Johnston v. Eason, 38 N.C. 330, 3 Ired. Eq. 330 (1844)

Dec. 1844 · Supreme Court of North Carolina

38 N.C. 330, 3 Ired. Eq. 330

CELIA JOHNSTON vs. THEOPHILUS EASON & AL.

Eveiy trustee for sale is bound by his office to bring the estate to a sale, under every possible advantage to the cestui que trust; and, when there aieseveral persons concerned, with a fair and impartial attention to the interests of all concerned.

He is bound to use, not only good faith, but also every requisite diligence and prudence, in conducting the sale.

If such trustee is wanting in reasonable diligence in conducting the sale, as if he contract under circumstances, shewing haste and improvidence, or so manage the sale as to advanee the interest of one oi the partie=, to the injury of another, he will be personally liable to malte good to the party, suffeiing from his misconduct, the amount oi his loss.

Nor will equity, in such a case, assist a purchaser, however innocent, in compelling a conveyance of the title.

When a trustee sells at auction, he must make due advertisement, and give due notice to the parties interested. Otherwise the sale will be avoided. The case of Hunt v. Bass, 2 Dev. Eq. 232, cited and approved.

This cause, having been set for hearing upon the bill, answers and depositions, was transmitted by consent of parties from the court of equity of Edgecomb County, at the Fall Term, 1844, to the Supreme Court.

The following facts appear from the pleadings, and the depositions, and exhibits filed in the cause.

The plaintiff complains, that in the year 1829, she sold to Thomas Low a tract of land, the boundaries of which are set forth in her bill, for the sum of one hundred and fifty dollars, secured by four bonds, each for $37.50, payable at different times ; that in order to assure to the plaintiff the price of the land, the said Low executed a deed of trust to the defendant, Theophilus Eason, for the land, with the usual provisions for the sale thereof, upon his failing to pay off and discharge said bonds; that at the time this deed of trust was delivered to the defendant, Theophilus Eason, she delivered to him the said bonds given for the price. She further alleges, that soon thereafter, Thomas Low removed from this State, taking with him all his property, and leaving but the land to satisfy her claim, and that the whole of the said claim is still due, except $15 paid by Low, before he went away. She further charges that in June, 1841, she notified the trustee, Eason, in writing, to sell the land and discharge her debt, or she would proceed against him to compel him; that to this notice she received no answer, and that she had several times before requested him to do so. In August following, she went to Tarborough to see counsel and institute proceedings against the said trustee, when she learnt that he had sold the land the preceding Saturday, to the other defendant, his son, for seven dollars. She charges the sale was fraudulently made for the purpose of defrauding her of the land ; that but six persons were present, the two defendants, a man by the name of Russ, who had been put upon the land by the trustee as his tenant, a man by the name of Eason, a relation of the defendants, and two other individuals, who were her neighbors, who were that morning invited by the defendant, Theophilus Enson, neither of whom had heard of the sale until so invited ; that she resides within two miles of the place, where it is said the sale took place, but had never heard of it, nor was she ever notified by the trustee of his intention to sell — if he had done so, she should have attended and bid the amount of what was due to her, as advised by her counsel. She charges that the defendant, Thomas Eason, holds the land as her trustee, subject to the performance of the trust in the original deed of trust; and prays that the land may be sold, under an order of the court, for the payment of what is due to her, or that the trustee, Theophilus Eason, may be decreed to account with her for the full value of the land.

The defendants in their answers admit the sale of the land, by the plaintiff to Thomas Low, at the price specified, and the execution of the deed of trust for the purposes therein set forth.

The defendant, Theophilus Eason, alleged (hat three of the notes or bonds given by said Low to the plaintiff, were, by her, transferred to him, to secure a debt, which she owed him, to the amount of $70 or 80 in the year 1832; that he made the at reduest °f plaintifij having received from her a written notice so to do, and that he sent her word, by her messenger¡ t[la(; he would do so. He further alleges, that he advertised the sale at three different public places in the county of Edgecomb, where the land lies; to wit, at Daniel’s store in Stantonsburg, at Otter creek meeting house, and at the court house in Tarborough; that on the day of sale, to wit, the Saturday before the August term of Edgecomb County Court, according to the advertisement, he exposed the land for sale, on the premises, at one o’clock, when his own son, Thomas, the other defendant, became the highest bidder at seven dollars and sixty cents. He further avers that he took all necessary steps to make known the time of sale; and that the land was not worth what the plaintiff owed him.

The defendant, Thomas Eason, denies all fraud, so far as he was concerned, in the manner of making the sale, and believes it was fairly conducted, and that he is a bona fide purchaser.

A general replication was taken to the answers, and the cause was set for hearing and sent to this court to be heard.

The deposition of John Evans states, that he knows the land in dispute, that it is worth one dollar per acre; that, at the time of the sale, he lived within two miles and a half of the land, and never heard of the sale, and that the plaintiff lived with him at the time.

Bryant Evans knew the land, and the time of sale; lived within one hundred yards of the land for fifteen years, and did so at the time it was sold ; heard nothing of the sale, until the evening of the day on which it took place. Some years since, he purchased one half of the land from TheophiJus Eason, at the price of $50; took a deed from him, and gave lus note or bond for the price. Afterwards learning from the plaintiff that she was interested in the matter, and dissatisfied, he surrendered up to the defendant, Theophrlus, the deed he had received from him, and took back his note.

Benjamin Strickland lives about two miles from the land and did not hear of the sale until throe or four days after it was made.

William S. Duggan. In the summer of 1841, at the request of Theophilus Eason; he went with him and his son, Thomas, to Stantonsburg, for the purpose of seeing the former put up an advertisement to sell the land. He did see the defendant set up an advertisement for the sale of the land at the store of Daniel and Roundtree in that place. After night, he and Roundtree went out with a candle to see the advertisement, and it was gone; and after that, he and Theophilus Eason left Stantonsburg together. The next day he went with the other defendant, and saw him put up an advertisement for the same purpose at the court house door in Tarborough, and another at Otter’s creek meeting house ; that Tar-borough is twenty-two or three miles from the land ; Otter’s creek meeting house about ten, and Stantonsburg about six or seven. He further states, that Oak grove is a very public place, and is about one mile and a half from the land.

Nathan P. Daniel is one of the firm of Daniel and Roundtree, at Stantonsburg, and lived there in the summer of 1841; saw no advertisement for the sale of the land atthat place or anywhere else.

Abner Tyson lives about a mile and a half from the land; heard nothing of the sale until the morning of the day, on which it took place; on that morning, the two defendants came to his house, told of the sale, and asked him to go; he did so; on the way, Lawson Eason and Geralders Simms joined them, and they went on. When they got there, the land was put up to the highest bidder and bought by Thomas Eason at seven dollars and sixty cents — no other persons there; and the land not worth more than fifty cents per acre.

John M. Barnes lives scarce a mile from the land; heard nothing of the sale for several days after; thinks it worth one dollar per acre.

Richard Howcott lives within about one mile and a half of the land ; did not hear of the sale until some days after it took place.

Benjamin Moore lives within three quarters of a mile of the land, and never heard of the sale until it was over.

The depositions of W. & Duggan and Jonathan Eason an(j Elkamy Baily proved, by the former, the putting up the advertisements, as stated by him in his other deposition — by the 2d that he had heard the plaintiff say the land was Theophilus Eason’s; and by the last, that she said, some eight or ten years before the deposition was taken, that Theophilus Eason had paid for her sixty or seventy dollars, and she had given up the land to him — and does not think the land worth more.

B. F. Moore for the plaintiff.

J. H. Bryan for the defendant.

Nash, J.

It is impossible to read this testimony, without being entirely satisfied, that a gross fraud has been attempted by these defendants, in the pretended sale of this land. The land in question was conveyed by Thomas Low, to the defendant, Theophilus Eason, in trust, for the purpose of securing to the plaintiff the money due to her from Low, for the purchase of the land; and the securities taken by her, as she alleges; were at the same time delivered by her to Eason, for the purpose of being in his possession, when the sale should be had. Twelve years after this, the land was sold at public auction, as it is alleged by the defendants, and Thomas, the son of the trustee, became the purchaser, at the price of §7 60. Every trustee for sale, is bound by his office, to bring the estate to a sale, under every possible advantage to the cestui que trust. Dowes v. Graysbrook, 3 Mer. 208 ; and, when there are several persons interested, with a fair and impartial attention to the interest of all concerned; Ord v. Noel, & Mad. 440. Hunt v. Bass, 2 Dev. Eq. 292. He is bound to use, not only good faith, but also every requisite degree of .diligence and prudence, in conducting the sale. If he is wanting in reasonable diligence in the management of the Sale, as if he contract under circumstances, shewing haste and imprudence, or so manage the sale, as to advance the interest of one of the parties to the injury of another, he will be personally liable to make good to the party, suffering from his misconduct, the amount of his loss. Lewin on Trusts and Trustees, 22 Law Lib. 186. Pechell v. Fowler, 1 Anstr. 550. Nor will equity in such a case assist a purchaser, however innocent, in compelling a conveyance of the title. Ordv.Noel, per Sir John Leach. Where a trustee sells at auction, he must make due advertisement, and give due notice to the parties interested. Thus, in a mortgage deed, with a power of sale, it appearing to the court that the power was limited to a trustee, and that the mortgagor had not been apprised of the sale, Sir John Leach granted an injunction to stay the sale. He observed, it was the duty of the trustee to attend equally to the interest of both cestuis que trust, and apprise both of the intention of selling, that each might take the means to procure an advantageous sale. Anon case, 6th Mad. 10. In this case, according to the tesfimony, there was not only a want of good faith in the trustee, amounting to actual fraud, but, according to his own statement, a degree of negligence and want of prudence, if he were acting honestly, that would make him answerable to the plaintiff. He alleges, that he caused advertisements to be put up, at three different public places. The one at Stantonsburg was put up by him, and, that night, before he left there, it disappeared, and this was six or seven miles from the land, but the nearest place to it at which the advertisement was put up. The other two places were distant from the land, the one ten, and the other twenty two or three miles. William S. Duggan, the witness who saw the advertisements put up, tells us that Oak Grove was a very public place, and not more than a mile and a half from the land, and the defendants do not pretend, that any advertisement was put up there. Why was this omission ? If the object was to apprise those, who would be most likely to purchase, the neighbors, would not a notice have been put up, where it was most like to come to their knowledge? So far from this being the desire of the defendants, the notic.e nearest ^1Q ^aII<^ disappears the night after it was posted up, nor did any one, as far as is disclosed by the testimony, except Duggan, ever see it. Mr. Daniel, one of the partners in the store, and who was there at the tirne, swears he never saw it. The neighbors are examined, one living within a hundred yards of the land, another within three quarters of a mile, and none more than two or two and a half miles, and not one of them ever heard of the sale, until it was over. Mr. Evans, who lived within one hundred yards of the land, had actually, some time before that, made a contract with the trustee, for the purchase of one half of the land, for fifty dollars, but subsequently rescinded. How many persons were present? Altogether six: the two defendants, Lawson Eason, a relation of theirs, Russ, the tenant of the trustee on the land, and Mr. Tyson and Mr. Simms. Mr, Tyson had never heard of the sale until that morning. When they got to the land, it was p.ut up to sale, and bid off by Thomas Eason, the son of the trustee, for $7 60. If the trustee had intended to act with good faith, upon finding so few persons in attendance, and so little bid for the land, he would, as it was clearly his duty to do, have adjourned the sale. In addition to all this, the defendant, Theophilus, t,ells us in his answer, that the plaintiff owed him between $70 and $80, and this land was the only fund out of which he expected to get paid; and yet, he wishes the court to believe that the sale to his son for $7 60 was an honest one. The plaintiff charges, that the trustee never gave her any notice of the intended sale, and that she never heard of it until she went to Tarborough, which was the week after ; and the trustee does not pretend to say he did give her notice; he only alleges, that, in answer to her notice, which was in June, he sent her a verbal message, he would/sell the land before court, and, in evidence that she knew nothing about it, the individual with whom she lived, swears he heard nothing of the sale, until it was oyer. We are satisfied, from the whole case, that the trustee was not guilty alone of such negligence and want of care, as would render him liable to make good to the piaintiff such injury as she would have sustained, if the sale had been effectual, to convey the, title, but we see so much of trick and contrivance, as satisfies us that the whole was a base fraud.

There must be a decree for the plaintiff, declaring the sale made by the defendant, Theophilus Eason, fraudulent and void.

The defendant, Theophilus Eason, claims to be a creditor of the plaintiff, for the sum of 70 or 80 dollars. He is at liberty to have an account taken by the Master, of what the plaintiff does owe him.

Per. Curiam, Decree accordingly.