Duff v. Hopkins

• Decision Date: 07 November 1887
• Citation: 33 F. 599
• Parties: DUFF v. HOPKINS.
• Court: U.S. District Court — Western District of Pennsylvania

33 F. 599

DUFF v. HOPKINS.

United States District Court, W.D. Pennsylvania.

November 7, 1887

Levi Bird Duff, for complainant.

John H Orvis and Charles H. McKee, for defendant.

ACHESON J.

This is a suit in equity, brought by Levi Bird Duff, assignee in bankruptcy of Carrier & Baum, against Albert C. Hopkins. The case is complicated, and, for the proper understanding of it a somewhat lengthy recital of facts is necessary.

John Carrier and Andrew F. Baum were adjudicated bankrupts by the district court of the United States for the Western district of Pennsylvania in June, 1874, and, in the following September, assignees of their estates were appointed. Each of the bankrupts, at the commencement of the proceedings in bankruptcy, was the owner of the undivided one-third of four tracts of land, viz: Warrant No. 13, situated partly in Jefferson county and partly in Clearfield county, and Warrant Nos. 1988, 2009, and 3592, situated in the latter county, all in said district; but the titles to this real estate passed to the assignees incumbered by several judgments, which the First National Bank of Wellsville, Ohio, had obtained in the United States circuit court for said district against the bankrupts, respectively, and other judgments in the same court against the bankrupts, which were subsequently assigned to the bank. After the adjudication, under the leave of the bankrupt court, writs of scire facias to revive all said judgments were issued, with notice to Richard Arthurs, the then sole assignee of the bankrupts, and judgments of revival were entered in the circuit court in the years 1878 and 1879. With like leave executions against John Carrier were then issued out of the circuit court, and the marshal levied upon and sold to James W. Reilly, the president of the bank, the Carrier interest, or undivided one-third, in said four tracts of land, and by his deed, dated August 25, and acknowledged in open court August 26, 1879, the marshal conveyed the same to said Reilly, who bought in trust for the bank. The bank also acquired tax titles to said lands after the adjudication in bankruptcy. The office of assignee having become vacant on April 12, 1880, by the resignation of Richard Arthurs, Levi Bird Duff, on that day, was appointed the assignee in bankruptcy. On January 5, 1882, the assignee last named filed a bill in equity in the circuit court of the United States for said district, to No. 11 May term, 1882, against the bank and other defendants, charging that some of the aforesaid judgments were without consideration, and all of them were fraudulently entered originally; that Arthurs, the assignee as the time the judgments were revived, was ignorant of their collusive character, and of the defenses thereto; and praying that said judgments and the revivals thereof, and executions thereon, and the title acquired by the marshal's sale and also said tax titles, be declared null and void. The bank filed an answer in denial of the material allegations of the bill. Pending the taking of testimony in that suit, on November 28, 1883, the assignee in bankruptcy transmitted to the bank an unsigned paper containing terms of settlement, of which the following is a copy:

'Liquidate judgments of Wellsville Bank v. Baum, and against Carrier, at $45,000 by amicable sci. fa. to revive, with a stay of 1/2 for 6 months and 1/2 for one year. This to be in full of all claims of said bank against Carrier & Baum, as a firm, and against John Carrier and A. F. Baum, individually, and upon payment of these judgments the bank to surrender all claims which they hold against said parties as a firm or individually, whether by transfer by Smith & McGreggor, or otherwise, and for taxes or charges paid on their lands. The bank also to transfer to the assignee of Carrier & Baum the judgments it holds against Robert Osborn on the same paper they have judgment against Baum. The assignment to be made on the payment of the Baum judgments to the bank by the assignee. The bank also to convey to the assignee the Carrier title acquired by sale of U.S. marshal. Also the tax titles it holds on Carrier & Baum lands in Clearfield county. Also all interest that may be held by McLean, or those claiming under him, (except A. F. Baum and wife,) in the Carrier & Baum lands, (excepting the 1/3 of 2009.) Also to transfer its interest in Osborn's land, acquired by deed from U.S. marshal, viz., McGhea & McGary lands, Osborn tract, Garrison tract, and Mason tract, purchased in common with the Pittsburgh Savings Bank. The bank also to discontinue its suits against the assignee in Clearfield county, the assignee agreeing that, in the ejectment case all costs, including the receiver's expenses, shall be paid out of the fund in the receiver's hands, and that upon the division of the fund thereafter the Carrier & Baum 2/3 shall belong to the assignee, and he shall take thereout sufficient to pay the costs in the two partition cases brought by the bank, (amount not known, but small, certainly not exceeding $100,) and he shall also take out of said two-thirds belonging to Carrier & Baum a sufficient sum to pay the purchase money yet due on tract No. 13, viz., $3,511.35, and the remainder of said Carrier & Baum share shall be paid to the Wellsville Bank and be a credit on their debt of $45,000, they to have the option to credit it on any one of their judgments. The assignee to discontinue, or have dismissed at his costs, the bill against said bank, and others, now pending in the U.S. court. This settlement to be submitted to and approved by the district court of the United States, Western district. The bank to give the assignee notice on Friday evening, November 30th, of their acceptance or refusal of this settlement.'

The minute-book of the bank, under date of November 30, 1883, shows a meeting of the board of directors, at which eight members were present, and contains the following entry:

'W. M. Hamilton submitted a statement furnished by Col. Duff, giving an outline of the basis of settlement of the claims against Carrier & Baum, etc., (see statement on file,) to which all the members present gave their hearty assent.'

The parol testimony shows that the 'statement' referred to in the said minute was the above-quoted paper, or a copy thereof. On the date last mentioned Mr. Reilly, the president of the bank, sent the following telegram to the bank's counsel at Pittsburgh:

'WELLSVILLE, OHIO, November 30, 1883.

'To Brown & Lambie, Attys., Fifth Ave., Pitts., Pa.: Our board have agreed to accept the proposition of L. B. Duff, assignee of Carrier & Baum.

'J. W. REILLY, Prest.'

The contents of this telegram were communicated to the assignee by Brown & Lambie the same day, or soon thereafter.

The bank on February 27, 1882, had brought an action of ejectment in the court of common pleas of Clearfield county for the tract No. 2,009 against the Sandy Lick Gas-Coal & Coke Company (which was engaged in mining coal therefrom) and others; and in that suit a receiver had been appointed to collect the royalties payable on the mining operations. On December 6, 1883, under an order of that court, entered pursuant to an arrangement between the assignee in bankruptcy and the attorney of record of the bank acting by its instructions, the sum of $3,686.07 (the one-third or Carrier's share) of the net fund in the receiver's hands was paid to the bank, and the like sum of $3,686.07 was paid to L. B. Duff, as assignee of Baum. Of this latter sum the assignee paid $3,511.35 in discharge of the balance of purchase money due on the tract No. 13, and the residue, viz., $174.72, he paid to the bank,-- making the whole amount thus received by the bank $3,860.79. On March 31, 1884, the assignee in bankruptcy and Brown & Lambie, the attorneys at law of the bank, signed a written agreement, of which the following is a copy:

'For the purpose of settling all controversies between the First National Bank of Wellsville, Ohio, and the estate of Carrier & Baum, bankrupts, it is hereby agreed by and between said bank and Levi Bird Duff, assignee of said estate, as follows, to-wit:

'That the judgments of said bank in the circuit court of the United States, Western district of Penna., against John Carrier and A. F. Baum be revived and liquidated at the sum of $45,000, with interest from November 30, 1883, less a credit of three thousand eight hundred and sixty and 79-100 dollars, ($3,860.79,) as of date of December 6, 1883, with stay of execution on one-half thereof until the first day of October, A.D. 1884, and on the balance until April 1, A.D. 1885. This to be full payment of all the claims of said bank against John Carrier and A. F. Baum, both as a firm and as individuals, whether held by said bank in its own right or by assignment from Smith & McGreggor, or otherwise howsoever, and for taxes or charges paid on the lands of said Carrier & Baum, except the costs upon said judgments, which shall be paid by the estate of said bankrupts. Upon the payment by the estate of said bankrupts to the First National Bank of Wellsville of the said judgments in the manner and at the times specified, the said banks shall satisfy said judgments, and release and discharge said estate from all claims and demands whatsoever, and shall also transfer and assign to said estate, by sufficient deed or deeds, all its interest in the lands in Clearfield county formerly belonging to John Carrier, and acquired by sale upon judgments against said Carrier in the circuit court of the United States, Western district, Pa., as per deed of

John Hall, U.S. marshal; also all the tax titles it holds for lands of John Carrier and A. F. Baum situated in Clearfield county, Pa.; also its interest in lands of Robert Osborn,...