Luco v. De Toro , 91 Cal. 405 ( 1891 )

Paterson, J.

Appellant and several other plaintiffs brought this action against respondent and several other defendants for partition of a tract of land known as the rancho mission (or ex-mission) of San Diego, a patent to which issued from the United States of America to Santiago Arguello, or his legal representatives, on the first day of September, 1876. The original complaint, which was filed August 8, 1882, contained all the allegations required by chapter 4, part 2, title 10, of the Code of Civil Procedure. On December 13, 1886 (after the cause was reversed on the former appeal, 70 Cal. 339), plaintiffs, by leave of the court, filed an amendment to the complaint, inserting between paragraphs 21 and 22 thereof the following: “ Plaintiffs allege that the pi aim tiff Juan M. Luco owns an undivided equitable interest in the said rancho of ex-mission of San Diego by reason .that on and before the third day of February, 1869, said Agustín Olvera was the owner and in possession of an undivided share or interest of more than one half of said rancho, and that on said day the said Agustín Olvera made and entered into a contract, in writing, with the said Isaac Hartman, now deceased, in the words and figures, to wit:—

“‘This agreement, made and entered into this third day of February, A. D. 1869, between Isaac Hartman, party of the first part, and Agustín Olvera, party of the second part, witnesseth as follows, to wit:—

“ ‘ That the party of the first part, as attorney and counselor at law, undertakes and agrees with the party of the second part to procure a patent from the United States for the lands of the ex-mission of San Diego, of San Diego County, bounded and described as follows, to wit [giving the specific boundaries of said rancho],

“‘In consideration whereof, the party of the secopd part agrees to pay the said party of the first part as follows: The sum of one thousand dollars for personal expenses incurred by the party of the first part in said business, but not to exceed in any case said sum of one thousand dollars.

“ 1 In addition to which the party of the second part is also to pay the costs of proceedings to obtain said patent, and to convey to the party of the first part an undivided interest in the lands to be patented of said ex-mission, as follows: If the patent issues for five leagues, one half league; if for six leagues, one league; if for seven leagues, one league; if for eight leagues, one and one half leagues; if for nine leagues, one and one half leagues; if for ten leagues, one and one half leagues; if for eleven leagues, two leagues; and whatever amount is patented over and above eleven leagues is to be equally divided between the parties of the first and second parts; that is to say, that the party of the first part is to be entitled to the one undivided one half of the excess over and above eleven leagues, and the four leagues of land in the immediate vicinity of said ex-mission are to remain exclusively for the parties of the second part.

In testimony whereof, the parties have hereunto, and to another instrument of same tenor and date, set their hands and seals the date first above written.

“ ‘ Isaac Hartman.

[Seal.] “ ‘ Agustín Olvera.

“ ' Acknowledged in Los Angeles County, February 3, 1869, before James F. Lander, Notary Public.

“ 'Filed for record in the recorder’s office of San Diego County, February 20, 1871.’

“That the said contract was fully performed by the said Hartman on his part, so that on the first day of September, 1876, he procured to be issued a patent from the United States for the rancho of the said ex-mission of San Diego, as described in said contract, and to the extent of 58,875.38 acres; that theretofore, to wit, on or about the twenty-third day of March, 1869, by his deed of that date, said Isaac Hartman, for a good and valuable consideration, conveyed all his right, title, and interest in said rancho, acquired under and by virtue of the aforesaid contract made by said Olvera with said Hartman, and of said conveyance from said Hartman to said Luco, he, the said Luco, became the owner, and was and is entitled to an interest or share, of-acres, undivided, in said rancho, and that be has now, and has had since the date of said conveyance, the just and equitable title thereto; that said Luco, as tenant in common, for more than five years prior to the commencement of this suit, had been in possession of said premises, and has paid his proportionate share of all the costs and expenses attending the proceedings taken herein for the partition of said rancho; that at the time of the death of the said Agustín Olvera, as aforesaid, he held the legal title to more than one half, undivided, of said rancho, subject tó the aforesaid equitable interest of said Luco. Wherefore, plaintiffs pray that by the decree of this court there be set off to the said Luco, in severalty, the said 6,083.2743 acres derived to him as aforesaid.”

To this amended complaint an answer was filed, in which it is alleged that Agustín Olvera died on the sixth day of October, 1876, and that in June, 1882, the defendant Juan de Toro was duly appointed administrator of the estate of said Olvera, deceased, and that said decedent was at the time of his death seised in fee of thirty thousand acres, undivided, of said rancho ex-mission San Diego, and that his heirs and representatives have ever since been seised in fee of said interest.

Further answering, said defendant De Toro alleges that the plaintiff’s cause of action is barred by the provisions of sections 319, 337, 343, and 318 of the Code of Civil Procedure. He denies all the allegations of the complaint not admitted by said answer. By this all the material allegations of the complaint were denied, among which is the allegation of full performance by Hartman, on his part, of the contract between him and Olvera.

Upon that issue the finding of the court is as follows: “ That immediately-after the execution of the agreement between Agustín Olvera and Isaac Hartman, said Hartman entered upon the performance of the stipulations in said agreement contained on his part to be performed, and after his sale to plaintiff Luco, as found in finding 2, said Luco and Hartman continued in the performance of said stipulations, and did so continue by themselves, or their agents and attorneys, to prosecute to a final conclusion the agreements and stipulations in said agreement contained on the part of said Hartman to be performed; that owing to a quarrel between Hartman and Olvera, about the year 1874, Olvera became dissatisfied with Hartman, and on behalf of himself and the heirs of Santiago Arguello, the confirmee of said ex-mission rancho, employed one A. St. Clair Denver, an attorney at law of Washington City, District of Columbia, to prosecute the claims of said heirs and of the interest of said Agustín Olvera in and to the rancho ex-mission of San Diego, before the proper department, at Washington City aforesaid, and thereafter, by the joint exertions of said A. St. Clair Denver and the Honorable Cornelius Cole, acting as attorney for Hartman and Luco, a patent was duly obtained, as alleged in the complaint, on the first day of September, 1876; that owing to the death of the principal parties to the said agreement, to wit, Hartman and Olvera, the great lapse of time and uncertainty of recollection of surviving witnesses, under the evidence in this case, it is impossible to determine and measure the extent of performance of plaintiff or his vendor Hartman, under the agreement aforesaid, and the court finds only that up to the time of the issuance of the patent aforesaid, there had not been a full and complete or substantial performance of that agreement on the part of Hartman or Luco as vendee, but only a partial performance thereof.”

The appellant contends that a correct reading of this finding shows that Hartman fully performed, and that upon such performance his estate in equity became indefeasible. Respondent claims that the concluding sentence is a finding of the ultimate fact that there was not a full and complete or substantial performance of the agreement on the part of Hartman or Luco. The finding, in' our opinion, is ambiguous and uncertain. Appellant was entitled to an unequivocal finding on the question of performance. If, however, the finding can be construed as a finding in favor of respondent on that subject, it is sufficient to say that, in our opinion, it is not supported by the evidence. We think it is clearly shown that Hartman and Luco fully performed the stipulations to be performed under the agreement. There is no substantial conflict in the evidence as to what was done by Hartman and his assignee, Luco, in procuring the patent. They did all that was necessary to be done in order that the patent might issue for the quantity of land which was finally granted. The fact that Olvera, in conjunction with other parties not parties to the contract with Hartman, deemed it proper to employ Denver to assist in procuring the patent, and that Denver did render valuable services in that connection, in no way affects the right of Hartman or Luco under the contract. Olvera could not by employing other persons defeat the rights of Hartman and Luco under the contract.

Whether the finding be regarded as contradictory and uncertain, or a finding that there was no substantial performance of the agreement on the part of Hartman and Luco, the judgment will have to be reversed, unless the finding that the cause of action was barred by the statute of limitations can be sustained. In their answer the defendants allege that plaintiff’s cause of action was barred by the provisions of sections 818, 319, 337, and 343 of the Code of Civil Procedure, and upon the issues thus raised the court found that the cause of action was barred by the provisions of sections 337 and 343, but made no reference to sections 318 and 319. We cannot agree with appellant in his contention that the findings of the court on these issues are not findings of ultimate facts, but are conclusions of law. It is necessary, therefore, to consider the question as to whether these findings are supported by the evidence. We think they are not.

The court found (finding 7) that after the issuance of letters testamentary to Olvera, and before they were revoked, to wit, November 5,1877, the plaintiff demanded of Olvera, as executor, a conveyance to him, Luco, as tenant in common, of 13,904.31 acres of" the mission rancho, under and in accordance with the terms of the contract between Olvera and Hartman; and also found (finding 14) that Olvera, in his lifetime, “after the year 1874, and his representatives after his death, always repudiated any obligation under said contract to Hartman, or his assignee, Luco, and claimed to have and hold the •whole interest to which he, Olvera, held the legal title when he died, adversely to Hartman or his assignee, free from any claim on the part of either under said contract.” But these findings do not show a disavowal of the trust relations created by the contract, and notice to the plaintiff of such disavowal. We are left in ignorance as to the reason why Olvera refused to make the deed requested. It is not found that he refused to make the deed because he denied the existence of such relation of trustee and cestui que trust, nor is it found that he so stated to Luco, or that Luco so understood his refusal. Olvera was under no obligation, in fact had no authority, to make the conveyance demanded, without an order of the probate court, and it was the duty of the party demanding the deed to apply to the court for the necessary order. (Code Civ. Proc., secs. 1597, 1598, 1600, 1606, 1607.) A repudiation of the trust by Olvera, and notice thereof, cannot therefore be predicated upon the facts found. It certainly cannot be said that the mere fact of refusal under the circumstances is sufficient to show notice to the beneficiary of such repudiation, and time begins to run against a trust only from the time it is openly disavowed by the trustee, and the adverse claim is clearly and unequivocally made known to the cestui que trust. Finding 14, we think, is not supported by the evidence; but assuming that it is, it simply shows a repudiation of any obligation under the contract, and an adverse claim without notice thereof to Hartman or Luco, his assignee. The testimony of Forbes shows that there was a quarrel between Hartman and Olvera in 1874, and the court finds that about that time Olvera became dissatisfied with Hartman, but the nature of the quarrel is not stated. The trouble between Hartman and Olvera seems to have been caused by the attempt on the part of the former to have Olvera removed as administrator of the estate. Olvera claimed that Hartman was working against him. This claim could not have referred to the matter of procuring a patent, and the court has found as a fact that Hartman and Luco continued in the prosecution of the stipulations contained in the agreement. If it be assumed, however, that the quarrel related to and arose out of the matters referred to in the contract, the action of Olvera could not bind Luco. Hartman had assigned his interest in the contract to Luco long prior to the time of the conversation referred to, and of this fact Olvera had both actual and constructive notice. Olvera’s repudiation could not affect the rights of Luco, unless the latter had notice thereof, and there is nothing in the record to show that he ever gave notice to Luco of his intention to repudiate the claims of Hartman under the contract. Luco and Hartman continued to perform the stipulations of the contract on their part to be performed up to the time of the issuance of the patent. Luco made large expenditures in prosecuting the claim and in procuring the patent. He expended about six thousand dollars, and gave Bolton, for the assistance rendered in the surveyor-general’s office, five hundred acres of land.

By the terms of the contract between Hartman and Olvera an express trust was created. It is not necessary in the creation of an express trust to use any particular form of words. The relation of trustee and cestui que trust is established, and an express trust created, if the language used in the instrument creating the trust expresses the intention that one party shall hold the legal title and the other shall have the beneficial interest. The language of the contract before us is a clear declaration on the part of Olvera that thereafter he would hold the legal title, in trust, for Hartman, to the extent of the latter’s beneficial interest under the contract. Full performance by Hartman created an indefeasible estate in equity which could not be defeated or divested by Olvera without positive and unequivocal repudiation of the trust relation, and notice of such repudiation to the beneficiary. (Miles v. Thorne, 38 Cal. 338; 99 Am. Dec. 384; Love v. Watkins, 40 Cal. 547; 6 Am. Rep. 624; Hearst v. Pujol, 44 Cal. 235; Hoffman v. Vallejo, 45 Cal. 572; Janes v. Throckmorton, 57 Cal. 388.)

In Hoffman v. Vallejo, 45 Cal. 572, it was held that an agreement like the one before us is not against public policy, and constitutes the attorney the equitable owner of an undivided interest in the lands, and creates the relation of trustee and cestui que trust. The statute begins to run against the trust “ as soon as it is openly disavowed by the trustee insisting upon an adverse right and interest which is clearly and unequivocally made known to the cestui que trust, and when, for instance, such transactions take place between the trustee and cestui que trust as would, in the case of tenants in common, amount to an ouster of one of them by the other.” (Speidel v. Henrici, 120 U. S. 377.) Where there has been full performance by the vendee under a contract to convoy the land, an indefeasible estate in equity vests in the vendee, and the possession of the vendor is presumed to be the possession of his cestui que trust, the vendee. The statute cannot run against one’s own possession. (Wright v. Ross, 36 Cal. 433.) There can be no adverse holding “ until the trustee denude himself of his trust by assuming to hold for himself, and notifies the cestui que trust of his treachery.” (Haynie v. Hall, 5 Humph; 290; 42 Am. Dec. 427.) Respondent claims that the word “repudiate,” as used in finding 14, is equivalent to and implies notice. In the case cited (Hecht v. Slaney, 72 Cal. 366), it was held simply that denial or repudiation is not necessary' in order to set the statute of limitations in motion in cases of implied trust. There may be disavowal and repudiation of the trust without knowledge or notice of the same being brought home to the beneficiary. (Miles v. Thorne, 38 Cal. 338; 99 Am. Dec. 384.) In Bennett v. Morrison, 120 Pa. St. 390, 6 Am. St. Rep. 711, it was held that “ the vendor of land sold under articles of agreement must not only in some way repudiate the agreement, but must take actual possession of the premises, either in person or by an agent, a tenant, or other vendee, in order in break the relation his vendee sustains to him under the agreement, -before the statute will commence to run.”

In Love v. Watkins, 40 Cal. 547, 6 Am. Rep. 624, Mr. Justice Temple said: “ The conveyance from the trustee to the cestui que trust in such cases is but the execution of the trust; the right to obtain the legal title is but an incident to the estate of the cestui que trust. So long, therefore, as the estate exists, so long will the right to acquire the legal title subsist. It is like the right of a tenant in common to compel partition, and is not a cause of action which accrues in the sense of the statute of limitations, and which may be lost by the lapse of time. The trustee and cestui que trust have the same title, and do not hold adversely, so long as the rights of neither are denied." Although the question presented for consideration in that case was, whether a vendee in possession under an executory contract, who had fully performed the agreement on his part, but had not obtained a deed, could compel a specific performance after the • lapse of four years from the time when he might have demanded a deed, yet the doctrine announced by the learned judge is sound in principle and supported by authority. In Harris v. King, 16 Ark. 122, it was held that a vendor who had received the purchase-money became the trustee of the vendee, and, although actually in possession of the land, held the naked legal title in trust for him, and the statute of limitations was no bar to an action for a specific performance of the contract, if the vendor had done no act inconsistent with the vendee’s title, other than simply holding possession. In Graham v. Nelson, 5 Humph. 605, it was held that the possession of the vendor before conveyance would be construed for the benefit of the cestui qm trust, where it could be reasonably presumed to be in accordance with the trust, and the statute would not run. In that case none of the parties was in possession of the land. (See also Angell on Limitations, secs. 137, 138; Hemming v. Zimmerschitte, 4 Tex. 159; Lewis v. Hawkins, 23 Wall. 125; Pomeroy’s Eq. Jur., sees. 105, 147, 155, 368, 1010, 1046.)

In Rush v. Barr, 1 Watts, 110, the court said: “ The statute of limitations is a most useful one, and ought not lightly tó be frittered away; but there are cases to which it does not apply. Whenever the legal title is in one, and the real interest in another, these form bat one title, and the statute does not run between them until the trustee disclaims and acts adversely to the cestui que trust. .... And so in all cases where two persons have each an interest in a tract of land of such kind that both their interests form but one title, and by their agreement one is to possess for his own use, and the use of the other. In such cases the statute does not run until he in possession disclaims the right and interest of the other, — denies his right and refuses possession, — and such disclaimer and denial must be such that the other has notice of it. It is not sufficient that it is denied secretly, or an agreement inconsistent with it is made and concealed.” (See also Hill on Trustees, 264, note 3; Huntley v. Huntley, 8 Ired. Eq. 250; Tiffany and Bullard on Trusts, 715-717.)

In Hemming v. Zimmerschitte, 4 Tex. 159, Chief Justice Hemphill, speaking for the court, said: “It is an acknowledged principle that vendor and vendee, under an executory contract for the sale of lands, occupy, mutually and respectively, the relation of trustee towards each other (Sugden on Vendors, 160), so long as they do not indicate by their acts an intention to refuse compliance with the obligations imposed by their contract. In this case the vendee having performed his obligations, the vendor’s subsequent possession or interest in the land was held in trust, and in subordination to the superior equitable right of the vendee; and this possession would continue to maintain its fiduciary character until the vendor would manifest an intention to claim and enjoy the land as his own.”

In Holman v. Criswell, 15 Tex. 394, the court applied the same rule. In that case, like the one at bar, there had been no actual possession by either party. The court said: “The obligations of the vendee having been already discharged, limitation would not run against the vendee until the vendor manifested an intention by adverse possession or some hostile act to claim and hold the land as his own.”

In this case the transcript shows no words or condu'ct on the part of Olvera indicating an intention to repudiate the trust; at least there is nothing in the record to show that Luco had any notice of such an intention. After the assignment by Hartman tO' the plaintiff, the former could not by any statement to Olvera prejudice the rights of Luco, unless thereafter there was a failure by him and plaintiff to perform the work required by the contract. At the time it was alleged and found that Hartman said he would have nothing further to do with the matter, no cause of action had accrued against which the statute of limitations could be put in motion, and, as we have seen, Hartman and Luco fully performed the conditions of the contract, and the estate of Olvera received the benefit of their work.

Nearly all of the cases relied on by respondent are cases of resulting or implied trusts. In such cases it is uniformly held that possession is necessary to prevent the running of the statute. In cases of express trust cited by respondent, it is true the courts rested their decisions upon the ground that the possession of the cestui que trust was sufficient to prevent the bar. No authority has been cited holding that in case of an express trust the statute will run against the vendee after full performance because he is out of possession, except Brennan v. Ford, 46 Cal. 7; and what was said there on the subject was unnecessary to the decision, which went upon the ground that Brennan’s cause of action did not accrue until the delivery of the deed, January 31, 1867 (within four years prior to the commencement of the action). The actual possession of the vendor or non-possession of the vendee is a circumstance, of course, to be considered in determining whether there has been a repudiation of the trust and notice thereof to the vendee. But it is not controlling. The relations existing between vendor and vendee after full performance are governed by the same rules as those which exist between ordinary tenants in common, so far as repudiation of title and ouster are concerned. (Speidel v. Henrici, 120 U. S. 377.)

Upon the issuance of the patent in September, 1876, the plaintiff became vested with an equitable estate in the land, and not merely a right to the land, as fully as if he had made a contract of purchase and had paid the full amount of the purchase price. The defendant thereafter held the legal title in trust for him, and the constructive possession which followed the legal title inured to the benefit of the plaintiff as well as to the benefit of the defendant. The plaintiff could be divested of this estate in the land by transfer or adverse possession, but not by mere lapse of time. The court did not base its decision upon any adverse holding of the defendant, but upon the ground that the action should have been commenced within four years after the plaintiff had acquired the right to a conveyance, or within four years after the repudiation of his claim by the defendant. It may be conceded that if the action were merely to procure a deed of conveyance in accordance with the terms of the .agreement, the statute of limitations would be a defense, upon the ground that such action, being purely personal, would be barred by lapse of time. It would not follow,however, that even upon such failure the plaintiff would he unable to maintain his action in partition. The deed of conveyance would be only additional evidence of his rights in the land. It is not necessary that the plaintiff in an action for partition should have the legal title to the land. (Watson v. Sutro, 86 Cal. 527.) The facts establishing his right to the land can be shown in the suit for partition, and the same result must follow therefrom, without regard to the character of evidence by which they are shown. Under our system of procedure the form of aclion is disregarded, and the plaintiff seeking relief is required to state only the facts constituting his cause of action. This, however, is not an action on the contract between Hartman and Olvera. That contract is simply a piece of evidence which the plaintiff uses in establishing his right to the land as he would a deed or any other evidence of title. A finding of the court that the contract had been completely executed on the part of Hartman would, of itself, be a determination that the plaintiff is entitled to the land provided for in the contract. The contract would then cease to be an element in the case, and such finding of complete performance would throw upon the defendant the burden of showing some act upon his part subsequent thereto sufficient in law to divest the plaintiff of his right to the land.

We do not think the amendment to the complaint filed December 13, 1886, stated a new cause of action. The action was originally commenced for a partition of the rancho. The amendment merely stated more particularly the source and evidence of plaintiff’s title. That evidence does not constitute the cause of action.

We think that in this action for a partition there can be no doubt that the parties may assert any title which they have, legal or equitable. (Gates v. Salmon, 35 Cal. 593; 95 Am. Dec. 139; Martin v. Walker, 58 Cal. 596; Watson v. Sutro, 86 Cal. 527.) In equity the plaintiff has a perfect title. At the time this action was commenced he had the legal title to several thousand acres of land, besides the equitable title to the lands in controversy. The court had jurisdiction of the subject-matter, and acquired jurisdiction of the parties.

It is claimed by respondent that the specifications of insufficiency of the evidence are not made with sufficient particularity to entitle appellant to question the findings of the court. We think this point is not well taken.

A number of errors are assigned by appellant, but in one only we think there is merit. The plaintiff offered to prove that he and Hartman expanded large sums of money to preserve the estate of Arguello. The offer was rejected, and plaintiff excepted. In view of the fact that defendant claimed Hartman had abandoned his demand under the contract, it was material and relevant, we think, to show that Hartman and Luco were performing services and spending large sums of money to preserve the estate of Arguello, in order that there would be something to divide after payment of the debts and expenses of administration, and after the patent should be issued.

Judgment and order reversed, and cause remanded for a new trial.

Harrison, J., Sharpstein, J., and Garoutte, J., concurred.