Wolfe v. Bass Furn. & Carpet Co., Case Number: 18909

Citation3 P.2d 895,152 Okla. 125,1930 OK 599
Decision Date23 December 1930
Docket NumberCase Number: 18909,Case Number: 18921
PartiesWOLFE v. BASS FURN. & CARPET CO. BASS FURN. & CARPET CO. v. WOLFE.
CourtSupreme Court of Oklahoma
Syllabus

¶0 1. Attorney and Client--Trust Relation--Interests Acquired by Attorney in Subject-Matter of Litigation Inures to Benefit of Client.

It is an established rule of law that during the existence of the relationship of attorney and client, the attorney is a trustee of the highest order for his client in the cause or subject-matter of the litigation in which he is employed, and that the accrual of any benefits from any transaction made by him in his trust character affecting the rights of his client in the subject-matter of the litigation inures to the benefit of the client.

2. Same--Trust in Favor of Client not Governed by Statute of Frauds, Uses and Trusts.

In a transaction between an attorney and his client concerning the disposal of the client's interest in realty acquired in the due course of litigation conducted by the attorney, whereunder the property is conveyed to the attorney for disposal by him for his client's benefit, a trust in favor of the client in the property thus transferred arises by operation of law by virtue of the fiduciary relationship, and is not governed by the statute of frauds and other provisions of the law of uses and trusts which require that a trust in realty be evidenced by a written instrument.

3. Same--Interests in Property Purchased by Attorney at Partition Sale not Held in Trust for Client Where Client Had Declined to Buy.

Where, in an action of partition, as a means of convenient disposition, an attorney elected to take the whole estate for his client at the appraised value thereof, and, after confirmation of such election by judgment of the court, the attorney advised his client to complete the purchase of the interest of the client's coparceners, and the client refused to do so, whereupon the attorney, with the knowledge and consent of his client, purchased such interests himself, he did not hold the title thereto in trust for his client.

4. Appeal and Error--Review--Sufficiency of Evidence in Equity Case.

In cases of purely equitable cognizance, when the findings and judgment of the court are not against the clear weight of the evidence, the same will not be disturbed on appeal because of alleged insufficiency of the evidence.

5. Same--Judgment Sustained.

Record examined, and held, that the findings and judgment of the court are not against the clear weight of the evidence.

Commissioners' Opinion, Division No. 1.

Error from District Court, Seminole County; Geo. C. Crump, Judge.

Action by the Bass Furniture & Carpet Company against C. Dale Wolfe to establish a trust in realty. From a judgment awarding both parties an interest in the property, both appeal. Modified and affirmed.

Rainey, Flynn, Green & Anderson, Pryor & Stokes, B. F. Davis, J. A. Patterson, and C. Dale Wolfe, for plaintiff in error.

Wilson & Wilson, Huggins & Huser, and Blakeney & Ambrister, for defendant in error.

TEEHEE, C.

¶1 In the trial court the parties to this cause occupied the reverse of their positions here. We will so treat them in this court.

¶2 On March 5, 1926, plaintiff, the Bass Furniture & Carpet Company, a corporation, brought suit against defendant, C. Dale Wolfe, to establish a trust in its favor in a certain 40-acre tract of land situated in Seminole county, to declare defendant, in whose name the title of record appeared, as the trustee thereof, to terminate the trust, to quiet its title, and for possession of the property, and for an accounting of the rents and profits derived from the property by the trustee for the time of his possession.

¶3 By its amended petition filed on June 1, 1926, plaintiff alleged the creation of the trust through the relationship of attorney and client between the parties in certain litigation wherein the defendant was employed as its attorney through plaintiff's general attorneys, Wilson, Tomerlin & Buckholts, and in the course of the litigation became the holder of the legal title to the lands involved for the use and benefit of plaintiff who was the equitable owner thereof.

¶4 Plaintiff's allegations of fact were under two causes of action. In the first, the facts alleged, in substance, were, to wit:

Plaintiff, in 1912, for merchandise sold to one George F. Killingsworth, took his promissory notes aggregating $ 500, and in security thereof the promisor gave to plaintiff a real estate mortgage upon an undivided 1/3 interest in and to the N.W. 1/4 of N.E. 1/4 of section 23, twp. 9 north, range 6 east, situated in Seminole county, state of Oklahoma, containing 40 acres more or less. The lands were a part of Seminole Indian lands allotted to one Judie Rentie, deceased, and the mortgaged interest therein was acquired by the mortgagor from one of the heirs of the estate.

¶5 Thereafter other heirs brought suit to declare the deed whereunder mortgagor acquired his interest to be a mortgage. Plaintiff intervened by defendant as its attorney, and set up its mortgage, and alleged that it was an innocent party in respect to the transaction between the mortgagor and his grantor, and sought foreclosure of its mortgage. Plaintiff's plea was sustained and the mortgage foreclosed, and the interest thereby represented in the property was ordered to be sold in satisfaction of plaintiff's judgment, which was for the principal amount of the mortgage indebtedness of $ 500, and $ 212.48, as accrued interest, and which judgment carried with it $ 30 as attorneys' fee, and for plaintiff's costs. At the foreclosure sale, plaintiff, by its bid of $ 300, acquired the undivided 1/3 interest in the property, which was evidenced by a sheriff's deed dated January 9, 1917.

¶6 Thereafter, on March 21, 1917, for the purpose of converting plaintiff's 1/3 interest in the property into cash, which defendant, as its attorney, then indicated could be sold for $ 200, and that thereby an action for the partition of the property among the several coparceners thereof would be avoided, and that such sale would likely be more advantageous to his client, requested that plaintiff execute a quitclaim deed to its interest in blank, which he would fill in with the name of the grantee upon sale thereof. This deed was executed by plaintiff on March 24, 1917, and contrary to the purpose thereof, defendant filled in the blank with his own name as grantee, and without consideration to plaintiff therefor and without its authority placed such deed on record.

¶7 Thereafter, on July 14, 1917, plaintiff's general attorneys made inquiry of defendant as to the status of the sale of plaintiff's 1/3 interest in the property for the purpose of which the quitclaim deed was executed by plaintiff. Therein, defendant, on July 20, 1917, advised plaintiff of his failure to make the sale, and that the partition sought to be avoided would be proceeded with, and that plaintiff would be advised in the further progress of that cause.

¶8 Thereafter, through the partition proceedings, plaintiff, at the election of its attorney, the defendant, made on its behalf by him, purchased the other outstanding undivided 2/3 interest in the property, the value of the whole estate being fixed by appraisement at $ 800, this being the basis of the purchase price, which was evidenced by a sheriff's deed dated March 2, 1918.

¶9 Thereafter, on March 18, 1918, to enable him to handle plaintiff's interest thus acquired in such manner, so as to obtain "money out of the same at the earliest possible time, which will be much sooner than it otherwise can be obtained," defendant requested plaintiff to execute and place in his hands its warranty deed in blank covering the whole title to the property, to which request plaintiff's general attorneys, on March 22, 1918, replied and advised defendant of the sufficiency of the quitclaim deed for that purpose theretofore executed by plaintiff, which was then in the possession of defendant.

¶10 Thereafter, on March 23, 1918, defendant renewed his request and stated the reasons therefor, to wit:

"We have yours of the 22nd, and in reply I especially desire the warranty deed requested of client, the Bass Furniture & Carpet Company, so that the claim of title looks proper, and so that the proper amount may be obtained for the property. I cannot see that any additional liability would be assumed by client in doing this, as their title is protected by a decree of court which we obtained in the partition suit.
"The partition suit was in the name of client, as plaintiff, against all other claimants, to an interest in the land, and we elected, in the name of client, to take the land at the appraisement, and thereupon we obtained from the court a decree vesting the whole title in client, and directing the sheriff to make a deed to the whole to client, upon the payment of the other interests proportionally. This is the reason I ask for the deed from client, as requested, for upon receiving the same I can then obtain the sheriff's deed and will pay out the proportionate interest, and the title will then inure to me under the deed from client, as requested. This will perfect the title in me, and I will be able then to dispose of the land for which it is worth and get client's share of the money out of the same at the earliest time."

¶11 Pursuant to this latter request, plaintiff, on April 27, 1918, executed the warranty deed to defendant, which was placed of record by him on April 30, 1918.

¶12 Plaintiff's petition further proceeded, to. wit:

"6. That the said C. Dale Wolfe, as the trustee and legal owner of the one-third undivided interest, holding for the use and benefit of this plaintiff for purposes of sale as set forth in plaintiff's 'Exhibit A' (the sheriff's deed in the mortgage case) and conveyed to the said C. Dale Wolfe by plaintiff's 'Exhibit D' hereto (plaintiff's quitclaim deed) has not sold said
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