Eichelberger v. Hawthorne

• Citation: 33 Md. 588
• Parties: PETER EICHELBERGER, Executor of Daniel Domer v. WILLIAM HAWTHORNE.
• Decision Date: 02 February 1871
• Court: Court of Appeals of Maryland

33 Md. 588

PETER EICHELBERGER, Executor of Daniel Domer v. WILLIAM HAWTHORNE.

Court of Appeals of Maryland

February 2, 1871

Appeal from the Circuit Court for Washington County, in Equity.

The cause was argued before BARTOL, C.J., STEWART, MILLER and ROBINSON, JJ.

Z S. Claggett, for the appellant.

The sale to Hawthorne was not ratified, and was fraudulently and illegally made, and the order of the Orphans' Court vacating and setting aside the same is conclusive upon the complainant, and this court has no jurisdiction to take cognizance of it, or any pretended rights created thereby, or in any manner to relieve the complainant from the consequences of his conduct in reference to the sale.

The executors were purchasers at their own sale, and this the policy of the law forbids. The complainant was a party to the fraudulent transaction, and was equally guilty of the fraud and it is to be deemed particeps criminis, and has no right to relief in this court. Where parties are concerned in illegal transactions, whether they are mala prohibita or mala in se, Courts of Equity will not grant relief, acting upon the known maxim: " In pari delicto potior est conditio defendentis, et possidentis."

"Whoever is a party to an unlawful contract, if he has once paid the money stipulated to be paid in pursuance thereof, he shall not have the help of a Court of Equity to fetch it back again." Smith Lead. Cases, 497; Shoemaker v. Mechanics' Bank, 31 Md. 396, 402; Albert v Savings Bank, 2 Md. 160, 171, 172; Merrick v. Bank of Metropolis, 8 Gill, 72; Bayne v. Suit, 1 Md 80, 86; Sedgwick v. Sedgwick, 6 Gill, 39; 1 Story's Eq. secs. 298, 299; Peacock v. Terry, 9 Ga. 147; Smith v. Dickson, 9 Ga. 404; Adams v. Barrett, 5 Ga. 415, 416; Howell v. Fountain, 3 Kelly, Ga. 176.

If the contract is illegal and fraudulent, no action will lie in disaffirmance of it. Stewart v. Iglehart, 7 G. & J., 132, 136.

William T. Hamilton, for the appellee.

If the executors, or one of them, had an interest in the sale, it was not therefore necessarily void--it was only voidable.

Such a sale can be affirmed by the cestuis que trust, upon full information of all the facts, as it was in this case by a majority of them--acquiescence for a long time, with knowledge, will affirm it. But such sale will be set aside as a matter of course, if required by the cestuis que trust, or any one of them, not upon the ground that it is necessarily fraudulent, but for the reason that it is against the policy of the law, that persons holding the relation of trustees should deal with the estate or interest of their cestuis que trust. Ex-parte James, 8 Ves. 345; Campbell v. Walker, 5 Ves. 678; Cumb. Coal & Iron Co. v. Sherman, 20 Md. 117; Hoffman Steam C. Co. v. C. Coal & Iron Co., 16 Md. 457; Williams v. Marshall, 4 G. & J. 376; Ex parte Bennett, 10 Ves. 380, 400; Hawley v. Cramer, 4 Cow. 744.

But there is another principle equally well settled, and that is, that the purchaser will be entitled to terms, and justice will be rendered him in setting aside such sale. He will be entitled to a return of the money paid by him, with interest, and for permanent improvements, and charged with rents. The cestuis que trust will not be entitled to have again the lands, and also the money already paid. Bell v. Webb, 2 Gill, 165; Mason v. Martin, 4 Md. 124; Lead. Cases in Eq. 158, (top.)

Miller J., delivered the opinion of the court.

A statement of some of the material facts disclosed by the record is important to a proper understanding of the questions presented by this appeal.

Daniel Domer died in 1846, leaving a will by which he devised all his real estate to his wife for life, and on her death he directed and empowered his executors to sell the same, and execute deeds therefor to the purchasers as soon as the purchase money was paid, or secured to be paid, and to distribute the proceeds equally to his three children, the issue of any child dying before distribution to have the portion their father or mother would have been entitled to if living. He appointed David Domer, one of his sons, and the appellant, Peter Eichelberger, his executors. The widow died in 1851, and the executors, in execution of their trust, obtained, in February, 1852, an order from the Orphans' Court directing them to sell the real estate, in pursuance of which they sold, on the 4th of August, 1852, one hundred and thirty-nine acres of land to the appellee, William Hawthorne, at $12 per acre. This sale was duly reported to the Orphans' Court by the executors, and the court, on the 7th of September, 1852, passed thereon the usual order of ratification nisi, but never passed any order finally ratifying the sale. The executors then passed a final account in the Orphans' Court, on the 25th of April, 1853, in which they charged themselves with the purchase money for this land, and the same with other funds in their hands is by that account, after payment of debts, distributed to the parties entitled. It also sufficiently appears from the record that all the distributees have received their respective shares of this distribution, except George H. Domer, a grandson, who was then under age, and whose share, amounting to $130.55, still remains in the hands of the appellant as executor. On the 31st of October, 1853, the executors executed a deed for the land to Hawthorne, the purchaser, by which they acknowledged receipt of the consideration of $1,668.

In this condition as to title the land remained until the 17th of August, 1860, when George H. Domer, by next friend, filed a petition in the Orphans' Court alleging the sale was not fair and bona fide, but was made by collusion and according to previous concert and agreement since carried out between the purchaser and the executors, that the latter should become participants and partners in the purchase and share the benefit thereof; that the land did not sell for its real value, and the sale has never been finally ratified; that he has never received any distribution from the estate of his grandfather, and for these reasons he objects to the ratification of the sale and prays that it may be disaffirmed and rejected. Hawthorne answered this petition insisting upon the fairness and bona fides of the sale and upon its ratification. The executors also answered, but admitted most of the allegations of the petition, stating, however, they were not aware at the time that they were violating the law or their duty as executors in becoming interested in the purchase; they also charge in their answer that Hawthorne never paid them but the sum of $800 on the purchase. Testimony in reference to the subject of this petition was then taken, and the Orphans' Court upon hearing and argument of the case passed an order dated the 3rd of November, 1860, rejecting and setting aside the sale, but the order on its face assigns no reasons for its passage. David Domer, one of the executors, then declined to act further as such, and the appellant thereupon gave a new bond, became sole executor, and then proceeded under the order of the Orphans' Court to re-sell the property. After sales to several purchasers who refused to comply, he effected a sale about the 10th of December, 1863, to James Null for $1,750, in whose hands the purchase money remains, but he is willing to pay the same into court under the present proceedings in equity provided he can obtain a good title to the land.

The prayer of the present bill in equity filed by the appellee originally against the executors and George H. Domer, but to which by various amendments all the distributees and the second purchaser Null are made parties, is that the original sale to the complainant be confirmed and his title to the land secured, but if this cannot be done then that he be reimbursed out of the purchase money due by Null the full amount he paid to the executors on the original purchase and for general relief.

One of the disputed questions of fact in the case is, did the complainant pay to the executors the full amount of the...