Brtek v. Cihal

515 N.W.2d 628 (1994)

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Nature of the Case

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Facts

Agnes, who was born in Czechoslovakia and barely spoke, wrote, or read the English language, attempted to control the affairs of her three adult children by requiring them to convey, cross-convey, and reconvey certain real estate which was a part of a family operation. Upon the death of Vaclav in 1949, sons P and Joe, daughter D, and wife Agnes inherited from Vaclav a farm. The children conveyed their interests in the farm to their mother, Agnes. On June 8, 1950, Agnes conveyed that farm to P Jerry, and Joe continued to farm the land. Some of their earnings went into the family 'pool,' although P and Joe put money earned from custom farming into separate bank accounts. D testified that she did not share in the income from the farming operation, but got 'what was from the ducks and geese and chickens.' From 1949 until 1961, Agnes filed one income tax return for the whole family, claiming all her adult children, as dependents. From then on, because of the intervention of the Internal Revenue Service, the mother, and the two boys, at least, started filing separate returns. On January 10, 1961, D married Lad Cihal and left the family home. Before that marriage occurred, a second farm was purchased in 1952, with the various family members contributing to the purchase price of $13,200. The ledger kept by D at Agnes' direction revealed the source of those funds. Joe paid $3,955.92, Agnes $2,400, P $4,450, and D $ 708. A note for $1,200 was also given, and that note and interest were paid from the sale of some steers and corn. The balance of approximately $486 was paid from the assets of the estate of Vaclav. Record title was taken in the name of Joe at the direction of Agnes. At the direction of Agnes, Joe deeded the second farm to himself and D as joint tenants. Agnes placed the deed in her dresser drawer in which the family's papers were kept. Access to this dresser was available to Agnes, Joe, and P, but the record does not reveal whether D enjoyed that privilege. Physical possession of that deed was not given to D before Joe's death on June 8, 1974. Agnes brought the deed conveying the second farm to D at the latter's home and declared that 'the farm is yours.' That deed was filed for record on July 1, 1974. D paid the inheritance tax of $370 on the property. P and D had a conversation at attorney Clyde Worrall's office in which they discussed putting his name on the title to the second farm. D executed a deed conveying the second farm to herself and her husband, Lad, as joint tenants, which deed was filed for record on April 14, 1975. Joe and P farmed the second property. They divided the income, giving one-third each to themselves and one-third to Agnes. After Joe died, P continued to farm the land and Agnes received one-third of the income from the second farm and P received two-thirds. The farm was in the Agricultural Stabilization and Conservation Service program, P received 60 percent of the payments, and D received 40 percent. D was told not to charge P rent, but a few years before her mother passed away in 1982, D started charging rent because she needed the money and could not pay the taxes without getting any crops off the land. She charged P $ 1,600 a year and stated that she did not know how she arrived at that figure but that 'he paid me for the taxes and I paid it at the treasurer's.' In 1985, D demanded that P vacate the premises. A third farm was purchased by D from a third party by means of a contract dated July 12, 1963. The purchase price was $32,000, with a $1,000 downpayment and a mortgage of $ 8,000 carried back by the seller. Of the principal balance $3,400 was paid by Joe, $1,800 by P, and 6,481.60 by Agnes with checks dated December 18, 1963, all made payable to Ds. According to Jerry, at the time these first payments were made, they were considered a loan to Martha and Lad. Ds paid a total of $33,455.50 to the sellers, with the last payment having been made on December 31, 1968. In 1968, D told her family she was short of money because they were also buying a fourth place and wanted to sell the third farm. P, Joe, and Agnes agreed to buy the 160-acre third place for $ 200 an acre. P said that they were to pay in installments, with no set time for making payments, and that D was to turn the farm over to them when all the installments were paid. P also stated that D said that the money loaned to her in 1963 would be accepted as a downpayment for the third place. D got $5,000 from Agnes, and payments of $7,000, $4,000, $2,000 and $2,000 from Agnes or Joe. D testified that she could not recall ever agreeing to sell the third place to her family; she characterized the amounts listed above as 'money Joe and P gifted me.' When P's tenancy on the second farm was terminated. P then contacted an attorney. At a meeting when D was asked if there was an agreement to split the second farm with P and if she remembered signing it, she replied, 'Well, yes,' and stated that she thought she had it. The agreement never appeared. Ps sued Ds seeking to have trusts impressed on the two farms for the benefit of P and D, to cancel the deed from Joe to Joe and D, to quiet title to the two farms in P and D, and for an accounting and general equitable relief. The court found that Ps had failed to establish a resulting or constructive trust by clear and convincing evidence, that they had also failed to prove the allegations of the second cause of action relating to the deed from Joe to himself and D, and that Ds had failed to prove the allegations of their cross-petition. Ps appealed.