Glenn v. Grover , 3 Md. 212 ( 1852 )

Tuck, J.,

delivered the opinion of this court.

After having carefully examined the record in this case, we can perceive no reason for dissenting from the opinion of the chancellor.

It is well settled, that a debtor in failing circumstances may prefer one creditor to another, by a transfer of his property made in good faith; and it is equally clear, that if such a transaction be assailed on the ground of fraud, the onus of proof is upon the party impeaching the assignment. The question presented by this record, therefore, is, whether the deeds from Grover to McColm were made bona fide, and upon sufficient consideration. Upon the latter of these points there can be no room for doubt. Grover was considerably indebted to McColm at the date of the first deed; the property was sold at what appears to have been its value, and was paid for, in part, by discharging a balance due thereon by Grover, and as to the residue, by releasing so much of McColm’s claim against him. As to the property conveyed by the last deed, it is equally clear that it was assigned in payment of advances made by McColm to Grover after the first deed. The complainant offered no evidence that Grover was not thus indebted to McColm. But it is insisted that the fact of indebtedness should have been showm affirmatively by the defendants, because there being special interrogatories in the bill on this point, so much of the answers as relates to the consideration is not responsive, but in the nature of new matter. We cannot concur in this view of the case. The bill charges, that the first deed was made without consideration and fraudulenty, to hinder, delay and defraud the creditors of Grover, and to cover and screen from them the property mentioned in it for his own benefit;” and that McColm received the deed, knowing this to be its design. And as to the second, it is alleged, that the parties thereto were influenced by the same motive, and “that the consideration therein mentioned was merely colorable, and was not paid at the time”’ of its execution. The defendants were required to answer generally, and special interrogatories were also propounded predicated upon some of these averments. They not only had a right to answer all these allegations, whether specially interrogated or not, but it was incumbent on them to have answered fully, and if they had not it would have been ground for exceptions to the answer. A defendant would be deprived of the benefit which the law gives him of being his own witness as to all matters which he may answer responsively, if the complainant could so frame his bill and interrogatories as to allow certain portions of the answer, (and perhaps the most immaterial-,) to be evidence for the defendant, and make new matter of the rest, though responsive as to the subjects really in controversy between the parties. The complainant exhibits these deeds, alleging that they are fraudulent and-void as against Grover’s creditors. He calls upon the defendants to answer this charge, and insists that this must be done, not by merely denying the fraud, and thus requiring proof thereof from the complainant, but by showing affirmatively what the consideration was upon which the conveyance was executed — a fact, indeed, of which the complainant himself had, by exhibiting the deeds, offered prima facie proof. Faringer vs. Ramsay, 2 Md. Rep., 365. We have no doubt that in such a case the positive denial in the answers must be met in the usual way— by the oath of two witnesses, or by that of one with pregnant circumstances.

But then, we are told that so many badges of fraud attend this case that the burden of proof is.shifted from the appellant to the appellees, and for this purpose reference is made to the insolvency of Grover at the time the- deeds were executed, the fact that they comprised nearly all his property, his possession thereof from the dates of the conveyances, at a rent that equalled only the interest on the alleged purchase money, and the inconsistencies between the answers of the defendants, and Grover’s statement at the time he petitioned under the insolvent laws, as to the character of the deeds, and of his possession of the property.

There is little force in the objection that Grover was insolvent and transferred all his property in payment of this one claim, provided it was done in good faith. Preferences are allowed. They always presuppose that there are creditors against whom the assignment is to operate; and it is generally true, that in such cases the debtors are embarrassed, if not insolvent, yet this cannot affect the validity of the conveyance. Indeed it furnishes the strongest motive to the creditor for requiring security for his claim, or for obtaining payment in property or otherwise. In the case of a deed without consideration the argument now urged applies with great force. Worthington, et al., vs. Shipley, 5 Gill, 449. And even where there is a debt due from the grantor to the grantee, the amount of the property conveyed compared with the debt intended to be secured or paid, and the number, amount and character of his other debts, may be properly considered in determining the good faith of the transaction towards other creditors. In this case, however, there is nothing to support such an objection.

As to the possession and use of the property by Grover, it may be that McColm did not make a very profitable arrangement in allowing the rents to be expended in improving the estate. But we cannot say that this was evidence of fraud between these parties. One of the the witnesses says, that the farm was like a wilderness when Grover went there, and that he has improved it very much. Having taken an indifferent farm, without houses, fences or any improvements, in payment of a bad debt, he may have been willing to make this arrangement as the best that he could do, with an industrious and attentive tenant as Grover is shown to have been. The agreement itself shows that he held Grover under restraints as to the timber, buildings and other improvements, which would have been quite unnecessary if Grover had been the real owner of the property, and a,s far as the record discloses any thing on the subject, his management of the' estate has not been inconsistent with the terms of the agreement. It is urged that the lease was originally for five years, but that he has held the land for ten or more. It does not appear that, the tenancy has continued on the same terms. It may be that McColm, since the first lease, has been receiving an income from the property remunerating him for what he may be supposed to have lost under that arrangement.

But it is insisted, that this agreement is new matter set up in the answer, and that it is not proved to have been executed on the day it bears date. The defendants are interrogated as to the arrangement made between them about this farm, and whether it was written or verbal, &c. It would, we think, be difficult to show that an answer setting out this paper as the arrangement is not responsive to the allegation and inquiry, and, therefore, to be taken as true in all its parts until disproved. But the agreement is admitted to have been signed by the parties, though the appellant’s counsel contends that this admission does not imply proof of the time of its execution. If the handwriting of a party who signs a paper be proved, the contents are also thereby established until the contrary appears. Possession of a bond by the obligee is prima facie evidence of delivery and acceptance. 1 H. & G., 418, Union Bank vs. Ridgely. Where proof of the handwriting of the obligor was offered on the plea of non est factum-, although the subscribing witness to the bond was in court and not examined, it was held to be evidence of the signing, sealing and delivery, and should have been left to the jury as prima facie proof. Pannell vs. Williams, 8 G. & J., 511. See also 1 Md. Rep., 11, Milburn vs. The State. There is no reason for saying that the execution and delivery do not import that the instrument is truly dated. If the rule were otherwise no writing could be safely received except in the presence of witnesses.

The supposed discrepancies between the answers and Grover’s statement accompanying his schedule of property, cannot avail the complainant. McColm is the party really interested in defeating this suit. Grover’s answer, however inconsistent with McColm’s or with the proof in the cause, cannot be used against his co-defendant. He might have been examined as a witness, and in this way much perhaps of what he states in his answer might have availed the complainant. The appellant’s counsel relied with much stress upon the fact that Grover had made an explanation, at the time of his application for the benefit of the insolvent laws, of the deeds from himself to McColm, from which it is said that they are to be treated as mortgages. There is no evidence to connect McColm 'with this statement. The proof is positively the other way. Standing alone it is but the declaration of a grantor, made after the conveyance, which cannot be used to defeat or impair the title of his grantee.

The validity of these deeds depends on the intention of the parties defendants. As to their design they have been called on by the complainant to speak, and in such a case, “an answer responsive to the bill, emanating from a party made a witness by the act of the complainant, speaking in reference to the motives and views under the influence of which the transfer in dispute was made, a matter lying necessarily within his own bosom, must be held as conclusive upon the question of intention, unless it is overcome by the testimony of two witnesses, or that of one witness with corroborating circumstances.” Beatty vs. Davis, 9 Gill, 218. And “if there were pregnant circumstances, yet standing alone without the aid of the positive testimony of a single witness, they would be unavailing.” Roberts vs. Salisbury, 3 G. & J., 433. The complainant relies upon the circumstances disclosed by the record as proof of the alleged fraud. We do not think them sufficient to establish either a want of consideration or of bona ffides, and affirm the decree with costs.

Decree affirmed with costs.