Schloss & Kahn v. Brightman

• Decision Date: 11 November 1915
• Docket Number: 167
• Citation: 70 So. 670,195 Ala. 540
• Court: Alabama Supreme Court
• Parties: SCHLOSS & KAHN v. BRIGHTMAN et al.

70 So. 670

195 Ala. 540

SCHLOSS & KAHN v. BRIGHTMAN et al.

No. 167

Supreme Court of Alabama

November 11, 1915

Rehearing Denied Jan. 20, 1916

Appeal from Chancery Court, Lowndes County; W.R. Chapman Chancellor.

Bill by Schloss & Kahn against Laura K. Brightman and others. Decree for defendants, and complainants appeal. Affirmed.

Powell & Hamilton, of Greenville, for appellants.

Rushton Williams & Crenshaw and G.F. Mertins, all of Montgomery, for appellees.

GARDNER J.

Appellants Schloss & Kahn, simple contract creditors of one W.T. Brightman, now deceased, filed this bill against the respondent Laura K. Brightman and the respondent Fourth National Bank, seeking as its prime purpose to have the respondent Laura K. Brightman decreed a trustee of certain lands which she claims to have sold under a mortgage executed by said W.T. Brightman in his lifetime, which are made exhibits to the bill, and that she be held to account, as such trustee, for the said lands and the rents and profits derived therefrom, and that said lands be sold for the purpose of paying the indebtedness due by said Brightman, deceased. From the conclusion we have reached the respondent bank may be here laid out of view.

It is alleged in the bill that said W.T. Brightman died on June 3, 1909, a resident of Lowndes county, Ala., leaving a last will and testament which was subsequently and duly and legally admitted to probate in said county. A copy of said will is made Exhibit A to the bill, and by the terms thereof Laura K. Brightman and respondent C.P. Rogers, Jr., and W.L.C. Haigler were named as executors, and they qualified as such. The respondent Laura K. Brightman is the widow of said W.T. Brightman, deceased.

The bill further shows that in March, 1909, the said W.T. Brightman was indebted to the complainants in the sum of $3,304.15, evidenced by four promissory notes, and was further indebted by open account in the sum of $62.06, that all of said amounts are due and unpaid, and that said claims have been duly filed against the said estate.

The fourth paragraph of the bill contains a description of the real estate of which said Brightman died seised and possessed.

In the fifth paragraph it is shown that the said Brightman executed a number of mortgages on said real estate to separate persons and firms, which said mortgages are made exhibits to the bill. The first of said mortgages was executed by said Brightman to one Tyson upon the real estate known as the "Tyson Swamp plantation," containing about 1,680 acres of land in Lowndes county, and executed January 5, 1897, a copy of which is Exhibit B.

Exhibit C to the bill is a copy of a mortgage by said Brightman and wife to one Bell upon the above-described "Tyson Swamp plantation" and other real estate in Lowndes county. Other mortgages are referred to in said fifth paragraph, copies of which are made exhibits to the bill, but a further reference in detail is deemed unnecessary. Some of them, as above shown, are second mortgages as to some of the property embraced therein.

The bill further avers that after the death of the said Brightman, and after said respondent Laura K. Brightman became executrix, she purchased and had transferred to her each of said mortgages herein referred to, and that at the time of the death of said Brightman he had paid a large portion of the indebtedness for which said mortgages were executed, and that said indebtedness at the time of the transfer was less than the sum of $20,000. It is further alleged that the said Laura K. Brightman sold the property described in each of said mortgages under the power of sale contained therein and became the purchaser at said sales, and that the property was sold at a price greatly less than its real value. Some of the foreclosure deeds executed by the auctioneer to said respondent Laura K. Brightman are made exhibits to the bill also, the recitals of which disclose foreclosures in full accordance with the terms of the mortgages, and that public sale was had after due notice given as required by the mortgages, and that said Laura K. Brightman was the highest and best bidder at said sale. Some of said mortgages seem to have required that notice of said sale be given by publication for three weeks in a newspaper. The regularity of said sales is in no manner questioned by the bill. There is no averment or pretense that any of the funds of the estate were used by said respondent in the purchase of said mortgages, and it is therefore to be assumed that said respondent purchased the same with her own means. Nor is there any averment or insistence that sufficient funds or means of the estate came into the hands of the respondent with which the indebtedness could have been paid.

Construing the bill most strongly against the pleader, the purchases made by said respondent were made in strict accordance with the terms of the power of sale contained in the mortgage, and the sales were very fairly and openly conducted, and her bid was the last and best and highest bid received. The only averments in the bill in any way impugning the transaction is the averment that the amount for which the property sold was much less than its reasonable value. There is no averment of fraud or unfair dealing with respect to the foreclosure of these mortgages and the purchase by said respondent, except as above indicated. The insistence by counsel for appellant (and such appears to be the theory upon which the bill was filed) that, as the said respondent Laura K. Brightman was at the time of the purchase of said mortgages and the foreclosure thereof the executrix of the estate of her deceased husband, she was thereby incapacitated to become the purchaser of said property at any sum less than its full value. While the bill does not in so many words seek to have the foreclosure sale set aside, yet, in seeking to have the said respondent, the purchaser at said sale, held as a trustee and the lands resold, such is therefore in reality the result that is sought.

By the will, which is an exhibit to the bill, it appears that the said Laura K. Brightman was given all the property of said estate during her lifetime, or widowhood, and that it was further provided that at her death, or the termination of her widowhood, the property should then be divided equally among the children of said marriage. It thus appears that she is the executrix with an interest in the estate.

In one of the earliest cases in this state, in discussing the purchase by an administrator at his own sale, the writer of the opinion had this to say:

"I understand the rule to be founded upon the idea that the purchase is a fraud in law upon the rights of those interested in the estate. I consider it as most congenial with the condition of society and the character of human dealings to narrow the catalogue of legal frauds to as few as practicable, and to declare no act as fraudulent per se where a wise and just policy does not imperiously demand it." Brannan v. Oliver, 2 Stew. 47, 19 Am.Dec. 39.

In Bank of Wetumpka v. Walkley, 169 Ala. 648, 53 So. 830, this court said:

"It has been long and well settled by the decisions of this court that a purchase by a trustee for his own benefit at a sale of the trust property is voidable at the option of the cestui que trust, and will be set aside on timely application made for

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