Case ID: sc-eq_9/html/0246-01.html
Source: Caselaw Access Project
Author: {"author": "Joi-insoN, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Paul Jaudon and others vs. Executrix and Executor of Theo. Gourdin and others.
    
    Permission by one brother to another, to have possession of slaves for a number of years as a loan, and to hold them out to the world, and treat and use them as his own, held, under all the circumstances, to be a fraud upon a creditor of the bailee, who trusted him, supposing the slaves to be his, and took from him a mortgage of the slaves to secure the debt; and the mortgage was held to be a valid lien upon the slaves, as against the bailor and his representatives.
    
      Before Johnston, Ch., at Georgetown, February, 1831.
    In 1817, Catharine McDonald, the widow and administratrix of Adam McDonald, deceased, and the children of Adam McDonald, filed a bill- against Theo. Gourdin, deceased, to set aside a- bill of sale of negroes, made by Adam McDonald to Theo. Gourdin, in 1809, and to have the same declared a mortgage. A part of the negroes had been in the possession of Theo. Gourdin, from the date of the bill of sale ; "the other part had remained with Adam McDonald. The suit abated by the death of the administratrix, in 1819, and was revived in Nov., 1820. In 1823, the decree of the Appeal Court was pronounced, declaring the transaction to be a mortgage, and directing a reference to the .Commissioner to ascertain the amount due, and ordering a sale of the negroes, unless the amount reported was paid. The Commissioner’s report under the decree was confirmed, and several of the negroes sold, but not enough to. satisfy the amount due to Gourdin.
    The Sheriff had seized two of the negroes, which were lodged in jail, and the Commissioner was proceeding to sell them, when a bill was filed, 5th August, 1826, by Paul Jaudon, who had married one of the original complainants, (styling himself also administrator of one Samuel McDonald,) and by the other children of Adam McDonald. An injunction was granted by Chancellor DeSaussure, to restrain the sale of the Commissioner, and ordering the Sheriff to deliver up the negroes to the complainants. At this stage of the proceedings, or soon after, Theo. Gourdin departed this life. The bill was revived against his executrix and executor, and several witnesses were examined before the Commissioner. In April, 1829, a motion was made to dismiss the bill, for want of jurisdiction. His Honor, Chancellor DeSaussure, refused the motion, and ordered the bill to be retained, and the injunction to remain of force until the trial of the rights of the parties be had at law, to which they were referred, and directed to resort.
    Under this decree, neither party could determine what course should be pursued. An appeal was taken, and a decree was made by consent, that the Circuit Court should proceed to the determination of the cause, and should pass on the rights of the parties. The cause was now heard before his Honor Chancellor JohNston. There was evidence, that about the year 1797, Samuel McDonald loaned to his brother, Adam McDonald, a negro woman, from whom those in dispute descended. Sami. McDonald died in 1824 or. 1825. He was apparently in indigent circumstances all his life,, returned no taxable property, and there was no evidence that, during the long litigation between the representatives of his brother and Theo. Gourdin, or at any period, he had interposed any claim to the property.
    His Honor pronounced the following decree :
    JohnstoN, Ch. This case comes before me for a trial, after a decree, sustaining the jurisdiction of the Court, has been pronounced by Chancellor DeSaussube. That decree was appealed from, and the Court of Appeals ordered, “ that the case be sent back to the Circuit Court, with directions to determine on the rights of the parties, in the same manner as if the complainants had instituted proceedings^in the Court of Law.” If we confine ourselves to the facts stated in the bill, and do not permit ourselves to be led off by the statements, by counsel, of facts' which no doubt exist, but of which there is no charge in the bill, I am inclined to think this is a plain case of trover or trespass. The bill simply states that Mr. Huggins is in possession of the slaves of the plaintiffs, as the agent of Mr. Gourdin. There may be some insinuations, but no direct charges beyond this, and, if I were at liberty, I would unhesitatingly dismiss the bill. Indeed, I have hesitated much whether I ought not to do it, for it is plain that the Circuit decree was made, not on a full hearing, although the decree is general enough to apply to the merits, but upon a motion to dismiss the bill. And again, I doubt whether the Court of Appeals intended to make it imperative on the Circuit Court of Chancery to try an action at law, although they have directed it to determine on the rights of the parties, in the same manner as if the plaintiffs had instituted proceedings at law.
    All parties pressed me to decide the right of property ; but none of them satisfied me that, in doing so, I would be acting in any other capacity than that of an arbitrator, unless I should regard the question of jurisdiction already decided on.
    Authorities were produced, to show where no ground is taken against the jurisdiction until after decree, that then it is too late to take it. Doubtless this is correct, when properly applied. When the Court has general jurisdiction of the subject, but something has occurred to render the tribunal an improper one — in other words, when the jurisdiction has been ousted — the doctrine is not only that the jurisdiction cannot be objected to after a decree, but it cannot be objected to ore tenus, even at the hearing, but must be pleaded to, unless the objection appears on the face of the bill. But when a case is stated, over which the Court has no jurisdiction at all, the objection never comes too late. It need not be pleaded, for the Court is bound to know the extent of its jurisdiction, and needs not to be informed of its limits by pleading.
    I have stated this, that if I am wrong in my construction of the previous decrees of the Circuit and Appeal Courts, (which are the only obstacles in my mind to dismissing the bill,) an opportunity may be given to have it dismissed, for want of jurisdiction. If I had dismissed it, I should have also ordered a restitution of the property in the same plight, as far as practicable, as it was in when the bill was filed.
    The only question which I am to consider is, whether the slaves in question were the property, not of Adam’s, but of Samuel McDonald’s estate?
    On this point, the evidence leaves on my mind not a shadow, of a doubt. It is clear that the property never belonged to Adam. I place no reliance on the declarations of Adam, after he executed the bill of sale to Gourdin. That would be to allow him, by subsequent declarations, to defeat his conveyance. But two witnesses prove a loan from Samuel to Adam, before that time. Mrs. Keels proves, on her own knowledge, the loan in 1796 or 1797.
    If the testimony stopped here, there would be little difficulty. But it is said that June, and another witness, prove declarations of Sam, that he had given the slaves to Daniel W. McDonald, his nephew and one of the children of Adam. Be it so. That is of no consequence to the defendants. Whether the slaves belonged to Samuel or Daniel W., their mortgage or decree against them could not make them liable as the property of Adam. But Daniel W. waived his exclusive rights, under any gift which his uncle might have made to him, which it was competent for him to do, and by accepting in partition, as one of the distributees of Samuel, affirmed the right of the latter.
    It was contended that the plaintiffs were estopped from setting up the right of Samuel hy the decree in the case of Catharine McDonald et al. vs. Theodore Gourdin. „ It is not clear to my mind that any one is estopped by that decree but Catharine, who, as the administratrix of Adam, was perhaps the only proper party to that bill, which was brought to redeem. The dis-tributees, as such, had no business in Court.
    But, at most, a decree is binding only on the parties before the Court, and only on the points directly adjudicated. Nor' is it binding on them in any other capacity than that in which they are parties. Now, the question in the present case is, whether the slaves belonged to Samuel or Adam ? That question could not have been presented in the former case, by either party — for, if the plaintiffs had averred the right to be in Samuel, he being then alive, they would thereby have shown that they had no right to reclaim the slaves, as the property of Adam; and if Mr. Gourdin had made such an averment, he would have shown that his mortgage gave him no lien on the slaves. The questions, in that case, were simply, whether Adam had mortgaged, and whether any part of the debt was unpaid? -We may infer from the decree, that all parties treated the property as Adam’s; but a decree concludes only points directly decided, and in issue — not points inferred from it.
    The former decree could not bind Samuel McDonald, who was no party to it; nor could it hind those who became his distributees on his death, although they were before the Court, but in such a situation that they could not assert his rights. Com. Dig. -Tit. Estoppel (c.) ; 5 Rep., 32, b.
    It was insisted that, as a point of evidence, the declarations of the plaintiffs, in the bill of the former suit, were conclusive that the slaves belonged to Adam. The present plaintiffs, in-eluding Jaudon’s wife, were infants, and the declarations were not theirs, but those of their guardians ad litem. But, as I have allowed the plaintiffs to derive their right, in one point of view, through the waiver of Daniel W. McDonald, who was a party to that suit, although he is not to this, it will be necessary to show that his statements in that bill are not evidence against those claiming through his acts, in this case; and I ám of opinion that, if he were one of the present plaintiffs, his statements in the former bill would not' conclude him. 1 Phil. Evi., 263 ; 2 Selw. N. P., 635. A bill is only evidence that such a bill was filed, and that certain points are put in issue; it is not evidence of statements contained in it, not necessary to the issues. I have not insisted on the circumstance that Jaudon, as administrator of Samuel McDonald, was not a party to the former suit, because, after the partition of the slaves as the property of his intestate, he cannot come properly into this Court as administrator. As distributee, claiming that half of the estate of Samuel which he purchased from Daniel W. McDonald, he is clearly not bound by the former decree, not being a party, or claiming under a 'party. As distributee in right of his wife, who was a party, his rights have been already considered by me, in connection with the rights of the other distributees, who were parties.
    It is, therefore, ordered and decreed, that the injunction heretofore granted in this case be made perpetual.
    The defendants appealed on the grounds:
    1. That under the whole statement of the proceeding, the Chancellor should have ordered the negroes taken from the possession of the Sheriff, to be re-delivered, and the complainants’ bill to be dismissed.
    2. That in the strongest view for the complainants, the decree of the Appeal Court meant only, that the cause should be tried by the Chancellor, without objection to the jurisdiction of the Court, but that in every other respect, all_ objections could be made, as if no decree' had been pronounced by the Appeal Court, and the defendants were entitled to any defence, which they might have made or pleaded at law, if the action had been instituted in that forum.
    3. Because if the Court had jurisdiction, the claim of complainants as representatives or distributees of Samuel Mc-Don-ald, was stale, and should have been rejected.
    4. That if his Honor meant to try and decide the rights of complainants, as if a suit at law had been commenced against the defendants, then it. is most respectfully submitted, that the claim of the complainants was not sustainable, as the evidence of the original ownership in Samuel McDonald, was vague and insufficient. As it was clear that he had never been in possession of, or exercised any act of ownership over the property, from the year 1797, till his death in 1825, as if he were the owner. The permission for Adam McDonald to possess and use the negroes as his own, for nearly thirty years, to get credit on them, and to mortgage them to his creditors, was a fraud on his, creditors, and would defeat the claim of Samuel McDonald, if any he had; that the registry of the mortgage, and the pending of the suit in Chancery, from 1817, till the death of Samuel, was notice to Samuel, and his omission to interpose any claim was a waiver of right, if any existed in him, and the allowance of any such claim at the end of the litigation would sanction a fraud on the litigants.
    5. That the possession of-Adam McDonald, after the mortgage to Gourdin, was adverse to the claim of Safnuel McDonald, and defeated the same.
    6. Because if the evidence was believed, a gift was proved by Samuel McDonald to Daniel W. McDonald, and therefore the complainants could not recover.
    7. Because the complainants were estopped from claiming the property as Samuel McDonald’s, when they had heretofore contended that it was Adam’s, and they were bound by the decree made in that case.
    8. Because no partition whatever was proved of the estate of Samuel McDonald, and all the reasoning of the Chancellor, founded on that statement, is unwarranted by the evidence, and as it is believed, is unwarranted by the facts as they really exist.
    9. That the evidence proved at most, that one negro had been owned by Sami. McDonald, and the decree gives to his representatives about seventeen, without any definite or satisfactory evidence that they were all the descendants of the negro owned by Samuel.
    10. Because viewing all the evidence in the light most favorable to the complainants, Samuel McDonald owned the negroes prior to 1797: in that year he delivered them to his brother Adam, in the possession of whom, and of whose family they remained without interruption or claim for thirty years, who mortgaged them for a valuable consideration to defendants’ testator, and that no claim was ever made by Samuel in his lifetime, of the property, and that therefore, none should now be allowed on the part of his legal representatives.
    
      Dunkin, for appellants.
    
      Petigru, contra.
   The opinion of the Court was delivered by

Joi-insoN, J.

The controversy between these parties, so far as the merits are concerned, involves the right of property in certain negroes, (nineteen in number,) named in the complainants’ bill. The complainants claim them as the legal representatives of Samuel McDonald, deceased, and it is conceded, that if they belonged to him at the time of his death, they are entitled to recover. The defendants derive their interest in them from Adam McDonald, the brother of Samuel McDonald, who made a bill of sale of them to defendants’ testator, Theodore Gourdin, to secure the payment of a debt due to him. The bill of sale was absolute on its face, but Gourdin at the same time executed a deed, in which he acknowledges, that it was intended to secure the debt and the right of Adam McDonald to redeem, and in which also he covenants that they shall remain in the possession of Adam McDonald, for the use of his family.

The evidence justifies, perhaps, the conclusion, that old Peggy, from whom all the other negroes descended, originally belonged to Samuel McDonald; and one of the questions made in the case was, whether he had ever parted with the absolute property in them to Adam McDonald ? The Chancellor has decided that question against the defendants, and upon that decision has predicated a decree perpetually enjoining the defendants from proceeding to sell the negroes in satisfaction of the debt due to them, according to the tenor of the bill of sale, and the counterpart deed of Gourdin; and if the case depended on that question alone, it might well be doubted, whether the judgment of the Chancellor, on a question merely of fact, would not be conclusive. It is, according to the rules and practice of the Court, generally so regarded, and I am disposed so to consider it. But for myself I find it difficult to reconcile the possession of Adam McDonald, and his legal representatives, for a period of at least twenty-eight years, with the right of property in Sami. McDonald, who during all that period, was utterly destitute of every necessary of life, and the means of support, and dived and died wholly dependent on the bounty and hospitality of his friends.

Conceding, however, to the whole extent, that the property in the negroes, was in Samuel McDonald, and that the possession of Adam McDonald and his representatives after his death, was on loan, the question, which seems to have been overlooked in the Circuit Court, necessarily presents itself, to wit, whether that possession was not such a fraud upon Gourdin as’ a creditor, as to subject them to the payment of his debt?

The facts out of which this question arises, (and I propose to state them as they are assumed by complainants,) and most strongly against the defendants, are, that Samuel McDonald, being possessed of old Peggy, delivered her as a loan to his brother Adam McDonald, in 1796, or 1797. That Adam McDonald, having become indebted to Gourdin, and continuing in possession of Peggy and her descendants, in 1807 mortgaged them for the payment of that debt. That Adam McDonald retained the possession of the negroes from that time to the time of his death, which happened between 1813 and 1817, and from that time until after the death of Samuel McDonald, in 1824, they remained in the possession of the administratrix, and the administrator de bonis non of Adam McDonald, Gour-din’s debt still remaining unpaid. An attempt was also made to prove that Gourdin had notice, that these negroes did not belong to Adam McDonald; and one witness, Mr. W. Smith, stated, that in a conversation with Gourdin, he' told him that they did not, and that Gourdin, looking hard at him, replied, “ if you know anything about it, keep it to yourself.” The precise time of this conversation is not -fixed by the written examination of the witness now before me, but it is, stated in connection with circumstances which clearly show that it was not until long after the bill of sale was executed, and probably not until after the death of Adam McDonald. This witness also testified as to the admission both of Adam McDonald and his widow and administratrix, not long before their respective deaths, that the negroes belonged to Samuel McDonald, and some of the other witnesses say, that they were understood to be the property of Samuel McDonald ; but no notice of the fact was brought home to Gourdin, otherwise than as above stated, and the question then recurs, whether he has a lien on them for his debt?

There is no law which requires a transfer of slaves, or other chattels, to be in writing, and possession, therefore, generally constitutes the only evidence of property. It is to that alone .which strangers look in treating with him in possession, and hence the rule laid down in Twyne's case, 3 Co. 80, (1 Smith L. C. 1,) which in some of the cases is said always to have been the law, that the possession of a chattel inconsistent with the right, of property, has, in controversies between the creditors of him in possession, and the legal owner, been always regarded as a badge of fraud, (see also Taylor vs. Jones, 2 Atk. 600 ; Russel vs. Hammond, 1 Atk. 16 ; Bates vs. Graves, 2 Ves. jun. 292.) In Edwards vs. Harben, 2 T. R. 594-5, Judge Butler, in the case of a purchaser for a valuable consideration, lays down the rule even more strongly, and as founded on the unanimous concurrence of the Court, that unless possession accompanies and follows the deed, it is fraudulent and void as to creditors, and he remarks, that in Bucknal vs. Roiston, Pr. in Ch. 287, Sir E. Northey said, “ it had been ruled forty times, in his experience at Guildhall, that, if a man sell goods, and still" continue in possession, as visible owner, such a sale is fraudulent and void as to creditors, and that the law had been always so held.” If there be nothing but the absolute conveyance without the possession, that in point of law is fraudulent.

Cases where, according to the terms of the conveyance, or contract of sale, the seller is to retain possession for a limited time, do not properly fall within this rule : for there the possession is in conformity to the deed. But even in those cases, when the transaction is perfectly fair in the first instance, it may become fraudulent afterwards, if they are concealed, or if the rightful owner neglects to assert and pursue his claim, and thereby others are drawn in to deal with him in possession, in relation to the property, or trust him on the credit of it. Hungerford vs. Earle, 2 Vern. 261; 2 Johns. Ch., 48.

These were all cases of the seller retaining possession after the sale, and do not, perhaps, apply here in terms, for it may be said that the possession of Adam McDonald, under a loan from Samuel McDonald, was a fair and rightful possession; but they point out forcibly the application of the great principle, that he who does an act which is in itself calculated to deceive, and by which another, trusting to appearances, which he has no means of unveiling, is defrauded, shall himself bear the loss. What is this case ? Adam McDonald had had the possession of the negroes for nine or ten years, before he mortgaged them to Gourdin. He had, during all that period, exercised over them all the dominion of the rightful owner, without any interposition on the part of Samuel McDonald : the knowledge that he had them on loan was not brought home to Gourdin, and assuming, as we must, that he was ignorant of it, can there be any doubt that he trusted to them, at least in some degree, as a security for his debt ? But that is not all. His debt is yet unpaid, and now, at the .expiration of a quarter of a century, during which time the interest must necessarily have accumulated, he is told, not by Samuel McDonald, for during his whole life he never exercised any act of ownership over them, but by volunteers, claiming as his representatives, that Adam McDonald’s possession was merely a loan, and that he had no property in them. Now, I am not prepared to say, either that the possession of Adam, per se, at the time he mortgaged, or the lapse of time since, is a legal bar to this claim; but they furnish, in my judgment, an irresistible presumption that Gourdin trusted him on the faith of that possession, and that, confiding in its continuance, he was satisfied with the security which the mortgage gave him, and this, the consequence of a secret act, done by Samuel, calculated to deceive, is, according to the principle before laid down, a fraud in law. This conclusion is greatly strengthened by the consideration, that the proof of the fact of the loan is extremely equivocal, and that the lapse of time, now five and thirty years, may have deprived the defendant of the means of disproving it.

This conclusion supersedes the necessity of considering the other questions raised in the cause. I will remark, however, that we concur with the Chancellor, that the complainants were not barred by the judgment of the Court, in the case of the Administrator of Adam McDonald et al. vs. Theodore Gour-din, for although the persons parties to that suit are very much the same, there they sued as representing Adam McDonald, and here as representing Samuel; nor were the rights of Samuel involved in that controversy.

The objection to the jurisdiction of the Court is expressly disclaimed by the counsel, and, notwithstanding the case stated in the bill is the action of trover, as remarked by the Chancellor, we are inclined to think that the evidence makes a case of Equity cognizance, and rather than turn the parties round, the Court would even now suifer an amendment by consent, so as to meet it. The circumstance to which I allude is, that a part of these negroes had been seized by the Sheriff, under a process issued by the Commissioner in Equity, professedly under an order of the Court, and he was proceeding to sell them in satisfaction of Gourdin’s mortgage; - but, in fact, there was no order justifying such a process, and although that would have been the foundation of an action of trover, I incline to think that, regarding the property in possession of the Court, and under its control and direction, the complainants might have gone there for relief.

It is ordered and decreed, that the injunction heretofore granted, to restrain the defendants from selling the negroes conveyed, by way of mortgage, to defendant’s testator, by Adam McDonald, and now in possession of the complainants, be and the same is hereby dissolved. And it is further ordered and decreed, that unless the said complainants shall, within one month after notice of this decree, pay and satisfy the defendants the balance reported to be due by the said Adam McDonald, now deceased, to defendants’ testator, Theodore Gourdin, and the costs of this suit, that they do deliver to the Commissioner in Equity, for Georgetown District, to be sold by him, the said negroes mentioned in the said mortgage, and their issue and increase, or so many thereof as will be sufficient to produce, by sale, a sum sufficient to pay the said balance and the costs.

O’Neall, J., concurred.

Decree reversed.