
    Blair v. Bass.
    If a debtor execute to his creditor an absolute deed of conveyance for real estate, with a verbal condition that the grantor shall have the right, for a specified time, to redeem by payment of the debt, the deed is but a security for the debt.
    
      The assignment of a debt so secured .carries the security with it.
    The debtor in such ease may waive the right to redeem, and authorise the creditor to sell the land in order to obtain payment; and in case of a sale, though the debtor’s design in authorising it be to defraud other creditors, a honafide purchaser for yalue will be protected by a Court of equity.
    If A. purchase land with iJ.’s money, and take the conveyance in his own name, he holds the land in trust for B.; and -the lq.nd go held is liable to the debts of the cestui que trust.
    
    3uch a trust may be established by parol testimony, even against the answer of the trustee.-In such case, however, the bill must be supported not only by two witnesses, or by one witness- and corroborating circumstances, but the testimony-must be clear and should be received with great caution.
    It cannot be shown by parol evidence, in order to establish a trust in real estate, that the person having the legal title purchased the estate with his own money for the use of another; that would be to overturn the statute of frauds. ■
    
      Wednesday, June 6.
    APPEAL from the Morgan Circuit Court.
   Sullivan, J.

This was a bill in chancery filed against Whiteley, Blair, and Whittington, in- the Morgan Circuit Court. The bill represents that on the 10th of October, 1833, Nesbit'Sf M’Ctillough obtained a judgment against Whiteley for the sum of 228 dollars and costs of suit;—that oh the 7th of October, 1833, Whiteley, for-the purpose of defrauding.Nesbit & M’Cullough, and to avoid paying them, conveyed to Blair a tract of land containing 40 acres lying in Morgan county;—that on the 29th of April, 1834, a fieri facias.was issued on the judgment of Nesbit & M’Gullough, by virtue of which the sheriff levied on and sold said tract of land, which was purchased by the defendant, Whittington, for the sum of 40 dollars and 50 cents;—that on the 20th of October following, an alias fiefi facias was issued on said judgment, and the same land was again levied on and sold as the property of Whiteley, and the complainant became the purchaser. The bill further charges, that the conveyance from Whiteley to, Blair was without consideration; that Whittington purchased the land at the first sale, with the knowledge of Blair,- for Whiteley’s use, and with Whiteley’s money, and afterwards, at the request of Whiteley and without receiving any consideration therefor, conveyed the land to Blair, and that the same is held by him for Whiteley’s use; that Whiteley has remained in possession of the land; and that Whiteley, Whittington, and Blair, had combined to defraud Nesbit & M’Collough, &c.

The bill prays that the conveyances from' Whiteley and Whittington to Blair may be declared fraudulent and void, and that Blair may be directed to convey to the complainant.

The defendants answered separately.

The answer of Whiteley states, that on or about the third of January, 1832, he became indebted to Woodruff & Scaggins in the sum of 300 dollars or thereabouts;—that for the purpose of securing them, he made to them an absolute deed in fee-simple for said tract of land, but with the verbal condition that the defendant might redeem the land by paying the debt on or before the 25th of December next following, and that if he did not so redeem it, Woodruff &f Scaggins might sell the land for the best price they could get, and apply the proceeds to the payment of the debt;—that on the 31st of January, 1833, he had reduced the debt by various payments, to 186 dollars and 40 cents, for which amount he then gave his notes; that he failed to pay the residue, and Woodruff fy Scaggins Avere about to sell the land for the sum of 150 dollars, when Blair proposed to pay the debt, for.the land, provided it did not exceed 200 dollars;—that Joab Woodruff, who had become the assignee of said claim, agreed to let Blair have the land if he would pay the debt due from the defendant to Woodruff, and Blair thereupon executed his notes to Woodruff for the amount due;—-that the deed from respondent to Woodruff fyScaggins had not been recorded, and it Avas proposed that said deed should be delivered up to be cancelled, and that the defendant should convey directly to Blair, all of which was done accordingly;—that he had no interest in the contract between Woodruff and Blair, further than to have his debt to Woodruff paid;—and that he never did pay any part of the sum assumed to be paid by Blair to Woodruff. He admits the judgment in favour of.Nesbitfy M’Cullough, the issuing of the executions, and that he procured Whittington to purchase the land at the first sale, and furnished him with 28 dollars, that being all the money he could raise, to enable him to make the payment;—that his object was to procure a good title to Blair for the land, and save himself from a suit on the covenants in his deed;—and that he employed Whittington to bid without the knoAvledge or consent of Blair.- He admits that he is in possession of the dwelling-house and two or three acres of the land, but says he holds as tenant of Blair, paying rent, &c.

Blair in his answer admits, that he knew Whiteley was in debt to Nesbit & M’Cullough at the time he bought the land, and that a suit was pending in their favour against him;—that he knew of the conveyance by Whiteley to Woodruff & Scaggins, and that Woodruff, the assignee, was about to sell the land, and he proposed to pay the debt of Whiteley to Woodruff for the land if it did not .exceed 200 dollars;—that he accordingly contracted for said land with Joab Woodruff at and. for the sum of 176 dollars and 90 cents, that being the amount then due from Whiteley, and gave his notes with 10 per cent, interest, all of which he has paid except about 35 dollars;—that the deed from Whiteley to Woodruff Sf Scaggins was cancelled, and Whiteley made respondent a deed for the land. He denies that Whiteley furnished any part of the money either directly or indirectly to pay Woodruff. He avers that the deed from Whiteley to him was made in consideration of defendant’s paying Woodruff, the debt that Whiteley owed him;—that he did not take or receive said deed to enable Whiteley to defraud Nesbit McCullough, &c. He says that Whiteley remains in possession of the dwelling-house and three acres of cleared land, but as a'tenant paying rent.

The answer of. Whittington as to the purchase of the land at the first sale on execution, and the object for which he purchased it, agrees substantially with the answer of Whiteley.

To the foregoing answers, the complainant filed a general replication.

Henry Hamilton, a witness for the complainant, testified that Whittington bought the land at the sale on the first execution, and said that he bought it for Whiteley; that he heard Whiteley, before the sale, say that he had sold the land to Blair, and wished to buy it at the sale, to make Blair secure. The witness never heard Blair say any thing about it. He has heard Whiteley say, that the debt to Nesbit Sf M’Cullough was unjust, and he would sacrifice every cent he had before he would pay it. On the morning of the sale the witness lent some money .to Whiteley, and thinks he saw the same money in. the hands of Whittington shortly before the sale.

Charles Ross testified, that in the year 1834, a quantity of corn which Whiteley owned, was sold on execution, and the witness bought it for Whiteley, and with his money. He supposes it was the same execution on which the land was first sold. .

James Murphy attested the deed from Whiteley to Blair, and the notes from Blair to Woodruff, amounting to about 175 lars. The deed and the notes were executed at the same time.

Isaac Holeman testified that in the spring of 1833, he offered to Woodruff 250 dollars for the land in controversy, which the latter refused to take, but said if Whiteley did hot soon pay him, he would sell the land.

David Miller testified, that about a week after the judgment infavour of Nesbit fy M’Cullough was rendered against Whiteley, he heard Blair say that he was afraid he had brought himself into trouble; that if he had not thought that Whiteley would have gained the suit, he would not have bought the land; that it was in the hands of Woodruff, and that Whiteley would lose it unless somebody would buy it. He further said, that he had bought the land of Woodruff before Whiteley knew any thing about it. The witness charged Blair with paying for the land with Whiteley’s money, but Blair denied it.

William H. Craig testified that he was sheriff of Morgan county at the time of the sale to Whittington, that a part of the purchase-money was paid by Blair, and that Blair paid Whittington one dollar and 50 cents for his services.

Joab Woodruff, the assignee of Woodruff fy Scaggins, testified to the contract between Blair and himself for the land as stated in the defendants’ answers. He has heard Whiteley say that he would not pay Nesbit fy M’Cullough if he could help it, because the demand was unjust, but never heard Blair say any thing about it. He says that Blair bought the land and gave his notes for the purchase-money, all of which he has paid except about 35 dollars.

Other depositions were read by the complainant, to prove that Whiteley was indebted to other persons at the time of the conveyance to Blair; and that after the conveyance, Whiteley remained in possession of the land.

On the part of the defendant, James M’Intyre and others testified to the sale of the land by Whiteley to Woodruff Scaggins, and to the sale from Joab Woodruff to Blair. They also proved the contract between Blair and Whiteley, for the rent of that part of the premises occupied by Whiteley; that Whiteley occupied it as the tenant of Blair, and paid rent for it; that Blair lived about one mile and a half from the land, and cultivated that part of it not occupied by Whiteley.

The Circuit Court on the final hearing of the cause, decreed that the deed from Whiteley to Blair was fraudulent, as made to defeat the creditors of Whiteley,' and held the same to be null and void, See. From- that decree Blair has-appealed to this Court.

If the money paid by Blair to Woodruff was the money of Whiteley, there vyould be but little room for doubt about this case. It is not denied but that the purchase made by Whittington was at the requést of Whiteley, and the greater part of the purchase-money was furnished by him., Of this part of the transaction, Blair was informed before he received a conveyance from Whittington.

The conveyance from - Whiteley to Woodruff & Scaggins was a fair and bona fide transaction. This, all the parties admit. The deed, however, though, absolute in terms, was but a security, and the assignment of the debt from Woodruff & Scaggins to Joab Woodruff carried the security with it. Whiteley might have.redeemed the land at any time, even in the hands of the assignee, by paying the debt which it was given to secure. Pie might also, .we suppose, waive that right, and authorise the mortgagee to sell the land either at public or private sale, and raise the money due him. In that case, even ifhis object was to hinder or delay Nesbit M’CulIough,—the purchaser, if he bought without fraud, would be entitled to the protection of a Court of equity; for however fraudulent the intention of Whiteley might be, a bona fide purchaser for a valuable consideration is protected. Roberts v. Anderson, 3 J. C. R. 371.—Hendricks v. Robinson, 2 id. 283.

In this case, the complainant contends that the conveyance from Whiteley to Blair, and the purchase by Whittington at the first sale, and his conveyance to Blair, were all fraudulent as being made for the purpose of defrauding Whiteley’s creditors, Nesbit & M’Cullough.

It should be remembered that Woodruff was also a creditor, and that the transactions'of the seventh of October, 1833, were had with special reference to the payment of the debt due to him, and being authorised to sell the land, if Blair bought it - from him in good faith, and paid his own money for it, the fact of his receiving a conveyance from Whiteley cannot, we think, affect his right, because it was a part of the contract with Woodruff while the title remained in him, that the should be so made.

The allegations in the bill, that Blair paid the debt to Wood-ruff with Whiteley’s money, and-that he took the conveyance of the land for Whiteley’s use and benefit, are positively denied in the answers of Whiteley and Blair.. It is true, that a trust may be established by parol testimony against the answer of a defendant. In such case,- the bill must be supported not only by two witnesses, or by one witness and corroborating circumstances, but the testimony must be clear, and even then should be received with great caution. 1 Johns, C. R. 582. To raise the trust, it must be proved that Blair paid Whiteley’s money or a part of it for the land. The complainant will not be permitted to show for that purpose, by parol testimony, that Blair bought the land with his own money for Whiteley’s use, “because that would be to overturn the statute of frauds.”

This case, then, must rest upon the answer to the simple • question, whose money paid the debt to Woodruff ? If the purchase was made from Woodruff with Whiteley’s money, or if Whiteley paid the notes of Blair to Woodruff, the deed to Blair was voluntary; he is the trustee of Whiteley; and the land is liable in his hands to the debts of the cestui que trust.

On a careful examination of the testimony, we think it is not sufficient to sustain the bill. The money paid to Woodruff was paid by Blair, and there is no proof that any part of it was furnished by Whiteley. All the suspicion that is thrown about the case, arises from the anxiety manifested by Whiteley that Blair should get the land, and from his declarations that the claim of Nesbit & M’Cullough was unjust, and that he would not pay it if he could help it. But we have no evidence that Blair was privy to the designs of Whiteley; and if we had, having paid Whiteley’s debt to Woodruff, he stands in the light of a creditor, and is in that point of view entitled to the protection of a Court of equity. Hendricks v. Robinson, above cited. Indeed, the testimony as we view it, goes rather to establish the fact, that Blair purchased the land for his own use and paid for it with his own money. The poverty of Whiteley, the frequent declarations of Blair which are made testimony in the case by the complainant, together with the proof of payments made by Blair to Woodruff, concur to satisfy us of that fact.

H. Brown and J. Eccles, for the appellant.

P. Sweetser, for the appellee.

There is no proof that Whiteley, after the conveyance to Blair, remained in possession of the land enjoying the rents and profits, as alleged in the complainant’s bill. On the contrary testimony is that he rented a small parcel of the ground from Blair at a certain yearly rent, and has occupied that part of it as the tenant of Blair.

The purchase by Whittington and his conveyance to Blair cannot affect this case. If Blair was a bona fide purchaser of the land, as we think he was, before the sale to Whittington, his title cannot be affected by that sale, and the conveyance from Whittington can neither weaken nor strengthen his title.

Per Curiam.

The decree is reversed with costs. Cause remanded with directions to the Circuit Court to dismiss the bill, &c.  