Scott v. Umbarger

By the Court, Temple, J.: The complaint shows that Jane Scott, while a married woman—the wife of Charles Gr. Scott—purchased for a valuable consideration the premises in controversy and received a conveyance therefor; that Charles GL Scott took immediate possession of the premises, which he retained until his death, in 1856; that at the time of and- immediately before his death he was a resident of San Francisco, in this State, and plaintiffs are his only heirs at law. In 1860, one Frederick D. Kohler, designing to defraud plaintiffs out of the described premises, procured letters of administration upon the estate of Charles Gr. Scott, deceased, in Santa Clara County, and in pursuance of such fraudulent design made several unsuccessful efforts to procure an order of sale of the property for pretended debts and expenses of administration, and finally — 416 — succeeded in obtaining such order in December, 1861; that the order was made without legal notice to plaintiffs, and without authority on the part of the Court; that a pretended sale was made under this order, without notice given, at which Thomas Bodley was the purchaser, in February, 1862, which sale was afterward confirmed by the Probate Court, and conveyance made by the administrator; that the sale was wholly fictitious and for the benefit of Kohler, „no money being paid; that Bodley took the conveyance for Kohler, and at his instance and request, and agreeing to hold the title for Kohler; that Bodley had notice of the fraud contemplated by Kohler, and that the land was then worth nine thousand dollars—the purchase money being one thousand three hundred and fifty dollars. On’ the 19th day of April, 1862, Kohler being still administrator, with the view of further concealing his designs, caused a conveyance to be made by Bodley to one Charles Hosmer, for a nominal consideration of one thousand five hundred dollars, although no consideration was paid. Hosmer also took the conveyance at the instance and request of Kohler, agreeing to hold the same for him, with full notice of all the acts of fraud on his part. On the 21st day of June, 1862, Kohler caused the property to be conveyed to himself for a nominal consideration of one thousand five hundred dollars; that this conveyance was wholly fictitious—no money being in fact paid—Kohler at the time being and acting as administrator of Charles G. Scott, deceased. Kohler afterwards conveyed to defendant Umbarger, who was then in possession as Ms tenant in his capacity of administrator, and who had full notice of all the acts of fraud on the part of Kohler, Bodley, and Hosmer. Umbarger afterward conveyed to the other defendants portions of the premises, who also took with full notice. The answer fails to deny the fraud on the part of Kohler, Bodley, and Hosmer. In effect it admits that the pretended — 417 — sale was purely fictitious, and made for the purposes mentioned in the complaint. It denies, however, that Umbarger confederated with Kohler to conceal the fraud perpetrated by him, or to defraud the plaintiff in any way; and avers that he purchased in good faith, and for a valuable consideration, without any knowledge or suspicion that there had been any unfair, illegal, wrongful, or unlawful acts on the part of Kohler or any one else connected therewith, and denies that the property was at the time of any greater value than one thousand five hundred dollars, the price paid by him. The answer also contains a cross complaint, in which it is averred that in 1858 the City of San José was the owner of the premises in controversy, and then sold and conveyed them to the defendants, who now claim to be the owners by virtue of the title derived from the City of San José. They ask to have their title quieted against the plaintiffs. The answer to the cross-complaint admits that defendants acquired the title from San José, but claims that it was acquired in trust for plaintiffs—the trust arising from the facts alleged in the complaint. Plaintiffs offer to repay the amount paid for the title from the city, and ask that defendants be required to convey to them. I have been thus particular in stating the pleadings, because, as I think, all the questions involved in the case arise upon them, the evidence not tending, so far as I can see, either to establish or rebut the presumption of notice on the part of Umbarger at the time he purchased or received his deed, except, perhaps, that it shows that Umbarger was in possession under Kohler, as administrator, and knew that Kohler was administrator. The first question that arises from the pleadings is, whether Umbarger has sufficiently denied notice of the fraud in the title of Kohler. — 418 — He admits, by tailing to deny, the fact that Bodley did, in fact, purchase as the agent of Kohler, with full knowledge of his fraudulent designs. That the conveyance to Hosmer was also merely colorable. That Kohler was, in fact, the purchaser at the administrator’s sale, made by himself as administrator. The sale was, then, a fraud upon the heirs, and the defendants can only be protected upon the hypothesis that Umbarger was a purchaser for a valuable consideration, in good faith, without notice. The fact of notice is clearly charged in the bill, and is not specifically denied in the answer, but there is an affirmative averment that for “ valuable consideration, to wit: one thousand dollars, and in good faith, and without any knowledge or suspicion on his part that there had been any unfair, illegal, or wrongful acts on the part of said F. 1). Kohler, or any one else connected therewith, he made a purchase of the interest of the said F. D. Kohler in and to the lands set forth in said complaint; and he denies that he had any knowledge whatever of any illegal or wrongful act of said Kohler.” He also denies knowledge that the property was held in trust by Kohler, and denies notice of any fraudulent or wrongful acts on the part of Kohler or any other person, or that they are or ever were the trustees. The defendants do not deny that Bodley purchased at the instance of Kohler, and for his benefit, or that Hosmer took the title for Kohler, as charged in the complaint. The most these denials can be held to amount to is, that neither Bodley, Hosmer, or Kohler, in taking the title as alleged, did thereby become the trustee of plaintiffs, and that there was nothing unfair, illegal, wrongful, or fraudulent in Kohler’s purchasing the property in that way. They admit the fact that Kohler did purchase at his own sale, per interposiiam personam; that they knew of these facts, but were not aware that there was anything unfair, illegal, wrongful, or fraudulent about it, and' deny that Kohler thereby became trustee for plaintiffs. Under — 419 — the circumstances it was incumbent upon the defendants to deny specifically knowledge of the alleged facts, or of any facts which would have put them upon inquiry, not only at the time of the purchase but at any time before they paid the purchase money or received their deeds. I, therefore, agree with the learned Judge before whom the case was tried, that notice of the frauds perpetrated by Kohler is not sufficiently denied. A more important question arising in the case is, whether the facts admitted in the pleadings constituted the defendants the trustees of plaintiffs, and whether they can be compelled to convey, to plaintiffs the title acquired from the City of San José. Although it is alleged in the complaint that Jane Scott, while the wife of Charles G. Scott, acquired title in fee simple, yet it is admitted in the answer to the cross-complaint that the title was afterwards acquired by the defendants from the City of San José; in other words, that Scott had no title whatever, and it does not, therefore, appear that he had any equities with reference to the land. It is also alleged in the complaint that the order of sale was unauthorized and the sale illegal and of course void. From this it appears that even the rights which Scott had, arising from possession, did not pass under the pretended probate sale. Kohler remained in possession, as administrator, and at least as soon as the administration was closed the heirs could have recovered the possession in an action at law. Therefore the defendants have never taken the legal title or any rights to the premises in trust for plaintiffs. Were the trust fully established, it would constitute a constructive trust, and unless by reason of the position thus obtained they were enabled to acquire the outstanding title, I do not see how it would be a fraud upon the rights of. the plaintiffs. So relation of confidence existed between them which imposed duties upon defendants in defending the — 420 — rights of the plaintiffs or tended to induce plaintiffs to rely upon them. Defendants, by the sale, acquired no equity which was afterwards ripened into a title, nor does it appear that the possession of the property aided in any way the acquisition of the title. A party in possession without right, legal or equitable, is fraudulently deprived of the possession, without, however, depriving him of any right of possession at law resulting from his actual prior possession, and then the wrongdoer purchases the title from the lawful owner. I know of no principle upon which he can be compelled to convey it. I therefore think the title acquired did not inure to the benefit of plaintiffs, and that the defendants cannot be compelled to convey to them. Judgment reversed and cause remanded for further proceedings. Mr. Justice Wallace, being disqualified, did not sit in this cause. Mr. Chief Justice Rhodes did not express an opinion.