116 Mass. 461 | Mass. | 1875
The defendant received the conveyance of the land from the plaintiff without payment of the consideration, and for the purpose of selling it for her and those interested with her. He therefore took it in trust. This trust was proved by the bond which was afterwards drawn up by the defendant and deposited in the hands of Pollard, reciting the character and terms of the transaction. The trust having been executed by a sale and conveyance of the land, this action may be maintained for the money so received by the defendant. Jackson v. Stevens, 108 Mass. 94.
The evidence offered in chief by the plaintiff, that the defendant told her when he took the deed that he would sell the estate for her and return the proceeds to her to the extent of her inter*
The defendant contended, and offered evidence to prove, that after he had bargained for the sale of the estate for the sum of $1200, but before the deeds had been passed and before he had obtained leave to sell the interest of one of the parties, who was a minor, he purchased of the plaintiff all her interest in the estate, gave his note therefor, and she thereupon assigned for his benefit to one Benjamin Cowell all her interest in the bond deposited with Pollard.
The presiding judge ruled that the contract by which the defendant took the assignment of the bond to Benjamin Cowell was one which, from his relation to the plaintiff, he could not make, and the evidence on that point was not to be considered by the jury. This ruling, was undoubtedly based upon the well settled and familiar law, that a person holding the property of another as trustee, or in any other fiduciary capacity, cannot purchase the property himself. He cannot act in the double capacity of seller and buyer, and the law does not permit the two characters to be united in one person. See Dyer v. Shurtleff, 112 Mass.
This rule applies to all dealings, direct or indirect, with himself in regard to the property; but it does not necessarily apply to all dealings with the person for whom he holds it, and towards whom he bears the relation of trustee. He may purchase the property of such person; and if the whole transaction, and the circumstances under which it took place were fair and open, and no advantage was taken by him of the cestui que trust, by concealment, misrepresentation or omitting to state any important fact, and no undue influence was exercised, and the cestui que trust understood what she was doing and the effect of it, such a contract will not be set aside because of the relations of the parties. Farnam v. Brooks, 9 Pick. 212, 231. Perry on Trusts, § 195, and cases cited. Downes v. Grazebrook, 3 Mer. 200. Ex parte Lacey, 6 Ves. 625. Coles v. Trecothick, 9 Ves. 234. We are of opinion, therefore, that the evidence offered was competent. The case was, very properly, tried by the parties and ruled upon by the court, as if it involved the equitable considerations, and called for the application of the rules of law, which determine the rights and powers of trustee and cestui que trust, when the trustee be-
The second prayer for instructions was properly refused. It was immaterial whether the bond was given at the time of the deed, as it was only evidence of the character of the previous transaction.
The ruling asked for in the third prayer was properly refused. The instruction given, that if the defendant had discounted the mortgage note and received the proceeds he would be accountable to the plaintiff, although the mortgage note was not collected, was correct and adapted to the facts as presented by the evidence. New trial ordered.