Newport v. Hatton

This is an action brought to establish the right of plaintiffs in certain land and to the proceeds of the sale thereof. Demurrers to the complaint were sustained, without leave to amend. Judgment for the defendants followed, and plaintiffs have appealed. While a number of objections were raised by the special demurrers, the real questions presented by the appeal are whether or not a cause of action was stated and whether or not the action was barred by the statute of limitations. Respondents seek, also, to invoke the doctrine of laches.

[1] Mrs. Newport, after being in possession for a number of years, attempted to raise money on the property by sale or mortgage, but found she could do neither because of the fact that the fee was in the children, all of whom were then minors and very young. She applied to William H. Hatton, an attorney then practicing in Modesto, of whom she inquired by what means she could raise money on the property. Hatton replied that he would examine the records and advise her whether anything could be done by which money could be obtained by mortgage or sale of the property. Shortly thereafter he advised Mrs. Newport that he had found a way by which to raise money on the land, and that he would undertake to execute the plan in consideration of one-third of the amount of money which was so raised being paid to him. Mrs. Newport acquiesced, and an arrangement was made by which the children, these appellants, without any sale through guardianship proceedings, were to be deprived of their interest in the property. The plan, it is alleged, was as follows: The attorney reported that the land, which

This plan was devised in order to give the purchaser at the tax sale an apparent title to the property so that suit might be brought in his name against Mrs. Newport and the minor children to have it declared that Plato was the owner of the land. It was agreed that Hatton should prepare a complaint with Plato as plaintiff, to quiet title against Mrs. Newport, the owner of the life estate, and her husband, and against the minor children, who were then aged from three to eleven years. Hatton was himself to appear for the minors through a guardian ad litem, to be appointed, and was to procure a judgment against them and in favor of Plato. Such complaint was drawn and filed on the fourth day of August, 1902. Summons was served upon the minor children by Hatton, who then procured the appointment of Charles Newport, father of the minors, as their guardian ad litem. Hatton filed answers on behalf of the adult defendants, and on behalf of the children by and through their guardian ad litem, and the matter came on for hearing. An amendment to the complaint filed on behalf of Plato was permitted to be made by inserting the word “fractional” in the description of the property, so that it was alleged to be a fractional, instead of a full, quarter-section, as first alleged. The various arrangements to procure judgment in the case upon the evidence of the tax deed were not disclosed to the court. It was kept in ignorance of the fact that Hatton had entered into an arrangement with the life tenant by which he was to appear for the minors, who

After the sale for taxes was made and the judgment quieting title procured, Hatton admonished Mrs. Newport that she must never reveal or tell anybody the reason or the purpose of the plan devised by him, or of the steps taken in the matter, for the reason, he stated, that if she did, the accomplishment of the end sought might fail, and the scheme could not be carried out. Mrs. Newport was forbidden by him to ever permit herself to speak of the property as her own, as she might thereby disclose the scheme and so frustrate the plan. Mrs. Newport obeyed the instructions of Hatton and never spoke of or divulged the transaction, whereby the property was sold for taxes and Plato’s apparent title quieted, until some months before the commencement of this action, complaint in which was filed August 13, 1921. Then, at a family council of herself, her husband, and these plaintiffs and their attorneys, she nar

It is alleged that some of the defendants, other than the Hattons, Sarah E. and Christian J. Newport, and the nieces and nephew of Plato, based their claim of right and interest in the property on transfers and conveyances from Plato, that others claimed through different sources, and that the claims of all of the defendants are without merit and create a cloud upon the title of plaintiffs. It is further alleged that all of these defendants claiming an interest in the property had notice through the public records of the county of Stanislaus and otherwise of certain specified facts, showing the invalidity of the proceedings relative to the tax sale and the judgment, and had knowledge that the tax deed was void, and the judgment in the suit brought by Plato to quiet title was collusive and designed to fraudulently divest plaintiffs of their rights in the property. The prayer of the complaint is that it be adjudged that plaintiffs—all. of whom were of age when the action was commenced—are the owners of the estate in fee, subject only to the life estate of Sarah E. Newport, and that the tax sale, and the deed issued in pursuance thereof, and the judgment obtained by Plato in the action to quiet title be adjudged to be null and void; that it be determined that the defendants have no right whatever in and to the remainder in fee of the property belonging to plaintiffs, and that a full accounting be had of all moneys received by Hatton or Plato through sales or conveyances made by them of the lands, and for equitable relief.

We conclude without hesitation that the judgment obtained by Plato against these appellants, the allegations of the complaint being admittedly true for the purposes of demurrer, was obtained through fraud and collusion. [2] An infant is ordinarily bound by acts done in good faith by his guardian ad litem or counsel in the course of a suit to the same extent as a person of full age. Even if the court pronounce a decree against an infant by consent, and "without inquiry whether it will be for his benefit, he is ordinarily as much bound as if there had been an examination and a finding that it was for his benefit. Such case falls within the general rule that a decree made by consent of counsel, without fraud or collusion, cannot be set aside by rehear

[4] At the oral argument -it seemed to be conceded by counsel for both sides that this case, in so far as it relates to an interest in land, is controlled by the limitations of section 318 of .the Code, of Civil Procedure, which provides that “no action for the recovery of real property, or for the recovery of the possession thereof, can be maintained, unless it appear that the plaintiff, his ancestor, predecessor, or grantor, was seized or possessed of the property in question within five years before the commencement of the action.” That cannot be, for neither seisin nor possession is involved, but we deem it unnecessary to determine what is the proper section to apply, for no statute of limitations has yet run. In determining that question, it becomes necessary to ascertain the nature of the action, which may be done through a scrutiny of the allegations of the complaint, and, in a measure, by the character of the relief sought and necessarily incident to the purpose and final determination of the action. (Bradley Bros. v. Bradley, 20 Cal. App. 1 , 5 [ 127 Pac. 1044 ].) [5] From such an examination, it clearly appears that the plaintiffs’ action is founded upon a claim that the judgment transferring the legal title from them was secured by fraud and collusion, for which reason they

[6] The appellants are not in court on the theory of a trust which leaves all the steps in the transaction undisturbed, but for the reason that the entire transaction should be annulled. Under the facts pleaded, this action is one to establish a paramount interest in property, and to remove a cloud from the title. Possession is not involved, and cannot be, for, until the falling in of the life estate of the mother, the plaintiffs are not entitled to possession. Mrs. Newport, as life tenant, could not, by her dealings .with the life estate, malee her own or a grantee’s possession adverse to that of the remaindermen so as to start the statute of limitations against them during the life estate. (Civ. Code, sec. 741; Akley v. Bassett, 189 Cal. 625 , 643 [ 209 Pac. 576 ].) “It would be strange, indeed, if during the life of the particular tenant a remainderman could be compelled to lose his estate on account of another’s possession which he would be utterly helpless to interrupt.” (Pryor v. Winter, 147 Cal. 554 , 559 [ 109 Am. St. Rep. 162 , 82 Pac. 202 , 204].) It was the duty of Mrs. Newport, as life tenant, to pay the taxes upon the property. (Civ. Code, sec. 840.) Instead of paying the tax, she arranged with her attorney that someone selected by him should purchase the property at the delinquent tax sale, and take title through the medium of a sale to himself. By this arrangement, Plato, the purchaser at such sale, merely became her agent for the payment of the tax, and the tax deed to him, assuming it to be other

Where a right of action is joint, knowledge which would bar it as to one of the plaintiffs would bar it as to all. (Robertson v. Burrell, 110 Cal. 568 , 577 [ 42 Pac. 1086 ].) At the time of the commencement of this action the oldest child of Mrs. Newport had been of age for twelve years, and the youngest for four years. The respondents contend that the action is in fact a joint action, and was barred as to all the plaintiffs five years after the oldest child became of age, citing the language of this court in Akley v. Bassett, supra. In disposing of the contention, we do not mean to imply that this is a joint action. (See sec. 384, Code Civ. Proc.) The Aldey case was unlike this in that the remainderman waited for some seventeen years after the death of the life tenant before beginning her action in partition. During all that period she was entitled to possession as owner of a part of the fee, but at no time during the period did she assert her rights. In the case now before us the life tenant was still alive, and the time for possession by the remaindermen had not arrived when the action was commenced. [7] The statute of limitations in such action as this does not begin to run against the parties in remainder until after the death of the tenant for life who has aliened the fee. Until that event takes place, the possession of the purchaser is not and cannot be adverse to the remaindermen or reversioners. (Mann v. Mann, 141 Cal. 326 , 330 [ 74 Pac. 995 ]; Pryor v. Winter, supra.) [8] A claim of title, even of record, unaccompanied by adverse holding, will not start the statute. A party holding the paramount claim to a legal title is not called upon to take action against a hostile claim which is not of a nature to ripen into a valid adverse title. An outstanding adverse claim, which amounts only to a cloud upon a title, and which is not of such a nature as to give the adverse claimant a prescriptive title, is a continuing cause

The respondents who are claimants of portions of the real property through Hatton and Plato, or their successors, contend that on its face the complaint shows that the plaintiffs have been guilty of laches, and that the allegations relating to the disclosure of the fraud practiced upon plaintiffs are insufficient to explain why an earlier discovery was not made. It is also the contention of these respondents that the complaint does not show that the appellants did not have actual knowledge of the fraud from some source other than from the lips of the life tenant. Eespondents have advanced a formidable array of authorities which hold that whether or not there has been a discovery of the facts constituting a fraud, within the meaning of the statute of limitations, is a question of law to be determined from the facts pleaded, and it is not sufficient to aver a mere conclusion of discovery of the fraud, nor to aver ignorance of the facts at the time of their occurrence and lack of information thereof until within a period within which the statute of limitations might run against the bringing of the action. The general rule undoubtedly is that a plaintiff who is seeking redress upon the ground of fraud, and who is endeavoring to avoid the bar of the statute of limitations, must show that the acts of fraud were committed under such circumstances that they were not presumptively within his knowledge. He must also show the times and the circumstances under which they were brought to his knowledge, so that the court may determine whether or not the discovery was within the time alleged. (Lady Washington etc. Co. v. Wood, 113 Cal. 482 [ 45 Pac. 809 ]; Wood v. Carpenter, 101 U. S. 135 [ 25 L. Ed. 807 , see, also, Rose’s U. S. Notes].) These cases, and many others cited by respondents, relate to actions for relief on the ground of fraud, which must be brought within three years, and in which cases the cause of action is not deemed to have accrued until the discovery by the aggrieved party of the facts constituting the fraud. (Code Civ. Proc., sec. 338,

Whether or not the plaintiffs have been guilty of laches will have to be determined by the evidence adduced at the trial. Each case where laches is depended upon must rest upon its own facts. It is difficult to state as a general proposition what period will bar relief from consequences of fraud, and there is wide scope for the exercise of the discretion of the chancellor. (Dufour v. Weissberger, 172 Cal. 223 , 225 [ 155 Pac. 984 ]; 10 Cal. Jur., p. 526, par 64.) [11] Where an express statute of limitations applies to a suit in equity, mere delay to commence a suit for a period less than that of the statute of limitations is never a reason for dismissing the proceeding, and a party cannot be refused a hearing if he shall bring his action within the prescribed period. (Lux v. Haggin, 69 Cal. 255 , 267 [ 4 Pac. 919 , 10

The complaint states a cause of action against those respondents, the property owners, who took title to any part

Thus far we have been considering the nature of the action stated in its relation to the real property. "While the primary purpose of the action is to have it declared that the plaintiffs are the owners of a remainder interest in the land, incidentally thereto they are seeking to ascertain what has become of the money derived from the sale of the land by Plato and Hatton. As well expressed by appellants, the accounting is for the purpose of ascertaining what property has taken the place of the real estate which has been transferred, and to have plaintiffs’ rights, as owners of the estate in remainder in this property, declared. They are asking no relief, as against the defendants Hatton and the nephew and nieces of Plato, except the right to a judgment declaring that the money so received by this group of defendants has taken the place of the real estate, and to have it declared that plaintiffs are entitled to the possession of this personal property, the money, upon the death of the life tenant.

[13] It is contended by the nephew and nieces of Gabriel D. Plato, who are respondents here, that no cause of action is stated against them. The allegations of the complaint, in substance, are that after obtaining the judgment in the quiet title suit, Plato sold the land, for which Hatton and he received large sums of money. There is the allegation that Plato, at and before his death, made large gifts and

Plaintiffs at this time seek an accounting of these moneys, coupled with a prayer for equitable relief. There is no allegation that the proceeds of the sale - of the land can be traced to any specific property or fund held by Plato at the time of his death, or distributed in the matter of his estate. Instead, there is the allegation that the plaintiffs do not know, and therefore cannot allege, the exact amounts of money given by Plato to his nephew and nieces during his lifetime, or received by them on distribution of his estate. The Plato heirs contend that it being impossible for the plaintiffs to “earmark” the proceeds of the sales of the realty their only remedy was to proceed against his estate in an action for debt, a claim for which must have been presented against his administrator within the time fixed by law. (Lathrop v. Bampton, 31 Cal. 17 , 23 [ 89 Am. Dec. 141 ]; Orcutt v. Gould, 117 Cal. 315 [ 49 Pac. 188 ].) There being no allegation that any claim was so presented, respondents assert no cause of action has been pleaded. [14] It is well settled, however, that one who claims as his own, adversely to an estate, specific property held and claimed by an estate, cannot be called a creditor of the estate within the meaning of the probate law, and is not required to present a claim. (Estate of Dutard, 147 Cal. 253 , 256 [ 81 Pac. 519 ].) Therefore, unless it can be said that the complaint" here shows on its face that the identical trust property, or its product in a new form, cannot be traced by the plaintiffs, the contention of the respondents must fail. [15] When the money or property of the trustor can be traced into a particular fund or deposit, where it remains, though mingled with other money, the beneficiary may seek to follow the specific personal property and enforce the trust. Though the identical pieces of coin cannot be ascertained, yet if there is so much belonging to the trust in a general

The allegations here amount to an averment that the actual money received by Plato from the sales of the real property was turned over to his nephew and nieces. To allege more would be stating the evidence. It only remains for the court to “ ‘ disentangle the account, and separate the trust from the private moneys,’ ” if any there were. (Elizalde v. Elizalde, supra.)

[16] The Plato heirs paid no consideration for the money received from Plato. They were volunteers, considered either as donees, or distributees from the estate, and as such are not protected against the claims of the true owners of the fund. As to them, if the allegations of the complaint be true, the plaintiffs are not estopped from following their property. We see no material distinction in the relations of the Plato heirs and of the defendants Hatton to the case. The allegation of the complaint is that throughout all the proceedings relating to the property and the sales Plato acted in pursuance to the direction of Hatton, and in aid and consummation of the scheme devised by Hatton. He had no right or title to the land except as he derived it through the tax sale and the subsequent judgment. As to such defendants, therefore, a cause of action is stated. As against them, the plaintiffs are not asking for the possession of the money. It was conceded by them at the last argument that as remaindermen they are not entitled to possession of the personal property at this time any more than of the real property. They are seeking, however, a determination that they are the owners of an interest in the fund which they will have a right to claim at the termination of the life estate. In addition to the prayer for an accounting, plaintiffs ask for equitable relief. The form of such, equitable relief in relation to the money, if plaintiffs succeed in establishing their interest, must be determined by the chancellor.

[17] It was contended as to some one or other of the different groups of respondents that the appellants had no foundation for their claim to an interest in the lands in question, for the reason that the decree of distribution in the matter of the estate of their grandfather, Charles I.

[18] Another objection, raised by the demurrer of the respondents known as the Plato heirs, is that as to them there has been a misjoinder of causes of action. They assert that five separate and distinct causes of action have been improperly united in the complaint, and have not been separately stated. These are, they say: (1) An action to quiet title to, or recover yeal property against, the defendants claiming under Plato; (2‘) an action to quiet title to real property against parties other than those deriving title through Plato, and based on the alleged insufficiency of the description in the tax redemption proceedings, and carried into the judgment in the action by Plato to quiet title; (3) an action to quiet title to personalty against the Plato heirs as donees of Plato; (4) an action to quiet title to personalty against the Plato heirs as devisees of Plato; (5) an action against the defendants Hatton to quiet title to personalty. These various sets of defendants, respondents argue, have no united interest in the subject matter of the litigation. Respondents also say: “If it be conceded the first cause of action was to recover realty or to quiet title, and the second cause of action was against us to enforce a trust, there, again, we find under the settled law of this state that such cannot be done,” citing Reynolds v. Lincoln, 71 Cal. 183 , 188 [ 9 Pac. 176 , 12 Pac. 449 ],

The objection that several causes of action have been improperly united is not well taken. Appellants concede that they are not now entitled to possession of either the real property or any money derived from the sales. They also concede that they cannot eventually recover both the real property and the money. Their immediate concern is that their remainder interest in the corpus of the estate be preserved. The present action is one in the nature of a bill qxiia timet; that is, it is one in the nature of a writ of prevention, and is entertained as a measure of precautionary justice and to forestall wrongs or anticipated mischief. (Bailey v. Briggs, 56 N. Y. 407 , 415; 21 Cor. Jur., p. 130,

Appellants’ complaint is similar to a bill quia timet. (See notes to Whitehouse v. Jones, 12 L. R. A. (N. S.) 49 , 53, and 72.) Section 738 of the Code of Civil Procedure provides that “an action may be brought by any person against another who claims an estate or interest in real or personal property, adverse to him, for the purpose of determining such adverse claim. ...” Any appropriate remedies required upon equitable considerations and justified by the pleadings and proof may be had in such a case. (De Leonis v. Hammel, 1 Cal. App. 390 , 394 [ 82 Pac. 349 ].) The action is one in equity, and legal and equitable remedies may be sought in the same case where they relate to the same subject matter. [20] It is the policy of the law to allow a party to obtain in one action all the relief to which he may be entitled on account of a single transaction, although such relief may be of a character that would require several suits under the strict rules relating to the forms of common-law actions prior to the adoption of the codes. (Murphy v. Crowley, 140 Cal. 141 , 145 [ 73 Pac. 820 ]; see, also, Wilson v. Castro, 31 Cal. 420 , 431; Bonifacio v. Stuart, 52 Cal. App. 487 , 489 [ 199 Pac. 69 ].) In this action the right to the accounting and any rights appellants may be found to have in the proceeds of the sales depend upon the determination of the main issue. If appellants fail there, their whole cause fails for want of a foundation. [21] The case seems to present, therefore, a proper situation for the application of the rule that where equity has acquired jurisdiction for one purpose it will retain that jurisdiction to the final adjustment of all differences between the parties arising from the cause of action presented. It is, indeed, the duty of a court of equity, when all the parties to the controversy

[22] For like reasons, we are of opinion that the failure of the plaintiffs to separately state differing causes of action arising out of the fraudulent transaction here complained of was not ground for sustaining the demurrers without leave to amend.

The statute of limitations has been invoked by the respondents interested in the proceeds of the sales made by Plato. They cite and rely on Brazil v. Silva, 181 Cal. 490 [ 185 Pac. 174 , 178], where it was said (page 499), referring to an action in which both realty and personalty were involved: “While the action could be brought within the period permitted for actions on the ground of fraud, it could also be brought as to the personalty involved within the period permitted for actions to recover personalty, and as to the realty involved within the period permitted for actions to recover realty.” As the action was brought within both the latter periods, the court held that no statute of limitations had run against it. All that Brazil v. Silva decided on the point we are now considering was that under any of the sections of the' statute of limitations which might be applied to it, the action was brought within time. The language we have quoted was used by Mr. Justice Olney in explanation of the conclusion he was about to announce. But neither the language of the court nor the decision on the facts support the contention of the respondents that plaintiffs’ cause of action against the holders of the sales money is barred by a three-year limitation under subdivision 4 of section 338 of the Code of Civil Procedure. [23] For the same reasons that the statute of limitations has not run against the paramount title of the remaindermen as to the realty, and will not begin to run until the termination of the life estate, so it has not run, and will not bar the action to determine conflicting priorities to the money. The life tenant in this case may be barred, but the remaindermen are not.

[24] The gist of the argument of appellants is that if there is a conveyance of part of a tract such part must be so distinguished that it may definitely be ascertained and identified, and, when a deed calls for but a part of a large tract of land, and there is no identification of the part intended to be conveyed by measurement or quantity, and nothing further in the deed by which the part may be

The parties here on appeal are numerous. Many briefs and petitions have been filed, and the ease has been several times argued. The different questions involved have been discussed by the various parties, sometimes from the same, and sometimes from different points of view. If it should seem to appear, from any language used in the opinion, that we have discussed certain points in the light of the contentions made by one or the other of the parties, let it be known that we have attempted to consider the matter as nearly as possible, and as far as we have been able to gather from the briefs and arguments, in the light of the contentions of all the parties. What we have said, we think, disposes of the meritorious contentions presented by the appeal.

Certain of the respondents urge the point that appellants are in no position to complain that the trial court abused its discretion in sustaining the demurrers without leave to amend, for the reason that it appears from the record that they were content to stand on the allegations of the com

The judgment is reversed and the cause is remanded to the trial court, with directions to enter an order overruling the demurrers of the various defendants.

Lawlor, J., Lennon, J., Richards, J., Shenk, J., Seawell, J., and Myers, C. J., concurred.

Rehearing denied.

All the Justices concurred.