Scott v. Sierra Lumber Co.

7 P. 131, 67 Cal. 71, 1885 Cal. LEXIS 548
California Supreme Court·Decided May 25, 1885·No. No. 8775·Published·Cited by 11 cases

Opinion

McKinstry, J.

The power contained in the deed of trust recited in the complaint and findings, empowered the trustees in case of certain default, to sell at public auction for “gold coin ” or cash. The court below found that the trustees offered the real and personal property (except two lots in Red Bluff) for sale, “ and struck off the same to the plaintiff, who, at their request and for them, bid the sum of f50,000, upon the distinct understanding that he was not to pay any money, or take or have [73] any interest in the property, otherwise than in trust for them.” It is said by appellant there was no evidence to sustain the foregoing finding. But there was evidence that the plaintiff bid off the property at the request of the trustees, with the understanding that he should pay nothing, and that in fact he paid nothing. It is suggested the pretended purchase was not made “for” the trustees but for the creditors. There was evidence tending to prove that some of the creditors assented to a proposition that a sale should take place and that the nominal purchaser should hold the legal title in trust for them and other creditors. Even if it should be conceded that the trust could be thus diverted, there was no evidence that all or a majority in number or amount of the creditors agreed orally or otherwise to such an arrangement. There can be little doubt that a pretended purchase made at the request of the trustees and with the understanding that the title so acquired should be subject to their direction, was made for the trustees. There was evidence to uphold this view of the facts.

The defendant in its answer averred that the purchase was made in the name of the plaintiff, but to and for the use of Kraft, one of the trustees, and the court found that it was without con-' sideration and for all the trustees. ■ The finding, although somewhat broader in terms, is no broader in legal effect than the allegation of the answer. It would seem to be unnecessary to argue that a power to sell at auction for cash, did not authorize the trustees to convey the legal title to a third person without consideration. It is said, however, that the creditors only could complain of the manner of the sale. But the instrument of trust provides that, after payment of the debts due to the creditors and certain expenses, the balance or surplus of the proceeds of the sale for cash “shall be paid to the parties of the first part, their heirs or assigns.” Thus Campbell & Wei ton and their assigns were interested in the due execution of the power of sale, not only as grantors of the legal estate and donors of the special power, but also as contingent beneficiaries. Neither Campbell nor Wei ton, nor any of their assigns, agreed to surrender their interest in the estate or its proceeds, and to receive therefor a claim against the trustees as such, or in their individual capacities; if, indeed, the transaction with respect to the sale can be held to have been intended to create such liability.

[74] It is said the deed from the trustees conveyed the legal title on which plaintiff can recover the possession at law, and we are asked to treat the present as an action at law, combining the actions known among us as “ejectment” and “claim and delivery” of personal property.

The court below found that the trustees never received possession of any of the real or personal property described in the complaint, but that Campbell & Welton delivered possession of all the property to the Sierra Flume and Lumber Company, to whom the same was sold for a valuable consideration, $275,000. An allegation of the complaint is:' “Campbell & Welton sold all the property (excepting lots 13 and 14, in block No. 13, in the town of Led Bluff), to the Sierra Flume and Lumber Company .... for the price of $275,000, out of which said Sierra Flume and Lumber Company retained the amount of said promissory note,” etc. This is a very clear admission and statement that the Sierra Flume and Lumber Company were purchasers for value. There is no finding that the Sierra Flume and Lumber Company, or the trustees in bankruptcy, or defendant, had actual notice of the transfer of the personal property to the trustees. The record of the deed of trust operated no construct-, ive notice of the transfer of personal property.

It may be conceded that the general power of the trustees to sell and convey was co-extensive with their legal ownership, and that such power was entirely distinct from the special power to sell contained in the deed, and as a consequence, that the deed to plaintiff passed the naked legal title’ to the lands therein decribed.

There can be no doubt, however, that if plaintiff had commenced an action of ejectment the defendant could have filed a cross-complaint praying that the sale and conveyance to plaintiff be set aside.

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Scott v. Sierra Lumber Co., 7 P. 131, 67 Cal. 71, 1885 Cal. LEXIS 548 (Cal. 1885).

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