Caldwell v. Sigourney

Church, Ch. J.

dissented on the principal point. In the case of Clark v. Sigourney, in which this note was the subject of discussion before us, 1 concurred in the opinion then expressed, and am now satisfied of its correctness upon the questions then presented and decided. But as I now think, the true nature of the consideration of this note was neither discussed nor determined in that case. We said only that a quit-claim deed, executed at the special request of the grantee, although it conveyed no title, constituted a legal consideration of a note given for the purchase money — that it was a bargain of hazard, and the responsibilities were not to be changed, by the result.

*50On the present hearing, the bearing of other facts upon the transaction in question, is urged upon us; and I cannot resist the impression, that they show an infirmity in this note, which the law cannot sustain or approve. I do not know that I dissent from the general principles now laid down by the court, as controuling its decision in this case ; but it seems to me, that they do not reach the difficulty, and are not the true principles upon which this defence essentially rests.

Caldwell dnd others were trustees of the Connecticut Land Company, and the irpowers and duties are defined, by the articles of association, and the indenture between the trustees and the proprietors of the Western Reserve. By these, the trustees have no power to execute deeds, except to proprietors, or in conformity to the orders and direction of the board of directors of the company. Indeed, they were only instruments or agents, by whom the territory was to be aparted in severalty, that each proprietor might receive his several legal title.

These trustees, in executing the deed to Lloyd, acted only in their fiduciary capacity, and they so declare on the face of the instrument itself, although they describe themselves as trustees of the late Connecticut Land Company. It no where appears, however, that that company had been dissolved; and if it had been, then the whole action of Caldwell and others professing to be trustees in this transaction, was a farce, if not a fraud; and if any land remained undisposed of, as stated in the deed, each proprietor still had an interest in it, notwithstanding the dissolution of the company, which these individuals had no right, legally or morally, to dispose of, and pocket the avails.

Although the deed was executed by these gentlemen, as trustees, yet the notes which they received as the consideration, were of a different import. These were executed to each trustee, severally, and, as is conceded, for his own individual benefit, and as it would seem, either to induce them to perform a trust duty for a large compensation, which they were bound to perform without a price, or as a persuasive to violate a duty, by executing a conveyance in a capacity and under a pretence, in which they had no right to act. If a public officer has no right to demand a compensation or reward for the performance of an act of duty, beyond the fixed fees of *51office, it would be a violation of the same salutary principle, to recognize in trustees appointed for a great public purpose, as these essentially were, a right to stipulate for such a reward as was here promised. 1 Rolle’s R. 313. Latch's R. 54. W. Jones, 65. 1 Hawk. P. C. ch. 68. sec. 4. Lane v. Sewall, 1 Chitt. R. 175. (18 E. C. L. 61.) Dew v. Parsons, Id. 295. (18 E. C. L. 87.) Morris v. Burdell. 1 Campb. 218. Bilke v. Havelock, 3 Campb. 374. Preston v. Bacon, 4 Conn. R. 472. Hatch v. Mann, 15 Wend, 44.

It was suggested in the argument, that this transaction was to be considered as a private affair between Lloyd and the trustees, in which the Land Company had no concern, because it did not appear certainly, that the land described in the deed belonged to the company. We cannot presume this: the character of the entire transaction forbids it. On the contrary, the language and import of the deed, as well as the large sum paid, leads me to the conclusion, that the object was, to transfer a title, or at least to prevent the Land Company, or the proprietors, from claiming a title ; and such would be the legal effect of the deed, if it was in truth executed under the powers existing in the trustees. If this was not its purpose and effect, then the execution of the deed was a mere frivolous ceremony, which cannot be said to furnish a good consideration for the note. 1 Sw. Dig. 208.

Some legal consequence was intended to follow from this deed ; and it must be treated, as I think, as a dealing with trust property, by trustees, not for the benefit of the cestui que trust, but for their own individual profit, and for a purpose not authorized by the nature and object of the trust. And if it had no other effect, its tendency was, to throw a cloud and embarrassment about the rights of the Land. Company, or the proprietors of the Reserve, which was unnecessary and improper.

The power of a trustee exists only for the benefit of the cestui que trust; and he is not permitted, on his own account, to speculate with the trust estate, even if no actual injury is shown to result. His duties, which are fiduciary, are quite inconsistent with such a practice. Courts, especially in modern times, have taken care to guard, with great caution, the rights of those whose interests have been placed under the direction and controul of others, and have not permitted trus*52tees’ guardians> executors, &c., to place themselves in situa-where inviting opportunities are afforded for a dangerous conflict between duty and self-interest. Such persons may not taj{e advantage of the position which they occupy, to obtain personal benefit to themselves. This is a conservative principle, which may be more safely extended than relaxed in its application. Trustees, guardians and others, standing in these ’confidential relations, have all the means, both of knowledge and power, in their owe hands, which are neither known nor possessed by those for whom they act, and whose exclusive interest they are bound to protect. Every thing done by them ought to be transacted in the most open and frank manner. But, in the case before us, we have an instance, in which the real purpose of the parties is involved in mystery. We see here a deed, executed professedly in execution of a trust; and yet the consideration is put into the pockets of the trustees, without any explanation. And although the cestui que trust are not here the complaining parties, and perhaps because they know nothing of the affair ; yet such a transaction, in my judgment, is a violation of legal policy, and should not receive the sanction of this court, nor be holden to constitute a good consideration of the note in suit. Schieffdin v. Stewart, 1 Johns. Ch. R, 620. Brown v. Rickets, 4 Johns. Ch. R. 303. Ringo v. Binns, 10 Peters, 270. Michaud v. Girad, 4 Howard, 504. Bailey v. Lewis, 3 Day, 450. Nichols v. Ruggles, Id. 145. Faucett v. Whitehouse, Russ. & Mylne, 132.

New trial not to be granted.