Case ID: sc-eq_18/html/0091-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Curia, per Johnston, Ch,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Archibald McDonald vs. Executors of Peter May.
    
    Where a person agreed with a debtor, whose property was about to be sold at sheriff’s sale, to purchase the personal property and allow the debtor the benefit of a resale to be made on credit, and he acccordingly purchased it at an under value — Held, that he was bound, under the agreement, to account to the debtor for the proceeds of the resale or the value of the property.
    Such agreement and purchase, making an express technical trust, is not within the statute of limitations.
    Parol evidence is inadmissable to prove such an agreement in relation to lands.
    If a purchase, whether of lands or personalty, be made at sheriff’s sale by one representing himself to be acting under ah agreement-with a debtor and for his benefit, when in fact there was no agreement, the advantages thus obtained will be taken away from him, on the ground of fraud; but a bill for that purpose, if not filed within four years, will be barred by the statute of limitations.
    
      Before Johnstont, Ch. at Cheraw, February, 1843.
    
      By the Chancellor. This is the revivor of a bill filed by the plaintiff against May, the testator of the defendants, which lapsed by his death, after he had put in his answer. The defendants confess their ignorance of the transactions upon which the case was founded, and refer to the answer of their testator, which they believe to be true. The case stands, therefore, upon the original bill and answer, and the proofs taken at the hearing.
    The bill charges that the plaintiff, being much indebted and embarrassed, under sundry judgments and executions in the office of the sheriff of Chesterfield, where he resided, and by other debts which were pressing him, and reposing confidence in May, the defendants’s testator, made an agreement with him, that the said May should purchase, at sheriff’s sale, the whole of the plaintiff’s property, real and personal; should resell it on a credit of one and two years, apply the proceeds of - the resale, in the first instance, in extinguishment of his advances, and then to such executions, (fee. as might still remain unsatisfied, including executions in favor of or owned by May himself; and lastly, pay over whatever residue of said resale might remain, to the plaintiff. That in pursuance of this agreement, May attended sheriff’s sales of the plaintiff’s property, in the years 1830 and 1831, and stated that his purpose was to purchase for the benefit of the plaintiff, whereby others became disinclined to compete with him; and bid off nearly the. whole of the plaintiff’s property at under rates ; and that other persons who had effected purchases, in consequence of his statements delivered up to him the property they had bid off, at the amount of their bids, to be taken and disposed of by him, according to the terms of his aforesaid undertaking.
    That May declines to account with the plaintiff for the property thus unjustly obtained by him, or for the profits he has made by resales thereof, and denies his undertaking.
    The answer of May denies the existence of any agreement whatever between the plaintiff and himself touching the property purchased by him, or that he ever represented himself as having come under any agreement with him, such as is represented in the bill, except in relation to 14 slaves, mentioned in the answer, which were sold by the sheriff’ under or subject to a mortgage, and purchased by the said May; for the resale of which slaves he admits his accountability.
    He denies that he received any property purchased by other bidders, at their bids, upon the terms mentioned in the bill; but asserts that he bought certain slaves from certain of the purchasers, at their bids, which he conceives to have been full prices, and for which he paid the sheriff in lieu of the other purchasers themselves.
    It appears by the testimony, that the purchases of May were made at two sales, made by the sheriff in May and August, 1830. At the first of these sales, he bought the 14 slaves mentioned in his answer, who were bound bj the mortgage, at the sum of $470, which slaves he subsequently sold for $3125. At this sale he also bought a tract of land for $150, which he sold again for $1750, a considerable portion of which he received, although the person to whom he sold it is now insolvent, and unable to pay the balance.
    At the sale in August he purchased several slaves himself} and he took several off the hands of other purchasers at their bids, or nearly so. At this sale he bought a tract of land, part of which he resold at a trifling advance.
    The slaves which he got at these sales were permitted by him to go back to the plantation of the plaintiff, where they remained} cultivating and gathering the crop, until the end of the year.
    The plaintiff appears to have been unable, from permanent disease, to attend either of these sales.
    The sheriff (Mulloy) testifies, that at the sale in May, when the first tract of land was sold, he was inclined, from the small number of persons attending it, to put off the auction, but May, to whom he communicated his purpose, replied “Go on. I, am going to buy it for the benefit of McDonald, (the plaintiff,) and he shall have the benefit of a resale.”' He made no farther representations, nor said any thing in relation to any other portion of the property, and this conversation was a private one between May and the sheriff.
    Another witness (Evans) says, that May told him he did not intend to injure the plaintiff, and that he would, give him credit for whatever the property he had bought would bring by a resale, and that he, May, had told the plaintiff so. This witness says, however, that May did not say there was any agreement between himself and the plaintiff before his purchases.
    A third witness (Duncan Leslie) states, that May appeared to •be busy during the sale which took place in August, and he thinks he said he was acting for the benefit of McDonald. After the sale was over, he said he had made an arrangement, with the Camden creditors, of McDonald’s business to his satisfaction. He sold two of the negroes purchased by him the same evening.
    Miller, who was McDonald’s overseer in 1830, testifies that the August sale took place on Tuesday. The witness had brought the negroes to the Court House. The night before, May came to the camp where they were, and in the course of •conversation said he would buy the negroes if he could, and if he succeeded in doing so, they must go back, and the crop must be taken care of. They were sent back accordingly, after the sale was over, and remained on the plantation to the end of the year.
    On the other hand, testimony was given for the defendants.
    Col. Craig thinks the sale in August was an open sale. There were many bidders. Heard nothing of May’s bidding for Mm Donald. Witness was anxious that the property should bring its value. There was a general bidding among the creditors. Witness’s father, who was an execution creditor, bid off a large number of the negroes, and offered them to May at his bid, who did not accept the offer for some time, nor without hesitation. Two of these negroes were the best bargains of the day. Three negroes bought by Mr. Robinson were the next best. The ne-groes were sold for fair prices.
    Mr. Robinson, speaking of the same sale says, that considering that the terms were cash, and that the sale was made in the summer, the property sold well; and thinks he and Mr. Craig got the best bargains. Witness was security for McDonald on one of the largest judgments, on which May had made some payments before the sale.
    It appears from other parts of the defendants’s evidence, that May became the owner of three executions, held by McNeill, Johnson and DeLeon, of Camden. The sheriff thinks he obtained them on the day of sale in August, perhaps after the sale was over. Col. Craig saw May in the sheriff’s office in conversation with Johnson, before the sale began ; and assisted in calculating the amount due on Johnson’s and DeLeon’s executions, and found it not to exceed $300. These were old executions.
    Mr. Robinson says May was a man of business, and Col. Craig, that he possessed much of McDonald’s ■ confidence, who generally applied to him in cases of emergency.
    I have reflected much upon the circumstances of this case, and my impressions of it have changed. At the trial, I saw much that led to suspicion, but I did not perceive how the answer could be gotten over. I am not sure that I am now right in supposing that it must give way to the circumstances and evidence of witnesses, but I feel confident the justice of the case is with the plaintiff. This may incline me too far ; if so, I shall be liable to correction.
    It appears to me, the testimony goes to establish the probability of such an agreement as is stated in the bill. May admits there was such an agreement in relation to the 14 mortgaged negroes. Evans’s testimony tends to the same point, as regards all the property; for although he says May did not, in words, declare there was an agreement, yet he said that he had told McDonald he would give him the benefit of a resale of the property he purchased, and he intended to do so. We are not to strain this testimony unnaturally, by construing it that he told McDonald so after the purchases. It is capable of being referred to a time either before or after the sales, and the true construction appears to me to be that which harmonizes with the other circumstances. The statement of Mr. sheriff Mulloy at the first sale, the activity displayed at both sales, the conversation with the overseer preceding the sale in August, the statement testified to by Leslie, all go to strengthen the presumption that he was buying under some understanding beneficial to McDonald as well as to himself. This is further strengthened by the return of the slaves after the purchase. The relations of confidence between the parties, the condition of utter helplessness on the part of McDonald, rendering it improbable that he should not have made application to some friendly agent, and more readily to May, whom he most trusted; coupled with the fact that, to some extent, he had certainly employed him in saving his property, and the further fact, that McDonald said he was acting for him ; all these go to increase the probability that there was an understanding between these two parties.
    But circumstances will not do. The answer of May must be positively contradicted. This is done by Mulloy. It is not a sufficient’ objection to this, that Mulloy’s testimony relates to the land, to which point it is said parol evidence will not apply. Let the inapplicability of parol to establith an agreement as to land be conceded, this does not appear to me to touch the point under consideration. The evidence may nevertheless be sufficient to contradict and discredit the answer. It is further contradicted. The answer denies that May ever "represented himself as acting for McDonald. In addition to Mulloy, Leslie is a positive witness to the contrary.
    But the establishment of an agreement is not the essential feature of this case. Let it be admitted that there never was an agreement of any description between the parties. The bill not only charges that there was an agreement, but that May was enabled to make his purchases by his statements that he was acting for McDonald. The proof of such statements, therefore, is applicable to the frame of the bill, and I think the case made out, entitles the plaintiff to relief.' This evidence is applicable not only to the personalty, but to the real estate. The statute of frauds, it appears to me, has no application here. This branch of the case does not proceed upon the contract — does not look to an execution of the .contract, but founds the remedy upon a fraud, by the practice of which the purchaser obtained possession of the plaintiff’s property. Can it admit of a doubt, that if a bidder at sheriff’s sale, either of real or personal property, represents that he has contracted to purchase in the property for the debtor’s benefit, when in fact there never was such a contract, and in consequence becomes the purchaser, he shall not be allowed to retain the advantage he has thus unjustly obtained ?
    It seems to follow, that all purchases made by May himself, must be deemed liable to a trust in his hands. For although it appears that no proof can be made that his representations drove off any particular competitor, and it is proved that the majority persisted in bidding, and made the property bring a pretty full price, proof of actual injury is not necessary when actual fraud is established. Here an alternative is presented, which I do not perceive how the the defendants can get over. If there was no fraud, that can be solely upon the' ground that there was a contract. They must choose between the contract or the fraud ; and whichever they choose, it seems to me, the plaintiff must prevail.
    I must therefore conclude, that a trust attached upon all the purchases made by May personally.
    With respect to the property bought by others, and which they let him have, there is more difficulty. If those purchasers had paid for the property and retained it, it cannot be doubted that the purchases would have been good in their hands. I suppose it clear, too, that if, after paying for it, they, the innocent purchasers, had sold it to May, he might have protected himself under their title. But although this may have been the case, in some instances, it was not so, according to the proof, in at least one instance. Mr. Craig did not complete his purchase ; his bid was transferred to May, and the case stands as if May himself had been the original purchaser. In taking the accounts which I shall order, the commissioner will be governed by the distinction just mentioned.
    It is decreed that an account be taken, in which the estate of May shall be charged with .the amounts he may have received by a resale of the property purchased by him, or taken off the hands of other bidders, and for which he and not they paid the purchase money, with interest thereon, and with the value of other property not resold by him, with interest, or hire, as may appear most equitable on the reference ; and that credit be allowed on the other hand, for all sums advanced by him to the plaintiff, or in satisfaction of the plaintiff’s liabilities and debts, with interest, and also for all debts due by the plaintiff to him, with interest; and that the commissioner report the account to this court.
    As the defendants have not admitted assets of their testator to pay the balance, if any, which may be due to the plaintiff, it is also ordered, that in case the defendants do not admit assets for that purpose, upon the reference, an account be taken of the assets chargeable to them, and the nett balance thereof applicable to the plaintiff’s demand.
    
      It is further ordered, that the costs be paid out of the estate of the defendants’s testator.
    The defendants now moved the Court of Appeals to reverse the decree of the Chancellor, on the following grounds :
    1st. Because the answer denied positively the allegations in the bill, (except as regards the 14 mortgaged negroes,) and not having been contradicted by two witnesses, or by one witness and strong corroborating circumstances, the bill should have been dismissed.
    2d, Because there was no proof of fraud.
    3d. Because, as the answer positively denied the alleged agreement, upon which alone the plaintiff sought relief, the bill should have been dismissed, even if fraud had been proved.
    4th. Because, as it was affirmed in the answer that, at the im stance of plaintiff and defendants’s testator, the accounts be-, tween them had been made up by their attorneys, and that plain-, tiff fell in debt, which was uncontradicted, the bill should have been dismissed.
    5 th. Because the plaintiff’s claim, if he ever had any, is barred by the statute of limitations, and the bill should have been dis* missed.
    And failing in that motion, then that the decree be reformed, on the following grounds ;
    1st, Because the Chancellor erred in decreeing defendants to account for the land, as parol evidence was inadmissable when the alleged agreement was denied by the answer.
    2d, Because the Chancellor erred in decreeing defendants to account for the personalty bid off by other persons, and taken by defendants’s testator at their bids.
    2d. Because the Chancellor erred in decreeing the costs to be paid out of the estate of defendants’s testator,
    
      Hanna, for the motions,
    
      Sims, contra;
   Curia, per Johnston, Ch,

It appears that the statute of Jipi, itations, which was pleaded, was overlooked in the circuit decree.

This court is of opinion that the evidence was entirely sufffi cient to make out the existence of the agreement charged in the bill. There is no difficulty in applying, the evidence to the per® sonalty, to the full extent for which May is made liable by the decree; and in relation to that, it makes put ft case pf express technical trust by agreement, to which the statute of limitations has no application.

With respect to the lands purchased, parol evidence of the agreement was not receivable. The case, in that respect, stands, therefore, as if no agreement had been made.

We are satisfied with the view taken by the Chancellor, that if purchases be made by one representing himself to be acting under an agreement with a debtor, and for his benefit, when, in fact, there was no agreement, the advantages thus obtained should be taken away from him, on the ground of fraud ; and this doctrine we think properly applicable in the case before us, so far as the lands are concerned; there being no suitable evidence of an agreement, and, therefore, no agreement, in relation to them.

But the fraud here was perpetrated in 1830, and the bill was not filed until 1837. The remedy, with respect to the lands, was, therefore, barred before the suit ivas brought.

It is therefore ordered, that the decree be reformed, by excluding from the account the lands purchased by May. In all other respects, the decree is affirmed, and the appeal dismissed,

Harper and Johnson, CC. concurred.

Dunícií?! Oh, concurred in the result,