74 N.J. Eq. 629 | New York Court of Chancery | 1908
The law has placed rather close restrictions upon the dealings between two parties where one stands in a fiduciary relation: to the other. In the case of trustee and cestui que trust the restriction amounts to a prohibition. In the case of other fiduciary relationships the burden is cast upon the purchaser of showing that the bargain is, speaking generally, as good as any that could have been obtained by due diligence from any other purchaser. This rule applies to the relation of solicitor and client. Where a solicitor purchases from his client the property which is the subject-matter of the employment, the solicitor must show, in case the transaction is attacked, not only that the bargain is'.as good as could have been obtained by due diligence from other purchasers, but also that he gave his client all that reasonable advice against himself which his office of solicitor would have made it his duty to have given the client against, a third person, or, in other words, he must show that the client was duly informed, duly advised, and that the transaction was fair. In the absence of these requisites the court will set aside the purchase if completed, or refuse specific performance of the contract. In Edwards v. Meyrick, 2 Hare 60, Sir James Wigram, V. C., states the law to be that a solicitor is not under an actual incapacity to purchase from the client. “There is not in that case the positive incapacity which exists between a trustee and his cestui que trust, but the rule the court imposes is that inasmuch as the parties stand in a relation which gives or may give a solicitor an advantage over the client, the onus lies on the solicitor to prove that the transaction was fair.” Montesqueiu v. Sandys, 18 Ves. 302; Cane v. Allen, 2 Dow 289. The rule is expressed by Lord Eldon * * * to be that if the attorney will mix with the character oif attorney that of vendor'he shall, if the propriety of the transaction comes in question, manifest that he has given his client all that reason
It was held by the house of lords in Lewis v. Hillman, 3 H. L. Cas. 607, that in a case where an attorney was able to convince the court that- he had a right to- purchase from his client he must purchase openly, and if he purchased in the name of a third person as his, the attorney’s, trustee or agent, without disclosing the fact, the purchase was void. This case is mentioned for the reason that it appears that in the case in hand the defendant took title not in his own name, but in the name of his clerk, so that under the authority last cited the deed would be void if no disclosure of the name of the true purchaser was made. The defendant testifies that he made such a disclosure to the complainant at the time the deed was executed, and his statement in relation thereto is not denied by her. The point of the case of Lewis v. Hillman was that there the solicitors put forward their clerk as the real purchaser, when in fact the solicitor himself advanced the money and was the responsible vendee. Here no such fact exists.
The cases concerning this delicate relation between attorney and client are harmonious and of universal application. They have been adopted by the court of errors and appeals of this
At the interview which resulted in the execution of the deed by the complainant-to- the defendant, the only subject that was-pointedly discussed was the question whether the railway company had offered more than $100 for the land in question. I have been unable to find any" fact in the case which was kept from the complainant. When she executed the deed she and hex-son, who was her adviser, knew as xixuch about the situation, location, value, salability and prospects of the property as did the defendant. It was within sight of her home, and there were-annually more or less transactions to bring it to her attention. A perusal of her own testimony shows that she had perfect knowledge of the sitxxatioix. It is significant that the complainant aixd her son tell the same story practically], as does the defendant, about the interview of Januax-y 3d, 1906, when the-, deed was executed, and likewise significant that after the proposition had been made by the defendant to purchase the land the-complainant axxd her son adjourned to another room to confer about the matter. I therefore think that the defendaxxt had put himself in such a. situation! as to qualify him to become a purchaser of the land ixi question, provided the price was fair.
There will therefore be a decree for the defendant.