Wills, Trusts, and Estates, Pages 596–597

Hartman v. Hartle

Court of Chancery of New Jersey, 1923

Facts:

Decedent died. In her will, she named her two sons-in-law as executors and directed them to sell her real estate and divide it equally among her children.

The executors then sold a farm that was part of the land to one of the children for $3,900, who actually bought it for another of the children, Mrs. Dieker, who was the wife of one of the executors. Two months later, she sold it for $5,500.

After the executors finished selling all the land and distributing the money, the complainant expressed her dissatisfaction and filed her bill in this cause charging the sale to have been improperly and fraudulently made by the executors to Mrs. Dieker. She also said that the children had agreed to buy the farm themselves for all their benefits.

These allegations were shown to be false, so the complainant then alleged that selling to the wife of one of the executors without authority to do so from the court was illegal and void, so the land should be resold or Mrs. Dieker should pay the complainant her one-fifth share of the $1,600 profits she made reselling the farm.

Issue:

Is it improper for a trustee to sell property to his wife?

Rule:

A trustee cannot purchase from himself at his own sale without an order of the court, and neither can his wife.

Reasoning:

Since Mrs. Dieker already sold the land to an innocent purchaser, it cannot be resold. Mrs. Dieker and the executors should be held to account for the complainant's one-fifth share of the profits made.

Holding:

This was an improper sale, so Mrs. Dieker must give the complainant one-fifth of the profit she made off the resale of the land.

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