O'Shea v. O'Shea
| Decision Date | 29 October 1943 |
| Docket Number | 31588. |
| Parties | O'SHEA v. O'SHEA et al. |
| Court | Nebraska Supreme Court |
Syllabus by the Court.
1. By the express provisions of section 36-104, Comp.St.1929 trusts arising by implication or by operation of law are excepted from the operation of the statute of frauds.
2. Both resulting and constructive trusts fall within the exception of section 36-104, supra.
3. If a party obtains the legal title to property by virtue of a confidential relation, under such circumstances that he ought not, according to the rules of equity and good conscience as administered in chancery, hold and enjoy the benefits; out of such circumstances or relations, a court of equity will raise a trust by construction and fasten it upon the conscience of the offending party and convert him into a trustee of the legal title.
4. The violation by the grantee of a promise to reconvey is constructively fraudulent and gives rise to a constructive trust, which may be established by parol, if he obtains an absolute deed without consideration, by means of a parol agreement to reconvey to the grantor to whom he stands in the confidential relation, even where there be no intention at the time not to perform the promise.
5. A decree establishing a constructive trust should not be limited to a cancelation of the conveyance whereby the constructive trustee acquired title to the land; the trust should be ascertained and enforced.
6. A constructive trust is a relationship with respect to property subjecting the person by whom the title to the property is held to an equitable duty to convey it to another on the ground that his acquisition or retention of the property is wrongful and that he would be unjustly enriched if he were permitted to retain the property.
7. Where the owner of an interest in land transfers it inter vivos to another in trust for the transferor, but no memorandum properly evidencing the intention to create a trust is signed, and the transferee refuses to perform the trust, the transferee holds the interest upon a constructive trust for the transferor, if (a) the transfer was procured by fraud, duress, undue influence or mistake, or (b) the transferee at the time of the transfer was in a confidential relation to the transferor.
8. Under our code the chancery practice has been so enlarged that an answer in the nature of a cross-petition may properly seek affirmative relief beyond that which is merely defensive, and such relief sought need not necessarily be based on equitable grounds if germane to the original action.
9. The matters set up in the cross-petition must be germane to the original suit.
10. New and distinct matter, not maintainable under the provisions of the code as to counterclaims, and not involved in a proper determination of the subject-matter of the original suit, must be litigated in a separate action.
11. When it is said that a court of equity will administer complete relief and adjudicate all controversies between the parties, the meaning is that a complete decree will be rendered with reference to the immediate subject-matter of the original suit. The subject-matter of that suit will not be dealt with piecemeal. It is not meant that all causes of action between the parties, or some of them, will be disposed of in the one cause where they are not involved in a complete disposition of the subject-matter of the bill.
F M. Deutsch, of Norfolk, Marion B. Foster, of Madison, Fay H Pollock, of Stanton, Cline, Williams & Wright, of Lincoln, for appellants.
Moyer & Moyer, of Madison, and R. J. Shurtleff, of Norfolk, for appellee.
Heard before SIMMONS, C. J., PAINE, CARTER, YEAGER, and CHAPPELL, JJ., and LIGHTNER, District Judge.
The plaintiff seeks here by petition in equity to quiet title in him to some 400 acres of land in Madison county, Nebraska. The defendant prayed that the title be quieted in him. The defendant by cross-petition sought a money judgment upon a promissory note. The trial court quieted title to the land in the defendant and awarded the defendant a judgment against the plaintiff on the note. Plaintiff appeals. We reverse the judgment of the district court and remand the cause with directions to quiet title to the land in the plaintiff, direct an accounting for rents and profits; set aside the money judgment; and direct that the motion to strike the cross-petition be sustained.
As a preliminary fact statement it may be said that the plaintiff John J. O'Shea and the defendant Edward O'Shea are brothers and Ella O'Shea mentioned herein was their sister. They are generally referred to in the record by their first names and for clarity that plan will be followed in this opinion. The transcript of the pleadings consists of 150 pages. The summary of the pleadings is here made in order that the general situation may be presented and is not a complete and full analysis of all allegations made.
Plaintiff, by petition (later amended) filed July 5, 1940, alleged that he was the owner of some 400 acres of land in Madison county, Nebraska, which he conveyed to his sister Ella O'Shea in 1904 under an oral understanding that she was to hold title to the same, that she was to have the use and benefit of it during her lifetime, subject to the understanding that if he, the plaintiff, or plaintiff's wife, became in need that they were to have support from the land and that if he, the plaintiff, survived his sister Ella, that Ella was to devise the land to the plaintiff, but that if Ella survived the plaintiff she was to become the owner of the land; that thereafter in 1913 Ella made a will devising said land to the plaintiff, that Ella died in 1938, that her will was admitted to probate, that the probate of her estate had been completed with all claims paid; that plaintiff was the owner of the land; that the defendant Edward O'Shea claimed ownership by virtue of a deed from Ella to him in 1935. Plaintiff prayed that the title to said premises be quieted in him and for an accounting for rents and profits. Defendant, Edward, O'Shea, by answer and cross-petition, alleged that Ella became the owner of the land by virtue of the 1904 deed; alleged his ownership of the land by virtue of the 1935 deed; that when he received the conveyance he had no knowledge of the alleged verbal agreement between the plaintiff and Ella O'Shea, that Ella at all times exercised all rights as owner of the premises and that plaintiff is estopped to deny her title; that the alleged oral agreement was void by virtue of the statute of frauds; that subsequent to the probate of Ella's will he had, on demand of the plaintiff, conveyed other lands, claimed by him, to plaintiff, that said conveyances constituted a settlement and that plaintiff was estopped to claim the land in question.
Defendant further, by cross-petition, alleged the execution and delivery to him by plaintiff of a promissory note for $18,641.64 representing money loaned to plaintiff at different times by Edward and Ella; that he had on June 14, 1940, filed his petition to recover judgment at law on the note, without knowledge of plaintiff's claim as set out in his petition; that John had answered in that action alleging that the debt to Ella was to have been surrendered on her death. Defendant alleged that the title to said notes and to the real estate should be quieted in him. Defendant prayed that the court in equity take jurisdiction of all issues pleaded; that the title to the real estate and note be quieted in him; and for an accounting and judgment on the note.
The matter came on for hearing, on motion to strike the allegations of the cross-petition with reference to the note, before the late judge of the district court, Charles H. Stewart, and he ordered that part of the cross-petition stricken.
Plaintiff then by reply alleged that the defendant knew the terms and conditions under which the conveyance was made to and title held by Ella O'Shea; that defendant was not a bona fide purchaser for value without notice.
Defendant then filed a motion to consolidate his action on the note with plaintiff's action. This motion was denied.
The matter then went to trial before Judge Stewart in March, 1941, and was taken under advisement by him. Before a decision was announced Judge Stewart died. The matter was then presented to Judge Wenke, then a district judge of that district, on a renewed motion to consolidate, which Judge Wenke denied. After more preliminary motions the matter went to trial before Judge Wenke in June, 1942, resulting in his sustaining a motion for a mistrial and ordering a retrial. Thereafter the defendant filed his motion for leave to file an amended and supplemental answer and cross-petition and a motion to consolidate the two actions. These motions then came on for hearing before Judge Jackson, a judge of that district, and were by him granted. The plaintiff then demanded a jury trial on the issues presented by the action upon the note and that demand was then and subsequently denied.
In the meantime a transcript of the evidence produced before Judge Stewart, consisting of over 1,000 pages, had been made and it was stipulated that that transcript should be considered at the new trial together with whatever additional evidence might be offered by the parties and received by the court.
Plaintiff moved to vacate the order of consolidation, to vacate the order permitting the filing of the amended answer and cross-petition, and to vacate the order denying a jury trial on the note. These motions were again denied. Plaintiff then replied to the amended answer and cross-petition, setting out an extended statement of alleged facts both with reference to the deed and the note. To the answer as to the...
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