37 Ky. 405 | Ky. Ct. App. | 1838
delivered the Opinion of the Court.
Prior to 1832, George W. Kouns sold and conveyed to John C. Kouns, a tract of land, including a forge and fixtures, on “Twelve Pole,” in Virginia; and John C. jointly with Jacob Kouns, whom he took into partnership in the establishment, executed their ten notes to George W. Kouns — each for a thousand dollars, payable annually.
On the 6th day of October, 1832, David and John Trimble — upon an execution in their favor, against George W. Kouns, returned “no property found,” which had issued on a judgment rendered in their favor, for eleven hundred and forty .one dollars, ninety eight cents, with interest thereon from the 7th day of July, 1832, and costs — exhibited their bill against the Kounses, with an injunction, praying that an amount sufficient to cover his debt, interest and costs, out of said sum due to G. W. Kouns, might be decreed to be paid to him.
On the same day, L. L. & T. T. Shreve, upon the like return, upon an execution which they had sued out, on a judgment recovered by them, against G. W. Kouns, for the sum of two hundred and fifty seven dollars sixty nine cents, with interest from the 26th of May, 1829, and costs, exhibited their bill, with injunction — praying that so much of the demand which might be owing for the forge, &c., as was sufficient to pay their debt, interest and costs, might be decreed to be paid to them.
The restraining orders, in both of the cases, enjoined and restrained the defendant, George W. Kouns, from
On the 9th of April, 1834, the Trimbles filed a supplemental bill, in which they charge, that George W. Kouns had purchased a large tract of land, on Shadwick creek, from T. Ward and Young, and had taken their bond for the conveyance of the same; but combining with one Richard Maston, to defraud his creditors, had placed the bond in his hands, without consideration, with a view to hinder and delay his creditors; and had made a contract in the name of Maston, with J. C. & J. Kouns, whereby a partnership was formed between them, in the lands on Shadwick, as well as in the forge &c. on Twelve Pole; and they were to erect, on the former, a blast furnace, and each were to be equal partners in both the forge and furnace. And that afterwards, the said George W. had sold out his interest to his two partners, for five thousand dollars — five hundred of which was paid down, and a note, or bill of exchange, for one thousand dollars made to Maston, payable in sixty days, and two other notes executed for seventeen hundred and fifty dollars each — one payable in one year, and the other in two years, from the date. All of which notes were executed by said J. C. & J. Kouns, jointly with George, William, Hugh and Thomas H. Poage. And that said George W., further to evade his creditors, had caused the said notes to be assigned to one Harvie, a fictitious person, or if he be in being, who has no beneficial interest in the same. He makes the said Kounses, Poages, Maston and Harvie parties, and prays that his debt, with interest and costs, may be paid out of the first money that may fall due, and obtains an injunction restraining the payment of any part of the said sums to said George W. Kouns.
At the July term, 1834, the Shreves amended their bill, charging a confederacy between the Kounses, to hinder and delay the creditors of George W. Kouns,
John C. and Jacob Kouns, on the same day that the Trimbles’ supplemental bill was filed, answered it, and the original bill — substantially admitting the facts charged in the amendment, and not controverting those contained in the original. But they allege that the payment of one thousand dollars was in a bill of exchange drawn on John Linton of Louisville, payable sixty days afterdate, and had been indorsed by Maston to Harvie, as they were advised. George W. Kouns also answered the bill and amendment — admitting the execution of the notes, and alleging that no fictitious assignment was made of them, to any person, anterior to the 23d September, 1833; and so evasively answering the charge as to the use of the name of Maston, and the assignment of the notes to Harvie, as to leave no doubt that those steps were taken to evade his creditors, and that they, or either of them, had no interest in them.
At the October term, 1835, J. C. & Jacob Kouns answered the Shreves’ bill and amended bill; in which they substantially alleged the facts charged in the Trim-bles’ bill and amended bill as to the contracts between them and George W. 'Kouns, as to the purchase of the forge and formation of partnership between them and Maston, nominally, and the purchase of his interest in the firm, and the execution of the bill of exchange and notes to him. But allege that, the principal part of the ten thousand dollars, to be paid for the forge, had been paid to George W. Kouns, and the residue given up, and the notes cancelled, as a part consideration of the partnership with Maston. But in setting out the amounts paid, the sum falls short of the one half of the amount, so that an amount more than equal to the one half of the ten notes of one thousand dollars each, was surrendered up, upon the formation of the partnership; which was long after the bills of the Trimbles and Shreves were filed, and process served. They further, allege that the bill of exchange had been assigned to Harvie, and
On the 6th day of April, 1835, Charles W. Dischler, on an execution returned “no property found,” on a judgment in his favor, against George W. Kouns, for the sum of six hundred and seventy two dollars and ninety eight cents, with interest from the 6th day of February, 1832, and costs, exhibited his bill — charging the facts alleged in the Trimbles’ bill and amended bill, in relation to the original and subsequent contracts between the Kounses, and the use of Maston’s name as an evasion, and the assignment of the notes and bill of exchange to Harvie, for the like purpose, and make the Kounses, Maston and Harvie defendants.
At the November term, 1835, they amended their bill —charging that William Ward and James McAndless were in possession of some, or all of the notes and bill of exchange mentioned in his original bill, and that they hold the same in trust for Georgs W. Kouns, “ having no beneficial interest thereinand obtained an order restraining the payment of said sums of money to the extent of his debt, interest and costs.
Ward, Plarvie and Maston failed to answer. J. C. &; J. Kouns answer — alleging the matters substantially alleged by them in their answer to the bill and amended bill of the Shreves, and make their answer likewise a cross bill. McAndless answers — charging a purchase of the note of seventeen hundred and fifty dollars by himself, Paul and Shreves, for a valuable consideration, with
On the 12th day of July, 1836, John C. and Jacob Kouns filed their bill of interpleader against the Trim-bles, the Shreves, Paul, McAndless &c., George W. Kouns, Dischler, Maston, William Ward, Biggs and Beatty &c.: in which they charge that, Maston was used as a mere nominal party, for the benefit of George W. Kouns, and set up the fraud relied on in their answer and cross bill to the Shreves’ bill, and- set forth the prosecution of the then several suits, before stated, against them, for the same demand, and further • allege, that the Trimbles had obtained a decree, and that the bill of exchange was in possession of Ward, who claimed some interest therein, and that Paul &c. had recovered a judgment on the first note that fell due, and that Biggs and Beatty had, since the commencement of .the aforesaid suits in chancery for the debts due from them to George, taken an assignment of the last note, by an arrangement with George, and had recovered a judgment thereon against them; and that they were in danger of being compelled to pay the same debts twice or thrice. They therefore' pray that, they may all inter-plead, and, if the contract' Was not rescinded, that the money might be decreed to be paid to those entitled to it. They prayed and obtained an injunction against Beatty and Biggs’ judgment, and process seems to have been executed upon them alone;
Beatty answered, admitting his knowledge of the pen-dency and proceedings in the aforesaid suits in chancery, at and before he took an assignment of the said note to himself and Biggs, and was counsel for the Shreves and Dischler; that an arrangement was made between those complainants and George W, Kouns, who was desirous to pay those debts, and Biggs who, as executor of McConnell, held a claim on him, by which it was agreed that the note should be assigned to him and
Catlett & Williams were made parties to the bill of .interpleader, and answer — setting up their claim t.o eight hundred dollars, out of the note; but it is not shown when their interest accrued.
The assignment to Biggs and Beatty was made -on the 3d of June, 1836.
The Trimbles having answered, that théir debt had been paid, the bill of interpleader of the Kounses, and the suits of the Shreves and of Dischler were consolidated, at the April term, 1837; and at the July term next thereafter, a decree was rendered — crediting the sum of fourteen hundred and ninety dollars forty cents, paid 'by the Kounses to the Trimbles, on Beatty’s and Biggs’ judgment, and perpetuating the injunction of the complainants in the bill of interpleader, as to that amount., and dissolving it as to the balance, with damages, and .dismissing the bills of Dischler and the Shreves, upon -the alleged ground that there was no money to pay them. From this decree, they and Beatty and Biggs have appealed to this Court.
The facts present a proper case for a bill of inter-pleader. Different persons were setting up claim to the same fund in their hands. And they were in danger of being subjected to a double liability for the same demand. To avoid which, they had a right to appeal to the Chancellor, to direct to whom the payment should be made.
But their bill of interpleader has been prosecuted with great negligence and irregularity. No affidavit ‘has been attached to, or exhibited with the bill, that “it
Those complainants were not, therefore, bound to' stay the proceedings in their several suits, until the complainants in the bill of interpleader might choose to prepare their case for trial. But had those suits been permitted to remain upon the docket, until they were all prepared, or had the bill of interpleader been prepared for trial at the time that ether suits were set down'for hearing, it perhaps might not have been improper to consolidate and try them all together.
But it seems that when the order for consolidating them was made, as well as when they were set down for hearing, process had not been taken out or served upon the complainants in those suits, or any other of the parties setting up claim to the fund, except Beatty 1 c) i 7 J- •f and Biggs, and Catlett and Williams. The case was, therefore, wholly unprepared for hearing, and the complainants had been güilty of gross negligence in its preparation. It was, therefore, irregular and"erroneous to consolidate the suits, or, by such order of consolidation, to stay the complainants in those suits, or to make their cases await the negligent preparation of the case, 'on the part of the complainants, in the bill of interpleader; and especially, too, when no steps were taken to entitle them to an injunction, and none was obtained.
We must therefore take up those cases as if no bill of interpleader had been filed.
Were the Trimbles, therefore, entitled to their decree? We are perfectly clear that they were, and that they had a right to demand its payment from John C. & Jacob Kouns, whether they were exposed to the hazard of losing it or not. The latter were indebted, to George W. Kouns, in a much larger amount than their debt, at the time when their orignal bill was filed, and their injunction obtained, and process served. Maston had no beneficial interest in the demand, if even, at that time, the notes were nominally assigned to him, which does not appear. They had no right, therefore, to pay the money to George W. Kouns, or any other, or to make any arrangement with him, or any one claiming or pretending to claim under him, without the order of the Court. And if they did do so, they were guilty of a contempt to the authority of the Court, and could not thereby escape from their responsibility for the demand. Individuals are not thus slightly to be permitted to slip through the Chancellor’s fingers, and evade responsibility for a just demand; and the more especially, since it turns out that the assignment to Maston was a mere device to evade the grasp of the creditors of George; and there is now strong intrinsic evidence deducible from the facts in the record, as well as their own answer and bill of in-terpleader, which was sworn to by them, and is consequently evidence against them, that they were apprised of it at the time when they made the second contract, that he was a mere catspaw of George, used by him to delude and decieve his creditors.
But as the Trimbles, at the next court after the third contract was made, exhibited their supplemental bill— charging their indebtedness to George on that contract,
The same remarks that have been made in relation to the Trimbles’ orignal bill, and the effect of the proceedings on it, apply with equal force to the original bill of the Shreves. They too had a right to have a decree
The bill of Dischler was exhibited after the last contract was made; and he seeks to subject the debts due upon it, to the payment of his demand, and makes all necessary parties, and proper allegations, to test the origin and character of the notes and bill of exchange. No answer was made by Maston, or Harvie, and the
As to the cross bills of the Kounses in this, and in the case of the Shreves, they should be dismissed with costs.
It is, therefore, the opinion of the Court, that the decree of the Circuit Court be reversed, and cause remanded, that the injunction of John C. & Jacob Kouns, obtained on their bill of interpleader, may be discharged, as well because of their failure to sustain the fraud alleged — being the ground upon which it was granted — as for negligence in the preparation of their cause. And that a decree may be rendered in favor of the Shreves, on their bill against J. C. & Jacob Kouns, for the amount of their demand, interest and costs. And also, that a decree may be rendered in favor of Dischler, against the same, for the amount of his judgment, interest and costs, to be credited on the judgment rendered in favor of Beatty and Biggs; and that the said Kounses be allowed time to amend their bill, and bring all necessary parties before the Court, to assert their proper credits, upon the payment of the demands decreed against them; and take such othér steps, as may be consistent with equity, and not repugnant to this opinion; and that the cross bills of the Kounses be dismissed, with costs.
The appellants are entitled to their costs in this Court.