Earhart v. Churchill Co. , 169 Cal. 728 ( 1915 )

On May 29, 1909, a complaint was filed in which the plaintiffs attempted to allege two causes of action one to quiet title to certain property in Siskiyou County, and the other based upon the asserted fraud of one Jerome Churchill as one of the administrators of the estate of Charles B. Boyes, deceased, in conducting a sale of the property involved to one Renner, who by a previous arrangement with said Churchill conveyed the land to him and to the Siskiyou County Bank. The sale was made after order of court in that behalf and the amount obtained was the exact sum necessary to cancel a mortgage on the property in which Jerome Churchill and the Siskiyou County Bank were the mortgagees. The date of said sale was December 21, 1895. It was alleged that before the death of said Churchill in 1908 he acquired the bank's title to the property and conveyed it to the Churchill Company, a family corporation of which he was a member. A demurrer to the second cause of action was sustained September 21, 1912, and on October 7th of that year a "First Amended Complaint" was filed, seeking to set up a cause of action based upon the alleged fraud. A demurrer to this complaint was sustained and plaintiffs failing to amend their pleading, judgment was entered against them.

It was alleged in the first amended complaint that Jerome Churchill was at the time of his death in 1908 an administrator of the estate of Charles B. Boyes, deceased, and that he had never been discharged from the office of guardian of the minor heirs of said Boyes, to which he had been regularly appointed. It was also averred that no final accounting had ever been made in either the guardianship proceeding or the estate of Charles B. Boyes.

The probate sale was made at public auction and was confirmed by the court on January 11, 1896. The alleged fraud of Churchill was "that for the purpose of shutting out competition in bidding at said sale, and for the purpose of preventing other bids being made at said sale, other than his own," he caused the sale to be called at "about the hour of 9 o'clock" of December 21, 1895. It had been advertised to take place at 10 o'clock, and "by reason of no competitive bids the sum for which said premises were bid in was far below the real and true value thereof."

It thus appears that the sale took place more than fourteen years prior to the commencement of the action and more than sixteen years before the filing of the first amended complaint. On the confirmation of said sale Jerome Churchill, administrator, and Margaret Janes Boyes, widow of Charles B. Boyes, and administratrix of his estate, executed to the purchaser a deed which was recorded January 17, 1896. Thereafter the purchaser gave his deed to the property to Churchill and the Siskiyou County Bank, which was also recorded on January 17, 1896, more than thirteen years prior to the commencement of the action, and said deed had been of record more than twelve years before Churchill's death. Margaret Jane Boyes continued the administration of the estate of her deceased husband until April 21, 1910, when she resigned. It is to be noted that Margaret Jane Boyes is not a party to the action in any capacity and that since its commencement and before the filing of the first amended complaint she joined with six of her children in a deed granting to the defendant all interest in the property involved.

Respondents call our attention to the further fact that the other children, appellants herein, have been of the age of majority at least since a time prior to November 27, 1903.(Estate of Boyes, 151 Cal. 145, [90 P. 454].) But we need not refer to the opinion in that case, in which, by the way, Mr. Churchill's conduct in the very transaction here attacked as fraudulent, is highly commended. Upon the face of the complaint itself the court was bound to sustain the demurrer. As we are not informed in the first amended complaint when John Ethan Boyes and Fannie Jane Pope or either of them reached majority, we are bound to assume, under familiar principles of pleading, that each wassui juris at a time long enough prior to the filing of the first amended complaint to allow the statute of limitations to operate if it be applicable at all. When a complaint fails to state the time of the discovery of a fraud committed more than three years before the commencement of the action a demurrer based upon the statute of limitations will lie. (Sublette v. Tinney, 9 Cal. 425. ) From the complaint itself it appears that record evidence of Mr. Churchill's purchase of this property has been in existence for many years and there is no allegation that appellants were not at all times fully aware of the facts. Merely because he had been their guardian they were not entitled, after coming of age, to shut their eyes to the fraud, if any had been committed. Equity will not countenance stale claims and after the lapse of so much time will strictly scrutinize such bills as this and will send applicants for relief out of court unless they make a most meritorious showing of their right to the assistance for which they pray. (Burke v. Maguire, 154 Cal. 465, [98 P. 21];Robertson v. Burrell, 110 Cal. 578, [42 P. 1086].)

But appellants contend that by his fraud Mr. Churchill became their trustee; that his possession was their own; and that consequently the statute could not run against their rights. The rule which they invoke and the authorities which they cite are applicable to express trusts — not to involuntary trusts. A trustee of such a trust need not repudiate it in order that the statute should begin to run. (Hecht v. Slaney, 72 Cal. 366, [14 P. 88]; County of Los Angeles v. Winans, 13 Cal.App. 261, [109 P. 650]; Broder v. Conklin, 121 Cal. 288, 53 P. 699]; Nougues v. Newlands,118 Cal. 106, [50 P. 386].) Section 338, subdivision 4 of the Code of Civil Procedure, was therefore applicable and was properly held by the lower court to be a bar to the action. (Unkel v.Robinson, 163 Cal. 651, [126 P. 485].) The demurrer also specified sections 318, 336 (subdivisions 1 and 2),343 and 1573 of the Code of Civil Procedure, so that in any view of the pleading the action was barred and the bar of the statute properly brought to the attention of the court.

All that has been written above has assumed that the fraud was sufficiently alleged. Respondents contend with much force that the complaint failed to aver fraud with that particularity and clearness required in all bills of equity seeking such relief as is here prayed for. But we need not go into that question as the cause of action, even if sufficiently set forth, is very clearly barred by the statute of limitations.

The judgment is affirmed.

Henshaw, J., and Lorigan, J., concurred.