Case ID: sd_40/html/0322-01.html
Source: Caselaw Access Project
Author: {"author": "SMITH, J. GATES, J. WHITING, P. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

STIANSON et al., Respondents, v. STIANSON, Appellant.
    (167 N. W. 237.)
    (File No. 4024.
    Opinion filed April 12, 1918.)
    1. Pleadings — Answer, Trial on Merits, Waiver of Demurrer, By— Buie, Limitation of, re Pacts and Jurisdiction.
    The filing of answer, and trial on merits, after demurrer to complaint, waives the • demurrer and the right of appeal from an adverse decision thereon; hut such waiver does not extend to alleged error .presenting a like question as to • sufficiency of facts, or want of jurisdiction, on a proper record, on appeal from judgment.
    2. Appeals — Error—Theory of Beversal, re Defects in Unamended Pleadings, Trial on Merits — Sufficiency of Pacts, Jurisdiction, When Be viewable — Buie,
    Our system of appellate procedure does not permit of theory or reversal of judgments after trial on merits, for defects in pleadings which might have been remedied by amendment to or on trial. ' But sufficiency or insufficiency of facts proved on trial, or want of jurisdiction of person or subject-matter, apparent from trial record, may always be reviewed upon proper exceptions and assignments of error. Questions of sufficiency, etc., of facts proved, are controlled by rules governing review of findings of fact; while questions raised by demurrer, as to sufficiency of facts pleaded, become immaterial, regardless of .pleadings, to review assignments of error challenging sufficiency of evidence to sustain findings and judgment.
    S. Trusts — Fraud by Coi heir, Co-tenant's Purchase at Mortgage Sale While Administrator — Bents and Profits Accounted for, Effect, re Evidence — Trust Relation, Fraud, When Arising, re Buie — Implied, Not Express Trust.
    Evidence showing that defendant, a co-tenant with other heirs, and who, while administrator of the estate, purchased in his own namef at foreclosure sale, realty of the insolvent estate, for amount due on mortgage, sheriff’s deed on foreclosure issuing to and being recorded by him soon after his discharge, rents and profits from this land having beien accounted for during administration, that he was in open and notorious adverse possession of the land since date of said deed, received rents and profits, and paid taxes, never attempting to conceal his acts or to mislead plaintiffs, co-heirs, in his dealings with them or the property, fails to show acts or conduct by him from which actual fraudulent intent might be inferred; that such purchase as co-tenant was not in itself fraudulent; that the trust relation as to co-tenants would not arise until after he had acquired title through such sale, and fraud in that relation would have its inception only when he intended and attempted "wrongfully to appropriate the interests of co-tenants; his relation thereto as co-tenant, and his relation as administrator, being distinct; nor are consequences flowing from his acquisition of title of co-tenants, • and those flowing from his said purchase, controlled by the same presumptions and rules. Held, further, that the trust arising in either case is not an express, but a constructive or implied, trust.
    4. Trusts — Administrator, Whether Trustee . of Express Trust— Wrongful Acquisition of Title, Resulting Trusteeship — Statutes.
    An administrator, as such, does not become trustee of an express trust as to title to realty of the estate; since title thereto descends to and becomes vested in heirs upon decedent’s death, subject only to payment of creditors, and does not become vested in administrator; as is true also of personalty (Oiv. Code, Sec. 1093); the administrator being vested, not with title, but with certain powers and duties as a trustee; and where, through wrongful act in violation of such duties, he acquires title to either class of property, he holds as trustee of a resulting trust, not as trustee of an express trust; construing Civ. Code, 'Sec. 1616, making him who gains a thing by violation of trust, etc., an. involuntary trustee thereof, etc., and Sec. 1609, defining an involuntary trust as one created by operation of law.
    5. Trusts — Limitation of Action, re Express Trust, Laches — Repudiation of Trust, re Bar of Statute — Results, Intent, Immateriality.
    As to an express trust, the running of statute of limitations, and laches, begins at time when such trust is openly repudiated, or acts are done by trustee which are hostile to, or in fraud of, rights of beneficiaries, and of which they have, actual knowledge, or of facts from which knowledge must be imputed to them. As concerns results flowing from such trust, it is immaterial whether such acts are fraudulent in fact, or be deemed fraudulent in law; the intent being immaterial.
    ©. Trusts — Administrator and Co-heir and Co-tenant, Acquiring Title Under Foreclosure, Adverse Holding, Payment of Taxes— Estoppel of Heirs, Lasches, Bar of Statute Limitations.
    Where an heir of a decedent owner of mortgaged land was made administrator, allowed the mortgage to he foreclosed and purchased at such sale, his title under foreclosure deed being of record for 17 years prior to suit by heirs, held, plaintiffs were estopped by laches to- claim an interest in the land, the action being barred by statute of limitations; defendant having been in adverse possession, .paid taxes, and appropriated rents and profits; that the rule that neither laches nor the statute of limitations may he invoked by trustee, etc., applies only to an express trust; having no application to constructive or involuntary trust, such as devolved on defendant.
    7. Tenancy in Common — Co-tenant’s Right to Purchase Under Foreclosure — Purchase by Co-tenant Administrator.
    Defendant, who was co-tenant with other heirs of an estate, and who was made administrator, had the right, as co-tenant, to purchase realty of the estate under foreclosure sale, for his own (protection.
    8. Evidence — Public Records, as Knowledge of Facts.
    Public records are equivalent to actual knowledge of facts there appearing. So held, as to effect of a recorded foreclosure deed and tax receipts concerning land purchased by a co-tenant under .foreclosure sale while he was administrator; as against co-tenants.
    9. Tenancy, in Common — Acquisition of Title by Co-tenant, Administrator, Against Co-tenants — Diligence by Co-tenants, Necessity of.
    While equity will not permit a co-tenant to acquire an adverse claim to common property through administration proceedings or otherwise, for his own benefit to exclusion of co-tenants, yet the latter must exercise reasonable diligence to participate in benefits of such transaction, and will not he 'Permitted to make such election a means of speculation by delaying until benefit, such as increase of value of land, may result.
    Gates, J., and Whiting, P. J., concurring specially.
    Appeal from Circuit Court, Day County. Hon. Thomas I,. Bouck, Judge.
    Action .by Katherine Stianson and others, against Stian Stianson, to establish- in -defendant a trust in realty. From u judgment for plaintiff, and from an order -denying a new trial, defendant appeals.
    Reversed.
    
      Anderson & Waddell, and H. H. Poiter, for Appellant.
    
      Lewis W. Bicknell, and! Campbell & Walton, for Respondents.
    (3) To point three of the opinion, Appellant cited!: Stevenson v. Boyd, (Cal.), 19 R. R. A., N. S., 525; 11 A. & E. En-c. Raw,. 2d Ed., 1148.
    (4) To point four of the opinion, Respondents cited: De-Ooudhle -v. 'Savetier, 8 Am. Dec. 478; Ruby v. Barnett, 49 Am. Dec. 112.
    (6) To point six of the opinion, Appellant cited: Code Civ. Plroe. S'ec. 60, subd. 6;"Bills v. Mining Co., (Cal.) 39 P’ac. 43; Brod'er et al v. ConMiin, (Cal.) 53 Pac. 699. -
    
      Respondents edited): Bostwiick v. Estate of Dickson (Wis.), 26 N. W. 549; 2 Perry on Trusts,' Sec. -863.; Cock v. Van Eften, 12 Minn. 522; 38 Cyc. 43; MeFhieeters v. Wright (Ind.) 9 L. R. A. 176.
    (8) To point eight of the opinion, Appellant cited: Freeman, oni Go-Teniancy and Partition, Sec. 156; Gnoven v. Craven, (Neb.),'94 N. W., 604-
    (9) To point nine of the opinion, Respondents' cited: 39 Cyc. 298; Rogers v. Rogers, 1 Hiopkinis. Gh. 513-515; 3 Wend. 503 ^affirmed) ; 20 Am. Dec. 716; 1 Perry on Trusts (Fifth Ed.), Sec. 205; Civ. Code. Secs. 1617-23.
   SMITH, J.

Action by plaintiffs, claiming as- c'otenants with defendant, to establish a trust in defendant as to real property, to iqjudet title in plaintiffs., anid! for an 'accounting for rents and profits. Defendant filed a demurrer to the complaint for want oif. facts, which was overruled, .and this ruling is assigned as error. Thereafter defendant answered, and 'the cause was tried .by the aoUrt upon, the merits, resulting adversely' to. defendant. It is settled! in this jurisdiction that the filing- of an answer ■and ¡a trial on the merits after a demurrer waives the demurrer and the right of appeal from an ádVersie decision thereon. Pierson v. Minnehaha Co., 26 S. D. 462, 128 N. W. 616, Ann. Cas. 1913B, 386. This w'aiver, however,' does not extend to am alleged error presenting a like question as to the sufficiency oif facts, or want of jurisdiction upon a proper record on appeal from the judgment. Pierson v. Minnehaha Co., 28 S. D. 534, 134 N. W. 212, 38 L. R. A. (N. S.) 261.

It is) not the theory of our system' of appellate pro'Cedlure toi permit the reversal of judgments after á trial upon, the merits, for defects in pleadings- which might have been remedied by amendment prior to or at the trial. But the sufficiency o>r insufficiency of itihe facts proved at the trial, or wtant of jurisdiction •of ffie person -or subjert:m-aitter) apparent from the tidal record, may'always be reviewed upon .proper exceptions and assignments -of error. Questions as to the sufficiency or -insufficiency of the facts proved' are controlled! by the ■ rules governing the- review of findings of fact -by the trial court. Any questions raised by the demurrer 'as to -the sufficiency toif the -facts pleaded' have- become 'immiaterial, and' are not subject to re-view upon this appeal. But it is proper, regardless of tíre insufficiency of the pleadings, to 'review assignments or error which challenge the sufficiency of the evidence to sustain the findings and; judgment. The assignments of error in this rase present no question as to the competency or relevancy of evidence. The following facts are undisputed: One John K. Stianisoni 'died /intestate in Day county, on November 29, 1895. The decedent at the tilme of his death, was owner of the real property in dispute. The plaintiffs and defendant are heirs ait falw 'of the decedent, each entitled to an undivided one-fifth interest in said real property. On January 10, 1896, the defendant, on his own petition, was appointed administrator and qualified and acted until January 19, 1898, when '•administration proceedings were closed and he w&s discharged by drder of the county court. When John K. Stianson died, there was a mortgage on the real property in the sum of $350, which became due shortly after defendant was appointed administrator, remained unpaid, and wlas -foreclosed on March 27, 1897. Defendant purchased the land at the foreclosure sale in his own name for $433, ■the amount due on the mortgage, and on March 27, 1898, received' tire sheriff’s deed therefor in1 his own name. The deed was duly redortíled the day it was issued Prior to> receiving said deed, defendant was in possession of the premises as administrator. When he tolck possession1 of the property as administrator, in January, 1896, tine plaintiffs Katherine Stianson and Sam K. Stianson w.ere of adult age, and plaintiffs Laura tod Carrie Stianson, twin sisters, were about 10 years of age.

It will be noted-’, that tire sheriff’s deed was issued! to’ defendant about two month© after his discharge as administrator. From that time he remained in the exclusive possession, occupancy, and use of tine land, until the beginning of this action, on September 27, 1914. The plaintiffs Laura Stitoson and Game Stiansbn became of adult age more than 9 years prior to the commencement of this action. The mortgage and! tire proceedings on foreclosure were all malde matters’ of public record as they transpired. On February 29, 1916, after tire entry of judgment in the action awarding plaintiff's and defendants each a one-fifth interest ‘in tito real estate a© heirs and cotenants, the plaintiff Sam K. Sfciamsoo filed a disclaimer of any right or title thereto, and the judgment was modified to adjudge a dismissal of the action 011 its merits as to him. The effect of the modified' -judgment was to award to Katherine, Laura, and Carrie Stianson each a one-fifth interests in the land, the other two’-fifths interest. remaining in the defendant. Defendant denied] plaintiffs’ allegations of fraud in. suffering foreclosure proceedings, and in bis purchase of the land at the foreclosure sale; alleged that both the estate -and the plaintiff heirs were without funds oir resources to pay the mortgage -indebtedness; that plaintiffs Katherine Stianson and Laura and Carrie Stianson consented to his becoming .purchaser of their interests at the ‘foreclosure sale; that he had been in -open, notorious, ' and adverse possession since the date of the sheriff’ deed, with the full knowledge arid!' acquiescence of all the plaintiffs; pleadled both the 6 and io years' statutes of limitation; and: that plaintiffs had been guilty of laches which should! estop them- from maintaining this action.

The trial court found, in substance, that the defendant, while acting as administrator, permitted’ the mortgage to' be foreclosed-, and purchased the land with intent to deftaludi .plaintiffs arid deprive them of their interest in the estate; that none of the plaintiffs had any knowledge of the. wrongful- acts of the defendant in thus acquiring -title to their interests ini the property, and dtid not lcnoiw of their rights until shortly before this action was commenced); that they had! proceeded with due diligence in seeking to enforce -thei'r rights, and that plaintiffs never knew of and never consented to or acquiesced1 in the purchase by defendant of their interests.

Appellant assigns as -error the finding of the trial court that he suffered the mortgage to be fo-reclo'sed and purchased the laud! with intent to defraud plaintiff's and deprive them of - th-eir interest therein, contending that there is no evidence ion the record' to sustain such a finding. Appellant also assigns as error the finding Idf the trial court that plaintiffs' had no ’knowledge of dlefondiainifc’s alcte in acquiring title to the property,- -for the reason that such finding is against the preponderance of- the' ■ evidence and wholly unsupported thereby. Appellant further -assigns - -as error the finding of the -trial court that -the ” plaintiffs never acqjuiesaad in bis purchase and possession of,, -the -lapicj:,-.. alleging that such finding is contrary (to.,, the clear preponderance ’of the evidence. A --careful scrutiny of the evidence and of the entire recoird fails to show any act or any ¡conduct on the part of .defendant frota which an actual, fraudulent intenti might he inferred. Sto far as the record) ¡discloses he never attempted to conceal his acts, or .by word or deed to 'deceive or mislead plaintiff®, or any of them, in his .dealings with them or with the estate, or with, the real property. It ¡stands undisputed that the estate was insolvent, and that the general ¡creditors received only about 75 cents on the dollar from .the estate. It is shown by the testimony of the plaintiffs thainselwes that ¡they were, , wholly without means to- redeem ¡or protect their interests from the foreclosure sale. The undisputed evidence shows that ¡during ¡the period1 of administration ¡the rents and profits from the 'land were accounted for and turned into the ¡estate in full. The trial count found, in substance, that from the ¡date of the sheriff's deed, the defendant excludedl plaintiffs from possession ¡of the land; continued in uninterrupted possession thereof; received ¡the rents aod profits1 arising therefrom, during all the years from 1898; and paid the taxes on the land-each year down to ithe time df:; the trial. The purchase of ¡the entire estate at tire mortgage sale by the. respondent as cotenant was -not in itself a fraurfiulienit act. The trust -relation as to hisi cotenaints would arise ¡only after he ¡had acquired title ¡at such sale, and fraud in that relation wfoul'd have its. inception- only when he intended and attempted wrongfully to appropriate to his own use the interests of his ootemants.. ' Mandeville v. Solomon, 39 Cal. 125. His relation to the (property -as cotena-nt and bis relation to the same property ¡as .administrator ¡of the estate to which it 'belonged are distinct. The consequences which flow from- his acquisition of the title of his! cotenamts and .those which flow from, his purchase -of property belonging to. the ¡estate of which he was administrator are not controlled by the same presumptions and rules. But the trust ¡which would arise in either case is not an- express, but a constructive or implied, trust-. The relation of one acting- as administrator, to real .property which belongs to- toe estate must ¡be considered separately.

Respondent’s ¡counsel, contend that an administrator, as such, becomes the trustee of -an express ¡trust .as to the titl-e to real property belonging to the' estate. The fallacy of his assumption is apparent from the fact that toe title '.descends to and becomes vested in the ¡heirs upon the death of the -decedent, sub-' ject only to ite1 disposition for payment off creditors, and never becomes vested in the administrator 'in- the course of administration proceedings. Under ouir statute this is true also -of the title to personal property. 'Civil Code, § 1093. The administrator is vested, not with- the title, tot wiilth certain powers and duties as a trustee, and where, through a wrongful act 'constituting a violation of hliis duties as such trustee, he acquires the title to property, either real or personal, belonging to the estate, he holds such title as trustee Oif a resulting' trust, but not as trustee of an express trust. This is made entirely clear by section’ 1616, Civil Code, which declares that:

■“One who gains a thing by * * * the violation of a trust, or other wrongful act is * * * an involuntary trustee of the thing gained for the benefit of the person who would otherwise have had it”

—and by section 1609:

“An involuntary trust is one which is created by operation of law.”

It follows that Stiaason, even if it be held that lie violated his duty as administrator in acquiring title to the liamd, which w'e do not concede, holds it as trustee of a resulting or involuntary trust, and not as trustee of an express trust. Dillinger v. Kelley, 84 Mo. 561; Earl v. Halsey, 14 N. J. Eq 332; Johns v. Norris, 22 N. J. Eq. 102; Meanor v. Hamilton, 27 Pa. 137; Hollingsworth v. Spaulding, 54 N. Y. 636; Matter of Monroe, 142 N. Y. 490, 37 N. E. 517. Bor the purposes of this appeal, the character and inception off 'the 'alleged .trust title are material to- a consideration off the defenses of laches 'and the statutes' of limitation, in 'determining '.the time 'from whidhi such, statutes1 begin to rtm, Or from which laches may be imputed.

Whether appellant’s relatiioni to the 'property be such •as would arise out of wrongful 'dealings with the property. of his cotenants or his relation to the property he that of administrator fraudulently seeking tci misappropriate property belonging to’ the estate, a constructive trust only oouilid arise out off hlis acts maleficio. Ae to an express trust, the .rule is well settled that the ¡running of statutes of limitation! and laches begins at the time such trust is openly repudiated, or 'alots are 'done by the trustee which are hostile tie,. or in fraud of, the rights, of the beneficiarles, and' of which they have actual knowledge, or of facts from wMch knowledge must 'be imputed' to them, This case belongs in the class of constructive or involuntary trusts arising from- allegad wrongful acts. So far as the results which flow faioirn -tilie existence of -stuck a trust are concerned1, it -is wholly immaterial whether such acts a-re found to be fraudulent in fact, or be dieeme'd fraudulent in law. The intent wiith which the -acts were done becomes wholly immaterial. The trust anises- with the sarnie effect regardless of the intent. As to the title to this real1 estate, the defendant, prior to his purchase of the land, occupied no position of trust toward these plaintiff's, other than a duty to account, as administrator, for the rents and profits 'during and for the purposes of administration, Assuming 'fbr the purposes of this, appeal that 'defendant -by bis purchase of the land became the trustee of an involuntary trust as- to his ooten'ants, the •bar of the statute of -limitations and' the effect of laches remain to be considered, and are decisive of this. case. Appellant cites numerous authorities to the effect that neither l-aches nor statutes of limitation may be invoked by the trustee of an -express trust in -an action by -the cestui que trust to aiforce his rights. Perry on Trusts, § 863; Speidel v. Henrici, 120 U. S. 377, 7 Sup. Ct. 610, 30 L. Ed. 718; Lamberton v. Yeomans, 84 Minn. 109, 86 N. W. 894.

The doctrine announced in these authorities is applicable only to -express trusts and has no application t'oi constructive or in•yiokinitiary trusts. Newsom v. Bartholomew County, 103 Ind. 526, 3 N. E 163; Hecht v. Slaney, 72 Cal. 363, 14 Pac. 88; Matthews v. Simmons, 49 Ark. 468, 5 S. W. 797; Speidel v. Henrici, 120 U. S. 377, 7 Sup, Ct. 610, 30 L. Ed. 718. In Broder v. Conklin, 121 Cal. 282, 53 Pac. 699, that court says:

“No -repudiation of a constructive -trust by the trustee is required in order to set the -statute of limitations' in motion. A cause of action is- created im'favtor of -tilie 'beneficiary at the very moment the law creates the - trust.” Lammer v. Stoddard, 103 N. Y. 672, 9 N. E. 328.

As we have seen, no express trust was created by appellant's-purchase and acquisition of -tine title. It is clear that plaintiff’s right to an action in -equity to -establish an invlciltmtary trust a'ccru-ed' ■ -tilie instant appellant acquired sindh title. To meet this proposition, respondents contend) that appellant's acquisition of tibie 'title of -bis 'coitenants was fraudulent in law, and! that tinder section 60, Code Civil Procedure, a cause of action will not be deemed! to 'have accrued until the discovery by the' aggrieved parties “of the facts constituting the fraud.” The finding of tire trial Court as ito plaintiffs’ discovery of tibe fraud is not sustained by the evidence or the law. In this case every fact essential to disclose andi to constitute a constructive trust in appellant was matter of public record flor more than 17 years before this action was begun, anidl for at least 9 years- after tibe minors became of age. Plaintiffs must be held to have known that the land 'had1 belonged to the deceased, -and .that they had' interests therein -as his heirs; that defendant was 'acting tas administrator -of the estate-; that the land wias mortgaged, and that tthie estate waist without ^mio-ney or ■resources to .pay the mortgage; that the mortgage was foreclosed and the land bought in -by defendant while acting as- administrator.

Briefly stated, the following falcfsi are undisputed': On the 19th day 'of January, 1898,.the defendant was discharged as administrator of.itihe estate of John K. Sitianson. Hie purchased the land- at foreclosure stale on March 27, 1897. The Sheriff’s deed was issued on the 27th day of March, 1898-, and on .that date was dWliy recorded! in the office of the register of -deeds of Day county, sfcmethi-ng more than -two months after Mis discharge as such administrator. Since that time -and up to the beginning of this action, on September 27, 1914, as found by the trial court, the dletf-end'amt remained in the exclulsiive possession, occupancy, and use of the land. It is undisputed that Katherine St-iansOn and Datura and- Carrie Stiianson at all times lived in- tibe immediate vicinity of, and sometimes visited, the land. Plaintiff Sam K. Sfianson. is- nbi fenger a party to this action. None of the plaintiffs was -under any legal disability for over 9 years of tibi-s time. Tills action- was 'begun at lealst 9 years -after the disability of minority of two of tibe plaintiffs had ceased. Dinning all this time the defendant was in -sole possession', olaltoing- title, . paid the taxes, and received and appropriated! to his own use rents- and profies frlom tibe -land, and wias never called! upon to account tihereftor by plaintiffs, nor.did plaintiffs at any time offer to contribute to. the payment of tire mortgage indebtedness, or faxes, or make any claim to the lanid: as. tenants in common or otherwise. During all this time the foreclosure proceedings and! the sheriff's1 deed ■to defendant were of public record1, as were ail matters, relating to the administration of thie estate. There is absolutely nothing in tine record tending to show (that -defendant ever sought to or did -mislead plaintiffs as to their legal right's,, or sought to- conceal, or attempt to conceal-, from them any act on Ms part -relative to this land, -either as administrator* or as cotenant.

Defendant haidl the right as -cotenant, to purchase the property under an outstanding incumbrance for his own protection. Mandeville v. Solomon, 39 Cal. 125; Stevens v. Reynolds, 143 Ind. 467, 41 N. E. 931, 52 Am. St. Rep. 422; Reed v. Read, 122 Mich. 77, 80 N. W. 996, 80 Am. St. Rep. 541; Marris v. Roseberry, 46 W. Va. 24, 32 S. E. 1019; McFarlin v. Leaman (Tex. Civ. App.) 29 S. W. 44; 17 Am. & Eng. Enc. of Law (2d Ed.) 639.

Ear more than 9 yeans these- plaintiffs, with, knowledge of all the facts, have slept -upon their -rights without seeking' to participate in the benefits of the purchase by- defendant of this property at toe foreclosure sale, and without .at any time (differing to pay any share of toe incumbrance on the land, oir any of the taxes accruing thereon, for more toon 17 years. Plaintiffs are in no •position to allege that they wieire without knowledge, during at least 9 years, of -every fact essential to the assertion of tiheir legal rights. Public records: are equivalent to actual knlolwledge of facts there appearing. Ft. Pierre v. Hall, 19 S. D. 663, 104 S. W. 470, 117 Am. St. Rep. 972; Coe v. Sloan, 16 Idaho, 49, 100 Pac. 354; Commissioners v. Renshaw, 23 Okl. 56, 99 Pac. 638, 22 L. R. A. (N. S.) 207, with monograph note. Lewis v. Welch, 47 Minn. 193, 48 N. W. 608, 49 N. W. 665, is a case largely relied upon by -respondent. An administrator foreclosed a mortgage belonging ta the estate and', employed a third! person to- bid- in the property -for his benefit. Tire fact that tole administrator was the real purchaser was concealed from toe heirs, arid dildl not appear -oif record. The administrator was held to be the trustee of -an express trust because the mortgage itself was property of toe estate; and, the land) 'being procesáis, of the mortgage, he was charged* as- trustee as .though; money 'had been received instead' of land. It wias -held that because toe plaintiff bad1 no, notice, actual or constructive, that the purchase w'as for the 'benefit of the administrator, he was not guilty of laches', and that the statute of limitations d!ildf not run until the discovery of that fact. B'ut ithe oaurt reserved a decision as to what might have been the rights of the parties had the -administraticr himself oipenly bid ini the property, paid! the purchase price, land accounted for the same as administrator of the estate.

It is isuggestied! that the decision of this court in Bidwell v. Smith, 23 S. D. 120, 120 N. W. 880, should rule this, case. That oase involved a breach of trust by an administrator, but did- mot involve lany question of title to either real or -personal property. Bidwell, while acting as administrator, was authorized by the county court to 'compromise a cMirn flor $1,964 against the estate by paying $425. He thereupon bought ¡arad took an assignment of the claim to himself, and sued the heirs, flor $1,964. This court held him guilty of a breach of duly, and that the estate should be given, the benefit of the transaction.' That case did not hold' that the acquisition by the trustee of an express trust, of a title to trust property, where the title had not been placed in him by the terms of ‘the express trust, would result i,m tine creation of an express trust as to such title, which appears to be the view of some oif our associates.

While the rule is well settled that equity w(ill mot permit a coltenant to acquire ,am. adverse 'claim .to common property through administration .proceedings! or otherwise for his own benefit to the exoiusion of his doitemants, it requires the exercise of reasonable diligence on the part of a coltenant, having or ■charged with knowledge of all the facts, in making an election to participate in the benefits of such transaction, 'and within a reasonable time to bear his portion of the expenditures necessarily involved therein. He will mot be permitted to- make such election a means of speculation by delaying until some circumstance, such as an increase in value of the land, may determine his course. We are clearly of the view that this case falls, within the rule announced in Savage v. Bradley, 149 Ala. 169, 43 South. 20, 123 Am. St. Rep. 30. Plaintiffs, with full knowledge, actual and implied, of all the material facts affecting their legal rights, have so long acquiesced in the acts of the defendant as tioi render the granting of relief inequitable and to charge them with) laches .su’ch as will bar the assiartion of their rights. Stevenson v. Boyd, 153 Cal. 630, 96 Pac. 284, 19 L. R. A. (N. S.) 525; Mandeville v. Solomon, supra; Craven v. Craven, 68 Neb. 459, 94 N. W. 604.

The order •amid) judgment of tire trial court are reversed.

GATES, J.

(concurring in result). I think that my respected Colleague has arrived at the correct result. I arrive at the same result, hut by a somewhat different route.

A trust relation concerning tiie property of an estate arises between an administrator and die heius of a deceased person regardless of the fact that title to the property may not be lodged in the administrator. Pomeroy, Eq. Juris. § 1077.

Section 1618, C. C., provides:

“A trustee may ntot use or «teal with tíre trust property for his Own profit, or for any other purpose unconnected with the trust, in any manner.”

It is undisputed that the administrator dealt- with property under hfe control as administrator for a purpose unconnected with 'the tritst; therefore he violated that section of the Civil Code. Bidwell v. Smith, 23 S. D. 120, 120 N. W. 880. It will not do to siay (or intimlate by declining tot concede) that he violated no duty itn purchasing the land at foreclosure sale, inasmuch as there were no fundís available to pay off the mortgage. In bidding ait tíre foreclosure sale it was to hfe own personal interest to stifle competition. As administrator it was Ids duty to encourage competition'. In Fulton v. Whitney, 66 N. Y. 548, the court well said:

“They were not bound! to buy in the property for the benefit of the truis-t estate, having no trust funds applicable to that purpose; but they had no right, by undertaking to purchase for their awn benefit, to create an ¡interest in themselves hostile to' their duty as trustees. As purchasers for their own benefit, it was to their interest to .prevent 'competition at the sale, and to slot manage that they could bid in the property at the lowest price, and thlis was 'directly in conflict iwlitb their duty as trustees. * * * No actual fraud on the part of the 'defendants is alleged1 or found, nor is it necessary that there should be. The object of the rule which- precludes trustee® from -dealing for their awn benefit, in- matters to which, their trust relates, is to- prevent secret frauds by removing ail inducement to attempt therm. * * * It is 'urged, on the part of the appellants, .that this rule is mot applicable to the present case,’ because the mortgaged' premises fanned no part of the trust estate. This objection was answered by Ohaniceltor Walworth, in the casé of Van Epps v Van Epps, 9 Paige [N. Y.] 241, by saying that the rute te not 'confined to trustees or others who hold 'the -legal title to the property to be sold, but -applies universally to 'all -who eorii-e within its principle, which is that no party can -be permitted1 to purchase an interest in property, and hold it for hiis own benefit, where he has a duty to perform, in relation to such .property, which is inconsistent with the character of a purchaser on his own account.”

Section 1623, C. C., provides:

“Every violation of .the provisions- of the preceding sections of this article is a fraud against thie beneficiary of the trust.”

This seotjion makes the above violation a fraud' regardless' of the absence of intentional fraud. Section 60, siubd. 6, C. C. P., declares that the following bind' of .action must be begun within 6 years:

“An action fcir relief on due ground! of fraud, in -cases which heretofore were solely cognizable by the .court of chancery, the cause of action i.11 such case not to. be deemed to. hlave 'accrued until thie discovery, by thie aggrieved party, of the facts' .constituting the fraud.”

This is the bind of action that -at common larw was cognizable solely by a court of chancery. Therefore that -section applies. I think it is -entirely unnecessary to enter -upon a lengthy discussion in regard to expires® trusts add resulting trusts. To my mind the -above-quoted sections of statute dispose of the matter.

However, there' was -an entire failure -of proof that the facts constituting the fraud were not -discovered by respondents until a date within 6 years prior to beginning the action. What the proof did) fend to show was thlat the respondents- did- not discover tlbeir supposed! i-egal rights based upon such facts until shortly before the action was begun.

Eor the foregoing -reason, and -also because of newly discovered .evidente, I comcur in -a reversal of .the judgment and order .denying a nieW trial.

WHITING, P. J.

,-(Concurring specially). Appellants contend that defendant wfas the trustee of a resulting trust. The trial- court was apparently of the theory that appellant was originally Ale trustee of ian- express truisit; .that he remained such trustee until notice of his renunciation of such express trust was brought home to respondent's-; and A&lt such renunciation was brought home to respondents-, mat at the time Aey received knowledge -of the f-actis showing Aalt -appellant was claiming' adversely to Aem, but at the time that they received- -advice as- to- the legal effect of the facts of which Aey had. received knowledge-. I am of the opinion Alat appellant was a trustee of this, property under an express trust -at Ae time of his- purchase- at the foreclosure sale; -that, as -against his cestui's- q-u-e-. trusltent, he -can-not claim 'thaifc he renounced Ae -express' trust and became tAe trustee of a resulting trust by -a wrongful purchase, land thu-s -started running a period of adverse possession under which he oo-uld claim title; that he -remained, as to Ae respondents, the -trustee of an express trust, holdling title for th-eir benefit up- to such time as- they receive knowledge of facte showing Aat he liad renounced such trust and was -claiming' adversely to them; -Aat the placing of .record, by appellant, of hie sheriff’s deed was not constructive notice- to respondents-, the ce-stuis qu-e brustent of -an express- trust (see numerous cases cited pages 215 and 216 of 22 L. R. A. [N. S.]), but -that respondents could and did receive constructiva notice -Aat -appellant was claiming adversely, Auough actual notice of such facts as 'Should have -put them upon inq|uiry, which inquiry, if followed, would have revealed Ae fact of aplpellant’s adverse -claim (section 2452, C. C.); that Ae trial court erred in dating subh constructive notice from the- date when respondents' were advised -o-f the l-egal effect of what had -transpirad, instead of froto Ae date of -the knowledge of the facts constituting constructive notice, and that subh error was- prejudicial requiring a reversal of the cause. I am also of -Ale opinion Aat a new trial should! he granted on Ae ground of newly discovered evidence.