McCredie v. McCredie

• Decision Date: 23 December 1930
• Citation: 294 P. 361,134 Or. 517
• Parties: MCCREDIE v. MCCREDIE ET AL.
• Court: Oregon Supreme Court

294 P. 361

134 Or. 517

MCCREDIE v. MCCREDIE ET AL.

Supreme Court of Oregon

December 23, 1930

Department 1.

Appeal from Circuit Court, Multnomah County; Louis P. Hewitt, Judge.

Suit by Etta May McCredie against W. W. McCredie and others. Decree for plaintiff, and defendants other than the Peninsular National Bank appeal.

Modified and, as modified, affirmed.

This is a suit in equity. The plaintiff claims to be the owner of certain negotiable coupon bonds alleged to have been placed by her in the custody of defendant W. W. McCredie for safe-keeping, and for no other purpose; which bonds it is alleged W. W. McCredie delivered to defendant Hugh McCredie and defendant Hugh McCredie delivered to defendant Peninsular National Bank as collateral security for a loan. It is also alleged that said bonds are now in the possession of said bank, and that defendants are in a position to and threaten to dispose of said bonds. 'Plaintiff prays for a decree directing W. W. McCredie to pay Hugh McCredie's indebtedness to the defendant bank, and to surrender and deliver said bonds to plaintiff; and enjoining defendants from disposing of said bonds. Plaintiff also prays for her costs and disbursements and for such other and further relief as to the court may seem equitable and just in the premises.

The answer of W. W. McCredie and Hugh McCredie denies all of the allegations of the complaint except the allegation that defendant bank is and was a banking corporation, that the bonds were coupon bonds, and except that defendant (W. W McCredie) alleges that about three years ago he loaned bonds to the defendant Hugh McCredie by and with the consent knowledge, and acquiescence of the owners thereof to aid Hugh McCredie to secure a loan of $10,000 to be used in his business, and among said bonds, so loaned, were four coupon bonds of the Department of the Seine, face value of $1,000 each, and one coupon bond of Brazil, face value of five hundred pounds, and there were no other bonds described in plaintin's complaint, except Brazil bonds of a total of three hundred pounds face value belonging to one not a party to this action.

The answer of defendant bank alleges that said defendant bank never had in its possession the bonds of the Republic of Chile or the bonds of the city of Paris, France, which are referred to in the complaint. In its answer the defendant bank also alleges that it is holding as security for indebtedness of Hugh McCredie, Jr., bonds Nos. 11579, 11580 11581, and 11582, Department of the Seine Gold Bonds of the face value of $1,000 each, and also bond No. 02824 United States of Brazil, 7 1/2 per cent. loan of 1922 for 500 pounds sterling. The answer of this defendant also alleges in effect that the bank is an innocent holder without notice of claim thereto by any one other than said Hugh McCredie, Jr. No reply was filed. From a decree for plaintiff, defendants W W. McCredie and Hugh McCredie appeal.

George S. Shepherd, of Portland (W. W. McCredie, of Portland, on the brief), for appellants.

Johnston Wilson, of Portland (Elton Watkins and John F. Logan, both of Portland, on the brief), for respondent.

KELLY, J. (after stating the facts as above).

Appellant urges that the court was without equitable jurisdiction; that there was a defect of parties plaintiff, in that Walter H. McCredie should have been made co-plaintiff; that the subject-matter of the suit comprises funds of a partnership, and that this suit cannot be maintained until an accounting has been had; that no assignment, transfer, nor gift to plaintiff of the bonds in question has been proven; and that the relief granted was not the relief prayed for.

We are of the opinion that the complaint alleges facts disclosing a breach of an implied or constructive trust.

In speaking of the wrongful appropriation or conversion into a different form of another's property by the custodian of such property, Mr. Pomeroy says:

"Whenever one person has wrongfully taken the property of another, and converted it into a new form, or transferred it, the trust arises and follows the property or its proceeds." 3 Pomeroy's Equity Jurisprudence (4th Ed.) § 1051, pp. 2400, 2401.

If we understand the brief of appellants, they do not insist that the complaint fails to state facts necessary to give a court of equity jurisdiction, for we find this statement in the brief:

"Where the facts necessary to give a court of equity jurisdiction are stated in the complaint and denied by the answer, the question of jurisdiction becomes one of fact, and is not waived by answering to the merits, and if the want of jurisdiction appears during the trial, the suit should be dismissed."

Because of this contention, we must look to the evidence to determine whether want of equitable jurisdiction appears therefrom. Walter H. McCredie, husband of plaintiff, testified that in the fall of 1921, from the proceeds of the sale of a baseball club he bought the bonds mentioned in the complaint for the plaintiff; that he then told the defendant W. W. McCredie who is his uncle, that he had no insurance policy for his wife, that he would like to buy some bonds to be safe, "for a kind of old age pension; and that if things went wrong, he would always have those to fall back on"; that he wanted them for the wife because he had no insurance and he thought the wife was...