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Cases citing this case: Supreme Court
Cases citing this case: Circuit Courts
U.S. Supreme Court
GOTTLIEB v. THATCHER, 151 U.S. 271 (1894)
151 U.S. 271
GOTTLIEB
v.
THATCHER.
No. 192.
January 15, 1894.
[151 U.S. 271, 272] E. T. Wells and R.
T. McNeal, for appellant.
J. Warner Mills, for appellee.
Mr. Justice JACKSON delivered the opinion of the court.
This suit was brought by the appellant, who was
the complainant below, against the appellee, to set aside
conveyances made to him by Samuel H. Thatcher and the sheriff of
Arapahoe county, in the territory of Colorado, of certain lots and
parcels of land lying and being in that county, and in the eastern
division of the city of Denver, on the ground that the lands were
conveyed, and caused to be conveyed, to the appellee for the
purpose of hindering, delaying, and defrauding the complainant and
other creditors of Samuel H. Thatcher.
The case made by the pleadings and proofs, so far
as need be noticed, is this: On May 7, 1874, one Samuel Kaucher
recovered a judgment in the district court of Arapahoe county,
Colo., against Samuel H. Thatcher, for $ 2,710.40. A certified
copy or abstract of this judgment was duly filed for record, and
was recorded in the office of the clerk and recorder of the county
on June 18, 1874. From this judgment Thatcher prosecuted a writ of
error to the supreme court of the territory, and executed a
supersedeas bond, with sureties, in the sum of $3,500. That
judgment was affirmed by the supreme court of the territory. 2
Colo. 698. Thereupon Thatcher
[151 U.S. 271, 273] prosecuted a writ
of error to the supreme court of the United States, and, as
appears from the record of the case in this court, executed a
supersedeas bond, with sureties, which suspended the execution of
the judgment of the court below. It is shown that the sureties on
the supersedeas bond or bonds were protected by securities placed
in their hands by Thatcher. The case was heard in this court at
the October term, 1877, and on December 17, 1877, the judgment of
the territorial supreme court was affirmed, and a mandate issued
for the execution of the judgment. On January 29, 1878, execution
issued on this judgment against Thatcher, and was levied upon the
lands in controversy in the present case as the property of the
defendant, and pursuant to that levy the premises were sold by the
sheriff of Arapahoe county, and were purchased by the appellee,
Lewis C. Thatcher, for the debt and interest, amounting to about
$3,850. A certificate of purchase was given to the appellee, and
thereafter, on November 25, 1878, a sheriff's deed was made to him
for the premises.
Prior to the affirmance of the Kaucher judgment in
this court, Samuel H. Thatcher, by warranty deed dated November
13, 1876, conveyed the premises in question to his brother, Lewis
C. Thatcher, who was then a resident of the city of St. Louis,
Mo., the consideration for the conveyance being the sum of $4,000,
for which the grantee executed to the grantor his two notes for
$2,000 each, payable two and three years from date of the sale.
The deed was duly recorded November 18, 1876, in the register's
office of the county.
On November 18, 1875, the complainant loaned to
Zella Glenmore the sum of $2,700 for one year, with interest at
the rate of 5 per cent. per month, payable monthly, for which she
executed a note, with Samuel H. Thatcher as her surety. This note
was secured by a chattel mortgage on the household furniture of
Zella Glenmore, worth from $5,000 to $6,000, and by a deed of
trust executed by Samuel H. Thatcher on 320 acres of land in
Douglass county, Colo., of the value of about $3,000. The interest
on this note appears to have been paid, except a portion of the
last month of the year during which the note had to run. At the
maturity of the note
[151 U.S. 271, 274] the complainant
seized the furniture covered by the chattel mortgage executed by
Zella Glenmore, for default in payment, and caused the same to be
sold at auction, realizing therefrom the net proceeds of
$1,519.43, which were applied upon the note. The complainant on
November 30, 1876, also caused the Douglass county lands owned by
Thatcher to be advertised and sold under the deed of trust, and
the same were bid in by the appellant for $320, and on December
27, 1877, he received a deed from the trustee conveying to him the
lands thus sold.
On November 25, 1876, the complainant commenced an
action in attachment against Thatcher and Zella Glenmore on the
note, and on July 23, 1877, he obtained judgment against Thatcher
for the sum of $2,170. The ground of this attachment was that
Samuel H. Thatcher had disposed of his property to defraud his
creditors. The attachment was levied upon the same property
covered by the conveyance of November 13, 1876, to the appellee,
and, after recovery of judgment in the attachment proceedings, it
was sold under special execution, and bid in by the appellant for
the sum of $1,800, of which sum $1,694.10 was paid over to or
applied on the complainant's debt. Thereafter, on July 19, 1878, a
sheriff's deed was duly executed to complainant for the premises
thus sold.
The complainant alleges in his bill that at the
time he conveyed the premises to his brother, Lewis C. Thatcher,
Samuel H. Thatcher was insolvent; that said conveyance was made
for the purpose of hindering, delaying, and defrauding his
creditors; and that it was without consideration, and therefore
void as against the complainant.
He further alleges that the urchase made of the
property in the name of Lewis C. Thatcher, under the Kaucher
execution, in January, 1878, was collusive and fraudulent as
between Samuel H. and Lewis C. Thatcher; that the $3,850 paid to
the sheriff at that sale, and in satisfaction of the judgment, was
the money of Samuel H. Thatcher; and that the conveyance made by
the sheriff to Lewis C. Thatcher was a part of the fraudulent
scheme on the part of Samuel H. Thatcher
[151 U.S. 271, 275]
to hinder, delay, and defraud the complainant in the
collection of his debt.
The answer denies all of these allegations of
fraud, and states that the purchase of the property by Lewis C.
from his brother was in good faith, without any knowledge or
notice on the part of the appellee that any fraud was intended;
that the consideration was a fair and reasonable one for the
property, and that it was duly paid; and that the notes executed
for the purchase money were paid and were taken up by him. The
answer also alleges that the defendant furnished the money with
which to purchase the property when sold under execution issued in
the Kaucher judgment.
Upon these questions testimony was taken on both
sides. Among other proofs introduced, the complainant examined the
appellee in his own behalf, or as his own witness, touching the
transactions and conveyances called in question. In this
examination, as a witness for the complainant, the appellee stated
that the purchase was made without notice of any fraud on the part
of his brother; that the negotiation leading to the purchase was
made partly through an attorney, (H. R. Hunt,) and that the notes
given for the consideration had been duly paid by him; that in
purchasing the property from his brother it was to be free and
clear from all incumbrances, and the deeds contained such
warranty; that he knew of the existence of the Kaucher judgment
before making the purchase and taking the conveyance; that he was
advised that that judgment, if affirmed, would not be a lien upon
the property, but it was understood and agreed between his brother
and himself that if the judgment should be affirmed, and thereby
become a lien on the property, then some provision should be made
for his protection against the lien. The question of the lien of
that judgment in case of its affirmance in the appellate courts
was a matter upon which there was a difference of opinion, and the
appellee testifies that in view of that uncertainty he forwarded
money to his brother from time to time, while the Kaucher suit was
pending, for the purpose of having it in readiness to meet the
judgment if it was a lien, and, in the event it was not a lien
upon [151 U.S. 271,
276] the property, the money could be used for the
payment of the two notes which Samuel H. Thatcher held against the
appellee for the original purchase money of the property.
When the Kaucher judgment was affirmed, and the
execution issued thereunder was levied upon the property, the
appellee directed that it be purchased in his name and for his
account; and the money which he had from time to time placed in
the hands of his brother for that purpose, amounting to about
$4,000, was applied in that way, to the extent of $3, 850, and
credited on his notes; the first one being surrendered by his
brother, and the second, which had been transferred by Samuel H.
Thatcher to A. Jacobs & Co., on which a partial payment had been
credited, was taken up and paid by the appellee.
It was clearly stated by the appellee that the
money he placed in the hands of his brother, Samuel H. Thatcher,
to be used to satisfy the Kaucher judgment, or to purchase the
property sold under the execution of that judgment, was to be
indorsed on the appellee's notes executed for the price of land,
if the funds were required to be and were so used.
It is further shown by the deputy sheriff who
levied upon and sold the lands in controversy under the Kaucher
judgment that Samuel H. Thatcher informed him, before the sale
under the execution took place, that his brother, the appellee,
would buy the property, and that Samuel H. Thatcher would bid for
the property for and in the name of his brother.
There is no testimony going to show that the value
of the property at the time of its purchase in November, 1876,
exceeded to any great extent the sum of $4,000. There was
testimony taken to show that six or eight years later the value
exceeded $4,000, but that during that period prices of real estate
in and around Denver had greatly advanced. It does not appear,
therefore, that there was any gross inadequacy in the price of the
property.
It further appears that the appellee took
possession of the property, through his agents, soon after its
purchase, and continuously thereafter paid taxes on the same.
The allegation of insolvency on the part of Samuel
H. [151 U.S. 271,
277] Thatcher at the time of the conveyance of the
property to his brother is not established by the proofs. The only
indebtedness of Samuel H. (aside from that of the complainant's
and of the Kaucher judgments) which is shown to have been in
existence in November, 1876, was a note for the sum of $1,000,
with a small amount of interest thereon, which he owed to Gray &
Eicholtz, of Denver, amounting in all to about $1,015. This
indebtedness was protected by a note of $1,350, made by Anna C.
McCormick, secured by a deed of trust upon 20 acres of valuable
land owned by her, and lying near the city of Denver. On his
indebtedness to Gray & Eicholtz, Samuel H. Thatcher, on November
15, 1876, paid the sum of $1,000, leaving but $15 due. Subject to
that balance of $15 this note for $1,350, owned by Samuel H.
Thatcher, was attached by the complainant under the attachment
proceedings above referred to, and was sold thereunder to the
complainant for the sum of $80, who, after paying Gray & Eicholtz
the balance of $15, enforced the deed of trust covering the 20
acres of land which secured the note, and, under the trustee's
sale, purchased the same on January 10, 1879, for $1,600.
The appellant credited Samuel H. Thatcher in this
transaction with only the sum of $80, which he bid for the note of
Anna C. McComick; and it is exceedingly doubtful whether the
proceeding to subject this note was sufficiently valid to have
divested Samuel H. Thatcher of his title thereto, or to confer a
title on the complainant, who cred ited the indebtedness of Samuel
H. Thatcher with only the sum of $80. It admits of a very grave
question whether the complainant should not have credited Samuel
H. Thatcher with the sum of $1,600, for which the land securing
the note was sold. If the complainant is chargeable with that
amount, and with the sum of $1,694.10, for which the property in
controversy was sold under his execution sale, then the judgment
of $2,170 has been more than satisfied, so that he would have no
equity in this case. But, without going into that question, it is
shown that every debt that Samuel H. Thatcher owed at the time of
the conveyance of the property to his brother in November, 1876,
was well secured. The complainant's debt of $2,700, for
[151 U.S. 271, 278]
which Samuel H. Thatcher was security, was secured by
property reasonably worth $8,000, while the debt to Kaucher, for
about the same amount, was secured by collaterals placed in the
hands of the sureties on the supersedeas bonds; and the remaining
debt to Gray & Eicholtz, of $1,015, was protected by ample
collateral in the shape of the Anna C. McCormick note of $1,350,
bearing interest at the rate of 20 per cent. per annum, ( which
was lawful under the laws of the territory of Colorado,) secured
by a deed of trust on 20 acres of valuable land, which at the
trustee's sale the complainant bid in for $1,600.
The appellant claims as a badge of fraud that on
January 11, 1878, Lewis C. Thatcher appointed his brother, Samuel
H. Thatcher, his attorney in fact. This instrument was duly
recorded January 29, 1878, and empowered Samuel H. to bargain,
sell, convey, or exchange for other lands and property all his
(Lewis C. Thatcher's) lands in the state of Colorado, and to
execute all deeds or other instruments in writing therefor; and
also to purchase and acquire by exchange other lands in that
state, such other lands to be acquired in the name of Lewis C.
Thatcher, and the title to be vested in him.
The proofs establish that Lewis C. Thatcher held
other lands in the state of Colorado to which this power of
attorney had application, as well as to the lands described in the
deed of November 13, 1876, from Samuel H. Thatcher to his brother,
the appellee. There is nothing in the fact of the execution of
this power of attorney, or in its provisions, to raise any
presumption of fraud in the original purchase.
The only proof introduced by the complainant
tending in the slightest degree to contradict the testimony of the
appellee was a loose conversation held between the appellant and
the appellee in February, 1879. This conversation, as stated by
the appellant in his testimony, in no way tends to establish fraud
in connection with the conveyance of November 13, 1876, as alleged
in the bill; and, besides, it is positively contradicted by the
appellee. The statements made by Samuel H. Thatcher in 1878 to his
sureties on the supersedeas bonds,
[151 U.S. 271, 279] and to the deputy
sheriff of Arapahoe county, tending to show that he entertained a
strong dislike for the appellant, and was disposed to obstruct the
collection of his judgment, are not sufficient to show fraud, even
on the part of Samuel H. Thatcher; but, having been made in the
absence of Lewis C. Thatcher, and long after the date of the
conveyance, they were clearly incompetent as against the appellee.
It is claimed for the appellee that as the
appellant called and examined him as a witness touching the
conveyance of November, 1876, and the consideration therefor, and
of the payment of that consideration, he thereby represented him
as worthy of belief, and cannot impeach or impugn his credit, or
his general character for truth, under the authorities. 1 Greenl.
Ev. 442; Jones v. People, 2 Colo. 356. Without going into the
question as to how far, or to what extent, if any, the appellant
was concluded from impeaching the credit of the appellee, after
having introduced and examined him as a witness touching the
matters in question, it is sufficient to say, in this case, that
the testimony of the appellee has not been contradicted in any
substantial or material respect; and, treating it as worthy of
belief, and uncontradicted by any independent proof, it
establishes that the purchase from his brother of the lands in
question was free from fraud. The testimony, taken as a whole,
falls far short of establishing the allegation of the bill that
the conveyance of November 13, 1876, was made for the purpose of
hindering, delaying, or defrauding the complainant or the
creditors of the grantor.
The relationship of the parties does not, of and
in itself, cast suspicion upon the transaction, or create such a
prima facie presumption against its validity as would require the
court to hold it to be invalid without proof that there was fraud
on the part of the grantor, participated in by the grantee. This
proposition is so well settled that authorities need not be cited
in its support.
But, again, the statute of Colorado on the subject
of liens (1862) in force at the time of these transactions
provided that judgments should be a lien on the judgment
creditor's real estate, not exempt from execution, owned by him at
the time, [151 U.S.
271, 280] until the lien expires; and 'the lien shall
continue for six years from the entry of the judgment, unless the
judgment shall be previously satisfied: provided, that execution
be issued at any time within one year on such judgment; and from
and after the said six years the same shall cease to be a lien on
any real estate as against a bona fide purchaser, or subsequent
incumbrance by mortgage, judgment, or otherwise: provided, that in
case the party in whose favor any such judgment shall have been
entered shall be restrained by injunction out of chancery or order
of any judge or court, either from issuing execution or selling
thereon, the time which he shall be so restrained shall not be
deemed or considered as any part of said six years.'
By the first section of the act of February 13,
1874, it is provided that 'when a judgment shall be rendered in
any district or probate court of this territory, the clerk of such
district court or the probate judge, shall, upon demand, give to
the plaintiff, his agent or attorney, an abstract thereof, setting
forth the name or names of plaintiff or plaintiffs, and defendant
or defendants, in full, the title of the court, the date when the
judgment was rendered, and the amount of the same, with damages
and costs, which shall be signed by such clerk or probate judge,
and attested by the seal of the court; and when so executed, such
abstract may be filed for record in the office of the clerk and
recorder of the county where such judgment is rendered, or in any
county in the territory, and from the date of such filing, and not
before, such judgment shall become a lien upon all the real estate
of defendant in the county where such abstract may be recorded,
and not until such abstract shall be so filed, nor in any county
other than the one in which so filed.'
The Kaucher judgment having been filed for record,
and having been recorded, as required by this section, the lien
upon the real estate of Samuel H. Thatcher, in controversy in this
suit, attached at once, as held in McFarran v. Knox, 5 Colo. 220.
But the execution was not issued within a year
from the rendition of the judgment, for the reason that it was
superseded [151 U.S.
271, 281] by the order of the district court and of
the supreme court, by the allowance of the supersedeas bonds,
which suspended all proceedings under the judgment. This
suspension of the proceedings comes fairly within the proviso of
the act of 1862, above quoted, and the execution, after the
affirmance of the Kaucher judgment by this court, having been
issued within a year from the date of its affirmance and within
six years from the date of the judgment, gives the lien of that
judgment priority over the complainant's attachment and judgment,
so that the sale made under the Kaucher execution conveyed a
superior title to that which the complainant acquired either by
his attachment or by his execution, levy, and sale.
It is clearly established, as we think, that Lewis
C. Thatcher furnished the money to pay off the Kaucher judgment,
or to purchase the property sold under the execution issued
thereon; that Samuel H. Thatcher acted only as his agent in making
the purchase, and in paying over the money to the sheriff; and
that the sheriff of Arapahoe county was so informed before that
execution sale was made. Under these circumstances, and in the
absence of any fraudulent collusion on the part of Samuel H.
Thatcher and Lewis C. Thatcher in the transaction, we think that
Lewis C. acquired a title to the property superior to that which
complainant acquired under his attachment and execution sale; and
that the complainant cannot, even as an unsatisfied creditor of
Samuel H. Thatcher, successfully attack this purchase of Lewis C.
Thatcher on the ground of fraud or of bad faith on the part of the
appellee.
Now, without going into the equitable
considerations set up in the second amended answer, which induced
the court below to consider that the complainant could not enforce
his judgment against the appellee, (34 Fed. 435,) we are satisfied
that the proofs fail to establish that the transactions by which
Lewis C. acquired the property in controversy were fraudulent, as
alleged, and that the complainant is not entitled to have the
conveyances made to the appellee, either by Samuel H. Thatcher or
by the sheriff of Arapahoe county, set aside.
The judgment of the court below is therefore
affirmed.
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