Fisk v. Patton

• Decision Date: 01 July 1891
• Citation: 7 Utah 399,27 P. 1
• Court: Utah Supreme Court
• Parties: ARCHIE C. FISK, RESPONDENT, v. A. B. PATTON, APPELLANT

27 P. 1

7 Utah 399

ARCHIE C. FISK, RESPONDENT, v. A. B. PATTON, APPELLANT

Supreme Court of Utah

July 1, 1891

APPEAL from a judgment of the district court of the first district. The opinion states the facts, except the findings are here given more fully. They were as follows: In the year 1888 defendants Patton, Swans, Strayer, Holmes and York organized for the purchase of real estate for profit, under the laws of Iowa, the Interstate Land and Town Company, which incurred obligations to over $ 50,000, and for the purpose of paying them and of discharging the liabilities of the individual members agreements were made that land should be purchased in Ogden City, and laid out, platted and placed upon the market for sale, but being informed that under the laws of Utah Territory a corporation could not deal in real estate, the said corporators took the title as hereinbelow stated to Nob Hill and Nob Hill Annex additions to Ogden City, Utah, and agreed that the proceeds should be applied: First, to the payment of the purchase price of said property; second, to the payment of the corporate indebtedness of the said corporation; third, the remainder to be divided among the individual stockholders of said corporation according to the amount of property held by each one. On April 24, 1889, in pursuance of the above agreement, York, one of the incorporators, after negotiation with one Robinson, made a contract for the purchase of the land with him and executed to him notes for $ 108,000, and on April 29, 1889, Robinson deeded to York lots and blocks in said additions, and York took the conveyance with the distinct understanding and agreement that it was subject to the same terms as the contract, and not a merger thereof, in trust for himself and associates. On August 1, 1889, York retired, assigning his contract upon the land to Fisk, the plaintiff, Swans, Patton Strayer and Holmes, and conveyed the land to Patton alone and at the same time, as a consideration for the assignment of the contract and of the conveyance to Patton, the plaintiff, Fisk and Swans, Strayer and Holmes all agreed to indemnify York from payment of any of the notes, and Patton to further secure York, executed a mortgage on the land deeded to him for $ 35,000, which mortgage York assigned to Robinson. Patton at the time he took the conveyance had full knowledge of all the facts and circumstances, and took the same with the distinct understanding and agreement that he held the same in trust for the plaintiff and his other associates, and then repudiated his trust. The court found that a resulting trust arose as to Patton in favor of and for the benefit of the stockholders of the said company.

Affirmed.

Messrs. Kimball and Allison and Higbee and Emerson, for the appellant.

Messrs. Miller and Maginnis, Mr. F. S. Schoonover and Mr. L. R. Rhodes, for the respondent.

ANDERSON, J. BLACKBURN, J., concurred.

OPINION

ANDERSON, J.:

The plaintiff brought this action against the defendant A. B. Patton, and also united with him as defendants J. R. Strayer, J. R. Holmes, J. H. Holmes, Robert Robinson, W. R. Swan, and the Interstate Land & Town Company, as co-defendants. Patton alone appeared and made a defense. The material portions of the complaint alleged, in substance, that in the year 1888 the defendants, A. B. Patton, W. R. Swan, J. R. Strayer, J. R. Holmes, J. H. Holmes, and A. M. York, organized a corporation, under and by virtue of the laws of the State of Iowa, called the "Interstate Land & Town Company." That the object of said company was the purchase and sale of real estate for profit. That said incorporation incurred debts to the amount of over $ 50,000, and for the purpose of paying the same, and discharging the liability of the individual members of said corporation, it was agreed that land should be purchased in the city of Ogden, Utah, and laid out and platted and sold for the benefit of said corporation and its incorporators. But the incorporators being advised that, under the laws of Utah Territory, the corporation could not deal in real estate in this Territory, the contracts, deeds, etc., were made in the names of the incorporators, or some member thereof, with the understanding or agreement that, after the properties were sold, as contemplated by all the parties thereto, the proceeds should be first applied to the payment of the purchase price of the property, then to the payment of the corporate indebtedness, and the balance, if any, to be divided between the stockholders of the company according to the amount of stock held by each.

That the plaintiff became the holder of a large amount of the stock of said company in July, 1889. That in March, 1889, the defendant Patton purchased certain real estate in section 9, township 5, range 1 W., in Weber county, in trust for himself and associates, taking the title in his own name, which he platted into blocks and lots, a part of which has been sold, and a part of which is still unsold. But as to this tract the court held that Patton was the absolute owner in his own right, and, as no appeal is taken to the decision of the court as to this tract of land, no further notice will be taken of it in this opinion. The complaint further alleges that, on the 24th day of April, 1889, the said A. M. York, acting for and in behalf of the holders of the stock of the said Interstate Land & Town Company, as trustee therefor, contracted with Robert Robinson and Thomas Cahoon for the purchase of certain real estate in section 27, township 6 N., range 1 W., for which the said York executed his promissory note to Robinson, who acted for himself and Cahoon, in the sum of $ 108,000. This contract contained the terms of sale, the time and manner of payment, etc. The complaint further alleges that on the 29th day of May, 1889, Robinson, in furtherance of the contract, deeded to York certain real estate, describing it. That York took the conveyance subject to the terms of the contract, and in trust for himself and associates. That on the 1st day of August, 1889, York assigned the Robinson contract to the plaintiff, W. R. Swan, A. B. Patton, J. R. Strayer, J. H. Holmes, and J. R. Holmes, and on the same day also conveyed the real estate deeded to him by Robinson to the defendant Patton, and withdrew from the enterprise. That at the same time, and as a consideration for the assignment of the contract, and for the conveyance to Patton, the plaintiff and the defendants W. R. Swan, J. R. Strayer, J. H. Holmes, and J. R. Holmes entered into a written agreement with York, by which they agreed to pay the notes York had executed to Robinson; and that, as a further security to York, Patton executed his individual note to York for $ 35,000, and secured it by a mortgage on the real estate deeded to him by York, which mortgage York assigned to Robinson.

That Patton took said conveyance with the understanding and agreement that he held the same in trust for the plaintiff and his other associates, and with full knowledge of all the facts and circumstances and the conditions under which the conveyance to him was made. That thereafter the defendant Patton sold a portion of the land in said section 27 known as "Nob Hill" and "Nob Hill Annex" additions to Ogden City, and was about to convert the proceeds to his own use, and had already appropriated a large portion of the proceeds to his own use, and that he threatened to sell the remainder of the property and convert the proceeds to his own use and benefit;...