Case Name: Isaac Kinard vs. Stephen Hiers
Court: South Carolina Court of Appeals
Jurisdiction: South Carolina
Decision Date: 1851-05
Citations: 3 Rich. Eq. 423
Docket Number: 
Parties: Isaac Kinard vs. Stephen Hiers.
Judges: Dunkin and Dargan, CC. concurred.
Reporter: South Carolina Equity Reports
Volume: 24
Pages: 423–431

Head Matter:
Isaac Kinard vs. Stephen Hiers.
Plaintiff having an equitable interest in land, of which he was in possession, and which was about to be sold at a judicial sale, agreed, by parol, with defendant, that he, defendant, should purchase it for the benefit of plaintiff’s wife and children: defendant stated the agreement to several persons, and his statements were calculated to stifle competition among bidders, and actually did prevent one person from attending the sale and bidding: defendant purchased the land at about half its value, and then refused to comply with his agreement: Held, that defendant’s conduct was fraudulent; and he was not allowed to retain the land.
Before Dunkin, Ch. at Barnwell, February, 1851.
Dunkin, Ch. In 1843, a tract of land, belonging to the complainant, and containing about three hundred acres, was sold by the sheriff, and bid off by James Patterson, Esq. for sixty dollars. It is alleged that Patterson took and held the title under an agreement, that the complainant “ should have the right to redeem on the payment of the purchase money and interest.” The complainant retained possession of the premises, but the sheriff’s title was made to James Patterson. In January, 1846, James Patterson conveyed the premises to George Kinard, the brother of complainant, for seventy-nine dollars sixty cents, which seems to have been the amount, paid by James Patterson in 1843, including the interest and expenses. The testimony is very full and satisfactory, that George Kinard took the conveyance upon the agreement that, when the complainant paid him the amount, with interest, he, George Kinard, was to make titles to the wife and children of the complainant. George Kinard died before the money was paid. Adam Kinard and Hansford Kinard were the two sons of George Kinard, and administered on his estate. They proved the repeated acknowledgments of their father as to the agreement; and, after his decease, they consulted with A. P. Aldrich,- Esq. as to the mode by which they could carry out the agreement between their father and uncle. He advised that the land should be sold by the ordinary, and be bid off for the amount paid by George Kinard, with interest and the expenses of sale. The land was accordingly sold under the order of the ordinary, on the 7th August, 1848. Mr. Aldrich testifies that, the ordinary being sick, he conducted the sale for him. A calculation was made of the amounts due and the expenses, and the administrators were advised to run the land to a few dollars over the amount.
The land was set down by the auctioneer to the complainant; but when the return was made to witness, the land was set down to the defendant, Hiers. All the parties were present— the administrators, I. Kinard and Hiers. The matter was freely talked over, and they all appeared to have the same general understanding as related by the two Kinards, who were sworn as witnesses, and were the administrators. One of these witnesses, Adam Kinard, says, “ the land was ordered to be sold by the ordinary, for partition, and, when witness was coming up to the sale, the defendant, Stephen Hiers, riding with him, told him there was an understanding between him, Hiers, and the complainant, for Hiers to bid oif the land ; but Hiers told witness not to let the land go for less than the amount due to George Kinard. That the bargain was, that Stephen Hiers was to bid off the land for Isaac Kinard, and that if Isaac Kinard paid the bid and expenses of sale and interest, by the first of January, 1850, he, Hiers, was to settle the land on Isaac Kinard’s wife and children; and, if he did not, the land was to be Hiers’s.” The amount due, with interest and expenses of sale, was about $ 110. Hiers bid off the land at $>116. Isaac Kinard, complainant, was living on the land at the death of George Kinard, and at the. time of the sale by the ordinary. “ It was generally known (says the witness) in the neighborhood how the land was held by George Kinard for his brother Isaac, and that the children and widow of George Kinard desired that Isaac Kinard should have the benefit of said agreement. He (witness) said the land was worth more than it brought at the ordinary’s sale.” Hansford Kinard was in the company, riding up to attend the ordinary’s sale, and confirms, in every particular, his brother’s statement as to what passed, and especially as to the agreement between the defendant and complainant. This witness said he was not well acquainted with the land — that at the time of the sale, other men said they would have given more for the land if it was not that Hiers was going to befriend Kinard.
Michael Hiers proved, among other things, that the agreement between the complainant and defendant was generally understood in the neighborhood at the time of the sale — that the witness intended to be a bidder at the sale, and would have given more than the land brought; but in consequence of the understanding between Hiers and I. Kinard, he did not attend the sale : as Kinard was a poor man, he did not wish to interfere with him.
It was fully proved, and, indeed, is admitted in the answer, that, on the first Saturday of January, 1849, the complainant tendered to the defendant the full amount due under the agreement, and demanded a title, or a bond for titles, which was refused.
The principle which seems applicable to this case is stated in McDonald vs. May, (1 Rich. Eq. 98.) “ 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 shall be taken away from him on the ground of fraud.” That was a case in which the alleged agreement related to lands, and the agreement, as well as Ihe evidence of it, was in parol, which the Court deemed inadmissible. The principle is again noticed in Schmidt vs. Gatewood, (2 Rich. Eq. 177.) “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.” If there be no agreement, that “serves only to enhance the fraud ; such cases 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 showing 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.”
The land of Isaac Kinard was evidently worth at least double the amount at which it was bid off by the defendant. It is equally clear that he stated to several persons, and that such was the general understanding, that he was acting for the complainant, and with a view to befriend him, and, in consequence of this understanding, one person in particular, who would have bid more for the land, was prevented from attending the sale, “ because he did not wish to interfere with the complainant, who was a poor man.” If, then, there was in fact (as insisted by the defendant) no agreement or understanding that he was bidding for anybody but himself, he was guilty of a fraudulent misrepresentation to the several witnesses who testified on the subject. It is, therefore, ordered and decreed, that tire premises described in the pleadings, be sold by the Commissioner, on a credit until 1st January next, secured by bond bearing interest, with personal security, and a mortgage of the premises — that the defendant account for the rent of the premises since first Saturday in January, 1849 — and that after deducting this sum from the amount of his bid, $116, with interest from 7th August, 1848, ■the difference be paid to him from the sáles to be made by the Commissioner, and that.the surplus of said sales be paid over to the complainant — costs to be paid by the defendant.
The defendant appealed, on the following grounds.
1. Because, if there was fraud in the conduct of the defendant, it arose after the sale of the land by the ordinary, and existed in the refusal of the defendant to perform his alleged contract. •
2. Because, this being a judicial sale for partition, the proceedings cannot be set aside, unless for fraud in procuring it, or in the manner in which it was conducted.
3. Because the supposed agreement related to lands, and parol evidence of a promise to purchase and re-convey should not have been received, and that complainant had no interest whatever in the land at the time of the sale by the ordinary.
4. Because there was no promise proved, to purchase and re-convey the land to the plaintiff, but the promise or agreement was (as proved) that the defendant, upon certain conditions, would settle the land on complainant’s wife and children. There was no proof of any demand to comply with this agreement; but, on the contrary, it is in proof that Kinard desired the land conveyed to him, in order that he might make a speculation by conveying it to Chitty.
5. Because Kinard had no authority to bring this suit alone, for his wife and children were interested and should have been parties; whereas his Honor has ordered the land sold, and the proceeds paid to complainant.
'6. Because his Honor has ordered the defendant to account for the rent of the land since the first Saturday in January, 1849; whereas, it appears by the pleadings and proof, that the defendant has ■ never been in possession of the land, but has been kept out, and the same since the sale has remained and the use thereof has accrued to the complainant and his vendor, . Chitty, who is now in possession.
Owens, for appellant.
Patterson, contra.

Opinion:
Wardlaw, Ch.
delivered the opinion of the Court.
The question in this case is, whether the defendant shall avail himself of the statute of frauds to protect his legal title to a tract of land, in which the plaintiff had an equitable interest, where defendant acquired his title, by purchase at a judicial sale, for half of the value of the land, upon his representations calculated to stifle competition among bidders, and actually preventing the competition of one bidder, that he was buying for the benefit of the plaintiff. In the construction of the statute of frauds, Courts of Equity have adopted, as a general principle, that, as the statute is designed as a protection against fraud, it shall not be set up as a protection or support of fraud. 1 Story Eq. § 330. These Courts will not execute, specifically, contracts concerning lands which are not manifested in writing as required by the statute; but they will cancel conveyances obtained by fraudulent misrepresentations in parol, or impose upon the legal owners the character of trustees. The doctrine on this topic is expressed with force and discrimination in McDonald vs. May, (1 Rich. Eq. 95.) In the circuit decree of the Chancellor in that case, it is said: — " 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 the purchases by the purchaser here, 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." The Court of Appeals, in the same case, say: " 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 grounds of fraud." Again, in Schmidt vs. Gatewood, (2 Rich. Eq. 477,) the doctrine is reiterated, with the additional remark, that where competition is fraudulently destroyed or reduced, it matters not whether, in fact, there was an agreement or not for the benefit of the debtor.
In Meador vs. Jackson, (MS. Col. May, 1837,) the conveyance of a purchaser was set aside, who had bought lands of the defendant in execution at sheriff's sale, at a price much under their value, on the grounds, that the purchaser had urged the sheriff to make the sale, — and, by his assurances that he was buying for the benefit of the defendant in execution, had overcome the reluctance of the sheriif to sell under the circumstances of the case, — and had thus been enabled to buy at a great sacrifice.
The case before us seems to be completely within the scope of the principles announced in the cases cited.
It is argued that the whole fraud of the defendant in this case, consists in the refusal to execute a contract of which the evidence required by the statute is not exhibited. I cannot perceive why fraud may not consist in the unconscientious employment of a statute to protect one from fulfilling his agreement.^! f a son prevent a father from making a devise to another, by verbal assurances that the object of bounty shall receive without the devise all the benefit intended by the testator, the son shall not be allowed to reap any reward from procuring his father to omit the requirements of the statute. If May and Jackson, in the cases quoted above, had fulfilled their contracts for the benefit of the debtors, their conduct would never have become the subject of investigation in court; but as they attempted to acquire advantage to themselves, from professions of benevolence to the debtors in the first instance, cajoling others from the genuine liberality of buying for full price, they were ousted of the profits of their deceitful schemes.
It is objected that the plaintiff here did not have the legal title of the lands purchased by defendant; and that the heirs of plaintiff's brother, George Kinard, are the persons really defrauded, and yet are not parties to the suit. No objection for lack of parties is made by the pleadings, and the Court can hardly be expected sua sponte to demur for the exemption of perpetrators of fraud. And the plaintiff, although not the legal owner, is in possession of the lands, holding them subject to the lien of a debt charged upon them for the purchase money. He is in the nature of a mortgagor in possession.
Whether the wife and children of plaintiff, in a contest with him, may not maintain, successfully, that they are the real beneficiaries whom defendant has attempted to defraud, is a question that may arise hereafter when fraud is fixed upon the defendant by the decree of this Court. It is not for him to insist now upon technical defects that he has waived by the course of his pleading.
Whether the plaintiff may not be a trustee for his wife and children to the extent of his recovery in this case, will be best settled in a suit between the father and his family.
The circuit Chancellor, in requiring defendant to account for the profits of the land, overlooked the fact that plaintiff had remained, ever since the purchase by defendant, in possession of the land and in receipt of the profits. The decretal order in this respect is rescinded; in all other particulars, it is ordered that the appeal be dismissed and the decree be affirmed.
Dunkin and Dargan, CC. concurred.
Johnston, Ch.
I cannot concur in the decree.
If the defendant had complied with his agreement, it would be impossible to attribute a particle of fraud to him. His only fraud, therefore, consists in his non -performance of his undertaking : and there is no more reason to take this contract out of the statute of frauds than any other parol contract relating to land. If fraud, consisting m the mere non-performance of an agreement, or the injury resulting from it, be sufficient to take it out of the statute, every case of non-performance is taken out of it, and the statute is a nullity.
I feel very sure that this case does not fall within the principle stated in McDonald vs. May and Schmidt vs. Gatewood. The principle there stated is, that a fraudulent representation made at a sale of land, by which the purchaser enables himself to obtain the land at an under-value, to the injury of its owner, is good ground for setting the sale aside: and, then, the purchaser must be directed to deliver up his deed, or re-convey the property, — not by way of executing an agreement, but by way of restoring the property to the condition it was in before the fraudulent sale.
If we apply that principle here, we shall simply vacate the sale: and how would that benefit the plaintiff? What right has he to a conveyance ?
It is singular, it seems to me, to set aside the sale, in a proceeding to which the legal owners, the heirs of George Kinard, are no parties, and in the absence of any complaint on their part. And I am of opinion that it is equally singular to assume in the absence of these parties, that, if the sale were set aside, and the defendant ordered to re-convey to them, — they would be bound to transfer the title to the plaintiff. Resolved into its elements, the decree proceeds upon these principles; and not being prepared to go that length, I cannot concur in it.
It is a mistake, also, to assume that the sale in this case was fraudulent. The sale was fair, and no complaint is made that it was otherwise. How, thén, does the principle of McDonald vs. May apply: in which the very gist of the case was that, independently of all agreements, the sale was fraudulent?
Decree modified.