66 Tenn. 445 | Tenn. | 1874
delivered the opinion of the court.
The complainants are the administrator and heirs at law of Logan F. Henderson, and filed this bill against one Vm. McKeon, who is since deceased, and whose children and heirs at law are the present defendants.
The case is before us a second time, a re-hearing having been granted on the application of the complainants.
"We have carefully re-considered the case, giving to it the examination that its importance demands, and which is called for by the very able arguments of the learned counsel who have re-argued it before us. The object of the bill is to declare a trust in favor of the complainants, and against the defendants, in the city lot mentioned in the pleadings, and which was purchased by ¥m. McKeon, under the circumstances to be now presently adverted to.
On the 21st day of March, 1849, the said ¥m. McKeon, as administrator of Patrick McKeon, obtained a decree against said Lanigan, in the Common Law and Chancery Court of the city of Memphis, in the sum of $1,185.85.
Such proceedings were had in said Common Law and Chancery Court, that on the 9th day of February, 1853, they each obtained a decree against the said Lanigan and others, declaring the city lot in controversy subject to the satisfaction of the debts before-mentioned, and directing a sale thereof for that purpose. A sale was had, it seems, in May, 1853, but for some purpose, not material, perhaps, to be noticed, a re-sale was had in October of that year, when McKeon became the purchaser at the sum of $6,050, for which sum he executed his two notes to 'the Clerk and Commissioner, payable in equal instalments at six and twelve months, E. M. Yerger, Esq., the solicitor of Henderson, joining therein as a surety. Sometime after the maturity of these notes, and on 27th of December, 1855, a decree was passed in said cause, reciting the payment of the money by McKeon, and vesting the title in him as purchaser. At this time the decree in favor of Henderson amounted to the sum of $3,487.50, and that in favor of McKeon to
The satisfaction of this decree, and the consequent procurement of the legal title to this property by McKeon being the circumstances on which complainants rest their claim to a pro tanto equitable title to this property, and the counsel not being agreed as to how the facts were, we deem it proper to state our conclusions as to the nature of the transaction.
It is insisted here that McKeon and Yerger bought the lot on a joint speculation. We do not think this argument is warranted by the proof. Yerger states most positively that he did not know McKeon contemplated making the purchase until after it was made. Some time afterwards McKeon did propose to him to become interested in the purchase. This he says he declined to do, stating that he had no money to do so on his own account, and had no authority from his clients to do so on their behalf. The reason he gives for receipting to McKeon Henderson's judgment was that he was authorized by McKeon, verbally, to sell the lot, and raise out of it the amount of Henderson’s decree. It is true that Mr. Yerger says McKeon told him that he could have half of any amount that he could sell the lot for over and above what he (McKeon) had paid for it at the commissioner’s sale. But this promise, whatever it would amount to, was not acted
Now, this distinction is stated, with the reason upon which it rests, by a late writer, with admirable clearness: “The trustee can make no profit to himself by dealing with the trust fund, and if lie makes a purchase with it the cestui qui trust can elect to treat the property as a part of the trust property, and he is entitled to all the advantages of the speculation or
For this principle several cases are cited, and among others the case of Hawthorne v. Brown, 3 Sneed, 462. This case, decided by this court, is not distinguishable from the case in hand, except in the circumstance that the wrongful investment of the trust fund was made in that case without the knowledge or consent of the trustee, and we cannot see that that circumstance is material when it is remembered that the whole doctrine itself rests upon the principle that a court of equity requires the utmost good faith from trustees, and conclusively presumes that acts done by them in regard to the trust property are done for the benefit of the cestui gui trust. Of course it is not meant or intended that a person can knowingly deal with a trustee with impunity. If he purchase the trust property with a knowledge of the trust, he is bound to restore the property to the cestui qui trust; and furthermore, if he invest a trust fund a court of equity would fasten a lien upon the substituted prop
By applying these principles to the case in hand it results that Henderson’s personal representative is entitled to have satisfaction of his- judgment, and the ■accrued interest thereon, out of the city lot, and to have it sold for that purpose.
2. Upon the other question debated, viz: as to whether the decree of complainants should be credited with the payments made by McKeon to Yerger.
A careful re-consideration of this record has brought ■us to the conclusion that the decree of the Chancellor was right on this point. While we do not impute the least intentional bad faith to Mr. Yerger, we cannot sanction the negligence manifested by him in conducting his client’s business, much less can we sanction the conduct of McKeon in taking advantage of it.
Counsel for complainants have cited authorities to the effect that the death of a client operates a revocation of the attorney’s authority, without more. The books have not been furnished us, and we intimate-now no opinion upon that question.
McKeon professed that he was willing and anxious-to sell this property to pay the Henderson debt. He says, further, that the little controversy about the tax title probably prevented him from making the sale, and professes his willingness to have paid it at any time after this suit was settled. The further excuse that he gives for not paying is that Mr. Yerger himself informed him of Henderson’s death, and advised him that he could make payment to nobody until an administrator of Henderson was appointed in Tennessee.
Now, by complainant’s own showing he compromised the tax suit in December, 1857. Mr. Henderson died in March, 1858, and yet he- paid as much as $900 as late as the months of March and April, 1859, more than twelve months after he compromised the law suit about. the taxes, and twelve months, perhaps, after he-was informed of Henderson’s death, as he says Mr. Yerger. informed him of that event some time in 1858. It is admitted here that Henderson’s representative has never received one dollar of this money, and to de
A reference and report instanter may be had here if complainants desire it, and the final decree may be ■entered, and a sale of the property ordered to satisfy the same, unless payment is made into this court on •or before the - day of-next. The defendants will pay all the costs of the cause in this ■court and in the court below.