Steinbeck v. Bon Homme Mining Co.

Citations

• 152 F. 333
• 81 C.C.A. 441
• 1907 U.S. App. LEXIS 4277

Syllabus

<p>1. TRUSTS — CONSTRUCTIVE TRUSTS — BREACH OS' DUTY BY TRUSTEE.</p> <p>One who occupies a fiduciary relation to another in respect to business or property, and who by the use of the knowledge he obtains through that relation, or by tbe betrayal of the confidence reposed in him under it, acquires a title or interest in the subject-matter of the transaction antagonistic to that of his correlate, thereby charges his title or interest with a constructive trust for the benefit of the latter, which the cestui que trust may enforce or renounce at his option.</p> <p>[Ed. Note. — Eor cases in point, see Cent. Dig. yol. 47, Trusts, § 153.]</p> <p>2. Same.</p> <p>The test of such a trust is the fiduciary relation and a betrayal of the confidence reposed, or some breach of the duty imposed under it. One chargeable with a trust of this nature is a trustee de son’ tort, and, if he has not been guilty of wrong, he is not such trustee.</p> <p>3. Same — Exception to,Bum — Purchase at Judicial Sale.</p> <p>There is an exception to the general rule. It is that an agent or trustee may lawfully buy the property of his principal or cestui que trust at a judicial sale caused by a third party, which he has no part in procuring and over which he has no control.</p> <p>4. Same — Title op Purchaser — Estoppel.</p> <p>The title of a purchaser chargeable with a constructive trust for the benefit of his correlate by reason of their fiduciary relation is not void, I)ut voidable at the option of the cestui que trust only.</p> <p>The absence of a prompt election to avoid it is an election to afHrm.it and estops from attack. Inaction, for years after discovery of the title raises such an estoppel,</p> <p>5. Equity — Laches—Lapse op Time.</p> <p>Courts of equity act or refuse to act In analogy to the statute of limitations relating to actions at law of like character. Radical changes in the condition of the property and its speculative character induce them to apply the doctrine of laches in a short