Hannah v. Canty

167 P. 373, 175 Cal. 763, 1917 Cal. LEXIS 757

• Court: California Supreme Court
• Decided: August 28, 1917
• Docket: Sac. No. 2330.
• Status: Published

Opinion

The purpose of this action was to declare a trust in certain lands in favor of plaintiff and incidentally that an accounting should be had between the parties to the action. The nature of the litigation is discussed in the opinion of the district court of appeal in Hannah v. Canty, 1 Cal.App. 225, [81 P. 1035], given upon the sustaining of the order of the lower court denying a motion for change of place of trial. At the trial plaintiff was successful, and defendants appeal from the judgment and from an order denying their motion to set aside and vacate said judgment.

The court found that in 1890 plaintiff and D.J. Canty entered into an agreement whereby Hannah undertook to find, examine, and select certain valuable timber lands and Canty promised to furnish the purchase price for such properties together with the necessary expenses of acquiring title to them; that there was also a mutual agreement that after deducting the purchase price, and amounts paid for expenses and for taxes on the land by Canty, together with interest at an agreed rate, the sums realized from the sales or issues of the property should be equally divided between the plaintiff and D.J. Canty; that in pursuance of this agreement Hannah bought certain valuable timber lands in Tulare County, D.J. Canty advancing the purchase price and necessary expenses; that title to this property was taken in the name of D.J. Canty; and that on January 2, 1892, D.J. Canty executed and delivered to plaintiff a certain instrument in writing which is set out in full in the findings. By this writing Canty acknowledged and declared that J.A. Hannah was entitled to one-half of the selling price, rents, issues, and profits of 701.12 acres of land in Tulare County, which is particularly described, after first deducting from said selling price, rents, issues, profits, and proceeds, together with interest at twelve per cent per annum, certain enumerated sums advanced at given dates and all taxes on said lands paid by Canty, with interest at the same rate. This instrument, as the court found, was never acknowledged so as to entitle it to be recorded. The writing, according to the findings, truly described the land purchased under the original agreement and correctly specified the sums furnished by Canty thereunder. The court also found as follows:

"That afterwards the said D.J. Canty executed a deed purporting to convey said lands to his brother, J.M. Canty, and thereafter the said J.M. Canty, by said D.J. Canty as his attorney in fact, executed a deed purporting to convey said lands to the defendant, Laura A. Canty.

"That whatever interest, if any, was acquired by said J.M. Canty, and said Laura A. Canty, or either of them, under the said deeds or either of them, was acquired without valuable consideration, and with full notice and knowledge of the said rights of plaintiff in the said lands."

There were further findings to the effect that the lands are of the value of twenty-five thousand dollars; that D.J. Canty pretends that said lands belong to his wife, defendant Laura A. Canty; that on September 26, 1902, said Laura A. Canty for the first time denied and repudiated the trust as to said lands existing in favor of plaintiff; that plaintiff had offered to pay into court one-half of all sums found due upon an accounting for advances and taxes with interest, under the terms of the agreement with D.J. Canty, upon the execution of a sufficient conveyance of an undivided one-half interest in the lands; and that plaintiff's cause of action is not barred by the provisions of subdivision 2 of section 336, nor by section 337, nor by subdivisions 1 or 4 of section 338, nor by subdivision 1 of section 339 of the Code of Civil Procedure. There were very elaborate findings to the effect that neither J.M. Canty nor Laura A. Canty had paid any consideration for the property; that neither had ever been in possession of it; that the taxes were paid by D.J. Canty during all the time the land was nominally owned by his brother J.M. Canty or his wife; that J.M. Canty had expressly disclaimed ownership; and that Laura A. Canty had never known of a purported conveyance to her until informed of it by H.T. Miller on September 26, 1902. Other findings relate to and declare untrue certain matters of defense set up by D.J. and Laura A. Canty.

Appellants first attack those findings to the effect that neither J.M. Canty nor Laura A. Canty ever acquired any interest in the land as a bona fide purchaser, and that each had full notice and knowledge of the rights of plaintiff in the said lands at the times of the purported conveyances to them respectively. These findings are attacked upon the ground that they are not supported by the evidence. While the testimony, as might be expected, was conflicting, we are of the opinion that these findings are amply supported.

There is no dispute regarding the fact that defendant executed a deed of the property to his brother and that this indenture was recorded about eight months after its purported execution; but plaintiff testified that after he learned of the recordation of the deed, he had a conversation with J.M. Canty in which the latter admitted that he had not bought the property. According to Mr. Hannah he said to J.M. Canty: "I see you have been buying some timber land." To this remark Mr. Canty replied, with a smile, "I have been buying nothing. Dan has played hell over there at Fresno, as usual, and had to put his property out of his hands. It stands as it always did and it is fixed just so Dan can do what he likes with it." On another occasion, as plaintiff testified, J.M. Canty said he had given D.J. Canty a power of attorney to do as he liked with the land; that he had not bought the property at all; but that D.J. Canty had simply put it in J.M. Canty's name to keep D.J. Canty's creditors from getting it. Plaintiff also stated under oath that many times prior to the date of the deed to J.M. Canty he had told the latter of his contract with D.J. Canty and their arrangements regarding the land. Before the time of the trial J.M. Canty had died. It is argued that plaintiff's statements regarding his conversations with a man long dead are entitled to small weight, but that giving them full value, they do not show mala fides on the part of J.M. Canty in taking the land. We do not indorse this view. If J.M. Canty made the statements attributed to him by plaintiff they showed his taking of the deed from his brother to have been a mere subterfuge. True it is that if the purported declarations of the grantee, given in evidence after his death, stood alone, they might be regarded as of slight probative force, but other facts given in evidence which were uncontradicted and unexplained by defendants tend to support Mr. Hannah's version of his conversation with J.M. Canty. The defendant, D.J. Canty, continued to pay the taxes on the land while it was standing of record in the name of his brother and was assessed to the latter. Such payments were made through the agency of plaintiff at the request of D.J. Canty, who furnished the money. According to Hannah's testimony, J.M. Canty told him early in 1895, that a power of attorney had been given D.J. Canty so that he could do as he liked with the land. The power of attorney under which D.J. Canty subsequently executed a deed from J.M. Canty to Laura A. Canty was acknowledged in 1898. Respondent's argument is this: While defendant could not contradict any testimony regarding J.M. Canty's declaration with reference to the earlier power of attorney, because of J.M. Canty's death, he could have denied the truth of the statement alleged to have been made by J.M. Canty if it were not true. This he failed to do. Another circumstance tending to support plaintiff's testimony is that after the deed from D.J. to J.M. Canty was executed, the former asked Hannah to find a purchaser for the land. This request, as Hannah testified, was made by a letter which he lost before the trial of the case took place. D.J. Canty did not explain the letter nor deny having written it. We have, therefore, in support of the finding against the good faith of J.M. Canty's apparent acquisition of the property Hannah's account of J.M. Canty's disclaimer of any real interest therein; the payment of taxes by D.J. Canty; and the interest which D.J. Canty took in the sale of the land evidenced by his request that Hannah attempt to dispose of it. Added to this is the fact that D J. Canty himself offered in evidence a letter written to J.M. Canty but given to D.J. Canty by his brother, in which a third party made inquiries looking to the renting of the property. Respondent's counsel ask with much force why this letter was turned over to D.J. Canty if he had ceased to be the owner of the land.

Another circumstance which tends to support both findings is found in the gross inadequacy of D.J. Canty's own account of the transfers of the title to his brother and from the latter to Laura A. Canty by a deed executed by her husband as his brother's attorney in fact. D.J. Canty said that his indebtedness to his brother was the consideration for the first deed, and that J.M. Canty's indebtedness to Laura A. Canty was the consideration for the second transfer, yet the testimony utterly fails to show that in either case any credit was given on such indebtedness by reason of the transfer, or that it was in any degree reduced by reason of the delivery of the deed. D.J Canty, as a witness, stated that his brother had given him a power of attorney so that he could sell or trade the timber land and with the proceeds or as a result of the trade get a home for his (D.J. Canty's) family. Yet D.J. Canty, as attorney in fact, deeded the property to his wife, for an expressed consideration of $2,103.00 which, according to his statement, was intended as a partial setoff for a larger amount — between three thousand dollars and four thousand dollars, owed Mrs. Canty by her brother-in-law. There is not one word of testimony to show that J.M. Canty knew of this transaction or authorized it, but there is evidence which tends to contradict D.J. Canty and to prove that Mrs. Canty knew nothing about the purported transfer of the property to her until long after it was made. Mr. H.T. Miller testified that in 1902 he went to see Mrs. Canty for the purpose of asking her to sign a certain document in acknowledgment of Mr. Hannah's interest in those lands, which in the interview were spoken of as "timber lands up on Tule River." She said: "Why, I don't own any timber lands on Tule River." However, she refused to sign the document, disclaiming any interest in the property. Mrs. Canty did not appear as a witness at the trial and Mr. Miller's testimony stands uncontradicted. The entire transaction was such that the court was fully justified under the evidence in making the two findings negativing the good faith of J.M. Canty and Laura A. Canty in the apparent acquisition of title to this land by them.

Appellants also object to the finding that Laura A. Canty first repudiated the trust on September 26, 1902. The testimony of Mr. Miller fixes that time as the date of her refusal to sign an acknowledgment of Hannah's interest. This was ample support for the finding.

This was an action "to be regarded as having for its sole object to establish a trust in the lands, and the accounting asked for, as merely incidental to the action" (Hannah v.Canty, 1 Cal.App. 227, [81 P. 1035]). Therefore, the only statute of limitations applicable to actions of this character is section 343 of the Code of Civil Procedure. This section was not pleaded. Therefore, the court was justified in finding that the cause of action was not barred.

The court found also that neither J.M. Canty nor Laura A. Canty was ever in actual possession and occupation of the land in controversy. This was properly responsive to the plea of adverse possession made by defendants but not supported by any offer of proof.

Another finding to which defendants object is one to the effect that plaintiff and D.J. Canty never agreed that the latter might sell the land at his option for such price or to such person as he might desire. This was in negation of certain of the allegations contained in the pleadings of the defendants. It is supported by the testimony appearing in the record.

The finding that the legal title to the land is held by defendants in trust is criticised as being in reality a conclusion of law. Even if this were conceded, we do not see that defendants or either of them would thereby suffer any harm. The finding, however, was one of ultimate fact. In various forms the contention is made that no suit may be maintained until the sale of the land by Canty, if indeed it be held in trust by defendants. In other words, it is argued that in any view of the case there can be no trust in the land itself in favor of plaintiff but only in the proceeds after the sale. This argument is completely answered by the opinions in the cases of Green v. Brooks, 81 Cal. 328, [22 P. 849], (cited with approval by the district court of appeal on the former appeal in this case), and Donohoe v. Rogers, 168 Cal. 700 -703, [144 P. 958].

Other findings are attacked in the brief of appellants, but all of the material matters urged in that behalf have been treated in the foregoing discussion.

Objection was made to the introduction in evidence of a document prepared for the signature of Mrs. Canty. This was the writing which she refused to sign, reference to which has been made heretofore in this opinion. The bases of the objections were that the writing was not binding upon defendants; that its introduction was an attempt to establish a trust by a document in the preparation of which defendants had no hand; and that it was a self-serving declaration of the plaintiff. This writing was offered at the court's suggestion as a part of the testimony of Mr. Miller. Its contents, of course, could not bind Mrs. Canty. It was merely a part of the declaration to her by Mr. Miller which elicited the reply that she had no knowledge of any deed executed by her husband as his brother's attorney in fact purporting to vest title to the timber lands in her. As a part of the conversation it was admissible. It merely showed, in connection with the rest of Mr. Miller's testimony, the nature of the demand made upon Mrs. Canty.

Defendants sought to introduce a quitclaim deed from J.M. Canty to Laura A. Canty for the declared purpose of showing a confirmation of the earlier deed purporting to have been made by him through his attorney in fact. The court admitted the instrument in evidence, but excluded numerous declarations in the deed regarding the source of the money with which the land was originally purchased, the alleged indebtedness of J.M. Canty to his sister-in-law, and other things which defendants vainly endeavored to prove to the court's satisfaction in the trial of the case. The ruling excluding these declarations is assigned as error. The deed containing these recitals was dated and acknowledged April 4, 1903, nearly six months after the commencement of this action. They were not admissible as declarations against interest or otherwise. J.M. Canty admittedly had no interest in the property when they were made. The statements sought to be introduced were not against but in favor of the title of his successors. Moreover, they were not the best evidence of the purported facts recited by them, and they amounted, at best, to unsworn declarations of one not a witness. Such recitals were very properly excluded.

No other alleged errors merit analysis, discussion, or comment.

The judgment and order are affirmed.

Henshaw, J., Shaw, J., Sloss, J., and Angellotti, C. J., concurred.