Page:Federal Reporter, 1st Series, Volume 7.djvu/706

 694 FEDEBAri REPORTER. �gagee of Oliver, and were dealing with their debtol: in em- barassed circumstances. any other view was necessary to be taken, could be regarded in no other light than making Cuaningham the trustee of Oliver's property. If, then, Cunningham was still inter- ested, notwithstanding his assignment of it, in the $35,000 mortgage, and was subsequently so regarded by Hunt and Eschelman, then any disposition of the property held by him in his own interest, or for his own benefit, would be a fraud, and render any such transfer void, not only as to himself, but as to all other parties dealing with him, with notice of his relation to the property. �Without going through the testimony in detail, it is mani- fest that Oliver has received nothing like adequate consider- ation for his large property. It is not overlooked by the court that OUver was to receive back the Preston-contract lands, and other lands outside of towns 28 and 29 ; and that, under the Buffalo agreement, Bobinson, Haines, and Eanney were to pay the contract priceof the Preston lands — $10,500; nor that the new firm paid unsecured debts. But, neverthe- less, the case is regarded as clearly within the doctrine stated in Russell v. Southard, 12 How. 154, as a transaction that should be scrutinized to see whethor any undue advantage has been taken of the mortgagor, in reference to which the court says: �" We think that inasmuch as the mortgagee in possession may exercise an undue influence over the mortgagor, especially if the latter be in needy circumstances, the purchase by the former of the equity of redemption is to be carefully scrutinized when fraud is chargea, and that only con- structive fraud, or an unconscientious advantage, which ought not to be rctained, need be shown to avoid such a purcliase." �Again, in Pugh v. Davis, 96 U. S. 337, the court says : "A subsequent release of the equity of redemption may undoubtedly be made to the mortgagee. There is nothing in the policy of the law which forbids the transfer to him of the debtor's interest. The transac- tion will, however, be closely scrutinized, so as to prevent any oppression of the debtor." �Viewed in the light of these authorities, the transactions ��� �
 * The transfer bj Oliver to Cunningham of this property, if