Barnes v. Spencer

• Decision Date: 23 November 1915
• Parties: BARNES v. SPENCER ET AL.
• Court: Oregon Supreme Court

153 P. 47

79 Or. 205

BARNES v. SPENCER ET AL.

Supreme Court of Oregon

November 23, 1915

In Banc.

Appeal from Circuit Court, Marion County; Wm. Galloway, Judge.

Action by Grace D. Barnes against A. B. Spencer and others. From a judgment for plaintiff, defendant A. B. Spencer and another appeal. Modified and affirmed.

This is a suit brought by the plaintiff, Grace D. Barnes, to impress a resulting trust in her favor upon the lands described in the complaint, as the equitable owner thereof, as against defendant L. S. Barnes, who holds the legal title thereto and defendant A. B. Spencer, who has a money judgment against him, and to enjoin the defendant Esch, sheriff of Marion county, from selling the same upon an execution issued on Spencer's judgment. From a decree in favor of plaintiff as prayed for in her complaint, defendants William Esch and A. B. Spencer appeal. Defendant L. S. Barnes never appeared in the case to controvert the complaint.

In her complaint plaintiff alleges, in substance, that in the autumn of 1909, she furnished her husband the sum of $26,750, in cash, for the purpose of buying real property in Marion county, fully described in her complaint, the title to which was to be taken in her name; that with this money he bought the realty in question, and by mistake the legal title was taken in his name, and still remains so, except a portion thereof, described, situate on East State street in the city of Salem, being the residence and homestead of the plaintiff and defendant L. S. Barnes, a part of which was conveyed to them jointly as tenants by entirety. Plaintiff alleges the rendition of a judgment on February 24, 1913, for $69,399 with interest at 6 per cent. per annum and $29.50 costs, in an action wherein defendant A. B. Spencer was plaintiff and defendant L. S. Barnes, defendant; and the levy of the execution upon the property in question by the defendant sheriff. See Spencer v. Barnes, 65 Or. 231, 132 P 707, Ann. Cas. 1915A, 1287. It is then averred:

"That the said judgment so rendered in this court is based and founded upon a pretended judgment recovered by the said defendant Spencer against the said defendant Barnes in the superior court in and for the county of Los Angeles, in the state of California."

The complaint shows that the California judgment has been appealed from, but that the appeal had not then been determined. The defendants William Esch and A. B. Spencer answered jointly, denying that plaintiff furnished to her husband any of the money with which the property in question was purchased, and denying her alleged equity therein. Affirmatively they assert that the consideration of the Spencer judgment is his interest in a partnership transaction between him and L. S. Barnes in the sale of certain iron mining claims in the state of California. They aver "that in the sale of said mining claims said partnership made a net profit amounting to $138,650, all of which the defendant Legene S. Barnes received and converted to his own use," that the property in question was bought with funds belonging to that partnership, and that plaintiff is not the owner of any equity therein, nor has she any inchoate right of dower as the wife of L. S. Barnes. The defendants further allege that when the Spencer execution was levied on the lands described in the complaint, he had neither knowledge nor notice of plaintiff's alleged equity therein, and that he thereby acquired a valid lien thereon in good faith as a bona fide purchaser. The affirmative matter of the answer is denied in the reply. Plaintiff avers therein that Spencer and Barnes were never partners; that the former contributed nothing to the sale of any mining claims in California or elsewhere; that his pretended claim was fraudulent and without consideration; and that his judgment was obtained by fraud on his part and procured by false testimony.

In the California action of Spencer v. Barnes, the plaintiff therein alleged that he and defendant Barnes had procured the sale of certain mining claims, and thereby a large amount of money as commission, which belonged to them in equal shares. The testimony of Barnes was taken by deposition, and about three weeks afterwards he went to New York City. During his absence the action was called for trial and tried. Spencer was permitted to amend his complaint so as to claim a general partnership with the defendant Barnes, and in effect abandoned his original claim. The cause was tried in the absence of Barnes, and by changing Spencer's contention the former did not have the benefit of his own testimony upon the new issues which were formed by the amendments made by the latter at the trial. In the original complaint Spencer claimed an interest in the commission upon the sale of mining claims when in fact none whatever was earned in the sale thereof; and by the amendments Spencer was permitted to claim an interest in other transactions, concerning which Barnes was not given an opportunity to testify.

The first parcel of land described in the complaint is designated in the evidence as the Salem Hotel property, situate on the corner of High and State streets, the second as the Burrows the third as the Hofer, and the fourth as the Barber property.

In regard to plaintiff's right to the realty in controversy her claim is about as follows: She and Mr. Barnes were married at Raton, N. M., January 2, 1902. At that time she had about $25,000. After they were married they went to Missoula, Mont., where they purchased a home with her money, taking title in her name. This was afterwards sold, and they bought land at Trout Creek, in the same state, title to a part of which was also taken in her name. A large portion of this was disposed of at a profit, and the proceeds invested in Long Beach, Cal., where they bought and sold different tracts of land, the largest deal being the purchase of a ranch for $56,000, using her money, which they sold for $71,600. She purchased and took title to a home at Long Beach, and also one at Los Angeles, when they moved there in 1908. This latter home was sold and another one bought in her name. The one she sold was not paid for, and she took it back, so that at the time of the purchase of the Salem realty she had two properties in Los Angeles. In the summer of 1909 they sold rooming and lodging houses for $17,500, and also other property, and $20,000 was returned to her and deposited to her credit August 10, 1909, in the Citizens' National Bank of Los Angeles. On August 12th a further deposit of $276.50 was made to her credit. Her husband transacted all the business for her. In August, 1909, Barnes went to Denver, Colo., and she came to Salem, where she learned that the Salem Hotel was for sale. Her husband joined her in September, and she requested him to buy the property with her money. On September 24, 1909, he drew a check on the Citizens' National Bank account, signed Grace D. Barnes, by L. S. Barnes, for $2,000 in favor of Derby & Wilson, real estate agents, as an initial payment for the hotel property purchased of Mr. Joseph Meyers. On the same date a check was1 drawn and signed in the same manner in favor of the Capital National Bank of Salem for $17,000, for the payment of the balance on the purchase when the title should be approved. Mr. Barnes directed the deed to be made to her. She mortgaged land which she owned in Los Angeles, for $5,000, with which the Hofer property was bought in May, 1912. The sum of $2,500, was borrowed of Ladd & Bush upon the note of L. S. Barnes, pledging as security her Masonic Temple bonds. With this the Barber property was purchased. After the purchase of the Meyers realty, she and her husband returned to California, and at a later date the transaction was completed and the deeds recorded. The error in making the deed to L. S. Barnes, instead of to her, was not discovered until some time later, when he promised to correct it by conveying the real estate to her, but he had not done so at the time this suit was commenced. It is shown that at the time Mr. and Mrs. Barnes were married she had a bank account of about $1,000, and considerable jewelry, diamonds, etc. Barnes does not appear to have had any property at that time.

As to the equities pertaining to defendant Spencer's judgment it is claimed on behalf of plaintiff that in June, 1907, L S. Barnes went to Tucson, Ariz., where Spencer resided, for the purpose of examining some copper mines, of which they took pictures. While they were in the photo gallery, one Parker, the photographer, showed them specimens of iron ore from Riverside county, Cal., and informed them that there were options upon the property running until September. A conversation was had between Spencer and Barnes in regard to co-operating in making a sale of mining property on equal shares. Spencer says he was to see about getting the mines in Arizona, furnish the necessary papers, descriptions, and prices, and forward them to Barnes, who would attend to the end in Los Angeles. The latter part of August Parker furnished Spencer the data concerning the iron claims, blueprints of the condition, description, and price of each, and the name of the owner, which Spencer forwarded to Barnes at Long Beach, who secured the options. In June, 1907, Barnes sent a form of option to Spencer for Parker's signature which Spencer was unable to secure. This option was sent within a short time after the first conversation. Barnes later got Parker's option. Spencer corresponded with Barnes until December, 1907. On August 19th of that year he wrote to Barnes, asking him to return the maps and papers which he had sent him, saying, "We will go out of the mining business." Barnes sent him all the maps, etc., that he had at the time. They did not see...