Colgin v. Redman

LIGON, J. The bill in this case was exhibited by certain creditors of Henry A. Eowlkes, in behalf of themselves and such other creditors of said Eowlkes as might join in the suit, and contribute to its expenses, against said Eowlkes, and — 656 — John Colgin and Edward C. Mosby, wbo were named trustees in a deed of trust made by Eowlkes for the benefit of his creditors. By the terms of the deed the creditors are divided into classes, and are required to assent to the provisions in their favor within six months, or forfeit their priority. The complainants in the bill, and Colgin, the defendant, who is also a creditor, are put in the first class, and the questions raised by the errors assigned and insisted on, except objections to testimony and matters of practice, relate solely to the bona fides of Redman’s debt, and his assent to the provisions of the deed in his favor, both of which are controverted in the answer of Colgin. Before I consider these points, I will proceed to dispose of the preliminary questions, made and decided at the hearing. 1. It appears that a motion was made, a* the hearing, to dismiss the bill for the want of equity, because it was not alleged in it that the complainants signified their assent to the provisions made in the deed of trust in their favor, in the time prescribed by the deed itself, which is made a part of the bill. An allegation of this kind I esteem indispensable to the equity of this bill, for it is filed solely for the purpose of settling the affairs of the trust, and distributing the funds arising under it. Before the complainants can be heard, they must show in their bill that they have complied with the terms of the deed, by which alone they can become entitled to the preference they claim by their bill. This they have sufficiently done; for the bill, after making the deed a part of it, and reciting all its important provisions, contains the following allegation; “Tour orators further say, that they have consented to the provisions of said deed, in which they were secured, or intended to be secured, in the first class,” &c. This cannot be understood in any other sense than as alleging that they had assented to the deed within the time prescribed by its terms. The allegations in a bill must be certain to a common intent; and in order to render any of them so, the court will look to others on the same subject, standing in intimate and close connection with it; and especially so, when, by detaching it from the balance, it would be useless and unnecessary, but taken in connection with them, it becomes pertinent, necessary, and proper. The — 657 — rule wbicb requires doubtful or equivocal allegations to be taken most strongly against the pleader, does not authorize tbe court to wrest an allegation from its context, and by this method of isolation to render it insufficient and uncertain. 2. It is also urged, that, inasmuch as the complainants, Anderson and Bruce, failed to prove their demands against the trust fund, and consequently consented to a dismissal of the bill as to them, that the bill should have been dismissed as to all. The rule which requires the dismissal of the whole bill, if one, or more, of several co-complainants fail to make out their case, has never, to my knowledge, been applied with any stringency to creditors’ bills; and unless a misjoinder of such complainants will affect the propriety of the decree, the objection will not be allowed to prevail in any case, when taken for the first time at the hearing. Newhouse et al. v. Miles, 9 Ala. Rep. 460; Watertown v. Connor, 4 Paige, 510; Story’s Eq. Plead. 544; Erwin v. Ferguson, 5 Ala. Rep. 158. On this subject, Mr. Justice Story, in his work on Equity Pleading, uses the following language; “If the court proceeds to a hearing on the merits, the misjoinder will be disregarded, at least if it does not materially affect the propriety of the decree.” Story Eq. PL 417. Even if the objection of misjoinder of complainants were allowable, in cases like the present, when the bill is both in form and substance a creditors’ bill, to which all who claim to be creditors have a right to become parties, though the interest of each, except as to the fund sought to be charged, is separate from, and independent of, that of all others, still, it should be interposed by way of demurrer. But the cases are exceedingly rare, if they exist at all, in which demurrers to creditors’ bills will be sustained, for a misjoinder of claimants. There is rarely to be found a creditors’ bill, with many complainants, in which some of them have not failed to make out their case, and consequently have been compelled to submit to a dismissal of the bill as to them; but this has never, in any case which has come under my observation, been allowed to affect the rights of those who established their demands to a decree for the sums due thereon. 3. A motion was also made, at the hearing, to suppress the depositions of Henry A. and Phineas Fowlkes, upon the — 658 — grounds, as to tbe former, that be was a party to tbe bill— was interested in tbe event of tbe suit, and because tbe deposition was taken before George L. Baine, wbo was interested in tbe event of tbe suit, and security on a debt of the first class secured by tbe deed. Henry A Fowlkes is tbe maker of tbe deed of assignment, and is shown by tbe proof to be a discharged bankrupt. He can receive nothing under tbe deed, unless there be a residuum after paying all tbe debts secured by it, and tbe discharge ©f all debts proved against him on bis bankruptcy. He was examined by tbe complainant Bedman, to prove tbe consideration of bis claim, and bis (Redman’s) assent to tbe terms of tbe deed within six months after its execution. -While it is conceded that a bankrupt is not a competent witness to testify for tbe assignee for tbe purpose of increasing tbe fund in bis bands, yet it is clear, both on principle and authority, that if bis testimony tends to decrease that fund, be will be regarded as swearing against bis own interest, and is competent. Tbe mere fact that a witness is a party to a suit in Chancery, is no sufficient reason to. exclude or suppress bis testimony. If be has no interest in that part of tbe litigation about which be is called to testify; or, if being interested, be is examined as to matters which militate against that interest, as is tbe case here, be is perfectly competent. Tbe exception taken to tbe deposition, because it was taken before Baine as commissioner, if it could be allowed to prevail at all, comes too late when taken for tbe first time at tbe bearing. Beattie v. Abercrombie, 18 Ala. Rep. 9. It is one of that class of exceptions which should have been taken, and reserved, at tbe time of filing tbe cross-interrogatories to tbe witnesses. A party will not be allowed to go on, without objection, to examine a witness before a commissioner, and when be finds such examination to result disastrously to bis interest, to come at tbe bearing, and object to tbe competency of tbe commissioner to act as such. Tbe motion to suppress tbe deposition for this cause, was rightly disallowed for another reason. It no where appears, either by proof or admission, that tbe George L. Baine wbo acted as commissioner in taking tbe deposition of tbe witness, is tbe same person wbo is security on one of tbe notes provided for in — 659 — the deed of trust, and the bare identity of name will not, of itself, establish that fact. It is insisted also, that the deposition of this witness should be suppressed, because there was no affidavit made of his want of interest in the subject-matter of the suit about which he was testifying, before the order was made under which his examination was had. I know of no rule which requires such an affidavit; orders to examine a defendant, in behalf of the complainant, are made as matters of course, reserving the question of his competency to be made at the hearing. 2 Danl. Chy. Prac. 1044. But if there be any irregularity in the terms of such an order, the cross-examining party must make his objection at the time of filing his cross-interrogatories; or, refusing to cross-examine, he may object, upon notice, after publication, but not at the hearing of the cause, except by consent. All objections for mere irregularities come too late, when made, for the first time, at the hearing. Beattie, adm’r, v. Abercrombie et al., supra. The same authority disposes of the objection that the witness failed to answer fully some of the cross-interrogatories propounded to him. Eor these reasons, we are satisfied the Chancellor did not err in refusing the motion to suppress the deposition of Henry A. Fowlkes. The objections to the deposition of Phineas Fowlkes were two, first; that he was interested in the event of suit; and secondly, that his testimony was taken before Baine, an interested party. This witness was security to one of the notes provided for in the deed in the same class with that of the complainant Bedman, at whose instance he was examined. His interest was antagonistic to that of Bedman, and consequently when he deposes in favor of the latter, he swears against his own interest, and is competent. The second ground of objection is the same as that urged against the admissibility of the deposition of Henry A. Fowlkes, and for the reasons given in this opinion for disallowing it in that case, it must be refused in this. . It appears that portions of these and other depositions were ruled out by the Chancellor. The witnesses, in answering — 660 — several interrogatories, state wbat Bedman bad told them, in tbe absence of tbe other parties in interest. This was illegal testimony, and was rightly ruled out and disregarded by tbe Chancellor. 4. Tbe proof of Henry A. and Phineas Fowlkes clearly establishes tbe bona fides of tbe debt of Bedman, secured by tbe deed, which bad been impeached by tbe answer of Col-gin. Tbe testimony of tbe witness Allen, who deposes that Bedman was poor and unable, in tbe opinion of tbe witness, to advance so large an amount of money to Fowlkes, is, at most, but negative in its character, and cannot break tbe force of tbe positive testimony of tbe Messrs. Fowlkes. Again: several other witnesses prove facts which go far to show that Allen was mistaken, as to Bedman’s pecuniary condition. Upon tbe proof, we think, tbe bona fides of Bedman’s debt is fully made out. Henry Fowlkes states distinctly and unequivocally, that Bedman advanced him money at different times, and in large amounts, which be bad never repaid, and that be left in bis (Fowlkes’) bands a large sum of money to be remitted to Yirginia, which be did not remit, but used. Phineas Fowlkes proves that Bedman was engaged in negro trading; bad several thousand dollars of bis own, and control of large amounts of tbe funds of others. These witnesses bad opportunities of knowing bis true condition, far superior to those of any others who have been examined, and as they stand without direct impeachment, their truth cannot be successfully called in question. 5. Tbe assent of Bedman to tbe provisions of tbe deed is proved by Henry A. Fowlkes and tbe witness Steele. Tbe former says, that Bedman was present when it was written, and approved wbat was done; and tbe latter deposes, that be went with Bedman to one of tbe trustees, to whom Bedman exhibited tbe evidence of bis debt, and distinctly assented to tbe deed. This was shortly after tbe deed was written, and before tbe expiration of six months. 6. Tbe only remaining question relates to tbe construction of tbe deed. This divides tbe creditors of Fowlkes into three classes, but as tbe money arising from tbe trust property is insufficient to pay off and discharge those of tbe first class, — 661 — it is needless for us to examine its provisions as to tbe second and third. The language in relation to the payment of the debts in the deed is this: “ They (the trustees) shall pay and satisfy the following debts of the party of the first part, in the following order, to-wit: first class,” &c. Here follows a large class of debts composing this class, in which is included that of Redman, and the paragraph concludes: “ The above demands compose the first class of creditors, being principally endorsers, securities, and those who advanced money to the said party of the first part, and all are to be first satisfied and discharged in full.” The deed then proceeds: “ The second class comprises the following claims,” &c. It is also provided that these “shall be paid ratably and proportionably, after the entire discharge of the debts in the class first enumerated.” The deed then devotes any residuum after the payment of the debts of the first and second classes to the payment of the remaining creditors of the grantor. The trustee, Colgin, insists, in his answer, that the term “order,” as employed in the deed, was intended to be applied to the position assigned to the debts as they are enumerated in the first class; so that those first named should be first paid, and if there was a deficiency of funds, those whose claims were not reached by this method of payment should receive nothing. It is clear to my mind, that when the deéd was drawn, both the grantor and Oolgin acted under the belief that there would be more than funds enough to pay in full the claims of all the creditors of the first class; and it is equally clear, that they thought there would not be enough to pay in full the debts named in the second class. The idea, then, of a preference among the first class of creditors never for a moment presented itself to them; when a deficiency was apprehended, as in the case of the second class of creditors, and a desire to prefer one creditor over another existed with Fowlkes, the language employed by the draftsman gives expression to this desire in the most unambiguous terms, for the deed provides that two of the claims enumerated in that class shall be paid in full, before payment should be made on the remainder, and then that the funds on hand should “be paid ratably and proportionably ” to the other claims of this class. — 662 — Our construction of tbe deed is, that tbe term “order,” as employed by tbe grantor, was intended to apply to tbe classes mentioned in tbe deed, and not to tbe creditors enumerated in tbe first class'; so that, as tbe funds derived from tbe property are insufficient to pay all tbe debts enumerated in tbe first class, they must be divided ratably among sucb as have assented to tbe deed. Sucb, upon tbe several points considered, was tbe opinion of tbe Chancellor, and bis decree, being in conformity to it, must be affirmed.