Cary v. Cary

• Decision Date: 06 July 1938
• Citation: 159 Or. 578,80 P.2d 886
• Parties: CARY ET AL. <I>v.</I> CARY
• Court: Oregon Supreme Court

159 Or. 578

80 P.2d 886

CARY ET AL.

v. CARY

Supreme Court of Oregon.

Argued March 9, 1938.

Affirmed July 6, 1938.

Rehearing denied September 7, 1938.

Trusts — Husband and wife

1. In wife's suit against husband to establish a trust and for an accounting and other relief, evidence was insufficient to establish liability of husband for funds belonging to wife's separate estate which were lost by husband in business transactions and which did not remain in his control, on ground that husband was guilty of misconduct or misappropriation or was wanting in diligence or capacity.

Trusts — Husband and wife

2. A husband who was a trustee for wife was not liable to wife for losses resulting from investment of wife's money where wife with full knowledge of facts and while sui juris gave her consent and approval to husband's acts.

Accounting — Trusts and trustees

3. Evidence held to justify decree requiring husband to account for property in his hands which had been part of wife's separate estate on ground that husband held property as trustee for wife and that property was not gift to husband from wife.

Trusts — Husband and wife

4. A husband who acquires possession of the separate property of his wife with or without her consent is deemed to hold such property in trust for his wife's benefit in the absence of any direct evidence that she intended to make gift of the property to him.

Husband and wife — Separate property

5. Apart from curtesy in wife's real estate, marriage did not give husband any right in wife's separate property.

Husband and wife — Trusts — Accounting

6. In wife's suit against husband to establish a trust in property in husband's possession which had belonged to wife's separate estate and for accounting, the husband had the burden to prove contention that property was gift from wife to him.

Husband and wife — Separate estate

7. Where husband assumed management of wife's separate estate without agreement for payment of compensation, wife was not obligated to pay husband for services which were voluntarily rendered.

Husband and wife — Duty to support

8. A husband's duty to provide his wife with support is measured with reference to his pecuniary ability and according to his station in life.

Husband and wife — Separate estate

9. Where a husband receives interest or income from wife's

separate property and spends it with her knowledge and without objection, a gift of such income will be presumed.

Husband and wife — Trusts — Accounting

10. In wife's suit against husband to establish a trust and for an accounting of separate property of wife in possession of husband, husband was not deprived of presumption of gift of income from wife's property received and spent by him where there was excess of family expenses over both husband's salary and income and husband was not required to account for income.

Trusts — Husband and wife

11. Where wife signed with husband notes from proceeds of which entire stock issue of corporation was purchased by husband and money was obtained on notes on strength of wife's credit or husband's possession and apparent ownership of wife's property which established his credit, wife was entitled to award of 14,900 of the 30,000 shares purchased by the husband, since by such distribution husband was given control of corporation and wife was given fair share in whatever might be left of enterprises which her resources made possible.

Trusts — Accounting

12. In wife's suit against husband to establish a trust and for an accounting of wife's separate property in possession of husband, the amount of an indebtedness shown on books kept by husband as owing by corporation to husband and wife for advances to the corporation was properly credited to wife where only place from which advances could have come was from common account of husband and wife.

Appeal and error — Judgment on appeal

13. In wife's suit against husband to establish trust and for an accounting of wife's separate property in possession of husband, a decree, making award to wife based on finding that her contribution to capital contribution was 84.85 per cent of the whole, was not required to be modified because of slight error in finding of amount of stock owned by husband in corporation in which husband and wife were jointly interested, where error would have but slight effect on final result.

Trusts — Husband and wife

14. Evidence held to justify decree dividing property in possession of husband between husband and wife on basis that wife had contributed 84.85 per cent of total capital contribution of which husband had contributed 15.15.

Limitation of actions — Husband and wife

15. The statute of limitations does not apply to a transaction between husband and wife notwithstanding repeal of statute suspending running of limitations in actions by married women for certain period during such disability, since doctrine that statute of limitations is inapplicable in such actions is founded on public policy independent of statutory provisions with regard to disabilities of coverture.

Courts — Statute of limitations

16. The decision of the supreme court that the statute of limitations does not apply where a transaction between a husband and wife is involved should not be disturbed since such decision has become a rule of property.

Husband and wife — Laches

17. The contention that the suit was barred by laches of the wife was not available to defeat wife's suit to establish trust and for an accounting of wife's separate property in possession of husband.

                  See 13 R.C.L. 1157
                  65 C.J. Trusts, § 701
                

Department 2.

Appeal from Circuit Court, Coos County.

JAMES T. BRAND, Judge.

Suit to establish a trust for an accounting and other relief by Mary E. Cary and Dennis McCarthy, as guardian ad litem for Mary E. Cary, against Leo J. Cary. From an adverse decree, the defendant appeals.

AFFIRMED. REHEARING DENIED.

L.A. Liljeqvist, of Marshfield (Swanton & McKeown, of Marshfield, on the brief), for appellant.

F.E. McCracken, of Coquille (Murphy & Skipworth, of Marshfield, on the brief), for respondents.

LUSK, J.

This is an appeal from a decree granting relief to plaintiffs in a suit to establish a trust, for an accounting, and other relief.

Mary Cary, the respondent, who will be referred to as the plaintiff, and the appellant, Leo. J. Cary, who will be referred to as the defendant, are husband and wife. They were married June 8, 1909, in the state of Michigan. Seven children were born to them, five of whom were alive at the time of the commencement of this suit on November 7, 1934. Two of the children at that time were minors.

The couple came to Oregon in 1911 and located in Coquille, in Coos county. On December 20, 1911, they opened a set of books, the first entry in which comprised an itemization of their resources and liabilities. This book showed "present worth" of Mr. and Mrs. Cary on that date in the sum of $29,312.19. Of that amount, cash and properties of the value of at least $25,942 were contributed by the plaintiff.

From that time until the commencement of this suit, Mr. Cary had possession and control of, and managed, invested, and re-invested the properties and monies of himself and his wife. Her contribution to their united capital greatly exceeded his in value, most of it being derived from the estate of her father, William Coach. Mr. Coach died in 1911 and in May, 1912, Mrs. Cary received as her share of his estate, property of the appraised value of $100,637.56, the major items of which were shares of stock in the Coach Timber Company, a corporation, an interest in unsecured notes of Cody Lumber Company, a corporation, and timberlands in Douglas and Lane counties, Oregon.

The business operations conducted by the defendant were in large part unsuccessful, and for that and other reasons the value of the property in his care had greatly diminished by the year 1934.

Mr. and Mrs. Cary lived in harmony until about the year 1929, when Mrs. Cary suffered an illness. This was the beginning of a mental disturbance which progressed to the point that insanity proceedings were commenced against her and while the instant case was pending she was adjudicated an insane person, suffering from paranoia. Because of that adjudication, Dennis McCarthy was appointed her guardian ad litem and made a party plaintiff herein.

The second amended complaint alleges in substance that the plaintiff's properties and funds and the increment therefrom which came into the defendant's possession were turned over to him to invest, care for, and manage on the plaintiff's behalf, and that the defendant is accountable to her for such funds and other properties as a trustee. The prayer of the complaint is that after an accounting is taken the defendant should be required to turn over to the plaintiff all funds and properties, both real and personal, received by him from the plaintiff, together with the proceeds of investments of funds or business transactions into which plaintiff's funds entered; that the defendant be required to convey to the plaintiff all real estate standing in his name and acquired from plaintiff with plaintiff's funds; and that judgment be given against the defendant for all funds of the plaintiff used or lost by the defendant for his purposes or in his own business transactions and not now in defendant's possession or under his control.

The defendant in his answer denied the existence of a trust and alleged that any funds or properties of his wife which came into his possession were given to him by her. He alleged further that he was entitled to be paid a salary of $500 per month for his services in managing his wife's property and business, and pleaded laches and the statute of limitations.

The case was heard before the Honorable James T. Brand, circuit judge, who appointed Mr. Keith Leslie, a certified public accountant, as referee to examine the accounts of the parties, take testimony,...