Lant v. Manley

• Decision Date: 08 July 1896
• Docket Number: 409.
• Citation: 75 F. 627
• Parties: LANT v. MANLEY et al.
• Court: U.S. Court of Appeals — Sixth Circuit

75 F. 627

LANT v. MANLEY et al.

No. 409.

United States Court of Appeals, Sixth Circuit.

July 8, 1896

This is an appeal from a decree of the circuit court of the United States for the Eastern district of Michigan dismissing a bill in equity on demurrer. 71 F. 7. The complainant below is George Lant, Sr., a citizen of Indiana. The defendants are Charles H. Manley, administrator of the estate of Elijah W Morgan; Edward D. Kinne and Otis C. Johnson, executors and trustees under the will of Lucy W. S. Morgan; Lucy D. S Parker, individually and as executrix of the last will and testament of Franklin L. Parker,-- all citizens of Michigan. The complainant brings his bill, for himself and all other creditors of Elijah W. Morgan, deceased, to subject certain real estate and equitable assets averred in the bill to have been transferred without consideration by said Elijah W. Morgan to the defendants, or their predecessors in title, to defraud the complainant and other creditors of said Morgan. The bill avers that on July 12, 1881, the complainant obtained a judgment against Morgan in the circuit court for the county of Washtenaw, in Michigan, for $5,882.72, with interest at 10 per cent. per annum; that on February 2, 1891, complainant brought suit upon this judgment against Morgan in the court below, and procured the levy of a writ of attachment upon certain real estate, as the property of Morgan, which then was, and still is, in the possession of the defendants Kinne Johnson, and Parker, or some of them, as executors and trustees under the will of Lucy W. S. Morgan, wife of E. W. Morgan; that the land attached had been conveyed by Morgan to his wife, in pursuance of a fraudulent conspiracy, in order to defraud his creditors; that the original judgment in the state court was founded on three promissory notes of Morgan dated November 20, 1873, and payable 18 months after date to one Hattie C. Eames, and on December 16, 1876, for a valuable consideration, indorsed and transferred to the complainant; that in June, 1893, after Morgan's death, by the judgment of the court below complainant obtained a judgment for $8,702.20 against Charles H. Manley, administrator of Elijah W. Morgan, against whom the suit had been revived; that on June 19, 1893, a fi. fa. was issued to the marshal of the district, commanding him to make the judgment out of the goods, chattels, lands, and tenements of the estate of said Elijah W. Morgan; that on September 8th the marshal made a return that there were no goods, chattels, lands, and tenements in his district, whereof he could make the damages and costs mentioned in the writ; that on the 21st day of February, 1894, complainant sued out an alias fi. fa., and that said writ was duly levied on April 2, 1894, upon the lands and tenements which had been attached under the writ of attachment already referred to. The complainant offers in his bill to share the benefit of the lien acquired by his attachment with any and all creditors who shall come in and prove their claims, and contribute to the expense of his suit. The bill, in much detail, sets out the number of pieces of property of which it charges Elijah W. Morgan was seised and possessed in November, 1873, and these descriptions include the particular real estate which was attached in the suit at law in the court below. The thirty-third paragraph of the bill is as follows: '(33) And your orator further shows, upon information and belief, that in the year A.D. 1873, and from that time until the death of said Lucy W. S. Morgan in 1887, the said Elijah W. Morgan was indebted, not only to your orator as aforesaid, but to a considerable number of other persons, in large amounts, and was insolvent; and, further, that said Elijah W. Morgan, in the year A.D. 1874, combined and confederated together with his said wife, Lucy W. S. Morgan, with her nephew, said Franklin L. Parker, and said Lucy D. S. Parker, who was then his wife, to so sell, transfer, and incumber all of his property to cover and conceal the same from his said creditors, and from any execution which might be issued against him; and also that any and all conveyances under which the said defendants, or any of them, claim title to said pieces or parcels of land hereinbefore described, were made in pursuance of such combination, confederacy, and agreement together, and for the fraudulent purposes last above mentioned; and also that said Lucy W. S. Morgan, Franklin L. Parker, and Lucy D. S. Parker, from the time of the last above mentioned, well knew the insolvent condition of said Elijah W. Morgan, and of his indebtedness, and acted together with him in the making and receiving of such transfers and conveyances as last above mentioned, for the purposes of aiding him in hindering, delaying, and defrauding his said creditors. ' The bill further avers that Franklin L. Parker died in 1894, and that his wife, Lucy D. S. Parker, became his executrix, and is possessed as such of all the property received by said Parker from Morgan in pursuance of the conspiracy above described. A large part of the bill is made up of averments tending to show that the defendants are in possession of many documents and papers from which the facts averred with reference to the fraudulent combination alleged, and the actual ownership by Morgan of the property described, would appear, for the purpose of basing a prayer for discovery. The forty-third paragraph of the bill was directed to the possible objection that complainant has been guilty of laches, and averred that since 1876 until the filing of the bill he had used all means at his command to find property of Morgan on which to levy, but that, by reason of that fraud and fraudulent concealment of the same by the defendants, he had been prevented from obtaining satisfaction of the judgment. The Prayer of the bill is for an accounting of the personal assets of Morgan in the hands of the defendants, a marshaling of the debts, the appointment of a receiver to take possession of lands and personal property, a sale of the real estate described in the bill, and a distribution. There is also a prayer for general relief. The bill was demurred to by all the defendants except Morgan's administrator, Manley. The demurrer was sustained in favor of the defendants sued as executors, on the ground that they held the real estate sought to be reached under the orders of the probate court, and that federal process against it would therefore lead to a conflict of jurisdiction. It was sustained in favor of Lucy D. S. Parker on the ground of complainant's laches, apparent on the face of the bill, in pursuing the remedy he now seeks to have enforced.

In order to meet the objections found by the court to the bill on the ground of complainant's laches, the complainant's counsel tendered an amendment to the bill which was permitted to be filed by the court by order of September 16, 1895, and the defendants were given leave to answer within 15 days. Upon application by the defendants, the time to answer was extended 10 days. No answer was filed by November 20, 1895, when an order was made extending the time to answer 20 days from that date. On the 30th of December, 1895, the defendants came in, and made a motion to strike the amendment to the bill from the files. The motion was granted, and accordingly, on the 10th of February, the amendment was stricken from the files, and the decree dismissing the original bill was entered by the court. The amendment is very long, and sets forth in minute detail the efforts of the complainant to collect his debts. He avers that for three years after 1876, when he came into possession of the notes, he held them only as collateral security, and that the owners of the notes objected to his incurring any expense to collect them, because other notes of Morgan, in which they were interested, were in the hands of a lawyer of Ann Arbor, where Morgan lived, for collection, and they hoped thus to collect them all; that in 1879 the lawyer reported that he could make nothing out of Morgan, and thereupon complainant, acquiring absolute title to the notes, used every means available to him, who was in active business in Evansville, Ind., to collect the notes; that he employed a leading lawyer of Ann Arbor, who obtained judgment in a state court of Michigan on the notes in 1881, and that thereafter he employed lawyer after lawyer to uncover Morgan's suspected frauds in concealing his property, but all to no purpose; that there were many other claims against Morgan, aggregating a large sum, in the hands of attorneys in Michigan, which could not be collected, and that it seemed impossible to discover evidence upon which Morgan's conveyances to his wife and others could be impeached for fraud; that it had been represented by Morgan that his conveyances to his wife were for the consideration of $25,000; that in 1889, in a trial in the state of New York, wherein Morgan's executors were parties, and Morgan's transactions with his wife were the subject of investigation, it was developed that no such consideration was in fact paid; that complainant, being advised of this trial, and of the facts developed therein, then employed a lawyer to look up the property of Morgan conveyed to his wife, and in 1891 levied the attachment, and began the suit at law in the court below on the state judgment; that after the attachment Morgan died, and the complainant was obstructed in procuring the appointment of a proper administrator by the executors of Lucy W. S. Morgan, and went from the probate court to the circuit court, on appeal, in order to secure an administrator who should be willing to enforce the rights of Morgan's creditors; that then complainant and the administrator of Morgan took proper proceedings...