Garinger v. Palmer

• Decision Date: 04 January 1904
• Docket Number: 1,206.
• Citation: 126 F. 906
• Parties: GARINGER et ux. v. PALMER.
• Court: U.S. Court of Appeals — Sixth Circuit

126 F. 906

GARINGER et ux. v. PALMER.

No. 1,206.

United States Court of Appeals, Sixth Circuit.

January 4, 1904

J. D Post and J. M. Butler, for appellants.

Before LURTON, SEVERENS, and RICHARDS, Circuit Judges.

RICHARDS Circuit Judge.

This was an action brought by Charles A. Palmer against Stephen Garinger and Rebecca A., his wife, to set aside certain conveyances on the ground of fraud, and subject an alleged interest of Stephen in 12 separate tracts of land in Fayette county, Ohio, to the payment of a judgment recovered by the Merchants' & Farmers' Bank of Washington, C. H Ohio, against Stephen Garinger and others, on November 25 1878, for $3,370.32 permitted by the bank to become dormant in 1892, purchased from it by Charles A. Palmer in 1899, and by him revived in 1901 for $9,375.36.

It was claimed in the petition that Stephen Garinger has a life estate in the first and second tracts, containing 223 acres under the provision of the will of his father, David, who died in 1869, which devised the lands 'to the heirs of the body of my son Stephen Garinger, * * * Stephen Garinger to pay the tax and have control and management during his natural life of his heirs' land and his heirs not to have possession till after his death'; that the third tract, containing 46 acres, belonged to him prior to January 9, 1882, and on that day was sold on execution and bought by his wife, Rebecca A. Garinger, with money furnished by him, for the purpose of placing it beyond the reach of his creditors; and that the remaining nine tracts were purchased with money earned by him principally through farming the first three tracts, and additional tracts as successively acquired, and was placed in the name of Rebecca for the same fraudulent purpose of keeping them beyond the reach of his creditors. The prayer was that the interest of Stephen in the first and second tracts be determined, that a trust be declared in his wife for him in the remaining tracts, and that the lands be sold and applied to the payment of the judgment.

In separate answers the defendants denied that Stephen Garinger took a life estate under his father's will in the first and second tracts, and alleged that whatever interest he took was terminated on January 21, 1882, when, having been sold for taxes, they were conveyed to Albert Garinger, as guardian of Stephen's children. As to the remaining tracts, it was averred earned by her. By amendments to the answers, a plea of estoppel in pais was set up; it being averred that from 1878 to 1889 Charles A. Palmer, the plaintiff below, was the attorney of Stephen and Rebecca A. Garinger, and no business step of importance was taken, except in accordance with his advice; that it was in accordance with Palmer's advice that the first and second tracts, when sold for taxes, were bought in by Albert Garinger, as guardian for the defendants' children, and leased to Rebecca, who has ever since farmed the same; that Palmer was one of the attorneys for Stephen in the Dahl case, and at that time advised Stephen that he had no interest in the first and second tracts devised by his father; that Palmer was attorney for Rebecca in the Dahl case, and it was upon his advice that she purchased the third tract, consisting of 46 acres, at sheriff's sale, and has since farmed the same, and that from that time until 1889 Palmer was the attorney of Stephen and Rebecca A. Garinger in a number of suits, and advised them with respect to various matters growing out of Rebecca's ownership, control and management of the first, second, and third tracts; that, acting as their attorney, Palmer became thoroughly conversant with their affairs, and, upon the strength of this knowledge, purchased from the Merchants' & Farmers' Bank the dormant judgment sued on in this case, paying for it less than $25.

Before these amendments were filed, the case, despite the objections of the defendants, was referred to a master, who seemingly sat as a court, admitted or excluded testimony as he saw fit, heard the arguments, and reported his findings of fact and conclusions of law upon all the issues to the court. Except as to the first and second tracts, the findings were in favor of the contentions of the plaintiff below. These findings were approved and confirmed by the court, judgment rendered, and the case is here on appeal.

The appellants, Stephen and Rebecca A. Garinger, were married March 23, 1865. Stephen's father, David, died in September, 1869, and from that time until about 1878 or 1879 Stephen, with his family, lived on the first and second tracts, devised to the heirs of his body, paying the taxes and farming the land. About 1871 he had become interested in the Wellston Coal & Iron Company. As the result of this side venture, he found himself, about the year 1878 or 1879, absolutely insolvent, with outstanding judgments, principally security debts, amounting to about $45,000. Among these was the one in favor of the Merchants' & Farmers' Bank sued on in this case, and also one in favor of George Dahl, recovered February 12, 1878, for $1,585. Obviously, under these circumstances, it became a matter of serious concern to Stephen Garinger and his young family what course he should pursue with respect to the three tracts of land then held and farmed by him. He had been paying taxes on this land, and depended upon it for the support of his growing family. What should he do in the future? The first and second tracts contained 223 acres; and the third, 46 acres. The first and second were ancestral land; the third, obtained by purchase. These three tracts were permitted to become delinquent for taxes for the years 1877, 1878, and 1879, and were bought in at tax sale on January 20, 1880, by Albert Garinger, a brother of Stephen, to whom a certificate issued. Afterwards, in accordance with the advice of Stephen's attorneys, the tax certificate was assigned to Albert, who was appointed guardian for the minor heirs of Stephen; and on January 21, 1882, a tax deed for the first and second tracts was executed and delivered to him as guardian. In his capacity as guardian he then rented this land to Rebecca A. Garinger, and it has since been farmed in her name. As additional children have been born to Stephen and Rebecca, Albert Garinger has been appointed guardian for them, and from time to time has filed his accounts in the probate court. He is still guardian for those children who have not yet become of age.

Such is the situation with respect to the first and second tracts. It may be pertinent, in this connection, to say that the master finds, as matter of law, 'that the title to the first and second tracts of land described in this petition, under the will of David Garinger, deceased, is vested in the children of said Stephen Garinger, and not subject to sale in this proceeding.'

Coming to the third tract, in 1881, George Dahl filed his petition against Stephen Garinger and others, setting out that on February 12, 1878, he recovered a judgment against Stephen for $1,585; that Stephen was the owner in fee of what has been denominated the third tract, containing 46 acres, and had a life estate in the first and second tracts, containing 223 acres; that on October 30, 1878, Stephen had executed a mortgage for $1,479.83 to his mother, Cyrene Garinger, upon the first and second tracts; that at the November term, 1878, the Merchants' & Farmers' Bank had recovered a judgment against Stephen for $3,370.32 and at the November term, 1877, A. S. Ballard, Jr. had recovered judgment against Stephen and others for $8,014.57. The prayer was that Cyrene Garinger, the Merchants' & Farmers' Bank, and Ballard be required to set up their claims against the land; that the priority of liens be determined, and the land sold and applied to the payment of the judgment liens against it.

The Merchants' & Farmers' Bank was made a party to this suit, and served with summons, but filed no demurrer or answer, and made no effort to assert any lien either upon the land involved or its proceeds.

Cyrene Garinger filed an answer and cross-petition, signed by 'C. A. Palmer, Her Attorney,' in which she set up her mortgage on the first and second tracts, and Stephen Garinger filed an answer, signed by 'C. A. Palmer, Harrison, Olds & Marsh, Attorneys for Defendant,' in which he denied that he owned a life estate in the first and second tracts and averred that under the will he was simply a special trustee to control and manage the estate for the use and benefit of his children, having no individual interest in the land. A reply was filed, and on November 25, 1881, a decree rendered, which, after reciting that Ballard and the Merchants' & Farmers' Bank had failed to answer or demur, and that the answer of Stephen Garinger related only to his interest in the ancestral land, granted an order of sale of the third tract to pay the Dahl Judgment. Accordingly the third tract was sold at sheriff's sale to Rebecca A. Garinger, for about $2,900. The order confirming the sale provided that the proceeds should be applied, first, to the discharge of Albert Garinger's claim on account of taxes paid; second, in payment of the costs of the action; third, in satisfaction of the Dahl judgment; and fourth, the balance to Stephen Garinger. Leave was given C. A. Palmer to withdraw the cross-petition of Cyrene Garinger. About $1,600 was needed to pay the outstanding tax title, the costs of the action, and the Dahl judgment, and this was borrowed from Kelly Dixon on a note executed by Rebecca and Stephen Garinger. While Stephen receipted for the balance, he received, in point of fact, no money. It will be remembered that the 'merchants' & Farmers' Bank was one of the judgment creditors in this case, but no judgment creditor...