Court Opinion

ID: 3492071
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:00:23.27365+00
Date Added: 2024-06-11T14:14:42.556848
License: Public Domain

The purpose of this bill is for an accounting and to impress a trust on an 80-acre farm in the township of Shelby, Macomb county, Michigan. On January 13, 1910, Frederick Bliss, the plaintiff, then an infant, was injured in an accident. A suit for damages followed in which his mother, Melvina Bliss, one of the defendants here, was his next friend. Settlement of this suit was made by the payment of $2,000 to Melvina Bliss, which amount was reduced by lawful expenditures to the sum of $1,000, which she thereafter held for the use and benefit of the plaintiff and with his consent invested it in real estate in the city of Detroit. The mother, Melvina Bliss, was a widow, and the plaintiff lived with her until his marriage. In 1912, Lawson Collier came into the home. He had been married twice and at that time had a wife living from whom he was not divorced. He persuaded Mrs. Bliss to allow him to live with her in a relation that he termed a common-law marriage. He quickly acquired an *Page 223 
influence over her which he used in manipulating the trust property for his benefit. In November, 1916, he paid up some indebtedness on the Detroit property which Melvina Bliss held on a contract, and secured a deed in which he and Melvina Bliss were the grantees. In April, 1920, they traded this property for the farm in question, the title to which was taken in the name of Lawson Collier. In August, 1918, the plaintiff began a suit in chancery in Wayne county against his mother for an. accounting, for a discovery as to the trust fund and for a determination of the amount due to him. Melvina Bliss, the defendant, filed an answer but did not appear at the hearing and the plaintiff was given a decree for $1,000. In July, 1922, Lawson A. Collier died, and in November, 1922, this suit was begun for an accounting and to impress a trust on the farm. All of the defendants except Melvina Bliss and the Mt. Clemens Savings Bank are heirs of Lawson A. Collier, deceased. After hearing the testimony the circuit judge denied an accounting against the estate because of the plaintiff's laches, but gave him a lien upon the farm for $1,000 subject to the mortgage of the Mt. Clemens Savings Bank. From this decree both parties have appealed.
The plaintiff contends that notwithstanding the decree against his mother in the Wayne circuit, he is entitled to follow the trust fund into the Macomb county farm and to have an accounting as to Collier's dealings with that fund. On their part the defendants claim that the plaintiff is not entitled to a lien on the farm for $1,000; that all of his rights were adjudicated in the suit against his mother; that having elected to sue her alone he cannot now in this action assert a claim involving the same matter against the Collier estate.
The testimony shows beyond question that Melvina *Page 224 
Bliss came into possession of $1,000 belonging to the plaintiff and that she invested it in various Detroit properties with his consent before and after he became of age, and that this fund through the manipulations of Lawson Collier was put into the Macomb farm, the title to which Collier took in his own name. Collier was not a good faith purchaser for value, but took the title with full notice of the trust estate and with the fraudulent purpose to defeat it. Under these circumstances he took the property subject to the trust. The cestui then had a choice of two remedies. He could repudiate the trust as to the property and hold the trustee personally accountable for the breach or he could pursue Collier and ask a court of equity to subject the property to the trust. He chose the latter remedy and began this suit. He was clearly entitled to this remedy unless estopped by the previous suit and decree against his mother, Melvina Bliss, in the Wayne circuit court. That suit was not against the trustee personally and was not instituted and maintained because of a breach of the trust. The bill asked for an accounting and for the location of the trust fund, the legal title to which at that time was still in the trustee. The court made an accounting and by its decree fixed the amount of the estate in the hands of the trustee but did not terminate the trust. In fact, it established the trust which under the pleadings was in dispute. So that when the property into which the trust fund had been invested was exchanged for the farm, this plaintiff was still the equitable owner of the fund and could rightfully insist that the farm be subject to a trust to the extent of his interest as fixed in the former decree against his mother. In so holding we have not overlooked the rule that by taking a judgment against his trustee for the price of trust property wrongfully sold, a cestui que trust
thereby ratifies the sale and waives *Page 225 
his right to pursue the purchaser. 25 Rawle C. L. p. 1351; 39 Cyc. p. 535, note 10, and cases cited.
The reason for the rule is found in the fact that when there has been a breach of the trust by wrongful sale, thecestui has a choice of two remedies. He may hold the trustee personally accountable or may pursue the fund in the hands of the purchaser. If, with full knowledge of the facts, he elects to sue the trustee, he thereby ratifies the sale and waives his right to pursue the purchaser. In the instant case, at the time the plaintiff began the former suit against his mother, there had been no sale of the trust property; there had been no misappropriation or breach of trust and the plaintiff had no action against Collier and no action against his mother, except for an accounting. He had no choice of remedies and could not therefore make an election. What he did at that time is not at all inconsistent with his action in beginning the present suit. In our judgment he is not estopped from asserting his right to have a trust impressed upon the farm in question, but that by reason of the former decree it is limited to the amount therein allowed, including interest at the legal rate.
The question of laches is not involved and therefore not discussed.
The decree of the circuit court is modified as to the disallowance of interest. In all other respects it is affirmed. A decree will be entered in this court in accordance with this opinion. The plaintiff will have costs.
BIRD SHARPE, MOORE, STEERE, and FELLOWS, JJ., concurred with McDONALD, C.J.