244 F. 216 | E.D.S.C. | 1916
The bill of complaint in this case, was filed on July 3, 1916. All parties defendant- have been duly served with, process and have appeared and answered. The case, being at issue, came on to be heard. The testimony has been taken. Counsel for all parties interested have been heard. The facts of the case appear to be that Caleb B. Huiet, a citizen of the state of South Carolina, residing in the city of Charleston, and carrying on business therein, on the 31st day of March, 1914, made a statement in writing of his business affairs to the plaintiff, the Harriman National Bank. Erom the testimony put in in the cause the court is satisfied that on that day, the 31st March, 1914, Caleb B. Iluiet was insolvent and largely insolvent, and that the statement made by him to the Harriman National Rank o.u that day for the purpose of procuring credit for loans to be made by the Harriman National Bank was wholly erroneous and untrue, and displayed a state of solvency on the part of Caleb B. Iiuiet which was as a fact untrue; he being at that date insolvent. Subsequent thereto, in July and August of tlie year 1914, Caleb B. Huiet on the basis of this statement procured loans from tlie complainant, that is, two different loans for $15,000 each, aggregating $30,000 which loans were at their maturity renewed, and still remain wholly unpaid, with interest from the maturity of the last renewal, viz. for $15,000 with interest from June 8, 1915, and for $15,000 with interest from May 17, Í915. It further appears from the testimony that John II. Huiet, the father oí Caleb B. Huiet, was a.broker of the Franklin Sugar Refining Company, one of the defendants, and carried on business as such broker for them in the city of Charleston, but that his business seems to have been largely turned over to his son, Caleb B. Huiet, who was the party actively carrying it on. In December, 1914, the defendant Franklin Sugar Refining Company seems then or thereabouts to have ascertained that Caleb B. Huiet was very largely indebted to it for the proceeds of sugar belonging to the defendant the Franklin Sugar Refining Company which he had sold, but appropriated the proceeds to his own n.se. It appears from the testimony that this debt aggregated some S298,Q00. Thereupon the Franklin Sugar Refining Company proceeded to protect itself-by securing from Huiet an assignment of all the available securities of Huiet which apparently it could compel him to assign to it, including therein four policies of insurance, one in the Equitable Life Assurance Society for $50,000, one in the Atlantic. Life Insurance Company for $50.000, and two in the Southeastern Life Insurance Company for $30,000 each. These two in the South
It is found, therefore, that all charges of fraud against the Franklin Sugar Refining Company arid the defendant Huey C. Huiet on this point are unsustained, and the bill of complaint herein as against the Franklin Sugar Refining Company is ordered, adjudged and decreed to be dismissed, with costs to the defendant the Franklin 'Sugar Refining Company.
With regard to the defendant Katherine R. Huiet it is admitted that the premiums upon the policy in the New York Rife Insurance Company, which is payable to her, were paid by her grandfather, John H. Huiet, and were not paid by the deceased, Caleb B. Huiet. It is therefore ordered, adjudged, and decreed that the defendant Katherine R. Huiet is shown to be lawfully entitled to the insurance policy referred to payable to her upon the death of her father, Caleb B. Huiet, and no evidence of fraud or intended fraud on her part has been introduced, and the bill of complaint herein is dismissed as to her with costs to her.
This leaves the question of the right of the defendant Lucy C. Huiet to receive the proceeds o£ the five policies Of insurance, the proceeds of which she claims, that is to say, the three policies before referred to payable to her direct, and the two policies payable to her if living at the death of Caleb B. Huiet arid which were reassigned by the Franklin Sugar Refining Company. Whenever a person dies heavily indebted (and more strongly so when he dies totally insolvent, with practically no assets to apply to the payment of his creditors, and many of these creditors standing in the position’of creditors who have been misled and deceived by the statements of the deceased in procuring loans from them), the spectacle presented of the creditors going unpaid and the wife and children of the deceased being amply provided for from the proceeds of life insurance policies procured and apparently paid for by the deceased out of funds procured by him from these very creditors is apt at first sight to shock equitable sensibilities,
It further appears from the testimony in this case that the total amount of premiums in the life insurance policies in question, the proceeds of which are claimed by the defendant, Lucy C. Huiet, and which premiums were paid subsequent to the accrual of the debt of the Harri-man National Bank, the" complainant herein, amount to the sum of $2,287.16 paid in the year 1914; the premiums which became due in the year 1915 appearing to have been settled either by loans which were deducted out of the proceeds of the life insurance policies before payment or by Mrs. Lucy C. Huiet herself. It is therefore ordered, adjudged, and decreed that the creditors of Caleb B. Huiet are entitled to receive out of the proceeds of these policies claimed by Lucy C. Huiet the sum of $2,287.16, less $500, leaving a balance of $1,787.16, with interest to be calculated from the average date of payment of the different premiums in the year 1914. A claim has been made on behalf of Mrs. Lucy C. Huiet that she, being a creditor of Caleb B. Huiet, is entitled to have these premiums paid iti the year 1914 charged to her as a set-off against the balance of the indebtedness due her at that time. In the first place, there has been no sufficient proof of the debt of Lucy C. Huiet at that time to rank as an individual creditor. The books of Caleb B. Huiet are evidence against him and as against any one claiming under him to establish his insolvency, but his books would not be evidence in his own behalf, nor in behalf of any one-in the same interest with him, although they might be evidence upon proper proceedings to establish the debt of Mrs. Lucy C. Huiet by the admission of that debt; but the evidence of the mere existing balance due her on his books as shown as part of the general aggregate of debt under the shape of the proceedings in this case is not a sufficient establishment of her claim for her to rank as an individual creditor. Furthermore, it appears to the court, in view of the statute, as a statute intended for the benefit of all existing creditors, she should not be entitled to the set-off claimed unless shown to be a creditor existing at the time.
It is therefore ordered that it be referred to D. B. Billiland, Esq., one of the standing masters of this court, to advertise for all creditors of Caleb B. Huiet to come in and prove their claims before him on or before a day named not more than six weeks after the date of this decree, and that he malee such advertisement once a week for three successive weeks in any paper of general circulation in the city and county of Charleston.
It is further ordered that nothing herein contained shall be construed to prejudice any right the defendant Lucy C. Huiet may haye to come in and establish her right to her pro rata payment as a creditor of Caleb B. Huiet.
It is further ordered that the said standing master do further send by mail a printed notice to each creditor appearing upon the books of Caleb B. Huiet produced in this case by mailing the same to such creditor if his address can be ascertained from the said books to come in and prove his debt.