Clark v Clark
| Jurisdiction | UK Non-devolved |
| Judgment Date | 1883 |
| Date | 1883 |
| Court | Privy Council |
Purchase of Testator's Estate by an Executor who has not proved - Suit to set aside Sale.
Held, that a sale is not to be avoided merely because when entered upon the purchaser has the power to become trustee of the property purchased, as for instance by proving the will which relates thereto, though in point of fact he never does become such. Such a purchaser is under no disabilty, and in order to avoid such sale it must be shewn that he in fact used his power in such a way as to render it inequitable that the sale should be upheld.
APPEAL from a judgment of the Supreme Court (Dec. 12, 1882) reversing a judgment of Molesworth, J. (June 2, 1882), which dismissed the bill.
The bill was filed on the 15th of August, 1881, and prayed to set aside an agreement for the purchase by the appellant of the interest of John Clark, deceased, in certain premises and the business of a tanner carried on by him in co-partnership with his sons the appellant and George Clark, and for relief incidental thereto. The facts are stated in the judgment of their Lordships.
The Supreme Court in ordering this sale to be set aside, relied chiefly on the ground that the appellant had not, at the time when he agreed to buy the partnership property and the tannery, renounced the office of executor under John Clark's will, holding that, “until a person appointed executor unmistakeably divests himself of that character, or by his solemn act puts it out of his power ever to clothe himself with it, he is as much incapacitated from purchasing from his co-executor as if he had obtained probate.”
They also held that a surviving partner is bound to lay before the executor of a deceased partner the fullest information, or, if he has not full information, explicitly to inform him that he has not; and is responsible if anything material is not made known, either purposely or through carelessness; and that, as the valuation of the partnership property contained material omissions, this was of itself a ground for holding that the purchase might be set aside.
They also held that the sale could have been successfully challenged on the ground of a misrepresentation of the value of testator's estate, made by both the vendor executor and the appellant directly to the plaintiff Jane Lawrence, and indirectly to the plaintiff John Guillan Clark.
Davey, Q.C. (J. D. Wood with him), for the appellant, contended that the appellant never having proved the testator's will, or in any manner acted in the administration of his estate was not in any fiduciary position towards the residuary legatees which rendered him incapable of purchasing the property in question. It was unnecessary to the validity of this sale, that the appellant should before he agreed to buy have formally divested himself of the character of executor under John Clark's will. No such ground was relied on in the bill. The case made by the bill was one of fraud and misrepresentation, and that had failed. The terms of the agreement were fair and were arrived at after considerable family discussion. Though the appellant had the power to become executor at any time, it was not alleged or proved that he had used such power unfairly or at all during the negotiations or in reference to his purchase.
Macnaghten, Q.C., and Gardiner, for the respondents, contended that the question was, whether this sale could, under all the circumstances, stand in a Court of Equity as against the respondents, who were infants at the time. Was this in reality as in form a sale by the executor to the appellant acting fairly by the estate and at arm's length? The appellant had not renounced probate, and threatened to prove if the sale was not made to him at a certain price, while Balderson (the executor) said to the beneficiaries if you don't let me sell at a certain price I will renounce. Balderson in fact only accepted the office of executor with his hands tied, and under an obligation to carry out a pre-arranged scheme. [SIR RICHARD COUCH:— You should have averred that he was guilty of breach of trust.] This, moreover, is a suit by infants who did not know the provisions of the partnership deed, nor of the debt due to the partnership; and they cannot be bound by acquiescence unless it is shewn that the transaction came to their knowledge with all the circumstances after they came of age.
Counsel for the appellant were not called on to reply.
[1884 July 12.] The judgment of their Lordships was delivered by
SIR ARTHUR HOBHOUSE: —
In this case a bill was filed on the 15th of August, 1881, to set aside a transaction which was entered into in the month of April, 1866. The plaintiffs, the now respondents, are the two youngest children of John Clark, viz. John Guillan Clark, who attained twenty-one in October, 1869, and Jane, the wife of William Lawrence, who attained twenty-one in January, 1867. Mrs. Lawrence sues by her next friend George Clark Allan, and her husband is a defendant. The principal defendant, the now appellant, is David Clark, the eldest son of John Clark.
In 1864 John Clark had for some time been carrying on a tannery business near Melbourne. In July, 1864, he took his two sons David and George into partnership; and in January, 1866, on the sudden and simultaneous death of John and George, David became surviving partner. The impeached transaction is the purchase of the partnership assets and of the site of the business by David.
The partnership was regulated by a deed made in April, 1865, of which the now material provisions were, that the business should be carried on upon certain land belonging to John Clark; that so...
To continue reading
Request your trial
-
Holder v Holder
...recited that he had not intermeddled with the estate. A person in that position is not debarred from purchasing the trust property: see Clark v. Clark (9 Appeal Cases 733). In September, 1960, he offered £30,000 for the farms, but the family thought this not enough. Probate was granted to t......