Newman v. Schwerin

• Decision Date: 08 May 1894
• Docket Number: 161.
• Citation: 61 F. 865
• Parties: NEWMAN v. SCHWERIN.
• Court: U.S. Court of Appeals — Sixth Circuit

61 F. 865

NEWMAN v. SCHWERIN.

No. 161.

United States Court of Appeals, Sixth Circuit.

May 8, 1894

John J Tracy and John H. Cother, for appellant.

Pritchard & Sizer, for appellee.

Before TAFT and LURTON, Circuit Judges, and BARR, District Judge.

LURTON Circuit Judge.

This bill was filed in the chancery court for Cumberland county Tenn. The object of the bill was to have an accounting with the defendant, Schwerin, as attorney in fact for Samuel Newman. The power of attorney was as follows:

'State of Mississippi, County of Hinds.

'Be it known that I, Samuel Newman, of the county and state above named, do hereby constitute and appoint M. Schwerin, of the city of Newark, state of New Jersey, my attorney in fact, with the following powers: (1) To sell, convey, lease, or rent any and all the land that I own, or in which I have any interest, situated and being in the counties of White, De Kalb, and Putnam, in the state of Tennessee. (2) To sell, assign, execute, or enforce a certain judgment or decree rendered in the year 1860 in my favor, against the North American Coal & Transportation Company, by the chancery court of White county, in the state of Tennessee, or any other judgment or decree rendered by said court in my favor, condemning the sale of any land. (3) In case it should be necessary to resort to legal proceedings in order to recover possession of said land, or to enforce or to execute said decree or decrees, the said Schwerin is hereby authorized to sue in my name, and to do all things necessary to accomplish these desired ends. (4) It is, however, expressly stipulated and agreed that the said Schwerin is to receive no pay from me for his services, and he is to pay and be responsible for all costs, expenses, and risks incurred by him while in the execution of his powers. (5) In case the said Schwerin should be successful in the enterprise by us contemplated, and be able to sell said lands and enforce said decrees, then he is to reimburse himself for all legitimate expenses by him incurred; and the rest of the proceeds I hereby bind myself, and promise, to divide into four equal parts, three of which shall be distributed among the heirs of my deceased brother, Charles Newman, and one shall I retain myself.

'Witness my signature, this the sixth day of February, 1886.

'Samuel Newman.'

The bill, in substance, alleged that, in pursuance of the power therein conferred, the defendant had instituted a suit upon the judgment mentioned therein in the chancery court of White county, Tenn., and that on May 12, 1886, a decree had been obtained in favor of said Samuel Newman and against the said North American Coal & Transportation Company for the sum of $58,000 and costs of suit; that said Schwerin, still acting under his said agency and trust, had caused an execution issuing on said judgment to be levied on a number of tracts of land in Cumberland county, Tenn., as the property of the judgment debtor; that at the sale thereof under said writ and levy the lands thus levied on had been sold for a sum aggregating $38,740, and sheriff's deed executed to the several purchasers; that said Schwerin had by virtue of his said agency credited on the said judgment an amount equal to the aggregate of the sums bid on said lands, and paid to the sheriff, in money, a sum equal to the costs and expenses of sale; that parts of the lands thus sold had been bought by one G. J. Kemp, whose bid aggregated $13,600, another part had been sold to one B. F. Newman for the sum of $10,450, and the remainder had been sold to the defendant Schwerin, who bid them in for the sum of $14,960; that none of the purchasers had paid to either the sheriff or said Schwerin any part of their said bids,--the said Schwerin, as attorney in fact, waiving such payment, and crediting the decree as if the money had been paid; that under instructions from said Schwerin, the sheriff had executed deeds to the several purchasers, reciting the facts as to amount of bid and manner of payment; that, subsequently, both Kemp and Newman had conveyed the parcels so bid in by them to the defendant, who, the bill charges, 'now claims to be the owner of all of said lands, in fee simple, free from all equitable claims or liens in behalf of any person. ' It further alleges that Schwerin has never accounted for the proceeds of said sale, 'and utterly refuses to recognize the right of Samuel Newman to any money paid thereon, or any claim to or lien upon the said lands.' The complainant, Mrs. Lena Newman, is a citizen and resident of the state of Mississippi, of which state said Samuel Newman was a citizen and resident at the time of his death, in 1889, being a date subsequent to all the transactions above stated. Samuel Newman died intestate, and without issue, and without ever having had any settlement of the matters aforesaid with his said agent. Complainant is the widow of said Newman. Under the law of descent and distribution of the state of Mississippi, the widow of a husband dying intestate, and without children or representatives of children, is entitled to take his entire estate, real and personal, after payment of his debts. Code Miss. Sec. 1545. The theory of complainant's bill is that she, as sole distributee, under the law of Mississippi, is entitled to maintain this bill, and recover and appropriate to her own use any sum due to her deceased husband by the defendant, Schwerin, by reason of the acts of the said Schwerin under his said trust and agency.

The prayer of the bill was that Morris Schwerin be made a party defendant by publication, he being a nonresident of the state of Tennessee, and a citizen and resident of the state of New Jersey; that she have decree against him for the sum of $38,740, and interest thereon, that being the aggregate sum for which the lands levied on had been sold, and the sum credited on said judgment as the result of said sales, less such sums of money as said Schwerin had properly expended in and about the execution of his power of attorney; and that an equitable lien be declared to exist in favor of complainant in the lands so acquired by said Schwerin. Publication was accordingly made. The defendant appeared, and filed a demurrer, which was as follows:

'Lena Newman vs. Morris Schwerin.

'In the chancery court, at Crossville, Tennessee, the defendant, Morris Schwerin, comes and demurs to the bill filed against him in the above-styled cause, and assigns the following grounds of demurrer: (1) This court has no jurisdiction of the cause, the defendant being a nonresident of the state of Tennessee, and there being no attachment of property against him. (2) The suit is brought to recover a debt alleged to be due Samuel Newman from the defendant, Morris Schwerin, and should have been brought by said Newman's administrator or personal representative. His widow or heir has no right of action. (3) The bill alleges that the defendant holds the lands described in the bill in trust for Samuel Newman; and, if that be true, then the right of action would descend to said Newman's heirs at law, and complainant could only maintain her suit if her husband had died, leaving no heirs at law capable of inheriting, which the bill does not charge. Wherefore, the defendant prays the judgment of the court whether he shall make any other or further defense to complainant's bill.'

Before the demurrer was finally disposed of, the complainant, under leave, amended her bill by a prayer for an attachment, and upon her application she was appointed administratrix ad litem of the said Samuel Newman. From thence she seems to have been regarded as complainant in her character as administratrix ad litem, as well as in her character as distributee, though no formal order was made so amending her bill. Presumably as a consequence of this appointment, the demurrer of defendant was then overruled. After this action of the court an order was made that upon the return of an attachment levied on the property of defendant, Schwerin, publication should be again made for him, requiring his appearance to the next September rules. In view of the general appearance already made by the defense on the merits presented by the second and third grounds of demurrer, this second publication seems to have been a work of supererogation. An attachment did issue, and was levied on certain real estate as the property of said Schwerin, and publication was made in accordance with this order. At the time named in this second publication the defendant filed his petition for a removal of the cause to the United States circuit court, which, upon consideration was allowed. After the removal the defendant filed his answer. The cause was finally...