Case Name: Weber, Appellant, vs. Sunset Ridge, Inc., and another, Respondents
Court: Wisconsin Supreme Court
Jurisdiction: Wisconsin
Decision Date: 1955-03-08
Citations: 269 Wis. 120
Docket Number: 
Parties: Weber, Appellant, vs. Sunset Ridge, Inc., and another, Respondents.
Judges: Martin, J., took no part.
Reporter: Wisconsin Reports
Volume: 269
Pages: 120–131a

Head Matter:
Weber, Appellant, vs. Sunset Ridge, Inc., and another, Respondents.
February 7
March 8, 1955.
For the appellant there was a brief by Vaudreuil & Vaudreuil of Kenosha, and oral argument by Leo E. Vaud-reuil.
For the respondents there was a brief by Hammond & Hammond of Kenosha, and oral argument by Walter W. Hammond.
Motion for rehearing denied, without costs, on May 3. 1955.

Opinion:
Gehl, J.
There is presented upon this appeal the question whether the judgment entered in the prior action bars the present action.
When plaintiff was summoned in the prior action she was called upon to meet the allegations of the complaint, to assert any defense which she might have had, and to challenge the correctness of any claim of legal right made by plaintiff. If at that time she had or claimed to have had any legal interest in the lots the judgment is conclusive and bars the claim now asserted by her. Cohan v. Associated Fur Farms, Inc., 261 Wis. 584, 53 N. W. (2d) 788; Smith v. Chicago, M. & St. P. R. Co. 83 Wis. 271, 50 N. W. 497, 53 N. W. 550.
Plaintiff urges that she then had no interest in the lots, and that she acquired none until 1949 when, after judgment in the prior action, she became the owner thereof by virtue of the deeds obtained from her brothers. To that contention defendants reply that she acquired nothing by the deed which she obtained from her brothers; that what they purported to convey to her was in fact already hers and was hers at the time of the disposition of the prior action.
In support of that contention defendants rely upon the testimony of plaintiff that in 1933, when Hillcrest conveyed to the brothers, she, rather than the brothers, became the true owner of the lots; that the brothers "did not pay a dime for the deed;" that she was the only party in interest; that she paid $7,000 of her own money for the conveyance; that she was in fact the real purchaser and had the deed placed in the names of her brothers for some reason of her own; that the, deed was signed by her as secretary of Hillcrest.
We are of the opinion that in 1940, at the time of the first, quiet-title action, plaintiff had no interest in the lots and -that she had or acquired none until 1949 when her brothers conveyed to her. Defendants contend that, upon the basis of plaintiff's own testimony, it should be determined that when the brothers obtained the deed in 1933 a constructive trust for her benefit was created. Unless the brothers were unjustly enriched at the expense of the plaintiff as a result of that transaction it may not be said that a constructive trust was created.
"The underlying principle of a constructive trust is the equitable prevention of unjust enrichment. . . Masino v. Sechrest, 268 Wis. 101, 107, 66 N. W. (2d) 740.
"A constructive trust is substantially an appropriate remedy against unjust enrichment. It is raised by equity in respect of property which has been acquired by fraud, or where, although acquired originally without fraud, it is against equity that it should be retained by the person holding it." 54 Am. Jur., Trusts, p. 169, sec. 219.
The trial court found that she paid nothing for the transfer of the property into the names of her brothers. Unjust enrichment arises when there is receipt by one person from another of a benefit, the retention of which would be unjust. Federal Corp. v. Radtke, 229 Wis. 231, 281 N. W. 921. If the brothers received anything without consideration it was not received from plaintiff. She parted with nothing in the transaction with them; they acquired nothing in consequence of her having parted with anything. They were not enriched at her expense. No constructive trust was created.
It must be so held despite the fact that it might be assumed that when the brothers obtained the deed they agreed with their sister that upon her demand they would reconvey to her. 54 Am. Jur., Trusts, p. 171, sec. 221.
Defendants contend, however, that because no action against the brothers is involved, it is not necessary in order to sustain their position that it be determined that a constructive trust was created. It is true that neither in the previous action nor in this action are any rights affecting the interests of plaintiff and her brothers as between themselves involved. But in order to permit the determination that she is barred by the previous action it must still be found that at the time of the disposition of the previous action she had an interest in the lots, regardless of the fact that the brothers did or did not have an adverse interest therein, which interest she could or should have asserted in that action. An interest in land " 'comprehends . . . every kind of claim to land which can form the basis of a property right.' Union Trust Co. v. Reed, 213 Mass. 199, 99 N. E. 1093." Ornatowski v. National Liberty Ins. Co. of America, 290 Mich. 241, 248, 287 N. W. 449. The interest must, of course, be an enforceable, legal one. Plaintiff had no such interest in the lots until 1949 when the brothers conveyed title to her.
The effect of the judgment rendered in the prior action must be limited to the title or right of plaintiff as it then stood and is not conclusive as to title and rights subsequently acquired by her. 2 Freeman, Judgments (5th ed.), p. 1507, sec. 714; Whitney v. Nelson, 33 Wis. 365. She had no title to the premises in controversy and judgment was given against her "but this did not deprive [her] of the right to acquire a new and distinct title; and, having done so, [she] had the same right to assert it, without prejudice from the former suit, which would have accompanied the title into the hands of a stranger." Barrows v. Kindred, 71 U. S. (4 Wall.) 399, 404, 18 L. Ed. 383.
It is said that the judgment is conclusive against plaintiff because the deed which she obtained from her brothers in 1949 only confirmed or constituted formal evidence of the right which she acquired by the brothers' void undertaking to convey to her. Confirmed what? Nothing more than that which could never have been enforced. It confirmed nothing and could be no formal assurance of an interest "which never had been acquired.
Much is sought to be made of the fact that the trial court found that the conveyance made to the brothers in 1933 was in effect fraudulent. In that connection it must not be overlooked that this is not an action brought by Hillcrest's credi tors to set aside the transfer; nor is it an action brought by Hillcrest to recover property allegedly misappropriated by H. D. Weber or her brothers. The issue is made by persons who had no interest in or claims against Hillcrest at the time of the transfer, who are still strangers to Hillcrest, and who .have acquired none of the property of Hillcrest except the interest in the real estate which it still owned when Mr. Taylor received the receiver's and sheriff's deeds heretofore referred to. We know of no rule of law which would permit us to award to a stranger to a transaction property which has been acquired by another by fraudulent means.
The fact that the court made a finding that H. D. Weber had the property under her control at all times is immaterial. In the first place, it is not a finding — it is a conclusion of law which, of course, is subject to review by this court. Our determination, heretofore made, that H. D. Weber had no enforceable claim against the property at the time of the prior action to quiet title disposes of any contention which might be made based upon the court's finding that she had the property under her control herein. As we have pointed out she had no legal control of the property, no claim against it, until she obtained the deed from her brothers after judgment in the prior quiet-title action.
Mr. Taylor testified that when he obtained the receiver's deed in 1939 he knew of the deed which had been given to the brothers. Of course, he still had that knowledge in 1941 when he agreed on behalf of his corporation to a discontinuance of the first quiet-title action as against the brothers. It does not seem likely that, if at that time he considered his corporation to be the owner of the lots, he would have agreed to that procedure. If any assumption is to be made from that fact it must be that at that time at least he recognized that the brothers had acquired an interest in the lots which he could not successfully attack.
At the trial an amended answer was proposed and allowed by the court. Among other things, it was alleged that defendant corporation and its predecessors had been in possession of the real estate involved for more than ten years under color of title thereto. Defendants contend that on that account the complaint should be dismissed. The trouble with that contention is that no finding to that effect was asked for or made. There is, therefore, no basis for a conclusion by this court that the defendants are entitled to relief upon that theory. 3 Am. Jur., Appeal and Error, p. 462, sec. 897. Fluck v. Meiroff, 192 Wis. 480, 213 N. W. 474.
Defendants contend, also, that at most the transaction whereby the brothers obtained the deed to the lots constituted no more than the giving of security for the indebtedness represented by the note in the sum of $9,100 and the land contract given by Hillcrest to the brothers at the same time. The action was neither prosecuted nor defended upon that theory. Again, there are no findings which would afford a basis for that conclusion.
In her fourth cause of action plaintiff pleads a contract by the terms of which Hillcrest when it conveyed title to the brothers agreed that it would "permanently maintain general and permanent care of the premises" according to the rules then existing or which might be thereafter adopted for the general management of Hillcrest; that when Sunset acquired its interest in and to the real estate it also acquired approximately $8,000 which was then considered "a perpetual-care fund;" and that by reason of the acceptance of the interest of Hillcrest in and to Sunset's real estate and the perpetual-care fund Sunset has assumed the obligation perpetually to maintain and care for the premises described in plaintiff's third cause of action.
Sunset's answer alleges that at the time it acquired title it also received $7,200 which was then and at the time of trial considered in a "perpetual-care fund" and that Sunset "as sumes and is obligated to permanently maintain and perpetually care for the premises" in so far as the income from said fund and from any accretions thereto will maintain the premises.
There is nothing in the record except the pleadings which bears upon this issue. It appears to us from the defendants' answer that there is no dispute as to its obligation to care for all of the lots in the cemetery and therefore plaintiff is entitled to judgment directing maintenance in so far as the fund acquired therefore will permit.
By the Court. — Judgment reversed. Cause remanded with directions to enter judgment in accordance with this opinion.
Martin, J., took no part.