60 Wash. 258 | Wash. | 1910
This action was commenced by Reinhold Harras. and P. N. Hansen against Gus Harras and Anna Harras, his wife, to compel the conveyance of certain land which they allege was held in trust for them by the defendant Gus Harras, and to obtain an accounting. From a decree in their-favor, the defendants have appealed.
The trial court in substance found, that between February 23, 1906, and January 18, 1909, the Garden City Packing Company, a corporation, was the owner of, and in the possession of, the land in controversy; that Reinhold Harras was president and general manager of, and the principal stockholder in, the corporation; that upon May 7, 1907, the John Morrell Company, Ltd., a corporation, obtained a judgment against the Garden City Packing Company in the sum of' $140.33; that upon July 27, 1907, the land was sold upon execution to satisfy said judgment; that upon June 10, 1907, the First National Bank of Pendleton obtained a judgment against the Garden City Packing Company in the sum of $1,716.41, costs and interest; that upon March 28, 1908, the land was again sold upon execution to satisfy said judgment; that immediately prior to the sale last mentioned Reinhold Harras, by long-distance telephone, requested the defendant Gus Harras, his brother, to purchase the land for the use and benefit of the judgment debtor, the Garden City Packing Company; that Reinhold Harras was then in Pendleton, Oregon, and unable to reach Walla Walla in time to-
The findings and decree were vigorously assailed by the appellants, who contend that they are not sustained by the evidence. The record is lengthy. The evidence cannot be stated in detail, but we have carefully considered and weighed it with the result that we conclude the findings of the trial judge must be sustained. From the long and continuous course of dealing which existed between the two brothers, it is manifest that their relations were of a highly confidential character. Reinhold, as president, manager, and principal stockholder of the corporation, had a present and personal interest in the land which it owned. From the evidence we find that the land with the improvements thereon was worth $5,000 or more. Reinhold, being unable to attend the sale, requested Gus, then his debtor, to bid it in for the company. At the time, and independent of their running accounts, we find from the evidence that Gus was indebted to him in the
“In no case will a constructive trust be decreed on account of the breach of an alleged verbal agreement of the purchaser at a judicial sale to purchase for the benefit of the judgment debtor, unless the evidence to prove the agreement is clear and satisfactory.” 15 Am. & Eng. Ency. Law (2d ed.), 1191.
In Denny v. Holden, 55 Wash. 22, 108 Pac. 1109, recognizing the rule above stated, we said:
“The appellant seeks to establish a resulting trust by parol evidence, to show that the respondents, the owners of the legal title to the property in controversy, hold title to the extent of an undivided one-half interest in trust for him. In such case the evidence must be clear, cogent, and convincing before a trust will be declared. 3 Pomeroy, Eq. Jur. (3d ed.), 1040; 15 Am. & Eng. Ency. Law (2d ed.), p. 1174; Howland v. Blake, 97 U. S. 624, 24 L. Ed. 1027; Chambers v. Emery, 13 Utah 374, 45 Pac. 192; Rice v. Rigley, 7 Idaho 115, 61 Pac. 290. The following case also illustrates this view: Voorhies v. Hennessy, 7 Wash. 243, 34 Pac. 931.”
If to sustain the alleged trust herein it were necessary for us to rely upon the unsupported statements of the respondent Reinhold Harras, which are vigorously disputed by the evidence of Gus Harras, we might not approve the findings of the trial judge. The credibility of Reinhold Harras has been bitterly assailed, but we think his evidence, in so far as it has been accepted by the trial judge, is so clearly sup
On the law there is no material dispute. The authorities generally hold that, where one person verbally agrees to attend a judicial sale and purchase for the benefit of another who has a present interest in the land to be sold, the promisor will not be permitted to perpetrate a fraud by repudiating his agreement, but will be held a constructive trustee. The courts, with much unanimity, hold that a constructive trust will arise, and the promisor who buys the land at judicial sale will be decreed to hold the same for the benefit of the promisee, where there existed between them a confidential relation aside from that created by the agreement to purchase, where the promisee supplied a part of the purchase money, where the promisee was lulled into inactivity by reason of the promise and was prevented from protecting his rights in the land sold or refrained from doing so, where the promisor was enabled, by reason of his agreement, to secure the land at a price materially below its actual value, or where persons interested in the land under the oral agreement remained in possession thereof and made valuable improvements. All of these conditions are shown to have prevailed in the case at bar, and we regard them as sufficient to sustain the trust declared by the trial court. The appellants themselves, in their opening brief, making citations of authority, well state the law in the following language:
“Circumstances may arise out of the verbal agreement which will make it inequitable or fraudulent for the promisor to refuse to perform the agreement, and in such case a constructive trust will be created. Some of the following conditions and circumstances must be present for a constructive or resulting trust to arise. 1st. Where prospective bidders at a judicial sale, believing that the promisor in the oral agreement vas buying for the promisee whose land was being sold to satisfy debts against him, refrained from bidding. Collins
The judgment is affirmed.
Rudkin, C. J., Dunbar, Parker, and Mount, JJ., concur.