Irwin v. Holbrook

• Decision Date: 11 September 1901
• Citation: 26 Wash. 89,66 P. 116
• Court: Washington Supreme Court
• Parties: IRWIN v. HOLBROOK.

66 P. 116

26 Wash. 89

IRWIN v. HOLBROOK.

Supreme Court of Washington

September 11, 1901

Appeal from superior court, Whitman county; William McDonald, Judge.

Action by W. D. Irwin against Greenville Holbrook to recover property alleged to have been misappropriated by the defendant as trustee. From a judgment in favor of defendant plaintiff appeals. Reversed.

A. A. Wilson and Thomas Neill, for appellant.

Trimble & Pattison, for respondent.

HADLEY J.

The material facts alleged in the amended complaint in this cause are that on the 21st day of February, 1885, and for some time prior thereto, the appellant was the owner of certain real estate in Whitman county, which was then covered by a mortgage to one Plimpton to secure a note for $300, with accrued interest. At the same time the appellant was indebted to the First National Bank of Colfax on a promissory note for $750 and accrued interest. At the time of the execution of the last-named note respondent signed it as surety for appellant. It is alleged that on the date first above mentioned appellant and respondent entered into a contract by which appellant agreed to convey to the respondent the said lands in trust; that respondent would take possession thereof, sell the same in such manner as to derive the greatest consideration obtainable therefor and out of the proceeds would pay the note to the First National Bank of Colfax thereafter to become due and also the amount of the mortgage then on the said lands and held by said Plimpton; that respondent was to account to appellant for all sales so made, and was to turn over to appellant any surplus of money remaining in respondent's hands after the payment in full of the indebtedness above mentioned; that, acting in pursuance of said agreement, appellant did, on the date first mentioned, convey to the respondent, by warranty deed, the said real estate, and respondent thereupon took possession thereof; that on or about the 13th day of October, 1890, the respondent, with intent to defraud appellant, and to conceal from him the true condition of said trust property, and the amount received by respondent from the sale thereof, falsely represented and stated to appellant that he had sold all the land conveyed by appellant to him as aforesaid, and had paid the indebtedness to be paid by him from the proceeds of such sales, but that such proceeds were not sufficient to fully pay the same, and that respondent had used his own funds to the amount of $500 over and above the amount he had received from such sales; that respondent represented that appellant owed him the sum of $500 by reason of such advancement of his own funds, and requested appellant to give him his note for said sum of $500; all of which respondent then well knew to be false and untrue; that appellant, placing trust and confidence in respondent, and relying upon his said statements and representations, and believing them to be true, did, on said 13th day of October, 1890, give to respondent his note for $500, due two years after date, with interest at the rate of 10 per cent. per annum, in settlement of the amount that appellant believed from respondent's said statement that he owed respondent on account of the payment of said notes over and above the amount realized from the sale of said lands; that appellant had no reason to doubt the truthfulness of respondent's said statements and representations until on or about the 1st day of August, 1897, when, in conversation with respondent, he stated to the appellant that since the time appellant gave him said note respondent had received from the sale of part of said lands the further sum of $450, which amount he had credited upon appellant's note; that said statement aroused in appellant's mind a suspicion that respondent had concealed from him the truth, and had made false statements and representations to him in regard to said property and the amount received by him from the sale thereof; that thereupon appellant examined the records of Whitman county to ascertain if respondent had sold all of said lands, the parties to whom sold, and the amounts received by him. The complaint then sets forth in detail the sales made, and the amounts received therefor, as disclosed by the records, aggregating more than $5,000. It is next alleged that on or about June 1, 1898, appellant demanded from respondent an accounting, and the payment to him of the amount received by respondent over and above the amounts paid out by him on said notes; that respondent has ignored said demand, and has failed to make such accounting, or pay to appellant any sum, except that he credited upon said note of $500 the said sum of $450, admitted by him to have been received since the date of making said note, and has offered to surrender to appellant said note in full settlement on account of the sale of said lands; that respondent has not accounted to appellant for the amount of moneys received, and appellant is unable to state the exact sum that would be due to him upon a full and complete settlement and accounting, but believes, and therefore alleges the fact to be, that there is due plaintiff the sum of $5,983.60. The complaint concludes with the prayer that respondent be required to account for all moneys received by him from sales of the lands conveyed to him in trust by appellant, and also as to what sums respondent paid upon the promissory notes due from appellant; that, if respondent fails to make such accounting, appellant shall recover from him the sum alleged to be due as above mentioned. To the amended complaint respondent demurred upon the following grounds: (1) That several causes of action have been improperly united; (2) that the complaint does not state facts sufficient to constitute a cause of action; (3) that the action has not been commenced within the time limited by law; (4) that the court has no jurisdiction of the person of the defendant or of the subject-matter of the action. The demurrer was, by the court, sustained, and the appellant elected to stand upon his complaint, and refused to plead further. Thereupon judgment was entered that the cause be dismissed, and that appellant take nothing by this action. The cause is now before this court on appeal from said judgment.

It is assigned as error that the court sustained the demurrer to both the original and the amended complaint, but we will confine our discussion to the amended complaint. This is an action to compel an accounting between a trustee and his cestui que trust. The complaint alleges a contract which created a fiduciary relation between the parties and...