Page v. Harper

The opinion of the court was delivered by Smith, J.: Eleven assignments of error are made by the plaintiff in error, Page, and thirteen by the cross-petitioner in error, Harper. There is, however, practically only one question presented for consideration, viz., Should Leeman and Prehm account to Harper and Page for the profits received from the Harden' property, including the rents and the amount received from the sale of the property, deducting expenses and amounts paid in perfecting title? The issue on this question was fairly presented by the petition and cross-petition, which alleged the facts as above recited. To these pleadings the defendants Leeman and Prehm answered by general denial only. The relation of the several parties as above recited is established by uncontroverted evidence, and is admitted by the brief of defendants in error, but they say there was no evidence that Leeman agreed to act [232] as trustee for Harper and Page in the purchase at the execution sale, or that Leeman and Prehm agreed to act as such trustees in the purchase of the trust deed and the notes secured thereby or in purchasing the property at the sale had thereunder. No such agreement was necessary. Their admitted former relation to their principal and cosurety, and to the judgment debt,- on which it was their duty to realize as much as possible, made -Leeman, at least, such trustee, and Prehm also if, as it is to be presumed, he knew all the facts. When the. owner of a judgment or mortgage lien on land, or one who represents such owner, bids at a sale ordered to satisfy such lien, the very fact that the one who makes such bid may raise it to the entire amount of such lien without the investment of an additional dollar often gives such bidder a decided advantage over other bidders, who must back their bids with their cash; especially is this true where the lien or the lien and prior liens approximate or exceed the value of the property. Thus other bidders are deterred from coimpeting in the uneven contest and often refuse to bid at all. It is unconscionable that one who stands in the place of the owner, as Leeman did in this case, the judgment being in his name, should be allowed to take such advantage of his position to the detriment of his principal, and probably to the detriment of the judgment debtor also. (Case v. Carroll, 35 N. Y. 385, 388; 1 Beach, Trusts & Trustees, § 100.) That Leeman held the lien in trust for himself, his cosureties and Harper will not be questioned. He held the property, which he acquired to an advantage, through his relation to such lien; and must hold the same in the same way he held the lien. (Winkfield v. Brinkman, 21 Kan. 682.) The trust in the land arises by implication of law from the facts and circumstances of the case. (Bank v. Woodrum, 60 Kan. 34, 55 Pac. 330.) In ah.analogous situation it is said: “The cestuis que trust may call him to an account [233] . . . having an option to make him replace it [the property — ;in this case to set aside the sale of the land] or, if it is for their benefit to affirm his [their] conduct "and take what he has sold it for, they may take that and charge him with legal interest.” (1 Beach, Trusts & Trustees, § 184.) The court excluded evidence of the- rents and price received on the sale of the property, and sustained a demurrer to the evidence of the cross-petitioner, in opposition to the views herein expressed. The judgment as to both the plaintiff in error and the cross-petitioner in error is reversed, and a new trial is awarded in accordance with the principles expressed in this opinion. All the Justices concurring.