Feller v. Mitchell

¶1This is an action brought by plaintiffs, as vendees, to recover back the amount paid by them as a deposit and also to recover the amount of counsel fees and disbursements, being the expenses of examining the title. By stipulation, the only question submitted to the court arises in connection with an infant’s proceeding. • In 1889, Katharine P. Williams, the mother of Annie P. Nicholson, an infant, who had an interest in the premises as petitioner, instituted proceedings in the Court of Common Pleas for leave to sell the infant’s share of the property. One Charles E. Clarke was appointed special guardian, and thereafter proceedings were had which resulted in an order authorizing the sale of the infant’s interest to Percy E. Clarke. Clarke, the guardian, and Clarke, the purchaser, as appears from an examination of the proceedings, were both residents of the city of Washington. The deed from the special guardian to Percy E. Clarke is dated on July 11, 1889, and on the 30th day of July, 1889, Percy E. Clarke conveyed the same premises to Katharine P. Williams, the mother of the infant and the petitioner in the infant’s proceedings. Section 50 of the Domestic Delations Law provides that the mother, if there be no father, shall be the guardian in socage, and section 53 fixes the powers and duties of such guardian. In Davoue v. Fanning, 2 Johns. Ch. 252, it was held that: “If a trustee or person acting for others sells the trust estate and becomes himself interested in the purchase, the cestui que trusts are entitled, as, of course, to have the purchase set aside and the property re-exposed to sale under the direction of the court. And it malíes no difference in the application of the rule that a sale was at public auction bona fide, and for a fair price, and that the executor did not purchase for himself, but a third person, by previous arrangement, became the purchaser, to hold in trust for the separate use and benefit of the wife of the executor, who was one of the cestui que trusts and had an interest in the land under the will of the testator.” See also People v. Open Board of Brokers, 92 N. Y. 98. In Terwilliger v. Brown, 44 N. Y. 240, Mr. Justice Earl says: “The law exacts scrupulous good faith on the part of him who acts as *488trustee for another, or holds any other fiduciary relation to another. A trustee is not permitted to purchase the trust property, or be directly or indirectly interested in such purchase. He is not permitted to make the purchase as agent for another, or through an agent for himself. And it matters not if he pays all the property is worth, nor if the sale is advantageous to the cestui que trust. It is a matter of course for courts of equity to set the sale aside upon the application of the cestui que trust. The object of the rule is to afford the cestui que trust the most ample protection against fraud and injustice, and to remove out of the way of the trustee all inducements and temptations to speculate upon the trust property, or to manage and manipulate the same for his own benefit.” It was, therefore, not incumbent upon the plaintiffs to allege fraud in the conveyance of the infant’s interest to her mother. The examination of the infant’s proceedings was sufficient to cast suspicion upon and create a reasonable doubt as to the good faith of the proceedings and thereby create a doubt as to the market value of the title. Judgment for the plaintiffs, with costs. Submit findings.