56 Neb. 104 | Neb. | 1898
This action was brought by Charles J. Olson against Walter J. Lamb and his wife, for the purpose of having a trust declared in favor of plaintiff in certain property alleged to have been bought by Lamb at judicial sale Avhile he was acting as attorney for plaintiff. The Prentice Brownstone Company was made a party defendant, and by cross-petition alleged that Lamb was also its at
Preliminary to the consideration of the merits of the case a statement of the somewhat complicated facts involved becomes necessary. In this statement we shall endeavor to omit, for the sake of brevity and clearness, non-essentials and the less important details. Their omission from the statement, however, is no indication that they have been overlooked in considering the case. In 1892 Mr. Howell was the owner of a certain lot in the city of Lincoln, and undertook the construction thereon of a building described in the record as the “Conservatory of Music.” He made a contract with Olson for the stone and brick work on the building, and Olson began the performance of the work, purchasing material from several different persons to whom he became indebted therefor. After the work had progressed to a considerable extent, but before the building was under roof, it became evident that Howell was unable to proceed, and the decree on sufficient evidence finds that he was wholly insolvent. Mr. Lamb was then a member of the law firm
After the title was thus perfected in Lamb he made a contract with Olson whereby Olson undertook to perform the labor necessary to complete the building according to certain designs which Lamb had made to fit it for a different purpose. By this contract Lamb’s ownership) of the Leavitt and Holmes judgments was recited, and, allowing certain deductions, their net amount was fixed at $2,500. Lamb agreed to pay Olson certain specified rates for labor performed on the building and on completion of the work to release the judgments. This contract was carried out. The stone company had shipped a quantity of stone which was not inwrought in the building prior to the foreclosure. In completing the building Lamb bought this stone and the stone company received pay from Mm therefor, knowing that he had become the owner of the property. Soon after the building was completed this suit was brought.
It will be convenient to consider first the case of Olson and then that of the stone company. The position of Olson is that Lamb as his attorney could not without his consent buy the property for himself; that Lamb was guilty moreover of actual fraud which had a double effect: first, to relieve Olson from any estoppel which might arise by reason of his dealing with Lamb as the owner; and second, to deprive Lamb of all right to .compensation or reimbursement. That an attorney cannot himself purchase at judicial sale the property in litiga
In this connection we may here dispose of certain other features of the accounting had. The court allowed Lamb $300 for services in procuring the confirmation of the sale. We must regard this as an unwarranted allowance. The sale was on such terms that Olson was entirely uninterested in its confirmation, and it was evident that Lamb performed these services on his own behalf. We know of no rule which permits an attorney endeavoring to purchase for himself to receive compensation from his client for his efforts in so doing. The decree also includes as an allowance to Lamb $500 for his services in the foreclosure ca,se. These services were rendered on behalf of the firm of Lamb, Ricketts & Wilson and are not a proper set-off in a suit against one member of the firm. Another item allowed Lamb was $750 for services in superintending the building. We think the rule is that even a constructive trustee is entitled to compensation for managing property, where he is chargeable with the rents. The decree charges Lamb with the income from the property; and taxes and other expenses, including a reasonable compensation for management, should in equity be deducted from the amount so allowed.
The accounting in order to ascertain the amount required to redeem proceeded in several particulars on a false basis, and we have not findings in all respects sufficient to enable us to restate the account. As to Olson the case must be reversed and remanded with directions to the trial court to retake the account, allowing to Olson the benefit of the discounts at which Lamb purchased the liens, including the $1,000 remittitur, and to allow him also the reasonable value of his work under the contract to complete the building; to chax’ge Lamb with rents. On the other hand Lamb should be credited with
We now reach the case of the Prentice Brownstone company, and what has already been stated applies in great measure to this branch of the case. The stone company positively refused to buy the property or to advance any money for the purpose of purchasing it or protecting its lien. The day after the sale an agent of the company was in Lincoln and what occurred is somewhat in dispute. It is very evident that Mr. Lamb told the agent that by some means they were still in position to take the property and protect themselves. ' According to Lamb the statement was that “he had kept a string to it.” It is equally clear that the nature of this “string” was not disclosed, and that the company did not know that Lamb was in effect the purchaser. The company again peremptorily refused to take any steps. Here again by this action and by the company’s subsequently selling stone to Lamb to complete the building, knowing that Lamb claimed it as his own, there would be a:i election allowing him to take the property; but the force of this election was avoided, in the first place, by Lamb’s concealing the fact that he was the purchaser,and could therefore be treated as a trustee. Moreover the company’s rights were unjustly affected .by other facts of which it then had no knowledge and of which it did not acquire knowledge until after the building was completed. The bid of $7,001 was just about sufficient to discharge the liens prior to the first group of mechanics’ liens, one of which was held by the stone company. The company did not know that the amount of the other liens in this class had been reduced by Lamb’s purchase thereof at a discount, nor did it know that the terms of the sale were such as to provide in whole or in part for the discharge of the other liens in the same class, to the
Finally, the court erred in entering a judgment absolute against Lamb for the amount which he obtained by these discounts and by the remittitur, and then calculating the amount required from Olson to redeem at the full sum. This would require Olson to p:ay the whole amount and recover part back on his judgment. The amount owing Olson from Lamb should be deducted in ascertaining the amount required to redeem., and any judgment against Lamb should be effective only in case of Olson’s failure to redeem.
The judgment is-reversed and the case remanded with directions to proceed in accordance with this opinion.
Reversed and remanded.