Court Opinion

ID: 6667797
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:07:21.010873+00
Date Added: 2024-06-11T16:00:23.798932
License: Public Domain

*129RESPONSE TO PETITION EOR REHEARING.
Opinion by
Beatty, C. J., Lewis, J.,
concurring.
The petition for rehearing is principally devoted to a review of the evidence. In this review counsel attempt to show some discrepancies between the answer of defendant, Sneath, and his testimony on the stand.
Admitting the discrepancies to be as great and irreconcilable as counsel claim — even admitting that the discrepancies in defendant’s answer and evidence were so great as totally to discredit him — it would not, in our opinion, alter the result in this case.
If two parties should contract, under seal, and one of these parties should attempt to show fraud in procuring his signature to the deed by his own simple testimony, unsupported by circumstances, and the other party to the deed should deny all fraud or imposition, we doubt if any Court would be justified in setting aside such deed, although the plaintiff might be a man of the highest standing, and the defendant the greatest criminal in the community.
But we do not agree with counsel in the estimate which should be put on Sneath’s testimony. The most apparent discrepancy in the answer and testimony of Sneath is in regard to the claims he had assigned to him before he entered into negotiations with Bolán. He swears in his answer that, with claims in hand to the amount of $6,178.28, including his own, he entered into negotiations with Bolán, purchased the goods from him, and receipted claims to the amount of $5,422. In his testimony, it turns out that the claims in his hands at that time amounted to only $5,549.05, exclusive of interest, which perhaps would have added some hundreds more to the amount. Subsequently there were four small claims assigned to him, which in the aggregate amounted to $627.66. Now it appears to us, the having stated in his answer that all these claims were in hand when he entered into negotiations, shows only negligence and want of care in making his statement. It does not indicate any intention to falsely represent the facts, for he would have made just as strong a case for himself if he had said he entered into the negotiation with claims on hand to the amount of $5,549 as he does by *130saying the claims amounted to $6,178.28. In his answer he seems carelessly to have included in the amount of accounts alleged to have been in his possession when the negotiation commenced four small accounts, which were subsequently assigned him. But it seems clear that he had in his hands, at the commencement of the negotiation with Bolán, accounts to an amount greater than the consideration mentioned in the bill of sale. Counsel point out some other apparent discrepancies, which we think equally unimportant. The bill of sale declares that the sale was made “ to have and to hold the said goods and property unto the said R. G. Sneath, his executors, administrators and assigns, to his and their own proper use and benefit forever.” Now, if the goods, etc., were assigned to pay only such claims as were then assigned to Sneath, it was legally for “ his own proper use and benefit,” for these claims were legally his. But if the assignment was generally for the benefit of all Bolán & Co.’s creditors, then it was not for the “ proper use and benefit of Sneath.”
To make this an assignment in trust, it was necessary to contradict the deed. This could not be done directly by showing that it was the intention of the parties that the deed, which was absolute on its face, should only operate as an assignment in trust. But if it could be shown under proper pleadings that Sneath had induced Bolán to sign the absolute bill of sale by fraudulently representing to him that under that bill of sale all the creditors would be entitled, or would be allowed to come in for their pro rata share of the proceeds, then the law would raise a trust in favor of the other creditors. But, as we have heretofore in effect said, the sole testimony of Bolán, unsupported by circumstances, cannot establish that fraud in the face of his own deed, which clearly expresses the purpose for which it was given; and, in opposition to the testimony of Sneath, who says the deed was given for the purposes mentioned on its face, and utterly denies any promise on his part to hold those goods in trust for any person; but, on the contrary, states positively he held them to satisfy certain claims which were legally his own, having been assigned to him.
The only circumstance tending to corroborate Bolán in his statement, and which is proved by another witness than himself, is this: *131his partner Smith says that when Bolán asked him to sign the bill of sale, in the presence of A. L. Edwards, (Sneath’s agent) he stated the assignment was made to pay all the creditors pro rata. But Smith does not even assert that Edwards heard this remark, but admits Bolán may have taken him aside to say this. Then, as we said in our original opinion, this is simply the declaration of Bolán, and is entitled to very little, if any weight, in supporting his version of the transaction.
The rule that an Appellate Court will not disturb a judgment founded on a verdict where the testimony is conflicting, does, not apply to a Chancery case tried by the Court without a jury. More especially, if the finding of the Court below is based on testimony contained in depositions, will this Court look into the testimony as if it were an entirely new case. There is no reason why this Court may not judge as well as the Court below of the weight and effect to be given to depositions.
To prove that a deed absolute on its face was given in trust for other purposes than those mentioned in the deed, is not to prove a new and distinct contract, but to vary and contradict the terms of the deed, which is inadmissible.
_ There is nothing in the case of Pierce v. Robinson, 13 Cal., which conflicts with these views. That ease decides, on ample authority, that when a deed is absolute on its face, it may still be proved that the real transaction was intended as a mortgage to secure a debt. But these decisions are really based on an exception to, or qualification of, a general rule. In such case, the nominal vendor is allowed to show not what was said' about the intention of the parties, the object of the deed, etc*, but is allowed to prove the distinct and substantive fact that he was in debt to the nominal vendor at the time he made the deed, either on some past transaction or for some credit given at that time, and that the debt still exists. If these facts are proved, the law declares that the deed shall only operate as a mortgage. In other words, the law under such circumstances gives the vendor an equity in spite of his contract to the contrary.
But the rule in regard to mortgages is peculiar, and does not apply to other instruments. •
*132That Courts of Equity may inquire into the object which induced parties to enter into contracts, and may restrain a party from making fraudulent use of a contract, we have no doubt. But when it is attempted to show that the object which induced the execution of a deed is wholly different from that expressed on its face, then the proof must be clear and satisfactory; for the law will presume that the deed expresses the real transaction between the parties. Not only must it appear that the deed was intended to take effect differently from what is expressed on its face, but it must appear that one of the parties is making some fraudulent use of the deed, before a Court of Equity can interfere in the matter. Under all ordinary circumstances, when a man deliberately enters into a contract under seal, he must abide by the letter of the deed. If it could have been shown here by competent proof that Sneath induced Bolán to make this absolute bill of sale by promising to hold the goods in trust for all the creditors, and that he afterwards converted the goods to his own exclusive use, this would have been fraud. A trust would have arisen in favor of other creditors of Bolán, and relief might have been granted. But the evidence offered was wholly insufficient to establish these facts in opposition to the force of the deed.
A rehearing is denied.