Schaferman v. O'Brien

Stewart, J., delivered the opinion of this Court. Several preliminary propositions discussed by the respective counsel in this case, will be disposed of before we determine the main question — the character and purport of the deed of the 30th of September, 1852, from Leiman to Schaferman. The plea of limitations having been interposed, was urged against the demand of the complainant, but we think it is not applicable under the circumstances of this case. In McDowell vs. Goldsmith, 24 Md. Rep., 214, it was decided that. — 573 — the confession of a judgment, by a fraudulent grantor, or his administrator, after the execution of the deed, would not defeat the plea of the statute of limitations made by the grantee. But, in that case, the claim was actually barred before the judgment was confessed, and it was held that the grantor could not voluntarily waive or defeat any right of the grantee. In this case, the judgment against the grantor was recovered before the claim had been barred by the statute — there was no waiver of any right or defence to the prejudice of the grantee. The original cause of action was merged in the payment and the plea of limitations cannot avail. The same point was expressly decided in Williams vs. Banks, 11 Md. Rep., 198, where a judgment was confessed, after the deed was executed, but before limitations had barred the note upon which the judgment was confessed. See page 234, Glenn’s claim ; see also Williams vs. Banks, 19 Md. Rep., 22, &c. It has also been objected, that Sehaferman, having conveyed the property mentioned in the deed to other persons, since the pendency of these proceedings, they ought to have been made parties. If such a suggested fact could delay the cause, it might have become interminable. Grantees, claiming the land under parties to the suit, or any of them, by title, derived pendente lite, are in no better condition than those under whom they claim. Tongue vs. Morton, 6 H. & J., 23. It lias also been insisted that the complainant having purchased the judgment against Leiman, subsequent to the deed, has no standing in Court — that such a purchase savors of champerty — is in violation of the statute of Henry VIII, eh. 9, recognized in Kilty’s Report, as in force in this State. This statute prohibits under penalties, the buying or selling of any pretended right to land, unless the vendor is in actual possession of the same, or of the reversion or remainder. “The ancient policy which prohibited the sale of pretended titles, as an act of maintenance, tvas founded upon a state of society which does not exist in this country.” 4 Kent, 526. The statute of Henry VIII, ch. 9, is not rigidly enforced in this country. Sedgwick vs. Stanton, 14 N. Y. Rep., 289. — 574 — “ It will have been perceived that the subject of the assignment of rights of action, as tending to the common law offences of champerty and maintenance, is here left in a state of considerable uncertainty.” The subject was examined in a late case, (Danforth vs. Streeter, 28 Vermont, 490,) and the following conclusion reached: “That the bona fide purchaser of a bond or other chose in action, which is represented to be due, and which the purchaser believes to be due, may sue upon the same and not incur censure from the law; and that all contracts founded upon any such consideration are valid. The same is true of any aid one may render another in a suit, by way of money or advice or other lawful assistance, if done under a bona fide belief in the justice of the case. ' It was upon these grounds that we ventured td suggest that the common law notion of maintenance, as applicable to the assignments of rights of action, had become practically obsolete.” Story’s Eq. Jur., sec. 1057. “Maintenance now means, where a man, improperly and for the purpose of stiring up litigation and strife, encourages others, either to bring actions or to make defences, which they have no right to make.” Findon vs. Parker, 11 Mees. & Welsby, 679, 682, referred to in 4 Kent, 531. We are not aware of any case in the judicial history of this State, where the provisions of the statute of Henry VIII, have been enforced — without meaning to assert that there might not be such exceptionable conduct savoring of champerty and maintenance, as to be punishable, yet there can be no doubt that this statute is, in a great measure, now obsolete. Before the Act of 1829, ch. 57, the bona fide assignee of a chose in action, was considered as having peculiarly an equitable remedy, and certainly that statute enlarges his powers. It gives to the assignee of a judgment, specialty or other chose in action, the authority to sue, in any Court of law or equity, reserving to the defendant all such legal or equitable defences as might be maintained against the assignor.” The necessity of a lien by a judgment, or otherwise, against the property, as — 575 — preliminary to equitable relief, is obviated since the Act of 1835, ch. 380. Richards and Wife vs. Swan, 7 Gill, 377. In the case before us judgment has been obtained against Lei-man, the grantor, in the deed. The complainant, as assignee, being entitled to collect from Leiman this demand, existing as an original cause of action antecedent to the deed in question., has the right to pursue any property, for the payment of the same, belonging to Leiman, liable therefor, unless bona fide transferred to a purchaser for a valuable consideration. The deed of the 30th of September, 1852, if it were an honest transaction between the parties, would afford protection to the grantee therein, against the claim which existed antecedent thcTeto, as the judgment thereon was not rendered until afterwards. On the contrary, if the deed was the result of fraudulent collusion between Leiman and Schaferman, to hinder and defeat the creditors of Leiman, it cannot receive the countenance of a Court of Equity. However solemn the instrument in its formalities, if it had its origin in fraud, it is a nullity, so far as the creditors of Leiman are concerned. “ There is no ascertained rule of law which determines what acts or declarations of a party shall, in all cases, be requisite to establish fraud, each case must depend upon its own circumstances.” Richards and Wife vs. Swan, 7 Gill, 369. “Eadges of fraud vary, according to the capacity of the party and the end to be attained.” “ We must look for the motives and designs of the parties, to the circumstances surrounding the transactions, and every fact, however trivial, which can throw light upon the subject.” Feigley vs. Feigley, 7 Md. Rep., 562. Where a bill was filed to set aside a deed as fraudulent against creditors, Judge Nelson, of the Supreme Court, who delivered the opinion affirming the judgment of the Circuit Court, vacating the deed in that case, relied very much upon the unsatisfactory evidence, in respect to the payment of the consideration specified in the deed. “This proof,” he said, “was vital in order to uphold a deed, in other respects surrounded with suspicion. The evidence was in their possession.” He — 576 — referred also to the “ continuance of the vendor, in the possession and full enjoyment of the premises, the same after the deed as before, and absence of interest manifested by the vendee as circumstances not satisfactorily explained.” “ The conveyance was made to a brother.” “ The vendee seems to have taken no part in the management of the property.” “No proof was given by the defendants in respect to the payment of the consideration.” Collan, et al. vs. Statham, 23 Howard, 479. That case, in several of its features, was not unlike this. The defendant, Schaferman, in his first answer, states “he will specify, if necessary, how the consideration for the said conveyance was paid, but he is advised that it is a matter of testimony,” but his promise to furnish evidence upon that subject was not redeemed. His deed was impeached, and upon that point.he was specially interrogated in the bill, and if he knew any thing of the matter, he must have been cognizant of that, but it is left to conjecture, no proof having been adduced. Schaferman conveyed back to Leiman the same property, in the year 1857, but the instrument is withheld from record, and does not come to the light for a long time. "When this suit was instituted, although he had thus reconveyed to Leiman, he executes another conveyance to other parties, and from that fact suggests a question, if such conveyance does not affect the past proceedings against him, but makes no disclosure of the anterior deed to Leiman'. After the trial at law on the note is instituted, but before judgment, this deed of September, 1852, from Leiman to Schaferman is executed, and soon afterwards Leiman applies for the benefit of the insolvent laws, returning no assets., The rents of the property are quite regularly collected by Lei-man or his wife, although Schaferman lived in the immediate vicinity, and there is no testimony of their ever being paid over to Schaferman. Leiman paid the ground rent after the deed; Schaferman gave receipts for rent, although there is no proof he received any. Leiman contracts for a sub-lease to Henry Pfau, and Schaferman executed the same. The property was mortgaged by — 577 — Schaferman to secure a debt due by Leiman. Schaferman said the property belonged to Leiman, and that it only stood in his name. There is no proof that Schaferman had sufficient means to pay the amount of the consideration, or that Leiman owed him considerably. Schaferman and Leiman were brothers-in-law. In the -absence of any explanation as to the payment of the pui'chase money, except the presumption in. the deed, which is only prima facie, all the circumstances referred to are indicia of fraud and collusion, and cannot be reconciled with plain and straight-forward dealing. If the transaction had been bona fide, certainly the grantee had the opportunity afforded, to relieve it of the imputation of fraudulent arrangement, to defeat the creditors of Leiman. Failing totally to do so when the issue is made, the developments, exposed by the testimony in the cause, must have their irresistible solution adverse to the integrity of the deed, as a righteous and genuine contract. Unexplained by any testimony throughout the record, they permit us to come to no other conclusion, than that they are beyond the power of satisfactory explanation, consistent with any theory of fair and honest transfer of the property. We are satisfied the decree of the Court below ought to be affirmed. (Decided 22d April, 1868.) Decree affirmed and cause remanded.