McDowell v. Goldsmith

Eccleston, J., dissented in part, and delivered the following opinion: The deed of the 14th of July 1841, is not now in controversy. I concur with the chancellor in his views respecting the • mortgage deed dated the 5th of November 1842, and the decree passed by Baltimore county court for a sale of the mortgaged property, and therefore unite with my brethren in affirming so much of the chancellor’s decree as dismisses the bill, without prejudice, in regard to the deed of 1841 and the mortgage of 1842. But I do not concur with the majority of this court in the propriety of affirming that portion of the decree which vacates the deed bearing date the 21st of October 1844. Tuck, J., delivered the opinion of this court.

It is conceded that there is no question before us as to the deed of the 14th of July 1841. Of all the creditors who offered proof of their claims, none was such prior to the 5th of November 1842, the date of the mortgage, except Walter Crook, Jr.; and if the plea of limitations can avail the defendant, none of them have a standing in court except Sarah Ann Truitt, whose claim can be enforced, if at all, only against the equity of redemption conveyed by the deed of the 16th of February 1844. The first question then to be disposed of relates to the plea of limitations, relied on by Goldsmith. There are decisions to show that, in cases like the present, this defence has been rejected, but whether correctly or not we are not at liberty to inquire, because the point has been definitively settled in this State.

The chancellor, after having discussed the question upon principle as well as authority, referred to the case of The Farmers Bank vs. Mullikin, in this eourt, December term, 1840. We have carefully examined that record and the proceedings on the appeal, and find that it fully sustains the view taken here on behalf of the defendant below. The amended bill and answers distinctly raised the issue of fraud in fact. It was asserted that the deeds-were made by contrivance and conspiracy between the parties, with intent and for the purpose of defrauding the complainants and other creditors of the grantor, and that that unlawful purpose would be accomplished if the deeds were allowed tc ³³⁷ stand as valid, inasmuch as the grantor had no other property •wherewith to satisfy his creditors.

It appears by the minutes for the decree, taken down by the clerk of the court, and by the decree itself, that the deeds were' “adjudged to have been' made in fraud of the creditors of the grantor/ and that the defence of limitations relied on in the answers of three of the defendants was sufficient to protect the interests of two of them; but that the benefit of that defence' was denied’ to the' other only because it had been waived by him.- It was urged in argument there, as here, that the grantee should bfe treated as a trustee for the creditors, and as such,-could not interposé' this defence against those for Whose use he held the property. This point is thus answered in the minutes for the decreet “Limitations will bar as to trusts created by operation'of law, though it may not in express trusts.” There being no difference between the cases, we must yield to its authority without reference to’ the decisions in other Courts.- This view of the case disposes of all the claims except those of Truitt and relieves Us from the necessity of passing upon the mortgage of the 5th of November 1842, there being on party in Court in whose behalf it can be assailed.- Moreover,» we agree with the chancellor as' to the effect of the proceedings ih equity, under the act of 1833, ch. 181, as a protection to the defendant against inquiry, in this case, into the question of fraud in obtaining that deed. The remaining questions on thesé' appeals rélaté to Truitt’s claims and the charge of fraud as to the deed of the 16th of February 1844.- This complainant did not set out her cause of action in the bill of complaint, but subsequently filed two' notes of Osborne under the commission to take proof, one for' $1100, dated the 6th of November 1843,and another for $2800, dated the 21st of October 1844, whieh wasnot due when the bill was filed. We can express' no opinion as to- the last of these claims.

The chancellor has neither allowed nor rejected it; but, on the contrary, has reserved it for further directions. We think that her claim' on the note for $1100 was properly allowed. It was signed by Osborne and endorsed by ³³⁸ Goldsmith, the payee. The objection is, that it does .net appear that she held this note when the bill was filed, but we are of opinion that she must be regarded as the owner at that time until the contrary appears.

She is described in the bill as a creditor, and at the proper time for proving her case she filed and proved this note under the commission. It does not appear when Goldsmith endorsed it, but the inference is that it was endorsed, if not on the' day of its date, at least Ipefore its maturity. Pinkerton vs. Bailey, 8 Wend., 600 . Anderson vs. Weston, 37 Eng.

Com. Law Rep., 388. Burck myer vs. Whiteford, 6 Gill, 1 . The decision of the question of fraud depends on the bill', answer and proofs.

We might rather say on the proofs, as we do not attach much consequence to the answer. The evidence on the part of the creditors was assailed as general', contradictory, and unworthy of credit. This affirmation,- we think, was more justly applied to the answer, for the contradictions are striking and irreconcilable, while the' gross carelessness and want of system and precaution in large money transactions, which, according to the answer, appear to have signalized the defendant’s habits of business, are calculated to impair the weight which an answer should have when furnishing no reason to suspect unfairness in the transactions of which it speaks. Concurring with the chancellor in what he has said respecting the case as disclosed by the answer, we proceed to consider the proofs; and, first, the admissibility of the declaration of Osborne, as proved by Spurrier and McGee.- It is a general and very salutary rule of evidence, that a party will not be permitted by his own declarations to defeat a prior deed; but it is also well settled, that in some cases the declarations and admissions of a grantor will be received where the effect may be to impair the title of persons claiming under him.

Dorsey vs. Dorsey, 3 H. & J., 410 . Walls vs. Hemsley, 4 H. & J., 243. 1 Greenl. Ev., secs. 189, 190. Another principle is, that all such facts as have not been admitted by the party against whom they are offered, or by some one under whom- he claims, ought to be proved under ³³⁹ solemn sanctions by persons having knowledge of the facts, but to this certain exceptions have also been recognized, some from very early times, on the ground of necessity or inconvenience; and among these is proof of the quality and intention of acts by evidence of declarations accompanying, or so nearly connected with them in point of time as will serve to explain their true character and purpose.

We are informed by Professor Greenleaf, (Vol. 1, sec. 108,) that it is very difficult to bring this class of cases within the limits of a particular description. The points of attention are, whether^ the circumstances and declarations are cotemporaneous with | the main fact, and whether they are so connected with it, as ) to-illustrate its character. Where a party does an act material to be understood, his declarations expressive of the character, motive or object of it are regarded as “verbal acts indicating a present purpose and intention.” Their admissibility is to be determined according to the degree of their relation to the principal subject matter of dispute, in the exercise of a sound discretion by the court. The cases will show that they need not take place immediately with the occurrence of the act, but may be before and sometimes after, provided they be calculated to unfold the nature and quality of the facts they are intended to explain, and so to harmonize with them as to constitute one transaction. 1 Greenl.

Ev., secs. 108, 109, 110. Broom's Maxims, 442, (50 Law Lib.) 7 A. & E., 384, (34 Eng. C. L. Rep.) Kolb vs. Whitely, 3 G. & J., 188 . Cross vs. Black, 9 G. & J., 210 .

Burckmyer & Adams, vs. Whiteford, 6 Gill, 14 . Garner vs. Smith, 7 Gill, 1. Miller vs. State, 8 Gill, 141 . Handy vs. Johnson, 5 Md. Rep., 450 .

This doctrine has been applied in cases like this, in which the object was to vacate deeds at the instance of creditors. Merrill vs. Meachum, 5 Day, 341 , cited by the chancellor, is clearly in point, where the declarations of the grantor, “tending to show that the deed was executed for the purpose of securing the land against the attachments of his creditors,” were admitted. But, the correctness of the principle had been questioned, if not denied, in Beach vs. Catlin, 4 Day, 284 . The case of Barrett vs. French, 1 Conn., 354 , relied on by ³⁴⁰ the defendant, is pot like the present.

It does not appear that the declarations of the grantor were offered in evidence as part of the res gesta. In Harshaw vs. Moore, 12 Iredell, 247, where a deed was jmpeached for fraud as against creditors, the declarations of the grantor, immediately before and ip .contemplation of the act, were received to show his object in d.oing it, as strong eviden.ce bearing upon the very point ip issue against the party claiming .under him. See also Ford vs. Elliott, 4 Excheq. Rep., 78.

Cases li^e th.e present .have also occurred in Maryland, ip .which the declarations of the grantor were introduced, to impeach the deeds. Duvall vs. Waters, 1 Bland, 588 , Birely vs. Staley, 5 G. & J., 432. Strike vs. McDonald, 2 H. & G., 206 . In the latter case one of the grantors was .also examined for that purpose.

The Court of Appeals did not pass ppon the .question, although the point was made. However, jhe chancellor in Duvall vs. Waters, appeajrs to have relied on the grantor’s .declarations as evidence of the alleged fraud. But th.ere is a .class of decisions in England, as well as here, .so analogous that it seems to ps they should be governed by .the same rules of .evidence. We allpde to .cases in bankruptcy, and those .arising under .opr insolvent laws, ip which deeds and transfers of property hav.e been h.eld to b.e good op ba.d, according to t.be intent pf the party ip making them, In both these .classes of cases, the quality of Jh.e act depends upop the same principle. “In questions respecting acts .of bankruptcy .the iptentipn js almost always flip yery point jp issue, and this js p.onjmonly .to be collected from the conversations importing .the existence pf those apprehepsipns which giye a character and quality to the copcomitant a.cti.ops.” 2 Evans Pothier, 247; Appendix, No. 16, sec. 11. 1 Ph.

Ev. Hearsay. 3 Gill & Johns., 188. In Bateman vs. Bailey, 5 Term Rep., 512, a declaration of the debtor mpd.e the day after (head, was held admissible; and the established doctrine in England, pow is, that the court will, in each case, consider whether the declaration proposed to be received does or does not copie within a reasonable time of the disputed act. As, if th.e question arise, whether a security were given by way of fraudulent pro- ³⁴¹ Terence, the material inquiry will be, what was the situation, conduct, and language of the bankrupt with reference to the whole transaction?

Broom’s Maxims, 441. 9 Bing., 352, 355. And this doctrine is fully recognized in Kolb vs. Whitely, 3 Gill & Johns., 188, as applicable to cases under the insolvent laws. There, certain entries in the books of the insolvents, and the declarations of one of the firm, made a few days before the property was delivered to the appellant, were received to show that, at the time of the transfer, the parties contemplated becoming insolvent debtors. The rule stated is, that, “where it is necessary, in the course of a cause, to inquire into the