JULES MERCIER v. AUGUSTUS HEMME and MILTON A. LEWIS, 50 Cal. 606

By the Court: The court below found that, on the 18th day of July, 1884, Milton A. Lewis “promised and agreed to and with Jules Mercier to sell to him, said Mercier, all his right, title and interest in and to the rancho Rinconada del Arrojo de San Francisquito.” This is substantially a finding that Mercier, at that time, purchased and was entitled to a conveyance of the small interest in the rancho, which Moultrie had conveyed to Mrs. Lewis—wife of Milton A. Lewis—because that interest would appear to have been, not her separate estate, as found by the court, but property belonging to the marital community.

If there is any evidence in the record characterizing this small interest as the separate property of Mrs. Lewis, it has not been pointed out, and we have been unable to discover it. The court below found that between Hemme and the plaintiff there existed no relation of trustee or cestui que trust. If by this is meant that there was no express trust established by the proofs, the finding is well supported.

But there are circumstances under which the law will raise a trust by construction and fasten it upon the conscience of a party who by circumvention has obtained for himself advantages of which he ought not, according to the rule of equity and good conscience, to have deprived another, and we think that those circumstances are to be found in this case.

Hemme knew of the purchase made by the plaintiff from Lewis; in fact he was, in some sense, a party to it, advancing the money to enable the plaintiff to complete it, and receiving as collateral for the advance the notes and mortgage by which the deferred payments from plaintiff to Lewis were secured.

Under these circumstances and without the knowledge of the plaintiff, he obtained for himself from Lewis a conveyance of a portion of the interest which he knew to have been already sold to the plaintiff, and by placing the conveyance to himself on record a few minutes before the deed of Lewis to the plaintiff was filed for record, he obtained a title apparently superior to that which vested by the deed of Lewis subsequently delivered to the plaintiff.

Had Hemme under these circumstances continued to hold the title, procured by him from Lewis in this manner, there can be little doubt that he would, upon familiar principles, have been compelled to surrender it to the plaintiff, and neither the measure of his accountability, nor the principles upon which it rests, have been affected by the fact that he has parted with the title, and conveyed it to a bona fide purchaser without notice. Judgment and order denying a new trial reversed, and cause remanded for a new trial.