Vetterlein v. Barker

• Decision Date: 21 March 1891
• Citation: 45 F. 741
• Parties: VETTERLEIN et al. v. BARKER.
• Court: U.S. District Court — Southern District of New York

45 F. 741

VETTERLEIN et al. v. BARKER.

United States Circuit Court, S.D. New York.

March 21, 1891

Roger M. Sherman, for plaintiffs.

John Proctor Clarke, for defendant.

WALLACE J.

This is a bill to reverse and set aside a decree of this court, (16 F. 759,) in affirmance of a decree of the district court (Id.218) adjudging that certain insurance policies, the property of the bankrupt firm composed of Theodore H Vetterlein and Bernhard E. Vetterlein, and assigned to trustees for the benefit of the wife and children of Theodore H. Vetterlein, were so assigned in fraud of the rights of the assignee in bankruptcy of the Vetterleins. The present complainants are the wife and children of Theodore H Vetterlein, the beneficiaries named in the assignment of the policies. The defendants are the assignors in bankruptcy, who are the successors of the complainant in the former suit, and the defendants in that suit. The bill proceeds upon three grounds: (1) That a decree in a collateral suit between the parties to the original suit, which was put in evidence as res adjudicata upon the issue of fraud, has since been annulled by the court which rendered it as void for want of jurisdiction; (2) that the use of the collateral decree as evidence in the original suit was in fraud of an agreement made between the parties to that suit; and (3) that the defendants in the original suit, who were trustees for the present complainants, violated their duty to their cestuis que trustent by omitting to avail themselves of defenses which existed, and setting up defenses in hostility to their trust,-- of all which the complainant in the original suit was aware at the time. The bill has been discussed by counsel as though it were a the trustees insisted that the beneficiaries were necessary parties to vacating of the collateral decree is new matter, which has arisen since the original decree, it would state facts appropriate for such a bill, if it did not appear that the collateral decree was void for want of jurisdiction of the court,-- a fact which is not new matter, which presumably was known when the decree was offered in evidence, and which if it had been urged at the time, would have destroyed the effect of the decree as evidence. So far as the bill proceeds upon the theory that the former defendants, trustees of the present complainants, were derelict in their duty in the conduct of the suit, to the knowledge of the...