61 F. 481 | D. Kan. | 1894
It appears from the pleadings and testimony in this case that one of the defendants, Phipps, went from the state of Kansas east, for the purpose of procuring money to be invested in real estate in the vicinity of Ellsworth and Wichita, Kan., representing that said lands were exceedingly valuable, could be platted into town lots and blocks, and would return a large profit upon the investment to be made; that he, or the parties with whom he was connected, had options on said lands; that he obtained from the plaintiff and one Babcock the sum of $7,750, to be invested in such lands, representing to them that other citizens of adjacent cities were about to make similar investments, and that, with the money thus furnished, the plaintiff and Babcock and two
I think a statement of the case is sufficient to show, without further evidence, that there was collusion between Phipps and the Daceys in the entire transaction, and that a fraud has been perpetrated by them upon the plaintiff in this action, and that, as between the plaintiff and the Daceys and Phipps, they are entitled to the relief asked for. I am aware that there are authorities without number that, where a volunteer pays off a mortgage, he cannot be subrogated to the rights of the mortgagees, but where a fraud has been practiced upon him, and his money fraudulently used by connivance with his agent, or the one intrusted by him with his money, and the mortgagor, then a court of equity certainly should grant him the relief asked for, to be subrogated to the rights. of the. original mortgagee. Phipps had not a right to do anything with the money intrusted to him but to invest it in lands. That was the contract; that was the understanding; and no hint was conveyed to the plaintiff that his money thus obtained from him was to be thrust into the maw of a Kansas corporation organized as this was, he to receive such an insignificant share of the stock as to render him entirely helpless, and without any voice in the management of the corporation or company. When we consider the original cost of the lands,—$13,000,—and that the plaintiff furnished, in order to pay. off the mortgages upon it, the sum of $7,750, it would seem that anything like a fair consideration, of his rights would have induced the parties forming the Ellsworth Midland In
But it is contended that one Evans, who is made a defendant herein, has rights superior to the rights of the plaintiff, because he has obtained, in the district court of the county where the land was situated, a judgment against tlie Daceys, the original owners of the land, and by virtue of said judgment and attachment proceedings his rights are superior to tin* lights of the plaintiff herein. His claim is based upon a fee or commission to be paid him for the purchase of the lands in controversy, and his original claim was in the sum of $3,472.15 for commissions, amounting to $5 per acre for the purchase of the land. The court may say in passing that such commissions are at least quite liberal, and seem to be acquiesced in by the Daceys, whether they were contracted for or not. The suit of Evans was instituted in said court after the filing of the original petition in this suit in the circuit court of the United States for the district of Kansas, second division. But it is claimed (hat, because no subpoena was issued until after the proceedings by altachment were instituted under the Evans suit, and because he was diligent and pursued ids suit to judgment, and a sale was had of the property, his rights are superior to the rights of the plaintiff in this action; and the court is referred to numerous authorities in the state of Kansas which counsel insist shall regulate the course of procedure in this court. While due deference is paid to the decisions of the state eourls of (he state in which the courts of the United States are held in common-law proceedings, yet the courts of the United States refuse to be governed in equity proceedings by any statute law or the decision of any state court thereunder. This admits of no question, and the inquiry here is, was the institution of this suit in the circuit court of the United States sufficient notice to Evans, as provided for by the rules of said courts, or to all parties claiming any interest in the lands in this action? It is true, as contended by counsel for Evans, that a suit is not so pending as to operate as const motive notice until the process has been served or publication made. Games v. Stiles, 14 Pet. 326. And the writ in this case was not served until after Evans had instituted attachment proceedings against the land, although the bill had been filed February 5, 1892, and service had on the defendants other than Evans on July 5, 1892, and on C. J. & J. M. Evans on October 6, 1892, which was prior to final judgment in the district court of the state in favor of Evans. So the suit in this court was constructive notice to all ihe parties who now set up any equities in the lands sought to be subjected to the claim of plaintiff in this case, prior to the rendition of the judgment under which they purchased; aud they cannot be held as innocent purchasers, for, up to