Christie v. Bishop

1 Barb. Ch. 105 | New York Court of Chancery | 1845

The Chancellor.

The answer of Bishop admits facts which show, as against him, that the original bond and warrant were given to secure a usurious loan. And as the legal title to the judgment was in him by survivorship, and as he was also one of the personal representatives of Hance, his co-plaintiff in the judgment, the vice chancellor was right in supposing his answer was also sufficient proof of the facts, so far as the estate of Hance was interested in the judgment. Again; E. Hance has joined in the answer with Bishop, and sworn to her belief of the truth of the several matters which, in the answer, are stated to be true upon his own knowledge. The answer therefore admits the usury, so far as the original defendants in the suit had any interest in the judgment at the time of filing the original bill. And if those defendants, or either of them, had been the actual owners of the judgment, and of the certificates of sale by the sheriff on the execution, at the time of the commencement of this suit, the complainant would have been entitled to all the relief specifically prayed for in his bill; without any further proof of the usury than what is contained in the joint and several answer of Bishop and E. Hance. In that case, the only question for consideration would have been as to the construction of the prayer for relief.

From the peculiar phraseology of that prayer it is difficult to ascertain whether it was intended as an offer to pay what was equitably due upon the judgment, after deducting the several sums paid for principal and interest, and usurious premiums for forbearance from time to time; of was only intended as an offer to pay the original sum loaned, without interest, after deducting from the amount of the original loan the whole amount of such payments, as an offset against the principal of the loan. The vice chancellor appears to have adopted a third construction. And he has treated the payments as only applicable to the principal moneys loaned, so far as they exceeded the legal interest due upon the loan at the time such payments were made; but has not required the complainant to pay interest on the balance remaining due upon the loan, subsequent to the last payment. In the view which I have taken of the case, however, it is not necessary to inquire which of these several constructions of the prayer of the bill was right. For the complainant was not entitled, upon the facts of the case as they appear upon the pleadings in reference to the- defendant Robinson, to as favorable a decree as the vice chancellor has actually made. And if Robinson had appealed, I should have been compelled to reverse the whole decree, and to dismiss the bill as to him; and to make a decree against the other defendants, directing them to refund to the complainant the moneys received from him, and so much as they had realized or were entitled to receive from Robinson upon the sale under the judgment, after deducting therefrom the §2375 actually loaned to the complainant, and the legal interest thereon. In other words, the complainant would have been entitled to the same decree against Bishop and E. Hance as if he had paid the whole amount directed to be collected upon the execution, to Robinson, as the assignee of the judgment; and had then filed his bill against Bishop and E. Hance to recover back all the usurious premiums which he had paid to Bishop and Hance, and also those which he had been compelled to pay to the assignee of the judgment.

The vice chancellor was right in supposing that Robinson, who was the purchaser of atmere chose in action, and who had not actually paid the purchase money therefor at the time of the commencement of this suit, was not entitled to protection as a bona fide purchaser, as against the complainant’s equity, if he had any. But in making the decree appealed from, the vice chancellor appears to have entirely overlooked the circumstance that the fact of the usury, as alleged in the bill, is not admitted by the answer of Robinson; but that on the contrary it is denied, upon the information and belief of this defendant, in the general traverse at the conclusion of his answer. The bill called upon Robinson to state what was the consideration of the assignment to him, and whether the same was an actual and bona fide sale. And the answer, which is responsive to the bill in this respect, is that it was an actual and bona fide sale. In other words, it was not a mere nominal transfer of the sheriff’s certificates, and of the balance due upon the judgment, for the use and benefit of the assignors. And' if the complainant has not succeeded in proving the fact of usury in the judgment, as against the defendant Robinson, the latter is entitled to retain the benefit of his purchase; and the remedy of the complainant should have been against the assignors, for what they were equitably liable to pay, upon their own admission of the facts as against themselves.

The vice chancellor, in making his decree, probably proceeded upon the supposition that the answer of Bishop, under whom Robinson claimed by assignment, was evidence, as against the latter, that the judgment was usurious. This would have been so, if the sale and assignment to Robinson had been made subsequent to the putting in of such answer. But a party who has parted with his right or interest in property, or in a chose in action, by an absolute sale and assignment to another person, cannot, by his subsequent admissions, affect the right of the purchaser. Indeed, the supreme court of this state has gone still further, and has held that the admissions of a former owner of personal property, or of a chose in action, even if made before he parted with his title, are not evidence as against his vendee. (Beach v. Wise, 1 Hill's Rep. 612. Stark v. Boswell, 6 Idem, 495.) And it is said in a note to the last mentioned case, that the doctrine of these cases was directly sanction sd by the court for the correction of errors, in December, 1844, in the case of Paige v. Cagwin. I agree with Mr. Justice Bronson, however,

that the rejection of the admissions of the former owner of per-, sonal property, or of choses in action, other than negotiable securities, made by such owner before he parted with his interest in the property, was a departure from a well established principle of the law of evidence. And if it is hereafter to be. followed, it must be upon the ground that the question is no longer open to discussion in the courts of this state. It would however be equally a departure from principle to allow admissions of a former owner of property, made after he had parted with all his interest therein, to be given in evidence; to affect the, right of the purchaser, in a contest with a third perspn. And the fact that such admission is made upon the oath of the former owner, does not alter the principle, where such oath is made ex parte, and without any opportunity for the party against whom, it is to housed, to cross-examine the person making such admission. It is a general rule,, therefore, not to allow the admissions; or statements, in the separate answer of one or more defendants, to be read in evidence in this court, to sustain the complainant’s case against a co-defendant, unless they stand in such a relation to each other that their admissions, not under oath, would be evidence against each other; as in the case of several defendants., standing in the relation of co-pa,rtners, or as having a joint interest in the subject matter of the litigation. (Clark's Ex'rs. v. Van Reimsdyk, 9 Cranch, 156. Pritchard v. Draper, 1 Russ, & Myl, Rep. 200. Gres. Ev. in Eq. 24.) There are indeed, two cases in which the late Chief Justice Marshall is supposed to have expressed an opinion that the rule, that the answer of one defendant co.uld not be read in evidence against another,, except when, they hold a joint interest, does not apply to the case, of a defendant who has. derived title to the subject matter of the, litigation, under or through the one wh.ose answer is offered in evidence against such defendant. (Field v. Holland, 6. Cranch, 24, Osborne v. The United States Bank, 9 Wheat, Rep, 332.) And, I see. that the first of these cases is referred to by Professor Greenleaf, in his recent, and very valuable treatise, on the law of evidence, Greenl, Ev. 210, § 178,) as sustaining the same principle.

In the case of Field v. Holland this precisé' question was not before the court; and the opinión of Chief Justice Marshall only goes to the point, that thé answer of a defendant through whom' the co-defendant claims is evidence in favor of such co-defendant, as to matters which both wére called on to answer; in relation to transactions which took place before the sale to such co-defendant. It may perhaps be inferred from the language of the chief justice, in that case, that if the answer of Holland had admitted the facts charged in the complainant’s bill, instead of denying them, it cotild have been Used as evidence against his co-defendants; who had purchased under the judgment in his favor against Cox. But there certainly was nothing to authorize the reporter, in his syllabus of the decision in that case, to state, as a point decided by the court, that the answer of one defendant is evidence against other defendants claiming through him. In the case of Osborne v. The Bank of the United States, the question arose as to how far the answer of one treasurer of the"state of Ohio was evidence against his successor in office, as to the identity of funds taken from the bank by the former treasurer; both being joined as defendants in the same suit. And in reference to the principle of evidence, that the answer of one defendant cannot be read in evidence against another, Chief Justice Marshall says, this is generally but not universally true. Where one defendant succeeds to another, so that the right of the one devolves on the other, and they become privies in estate, the rulé is nbt admitted to apply. Thus if an ancestor die pending a suit, and" the -proceedings be revived against his heir, or if a suit be revived against an éxecutor or administrator, the answer of the deceased person, or any other evidence establishing any fact against him, might be read also against the person who succeeded to him.” And it certainly seems to have been the opinion of the court in that case, that these principles, the Correctness of which no one can dispute, were applicable to the case of an answer put in by a defendant who had parted with all his interest in the subject matter of the litigation, previous to the commencement of a suit, to one who was afterwards made a Co-defendant With him in such suit. But there is a very manifest difference between that case and the cases supposed in the opinion of the learned chief justice. For in the cases supposed, the answer of the ancestor or ot the deceased party is an admission made by him, while he was the owner of the subject matter of the litigation, and as such may be given in evidence against any person claiming title under him subsequent to such admission. And upon the same principle, if a bill is taken as confessed against a defendant before his death, and the suit is subsequently revived against his heirs or personal representatives, they must apply to vacate the order taking the bill as confessed; if they wish to controvert the allegations in the bill, or to set up any defence except such as has arisen subsequent to that order. For, the suffering of the bill to be taken as confessed against him was an admission by the original defendant, while he was alone interested in the subject matter of the litigation, that the allegations in the complainant’s bill were true, and that he had no valid defence to the claim made by the complainant, except such as appeared from the bill itself. The question now under consideration did not necessarily arise in the case of Osborne v. The United States Bank ; as the answer of Sullivan, in that case, contained a distinct admission that he received the money in controversy from Currie, his predecessor in office, who informed him that it was the money which had been taken from the bank. That answer was therefore of itself evidence of the identity of the funds. For it contained evidence of the declaration of the former treasurer, made at the time he parted with the money, to his successor in office. It was not therefore evidence of a declaration of the former treasurer after he had parted with all his interest in the fund to the defendant Sullivan. And as I understand the case, the decision of the court is placed upon that ground; though it is evident the opinion of the learned chief justice was that the answer of Currie,- under the circumstances of that case, was admissible in evidence as against his co-defendant.

But even if these two cases, in the supreme court of the United States, are to be considered as express decisions of that court upon the question now under consideration, and notwithstanding the respect which is justly due to the opinions of the very able and distinguished jurists who occupied seats upon the bench of that court when those cases were before them for decision, I do not feel at liberty to adopt such decisions as the law of this state; in opposition to the decision of the court of dernier resort here, and to the opinion of one who, as a judge, has had few equals either in this or any other country. In the case of Grant v. The United States Bank, (1 Caines' Cas. in Error, 112,) this question came before the court for the correction of errors upon an appeal from a decision of the then chancellor. The appellant Grant was the holder of a bond and mortgage originally given to Taylor, and assigned by him to McGregor, who afterwards assigned the same to Grant. And one of the principal questions in the case was whether this mortgage, in the hands of Grant, was a valid seciulty for the amount therein mentioned and thereby secured. In the bill filed by the Bank of the United States against Grant, the holder of the bond and mortgage, Taylor and McGregor, and some other persons, were made co-defendants. The consideration of the mortgage was impeached by the answer of all of the former holders thereof; and the question arose whether that answer could be read as evidence against Grant the assignee. In reference to that question Mr. Justice Spencer, who delivered the opinion of the court, says: “ I have no hesitation in saying that the answer of one co-defendant is evidence neither for nor against the other. The authorities cited maintain this position.” And in conformity with that opinion, Grant obtained a decree for the full amount of his mortgage; notwithstanding the admission in the answer of his co-defendant, under and through whom he claimed such mortgage. A similar question arose in the subsequent case of" Phenix v. The assignees of Ingraham, in the same court, (5 John. Rep. 412.) There the answer of Ingraham was offered in evidence, against his co-defendant Phenix, who claimed title to the property under him; for the purpose of establishing the fact that Ingraham made the assignment to Phenix in contemplation of bankruptcy, and to give the assignee a fraudulent preference. Mr. Justice Spencer again delivered the opinion of the court, which opinion was concurred in by Chief Justice Kent, and Mr. Justice Van Ness, and all the other members of the supreme court who were present at the decision. And in reference to this question, he says: “ No proposition can be clearer than that the answer of one defendant is not evidence against his co-defendant; and that the declaration of a party tó a sale or transfer, going to destroy or take away the vested rights of another, cannot, ex post facto, work that consequence, nor be regarded as evidence against the vendee or assignee.”

Nor are the decisions in the court for the correction of errors in this state, alone in conflict with the opinion that the answer of a defendant under or through whom a cordefendant claims to have derived his title to the subject matter of the suit may be read as evidence against the latter. For it will be found, upon examination, that similar decisions have been made in the courts of several of our sister states. And I have not been able to find any case in the reports of the court of chancery in England, or in Ireland, in which the answer of one defendant has "been permitted to be read as evidence against another; except in those cases where the defendants were combined, either legally or fraudulently, so as to create a unity of interest between them. It is an established rule in chancery, says Judge Wallace, in Winters v. January, (Liit. Sel. Ca. 13,) that in no other case can the answer of a defendant be taken as evidence against a co-defendant.

In the case of Hunt and Blanton v. Stephenson, (1 A. K. Marsh. Rep. 570,) the precise question now under consideration came before the court of appeals in Kentucky. For uptin examining that case it will be seen that the object, of the suit was to obtain relief against the assignees of a debt, upon the ground that it had been paid to the assignor before the assignment thereof to the appellants. And the answer of the assignor was relied on as evidence, against his co-defendants, the assignees, to establish the fact that the debt had been paid to him, and was therefore not a valid and subsisting security in his hands at tire time of the assignment. Upon that state of facts the court decided that the answer of the assignor could not he used as evidence against the assignees; and that as they had admitted nothing in their answer, the right to relief, as against them, must depend upon the evidence and exhibits in the suit. This decision was subsequently followed by the same court in the cases of Moseley v. Armstrong, (3 Mon. Rep. 288,) and of Graham v. Sublett, (6 J. J. Marsh. Rep. 44.)

In the case of Collier v. Chapman and others, (2 Slew. Alab. Rep. 168,) the supreme court of Alabama decided that the answer of one defendant could not be read as evidence against his co-defendant; particularly where it tended to invalidate a title made by the former to the latter. And the fact that one defendant, against whom the answer was sought to be used as evidence, had derived title to the property in controversy under or through the other defendant, who had put in such answer, was held not to take the case out of the general rule that the answer of one defendant cannot be read against his co-defendant. A similar decision was made by the same court, in the subsequent case of Singleton v. Gayle, (8 Port. Rep. 270.) And in the case of Jones v. Hardesty and others, (10 Gill & John. Rep. 405,) in the court of appeals of the state of Maryland, the two cases of Field v. Holland and of Osborne v. The United States Bank, were cited by counsel and specially relied on as establishing a different doctrine. But that court, in a well considered opinion, arrived at the conclusion that the doctrine of those two cases, so far as it related to this question, was wholly irreconcilable with an otherwise unbroken series of authorities on the subject, both English and American. The answer of L. Harwood was therefore rejected, as evidence against her co-defendants who claimed title to the subject matter of litigation under her.

There being no evidence in the present case, as against the defendant Robinson, to establish usury in the judgment assigned to him, and under which he has obtained his certificates of the sale of the appellant's lands by the sheriff, I cannot reverse or alter this erroneous decree, made by the vice chancellor, without being compelled to make one in lieu thereof which will be far less beneficial to the appellant. And as the appellant only claims to reverse a part of the decree which is not erroneous, and to obtain a modification of the decree to which he is not entitled, the proper course is to dismiss the appeal, with costs.