which are as matter of fact so very wrong that the doers may not escape the charge of fraud upon the law, although they were individually innocent of wicked design, or ignorant of the consequences experience has shown to be inherent in their actions, or both. It must therefore be found that on the admitted facts the Volence mortgages were, as to the stock sold, not only invalid, but void ab initio, and when this finding is once made the language of Woodruff, J., in Russell v. Winne, supra (37 N. Y. 596, 97 Am. Dec. 755), is applicable: "I think it entirely settled that, if a mortgage be one which, by reason of the fraudulent purpose and intent with which it is executed, is declared void by the statute, it is wholly void, notwithstanding it may include property as to which it would be valid if it could be regarded as a mortgage of that only. To speak more clearly, if a mortgage be given with the fraudulent intent to cover up and conceal from creditors a portion of the debtor's property, it is altogether void, notwithstanding it also includes land or other property in relation to which there is a bona fide intent to convey it as security for an honest debt, and no other purpose and intent. A mortgage, void in part as a violation of the statute, is void altogether." No difference is perceived between a result produced by statute and one by general law as declared in decisions of authority. The doctrine of the case heretofore cited and relied upon is reasserted in Brackett v. Harvey, 91 N. Y. 214, which case has special reference to agreements for sale by mortgagor, not contained in the mortgage instrument itself, but resting in parol. The case as presented seems a hard one for this mortgagee, who has certainly diminished expenses by the method pursued in respect of the sale of the property. The finding of the special master is set aside, and an order may be entered in accordance with this opinion. There will be no costs. KIRKPATRICK v. JOHNSON. (District Court, S. E. D. Pennsylvania. June 18, 1912.) No. 2. BANKRUPTCY (§ 179*)—FRAUDULENT TRANSFER OF PROPERTY-RECOVERY BY TRUSTEE. A trustee in bankruptcy may recover from the wife of the bankrupt, as property transferred in fraud of his creditors, a life insurance policy having a cash surrender value which the bankrupt transferred to her without her knowledge and without consideration while insolvent, and the effect of which transfer was to hinder, delay, and defraud creditors who remained such until the bankruptcy. [Ed. Note.-For other cases, see Bankruptcy, Cent. Dig. § 272; Dec. Dig. § 179.*] In Equity. Suit by William H. Kirkpatrick, trustee in bankruptcy of Harry K. Johnson, against Henrietta B. Johnson. On final hearing. Decree for complainant. Kirkpatrick & Maxwell, of Easton, Pa., for complainant. James W. Fox and Robert A. Stotz, both of Easton, Pa., for defendant. For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes J. B. MCPHERSON, Circuit Judge. On April 25, 1911, Harry K. Johnson was adjudged bankrupt, and on May 6th the plaintiff qualified as trustee. He seeks by this suit to perfect his claim to a policy of life insurance, now in the defendant's possession, in order that he may realize its surrender value for the benefit of the estate. Without discussing the evidence that supports them, I state my findings of fact as follows: On December 27, 1900, the bankrupt took out a 20-year term, $10,000, policy of life insurance in the Equitable Life Assurance Society of New York, in favor of Osborne H. Snyder, who was then his partner; or, if Snyder should die first, then in favor of the bankrupt's executors, administrators, or assigns. The policy expressly reserved the right of the assured to change the beneficiary, and accordingly, on June 9, 1908, he, substituted his own executors, administrators, or assigns in place of Snyder. No other change of beneficiary has since been made, but on June 10, 1910, the policy having then a cash surrender value of $1,300, which the insurance company was bound to pay to the bankrupt on demand, he transferred the policy to his wife, the present defendant, by an assignment in writing. She knew nothing about the transaction until after the bankruptcy. He was insolvent in June, and continuously thereafter until the date of adjudication. There was no consideration for the assignment, and no agreement between his wife and himself in relation thereto. He knew that he was in financial difficulties, and both the intent and the effect of the transaction were to hinder, delay, and defraud the bankrupt's creditors then existing. Among these creditors was the Converse Rubber Shoe Company, to whom he remained indebted continuously in large and varying amounts until the date of adjudication; the shoe company being then his only creditor. Between June 10, 1910, and April 25, 1911, the bankrupt paid the further sum of $772.50 to the insurance company, being premiums for three years upon the policy, one premium of $257.50 being due on November 21, 1910, and the other two premiums being paid unnecessarily in advance. These payments were made for the benefit of his wife, without her knowledge and without consideration, and both their intent and their effect were also to hinder, delay, and defraud the bankrupt's creditors then existing. When the trustee qualified, the policy had a cash surrender value of $1,760, and the insurance company was bound to pay that sum to the person legally entitled thereto. It would not be easy to improve on the clear, concise, and cogent argument in favor of the trustee, and indeed the defendant does not seriously controvert it, except upon one point, namely, the fact of the bankrupt's insolvency in June, 1910. On this matter, however, the evidence is I think plainly in favor of the trustee, and I have already found the fact against the defendant. Little remains to be said if the facts have been correctly found, for the legal questions scarcely admit of dispute. This was a voluntary transfer of property, without consideration, by an insolvent man, and he must be held to have in tended the natural cònsequences of his act. In my opinion the assignment cannot be sustained, and the trustee is entitled to the relief prayed for. A decree may be entered in accordance with the bill. LIEF. MATHEWS v. WAYNE JUNCTION TRUST CO. (District Court, E. D. Pennsylvania. June 24, 1912.) CONTRACTS (§ 138*)-FRAUDULENT TRANSACTION-PROOF IN REBUTTAL-REA certificate of deposit and an ordinary collateral note being involved in a fraudulent transaction between a life insurance company and de fendant trust company, plaintiff, as receiver of the insurance com pany, sued on the certificate, which, being innocent on its face, was suff cient to establish a prima facie case. Defendant thereupon put in evidence the ordinary collateral note, accompanied by a contract in wriing, also regular and innocent on its face, which completely answered plaintiff's prima facie evidence, whereupon he was compelled in rebuttal to prove the fraudulent transaction. Held, that plaintiff could not recover without calling on the fraud for help, and hence relief would be denied. [Ed. Note. For other cases, see Contracts, Cent. Dig. §§ 681-700; Dec. Dig. § 138.*] At Law. Action by Charles H. Mathews, as receiver of the Union National Life Insurance Company, against the Wayne Junction Trust Company. On motion for new trial. Denied. Alfred I. Phillips and Dimner Beeber, both of Philadelphia, Pa., for plaintiff. J. W. Bayard and J. G. Johnson, both of Philadelphia, Pa., for defendant. J. B. MCPHERSON, Circuit Judge. In harmony with the authorities, it is agreed by both parties that neither a plaintiff nor a defendant may found his case, either in whole or in part, upon a fraudulent transaction, although his antagonist may have participated therein. It is no doubt true that, although both may have joined in the fraud, a plaintiff may nevertheless recover if he is able to make out his case without calling upon the fraud for help; but he must fail if such help is indispensable. In the present dispute the plaintiff is receiver of the insurance company that was party to the fraud in question, and it is obvious I think that, although to some extent he may be the representative of creditors, he must accept the consequences of the undeniable fact that the company did participate in the fraudulent transaction. Whatever burden that fact imposes, he must of necessity bear; otherwise, his appointment would in effect transform the fraud into an innocent agreement, thus making a new contract between the company and the defendant. The case now under examination differs from *For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes the situation usually presented only in the fact that the plaintiff did not encounter the need of disclosing the fraud until the rebuttal stage of the trial. He put in evidence the trust company's certificate of deposit, regular and innocent upon its face, and, having thus made out a prima facie case, awaited the defense. Thereupon the trust company put in evidence an ordinary collateral note, accompanied by a contract in writing, also regular and innocent upon its face, and these papers answered completely the plaintiff's prima facie evidence. Up to this point no fraud had appeared, and if the case had gone to the jury at that stage the plaintiff could not have recovered. He was therefore compelled to turn in rebuttal to the fraudulent transaction, and for the first time that transaction was brought into the controversy. I thought at the trial, and after argument and further reflection I still think, that the rule of law referred to bound the plaintiff as much at that stage of the cause as it would have bound him if he had offered to prove the fraud as part of his case in chief. A prima facie case had been presented, to which a complete prima facie defense had been interposed. In effect, therefore, the plaintiff was bound to begin again, and to show a new reason why he should be allowed to recover. But in order to show it he was compelled to disclose a fraud to which his principal and the defendant had both been parties, and this, as it seems to me, he could not be permitted to do. A court of justice will lend no aid to either party to such a transaction. It may be added that the fraud did not succeed, and that the plaintiff's failure to recover will simply leave the parties where they were. The collateral deposited with the note has probably no value whatever; but, even if it has, the defendant may easily be compelled to surrender it to the plaintiff for the benefit of the insurance company or the creditors. It will no doubt be voluntarily handed over. The motion is refused. BROWN V. GREENFIELD CONGREGATIONAL SOCIETY et al. No. 1,362. 1. BASEMENTS (§ 19*)-VIEW--RIGHTS ACQUIRED. Where the proprietors of a town prior to 1750 set apart a common to public use subject to the right to build a church edifice thereon, and a church building was erected in 1762, and rebuilt in 1845 and 1853, an owner of lots originally set apart to the minister in charge of the church did not have a fundamental right to an unobstructed view across the common. [Ed. Note.-For other cases, see Easements, Cent. Dig. §§ 56-58; Dec. Dig. 19.*] 2. EASEMENTS (§ 19*)-VIEW-OBSTRUCTIONS ESTOPPEL. Where the view across a common set apart by the proprietors of a town prior to 1750 had been partially obstructed by a church building erected on the common in 1762, and rebuilt in 1845 and again in 1853, For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes and the latter structure was in existence, the principle of estoppel applied to one acquiring lots originally set apart to the minister in charge of the church, and he could not maintain an injunction to compel an unobstructed view across the common. [Ed. Note. For other cases, see Easements, Cent. Dig. §§ 56-58; Dec. Dig. § 19.*] In Equity. Action by Alfred S. Brown, executor and trustee, against the Greenfield Congregational Society and others. Motion for preliminary injunction denied. Alfred S. Brown, of New York City, and Marsh, Stoddard & Day, of Bridgeport, Conn., for plaintiff. Elmore S. Banks, of Bridgeport, Conn., for defendants. PLATT, District Judge. The allegations of the bill do not correspond with the facts which have been brought to my attention by the affidavits. The statement of the bill is that the proprietors of the town of Fairfield, prior to 1750, set apart the public green or town common as a place of parade, public meeting, recreation, and amusement, and the same has always been left open for those purposes. The affidavits show that a church edifice was built upon the common in 1762, and another took its place in 1845, and a third, the present church, in 1853, and that the second covered more land than the first and the third more than the second. It would appear, therefore, from the affidavits, that the dedication of the common to public use carried with it the right to build a church edifice upon it. The fact is emphasized by the further fact that the proprietors were all members of the Ecclesiastical Society, and that the very property which the plaintiff claims is irreparably damaged consists in part of two lots originally set apart to the minister who was in charge of the church. [1, 2] The affidavits show that the only injury which the plaintiff apprehends will be some slight additional obstruction to the partial view which the plaintiff now enjoys across the common, from one of the houses on his property. Upon the affidavits, therefore, the fundamental right of the plaintiff to an unobstructed view is not sustained, and, even if such a right can be found, it is clear to me that the conduct of the plaintiff's predecessors in title has placed him in a position where he cannot expect his right to be enforced by the extraordinary process of injunction. The principle of estoppel applies, and beyond that the injury is too insignificant to compel the discretion of the chancellor to be exerted in the plaintiff's favor. The motion for injunction is denied, with costs. For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes |