Frye v. the President

• Decision Date: 31 December 1849
• Citation: 1 Peck 367,11 Ill. 367,1849 WL 4294
• Parties: WILLIAM FRYEv.THE PRESIDENT, DIRECTORS AND COMPANY OF THE BANK OF ILLINOIS, for the use of JOHN J. HARDIN et al.1
• Court: Illinois Supreme Court

11 Ill. 367
1849 WL 4294 (Ill.)
1 Peck (IL) 367

WILLIAM FRYE
v.
THE PRESIDENT, DIRECTORS AND COMPANY OF THE BANK OF ILLINOIS, for the use of JOHN J. HARDIN et al.1

Supreme Court of Illinois.

December Term, 1849.

The merits of this suit in chancery are sufficiently stated in the opinion. The decree appealed from was a pro forma decree, entered at October term, 1849, by Woodson, judge.

BILLINGS PARSONS and E. KEATING, for appellant:

The interest which disqualifies a witness, is an interest in the result of the cause, namely: that all concerned in the demand ought to be made partners in equity: not all concerned in the subject matter, respecting which a thing is demanded, but all concerned in the very thing which is demanded--the matter petitioned for in the prayer of the bill--in other words, the object of the suit. Story's Eq. Pl., 95, note; ibid, sec. 76. Tested by this rule, the depositions of Joseph Harrison, Stephen Morris, Henry G. Hart and Hiram Sergeant, taken by the defendants in error must be excluded. The record shows that other parties should have been made to the bill. In a bill to foreclose a mortgage, prior incumbrancers must be made parties. Finley v. Bank United States, 6 Cond. R., 320; Haines v. Beach, 3 J. C. R., 459; Ensworth v. Lambert, 4 J. C. R., 604; McGown v. Yerks, 6 ibid, 449; Story's Eq. Pl., sec. 193. The defendant may not only raise the objection at the hearing, for want of proper parties, but the court itself may raise the objection, when determining the cause. 1 Barb. Ch. Practice, 321. The examination as to the credit to be given to the testimony of a witness, must be confined to general credit, by producing witnesses to swear that the person is not to be believed on oath. Troup v. Sherwood, 3 J. C. R., 563; Commonwealth v. Churchill, 11

[11 Ill. 368]

Metcalf, 538; Noel v. Dickey, 3 Bibb, 268; Gilchrist v. M'Kee, 4 Watts, 380; United States v. Vansyckle, 2 McLean, 219; Ford v. Ford, 7 Humphrey, 100; Bakeman v. Rose and wife, 14 Wend., 110; Rector v. Rector, 3 Gilm., 117. The declarations of John Shaw, that he had given a mortgage on the lands to Frye, which he subsequently mortgaged to the complainants, made before the mortgage was executed to the complainants, are admissible in evidence. 1 Greenleaf Ev., secs. 125, 149; West Cambridge v. Lexington, 2 Pick., 538; Davis v. Pierce et al., 2 Durnford and East, 20; Carne v. Nicoll, 27 English Com. L. R., 446; Woolway v. Rowe, 28 ibid, 52; Beers v. Hawley, 2 Conn., 469-70; Demming v. Carrington, 12 Conn., 1; Norton v. Pettibone, 7 Conn., 323; Ramsbottom v. Phelps, 18 ibid, 285. The mere silence of a prior mortgagee is not sufficient to postpone the prior mortgage. There must be actual fraud charged and proved. Brinkerhoff v. Lansing, 4 J. C. R., 66; Berry v. Mutual Ins. Co., 2 ibid, 607; 1 Story on Equity, 380, sec. 384 to 393. Sums subsequently lent on notes, if distinctly agreed at the time to be on the security of the mortgaged property, will be allowed to be tacked. Matthews v. Cartwright, 2 Atk., 347; 1 Story's Eq., sec. 416, 417; 4 Kent, 175; Brinkerhoff v. Marvine, 5 J. C. R., 325. A voluntary conveyance made without consideration, by a person, whether insolvent or not, can not be avoided by a subsequent creditor, unless it is proved that the conveyance was made for the express purpose of defrauding such creditor. Howe v. Ward, 4 Greenleaf, 198, and the numerous authorities there referred to.

D. A. SMITH, for appellees:

Complainants in their bill and amended bill aver, that mortgage to Frye was antedated, and fraudulently recorded, as of a date some years before it was executed; that it was for an inadequate consideration, and given to secure Frye in an ostensible sum, amounting to much more than Shaw really owed him; that it was not bona fide, but was made with the intent to delay, hinder and defraud the creditors of Shaw. These are the issues to be tried in the case.

When consideration is impeached by proof of suspicious circumstances or badges of fraud, the onus probandi of

[11 Ill. 369]

consideration relied upon by the mortgagee, is devolved on him; and if he can not prove it, must abide by his legal misfortune or necessity of his position. A cunning and unscrupulous man may do much in four years to heal or patch up a fraud. Equivocal efforts post litem motam always to be looked upon with distrust, or very strictly scrutinized, and ought not to overcome the repeated, deliberate and solemn admissions of a party making such efforts; which admissions have been made under unguarded circumstances, and before the movement of strife, and before there were any inducements to a sinister or tortuous course of conduct. As to admissions against a party's interest, see 1 Greenleaf on Ev., sec. 200.

As to mortgage standing as security for future advances, is an afterthought, not admissible under either of Frye's answers. If it were admissible, any items in it since the date of the mortgage to the insurance company and Atchison in January, 1839, could not prejudice them. 1 Bibb, 200; 6 J. C. R., 429; 2 Powell on Mort., 533, note 1. But if admissible, why was not interest on the $400 bond, dated in December, 1827, estimated at the rate of twelve per cent.? Shaw had long before that given a receipt, acknowledging the deposit of the patent for the floating claim. But assuming that Frye's mortgage was truly dated and recorded, and was for a full and fair consideration, ought he not to be postponed to the Bank of Illinois, because of the fraud he perpetrated upon her, in neglecting, in his certificate, to state that he had a mortgage on the property? Was he not thus standing by, in fraudulent silence, and inducing her to loan her money under a delusion? See cases collated, 1 Pirtle, 316, sec. 149. See the rule as to impeaching a witness, 1 Greenleaf, sec. 461, 462. This is an abstract question, affording a fit occasion for the court to settle the form of questions impeaching a witness.

The tax sales of the 27th and 28th of April, 1840, were probably a part and parcel of the fraud between Frye and Shaw. By quit claim deed, in May, 1844, Shaw conveyed to Frye, he, Shaw, having been under obligation to keep the taxes paid; and he, Frye, having actual and constructive notice of the mortgage to complainants, can he be in any better condition, or have any superior equity to Shaw. But, if this suggestion goes for nothing, there is no evidence in the record of any judgment

[11 Ill. 370]

or process, in virtue of which the lands were sold for taxes. This claim is surely baseless. That this mortgage was colorable--or a mere shadow--for an inadequate consideration, to keep Shaw's creditors from getting the property, and the better to enable Shaw to settle with his creditor, see 3 Monroe, 1; 1 Leading American Cases, 55, 56; 23 Maine, 221. As to necessary parties to a bill to foreclose a mortgage, see Story's Eq. Pleading, sec. 193 and note; 6 Paige, 637; 6 J. J. Marshall, 432. As to the interest of a witness that will disqualify him, see 1 Greenleaf Ev., sec. 389-90, 523-24. As to the doctrine of impeaching a witness, see 1 Greenleaf Ev., sec. 461, 462. As to doctrine as to leading questions, see 1 Greenleaf, sec. 434, 435.

In the application of the case, 1 A. K. Marshall, 332, I insist that our statute authorizing the waiver of the answer on oath, does not vary the rule as to the use of an answer in making up the issues, or proving the same. If the defendant relies upon special affirmative matters in avoidance, or avers special consideration, the onus probandi is upon him. Irrespective of this point, if the defendant, Frye, relies upon the general prima facie evidence of consideration of the note and mortgage, we have impeached the same for fraud, by his own confessions, as well as much other evidence.

TRUMBULL, J.

The appellees, who were complainants in the court below, filed their bill against John Shaw and William Frye, alleging that Shaw, for the purpose of securing various sums of money which he owed them, being chiefly borrowed money, executed two mortgages, one to Atchison and the insurance companies, dated January 21, 1839, and recorded June 15, 1839; the other to the Bank of Illinois, dated April 21, 1840, and recorded June 3, 1840; both mortgages being upon lands lying in Calhoun county. That a large...