FEDERAL REPORTER. DOWELL v. ApPLEGATE and others.
((Jircuit Court, D. Oregon. :September 9, 1881.) .
After It demurrer to a bill is allowed, the right to nm(>n,l .of the court, and leave to amend will not be g:rameu or attain the ends of justice in the case. 4.
CASE IN JUDGMl£NT.
in the discretion IS necessary to
Suit inEquity "in aid of Execution." Addison G. Gibbs 'and B. F. Dowell, for plaintiff. W. Gary Johnson, for defendants. DEADY, J. On' Jime 24, 1881,WiIIiam H. H. Applegate conveyed to Charles and John O. Drain 200 acres of land in Douglas county, by a deed in which the sum of $500 waS named as the consideration, having a stamp thereon of the value of 50 cents. Among other things, this suit is brought to set aside this' conveyance as void,because it was not stamped for $2,000, the alleged actual consideration thf'reof,so as to subject the property described therein to the satisfaction of a judgment for the plairltiff against the defendant Jesse Applegate, upon the ground. that J. A. had conveyed the same to his son W. H. H. A. with intent to defraud the plaintiff. On July 8, 1881, a demurrer to the bill by the Drains was Rustained on the 'ground that it did not appear therefrom that the grautor had omitted to stamp the deed sufficiently with intent to defraud the revenue of the United States. The plaintiff now moves for leave to amend his bill in this respect, and the defendants object because the plaintiff, as to them, is seeking practically to enforce a forfeiture upon purely technical grounds against innocent purchasers, and therefore ought not to be favored by a court of equity, and because it does not appear but.
DOWELL V. APPLEGA.TE.
that the remaining property described in the billas having been conveyed byJ.· A. to his children in fraud of his creditors and still in their possessi(m, is sufficient to :satisfy the plaintiff's claim. By the equity rule 35, the. allowance of an amendmentto a bill" after a demurrer thereto has been sustained, is inthe discretion of the court. Stated briefly, the proposed amendment is to the effect:
(1) That the deed in question was made and delivered with the intent to defraud the United States; (2) that it was made and delivered by the grantor, and accepted by the grantees, with the intent to evade the provisions of the internal revenue acts; and (3) that the Drains caused said deed to be made with intent to evade and delivered, and used the same, by having it said acts, and with intent to defraUd the United Sta.tes out of a stamp duty of a value of $1.50. '
The allegation that the deed was either made, delivered,accepted, or used with the intent to defraud the United States, is false upon its face. The United States had no interest in this property, or claim upon the grantor, J. A., or W. H. H. A., that would render a conveyance of it to the Drains, or anyone else, fraudulent as to it. What the pleader probably had in his mind, but failed to express or allege, is that the deed was made, delivered, accepted, and used without being duly stamped, with intent to evade, defraud, etc. To stamp or omit to stamp a deed is something apart from, and in addition to, the making, delivering, accepting, or using the same; and an allegation that either of these things was done with intent to defraud the United States, or evade its revenue laws, is not an allegation that such deed was made, delivered, accepted, or used without being duly stamped, and is, therefore, immaterial in this suit. It is also immaterial with what intention the Drains accepted this deed. Section 158 of the internal revenue act (13 St. 293; 14 St. 142) does not make any account of the intention with which a deed is "accepted" or received by the grantee. But in the case of a "bill of exchange, draft, order, or promissory note for the payment of money," it does provide that if such instrument is accepted, negotiated, 01' paid without being duly stamped, and with the intent to evade the provisions of the same act, it shall be invalid.. The Nason of this distinction is apparent. Whoever accepts a bill of exchange thereby becomes an active party thereto. In effect and to that extent he makes or emits it,-gives it a new life and circulation,-and the intention with which he does so, so far as the stamp dut.y is concerned, is placed by the stamp act in the same category as that of. the maker.
But in the case of any "instrument or document" other than negotiable paper, the intention or purpose of. the party to or for whom it is made or delivered, 01' the use he puts it to or makes of it, is simply immaterial. Nor is it material in this suit whether the Drains caused this deed to be made within the meaning of the statute or not, and could only become so in an action against them for the penalty imposed by the act. If their grantor omitted to stamp it, as required by law, with the intent to defraud the revenue, it is void, no matter who, or whether anyone, caused them to do so. Nor does it appear that the Drains caused this deed to be made, otherwise than by be. coming the actual purchasers of the property described therein; and· that this did not bring them within the purview or penalty of the' statute is too plain for argument. The proposed amendment is immaterial, and that is a sufficient reason why the motion should be denied. But I do not think this amendment ought to be allowed, even if it contained the allegation that the deed to the Drains is void because the grantor therein made and delivered the Ilame to them without its being duly stamped, and with the intent to defraud the United States. Amendments to a bill, after a demurrer thereto has been sustained, are not allowed as a matter of right, but rest in the discretion of the court, and are only allowed when they are necessary to promote or attain the ends of justice in the case. Hunt v. Rousmaniere, 2 Mason, 365. The case sought to be made against the defendants by the amendment is this: J. A., being a co-surety with the plaintiff on an official bond, is alleged to have conveyed the premises to his son without or upon a grossly inadequate consideration, with intent to defraud .the state and the plaintiff, who has since been compelled to pay the bond. But it is admitied that the Drains purchased from the son for a sufficient consideration, and without notice of such fraudulent intent, and are therefore not affected by it. Conceding this, however, it is claimed that the deed to the Drains is void because their grantor only put a stamp of the value of 50 cents on it when he should have put two dollars, with intent to defraud the revenue of the difference; ancl therefore the property, for the purpose of this suit, must be consid. ered as still held by the son under the fraudulent deed ,from J. A., and subject to be applied upon the latter's debt to the plaintiff. But the plaintiff also imputes another, and, in my judgment, a more probable, motive}or the omission to stamp the deed sufficiently,
DOWELL V. APPLEGATE.
and that is, that the consideration might correspond with that in the deed from J. A. to his son, and thereby give strength to the claim that the former was a bona fide transaction based upon an adequate consideration. It is not at all probable that while the actual cousideration of the deed in question was $2,000, that it would be expressed in the deed $500, merely to save the expense of stamps to the value of $1.50, and at the same time incur thereby a penalty of many times that sum; while it is not improbable that it may for some reason have been done with a view of preserving an apparent uniformity in the considerations of the two conveyances. The two motives could hardly coexist, and there is such a want of probability as to the former, that, as between them, the latter must be accepted as the true one. But in any event the Drains are innocent purchasers, and not a party to or participant in either alleged fraud or fraudulent intention;. and while they may be affected by the invalidity of the deed to them on account of their grantor's fraudulent omission to sufficiently stamp the sa.me, I do not think that justice or equity requires the court to permit the plaintiff to amend his bill, after a demurrer thereto has been allowed, sp as to enable him to enforce a claim to the property founded opon such invalidity; particularly as he had ample opportunity to bring the matter before the court by proper allegations in the amended bill to which the demurrer was taken. Besides this, there is much force in the suggestion that the plaintiff ought not to be allowed to proceed against the property conveyed to the Drains, until it appears that the property of J. A., either in his own hands or that of his children, is not sufficient to satisfy his claim. The motion to amend is denied, and the bill as to the defendants Charles and John C. Drain is dismissed, with costs.
HAYES 'V. DAYTON.
(Circuit Court, 8. D. New York. November 10,1880.)
OF LETTERS PATENT.
A bill brought by a patentee to recover profits and damages for an alleged infringement of 38 claims in six different patents, is demurrable on the ground of multifariousness, where there is nothing in the bill to show that any two or more of the patents are in fact, or are capable of being, used in making a single structure, or that the defendant lias so used them, and where the defendant would be clearly prejudiced by being compelled thus to defend himself in one suit against so many alleged causes of action. 2. EQuITY RULE 37 CoNSTRUED. Equity rule 37 applies where a demurrer and an answer are put in at the Bame time to the whole ofa bill.
J. H. for plaintiff. G. G. Frelinghuysen, for defendant. BLATCHFORD, C. J. The bill ,in this case states that the plaintiff invented certain "improvements in ventilators, skylights, skylight turrets, conservatories, and other"glazed structures and ventilating louvres" described in "several letters patent and reissues thereof." It then avers that he obtained six several patents, Nos. 94,203 and 100,143 and 106,157 and 112,594 and 143,149 and 143,153; that he obtained reissues of all of them, the reissues being six in number, one of each, (though it does not appear of which original any particular reissue is the reissue,) the reissues being numbered 8,597 and 8,674 and 8,675 and 8,676 and 8,688 and 8,689 j and that since the reissues the defendant has, without authority, infringed sltid several reissues, and made, used, and sold said inventions. The bill interrogates the defendant as to whether he has made and sold "ventilators, skylights, skylight turrets, conservatories, and other glazed structures, and ventilating louvres, and embraced within any or either" of the said "several letters patent and reissued letters patent;" also, in four several questions, as to whether he has made, sold, or used what is claimed in each one of four claims in reissue No. 8,597, quoting it; and the like as to each on'e of fifteen claims in reissue No. 8,674, and of seven claims in reissue No. 8,675, and of two claims in reissue No. 8,676, and of seven claims in reissue No. 8,688, and of three claims in reissue No. 8,689, there being 38 several claims thus inquired about. The bill prays for a recovery of the profits and damages from the said unlawful making, using, and sell· jng by the defendants of the said "improvements in ventilators, sky-