Dinsmoor v. Hill

• Decision Date: 06 December 1947
• Docket Number: 36795.
• Parties: DINSMOOR et al. v. HILL et al.
• Court: Kansas Supreme Court

187 P.2d 338

164 Kan. 12

DINSMOOR et al. v. HILL et al.

No. 36795.

Supreme Court of Kansas

December 6, 1947

Syllabus by the Court.

1. A general verdict of the jury or a judgment, in an action in which the court is the trier of the facts, resolves every material issue of fact in favor of the prevailing party.

2. Where a court is the trier of the facts every element of a cause of action must be established to its satisfaction and its judgment denying the relief sought will not be disturbed on appeal unless the conceded facts compel a contrary judgment as a matter of law.

3. The record in an action to establish a trust resulting by implication and operation of law examined and held, the record presented does not compel a reversal of the judgment denying such relief.

George K. Melvin and Raymond F. Rice, both of Lawrence, and A. B Mitchell, of Topeka, for appellants.

C. C Stewart, of Lawrence (O. K. Petefish, of Lawrence, on the brief), for appellees.

WEDELL Justice.

This is an appeal by three plaintiffs from a judgment refusing to compel the defendants, Irving Hill and Justin D. Hill, to sell 306 shares of stock in the Lawrence Paper Company originally owned by certain beneficiaries of the Mary G. Bowersock trust, to plaintiffs at $107.50 per share.

The relationship of the parties, the alleged history of events and the theory of plaintiffs' cause of action are succinctly stated in the petition and exhibits attached thereto. In order to obtain a complete understanding of the issues, numerous quoted portions of the petition and a statement, in substance, of other material portions thereof, together with the demurrers, rulings thereon, and answers, are appended to this opinion as a part thereof.

The action was tried by the court without the aid of a jury. The trial court made no formal findings of fact but expressed some views on the evidence which will be mentioned presently. The trial court indicated it entertained doubt concerning the correctness of its previous orders overruling the demurrers of defendants Irving Hill and Justin D. Hill to the petition and to the evidence of plaintiffs but rendered judgment in their favor upon a consideration of the evidence of all the parties.

From what is said at the conclusion of the pleadings and rulings, attached hereto, it is clear the only defendants involved on appeal are Irving Hill and Justin D. Hill, his son.

Plaintiffs appeal from the judgment and the order overruling their motion for a new trial.

Appellees question appellants' right to be heard on their first specification of error. The contention is that since the specification of error merely states the court erred in the judgment rendered without specifying any particular error it is insufficient, citing Hamilton v. Binger, 162 Kan. 415, 176 P.2d 553, and cases referred to therein. Appellants have requested leave to amplify that specification of error. The precise points of the specification as amplified were presented by appellants in their original brief. Appellees were fully apprised of such contentions and were in nowise misled as is clearly indicated by their answer brief. The contentions made here by appellants were the issues presented in the trial court as disclosed by appellants' abstract. Under these circumstances the request to amplify the first specification of error is granted.

The fundamental theory of plaintiffs' cause of action, as clearly disclosed by their petition, is that Irving Hill and Paul A. Dinsmoor, two sons-in-law of Mary G. Bowersock, now deceased, while those men were managing the Lawrence Paper Company, had a verbal understanding and agreement that stock in that company should be owned forever in equal shares by the Irving Hill and Paul A. Dinsmoor families and that Irving Hill, after Paul A. Dinsmoor's death in 1940, violated the agreement in his fiduciary capacity as one of two remaining trustees of the Mary G. Bowersock trust created in 1923, in his fiduciary capacity as administrator of the Paul A. Dinsmoor estate, as President of the paper company, as President of The Lawrence National Bank and as the general confidential adviser of plaintiffs in their business and financial affairs. The gist of the alleged breach of such duties was that he conspired with his son, Justin D. Hill, to purchase 612 shares of stock from certain beneficiaries of the Mary G. Bowersock, trust, thereby disrupting the equality of stock ownership by the two mentioned families.

While, as stated, the trial court did not make formal findings of fact it concluded the issues generally in favor of defendants and refused to grant the relief sought. The Mary G. Bowersock trust will be referred to hereafter as the trust and The Lawrence Paper Company will be referred to as the paper company. The posttrial comments of the court indicated quite clearly the impressions the evidence had made on its mind and its summary of the evidence, in effect, constituted findings of fact. Rasmussen v. Rasmussen, 148 Kan. 649, 657, 84 P.2d 919. The court, in substance, found that by reason of the close friendship and business relations which had at all times existed between Paul A. Dinsmoor and Irving A. Hill, stock in the paper company was held in equal amounts by their families during the life of Paul A. Dinsmoor. There was, however, evidence which indicated the brothers and sisters and other relatives of the plaintiff, Mary B. Dinsmoor, did not regard the arrangement which had existed between Irving Hill and Paul A. Dinsmoor during their joint lifetime as continuing after the death of the latter. This last evidence and some other facts supporting the judgment of the court will be referred to presently. The court also indicated doubt concerning the validity of the alleged agreement of equal stock ownership by all future generations of the two families, if such an agreement had been made. The trial court further indicated that, under all the evidence, it did not believe Irving Hill was the confidential adviser generally for the plaintiff, Mary B. Dinsmoor, widow of Paul A. Dinsmoor, in her various business and financial affairs, at least not after July 24, 1940. It also concluded the 612 shares of stock were purchased from certain beneficiaries of the trust by Justin D. Hill, and not by his father, Irving Hill.

A general verdict resolves all issues of fact in favor of the prevailing party or parties. If supported by evidence the verdict must stand. Fisher v. Central Surety & Ins. Corp., 149 Kan. 38, 86 P.2d 583. That is, of course, likewise true of a general judgment in the absence of specific findings of fact which are contrary to such judgment. Here there were no specific findings of fact against defendants and the posttrial comments of the trial court, in effect findings of fact on the issues, were in their favor.

It should be stated, however, the mere fact Irving Hill was found not to occupy a general fiduciary capacity towards the plaintiff, Mary B. Dinsmoor, would not relieve him from the duties resulting from the fiduciary relation he occupied towards her as a trustee of the trust under which she was a beneficiary. In such capacity a trustee is held in equity and good conscience to the exercise of good faith which requires him to act with due regard to the interests of the beneficiaries. Frazier v. Jeakins, 64 Kan. 615, 68 P. 24, 57 L.R.A. 575; Niblack v. Knox, 101 Kan. 440, 167 P. 741; Judy & Gilbert v. Atchison, T. & S. F. Railway Co., 111 Kan. 46, 205 P. 1116; Lindholm v. Nelson, 125 Kan. 223, 264 P. 50; Alumbaugh v. Hedges, 125 Kan. 449, 265 P. 50; Miller v. Henderson, 140 Kan. 46, 33 P.2d 1098; Flitch v. Boyle, 147 Kan. 600, 78 P.2d 9; Staab v. Staab, 160 Kan. 417, 163 P.2d 418; Meinhard v. Salmon, 249 N.Y. 458, 164 N.E. 545, 62 A.L.R. 1; Tucker v. Brown, 20 Wash.2d 740, 150 P.2d 604; Trice v. Comstock, 8 Cir., 121 F. 620, 61 L.R.A. 176; In re Mountain States Power Co., 3 Cir., 118 F.2d 405; Wootten v. Wootten, 10 Cir., 151 F.2d 147, 161 A.L.R. 1027; Wootten v. Wootten, 10 Cir., 159 F.2d 567; 3 Bogert on Trusts and Trustees, §§ 485, 492, 543. Upon these authorities appellants rely.

We are fully aware of the salutary principles enunciated in our own decisions and do not intend to retract therefrom. It may be doubted that the decisions in other jurisdictions hold a trustee to a higher standard of fiduciary duty than do our own. We are not unmindful of the fact that equity is not bound by technicalities but can usually find a way to afford redress for the wrongful acts of one clothed with fiduciary power. On the other hand every alleged grievance is not a wrong. Every case must rest on its own bottom.

Appellants ask us to conclude a trust arose in their favor which compels the transfer to them of one half of the shares of stock in the paper company purchased by Justin D. Hill from certain beneficiaries of the trust. They contend such a trust arose by implication and operation of law. The contract alleged by appellants is the foundation of their right to recover. Woltz v. First Trust Co., 135 Kan. 253, 259, 9 P.2d 665; Staab v. Staab, 160 Kan. 417, 421, 163 P.2d 418.

The first difficulty confronting appellants in this case is the establishment of the alleged agreement. If the agreement did not exist it obviously could not be violated by Irving Hill in any trust capacity. If it did not exist we need not discuss the question of its validity had it been established.

There are various facts and circumstances which militate strongly against plaintiffs' contention there was an agreement that stock in the paper company should be forever equally divided between the remaining members of the two families. The most important member of the Dinsmoor family insofar as the operation and management of the paper...