pjc-family-2024-lib

PJC 232.2

B REACH OF D UTY BY P ERSONAL R EPRESENTATIVE

statute or when a remedy is sought that is not provided by statute. See Tex. Est. Code § 351.001, which states that the rights, powers, and duties of executors and administra tors are governed by common-law principles to the extent that those principles do not conflict with Texas statutes. For example, see Tex. Est. Code § 356.651, which prohib its personal representatives from purchasing estate property except in certain circum stances stated in Tex. Est. Code §§ 356.652–.654. If there is no evidence rebutting the presumption of unfairness that arises when a fiduciary profits or benefits in any way from the transaction with the beneficiary, the question should not be submitted for that transaction. See comment below entitled “Presumption of unfairness shifts burden of proof.” Rewording. If more than one self-dealing transaction is alleged, the phrase trans action in question was in item 1 should be replaced with the phrase transactions in question were , and the word transaction in the initial instruction and in items 3 and 5 should be replaced with the word transactions . In an appropriate case, the word bene ficiaries in the initial instruction and in items 1, 3, 4, and 5 should be replaced with the word beneficiary . If not all elements in dispute. Only the elements in items 1 through 5 that are in dispute in the particular case should be submitted. Source of question and instruction. A personal representative owes the common-law duty of loyalty, which prohibits self-dealing in transactions not specifi cally addressed in the statutes. Humane Society v. Austin National Bank , 531 S.W.2d 574, 579–80 (Tex. 1975) (personal representative holds estate funds in trust for benefi ciaries and “must act in scrupulous good faith, casting aside completely its personal interest and opportunities for gain resulting from the fiduciary relationship”); Evans v. First National Bank of Bellville , 946 S.W.2d 367, 379 (Tex. App.—Houston [14th Dist.] 1997, writ denied). The foregoing question and instruction are derived from common-law principles set forth in Stephens County Museum, Inc. v. Swenson , 517 S.W.2d 257, 261 (Tex. 1975) (material issues are whether fiduciary made reasonable use of trust and confidence placed in him and whether transactions were ultimately fair and equitable to beneficiary); Crim Truck & Tractor Co. v. Navistar International Transportation Corp. , 823 S.W.2d 591, 594 (Tex. 1992), superseded by statute as stated in Lesley v. Veterans Land Board of Texas , 352 S.W.3d 479, 490 n.72 (Tex. 2011) (fiduciary duty requires party to place interest of other party before his own); Slay v. Burnett Trust , 187 S.W.2d 377, 387–88 (Tex. 1945) (duty of loyalty prohibits trustee from using advantage of his position to gain any benefit for himself at expense of his cestui que trust and from placing himself in any position where his self-interest will or may conflict with his obligations as trustee); Kinzbach Tool Co. v. Corbett-Wal lace Corp. , 160 S.W.2d 509, 512–14 (Tex. 1942) (it is duty of fiduciary to deal openly and to make full disclosure to party with whom he stands in such relationship); John son v. Peckham , 120 S.W.2d 786, 787 (Tex. 1938) (partners required to make full dis closure of all material facts within their knowledge relating to partnership affairs; it is

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