DeVendal v. Malone's Executors

CHILTON, C. J. — The two cases having been consolidated by the consent of the respective counsel, and the bill of De-Vendal, by their agreement, being taken as a cross bill and an answer, we must regard it, when considered as an answer, in the same light as we would an answer formally put in. But allowing the appellees the benefit of thus considering the cross bill, we think, that after applying to it the most stringent rules, it puts the complainants in the original bill upon proof of the consideration of their mortgage. The answer is, that these demands were unreal, — fictitious,—and that the mortgage to Malone was designed to delay, hinder and defraud creditors. On the other hand, Malone admits the demands secured by the mortgage to Robertson & Co. Under such circumstances, it was incumbent oh the executdrs of [277] Malone to prove the bona fides and existence of the demands which constituted the consideration of the mortgage, and this was not done by the more production of the notes specified in the mortgage. It has been several times held, that, as against a creditor, the consideration of a note which is impeached for fraud is not shown by the note itself, nor by the recitals in the deed of conveyance. These are but the written admissions of the debtor, which may be manufactured by him in furtherance of a contemplated fraud. — Nolen & Thompson v. The Heirs of Gwynn, 16 Ala. Rep. 725; McGintry et al. v. Reeves, 10 ib. 137; Pennington v. Woodall, 17 ib. 686; Falkner v. Leith & Jones, 15 ib. 9. We would not be understood as intimating that any attempt to make such evidence exists in the case before us ; we allude to it merely as showing that the law cuts off the parties from such temptations, by giving to admissions of this character no weight except as sustained by proof aliunde of a valid consideration. Applying the principle to the case before us, we feel constrained to hold, that the evidence is not sufficient to sustain the demand for money paid as surety of Leitman & Bingham by Malone. The proof fails to show that the notes last endorsed by him and paid had any connection with the notes embraced in the mortgage; and. although it may be quite plausible to say that Malone would not have endorsed a demand creating a new liability upon him for Leitman & Bingham, who had been discharged as bankrupts in 1842, and although the testimony of Greene shows that some notes of Leitman & Bingham, with Malone as endorser, were discounted in bank between the date of the notes described in the mortgage and the lltli December, 1841, when the note for $2,313 was executed, it fails to show any such demands due to the Bank as those described in the mortgage, nor does the Bank record furnish any evidence of such notos having belonged to it. This proof, therefore, utterly fails to show any connection between the note paid by Malone and those which are set out as the consideration of the mortgage. Neither does the deposition of Leitman materially aid the complainant. He knows that the Bank held a note of Leit-man & Bingham, which was payable to, and endorsed by, Malone; and to the best of his recollection, the note was [278] given upon renewal of notes made by the same parties, but he is finable .to state the amounts or dates of any of the notes, or who paid the last named note ; he presumes that Malone did. This proof is insufficient to establish the fact charged in the bill, that the $2,373 note was given upon a renewal of the demands due to the Bank, as shown in the mortgage, especially in opposition to the denial of the answer. As to the Toulmin mortgage, the bona Jides of the demands secured to be paid by it was not put in issue by the answer, or cross bill, and we think the proof as to that is sufficient. The objection to it, that it was never recorded, could only avail in favor of the subsequent mortgagee, if he purchased bona fide, in ignorance of it; and the rule requires that a subsequent purchaser or mortgagee, who seeks to shelter himself under this defence, must explicitly deny such notice, whether it be charged in the bill or not. — Story’s Equity PI. § 662;. Gallatin v. Cunningham, 8 Cow. R. 361-374; Prec. in Chy. 226; 2 Pr. Wins. 491; 1 Johns. Ch. R. 302; 3 ib. 345. The want of notice is not relied upon in the pleadings, and it follows that the chancellor very properly held this mortgage to be a charge upon the property. As to the $800 note, there is no evidence of its consideration, and under the rule first mentioned, it was properly rejected. In regard to the rents, we are not prepared to say that the evidence shows that more should have been charged against Malone than the register charged against him. As, however, the case must go back to the register, we would not be considered as expressing an authoritative opinion upon this point. As to the competency of Leitman as a witness: The order allowing his examination reserves no objection to be taken to his proof on the trial. This may have resulted from the fact, that the complainant had made him his witness. Be this as it may, we do not think it should b.e allowed the complainant, after having examined Mm in chief, and twice upon cross interrogatories, without raising any objection on the ground of interest, to spring that objection for the first time upon the trial. The obvious tendency of such practice would be, to take parties who were reposing upon such testimony by surprise. [279] For the errors'abovo noticed, the decree of the chancellor must be reversed, and the cause remanded, to be referred back to the register to take an account in accordance with the views contained in this opinion.