CURETON, Judge:
This case arose from a real estate development project in Horry County, South Carolina. The project involved the acquisition of several tracts of land for development, construction, and eventual leasing and sale of lots, single-family dwellings, and multifamily dwellings. The project was to be developed in several phases. The project also included a proposed golf course, club house, tennis courts, and swimming pool. The two main actors in the development of the project were (1) George Magrath, Jr., an executive vice president of Peoples Federal Savings & Loan Association (Peoples); and (2) R.L. Propps, a real estate developer, president of Justice, Inc., and president of Cheezem Development Corporation (Cheezem). The appellant, American Community Development Group, Inc., is the successor corporation to Cheezem.
Peoples commenced this foreclosure action against Myrtle Beach Golf and Yacht Club, a general partnership, and the other named defendants in September 1988. The appellants, American Community Development Group, Inc. (ACDG) and John A. Hinson,1 individually and as trustee of West Coast Pension and Profit Sharing Trust, also hold a mortgage on the property. They filed an answer denying thé material allegations of the complaint. By way of counterclaim, ACDG asserted Peoples was individually liable to it for the debt secured by its mortgage under several theories of lender liability. ACDG also sought equitable subordination of Peoples’s mortgage to its mortgage. Peoples replied, inter alia, (1) ACDG had sued and later settled with the partnership; (2) the settlement provided for a mortgage to be given by the partnership to ACDG; and (3) the express terms of the mortgage made it inferior to Peoples’s mortgage. Peoples further al-
1 Hinson owns an interest in ACDG’s note and mortgage. For purposes of this decision, Hinson’s interest is considered with that of ACDG and they are referred to in the singular. [136] leged ACDG was estopped, judicially and collaterally, to assert that its mortgage was superior. Peoples also denied it was liable under any of the theories of lender liability and alleged ACDG waived its right to assert the superiority of its lien. The master ordered the mortgage held by Peoples foreclosed as a first lien. We affirm.
FACTS
Prior to February 24, 1984, Justice, Inc., through its president, R.L. Propps, approached Peoples about the development of some land in Myrtle Beach, South Carolina. The development concept would oblige Peoples to provide the funding to purchase and develop the land through loans. In return, Peoples would share in the potential profits from the development through a wholly owned subsidiary service corporation. In furtherance of this plan Peoples incorporated a wholly owned subsidiary, Peoples Joint Venture Group, Inc. (Peoples Venture). Justice, Inc. incorporated Myrtle Beach Golf and Yacht Club, Inc. (MBGYC, Inc.). Those two corporations together formed the partnership known as Myrtle Beach Golf and Yacht Club on February 28,1984. Peoples Venture owned twenty-five (25%) percent of the partnership and MBGYC, Inc. owned the remaining seventy-five (75%) percent. Profits and losses were to be shared in proportion to the ownership interests of the partners. The partnership agreement provided each partner would make initial capital contributions of one hundred dollars. Finally, the agreement provided the monies for acquisition and development costs would be borrowed by the partnership from “an affiliate of Peoples [Joint Venture].”
On February 29, 1984 MBGYC, Inc. assigned to the newly formed partnership its option to purchase tracts I and II of the land to be developed.2 At the time of the exercise of the option to purchase, the seller offered the partnership one million ($1,000,000) dollars to release the seller from the option. The partnership refused the offer. Thus, at the inception of [137] the partnership relationship, Peoples contributed to the partnership its commitment to provide financing for the development while Justice, Inc. provided development expertise, plans that had been approved by appropriate government agencies and an option with considerable value.
Tracts I and II of the property represented the first phase of construction of the development. Tract I was to contain single- and multiple-family homes. Tract II was the amenities tract and the land on which an eighteen-hole golf course, tennis courts, and swimming pool were to be built. The amenities tract is the subject of this foreclosure.
On February 29, 1984, Peoples made two loans to the partnership totaling $4,500,000. One loan of $3,000,000 appears to have been primarily used for the acquisition and development of the amenities tract. On August 27, 1984, Peoples made a loan to the partnership in the amount of $350,000. On September 20,1984, Peoples made another loan to the partnership in the amount of $1,800,000. These funds were advanced for the purposes of acquiring the property and for construction and development costs. Construction began; roads were built; electrical, water, and sewage disposal facilities were constructed. According to Magrath’s testimony, things were going well. With the exception of the $3,000,000 amenities loan, virtually all of these other loans have either been repaid or extinguished through foreclosure.
Sometime after June 1985, Cheezem Development Corporation decided it would buy the majority of Propps’s developments.3 Arthur Andersen was retained to develop a plan to effectuate these purchases. Merrill-Lynch Capital Corporation was to finance the purchases. Cheezem had an appraisal done of the partnership’s properties as of August 1, 1985. The appraisal indicated a net value of $14,100,000. Propps testified his company figured the project had a net value of about ten to twelve million dollars on August 9,1985.
On August 9, 1985, Peoples sold all of its stock in Peoples Venture to Propps for the sum of $403,000. To secure the pay[138] ment of the purchase price, Propps and the partnership gave Peoples a note and mortgage for the full purchase price. Interest on the note and mortgage was delayed until maturity. Payments were to be made from mortgage lot releases on Phase II of the development. The stock purchase price was established by estimating the profit Peoples Venture would have received from Phase II had it stayed in the project. The master found the $403,000 represented the fair market value of the stock and the stock sale was bona fide. ACDG claims the stock’s value did not even approach $403,000 and the sale was simply a scheme to remove Peoples from the partnership, yet ensure it continued to receive profits from the project.
Propps testified that while he was not satisfied with the purchase price and Peoples refused to negotiate regarding it, he thought it was nevertheless fair. He further testified the main bone of contention regarding the negotiations was the deferral of interest. Peoples had insisted on no deferral, but eventually agreed to a deferral of all interest until the principal was payable. Magrath confirmed the fact the deferral of interest was the main bone of contention in the sale and testified the price was fair.
On August 13, 1985, Loyola Federal Savings became the major lender for the project by committing to lend the partnership $13,000,000 for the construction of housing. The focus of Peoples then turned to financing the development of the golf course and amenities tract. Thereafter on October 9,1985, Peoples loaned the partnership $5,100,000. The $3,000,000 amenities loan from 1984 was refinanced from this loan.
On September 30, 1985, ACDG, in furtherance of its predecessor’s plan to purchase Propps’s interest in the partnership, transferred $257,000 to MBGYC, Inc. On October 2, 1985, an additional $493,000 was wired to Justice, Inc. Both of these corporation were controlled by Propps. On October 30, 1985, ACDG wired $150,000 to Justice, Inc. ostensibly as operating expenses for the partnership.
In January of 1986, Propps and his partner, Dale Murray, had a disagreement relative to the acquisition of the Myrtle Beach project and another development. As a result, ACDG decided to cancel the purchase of the Myrtle Beach project. After extended negotiations, Justice, Inc. signed an open note to repay ACDG $750,000 and the partnership signed an open [139] note to repay ACDG the $150,000 allegedly advanced to it.4 Justice, Inc. and the partnership defaulted in the payment of the notes.
Early in December 1985, construction slowed down and eventually came to a halt around April, 1986. Construction was resumed on June 30, 1986. During this period, the partnership was involved in various lawsuits, including several to establish attachments and liens against the partnership.
In June 1986, Myrtle Beach Holding Corporation bought the interest of Propps and Justice, Inc. in the partnership. At that time $1,800,000 was infused into the project. About the same time, ACDG put the partnership into involuntary bankruptcy. Pursuant to order of the bankruptcy court, Peoples operated the golf course until February 13,1989. At that time, Ted Miller, an employee of Peoples, was appointed receiver to operate the golf course as part of the instant foreclosure proceeding.
On March 12,1987, ACDG brought suit against Propps, Justice, Inc., and the partnership to recover on the two notes. The suit was settled by a court-approved agreement. The agreement provided the partnership would sign a new note and give ACDG a mortgage lien on all property owned by the partnership. The partnership and Propps confessed judgment to ACDG for $900,000. The mortgage to ACDG expressly provided that it “is junior and subordinate to the lien of [Peoples], together with any extensions and/or renewals thereof.”
DISCUSSION
Because the predominate issues involved in this appeal are equitable, we review the evidence to determine the facts in accordance with our own view of the preponderance of the evidence. 12 S.C. Juris. Equity § 29 (1992). While this standard permits us a broad scope of review, we will not disregard the findings of the master who saw and heard the witnesses and was in a better position to evaluate their credibility. Tiger, Inc. v. Fisher Agro, Inc., 301 S.C. 229, 391 S.E. (2d) 538 (1989).
[140] We note first the several theories of lender liability advanced by ACDG, though distinct in theory, are overlapping and blurred as they have been applied by the courts.
I.
Participation/Involvement Theory of Liability
ACDG argues Peoples’s participation and involvement in the construction and marketing of the project was so pervasive as to amount to lender involvement that was “not normal commercial practice for a lender.” Therefore, it asserts, Peoples should be held liable for the debt owned ACDG by the partnership. We disagree.
The partnership agreement provided MBGYC, Inc. would be the managing general partner, but gave Peoples Venture veto authority over major management decisions as defined in the agreement. Both Propps and Magrath testified Peoples Venture did not participate in any major management decisions before or after August 9,1985.
In the case of Kennedy v. Columbia Lumber and Mfg. Co., Inc., 299 S.C. 335, 384 S.E. (2d) 730 (1989), our supreme court discussed the theories by which a lender may incur implied warranty liability to the purchase of a home acquired by the lender after the debtor defaults. The court stated, inter alia, “[liability may also attach when the lender becomes highly involved with construction in a manner that is not normal commercial practice for a lender.” Id. at 340, S.C. (2d) at 734. Also, in Roundtree Villas Ass’n Inc. v. 4701 Kings Corp., 282 S.C. 415, 423, 321 S.C. (2d) 46, 51 (1984), our supreme court held that when a lender, in effect, took over a construction project and “undertook to market the units through a corporation it had created and when it undertook to repair defects which existed to promote sales, a common law duty to use due care arose.” In such a case the lender can be said to have become the developer. See Kennedy v. Columbia Lumber, 299 S.C. 335, 384 S.C. (2d) 730.
The Roundtree Villas case was careful to point out the lender would not incur liability for defects in construction occurring prior to the time it became involved in the construction repair and management of the project. Inferentially, a lender also will not be held liable for defects or injury occur[141] ring after it in good faith removes itself from the project, unless the defects or injury may be traced to its prior involvement. In the instant case, ACDG claims Peoples was a participant or partner in the partnership from the date of formation and never in good faith removed itself from that status. Therefore, it argues the $5,100,000 loan was an investment in the partnership and not a loan. To fully explore this argument we must consider the posture of Peoples vis-a-vis the partnership before and after August 9, 1985, the date of the stock sale.
The master concluded the facts did not warrant piercing the corporate veil of Peoples Venture so as to make Peoples, its sole shareholder, a partner in the partnership. ACDG vigorously contends the criteria for disregarding corporate existence, as announced in this court’s decision in Sturkie v. Sifly, 280 S.C. 453, 313 S.E. (2d) 316 (Ct. App. 1984), are present, in this case. Specifically, it points out Peoples Venture was undercapitalized, failed to observe corporate formalities, had no office separate from Peoples, had the same directors as Peoples, and was used as a mere facade to carry on the business of Peoples. While these factors are present here to some degree, they represent only the first prong of the Dewitt5 test adopted in Sturkie. The second prong requires that there be an element of injustice or fundamental unfairness should the separate corporate existence of Peoples Venture not be disregarded. The corporate form may be disregarded only where equity requires the action to assist a third party. Id. at 458, 313 S.E. (2d) at 319. To establish fundamental unfairness, ACDG must show (1) Peoples was aware that ACDG had a claim against the partnership, and (2) thereafter acted in a self-serving manner with regard to the property of the partnership and in disregard of ACDG’s claim against the property. Id. at 455, 313 S.E. (2d) at 319. At the time of the stock sale and the $5,100,000 loan, Peoples was unaware of any claim by ACDG.6 ACDG has not convinced us the requisite injustice or unfairness is present here. We, [142] therefore, refuse to pierce the corporate veil of Peoples Venture.
Although we refuse to pierce the corporate veil of Peopies Venture, Peoples may nevertheless be liable for the debt of the partnership after August 9, 1985, if it was an active participant in the partnership in the construction, management and marketing of the development. ACDG points out several areas of involvement by Peoples with the partnership which it claims were highly abnormal commercial practices for a lender. They include (1) undercapitalization of the partnership; (2) advancement of money to the partnership after construction stopped; (3) guaranty of payments to subcontractors; (4) retention of an interest in the profits in Phase II of the project through the stock sale; (5) communication with the homeowners association concerning homeowner concerns about the project; (6) issuance of checks payable directly to subcontractors; (7) advancement of $28,000 on one occasion to fund the partnership’s payroll; (8) involvement in efforts to sell the project; and (9) letters to government agencies requesting approval or sanction of the project. Further, ACDG presented expert testimony that the involvement by Peoples in the project constituted abnormal commercial practices. Additionally, ACDG points out other areas of involvement by Peoples. However, these other involvements occurred pursuant to court order or after default and under the default provisions of the mortgage in foreclosure.7 We, thus, find them unpersuasive on the issues before us.
As pertains to the issues of (1) advancing money to the partnership after construction stopped, (2) guaranteeing payments to subcontractors, (3) issuing checks directly payable to subcontractors, and (4) advancing $28,000 to fund a weekly payroll, it is implicit the actions were taken at the behest of with the approval of the partnership. In fact, there is a letter in the record from the partnership to Peoples requesting the $28,000 advance on an emergency basis the primary lender, Loyola Federal Mortgage Company, was snowed in and could not get the payroll money to the partnership on time. As relates to the undercapitalization of the partnership, it is true most authorities consider this a significant circumstance in [143] imposing liability on a corporate organizer who grossly under-capitalizes. See Harry G. Henn, Law of Corporations 257 (2d ed. 1970). Here, however, Peoples did provide the major funding needs of the partnership, at least until the development outpaced its resources. We also note that Propps, the agent for ACDG’s predecessor corporation, was a party to any undercapitalization. Additionally, there is ample evidence to suggest the major reason the project failed was not undercapitalization, but rather the fact Propps siphoned money away from the Myrtle Beach project to invest in other projects. Finally, as discussed later, Peoples effectively removed itself from any ownership interest in the partnership prior to ACDG’s investment in it. We see no causal relationship between the initial capitalization and ACDG’s injury.
We are also unpersuaded the August 9,1985, stock sale was a scheme to enable Peoples to remove itself from the project yet to insure it continued to receive profits from it. In support of this claim, ACDG points out (1) the purchase price was based on the projected profits Peoples would have received from Phase II had it stayed in the project; (2) Peoples accepted a note and mortgage for the entire stock purchase price; (3) partnership property was mortgaged to secure the note; (4) interest payments on the note were delayed until maturity; (5) the project was in trouble in August 1985 and had no monies; and (6) Peoples never reflected the note as a receivable on its books.
The record does not reflect Peoples coerced Propps in any way into purchasing its stock.8 In fact ACDG’s expert testified and the record reflects Propps manipulated Peoples. There is some question about the project’s worth on August 9,1985. If we are to accept the appraisal obtained by ACDG’s predecessor, it was worth as much as $14,000,000 at that time. Peoples Venture’s one-fourth interest would have thus far exceeded the stock sales price. While acknowledging Peoples refused to negotiate the stock sales price, Propps nevertheless thought the price was fair. Although acknowledging the partnership had no monies in August 1985, Propps testified the partner[144] ship had presales of homes in the range of twelve to fifteen million dollars with over a million dollars in earnest money on deposit in its trust account. The evidence suggests Propps was willing to pay Peoples its price for the stock because he intended to sell the project to Cheezem Development Corporation in any event.9
Magrath testified Peoples had no ulterior motive in removing itself from the partnership. He testified the project developed so rapidly, Peoples could not keep pace with the partnership’s financing requirements. Thus, pursuant to a bail-out provision in the partnership agreement, it withdrew from the partnership.10 Magrath maintained the purchase price was fair and offered plausible explanations for accepting a note for the full purchase price and not entering the sale as a receivable on Peoples’s books.11 Moreover, ACDG’s predecessor corporation through its agent Propps was fully aware of this transaction prior to ACDG’s investment in the partnership. The master necessarily made credibility determinations in finding the sale was an arm’s-length transaction. On these facts, ACDG has failed to demonstrate fraud, overreaching, lack of consideration, misrepresentation, or bad faith in the August 9, 1985 sale. We sustain the master’s finding on this point.
As relates to (1) Peoples’s involvement with the homeowners association, (2) its partnership in negotiations to sell the project, and (3) correspondence requesting approval from [145] government agencies, we find these activities are not unusual under the circumstances. As a lender Peoples was interested in getting the project approved and seeing it succeed. Its involvement with the homeowners association was as a lender responding to the association’s inquiry about the status of the project. When it became apparent the project needed the infusion of money, Peoples participated in discussions to find a new purchaser primarily because it was being asked to substantially discount its debt. There is no indication Peoples actually proceeded on its own to locate potential purchasers. Finally, the letters written by Peoples to government agencies occurred in 1984.
In summary, we see the involvement by Peoples with the project as that of a local lender who had initially lent its name and resources to the project and did not want to see it fail. When Peoples determined the project would overwhelm its funding capabilities, it decided to step aside and let another lender provide the funding. In August 1985, it removed itself from an ownership position in the project by the sale of the stock of its subsidiary but agreed to complete the financing of phase I of the development. We do not think these actions should require it to be responsible for a debt incurred by the partnership long after Peoples removed itself from an ownership interest in the partnership. Peoples’s involvement in the affairs of the partnership after August 9, 1985, does not approach the involvement of the lender in the affairs of the builder in Roundtree. Finally, we observe ACDG’s loss of its investment which gave rise to its mortgage was (1) not related to Peoples’s activities in any way; (2) occurred during a time when Peoples was impotent to affect the actions of Propps or the partnership; and (3) was the direct result of ACDG’s dealings with its own agent Propps. Equity will not under such circumstance burden Peoples with the partnership’s debt to ACDG.
II.
Principal/Agent Theory of Liability
Agency is a fiduciary relationship which results from the manifestation of consent by one person to another to be subject to the control of the other and to act on his behalf. Restatement (Second) of Agency § 1 (1958). An [146] agreement may result in the creation of an agency relationship although the parties did not call it an agency and did not intend the consequences of the relationship to follow. Agency may be proved by circumstantial evidence showing a course of dealing between the two parties. If requisite facts exist to prove a principal/agent relationship, this theory has been used to hold a lender liable for the debts of a borrower. 10 S.C. Juris. Banks and Banking § 171 (1992).
The master found Peoples did not exercise the degree of control necessary to hold it liable to ACDG under the principal/agent theory of lender liability. The case of A. Gay Jenson Farms Co. v. Cargill, Inc., 309 N.W. (2d) 285 (Minn. 1981), is most often cited for imposing liability upon this theory. In that case a lender was found liable to other creditors for the indebtedness of a borrower when the borrower collapsed after Cargill withdrew financing. The court stated:
We deal here with a business enterprise markedly different from an ordinary bank financing since Cargill was an active participant in Warren’s operations rather than simply a financier. Cargill’s course of dealing with Warren was, by its own admission, a paternalistic relationship in which Cargill made the key economic decisions and kept Warren in existence.
Although considerable interest was paid by Warren on the loan, the reason for Cargill’s financing of Warren was not to make money as a lender but, rather, to establish a source of market grain for its business.
Id. at 292,293.
The Restatement (Second) of Agency § 14(0) (1958) supports the concept of lender liability under the agency theory where the lender takes control of its borrower. Comment (a) to § 14(0) states:
A security holder who merely exercises a veto power over the business acts of his debtor by preventing purchases or sales above specified amounts does not thereby become a principal. However, if he takes over management of the debtor’s business either in person or through an agent, and directs what contracts may or may not be made, he becomes a principal, liable as any principal for [147] the obligations incurred thereafter in the normal course of business by the debtor who has now become his general agent. The point at which the creditor becomes a principal is that at which he assumes defacto control over the conduct of his debtor, whatever the terms of the formal contract with his debtor may be.
ACDG argues Peoples had total control of partnership business affairs both before and after August 9, 1985. In support of this argument it again stresses many of the points discussed in the preceding discussion. Unlike the Cargill case, Peoples did not abandon financing of the project. Instead, it accommodated the project by lending monies even after it withdrew from the partnership. ACDG offered no evidence that Peoples made any operational recommendations or suggestions to the partnership on construction and development matters after August 9, 1985. Peoples’s actions of guaranteeing payments to two subcontractors and making other credit accommodations to the partnership were taken primarily to protect its collateral. We hold the actions of Peoples after August 9,1985, do not demonstrate it made key decisions regarding or had de facto control over the conduct of the partnership. Id.
III.
Joint Venture Theory of Liability
A joint enterprise exists where there are two or more persons united in the joint prosecution of a common purpose under such circumstances that each has authority, express or implied, to act for all in respect to the control of the means and the agencies employed to execute such common purpose. Long v. Carolina Baking Co., 190 S.C. 367, 3 S.E. (2d) 46 (1939). Further, in order to constitute a joint enterprise, there must be a common purpose and community of interest in the object of the enterprise and an equal right to direct and control the conduct of each other with respect thereto. Spradly v. Houser, 247 S.C. 208, 146 S.E. (2d) 621 (1966).
ACDG relies on the often cited case of Central Bank N.A. v. Baldwin, 94 Nev. 581, 583 P. (2d) 1087 (1978), for support of its argument. In Central Bank, the Nevada Supreme Court [148] concluded a joint venture existed where purchasers of several apartment complexes sued the lender, Central Bank, as a joint venturer with the building contractor for construction defects. After the lender had approached the builder to “joint venture” some construction projects, the lender arranged to have its wholly owned subsidiary form a new construction corporation with the builder. The Nevada court held the lender was engaged in a joint venture for profit with the building contractor because its subsidiary owned half of the construction company’s stock and the lender had approached the contractor to joint venture the construction project.
Having concluded (1) the corporate veil of Peoples Venture should not be pierced; (2) the stock transfer from Peoples to Propps was legitimate; and (3) after August 9,1985, Peoples had no interest in or control over the partnership except as a lender, we now hold ACDG may not recover under the joint venture theory.
IV.
Instrumentality or Alter Ego Theory
Under this theory of liability, when a lender controls the business decisions and actions of its borrower, the borrower becomes the instrument or alter ego of the lender. 10 S.C. Juris. Banks and Banking § 170 (1992); see also Krivo Indus. Supply Co. v. National Distillers & Chem. Corp., 483 F. (2d) 1098 (5th Cir. 1973).
In the Krivo case, the Fifth Circuit Court of Appeals gave expression to the elements of an instrumentality or alter-ego theory. The court stated the control required for liability under the “instrumentality” doctrine amounted to total domination of the subservient corporation manifested no separate corporate interests of its own and functioned solely to achieve the purpose of the dominant corporation. Id. at 1106. The' court noted the instrumentality theory would not apply even in the presence of “total domination” without some misuse of control by the dominant corporation resulting in injustices or inequitable consequences. Id.
It is evident that after August 9,1985, Peoples did not exercise control over the business and financial affairs of the partnership to such an extent that the partnership became its mere alter ego. Certainly, Peoples did not totally dominate [149] the partnership, nor engage in conduct resulting in inequitable consequences to ACDG. Further, it has not been shown that Peoples used its influence in such a way as to benefit itself at the expense of ACDG or other creditors.12 For these reasons and the reasons stated in the previous discussion in Part I, we refuse to impose liability on Peoples based on the instrumentality and/or alter ego theory.
V.
Equitable Subordination
Finally, ACDG argues the mortgage lien of Peoples should be subordinated to its mortgage lien under the doctrine of equitable subordination. Equitable subordination is a remedy often sought in the bankruptcy court.13 Under this doctrine, a shareholder’s claim as a creditor to property of the bankrupt corporation may be subordinated to the claims of other creditors of the bankrupt when the debt to the shareholder is not a bona fide debt. Taylor v. Standard Gas and Electric Co., 306 U.S. 307, 59 S.Ct. 543, 83 L.Ed. 669 (1939). ACDG claims the loan of Peoples under foreclosure was simply an investment and not a bona fide debt. On the other hand, Peoples asserts the loan was bona fide and it had divested itself of all control and interest in the partnership prior to the time the loan was made. We find ACDG’s position to be without merit.
The case of Pepper v. Litton, 308 U.S. 295, 60 S.Ct. 238, 84 L.Ed. 281 (1939), states the basis for application of the doctrine:
[These cases] involve simply the question of order of payment. At times equity has ordered disallowance or subordination by disregarding the corporate entity. That is to say, it has treated the debtor-corporation simply as a part of the stockholder’s own enterprise, consistently with the course of conduct of the stockholder. But in that situation as well as in the others to which we have referred, a sufficient consideration may be simply the violation of rules of [150] fair play and good conscience by the claimant; a breach of the fiduciary standards of conduct which he owes the corporation, its stockholders and creditors. He who is in such a fiduciary position cannot serve himself first and his cestuis second. He cannot manipulate the affairs of his corporation to their detriment and in disregard of the standards of common decency and honesty. He cannot by the intervention of a corporate entity violate the ancient precept against serving two masters. He cannot by the use of the corporate devise avail himself of privileges normally permitted outsiders in a race of creditors. He cannot utilize his inside information and his strategic position for his own preferment. He cannot violate rules of fair play by doing indirectly through the corporation what he could not do directly. He cannot use his power for his personal advantage and to the detriment of the stockholders and creditors no matter how absolute in terms that power may be and no matter how meticulous he is to satisfy technical requirements. For the power is at all times subject to the equitable limitation that it may not be exercised for the aggrandizement, preference, or advantage of the fiduciary to the exclusion or detriment of the cestuis. Where there is a violation of those principles, equity will undo the wrong or intervene to prevent its consummation.
Id. at 310, 311, 60 S.Ct. at 246-47, 247.
In Matter of Multiponics, Inc., 622 F. (2d) 709 (5th Cir. 1980), the Fifth Circuit Court of Appeals “re-articulated” the test for determining equitable subordination in the bankruptcy setting: (1) the claimant must have engaged in some type of inequitable conduct; (2) the misconduct must have resulted in injury to the creditors of the bankrupt or conferred an unfair advantage on the claimant; and (3) equitable subordination of the claim must not be inconsistent with the provisions of the Bankruptcy Act. Id. at 713.
The linchpin in the decisions applying the doctrine of equitable subordination is the conviction that insider misconduct caused injury to the creditors of a bankrupt corporation. See In re American Lamber Co., 7 B.R. 519 (Bankr. Minn. 1979); 10 S.C. Juris. Banks and Banking § 173 (1992). Here, the evidence does not show Peoples was an insider after August 9, [151]*1511985. Moreover, ACDG has not convinced us Peoples engaged in any inequitable conduct before or after Aug. 9,1985, or the activities of Peoples injured ACDG or any other creditor. Thus, even if we were to apply the doctrine in this case, it would be of no avail to ACDG.
OTHER BASES FOR AFFIRMANCE
We find it difficult to understand the equity of ACDG’s position in view of the fact the record shows ACDG’s mortgage lien emanates solely from its investment of funds to purchase Propps’s ownership of the partnership. Thus, assuming Peoples’s loan was an investment, as between the two investments, we know no rule of equity that would require the subsequent investment to receive priority over the prior investment. Furthermore, it seems to us that where the bulk of Peoples’s loan proceeds were utilized in the development of partnership property, equity would require that loan to be repaid prior to ACDG’s investment since it is doubtful whether any significant portion of ACDG’s investment ever made it to the partnership’s coffers.14
We also note ACDG should be estopped to complain of the priority of Peoples’s mortgage where ACDG’s mortgage expressly provides it is subordinate to the bank mortgage. Ordinarily, one who accepts a mortgage with a provision that it is subordinate to a prior mortgage is estopped to deny the superiority of the prior mortgage. Mark v. Maberry, 222 Ark. 357, 260 S.W. (2d) 455 (1953); 31 C.J.S. Estoppel § 39 (1964). This species of estoppel is often referred to as estoppel by deed as distinguished from equitable estoppel or estoppel in pais. Territory of Alaska v. Guerin, 140 F. Supp. 440 (D. Alaska 1956); see 7 S.C. Juris. Estoppel and Waiver §§ 6-14 (1991); see 15 Words and Phrases Estoppel by Deed (1950 and Supp.).
As a corollary to the preceding conclusion, we observe that but for the settlement between ACDG and Propps, ACDG would have no mortgage. ACDG should not on the one hand [152] be permitted to disavow the agreement as to priority, yet affirm it as to the validity of its mortgage. See In re Solomon, 40 F. Supp. 62, 63 (D. Pa. 1941). Additionally, it seems to us anomalous for ACDG to assert Peoples was a partner in the partnership, yet claim the confession of judgment and mortgage are valid. Under partnership law, one or more but less than all the partners have no authority to confess a judgment unless authorized by the other partners. S.C. Code Ann. § 33-41-310(3)(d) (Rev. 1990).
CONCLUSION
We hold the preponderance of the evidence establishes that after August 9,1985, Peoples was not involved in a joint venture with the partnership to develop the project. It did not control either the finances or management of the partnership after that date. The actions of Peoples were either in keeping with usual lender practices or were done with the consent of the partnership or the court and with the intent of protecting its collateral and ensuring the viability of the project. We, accordingly, affirm the order of the master.
Affirmed.
Bell, J., concurs.
Gardner, J., dissents in separate opinion.