Hoffman v. Smith

Mason, J., delivered the opinion of the court. We can find nothing in the record before us, to warrant the assault that has been made by the appellants’ counsel in — 486 — argument, upon the conduct and motives of the appellee in this cause. As far as the history of the transactions between these parties can be gathered from the evidence in the record, the court can see nothing in the conduct of the appellee to deserve the severe animadversions which have been indulged in towards him; but, on the contrary, we feel constrained to express the opinion, that according to the rules of morality and fair dealing, his claim, which he is now seeking to enforce, ought to be paid, and if defeated at all, it must be by means of the application of some strict, technical rules of law. In the first place, we regard this claim as well founded upon principles of morality and' abstract justice, because, by the express agreement of the parties, the property which was derived by Mrs. Hoffman from her father, Jacob Smith the elder, was pledged as security or indemnity to the appellee, and constituted the consideration for the advances and endorse- ' ments to be made by him for Hoffman Secondly. Ploffman and his family enjoyed, for a long series of years, the advantages of the appellee’s money, and credit, and by means thereof, was enabled successfully to prosecute his business and sustain himself amid the vicissitudes and reverses of commercial life. And thirdly, the debt which forms the basis of the present suit, was subsequently distinctly admitted, and its payment promised by both Hoffman and his wife, by the note which they executed in 1838, and which is brought to our view in the record. In the absence of frauds or circumventions, it would be difficult to imagine a demand which could stand on firmer equitable grounds, than is to be found in the three enumerated circumstances which support the present claim. If there be any foundation to sustain the proposition of the appellants’ counsel, that this claim is not to be supported upon principles of morality and honor, it must result from the close ties of relationship which exist between the parties, and not from the want of a just and legal consideration to support the debt itself. All such questions address themselves to the conscience and sense of propriety of the creditor, rather than to the restraining powers of a court of equity, and in all instances — 487 — ought to depend upon the peculiar circumstances of each case. ' The defences set up by the appellants against the enforcement of this claim are mixed questions of law and fact. The complainant has exhibited a prima facie case, and the question of fact submitted to us is, has there been any agreement or transactions between the parties, by which the rights of the complainant acquired by the deed of 1824, have been surren-r dered or defeated ? There is clearly no express agreement by which those rights have been in any way compromitted, nor have we been able to find any evidence in the record, of the existence of any facts, from which a rational mind could infer any purpose on the part of the appellee, to abandon his rights aud security under that deed. But it has been contended by the appellants, that the legal effect of the deeds which were executed in 1826, two years after the execution of the deed of trust, was to abrogate and annul said deed, or that they furnished the evidence of the intention of the appellee, to abandon his rights under the deed. There is nothing in the deeds of 1826, which by express terms vacates the deed of trust, or suspends its powers, and if such a result is produced, it must be by means of the legal construction to he given to those instruments by which the inference is to he drawn, that such was the design of the parties. Let us, as far as we are able, gather the intentions of the parlies from the deeds themselves, as well as from the surrounding circumstances attending their execution. The deed of 1824 is intended, as expressed upon its face, to embrace the whole estate which Mrs. Hoffman derived from the father, and to secure her brother against loss as endorser for hex husband. In the interval between 1824 and 1826, nothing occurred in the affairs and circumstances of Mr. Hoffman, which would render the necessity of the deed of trust less important axxd pressing as a security to the appellee as endorser and creditor of Hoffman, and therefore we must suppose that the motives which induced the execution of the — 488 — deed in 1824, still existed for its continuance in 1826. At the last named period, after the death of the mother, for the mutual benefit and convenience of all the parties, and with a view of a settlement of the estate, the arrangement took place in regard to the property left by their parents. These were the sole motives, as far as we can learn from the record, which induced the parties to execute the deeds of February and June 1826. It matters little in the view we are now taking of the case, whether this conventional arrangement is to be styled a partition or not. It was designed for the mutual benefit of the several heirs of the estate, and neither added to, nor diminished, their respective interests under the wills of their father and mother. Upon what principle of justice then, can these transactions be supposed to furnish evidence of an intention to defeat or vary, in any way, (except in the mode hereafter shown,) the previous deed of 1824? Did the appellee gain any advantage or profit by them, as a consideration for the loss he is supposed to have sustained ? Were these arrangements entered into at his instance, and for his peculiar and exclusive benefit ? Clearly not. Yet we are required to give to these deeds a construction which would defeat certain vested rights of the appellee, under the previous deed, without showing that the terms of the deeds would warrant such a construction, or that there was any consideration moving him to an act, which would be so greatly prejudicial to his interests, The doctrine of estoppel does not apply in this case. The appellee does not seek to deny any thing, either express or implied, in the deeds of 1826. There is nothing in them which creates any equitable ground to suppose, that their purposes and designs were to revoke a deed of trust of 1824. On the contrary, we regard the deed of February 1826, as subordinate to the deed of trust. It has been contended, that the appellee should have excluded, in express terms, by the deeds of 1826, any inference that those deeds were to subvert and vacate the deed of 1824. It might be asked, with much greater force, why did not Hoffman and wife disclaim the further con — 489 — tinuance of the trusts executed by the deed of 1824, if they designed to accomplish such a purpose? The principles of equity would rather require the announcement of such a purpose to come from Hoffman, than from the appellee, so as to pul the latter upon his guard, as to any future advances and credit, which he might have extended under the impression, that he was amply secured in the liabilities he was incurring. We do not therefore regard the partition of February 1826, whether considered with reference to its legal operation, or as furnishing evidence of the intention of the parties, as affecting in any degree the rights of the complainant under the deed of trust of 1824. Whatever doubt might exist in the mind of this court, as to the sufficiency of proof to support the claim of the complainant, we think the verdict of the jury ought to ha.ve weight enough to remove those doubts. Although a verdict under such circumstances is not conclusive upon the court, yet in all doubtful cases it is entitled to great consideration, and should be sustained, unless against the absolute convictions of the court to the contrary. So much then as to the deeds of 1826, considered as exponents of the purposes and intentions of the parties to them, with reference to the deed of 1824- The next consideration to which our attention is called, is the legal effect of the deeds of 1826, The deeds executed in February, were clearly made in pursuance of a partition entered into between the several heirs of Jacob Smith the elder. The effect of a partition is merely to give to persons titles in severalty, to property in which they had previously held undivided interests; and the deed of 1824, was not affected by this partition, further than that it was made to attach to the property allotted separately to Mrs. Hoffman, as her share of the estate of her father, instead of her undivided interest in said estate. The rights of the appellee to lot No. 4, which Mrs. Hoffman took under the partition, we think, are unimpaired, and that the same ought to he sold to satisfy his demand. But as regards the deeds of June 1826, we think a differ — 490 — ent question arises. It is true the complainant denominates" the exchange, or sale of property which took place by virtue of those deeds, a partition, and that the adult defendant admits the transaction to be what it was styled “a partition,” yet this court nevertheless cannot so treat the deeds of June. Upon the face of the deeds themselves, and from the nature of the transaction, it is clear it was not, and could not have been a case for a partition, but it was simply an exchange, or rather a sale of property. By this arrangement in June 1826,. Mrs. Hoffman acquired title to a piece of property, being lot No. 3, as designated on the plot, in which she had previously no interest whatever. It is true at the same time, she parted with lot No. 2, which was clearly embraced within the deed of trust, but there was no agreement or understanding, that the newly acquired lot was to be charged with the incumbrances of the one which she had parted with. There is nothing in the deeds themselves indicating such a purpose, nor is there any agreement proved which shows that such was the intention of the parties. The effect of these conveyances was to extinguish the appellee’s claim, under the deed of trust, to lot No. 2, and to that extent to diminish his security, but that they could not by possibility operate as a transfer of the trusts originally charged upon that lot, to the newly acquired property. We are therefore of the opinion that Mrs. Hoffman took lot No. 3, free and unincumbered by the deed of trust, and that the prayer of the bill so far as it seeks to charge this lot with the claim of the appellee, ought not to be granted. Another defence relied upon to defeat the claim of the complainant, is, that his silence and general conduct as disclosed by the testimony, was such as to lull Hoffman and wife into a false security, and to induce them to suppose that the impending evil which they had brought upon themselves, had been removed, or rendered harmless. There is no positive proof of any such conduct on the part of the appellee, nor is there any evidence in the record from "which an inference could be reasonably drawn of any such conduct on his part. The principle relied upon by counsel in their argument — 491 — upon this point seems to us to have no application to this case. We concede the principle, that where one stands by and sees innocent third parties laying out money, and making improvements upon property, to which he himself has some claim or title which is unknown to the other parties, and he does not give notice of it, he cannot afterwards, in equity and good conscience, enforce such claim or title. But this doctrine does not apply to a case like the present, where the claim or title of the complainant was equally open and apparent to both parties. The Hoffmans could not set up ignorance of the complainants’ rights, because they were parties to the deed that created those rights-, And again, how were Hoffman and wife prejudiced or injured by the alleged silence; or conduct of the appellee, which is said to have indicated an intention to abandon his rights under the deed of trust ? Are their condition worse than it would have been if appellee had in their presence, repeatedly and openly asserted the existence of his deed ? Would their interests been affected, or the appellee’s rights impaired, even if the latter had, through ignorance; supposed that his deed had become nugatory ? We are clear in the opinion that they would not. This alleged conduct of the appellee, even if it had existed, has not affected or varied the condition of the Hoffmans, nor created any new rights or exemptions in them, which would be violated by enforcing the deed of trust. The same remark is true as regards the improvements which were placed upon the incumbered premises. At that lime the appellee had but a remote and contingent claim upon the property, which it was in Hoffman’s power at any time to have defeated, by paying the debls for which Smith was liable; and therefore, the improvements ought rather to be regarded as designed for the benefit of the former than the latter. But let this be as it may, Ihe improvements -were made with the knowledge and approbation of Hoffman and his wife, and with a full knowledge of the existence and effect of the deed of trust, and they therefore cannot be said to have, been innocently drawn into this expenditure of money. — 492 — Nor do limitations apply to this case, in our judgment. We do not deem it important to express any opinion as to the legal effect of the note executed by Hoffman and wife in 1838, to revive the debt, had it been barred by limitations ; because we regard the original demand or cause of action which the deed of trust designed to embrace, as being in full force, and unimpaired by lapse of time^ at the moment of filing the present bill. It is only important to refer to that note as furnishing evidence, that, at least in the opinion of Mr, and Mrs. Hoffman, the claim of the complainant had not by any previous act of his, been defeated or released. The evidence is clear to our minds that the note was given in reference to the responsibilities incurred by Smith under the deedof trust, and it was therefore a manifest recognition and admission of the justice of his debt, so far as they were concerned, even though the note should have no other effect. Many other questions were raised by the several counsel in the argument of this cause, which we do not feel ourselves called upon to settle. The views already expressed, in our opinion, dispose of the whole case. We think, in accordance with those views, that the decree of the county court ought to be affirmed, so far as the same directs the sale of lot No. 4, and that it must be reversed as regards lot No. 3. Decree affirmed in part, and reversed in parti