Ashmead v. Colby

Hinman, J. The first question is, whether the suit will abate in consequence of the death of Abraham Colby, his administrator not having been made a party. It is not necessary in this case to consider what would have been the effect of not bringing in, by a supplemental bill or otherwise, his representatives, if this objection had not been expressly waived by the conduct of the defendants after they had knowledge of such death. No doubt, as a general rule, all parties in interest ought in equity to be made parties to the suit, but one of the well established exceptions to this rule is said to be founded upon the impracticability of making the new or necessary parties, and getting them before the court, which is also said to occur when such new parties are without the jurisdiction of the court, and consequently can not be served by its process. Now whether the fact that Abraham Colby died without the jurisdiction, where his administrator also resides, and who was appointed such administrator by a foreign probate court, connected also with the fact that it does not appear that he left any property within the jurisdiction of this state, to administer which an administrator could have been here appointed, would have been a sufficient answer to this objection, had it been insisted upon at or before the hearing, we will not now determine; because we are satisfied that the going to trial without taking any exception on this ground, but on the contrary expressly waiving the objection, ought now to preclude the other defendants from objecting to such a decree against them as the facts found by the committee seem to call for. Our decisions on this point seem to be conclusive. Nash v. Smith, 6 Conn., 421. New London Bank v. Lee, 11 id., 112. Pond v. Clark, 24 id., 383. As to the declarations, acts and admissions of Abraham Colby, made for the purpose of accomplishing the common objects of the conspiracy and combination between him and the defendants, we do not now understand that any exception to the ruling of the committee is insisted upon. But the defendants claim that all his declarations, made after the sale of the land was accomplished, are inadmissible. The — 309 — court finds that most of the testimony relating to the acts, declarations and representations of the said Abraham, was admitted upon the ground that the committee first found a combination to have existed between the said Abraham and the other respondents, and they admitted said acts, representations and admissions as having been made and done in pursuance thereof and in order to carry it into, effect. It is found however that a part of this testimony was received on the ground that the said Abraham, up to the time of his death, continued to be jointly interested with the other defendants in the notes given for the land and which are sought to be canceled in this suit, and in the subject matter of the suit itself. The respondents claim that this fact is incorrectly found by the court, as appears, it is said, by the record. But we are not referred to any part of the record where this appears, and we have discovered nothing which is inconsistent with the finding. We do not however rely upon this, because it appears from the remonstrance that the testimony of the witnesses on this point, as well as their testimony to acts done and declarations made in order to accomplish the fraud,' was all objected to together, without making any distinction as to the declarations before and after the fraud was accomplished ; and we suppose it to be very well settled that if any part of the testimony objected to in this way is admissible, there can be no error in admitting the whole, unless that part which is objectionable is particularly pointed out, so as to give the party, if he chooses so to do, an opportunity to waive it. Besides, it is found by the court in relation to this part of the evidence now particularly relied upon as objectionable, as well as to a certain letter from Abraham Colby, that the committee regarded it as unimportant, and that the finding would have been the same without it. Now although it may not be safe always to rely upon a fact of this sort, where improper evidence has been received, especially if it was at all calculated to influence the minds of the triers, still if it is ever proper to do so, we think it must most obviously be in that class of cases where a just — 310 — judgment or degree is sought to be prevented by a long series of merely technical objections to the proceedings. The testimony of Ezra Clark, Jr., as to what Mr. Tiffany said, was either withdrawn, or it was acquiesced in as unobjectionable. In either case it ought not now to be insisted upon as the foundation for error in the proceedings of the committee. A book of the Culpepper mine containing entries of sales of gold to John L. Colby, which entries appeared to have been made shortly before the times when the plaintiffs made their examinations of the Pulliam tract, as it is called, for the purpose of discovering whether the surface soil contained gold according to his and the defendants’ representations, was we think, properly admitted. This book was regularly kept, the entries were made by a person who was dead at the time of the trial and therefore could not be produced to testify to the facts which appeared by the entries. The plaintiffs claimed that the defendants through the instrumentality of John L. Colby, one of the defendants and a party to the combination and fraud, had mingled gold with the surface soil in particular places and then caused the plaintiffs to examine the soil and find the gold thus placed there; and that thereby they were induced to believe and did believe the fraudulent representations as to the richness of the whole tract. In the chain of evidence going to establish this fraud, it was obviously important to show that John L. Colby was prepared with gold in his possession, such as was afterwards found in the soil, and thus had it in his power to scatter it upon the soil where it was afterward found. It is true that of itself alone it would not be enough to satisfy the committee that he had been engaged in such a transaction ; but connected with other suspicious circumstances, it might well be evidence on this point of the most satisfactory character, and if these entries were admissible they obviously tended to prove it. Indeed, unless they could in some other way be accounted for, they seem most conclusively to prove We do not in this case feel called upon to examine this point particularly, because we think the evidence clearly — 311 — within the principle recognized in the late case of Livingston v. Tyler, 14 Conn., 493. The point was fully discussed and considered in that case, and we can only say that we remain well satisfied with the correctness of the decision. The evidence therefore was properly received by the committee. The testimony offered by the defendant for the purpose of impeaching the correctness of these entries in the book of the Culpepper mine, consisting as it did only of the declarations of the clerk who made the entries, made long after the date of the entries and after they were proved to have been made, in connexion with the further fact that the clerk was not on good terms with John L. Colby, but had a quarrel with him, was properly rejected by the committee. The proposition that a clerk, who has made entries in the books of his employers, can for any cause, after he ceases to be their clerk, confess away their rights by casual declarations made by him, and thus destroy the effect of entries made in the regular course of business, is so palpably erroneous as hardly to admit of illustration for the purpose of making it appear so. It is enough therefore to say that no authority has been cited in support of it. The committee at one of its sessions adopted a rule that at the subsequent adjourned session they would hear only the evidence of particular witnesses whose names were given to the committee by the respondents, except for special cause; and as coming within the rule thus adopted, they rejected the depositions of Brackett and others. There is no pretence but that this rule was perfectly understood by the parties, and was adopted for their convenience ; and in reference to it, the respondents did give a list of the persons whom they expected to improve as witnesses at the next meeting, and also examined such witnesses as they had present at the time the rule was made, which would not probably have been permitted had it been supposed that the respondents would disregard or attempt to evade the rule. Under these circumstances, it comes to the naked question whether the committee had power to adopt reasonable rules in respect to the trial of the case pending before them, for the — 312 — purpose of facilitating the trial, and' to prevent any undue advantage by one party over the other. The respondents had given notice that they should ask for an adjournment to enable them to get further testimony. No one doubts the power of the committee to allow the adjournment; and while it might be very reasonable to allow it, it would still be proper to see that it was granted on such terms, or under such circumstances, as that it should not operate unfairly upon the opposite party. This necessarily gave the power to prescribe terms; and the rule requiring a list of the witnesses expected to be called upon at the adjourned session was in substance but the terms upon which the adjournment was granted. It seemed to be acquiesced in by both parties at the time, and was under the circumstances a very reasonable rule as we think, and therefore not the foundation for a valid objection to the report. The committee find that in July, 1850, the Randolph Mining Company executed in due form of law a deed reconveying the land to Abraham Colby, and tendered and offered to deliver the same to him, and that at all time since until they became divested of the legal title to said land by the sale of the same on execution, have been ready to deliver the said deed to him or to his legal representatives. This fact, so distinctly found by the committee, the respondents attempt in their remonstrance to have retried by the court, but the superior court on objection to the evidence refused to receive it, and this ruling of the superior court is complained of as erroneous. ■ The defendants on this .point rely chiefly upon the ground that they have set out in the remonstrance, as they say, all the evidence upon which the committee came to this result; and they claim that the evidence thus recited was insufficient to justify the committee in coming to such a result. And this is called a question of law, proper to be considered by the court. This is so obviously an evasion of the rule making the finding of a jury, or of auditors, or of the court, or of a committee in chancery, which, in this respect, is a mere arm of the court, conclusive upon all matters of fact found by them respectively, as to require but little — 313 — except the bare statement of the proposition, to be said upon it. Indeed, the proposition if sanctioned would entirely destroy the rule making the finding of facts conclusive, because it is quite obvious that every fact founded upon evidence susceptible of being stated in a remonstrance might easily in this way be turned into a question of law. This, so far as our judicial history extends, has never been permitted. That the proceedings of auditors can not be revised except for the purpose of seeing whether they have mistaken the law, was first decided in Parker v. Avery, Kirby, 353, and was recognized as settled law in Bradley v. Bassett, 13 Conn., 560, and again in Colgrove v. Rockwell, 24 id., 584; and in West v. Howard, 20 id., 581, Knapp v. White, 23 id., 529, and Goodrich v. Stanley, 24 id., 613, the same rule was applied to the findings of committees in chancery. After such a long continued and uniform course of decisions this can hardly be considered as a point proper to be made. The evidence offered by the respondents, for the purpose of showing that on the trial before the committee the petitioners exhibited testimony which they had procured by bribery and corruption for the purpose of imposing on the committee and the court, and procured the report of the committee upon such false testimony, was also properly rejected by the court, as going to impeach the report in respect to the finding of facts by the committee. The remedy of the respondents for a report procured by false testimony, is an application to the committee for a further hearing; or an application to the court for a new trial, if there is any newly discovered evidence laying the foundation ' for such a complaint. We do not know what evidence upon this point was before the committee, or what further evidence the respondents might have to sustain the very serious charge which they make; and perhaps it is somewhat doubtful whether the charge would not on examination resolve itself into a complaint against the committee for finding the facts differently from what the evidence in the opinion of the respondents called for. If this is really all there is in the charge it was properly disposed of by the court, on the — 314 — ground of the conclusive character of the report as to matters of fact. But if there is any new evidence upon the subject, then, as has been suggested, the remedy is not to set aside the report, but to apply for a rehearing or for a new trial. If there is nothing objectionable in the proceedings of the committee or of the superior court, then the remaining enquiry is, whether the bill must be dismissed because, as is claimed by the respondents, it is not practicable under the circumstances to pass a decree that shall' do justice to the parties. It is no doubt true that no decree ought to be passed which shall affect the rights of the representatives of Abraham Colby, as they have not been made parties'to the suit, and he being dead can no longer be considered as a party for any purpose. But we do not agree to the proposition that there is no privity between Abraham Colby and the respondents in the perpetration of such a fraud, so as to make them liable for his acts. In a conspiracy such as this was, the parties engaged in it are all principals, and each of them is responsible not only for his own fraud, but for the fraud of all the parties combined with him in the- common design. There can be no difficulty therefore in decreeing that the present respondents shall repay to the petitioners all the moneys which have been drawn from them in consequence of this fraud, together with interest thereon from the time the same was paid. But as the petitioners received a deed of the tract of land on which they supposed there was a valuable mine or mines, which, although worthless for mining purposes, is found to be of some value, it in ordinary cases would be decreed that they should reconvey it to the party of whom they received it, on the ground that the whole transaction was rendered void by the fraud of the respondents. This however can not now be done, as since they tendered a reconveyance of it to Abraham Colby, it has been sold on execution issued on a judgment on one of the notes given for it. Whether it was sold in consequence of the neglect of the plaintiffs, or whether it was caused to be sold on a note transferred to some friend of the respondents, for the purpose of getting back the land after they had ac — 315 — complished their fraudulent sale of it, we do not know. Assuming however that it has gone from the control of the parties without any other fault of the respondents than that of assigning one of the fraudulently procured notes given for it to some bona fide holder, it seems just that the real value of the land should be deducted from the sum to be repaid to the plaintiffs. As therefore the value is found not to exceed $8,000, we think that sum should first be deducted from the amount thus to be repaid to the plaintiffs. Again it is said that there is nothing to show in what proportions the defendants were or are interested in the notes which the court is asked to have given up to be canceled, and therefore it is impossible to frame a decree without doing violence to the interests of parties not before the court. But we see no difficulty in decreeing that the defendants, John L. Colby and Miles C. Burt, shall release and discharge all such interest as they or either of them may have in the fraudulently procured notes, and in enjoining them from assigning or in any mode attempting to enforce or collect them. This, while it is just to the parties before the court, will leave the interests of all other persons to be considered without prejudice whenever they shall institute proceedings for the purpose of enforcing any rights growing out of these instruments. A similar order maybe made in respect to any rights which Burt or John L. Colby may claim as against the individual stockholders of the Randolph Mining Company growing out of their subscriptions to the capital stock of that corporation. Itissaid again that the bill is multifarious in seekingthe cancellation of the subscriptions for the stock in the corporation, which is sought in behalf of the stockholders alone, and the repayment of the money and cancellation of the notes, which is for the benefit of the corporation; and that there is no allegation of any fraud practiced upon the corporation ; and that the court will not annihilate the capital of the corporation to the injury of its creditors. So far as the bona fide creditors of the corporation are concerned they are not parties to the bill, and will not therefore be affected by any decree which may be made, and it is — 316 — no part of the object of the bill to affect them. The defendants perpetrated the fraud by means of inducing the individuals who are plaintiffs to take the capital stock of the corporation and advance their money for it, that the money might be immediately withdrawn from the corporation for the benefit of the defendants under the form of a purchase of valuable property suited to the objects of the corporation, but in fact of very little value for any purpose compared with the price for which it was sold, and of none whatever for the purposes for which it was purchased. The corporation was used therefore as a mere instrument by which to accomplish the design; and it was to defraud both it and the individuals induced to take its stock, that the whole series of fraudulent representations were made. It is therefore substantially the case where certain individuals, together with a corporation, are all defrauded by one act or series of acts designed to accomplish the same fraud ; and this fraud operates very much in the same way both upon the individuals and the. corporation. It takes the money of the individuals to fill the stock of the corporation, and then withdraws it from the corporation for the benefit of the parties perpetrating the fraud. Under these circumstances we are satisfied that the bill was properly brought in the names of the individuals and of the corporation as plaintiffs. We advise the superior court therefore to accept the report of the committee, and to pass a decree in conformity to the views expressed in this opinion. In this opinion the other judges concurred. Report to be accepted and decree for petitioners.