Court Opinion

ID: 6667779
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:07:20.400571+00
Date Added: 2024-06-11T16:00:23.768299
License: Public Domain

RESPONSE TO PETITION EOR REHEARING.
Opinion by
Lewis, J., Beatty, C. J.,
concurring.
In the petition for rehearing in this case, it is urged with much .earnestness by the attorneys for respondent that the conveyance from Jones to" Osborne, with the contemporaneous agreement between them, raised a trust in favor of Jones; that the relation of trustee and cestui que trust was thus established between them as to the seventy feet to be reconveyed. It is then claimed that Jones, the cestui que trust, had the right and was possessed of the power either to convey in presentí, or bind himself to convey at some future day, his entire interest in the trust property, even before it was recovered from the defendant; that he did covenant to convey one-seventh of his interest to the plaintiff; that defendant having received a conveyance from Jones and Osborne of all their interest in the property, with notice of the trust, and of Jones’ agreement to convey to the plaintiff, is bound by the trust and may be compelled to convey to him in accordance with Jones’ obligations.
In our opinion it is a matter of no consequence whatever to the plaintiff in this case, whether the relation of trustee and cestui que *47trust existed between Osborne and Jones or not; "and ‘we are of opinion at present that no such relation did exist. The common law which prevailed in the Territory of 'Nevada at the time of the execution of that deed, unmodified as it-was by any such statute as that which we now have, forbade the transfer of any disputed title or right, whether relating to real or personal property by the person out of possession, and made all such transfers utterly void. (4 Blackstone’s Commentaries, 135 ; Hyatt v. Thompson, 3 Sanford’s R. 430; Rawle on Covenants for Title, pp. 32-33.) The deed in question from Jones to Osborne was executed whilst the defendant was In open, adverse possession of the premises, and indeed it was executed for the express purpose of enabling the grantee to bring suit to recover the possession of the premises sought to be recovered. If, therefore, we should follow the rule of the common law, the deed in question would have to be treated as a nullity. Whether it was valid or not, however, is a question not necessary to be determined in this action, because it can make no difference to the plaintiff, so far as his rights in this action are concerned, whether it was void or not. It may, therefore, be left entirely out of this case without injury to him, and without any modification of his rights. Leaving Osborne out of the case, and passing over the question as to his duties and responsibilities, and Jones’ rights in his character of cestui que trust, which are matters not necessary to be discussed in the disposition of this appeal, we . have then to determine what interest or rights the plaintiff acquired by the instrument executed to him by Jones, and how those rights were affected by the conveyance and compromise which subsequently took place between Osborne, Jones and the defendant.
The learned Judge below treated the instrument from Jones to the plaintiff as an absolute obligation to convey ten feet of the Yellow Jacket ledge to the plaintiff, whilst in fact the obligation was merely contingent — depending entirely upon a recovery by Jones from the defendant. It is clear beyond all question that the plaintiff was to have nothing unless Jones’ title proved to be superior to that of the Yellow Jacket Company. Hence the only interest which the plaintiff acquired by that instrument was an interest in the action of ejectment which was then pending against the defend*48ant in the District Court, than which nothing could be more uncertain or precarious. Of this the plaintiff was fully cognizant. He knew that Jones had obligated himself to convey nothing but the doubtful fruits which might be realized from a lawsuit; that he could obtain nothing except through a decision of the Courts favorable to the Jones title.
It is conceded that no such decision was ever had, that the action instituted to test the validity of that title was compromised, and that a judgment was rendered in favor of the defendant for the costs. If the failure to recover in that action was bona fide, and not owing to any breach of faith or unwarrantable negligence on the part of Jones, the plaintiff would have no right of action, even against him — much less against the defendant. But it is claimed Osborne and Jones prevented a recovery by the compromise of the action against the defendant, and the conveyances which they executed to it at that time; that they had not the authority or right to compromise the plaintiff’s rights, or to defeat them by a conveyance of their interest in the property to the defendant. True, they had no such right; but we are fully of the opinion that the effect of the compromise and conveyances was to defeat the happening of the event upon which the plaintiff was entitled to a conveyance, and to confine his remedy to an action for damages against Jones. The legal title to whatever interest Jones or Osborne had to the mining claim having passed to the defendant by means of the conveyances executed to it, it is clear that they cannot maintain an action of ejectment against it; and as the plaintiff has a mere equity, if anything, he can maintain no such action. Hence, we conclude the event cannot transpire upon which the plaintiff was entitled to a conveyance of the ten feet of ground which he is claiming. But the defendant having been a party to the transaction by which the recovery against it wras rendered impossible, can a Court of Equity for that reason treat the case as if a recovery had been had, and hold the defendant responsible accordingly ? We think not. If it were shown that by fairly prosecuting an action against the defendant, Jones would probably have recovered the interest claimed by him, but instead of doing so, entered into a compromise by means of which the defendant obtained judgment, the plaintiff could *49doubtless have maintained his action against him for damages. In two cases only, however, could the defendant render itself liable to have the trust forced upon it, and a specific performance decreed against it: First, by fraudulently or wrongfully preventing the transpiring of the event upon which the plaintiff was entitled to a conveyance ; and, Second, by purchasing an estate charged with a trust, with notice of the existence of such trust. If the compromise were entered into in fraud of plaintiff’s rights, and the defendant was a party to that fraud, knowing Jones’ title to be good, and superior to its own, clearly a Court of • Equity would force the trust upon it, and compel a conveyance to the plaintiff. But the Yellow Jacket Company, like any other litigant, had a perfect right to compromise any action instituted against it — to buy its peace, to protect itself from protracted and vexatious litigation — by any fair means within its power. This is what it seems to have done. It is not charged in the bill in this suit that there was any fraud in that compromise, or that it was entered into for the purpose of defrauding the plaintiff or defeating his rights. If by fairly compromising an action against it any rights of the plaintiff were destroyed, that was a misfortune resulting from the peculiar nature of his rights, rather than from any wrong on the part of the defendant. It may have considered the Jones claim or title to the premises occupied by it utterly worthless, and yet compromised the action brought against it upon that title, for the purpose of ridding itself of harassing litigation. If such was in fact the case, it would be monstrous injustice to hold that such compromise amounted to an establishment of the superiority of the Jones title over that of the defendant, and that thereupon the plaintiff is entitled to recover.
True, that he had not recovered, or could not recover from the defendant, would be no defense to Jones, if he defeated such recovery by his own act, for he had no right to place himself in a position where he could not fulfill his obligations to the plaintiff; but the defendant was under no such obligations. It did what it clearly had a right to do, regardless of the effect it might have upon the rights of the plaintiff. There was nothing, therefore, in the action or conduct of the defendant which constitutes any answer to the objection that the fact upon which the plaintiff was entitled to a *50conveyance has not yet transpired, or that will relieve him from the necessity of showing a right of recovery by the strict letter of the instrument executed by Jones to him.
The same objection to the plaintiff’s right of recovery may be urged, if it be attempted to charge the defendant as a purchaser of the Jones claim with notice of the existence of the instrument which had been executed to the plaintiff. But it was held by the Court below that the question of title between Jones and the defendant could be determined in this suit, and that if it were found that the Jones title was superior to or better than defendant’s, the plaintiff would be entitled to recover precisely the same as if that fact had been determined in the action of ejectment which was compromised by the parties, or as if the fact had transpired upon which the plaintiff’s right to a conveyance depended. We are, however, fully satisfied the Court below was wrong upon that point. The defendant has a right to have the question of title between itself and Jones determined by a jury in an action of law. It cannot be deprived of that right by the findings of the Court in a proceeding in equity. The defendant being in possession of the property, there is but one way by which the title between it and another claiming adversely can be tried, and that is by an action of ejectment, -and the plaintiff in such action can rely only upon a legal title. A mere equitable right or title would not be sufficient to entitle him to recover. Here the plaintiff has a bare equity, and his bill is filed simply to obtain a decree to force a trust upon the defendant, and to compel its execution. The question of title between Jones and defendant cannot, therefore, be determined in this suit. We are aware that the compromise and the conveyance from Jones to the defendant would constitute a complete defense to an action of ejectment, but, as we stated before, the defendant is not responsible for that fact.
It is undoubtedly true that equity will enforce a trust not only against those persons who are rightfully in possession of trust property, but also against all persons who came into possession of the property bound by the trust with notice of such trust. But the trust can only be forced upon the legal estate acquired by the purchaser. It cannot be enforced so as to bind other property belonging to him. It simply follows the legal estate to which it is attached. *51When that is destroyed the trust is extinguished. Until it is legally established that the Jones title is superior to that of the defendant, there is no evidence that the defendant acquired anything by the conveyance from Jones. It was in open adverse possession of the property, upon which.the plaintiff is attempting to force the trust, at the time it took the deed from Jones. The defendant doubtless acquired whatever interest he had in the Yellow Jacket ledge, but what that interest ivas, if anything, has not yet been properly determined. It is quite evident that no Court of Equity will force a trust of this character upon the defendant, until it is proven that it acquired some estate or property from its grantor, for if its grantor had nothing, the plaintiff is entitled to nothing. It is claimed that in a proceeding of this kind, if the party against whom the trust is sought to be enforced claims by a superior right of his own, it is necessary for him to set up such title; that in this case the defendant has not set up or alleged that it had any such superior title, or any other than that which it acquired from Jones; that by the pleadings it is invested with the possession and with no other title, except that which it acquired from Jones. We can draw no such conclusions from the pleadings presented to us.
The defendant in its answer denies that Jones ever took up, located or entered into possession of any part of the ledge occupied by it, (which is a denial of the allegation in the bill) but admits the location of a surface claim in the vicinity of such ledge; then it is explicitly alleged that the conveyance from Jones and Osborne was taken simply for the purpose of compromising the action which had been instituted against it, and that the Jones title was not a valid claim to the premises occupied by it, or any part thereof, and was never so regarded; that in taking such conveyance it was not the intention to acknowledge the validity of the Jones title. There is certainly sufficient in the pleadings to show that the defendant claimed the mining ground by title superior to that asserted by Jones, and in its answer it explicitly denies that Jones had any valid title. Again, the very instrument upon which the plaintiff hinges all his rights shows that the defendant was in possession and • claiming adversely at the time of the execution of the deed, and that he was entitled to an interest in the premises only upon a re*52covery from the defendant, and the pleadings clearly show that no recovery was ever had. Hence, the defendant, having possession all through and having recovered judgment in the action brought against it upon the Jones title, the presumption is surely very strong that the defendant had the superior title.
Rehearing denied.