Kully v. Goldman
1981 Neb. LEXIS 853, 305 N.W.2d 800, 208 Neb. 760 (1981)
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Rule of Law:
A present trust requires a defined interest or ascertainable object of ownership (res), and a promise to create a future trust or an agreement for specific performance, especially when dependent on a third party's discretion, must be supported by consideration to be enforceable.
Facts:
- Around 1961, Robert I. Kully and William A. Goldman entered into an oral agreement.
- Goldman agreed to obtain four season tickets for his own use and four for Kully to University of Nebraska varsity football games.
- Goldman made the ticket reservations in his own name.
- From about 1961 until 1979, with the exception of 1972, Goldman annually purchased the eight tickets.
- Kully annually paid Goldman for his four tickets either before or after Goldman obtained them.
- In 1971, Kully attempted to have the four season tickets transferred into his own name, but a university agent declined the request.
- The university agent explained that seats in the east stadium (where Kully's tickets were) were being held for students and would not be reassigned or transferred.
- Goldman had no contractual right with the University of Nebraska that bound it to annually sell him tickets upon tender of the purchase price.
Procedural Posture:
- Robert I. Kully initiated an action in the District Court for Douglas County against William A. Goldman, seeking to temporarily and permanently enjoin Goldman from withholding the transfer of season tickets and to have Goldman declared a trustee of said tickets.
- The District Court found that for the 1979 season tickets, an accord and satisfaction had occurred, and denied relief for that season.
- For future seasons, the District Court found an implied trust existed and issued a mandatory injunction, requiring Goldman to obtain the described tickets for Kully for all future seasons, contingent upon Kully tendering the retail price and executing a $500 undertaking.
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Issue:
Does a promise to annually acquire and transfer season tickets to football games constitute a legally recognized res for a present trust, or a specifically enforceable future trust, when the promisor has no contractual right to obtain such tickets from a third party and the promise lacks consideration?
Opinions:
Majority - Clinton, J.
No, a promise to annually acquire and transfer season tickets does not constitute a legally recognized res for a present trust, nor is it a specifically enforceable future trust, because the promisor (Goldman) had no enforceable property right to obtain the tickets from the university and the promise lacked consideration. The Court reasoned that for any present trust (express, resulting, or constructive) to exist, there must be a 'defined interest or ascertainable object of ownership' or res. In this case, Goldman possessed no contractual right with the University of Nebraska compelling it to sell him tickets annually; his ability to obtain tickets was merely an expectancy, not an enforceable property right. The university explicitly stated its option not to honor future reservations for those seats. Furthermore, a promise to create a trust in the future, or any agreement for specific performance, must be supported by consideration, which was absent here for Goldman's ongoing services. The trial court's implied finding of no consideration was upheld, and Kully presented no evidence to the contrary. Equity will not grant specific performance if the decree could be made 'nugatory' by the action of a third party, which would be the case if the university chose not to sell tickets to Goldman. While a resulting trust could arise if one person furnishes money for specific tickets at the time of purchase, the ongoing, future arrangement lacked the necessary elements. Kully's alternative theories of agency and breach of contract also failed due to lack of consideration and proof of monetary damages. The judgment regarding the 1979 tickets was affirmed, but the balance concerning future tickets was reversed with directions to dismiss.
Dissenting - Reimer, District Judge
Implicitly, yes, a right should be recognized and partitioned. The dissenting opinion argued that the majority placed undue emphasis on the absence of monetary consideration. Citing prior Nebraska cases like Litz v. Wilson and Kinkenon v. Hue, the dissent contended that the court had previously accepted nominal or non-monetary consideration, such as a nominal downpayment or a 'live-in' arrangement, as sufficient. In the present case, the 'real consideration' lay in the 'mutuality of the promises exchanged' and the 17 years of recognized performance by both parties. The dissent would have affirmed the District Court's decision in part and remanded the matter to partition any existing right to renew the tickets for the four seats Kully had used, implying a recognition of some ongoing equitable interest.
Analysis:
This case underscores fundamental principles in trust and contract law, particularly the requirement of an identifiable res for a trust and consideration for contract enforceability, especially regarding specific performance. It clarifies that a mere expectancy, no matter how reliable in practice, does not constitute a property right sufficient to create a trust or support specific performance if that expectancy is entirely dependent on the discretion of a third party. The ruling limits the scope of equitable remedies for promises lacking formal contractual elements, emphasizing that courts will not compel actions that could be nullified by non-parties.
