Case Name: John J. Alexander et al. vs. William R. Maxwell, et al.
Court: South Carolina Court of Appeals
Jurisdiction: South Carolina
Decision Date: 1832-04
Citations: 1 Rich. Cas. 302
Docket Number: 
Parties: John J. Alexander et al. vs. William R. Maxwell, et al.
Judges: Johnson, J., concurred.
Reporter: South Carolina Equity Reports
Volume: 9
Pages: 302–315

Head Matter:
John J. Alexander et al. vs. William R. Maxwell, et al.
W. M. purchased negroes from R. W., and gave bond for the purchase money. The ne-groes had been mortgaged by R. W., and after they had been for some time in the possession of W. M., they were seized and sold under the mortgage, and at the sale, W. M. purchased them for a less amount than he had agreed to pay R. W.: — Held, that W. M. was not bound to pay any part of the purchase money, but only interest or hire during the time he had the negroes in possession before the sale for foreclosure,
Where the eviction is under a legal incumbrance, as a mortgage, the consideration fails from the day of the eviction, and up to that timo the vendor is entitled to rent, hire, or interest, if the contract bears interest. . *
A recovery in detinue by the donee, against the executrix of the donor, does not preclude the creditors of the donor from making tho question, whether the gift is validas to them.
Vendee agrees to give a higher price than ho otherwise would have given, if his bond for part of the purchase money is made payable to a trustee for his, vendeo’s, infant daughters. Vendor takes the bond payable to the trustee and retains it until his death. The bond is good against tho creditors of vendor.
The entire responsibility of a decision on viva voce testimony is devolved on the Circuit Chancellor, as on a jury.
Before DeSaussure, Ch., at Georgetown, April, 1831.
DeSaussure,,Ch. The bill is filed, by a judgment creditor of the late R. F. Withers, on behalf of himself and other creditors, in order to make his estate liable to their demands, according to their respective liens or rights. It appears, that the late R. F. Withers, on the 21st March, 1823, being justly indebted to Mr. J. J. Alexander, executed his bond in the penal sum of $24,000, conditioned to pay him $12,000 ; on which bond some inconsiderable payments have been made; but on the 28th April, 1828, there were upwards of $14,000 due. Judgment was obtained on the bond on the 24th March, 1827. R. F. Withers died, soon after, in the same year, and his widow qualified on his will, and possessed herself of his estate. The bill alleges, that it was soon ascertained, that the estate of R. F. Withers was insufficient to satisfy his judgment creditors; whereupon a bill was filed in this Court, for the purpose of marshalling the effects of the said estate, which was decreed; and the estate was sold by order of the Court, and the proceeds appropriated to the creditors, according to their respective legal priorities. The bill states, that among the vouchers, evidences of debt, found in the possession of said Withers, at the time of his death, were two bonds of W. R. Maxwell, one of the defendants, both dated 1st March, 1824 — one of them conditioned to pay $4,400 to the said Withers, on or before the day of 182, (blank in the brief,) the other conditioned for the payment of the sum of $4,200 to Andrew Johnston, another of the defendants, in trust for Esther A. Maxwell, and Maria J. Maxwell, the infant daughters of said Wm. R. Maxwell, at the expiration of fifteen years from the date of the bond ; the interest to be paid annually. The bill alleges, that the consideration of these bonds, was the sale and conveyance of certain slaves by said Withers, to the said W. R. Maxwell, at the time of the dates of said bonds, and it is distinctly alleged, that at the time of the transfer of said slaves, Withers was entirely insolvent. The bill states, that eleven of the slaves sold by Withers to Maxwell, were previously mortgaged by Withers, and on his death, they were seized and sold by the mortgagee : And Mrs. Withers, the executrix, in consequence thereof, surrendered up to Maxwell, one of the bonds for $4,400, improperly; and that Andrew Johnston, trustee of the bond of $4,200, brought suit at law against the executrix for said bond, and obtained verdict and judgment in detinue. The bill prays relief, and that the said W. R. Maxwell may be obliged to pay the said bonds, which were found in the possession of'Withers at his death, in order that the same may be appropriated to the payment of his several creditors, according to the order established by the decree of the Court; and that Andrew Johnston, trustee as aforesaid, may be restrained from enforcing his judgment in detinue, recently recovered against the executrix of Withers, for the bond of $4,200, payable to him as trustee.
The answers of the defendants set up the following defences:
Mr. W. R. Maxwell insists that eleven of the slaves which he purchased from Mr. Withers, having been taken from him, under a mortgage executed prior to the sale to him,> and sold towards the satisfaction of that mortgage, he was entitled to reimbursement, to the amount of the purchase money, and that the executrix of Mr. Withers, being satisfied of the justice of his demand, delivered him up, to be cancelled, one of his bonds, conditioned to pay the sum of four thousand four hundred dollars, which she had a right to do, that being the price of eleven sl'aves, at four hundred dollars round, which was the price contracted to be given for them.
The defendant, Mrs. Withers, the executrix of Mr. Withers, states in her answer, that of the slaves sold by her testator to said W. R. Maxwell, it appeared afterwards that eleven had been mortgaged to the trustees of Mrs. Allen, and in the latter part of January, 1828, they were sold under said mortgage, (as defendant understood,) and purchased by Mr. Maxwell at $225 per head. That the bonds of said Maxwell had been left by defendant, with other papers of her testator, in the hands of Mr. Waterman; and soon after the sale above mentioned — to wit, on the 8th February, 1828 — Mr. Waterman, under the advice of the counsel of Maxwell, surrendered to him one of the bonds, that for $4,400, on which two years interest was also then due, in consequence of the fact that the said Maxwell had been dispossessed, of the said eleven slaves. But he, at the same time, also gave to the said Waterman a written engagement to protect him, if the opinion should prove erroneous. The executrix of Withers also states, that one of the bonds of Maxwell, for $4,200, was made payable to Mr. Andrew Johnston, as trustee for the two infant daughters of W. R. Maxwell, and is claimed by Mr. Johnston for those two young ladies. He instituted a suit at law, in detinue, for the recovery of the bond itself, against this defendant, and obtained a verdict and judgment for the same. Defendant cannot state the motive which induced the testator to have the bond drawn in that way, for be retained th.e bond in his own custody. She supposes the testator may have originally intended to leave this amount to the said minors, who were his near relations, and he was then unmarried, and without children; but these intentions may-have been changed by subsequent events. The defendant admitted that, at the time of said transaction, her testator owed large sums, and subsequent investigations render it most likely that his property was, at that time, insufficient to pay his debts. Yet she is satisfied this was not the impression he then entertained, and that, if he were disposed to make such gratuity, he would not have considered the just rights of his creditors affected by it.
The defendant, Andrew Johnston, admitted, that on the purchase of slaves by William R. Maxwell from Mr. Withers, one of the bonds for $4,200 was drawn, payable to this defendant in trust, for the two Miss Maxwells, daughters of the said Max-Avell; that about the beginning of the year 1824, the said Maxwell contracted wjth the said Withers, for the purchase of forty-three slaves. The treaty was pending a considerable time ; Withers proposed the sale at $400 for each slave; Maxwell objected to the price. Withers urged it, representing that the family of Maxwell should be benefitted by it. The defendant heard Withers teU Maxwell, if he acceded to his terms, he would do something for his family; and he believes these suggestions had great weight with Maxwell, to induce him to enter into the contract; and the defendant has no doubt that Withers, in taking a bond for about one-fourth of the purchase money, payable to the defendant, as trustee for Mr. Maxwell's daughters, was fulfilling, in some degree, the confidence raised by his assurances in the mind of Maxwell; that the slaves were not worth more than $300 per head, and Mr. Maxwell, he believes, would not have entered into the contract, (by which the slaves were valued at $400 per head,) but for the assurances of Withers ; that Maxwell gave his bonds to Withers for $13,000 (which is a little more than $300 a head) for the slaves, besides the bond of $4,200, made payable to this defendant in trust. Defendant admits that he never had possession of the bond, in the life-time of Withers; but Withers often mentioned it to him, and told him he had made him a. trustee thereof. Since the death of Withers, this defendant has, as trustee, brought suit at law against the executrix of Withers, for the bond, and obtained a verdict and judgment, and he hopes to be allowed to have the benefit thereof.
At the hearing of the cause, Mr. Dunkin, counsel for the complainants, produced in evidence the mortgage from W. R. Maxwell to R. P. Withers, dated 1st March, 1824, to secure the payment of three bonds, one for $4,300, a second for $4,300, and a third for $4,400, making $13,000. The mortgage was for forty-three slaves (whom Maxwell had purchased from Withers) and a tract of land. Also another mortgage, from Maxwell to Andrew Johnston, dated 1st March, 1824, to secure the payment of a bond of $4,200 to Andrew Johnston, as trustee for the two Miss Maxwells, daughters of William It. Maxwell. The mortgage was of the same property as in the other mortgage. The counsel also produced a letter from Mr. Maxwell to Withers, of 29th Dec., 1823, in which he offered $400 a head for the slaves, one-half workers, on a long credit, without interest for the first year. The affidavit of Maxwell, of 31st Jan., 1828, was produced, to show that only4eleven of the slaves were taken away from him, a twelfth died before that took place. In consequence of these negroes being taken away, Mr.' Waterman, the agent of Mrs. Withers, the executrix of Withers, was induced to deliver up to Mr. Petigru, counsel for Maxwell, the bond for $4,400, on Mr. Petigru’s giving a written memorandum, to indemnify Mr. Waterman. This paper was produced, and bore date 8th February, 1828. The counsel for the complainant also produced a list of judgments against It. F. Withers, which is in evidence. Some of the debts were as early as the year 1806. The great portion of the debts of Withers were before the sale of the slaves to Maxwell, in the year 1824. The debt due to Mr. Alexander, the suing creditor, was before the sale. It was $12,000 in the year 1812. Mr. Waterman made a statement in writing, (which he confirmed by oath in Court,) in which he stated that Withers died in the year 1827, insolvent to the amount of at least $40,000- That Withers sustained losses, since 1824, by the Weyman purchase, of $16,000 Purchase of farm near it, - - - - 1,400
“ “ Goose Greek plantation, - - . 1,800
• To unnecessary disbursements in travelling, in the year 1826, ----- 5,000
$24,200
Mr. Waterman was satisfied that Withers was insolvent. Mr. Wáterman stated also, that Withers was the owner of many bonds which were due, to wit, Mr. William Johnson’s, in 1805 ; Shackelford’s, in 1808 and 1812; Goddard’s bonds, in 1822. Withers passed a bond of Mr. Alston’s, for $27,000, to the Bank, in 1825. Withers sold property to Mr. Munnulyn. Withers bought property at Columbia, which was sold after his death for half the money.
On the fart of the defendant, Mr. Petigru produced the written notice of Mr. Maxwell to Mr. Waterman, agent for Mrs. Withers, executrix of R. F. Withers, as to the eleven slaves taken away from him, under mortgage of Withers to the trustee of Allen ; the notice dated 13th December, 1827; also the bill of sale by Withers for the forty-three slaves, dated 1st March, 1824, $17,200. The certificate of Bee <fc Carter was .produced in evidence, stating sales by them of several gangs of slaves, in 1823 and 1824. In 1823, they sold slaves at different times, average, $268 ; in 1824, do. do., average $299. Statement by Commissioner in Equity: in'1824 he sold 83 slaves, average, $261 59 : in 1825 he sold 117 slaves, average, $257 22. The credits were short. Mr. Payne testified that the average of slaves in 1824 was $263, and about the same in 1824. The terms were part cash. Mr. Gantt testified of a sale in February or March, 1824; slaves of Mrs. Fell’s estate ; terms a third or fourth cash, and balance in one, two, three and four years— average, $210; sold by Park Lee ; about ordinary price; slaves sold low then. Witness has since sold some slaves, at an average of $300.
There are two main questions in this cause which require our consideration: 1st. As to the eleven slaves who were included in the sale of the forty-three slaves made by Withers to Maxwell, and taken from him by virtue of a mortgage of a prior date, to a third person. There can be no doubt that Mr. Maxwell was entitled to be made safe as to the price of these slaves. It would be an act of gross injustice if he were not. Mrs. Withers, the executrix, acting through her agent, Mr. Waterman, therefore, did right in giving up this bond. But it is contended that, instead of giving up the whole amount of the bond, which was $4,400, with two years interest thereon, no more should have been deducted from the bond than the price at which the eleven slaves were sold, when taken away under the mortgage; and as Mr. Maxwell himself became the purchaser, at a diminished price, (about $280 round,) he ought not to have a larger deduction than the price so paid. This argument has been powerfully urged in another cause, in which this question arose. It was put in this shape. If Withers, or his executrix, had gone and purchased these at a diminished price, from the mortgagee, and taken up the mortgage, and thus secured a good title to Maxwell, would he have had any ground to complain, and would he not have been obliged to pay the full amount of his bond ? The answer is, that it would have been so. But, in point of fact, the executrix did not pay the money and take up the mortgage, though she had notice from Mr. Maxwell, but left the purchaser, Mr. Maxwell, to get out of the difficulty as well as he could, and he might have been obliged to pay a great deal more, to preserve these slaves, who were intermixed and amalgamated with his own gang of slaves. Or he might have lost all his money by the insolvency of Withers, had he received the money on this bond, or passed it away to a third person, for a valuable consideration. To which it must be added, that there is a great difference between a case in which this difficult subject occurs, where a man, having slaves whom he honestly believes to be his own, clear of all incumbrance, makes a sale of them to a third person, for a full price, and an unexpected claim springs up, and a better title is established, and between a claim like the present, where the vendor knew, at the time he was making the sale, that the slaves were under mortgage to a third person, and that he could not make a good title. This was not dealing in good faith, and it would be shocking that he should make a great profit out of the person he had injured ; and it is this feature in the cause which distinguishes this cause from that of Scott vs. Wood-sides, (3 Rich. 428.) In that case Judge James put it properly on the ground of the bona fides of the vendor and the ill conduct of the vendee, who gave no notice of the defect, but en-deavoured to make an advantage out of the vendor. Besides, the Legislature by its Act has declared the rule to be, that in all cases of eviction, the party injured shall recover back the price he gave and interest; and that principle applies indirectly to this case; for if Maxwell had paid the money he would have been entitled to recover it all back. I am, therefore, of opinion, that the bond for $4,400 was rightfully delivered up by the agent of the executrix to Mr. Maxwell. But it does . strike my mind, that having had the use of the eleven slaves, from the time of the sale in March, 1824, till they were taken away in February, 1828, Mr. Maxwell ought to pay hire for their use and labour, and it is ordered and decreed accordingly.
The next question relates to the bond which was executed by Mr. Maxwell, conditioned for $4,200, to be paid to Mr. Andrew Johnston, in trust for the two young daughters of Mr. Maxwell. The complainants allege, that there was no valuable consideration moving from Mr. Maxwell or his daughters to Mr. Withers, to induce him to cause this bond to be made payable to Mr. Johnston, in trust for the children of Mrs. Maxwell. That, therefore, this was a mere gift from Withers to these young persons ; and that being then in debt to insolvency, Mr. Withers had no right to make such a gift: therefore the debt secured by this bond ought to -be considered as part of the estate of Withers, and applicable to pay his debts. Various answers were given to this claim on the part of the creditors. The first is that Andrew Johnston, the trustee, brought a suit at law against the executrix to recover this bond, and has obtained a verdict and judgment. That this judgment of a competent Court is conclusive, for the executrix of Withers represented his estate and the creditors, and that there is no pre-tence of fraud in obtaining the judgment, and no allegation of newly discovered evidence which could not have been had and obtained on the trial at law. There is certainly great weight in this; but it will be more satisfactory to put the decision on the merits of the case. Before we go into the examination of the evidence and the arguments founded on it, it is proper to remark, that on the face of the bond Mr. Withers’ name does not appear. It is a bond from Maxwell to Andrew Johnston, to pay him a certain sum of money for the use and benefit of two minor children of Mr. Maxwell. Prima facie then, Mr. Withers had nothing to do with the business. It is only by evidence that we get at the fact, that this bond was one of four, which Mr. Maxwell was to give on the purchase of forty-three slaves from Mr. Withers. That evidence has been admitted, and, of course, all the evidence connected with the contract, and the inducement to make it in the form and manner it was made. On a careful examination of that evidence, it is clearly established that Mr. Withers was desirous to sell a number of slaves, and he offered them to Mr. Maxwell; he asked $400 round for them. That price was objected to as too high ; he then urged the purchase on Mr. Maxwell, assuring him that he "meant to make some provision for his family, who were connected with him, and that such a sale would enable and induce him to _ do so. This was perseveringly and repeatedly pressed on Mr. Maxwell, who at length yielded to these representations, and became the purchaser of the slaves at $400 round. It was fully proved that the slaves were not worth more than $300 round, and it was proved by several witnesses that the market price in 1823, ’4 and ’5, did not come up to $300 round ; nor does it appear that the long credit on this bond could have been the inducement to give so great a price; because Mr. Maxwell’s minor children were to have the benefit, and whatever was the credit on the bond, short or long, the money would not be wanted in their minority. This was one transaction. The inducement, the purchase in consequence of that and of that alone, the taking the bonds and mortgages, (for a separate mortgage was taken in the name of the trustee as well as a separate bond,) all make but one transaction. The taking the bond and mortgage, in the name of the trustee for the children of Maxwell, was the performance in part of the assurances held out to Maxwell to induce the purchase. But it was urged, that Mr. Withers’ keeping the bond was'evidence that this was not a real bona fide transaction, and that he still held the control over it. To this it was answered, and I think conclusively, that this is not so. Mr. Johnston, the trustee, happened not to be present at the execution of the bond and mortgage. Withers, therefore, kept it. But he informed Mr. Johnston of it, and that he had made him a trustee. Nor did he exercise any act of ownership over it, nor could he, for he could not legally assign or transfer it, and Mr. Johnston has actually recovered the bond at Jaw. It was urged, with great force and ingenuity, that a person in debt, and as it appeared ultimately insolvent when these transactions took place, (March, 1824,) though not known to any persons, and apparently not to Withers himself, had no right to he generous at the expense of his creditors and to their prejudice. This maxim is sound both at Law and Equity. But how was the fact 1 Are the creditors injured by this transaction ? I think not. It is clear that they get the full value of the property of Withers, their debtor, for they get the amount of $300 round for the slaves, which it was proved was their full value. The price contracted to be given, which was above the value, was on inducements and grounds in which they have no concern. But for .those inducements no larger price would have been given for the slaves than $300 round, which was their value. It would be unjust and inequitable in the creditors to ask that benefit over and above the value. And this Court will not lend its aid to give them this inequitable advantage to the prejudice of other persons, who would be deeply injured by giving the creditors that advantage.
I am, therefore, of opinion, and it is so ordered and decreed, that the complainants are not entitled to relief on this part of the case.
The bill must be dismissed as to this bond, but without costs. It is proper to add, that the testimony of W. R. Maxwell as to his inducement to make the purchase, which was taken provisionally at the urgent instance of the counsel, was rejected on consideration, and forms no part of the evidence on which I have made up my judgment on that point.
The complainants appealed on the grounds :
1. Because his Honor should have directed the amount due on the bond of $4,400 to be paid, deducting the sum paid by Mr. Maxwell on the resale under the mortgage.
2. Because his Honor erred in dismissing the bill as to the bond of $4,200.
Dunkin, for appellants.
Petigru, contra.
Moore & Nesbitt vs. Lanham, 3 Hill, 299.

Opinion:
The opinion of the Court was delivered by
O'Neall, J.
We concur with the Chancellor, that upon the purchaser with a warranty of title, express or implied, being evicted by either a paramount title or an incumbrance, the consideration of the contract must be regarded as having entirely, or partially, failed, according to the nature of the recovery had, either at the time the contract was entered into, or at the time of the recovery. The effect of an entire failure - is always to entitle the party to recover back the price paid, with or without interest, or if unpaid to be protected against its payment. If the consideration of the purchase has been paid, the right of the purchaser to recover it back, with interest, depends upon the nature of the title by which he has been evicted. If it was a paramount adverse title he is entitled to interest from the time the purchase money was paid, for his title fails from its commencement. If it was an incumbrance merely, as an exe cution or mortgage, his title only fails from the time the lien is enforced, and hence he is only from that time entitled to interest. For until then he has had the actual possession, and could have sustained no injury or loss. If the purchase money is not paid, but remains in a security, then in the case of eviction by a paramount adverse title of the whole property sold, the whole consideration having failed, the contract is regarded as nudum pactum. If the eviction is by a legal incumbrance of the whole property sold, it then operates as a failure of the consideration from the day of eviction, and the vendor is entitled to rent, hire or interest to the day of eviction, if the contract bore interest. If the failure is only partial, then, unless it goes to defeat the whole object of the purchase, the party is entitled to recover, if the price has been paid, or, if unpaid, to have a deduction made for the relative value which the part recovered bore to the whole in the purchase.
In the case before us, the eleven negroes, upon which the mortgage was foreclosed, were rated in the contract of purchase at $400 each; they were, therefore, the exact consideration of the bond given up by the executrix to her co-defendant Maxwell, and hence he was entitled to have that much deducted from his purchase. But this deduction can only be allowed to be made at tjie time of the foreclosere. The defect or failure of title in consequence of it, does not go back to the commencement of his title. As the vendee of the mortgagor, he was entitled to hold possession until the mortgagee thought proper to demand it. Up to the day of the foreclosure he had the benefit of his purchase, and must either pay interest or hire, (as the bond bore interest from its date.) The Chancellor has directed him to account for the hire, and I see no reason to be dissatisfied with his decree in this respect.
The recovery in the action of detinue,, for the bond by A, Johnston, trustee, against the executrix of Withers, cannot conclude the complainants. She could not, in that case, make the question, that the bond must be considered as a gift by Withers in fraud of the rights of his creditors. For she only represented the rights of her testator, and if his gift was good against him, it must of necessity be so against her. The right of the creditors to make and investigate the question, whether it was or was not a fraud on their rights, is a right against the executrix as well as the donee. They may, therefore, make the question, notwithstanding the right of property may have been judicially determined between the donor, or his executors, and the donee.
Upon the facts in relation to the bond to A. Johnston, in trust for the Misses Maxwell, I confess that I should have been better satisfied, had the Chancellor arrived at a different conclusion.
Did Withers promise to make this donation to the Misses Maxwell of $4,200, as an inducement to their father, Maxwell, to enter into the contract for the purchase of the forty-three slaves, at an advance of about $100 each, over and above their value 1 is the only question. If he did, the decree-is right: if the did not, it is wrong. For the $4,200, if it was voluntarily and without valuable consideration, secured to them, is as plain a fraud upon the rights of creditors, as the gift of ten or eleven slaves would have been.
The evidence is conflicting; but if I had been trying the case in the first instance, I should have found great difficulty in getting over Maxwell's letter offering $400 round for the slaves, and pressing for the contract. But as there was a great deal of testimony heard viva voce on the trial, which satisfied the Chancellor that the prospect of benefit to his family from this purchase by Maxwell, was held out by Withers as an inducement : and that this procured from the defendant the purchase at a sum greatly beyond the real value of the slaves; and as the opportunity of judging correctly of facts is much better in the Circuit Court than in the Court of Appeals; and as ihe entire responsibility of a decision on viva voce testimony is devolved on the Chancellor, as on a jury, I am con tented to affirm his decree. The motion to reverse the circuit decree is therefore dismissed.
Johnson, J., concurred.
Appeal dismissed.