Court Opinion

ID: 4891057
Source: CourtListenerOpinion
Date Created: 2021-09-02 23:50:11.707637+00
Date Added: 2024-06-11T08:09:36.645157
License: Public Domain

Walker, J.
This is an action of trespass to try title.
The appellee Mann, and J. G. & J. C. McConnell, on the third day of July, 1866, made and delivered their two certain promissory notes to Roy B. Scott, in the sum of $697 78, specie, giving to Scott in security a deed of trust on the land in controversy, with a power to sell. The notes were not paid at maturity, and the attorneys of Scott, Guess & Record, caused the land to be sold, and Record,' one of Scott’s attorneys, purchased the land for Scott. Scott stands then in the triple relation of mortgagee, trustee, and .purchaser of the mortgaged premises.
W ere this the first time this question had come before the Supreme Court of the State, we confess we should very strongly incline to follow the authorities cited in the very able brief of the appellee, for indeed they appear to us, both in England and in the United States, to be alnjost overwhelming. But a distinction has *729been drawn by those very able jurists, who so long adorned this bench, and whose memories are and will be revered by the profession—Hemphill, Wheeler and Lipscomb.
In Howards v. Davis, 6 Texas Reports, 188, Hemphill, Chief Justice, says: “ That a trustee cannot be the purchaser of a trust estate, without leave of the court, is an established rule in equity. A mortgagee is a trustee, but in a qualified sense. He does not hold for the benefit of others, but for himself. He is a cestui que trust, as well as trustee. He has an interest in the property. It is pledged expressly to secure his claims; and were he deprived of the power to purchase, he might suffer great loss by its sale at a low price. He has an interest that the bid shall amount to his incumbrance, and that the property be not sacrificed to the injury as well of the mortgagor, as the defeat of his own claims; as this may be the only fund for the discharge of his debt. Sales at foreclosures, whether under a power or by decree, are open and public, and are made after long notice; and it is to the interest of the mortgagor that the mortgagee should enter into the competition at the sale.”
The Chief Justice cites in support of his opinion in this case, Bergen v. Burnett, 1 Caines’s Cases in Error. Justice Kent doubted whether the rule that a trustee could not purchase at a sale of the trust estate would apply to a trustee who was also the cestui que trust; and the rule that the trust under a mortgage has never been held to incapacitate the mortgagee from purchasing at a sale of the mortgaged premises, was fully recognized in Slee v. The Manhattan Company, 10 Johnson R., 185.
In Robertson v. Paul, 16 Texas Reports, p. 474, in the very lucid opinion delivered by the learned Justice Wheeler, the same doctrine is recognized and applied, so far as was necessary in the case.
The case of Shannon v. Marmaduke, 14 Texas Reports, 220, is quoted and relied on by the counsel for appellee. But this case *730differs very materially from the oases in 6 and 16 Texas, referred to. Shannon does not appear to have had any interest in the mortgage, and he sold contrary to the instructions and wishes of his principal, and under such circumstances as to warrant the presumption of fraud ; and the sale was very properly set aside, but in a manner in no way to infract the rule referred to and laid down in this case, that the cestui que trust under a mortgage, and who is also trustee of the power to sell, holds the power coupled with an interest, and may purchase the property at a sale otherwise fairly made, and will take a good title; and it makes no difference whether he purchases in his own proper person or hy agent or attorney.
The judgment of the district court is reversed and the cause remanded.
Reversed and remanded.