BURNS v. ROSS 19 pellant ever had any right it is barred by her | sumed that as between them it was intended laches. Appellant insists the complaint shows the supplied the means with which to make it. that the purchase be for the benefit of him who major portion of the consideration for the transfer of the land was paid by her, and simple fact that money or property of one has * A resulting trust is not founded on the that therefore a trust results in her favor been used by another to purchase property. It pro tanto; that, even if this position is not is founded on a relationship between the two, maintainable, respondents have no right to and intentionally, one has advanced the conon the fact that as between them, consciously retain the property as a result of Fitzger-sideration wherewith to make a purchase in ald's act in forging the assignment, and that under one theory or the other a cause of action is stated. [4] The complaint is not specific in many respects and certain allegations which might well be set forth, such as those concerning the dates of the transfers of the property, are omitted. But in our opinion it does state facts sufficient to constitute a cause of action and to justify the declaration of a trust in appellant's favor. This conclusion is not reached upon the theory, chiefly relied on by appellant, that a resulting trust arose under section 853 of the Civil Code, which provides: "When a transfer of real property is made to one person, and the consideration therefor is paid by or for another, a trust is presumed to result in favor of the person by or for whom such payment is made." Respondents are to be regarded instead as constructive trustees under section 2224 of the Civil Code, which is as follows: "One who gains a thing by fraud, accident, mistake, undue influence, the violation of a trust, or other wrongful act, is, unless he has some other and better right thereto, an involuntary trustee of the thing gained, for the benefit of the person who would otherwise have had it." That the facts presented here are not embraced within the theory of resulting trusts is obvious from a consideration of the following cases, wherein that principle was considered. In Woodside v. Hewel, 109 Cal. 481, 42 Pac. 152, it was said that— "The equitable principle that when, upon the purchase of lands, the consideration therefor is furnished by one person, and the conveyance is taken in the name of another, a resulting trust in the lands is created in favor of the one from whom the consideration came, is well recognized, as is also the rule that a resulting trust is created pro tanto where only a specific part of the consideration was so furnished." In Lezinsky v. Mason Malt Whisky Distilling Co., 185 Cal. 240, 247, 196 Pac. 884, 888, the court declared: the name of the other. cause it is the natural presumption in such a The trust arises beble purchaser should acquire and hold the propcase that it was their intention that the ostensierty for the one with whose means it was acquired." stances which raise any presumption that the a case where the purchaser uses what he be- bring the case within the application of sec- 44: are such that the person who takes the title "Where the circumstances of a transaction to property cannot be permitted to hold and enviolating some principle of equity, a construcjoy it, in whole or in part, without necessarily tive trust will be raised for the benefit of the party entitled in equity to its beneficial enjoyment. It is because he holds the property, or some interest therein, which it is inequitable for him to enjoy, that the court declares the trust and fastens it upon his conscience, and wrests the property or interest from him and causes it to be transferred to the person equitably entitled to it." In Pomeroy's Equity Jurisprudence (4th Ed.) vol. 2, p. 1919, it is said: "Where an owner has been apparently de "The furnishing of the consideration, by reason of which a resulting trust arises, is a fur-prived of his title by a fraudulent conveyance nishing, not to the seller of the property or assignment which is void, as where he was bought, but to the purchaser. theory upon which a trust is imposed upon the resentation and under the conviction that it The whole procured to execute it by the fraudulent reppurchaser in such a case is that, as between was him and a third person, it was the latter who was fraudulently executed in his name without an entirely different instrument, or where it furnished the consideration with which the any authority express or implied, or where, aftproperty was acquired, so that it will be pre- er being executed by him for one purpose it was fraudulently altered without his knowledge or authority, so as to include the property, or where it was a forgery, and he has done no collateral act with reference to it which might amount to an equitable estoppel by conduct, and the property, by means of such transfer, comes into the hands of a purchaser for value and without notice, the original defrauded owner is not barred of his remedy." (Italics ours.) According to the complaint, appellant trusted Fitzgerald with the contract of sale, and he by a forged assignment of it to himself and another to respondents enabled them apparently to secure the right to purchase the land and later the land itself. It is true respondents are assignees of the wrongdoer, and it is not alleged they themselves were guilty of any wrongful act or were not bona fide purchasers. But the original assignment having been forged, no title to the contract passed, and the rights of appellant under it cannot be defeated, even, as respondents contend, by a bona fide purchaser. However, in Walsh v. Hunt, 120 Cal. 46, 52, 52 Pac. 115, 117 (39 L. R. A. 697), wherein the court considered the liability of a maker of a promissory note which had been altered through the forgery of the maker's agent, it was held: "But, if it were conceded that the finding established carelessness or negligence by defendant, which might in some degree have conin-tributed to the successful execution of the fraud by which plaintiff was deceived into parting with her money, it would not then constitute an estoppel. This is upon the principle that a party is not bound in transactions of this character either to anticipate or take precaution against the commission of a crime by which another may be deceived; that where it is through the instrumentality of a criminal act that the Wrong is accomplished, it is the crime and not the negligent act which is the proximate cause of injury; and in such a case the maxim that where one of two innocent persons must suffer from the wrongful act of another, the loss must fall upon the one making the act possible, has no application." [7] Respondents object to a consideration of this point that a cause of action was stated under section 2224 of the Civil Code, on the ground that it was presented for the first time in appellant's reply brief. Although it is true an appellant should state in his opening brief the points upon which he relies and that matters first raised in a reply brief may be disregarded, this court "is undoubtedly at liberty to decide a case upon any points that its proper disposition may seem to require, whether taken by counsel or not." Hibernia Sav. & Loan Soc. v. Farnham, 153 Cal. 578, 584, 96 Pac. 9, 12 (126 Am. St. Rep. 129). In the case at bar, appellant was not bound to anticipate that Fitzgerald would commit forgery and assign her contract, and, as already pointed out, her rights cannot be defeated by his act in that regard. As respondents' claim is based solely on the assignment from Fitzgerald, appellant's negligence in other particulars, such as her failure to record her contract, is immaterial. Respondents' argument with reference to their third point is that it must be presumed appellant has stated her cause as favorably as possible to herself and that the parties have followed the ordinary course of business; that from this presumption follows another that, inasmuch as appellant alleged respondents paid the balance of the purchase price and took the deed from the land company after November 26, 1913, they took the deed and had it recorded on November 27, 1913. From this is would follow that, as the second amended complaint was filed on August 22, 1918, nearly five years after appellant had the means of knowledge of respond [8] It is argued by respondents that, inasmuch as the contract provided the title should not pass until the purchase price was fully paid, and appellant never paid the last installment, she could claim no right to the property whatever. But appellant is not asking anything of the land company, which has fully performed its obligations under the agreement of sale and transferred title to respondents upon their performance of the purchaser's obligations. Nor is she seeking to assert a legal title paramount to that held by respondents. She is endeavoring to recov-ents' claim, her cause of action is barred by er only her proportionate share of the property from respondents, who have paid the last installment and who hold the title. [9, 10] In support of their second contention, respondents insist that appellant, by giving Fitzgerald charge of her papers, made him her business representative; that she thereby invested him with the management of her affairs and put into his hands the means of wrongdoing. Schultz v. McLean, 93 Cal. 329, 357, 28 Pac. 1053, 1058, is cited to the point that "The vendee will not be compelled by a court of equity to lose the benefit of a bargain obtained in all fairness and honesty, because of a fraud practiced upon the vendors by their own agents." laches and by the statute of limitations. In the demurrer it was stated "that the cause of action attempted by said plaintiff to be set forth in said second amended complaint is barred by laches." There was no allegation that it was barred by the statute of limitations. It is said in Hecht v. Slaney, 72 Cal. 363, 366, 14 Pac. 88, 89, cited with approval in Lezinsky v. Mason Malt Whisky Distilling Co., supra, that "Whatever may once have been the rule, it is now well settled that the statute of limitations runs in favor of a defendant chargeable as a trustee of an implied trust, and it is not necessary, in order to set the statute in motion, that he should have denied or repudiated the trust [citing authorities]. In such a case, the stat (212 P.) ute begins to run when the wrong complained with defendant employer in the profits of cerof is done, and under our code the limitation is four years. Code Civ. Proc., sec. 343; Piller v. S. P. R. R. Co., 52 Cal. 42." [11] It must be assumed, in the absence of anything to the contrary, that the action was.commenced within the four years allowed by the statute. [12] In Meigs v. Pinkham, 159 Cal. 104, 112 Pac. 883, the court declared that "Under our law, as the statute of limitations is applicable to both legal and equitable actions, there can be no laches in delaying the bringing of an action if it is brought within the period of limitation [citing authorities], unless there are some facts or circumstances attending the delay which have operated to the injury of the defendant." There are no facts alleged in the complaint from which it appears that any injury will result from appellant's delay in instituting the proceeding. Inasmuch as appellant has offered to do equity, she is entitled to her own equitable relief. The judgment is reversed. We concur: SHAW, C. J.; LENNON, J.; WASTE, J.; WILBUR, J.; WARD, J. KALES et al. v. HOUGHTON. (S. F. 9833.) (Supreme Court of California. Jan. 6, 1923.) I. Master and servant 70(3)-Contract to obtain and handle construction contracts construed. In an action for an accounting under a contract of employment providing for a division of profits and losses on construction contracts, plaintiffs to "exclusively give their services to obtaining and handling of contracts to be entered into" between defendant and others, held, that defendant, having interpreted the agreement to apply to contracts which were "obtained" by plaintiffs, but not "handled" by them, and upon contracts "handled," but not "obtained," by them, could not contend that, unless a contract was both obtained and handled by plaintiffs, they were not entitled to participate in profits thereon. 2. Contracts 170(1) Where language doubtful, construction by parties during course of execution will be adopted. When the meaning of the language of a eontract is doubtful, the construction which the parties placed upon it during its execution will be adopted, where the language will reasonably permit such interpretation. 3. Account 22-Finding of ultimate amount due in accounting held sufficient to sustain judgment, although subsidiary finding as to elements on which based not expressed. In an action for an accounting under a contract whereby plaintiffs were entitled to share tain construction work, defendant to render a statement every year, costs of administration to be charged against plaintiffs in proportion to the overhead of defendant's office, a finding by the court as to plaintiffs' share in the net profits of the year held sufficient to sustain a judgment based thereon, notwithstanding it did not expressly find as to the scope and effect of an oral agreement by the parties relating to the amount of overhead to be charged. 4. Master and servant 80(9)—Finding of oral agreement as to overhead expenses sustained. In an action for an accounting under a contract of employment, whereby plaintiffs were to share the profits of certain construction work, costs of administration to be charged in proportion to the overhead of the employer's office, where it was claimed that as to certain construction work a special oral agreement was made as to overhead charges, evidence held sufficient to sustain a finding that such oral agreement was made. 5. Set-off and counterclaim 44(1)—Person al indebtedness of one of parties to joint agreement cannot be set off against amount due to both of them. Where plaintiffs agreed with defendant to share profits and losses of certain construction work, defendant could not, in making a statement of account, offset against the sum due to both of plaintiffs the amount of a personal note of one of them made before the agreement was entered into, since, in the absence of insolvency or of other facts making applicable rules of equitable set-off, the personal indebtedness of one of the parties to a joint agreement cannot be availed of as a setoff so as to affect the other party without his consent. For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes 22 James P. Sweeney and Courtney L. Moore, [ undersigned, this agreement may be terminated both of San Francisco (Adair & Winder, of at the option of Van Sant-Houghton Company. Riverside, of counsel), for appellant. Fitzgerald, Abbott & Beardsley, of Oakland, for respondents. PER CURIAM. This appeal is by the defendant from a judgment in the plaintiffs' favor in an action for an accounting. On or about the 12th day of July, 1915, the plaintiffs herein and the Van Sant-Houghton Company entered into the following written agreement: "San Francisco, June 22, 1915. "Messrs. Van Sant-Houghton Co., 503 Market Street, San Francisco, California-Gentlemen: The undersigned offer to enter your employment for the period of five years, commencing July 1, 1915, and to exclusively give their services towards obtaining and handling of contracts to be entered into between yourselves and others. This service shall exclude: "(1) All contracts to the carrying out of which your Unit-Bilt system of concrete construction is adaptable. "(2) All contracts to the carrying out of which your pneumatic. concrete Placing System is adaptable. "(3) All work in Alameda county. "This service shall particularly include: county. "(2) More particularly all work in the Bay counties not specifically mentioned as excluded above. "(3) Any contracts for construction work not excluded above where same are undertaken with the consent of Shirley Houghton and R. H. Van Sant, Jr. "(4) By special agreement between the parties concerned, work may be undertaken in the territory or under the classifications excluded above. "Every twelve months a statement of profits and loss shall be drawn up on the work closed during the preceding twelve months, and we shall be entitled to draw out one-half of our share of the profits then earned, the balance to remain with Van Sant-Houghton Company as protection against any possible loss during the ensuing year. "The division of the profits or losses shall be 50% to Van Sant-Houghton Co. and 50% to ourselves. "During the period of the year from July 1, 1915, to June 30, 1916, Van Sant-Houghton Company are to advance to us the sum of $500.00 at the end of each month. These advances are to be charged against our share of the profits during our period of service. "Any additional advances after June 30, 1916, that may be agreed upon must be warranted by the work completed or then in the course of construction. "The costs of administration which are chargeable against us will be based on that portion the overhead of the office of Van Sant-Houghton Company which is chargeable against our work. "In the event of the death of either of the "Franklin A. Kales. "Jasper S. Connell. "Accepted this 12th day of July, 1915. "Van Sant-Houghton Co., At the time of entering into this agreement the Van Sant-Houghton Company was, and for several years prior thereto had been, engaged in business as construction engineers with headquarters of the same in San Francisco, but with its operations, which were quite extensive, reaching into several other states. The plaintiffs herein were also engineers of considerable past experience in similar lines of work, and had in fact been in the employment of the said firm, Van Sant-Houghton Company, prior to the execution of the written agreement above set forth. A few months after its execution Mr. Van Sant transferred all of his interest in the firm to his associate, the defendant herein, who thereupon assumed all of the obligations and became entitled to all of the benefits of the foregoing agreement. The service of the plaintiffs herein began on July 1, 1915, ac-. cording to the terms of said agreement, and were to continue for the period of five years thereafter. The activities of the respective parties under said agreement actually continued for a period a little over two years and eight months, when, discords having arisen between them over the state of their accounts, the plaintiffs, after some efforts made to arrange a compromise of these difficulties, left defendant's employ on or about March 9, 1918, and then undertook to repudiate and rescind said agreement. On March 25, 1918, they commenced the present action for an accounting, alleging in substance that the defendant had failed and neglected to furnish them with the statements of account provided for in said agreement, and to collect the account for and pay over to them sums from time to time due thereon. The defendant demurred to the plaintiffs' complaint unsuccessfully and then answered, admitting the execution of said agreement, but denying any breach thereof upon his part, and that any sum whatever was due said plaintiffs thereunder. He also filed a crosscomplaint against said plaintiffs setting forth said agreement and alleging that said plaintiffs had without cause made default in the terms and conditions thereof to be by them performed, whereby the defendant and crosscomplainant had sustained damages in the sum of $18,000, for which he prayed judgment. Plaintiffs answered said cross-complaint with denials of the allegations thereof. The cause went to trial before the court sitting without a jury upon the issues thus joined, at the conclusion of which the court (212 P.) made and filed its findings of fact and con- construction work or contracts which they clusions of law. In the first paragraph of did not assist in obtaining. A further reaits said findings the trial court found gener son for denying to this clause in the agreeally that the first five paragraphs of the com- ment the interpretation which the defendant plaint, having reference to the making of now claims for it is to be found in the insaid agreement and to the defendant's al- terpretation which the parties themselves leged breach thereof, were true, and that the placed upon it at the time and in respect to facts were as alleged therein. The trial several construction contracts which were obcourt then proceeded to make specific find-tained and handled during the period of plainings as to the amount due to said plaintiffs tiffs' activities under their said agreement. and for which they were entitled, stating In the case of the Sperry flour contract the that said amount was in excess of the sum evidence shows that this contract was obof $20,000, which the defendant had refused tained by or through the efforts of the plainand neglected to pay The court then pro- tiff Kales, but that practically no work was ceeded in its findings to go into further and done by either of said plaintiffs in handling more specific details as to the sources from the construction work thereon. This contract which it derived the conclusion that an resulted in a loss, and the evidence shows amount in excess of the above sum was due that the defendant charged 50 per cent. of and unpaid the plaintiffs. It is certain of said loss to the plaintiff's under the provithese specific findings which the defendant sion of said agreement, which provides for a particularly assails on this appeal as unsup-sharing of the losses as well as profits upon ported by the evidence in the case. work undertaken during the term of said The primary contention of appellant in this agreement. Another example is that of the regard has to do with the interpretation contract for a foundry building for the Union which the trial court placed upon said agree- Iron Works which the plaintiff Kales also ment as affecting its findings as to the sev- obtained, but which neither of the plaintiffs eral amounts due the plaintiffs upon certain handled, and upon which there also was a construction work undertaken thereunder by loss, one-half of which the defendant the defendant. It is the appellant's conten-charged to the plaintiffs' account. Still antion that the plaintiffs were entitled to share other example of the defendant's conduct in in the performance of no construction contracts which they did not "obtain and handle." This contention is based upon the phrasing of the first paragraph of the plaintiffs' offer, which reads as follows: the interpretation of said phrase is to be found in the so-called Floriston contract, in the execution of which there was a profit, 50 per cent. of which the trial court awarded to the plaintiffs. There is a conflict in the "The undersigned offer to enter your employ-evidence as to whether the plaintiffs obment for the period of five years, commencing July 1, 1915, and to exclusively give their services towards obtaining and handling of contracts to be entered into between yourselves and others." tained this contract, which conflict the trial court resolved in the plaintiffs' favor. The appellant concedes that by reason of such conflict and of the court's conclusion thereon he cannot now attack that portion of the [1] It is the appellant's claim that the finding of the trial court; but he insists that words "obtain and handle" in the foregoing the trial court was in error in making any paragraph of the plaintiffs' accepted offer are award to the plaintiffs thereon for the reason to be used in the conjunctive in their appli- that the undisputed evidence was that the cation to the succeeding provisions there. | plaintiffs did not handle said job. The eviThere are several sufficient reasons why this dence, however, divulges that the defendant interpretation should not be placed upon charged the plaintiffs with their proportion these words. To so interpret them would be of the agreed expense of the San Francisco to allow the plaintiffs no part in the per- office, which under the terms of the agreement formance of any construction contract which was chargeable as "costs of administration" they obtained and turned over to said defend- against the plaintiffs' work. This could only ant, unless they also "handled" the construc- have been done upon the theory that the tion work thereon. It would also lead to the plaintiffs would ultimately be entitled to denial of any share in the performance of share in the performance of the Floriston any construction work of the defendant upon contract, although they did not "handle" the which the plaintiffs worked, but the contract work upon said contract. The defendant, for which they did not "obtain" or assist having thus placed an interpretation upon in obtaining. The result would be that the said agreement which operated to his beneplaintiffs' motive and advantage in entering fit, cannot be heard to deny the same interinto the contract at all would be largely tak-pretation thereof when it would operate to en away, as well as any motive or advantage the plaintiffs' benefit. to them to exert themselves in obtaining construction contracts for their employer which they were not to handle, or for handling [2] It is a well-settled rule of law that, when the meaning of the language of a contract is doubtful, the construction which the |