No. 40.

#### William H. White, plaintiff in error, *vs.*William F. Crew, defendant in error.

[X.] Where an. illegal or fraudulent contract has boon made, neither Courts, of Law or Equity will interpose to grant any relief to the parties, but will leave them where it finds them, if they were equally cognizant of the illegallity or participated in the fraud, unless in cases where the public x>olicy would be promoted. • .

£2.] Where A was liable as indorser for B, and B executed a mortgage to indemnify him against loss, and the properly is sold under the foreclosure; and B, on the day of sale, co-operates with A, to have the property knocked off to him at an undervalue, so as to enable A to save himself harmless by a *re-saleBold,*that an agreement to that effect, and that the proceeds should be applied to the extinguishment of the original indebtedness, is neither fraudulent nor void, but binding on A ; and that having taken the Sheriff’s deed and gone into possession of the premises, and realized a large profit from the re-sale, Equity will compel a specific performance of the contract.

£3.] Sales by auction are within the Statute of Frauds. Whether judicial sales are exempted from the operation of the Act ? *Quero ?*

£4.] Will a Court of Equity relieve, in any case, against a mistake in pleading, or in the conduct of a cause at Law ? *Quero ?*

[5.] Where the matter in which the interposition of Equity is asked, could, not have been determined at Law, it is not within the estoppel of the legal decision.

£6.J A parol contract, for the purchase and re-sale of the land of the defend— ' ant, the proceeds to be applied to the extinguishment of the judgment under which the property was sold, is not such an interest as would vest in the assignee in bankruptcy, under the Act of 1841.

£1.3 The rule in Equity, that where a replication is filed, all the allegations of the answer, which are responsive to the bill, shall be taken as true, unless disproved by two witnesses, or one witness and corroborating circumstances, explained.

£8.3 Circumstances, alone, in the absence of a positive witness, may be sufficient to over-rule the denial in the defendant’s answer; and that, too, where he answers on his own knowledge.

£9.3 The rule, at most, is always subject to this modification: that “if there' are circumstances sufficient to turn the scale, it ought ’ to be turned; the oath of a a by-stander, with circumstances corroborating it, being better than that of an interested person”. Per Lord Chancellor *Tlmrlow,*in *Pember vs. Mathers,*(1 *Bro. Ch. Cases,*52.)

*417In Equity, in Henry Superior Court. Tried before Judge Starke, October Term, 1853.

This bill was filed by William E. Crew, against William H. White and John Neal, for discovery, relief and injunction.

Tlf©!*bill states, that in April, 1840, William E. Crew, with White and others as his indorsers, executed a note to John Neal, on which'Neal obtained judgment against the parties, and execution issued thereon 3d November, 1841; that Crew executed to said indorsers a mortgage upon *lots*of land Nos. 61, 68 and 69, in the 6th district of Henry County, which mortgage was foreclosed at the October Term, 1841, of Henry Superior Court, on which judgment of foreclosure a *fi. fa.*was issued and levied upon the lands, and the same exposed to sale; that Crew being in debt, and willing to save his said indorsers harmless, it was agreed between Crew and White, 1 hat notice should be given the by-standers and bidders, that .the object of the sale was to perfect titles and save the indorsers from loss; and that Wade H. Turner should bid off the lands for a nominal sum of money, and then turn over said bid for White’s benefit, who was then to sell the lands at private sale, and apply the proceeds of said sale to the payment of Neal’s claim.

That by virtue of this agreement, the land was put up and sold, and knocked off to the said Turner for §5102 50', and titles made to White by< the Sheriff; that the land was then worth §51500, and would have sold for that sum, but for the agreement, that -Crew and his friends were not to bid for it, and White was to take titles to it and sell it for the benefit of Crew.

The bill further states, that in August, 1842, White sold lots Nos. 65 and 69, for §5800; and in January, 1845, sold lot No. 61, for the sum of §52 50.

That in 1842 Crew owned lot No. 56, in said district, and being anxious to pay off the Neal claim, and to indemnify White, who was the only solvent indorser, at that time, consented that said lot should be sold, under a *fi. fa.*outstanding *418against. Crew, 'as' indorser for E.- F.-,Knott, ;in favor. of Havland, Risley & Co.; that it' was -agreed that White should bid off the land, and that it should be publicly proclaimed, on the day offsale, .that it-was. sold to perfect titles to White 5 and it was further' agreed, that White -should sell -said lot privately, and allow'Cr.ew'the’full amount offsuch sale, .to bemredf ed on Neal’s fi.faAfiCrew-would allow-the land to be sold at a.mere nominal sum;: and White, accordingly, bid off the same-at $25, and subsequently sold iff for $300,on-a. credit, to James J» Mitchell,-who paid him $7-5, and failing to'-pay .the balance, White filed-a'-de'ed and had the land-ré-sold;for $400; which sums; 'together with'theprocceds of .the mortgaged lands; should have been' applied'to the-payment off.thh Neal *fi.*/*: — as also-$150, the rent of -the lands-while in White’s *<.*possession, and which, it-was agreed,-should thus be applied. -:

The bill charges that the Nealy?:/®, ¡has been thus paid off and discharged by -Grew,-and that White is.controlling said/. *fa.*and fraudulently* combining with Nealp to;.vex and; harass'complainant, and-has* o'rdéred the/.-/a. do be. levied upon com-' plainant’s property. - ■ ■< -' •.- ; •

; The-bill-prayed that-said defendants-be peipetually enjoined from proceeding with 'Said/-, *fa.;*and that White be .decreed-to account.with aiidto complainant,-for the value of said lands, and -to perform, -specifically;; tho-contract:and agreement in relation thereto. •- 'V - - •' ; -■

In his answer; White- denies' all the- statements made in' the-bill; pleaded the--Statute of-Frauds and Perjuries,; and demurred'to the bill for-, want; of equity.- b; .

The defendant, Neal, denied all the charges and allegations, in the bill, so far as the- same- applied, to .him; -and upon'the coming-in of his-'/answ'erpthe' injunction was * dissolved, .as to-him; and the/, *fa.*allowed to proceed. . .

On the-trial of the cause between complainant and the--defendant, White, at; October Term,.’-1854, of Henry - Superior Court, after the bill was read' to the Court and Jury,’ Goutisel1' for defendant moved to dismiss the bill— ■

1st. Because there was no equity in the bill.

*419' 2nd: Becúus'e'the 'contract" or "ágrddméint1 'thérein' ‘set forth, was for the fraudulent purpose 6f evading "the' payméht'bff Crew’s debts, other than' the1 Neál: clhiinp'and ‘was •'therefore void. - 1 . ' ; ' ' v. - '■• ..

3d.'Becáusé the'said contract not being'in‘writing,1 was’bbnoxious to the Statute of-Frauds:and ÍPerjuriés.1 ,s

-Which Motion the Court 'óVer-i'uledyáhd Counsel' fobdeféiíd'r ;ánt"ex‘ceptéd.-'!-''"'r'■ :;|i- -"cm;

Wa'de H. Turnér/ swofn by‘complainant; testified;that the lands were knocked off to him, at the price of $102150 — tufned over the bid-toWm: H.’White. : I held óldef'jfc /«¿."andwanted my money.- -White told Me -'there, waé 'p'lénfy -of-property to pay *mjfi.fas.*and wanted me to let them alone, as it .was the best they could do — turhed 'over- the 'fan&ff'to White,'’for Crew’s benefit, as I thought; if,I had not; thought so, I would have held on to the land. Neither Crew nor White applied to me to bid'for-the lands beforethesalef'" -.'To'the introduction of this testimony, defendant objected. The Court over-ruled the objection and‘defendant-excepted. s-'.í

■ Wm.. Markham sworn White'' told” witness," after Jthe 'sale, that there was ’an understanding 'hetwééd'/CfeAY and 'himself, and he intended'to’dell'the'lándáffof ^''CrdwVbhfiefif’’'.:’,': !

' Enoch Jackson,'sWpfh f '“ White’.’told! witness,'’ aftfer’1 he ,haff' sold íhVlahds’'thut'he’ha'd s'old''théM',for !$20'0;More ‘tk.aii’hb was security fob CreAV,' which’ would‘páy 'him’ for ,liisi! trouble; but that he did not 'charge ‘Crew ányíhihgj'butdhtéhded' thrive the $200 to Crew or his family”. \ "

The ’Neal *p.'fa.*Wás theh réad'in é-vidéncé also all the deeds to the said lands, made to White.

Defendant then offeied to read in'¿videñce an affidavit of-illégality,' filed by Crew,’to, Said' *p :fp*"b'áfóf^'th'e’ filing of'said’ bill, to shdw’that the1 defence''to the *ft.*/¿l”áet!'úp'in'ilie bill, was embodied in the affidavit, and that'said.'affidavit of illegality had' been dismissed: 'Also,' offered in eVid'ence Crew’s certificate in bankruptcy," dated the 12th'Jahüáryyl843, to show that Crew couhl not''recover against'White'"a demand which '•vested in the assigúéeln *bankruptcy.’1' ‘*....... ’ " (i " -

*420The Court rejected both the certificate and the affidavit of illegality, and Counsel for defendant excepted.

The Court charged the Jury, that the execution of the deeds •to the land by the Sheriff, to White, was a part performance of the contract, on the part of Crew, and took the case out of the Statute of Frauds and Perjuries; that where the answers of the defendant wore responsive to the charges of the bill and denied those charges, the complainant was bound to over-rule the answers, by the evidence of one witness and .corroborating circumstances.

To this charge of the Court, Counsel for defendant excepted; and on these several exceptions error is assigned.

Moore & Ezzard, for plaintiff in error.

Boyal & Speer, for defendant in error.

*By the Court.*

Lumpkin, J.

delivering the opinion.

[1.] In the judgment of this Court, the defendant, White, has totally misapprehended the nature of the agreement entered into between the complainant and himself. We recognize the general rule, that where an illegal or fraudulent contract has been made, neither Courts of Law nor Equity "will interpose to grant any relief to the parties, but will leave them where it finds them, if they were equally cognizant of the illegality or participated in the fraud, unless in cases where the public policy would be promoted.

[2.] But such is not the character of the contract charged in this bill. *English vs. Tomlinson et al.*(8 *Humphrey’s R.*378.) For aught that appears to the contrary, it was entered into for the very' laudable purpose of enabling White and the other indorsers of Crew on the Neal debt, to indemnify themselves against loss on account of their liability on that debt. And in this sense alone, and in no other, can it be said to have been made for the benefit of the complainant.

[3.] In opposition to the specific performance prayed for by this bill, the Statute of Frauds is insisted on.

*421That sales by *auction*are within the Statute, is not now an ■open question. *Blagden vs. Braglear*(12 *Ves.*466.) *Kennorthy vs. Schofield*(2 *Barn. & Cress.*947.) *Walker vs. Constable*(1 *Bos. & Pul.*306.) *Emmerson vs. Heelis*(2 *Taunt.*38.) *White vs. Proctor*(4 *Taunt.*209.) *Hinde vs. Whitehouse*(7 *East.*558.) But in the case of the *Attorney General vs. Day*(1 *Ves.*218), while Lord *Bardwiche*admitted that sales by *auction*were not excepted, he distinguished *judicial sales*from other sales by auction, holding that the former were necessarily exempted from the operation of the Statute. Without extending the inquiry further, as to whether or not the policy of the Statute applies to all public as well as'private sales, we hold, that under the facts of this case, it would be a gross fraud not to compel the defendant to execute his part of the agreement. To save 'him harmless, such proclamations were made on the day of sale as greatly to depress the market price of the property, by keeping off bidders. The land was cried off and turned over to him. He took the Sheriff’s deed — has re-sold it, according to the understanding between complainant-and himself, at a large profit, and now refuses to execute his part of the agreement, to apply the proceeds to the extinguishment of the Neal debt. We repeat; it would be a fraud upon Crew, and flagrantly inequitable to suffer his refusal to work such a prejudice. See Dart’s *Vendors and Purchasers of Real Estate, note*1, *p.*477.

And the Court was right in not allowing the affidavit of illegality, interposed by Crew against the Neal *fi. fa.*before this bill was filed, to be read in evidence. The object of this testimony was to show that the question made by the bill was *res adjudicata.*

[4.] It is not necessary to question the doctrine that a Cou^t of Equity will not relieve against a mistake in pleading, *or in the conduct of a cause at Lazo.*There is, however, respectable authority to be found, in support.of the affirmative of this proposition. (Anonymous, 1 Vernon, 119, *and cases cited in the*note, 1*st American Edition. Wesley vs.*Thomas, 6 *Harr. & Johns.*24. *Lanmat vs.*Bowley, *Id.*500. *Price vs. Fu**422*qua,*4 *Munt.*68. *See Waterman's Eden on Injunctions, 3d Edition, p. 21, note*.)

[5.] The matter on which the intervention of Equity is here asked, could not have been determined'at Law; and‘consequently, it cannot be within.the estoppel of the legal decision. Perhaps it- was for this very, reason, that the affidavit of illegality was abandoned by the defendant, Crew, Or was dismissed by the Court. ’ There was, in--fact; no judgment at Law, as to the grounds for relief prayed for in this bill. '■ ‘

[6.] We confess that we are ■ unable * to comprehend, very clearly, the object in offering in evidence the certificate'in bankruptcy,* which was obtained by Crew the 12th of January.,-1843. , The bill-of exceptions states that it was' to' show that Crew could not recover, against 'White, a demand which Vested in the assignee in bankruptcy. Butdt- does' not- appear that-the claim was upon.the debtor’s schedule. \ But'-whether it-was - or was not, he does not seek to enforce a moneyéd demand against White; but the performance of-a duty- of' obligation, namely: to compel .him, in pursuance of -his undertaking, to ' apply the fund ¡arising from the re-sale-of - the'land, - which he bought and held on trust, for the-benefit‘of .Crew, to the' ex-tinguishment of the Neal judgment.

[7.] The charge of the Court- is excepted to.. The only thing in it, not already noticed, is the concluding' clause Cthatthe complainant was bound to overcome the answer, by the evidence of one witness and corroborating circumstances.

. The error assigned here is, that the Court Should have instructed the Jury,- that to overcome the 'answer of the defendant, which is responsive to the bill, that in addition to- the testimony of one witness, the *circumstances*should equal, in strength, the proof of another witness. But such is not our understanding of the rule. True, from the manner 'in which it is usually stated in works on Equity Practice, this inference might.seem to be warranted: that where a replication is put in,a,ndthe parties pr'oceed to-a hearing, "all the allegations"'of the answer which are responsive to the bill, 'shall be taken as true) unless they are disproved by two'witnesses, or by one'wit-’ *423ness, with corroborating circumstances; that is, with circumstances; which would equal the evidence' of another witness. Rut Mr. *Daniel*lays down-the rule more guardedly. He says, that where the answer, in express terms, negatives the allegations in the bill, and the' evidence of one person, only, affirms what has been so negatived, then the Court will neither make a decree nor send it to a trial at Lawr; or, as he otherwise expresses it, unless 'the denial, by the answer, is contradicted by the evidence of more'than one witness. (1 *Ch. Pl. & Pr.*983.) And by reference to the numerous American cases, cited in the note by Mr. *Perlcins,*the Editor, it will be found, that in many of them, very slight preponderating circumstances, in addition to the positive proof, were sufficient to turn the scale against the defendant.

[8.] Indeed, circumstances alone, independent of any direct proof, might often justify and require a decree against the answer. *(Long vs.*White, 5 *J. J.*Marshall, 228. *Clark’s Ex’s. vs. Van Rien’s Dyk.*9 *Cranch.*154.)

[9.] In *Pember and his Wife vs. Mathers,*decided in 1778, (1 *Brown’s Ch. R.*52,) Lord Chancellor Tlmrlow, in commenting on this rule, says : “ It stands on great authorities— so does the manner of liquidating it. I do not see great reason in either. The rule is subject to this modification; that if there are-circumstances sufficient to turn the scale, it ought to-be turned. The oath of a by-stander, with circumstances corroborating it, is better than that of an interested person”. *

And in support of this qualification of the rule, see 1 *Greenleaf’s Ev. pt.*2, *ch.*14, §260; 1 *Phil. Ev. Cowen & Hill's Edition,*154, 155, and the numerous cases' cited by Mr. *Perlcins,*in note *a,*to the case of *Pember and Mathers.*

The judgment below is affirmed.