Taylor v. Turner , 27 Utah 2d 39 ( 1972 )

ELLETT, Justice

(concurring and dissenting) :

I concur in the holding that whether the money advanced by the plaintiffs to the defendant was a loan or an investment was a question for the trier of the fact to determine. The court on believable evidence having found for plaintiffs on this matter, we should affirm. However, the credit for $7,000 should not stand.

The plaintiffs needed money to buy a new house, and being unable to sell their old home or to borrow on it requested the defendant to get a loan for them. The loan could be secured only if the defendant were the borrower. Consequently, a deed was prepared and executed by the plaintiffs transferring the home to the defendant.

The best offer which plaintiffs had for the sale of the house was $10,000. However, defendant secured a loan in the face amount of $11,000 on his note and mortgage, from which $10,313, the net amount of the loan, was turned over to the plaintiffs.

Ultimately the defendant with his own money paid the note and had the mortgage released. The property then stood in his name. It appears that his actual cash outlay as a result of the transaction was as follows:

Additional insurance premium for updated insurance $ 99.00

Land and Title Insurance Policy 83.00

Interest on loan 1,527.88

Additional insurance policy for extended period of note 221.00

Payment of interest and principal of note 11,253.66

Commission on sale 240.00

City of Salina curbing and gutter assessment 48.00

One half of escrow fees 10.00

Miscellaneous costs of Tucker Real Estate 59.19

Total $13,541.73

In addition, he was required to spend considerable time and effort in connection with the transaction. At trial he claimed to own the property, and thinking that he had, like Ben Franklin of old, paid more for his whistle than it was worth, stated that he would be happy to get $7,000 cash for it.

The plaintiffs claimed that he held the place in trust for them and was simply their agent in securing the loan. The court gave judgment against the defendant for the money he had borrowed and also ordered him to transfer the title to the home back to plaintiffs. Then the court, claiming to take the defendant at his word, allowed him a credit for only $7,000, the amount he said he would be willing to sell the home for. That is, the court in holding him as trustee of the house for plaintiffs and finding that he had been only an agent for them in securing the loan, allowed him as a credit for the money he had actually paid out only the value of the plaintiffs’ house instead of the amount he had actually spent. The plaintiffs received $10,313 and stood no part of the cost of the loan nor paid any interest thereon.

This just does not make sense to me. Inasmuch as the court held him to be a mere trustee of the home, he could not sell it for $7,000 or for any other sum. If he was only the agent of the plaintiffs in getting the loan, it seems to me that justice would require that he be reimbursed for his total outlay in clearing the mortgage from the land.

I would remand the case with direction to the trial court to allow the defendant a credit for all of his outlay in the transaction and to consider whether any additional allowance should be made for his trouble. I would otherwise affirm the trial court.