Case ID: mass_25/html/0069-01.html
Source: Caselaw Access Project
Author: {"author": "Parker C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Prince Hawes et al. versus Samuel Langton and Trustees.
    In a trustee process, no evidence can be admitted to charge the trustee, except what he discloses in his answers.
    In such a process the trustee is not obliged to disclose communications made to him by other persons, though it seems he may disclose them in his answers, if he is satisfied of their truth.
    Where a person summoned as trustee, disclosed an assignment to himself by the defendant, of property for the benefit of creditors, apparently valid ; and the defendant made an affidavit of facts tending to show the assignment fraudulent, and the trustee refused to annex the affidavit to his answers, expressing his disbelief of the facts stated in the affidavit, the court refused to order the trustee to annex the affidavit to his answers.
    it seems, that where a debtor is summoned as trustee of his creditor, the court can not compel him to disclose an assignment of the debt to a third person, where the trustee does not personally know the fact of the assignment.
    If the assignee should be injured by the trustee’s refusing to state the assignment in his answers, it seems that he would have a remedy by an action against the trustee.
    Where an assignee of the defendant’s property for the benefit of creditors is summoned as trustee, the plaintiff is not, under St. 1817, c. 148, entitled to a trial by jury to try the validity of the assignment.
    Elijah Loring and Washington Munroe were summoned as trustees in this case. The answer of Loring sets forth an ■indenture of assignment, dated January 5, 1828, by which Langton assigned his property to Loring and Munroe, for the benefit of Munroe, to whom he was indebted, and other creditors. In a schedule of borrowed money annexed to the indenture was enumerated a note to Munroe for 6161 dollars 13 cents, and in another schedule another note to him for 656 dollars 35 cents. He also states, that on the 8th of January, 1828, Langton came to his (Loring’s) counting-room, and stated to him for the first time, that the sum of 1000 dollars was included in one of the demands of Munroe over and above his genuine demands, and this he wished struck from the list of claims, as it was intended to be reserved for his benefit. On the same day, with Munroe’s consent, the amount of 10CU dollars was struck off, and a memorandum was written at the foot of the schedule, signed by Langton, Loring and Munroe, stating that it was an error, and therefore deducted. The note for 656 dollars 35 cents was also struck from the other schedule, and a similar memorandum made. On January 12, 1828, Munroe assigned his property to William Dehon and Loring, for the benefit of his creditors, including his claims against Langton, and the share which he was to receive of Langton’s effects, and by the same instrument he conveyed to Loring all his interest as trustee in the property assigned by Langton, so as to constitute Loring sole trustee of Langton’s property The answers of Munroe confirmed the statements of Loring. He also stated, that at the time when he consented to have the 1000 dollars struck off, he had not examined his papers, and for the moment supposed Langton to be correct in his statement, in relation to the supposed reservation of 1000 dollars ; but that on inspection of his papers soon after, he ascertained that Langton was under an entire mistake in relation to the supposed reservation, and that the sum of 1000 dollars ought not to have been struck off. Munroe also stated the items out of which the sum mentioned in the note was composed, which tended to show that the full amount was due to him. Munroe also claimed to have the 1000 dollars restored to the schedule.
    The note for 656 dollars 35 cents was included in a check for a larger amount.
    Langton having made an affidavit relative to the indenture, and tending to invalidate it by showing a reservation of 1000 dollars for his benefit, which affidavit was sent to Loring, an interrogatory was filed on behalf of the plaintiffs, requesting Loring to annex the affidavit to his answer. This he declined doing, because, as he says, “ he has not such confidence in the statements of Langton as to be willing to make them a part of his answer, and because he thinks he has reason to believe the statements of Langton heretofore made relative to said transactions, either through forgetfulness or otherwise, have been so grossly erroneous that they might be calculated to mislead the Court, and finally because he is advised by his counsel they are not proper to be introduced.”
    A motion was made by the plaintiffs, that the trustee should be ordered by the Court to annex the affidavit of Langton tc his answers.
    
      S. Hubbard and C. G. Loring, for the plaintiffs,
    contended that the trustee was bound to annex Langton’s affidavit to his answer. The trustee’s answer being the only evidence admissible, hearsay evidence may from necessity be introduced into it, which would not be proper if other witnesses were allowed to testify. If such evidence is not admissible, great injustice and hardship must be the consequence. In many cases, evidence has been introduced besides facts known to the trustee. Thus books of a third person have been made evidence by a trustee’s answer. Cleveland v. Clap, 5 Mass. R. 201. So a certificate of a referee, not summoned as a trustee. Thorndike v. De Wolf, 6 Pick. 120. In case of an assignment of a debt, the assignee of the debt may insist that the debtor, when summoned as trustee, shall make the assignment a part of his answer. Foster v. Sinkler, 4 Mass. R. 450. And in several cases the Court have said, that persons who could not themselves be chargeable as trustees, might yet be summoned, in order from their answers to charge other persons also summoned as trustees. Fisk v. Herrick, 6 Mass. R. 271; Cleveland v. Clap, 5 Mass. R. 201; Lane v. Penniman, 4 Mass. R. 91; Penniman v. Ruggles, 6 Mass. R. 166.
    
      
      Maich 9th.
    
    
      The plaintiff also claimed the right to try the validity of the assignment before a jury, under St. 1817, c. 148.
    
      Fletcher, Rand and Cooke, for the trustee.
    It is well settled that the trustee is to be charged by his answers alone, and no other evidence is admissible. Comstock v. Farnum, 2 Mass. R. 96; Barker v. Taber, 4 Mass. R. 81; Stackpole v. Newman, 4 Mass. R. 85; Hatch v. Smith, 5 Mass. R. 49. If the trustee answers falsely, the only remedy is by a suit against him as provided by the statute. St. 1794, c. 65, § 9; Whitman v. Hunt, 4 Mass. R. 272. The case of Minchin v. Moore, 11 Mass. R. 90, is precisely parallel to the present. There the affidavit of the defendant having come up in the rase, the Court refused to take any notice of it, but charged the trustee without any regard to it. The present case is even stronger, for the attempt here is to charge the trustee in opposition to his answers, by evidence which he declares he does not believe.
    The case is clearly not one in which a jury trial can be had, for the statute only provides for the case of an assignment io another, not to the trustee himself.
    
      March 23d.
    
   Parker C. J.

delivered the opinion of the Court. We think it very clear, that the person summoned is not obliged to disclose any facts, which may be communicated to him by others, of which he has no personal knowledge ; and that the Court cannot, on the question whether he shall be discharged or not, take into consideration any evidence, which is not verified,by the oath of the trustee, and so made part of his answer. This point was settled in Comstock v. Farnum, 2 Mass. R. 96, the earliest case reported after the enactment of our trustee law; and we think the principle has been strictly adhered to in every case which has since arisen upon that law, as will be seen by all the cases cited in the argument. We do not think the principle trenched upon by those cases, in which the trustee has annexed assignments to his answer, and made them part of his disclosure ; for, in such case, they are incorporated with his answer, and become part of his disclosure.

It is supposed that those cases, in which it has been intimat ed by the Court that a third party ought to be summoned as trustee, prove, that the Court will adjudge the person summoned, to be a trustee, upon facts collaterally shown by the disclosures of other persons. This intimation, though several times made, does not appear to have been carried into practice ; and we do not think the position contended for necessarily follows. In the case of Fisk v. Herrick, the persons summoned as trustees owed nothing to Herrick alone, but were indebted to Herrick & Smith as partners. The Court determined, that they could not be charged as trustees of Herrick alone, for he miglr be indebted to the firm, and so have no equitable interest in the debt; but stated that one of the partners should be summoned as trustee, in order to ascertain the state of the concern, and if it should appear on his examination, that the principal has an interest in the partnership effects after all their debts are paid, that interest may be considered .as effects or credits of the principal, and may be secured by the attachment. In what mode this is to be done, is not stated ; nor has any case occurred in which this principle has been tested. It may be observed, however, that if the debtor to the partnership should-on such auxiliary disclosure, be charged, it would be altogether on his own answers ; for he has acknowledged himself a debtor to the firm, and prima facie, the principal has an interest in that debt, and it is only to protect his partners, that the Court refuse to charge the trustee without knowledge of the state of the partnership funds. The liability of the trustee is, in such case, derived altogether from his own indebtedness, as admitted by himself; so that this principle will by no means justify the introduction of evidence to contradict the disclosure of the trustee, which is the object of the motion before us. The case of Penniman v. Ruggles, and Jutau, Trustee, does not even advance this principle. Jutau had received goods as auctioneer from an officer, who had attached them as belonging to the principal, the attachment being supposed to be dissolved by an agreement entered into between the attaching creditor, the debtor and the officer. It was determined that the auctioneer was accountable only to the officer, and that the officer was the proper person to be summoned as trustee. It is not stated, that upon the disclosure of the officer, Jutau might be charged ; but if it was so intended, we presume it would only be in the way suggested in the case, that is, that the answers of Jutau should have been sufficient to charge him, either originally, or by such further disclosures as he might be enabled to make with the aid of the disclosure of the officer. There is nothing in these cases tending to show, that the person summoned can be charged as trustee, on facts derived from any other source than his own answers, or that he can be compelled to state any fact which he disbelieves or does not know of his own knowledge.

Extrinsic facts have been sometimes introduced by the voluntary annexation of the evidence of them to the answers of the trustee, he declaring upon oath, that he believes them to be true; and it is in this way, that debts assigned were protected from attachment. But if the trustee should refuse to annex such evidence, we think there is no power in the Court to compel him. If an assignee should lose his debt on account of such refusal, the remedy is by action against the trustee. He may exercise hi's judgment and abide by the consequences.

The object of this motion is, to compel the trustee to disclose a statement of the principal, which, if true, is supposed to defeat the title, under which he holds the goods by an assignment from the principal himself. If he does not believe this statement to be true, he ought not to make it a part of his answer. If he did, and at the same time stated his disbelief of its truth, it would be wholly nugatory ; for he must be discharged or charged upon his own oath.

We think it also clear, that the case is not within the statute which provides for a trial of the validity of assignments by jury. He does not disclose an assignment to another, but to himself. The trustees, in this respect, are as one, being joint assignees. And, in regard to the suggestion of a sub-assignment to Dehon, that, upon the explanation given, has no relation to the case ; for Dehon has not become the assignee of the principal and the trustee of his creditors. Every part of the statute indicates the intention of the legislature to provide for the bringing in of new parties whose rights cannot be otherwise protected. The assignees are already parties of record, and the creditors whom they represent are heard and protected through them. We cannot stretch the act to cover this case ; for the very process, by which we should attempt to execute it, would exhibit an absurdity, being to compel those to come in, who were originally parties to the suit. As the legislature go step by step in reforming our jurisprudence, it is probable that the next step will be, to provide a remedy for such evils as are supposed to exist in the present case.

Trustee discharged. 
      
       See Revised Stat. c. 109, § § 15 to 18; Kelly v. Bowman, 12 Pick 386 Willard v. Sturtevant, 7 Pick. 194.