Court Opinion

ID: 9653299
Source: CourtListenerOpinion
Date Created: 2023-08-23 17:43:20.918143+00
Date Added: 2024-06-11T18:12:57.647657
License: Public Domain

GOODRICH, Circuit Judge
(concurring).
The point to be made in this concurring opinion is not one which will affect the result in this case for the majority opinion demonstrates the reason we all feci why, under the statute and general principles of law applicable, Mr. Evans must lose out even though his dealings were in the shares, of a subsidiary and not the main debtor company. But I find no reason that I can think of, why that rule should be applicable with regard to the purchases made by Mrs. Evans. Nobody would, these days, fall back on the old common law unity of husband and wife now that a married woman may keep her own money, if she is lucky enough to have any, and trade with it as-she pleases. The facts here show that Mr. Evans knew about and approved the purchase by Mrs. Evans. Suppose he did not ? There is authority which says in that sort of case the rule does not apply. In re Philadelphia & Reading Coal & Iron Co., D.C.,E.D.Pa.,1945, 61 F.Supp. 120.1 Suppose he had known about it and then disapproved it? Mrs. Evans certainly could.have made the investment just the same. Would that fact have precluded her husband from compensation?
The rule applied in this case becomes-somewhat attenuated when the dealing is not directly in the trust property itself, but in a subsidiary corporation. It seems to< me that the attenuation goes to the point where the rule loses all its force when applied to dealing's by a wife in that subsidiary. Even where a trustee sells part of the-trust res to his wife there is divergency of authority, some cases holding the transaction valid.2 Here there was no purchase-*349of the trust property either by Mr. or Mrs. Evans which would cause a sale between husband and wife to be disallowed. There was simply an investment which was made in the property of a subsidiary concern whose interest clashed with that of the principal debtor. It seems to me in such a case the husband should not he affected one way or the other by his wife’s business dealings.

 See especially p. 128: “This includes Mr. Bortin. His wife traded in the securities of the Company [being reorganized] during the period of his employment but I accept his testimony that he did not know of it, did not advise her in connection with it and never discussed with her the affairs of the Company. * * * In any event, I do not think that trading by a wife without the consent, advice or knowledge of the husband is trading by him or for his account either directly or indirectly.”

 2 Scott, Trusts (1939) p. 867 and 1946 Supplement p. 9: “Whore a trustee sells trust property to his wife without any agreement or understanding that she will hold it for or reconvey it to him, there is a difference of opinion on the question whether the sale is voidable. In some cases it is held that the mere fact that the trustee’s wife is the purchaser is enough to make the sale voidable; in others it is held that that fact is merely some evidence that there was an understanding that she was to buy the property for him or that the sale was made at an inadequate price in order to favor her, but that the mere fact that thé purchaser was the trustee’s wife is not of itself a sufficient ground for avoiding-the sale if in all other respects it is proper. [Citing the following cases in footnote: Crawford v. Gray, 131 Ind. 53, 30 N.E. 885 (1891); Cox v. Simmerman, 1932, 243 Ky. 474, 48 S.W.2d 1078; Burrell v. Burrell’s Trustees, [1915] S.C. 333 (Scotland). In Vinal v. Gove, 1931, 275 Mass. 235, 175 N.E. 464, it was held that where the trustee’s -wife purchased trust property on foreclosure salé under a first mortgage in order to protect her own in*349terest under a second mortgage, the sale would not be set aside if it was a fair sale. In Lange v. McIntosh, 1937, 340 Mo. 247, 100 S.W.2d 450. where a trustee under a mortgage sold property to his wife who owned some of the notes which were secured by the mortgage, it was held that the sale could be set aside where the property was sold at a small fraction of its value and no other bidders were present.] * * * ”