| Iowa | Jan 20, 1891
I. The defendant, Mary Fuson, being the owner of certain property, executed a mortgage to plaintiff and another to secure certain liabilities to them. A prior mortgage had been executed on the property to secure money borrowed of another party. The defendants conveyed the property to plaintiff and his associate creditor, under an agreement that these creditors should hold control of, and rent it until a purchaser could be found, when it should be sold, and the money realized should be applied to the payment of liens on the property, and the indebtedness and liabilities to plaintiff and his associates. The property was conveyed, the purchaser undertaking to pay the prior mortgage thereon; but, failing to do this, plaintiff acquired the prior mortgage executed by defendants, and brought this suit to ’foreclose it, joining with defendants, as a party to the suit, the purchaser from plaintiff. In defense to the action, so far as it seeks to hold defendants liable, and as the ground of a cross bill, they allege that plaintiff has failed to account for the money received by him from the property, and that the sum of five hundred dollars is unaccounted for, and due defendant, after payment of all liens and claims provided for by the agreement between the parties. The plaintiff denies the allegations of the answer, and alleges that he and defendant had a settlement of the transaction, and plaintiff paid the defendant, Mary Fuson, a
II. In our opinion, the evidence shows that plaintiff failed to expend, under the agreement, an amount equal to the purchase price of the property: He surely fails to account for the amount he received for the property. We think the sum found by the district court, one hundred and fffty-seven dollars, if not more, remains in plaintiff’s hands unaccounted for and unex-pended ; and that, under the agreement upon which the property was conveyed to him, he is bound to pay that sum to plaintiff.
III. In our opinion, the receipt or release ought not to estop defendants to require an accounting of plaintiff. He held the land as a trustee,, and was required by the law to deal in the utmost good faith with defendants. He could not exercise his superior' knowledge of the condition of the trust property, and the amount of debts against it, and conceal facts known to him, thereby inducing defendant to execute the release. We are not prepared to say that a trustee in uberrima fides may not settle with his cestui que trust, and accept binding acquittances and receipts discharging him from all liability on account of the trust estate. But, to make such a transaction binding, it must be based upon an accounting and a disclosure by the trustee of the condition of the trust. There must be no concealment of matters connected therewith, and the cestui que trust must not ignorantly assent to the settlement when he would not have done so had the trustee disclosed all the facts to him. In the case before us there was no accounting, no disclosure of the condition of the fund. Indeed, the property had not yet been. sold. The evidence shows that defendant, when she executed the contract, relied upon the