Case ID: sc-eq_13/html/0001-01.html
Source: Caselaw Access Project
Author: {"author": "Harper, Ch.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Wm. Davis, and Wife, and others, v. Nathaniel Gist, Administrator, and others.
    A purchase by an executor (who is also an heir and devisee) of the lands of a testator, and a conveyance to himself by the Commissioner in Equity, fgr his own benefit, and for that of the other heirs and devisees, with their privity and assent, vests in them the legal title, and they will be bound by the purchase.
    If he so act without their privity or assent, or where they are incapable of assenting, by reason of their minority, he will be personally responsible for the purchase money, though he bid off the land to prevent a sacrifice in the sale.
    The same rule applies to a guardian, acting for his ward. If he bid off property to prevent a sacrifice, he will be bound by his purchase, though he sustain a loss by the subsequent depreciation in its value.
    The authority of a guardian ad litem, terminates with the judgment or decree in the case.
    
      Tried before 7ds Honor, Chancellor JOHNSON, at Newberry.
    Col. Thomas Dugan made and executed his will and testament in 1822, and died not long afterwards. By this will he directed that the tract of land on which he resided should be divided into five lots of a value as nearly equal as possible, to be ascertained and divided by three freeholders, one of the lots to each of his sons, James, Thomas, George and Hiram, and the remaining lot to the children of his deceased son Park: his “negro property” he also directed to be divided into eight lots of a value as nearly equal as possible; and bequeathed one of those lots to each of his children, Margaret Murray, James, "William, Thomas, George and Hiram; one to the children of his deceased son John J., and the remaining lot to the children of his son Park; and he directed that in the final settlement of his estate, the devisees of the lands and negroes should account for their several lots at their valuation; and that those advanced in his lifetime, (an account of ■which was annexed to the will,) should also account for their advancements; and that the whole, including the advancements, should be equally divided among his surviving children, and the children of his deceased sons John I. and Park; the children of each, taking’ as a class, a share equal to one of his own children; and he also directed that the shares left to the children of John J. and Park, should remain under the care of his executors, until they became of age. Of this will he constituted his sons James, George and Hiram, the executors. James alone qualified, and proved the will. Hiram Dugan died in 1823, after the death of the testator, intestate, unmarried and without issue; and afterwards a bill was filed in Court, wherein George and "William Dugan were defendants, and James Dugan and the other legatees under the will of the testator, (who were also the heirs at law of Hiram Dugan) were complainants. This bill charged that it was impossible to divide the plantation described in the will, in the manner therein directed, so as to make the shares of the devisees valuable to them, and prayed that it might be ordered to be sold for the purpose of partition, and such proceedings were had thereon . that at June term, 1823, an order was made that the Commissioner of the Court should sell the land on a credit of one, two and three years, with interest from the date, the purchaser giving bond and security and mortgage of the premises; and at the same time James Dugan was appointed guardian, ad. litem of the minor children of John I. and Park Dugan, and also receiver of the real estate of his testator. In pursuance of the order above mentioned, the Commissioner offered the land for sale, on the 6th of October, 1823, and it was bid off by James Dugan, at $6000. He did not, at the time, comply with the terms of the sale; but on the 24th of November, 1823, he gave bond and security to the Commissioner for the purchase money, and on the 10 th of February, 1824, the Commissioner executed and delivered to him a conveyance of the land, on which he acknowledged to have received, as the consideration, $6000, paid him by the said James Dugan, for himself and the other heirs and devisees of the said Thomas Du-gan, deceased. The grant was unto the said James Dugan for himself and the other heirs and devisees of the said Thomas Du-gan, “habendum unto the said James Dugan and the other heirs of the said Thomas Dugan,” his heirs and assigns, to his and their only proper use, benefit and behoof forever. At the same time James Dugan gave to the Commissioner another bond, in which it was noted that the said James Dugan had been appointed receiver of the real estate of his testator, and that the land devised by the testator, had been sold under the order of Court, for the sum of $6000, payable in three equal annual instalments, with interest; and the condition was, that the said James should well and truly account for, and pay over to, the devisees of the said Thomas Du-gan, their full shares, according to the will of the said Thomas, of the proceeds of the land sold as aforesaid, with the legal interest that should accrue thereon, as the purchase money of the same should become due; and upon the execution of this last bond the Commissioner delivered up to James Dugan the bonds given by him for the purchase money.
    On the death of Hiram Dugan, administration of his estate was committed to his brother George: he died not long after, and administration de bonis non of the estate of the said Hiram, was granted to the complainant William Davis. George was also represented to have died unmarried, without issue and intestate. William Dugan, another legatee, died in 1831, intestate, leaving a widow and four children; ■ and administration of his estate was granted to Zacheus Wright. The purchase money of the land being unpaid, the present complainant, William Davis, (who had intermarried with Lucy, one of the daughters of Park Dugan,) Thomas Dugan, and other devisees under the will, and joint heirs of Hiram, George and Wiki.am Dugan, filed their bill of complaint against James Dugan and others, praying that said James Dugan might be decreed to account with, and pay to them their respective portions of the proceeds of the sales of the land: and that he might also account for the rents and profits before the sale. James Dugan in his answer to this bill, admitted that he did bid off the land at the Commissioner’s sale, at the time and for the price herein before stated; and that he gave bonds for the purchase money, and as receiver, and accepted titles from the Commissioner of the tenor and effect herein before also stated. But he stated that on the 13th of February preceding, at the time he sold the personal estate of his brother, and when all the legatees were present, except Thomas Dugan, and the children of Park Dugan, he offered the land also at public sale, when it was bid off by Hiram Dugan, at $6833; that none of them ever insisted on his keeping it at that price, and he therefore declined keeping it. That the land had been appraised at that price, and that on the day it was sold by the Commissioner, it was agreed between himself and his brothers George and "William, that it was worth that amount, and that unless it brought that sum, it should be bid off on account of the legatees; and he insisted that all the parties interested were bound by the agreement; and that he was not bound to pay the purchase money. He also stated that he had settled with some of the legatees for their interests in the land at the rate of $6000, and prayed that the excess, if any there should be, on a final sale of the land, might be refunded to him. James Dugan died pending these proceedings, and this was a bill to revive them against Nathaniel Gist, to whom administration of his estate had been granted, and to which Robert M'Daniel, William Moore, Ary Jeter and others, had been made parties, defendants; and by way of supplement to the original bill, the complainants charged that the said James Dugan, in his life time did, by deed, without any consideration, convey to the said Nathaniel Gist, Robert M'Daniel, William Moore and Ary Jeter, his whole estate, real and personal; and they prayed that the same might be de-dared void, and the property subjected to the payment of their demand. Gist, the only defendant who answered the bill, admitted that James Dugan did convey to himself, Robert M'Daniel, Wm. Moore, and Ary Jeter, his whole estate, real and personal, and that the consideration therein expressed was love and affection, but added that most of the property thereby conveyed was acquired by his marriage with his wife, who was the mother of Robert M‘Daniel, and of the wives of the other grantees, and that the said deed contained an express condition that the said grantees should pay all his just debts, and that the use of two horses and two negroes, and an annuity of two hundred dollars to the said James and his wife, each, for life, were reserved, and declared their willingness to pay all the just debts, but insisted that they were not liable for the purchase of the land, as the said James Dugan bid off the same as trustee, and for the use of the devisees, under the will of the said Thomas Dugan. That in doing so, he acted under the advice of counsel learned in the law, and under a mistake of his capacity to bind the other devisees, and was not therefore liable.
    The question which first arose was, whether there was or was not an agreement between any, and which of the parties, that the land should be bought in, at the sale of the Commissioner, on account of the devisees, unless it brought a stipulated price.
    Judge O’Neall, examined for the defendants, stated that when at the bar, he was applied to, to file a bill to obtain an order for the sale of the land. James, George and "William Dugan -were present, and without being able to state precisely what-passed on the occasion, was confident that the understanding between them all was, that the land should not be permitted to be sacrificed at the sale; and that if it did not bring a fair price, it should be bid in for the benefit of the devisees: he filled up the deed from the Commissioner, to James Dugan, but had no recollection of his having received any instructions on the subject; and it appeared that he made it in trust, from his own knowledge and recollection of the understanding between the parties. Mr. Higgins, the Commissioner, stated that James, William and George, were present at the sale, and that he understood from Georgethat the purchase made by James, was on account of the devisees; but he did not rocollect to have heard William speak of it: he refused at first to execute the deed to James in trust, hut finally did so, on the advice of Judge O’Neal, and understanding it was according to the agreement of the parties. James Dugan, as the executor of his testator, leased the land to one Crawford in 1824. Between that time and the time of his death, he repeatedly offered it for private sale, and in 1829, and again in 1831, he advertized it for public sale, as belonging to the estate of his testator, styling himself the executor, but was never able to get a bid equal to the sum at which he bid it off. Receipts for the taxes paid by him as executor, were produced for the years 1823 and 1826. To shew that Thomas Du-gan was a party to the agreement, sundry letters (fourteen in number) from him to James Dugan, dated from June, 1827, to March, 1831, were introduced, in all of which he spoke of the land as still belonging to the estate; he pressed James to make sale of it. In his letter of January 27th, 1827, he wrote, “What is your prospect of selling the old placel I do think it is bad policy to hold on so long and not to sell at what can be had, as we cannot make prices,” &c. In his letter of the 24th November, 1829, he wrote, “You mentioned that you had come to the conclusion to sell the old place; now upon this subject you know my mind, as I have been clearly of opinion that to sell is the proper course to bring things to a close; ‘but my dear brother you must so manage it, that the property will bring something like its value; that is all. I depend on you. I am satisfied some one of the Dutch would give the value of it; and I do hope you will give full publicity to the sale, if you cannot make it private sale, which I must think might be done; but I have not tried the point, and consequently cannot speak with ceitainty; the property is valuable, and I do wish that I was able to purchase it, as I should like to do; but this is out of the question, as I am not able to purchase, and consequently I have no idea; but I should dislike to hear of the property being sacrificed, and I do hope I never will hear of it; you are able and can purchase, and let me request the favor of you by no means to sacrifice,” &c.. These were fair samples of the general tenor of all the other letters, so far as they related to this subject.
    
      Pending these proceedings the land had been re-sold at about $4000; the proceeds were directed to be retained to abide the further order of the Court; and James Murray, who was the husband of the testator’s daughter Margaret, had settled his interest in the estate with the defendant G-ist, computing the value of the land at the amount of the last sale, and gave him a discharge in full. These were the leading circumstances tending to shew that there was an agreement that James should purchase the land on account of the devisees. On the other hand, Joseph Marshall proved that before the sale of the Commissioner, James Dugan told him that he intended to buy the land on. his own account and to settle on it, and pointed out the place where he intended to build his house. Not long after the sale, he said to the witness, Mrs. Davis, that he had bought the land for himself because he thought it went low, and intended to settle on it; but that his wife was unwilling to live there, and he afterwards repeated the same thing to George Clark. The year after he purchased the place, he put some hands and an overseer on it and made a crop there. A witness swore that some time after the sale, he heard Janies Dugan say that he had been offered $7000 for the land. The conversation was addressed to a stranger whom the witness did not know. The inquiry was made as to what he intended to do with the odd $1000; (meaning the $1000 over the price he had purchased at,) he replied he would put it in his own pocket. In 1831, James Du-gan offered the land at public sale at Newberry Court House, and requested John Poland to buy it in, unless it should sell for $4000. He bid it off at $3,500. On that occasion he offered it to Mr. Vance for $3,600, and remarked that he should lose a good deal by his purchase. James Dugan settled with five of the children of John Dugan, who had attained full age, for their interests as devisees under the will, in which he estimated the land at $6000, the amount which he bid for it. These circumstances established very clearly, in the opinion of his Honor, the Chancellor, that there was an agreement between George, William and J ames, that the land was worth more than $4000; and that James should buy it in, unless it sold for a larger sum, and that acting on the agreement, he had bought the land. The circumstances which he regarded as opposed to this conclusion, were the declarations of James to the witnesses, as before stated; but he did not thinkit possible to reconcile tbis with the unquestionable faith of the agreement with Greorge and William, and the tenor of the Commissioner’s deed. The necessary conclusion was, that he was practising some of those little arts which some very honest men were accustomed to do, to effect asale of property which they wished to dispose of. As to Thomas Dugan, the objection was, that there was no evidence of his having entered into the agreement, or assented to it previously to the sale; and that his subsequent acquiescence was without consideration, and therefore not binding.' As to this, his Honorregarded that it would be doing no violence to his letters to suppose that they referred to a previous understanding or agreement, and it was not probable that the others would have made such ah arrangement without his consent, for more than all the other members of the family, he was distinguished for intellgence; however this might be, he was bound even by his subsequent acquiescence. It was a family arrangement, which is encouraged for the sake of peace arid order. It was intended’ too, in part for his benefit, and his acquiescence was full and unqualified. He undertook to give directions about the subsequent dispositions of the land; and this influence might work an injury to the other pai'ties, if he were allowed to recede from it; and his Honor therefore decided that he was bound. As to the question whether the infant children of John and Park were also bound by the arrangement: on this point the Court ruled that James Dugan, as the appointed trustee of the property devised to the children of John and Park, in strictness did not have authority to buy in the land on their account; but that this was a sale in which they were interested, ancl their interest required that he should be protected in exercising some discretion as to the price at which it was to be sold; — that had it been going at the one-tenth or twentieth part of its value, he was not obliged to stand by and look on the sacrifice, unable to prevent it, without incurring all the responsibilities incident to the capriciousness of the purchasers, or the accidental depreciation ^of property. The children were not injured: the property, the thing itself, still remained exactly as before, subject to their rights, giving them the advantage of any appreciation in the value and a more willing purchaser. In Equity, a trustee would be protected in doing whatever the Court would oi-der on a proper application: that if it had been made to appear to the Court before the sale, that the lands were of much greater value than $6000, and that a sale for that price would have been a sacrifice, could it be doubted that the Court would have authorized the trastee to enter into an arrangement to buy it in on account of the devisees? The circumstances shewed that the utmost fairness was intended towards the minors. It could not have been otherwise; for all the immediate parties to the arrangement were equally interested with them to obtain the greatest price; the profits or losses were to be shared with them. His Honor was satisfied that fairness was intended, and that the minors were bound by the purchase. The witness, Robert Dugan, stated in his examination that James Dugan had settled with himself and his sisters Elizabeth,Francis A. Shell and wife, and Harman Shell and wife, some of the children of J ohn Dugan, for their interests in the lands of the testator, and for their portions of the rents, estimating the value of the lands at $6000, the amount for which he bought it in; and James Dugan prayed in his answer, that the excess of these payments might be refunded. The Court ruled that this could not be allowed. He knew his rights, and the witness said, spoke of an interest in them at the time, and if he thought proper to surrender them and take his chance, to be reimbursed out of the sale of the land, he must abide by it. His Honor, the Chancellor, therefore ordered and decreed that the defendant, Nathaniel Gist, the administrator of James Dugan, should account before the Commissioner, for the rents, issues and profits of the land mentioned in the pleadings, during the time the said James Dugan had the possession, care and management of them. That after deducting the costs, the nett amount of the rents and last sales of the land be divided into eight equal shares, one whereof should be set apart for James Dugan; one for Thomas Dugan; one for George; one for Hiram; one for children of J ohn; one for the children of Park; one for William, and one for Margaret Murray. That when received, one-eighth part thereof should be paid to Thomas Dugan; one other eighth part to the children of Park Dugan, equally between them; one other eighth part to the legal representatives of Hiram Dugan; one eighth part to the legal representatives of George Dugan, and one other eighth part to the legal representatives of William Dugan; that the two-eighth parts to he set apart for Margaret Murray and James Dugan should be paid to the defendant, Nathaniel Gist, administrator of the said J ames Dugan. That so much of the one eighth part to be set apart for the children of John Dugan, as his children, Robert and Elizabeth, and the wives of Francis A. Shell and Harman Shell, were entitled to receive, should also be paid to the said Nathaniel Gist; the remainder thereof to the other children of the said John Dugan, to be equally divided between them. -
    The costs to be paid out of the proceeds of the rents and sales.
    The complainants, and the defendants who were the representatives of William Dugan, deceased, appealed from the decree of the Chancellor, and moved the Court of Appeals to modify the same in the following particulars:
    1st. So as to hold the representatives of James Dugan, accountable for the price at which the tract of land was sold, as recited in the bond given by him as receiver, with interest.
    2nd. So as to hold the representatives of James Dugan accountable for the said price of the land and interest, as far as regards the shares of the children of Park Dugan and John Du-gan, on the grounds:
    1st. That there was not sufficient evidence to shew that James Dugan bid in the land for the benefit of the heirs of Col. Thomas Dugan, deceased, under any agreement between himself and any of the other heirs, except George Dugan.
    2nd. That the supposed agreement mentioned by Judge O’Neall, in his testimony, was made at the time the bill was filed, in J une, 1823, and relative to all the lands sought to be partitioned, and was that the lands should not be sacrificed, but should be bid in for the heirs, if they should not bring a fair price; and the grounds on which it was now attempted to release James Dugan from his contract to purchase it in October, 1823, was that the land brought too fair a price.
    3d. That the supposed agreement to bid in the land, as represented by James Dugan, in his answer to the original bill, was made on the day of sale, and there was not the slightest evidence to support the allegation,
    4th. That although Wm. Dugan was present on the day of sale, in October 1823, there was no evidence that he entered into any agreement about bidding in the land, or that he was aware that James Dugan intended to bid it in; on the contrary, he on that day purchased one of the tracts of land without even pretending that he was purchasing for the benefit of the heirs.
    5th. That Thomas Dugan was not present either at the time the bill was filed or at the time of the sale, nor was it shewn that he weis ever apprised of the fact that the land was to be sold.
    6th. That the subsequent conversation and conduct of James Dugan; such as pointing out the spot on which he intended to build; renting out the land; giving as reasons for not settling on the land, that his wife was not willing to do so; settling with some of the heirs at the price at which he bid off the land, were all circumstances which characterized the purchase as his own.
    7th. That at all events the children of John Dugan and Park Dugan, all of whom were infants at the time of the sale, could not be bound by any agreement between other persons. The appellants also gave notice, that should they fail to obtain a modification of the decree as above mentioned, they would move the Court of Appeals for an issue, or issues, to be sent down to try the question, whether James Dugan did bid in the land, for the benefit of the heirs, under agreement between himself and the other heirs.
    
      Caldwell Caldwell and Fair Pope, for the appellants.
    
      Thomson <§r Henry, contra.
   Curia, per

Harper, Ch.

If a conveyance be made to one, and delivered to a stranger for liis benefit, this carries the title of the land; because the donee’s assent is presumed to that which is apparently for his benefit. Upon coming to the knowledge of it however, he may dissent, and then the deed is void db initio. All the devisees who are parties to this suit now express their dissent; and if they were at liberty to do so, the effect would bo to prevent the execution of the use in them, and to leave the legal title in James Dugan, to whom the conveyance was directly made. Having purchased without any understanding with them, he must be held to have taken the risk of their assenting; and the legal title being in him, he must be bound by his bond given for the purchase money, unless he could shew some ground for being relieved from his purchase. The only ground relied upon (and which it seems hardly necessary to consider) is, that he purchased under a mistake of the law, being misled by the advice of counsel. But, speaking on the supposition that he purchased without the privity or assent of the other parties, ho certainly was not advised that he could purchase for them without their consent, and compel them to take the land whether they would or not. If he was misled by advice, it was to this effect, that the conveyance would give him authority to sell the land, notwithstanding the trust declared. And in the case supposed, that all tho parties could and did dissent, the advice was perfectly correct. The legal title being in him, he might convey it. If all the parties assented, he has nothing to complain of. They are entitled to nothing but the land, or the proceeds of it; by accepting which, they will confirm the conveyance made by him. So of any of the parties who assented or dissented.

, With respect to the parties who were of age at the time, we see no reason to distrust the Chancellor’s conclusion, that he purchased under an understanding with George and William Dugan, that ho should bid off the land, if it appeared likely to go for less than its value. The evidence is perfectly satisfactory of Thomas Du-gan’s assent after the sale. Nor do I think there is any force in the objection, that he did not pursue the agreement, by bidding off tlie land without taking any title, and leaving the land to be resold under the older of the Co(urt of Equity. ¥e have no evidence of the precise terms of the agreement, only generally of an agreement to bid off the land. This was substantially performed by taking such a conveyance as vested the land in them just as it was before; and the Court would not subject him to liability if he failed to pursue the precise form which might now appear most convenient.

The only difficulty relates to the parties who were infants at the time, and who are understood to be now of age, and to dissent. The Chancellor supposes Jam'es Dugan to'have been appointed their guardian or trustee, in relation to this land, by the will of Col. Dugan. But, supposing this to be so, certainly a guardian or trustee is not authorized to purchase for his ward or cestui que trust, or he must do so at his own risk, subject to his assent or dissent. The- Chancellor supposes that there is difference when the ward’s own property is the subject of sale, and that the guardian may, in pursuance of his duty, bid off the property to prevent its being sacrificed. But I know of no principle or authority for this, or that any such duty is required of him when the property is sold by order of Court. If it were a matter of duty, he would be liable for the neglect of it. But I have never known of such a liability being incurred. He is certainly to be commended for vigi. lance, in attending to his ward’s interest; but the ward is not to be made liable for losses incurred by his defect of judgment. If in truth the property be likely to be sold at a sacrifice, he runs no risk; for the ward’s interest will induce him (or will induce the Court, if the Court has to decide for him) to assent to the purahase; but if he has prevented an advantageous sale, he must bear the loss. The natural conclusion would be, that in this case, the land was bid up to near $6000 by others. By bidding that sum, James Dugan prevented the sale. It has since been sold for $4000. If by an injudicious interference, which no official duty required of him, he has prevented a more advantageous sale, why should the loss be thrown on his wards'? When a trustee purchases the property of the cestui que trust, for himself, it is at the option of the cestui que trust to set aside or confirm the sale. And so I apprehend it must be when he purchases in the name of the cestui que trust.

But, in truth, James Dugan was neither guardian nor trustee under the will. He had simply an authority to manage the property without any view to a sale. Nor did his character of receiver require him to protect the sale. He was also guardian ad litem of the infants, in the suit in Equity. But it is generally understood that the authority of such an one terminates with the judgment or decree. Certainly, however, the office gave him no authority to .purchase for the infants, nor did his duty require it of him.

The decree of the Chancellor is therefore affirmed, except that the children of John Dugan and Park Dugan respectively, are declared entitled to one-eighth part of the amount of the original sale of the land, made by the Commissioner in Equity, to James Du-gan, and it is ordered and decreed accordingly.