Chamberlain v. Lindsay — 8 N.Y. Sup. Ct. 231

Majority

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CARLOS CHAMBERLAIN and others, Appellants, v. DAVID A. LINDSAY and WILLIAM G. CHITTICK, Respondents.

Headnote

Hew trial—when granted on grounds of surprise and newly-discovered evidence.

This action was brought to recover for debts contracted and payable in England. The defense was that a composition deed had been executed by the debtors, and assented to and approved by the requisite number and amount of their creditors, which, by the terms of the English bankrupt laws, discharged them from their debts, upon compliance with the terms and provisions of the law, under which it was entered into; one of which was that the deed should be left to be registered, within twenty-eight days from the date of its execution. The deed was executed by the defendant, Chittick, personally, and by Lindsey, by Kerr, his attorney. It was dated December 8, and registered December 30. The defendant, Chittick, was examined before trial and testified that he left England November 27, thus showing that he could not have executed the deed on December 3. At the trial, the plain tiff claimed the deed to be invalid, as it appeared that it was not registered within twenty-eight days of its execution. Held, that upon these facts, alone, a new trial should not be granted on the ground of surprise, as defendants’ attorney might, by a reasonable degree of diligence, have discovered the discrepancy between the date of the deed and the time of the defendant Chittick’s departure from England, and have introduced evidence to explain it.

Before the trial, to a question, put by one of the defendants’ counsel, as to what they relied on in opposition to the deed, or what their point in the case was, one of the plaintiff’s counsel replied by asking, “What effect do you suppose the English bankruptcy law has on American debtors ?” And, again, when an application was made by defendants, to dismiss the case from the short-cause calendar, one of the plaintiff’s counsel stated, “ that he believed the case would turn only on questions of law, and that the facts were not in dispute.” Held, that the effect of this conduct was to mislead the defendants’ counsel and induce him to believe that the legal effect, alone, of the proceedings was to be the subject of contest, and that no formal omissions existed in the documents relied upon, and that a new trial was properly granted upon the ground of surprise.

Appeal from an order made at the Special Term, granting a new trial on the grounds of surprise and newly-discovered evidence.

This action was brought by the plaintiffs, merchants at Manchester, England, to recover from the defendants, the sum of $1,283 in gold, on two acceptances given by the defendants to plaintiffs at Manchester, and payable in London, and a balance due for goods sold the defendants by the plaintiffs, in England.

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The answer admitted the acceptance and the sale of the goods, and set up that the defendants were discharged by virtue of a certain composition deed made with their creditors, pursuant to the English bankruptcy law. Pursuant to a stipulation signed by the plaintiffs’ attorney, the English statutes relative to bankruptcy proceedings and the composition deed were read in evidence. The deed was executed by Lindsay, by John Kerr, his attorney, and by the defendant, Chittick, personally. It was dated December 3, 1869, and registered on the 30th day of December.

The deposition of the defendant, Chittick, taken before the trial, was read in evidence, from which it appeared that he was not in England from the 27th day of November, 1869, until September, 1870. The plaintiffs moved the court to direct a verdict in their favor, on the grounds: 1st. That the bankrupt act of Great Britain had no extra-territorial force. 2d. That the deed was not properly attested as to the defendant, Lindsay, the power of attorney having been executed in New York, and not before an attorney or solicitor, as prescribed by the act; and 3d. That the deed was not registered within twenty-eight days from the date of its execution. The motion was granted, and a verdict directed in favor of the plaintiffs for $14,217.78. Defendants’ counsel then moved for a new trial on the grounds of surprise and newly-discovered evidence, claiming that they were induced to believe, by the stipulations of the plaintiffs’ counsel, and from statements made by him, that there was no disputed question of fact, and that the only contest on the trial, would be as to the legal effect of the proceedings; that, on a new trial, they would prove that when the deed was executed by the defendant, Chittick, it was delivered m escrow, to be held until it was executed by Kerr, the attorney of Lindsay, and that it was not executed by him until the 11th of December. The motion was granted, and, from the order directing a new trial, the plaintiffs appealed. All the facts appear in the opinion.

Wm. F. Shepard, of counsel for the appellants,

claimed that the defendants’ counsel had been negligent, and a new trial should not be granted. (The People v. Marks, 10 How., 261 ; Best v. Starks, 24 id., 58; Fellows v. Emperor, 13 Barb., 92 -105; Lawrence v. Ely, 38 N. Y., 42 ; Jacobs v. Morange, 47 id., 59 .) That the deed

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was void, because it was not registered within the time required by the statute. (Re Skinner, 11 Law Times, N. S., 354; 13 Weekly Rep., 114; 10 Juris., N. S., 1137; 34 Law Jour., 9; Re Power, 11 Jur., N. S., 985; 13 Law Times, 451.) That even if the deed were delivered in escrow, it was executed when it was signed and sealed by Chittick, and the twenty-eight days commenced to run from that time. (Perryman’s Case, 5 Coke, 846 ; Coare v. Giblett, 4 East, 85-94; Graham v. Graham, 1 Vesey, Jr., 272; Hunter v. Hunter, 17 Barb., 28 ; Austin v. Hall, 13 John., 286 ; Wheelwright v. Wheelright, 2 Mass., 447 ; Hatch v. Hatch, 9 Mass., 307 ; Hathaway v. Paine, 34 N. Y., 92 ; Tooley v. Dibble, 2 Hill, 641 .)

John E. Bwrril, for the respondents,

claimed that the twenty-eight days, provided for the registration of the deed, did not run until the deed had been executed by all the parties ; that the motion for a new trial was addressed to the discretion of the court below. (Seeley v. Chittenden, 10 Barb., 303 ; Lawrence v. Ely, 38 N. Y., 42 ; Platt v. Munroe, 34 Barb., 291 ; Tyler v. Hoornbeck, 48 Barb., 197 ; Hoppock v. Stone, 49 id., 524.)

According to the notice of the motion, on which the order appealed from was made, the application for a new trial was restricted to the grounds of surprise and newly discovered evidence; for, although it was added that the motion would also be made on other grounds stated, no mention of them was made in the notice.

The court, at the Special Term, appears to have taken that view of the application; for, by the terms of the order, it was the motion for a new trial on the grounds of surprise and newly-discovered evidence, which was granted. The merits of the case are, therefore, not strictly before the court on the present appeal, farther than their consideration may prove incidental in the examination of the reasons existing for the support of the order. Both parties to the action were admitted to be British-born subjects. The plaintiffs were engaged in business as merchants in Manchester, England, and, during November and December, 1869, the defendants were engaged as merchants, carrying on business in New York and in England. Th,e debts in controversy were contracted and payable

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in England. Upon this state of facts, the parties, as to the transactions involved in this action, were subject to the laws of that country, so far as proceedings affecting the demands were taken there.^[3]

During the latter part of the year 1869, a composition deed was executed by the debtors, and assented to and approved by the requisite number and amount of their creditors, which, by the terms of the English bankrupt laws then in force, effected their discharge from their debts, upon compliance with the terms and provisions of the law under which it- was entered into.

These terms and provisions appeared to have been all complied with, excepting the one requiring the deed to be produced and left at the office of the chief registrar, for the purpose of being registered, within twenty-eight days from the date of its execution by the debtor. Whether that was done within the time prescribed, was apparently the point on which the cause was finally disposed of at the trial. For as the deed could be, and was, executed by one of the debtors by means of a power of attorney, that cannot be regarded as a defect in the defendants’ defense, on which they could have been properly or probably defeated.^[2]

The deed itself was dated on the 3d of December, 1869, and it was registered, as the law required it to be, on the thirtieth of that month. So that, on the face of the paper, the law seemed to have been literally compli ed with in that respect. But before the trial took place, the debtor, who in person executed the deed, was examined as a witness in the case at the instance of the plaintiffs, and, without his attention being in any manner directed to the precise time when the deed was executed, testified that he left England for New York on the 27th day of November, 1869. This circumstance rendered it at once apparent that he could not have executed the deed on the third day of. December, the day of its date, but must have done it on or before the twenty-seventh of November. No inquiry was made for an explanation of this circumstance, nor was the attention of the witness, in any manner, directed to its existence, and the fact itself seems to have escaped the observation of the defendants’ attorney and counsel. It plainly might have been

† † Re Fulcher, 1 Chancery Appeal Cases, 519.

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discovered by a reasonable degree of attention to the evidence given by the witness, in view of the date appearing- upon the face of the deed. And for that reason, if the application had proceeded solely upon that ground, the omission to devote that degree of attention to the case, before the trial was brought on, would have formed a' complete answer to it.

Parties to legal proceedings, are required to use attention and diligence in the proper preparation of their causes for trial; and if either fails to do that, and, consequently, is defeated when he might otherwise have succeeded, the fault is his own, for which the courts can ordinarily supply no remedy. But it is claimed, by the defendants’ attorneys and counsel, that they were prevented from discovering this discrepancy between the statements of the witness and the date of the deed, by assurances, received from the plaintiffs’ counsel, which induced them to anticipate an entirely .different objection to the defense made under the composition deed. And sufficient reason is disclosed by the affidavits used upon the application, to warrant the conclusion that such was the case. It is not supposed that the plaintiffs’ counsel really designed to deceive the attorney for the defendants with whom their interviews were held. But it is quite apparent that they designed to respond to his inquiries, as to the position they intended to take by way of answer to the defense, in such a manner as would not be likely to disclose the real defect they had then discovered to exist. They had the undoubted right not to respond at all, for it was no part of their duty to disclose the precise course which they designed to take in the trial of the cause, or the reason on which they would endeavor to recover a verdict for the indebtedness sued upon. But when they waived that, and undertook to respond to the inquiries made, it*should have been done in such a manner, ns not to leave a palpably erroneous impression on the mind of the person making them.

When the stipulation was made, agreeing upon certain evidence to be given on the trial, one of the attorneys for the defendants, inquired of one of the plaintiffs’ counsel what they relied on in opposition to the deed, or what their point was in the case. And the reply was made by asking the question, “ What effect do you suppose the English bankruptcy law has on American debtors ?”

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• The ordinary effect of'such an interview, would be to produce the conclusion, that the legal effect, alone, of the proceedings under the bankrupt law, was to be rendered the subject of contest at the trial.

It was calculated to lure the attorney, particularly if he was apt to be confiding as to his adversary’s statements, into the belief that no formal omissions existed in the documents relied upon by the defendants as their defense. And it was not unreasonable that the trial should be undertaken with that expectation existing on the part of the defendants. The natural course to be taken, would be to prepare and fortify the defense, so far as that objection required it to be done, and devote no particular attention to it in other respects.

Upon another occasion, preceding the trial, when an' application was made by the defendants’ counsel, to dismiss the case from the calendar of - short causes, one of the plaintiffs’ counsel stated-, by way of answer to it, “ that he believed the case would turn only on questions of law, and that the facts were not in dispute.” And yet the fact required for the proper presentation of the questions of law, which was found to be controlling in the case, was one which did require to be proved, and it was proved by the deposition of one of the defendants.

The trial was opened, and proceeded in such a manner as to indicate the existence of care in avoiding all disturbance of the conviction abiding in the minds of the defendants’ attorneys. And it was not until the case was in a condition to be finally disposed of, that their minds were enlightened upon the real point in controversy in the action. Then they asked leave to have a juror withdrawn, for the trial to stand over until further preparation could be made to meet the plaintiffs’ objection, but that was refused on account of a supposed want of authority to conform to that request. The case was adroitly managed by the counsel for the pi Jffs, and their conduct might deserve the admiration of observers, were it not for the possibly disastrous effects resulting from it to the defendants.

It is the duty of courts of justice, to secure the trial and disposition of legal controversies appearing before them, in conformity to the legal rights of the parties, so far as that may be practically done; and the sanction of the ingenious devices made use of ■ the

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present case, which probably misled the defendants’ attorneys and counsel to their prejudice, would plainly violate that obvious duty. While parties and their counsel are not obliged to inform those opposed to them, what their precise course of action may be upon the trial, they certainly are obliged to avoid saying and doing what may have a direct tendency to mislead them. And if they do not, and gain an advantage by means of an erroneous impression, voluntarily produced for the purpose of affording an opportunity to secure it, the court is bound to deprive them of it, where that appears to be required to promote and attain the ends of justice.

The defendants showed, in support of their application, that they could prove that the deed was delivered in escrow at the time when it was executed by the first debtor, and so remained until after the 3d of December, 1869, which they insist will answer the statutory requirement that it should be left for registry within twenty-eight days after its execution. The solicitor, whose affidavit was produced in support of the defendants’ motion, stated that the deed would only take effect, as an executed instrument, from the time when the event happened on which it was held in escrow, while three other eminent English barristers, among whom is the present lord chancellor, have concurred in a different opinion.

Under ordinary circumstances, this preponderance against the defendants would properly lead to a denial of their motion. For there would be plausible ground, at least, for concluding that another trial could not change the result. But there is, after all, a probability that the defendants’ solicitor may prove to be right in his views, notwithstanding the authority opposed to him. And as long as it is the duty of the court to withhold encouragement from the course of practice which prevented the defendants from presenting the point at the trial, that probability is sufficient to justif, ¡affirmance of the order;^[3] particularly, as the point in dispute can be more effectually examined and decided upon evidence taken on notice, than ex parte affidavits. And there is room for doubt as to whether the requirement of the statute was not too literally construed against the defendants. Whether it was or not, it is not necessary or proper to decide at this time.

* Tyler v. Hoornbeck, 48 Barb., 197 .

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It is sufficient that a fair administration of justice appears to require that the defendants should he afforded an opportunity for securing a decision of the point on which they now rely for the success of their defense, and which they were deprived of by the statements and conduct of the plaintiffs’ counsel.

The order appealed from, should be affirmed, with costs to abide the final result of the action.

Davis, P. J., and Westbrook, J., concurred.

Order affirmed, with costs to abide the event.

Footnotes

* 2 Kent’s Com., 459, marg. paging; Story’s Conflict of Laws, §§ 335, 338, 340.