Cree v. Lewis

• Decision Date: 05 December 1910
• Citation: 49 Colo. 186,112 P. 326
• Parties: CREE v. LEWIS.
• Court: Colorado Supreme Court

112 P. 326

49 Colo. 186

CREE v. LEWIS.

Supreme Court of Colorado

December 5, 1910

Appeal from District Court, Pueblo County; John H. Voorhees, Judge.

Action by J. A. Lewis against I. B. Cree. Judgment for plaintiff and defendant appeals. Affirmed.to plaintiff that he had not yet received the whole sum to which he was entitled. Held, in an action to establish and enforce a trust of such fund, that equity had discretion to require defendant to pay damages equal to the legal rate of interest in addition to the amount plaintiff was entitled to, as compensation for plaintiff's loss of the use of his part of the fund.

Devine & Dubbs, J. W. Preston, and H. C. Vidal for appellant.

Hartman & Ballreich, for appellee.

GABBERT J.

Appellant was the owner of 2,000 shares of the capital stock of the Shurtleff Consolidated Gold Mining Company. Either by mistake or intention, the stock book of the company purported to show that he had received a certificate for his stock, which was not the fact. The company officials, however, declined to issue him a certificate, unless he furnished an indemnifying bond. Appellee claims that appellant represented to him that he was without funds to prosecute an action against the company to compel it to issue him a certificate, and offered that if he would advance him $150 and cancel an account for $45 which he held against the appellant, that the appellee should have a one-fifth interest in the stock and the proceeds thereof. Appellee also claims that he accepted the offer, and advanced the money and canceled the account, as agreed. Thereafter appellant brought suit in mandamus against the company to compel the issuance of a certificate representing his stock. He was successful in his suit, and the certificate was issued and delivered to him with the understanding and agreement, according to the claim of appellee, that it was to remain in the name of the appellant, but was to be delivered to him, the appellee, and kept by him. Subsequently, the appellant received in the way of royalties from the property of the company various sums aggregating $4,803, and later received something over $46,000 for his share of the proceeds of a sale of the property of the company, as represented by his stock. Appellee, as plaintiff, then brought suit to recover from the appellant as defendant, one-fifth of the money thus received, basing his right of action primarily upon the contract which he claimed to have made and fulfilled with the defendant, as above mentioned.

The main issue of fact under the pleadings was, whether or not the parties had entered into this contract. The plaintiff claimed that the action was equitable, and therefore triable to the court. The defendant claimed that the suit was one at law, and that he was therefore entitled to a trial by jury. The court called a jury as advisory, and submitted certain questions for their determination. The jury failed to agree, whereupon the court discharged them, found the issues for plaintiff, and rendered judgment for him for his share of the amount received by the defendant in the way of royalties and proceeds from a sale of the property of the company, together with interest. Further relief was also granted, which will be considered later. From this judgment, the defendant has brought the case here for review on appeal.

The first point made by his counsel is, that the court erred in not allowing him a jury trial. Section 173 of our Civil Code provides that: 'In actions for the recovery of specific real or personal property, with or without damages, or for money claimed as due on contract, or as damages for breach of contract, or for injuries, an issue of fact must be tried by a jury, unless a jury trial is waived, or a reverence is ordered as provided in this Code. In other cases issues of fact must be tried by the court, subject to its power to order any such issue to be tried by a jury, or to be referred to a referee, as provided in this Code.'

Under this section, counsel for the defendant contends that the case was triable before a jury, for the reason that it was an action at law, in that the complaint alleged either a breach of the alleged contract made by the defendant to turn over one-fifth of his stock in the Shurtleff Company, or for money had and received by the defendant for the plaintiff, or for damages for the conversion of the stock or money of plaintiff by the defendant.

According to the averments of the complaint, a one-fifth interest in the shares of stock standing in the name of defendant was the property of plaintiff. A trust, in its simplest form, is that relation between two persons by virtue of which one of them holds property for the benefit of the other. That is precisely what plaintiff alleged; that is to say, by the averments of his complaint he charged that his interest in the stock represented by the certificate issued in the name of the defendant was held in trust for him by the latter, and that he was entitled to recover the money received thereon. In brief, his action was to establish and enforce a trust. Such an action is a suit in equity, and under the last paragraph of the Code above quoted, the issues were triable to the court. True, plaintiff demanded and was given a money judgment, but this relief depended upon the establishment of a trust. In other words, if he failed to establish that shares of stock evidenced by the certificate issued to and in the name of defendant belonged to him, then his action would fail; so that the basis of his action was, that the stock in question was held by the defendant in trust--purely a suit in equity. It is also true that the principal question of fact upon which depended the issue of trust was the simple one of whether the contract upon which plaintiff relied was entered into with the defendant; but the right to have an issue of fact tried by a jury is not determined by the nature of the issue, but by the character of the action in which such issue is joined. That is to say, if an issue of fact relates to or involves a trust which the party tendering it is attempting to establish, it is triable to the court. United Coal Co. v. Canon City Coal Co., 24 Colo. 116, 48 P. 1045; Danielson v. Gude, 11 Colo. 87, 17 P. 283.

The fact that plaintiff asked for a money judgment is by no means decisive that the action was one at law. If he established the trust upon which he relied, then he was entitled to recover from the defendant the money which he had received on account of the stock held in trust for the plaintiff. Courts of equity do not, however, try cases by piecemeal. It has been settled by repeated decisions, that when a court of equity has jurisdiction of a cause for one purpose, it may retain such jurisdiction for the purpose of deciding the whole controversy, and determining the rights of the parties before it, notwithstanding that for a part of such relief the complainant might have a remedy at law, and thus establish purely legal rights and grant legal remedies, which would otherwise be beyond the scope of its authority. Packard v. King, 3 Colo. 211; Schilling v. Rominger, 4 Colo. 100; Whitsett v. Kershow, 4 Colo. 419; United Coal Co. v. Canon City Coal Co., supra; 1 Pomeroy's Equity Jurisprudence, § 181.

But even if it could be successfully contended that the case stated, in so far as it sought to hold the defendant responsible for the money received on account of the stock which plaintiff claimed to own, was not of itself a case in equity, he pleaded further facts which made the case one in equity, by alleging, in substance, that defendant, without his (the plaintiff's) consent, invested his share of the money represented by the stock in question in certain real estate, taking the title thereto in his (the defendant's) name. From these averments a resulting trust in favor of plaintiff was stated, for the reason that if one take unto himself a title to real estate which he has purchased with the money of another, he is a trustee for the true owner. First National Bank v. Bissell (C. C.) 4 F. 694. So that, under the averments of the complaint with respect to the allegations relating to the purchase of real estate, the title thereto was held in trust by the defendant for the use of plaintiff, if he established his right to a share of the money which he claimed the defendant had received for the pro rata share realized from royalties and a sale of the company, as represented by the stock which he claimed belonged to him.

Based on these averments, plaintiff prayed that the judgment for money to which he claimed to be entitled be decreed a lien upon the premises in question, and that they be sold under the order and direction of the court for the purpose of satisfying such lien. This was proper and equitable relief if plaintiff established facts upon which his right thereto was based. Wrongfully converting funds which belong to another does not create the relation of debtor and creditor, and nothing more. The owner, of such funds may resort to a suit in equity to recover them, if the facts justify that character of action. Where the money of one is wrongfully used by another for the purchase of real estate, the party to them such money belongs may impress the property so purchased, so long as it stands in the name of the wrongdoer, with an equitable lien in the nature of a resulting trust to the extent his money was used in its purchase. Moore v. Stinson, 144 Mass. 594, 12 N.E. 410; ...