Onson v. Cown

Cole, J. We are entirely satisfied from the evidence in the case, that Eisher was induced to sell the school land certificate to Larson by the representations of the latter, that he was buying it for the benefit of the defendant. The testimony of Eisher is very distinct upon this point, and although contradicted by Larson, still we are satisfied that he gives the correct version of the matter. And he says that when Larson first applied to him to buy the certificate, 334 be told bim that he could not sell it till be bad seen Cown, and given bim the first chance to buy it; that he always gave the original purchaser the refusal; that Larson then said be wanted to get the certificate for Cown, and that, in order to secure the debt due the estate for which he was administrator, he proposed buying the certificate himself, and letting Cown -have it when he paid the Tisman debt, and what he, Larson, had paid for the certificate and his expenses. And Eisher further states, that he concluded to sell the certificate to Larson for $75.00, because he understood it was for Cown’s benefit; and that he would not have let Larson have it if he had not represented that he wanted it for Cown, and that Coion knew of his coming for it; or if he had supposed the purchase was for the benefit of Larson, or for his wife’s use. This is not the precise language of Eisher, but it is the substance of his testimony in regard to the representations made by Larson at the time he applied to him to purchase the certificate. Assuming, then, the facts to be as detailed by Eisher: that Larson purchased the certificate by representing that he wanted it for Cown; that Eisher was really induced by these representations to sell it to him, supposing it was for the benefit of Cown, and would not have sold it to Larson if he had supposed Larson was buying it for himself or for his wife; and the question arises, Can Cown avail himself of the purchase made under such circumstances? It is contended on behalf of the defendant, that although he had not employed Larson to buy the certificate for him, had no agreement with Eisher that he should have it, and advanced nothing towards its purchase, yet, as Larson procured the certificate by representing that it was bought for his benefit, and that he was acting in the matter as the agent of the defendant, and as Eisher intended that the defendant should have the chance to buy the certificate before he sold it to any one else, and 335 would not have sold it to Larson except for the representations he made at the time of the purchase, it would be a fraud to permit Larson to repudiate the character in which he assumed to act, and set up a title inconsistent with his statements made to Eisher. And it is said that a court of equity will treat Larson, and all purchasing from him with full notice of the defendant’s rights, as a trustee of the defendant, and as holding the title for his benefit. It appears to us that this is a correct view of the matter, and that it would be sanctioning a positive fraud, not to give the defendant the benefit of‘the purchase made by Larson of Eisher. Eor Eisher says, in .the most unqualified manner, that he intended to give the defendant the first chance to buy the certificate, because he had originally owned the land, and that he would not have sold the certificate to Larson but for the representations the latter made that he was buying it for the benefit of the defendant. By these representations, Eisher was induced to sell him the certificate — an act injurious to the defendant, unless equity will treat the purchaser as trustee of the injured party. It seems to us the case is analogous to that class of cases mentioned by Mr. Justice Story in sec. 256, Eq. Jur., where courts of equity grant relief for actual fraud. Says the author: “ In the next place, the fraudulent prevention of acts to be done for the benefit of third persons. Courts of equity hold themselves entirely competent to take from third persons, and a fortiori from the party himself, the benefit he may have derived from his own fraud, imposition or undue influence in procuring the suppression of such acts. Thus, where a person had fraudulently prevented another, upon his death bed, from suffering a recovery at law, with a view that the estate might devolve upon another person, with whom he was connected, it was adjudged that the estate ought to be held as if the recovery had been per 336 fected, and that it was against conscience to suffer it to remain where it was. So, if a testator should communicate his intention to a devisee, of charging a legacy on his estate, and the devisee should tell him that it was unnecessai’y, and he would pay it, the legacy being prevented, the devisee will be charged with the judgment. And, where a party procures a testator to make a new will, appointing him as executor, and agrees to hold the property iu trust for the use of the intended legatee, he will be held a trustee for the latter, upon the like ground of fraud.” In Schedda v. Sawyer, 4 McLean, 181, it was held that a person who assumes to act as agent in redeeming land sold for taxes, should be considered as having acted in that capacity, and could not take advantage of such act to obtain a title in his own name for the land, and, by a subsequent procedure, to ¡perfect the title, hut was answerable to those in whom the title rested in the character he first assumed. In this case Larson, by fraud and misrepresentation, induced Eisher to sell him the school land certificate, pretending he was acting for Cown, and was purchasing it for his benefit. It would seem contrary to every principle of morality and fair dealing, to ■allow Larson to secure the advantage of a purchase thus made, which he could not have made for his own benefit if Eisher had known that he so intended. It is said that the defendant had no interest in the land after it became forfeited to the state for the non-payment of interest, and that Eisher and Keyes bought it discharged from all equities in his favor. This may be so; but still they were willing to give him the first chance to purchase the school land certificate because he had once owned the land, whether he had any legal or equitable claim upon it or not. Suppose that they, moved by some feeling of kindness or generosity towards the defendant, were willing to give him the certificate, and had done so by transferring it to Larson as his 337 agent, wbo assumed to act for the defendant in the matter, would a court of equity permit the agent to repudiate the character in which he had pretended to act, and secure the gift for himself, because the defendant could not, by an action, have compelled them to give him the certificate ? It seems to us immaterial whether the defendant could compel Eisher and Keyes to give him the first chance to purchase the certificate, or not. They intended to give bim the preference — told Larson so — and were induced to sell it to Larson by the statements and representations which he made, that he was purchasing it for the defendant’s benefit. It is clearly against good faith and equity to permit Larson to take advantage of his own fraud, and hold the certificate procured under such circumstances. We therefore tbink that upon the facts of the case the defendant was entitled to the relief demanded in the answer. By the Court. — The judgment of the circuit court is reversed, and the cause remanded with directions to give judgment accordingly.