Le Grand Cannon v. Norton

(In Chancery.) The answer of one defendant is not evidence for the other. An answer, not responsive to the bill, setting up matter in defence or avoidance, must be proved, (¿uare, Whether the want of parties to a bill can be taken advantage of on the hearing of an appeal from the chancellor. When the want of parties is not insisted on by demurrer, or plea, it cannot be urged at the hearing, unless it manifestly appears that a decree eánnot be made without bringing other parties before the court.

This was an appeal from a decree of the court of chancery against the defendants. The orators, in their bill, charged, in substance, that one Cyrus Adams, on the 23d day of August, 1828, procured the defendant, Norton, to sign a note with him to one McClure, and, to indemnify Norton for signing such note, indorsed to him sundry notes against different individuals, amounting to about seven hundred dollars; that the note so given to McClure was usurious and void; that Adams was indebted to “ u September term, 1830, of the county court for Rutland county for the sum of $978.25; that an execution issued upon said judgment and Adams was committed to jail thereon, and _ . . ,. . , . , J , , . afterwards made application to be admitted to the poor debt- or’s oath; that, on that occasion, he made an assignment of all his interest in the demands in Norton’s hands, to the ora* tors; that Norton was present and had notice of, and then recognized the assignment, and admitted that' he had five hundred dollars then in his hands, subject to said assignment when he should be exonerated from the note so given to McClure ; that the note to McClure was surrendered up to Norton without payment and Norton was fully discharged therefrom on the sixth of January, 1836 ; that the orators then demanded 'of Norton the notes that had been indorsed to him by Adams for security, or the proceeds thereof, and Norton refused to deliver the notes to them, or account therefor to the orators; that after the assignment Was made by Adams to the orators, and after notice thereof to Norton, the latter delivered said notes, or the moneys collected thereon, to the defendant Slason, and took a bond of indemnity from Slason, both against the note to McClure and the assignment to the orators. And the orators prayed that an account be taken of the proceeds of said notes indorsed by Adams to Norton ; that the defendants be decreed to pay to the orators, &c., and for further relief. The defendant, Norton, in his answer, admitted all the material facts alleged in the bill, except that part which charges that he admitted that he had the sum of $500 in his hands, subject to the assignment to the orators; that charge he wholly denied. And he alleged, that, in May, 1830, the defendant, Slason, notified him that Slason, together with Philip Pond and John "Williams, had obtained the consent of Adams that the proceeds of the notes, indorsed by Adams to Norton, might be applied in part payment of debts due from Adams to Slason, Pond and Williams, as he believed, in equal proportions; that on the first day of August, 1830, the defendant with the consent of Adams, agreed to transfer and deliver all of said notes to them, and they agreed to give the defendant, Norton, their bond, in the penal sum of one thousand dollars, to indemnify him against the note given to McClure; that afterwards a part of said notes, and a statement of the remainder, and their proceeds, in the hands of Orson Clark, were delivered by Norton to Slason, for Slason, p0Q(j an¿ Williams, and on the 22d day of June, 1831, Pond anc[ g]ason executed their bond to Norton to indemnify him against the note given to McClure and the assignment to the orators. The defendant, Slason, in his answer, alleged, that in the summer of 1830, he, with Pond and Williams, agreed with Adams that they (Slason, Pond and Williams) should receive the benefit and proceeds of the demands indorsed by Adams to Norton on being indemnified against the note given by Adams and Norton to McClure, and that the defendant Slason, and Pond, did indemnify Norton against said note in the manner stated in Norton’s answer; that the defendant, Slason, had never received any of the proceeds of the notes indorsed by Adams to Norton, except the amount due on certain notes against James Merrill and about thirty dollars on a note against Joseph Brown; that other of said notes had been placed in the hands of Orson Clark for collection and the money collected by him on such notes remained in Clark’s hands, with the understanding that it was to be applied for the use and benefit of Pond, and that Pond, Williams, and the defendant, Slason, had not made a full settlement of said business among themselves. The defendant, Slason, admitted that Norton had paid him a small sum to apply on his note against Adams; and he further alleged that all the proceeds of the notes so received of Norton were not sufficient to pay the sums that Adams justly owed to Slason, Pond and Williams. The answers were traversed and testimony was taken. The facts found from the testimony sufficiently appear in the opinion of the court. I. Between two sets of creditors of an insolvent debtor, chancery will not interfere to take the assets from the possession of one and give them to another. In the view of chancery, Slason and Pond have equally as meritorious a claim upon the notes indorsed by Adams to Norton as the orators have. The bill, so far as regards Norton, is a bill for a discovery. He is emphatically the orator’s witness. His answer contains a clear history of the case, and its truth and correctness cannot be doubted. ■ The answers of Slason and Norton materally corroborate each other. II. Before a decree should be made, Pond ought to be made a party. I. All the material allegations in the orator’s bill are admitted'by the defendant, Norton, in his answer, and are not denied by Slason. II. The affirmative allegations in the answer, in avoidance, are not responsive to the bill, are traversed, and are not supported by proofs. 2 Mad. Ch. 446. Hart v. Ten Eyck, 2 Johns. Ch. R. 87, and note. 1. The rule is, that, between equal equities, the court will not interfere to disturb possession, supported by legal title. Hartley v. 0,Flaherty, 1 Beatty, 61, 77 ; or between two creditors of an insolvent debtor, equity will not interfere, unless one can establish a legal title. It becomes necessary, therefore, to examine who has the legal title in this case. To support the legal title in the orators, we refer to the assignment from Adams, and the full admissions of the defendant, Norton, and the testimony. The defendants show no assignment, either in writing or by parol. Slason’s answer is not responsive, and is not evidence to prove that fact; but, if it was evidence, it does not established the title in the defendants. The answer of Norton is not evidence for Slason. 2. There is no evidence that Slason, Pond or Williams, were the creditors of Adams. This should be clearly established by direct proof and should not be left to be inferred by implication. Slason’s answer is not responsive, nor did it establish any debt either in himself or Williams or Pond. If he had a claim, should he not have specified what that claim was, that the court might judge whether it was or was not a valid claim. We think it clear from the bill, answers and proof, 1. that the orators have established a debt against Cyrus Adams, and an assignment to them of all his interest in the demands N°rlon’s hands. 2. That Norton has been indemnified against the McClure note. 3. That there is no evidence to gg^ablish a debt in favor of either Slason, Pond or Williams against Cyrus Adams. 4. That there is no evidence of an assignment from Adams to Slason, Pond or Williams, and that the orators are entitled to have the decree of the chancellor affirmed.