Henry v. Travelers' Ins. Co.

• Decision Date: 23 February 1891
• Parties: HENRY et al. v. TRAVELERS' INS. CO.
• Court: U.S. District Court — District of Colorado

45 F. 299

HENRY et al. v. TRAVELERS' INS. CO.

United States Circuit Court, D. Colorado.

February 23, 1891

The object of the original bill was to establish a contract, and for an accounting between the plaintiffs and the defendant on the basis of the alleged contract. The bill alleged, among other things, that the defendant held various notes mortgages, bonds, and stock as collateral security for money borrowed by the plaintiffs from the defendant, and that the defendant had given the plaintiffs notice (a copy of which was sent out in the bill) that it would, on the 28th day of September, 1885, sell certain named stocks to pay certain specified debts, for the payment of which the stocks had been pledged; and, in addition to the prayer for a full accounting, the bill prayed for an injunction to restrain the sale of the stocks mentioned in the notice, and 'that, if the defendant in the mean time, and before the final hearing of this cause, makes any sale or sales of any of the property pledged as security for said debts, or any thereof, that all of said sales be declared null and void, and for naught held ' The bill was filed in Denver, Colo., the day the sale was made in Hartford, Conn., and no injunction was moved for or issued. The court found and decreed that the defendant had entered into a contract with the plaintiffs in substance and effect as alleged in the bill, and it was referred to a master, to take and state the accounts between the parties. 33 F. 132. Months were consumed in taking testimony as to the state of the accounts. The master made a voluminous report covering all the dealings between the parties, and settling and adjusting the various accounts. If the plaintiffs filed any exceptions to the master's report, they were not insisted on at the hearing. The defendant filed numerous exceptions, some of which were sustained, and the accounts in some respects restated by the court, and a final decree rendered on the 15th of May, 1890. 42 F. 363. The plaintiffs had notice of the sale of the pledged stocks at the time the sale was made, and the testimony in the original cause disclosed the fact of sale, and everything connected therewith. The supplemental bill, among other things alleges:

'That in the month of September, 1885, the defendant gave your orators notice that the defendant would sell at public auction at Hartford, Conn., a great part of the stocks pledged as collateral security to pay certain debts, and which have been above described, to-wit:

"HARTFORD, Sept. 11, 1885.

"To T. C. Henry, Ellen C. Henry, H. J. Aldrich, Colorado Loan and Trust Company, Grand River Ditch Co., Uncompahgre Canal Co., Denver Circle Real Estate Co., Denver Circle Railroad Co., of Denver, Colorado; T. C. Henry & Co., T. C. Henry, and George W. Carpenter, of Abilene, Kansas; Henry Mercantile Co., Henry Town and Land Co., of Henry, Colorado; Fruita Town and Land Co., of Fruita, Colo.; Citizens' Ditch and Land Co., of Henry and Denver, Colorado:

"You will please take notice that the Travelers' Insurance Company hereby demands of the respective makers or indorsers, or of any other party interested in the payment, on or about 12 o'clock meridian, of Monday, September 28, 1885, of the following specified notes, to-wit:

Date of Note. Maker. Amount

Mar. 25, 1884, Signed, T. C. Henry, ................ $25,000

Mar. 10, 1884, " T. C. Henry, ................. 30,000

May 22, 1884, " T. C. Henry, ................. 50,000

Oct. 7, 1884, " T. C. Henry, .................. 1,500

Dec. 8, 1884, " T. C. Henry, .................. 3,000

May 18, 1884, " Colorado Loan & Trust Co., .... 5,000

May 27, 1884, " Uncompahgre C'l Co., ......... 50,000

June 23, 1884, " Colo. Loan & Trust Co., ...... 25,000

June 24, 1884, " Colo. Loan & Trust Co., ....... 5,000

July 1, 1884, " Colo. Loan & Trust Co., ....... 4,000

July 1, 1884, " Colo. Loan & Trust Co., ....... 5,000

July 1, 1884, " Colo. Loan & Trust Co., ....... 6,000

-- With interest on each of said notes. Unless the above said notes are paid within the time above mentioned, the Travelers' Insurance Company hereby gives you notice also that it will sell, on Monday, September 28, 1885, at 2 o'clock p.m., at the office of said company, in Hartford, Conn., at public auction, the following securities deposited with this company as collateral security for the payment of said notes, according to the terms of the respective pledges, to-wit: 11,845 shares Grand River Ditch Co.'s stock;--shares Fort Morgan Irrigation Co.'s stock; 3,401 shares Empire Land and Canal Co.'s stock; 900 shares Denver Circle Real Estate Co.'s stock; 500 shares Denver Circle Railroad Co.'s stock; 495 shares Henry Mercantile Co.'s stock, Henry, Colo.; 300 shares Henry Town and Land Co.'s stock, Henry, Colo.; 1,000 shares Fruita Town and Land Co.'s stock; 985 shares Citizens Ditch and Land Co.'s stock; 3,000 shares Uncompahgre Canal's stock.

(Signed) "J. G. BATTERSON, President."

This is the same notice exhibited with the original bill. The supplemental bill then alleges that the stocks, with trifling exceptions, were sold in pursuance of this notice for much less than their real value; that the sale was brought about by the fraudulent and oppressive conduct (which is set out in detail) of the defendant, and was illegal and void; that the stock were of the value of more than one million dollars; and that the damages occasioned--

'By reason of the illegal and fraudulent sales and conversions of said property by said defendant to its own use aggregate more than the sum of one million of dollars. * * * And because said property has been so disposed of, and illegally and fraudulently converted to the use of the said defendant, and a part thereof sold and delivered to third persons, so that it cannot be returned to your orators, and because your orators elect hereby to recover from said defendant the value of said property so illegally sold, disposed of, and converted by the said defendant, and the damages to your orators thereby, in lieu of the return of said property, as prayed for in said original bill, your orators therefore pray that the value of said property, and the damages occasioned by such illegal disposition, sale, and conversion thereof and said failure to perform and contract, as aforesaid, be ascertained in this suit, and that your orators, Henry and the Trust Company, have judgment therefor, and that the defendant be decreed to pay unto your orators, Henry and the Trust Company, the value of said property, so found and ascertained, and the damages...