BRADDOCK V.' LOUCHHEUI.
BRADDOCK: v. LOUCHHEIM et aI.
D. Pennsylvania. No. 89.
May 23, 1898.)
PROOF OF FRAU,D' IN COURTS OF EQUITY-SUFFICIENCY OF EVIDENCE.
Where plaintiff's evidence, and the circumstances upon which he relles, produce only a vague misgiving as to the good faith of defendants In the transaction complained of, which misgiving the testimony on their behalf is sufficient to dispel, the evidence is insufficient to sustain a charge of fraud, even in a court of equity.
This was a bill filed by Isaac A. Braddock against Henry S., Sam· uel K., and Joseph Louchheim, to set aside transfers of property, and for injunction and an accounting. On final hearing. H. A. Drake, for complainant N. Dubois'Miller, for respondents. DALLAS, Circuit Judge. If this bill had been demurred to fol' multifariousness, it would, I think, have been difficult to sustain it. With the matters to which it mainly relates, one of the defendants is not in any manner connected, and with the single subject which does affect him at least one of the other defendants is not at all concerned. But as the case has now been heard upon pleadings and proofs, I will dispose of it on the merits, without reference to this defect in the bill, or to the objection for prolixity, to which, under l'ule 26, it appears to be !,!ubject. . There can be no decree against Joseph Louchheim. None could be made effective, except by injunction to stay proceedings in a state court, and such an injunction cannot be issued. Rev. St. U. S. § 720. The note held by JosepIlLouchheim, which it is asked that he shall be required to deliver up for cancellation, has been sued upon in a court of New Jersey; and in plaintiff's brief it is said, "If complain· ant is to pay this note [and this court has difficulty in restraining a suit in a state court], the amount of this note ought to be charged to [Henry 8.] Louchheim." This seems to admit that the prayer of the bill is, substantially, fol' an injunction which congress has inhibited. The fraudulent schemes, devices, and acts charged against Henry S. ,Louchheim and Samuel K. Loucbheim, by means whereof, as is al· leged, the latter acquired and holds the legal title to certain property, real and personal, in fraud of the plaintiff, have not been proved. In arriving at this conclusion, I have not been unmindful of the rule that in courts of equity express and positive proof of fraud is not required. Fraud may be deduced from collateral facts, and can seldom be shown by direct evidence. But it is not to be presumed upon circumstances of mere suspicion, leading to no certain result; and in this case the evidence of the plaintiff, and the circumstances upon which he relies, produce, at the utmost, but a vague misgiving as to the gopd faith of the defendants in the transactions complained of, and this misgiving the testimony on their behalf, when fairly considered, is amply sufficient to dispel. It could serve no useful purpose to discuss the proofs in detail. They are
87 FEDERAL REPORTER. , . :.}'.'IJ,' ".
quite voluminous, intricate, and involved. An exhaustive review of them is not and no, partial them would be whether or not a techsatisfactory. ", It iS,llot necessary' to nical partnerShip was·created;aEi is"alleged in the'bilI,between Henry S. Louchheim and the plaintiff. It is sufficient to say that out of their dealings with respect to the property in question there arose a liability, Qn the, part' of HenryS:Louchheim to account. This he has conceded by annexing an account to his answ;er, which,however, the plaintiff insists is not correct, and to which, in the course of his examination as a witness, he has indicated-at least to some extent-his objections. This he did not do with certainty or precision, but it was not: then reqUisite that he should. The account is fOr settlement after, and not before, decree; and a reference to a be made; but it master to take and state anaccmillt will, if will, of course, be understood that the proceedings in the master's office are not to be so extended as to' reopen any of the questions now decided. K. LouchAs to the, defendants Josepb., J.ouchheim heim, the bill is dismissed,withcosts. As to the defendant Henry S. Louchheim, the bill is retained for the purpose, only of an accounting, and an order otreference to th&t:end will be made, if applied for; but, in default of such application within 10 days, the bill will, on motion, be dismissed a$ to Henry S. Louchheim also.
CENTRAL TRUST CO. NEW YORK v. GEORGIA PAC. RY. CO. April 12, 1898.) BROOKS et al. v. CENTRAL ,TRUST CO. OF NEW YORK et al. (Circuit Court of Appeals, Fifth Oircuit. No. 644.
CONTRACTOR'S LIEN ON RAILROAD PR()PERTy":"'FoRECLOSURE SALE SUBJECT TO LIEN-RIGHTS AND LIABILITIES OF PURCHASER.
Interveners recovered judgment for $10,000 in a court, and a decree that it be a lien on that part of the railroad and rIght of way embraced in their construction contract, which lien they seek to enforce in the foreclosure case. The decree of fdreclosure in' the main case provided that the purchaser should take the property upon the express condition that he would pay all claims which, should be adjudged by the court to be prior In lien to the Ijlortgage foreclosure, and this provision was preserved In the decree confirming the s1l1e. The master found and reported, after the sale, that interveners have a lien, as established by the decree of said state court, which is superior to the lien of the mortgage foreclosure, only as to the improvements placed by them on the railroad right of way; that It would be destructive of the interests of the defendant railway company, of the interveners, and of the 'purchasers to allow such improvements to be detached from the premises: that they should have been and were sold together, and the reasonable value of the improvements has passed ratably into the common fund. The master's report was approved by the court. Held that, ,a lien havIng the purchallers had no rightto contest its limits or extent on tbe railroad property, and it was immaterial Whether It covered anyspeclfic structures or other integral part of the Interveners were, entitled, to a decree ordering the purchasers with interest thereon from the date to pay the amount of their of its recovery \n the state court. '