Buckles v. Lafferty's legatees
Buckles v. Lafferty's legatees
Opinion of the Court
delivered the following as the opinion of the court:
The court is of opinion that the evidence in this case is insufficient to fasten on the appellant the charge of actual fraud or covin in the purchase of the land that belonged to the estate of Thomas Lafferty. The appellant, however, was confessedly the agent of the administratrix with the will annexed of Lafferty, on whom the power of making the sale was conferred by the will;
The court is further of opinion that the plaintiffs, the legatees of Lafferty, were interested in the sale of the land and the proceeds thereof, to the extent only that those proceeds were necessary to pay their legacies; and if those proceeds, blended with the other funds dedicated by the will to the payment of those legacies, were adequate to discharge them, the plaintiffs, having under the will no interest in the surplus, would have no interest, and consequently no title, to question the sale. The allegation of the bill that part only of those legacies had been paid not being controverted by the answer, the court was justified in proceeding on the assumption that part of the legacies remained unpaid ; but as that gave to the legatees but a limited interest in cancelling the purchase of the appellant or having a resale, the extent of that interest ought by a proper account to have been ascertained, to the end that the purchaser, if his purchase was not effectually questioned by any other than the plaintiff legatees, might have the opportunity, if he thought proper to use it, of
Note by the reporter.—The leading cases upon the principal question in this are Whelpdale v. Cookson, 1 Ves. sen. 9. 5 Ves. jun. 683. Fox v. Mackreth and others, 2 Brown’s C. C. 400. 2 Cox 320. 4 Brown’s Par. Cas. 258. (Tomlin’s edi.) and The York Buildings Company v. Mackenzie, 8 Brown’s Par. Cas. 42. (same edi.) The two last decisions were in the house of lords, where the subject underwent the ablest discussion; a discussion in which light was obtained from the writers upon the civil as well as from the judges of the common law, and the doctrine traced back to its original source. “ It is,” said the counsel for the York buildings company, (p. 63, 4.) “ the constitution of nature itself, and is as old as the formation of society, and of course it must be universal. It proceeds from nature, and is silently received, recognized and made effectual wherever any well regulated system of civil jurisprudence is known. The ground on which the disability or disqualification rests is no other than that principle which dictates that a person cannot be both judge and party. No man can serve two masters. He that is entrusted with the interest of others cannot be allowed to make the business an object of interest to himself, because, from the frailty of nature, one who has the power will be too readily seized with the inclination to use the opportunity for serving his own interest at the expense of those for whom he is entrusted. The danger of temptation, from the facility and advantages for doing wrong which a particular situation affords, does, out of the mere necessity of the case, work a disqualification; nothing less than incapacity being able to shut the door against temptation where the danger is imminent and the security against discovery great, as it must be where the difficulty of prevention or remedy is inherent to the very situation which creates the danger. The wise policy of the law has therefore put the sting of a disability into the temptation, as a defensive weapon against the strength of the danger which lies in the situation.” The doctrine is laid down in like general terms by the chancellor of New York in two recent cases, Van Epps v. Van Epps, 9 Paige 241. and Torrey v. The Bank of Orleans, 9 Paige 663. He says in the last, “It is a settled principle of equity that no person who is placed in a situation of trust or confidence in reference to the subject of the sale, can
The decisions of lord Eldon strongly support the rule. In Ex parte James, 8 Ves. 345. he said, “This doctrine as to purchases by trustees, assignees, and persons having a confidential character, rests much more upon general principle than upon the circumstances of any individual case. It rests upon this, that the purchase is not permitted in any case, however honest the circumstances ; the general interests of justice requiring it to be destroyed in every instance, as no court is equal to the examination and ascertainment of the truth in much the greater number of cases.” On a subsequent day he said, (p. 348.) “ My opinion in this case is purely upon the principle.”—“ The principle is, that as the trustee is bound by his duty to acquire all the knowledge possible, to enable him to sell to the utmost advantage for the cestui que trust, the question what knowledge he has obtained, and whether he has given the benefit of that knowledge to the cestui que trust which he always acquires at the expense of the cestui que trust, no court can discuss with competent sufficiency or safety to the parties.” “ The courts have said, it is better for the general interests of justice that in some cases a loss should be sustained by a cestui que trust, than a rule should be established which would occasion loss in much more numerous cases.”
Lord Eldon must be understood here as alluding to a case in which the confidential relation still continues. For in Ex parte Lacey, 6 Ves. 626. he had said, the rule does not preclude the trustee from bargaining that he is no longer to act as such. “ The cestui que trusts may,” (he observed) “by anew contract, dismiss him from that character: but even then, that transaction by which they dismiss him must, according to the rules of this court, be watched with infinite and most guarded jealousy; and for this reason, that the law supposes him to have acquired all the knowledge a trustee may acquire; which may be very useful to him, but the communication of which to the cestui que trusts the court can never be sure he has made, when entering into the new contract by which he is discharged.” Again, in Ex parte James, 8 Ves. 353. adverting to Fox v. Mackreth, he states the question properly to have been, “ whether a person who had a confidential situation previously to the purchase, had at the time of the pur
These doctrines have been recognized in many other cases in England: Ex parte Bennett, 10 Ves. 393. Randall v. Errington, 10 Ves. 427. Morse v. Royal, 12 Ves. 373. Sanderson v. Walker, 13 Ves. 601. Downes v. Glazebrook, 3 Meriv. 207. Woodhouse v. Meredith, 1 Jac. & Walk. 222. and Rothschild v. Brookman, 5 Bligh N. S. 190. And they have also been approved and sanctioned by many of the courts in this country: in New York by chancellor Kent, as well as by the present chancellor, Davoue v. Fanning, 2 Johns. Ch. Rep. 252. Hawley v. Cramer, 4 Cowen 734.; by chancellor Desaussure of South Carolina in Butler &c. v. Haskell, 4 Desauss. 705.; by chief justice Marshall in Teakle v. Bailey, 2 Brock. 52.; by the supreme court of the United States in Wormley v. Wormley, 8 Wheat. 421.; and by this court in Carter &c. v. Harris, 4 Rand. 204. and Segar v. Edwards and wife, 11 Leigh 213. as well as in the present case.
In the present case, it could not be said that the relation of principal and agent had been changed; that the confidence in the agent had been withdrawn. And as strict a rule was applicable as that laid down by lord Eldon in Gibson v. Jeyes, 6 Ves. 271. He there said, “An attorney buying from his client can never support it, unless he can prove that his diligence to do the best for the vendor has been as great as if he was only an attorney dealing for that vendor with a stranger. That must be the rule. If it appears that in that bargain he has got an advantage by his diligence being surprised, (putting fraud and incapacity out of the question) which advantage, with due diligence, he would have prevented another person from getting, a contract under such circumstances shall not stand.”—“From the general danger, the court must hold that if the attorney does mix himself with the character of vendor, he must shew to demonstration (for that must not be left in doubt) that no industry he was bound to exert would have got a better bargain.” And the court in the present case might properly conclude, as lord Eldon did in that, “ Therefore, without imputing fraud, a general principle of public policy makes it impossible that this bargain can stand.”
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