THE DECISIONS OF THR Supreme Court of the United States, AT OCTOBER TERM, 1893. (Authenticated copy of opinion record strictly followed, except as to such reference words and figures as are inclosed in brackets.] Where one railroad company by its wrongful conduct induced another railroad company to break its contract with a contractor for its construction, it is liable to him for the damages sustained thereby; a fortior when it not only induces a breach of the contract by the latter company, but also disables it from performance. Wrongful use of the powers and processes of the court-malicious interference in a contractcausing breach of contract-stockholder, when liable for company's debt-inducements to leg. A sole stockholder cannot wrongfully cause the islation-power of legislature to destroy property-action of legislature will not bar ro dress of private wrong-excuse of wrongdoerproperty obtained wrongfully-when liable for debts of former owner-trustee ex maleficio -constructive trust, when impressed on property. 1. A wrongful use of the powers and processes of the court cannot be recognized as among the legitimate means of contest and competition. NOTE.-As to delivery and acceptance necessary under the statute of frauds, see note to Mahan v. United States, 21: 307. As to contracts; their interpretation and validity, see note to Bell v. Bruen, 11: 89. As to covenants in contract; when dependent and when independent, see note to Goldsborough v. Orr, 6: 600. As to stated sum in contract; whether penalty or Hquidated damages, see note to Tayloe v. Sandiford, & 384. As to how far fraud or Megal consideration will avoid contract, see note to Armstrong v. Toler, 6: 468. As to inadequacy of price to impeach or set aside sale, see note to Erwin v. Parham, 13: 952. As to construction of written contracts; how far a question for the court, see note to Ward v. United States, 20: 792. As to contracts by letter or telegram; offer and acceptance; when valid, see note to Eliason v. Henshaw, 4: 556. Trustees ex maleficio; when the relation arises. Those who have or assume the management of property without authority may generally be 5. transfer of all the property of the corporation to be made to himself, so as to deprive a creditor of the corporation of the payment of his debt, and if he does so, the creditor may hold the sole stockholder responsible for that payment. Whenever an act of the legislature is challenged in court the inquiry is limited to the question of power, and does not extend to the matter of expediency, the motives of the legislators, or the reasons which were spread before them to induce the passage of the act, placed under this head. If such one makes a sale which is invalid, the vendor becomes a trustee of the proceeds for the one who should hold the property. Brown v. Black, L. B. 15 Eq. 367; Morris v. Joseph, 1 W. Va. 256, 91 Am. Dec. 386. Or, if a defective title to land is given, the grantor becomes a trustee for the benefit of his grantee of any rights afterwards acquired by him, though this result may not arise where the guarantee of the title immediately vests such after acquired interest in the grantee. Walsey v. Foreman, 38 Cal 90; Dolhequy v. Tabor, 22 Cal. 279, Doyle v. Peerless Petroleum Co. 44 Barb. 239; Clark v. Martin, 49 Pa. 299; Kelley v. Jenness, 50 Me. 455, 79 Am. Dec. 623; White v. Patten, 24 Pick, 824; Nash v. Spofford, 10 Met. 192, 48 Am. Dec. 425. The grantor, conveying a title encumbered by an unregistered mortgage, to one having no notice of the mortgage, may become a trustee for the mortgagee of the consideration received; likewise one may become a trustee if he gives or receives a deed in fraud of the rights of others. Mosbier v. Knox College, 82 111, 155; Troy Bank v. Wilcox, 24 Wis. 671; Wolford v. Herrington, 74 Pa. 811, 15 Am. Rep. 548; Boynton v. Housler, 74 Pa, 453; Overton v. Tracey, 14 Serg. & R. 328; Thomson v. White, 1 U. 8. 1 Dall. 424 (1: 206). & A right of action to recover damages for an injury is property, and the legislature has no power to destroy such property. 1. The action of the legislature in subserviency to the public interest will bar nc redress of a private wrong unless such bar be absolutely necessary to the accomplishment of the public interest. 8. A wrongdoer, the party whose wrongs created that condition which induced the legislative forfeiture, cannot excuse his wrongs on the grounds that the legislature had the power to forfeit, and might have done it anyway. fully may be adjudged a trustee ex maleficio in respect to that property. 12. Whenever the legal title to property has been obtained through actual fraud, equity impresses a constructive trust on the property thus ac quired in favor of the one who is truly and equitably entitled to the same, although he may never perhaps have had any legal estate therein. 13. Where property was in a railroad company for the purpose of aiding in the construction of its road, and in such construction work was done by the plaintiff, equity recognizes a right that that property should be applied in the pay. ment for that work; and if the wrongdoing of the defendant has wrested the title to such property, from the company and transferred it to himself, be becomes, therefore, a trustee ex maleficio in respect to the property. [No. 73.] 1. It is contrary to equity that a defendant should be permitted to enjoy unmolested that particular property, the possession of which he sought to secure, and did in fact secure, by its wrongful acts. 10. Where public lands were given to a railroad company to aid in the construction of its road, and a part of the work of construction had been Argued Nov. 8, 9, 1893. Decided Jan. 3, 1894. done, there is an equity in securing the application of these lards in payment thereof, and where another compr ny, by its wrongdoings has secured title to those lands,equity will hold that one who has been deprived of payment for such work of construction, from the former company, by reason of their having been taken away from it, may pursue those lands into the hands of the wrongdoer, and hold them for the payment of that claim which, but for such wrongdoings would have been paid by the former company, out of their proceeds. APPEAL from a decree of the Circuit Court of the United States for the Western District of Wisconsin, dismissing a suit in equity brought by Sarah R. Angle, administratrix, against The Chicago, St. Paul, Minneapolis & Omaha Railway Company, to reach a land grant in the hands of said company. Reversed, and case remanded for further proceedings and to apply it to the payment of a judgment against the Chicago, Portage & Su 11. A party who acquires title to property wrong-perior Railway Company for work done by An agent, though generally answerable only to his principal, may through his own fraud become a trustee for the injured party. Hardy v. Caley, 33 Beav. 365; Bridgman v. Gill, 24 Beav. 302; Alleyne v. Darcy, 4 Ir. Ch. Rep. 199. An administrator attempting to manage the real estate, other than to sell it for the payment of debts, has done what he has no power to do, and is a trustee ex maleficio. People v. Houghtaling. 7 Cal. 348; McCoy v. Scott, 2 Rawle, 222, 19 Am. Dec. 640; Le Forte v. Delafield, 3 Edw. Ch. 32. So is any one taking personal property under analogous circumstances; as, if one should come into possession of property as administrator of a deceased trustee, he becomes a trustee with the same duties and liabilities as any other. Bennett v. Austin, 81 N. Y. 308; Goodhue v. Barnwell, Rice, Eq. 198: Blomfield v. Eyre, 8 Beav. 250; White Schoolhouse Proprs. v. Post, 31 Conn. 248; Hope v. Liddell, 21 Beav. 183; Wilson v. Moore, 1 Myl. & K. 337. Any one wrongfully dealing with an estate becomes a trustee ex maleficio, answerable to the party interested as cestui que trust. Rackbam v. Siddall, 16 Sim. 297; Hennessey v. Bray, 33 Beav. 96. If one obtains the title to land by artifice or concealment, equity will impress upon the land in his bands a trust in favor of the party justly entitled thereto, and will order the trust executed by a conveyance. Felix v. Patrick, 145 U. S. 817 (36: 719. The fraud which will create a trust ex maleficio in land conveyed must exist at the time of sale; subsequent bad faith or repudiation being insufficient. Shaffner v. Shaffner, 145 Pa. 163. A fraudulent purchaser of the property of an insolvent who has sold it at a public sale, will be treated as a trustee for the creditors, holding the money realized from the sale for the benefit of whoever is adjudged entitled thereto. Herman v. McKinney, 47 Fed. Rep. 758. One who, while professing to act for another. purchases or takes title for himself. is a trustee, it the party for whom he pretends to purchase has a interest in the property. Conant v. Riseborough, 139 T. 383, affirming 30 Ill. App. 493. The mere fact that a purchaser of land at a jud cial sale repudiates his agreement to reconvey it to another than the debtor, upon reimbursement is not sufficient to charge him as trustee ex maleficio, although he purchased it at less than its value, unless those seeking to assert the trust could have purchased or made better arrangements, or others were prevented from bidding. Shaffner v. Shaffner, 145 Pa. 163. A parol agreement whereby a mortgagee to secure future advances, who has made no advances, is to foreclose the mortgage, bid in the property, and convey it to the mortgagor and such persons as he may designate, for the purpose of clearing up the title, will be specificially enforced against such mortgagee as a trustee ex maleficio, where the agreement has been partly performed by the mortgagors allowing the property to be sold and purchased by the mortgagee, and the latter has conveyed part of the property to persons designated by the mortgagor, but refuses to convey the remainder to the latter who has remained in possession. Cutler v. Babcock, 81 Wis. 195. Land purchased in his own name by a son upon a judicial sale of his father's lands, under an agreement with the latter to make the purchase as his agent, and that the tract shall belong to all the children upon payment of the purchase money, except a portion reserved for the support of the father and his wife for life, the land being paid for with moneys of the father and the proceeds of the reserved portion, is held by the son in trust for the father. Beverly v. Beverly, 88 Va. 915. A woman who purchases land with money fraudulently obtained from a man by a promise to marry him and to hold such land in lieu of her right to dower under the marriage, may be held to be a trustee on her refusal to marry him, and the land charged with a lien for such money. Edwards Culbertson. 18 L. R. A. 204, 111 N. C. 342. Where one party has acquired the legal tire to property to which another has a better right, a court of equity will convert him into a trustee of the true owner and compel him to convey the legal title. Monroe Cattle Co. v. Becker, 147 U. S. 47 (37:72). When the existence of fraud is shown in the ac plaintiff's intestate in constructing the railroad of the latter company. See same below, 39 Fed. Rep. 143, 912. Statement by Mr. Justice Brewer: This is an appeal from a decree of the Circuit Court of the United States for the Western District of Wisconsin dismissing plaintiff's bill. The bill was filed on the 23d of May, 1888, against the Chicago, Portage & Superior Railway Company, the Chicago, St. Paul, Minneapolis & Omaha Railway Company and the Farmers' Loan & Trust Company. The Chicago, St. Paul, Minneapolis & Omaha Railway Company was the only defendant served with process. It appeared, and, on the 28 h of July, filed a demurrer to the bill which, after argument, was sustained, and on September 2, 1889, the decree of dismissal was entered. Farmers Loan & T. Co. v. Chicago, P. & S. R. Co. 39 Fed. Rep. 143; Angle v. Chicago, St. P. M. & O. R. Co. 39 Fed. Rep. 912. The facts as stated in the bill are as follows: By two acts, of date June 3, 1856, and May 5, 1864, respectively (11 Stat. at L. 20, and 13 Stat. at L. 66) Congress granted lands to the state of Wisconsin to aid in the construction of certain railroads, among others one "from a quisition of the title to land by the party holding it, and who orally agreed to reduce to writing a verbal agreement declaring a trust in the land, equity will declare such party a trustee er maleficio, upon the terms of the dishonored verbal agreement, or other equitable terms. Van Trotha v. Bamberger, 15 Colo. 1. One to whom another furnishes money to purchase land for him, and who, upon purchasing the land, without the latter's knowledge, takes the title in his own name, is agent of and holds the land in trust for the latter. Martin v. Fix, 44 Kan. 540. If a person who is not, in fact, a trustee, acts as such, either by mistake or intention, he thereby becomes a trustee de son tort. Easterly v. Barber, 65 N. Y. 252. Where money or property acquired by felony has been converted into other property, the law will raise a trust in invitum for the purpose of subJecting the substituted property to the purposes of indemnity and recompense. Story. Eq. Jur. §§ 1255, 1258: Hill, Trustees, 222; Wright v. Methodist Episcopal Church Trustees, 4 Edw. Ch. 215; Newton v. Porter, 69 N. Y. 133, 25 Am. Rep. 152. The obtaining of an absolute deed by means of a parol promise made without intention of performance is fraud, constituting the grantee merely a trustee. Brison v. Brison, 75 Cal. 525. Where one having any interest in land is induced to confide in the verbal promise of another that he will purchase it for the benefit of the former at a sheriff's sale, and in pursuance of this allows him to become the holder of the legal title, a subsequent denial by the latter of the confidence is such a fraud as will convert the purchaser into a trustee ex maleficio. Gruhn v. Richardson 128 Ill. 178. An oral promise to make a will giving to another certain property, in consideration of a deed from the latter, considered simply as a contract, is within the statute of frauds; but if made with a fraud- | ulent intent to obtain the deed without consideration, the statute of frauds becoming immaterial, and the grantee is a trustee ex maleficio. Manning v. Pippen, 86 Ala. 357 Whenever the legal title to property is obtained through means or under circumstances which point on the St. Croix river or lake, between townships 25 and 31, to the west end of Lake Superior, and from some point on the line of said railroad, to be selected by said state, to Bayfield." These land grants were accepted by an act of the legislature, approved October 8, 1856 (Wis. Laws 1856, p. 187) and by joint resolution of the legislature of the state, of date March 20, 1865 (Wis. Gen. Laws, 1865, p. 689) and a map of definite location was duly filed and accepted by the Secretary of the Interior. By an act of March 4, 1874 (Wis. Laws 1874, p. 186) the state granted to the North Wisconsin Railway Company, whose name was subsequently changed to Chicago, *St. Paul, Min [4 neapolis & Omaha Railway Company, and who is the defendant herein (to be hereafter called the Omaha Company) that portion of the land grant applicable to the construction of the road from a point on St. Croix river to Bayfield, and to the Chicago & Northern Pacific Air Line Railway Company, whose name was subsequently, and before 1878, changed to that of the Chicago, Portage & Superior Railway Company (hereafter called the Portage Company) so much of said grant as was applicable to the construction of the road from the west end of Lake Superior to a junction with the render it unconscientious for the holder of the legal title to retain and enjoy the beneficial interest, equity impresses a constructive trust on the property thus acquired, in favor of the one who l truly and equitably entitled to the same. Moore v. Crawford, 130 U. S. 122 (32: 878.) If an agent purchases lands with money of his principal and takes title in his own name without the latter's consent, the land, or the proceeds thereof, will be impressed with a trust in favor of the principal. Kraemer v. Deustermann, 37 Minn. 469. One who by fraudulent misrepresentation ob tains a conveyance from the owner of any interest in property, real or personal, is in equity a trustee ex maleficio for the person defrauded; and any one taking the property from such trustee with notice of the fraud and of the consequent trust is affected by the trust. Jones v. Van Doren, 130 U. 8. 684, (32: 1077). Where a man who purchased land at a tax sale induced other bidders to refrain from bidding, saying that he wanted the land for the owner, who was his neighbor, he will be charged as trustee for the latter or the sale set aside. Merrett v. Poulter, 96 Mo. 237. Where a husband had a contract with a railroad company for the purchase of land, but he had paid the interest on the contract merely, and, by arrangement with his wife, procured money of her to purchase the same and deed it in her name but instead took the deed to himself, such conveyance is held in trust for her benefit. Mosteller v. Mosteller, 40 Kan. 658. One acting as agent of an execution defendant to purchase real estate under levy for defendant, purchasing in his own name for himself, is a trus tee ex maleficio; and such defendant can recover the property in ejectment. Shallcross v. Mawhinny (Pa.) Jan. 31, 1887. Where money of one is wrongfully used by an other, the owner may pursue it and establish a resulting trust in land bought with it. Moore v. Stinson, 144 Mass. 594; McClung v. Steen, 22 Fed Rep. 372. |