McLaughlin v. Bank of Potomac

48 U.S. 220, 12 L. Ed. 675, 7 How. 220, 1849 U.S. LEXIS 344
CourtSupreme Court of the United States
DecidedJanuary 11, 1849
StatusPublished
Cited by34 cases

This text of 48 U.S. 220 (McLaughlin v. Bank of Potomac) is published on Counsel Stack Legal Research, covering Supreme Court of the United States primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
McLaughlin v. Bank of Potomac, 48 U.S. 220, 12 L. Ed. 675, 7 How. 220, 1849 U.S. LEXIS 344 (1849).

Opinion

Mr. Justice WOODBURY

delivered the opinion of the court.

(He first gave a synopsis of the bill and answers, and then, after some reference to the evidence, proceeded as follows.)

A preliminary point to be considered in this case is in respect to the exceptions made at the trial by a jury of the issue at law, sent from the court of chancery, or the equity side of the Circuit Court of the United States. On the..return of that issue to the equity side of the court, exceptions to the rulings were not made, or renewed against the correctness of the finding of the verdict, and consequently no opinion on them has ever been rendered by the court sitting in chancery. It is quite clear, then, that they are not before us on this appeal, which is only from a decree on the equity side of that CQurt.

We wish it to be distinctly understood, as a matter of practice in like cases, that this court cannot express any opinion on matters ruled in any other court, or side of the court, than that appealed from ; and if it be necessary-to go into other courts to get verdicts or decisions on any portion of the case in its progress below, any objections to rulings on the pointp arising in .those trials or decisions must be presented for revision to the court rvhich orders the issue, and be acted upon there, if we are expected'to take cognizance of them here. Brockett v. Brockett, 3 How. 691; Van Ness v. Van Ness, 6 How. 62; Mayhew. v. Soper, 10 Gill & Johns. 372. Such, too, is substantially *228 the doctrine in England. 2 Daniell, Ch. Pr. 746; Bootle v. Blundell, 19 Ves. 500.

It is. next objected, that there was an error in the court in ordering such an issue to be tried by a jury, as it did in the present case. But we are not satisfied that, in referring the question of fraud in the conveyances to a jury for their verdict to aid the court in its inquiries, any thing improper was submitted. It did not, as has been contended, refer a question of law only. Fraud is often, as here, a mixed question of law and fact. Seward v. Jackson, 8 Cow. 406, 439; Brogden v. Walker’s Executor, 2 Har. & Johns. 291. And it might be very useful to have the view's of a jury on it, taking care to- instruct them concerning the law, and leaving to their exclusive consideration, as was probably done here, merely the facts as connected with that law. Such feigned issues are not for the assistance of parties so much .as of the court. 2 Daniell, Ch. Pr. 730. And though- they may not always be well made up, yet, as the court are influenced by the finding or not, as seems to it’ proper (19 Ves. 500; Allen v. Blunt, 3 Story, 746), it is very rare that ordering such a .1 issue can' be deemed a ground of error. It may, however, be conceded, that, if such an issue be one of mere law, or idle, or impertinent, it is erroneous. 2 Daniell, Ch. Pr. 315, 420, 730; Nicol v. Vaughan, 5 Bligh, 540 — 545; 3 Ves. & Beam. 43.- Disregarding, then, those exceptions made in the trial of this feigned issue, as not being legally before us, and overruling the objection to the propriety of the issue itself, the finding of the -jury, and the opinion of the court sitting in chancery on that part of vthe case relating to the fraudulent conveyances, would seem to be correct. At least, this court appears bound to consider it sp, prima facie; and we see nothing in the evidence itself, if reconsidered here, which would show the weight of it not to accord with their results. 2 Rand. 398; Hoye v. Penn, 1 Bland, Ch. 28; Kipp v. Hanna, 2 Bland, 26; 2 Har. & Johns. 292.

Those results are, that all the deeds except the first- one were fraudulent against creditors. -The next inquiry is, whether the plaintiffs can legally be considered creditors at the time these deeds were executed. It is true, there must usually-be a debt preexisting. Sexton v. Wheaton, 8 Wheat. 229. In our view, a preexisting debt by a note, which was only renewed after-wards, with the same indorser, continued to be the same preexisting debt for this purpose as it stood originally, both as to the maker and indorser. They both regarded it virtually as the sanie, as no new consideration ever arose between the parties. Especially on the equity side of this court, and of the Circuit Court below, where the question arises, such a case *229 ought to be regarded as much within the mischief of the statutes against fraudulent conveyances as if the action leading to judgment against the administrator had been on the original' indorsement of the original note.

But further, it is objected that the debt here, at the time of the conveyances, was not absolute, as it should be in order to predicate fraud concerning it. But a contingent debt, likely to become absolute, and which afterwards does become absolute, is, both on principle and precedent, enough to furnish a motive to make a fraudulent conveyance to hinder or avoid its eventual payment. And’ this may be presumed to have been done here, provided circumstances exist indicative of fraud. King v. Thompson, 9 Pet. 220; Heighe v. Farmers’ Bank, 5 Har. & Johns. 68. Such circumstances must exist; and when the liability is contingent^ liké that of a warrantor or indorser, the conveyance cannot be considered as per se fraudulent. Seward v. Jackson, 8 Cow. 406, 439. But all the attendant facts here were scrutinized, and the inference of fraud seems to have been fairly deduced from the whole. 5 Gill & Johns. 633.

There is another objection to a recovery by this bill in equity, because the original debtor, Sheehy, had made a conveyance in trust to Lee for the indemnity of Edward McLaughlin, and it is argued that the plaintiffs should' have resorted to that rather than to a suit against the administrator of Edward McLaughlin. But where the maker ánd indorser have-both had their liability fixed oh a note, an action will lie against either. Here both had become liable, else the indorser had not,, for the latter is never liable unless the maker is also; and that' the indorser had here become liable is to be presumed strongly from the actual recovery against-his administrator.

The next objection is, that the judgment against the administrator of the indorser, the only evidence of a debt offered here, is no. evidence against the surety of the administrator, or against a fraudulent grantee- of the intestate debtor,-as is Bridget McLaughlin. But we think. otherwise. The administrator and his ■ intestate are privies, and the former is liable after one recovery against the goods in his hands, and another against-himself, suggesting a devastavit on a return of nulla bona.. 2 Brock. 213, 214.

If the administrator, then, in such case, be estopped, as he is, to deny the indebtedness of the debtor whom he represents,, so must be his surety, prima facie at least. 1 Brock. 136, 268; 4 Johns. Ch. 620; 2 Rand. 398. So in a bill in chancery, charging, like this, fraud in the administrator and a grantee, we think that such a judgment, till impeached, is good against the fraudulent grantee. Birely v. Staley, 5 Grill & Johns.

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Bluebook (online)
48 U.S. 220, 12 L. Ed. 675, 7 How. 220, 1849 U.S. LEXIS 344, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mclaughlin-v-bank-of-potomac-scotus-1849.