Williams v. Kelsey & Halsted

By the Court.

Warner, J.

delivering the opinion.

[1.] The first exception taken to the decision of the Court below is, the rejection of the testimony of Robert M. Charlton, which consisted of the statements made by the son of the claimant, to witness, when he paid him $400, as the attorney of the Central Bank, as to the purpose for which he paid the money, for whom, and by whose directions he paid it. The declarations of the son are sought to be made evidence, on the ground that he was the agent of his father, in making the payment of the money. There are two fatal obj ections to the admissibility of this testimony ofthe son. First, it is not shown that the son was either the general agent of his father, to transact his business, or that he was constituted his agent for that particular transaction, except so far only as his agency may be inferred from his own act, by the payment of the money to the witness. Second, because the admission or declaration of the agent, when acting within the scope of his authority, is to be considered as the admission or declaration of his principal. 2 Starkie’s Ev. 60. Story on Agency, §135. This admission or declaration of the agent, that the money paid by him to the witness, was his father’s money, and paid by his directions, is offered in behalf of the claimant, who is the alleged principal. The admissions of the principal, in his oum favor, would not be competent, nor are the admissions or declarations of his agent competent in favor of his principal, any more than the principal’s own declarations and admissions would be. The fact of agency might have been proved by the agent himself, and he would have been a competent witness to prove whose money it was he paid to the attorney of the Central Bank. If any fact material to the interest of either party, rests in the knowledge of an agent, it is to be proved by his testimony, not by his mere assertion. Fairlie vs. Hastings, 10 Vesey, 127. The declarations of the alleged agent in this case, cannot be received as a part of the res gestee, for the obvious reason that neither his general nor special agency has been established.

The second exception to the decision of the Court below is, the sustaining the objection taken by the plaintiff in execution, to that portion of the answers of Messrs. Charlton & Ward, offered by the claimant, which refers to the memoranda and entries made by them on their books, and their statement made to the Central Bank, as appears therefrom.

[2.] That a witness may refer to a written instrument, memorandum or entry in his books, to refresh or assist his memory, is a well established rule of evidence ; and even where the witness has no recollection of the fact, independent of the entry in his books, but will testify as to his uniform practice to make his entries truly, and at the time of each transaction, and will farther state he has no doubt, from such practice, that the entry in question is correct, his testimony is admissible; for then the witness speaks upon his own responsibility, under the legal sanction of his oath, his memory being refreshed by the entry in his book or memorandum, the same having been made in accordance with his known habit and practice. 1 Greenfl. Ev. §§436, 115. Merrill vs. The Ithaca and Oswego Rail Road, 16 Wendell’s Rep. 5 and 6. Bank of Monroe vs. Culver, 2 Hill’s N. Y. Rep. 531. While we recognize the rule above stated, the evidence offered does not come within it, in our judgment, and was properly rejected by the Court below.

[3.] The witnesses state, as attorneys of the Central Bank, that certain things were done, and transactions had, which are given in detail, “ which seem, from, the docket kept by said firm, and the written statements made by said firm to the Central Bank.” .The objection is, that the witnesses do not say they kept a docket and were in the practice of making entries therein, at the time of the transactions to which they are called to testify, and that they have no doubt, from their usual course of doing business, the entries were truly made and are correct; but the docket is made to speak as to the transactions, without receiving that legal sanction of the witnesses which the rule requires. It Is not sufficient that the facts appear on the docket of the witnesses ; their legal sanction must be had, that they have no doubt, from their usual manner of doing business, the entries were made at the time they appear to have been made, and are correct and true.

[4.] The third exception taken, as appears from the record, was the rejection of that portion of the testimony of A. M. Nisbet, Cashier of the Central Bank, which went to prove the contents of the books of the Bank, of which contents the witness had no personal knowledge. This evidence is sought to be admitted under the 9th section of the amendatory Act of the charter of the Central Bank, which provides for the examination of the officers of the Bank,.by commission, as to the contents of the books, whenever the Bank shall be a party. Prince, 76. In this case, the Bank is not a party to the suit, and the Act relied on only extends to such cases as to which the Bank may be a party, and beinga Statute enacted in derogation of the Common Law rules of evidence, must be construed strictly. By the 17th section of the’ original charter of the Central Bank, all the transactions, operations and accounts of the Bank are required to be kept in books to be provided for that purpose. Prince, 74.

The Central Bank is a public institution, and the officers thereof are public officers. By the Act of 1830, the certificate of any" public officer, under his hand and seal of office, either of this State or any County thereof, in relation to any matter or thing pertaining to their respective offices, or which, by presumption of law, properly pertains thereunto, shall be admitted as evidence before any Court of Law or Equity in this State. Prince, 220. The officer examined, not having any personal knowledge of the facts about which he was interrogated, as to the contents of the books of the Bank, a certified copy from the books, under the hand and seal of the officer, would, in our judgment, have been competent, and the best evidence to prove the transactions of the Bank with its debtors, so far as the same is confined to the books of the Bank. The evidence offered was properly rejected by the Court below.

[5,] The fourth exception contained in the record, is to the decision of the Court in permitting the counsel for the plaintiff to withdraw their cross questions to the claimant’s interrogatories with permission to the claimant to read them if he desired to do so.

When one party introduces a witness and examines him, the other party is entitled to cross examine such witness, if he desires to do so, but he is not compelled to cross examine him; nor do' we hold he is compelled to read the cross questions and answers of the witness, examined by commission; but, having put the cross’questions to the witness, the other party is entitled to read them and the answers thereto, and so we understand the Court below to have ruled. Whether the witness be cross examined or not lie is the witness of the party introducing him. We find no error in the record so far as this exception is concerned.

[6.] The fifth exception taken to the decision of the Court below is, the rejection of the defendant in execution, who was offered as a witness on the part of the claimant.

This question arises under the peculiar enactments of our claims laws and if it was a new question in our Courts, it might be somewhat difficult to assign any technical legal reason for rejecting, the witness; but, impressed as we are with the importance of maintaining and preserving the rules of evidence with respect to the titles of property in this State, as the same have heretofore existed, We do not feel it would be either safe or expedient to interfere with the rule of decision which, so far as we know, has generally prevailed in our Courts, ever since the enactment of our claim laws. In legal theory, it would seem that it would be for the interest of the defendant in execution to have the property found subject to the execution, and applied to the payment of his debts, and consequently that when called as a witness for the claimant, he would be called to swear against his interest. But twenty odd years’ observation and experience in our Courts, has satisfied us that this legal theory will not hold good in practice, for we hesitate not to declare, that in nineteen out of twenty of the claim cases which arise in our Courts, the feeling, sympathy and interest of the defendant in execution is with the claimant. This fact is indelibly stamped on the face of the record now before us. How exceedingly rare is it to find the defendant in execution colluding with the plaintiff in Ji. fa. which has been levied on his property? How often do you find him colluding with the claimant to screen his property from the payment of his just debts ? The sale of the property by the defendant to the claimant is generally made after his pecuniary circumstances have become desperate. The claimant derives his title to the property from the defendant in execution, who feels interested to support and sustain it against one whom he supposes to be an unfeeling creditor, pressing the collection of his debt. The answer may be, that the legal theory of this view of the question is, that the interest of defendant is equally balanced between the creditor and the claimant, and, therefore, he is a competent witness. But our Courts’ have held, and we think rightfully held, that the defendant in execution has, in the practical application of the principle, apreponderance of interest in favor of the claimant. Whatever may be considered as the legal theory of the rule which excludes the defendant in execution from being a witness in favor of the claimant, we are satisfied that, in a practical point of view, the rule which has been heretofore so generally adopted by our Courts, is the safest and best rule; and believing it to be so, we feel no inclination to disturb it. It is not a matter of so much importance what the rule of evidence upon this subject shall be, so that the rule is uniform,. and uniformly administered, and in establishing the rule, we think that hoth wisdom and sound policy dictate to us, not to innovate upon a rule of evidence which has so long been observed by most of our judicial tribunals, and impliedly, at least, received the sanction of the people upon whom it has operated. In Edwards vs. Musgrove, this question was submitted to the Judges of the Superior Courts, when sitting in Convention, and it was there held, that the defendant in execution was not a competent witness for the claimant. Dudley's Rep. 219. That decision has been published for several years, and no attempt has been made by the Legislature to alter the rule of evidence upon this subject; hence we conclude, that the operation of this rule of evidence, as established by the Judges in Convention, and generally followed in our Courts, has been considered a safe and satisfactory rule of evidence in this State, on the trial of claim cases originating under our claim laws. We therefore affirm the judgment of the Court below as to this branch of the case.

The sixth exception taken to the decision of the Court is, to the rejection of the declarations of Thomas Williams, the defendant in execution, in favor of the claimant, while in possession of the property. The same reasons which we have assigned for the rejection of the defendant in execution, as a witness in favor of the claimant, apply with equal force to the rejection of his declarations in his favor. This defendant, as is the case with almost every defendant in execution in a claim case, manifests a wonderful alacrity to make evidence for the benefit of the claimant’s side of the question; hut as we hold him inadmissible as a witness in behalf, of the claimant, the same rule of policy will, also, exclude his admissions in his favor.

The seventh exception is, to the overruling the claimant’s objection to the testimony of Warren E. Sanders, who was offered by the plaintiff, to prove that Thomas Williams, the defendant in execution, had rented to him, for the year 1847, the lot of land specified in the mortgage, together with the negroes levied on, and had paid him the rent therefor. There is no evidence furnished by the record before us, that' the land included in the mortgage had ever heen sold under the judgment of foreclosure, and until such sale the defendant’s title to the land was not divested, and he had the right to rent it and receive the rent therefor; and such acts, on his part, would not be evidence of fraud as against the plaintiff in execution, and we are of the opinion that the Court erred in admitting this testimony, under the state of facts as presented by this recdrd. We are also of the opinion, that the Court erred in its judgment, in not permitting the witness, Sanders, to be cross examined as to what the defendant in execution said, in regard to his being the agent of the claimant, when making the negotiations for the rent of the land.

, The witness stated, that when the trade for renting the land was finally closed, Williams did not say any thing about his being the agent for any one in renting the lot, but that they had several conversations previously about renting the land, and in negotiations for rent. Claimant then asked the witness if in the previous negotiations about the rent, Williams did not state to him he was acting as agent for another. This evidence might have explained and rebutted the presumption, sought to be inferred from the evidence, that he rented the- land as his own property. The negotiations for the rent, and the contract of renting, all appertained to the same transaction, and ought to have been received as explanatory of it.

The eighth exception is, to that part of the charge of the Court to the Jury, which relates to the possession of the defendant in execution, of the property, after the foreclosure of the mortgage and the sale of the property by the Sheriff.

[7.] The Court charged the Jury, that the retention of possession of the property by the defendant in execution, after an absolute sale by the Sheriff, was a badge of fraud, especially when the property was purchased by the mortgage creditor. We concur in opinion with the Gourt below, that the retention of the possession of the property, by the defendant in the mortgage fi. fa. after an absolute sale by the Sheriff, was a badge of fraud, which it was incumbent on the claimant to remove by a satisfactory explanation of that possession. The purchaser at the sale was the mortgage creditor, who is now the claimant, and the relation of father and son existed between the mortgage creditor and the defendant in execution. Kidd vs. Rawlinson, 2 Bos. & Pullen, 59, McInstry vs. Tanner, 9 John. Rep. 135. Farrington & Smith vs. Caswell, 15 John. Rep. 430. Dickinson vs. Cook, 17 John. Rep. 332. Stevens, adm. vs. Barrett, adm. 7 Dana’s Rep. 259.

The ninth and last exception to the decision of the Court below, is to that portion of the charge of the Court to the Jury, that they must believe, from the testimony, that the claimant had paid off and discharged the items of indebtedness specified in the agreement produced in evidence, and if the claimant had not shown the payment of said items, he had not shown such an indebtedness as would remove the presumption of fraud.” The items in the agreement were the consideration of the note, which the mortgage was given to secure. The objection is, that the Court ruled that it was incumbent on the claimant to prove the consideration for which the mortgage was given, when the law devolves that proof upon the plaintiff in execution, especially after the judgment of foreclosure of the mortgage, and that it was not indispensably necessary that all the items in the agreement should have been proved, to sustain the consideration of the mortgage. "With regard to this last exception, our judgment is with the plaintiff in error.

[8.] After the judgment of foreclosure of a mortgage under our Statute, such judgment of foreclosure affords prima facie evidence of indebtedness, and the burden of showing a want of consideration, rests upon the party alleging it. In this case, the burden of proof rested on the plaintiff in execution, and not upon the claimant.

The instruction of the Court is, that the Jury must believe that the claimant had shown payment of the items in the agreement, which was the consideration of the mortgage, and that if the claimant had, not shown such payment, the presumption of fraud was not removed. .

Nor do we hold, even had the burden of proof rested on the claimant, that it was absolutely necessary all the items of indebtness in the agreement should have been proved. The effort is to impeach the mortgage under which the claimant derives his title to the property, on the ground that it is fraudulent as against creditors; and the want of sufficient consideration to support the mortgage, is alleged as a badge of fraud against it.

Fraud may be inferred from circumstances, such as the smallness of the consideration expressed, compared with the fair price of the property conveyed, or the want of proof of any price having been actually paid. Hildreth vs. Sands et al. 2 John. Ch. Rep. 35.

[9.] Whether the indebtedness of the defendant in execution to the claimant, was a bona fide indebtedness, or what was the actual amount of Ms indebtedness, to secure which the mortgage was given, or whether the mortgage was merely colorable, and without consideration, were questions of fact which the Court ought to have submitted to the Jury, irrespective of the proof of all the specified items in the agreement. If all the items of indebtness were not proved, was there a sufficient consideration shown to rebut the presumption of fraud in the execution of the mortgage % Does the consideration for which the mortgage is alleged to have been given, afford satisfactory evidence of the bona fides of the transaction, or was it merely colorable for the purpose of defrauding the creditors of the mortgagor ? Under the charge of the Court, had the Jury believed that any one of the items of indebtedness, specified in the agreement, had not been proved to have been paid by the claimant, they would have been at liberty to find that the allegation of fraud had not been removed, although it had been shown that most of the other items were paid by Mm. We think that the charge of the Court was calculated to mislead the Jury in respect to the consideration for which the mortgage was executed, and which was alleged as a badge of fraud against the claimant, consequently a new trial must be granted.

Let the judgment of the Court below be reversed.