Court Opinion

ID: 9447086
Source: CourtListenerOpinion
Date Created: 2023-08-03 22:24:48.11076+00
Date Added: 2024-06-11T17:30:53.368468
License: Public Domain

BAZELON, Circuit Judge
(concurring) .
While I concur in the court’s opinion which holds the sale procedures invalid, I think another — and the principal— ground urged by appellant deserves mention since it raises an important question of fiduciary responsibility upon which the case law in this jurisdiction is in apparent conflict. This ground is that the close relationships among the purchaser, auctioneer and the note holder, and between each of them and the trustees, rendered the sale voidable. Appellant relies upon the several cases of this court in which sales under a deed of trust have been enjoined or set aside because the trustee was also the note holder, or was intimately related to him by kinship or economic ties.1 The principle of these cases is that such a conflict of interest reduces the trustee’s incentive to obtain the highest price for the benefit of junior interests.
The appellees assert, however, that these cases are inconsistent with an ear-*852Her decision of the Supreme Court in 1879 which upheld a sale under circumstances similar to those here presented.2 In addition, they rely upon- other cases in this court in support of the proposition that a sale under a deed of trust need not be enjoined or set aside by reason of a conflict of interest unless the trustee’s dual capacity is concealed from the borrower.3
It is suggested that the disclosure of trustee’s dual capacity is not meaningful if, in reality, the borrower must accept him in order to obtain the loan. But re-examination of this question of fiduciary responsibility in light of more recent expressions of the Supreme Court4 is unnecessary in this case since we are able to rest our decision upon another issue.

. Spruill v. Ballard, 1932, 61 App.D.C. 112, 58 F.2d 517; Holman v. Ryou, 1932, 61 App.D.C. 10, 56 F.2d 307; Kent v. Livingstone, 1936, 65 App.D.C. 291, 83 F.2d 316; Earll v. Picken, 1940, 72 App. D.C. 91, 113 F.2d 150.

. Clark v. Trust Co., 1879, 100 U.S. 149, 25 L.Ed. 573.

. Realty Investment & Securities Corp. v. H. L. Rust Co., 1939, 71 App.D.C. 213, 109 F.2d 456; Alpar v. Perpetual Bldg. Ass’n, 1958, 104 U.S.App.D.C. 341, 262 F.2d 230, certiorari denied 1959, 360 U.S. 934, 79 S.Ct. 1458, 3 L.Ed.2d 1547; but see Kent v. Livingstone, supra, setting aside the sale under a deed of trust despite full disclosure of the trustee’s conflict of interest.

. See, for example, Jackson v. Smith, 1921, 254 U.S. 586, 41 S.Ct. 200, 65 L.Ed. 418, a later decision of the Supreme Court requiring far stricter standards in this area of the law than Clark v. Trust Co., supra. See also Meinhard v. Salmon, 1928, 249 N.Y. 458, 464, 164 N.E. 545, 546, 62 A.L.R. 1.