Bryan v. Kales (134 U.S. 126)/Opinion of the Court

The grounds upon which the district court sustained the demurrer to the complaint are not shown by the record otherwise than from the statement in the opinion of the supreme court of the territory, that it was because of laches in bringing suit. The latter court said: 'It appears that the grantor of the plaintiff stood by and saw all this property sold, and had a right to redeem the same in six months after the sale; that her residence was in Maricopa county at the death of her husband, and its continuance will be presumed to be there, the contrary not having been alleged; that there was no action brought to set aside the judgment; that from the 8th day of November, 1883, till the [2] 9th day of June, 1887, nearly four years, she saw the property greatly eh ancing in value.-saw it sold time and again, then sells it to the plaintiff, who now comes into a court of equity and asks a cancellation of all those sales. If the bill had shown, and which plaintiff was allowed to show, that any disability existed on the part of any one having an interest in the property at the time of sale, we would grant the prayer of the bill. No such disability being shown, can we think of allowing the party who has so long slept upon her rights to divest the present owners of their valuable property?' 20 Pac.Rep. 312.

The difficulty with this view is that it has nofoundation in the allegations of the complaint. From the mere fact that Mrs. Bryan's residence at the time of her husband's death was in Maricopa county, where the real estate in question is situated, the court below presumed, not only that it continued there, but that she 'stood by' for nearly four years, forbearing to exercise her right to redeem, and 'saw the property enhancing in value,-saw it sold time and again,' without asserting any interest in it. No such presumption was justified by the allegations of the complaint. The case made by those allegations is that of an administrator who, having claims against the estate he represented which were secured by mortgage upon real property of which his intestate died seised, and having in his hands money sufficient to discharge those claims, yet resorted to the expedient of taking judgment in his individual name against himself in his fiduciary capacity for the amount of the claims and for attorneys' fees, and caused the property to be sold. And of all those facts, the demurrer admits, the defendants, and each of them, had full notice when they made their respective purchases. Referring to the allegation in the complaint that the administrator, at the time he sued himself, had in his hands sufficient money to pay off his claims, the counsel for the defendants suggest that this might well be, if those moneys had been applied to the debts in question without providing for the payment of other debts against the estate, the expenses of administration, or preferred claims; and that, for aught appearing in the complaint, it may have been the duty of the administrator to apply the moneys in his hands to other debts and claims. A sufficient answer to this suggestion is that the allegation in the complaint upon this point imports a failure of the administrator to use the moneys in his hands to discharge the debts held by him, when he could properly have so used them.

It is true, as contended, that, where the bill shows such laches upon the part of the plaintiff that a court of equity ought not to give relief, the defendant need not interpose a plea or answer, but may demur upon the ground of want of equity apparent on the bill itself. Lansdale v. Smith, 106 U.S. 393, 1 Sup. Ct. Rep. 350; Speidel v. Henrici, 120 U.S. 377, 387, 7 Sup. Ct. Rep. 610. But no such case is made by the bill. The limitation prescribed by the statutes of Arizona for the commencement of an action to recover real property, or the possession thereof, is five years. If this statute governs courts of equity as well as courts of law,-and such is the plaintiff's contention,-the present action is not barred by limitation. If, as contended by the defendants, a court of equity may deny relief because of laches in suing, although the plaintiff commenced his action within the period limited by the statute for actions at law, still the granting or refusing relief upon that ground must depend upon the special circumstances of each case. Harwood v. Railroad Co., 17 Wall. 78; Brown v. County of Buena Vista, 95 U.S. 160; Hay ward v. Bank, 96 U.S. 617. The case made by the complaint in this suit is one of fraud upon the part of the administrator; and in that fraud, if the allegations of the complaint aresustained by proof, the defendants, and each of them, must be held to have participated. The circumstances as detailed in the complaint are so peculiar in their character that a court f equity should be slow in denying relief upon the mere ground of laches in bringing suit.

Other questions arise upon the face of the complaint, namely, as to whether Mrs. Bryan had such interest in the property as made her a necessary party to the suit of foreclosure instituted by Kales in his individual capacity and as to how far the validity of the decree of foreclosure and sale was effected by the very unusual fact that the same person was both plaintiff and defendant in that suit. Perkins v. Se Ipsam, 11 R. I. 270; McElhanon v. McElhanon, 63 Ill. 457; Hoag v. Hoag, 55 N. H. 172. But, as these questions were not considered by the court below, and as their correct determination can be best made when all the facts are disclosed, we express at this time no opinion upon them, and place our decision upon the ground that the supreme court of the territory erred in holding that the complaint failed to show that the plaintiff was entitled to relief from a court of equity. The defendants should be required to meet the case upon its merits.

The decree is reversed, with directions that the demurrer to the complaint be overruled, and for further proceedings consistent with this opinion.

FIELD, J.

I concur in the judgment of this court for the reasons stated; but I wish to add that, in my opinion, the judgment recovered by Kales against himself as administrator is an absolute nullity.