## Facts

- The dispute involved approximately 240 acres of farmland in Wells County, North Dakota, associated with John Mertz Sr. and his wife, Emilie H. Mertz.
- John and Emilie had six children; John Mertz Jr. was the youngest.
- Record title to portions of the property was outdated for many years; when the litigation began, record title to part of the land still remained in Emilie’s mother, Luise Stadelman, who died in 1929.
- John Sr. farmed the land until the 1940s. Thereafter, an older son, Lawrence, farmed the property (with a two-year interruption for military service).
- In 1957, Lawrence married and moved away, and John Jr. began farming the land.
- John Jr. testified that in 1958 or 1959, while he was still a teenager, his parents verbally gave him the farm so it would stay in the Mertz name because the older children had left.
- No deed was delivered. John Jr. testified his father believed John Jr. would receive a “tax deed” if he paid the property taxes.
- For roughly 40 years, John Jr. farmed the land without paying rent, paid the real estate taxes, insured the property listing himself as owner, and took the farm products and proceeds, including government farm-assistance payments.
- John Jr. continued farming even after marrying and living with his wife elsewhere, and he made improvements to the land, including building a dam.
- After Emilie died in 1974 and John Sr. later moved to a nursing home, John Jr. fenced the farmhouse area into pasture.
- John Sr. and a daughter certified in Social Security and medical-assistance documents that John Sr. no longer owned the land and received no rental income from it.
- After John Sr. died in 1993, the personal representative of his estate took possession in the spring of 1994 and leased the land to another farmer.
- John Jr. sued to quiet title against his siblings, the personal representative, and the tenant. The district court quieted title in John Jr., finding that his parents made an executed parol (oral) gift and that John Jr. made permanent, valuable improvements in reliance on the gift.
- The defendants appealed, arguing the statute of frauds barred enforcement of the verbal transfer and that the evidence did not satisfy the clear-and-convincing standard.

## Issues

1. Whether the trial court clearly erred in finding that John Mertz Jr. acquired the farmland through an executed parol (oral) gift from his parents.
2. Whether the statute of frauds barred recognizing the claimed oral gift in the absence of a written conveyance.
3. Whether the evidence of an executed gift and reliance was clear and convincing.

## Decision

- The North Dakota Supreme Court affirmed the judgment quieting title in John Mertz Jr.
- The court held the trial court’s finding that John Jr. acquired the property through an executed parol gift was supported by clear and convincing evidence and was not clearly erroneous.
- The statute of frauds did not defeat the claim because John Jr.’s long possession and reliance—shown by tax payments, owner-like control, and lasting improvements—supported enforcement of the gift.

## Legal Principles

- An oral gift of real property may be enforced when the donee proves by clear and convincing evidence that the gift was executed and that the donee’s reliance and performance are such that refusing enforcement would result in serious unfairness.
- Acts consistent with ownership—such as long-term exclusive possession, paying real estate taxes, taking all farm proceeds and government payments, insuring the property as owner, and making permanent, valuable improvements—support a finding of an executed parol gift.
- The statute of frauds generally requires a writing for conveyances of land, but equitable principles may allow enforcement where the donee’s possession and performance in reliance on the gift make it unjust to treat the transaction as unenforceable.
- In a bench trial, appellate review of factual findings (including whether an executed parol gift occurred) is under the clearly erroneous standard, and the appellate court gives weight to the trial court’s credibility determinations.

## Conclusion

The North Dakota Supreme Court affirmed quiet title in John Mertz Jr., concluding the trial court did not clearly err in finding an executed oral gift of the 240-acre farm, proven by clear and convincing evidence through decades of possession, tax payments, owner-like control of income and benefits, lasting improvements, and corroborating conduct by John Sr. indicating he no longer claimed ownership.


Mertz v. Arendt, 564 N.W.2d 294 (1997)