
    George K. Morton, E. Pugh Davis, and Joseph Caruthers, vs. The Presidents and Trustees of the Grenada Male and Female Academies.
    An allegation of fraud in a bill is usually considered as giving a chancery court jurisdiction, and as a general rule such allegations require an answer; but if the subject-matter of the bill be such as the court cannot act upon ; or where it is palpable that the case made by the bill, aided by the discovery sought, is wholly without the pale of chancery cognizance; then an answer would be unnecessary, as it could avail nothing. If the case, however, is in any degree doubtful, the allegation of fraud should be answered.
    A demurrer to a bill for want of equity on its face will not be sustained, unless the court be satisfied that no discovery or proof called for properly by the bill can make the subject-matter of the suit a proper case for equity cognizance.
    School lands are trust property for the benefit of the whole township in which they are situated, and the legislature has no power to divert them from that purpose.
    Whether the legislature can substitute other school trustees for a township, instead of those who had been appointed under the general law, quare ?
    
    An execution is not void when it does not appear of record that the judgment upon which it issued, was satisfied; and a Iona fide purchaser under such an execution will be protected. But one who purchases knowing that the judgment on which execution issued has been satisfied, is not a hona fide purchaser.
    Appeal from the district chancery court at Carrollton ; Hon. Henry Dickinson, vice-chancellor.
    This was a bill filed in the district chancery court held at Carrollton in Carroll county, by the President and Trustees of the Grenada Male Academy, and the President and Trustees of the Grenada Female Academy, alleging that by an act of the legislature of Mississippi, passed and approved on the 15th day of February, 1839, they were created bodies corporate; that on the 6th day of February, 1841, the legislature modified in some degree the first act of incorporation. Copies of both acts were filed as exhibits to the bill. That by virtue of the 5th section of the first act, and the second section of the second, complainants obtained possession of sundry assets belonging to the school fund in township 22, north, of range 5, east; and amongst them of four bonds for the sum of $1800 each, all executed by Andrew R. Govan, and John A. Binford as his surety, in consideration of a lease for ninety-nine years to Govan of the 16th section in the above-named township, and all made payable to George K. Morton, as president of the board of trustees of that section. That Binford, being anxious to escape from his responsibility for Govan on account of the bonds, made an arrangement, in the spring of 1842, with E. Pugh Davis, who had been fully empowered by Govan to do so, to set apart and appropriate a large quantity of land, which was described in the bill, for the payment of the bonds. That on the 26th day of April, 1842, Binford communicated to Morton, who was then president of the Grenada Female Academy, that the land had been so set apart and appropriated, and that E. Pugh Davis and himself were then willing and anxious to convey the whole of the lands to the complainants in discharge and satisfaction of the bonds; that Morton, with the design of defrauding complainants, impoverishing the citizens of the township, and depriving their children of the means of education, requested Bin-ford to say nothing further in relation to the proposition to any other person, but maintain the utmost secrecy about the matter. That very soon after that time Morton, secretly and without knowledge or assent of complainants, illegally and fraudulently took the bonds from the strong box of the treasurer of complainants, where they had been deposited for safe keeping, and gave them up to E. Pugh Davis for the lands described in the bill and referred to by Binford, and took from Davis a blank deed to the same, with the view and for the purpose of defrauding complainants; that Davis well knew that Morton had no authority to use the bonds in that way. That Joseph Caru-thers, who was a relation of Morton, combined with him to defraud complainants, and had the blank deed filled up with his name; which was done not only to defraud complainants, but also to conceal the property from Morton’s creditors, he holding himself out to the world at that time as insolvent. That Morton and Caruthers, to accomplish their fraudulent intentions, and to hinder and delay complainants as much as possible in the assertion of their rights, had for more than two years secreted the deed, and refused to have it recorded in the proper office in the county where the lands were situated. Complainants further charged that immediately after Morton had so illegally and unwarrantably disposed of the bonds of Govan and Binford, he proposed to Septimus Caldwell, who was in the possession of a large frame house in the west ward of the town of Grenada, called Caldwell’s tavern, and for which he knew Caldwell had not paid and had no title, to give him, Caldwell, his, Morton’s, note for about five hundred dollars, and also a small lot in the east ward of Grenada, if Caldwell would convey by quit-claim to whomsoever Morton might direct, the tavern and -the lots on which it was erected, and Caldwell acceded to the proposition. That Morton then by false and fraudulent representations to complainants, stating that he had consulted eminent lawyers who advised him that the lease to Govan was.illegal and void, and the bonds executed therefor by Govan and Binford were consequently without 'consideration and worthless; but that for twenty-five hundred dollars of those bonds, Caldwell would sell to complainants his tavern, which would answer admirably for a male academy, and that he, Morton, knew a good title to the tavern could be procured for that amount of Govan and Binford’s bonds; that those and other false and fraudulent statements prevailed on complainants to sign a written agreement authorizing the investment of any portion of their assets in the purchase of Caldwell’s tavern. That Morton, after the agreement was signed by complainants, without their knowledge or assent, and without any pretence that the written agreement gave him any express authority so to do, and against the positive instructions of one of the trustees of the male academy, who accidentally found out what he was about to do, consummated his arrangement with Caldwell, and received from Caldwell a quit-claim deed to the tavern in the name of complainants; and gave Caldwell in exchange the small lot in the east ward of Grenada, north, not exceeding two or three hundred dollars, and his note for five hundred dollars. That Morton had repeatedly endeavored to get complainants to take the tavern aud lots on which it stood, in payment of all four of the bonds executed by Govan and Binford, and they had invariably refused to have anything to do with the tavern or take it off his hands ; that he purchased it with his own funds, and must risk the consequences. That the tavern and lots were still bound to John Smith for the purchase-money due by Caldwell, and Smith had instituted suit to recover possession of the same. Complainants further charged that Morton had been removed from, his office of president of the Grenada Female Academy, and expelled from the board of Trustees, on account of fraudulent conduct in the premises. That knowing complainants were about to institute suit against him to compel him to surrender up the bonds of Govau and Binford, or-the land he received from Davis, the more successfully to carry out his fraudulent and swindling intentions, he purchased from Ephraim S. Fisher and wife the same lands he obtained previously from Davis, and gave Fisher and wife three hundred dollars for their quit-claim, which deed was also taken in the name of Caruthers, a copyof which deed from Fisher and wife to Caruthers was made an exhibit to the bill. Complainants charged that Fisher’s only title to the land was derived from a purchase at a marshal’s sale under three judgments against Govan, all three of which had been fully satisfied long prior to the sale; that Fisher gave for the whole of the land only six dollars and seventy cents, and it was worth at least two thousand dollars. That the sale to Fisher was void, not only because of the gross inadequacy of the price paid for the lands, and of the prior satisfaction of the judgments under which the sale was made, but also because long before the rendition of those judgments Govan had conveyed those and other lands by deed of trust duly acknowledged and recorded, and bearing date the 31st day of May, 1840, to E. Pugh Davis and William Crump, to secure the payment of various debts due by Govan, and especially the bonds executed by himself and Binford in favor of complainants, and by the terms of the deed of trust either of the trustees was authorized to sell either at public or private sale the whole or any part of the lands therein conveyed, for the payment of any of the debts therein specified. The marshal’s deed to Fisher and the deed of trust were both made exhibits to the bill. Complainants further charged that Morton, Davis, and Caruthers were confederated together to defraud and swindle them out of both the bonds and lands. George K. Morton, E. Pugh Davis, and Joseph Caruthers were made defendants. The prayer was that the deeds from the marshal to Fisher, and from Fisher and wife to Caruthers be declared null, and that the lands be sold for the benefit of complainants, and for general relief.
    To this bill the defendants demurred, and assigned for causes of demurrer : 1st. If said prayer is granted, the property vested in Davis again becomes a common fund to pay all Govan’s debts, and his creditors are necessary parties. 2d. The charter conflicts with the act of congress, which gives the funds to the township, and the legislature has no power to limit the funds to a portion of the township. 3d. If they have any relief at all, it is at law upon the bonds, as the bill shows that they can be identified, and Binford is still liable. 4th. Because said bill is in every respect insufficient. The vice chancellor overruled the demurrer, and granted the defendants leave to answer. Whereupon they prayed an appeal to this court.
    Fisher, for appellants.
    The bill is defective in at least twenty respects.
    1. It has not the proper parties. Caldwell, Fisher and Bin-ford, and Govan’s representatives are all necessary parties.
    2. It is multifarious. It proposes to cancel the deed made by McClung to Fisher, and the deed by Fisher to Caruthers. The transaction between Morton and Caldwell, is introduced into the bill, for what purpose it is difficult to say.
    3. The bill sets forth the amount, dates, and time when payable of the writings obligatory, made by Govan and Binford, and no reason is alleged, why the contents of these writings' cannot be proved in a court of law.
    4. If Morton acted without authority, as the bill alleges, the title to the writings obligatory remains unchanged, as they were trust-funds, and one member of the corporation could not act in the premises. Of course then, Govan and Binford are still liable thereon.
    
      5. The bill must propbse to take the land from Morton, on precisely the same terms, as he received it from Davis. If Morton took the land in full payment of the several- writings obligatory from Davis, the complainants must elect to confirm Morton’s acts and take on the same terms, or disregard his acts and look to Govan and Binford for payment.
    6. The complainants have no power to make any election in this case, according to the bill. The bill says that the land was, and is worth f¡2000. They have no power to elect to take $2000 worth of land, for $9000 secured by these writings obligatory, unless they show by the bill, that Govan and Bin-ford, are in such desperate circumstances, that $2000, could not be made by a suit and judgment at law against them.
    7. It cannot be ascertained from the bill, whether the complainants are seeking by the bill to protect the interest of the academies, or the good people of the township generally.
    8. If the complainants are acting for the benefit of the township generally, they can only perform such duties, and possess such rights as belonged to the trustees of the township. In which case they could not make their election to take the land; the trustees of the township having no power to hold lands, except the control over the sixteenth section, and the complainants by virtue of their charter, possessing no power to hold lands, except for the benefit of the academies.
    9. The secoud section of the act of the legislature p. 21 and 22 of the bill, confers on the complainants no right to demand or receive the writings obligatory given by Go-van and Binford; but merely a right to receive the money when collected. The act requires the complainants to appropriate the “ funds,” as the trustees of the township could have done. The language of the act is this, (last clause of act): “ With a view, and for the purpose of appropriating them in accordance with all the laws now in force concerning said funds.” What were the laws then in force? They were that the money should be lent at ten per cent, interest, which interest should be applied to the use of schools in the township, &c. This was all the power the complainants possessed under this act.
    10. This act (second section) is unconstitutional, as it seeks to divest the trustees of the township of a vested right.
    11. It is void for its uncertainty, as it does not repeal the laws regulating the duties of the trustees of sixteenth section, but leaves those laws in full force. A law is not to be repealed by mere implication, unless the intention of the legislature is manifest.
    12. It conflicts with the act of congress, which gave the lands to the township, generally, and the legislature cannot take from the township this general interest, by giving the proceeds of the section to a particular portion of the people in the township. The act of congress in this respect, cannot be limited by the state legislature. This position is assumed in the event it should be contended that the writings obligatory were given to the academies by the act.
    13. The trustees of the township should be made parties to the bill. It is deemed unnecessary to assign any more objections.
    Acee, for appellees.
    The demurrer in this case cannot be sustained, because it is a general demurrer to the whole bill, and there is no answer accompanying it, denying the fraud charged.
    The doctrine is now too well recognized to be controverted, that whenever fraud is charged in a bill, that no matter what species of defence the respondent may adopt, he must negative the allegation of fraud. Anderson v. Lewis, Freeman’s Chan. Rep. 2Ü6. So, if respondent plead to such a bill, he must deny the fraud by his plea, and by an answer in support of the plea. Ib. And if a general demurrer be filed in such a case it will be disallowed. Ib.
    
      “If a bill contain an allegation of fraud, it is a general rule that the allegation of fraud must be denied by answer, whatever defence may be adopted as to the other parts of the bill, because fraud gives jurisdiction to the court, and lays a foundation for relief; hence a general demurrer to a bill containing such an allegation cannot be allowed.” Niles v. Anderson, 5 How. R. 364, 386.
    The facts of this case bring it within the principle “ that where lands are purchased with trust funds, a trust will be implied, and that too, not only where the party may be presumed to act in execution of the trust, but even when the investment is in violation of his trust.” 2 Sto. Com. on Eq. 457.
    So where there is a palpable and gross violation of a trust reposed in a trustee, he will be held accountable for all the consequences. Contee v. Dawson, 2 Bland’s Ch. R. 264-287.
    In the case of a purchase by a trustee in his own name, in pursuance' of the trust, the cestui que trust is entitled to the estate; but where it is purchased with trust money, in violation of the trust, the cestui que trust has a lien on the estate, and not a right to the estate.' Atherly on Marriage Settlements, chap. 28, 443, 444; 2 Story’s Com. on Eq. 458, note.
    It is upon this ground that the complainants seek to remove the clouds thrown, by the pretended and fraudulent deeds to another, over the true title to the lands purchased with trust funds by Morton, for the purpose of having said property decreed to be the property of Morton, and then subjecting the same to the lien of complainants.
    This is necessary as a precedent step; but such a proceeding does not revest the title in either Davis or Fisher, nor does it operate as a reconveyance of property, subject to the claims of Govan’s creditors, as it is supposed by counsel.
    “ In practice, it is usual to direct a release of the right of a party under a deed which is set aside as constructively fraudulent; but it will not be necessary to direct a release or recon-veyance, when a deed is declared an absolute nullity, from fraud and imposition in the manner of it, except under special circumstances, and ex abundenti cautela.” Henriques v. Hone, 2 Edw. Ch. R. 120.
    
      The remaining point made by the demurrer, to wit, “that the charter conflicts with the act of congress, which gives the funds to the township, and the legislature has no power to limit the funds to a portion of the township,” is equally untenable. In the first place, neither the act of 1839, creating the complainants bodies corporate, nor the act of 1841, amendatory of the first act, confines or limits the funds transferred to their keeping, to only a portion of the township. By the fifth section of the act of 1839, the funds belonging to township 22, north, of range 5, east, are transferred to complainants, “ subject to all the laws now in force in regard to school funds.” And by the second section of the act of 1841, complainants are authorized to call upon any person or persons having the funds of said township, “ with a view, and for the purpose of appropriating them in accordance with all the laws now in force concerning said funds.”
    While the legislature cannot pervert the funds arising from the 16th section, to purposes foreign to the object intended by congress, still that body may interpose any body corporate or otherwise, as trustees, to carry into effect the benevolent intention of the donor.
    By the act of 1821, (see Rev. Code, 408, sec. 17,) the president and directors of the literary fund were invested with this power. Then came the act of 1824, (see H. & H. 125, sec. 16,) which authorized the appointment of five persons as “ trustees of schools and school lands.” Afterwards, by the act of 1833, the board of county police were empowered to act in this capacity, under certain circumstances. H. & H. 131, 132, sec. 30. The legislature then, in conferring this power, and imposing this duty on the complainants, neither exceeded its authority nor violated any act of congress.
    
      A. C. Baine, for appellants.
    The only difficulty I expect to meet with, in reversing the judgment of the vice-chancellor, is that the confused fraud charged in the bill is not answered. To this point I shall first address myself. I first assume that the purchase of Fisher is not fraudulent, eren if the charge be sufficiently explicit, that he purchased with notice, that the judgment had been paid, under which he purchased. In support of this, I rely on the case of Van Cam,pen v. Snyder, 3 How. 66. If this be so, you may grant that Morton, prior to his purchase from Fisher, perpetrated all the frauds reported in the books, and had express notice of all the strange and jumbled ones, attempted to be defined in this bill, and they cannot invalidate his purchase from Fisher. For the rule is well and definitively settled, that “ a purchaser with notice to himself, from one who purchased without notice of a fraud, may protect himself under the first purchase.” Bnmpns v. Plainer et ais. 1 Johns. Ch. R. 213.
    Again, the complainants show very clearly they have no title or interest in the subject-matter of controversy. They set themselves up as a sort of commissioners of morals, come here to set aside a transaction as fraudulent, that can in no wise concern them, under the constitution and laws of the land, granting everything they say to be so; for the reason that by the constitution and laws they never could, by any possibility, derive any title or interest in the subject-matter of controversy. Why 1 Because the legislature could not divest the title and interest of the inhabitants of the township of this sixteenth section, and appropriate it to these complainants. I think it too clear for argument, that this section and its proceeds were vested in the inhabitants of the township. If I am right, even in this position, and wrong in the others, the relief here sought cannot be granted in any aspect in which the facts of this case can be presented. From the foregoing, I deduce the conclusion, that if the relief sought cannot be granted, then the fraud charged in the bill need not be answered. A demurrer to the relief sought is, in the nature of things, a preclusion to the right of discovery. Courts never require discovery from mere idle curiosity, but only for the purpose of enabling them to grant relief. It would be an absurd waste of time, labor and expense, to the courts and to the parties, to grant it, when if given, (and when given, admitting every charge of the complainant,) no relief could be decreed.
    
      Fraud must be accompanied by injury before any relief can be granted. Hall v. Thompson, 1 S. & M. 489.
    Until a man establishes a title, he has no right to interfere with fruitless, oppressive, and unnecessary litigation. Wiggins et al. v. Armstrong et al. 2 Johns. Ch. R. 144.
    A demurrer to the relief is good against discovery. Story’s Eq. Plead. 254, and authorities cited; lb. 219, 220.
    This is enough, without going into the particular, but glaring defects of the bill. For instance, there is a charge that one object Morton had, was to defraud his general creditors ! Are we to answer that? In another place it states what method he adopted to disguise his swindling! It seeks to set aside Fisher’s title, for inadequacy, without making him a party, and substantial relief against Binford, when he is no party, and the same of others. It seeks inconsistent relief. For when closely scanned, it demands about this : first, that the sale do not stand; second, that it do stand ; thirdly, when cancelled and the land sold, that Morton stand good for deficiencies; and if he be not good for them, that Binford shall make him good; and a pile of other absurdities, which, if the court decides a demurrer is good without answer to the fraud, are so glaring and obvious as to need no particularizing for the observation of the court. But I contend, if the court think that the fraud ought to be answered, still the cause must be remanded to the docket for other .parties, before a final decree can be made.
   Mr. Chief Justice ShaRkey

delivered the opinion of the court.

The facts of this case are extremely complex, and many of them immaterial, so far as the merits of the present controversy are concerned, it being but an appeal from a decision on a demurrer to the complainants’ bill. It seems that the appellees, as bodies corporate, obtained rightful possession, as it is alleged, of certain securities which had been given by one Govan as principal, and Binford as surety, for a lease of school lands, and being desirous to liquidate the same with the complainants, a proposition was made by Binford, that one Davis, who was the trustee of Govan, should convey to the complainants certain lands which had been conveyed by Govan to Davis for that purpose. The proposition was made to appellant Morton, who was president of the board of trustees of the female academy, and with whom the notes had been deposited for safe keeping. Morton requested Binford to keep the matter secret, and he would see what could be done, and give him an answer. Some time afterwards, Morton took the notes from the place of deposit, and consummated a contract for the land, taking a deed in the name of a friend, who is also made a defendant to the bill, and delivering up the notes. This it seems was done without the knowledge or approbation of the complainants. After-wards, Morton proposed to purchase for complainants a house and lot in the town of Grenada, and obtained the consent of some of the members of the corporations, that the notes of Go-van and Binford should be appropriated in that way. He bought the house, but not with the notes, and took a quit-claim deed in the name of the complainants, but acquired no title, as the house was still bound for a part of the purchase-money. It seems that afterwards, the marshal sold the land which Morton had bought under executions, and that Fisher became the purchaser for a very small sum, and afterwards conveyed to Morton’s friend, and the object of the bill is to subject these lands to a lien for the amount of the notes, or to have them declared trust property. This general outline presents only the prominent facts. The bill contains allegations disclosing the several steps taken to consummate a design which it charges to have been fraudulent. The respondents demurred, and took an appeal from the decree of the vice-chancellor, disallowing the demurrer.

The counsel for appellants seemed to think that there could be no difficulty in reversing the judgment of the court below, except for the rule which requires an answer to a charge of fraud contained in a bill. To obviate this difficulty, it is assumed that the purchase of Fisher was not fraudulent, even if he purchased with notice, that the judgment under which the land was sold had been previously satisfied. The case of Van Campen v. Snyder, does not go to this extent. It only decides that a bona fide purchaser under a judgment which has been satisfied, will be protected, if it does not appear that the judgment has been satisfied. This we need not now affirm or deny. The cases of Luddington v. Peck, 2 Conn. 702, and Jackson v. Caldwell, 1 Cow. 622, cited in Van Campen v. Snyder, only hold that an execution is not void, when it does not appear of record that the judgment has been paid, and that a bona fide purchaser under such execution will be protected. But one who purchases, knowing that the judgment has been satisfied, is not a bona fide purchaser. It is also argued that as Fisher’s purchase was not fraudulent, Morton, who holds under him, will be protected, although he*may have committed fraud in the original purchase from Govan’s trustee, and the case of Bumpus v. Platner, is relied on. That would be undoubtedly true as to any other person than Morton, and even notice to him it seems would make no difference; but he is said to be the perpetrator of a fraud in reference to this same land in his original purchase. It may be that no title passed fo Fisher by the marshal’s sale, and that Morton derived none from Fisher; and that the case must stand as though these sales had not taken place, and if that be so the case does not fall within the authority.

It is again argued that the complainants show no title to the notes, inasmuch as they belonged to the trustees of schools for the township in which the section that Govan purchased was situated, and could not be taken from them by the legislature, and vested in complainants. On an examination of the acts, this point is not so clear. The sixteenth section was certainly a trust property for the benefit of the whole township, and could not be diverted from that purpose. The question of power seems to have been in the mind of the legislature, and hence whilst the funds soon vested in the corporations, they were only vested, as the act declares, subject to all the laws in force in regard to school funds. The apparent effect then, was to substitute the corporations as trustees for the township, instead of those who had been appointed under the general law. We do not decide that the legislature had such power; perhaps it had not; but even if the effect of the act be doubtful, it places the rights of complainants in a more favorable light than, that presented by counsel for the appellants. It must be conceded that the legislature had no power whatever to divert the fund from the use of the township, and if such be the effect of the act, it is so far inoperative.

It has been insisted that inasmuch as complainants have shown no right whatever on which it is possible for the court to found a decree for relief, the general rule that there must be an answer to an allegation of fraud, does not apply. There may be cases in which an allegation of fraud would not require an answer. Such an allegation is usually considered as giving the court jurisdiction, but other circumstances must also be taken into consideration ; the subject-matter must be such as the court can act upon ; but when it is palpable that the case made by the bill, aided by the discovery sought, is wholly without the pale of chancery cognizance, then there seems to be no use in an answer, as it avails nothing. But if the case is in any degree doubtful, the fraud should be answered, and this we apprehend was all that was intended to be asserted in the case referred to, as establishing the rule. But as this demurrer can only reach the defects in the bill, on the ground of a want of equity, it is safest to act on the rule that a demurrer for such cause will not be sustained, unless the court is satisfied that no discovery or proof called for properly by the bill, can make the subject-matter of the suit a proper case for equity cognizance. Bleeker v. Bingham, 3 Paige, 246. We cannot now say what may be the result of further progress in this suit. Perhaps it may disclose a meritorious case on the part of complainants. We only mean to decide that the case is not so entirely destitute of all apparent equity, as to justify a demurrer without a denial of the fraud. This is as far as we are required to go to justify an appearance of the decree disallowing the demurrer. We are asked to give a final decree on the merits for complainants, but this we cannot do on the state of case presented. The parties had leave to answer, and we think it proper that they should still be allowed that privilege.

Decree affirmed, and cause remanded for answer.  