Price v. Reeves
Before: Sawyer
Synopsis
Resulting Trust.—Where the lender of money has assigned to him, as collateral security, a note and mortgage for a much larger sum on a third person, and afterwards agrees with the borrowers that at the foreclosure sale of the mortgaged premises he would purchase the property in the name of the borrowers, and would hold the same for their benefit, subject only to a lien for the money loaned, upon faith in which promise the borrowers take no further interest in the sale, but the lender, in his own name, purchases, and for a sum much less than the amount called for in the note, and makes the payment of the purchase by crediting the amount of his bid, less the costs, on the judgment, a trust is thereby created in favor of the borrowers, and equity will decree them a conveyance, if it is in the power of the lender to make a title unencumbered by any acts of his own.
Idem.—A party who purchases trust property, with a knowledge of the trust, occupies the same position with the original trustee.
Action for Loss Arising from a Breach op Trust. —In case the execution of a valid conveyance cannot be decreed, the beneficiaries of the trust are entitled to recover its value from those by whose wrongful acts it was lost.
Measure op Damages.—In such case the value of the property at the time of the commencement of the suit is the measure of damages.
Specific Contract Act.—If the beneficiaries of the trust .seek to recover by action the value of the property in dispute at the time of suit brought, and not to obtain the amount for which it has been sold, the relief sought is not within tho provisions of the Specific Contract Act, and a judgment payable therefor in gold coin will be reversed, unless the plaintiff consents to a modification thereof.
Sawyer, C. J., delivered the opinion of the Court: This case differs materially from Wright v. Boss. Prom the facts admitted by the pleadings and found by the Court, it appears that there was an express understanding that defendant, Beed, should foreclose the mortgage deposited with him as security, buy in the premises at the sale under the judgment, and hold them in place of the note and mortgage, as security only, for his loan. By his acts Beeves misled plaintiffs, and if they are upheld, the result would be a fraud upon the plaintiffs. The case is within the principle approved in Sandfoss v. Jones (35 Cal. 482.) The purchase was made with the property of Mrs. Price, subject only to the lien of Beeves, in accordance with the understanding that the property purchased should be substituted for the note and mortgage itself. There was, then, a resulting trust, and Beeves held the property in trust for Mrs. Price, to be conveyed to her upon the payment of his demand. Wilson took the land with knowledge of the trust, and therefore charged with it. But the property was conveyed to third parties, and placed beyond the power of Beeves and Wilson to convey. By their wrongful acts Mrs. Price lost her property. As she could not obtain the property itself, she was entitled to the value from these by whose wrongful acts it was lost, less the amount due from her to Reeves.
[461]We think, however, that there was error in rendering the judgment for coin. There was no contract in writing to pay coin, and the judgment is not for money received in a fiduciary capacity. The plaintiffs were not content to claim the money received for the land, but demanded and obtained a judgment for the value of the land, irrespective of the amount received for it. The Court could only find the value of the land, and render judgment for the amount in money generally. The case is not within the statutes authorizing a judgment for a specified kind of money. The judgment must be modified by striking out the clause requiring payment to be made in coin, or a new trial must be had.
Upon filing a stipulation by respondents within fifteen days, consenting that the judgment be modified by striking out the clause requiring payment in coin, the judgment will be modified accordingly; but in default thereof, an order will be entered reversing the judgment, and directing a new trial.
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