29 Cal. 47 | Cal. | 1865
Lead Opinion
The complaint in this action alleges that the plaintiff is the owner of a certain lot in the City and County of San Francisco, under and by virtue of a Sheriff’s deed executed to- him as the purchaser of said lot at an execution sale on the 10th day of December, 1856. That the execution issued upon a judgment in his favor against the defendant, James Shindler, and one Leonard,, rendered February 2d, 1856. That at the time of the sale the lot was, and for several years had been, the property of James Shindler. That pending the action in which the plaintiff’s judgment was recovered, James Shindler conveyed the lot to E..B. Mastick, who conveyed it thereafter to Simon Shindler. That both conveyances were voluntary and were made with intent to delay and defraud the creditors of James Shindler, of whom the plaintiff was one. The bill prays, amongst other things, that the deeds, respectively, may be decreed to be fraudulent and void. The case was tried by the Court—the findings were in favor of the plaintiff, and the
Right of purchaser at Sheriff’s sale to go into equity, to have a fraudulent deed of the judgment debtor set aside.
First—It is claimed on behalf of the appellants that the case made is not within the equity jurisdiction, and the reason assigned is, that relief at law, by ejectment, would be adequate and complete.
In support of this proposition we are referred to Dewitt et als. v. Hays, 2 Cal. 463 ; Lupton v. Lupton et als., 3 Cal. 121; Merrill v. Gorham, 6 Cal. 42. We have examined these cases. They recognize the general rule that the equity jurisdiction is limited to cases where there is no remedy at law or none that is plain, adequate and complete ; but they throw little or no light upon the question as to whether this particular case is within the rule or without it.
It is not enough that the plaintiff could have established his title as against the title of Simon Shindler, in an action of ejectment. Before the case can be considered as beyond the reach of a Court of equity, it must be made to appear that the legal remedy would be adequate and complete.
The appeal here is to that branch of the concurrent jurisdiction in which the peculiar remedies afforded by Courts of equity, constitute the principal ground of jurisdiction. The relief asked is, that certain deeds, alleged to be fraudulent, may be cancelled by decree. The bill is brought upon the principle of quia timet; that is for fear that the deeds may be vexatiously or injuriously used against the plaintiff when the evidence to impeach them may have been lost. The justice invoked is not remedial so much as precautionary or preventive. If an instrument ought not to be used or enforced, it is against conscience for the party holding it to retain it, since he can retain it only for some sinister purpose. If it is ' a deed purporting to convey lands or other hereditaments, its existence in an uncancelled state necessarily has a tendency to thrown a cloud over the title; and it is always liable to be
Right of purchaser at Sheriff’s sale to have fraudulent deed of judgment debtor set aside in equity before an execution is returned nulla bona.
Second—It is further insisted that the complaint is substantially defective for the reason that there is no allegation showing that “ before coming into equity the plaintiff had exhausted his remedies at law by issuing execution and having it returned nulla bona.”
The purpose of the bill is not to reach equitable assets with' a view to satisfy an unpaid judgment, or an unpaid balance of a judgment; but to clear up a title already vested by dissipating a cloud upon it. Whether the plaintiff sues as “ creditor” or as'“owner” is in one sense more a question of fact than of law. That he sues and asks relief in the latter capacity is apparent on the face of the complaint; and that he is owner in judgment of law does not admit of controversy, if all the allegations of the complaint be assumed. Taking the plaintiff, then, to be the owner of the land, the only question must be: is he entitled to the relief prayed for? But that is the question upon which we have already joassed. Though the plaintiff is a purchaser suing and asking relief as such, still his title has its origin in the relation of creditor and debtor; and as against the deed of Simon Shindler, the relative strength of the opposing titles is to be determined by the law governing that relation, and not by that applicable to conveyances at large. A purchaser of land at execution sale, when he receives his deed becomes the owner of the land if the debtor owned it at the time of the sale; and in all proceedings looking to a vindication of his title, the purchaser must necessarily present himself as proprietor and ask relief as such. But though he sues as owner, still he is clothed with the rights of the creditor, and stands in his place so far as may be necessary for the protection of his own title. The point was decided directly in
Purchaser of land at Sheriff’s sale may go into equity to set aside a fraudulent deed of the judgment debtor without being in possession.
Third—It is urged, further, that the judgment cannot be sustained for the reason that the complaint does not show the plaintiff in possession of the land at the beginning of the action.
This is not a suit to quiet title, under the two hundred and fifty-fourth section of the Practice Act. In an action of that impression the title, and the whole title, of each of the parties is, or may be, drawn in question, and both parties are concluded by the judgment. This suit seeks the cancellation only of a particular muniment of title, and touches title only as it touches the muniment. But the point was decided in Dane v. Zignego et al., previously cited, and the decision meets with our full concurrence. The Court said in that case: “The mere fact that the plaintiff is not in possession of the property can make no difference,. as his right to have the fraudulent deed cancelled does not depend upon any such fact. Neither is it necessary for him to have previously had his title tried in an action at law. Indeed one important object of the plaintiff in bringing his suit in equity to obtain a decree cancelling the deed, under the old system of practice, was the better to enable him to prosecute his action at law to recover the posssession of the premises by removing an obstacle to his recovery.
Purchaser of land at Sheriff’s sale who files a bill to set aside a fraudulent deed of the judgment debtor need not aver his insolvency.
Fourth—It is claimed that the complaint is fatally defective, for the reason that there is no allegation that James Shindler was insolvent when he made the first deed, or when he directed the second.
The complaint charges the judgment, the execution thereon,
There is a class of cases in which a party seeking the relief of injunction must aver that the defendant is insolvent; and if a judgment creditor brings a bill to reach equitable assets, he must aver insolvency, or, what is equivalent to it, an execution returned nulla bona. In these cases, insolvency is per se a condition of relief; a fact, in short, without which a Court of equity can have no jurisdiction to act in the given instance. It is one of the ultimate facts to be proved, and hence the necessity that it should be averred. But in a case like the one at bar, “insolvency” is not a fact of jurisdictional consequence, nor is it per se a condition of relief. The facts upon which the jurisdiction rests, and on which the relief is granted, are stated categorically in the Statute of Frauds, and insolvency is not of the number. Section twenty provides, in effect, that every conveyance, made to defraud creditors, shall be void as to them, whether the deed was on consideration or without it; but section twenty-three provides that no conveyance shall be adjudged fraudulent as against creditors or purchasers, “ solely on the ground that it was not founded on a' valuable consideration.” Whether a voluntary deed should be considered fraudulent, as such, as to existing creditors, without proof of any fact extraneous to itself, was a question that had long vexed the tribunals (1 Story’s Eq. Juris., Sec. 365), and section twenty-three was made a part of the Act
The point made has, moreover, passed into judgment. In Sands v. Hildreth, 14 John. 498, the Court say: “It has been urged that Comfort Sands (the fraudulent grantor) might have had property abundantly suEcient to satisfy his creditors independently of the lands sold to the respondent (the holder of the Sheriff’s deed.) This, however,- is not proved; and if it were true, the appellant (the fraudulent grantee) was bound to make out the fact.” If the burden of proving solvency is upon the party claiming under the fraudulent deed, it cannot be true that the party attacking it should allege the contrary.
As to the deed to Mastick, inasmuch as the complaint shows the title out of him, it is enough that he in fact held the title in naked trust for his grantor, even though the trust was created for an honest purpose. This is the clear result of the eleventh section of the Statute of Frauds. And as to the deed to Simon Shindler, the complaint alleges not only that he took in secret trust for James Shindler, but “ with intent to aid and abet him in hindering, delaying and defrauding his creditors, and especially this plaintiff.”
Limitation of time within which purchaser at Sheriff’s sale may commencean action to set asidea fraudulentdeedofthejudgmentcreditor.
Fifth—It is insisted that the complaint shows on its face that the action is barred by the Statute of Limitations.
The-cause of action does not consist in the detached or isolated fact that the deeds in question were given with the intent charged. The gravamen of the complaint is that the plaintiff, as owner of the land, is liable to be iujured by the deeds if they are allowed to remain uncancelled. The particular danger which the plaintiff seeks to avert neither is nor can be older than the title which it threatens. True, the deeds were given more than three years prior to the commencement of the action, but they foreboded no injury to the plaintiff’s title when they were given, for at that time he had no title. In short, the plaintiff’s right to bring this action does not antedate the facts in which it has its origin. The plaintiff became the owner of the land on the 3d day of October, 1857, when he received the Sheriff’s deed; and he had then, for the first time, a title to be clouded. The action was brought within three years thereafter. It is no answer to say that the plaintiff while yet a judgment creditor might have sued in that capacity for the purpose of reaching the land as equitable assets. Such action would have differed from this both in gravamen and relief. There are obvious correspondences between the two actions, but there are specific differences between them also, and they are too manifest to be disregarded.
Sixth—It is claimed that the judgment should be reversed on the ground that the testimony of the witness Mastick was improperly admitted.
Mastick was called as a witness by the plaintiff for the purpose of proving that the conveyance by James Shindler to him and the conveyance by him to Simon Shindler, were both without consideration. The witness testified that he was a lawyer, engaged in practice in the City and County of San Francisco in the years 1853-4 and 5, and that “ all of his knowledge concerning the matters connected with the issues was acquired by him as an attorney of James Shindler, and in the course of his communications with him as such; that his professional relations with James Shindler continued from early in 1854 until 1855, and until after all the transactions in question were disposed of, and that but for these relations he would not have had any connection with the matter at all.” The plaintiff thereupon proposed to prove by a witness that both the conveyances aforesaid were voluntary; the defendant James Shindler, by his counsel, objected to the introduction of the evidence. The objection was overruled, and the defendant excepted.
The witness testified as follows: “ Some time in 1854 I brought a suit for James Shindler against Samuel Youngs, of Sacramento City, and attached certain real estate there, which was then mortgaged to a woman, who placed the mortgage with a banker, who foreclosed it after the attachment. We then believed there was a margin between our attachment and the mortgage lien, and we determined to redeem ; to do which it was necessary to raise some money. When the time for redeeming arrived, James Shindler had, I think, left the State. I consulted with Gray—Hawes was here too—and Shindler’s power of attorney authorized a sale, but not a mortgage. The land was conveyed to me, that I might raise money by mortgage, which we had then negotiated. Gray then conveyed to
Questions arising under the law of “ privileged communications” have been presented for judicial consideration under a great diversity of aspects, and the decisions in each of the different classes of cases have been greatly multiplied—one decision following and being, in effect, but a reproduction of others which have preceded it on the common line. But there is one aspect in which, so far as we are advised, the general question has been presented in two instances only : Harvey v. Clayton, 2 Swanst. 232, and Jones v. Pugh, 1 Phil. 96. The distinguishing feature of these cases is found in the fact that pend
It appears that the witness in this case was called for the double purpose of proving that he held the land conveyed to him by James Shindler in trust for his grantor, and that Simon Shindler, his own grantee, held in trust for the same party. These results the plaintiff proposed to establish by testimony drawn from the witness that both conveyances were without consideration.
I. We shall in the first place consider the admissibility of the testimony in its bearings upon the deed of James Shindler to the witness.
For the purposes of discussion, it may be assumed that all the knowledge of the witness as to whether the deed was given with or without consideration, was “ communicated ” to him by James Shindler as his client, and in the ordinary course of professional employment; leaving the question whether the communication was or was not confidential as the' only point to be decided.
Prima facia, all communications made by a client to his attorney or counsel, connected with the purposes with a view to which the relation was entered into, must be regarded as confidential. But the presumption is not conclusive. If it appears by extraneous evidence, or from the very nature of the transaction," that confidence was not, and on the maxims by which human nature is ordinarily governed, could not have been contemplated, then the fact communicated may be proved
We must assume that the Court below passed upon the point as involving a matter of fact, and found that Mastick’s knowledge of the voluntary character of the deed was not confidential; and we consider the finding to be well sustained by the evidence.
In the first place, there can be no pretense that the deed itself was executed in confidence, however it may have been a “ communication ” in the larger definition given to that term by many of the authorities. The deed was made with a view to publicity, and Mastick formally published it to the world seven days after its delivery by causing it to be recorded.
It is settled that if a client, pending the relation, communicates to his attorney a fact foreign to the object for which the attorney was retained, the communication is not to be regarded as confidential. The scope of the confidence is as the scope of the purpose. Each is considered to be the exact measure of the other. In this case the sole purpose was to raise money, to be used by the client for the preservation of a right; and to that end, whether the deed in question was on consideration or without it, was a matter of entire indifference from the beginning. So far as results were concerned, a power of attorney to Mastick to borrow money and to mortgage to secure the loan would have put him in a position to do all that he was expected to do as grantee under the deed. Had Gray’s power of attorney from .Shindler authorized him to borrow and mortgage, it is apparent on the face of the testimony that the conveyance to Mastick would never have been made. This demonstrates how utterly foreign to the purpose for which the witness was professionally employed was this question of consideration, in the judgment of parties, at the time the deed was given.
In the decision previously rendered, we considered the case as falling within the analogy of Harvey v. Clayton, 2 Swanst.
There, as here, the legal adviser had consented to stand to his clients in the non-professional relation of trustee. There, as here, the trust was accepted as subservient to the purpose for which the principal relation was entered into. Thus far that case and the case at bar are analogous; but* there is no further correspondence between them. There the adviser was interrogated with a view to discovery only; here with a view to discovery and relief. There the facts inquired after were not essential to any right which the plaintiff proposed to assert in that or any other action, nor to any duty which he proposed to perform then or thereafter; while, on the other hand, if the discovery had been granted it might have prejudiced the attorney and his clients; and, as it would have notified the plaintiff of a dormant equity, the position of the plaintiff would have been rendered “ less safe.” But while the Court considered that the knowledge of the defendant as to the existence
The other case, Jones v. Pugh, 1 Phil. 96, follows Harvey v. Clayton, and is like it in every substantial particular; and the result is, that the testimony of Mastick, that Shindler’s deed to him was without consideration, was in our opinion properly admitted, on the ground that his knowledge of the fact was not within any confidence reposed in him by his client. It may be true that the testimony, in so far as it disclosed the object of the conveyance, was improperly admitted. But the original purpose, with a view to which the deed was executed—the redemption of the Sacramento lot—was not unlawful in itself, nor could the discovery of it have prejudiced the defendants. Mastick’s testimony could have affected the result only in so far as it bore upon the disputed question of consideration.
II. As to the admissibility of Mastick’s testimony that Ms own deed to 'Simon Shindler was without consideration, we have no doubt.
In the first place, the relation of client and attorney quoad the purpose for which the first deed was given, was not on foot at the time when the deed now in question was executed. It is settled, if an attorney is retained in an action, and the client after final judgment makes disclosures respecting the subject of the foregone employment, that the communication
Seventh—It is urged that the findings are not sustained by the evidence.
We have examined the evidence. The case does not belong to the class in which we hold ourselves at liberty to go behind the findings.
Eighth—The objection that the judgment is not supported by the findings is overruled. The questions raised by counsel
Appointment of a commissioner by the Court to malee a deed.
It is insisted, however, that the judgment should be modified, if not reversed. The objection taken is to that part of the decree appointing a commissioner to execute to the plaintiff a deed of all the right, title and interest of Solomon Shindler in the land, in the event that Shindler should not make such conveyance himself within twenty days.
The point made is that without a statute there is no authority for such a direction. It may be added that no authority is produced against it. The question is left by counsel unargued. Probably the strongest objection that can be urged is that the direction was unnecessary, inasmuch as the decree pronouncing the adverse deeds to be null and void, executed itself and left the plaintiff in full enjoyment of the title acquired by his Sheriff’s deed. A deed from Shindler must be regarded as non-essential, for the decree settles that he has nothing to convey. But as the error, if there be one, “ does not affect any substantial right” of the defendants, (Prac. Act., Sec. 71,) the objection must be overruled.
Judgment affirmed.
Concurrence Opinion
I do not think the matters offered to be shown by the witness, Mastick, are within the rule or the principle of the rule at common law protecting confidential communications, as deduced from the cases; and section three hundred ninety-six of the Practice Act, in my judgment, does not extend the principle.
James Shindler conveyed certain lands to Mastick, and Mas-tick subsequently conveyed the same lands to Simon Shindler, the father of James. These conveyances were claimed by plaintiff, a creditor of James, to have been made without consideration and with intent to defraud him. They were there
It is admitted that there are exceptions to the rule, or rather cases that do not come within it, and that one of them is, where “an attorney is a party to the transaction, and especially if he is a party to a fraud,” “ if he were acting for himself.” If he is in fact a party to the fraud, or to the fraudulent transaction, whether aware of the fraudulent intention or not, I do not think it makes any difference whether he is acting for himself, or for somebody else.
In Duffin v. Smith, Peake, 108, usury in a mortgage was
Lord Chancellor Brougham, in Greenough v. Gaskell, 1 My. and Keen, 109, in which he reviews all the cases, commenting on this case, says: “It may be doubted if the attorney preparing the deed be not confidentially intrusted as an attorney in so doing. But Lord Kenyon proceeds upon the assumption that he is not; that on the contrary he is quasi party, and he seems to liken the case to that of a co-conspirator, where clearly there is no protection.” Greenleaf refers to the case of Duffin v. Smith as one without the rule, and states the principle of the case as follows : “The attorney may be compelled to disclose * * * usury in a loan made by him as a broker as well as attorney to the lender.” (1 Greenl. Ev., Sec. 445.) Thus stated, and on the assumption upon which Lord Kenyon proceeded, I have no doubt the principle is entirely correct. It was so held in Dudley v. Beck et al., 3 Wis. R. 285, a case which appears to me to be directly in point.
In the case now in hand the witness was not merely the attorney to advise and prepare the deed, but he stepped outside the line of his professional character, and became a party to the conveyances—an actor in the transaction. And in the character of grantee and grantor—of party to the conveyances —he acquired his knowledge of the fact that there was no consideration paid. I cannot think a fact thus brought to the knowledge of the witness is within the rule or the principle of the rule. If so, the rule would afford great facilities for perpetrating and concealing frauds. It would only be necessary to find an attorney who is willing to do the double duty of advising as to the mode of proceeding, and then acting as the agent or instrument in the execution of the plans
In my judgment it makes no difference, so far as the question under discussion is concerned, that Mastick had no knowledge himself of any fraudulent intent on the part of the Shindlers; his knowledge of the fact sought to be proved was still acquired by him in his capacity of party to the conveyances, and not in his professional character. And, in the language of Judge Story, “ the person called as a witness must have learned the matter in question only as counsel, or attorney, or solicitor, and not in any other way ” (Story’s Eq. Pl. 601); or in that of Lord Brougham, “The privilege shall be excluded when the communication is not made or received professionally, and in the usual course of business.” (1 My. and K. 115 ; see, also, Gore v. Harris, 8 Eng. L. and Eq. R. 149.)
In Brown v. Martin, 26 Cal. 88, this Court held that a defense founded upon the Statute of Limitations will not be entertained on demurrer unless the statute is specifically stated as a ground of demurrer in the deriiurrer filed. I dissented for reasons stated at the time, but the point was fully discussed in that case, and I shall henceforth regard the question of practice determined as settled in this State. Under the decision in Brown v. Martin, the record in this case does not present the point made on the Statute of Limitations, and for this reason it is unnecessary to express any opinion upon it.
Upon the other points determined in the leading opinion I concur.