D. B. WARE, APPELLANT,
v.
CLARENCE M. BUSCH, AS TRUSTEE, APPELLEE
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This case concerns whether a trustee can convey property in his individual capacity when he is also a beneficiary of the trust. The court held that a trustee cannot be both the trustee and beneficiary of the same interest, creating a doubt in title that justifies a vendee's refusal to accept such a conveyance.
No, a purchaser cannot be compelled to accept a title if the validity of the conveyance is doubtful. The court held that the same person cannot be both trustee and beneficiary of the same interest, and this doubt justified Ware's refusal to accept the conveyance without Busch joining in his individual capacity.
“The same person cannot be at the same time trustee and beneficiary of the same identical interest.”
Establishes the core legal principle regarding the conflict of interest.
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Join FLexlaw to unlock all legal intelligenceN. F. Stone contracted to sell land to D. B. Ware. Stone was purchasing the same land from Clarence M. Busch, as trustee. Ware discovered the title wa…
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One N. F. Stone contracted to convey to appellant, D. B. Ware, certain lands in Glades County by good and sufficient deed. N. F. Stone was the vendee under an executory contract of purchase of the same lands from the appellee, Clarence M. Busch, as trustee of an express trust. The record title to the lands was in Clarence M. Busch, as trustee. Prior to July 20, 1921, Clarence M. Busch owned 51.675 per cent, undivided interest in fee in said lands, and his wife owned 2.5 per cent, undivided interest, and three other persons owned undivided interests in fee in other varying proportions, the five together owning the entire fee. On July 20th, 1921, these five owners conveyed the land to Clarence M. Busch, as trustee for himself and the others, for the more convenient sale- and disposition of the property. The form of the conveyance is not material here, as it is not in question, but the effect of the conveyance upon the separate interest of Clarence M. Busch is the point in controversy.
When the time came for the conveyance to be made, appellant, D. B. Ware, vendee under the contract of purchase from Stone, having ascertained the record title to be in Busch, as trustee as above stated, put Stone on notice that he would not accept a conveyance as being in accordance with the contract unless Clarence M. Busch executed a con*155veyance in which he, Busch, should, join in his private and individual capacity, joined by his wife, but agreed to accept conveyance through Busch, as trustee, for the remaining interests, Ware’s contention was that Busch could not convey as trustee for himself, claiming that he could not be trustee and cestui que trust of the same interest at the same time. Busch declined to execute a conveyance in his private and individual capacity covering his separate interest in the property, insisting on the legal sufficiency of a conveyance from himself as trustee to convey the entire fee.
When the parties had arrived at this impasse, Ware refused to make the remaining payments called for in the contract (he had already paid $5,500.00 on account), Stone assigned his rights under the contract to Busch, as trustee, and Busch proceeded by the present action in equity to foreclose the contract. Ware defended, denying any breach of the contract on his part, and prayed affirmative relief against Busch by way of recovery of the payment which he had made, which, however, had been made to Stone and not to Busch. The chancellor found the equities to be with the complainant, Clarence M. Busch, as trustee, and directed foreclosure, which was had, and the sale under foreclosure was confirmed. Ware appeals from the final decree of foreclosure.
The only question which it is necessary to determine in order to dispose of this controversy is whether, under the circumstances stated, an offer by Stone, the vendor, to obtain a conveyance from Clarence M. Busch, as trustee, but without a joinder by Busch in his private and individual capacity and joined therein by his wife, was a sufficient compliance with the requirement of the contract for a conveyance by a “good and sufficient deed.”
The same person cannot be at the same time trustee and beneficiary of the same identical interest. Axtell v. Coon, *15682 Fla. 158, 89 So. 419; Wiley v. Hoggson, 90 Fla. 343, 106 So. 408; Reed v. Barry, 93 Fla. 849, 112 So. 846; Walker v. Close, 98 Fla. 1103, 125 So. 521; Montgomery v. Carlton,. 99 Fla. 152, 126 So. 135; Huggins v. Whitaker, 100 Fla. 600, 129 So. 857.
This rule is subject to some exceptions, and under some circumstances one may be trustee for himself and others. See 39 Cyc. Trusts, page 248, note 40. But the situation presented by the facts in the present case does not come within the exception. It would be useless here to attempt to distinguish between the rule and the exception, and to draw fine distinctions, as it is hardly likely that a similar situation will arise again. No case has been cited to us warranting the refusal of appellee to convey in his individual capacity. Certainly no change resulted either in the estate created, or in the status of Busch as a legal personality, by the conveyance of his undivided interest in real estate from himself as an individual, to himself as a trustee, which justified him in refusing to join in conveyance in his individual capacity. In any event there was such a doubt as to his capacity to convey as trustee, as warranted the vendee in declining to accept conveyance unless he joined in it as an individual.
“A purchaser from an executor, administrator, trustee, donee of a power, etc., or from one claiming under or through a sale and conveyiance from them, cannot be compelled to accept the title if the right of such parties, to make the sale or the validity of the sale and conveyance is doubtful. 39 Cyc., Vendor and Purchaser, Page 1476.”
The decree is reversed, with instructions to dismiss the bill of complaint. Appellant Ware cannot claim affirmative relief as against Busch for the recovery of payments made by him under the contract, as it is not claimed that Busch *157received any part thereof. His remedy for recovery of the payments if any is against Stone, who is not a party to this suit.
Reversed with directions.
Davis, C. J., and Whitfield and Buford, J. J., concur.
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Resnick v. Sander J. Goldman, 133 So. 2d 770 (Fla. 3d DCA 1961)…had no way of knowing whether, according to the provisions thereof, the deed from the trustee would be valid or invalid. In those circumstances the uncertainty as to the terms of the trust determined the un-marketability of the title. Ware v. Busch, 108 Fla. 153, 146 So. 197, 198; Adams v. Whittle, 101 Fla. 705, 135 So. 152, 155. See Patton on Land Titles (2d Ed. 1957), § 417; 33 Fla.Jur., Vendor & Purchaser, §§ 62, 70-71. The damages allowed were proper under the proposition that for such breach of contra…
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Reuben B. Gryzmish v. Anna Krim a single woman, 126 Fla. 191 (Fla. 1936)…total of $1,933.75, and a grand total of $4670.00. •So, even if the defendant counterclaimant could have recovered at all from these appellants she could have recovered no more than the total amount of payments to the appellants. See Ware v. Busch, 108 Fla. 153, 146 Sou. 197. The defendant counterclaimant also based her right of recovery on the claim that the lots had been damaged after the same were purchased by her as the result of the digging of a canal on adjoining property, as hereinbefore set forth.…
Authorities Cited
- Reid v. Barry, 93 Fla. 849 (Fla. 1927)
- Walker v. Close, 98 Fla. 1103 (Fla. 1929)
- Ezra P. Axtell v. Coons, 82 Fla. 158 (Fla. 1921)
- Willey v. W. J. Hoggson Corp., 90 Fla. 343 (Fla. 1925)
- Hattie O. Montgomery v. Carlton, 99 Fla. 152 (Fla. 1930)
- Huggins v. Whitaker, 100 Fla. 600 (Fla. 1930)