Jacob Snively, and,also, as' to the common source of title, and because'there WW3 no charge on the question of forgery,cannot be cansidered,as no seasonable objection seems to have been made while the jury were at the bar. T)le:fourth the court erred in overruling the plaintiffs':rmotion for a new trial-presents a question which, it is well settled,c.annot be reviewed'upon writ of error. Railway Co. v. Heck, 102 U. 8,,120. For theSe 'reasons, it follows that the judgment of the circuit court should be 'affirmed; and it is so ordered.
'ME'.l'ROPOLITAN NAT. BANK OF PITTSBURG v. ROGERS et a.l (Circuit Court of Appeals, Third Circuit. January 27, 1893.)
,A.:PPlilAL-RlilVIlilW-FINDINGS OF FACT.
Findings of fact by the court in a b1ll in equity must on appeal be considered prima facie correct, and' will not be d1sturbed unless plain and maDifest error be shown. .
Under Rev. St. § !S046, no title passed to an in bankruptcy in respect to property theretofore conveyed by the bankrupt, unless there was fraud in such conveyance; and it was not sufficient that insolvency, not"known at the time, was developed by subsequent events. 4,7 Fed. affirmed.. 3. SAME-EvIDENCE. In July. 1872, a firm consisting of two partners conveyed to the wife of one of them a lot worth about $500, which conveyance was in lieu of a contract obligation on the part of the firm to furnish such partner a house free of rent. Subsequently such partner withdrew from the firm moneys some $13,600,and used it in building a house upon the lot. At the time of the conveyance the firm was apparently prosperous, was making money, and had a practical monopoly of the article dealt in; and, though its obligations were large, its assets, as shown by its books, were worth $250,000 in excess thereof. In 1875, the firm became tnsolv,ent, and filed a petition in bankruptcy; its failure being due to the panic of 1873, and the consequent shrinkage in the value of its property and b111.s receivable. Held, that on these facts actual fraud could not be inferred, especially when both partners testified to their good faith in the matter; and no title in the premises passed to the assignee in bankruptcy. 47 Fed. Rep. 148, followed.
BAj:'lK1tUPTCY-FRAUDULENT CONVlilYANClilS-ASSIGNEE'S TITLE.
Appeal from the Circuit Court of the United States for the Western District of Pennsylvania. Affirmed. James Bredin and C. C. Dickey, for appellant. Wm. L. Chalfant, (D. D. Bruce, on the brief,) for appellees. Before DALLAS, Circuit Judge, and WALES and BUFFINGTON, District Judges. BUFFINGTON, District Judge. This is an appeal by the Metropolitan National Bank of Pittsburgh from a decree of the circuit court for the western district of Pennsylvania (47 Fed. Rep. 148) dismissing: a bill filed by Reuben Miller, Jr., et al., assignees in bankruptcy of William Rogers and Thomas J. Burchfield, to set aside a conveyance of 10 acres of land made by the bankrupts to Mary Ann Rogers, wife of said William Rogers.
METROPOLITAN NAT. BANK V. ROGERS.
The bill was filed 14th December, 1877, and alleged the plaintiffs were a,..<;""lignees in bankruptcy of said Rogers & Burchfield, who were the owners of the property in dispute; that by deed dated 8th July, 1872, they had conveyed the same to said Mary Ann Rogers; that no consideration, other than a nominal one, passed therefor; that a dwelling house and other improvements were soon built thereon at a cost of $15,000, and the same paid for by funds of Rogers & Burchfield charged to William Rogers; that at said times the firm was extensively engaged in the manufacture and sale of iron; "that said business was hazardous, and one in which the said firm was necessarily obliged to incur larg-e debts and run great risks; that said firm was in fact largely indebted at the date of said deed, and so continued until on or about the 1st day of November, A. D. 1875, when it became insolvent," and filed a petition in bankruptcy; that on July 31, 1875, the bankrupts had executed a quitclaim deed to Mrs. Mary Ann Rogers for the same premises, for which no consideration passed; that the bankrupts had not returned said premises among their as· sets, but the same were retained and claimed by Mrs. Rogers. The bill then continues:
"That, as your orators are advised, the RlLid deeds are wholly void as to creditors, and in fraud of their rights; and by reason of said deedS your orators have been unable to sell said real estate at anything like its value, whereby the creditors of said bankrupts have been hindered and delayed in the collection of their .ust claims."
The bill prayed for cancellation of the deeds, delivery' of the property, and an accounting-. The answer of William and Mary Ann Rogers, filed 28th May, 1878, alleged the cost of the improvements was but $13,600. That a consideration had passed for said premises other than that stated in the deed, which arose thus: By the original articles of partnership between Rogers & Burchfield, dated 18th August, 1866, it was agreed that"Said ".ngers shall be general manager at "..he mills, and shall superintend the business in Armstrong county, and shall devote his time and attention exclusively to his duties. He is also to turn the rolls, (but not the rolls in the lathe;) and in consideration thereof he shall occupy, free of rent, the house connected with the works, now in his occupancy, and the field adjoining."
That by a. supplemental agreement dated August 18, 1873, it was stipulated: ·
"Sald Rogers shall not hereafter occupy, free of rent, the pouse connected with the works lately in his occupancy.· · · In lieu of the privilege heretofore enjoyed by said Rogers, to occupy free of rent tile house connected with the works, · · · the firm have agreed, and do hereby agree, to convey to the said Rogers, in fee, ten acres of ground off the back end of the David Leech farm, which the firm bought of Joseph G. Beale, which the said Rogers has already selected and staked off,"
The answer further set forth that the business was not more hazardous than any other manufacturing one; that, while the firm was considerably indebted at the date of the deed, it had large credits,which, exclusive of real estate, were in excess of its liabilities that both respondents believed the business was in a very flQurishing
and 'prosperous condition; that, the quitdaim' deed was only given to correct a supposed defect in the title; that during 1870, 1871, 187:2, and 1873 the profiUl of the :firm averaged $40,000 a year; that the amount drawn from the firm. to build the hOUse, viz. six thousand and some hundred dollars for two years, was not unreasonable or improper; that the making of the deed to Mrs. Rogers, and the building of the house thereon, was a reasonable provision by her husband for her, and in keeping with his circumstances at the time. A replication was. 1:400 December 24, 1878, and an examiner appointed. On June 20, 1879, the assignees sold at public sale their title to the premises in dispute, to the Metropolitan Bank, for $1,200, making conveyance thereof 31st May, 1881. On petition of bank filed January 7, 1886. it was allowed to intervene, and file a supplemental bill, in which it set forth iUl interest in the controversy by reason of its said pUrchase. f· · On hearing, the ooUl't, was of opinion that ,the bill disclosed no ground to sustain a decree against Mrs. Rogers, and the case might rest on thlttgfound; on the authority of Warrenv. Moody, 122 U. S. 132, 7 Sup. Ct. Rep. 1063, and Adams v. Collier, 122 U. S. 382, 7 Sup. Ct. Rep. 1208. Without doing so, however, the court passed upon the testimony, and found the merits of the case to be with Mrs. Rogers; that the real' consideration was as set forth in the answer, and that Rogers had received the 10 acres in. consIderation of the surrender of the house which he was to have rent free; that by his request was. made to Mrs. Rogers; that, even with the coal, (which was, however, excludf'Al from the conveyance,) the value of the land was only $50 per acre ; that the house was begun early in 1873 under a contract which required its completion by April 1, 1874. The court further found, (we quote the words of the learned judge:)
"The wa's entirely free froII\ intentional fraud. There was no thouglIt on the part' of either WUliam Rogers or Thomas J. Burchfield to delay, hinder, or def..· aud their creditors, or to withdraw any property from tlleir reach.,· Insolvency was not apprehended by them, either at the date. of the deed c;JOn:veying the land, or while the, house was in course of erection. From first to llUlt, all parties to the transaction acted in perfect good faitll. · · ·. The firm, indeed, had greatly l'rospered, and was a money-making, concern.. Apparently it had a very large surplus of assets over and above its liabilities throughout the whole of the years of 1873 and 1874. Upon a careful consideration of all the eVidence, I am satisfied that the insolvency wPlch overtook the firm in the fall of was caused by the 'depreciation of values of property and losses of accounts' spoken of by Mr. Bu1'chfield in his deposition,-the ultimate results of the financial panic which had swept over.. the country. But, as we have seen, Mrs. Rogers' title to the land was perfected on August 2, 1872; and undoubtedly, at that time, the firm of Rogers & Burchfield was not only solvent, but in a highly prosperous condition, and possessed ;)1' ample means to discharge all its liabilities. The land conveyed. to Mrs. Rogers was oftha value of less than five hundred dollars, and thlll was an insignificant settlement upon her, in view of her husband's pecuniary circumstances. 'I'he conveyance, even if it is to be regarded as without CODJ3ideration, did not tend in the slightest degree to imperil the rights ofllnf ot the firm's: creditors, 'or the iDdividual creditors of either partAgain,'Vhe.n the contract for the house was made, in July, 1873, and wllen the lhereon began, the financial panic was unforeseen. The busiof the firm continued and its surplus of assets was vel'j' ness large.. , The' proposed investment in tlle improvement of the property was not :dlsproportioned to the husband's means, nor Inconsistent with the fair-
METROPOLITAN NAT. BANK 'V.nOGERS.
est dealings with his creditors, existing or fntut'e; and then, the work having been entered upon, there was a businessnecesslty to carry the project through. Indeed, a contract obligation was upon Mr. Rogers, and he was I10t at liberty to recede. Moreover, in point of fact, neither the conveyance to :Mrs. Rogers, nor the sUbsequent expenditure in the improvement of the land, operated to delay, hinder, or defraud their existing creditors. * * * The result, therefore, is that every debt existing at the da.te of the cOnveyance, not fully secured by the mortgage, was actually paid. * · · Nor is there any ground for fastening on the ·lll1ld a charge for such expenditures, even were such relief here sought, and the bill framed with a view to a decree of that nature. There is not a particle of evidence to show any collusion between the husband and the wife. Ne11;her entertained any evil purpose. The expenditures were honestly made by the husband, and innocently in by the wife."
The court dismissed the bill. and its action is assigned for error. This must be either-First, in its finding of facts; or, secondly, in its application of the law to them. Addressing ourselves to the first class, the finding by the court may be summarized: First. When the deed was executed, and the im· provements made, the grantors were solvent. Secdnd. The provision thereby made for Mrs. Rogers was a proper one, considermg the financial condition of her husband, William Rogers. Third. All par· ties acted in good faith. There· was no fraud in the transactions, and they did not hinder, delay, or defraud creditor'S. It may, indeed, be questioned whether any of the assignments of error cover the findings of fact, and whether they are not, rather, to the application of the law to them. Assuming, however, the ninth assignment, viz. "the court erred in not finding actual fraud as against creditors on the part of Rogers & Burchfield and Mary Ann Rogers in the making of said conveyance, and in the making of the im· provements placed upon the lands described in the said deed," raises the question, was there error in the findings? In settling this question, we must assume, prima facie, they are correct, and as such must be held, unless error, plain and manifest, be shown. When the law has charged a tribunal with the . duty of examining tbe testi· mony and ascertaining the facts, its determination is, and must be, a finality, unless it be made to appear that such findings were con· trary to the weight of the testimony. To say tlie proofs would Del'mit a contrary finding, and ask the court to so find, will not avail. The facts having been ascertained by the tribunal whose duty it was to find them, they will not be set aside "unless clearly in conflict with the weight of the evidence upon which they were made." That such is the weight given to findings of facts in federal tribunals, Kim· berly v. Arms, 129 U. S. 525, 9 Sup. Ot. Rep. 355; Camden v. Stuart, 144 U; S. 105, 12 Sup. Ot. Rep. 585; Crawford v. Neal, 144 U. S. 585, 12 Sup. Ct. Rep. 759; Tilghman v. Proctor, 125 U. R. 137, 8 Sup. Ct. Rep. 894; Callaghan v. Myers, 128 U. S. 619, 9 Sup. Ct. Rep. 177; and Furrer v. Ferris, 145 U. S. 132, 12 Sup. Ct. Rep. 821; and (in Pennsylvania) Logue's Appeal, 104 Pa. St. 141,-will show. Certainly equal, if not greater, weight should be given to such findings where a court, not delega.ting its power to a master, has itself weighed the testimony, and ascertain"d the facts, as is here the case. Tested by this standard, the findings of the court must stand. Neither the
printed brief nor the earnest arguments of counsel have shown us wherein the court below has erred. Where error is alleged in the fact by a lower court, the a..ssignment, to entitle it to conSiaera.ti,on in the appellate court, should specifically and plainly point out, the particular error alleged; but in this case we have examinedtheentire evidence with a view of arriving at a conclusion' independent of the circuit cOurt's action. No other conclusion, however, ca.nbe reached. The conveyance of land,-lO acres,-of a value of less than $500, was an insignificant diminution of the assets of a prosperous firm, and in no way tended to hinder, delay, or defraud its creditors. It was not made on the eve of threatened insolvency, or with the haste which often stamps dishonest transfers wpen insolvency is fea.red, nor was it without con.sider1ttion.The shows the firm was, by contract, bound to furnish, free of rent, to William Rogers, a house, the reJ,lt of which .was estimated at ,from two tQ four hundred dollars per year. The value of the was l6$s than two years' rent of the house, and the :fiI'l;II; to. ,use the latter, as· a company. store. It was a mstealJ of by the transactIOn. the expenditure of Ippney by William Rogers in buildingtP,E;l .house upon: it improper, It is easy, in view of the subse>quent failure of the :firm, and the large losses suffered by its credit. volunteer the opinion that the firm was always insolvent. But the status of the firm as it was at the time of the conveyance, with. its,: surrounding conditions, is the better test of whether there was fraud, in the mind of Rogers or his partner, Burchfield, in making the deed, or on the part (If Mrs. Rogers in improving the property with her husband's .money. An examination of the :firm's books, as they were about the time these improvements were begun, (July 31, 1873,) shows, by the testimony of a disinterested accountant, that the, :firm .was then worth more than a quarter of a million dollars over and· above liabilities. Add to this the fact that it is shown to have been making large profits; had a virtual m(lnopoly of the article it manufactured; th;tt it had high commercial rating, and good credit with the banks; ;tu,d that it was enabled to pass through two years of the strain of the panic. With these facts shown by the evidence, we cannot see how a court could find a fraudulent purpose in the mind of Burchfield or Rogers in making the deed; much less in the mind of :.Mrs. Rogers, who was the innocent recipient of a share of her husband's profits in a then supposed to be prosperous busi· ness. If there had been anything fraudulent in the transaction, it wouldcoIIIeto light in the testimony of Burchfield, who was called by the appellant. a.nd between whom and Rogers bad feeling resulted from the failure. His testimony, however, shows the deed was honestly made. to .:Mrs. ,Rogers, and that he supposed the :firm was in a prosperou8condition. To fix fraud on Mrs. Rogers, from the evidence in this .ca.se, be to give her an insight into the business of the the future, which the partners themselves, and the banks with whom they dealt,did not possess. We are of opinion, ·. from· ,the evidence, with the coqrt below, "that the insolvency wbicb()vertook the firm in the fall of 1875 was caused by the de-
IN RE AH YUK.
preciation of values of property and losses of accounts, the ultimate result of the financial panic which had swept over the country." There being, then, an absence of fraud in the transaction, there can be no doubt the assignees in bankruptcy, or their grantee, the Metropolitan National Bank, have no standing to attack the conveyance. ']0 give such a right to an assignee in bankruptcy, fraud is a sine qua non. Section 5046, Rev. St., recites what rights pass to such assignees, viz.:
"All property conveyed by the bankrupt in fraud of hiB creditors, * * * with the like right, title, power, and authority · · · to sue for and recover. and defend the same as the bankrupt might have had if no assignment had been made, shall * · · be at once vested in such assignee."
This statute has been passed upon by the supreme court of the United States in Warren v. Moody, 122 U. S. 133, 7 Sup. Ct. Rep. 1063, and Adams v. Collier, 122 U. S. 382, 7 Sup. Ct. Rep. 1208, in both of which it was decided that fraud was a necessary element to give the as· signee in bankruptcy a right of action, and that insolvency, of itself, or the fact that the property conveyed constituted more in value than the grantor could rightfully withdraw from the reach of credirors, would not, of themselves, vest such a right of action in the assignee. There must be fraud, for so the statute says. In other words, insolvency not then known, and only developed by subsequent events, or the fact that such events showed the property conveyed was an un· due part of the grantor's estate, are not to be deemed fraud pel' se; and, as the statute bases the right of the assignee to recover upon the existence of fraud. such fraud must be alleged and proved. out of court on Complaint is made that the appellant was the pleadings. This is not the case. The court expressly stated that, while the case might have rested on that ground, it would decide it upon the proofs. Such being the case, we are not called upon to pass o,n the pleadings; but, in omitting so to do, we would not be understood as intimating there was error in the court in saying the .case might be rested on that point. Being satisfied, from the evidence, the court arrived at proper condusions of fact, and to those facts correctly applied the law, its de· .cree must be affirmed, and this appeal dismissed, at the appellant's costs
In re AH YUH:. (District Court, D. l'>finnesota.
January 18, 1893.)
A United States commissioner, while he has authority, in a summary proceediJ1g under the Chinese exclusion acts, to order the deportation of a Chinaman found to be unlawfully within the United States, has no juliadiction to order him to be imprisoned at hard labor for 30 days prlor to the time fixed for 1)is deportation. U. S. v. Wong Sing, 51 Fed. Rep. 79, applied.
Petition by Ah Yuk, a Chinaman, for writ of habeas corpus. Prisoner discharged.