Templeton v. Hollinshead

• Decision Date: 23 November 1926
• Parties: TEMPLETON v. HOLLINSHEAD ET AL.
• Court: Oregon Supreme Court

250 P. 747

119 Or. 620

TEMPLETON v. HOLLINSHEAD ET AL.

Supreme Court of Oregon

November 23, 1926

Department 2.

Appeal from Circuit Court, Deschutes County; T. E. J. Duffy, Judge.

Suit by Susana M. Findley Templeton, by Charles Findley, her guardian, against W. H. Hollinshead and others. Judgment for plaintiff, and defendants appeal. Affirmed.

H. H. De Armond, of Bend (Ross Farnham, of Bend, on the brief), for appellants.

J. H Upton, of Bend, for respondent.

BROWN J.

Charles Findley, as guardian of his mother, Susana M. Findley Templeton, instituted suit against her brother, W. H Hollinshead, and his three sons, W. C., Cecil G., and Dean Hollinshead, charging them with acting together, in pursuance of a fraudulent scheme, to wrong and cheat her out of her property. The plaintiff prayed for an accounting and for other equitable relief. Based upon the evidence adduced by the respective parties, the court ordered that the plaintiff recover judgment against defendant W. H. Hollinshead, the brother, and against W. C. Hollinshead, one of the sons, for $1,742.59; that certain property embracing a store building and a stock of goods belonging to W. C. Hollinshead be impressed with a trust, in favor of the plaintiff; and that certain mortgages made and executed by W. C. Hollinshead to his father, W. H. Hollinshead, for the purpose of securing a promissory note for the sum of $5,000, be likewise impressed with a trust, in favor of plaintiff, as security for the payment of the judgment of $1,742.59. The suit was ordered dismissed as to Cecil G. and Dean Hollinshead. The defendants, appealing to this court, assert that the trial court erred in not granting defendants' motion to dismiss the suit at the close of plaintiff's case in chief, in rendering any judgment or decree against defendant W. H. Hollinshead, and in making the judgment and decree a lien.

At the time of the trial of this cause, Mrs. Susana M. Findley Templeton was about 69 years of age, weak in body and mind. In 1914, her first husband died at Marcola, Lane county Ore., where they had been conducting a store. Soon after his death, she disposed of her stock of goods and banked the money. Later, she married one Templeton, now deceased. In 1921, while at Marcola, she became very ill and her brother, W. H. Hollinshead, then residing at La Pine, central Oregon, came to her assistance. He advised her to turn all of her property, real and personal, into money, and to take up her residence with him. For nearly two years she dwelt with the brother, paying him therefor $1 per day and performing all of the household duties except that of preparing breakfast for the family. The testimony shows, as found by the trial court, that she had unlimited confidence in her brother and in his sons. Prior to moving to La Pine to reside with her brother, she had loaned various sums of money to W. C. and Cecil G. Hollinshead, two of the sons, which they used in buying motor trucks. These loans were secured by mortgage on the trucks, but they were never paid, and the trucks have long been worn out and rendered useless. In 1922, W. C. Hollinshead, with the assistance of his father, succeeded in borrowing the additional $1,700 for which judgment was rendered in the court below. The testimony shows that, at the time she made these loans, aggregating something over $1,700, the plaintiff's ward was incapable of managing her affairs, and that she relied and acted upon the advice of her brother, who promised and agreed, in consideration of her making such loans, that he would see that the sums so loaned were repaid. There is testimony to the effect that he had theretofore taken from his son, W. C. Hollinshead, a mortgage in the sum of $5,000 for the purpose of securing a note in that amount executed by the son to him. This mortgage he delivered unrecorded, to his sister, and told her that he was giving it to her as security for her loan to W. C. Hollinshead, the son. Later, he procured another mortgage on the same property from his son to secure the same note, which mortgage he caused to be recorded.

About the time that Mrs. Templeton had loaned to her brother and his sons all the money she possessed, her son came to pay her a visit and see how she was getting along. On learning of the condition of her affairs and having been told by her that she couldn't get any of her money back--that the boys wouldn't do anything about it--and that she needed somebody to help her, he petitioned the county court and was duly appointed guardian. He then proceeded to try to get her debtors to pay. Failing in that, he brought this suit.

For the purpose of releasing Mrs. Templeton's brother from the obligation of his promise to her to pay the debt of his son, the defendants invoke section 808, subdivision 2, Oregon Laws, which provides that an agreement to answer for the debt, default, or miscarriage of another is void unless the same or some note, or memorandum thereof, expressing the consideration, be in writing. The statute of frauds has no application to cases where the law raises a constructive trust by reason of the fraudulent acts of the person receiving property. Parrish v. Parrish, 33 Or. 486, 54 P. 352; 26 R. C. L. 1233; 3 Jones. Commentaries on Evidence, § 425; 1 Abbott's Trial Evidence (3d Ed.) p. 648; Bogert on Trusts, p. 118.

"The statute of frauds has no application to constructive trusts. They are created by equity, regardless of whether the evidence on which they are based is oral or written, whether the property involved is real or personal." Bogert on Trusts, § 36.

The following much-quoted section from Pomeroy's Equity, relating to the establishment of constructive trusts, is pertinent:

"In general, whenever the legal right to property, real

...