This plea sets up new matter, to avoid the in- | mitted to the plaintiffs, and that this was done, strument upon which the action is founded, without the consent, direction, or authority of and concludes to the country. And it may him, the said Joseph Duncan. Is this enough well be questioned, whether upon the best and to avoid the instrument and bar the recovery? soundest rules of pleading it ought not to have It certainly is not; for the seals might have concluded with a verification. Chitty, in his been affixed by a stranger without the knowl Treatise on Pleading (1 Chitty, 590), says it is edge or authority of the plaintiffs, and would an established rule in pleading, that whenever not have affected the validity of the instru new matter is introduced on either side, the ment. The plea not alleging by whom the pleading must conclude with a verification, in seals were affixed, it is open to two intendorder that the other party may have an oppor- ments. Either that this was made by the tunity of answering it. And this rule has the plaintiffs, which would make the instrument sanction of many adjudged cases. In the case void, or that it was done by a stranger, which of Service v. Heermance (1 Johns., 92), the court would not invalidate it. And what is the rule say there is no rule in pleading, better or more of construction of such a plea? It is, that it is universally established, than, that whenever to be construed most strongly against the denew matter is introduced the pleading must fendant. This is the rule laid down by Chitty conclude with an averment. And the reason, (1 Chitty, 578), and in which he is supported say the court, is obvious, because the plaintiff by numerous authorities. And the reason asmight otherwise be precluded from setting forth signed for this rule of construction is, that it matter which would maintain his action, al- is a natural presumption, that the party pleadthough the matter pleaded by the defendant ing will *state his case as favorably as [*111 might be true. And in Henderson v. Whitby he can for himself. And if he do not state it et al. (2 Durn. & East, 576), Buller, Justice, in with all its legal circumstances, the case is not giving the judgment of the court, said: By in fact favorable to him; and the rule of conthe rules of pleading, whenever new matter is struction in such case is, that if a plea has on introduced, the other party must have an op- the face of it two intendments, it shall be taken portunity of answering it. So that the replica most strongly against the defendant; that is, tion setting up new matter concluded properly says he, the most unfavorable meaning shall be with an averment. Numerous authorities, both put upon the plea; a rule which obtains also in England and in the United States, might be in other pleadings; and a number of cases are cited in support of this rule. But there is cer- put, illustrating this rule. The present plea tainly no little confusion and diversity of opin falls directly within it. The plea not alleging ion appearing in the books with respect to the by whom the seals were affixed, it is left open question, when the pleadings ought to conclude to intendment, that it was done either by the to the country, and when with a verification. plaintiffs or by a stranger. In the first case, it Many of these discrepancies may grow out of would make the deed void; in the last, it would rules, said by Mr. Chitty, to have been re- not vitiate it. And under the rule that has cently established in the English courts relating been stated, the most unfavorable meaning to pleadings, which have not fallen under our must be put upon the plea; that is, that which 110*] *notice. We will, however, pass by will operate most against the party pleading it. the demurrer for that cause in the present case, And the alteration must be presumed to have and proceed to an examination of the special been made so as not to vitiate the instrument, matter set up in the plea in bar of the action. if the plea will admit of such construction. If this mode of pleading be adopted, the special Suppose the plea had concluded with a verifimatter set up must, as in a special plea, be such, cation, and the plaintiff's had replied that the that if true in point of fact, it will bar the ac- affixing the seal was done without their knowl tion and defeat the plaintiff's right to recover. edge, consent, or authority, and this state of The matter set up in this plea, when stripped the case had been sustained by the proof, it of some circumlocution, is, that after he, Jo- would not have avoided the instrument. seph Duncan, and the other parties to the instruments, had signed the same, it was, without his consent, direction, or authority, altered by affixing seals to their signatures. The plea does not indicate in any manner by whom the alteration was made. It does not allege that it was done with the knowledge or by the author ity or direction of the plaintiffs; nor does it even deny that it was done with the knowledge of the defendant, Joseph Duncan. The plea does not contain any allegation inconsistent with the conclusion that it was altered by a stranger, without the knowledge or consent of the plaintiffs, and if so, it would not have affected the validity of the instrument. It is said that the demurrer admits the truth of the matter set up in the plea. The demurrer admits whatever is well pleaded. But it does not admit any more, and certainly does not admit what is not pleaded at all. The demurrer, then, admits nothing more than that the seals were affixed after the instrument had been signed by the parties and delivered to Linn to be trans But, it is said, the law imposes upon the party who claims under the instrument the burden of explaining the alteration. This is the rule, undoubtedly, where the alteration appears on the face of the instrument, as an erasure, interlineation, and the like. In such case, the party having the possession of the instru ment and claiming under it, ought to be called upon to explain it. It is presumed to have been done while in his possession. But, where no such prima facie evidence exists, there can be no good reason why this should devolve upon a party, simply because he claims under the instrument. The plea avers the alteration, and the defendant, therefore, holds the affirmative; and the general rule is, that he who holds the affirmative must prove it. And this, under the present plea, can impose no hardship on the defendant, for his affirming the fact of alteration affords a reasonable presumption that he knew by whom the alteration was made. And, in addition to this, it is a circumstance deserving considerable weight, that the defend ant in his plea does not deny his having such knowledge. He avers that the seal was affixed 112] without his consent, direction, or authority; but he does not say it was done without his knowledge. And it is not an unreasonable inference that if he had, in his plea, disclosed by whom it was done, it would appear to have been done in a way that did not affect the validity of the instrument. There is not upon the face of this instrument anything indicating an alteration, or casting a suspicion upon its validity, that should put the plaintiffs upon inquiry. The instrument upon its face admits it was sealed with the seals of the defendants, and purports to have been sealed and delivered, in the common conclusion of a sealed bond. So that, when the instrument came into the possession of the plaintiffs, there was nothing on the face of it to raise a suspicion against its validity. The case of Henman v. Dickinson (5 Bingham, 183), has been relied upon to show that the onus of accounting for the alteration is thrown upon the plaintiffs. All that this case decides is, that the party who nes on an instrument which on the face of it appears to have been altered, it is for him to show that the alteration has not been improperly made. The circumstance of the alteration appearing on the face of the instrument is emphatically relied upon by the court to show that the party claiming under the instrument must account for the alteration. This was a question of evidence upon the trial, and did not arise upon the pleadings, and the report of the case does not furpish us with the plead ings. Many other cases might be cited to the same effect. might have been taken on general demurrer. We are accordingly thrown back on the record to examine the sufficiency of the declaration in the second and third counts. The second count sets out the instrument as of the date of the 1st of April, 1836. That Linn's commission bears date the 12th of February, 1835, and that he was appointed receiver for four years from the 12th of January, 1835. And the count then alleges that after the making and delivering the said instrument in writing, and after the appointment of the said Linn, he entered upon the duties of his office; and that within four years from the said 12th day of January, and while he was receiver of public moneys, there came into his hands, as receiver, the sum of four millions of dollars, which it was his duty to pay over to the plaintiffs when requested, yet the said William Linn hath not, nor would he, although often requested so to do, to wit, on the 2d day of April, in the year 1838, account for and pay over to the said plaintiffs the said sums of money, or any part thereof, but hath wholly neglected and refused so to do. It is said this count is bad, because from the time stated in the count he might have received the money after the 12th day of January, 1835, the commencement of his office, and before the 1st day of April, 1836, when the instrument signed by the sureties bears date, and that the sureties cannot be responsible for any moneys received before they became sureties. The count alleges a demand of the money and a refusal to pay it on the 2d day of April, in the year 1838, long after the defendant became surety. In the case of Farrar and Brown v. The United States In the case of Taylor v. Mosely (6 Car. & (5 Peters, 373), which was an action upon a Payne, 273), the bill upon which the suit was bond given for the faithful discharge of the brought appeared on its face to have been al duties of a surveyor of the public lands, the ered, and there was no evidence on either breach assigned was, that at the time [*114 ide when or by whom the alteration was of the execution of the bond, "there were in made; and the question was submitted to the the hands of the surveyor large sums of money jury by Lord Lyndhurst, with the remark, to be disbursed for the use of the United that it lay on the plaintiff to account for the States, which he had neglected to do." And suspicious form and obvious alteration of the one of the questions which arose was, whether note, and they must judge from the inspection the sureties could be made liable for any monof the instrument, and if they thought the al- eys paid to the surveyor prior to the execution eration was made after the completion of the of the bond; and the court said there is but bill, the verdict must be for the defendant. one ground on which the sureties can be made In the case now before the court, the inspec- answerable, and that was on the assumption tion of the instrument furnishes no ground of that the money was still remaining in his uspicion, and from the facts stated in the plea, hands when the bond was given. And in the there must have been a considerable distance case of The United States v. Boyd (15 Peters, of time after the instrument was signed by 208), the court said it matters not at what time Duncan before it came into the possession of the moneys had been received, if after the apthe plaintiffs. The plea alleges that it was de- pointment of the officer they were held by him livered to Linn, one of the defendants, to be in trust for the United States, and so continued 113] transmitted to the *plaintiffs. But the to be held at and after the date of the bond. plea does not allege that the alteration was In these cases there was a direct allegation that made after the instrument came into posses- the money was in the hands of the officer at sion of the plaintiffs; and under this state of the date of the bond. In the case now before facts alleged in the plea, the onus of proving the court, there is no such direct allegation, when and by whom altered, is more properly and this count is therefore bad on this ground. cast upon the defendant. We are accordingly The third count is also bad for the same of opinion that the plea is bad. But it is a settled rule that, when the demurrer is to the plea, the court having the whole record before them will go back to the first error: and when the demurrer is by the plaintiff, his own pleading must be scrutinized, and the court will notice all exceptions to the declaration that reason. The judgment of the Circuit Court must accordingly be reversed, and the cause sent back for further proceedings. Mr. Justice MCLEAN dissented. count in the declaration being bad against Linn, is undoubtedly bad against the other defendants. But this point was not raised in the Circuit Court. It was not intended to be raised. On the contrary, the counsel agreed to submit the question under the plea, whether the annexation of the seals by Linn vitiated the bond as against the sureties. And the rea son for this was stated in the following entry on the record: A judgment having been ob tained against Linn for the full amount of his defalcation, a judgment on this bond was not asked against him or any of the defendants, unless the jury shall find against all the defendants.' This agreement was treated by the counsel on both sides, in the Circuit Court, as waiving any technical question arising on the pleading. No one could doubt that the bond was good against Linn. And it is equally clear that, technically, the plea was bad for the other defendants, it being bad as to Linn. And it was to avoid any technicalty of this kind that the 115*] agreement *was entered into. It is less definite than it should have been, but still its object seems to be manifest. That a construc tion here would be given to the agreement different from that which was given to it by the United States Attorney in the Circuit Court, was not expected. His construction is shown from the fact of his not having suggested any objection to the court below arising on the joint plea. The plea of Joseph Duncan as to the alteration of the bond is held to be bad, because it is not averred that it was altered by the plaintiffs or by their authority. At the same time it is admitted that, on the general issue, the person claiming under the deed must explain any interlineation or alteration upon its face, so as to show the bond is not vitiated. The reason of this is clear. The party having possession of the bond is presumed to have a knowledge of any alteration of it, and is therefore required to explain it. Prima facie, any material al teration vitiates the bond. Now, the special plea in this case states a material alteration, by affixing the seals, after the instrument had been approved of by the district judge. The demurrer admits the facts stated in the plea. Does it not follow, then, that the plea is good, if the alteration alleged in it be a material one; such an one as vitiates the instrument unless explained? No rule in pleading is better settled than that a fact which is presumed to be known to the plaintiff, and is not presumed to be within the knowledge of the defendant, the defendant need not aver it in his plea, if he can without the averment set up a prima facie defense. Mr. Chitty says (1 vol. of Plead., 255). "It is also a general rule, that matter which should come more properly from the other side need not be stated. In other words, it is enough for each party to make out his own case or defense. He sufficiently substantiates the charge or answer for the purposes of pleading, if his pleading estab) lish a prima facie charge or answer. He is not bound to anticipate, and therefore is not compelled to notice and remove in his declaration or plea every possible exception, answer, or objection which may exist, and with which the adversary may intend to oppose him." (Com. Dig. Pleader, ch. 81: Plowd., 376; 2 Saund.. 62 a., n. 4; 1 Term Rep., 638; 8 Term Rep., 167: Stephen's Pl., 1st ed., 354.) *No one can doubt that the altera- [*116 tion averred in the above plea, appearing on the face of the instrument, would vitiate it, unless explained by the holder. And it follows, then, that the plea stating the fact, which the demurrer admits, must be answered and explained. The defendant must know whether an instru ment which he has executed has been altered in a material part. But he is not presumed to know by whom it has been altered, while it is in the possession of the party who claims under it. If the defendant must aver this, he must prove it; and this would be impossible. But, on the other hand, the person claiming under the instrument, and who has always been in possession of it, may well be presumed to know by whom it has been altered, and, therefore, he. and he only, can explain it. Any other rule would be most unreasonable and contrary to any proper system of pleading. The rules lately adopted by the courts of England in regard to pleading seem "not to have fallen under the notice of this court." This is to be regretted, as those rules have been published in the late editions of Mr. Chitty on Pleading, and are known to the profession throughout the country. It is true, as the court say, that intendments are taken against the plea; but intendments must not only be practicable, but reasonable. If a fact in the plea be omitted, which the defendant cannot be presumed to know, and which must be known to the plaintiff, no in tendment against the plea can be drawn. Mr. Stephens, in his Treatise on pleading, 350, under the head that "it is not necessary to state matter which would come more prop erly from the other side," says, "this, which is the ordinary form of the rule, does not fully express its meaning. The meaning is, that it is not necessary to anticipate the answer of the adversary; which, according to Hale, Ch. J., is like leaping before one comes to the stile.' It is sufficient that each pleading should in itself contain a good prima facie case, without refer ence to possible objections not yet urged." Thus in pleading a devise of land by force of the statute of wills (32 Hen. VIII.,ch. 1), it is sufficient to allege that such an one was seized of the land in fee, and devised it by his last will, in writing, without alleging that such devisor was of full age. For though the statute provides that wills made by femes covert,or persons within age, &c., shall not be taken [*1′17 to be effectual; yet if the devisor were within age, it is for the other party to show this in his answer, and it need not be denied by anticipa tion." "So where an action of debt was brought upon the statute 21 Hen. VI., against the bailiff of a town for not returning a burgess of that town for the last Parliament (the words of the statute being that the sheriff shall send his precept to the mayor, and if there be no mayor, then to the bailiff), the plaintiff declared that the sheriff had made his precept unto the bailiff, without averring that there was no mayor. And after verdict for the plaintiff, this was moved in arrest of judgment. But the court was of opinion, clearly, that the declaration was god; for we shall not intend that there was a mayor, except it be showed; if there were one, it should come more properly on the other side." "Where the matter is such that its affirma tion or denial is essential to the apparent or prita facie right of the party pleading, there it ught to be affirmed or denied." Now, the alteration of the instrument in a material part, after Duncan, the defendant, had signed it, without his consent or knowledge, did make a prima facie case. It made such a case as, upon the reneral issue, would have required the plaintis to show by whom it was altered. And this shows that the plea is good. It is the same principle whether it arise on the general issue or by special plea. The same order of proof is required. The plaintiffs, therefore, instead of demurring, should have pleaded over, and alleged that the alteration was made by a stranger, and, consequently, that it did not vitiate the instrument. The plea should have concluded with a veritation, and not to the country. But this could only be taken advantage of by special demurrer. This defect is not one of the causes assigned in The demurrer, and, therefore, cannot be obted to. The second and third counts of the declaraon being bad, as ruled by the court, the judgent of the Circuit Court should, on those comnts, have been affirmed, and not reversed. Mr. Stephens, in his Pleading, 144, says again, It is a rule, that on demurrer, the court will sider the whole record, and give judgment for the party who, on the whole, appears to be entitled to it." Thus on demurrer to the repliration if the court think the replication bad, but perceive a substantial fault in the plea, they 118] *will give judgment, not for the defend ant but for the plaintiff, provided the declara Son be good; but if the declaration also be bad in substance, then, upon the same principle, julment would be given for the defendant." Pot's case, 5 Rep., 29 a; Bates v. Cost, 2 Barn & Cress., 474.) " I believe this case is the first exception to the above rule. Notwithstanding the above defective counts, judgment is given generally inst the defendant. It is hoped that this raing will not establish a precedent in other cases. ORDER. This cause came on to be heard on the tran script of the record from the Circuit Court of the United States for the District of Illinois, al was argued by counsel; on consideration *Jereof, it is now here ordered and adjudged this court, that the judgment of the said Cir Cat Court in this cause be, and the same is hereby reversed; and that this cause be, and the is hereby remanded to the said Circuit Court, with directions to proceed therein conformably to the opinion of this court. Cited-2 Wall., 231; 1 Curt., 147; 6 Ben., 208. THOMAS MORRIS Complainant and Ap pellant, V. MARIA NIXON, HENRY J. WILLIAMS, AND THOMAS BIDDLE; HENRY J. WILLIAMS AND MARIA NIXON, Executors of the Last Will and Testament of HENRY NIXON, Deceased, AND MARIA NIXON, Sole Devisee of the said Last Will and Testament of HENRY NIXON; AND MARY HUSBAND, AMELIA M. MORRIS, ROBERT MORRIS, WILLIAM P. MORRIS, CHARLOTTE E. MORRIS, HENRY MORRIS, SARAH MORRIS, Children and Heirs-at-Law of HENRY MORRIS, Deceased; AND CORNELIUS STEVENSON AND SAMUEL C. CLEMENTS, Administrators of said HENRY MORRIS, Deceased. Chancery-deed absolute on its face, intended as security-loan as consideration-answer of one defendant not evidence in behalf of anotherproof as to one document, throwing suspicion on others-redemption. A deed, absolute on the face of it, declared to be a security for money loaned. Where a bill substantially charges that there is a fraudulent attempt to hold property under a deed, absolute on the face of it, but intended as a security certain the truth of the transaction. for money loaned, evidence will be admitted to as Where there is proof of parties meeting upon the footing of borrowing and lending with an [*119 offer to secure the lender by a mortgage upon particular property, if a deed of the property, absolute on the face of it, be given to the lender,and the lender also take a bond from the borrower, equity will interpret the deed to be a security for money loaned unless the lender shall show, by proofs, that the borrower and himself subsequently bargained upon another footing than a loan. of a deed which is absolute on the face of it, though Where a loan is an inducement for the execution the loan is not recited as the consideration of the deed, or as any part of it, if the lender or grantee in the deed treats it substantially as the consideration, or a part of it, equity will declare the deed to be a security for money ioaned. The answer of one defendant in equity is not evidence in behalf of another defendant. If, in equity, it is admitted or proved that one of the documents in a transaction was not intended to be what it purports, it subjects other documents in the same transaction to suspicion. HIS was an appeal from the equity side of the Circuit Court of the United States in and for the Eastern District of Pennsylvania, and arose upon the following facts: On the 2d of January, 1812, Jonathan Williams and Thomas Morris (the complainant) purchased from the Bank of North America a parcel of land upon the Schuylkill River, NOTE. As to deed, with contract to reconvey, when a mortgage, see note to Conway v. Alexander, 7 Cranch, 218. That parol evidence is admissible to prove absolute wheat., 459; and, also, note to Conway v. Alexandeed a mortgage, see note to Hughes v. Edwards, 9 der. 7 Cranch, 218. That action may be maintained to have a deed declared a mortgage, see notes to the two last cases. Purchaser from equitable mortgagee, where deed to the latter is absolute on its face, when protected, see notes to above cases. near the city of Philadelpdia, for the sum of $80,000; $20,000 of which was to be cash, and the remaining $60,000 was divided into three payments of $20,000 each, which were to become due on the 25th of March, 1814, 1815, and 1816, respectively. The parties gave their joint and several bonds for these sums, with a warrant of attorney to confess judgment, and a mortgage upon the property. It afterwards appeared that Morris was not exclusively the owner of his moiety. On the 27th June, 1812, Morris gave a pow er of attorney to Thomas Biddle and Henry Nixon, to manage the property for him. In 1815 Williams died intestate, leaving Henry J. Williams and Christine, the wife of Thomas Biddle, his heirs-at-law. In April, 1816, Morris and the representa tives of Williams executed a power of attorney to Biddle and Nixon, authorizing them to enter into and take possession of the property, sell or lease it, receive the money, execute deeds, &c. Under this power, they accordingly took possession and exercised all manner of ownership over it. A great number of letters between the parties 120* were given in *evidence, running from this time to the year 1822, relating to the condition and prospects of the property. One of the bonds had been paid out of the proceeds of sales, and considerable payments made on account of another. The third was wholly unsatisfied. In 1822, Morris, residing in New York, ap. plied to Nixon for a loan, under the circum stances stated so particularly in the opinion of the court that it is unnecessary to mention them here. Nixon declined making a loan, but took from Morris a deed, absolute upon the face of it, conveying the whole of Morris's interest to Nixon, and reciting that Nixon had always been interested in the purchase to the extent of three sixteenths of the whole, or three eighths of Morris's moiety. Nixon then loaned to Morris $5,000, for which he took his bond. The deed also recited that there had been allowed to Nixon for his agency, the sum of $2,000; one half of which, or $1,000, had been paid by the representatives of Williams, but paid to Morris; and five eighths of the other $1,000 (or $625), were justly chargcable to Morris; thus bringing Morris in debt to him $1,625, which was released in the deed. It also contained other recitals, which are mentioned in the opinion of the court. In 1836 Morris filed a bill on the equity side of the Circuit Court of the United States for the Eastern District of Pennsylvania, against Nixon and other parties, alleging that the deed was only a security for the money loaned; that, at the time of its execution, there was not, between himself and Nixon, any contract, agreement, understanding, or negotiation for a sale; that Nixon had furnished no account of his agency; and praying for an account and general relief. The parties all answered; and in April, 1841, the Circuit Court, after a hearing, dismissed the bill with costs. The complainant appealed to this court. Mr. Wood for the appellant. by the letter of the defendant, Nixon, to the plaintiff, would constitute, per se, a mortgage of the premises to secure the loan for $5,000. II. The said deed was designed by the parties thereto to secure the said loan, and was designed in substance to be a mortgage*as- [*121 suming the shape of an absolute conveyance, only as a more effectual security for the loan. III. If said Nixon designed otherwise, yet the complainant was led by his conduct, and by all the circumstances, to consider it a security for the loan, and it ought to be treated as such. IV. A deed, though absolute on its face, may be shown, by parol evidence, to be designed as a security for a loan, or a mortgage, and more especially by written evidence fur nished about the time the deed was given, and conducing to show the same. V. If it should appear that said deed was designed by the parties to be an absolute conveyance in fee, it ought to be set aside, or modified and converted into a mere security for said loan. Because: 1. The consideration therein was grossly inadequate. 2. There was no negotiation for a sale between the parties thereto, either personally or through authorized agents, and no estimate of value. 3. The plaintiff, the grantor therein, was not in a condition to deal at arm's length-being much embarrassed, in want of money, and ignorant of the condition of the property-the grantee being a capitalist, having the property under his management, and fully acquainted with its condition and value. 4. The grantee did not fulfil his duty as steward and agent in apprizing the grantor, at the time of said conveyance, of the condition and value of said property. 5. Undue influence was exercised by the grantee upon the grantor, in pressing upon him à sale to himself in the condition in which said grantor was placed, and in the relative condi tion in which they stood at the time to the property and to each other, as lender and borrower, steward and principal. VI. Lapse of time is no bar to the complainant's equity under the last-mentioned point. Because: 1. Such & bar is not set up and relied upon in pleading. 2. The influence and control of the said grantee in said deed, over the grantor, and the grantor's ignorance of the condition of the property, continued until a short time before exhibiting the bill of complaint. 3. The relationship in which the parties stood to each other as steward and prin- [*122 cipal, lender and borrower, will prevent the bar from applying in equity to the relief sought for by the bill. VII. Lapse of time is not a bar to the complainant's equity, for a full account and relief in regard to the matters arising, as well before as subsequently to the said deed. All which he is fully entitled to. VIII. The agreement, for a conveyance from the complainant to Maria Nixon, should Messrs. Sergeant and Williams for the appel- be modified, so as to embrace only one eighth of lees. Mr. Wood made the following points: I. The deed of the 28th May, 1822, explained the plaintiff's moiety of the premises, and she should be decreed to be entitled only to the net proceeds of said one eighth part. |