Johnson v. Erickson

• Decision Date: 27 June 1923
• Docket Number: 22317
• Citation: 194 N.W. 670,110 Neb. 511
• Parties: GUST W. JOHNSON, APPELLANT, v. S. M. ERICKSON ET AL., APPELLEES
• Court: Nebraska Supreme Court

194 N.W. 670

110 Neb. 511

GUST W. JOHNSON, APPELLANT, v. S. M. ERICKSON ET AL., APPELLEES

No. 22317

Supreme Court of Nebraska

June 27, 1923

APPEAL from the district court for Kearney county: WILLIAM A DILWORTH, JUDGE. Affirmed.

AFFIRMED.

C. P Anderbery, for appellant.

F. L Carrico and L. W. Hague, contra.

Heard before MORRISSEY, C. J., ALDRICH and GOOD, JJ., BEGLEY, District Judge.

OPINION

GOOD, J.

This action was brought to cancel an executor's deed, made pursuant to a power of sale in the will of John F. Johnson, deceased, on the ground that the sale was made indirectly to one of the two joint executors. The testator left surviving him his widow and two sons, both of whom are of full age. The widow died intestate prior to the beginning of this action. S. M. Erickson and Will A. Johnson were nominated as executors and duly qualified as such. By the fifth paragraph of his will, testator directed his executors to sell a particularly described 80-acre tract of land, and directed the disposition of the proceeds of the sale.

Pursuant to the power of sale conferred by the will, the executors, on June 9, 1917, for a consideration of $ 6,000, sold and conveyed the land to Ferdinand Hulquist, a nephew of Erickson, one of the executors, and at the same time the widow and sons of testator joined in a quitclaim deed to Hulquist. Proceeds of sale were disposed of as directed in the will. Administration proceedings were completed and the executors discharged from their trust on August 24, 1917. On September 29, 1917, Hulquist, for a consideration of $ 6,000, conveyed the land in question to the said S. M. Erickson. This action is prosecuted by the sons of the testator to cancel the quitclaim deed and executor's deed to Hulquist, and also the deed from Hulquist to Erickson. Plaintiffs offer to reimburse Erickson for the purchase price paid by him, together with interest thereon, and pray for an accounting of the rents and profits during the time that Hulquist and Erickson have been in possession of the land.

The district court found for the defendants, and that the executor's sale was made in good faith to Hulquist, and that he was not acting for Erickson in purchasing the land. Plaintiffs have appealed.

1. Defendants urge that the sale to Hulquist by the executors was not a judicial sale, because it was made pursuant to a power conferred by the will, and that it is, therefore, not governed by the provisions of section 1408, Comp. St. 1922, which declares that an executor's sale of a decedent's real estate shall be void if the executor is the purchaser, or is interested in the purchase, of the land. It may be conceded that said section refers only to judicial sales made pursuant to an order of the district court, but plaintiffs' right to maintain the action is not dependent upon this statute. Under the rule at common law, an executor could not purchase, either directly or indirectly, at a sale of his decedent's lands under a power in the will. O'Dell v. Rogers, 44 Wis. 136. The reason for the rule would be the same in either case. It is but a general application of the rule against the purchase by the trustee of property belonging to the trust estate. It is founded upon the unfairness that is likely to follow upon a sale in which the same person is both vendor and purchaser.

2. Defendants further urge that the sale is not subject to attack, because the land was sold for its full value and no one was defrauded. The rule, however, is that actual fraud is not necessary to invalidate such a sale. "And it matters not if he pays all the property is worth, nor if the sale is advantageous to the cestui que trust . It is a matter, of course, for courts of equity to set the sale aside upon the...