O'Connor v. Irvine

California Supreme Court Dec 28, 1887 No. No. 9704Published

Before: Paterson

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Holding. The court held that a judgment in an ejectment action does not preclude a subsequent action to declare a trust, but reversed the judgment because the trial court failed to join a necessary party, Selover, whose interest in the trust property would be prejudiced by the decree.

Issues

Whether a judgment in an ejectment action bars a subsequent action to declare a trust.
Whether the failure to join a necessary party in a trust action requires reversal of the judgment.

Disposition. reversed

Quotations verified verbatim against the opinion

“In the absence of Selover as a party, a complete determination of the controversy, we think, cannot be had without prejudice to his, Selover’s, rights.”

Synopsis

Appeal from a judgment of the Superior Court of the city and county of San Francisco, and from an order refusing a new trial.

On the 26th of April, 1860, A. Gray Morgan died intestate in the city and county of San Francisco, being at the time the owner of an undivided half-interest in a mine situated in Calaveras County, state of California, known as the Morgan mine. On the 4th of January, 1861, letters of administration upon his estate were issued to B. H. Sinton, who, as such administrator, sold to James G. Fair the interest of Morgan in the mine, the purchase being made by Fair for account of himself and one A. A. Selover. The sale was confirmed by the probate court on the 18th of November, 1861, and on the 18th of December, 1861, Sinton executed a deed to Fair for the interest sold. At the time of the sale the property was in the adverse possession of third parties, against whom Fair instituted legal proceeding to recover its possession. At the close of this litigation, in 1867, Fair was put in possession of the property, and was proceeding to work it when he discovered that other persons had an interest in the mine. On the 22d of September, 1868, the property was listed for assessment, and such proceedings were thereafter had, that, on the 10th of July, 1869, legal proceedings were instituted in the district court of the eleventh judicial district, in the name of the people, for the recovery of the tax due and delinquent under this assessment. On the 25th of October, 1869, judgment was rendered in the action, in favor of the people, for the amount of the tax. On the 9th of November, 1869, an order of sale was issued on this judgment, and on the 28th of December, 1869, the property was sold at the execution sale to William Irvine, to whom, on the 29th of July, 1870, a sheriff’s deed was issued. This purchase at the execution sale was made by Irvine for the joint account of Fair and Selover. On the 19th of October, 1870, Irvine, under the judgment and sheriff’s deed, obtained possession of the property; and from that time up to the 1st of October, 1872, the court found that he kept possession of it as the agent and trustee of Fair, when he repudiated the title of Fair, and claimed to hold adversely. On the 16th of July, 1871, Fair brought an action of ejectment against Irvine to recover possession of the property, in which judgment was rendered in favor of Irvine on the 29th of November, 1871, which was afterwards affirmed, on appeal, by the supreme court. In 1873, Irvine instituted proceedings for the procurement for himself of letters patent from the United States for the Morgan mine; and on the 9th of March, 1874, a patent for the same was issued to him. On the 12th of March, 1875, the Morgan Mining Company was incorporated, to which corporation Irvine conveyed his interest in the mine, in consideration whereof he received from it ten thousand shares of its capital stock. On the 4th of May, 1876, Fair assigned his demands against Irvine and the Morgan Mining Company to the plaintiff, who, on the 8th of May, 1876, instituted the present action to have Irvine declared a trustee for the plaintiff for the ten thousand shares of the Morgan Mining Company. Judgment was rendered in favor of the plaintiff as prayed for. The defendant Irvine moved for a new trial, and his motion being denied, appealed from the judgment and order. The further facts are stated in the opinion of the court.

Paterson, J. 1. The evidence shows that the defendant acted as the agent of Fair and Selover in purchasing the property and in holding it, and that he so considered himself up to a certain period, when, having had some misunderstanding with Fair, he resolved to assume the right of ownership in the property. Fair furnished ’the money with which the purchase was made. It was not necessary for the plaintiff to show the defendant agreed in formal or express language that he would make the purchase for Fair and others, and hold it for their benefit. It is sufficient if it was mutually understood between the parties that he was so acting in their behalf. What was said and done by the parties, so far as the evidence shows, is capable of only one interpretation, and establishes a perfect understanding between the parties, as above stated. Under such circumstances, although the language used may not of itself show an express promise, it is the duty of the party whose services are sought, if he does not mean to act in accordance with the evident expectation of the parties with whom he is dealing, to expressly declare that he will not; otherwise his silent acquiescence is a fraud. (O’Hara Will Case, 95 N. Y. 403; Millard v. Hathaway, 27 Cal. 119; Sandfoss v. Jones, 35 Cal. 486.) It is true, as claimed by appellant, the party alleging the trust must show that the money was paid at or before the execution of the conveyance, or that an absolute obligation to pay has been incurred by him as a part of the original transaction of [440]purchase. (2 Pomeroy’s Eq. Jur., sec. 1037; Case v. Codding, 38 Cal. 193.) But we do not see how this principle can aid appellant in this case. On December 28, 1869, the sheriff sold the property to defendant, Irvine, who paid him $115.19 therefor, and received the sheriff’s certificate of sale. This money was paid to defendant by Sinton, acting as the agent of Fair and others, in February, 1870. There was no conveyance, within the meaning of the authorities cited, until the time of redemption had expired and the sheriff delivered to him the deed to the property. The evidence shows that defendent rendered an account for the money advanced, and received the amount thereof prior to the execution and delivery of the sheriff’s deed. It would appear, therefore, that he ought not now to be heard to say that it was not a loan, and if it was a loan, the facts created a resulting trust. (See authorities above cited; also Page v. Page, 8 N. H. 187; Siemon v. Schurck, 29 N. Y. 598; Foote v. Bryant, 47 N. Y. 544; Soggins v. Heard, 31 Miss. 426; Morey v. Herrick, 18 Pa. St. 129.)

The fact that a patent was issued to defendant, Irvine, in March, 1874, upon his application filed in 1873, cannot in any way affect the equitable right of plaintiff. If there be a trust in favor of another party at the time of the issuance of the patent, a court of equity will control the operation of the legal title for the benefit of the cestui que trust. (Bludworth v. Lake, 33 Cal. 263.)

O'Connor v. Irvine

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