Case Name: John W. Schmidt vs. William C. Gatewood, Sophia C. Messervey, Elizabeth Messervey and Phillip J. Messervey
Court: South Carolina Court of Appeals
Jurisdiction: South Carolina
Decision Date: 1844-06
Citations: 2 Rich. Eq. 162
Docket Number: 
Parties: John W. Schmidt vs. William C. Gatewood, Sophia C. Messervey, Elizabeth Messervey and Phillip J. Messervey.
Judges: Before Johnson, Ch., at Charleston,
Reporter: South Carolina Equity Reports
Volume: 19
Pages: 162–179

Head Matter:
John W. Schmidt vs. William C. Gatewood, Sophia C. Messervey, Elizabeth Messervey and Phillip J. Messervey.
The Act of 1791 gives a lien, to secure the purchase money, on property sold, under the provisions of the Act, for distribution: But where a sale is made under the lien which the Act gives, the lien is divested, as in the case of a sale under an ordinary mortgage.
Real property was sold by the commissioner for distribution. One of the distributees purchased the property, and, under a power of attorney from some of the distributees, gave receipts to the commissioner for their shares. He procured himself to be appointed guardian of one of the distributees who was a minor, giving A as security to his guardianship bond, and then gave the commissioner a receipt for the minor’s share. He was at the time largely indebted to A. who know of these proceedings, and that he was unable to pay either the purchase money of the property or the debt to A. Titles were made to him by the commissioner, and he immediately mortgaged, and af-terwards conveyed the property to A, the consideration being his indebtedness to A. Held that the transaction was fraudulent, and the property was subjected in the possession of A to the claims of the-distributees, (for whom receipts had been given) for the amount of their shares.
In deciding upon the bona or mala fides of such a transaction, much importance is always attached to the fact, that the security was taken, not as a pledge for money borrowed at the time, but for an antecedent debt.
A verbal agreement to purchase land at sheriffs sale for the benefit of another, is void under the statute of frauds, and cannot be enforced against the purchaser.
Before Johnson, Ch., at Charleston,
June, 1844.
The Chancellor. The late Phillip Messervey died in 1828, intestate. He left surviving him a widow, Sophia, and six children, viz : the defendants, Sophia C., Elizabeth and Phillip J., and Catharine, Lawrence, and George, who were entitled to distribution of his estate. Besides a considerable personal estate, administration of which was committed to his widow, he was, at the time of his death, seized and possessed of five houses and lots in the city of Charleston, and a farm on the Neck, all of which are described in the pleadings. At the May Term of the court of equity in 1829, an order was obtained, on proceedings before liad, which directed the sale of the whole estate, real and personal; and at the sale made by the commissioner, in pursuance thereof, the widow (Sophia Messervey,) purchased all the real, and the greater part of the personal estate.. The terms of the sale were for one-third cash, the balance on bond and mortgage, payable in one and two years. It does not appear that she ever gave the bond and mortgage, or made the cash payment to the commissioner, except in the manner hereinafter stated. The children, except Sophia C., were then minors, and the widow was, by an order of the court, appointed their guardian, on the usual condition of her entering into bond, with sufficient surety, for the faithful discharge of her duties. She entered into the bond herself, and representing herself as the attorney of her sister Susan-nah Gleize, appointed for that purpose, subscribed her name as surety to the bond. But this authority was disavowed by Mrs, Gleize, and has never been established. The commissioner of the court, who has since died insolvent, notwithstanding accepted the release of the widow of her own interest, and, as guardian of the minor children, of their’s ; also of their distributive shares in the whole estate sold, and executed to her titles to all the property bid off by her at the sale, reporting to the court that he had paid Sophia C. her share. The widow having thus become possessed of the legal estate in the property, and having become largely indebted, on her own account, to one Joseph A. Barelli, mortgaged a portion of the real estate to him, to secure the payment, and also confessed a judgment for the amount, and the debt being unpaid, Barelli reized upon the real estate, with the intention of selling it to satisfy his demand.
This proceeding put in peril the entire interest of the children in the estate ; and the complainant states in his bill, that as their friend, he employed counsel, and caused proceedings to be instituted for the purpose of ascertaining and establishing their rights. The judgment of the court in that cause will be found in 2 Hill’s Ch. Rep. 567, in the case of Sophia C. Messervey et al. vs. Joseph A. Barelli et al., in which it was held, that notwithstanding the circumstances before stated, the children had a lien on the real estate for the amount of their distributive interests in the proceeds of the sales, and it was, among other things, ordered that the Master should ascertain and report the amount due to them respectively. That Sophia Messervey (the widow,) should pay them the amount, and on her failure to do so, the master should first sell all the real property purchased by the widow, then remaining in her possession, if so much should be necessary, to pay the children, and if that should prove insufficient, he should then proceed to sell so much of the property mortgaged by her to Barelli, as would be sufficient for that purpose. This was at February Term, 1837.
The complainant further states in his bill, that the widow, Sophia Messervey, with her children, had removed to Philadelphia, and before and pending the proceedings before referred to, were in great want and distress, and he was induced to lend and advance to the defendants, Sophia. C. and Elizabeth, who had attained full age, the sum of two thousand dollars, and that they, on the 15th June, 1833, gave him their bond for the amount; and to secure the payment, mortgaged and assigned all their interest in the real estates inherited from their father ; which was recorded in the proper office, within the time limited by law. And that as a further security, they, some time afterwards, confessed a judgment for the amount; and that on the 11th January, 1838, and before the execution of the order of sale of February Term, 1837, he gave notice to Mr. Gray, the commissioner of the court, of the existence of his mortgage, and that he should claim their interests in the proceeds of the sales. The money due to the children not- having been paid, conformably to the order of February Term, 1837, the property was sold by Mr. Gray, the commissioner, on the 15th January, 1838. And the complainant states in his bill, that anticipating that there would be no sufficient bidder at the sale, it was understood that the property should be knocked down to the defendant, Phillip J., the eldest brother, for the benefit of all concerned, and should stand in his name until he could be appointed guardian of the minor children, and settle with the complainant and the adult children. That the matter, with his consent, remained in this unsettled state for a long time, and until he understood that the said Phillip J. had receipted to Mr. Gray for the interest of the minor children, to whom he had been appointed guardian, and as the attorney in fact of defendants, Sophia C. and Elizabeth, for their entire interest in the estates; and that Mr. Gray had executed titles to him for the property, and the deed had been recorded. That he thereupon called npon Mr. Gray, who immediately summoned the defendant, Phillip J. before him, who admitted the justice of complainant’s claim, and consented that the receipts which he had ¡executed, as the attorney of Sophia C. and Elizabeth, should be rescinded, as made by mistake. That he also agreed to give bond, with personal security and mortgage, to the commissioner, for the amount to which defendants, Sophia C. and Elizabeth,, were entitled, representing that defendant, Gatewood, would be his security. He, himself, gave the bond and mortgage, but never gave any personal security. Complainant was informed, and believed, that the said defendant, Gatewood, had undertaken to be his security, but subsequently refused to do so. The bond and mortgage, so executed, were assigned by the commissioner to the complainant. The times at which these circumstances transpired are not stated in the bill.
The complainant further states in his bill, that the defendant, Phillip J., was a clerk in the office of the defendant, Gatewood, and had become indebted to him in a considerable amount, and that he procured the said Philip J. to execute titles to him for the property he had purchased at the sale, in which $13,000 is stated as the consideration. The complainant charges, that no consideration whatever was paid for the said conveyance; that Gate-wood took it with full knowledge of his liens on the property. That he well knew that Phillip J. had not the means of paying for the property, and that he had never paid for it. That his object was to indemnify himself against the losses which he had sustained by the defalcation of defendant, Phillip J., at the expense of his family, (Sic., «fee. The bill goes on to charge, in various ways, that defendant, Phillip J., had no authority from the defendants, Sophia C. and Elizabeth, to vacate their interests in the estate. That the said Phillip J. paid nothing on account of his purchase at the sale by the commissioner; and that these facts were known to the defendant, Gatewood, and that to secure himself against the defalcations of the said Phillip J. as his clerk, he has aided him in imposing on the commissioner, to obtain the titles to the property, well knowing of the liens which complainant had on it under the mortgage from Sophia C. and Elizabeth.
Such are the substantial allegations found in the bill, and the prayer is, that the bond and mortgage executed by defendants, Sophia 0. and Elizabeth, to complainant, shall be decreed to be a lien on their interest in the estate, and a charge upon it, taking precedence of the conveyance from defendant, Phillip J., to defendant Gatewood ; and that unless the money shall be paid at a short day, the property should be sold to satisfy the same.
The defendant, Phillip J., has not answered, and as the de-fence of the defendant, Gatewood, and that of Sophia 0. and Eli zabeth, rest on entirely different grounds, I shall consider, first, that of Gatewood. He denies, minutely and fully, all knowledge of the complainant’s interest in the property in controversy, and all the allegations of fraud charged against him in the bill; and he states, that in the year 1839, and for two or three years before, defendant, Phillip J., was and had been his clerk, and had his entire confidence, until September, 1839, when it was discovered that he had abused his confidence, and was largely indebted to him for his defalcations. At first, it was not supposed to exceed $5000, and as an indemnity, the said Phillip J. proposed to mortgage to him a house and lot in Meeting street, and another in Tradd street, two of the houses and lots mentioned in the bill, of which he represented himself as the owner, having purchased them at the sale of the commissioner, but stated at the time, that to enable him to procure the title deeds, it would be necessary for him to give a bond to the commissioner, with security, as guardian of his minor brother, and proposed to this defendant to join him in the said bond as surety, to which he assented, and did so, and that he has since paid to the said minor, on his coming of age, the sum of $-- — , being all that he is ascertained to be entitled to, and is ready and willing to pay any balance that may be found due to him. That the defendant Phillip J. having settled with the commissioner, and obtained from him titles to the said houses and lots, and this defendant believing him to be the absolute and dona fide owner, accepted from him a bond, conditioned for the payment of the said sum of $5000, and by way of security for the payment, accepted a mortgage of the house and lot in Tradd street. The bond and mortgage bears date the 26th September, 1839, and defendant states, that before he accepted this security, he employed counsel to investigate the title, who represented it as good, and the property unincumbered. This defendant states, that on a further examination of defendant, Phillip J.’s administration of his affairs, as clerk, it was discovered that he was a defaulter in the further sum of $5000, in addition to that before disclosed, and to secure the payment of this sum, he accepted a bond for the amount, and a mortgage on the house in Meeting street. They bear date the 14th November, 1839. It was, upon further investigation, also afterwards discovered that the said Phillip J. was a defaulter with this defendant, as clerk, in the further sum of $3000, and to secure the payment of this last sum, gave to this defendant another mortgage on the said house, to- wit, in Meeting street. This bears date the 25th January, 1840. That having dissolved all connection with the said Phillip J., this defendant, as the most simple and direct way of foreclosing his mortgages, obtained from him a conveyance, in fee, of the houses and lots mortgaged, in which the consideration of 13,000, the aggregate of the three bonds, is expressed. This conveyance was executed and bears date the 17th September, 1840. He supposes that the counsel employed by him, informed himself of the proceedings under which Phillip J. purchased the property, and of the existence of the mortgage or assignment from Sophia C. and Elizabeth, to the complainant. _ This defendant had, before he obtained an absolute conveyance from Phillip J., heard that complainant had some claim on the shares of Sophia C. and Elizabeth, but had never heard of the existence of their mortgage or assignment. He knew that Phillip J. had purchased at the sale of the Commissioner, and believed that he paid no money, but supposed that he had paid, or made satisfactory arrangements with the parties really interested, and by that means acquired the title.
This defendant states, in his answer, that he has been informed that at the sale of another house and lot in Meeting-street, by the sheriff, belonging to the estate -of the intestate, under execution, acting as the friend, ánd'for the benefit of the family, the complainant became the purchaser at $70, with the understanding that he was to reimburse himself out of the same, for any sums he had or might advance them; and he believes it would appear, from a full exposition of the transactions and accounts between Sophia C. and Elizabeth and the complainant, that his claim against them had been fully satisfied; and if not entirely secure, that he was fully secured by the purchase of the said house and lot. ■ And he further' states his belief, that if complainant has obtained from Sophia C. and Elizabeth the mortgage or assignment stated in the bill, it was long after Philip J. had mortgaged and conveyed to this defendant. But it is best to state here, that this last statement of the answer is not sustained by any proof.
In the statement of the case, as derived from the bill and answer, I have intentionally omitted many charges and allegations, which struck me as wholly immaterial, as well as many that are retained, to the questions involved in the"case, which, from the view I have taken of them, arose out of a few well ascertained facts, except as to the infancy of defendant, Elizabeth, which I shall more particularly notice.
Mr. Gray, the commissioner, who sold the property, under the order of the court, testified that he offered it for sale, for cash, on the 15th February, 1838, and that it was bid off by the defendant, Philip J., at $7400. On the 27th of May following, he paid on account of the purchase, $519, which was applied to the payment of the expenses. He paid no more money. It was understood that he represented all the parties, but the execution of the conveyance to him was delayed until he could obtain the necessary authority to receive the shares of the other children, amounting to $1146.73, each. Laurens Messervy, one of the children, admitted to witness, that he had received his share On the 1st October, 1838, Philip J. gave witness a receipt for his own share, and the share of his minor brother, George, to whom he had been appointed guardian. He also presented a paper writing, purporting to be an authority from Sophia 0. and Elizabeth, to receive their shares, and acting on the faith that it was authentic, he accepted his receipts for their shares also, and executed titles to him. for the property sold. Witness admits, that notice had been given him of the complainant’s claim before the sale, but that he had forgotten it when he settled with Philip J. His attention was some time after called to it by Mr. Memminger, the solicitor of the complainant. He, thereupon, called on Philip J. to account for the shares of Sophia G. and Elizabeth. He, Philip J., then proposed that the former settlement should go for nothing, and that he would give a bond and mortgage of the property to secure their shares. Witness knew that he had before given a mortgage to defendant, Gatewood, and he then proposed to give Gatewood as surety to the bond. Witness took the bond and mortgage from Philip J., but Gatewood declined joining in the bond. He never told witness that he would. Gatewood was surety to the bond given by Philip J. for the faithful discharge of his duty as guardian of his brother, George, and paid the amount of his share.
Col. Hunt, sworn for defendant, stated that a small wooden house in Meeting-street, which had belonged to the estate of the intestate, was sold by the sheriff, under an execution against the widow, and purchased by the complainant, at a very low price, but don’t think it was worth more than eight hundred or one thousand dollars. Complainant told him at the time, that he was acting as the friend of the family, and did not wish or intend to make money by it.
In the absence of any proof that defendant, Gatewood, had actual notice of the mortgage from Sophia C. and Elizabeth to the complainant, at the time he accepted the mortgages from Philip J. to himself, his answer must be regarded as conclusive; and in the argument at -the bar, the case was put principally on the. ground, that the recording of the mortgage was itself notice. Conceding the truth of the proposition, that',the recording of a mortgage on property is, in legal effect, notice to . subsequent purchasers and mortgagees, its application to the case is denied on the other side, on the ground, that all the interest which Sophia C. and Elizabeth had, was a lien on the property for their distributive shares of the first sales, at which the widow, Sophia Messervey, was the purchaser. That their mortgage to the complainant conferred no interest in the property- itself, and could only operate as an assignment of their lien ; or, to express it in the language of the counsel, as the mortgage of a mortgage; the recording of which could not operate as notice, because there is no law requiring it to be recorded.
.The Acts of the Legislature regulating the recording of mortgages, apply only to mortgages of visible tangible property, and notto mortgages, soto express it, of choses in action, which are not technically the subject of mortgage, but may be transferred from one person to another by assignment or delivery ; and such I take to be the character of the interest which Sophia 0. and Elizabeth had in the property at the time they mortgaged or assigned to complainant.
The Act of 1791, regulating the distribution of the estates of persons dying intestate, provides, in certain cases, for the sale of real estates for distribution amongst the heirs, and as a security, gives a lien on the land for the. purchase money; and if- this proves insufficient to pay it, the parties have a remedy against the purchaser for what might remain due. The judgment of the court in Messervey et al. v. Barrelli, puts the rights of Sophia C. and Elizabeth on the footing of a lien merely. Their right to the property was gone, and that lien was all that remained to them. The recording of their assignment or mortgage, as it is called, of that lien to the complainant, could not operate as notice to defendant, Gatewood, because, as said in the argument, no one would ever think of resorting to the Register’s office to ob tain knowledge of a deed which was not required by law to be recorded.
The counsel for complainant has referred to M’Leodv. Drum-mond, 14 Yes. 361-2, to shew that he who actually pays money on the faith of a security, is more favored than a subsequent purchaser, who accepted a conveyance in satisfaction of an antecedent debt; and there seems to be much reason in the distinction; but neither this, nor the question of notice, necessarily enter into the determination of this case. Both will be superseded by the inquiry, whether the defendants, Sophia C. and Elizabeth, have been divested of their lien on the property by the sale by the commissioner, and his conveyance to Philip J. If not, it follows that it was not divested by his conveyance to the defendant, Gatewood.
In making the sale and the conveyance to Philip J., the commissioner acted in a ministerial capacity, and the order of the court under which he acted, was his warrant of attorney, and like all other special agents he was bound to conform strictly to it. All limited powers are to be strictly construed, and if the agent do any act not expressly authorized, or necessarily implied, the principal is not bound by it; and this more forcibly applies to ministerial officers, because they are agents appointed under the authority of the general law, in the selection of whom the party has no immediate agency. . He cannot confer the power on another, whom he might esteem more worthy of confidence, but must abide the act of the agent of the law.
By the order under which the commissioner sold this property, he was directed to sell it for cash, and out of the proceeds to pay the children of the intestate their distributive shares. The power to make the conveyance to the purchaser is necessarily implied in the power to sell, but the right to exercise it was dependant on the previous payment of the money by the purchaser. The purchaser here never paid to the commissioner a dollar beyond what was necessary to defray the expenses of the suit. As said, in the case of Messervey v. Barrelli, if the purchaser himself was entitled to receive the money, his acknowledging it would have been a substantial compliance with the terms of the sale, but it is not now even pretended that the defendant, Philip J., had any authority to receive the shares of Sophia 0. and Elizabeth. The pretence that he had, was a fraud, which he but too successfully practiced on the commissioner.
Suppose that the defendants, Sophia 0. and Elizabeth, on the one part, and defendant, Gatewood, on the other, have no other security than the property itself, which of the two ought to bear the loss 1 They, as before remarked, had no control over the subject. They had surrendered their rights to the care of the court, and were not called on.to do more than await the execution of, its decree. Gatewood, on the contrary, was at liberty to act for himself; he had the right to examine the title through all its ramifications, and to be satisfied that Philip J. had paid the purchase money required by the order for the sale, and to accept or reject the conveyance, as he might think fit; and having'trusted to his own judgment, as between himself and these parties, he ought to bear the loss. But there is another consideration growing out of tlm principle inculcated by the case of M’Leod v. Drummond. Gatewood paid no money in consideration of the conveyance from Philip J., but accepted it in satisfaction of a precedent debt, and it cannot comport with equity, that the money of the defendants, Sophia C. and Elizabeth, should be taken to pay that debt.
. The defence set up by Gatewood, that the complainant had been satisfied the debt due to him by Sophia'C. and Elizabeth, in the purchase of the house in Broad-street, cannot avail any thing, if, indeed, there is any justice in the allegation. As between Gatewo'od and Sophia C. and Elizabeth, they would not only be entitled to an account from complainant, but to their shares of the proceeds of the sales by the commissioner, of the property conveyed to him by Philip J.
Having thus disposed of the defence of Gatewood, I will proceed to consider that of Sophia" 0. and Elizabeth.
They, in effect, admit in their answers, that they executed the bond, and what is called a mortgage, set out in the complainant’s bill. They deny, however,, that they received themselves any consideration, or that complainant ever advanced any money to either, except a very small amount to Elizabeth, for which she gave him a receipt, but admit that they were made in consideration of a debt due by their mother to complainant, or a liability incurred for her, and that they were induced to enter into them by the entreaties of their mother ; so that no question remains ..about the sufficiency and bona-fide consideration of the bond and mortgage.
They state, in their answer, that before the execution of the bond and mortgage, a wooden' building in Broad-street, (the same referred to in the answer of Gatewood,) was sold by the city sheriff, under legal proceedings against their mother, and that by an arrangement between the complainant and their mother, and the family, he bought it in, at the sum of $ , for the family; and at the time of the execution'of the bond and mortgage, it was agreed between Dr. W. Schmidt, junior, the son of the complainant, who acted as his agent in taking the bond and mortgage, that the complainant should hold the house and lot, and receive the rents and apply them to the payment of the debt due him by their mother. They deny all recollection of having confessed a judgment to the complainant for the amount of the bond, and that they ever authorized Philip J. to receive their shares of the property sold by the commissioner, Gray, and purchased by the said Philip J. They deny, also, that they were parties to the agreement set out in the bill, that Philip J. was to bid off the property at the commissioner’s sale for the benefit of all concerned, or were ever consulted about it.
The infancy of defendant,. Elizabeth, at the time of the execution of the bond and mortgage, is relied on in bar of the relief sought against her.
The evidence of Gol. Hunt, before referred to, establishes very clearly, that there was some agreement or understanding between the complainant, and at least the defendant, Sophia, the widow, that he was to bid off the wooden house in Meeting-street, and that after indemnifying him for what he might pay for it, either by leasing or selling, the balance of the value,, if any, should go to the use of the family, in proportion I suppose to the interests which they severally inherited from the intestate ; and the probability is, that that was the reason why it sold so much under its value; and the complainant is bound by it. I shall, therefore, order that it shall be taken into the account in the settlement be.tween him, Sophia C. and Elizabeth.
The evidence as to the infancy of Elizabeth, at the time of the execution of the bond and mortgage, is involved in some doubt. On this subject, Col. Hunt stated that he had been, employed to file a bill to settle, the estate of the intestate, and produced a memorandum made upon the authority of, Sophia, the mother, and her children, in which, amongst other things, .the ages of the children were stated; and from this, it appears that Elizabeth was of full age at the time of the execution of the bond and mortgage. A' letter from Sophia 0. to complainant, dated 24th March, 1833, was also given in evidence, in which she states that defendant, Elizabeth, was then of age, and proposing that if he would prevent the sale of the property at the instance of Barrelli, they would indemnify him.
Opposed to this, an old paper, represented as a leaf from the family Bible, and containing the family register, was produced, in which the birth of defendant, Elizabeth, is set down as on the 22d January, 1813; (the bond and mortgage are dated 15th June, 1833.) This entry, and two‘others, which immediately follow, are said to be in the handwriting of one Peigne, a friend, or perhaps a relation of the family. They appear, from inspection, evidently of modern date, and were obviously written with the same pen, and the same ink, and there is no evidence when they were made, or upon what authority or information.
Mrs. Shirer, sworn for defendants, testified, positively, that she was born on the 22d January, 1813. She is the sister of Sophia, the widow, and states that she waited on her during her confinement, and recollects the time of the birth, from the fact that she herself was married in May afterwards.
I attach no importance at all to the evidence furnished by the family register, as to the age of Elizabeth, because it is not known upon what authority, or on what information, it was made; and, for any thing that appears, might have been made for the occasion. This defence, therefore, rests entirely on the evidence of Mrs. Shirer, but that is opposed by the evidence of Col. Hunt, on information derived from the mother, at a time when there was no motive to misrepresent her age, and who, of all others, would be supposed to be most accurate, and by the letter of Sophia C. I have known a few persons whose memory of the precise dates of events might be depended on, but they are very few ; and when Mrs. Shirer undertakes to speak with perfect confidence of the day of the birth — a matter in which she was not particularly interested — a douht would naturally arise as to the accuracy of her memory; and when it is recollected that Elizabeth, in joining in the bond, assumed the character of an adult, it cannot but be reasonably supposed that Mrs. Shirer was mistaken.
It is ordered and decreed, that the master do ascertain and report what amount is due to complainant on the bond and mortgage of the defendants, Sophia C. and Elizabeth, including interest and also the value of the wooden house and lot in Meeting-street, purchased by the complainant at the sheriff’s sale, and the amount of the interest of the said Sophia C. and Elizabeth therein, including interest.
It is also further ordered, that the said master do also ascer tain and report what is the amount of the distributive shares of the said Sophia C. and Elizabeth, of the sum bid by Philip J. Messervey, at the sale of the houses and lots in Tradd and Meeting-streets, described in the pleadings, made by the commissioner, Gray, including interest; and that unless the defendant, William 0. Gatewood, pay to the complainant the amount thereof, within two months after notice of the said report, that the said master do proceed to sell the said premises, or so much thereof as may be necessary, for cash ; and from the proceeds he pay to the complainant the amount of the debt due to him from the defendants, Sophia G. and Elizabeth, and if the amount of the said sales shall exceed the amount to which the said Sophia C. and Elizabeth may be entitled on account of the purchase by Philip J. Messervey, that he do pay the surplus to the defendant, William C. Gate-wood.
And it is further ordered and decreed, that the said master do state an account between the complainant and the defendants, Sophia 0. and Elizabeth, in which he shall charge the said Sophia 0. and Elizabeth with the amount of the debt due on their bond and mortgage, and credit them with the amount which he may recover under this decree, and the amount of the interest of the said Sophia C. and Elizabeth in the said wooden house and lot in Meeting-street.
I do not think it a case for costs — each party must pay their own.
The defendant, William C. Gatewood, appealed from the foregoing decree, and now moved that the same be reformed, on the following grounds, viz:
1. That the deed of conveyance from the master in equity was an acknowledgment that he had received the purchase money in conformity with the decree under which the property was sold, and he (Gatewood,) was not bound to inquire further into the truth of that acknowledgment, and cannot be made to suffer for not having done what he was not bound to do.
2. That if Phillip J. Messervy was authorized to receive his sisters’s shares of the purchase money, the exchange of receipts which took place between him and the master was substantially a payment of the purchase money to the master, and of their shares to them; and since it was the duty of the master to judge of the sufficiency of Phillip’s authority to receive their shares, as between the master and all other persons, except Phillip himself, he, Phillip, must be taken to have had authority. And if he was not authorized to receive their shares, and practiced a fraud upon the master, he, the master, is responsible to them, and there is no question between them and Gatewood, as the decree supposes, whether the loss shall be borne by them or him, but it must be borne by the master himself, by whose want of care and vigilance in the discharge of an official duty, it was occasioned.
3. That it was neither proved nor admitted that Phillip J. Mes-servey had not, authority to receive the shares of his sisters, their denial of his authority, contained in their answer; not being evidence against their co-defendants.
The defendant Elizabeth 0. Messervey, also appealed from so much of the decree as directs an account to be taken between the complainant and her, in which she shall be charged with the amount due on the bond of the said Sophia and Elizabeth, mentioned in the bill, because she insists that it was sufficiently proved that, at the date of the bond, and of the alleged confession of judgment thereon, she was under the age of twenty-one years.
And all the said defendants appealed, and insisted that the bond of the defendants, Sophia C. and Elizabeth, to the complainant, should be credited with the whole value of the house and lot in Meeting street purchased by complainant at the sale by the city sheriff.
Mazyck, for the appellant.
-- contra.

Opinion:
Curia, per Johnston, Ch.
We perceive no sufficient ground to distrust the chancellor's judgment, touching the infancy of Elizabeth Messervey, and, therefore, his decree upon that point is affirmed.
We also concur in his conclusion, that the premises are liable in the hands of Gatewood to the plaintiff's demand. But we do not put the decree on this point upon any such ground as was intimated in argument. The remedy is not administered under the idea that the statutory mortgage or lien which attached upon the property when purchased by Mrs. Messervey, attended it into the hands of Phillip J. Messervey. The sale at which he purchased was made under that lien ; and divested the lien as in case of a sale under an ordinary mortgage.
Nor do we wish to be understood as putting the decree upon the ground indicated by the chancellor; that the purchase was void for mere non-compliance with the terms of the sale. It is not deemed necessary to determine that point; because there are stronger and better grounds for sustaining the decree.
We sustain the decision upon the ground substantiated by Gatewood's answer, that the title was obtained from the commissioner for his benefit and with his privity by one whom he knew to be incapable of paying the purchase money; having tested that fact in his incapacity to satisfy the demands which he, himself, held on him. While we take pleasure in stating that there is no reason to suppose that this defendant had the slightest suspicion that the authority under which Phillip undertook to receipt for the shares of his sisters was not genuine, we cannot shut our eyes to the plain fact that the eifort was to obtain satisfaction oí his demands by a merely formal proceeding; in which the property of others was to be applied to his debt, while they receive nothing and were expected to receive nothing for it. .So far as the knowledge of the agent to whom he confided the investigation of the title was concerned, he had notice of the anterior proceedings before he took his first mortgage; and he, himself, admits that before he took his title, he had such notice of the plaintiff's claim as should have put him on his guard.
In deciding this case upon the bona or mala Jides of the transaction we attach much importance to the fact that the mortgages and conveyance were not taken by Gatewood for money advanced upon the faith of them ; but as a security or satisfaction for an antecedent debt or liability. The case is substantially analogous to that of a person dealing with an executor for the assets of his testator's estate. In McLeod vs. Drummond, (14 Ves. 362) referred to in the circuit decree, Lord Eldon said: " The circumstance that the assignment is made, not as a pledge for money about to be borrowed, but for an antecedent debt, seems to me extremely material. Lord Thurlow, in Scott vs. Tyler, seems to have conceived that much depended upon that circumstance ; observing that three years after the death of the testator, the bankers took these effects, which they must know had been the testator's, from her, whom they also knew to be his executrix, not for money then advanced, but as a pledge for a debt contracted with them before, on her own accouut. Indeed, when the en-quiry is, whether the party taking the assets of the testator by means of such a pledge, is, or is not, guilty of fraud, it seems very material whether he is endeavoring to procure to himself payment of a debt already due, and which the executor has no means of paying with his own money, or is exercising a choice, whether he will or will not lend his money upon the pledge then offered to him. Undoubtedly, suspicion of fraud must ahoays arise, where a party, having- a debt due to him by the executor, takes in satisfaction of that debt, the assets which he' knows belong to the executor only in that character. But where a man is applied to for a loan of money, there is no motive for fraud. He may keep his money if not satisfied with the security. He has no interest in advancing his money upon a doubtful security, and taking his chance of getting it back by means of rendering that security available." This whole passage is pregnant with arguments against the transaction now under investigation. Can it be believed that Mr. Gatewood would have advanced money for these premises ? or that he would have accepted them either as a security or as a satisfaction ,of- his demands if his debtor had possessed other property sufficient to have indemnified him 1 He was driven by the necessities of his position to suffer loss or to indemnify himself at the expense of others, and, fully aware of the injury he was inflicting on them, he accepted mortgages and a conveyance from one who took a title for the mere purpose of transferring it to him. He therefore in justice and in equity occupies the position of Phillip J. Messervey under whom he holds and must be subject to the same risks and conditions. Indeed Phillip may be substantially regarded as his agent to procure the title for him from the master, and the principal, by well recognized principles of law, is chargeable with the acts of him whom he employs.
We turn now to the remaining ground of appeal, relating to the premises purchased by the plaintiff under executions against Mrs. Messervey.
It is alleged that this purchase was made at a sacrifice, under an agreement on the part of the plaintiff that the family should have'the benefit of it. The evidence rests in parol. It is argued that the family, trusting to the agreement, peimittedthe plaintiff to purchase at a sacrifice; that to allow him to retain the property under such circumstances would encourage fraud, and that, upon this distinct ground, independently of the statute of frauds, a trust should be decreed. Undoubtedly there are cases (such as McDonald vs. May, 1 Rich. Eq. 91) where a party, who enables himself to purchase at an under- rate by representing that he is buying for another, is liable to have his purchase set aside for fraud. These are cases where competition is fraudulently re duced or destroyed. In such cases, it matters not whether there was an agreement or not.
Indeed, in the latter case, where of course the representation is wholly false, that circumstance serves only to enhance the fraud complained of. Such cases as these steer entirely clear of the statute of frauds. The evidence of the purchaser's representations is received not for the purpose of substantiating the supposed agreement, but for the purpose of shewing the means by which he effected his fraudulent design, and when received it is employed not for the purpose of enforcing the contract but for that of setting it aside.
But no such circumstances have been developed in this case. The fraud insisted on consists merely in the non-fulfilment of the alleged agreement, and depends, of course, entirely upon the question whether there was in fact an agreement to be performed, and that preliminary fact the statute will not allow to be established by parol.
But these premises were purchased by Mrs. Messervey at the partition sale, and were subject in her hands to the statutory mortgage in such cases. That lien still attaches upon the property in the hands of the plaintiff; who purchased her property, and must take it subject to the incumbrances upon it at the time he bought. Upon this ground we think it liable to the extent of the interests of Sophia and Elizabeth in whatever balance of Mrs. Messervey's purchase may remain unpaid.
It has been insisted that the interests of the whole family in this balance should be credited upon the plaintiff's demand against Sophia and Elizabeth. . But very clearly Mrs. Messervey, being by her purchase both debtor and creditor to the extent of her own share, that must be considered as paid, and the plaintiff holds the property discharged from it. Then as to the shares of the children ; but three of them are parties to this suit. It would be improper to apply the shares of the absentees for the benefit of the parties before us ; especially when it is clear that upon no principle can such an application be sustained. But it does appear to us that the share of Phillip J. Messervey, by whom the sisters and Gatewood have suffered, should be taken into account; in order to save to these defendants (the sisters in the first instance) as much as possible of the wreck which he has left ; and it is ordered accordingly.
If after taking the account, it shall be necessary to sell the premises bought by the plaintiff under execution, by way of enforcing the lien of the defendants, Sophia and Elizabeth, an order to that effect may be moved for.
In all respects except as modified by this opinion the decree is affirmed and the appeal dismissed.
Johnson, Ch. concurred.
Dunkin, Ch., I concur in the result.