Davis v. Davis

• Decision Date: 10 February 1890
• Citation: Davis v. Davis, 9 Mont. 267, 23 P. 715 (Mont. 1890)
• Parties: DAVIS. v. DAVIS.
• Court: Montana Supreme Court

23 P. 715

9 Mont. 267

DAVIS. v. DAVIS.

Supreme Court of Montana

February 10, 1890

Appeal from district court, Lewis and Clarke county; H. N. BLAKE Judge.

Carpenter Buck & Hunt and Massena Bullard, for appellant.

Sanders Cullen & Sanders, for respondent.

DE WITT, J.

The complaint alleges that on the 1st day of December, 1882 plaintiff, being about to leave Montana, gave to the defendant, Joseph Davis, a power of attorney, authorizing him to sell and convey the real estate of plaintiff in Lewis and Clarke county, said territory. That plaintiff was then the owner of several described tracts of real estate in said county. The power of attorney was duly recorded February 2 1885, On February 20, 1885, the defendant, contriving to cheat plaintiff, and without consideration, conveyed said premises by two deeds to defendant Bennet Price. Those deeds were executed, "LEWIS DAVIS, by JOSEPH DAVIS, His Attorney in Fact." They were acknowledged and recorded. That, in furtherance of defendant's purpose to defraud plaintiff, said Price, on February 21, 1885, without consideration, conveyed said premises to Joseph Davis. The deeds are all pleaded in the complaint. That said transactions between Joseph Davis and Price were fraudulent and void. Plaintiff prays that all said deeds be declared void, and that the title to the premises be adjudged to be in the plaintiff. The answer contains some denials, which we need not consider in this decision. It then sets forth a separate defense, separately stated, which may be substantially stated, with the legal effect claimed, as follows: That the premises in controversy, or so much thereof as is necessary to notice in this consideration, were originally purchased by Lewis Davis, Joseph Davis, and another.

That Joseph supplied the money to pay for his share in the same. That the deed was taken in the name of Lewis alone. That consequently, at the time of and prior to the acts complained of in the complaint, the legal title was in Lewis, but that there was a resulting trust created in favor of Joseph, and that Joseph had an equitable title in the premises, when the power of attorney was made to him, and when he made the transfers complained of. It appears that Joseph, by the circumambulation through Bennet Price, as attorney in fact for Lewis, conveyed to himself, Joseph, the premises, in which, as appears by his answer, he claims he had the equitable title by virtue of the resulting trust suggested. There was no replication. Plaintiff moved for judgment on the pleadings, "for the reason that the answer filed by the defendant does not present any sufficient defense to the cause of action set up in the plaintiff's complaint." The motion was granted, and judgment entered accordingly. From that judgment this appeal is taken.

We are to determine whether the new matter in the answer constituted a defense which could be presented in this action. The complaint is in equity. The new matter, if it be a defense, is an equitable one. For the purposes of this decision, we take the new matter as true, and, for convenience of treatment, will hereinafter speak of it as facts, and not merely allegations. Joseph Davis, by the power of attorney, was constituted the agent of Lewis Davis. He was in a fiduciary relation. Before the power of attorney was given, the legal title being in Lewis and the resulting trust existing, and the equitable title being in Joseph, Lewis was in a fiduciary capacity as to Joseph. We will not cite authorities upon the general rule of equity, that an agent shall not unite his personal and representative capacities in the same transaction; that he shall not deal with himself; that an agent to sell for his principal shall not himself become the buyer, directly or indirectly; that an agent to buy for his principal shall not himself be the seller. These general doctrines are as old as the court of chancery.

Respondent urges that the conveyances from Joseph, agent, to Joseph personally, (for the mediation of Bennet Price is not material,) must be set aside under the equitable rules cited. The lower court so held, and on that view gave judgment. The opinion on file bases the decision upon those doctrines. We are of opinion, however, that there is another step in the case, another view of the situation of the parties as being in a court of equity, to which the attention of the district court was not invited, and the opinion of that court does not treat of the subject which we will now discuss. Chapter 4, Code Civil Proc., provides: "Sec. 89. The answer of the defendant shall contain: *** Second. A statement of any new matter constituting a defense or counter-claim. *** Sec. 90. The counter-claim mentioned in the last section shall be one existing in favor of the defendant or plaintiff, and against a plaintiff or defendant, between whom a several judgment might be had in the action arising out of one of the following causes of action: First, a cause of action arising out of the transaction set forth in the complaint or answer as the foundation of the plaintiff's claim or defendant's defense, or connected with the subject of the action. *** Sec. 91. If the defendant omit to set up a counter-claim in the cases mentioned in the first subdivision of the last section, neither he nor his assignee can afterwards maintain an action against the plaintiff therefor. *** The defendant may set forth, by answer, as many defenses and counter-claims as he may have," etc.

Was defendant's new matter a defense or counter-claim, and, if so, under the provisions of the Code of Civil Procedure, supra, and by the rules of equity practice, may it be set up in the answer in the case? If so, judgment should not have been against the defendant on the pleadings, and the case should go back to the district court for a determination of the equities. The subject suggests the following order of discussion:

1. Is the new matter in the answer such that, if it were set forth in an original complaint in an action in equity, it would be entertained as entitling defendant to relief in such court? That is to say, if a plaintiff in a bill in equity allege that he furnished money to defendant to purchase land for him, that defendant purchased the land with the money, and took a deed to himself alone, either with or without plaintiff's consent, do these facts entitle plaintiff to equitable relief? The authorities are uniform that they do. Perry, Trusts, c. 5; Story, Eq. Jur. §§ 1201, 1206; Buck v. Swazey, 35 Me. 41; Wood, St. Frauds, § 456, Edwards v. Edwards, 39 Pa. St. 369. The defendant's new matter is a good original cause of action in his favor against the plaintiff.

2. The defendant, Joseph Davis, having such original cause of action before the power of attorney was given to him by plaintiff, Lewis Davis, does the execution by Lewis Davis of such power of attorney deprive Joseph of his cause of action described? In other words, if such cause of action was put into a complaint by Joseph against Lewis, could Lewis defend by alleging the giving of the said power of attorney? It is reductio ad absurdum. The question answers itself in the negative.

3. Again, did the acceptance by Joseph of said power of attorney deprive him of such above-described cause of action? Because he consented to act for Lewis as his agent in the caring for and disposition of the lands of Lewis, and also the lands of which the legal title was in

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