Source: http://courts.mrsc.org/supreme/070wn2d/070wn2d0391.htm
Timestamp: 2019-04-20 04:50:41+00:00

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Equity - Laches - Applicability of Doctrine - In General. Laches is an equitable doctrine existing independently of statutes of limitation. It will not operate as an equitable estoppel to the assertion of a right merely because of acquiescence or a delay in enforcing it, unless changed conditions would make it inequitable to assert the right.
 Same - Laches - Applicability of Doctrine - Breach or Repudiation of Trust. Under the doctrine of laches a trust beneficiary cannot hold the trustee liable for a breach of trust if he delays bringing suit for so long a time and under such circumstances that it would be inequitable. Similarly, if the trustee repudiates the trust to the knowledge of the beneficiary, the beneficiary is not barred merely by lapse of time from enforcing the trust, but he may be barred by laches.
 Pleading - Issues Not In Pleadings - Tried by Consent of Parties. It is not necessary that laches be specifically pleaded by name where the issue has been tried by express or implied consent of the parties (RPPP 15(b)). RPPP 15(b) is to be liberally construed.
Appeal from a judgment of the Superior Court for Pierce County, No. 146267, Bartlett Rummel, J., entered December 22, 1964. Reversed.
Action to obtain an accounting. Cross-appeals taken from a judgment substantially in favor of the plaintiff.
John G. McCutcheon and Donald F. Herron, for appellant.
Williams, Lanza, Kastner & Gibbs, DeWitt Williams, and Frank J. Owens, for respondent and cross-appellant.
Preston, Thorgrimson, Horowitz, Starin & Ellis and James R. Ellis, amici curiae.
«*» Reported in 423 P.2d 634.
 See Am. Jur. 2d, Equity § 166.
«1» Pursuant to Laws of 1911 ch. 11, and to an election, the county commissioners declared the organization of the district on December 14, 1914.
The commissioners of the waterway and diking districts were authorized by statute to levy an annual assessment upon the lands within the districts' boundaries sufficient to pay the bonds at maturity. The assessments were to be collected by the county treasurer and kept in a separate fund for the sole purpose of liquidating the bonds in accordance with the provisions of the statute. That this was done, at least to a limited extent, is illustrated by the fact that each district paid a portion of its bond issue as we have set forth above. The bonds were never the obligation of Pierce County.
«2» The bonds were issued pursuant to Laws of 1911, ch. 11, § 35, as amended by Laws of 1913, ch. 46, § 7, p. 123.
«3» The purchase price was $95.
«4» Pursuant to Laws of 1895, ch. 117, p. 304, and an election held September 19, 1914, the county commissioners declared the organization of the district on September 21, 1914.
«5» The bonds were issued pursuant to Laws of 1895, ch. 117, § 29, et seq., p. 324, as amended by Laws of 1921, ch. 87, § 1.
«6» The purchase price was $630.
invalid and entire annual levies on certain properties for the bond fund were canceled by court action. Because of the invalidity of some assessments and the delinquency of others, there was not enough money in the bond funds in 1926 to pay the bonds when they matured. At this time, all bond assessments were past due and general taxes were delinquent on many of the properties.
Thereafter, the county foreclosed on certain properties in both districts. The records submitted show that the properties were foreclosed upon for general taxes, but none shows whether or not bond assessments were involved.
Some of the foreclosed properties were sold to private individuals and between 1940 and 1943 substantially all of the remaining properties were conveyed to the Port of Tacoma for development and subsequent sale or lease prior to January 1, 1944.
(a) The expense incurred by the port district for the administration, improvement and development of said lands shall be returned to the general fund of the port district.
(b) Any balance remaining shall be paid to the county in which the lands are located, to be paid, distributed and prorated to the various funds in the same manner as general taxes are paid and distributed during the year of such payment.
«7» Rem. Rev. Stat. (Sup.), § 9709-2; reenacted with slight change by Laws of 1955, ch. 73, § 5, p. 433, now appearing as RCW 53.25.050.
(c) The amounts for which said properties were sold or where no sale was made, a description of the other disposition of such property.
2. That upon such accounting defendant be required to pay into the bond funds of said districts the amounts to which said funds are entitled from any cash sales of said properties, and also in the instances in which conveyances were made to the Port of Tacoma without consideration, the total amount of unpaid assessments included in said tax foreclosure sales or subsequently accruing together with interest thereon.
3. That upon payment into said bond funds as herein prayed for that said funds be ordered disbursed in payment of said bonds in numerical order.
During trial, plaintiff apparently broadened the scope of his claims for he assigns as error, on his cross-appeal, the failure of the court to enter proposed conclusions of law granting plaintiff judgment for $8,500, unpaid waterway district bonds, $5,000 of which were owned by him, and for $63,000 unpaid diking district bonds, with interest from January 1, 1944, to be paid into the bond funds of the districts and applied to payment of the bonds.
the taxes and assessments were foreclosed; (b) the amount of all subsequently accrued assessments; and (c) the amounts for which the properties were sold, or where no sale was made, a description of other disposition of the properties.
Subsequently, the county filed an accounting which is admittedly incomplete because the county does not have now sufficient records available to comply with the order of court. LeeRoy Brown, chief accountant of the Pierce County Treasurer's Office, testified: "The older records, part of that time, are not available. We don't know where they are. We assume they were destroyed years ago."
Defendant contends that the bondholders' claims are barred (1) by failure to file a claim with the county pursuant to RCW 36.45.030; (2) by statutes of limitations; (3) by failure to join necessary parties, i.e., the Districts and the Port of Tacoma; and (4) by laches.
After trial, the court entered its judgment and decree which directed defendant county to institute promptly, and expeditiously prosecute, legal proceedings for the recovery of all land within the diking and waterway districts that had been acquired by the county in foreclosure proceedings and which was subsequently conveyed to the Port of Tacoma by Pierce County. As the properties are recovered, the county is directed to offer them for sale as in the case of properties acquired by foreclosure proceedings.
The judgment further provides that the court will make additional orders concerning (1) the conduct of sales of the properties after their acquisition by the county from the Port of Tacoma; and (2) the distribution of the proceeds in order to protect the bondholders«8» and effect the payment of the unpaid bonds.
«8» Plaintiff owns all of the unpaid bonds of the diking district and all of the unpaid bonds of the waterway district except seven $500 bonds, the owners of which are not identified.
All claims for damages against any county must be presented before the board of county commissioners and filed with the clerk thereof within ninety days from the date that the damage occurred or the injury was sustained. (Italics ours.) barred the entry of judgment for plaintiff in the sum of $8,500 (the amount of all unpaid bonds in the waterway district) and $63,000 (the amount of all unpaid bonds in the diking district) for it is admitted that no claim was ever filed with Pierce County.
A myriad of questions are raised by defendant's 25 and plaintiff's (cross-appellant's) 4 assignments of error. The answer to one question, however, we believe to be dispositive of this appeal and cross-appeal: Is plaintiff foreclosed by the doctrine of laches?
Plaintiff argues that the doctrine of laches does not apply to his action because the county stands in the position of trustee for the bondholders and is always liable to the trust for mismanagement or misappropriation of the funds or properties in the trustee. Perhaps it is an oversimplification, but if plaintiff's theory is sound, an action based upon ownership of the bonds could be maintained 75 years after the bonds matured as well as 35 years thereafter. We do not agree; public policy requires that private claims come to rest at some time.
are also of public record. The bondholders did not act. Much of the land underwent extensive changes. From undeveloped tidelands, the land was transformed into an extensive industrial complex.
Well, going back that far, it's a little bit difficult, but Mr. Haskell, as I said, usually made a practice of calling probably once a year, possibly once every other year. In fact, he called prior to '53 even, inquiring as to the status of the funds, but this particular time he happened to come in to the office. Whether it was ever something else I don't know, but he stopped in to inquire about the bond funds.
Considering the foregoing, does laches apply?
"`Hence, it has been said, laches in legal significance, is not mere delay, but delay that works a disadvantage to another. So long as the parties are in the same condition, it matters little whether one presses a right promptly or slowly, within limits allowed by law; but when, knowing his rights, he takes no step to enforce them until the condition of the other party has, in good faith, become so changed that he cannot be restored to his former state, if the right be then enforced, delay becomes inequitable, and operates as an estoppel against the assertion of the right. When a court sees negligence on the one side and injury therefrom on the other it is a ground for denial of relief.'"
The defense of laches is grounded upon the principle of equitable estoppel, which will not permit the late assertion of a right where other persons, by reason of the delay, will be injured by the assertion. Young v. Jones, 72 Wash. 277, 130 Pac. 90 (1913).
Mere delay, lapse of time, and acquiescence do not defeat the remedy unless so long continued that in a particular case its changed condition would make it inequitable to allow recovery. Gray v. Reeves, 69 Wash. 374, 125 Pac. 162; State ex rel. Kubel v. Plummer, 130 Wash. 135, 226 Pac. 273; Reiner v. Clarke County, 137 Wash. 194, 241 Pac. 973; State ex rel. Hearty v. Multin, 198 Wash. 99, 87 P. (2d) 280.
"The doctrine of laches is grounded upon the principle of equitable estoppel, and before it can be applied there must be some special circumstance which would render the maintenance of the action inequitable." Bowe v. Provident Loan Corp., 120 Wash. 574, 208 Pac. 22.
(1) The beneficiary cannot hold the trustee liable for a breach of trust if he fails to sue the trustee for the breach of trust for so long a time and under such circumstances that it would be inequitable to permit him to hold the trustee liable.
(2) The beneficiary is not barred merely by lapse of time from enforcing the trust, but if the trustee repudiates the trust to the knowledge of the beneficiary, the beneficiary may be barred by laches from enforcing the trust.
In determining whether the beneficiary of a trust is precluded by laches from holding the trustee liable for breach of trust, the court will consider among others the following factors: (1) the length of time which has elapsed between the commission of the breach of trust and the bringing of suit; (2) whether the beneficiary knew or had reason to know of the breach of trust; (3) whether the beneficiary was under an incapacity; (4) whether the beneficiary's interest was presently enjoyable or enjoyable only in the future; (5) whether the beneficiary had complained of the breach of trust; (6) the reasons for the delay of the beneficiary in suing; (7) change of position by the trustee, including loss of rights against third persons; (8) the death of witnesses or parties; (9) hardship to the beneficiary if relief is not given; (10) hardship to the trustee if relief is given.
b. Length of time necessary to bar beneficiary. The length of time necessary to bar the beneficiary from holding the trustee liable for breach of trust depends upon the circumstances. In the absence of special circumstances the beneficiary is barred if the period of the Statute of Limitations applicable to actions at law in analogous situations has run.
repudiated the trust; (5) the extensive change in the physical condition of the land.
It would be naive of us to find that plaintiff did not have knowledge of the infirmities attached to these bonds when he purchased them at least 31 years after maturity for slightly more than one cent on the dollar of their face value, not considering accumulated interest. We therefore conclude that it would be inequitable to allow recovery; hence, the action of plaintiff-respondent is barred by the doctrine of laches.
 We find no merit in plaintiff's contention that we cannot consider the doctrine of laches because it was not specifically pleaded by name.
When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings.
This rule is to be liberally construed. Burlingham-Meeker Co. v. Thomas, 58 Wn.2d 79, 360 P.2d 1033, 3 Orland, Wash. Prac. 525.
In view of our conclusion, it is not necessary for us to consider the question of whether plaintiff's action is barred by the statute of limitations and by failure of bondholders to file a claim with Pierce County pursuant to RCW 36.45.010.
The judgment is reversed and the cause dismissed with prejudice.
FINLEY, C.J., HILL, DONWORTH, ROSELLINI, HUNTER, HAMILTON, and HALE, JJ., and LANGENBACH, J. Pro Tem., concur.

References: § 166
 § 35
 § 7
 § 29
 § 1
 § 9709
 § 5
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