Hoshaw v. Cosgriff

• Citation: 247 F. 22
• Decision Date: 04 December 1917
• Docket Number: 4949.
• Parties: HOSHAW v. COSGRIFF et al.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

247 F. 22

HOSHAW v. COSGRIFF et al.

No. 4949.

United States Court of Appeals, Eighth Circuit.

December 4, 1917

The trustee in bankruptcy of the estate of Cook Bros. Company, a bankrupt, brought this action against appellees to recover certain property which it was claimed belonged to said estate. The appellees filed a motion to dismiss the complaint for want of equity. The motion was granted, and the trustee appealed.

Omitting mere argument and legal conclusions, the complaint alleged among other things, the following facts:

That on December 31, 1910, the bankrupt became indebted to one Hirsig in the sum of $45,000, evidenced by two promissory notes payable on or before five years from date, with interest at 8 per cent. per annum; that to secure the payment of said indebtedness the bankrupt executed and delivered to Hirsig on the above date a mortgage on certain real estate situated in Cheyenne, Laramie county, Wyo.; that said mortgage was duly recorded on the day of its date; that it was assigned to Charles W. Hirsig, March 7, 1911, the assignment being recorded October 28, 1911; that for 15 years prior to September 24, 1913, the bankrupt had close business relations with the First National Bank of Cheyenne, through its president, Thomas A. Cosgriff, its vice president, George E Abbott, and its cashier, Albert D. Johnson; that by reason of such business relations the bank had obtained and held the implicit confidence and trust of the bankrupt; that on the day last aforesaid the bankrupt, being indebted to said bank in the sum of $18,500, to secure the payment of the same executed and delivered to the bank a mortgage running to one T. H. Williams covering the same property as the Hirsig mortgage, and in addition thereto lot 7, in block 287, the mortgage being recorded on the day of its date; that on February 21, 1914, the bankrupt was in default as to the Hirsig and Williams mortgages, and Hirsig notified the bank and the bankrupt that if payment of his mortgage was not made the same would be foreclosed; that on the day last aforesaid the bank decided to pay the amount due on the Hirsig mortgage and add the amount so paid to its own debt against the bankrupt; that at the same time the bank requested that the bankrupt execute and deliver to it a warranty deed conveying all the real estate mentioned and described in the two mortgages; that the bankrupt complied with this request, the deed running to Thomas A. Cosgriff, as nominee of the bank; that said warranty deed was dated February 21, 1914, and recorded March 5, 1914; that the consideration for said conveyance was the debt of the bankrupt to the bank and the payment by the bank of the amount due under the Hirsig mortgage, together with taxes due upon the land; that at the same time the warranty deed was executed and delivered there was an agreement in writing entered into between the bankrupt, party of the first part, Thomas A. Cosgriff, party of the second part, Charles W. Hirsig, party of the third part, and the First National Bank, party of the fourth part. This agreement, after reciting the indebtedness of the bankrupt to the bank, the indebtedness due upon the Hirsig mortgage, and the taxes due to the city of Cheyenne and the county of Laramie upon the real estate covered by the mortgages, proceeded as follows:

'Whereas, the party of the third part has notified first party that he intends to foreclose his mortgage upon the real estate belonging to first party, and it is the desire of first party to secure further time in the matter of negotiating money with which to pay its obligations, and avoid foreclosure of the mortgage as aforesaid; and

'Whereas, the party of the second part is willing to accept a transfer of the real and personal property, and assume and agree to pay the indebtedness represented by the above-described mortgages and the taxes accrued and owing against said property, and the insurance provided for by said Hirsig mortgage, the said conveyance of said party of the first part to the party of the second part to be made, executed and placed in escrow with the party of the fourth part, and to become absolute on the 5th day of March, A.D., 1914, unless on or before said date the party of the first part shall pay the taxes due and owing upon said property, and the interest due and owing to the party of the third part, and the indebtedness to the said T. H. Williams; and

'Whereas, the party of the fourth part has been agreed upon by the parties hereto as the escrow agent to receive and hold the conveyance aforesaid under the terms of this agreement:

'Now, therefore, in consideration of the mutual covenants herein expressed, and in further consideration of the payment of one dollar each to the other, the receipt whereof is hereby confessed and acknowledged, the parties hereto do agree as follows, to wit: 'I. The party of the first part hereby agrees to make, execute, and place with said escrow agent good and sufficient warranty deeds and bills of sale of all its property, both real and personal, excepting its outstanding book accounts, to the party of the second part, coincident with the execution and delivery of this agreement upon consideration of one dollar paid by second party to first party, and the assumption and agreement to pay by second party of the above-described indebtedness represented by mortgages, and the taxes accrued against said property to the city of Cheyenne and county of Laramie, Wyoming, and the insurance provided for by the said Hirsig mortgage, said deeds and bills of sale to be placed in escrow with the party of the fourth part, with instruction to said party, which is hereby given, to deliver said deeds and bills of sale to said second party on the 5th day of March, A.D. 1914, at 3 o'clock in the afternoon of said day: Provided that on or before said date and time mentioned the party of the first part has not paid the interest due and owing to Charles W. Hirsig upon the notes and mortgages herein described, and the taxes herein set forth, and said indebtedness represented by the note and mortgage of T. H. Williams, and that in the event the party of the first part shall pay said interest and said taxes and said indebtedness to T. H. williams, on or before said date and time herein mentioned, then and in that event the party of the fourth part is hereby authorized and instructed to return said deeds and bills of sale to the party of the first part.

'II. The

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