Case Name: CHRISTOPHER L. WARD v. GEORGE BRANDT, JESSE G. SHEPHERD and THOMAS J. CURTIS
Court: Supreme Court of North Carolina
Jurisdiction: North Carolina
Decision Date: 1867-01
Citations: 1 Phil. Eq. 71
Docket Number: 
Parties: CHRISTOPHER L. WARD v. GEORGE BRANDT, JESSE G. SHEPHERD and THOMAS J. CURTIS.
Judges: 
Reporter: North Carolina Reports
Volume: 62
Pages: 71–76

Head Matter:
CHRISTOPHER L. WARD v. GEORGE BRANDT, JESSE G. SHEPHERD and THOMAS J. CURTIS.
Where a trustee, holding land as security for a creditor residing in Pennsylvania, had been compelled, by a decree in a Confederate Court, to sell and pay the proceeds to one of its officers: Held, that such creditor could still subject the land to his debt, whilst in the hands of a purchaser with notice;
Also, that the remedy in such case is not to order the deed to the purchaser to be delivered up for cancellation, but to declare such purchaser affected by the trust.
The prayer of the bill being for a cancellation of the deed, and for general relief, the Court, declining to grant the former part of the prayer, under the latter, declared the purchaser to be a trustee.
Bill, seeking relief against a sale made by a trustee for a Pennsylvania creditor, under an order of confiscation by the District Court of the Confederate States, in 1862.
The bill was filed to Spring Term, 1866, of the Court of Equity for Cumberland, and alleged that the complainant, who was a citizen of Pennsylvania, being a creditor of the defendant Curtis, for about $4,000, had been secured by him, in the year 1855, by a conveyance of a house and lot in Fayetteville to the defendant Shepherd, as trustee ; that, the debt not having been satisfied at the breaking out of the late war, was confiscated under an act of the Confederate Congress, passed in September, 1861, and the trustee compelled, by an order of the Confederate Receiver, to sell the house in December, 1862, and pay over its proceeds to him; that at such sale the defendant Brandt became purchaser, paying the price to Shepherd in Confederate Treasury notes, and receiving a deed from him; and that he bought with full knowledge that the sale was made under an order of the Confederate Court, sitting at Salisbury; and that the money which he paid was to be applied under that order, and not for the benefit of the complainant. The prayer was that the deed from the trustee to Brandt might be delivered up to be cancelled, and for further relief.
A copy of the deed from Curtis to the trustee, which had been duly registered, was filed with the bill, as an exhibit, and recited the fact that complainant was of Bradford county, Pennsylvania.
The answer of the defendant Brandt admitted that the lot had been conveyed to Shepherd to secure a debt due by Curtis to Ward, and that at its sale be had become the purchaser; it denied that the price was paid in Confederate notes, and assorted that, on the contrary, it had been paid by bis check upon the Bank of Clarendon in Fayetteville, which check was good for its amount “ in good and lawful money; ” it also denied that he knew of any Confederate Court held at Salisbury, or that the house had been confiscated, and asserted that he bad bought bona fi.de, being assured by the trustee, to whom he had applied for information, that lie would get a good title; that no proclamation was made at the sale, that the house was sold as confiscated, but that it was then publicly said that it was sold as trust properly. The answer also denied that Brandt knew that Ward was of Pennsylvania, or was treated as an alien enemy, oí- that the proceeds of the sale were to be applied to satisfy any decree in a Confederate Court, or that the trustee could not remit them to the complainant. It admitted that Brandt was a merchant of Fayetteville, residing nearly opposite to the house last mentioned.
The deed from Shepherd to Brandt was filed with ihis answer as an exhibit, and recited that it -was ‘‘ between Jesse G. Shepherd, trustee of Thomas J. Curtis, under a deed of assignment in favor of C. L. Ward, of the one part, and George Brandt,” &c.
The answers of Shepherd and Curtis admitted all the material allegations in the bill.
Several depositions, taken upon the part of the complainant, tended to show, that the defendant, Brandt, had been informed in April, 1862, and again just before and upon the day of sale, that the house aves to be sold a.s confiscated property; that for some days before, as well as upon the day of sale, the trastee Avas absent in Raleigh, and that the sale aves made by a public auctioneer.
The deposition of the auctioneer, taken for the defendant Brandt, aves that at the time of the sale, in response to an inquiry, he had announced that a trustee’s title Avould be given; also that Brandt’s check AA'as good and aauis paid, and that B. Avas AA'orth its amount (viz.: §4,500) in gold, but that it AAras his impression that it Avas rrot a specie check, but payable in currency, which then Avas Confederate money; and that A\dien the trustee employed him to make the sale, he had informed him that the house Avas sold in consequence of a decree of the Confederate Court.
Phillips (b Battle, for the complainant.
1. The complainant sets up an equitable right, claiming that Brandt comes Avithin the principle of the exceptions to the rule in North Carolina, that a purchaser from a trustee need not see to the application of the purchase’monoy. lie kneAv that the money Avhich he paid would go to the use of the Confederate States, or, at all eArents, that it could not, go to the complainant. Maxwell v. Wallace, Bus. Eq„ 280.
2. Under the law oí postliminy the complainant- is entitled to have his equitable estate in this house, (which, under the proceedings of the Confederate Court, Avas AÚrtually captured^) restored to him, since it has been re-occupied by the United States. 1 Kent, 109, 110; 3 Phillimore, Tut. LaAV 505, 731, et seq.
Bragg and Person, for the defendant Shepherd.
Hcdgh and McDuffie, for the defendant Brandt.

Opinion:
Pearson, C. J.
The scope of 'the bill is to set up a trust, according to which the house and lot mentioned in the pleadings was held by the defendant Mr. Shepherd, in order to sell and pay off, when required, a debt due by Curtis, one of the defendants, to the complainant, and to pay the excess of purchase money to Curtis; and this, upon the allegation that Mr. Shepherd exposed the house and lot to sale at public auction, and conveyed the premises to the defendant Brandt, not for the purpose of executing the trust in favor of the complainant, but for the purpose of excluding him, and diverting the. trust fund so as to pay it over to the Confederate government, under the pretext that the fund was payable to the Confederate government by reason of certain confiscation acts, by force and effect whereof that government, instead of the complainant, had become entitled to receive the debt secured by the deed of trust.
This equity does not rest on the notion that a purchaser at a trustee's sale must see to the application of the purchase money, but upon a broad principle of justice, recognized and acted upon in Courts of Equity, and which is too. plain to admit of discussion. It would have been "plainer sailing " had Mr. Shepherd set out in the deed executed by him to Brandt, the purpose and reason for exposing the property to sale and passing the legal title, for there can be no question that the original trust in favor of the complainant, or the resulting trust in favor of the defendant Curtis, are still subsisting, and must be made to attach to the house and lot, unless Brandt can protect himself as a purchaser without notice under the rule "When equities are equal the law prevails." And as the complainant does not seek, by his bill as framed, to charge Mr. Shepherd for the breach of trust, but only to follow the land and subject it in the hands of Brandt to the original trust, the whole matter is narrowed down to the single point, Has the complainant fixed Brandt with notice, so as to affect his conscience, and make it ini quitous in Mm to insist upon the legal title ? so as to bring the case under the principle by which Courts of Equity relieve against fraud or illegality in procuring the execution of deeds, by converting the party into a trustee.
It would have better evinced on the part of Mr. Shepherd the desire, which no doubt he felt, to protect the interests of liis eestuy que trusts, as far as it was in his power to do so under the circumstances in which he was placed, had he set out in Ms deed to Brandt the fact that he made the sale at the instance and by order of the Confederate government, through its agent, Mr. Wilder. That would have furnished his cesfoiy que trusts with full evidence to fix the purchaser with notice, and have enabled them, without any difficulty, to set up their equity upon the events which have since transpired. The complainant has undertaken to supply tills omission on the part of his trustee, and we think lie has succeeded in doing so.
The defendant Brandt, in order to avoid giving up valuable property, which would have been Ms had the late war resulted differently, was evidently greatly tempted, in framing Ms answer, to deny notice, by the use of general terms, atid he shows a want of candor, in trying to take advantage of ignorance of what is considered in equity sufficient notice to afreet the conscience, and prevent a party from setting up a legal title, in order to deprive one of his original equity. We need hardly repeat that such circumstances as will put a man of ordinary prudence upon inquiry amount to notice. Without entering into a particular discussion of the prod's in the cause, the admission in the answer of defendant Brandt, that he made inquiry of Mr. Shepherd as to whether he could make a good title, tends strongly to show the existence of circumstances calculated to excite inquiry; for if the trustee had been selling' in the usual way, in order to pay off the debt secured by the deed of trust to the party entitled to the money according to the provision of tlio deed, there would have been no occasion to ask for any such assurance; and, taking this admission in connection with the general tone of the answer, the proofs in the cause and such matters of public notoriety, of which the courts take notice as part of the history of the times, the court declares the fact to be that the defendant Brandt purchased with notice, and that ho bought under the expectation and belief that if the independence of the Confederate States should be established, he was acquiring a good title; otherwise, he would bo subject to the trust and to the equity of the complainant, and to the resulting trust of the defendant Curtis.
The specific relief prayed for by the bill is to have the deed, executed by Shepherd to Brandt. " set aside and delivered up to be cancelled.1' That relief is only appropriate when there is fraud in the fad/mi of the deed. Under the general prayer, however, the complainant is entitled to a decree, declaring Brandt a trustee, and directing a sale by the Clerk and Master; and requiring the defendants, Brandt, Shepherd and Curtis, to join in a conveyance to the purchaser. The proceeds of the sale, together with the amount for which Brandt is chargeable on account of rents, (as to which there will be an account,) will bo applied, in the first instance, to the satisfaction of the complainant's debt and interest, and the surplus, if any, will be paid to defendant Curtis; and Curtis will be allowed, in respect of his resulting trust, the privilege of discharging the complainant's debt and interest by a given day, six months from the first day of this term, in which case the defendants Brandt and Shepherd will execute a deed to him, to be approved of by the Master. The complainant's costs will be paid by the defendant Brandt.
Per Curiam.
Decree a eoordiugiy.