Ritchie v. McMullen

• Decision Date: 03 June 1895
• Docket Number: No. 15,15
• Citation: 159 U.S. 235,16 S.Ct. 171,40 L.Ed. 133
• Parties: RITCHIE v. MCMULLEN et al
• Court: U.S. Supreme Court

159 U.S. 235

16 S.Ct. 171

40 L.Ed. 133

RITCHIE

v MCMULLEN et al.

No. 15.

June 3, 1895.

This was an action brought September 21, 1888, in the circuit court of the United States for the Northern district of Ohio, by James B. McMullen, a citizen of the state of Illinois, and George W. McMullen, a citizen of the province of Ontario, in the dominion of Canada, against Samuel J. Ritchie, a citizen of the state of Ohio, upon a judgment for the sum of $238,000, recovered by the plaintiffs against the defendant on February 26, 1888, in the queen's bench division of the high court of justice for the province of Ontario.

The petition alleged that by a contract in writing, dated January 13, 1886, the plaintiffs, being the owners of 210 first-mortgage bonds of the Central Ontario Railway, a corporation of the province of Ontario, for $1,000 each, and of certain coupons thereof, amounting to the sum of $71,250, agreed to sell, and the defendant agreed to purchase, those bonds and coupons for the price of $210,000 of the fully paid-up stock of the Canadian Copper Company, a corporation of the state of Ohio; that on the same day, in part performance of the contract, the defendant accepted five bills of exchange for $5,000 each, drawn by one of the plaintiffs, payable to the other plaintiff's order, at the Bank of Montreal, at Picton, in the province of Ontario, on July 1, 1886, with an indorsement thereon that the five bonds of the Central Ontario Railway attached to the bills were to be delivered to the defendant upon his paying the acceptances; and it was agreed that the payment by the defendant of those bills should be considered as payment of a like sum upon the contract, and the delivery by the plaintiff of the bonds attached to the bills should be considered as a delivery of so many bonds under the contract.

The petition further alleged that before October 8, 1887, all things necessary to entitle the plaintiffs to the performance of the contract had happened, and the plaintiffs were ready to perform it on their part, and the defendant neglected an refused to perform it on his part; and that on that day the plaintiffs commenced an action in the queen's bench division of the high court of justice for Ontario, 'a duly and lawfully constituted court of record, having jurisdiction over all civil and criminal matters in and for that part of the dominion of Canada called the 'Province of Ontario," and caused a writ of summons to be personally served upon the defendant on November 8, 1887, and that on November 28, 1887, the defendant 'duly entered his appearance in said action in said court'; that that action was brought upon the contract aforesaid; and that the plaintiffs, in their statement of claim 'duly delivered to said defendant or his duly-constituted solicitors and attorneys, in accordance with the laws of siad province of Ontario,' prayed for specific performance of the contract, or for damages for the breach thereof.

The petition further alleged that in that action, on November 28, 1887, the defendant, in accordance with those laws, delivered to the plaintiffs his answer, denying the allegations of the plaintiffs' claim, and averring that, before the making of the contract aforesaid, the plaintiffs jointly and the defendant were each the owners of a large number of the bonds of the Central Ontario Railway, and agreed, in order the better to effect a sale of all the bonds, that the plaintiffs' bonds should be assigned to the defendant, in order to enable him to deal with them as the apparent owner, accounting to the plaintiffs for their share of the proceeds; that the contract aforesaid was executed in order to carry out that understanding, and that, if it purported to be an absolute sale to him of the plaintiffs' bonds for a certain sum to be paid by him, did not faithfully express the agreement between the parties, and should be reformed; that it was no part of the agreement that he should pay the plaintiffs any money in respect of the assignment until he had sold the bonds and received the proceeds; that the defendant's acceptances were given solely for the plaintiffs' accommodation; and that the defendant had not sold any of the bonds, although he had used his best endeavors to do so.

The petition further alleged that on December 18, 1887, issue was joined upon that answer; that on February 29, 1888, that action came on for trial in said court, and judgment was rendered that the plaintiffs recover of the defendant the sum of $238,000, and costs; that the judgment was unreversed and unsatisfied, in whole or in part; and that, by reason of the premises, the defendant became indebted to the plaintiffs in that sum, with interest, and, although payment had been demanded, had not paid the same, or any part thereof.

To this action on the judgment, the defendant filed an answer, containing the following statements:

The defendant 'admits that on January 13, 1886, he entered into a contract in writing with the plaintiffs,'—a copy of which was made part of the answer, showing that it was a contract of sale and purchase, as alleged in the petition, and that the bonds and coupons were to be delivered, and the price paid, at the Bank of Montreal, at Picton. 'And he denies that he entered into any other contract in writing with them upon any subject or touching any matter in contention in this action.

'He admits that an action was commenced against him in the province of Ontario, Canada, for the general purpose stated in the petition, and that service of a summons was in form made upon him in Summit county, Ohio, and that certain attorneys entered, or undertook to enter, the appearance or this defendant in said action.

'He admits that a formal, but an irregular and void, judgment was entered up against him in said court on or about the 29th day of February, 1888, which judgment was entered without his knowledge, and in his absence, and without any hearing whatever.

'And this defendant denies each and every other fact, statement, and allegation in said petition.

'And for a further defense this defendant alleges that the said contract entered into between the parties was entered into for the purposes stated in his answer in said original action in the province of Ontario, and for no other purpose; that the contract was altogether an accommodation contract, made between the parties with the full understanding and agreement that it was never to be performed between them; that it was made for the accommodation and convenience of the plaintiffs, to enable them to make use of the bonds described in the petition, and to aid them in the raising of money thereon.

'And this defendant further alleges that the said plaintiffs did not, at the time stated in the petition, nor at any other time, ever undertake to or in fact perform said contract upon their part, or any part thereof. They never at any time demanded performance upon the part of this defendant of said contract, unless the bringing of said action was a demand of such performance. They never at any time tendered the bonds or coupons in the contract and in the petition mentioned to this defendant, and they never delivered any of the said bonds to this defendant, nor did they ever make delivery nor attempt to make delivery of said bonds in accordance with the terms of...