Walters v. Christensen

• Decision Date: 23 September 1937
• Docket Number: 26562.
• Citation: 191 Wash. 602,71 P.2d 664
• Parties: WALTERS v. CHRISTENSEN et al.
• Court: Washington Supreme Court

71 P.2d 664

191 Wash. 602

WALTERS v. CHRISTENSEN et al.

No. 26562.

Supreme Court of Washington

September 23, 1937

Department 1.

Appeal from Superior Court, Thurston County; D. F. Wright, Judge.

Action by Eunice Bell Walters, formerly Eunice Bell Gunstone against Flora B. Christensen, formerly Flora B. Gunstone, and others. Judgment for defendants, and plaintiff appeals.

Affirmed.

R. F. Dotsch, of Olympia, for appellant.

Padden & Moriarty and Melvin T. Swanson, all of Seattle, for respondents.

GERAGHTY Justice.

Olive R. Gunstone Died intestate May 22, 1905. She was survived by her husband, John Gunstone, and their daughter, the plaintiff Eunice Bell Walters, born May 22, 1899.

At the time of the wife's death, the Gunstones owned a farm in Thurston county, embracing some 529 acres. This land was community property, having been acquired after marriage. The community also owned some personal property as well as an undivided one-half interest in 1200 acres of timber land. In addition to this, John Gunstone owned, as his separate property, some parcels of real estate acquired Before marriage.

In 1907, Gunstone married his second wife, Flora B. Warren, now Flora B. Christensen, the defendant. She had a son, Charles by a former marriage, who was adopted by John Gunstone. A daughter, Opal, now Opal Kelly, was born of the second marriage.

Gunstone took no steps to probate his deceased wife's will until 1911, when he was appointed administrator, and, shortly thereafter, returned an inventory of the property belonging to the community estate of himself and his deceased wife. The inventory included the land referred to in the record as the home farm, appraised at $6,822; the half interest in the 1200 acres; notes and mortgages, appraised at $3,321.08; and stock, farming equipment, and other items of personal property, appraised at $2,019. Nothing further was done in the probate proceeding.

Shortly after his appointment as administrator, Gunstone was appointed guardian of the person and estate of his daughter Eunice. In August, 1911, he petitioned, as guardian, for authority to sell his daughter's one-fourth interest in the 1200-acre tract. He assigned as the reason for selling the land the fact that it lay several miles distant from the home farm. The petition recited that it was for the best interest of the daughter that the property be sold at private sale, and that it was his purpose to invest her share of the proceeds in real estate mortgages at current rates of interest. Having been authorized by the court to do so, he sold the daughter's interest for $3,750. This sale was duly confirmed by order of the superior court and conveyance made to the purchaser. No further proceeding or accounting was had in the guardianship matter.

Reference is made in the record to a timber deed executed by Gunstone for a consideration of $17,000. It is not entirely clear as to the nature of this transaction or whether the named price was paid. Whatever money, if any, was received for the timber, no accounting was made of the daughter's interest, if she had any.

The daughter continued to live with her father and stepmother until her marriage. She attended school in Olympia until twenty years of age, passing through the primary and high schools and later having some training in a business college. After her marriage, May 23, 1920, to I. B. Walters, she lived for a time in Olympia in a house furnished by her father; later she removed to Hood Canal, where her husband was engaged in a logging operation.

In 1922, while living on Hood Canal, she executed a quitclaim deed conveying to her father all of her interest in the community real estate of her mother. This included the farm as well as some other land. While there was a discrepancy in the description of one forty-acre subdivision of the farm, it is apparent, and the trial court took the view, that the deed was intended to convey the whole of the interest inherited from her mother.

John Gunstone died May 26, 1932. After application had been made by the receiver of the Olympia National Bank, as a creditor of the estate to the extent of $10,000, that J. C. Minshull be appointed administrator in default of an application for appointment by the wife, Mrs. Gunstone made formal application for letters of administration and was appointed, and qualified as administratrix. After her appointment, the administratrix published notice to creditors and filed an inventory in the estate, listing personal property of the value of $1,402.

Shortly Before his death, John Gunstone and his wife, Flora B. Gunstone, conveyed to a corporation, the defendant Brookside Farms, Inc., all of the real estate holdings of John Gunstone, including the farm. Title to the farming equipment was also conveyed to the corporation by bill of sale. The record contains only scant information as to the organization of this corporation, but it is inferable that it was organized by the Gunstones as a family holding company.

February 4, 1933, the widow. Flora B. Gunstone, married Elhard Christensen. A few days thereafter, Eunice Bell Walters, the plaintiff, made demand upon her stepmother for an accounting, and on August 4, 1933, instituted this action.

Two principal causes of action are stated in the complaint. In the first one, the theory of the plaintiff is that the funds belonging to her, and held in trust by her father as guardian, were used by him in his business transactions, extending throughout a long and active life. She did not state precisely what form of relief she sought and, at the outset of the trial, the court granted a motion, interposed by the defendants, requiring her to elect whether she sought an accounting and money judgment or to impress a resulting trust. However, as the trial progressed, this order was disregarded and the court permitted the introduction of all testimony tending to establish a right to any form of equitable relief.

Plaintiff alleged in her second cause of action that the deed to her father, executed in June, 1922, was obtained through fraud and misrepresentation and without knowledge on her part of the purport of the instrument she signed.

A third cause of action stated in the complaint is not urged here or discussed in the briefs.

Admitting the plaintiff's interest in her mother's estate and that, in respect of this interest, the father occupied a trust relation to the daughter, the defendants set up five affirmative defenses: (1) That John Gunstone had accounted to his daughter and discharged the trust in fact, though no formal accounting was ever made in the guardianship proceedings; (2) that accord and settlement had been made between the daughter and father; (3) that plaintiff's claims are outlawed by the statute of limitations; (4) that plaintiff's action is barred for failure to comply with the statute of nonclaim in her father's estate; and (5) laches.

The trial court, without making findings of fact, quieted the title of the defendants to the land and dismissed the plaintiff's action on the ground that she was barred by the statute of limitations, without prejudice, however, to her right to further action in respect of any specific property into the purchase of which she can trace trust funds. The plaintiff appeals.

The appellant first complains of the court's dismissal of her first cause of action as having been made upon the ground that she had failed to trace any of the trust funds into the purchase of specific property. While the court may have held this view, in the brief announcement of its decision it bases its action on the statute of limitations.

The appellant failed to establish a right to relief in respect of her first cause of action, first, because she did not establish the facts necessary to create a resulting trust, and, secondly, because having failed to file a claim against the estate of John Gunstone, she was barred by the statute of nonclaim, if not otherwise barred by the statute of limitations. She became of age in May, 1920. This action was instituted thirteen years thereafter. The courts are divided on the question of the running of the statute of limitations against the claim of a ward in cases of this kind. The English rule, followed by some American courts, seems to be that the trust relation is not affected by the ward's coming of age, while other American courts follow the rule that when the ward becomes of legal age, the relation of debtor and creditor succeeds that of guardian and ward, and that the statute of limitations operates. Sweet v. Lowry, 123 Minn. 13, 142 N.W. 882, 47 L.R.A. (N.S.) 451. But assuming, for the purpose of this case, that John Gunstone remained under a duty to account to his daughter for the trust funds in his possession, the appellant is barred by her failure to file a claim against his estate.

Section 1484, Rem.Rev.Stat., provides: 'No holder of any claim against an estate shall maintain an action thereon, unless the claim shall have been first presented as herein provided.'

Construing this statute, the court said, in Davis v. Shepard, 135 Wash. 124, 237 P. 21, 22, 41 A.L.R. 163: 'Laws of 1917, c. 156, p. 672, § 107 (section 1477, Rem.Comp.Stat.) [P.C. § 9828], provides that--'If a claim be not filed within the time aforesaid [six months after the date of first publication of notice to creditors] it shall be barred.' This statute has been strictly construed and held that it applies to claims of every kind and nature, both those established and those contingent, and under both intervention and nonintervention wills, and that a compliance with the statute is necessary in order for there to be a recovery, and that such compliance cannot be waived by an administrator or executor. Barto v. Stewart, ...