Case ID: nj-eq_5/html/0319-01.html
Source: Caselaw Access Project
Author: {"author": "The Chancellor.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

CORNELIUS WINTER AND WIFE v. BENJAMIN GEROE AND WILLIAM I. STAGG.
    1. On a sale of land by a fiduciary, he cannot buy, either directly or through another.
    2. Proofs on which it was determined that one to whom land was struck off at an executors’ sale bought for the executors.
    The bill states that on the 18th of May, 1843, Daniel Ge-roe died, leaving a large personal and considerable real estate, and leaving a will dated December 15th, 1836, by which, after bequeathing his personal estate, he gave to his wife the house and lots where he then lived, as long as she should remain his widow, and to his son, Benjamin Geroe, the mountain lot in fee ; and the remainder of his real estate to his three children, Peggy, wife of Cor n el i u s W inter; Caty, wife of William I. Stagg, and his son Benjamin, equally, in fee, to be divided or sold as two out of the three could agree; and appointed said Stagg and Benjamin Geroe executors of the will, who proved the will. That in the fall of 1843, the complainant Cornelius Winter, and the defendants, Benjamin Geroe and William I. Stagg, met for the purpose of dividing the real estate, when they, the said defendants, requested the complainant to make a division thereof into three parts, and that the complainant thereupon divided it accordingly, as equally as he could ; but inasmuch as he, the complainant, thought that one of the parts was more valuable than either of the others, he proposed that the person who should take that share should pay to each of the others $66.66, to equalize the shares; and that while they were so together, the complainant being desirous of making a division amicably, offered that the other two should each choose a share, and that he would take the remaining one. That Stagg then chose a share, but that Geroe then refused to choose a share and declined making such division; and that since that time, Stagg and Geroe have made no further attempt to divide the lands.
    That Stagg and Geroe, as executors and devisees, afterwards advertised the lands for sale at public vendue, on the 18th of January, 1844, at the house of John C. Ackerson, innkeeper in Manchester, Passaic county. That the complainants, Winter and wife, not believing that Stagg and Geroe, after the said proposition made to them by Winter, would sell the property, did not attend the sale.
    The bill charges that Stagg and Geroe, to deprive the complainants of the property and get the benefit thereof to themselves, did, on the said day, strike off to one J. J. Goetschius, who attended the sale as their agent, a part of the lands, and did, with the wife of said Stagg, execute a deed to Goetschius for four lots, (describing them,) being parts of said real estate; which deed purports to be given by the said Stagg and Geroe, as executors as aforesaid, and Caty, wife of said Stagg, and as devisees under the said will. That the deed is dated January 20th, 1844, and purports to be for the consideration of $1035. That Goetschius, with his wife, did thereupon, on the same day, execute and deliver to the said Benjamin Geroe a deed for the first and third, of the said lots, purporting to be given for the consideration of $600, and a deed to Stagg for the second and fourth of said lots, purporting to be given for the consideration of $465; and that said deeds are both quit-claim deeds, without any covenants. That the said sale was made to Goetschius as the agent of said Stagg and Geroe, and that he conveyed the property to them in pursuance of an agreement made previous to the sale to him. That the sale was made at about half the value of the land; and that the same was so arranged by Stagg and Geroe, for the purpose of getting complainants' right n the property at less than its fair value, and in fraud of the omplainants. That no money was paid by Goetschius but that the sale to him, and the price mentioned in the deed to him, were intended to deceive the complainants, and induce them to believe that the sale was bona fide.
    
    The bill prays that these deeds may be declared to be void, and that Stagg and Geroe may be decreed to convey the property to such persons as the court may direct, or to convey one-third part thereof to the complainants; and that the property may be sold or divided under the order of the court.
    The defendants put in their joint and several answer. The answer, so far as it is necessary to state it, says that one lot was struck off' to Alyea, and three lots to Goetschius. That the bid of Alyea was then and there declared by him to be for the benefit of Goetschius, who then and there signed the conditions of sale and received a deed for the four lots. It denies that the sale was fraudulent and intended to injure Winter and wife, but alleges that it was made in good faith. Denies that the property, so as aforesaid sold to Goetschius, was sold to him as the agent of the defendants, or either of them ; or that Goetschius attended the sale as such agent; and denies that the part bid off by Alyea, and by him transferred to Goetschius, was sold to him or Goetschius as such agent; or that Alyea attended the sale as such agent; and says there was no agreement. express or implied, between Goetschius and Alyea, or either of them, and the defendants, or either of them, or any person on their or either of their behalf, that Goetschius and Alyea, or either of them, should give to the defendants, or either of them, or to any other person, the property by them purchased at the sale, or any part thereof, or that the defendants, or either of them, should take such property from them, Goetschius and Alyea, or either of them. It denies that the said sales and conveyances were made pursuant to any agreement entered into prior to the public sale, and denies t-hat the property was sold at public sale at a very low price, at about half its fair value, though they admit that they considered it cheap at the pricés for which it sold.
    The substance, of the testimony is as follows:
    C. S. Van Wagoner, for the complainants.
    — Shortly before the sale he told Stagg and Geroe they might sell the property, but could not buy it themselves ; that if it would not bring enough to warrant its being sold to others, it might be well to get some person to bid it off, till a fair and amicable settlement could be made with Winter; that after the sale Geroe called on him and said that, for the parts of the property, that had been bid off to Alyea and Goetschius, the deeds were to be made out to him (Geroe) and Stagg, and asked whether that could be done; he first told Geroe he thought it could, but it would be necessary for Alyea and Goetschius to assign their rights, on the conditions of sale, to them; after a little reflection he told Geroe he thought it would be altogether illegal; that if Alyea and Goetschius had bought the property for the purpose of retaining it, the title should be made to them, and if the title was made to them, and by them immediately to Stagg and Geroe, he did not think it would stand law, even if the sale had been bona fide to Alyea and Goetschius; he told Geroe their best way was to make out the deeds to the purchasers as they appeared on' the list of sales; ne asked Geroe whether Alyea and Goetschius had paid any percentage; Ge-roe said not; that he did not think it worth while; that their object was to get the estate settled ; that they were at any time willing to do what was right with Winter; from the conversation, witness took it that Alyea and Goetschius had bought in the property for Stagg and Geroe, though Geroe did not say so in so many words; he did not allege that Alyea and Goetschius had bought on their own account; Geroe said, “ We’ll take deeds and risk it; we have taken advice upon it;” the subject of conversation between him and Geroe was whether the sale would be valid if it went to Alyea and Goetschius, and from them direct to Stagg and Geroe; witness understood from the conversation, and from what had transpired between witness and Geroe, that the property had been bid in by Alyea and Goetschius for Stagg and Geroe.
    J. J. Goetschius, called for the defendants.
    — He attended the sale and “ purchased ” several lots (mentioning them); “ bid them off at public salehe did not attend the sale as agent for anybody; there was no agency — not in his mind, as he considered it; before the sale, and he thinks on the forenoon of the day of sale, he saw Stagg, and Stagg asked him whether he was going to the sale; he thinks he told him he did not know whether he should or not; Stagg told him he had better go, as he, Stagg, expected the sale would go on, and if deponent bought any property there that was cheap, he, Stagg, would take it off his hands; witness, in speaking of agency, has reference to this conversation ; if there was any agency it was that; witness did not consider it any agency ; he considered that if he bought the property he was at liherty to keep it, or to let Stagg have it; when he bid off the property, he had an idea that Stagg would take it from him; he did not bid it off as agent; he thought the property was cheap; yet he had an idea that Stagg would take it from him ; and if he would not, witness would keep it himself, as it was cheap; he did not consider himself in any way bound to give the property up to Stagg; Stagg was not bound to take the property from witness, any further than he said if witness bought it cheap he would take it; witness did not consider that Stagg was bound to take it by what he said ; witness does not think nor remember of anything else that passed between him and Stagg or Geroe, about the property, before the sale; after the sale, witness took a deed for the property struck off to him, and also for that struck off to Alyea, from Stagg and his wife and Geroe; he is under the impression that on the same day of the sale something was said to him by Stagg and Geroe about their taking the property, but ho cannot recollect exactly what 'it was ; no conclusion was come to between them on that day ; by conclusion, he means they made no bargain, confirmed nothing ; nothing was done by which he was bound to give the property up to them ; nothing further passed between them, in relation to the property, till the deed was given, that he can now remember; he does not remember of any positive agreement to let them have the property, only the delivery of the deed ; there was none before then.
    Cross-examined. — He cannot now recollect whether he executed one or two deeds. (It was here admitted by the parties that the property bid off by Alyea was conveyed by this witness, Goetschius, to Geroe.) The witness says it seems to strike nim that something was said to him, by Stagg and Geroe, on the day of sale, about their taking the property, but does not remember what was said; does not remember refusing to let 
      them have it; when they came to him, on Saturday, after the sale, at his store, the deed or deeds were already drawn, find were brought there to be executed; they paid him no more money for the property than he gave ; he did not pay anything for the drawing or acknowledging of the deeds; Stagg and Geroe paid or gave him a small compensation for his trouble —two dollars; he thinks he would have gone to the sale if Stagg had not spoken to him about it, but is not positive; he did not ask any compensation, but they gave him two dollars; the deeds were brought to deponent’s store by Stagg and Geroe, to be executed by him ; he does not exactly remember whether the two dollars were given to him or his wife; it was his intention they should go to his wife; it was entirely gratuitous.
    David J. Alyea, sworn for the defendants.
    — He bought a lot j it was struck off to him for $410 ; he did not attend the sale as agent for Stagg and Geroe, or either of them ; did not bid off that lot as agent for them, or either of them; there was not, before the sale, any agreement, understanding or arrangement between him and Stagg and Geroe, or either of them, that they should take the lot struck off to him ; in making his bid and purchasing, he acted entirely on his own responsibility ; after the lot was struck off, Goetschius. took his bid ; this was not the day of the sale, but a day or two afterwards, as near as he can recollect: Stagg had then spoken to him, and offered to take the lot off his hands ; this was after the day of sale; he transferred the bid to Goetschius at Stagg’s request; Stagg or Geroe had not requested him to attend the sale, more than that one of them told him the property was to be sold on a certain day; when he went to the sale he did not intend to bid ; did not know that he should be a purchaser; he was induced to bid because he thought the lot cheap; no person, on that day, or at the sale, requested witness to bid for him ; he did not receive any hint or intimation from any person, either before, or at, or during the sale, that if he bought, what he bought would be taken off his hands; when the lot was struck off to him he expected to keep it, to the best of his knowledge; he did not, while bidding, expect the bid to be taken off his hands by either Slagg or Geroe; Stagg came to him, while bidding, and asked him who he was bidding for j he told him he was bidding for himself; Stagg did not give him anything for his bid; he did not pay the percentage; he was not called on to do it; he did not sign the conditions of sale; does not think he was asked to do so; did not sign any written transfer of his bid to Goetschius ; it was done verbally ; he does not recollect signing any transfer of his bid.
    Henry M. Speer, sworn for the complainants.
    — He was at the sale ; directly after the sale, he told Alyea he had bought that property cheap, and asked him what he would take for his bargain; Alyea said he did not know; witness told him he could find a man who would give him $150 in cash for his bargain ; Alyea asked who it was; witness told him it was Mr. Myers; Alyea did not say whether he would take it or not; at another time he asked Alyea whether he bought the property for himself or not; he said no — he bought it in for them; at the first conversation with Alyea, witness went in to see what he would take for his bargain, and told Alyea that Myers would give him $150 for his bargain; when Alyea said he bought it in for them, he did not mention any names, but deponent supposed he meant Stagg and Geroe.
    The conditions of sale were dated January 18th, 1844, and are signed by Stagg and Geroe, as executors, &c., of Daniel Geroe, deceased. The following endorsement appears on the conditions of sale. “ I have purchased at sale within-named lot No. 2 on a map made by C. S. Van Wagoner, for John J. Goetschius. January 18, 1844. David J. Alyea.”
    
      A. S. Pennington, for the complainants.
    He cited 1 Coxe’s N. J. Pep. 26; 8 Vesey 345-6-8; 3 Brown’s Ch. 119; 3 Har. Rep. 81; Sawyer on Trusts 376, 390; 1 Wil. 320.
    
      D. Barkalow, for the defendants.
    He cited 2 Hill 434; 2 Caine’s Cases in Error 183; 3 Paige 178; 3 Ves., Jr., 740, note.
   The Chancellor.

There is no controversy as to the law of the case made by the bill. It is within the principle, that on a sale by a fiduciary, he cannot buy either directly or through another. The question raised and argued is, whether from the bill, answer and proofs in the cause, it appears that the defendants, Stagg and Geroe, who made the sale, did, through another, buy the property themselves. It is a question of fact.

If the answer is to be taken as a full denial, (perhaps the imperfection which is discoverable in it was not intended,) I think it is overcome by the testimony on the part of the complainants and the corroborating circumstances.

The sale was made on the I8th; on the 20th the deed to Goetschius, and the deeds from him to Stagg and Geroe were made and delivered. They were all prepared by the defendants, and taken to Goetschius’ store to be executed by him. Two dollars were given to Goetschius or his wife for his trouble, and nothing passed between Goetschius and the defendants after the sale, till the deeds were given.

These are all strong circumstances. The bill is supported by the testimony of Van Wagoner, called for the complainants; and the testimony of Goetschius, though called for the defendants, is clearly and strongly in support of the bill. The credit of Alyea, called for the defendants, is impaired by a discrepancy in his own testimony, and by the testimony of Henry M. Speer, sworn for the complainants, who says that in conversation with Alyea, shortly after the sale, he told Alyea that Myers would give him $150 for his bargain; that Alyea said nothing at that time in answer. That at another time, he asked Alyea if he had bought for himself, and he answered no, he had bought for them ; meaning, as witness understood it, Stagg and Geroe.

I think this is a case which calls for the judgment of the court in support of a principle which the policy of the law requires should be strongly maintained. It would "be of dangerous tendency to be lax in the application of this principle. It would encourage cunning and dissimulation, and a resort to unworthy devices to cheat the law.

The sale will be declared void.

Reversed on question not raised before the Chancellor, 1 Hal. Ch. 655.

Cited in Blauvelt v. Ackerman, 5 C. E. Gr. 146.