Case Name: STEPHENS vs. BEALL ET AL.
Court: Supreme Court of the District of Columbia
Jurisdiction: District of Columbia
Decision Date: 1873-04
Citations: 1 MacArth. 38
Docket Number: No. 2434
Parties: STEPHENS vs. BEALL ET AL.
Judges: 
Reporter: Reports of cases argued and determined in the Supreme Court of the District of Columbia (District of Columbia - reported by Mackey)
Volume: 8
Pages: 38–40

Head Matter:
STEPHENS vs. BEALL ET AL.
Equity.
No. 2434.
I. It is an established principle in this court that a trustee or agent, in respect of the sale of property, cannot hecome a purchaser, either himself or by the intervention of another party, without the most positive explanations as to the good faith and honesty of the transactions.
II. A case of this character stated, in which the court refuses its aid in, behalf of a trustee.
STATEMENT OF THE CASE.
This case was heard upon the pleadings, consisting of a bill and cross-bill and answers thereto.
The bill substantially sets forth that complainant was appointed a trustee by a decree of the circuit court of Prince George’s County, Maryland, for the sale of the real estate Oliver B. Magruder, deceased; that be sold the same defendant, William D. Beall, of the District of Columbia, for $10,100, of which $1,000 in cash was paid down, and the residue in three notes on one, two, and three years, each with interest. That said notes were secured by a deed of trust on lands in this District, executed by said Beall and his wife,, and that thereupon the sale was reported and confirmed by the said circuit court on the 11th day of November, 1857 that the note not being paid when due, the said circuit court ordered the lands sold to said Beall to be resold at his risk and loss, and that the same were accordingly resold to Frederick C. Crowley for the sum of $6,478, the loss on such sale being $3,748.65, and which has never been paid. The bill concludes with a prayer that the lands in this District, conveyed by said Beall and wife to complainant, may be sold to-pay said deficiency with interest, and that an account may be taken, &c.
The answer admits the sale to said Beall of the lands in Prince George’s County, Maryland, and that he paid $1,000- and gave the notes and executed and delivered the trust-deed upon the lands in this District, described in the complaint. It also alleges that complainant never executed or delivered to said Beall any conveyance of the land in Prince George’s County, which is the reason he refused to pay said notes. It is further alleged that complainant obtained said trust-deed from defendant, Mary Beall, by fraudulent representations. The defendants deny all knowledge of the proceedings in the circuit court of Prince George’s County, and allege that the sale to Crowley was fraudulent, and that complainant has procured a conveyance from said Crowley of said lands to himself. They deny that anything is due from them, and claim that complainant is indebted to said Beall in the sum of $1,000, so paid to him as aforesaid. They further say that the defendant, Beall, never had any title to the land embraced in said trust-deed, but that the same was, aud still is, in his said wife, Mary Beall, jointly with her three children. A want of parties is alleged, and that the defendant, Mary Beall, being a married woman, could neither in law nor equity pledge her separate estate for the debt of her husband.
The cross-bill' died by defendants recites the averments of the bill, and reiterates substantially the admissions, averments, and allegations of the answer, and concludes with prayer for relief.
The answer to cross-bill denies fraud or misrepresentation, or that the complainant ever promised to deliver a deed of the property in Prince George’s County; admits that he has purchased the said property, arid paid full consideration therefor in good faith ; admits that he knew that the real estate on which the trust-deed was given belonged to Mrs. Beall.
T. T. Crittenden for complainant.
R. T. Merrick, for defendants,
cited Michand vs. Gerod, 4 How., 503.

Opinion:
By the Court :
Upon the state of the pleadings, the bill was properly dismissed by the court below. Upon the face of such a case, the court ought not to lend its aid to the complainant, on the ground that it is an established principle that a trustee or agent, in respect to the sale of property, cannot become a purchaser, either in person or by the intervention of a third party, without the most clear and positive explanations as to the good faith and honesty of the transaction. In this instance the court is not satisfied. The trust is not yet discharged, and the trustee has become the admitted owner of the property, and offers no explanation but his own averment in the pleadings as to the good faith of his purchase. The defendant, Beall, has never for an instant been in possession or enjoyment of the property which he is alleged to have purchased from complainant; and his equitable right has been foreclosed by an eco-parte order, and the property resold for a sum greatly less than he agreed to pay for it. In the meanwhile the trustee has himself become the owner, and is in possession of the lands to the exclusion of the heirs of Magruder, and while he retains the $1,000 paid by Beall, he brings suit to compel defendants to pay the notes, for which there has never been consideration received.
The decree is affirmed. Without considering the question of parties, or whether Mrs. Beall could encumber her separate estate to secure the indebtedness of her husband, the court are of the opinion that the case presented carries condemnation on its face.