Chaves v. Myer

• Decision Date: 02 February 1906
• Citation: 13 N.M. 368,85 P. 233
• Parties: CHAVES et al.v.MYER et al.
• Court: New Mexico Supreme Court

13 N.M. 368

85 P. 233

CHAVES et al.

v.MYER et al.

Supreme Court of the Territory of New Mexico.

Feb. 2, 1906.

Syllabus by the Court.

The complaint examined, and held sufficient to allege that plaintiffs were the owners of the fund loaned by the defendant Myer to the defendants Lucero.

Questions not presented to the court below in the proper way, nor to this court by assignment of error, are not the subjects of review by this court.

[Ed. Note.-For cases in point, see vol. 3, Cent. Dig. Appeal and Error, §§ 2968-2982.]

The equitable remedy given a cestui que trust to follow trust funds into property, in which they may have been fraudulently invested by his trustee, is not taken away by statutory provisions affording a remedy by attachment or garnishment; but the legal and equitable remedies are to be considered concurrent.

Nor is such equitable remedy defeated by the fact that the cestui que trust might sue the trustee and his bondsmen and enforce his claim by levy; the rule being well settled that the defrauded party has his option either to hold the trustee personally liable, or to follow his money into the property in which it has been reinvested.

[Ed. Note.-For cases in point, see vol. 47, Cent. Dig. Trusts, § 516.]

Nor is the remedy of the defrauded cestui que trust to realize out of such property purchased with his funds affected by the fact that the agreement between the trustee and the owner of such property which led up to the diversion of such funds was an illegal one; the cestui que trust having been no party to such agreement.

Appeal from District Court, Bernalillo County; before Justice Benjamin S. Baker.

Action by Elias Chaves and Emilia Chaves de Armijo against Ben Myer and others. Judgment for plaintiffs, and defendants appeal. Affirmed.

Nor is such equitable remedy defeated by the fact that the cestui que trust might sue the trustee and his bondsmen and enforce his claim by levy, the rule being well settled that the defrauded party has his option either to hold the trustee personally reliable, or to follow his money into the property in which it has been invested.

William B. Childers, for appellants.

Summers Burkhart, for appellees.

POPE, J.

This is a suit brought by the appellees, Elias Chaves and wife, alleging in their complaint substantially as follows: That on November 17, 1902, plaintiffs recovered a judgment in the district court of Bernalillo county against the defendant Myer, individually and as administrator of the estate of Rafael Armijo, deceased, for the sum of $2,207.58, upon which judgment on November 28, 1902, execution was issued with return of nulla bona dated January 27, 1903. A certified copy of the judgment is attached to the complaint. The complaint, after alleging that the defendant Myer is insolvent, avers that the judgment was for the distributive share of the estate of the said Rafael Armijo to which plaintiffs are entitled. It is further alleged that on March 6, 1900, the defendants Maria A. de Lucero and J. Blas Lucero, her husband, executed and delivered to the defendant Myer a mortgage upon certain real estate in Bernalillo county, which mortgage was duly recorded March 7, 1900. A copy of the mortgage is attached to the complaint. An inspection of this shows that it runs to Myer personally, and upon the following conditions: “Whereas the said parties of the first part (Maria A. de Lucero and J. Blas Lucero) have received of the said party of the second part (B. Myer) two thousand and eight dollars, said sum having been paid to the said second party in his capacity of administrator de bonis non of the estate of Rafael Armijo, dec., to which said estate said sum of two thousand and eight dollars is belonging: Now, therefore, if within the time of limitation under the laws of the territory of New Mexico, regulating the administration of estates and the liability of administrators, no claim or demand shall be made against Ben Myer as administrator of said estate nor any proceedings be entered against him, then this indenture shall be null and void and of no effect, otherwise to remain in full force.” It is further alleged that at the time of the execution and delivery of this mortgage Myer, as administrator of the Armijo estate, had in his hands the sum of $2,008 which “in equity and good conscience belonged” to plaintiffs, and which they were entitled to receive from said defendant as their distributive share of said estate, which said Myer and said J. Blas Lucero well knew; but that the said J. Blas Lucero, contriving to defraud plaintiffs out of said sum of money, caused said mortgage to be executed and delivered to the said Myer to induce him, and did thereby induce him, to procure from the probate court of Bernalillo county an order authorizing him to pay over to the said J. Blas Lucero the said sum of $2,008, and to pay to him, the said Lucero, under said order the said sum of money. It is further alleged that, while by the terms of said mortgage it is conditioned as aforesaid, it was in truth and in fact executed for the purpose of securing the payment of any judgment which these plaintiffs might obtain against said Myer for the distributive share of said estate, and for no other purpose, except as above stated to induce Myer to turn over to said Lucero the above named sum in his hands as administrator and to enable the said Lucero to get possession of the same. It is further alleged that said order allowing the payment of said sum on said mortgage was obtained without notice to plaintiffs, although Myer and Lucero well knew that plaintiffs were claiming said sum, and that thereafter plaintiffs appealed from said order of the probate court to the district court, when said order was vacated and set aside and the judgment of November 17, 1902, above referred to, was entered. The complaint also alleges that plaintiffs have requested Myer to bring suit to foreclose said mortgage, but that he has refused so to do, and complainants pray that said mortgage be foreclosed to satisfy said judgment of $2,207.58. To this complaint the defendant Myer answered, in effect admitting all of its allegations. The defendants Lucero demurred upon the ground, first, that said complaint does not state a cause of action against defendants; and, second, upon the ground that these defendants are not necessary or proper parties to the action. The court overruled the demurrer; and, the Luceros electing to stand thereon, judgment was entered granting the relief prayed. Whereupon the last-named defendants prosecute their appeal to this court.

The assignments of error and the briefs and arguments point out a number of respects in which, it is alleged, the complaint fails to state a cause of action. It is urged, first, that there is no sufficient allegation that the sum of money advanced by Myer to Lucero belonged to the plaintiffs, and that there could not be any such allegation, for the reason that no particular sum could belong to any designated legatee in advance of a final settlement of the Armijo estate. We are of opinion, however, that the allegation that the sum held by Myer as administrator, and subsequently loaned to the Luceros, “in equity and good conscience” belonged to plaintiffs, and that they “were entitled to receive [it] from said defendant as their distributive share of said estate” sufficiently alleged ownership, expecially when taken in connection with the recital and finding in the judgment attached to and made a part of the complaint to the effect that “the said Ben Myer as such administrator has settled all claims against said estate except those of said appellants” (Elias Chaves and wife, the plaintiffs herein). It is further contended that the amount paid over to the Luceros was a part of the $2,207.58 which the judgment recites belongs as a matter of fact to the Luceros as their part of the Armijo estate. We find nothing in the record to sustain this rule. On the contrary, it is clearly averred that the sum here in controversy was a fund belonging to the plaintiffs by reason of the fact that all other claims, both in the nature of debts and bequests, had been paid.

It is said, further, however, that, conceding the liability of the defendant J. Blas Lucero, no such liability exists against the wife, Maria A. Lucero; there being no allegation that she knew of or participated in the fraud. No such point was apparently made in the court below, however....