Haight v. Pearson

SMITH, J.: The facts disclosed by the record are that plaintiff is the executor of Hector C. Haight, and is one of his heirs;; that Alma D. Haight was a brother of plaintiff, and also an heir of Hector C. Haight; that the estate of Hector 0». Haight was in process of settlement in the probate court;, that defendant, Charles E. Pearson, was an attorney at. law, who had long been acquainted with plaintiff, and had often been employed by him; that Alma D. Haight was-desirous of selling his interest in his father’s estate, but. would only sell to some one interested in the estate, — that-is, to some other brother or sister; that plaintiff employed, the defendant to purchase the interest of Alma D. Haight,, and defendant accepted this employment; that subsequently defendant bought the interest of said Alma D. Haight, and paid his own money therefor, but at the time of the purchase, in order to induce Alma JD. Haight to sell, the defendant represented and said to him that he (defendant), was buying the property for plaintiff; that in a short timo thereafter the plaintiff tendered defendant the amount of the purchase price, together with ample compensation for his services, but defendant refused to accept either sum, and claimed that he personally owned the interest of Alma D. Haight in the estate of Hector C. Haight, he having taken the conveyance in his own name from Alma D. Haight. The plaintiff brings this suit, claiming that de [56] fendant holds ,the title to the interest of Alma D. Haight in trust for plaintiff. The defendant answered, and, after denying portions of the complaint, he set up that plaintiff was executor' of the estate of Hector C. Haight, and incapable, for that reason, to purchase any interest in the estate. The court made findings substantially as stated above, but failed to find in the affirmative issue set up in the answer. Judgment was entered for the plaintiff as prayed, and defendant appeals on the judgment roll. The first error assigned is that the court failed to find on the affirmative issue in the answer, as the fact therein-alleged, to wit: “That plaintiff was the executor of Hector C. Haight, deceased, was admitted to be true on the argument. We have treated it as an established fact in the case, and shall decide the case on this assumption.” Upon the facts so stated, the defendant raises two questions: First. The plaintiff was incapable of purchasing an interest in the estate, because he was executor. Being incompetent to purchase himself, he could not have another purchase in trust for him, and cannot, therefore, enforce any trust. Second. The defendant purchased with his own money; and while it is true that he agreed, both with plaintiff and the vendor, that he would purchase and hold for plaintiff, still this agreement was oral, and void under the statute of frauds. Upon the first point defendant relies on section 4196, p. 513, 2 Comp. Laws Utah, which provides: “No executor * * * must directly ■or indirectly, purchase any property of the estate he represents, nor must he be interested in any sale.” This section was construed by this court in the case of Ayres v. Jack, 7 Utah, 249, 26 Pac. 300, where it was held, in substance, that sales under it were not void, but voidable only, when the purchase was the interest of an heir. We are of opinion that this statute simply declares, in the case of executors and administrators, that which was, long [57] ■before tbe statutes, a rule in equity, to wit: “that contracts in which a trustee both buys and sells to. himself .are void.” But a contract to purchase the interest of an heir "in an estate by an executor does not come within the .letter or spirit of either the statute or this equitable rule. ‘The executor has no authority, as such, to sell the interest of an heir in the estate. Such interest is not in any •sense property of the estate; it is the property of the heir, •and he alone can sell it. Owing to the advantage that might be taken of heirs by executors or administrators, if we were called upon to pass upon such a sale where the .heir was claiming that he had been overreached or wronged, we should scrutinize the matter, and, if unfair in its terms, would not hesitate to set such contract aside, but not because it was in violation of the statute cited. In other words, these sales by an heir to an executor are not within "the statute at all. If they are fair in themselves, they ■should be upheld the same as other contracts. Now, as to the second point made by appellant, he relies upon the provisions of section 2831 of the Compiled Laws, which provides: “ No estate or interest in real property, other than leases for a term, not exceeding one year, nor any trust or power, over or concerning it, or in •any manner relating thereto, can be created, granted, •assigned, surrendered or declared, otherwise than by operation of law, or a conveyance in writing,” etc. Identically the same language is found in section 3916. Section 3917 provides: “ The preceding section must not be construed -* * * to prevent any trust from arising or being -extinguished by implication or operation of law,” etc. It is conceded by respondent that his only claim is that there ;is in this case a trust by implication or operation, of law; in other words, that the defendant, by his fraudulent •conduct, has created a trust, as some authors term it, ■“ eco maleficio,” in favor of the plaintiff. . On behalf of [58] appellant it is contended that such trust by implication never arises except where the fraud of one party has produced a pecuniary loss to the other. In other words, that courts of equity will not sit to declare a trust against a litigant, simply because hechas lied. This suggestion has much apparent force; but when we come to investigate it, and apply the proper rule to the facts of this case, there is no real difficulty. The defendant was an attorney at law; one who was especially charged with the confidence of others, and who had been accustomed to accept employment from plaintiff, and in this matter accepted the employment of plaintiff, and agreed to perform the services desired, to wit, purchase this interest for plaintiff, from his brother, Alma D. Haight. It is not found that plaintiff paid him anything in advance, but he was bound to pay defendant for the services he might render, and it is found that he had tendered full compensation before bringing this suit. In addition to this, he was only able to buy from Alma D. Haight by representing that he was acting and buying for the plaintiff. Under these circumstances, we are of opinion that the plaintiff can compel him to deliver the title to the interest purchased, just as he agreed to. Notwithstanding our statutes above cited, we hold that this case presents a trust arising constructively and by operation of law. Browne, St. Frauds, pp. 108, 104, speaking of this character of case, says: “Upon similar principles, if one falsely represent himself to be purchasing for another, and by that means * * * get the land at a cheaper rate, he shall be held a trustee for him in whose behalf he pretended to act. * * * If, on the other hand, the grant was made on the faith of a promise, and induced thereby, the breach of the promise is fraud, and, as such, has been made ground of equitable relief; and this doctrine has been extended to cover those cases where [59] the promise which induced the conveyance was to convey to a third person, who has been held to be thereby enabled to compel a conveyance to himself from the grantee. This rule is supported by the cases of Cipperly v. Cipperly, 4 Thomp. & C. 342, and Faust v. Haas, 73 Pa. St. 295. See, also, Cook v. Cook, 69 Pa. St. 443; Dennis v. McCagg, 32 Ill. 429; Sweet v. Jacocks, 6 Paige, 355, — in all of' which eases an analogous rule is announced. We are more inclined to enforce this rule strictly against the- defendant because he is an attorney at law. It is urged that the employment in this case was' of such a character that his relations as attorney for plaintiff in no way affected it. We cannot agree to this. At the present day, in the various relations of business men, attorneys are consulted and employed in every transaction, and in none oftener than in superintending and in making purchases and sales, of property for their clients. In this case it is expressly found that defendant was so employed, and that he acted pursuant to that employment. He disclosed his employment to the person from whom he purchased, and could only purchase on condition that he was buying for plaintiff: We think, under such circumstances, that it is a. sound rule, both of law and morals, that requires defendant to do exactly what he agreed to do when he accepted the plaintiff’s employment. We are of opinion that the-judgment of the court below was right, and it is affirmed. Merritt, O. J., and Bartoh and Kisg, JJ., concur.