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Glass v. Gutman

March 19, 1954

GLASS
v.
GUTMAN



Waddill

Chester L. Glass, appellant, brought this action for a declaration of his rights and interest in certain real estate in Kenton County and also in the business being conducted on the premises.

Early in 1941, appellee's ex-husband, Max Gutman, called appellant at his home in Springfield, Ohio and told appellant that he was interested in purchasing the property and asked if appellant would like to invest some money in the venture. Glass and Gutman were good friends and Glass sent Gutman a check for $750. The purchase price of the property was $11,500 of which $1,500 was paid at the time of purchase and the balance of $10,000 was to be paid out of the profits from the operation of a fishing lake on the premises.

Later, Glass and Gutman agreed that Glass' interest in the business was not to be disclosed and it was also agreed that Glass was not to take any part in the operation of the lake. Gutman took a deed to the property in his own and appellee's name as husband and wife. Prior to 1946 there was no written expression of the interest Glass held in the property or in the business. There had not been any distribution of profits to Glass except on one occasion when Gutman gave Glass about $40 out of a slot machine.

In 1946, upon Glass' request for some document to show his interest in the property Gutman mailed to Glass the following document:

"Know All Men By These Presents:

"July 24, 1946,

"That Chester Glass of Springfield, Ohio, is half owner of the unimproved property known as Hatchet Lake, an area of approximately 38 acres, situated near the intersection of 16th and Monroe Streets at Covington, Ky. This property does not include the buildings now existing or those to be built in the future nor the reasonable area necessary for normal living with a right-of-way to and from said areas.

"s/s Max Gutman'.

Gutman explained the use of the word "unimproved' by saying that he was building a house and garage on the premises at his own expense. Gutman said that the value of the other buildings was negligible and that if they ever erected any building with lake funds, the document would be changed.

From that time to the inception of this suit in 1952, Glass received no share in the profits, no further document evidentiary of his ownership, and took no part in the operation of the business. In 1949 he asked Gutman for some further proof of his interest, but Gutman replied, "I hardly see how I could give you anything more valid than the document you hold now.' At that time Gutman and his wife were separated, and in 1951 Gutman made her a deed of general warranty to the lake property as part of a property settlement, which deed was duly recorded prior to the institution of this action. In 1952 appellee and Max Gutman were divorced. Appellee has continued to operate the lake business from the time of her separation from her husband.

Appellant contends that Gutman held the title to the property on an implied trust in his favor. He cites 40 Am.Jur., Partnership, Sec. 96, to support his contention.

However, the common-law rule that when a deed is made conveying land to one person and the consideration is paid by another a trust results in favor of the one paying the consideration has been changed by KRS 381.170 so that no trust results unless the person furnishing the consideration did not consent to the other person's taking title in his own name. McFarland v. McFarland, 263 Ky. 434, 92 S.W.2d 785.

KRS 381.170 was not, however, intended to affect the doctrine that equity will follow a fund and compel restitution as long as it can be identified and followed. Board of Trustees of Fordsville v. Postel, 121 Ky. 67, 88 S.W. 1065.

The court found as a fact, under ample evidence, that appellant knew from the beginning that his name was not connected with the record title ...


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