Landis v. Saxton
| Decision Date | 29 June 1891 |
| Citation | 16 S.W. 912,105 Mo. 486 |
| Parties | Landis, Appellant, v. Saxton |
| Court | Missouri Supreme Court |
Appeal from Buchanan Circuit Court.
Affirmed.
Huston & Parrish and B. R. Vineyard for appellant.
(1) This action is brought under the provisions of section 2513 Revised Statutes of 1889. (2) The lower court erred in sustaining the demurrer to the petition, and in rendering judgment thereon against the plaintiff. "If one place money or property in the hands of another, to be kept safely and restored when demanded, this is a direct trust, to which the statute (limitations) will not apply." Angell on Limitations [May's Ed.] p. 170; St. Louis Co. v King, 11 P. 178; Oliver v. Chence, 11 S.E. 655. The case stated in the petition is one of bailment; it is fiduciary, and, until that relation is terminated, either by demand and refusal or repudiation of the relation by the bailee, the statute does not begin to run; there is, till that time, no cause of action; no violation of trust which alone gives a right to sue the bailee. Goodwin v Goodwin, 69 Mo. 621. "Where one takes possession of property in his own name, and is afterwards, by matter of evidence or construction of law, changed into a trustee, he may plead the statute in bar." Angell on Lim. [May's Ed.] secs. 470-1. "In express and continuing trusts there is no limitation; the trustee holds for the beneficiary." Bobb v. Woodward, 50 Mo. 95. "But, if one is held as trustee for creditors, on the ground of fraud, against his will, his possession is adverse." Bobb v. Woodward, supra; Poe v. Domic, 54 Mo. 119. "An administrator, being a trustee, cannot avail himself of the statute against the heir." Ruby v. Barnett, 12 Mo. 3; Dillon v. Bates, 39 Mo. 301. "The statute does not commence to run until the cause of action accrues against the defendant." Rabsuhl v. Lock, 35 Mo. 316. (3) A repudiation of the fiduciary relation, evidenced either by demand and refusal, or adverse claim brought home to the notice of the beneficiary, is necessary to terminate the trust relation and change defendant's rightful possession into wrongful. Beardslee v. Boyd, 37 Mo. 180; Polk v. Allen, 19 Mo. 467; Evans v. King, 16 Mo. 525; Butler v. Crawford, 68 Mo. 280; Eagle v. Sidwell, 11 Mo. 567. (4) This case stands upon much stronger grounds. Here there is no relation of debtor and creditor until demand. Defendant's duty was that of simple custodian; his duty was to keep the identical money received; he was a mere bailee. Yet it is held that even the ordinary deposit in bank, or with an individual, where it was not intended that the identical money shall be retained, requires a demand before the statute of limitation begins to run. Downs v. Bank, 6 Hill (N. Y.) 297; Howell v. Adams, 68 N.Y. 314; Payne v. Gardner, 29 N.Y. 146; Boughlin v. Flint, 74 N.Y. 476; Thompson v. Bank, 82 N.Y. 1; Smiley v. Fry, 100 N.Y. 262.
S. S. Brown for respondent.
(1) The statute requires the action to be commenced within five years "after the cause of action shall have accrued." R. S. 1889, sec. 6773. Under Revised Statutes, 1889, section 2948, no demand was necessary to authorize plaintiff to bring suit. Hence, it is immaterial whether, at common law, a demand could or would not have been necessary to enable the trustees to maintain their action. Reid v. Mullins, 43 Mo. 306; Wescott v. DeMontreville, 30 Mo. 252; Lee v. Casey, 39 Mo. 383; Fisher v. St. Louis, 44 Mo. 482; Rabsuhl v. Lock, 35 Mo. 316. Where an obligation to pay is complete, a cause of action at once arises, and no formal demand is necessary. Watson v. Walker, 23 N.H. 471; State, etc., v. Grigsby, 92 Mo. 419. (2) The election of one to perfect his demand must be exercised within a reasonable time; it cannot be extended beyond the period of the statute of limitations. Railroad v. Township, 36 Kan. 628; Morrison v. Mullen, 34 Pa. St. 12; Palmer v. Palmer, 36 Mich. 487; Steele v. Steele, 25 Pa. St. 154; Rhines v. Evans, 66 Pa. St. 192.
This action was brought in 1887. By it plaintiff seeks to recover from the defendant as the former secretary and treasurer of the St. Joseph Extension Company, organized in 1855, and which expired by the limitation of its charter in 1875, a certain sum of money alleged to have been received by him, during his term of office as such secretary and treasurer, to-wit, the sum of $ 10,000. Plaintiff sues as the last surviving director, alleging that all the rest, president and members of the board of directors, are dead; that no settlement was ever had with defendant for the moneys received by him as aforesaid, and that he failed to account for the same, or to pay the same over to said corporation during its existence or to its trustees, and that it was the duty of defendant as such secretary and treasurer, concerning the moneys he received in that capacity, "to hold and pay out (such moneys) only on the order of said corporation, during its existence or on the demand of its trustees after its dissolution," but that he retains, and still has, the same. Allegation is then made that plaintiff as sole surviving member of the corporation on the thirtieth day of July, 1887, made demand on defendant for the amount so received by him, which he refused to pay over, etc.
The defendant successfully demurred to the petition on the ground that the cause of action did not accrue within five years, and judgment was entered accordingly. This action is alleged to be based on section 2513, Revised Statutes, 1889, which provides as follows: "Upon the dissolution of any corporation already created, or which may hereafter be created by the laws of this state, the president and directors or managers of the affairs of said corporation at the time of its dissolution, by whatever name they may be known in law, shall be trustees of such corporation, with full powers to settle the affairs, collect the outstanding debts and divide the moneys and other property among the stockholders, after paying the debts due and owing by such corporation at the time of its dissolution, as far as such money and property will enable them; to sue for and recover such debts and property by the name of the trustees of such corporation, describing it by its corporate name, and may be sued by the same; and such trustees shall be jointly and severally responsible to the creditors and stockholders of such corporation to the extent of its property and effects that shall have come into their hands."
I. Was the action of the plaintiff barred by the statute? The trusts against which the statute will not run "are those technical and continuing trusts which are not at all cognizable at law, but fall within the proper, peculiar and exclusive jurisdiction" of a court of equity, but other trusts which are the ground of an action at law are open to the operation of the statute. Kane v. Bloodgood, 7 Johns. Ch. 90. The kind of trusts which fall within the exclusive jurisdiction of a court of equity are direct trusts created by deed or will, or by appointment of law, e. g., executorships or administrations; but cases of constructive or implied trusts, which result from partnerships, agencies and the like, are subject to the operation of the statute. Farnam v. Brooks, 9 Pick. 212. The crucial test in all such cases is: Is there a remedy at law? If there is, that is a conclusive answer to the claim that a technical trust as aforesaid has been created. Murray v. Coster, 20 Johns. loc. cit. 583.
Referring to the case in 7 and 20 Johns. Ch., supra, with approval, Judge Story says in Robinson v. Hook, 4 Mason loc. cit. 152: Angell on Limit. [6 Ed.] pp. 174, 175, and cases cited. As showing that directors of a corporation are not trustees within the technical rule, and that they may invoke the statutory bar when sued, see Williams v. Halliard, 38 N.J.Eq. 373; Spering's Appeal, 71 Pa. 1.
In Kane v. Bloodgood, supra, under a statute...
To continue reading
Request your trial