Court Opinion

ID: 6474111
Source: CourtListenerOpinion
Date Created: 2022-06-26 22:33:28.772223+00
Date Added: 2024-06-11T15:53:54.578891
License: Public Domain

CUNNINGHAM, J.,
Dissenting.—I sincerely regret that I cannot agree with the conclusion reached by the other mem*455bers of this court in this cause. I fully realize that a dissenting opinion establishes no legal principle, but it is a consolation to the dissenter and a medium of expressing his personal views in which he alone is interested—a kind of shady avenue leading to an imaginary goal of personal vanity. With this understanding of my reasons for presenting my views of this cause, I will not endeavor to more than state wherein I principally differ from the other members of the court, with few reasons given in support of my views, I will make no general statement of the facts, but will rest upon the statement of facts in the principal opinion.
The point upon which I differ from the other members of the court arises upon the effect given to the transaction by which the shares of stock were transferred by Nielsen to Steinfeld, and particularly the effect to be given to the instrument bearing date June 29, 1900, by the terms of which Steinfeld and the Nielsen Mining & Smelting Company on its face promised to pay to the Nielsens, upon certain conditions, the sum of $10,000. The majority of the court, treating the entire transaction as an absolute sale of the stock with the other property transferred at that time, gave no effect to the above-mentioned instrument other than a promise to pay a specific sum. I think that instrument should be given the effect of a declaration of trust and treated as such limiting the rights of Steinfeld in the title to the stock acquired by the bill of sale given to him by Nielsen and wife of the same date. The instrument recites the previous transactions as a consideration for its execution, recognizes that the Nielsens have fur1 ther equities in the stock upon the happening of one of two contingencies, viz., a profitable operation of the corporate properties or a sale of the properties. An equity existed until the happening of one or the other of the conditions. Steinfeld held the stock subject to this equity in the Nielsens. The Nielsens would be benefited by the sale of the corporate properties. Steinfeld held the legal title, with complete control over the shares of stock. In the light of the subsequent sale of the corporate properties, Steinfeld held this stock for the designated purpose of facilitating that sale. The $10,000 was to be paid out of the accumulated profits from operating the properties, if operated at a profit, or out of the proceeds of the sale of the corporate properties. I think no other fair *456construction could be placed upon the instrument under consideration. It is clear, then, that by the entire transaction we have a designated beneficiary, the Nielsens,- a designated trustee, Steinfeld, who is not the beneficia^; property sufficiently identified to enable title thereto to pass to the trustee; and the actual delivery and legal assignment of that property to the trustee, with the intention of passing legal title thereto to him as trustee. We therefore have a transaction presenting all the elements of an express trust created in the shares of stock. Brown v. Spohr, 87 App. Div. 522, 84 N. Y. Supp. 995; Martin v. Funk, 75 N. Y. 134, 31 Am. Rep. 446; Young v. Young, 80 N. Y. 422, 36 Am. Rep. 634; Sullivan v. Sullivan, 161 N. Y. 554, 56 N. E. 116; Matson v. Abbey, 70 Hun (N. Y.), 475, 24 N. Y. Supp. 284.
A trust is an equitable obligation, either express or implied, resting upon a person by reason of a confidence reposed in him to apply or deal with the property for the benefit of some other person or for the benefit of himself and another or others, according to such confidence. McCreary v. Gewinner, 103 Ga. 528, 29 S. E. 960, 963. As further defined, a trust arises “where there are rights, titles and interests in property distinct from legal ownership. In such cases the legal title, in the eye of the law, carries with it to the holder absolute dominion; but behind it lie beneficial rights and interests in the same property belonging to another. These rights, to the extent to which they exist, are a charge upon the property and constitute an equity which a court of equity will protect and enforce whenever its aid for that purpose is properly invoked.’.’ Seymour v. Freer, 75 U. S. (8 Wall.) 202, 19 L. Ed. 306; Crosby v. Colton, 5 Tex. Civ. App. 583, 24 S. W. 343.
We find that the trustee received, as apportioned to that stock, $33,300, a sum far in excess of the sum mentioned to be paid by him to the Nielsens on condition of a sale of the property. This sum was not a profit but a division of the assets of the corporation and a diminution of the capital of the corporation which the stock represented. When this sum reached the possession of the trustee, he held it upon the same trusts that he held the stock, of which it was a part of the value. Steinfeld then held the money, together with the stock, as representing the full value of the trust property. To say that he could discharge his trust by paying to the beneficiaries *457a part of the money so received by him, and thereby acquire a perfect title to the shares of stock and the balance of the money so acquired, all relieved from the trust, would permit him, as trustee, to gain a personal advantage or profit from his office or position of trustee, which no court of equity will permit. 1 Perry on Trusts, 6th ed., sec. 427.
If it be contended that Steínféld only declared that he would pay $10,000 of the sum received by him from the proceeds of a sale of the corporate properties, and therefore all the beneficial interest the Nielsens had in the property extended to that sum alone, and that Steinfeld took the beneficial, as well as the legal, interest in such balance, that contention is foreclosed by the general rule, viz.: “If, upon a conveyance, devise or bequest, a trust is declared of part of the estate only, or the purposes of the trust do not exhaust the whole beneficial interest, the trust in the remaining part or interest will result to the settlor or his heirs, for the reason that a declaration of trust as to part is considered sufficient evidence that the settlor did not intend the donee to take the beneficial interest in the whole, and that the creation of the trust was the sole object of the transaction.” 1 Perry on Trusts, 6th ed., see. 152, p. 240; 3 Pomeroy’s Equity, 3d ed., see. 1034; 39 Cyc. 244, 4 cases cited in note 6.
To permit the trustee to require the beneficiary to release him from all demands, under the circumstances disclosed, would amount to permitting him to make a very large profit from his office, which cannot be allowed. 1 Perry on Trusts, 6th ed., sec. 427. The attempted release upon receipt of the $10,000 executed by Mrs. Nielsen has no other effect than a simple receipt for that sum. 2 Parsons on Contracts, 9th ed., 657, and note “u” on page 658.
An examination of the complaint and the prayer for relief will disclose sufficient authority to warrant an affirmance of the judgment upon the theory of a trust relation.
Por these reasons I think the judgment of the lower court was proper and in full accord with law and equity.