Woolsey v. Trimble

• Citation: 18 F.2d 908
• Decision Date: 11 April 1927
• Docket Number: No. 4741.,4741.
• Parties: WOOLSEY v. TRIMBLE.
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

18 F.2d 908 (1927)

WOOLSEY v. TRIMBLE.

No. 4741.

Circuit Court of Appeals, Sixth Circuit.

April 11, 1927.

James M. Barrie, of Cincinnati, Ohio (Clore, Schwab & McCaslin, of Cincinnati, Ohio, on the brief), for plaintiff in error.

Herbert Shaffer, of Cincinnati, Ohio (Waite, Schindel & Bayless, of Cincinnati, Ohio, on the brief), for defendants in error.

Before DONAHUE and MOORMAN, Circuit Judges, and WESTENHAVER, District Judge.

WESTENHAVER, District Judge.

Plaintiff in error, also plaintiff below, sued at law upon a written instrument reading as follows:

"May 29, 1899.

"Received this day $10,000 (ten thousand dollars) from Kate T. Woolsey, trustee, to be invested in syndicate shrs. of the `Old Kentucky mine' situated in Placer Co., Cal., of which E. L. Ford is now president. In case of my death, this money is to be returned to K. T. Woolsey, trustee, immediately. This will entitle K. T. W. to 18,000 shrs. of the mining stock in above mine.

"Signed R. J. Trimble."

R. J. Trimble died June 14, 1924. This action was begun July 30, 1925. The amended petition alleges that Trimble died before he had invested the money in syndicate shares of the Old Kentucky mine; that no such company or corporation was ever organized or existed; that no stock or shares therein were ever issued, nor was any such stock or shares ever delivered to the plaintiff; and that the money had never been repaid. The only demand alleged is one made upon defendant after the death of said Trimble. No other facts are stated to bring the cause of action within any of the exceptions to the statute of limitations, or to repel the common-law presumption of payment.

Defendant demurred to the petition, which demurrer was sustained, on the ground that the statutes of limitation barred the action. A second amended petition was tendered, declaring on the same written contract, but averring that the contract required that the $10,000 should be repaid at Trimble's death. Opportunity was offered plaintiff to show by affidavits or otherwise that some contract existed, other than the one originally declared on, and, in default of such showing, the second amended petition was stricken from the files. Final judgment in defendants' favor was thereupon rendered.

Although the order striking the second amended petition from the files is assigned as error, the case was presented in this court solely upon the question whether the statute of limitations was applicable. It was not suggested that any other facts existed, not pleaded or stated, bearing upon this question. In view of the concessions implied from this attitude, we deem it within our province to consider and dispose of the question as presented, without giving attention to technical questions of practice. See Reading Steel Castings Co. v. United States, 268 U. S. 186, 188, 45 S. Ct. 469, 69 L. Ed. 907.

The action being at law, the Ohio practice should be followed. It is settled in that state that the defense of the statute of limitations may be raised by demurrer. If the cause of action stated is apparently barred, it is incumbent upon the plaintiff to state such additional facts, if any existed, as will obviate the bar or bring the plaintiff within any of the exceptions which toll the running of the statute. 2 Bates, New Pleading, p. 2050; Zuellig v. Hemerlie, 60 Ohio St. 27, 53 N. E. 447, 71 Am. St. Rep. 707.

The distinction between actions at law and suits in equity having been abolished in Ohio, the Ohio statute of limitations applies uniformly to all causes of action. Section 11218, G. C. The sections pertinent to the present case are 11236 and 11221. The first is, in substance, that no provisions of the statute of limitations shall apply "in the case of a continuing and subsisting trust." The second provides that an action upon "an agreement, contract or promise in writing shall be brought within fifteen years after the cause thereof accrued." Under the first, the question is whether a continuing and subsisting trust is shown by the facts pleaded. Under the second, the question is when the cause of action upon the facts stated, may be held to have accrued. Both inquiries require an exact understanding of the contract and cause of action set forth and pleaded.

The written instrument is in form a receipt for $10,000. The money was delivered and received to be invested in syndicate shares of a described mine. Plaintiff was to get in return for the money so delivered 18,000 shares of stock in said mine. An obligation was imposed upon Trimble to apply the money to the designated purpose and to account for and deliver the shares. If the investment was made, the property in the shares would be in plaintiff. Until so invested, the money was in Trimble's hands as an agent or depositary, with power only to use and apply it for a specific purpose. If and whenever the syndicate shares were bought and the mining stock delivered, his contract obligation would be fully performed. Obviously it was not contemplated that plaintiff might thereafter return the shares of stock and have back her money. If this were true, she might even receive dividends on the shares, and sell and dispose of them, and pocket the proceeds, and still have back her money. It is this construction of the contract which was adopted in the second amended petition. As the foregoing were the dominant characteristics of the transaction and relationship, that construction cannot be controlled by the words "in case of my death." Obviously these words were intended to provide for some kind of contingency, and not to fix a time at which the plaintiff might unconditionally get back her money. In our view, the contingency so provided for was the death of Trimble before he had executed his agency or commission. If he had died before executing his commission, his power as agent or trustee would have been revoked by operation of law. An agency not coupled with an interest in the agent, or a trusteeship not vesting a fixed interest in some third person, is revocable by death or at the will of the principal before performance. These words were evidently meant to set forth this right, and are not to be given any greater force and effect.

Our conclusions are that the relationship created was essentially that of principal and agent, with a limited power in the agent; that the agent's power consisted only in the right and duty to invest money in shares of stock in a designated mine; that this authority would be revoked in the event of death before performance and might have been revoked in the meantime by the principal; that, in the event of death or revocation before performance, the principal was entitled to have back the money, but that upon due performance, certainly by the delivery of the shares of stock, and probably by due notice of their purchase, the agent's obligations were fully performed, and he was not otherwise answerable under this agreement. This construction of the contract is not only the one adopted by the learned District Judge, but was also adopted in another suit on the same contract, by Hon. A. M. J. Cochran, District Judge of the Eastern District of Kentucky.

Consequently the answer to the inquiries propounded is, we think, to be found in the domain of the law pertaining to the reciprocal rights and obligations of principal and a special agent for a designated purpose with limited power. That a continuing and subsisting trust is not to be found in the facts stated is fully established by authority. In Douglass v. Corry, 46 Ohio St. 349, 21 N. E. 440, 15 Am. St. Rep. 604, involving a transaction between attorney and client, it is said (page 351 21 N. E. 441): "The first claim is that, the relation of attorney and client being a confidential one, the duty imposed by the relation on the attorney gives rise to a continuing and subsisting trust in favor of the client, and is not within the statute. That there are such trusts is well recognized; but it is equally well settled that trusts of this character are those technical and continuing trusts which are not recognized at law, but fall within the proper, peculiar and exclusive jurisdiction of a court of equity. This was decided in Kane v. Bloodgood, 7 Johns. Ch. N. Y. 110 11 Am. Dec. 417, after a most elaborate examination of the authorities by Chancellor Kent, and the rule as there stated has generally been followed in this country." It is further said that the statutory language in question is simply an incorporation of this rule. See, to the same effect, Yearly v. Long, 40 Ohio St. 27; Gray v. Kerr, 46 Ohio St. 652, 23 N. E. 136; Webster v. Bible Society, 50 Ohio St. 1, 33 N. E. 297; Townsend v. Eichelberger, 51 Ohio St. 213, 38 N. E. 207. Furthermore, in Kershaw v. Snowden, 36 Ohio St. 181, the facts were that Kershaw had placed with Snowden large sums of money, averred to be on an express trust to retain the same in trust for Snowden until her death, and then to execute the express trust by returning the money to Snowden. It was held that the transaction did not create a subsisting and continuing trust, but merely the relation of debtor and creditor.

Inasmuch as the statutory language is said by the Supreme Court of Ohio to embody merely the rule of Kane v. Bloodgood, supra, we quote the statements there made as to what continuing and subsisting trusts are without the statute. In the headnote it is said: "As long as there is a continuing and subsisting trust, acknowledged or acted on by the parties, the statute does not apply; but if the trustee denies the right of his cestui que trust, and the possession of the property becomes adverse, lapse of time, from that period, may constitute a bar in equity; but other trusts, which are the ground of an action at law, are not exempted from the operation of the statute." At page 110, Chancellor Kent points out in detail the various kinds of trusts which are subject to the bar of the statute and are not to be regarded as...