[Cite as Fannie Mae v. Winding, 2014-Ohio-1698.]



                                   IN THE COURT OF APPEALS

                          TWELFTH APPELLATE DISTRICT OF OHIO

                                          BUTLER COUNTY




FANNIE MAE,                                        :

        Plaintiff-Appellee,                        :   CASE NO. CA2013-09-179

                                                   :          OPINION
   - vs -                                                      4/21/2014
                                                   :

JULIA M. WINDING n.k.a. Gaines, et al.,            :

        Defendants-Appellants.                     :



            CIVIL APPEAL FROM BUTLER COUNTY COURT OF COMMON PLEAS
                              Case No. CV2012-07-2497



Plunkett Cooney, Amelia A. Bower, David L. VanSlyke, 300 East Broad Street, Suite 590,
Columbus, Ohio 43215, for plaintiff-appellee

Noel M. Morgan, Brian Howe, 215 East Ninth Street, Suite 500, Cincinnati, Ohio 45202, for
defendant-appellant

Steven C. Katchman, 137 North Main Street, Dayton, Ohio 45402, for defendant, Semma
Enterprises & Hawthorne Glen Nursing Center



        RINGLAND, P.J.

        {¶ 1} Appellant, Julia Winding Gaines, appeals from a decision of the Butler County

Court of Common Pleas granting summary judgment and a decree of foreclosure in favor of

appellee, Fannie Mae. For the reasons stated below, we affirm in part, reversed in part, and

modify the decision of the trial court.
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       {¶ 2} On January 30, 2006, Ligon Gaines purchased a home in Middletown, Ohio.

To finance the purchase, Ligon executed a promissory note in favor of Middletown Mortgage

in the principal amount of $91,500. In order to secure the note, Ligon also executed a

mortgage in favor of Mortgage Electronic Registration Systems, Inc. (MERS), as nominee for

Middletown Mortgage. Ligon was the only person who signed the note and mortgage. While

Ligon was listed as the sole borrower under the note and mortgage, the property was deeded

to "Ligon Gaines, an unmarried person, and Julia Winding, an unmarried person for their joint

lives remainder to the survivor of them." Subsequently, Middletown Mortgage transferred its

rights under the note to Flagstar Bank, which in turn endorsed the note in blank. Fannie Mae

is now in possession of the note. Additionally, MERS assigned its interest in the mortgage to

Fannie Mae.

       {¶ 3} In 2007, Ligon and Julia were married. In August 2011, Ligon died and by the

terms of the survivorship deed the entire interest in the property passed to Julia. Julia made

two loan payments after Ligon's death but thereafter was unable to afford the mortgage and

ceased the monthly payments.

       {¶ 4} On July 6, 2012, Fannie Mae filed a foreclosure complaint against Julia. Julia

counterclaimed, requesting a declaratory judgment that she owned the property

unencumbered by Fannie Mae's mortgage. Fannie Mae then moved for summary judgment.

In its summary judgment motion, Fannie Mae argued that its mortgage was enforceable

against Julia because she took the property "subject to" the mortgage. Additionally, Fannie

Mae maintained that even if the mortgage was not enforceable against Julia, the court should

impose an equitable lien, constructive trust, or purchase-money resulting trust to allow it to

foreclose upon the property. Julia filed a cross-motion for summary judgment requesting that

the court find her home is unencumbered by the mortgage and that Fannie Mae is not

entitled to an equitable remedy.

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       {¶ 5} In support of its summary judgment motion, Fannie Mae submitted Julia's

deposition. Julia explained that at the time of purchase of the home, she and Ligon were not

married but had lived together for 30 years. The couple had shared a home and household

expenses and raised Julia's children together. In 2005, the couple decided to purchase a

home. The pair decided that Ligon would finance the home individually as Ligon earned

substantially more money than Julia. Due to an injury, Julia had not worked for several years

and received only social security income. At the time of closing, Ligon paid the entire $5,000

down payment. The closing was attended by both Ligon and Julia.

       {¶ 6} During her deposition, Julia gave various reasons as to why her name was

included on the deed. At first, she stated that she did not "make any demand" upon Ligon

that she be included on the deed. Later, she testified that they always had the understanding

that Ligon would purchase a home but the couple would jointly own the property. Julia stated

that no one from Middletown Mortgage said that her name would have to be included on the

mortgage and note in order for the home to be purchased. Julia also acknowledged that she

would have refused to sign the mortgage and the note because she was unable to afford the

mortgage payments.

       {¶ 7} On September 4, 2013, the trial court granted summary judgment in favor of

Fannie Mae and denied Julia's cross-motion for summary judgment. The court reasoned that

Fannie Mae does not have a "valid first mortgage lien upon the premises as against" Julia.

However, the court found that based upon the undisputed facts set forth by Julia, Fannie Mae

"is entitled to the imposition of an equitable lien, constructive trust, and/or purchase-money

resulting trust as to any/all legal and/or equitable interest" in the property and is entitled to

foreclose upon the property.

       {¶ 8} Julia now appeals, asserting two assignments of error:

       {¶ 9} Assignment of Error No. 1:

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        {¶ 10} THE TRIAL COURT ERRED BY RULING THAT [JULIA'S] PROPERTY

INTEREST IS ENCUMBERED BY HER LATE HUSBAND'S MORTGAGE.

        {¶ 11} Assignment of Error No. 2:

        {¶ 12} THE TRIAL COURT ERRED BECAUSE IT LACKED EQUITABLE POWER TO

DISPOSSESS [JULIA] OF HER OWNERSHIP INTERESTS IN FAVOR OF FANNIE MAE.

        {¶ 13} Julia makes two arguments on appeal as to why the trial court erred in denying

her motion for summary judgment and granting summary judgment and a decree of

foreclosure in favor of Fannie Mae. First, Julia argues that granting foreclosure was improper

because her property interest was not burdened by the mortgage pursuant to the survivorship
                                        1
tenancy statute, R.C. 5302.20.              Second, Julia argues that the court erred in imposing an

equitable lien, constructive trust, and/or a purchase-money resulting trust as to any legal or

equitable interest of Julia.

        {¶ 14} This court reviews a trial court's decision on summary judgment under a de

novo standard of review. Fifth Third Mtge. Co. v. Bell, 12th Dist. Madison No. CA2013-02-

003, 2013-Ohio-3678, ¶ 24. Summary judgment is appropriate under Civ.R. 56 when (1)

there is no genuine issue of material fact remaining to be litigated, (2) the moving party is

entitled to judgment as a matter of law, and (3) reasonable minds can come to but one

conclusion and that conclusion is adverse to the nonmoving party, who is entitled to have the

evidence construed most strongly in his favor. BAC Home Loans Serv., L.P. v. Kolenich, 194

Ohio App.3d 777, 2011-Ohio-3345, ¶ 17 (12th Dist.), citing Zivich v. Mentor Soccer Club,

Inc., 82 Ohio St.3d 367, 369-370 (1998). The party requesting summary judgment bears the

initial burden of informing the court of the basis for the motion and identifying those portions



1. In her first assignment of error, Julia mischaracterizes the trial court's holding as finding that her interest was
subject to the mortgage under R.C. 5302.20. We note that the trial court actually found that Fannie Mae did not
possess a valid mortgage lien against Julia and therefore imposed an equitable remedy. Nevertheless, because
our review is de novo, we will discuss Julia's interest in relation to R.C. 5302.20.

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of the record that demonstrate the absence of a genuine issue of material fact. Bell at ¶ 24.

Once a party moving for summary judgment has satisfied its initial burden, the nonmoving

party must then rebut the moving party's evidence with specific facts showing the existence

of a genuine triable issue; it may not rest on the mere allegations or denials in its pleadings.

Id.; Civ.R. 56(E).

       {¶ 15} Foreclosure requires a two-step process. Natl. City Bank v. Skipper, 9th Dist.

Summit. No. 24772, 2009-Ohio-5940, ¶ 25. A party seeking to foreclose on a mortgage must

establish execution and delivery of the note and mortgage, a valid recording of the mortgage,

that it is the current holder of the note and mortgage, default, and the amount owed. BAC

Home Loans Servicing, L.P. v. Kolenich, 194 Ohio App.3d 777, 2011-Ohio-3345 (12th Dist.),

quoting Countrywide Home Loans, Inc. v. Baker, 10th Dist. Franklin No. 09AP-968, 2010-

Ohio-1329, ¶ 8. "Once a court has determined that a default on an obligation secured by a

mortgage has occurred, it must then consider the equities of the situation in order to decide if

foreclosure is appropriate." Skipper at ¶ 25.

                                   Survivorship Tenancy

       {¶ 16} This case requires us to analyze Ohio's survivorship tenancy statute, R.C.

5302.20. Statutory interpretation is a matter of law, and therefore requires de novo review.

State v. Niesen-Pennycuff, 12th Dist. Warren No. CA2010-11-112, 2011-Ohio-2704, ¶ 6. We

look to the plain language of the statute to determine the intent of the General Assembly.

State v. Hause, 12th Dist. Warren No. CA2008-05-063, 2009-Ohio-548, ¶ 13, citing State ex

rel. Burrows v. Indus. Comm., 78 Ohio St.3d 78, 81 (1997). A court does not need to

interpret a statute "when statutory language is plain and unambiguous and conveys a clear

and definite meaning." Niesen-Pennycuff at ¶ 12, quoting Campbell v. City of Carlisle, 127

Ohio St.3d 275, 2010-Ohio-5707, ¶ 8. When the meaning of the statute is "clear and

unambiguous," the statute is to be applied "as written." Boley v. Goodyear Tire & Rubber

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Co., 125 Ohio St.3d 510, 2010-Ohio-2550, ¶ 20.

       {¶ 17} R.C. 5302.20, Ohio's survivorship tenancy statute provides,

              (A) * * * [i]f any interest in real property is conveyed or devised to
              two or more persons for their joints lives and then to the survivor
              or survivors of them, those persons hold title as survivorship
              tenants, and the interest created is a survivorship tenancy. * * *

              (B) If two or more persons hold an interest in the title to real
              property as survivorship tenants, each survivorship tenant holds
              an equal share of the title during their joint lives unless otherwise
              provided in the instrument creating the survivorship tenancy.
              Upon the death of any of them, the title of the decedent vests
              proportionately in the surviving tenants as survivorship tenants. *
              * * [when] only one survivorship tenant remains alive, * * * the
              survivor is fully vested with title to the real property as the sole
              title holder.

       {¶ 18} Both parties concede and we agree that pursuant to R.C. 5302.20(A), Ligon

and Julia owned the property as survivorship tenants as the deed granted Ligon and Julia the

property, "for their joint lives, remainder to the survivor of them." Due to the survivorship

tenancy, Ligon and Julia each owned equal shares in the property. R.C. 5302.20(B). The

parties also agree that upon Ligon's death, his one-half interest passed to Julia by virtue of

the survivorship tenancy. Id. The issue in this case is what effect the vesting of the entire

survivorship interest in Julia had upon Fannie Mae's mortgage.

       {¶ 19} R.C. 5302.20(C) discusses the ramifications and characteristics of survivorship

tenancy.    Subsection (C)(2) discusses conveyances from survivorship tenants to

nonsurvivorship tenants.

              * * * A conveyance from any survivorship tenant, or from any
              number of survivorship tenants that is from less than all of them,
              to a person who is not a survivorship tenant vests the title of the
              grantor or grantors in the grantee, conditioned on the
              survivorship of the grantor or grantors of the conveyance, and
              does not alter the interest in the title of any of the other
              survivorship tenants who do not join in the conveyance.

(Emphasis added.) R.C. 5302.20(C)(2).


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       {¶ 20} Julia argues that pursuant to R.C. 5302.20(C)(2), Fannie Mae's interest in the

property was conditioned upon Ligon's survival. She asserts that upon his death, Fannie

Mae's mortgage was extinguished. In support of this proposition, Julia cites several cases

which have found that a conveyance of title from one survivorship tenant to a nonsurvivorship

tenant was conditioned on the survival of the granting tenant. Murphy v. Murphy, 77 Ohio

App.3d 573 (1st Dist.1991); Wilson v. Brown, 4th Dist. Lawrence No. 07CA13, 2008-Ohio-

1743. In both Murphy and Wilson, the courts found that a survivorship tenant cannot deed

away more of an interest than he possessed. Murphy at 576; Wilson at ¶ 16. Therefore, the

conveyances of title from the survivorship tenants to a third party were conditioned on that

tenant outliving all other survivorship tenants. Id. Upon the deeding tenant's death, the

property was fully vested in the remaining tenant and the third party's interest was

extinguished. Id. See Brown v. Brown, 95 Ohio Misc.2d 38 (C.P.1998).

       {¶ 21} However, we find that subsection (C)(2) is inapplicable to the case at bar

because it does not address the effect of conveying a mortgage. R.C. 5302.20(C)(2)

provides that a "conveyance from any survivorship tenant" to a nonsurvivorship tenant "vests

title" of the grantor in the grantee, conditioned on the survivorship of the grantor.

Conveyance is defined as a "voluntary transfer of a right or of property." Black's Law

Dictionary (9th ed. 2009). While a mortgage could be described as "voluntari[ly] transfer[ing]

a right" in a property, the statute goes on to provide that this conveyance vests title in the

nonsurvivorship tenant conditioned on the survivorship of the grantor. In Ohio, a mortgage is

merely a security for a debt, and the legal and equitable title to the property remains in the

mortgagor until the mortgage is foreclosed and a sale consummated, or until a mortgagee

otherwise extinguishes the right of the mortgagor to redeem. Stand Energy Corp. v. Epler,

163 Ohio App.3d 354, 2005-Ohio-4820 (10th Dist.), ¶ 13; Kirshner v. Fannie Mae, 6th Dist.

Lucas No. L-11-1027, 2012-Ohio-286, ¶ 16-17. Because the plain language of the statute

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addresses "title" and under Ohio law mortgages do not convey title, we find that subsection

(C)(2) does not apply to the situation where a survivorship tenant mortgages his or her

interest in a property.

       {¶ 22} Our interpretation of R.C. 5302.20(C)(2) is also not in conflict with Murphy and

Wilson. In both of these cases, a survivorship tenant conveyed title to a nonsurvivorship

tenant. As discussed above, Ligon did not convey title to Fannie Mae but instead granted

Fannie Mae a security interest for a debt. Therefore, these cases are distinguishable and do

not provide that Fannie Mae's interest was conditioned on Ligon's survival of Julia.

Consequently, R.C. 5302.20(C)(2) does not control our analysis when a survivorship tenant

mortgages his or her interest in a property.

       {¶ 23} Therefore, upon Ligon's death, his interest immediately vested in Julia and she

owned the entire property pursuant to R.C. 5302.20(B). While full title to the property

immediately vested in Julia, this did not extinguish Fannie Mae's mortgage because the

mortgage is merely a security for a debt until there is a default on the note and the mortgage

is foreclosed and a sale consummated. Instead, the mortgage follows the property and Julia

took the property subject to the mortgage.

       {¶ 24} Our interpretation of the statute is further supported by subsection (C)(4). R.C.

5302.20(C)(4) provides,

              A creditor of a survivorship tenant may enforce a lien against the
              interest of one or more survivorship tenants by an action to
              marshall liens against the interest of the debtor or debtors.
              Every person with an interest in or lien against the interest of the
              debtor or debtors shall be made a party to the action. Upon a
              determination by the court that a party or cross-claimant has a
              valid lien against the interest of a survivorship tenant, the title to
              the real property ceases to be a survivorship tenancy and
              becomes a tenancy in common. Each tenant in common of that
              nature then holds an undivided share in the title. The interest of
              each tenant in common of that nature shall be equal unless
              otherwise provided in the instrument creating the survivorship
              tenancy. The court then may order the sale of the fractional

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              interest of the lien debtor or debtors as on execution, and the
              proceeds of the sale shall be applied to pay the lien creditors in
              order of their priority.

       {¶ 25} This section clearly provides a procedure for creditors to enforce the liens given

by one survivorship tenant against all the survivorship tenants of a property. The section

allows a creditor "of a survivorship tenant" to enforce the action against the interest of "one or

more survivorship tenants," and thus contemplates a creditor enforcing an action against

survivorship tenants who did not grant the lien. This provision shows that legislators provided

a procedure for creditors to enforce their action against a survivorship tenancy and not

extinguish the lien upon the death of the debtor-survivorship tenant. At the time Ligon

mortgaged his interest in the property, Fannie Mae's predecessor-in-interest was a "creditor

of a survivorship tenant," and therefore Fannie Mae could file a foreclosure action and make

"every person with an interest in" the property a party.

       {¶ 26} Additionally, the interpretation of the statute advanced by Julia would create

commercial uncertainty and allow debtors to avoid claims of creditors simply by the way

property is held. Allowing a debtor-survivorship tenant to receive money by offering the

property as security for a debt and then extinguishing that debt upon that debtor's death

without providing the lender any recourse would be unreasonable. Further, permitting this

result would discourage lenders from financing home purchases for couples when one

person is unable to obtain financing for the purchase of a home but the couple wishes to hold

the property in survivorship tenancy.

       {¶ 27} While Fannie Mae's mortgage was not extinguished upon Ligon's death, its

mortgage does not encumber the entire property. R.C. 5301.02 provides:

              Every grant, conveyance, or mortgage of lands, tenements, or
              hereditaments shall convey or mortgage the entire interest which
              the grantor could lawfully grant, convey, or mortgage, unless it
              clearly appears by the deed, mortgage, or instrument that the
              grantor intended to convey or mortgage a less estate.

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(Emphasis added.)

       {¶ 28} It is axiomatic that a "mortgagor can only bind the estate or property he has,

and 'a mortgagee can take no greater title than that held by the mortgagor.'" In re Knisley,

437 B.R. 253, 258 (Bankr.S.D.Ohio 2010). When a survivorship tenant mortgages his

interest in the property, the mortgage only encumbers the interest in the property that the

survivorship tenant held when he executed the mortgage. Id. Therefore, the mortgagee can

only foreclose upon the interest owned by the survivorship tenant when he executed the

mortgage. Id.; see White v. Parks, 9th Dist. Summit No. 24391, 2009-Ohio-703, ¶ 11.

       {¶ 29} Pursuant to the deed, Ligon owned the property as a survivorship tenant with

Julia. Under R.C. 5302.20(B), Ligon and Julia each held an "equal share of the title during

their joint lives." Therefore, when Ligon mortgaged his interest in the property, he only

mortgaged his one-half share. Ligon could not mortgage the entire property as he did not

hold exclusive title to the entire property. Consequently, Fannie Mae's mortgage encumbers

only Ligon's undivided one-half interest in the property.

       {¶ 30} Therefore, we find that the court erred when it found that Fannie Mae did not

have an enforceable mortgage against Julia. R.C. 5302.20 does not provide that a lien is

extinguished upon the debtor-survivorship tenant's death. Instead, R.C. 5302.20(C)(4)

explicitly provides a procedure for creditors of a survivorship tenant to enforce their interest

against nondebtor survivorship tenants. While Julia took the property subject to Fannie

Mae's mortgage, Fannie Mae can only enforce its mortgage against Ligon's one-half interest

in the property because Ligon only held a one-half interest and could only mortgage what he

owned. Therefore, Fannie Mae may seek to enforce the mortgage against the property

pursuant to R.C. 5302.20(C)(4), but it may only seek to enforce its security interest against

Ligon's fractional share in the property.


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       {¶ 31} Thus, the court erred in finding that Fannie Mae did not possess a valid

mortgage lien against Ligon's interest in the property. Nevertheless, based on our finding

that Julia's interest was subject to Fannie Mae's foreclosure action, we overrule the first

assignment of error.

                                       Equitable Remedy

       {¶ 32} Although the trial court found that Fannie Mae did not have a valid mortgage

against Julia, the court used its powers in equity to impose an equitable lien, constructive

trust, and/or a purchase-money resulting trust to allow Fannie Mae to foreclose upon the

entire property. While we have found that Fannie Mae's mortgage was not extinguished

upon Ligon's death, Fannie Mae's mortgage only encumbered one-half of the property.

Therefore, we will address whether Fannie Mae is entitled to the imposition of an equitable

remedy against Julia's interest.

       {¶ 33} In her brief, Julia argues that because the deed, the note, and the mortgage

were unambiguous contracts, the court should have merely enforced the documents and

refused to look to extrinsic evidence to impose an equitable remedy. When confronted with

an issue of contract interpretation, our role is to give effect to the intent of the parties. Pierce

Point Cinema 10, L.L.C. v. Perin-Tyler Family Found., L.L.C., 12th Dist. Clermont No.

CA2012-02-014, 2012-Ohio-5008, ¶ 11, citing Sunoco, Inc. v. Toledo Edison Co., 129 Ohio

St.3d 397, 2011-Ohio-2720, ¶ 37. When the language of a written contract is clear, a court

may look no further than the writing itself to find the intent of the parties. Pierce Point at ¶ 13.

However, when a contract is ambiguous, a court may consider extrinsic evidence to ascertain

the parties' intent. Id.

       {¶ 34} While the deed, the note, and the mortgage are unambiguous, Fannie Mae

specifically requested in its complaint that the trial court impose an equitable remedy to allow

it to foreclose on the entire property. A deed is not itself "determinative of all interests in the

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property." Danadic v. McCloskey, 11th Dist. Trumbull No. 2010-T-0032, 2010-Ohio-5660, ¶

34. Instead, courts impose equitable remedies in regards to interests in real property and

look to extrinsic evidence in this determination. Katz v. Banning, 84 Ohio App.3d 543,

551(10th Dist.1992); Estate of Cowling v. Estate of Cowling, 109 Ohio St.3d 276, 2006-Ohio-

2418, ¶ 18. See Danadic at ¶ 33-35 (parol evidence admissible to determine equitable

interest); Latina v. Woodpath Dev. Co., 57 Ohio St.3d 212, 214 (1991) (equitable reformation

requires evidence between parties that contract does not represent final agreement).

Therefore, the court did not err in considering extrinsic evidence when determining whether

to impose an equitable remedy.

       {¶ 35} We now consider whether an equitable remedy should be imposed against

Julia's one-half interest in the property. The trial court imposed an equitable lien in favor of

Fannie Mae. "An equitable lien is a right, not acknowledged in law, to have a fund, or

specific property, or its proceeds, applied, in whole or in part to the payment of a particular

debt or class of debts. It is merely a charge on property for the purpose of security and is

ancillary to and separate from the debt itself." Campbell v. Krupp, 195 Ohio App.3d 573,

2011-Ohio-2694, ¶ 65 (6th Dist.), quoting 66 Ohio Jurisprudence 3d, Liens, Section 16

(2011). An equitable lien arises from either "(1) a written agreement indicating an intent to

make a particular property a security for a debt or obligation, or (2) from implication by a court

of equity upon consideration of right and justice as applied to the relations of the parties and

the circumstances of their dealings." Katz v. Banning, 84 Ohio App.3d 543, 551 (10th

Dist.1992), citing Syring v. Sartorious, 28 Ohio App.2d 308, 311 (4th Dist.1971).

       {¶ 36} We find that Fannie Mae is not entitled to an equitable lien over Julia's one-half

interest in the property. As discussed previously, Ligon merely granted a lien of his one-half

interest to Fannie Mae's predecessor-in-interest when he mortgaged the property. See

Knisley, 437 B.R. at 258. Therefore, even before Ligon's death, the most Fannie Mae's

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mortgage was secured by was a one-half interest. Even if Ligon had not died, Fannie Mae

would only be entitled to foreclose upon Ligon's one-half interest in the property. White, 9th

Dist. Summit No. 24391, 2009-Ohio-703 at ¶ 11; R.C. 5302.20(C)(4). Thus, under the

principles of equity, we find that an equitable lien should not be imposed against Julia's

interest. We find this remedy to be equitable in light of the lack of any conduct on behalf of

Julia that was fraudulent or unjust and the fact that Fannie Mae, a sophisticated commercial

lender, made a series of dilatory actions even though the deed, mortgage, and note made

clear the nature of the ownership of the property. See Wells Fargo v. Mowery, 187 Ohio

App.3d 268, 2010-Ohio-1650, ¶ 38 (4th Dist.).

       {¶ 37} Fannie Mae also argues that a constructive trust should be imposed. A

constructive trust is a

              Trust by operation of law which arises contrary to intention and in
              invitum, against one who, by fraud, actual or constructive, by
              duress or abuse of confidence, by commission of wrong, or by
              any form of unconscionable conduct, artifice, concealment, or
              questionable means, or who in any way against equity and good
              conscience, either has obtained or holds the legal right to
              property which he ought not, in equity and good conscience, hold
              and enjoy. It is raised by equity to satisfy the demands of justice.

Estate of Cowling, 2006-Ohio-2418 at 18, quoting Ferguson v. Owens, 9 Ohio St.3d 223, 225

(1984). A constructive trust is considered a trust because "'[w]hen property has been

acquired in such circumstances that the holder of the legal title may not in good conscience

retain the beneficial interest, equity converts him into a trustee.'" Cowling at ¶ 18.

       {¶ 38} A constructive trust is an equitable remedy that protects against unjust

enrichment and is usually invoked when property has been obtained by fraud. Cowling at ¶

19. "[A] constructive trust may also be imposed where it is against the principles of equity

that the property be retained by a certain person even though the property was acquired

without fraud." Id., quoting Ferguson at 226. "In applying the theories of constructive trusts,


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courts also apply the well-known equitable maxim, 'equity regards [as] done that which ought

to be done.'" Cowling at ¶ 19, quoting Ferguson at 226. The party seeking to have a

constructive trust imposed bears the burden of proof by clear and convincing evidence. Univ.

Hosps. of Cleveland, Inc. v. Lynch, 96 Ohio St.3d 118, 2002-Ohio-3748, paragraph three of

the syllabus.

       {¶ 39} We find that Fannie Mae is not entitled to a constructive trust over Julia's

interest in the property. While Fannie Mae has not alleged that Julia obtained an interest in

the property fraudulently, a constructive trust may also be imposed where it would be against

the principles of equity for Julia to retain an interest in the property free and clear of Fannie

Mae's mortgage. Equity does not require a constructive trust to be imposed against Julia's

interest inasmuch as Fannie Mae is a commercial lender who had notice that Julia was not a

party to the note or mortgage. Additionally, as discussed above, the most interest Fannie

Mae's mortgage encumbered was a one-half interest. Thus, under the principles of equity,

we find that a constructive lien should not be imposed over Julia's one-half interest in the

property.

       {¶ 40} Lastly, Fannie Mae argues that it is entitled to a purchase-money resulting trust.

A resulting trust is based on the parties' intentions. Brate v. Hurt, 174 Ohio App.3d 101,

2007-Ohio-6571, ¶ 28 (12th Dist.), citing Gabel v. Richley, 101 Ohio App.3d 356, 363 (2d

Dist.1995). A resulting trust arises when property is transferred under circumstances that

raise an inference that the transferor, or the person who caused the transfer, did not intend

the transferee to take a beneficial interest in the property. Brate at ¶ 28.

       {¶ 41} There are three types of resulting trusts, one of which is a purchase-money

resulting trust. Brate at ¶ 29, citing First Natl. Bank of Cincinnati v. Tenney, 165 Ohio St. 513

(1956). A purchase-money resulting trust "arises where title to property is transferred to one

person, but the purchase price is paid by another." Brate at ¶ 30, quoting Gabel at 364.

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"Such a situation raises an inference that the title-holder is not intended to possess a

beneficial interest in the property." Brate at ¶ 30.

       {¶ 42} In such a case, a resulting trust arises in favor of the person by whom the

purchase price is paid. Rardin v. Estate of Bain, 7th Dist. Carroll No. 08 CA 853, 2009-Ohio-

3332, ¶ 83. Central to the determination of whether a purchase-money resulting trust exists

are the issues of (1) who paid for the purchase and (2) who was intended to beneficially

enjoy the property. Id. The burden of proof to establish a purchase-money resulting trust is

clear and convincing evidence. Ohman v. Ohman, 5th Dist. Stark No. 2001CA214, 2001 WL

1673714, *2 (Dec. 27, 2001).

       {¶ 43} Fannie Mae is also not entitled to a purchase-money resulting trust over Julia's

interest in the property. A purchase-money resulting trust arises when property is transferred

under circumstances that raise an inference that the transferor did not intend for the

transferee to take a beneficial interest in the property. In this case, the evidence established

that Julia was intended to have a beneficial interest in the property as her name was on the

deed of the property, she lived with Ligon for 30 years, the couple had discussed that they

would buy a house together, and Ligon would hold the mortgage while Julia would be on the

deed. While Julia did not contribute to the mortgage payments until after Ligon's death, she

did maintain the home. Therefore, Fannie Mae is not entitled to a purchase-money resulting

trust over Julia's one-half interest in the property.

       {¶ 44} Julia's second assignment of error is sustained.

                                          Conclusion

       {¶ 45} The trial court did not err in granting summary judgment and a decree of

foreclosure in favor of Fannie Mae. However, the trial court erred in both determining that

Fannie Mae did not possess a valid mortgage lien and imposing an equitable remedy to allow

Fannie Mae to foreclose upon the property. Instead, under R.C. 5302.20, Fannie Mae's

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mortgage was not extinguished upon Ligon's death and Julia took the property subject to the

mortgage. Fannie Mae's mortgage only encumbered Ligon's one-half interest in the property.

Additionally, Fannie Mae is not entitled to an equitable remedy in regards to Julia's one-half

interest in the property.

       {¶ 46} Fannie Mae's mortgage is enforceable against Julia and the property may be

sold to enforce Fannie Mae's mortgage. We note that in effectuating this sale, the trial court

may order the sale of the entire property and preserve Julia's one-half interest by ordering

that she be paid before any sale proceeds are directed to judgment creditors. See White, 9th

Dist. Summit No. 24391, 2009-Ohio-703 at ¶ 11. In all other respects the judgment of the

trial court is affirmed.


       HENDRICKSON and PIPER, JJ., concur.




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