Marshall v. Gustin

BENSON, J. — Defendant urges that the demurrer should have been sustained upon two grounds: (1) That it appears upon the face of the complaint that the statute of limitations has run against the claims of both plaintiffs; and (2) that the facts alleged do not disclose a case calling for the interposition of a court of equity. 1. As to the first of these, it is sufficient to say that no demurrer was interposed upon that ground, and it cannot now be considered: Portland v. Coffey, 67 Or. 507 (135 Pac. 358). 2. As to the second contention it may be remarked that from the complaint it appears, at least inferentially, that the defendant was holding the real estate described therein as guardian of plaintiffs at the time [57] of the transfer of the land to her. Such a trust relation existing between the parties creates a condition calling'for the exercise of equitable jurisdiction and although the court might not be able to grant the specific relief prayed for, it would be justified in following the trust property or its proceeds for the relief of the cestui que trust. "We must therefore hold that the complaint is not vulnerable to a demurrer upon this ground. 3. A careful examination of the evidence discloses the following facts: The father of plaintiffs died, leaving an estate consisting of seventy-five acres of land in Clarke County, Washington, and a. life insurance policy in Portland, upon which was collected the sum of $1,904.85. The County Court of Multnomah County appointed defendant guardian of the minor children, including plaintiffs, and of the personal estate just referred to. The estate in Washington was administered, but there is no evidence that any guardian or trustee was ever appointed to manage it. There is no question as to the integrity and propriety of defendant’s care of the children and of the funds which came into her hands as guardian.- On September 18, 1909, plaintiff George Amos Marshall conveyed his one-eighth interest in the land to defendant, and in September, 1911, Lavina Marshall conveyed his one-eighth interest to defendant, the expressed consideration in the deeds being $170 and $68 respectively. Bach of the plaintiffs was twenty years old when he made his conveyance. Thereafter, having acquired by purchase the interests of the other heirs, defendant sold the land in connection with an adjacent 160 acre tract of which she was the owner, for the expressed consideration of $8,812.50, receiving a partial payment in cash and, for the balance, accepting two notes for the aggre [58] gate sum of $6,412.50, secured by a mortgage upon the land. The testimony is very largely directed to the relative values of the 75 acre tract and the 160 acre tract which were sold as one at the rate of $37.50 per acre. It is not necessary to consider this evidence since under the pleadings and the facts already stated it sufficiently appears that the plaintiffs have not made a case calling for the interposition of a court of equity. It is true that the prayer asks that the defendant be declared a trustee of their interests in the profits arising from the sale of the land by defendant, but they can have no interest in such profits unless they were part owners of the land at the time of such sale, which, according to their allegations, they were not. It must be remembered that they are not seeking a rescission of their contracts, or a cancellation of their deeds, but simply to recover the difference between the price received by them and the true value of the property and for this relief they have a complete remedy at law. When a party has been induced by fraud and deceit to part with his property for an inadequate consideration he has his election of two remedies: He may affirm the transaction and have his action for damages, or he may repudiate the bargain and call upon a court of equity to aid him in placing the parties in the position they occupied before the deal was consummated, but he cannot have both remedies. It is evident from the decree itself that the trial court found no ground for equitable interference, since a money judgment is all that was allowed and, in that event, the money judgmént could not under any view of the matter be sustained. In the ease of Oregon-Wash. R. & N. Co. v. Reed, decided December 27,1917, not yet reported, this court through Mr. Justice Moore says: [59] “This being so, the element of damages which the defendants may have sustained is necessarily eliminated, for the right to recover such compensation in a suit must depend upon some equity which enables the court to secure and retain jurisdiction of the subject matter, and as an incident thereof to award the damages inflicted.” In Zinn v. Zinn, 54 W. Va. 483 (46 S. E. 202), the same doctrine is thus expressed: “All that plaintiff has any claim to whatever is the oil royalties and gas rentals reserved in the lease of Preston G. Zinn, and all he claims by his bill is these oil royalties. This is mere pecuniary demand for the royalties already received by plaintiff and is not maintainable under the alleged heads of equitable jurisdiction.” We do not wish to be understood as holding that in a proper case a court of equity will not exert its power where a trustee has violated the conditions of his trust or has acted in bad faith in the execution thereof. However, when the facts proven and the relief sought justify nothing further than pecuniary recompense for the wrong, there is nothing upon which equitable jurisdiction can base its action. The decree must be reversed and one entered here dismissing the suit, without prejudice. Reversed. Suit Dismissed. Mr. Chiee Justice McBride, Mr. Justice Bean and Mr. Justice Harris concur.