Edwards v. Gottschalk

• Decision Date: 19 April 1887
• Parties: CATHERINE EDWARDS, Respondent, v. FREDERICK GOTTSCHALK, Appellant.
• Court: Missouri Court of Appeals

25 Mo.App. 549

CATHERINE EDWARDS, Respondent, v. FREDERICK GOTTSCHALK, Appellant.

Court of Appeals of Missouri, St. Louis.

April 19, 1887

APPEAL from the St. Louis Circuit Court, SHEPARD BARCLAY, Judge.

Affirmed.

FRED. T. LEDERGERBER, for the appellant: A mortgagee may purchase. McNair v. Biddle, 8 Mo. 257; Cowan v Barrett, 18 Mo. 257; Medsker v. Sweeney, 45 Mo 273; Worley v. Dryden, supra. An attorney may purchase (Grayson v. Widdle, 63 Mo. 539; Paige v. Stubbs, 39 Iowa 537; Weeks on Attorneys, sect. 275; Hawley v. Cramer, 4 Cowen 717; Beardsly v Root, 11 Johns. Rep. 464; Werdell v. Van Renselar, 1 John. Ch. 344), where a cestui que trust has no title. Price v. Evans, 26 Mo. 31.

FREDERICK A. WIND, for the respondent: As Mr. Gottschalk agreed to buy the property at the first sale, advance the necessary funds, and re-convey upon being reimbursed, he became the trustee of the plaintiff. Kelly v. Johnson, 28 Mo. 249. A trustee will not be permitted to deal with the property for his own benefit; he can not purchase an outstanding title and hold it for his own use against his cestui que trust, even though such purchase is at a judicial sale and under a title superior to that conveyed to him as trustee. Roberts v. Moseley, 64 Mo. 507. The purchase at the second sale, and the money paid for that purpose, constituted an advance by attorney and trustee. Roberts v. Mosley, 64 Mo. 507; Hubbell v. Midbury, 53 N.Y. 98; Terrett v. Cronsbie, 6 Lansing 83; Sypher v. McHenry, 18 Iowa 232; Baker v. Railroad, 86 Mo. 75.

OPINION

THOMPSON J.

This suit is brought as a suit in equity, for the purpose of having the defendant declared the trustee for the plaintiff, in respect of a certain piece of real property described in the petition, to compel a conveyance of the property from the defendant to the plaintiff, and for an accounting with him of the rents and profits during the time of his holding the legal title. The court entered a decree in favor of the plaintiff, awarding her the relief demanded, and directing a reference for the purpose of taking and stating an account, and ascertaining the amount due the plaintiff from the defendant, in respect of rents and profits, after reimbursing the defendant for his outlays and services. Upon the referee's report, the court made a final decree, divesting the title to the property out of the defendant and vesting it in the plaintiff, and awarding the plaintiff a judgment against the defendant in the sum of $810.80, and costs. From this judgment the defendant prosecutes this appeal. The correctness of the conclusion of the referee, and of so much of the final decree as merely embodies those conclusions, is not questioned on this appeal; but the objections made to the decree are directed against the conclusion of the court, that the defendant was a trustee for the plaintiff in respect of the property, and that, as such, he was at all bound to account to and re-convey.

The court, laying out of view all matters which were controverted upon the evidence, made a special finding of facts, which though not required by the rule of practice, is admitted by counsel for both parties to be a substantially correct deduction from the evidence; and we find, from an examination of the evidence, that it is not only a correct deduction from the testimony of the witnesses, but that the facts thus found are substantially admitted by the defendant in his answer. These facts (adding some that were not stated by the trial court) substantially were, that the defendant was an attorney at law, and, as such, was retained by the plaintiff to foreclose a deed of trust upon the property in controversy, in which deed the plaintiff was the beneficiary; that, before the sale under this deed of trust, the defendant agreed with the plaintiff that he would bid the property in, take a deed therefor in his own name, and hold the legal title for the plaintiff until he should be reimbursed for his advances and legal services in the premises; that he accordingly bid the property in at the trustee's sale and received a deed for the same, the trustee conveying the property to him in his own name, and without any trust being expressed on the face of the deed; that the advances and expenses of the defendant, incident to the sale, were fifty dollars, which sum was expressed as the consideration of the deed; that, shortly prior to the sale, the defendant learned that there was an earlier encumbrance on the property, held by another person against his client, and that a sale was advertised thereunder to occur soon after the first mentioned sale; that, after the defendant had bought the property at the first sale, he notified the plaintiff of the impending second...