APPEAL from the Circuit Court of Cook County; the Hon. E.J.
SCHNACKENBERG, Judge, presiding.
MR. JUSTICE BRISTOW DELIVERED THE OPINION OF THE COURT:
Rehearing denied September 20, 1954.
In a proceeding in aid of execution or creditor's bill instituted by Morris Ohnstein against Simon L. Levy, Flora Goldberger, Arlene Meyer, and Harold Meyer, Simon Levy filed an amended countercomplaint against Flora Goldberger, his daughter, Arlene Meyer, his grandchild, and Harold Meyer, his son-in-law, to set aside certain deeds and to impose a constructive trust on property held by them. The creditor's bill was abandoned, and the circuit court of Cook County, pursuant to the recommendations of the master, denied the countercomplaint in a decree dismissing the cause for want of equity. A direct appeal therefrom has been taken to this court by Simon Levy on the ground that a freehold is involved.
It is incumbent upon this court to determine whether under the evidence adduced in the cause a constructive trust may be imposed upon the property held by the counter-defendants.
It appears that on February 20, 1922, Simon Levy, hereinafter referred to as the plaintiff, inasmuch as the controversy is essentially his claim against certain of his heirs, purchased an apartment building located at 2934-36 Logan Boulevard, Chicago, Illinois, in which he, his wife, and daughters had been residing. Shortly thereafter, his daughter Ruth married the defendant Harold Meyer, and they leased from Simon Levy a first-floor apartment in the building at a rental of $35 a month which they paid plaintiff from 1922 until March, 1950. After the death of Ruth on December 27, 1949, the rental payments were made by her husband, defendant Harold Meyer.
It is uncontroverted that there was a close relationship between Simon Levy and his daughters, Flora Goldberger and Ruth Meyer, for they visited and dined with each other daily, at which time they freely discussed personal and business matters. Both Flora Goldberger and her husband, Dr. Sol M. Goldberger, testified that on November 14, 1938, when plaintiff was 72 years old, he informed his daughters that he had consulted with his good friend Louis Glanz, who was experienced in real estate and mortgage matters, and that at the suggestion of Louis Glanz he was going to convey the building and another parcel of vacant land owned by him to Louis's brother, Alex, as trustee. Under that plan, Simon Levy would still be the beneficial owner. Louis Glanz in his testimony corroborated that there was such a conversation between him and Simon Levy with reference to creating a trust.
Plaintiff's daughter Ruth, however, urged her father to reconsider, and suggested that there was no reason to have a third person, a stranger to the family, act as trustee, and that she and her sister Flora could just as easily take the title to the property as co-trustees for his benefit. Simon Levy agreed, and pursuant to that plan he conveyed both the building and the vacant land to his daughters by quitclaim deeds. No consideration was paid for the property by the daughters at any time.
After the conveyance, plaintiff continued to exercise all indicia of ownership. He collected rents, entered into leases with the tenants, paid for repairs, decorating and janitor expenses and taxes of over $900 a year. He paid his son-in-law, Harold Meyer, $50 for a refrigerator. Attorney Gilbert, one of defendants' witnesses, admitted that Simon Levy always treated the property as though it were his, and listed it, and the income or loss therefrom, on his income tax returns, which were offered in evidence but rejected. At no time did he give his daughters statements of receipts and disbursements, nor did they ever request such accounts. Moreover, they recognized him as the owner and lessor of the building.
In that connection, Mrs. Frank Padden, wife of the superior court judge, testified that she belonged to a club to which Flora and Ruth were members, and that in September, 1949, while she, two other women, and the sisters were riding in a car, in the course of conversation Mrs. Padden asked one of the women how she was making out with the property left in trust to her family, and Ruth Meyer commented, "That is the way Flora and I have papa's property in trust." The other women present also testified that Ruth made that statement.
In 1941, plaintiff leased a second-floor apartment to his daughter Flora and her husband, for which they have continuously paid rent to plaintiff.
In 1942, plaintiff negotiated a loan for $13,000 with the Reconstruction Finance Corporation and signed the note, as did Flora, her husband, and Ruth and her husband. The latter, however, refused at first to sign the mortgage on which his signature was necessary in connection with any inchoate dower rights, since his wife was the record title holder. He finally agreed to sign after he was reassured by an uncle that he would be indemnified if he ever had any liability on the instrument. Harold Meyer at no time contributed any sum for the premises. Plaintiff alone paid the monthly installments of $130 and taxes of $50, as well as some additional fees of $2000, and ultimately reduced the mortgage to $600.
Shortly after the death of Ruth on December 27, 1949, Harold Meyer and his daughter Arlene, and Flora Goldberger and her husband conveyed the property to a third person, who reconveyed it to Flora and Arlene as tenants in common, in order to clear the legal title. Flora, recognizing that her right to the property had always been as a trustee only, reconveyed her interest in the property to her father. However, Arlene Meyer has refused to reconvey her interest to plaintiff, and claims the property in her own right.
On the basis of the foregoing evidence adduced before the master, he recommended that plaintiff be denied relief, in a legal opinion for which a charge of $2746.80 was made for 178 hours of work. The opinion first fully analyzed the contentions of the parties, and then stated that it was unnecessary to rule on defendants' defense of laches, but noted nevertheless that plaintiff was guilty of laches. It further stated: "Neither is it necessary to embark upon any extended analysis and balancing of the evidence, nor to review the numerous objections to the competency of witnesses and to the admissibility of evidence, because we assume, without deciding, that the evidence established the absence of any donative intent on the part of Simon and the fact of transfer to the girls upon oral express trust as alleged."
The master then proceeded to hold in that opinion that the cross complaint must be dismissed as a matter of law because the Statute of Frauds makes oral trusts unenforcible, and plaintiff's theory of resulting trust was inapplicable. That analysis of the law was followed by a further discussion of the concept of constructive trusts, which concept was deemed inapplicable ...