Ontario Bank v. Hurst
Decision Date | 13 July 1900 |
Docket Number | 769. |
Citation | 103 F. 231 |
Parties | ONTARIO BANK OF TORONTO, CANADA, v. HURST et al. |
Court | U.S. Court of Appeals — Sixth Circuit |
James T. Hurst, a resident of Wayne county, Mich., had conducted a large lumber business for some years preceding the transaction hereinafter recited, extending over the states of Minnesota and Michigan and the dominion of Canada. Being largely indebted, and security having been demanded of him on the 22d day of July, 1896, Mr. Hurst, joined by his wife executed and delivered to Harrison Geer, Joseph Turner, and Hezekiah M. Gillett, trustees, a certain instrument, to wit:
'This indenture, made this 22d day of July, A.D. 1896, by and between James T. Hurst and Mary A. Hurst, his wife, of Wyandotte, Wayne county, Mich., parties of the first part and Harrison Geer, of Detroit, Joseph Turner and Hezekiah M Gillett, both of Bay City, Mich., together trustees in trust for the uses and purposes hereinafter stated, parties of the second part, witnesseth, that whereas, the said James T. Hurst is obligated and indebted to the following persons, firms, and corporations, either directly or contingently by way of indorsements, as maker or otherwise, in the amounts set opposite their names, respectively, viz.:
Nelson Holland, of Buffalo, N. Y............................. $118,000
Joseph Turner and Spencer O. Fisher, co-partners as Turner
& Fisher ................................................... 264,000
S. O. Fisher .................................................. 50,000
Saginaw Bay Towing Association, a co-partnership .............. 26,000
Benjamin Boutell .............................................. 22,500
Hezekiah M. Gillett, of Bay City ............................... 3,000
Henry M. Campbell, of Detroit ................................. 13,000
A. L. Nowlin .................................................. 10,000
Delta Lumber Company ........................................... 7,500
-- And whereas, the said Hurst desires to pay the said creditors from the property hereinafter described, as far as practicable for as far as necessary, in the following order, viz.: First, Nelson Holland's claim shall be paid out of the first proceeds derived from said assets, together with interest at 6 per cent. per annum. Second. All the remainder of said creditors shall be paid from the proceeds thereafter derived from said assets pro rata until all of said claims are fully paid, including interest thereon at 6 per cent. per annum: Now, therefore, in consideration of the premises and one dollar to them in hand paid, the said parties of the first part have conveyed, granted, bargained, sold, remised, released, aliened, and confirmed, and by these presents do convey, bargain, sell remise, release, alien, and confirm, unto the said parties of the second part, to them and their successors and assigns, all the property hereinafter named, in trust, nevertheless, for the following uses and purposes, viz.: (1) To assume possession thereof, to manage and rent, and out of the rents and proceeds of sale to pay taxes, insurance liens, and incumbrances, if any, and their reasonable expenses. (2) To sell and convey said property, or any part or interest therein, and to make, execute, and deliver deeds of conveyance thereof, at such prices and upon such terms and conditions as they shall deem best. (3) From the proceeds of rents and sales of said property, after the payment of accrued taxes, insurance, and expenses, to first pay the said claim of Nelson Holland, with interest, and from the remainder of such proceeds, as the same shall come to their hands, to pay the balance of said claims pro rata. (4) The surplus, if any, shall be paid to said James T. Hurst, or to such person or persons as he shall direct. The properties conveyed by this instrument are described as follows: All those certain pieces or parcels of land, with the appurtenances thereon, situated, lying, and being in Wayne county, state of Michigan, to wit. ' (Description of property follows, duly signed and acknowledged.)
At the same time, and in consideration of the foregoing conveyance, said Holland, whose debts were first secured, by his attorney, executed a writing for the benefit of said Hurst, which is as follows:
Nelson Holland .............................................. $118,000
Joseph Turner and Spencer O. Fisher, co-partners as Turner
& Fisher ................................................... 264,000
S. O. Fisher .................................................. 50,000
Saginaw Bay Towing Association, a co-partnership .............. 26,000
Benjamin Boutell .............................................. 22,500
Hezekiah M. Gillett, of Bay City ............................... 3,000
Henry M. Campbell, of Detroit ................................. 13,000
A. L. Nowlin .................................................. 10,000
Delta Lumber Company ........................................... 7,500
-- The condition of the trust being that we shall assume possession of the property, manage, rent, sell, and convey the same, using the income from the property and the proceeds of sales for the purposes of paying-- First, taxes, insurance, expenses of the trust; and, secondly, to pay the claim of Nelson Holland, with interest; and out of the remainder, if any, to pay the balance of the claims above enumerated,-- we hereby accept said trust, and jointly and severally undertake to faithfully execute the same in accordance with the letter and spirit of said conveyance to us.
'Harrison Geer. 'Hezekiah M. Gillett.'
Complainant brought an attachment suit in the circuit court of Wayne county, Mich., on the 28th day of July, 1896, on a note given by Hurst, and obtained a judgment on March 9, 1897, against said Hurst for $79,687.38 and costs, upon which execution was issued, and levied upon the attached property, being the property conveyed by the deed of trust above mentioned. Complainant filed its bill in this case for the purpose of setting aside said conveyance, and asks for a decree declaring the same null and void.
George W. Radford and Henry M. Duffield, for appellant.
H. M. Campbell and Harrison Geer, for appellees.
Before LURTON and DAY, Circuit Judges, and CLARK, District Judge.
DAY Circuit Judge, after stating the case, .
The three instruments above recited must be construed together. They are parts of one transaction, and their legal effect is to be gathered upon consideration of all of them, their objects and purposes. Lumber Co. v. Ott, 142 U.S 622, 12 Sup.Ct. 318, 35 L.Ed. 1136. An examination of these instruments and a consideration of the circumstances under which they were executed satisfies us that the purpose and intent of the parties was to secure Holland and the other creditors named for the amount of the indebtedness. Holland had a large claim, which was placed in the hands of his attorney for the purpose of obtaining security. This Hurst finally consented to give in the form in which it was reduced to writing in the documents described. The instruments themselves show this purpose. It is said in the conveyance to the trustees that Hurst desires to pay the said creditors from the property thereinafter described, 'as far as practicable, or as far as necessary. ' When sold, the debts are to be paid from the proceeds of the property. together with interest, in the order named. There is no statement in the...
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