Court Opinion

ID: 6963807
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:50:13.291862+00
Date Added: 2024-06-11T16:08:31.607802
License: Public Domain

Mr. Justice Scott delivered the opinion of the Court: The bill in this case was brought by the minor heirs of William Murphy, deceased, and was to set aside an executor’s sale of real estate which had belonged to the decedent at the time of his death. The sale was made under an order of court, to pay debts of the estate. The purchaser at the sale was William B. Borders, who is a son of the executor, James L. Borders, who made the sale. . The amended hill also asks for an account of rents received by such purchaser, in favor of complainants. On the final hearing, the court found, from the evidence, that all of the allegations of the amended bill were true, and also found the amount of rents that had been received by defendant William B. Borders since his alleged purchase, and rendered a decree setting aside the executor’s sale, and directing defendant William B. Borders to pay the rents by him received, to complainants. Although James L. Borders, the executor, and William B. Borders, the purchaser, were made defendants, and a decree passed against both of them, only the latter has assigned error on the record. The sale made by the executor is assailed on the ground the relations between the executor and purchaser,—being father and son,—were such, the latter could not rightfully become a purchaser, and on the further ground, the purchase was in fact made in the interest of the executor making the sale. Conceding the facts to he as the court below, by its decree, found them to be, the executor’s sale was very properly set aside. The lands described in the bill consisted of two tracts, containing in all about one hundred and sixty acres, and at the sale the same were struck off to the purchaser for the sum of one dollar, subject to a mortgage thereon that had been made by decedent, in his lifetime, to the executor and his former partner, John C. Boyle, but at the time of the sale the mortgage was held and controlled by the executor. Prior to the sale the lands had been occupied by a tenant, from whom rents had become, or were about to become, due. These rents the purchaser claimed the right to, and did, collect. There is evidence that shows that at the time he bid in the lands, the purchaser was a partner with his father, the executor, in the banking business. The purchaser was not present at the sale, but the executor was. A proposition in writing from William R. Borders was submitted, which the crier of the sale understood was a bid of one dollar for the whole lands, subject- to the Borders & Boyle mortgage, and after some considerable discussion in respect to the manner of making the sale, the lands were struck off to defendant, Borders, on the terms mentioned. What the discussion had reference to does not distinctly appear, and perhaps it is not important. It is proved the closest personal and business relations existed between the father and the son, both at the time of the sale and before. After the sale, the son collected the rents from the occupying tenant, and he admits, in his testimony, he may have said, “Our object in getting the rents was to save ourselves,—in fact, the main object I had in getting the rents was to save ourselves on the Borders & Boyle mortgage to the extent of the rents.” This admission is not denied by the executor. These and other facts fully proved, lead to the belief the sale was in the interest of the executor himself,—certainly to the extent the rents that might be received would reduce the mortgage indebtedness held by him; and conceding such to be the fact, the case comes clearly within the well settled rule, that a trustee can not rightfully become a purchaser at his own sale, and hold to his own use. It matters not whether the sale is made by himself, or under a decree of court. The rule applies alike in both eases. It may be, and is, doubtless, true, there was no fraud, in fact, intended in this transaction, either on the part of the purchaser or on the part of the executor. It is not necessary to hold there was any fraud in fact, to warrant the relief granted to complainants. The general rule ■on this subject is, when a trustee of any description, or a person acting as agent for others, sells a trust estate, and becomes himself interested, either directly or indirectly, in the purchase, the cestui que trust is entitled, as a matter of course, at his election, to have the sale affirmed or set aside. That principle is conclusive of the case being considered. Here, it is admitted by his co-defendant, the executor was interested in his own sale, to the extent the rents might be received,—and which proved to be quite considerable,—would operate as a reduction ■of the mortgage indebtedness held and controlled by him. That the law forbids, and the sale was properly set aside. It is said, that part of the decree which directs William B. Borders to pay the rents by him received, to complainants, is erroneous, for the reason, under the will the executor was authorized to collect the rents. It is admitted the will authorized the executor to collect all rents, and pay the same to the heirs, or to their guardian. It might have been, and no doubt would have been, correct, had the decree provided the rents ■should be paid to the executor; but it is a matter of no concern of the party assigning errors on this record, to whom he pays the rents by him collected. The error, if any exists, does no -one any harm, for the will provides, the rents, when received by the executor, should be paid to the hens or their guardian. The result is precisely the same, and the money reaches the ■cestuis que trust more directly than it otherwise would. The decree of the circuit court will be affirmed. Decree affirmed.