Court Opinion

ID: 6905285
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:59:20.401787+00
Date Added: 2024-06-11T16:06:19.341461
License: Public Domain

*161Opinion by
Mb. Chief Justice Moobe.
This is an appeal by the plaintiff from a decree dismissing her suit for an accounting. The testimony shows that for some time prior to the fall of 1909, the plaintiff, Florence Johnson, then Mrs. Smith, and her father, H. H. Bean, had been buying lots in Portland, Oregon, putting up buildings thereon with money obr tained from the defendant, J. H. McKenzie, a broker, selling the real property thus improved, and, from the proceeds, paying the sums borrowed. The plaintiff had a contract to purchase lot 8 in block 12 in Merlow, an addition to that city, and applied to the defendant to secure for her a loan of $2,000, with which to erect a two-story house on the premises. He procured that sum from C. C. Marton, for which service the plaintiff promised to pay 2 per cent for negotiating the loan and one half of 1 per cent for paying out the money for labor employed upon and material used in putting up the dwelling. From the sum loaned the defendant paid, on December 11,1909, $595.90, the remainder due to the Portland Trust Company, the owner in fee of the lot, which conveyed it to the plaintiff, who thereupon executed to Marton a mortgage of the premises. The plaintiff’s father, who was superintending the *162construction of the building upon the lot, suddenly died February 16,1910, but prior thereto the defendant advanced to him from the loan, $1,000. Between the time of Mr. Bean’s death and April 28, 1910, the defendant gave the plaintiff $85.40, paid for labor and material $240.71, charged as commissions $40 and $10, respectively, for securing the loan and disbursing the money, paid $15 for an abstract of the title to the lot, expended $4 in connection with the making of the mortgage, and $16 for insurance on the building, or $2,007.-01, that sum being $7.01 more than the loan. When the plaintiff’s father died the house was unfinished, and on June 9,1910, for the express consideration of $100, she executed to the defendant a quitclaim deed of the lot, which was not filed for record until September 14, 1910, in consequence of a mistake in the sealed instrument. The defendant, between June 13, 1910, and August 15th thereafter, paid out from his own money $1,061.07 in completing the dwelling. He, on October 5, 1910, agreed in writing to sell and convey to Elizabeth A. Mack the real property described, for which she stipulated to give $3,950, and then paid $100, which latter sum was given a broker for negotiating a sale of the premises. Mrs. Mack assumed the payment of the mortgage, then amounting to $2,052, agreed to pay Norman Bean, the plaintiff’s brother, $135 for labor performed upon the dwelling, and executed promissory notes for $1,663, payable in installments to the defendant who, by indorsement, converted them into cash, making a.profit of $601.93 on the sale of the lot.
The complaint substantially charges that in March, Í910, the plaintiff and the defendant entered into an agreement whereby he stipulated to furnish money enough to complete the house, and in consideration thereof she engaged to convey to him the lot which he *163was to sell and from the proceeds pay the indebtedness against the property, the expenses incurred in completing the building, retain a reasonable sum as commission for his services and pay over the remainder to her; that pursuant to that agreement she executed a deed of the real property to the defendant, who, complying with the terms of the contract, furnished the money to complete the building and sold and conveyed the premises, but upon plaintiff’s demand refused to' account to her for any of the profits, and that $50 is a reasonable sum for his services. The material allegations of the plaintiff’s primary pleading are controverted by the answer which for a separate defense asserts that the title to the lot was absolutely conveyed to the defendant who, by a parol agreement, stipulated to relieve the plaintiff of all liability to the mortgagee and on account of outstanding obligations for labor employed upon the building and material furnished for its construction, the terms of which agreement he had fully performed.
No written note or memorandum, signed by the defendant, was offered in evidence to establish a declaration of any beneficial interest in the real property alleged to have been held by him in trust for the plaintiff. Her testimony, which is corroborated by that of her witnesses, conforms to the allegations of the complaint. A fair consideration of that testimony tends to prove an agreement by the parties for a joint adventure, whereby the lot was conveyed to defendant in order that he might furnish the money necessary to finish the building, sell the real property, and divide the proceeds. After her father’s death the plaintiff paid $10 for paint used on the building, expended $90 which she procured from her mother in paying for labor employed on the dwelling, and in July, 1911, she *164also paid Ward Bros. $146.36 for material that went into the structure. The latter payment was made long after she executed her deed to the defendant. She also exercised a supervision over the finishing of the house and assisted in making a sale of the premises to Mrs. Mack.
A witness testified that the defendant informed him the quitclaim deed was executed by the plaintiff pursuant to an agreement that she was to have six months within which to redeem the property; but not having done so, all her interest in and right to the premises were extinguished.
So far as can be discovered from a careful examination of the testimony, there was no debt due or owing from the plaintiff to the defendant when she executed to him a deed for the lot. The defendant testified that $500 of the money obtained from Mr. Marton and advanced to Mr. Bean was expended by the latter in preparing a basement on another lot, upon which no building was erected by reason of the sudden death of the plaintiff’s father. The defendant may have considered a moral obligation rested upon him to see that the sum so diverted was restored to the building for the erection of which the money was borrowed, thereby augmenting the security upon the faith of which the mortgagee evidently relied when he made the loan.
1. The evidence shows the plaintiff paid $150 on the purchase of the lot, and had also discharged a few small installments of the consideration, prior to December 11, 1909, and was then owing $595.90 when the real property was conveyed to her by the Portland Trust Company. It is reasonable to suppose the value of the unimproved lot could not have been regarded as adequate security for a loan of $2,000, either by the defendant or Mr. Marton, but that said sum was to be *165expended in erecting a building on the premises. "Whether the defendant believed he should protect the interests of the mortgagee is only conjectural, but be that as it may, there was no debt, so far as can be determined from the testimony, due from the plaintiff to the defendant by reason of the money, which he asserts, but she denies, her father diverted, so that her conveyance of the lot could be regarded as a mortgage, though in form a quitclaim deed. Thus no unextinguished pre-existing debt remained and no new debt was intended to be created when the conveyance was given, and for these reasons the deed was not designed as security, and cannot be declared in effect a mortgage : Grover v. Hawthorne Estate, 62 Or. 77 (114 Pac. 472, 121 Pac. 808).
2. The complaint does not aver nor does the plaintiff’s testimony show that after selling the real property and obtaining the consideration for it, the defendant, pursuant to the oral agreement, or otherwise, declared a trust as to the money in plaintiff’s favor. There was therefore a failure to establish an express trust in the real property: Section 804, L. O. L.; Cooper v. Thomason, 30 Or. 161 (45 Pac. 296); Barger v. Barger, 30 Or. 268 (47 Pac. 702); Parrish v. Parrish, 33 Or. 487 (54 Pac. 352); Richmond v. Bloch, 36 Or. 590 (60 Pac. 385). Though a different rule may obtain in other jurisdictions, the principle is settled in Oregon that a parol trust in a sum of money, obtained from the sale of land which was made pursuant to an oral agreement to hold the fund for the beneficiary, can arise only by a specific declaration of the trustee to that effect and made after the sale: Cooper v. Thomason, 30 Or. 161 (45 Pac. 296); Martin v. Martin, 43 Or. 119 (72 Pac. 639). In the absence of an averment of that kind substantiated by adequate *166proof, the trial court committed no error in denying the relief sought.
Substantially the complaint alleges that the plaintiff was the owner of certain real property subject to a mortgage of $2,000; that in February, 1910, the defendant had in his possession about $300 remaining of the proceedings of the mortgage which he held for the erection of a dwelling-house then under construction on the tract; that during March of that year plaintiff and defendant agreed that the latter should apply the money in his hands and furnish additional funds necessary to finish the building, and that in consideration therefor the plaintiff should make, execute and deliver to the defendant a warranty deed conveying the property to him, and on completion of the house the defendant should sell the property for the best price possible, out of the proceeds of which he should discharge the mortgage, reimburse himself for the money he had advanced, retain a sum sufficient to compensate him for his services, and pay her the balance. She further avers that she executed and delivered the deed to him about September 14, 1910, and that he afterward sold the property for $4,000, and has failed to account to her for the proceeds which she says on information and belief amounted to about $1,500.
*166The decree is therefore affirmed. Affirmed.
Mr. Justice Burnett, Mr. Justice Harris and Mr. Justice McBride concur.