Penny v. Jackson

• Decision Date: 20 July 1888
• Citation: 85 Ala. 67,4 So. 720
• Parties: PENNY ET AL. v. JACKSON ET AL.
• Court: Alabama Supreme Court

4 So. 720

85 Ala. 67

PENNY ET AL. v. JACKSON ET AL.

Supreme Court of Alabama

July 20, 1888

Appeal from chancery court, Madison county; THOMAS COBBS, Judge.

Bill by Sallie S. Penny and her husband, W. Eugene Penny, against Fannie Jackson, and her husband, James Jackson, and Annie D Schoenberger, to have certain lands, belonging to the estate of George Schoenberger, which were bought by the defendant Fannie Jackson, while executrix of said Schoenberger, (who was her former husband,) declared to be held in trust by said Fannie Jackson for the benefit of the complainants and those interested in the same. Complainants appeal.

Cabiness & Ward and D. D. Shelby, for appellants.

Humes, Walker, Sheffey & Gordon, for appellees.

CLOPTON J.

We do not construe the bill as seeking to impeach and set aside for fraud the decrees rendered in the chancery suit brought by the appellee Fannie D. Jackson, as executrix of the will of George Schoenberger, nor as seeking to vacate the sale made under the decrees. The manifest purpose of the bill is to raise a constructive trust, on the ground that Mrs. Jackson purchased the real estate in her character of executrix, and for the benefit of the estate of the testator. Its equity is rested on the general doctrine that a party, who is charged with a duty in regard to property, which is inconsistent with the character of a purchaser for his own use, will not be permitted to purchase an interest in the property, and hold it for his individual advantage. The special prayer of the bill is that Mrs. Jackson may be declared a trustee of the homestead for all the devisees to whom it was devised by the will, subject to the amount for which a resulting trust was decreed in her favor. It is unquestionable that a trustee is required to act, in all matters pertaining to the trust, with the utmost good faith, and solely for the benefit of the beneficiary and will not be allowed to deal with the subject of the trust so as to gain, directly or indirectly, any advantage to himself. An advantage so gained will be construed as inuring to the benefit of the cestui que trust. Courts of equity will raise a constructive trust out of the fiduciary relation when, by virtue thereof, the trustee acquires title to the property under such circumstances that he should not, in equity and good conscience, hold and enjoy the beneficial interest thereof. The efficient administration of justice between the parties is the purpose of impressing the trust; and fraud, actual or constructive, as considered in equity, is an essential element. The existence of a fiduciary relation is not of itself sufficient. There must be an act or transaction in violation of some duty owed to another, whose beneficial ownership is thereby offended,-some use of the fiduciary functions to obtain an advantage inconsistent with the obligations of his position, which equity stamps as constructive fraud. Says Mr. Pomeroy: "An exhaustive analysis would show, I think, that all instances of constructive trusts, so called, may be referred to what equity denominates fraud, either actual or constructive, as an essential element, and as their final source." 2 Pom. Eq. Jur. § 1044; 1 Perry, Trusts, § 166. Mrs. Jackson, as executrix, in March, 1879, filed a bill in the chancery court of Madison county for a construction of the will of the testator, the removal of the administration from the probate court, the administration of the estate in the chancery court, and for the enforcement in her favor of a resulting trust to the extent the money of her statutory separate estate had been used in discharging an incumbrance on the homestead by her testator, who was her husband and trustee. The court rendered a decree construing the will, and ordering a reference by the register to ascertain and report the amount of the indebtedness of the testator, the value of his real and personal property, and the extent of the incumbrances thereon. After the coming in of the report, a decree was made, in September, 1880, declaring a resulting trust in favor of the executrix as to a portion of the homestead, and ordering it sold in satisfaction thereof. In May following, such portion of the homestead was sold under the decree by the register, and purchased by Mrs. Jackson, to whom he subsequently made a conveyance. The complainant, Mrs. Penny and Annie D. Schoenberger, a defendant in the present bill, who are devisees under the will, were made parties to the former suit, and a guardian ad litem was appointed for them. The decrees in the former suit, though rendered against infant defendants, are as binding and conclusive as if they were adults, and can only be impeached upon grounds available to adult parties. They were represented by a guardian ad litem, who made defense under the supervision and protective care of the court, and could not have been permitted to impair or surrender any of their rights by his misfeasance or non-feasance. The presumption is that the court did its duty, and took care that the guardian ad litem observed his. Waring v. Lewis, 53 Ala. 615; Chardavoyne v. Lynch, 82 Ala. 376, 3 South. Rep. 98. The fact that Mrs. Jackson was executrix did not deprive her of the right to purchase the property, or render her purchase voidable. At an early day the principle was settled that a personal representative may purchase property at a sale made by himself under an order of the probate court, if he has an interest in the property, and that such purchase will be sustained if the sale is made in the ordinary mode, and there is an absence of all unfairness. Brannan v. Oliver, 2 Stew. 47. As respects executors and administrators, this rule has never been departed from. In Harr...