Homewood People's Bank v. Marshall , 223 Pa. 289 ( 1909 )

Opinion by

Mr. Justice Brown,

The real estate which is the subject of this ejectment was conveyed by Tom Marshall on January 7, 1903, to the appellants, his two brothers. At that time he was heavily indebted, and this his brothers knew. His indebtedness to the Home-wood People’s Bank, the appellee, amounted to $8,500.27. In the following May and June it brought two suits against him and in one of them recovered a judgment for $3,833.12. When these suits were brought the appellants had not recorded their deed, but placed it on record before the judgment was obtained against their grantor. Believing that his conveyance to them had been made for the purpose of defrauding his creditors, the appellee issued an execution on its judgment, upon which the sheriff sold to it, as the property of Tom Marshall, the real estate in controversy. This ejectment followed, in which a jury found that the conveyance had been made in fraud of creditors, and on the appeal from the judgment on the verdict we have two assignments of error, the one complaining of the admission in evidence of three deeds from Tom Marshall to three other grantees, executed in May and June, 1903, and the other of the permission given to the appellee to show that after his conveyance to his brothers he said he still owned the property.

The first of the deeds alleged to have been improperly admitted in evidence, dated May 27, 1903, and recorded June 26, 1903, was to the mother of Tom Marshall; the second, dated June 15, 1903, and recorded July 28, 1903, was to William W. Miller, his partner-; the third, dated May 20,1903, and recorded June 15,1903, was to Annie Keliher. These deeds were offered for the purpose of showing that Marshall was fraudulently conveying his property about the time the bank brought suit against him. The complaint as to .their admission is that they represented transactions between other parties and Marshall, with which the appellants were in no way connected and of which they had no knowledge, and, as the only question on the trial was their good faith in taking their deed, they ought not to have been prejudiced by what their brother had done with the rest of his property, even if he had conveyed it to defraud his creditors, of which there was no proof. There are authorities in other jurisdictions sustaining this position, but, under our cases, the learned court below did not err in allowing the appellee to offer the three deeds. Before offering them it had submitted evidence from which the jury could fairly have inferred that the deed to the appellants did not represent an honest transaction. This is especially true of the testimony of William Marshall, one of the appellants, called as on cross-examination, which need not be recited in detail. If he was telling the truth, he did not tell it with the frankness and candor which the jury would naturally have expected from one who was a party to an honest transaction, and, after having heard him in connection with the testimony as to the inadequacy of the consideration for the conveyance, they could well have believed that he had been a party to his brother’s fraud. The three deeds were executed about the time the bank was pressing Marshall for payment, or shortly afterwards, and, under Deakers v. Temple & Barker et al., 41 Pa. 234, could not have been excluded. That case was an issue to determine whether Deakers was a fraudulent vendee of Martin Connolly and wife by purchase from her on August 23, 1860, and the defendants were permitted to show that between that date and September 1 following, Connolly and his wife had disposed of a bond amounting to $900; that on August 21 they had conveyed a certain lot of ground to John Mellon, Esq., and on May 23, 1860, had mortgaged certain real estate in the city of Pittsburg for $3,000, which they sold on August 27, Mrs. Connolly receiving the proceeds. This was objected to for the same reason that is urged here, and the admission of the evidence constituted the second assignment of error. In overruling it we held, through Woodward, J., “The evidence complained of in the second error, though not directly relevant to the immediate issue, was such as is usually admitted in cases of fraud, and was very proper as exhibiting the conduct of Connolly and wife on the eve of bankruptcy. It is a bad sign for parties who have been convicted of a fraud to complain of an excess of evidence. Their effort to draw the narrowest possible sight upon the pending issue, and to exclude everything which, according to the most rigid rules of evidence, is not relevant to it, indicates a consciousness that the transactions which surround the main fact will not bear investigation. But all experience proves, and rules of evidence are founded in human experience, that, if fraud is to be detected under the various cloaks it puts on, the conduct of the parties before and after the fact complained of, as well as in immediate connection with it, must be freely examined. Truth and honesty are not likely to suffer by the latitude of evidence allowed in cases of fraud, for the more thoroughly an honest transaction is investigated, the more honest it will appear.”

The appellees having submitted evidence tending to show that the purpose of Tom Marshall to defraud his creditors had been participated in by the appellants, his declaration, made subsequently to the execution of his deed, that he still owned the property, was admissible under Hartman v. Diller, 62 Pa. 37, and Confer et al. v. McNeal, 74 Pa. 112. In the former case, in dismissing the asssignment that the court below had erred in permitting the declarations of the alleged fraudulent grantor, made after the sale to Hartman and not in the latter’s presence, Mr. Justice Sharswood said: “As a general principle it is undoubtedly well established that the declarations of a grantor made after the execution of the grant cannot be made use of for the purpose of impeaching it. But the rule has been so far modified that when the bona fides of the transfer is attacked by creditors alleging that it was intended to hinder, delay and defraud them, and therefore void under the statute of 13 Eliz., c. 5, and some evidence has been adduced tending to show a common purpose or design of this character by the parties, then such declarations are admissible. For wherever evidence is given tending to prove a combination or conspiracy to do an unlawful act, it lets in the declarations of all the parties against each other. In Reitenbach v. Reitenbach, 1 Rawle, 362, where the question was as to the validity of a bond, and a conversation with the obligor in the presence of the obligee had been proved going to show a fraud upon creditors, other declarations subsequently made by the obligor in the absence of the obligee were held to have been improperly excluded.”

The assignments of error are overruled and the judgment is affirmed.