Grant v. Phoenix Mut Life Ins Co

• Decision Date: 04 April 1887
• Citation: 7 S.Ct. 841,121 U.S. 105,30 L.Ed. 905
• Parties: GRANT v. PHOENIX MUT. LIFE INS. CO
• Court: U.S. Supreme Court

121 U.S. 105

7 S.Ct. 841

30 L.Ed. 905

GRANT v. PHOENIX MUT. LIFE INS. CO.

April 4, 1887.

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J. E. McDonald and Henry W. Blair, for appellant.

M. F. Morris and Wm. F. Mattingly, for appellee.

BLATCHFORD, J.

This is a suit in equity, brought in the supreme court, of the District of Columbia, on the seventeenth day of April, 1875, by the Phoenix Mutual Life Insurance Company, a Connecticut corporation, against Albert Grant and others, to enforce certain deeds of trust, 26 in number, executed by Grant and his wife to secure sundry sums of money, the plaintiff claiming to be the owner of all of the debts secured by the deeds of trust, which cover various lots in square 760, in the city of Washington. The suit applies to lots 1, 3, 4, 5, 6, 8, 9, 10, 11, 12, 14, 16, 17, and 18, all of which, but lots 16, 17, and 18, had buildings on them when the suit was brought. The total amount of principal moneys alleged in the bill to be due on the debts secured by the deeds of trust in $312,658.14. The trustees in the several deeds of trust, being five different sets of trustees, two in each set, are made parties defendant, as are certain judgment and mechanics' lien creditors of Grant and purchasers from him. The bill alleges that Grant is insolvent; that the property is very much deteriorating for the want of necessary repairs to the buildings upon it, which Grant is unable or unwilling to make; and that 10 of the buildings are unoccupied. The bill prays for the appointment of a receiver to rent and properly care for 12 of the lots; that the net amounts collected by the receiver be paid over to the plaintiff on account of the indebtedness; that the 14 lots covered by the trust deeds may be sold to pay the indebtedness due to the plaintiff; and that the proceeds of the sale be paid to the parties lawfully entitled thereto.

On the seventh of May, 1875, after a hearing, the court made an order appointing a receiver of 10 of the lots, to collect the rents of rented property, and to lease such as was unrented. On the sixth of July, 1875, Grant demurred generally to the bill. This demurrer was overruled on the eighth of November, 1875, with leave to answer. On the twenty-seventh of November, 1875, Grant filed an answer, denying his indebtedness as to a large part of the amount claimed by the plaintiff, and denying generally the equities of the bill; and with the answer filed four pleas, setting up (1) a want of jurisdiction in the court to decree a sale, on the ground that the only lawful authority to make the sale without the consent of Grant was vested in the several trustees; (2) the non-joinder of numerous parties named in the plea; (3) the illegality of the indebtedness claimed, because $9,000 of illegal and usurious interest was ca rged by the plaintiff and paid by Grant on such indebtedness; (4) that all the indebtedness was paid and satisfied before the bringing of the suit. On the same day, Grant filed a cross-bill, making as defendants the parties to the original bill and those named in the second plea, in which he set up that a contract had been made between him and the plaintiff, on the first of March, 1873, by the terms of which, among other things, all of his obligations to the plaintiff were to be surrendered to him in consideration of a deed in fee to be made by him to the plaintiff of 11 of the lots. The cross-bill prayed for a specific performance of such contract by the plaintiff.

On the twenty-third of December, 1875, the plaintiff moved to strike out the pleas, and also demurred to the cross-bill. On the fifteenth of March, 1876, the demurrer to the cross-bill was sustained with leave to amend. On the twentieth of March, 1876, the plaintiff filed a general replication, joining issue with Grant. On the sixth of May, 1876, the court in special term made an order referring the cause to the auditor of the court to state the account between the plaintiff and Grant, the amount due under the several deeds of trust, the amounts due to the judgment and mechanics' lien creditors referred to in the bill, whether the same are liens upon any of the real estate, the relative priorities of the claims of such creditors and the plaintiff, and the value of the real estate. From this order Grant appealed to the general term. On the hearing before the auditor he refused to receive evidence on the part of Grant in support of any of the defenses raised by his answer.

On the nineteenth of June, 1876, the auditor filed his report, in which he reported upon the several matters referred to him, and found the amount due on the several deeds of trust on the real estate, the sale of which the bill prayed for, to be $425,848.83, including interest, and stated the value of the 14 lots, and of the buildings upon them, to be $200,425. Grant filed exceptions to this report, and on the eleventh of December, 1876, the court made a decree overruling the exceptions, and confirming the report. The decree directed that the 14 lots be sold by trustees named in the decree, unless Grant should by a day specified pay into court for the plaintiff the sum of $407,117.58. In case of a sale, the proceeds were to be brought into court to abide further order. Grant appealed to the general term from this decree.

On the twenty-eighth of March, 1877, a decree was made by the general term, reversing the decree of the special term of December 11, 1876, setting aside the order of reference to the auditor, and the proceedings thereunder, and remanding the cause to the special term for further proceedings, to commence with the cause as it stood after the filing of the replication and when application for the reference to the auditor was made, with leave to Grant to move to amend his cross-bill, and to the plaintiff to apply for such order as it might be advised in regard to its replication. The decision of the general term, reported in 3 MacArthur, 42, considers the objection raised to the jurisdiction of the court to decree a sale, on the ground that by the trust deeds the sales were to be made by the trustees, and overrules it. It says: 'The present case contains many particular features which seem to render the jurisdiction of the court absolutely indispensable in order that a fair sale should be made, and bidders should know beforehand that they could get a valid title under a decree in which the rights of every person having a claim upon the property had been ascertained and settled. From the face of the bill it appears that the property in question has been subdivided into numerous lots. Some of the deeds of trust are liens upon all the lots; others upon some of them only. Payments have been made on account of some of the claims, and none upon others. The aggregate liens exceed the value of the property, and the owner is apparently insl vent. Purchasers from Grant subsequent to the liens are parties to the bill, and in justice to them the securities should be marshaled. The parties in interest are numerous, and the complication of rights is so great that nothing can settle them except a decree in equity.' It goes on to hold that the order of reference to the auditor was erroneous in the then condition of the cause, and that the issues raised by Grant ought to have been first tried in the usual way.

On the twenty-first of May, 1877, by leave of the court in special term, Grant filed amendments to his cross-bill. On the twenty-first of July, 1877, the plaintiff, by an order of the special term, withdrew its replication filed March 20, 1876, and filed a general replication to the answer of Grant, and set down for argument the pleas filed with Grant's answer. On the eleventh of September, 1877, Grant filed a supplemental answer, setting up as a bar to the suit a decree made by the supreme court of the District of Columbia, in equity, in a suit wherein Aaron Carter, Jr., and others were plaintiffs, and Grant and the Phoenix Mutual Life Insurance Company and others were defendants; and the company filed an answer to the amended cross-bill of Grant.

On the twelfth of February, 1878, the court in general term, on an application made by Grant at the special term, and which it ordered to be heard in the first instance by the general term, made an order vacating the receivership, and directing the receiver to deliver to Grant possession of 10 of the lots and to pay into the registry of the court all moneys in his hands derived from rents and profits. On the fourth of March, 1878, the court in special term made an order overruling all of the pleas filed by Grant. Grant appealed to the general term from so much of this order as overruled the second, third, and fourth pleas. On the second of July, 1879, the general term affirmed the order of the special term overruling the second, third, and fourth pleas, and remanded the cause to the special term for further proceedings. On the twenty-second of November, 1879, the plaintiff filed a replication joining issue with Grant on his supplemental answer to the bill.

Thereafter, testimony was taken by both parties on the issues raised. Testimony was taken at Hartford, Connecticut, on the part of the plaintiff, by commission. Grant moved to suppress certain depositions taken under that commission. The motion was granted as to three depositions, and overruled as to the others. Complaint is made by Grant that, upon the motion to suppress, he was not permitted to read certain affidavits, and that he was denied leave to cross-examine orally certain witnesses at Hartford, and that he was denied an extension of time in which to take testimony in rebuttal of evidence taken on the part of the plaintiff at Hartford. On the ninth of February, 1881, the court in special term made an order referring the cause to the court in general term for hearing in the first instance.

On the second of March, 1882, the cause having been heard by the general term on the pleadings and proofs, a decree was made by it declaring that Grant is...