Opinion
For Opinion on Rehearing, see 91 Cal.Rptr. 857
Opinion on pages 374 to 379 omitted
REHEARING GRANTED
[83 Cal.Rptr. 341]Werchick & Werchick, Arne Werchick, San Francisco, for appellant.
Bronson, Bronson & McKinnon, San Francisco, for respondent.
CHRISTIAN, Associate Justice.
Plaintiff appeals from a judgment of nonsuit in this action for personal injuries allegedly caused by defective maintenance of a staircase in a building owned by respondent, Western Title Insurance & Guaranty Company. In a complaint filed one day before expiration of the statute of limitations, appellant alleged liability on the part of respondent title company and ten Does. Respondent answered, alleging that it held title "as trustee for certain designated beneficiaries" and denied the complaint's allegation that it "owned, operated, maintained and controlled" the building. The complaint was later amended to increase the prayer but no attempt was made to bring into the action the undisclosed parties who, according to the allegations of the answer, actually operated and managed the property. The pretrial conference order recited that respondent "held bare record title to the premises involved as trustee for certain designated beneficiaries" but appellant apparently still made no effort to bring in those parties; the pretrial conference order included a provision dismissing "all fictitious defendants." There is no indication that appellant resisted that order.
In a discussion between the court and counsel before commencement of the trial, it emerged that appellant might have sued the wrong party. Accordingly, with the agreement of counsel, the court separated, and tried without a jury, the preliminary question of respondent's claimed status as a holder of bare legal title with no powers of management or control of the property. That hearing led to the judgment presently appealed from. Although both sides presented evidence, no findings of fact were made. Counsel and the judge all spoke in terms of nonsuit; accordingly we treat the judgment as one of nonsuit, to be reversed if there was sufficient evidence to go to the jury.
The evidence established that respondent was the legal owner of the premises, having taken title by a deed dated August 2, 1957. The beneficial ownership, management and control of the property was in an investment syndicate; a series of holding agreements between respondent and the individual shareholders in the syndicate set forth the details of this arrangement. The agreements provided that respondent was under no obligation to do anything with respect to the property other than hold title in its name. An employee of respondent testified that respondent, pursuant to the terms of these agreements, did not concern itself with the property in any way other than to receive in behalf of the beneficial owners notices directed to it as the record title holder.
Appellant attempted to show that respondent actually managed the property, despite the strong showing that it was actually managed by the real estate firm which had [83 Cal.Rptr. 342]organized the syndicate of purchasers. Most of appellant's evidence consisted of various notices or letters which had been sent to respondent as the record title holder. There was evidence from which it could be inferred that respondent had given advice regarding probate problems to be resolved for title insurance purposes upon the death of two members of the syndicate. The evidence also showed that respondent purchased title insurance in its name and that applications for elevator permits were executed in respondent's name, apparently by the managing real estate firm, were sent to that firm and paid for from the rents collected by that firm. The premium on the liability insurance policy was determined on the basis of the record of a number of similar trusts held by respondent, but respondent had nothing to do with procurement of the policy and the record contains no indication of activity on the part of respondent in the nature of operation and management of the property as opposed to communications and transactions consistent with the role of a trustee holding bare legal title.
The trial judge granted respondent's motion for a nonsuit on the ground that respondent as holder of bare title to the property had no duty of due care in the maintenance of the building. Appellant makes two contentions on appeal. First, he argues that even a bare title holder may be held responsible for conditions on the property. Second, he contends that in the present case respondent is estopped to deny its responsibility for the injury to appellant.
The basic rule as to the liability of the holder of bare title to property is that, "Although the trustee has the legal title to the trust premises, he is not liable to a third person for a tort which results not from the mere fact of ownership of the premises but from the operation of the premises, where the trustee has no responsibility for the operation of the premises." (3 Scott on Trusts (2d ed. 1956) § 264, pp. 2050-2055; see also Scott, supra, (1966 Supp.) at p. 65.) Scott notes that the bare title holder does have some liabilities merely because of the ownership (e.g., taxes, shareholder assessments), but distinguishes these from possible liability resulting from the operation of the premises (3 Scott on Trusts, supra, §§ 265-265.4, pp. 2056-2066; see Richman v. Green (1956) 143 Cal.App.2d 470, 299 P.2d 890. Foreign cases similar to the Richman case include Pena v. Stewart (1955) 78 Ariz. 272, 278 P.2d 892; Fields v. 6125 Indiana Avenue Apartments, Inc. (1964) 47 Ill.App.2d 55, 196 N.E.2d 485; Brazowski v. Chicago Title & Trust Co. (1935) 280 Ill.App. 293.)
Contending that the holder of bare legal title should be liable for the injuries due to negligence of the actual managers in the operation of the premises, appellant cites Johnston v. Long (1947) 30 Cal.2d 54, 181 P.2d 645. The Johnston case is distinguished. The trustee in Johnston actually controlled the property of an active trust; he was directed to do so by the will of the deceased and had obtained court permission to operate the business. In Richman, supra, and in the present case, the trustee was the record owner only; the agreements under which respondent held title expressly excluded respondent from operation or management of the property; there was no evidence that respondent went beyond the functions anticipated. The holding agreements and the testimony of respondent's employee indicate that respondent took no part in the management of the premises; the evidence offered by appellant for the purpose of showing that respondent did take in management decisions goes no further than to show that respondent performed functions consistent with the status of a trustee holding bare legal title. Appellant's contention that the holder of bare record title to certain property is liable for torts occurring in the operation of that property must be rejected. There was no substantial evidence that in fact respondent undertook duties to the public by reason of performing functions [83 Cal.Rptr. 343]beyond the holding of bare legal title. The court did not err in granting a nonsuit. (See O'Keefe v. South End Rowing Club (1966) 64 Cal.2d 729, 51 Cal.Rptr. 534, 414 P.2d 830; Minniear v. Tors (1968) 266 Cal.App.2d 495, 505, 72 Cal.Rptr. 607).
Appellant also contends that respondent should be estopped to deny its liability because of its actions preceding trial. Appellant argues that he was entitled to rely upon the fact that respondent was the record title holder to the premises and that respondent had a duty to impress upon appellant's counsel, more forcibly than by putting an allegation in the answer, the contention that respondent was only a bare legal title holder. Appellant's contention is that the doctrine of equitable estoppel should be applied "to preclude this defendant [respondent] from springing upon plaintiff [appellant] an undisclosed syndicate arrangement but one week before trial, after plaintiff had acted in reliance upon the record title. * * * "
It is true that estoppel may be predicated upon silence: " 'An estoppel may arise * * * from silence as well as from words or conduct. But this is only where there is a duty to speak, and where the party upon whom such duty rests has an opportunity to speak, and, knowing that the circumstances require him to speak, remains silent.' " (Altman v. McCollum (1951) 107 Cal.App.2d Supp. 847, 862, 236 P.2d 914, 922.) The cases cited by appellant involve clear representations on the part of one of the parties that he would not rely upon certain facts (typically, the running of the statute of limitations) to escape liability (see, e.g., Cal. Cigarette Concessions, Inc. v. City of L.A. (1960) 53 Cal.2d 865, 3 Cal.Rptr. 675, 350 P.2d 715; Benner v. Industrial Acc.Com. (1945) 26 Cal.2d 346, 159 P.2d 24). No such situation is seen here.
Appellant claims estoppel from the following: (1) the use of secret holding agreements; (2) failure to disclose the title defense before the pretrial conference; (3) the failure of respondent to impress upon the mind of counsel for appellant the significance of its admission that it held title to the property as a trustee and its denial of management responsibility; and (4) respondent's apparent preparation of the case with the expectation of trying it on the merits.
But the record shows that respondent consistently indicated it would admit only that it was a trustee holding bare record title and disclosed that someone else was responsible for management. Respondent's readiness to litigate contributory negligence, proximate cause, and actual negligence in the event its primary defense failed is not significant. There is no evidence that respondent stated its intention not to rely upon the defense that it was not responsible for management of the property. As counsel for appellant admitted at trial, attorneys in his office did not perceive the significance of respondent's repeated statements that it held only record title for the benefit of other, unidentified parties. In these circumstances the trial court was correct in determining that there was no evidence of estoppel.
Affirmed.
DEVINE, P.J., and RATTIGAN, J., concur.