Opinion
No. 12–P–1865.
12-23-2013
Robert EDDY v. Marlene P. MONTAGANO & another.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
The defendants in this case, Marlene P. Montagano and her sister Marilyn E. Gardner, filed this appeal from a judgment entered in the Superior Court declaring that a certain parcel of real property held in the names of Montagano and Gardner as joint tenants is subject to a resulting trust in favor of the plaintiff, Robert Eddy, to reflect a fifty percent interest in the ownership of the property, and ordering the defendants to convey a fifty percent interest in the property by deed to the plaintiff and to take such actions as necessary to obtain approval from any mortgagee for this conveyance. The judge also ordered Montagano and Gardner to pay the plaintiff fifty percent of monies they received as a result of a 2004 refinancing of the property, with interest. In or around 1997, while Eddy was going through a divorce, he began a romantic relationship with Montagano. The trial judge found that Eddy offered to finance the purchase of a house that he would share with Montagano, but Eddy told Montagano that because he was in the midst of a divorce he did not want the asset listed in his name. The defendants argue that the judge erred in finding that the parties' actions created a resulting trust.
To determine whether a resulting trust is created, courts must look to the intent of the parties at the time of the purchase of the property. See Saulnier v. Saulnier, 328 Mass. 238, 240 (1952) (“it is settled that a resulting trust must arise if at all at the time of the conveyance to the alleged trustee”); Lewis v. Mills, 32 Mass.App.Ct. 660, 664 (1992) (“We focus on the plan, not on the problems encountered in carrying out the plan. A resulting trust can only ‘arise’ ... if from the outset the person who ‘supplies the purchase price intends that the property bought shall inure to his own benefit ..., and that the conveyance is taken in the name of another for some incidental reason’ “ [quoting from Simmons v. Smith, 20 Mass.App.Ct. 775, 778 (1985) ] ). The party asserting a resulting trust “must prove that he furnished himself the entire consideration or a specific and definite part thereof, for which it was intended he should receive a determinate and fixed fraction of the whole estate conveyed [and] that it was not intended at the time of the conveyance that the [trustee] should take a beneficial interest in the property by way of gift, settlement or advancement.” Pollock v. Pollock, 223 Mass. 382, 384 (1916).
The judge in this case found that the parties intended that Eddy would both pay the down payment and “assume the finance costs” of the purchase, which we understand to mean that Eddy would be responsible for the mortgage, even though the mortgage was obtained by Gardner and Montagano, the latter making false representations to her income. Eddy did, indeed, pay the entire down payment. He subsequently made the mortgage payments until he no longer resided at the premises as a result of the falling out between Montagano and Eddy that ultimately led to this litigation. The judge also found that the parties intended that Eddy would take only a fifty percent interest in the property and that Eddy and Montagano would split any equity. These findings, which are adequately supported, are sufficient to demonstrate the creation of a resulting trust over fifty percent of the property. Accord Davis v. Downer, 210 Mass. 573, 575 (1912) (a finding of resulting trust “is not affected by the circumstance that at the time of the original purchase the grantee executed mortgages for a part of the purchase price. This was done upon the understanding that the mortgages should be paid by the [purchaser], an agreement which was carried out, and the entire consideration really was paid by the [purchaser]. It was the equivalent of a loan of credit by the grantee for the benefit of persons paying for the purchase”).
While the fact that Eddy failed to continue paying the mortgage may have relevance to some issues, for example, an accounting, as the trial judge noted at footnote 17 of his decision, that fact does not preclude the establishment of a resulting trust, which depends upon intent and conduct at the time of the purchase of the property.
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Under the case law, the fact that Eddy took these actions in order to defraud his wife is not material to the precise question before us. So long as there was no fraud as between the parties as to this action, the doctrine of unclean hands is no bar to the creation of a resulting trust. See Murphy v. McKenzie, 1 Mass.App.Ct. 553, 556–557 (1973) (“The clean hands doctrine does not bar the plaintiff's recovery in this case. It is true ... that the plaintiff conceded he was motivated in this transaction by a desire to keep the property out of the reach of his wife and to avoid a tax lien. But the motivation was immaterial to the establishment of the resulting trust; that arose as a matter of law on the operative facts proved by the plaintiff”). Indeed, as Eddy's counsel acknowledged at oral argument, Eddy's former wife might be able to reopen the property settlement in the divorce because of the missing information.
Judgment affirmed.
Order denying motion to alter or amend judgment affirmed.