Hayden v. Thrasher

20 Fla. 715

Opinion

The Chief-Justice delivered the opinion of the court.

This suit was commenced in Alachua county by appellant against B. II. Thrasher and others for the purpose of compelling them to protect him against certain notes which he had indorsed at their request. The case was here on appeal at the January term, 1882, and some of the principal allegations of the bill are stated in 18 Fla., 795. B. H. and E. W. Thrasher have died since the commencement of the suit.

The cause now comes up on appeal from a decree dissolving the injunction which had been granted against B. II. and E. ~W. Thrasher, Dickenson and Means, forbidding the transfer of property alleged to have been purchased with the proceeds of the notes. The injunction was dissolved upon the answers of B. II. Thrasher, Dickenson and Knox, administrator of E. W. Thrasher.

B. H. Thrasher denies, seriatim, nearly eveiy allegation of the hill. lie denies that Hayden indorsed the notes at his request, and that he ever had any conversation with him on the subject; denies that he represented that the real estate in Georgia conveyed to secure Hayden was unincumbered, or that the parties were solvent,orthat the indorsement was pro cured for the purpose of raising funds for the purpose of going to Florida, or for the purpose of division among his father and brothers, and generally denies all fraud in the matter, lie says that he borrowed two of the notes for $4,500 or $5,000, indorsed by Ilayden from his father, E. W. Thrasher, and used them in paying G-. W. Means for an undivided half of 110 acres of land, to wit: $5,000, taking title to the land in the name of himself as trustee for his wife, and that he bought from S. C. Means the other undivided half of the land for $5,000, paying therefor $4,000 out of proceeds of property held by him in trust for his Avife and $1,000 out of the proceeds of a portion of the property purchased which he sold. What property he had held as trustee for his wife, or how he obtained it, is not stated. He says that his father received from Albert M. Thrasher two of the notes “ in settlement of theik business affairs.” As to the lot on which his house was built he says that “ as trustee he did have in possession and under his control ample means to purchase the Cannon lot referred to in complainant’s bill and to build a residence thereon, and defendant alleges that said Cannon lot and the residence thereon Avere purchased and built with the funds he held as trustee.”

Right here we compare with this the statement of W. A. Dickenson, in his answer. He says: “In or about September, 1878, B. H. Thrasher, as trustee, procured this defendant to purchase the Cannon lot for him and in a short time thereafter, to Avit: in November, 1878, engaged this defendant to advance money to build the house that is now being built upon the lot; the said- B. H. Thrasher securing this defendant for the purchase of the lot and the furnishing the money for the building of the house, and all this was a finished bargain and contract long before the purchase of the Means land was mentioned,” and the deed was taken in Dickenson’s name “ until he was made safe for the money to be advanced, and this defendant was made perfectly safe long before the five acre trade was mentioned or thought of.” This inconsistency is not explained. Thrasher also answers that he, as trustee, borrowed the two notes from his father, as trustee, to pay to Means for the land, and gave to his father as trustee a mortgage on the same to secure the loan amounting to “ $4,500 or $5,-000.”

Dickenson says in his answer that he bought of B. H. Thrasher five acres of the 110 acres procured from Means, being the same five acres on which Means had a residence, and an orange grove, to wit: on the third day of January, 1879, aud at the same time a mortgage held by Thrasher, trustee, against Meaus, was transferred to Dickenson, and that the consideration was $6,500. This transaction occurred on the very next day after the dissolution of an injunction obtained by one Freyer against B. TI. Thrasher in a suit brought by Freyer to secure one of the notes indorsed by Hayden, out of the same property. Dickenson says he knew nothing of that suit or injunction, but the fact remains that Thrasher knew of it aud hastened to transfer the property to Dickenson the moment Freyer’s injunction was dissolved. Though Dickenson says, the purchase by him of the five acres was made “ in good faith and for a valuable consideration,” he omits to state that he paid the consideration or any part of it then or at any other time.

Dickenson also says the mortgage held by E. W. Thrasher, trustee, against B. H. Thrasher, trustee, covering this property, to secure E. W. Thrasher, trustee, for the two notes of “$4,500 or $5,000” borrowed of him by B. H. Thrasher, trustee, was transferred to him, Dickenson, by E. W. Thrasher “ for a valuable consideration, and in the regular course of trade ” ; but Dickenson again omits to say what the consideration was, or that lie paid any consideration for this mortgage then or at any other time.

In a proceeding against ¥m. M. Knox, as for a contempt of the injunction herein granted, Knox, who is now a party to this suit, as administrator of E. W. Thrasher, deceased, states on oath that “ he made a contract with Dickenson for the purchase of the five acres referred to in said petition, and although he paid the entire purchase price he only took from W. A. Dickenson a bond for title,” and he “ submits that in making said purchase he could in no manner be charged with any contempt of court, he was not a party in 2Krson to the bill of complaiut and had no desire or intention of placing the property beyond the reach of the complainant, Hayden, should he finally succeed in his suit.” How much Knox agreed to pay or how much he paid to Dickenson or to any other person for this orauge grove and residence he does not state, and Dickenson omits to state anything about this sale of the property to Knox, who is a brother-in-law to B. H. Thrasher. From this statement, if it is true, it would have been appropriate, perhaps, to have inquired of Dickenson why he sold and gave possession of the property to Knox while he himself was aware of the injunction, it having been served on him very soon after the filing of this bill, expressly forbidding him to do so.

As to the denial of B. II. Thrasher that he obtained the indorsement of Hayden upon the six promissory notes, one for $2,000 and five for $2,500 each, amounting to $14,500, and that these notes were distributed among his father, brothers -and himself, he admits that he was present when the notes were indorsed, at Atlanta, Ga., in his office. That then and there his brother, A. M. Thrasher, and himself indorsed them and then complainant indorsed and left the notes with A. M. Thrasher. And he denies that the notes were so procured to be indorsed with the view .of going to Florida and there using the proceeds obtained upon the credit of the complainant’s said indorsement. Tie denies that he had any conversation with complainant at any time on the subject of the iudorsément of the notes and that he was in any way concerned in the matter of the disposition or negotiation of the notes: Yet he says that at the time of the indorsement of the notes “ he did honestly intend that said notes should be paid at maturity and that the complainant should be held harmless in the premises.” And he says further that he “borrowed ” two of these notes from Early ~W. Thrasher, and that the latter had received them from his brother, A. M. Thrasher, “ in settlement of their business affairs, and the transfer was made for a then valuable and present consideration,” the actual consideration not stated. He used these two notes in paying Geo. W. Means for his undivided half of the 110 acres of land.

Means, in his answer, says the most of the $5,000 consideration for this land was realized out of these two notes.

Upon the hearing of the motion to dissolve'the injunction certain affidavits were used by complainant in support of the allegations of his bill, and these affidavits were admitted by the Chancellor.

The affidavit of S. D. McConnell states that he met B. H. Thrasher in Atlanta, who had just returned from Florida, before the maturity of the notes, and Thrasher asked deponent to aid him in getting certain notes discounted, which notes were indorsed by complainant, and exhibited some of the notes described in the bill, and deponent knew of Thrasher’s getting two of the notes discounted and soon afterward returning to Florida. F. L. Freyer swears that in February, 1876, B. H. Thrasher gave him a note of $2,000, signed by W. L. Thrasher and indorsed by B. H. and A. M. Thrasher and J. A. Hayden, dated June 2,1875, due 18 months after date, in exchange fora note Freyer held against G. W. Means, which last mentioned note was used by B. IT. Thrasher in paying for land he had bought of S. C. and Geo. W. Means; and deponent, after the $2,000 note became due, sued Hayden and recovered judgmeut thereon for $2,800, which Hayden paid. B. E. Anderson, B. H. Over-by and E. Heyser swear that they had known Early W. Thrasher and Barton IT. Thrasher where they had resided in Georgia, and that they were insolvent, and judgments obtained before their departure in 1875 and executions against them remain unsatisfied. E. Heyser, Clerk of the Superior Court of Morgan county, where Early W. Thrasher resided, certifies on oath that an examination of the records fails to show that the wife of E W. Thrasher had any separate estate. Geo. H. Wagnow swears that he knew E. "W. and B. H. Thrasher in Georgia; that E. W. Thrasher was supposed to he insolvent, and that he and his family “ mysteriously disappeared from their home in Georgia in the night time in the fall or winter of 1875.”

Thomas Lamins swears that he has known E. W. and B. H. Thrasher for some years, and that to the best of his knowledge and belief the wife of B. H. Thrasher, when he married her, had very little, if any, property, that she was poor and was educated mainly by Early W". Thrasher.

It appears that the Thrashers left Georgia and came to Florida soon after the making and indorsing of the notes in question. They bought valuable property which they paid for with money and with the notes, taking titles in themselves as “ trustees for their wives and children,” and taking and executing mortgages between themselves as such “ trustees.” The notes seem to have been distributed between them and “borrowed” by one of the indorsers for the purpose of buying property with them. Dickenson appears to be the instrument of B. H. Thrasher in holding, buying and selling the property and securities acquired by B. H. Thrasher, trustee. Knox, the brother-in-law, (now the administrator of the estate of E. W. Thrasher) not being personally a party to the suit, steps in and buys some of the property held by Dickenson, and Dickenson, disregarding the injunction, sells the property to Knox “in the regular course of business” or “trade” and is paid a “ valuable consideration,” but in all this apparent shuffling and dealing they are all careful to avoid stating frankly what was the consideration, and how and when it was paid.

The whole tenor of the answers of B. H. Thrasher, Dickenson and Knox go very far toward establishing the truth of the allegations of the bill, that the indorsements of Hayden were procured by the Thrashers for the purpose of raising money for their own use with no intention of protecting him on the part of the Thrashers, and that Dickenson is aiding them in obstructing complainant’s efforts to follow the property. Possibly his conduct can be explained but as the ease stauds it requires explanation which is not furnished by the answers.

The auswer of B. IT. Thrasher is a series of denials, and simply denials of allegations in the bill, and nothing is explained. He does not deny the charge of insolvency of himself, or his father, nor show that his wife had any property or estate of any kind, on coming to Florida,or that he held any as her trustee, which was not the very proceeds of these notes. Her poverty is -prima facie shown by the affidavits of people who had known the family long before they came to Florida.

Hpon this state of the case the Chancellor dissolved the injunction. We have not sought to show from the record as it now stands that the complainant is entitled to a decree against these parties or either of them, but to show that enough appears in behalf of the complainant and against the. principal defendants, from the hill and affidavits and from the answers of the defendants, to forbid the dissolution of the injunction.

The court, in Carter vs. Bennett, 6 Fla., 214, 236, remark that it is the general practice that if the answer denies fully all the circumstances upon which the equity is founded, credit is given to the answer and the injunction dissolved ; but that it is not of course to dissolve the writ, and there are exceptions quite as important as the rule itself.

Chancellor Kent, in Roberts vs. Anderson, 2 John. Ch.., 204, says: “ The fraud as charged, is a proper and familiar head of equity jurisdiction, and unless the answer be full and satisfactory, the injunction, if right in the first instance, ought to be retained until the hearing. * * All the denial contained in the answer is that t}ie defendants were not privy to any fraud, and were bona fide purchasers under a judgment aud execution. * * * This is leaving the question of fraud as unsettled as before the answer came in. * "* * The case does not fall within the reason of. the general rule that an injunction is to be dissolved when an answer comes in and denies all the .equity of the bill. The granting and continuing of the process must always rest in sound discretion, to be governed by the nature of the case.”

Judicial discretion should be exercised in furtherance of justice. A dissolution of the injunction in this case puts it within the power of the defendants to deprive the complainants of all remedy, though it should appear when testimony is taken that by the fraud of some of the parties he loses a very large amount of money aud the answer was a sham. It appears by the pleadings in this case that on the day after the dissolution of an injunction obtained by Freyer, in proceedings had for the purpose of securing one of these notes, the orange grove property passed into the hands of Dickenson, who says he did not know when buying it of Thrasher that any litigation had existed respecting it. And it also appears by the answer of Knox, the administrator and son-in-law of E. W. Thrasher, (who in his life time had been served with the injunction,) that he had bought the same property from Dickenson and paid for it while Dickenson had been enjoined from doing the very act. And Knox also says he was innocent and ignorant of the existence of the injunction which Dickenson had violated. We submit that in view of the character ot the bill in. this ease, and the admissions of the defendants, Dickenson and B. H. Thrasher, and the response of Knox in the matter of the contempt, the answers do not deny all the equities of the bill and that sound discretion requires that the injunction shall be continued until a final bearing.

Respondents urge that the complainant had been guilty of laches in the prosecution of the suit. Since the commencement of this suit two of the principal defendants have died ; the cause has been once dismissed and reinstated on appeal of this court; the Judge of the Gircuit died, and his successor was disqualified to act; a change of venue became necessary and the cause was sent to another circuit, and on defendant’s motion the injunction was dissolved, rendering another appeal necessary. Under the circumstances we do not think the question of laches should be suggested.

The decree dissolving the injunction must be reversed. As to the appointment of a receiver, the necessity of it must be left to the judgment of the Chancellor upon a further hearing.