Powell v. United Mining & Milling Co.

• Court: Oklahoma Supreme Court
• Writing for the Court: LYDICK, J.
• Citation: Powell v. United Mining & Milling Co., 107 Okla. 170, 231 P. 307, 1924 OK 300 (Okla. 1924)
• Decision Date: 11 March 1924
• Docket Number: Case Number: 12794
• Parties: POWELL v. UNITED MINING & MILLING CO. et al.

1924 OK 300

231 P. 307

107 Okla. 170

POWELL v. UNITED MINING & MILLING CO. et al.

Case Number: 12794

Supreme Court of Oklahoma

Decided: March 11, 1924

Syllabus

¶0 1. Appeal and Error--Law of the Case--Subsequent Appeals--Change of Decision.

When the judgment of a lower court has been reversed by this court upon an appeal by proceedings in error and the case remanded to the lower court for a new trial, the lower court, upon the second trial, is required to follow, as the law of the case, the judgment of this court therein rendered. On a second appeal in said case to this court, the decision of this court and rules of law by it announced in its opinion on the first appeal constitute the law of the case as to all points decided in the first opinion, but this is not a cast-iron rule incapable of relaxation in any event. On a second appeal to this court, it may review and reverse its former decision in the same case, where it is satisfied that gross or manifest injustice has been done by its former decision, and will do so where the mischief to be cured far outweighs any injury that may be done in the particular case by overruling a prior decision, and especially where the party benefiting from the erroneous judgment, and in full reliance thereon, has not surrendered substantial and valuable rights which cannot be restored by the court.

2. Same--Construction of Former Opinion.

Where the decision of this court on a former appeal in the same case is followed by this court as the law of the case on second appeal therein, and the court believes the opinion expressed in the first appeal is grossly erroneous, the court in determining the issues of law arising in the second appeal will give to the language of the court used in the first opinion only such effect in favor of the erroneous rule of law there announced as the language used emphatically demands. Where the language used in the first opinion, in expressing a rule of law there erroneously announced, is capable of two constructions, one of which interpretations, though clearly within the rule announced, would do an injustice to one of the parties, and the other of which, if followed, produces a just result, lawful under a correct application of the law, this court will follow the latter construction.

3. Corporations--Contract With Agent to Buy Real Estate in Name of Corporation--Agent Taking Deed in Own Name--Constructive Trust--Enforcement.

Where a corporation enters into an agreement with its fiduciary agent to act as such in buying a certain tract of real estate for it, and agrees to take the deed thereto in the first instance in the name of the company as grantee, and agrees that as agent of the company he will construct improvements thereon and pay certain debts of the company, the agent to use his own personal money exclusively for said purposes and thereafter to accept certain shares of the capital stock of said company in full consideration therefor, and where in the discharge of said trust the agent as the representative of the company does so purchase said real estate for the company, but in violation of his trust he takes the deed to said property in his individual name as grantee and thereafter asserts himself to be the sole owner of said real estate and the company is ready, willing, and able to perform its part of the contract at the time when it should be performed and so notifies its said agent, we held said agent became a trustee holding the naked legal title for the company as the cestui que trust at the moment said deed was executed and delivered, and he was bound to convey same to the cestui que trust at any time upon its demand, and the cestui que trust had the right to so demand and to maintain a suit to declare and enforce said trust without first tendering said stock to such trustee.

4. Same--Former Decision Followed but Repudiated as Further Precedent.

Where a trustee holds the legal title to real estate in his own name as trustee for a corporation as cestui que trust, and where in the business transaction between them the company is obligated to deliver to the trustee certain shares of its capital stock as consideration for the service and expense of the trustee in acquiring said trust property, and where, under said trust agreement the agent should have taken the title to said real estate in the company's name as grantee in the first instance and had no right to take said title in his individual name, and where the company was ready, willing, and able to issue and deliver to its trustee the said shares of stock when same had been due for delivery under said trust agreement and so notified said trustee, but the trustee denied said trust and claimed said real estate as his own, and thereafter, through no fault or intention to wrong the trustee, the corporation became unable to issue and deliver to said trustee said shares of its capital stock, the cestui que trust did not forfeit its equitable ownership of said real estate, but a court of equity, if it be equitable so to do, will enforce said trust in a suit timely instituted, provided the cestui que trust offers to do equity and the court finds that it can cause the cestui que trust upon its said offer to fully, sufficiently, and equitably compensate the trustee for its failure to so deliver to him the shares of stock which it was once able to deliver to him and which he had refused. In the case of Powell v. Adler, 69 Okla. 291, 172 P. 55, this case was decided in a former appeal, and therein this court announced a contrary rule on this point, which rule is followed here as the law of this case, but the holding of this court there made on the former appeal on this point as a further precedent or rule of law is hereby expressly overruled.

Error from District Court, Murray County; T. P. Clay, Judge.

Action by Ike Adler, receiver (the United Mining & Milling Company substituted party), against Isaac E. Powell. Judgment for plaintiff, and defendant brings error. Affirmed.

Ames, Chambers, Lowe & Richardson, for plaintiff in error.

Young, McKenzie & Haste and Thos. E. Wagstaff, for defendant in error.

LYDICK, J.

¶1 This action was originally instituted in the district court of Murray county, on March 11, 1914. The plaintiff was Ike Adler, in his capacity as receiver of the United Mining & Milling Company, a corporation. The suit was brought against Isaac E. Powell as defendant, and was clearly a suit to declare and enforce a trust under the provisions of article 4, ch. 77, Compiled Oklahoma Statutes, 1921. It is true that in the petition the plaintiff not only sought to have the court adjudge the existence of a trust, but sought further to have the court, upon declaring such a trust, to require the trustee to clear up the record title to said land by executing and delivering a deed formally conveying the legal title to the cestui que trust. That is permissible in a suit to declare and enforce such a trust. Judgment was rendered for the plaintiff, and defendant appealed to this court. The substance of the trust agreement, as pleaded and substantially proven to the satisfaction of the court below, and other material facts are stated in the former opinion of this court as follows:

"Prior to the fall of 1912 the United Minning & Milling Company, a corporation, was engaged in the operation and development of a mine near Davis, Okla. There were a number of stockholders and directors, and about the time given above, owing to unsuccessful business, it was concluded to close the mill located upon the lease then owned by the company and about the 1st of January, 1913, the directors convened for the purpose of discussing ways and means whereby the business of the company might be more properly operated. The plaintiff in error was present at that meeting; he being a stockholder and presumed to occupy the position of associate manager of the enterprise. No record of this meeting was kept, but the testimony of those present conclusively establishes: That the plaintiff in error and another made to the directors of the company a proposition that, if they would increase the capital stock of the company from 50,000 to 100,000, and deliver to them the increase, they would pay certain debts of the corporation, erect a mill upon the property leased by it, and in addition thereto would purchase the fee in said property for the corporation. This proposition was accepted by the company, and it was agreed that the plaintiff in error would go to Oklahoma and purchase said property for the corporation, make provision for the erection of the mill and the adjustment of the indebtedness of the company, and that the corporation would increase its capital stock to 100,000, and deliver to the plaintiff in error and his associates the capital stock agreed upon. That thereupon the plaintiff in error went to Davis, Okla., carrying a letter of introduction from one of the directors present to the cashier of a bank at Davis. Okla., and informed the cashier of said bank that his mission at Davis was to purchase this property for his company. The plaintiff in error acquired an option upon this property in his own name, and in a short time thereafter consummated this deal by taking a deed to the property in his own name instead of the corporation, and refused to convey it to the company, although requested by it so to do. Thereafter a receiver was appointed to take charge of the assets of this company, and said receiver instituted this action in March, 1914, alleging in his petition the facts as outlined above, and tendering to the plaintiff in error the amount of money expended by him and praying that the company be adjudged the owner of the equitable title, and that the plaintiff in error as the holder of the legal title, be declared a trustee for said company, and that he be compelled to convey the same to the company. The answer of the plaintiff in error consisted of a general denial."

¶2 The foregoing quotation is from said ...