Gerdes v. Moody

By the Court, Crockett, J.: This is an action" in the usual form, to recover the possession of two lots in the City of San José. Among other defenses the answer avers, in substance, that in July, 1847, at the request of one Eeleigh, the Alcalde of San José granted and conveyed the lots to one Powell; that the purchase money therefor was paid by Eeleigh, and was never refunded by Powell; that Powell never applied for the grant; that soon after the grant was made Eeleigh entered into possession, and erected a house thereon, which he occupied with his family; that in October, 1847, Powell executed and delivered to Eeleigh a power of attorney, whereby he — 343 — authorized the latter to sell and convey the lots for such price and to such person as he should deem meet; that in December, 1847, Neleigh, whilst in possession, “and being thereunto duly authorized and empowered by the said Powell, and acting for him and on his behalf, sold the said lots to. Henry M. Naglee for the price or sum of forty dollars, which was at the time the full value thereof;” that Naglee paid the said sum to Neleigh, and the defendants, by proper mesne conveyances and for a valuable consideration, have succeeded to all the rights of Naglee in the premises; that by virtue of the rights so acquired, the defendants entered into possession, and for more than eight years past have been and yet are in possession; that relying on the belief that Powell would fulfill and perform said contract of sale, and convey said premises to them, the defendants have erected thereon valuable improvements, consisting of a steam flouring mill, sawmill, brick, warehouse, etc., of the value of fifteen thousand dollars; that in August, 1866, while the defendants were so in possession, Powell conveyed said premises by quitclaim deed to the plaintiff, for the consideration of three hundred dollars, then paid in cash, and the further sum of five hundred dollars, to be thereafter paid, in the event that the plaintiff recovered the property; that the plaintiff purchased with full and actual notice of the defendants’ equities; that in September, 1866, the defendants demanded of Powell a proper conveyance of the premises, which he refused to make; that the plaintiff has no other title than that derived from the deed from Powell. As a separate defense, the answer sets up the statute of limitations, and prays, as affirmative relief, that the defendants be adjudged to be the owners of the property, and that the plaintiff release to them the legal title. To this new matter an answer was filed by the plaintiff, which denies all the material allegations of the defendants in that behalf. The equitable defense thus set up in the answer was first — 344 — tried, and after hearing the evidence, the Court finds, in substance, that Powell and Eeleigh came together across the Plains tó California in 1846; that while Powell was working at San Francisco, Eeleigh obtained his permission to use his name in procuring a grant to town lots in San José from the Alcalde for Eeleigh’s use and benefit, on the pretext that Eeleigh had already obtained a grant for four lots in his own name, and the law permitted only four lots to be granted to one person; that Eeleigh, in fact, had no.grant of lots at that time in San José; but there was, in 1847, a regulation of the Ayuntamiento of San José which fixed the size of lots to be granted at fifty varas square, and prescribed that not more than four lots should be granted to any one person; that this regulation, however, was not observed by the Alcalde, because it appears from the records of the Alcalde that on the 16th of July, 1847, four lots were granted to Eeleigh, and on the 20th of July, 1847, four other lots were also granted to him; that on the 16th of July, 1847, four lots were granted to Powell, and in the year 1848 five other lots were granted to him; that after Powell had consented to the use of his name by Eeleigh, for obtaining a grant for the benefit of the latter, Eeleigh solicited the Alcalde for a grant of four lots to himself and of four lots to Powell; and on the 16th of July, 1847, the Alcalde granted four lots to Eeleigh and four to Powell, for all of which Eeleigh paid the municipal fees; that the lots in controversy are two of those which were thus granted to Powell; that in October, 1847, Powell executed and delivered to Eeleigh a power of attorney, authorizing him for Powell, and in his name, “ to make and execute, sign, seal, and deliver any and all deeds or other instruments of writing which may be necessary to convey and assure title to any and all my real and personal estate in said Pueblo. San José, for the absolute disposal thereof or any part of it;” that in December, 1847, Eeleigh sold the lots in controversy to Eaglee for forty dollars, which — 345 — was a fair price for them; that Raglee paid the purchase money to Releigh, and thereupon Releigh, in his own name, and not in the name of Powell, made, executed, and delivered to Raglee his deed of bargain and sale for the lots, whereby he, for himself, conveyed to Raglee “ all his right, title, and interest in and to said lots;” that afterwards Releigh made and delivered to Raglee an instrument in writing, indorsed on said deed in the following words: “In connection with the foregoing, I, the undersigned, Robert B. Releigh, attorney for John W. Powell, this 25th day of December, 1848, in the Pueblo de San José, hereby acknowledge and state that the lots, seven and eight, deeded by the Alcalde to John W. Powell, and which lots were sold by-to Henry M. Raglee, under a power of attorney of said Powell, which power is recorded, and as such attorney only was the above deed executed; and as such attorney, I do hereby bind John W. Powell, his heirs and assigns, to the within agreement, having received the consideration as within specified. “ In witness whereof, I have hereunto set my hand and seal. (Signed:) “ Robert B. Releigh, Attorney.” That neither Releigh, nor Raglee, nor any one claiming under them, or either of them, occupied or improved said lots, but the lots remained open and uninclosed until 1856, when the father of defendants entered into possession, without right or title, and erected a mill on one of the lots; that he remained in possession a few years, when he delivered the exclusive possession to his sons, Charles and David B. M'oody, and on 3d September, 1858, he and his said two sons acquired, by mesne conveyances from Raglee, all the right, title, and interest of Raglee in the premises, for the sum of seven hundred and fifty dollars, which was a fair — 346 — price; that in'1859 the other defendant, Volney D. Moody, acquired an interest under one of the other defendants, and the defendants have been" continuously in possession from the time of their entry, during which period they have erected valuable improvements on the premises, worth from eight to fifteen thousand dollars, and at the commencement of this action they were, and yet are, in possession, claiming title under hTaglee adversely to the plaintiff; that in 1866 the defendants commenced an action against Powell, to quiet title to said premises, which action was pending when the plaintiff purchased from Powell, and he had full notice of it at the time of his purchase; that Powell never had the grant in his possession, but it was recorded in the Alcalde’s book of grants; that Powell did not know until 1865 that the lots had been granted ft) him; and when the plaintiff" applied to him to purchase, he refused to make any other conveyance than a release of whatever right, title, or interest he might have in them; that in August, 1866, Powell sold the lots to the plaintiff for eight hundred' dollars, of which three hundred dollars was paid in cash, and the balance was to be paid when, the plaintiff recovered the lots. As conclusions of law, the Court finds: First—That the plaintiff does not hold the legal title in trust for the defendants, because, first, a resulting trust in favor of bTeleigh did not arise at the time of the grant to Powell, by reason of the previous consent of Powell to take a grant for FTeleigh’s benefit; second, the grant is a gift, and not a purchase. Second—That the plaintiff cannot, in equity, be'compelled to convey the legal title to the defendants, on the ground of perfecting a supposed parol contract for the purchase of the premises, between Kaglee and FTeleigh, or his principal, because: - 1st. There was no parol contract between them in relation to the land under which bfagiee paid the purchase money, — 347 — and entered into the lands, and made improvements on them; and without possession taken and maintained, under such contract, there can be no pretense of part performance. 2d. The purchase by BTaglee was fully performed by the payment of the purchase money by him, and the execution and delivery of a deed of bargain and sale by Heleigh. 3d. The deed was ineffectual to pass the title of Powell to Saglee. 4th. The defendants did not enter under any parol contract with Powell, or Heleigh, as his agent, on the faith of which they made improvements. They took possesssion under their father, and, being in possession, they acquired whatever title Eaglee had; but as Baglee had neither title nor possession under any contract with the owner, they did not acquire from him, or by their own possession, any equity which can be enforced against the legal title of the plaintiff. Third—But if any equities did arise in favor of Eaglee, or the defendants claiming under him, out of the transaction between IsTaglee and bfeleigh, the same have become barred by the statute of limitations. The Court thereupon entered judgment against the defendants on their equitable defense; and after a motion for a new trial, which was denied, the defendants have appealed. We have stated thus minutely the pretensions of the parties and the findings of the Court, because, in our opinion, if it be assumed that all the facts are correctly embodied in the findings, the Court erred in the conclusions of law which it deduced from the facts found. It is-found as a fact that Powell made a power of attorney to Heleigh, whereby he authorized him “to make, execute, sign, seal, and deliver any and all deeds or other instruments of writing which may be necessary to convey and assure title to any and all my real and personal estate in said Pueblo San José, for the absolute disposal thereof, or any part of it.” It also appears from the power itself, a copy of — 348 — which was put in evidence, that it contained an additional clause, as follows: “Hereby ratifying and confirming all such deeds, conveyances, sales, etc., which shall at any time hereafter be made by my said attorney touching or concerning the premises.” It further appears that very shortly after the execution and delivery of the power of attorney, Releigh sold the lots to Raglee for a full, fair price, and conveyed them to him by his own deed, in which no reference is made to Powell; but about one year thereafter, and while the power of attorney remained in full force, he indorsed on the deed a writing to the effect that the lots were intended to be sold to Raglee under the power of attorney, and that he executed the deed only as the attorney for Powell; “ and as such attorney I do hereby bind John W. Powell, his heirs and assigns, to the within agreement, having received the consideration as within specified.” Signed: “Robert B. Releigh, Attorney.” In order to ascertain the intention of the parties, these two papers must be construed together; and when thus considered, and in view of the surrounding circumstances, it is obvious that however inartificially the papers were worded, the two, taken together, constitute an attempt by Releigh to make a conveyance' to Raglee under the power of attorney. It is but the ordinary case of the defective execution of a power, and in such cases Courts of equity always afford the appropriate relief. In arriving at the intention of the parties in making these instruments, we interpret them, as all other writings ought to be interpreted, in the light of the surrounding circumstances. In view of the fact that Powell claimed no interest in these lots, and held only the naked legal title for the benefit of Releigh, who had a power of attorney from Powell, authorizing him to convey them, it would not be a forced or unnatural interpretation of the transaction to hold, that, by his own deed to Raglee, Releigh intended to convey his own supposed interest in the lots, and — 349 — by the subsequent writing, indorsed on the deed, to release the legal title held by Powell. It may be that the writing is so unskillfully drawn as not to have that effect; but if it was operative in law to convey the title, it would, not need the aid of a Court of equity to give it vitality. It is only when there has been an unsuccessful attempt to execute a power in proper form that the interposition of the Court is properly invoked. We are satisfied that this is a ease of that character. (Beatty v. Clark, 20 Cal. 35; Love v. Sierra Nevada L. W. & M. Co., 32 Cal. 654; Story’s Eq., Secs. 169, 170; Barr v. Hatch, 3 Ham. 529.) But it is urged that the defendants do not occupy such a position as entitles them to demand the interposition of a Court of equity, because, as it is said, they originally entered under their father, who was a mere intruder, without title; and because Eeleigh, under whom they claim, very soon after the conveyance to Eaglee, took back from him a conveyance of one of the lots for a nominal consideration. This latter fact does not appear in the findings; but if it did, neither that nor the other fact relied upon could impair the defendants’ equities. When they succeeded to Eaglee’s rights, they became entitled to enforce them as he might -have done, without reference to the manner in which they had acquired the possession; and if Eeleigh practiced any fraud on Powell in taking the conveyance from Eaglee, there is no proof that the defendants were privy to it or had notice of it. But the fact that Eaglee reconveyed one of the lots to Eeleigh, under the facts proved, does not establish or tend to establish any fraud in Eeleigh. The only point remaining-to be considered is whether or not the defendants’ right of action is barred by the statute of limitations. We are satisfied it is not. After the sale and attempted conveyance to Eaglee, Powell held the legal title in trust for Eaglee and his assigns; and the defendants’ cause of action did not accrue, in a legal sense, until after a — 350 — refusal by Powell or the plaintiff, his vendee, to convey the title. There is no proof of any refusal by Powell until after he conveyéd to the plaintiff in 1866, and the only proof that the plaintiff refuses is the fact that he denies the defendants’ right to a conveyance in the pleadings in this cause. Our conclusion is that the defendants were entitled to a judgment, as prayed for, on the findings. The judgment is therefore reversed and the cause remanded, with an order to the District Court to enter judgment on the findings for the defendants, with the relief which they demand in their answer. [The faregoing opinion was delivered at the January Term, 1869; and after a reargument of the question, as to the operation of the statute of limitations, the following opinion was given at the April Term, 1871.—Reporter]. By the Court, Crockett, J.: In this case a reargument was ordered of the question arising under the statute of limitations; and since the re-argument we have had occasion, in the case of Love v. ■Watkins, decided at the last January Term, to consider carefully whether in an action by the vendor of lands, holding the naked legal title, against his vendee to recover the possession, the vendee having paid the purchase money, and •being rightfully in possession under his contract of purchase, the statute of limitation- is a bar to the equitable defense of the vendee, and to his right to affirmative relief. We decided this proposition in the negative, and held that the rights of the defendant in- such a case were not barred by the statute. The present case comes fully within that decision, which we are satisfied is a correct exposition of the law. The opinion heretofore delivered in this case will, therefore, stand, as the opinion of the Court, except in so far — 351 — as that portion thereof which relates to the statute of limitations is inconsistent with the decision in Love v. Watkins and with this opinion; and on that branch of the case we adopt the views expressed herein and in Love v. Watkins, in lieu of those contained in the original opinion. Judgment reversed, and cause remanded, with ah order to the Court below to enter a judgment for the defendants on the findings, with the relief demanded in their answer.