Pray v. Babbitt

LILLIE, J. Plaintiff had judgment against defendant, as the executor of his deceased brother's estate, in the sum of $8,000; such sum represented the agreed value of certain Colorado property which plaintiff deeded to his brother in October of 1958 to provide security for a loan contemporaneously secured by the latter for an oil exploration venture. Trial was had on plaintiff’s theory that the decedent acquired the property in trust for plaintiff’s benefit until the loan was repaid; since the property was eventually lost through foreclosure (in 1964), after the institution of the action, plaintiff was given a money judgment in lieu of a trust in the specific property to secure payment of the amount be had advanced. Prom such judgment defendant appeals.

The trial court found in pertinent part that the subject property was conveyed to the decedent on October 17, 1958, at an agreed valuation ($8,000) which sum the latter agreed to repay; that at no time thereafter was any part of said sum repaid nor did plaintiff receive any consideration for the transaction; that prior thereto, on July 23, 1958, decedent executed his last will which named plaintiff as the sole beneficiary, and that said instrument was to protect plaintiff for advances theretofore made by plaintiff to decedent, including "said purchase price of $8,000” here in suit; further, that said will was a substamtial factor in inducing plaintiff not to take steps to collect from decedent the aforesaid sum of $8,000 prior to the latter's death; that although there was no valid contract between the brothers for decedent to will property to plaintiff in consideration of the latter’s advances to the former, a resulting and constructive trust was created by the conveyance of the Colorado property to the extent of the purchase price and reasonable value thereof, namely, $8,000; that plaintiff’s reasonable reliance upon the execution of the decedent’s will, which reliance said decedent in turn acted upon [111](although he was free from fraud in so doing), created an estoppel against any defense of the statute of limitations with respect to the enforcement of plaintiff’s claim; that the property has become unavailable for the imposition of a trust thereon because of its sale to the purchaser at a trustee’s sale.1 From the foregoing findings appropriate conclusions of law were drawn.

Three major points are made by appellant—first, neither the pleadings nor the evidence supports the determination that a trust in the subject property, either resulting or constructive, was established; second, since no trust was created, respondent was incompetent to testify to the details of the transaction (Code Civ. Proc., § 1880, subd. 3); and third, the claim in suit is barred by the statute of limitations. As shown above, the trial court found both types of trust arose from the arrangements testified to by respondent, although they have been distinguished in the cases: “A resulting trust has frequently been called an intention-enforcing trust, as opposed to the fraud-preventing function of a constructive trust.” (Seabury v. Costello, 209 Cal.App.2d 640, 645 [26 Cal.Rptr. 248].) Appellant argues that since the trial court found that decedent was not guilty of fraud, at least in allowing respondent to believe that decedent’s will afforded security for the advances made so that he forebore to institute action earlier, no constructive trust was created;2 he also points to certain statements of the court, in summing up, which might (or might not) sustain his position were it not for the settled rule that antecedent statements of the court inconsistent with its findings must be disregarded.