Evans v. Ellis

5 Denio 640 | Court for the Trial of Impeachments and Correction of Errors | 1846

Spencer, Senator;

Instead of pursuing the obvious method of testing the validity of the mortgage held by him, Éváns, a stranger to the partition suit, applies after decree to have the proceeds of the sale belonging to Ellis and his wife, paid over to him. Upon this irregular, if not void proceeding, the question has been litigated and a decide pronounced, from which ah appeal was taken to the chancellor, who reversed it upon the merits, remarking that it was unnecessary to inquire whether the vice chancellor had jurisdiction upon the mere petition of one, not a party to the suit, to interfere and dispose of the fund. In the view the chancellor took of the rfterits it was unnecessary. I think, however, this question worthy Of consideration, and that the proceedings were altogether irregular, and that the petition should have been dismissed without consideration. For this reason the decree of the vice chancellor might properly be reversed. But as a majority of the court may not concur in this view, it becomes necessary to examine the other question.

I am not prepared to sáy that every bond and mortgage' taken by an attorney or solicitor, from hi's client, upon the subject matter of the suit, must necessarily be void. Though I am free to confess that I look upon such transaction with no favor, and with a disposition to scrutinize it with the' utmost rigor. If, upon such scrutiny, it shall come up to the lofty and most just standard of Lord Eldon, (6 Ves. 278,) if the attorney or solicitor is able’ “ to manifest that he h'as given his client all that reasonable advice against himself, that he would have given him against a third person ; then perhaps such security may be held valid. The whole burden of proof should be thrown upon the attorney or solicitor.” Lord Eldon farther says, this results from that great rule of the court, that he who bargains in a matter of advantage to himself with a persoti placing confidence in him, is bound to show that a reasonable use has been made of the confidence.

If tried by this staixdard the bond and mortgage will stand the test, they may be held valid.

A solicitor who will obtain a void rñortgágé against the wife who is his client, upon her only patrimony, being also a mother with little children to support, without the aid of a thriftless husband, ought not to have any violent presumption indulged in his favor, that the mortgage against the husband, (also a client,) whose business capacity only fits him for a “ coffee roaster,” has any greater validity as to him.

If this solicitor has proved that he could, consistently with his duty to his client, asking counsel at his hands, have advised him that he could safely and properly lend his bond and mortgage on his life estate in the slender patrimony of his wife and children to a man utterly insolvent, without any other security than the bond of such insolvent would furnish, then perhaps he may ask that this bond and mortgage should be pronounced valid in his hands.

At the time the bond and mortgage were executed the only business transaction existing between Duryee the solicitor and Ellis the client, was the bill filed for the partition of the estate inherited from the wife’s father, in which there was a small bill of costs to become due to the solicitor and his two partners, which when earned and due would be a lien upon the land and first to be paid out of the fund. These securities could not have been needed to make these costs more secure. The first item charged in the account of cash advanced by Duryee to Ellis, is under the date of 26th October, 1839, $10. This was the same day the bond and mortgage were assigned to Evans, and probably after such assignment. At this time then he had advanced nothing to Ellis on the bond and mortgage, and had given nothing for them but his own worthless bond, or equally worthless promise. It can hardly be pretended that Duryee, the solicitor, could enforce the payment of these securities against Ellis, his client, if they had been due. They were then in his hands utterly void. Nothing which has since happened has changed his rights.

Did Duryee pass any greater interest in them than he had himself at the time of the assignment ? Evans gave no credit to any statements made to him by Ellis, for he never took the precaution to speak to Ellis about them as a prudent man would have done. Duryee was no agent of Ellis in the assignment of the bond and mortgage. They had, as he says, been given to him as a personal favor, on which he had not advanced any thing. Evans had knowledge of circumstances enough to put him on inquiry, if the case needed the aid of this rule of law. But he took them subject to the stubborn and salutary rule of law, at his peril, and acquired no greater interest or more valid title than Duryee had.

Upon the merits, therefore, he has no claim for the money he seeks to recover.

The decree of the chancellor should therefore be affirmed.

Beardsley, J.

The assignee of the mortgage, admitting that he advanced the full sum of one thousand dollars for it, is in no better condition than Duryee, the mortgagee. If there was any objection to the validity of the mortgage as against him, the objection is equally available against the assignee. No mortgage security given by a client to his solicitor should be allowed to stand in any case, unless its fairness in every respect is shown by the solicitor. The presumption in such cases is against the fairness of the transaction, and the burden of proof to repel the presumption is on the solicitor. He must show he gave value for it. Here such proof was not given. There was also in this case very strong evidence of misrepresentation, trick and artifice in obtaining the mortgage. It was moreover a mortgage on the land in suit, and to allow the security to stand would tend strongly to encourage champerty and maintenance. The policy of the law is decidedly against it. I am therefore for affirming the order of the chancellor.

Putnam and Lott, Senators, delivered written opinions in favor of affirmance.

Wright, Senator, delivered a written opinion in favor of reversing the order of the chancellor, and affirming that of the vice chancellor.

Johnson, Senator, delivered an oral opinion in favor of affirmance.

Upon the question being put, “ Shall the order of the chancellor be reversed ?” the members of the court voted as follows:

For affirmance: The President, Mr. Justice Beardsley, and Senators Barlow, Beekman, Burnham, Denniston, Deyo, Emmons, Hand, Hard, Johnson, Jones, Lott, Mitchell, Porter, Putnam, Sanford, Scovil, J. B. Smith, S. Smith, Spencer, Talcott, Wheeler, Williams—24.

For reversal: Senator Wright—1.

Order affirmed.