Decided June, 1890.
An executor may buy at a discount, for the benefit of the estate, the claims of creditors or legatees.
ASSUMPSIT, to recover interest on a legacy given the plaintiff by a will, of which the defendant is executor and residuary legatee. Verdict for the defendant. The testator died in 1881. In 1887 the defendant paid the face of the legacy to the plaintiff, who thereupon assigned it to the defendant, and executed a release under seal of all claims under the will. The plaintiff moved that a verdict be ordered in his favor, on the ground that the defendant, being executor and residuary legatee, had no right or power to buy, and could not lawfully buy, the plaintiff's legacy, or settle with him for less than the full amount of the legacy and interest. The motion was denied, and the plaintiff excepted.
J. A. Edgerly and Worcester Gafney, for the plaintiff.
F. B. Osgood and Ossian Ray, for the defendant.
An executor is a trustee for all interested in the estate, as well for creditors as for legatees. Wheeler v. Perry, 18 N.H. 307, 312. A purchase by him of the trust property, at his own sale, is voidable at the election of any one whose interest is affected, without inquiry into the good faith and fairness of the transaction. He cannot act in the double capacity of seller and buyer. Pearson v. Railroad, 62 N.H. 537, 541-544, and cases cited. But this doctrine does not apply to a trustee's dealings directly with the person for whom he holds the property. "He may purchase the property of such person; and if the whole transaction and the circumstances under which it took place were fair and open, and no advantage was taken by him of the cestui que trust, by concealment, misrepresentation, or omitting to state any important fact, and no undue influence was exercised, and the cestui que trust understood what he was doing, and the effect of it, such a contract will not be set aside because of the relations of the parties." Brown v. Cowell, 116 Mass. 461, 465, and authorities cited. An executor may buy at a discount the claims of creditors or legatees, not for his own individual benefit, but for the benefit of the estate. Judge of Probate v. Adams, 49 N.H. 150. Such a purchase, fairly made, is valid and binding upon the seller. The circumstance that the executor is interested in the estate, as residuary legatee or otherwise, is immaterial, except as evidence on the question of the fairness of the transaction.
CLARK, J., did not sit: the others concurred.