Boteler v. Beall

7 G. & J. 389

• Court: Court of Appeals of Maryland
• Decided: December 15, 1835
• Status: Published

Opinion

Dorsey, Judge,

delivered the opinion of the court.

As one of the several grounds relied on to sustain the Chancellor’s order, dismissing the petition of the appellants, it is insisted that the order of the county court directing E. M. Dorsey, the first trustee, to pay to Lucy S. Brooke the amount of her mortgage claim, is an adjudication that the trustee had received the amount of the purchase money applicable to such purpose; and that the present appellants claiming under Lucy S. Brooke, are estopped from denying that fact, and consequently, can make no such claim as that preferred by their petition. Estoppels of this character are not favoured in equity, and can never preclude a court of Chancery from the ascertainment of the truth of the fact; unless the estoppel be mutual, or in other words, operate with equal conclusiveness upon both parties to the litigation, in which it is attempted to be used. The statement of the account by the auditor, whereon the order was passed, is a matter in which the purchaser has no interest (and unless for some special reason he be made so, which is not the case here) is no party; and consequently none of his rights are judicially determined by the audit. lie being therefore, not precluded from contesting it, as far as it operates upon his interests, will not be permitted to use it as an estoppel to the rights of those who were properly parties to that proceeding.

This case we think bears a strong analogy to that of Gaither and Warfield vs. Welch’s estate, 3 Gill and Johns. 259. where under our act of assembly, making the real estate of the debtor answerable for his debts, in case of his not having personal estate sufficient for their payment, it was held, that a creditor who had obtained an absolute judgment against the executor, might notwithstanding such judgment, in seeking a sale of the realty, offer evidence to shew, that in point of fact, the personal estate was insolvent; that assets had not come to the hands of the executor, wherewith it was his duty to have paid the creditor’s claim.

The appellants having excepted to that part of the testimony of Thomas G. Pratt, which relates to the declarations of Richard H. Brooke; our attention is necessarily called to the interrogatory by which it was elicited ; and thereby the appellants are at once deprived of all the grounds of opposition to this evidence, which, but for their interrogatory, naturally arise upon the face of the testimony. The appellants having called upon the witness by their cross interrogatory for the statement he has made, it is not for them, on discovering its adverse operation, to object to its admissibility.

Exception being taken to the form of the proceedings in this case, viz. that the appellants instead of filing their petition as they have done, praying process against nobody, ought to have filed an original bill praying subpcena against all the necessary parties; it is urged in reply, that such objection cannot be raised in this court, since the passage of the act of assembly of 1832, ch. 302, sec. 5, which provides, that no objection to the sufficiency of the averments of the bill or petition shall be raised in this court, unless presented by exceptions in the court below. This reply, is no answer to the point urged by the appellee. The section of the act of assembly referred to, has no application to the question before us. It is not objected, that the averments in the petition are not sufficient to entitle the petitioners to the relief they have prayed; but that the relief for which they ask, cannot under the circumstances of this case, be obtained by-petition, but must be sought by an original bill.

The act of 1832, having no bearing on the difficulty suggested by the appellee, is it well founded, is the next inquiry ? In our opinion it is, the appellee, the purchaser, having long before the filing of the present petition, settled with the trustee, and received from him a deed predicated upon the receipt of the whole purchase money, the distribution whereof had been decreed amongst the creditors, according to the respective priorities, could no longer be regarded as a party in court to any proceeding still pending therein. As far as he was concerned, the proceedings in the county court had finally terminated, and he was dismissed from all further attendance thereon. He could not afterwards be treated upon any principle of equitable contemplation, as still present in court, and liable to be called on to account in the summary mode of petition. If sought to be charged on the grounds alleged in the petition filed against him, the proper mode of seeking such relief, is by an original bill.

But waiving all objection to the form of the proceeding, have the appellants upon the proof in the cause, shown themselves entitled to the relief they have claimed ? All the material facts constituting their equity, have been explicitly denied by the answer of the appellee. Has the effect of this answer been controlled by the contradicting evidence of two witnesses, or of one witness, and pregnant circumstances ? Here are but two witnesses, whose testimony is in conflict with the statements in the answer, viz. .Philemon Chew and John E. Berry. To give to them that credit to which they are entitled, in influencing the determination of this cause, it is proper to premise, that on the 15th of September, 1830, (the same day on which the trustee reported the sale to the county court, and obtained its provisional ratification) Samuel Duvall, a junior judgment creditor of Walter B. Brooke, filed his petition, insisting that the entire $11,500 should be paid into court by the purchaser, and that after deducting therefrom the mortgage debt, interest and costs, the whole balance, “ must according to the strict rules of law and equity, be distributed among the creditors of the said Walter B. Brooke, who have judgments bearing date subsequently to the date of the said mortgage, and not among those of his creditors who have judgments against him of dates anterior to the mortgage,” and “that the purchaser at the said trustee’s sale, must take the lands subject to, and encumbered by liens, which have been obtained against them previous to the date of said mortgage, and -which still remain unsatisfied; and that the said purchaser has no right to have any part of the sum of money, so as aforesaid given by him for said lands, appropriated to the payment of said judgments, which are elder than the mortgage.” Chew in his deposition states, that “ this deponent and the said Otho B. Beall, came to Upper Marlborough together for the purpose of consummating the contract, and after having arrived in town, the said Otho B. Beall consulted an attorney touching the title, after having done so, he, the said Beall, informed this deponent he could not take the land; that he had been advised, that the land was answerable for the debts of Walter B. Broolce, upon which judgments had been rendered, as well subsequently, as prior to the date of the mortgage to Lucy S. Brooke ; and that it was probable, if he should pay the whole purchase money to the trustee, they might swell the purchase money to an amount larger in the aggregate, than he had agreed to give for it. After consultation with Thomas G. Pratt, Esq. it was remarked to him, the said Beall, that the difficulty complained of, could be easily removed, that it would only be necessary for him, the said Beall, to pay off the oldest judgments against Walter B. Brooke, which were prior liens to the said mortgage, and take an assignment of them, which he, the said Otho B. Beall, could do independently of the trustee, or without dealing with him in the capacity of trustee in the payment of said judgments, as they were prior liens to those under which the trustee wTas directed to sell; that they did not amount to more than $4,000, and whenever the junior claimants and the trustee had settled the dispute which was about to ’ ensue, with regard to the application of the trust moriey, he, the said Beall, could then pay the balance of the purchase money to whoever might be entitled to receive it. After the suggestion of this course to be pursued, the said Otho B. Beall consented again to take the land. A difficulty then arose, as to whom the money due on the prior judgments should be paid. It was at first proposed, that the said Otho B. Beall should pay the said money over to the sheriff of Prince George’s county, as he then held in his hands the executions which had been issued upon the said judgments. It was then remarked, as this deponent thinks by Mr. Pratt, that he doubted whether the sheriff had authority to direct the said judgments to be entered for the use of the said Otho B. Beall. It was then remarked by this deponent, that Mr. Edwin M. Dorsey, would be the most suitable person to receive the said money, and make the assignments as he, the said Dorsey, as an attorney of Prince George’s county court, had the control of Mr. Johnson’s business, who represented, as their attorney, the creditors who held the said prior judgments against the said land. This proposition was agreed io by Mr. Beall, and but for this arrangement, this deponent is convinced, that he, the said Otho B. Beall, would not have paid one cent of the aforesaid prior judgments, to said Dorsey.” According to the proof of the .witness, Beall then definitely agreed to become the purchaser of the land, and on the same day, to wit, the 20th of September, 1830, as appears by exhibit No. 5, (filed by Beall, with his application in December, 1830, for the removal of Dorsey as trustee) Richard H. Brooke, the original purchaser, duly transferred his purchase to Beall. This deposition of Chew it has been urged, is so reasonable, so probable in itself, as to exclude every idea of mistake, or misapprehension as to the facts of which it speaks: — that the arrangement disclosed by the witness, was the true and only course that ought to have been suggested or thought of by any lawyer of skill or judgment in his profession. Is this position correct? ' The objection of Beall to take Brooke’s bargain off his hands was what ? That according to the advice of counsel, whom he had consulted upon the subject, he should in doing so, be obliged to pay the whole amount of the purchase money to satisfy the mortgage and subsequent judgments, and still hold the land subject to the prior judgments. To relieve him from this supposed dilemma was the object of the arrangement concerted, as it appears between Chew and Mr. Pratt a member of the bar. And how wTas it to be effected? By Beall’s immediately becoming the purchaser in Richard H. Brooke’s place, (which he did) and then paying off the prior judgments, and taking an assignment thereof to himself. How did this relieve him from the liability to which it was his determination not to subject himself? Should the county court, in deciding on Duvall’s petition have concurred in opinion with Beall’s counsel, that the purchaser took the land at his bid, subject to the prior judgments, would not Beall have been saddled with the very loss, the risk of which it -was the object of the arrangement, and his fixed resolution that he should not incur. Would it be any consolation to him to be told, after bringing into court the whole purchase money for distribution, between the mortgagee and subsequent judgment creditors, you have your assignment of the prior judgments ? Of what value would be the assignment of those judgments to Beall ? They would have been, if held by any body else, a lien upon his land, for which he had already paid the full value. In his hands they were utterly valueless; and yet they had cost him $4,000. Can it then be supposed, that any member of the profession, much less Mr. Pratt, would have given his sanction to such an arrangement, for such a purpose ? It is impossible. Mr. Chew, to whose elevated character the counsel on both sides have borne testimony, from lapse of time, has forgotten the details of this transaction, or through want of legal information never fully comprehended them. The more probable solution of these proceedings is, that Beall’s apprehensions about the rights of the subsequent judgment creditors, were removed by Mr. Pratt’s assurances to Chew, that it was impossible that the purchaser could take the land, otherwise than discharged from the incumbranees of the prior judgments; and that he then agreed to become the purchaser of the land, and pay a part of the purchase money to the trustee to prevent a sale by the sheriff, on the executions issued on the prior judgments. That to protect himself against the contingency, as to the final ratification of the sale, he was to exact from the trustee an engagement, that he wrould apply the. amount received to the satisfaction of the prior judgments, and cause them to be entered for his use. By this proceeding should not the sale be finally ratified, (and from some of its terms not being previously authorized by the decree, a doubt of its ratification might have existed) Beall could in no event be the loser. As strongly corroborating this view of the subject, see the testimony of Thos. G. Pratt. And this conclusion is furthermore strengthened by the succeeding portion of Chew’s deposition, which states, “ that veiy shortly after this, this deponent called upon the said Otho B. Beall, at his house, at the request of said Beall, when the said Otho B. Beall informed this deponent, that he had paid the said Dorsey the sum of $4,000, but that he had not applied the same as he the said Beall had directed him ; and that the said Dorsey had not assigned the said judgments to his, the said Beall’s use, as he had promised to do, for which purpose, he, the said Beall, said he had paid the said sum of $4,000 to Mr. Dorsey, not as trustee, but as attorney aforesaid. This deponent then asked the said Beall to show him Dorsey’s receipt for the money, and upon the production thereof it appeared that Dorsey had signed it as trustee. This deponent expressed some surprise that he, Beall, had taken such a receipt, inasmuch as he had not paid over the said $4,000 to Dorsey in the capacity of trustee, but as the attorney for the purpose aforesaid. To which the said Beall replied, that he did not think it material, and that it was an oversight in him in taking the receipt from him as trustee; that he had such unbounded confidence in Dorsey, that he did not think, that the taking the receipt from him as trustee at all material. This deponent then answered that he did not think it material, and further said, that it would have been a very little trouble for him the said Beall, to have seen the business done himself, and to have attended to the assignment of the aforesaid judgments.”

Now unless Chew has made a mistake in alleging, that but for this arrangement, “ this deponent is convinced that the said Otho B. Beall would not have paid one cent of the aforesaid prior judgments to said Dorsey,” how could it be immaterial both in the opinion of Chew and Beall, whether the money was paid to Dorsey as trustee or as attorney ? If Chew and Beall both believed that to be the only mode which Beall could adopt, to avoid the liability to loss wdiich he had determined not to encounter; how could they without the slightest alteration in the circumstances of the case to warrant a change of opinion, of a sudden conclude that it was wholly immaterial whether Dorsey gave a receipt for the money, as trustee or as attorney ? Had the arrangement been made in the manner, and for the purposes represented by Chew, instead of assuring Beall, that his total departure from the course agreed on was immaterial, he would have advised him forthwith to call on Dorsey, procure a proper receipt, to be taken from him as attorney of the prior creditors, and require him forthwith to enter the judgments for the use of Beall. His failure to give such advice, furnishes the strongest evidence for the belief, that his statements, no matter with' what purity of motive and conviction of their truth, he may have made them, are mistaken views of the matters in controversy in this case, arising from forgetfulness, or misapprehension as to the terms of the arrangement, the probability being, that the objection to the receipt was, not that it was given by Dorsey as trustee, instead of attorney; but that it did not in terms contain a stipulation from Dorsey, that he would apply the amount received to the payment of the prior judgments, and cause their assignment to Beall. And that Chew and Beall talking over the subject concluded that the sale would be ratified; that Beall could not suffer by the prior judgments standing open, having much more of the purchase money yet in his hands than would discharge them; and therefore the omission in the receipt to stipulate for their payment was by no means material.

The fact of BealPs having the prior judgments entered to his use, (if indeed there be any evidence of that fact) upon their payment by the second trustee, instead of being entered satisfied, does not oppose these views. Such an entry could not have been necessary at the time it was made to secure to Beall the protection, which according to the statements of Chew, it was his object to obtain, even if at the time the arrangement was adopted, it could have been available for that purpose; the county court having determined in October, 1830, that the purchase money for the land was the extent of his liability. In requiring the prior judgments to be entered for his use, when they were ultimately paid by the second trustee, it is difficult to assign to Beall any satisfactory motive. It may be, that ignorant of the legal consequences incident to the condition in which he was placed, he desired the entry in conformity to the original arrangement, for securing him an indemnity against the court’s refusal to ratify the sale; or he may have intended thereby, to be the better prepared to resist any attempt on the part of any subsequent incumbrancer, not a party to the present proceedings, seeking to redeem upon the payment of Lucy S. Brooke’s mortgage.

As confirmatory of the inaccuracy of Chew’s recollection, or of his misconception of the conversations between himself and Beall, in relation to the facts and circumstances contained in his deposition, see the testimony of Thos. Bruce, Rhoderick McGregor, and Thos. G. Pratt.

The testimony of John E. Berry, as to conversations between him and Beall, yields no confirmation to the history of the transaction as given by Chew, but is in collision with it in several important particulars, and strengthens our opinion, that Chew laboured under a mistake as to the designs of Beall. If the communications of' Beall to Berry are to be regarded as a detail of the entire arrangement under which the $4,000 were paid, it is wholly inconsistent with the evidence given by Chew, and bears upon its face its own refutation. By the terms of the sale made by the trustee, Beall had primarily, no right to pay off the prior judgments : he did so at his peril. Had he paid more thereon than was actually due: had the judgments been impeachable upon any legal or equitable grounds, the loss would have fallen upon him. It was the province of the trustee, not the purchaser, to disencumber the estate sold; and at the time the first payment -was made by Beall, every motive of prudence and interest forbade his paying off, and thereby discharging the senior judgments, without either taking an assignment thereof, or the receipt of the trustee for the amount paid. Prima facie it would otherwise have been an extinguishment of those judgment liens, and a letting in for their amount, the subsequent judgment creditors, thus defeating the object he designed to accomplish, and subjecting himself to the very responsibility he was endeavouring to evade. It is manifest therefore, either that Beall did not fully state his proceedings in relation to this payment, or that they were not understood, or have been forgotten by Berry. Looking to the common sense, and legal consequences of the transaction, as collected from the record before us, and applying them to the explication of Berry’s testimony, we must in reason and charity presume, that the statement of the witness, that as Beall’s attorney, Dorsey received the money, was an inference of fact drawn by Berry himself, from Beall’s informing him that he had paid the money to Dorsey, that he, (Dorsey) might pay off the prior judgments. It is an error into which he might very naturally have fallen; but is a fact which if true, would be an act of folly in Beall, to which the circumstances of the case give no colourable imputation. The deposition of Berry then furnishes no foundation on which to rest an impeachment of the verity of the answer of Beall.

But waiving the difficulties suggested in relation to this evidence, when we look to the answer of the appellee, the receipt of the trustee taken at the time the contested payment of $4,000 was made, and the testimony of Thomas G. Pratt, we cannot discover grounds for a momentary hesitation in affirming, with costs, in this court, and in the court of chancery, the order of the Chancellor dismissing the petition of the appellants.

ORDER AFFIRMED WITH COSTS.