Learned v. Haley , 34 Cal. 608 ( 1868 )

By the Court, Sanderson, J.:

Had Smyth purchased Hill’s title and taken a conveyance to himself or to Haley, with the knowledge and consent of the latter, to hold for his own benefit, perhaps the plaintiff would have been entitled to recover, notwithstanding the relation of attorney and client had long since ceased between the plaintiff and Smyth. Having acted as the attorney at law of the plaintiff, and conducted the judicial proceedings through which he undertook to obtain Hill’s title, Smyth might not have been allowed to take advantage of any defect in those proceedings to obtain Hill’s title for himself. Such conduct on the part of Smyth might have amounted to a constructive fraud upon the plaintiff, and equity might, upon the facts supposed, have charged the former as trustee for the latter, and compelled a conveyance of the title so obtained. But upon that question it is unnecessary to express an opinion, for the evidence fails to make a case of that character. On the contrary, the purchase was made by Smyth as the agent of Haley, and not for himself. Haley paid the purchase money, and the conveyance was made to him. Smyth had no interest whatever in the transaction, except as the agent of Haley. He has neither received any benefit from the transaction, nor is he hereafter to receive any advantage by reason of any secret understanding between him and Haley. In short, Haley purchased and paid for Hill’s title, and Hill conveyed to him, and he holds it for himself, and not for Smyth. Such being the facts, we are unable to perceive upon what ground Haley can be declared the trustee of the plaintiff. The mere fact that he may have discovered the defect in the judicial proceedings by which the plaintiff undertook to obtain Hill’s title through Smyth, and employed Smyth to obtain Hill’s title by purchase for him, could not have made Haley guilty of a constructive fraud upon the plaintiff. There was no reason in law or equity, however much there may have been in morals, why, if so. disposed, Haley could not purchase Hill’s title for his own use and benefit. Ho relation of trust and confidence existed between him and the plaintiff, by reason of which he was bound to disclose to the plaintiff the defect in his title, or to be precluded from purchasing for himself. On the contrary, as the case shows, they were not only strangers in law but strangers in fact.

The claim made by the respondent, that Haley was guilty of actual fraud, is entirely unfounded. Actual fraud is neither alleged in the complaint, nor disclosed in the testimony, nor found in the findings.

Judgment and order reversed, and new trial granted.