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District Court of Appeal, Fifth District, California.

Milton KIDD et al., Plaintiffs and Respondents, v. Eldon KIDD, Individually and in his capacity as Administrator of the Estate of Clarence W. Kidd, deceased, Defendant and Appellant.

Civ. 269.

Decided: November 26, 1963

Charles B. Snow and Daniel Dennis, Newark, for appellant. Warren Gant and Gant & Gant, Modesto, for respondents.

In 1912 Mrs. Josie Kidd established a dairy on 27 acres of land in Stanislaus County. Three of her sons, respondents herein, and a fourth son, appellant's deceased father, helped their mother with the dairy from the time they were little boys. In 1927 the three respondents formed a partnership and took over the operation of the business, but the fourth son, Clarence W. Kidd, left the ranch and did not participate. It is not clear just what interest the mother retained in the business after 1927, but it is clear that she retained title to the real property upon which respondents operated the dairy and that upon her death in 1952, title to the real property passed to the four sons, share and share alike.

On March 13, 1955, Clarence, appellant's father, orally agreed to sell his one-quarter interest in the 27 acres to his three brothers, the respondents, for $3,100. The agreement was made with Milton Kidd, who gave Clarence two checks totaling $3,100, and Clarence signed the following receipt:

‘To day I received from my brother Milton Kidd for himself and my brothers Hubert & Herman the sum of $3100.00 (three thousand one hundred dollars) as payment for property left by our mother to we four brothers.’

As it was Sunday, Milton and Clarence agreed that Clarence should go to a title company on a business day and execute a deed conveying his interest in the property to his brothers. Clarence never refused to execute the deed; to the contrary, upon several occasions he stated that he would execute the deed when convenient, but he died September 23, 1960, without having done so.

Respondents brought this action to have the contract specifically enforced and to have appellant, Clarence's son, declared a constructive trustee of the property which had vested in him by operation of law at his father's death. (Estate of Newlove, 142 Cal. 377, 75 P. 1083.) The judgment decreed specific performance of the oral contract and also that appellant holds the property as a constructive trustee.

Appellant raises as issues on this appeal, the sufficiency of the receipt as a memorandum of the oral agreement under the statute of frauds; the right of respondent Milton Kidd to testify as to the oral contract by reason of Code of Civil Procedure, section 1880, subsection 3, the so-called ‘dead man's statute’; the sufficiency of both the pleadings and the evidence to support the finding of a constructive trust; laches; and the statute of limitations.

Since all that appellant is accused of doing is inheriting the property from his father, respondents' right to a decree that appellant holds the property as a constructive trustee depends upon whether respondents can specifically enforce the contract.

We commence with the last defense, the statute of limitations, for if that defense is valid there can be no specific enforcement of the contract and the other issues are of no consequence. That the action sounds in equity has no bearing on this issue as the various statutes of limitations may be raised as defenses in equity cases. (Grattan v. Wiggins, 23 Cal. 16, 34; Troeger v. Fink, 166 Cal.App.2d 22, 28, 332 P.2d 779.)

The oral contract which is sought to be enforced was made March 13, 1955, and Clarence Kidd, who failed to perform the contract, died September 23, 1960. This action was not commenced until August 14, 1961. Code of Civil Procedure, section 339, subsection 1, fixes a two-year period of limitations for the filing of an action to enforce an oral contract. If we presuppose that the receipt is a memorandum sufficient to bring the contract within the statute of limitations applicable to agreements in writing, no comfort is afforded respondents since Code of Civil Procedure, section 337, subsection 1, provides that an action to enforce a contract in writing must be commenced within four years. Five years and six months elapsed between the time the contract was made and the death of Clarence Kidd, so that prima facie appellant's defense of the statute of limitations is valid.

Respondents argue, however, the judgment decreed that appellant holds the property as a constructive trustee, so that the statute of limitations commenced to run not from the date the contract was made but from Clarence's death, which gave rise to the constructive trust. It is true that under certain circumstances the statute of limitations applicable to an action to implement a constructive trust commences to run from the date of the death that gives rise to such trust. The best example of that kind of constructive trust is one arising from a failure to perform a contract to make a will. (Ludwicki v. Guerin, 57 Cal.2d 127, 130, 17 Cal.Rptr. 823, 367 P.2d 415.) But, as pointed out in the Ludwicki case, a contract to make a will is breached only if it has not been complied with at the time of the promisor's death, which is not the situation here. Respondents' cause of action for specific enforcement of the contract accrued the day after the agreement was made.

Respondents have also cited cases holding that the statute of limitations in regard to a constructive trust commences to run from the discovery of fraud, undue influence or other condition from which the trust emanates. A review of these cases impels us to conclude that in the case before us both the pleadings and the proof fall short of the basic requirements for this kind of relief in equity. (Day v. Greene, 59 A.C. 421, 428, 29 Cal.Rptr. 785, 380 P.2d 385; Mazzera v. Wolf, 30 Cal.2d 531, 535, 183 P.2d 649.) All that respondents pleaded or proved was that Clarence Kidd did not perform the contract prior to his death, by reason of neglect—his neglect and respondents' neglect—and that upon his death his interest in the property passed to his son, the appellant, by operation of law. The complaint does not allege fraud, a violation of a confidential relationship, breach of trust, undue influence, mistake or concealment on the part of decedent as a cause for respondents' delay in filing an action upon the contract. Indeed, in view of the record, respondents could have made no such allegation. The undisputed evidence is correctly summarized by the trial court in the following finding:

‘At no time following the making of such contract and prior to his death did Clarence W. Kidd repudiate such contract. On the other hand, it was always his intention during that period to perform his obligation under such contract.’

In short, the only reason reflected by the record for failure to file an action within the period required by law is procrastination. We cannot hold that this, standing alone, tolled the statute of limitations even though the parties to the contract were brothers.

The judgment is reversed.

STONE, Justice.

CONLEY, P. J., concurs. RALPH M. BROWN, J., deeming himself disqualified, did not participate.

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