1 Walk. 472 | Pa. | 1866
The Supreme Court reversed the decree of the Court below, and reinstated the plaintiff’s bill, on May 15, 1866, and made the following order, per
It .is therefore ordered, that the decree of the Court below be reversed, and that the defendant do account for all the stock held by him in trust for the plaintiff, and that the record be remitted to that Court, with direction to refer the case to a Master to ascertain the number of shares of the capital stock of the Bald Eagle Yalley R. R, Co., held in the hands of the defendant at the time of the filing of this bill in the Court below, at the time of his purchase of the one-eighth of the Tyrone and Lock Haven Railroad from Philip M. Price; and to take an account of the profit of the remaining two-thirds of said stock, transferred by the defendant to W. W. Willard and Peter Herdic, which would have accrued to the plaintiff, had the same been duly transferred to him before the filing of the bill, on a fair allowance to the defendant of the advances made by him or on his behalf in payment of the said shares of stock; and make a report of the
Robt. Hawley, Esq., was appointed Master and made a report and tbe Court made a decree ordering John W. Maynard to transfer the 390 shares remaining in his name, and that he pay $35,768.24, the profits which would have accrued to Brady on the stock transferred to Herdic and Willard.
Maynard then appealed and Hon. Jeremiah S. Black and C. A. Mayer, Esq., argued in his behalf, that the decree previously made was not to be regarded as settling the questions, involved; Pennock’s Estate, 8 Harris, 268. According to Brady’s own statement he was trying to defraud and hinder his creditors; and was therefore not entitled to equitable relief. At most Brady would only have an election to take the money or stock; and he took the money. When the property was struck down, the amount that Brady was entitled to get was fixed ; and if Maynard subsequently purchased an interest in the road, Brady was not injured.
W. H. Armstrong, James Armstrong and G. W. Youngman, Esqs., for appellee argued that the Supreme Court decided the question on the former appeal; Brightly’s Eq., 530. The bill stated the fraud sufficiently; Story’s Eq., Pl., Sect. 27; Story’s Eq., Sect. 253, 186, 187, 188, 190. The cestui que trust may proceed against the trustee alone where the trustee has improperly parted with the trust property ; Story’s Eq. Plead., Section 221. Maynard, having acted fraudulently, was not entitled to compensation; Swartswalters Account, 4 Watts, 77; Bredin vs. Kingland, 4 Watts, 420; Fisher vs. Knox, 1 Harris, 622. Maynard having refused to account is liable for the highest market price; Reitenbaugh vs. Ludwig, 7 Casey, 131; Bank vs. Reese, 2 Casey, 143; Mayne vs. Damages, 96; Suydam vs. Jenkins, 3 Sanford S. C., 614; Sedgwick Damages, 266; West vs. Beach, 3 Cowen, 82; McAuthor vs. Seaforth, 2 Taunton, 258.
The Supreme Court reversed the decision of the Court below and dismissed the bill on May 14, 1867, in the following opinion by
The principal ground claimed by the plaintiff for a decree against the defendant in this bill, is stated by his counsel as follows : “On the 24th of November, 1862, Samuel Brady, the plaintiff, filed his bill in equity against John W. Maynard, defendant claiming from him certain shares of the capital stock of the Bald Eagle Yalley Railroad Co., which he charged the defendant with having obtained as attorney for him, aud in which he (Maynard) had no interest in his own right, but only as trustee for said Brady, and which he refuses to transfer to the plaintiff.” On this point the bill charges as follows :
“XXX. And your orator further saith, that the said Maynard never at any time had any connection with the business of the said Brady, except as his attorney and counsellor at law, and the stoek, and money, and notes, and drafts, and bonds, hereinbefore referred to, came into the hands of the said Maynard in his capacity of attorney and counsellor of the said Brady, and in no other manner whatever.”
It is a trust, not by express contract, nor as resulting from the payment of money, but solely one springing from the relation of counsel and client, which it is the object of this bill to enforce. I did not hear the argument when the case was up before, being absent at Nisi Prius, but on looking at the paper book of the appellant on that occasion, the appellee now, this was asserted then as now, to be the foundation for the plaintiff’s claim for relief. Indeed, upon no other ground is there a semblance of a case for the plaintiff upon the principal or important matter charged. There are other matters of minor consequence charged in the bill, which will be noticed in the course of this opinion.
On the 26th of November, 1862, as above stated, the plaintiff’s bill was filed. On the 29th of April following, the plaintiff assigned all his claims in the case to A. H. Best; and before hearing, and on the 6th of December, 1863 Brady died, and Best succeeded him in this suit as administrator, and now prosecutes it for the benefit of himself as assignee. So the record stands.
The main inquiries will be, whether the one-eighth interest in the purchase of the “Tyrone and Lock Haven’ Railroad,” taken
Before proceeding to the consideration of theinquirieB'suggested, there is a preliminary question to be disposed of; and that is whether the decretal order made when the case was before us on the appeal of the plaintiff, must be regarded as a finality upon the questions now before us ; and which, it must be admitted, were, substantially, supposed to have been passed upon then ? The object of the order made, is apparent on its face. It was a direction to the Court below how to proceed in making their decree on the merits of the bill which they had dismissed, and which was reinstated by the order. It is not intended to be denied, however, that this is in substance a re-argument of the questions passed upon then, in order to arrive at the result of that appeal, viz., a reversal of the decision of the Court below dismissing the plaintiff’s bill; but no such decree was before us then as now, in form or substance. But conceding all that can be claimed; to wit, that it is a re-argument before a full bench, this, as everybody knows, is very common in practice, and is never, or at least ought never
The order was, therefore, not a decree. It was neither so said nor so intended, nor so in form. It was a reinstatement of a dismissed bill, with an order of procedendo, and statement of*principles to govern as “equity and justice” would approve in making a final decree. Nothing could deprive the defendant against whom it was to be entered, of his right to appeal, and his right to an argument on every principle involved in it, otherwise the right to appeal would be simply a mockery. It is no answer to this, that the Court has once expressed an opinion on all the points involved, especially as it has not expressed it in the form accepted by the law as evidence of its final determination, namely; by a decree or judgment. It is true the laboring oar is in the hands of the party who undertakes to stem the current of pre-declared opinion, but he has a right to do it if he can, and the Court must listen to the suggestions of possible error in its opinions, if it have any ambition to be regarded as a “Court of justice.”
But it is suggested that the appellee is here relying on the opinion given a year ago in this case, and not to re-argue it. Doubtless he does ,• and so does every party rely on some authority or principle deemed applicable to his case, and yet it often happens that the case relied on is itself not law. If every deóision, once pronounced were to be implicitly followed because once made, error would never be corrected, and to justify this on logical grounds, Courts would have to be invested with imputed infallibility at least. The assent seems very general that Courts may err, and it is not less universal that they are bound to correct their errors as speedily as possible when they discover them. We must, therefore, carefully look into our former opinion, in the presence of the strong appeal made against its accuracy in view of the facts, and see if it be right or wrong.
On the suggestion of surprise or want of notice of an intended discussion of the principles involved, when the case was here before, we can but regard it, after the very able argument presented by the counsel of the appellee, on every point iu the case, rather as an illustration of what might happen without notice, than
Brady, the plaintiff, had been a contractor on the Tyrone and Lock Haven railroad, and on settlement with the company for work done, made in 1859, he took their bonds at fifty cents on the dollar in payment, the company being without money or other means of payment. This claim being liquidated at $52,000, he received from them $104,000 of their bonds. The company being insolvent, he consulted counsel about collecting this claim against it. The defendant advised that a sale of the road and its franchises be made. To accomplish this, the defendant and Mr. Campbell, of this city, were retained as counsel, and so proceeded as to have a sale ordered by this Court, to take place in this city in Novembe r, 1860. The sale took place, and the property was struck down to Brady, the complainant, for the sum of $51,000, but the amount bid exceeding by $20,000 the sum he was authorzied to bid by parties associated with him to buy, they refused to consummate the purchase, and he not being able himself to do so, the sale failed. His counsel, at his request, proceeded again for a new order of sale,
■ That the defendant was counsel for Brady up to the time of the sale, and until the money realized from it was collected and- paid over to him, or to his order, is not disputed. He attended the sale, and seems to have made every reasonable effort to. promote the in'erests of his client. He obtained favorable terms for him from the intended purchaser of the road, in an agreement that if the property brought less than $25,000, the amount agreed to be bid for it, he, Brady, should have two-thirds of any sum less than that, which it might bring, in addition to his pro rata on the bonds'held by him. This was a good arrangement for him, out of which he actually realized a sum more than equal to his distributive share upon the bonds. And here it may be as well as in any connection to state that before filing the bill in this case against the defendant, the testimony clearly shows that Brady had received through him as his counsel, every dollar coming to him from the proceeds of the sale , and also, that he had taken out of his hands Price’s draft for his share of the four thousand dollars, the sum less than $25,000 bid for the road, being $2,666,-66. When the decree was asked for below, it is true, if any fact can be proved by testimony, oral of written, that the defendant held no money of the- plaintiff as his counsel, nof had applied any of his money or property to the 'purchase of any share in the Ty
The charges in the plaintiff’s bill against the defendant, in which as essential elements of his case are trust and fraud, are distinctly and positively denied by the answer. Are they, therefore, so fully sustained by the proofs as to demand an affirmance of the decree made below ? Relatively they- should be clearly established. A doubtful equity is like a doubtful charter, it will not come up to what it aims at. The proof should clearly preponderate in the affirmative' over its opposite. Is that this case? When it .was first tried below, the learned judge decided against it, and delivered a very able opinion in vindication of his conclusions. We reversed his decree, and in the present case he has but followed what he understood to be his duty in making it.
Our first inquiry is, whether the proof establishes, according to equity practice, that a trust in favor of Brady arose when the share in the purchase of the Tyrone and Lock Haven Railroad was set down to the defendant, or whether that relation was extended by the parties to take in any purchase of an interest from the successful bidder at that sale ? That this necessarily resulted from the pre-existing relation of attorney to procure a sale of the property will not be pretended. It is not the business of an attorney to buy back property sold even on his client’s execution, where it has already been purchased by a third party. That is the work of an agent, not an attorney ; and that was the exact apparent position here. Are we to assume, in order to establish such a relation, that it had been agreed on that in order to collect as much as possible for his client, the property should -be sold, .and the pro rata should be collected from the purchaser-and then an interest brought back by the defendant from that purchaser ? .There is no proof of this, and the difficulty in the way of assuming it is, that it is not within the ordinary scope of the duty .of an attorney employed to collect a debt; and if .by any process
The principal witnesses for the plaintiff on this point are Mackey and Price. If they do not make out that relation, it does not exist. Quod non apparentibus de non existentibus. It is to be noticed that neither of these state more in regard to the arrangement for the purchase of the road, prior to the sale, than that it was understood that Maynard would take an eighth. No contract, agreement, or declaration of his to that effect is proved. Nor is it charged in the bill that any contract with anybody existed. If such an agreement did exist, is strange that it has not been produced or even alleged by the plaintifF. Is it to be inferred from what transpired at and after the sale ? Neither fraud nor a special contract are to be imputed -without proof. Especially as to the former, the proof must be clear. A contract to purchase the stock for plaintiff outside of the relation of counsel, is not alleged. Is there proof that he obtained it in this character by any fraud on his client ?
This can only be affirmed on assuming that he took the share under pretence as counsel and by virtueof his relation as such, and afterwards fraudulently denied that relation. In looking at a case of this kind in which there is an alleged fraud, inducements may be taken into account to explain the conduct of parties if facts are not clear. The proof discloses that there was not any great inducement to invest in this broken-down enterprise at the time it was Sold out. Whether money would eventually be made out of it was far from certain, and depended on many contingencies. One company had failed to raise the means to build the road. There was no certainty that another would be more fortunate. The times were discouraging to all such enterprises ; money was scarce and war imminent. A new charter was to be obtained, and
Mackey testifies that after the sale was over, and on the same day, Price, the purchaser, called Maynard’s attention to the payment of what he supposed would be his share of the $5,000, he, Price, had paid on the bid, proceeding on an understanding he had that the former would take a share in it. To this Maynard replied that he could not take a share without Brady’s assent; and further said, with some feeling, as the witness thought, “Mr. Brady is my client, and I will not allow him or any other client to place me in a false position, or say that any advantage has been taken of him and he referred Price to him. After some further conversation between these parties, in the presence of Brady, Maynard, as the witness recollects, said : “Mr. Price, I leave this whole matter with Mr. Brady ; if he concludes to take the share, you may draw on me for the money.” In answer to the bill the defendant says, under oath, his language was, “if he (Brady) concludes not to take it draw on me for money.” This is what is to be disproved by the plaintiff on this point. It will be perceived by this testimony that Mackey makes Maynard’s refusal to take the stock for any other than Brady, positive and final, and that Price’s only authority to draw for the money was to be in the event of Brady taking the share, and not him. It this represents the true state of the case, it presents a case of a promise to pay, and not necessarily a case coming within the duty of an attorney, and must have resulted from some agreement not proved, to apply the proceeds of the sale to the purchase of the share. That is rendered unreasonable as a conclusion, because Maynard had no money at that time belonging to Brady, and might not have any for months to come, as turned out to be the case. But after this
Price’s testimony differs from this materially. After stating that he applied to Maynard to arrange for the share he supposed he was to take in the purchase, and he repeated in substance as stated by Mackey. Price says : “I urged upon him that he was one of the parties we had counted on’ to take the property, and if he declined we should have to make other arrangements.” Maynard then referred him to Brady. That he communicated to him what Maynard said about taking a share. In reply, Brady claimed a larger share, and witness told him he could not have it ; that there was one share only between him and Maynard. After some further conversation between them, and as Maynard was about starting to the cars for home, he said to witness, according to his best recollection, Brady being present, “Brady will tell you what to do about the share. If he concludes to take it, or if we conclude to take it,” witness cannot say which, “he (Brady) will let you know, and you may draw on me for the money.” He further states that Mackey and Maynard were in a hurry and immediately started for the depot. The next morning the witness says he called on Brady, that he told him he had “concluded to take the share as he could not get any more, and that I should draw upon Maynard for the money. Nothing was said about whose name the share should be taken in, and I, of course, put it down to Judge Maynard’s name and drew upon him, and the draft was paid.” It is apparent from this that unless Mackey’s account of it be accurate, Maynard paid without knowing anything about Brady concluding to take the stock. According to Price’s testimony, he might have paid it under the well grounded belief that he was taking it for himself, and according to both, here was an open, plain declaration and notice to Brady to determine for himself as to whether he would take the stock or not. How can fraud be inferred from this ?
All this testimony of Mackey, Price and the letter, goes no further than to show at the utmost, that Maynard said he would pay for the stock if Braly took it. If he did not take it, he would take it himself. This was declared openly and directly to Brady. We may not surmise that something else was said of which we have no proof. If we did, who shall say how much beyond or below the mark we might fall, and how is it to be determined that it is neither, but that we have just hit the mark ?
The object of the testimony was to support the bill in the allegation that the defendant, in his character of counsel, obtained
Not being shown to have been an original purchaser, Maymard’s legitimate concern pursuant to his engagement to collect the money for Brady^ was to look after that. It had gone into one set of hands and the property into another. Which was he to follow? The money, of course. His client had a right in that, and none in the other. He could not under the trustee’s sale, claim to be; the owner of the property and money both. Now, if with the assent and at the instance of his client, he recovered the money and paid it over to him, or, if that w'as intended to be the course to be pursued at and after the sale, and that it w’as, may be inferred from its having been pursued, as counsel it was not Maynard’s duty to purchase any interest in the property for him. He might become his agent for that purpose, but that is not alleged. He might also, as counsel, have undertaken to apply' the money he was collecting to that purpose, but that is not proved. It is disproved by all the testimony ; that shows that the money was collected by' Maynard and jaid over to Brady, or to his order, and none of it applied or retained for any such purpose. The proof does not show that the property should have brought more than it did, nor that a single bidder was deterred from ©r induced not to bid, by the efforts of the defendant. As already seen, it was not a time in which such a sale would command active competition. In November, previously, parties had agreed to go to the extent of $30,000 for the road and franchises. On the 29th of
In order to hold the defendant answerable under the bill, the plaintiff was bound to show that he fraudulently and without plaintiff’s knowledge, was secretly a purchaser of the property with others, after depressing its value, thus defrauding him of what he should have otherwise realized from it on his claim. This he has not done. On the contrary, if $25,000 was a fair bid for the property, as we may suppose it was in January, when $30,000 was considered the full value in November, every dollar bid less than the $25,000 was to be seventy-five per cent, gain to the plaintiff by arrangements of his counsel, agreed to and received by him. I see not how, therefore, he could allege fraud in this against the defendant. If there was, he was a participant. But it has not been shown that he was a purchaser at all when the property was struck down, nor does his claim to the share rest on that, but on what took place after the sale. That was not the result of any secret arrangement. It we may believe the plaintiff’s witnesses, whatever advantage the defendant might have been able to secure under the purchase, he openly ottered to the plaintiff. If the value of the property had been depressed by efforts of the defendant, and a share would cost less for that reason, the advantage was offered to the plaintiff. He failed to decide to take it, and so far as we can learn from the testimony, Maynard was never notified by any one that he had elected to take the share. Price does not say he informed Maynard, and certainly his letter written at a time when it is alleged he did decide, gave no information to the defendant of any election he had made. Without pursuing this line of remark further; in conclusion, on this aspect of the case, we are unable to see any ground upon which to hold the defendant answerable in the relation of counsel., or that the relation
I have thus far treated the case without reference to the subsequent acts and declarations of the parties in regard to the matter principally in contest, and here, it seems to me, that those of the plaintiff’s intestate are irreconcilable with the present claim. As soon as was proper after the sale, he presented his bonds to the master, and claimed his distributive share of the proceeds. After the adjustment of his share, and its receipt by counsel, the defendant, he commenced drawing it out of his hands, and continued until all was drawn, without referring to any claim upon the share standing in the defendant’s name. This conduct accords with no theory excepting that of the appellee, viz., that he well knew he had no claim to anything but the money under the sale. So his acts in opposing the passage of the bill to incorporate the new company, and the declaration in his letter of the 8th April, 1861, in which he threatens, if he fails in obtaining a contract for building the road under the new company, to “open the batteries and throw shell as well as balland his subsequent declaration that he hoped the new company would lose every cent they had put into it, excepting the defendant, whom he “did not want to see lose,” and many other expressions of similar import, all corroborate and substantiate the defence. It is contrary to all experience-that theowner of property-should seek its destruction or injury, when the result would in no way benefit him ; and in a doubtful case it is always powerful evidence to raise an impression that the alleged ownership does not exist.
It is said, that on the other side, these acts and declarations are persuasive the other way, and that like algebraic equations they balance each other, and may be stricken out. I have examined them and think the conclusion not to be adopted. One witness asks defendant if Brady got money from the company, and he says, defendant replied “stock.” If the defendant did say that, the fact was otherwise. It is incontestable that he got money from the company he had sued, and did not get. any stock from
While some of us, in favor of reversing the decree made in this case are entirely satisfied with these views and their sufficiency to require that result, the majority of the Court are clear that even if there was an arrangement about the share to be purchased in tha.name of. the.,counsel for the .defendant, it must have been with an understanding that the money to be collected was to go in payment of it. We cannot subscribe to the doctrine that counsel must buy and pay for property for the client as a result of the relation. We, therefore, see no equity in the plaintiff in the absence of payment, or the pledge of the means of payment. No title accrued to the intestate by reason of the application of any of his money to the purchase. This is certain. He drew it all out long before he made the present claim. If it were intended so to be applied, it was not, and the whole scheme on that basis must be regarded as having been abandoned. “Acts speak louder than words,” is a proverb, and such acts as these go far to show that not only had the plaintiff no good claim, but was willing to
I have treated this ease on the grounds on which it was placed by the plaintiff’s counsel, without regard to any alleged interest in Willard and Herdic. I see nothing to have required them to have been made parties, nor were they incompetent as witnesses. The bill sought no decree against them. They never made any claim to the three hundred and thirty-three shares of stock yet in the defendant’s name, and which the bill prays that defendant might be required to transfer to the plaintiff, nor were they required to account for profits.
As to the prayer for an account, by the plaintiff, for money collected by the defendant from the Tyrone and Lock Haven Railroad Company, and for the amount of Price’s drafts in his favor, we will say but little. It is clear, beyond all controversy, from Brady’s own receipts, vouchers, and ackowledgments, that all had been accounted for and paid, and nothing whatever remained in the defendant’s hands from that source, before he swore to and filed his bill. Further notice is unnecessary.
Notwithstanding the length of this opinion, there are many things which were referred to in argument to which we have given no special notice, but which have been duly considered, and do not effect the general result. A majority of us thinking that the testimony in the case did not sustain the plaintiff’s right in the decree below, it is accordingly reversed at the cost of the plaintiff, and the bill is dismissed.
Woodward, C. J. concurred with the foregoing ; but in addition said that: The pleadings and evidence demonstrate beyond all doubt, that Brady, deeply insolvent, intended either not to- have any beneficial interest in the stock in question, or else to cloak it from his creditors. His shuffling and equivocal conduct will bear no other construction. And his assignment of this very equity suit, exhibits the same purpose to place the fruits of the speculation beyond the reach of his creditors. That a Court of Chancery will, not interfere to relieve a fraudulent debtor from the conse
Note. — As to transactions between attorney and client, see Evans vs. Ellis, 5 Denio, 640; Brock vs. Barnes, 40 Barb. 521; Howell vs. Ransom, 11 Paige, 538; Greenfield’s Estate, 2 Harris, 489; Post vs. Mason, 91 N. Y. 539; Yeamans vs. James, 27 Kansas, 195; Stout vs. Smith, 98 N. Y. 25; Alwood vs. Mansfield, 59 Ill. 496; Kisling vs. Shaw, 33 Cal. 425; Gibbons vs. Hoag, 95 Ill. 45; Ryan vs. Ashton, 42 Ia. 365; Byers vs. Surget, 19 Howard, 303; Whipple vs. Barton, 63 N. H. 613; Shipman vs. Furniss, 69 Ala. 555; Huguenin vs. Basely, 2 W. & T. Leading Cases in Equity, 1156 and note; Dunn vs. Dunn, 7 Atlantic Reporter, 842 and note; Elliott vs. Taylor, 6 Atlantic Rep. 917.