5, because it was not a correct statement of the law.

I also think that the declaration of Mr. Marlow, president of the bank, was admissible and properly received. Counsel for the bank concede that it was admissible if the matter of obtaining possession of the property involved was an affair of the bank. The record discloses that one of the officers who attempted to execute the alias writ stated to Mr. Bingham that "the bank had sent him out." Hence there was evidence aside from the declaration in question that the bank was actively participating in the matter of securing possession of the property, and, this being so, the declaration of the president was admissible as much so as was that of the cashier in the case of Klind v. ValleyCounty Bank of Hinsdale, 69 Mont. 386, 222 P. 439. The fact that there was no proof that the president's statement was communicated to the officers executing the writ is immaterial, for it tended to prove malice which was imputable to the bank (Grorud v. Lossl, 48 Mont. 274, 136 P. 1069), and was material upon the issue of exemplary damages.

Other questions raised by defendant have been decided adversely to its contention by the majority opinion, and to that extent I agree with it. In my opinion the record does not present any reversible error. Accordingly, I think the judgment should be affirmed.