EDGAR vs. McARN, 22 Ala. 796

CHILTON, C. J. The defendant, doubtless with a view of showing that he had sustained a loss which drove him into bankruptcy, and which swallowed up all the profits that might be supposed to have accrued to him from the business in which the plaintiffs had proved he was engaged, introduced evidence of his having dealt largely in cotton in the years ’86, 7 and 8, and showed that such business generally proved disastrous to those engaged in it during these years.

In connection with proof of the general fatality of the business, he asked a witness: “Did you not lose largely on cotton during these years ?” The witness replied, that he had lost $50,000; and the legality of this question and answer, forms the first point for our consideration.

Conceding that it was proper for the defendant to encounter the presumption which the plaintiffs may have raised, of funds being in his hands at the time of filing his petition, by showing that he had been engaged in a business which generally resulted in ruin to those who followed it, upon the principle, that what generally happens, according to the laws of trade, to those who pursue a particular business for a given period, may reasonably be supposed to have happened in each particular case, (I Stark Ev. 55;) yet we are aware of no rule -of law, which authorizes any inference to be drawn, as to the profit or loss of one individual, from what another, wholly disconnected from him, may have made or lost while engaged in a similar business.

Concede that the witness lost $50,000; the conclusion that the defendant lost anything, is clearly a non sequitur from such a predicate. Non constat, the loss of the witness, by a turn of good fortune, may have resulted in the gain of the defendant. At all events, particular losses depend so much upon the want of prudence, management, skill and foresight of the party, as well as upon many fortuitous circumstances against which it may be difficult to provide in the particular case, that what happens to one furnishes no reasonable inference or presumption that the same thing occurs to another.

It is a general rule, founded on the clearest principles of reason and natural justice, that the acts, declarations and conduct of others, with which the party has no connection, shall not be given in evidence against him, so as, either directly or by inference, to affect his interest. The law considers such matters as res inter alios acta, and excludes all evidence concerning them. 1 Starkie’s Ev. 61. The proof educed by the question before us, was clearly of this character ; and as we can readily perceive how it may have prejudiced the plaintiffs’ case, the court committed an error in its admission.

We have carefully examined the cases to which we have been referred, and we find nothing in them to shake our confidence in the correctness of the conclusion we have attained. The case of Bradford v. The Roylston Marine and Eire Insurance Co., 11 Pick. Rep. 162, is the strongest we have been enabled to find, at all favoring the view insisted on by the defendant. That was an action against underwriters, to recover for an alleged sea damage to bales of blankets, purchased in Great Britain and shipped to this country.

The defence set up was, that the blankets were damaged in the manufacture or packing; and evidence was offered, to show that the injury was of a peculiar kind, and different from saltwater damage; and the court allowed the defendants to make proof that other bales, purchased by others from the same manufacturer, and imported in the same year by other vessels, were damaged in the same way.

It is obvious, that the facts of that case readily distinguish it from this; for, in this, the effort is to prove, by the result from a course of conduct of a stranger for several years in a particular business, that tbe like result bas happened to the defendant, because he was engaged in the same business during the same time; but this, we have shown, is a non seguitur; the result was caused, it may be, by numberless circumstances which were not, and perhaps could not have been detailed to the jury, and which it would be most improbable could apply alike to both; whereas in the case cited, the exact analogy as to the peculiar character of the injury between the bales of blankets shipped by the plaintiff and others, and as to all the circumstances material to the formation of a correct conclusion respecting the nature of the injury, existed as real facts, — “inanimate witnesses,” — open to observation, and from which the jury might reasonably draw an inference that, as the sea water had not occasioned the injury in the one case, it did not in the other.

The conclusion which we have attained is, however, well sustained by the authorities. See 1 Starkie’s Ev. 60; Holcombe v. Hewson, 2 Camp. 391; Phœnix Eire In. Co. v. Philip, 13 Wend. 81; Doe v. Sisson 12 East 62-65; Furneaux v. Hutchins, Cowper’s Rep. 807; 1 Greenl. Ev. § 52. 2. When the issue involves an inquiry as to an alleged fraud, which cannot usually be shown by direct proof, and at the same time may not be inferred from facts and circumstances not inconsistent with fairness and honesty, the law justly allows great latitude in the admission of indirect and circumstantial proof.

So, in this case, the plaintiffs were permitted, in order to raise a presumption that the defendant had funds in hand when he filed his petition which he fraudulently concealed, to show that before that time he had received considerable sums of money, was engaged in merchandizing and had purchased cotton, &c.

To repel any inference which the jury might draw from this proof prejudicial to him, and without going into a detailed account of his business transactions for the several years during which the plaintiffs had shown he was employed, the defendant was allowed to prove that all the persons engaged in the purchase of cotton in Montgomery, and at the same time with himself, had failed; and this, notwithstanding it was shown that he had sold his goods for cash, while the others had sold on a credit. In Powell v. Knox, 16 Ala.

Rep. 471, we said: “It would often be most difficult, and sometimes utterly impracticable, for a party to account for all tbe property be was possessed of years previously; and to impose upon tbe bankrupt tbis duty, would be most onerous.” Indeed, sucb an account, were tbe bankrupt prepared with all tbe proof, would require more time, in many cases, than tbe law allows for tbe trial of all tbe cases upon tbe calendar.

Tbe rules of evidence, wbicb are adapted to tbe convenient administration of justice, and wbicb are not so stringent as to require impossibilities, we think, justified tbe defendant in rebutting, by proof of tbe disastrous nature of tbe business in wbicb be was employed, tbe inference of bis having received profit therefrom.

It was also permissible as a circumstance, (although by itself but weak,) tending to show that tbe defendant shared in tbe common disaster wbicb overtook all those engaged in tbe cotton business, during tbe years mentioned, thus requiring tbe expenditure of tbe means derived from other sources to make good the demands wbicb accrued against him on account of tbis. The objection that sucb testimony amounts only to matter of opinion, cannot be supported. Tbe failure of a party in business, is a matter of fact; tbe extent of bis loss, however, may be a matter of opinion. 8.

Tbe defendant bad tbe right to prove tbe manner in wbicb be conducted bis business, as that be was a reckless cotton buyer; for tbis served to aid tbe jury in determining' whether bis business resulted profitably or otherwise; at least, it was a circumstance affording some evidence that bis operations resulted unfavorably; since experience teaches us that those who are wanting in prudence and caution in their business transactions, more frequently fail of success than those who possess and exercise those qualities. 4.

Without deciding upon tbe question, whether tbe proof that tbe defendant, individually and jointly with another, had bought cotton within the three years next preceding the trial, amounting in the aggregate cost to $284,000, was competent, as affording any reasonable inference that the defendant had moneys wbicb he fraudulently concealed at tbe time of filing bis petition, we are quite clear, that assuming it to be competent, it was not permissible for the defendant to rebut it, by showing that nine-tenths of those engaged in tbe same busi-mess were insolvent.

Sucb proof is inadmissible, upon the same principle wbicb we have before stated as applicable to proof of loss bj another individual. It does not follow, that, because there are nine agents to one principal, or nine insolvent to one solvent person, engaged in buying cotton, the defendant is insolvent, or did not buy on his own account. This circumstance, which is doubtless accidental, has no connection whatever with the defendant’s condition, and throws no light upon his transactions. 5.

The same may be said of the proof that merchants in Mobile employed persons in Montgomery to buy cotton for them at 50 cents per bale. If the defendant was so employed, he could have proved it; but surely it does not follow that, because some were so employed, all, and consequently the defendant, were so engaged. 6. There was no error in admitting the defendant to read the account and letters attached to the deposition of Daniel B. McArn. They were in response to the cross-interrogatories, and it was not for the plaintiffs, after they found the proof would militate against them, to exclude it.

After it was regularly taken and filed in court, the defendant acquired an interest in the proof, and he had the clear right to use it, when the plaintiffs declined doing so. These papers form a part of the deposition, and are not like papers merely called for but not offered. 7. There was no error in allowing Judge Martin to be examined, after the defendant had announced that he had closed his testimony.

It was entirely competent, nay, it was the duty of the court, if the justice of the case required it, upon the. application of the defendant, to allow additional proof, without which the merits of the case might fail of being attained. . The court had, and exercised very properly we doubt not, a discretion in the matter, and its action in relation thereto is not subject to be revised on error. Ivey v. Phifer, 18 Ala. R. 821-’5. 8.

What the defendant said to Judge Martin, as the predicate for his legal opinion, was not evidence of the facts stated by him, but was properly allowed, in connection with the legal advice, as showing the grounds upon which it was based, and as explanatory of the advertisement. If the advertisement was tbe result of a mistake, either of law or fact, as to what constituted a partnership, the party should be allowed to show the mistake, and thus avoid the prejudice which might result from it as tending to establish funds in his hands when he applied for a discharge. 9. As to the charge, a few words may suffice.

It was objectionable, as withdrawing from the consideration of the jury facts, which, however weak, yet tended to show that the defendant had funds at the time of filing his petition, and making the case turn exclusively upon the inquiry whether the defendant had accounted satisfactorily for the goods and cotton which were found in his possession, and were purchased by him since his discharge.

Had there been no evidence, except in relation to these goods and the cotton purchases which are mentioned in the charge, then it would have been most unquestionably correct; but there was proof of previous dealings in Montgomery and Mississippi; and although the proof may have been slight, yet it was not competent for the court virtually to say to the jury, “You must disregard this, if certain other facts occurring after the discharge are established.” True, the judge had previously charged upon the other facts, at the request of the counsel; but taking these charges into the account, we do not think the error is cured.

The jury might well have inferred, that, if they found the facts embraced by the last charge in favor of the defendant, their inquiry should terminate; as the court had said to them that, if the goods possessed by Malcolm since his discharge belonged to John McArn, or the cotton was purchased by him with funds realized from his business since his discharge, or with capital borrowed, &c., then they must find for the defendant. It is unnecessary for us to go farther, and lay down any rules for the future conduct of this cause. What was said in Petty v. J. B. & D. Walker, 8 Ala. Rep. 379, and Powell v.

Knox, 16 ib. 364, sufficiently explain the principles of law applicable to it, and render it unnecessary that we should say more. Let the judgment be reversed, and the cause remanded.