Swift v. Dean

Yates, J.

This cause comes before this court on an appeal from a decree made in the court of chancery, dismissing the appellant’s bill with costs.

The facts must be in the recollection of the court, it will therefore be unnecessary for me to state them.

The appellant objects to the decree,

1. Because the judgment of September, 1789, is null and void, and that consequently no property could pass by the conveyance under it.

2. If this judgment should be deemed valid, then the purchase made by Ezra Dean must enure to the benefit of Gains Dean.

The letter of attorney by which Ezra Dean alleges he was authorized to give the bond and'warrant of attorney, is attended with the suspicious circumstance of being without a subscribing witness ; and if arrangements had not taken place between the parties, making it necassary to delegate some such powers to the person undertaking the adjustment of this copartnership concern, I should have doubts whether Gains Dean ever executed it, with full knowledge of the extensive powers contained in it. But no imposition in obtaining the execution of this instrument, is brought home to Ezra Dean, and the co-partnership and dissolution being admitted by the bill and answer, it must, under all the circumstances, be deemed a bona jidc transaction. Assuming this, then, as a fact, the next inquiry will be, whether this letter of attorney authorized the giving of the bond and warrant of attorney to secure the payment of the debt due jointly from Gains and Ezra Dean, to Thurston and Minturn, I think we may intend that an unsuccessful attempt must have been made to the court below, to set aside this judgment ; and although this is not alone sufficient to uphold it; yet it demands the greater caution not to disturb it, without the strongest reasons; particularly, as no separate debt appears to be due from Gains Dean to Thurston Minturn, or either of them, which might easily have been proved, if the fact was so. On the contrary, by the bill and answer, it is admitted that a debt was due and owing by the copartnership to Thurston fi? Minturn, of 420/.

The inference irresistibly must be, that this is the same debt mentioned and intended by the letter of attorney. The judgment then being considered valid in law, the question arises whether the purchase made by Ezra Dean, under that judgment, does not enure to the benefit of Gains Dean, on the ground of its having been made with funds put into his hands for the express purpose of paying off that debt.

It has been mentioned in the course of the argument, that this is an attempt of a purchaser with full notice, to set aside a judgment. This cannot be denied, for it appears that Powers and the appellant were both at the vendue ; that at the time of sale to the appellant, it was agreed between the appellant and respondent, that the purchase-money should not be exacted, until after a decision of their dispute by the arbitrators, to whom the same had been submitted in writing. The" parties have therefore proceeded with their eyes open, so that nothing, can be alleged by either on the ground of innocent purchasers.

By this letter of attorney, Ezra Dean is authorized to collect all debts then outstanding and due to the said Gains, either in the state of New-Tork or the state, of Vermont, and also to prosecute several other persons particularly named therein. It is, therefore, evident that such debts did exist, and the amount (if any) subsequently received by Ezra Dean, has never been particularly disclosed, so that without a specific account rendered by him, no correct conclusion can be drawn, as to the effect of such investigation on the validity of the title to the premises. If the decision, therefore, wholly depends on this point of the case, the only course would be to direct further proceedings in the court below, but without this account rendered, sufficient appears to entitle the appellant to relief.

XV the testimony of John Clark, the respondent Ezra Dean confessed that the property in Vermont made over to him by Gaius Dean, was sufficient to pay the partnership debt, which Gaius and the respondent owed to Thurston '6? Minium; so that at all events he must have been in possession of an amount equal to the consideration paid by him at the sheriff’s sale, for this property. He, therefore, cannot be permitted to set up this title against the purchaser under Gaius Dean; but must be deemed to hold for his benefit.

I am, accordingly, of opinion, that the decision of his honour the chancellor be reversed; and that the cause be remitted to the court of chancery, with directions to enjoin the respondent not to proceed in the ejectment cause, commenced in March, 1797, mentioned in bill of complaint 5 so that the appellant holding his title under Gains Dean, may be quieted in the possession and enjoyment of the property, notwithstanding the title of Ezra Dean, derived from the sheriff of Columbia, under the judgment of Thurston Es1 Minturn against Gaius Dean and the respondent.

Thompson, J.

The appellant’s bill, in the court of chancery, prays an injunction to restrain any proceedings in an action of ejectment, brought by the respondent, to recover possession of about one acre of land, with the buildings thereon, situated in Hillsdale, in the county of Columbia. The appellant claims tide to these premises, under William Poxvers, who purchased the same from Gaius Dean. The respondent derives his right under a sheriff’s deed and sale, made by virtue of an execution, issued on a judgment obtained in the court of common pleas, in Columbia county, by confession, in September, 1789, in favour of John Thurston and William Minturn against Gaius Dean and Ezra Dean. This judgment, the appellant contends, ought not to be enforced against the property of Gaius Dean, which he had purchased for a valuable consideration :

1. Because the judgment was entered up upon the confession of Ezra Dean alone, without any competent authority from Gaius Dean;

2. Because Gaius Dean had put into the hands of the respondent funds, to satisfy the debt of Thurston and Minturn, and which he ought to have applied to that purpose.

A preliminary question, relative to the suppression of t^ie deposition of Gains Dean, was raised and argued. This testimony, J I think, was properly suppressed, for incompetency. Gains Dean had given a warranty deed to Powers, under whom the appellant claims. He was, therefore, interested to defeat this judgment, because an eviction under it would have been a breach of the covenant in his deed. His interest was not neutralized, between . the parties. The object of his testimony was altogether to destroy the authority, under which the judgment was entered against him, which was protecting himself against an action upon his deed? and it does not appear but that Thurston Minturn are fully satisfied, as the respondent is the only person appearing here to claim the benefit of this judgment. This testimony was suppressed in due time. It is a rule well settled at law, that a witness, who, in any stage of his examination, dis'covers himself to be interested, is to be rejected, and his evidence entirely set aside. And the case of Needham v. Smith, (2 Vernon, 463.) shows that the same rule prevails in equity. This case must, therefore, I think, be decided, without taking into consideration the deposition of Gains Dean.

With respect to the first question, as above stated, the appellant’s bill alleges, that the bond and warrant of attorney were given by the respondent alone, Gains Dean then not being present, and to which the respondent put his own name and seal, and the name and seal of Gains Dean without any power or authority whatsoever, from Gains Dean, to make, execute, and in his name, seal and deliver such bond and warrant of attorney. The respondent, in his answer,, admits the execution of the bond and warrant, as stated by the appellant, but denies, that he had no power or authority whatsoever, frotn Gaius Dean, to make, execute, and in his name seal and deliver the bond or ¡warrant of attorney, and expressly avers, that the instrument set forth in the appellant’s bill, was duly executed at the time it bears date, by Gains Dean, for the purposes therein mentioned; and that the time, intent, and meaning of it was, to authorize him to make and execute the bond and warrant of attorney. Thus we see that the allega-7 tion in the bill, respecting the, authority from Gains Dean, is positively and explicitly denied by the answer, and there is but one witness to support the bill. It falls, therefore, within the settled rule of equity, that no decree can, in such case, be made against the answer. (1 Vernon, 161. 1 Vez. 66. 97. 125. 2 Atk. 19. 3 Atk. 408. I am, accordingly, of opinion, on this point, that the judgment ought not to be set aside, especially, as Thurs-ton 8? Minturn are not parties before the court, and their interest might be materially affected.

I am, however, inclined to think, that Ezra Dean ought to be restrained from deriving any benefit under this judgment. He is the only person before the court, claiming an interest in it. Recurrence to the bill and answer, and proofs in the cause, will show the situation in which he stands; and how inequitable it would be to allow him to enforce payment of this judgment, out of the private property of Gains Dean, to the prejudice of a bona jide purchaser. The bill states, that in the latter part of the year 1789, the respondent and Gains-Dean dissolved their partnership, and the respondent undertook to pay and satisfy all the partnership debts, and especially the debt due to Thurston Minturn, and that, to enable him to accomplish this, Gains Dean put into the respondent’s hands partnership property to the amount of 1,000/. to pay the debt due to Thurston .Minturn. The respondent expressly denies, that Gains Dean, to enable him to pay and satisfy the copartnership debt due from them to Thurston Minurn, ever put into his hands, partnership property to the amount of 1,000/. or to any amount whatever.

The precise day when this partnership property was transferred to the respondent, is not stated; but it is fairly to be inferred, that it was upon the dissolution of the partnership, in the latter part of the year 1789, which was subsequent to the giving of the power of attorney, and the entry of the judgment in question. If the respondent had received funds for the purpose of discharging this debt, he ought to have applied them to this object. As the allegation in the bill respecting the partnership property is denied by the answer, we must look to the evidence to see how far it is supported. Claré testified, that he heard the respondent say, that Gains Dean had made over tq him all the property which they, Gains Dean and the respondent, had in copartnership, in the state of Vermont, for the purpose of enabling him to pay the debt due from them to Thurston, {Thurston fi? Minturn,) and that the property thus made over to him was sufficient to pay this debt. Reuben Murray testified, that he was present at a conversation between the respondent and William Poivers, respecting the power of attorney and partnership business; and heard the respondent acknowledge that he had received the notes and books of the partnership, between him and Gains Dean, for collection, and was to appropriate the same tq the payment of the partnership debts, but that there was not sufficient to pay all the partnership debts.

The allegation in the bill, appears to me to be substantially supported by the testimony of two witnesses. They both concur in proving the respondent’s acknowledgments, that partnership property was put into his hands, for the purpose of paying the partnership debts. T° one, he explicitly acknowledged,' that partnership property was made over to him, for the express purpose of paying the debt to Thurston Es? Minturn, and that there was enough for that purpose. To the other, he acknowledged the receipt of partnership property for the purpose of paying the partnership debts generally, alleging that there was not enough to pay the whole of them. Not pretending, however, but that there was sufficient to pay the debt to Thurston Mznturn. How the partnership concerns, between the respondent and Gains Dean, have been settled, or whether Thurston Minium, have been satisfied for their debt, are not now subjects of inquiry. The respondent is the party now before the court, claiming the benefit of this judgment. And the fact, that it lay dormant from the year 1789, until the yera1795, taken in connection with the threats and declarations of the respondent, that he intended to purchase, under this execution, the land, sold by Gains Dean to William Powers, for himself, affords a pretty strong -inference, that the respondent was the party having-the control of this judgment, and for whose benefit the sale under the execution was made. This, however, is matter of inference only. But the proof is positive, oí his having received partnership property, for the purpose of paying the partnership debts, generally, and especially that due to Thurston & Minturn. I think, therefore, lie ought not to be permitted to avail himself of the private property of Gains Dean, to discharge this debíwithput accounting for the disposition of the property he had received. He is the only person capable of rendering ouch account.

I am, accordingly, of opinion, that the respondent ought to have been enjoined from proceeding in his action of ejectment, and that the decree of the court of ihaneery ought to be reversed.

Spencer, J. and Van Ness, J. having been formerly .iqpcerned, as counsel in the cause, gave no opinion.

A majority of the court concurring in the opinions above delivered, it was, thereupon, ordered, adjudged, and DECB~EIb ^at the decree of the court of chancery be reversed; and it was ordered and adjudged that the respondent be enjoined from any further proceedings in the action of ejectment, mentioned in the appellant’s bill, and from further proceedings under the ejectment of John Thurston and William Minturn against the respondent and Gaius Dean, mentioned in the said bill, until he shall, by accounting to the court of chancery, for the disposition of the property of the said Gaius Dean, put into his hands to pay the said debt due to John Thurston and William Minturn, make it satisfactorily appear to the court of chancery, that such property was not sufficient to pay the said debt, or the proportion thereof, which the said Gaius Dean was justly bound to pay; but that the said judgment of John Thurston and William Minturn, against the respondent and Gaius Dean, shall be, in no wise, affected by this decree; and that the proceedings be remitted, See.

Judgment of reversal.