Tolley v. Hamilton

The doctrine is well established that a trustee cannot purchase or deal in trust property for his own benefit or in his own behalf, directly or indirectly. But such a purchase is not absolutely void, but voidable only, at the election of the interested parties seasonably expressed. Hammond v. Hopkins,143 U.S. 224, 12 Sup. Ct. 418, 36 L. Ed. 134; Cottingham v. Moore, 128 Ala. 209, 30 So. 784; Charles v. Dubose, 29 Ala. 367; Calloway v. Gilmer, 36 Ala. 354.

The chancery court had jurisdiction to order a sale, or change the character of the trust property, or to confirm a private sale of same, if deemed to the interest of the minor cestui que trust. McLean v. Presley, 56 Ala. 211; Campbell v. Walker, 5 Ves. Jr. 678; McCreary v. Billing, 176 Ala. 314,58 So. 311, Ann. Cas. 1915A, 561. Therefore the chancery court had jurisdiction to order or confirm the sale in question notwithstanding one of the purchasers, Yarbrough, was the trustee, and having acquired jurisdiction its decree cannot be impeached by a separate bill of review, except for fraud practiced upon the court in the procurement of the decree and which is not sufficiently charged in the present bill of complaint. Hardeman v. Donaghey, 170 Ala. 362, 54 So. 172; Noble v. Moses, 74 Ala. 616.

If the chancery court erred in the former decree as to the method of sale or in permitting the use or disposition of a portion of the income before its maturity, this should have been corrected by appeal and is not available to these complainants by a new and independent bill to vacate and annul said former decree. We do not mean to hold, however, that said former decree was erroneous or that it was of detriment to these complainants if such was the case. True, the will required a reinvestment of the fund, but this did not preclude the chancery court from permitting a credit sale of the property and a reinvestment of the proceeds after the purchase price was paid. Nor does it appear that such a sale prolonged the life estate beyond the terms of the will as the remaindermen would have acquired the same upon the death of the life tenant. Nor does it appear that these complainants have been injured because some of the income was used or disposed of before it matured for the reason that, from aught that appears. Yancy Hamilton lived long enough to become entitled to these items. In other words, the complainants cannot complain of the use made of any of the income from the estate occurring during the life of Yancy Hamilton if he lived long enough to absorb those payments prematurely made.

It may be true that these complainants, or some of them, were not in esse when the former bill was filed and the decree was rendered, but members of the same class to which they belong were and were made parties to the proceedings, and the decree rendered against them would be binding upon after-born members of the same class with identical rights. Letcher v. Allen,180 Ala. 254, 60 So. 828; Elmore v. Galligher, 205 Ala. 230,87 So. 349.

The foregoing does not seem to be in conflict with the views of the learned trial court, as expressed in a prepared opinion; but said trial court seems to have overruled the demurrers to the bill upon the theory that some of the land was not embraced or properly described in the former decree and sale. If this was the case, said land has not been disposed of, and, as Yancy Hamilton is dead, the trust has terminated and the complainants have a plain and adequate remedy at law for the recovery of such land as was not legally disposed of as well as the rental value of same since the death of the life beneficiary.

The trial court erred in overruling the demurrers to the bill, and the decree is reversed, and one is here rendered sustaining the demurrer, and the cause is remanded.

Reversed, rendered, and remanded.

SOMERVILLE, THOMAS, and MILLER, JJ., concur.