The rule governs all contracts giving the trustee any interest in the trust property.

Sale by a trustee for purchase to his cestui' que-trusts.

Gifts to trustee by cestui-que-trust of the trust property.

Agent pur-chasing his principal's lands See above, pp. 758 - 761, 766 - 769; Morse v. Royal, 12 Ves. 355; Baker v. Read, 18 Beav. 398; Smedley v. Varley, 23 Beav. 358.

Above, p. 768, and n. (a), (y) Turnbull v. Duval, 1902, A. C. 429.

(z) Below, p. 882. (a) Above, p. 877.

Here it may be mentioned that, where a partnership business is so managed by one partner that he alone is directly informed as to the extent and value of the assets of the firm, a purchase by him of any other partner's share in the partnership property is a contract uberrima fldei (f) and is voidable for mere non-disclosure by him of any fact material to the value of the property sold. This rule arises out of the duty of every partner to disclose to the others all information possessed by him concerning the assets and business of the firm (g). The case is analogous to that of a trustee purchasing his cestui-que-trusfs interest in the trust property: but it is not the same. Thus it is thought that, where a trustee has bought the trust property from his cestui-que-trust, the sale would be voidable for non-disclosure as against a subsequent purchaser from the trustee with notice that the parties to the original sale stood in the relation of trustee and cestui-que-trust (h). Partners, however, are not under any general equitable disability with regard to the purchase of each other's shares in the partnership; and it is conceived that they must be presumed to be all equally well informed concerning the assets of the firm. It is thought, therefore, that a sale by one partner to another of his share in the partnership would not be voidable as against a sub-purchaser for value, unless the latter had notice, not merely of the partnership relation, but also of the fact that the vendor partner occupied such a position in the management of the partnership business as placed him in sole possession or direct control of the information relating to the extent and value of the assets of the firm.

Purchase by managing partner of another partner's share.

Purchase by-trustee from

(b) Above, p. 760, and notes

(x). (y), (z)

(c) Above, p. 875.

(d) See Hardwicke v. Vernon, 4 Ves. 411; Charter v. Trevelyan, 11 Cl. & Fin. 714, 732 (it is conceived that the statement there made, that an agent for sale secretly purchasing himself can uphold the transaction by proving that full value was given, is erroneous; 1 Dart, V. & P. 40, n. (i)); Re Bloye's Trusts, 1 Mac.

& G. 488, 494; S. C, nom. Lewis v. Hillman, 3 H. L. C. 607, 628 - 630; Dunne v. English, L. R. 18

Eq. 524; McPherson v. Watt, 3 App. Cas. 254, 263, 264.

(e) See the two previous notes, and cases as to purchase cited below, p. 883, n. (k).

(f) Above, pp. 684, 724.

(g) Maddeford v. Austwick, 1 Sim. 89, 93; Law v. Law, 19 5, 1 Ch. 140. cestui-que-trust voidable against sub-purchaser -with notice of the parties' relation.

Reduced to its lowest terms, the rule governing the third class of cases above referred to (i) may perhaps be stated in this way: - Where a man's title to sell or buy some particular piece of land is derived, not from his own beneficial ownership of the land or the money to be employed in the purchase, but from an authority in that behalf given to him either by the act of the beneficial owner of the land or money or by statute on such owner's behalf, then he cannot well exercise the authority by selling to or buying from himself, either directly or indirectly; unless the instrument or statute conferring the authority otherwise provide (k). And if such instrument or statute allow of no exception in his favour, and in the transaction in which he purports to exercise such an authority to sell or buy he be himself the purchaser or the vendor, either directly or through the mediation of an agent, trustee or nominee for himself, or even (in the case of sale) by sub-purchase from a stranger (/), the sale or purchase is voidable in equity at the instance of the beneficial owner of the land sold or money paid in purchase (m). The transaction is, moreover, so voidable on the mere proof that the vendor or purchaser was acting in exercise of such an authority and in effect sold to or bought from himself; and it is immaterial whether the terms of the bargain so purported to be made were otherwise fair or were actually advantageous to the parties who seek to set it aside (n).

Rule where one party to the sale is executing an authority.

(A) It is conceived that this case is exactly parallel to that of a purchase by a solicitor from his client, and that, as the onus of upholding the transaction lies on the trustee after mere proof of the relation between the parties, a purchaser from the trustee with notice of that relation is subject to the same burthen; see above, pp. 760, n. (a), S79; Spencer v. Topham, 22 Beav. 573. It is submitted that the suggestion in Sug. V. & P. 695, that the subsequent purchaser must also have notice of the circumstances rendering the sale voidable, cannot be supported.

(i) Above, p. 875.

With regard to the principle on which this rule is founded, we must remark first, that the person invested with such an authority may either stand in a fiduciary relation to the beneficial owner of the property or he may not. In the former case the grounds which may be alleged for the rule are obvious: namely, that the trustee, having every opportunity to find out the true value of the property and being bound to exercise the authority to the best advantage of the beneficial owner, shall not place himself in a position where his interest is in conflict with his duty (o); also, that a trustee shall make no profit by his trust. These reasons are certainly applicable, for instance, in the ease of a trustee lor sale of Land, and would alone be sufficient to prohibit him from buying the property himself. The rule extends, however, to eases in which the authority is conferred for the sole benefit of the person to whom it is given (p). Thus, we have seen (q) that it applies to a mortgagee selling the mortgaged property under the power of sale expressly contained or implied by statute in the mortgage deed; notwithstanding that in exercising such a power, a mortgagee is held not to be a trustee f'or the mortgagor, nor to be bound to sell to the mortgagor's best advantage (r). In this case, therefore, we are driven to find other grounds for the rule (s); and it appears to rest at bottom on the principle that an authority given must bo strictly pursued (l). Where a man is invested with an authority to sell or buy, the mandate is that he shall enter into a contract of sale or purchase; that is, a transaction implying a bargain between the person authorised and some other person acting independently of him (u), the result of which is, that each incurs obligations to the other (x). Now, at law, a man cannot make a contract with himself, either alone or jointly with others; if he purport to do so, the transaction is absolutely void as regards him (y). It is impossible, therefore, for a man to sell to or purchase from himself at law. But at law he may well contract with any other person than himself; and if that other be bound in equity, under trust, to give him the benefit of the transaction, the trust is a matter of which the common law takes no cognizance (z). In equity, however, the substance of the transaction is regarded; and if a man exercising an authority to sell or purchase in effect sell to or buy from himself, the transaction is not considered to be a sate at all, and is therefore an improper exercise of the authority (a). And for this reason the sale so purported to be made is voidable in equity at the instance of those by or on whose behalf the authority was conferred (b).