Montgomery v. McDermott

103 F. 801, 43 C.C.A. 348, 1900 U.S. App. LEXIS 3795
CourtCourt of Appeals for the Second Circuit
DecidedJuly 25, 1900
DocketNos. 163, 164
StatusPublished

This text of 103 F. 801 (Montgomery v. McDermott) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Montgomery v. McDermott, 103 F. 801, 43 C.C.A. 348, 1900 U.S. App. LEXIS 3795 (2d Cir. 1900).

Opinion

LACOMBE, Circuit Judge

(after stating the facts as above). From 1871 to 1875 James McHenry became indebted to the law firm of Barlow, Larocque & MacFarland in a very considerable sum for profession[803]*803al services, and also to Samuel L. M. Barlow for services rendered in 1872 and 1873 in the purchase of a large amount of railroad shares. These claims were assigned to the complainant, Montgomery, in December, 1886. They are the subject of suit No. 1. McHenry also became indebted, April 5,1873, to Charles Day, in a considerable sum, on account of certain Atlantic & Great Western Kailroad bonds. This claim, also, was assigned to Montgomery in December, 188(5, and is the subject of suit Ko. 2. Montgomery brought two actions at law on these claims in the state court immediately after these assignments, and upon showing to (he court that McHenry was a citizen of Pennsylvania, and a nonresident domiciled in England, obtained warrants of attachment against his property. McHenry appeared in both actions, and removed them into this court, where issue was finally joined in March, 1889. McHenry died in England May 26, 1891, leaving a will appointing the defendants McDermott and Boyd executors. They have never taken out, or caused to be taken out, letters of administration in this jurisdiction, wherefore no further proceedings were taken in the actions at law.

Before discussing the manner in which the sheriff served the warrants of attachment in these two actions, — which service, complainant c'aims, fastened a lien upon some property of McHenry. — it will be necessary to rehearse a series of events preceding the beginning ol‘ Montgomery’s two actions in the state court, and, indeed, preceding the assignments of Barlow’s and Day’s claims to him: On October 2, .1871, McHenry and one Thomas William Kennard, as parties of the first and second parts, the defendant Bischoff'sheim, as party of the third part, and Messrs. Barlow and Day, as pajiles of (he fourth part, executed a certain indenture of trust. Thereby, or by conveyances made in advance for the purposes of the trust, McHenry and Kennard assigned, transferred, and set o-ver to Barlow and Day, as trustees, certain “freeholds and leasehold hereditaments, stocks, funds, shares, and securities, and all other the real and personal estate specified in the schedule to [such indenture] annexed.” The schedules do not appear in the record, nor is the property more particularly described; but from the phraseology of ihe indenture, which refers to the property as “conveyed and assigned * * * by the said James McHenry and Thomas William Kennard, or one of them,” it may fairly be inferred that part of it was the joint or common property of the two, part the individual property of the one, and part the individual property of the other. Its value appears to have been considerable. The indenture recites that there was due by McHenry and Kennard to Bischolfsheim upwards of £53,000, and that prior to the incurring of such indebtedness it had been agreed between the three of them that the property enumerated in tlie schedules should be vested in the trustees as provided for in the deed. A further recital declares that “these presents shall extend to and he a serarity for any moneys hereafter advanced to the trustees by Bischoffshoim, or his firm, with interest.” Tiie trust deed is a voluminous document, but the following brief summary will sufficiently indicate its provisions. So long as there shall be due to Bischoffsheim, or his firm, any money on account of the original debt of £53,000, or on account of advances to the [804]*804trustees (which advances are for the purpose of paying off incumbrances on the trust premises, and taxes, charges, expenses, etc., thereon), the trustees, upon his request, “shall sell the said trust premises, or any part and so much thereof as may be necessary, to repay” the same. For the same purpose — viz. the repayment of Bischoffsheim or his firm — the trustees are authorized to borrow such sums as may be necessary, and pledge and mortgage the trust premises for the payment. In order to adjust the respective interests of the parties, it is further provided that the value of all of said lands and trust premises shall be represented by 400 shares or certificates, each representing the nominal sum or value of $5,000. The form of certificate is set forth in the trust deed. It is to be signed by the trustees, and states upon its face that it “has been issued to-, of-, who, and those to whom it shall be transferred, shall be deemed the owners thereof.” After a reference to the trust deed, the certificate proceeds: “The owner hereof is entitled to receive, subject and according to the provisions of said deed, one equal four-hundredth part of the net rents, issues, revenues, and profits, howsoever arising, according to the provisions of the said deed, and subject to the debts and obligations therein referred to. This certificate is to be held and construed in all courts and places as personal property, and cannot be sold” or transferred except in accordance with the provisions of said deed. The deed calls for an original division of these certificates, — ■ 150 to McHenry, 150 to Kennard, and 100 to Bischoffsheim. Elaborate provision is made for fixing a conventional value for the shares, and changing it from time to time; and the original distributees, and those to whom any shares may have been assigned, are forbidden to sell or transfer any shares until such shares shall first have been offered to the owners of the then remaining certificates at such conventional value. There are similar provisions applicable in the event of the decease or bankruptcy of any certificate holder. The trustees are to keep an office and transfer books, and all other necessary books, and to send every six months to each certificate holder an account and balance sheet showing their transactions for the previous six months, and once in each year a report of the estimated value of the several properties unsold, with the specific charges remaining thereon. By the sixth and seventh clauses of the deed the trustees are given “full and exclusive control and supervision of and over the said lands, property, and premises; * * * to sell and dispose of the same and any part thereof” for cash or on credit or in exchange; and to deal with and concerning the same, in all things, as freely, and according to their own discretion and will, as if they were seised and possessed thereof in their own right. Should, however, three-fourths in number and amount of the certificate holders give specific directions in writing as to such sale or disposition, the trustees shall conform to such directions. After paying all charges and expenses, including their own compensation, the trustees shall from time to time account for and pay over the balance then remaining of the proceeds, moneys, rents, issues, revenues, and profits, — one equal four-hundredth part to each of the holders and owners for each of the certificates by them respectively held. Whenever thereunto required by the owners of [805]*805at least three-fourths in number and value of the certificates, the trustees shall convey and assign the lands, premises, and property, or such portion of the same as may then remain unsold, and pay over the balance of moneys and other properties remaining in their hands “to the holders for the time being of said certificates, pro rata, and according to the number and value of said certificates by them respectively held.” Provision is made for the appointment of new trastees in place of such as may die, resign, or be removed. Incidentally it may be stated that Barlow and Day, the original trustees, died in July and August, 1889, respectively.

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Bluebook (online)
103 F. 801, 43 C.C.A. 348, 1900 U.S. App. LEXIS 3795, Counsel Stack Legal Research, https://law.counselstack.com/opinion/montgomery-v-mcdermott-ca2-1900.