On December 2, 2011, Richard Ryan III filed a petition in this court seeking partition, pursuant to G.L. c. 241, of an improved parcel of land located at 22 Flint Street, Somerville, Middlesex County, Massachusetts (Property). Title stands of record in the name of Ryan and Gregory A. Miller as joint tenants. [Note 1] Miller has objected to the partition, arguing that the record title does not accurately reflect the intention of the parties at the time they took title together; Miller says that Ryan never was to have any title interest in the Property, and to the extent Ryan does hold some interest, it is subject to a resulting trust for the benefit of Miller. Miller argues, therefore, that partition does not lie in this case and that it should be dismissed.
On June 25, 2013, the court (Piper, J.) held an evidentiary hearing to determine the state of the record title. [Note 2] A court reporter was sworn to create a transcript of the hearing. Two witnesses testified: respondent Miller and petitioner Ryan. Twenty-five exhibits were entered into the record, the majority by agreement. At the close of the taking of evidence, the court suspended the trial. The parties were directed to await the receipt of the transcript, and then to file posttrial legal memoranda, and their requested findings of fact and rulings of law.
The court received the transcript on July 22, 2013. Posttrial submissions of the parties were filed timely on August 22, 2013. Trial resumed October 3, 2013 for closing arguments, after which the court took the matter under advisement. [Note 3] For the reasons that follow, I now decide the issue before me in favor of the petitioner, and direct that a partition by sale of the Property take place.
Based on the exhibits and the testimony at the evidentiary hearing, as trier of fact, drawing such inferences from the evidence as I consider reasonable and appropriate, I make the following findings of fact.
1. The subject Property was conveyed to Ryan and Miller as joint tenants by deed dated July 28, 1993, and recorded with the Middlesex (South District) Registry of Deeds at Book 23475, Page 98. No record conveyances since have changed the Propertys record ownership.
2. Mr. Miller and Mr. Ryan met in the 1980s and became close friends.
3. At some point, Mr. Miller came to believe Mr. Ryan was suffering from a serious and potentially fatal illness. At least in part as a result of this understanding, Mr. Miller began paying for the two of them to travel. Together, they visited Puerto Rico in the winter of 1991-1992; Spain, Portugal, and Morocco the following winter; and in May of 1993, the men spent a month in Greece, and traveled from there to Turkey.
4. During this period in the early 1990s, Mr. Miller was working as a waiter for Sheraton Hotels and Restaurants. He received W-2 forms annually, which showed income from tips based on eight percent of his sales, less payments for union dues to Local 26 of the Housing and Restaurant Employees Union (Local 26). In fact, Millers actual income was higher than was reported by his employer on the W-2 forms; his income from tips was closer to twenty percent or twenty-five percent of his sales.
5. Mr. Miller had a benefit from Local 26 that would provide $5,000.00 in assistance towards the purchase of a home and closing costs, plus attorneys fees, and fees for home inspection. This was known as the Local 26 Housing Trust Fund Benefit.
6. At some point prior to 1993, Mr. Miller started looking at properties to purchase before his employment by Sheraton (and thus his eligibility for the Local 26 Housing Trust Fund benefit) ended.
7. I do not credit the testimony of Mr. Ryan that he was in any meaningful way involved in Mr. Millers search for an investment property. To the contrary, I find that Mr. Miller took the lead on this venture, viewed a number of properties without consulting Mr. Ryan, and ultimately settled on the Property at 22 Flint Street, Somerville without much, if any, input from Mr. Ryan.
8. In 1992, Miller made an offer on a property at 19 Allston Street in Dorchester. Miller viewed the property without Ryan, signed a purchase and sale agreement, and put down a deposit of $8,000.00. Miller subsequently withdrew his offer to purchase, and the $8,000.00 deposit was returned to him.
9. On or about March 13, 1993, Miller paid a $1,000.00 deposit to a realtor in Somerville, accompanied by an offer to purchase the Property.
10. Mr. Miller applied for a mortgage loan to finance the purchase of the Property, but was declined based on insufficient income. Apparently, the income showing on Millers W-2s was insufficient under the underwriting standards for approval of the requested mortgage loan.
11. At this point, Miller sought Ryans involvement. Mr. Ryan claims that he and Miller agreed to buy the Property together. Mr. Miller claims that he asked Ryan to be a co-borrower only as an accommodation to Miller, solely so that Ryans income could be used in the lending calculations, thereby bringing Miller over the amount of income needed to quality for a mortgage loan. In any event, the two men applied for a loan jointly, and made sworn representations to the mortgage company, Great Western, that they would own the Property jointly.
12. On June 28, 1993, Great Western issued a mortgage commitment letter, which contained several conditions. One such condition was that a certain BayBank credit borrowing account be paid in full. This account was in the name of Mr. Ryan, and Mr. Miller provided the funds to pay it off.
13. Great Western also required evidence of Millers supplemental income; a bank statement showing the $8,000.00 for the return of deposit for the Allston Street, Dorchester property; a gift letter for $12,000.00 from his aunt, Janet Goguen Holmes; and a gift letter for the $5,000.00 representing Millers Union benefit. Additionally, Mr. Ryan was to provide evidence of his 1993 social security award.
14. At the time of the closing, Mr. Ryan was not employed and had no income other than from Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI).
15. Mr. Miller provided $38,000.00 for the purchase of the Property. Mr. Ryan did not contribute any funds at the time of purchase.
16. The closing was conducted on July 28, 1993, and the deed to the Property, granting it to Mr. Miller and Mr. Ryan as joint tenants, went to record that day.
17. Ryan and Miller both executed the purchase and sale agreement, the promissory note, the mortgage, and the loan applications.
18. There was no evidence in the form of testimony from Mr. Miller that he expected to be the sole owner of the Property. I decline to credit any evidence which might lead to such an inferential finding.
19. At some point subsequent to the purchase of the Property, Ryan and Miller had a falling out. According to Miller, Ryan became upset when asked to sign an accidental death mortgage protection insurance policy that would benefit Miller. Mr. Miller denied having named Ryan as beneficiary in his own similar policy, however, Miller was not consistent on this, and it seems likely that these were reciprocal mortgage protection life insurance arrangements.
20. Following their falling out, and continuing through the trial I conducted, the two former friends did not directly speak with each other.
21. After and at all times following the closing, Mr. Miller resided at the locus, collected all rents from tenants in the remainder of the multi-unit dwelling, paid for all maintenance and utilities, and made all payments of principal and interest on the mortgage, although at some point these payments were not fully and timely made as due.
22. In June or July, 2011, Mr. Ryan learned the mortgage loan on the Property was in default and made a payment of $1,534.37. Mr. Ryan became aware of the delinquency from the lender, not Mr. Miller. This lawsuit followed.
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Millers theory of this case is that Ryans interest in the Property is in the nature of a resulting trustee; that Ryan and Miller never intended Ryan to enjoy any beneficial interest in the Property, and that his name only was on the deed and mortgage as a matter of convenience to Miller, facilitating the loan used to acquire the Property. In a partition case, it is open to the [respondent] to show that [his] beneficial interest in the locus... was different from that indicated by the record title. Asker v. Asker, 8 Mass. App. Ct. 634 , 638 (1979). That burden belongs to the party seeking a division contrary to record title. See id.
There is a 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. Simmons v. Smith, 20 Mass. App. Ct. 775 , 779 (1985) (quoting Quinn v. Quinn, 260 Mass. 494 , 501 (1927)). See also Checovich v. Checovich, 339 Mass. 71 , 73 (1959) ([W]hen a purchaser of real estate pays the purchase price and takes title in the name of another the beneficial interest in the property enures to him by way of a resulting trust.); McPherson v. McPherson, 337 Mass. 611 , 613 (1958).
It may be argued, as it is here, that a resulting trust may be found even where the payor takes title in the names of himself and another jointly if it appears that a gift was not intended, however, that result is justified only where there is a finding that there was no intention on the part of the payor to create any beneficial interest in the other grantee. Lewis v. Mills, 32 Mass. App. Ct. 660 , 666-67 (1992). A resulting trust is said to arise if from the outset the person who supplies the purchase price intends to be the sole owner, despite the record. Id. at 665. Thus, nothing done after the completion of the purchase could effect the creation of a trust, but the manner in which the transaction was subsequently treated by [the parties] is significant of their understanding of its nature. Checovich v. Checovich, 339 Mass. 71 , 74-75 (1959).
Many of the cases cited by both parties deal with resulting trusts in favor of one who has supplied purchase money, but who does not appear on the deed. E.g., Checovich v. Checovich, 339 Mass. 71 (1959) (finding resulting trust where Fred Checovich supplied purchase funds, was not on deed); Murphy v. McKenzie, 1 Mass. App. Ct. 553 (1973) (finding resulting trust where payor did not take title because he did not want his wife to reach the property for her support); and Simmons v. Smith, 20 Mass. App. Ct. 775 (1985) (finding resulting trust where deed stood in name of plaintiffs parents, from whom he borrowed purchase price, but repaid during their lives). [Note 4]
In contrast are the cases where one party alone pays the purchase price, but takes title jointly with another. E.g., Lewis v. Mills, 32 Mass. App. Ct. 660 (1992) (no trust where decedent paid for property, title stood jointly in decedent and decedents then-fiancé); and McPherson v. McPherson, 337 Mass. 611 (1958) (no trust where husband paid purchase price, took title jointly with his wife). If any pattern can be identified from this small sample, it is that courts are apparently more enthusiastic to find a resulting trust when a payor would otherwise be totally excluded from ownership, than when the payor does appear on the deed, albeit not exclusively. An examination of the two above cases, Lewis v. Mills and McPherson v. McPherson is telling.
The litigation in Lewis v. Mills, supra, commenced in the Probate Court Department; the plaintiff was the administrator for the estate of a decedent, who at the time of his death, held title to property as a joint tenant with the defendant. 32 Mass. App. Ct. at 664. The decedent and the defendant were engaged to be married, and prior to acquiring locus, made an oral agreement that each was to sell the respective homes, pool the proceeds, and purchase a house together. Id. at 661-62. The decedent paid approximately $29,000 toward the locus, from the proceeds of his own home, and the decedent and the defendant financed the rest of the $64,900 purchase price with a loan secured by a mortgage under which they both were liable. 32 Mass. App. Ct. at 662. The defendant sold her home and kept the proceeds for herself. Id. at 662-63. For the entire time the two resided at the locus, the decedent made all payments on the mortgage loan, paid all taxes, utilities, and performed or paid for all upkeep and maintenance of the property. Id. at 663. On these facts, the judge in the Probate Court ruled that the defendant held her interest in the locus under a resulting or constructive trust, and ordered the defendant to convey to the plaintiff. 32 Mass. App. Ct. at 665.
The Appeals Court reversed, deciding that there was no showing the intent was other than to create a joint tenancy. 32 Mass. App. Ct. at 668. The Appeals Court ruled that [i]t is... significant that, while only one party provided cash for the down payment, both parties were signatories on the initial mortgage loan. 32 Mass. App. Ct. at 665. Also significant was that [n]othing has been made to appear here as to why the parties would have taken the property as joint tenants if their true intention was to have the entire beneficial interest go to the decedent. 32 Mass. App. Ct. at 667.
Similarly, in McPherson, supra, where both parties signed both the mortgage and the note, our Supreme Judicial Court overturned the trial judges determination that there was a resulting trust, ruling: Another factor militating against a resulting trust is the evidence that [appellant] obligated herself to repay the mortgage loan used for the purchase price to the same extent as [appellee]. It therefore cannot be said that [appellee] furnished the entire purchase price. 337 Mass. at 614.
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In light of the facts as I have found them, and the law as I am obliged to follow it, I conclude that Mr. Miller cannot sustain his burden of proving he did not intend Mr. Ryan to have any beneficial interest in the Property. Rather, Mr. Ryan and Mr. Miller, who were at the time great friends, jointly purchased this real estate as an investment.
The relevant inquiry in determining whether Ryan holds his interest in the Property in trust for Miller is focused on the moment of the conveyance of the Property. See Checovich, supra, at 74-75. I am not convinced there was, at the time these men took and recorded the 1993 deed, any intention that the beneficial interest in the Property would vest solely in Miller to the exclusion of Ryan. That Mr. Miller may have regretted this after their falling outand that Mr. Ryan appears poised to receive what to Miller seems a windfallcannot change this conclusion.
I do not reach this conclusion by giving Mr. Miller the benefit of any presumption [Note 5] that he is the sole beneficial owner based on his having paid the deposit, down payment, and closing costs. See Quinn, supra, at 502 (explaining doctrine of resulting trust based on natural presumption that payor intends to be owner). This is because it cannot be said that Mr. Miller paid the entire purchase price when Mr. Ryan obligated himself on the mortgage. See McPherson, supra, at 614; Lewis, supra, at 665 (It is also significant that, while only one party provided cash for the down payment, both parties were signatories on the initial mortgage loan.). It is true that, with the exception of one payment from Ryan in 2011, Miller made all the payments of interest and principal on the mortgage loan. However, the undertaking on the part of Ryan to be obligor on a forty-year note militat[es] against a resulting trust[.] See McPherson, supra, at 614.
Even discounting Mr. Ryans contribution by becoming a co-obligor, a resulting trust would only arise in the case where Mr. Miller has demonstrated that a gift was not intended[.] See Lewis v. Mills, supra, at 667. Based on the facts as I have found them, I cannot reach such a conclusion. Indeed, the opposite seems more likely: that there was some donative intent when Mr. Miller fronted the down payment and closing costs. This is particularly so in light of the close personal relationship between the parties at the time, and Mr. Millers demonstrated generosity towards his then friend.
Moreover, I am not convinced that Mr. Miller has demonstrated satisfactorily why the parties would have taken the property as joint tenants if their true intention was to have the entire beneficial interest go to the decedent. Lewis, supra, at 665. Mr. Millers explanation always has been that he needed Mr. Ryans creditworthiness to obtain financing. This explanation, however, is far from compelling. Ryan was unemployed at the time, had no income except for SSI and SSDI, had at least one credit account (the BayBank account) that was in arrears, and Miller routinely paid for Ryans share of the vacations they took together. Instead, it seems far more likely that Mr. Miller chose Mr. Ryan as his partner in this venture and as his co-owner because of their close personal relationship, and that any financial benefit to Miller was a natural incident of that. This conclusion stands even though I credit Mr. Millers testimony that his verifiable income as a waiter at the time showed about eight percent of his sales in tips, whereas he testified he made closer to twenty percent in tips.
Mr. Miller also is in a difficult position when it comes to the actions of the parties taken after the purchase, which normally might provide significant insight into the parties intent. See Checovich, supra, at 74-75. Here, the sudden and wholesale disintegration of the relationship between the parties in 1993 renders actions taken after that point not at all helpful in understanding their intent at the time they took their deed and executed the other closing papers. As a result, the fact that between 1993 and 2011, Mr. Ryan had nothing to do with the Property is not greatly probative of Mr. Millers July, 1993 understanding of the form of ownership of the Property at the time of acquisition. Nothing done after the completion of the purchase could affect whether a trust already had been created. See Checovich, supra, at 74-75.
I conclude, based on my evaluation of the evidence, my assessment of the credibility of the witnesses, and the facts as I find them to be based on the inferences I have drawn, that the joint tenancy reflected in the recorded deed to Mr. Miller and Mr. Ryan accurately reflects how they hold their title to the Property, and that partition lies in this case.
Accordingly, it is
ORDERED that petitioner Richard Ryan, III, and respondent Gregory A. Miller, do hold their true title to the Property in this action as equal joint tenants, and that partition does lie. It is further
ORDERED that within fourteen (14) days of the date of this Order, the parties and the commissioner shall file, jointly or severally, their collective or respective detailed views on the specific manner in which the court should proceed by warrant to direct that partition now be made by the commissioner.
[Note 1] Pursuant to G.L. c. 241, § 1 et seq., the court appointed a partition commissioner by Interim Order issued June 29, 2012. Paul R. ODonnell, Esquire (Commissioner), returned his Certificate of Commissioners Acceptance and Oath on July 9, 2012.
[Note 2] On June 5, 2013, the court held a pretrial conference, and held a hearing on petitioners motion for summary judgment, or in the alternative, to preclude trial testimony. The court denied the motion, which sought summary judgment based on the fact that respondent had, in 1993, signed an affidavit to a lender in a private mortgage lending context that is inconsistent with respondents current position on the state of the record title. Treating the motion as one filed in limine to preclude testimony at trial, the court also denied the motion, without prejudice to the petitioners ability to confront respondent with the affidavit at trial (should he testify) or to advance similar arguments in petitioners posttrial briefing.
[Note 3] The court, on October 3, 2013, also heard argument on a motion from petitioner styled as Motion to Strike the Post-Trial Memorandum of Respondent Gregory Miller Containing Specious and Scandalous Arguments, for Sanctions, and to Impound Said Stricken Memorandum. The court denied the motion.
[Note 4] But see Quinn v. Quinn, 260 Mass. 494 (1927). In Quinn, Daniel Quinn paid over one-third of the purchase price, the remaining two-thirds came from Daniels two siblings and their mother in unknown proportions. 260 Mass. at 501. The deed was in the name of the mother as trustee for all three children. 260 Mass. at 499-500. To placate the title concerns of a prospective mortgagee the property was transferred to the mother as trustee for herself, for life, then to Daniel free of all trust. 260 Mass. at 499-500. Daniel survived his mother but predeceased his two siblings, who sued Daniels estate for recognition of a resulting trust in their favor. 260Mass. at 500. The court declined to recognize such a trust because the siblings did not contribute a specified sum of money for a definite share of the estate. 260 Mass. at 502.
[Note 5] The word presumption in these cases does not appear to be the legal presumption that would shift a burden of proof, but rather an assumption of fact underlying the doctrine. See Quinn v. Quinn, 260 Mass. 494 , 501 (1927); Simmons v. Smith, 20 Mass. App. Ct. 775 , 779 (1985) and cases cited.