Gottlieb v. Thatcher

• Decision Date: 21 March 1888
• Citation: 34 F. 435
• Parties: GOTTLIEB v. THATCHER.
• Court: U.S. District Court — District of Colorado

34 F. 435

GOTTLIEB v. THATCHER.

United States Circuit Court, D. Colorado.

March 21, 1888

J. W Horner and A. J. Bentley, for complainant.

H. C Dillon, for defendant.

BREWER J.

This case is now before me on final hearing. The facts are these On July 23, 1877, complainants recovered judgments in the district court of Arapahoe county for $2,171, against Samuel H. Thatcher, a brother of defendant. On November 13, 1876 Samuel H. Thatcher conveyed to defendant, by warranty deed, for an expressed consideration of $4,000, the lands in controversy. Complainants caused execution to issue on his judgment, levied upon the lands as the property of Samuel H. Thatcher, bought them in, and now seeks to have this warranty deed set aside as a cloud upon his title, and such title quieted as against all claims of defendant. He insists that that deed was fraudulent and void, because made by Samuel H. Thatcher with intent to defraud his creditors, complainant among the number.

Many questions are raised and discussed by counsel. In the view which I have taken of this case I shall have occasion to refer to but one or two, and, in order to present these, some other facts must be stated. The judgment against Samuel H. Thatcher grew out of these transactions: In November, 1875, one Zella Glenmore, the proprietress of a house of ill fame, purchased a lot of furniture from Rhoda Sevins, the proprietress of a like house. She borrowed $2,700 of complainant; gave her note with Samuel H. Thatcher's indorsement for that amount. This note was secured by a chattel mortgage on the furniture, which at the time was worth $6,000; also by trust deed on 320 acres of land in Douglas county, belonging to Thatcher. Thatcher had no interest in the transaction, and was only an accommodation indorser. The note ran one year, and drew 5 per cent. per month interest. At the time of taking this note complainant also took a note for $300, signed by Zella Glenmore alone, which note was given to him, as he says, for his services in making the trade between the two women. According to his testimony, Zella paid six months' interest, and $100 on the seventh months' interest, or $910 in all. Zella testifies that she paid 11 months' interest. It may be, however, that her testimony is not properly before the court, as when her deposition was taken, the issues were different; and under an order made by this court after the issues were put in their present shape she was not produced for cross-examination. When the year for which the note was given expired, and in November, 1876,-- perhaps on the day before the note matured,-- complainant seized the furniture under his chattel mortgage, and caused it to be sold at public auction. From this, by his own testimony, he realized $1,519.43, in December, 1876. The trust deed on the Douglas county lands he also enforced, and from that realized $253.10. Thus, according to his own testimony, he received $2,682.53 from Zella Glenmore personally, and from the mortgaged property. Nevertheless he commenced suit for the full amount of the note against Thatcher, and recovered judgment, as has been stated, for $2,171. When the case was called for trial, Thatcher's counsel was intoxicated, and the case was continued a few hours, until new counsel could be substituted,-- counsel who had no previous knowledge of the transactions,-- and under those circumstances the case was tried. At the time of commencing the suit against Thatcher, he garnished Gray and Eichaltz, and from them obtained possession of a note for $1,350 belonging to Thatcher, secured by deed of trust on 20 acres of land worth more than the amount of the note. Although this note was thus secured, it was advertised for sale without any notice of the security, and bid in by him for $80. Thereafter he had the trust deed foreclosed, and under that foreclosure obtained title to the lands now shown to be worth many thousand dollars. It is true that this advertisement and purchase of this note by him was not until after the purchase of the lands in controversy, but the fact that the note was thus secured was disclosed by the records in the case prior to its advertisement and sale. Again, on May 7, 1875, before even the borrowing of the money by Zella Glenmore, one Samuel Kaucher had obtained judgment against Thatcher in the district court of Arapahoe county, for $2,710.40. This judgment was taken on error to the supreme court of the territory, ^[1] and thence to the supreme court of the United States, and by each court affirmed,-- by the latter on December 17, 1877. On this judgment execution was issued on January 29, 1878, the land bought by defendant, and deed made to him November 15, 1878.

There is a question in the case as to whether the lien of this judgment had not been lost, but I do not care to pursue an inquiry into that question. Returning to the facts previously noticed, it may be stated that the judgment of July 23, 1877, is conclusive between complainant and Samuel H. Thatcher as to his indebtedness; but it is not conclusive upon defendant, a grantee from Samuel H. Thatcher before the judgment, either as to the amount of the debt, or as to the circumstances and character of the transaction out of which the indebtedness arose. The authorities upon this question are uniform and clear. I cite a few of them: Hafner v. Irwin, 4 Ired. 529; Collinson v. Jackson, 14 F. 309; Clark v. Anthony, 31 Ark. 549; King v. Tharp, 26 Iowa, 283; Esty v. Long, 41 N.H. 103; Bruggerman v. Hoerr, 7 Minn. 337, (Gil. 264;) Sargent v. Salmond, 27 Me. 539; Caswell v. Caswell, 28 Me. 233; Downs v. Fuller, 2 Metc. 135; Carter v. Bennett, 4 Fla. 283; Hall v. Hamlin, 2 Watts, 355; Warner v. Percy, 22 Vt. 155; Boutwell v. McClure, 30 Vt. 676; Ingalls v. Brooks, 29 Vt. 399; Freem. Judgm. Sec. 336; Bump, Fraud. Conv. 558.

In the case of Ingals v. Brooks the facts were as follows: Israel Brooks conveyed all his lands to his son, Clark Brooks, and as part consideration therefor said Clark Brooks agreed to pay all the debts of his said father. Leafy Brooks, who had become the wife of Ingals, presented a claim against the father, Israel Brooks, against which the son, Clark Brooks, maintained he had a set-off. They compromised; Clark Brooks released his set-off, and Ingals and wife threw off half the amount of their claim. Ingals then went to the father, Israel Brooks, and got him to allow judgment to go against him for the other half of the claim, of which proceeding Clark Brooks had no notice. Ingals then levied execution under this judgment on the lands held by Clark Brooks, and sold the same, and in course of time got a sheriff's deed, and began his action in ejectment. The court uses the following language:

'The judgment, being altogether inter alios, and in express violation of the understanding of Clark when he surrendered the claim against Leafy, one of the plaintiffs, and paid one-half the amount of the note in money, in agreed satisfaction of the whole, would have no effect upon the defendant Clark. He is entitled to show that the note was paid before sued, or that the judgment was for other reasons fraudulent to him. Atkinson v. Allen, 12 Vt. 619. This compromise of the note by Clark was just as effective a bar to the claim in law, and just as effective a release of his understanding to pay at the time of the conveyance, as if he had paid all the money upon it. It is true, he did undertake or promise to pay off the debts of the grantor, his father; and he has in fact paid them all, except the mortgage, which is not in question; and the judgment against Israel, the father, is either a subsequent debt founded exclusively on his promise to pay what they did not get of Clark, and which in no sense, under the circumstances, can be regarded as forming any part of the debts which Clark was to pay, or else the whole proceeding, so far as it is attempted to give it the appearance of a prior claim, is a fraud upon the compromise and settlement made with

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