executors and administrators good faith is indispensable. If therefore a purchaser knows, or has notice, that a sale by an administrator is fraudulent or collusive, or is a devastavit, or is for the purpose of a misapplication of the assets, his title will not be allowed to prevail against the beneficial interests of creditors, specific or residuary legatees, or next of kin or heirs. Equity will examine the transaction; and if circumstances appear sufficient to put the purchaser on his guard or upon his inquiry, the sale will be avoided or the purchaser will be held as a trustee.2 If the transfer is by way of pledge or sale for the security or payment of the private debt of the administrator, it will be equivalent to full notice of the illegality of the transaction, and fraudulent. But if an administrator make a pledge of the assets for a contemporaneous advance of money for the use of the estate, it will be held to be a valid transaction; or if the sale or pledge or mortgage is afterwards made for a previous advance made in good faith for the alleged benefit of the estate, it will be valid. Of

1 Petrie v. Clark, 11 Serg. & R. 388; Wylson v. Moore, 1 M. & K. 337; Cole v. Miles, 10 Hare, 179; Saxon v. Barksdale, 4 Des. 526; McNair's App. 4 Rawle, 155; Johnson v. Johnson, 2 Hill, Eq. 277; Mead v. Orrery, 3 Atk. 235; McLeod v. Drummond, 14 Ves. 361; 17 Ves. 169; Field v. Schieffelin, 7 Johns. Ch. 155; Colt v. Lasnier, 9 Cow. 320; Sacia v. Berthoud, 17 Barb. 15; Williamson v. Branch Bank, 7 Ala. 996; Swink v. Snodgrass, 17 Ala. 653; Garnett v. Macon, 6 Call, 361; Dodson v. Simpson, 2 Rand. 294; Graff v. Castleman, 5 Rand. 201; Parker v. Gillian, 10 Yerg. 394; Williamson v. Morton, 2 Md. Ch. 94; Lowry v. Farmers' Bank, 10 P. L. J. 3; Am. L. J. (N. s.) 111.

2 McNeillie v. Acton, 4 De G., M. & G. 744.

Petrie v. Clark, 11 Serg. & R. 388; Shaw v. Spencer, 100 Mass. 382; Judson v. National City Bank, 8 Blatch. 430, and cases cited; Pendleton v. Fay, 2 Paige, 202; Bayard v. Farmers', &c. Bank, 52 Pa. St. 232; Baker v. Bliss, 39 N. Y. 76; Carr v. Hilton, 1 Curtis, 390-393; Field v. Schieffelin, 7 Johns. Ch. 155; Williamson v. Morton, 2 Md. Ch. 94; Garrard v. R. R. Co. 29 Pa. St. 154; Collinson v. Lister, 7 De G., M. & G. 634; Dodson v. Simpson, 2 Rand. 294; Williamson v. Branch Bank, 7 Ala. 906.

Petrie v. Clark, 11 Serg. & R. 388; Miles v. Durnford, 2 Sim. (N. s.) 234; Russell v. Plaice, 18 Beav. 21; 11 Jur. 124; 19 Jur. 445.

course knowledge on the part of the purchaser, that the executor or administrator is dealing with the assets in a fiduciary capacity, is not enough to raise any suspicion, for the reason that it is the duty of the administrator to dispose of the assets and settle the estate; and so a trustee may sell and transfer absolutely the personal property of his trust, if he have power to vary the securities; and if he sells and transfers notes, stocks, or other securities standing in his name as trustee, the purchaser, from that fact alone, cannot be holden as a constructive trustee, although the trustee in fact transfers such securities or order to obtain money for his own personal use. The mere fact that the word trustee is on the face of the securities cannot put a purchaser to any inquiry beyond ascertaining whether the trustee has power to vary the securities. If he has such power, a purchaser in good faith will be protected, although the trustee use the money for his private purposes. But if a purchaser takes securities from a trustee, with the word trustee upon their face, in payment of a private debt due from the trustee, the sale may be avoided by the cestui que trust, or the purchaser may be held as a trustee. And so, if an executor, guardian, or trustee hold certificates of shares in a corporation, he may sell the same, and the corporation would be protected in issuing new certificates to the purchaser, but if the corporation knew that the sale or transfer was a breach of the trust or a devastavit, it might be held as a constructive trustee for the persons beneficially interested; but the mere fact that the fiduciary character of the vendor appeared upon the face of the transaction would put the corporation upon no inquiry beyond ascertaining whether he had authority to change the securities.3

1 Ashton v. Atlantic Bank, 3 Allen, 217; Creigton v. Ringle, 3 S. C. 77; Dillaye v. Com. Bank, 51 N. Y. 355.

2 Shaw v. Spencer, 100 Mass. 388; Jaudon v. National Bank, 8 Blatch. 430; Duncan v. Jaudon, 14 Wall. 115.

Ashton v. Atlantic Bank, 3 Allen, 217, and cases cited note 1.

§ 226. The statute of frauds is no obstacle in the way of proof of an actual or constructive fraud in the sale of property. Lord Hardwicke stated "that the court adhered to this principle, that the statute of frauds should never be understood to protect fraud, and therefore wherever a case is infected with fraud, the court will not suffer the statute to protect it." Lord Thurlow added, that "the moment you impeach a deed for fraud you must either deny the effect of fraud upon the deed, or you must admit parol evidence to prove it."2 If this was not so, the law would be reduced to this absurdity, if a fraud could once succeed in procuring the transaction to be reduced to writing and signed by the parties, it would be protected by the law itself, and there would be no possible means of reaching and correcting the wrong. But in such case the bill must contain a clear and distinct charge of fraud. Therefore, whenever the bill sets out a clear case of fraud, parol evidence will be admitted to prove it, even if the effect of such evidence is to contradict, vary, alter, or destroy written instruments. And in any

1 Reach v. Kennigate, 1 Ves. 125; Young v. Peachey, 2 Atk. 258; Walker v. Walker, ib. 98; Hutchins v. Lee, 1 Atk. 448; Montacute v. Maxwell, 1 P. Wms. 620; Lincoln v. Wright, 4 De G. & J. 16; Childers v. Childers, 1 De G. & J. 482; Davis v. Oty, 35 Beav. 208; Ryan v. Dox, 34 N. Y. 307; Haigh v. Kaye, L. R. 7 Ch. 474.

2 Shelborne v. Inchinquin, 1 Bro. Ch. 350; Hare v. Sherewood, 1 Ves. Jr. 243; Townshend v. Stangroom, 6 Ves. 333; Pym v. Blackburn, 3 Ves. 38 n., and see Conolly v. Howe, 5 Ves. 701.

8 Irnham v. Child, 1 Bro. Ch. 94; Portmore v. Morris, 2 Bro. Ch. 219; Forsyth v. Clark, 3 Wend. 637; Gouverneur v. Elmendorf, 5 Johns. Ch. 79; Kennedy v. Kennedy, 2 Ala. 571; Skrine v. Simmons, 11 Ga. 401; McCalmont v. Rankin, 8 Hare, 18.

4 Young v. Peachey, 2 Atk. 257; Thynn v. Thynn, 1 Vern. 296; Irnham v. Child, 1 Bro. Ch. 93; Cripps v. Gee, 4 Bro. Ch. 475; Oldham v. Lechford, 2 Vern. 506; Drakeford v. Wilks, 3 Atk. 539; Reach . Kennigate, 1 Ves. 125; Amb. 67; Pember v. Mathers, 1 Bro. Ch. 52; Wilkinson v. Bradfield, 1 Vern. 307; Miller v. Cotton, 5 Ga. 346; Christ v. Diffenbach, 1 Serg. & R. 464; Watkins v. Stockett, 6 H. & J. 345; Elliott v. Connell, 5 Sm. & M. 91; Barrell v. Hawrick, 42 Ala. 60; Judd v. Mosely, 31 Io. 433.

case if the trust arises from the acts of the parties, and not exclusively from their agreements, the statute of frauds is not a bar to the proof.1 So, if a bill is brought for relief, on the

1 Judd v. Mosely, 30 Io. 428; Bryant v. Hendricks, 5 Io. 256; Kincell v. Feldman, 22 Io. 363; Ferguson v. Hass, 64 N. C. 772; Squire's App. 70 Pa. St. 268. And so the statute of frauds is not a bar to relief in other cases of absolute deeds where they are used in a manner, and for purposes not contemplated at the time of their execution. Thus a deed may be shown to be a mortgage or security for a debt, although there was no written defeasance, and no fraud, accident, or mistake. This proposi tion has been much discussed. The latest case, Campbell v. Dearborn, 109 Mass. 130, contains a review of the authorities and a succinct statement of the doctrine; and as it is upon a subject closely connected with constructive trusts, the case is given at large.

"From those facts, and from the bill and answer, we think these points must be taken to be established; to wit, 1st, that the plaintiff had purchased the parcel of land in controversy, and held a contract from Tirrill for its conveyance to himself upon payment of the sum of $5500; 2d, that the money was advanced by the defendant to the plaintiff as a loan, and the deed from the plaintiff to the defendant was given by way of security therefor. The report finds, 'from all the circumstances surrounding the transaction, and from the acts and declarations of the parties at the time, that the plaintiff believed and had reason to believe' this to be the case.

"From the whole case we are satisfied that it was a transaction between borrower and lender, and not a real purchase of the land by the defendant. We are brought, then, to the question, Can equity relieve in such a case?

"The decisions in the courts of the United States, and the opinions declared by its judges, are uniform in favor of the existence of the power, and the propriety of its exercise by a court of chancery. Hughes v. Edwards, 9 Wheat. 489; Sprigg v. Bank of Mount Pleasant, 14 Pet. 201, 208; Morris v. Nixon, 1 How. 118; Russell v. Southard, 12 How. 139; Taylor v. Luther, 2 Sumner, 228; Flagg v. Mann, ib. 486; Jenkins v. Eldredge, 3 Story, 181; Bentley v. Phelps, 2 Woodb. & Min. 426; Wyman v. Babcock, 2 Curtis C. C. 386, 398; s. c. 19 How. 289. Although not bound by the authority of the courts of the United States in a matter of this sort, still we deem it to be important that uniformity of interpretation and administration of both law and equity should prevail in the State and federal courts. We are disposed, therefore, to yield much deference to the decisions above referred to, and to follow them unless we can see that they are not supported by sound principles of jurisprudence, or that they conflict with rules of law already settled by the decisions of our own courts. "We cannot concur in the doctrine advanced in some of the cases,

that

ground that the instrument is framed contrary to the intention of the parties through mistake, accident, surprise, or fraud. In such case, Lord Hardwicke said, "that a mistake

the subsequent attempt to retain the property, and refusal to permit it to be redeemed, constitute a fraud or breach of trust, which affords ground of jurisdiction and judicial interference. There can be no fraud or legal wrong in the breach of a trust from which the statute withholds the right of judicial recognition. Such conduct may sometimes appear to relate back, and give character to the original transaction, by showing, in that, an express intent to deceive and defraud. But ordinarily it will not be connected with the original transaction otherwise than constructively, or as involved in it as its legitimate consequence and natural fruit. In this aspect only can we regard it in the present case.

6

"The decisions in the federal courts go to the full extent of affording relief, even in the absence of proof of express deceit or fraudulent purpose at the time of taking the deed, and although the instrument of defeasance be omitted by design upon mutual confidence between the parties.' In Russell v. Southard, 12 How. 139, 148, it is declared to be the doctrine of the court, that, when it is alleged and proved that a loan on security was really intended, and the defendant sets up the loan as payment of purchasemoney, and the conveyance as a sale, both fraud and a vice in the consideration are sufficiently averred and proved to require a court of equity to hold the transaction to be a mortgage.' The conclusion of the court was, 'that the transaction was in substance a loan of money upon security of the farm, and, being so, a court of equity is bound to look through the forms in which the contrivance of the lender has enveloped it, and declare the conveyance of the land to be a mortgage.'

"This doctrine is analogous, if not identical, with that which has so frequently been acted upon as to have become a general if not universal rule, in regard to conveyances of land where provision for reconveyance is made in the same or some contemporaneous instrument. In such cases, however carefully and explicitly the writings are made to set forth a sale with an agreement for repurchase, and to cut off and renounce all right of redemption or reconveyance otherwise, most courts have allowed parol evidence of the real nature of the transaction to be given, and, upon proof that the transaction was really and essentially upon the footing of a loan of money, or an advance for the accommodation of the grantor, have construed the instruments as constituting a mortgage; holding that any clause or stipulation therein, which purports to deprive the borrower of his equitable rights of redemption, is oppression, against the policy of the law, and to be set aside by the courts as void. 4 Kent, Com. (6th ed.) 159; Cruise, Dig. (Greenl. ed.) tit. xv. c. 1, § 21; 2 Washb. Real Prop. (3d ed.) 42, Williams on Real Prop. 353; Story, Eq. § 1019; Adams, Eq. 112; 3 Lead. Cas. in Eq. 3d Am. ed.); White & Tudor's notes to Thornbrough v.