after stating tbe case: We are of the opinion that this case was tried upon an erroneous theory or principle. Taking the plaintiffs’ evidence to be true, and it is fully sustained by the two letters which give character to the transaction, and the evidence of the defendant, it is clear that, in respect to the $2,000 check sent Young by the defendant, the relation of debtor and creditor did not exist. The defendant company never loaned Young the amount and Young never promised to pay it. The facts repel any implied promise to do so. It is manifest that Young expressly assumed the duty to hold the goods as the property of the mercantile company and, upon the organization of the corporation, to transfer them to it. If the corporation had been organized, can there be any doubt that, by an action in the nature of a bill in equity, the performance of this duty, upon Young’s own evidence, would have been enforced and he required to assign the goods ? Is it not equally clear that, if for any good reason the agreement to organize was not effected, Young had the goods in trust for the persons who had paid for them? The jury correctly found that there was no partnership' relation between the parties. IIoav it may have been in respect to persons w’ho may have become creditors of the “commissary” or Young Mercantile Company (in process of formation) is another and different question, not presented upon this appeal. Eor the purpose of carrying into effect an agreement to open and conduct a “commissary” at the mills, to be organized under a charter, Young bought and paid for the goods and called upon defendant to pay its one-half of the amount which he had expended. Recognizing its obligation to do< so, defendant sent Young the check “in payment of the advancement that you recently made in the purchase of stock of merchandise for the commissary at Duke, and which, agreeable to under*231standing and in consideration of tbis payment, yon are to assign to tbe mercantile company to be incorporated by ns.” Young acknowledges receipt “for tbe purpose indicated.” There is nothing in tbis transaction which either shows or tends to make Young the debtor of defendant. If the goods had been destroyed by fire, is it not clear that the loss, to the extent of one-half, would have fallen upon the defendant? Instead of making Young the debtor of the defendant, the transaction savors more strongly of a payment by the defendant to Young of a debt due him. He had advanced $4,000 to purchase a stock of goods for the joint benefit of defendant and himself, and the latter was paying its part of the money advanced. The equitable principle upon which the relation of the parties rested, and by which their duties and rights are fixed, finds expression in the maxim that “Equity regards that as done which ought to be done.” Of this maxim Mr. Bispham says: “This is a very important maxim, and which lies at the foundation of many of the great doctrines of equity. Eor the purpose of reaching exact justice, equity will frequently consider that property .has assumed certain forms which it ought in justice to assume, or that parties have performed certain duties which they ought in justice to fulfill, and will regulate the enjoyment and transmission of estates and interests accordingly.” Bispham Eq., sec. 44. Professor Pomeroy says: “It is the source of a large part of that division of equity jurisprudence which is concerned with equitable property; the doctrines and rules which create and define equitable estates or interests, in a large measure, are derived from its operation. * * * In the first place, it should be observed that the principle involves the notion of an equitable obligation existing from some cause; of a present relation of equitable right and duty subsisting between two parties — a right held by one party, from whatever. cause arising, that the other should do some act, and the corresponding duty, the "ought ” resting upon the latter to do such *232act. Equity "does not regard that as done which might be done or that could be done, but only what ought to be done. Nor does the principle operate in favor of every person, no matter what may be his situation and relations, but only in favor of him who holds the equitable right to have the act performed, or against the one upon whom the duty of such performance devolved. * * * When, in this proposition, it is said that an ‘equity’ exists between the two parties, the meaning is that some equitable obligation to do some positive act with respect to the subject-matter arising from a cause recognized by the rule of equity jurisprudence rests upon B, and a corresponding equitable right to have the act doné by B with respect to the same subject-matter springing from the same efficient cause is held by A. This active relation subsisting between the two parties, a court of equity, partly acting upon its fundamental principle of going beneath the mere external form and appearance of things and dealing with the real fact, the real, beneficial truth, and partly for the purpose of making its remedies more complete, treats the resulting rights of A as though the obligation of B had already been performed — regards A, in fact, as clothed with the same ultimate interests in the subject-matter which he would receive and hold if B had actually fulfilled his obligation by doing the act which he ought to do.” 1 Pom. Eq., sec. 365 ; Adams Eq., 135 (6th Am. Ed., 295). Many illustrative cases can be found in our own and the reports of other States. The conceded facts in this case bring it within the maxim. Young, for a valuable consideration, ought to have made the assignment immediately upon the receipt of the cheek. Equity, for the purpose of effectuating the intention of the parties and doing exact justice, regards him as having done so, and secures to the defendant, to which he owed the duty, the benefit of its maxim. Young made the assignment in conformity to his agreement. He did exactly what a court of equity would have decreed him to do. Conceding that he did so because he *233found that Eis financial condition was becoming involved, we can perceive no reason why a delayed performance of a clear legal duty in respect to tbis specific property, to wbicb bis general creditors bad no claim or right, can be imputed to him or to the defendant for unrighteousness. It has been well said: “When chancery interposes to compel the performance of an act which has been covenanted to be performed, it always treats the subject as if it had been performed at the time contracted.” Thus, money placed in the hands of a trustee with direction to buy land and take title in the name of a cestui que trust will be regarded in equity as real estate and be disposed of, in the event of death before the purchase is made, accordingly. When land is devised or conveyed with direction to sell and pay the proceeds to specified persons, it will be treated as money and be so distributed in the event of death before the sale is made. Trusts will be impressed upon property by applying the maxim. As said, equity disregards mere form and looks to the substance, administering rights and remedies, moulding decrees to the securing of justice. It is immaterial whether the defendant knew of Young’s insolvency. No liens had attached, no adjudication in bankruptcy had been made on 6 February, 1904, the date of the assignment. Young made the assignment, the goods were sold and the whole matter closed up before there was an adjudication in bankruptcy. We are of the opinion that, upon the entire evidence, defendants were entitled to judgment of nonsuit.
This disposes of both appeals. Judgment will be entered that there is error in defendant’s appeal. Plaintiffs’ appeal is affirmed. It is so ordered.
Error in Defendant’s Appeal.
Plaintiffs’ Appeal Affirmed.
Hoice, J., concurred in result.