Court Opinion

ID: 3985169
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:41:24.091836+00
Date Added: 2024-06-11T07:44:18.542758
License: Public Domain

I concur in the result.
The judgment of the trial court that plaintiff is entitled to the use of the water is amply supported by the record and this issue should not be involved when and if the action is re-tried.
While the parties have argued to this court the question of an easement by implied grant, I find nothing in the record that this was the theory adopted by the trial judge. Certainly the findings and judgment would not so indicate and, as announced by Mr. Justice WADE in his opinion, the facts would not justify any such conclusion.
I believe we need only concern ourselves with the questions of whether or not L.L. Bagley had an interest in the private ground, and the pipeline. If so, then plaintiff acquired this interest and he would be entitled to the use of the pipeline and the easement for maintenance, without interference by defendants. The problem of an easement by implied grant is not even suggested by the factual picture. If L.L. Bagley had no interest to convey, then plaintiff acquired nothing by implication or otherwise. If he did have an interest to convey, then plaintiff acquired it by purchase and not by implication. *Page 526 
In order to give the reader a better understanding of the facts out of which this controversy arises, I am including in this opinion a sketch of the land involved, showing the location of the respective 40-acre tracts and the course of the pipeline:
[EDITORS' NOTE:  SKETCH IS ELECTRONICALLY NON-TRANSFERRABLE.]
The record furnishes the following history of the state lands: On February 15, 1930, Edward D. Dunn entered into a contract with the State of Utah for the purchase of the four 40-acre tracts indicated on the sketch as "state lands." This contract was later assigned to L.L. Bagley, the date of assignment on the official document being incorrect. The contract was forfeited September 30, 1930, but was reinstated on January 5, 1933. On November 15, 1933, the contract was assigned to Elaine N. Bagley, wife of L.L. Bagley, and from that date until May 2, 1938, the holder of the contract was repeatedly notified by the State Land Board of default in the terms. On this latter date the contract was forfeited by the state for non-payment, and the contract was cancelled. On the 31st day of July, 1939, some 14 months after the state contract had been cancelled, L.L. Bagley sold the three 40-acre tracts to the plaintiff by a written contract. Included in the same contract was a sale of the pipeline and right of way across the private land for purpose of maintaining the water installations. Plaintiff subsequent to his purchase learned that the state contract had been cancelled, that his contract *Page 527 
with L.L. Bagley for purchase of the state lands was practically worthless, and that it had been sold to one Free. On February 10, 1941, plaintiff effected a settlement with Free and purchased the contract back from him. On the 20th day of February, 1941, plaintiff's mother entered into a contract with the state to purchase the same four 40-acre tracts, and on the 23rd day of January, 1942, she assigned the contract to the plaintiff. This contract is still in force and effect.
The abstract of title covering the private 40-acre tract, insofar as material to this decision, shows the following conveyances: On April 14, 1931, Wallace B. Mathis and wife conveyed the property to the National Security Corporation. L.L. Bagley was president of that corporation. Approximately two years later and on the 2nd day of May, 1933, the National Security Corporation conveyed to the Safety First, Inc., a corporation. L.L. Bagley was also the president of this corporation. This latter corporation deeded the property to Almorean Bagley on July 8, 1935. The title remained in Almorean Bagley until he conveyed to defendants on May 2, 1945.
The trial court made two findings that I have grave doubts are supported by the present state of the record. The court found that the two corporations, the National Security Corporation and the Safety First, Inc., held the private ground in trust for both Almorean Bagley and L.L. Bagley. A finding was also made that Almorean Bagley and his half-brother L.L. Bagley were jointly interested in both the public and the private lands. I would have no difficulty in sustaining the trial court if the pleadings and evidence sustained these two findings. Neither would I encounter any difficulty in sustaining the latter finding if the evidence supported the former.
There are many facts and circumstances that indicate L.L. Bagley had an interest in the private ground and the pipeline. However, in my opinion they fail to establish the original trust relationship found by the trial court. It may be the trial judge had additional evidence upon which he *Page 528 
based his findings, but if so the record is not before us. It appears that a hearing was held on an order to show cause why a temporary injunction should not be issued. The court issued a temporary injunction preventing defendants from interfering with plaintiff's right to the use of the pipeline, but the evidence to sustain that order was not certified to this court.
If the evidence were sufficient to justify the court in finding that the corporations were holding the property in trust for both Almorean and L.L. Bagley then the facts detailed hereinafter in this opinion would be sufficient to sustain a finding that when the property was deeded to Almorean Bagley in 1935 the rights of L.L. Bagley were not extinguished.
The only evidence I can find in the record in regard to the trustee status of the corporations is the following given by Almorean Bagley:
"The National Security didn't own it. They were acting as trustee to preserve the title for three or four of us buying the ground.
"I didn't purchase it (private property) from the Safety First Corporation. The deed was given to me by the Safety First before that, but the property was mine from the beginning. It was being held in trust.
"They (the corporations) were the trustees for us fellows that were buying this ground, the way it was some of us owed money on the place, some of the fellows in Wyoming, and the title was transferred to the National Security Corporation, trustee, and when they paid for the ground the title was to be turned to them."
The evidence indicating part ownership by L.L. Bagley was substantially this: In 1931 Almorean Bagley went to St. George, Utah, to operate a venture for himself and his half-brother, L.L. Bagley. The operation involved use of the land under contract of purchase by L.L. Bagley, from the State of Utah. Some difficulty had previously arisen over the use of the water developed on the state land, and L.L. Bagley advised Almorean Bagley it would be necessary to obtain title to the private land to avoid difficulty. Almorean Bagley testified he bought the land for the purpose *Page 529 
of obtaining the water, but the title was taken in the name of the National Security Company. It is worthwhile noting that Almorean Bagley was unable to state whether or not stock in the National Security Company had been given the seller in consideration for the sale. Another significant fact is that although Almorean Bagley claimed this corporation held the property in trust for "three or four of us buying the ground," he named only two parties and the corporation assumed ownership of the property at least to the extent of selling approximately six acres. After holding the title for some two years, the National Security Company conveyed to the Safety First, Inc., and L.L. Bagley was the president of both companies. The record is silent as to the respective interests of either of the companies or the reasons for transfer. In 1935, the record shows the following transactions: On the 8th day of July, 1935, the Safety First Corporation deeded the property to Almorean Bagley; this deed was executed by L.L. Bagley as president of the corporation; on the 23rd day of July, 1935, L.L. Bagley executed a lease on the state lands to Almorean Bagley who had previously on the 10th day of July, 1935, mortgaged the private land, hypothecated the lease, to the Bank of St. George to secure a loan, the proceeds of which were used to improve the property.
In 1936, L.L. Bagley left St. George, and for all practical purposes, abandoned the project as, according to him, he left the property in charge of a woman secretary of the Utah-Idaho Sugar Company. In March, 1937, L.L. Bagley leased the premises including the state and private lands and water rights to plaintiff for a term of five years. This lease was signed and executed by L.L. Bagley only, as ostensible owner, and with the consent and approval of Almorean Bagley. Not only did Almorean Bagley permit the plaintiff to believe L.L. Bagley had the right to lease the property, he ratified his act in so doing by obtaining some supplies, and delivering them to plaintiff to comply with the lessor's obligation under the lease. *Page 530 
The lease arrangment apparently continued until 1939, at which time the state lands and pipeline and easement were sold to plaintiff by L.L. Bagley. This sale was known to Almorean Bagley, as the record shows he had a discussion with L.L. Bagley concerning the sale and a discussion with Free concerning Free's purchase of a questionable contract. Almorean Bagley took no steps to disaffirm the right of L.L. Bagley to sell the pipeline or easement. On the contrary, it can be fairly inferred from the record that, being aware of the deception practiced by L.L. Bagley, he made no claim that L.L. Bagley had no authority to sell and permitted the plaintiff to settle with Free. Certainly, up to this point of the dealings, Almorean Bagley had never denied L.L. Bagley's right to deal with the project as part owner, including both private and state property. Accordingly, if L.L. Bagley had no interest in the private ground, and pipeline, Almorean Bagley's acts and conduct were misleading and most unusual.
Plaintiff's settlement with Free was made in 1941, and so for four more years Almorean Bagley made no effort to interfere with plaintiff's use of the easement, made no claim to the pipeline, and never questioned L.L. Bagley's authority to sell. And as far as I can ascertain from the record, Almorean Bagley never at any time denied that he and his half-brother L.L. Bagley, were not jointly interested in the promotional venture. He did claim he purchased the pipe and paid for the private ground. The claim that he paid for the pipeline is considerably weakened by his admission that the pipe was paid for in 1945 from the proceeds of the sale of the private land. His claim that he paid for the private ground is inconsistent with other parts of his testimony where he states he paid no consideration to either corporation, that he was not sure whether or not Mathis took stock for his interest in the land, and that the consideration for the land, $2,040, was paid at a time when, according to his testimony he and other fellows owed money on the place and the National Security Company was to hold *Page 531 
the property until paid. The record negatives the fact that either of these corporations was paid.
All of these facts are detailed for the purpose of showing that for at least eleven years, both L.L. and Almorean Bagley had by acts and conduct dealt with the property as though each had an interest in the venture. L.L. Bagley's repeated exercise of ownership over the property and Almorean's acquiescence therein are inconsistent with a claim of absolute ownership in Almorean.
I believe I have detailed enough of the evidence to show why I believe this matter should be referred back to the trial court for further evidence. We have a situation where one half-brother sells the pipeline to plaintiff in 1939, and the other sells it to defendants in 1945. Part of the line is on state land which, at the time it was installed, was claimed by L.L. Bagley and part was installed on private land claimed by Almorean Bagley. The true relationship with respect to ownership and right to deal with the property should be developed. If the evidence establishes any legal or equitable right running to the present litigants, not presently pleaded, the trial court should permit the pleadings to be amended.
From the record before us, we are not concerned with the right of bonafide purchasers of the private land. Neither defendant claimed or testified that he purchased the land without knowledge of the easement. While the record title was in Almorean Bagley, there are references in the chain of title to L.L. Bagley and from 1937 to 1945, plaintiff was openly using the pipeline and easement to supply water to the cabins. Even in their answers defendants alleged they purchased the right to use the water which was collected and used on land being purchased by plaintiff, and alleged the purchase of the pipeline which they knew was partially on plaintiff's land. The bill of sale itself was sufficient to put the purchasers on notice that there might be a claim to the use of the line for conveying water to the cabins. *Page 532