Opinion
July 10, 1951. Rehearing Denied August 8, 1951.
Appeal from the Circuit Court for Dade County, Charles A. Carroll, J.
Cushman, Woodard Gotthardt, Miami, for appellant.
David Lemelman, Miami, for appellee.
The plaintiff-appellee filed his bill of complaint in the court below against the defendant-appellant, seeking to have himself declared to be the equitable owner of a one-half interest in certain property therein described, the legal title to which was vested in the defendant. The facts are, in substance, as follows: The plaintiff and the defendant and others were in attendance upon a Master's sale of the subject property. After the plaintiff and the defendant had each made one or two bids, the defendant requested the Master to hold up the bidding for a moment; the defendant then drew the plaintiff aside and suggested that the plaintiff drop out of the bidding and that the defendant would bid in behalf of both of them, each to have a one-half interest in the property in the event the defendant was the successful bidder — and, of course, upon the payment of one-half of the bid price by the plaintiff to the defendant. At the time of this oral agreement, the bidding for the property was at $1,300. The bidding then proceeded among the defendant and the ten or twelve other bidders present at the sale, and the defendant finally bought in the property for the sum of $3,750. Subsequently, the defendant refused to convey to plaintiff a one-half interest.
The Special Master, who heard the testimony, found that the plaintiff had sustained the allegations of his bill of complaint. The Chancellor agreed and found that, as a matter of law, such facts constituted the defendant the constructive trustee of a one-half interest in the property for the benefit of the plaintiff. He thereupon ordered and decreed that the defendant convey to plaintiff an undivided one-half interest in the property and, further, that the plaintiff was entitled to one-half of the net profits derived from the property. The defendant has appealed from such final decree.
The principal question here presented is whether or not the agreement in the instant case is void as being contrary to public policy. We do not think so. There were ten or twelve other bidders. The final bid price was almost three times as much as it was at the time the plaintiff agreed to withdraw from the bidding, and it does not appear that the property was sold at less than its fair value. We think, then, that the agreement in the instant case is not obnoxious under the rule stated in 31 Am.Jur., Judicial Sales, Section 95, page 449, that: "* * * agreements to unite in bidding at a judicial sale are not per se void, but will be condemned only where they are of such a character as to deprive the sale of the benefits of competitive bidding, or in other words, where the agreement or combination has for its object the suppression and stifling of fair competition at the sale with the purpose of acquiring the property at less than its fair value." See also Raper v. Thorn, 202 Okla. 235, 211 P.2d 1007, 14 A.L.R.2d 1260; Kearney v. Taylor, 15 How. 494, 15 U.S. 494, 14 L.Ed. 787. Of course, if the plaintiff and the defendant had been the only persons bidding on this property, our holding would be otherwise, since the bidding would have been completely stifled and would obviously have stopped at the $1,300 level.
Nor did the Chancellor err in holding that the evidence established a constructive trust. The rule is well stated in McCaleb v. McKinley, 80 Okla. 38, 194 P. 105, 106, cited in Raper v. Thorn, supra: "* * * although a simple avowal of acquisition for the use of another, whether made contemporaneous with or subsequent to the fact will not of itself support an allegation of trust; yet it is equally well settled that if one be induced to confide in the promise of another that he will hold in trust, or that he will so purchase for one or both, and is thus led to do what otherwise he would have forborne or to forbear what he contemplated to do in the acquisition of an estate whereby the promisor becomes the holder of the legal title, an attempted denial of the confidence is such a fraud as will operate to convert the purchaser into a trustee ex maleficio." See also Restatement of the Law, Restitution, Section 194, page 795, and Comment d on Subsection (2).
The other questions presented have been carefully considered, and we find no reversible error.
For the reasons stated, the final decree appealed from should be and it is hereby
Affirmed.
SEBRING, C.J., TERRELL, J., and PARKS, Associate Justice, concur.