Court Opinion

ID: 3444406
Source: CourtListenerOpinion
Date Created: 2016-07-05 20:16:53.605409+00
Date Added: 2024-06-11T13:43:33.297777
License: Public Domain

In so far as the majority opinion holds that the Security Trust Company had the power under the will of Mrs. Mary E. Goodloe to sell the 17.53-acre tract, which, for convenience, I shall hereafter refer to as the 17-acre tract, I concur, but in so far as that opinion holds that the appellant, T.L. Warren, was entitled to specific performance of the contract set up in his intervening petition, I must dissent. In order that the basis of my dissent may be fully understood I must make a somewhat fuller statement of the facts than appears in the majority opinion, and in the elaboration of the facts I shall use only the testimony of the appellant, Warren, and that of Mr. Manning, president of the Security Trust Company.
The evidence shows that about three or four months prior to December 24, 1921, the date of the contract of which the appellant Warren seeks specific performance, he became very anxious to purchase this 17-acre tract. As he says, he first dickered with the Goodloes for this property and offered one of them $12,000 for the place. They told him to see Mr. Manning, which he did, and after some parleys with the latter, he offered Mr. Manning *Page 525 
$1,000 an acre for the place which would make the purchase price come to $17,530. I wish to emphasize that this offer was made within three or four months prior to the date of the contract herein sought to be enforced and the reason I do so is that I gather from the majority opinion that my brethren conclude that the record shows that there was a rapid fall in values in the realty market of Lexington between the time of these offers on the part of Warren and the date of the contract. As I read that record, there was no such tobogganing of prices in these four months as decreased the value of these 17 acres from the bid price of $17,530 in the fall to the $12,000 provided for its sale in the contract of December 24th. On the contrary, Mr. Manning himself on page 174 of the record practically admits that at the time of the contract in December the property was worth $1,000 an acre. I find at that place in the record that when asked why did he suggest the placing of the value of $15,000 to $17,000 for the 17-acre tract, Mr. Manning answered: "That was simply my estimate of the relative value." He used the word "relative," because he was also referring to the Loudoun tract. He was then asked:
    "Then the 17 acres was sold to Warren for too small a price? A. He got it at a considerably reduced price.
    "Q. By at least $5,0007 A. I could not state that.
    "Q. That is the difference between $12,000 and $17,000, isn't it? A. Yes.
    "Q. Didn't you suggest that $17,000 was a fair price? A. I estimated that it was. I had no information whatever in regard to it.
    "Q. But you do go on record now as saying that the sale of the 17 acres at $12,000 was too small a price? A. I think it was a bargain."
And further on he said:
    "The result is that the estate got $102,000, less $2,000, for those two tracts of land. The division of the consideration is in my judgment  unequal. I think the smaller tract of land is worth really more than it brought and the larger tract is worth really less than it brought." (Italics mine.)
Referring back now to the negotiations begun by Warren looking towards the purchase of the 17-acre *Page 526 
tract, when he made his offer of $1,000 per acre for this tract to Manning, I find that the latter told him in substance that they, the heirs and the trust company, did not wish to sell the 17-acre tract without also selling Loudoun, and he asked Warren to buy the Loudoun tract, too. Warren replied that he could not do so, because the proposition was too big for him. Warren then testifies:
    "He then told me to find a purchaser for the larger tract of land and that he would then sell me the smaller one. I told him I had not thought of that, but would see if it could be done. . . . I talked price with Mr. Manning for the whole proposition, and at that time he said, if I could get $115,000 for the whole property, he would recommend its acceptance, and I endeavored to do this, but did not succeed. We finally got to the point where Mr. Manning said, if we could get $102,000 for the property, he would recommend the sale of it, and would agree to pay me $2,000 for making the sale." (Italics mine.)
I pause here to state that the evidence amply justifies my statement that the reason the price of $102,000 was settled upon was that Mr. Warren and Mr. Manning did not think that Loudoun would bring over $85,000; that they thought it was worth somewhere between $80,000 and $85,000; and that neither one of them at the time thought that Loudoun would bring the $90,000 which it did. It will be noted that Mr. Warren was thus employed as an agent at least to sell the Loudoun place. There was no contract made at the time between him and Mr. Manning that the trust company would sell the two places for $102,000. It is perfectly clear that all Mr. Manning said was that he would recommend such a sale to the heirs. With the matter in this shape, Mr. Warren interested Judge Bailey in buying Loudoun, and, as he says on page 71 of the record, he also tried to interest Judge Bailey in buying the 17-acre tract but could not do so.
This shows to my mind that Mr. Warren understood that he was in the position of agent of the trust company, with the privilege, if he so desired, of buying the 17-acre tract as principal. Warren knew that the trust company did not dream that Loudoun would bring more than $85,000. Although Warren may in the best of faith have thought otherwise, in ray judgment it was his legal duty as an agent, when he secured an offer of $90,000 for Loudoun, *Page 527 
to disclose this to the trust company. However, he did not do so, but reported to the trust company that he had a proposition to buy the two tracts for $102,000. The trust company, although it may have had the right under the will to sell the places without the concurrence of the heirs, did not undertake to do so, but did exactly what it told Warren it would do; that is, it recommended the sale to the heirs. This is the best that Warren at that time had a right to expect. Manning had not agreed to sell the two places for $102,000, but only to recommend such a sale to the heirs, and Warren had acted only upon that promise. The trust company then, in ignorance that Warren had an offer of $90,000 for Loudoun, did recommend to the heirs the sale of the two tracts at $102,000. These heirs, in ignorance of the fact that Loudoun was bringing at least $5,000 more than any one had ever thought it would bring, did agree to make the proposed sale. This agreement, however, did not constitute any contract of sale. Before any contract was entered into by the trust company and Warren, and/or Bailey, as I read the record (Record, p. 172 et seq.), Mr. Warren disclosed to the trust company the fact that he had an offer from Judge Bailey to buy Loudoun for $90,000. If no contract had been entered into, there was no plighted word to be broken. The trust company ought not to have supposed that all the parties were satisfied when it knew the consent of the heirs had been given in ignorance that Loudoun was bringing any such price as $90,000. When this information about the price to be given for Loudoun was imparted to the trust company, what was then its duty? It at once suggests itself to my mind that the trust company should have reported this to the heirs, since their consent to the sale had been given, through no fault of the trust company, in ignorance of what the situation really was. This was not done. Probably in law this makes no difference, since the trust company did have the right to make the sale, whether the heirs consented or not.
But, if we are relegated to the strict legal rights and duties of the parties, then let us see what, in my judgment, they were. At this time the trust company was under no legal duty to execute the contract herein sought to be enforced. Nor do I think it was under a moral duty, since it was understood all around that the trust company would not make the sale, unless the heirs concurred and their concurrence had been given when they *Page 528 
did not know all the facts. Before a moral duty could fasten upon the trust company, the concurrence of the heirs would have to be given with full knowledge of all the facts on their part. The trust company had an offer for $90,000 for the Loudoun tract which it could and did accept. Under elementary law it was the legal duty of the trust company as trustee to do for the beneficiaries the very best it could in the exercise of ordinary care. 26 Rawle C. L. 1280 et seq. To execute the contract herein sued on would be to let Warren get a piece of property worth $17,530 for $12,000. The trust company was under no legal obligation to do this. At the best, Warren according to his own testimony was entitled for his services in the sale of Loudoun to the usual commission charged by real estate agents of 3 per cent., which would be $2,700, instead of the $2,000 verbally agreed to be paid him. In my judgment, under the law regulating the duties of trustees to their cestuis, it was the duty of the trust company to accept Judge Bailey's offer for the Loudoun tract, perhaps to pay Warren a full real estate commission for selling the Loudoun tract, and to reject his offer to buy the 17-acre tract for the $12,000.
Under the familiar rule governing specific performance, which requires it to be refused where inequitable, specific performance here should have been refused. Warren knew all the facts at the time he executed the contract. So did the trust company. Warren at the very least was charged with notice of the trustee's duties under the law. He could not in equity insist on any contract that would impinge upon those duties. And yet that is what he is asking in this suit. His good faith cannot prevail against the legal obligations of the trustee. That the trust company was not certain that it had proceeded upon the correct course is manifested by this suit, which puts the responsibility of validating this transaction upon the court. The trust company is to be commended for refusing to go further without an order of court. That order, under the facts as I understand them, should never be given. In my judgment, the lower court correctly refused to adjudge the specific performance prayed, and its judgment should be affirmed.
I am authorized to state that Judge LOGAN concurs in these views and this dissent. *Page 529