Pomeroy v. Manin
Opinion of the Court
The original bill or petition in this case was filed in the superior court for the county of New London, in the state of Connecticut, and was removed into this court under the provisions of an act of congress, on the ground that the defendants were citizens of the state of New York. This circumstance has been urged at the bar on the part of the complainants, as placing the cause, with respect to the effect and operation of the answers as matters of evidence, upon a different footing than if it had been originally commenced in this court. I can perceive no good reason for such a distinction; if it was the right or privilege of the defendants to be sued in this court, it ought not to be in the power of the opposite party to take away that right, or deprive them of any advantage, if any exists, which they may have in this respect. It seems to be admitted that in the state courts in Connecticut, an answer in chancery stands on the same footing as a plea, and is not evidence, unless the complainant seeks a disclosure by an appeal to the conscience of the defendant. This is different from the rule that prevails in chancery proceedings in the courts of the United States; when the answer is responsive to the allegations in the bill, it is considered as evidence, and must be rebutted by something more than simply the testimony of one witness. In this case the answers were filed in this court after the cause was removed here, and were, in point of fact, sworn to in conformity with the practice of this court. The courts of the United States ate not governed or controlled by the practice of the state courts, unless adopted by some law of the United States, or by some rule of court made in pursuance of an act of congress. See Brewster v. Gelston [Case No. 1,853]. The supreme court of the United States has, under authority of an act of congress, adopted certain x-ules of practice for the courts of equity of the United States; one of which is, that in all cases where the rules prescribed by the supreme court or by the circuit court, do not apply, the practice of the circuit courts shall be regulated by the practice of the high court of chancery in England. And it has not been, and cannot, indeed, be denied, that, by the practice of the English chancery, the answer is required to be put in under oath, and is received as evidence-so far as it is responsive to the bill.
The object of the bill in this case is to set aside, and declare null and void, a certain deed or instrument in writing, given by Charles E. Phelps to D. Forest Manin, one of the defendants in this case, bearing date the sixteenth day of May, in the year one thousand eight hundred and thirty-three, and which is set out in hsec verba in the bill. The allegations in the bill as the grounds upon which the relief is sought, are substantially that Charles E. Phelps, at the time of his death, had a large real and pgr-sonal estate, to the amount of $20,000 and upwards. That he was largely indebted to more than that amount, which, debts, at the time of the execution of the deed in question, were due and payable, and still remain unpaid; and that the property mentioned and described in said deed was liable to, and necessary for the payment of such debts, and the only fund to which the creditors can resort for such payment; and that unless the same shall be so applied, all his creditors must lose their debts. The bill further states that Benjamin F. Phelps, one of the defendants, was the brother of Charles E. Phelps, and was a partner in the mercantile house of Manin, Phelps & Co. That he was the only brother of the whole blood of the said Charles, and his sole heir-at-law. That at the time of the execution of the deed the said Charles had become weak, debilitated and much impaired both in body and mind, and was in daily expectation of dying at the house of his said brother Benjamin, where he was then sick, and under the entire influence and control of his brother, in the absence of all his other near relatives; and that the said Manin and Benjamin combining and conspiring together, secretly and away from the knowledge or observation of his other relatives, or any of the creditors,
The grounds, therefore, assumed in the bill upon which the deed is sought to be set aside, are to be considered in two aspects: (1) As between grantor and grantee, unconnected with the creditors of the grantor; and (2) as against the creditors of the grantor.
Viewing the case under the first aspect, it is not perceived hów the complainant can have any right to call in question the validity of this deed. Neither he nor those whom he professes to represent, have any interest in the matter. The bill alleges that Benjamin E. Phelps, one of the defendants, was the only brother of the whole blood of Charles E. Phelps, and his sole heir-at-law. He is, accordingly, in the absence of all creditors, the only party interested in the estate, and he admits in his answer, in the most full and unqualified manner, the validity of the deed. The deed is certainly not void on account of any defect appearing on its face. The recital shows a benefit received by the grantor, which, with the pecuniary consideration, although nominal, are abundantly sufficient to sustain it, unless the grantor was incompe-teijt to make any valid instrument to pass his estate.
Admitting the right of the complainant to call this in question, how stands the case on this ground? The bill does not charge that the grantor was defrauded, deceived or imposed upon, or that the deed executed by him was in any respect different from what he intended. And how stands the case with
2. The second objection to the deed made in behalf of the creditors of the grantor, has been presented at the bar in two points of view: (1) As a voluntary deed, and void under the statute of frauds; and (2) as being void under the act of Connecticut of 1828 [Laws Conn. 1822-35, p. 182]. The bill, so far as it contains any allegation of fraud in fact, is fully met and denied by the answers, and is not, in any measure, sustained by the proofs, and may be dismissed without further consideration.
The first inquiry then is, whether it is fraudulent in law as a voluntary deed, and void under the statute of frauds. The in-debtment of the grantor at the date of the deed is fully stated in the bill, and not denied by the answers; so that' no question arises here, which has sometimes been made, as to a distinction between creditors antecedent and subsequent to the date of the deed. The consideration upon which the deed is sustained, appears by the recital: “Whereas Benjamin F. Phelps, of the city of New York, (one of the defendants,) is largely indebted unto the said party of the second part, and also to the said party of the second part and Erasmus D. Poote; and said party is under large and considerable responsibilities, together with said Poote, for said Benjamin P. Phelps, which said debts and responsibilities the said party of the first part has agreed to pay, and indemnify the said party of the second part, and said Poote against, as far forth as the property hereinafter conveyed will extend and enable him to do.” The consideration here set out is, therefore, an agreement on the part of the grantor to pay certain debts due from Benjamin P. Phelps to the grantor, and also to the grantee and Erasmus D. Poote, and to indemnify them against responsibilities they were under for Benjamin P. Phelps. What these debts and responsibilities are does not appear upon the face of the deed, and it becomes a question whether parol evidence is admissible to explain it. It is a well-settled rule that parol evidence cannot be admitted, to contradict or vary the terms of a written instrument. Nor can a conveyance be shown by parol to be to another use or intent than that expressed in it. But the evidence in this case does not appear to me to violate these rules. It was introduced to prove a collateral agreement connected with the stipulations in the deed, and in no respect repugnant to it; it was matter extrinsic, and referred to as explanatory of the nature and extent of the consideration. It may be con
If, then, the inquiry can bo entertained as to the nature and extent of the consideration, does the evidence sustain tlie deed in this respect? How far the answers of the defendants on this branch of the case are to be received, will depend on the allegations in the bill. The bill, in substance, charges the defendants with fraudulently obtaining the deed from Charles E. Phelps, to the injury of his creditors, and to defeat their just debts; and this allegation rests materially, if not solely, upon the ground of want of consideration. The answers, therefore, showing what the consideration was, are responsive to the bill, and to be received as evidence. The commissioner reports, that from the answers, and various other sources of evidence, it appears that Benjamin F. Phelps was one of the firm of Manin, Phelps & Co., and this indeed is so alleged in the bill; and that in the year 1832, and in the early part of 1S33, he was acting as the agent of his brother Charles E. Phelps, in New liork, and constantly furnished him with funds to a large amount, which were extensively drawn from the funds of Manin, Phelps & Co., without the knowledge of either of the other partners, and in many instances grossly fraudulent. The evidence shows very satisfactorily, that the funds of the partnership, used by B. F. Phelps for the benefit of his brother, Charles E. Phelps, were to a greater amount than the value of the property conveyed to Manin by the deed in question. It was, therefore, in reality the debt of Charles E. Phelps himself, which his property went to pay; and, in this view of the case, every consideration of justice and equity, as against C. E. Phelps, calls for the establishment of the deed. This evidence was proper, as explanatory of the agreement of Charles E. Phelps, and to show the consideration upon which that agreement rested. It was in no respect repugnant to the deed, but related to matter collateral to and consistent with it; and, indeed, may well be considered as in direct answer to the allegations in the bill, so far as they rest upon the want of consideration in the deed.
But it is objected, that illegal evidence was admitted to establish this debt; that the books of the partnership could not be received for that purpose. The report of the commissioner shows the purpose for which the books were offered and received in evidence; it was not to show any debt against Charles E. Phelps, but to show how the accounts stood as between the partners themselves. The recital in the deed is that B. P. Phelps was largely indebted to Manin and to Manin & Foote, which debts the grantor, C. E. Phelps, had agreed to pay. The amount of the debts and responsibilities thus assumed by C. E. Phelps, does not appear by the recital, and this was necessary to be shown, at least to the extent of the value of the property conveyed. C. E. Phelps had appropriated his property only to that extent, and if there was any surplus it was reserved for his use, and would have been subject to the claims of his creditors. That the books were sufficiently proved to show how the accounts stood between the partners themselves, cannot be questioned. The books were objected to because all the clerks who made the entries were not produced as witnesses; but the commissioner states that they were admitted because it appeared that the clerks were the agents of the partners for the purpose of keeping the books, and that ffm, H. Plumer, who was sworn as a witness, was the'principal clerk, and had the superintendence of all the books; and had himself made almost all the entries which related to the same charges. These clerks were the agents of all the partners, and their acts were binding upon all the partners. The books were admitted subject to any proof of collusion, fraud or mistake in the entries; but no such proof was offered. This was not evidence showing a different consideration from that expressed in the deed. The consideration in the deed was the assumption of the grantor to pay debts of B. F. Phelps to a large amount, and this. evidence was to show such amount, which, as against the creditors of Charles E. Phelps, was necessary, in order to protect the property against their claim.
The case, then, is resolved into one where an insolvent debtor has appropriated his whole property towards the payment of the debt of a preferred creditor; and if the facts in the case will warrant this view of it, the validity of the deed cannot be questioned, for it is a well-settled and undisputed doctrine, that an insolvent debtor may prefer one creditor to another. This is believed not to be at this day an open question. It is a point too well settled to admit of argument. ‘Whether originally settled upon sound principles of justice and policy, is not considere;! within the province of this court to examine. Had the deed been given to Benjamin F. Phelps, who was the creditor of Charles E. Phelps, its validity would have been clear. The only remaining inquiry is, whether this deed is void under the statute of Connecticut of 1S2S, relative to conveyances in trust for creditors? This act declares, “that all eon-veyances and assignments of any lands, tenements, goods, chattels or choses in action, hereafter made, directly or indirectly, by any person in failing circumstances, with a view to his insolvency, to any person or persons in trust for his creditors or any of them, shall, as against the creditors of the person making such conveyance or assignment, be deemed and adjudged fraudulent, and utterly void, unless the same be made in writing for the benefit of all the creditors in proportion to their respective claims, &c."
The general rule is, that whatever is responsive to the bill, is evidence for as well as against the defendant. Schwarz v. Wendell, Walk. (Mich.) 267. If a fact stated in the bill and answered by the defendant is material to-complainant’s case, or is a circumstance from which a material fact may be inferred, the answer in such case, is responsive to the bill, and is evidence in the cause. Id. An answer-may sometimes be evidence of a fact not stated, in the bill; as when the bill sets forth part of complainant’s case only, instead of the whole, and the part omitted and stated in the answer, shows a different case from that made by the bill, and is not by avoidance merely. Id. An. answer in chancery not sworn to, is not evidence in the cause for any purpose; it performs-the office of a plea only. Willis v. Henderson, 4 Scam. 13. Where a general replication is put in and the parties proceed to a hearing, all the allegations of tne answer which are responsive to the bill, shall be taken for true, unless they are disproved by two witnesses, or by one witness with pregnant circumstances. Hagthorp v. Hook’s Adm’rs, 1 Gill & J. 270; Roberts v. Salisbury, 3 Gill & J. 425; Moffat v. McDowall, 1 McCord, Eq. 434; Hopkins v. Stump, 2 Har. & J. 301; Maunin v. Whiting, 1 Call, 224; Blanton v. Brackett. 5 Call. 232; McCaw v. Blewit, 2 McCord, Eq. 102; Leeds v. Marine Ins. Co., 2 Wheat. [15 U. S.] 380; Stafford v. Bryan. 1 Paige, 230, 3 Wend. 532; Searcy v. Paunell. Cook, Eq. 110; Martin v. Browning, 2 Hawks, 644; Green v. Vardiman, 2 Blackf. 324; Hart v. Ten Eyck, 2 Johns. Ch. 92; Neilson v. Dickenson, 1 Desaus, Eq. 134; Clark v. Van Reimsdyk, 9 Cranch [13 U. S.] 153; Estep v. Watkins. 1 Bland. 488. An answer, after replication, is not evidence for the defendant, except as it is made so, by discoveries called for in the bill, and which are responsive to direct charges or special interrogatories. Lyerly v. Wheeler, 3 Ired. Eq. 599. The denials of an answer cannot be rebutted by a single witness, unaided by corroborating circumstances. Clark v. Bailey, 2 Strob. Eq. 143. The defendant is bound to answer the charging part as well as the stating part of the bill: and his answer to the charging part, if responsive thereto, is evidence in his own favor, if an answer on oath has not been waived by the complainant. Smith v. Clark, 4 Paige, 368. Where an answer on oath is waived, the answer is not evidence in favor of the defendant for any purpose; but as a pleading the defendant may avail himself of admissions and allegations contained therein which establish the case made by his bill. Bartlett v. Gale. Id. 504. An answer admitting the equitable allegations of a bill, but setting up matter in avoidance. is not evidence of such matter to the court on motion to dissolve an injunction on bill and answer, and ’ the injunction will be continued till the hearing. Ferriday v. Selcer, Freem. Ch. (Miss.) 258; s. p., Planters’ Bank v. Stockman, Id. 502: Oakey v. Rabb’s Ex’rs, Freem. Ch. (Miss.) 546. Where a discovery is sought by the bill, the answer stands for proof unless rebutted by preponderating evidence; and although the testimony of a single witness, if corroborated by circumstance*, is sufficient to disprove an answer, yet it is for the chancellor to judere •./ the weight of the evidence; and his decision against the evidence to contradict the answer, will not be interfered with, especially where the same facts are sworn to by two defendants in their several answers. Magwood v. Lubbock. Bailey. Eq. 382. Where the allegations of the bill are denied by the answer. a single witness is not sufficient to establish them, unless strongly supported by circumstances. Johnson v. Slawson, Id. 463. Where
An answer replied to is in no case evidence against the plaintiff, though the bill be sworn to; but an answer that cannot be replied to is evidence for the defendant, as in case of bills of discovery. Ragsdale v. Buford’s Ex’r, 3 Hayw. (Tenn.) 192. On a hearing before a master upon a bill and answer, general allegations in the answer, containing matters of belief and inference from facts not particularly stated, are not conclusive, but may be controverted by testimony. Copeland v. Crane, 9 Pick. 73. The answer of a defendant to a bill in chancery, in a former cause, is not legal evidence in a cause against his legal representatives, relative to the same transactions. Drury v. Conner, 6 Har. & J. 288. To a bill for ne-groes the defendant answers, that the negroes were conveyed to plaintiff, to defraud the creditors of the defendant at law. The court held, the verdict and judgment were conclusive if pleaded in bar in equity. Gray v. Faris. 7 Yerg. 155. Where a ease in chancery is heard on bill and answer alone, the answer must be taken as true, whether responsive to the bill or not. Lowry v. Mallory, 3 Stew. & P. 297. An answer can only be taken as true so far as it is responsive to the bill, where complainant replies and puts the answer in issue. Bates v. Murphy, 2 Stew. & P. 161, note; Smith v. Rogers, 1 Stew. & P. 317. So, an evasive answer (though not excepted to as such) is outweighed by the testimony of a single witness, and circumstances. Wilkins v. Woodfin, 5 Munf. 183.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.