Kennedy v. Keating

Bay, Judge, delivered the opinion of the court. This is a proceeding in the nature of a bill in equity to divest the defendants of their title to a reversionary interest in a lot of ground in the city of St. Louis, and to vest the same in the plaintiff. The petition alleges that one René Paul, who died in 1851, devised and bequeathed, by his last will and testament, to the plaintiff, a lot of ground in block number 147, in the city of St. Louis, being the southeast corner of said block, and containing twenty-five feet front on Sixth street, by one hundred and twenty-seven and a half feet deep along Cerré street; that said devise is subject to a provision as follows: “ Provided, however, that should she die without having lawful issue, then the said lot shall revert to, and vest in and belong to my right heirs, to be held in the same manner as if this devise to the said Ophelia had not been made ; and, in that event, subject to the provisions hereinafter made as to the sale and division of my property and effects, and such reversionary interest in said lot to be considered for these purposes a part of my estate.” The petition further alleges that said will authorized and empowered the executor to sell and convey all the property of said estate, real, personal and mi^od; embracing the reversionary interest in the lot,oi,^i&ilnd aforesaid; and that the executor did sell such reversionary interest to Patrick Keating, at the price and sum of one hundred dollars; that, at the time of said sale, Keating was the agent of the said plaintiff, and received the rents and income of said premises, said plaintiff then having money in the hands of said Keating, [28] and that said Keating purchased said reversionary interest for the sole benefit of said plaintiff. Patrick Keating being deceased, the suit is brought against his widow and heirs at law. The answer of the defendants admits the devise, as stated in the petition, but denies that Keating was the agent of plaintiff, or that he had any money in his hands at the time of the sale belonging to plaintiff, or that he purchased said reversionary interest for the benefit of plaintiff; and charges the fact to be that he purchased said interest at a public sale for his own benefit, and paid full value therefor; and that, at the time of said purchase, said plaintiff, instead of having money in his hands, was indebted to him, and still continues indebted to his estate. The proof upon the trial was that Keating acted in the capacity of agent of plaintiff in collecting the rent for the lot devised to her, and exercised a general control over her affairs, and previous to the sale had expressed an intention to purchase said reversionary interest for her benefit; but no such intention was expressed at the sale, nor was there any evidence tending to show that at the time of the sale he had money in his hands belonging to plaintiff; but, on the contrary, the evidence tended to show that she was indebted to him. The sale was a public sale by the executor of Paúl, and Keating being the highest bidder became the purchaser. The court below decreed in favor of the defendants, whereupon the plaintiff sued out her writ of error. The theory of the plaintiff, as shown in the instructions asked by her, was that Keating was acting in the capacity of a trustee for plaintiff, having the general charge and control of her affairs, and, according to one of the' settled principles of courts of equity, could not take advantage of big situation to obtain a personal benefit to himself at the expense of his cestui que trust. It is true that in equity all acts done by a trustee in respect to the trust property are deemed to have been done for the benefit of the cestui que trust, and not for his own benefit; and it is upon this principle that courts have held that if a trus [29] tee purchases a mortgage on the trust estate at a discount, he will not be allowed to avail himself of the difference, but the purchase will be held a trust for the benefit of the cestui que trust. It is also a well settled principle of equity law that a trustee cannot become the purchaser of the trust property at a sale made by him; but it is not perceived how these well established principles of equity law can be invoked in behalf of the plaintiff in this case, for the reversionary interest sold as aforesaid was not trust property, nor was it any interest belonging to the plaintiff, nor was it in the hands or under the control of Patrick Keating, but, on the contrary, belonged to the estate of René Paul, and was sold at public auction, by his executor, in obedience to his will. No good reason, therefore, can be given why Keating should not be permitted to purchase said interest for his own benefit as well as any other property belonging to the estate of Paul. It is true that if he purchased it under an agreement or understanding with the plaintiff that he was to make the purchase for her benefit, he would be held to have made it in trust for her, and a court of equity would enforce such trust; or, if he purchased it with the money of the plaintiff, a resulting trust would be created by operation of law; and this was the view taken by the court below, but the evidence failed to establish either, and the court properly decreed in favor of the defendants. The other judges concurring, the judgment will be affirmed.