Quinn v. Phipps

• Decision Date: 21 April 1927
• Parties: QUINN et al. v. PHIPPS.
• Court: Florida Supreme Court

113 So. 419

93 Fla. 805

QUINN et al. v. PHIPPS.

Florida Supreme Court, Division B.

April 21, 1927

On Petitions for Rehearing and on Motion to Modify June 14 1927.

Suit by John S. Phipps against Porte F. Quinn and another to have an option on land decreed to be held in trust and for other relief, in which John C. Gregory intervened. From a decree for the complainant, defendants and the intervener appeal.

Affirmed.

Syllabus by the Court

SYLLABUS

'Fiduciary or confidential relation' is broad term, embracing technical fiduciary relations and informal relations wherever one man trusts in and relies on another. The term 'fiduciary or confidential relation' is a very broad one. It has been said that it exists, and that relief is granted, in all cases in which influence has been acquired and abused--in which confidence has been reposed and betrayed. The origin of the confidence is immaterial. The rule embraces both technical fiduciary relations and those informal relations which exist wherever one man trusts in and relies upon another. [Citing Words and Phrases, Second Series, Fiduciary Relation.]

Existence of relation of trust and confidence is sufficient predicate for relief for abuse thereof. If a relation of trust and confidence exists between the parties (that is to say, where confidence is reposed by one party and a trust accepted by the other, or where confidence has been acquired and abused) that is sufficient as a predicate for relief.

Principal in business transaction is bound by words and deeds, not by concealed purpose on which he afterwards acts to detriment of one to whom he owes loyalty and good faith. The principal to a business transaction is bound by his words and deeds rather than by a concealed purpose in his mind on which he subsequently chooses to act to the detriment of one to whom he owes loyalty and good faith.

Equity raises constructive trust and compels restoration where, by fraud, abusing confidence, or other questionable means, one gains something which in equity and good conscience he should not keep. Equity will raise a constructive trust and compel restoration, where one through actual fraud, abuse of confidence reposed and accepted, or through other questionable means gains something for himself which in equity and good conscience he should not be permitted to hold.

Before raising constructive trust in option to buy land establishing confidential relation held essential under circumstances; to establish constructive trust in option to buy land establishing confidential relationship of husband and wife parent and child, guardian and ward, attorney and client principal and agent, or partner and partner, held not essential under circumstances. Under such circumstances as are presented in this case it is essential that a confidential relation be established before a constructive trust will be raised; but it is not essential that such confidential relation be predicated on that of husband and wife, parent and child, guardian and ward, attorney and client, principal and agent, or partner and partner.

Resulting or constructive trust may be proved by parol evidence under statute of frauds (Rev. Gen. St. 1920, § 3791). Under the statute of frauds in our state (section 3791, Rev. Gen. Stats. of Fla. 1920) a resulting or constructive trust may be proven by parol evidence.

Real estate broker, purchasing land and taking deed to himself, is 'constructive trustee' for principal on paying purchase money. If a real estate broker as such be employed to negotiate the purchase of land for his principal, and violates the principal's confidence by purchasing the land with his own money and taking a deed therefor to himself, he becomes a constructive trustee for the principal's benefit, upon payment of the purchase price.

Constructive trust may be proved by parol testimony, but evidence must remove every reasonable doubt as to trust's existence. While a constructive trust may be proven by parol testimony, the evidence to establish such a trust must be so clear, strong, and unequivocal as to remove from the mind of the chancellor every reasonable doubt as to the existence of the trust.

Law prohibiting dual agency is predicated on fact that interests of principals are adverse; unless principal contracts for less, agent is bound to serve him with all his skill, judgment, and discretion. The rule of law prohibiting dual agency, while well settled, is predicated on the fact that the interests of the principals are adverse or in conflict. Unless the principal contracts for less, the agent is bound to serve him with all his skill, judgment, and discretion.

One undertaking to act for another in matter of trust or confidence may not act for himself against other's interest; agent employed to purchase, who purchases for himself, will be considered employer's trustee. He who undertakes to act for another in any matter of trust or confidence shall not in the same matter act for himself against the interest of one relying upon his integrity. So, if an agent employed to purchase for another purchases for himself, he will be considered as the trustee of his employer.

Every man to whom business is intrusted by another has trust to perform; every man is 'trustee' who is to advise concerning or to operate business of another; evidence of agent's contracting for purchase of land against interests of principal held to uphold decree establishing constructive trust in option to buy land. Every man to whom a business is intrusted by another has a trust to perform; and every man is a trustee who is to advise concerning or to operate the business of another.

Appeal from Circuit Court, Palm Beach County; C. E. Chillingworth, judge.

COUNSEL

E. J. L'Engle and J. W. Shands, both of Jacksonville, and M. D. Carmichael, Ernest Metcalf, and Kearley & Fisher, all of West Palm Beach, for appellants.

Fleming, Hamilton, Diver, Lichliter & Fleming, of Jacksonville, and Wideman & Wideman, of West Palm Beach, for appellee.

OPINION

TERRELL J.

This case is not without its difficulties. The essential facts on which it is grounded are as follows: Quinn, the appellant, was a real estate broker residing and doing business in Palm Beach county, Fla. Jennie E. Watson was a citizen of Boston, Mass., and owned certain lands in Palm Beach county, more specifically described in the bill of complaint. She corresponded with Quinn about the value and sale of these lands late in 1921 and early in 1922. About April 8, 1922, Quinn told J. B. McDonald, Phipps' agent, that he had a price on Mrs. Watson's lands in Palm Beach county, and asked him (McDonald) to assist him (Quinn) to secure a purchaser for them. With Quinn's knowledge and consent, McDonald conveyed this information to appellee, Phipps, who authorized McDonald to make Quinn a cash offer of $50,000 for the property. McDonald communicated the offer to Quinn, and on behalf of Phipps requested Quinn to convey the offer to, or negotiate the purchase from, Mrs. Watson. McDonald asked Quinn to communicate the offer to Mrs. Watson by long-distance telephone, which Quinn declined to do, but instead agreed to proceed at once to Boston and negotiate the sale on behalf of Phipps and to communicate the resulf of his negotiation to Phipps at his New York office. On his arrival in Boston, Quinn saw Mrs. Watson and learned that she would sell the porperty for $45,000. He said nothing about Phipps' offer, but procured an option agreement to buy the land from her in his own name, and then went to New York and told Phipps that 'he had tied up' the property, but was unable to get a definite proposition at that time on account of uncertainty in the acreage. On his return to West Palm Beach, Quinn told McDonald that he had tied up the property for himself. McDonald demanded an assignment of the option and offered to refund Quinn's expenses and the advance payment and to pay the purchase price when due. Quinn refused to assign or to accept anything at the hands of McDonald.

Predicated on there facts, Hohn S. Phipps,

Predicated on these facts, John S. Phipps, against Porte F. Quinn and Jennie E. Watson, praying that the option secured by Quinn from Mrs. Watson and the lands described therein be decreed to be held in trust by them for the sole benefit of the complainant; that Quinn be directed to convey his interest in the said lands then held or later accruing to him under the said option to Phipps upon being reimbursed for any payments made by him on the purchase price and for expenses; that Phipps be decreed to stand in the place of Quinn in the purchase from Mrs. Watson; and that Mrs. Watson be ordered to convey the lands to Phipps upon compliance by him with the terms of the option.

A demurrer to the bill of complaint was overruled, and defendants answered. John C. Gregory claimed half interest in the lands by virtue of a conveyance from Quinn dated August 2, 1922, long after this suit was filed, and on petition was allowed to intervene and file his answer. Quinn's answer denied all the material allegations of the bill. Testimony was taken by a special master, and on final hearing, August 6, 1924, decree was entered as prayed in Phipps' bill. This appeal was prosecuted by Quinn and Mrs. Watson and intervening defendant, Gregory, from the final decree.

The first assignment of error is predicated on the refusal of the chancellor to sustain the demurrer to the bill of complaint. The second assignment of error is predicated on the refusal of the chancellor to dismiss the bill on final hearing, and the third assignment of error alleges that the final decree is not supported by the allegations and theory of the bill of complaint. all three assignments will be treated together since the primary...