Court Opinion

ID: 7914823
Source: CourtListenerOpinion
Date Created: 2022-09-08 22:09:42.064308+00
Date Added: 2024-06-11T16:32:45.419062
License: Public Domain

Allen, J.
(dissenting): Sam Lippitt died on February 3, 1929, intestate, unmarried, leaving as his sole heirs Mary Woods, a sister, and Theodore Lippitt, a brother. At the time of his death Sam Lippitt was the owner of certain mineral interests represented by trustee’s certificates. This property passed to the brother and sister in equal shares.
Theodore Lippitt lived in Colorado. He died, testate, February .11, 1931. His children, legatees under his will, are intervenors in this action.
Duvall, trustee of the mineral property, was unaware of the fact •that Theodore had died leaving heirs and legatees. By mistake he paid large sums — accruals from the mineral property owned by Sam *483Lippitt at the time of his death — to the sister, Mary Woods. She accepted the payments so made and appropriated the same to her own use. Mary Woods died August 29, 1935. The plaintiff, Earl Woods, is her son, and as sole beneficiary under her will now claims the mineral property represented by the trustee’s certificates. Under the judgment of this court he is found to be the true owner of the property.
I suppose it will not be disputed that Mary Woods, if alive, would be compelled to make restitution to her brother’s children, whose property she appropriated. Does her son, who claims title as beneficiary under her will, have a better title? If he occupied the position of a bona fide purchaser of the property for value, and without notice of the rights of the children and legatees of Theodore Lippitt (intervenors here) the answer would be yes. But does he occupy that favored position? It taxes credulity to suppose he did not know of their rights and claims. But admit he had no notice of their claims — getting the property under the will, what thing of value did he part with?
In 2 Pomeroy’s Equity Jurisprudence, § 747, the author states:
“What constitutes a valuable consideration within the meaning of the doctrine which gives protection to a bona fide purchaser? No person who has acquired title as a mere volunteer, whether by gift, devise, inheritance, post-nuptial settlement on wife or child, or otherwise, can thereby be a bona fide purchaser. Valuable consideration means, and necessarily requires under every form and kind of purchase, something of actual value, capable in estimation of the law, of pecuniary measurement — parting with money or money’s worth, or an actual change of the purchaser’s legal position for the worse. . . .”
It follows that the plaintiff who stands before the court as a mere windfall volunteer stands in the shoes of his transferor. He paid nothing of value and therefore does not have a better title.
Although the trustee paid the money to Mary Woods in good faith, it was negligently paid and was a breach of trust. (Restatement, Trusts, § 201 and Comment.)
Section 289, and Comment from the same authority, read:
“If the trustee in breach of trust transfers trust property and no value is given for the transfer, the transferee does not hold the property free of the trust, although he had no notice of the trust.
“Comment: a. The interest of the beneficiary in the trust property is not cut off by a transfer by the trustee in breach of trust to a third person if no value is given for the transfer, although the transferee had no notice that the transfer was in breach of trust; and the beneficiary can in equity compel the third person to restore the property to the trust. . . .”
*484' The plaintiff claims title by adverse possession. Duval was trustee of an' express trust. A's he had hot repudiated his trust obligations, the statute of limitations has not barred the claims of the intervenors as against him. As the plaintiff Earl Woods and the intervenors are co-tenants in the mineral interests represented by the certificates, the statute would not run against the intervenors in favor of plaintiff.
The dispute befóte us is between various claimants to a trust estate. It is.á proceeding in equity, and unless the intervenors have been guilty of laches, they are not barred.
In Osincup v. Henthorn, 89 Kan. 58, 130 Pac. 652, the doctrine as to laches is stated:
“The general rule is that equity will not interpose to relieve from a mistake where there is inexcusable delay and negligence in asserting a right or where the granting of the relief would operate inequitably, but laches is an equitable defense- and will not bar a recovery from mere lapse of time nor where there is a reasonable excuse for nonaction of a party in making inquiry as to his rights or in asserting them.” (Syl. If 2.)
See, also, Detweiler v. Swartley, 74 Kan. 855, 86 Pac. 141; Basye v. Refining Co., 79 Kan. 755, 101 Pac. 658; Harris v. Defenbaugh, 82 Kan. 765, 109 Pac. 681.
. The. general -rule is that restitution will be denied because of laches only where a party, with full opportunity to pursue a remedy, delays without' adequate reason until, if restitution were granted the'other party will suffer a loss which would not have occurred had the action been brought with a fair degree of promptness. It is not shown that the plaintiff Earl Woods has changed his position or would suffer any loss by reason of the delay in bringing the action.
In Restatement, Trusts, § 254, and Comment d thereunder, it is stated:
“If the trustee has made a payment out of trust property to one of several beneficiaries to which the beneficiary was not entitled, such beneficiary is personally liable for the amount of such overpayment, and his beneficial interest is subject to a charge for the repayment thereof, unless he -has so changed his position that it is inequitable to compel him to make repayment.
"Comment: a. Charge on beneficiary’s interest. If the trustee by mistake or otherwise makes a payment out of the trust estate to one beneficiary which should have been made to another, the beneficiary so paid is personally liable for the repayment of the’amount so paid, and his beneficial interest is subject to a charge therefor.”
The trial court decreed that the interest of Earl Woods should be, impressed with ’ a lien or charge’ until restitution should be' made. This appears to be a just result.