Simpson v. Carleton , 83 Mass. 109 ( 1861 )

Merrick, J.

1. The certified copies of the schedule of debts and list of claims appearing in the proceedings against Alexander in the court of insolvency, which were offered in evidence by the plaintiff, should have been excluded. They were produced to show that Alexander was insolvent at the time when he made sale to Carleton of the goods in controversy; and the plaintiff was permitted to lay them before the jury to establish that fact. But the evidence was incompetent. The statute made it the imperative duty of the debtor to deliver, within three days after the date of a warrant issued against him in insolvency, to the messenger, a schedule containing a full and true account of ill his creditors. St. 1838, c. 163, § 6. Gen. Sts. c. 118, § 20. The schedule of debts is therefore nothing but a statement or declaration of the debtor; and the copies which were permitted to be given in evidence were in reality only proofs of what was said by Alexander long after the sale to Carleton. But admissions or representations of a vendor, made after other persons have acquired separate rights in the same subject-matter, cannot be received to disparage their title. He cannot in that way impair or affect the rights of his vendee or of those claiming under him. This is a familiar and elementary principle. It was early recognized by this court, and has ever since been acted upon as an established and unquestioned rule in the law of evidence. Bartlett v. Delprat, 4 Mass. 702. Bridge v. Eggleston, 14 Mass. 245. Doe v. Webber, 1 Ad. & El. 733. 1 Greenl. Ev. § 180, and notes.

These copies were undoubtedly admitted in evidence, as was suggested by counsel at the argument, upon the authority of the reported, decision in the case of Heywood v. Reed, 4 Gray, 574. It is there said that the proceedings in insolvency, which were received in that case were rightly admitted for the purpose for which they were offered; which, upon recurring to the report, is seen to have been to show the fact and the extent or the insolvency of Noyes, by whom it was alleged a sale of goods had been made in fraud of his creditors. That being the purpose for which the proceedings in insolvency were produced, the remark made by the court on the subject is obviously incorrect^ and must have been induced by a misapprehension of the facts n reference to which it was made. It will be seen, upon recurring to the statement of facts in that case, and to the points of law which were raised and considered, that the attention of the court was attracted chiefly to other questions upon which the decision which was made, sustaining the exceptions, depended, and which must have been exactly the same, whatever nod been the determination respecting the admissibility in evidence of the schedule and proof of debts. Undoubtedly it was only intended, by what was said on the subject, to recognize and sustain the rule affirmed in the case of Holbrook v. Jackson, 7 Cush. 136; which was cited by counsel as having a bearing upon the question under consideration. But, at any rate, the general proposition, as stated in the former case, is untenable; and the record of proceedings against parties in insolvency can be considered competent evidence, upon an issue like that in the present case, only for the limited purpose for which in Holbrook v. Jackson it was held to be admissible.

2. The testimony of witnesses, in the form of depositions, is admissible in evidence, upon the trial of issues in courts of law, by force only of statutes under which they are allowed to be taken. It cannot be received, therefore, in that form, unless there has been a full compliance with the actual and positive equirements of the law. Bradstreet v. Baldwin, 11 Mass. 229. Welles v. Fish, 3 Pick. 74. Davis v. Allen, 14 Pick. 313. Our statute provides that a deponent shall be sworn to testify the truth, the whole truth, and nothing but the truth relating to the cause for which the deposition is taken; and it is made the duty of the magistrate to annex to it his certificate, among other hings, of the time and manner in which it is taken. Gen. Sts. 131, §§ 23, 26. It appears, from the certificate annexed to he deposition of Davis, which was allowed to be given in evidence against the objection of the defendant, that the deponent was sworn generally to testify the truth and the whole truth, out not particularly to that relating to the cause for which the deposition was taken. The positive requirement of the law in this respect was not therefore observed; and the party for whose oenefit it was taken not having been careful to have the provisions of the statute strictly complied with, is not entitled to avail himself of it in evidence. It is certainly a suitable and easonable precaution to concentrate the attention of the witness, by the form of the oath administered to him, to the particular matters respecting which he is called upon to testify and in making provisions upon the subject it may have been thought necessary, in view of the established forms of proceed ings in criminal cases, and especially in prosecutions for perjury that the oath should be administered in the very words in which the statute is expressed. But without seeking for the reason why it is so prescribed, it is sufficient that the statute is per emptory and unambiguous in its terms. It is the duty of the court to administer the law just as it is ordained by the legisla turc. A rule established in clear and explicit language by its authority cannot be disregarded or relaxed, but must in all cases be conformed to and enforced. The caption annexed by the magistrate to the deposition of Davis fails to show that the prescribed rule was complied with, and therefore it cannot be con sidered to have been regularly taken.

This same question has arisen in the courts in the states of Maine and New Hampshire, upon statutes very similar to our own; and it has there been determined, that, when it does no appear in the certificate of the magistrate that the deponent was sworn to testify the truth “ relative to the cause for which it is taken,” his deposition cannot be admitted in evidence, because it is not shown to have been taken in due observance of the positive requirements of law upon the subject. Fabyan v Adams, 15 N. H. 371. Brighton v. Walker, 35 Maine, 132 Parsons v. Huff, 38 Maine, 137. Upon authority, therefore, as well as upon the conclusions to be deduced from the particular provisions of the statute, it is apparent that the deposition of Davis should have been excluded, because it was unaccom ponied by proof that his testimony was given under oath administered in the form prescribed by law.

3. In other respects the rulings and instructions of the court appear' to have been unobjectionable. Certainly the evidence offered to show the inattention of Alexander to his business his indulgence in habits and practices of great and unnecessary expense, and the wasting of his time in useless and frivolous pursuits, and that all this was known to Carleton, had some ten dency to show that he had reasonable cause to believe that his debtor could not have been, and was not, solvent at the time of the sale of the goods, the value of which is in controversy; because all experience shows that such courses as he is said to have indulged in are commonly, if not inevitably, destined to end in failure and bankruptcy. It is perfectly well known tó all persons in any degree conversant with the transaction of business, that the conduct of a party and his habits — whether of frugal ity or of extravagance in his expenditures — are among the first things which men of ordinary care and prudence usually consider in forming a judgment respecting his pecuniary credit and responsibility. And accordingly evidence of such facts, upon the trial of an issue like that in the present case, has been held competent and proper to be submitted to the jury. Bartlett v. Decreet, 4 Gray, 113. Heywood v. Reed, Ib. 574. And on the same ground the questions respecting the general reputation of Alexander, in relation to his pecuniary credit and standing, were, under the circumstances otherwise shown, properly allowed to be proposed to and answered by the witnesses.

4. The written and verbal demands upon the defendant, and the reply which he made to them, were properly admitted" in evidence for the purpose of proving conversion of the property claimed. His answer was indirect and evasive; but the meaning of it was to be ascertained and acted upon by the jury, who could scarcely, we think, have misunderstood or been misled by it. Besides, the sale of the goods, which appears to have been fully and satisfactorily proved, was of itself a conversion of such as belonged to the plaintiff; and therefore, with respect to them, no proof of demand and refusal was necessary to enable him to maintain his action.

5. Upon examining the bill of exceptions, we do not perceive that any occasion arose at the trial for the application of the instructions desired by the defendant in reference to the inter-mixture of goods, and the rights and duties of the respective parties in consequence of it. All the goods appear to have been sold and converted into money before any demand was made upon him by the assignee. This being so, neither of the parties could be called upon or required to designate and separate from the general stock the articles not enumerated or included in the description in the first mortgage, which were conveyed by the second. In such case it would be sufficient to show that the defendant had been in possession of particular parcels of property belonging to the plaintiff, which he had unlawfully converted to his own use, by an actual sale and an appropriation of the proceeds to his own benefit. The plaintiff would therefore be entitled to recover for whatever articles belonging to himself he could show had thus been disposed of. In this view of the facts reported, it seems unnecessary to consider in detail the instructions which were actually given, although, as we understand them, they appear to have been correct; because we cannot foresee what particular rule in reference to the facts to be disclosed upon the new trial, which for other reasons must be granted, ought to be prescribed to secure its regularity and make it effectual in deciding the matters in controversy.

6. The instructions asked for by the defendant, in reference to the legal effect of the mortgage of the 17th of September and the rights of the parties under it, were properly withheld, and those which were given upon the subject were correct. The mortgage of September 17th certainly was not a renewal of that of the 12th of February, inasmuch as the property conveyed by the one was not identical with that conveyed by the other. The latter created new rights, and was intended to give, and if valid actually did give, to the mortgagee a new security for his preexisting debt, by creating a lien upon property of which, when the former was executed, the mortgagor was not the owner. The validity of this latter conveyance is to be determined upon the circumstances under which it was made. If the mortgagor was then in fact insolvent, and the mortgagee had reasonable cause to believe that he was in that condition, the conveyance was an attempt unlawfully to prefer one of his creditors to the disadvantage of the others; and as against them was therefore fraudulent, unlawful and void. The agreement made by the parties on the 12th of February, and expressed in the covenants of the deed of that date, that the mortgagor should, at the expiration of every six months, make a new mortgage, and embrace in it all the goods and merchandise of which bis stock, should then consist, including whatever he had in the mean time purchased or in any manner become entitled to, was a mere executory contract. The right of giving new security under such contract is said by the court, in the ease of Blodgett v. Hildreth, 11 Cush., 313, to be plainly excluded by the provision in. the Insolvent Act that “any security given for the performance of any contract, when the agreement for such security is part of the original contract, and the security is given at the time of making such contract,” shall not be deemed to be a preference. St. 1838, c. 163, § 10. To render it effectual, not only must the agreement be made but the security must be given, contemporaneously with the original contract; if given afterwards, its validity is to' be tried by the same tests which are in general to be applied to all sales and conveyances made by a debtor for the benefit of a pre-existing creditor. This is the principle which was embraced in the instructions given to the jury instead of those asked for by the defendant. In each particular, therefore, the ruling of the court was unobjectionable.

But because the deposition of Davis, and copies of the schedule of debts and proof of claims in the insolvency proceedings against Alexander, were erroneously admitted in evidence, the exceptions must be sustained, and a New trial granted.