Gardella v. Meeker

1. Trusts — Transaction with Beneficiary — Validity—Fraud.—J. W. and M. W., husband and wife, dying left a daughter, M. I. W., as-their sole heir. Though there were no debts owing by the estate, defendant, a neighbor and friend of the parents, became administrator for the sole purpose of collecting rent, and recovering possession of certain land. Soon afterwards he procured from the heir a lease of the land, and before that expired he procured an extension. Held, that defendant became trustee for the heir, and was estopped from denying that he was. trustee, and that the lease was void, as contrary to public policy, even in the absence of fraud, at the mere will and option of the beneficiary. 2 Same — Duration of Trust — Confidential Relations. — Defendant claiming that the extension was after the trust relation had ceased, held, that it appearing that he had been trustee of both father and mother, and administrator of both, and as a friend of the family, they and the daughter had put their trust in him, and he had by virtue of the trust possession of the property; that the daughter was far away, and had no personal knowledge of her rights, that her correspondence in regard to the property was solely with him, and the relation of trust and confidence continued to the time of the extension. 3. Same — Kbaud — Ppestjmption. — In such a ease, fraud for which the lease would be voidable will be presumed; and in the absence of the strongest proof of good faith and want of fraud, the presumption will not be rebutted. 4. Same. — Avoidance op Contbact. — The daughter having conveyed the land to plaintiffs by a warranty deed, this act avoided her lease, and all rights of defendant, and the title of plaintiffs gave them the right to re- • cover.

Appeal from the District Court holding terms at Tacoma. Second District. The complaint alleged that in November, 1882, one Mary I. Walker was owner and in possession of the real estate described in complaint, and that on that day she sold it to plaintiffs for five thousand dollars, executing a deed for the same with full covenants of warranty, and that defendant wrongfully claimed to own the land. Prayer for possession, damages for withholding, and judgment for rents, issues, and profits. Defendant in his answer admitted seisin in Walker and execution of deed to plaintiffs by Walker, but denied all other allegations. For new matter, defendant pleaded a lease by Walker to defendant, dated March 1,1880, whereby she leased said premises to defendant from said date until March 1, 1883, on the conditions stated in the lease, Walker reserving the right to terminate the lease at the end of each year upon giving three months’ notice to defendant; and that on October 21, 1881, the lease was extended by agreement in writing from October 21,1881, until March 1, 1886, and that the lease and extension were duly recorded; and that under the lease defendant went into possession, and with plaintiffs’ knowledge made permanent improvements on premises prior to plaintiffs’ deed, and that defendant duly complied with all the conditions of the lease. Plaintiffs for reply averred that Mary I. Walker acquired title to premises by descent, on death of her father, John Walker, in December, 1869, and that she, being an infant at said date, removed from the territory to the Atlantic states, where she resided ever since. That in April, 1879, defendant was appointed and qualified as administrator of John Walker’s estate in this territory, and acted in that capacity until July, 1880, and as such administrator, and also as agent for Mary I. Walker, undertook to care for and manage the property for her interest and advantage. That Mary I. Walker at the time of her father’s death was only eleven years of age, and at no time since and up to the time hereafter stated had any knowledge or means of knowledge of the condition or value of said premises or of its rental value, but reposed entire confidence in defendant, and in his statements concerning the premises, and the value of the same, and depended on him for information and guidance in her actions relating thereto, all of which was known to the defendant. That while acting as such administrator and agent, defendant represented to her that former occupants of premises were in arrears of rent, and that he had taken possession; that premises were of little value and would be difficult to rent, but that he would pay two hundred dollars per annum rent for three years; and that defendant sent to her for execution the lease set forth in his answer, and that she, relying upon defendant’s representations, signed the lease. That similar false representations were made to her by defendant when he procured an extension of the lease in October, 1881, and that she did not discover the fraud, concealment, and misrepresentations of defendant until November 29, 1882, whereupon she demanded of defendant the cancelation of the lease and extension, which he refused. That Walker thereupon sold and conveyed the premises to plaintiff Gardella by warranty deed against all encumbrances, who thereafter sold an undivided half to plaintiffs Wagner and Farquharson. After trial the court found as follows: 1. That at the time of the making of the so-called lease from Mary I. Walker to the defendant, to wit, on the first day of March, 1880, whereby said Mary I. Walker purported to demise and lease unto the said defendant, Ezra Meeker, the premises in controversy and described in the complaint herein, the said defendant was acting in the double fiduciary capacity of administrator of the estates of John Walker, deceased, and Margaret Walker, deceased, of both of which estates the said Mary I. Walker was an heir, and was also the agent of the said Mary I. Walker. 2. That at the time of the execution of the so-called extension, to wit, on the twenty-first day of October, 1881, the said defendant, Ezra Meeker, was acting as the agent of the said Mary I. Walker. 3. That the said defendant did not, either at the time of the making of the so-called lease or at the time of the making of the so-called extension, so fully disclose the facts relative to the said premises to the said Mary I. Walker, as to enable her to contract intelligently and prudently in reference thereto, nor had she been informed by anybody of the facts necessary to give her an intelligent and correct idea of the character and value of the land described in the so-called lease and extension; her agent, the defendant herein, was fully informed in regard to these matters, but she had little or no knowledge in reference thereto, having been absent and away from said premises for a long period of time. 4. That if said Mary I. Walker had been fully apprised and advised of the real situation of affairs, and of the nature and value of said land and premises, she would not have executed either said so-called lease or said so-called extension. 5. That on the first day of May, A. D. 1883, the said Mary I. Walker by warranty deed duly conveyed to the plaintiff A. Gardella the land and premises in controversy, more fully described in the complaint herein, and that thereafter, and before the commencement of this action, to wit, on the fourth day of August, 1883, the said A. Gardella duly conveyed by deed an undivided one half of said premises to the plaintiffs, William Wagner and A. S. Farquharson. 6. That after the conveyance of said premises to the plaintiffs as aforesaid, and before the commencement of this action, the said defendant claimed said property and premises as his own, adversely to and in defiance of the title of and claim of the plaintiffs. 7. That the amount due plaintiffs from defendant, at the date of these findings, for the use and occupation of said premises, is equal to and is balanced by the value of the improvements made on said premises by the defendant. And from the foregoing facts the court found the following conclusions of law: 1. That th.e said so-called lease and so-called extension, and each of them, were at all times voidable, and were duly disaffirmed and avoided within the proper time by the said Mary I. Walker and her said grantee, the plaintiff Gardella. 2. That the said plaintiffs are now, and were at the time of the commencement of this action, the owners in fee-simple of said premises, and were at the date of the commencement of this suit, and are now, entitled to the immediate possession of the same. 3. That the claim'of the plaintiffs for use and occupation of said premises, from the date of the purchase thereof by said Gardella as aforesaid to the date of the commencement of this action, should be set off against the claim of the defendant for improvements under said so-called lease and said so-called extension, each against the other. 4. That plaintiffs are entitled to a judgment against the defendant for the immediate possession of said premises and for their costs herein. Judgment was rendered accordingly, from which defendant appealed.