or custom. In order to have "commercial usage take the place of general law it must be so uniformly acquiesced in, and for such a length of time, that the jury will feel themselves constrained.t9 find that it entered into the minds of the parties and formed a part of the contract." Lyons, etc., v. Culbertson, 83 Ill. 37. The plaintiffs have failed to sustain their action, and judgment will be for defendant and his costs expended herein.
(Oircuit Oourt, W. D. Michigan, S. D. November 26, 1880.1
1. NEW TRIAL-SURPRli:lE AND NEWLy-DISCOVEltED EVIDENCE.
Motion for new triaJ upon the grounds of surprIse and newly-discovered evidence granted under the circumstances of this case, where the same was not brought to a hearing until after the expiration of 11 years from the time it was entered.-[ED.
Assumpsit. Motion for New Trial. E. S. Eggleston, for plaintiffs. Chas. H. Stewart and Hughes, O'Brien & Smiley, for defendants, on the argument of motion. 'WITHEY, D. J. In .November, 1869, this cause was tried and a verdict for plaintiffs rendered for over $6,000. A motion for a new trial was then entered, but has never been brought to a hearing until now, after eleven years have expired. Ordinarily such delay would be sufficient reason for dismissing the motion, for without very good grounds for justification no party ought to be forced to retry his case at so remote a day that it may be presumed difficult to obtain the evidence given upon the former trial. But the fact that defendants' attorney, soon after the trial, became and continued seriously ill for a long period, and became a confirmed invalid, unable to attend to the ordinary duties of an attorney, operates as some excuse for delay. It appears, also, that two of the plaintiffs, Mansfield and Freese, were, in 1872, adjudicated bankrnpts, and that their assignee has never entered an
MANSFIELD V. DUDGEON.
appearance in the case; and, finally, that Mansfield died not long after his bankruptcy. There has been no attemp't to move in the case by either party until proceedings were taken a short time since in behalf of surviving plaintiffs to enter judgment on the verdict, which was'met by this old motion for a new trial. The grounds of surprise and newly-discovered evidence are the principal and only ones I shall consider, and I am of opinion, under the circumstances, that the question whether these grounds are suffiCient shOuld be regarded as if the motion had been heard within a month after it was entered. The question turns upon whether the newly-discovered dence ought, by diligence, to have have been discovered before the and whether it is of sufficient importance to probably change the result upon another trial. The corn which is the subjeatof the suit, and which plaintiffs sold and delivered to defendants under a contract, had most of it arrived at Cairo, Illinois, on the eighteenth of April, 1865, and was intended to be sold at that place by defendants to the general government, and be inspected by government inspectors. Defendants did not pay in full for the corn, as agreed; they claimed part of it was not sound and merchantable, and this suit was for the price of the unpaid portion, or that which they alleged to be unsound corn. Defendants relied upon showing as a defence that they and plaintiffs, at St. LouiR, on the eighteenth of April, 1865, came to an understanding and agreement that defendants were to pay for the sound, but not for the unsound, corn; and that what was unsound was to be determined by what was rejected by the government inspector at Cairo. They testified on the trial that such was was given by them to plaintiff the fact, and that an Mansfield, on the freight agent of the Illinois Central Railroad at Cairo, to deliver the rejected corn to warehousemen, for plaintiffs' disposition. Mansfield, on the trial,' denied any stich agreement, or any such order had been given. The preponderance of evidence was on the side of plaintiffs, in the opinion of the the jury, and the verdict was for them. After the trial defendants discovered that plaintiffs a.nd a.
warehouse firm at Cairo had corresponded on the subject of the com in question, and subsequent to the eighteenth of April, 1865, viz., the latter part of that month; and on this motion placed on file an original letter, in Mansfield's handwriting, which shows _ clearly that _ defendants did give an order to Mansfield, prior to the twenty-seventh of April, 1865, touching the com in question, and its delivery by the freight agent of the railroad to warehousemen at Cairo. There is no way of determining its precise import, but, prima facie, it is the one testified to by defendants on the trial, and if it had been pI'oduced in evidence, must, we think, have changed the verdict. prior to the trial, gave notice to plaintiffs to produce the order of April 18, 1865, after having applied to the railroad freight agent at Cairo for it, and been by him informed that he had received no such order. Defendants, therefore, had a right to believe that plaintiffs still held it, and that, a notice to produce would secure it at the trial. They had no reason to suppose that plaintiffs had sent the order to a warehouseman at Cairo, as it was addressed to the freight agent of the railroad, and therefore were surprised at the trial by its non-production, and by the testimony of Ma.nsfield wholly denying that he had received such order, or knew anything about one having been given.. He did know an order touching that CO,m had been given. He knew that he had held it, and had transmitted it by letter to Halliday Brothers, warehousemen at Cairo, and thatit was drawn on the freight agent and was made by defendants. It ismanifest that the order was for the delivery of the com in question to Halliday Brothers, if we look at their letters in reply to Mansfield of date respectively April 25 and 27, 1865, for in them Halliday Brothers object to receiving the corn on plaintiffs' account.. Mansfield gave no intimation that there was any order whatever, _ denied the existence of one, and gave the cour,t and jury to understand that defendants' testimony on that subject was altogether and entirely up-true. If the order was not-of the precise nature ,or import testified to by defendanti;l, .and yet an .orderwas given at St. Louis the, jury was entitled to know that fact, and April 18,
it could not have failed to exercise considerable influence, especially if plaintiffs, know:ing· who held it or to .whom it was by them sent, failed to produce it or show that they -had tried to do so. Defendants applied after the trial to Halli· day Brothers, who could· not ftndthe order, but gave ·them the correspondence alluded to be-tween themselves and plaintiffs, and their affidavit. The new testimony is regarded as not only material, but of a character to have prevented a verdict for plaintiffs; and it is not seen how defendants can be said to have been otherwise than surprised on the trial by the non-production of the order, or of information of its whereabouts, and plaintiff Mansfi.eld'8 testimony wholly denying the existence of any order of the kind. Mansfield's death ought not to be a sufficient reason for perpetuating a. verdict thus obtained. A new trial is granted, but on the terms that defendants pay the taxable costs of the trial·.
In ,.e HYDE, Bankrupt. In ,.e
(Circuit Oourt, S. D. New York. March 28, 1881.)
1. BANKRUPTCY COURT-POWER TO BET ASIDE FRAUDULENT DBBDS.
The district court has power,wq'ile sitting in bankruptcy and cising the jurisdiction conferred by the bankrupt law of 1841, by summary order, to set aside aud order to be surrendered and cancelled deeds given by the ofllcial assjgnee, which are im·providently, irregularly, or without due!,uth9rity executed by him, or.whicp.:were procured to be executed by imposition and fraudulent practices upon the court, or which were designedly so drawn as to be grants in excess of or varying in material particulars frOm the orders of the court under which they purport to be executed, .while the same are still In the hands of the party by whom they were so procured from the assignee, . and who had notice of said irregularities ·and defects,· and who giwe no value therefor, except certain sums paid to the official assignee· a8 upon the petition of a party not a creditor of the bankrupt, ll-nd having no interest in the matter, except that he is in the possession of land, claiming title thereto, and that he has been subjected to liti-
gation, oris threatened with litigation, in respect to said land, based upon the deeds sought to be avoided, after the discharge of the bankrupt, and when there are no longer any knOWA assets to be distributed among creditors.-[ED.
Wm. Allen Butler, for petitioners. Geo. F. Betts, for respondents. BLATCHFORD, C. J. It was provided by section 6 of the bankruptcy act of August 19, 1841, (5 St. at Large, 445,) that "the district judge may adjourn any point or question arising in any case in bankruptcy 1into the circuit court fOl the district, in his discretion, to be there heard and deterand for this purpose the circuit court of such district be, deemed always open." pnder this provision the quelltion has been adjourned into this court by the district judge of this district,as a question arising, in are in the district court for this district, in bankruptcy,.... 'under , the said act, to be here heard and determined: "Whether the district court has power, sitting in bankruptcy and exercising the jurisdiction conferred by the bankrupt law of 1841, by summary order, to set aside and order to be surrendered and cancelled deeds given by the official assignee, wJ1ich :were i!flllprovidently, irregularly, or without due authority executed by him, or which were procured to be executed' by im'p6sition and fraudulent practices upon the Cqurt, or,whichwere designedly so drawn as to be grants in excess of or varying in material particulars from the ordergof the court under which they purport to be eiec]lted, while the same are still in the hands of the, party by whom they were so procured from. the assignee, and who had notice of said irregularitiElS and defects, and who gave no value therefor, except certain Sllms paid to the official assignee as fees, upon the petition of a party not a creditor of the bankrupt, and having no interest in the matter, except that he is in the possession of land, claiming title thereto, and that he has been subjected to litigation, or is threatened with litigation, in respect to said land, based upon the deeds sought to be avoided. Whether this power, if it can be exercised at all, can be exercised after the discharge of the bankrupt, and
IN RE HYDE.
when there are no longer any known assets to be distributed among creditors." The question adjourned must be taken to be based on the facts asserted in the statement (i)f the question: (1) That deeds of land were given by the official assignee, purporting to be executed under orders made by the district court; (2) that the deeds were executed by the assignee improvidently, irregularly, or without due authority; (3) ,that the deeds were procured to be executed by the assignee by im.position -and fraudulent practice upon the court; (4) that the deeds were designedly 80 drawn as to be grants in excess of, or varying in material particulars from, the said oxders; (5) that the deeds are still in the hands of the party'who so procured them from the assignee; (6) that the said party had notice of the said irregularities and defects; (7) that the said patty gave no value for ithe said deeds except certainsutnspaid to the official assignee as fees. On the foregoing facts the to be considered (1) Whether the dislirict COUl't, sitting in bankruptcy, and exercising .the jurit\diction oonferred by said act,· haspoiwer, .by summary order,' to, set aside' !said deeds;. ,and power also to order them to, Ire surrendered andca.ncelled·;.(2)whetherit can do so on the petition ofa party who of the 'bankrupt anc1.has no interest in the matter exC'eptthat he is in the possession of land, claiming title thereto, and that he has been subjected to litigation', or is threateneq with litigation, in respect to saidli:l.nd, based upon said deeds; (3) wlietbe1"-it can do so after the discharge of the bankrupt, and when there axe no longer any known assets to be distributed among creditors. The order of adjournment shows that the question was adjourned on the application of the respondent 'holding the deeds referred to, and that.he appeared by counsel before the district court. He appears in this court by counsel, who urges that the inquiries made should be answered in the negative. It is contended that the inquiry is not as to the inherent power of the district court to grant the relief referred to, under the facts stated, but is as to its power to do so on
qf .sl.lOh a party as. the- one specified; that such
party is not legally entitled to call on the respondent to answer; that. such party is a stranger, and has no right to intervene, not being a creditor"and having no interest in augmenting the fund, or in its distribution; and that the discharge of the bankrupt and the .non-existence of assets for distribution a,mol1nt to a close of the proceedings in bankruptcy, and terminate the power of the court in bankruptcy over the ca.se. Before adjourning the above question the district 'judge expres!}8d his views in a written decision on the question. He held that the party applying had such an interest in the matter that he could maintain the petition; that he was not a mere stranger, have the act vacated on SNunds of public policy, but appeared as a party whose rights were injuriously affected by the act of the officer of the court; that the court had power to relieve him if he made out his case; and that the proceeding in bankruptcy had not reached its final consummation so long as there remained any order, decree, or action for the court, in the proper and usual exercise of the jurisdiction in like eases, to enter or to take, or any redre138 :or telOOf to be given to any party or .person properly-applying to the eourt therefor in thecase.The inherent power exists in every court to set aside 8. deed whi.ch its officer has given, gratuitiously and without a fee to the officer, where consideration, for no the deed was given improvidently, irregularly, or without due authority, or where the deed was procured to be executed by imposition and fraudulent practices on the court, or where it was designedly so drawn as to be a grant in excess of, or varying in material particulars· from, the order of the court under which it purports to be executed, while the deed is still in the hands of the party who procured it from the officer, such party having procured it under the circumstances· above stated, and having notice when he so procured it that the irregularities and defects. above referred to existed. There is: no good faith in such a transaction; no purchase,
no vested right. The right of · jidepul'chaser 'Without notice has not intervened. Thetshai3' been a of the action of the court by unlawful means, and the person who was a party to and an actor,in the transaction cannot M heard to claim that he can profit by the transaction, 01' that the court should not be allowed to re-instate itself in the sition in which it was before the unlawful transaction place. The power existing to set aside the deed and treat it as if it had never been executed,to sweep it away as a clond on the title of the court and its officer, to restore the integ.. rity of the action of the court and its officer, does not detract from the vigor or efficacy of the power that it is set in: motion by a person against whom the deed operates injuriously. No one is ever likely to Qomplain of the wrongful act, . except a person aggrieved thereby. A person in the possession of land, ann claiming title thereto, and who has been sued, or is threatened to be sued, on the deed, in respect to such land, has a sufficient interest in the matter to require the holder of the deed, holding it under the circumstances stated, to answer an application to the court, made by such person, to set aside the deed. Of course this is to be done on a proper petition by such person; with an opportunity to the holder of the deed to answer it, and to meet the proofs of .the applicant, and to put in proofs himself, according to the usual procedure in a litigation. ' Nor is there any good reason why this should not be done by a petition, with the usual forms thereunder, in an equity proceeding, but in a'summary way, as distinguished from a plenary suit by bill in equity; in ,other words, in the form of proceedings by petition in the course of a proceeding in bank. ruptcy. By section 6 of the act of 1841, it is provided that the jurisJiction of the district court ·shall extend <lto all acts, matters, and things to be done under and in virtue of the bankruptcy, until the final distribution and settlement of the estate of the bankrupt, and the'dlose ·of the proceedings in bankruptcy." (5 St. at Large, 614-;)' repea,ll The act of March ·3, :ing the act of 18H, provides that
not affect any case or proceeding in bankruptcy commenced It before its passage, "or any pains, penalties, or forfeitures incurred under the said act, but every such proceeding may be continued to its final consummation in like manner as if this act had not been passed." It cannot properly be said that the proceeding in bankruptcy has been closed, or has reached its final consummation, although the bankrupt has been discharged, and no assets .remain to be distributed among creditors, when a deed given under the circumstances in question remains outstanding, illegal, unauthorized, or fraudulent, and when, as a consequence of setting it aside, what was conveyed by it, and seems to be so 'Valuable a possession to the party who holds it, will then remain in the hands of the court, to be disposed of properly by another deed. Nor can it be doubted that the power to order the deed to be surrendered by the holder, and then to be cancelled, existsequally with the powerto set aside the deed. The power as against the holder .arises out of the facts of the case, and out of the jurisdiction obtained over his person by the proper service of process on him under the petition, and, if the frame of the petition extends to it, the court, which has authority to vacate the unlawful, collusive, and fraudulent act and deed, has authority, on the same basis, to enforce the delivery up of the deed to the court by the holder. The jurisdiction in a similar case was exercised by the district court for this district in 1862, under the bankruptcy act of 1841, In re Conant. In 1858, the official assignee in bankruptcy of Conant conveyed certain land in Illinois to one Brown, who conveyed it to one Jones. One Taggard had bought the same land in 1843, and obtained a deed of it, and had gone into possession of it, and held it until he died, in 1851. His heirs, having sued Jones in trespass, in illinois, to establish their title to said land, petitioned the district court, in 1861, for relief agaipst the deed of the assignee. The assignee and Brown and Jones were cited to answer. The court found that it had been induced to order the. sale by the assignee under the impression on the part of the court that the land was without value, and that the saJe was to be
IN BE HYDE.
made only to relieve the land in the hands of Taggard from g,ny cloud or technical infirmity of title; that the court had given the title gratuitously to a party who might use it in fraud of the estate of the bankrupt or of an honest purchaser of it; and that the order of sale ought not to stand, but should be rescinded, as having been obtained by a party cognizant of all the facts impeaching its equity and justice. The above state of facts was recited in an order which the court made July 7, 1862, vacating and declaring void the order of sale made in 1858, and declaring null and void the deed from the assignee to Brown, and ordering the assignee and Brown and Jones to deliver the deed to the clarko! the court to be cancelled. In In re Mott,.in the district 'Court for this district, under the bankruptcy act of 1841, the official assignee had, on the order of the court, made in 1860, sold a certain interest of the bankrupt in the real estate of his deceased grandfather, at private sale, to one Delaplaine, for $800 for the property, and $200 to the assignee for his costs and expenses in the matter, and had given a deed for the property to Delaplaine. Afterwards a bank, which was a creditor of the bankrupt, but had not proved its debt in the bankruptcy proceedings, applied to the court by petition, setting forth that before the order of sale was procured the assignee had agreed to convey the property to the bank for a nominal consideration, and $25 as his costs, and that he had received the $25 from the bank. The petition prayed for an order declaring void the sale and deed to Delaplaine, and directing the deed to be surrendered and cancelled, and $800 in court, received from Delaplaine, to be returned to him, and directing the assignee to convey his interest in said real estate to the bank for'a nominal consideration. Delaplaine and the assignee were senred personally with the petition, and resisted the granting nf its ·prayer. . The district court, in 1861, ordered the case and the' proceedingsto be adjourned into the circuit court on certain stated questions, one of which was whether the bank could v.6,no.6-38
carryon the proceedi,u'gs against the assigrtee or Delaplaine without having first proved its debt. The matter was heard before Mr. Justice Nelson in the circuit court, and he made a written decision on November 28, 1863, in which he said that he was satisfied that the order of sale was improvidently granted, and that it should be set aside; and ala9 that the conveyance under it by the assignee to Delaplaine should be delivered up and cancelled, and the money paid by him, and in court, be refunded to him, and that received 'by the assignee,and not in court, be refunded by the assignee, and that he did not doubt that the district court had full power and jurisdiction to make an order to the above effect. As to the prayer for a conveyance to the bank by the assignee, he ;said that the district court ,had nO power to order it to be and that the asset ought to be sold at public auction, 'Thereupon the district court, by an ordE;lr made June 17, 1864, dismissed the petition of the bank, and ordered that the ,sale by the assignee to Delaplaine be set aside inequitable, and void, and that the order for such sale be revoked, as having been obtained by proceedings that were irregular and inequitable. ' The written decision of the district court, resulting in said order, proceeds, in not orderiug a deed to be given to the bank, and in not awardillg any' further relief to the bank against Delaplaine or the assignee, 9n the view that the bank showed no subsisting title or interest in itself warranting the granting of such further relief. It had no such interest 'as that of being in possession of the land, cIaimingtitle to it, which makes the distinction between ,the petitioner in that case and the petitioller wthe Oonant Case and in the present case. But the court, set in motion .by the petition of the bank, set aside the deed, although ,did not order it to be delivered up. Nothing is adjourned in the present case into this court but the question of power on the facts stated. taken.is not before this court. It is not intended,therefQre, in any.th,ing that has beep ,said, to, express or .intimate any ..()pinion by this court as to what Qught or oughtllot tQ !be
ORAY V. BEOK.
done by the district court in the case, under the existence of, the power. . The question adjourned must, in its entirety, be answered in the .affirmativee
GRAY, Surviving Assignee, etc.,
BEoK and another.
(DMtrict Court, D. New Jersey. April 11, 1881.)
1. EQUITABLE RELIEF-JURISDICTION-ASSIGNEES IN BANKRUPTCY.
A bill in equity by in bankruptcy to recover the value of personal property transferred to the defendant by the bankrupt, in fmud of his' creditors, will I,e dismissed for want of jurisdiction: the complainant ,has a plain, adequate, and complete remedy at law.
A bill will be dismissed for lack ,of' equity, although the point is. made for the first time when the cause comes before the court for final hearing 011 the pleadings and proof.
But inasmuch as the defendant is in fault for not raising the objec. tioD in the pleadings, the bUl wiil be dismissed without costa to the defendant.
'Nelson Smith, for complaint\nl M. T.Newbold, for defendant Beck·. NIXON,D. J. This suit was originally. commenced by William M. Gtay and Alexander H. Wallil:l, aSSignees in bankruptcy of John Werder, against Joseph B. Beck and Werder, to recover the sum of $2,000, and also'for the value of' a barrel of wine, alleged to have been transferred to the said Beck by the bankrupt, after the proceedings in bank. ruptcy had begun, in fraud of his creditors.. Pending the proceedings, Wallis, one of the assignees, died, and the suit has been revived and continued in the name of the, suryiving assignee. A decree pro confesso was I against the de. fendant Werder for not appearing and answering, and the other defendant, Beck, filed an answer to the bill of com-