Papineau v. Security-First National Bank

PULLEN, P. J. By this action plaintiff and appellant sought to have the court define the interest of plaintiff in a certain trust, to declare the trust terminated, for an accounting, and to have distributed to plaintiff an undivided one-tenth interest therein.

Upon the death of Francis Ganahl in 1916 a trust was created by his widow and children by conveying the property to the predecessor of the defendant bank, as trustee. The trust was primarily to secure the repayment of $10,000 to the trustee by the beneficiaries, this sum having been advanced by the bank to close the estate, and also to provide a convenient method of handling the property, particularly during the life of the widow who was entitled to the income for her life. The trust agreement provided for termination of the estate after repayment of the bank loan upon the request of the beneficiaries, under certain specified conditions, and also provided that the respective interests were assignable by the several beneficiaries.

In 1925, Vincent P. Ganahl, one of the beneficiaries, borrowed $5000 from respondent bank, and as security therefor "assigned, with power of sale, his beneficial interest in the trust.

[692]In 1929 Vincent P. Ganahl borrowed from O. L. Papineau the sum of $40,000, and as security transferred and assigned to him his beneficial and reversionary interest in the trust.

In 1930 the trustee bank notified Papineau of the default of Vincent P. Ganahl under the prior assignment, and of the intended sale of the interest of Vincent P. Ganahl to satisfy said loan, and in due time such interest was sold to Ernest Ganahl, a brother of the pledgor, for approximately $5000.

Thereafter an action was brought by Papineau against the trustee and Vincent P. Ganahl and Ernest Ganahl on the theory that the defendants had conspired to conceal from him the existence of the prior assignment. Upon the trial of the issues thus presented the trial court found that neither the defendant bank nor any of its officers had made any fraudulent representations, nor had been guilty of any concealment, and further found that at the time of the second assignment the bank had informed plaintiff of such prior assignment, and entered judgment in favor of the defendant. This judgment was affirmed in Papineau v. Security-First National Bank et al., 6 Cal. (2d) 668 [59 Pac. (2d) 131].

A few months later the present action was commenced, wherein plaintiff claimed to be the owner of a one-tenth beneficial interest in the trust by reason of an assignment from Vincent P. Ganahl, and set up the fact that the beneficial interest so sold had terminated and the trust had been completed by the fulfillment of its purposes, and asked that plaintiff 's interests be declared and the corpus of the trust distributed to the persons legally entitled thereto.