Harrison v. Winston
Harrison v. Winston
Opinion of the Court
— On the 24th of May, 1865, C. K.. Winston made a deed of assignment of certain valuable-lands to H. H. Harrison in trust for the benefit of creditors. On the 15th of June, 1865, Harrison, as trustee, filed his; bill in this court against Winston and the creditors secured in the deed, for a construction of the deed, and the execution of the trust under the orders of this court. Such proceedings were had in the cause that a large part of the land was sold, and, among other parcels, one lot was sold to said Harrison, and another to John D. Winston, but these purchasers failed to comply with the terms of sale. At the last term of this court these lots, and several other lots remaining undisposed of, were ordered to be sold.
The jurisdiction of the court being thus conceded, and any objection to the form of proceeding adopted being waived, the questions between the parties may be disposed of on their merits.
In the argument made on behalf of the petitioner it was conceded, for the purposes of this case, that the tax sales were in all respects valid, the legal proceedings to recover possession under the title thus acquired free from error, and the possession obtained regular, if possession were in fact had, which was contested as a matter of fact. The position assumed was that, with the concessions granted as above, the defendants Brien and Woodward would hold the title and possession thus acquired, under the circumstances, in trust for the petitioner and the other cestuis que trust under C. K. Winston’s deed of assignment. This position is sought to be rested upon the ground that Woodward, by
In the answer filed, Woodward admits he was one of the creditors secured by the deed of C. K. Winston, and filed an answer to the bill of Harrison, trustee; and Brien admits that he was Woodward’s solicitor in that suit. In his answer to Harrison’s bill, Woodward states: “ He claims the benefit of whatever right or lien was created in his favor by said deed of trust. He is willing that a decree be rendered for the sale of said lands, and for the proceeds to be paid to the creditors of C. K. Winston, in the order o^ priority in which they stand in reference to said lands, and he submits to such sale, reserving all his legal and equitable rights.” This is a plain and unequivocal acceptance of the benefits of the deed, and of the suit, and binds the defendant Woodward to whatever consequences follow the relation to the property and the co-beneficiaries thus produced. The simple question then is, so far as he is concerned, whether one cestui que trust, who is a party to a suit for the execution of the trust, and consents to its execution, can acquire a title to the property under a tax sale free from the trust.
The very statement of the question almost demonstrates that there can be but one answer. Lord Hardwicke said, long ago', in the great case of The Earl of Chesterfield v. Janssen, 1 Ves. 125, 156: “ Particular persons in contracts shall not only transact hona fide between themselves, but shall not transact mala fide in respect of other persons, who stand in such a relation to either as to be affected by the contract or the consequences of it.” Accordingly, it has become, under the intimations of that case, one of the best established principles of equity, that a creditor cannot accept a benefit
The same rule has been repeatedly applied in the very matter of tax titles in similar or analogous cases. It has been held that a mortgagee cannot acquire any title at a tax sale, whereby the mortgagor may become barred of his equity of redemption, whether he is in or out of possession. Williams v. Townsend, 31 N. Y. 411; Sturdevant v. Mather, 20 Wis. 576; Brown v. Simmons, 44 N. H. 475. Nor can a purchaser at a foreclosure sale under a first mortgage, the second mortgagee not having been made a party to the proceedings, cut off the right of such second mortgagee to redeem by purchasing a tax title. Anson v. Anson, 20 Iowa, 55. Nor can the grantor of a deed of trust, nor a cestui que trust, acquire a title adverse to the trust by the purchase of a tax title. Phillips v. Zerbe Run Imp. Co., 25 Penn. St. 56.
It is clear, therefore, upon principle and authority, that the defendant Woodward could acquire no adverse title by virtue of his purchases at the tax sales, but that whatever title he might thus acquire would enure to the benefit of his co-beneficiaries under the trust deed. These beneficiaries, would, of course, be liable to contribute to the common burden of the taxes thus paid, and Woodward would have a lien on the property for his indemnity to this extent. The actions of ejectment were, however, a violation of good faith on his part, and the expenses thus incurred must be borne exclusively by him.
As to the defendant Brien, the general rule is that, where a person occupying a fiduciary relation joins with others in a purchase, the sale may be avoided. Mitchum v. Mitchum, 3 Dana, 260; Paul v. Squibb, 12 Penn. St. 296. The trust which attaches to the title acquired by Woodward would, in this view, attach to the title of both Brien and Woodward. But the relation of Brien as solicitor in the
The petitioners are entitled to a decree perpetually enjoining the suits at law, and declaring that any title acquired by the defendants at the tax sale shall enure to the benefit of the trust, subject to a lien in favor of the defendants for the taxes paid, with interest, and it will be referred to the master to ascertain the amount. The property will be sold under the decree heretofore made, and the debt due to the defendants for these taxes paid out of the first proceeds of sale. The defendants will pay the costs of the petition and the proceedings under it, and of the suits at law. If the defendants have collected, or shall receive, any rents of the land under their tax purchases, they will be held liable for the same, and the reference, if desired, may include this matter.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.