Lee ex rel. Lee v. Newell

Mr. Justice Trustees: delivered the opinion of the court, November 10th, 1884. On May 7th, 1874, Lee gave a bond, secured by mortgage,'for $7,000 which apparently remained unsatisfied till December 31st, 1880. At the date of the mortgage Lee held Edmond’s note of May 28th, 1866, for $321, and seven days after its date Edmonds gave Lee five notes, each for $1,000. The notes are under seal, and the plaintiff claims to recover on all of them in this action. The plea admits the evidence of indebtedness and avers payment. Between the date of the last five notes and the death of Edmonds, he and Lee had. various business transactions, but it is neither alleged nor proved that if Lee gave the notes to his wife, the gift was intended to defraud Edmonds, or could operate as a fraud upon him. There was nothing at any time, so far as concerned Edmonds, to prevent the gift. If made, his security of the mortgage, bis right to defalk any debt he held against Lee, and his right to pay Lee, until knowledge of the transfer, remained unaffected : Rider v. Johnson, 20 Pa. St. 190 ; Thompson v. Mc-Clelland, 29 Id., 475; Filbert v. Hawk, 8 Watts 443. If there was no evidence of a gift of the notes by Lee to his wife, the naming her as a use party was of no consequence to the defendants. In such case the cause ought to have been tried, and likely would have been, as if lier name were omitted. The [290] defendants proved the declarations of Mrs. Lee made in absence of her husband, in 1866 or 1867, respecting their indebtedness to Edmonds. That testimony could not have been offered and received on any other principle than that she was the owner of the notes, or that there was some evidence of her ownership. The court submitted the evidence tending to show that Mrs. Lee owned the notes, and that Edmonds had knowledge of the transfer. If they were transferred to her it was a material question when notice thereof was given to Edmonds. Before he had knowledge of the transfer he would deal and settle with Lee respecting the notes as if Lee owned them; and their declarations about indebtedness between them might be understood as referring to other things than the notes owned by Lee’s wife. Certainly it would be an important fact to keep in view in making proper inferences from their acts and conversation. It is immaterial what consideration induced the transfer. Whether Mrs. Lee paid the full amount in money inherited by her, or received' the notes as a gift, she took them subject to legal and equitable defences, same in one case as the other. It made no difference to Edmonds whether Lee sold or gave her the notes. After he knew they had become her property he could not make new arrangements with Lee to her prejudice; nor. could he satisfy them by a settlement with Lee, unless the settlement was founded on matters that would be a defence in an action on the notes — a defence existing before and at the time he obtained knowledge of her title. In answer to the defendants’ second point the learned judge of the common pleas instructed the jury fully and correctly respecting the burden upon a wife to establish her claim to money or property in a contest with her husband’s creditors. He also told them that a husband has the right to make a gift to his wife, if he has no creditors, or has ample left to pay his debts so no one will be injured. All that was inapplicable to this case, but it was not harmless. The jury must have understood that it had something to do with the case before them. They might well have inferred that if Lee had creditors, other than Edmonds, that the transfer was a fraud as to those creditors and therefore void as to Edmonds. There was no testimony warranting them to consider the gift as affecting Lee’s creditors. This issue is not with a creditor. The suit is against a debtor who alleges payment of the debt. If it be true that there was an understanding between Lee and Edmonds that the notes should be satisfied and paid by the mortgage debt, his right to enforce it rests on other principles than [291] those established for protection of a man’s creditors against fraudulent claims by members of his family. The instructions in response to the defendants’ second point directly led to affirmauce of their third, namely, there being no proof that the wife purchased the notes in suit, and paid for them out of her separate estate, tlie verdict should be for defendants, if Edmonds settled and paid the notes either by applying them to the payment of a mortgage he held against Lee, or by any other settlement between the parties. There was no pretence of a purchase, the plaintiff claimed a gift. It was as lawful for Lee to pass the title to tlie notes by gift to bis wife, as for him, upon good consideration, to transfer them to a stranger. After knowledge of sucli gift by Edmonds, as already remarked, he could not avail a defence wittingly made up by himself and Lee in violation of her rights. The plaintiff’s sixth point, — “ If Jefferson T. Lee indorsed and delivered, as a gift, the notes in question to his wife, as her separate property, and Jacob Edmonds knew it, any declarations or acts of J. T. Lee after such delivery and knowledge of Edmonds, In the absence of Mrs. Melissa Lee, should be disregarded by the jury in making up their verdict,” was answered as follows: “If the husband indorsed these notes over to his wife as a gift with Jacob Edmonds’ knowledge and consent, the result stated in the point would follow, but the jury must find this from all the facts in the ease; and as further explained by defendants’ points and answers thereto, we answer tliis point in the affirmative.” Perhaps the jury could detect something in that point that really was affirmed. Edmonds’ consent to the gift was unnecessary, unless for the purpose of barring his then existing defences and the proposition involved no such bar; and the explanation contained in the defendants’ second and third points and the answers thereto, was that unless Mrs. Lee paid for the notes out of her separate estate, any settlement of them by Lee and Edmonds would entitle the defendants to a verdict. The fourteenth, fifteenth and sixteenth assignments of error must be sustained. It was permitted the defendants to give in evidence the exemplification of tlie proceedings in bankruptcy in tlie matter of Jefferson T. Lee. Testimony was admitted on part of the plaintiff tending to show that all along Lee had continued in the possession and enjoyment of his property notwithstanding that proceeding. After the beginning of this suit the assignee reeonveyed all tlie property to Lee, and we think that deed was admissible in evidence. It is slight evidence, yet as the end of the proceeding introduced by the plaintiff, it should not have been rejected. [292] There are numerous assignments of error to the admission of testimony of the declarations and admissions of Lee, made in the' absence of Mrs. Lee and, as alleged, after she had acquired title to the notes. It was a matter in dispute whether there was a gift, and if so when it-was made and when it came to the knowledge of Edmonds. Hence, the acts and declarations of Lee were admissible, as if there were no use party, and their weight and consideration depended much upon whether the jury found the fact of the alleged gift, and if so, when it was made and when it came to Edmonds’ knowledge. The explanatory remarks respecting the plaintiff’s first point are free of error. A delay of seven or eight years before bringing suit generally is slight evidence of payment, in some circumstances it would be stronger than in others, and always where it is submitted to the jury to infer payment from facts and circumstances, the weight to be given to delay or promptness in bringing the suit, is for them to determine. Nor can the eleventh assignment be sustained. The plaintiff contended there was no evidence of a settlement, and therefore it was error to permit the jury to infer payment from a settlement. Wilson testifies that late in the fall of 1880, he met Lee and Edmonds, and in the conversation, Edmonds remarked, “that he had fixed that mortgage against Lee that day, and that he didn’t owe Lee anything now, and that Lee didn’t owe him anything, and that Lee said: ‘ That’s soor something to that effect.” Divens says that in the spring of 1878 he settled his own accounts with Lee and then Lee told him that the day before he had settled with Edmonds. There was other evidence tending to show a settlement which need not now be noted. The whole was sufficient to submit to the jury. We deem it unnecessary to remark any other assignments, which are not well taken. Judgment reversed and venire facias de novo awarded.