158 P. 279 | Or. | 1917
Lead Opinion
delivered the opinion of the court.
The motion is based upon two contentions: (1) That the sureties upon the undertaking’ on appeal are insufficient; and (2) that the appellant did not file a supersedeas bond and that the sheriff has already sold the land upon execution and such sale has been duly confirmed and that therefore there is no substantial controversy upon which this court is called to pass.
Affirmed July 3, 1917.
Opinion on the Merits
On the Meeits.
(165 Pae. 1180.)
This is a suit by Arthur J. Ranzau, by Dorothea V. Ranzau, his guardian ad litem, against J. C. Davis and William Esch, sheriff of Marion County, Oregon, in which the defendants obtained a decree in their favor and the plaintiff appealed. The facts are set forth in the opinion of the court. Aeeiemed.
For appellant there was a brief over the names of Mr. Charles E. Lennon, Mr. John H. McNary and Mr. Charles L. McNary, with oral arguments by Mr. Lennon and Mr. John H. McNary.
For respondents there was a brief and an oral argument by Mr. Walter C. Winslow.
delivered the opinion of the court.
This suit involves the question as to whether or not the farm described in the complaint is subject to an execution upon a judgment in favor of defendant Davis obtained for services performed, boarding help, and expenses incurred raising and harvesting a crop of hops on the land. . The trial court held that the property was liable for the debt and plaintiff appealed.
The plaintiffs assert that the real estate is the property of Arthur J. Ranzau, a minor; that the same is held in trust by Dorothea Y. Ranzau, his mother. The circumstances relating thereto are about as follows: The grandfather of the alleged beneficiary, John P. Rahzau, at different dates advanced money to his daughter-in-law. She testifies that in 1897 she and her husband borrowed $1,100 to pay off hop-pickers; that at one time her father-in-law advanced $500 for the purchase of an organ and a team of horses for her husband; that in 1908 he purchased town property in Grants Pass of the value of $3,000, taking a deed in the name of his daughter-in-law, and furnished a home for them; that about 1900 he advanced $1,400 which was used to redeem property belonging to her mother-in-law; that in 1901 he supplied $1,100 for a hop-house and the purchase of 160 acres of adjoining land. According to Mrs. Ranzau’s testimony a short time before the death of her father-in-law he told her to destroy the book in which the memorandum of the money loaned and expended had been kept, to put this money aside for his grandchild, and to invest it in real estate when he became twenty-one years of age. She states that in the meantime “I and my husband was to have the benefit” and he said “for me to put in trust for my son.” The Ranzaus resided
There is considerable controversy in regard to whether the deed was executed to Mrs. Eanzau, as trustee, for the benefit of her son, or for the purpose of avoiding the payment of indebtedness. She claims that she stated to Mr. Davis that the property belonged to her son, and yet in her testimony she refers to the fact of having given a mortgage for $8,000 on her farm, the one in question, to the Portland Trust Company of Oregon. Considering the property as held in trust the directions given by the settlor when
“The estate is not liable for obligations assumed by the trustee in excess of his authority; but the estate will be liable if the trustees are acting within the limits of their stated powers or with implied authority. Thus, trust property which has been embarked*33 in business, under a power, is primarily liable to creditors for debts incurred in conducting the same”;
citing, among others, North Am. Coal Co. v. Dyett, 7 Paige (N. Y.), 9; Mathews v. Stephenson, 6 Pa. St. 496; Woddrop v. Weed, 154 Pa. St. 307 (26 Atl. 375, 35 Am. St. Rep. 832).
The answer expressly alleges and the unquestioned proof shows that the services performed by Davis and the expenditures made by him were necessary and indispensable for the purpose of cultivating and caring for the crop of hops raised on the farm for the enhancement of the interest of the beneficiary. The trust property is subject to the debt so incurred: See authorities cited above. It appears from the evidence that at one time the sum of $5,000 received from the sale of hops was deposited in the bank to the credit of the trustee and that by means of the hop industry she was enabled to liquidate a considerable portion of the deferred payments for the purchase price of the
In England the rule is that where the trustee is authorized to carry on a business and to employ certain funds or property for that purpose, a creditor of the business has a right to the benefit of the lien which the trustee has against the property devoted to the purpose, subject to any equities between the trustee and the cestui que trust, none of which appear in this class: 2 Lewin on Trusts, p. 862. If Mrs. Eanzau, the trustee, had paid for the balance of the labor and expenditures of defendant Davis in relation to the hops, could there be any question but that she would have a just claim against the estate for the same? We think such a claim would be sanctioned by the courts. When the matter is properly before the court, a creditor who assisted in the business should not be disappointed in payment so far as the funds dedicated are concerned: Strickland v. Symons, 26 Ch. D. 248; Lewin on Trusts, p. 862, note. The distinction made
“Where expenditures have been made for the benefit of the trust estate, and it has not paid for them, directly or indirectly, and the estate is either indebted to the trustee, or would have been if the trustee had paid, or would be if he should pay the demand, and the trustee is insolvent or non-resident, so that the creditor cannot recover his demand from him, or will be compelled to follow him to a foreign jurisdiction, the trust estate may be reached directly by a proceeding in chancery.”
See Norton v. Phelps, 54 Miss. 467; Ames’ Cas. on Trusts, 421.
In Gisborn v. Charter Oak Life Ins. Co., 142 U. S. 326, 337 (35 L. Ed. 1029, 12 Sup. Ct. Rep. 277), Mr. Justice Brewer, in delivering the opinion of the court, said that, in mining, it is not a trustee’s duty to stop work the moment a vein is lost, and that, though it could not be foretold in advance how great had been the displacement, it was a reasonable exercise of the power vested in the trustee to make some limited exploration to see if the lost vein could not be recovered, and that reasonable expenses thus incurred are chargeable upon the trust estate.
The subjection of the property in question to the satisfaction of the debt of defendant is in effect applying the issues and profits of the farm, namely the proceeds of a former hop crop which were used in paying for the realty, to the liquidation of such indebtedness, and in equity and good conscience this should be done. It is the province of a court of equity
For at least two reasons, the interest of the Ranzaus in the property, and the circumstances and conditions of the trust estate, the judgment of the Circuit Court which had the benefit of hearing all the witnesses and so was in a good position to pass upon the merits of the case, should be affirmed, and it is so ordered.
Affirmed.