Snodgrass v. Branch Bank at Decatur , 25 Ala. 161 ( 1854 )

GOLDTH WAITE, J. —

The main question in this case is as to the effect of the statute of limitations upon the possession of a vendee acquired and held under a conveyance to defraud creditors. In courts of equity, it is received as the settled doctrine, that fraud, if operating to conceal the facts upon which the rights of a party to maintain his suit depend, does affect the bar which would otherwise be created by the statute of limitations ; and in all cases where that court acts in obedience or analogy to the statute, if the complainant uses reasonable diligence to discover the fraud, and files his bill within the time prescribed by the statute after such discovery, it is sufficient. — Booth v. Lord Warrengton, 4 Bro. Parl. Cas. 163; Western v. Cartright, Sel. Cas. in Chan. 34; South Sea Co. v. Wymondsell, 3 Pr. Wms. 143; Hovenden v. Lord Annesley, 5 Sch. & Lef. 634; Michaud v. Girard, 4 How. 503; Troup v. Smith, 20 John. 33; Farnam v. Brooks, 9 Pick. 212; Sherwood v. Sutton, 5 Mason 143; Frankfort Bank v. Markley, 1 Dan. 373. But whether fraud, thus operating, will have the same effect at law, is a question upon which there is some conflict of authority. In Bree v. Holbreck, Doug. 630, on a demurrer to a replication, the object of which was to take the case out of the statute upon an alie-gation of fraud, Lord Nrubfield said, “There may be cases which fraud will take c« t rff -'V statue of limitations”; and the plaintiff was permití Vi io :r ■. d his replication, so as to charge fraud in the .defendant; th: facts alleged, in the opinion of the court, not amounting to fraud. In Clarke v. Hougham, 3 D. & Ry. 320, it seems to have been conceded, that had there been a special charge of fraud, it would have furnished an answer to a plea- of the statute. See, also, the opinion of Abbot, J., in Granger v. George, 5 B. & C. 149; Brown v. Howard, 4 Moore 503; Bolton Ex parte, 1 M. & A. 60. These cases are conclusive, wo think, to show that in England, when the facts are concealed by fraud, the statute only runs, in courts of law, from the discovery of the fraud. In the United States, the question has frequently been considered ; and in Beach v. Catlin, 4 Day 284, upon the identical question which is presented in the present case, it was held, that no length of possession under a fraudulent deed would give the vendee title, as against the creditors of the vendor. In Powell v. Wragg & Stewart, Collier, C. J., holds the same opinion ; but we do not regard that case as an authoritative exposition of the law, for the reason, that two judges only were sitting, and Dargan, J., rests his opinion on different grounds. In Massachusetts, Maine, Pennsylvania and Indiana, a doctrine in conformity with that of Lord Mansfield is asserted (Massachusetts Turnpike Co. v. Field, 3 Mass. 201; Horner v. Fish, 1 Pick.; Wells v. Fish, 3 Pick. 75; Jones v. Caraway, 4 Yeates 109; McDowell v. Young, 12 S. & R. 128; Rush v. Barr, 1 Watts 110; Perrock v. Freeman, ib. 491; Harrisburg Bank v. Foster, 8 Watts 12; Raymond v. Symonson, 4 Black. 85); and McLean so holds in Mitchell v. Thompson, 1 McLean Cir. Co. R. 96; and Judge Story, in Sherwood v. Sutton, supra, in a well considered opinion, in which he reviews the leading authorities on both sides, arrives at the same conclusion, resting- his opinion mainly on the ground that fraud forms an implied exception to the statute. On the other hand, the courts of New York, Virginia, South Carolina-. North Carolina and Tennessee, hold the opposite doctrine. — Troup v. Smith, 20 John. 33; Callis v. Waddy, 2 Munf. 511; Miles v. Barry, 1 Hill’s S. C. 296; Hamilton v. Smith, 3 Mur. 115; York v. Bright, 4 Hump. 312. The weight of authority is, we think, clearly with the position, tliai there are cases in which fraud will, in courts of law, furnish an answer to the statute ; but we do not rest it upon authority alone : we are not willing to go to the length of the Connecticut decision, and hold that no length of possession, however Jong, under a fraudulent conveyance, will bar the creditors of the grantor. A possession under a fraudulent deed may be void, but it is no more so than one acquired by a trespass, or any other unlawful act; and against. possessions of the latter character, it is clear, the statute runs. Wo agree, that the statute is. one of repose, and would apply it to every ease of adverse possession, except where the defendant, by fraud, has prevented the plaintiff from obtaining a knowledge of the facts upon which his action depends: and in such a case, the party should, under the influence of the statute, be required to bring his suit within the period prescribed after the discovery; but the defendant should not be allowed to claim any benefit by a fraud upon the statute. The act, it is to be observed, was passed for the protection of the defendant. By his fraudulent conduct he prevents the plaintiff from complying with its terms — from bringing his suit within the time — and then seeks to take advantage of an omission which Ms own fraud has caused. A construction which would produce this result, is at variance with the established rules of law, which never allows an advantage to be gained in this way : and, if countenanced by the courts, must necessarily enure to the encouragement of fraud. Such, we think, could not have been the intentiou of the Legislature, and such is not the rule which a just and enlightened equity, professing to follow the law, bolds. Upon principle, as well as authority, our conclusion is, that if the creditor could not, with reasonable diligence, have discovered that the conveyance was fraudulent within six years before the levy of Ms execution, the possession of the fraudulent vendee for more than that time would give Mm no title against the creditor. The court, therefore, did not err in the refusal to give the first charge requested.

The proof by the witness who testified, that he was acquainted with the hand-writing of Benjamin Snodgrass, and that he had seen notes and bills of exchange, signed by Mm and his partner, in the possession of the Bank, prior to the date of the sale, although the notes and bills were not produced, nor their absence accounted for, was competent. The fact of the existence of such notes and bills, he could as well prove, if ho knew it, without their production, as if they were produced. There was no attempt to prove their contents. The case falls, on this point, within the decisions in 5 Ala. 543; 8 ib. 9; 21 ib., Dixon v. Barclay. See the cases collated on this question in Cowen & Hill’s Notes to Phil, on Ev. pp. 1207, et seq.

Proof that Benjamin Snodgrass, previously to the sale in May, 1838, had made a proposition in writing to the Decatur Bank to compromise his indebtedness, which had been rejected, without the production of the paper making the offer, was competent, as tending to show the existence of an indebtedness at that time by the party making the offer. The same rule will govern as in the point last considered. It was proving as a fact the existence of such a paper, not the particular contents. We do not understand, from the terms of the bill of exceptions, that this “ proposition to compromise his indebtedness” was any offer to buy his peace against a disputed claim, and confidential in its character, but simply to settle the debt by paying less than the whole amount admitted to be due.

The court admitted testimony on the part of the plaintiff below, that the slaves in controversy had gone back into the possession of Benjamin Snodgrass a short time after his discharge as a bankrupt, and, to show the time of such discharge, allowed a transcript of the decree in bankruptcy to be given in evidence against the objection of the claimant.— As a general rule, great latitude is allowed in the range of the evidence, when the question of fraud is involved. It is indispensable to truth and justice that it should be so ; for it is hardly ever possible to prove fraud, except by a comprehensive and comparative view of the actions of the party to whom the fraud is imputed, and his relative position a reasonable time before, at, and a reasonable time after, the time at which the act of fraud is alleged to have been committed. No more precise general rule can be laid down in such cases. Here, the alleged act of fraud is the sale ip. May, 1838. After that the slaves go into the possession of the vendee, and-remain four years. The vendor, in the course of two years or so, goes into bankruptcy, and obtains his discharge in November, 1843 ; and in a few months after this event, the slaves are found again in his possession. We do not hesitate to say, that it was competent to prove to the jury, in a case like this, as circumstances proper to be taken into the whole account, that the vendor was decreed a bankrupt in 1843, and that a short time after his discharge the slaves went back into his possession. The transcript of the decree was the proper form of evidence of the fact of his bankruptcy and discharge.

The recitals of the record in suits between the Decatur Branch Bank and Benjamin Snodgrass, in which judgments were rendered against him in 1839, were admitted by the court, against the specific objection of claimant, to prove that said Benjamin was indebted to the said Bank prior to the date of the judgments in said suits. This was error. A record of a judgment between other parties is always admissible to prove the mere fact of the existence .of such judgment, when that fact is material to the issue. This comprehends only the judgment of the court, and such parts of the record as are necessary to show when and by what court it was rendered. All other parts — the declarations, pleas, orders of continuance, or the recitals which precede the judgment, when the court is of special and limited jurisdiction, or where a court of general jurisdiction renders judgment by default in a statutory proceeding — must be considered, as to all other persons than the parties to the judgment and their privies, “ res inter alios acta” and therefore not admissible as evidence against them.

The defendant in error insists, that Benjamin Snodgrass may have demurred to the Bank notice or declaration, prior to the date of the bill of sale to claimant, or given a power of attorney to confess judgment before then, which was duly proven, and that either of these would be a judicial admission of indebtedness before the sale, provable by the record. As against Benjamin Snodgrass, doubtless, it would, in favor of any one ; but to say that it would be a judicial admission of Benjamin Snodgrass that will bind William L. Snodgrass, is to say that one man may make an admission which will affect the interests of another, and fix the proof of it at the same moment, without that other ever having an opportunity to be heard, which is against all reason and principle.'— Crutchfield v. Hudson, 23 Ala.; 1 Green. Ev. §§ 527 et seq.

For the error above noted, the judgment must be reversed, and the cause remanded.