Eastman v. McAlpin

By the Court Warner, Judge. The complainant in this case filed his bill for the purpose of setting aside a conveyance of certain real and personal estate, made by Philbrick to Eastman, on the ground such conveyance was fraudulent, according to the provisions of the act of 19th Dec. 1818. The complainant charges in his bill that Philbrick remained in possession of two of the negroes, and furniture after the sale, and occupied the house in Brown Ward, so soon as the same was sufficiently completed for that purpose. The complainant also charges, the property conveyed was held in trust for the benefit of the vendor, or persons appointed by him. The answers of the defendants admit the possession of Philbrick, but state, at the same time, he held such possession by rent and hire from Eastman, and the terms thereof. The answers positively deny all trust of any kind. On the trial of the cause in the Circuit Court, the presiding Judge charged the jury “that possession of the vendor, after the sale, was prima facie evidence of fraud; and unless explained, became conclusive : that the explanation of that possession, stated in the answers, was no evidence, because not responsive to the allegations, or interrogatories in the bill.” We think the court below erred in its charge to the jury, in stating the explanation in the answers of the defendants was no evidence, because not responsive to the allegations or interrogatories in the bill. There is no doubt as to the rule, when the defendant in his answer, insists by way of avoidance on any distinct fact, he must by evidence prove such fact, in order to make it available in his defence. But here, the complainant charges one of the defendants in possession of the property conveyed, as being prima facie evidence of fraud. The defendants respond, and say, true, he is in possession of the property, but holds the possession as the tenant of the vendee, paying him rent and hire therefor ; which rebuts the presumption of fraud. The defendants do not insist on any distinct fact by way of avoidance, but respond directly to the charge of being in possession, and explain how the vendor is in possession. The complainant contends, the defendants ought not to have the benefit of their explanation of the possession. Although he had interrogated them about it, they must tell part of the truth only ; or, if they do tell the whole truth in answer to his question, part only shall be received: so much only will be received, as will fix fraud upon them ; the explanation exculpating them must be rejected. We do not so understand the rule, as to exclude the explanation of the possession given by the defendants in this case ; the answers are responsive to the charge, that the vendor remained in possession of the property, explaining the nature of that possession : and not insisting .upon a distinct fact, by way of avoidance, with which they have not been charged or interrogated by the complainant. “The answer of the defendant is evidence for him, so far as it is responsive to the call in the 'bill for discovery, or connected necessarily with the responsive matter, or explanatory of it.” — Methodist Church of Cincinnati vs. Wood, 5th Hammond’s Rep. 284-5 ; Davis vs. Sperling, Russel and Mylne, 64 ; Lady Ormond vs. Hutchinson, 13th [171] Vesey, 53. We are of opinion the defendant’s answers ought to have been submitted to the jury for their consideration, and let them have determined what credit they were entitled to ; and that the court committed error, by entirely excluding that portion of them which explained the nature and character of the vendor’s possession of the property conveyed. The next ground of error assigned, is the refusal of the court below to give the instructions prayed for by defendant’s solicitor to the jury, that the conveyance of the property in question was not within the provisions of the act of 1818 ; but, on the contrary, the court did charge the conveyance by Philbriek to Eastman was within the provisions of that act. The act of 1818 affords a striking instance of inconsistent legislation, when we take into consideration the title of the act, the preamble thereto, and the enacting clause. It is said by those who profess to have been acquainted with its legislative history, the enacting clause was amended after its introduction into the legislature, without the title and preamble to the act having been amended, so as to conform thereto. How this may have been, we cannot say, as we have no judicial evidence of the fact now before us. We are to construe the act in accordance with established rules. By the enacting clause of the act, it is declared, “ That any person or persons, unable to pay his, her, or their debts, who shall, at any time hereafter, make any assignment or transfer of real or personal property, stock in trade, debts, dues or demands in trust, to any person or persons, in satisfaction or payment of any debt or demand, or in part thereof, for the use and benefit of his, her, or their creditor or creditors, or for the use and benefit of any other person or persons, by which any creditor of the said debtor shall or may be excluded from an equal share or portion of the estate so assigned or transferred, such assignment, transfer, deed, or conveyance, shall be void, and considered in law and equit}" as fraudulent against creditors. — Provided, nevertheless, that nothing contained in this act shall prevent any person or persons in debt from bona fide and absolutely selling, and disposing of any part, or the whole of his, her, or their estate, so the same be free from any trust for the benefit of the seller, or any person or persons appointed by him, her, or them.” The true meaning of a statute is generally and properly to be sought from the body of the act itself. — 1 Kent’s Com. 461. The great difficulty which has been felt in the minds of some in the construction of this statute, it is believed, has been in giving too much attention to the title and preamble, without carefully examining the enacting clause. The title of the act and the preamble are, strictly speaking, no parts of it. It is true they may assist in removing ambiguities where the intent is not plain, but where the words of the enacting clause are clear and positive, recourse must not be had to either of them. — 1 Kent’s Com. 460, 461. The United States vs. Fisher, 2 Crunch Rep. 358 ; Crespigny vs. Wittenour, 4 th Term Rep. 793. What conveyances does the enacting clause of the act declare shall be null and void, and fraudulent as against creditors ? Such conveyances only as shall be made by persons unable to pay their debts, in trust, <S;c. In order to make the conveyance void within ibo meaning of the statute, there musí bo a trust created for the benefit of the party making the conveyance, or for the benefit of some person appointed by him. This is manifest from the proviso in the act. In [172] order to remove all doubt as to the right of persons unable to pay their debts, to make a bona fide and absolute sale of their property, it is expressly declared: nothing contained in this act shall prevent any person or persons in debt, from bona fide and absolute selling and disposing of any part or the whole of his, her, or their estate, so the same be free from any trust for the benefit of the seller, or any person appointed by him, her or them. It was against assignments, transfers, and conveyances made by persons unable to pay their debts, in trust for the benefit of the seller, whether secret or otherwise, this statute was directed ; not against those who were unable to pay their debts, but who made an absolute and bona fide sale of their estate. Such, it is believed, has been the contemporaneous construction given to the statute by our courts; there may have been some exceptions, it is true, but we speak of the general current of decisions. In June, 1834, the Judges of the Superior Courts held a convention at Milledgeville for the purpose of discussing and settling, so far as they could do, under our then imperfect system, such difficult and doubtful questions as the judges of their respective circuits might think proper to present. Judge Crawford, from the Northern circuit, presented this same question, growing out of the assignment made by Sims, Williams and Woolsey, of Augusta, to secure certain favorite creditors. All the judges of the State at that time were present, and concurred in the opinion (with one exception) that a debtor in failing circumstances could make an absolute and bona fide sale of his property to a creditor, provided there was no trust created for the benefit of the seller. The Legislature appear to have been satisfied with the. construction given by the courts to this statute, inasmuch as no attempt has been made to control such construction by any legislative action. Indeed, we think such a construction is best adapted to the condition and habits of our people. If persons in debt were prohibited from making an absolute and bona fide sale of their property to a creditor or other person, it would oftentimes greatly embarrass, if not wholly ruin them. We are, therefore, of the opinion, a debtor in insolvent circumstances may make an absolute and bona fide sale of his property to a creditor in payment of a bona fide preexisting debt, or to any other person, without such sale being obnoxious to the provisions of the act of 1818, so there is no trust reserved for the benefit of the seller. It appears, from the record in this case, the sale from Philbrick to Eastman was absolute, and the purchase-money proved to have been paid by Eastman. There was no evidence of any trust reserved for the benefit of Philbrick, within the intent and meaning of the statute of 1818. It was insisted on the argument that the stipulation between Eastman and Philbrick, that the debt due Stone’s children, and the debt due Mrs. Abbott, should be paid out of the purchase-money by Eastman, was evidence of a trust within the meaning of the act. These debts were admitted to be bona fide, and due the parties by Philbrick. Instead of paying the money into Philbrick’s hands, for him to take up his notes due Stone’s children and Mrs. Abbott, Eastman pays so much of the purchase-money as is requirnd to take up the notes, to the parties holding them, takes them up, and delivers them to Philbrick in payment of the property purchased. We see nothing in this arrangement affording the least evidence/of a trust, or calculated to impeach the fairness of the transaction. We are, therefore, unanimously of the opinion the [173] court should have given to the jury the instructions prayed for by the defendant’s solicitors, and that it committed error in refusing to do so, and in giving the contrary instruction. Let the judgment of the court below be reversed, and a new trial granted.