Carkonen v. Alberts

Decision Date02 November 1938
Docket Number27115.
Citation83 P.2d 899,196 Wash. 575
PartiesCARKONEN v. ALBERTS et al.
CourtWashington Supreme Court

Department 2.

Appeal from Superior Court, King County; Hugh C. Todd, Judge.

Action by James Carkonen against J. F. Alberts and others to establish a trust for the plaintiff in the proceeds of the sale of certain property. From a judgment for the defendants plaintiff appeals.

Affirmed.

Rummens & Griffin, of Seattle, for appellant.

M. M Pixley, of Seattle, for respondents.

MILLARD Justice.

Plaintiff verbally employed J. F. Alberts, one of the co-partners operating as real estate brokers under the firm name Alberts-Gingrich, to negotiate on behalf of plaintiff the purchase of certain real property in King county. Alberts purchased that property with his own money and subsequently sold same at a profit. This action was instituted to establish a trust for the plaintiff in the proceeds from the sale of the property. The appeal is from the judgment of dismissal rendered upon plaintiff's refusal to plead further after a demurrer had been sustained to the complaint on the ground that the alleged agreement not being in writing is not enforcible because of the Statute of Frauds.

The material allegations of the complaint admitted by the demurrer to be true are, briefly, as follows:

Alberts on behalf of his co-partnership, orally agreed with appellant to act as the agent of the latter in negotiating for appellant the purchase of certain real property in King county owned by one Eugina Angel--with whom none of the respondents was acquainted--for a commission to be paid by the appellant to the respondents in such sum as should be reasonable, which commission appellant agreed to pay upon the conclusion of the purchase. The parties orally agreed that Alberts would approach Angel and endeavor to purchase the property from him for appellant at a price of approximately five thousand dollars or such lesser sum at which the land might be purchased or at such sum in excess of five thousand dollars as appellant might authorize if that be the best price at which the land could be purchased. Appellant agreed to supply the money with which to pay the purchase price of the land upon the purchase being effected. Appellant took Alberts to the property, concerning which none of the respondents possessed any knowledge or knew that the same could be purchased, and the two made an investigation of the condition and situation of the land. Alberts entered into negotiations with Angel, to whom he did not disclose his agency for appellant, for the purchase of the property. Pursuant to an oral agreement with Alberts to accept three thousand dollars for the property and pay to Alberts a commission on such sale when effected, Angel conveyed the land to one Joseph Francis, who was in fact appellant's agent, J. F. Alberts. Thereafter, 'as a part and parcel of the same transaction,' Alberts under the name of 'Joseph Francis' conveyed the property to one Koch for a consideration of seven thousand dollars.

If a real estate broker, orally employed as an agent to negotiate for his principal the purchase of land, violates the principal's confidence and purchases the land with his own money and thereafter sells the land at a profit, may a trust be established for the principal's benefit in the proceeds received by such agent from his sale of the land?

That is the only question presented by this appeal.

In Farrell v. Mentzer, 102 Wash. 629, 174 P. 482, we reviewed our cases on the subject of trusts and restated the fundamental characteristics of the several varieties of trusts: Express trusts which are created by contract of the parties and intentionally. Implied or resulting and constructive trusts which are created by operation of law, where the acts of the parties have no intentional reference to the existence of any trust.

The trust which appellant seeks to establish must be an express trust, a resulting trust or a constructive trust. An express trust in real estate cannot be established by parol evidence. Zioncheck v. Nadeau, Wash., 81 P.2d 811. A resulting trust is a trust raised by implication of law and presumed to exist from the supposed intention of the parties and the nature of the transaction. If appellant had paid the consideration for the purchase and the title had been taken in the name of another, a presumptive or resulting trust would have been raised by implication or construction of law. That situation, however, is not presented by the admitted facts Before us. If, pursuant to an oral agreement, respondents purchased the land for appellant with funds supplied by appellant, or if, pursuant to an oral agreement, respondents advanced the purchase price as a loan to appellant to secure the payment of which respondents took legal title to the property in their name, in either case such purchase would give rise to a resulting trust. The authorities are uniform, however, that it is necessary in the creation of a resulting trust that the principal must have paid over his money at or Before the execution of the conveyance from the vendor to the agent, or that the principal incur, at that time, an absolute obligation to pay as part of the original consideration of the purchase. The trust can not be created by an advance of the purchase money after the purchase has been made by the other with his own funds or on his own credit. A resulting trust must grow out of the facts existing at the time of the conveyance and can not arise from a mere parol agreement that the purchase should be for the benefit of another. Hunt v. Friedman, 63 Cal. 510; Milner v. Standford, 102 Ala. 277, 14 So. 644.

Constructive trusts, which are also known as trusts ex maleficio or ex delicto, are those which arise purely by construction of equity and are entirely independent of any actual or presumed intention of the parties. Resulting and constructive trusts are clearly distinguishable. In the case of the former, there is always the element, although it is an implied one, of an intention to create a trust, by reason of which, although it is by no means an express trust it approaches more nearly thereto. In the definition of resulting and constructive trusts in 39 Cyc., p. 26 et seq., is the following language respecting constructive trusts: 'Constructive trusts on the other hand have none of the elements of an express trust, but arise entirely by operation of law without reference to any actual or supposed intention of creating a trust, and often directly contrary to such intention. They are entirely in invitum, and are forced upon the conscience of the trustee for the purpose of working out right and justice of frustrating fraud.'

Counsel for appellant contend that a trust ex maleficio arose by reason of the secret purchase and sale of the land by respondents while agents of appellant, as that constituted a violation of the relationship of trust and confidence created by the oral agreement between appellant and respondents. It is argued that respondents were not employed by appellant to purchase the land and give appellant the benefit of the purchase by conveying the land to appellant at the price at which the property was acquired, but that respondents were employed 'merely to act as agents for the appellant with Angel, the owner, to the end that appellant should become the purchaser direct from the owner, Angel.'

It is unlawful for any person to engage in the business or act in the capacity of a real estate broker within this state without first obtaining a license therefor. Rem.Rev.Stat. § 8340-5.

The statute (Laws 1925, Ex.Sess., Ch. 129, § 4, p. 219; Rem.Rev.Stat. § 8340-4) defines a real estate broker as follows: 'Within the meaning of this act, a real estate broker is a person who, for a compensation or promise thereof, performs one or more acts of selling or offering for sale, buying or offering to buy, negotiating or offering to negotiate, either directly or indirectly, whether as an employee of another or otherwise, the purchase, sale, exchange, lease or rental of real estate of interest therein for another person. The word 'person' as used in this act, shall be construed to mean and include a corporation, copartnership or unincorporated association. The provisions of this act shall not apply to any person who purchases property for his own use or account, nor to any person who, being the owner of property, sells, exchanges, leases, rents or otherwise disposes of the same for his own account, nor to any person holding a duly executed power of attorney from the owner granting power to consummate the sale, exchange, or leasing of real estate, nor to the services rendered by an attorney at law in the performance of his duties as such attorney at law, nor to any receiver, trustee in bankruptcy, executor, administrator or guardian, nor to any person acting under the order of any court, nor any person selling under a deed of trust.'

That is, excluding persons performing a specified type of service, a person who, for a compensation or promise of compensation, performs one or more acts of buying or offering to buy, negotiating or offering to negotiate, as an employee of another or otherwise, the purchase of real estate is a real estate broker. The restrictions and limitations upon the powers of the respondents--merely to act as agents for appellant in negotiating the purchase--do not, in view of the statute quoted, change the role or status of respondents as real estate brokers. We held in Grammer v. Skagit Valley Lumber Co., 162 Wash. 677, 299 P. 376, that an expert lumberman employed to obtain a buyer was, within the statutory definition, a real estate broker. That although he was not permitted, among other things, under his agreement to...

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  • Lane v. Department of Labor and Industries
    • United States
    • Washington Supreme Court
    • August 30, 1944
    ... ... State ex rel. George v. Seattle, 184 Wash. 560, 52 ... P.2d 360; Carkonen v. Alberts, 196 Wash. 575, 83 ... P.2d 899, 135 A.L.R. 209; Shelton Hotel Co., Inc., v ... Bates, 4 Wash.2d 498, 104 P.2d 478; Smith ... ...
  • Diel v. Beekman
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    ...the beneficial interest to the person in whom the legal title to the property is vested. (Footnote omitted.) See also Carkonen v. Alberts, 196 Wash. 575, 83 P.2d 899 (1938); In re Estate of Weir, 134 Wash. 560, 236 P. 285 (1925); Farrell v. Mentzer, supra; Gottstein v. Wist. 22 Wash. 581, 6......
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    ... ... Calvin [19 Wn.2d 815] Philips & ... Co., 195 Wash. 265, 80 P.2d 840; Ernst v. Kootros, ... 196 Wash. 138, 82 P.2d 126; Carkonen v. Alberts, 196 ... Wash. 575, 83 P.2d 899; City of Spokane v. State, ... 198 Wash. 682, 89 P.2d 826; Shelton Hotel Co. v ... ...
  • Harris v. Dunn
    • United States
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    • August 9, 1951
    ...in 42 A.L.R. 10; 54 A.L.R. 1195 and 135 A.L.R. 232. Counsel for defendants place great reliance on the case of Carkonen v. Alberts, 196 Wash. 575, 83 P.2d 899, 917, 135 A.L.R. 209. There, in construing a statute like ours, the court declined to hold an agent was a constructive trustee who p......
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