Preston v. Ross

• Decision Date: 07 June 1949
• Docket Number: Case Number: 33253
• Parties: PRESTON v. ROSS
• Court: Oklahoma Supreme Court

1949 OK 130

207 P.2d 297

201 Okla. 455

PRESTON v. ROSS

Case Number: 33253

Supreme Court of Oklahoma

Decided: June 7, 1949

Syllabus

¶0 1. TRUSTS - One occupying a confidential and fiduciary relationship with another may be declared a constructive trustee.

One who, while occupying a confidential and fiduciary relationship with another, takes title to real estate in his own name in violation of his agreement, express or implied, not to do so, may be declared a constructive trustee of the realty so acquired and required to account for all rents and profits therefrom of every character.

2. APPEAL AND ERROR - Sufficiency of evidence in equity case.

In a case of purely equitable cognizance the findings and judgment of the trial court will not be disturbed by this court unless clearly against the weight of evidence.

Appeal from District Court, Logan County; Henry W. Hoel, Judge.

Action by R.S. Ross and C.M. Ross against W.A. Preston to establish a trust in real property. Judgment for plaintiffs, and defendant appeals. Affirmed.

L.D. Hoyt and Leon C. Phillips, both of Oklahoma City, for plaintiff in error.

Hall & Cotten, of Oklahoma City, for defendants in error.

ARNOLD, V. C. J.

¶1 Action by R.S. Ross and C.M. Ross, husband and wife, against W.A. Preston to establish a trust in real property and for an accounting of rents and profits. Judgment for plaintiffs, and defendant appeals.

¶2 The essential substance of the allegations are that in July, 1942, plaintiffs and defendant entered into an oral agreement to acquire jointly, if the price was right, title to 160 acres of land in Logan county, Okla., described as the southeast quarter of section 23, township 17 north, range 4 west, referred to by the parties as the Stiles Farm; that it was agreed between the parties that plaintiffs should furnish the expense money required in any negotiations leading to the purchase and that defendant should conduct the negotiations, and if the purchase were made the purchase price should be borne equally by plaintiffs and defendant, plaintiffs to have an undivided one-half interest and defendant the remaining one-half interest; that in pursuance of this agreement plaintiffs furnished to defendant from time to time, when requested, cash and checks in excess of $400 to be applied on defendant's expenses in conducting the negotiations, and in clearing title to the land; that it was thereafter ascertained that the fee simple to this land could be acquired for $6,000; that circumstances in reference to the ownership of the land developed which caused long delays in clearing the title and obtaining a conveyance thereof; that in May, 1944, defendant, by telephone, advised plaintiffs that he could only obtain 80 acres of the royalty and that the same would cost $50 per acre, and requested plaintiffs to send him a cashier's check for $2,000 if they wanted their half of this 80 acres royalty; that having confidence in the defendant and relying upon these statements made by him, plaintiffs advised defendant that they would want their share of the royalty and on the same day sent him a cashier's check for $2,000 which he endorsed and cashed, and thereafter, on May 29, 1944, executed and delivered to plaintiffs a mineral deed to 40 acres of royalty under this 160 acres; that in truth and in fact defendant had already acquired the full legal title to the 160 acres when he made this representation to plaintiffs and that the same was made wrongfully and fraudulently for the purpose of misleading and deceiving plaintiffs as to the extent of their interest in the property so acquired; that when plaintiffs learned the true facts they made demand upon defendant for a conveyance to them of an undivided one-half interest in the 160 acres as originally agreed upon between the parties, but that defendant has failed and refused to make the conveyance; that defendant has sold various royalty interests in said 160 acres of land to various persons, receiving large sums of money therefor, and that plaintiffs are entitled to have a trust established in their favor for an undivided one-half interest in said 160 acres and for an accounting by defendant of the monies, rents, and profits received by him from said land since he acquired title thereto and for an accounting of the proceeds of the sales of royalty thereunder made by him to other persons.

¶3 Defendant answered by general denial and specifically denied any oral agreement between the parties for the joint purchase of the property by them and pleaded the statute of frauds and the statute of limitations in bar of plaintiffs' action.

¶4 For reversal of the judgment defendant relies upon three propositions thus stated in his brief:

"(I) Plaintiffs cannot recover on the theory that this was a constructive trust because such trusts do not arise by agreement;

"(II) Plaintiffs cannot recover on the theory that this was a resulting trust because they paid no part of the consideration;

"(III) Plaintiffs cannot recover on the theory that this was an express trust because (1) An agreement creating an express trust must be in writing under the Statute of Frauds; (2) The agreement did not contemplate an express trust as the title was to be taken in the names of plaintiffs and defendant, and not in the name of defendant; so that no trust was contemplated."

¶5 By way of counterproposition plaintiffs rely upon the following statement:

"The evidence conclusively establishes an equitable trust, ordinarily called an implied trust, a trust imposed upon the unwilling title holder by operation of the law, and which we believe, under this evidence, to be a constructive trust."

¶6 In cases of purely equitable cognizance dependent primarily upon the facts and circumstances in evidence, the findings and judgment of the trial court will not ordinarily be disturbed by this court unless clearly against the weight of the evidence. The case at bar is such a case.

¶7 Another rule announced and consistently adhered to by this court is that equity having once attached in a proper proceeding will administer complete relief on all questions properly raised by the evidence, regardless of whether or not such questions or issues are specifically raised by the pleadings.

¶8 It appears from the testimony preserved in this record that the transactions between the parties involved in the instant case are merely one group of transactions similar to numerous others between the same parties extending over a number of years, beginning in 1942 or prior thereto. The other transactions are identified by defendant in his testimony as the "Wild-Cat Deal", the "McKenzie Deal", the "Williams Deal", and the "Gamble Deal". These are mentioned here because the defendant while testifying stated that none of the transactions between these parties in these various deals were evidenced by written contracts or agreements but were always oral. This removes any idea that the transaction involved in the instant case, which is the "Stiles Farm Deal", was unusual in the fact that no written contract or agreement was entered into by or between the parties as to the "Stiles Farm Deal", but that the relations of the parties in this instance were the same as those which existed between them in reference to all the other transactions named by the defendant.

¶9 R.S. Ross and C.M. Ross are husband and wife, and in 1942 Mrs. Ross accompanied the defendant and his wife on a trip through the oil fields in the western part of Logan county, and on this trip, according to her testimony, they learned that 160 acres, known as the Stiles Farm, was not under lease and Mrs. Ross suggested to Preston that they should purchase this 160 acres if the price was right. Subsequently it was learned that the title to this 160 acres was vested in a Mrs. Stiles living in Wichita, Kan., and a telegram was sent to her by the defendant asking if the property was for sale and the price. Subsequent to sending this telegram, defendant was at the home of the...