
    JOSEPH P. PAGE, ADMINISTRATOR WITH THE WILL ANNEXED OF ESTATE OF ROBERT C. PAGE, v. BERNARD BURNSTINE AND THE AMERICAN LIFE INSURANCE COMPANY OF PHILADELPHIA.
    Equity. —
    No. 5747.
    I. P, during his life-t.imo, obtained several loans of money from B, one of the defendants, and. as security for these loans, assigned a,n interest in a policy of insurance on his life. Afterwards P, being unable to pay the premiums on the policy, made an absolute assignment of that policy to B, who continued thereafter to pay the premiums until the death of P, and was treated by the agent of the company as tiie owner of the policy. Under these circumstances, a sourt of equity will not decree such assignment to be a mere seenrH'.y for the money advanced, as a consideration for the transfer of the policy.
    II. Where tiie assignor of a policy of life insurance is dead, the assignee cannot be examined as a witness in regard to the transaction on his ■own behalf, unless he is called hy the other party.
    III. Loose memoranda found in the desk of the assignor after his death are incompetent evidence on the part of the administrator of the decedent, in a suit brought by the, latter to set aside the assignment as an absolute transfer of the policy.
    STATEMENT 0E THE CASE.
    The case comes up on au appeal from a formal decree of the Equity Court. The cause was heard on the pleadings and proofs, and the bill was dismissed with costs. The facts, as disclosed by the pleadings and proofs, are substantially as follows:
    The American Life Insurance and Trust Company, one of the defendants, issued a policy insuring the life of the decedent, Robert C. Page, in the sum of $3,000. This policy bears date November 26, 1866.
    On the 80th day of September, 1868, Page borrowed from the defendant Burnstine the sum of $300, and, to secure the repayment of that amount, he executed and delivered to Burnstine an instrument in writing, by which he assigned to him the policy of insurance to the extent of the loan. He next borrowed $437 from Burnstine, on the 1st day of May, 1871, aud then, on the 1st day of December, 1871, he made another loan from him of the sum of $213. Eor each of these loans he executed and delivered to Burnstine like instruments of assignment. Each of these assignments was regularly approved by the company. After the last loan, in December, 1871, Page stopped paying the premiums. Thereupon Burnstine paid the premiums. This continued until the 7th day of January, 1873, when Burnstine and Page met in the office of Mr. Cross, the agent, and Page then and there signed and sealed an absolute transfer of the policy to Burnstine. This assignment is on the back of the policy, and was approved by the company. The policy, together with the assignment, was delivered by Page to Burnstine. After that date Cross sent the notices of premiums falling due to Burnstine only, and treated him as the owner of the policy. At the time of making the assignment of the 7th of January, 1873, when the parties met in Cross’s office, Cross told Burnstine that to save himself he should have the policy assigned absolutely to him. Mr. Page stated that he had no money and could not keep up the premiums, and was willing to make this assignment. From the conversation which passed Cross believes that some money was paid by Burnstine to Page in consideration of the assignment, but he has no idea as to the amount. Burnstine, in his sworn answer, avers that between the 1st of December, 1871, and the date of the assignment he kept urging Page to pay the premiums, and that Page asserted that he could not do so, and insisted that Burnstine should buy the policy outright and take an absolute assignment. He proposed that Burnstine should pay him for the policy the sum of $1,000, but this proposition was rejected. It was subsequently agreed, however, that Burnstine should pay him the additional sum of $500, and take an absolute assignment of the policy. This last agreement was carried out by the payment of the money and the delivery of the assignment. Burnstine paid all the premiums from December 1, 1871, until the death of Page, which occurred in November, 1875.
    After the death of Page, and on the llth day of January, 1876, the complainant, as administrator of the estate of Page, exhibited his bill in this court for the purpose of showing that the last assignment to Burnstine, though absolute in form, was executed and delivered for the purpose only of securing to the defendant the repayment of money loaned.
    The bill prays an account and an injunction. The bill charges that the assignment was given as a secmity for the repayment of money, and not as an absolute transfer, and that Page had been paying interest on those loans to Burnstine at the rate of five per centum per month; and that, if a proper account shall be stated, there will be but little, if anything, due to Burnstine. The bill charges fraud upon Burnstine, in that he claims the whole sum due on the policy and denies that the estate has any interest. It also waives, or seeks to waive, an answer under oath as to Burnstine; but Burnstine answers under oath, and negatives every material allegation of the bill.
    To establish the allegation of his bill, the complainant produced an envelope found in tlie decedent’s desk, after his death, with the contents thereof. The envelope contained a will made by Page on the 5th day of July, 1870, and a receipt dated October, 1868, signed by Burnstine, for sis drafts or orders on one Bell, drawn by the testator, October 2, 1868, in favor of Burnstine, each for $50. These drafts were drawn upon Bell as disbursing clerk of the Post-Office Department, and against the monthly pay of the drawer, who was a clerk in that department. They were payable in successive months. The envelope contained also five pieces of paper, upon which Page had made some kind of computations. These computations seem to have been made at about the same time, the latest date mentioned being December 1, 1871. Four of them were made with ink and one with a pencil. Objections to the introduction of this testimony were made, and before the hearing a motion was filed to strike it out. The deposition of Burnstine was taken in the cause.
    
      W. F. Mattingly, for complainant.
    The statements in the handwriting of Hubert O. Page, deceased, are admissible in evidence. Phillips on Evidence, vol. 1, p. 300, states the rule to be as follows:
    “It is a rule of evidence clearly established that declarations of persons since deceased (under which term of declarations all written statements and entries are intended to be. comprehended) are admissible, where those persons are to be presumed conuusant of the subject-matter, if the declarations apparently operate against their own interest, whether pecuniary or proprietary.” “ Nor does it seem necessary that the declarations should have been made by persons in the course of any business or employment, or that declarations against interest should be contemporaneous with the facts to which they relate.”
    The statements offered in evidence in this case were apparently against the interest of the party making them, inasmuch as they admitted certain amounts to be due Burnstine on account of the assignment of this policy. They also show that five per cent, a month interest was to be paid, and it is a remarkable coincidence that a calculation of five per cent, interest per month on the amount due up to the time of the several assignments results in the precise amounts for which Burnstine claims the assignments were made. On the admitted proofs in the case, showing beyond question the necessitous condition of the borrower; his chronic impecuniosity; that the lender was a Jew pawnbroker; that the first pledge of the policy was a loan, and without any proof showing that the defendant paid a single cent for the assignment, it is respectfully submitted that under the following authorities there can be no doubt but that a court of equity should treat the assignment as a mortgage, and not a sale. (Morris v. Nixon, 1 How., 118.) When the original proposition was for a loan on the security of the property, and a bond was given for the sum advanced, though the deed was absolute, the grantor must show that the original design of a loan or a security was changed and a sale substituted therefor. (Russell v. Southard, 12 How., 151, et seg.) Notwithstanding the absolute nature of the conveyance, in doubtful cases the court leans to the conclusion that it was a mortgage, and not a sale. When the debtor is in necessitous circumstances, courts of equity do not consider a consent thus obtained to be sufficient to fix the rights of the parties. The fact that no promise of repayment was made does not make the conveyance less effectual as a mortgage.
    “We think that, inasmuch as the mortgagee in possession may exercise an undue influence over the mortgagor, especially if the latter be in needy circumstances, the purchase by the former of the equity of redemption is to be carefully scrutinized where fraud is charged, and that constructive fraud only, or an unconscientious advantage, which ought not to be retained, need be shown to avoid such a purchase.”
    In the case at bar there is no proof that Burnstine paid anything for the assignment of the equity of redemption, and the proof is ample to show the character of the lender and the necessitous condition of Page. (Babcock v. Wyman, 19 How., 296.) In this case the court admitted parol proof to establish the mortgage after more than twenty years’ possession by the grantee under a deed absolute on its face. From the authorities cited, with approbation, on page 800 of this report, it is evident that the same rules of law apply to the transfers of personal property. The sale or release of an equity of redemption to the mortgagee will be closely examined, and be set aside if, from inadequacy of price or otherwise, there is reason to suspect that undue influence has been exerted on the mortgagor, or undue advantage taken of his necessitous condition. (Perkins v. Drye, 2 Dana, 174; Hyndman v. Hyndman, 19 Ver., 9; Holdridge v. Gillespie, 2 Johns. Ch., 30; Villa v. Rodrigues, 12 Wall., 33.) In this case the court says that all doubts will be construed against the grantee, and likens the sale of an equity of redemption to a purchase of his cestui que trust.
    
    
      Enoch Totten, for defendant Burnstine.
    The bill must be dismissed. The material allegations are expressly denied by the answer, and are wholly unsustained by the proofs. The will and the receipt have no bearing upon the case. They were made long prior to the assignment upon which Burnstine relies. The drafts for $600, receipted for by Burnstine, are produced by him, except one. None of them were paid by Bell.
    Where the defendant, in express terms, negatives the allegations of the bill, the averments of the answer must be overcome by satisfactory testimony of two opposing witnesses, or of one witness corroborated by other circumstances and facts which give to it a greater weight than the answer, or which are equivalent in weight to a second witness. (2 Story’s Equity, sec. 1528; Alam, v. Jourdan, 1 Vernon, 161; Pember v. Mathers, 1 Bro. Ch. R., 52; 2 Madd. Ch. Pr., 443.)
    Nor can the plaintiff avoid the force of this rule by waiving an answer under oath. (Thornton v. Gordon, 2 Robinson, (Va.,) 719.) This case stands on the footing of a case set for hearing on bill and answer. The testimony offered to sustain the bill is worthless and incompetent. The case practically stands, so far as the plaintiff’ is concerned, upon bill and answer.
    The identical question here was before the court last term, in the ease of Hubbard v. Osgood & Stetson, ante, p. 113. In that case the complainant sought to set aside a sealed instrument of assignment not unlike the instrument here assailed. The subject-matter of the assignment in that case was an “Alabama claim,” and the sale was made prior to the treaty of "Washington. The court in its opinion says:
    “ The form of the deed is an absolute transfer of these claims. There is no provision made for repaying the money, and it is admitted that in order to show that the transaction was a loan, the express terms of the instrument must be overruled by the parol statements of witnesses. This kind of proof is admissible, but it ought clearly to show that the contract did not express the intention of the parties. The testimony, we think, is inadequate to establish the fact of a loan.
    “The defendants Osgood & Stetson flatly contradict the complainant, and swear positively to the sale. The answer, which is responsive to the bill, denies that it was a loan. A single -witness will not be sufficient to overcome the answer of defendant, especially when it is supplemented by their examination as witnesses. The testimony of West, who was ■ examined by the plaintiff, is equivocal. Stetson testifies that ■ on the occasion referred to by West he asked for a special power of attorney, because he had been informed that the ■ complainant was endeavoring to sell the claims over again. We can, therefore, attach no special importance to this circumstance. West also swears that Stetson spoke of the assignment as a security. It is to be noted that the witness is speaking of a conversation in the office of the complainant, and is, therefore, carefully to be considered and cautiously to be admitted. This is the only circumstance of the case, aside from what the complainant has said, that is entitled to any weight; but the court cannot attach much importance to an acknowledgment comiug from a single witness, and which may have been qualified or misuuderstood so as to overthrow a written instrument and impeach the pleadings in the case. This would be giving an effect to parol proof which would endanger the integrity of any contract executed for a money consideration.”
    In the case of Hubbard v. Osgood there was a great deal of proof to sustaiu the allegations of the bill, and the case, in every respect, was a much stronger one than this. The cases, however, agree in this: the thing assigned was of no value at the time of the transfer. Proof is not required to show that this insurance policy was utterly valueless at the time of the assignment, although there is ample proof in the case on that point. In all cases where it is sought to change an absolute deed into a mortgage, “ great stress is justly laid upon the fact that what is alleged to have been the price bore no proportion to the value of the thing said to have been sold.” ([Russell v. Southard, 12 How., 139.) This court, in commenting upon this point in its opinion in Hubbard v. Osgood, says: “The assignment in the present ease is a sale of securities, and, at the date of the instrument, these securities were simply claims of doubtful value. There was no certainty that the injuries sustained from the Alabama would ever be recognized or paid by the government. It is a circumstance which we cannot overlook that they had no value, except a speculative one, until a year afterwards.”
    If there is any wrong established in this case, it rests upon the testator. "We know that he borrowed several large sums of money from Burnstine on the security of a policy of insurance, which could be of no value unless the premiums shall be paid promptly. After he had borrowed all the money he could get upon it, he promptly stopped paying the premiums, and left Burnstine to get out of his difficulty as best he could. Burnstine adopted the only course left: he carried the burden through by paying out his money.- Now this administrator seeks to get the benefit resulting from the expenditure of Burnstine’s money, upon the evidence solely of these scraps of paper made by the testator, which do not bear even the poor sanction of his signature.
   Mr. Justice Olin

delivered the opinion of the court:

This case comes up on an appeal from a decree of the Equity Court. The cause was heard on the pleadings and proofs, and the bill was dismissed with costs. The facts disclosed by the pleadings and proofs are substantially as follows:

The Americau Life Insurance and Trust Company, one of the defendants, issued a policy of insurance on the life of the decedent, Robert C. Page, for the sum of $3,000, the policy bearing date November 26, 1866.

It would seem from the proofs that on the 30th of September, 1868, Robert C. Page borrowed from the defendant Burnstine the sum of $300, and, to secure the repayment of that amount, he executed and delivered to Burnstine an instrument in writing by which he assigned to Burnstine an interest in the policy of insurance to the extent of the loan; and that he next borrowed from Burnstine, on the 1st of May, 1871, the sum of $437, and again, on the 1st of December, 1871, he borrowed the further sum of $213. For each of these loans he executed and delivered to Burnstine an instrument in writing securing to Burnstine an interest in the policy of insurance to the extent of the loans made. Each of these assignments was approved by the insurance company.

After the last loan in December, 1871, Page, the insured, stopped paying the premiums and never thereafter paid anything. The agent of the company notified Burnstine that Page had not paid the premiums, and that the policy would be worthless as a security unless the premiums should be paid up regularly.

On the 7th of January, 1873, Burnstine and Page met at the office of Mr. Cross, the agent of the company, and Page then signed and sealed an absolute transfer of the policy to Burnstine. This assignment was on the back of the policy, and was approved by the company. The policy, together with the assignment, was delivered by Page to Burnstine. After that the agent of the company sent the notices of premiums falling due to Burnstine only, and treated him as the owner of the policy. At the time of the meeting of the parties at the agent’s office, on the 7th of January, 1873, the agent of the company told Burnstine that, to save himself, he should have the policy assigned absolutely to him, Mr. Page stating that he had no money and could not keep up the premiums, and was willing to make this assignment.

The transaction, as evidenced by the written papers and the testimony of the insurance company’s agent, Cross, is perhaps about all the competent evidence given in the case. Burnstine appears, and was sworn as a witness not called by the other party; was certainly not a competent witness in the case; and the same may be said of the loose memorandums and writings said to be found in the desk of the decedent, Page, after his death. They were wholly incompetent, and the case must stand upon the written agreement between the parties, and it is simply this:

Page, the decedent, makes several loans of money from Burnstine, and, as security for the repayment of those loans made, assigns an interest in a policy of insurance on his life. Prior to Jauuary 7,1873, Page, being unable or unwilling to longer pay the premiums on the policy of insurance, made an absolute assignment of that policy to Burnstine, who continued thereafter to pay the premiums upon it until the death of Page.

It is claimed in this case that the absolute assignment of this policy was intended by the parties to be a security for whatever moneys Burnstine had loaned or paid to Page, and further, if it was intended by the parties to be an absolute transfer, still a court of equity might decree it to be a mere security for the amount of the loan and the consideration paid for the transfer, upon the ground that Page was a debtor at the time of the transfer and in needy and destitute circumstances; and second, JBurnstine was a Jew and a pawnbroker. Put we think that all the testimony given in this case — most of which, as we before observed, independent of the written testimony — is by no means sufficient to set aside instruments in writing executed in the most solemn manner in which contracts can be made.

The judgment of the special term must be affirmed.  