Court Opinion

ID: 8042416
Source: CourtListenerOpinion
Date Created: 2022-09-09 03:41:42.964313+00
Date Added: 2024-06-11T16:37:22.217455
License: Public Domain

Coleman, C. J.,
concurring:
I concur in the conclusion reached in the majority opinion, that the complaint sets forth only one cause of action, and in the order.
■ The facts were pretty fully stated in the opinion of McCarran, C. J., when the case was before us upon the first hearing. The complaint, briefly stated, alleges a trust relationship between the Pages and Walser, and that Margrave took his interest knowing the facts of the trusteeship between the Pages and Walser, and without consideration. ' The relief sought is and can be nothing more nor less than an accounting by the defendants. It is true that the so-called first cause of action concludes with a prayer for damages, but the legal effect of a complaint must be determined by its allegations, and not by its prayer. 31 Cyc. 111.
Whether the trust is one arising from contract or by operation of law, matters not. The relationship exists just the same, and it is the duty of the defendants in the action to give an account of their stewardship. 2 Pomeroy, Eq. Jur. (2d Ed.) sec. 1063. And this duty is very comprehensive; it extends through the entire range of operation by the trustees. They may be liable for neglect by being held answerable for property actually lost through want of care or prudence, and also for stock, securities, or other assets which they might have received if they had exercised due care and prudence in their dealings with the trust property. It is also a well-known rule that where a person takes property charged with a trust, knowing it to be so charged, as did Mar-grave, he is liable as trustee; and when he takes an interest, as did Margrave, he becomes a cotrustee, and *162is liable. These rules are fundamental, and need no citation of authorities to support them. Sustaining the general rules enunciated, attention is called to sections 1066 to 1081, inclusive, of 2 Pomeroy’s Equity Jurisprudence (2d Ed.). In view of the contention of counsel for petitioners, I feel constrained to quote at length from section 1080 of the work just mentioned, as follows:
“It has already been shown that a beneficiary may alw’ays claim and reach the trust property through all its changes of form while in the hands of the trustee, and that he may also follow it into the possession and apparent ownership of third persons, until it has been transferred to a bona-fide purchaser for valuable consideration and without notice; and that a court of equity will furnish him with all the incidental remedies necessary to enforce his claim and to render it effective. In addition to this claim of the beneficiary upon the trust estate as long as it exists, the trustee incurs a personal liability for a breach of trust by way of compensation or indemnification, which the beneficiary may enforce at his election, and which becomes his only remedy whenever the trust property has been lost or put beyond his reach by the trustee’s wrongful act. The trustee’s personal liability to make compensation for the loss occasioned by a breach of trust is a simple contract equitable debt. It may be enforced by a suit in equity against the trustee himself, or against his estate after his death, and the statute of limitations will not be admitted as a defense unless the statutory language is express and mandatory upon the court. The amount of liability is always sufficient for the complete indemnification and compensation of the beneficiary.”
Perry on Trusts and Trustees (6th Ed.), sec. 843, lays down the general rule that an action at law will not lie against a trustee while the trust is still open; and in the concluding paragraph of White v. Sheldon, 4 Nev. 280, this court, speaking through Lewis, J., said:
“But it is argued an action for money had and *163received might have been maintained by the plaintiff at the time the defendant sold the stock, and that in such case a period of two years ought to bar his right. We do not think that such action could be maintained. Had Sheldon acknowledged in any way that any sum was due the plaintiff, perhaps such an action might be maintained; but where, as in this case, it was necessary for the plaintiff to establish facts out of which a trust was created, and then to show that the trust property was converted into money, it is very certain that such facts could not be established in an action brought simply to recover money. The plaintiff could not show himself entitled to any relief whatever until an implied trust was established, which certainly could not be done in a court of law and in an action of assumpsit; such trust can only be established in an equity proceeding. So, too, this is the only character of action in which the plaintiff could obtain full and adequate relief.”
If Margrave did not know of the interest of the Pages in the securities deposited by them with Walser, but took his interest without parting with a valuable consideration therefor, the trust may be enforced against him. 39 Cyc. 526.