Grumley v. Webb

• Citation: 44 Mo. 444
• Parties: WM. GRUMLEY, Appellant, v. WM. G. WEBB, Respondent.
• Decision Date: 31 October 1869
• Court: United States State Supreme Court of Missouri

44 Mo. 444

WM. GRUMLEY, Appellant,

v.WM. G. WEBB, Respondent.

Supreme Court of Missouri.

October Term, 1869.

Appeal from St. Louis Circuit Court.

Nathaniel Myers, and Oliver, with whom were Cline, Jamison & Day, for appellant.

I. The equitable title to the lease is in Grumley. 1. Webb's permitting Grumley's improvements to remain on the land for his own benefit, was a fraud upon Grumley's rights. His procuring the sheriff's deed of January 31, 1857, was a gross fraud in law and in fact upon his principal, Grumley. His retaining possession under that deed, excluding Grumley, refusing to account for rents, and forcing Grumley to sue him, were also gross frauds on Grumley's rights. And it was because Webb suffered the buildings to remain, and because he had a seeming title, and because he had possession, that he was enabled to get the lease now in controversy. 2. When a new lease is granted, the old one is considered to be still in being. The new lease is considered a graft upon the old. Whoever is entitled to the profits of the old lease is entitled also to those of the new. (Rawe v. Chichester, 1 Ambler, 719; Randall v. Russell, 3 Merivale, 195; Taster v. Marriott, 1 Ambler, 668; Eyre v. Godolphin, 1 Ball & B. 299; Holridge v. Gillespie, 2 Johns. Ch. 29; Rakestraw v. Brewer, 2 Pierre W. 512.) 3. The agency of the defendant estopped him, under any circumstances, from getting a new lease for himself. (Zilkin v. Carhart, 3 Bradf., N. Y., 376; Phyfe v. Wardell, 5 Paige's Ch. 279; Tanner v. Elworthy, 4 Beav. 491.) The ground of decreeing renewals by trustees to inure to the benefit of the infant is public policy, to prevent persons in such situations from acting so as to take a benefit to themselves. (Griffin v. Griffin, 1 Sch. & Lefr. 352; Owen v. Williams, 1 Ambler, 734; Bennett v. Vansyckel, 4 Duer, 462; Davoue v. Fanning, 2 Johns. Ch. 251; Pickering v. Vowles, 1 Brown's Ch. 182; Fitzroy v. Howard, 3 Russ. Ch. 233; Featherstonhaugh v. Fenwick, 17 Ves. Jr. 298; Van Horn v. Fonda, 5 Johns. Ch. 409; Huson v. Wallace, 1 Richardson's Eq. 2-7; Whalley v. Whalley, 1 Vern. 484; Mulvaney v. Dillon, 1 Ball & B. 417; 2 Fonblanque's Eq. 189.) 4. It matters not that there was no covenant of renewal contained in the old lease. The right to the new lease is not based on covenant. It results from the relation of the parties-- from the “beneficial interest connected with a tenancy as an inducement toward a renewal.” (Zilkin v. Carhart, supra.)“Though the lessors are not bound to renew, yet, when done, it is a continuation of the old lease.” (Rawe v. Chichester, 1 Ambler, 719; Owen v. Williams, supra; Pickering v. Vowles, 1 Brown's Ch. 182; Griffin v. Griffin, supra; Eyre v. Godolphin, 1 Ball & B. 299; Davoue v. Fanning, supra; Bennett v. Vansyckel, supra.) 5. The policy of the law prohibits a trustee from getting a new lease to himself, although the lessor refuses to renew to the cestui que trust. (Bennett v. Vansyckel, supra; Keech v. Sandford, 3 Eq. Cas. Abr. 741; Davoue v. Fanning, supra; Lead. Cas. in Eq., Hare & Wall. Notes, pp. 84, 97.)

II. The plaintiff Grumley has never in any way parted with his equitable interest in this new lease. 1. Webb has no writing sufficient, under the statute of frauds, to show such transfer. The only writing the defendant has is a receipt for the judgment alone. The receipt itself includes nothing else. The sweeping clause “in full of all claims and demands” is to be restrained and limited by the previous special recital of the “judgment.” A general release is to be taken most strongly against the releasor but where there is a special recital, and then general words follow, the general words are to be restrained and qualified by the special recital. (Bac. Abr. 633; Sto. on Agency, §§ 21, 62, 65, 66, 74; Sto. on Cont. § 642 et seq.; Chit. on Cont. 84; 2 Pars. on Cont. 220; Add. on Cont. 845; Fox on Cont. 155; Powell on Cont. 235-6; Swift's Dig. 300; Jackson v. Stackhouse, 1 Cow. 122; Lyman v. Clark et al., 9 Mass. 237; McIntire v. Williamson, 1 Edw. Ch. 34; Payne v. Allen, Sprague, 304; Averill v. Lyman, 18 Pick. 346; Rich v. Lord, 18 Pick. 346; Van Hagen v. Van Rensselaer, 18 Johns. 420; Elmendorf v. Lansing, 5 Cow. 470; Payler v. Homersham, 4 Maule & Selw. 425; Ramsden v. Hylton, 2 Ves. Sr. 309; Cole v. Gibson, 1 Ves. Sr. 505; Thorpe v. Thorpe, 1 Raymond, 235; Cole v. Knight, 3 Mod. 277; Butcher v. Butcher, 4 Bos. & Pul. 113; Simons v. Johnson, 3 Barn. & Ald. 180; Bruen v. Marquand, 17 Johns. 58; Littlefield v. Winslow, 19 Maine, 397; Rossiter v. Rossiter, 8 Wend. 494; Hays v. Goldsmidt, cited in 1 Taunt. 349; Hoes v. Van Hoesen, 1 Barb. Ch. 398; Taylor v. Robinson, 14 Cal. 399; Washburn v. Alden, 5 Cal. 463.) 2. The defense is seeking to extend the receipt by parol. Even if they had a right to do this, it would yet be incumbent on them to show, by direct and positive testimony, that the matter in regard to which they wish to introduce parol evidence was expressly mentioned, and that, too, in the way of bargain and sale; and it being an interest in land, a transfer of which they are seeking to prove by parol, they must prove it (if at all) by indubitable proof of the contract in all its parts.

Krum, Decker & Krum, for respondent.

I. The plaintiff, by his petition and proofs, seeks to raise a constructive trust and fasten it on the conscience of the defendant, and convert him into a trustee for the plaintiff quoad the property in question. To raise a constructive trust, the burden rests on the plaintiff to show that the acquisition, by defendant, of the lease of John O'Fallon for a term of ten years from January 1, 1864, was effected with fraud. He has failed to show this.

II. In order to raise a constructive trust, it is essential that three things be made to appear, viz: 1. That the plaintiff had a right to, or property or interest in, the subject matter of the trust. 2. That the defendant, at the time of the transaction, stood in a fiduciary relation to the plaintiff or the property. 3. That the defendant, in his fiduciary capacity, had control of the subject matter, and by reason of such control obtained the property to his own use. The evidence establishes neither of these propositions.

III. The settlement made March 7, 1865, set up in the answer, is a full and complete defense to this action. The plaintiff, by his receipt, acknowledged the sum paid ($6,500) to be in full satisfaction of all claims and demands which he then had or held against the defendant. The language used in the receipt is the most comprehensive known in the law. “‘Demand’ is a word of most extensive import, and a release of all demands discharges all manner of actions existing at the time.” (4 Den. 166.) That settlement included all damages the plaintiff had sustained by reason of the alleged wrongs of the defendant in respect to the leasehold property, and the receipt is a good bar to any subsequent action for damages, and also a bar to a suit in equity for the title. (Hughes v. Moore, 7 Cranch, 178; Swift's Dig. 300.)

WAGNER, Judge, delivered the opinion of the court.

This was a bill in equity to have a renewed lease, procured by the defendant while agent of the plaintiff, declared a trust for the plaintiff, and for an account. The record shows that the plaintiff leased from John O'Fallon an unimproved lot of ground in 1844, and in 1855 completed the building of fifteen houses on it. The lease was to expire January 1, 1864, with a privilege in plaintiff of removing his improvements at any time before its expiration. Just before completing the building of the houses, the plaintiff, by a power of attorney, made defendant, who was in the real estate business, his agent to collect the rents and manage his property, and then departed for Europe. While plaintiff was absent, the defendant, his agent, bought in three judgments for himself, which were outstanding against the plaintiff. Upon these judgments he caused executions to be issued, had the fifteen houses levied on, and sold at sheriff's sale, and bought them in himself, taking a deed therefor, while plaintiff was absent in Europe. The sale was made in January, 1857, and the evidence is uncontradicted that bidders were kept away and competition warded off by defendant's declaring that he was purchasing the buildings for his principal, the plaintiff. The buildings were purchased at sheriff's sale, and, as the evidence shows, for less than a tenth of their real value. The defendant stated on different occasions that he purchased the buildings for the plaintiff, but it seems that he really bought them for himself, with the intention of keeping them; and when plaintiff, on hearing of the sale, returned home, he refused to give him any account of the rents of the houses except up to the time of the sheriff's sale to him. Plaintiff then sued defendant, as his agent, for an account, and in May, 1864, recovered a judgment for $11,522.54, for rents collected and appropriated by defendant up to January 1, 1864, the date that the lease expired.

In the month of November, 1863, and before the expiration of the lease, both parties (the plaintiff and defendant) applied to the lessor for a renewal of the lease. The lessor, O'Fallon, refused to continue the lease to the plaintiff, but granted a lease of the premises for ten years from January 1, 1864, to the defendant; and he has ever since enjoyed the rents and profits of the lot, together with the buildings thereon erected by the plaintiff.

O'Fallon is dead, but the testimony of Keber, his chief clerk, a disinterested witness, states that he knew of no objection to the plaintiff, but that O'Fallon made it a rule to grant a new lease to the one already in possession. The defendant was in possession, to the exclusion of his principal, the plaintiff; he exhibited his deed to show title, and it is charged that he made use of his wrongful possession and pretended title to acquire his lease.

After the procurement of this lease by the...