Persons in a fiduciary position as regards the exercise of an authority to sell or purchase.

(g) Stat. 53 & 54 Vict. c. 69, s. 12, passed 18th Aug. 1890.

(h) Farwell, J., Boyce v. Ed-brooke, 1903, 1 Ch. 836, 843 sq.; dissenting from the opinion expressed by Page Wood, V.-C, in Bevan v. Habgood, 1 J. & H. 222, 229. And see A.-G. v. Clarendon, 17 Ves. 491, 500. (i) Above, p. 888.

Principal and agent.

Directors of a company.

Liquidator.

Promoters.

(k) Oliver v. Court, 8 Price, 127; above, p. 881, and n. (d).

{l) See above, pp. 880, 881.

(m) Aberdeen Ry. Co. v. Blaikie, 1 Macq. 461.

(n) Burland v. Earle, 1902, A. C. 83, 98, 99.

(o) Silkstone and Haigh Moor Coal Co. v. Edey, 1900, 1 Ch. 167.

(p) Erlanger v. New Sombrero Phosphate Co., 3 App. Cas. 1218, 1229, 1236, 1260; Re Cape Breton Co., 29 Ch. D. 795, 811; Gluck-stein v. Barnes, 1900, A. C. 240; Re Lady Forrest, etc., Ld., 1901, 1 Ch. 582, 589, 590.

(q) Gover's case, 1 Ch. D. 182, 187.

As already mentioned (s), in every instance in which a person exercising an authority to sell or purchase stands in a fiduciary relation to those by whom or on whose behalf the authority was conferred, the rule, that he cannot sell to or buy from himself, may be justified on the principle that he shall not be allowed to place his own interest in conflict with his duty. Even in these cases, however, the rule appears to rest, at bottom, on the ground that a sale or purchase by the authorised person to or from himself is no contract at all, and is therefore no proper exercise of the authority. Expressed in this form, the rule is equally applicable where the person exercising the authority does not stand in a fiduciary relation to those by whom or on whose behalf the authority was conferred (t). Thus it governs, not only the case of a mortgagee exercising his powers of sale (u), but every instance in which a person entitled to a charge on any property is invested with a power or authority to sell the property in order to realise the amount of money charged (x). And the reason of the rule appears to be equally applicable to the exercise of any authority to purchase land.

Application of the rule where the party exercising the authority is not in a fiduciary position.

The rule in question has two corollaries. First, that as the person invested with an authority to sell or purchase cannot well exercise it by selling to or purchasing from himself, so also he cannot well exercise it in favour of any agent employed by him to conduct or act in the sale; for the agent has the same duties as the principal in the matter of the sale (y), and their personality is regarded as identical (z). Secondly, that where a person authorised to sell or purchase land contracts with an independent buyer or seller, through whom he has himself an interest in the sale opposed to the interest of his principal, then, if the buyer or seller have notice of this fact and of the consequent conflict of interest and duty, the onus lies on him of proving the fairness of the transaction; and the sale is voidable, at the option of those by or on whose behalf the authority was conferred, in case of his failure to discharge the burthen of proof (a). For example, the solicitor or auctioneer employed to conduct a sale of land by a person selling it under a trust for or power of sale cannot become the purchaser thereof (b). And where a building society sells land in exercise of a mortgagee's power of sale, and the secretary or a member of the committee of the society has taken part in conducting the sale, he cannot purchase the land under an exercise of the power (c). The first corollary is not, however, applicable unless the purchaser and the person exercising the authority stand at the time of the sale in the relation of agent and principal. Thus, if a solicitor or other agent be employed in a proposed sale by a person exercising an authority to sell, and the sale prove to be abortive, and the relation of principal and agent be dissolved, and some time afterwards the former agent purchase the property, the sale is not void according to the rule in question, though it is voidable in case the purchaser took any unfair advantage of his former position as agent and the onus lies on him of proving that he did not (d). So where one of several mortgagees, who acted as their solicitor, promoted a company to buy the mortgaged property and became a substantial shareholder therein, and the company then bought the property from the mortgagees selling under their power of sale, it was held that the sale, being made to the company, a distinct and independent legal personality, was not void as being a sale to the solicitor mortgagee himself. It was however considered that, in view of the conflict between interest and duty involved in the solicitor's position of vendor and shareholder in the purchasing company, the company having notice thereof were charged with the burthen of upholding the sale, as against the mortgagors seeking to redeem; though in the circumstances the sale was upheld (e). This illustrates the second corollary. In like manner, where a solicitor authorised by one of his clients to sell the client's land sold it to another of his clients, for whom he acted in the matter of the purchase and the purchaser had notice of the solicitor's position, it was held that the contract was not specifically enforceable at the purchaser's suit unless he could prove that the vendor was at no disadvantage and the transaction was fair (f).

Person invested with an authority to sell cannot

(r) See Lagunas Nitrate Co. v. Lagunas Syndicate, 1899, 2 Ch. 392; and cases cited in note (p), above.

(s) Above, pp. 883, 884.

(t) Above, pp. 883 - 885.

(u) Above, pp. 345, 884.

(x) Re Bloye's Trusts, 1 Mac. & G. 488; S. C, nom. Lewis v. Hill-man, 3 H. L. C. 607, 628 - 630.

15(2)

Well exercise it in favour of his own agent in the matter.