chaser of the trust property, such act is voidable at the instance of the cestui que trust. The rule is adopted from wise considerations of public policy, with a view to remove from transactions by trust agents the danger attendant upon the existence of personal interests inconsistent with trust duties. In Staats v. Bergen, 17 N. J. Eq. 554, 559, the learned Chief Justice, speaking for the Court of Errors and Appeals, said: "I think, upon correct principle, a trustee in no case, nor in any crisis, can become the purchaser of property, when the fact of his making such purchase has a tendency to promote his own interest, at the expense of his cestui que trust. This, it is conceived, is the groundwork of the decisions in England and in this country."

The rule has been uniformly applied in this state to purchases by a trustee at public sales, and also at judicial sales to the same extent as to sales made by the trustee, in cases where the purchaser has a duty to perform in reference to the sale inconsistent with the character of a purchaser. Staats v. Bergen, supra; Marshall v. Carson, 38 N. J. Eq. 250, 48 Am. Rep. 319; Romaine v. Hendrickson's Ex'r, 27 N. J. Eq. 162; Creveling v. Fritts, 34 N. J. Eq. 134; Porter v. Woodruff, 36 N. J. Eq. 174; Deegan v. Capner, 44 N. J. Eq. 339, 15 Atl. 819.

A director of a corporation is not a trustee in the strict sense. The title to the corporate property is in the corporation. But the duties which a director is required to perform for the corporation which he represents are in many respects similar to the duties of a trustee, and his relation to the corporation is, in general, essentially that of a trustee. He is not, in consequence, allowed that freedom to contract with his corporation which a stranger could enjoy. In Stewart v. Lehigh Valley R. R. Co., 38 N. J. Law, 522, it is shown that his trust relationship to his corporation is such as to render his contracts made with it voidable to the extent that such contracts cannot be enforced, as express contracts, against the will of the corporation. He may loan money to his corporation or perform personal service for his corporation and the obligation for the repayment of the money loaned, or for the payment of reasonable compensation for the service performed, will arise by operation of law, but cannot exist by force of the express contract. Gardner v. Butler, 30 N. J. Eq. 702, 721.

In the present case defendant Marr, while a director, loaned to his corporation money which was at that time needed by the corporation, and which was used by it in its regular business. After repeated efforts upon the part of defendant Marr to induce the corporation to repay the money due to him, he was compelled to bring suit and to issue execution on the judgment procured and make sale of the property of the corporation. It is now contended upon the part of com

plainant that the trust relationship which existed between the corporation and defendant Marr, as its president and one of its directors, denied to him the right to become a purchaser at the sale made under his execution.

I have not been able to reach the conclusion that the principles already stated can be properly extended to render such a sale invalid at the mere option of the corporation or its stockholders. Conditions may easily exist to justify a decree setting aside such a sale, for the purchase of the property of a corporation by its director, even under the circumstances named, may appropriately subject the transaction to the closest scrutiny in all its aspects as to fairness and good faith; but I entertain the view that something more is necessary to set aside such a sale than the mere exercise of a purpose to do so upon the part of the corporation or its stockholders. To deny to the judgment creditor the privilege to buy at such a sale is to deny to him a substantial right which may be essential to the effective enforcement of his judgment. His attitude of hostility to his corporation has, in such a case, become a necessity which has been brought about and made necessary by the wrongful conduct of the corporation. I find it difficult to recognize the undoubted right of a director to occupy the attitude of hostility to his corporation which arises in the enforcement of his claim by an action at law to compel payment, and to deny to him the right to enforce the judgment procured with all the privileges which are incident to the judgment. In the exercise of that attitude of hostility which is made necessary for the enforcement of his just claim against his corporation, it would seem that he should be entitled to the full privileges of a stranger, not only in the prosecution of his action, but as well in the enforcement of his judgment. If the evidence discloses that he has in fact exercised no other privileges, I think the sale should stand. It is urged by complainant that he should first resign, and thus render himself free to act. Such a course would ordinarily be empty and fruitless, and equally subject to judicial investigation. When the facts disclose that he has not used his office to his own advantage, I cannot recognize the necessity or propriety of the application of a principle which operates, in such a case, to render the sale invalid at the mere instance of the corporation. In treating such sales as voidable, I think they should be so treated only to the extent that other judicial sales are so treated. If an inadequate amount has been bid, the law court from which the execution issued can afford an adequate remedy. Palladino v. Hilpret (N. J. Ch.) 65 Atl. 721. If unfair advantage has arisen attributable to a trust relationship, this court can appropriately grant relief.

I have found but little assistance in the

adjudicated cases upon the subject. The case of Twin-Lick Oil Co. v. Marbury, 91 U. S. 587, 23 L. Ed. 328, which is frequently cited in support of the right of the director creditor to purchase, goes no further than to support the right in the case of a sale made by the trustee of a mortgage deed given by the corporation to secure a debt due to the director; and the suggestion is there made that the trustee making the sale is appointed by the corporation for the purpose and to that extent represents the corporation. Saltmarsh v. Spaulding, 147 Mass. 224, 17 N. E. 316, is to the same effect as Twin-Lick Oil Co. v. Marbury, supra. The case of Lucas v. Friant, 111 Mich. 426, 436, 69 N. W. 735, expressly holds that a director who is a judgment creditor may buy at the execution sale; but the decision is based on Twin-Lick Oil Co. v. Marbury and Saltmarsh v. Spaulding, supra, and other cases which do not fully support the text. The case of Hoyle v. Plattsburgh & Montreal Ry. Co., 54 N. Y. 315, 329, 13 Am. Rep. 595, after holding that a director, who is not a judgment creditor, cannot purchase the property of his corporation at a judicial sale, proceeds as follows:

"Vilas, however, was not only a director. He was also the plaintiff in a judgment against the railroad company, and had a clear right to sell, upon execution on his judgment, the personal property of the corporation which was liable to sale on execution. Whether in this right he might not, at a sale under his own or under prior executions, purchase in protection of his own right as judgment creditor, and hold property so purchased absolutely against the company, need not be determined in this case."

The subsequent case of Preston v. Loughran, 58 Hun (N. Y.) 210, 214, 12 N. Y. Supp. 313, 316, refers to Hoyle v. Plattsburg & Montreal Ry. Co., supra, and proceeds as follows:

"He [the director of a corporation] is not absolutely excluded from the right of dealing with it. He can loan money to it and become its creditor, and he can receive by the act of the corporation security for his debt. If he has a mortgage security, he may foreclose the mortgage, and it follows, almost of necessity, that, if he can foreclose, he may protect himself by bidding at the sale. Of course, if he takes any undue advantage, another question arises. But when his acts are fair and open they are not in valid."

In Hallan v. Indianola Hotel Company, 56 Iowa, 178, 9 N. W. 111, the same view is taken, and in Re Iron Clay Brick Mfg. Company, 19 Ont. 113, 33 Am. & Eng. Corp. Cas. 277, the contrary view is adopted.

I think that both reason and authority must be said to support the view already stated that a director in the enforcement of his execution against his corporation is privileged to purchase at the execution sale, and

that the sale will not be set aside because of his trust relationship arising from the fact that he is a director, unless it appears that some undue advantage has been taken by him by reason of the position which he occupies.

It is urged in behalf of complainant that the conduct of defendant Marr was not fair and open, in that he should have given notice of the sale to all the stockholders. I am unable to concur in that view. From the evidence adduced at the hearing, I am satisfied that defendant Marr must be regarded in this case as the victim of the corporation rather than as one who has received undue advantage. The corporation had but few stockholders, and was essentially the enterprise of a brother of defendant Marr, now deceased, whose stock complainant now holds by inheritance. Defendant Marr originally advanced a small amount of money to the corporation, and also became a stockholder at the instance of and as a favor to his brother. As more money was needed by the corporation from time to time, defendant Marr was induced to make further advances, because no other person identified with the enterprise appeared to be able to do so and because of his desire to help the enterprise along on account of his brother's active interest in it. The advances thus made finally aggregated over $10,000, and over $2,000 had in the meantime, in like manner, been advanced by the mother of complainant Marr. After the death of his brother defendant Marr, at a meeting of the stockholders in December, 1897, stated that he must have the money due to him, and that he would proceed unless something was done. He also urged the stockholders to contribute, and also offered to turn over his claim to any one who would supply the money. Again, at a meeting of the stockholders in February, 1898, he urged payment, and stated that he would proceed to collect unless paid. At one of these meetings a committee was appointed to make public sale of the entire property of the company. The sale was undertaken by a Philadelphia auction house in April, 1898, and no bids were received. Mrs. Marr had in the meantime brought suit for the money due to her, and recovered judgment for $2,088.15. In October, 1898, defendant Marr brought suit for the money due to him and recovered judgment for $10,318.30, and in December, 1898, made sale of the property in question under an execution issued on that judgment. The judgment recovered by his brother's wife had in the meantime been assigned to him. While no notice of the sale was given to the several stockholders other than the statutory notice, I am entirely satisfied that it would have been utterly futile to have given such notice. Dedendant Marr had earnestly tried to get the stockholders to interest themselves in raising the money due to him, and had found it impossible. It is entirely clear to me that, had each stockholder been personal

ly notified of the day of sale, no attention whatever would have been given to the matter by any of them. Defendant Marr did not want the property. He was judge of a court in Pennsylvania and did not wish to be burdened with the ownership of a seashore hotel property, and especially one which had been found from the beginning to afford insufficient revenues to maintain it. His instructions to the attorney whom he employed to make the sale were to let the property be sold for less than was due on his judgments if a purchaser could be found. I am satisfied that the only reason that all parties in interest were not especially notified of the sale was because it was useless to do so. The property was purchased by defendant Marr at the sale because, and only because, no other purchaser could be found. was made except that of defendant Marr. Since the purchase defendant Marr has found it necessary to continue to add to the investment in the hope of making the property remunerative, and at this time it stands him in about $40,000. I am unable to find any circumstance from which I can conclude that defendant Marr has not performed his full duty to the corporation.

No bid

Touching the value of the property purchased, I think that, in the proper hands, a purchaser could have probably been found for more than the amount of the judgments of defendant Marr. Witnesses at the hearing believe that the property at the date of the sale, was worth at least $25,000. At the sale attempted in Philadelphia $18,000 was fixed as the price at which it should be sold. There was due to defendant Marr at the sale about $12,500. His bid was but $3,850. The small amount was bid because there were no other bidders, and it was sought to save sheriff's commissions. The bid was, in effect, from the standpoint of defendant Marr, the amount of the judgments, as the corporation had no other assets. If the property was in fact worth $25,000 at the date of the sale, it is entirely clear that neither defendant Marr or any one else connected with the corporation had any such idea of its value. It is not improbable that subsequent developments have given an enhanced idea of values in the retrospect. But, as already stated, I do not conceive it to be the duty of this court to disturb this sale, under the circumstances of this case, on the ground of inadequacy of price.

The bill is filed at this late date-seven years after the sale-by the heir of the brother of defendant Marr on reaching his majority. At the time the transactions here occurred complainant had a guardian who attended the stockholders' meetings referred to at which proceedings were threatened to enforce the Marr claim. While I am not inclined to deny relief upon the ground of laches, the evidence clearly shows that the guardian of complainant had ample notice to apprise him that the Marr claim would

Whether a court will strike out a bill on the allegation of laches is a matter of discretion, and the court will generally permit the proving of the facts excusing laches and determine whether such facts excuse.

3. GUARDIAN AND WARD-SUIT FOR ACCOUNTING JURISDICTION.

A suit by the representative of a deceased ward against the representative of the deceased guardian for an accounting is not properly cognizable in the orphans' court, and is within the jurisdiction of a court of equity.

[Ed. Note.-For cases in point, see Cent. Dig. vol. 25, Guardian and Ward, §§ 477, 479.] 4. SAME RELATIONS- TERMINATION-RUNNING OF LIMITATIONS.

A guardian receiving property of a ward becomes a trustee for the ward until a proper accounting is had, and the fact that the ward acquires the right to call for an accounting at a particular time does not fix such time as a period from which either the statute of limitations or equitable principles in analogy thereto apply.

[Ed. Note.-For cases in point, see Cent. Dig. vol. 25, Guardian and Ward, §§ 483, 491.] 5. LIMITATION OF ACTIONS-STATUTES-EQUITABLE SUIT FOR ACCOUNTING.

Gen. St. p. 5, gives a right of action for an account against a guardian, and page 1974, § 8, provides that an action of account shall be commenced within six years next after the cause of action shall have accrued. Held, that a suit in equity to compel a guardian to account is not barred by the statute. The fact that a court of law acquired jurisdiction by the statute did not apply to the jurisdiction of equity previously existing.

6. SAME.

A ward attaining her majority in 1883 died in 1885, before the guardian had rendered an account. The guardian died in 1905. In 1906 an administrator of the deceased ward was appointed, who, in the same year, sued the representative of the deceased guardian for an accounting. Held, that the suit was not barred by limitations, though the cause of action accrued on the ward's death, since limitations did not begin to run until the appointment of her representative.

[Ed. Note. For cases in point, see Cent. Dig. vol. 33, Limitation of Actions, § 427.]

Suit by Richard G. Stevenson, administrator of Mary Markley, deceased, against Paul H. Markley and another, executors of Mary Josephine Markley, deceased. On motion to strike out, bill denied.

F. D. Weaver, for complainant. H. M. Cooper and H. A. Drake, for defendants.

GARRISON, V. C. (orally). This is a hearing upon a motion made by the defendants for leave to withdraw their answer to the original bill, and to move to strike out the bill for want of equity, and various parts of the bill for specific reasons stated.

Upon a hearing had on the 10th day of December, 1906, it appeared to the court that the face of the bill disclosed a cause of action so old that, in default of explanation, the court would be inclined to dismiss the same for laches if the defendants had so moved the court. The court, not finding among the reasons or objections of the defendants any one based upon laches, and the complainant moving for leave to amend by setting up facts explaining the laches, the latter motion was granted, and an order of the 10th of December, 1906, was entered. That order, in so far as it is now material, provided that the complainant "have leave to amend his bill by inserting therein such charges as he may be advised or able to do concerning the reasons for the delay in the bringing of his suit." And it was further therein ordered that all other proceedings should remain in statu quo. Thereafter the complainant filed amendments, which he has numbered 14a and 14b, and upon the amended bill the defendants have now moved, under rule 213, to strike out this bill and various parts thereof. I am inclined to the opinion that the amendment numbered 14a is not within the permission of the order of the 10th of December. It does not seem in any way to set forth, or could it be considered as giving, a reason for the delay. It apparently is some additional allegation concerning some of the previous matters alleged in the bill, and is evidently intended to strengthen the charges of the bill in these respects. That was not within the purview of the order made on the 10th of December, and the complainant, under that order, cannot claim the right to make this amendment. If he has the right, it must be asserted in a proceeding where that matter comes directly under consideration. I will therefore grant the motion to strike out the amendment numbered 14a.

The other general heads are that the bill does not show equity; that because the thing sued for is a sum of money due the representative of a deceased ward by the representative of a deceased guardian, and is therefore an action of account, it is claimed by the defendants that suit must be brought thereon within six years under the statute of limitations. It is also claimed that the complainant is in laches unexplained, and that there is therefore no equity in the bill. It is further claimed that by the amendment 14b the complainant sets out another cause of action than that previously pleaded, and an incongruous one with respect to the latter. I do not find that the complainant has changed his prayer in the least, nor that he prays any relief with respect to this matter as al

leged in this paragraph. That matter seems to have been inserted wholly under the permission of the court as a reason or explanation of his delay in bringing suit upon the cause of action which is urged in the bill, and for which appropriate relief is prayed in the prayer thereof. With respect to the matter of the statute of limitations applying, I have examined this matter with great care, and have read most, if not all, of the authorities, and considered them very carefully. The matter is an open one in New Jersey, and is in grave doubt. I am rather inclined to think that our courts should follow the English and New York courts in holding that the relation of guardian and ward is a continuing trust, and that until the guardian settled with the ward or the ward's representatives it must be held to be a continuing, direct trust, which is not affected by the statute of limitations. This, of course, is in a case where the guardian has not denied the ward's right and has not taken a position of antagonism, from the time of which open expression of antagonism the statutes of limitations or imputations of laches are always held to run. Therefore I am not going to strike this bill out either for want of equity or because barred by the statute of limitations, or because the allegations of the amendment 14b are incongruous with the main cause of action set up in the original bill. The defendants have answered so much as was in the original bill, and their answer may stand, if they so desire, or they may make a totally new answer to this bill as amended.

I do not wish by this decision to be understood as determining that the matter in 14b which is permitted to stay in the bill as an amendment is a satisfactory answer to the charge of laches, or that the court may not, on final hearing, reach the conclusion that there was laches; but I am disinclined to absolutely deprive the complainant of his day in court upon the ground of laches, in the face of a charge in the bill that there was some sort of an agreement or understanding between him and the person whom he seeks to hold as trustee concerning the subject-matter of the trust, which, when disclosed in detail, may explain or excuse the delay. Whether a court will strike out a bill, or sustain a demurrer-which is the same thing-upon the allegation of laches, is, of course, a matter of discretion, and I do not think it would be discreet, legally speaking, to prevent this complainant from proving the facts, after which it will be entirely open to the court to determine whether such facts excuse or fail to excuse the long delay which has ensued in the asserting of his rights. I do not mean his rights as administrator, but his right as husband of the deceased wife to take all her personalty and to have administration. had this right from the date of her death in 1885, and did not actually take out letters until 1906. It may be that upon final

He

hearing the court will hold that his delay in this respect defeats his right. But, as just said, I think it more appropriate to consider and decide this upon final hearing, and after he has had opportunity to make proof of the excuses for delay that he offers. The above was the oral deliverance of the court at the time of disposing of the motion at the argument. Having been notified that an appeal has been taken by the defendants, I think it due the reviewing court that a more extended statement of facts and law be given with respect to the important question disposed of.

The essential facts are as follows: Mary Josephine Markley was the mother of Mary Markley, and was appointed her guardian by the orphans' court of Camden county about October 6, 1876, and, as such guardian, there was paid to her for the ward the sum of $4,087.14. Mary Markley, the ward, came of age on the 13th day of January, 1883. She married Richard G. Stevenson on the 26th day of March, 1885. She died on the 25th day of December, 1885. There was no accounting between her and her guardian. Her mother, the guardian, died on the 26th day of February, 1905. Richard G. Stevenson, the husband of the deceased ward, was appointed her administrator on March 1, 1906. This suit is for an accounting, and was brought by Richard G. Stevenson, the administrator of the deceased ward, against the executors of the deceased guardian, some time in the summer of 1906.

It is the contention of the defendants that this suit is barred, either directly by the statute of limitations or by the application by a court of equity of principles in analogy to the said statute. It should first be observed that there are two periods to be considered and two different sets of parties, and that different principles are therefore applicable. First, there is the period between the coming of age of Mary Markley, the ward, on the 13th of January, 1883, and the time of her death on the 25th of December, 1885. During that period the parties concerned were the ward and the guardian. If the statute of limitations had begun to run then, the death of the ward would not toll the same. This is too well settled to require citation. After the last-named date, and up until the death of the mother, the guardian, on the 26th of February, 1905, there was no one in existence in whom was vested the rights of the deceased ward against her guardian. Such a person did not exist until the 1st of March, 1906, when an administrator was appointed for the estate of the deceased ward. At that time the guardian had also died, so that the parties had completely changed, and the parties were, as above stated, an administrator of a deceased ward on one side, and the executors of a deceased guardian upon the other. If the statute began to run at the death of the ward notwithstanding that no administrator was appointed, then this

suit is barred. There are certain well-settled principles of equity which it is only necessary to refer to briefly.

A court of equity undoubtedly has jurisdiction over the accounts of guardians under the general jurisdiction over trustees; a guardian being held to be a trustee in the fullest sense of the word. In re Hannah Barry, 61 N. J. Eq. 135, 47 Atl. 1052 (Emery, V. C., 1900); Sleeman v. Wilson, L. R. 13 Eq. 36; Perry on Trusts, vol. 1, p. 526, § 430; 16 Am. & Eng. Ency. of Law (2d Ed.) p. 75. It is true that this jurisdiction will not be exercised saving in exceptional cases, and ordinarily an accounting between guardian and ward should take place in the orphans' court; but I apprehend that the same rule with respect to the application or nonapplication of the statute would apply in the orphans' court as in this court. But the suit at bar is not one properly cognizable by the orphans' court, because it is not between a guardian and ward, or between a guardian and the representatives of a deceased ward, but is between the representatives of a deceased ward and of a deceased guardian.

The determination of the whole question depends, in my view, upon whether the relation between a guardian and ward is held to be a trust relation; that is, a direct, continuing, subsisting trust. If it is, then the authorities are clear that the statute of limitations does. not apply. There can be no doubt, I think, that the relation between guardian and ward is a trust, and is a direct, subsisting, continuing trust. Some courts, however, hold that the trust terminates at the majority of the ward (15 Am. & Eng. Ency. of Law, p. 82, note 1), and others have even fixed the period of the termination of the trust with respect to a female ward at the date of her marriage (Id.). In some jurisdictions, therefore, it is held that when the ward comes of age, or marries, the trust relationship ceases, and the statute of limitations, or principles in analogy thereto, apply, and an action will not lie for an ac counting after the period of limitation provided. Id. But other courts hold that the relation is one of trust, and is direct, subsisting, and continuing until there is an accounting (Mathew v. Brise, 14 Beav. 341; Matter of Camp, 126 N. Y. 377, 27 N. E. 799), although in a previous case in New York an opposite view had been distinctly taken and held in the case of Bertine v. Varian, 3 Edw. Ch. 343. This case was cited to the court in the Camp Case, and was, of course, disregarded. See, also, Pyatt v. Pyatt, 46 N. J. Eq. 285, 18 Atl. 1048. The principle upon which these last-cited cases go is that where the guardian receives property belonging to the ward, he becomes a trustee for the ward with respect to such property, and remains such trustee, subject to all the incidents thereof, until a proper account is had between him and the ward, and that the fact that the ward acquires the right to call for an ac