MISC 95808

December 10, 1982

Barnstable, ss.



This is a complaint for declaratory relief brought pursuant to the provisions of General Laws Chapter 231A to determine whether the late Douglas A. Collins held title to several parcels of land in Falmouth in the County of Barnstable, on a resulting trust for plaintiff, Webster E. Collins ("Mr. Collins"), a resident of said Falmouth. The record title to said land (or to an interest therein) was in said Douglas A. Collins ("Douglas"), a son of the plaintiff, at the time of his death on April 7, 1979, unmarried and without issue. The defendant, Walter L. Warner, was named as executor in Douglas' will which has not as yet been allowed by the Barnstable County Probate Court.

Webster E. Collins, the plaintiff, and Louise B. Collins, who has died since the commencement of this action, were the parents of Douglas A. Collins and his brother Webster A. Collins ("Webster"), a defendant. Douglas and Webster were the only children of Mr. Collins and his wife, Louise, and his parents were Douglas' heirs at law and next of kin. The parents, as heirs, were named as nominal defendants as was Webster, who was a tenant in common of record with Douglas of certain Falmouth real estate at the time of Douglas' death, having previously held title with Douglas as joint tenants to the other parcels here in question. Holly Ann Nutting Stone and Susan Stone are the devisees named in Douglas' will.

A motion for summary judgment was heard by the Court on May 3, 1982, and thereafter denied. The denial was based on a holding that there was a genuine issue of material fact which had not been resolved by the affidavits presented with the motion and which the Court ruled should be found after a trial. Accordingly, a trial was held at the Land Court on June 28 to June 30, 1982 inclusive, at which a stenographer was appointed to record and transcribe the testimony. All exhibits introduced into evidence are incorporated herein for the purpose of any appeal.

The plaintiff's case is based on the theory of a resulting trust, that the plaintiff furnished the money for the purchase of the real estate in question, that he did not intend to make a gift to his sons, that he paid all taxes and other expenses and received all rents from said properties until he was engulfed by financial difficulties, that his problems deterred him from taking legal action when his sons dealt with the properties among themselves and that his failure to do so did not show an intent to make a gift of the real estate. Conversely, the defendants Warren and the devisees named in the will of Douglas A. Collins contend that the initial purchase in the names of the plaintiff's two sons was a gift to them as the objects of the father's natural bounty, and that if a gift were not made at the time of the acquisition, the father subsequently made such a gift as evidenced by the dealings of the sons with the real estate. The Court construes the evidence and the law to support the position of the plaintiff and finds and rules that the real estate is held by Douglas' devisees on a resulting trust for the plaintiff.

On all the evidence I find and rule as follows:

1. Mr. Collins furnished the consideration for the acquisition of five so-called parcels of land (some of which at least encompass more than one lot within the parcel designation) shown as A, B, C, D and E on Chalk A. It is these parcels with which the present dispute is concerned. He also furnished the consideration for the purchase of the Ballantine Lots, ownership of which is not in contention here, and for real estate situated in Springfield in the County of Hampden. Title to the Falmouth properties here in dispute was taken in the name of his two sons. Title to the properties in Springfield was held in various ways, either in the name of the boys, of Douglas alone or of Douglas with his mother. Title to the Falmouth family summer home on Garnet Avenue, and there numbered 86, (again not concerned in the present controversy) originally was in the name of the Miles Company, which was controlled by Mr. Collins. The house was acquired prior to the other Falmouth parcels. Title in the names of third parties was an attempt by Mr. Collins to insulate his properties from future creditors and groundless litigation. With memories of the depression he consciously adopted this course. It is not clear when his speculative financial ventures commenced in relation to the use of straws for real estate holdings, but the former appears to have been later in time.

2. Mr. Collins, now 78 years old , was, prior to his retirement, a Springfield business man who, with his brother, conducted a family business, Collins & Sons, for many years, the business being that of dealers and handlers of textile waste from New England cotton, knitting and woolen mills. His father and uncle were partners in the business originally, and Mr. Collins after graduation from Dartmouth College was hired as an employee and learned all facets of the business. He became a partner in 1948 after the death of his uncle; his brother also was a partner in the firm. His father died about 1954 and his brother in 1968.

3. His own sons followed different career styles, Webster, the elder, graduated from Williston Academy and Lehigh University and is now a partner in the Boston real estate firm of Minot De Blois & Maddison, Inc. Douglas graduated from Longmeadow High School, although previously he also attended Williston Academy, and he did not go to college. Douglas entered the family business after graduation from high school, but he never progressed to a position of authority. The most he received in weekly wages was $100, a progression from his starting weekly salary of $15.20. In 1967 Douglas left the family firm and worked in Springfield as operator of a parking lot owned by his father, a position he held until 1971. About that time, Douglas developed an eye for art, perhaps because of the proximity of the parking lot to the Springfield Museum of Fine Arts and the Springfield Science Museum. With advice from Douglas, his father began to accumulate a sizeable private art collection in which at one time he had invested well over $1,000,000. During this period of time Douglas lived with his parents in Longmeadow and paid no rent, room or board.

4. In 1977 Douglas left his parents' home in Longmeadow and moved to the family's summer home on Garnet Avenue in Falmouth. He had begun a collection of antique automobiles in 1962, and he kept them at Hope Spring Farm (Parcel A) with his father's permission. In 1974 Douglas opened an art gallery in North Falmouth in which he showed and sold his father's art. It is unclear whether this was done with the father's authorization. The gallery closed in 1978. In that year Douglas moved from his parents' home to Parcel A which is also situated on Garnet Avenue. It was there that he died, and his father found him. Parcel A is the Hope Spring Farm over the use and occupation of which Douglas and Webster had quarreled.

5. In the summer of 1962 Mr. Collins, had purchased from Lucius E. Allen, in two separate transactions, said parcels A, B, C and D. He paid the consideration for the purchase, and the deed to the initial acquisition was originally drafted by Allen's Falmouth attorney in the names of Mr. Collins and his wife Louise. On Mr. Collins' instructions the deed was revised so that title ran to the two sons as did the deed to the properties acquired from Mr. Allen thereafter. During the summer of 1962 Mr. Collins had a conversation with his sons in which he walked the bounds of Parcel A with them, explained that the deed to the property was in their names, but that it was still his property and he was not making a gift of it to them. In 1967, Mr. Collins purchased Parcel E and provided the purchase money, title was taken in the name of the two sons as tenants in common, a change in the pattern. Earlier, in 1963 Mr. Collins had purchased four pieces of land with his own funds, known as the Ballentine Four Parcels, which figure in the later pattern of land dealings, but the title to which is not in dispute here.

6. Mr. Collins paid all the real estate taxes and other expenses on the properties and received the rents therefrom until his financial difficulties arose.

7. In 1972, Mr. Collins had a severe heart attack from which he ultimately recovered. As the family business declined with thechange in the consumer use of textiles, Mr. Collins became increasingly involved in speculation in the commodities market. Until 1975, however, he still had a net worth of approximately $2,000,000, but financial reverses occasioned by his investments left him indebted in that year to various Springfield banks with outstanding debts to them of approximately $1,500,000. In addition, he owed the Falmouth National Bank between $170,000 and $190,000, and it was pressing for security. Mr. Collins advised his sons of his financial difficulties, and a family conference was held on June 26, 1975. Both sons expressed a desire to help where they could. In 1976 Douglas suggested to his father that it would protect the father if Douglas placed a mortgage on properties in Falmouth which he held of record as a joint tenant with his brother, Webster. The father disapproved of the idea, but he subsequently learned through a newspaper account that nonetheless Douglas had consummated the mortgage to the Falmouth National Bank. The father confronted the son, chastised him in anger for what he had done, but did not take any steps to disaffirm the transaction. His financial picture was such that he did not feel he could engage in a protracted legal dispute at the time. Douglas personally owed the Falmouth National Bank large sums of money for which the mortgage was to be some security, although Douglas' interest, as a joint tenant, would be defeated if he failed to survive his brother, as in fact happened. By then, however, Douglas and Webster had restructured their real property holdings of record. When Webster learned of the mortgage (Exhibit No. 18), he too was very angry and told his brother it was unethical.

8. After Webster became aware of the extent of his father's indebtedness to the Springfield banks, he engaged in extendednegotiations with them to liquidate his father's assets and pay the indebtedness. To that end Mr. Collins' art collection, securities held as collateral, pro tanto eminent domain proceeds for properties taken by the Springfield Redevelopment Authority, Mr. Collins' Longmeadow home and Webster's own funds all were used to reduce the indebtedness from $1,500,000 to about $10,000 at the time of the trial with the remaining balance to be paid from the eminent domain proceedings. [Note 2] The Springfield banks reduced the amount of the future interest on their loans as part of the negotiations, but they lost no principal.

9. The financial statement of his own assets which Mr. Collins had furnished the Springfield banks listed securities held in the name of his sons as well as himself and his wife. It also included Falmouth and Springfield real properties with the initials of the record title holder given. Exhibit No. 6 is the personal statement to Valley Bank and Trust Company, but similar statements were given the other three Springfield banks. Both his wife and Douglas co-signed at least one of the bank notes, and ultimately suit was brought against them.

10. The check representing the pro tanto proceeds in the amount of $9,440.25 of the Springfield Redevelopment Authority's taking of 43 Matoon Street, Block 304, Parcel 4 eventually was endorsed by Douglas to the order of Valley Bank and Trust Company for the benefit of Webster E. Collins (Exhibit Nos. 2, 3, 4 and 14). Receipt for a pro tanto payment for another parcel was acknowledged by Douglas in like fashion (Exhibit No . l).

11. In 1975 Mr. Collins had given a mortgage to the Falmouth National Bank covering the family summer home at 86 Garnet Avenue to secure an indebtedness in the amount of $85,000 (Exhibit No. 17). Nothing had been paid on this loan and by 1977 Falmouth National Bank was owed between $170,000 and $190,000. The bank gave notice to Mr. Collins that it intended to foreclose and hold him for a deficiency (Exhibit No. 19) and late one weekend before his son Webster returned to his Milton home, his father advised him of the pending foreclosure proceeding. It then became Webster's responsibility to devise some way of satisfying the bank and forestalling the foreclosure. He apprised Douglas of the pending foreclosure covering the premises at 86 Garnet Road in which their parents and Douglas were living. Douglas offered him "Good Luck" and "encouraged (him) to do every single thig (he) could." However, when Webster worked out a deal with a neighbor to sell him two Collins' lots abutting the neighbor's other land, Douglas refused to request a partial release from Falmouth National Bank of his mortgage so that the sale might be consummated. Douglas said he was not in the business of selling "family property." This sent Webster back to the bank which refused to participate in a work out; the situation was saved and time gained only by an appeal to superiors in the bank's parent corporation. Ultimately the mortgage loan and the interest due thereon were paid in full from several sources: the Bank executed a partial release of Douglas' mortgage (Exhibit No. 20), certain parcels were sold to a neighbor for $15,000 (Exhibit No. 21), Webster gave his own note, for $7,000 to the Bank, there was a check for $8,000 representing a pro tanto payment of damages for an eminent domain taking, Webster borrowed $55,000 from a Boston bank which took back a mortgage from Webster, to whom 86 Garnet Avenue had been trasferred, as trustee, and the remaining $20,000 owed the Bank on the mortgage, with accrued interest, came from the proceeds of a mortgage to it from Douglas and Webster covering Parcel E. (Exhibit No. 22) [Note 3]

12. In order to secure Douglas' cooperation for the resolution of his father's financial difficulties, Webster conveyed his interest in Parcels A, B and D to Douglas (Exhibit No. 13). Douglas in turn conveyed his interest in Parcel C and Ballantine Four to Webster (Exhibit No. 36). The conveyances between the brothers were consummated in June of 1977 by deeds dated in June but recorded simultaneously on August 31, 1977 in Book 2573, Page 274 as to the deed in which Webster was grantee, and Book 2573, Page 270, as to the deed in which Douglas was grantee. The conveyance by Webster to Stephen T. Kunian, Trustee, dated October 24, 1977 and recorded in Book 2613, Page 117 generated $15,000 to pay down Mr. Collins' debt as set forth in paragraph 11. This was preceded on the records by a partial release of Douglas' mortgage to the Falmouth National Bank and a new mortgage to the Bank from Douglas dated November 8, 1977 and recorded in Book 2613, Page 85 covering Parcel A (Hope Spring Farm) Parcel B and Ballentine Two Parcel (title to the latter having been acquired by Douglas). In May Webster had secured bank approval of the game plan described in paragraph 11 which Douglas had suggested, but it wasn't until December that the transactions with the Bank finally were completed. This included consummation of the loan from the Boston bank covering 86 Garnet Avenue and the execution of the new mortgage referred to above to Falmouth National Bank by the brothers. Mr. Collins and Webster were present at the Registry, and it was then that Mr. Collins first learned, at least in part, of the cross conveyances between his sons. He did not learn all of the details thereof until the trial.

13. After Mr. Collins' financial difficulties became acute, Webster personally paid all real estate taxes on the properties regardless of the record title except for one half of the fiscal 1978 taxes on Hope Spring Farm which Douglas either paid from his own moneys or from the proceeds of the sale of family assets. Expenses during this period were paid by Webster from the rents of Breacote, another family property, with any shortfall assumed by him personally and any overage to go to Mr. Collins.

14. In September of 1978, Webster gave Douglas a memorandum he had prepared to be submitted to the firm doing the revaluation of Falmouth properties in which Hope Spring Farm was described as owned by Douglas. (Exhibit No. 25). Webster also wrote his father in 1973 (Exhibit No. 29) relative to the joint tenancies by which he and Douglas held title in which he spoke of "the Cape property owned by Douglas and myself." He proposed a family trust which never came to fruition (Exhibit No. 30).

15. The consummation of the cross conveyances in June 1977 also included the execution and delivery in escrow of two leases, one of which related to Hope Spring Farm (Exhibit No. 24) and was a demise from Douglas to Webster. The escrow was necessary because of a disagreement between Douglas and Webster as to use and occupation of the farm. (See Exhibit No. 10). The brothers never agreed about the ultimate disposition of Webster's barn located on the premises, and accordingly the leases were never released from escrow. However, they finally executed a letter of agreement dated September 29, 1978 covering use. (Exhibit No. 7).

16. The two brothers different in education, career choices, lifestyle and interests, quarreled constantly. As between themselves they "partitioned" the real estate as to title although not thereby precluding occupancy, but neither of them ever stated that their father was not the actual owner of the properties. Indeed Douglas was interviewed by a reporter for The Boston Globe for an article which appeared in the August 12, 1973 paper. (Exhibit No. 34). The tenor of the piece is that Mr. Collins acquired the original Victorian house (at 86 Garnet Avenue) and then added to his real estate holdings.

"Maybe this fetish for collecting is inherited. Doug's father, having bought the house on an acre and a half, began collecting pieces of land and houses around him in order to insulate the family against encroaching developers. In 1960, Mr. Collins bought the next house along the bluff. A comfortable summer cottage of five bedrooms, four baths, and an enormous wood paneled and beamed living room looking across the bay through 30 feet of windows it is empty except maybe one month a year. In 1962, Doug's brother noticed several surveyors on the farm below them. Doug's father made an offer and acquired 20 acres and a third house. In addition, the Collinses own two stretches of beach and two swamps. On each of the small parcels of property they couldn't buy or never heard were for sale is the evidence - a house - that confirms the wiseness of their actions. Yet the Collins have space and have probably succeeded in making Cape Cod an attractive and insulated haven for themselves."

17. Douglas became friendly with the women who were named in his will when they were young girls, and his father has met them. One still keeps her horse (s) at the farm, and pays the expenses attributable thereto. The will describes no property, but the attorney who drafted it testified Douglas in May of 1973 stated he owned Hope Spring Farm, even though title at that time was in the name of Webster and Douglas jointly, and he was later in the same summer to acknowledge in the newspaper article his father's ownership.

The law as to a resulting trust of real estate is well settled

that 'where one buys and pays for real estate, but the conveyance of the title is to another, a trust results in favor of the one who pays the consideration, which may be enforced in equity against the grantee named in the deed, who is treated as subject to all the obligations of a trustee' . . . The doctrine of resulting trusts rests on the presumption that 'he who supplies the purchase price intends that the property bought shall inure to his own benefit and not that of another, and that the conveyance is taken in the name of another for some incidental reason.'

Caron v. Wadas, 1 Mass. App. Ct. 651 , 655 (1974), Collins v. Curtin, 325 Mass. 123 (1949), Moat v. Moat, 301 Mass. 469 (1938), Abalan v. Abalan, 329 Mass. 182 (1952). The presumption that he who supplies the purchase price intends that the properties enure to his own benefit may be rebutted in cases where the person paying the consideration is under a natural or legal obligation to provide for the person who takes the title. In such instances there is a presumption of a gift and no presumption of a resulting trust. Dwyer v. Dwyer, 275 Mass. 490 , 494 (1931). The presumption of a gift can, of course, be rebutted. Krasner v. Krasner, 362 Mass. 186 (1972). To do so, a plaintiff must prove that he furnished the entire consideration (or a specific part thereof), that he intended at the time of purchase to acquire the beneficial interest therein, and that he did not intend that the grantee in the deed hold the property by way of gift (or settlement or advancement in the case of a wife). A plaintiff also must be able to prove his case without reliance on conduct which is censorial. In the past the motives for arranging to take title in the name of another sometimes have been suspect, but the rule as to the effect of such conduct on the trust was recently explained by the Appeals Court in Murphy v. McKenzie, 1 Mass. App. Ct. 553 (1973) wherein it was held that the plaintiff by proving that he paid the consideration and caused title to be taken in the name of another established his case. Justice Goodman analyzed the cases in his decision in which fraud had been weighed in the appellate court decisions and explained the rule. In short, it is that a plaintiff can prevail in a case seeking to establish a resulting trust against a defense of fraud as to a third party so long as he can prove his case without developing the alleged fraud.

Finally, the Massachusetts rule always has been that it is the intent of the parties at the time of the purchase which determines whether a resulting trust exists. See Moat v. Moat, 301 Mass. 469 , 472 and cases cited (1938). Smigliani v. Smigliani, 358 Mass. 84 , 90 (1970).

With this brief review of the law as to resulting trusts within this Commonwealth, I turn to the facts of the present case. The defendants do not dispute the fact that the consideration for the acquisition of the real estate was paid by the plaintiff. They don't seriously contend either that a resulting trust was not established when title was taken in the name of Douglas and Webster. The defendants do argue that the plaintiff has not overcome the presumption of a gift to one who was the natural object of the donor's bounty, his son. They point out that Douglas never became truly independent of his father for support despite his attempts to sever the familial ties. Although this indeed is true, the acquisitions of the real estate here mainly were prior to the time Douglas' role in life became clear. In addition, title to these properties was in both sons, and obviously Webster did not need to be supported by his father. It seems clear to the Court from the evidence as to the acquisitions of the properties, the perambulation of the boundaries of the Hope Spring Farm by Mr. Collins and his son when he told them of his purchase and that he had not made a gift of the real estate to them, Mr. Collins' expression of intent in his testimony, the payment of the taxes by Mr. Collins, the receipt by him of income therefrom, the financial statements submitted to the banks, and the pattern evidenced by other real estate holdings that the plaintiff successfully has rebutted the presumption of a gift. Krasner v. Krasner, 362 Mass. 186 , 189 (1972).

The defendants' principal argument, however, is more provocative. They argue that even though Douglas and Webster initially held title on a resulting trust for their father, he ultimately made a gift to them of the parcels here in dispute.

The defendants argue that even if there were a resulting trust when the real estate was acquired, a trust oral in inception can be extinguished without a writing and that the donative intent to complete the gift can be shown by the conduct of the person having the beneficial interest. Authority is divided as to the initial part of this proposition, but the defendants' position is supported as follows:

Where a transfer of an interest in land is made to one person and the purchase price is paid by another, the resulting trust which arises in favor of the payer can be extinguished by an oral conveyance or surrender of his interest by the beneficiary of the resulting trust to the trustee.

3 Scott on Trusts (1939) ยง460. There appear to be no Massachusetts cases on point on either aspect of the defendants' argument. We need not reach the question, however, as to whether it states the law in this Commonwealth, for I find that there is no evidence that Mr. Collins intended in 1976 or thereafter to make a gift of the trust res to his sons. It is true that when Mr. Collins learned of Douglas' mortgage to the Falmouth National Bank, he did nothing other than to berate him. It is also true that in 1977-78 he learned of difficulties between his sons over occupancy of Hope Spring Farm and Webster's barn and had some knowledge of the cross conveyances although he did not know all of the details until the trial. In none of the actions which the sons took, however, did they ever deny their father's paramount rights. The steps which were taken by Webster to work out the financial difficulties in which his father found himself made use of jointly held property in both Springfield (primarily as to proceeds of takings) and Falmouth as well as the paintings which Douglas earlier had been selling on his father's behalf. Any delay on the part of the plaintiff in taking steps to establish the resulting trust is understandable when viewed in the context of the events of the 1970's: his heart attack, his losses in the commodities market, the threat of mortgage foreclosures, the sale of his Longmeadow home, and litigation on the bank notes. In any event, he had no duty to terminate the resulting trust if he chose not to do so, and the defendants have suffered no harm from his inaction. See Howe v. Howe, 199 Mass. 598 (1908) where the Court at page 604 recognized the right of the beneficial owner to have the trust persist. This case also recognizes (at pages 602-603) that a conveyance by one trustee to another who takes with notice does not disturb the trust.

Such a conveyance is for the mere purpose of relieving one trustee and substituting another, and requires no consideration to support it. The property itself was earlier stamped with the trust and continues its character in the hands of all, who receive it with notice.

In this case the resulting trust was established after the beneficial owner had died without attempting to prove he was the beneficial owner despite suggestions by others that he take such steps. See also Bodman v. Martha's Vineyard National Bank, 330 Mass. 125 , 129-130 (1953).

On all the evidence, I therefore find and rule that the purchase price of the real estate described in the complaint was paid by the plaintiff, that no gift was intended or made when title was taken in the names of his sons; that any presumption that a gift was intended when Mr. Collins purchased the locus parcels has been rebutted; that a resulting trust therefore was created which has never been extinguished; that it was not fraudulent as to any creditor for Mr. Collins to take title in the names of his sons; that even if it were, the resulting trust has been shown without reliance on motive; that the plaintiff made no subsequent gift to his sons of said real estate; that Douglas A. Collins at his death held only bare legal title of record to Parcels A, B, D and an undivided one-half interest in Parcel E and Webster A. Collins held bare legal title to Parcel C and an undivided one-half interest in Parcel E, upon a resulting trust for the benefit of the plaintiff; that the plaintiff has elected to terminate said trust and has requested that the personal representative of Douglas A. Collins convey legal title to him; that neither the personal representative of Douglas A. Collins nor his heirs or devisees nor said Webster A. Collins have any bneficial interest or any other interest in said parcels (other than bare legal title) ; and that Walter L. Warner, as executor named in the will of Douglas A. Collins, Holly Ann Nutting Stone and Barbara Susan Stone execute a deed, without covenants as to said executor and with quitclaim covenants as to the devisees, running to the plaintiff, for nominal consideration, conveying the record title of Douglas A. Collins in and to said parcels to Webster E. Collins.

Judgment accordingly.


[Note 1] A suggestion of death has been filed as to Louise B. Collins, wife of the plaintiff and mother of Douglas A. Collins and Webster A. Collins.

[Note 2] The Superior Court proceedings had been concluded by the time of the trial of the present case, but the balance of the moneys due on account of the taking had not been paid.

[Note 3] The $20,000 mortgage loan thereafter was paid in full from the proceeds of the sale of one of Mr.Collins' paintings. The remainder of the moneys due from Mr. Collins were paid from the sale of art.