Earle v. McCartney

109 F. 13, 1901 U.S. App. LEXIS 4760

• Court: U.S. Circuit Court for the District of Eastern Pennsylvania
• Decided: June 10, 1901
• Docket: No. 1
• Status: Published

Opinion

J. B. McPHERSON, District Judge.

In view of the very careful and satisfactory report of the learned master,' an elaborate discussion of the exceptions seems unnecessary. I have considered them all in connection with the testimony, and with the written and oral arguments of counsel, by which I have been much helped in coming at once to the points in dispute; but I am'unable to sustain more than one of the respondent’s positions, namely, the objection to the calculation of interest.

The principal dispute concerns the validity of the papers executed by Mr. gingerly on February 10, 1808. These are attacked on four grounds: insanity of the decedent, duress, fraudulent intent to hinder and delay creditors, and failure to record within the statutory period. There is no evidence to sustain the allegation of duress, and very little more — certainly much less than is needed — to sustain the allegation of a fraudulent intent i.o delay and hinder other creditors. Upon the issue of bisanity, evidence was offered that, no doubt, called upon the complainant for a reply; but the reply was amply sufficient, and I agree fully with the master in finding that Mr. gingerly was sane at the time the assignments were executed. Within several months preceding his death, his habits were undeniably had. Re drank heavily on several occasions, and probably drank in smaller quantities at more frequent intervals; but the evidence that he was competent to attend to business, that he was actually attending to a varied and complicated business during most of that period, and that he was always fit to attend to it when he was sober, is overwhelming. Failure to record would, of course, be fatal, if the paper now in question was equivalent to a general assignment for the benefit of creditors; but, in my opinion, it was a transaction of a different kind, namely, a direct transfer to certain creditors themselves of securities by which the decedent desired them to profit. The receiver should be regarded as the direct representative of the creditors for the purpose of taking these bonds and stocks.

With regard lo the Utkins and Widener stocks, I think it need only be said that no good ground appears for objecting to a transaction that undoubtedly prevented the sacrifice of valuable assets belonging to Mr. Singeiiy's estate, and resulted in the pledge of these assets as security for his own debt, especially when it is considered that he intended these very assets to stand as an ultimate security for this very debt. The form of the transaction may, perhaps, permit a more or less plausible attack to be made upon technical grounds; but, in substauc-e, what was done was fair and equitable, and, as I think, beyond successful objection.

The jurisdiction of this court is, I think, scarcely open to dispute. I shall add nothing to what the master has said upon this subject.

I am asked, also, to grant an issue to try before a jury the questions whether the papers of February 10 th were executed for the purpose of delaying and hindering creditors, and whether at the time of their execution Mr. Singerly was of unsound mind, or was acting under duress. These questions have been fully heard before the master, and have now been considered by the court. I see no advantage to be gained by going over the ground again, especially in view of the fact that, if the finding should be against the validity of the papers, I should not feel at liberty to follow it. The application for an issue is accordingly refused.

I think, therefore, that the prayers of the bill and the cross bill should be granted, and that the bonds and stocks should he sold. A decree may be drawn accordingly, and after a sale has taken place the fund produced thereby will be distributed. Upon the distribution the questions of interest and costs will be more properly raised, but I may perhaps say now that at present I am of the opinion that interest should not he computed to October 1, 1900, upon the complainant’s claims, since such calculation would result in compounding the interest from that date.