to stand as security for it; they can order accounts to be taken and settled; they can decree a reconveyance of the property, or they can put an end to the trust by declaring the conveyances to the constructive trustee to be null and void, and order that they be surrendered up and cancelled. In all such cases the relief is really founded on fraud and not on constructive trust. When it is said that the person who fraudulently receives or possesses himself of trust property, or who has defrauded another of his estate by misrepresentation, concealment, or other fraudulent practices, is converted by the court into a trustee and ordered to account for or reconvey the property, the expression is used for the purpose of describing the nature and extent of the remedy against him, and it denotes that the parties defrauded or beneficially entitled, have the same rights and remedies against him as they would be entitled to against an express trustee who had fraudulently committed a breach of the trust. Generally speaking, the constructive trusts described in this chapter are not trusts at all in the strict and proper signification of the word "trusts;" but as courts are agreed in administering the same remedy in a certain class of frauds as are administered in fraudulent breaches of trusts, and as courts and the profession have concurred in calling such frauds constructive trusts, there can be no misapprehension in continuing the same phraseology, while a change might lead to confusion and misunderstanding.2 § 167. Courts of common law have an extensive jurisdiction in cases of fraud, but it is readily seen that the remedy in equity is more easily moulded to the varying circumstances of different cases. As between the immediate parties, fraud makes all things void which are done under its direct influence. Thus, non est factum can be pleaded to a suit 1 Thompson v. Thompson, 16 Wis. 91; McLane v. Johnson, 43 Vt. 48; Collins v. Collins, 6 Lans. N. Y. 368. 2 See Westbury, Lord Chancellor, in Rolfe v. Gregory, 4 De G., J. & S. 679. 13 VOL. I. upon a deed or bond, procured by fraud or duress, on the ground that whatever is done under the influence of fraud is not done at all. The same evidence is admissible in both courts. Probably the same evidence that would convince a 1 1 Chitty, Plead. 483. Courts of chancery in England, and the courts of the United States, and of many of the several States, have a jurisdiction in equity to set aside deeds and contracts procured by misrepresentation, concealment, collusion, or fraud. In Massachusetts, the Supreme Judicial Court has jurisdiction in equity in cases of fraud, accident, and mistake, according to the usage and practice of courts of equity where there is not a plain, adequate, and complete remedy at law. Gen. Stat. ch. 113, § 2. It was supposed by the profession that this statute conferred upon the court a jurisdiction in equity in accordance with the general usages of the courts of equity in England and the United States. But the court by a strict construction of the words, "where there is not a plain, adequate, and complete remedy at law," denied their jurisdiction in cases of fraud, where an action at law might be maintained by the injured party. Thus, if a deed is procured from a person by fraud, he cannot maintain a suit in equity to set it aside, if it is possible to maintain a real action for the recovery of the land; and as such deeds are void, or at least voidable, such action may be maintained at law, and the court has no jurisdiction in equity. Bassett v. Brown, 10 Mass. 355. This decision goes upon the strict meaning of the words, "where there is not a plain, adequate, and complete remedy at law," words which were formerly found in every bill in equity, in order to give the court jurisdiction. But they did not exclude the jurisdiction in equity, if the court had a jurisdiction, concurrent or otherwise, according to the usage and practice of courts of equity. The court in Massachusetts still has jurisdiction in equity in cases of fraud, where there is a peculiar complication of circumstances or of parties. Pratt v. Pond, 5 Allen, 59; Glass v. Hulbert, 102 Mass. 26; Martin v. Graves, 5 Allen, 601; Whittemore v. Cowell, 7 Allen, 446; Pool v. Lloyd, 5 Met. 528. But the practitioner must determine at his peril whether a particular case comes within such jurisdiction. It would have been more simple and certain for the administration of justice, to have given to the words of exclusion the meaning attached to them in bills of equity, and to have made the jurisdiction of the court to depend upon the known usage and practice of courts of equity. Thus both the court and the bar would have had some known ground to go upon. Of course these remarks apply only to those cases of fraud where there is a jurisdiction in equity to set aside conveyances procured by fraud, and for other relief according to the known usage and practice of courts of equity, and not to mere cases of cheating and fraud in many of the affairs of li See Miller v. Scammon, 52 N. H. 609. court of equity that a deed was procured by fraud, and that the grantee ought to hold as a constructive trustee for the grantor, would also persuade a jury to return a verdict against such deed. In some States the parties have a right to trial by jury of all questions of fact, as of fraud or no fraud, arising upon the pleadings in equity. In other States the court may in its discretion send such issues of fact to trial by a jury.1 Thus, the remedy in equity in cases of fraud is sought, not so much from the mode of proof and the rules of evidence, as it is from the complete character of the relief given. It is true, that in some cases courts of equity will act upon circumstances and presumptions of fraud which courts of law would not deem satisfactory proofs. As if a guardian purchases an estate from a ward, equity will presume fraud from the existence of the relation of guardian and ward, a rule that courts of law would not always act upon. Lord Eldon said, that courts of equity in many cases would order an instrument to be delivered up, as unduly obtained, which a jury would not be justified in impeaching by the rules of law. However, fraud must be proved in both courts, and is not to be imputed from mere circumstances of suspicion. It is not, however, the rule that the court will not presume or construe a trust to arise except in cases of absolute necessity; for courts of equity will act upon the just preponderance of all the facts and circumstances of proof in the case.5 § 168. Constructive trusts may be divided into three classes, to be determined according to the circumstances under which they arise. First, trusts that arise from actual fraud practised 1 1 Story's Eq. Jur. § 190 a. 2 Warner v. Daniels, 1 Wood. & M. 103; Denton v. McKenzie, 1 Des. 289. Fullager v. Clark, 18 Ves. 483; Chesterfield v. Janssen, 2 Ves. 155. 4 Cook v. Fountain, 3 Swans. 555. 2 Story's Eq. Jur. § 1195; Steele v. Kinkle, 3 Ala. 352. by one man upon another. Second, trusts that arise from constructive fraud. In this second class the conduct may not be actually tainted with moral fraud or evil intention, but it may be contrary to some rule established by public policy for the protection of society. Thus, a purchase made by a guardian of his ward, or by a trustee of his cestui que trust, or by an attorney of his client, may be in good faith, and as beneficial to all parties as any other transaction in life; and yet the inconvenience and danger of allowing contracts to be entered into by parties holding such relations to each other are so great that courts of equity construe such contracts prima facie to be fraudulent, and they construe a trust to arise from them. Third, trusts that arise from some equitable principle independent of the existence of any fraud; as where an estate has been purchased, and the consideration money paid, but the deed is not taken, equity will raise a trust by construction for the purchaser. § 169. No certain and accurate definition or description of actual fraud can be given. Courts have never laid down, in a general proposition, what does and what does not constitute fraud, nor any general rule by which they are controlled in giving relief,1 lest other means of committing fraud should be resorted to. As Lord Hardwicke said, "fraud is infinite, and were courts of equity once to lay down rules how far they would go and no further, in extending the relief against it, or to define strictly the species or evidence of it, the jurisdiction would be cramped, and perpetually eluded by new schemes which the fertility of man's invention would contrive."2 Although it is difficult to give a definition of it, yet Mr. Story said, that "fraud in the sense of a court of 1 Mortlock v. Buller, 10 Ves. 306. 2 Parke's Hist. of Chan. 508; Lawley v. Hooper, 3 Atk. 279; 1 Domat, Civil Law, B. 1, tit. 18, § 3, art. 1. 31 Story's Eq. Jur. § 187. equity properly includes all acts, omissions, and concealments which involve a breach of legal or equitable duty, trust, or confidence, justly reposed, and are injurious to another, or by which an undue and unconscientious advantage is taken of another.1 And courts of equity will not only interfere, in cases of fraud, to set aside acts done; but they will also, if acts have by fraud been prevented from being done by the parties, interfere and treat the case exactly as if the acts had been done." 2 § 170. Although courts of equity have not made general definitions stating what is fraud and what is not, they have not hesitated to lay down broad and comprehensive principles of remedial justice, and to apply these principles in favor of innocent parties suffering from the fraud of others. These principles, though firm and inflexible, are yet so plastic, that they can be applied to every case of fraud as it occurs, however new it may be in its circumstances. The leading principle of this remedial justice is by way of equitable construction to convert the fraudulent holder of property into a trustee, and to preserve the property itself as a fund for the purpose of recompense. In investigating allegations of fraud, courts of equity disregard mere technicalities and artificial rules, and look only at the general characteristics of the case, and go at once to its essential morality and merit. Thus at law married women or infants are not liable upon their contracts, nor are they bound by their deeds, receipts, or releases, whether made bona fide or fraudulently; but in equity if a married woman has obtained property by fraud, the court disregards 1 Chesterfield v. Janssen, 2 Ves. Sr. 155; Gale v. Gale, 19 Barb. 251; 1 Fonb. Eq. B. 1, c. 2, § 3, note (r). 2 Middleton v. Middleton, 1 Jac. & W. 96; Waltham's Case, cited 11 Ves. 638, 14 Ves. 290; Devenish v. Baines, Pr. Ch. 4. * People v. Kendall, 25 Wend. 399; Burley v. Russell, 10 N. H. 184; West v. Moore, 14 Vt. 447; Conroe v. Birdsall, 1 Johns. Cas. 127; Price v. Hewitt, 8 Exch. 145. |