Case ID: sc-eq_11/html/0475-01.html
Source: Caselaw Access Project
Author: {"author": "Johnston, Chancellor.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Daniel S. Black, v. John Hair and Peter Black.
    A mortgagee of personalty does not fall within the principle which prevents a trustee to sell from buying at his own sale ; but he holds such a trust character as to throw the burden on liim of showing the fairness of his purchase.
    The bill states that the plaintiff gave his father, James Black, a mortgage on upwards of twenty negroes, together with horses, stock, plantation tools, &c., to secure the payment of $1000 annually for twelve years, commencing on 1st January, 1829, conditioned that in default of payment, the said James Black, his executors, administrators, &c., might advertise and sell the said property to the highest bidder, to satisfy the said notes, returning the overplus. That James Black died, and defendants administered on his estate; and default being made in payment of the notes *as aforesaid, they proceeded to sell, on two different days, several of the negroes and other property, and themselves L purchased some of the negroes and other articles of property, at inadequate prices, on which one of the defendants afterwards made profit by selling again. The bill prays that the sale to defendants may be set aside, on the ground that a trustee to sell cannot purchase at his own sale ; and that the property may be re-sold at their risk.
    The answer admits the sale and purchase, but insists that the sale was fairly conducted ; and one of the defendants admits that he made a profit of $25 by selling a slave he bought on the day of sale. Denies fraud, &c.
    Chancellor De Saussure, before whom the cause was heard, decreed on this part of the case as follows :—
    As to the conduct of the administrators in conducting the sales of the slaves, the evidence is conclusive that they were fairly made, and brought fair prices. As to the minor articles, although some of the circumstances at first induced doubt, yet I agree with the Commissioner, that upon the whole there is no sufficient ground to vacate the sales.
    The plaintiff appealed, and insisted that the defendants were trustees to sell, and sustaining that character they were not at liberty to purchase at their own sale : that all the reasons applicable to other trustees existed here, where the time, place and credit were fixed by them, and the auctioneer was their agent. And on the evidence, it was argued that the sale was not fairly conducted ; at least was so suspicious that defendants should pay the costs.
    
      Herndon and Caldwell, for appellants.
    
      Pope, contra.
   Johnston, Chancellor.

A majority of the Court is of opinion that the plaintiffls appeal cannot be sustained.

The opinion of the Court (in which, to avoid being misconceived, I state that I do not concur) is, that a mortgagee of personalty does not fall within the principle which prevents a trustee to sell from buying at his own sale. It is my province to state the reasons which have conducted my brethren to this conclusion.

*694.1 *4. cre(frt°r bolding a mortgage security is a trustee to sell, not -I only for the benefit of the mortgagor, but for his own also. If he were not at liberty to bid, he would be deprived of the means of protecting his own interests as creditor. The mortgagor is at liberty to bid also, and has thus the means of entering into fair competition with the mortgagee, and compelling him to give a fair and full price.

But the Court is of opinion, that although a mortgagee does not stand in that relation to the mortgagor which would subject him to an order setting aside, as of course, his purchase at his own sale ; yet that he holds such a trust character, as to throw the burden on him of supporting his purchase by proof of fairness.

In this case, the Commissioner and Chancellor have drawn an inference from the evidence before them, that there was no actual fraud in the sale ; and they appear to be well warranted in their conclusion.

Chancellors De Saussure, Johnson and Harper, concurred.