Dravo v. Fabel

• Decision Date: 25 August 1885
• Parties: DRAVO and others, Assignees, etc., v. FABEL and others.
• Court: U.S. District Court — Western District of Pennsylvania

25 F. 116

DRAVO and others, Assignees, etc., v. FABEL and others.

United States District Court, W.D. Pennsylvania.

August 25, 1885

J. H McCreery, W. S. Pier, and D. T. Watson, for complainants.

H. W Weir and Knox & Reed, for respondents.

ACHESON J.

The purpose of this suit is to set aside two deeds of conveyance from John Dippold and wife to Philip Fabel and Kate Fabel (nee Dippold, and daughter of the grantors,) his wife, one dated January 22, 1876, for a tract of about 11 acres of land, reciting a consideration of $10,000; the other, dated January 26, 1876, for a tract of 237 3/4 acres of land reciting a consideration of $18,000; all situated in Beaver county, Pennsylvania. Both deeds purport to have been acknowledged January 26, 1876, but they were not recorded until February 16, 1878. On March 1, 1878, John Dippold and his copartners in the firm of John Dippold & Sons were adjudged bankrupts, upon a petition filed February 28, 1878. The plaintiffs are the assignees in bankruptcy of John Dippold, and they attack said deeds for actual fraud; the bill charging that they were made with the intent and purpose of delaying, hindering, and defrauding the creditors of John Dippold, and in pursuance of a fraudulent conspiracy between Dippold and Philip Fabel and Kate, his wife, (who were without the means to purchase said lands,) and other persons to the plaintiffs unknown. The defendants in the suit are Philip Fabel and Kate, his wife, and John Dippold and Nannie, his wife. The answers are responsive to the bill, and deny all its allegations of fraud and conspiracy.

The plaintiffs called and examined Philip Fabel and John Dippold 'as if under cross-examination,' pursuant to the Pennsylvania practice, and they subsequently introduced evidence tending to contradict them. To this mode of procedure no objection was taken before the examiner, but at the final hearing the defendants' counsel objected to the whole of the evidence and claimed that the bill must be dismissed for want of proof to overthrow the answers. The evidence, however, was read, subject to the objections, and the questions thereby raised were reserved. These objections are-- First, that the Pennsylvania statute providing for the examination of the opposite party 'as if under cross-examination' is not applicable to a suit in equity in a court of the United States; and, second, that it was not competent to call Philip Fabel and John Dippold to testify against their wives. (1) The first objection is well taken, and sustained by a recent decision of the United States circuit court for this district, in Pennsylvania R. Co. v. Allegheny Valley R. Co., ante, 115. But it does not follow that the testimony is to be rejected altogether. Under section 858, U.S. Rev. St., the parties to a suit are admissible to testify for themselves and compellable to testify for the others. Texas v. Chiles, 21 Wall. 488. Now, to sustain an objection to the mode of conducting an examination which was not raised before the examiner would take the plaintiffs by surprise. The testimony of Fabel and Dippold, therefore, must be received, and such effect given to it as if they had been called generally by the plaintiffs, unless there is something in the second objection. (2) Whether, in view of the Pennsylvania rule which forbids husband and wife to testify against each other, either can testify against the other in a court of the United States sitting in this state, need not be determined here. Mrs. Dippold has no pecuniary interest whatever (so far as appears) in this suit, and she is an unnecessary and improper party. Then as to Mrs. Fabel, while it may be that the testimony of her husband could not be used to her prejudice, certainly he is a competent witness, as against himself, and his interest here is separable from hers. These objections, then, being overruled, we are brought to a consideration of the evidence.

In the year 1876, and for some time prior, John Dippold & Sons were engaged in steam-boating and in merchandising coal. Their business head-quarters were at Pittsburgh, but they transacted some business in the same firm name at Louisville, Kentucky. John Dippold resided in Beaver county, Pennsylvania, on the lands now in dispute. Philip Fabel is the son of Frederick Fabel, who died in July, 1878, before this suit was brought. Frederick Fabel carried on the manufactory and business of a chandler in Louisville. He was prosperous and a man of considerable means. It does not very clearly appear what estate he left at his death, but probably it was at least $100,000. Philip had been in his father's employ as book-keeper and clerk, at a yearly salary of $1,200. The relations, business and otherwise, between father and son were confidential and close. The son married Kate Dippold in March, 1874. Philip Fabel and John Dippold both testify that after this marriage, Dippold, whose business frequently called him to Louisville, borrowed from Philip Fabel, from time to time, various sums of money, many of which loans were repaid, but not all, so that in January, 1876, Dippold owed on these loans $10,000. At that time (they say) Dippold applied for a further loan of $10,000, but Philip refused unless he was secured; that, after some negotiations, it was finally agreed that Dippold should sell and convey his real estate in Beaver county, Pennsylvania, to Philip for $28,000,-- the sum it had originally cost Dippold, and, it would seem, its then fair value;-- Philip, in addition to the $10,000 already loaned, to pay Dippold $10,000 in cash and to give his notes for the other $8,000. Philip (they state) then came to Pittsburgh, and the parties met at the house of J. Sharp McDonald, at Sewickley, where the transaction was consummated; Philip paying to Dippold $10,000 in cash, and giving his four notes at four, six, eight, and twelve months, aggregating $8,000, and receiving the two deeds already mentioned. They testify that a short time afterwards Philip wrote a letter in his father's name to Dippold that he would discount the notes, and thereupon Dippold brought them to Louisville to Fabel's place of business, and Dippold was paid $7,600 for the notes. This is the substance of the testimony of Philip Fabel and John Dippold touching the main transaction. Philip further testifies that all this money he received from his father, and that it came in the first instance out of his business. He states, however, that when he took money out of the safe to loan to Dippold he made a loose temporary memorandum until his father replaced it, and no entries were made on the books. Speaking on this subject, he says:

'When I told him that I had loaned the money, he sold some stocks or something and replaced it. That was the case in every instance of these loans. I reported to my father in separate instance. I don't know how he replaced it unless he sold stocks. He would replace the money I would report to him. I was the financial son, and what I did was regarded by him as correct.'

Philip further testifies that his father told him it was his purpose to keep an account against each child of what he or she got, so that after his death one would not get more than another, but no such account had been found; and that none of the transactions between himself and John Dippold were entered on the books connected with his father's business. He also states that he took no notes, or writings evidencing the loans. He says that the money he paid Dippold at Sewickley, and which he carried there in his satchel, was in large bills, five or six $1,000 bills, and the rest in bills of $500; and that these bills he procured at Louisville, in exchange for smaller currency, through one J. William Anderson, a broker, who left Louisville and went to Europe a few months afterwards. Philip testifies that he took his deeds to Louisville, and there kept them until December, 1877, when he sent them to J. Sharp McDonald to have them recorded.

The defendants' counsel contend that as this testimony comes from witnesses called by the plaintiffs they are concluded thereby, and its truth cannot be questioned by them. But to such proposition I cannot assent. Whe...