Sallee v. Chandler

Scott, Judge, delivered the opinion of the court. It is not easy to determine the ground on which the plaintiffs base their right to maintain this action. They ask for the appointment of a trustee to manage the trust property, but it does not appear by what means they now claim that property after the conveyance of it to the father of the defendant. If they found their claim on the nullity of the deed of relinquishment, on the ground that the property was the separate property of the wife and therefore could not be conveyed by the husband, their pretension can not be supported. This case occurred in Kentucky. All the facts which affect the rights of the parties transpired whilst they were residents of that state. The laws of that state then must ascertain and determine their rights. It seems to be well settled in Kentucky that a married woman has full power absolutely to dispose of personal property vested in her for her sole and separate use. (Hord v. Hord, 5 B. Mon. 83; Bell & Terry v. Kellar, 13 B. Mon. 381.) If a married woman in Kentucky can dispose of her separate estate as a feme sole, then, if the deed of her aunt created in her a separate estate, it was competent for her to dispose of it. The concurrent execution of the deed with the wife by the husband can not affect the validity of the transaction. If the property is not [129] regarded as the separate estate of the wife, then it is equally well settled by the laws of Kentucky that the reversionary interest of the wife in slaves depending on the determination of a previous life vests on marriage in the husband, and may by him be absolutely disposed of. (Miller v. Miller, 1 J. J. Marsh. 169; Ewing v. Hancley, 4 Lit. 349; Merriwether v. Booker & wife, 5 Lit. 257-8; Pinkard v. Smith, Littel S. C. 331.) It will be borne in mind that the circumstances, out of which this controversy arises, transpired prior to 1845-6, when by a statute the marital rights of the husband in relation to the property of the wife underwent a change. If the right to relief is placed upon the ground that Chandler, the trustee, could not purchase the trust property from the cestui que trust, the proposition is stated more broadly than the law seems to warrant. Lewin, in his work on trusts, says that “ when it is said that a trustee for sale may not purchase the trust property, the meaning must be understood to be that the trustee may not purchase from himself; for there is no rule that a trustee may not purchase from his cestui que trust. However, a purchase by the trustee from his cestui que trust is at all times a transaction of great nicety, and one which the courts will watch with the utmost diligence. The exception runs, it is said, so near the verge of the rule that it might as well be included under it.” (Lewin on Trusts, 379.) In Coles v. Tricothick, Lord Eldon said: “ I agree the cestui que trust may deal with his trustee so that the trustee may become the purchaser of the estate. But, though permitted, it is a transaction of great delicacy, and one which the court will watch with the utmost diligence ; so much that it is very hazardous for a trustee to engage in such a transaction. A trustee may purchase from the cestui que trust, provided there is a distinct and clear contract, ascertained to be such after a jealous and scrupulous examination of all the circumstances, that the cestui que trust intended the trustee should buy, and there is no fraud, no concealment, no advantage taken by the trustee of information acquired by him in the character of trustee. It is a difficult [130] case to make out whenever it is contended that the exception prevails. (9 Vesey, 244.) It will rest with the trustee to establish in evidence that there was such a bona fide contract between them, as, according to the rule just referred to, will sustain the purchase in a court of equity. The coui’t, if satisfied as to this evidence, will support the transaction; but if any unfair advantage has been taken by the trustee by withholding information or other fraudulent dealing, the purchase will at once be set aside; and mere inadequacy of price will go a great way in the mind of the court to constitute such fraud, though the purchase will not necessarily be set aside on that account alone. (Hill on Trustees, 785-6.) The law of Kentucky does not seem to controvert these views. In the case of Pugh’s heirs v. Bells’s heirs, 1 J. J. Marsh. 406, the court said, “ the alleged purchase from the defendants in error is entitled to no consideration. They were infants, and if they had not been the contract could not be enforced, because it was made with their trustee for a greatly inadequate consideration, and must have been made without a knowledge of their rights.” So in the case of Findley & wife v. Peterson’s Exec’r, 2 B. Mon. -, it was held that though a contract between parent and child in relation to property held by the father as natural guardian of the child will be subjected to a jealous scrutiny, yet where there is no extrinsic proof of fraud, mistake or improper influence, the contract will not be set aside. As the legal estate in the trust slaves did, on the death of Chandler the trustee, devolve on his personal representative or representatives, being his executor or administrators, it would seem that they should be made parties to the suit, that in the event of a judgment for the plaintiffs the legal title may be subject to the control of the court. The judgment will be reversed and the cause remanded, that the plaintiffs, if they see fit, may amend their petition and proceed in conformity to this opinion. The other judges concur.