United States v. Groome, 13 App. D.C. 460

United States v. Groome

13 App. D.C. 460 | D.C. Cir. | 1898

Mr. Justice Shepard

delivered the opinion of the Court:

1. We are of opinion that the allegations of the bill, in respect of the promise of Rosborough to execute the lien upon his half-interest, and the consent of Coburn thereto, as one of the conditions of his purchase of the remaining half-interest from Groome, have been sufficiently established by the evidence.

Groome, his father, and his attorney, all testify positively to these facts, and their statements are consistent with all the surrounding circumstances..

Geo. H. Walker, Groome’s attorney, drew all the instruments relating to the transaction, including the contract of partnership between Rosborough and Coburn. He brought that paper to them, saw them execute it, and signed his own name as subscribing witness. He testified that this paper, when executed, contained a recital'of Ro^borough’s ownership of one-half of the stock, with the following words added: “Subject, however, to a certain deed of trust executed to secure the payment of the purchase-money to John C. Groome aforesaid.”

These words refer to the instrument that Rosborough had agreed to execute and appear to have been erased from the instrument before it was recorded; but the witness said they were there when the instrument was approved and executed by the parties. This was not denied or explained by either Coburn or Rosborough, both of whom testified in the case. These latter differed with each other, besides, upon a material fact about which neither could have been mistaken. In *469addition to the lien claimed in the bill there was an allegation of fraud in the purchase by Coburn of Rosborough’s interest, which they denied. Coburn says that he paid Rosborough $1,600—$300 in cash, $200 in notes, and the remainder in the assumption by him of Rosborough’s liability for the partnership debts. Rosborough says that he received two notes for $100 each, payable respectively in twelve and eighteen months, but no cash.

It follows, from our view'of the testimony, that the complainant Groome is entitled to the enforcement of his equitable lien against the one-half interest of Rosborough in the stock, for the purchase-money thereof, as against both defendants, Rosborough and Coburn. That which they agreed to do in order to obtain Groome’s interest will be regarded as if it had actually been done. Woarms v. Hammond, 5 App. D. C. 338; Hume v. Riggs, 12 App. D. C. 355, 364.

2. It is contended, on behalf of the United States, that this deed of trust, if it had been regularly executed and delivered by Rosborough with the knowledge and consent of Coburn, would nevertheless be void as to their right under the execution, because it necessarily contemplated that the mortgagor should remain in possession of the stock of goods, and dispose of the same in the ordinary course of business. Whether such an instrument, containing the clauses in respect of the application of the proceeds of sale to the purchase of new stock, and to the secured debt, that are found in the original agreement between Rosborough and Groome, or without any such stipulations, would, as matter of law, be held void as to the creditors of Rosborough, need not be decided. The point does not properly arise in the case. So far as the record discloses, there are no creditors of Rosborough or of the partnership of Coburn & Rosborough.

The United States have no demand against either. Their claim is confessedly against Coburn individually, and has no connection whatever with the business of the partnership. It does not appear when the indebtedness of Coburn began, and the judgment under which the stock was seized and sub*470sequent-ly sold was obtained whilst this suit was pending. Whatever, then, might have been the effect of such an instrument upon the rights of Rosborough’s creditors, it was certainly valid as against Coburn. Etheridge v. Sperry, 139 U. S. 266, 276, 277.

The United States, claiming under Coburn, had no better right. Chargeable, moreover, through the pending suit, with notice of the equitable lien claimed by Groome, when their judgment was obtained and the stock seized thereunder, they could under no circumstance have an equity superior or equal to his. Colbert v. Baetjer, 4 App. D. C. 416, 425; Hume v. Riggs, 12 App. D. C. 355, 367; Lazarus v. Andrade, L. R. 5 C. P. Div. 318.

3. The decree awards to the complainant one-half of the proceeds of the sale of the stock that have been deposited in the registry of the court, by stipulation, less the sum of $82.08 recited as one-half of the marshal’s cost of care and sale; and error has been assigned thereon.

It is contended that the court should have referred the cause to the auditor with direction to ascertain the quality and value of the articles found at the time of the seizure to have been in existence, and in the possession of the parties at the date of the contract for the lien; and also the charges properly taxable against the fund on account of the marshal’s reasonable costs aforesaid.

(1) The reference of a cause to the auditor for the taking of an account is a matter of discretion with the court. Taylor v. Insurance Co., 1 App. D. C. 209, 217; Whitaker v. Middle States, etc., Co., 7 App. D. C. 203, 211. If, on the ■hearing, the court can readily ascertain from the evidence the net amount of a fund and the rule of its distribution, there would be no occasion for the further delay and expense that would necessarily attend a reference, and it ought not to be directed.

(2) The new lien contemplated upon the substitution of of Coburn for Groome, as partner with Rosborough, was a substantial renewal of that originally given by the latter *471and which has been recited above. It did not enumerate or recite in a schedule the items comprising the stock and fixtures on hand at the time and actually delivered; nor did it, on the other hand, in express terms provide that the lien should attach to the specific articles that might afterwards be added thereto. It seems clear enough, however, that the lien was intended to be a continuing one upon the partnership or undivided half-interest of Rosborough in the stock, fixtures and good will of the business, as long as the business should be carried on and his debt to Groome should remain unpaid.

The items of the stock were necessarily subject to change by sale and substitution in the ordinary course of trade; but the interest of Rosborough in the" business, and in the stock on hand, whilst that business continued, and which is the thing that was charged, remained a fixed and definite quantity. That interest might increase or diminish in actual value through the vicissitudes of the business; but the thing charged with the lien remained unimpaired. It was an undivided one-half of the specific stock, or its price if converted into money, of which Rosborough was the owner, at all times during the continuance of the partnership, or w7ould be entitled to upon its dissolution and winding up-. This, it is evident, was the real intent and understanding of the parties, and it is that we must look for and follow when ascertained. Tailby v. Official Receivers, L. R. 13 App. Cas. 523, 547.

The only uncertainty that existed in, or attended upon, the continuation of the lien was in its probable value; there was none in its subject-matter.

In the ascertainment and enforcement of this character of liens, it has been well said : “Vagueness comes to nothing if the property is definite at the time when the court is asked to enforce the contract.” Coombe v. Carter, L. R. 36 Ch. Div. 348, 393; Tailby v. Official Receivers, L. R. 13 App. Cas. 547.

*472The stock and fixtures were in the same house, and in use in the same manner, when the bill was filed and when the marshal seized them under the execution in favor of the United States, as the property of Coburn. They were sold by agreement of all concerned, and the purchase-money substituted in their stead for the purpose of the court’s decree. Nothing remains but the fqnd so realized. There are no claims against it but that of Eosborough, to whom complainant succeeds, and that of Coburn, under whom the United States claims. An equal division of the fund, therefore, will satisfy the respective interests of the two partners as they were fixed by their original purchases and their contract of partnership. All that remained then for the court to do was to divide the fund equally between the two claimants.

(3) It is true, as claimed, that the .record before us does not show any evidence in support of so much of the decree as directs the specific sum of $82.08 to be deducted from each share, as one-half of the marshal’s charges, though it was, no doubt, ascertained from the return or report of the marshal in making the deposit of the proceeds of the sale in the registry of the court, in accordance with 'the stipulation to that effect. It is conceded by the appellants that the marshal’s costs, whatever they may justly be, constitute a proper charge upon the fund to be distributed; indeed, it is in their interest that the decree so orders. This being so, the omission in the record, if it constitute error; would not justify a reversal of the decree. If there was a mistake in the recital of the amount of the costs, it ought to have been called to the attention of the court by a motion to correct the error before taking an appeal; and that may be done hereafter by a motion to amend and retax those costs.

The decree, subject to the foregoing leave for its amendment, if need be, will be affirmed. It is so ordered.

Affirmed.