Names of Couns. Struthers v. Drexel, 122 U.S. 487 (1887)

Names of Counsel.

STRUTHERS v. DREXEL.

ERROR TO THE CIRCUIT COURT OF THE UNITED STATES FOB THE WESTERN DISTRICT OF PENNSYLVANIA.

Argued May 2,1887. — Decided May 27, 1887.

If a record in error cqntains the charge in full, with a memorandum at the close that certain portions are excepted to, but they are not verified or included in a proper bill of exception, it is not part of the record for any purpose.

S. contracted with D. in writing, in which, after reciting that D. had purchased 400 shares of a certain stock at $50 per share, S., in consideration of one dollar, agreed at the end of one year from date if D. desired to sell the shares at the price paid, to purchase them of him and pay that amount with interest. When the time expired, D. elected to sell, and tendered the stock; and, S. refusing to take it and pay for it, D. sued him for the contract price, declaring on a contract whereby the plaintiff sold and agreed to deliver to defendant 400 shares of the stock at $50 per share, to be paid by defendant on delivery, in consideration whereof the defendant undertook and promised to accept the stock • and pay for the same on delivery. Held, That this declaration set forth properly the legal effect of the contract, and the omission of the statement of the nominal consideration was immaterial, and need not be proved.

The letter of the defendant in error of March 20, 1876, was admissible in evidence.

When a declaration in assumpsit contains a special count, under which on the proofs the plaintiff can recover, and also general counts, an instruction to the jury that the plaintiff can recover under the general counts, if it be erroneous, works no injury to the defendant.

The transaction between the parties, so far as disclosed by the record, was not a loan of money, and consequently no question of usury could arise.

Assu mps it . Verdict and judgment for plaintiff. Defendant sued out this writ of error. The case is stated in the opinion of the court.

Mr. George Shiras, Jr., and Mr. Rasselas Brown, for plaintiff in error. Mr. W. M. Lindsay was with them on the brief.

Mr. John Dalzell for defendant in error.

Mr . Justi ce Matthews delivered the opinion of the court.

This is an action of assumpsit brought by the defendant in error against the plaintiff in error and Thomas S. Blair, the latter not having been served with process. The declaration contained two special counts, as follows:

“For that whereas heretofore, to wit, on the 4th day of April, a .d . 1873, at New York, to wit, in the Western District of Pennsylvania aforesaid, in consideration that the said plaintiff, at the special instance and request of the said defendants, would take and pay for, at the rate of $50.00 per share, four hundred (400) shares of the capital stock of the Blair Iron and Steel Company, a corporation organized under the laws of Pennsylvania, they, the said defendants, undertook, and then and there faithfully promised the said plaintiff, that if at the end of one year from said date he, the said plaintiff, should desire to sell the said shares at the said price by him paid for the same, they, the said defendants, would purchase the said shares of the said stock, to wit, four hundred shares of the said Blair Iron and Steel Company, at the said price, to wit, fifty dollars per share, and pay him, the said plaintiff, therefor at the said rate, together with interest at the rate of seven per centum per annum.

“ And the said plaintiff avers that he, confiding in the said promises and undertaking of the said defendants, did afterwards, to wit, on the day and year aforesaid, to wit, at the district aforesaid, take and pay for four hundred (400) shares of said stock aforesaid, at the rate of $50.00 per share, amounting in all to a large sum, to wit, the sum of twenty thousand dollars ($20,000).

“ And the said plaintiff further avers, that at divers times subsequently, to wit, on the 4th day of April, a .d . 1874, and, to wit, on the 4th day of April, a .d . 1875, in consideration that the said plaintiff, at the special instance and request of the said defendants, would waive his right of election to sell to the said defendants the said shares of the capital stock of the said Blair Iron and Steel Company, to wit, four hundred (400) shares thereof, they, the said defendants, undertook, and

Opinion, of the Court.

then and there promised faithfully the said plaintiff, that, if at the end of one year from the said last-mentioned dates, respectively, to wit, April 4, a .d . 1874, in the first instance, and April 4, a .d . 1875, lastly, he, the said plaintiff, should desire to sell the said hereinbefore-mentioned shares at the said price by him paid for the same, they, the said defendants, would purchase the said shares of the said stock at the said price paid by him, the said plaintiff, paid therefor, to wit, fifty dollars per share, and pay him, the said plaintiff, therefor at the said rate, together with interest at the rate of seven per cent per annum.

“Yet the said defendants, not regarding their said promises and undertakings, although often requested so to do, and although the said stock was by the said plaintiff tendered to the said defendants, to wit, on the day and year aforesaid, to wit, at the district aforesaid, have not as yet paid to the said plaintiff the said sum of twenty thousand dollars ($20,000.00), but have hitherto wholly neglected and refused, and do still refuse and neglect, to wit, at the Western District of Pennsylvania, to the damage of the plaintiff thirty thousand dollars.

“ And though the said plaintiff afterwards, to wit, on the day and year aforesaid, to wit, at the Western District of Pennsylvania aforesaid, was ready and willing and then and there tendered and offered to deliver the said stock to the said defendants, and then and there requested the said defendants to accept the same and to pay him therefor as aforesaid, yet the said defendants, not regarding their said promises and undertakings, but contriving and craftily and subtly intending to deceive and to defraud the said plaintiff in this behalf, did not nor would at the time when they were so requested as aforesaid, or at any time before or afterwards, accept the said stock or any part thereof of or from the said plaintiff or pay him for the same as aforesaid, but then and there wholly neglected and refused so to do, to the damage of the plaintiff thirty thousand dollars.”

It also contained common counts, for goods bargained and sold, money had and received, and money laid out and expended for the use of the defendants.

The cause was tried by a jury, and a verdict and judgment rendered in favor of the plaintiff for the sum of $34,651.36, to reverse which this writ of error is prosecuted.

The transcript of the record contains what purports to be the charge of the court in full, with a memorandum at the close, stating that defendants’ counsel excepted to certain portions thereof; but, as it is not verified, or included in any proper bill of exceptions, we are not at liberty to treat it as a part of the record for any purpose. Several bills of exception were taken, during the progress of the trial, to rulings of the court, on which assignments of error are alleged, and which we will consider in their order.

1st. From the first bill of exceptions it appears, that upon the trial the plaintiff offered in evidence two papers, one dated April 4, 1873, and the other March 22, 1875, as follows:

“ New York , April 4, 1873.

“Whereas Joseph W. Drexel has purchased four hundred shares of the stock of the Blair Iron and Steel Company, sold by A. S. Diven, trustee of said company, at the price of fifty dollars per share:

“Now, we, the undersigned, in consideration to us of one dollar, in hand paid, the receipt whereof is hereby acknowledged, do hereby agree that if, at the end of one year from this date, the said Drexel shall desire to sell the said shares at the price paid for the same by him, we will purchase the same at that price, and pay to him the amount paid by him on the same, with interest at the rate of seven per cent per annum.

“Thos . S. Blair . “Thomas Struthers .”

“ New York , March 22, 1875.

“ Tnos. S. Blair .

“ Thomas Struthers .”

To the reception in evidence of these papers the defendants’ counsel objected, stating that he did not deny their execution, but that they were not admissible in evidence, because the plaintiff had averred in the declaration that the consideration of the contract was the subscription to 400 shares of stock in the Blair Iron and Steel Company, whereas in these papers the consideration set forth is the payment of one dollar. The objection was overruled, and an exception taken. This ruling is now alleged as error. In ruling on the papers, the court said the contracts were admitted subject to consideration thereafter, in view of further evidence which might be adduced. The bill of exceptions does not set out what, if any, further evidence was adduced. We are of opinion that the testimony was properly admitted. Even if there was a variance between the contract as shown by these papers and that alleged in the first count of the declaration, certainly there was none between the allegations of the second count and the written instrument as offered, according to its legal effect.

2d. The second bill of exceptions shows that the plaintiff offered in evidence the following paper :

“New York , March 20, 1876.

“ Gentlemen: I hereby notify you that I desire to sell the four hundred shares of the stock of the Blair Iron and Steel Company, held by me under the option of sale, according to the terms of the agreement between you and J. P. Morgan and J. W. Drexel, of April 4, 1873, and the several renewals thereof.

“You are hereby notified that I am ready to transfer the stock to you, or to any person or persons whom you may designate, upon the payment of the purchase money thereof and seven per cent interest thereon from date of payment.

“ Respectfully, J. W. Drexel .

“ To Mess. Thos. S. Blair and T. Struthers.”

The admission of this paper in evidence, which was objected to, is assigned for error. There is no ground for this exception. The paper was certainly competent as constituting one item in the proof that the plaintiff exercised the option to sell the stock in accordance with the agreement, and tendered it for delivery.

3d. The third bill of exceptions states that in the further progress of the trial the defendants’ counsel offered to prove by two witnesses that the consideration, one dollai*, named in the said agreement was not paid by the plaintiff, or by anybody on his behalf, to the defendants. This offer was rejected on objection made, and an exception taken. We have already said that the mention of this nominal consideration was entirely immaterial, and might properly be omitted from any statement of the contract in a pleading which set out its legal effect. It was, of course, therefore, not necessary to prove it, and immaterial if disproven. The real consideration for the defendants’ agreement to buy was the plaintiff’s agreement to sell, determined by the exercise of his option and the tender for delivery of the stock for that purpose.

4th. The fourth bill of exceptions is based on an alleged error occurring in the following portion of the charge to the jury:

The point of the objection is, that the jury was instructed that a recovery in favor of the plaintiff migh't be had under the common money counts of the declaration, and this is alleged for error. If so, however, it did not prejudice the defendants; for, as we have already seen, a recovery might be had upon the contract, considered as an executory contract for the purchase by the defendants of the stock in question, under the second special count. In addition to that, so far as the bill of exceptions shows, it might well be that there was proof in the case, not only of a tender of the stock, but of an actual delivery and acceptance. In that case, the contract would have been completely executed on the part of the plaintiff, title to the stock passing by the delivery to the defendants. In such a case, the charge would be entirely correct, and a recovery might be had under the common counts.

5th. The fifth bill of exceptions is based upon an alleged error in the following portion of the charge:

“ On the face of the papers the question is whether there was any loan at all. There is no usury unless there is a loan of money, and ■ the question is whether the transaction involved a loan or attempted loan of money. We have looked at these papers carefully, and we instruct you that there is no evidence on their face that there was any intention to loan between the plaintiff and the defendant whereby usury could arise.

“ It is our duty to give you instructions on that subject, and we say to you that upon that point the defence of the defendant must fail.”

This covers all the points raised upon the record. We find no error in the proceedings of the Circuit Court, and its judgment is accordingly

BEAN v. PATTERSON.

APPFAE FROM THE CIRCUIT COURT OF THE UNITED STATES FOE THE WESTERN DIVISION OF THE WESTERN DISTRICT OF MISSOUEI.

Argued April 18, 19,1887. — Decided May 23, 1887.

The court, being satisfied that the conveyance of real estate by the husband, when insolvent, to a trustee for the benefit of his wife, (which is assailed in this suit,) was made in good faith to secure an indebtedness from him to her for sums previously realized by him from sales of her individual property, sustain it, as coming within the doctrine, well settled here, that while such a deed, made under such circumstances, is not valid if its sole purpose is to secure the wife against future necessities, it is, if made to secure a prior existing indebtedness from the husband to the wife, as valid as if made to secure a like indebtedness to any other of his creditors.

In equity to set aside a deed as fraudulent. Decree dismissing the bill. Plaintiff appealed.

The case is stated in the opinion of the court.

Mr. James 8. Botsford, (with whom was Mr. M. T. C. Williams on the brief,) for plaintiffs in error cited : Thompson v. Thompson, 19 Maine, 244; Harris v. Exchange Bank, 4 Dillon, 133; Seitz v. Mitchell, 94 U. S. 580; Baldwin n . Whitcomb, 71 Missouri, 651; Henderson v. Henderson, 55 Missouri, 554; Parish v. Murphree, 13 How. 92; Fisher v. Lewis, 69 Missouri, 629 ; Kesner n . Trigg, 98 U. S. 50 ; Hamlin v. Jones, 20 Wis. 536; Sloan v. Torry, 78 Missouri, 623; Bauer v.

BEAN v. PATTERSON. 497

Bauer, 40 Missouri, 61; Boatman)s Savings Bank v. Collins, 75 Missouri, 280; In re Jones, 6 Bissell, 68; Earl v. Champion, 65 Penn. St. 191; Clark v. Rosenkrans, 31 N. J. Eq. (4 Stewart) 665 ; Howe v. Colby, 19 Wis. 583 ; Eddy v. Baldwin, 23 Missouri, 596 ; Eddy v. Baldwin, 32 Missouri, 369 ; Potter v. McDowell, 31 Missouri, 62; Pawley v. Vogel, 42 Missouri, 291; Voodford v. Stephens, 51 Missouri, 443; Stivers v. Home, 62 Missouri, 473 ; Kidwell v. Kirkpatrick, 74 Missouri, 214; Leavitt v. Laforce, 71 Missouri, 353.

Mr. G. G. Vest for appellees cited: Lloyd v. Fulton, 91 IT. S. 479; Smith v. Vodges, 92 IL S. 183; Sexton v. Wheaton, 8 Wheat. 229; Mattingly v. Nye, 8 Wall. 370; Trust Co. n . Sedgwick, 97 IT. S. 304; Moore v. Page, 111 IT. S. 117; Clark v. Killian, 103 IT. S. 766; La/ne v. Kingsbury, 11 Missouri, 402; Payne v. Stanton, 59 Missouri, 158; Burgess v. McLean, 85 Missouri, 678; Gould v. Hill, 18 Ala. 84; Heck v. Clippenger, 5 Penn. St. 385 ; Tyson) s Appeal, 10 Penn. St. 220; Hartley v. Hurle, 5 Ves. 540; Tyler v. Lake, 2 Russ. & Myl. 183; Neimcewicz v. Gahn, 3 Paige, 614; S. C. 11 Wend. 312; Johns v. Reardon, 11 Maryland, 465; Terry v. Wilson, 63 Missouri, 493; Payne v. Twyman, 68 Missouri, 339 ; Wilcox v. Todd, 64 Missouri, 388.

Mr . Just ice Fiel d delivered the opinion of the court.

This is a suit in equity to set aside as fraudulent and void, as against the plaintiffs and other creditors of the defendant, William Miller, a deed of 920 acres of land in Atchison County, Missouri, executed by him and Mary Miller, his wife, to William L. Patterson, as trustee, to secure to her an alleged debt of $16,000. The deed bears date on the 10th of November, 1873, and recites the indebtedness to her of William Miller in the amount stated, with interest from June 25, 1871, “ being the sum realized and received by said William Miller from the sale of the individual property of the said Mary Miller, and used by him in payment for the real estate hereinbefore mentioned and described, and to secure the in-

It appears that William Miller was; in 1857, and for some years afterwards, a merchant in Catasauqua County, Pennsylvania, and was successful in business there. Subsequently he became a contractor for the raising of mineral ores in that state, and at a later period was engaged in building the Lehigh and Susquehanna Railroad. In 1868 he was a contractor on the Union Pacific Railroad. In this business he made large sums of money. In 1873 he had a contract for building the whole or part of the Chicago and Atlantic Railway in Ohio, and, on the 20th of August of that year, he sublet to the plaintiffs the construction of twelve miles of the road. By the terms of his contract with them he was to pay for the work of each month during the following month, after the receipt of the estimate of the work by the engineer in charge. The work, as thus estimated for the months of September and October of that year, amounted to $7153, and the subsequent work in that and the following year carried this amount to about $14,000. For the indebtedness thus incurred the plaintiffs brought suit in the Circuit Court of Atchison County and sued out a writ of attachment, which was levied upon the land embraced in the trust deed to William L. Patterson. Judgment was recovered in that suit for $14,000, but to the enforcement of the attachment the trust deed to Patterson was in the way, and, in order that the attachment might be enforced by a sale of the land, the present suit was commenced to set the deed aside.

The truth of the recital, that the indebtedness, to secure which the deed was executed, was for sums realized and received by William Miller from the sale of the individual property of Mary Miller, is assailed, and the statement averred to be false, and the instrument charged to have been executed to defraud the plaintiffs and other creditors of Miller.

It is conceded that William Miller, the husband, furnished the money with which these several tracts were purchased. That fact does not affect the validity of the deeds, nor the right of the wife to hold the property for her own use. He was at the time possessed of ample means, beyond any claim against him. Indeed, it dóes not appear that he was then in debt at all, and, as we said in Jones v. Clifton, 101 U. S. 225, 227; “ The right of a husband to settle a portion of his property upon his wife, and thus provide against the vicissitudes of fortune, when this can be done without impairing existing claims of creditors, is indisputable. Its exercise is upheld by the courts as tending not only to the future comfort and support of the wife, but also, through her, to the support and education of any children of the marriage. It arises, as said by Chief Justice Marshall, in Sexton v. Wheaton, 8 Wheat. 229, as a consequence of that absolute power which a man possesses over his own property, by which he can make any disposition of it which does not interfere with the existing rights of others.” And in Moore v. Page, 111 U. S. 117, we said: “It is no longer a disputed question that a husband may settle a portion of his property upon his wife if he does not thereby impair the claims of existing creditors, and the settlement is not intended as a cover to future schemes of fraud. The settlement may be made either by the purchase of property and taking a deed thereof in her name, or by its transfer to trustees for her benefit.”

In this case it appears that a portion of the claim of the plaintiffs, amounting to $7153, was due when the deed of trust was executed, and also that William Miller was at that time insolvent. If, therefore, there had been no other consideration for the deed than a desire to secure for his wife provision against the necessities of the future, it could not be sustained. It must find its support in the fact alleged in the recital, that the amount secured was a sum realized from the sale of her individual property, and used by him. It is not material whether the recital be accurate in stating that the sum received from the sale of her property was used in payment of the real estate covered by the deed; it is sufficient if Miller was indebted to his wife in the amount mentioned. That the property in Pennsylvania, deeds of which are mentioned above, was used for his benefit, and to pay or secure his debts, is sufficiently established. The amount realized therefrom, as we read the evidence, was greater than the sum named in the trust deed as due to her. That deed for her security stands, therefore, upon full consideration. Had it been given to a third party for a like debt, it would not be open to question that it would have been unassailable. The result is not changed because the wife is the person to whom the debt is due and not another. While transactions by way of purchase or security between husband and wife should be carefully scrutinized, when they are shown to have been upon full consideration from one to the other, or, when voluntary, that the husband was at the time free from debt and possessed of ample means, the same protection should be afforded to them as to like transactions between third parties.

In reaching this conclusion we do not treat the Ramsey farm in Missouri as having become the separate property o Mrs. Miller by the conveyance being taken in her individua name; and therefore have no occasion to consider whether, under the decisions of the Supreme Court of that state, it could be protected from the creditors of her husband.

Syllabus.

This conclusion, with reference to the deed of trust, renders it unnecessary to consider the numerous transactions of William Miller in the purchase and sale of property, and in his dealings with his creditors. They are not always as susceptible of explanation as would be desirable. It is enough, however, that they do not weigh down the considerations we have mentioned.