Court Opinion

ID: 6665511
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:05:50.689989+00
Date Added: 2024-06-11T16:00:19.804178
License: Public Domain

Buchanan, Ch. J.,
delivered the opinion of the court.
We entirely concur with the Chancellor, in the view he has taken of the wily conduct of Benjamin Richardson, the appellant, whose whole course in relation to the subject of his petition, bears upon the face of it, the deep impress of trick and fraud; and in his refusal to set aside the sale, and exonerate Benjamin Richardson from his responsibility for the purchase money of the land, to which he had become subjected, by lending himself as a cover, to the violation of his duty, by an unfaithful trustee.
The policy of the law forbids, that a trustee shall become a purchaser, directly, or indirectly, at his own sale, and if he does, such sale may, and will be set aside, on the proper and reasonable application of the parties interested. In this ease, Benjamin Richardson alleges in his petition, that he became the purchaser of the land at the instance, and for the exclusive benefit of Abraham Jarrett, and Samuel Richardson, a trustee appointed by the Chancellor, for the sale of it. Thus shewing, that although the purchase was nominally by him, the trustee was, with another, virtually the purchaser at his own sale. And upon that ground, and charging also a fraudulent collusion, between Jarrett and the trustee, to whose abuse of trust he admits that he lent himself as a cover, seeks to have the sale vacated; not for the benefit of any whose interest it was that the land should be sold to the best advantage, but to rid himself of a liability in which he has been involved by his own improper conduct. Every step he appears to have taken throughout the whole of his devious course, in connexion with this subject, merits the reprobation, rather than the favorable consideration, of a court of equity. The rule, that a trustee shall not become a purchaser at his own sale of the trust property, was not adopted in favor of trustees, but for the protection of the *185interest of the cestui que trust. It is not, therefore, On the application of a trustee, to be relieved from his purchase of trust property at his own sale, that Chancery will interpose to set aside such sale. It is only done in behalf of those who are interested in the faithful execution of the trust. To vacate a sale by a trustee, at which he was himself the purchaser, either directly or through the agency of another, (merely on the principle that a trustee shall not become a purchaser at his own sale,) on the application either of such agent, or of the trustee, whenever it may befound convenient, or to his interest, to get rid of the purchase, would be an abuse of the rule to the prejudice of the cestui que trustand in the emphatic, and very appropriate language of the Chancellor in this case, to make the rule, “a direct instrument of gross fraud.” The order therefore, of the Chancellor, so far as it relates to the dismission of the petition'of Benjamin Richardson with costs, will be affirmed. But so far as it directs Benjamin Richardson, and Abraham Jarrett, and William Richardson, his sureties, to pay the purchase money to the present trustee, or bring it into court, or show cause to the contrary, it is purely interlocutory, and professes to settle nothing between the parties; but affords them an opportunity to show, if they can, that they are not bound to pay, or bring the money into cout as directed, and is not as to that matter, an order from which an appeal will lie. But as doubts are entertained whether a purchaser at a trustee’s sale, who has given bond for the purchase money, can regularly be compelled in this summary way, to pay, or bring the money into court; and a desire has been suggested by counsel, after argument, that we should express an opinion on the question; in order that it may be put at rest, we will very briefly present our views of the subject. Where a sale is made under a decree or order in Chancery, and no bond or security is given for the payment of the purchase money, a practice has grown up in Chancery, and sanctioned by this court, in Anderson vs. Foulke, 2 Harr. and Gill, 346, to compel ihe purchaser to complete his purchase, by *186an order on him in a summary way, to pay or bring the money into court, and that from necessity arising out of the peculiar character of such transactions. No action at law will lie to enforce a decree in Chancery, within the territorial jurisdiction of the Court of Chancery. An order of the Court of Chancery ratifying such a sale, is considered as amounting to a decree for the payment of the money; and if that court could not enforce the execution of it, it could not be enforced at all. Before ratification the trustee cannot sue, because until ratified, the sale is not complete and binding; the contract is not perfect—nor can he sue at law after the ratification, because it thereby becomes a sale by the court; a contract with the court; and being but an agent, he cannot sue on a contract between the vendee and the court, and not a contract made and concluded with himself, and the order of ratification vests him with no authority to sue at law for the enforcement of the contract. There is, therefore, in such a case, no person to sue at law, if an action at law would lie to enforce a decree or order in Chancery, and the remedy must be in Chancery. But it may be asked, whence Chancery derives the authority to proceed in a summary way, by order, to enforce the payment of the purchase money; and why not proceed by bill in equity ? The answer to which is, that a Court of Chancery having a clear right to enforce its own decrees, and an order of ratification being considered as amounting to a decree for the payment of the purchase money, a purchaser who neglects or refuses to comply with such decree, is in contempt, and may be dealt with accordingly, by an order in the first instance, (in this State) to bring the money into court, as preparatory to an attachment. And that looking to an order of ratification, as amounting to a decree for the payment of the purchase money, there is no reason for requiring a proceeding by bill, to compel a compliance with such a decree, which would not apply to any other decree; and that such a course of proceeding would lead to endless and unnecessary circuity, without any beneficial result. *187But where a bond is given to the trustee for the purchase ■money, under an order of sale from Chancery, requiring bond to be given, the terms of sale are complied with, and a contract entered into, not with the court, but the trustee, on which, after ratification, he has a full and perfect remedy at law, for enforcing the payment of the purchase money, that is recognised and sanctioned by the order of ratification, which, in such case, is not a decree for the payment of the purchase money, but a confirmation only, of what has been done. And though the contract of sale, being perfected by the order of ratification, it is thereby said to become a sale by court, yet the terms of sale bein.g complied with, and the purchase completed, by giving to the trustee as required, a bond to secure the payment of the purchase money, the purchaser is not in contempt by the non-payment of it. The contract on the bond not being with the court, but with the trustee, under the sanction of the court, and the remedy is by suit on the bond in a court of law ; and Chancery cannot enforce it, as a mere bond for the payment of money, by which the original simple contract of purchase is extinguished. And if the payment of the bond, as such, cannot be enforced by a bill in Chancery, afortiori, can it not be enforced in a summary way, by an order to bring the money into court. There must be a deeree, or order of ratification amounting to a decree, for the payment of the purchase money, as a foundation for an order to bring it into court. It is not merely on the ground, that the purchase money is remaining unpaid, that such an order is passed, but it is on the principle that there is a decree, for the payment of the purchase money, and the purchaser being in contempt, the order has for its object the enforcement of that decree. Where there is not such a decree, there can be no such order; and an order of ratification sanctioning and confirming a contract of sale, by which bond and security is given for the payment of the purchase money, cannot we think, be construed to amount to a decree for the payment of it. Where the sale is a cash sale, the order of ratification is held to amount *188to a decree for payment, which must be enforced in Chancery, there being no remedy at law. But where it is not a cash sale, and bond is given for the purchase money, the order of ratification adopts the bond, which stands in the place of a decree for payment, and is a legal contract, to be enforced at law. Every difficulty has, in this case, been thrown in the way of the recovery of the purchase money by the appellant, Benjamin Richardson; and by lapse of time, and otherwise, the subject is surrounded by some embarrassment. But he cannot expect to avail himself of a lapse of time, brought about by his own improper conduct) and there is no doubt, that under the peculiar circumstances of the case, the trustee, Stephen Jones, may by a bill properly framed, and against the proper parties, coerce the payment of the purchase money still due.
DECREE AFFIRMED, AND APPEAL FROM THE INTERLOCUTORY ORDER DISMISSED.