Bethel v. Sharp

Walker, J. The first question presented by this record, is, whether Bethel resorted to such fraudulent means, to prevent competition, at the sheriff’s sale of the land in controversy, as rendered his purchase void as against the defendants in error. The testimony of Slaten is clear and unequivocal that Bethel prevented his attending the sale, by assuring him that arrangements had been made to settle the judgment. This assurance was given by Bethel in reply to a statement of the witness, that he would be willing to satisfy the debt for ten acres of the land, if it could have been conveyed by the defendants in error. This witness also states that he had designed to attend the sale, and satisfy the judgment, by bidding off twenty acres of the land. When this evidence is considered in connection with the previous offer of Morris to pay the debt, and take a lease on a part of the place to reimburse him, together with Bethel’s repeated statements, to different persons, that he intended to make the purchase for a home, and intended to let the heirs have it, upon their refunding to him the purchase money, we are irresistibly impelled to the conclusion that Bethel’s design was, by these means, to prevent competition, and thereby become the purchaser at less than the one-seventh part of its value. He must have been conscious that few persons are disposed to compete with orphans in the purchase of property, or are disposed to take their slender patrimony at a. small fraction of its value ; and knowing this fact, he doubtless appealed to the better feelings of the neighbors and friends of the children, and by assuring them that the purchase was for their benefit, was enabled thereby to prevent competition, become the purchaser, prevent redemption, and acquire a sheriff’s deed at almost & nominal sum. Had it not been for his false representations, Slaten would have satisfied the debt with twenty acres of the land, and thus the loss to the heirs would have been comparatively trifling. Taking ¿11 the facts in proof into consideration, we have no hesitation in saying that they clearly establish a fraud on the part of Bethel, in preventing competition at the sale, which entitles the defendants in error, so far as his rights are involved, to have the sale avoided. We then come to the question whether White, who was a purchaser from Bethel for a valuable consideration, was chargeable with notice, either actual or constructive. When all the evidence is considered, we think it may be fairly inferred that he knew the mode in which Bethel had acquired the land. But if in this we are mistaken, it is manifest, from the evidence, that he knew that the heirs were the equitable owners of the land, as he stated to Coleon that he would not have made the purchase of Bethel, if he had not agreed to purchase forty acres of land for each of the heirs. This he also said in substance to two other witnesses, and another witness heard Bethel tell White that he would make such a purchase for them. The defendants in error had the undoubted right, notwithstanding Bethel’s fraud, to treat him as a trustee, and to proceed against him as such. 1 Story Eq., secs. 439, 1265. And the doctrine is equally well settled, that a purchaser of trust property, with notice of its existence, becomes a trustee, and can only hold it subject to the liability of his grantor to respond to the existing trust; and he cannot be heard to defeat it, notwithstanding he may be a purchaser for a full consideration. 1 Story Eq., sec. 395. To permit such a purchaser to defeat the trust, or equitable rights of others, when he has full knowledge of their equities, would be iniquitous and unjust, and cannot be tolerated in a court of equity. White seems to have had such knowledge, when he purchased, if we may regard his declarations, and having purchased with notice of the fraud, and the equitable rights of defendants in error, he has acquired the property as their trustee. It may be asked, whether a conveyance of a portion of this property by White to Harper, changed the rights of defendants in error. That depended upon whether Harper was a purchaser for a valuable consideration. If he took as a mere volunteer, or with notice of the existing equities of defendants in error, he, in either event, became their trustee, and held the property, charged with their equitable rights. It is not claimed in the pleadings or evidence, that Harper paid any consideration to White for the land.- And when it is remembered that he was the son-in-law of White, the presumption is that none was paid, or it would have been proved. The inference, in the absence of such proof, is that he took as a volunteer. And it appears that by his death, the land passed to his child, and by its death, to his widow, the daughter of White, and by her death, to White, and his wife, and their children. They have all of them in succession inherited the property of Harper, severally as volunteers, and as such, hold it as it was before, liable to the equities of the defendants in error. The decree of the court below is therefore affirmed. Decree affirmed.