Opinion
12-30-1887
TROXALL et al. v. SILVERTHORNE et al.
L. De Witt Taylor, for complainants. J. N. Roseberry, for defendants.
Bill to foreclose. On cross-bill by Elizabeth Silverthorne.
L. De Witt Taylor, for complainants. J. N. Roseberry, for defendants.
BIRD, V. C. William Silverthorne, the husband of Elizabeth, in April, 1879, gave two bonds,—one for $1,500, to his brother David B. Silverthorne; and one for $3,464, to Elizabeth, his wife, or, if not to her, she now holds it in her own right. At that time William Silverthorne was indebted to the Phillipsburgh Bank upon a note of $1,000, on which Moses A. De Witt was liable as indorser. He was also indebted to the Belvidere Bank on a note of $500, on which his brother David B. was indorser. The bond for $1,500 was given to secure Moses A. De Witt and David B. Silverthorne against all liability as such indorsers, and both of said bonds were secured by a mortgage upon the real estate of the said William Silverthorne. In February, 1887, David B. Silverthorne assigned all his interest in the said bond and mortgage to the complainants Lorenzo Troxall and David A. Brands, together with his other estate and assets, empowering and authorizing them to make sale and disposition thereof for the purpose of raising money to pay his debts, as far as the proceeds thereof would extend. February 18th, the next day after such assignment to them, they filed their bill to foreclose said mortgage, acknowledging the rights and interests of Elizabeth Silverthorne in the said mortgage, and making her a party defendant. Process of subpoena was presented to her by Mr. Taylor, the solicitor of the complainants, who requested her to acknowledge service, which she did, and who informed her that the object of the suit was to foreclose said mortgage. Afterwards her husband requested her to come from Newark, where she was then living, to Belvidere, where he was still living, to meet Moses A. De Witt and the solicitor of the complainants, for the purpose of an interview, and of coming to some understanding with respect to their business relations; Mrs. Silverthorne being interested in the said bond which she held in her own right, and having some interest in Mr. Moses De Witt, because she held a note against him of $866, with nearly one year's interest due upon it at that time, and he being indorser on her note for $125. She came to Belvidere, and met Mr. De Witt, Mr. Taylor, and her husband, in the office of Mr. Taylor, with whom at that place she had a protracted interview, of an hour and a half to two hours, on the fifth day of March, 1887. The result of this interview was an agreement in writing between Moses A. De Witt and Mrs. Silverthorne, in which it was recited that she held a note for $866 against said De Witt, and that he was liable on said bank note for $1,000, and also upon a note given by Elizabeth Silverthorne for $125; and in which it was further recited that said De Witt held a certificate for stock of certain slate property in Pennsylvania, and also recited that an agreement had been entered into between said Troxall and Brands and said David B. Silverthorne and William Silverthorne, concerning the proceeds to be raised out of the property then under foreclosure, being the property mentionedin these proceedings of William Silverthorne, whereby the said De Witt, in case he should pay the said Phillipsburgh Bank note, was to have the proceeds received from the sale of the property so under foreclosure; after reciting which, it was agreed between the said De Witt and the said Elizabeth that she would deliver up the note that she so held against the said De Witt, and that, in consideration thereof, the said De Witt agreed to pay the amount of her note in the Belvidere Bank of $125, and also to pay the note in the Phillipsburgh Bank of $1,000. It was further agreed that the said De Witt should retain the said certificate of stock, and also his interest in the bond, secured by the mortgage on the property named in this bill of complaint, out of both of which he was to be repaid the amount he should pay in excess of the amount of the note which Elizabeth should deliver up to him; but upon payment of the amount of such excess, as aforesaid, whatever remained the said Elizabeth was entitled to, and to her it was to be assigned; however, "subject to the conditions regarding said bond as set forth in the agreement made between Troxall & Brands and D. B. & Wm. Silverthorne."
The said Elizabeth claims that she was misled, deceived, and defrauded in that transaction. She now insists that if she had understood it, she would not have signed that agreement. The result of her contention, as expressed in the cross-bill, which she has been permitted to file, is that she is entitled to the proceeds of the sale of the property under foreclosure to the extent of the $1,000, the value of De Witt's interest therein. In other words, she says that the result of that agreement subrogates her to the rights and interests of Moses A. De Witt, and that as that $1,500 bond was given to secure Moses A. De Witt against all liability upon the payment of the $1,000 note in the Phillipsburgh bank, and that, as such indorser, after paying the note, he had a right to enforce his claims, she is now entitled, to the extent of the money that she advanced to De Witt under this agreement, to the same rights, and to be protected in those rights in equity in this suit. Has she a right to be so subrogated? She admits that there was no agreement that she should be so subrogated. She insists, however, that it was her understanding that that bond and the mortgage, to the extent to which it secured the bond, were to be assigned to her. But according to her own testimony, an understanding upon her part was the extent of it; nothing more. There is no evidence of Mrs. Silverthorne, or any one else, going to show that a word was said at that meeting upon which she could reasonably found any such expectation, except as contained in the agreement between them. The agreement which has been recited, seems, to my mind, to enbody the entire transaction fully, in the whole and in every part. To this agreement I will again refer.
It is insisted that Mrs. Silverthorne, being a married woman, will be protected by this court in the same manner and to the same extent that the court of chancery protects infants. There is no doubt but the court of chancery, or any other court, would consider with very great care, and would scrutinize with exceeding nicety, the conduct of parties dealing with a married woman, unaccustomed to business and unskilled in the management of affairs, when it should be made to appear that some decided advantage had been gained over her, and especially so when it is alleged that those engaged in the transaction with her had been depended upon by her as her counsel or otherwise, or when it should be alleged that her husband, while pretending to be a friend, was really hostile. From this stand-point I shall consider this case, although I do not desire to let the occasion pass without remarking that, since the statutes of our state have conferred upon married women the rights, powers, and privileges which they have, permitting them to hold property in their own name, and to transact business independently of their husbands, the courts must, necessarily, to a greater extent than formerly, place married women upon the same plane and hold them amenable to the same rules that it does others; what may amount to deception or fraud in one case being equally applicablein the other, giving no more force or effect to it because the party complaining or resisting is a married woman than in the other. In every such case, the only question is: "Has fraud been practiced?"
The testimony has not satisfied me that Mrs. Silverthorne was in any sense deceived or misled, or that she had any grounds to expect anything in return for what she did, or agreed to do, than what is expressed in the writing which she signed. It is true, the transaction concerned her husband's affairs, as well as her own and Mr. De Witt's; but it is equally true that the object of the meeting was a settlement or a compromise of the matters pending between them. She voluntarily agreed to surrender to Mr. De Witt the note which she held against him, upon consideration that he would pay off and discharge the note, upon which he was liable as indorser, given by her husband to the Phillipsburgh Bank for $1,000, and upon his paying the $125 note in the Belvidere Bank, for which she was to have all the surplus that would arise from the sale of the slate stock, and from the proceeds of the $1,500 bond after De Witt was fully paid, which bond was, however, subject to the rights of Troxall and Brands, under the assignment to them made by David B. Silverthorne, which it is very important to bear in mind, and also the fruits if any of a suit then pending in the court of errors and appeals.
To get at the legal principles involved, or rights of Mrs. Silverthorne, we must first understand the exact situation. At the, commencement of these negotiations, in the office of Mr. Taylor, she was simply a creditor of Mr. De Witt. She had no interest whatever at that point of time in the $1,500 bond. In surrendering her note of $866 to Mr. De Witt, she enabled him the better to pay the note of her husband for which he was liable as indorser in the Phillipsburgh Bank, and her own note in the Belvidere Bank. Up to that point, certainly, she was not a surety or indorser, and had no equitable rights to stand upon. Up to that point she could not claim any benefit of the principles of subrogation; for she had done nothing that would warrant her in claiming to stand in the place of another. Had she voluntarily advanced to Mr. De Witt the amount due upon her husband's note, and the amount due upon her own note, being $1,125, with interest, she could not then have claimed that she was entitled to the proceeds of this bond, as Mr. De Witt could have claimed, had nothing more appeared than her voluntarily advancing such an amount of money. She was not under any obligations to advance the $1,000 of that money. By no possibility could she have been compelled, in case of the failure of William Silverthorne, to make such payment. Hence the general principles controlling the law of subrogation do not embrace Mrs. Silverthorne in this particular instance, unless some agreement by the parties interested, which they were capable of making, placed her on a different footing. Was any such agreement made? Mrs. Silverthorne herself admits that there was no such express agreement. As before stated, all that she insists upon is that it was her understanding that this bond, and the mortgage, so far as it secured the bond for $1,500, was to come to her. But the agreement which she signed expressly states that, at that time, this bond and mortgage had been assigned by David B. Silverthorne to the complainants, so that she fully understood that, so far as the parties were concerned with whom she was then dealing, they acknowledged the rights of the complainants, and through them the rights of the creditors of D. B. Silverthorne for whom they (the complainants) held the said bond and mortgage. And besides this, the agreement which she signed shows that other considerations than that of subrogation controlled her. It shows that her husband's note was to be paid; that her own note for $125 was to be paid; that she was to have any surplus that arose from the sale of the slate stock, which was valued at between $400 and $450; and that she was to have an equal interest with other creditors in the arrangement made with the complainants in this suit. It is also shown that a suit was pending on appeal, from which, in case theappellant (her husband) was successful, he would recover over $600, which the said Elizabeth was also to have the benefit of. But the appellant was not successful, and she gained nothing from that source. Thus it appears that an effort was made to secure Mrs. Silverthorne against loss, although unsuccessful. Has she any means of redress? Can she make any claim on the ground of fraud? None whatever that I can discover. It has not been shown that anything was misrepresented, or that any fact was concealed.
From the evidence presented, and from the tenor of the discussion, I have felt myself obliged to consider the question of fraud. But there is another view of the case which I cannot disregard. It arises out of the agreements in evidence,—one between the complainants and David B. Silverthorne, and one between Elizabeth Silverthorne and Moses A. De Witt. The former agreement shows the terms on which the complainants took the assignment of the said $1,500 bond, and the mortgage which secured it. One of those terms was that, after paying the costs of said suit on appeal, and a note of $146 of said David B. Silverthorne, "the balance remaining, whatever that sum may be, is to be applied by the said party of the second part [the complainants] to the payment of a certain note, [the said $1,000 note,] and if said note is paid by said Moses A. De Witt before said mortgage is canceled, then the balance, if any there should be from said mortgage so assigned, to be paid over to said Moses A. De Witt." The agreement between said Moses A De Witt and Elizabeth Silverthorne expressly provides, as above stated, that it is made subject to the agreement between these complainants and the said D. B. Silverthorne. Now, has Elizabeth any rights, considering the two agreements, and also the fact that she advanced to De Witt the amount due upon the note of $866 she held against him, less the amount due upon the note of $125, which he had indorsed for her? De Witt used that money to discharge those notes; and the bond of $1,500, and the mortgage made to secure it, were made expressly to secure De Witt against the payment of the $1,000 note. And the agreement by which the complainants took and held said bond and mortgage directed them to pay to said De Witt a certain balance thereof in case he should pay the said $1,000 bank-note, and made no other disposition whatever of the said balance. As the said bond and mortgage were originally given to secure De Witt, so this agreement expressly directed that he should be reimbursed. The complainants can do nothing else with it. It is conceded that De Witt has paid the $1,000 note.
Who, then, in equity, is entitled to the balance of that money? De Witt is not, for he has been fully reimbursed; the complainants are not, for they have contracted only to hold it for De Witt; the mortgagee, David B. Silverthorne, is not, for he assigned away all the interest he had. Who, then, in equity, as the proof stands, is entitled, leaving Elizabeth out of view? Beyond doubt, the mortgagor, William Silverthorne. He it was who gave the mortgage, and he gave it to secure his brother, David B., and Moses A. De Witt against liability as indorsers. In the case of De Witt, that liability has been discharged, in a great part, if not wholly, by Elizabeth, the wife of William, and most plainly at the special instance and request of William. The proof is as full as can be desired that she surrendered her note against De Witt at the solicitation of her husband, and to enable De Witt to pay the said note, which he had indorsed for her husband. At that time, too, De Witt still possessed all his rights to said bond and mortgage. He had never assigned nor surrendered them in any way, until he signed the agreement with Elizabeth, in which it was expressly provided that it was made subject to the agreement made between D. B. Silverthorne and the complainants, which gave said balance to De Witt, and without which he would have been entitled to the $1,000 and the accruing interest.
On the ground last presented, I think Elizabeth Silverthorne is entitled to the $1,000 due on the said $1,500 bond, with interest, less the amount of hersaid note for $125 and the interest which accrued thereon, and less the note of David B. Silverthorne for $146 which De Witt paid, and less the costs of the said appeal which, it is said, were paid by complainants. I will so advise.