Goldschmidt v. Maier

73 P. 984, 7 Cal. Unrep. 162, 1903 Cal. LEXIS 952
California Supreme Court·Decided September 14, 1903·No. L. A. No. 1050·Published·Cited by 3 cases

Opinion

PER CURIAM.

The plaintiff appeals from the judgment and from an order denying a new trial. In May, 1897, Mclnnis Bros, were the owners of a liquor saloon conducted in a leased' building in Los Angeles, and, as found by the court, were then indebted to the copartners of Goldschmidt Bros, in the sum of $1,115.36, and to said corporation in the sum of $1,500; that said Mclnnis Bros., for the purpose of paying said indebtedness, proposed to said Goldschmidt Bros, and the defendants that they would transfer to them [164] all their interest in said property and business; said creditors, Goldschmidt Bros, and the defendants, should take possession, and either sell the same or do the best they could therewith, in order to pay said debt; that, if any balance remained after, paying said debts and the expense of carrying on the business to the time of sale, it should be paid to Mclnnis Bros., but, if less was realized, the proceeds should be divided pro rata between Goldschmidt Bros, and said corporation in proportion to the amount of said indebtedness ; that both of said parties consented thereto, but said proposal was not then carried out, but Mclnnis Bros, remained in possession about ten days, carrying on said business on their own account, and then delivered possession to said corporation defendant, which accepted the same as trustee for Goldschmidt Bros, and itself to sell said property, and apply the proceeds to the payment of the said respective claims, and neither the plaintiff nor Goldschmidt Bros., whose claims were assigned to plaintiff, obtained or had possession of said property at any time. Defendant Maier'was the lessee of the building in which said saloon business was conducted, Mclnnis Bros, paying the lessor the rent. No sale of the property and business was made until April 1, 1899, when it was sold for $1,775-, which was insufficient to reimburse said corporation for the expenses -of carrying on the business and to pay any part of plaintiff’s claim. On May 11, 1897, plaintiff’s assignors gave notice to the corporation that it held said property as trustee for the purposes hereinbefore stated, and demanded that they be consulted as to the management of the property; that the corporation refused to do so, and that neither plaintiff nor his assignors produced any purchaser or claimed an accounting, or made any application to have said corporation declared a trustee, or to be recognized as cotrustees; that the value of said property and business, exclusive of the lease, did not, with the goodwill, exceed $500; and as to plaintiff’s allegation that defendants took exclusive possession, and converted said property to their own use,, the court found that neither of the defendants converted any part of the property; and as a conclusion of law the court found that plaintiff could not maintain this action for the alleged conversion, and is not entitled to judgment against the defendants, or either of them, but that said conclusion is [165] without prejudice to the right of plaintiff to maintain an action for an accounting, and that this action be dismissed, and entered judgment accordingly. Plaintiff moved for a new trial upon a statement of the case, and his motion was denied, and on appeal specifies several errors of law in ruling upon evidence, a failure to find upon certain issues, and also that the evidence is insufficient to justify certain findings.

We do not think it necessary to consider in detail the sufficiency of the evidence to justify the findings specified by appellant. As to each of them there was a material conflict in the evidence. Nor is it contended that the findings are not sufficient to support the judgment, though it is argued that a different judgment might and should have been rendered upon the same facts. It is said that the plaintiff had two remedies for the wrongful acts of the defendants—that they could have brought an action for an accounting, or an action for damages for the wrongful acts of the defendants; that, as defendants refused to manage the property according to the terms of the trust, plaintiff had the right to treat the acts of the defendant as a tort, and recover damages therefor. But appellant further says: “The Goldschmidts occupied a double relation to defendants ; that both they and defendants were trustees and beneficiaries for themselves and each other.” The possession of one trustee, however, is - the possession of all, and each is entitled to the possession to the same extent, and the character of the possession of each is like that of copartners, joint tenants, or tenants in common: See Balch v. Jones, 61 Cal. 234. Prior to the sale made by defendants, neither the plaintiff nor his assignors could have maintained an action in claim and delivery to recover possession of the trust property, or any part of it, from their cotrustee; and, as the trustees were authorized to sell the property, a sale by defendants was not a conversion. Appellant’s contention that the evidence was sufficient to maintain an action in trover cannot be sustained. If any additional reasons for our conclusion were required, it may be added that, the property delivered by Mclnnis Bros, in trust included the business of said firm conducted in a building occupied under a lease which included certain personal property of the lessor, and a leasehold of real estate is not the subject of an action [166] of trover. As beneficiaries under a trust authorizing a sale, the Goldschmidt Bros, could not maintain an action in trover for damages. It is true a trustee may not use the influence or power which his position gives him to obtain any advantage over his beneficiary, and section 2234 of the Civil Code provides, “Every violation of the preceding provisions of this article is a fraud against the beneficiary of the trust,” and fraud in the administration of a trust is peculiarly cognizable in equity.

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Goldschmidt v. Maier, 73 P. 984, 7 Cal. Unrep. 162, 1903 Cal. LEXIS 952 (Cal. 1903).

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