Smith v. Townshend

Baetol, J., delivered the opinion of this Court. The relief prayed by the bill in this case is, that certain deeds therein mentioned, made to John Hoye in his ³⁸⁷ lifetime, shall he vacated and set aside ; that George Smith, executor of John Hoye, deceased, shall he required to render an account of the trust, which was vested in his testator by the will of Paul Hoye, deceased; and that Edward Hoye, the new trustee, may render an account of his trust, and that the real and personal estate so devised in trust by Paul Hoye, and the real estate of which William W. Hoye died seized, he decreed to be sold, and the proceeds thereof be divided among the complainants and other parties interested ; it being alleged in the bill that the same is incapable of a just and equal partition among the parties entitled, and that it will be for their interest and advantage that the same be sold for the purpose of division. The provisions in the will of Paul Hoye, creating the trust, directed that the trust should continue till the youngest child of William W. Hoye should arrive at lawful age. At the time the bill was filed, Maria D. Hoye, the youngest child, was a minor; and for that reason, the appellants have argued that the bill was prematurely filed, and that to grant the relief prayed would break up and destroy the trust.

But the bill charges that John Hoye, the trustee, violated his duty in purchasing the trust estate, and taking the deeds from the cestuis que trust; and so far as relief is asked in respect to the deeds, it is no valid objection to the bill that the trust was continuing. So soon as the trustee departed from his legal duty, in taking the deeds, the equity arose, and the right to apply to have them vacated. The bill also prays an account; and cestuis que trust have at all times the right to call a trustee into equity for the purpose of having an account of the trust property. We concur in the conclusions expressed in the opinions of the special judges, Mr. Gordon and Mr. Walsh, that the deeds to John Hoye mentioned in the bill of complaint, ought to he vacated and set aside, so far as they ³⁸⁸ purport to convey to him the interest and estate of the grantors in the lands devised in trust by the will of Paul Hoye.

The principles which govern Courts of Equity in dealing with transactions of this kind are fully stated in Hill on Trustees, 785, 785 ; 1 Story’s Eq. J., secs. 321, 322, &c.; in Fox vs. Mackreth, 2 Bro. Ch. Cases, 400 ; Ex-parte Lacey, 6 Ves., 626 ; Coles vs. Trecotheck, 9 Ves., 234, and Morse vs. Royal, 12 Ves., 373, and by Chancellor Kent in Davoue vs. Fanning, 2 Johns.

Ch. R., 252 ; and have been repeatedly recognized by this Court. In order to support a purchase of the trust estate by a trustee from the cestui que trust, it must appear that “ the trustee, has thoroughly divested himself of that character in the transaction, and entered into a new and distinct contract with the cestui que trust, that person having the fullest information on every subject.” “ There must be' no fraud, no concealment, no advantage taken by the trustee of information acquired by him in that character.” Without recapitulating the facts and circumstances of this case as disclosed by the proof, it is very evident that the grantors were ignorant of the quantity and value of the estate they were selling, no information on this subject appears to have been communicated to them by the trustee, who had possession of the title papers, and must be presumed todiave known the extent and value of the property. They looked upon- him as their benefactor, and dealt with him under the influence of the most implicit confidence in his benevolent intentions towards them.

According to the evidence the price paid was greatly inadequate to the value of the property conveyed by the deeds ; and this is confirmed by the fact that the grantee promised to make other arrangements in satisfaction. Under such .circumstances the conveyances to the trustee of the trust property cannot be sustained. ³⁸⁹ In the opinion of this Court, the complainants are not estopped from impeaching these deeds, by reason of their having taken legacies under the will of John Hoye. This question is not properly presented by the record, being raised by the answer of Daniel J. Hoye, filed irregularly after the passage of