104
J'EDERAL REPORTltR,
vol. 42.
KAHN r,
v.
WEILL.
(OlrcuU Oourt, S. D. Oalifornia. May 19, 18t10.)
a ,uit to declare. a deed absolute on its face a mortgage, and to redeem thet'efrom, it appeared that' 0., who was complainant's mother-ill-law, was indebted to defendant and to oomplainant; that she executed to defendant,an absolute deed to aU her land, which was not at the time worth more thau the debt, and received from. him all evidences'of debt. This deed comDlainant claimed to have been intended as a mortgage, under an, agreement by which he was to have the right to redeem the land thereby conveyed on his subsequent payment of all the indebtedness. O. , testified that the deEl'd was intended as an absolute conveyance, and letters from hel: to defendant and to complainant tendel1 to show that, this was the ,IJ;lIl" There were letters from complainl!<nt to defendant and to 0., running through "1'eral years, during which he made no claim. that the deed Was a mortgage. His te&timony was contradictory and improbable. Defendant, and other members of his Mm,. testified that the deed was absolute. HelCL, that the deed was an absolute con-
AB80LUTB IN. FORM-EVIDENOB.
. ··
veyance.,
Jarrett T. Richards, George Pearce, and Rodgers cl' Munday, for complainant. Stanly, Stoney & Hayes, for defendant.
In Equity.
Ross,J. This is a $uit in equity in which the complainant, by his bill,. seeks to obtain a decree that a 'certain deed, -of, date February 24, 1881, absolute in form, and executed by one Augustias de la Guera de Ordand .complainantl and purporting to conV'eyto the defendant five ,certain parcels of land situ,ated in the county of Santa 'Barbara, and tEl-' ferred 'to; fur' CClnvenience of reference; as the "State-Street Lot," the Tract," the "Ord Garden," the "Montecito Tract," and the ".'fodos Santos Rancho Property," oonsisting of an undivided interest in tlhe TodosSantos rancho, was in' fact a mortgage,and that the defend'llhtbepermitted to redeem all of the said property. In respect to the alleged rights of the· oomp]ainant,no distinction is made in the bill, which i<l sworn to by complainant, between the different parcels of land. the same rights are therein asserted to each. It is,among oQther things, in substance, alleged that, on the 24th of June, 1876, Augustias de la Guera de aid was the owner in fee and in possession of the said five ,parcels of land, and that there was then existing thereon a mortgage executed by her to the defendant, as trustee for the firm of Lazard ]'re:oos, to secure an indebtedneRs from her to that firm, then amounting to $11,000; that on the day' mentioned Mrs. Ord paid $4,984.65 of the said indebtedness, and the Todos Santos rancho was thereupon released from the mortgage; that Mrs. Ord was at the same time indebted to the complainant, who was her son-in-law, in a large amount of money which she was desirous of paying, and he of receiving, but, beinK unable to do so without further incumbering her said property, and being also desirous of aiding and advancing complainant in business, on the 30th day of May, 1877 I she made and delivered to complainant this power of attorney:
KAHN V. WEILL.
"Whereas, I, Augustias de la Guera de Ord, am indebted to Moise Kahn in a certain sum of money, and whereas I am desirous that said Kahn have the management, control, and disposition of my hereinafter mentioned property, for the purpose of satisfying the above debt due by me to him, now I, Augustias de 13 Guera de Ord, in consideration of the above, and that s/loid M. Kahn do accept the trust. do hereby constitute the said M. Kahn my true and lawful attorney for me, and in my name, place, and stead, to manage and control, collect the rents, issues, and profits thereof, by suit or otherwise, and receive the same, mortgage, borrow money, bond, lease, sell, or in any way dispose of all or any part of the followinK described premises 01' any interest therein, as to him may seem best, to-wit: All my right, title, and interest in and to all the certain tract of land or rancho situated in the county of Santa Barbara, state of California, called and known as the · Todos Santos y San Antonio Rancho,' confirmed and patented by the government of the United States to the widow, heirs, and executors of William E. B. Hartwell, deceased, by decree of confirmation and letters patent dated November 20th, 1876, and recorded in the office of the county recorder of Santa Barbara county, in Book A of Patents, page 305 and 315 inclusive, which letters patent are made part hereof for purposes of description; and in my name and stead, for the above purposes. to make. execute in writing, and deliver any and all mortgages, notes, releases, and all other necessary instruments and documents, and to collect, sue for, and receiv:e all sums of money due from anyone froID the management and disposition of said property. "Witness my hand and seal, this 30th day of May, one thousand eight hundred and seventy-seven. "AUGUSTUS DE LA G. DE ORD. [8ea1.]" The billaUeges that the complainant accepted the power, and under-. took the service; that he called upon the defendant, who was at the time a member of the firm of Lazard Freres, which firm was then engaged in the business of banking and loaning money in the city of San Francisco, and with the members of which complainant then was and had long been on intimate friendly and social relations; that defendant was willing to make the desired loan upon the execution by Mrs. Ord of a deed for the Todos Santos rancho property as security for such loan, which defendant preferred, and advised complainant to procure, and which complainant did procure to be made, and upon the execution of complainant's note as,"further security;" that the loan was accordingly made, and seby the deed from Mrs. Ord and the note of complainant, and that, by the direction of Mrs. Ord, defendant, who, throughout all of the transactions, acted for and in behalf of Lazard Freres, on the 6th of August, 1877, executed to complainant in writing this defeasance: "I hold the promissory note of Mrs. Augustias de la G. de Ord, of Santa Barbara, state of California, dated the 16th day of March, A. D. 1876, for $11,000, on which there is due me, principal and interest, $6,240 92-100. I also hold the note of M. Kahn, for $5,000, dated August 6th, 1877. And the said Ord having conveyed tome, by deed dated Julj' 9th, 1877, all her interest in the tract of land situated in the county of Santa Barbara. and known 8S the "Rancho '.rodos Santos y Siln Antonio," which deed is upon its face for the consideration of $5.000, and is absolute in form, now, therefore, this is to certify and make known that said deed, though absolute in its terms, is, in point of fact, given to secure, first, the payment of the said note of M. Kahn for $5,000. with interest. that may accrue due thereon; and, second, to further secure the principal and interest due me on said note of Mrs. Ord. v.4SF.no.12-45
708'
FEDERALREPORl'ER,
vol. 42.'
hereinbefore ftrllt above I agree not to the lands of the said Todos Santo y San Antonio to the payment of the said note of Mrs. untilI nave first exhausted the securit,ies 1 ab:eady hold therefor, and thenqnly any deficiency that ,Qlay exist after my present securities are eJ.Chau,sted. " 4n4 I agree that, upon, tpe payment to \De by the said Kahn of his saId note, ,with interest, as in said llote provided, and, also upon the payment of note of Mrs. Ord, with interest, and further payment to me of all sums, of money by me for any purpose expended for the protection of said land, t'or further or more effectually the interest in sj;\id lands men,tionedin said deed, and aU expenses and cparges that I may incur or make in looking after apd prntecting or improving said property, and c()stIJ and attorneys' charges in enforcing the payment of said money secured" deed, 1 will convey the so conveyed to \De by said deed of 4ay Of July, 1877, to M. Kahn, to the written, request of said Ord, ,as, expressed in her letter to me of Jllly 9th, myqand and seal, this 14th day of November, A. D. 1877. '.' , " [Seal.] execution, the words ·of even date herewith,' in line 8, I, were erased,apd, the "dated Aug. 6th, 1877,' interlined."
,.'Jlt.]:a.
,',The 'bill then alleges that, about'the month of Janunry, 1881, Mrs. Ordbeing still indebted to Lazatd Freres, and being still unable to pay complainant the amount due him, and her indebtedness to Lazard FreWlsibeiilg then about to become barred by the statute of limitations of' Cl11jfornia, the said ,LlI-zard Frares. JPP;ved and induced complainant to and 'he did procure MrS. Ord to sell all of her said property, together with her equity of redemption therein,' to complainant,with the underagreement that complainant shotlldand would assume the paymentof the entire indebtedness of Mrs. Ord to Lazard Freres, and join her:!n the conveyance and tranSfer of the whole of the said real propertr, including the said Todos Santos tanchoproperty, 'all to be held by the said' Lazard Fretes as security for the payment of said indebtedness of oon1plainant to them, and that this was con.sentedand agreed to by complainant and Mrs.Ord, as well' 9.sLazflrd Freresj9.nd that the said purchas!j from Mrs. Ord by complainant was consummated on the 24th of FebruarYi 1881, and her said indebtedness assumed by complainant, . and that complainant joined Mrs. Ord in the' transfer of all of said property to Alei.lUl.nder Weill,9.s and forse6urity fOf the payment ofthwsaid indebtedness 'of both complainant and Mrs. Ord, amounting at that time ,to about $18;870, with interest,nnd 110t otherwise. The bill further alleges that the property was at that time reasonably worth $30,000, and at the time of the bringing ofthissuit was worth $100,000; that at the execution of the deed of date February 24, 1881, it was cQv;elltl.nted and agrl'ied between. complainant and Lazard Freres that accepted.a;s and obligor for the pre-existing ..of Mrs. Ord and himself to Lazard Frer.es, and that said deed should, be held by them through their said trustee, Alexander< Weill, astH"brtgage to seourethl;l payment, within one year from the date the indebtedness soas6umed and owing by cOl,llplainant to Ilnd any rurther. advllnc!lS made bY; that firm' ,to COlllthereof. TheJ>,ill ;further on or aoou t,
,or
707 October for a valuable in performance of her legal obligations, and for the purpose of 'clothing complainant with hapiliment of title as the true owner of the ,premises. made, executed, and delivered to complainant a certain deed, wherein and whereby sht>conveyed -tohim a, 11 her right, title, and interest in and to all of said parcels of land. The bill further alleges that, since the making of the deed Of date February 24, 1881, complainant has been inpossession of all of the property, through himself and his tenants, and it alleges his'Yillingness and to pay the amourit 'of the alleged indebtedness to Lazard Freres, and asks a decree permitting him to redeem the property. Besides answering the bill the defendant filed a cross-bill, in which it is alleged that he is,and"since the 4th day of March, 1881, has been, the owner in fee, and entitled to the possession, of all of the property in question; that he derived title thereto through Augusti;is de la Guera de Ord, who ,vas, on said41h day of March,1881, seised in fee, and in the possession, of each of said parcels of land, except that referred to as the "Todos Santos Rancho Property," the title to wliich latter property, it is alleged, was then in cross-complainant in trllst for purposes afterwards stated; that on the 16th of May, 1876, Mrs. Ord was seised in fee oreach of said parcels of land, and, being so seised, did on that day, for a valuable consideration, execute to cross-complainant her promissory note for $11,000, and as security therefor executed at the same time to crosscomplainant a mortgage upon all of said property; that thereafter, and on or about the day of July, 1877, cl'oss-complainant, at the request of Mrs. Ord, released from the operation of said mortgage the Todos 'Santos propertYi that thereafter, and on the 9th day of July, 1877, Mrs. Ord, being still seised in fee of the Todos Santos property, executed to cross-complainant a deed purporting to convey and conveying to cross-complainant in fee-simple the said Todos Santos property, which deed was made and accepted in trust, first, to secure the payment by Mrs. Ord' of the amount then due upon her 'aforesaid note and mortgage, and the payment by the defendant, Moise Kahn, to cross-complainant of the sum of $5,000, with interest, to be thereafter advanced and loaned to him by cross-complainant; and, after such payments,in trust to convey the said Todos Santos property to defendant, Kahn, in pursuance of a written request and written instructions signed by Mrs. Ord, and addressed to and delivered to him contemporaneously with the delivery of the deed of July, 1877, and as part of the same transaction, which request and instructions were in the words and figures following, t<rwit: BARBARA, July 9, 1877. "AZea;ander Weill, Esq.-DEAR BIR: My deed of conveyance of the date of July, A. D.lS77, conveying to you my undivided interest inthe Rancho Todos Santos y San Antonio, will handed to you by my son-in-law, Mr. M. Kahn. and to him YOIl will please pay the consideration expressed in said'deed., You will also, upon the repayment to yon of your money and interest, convey by proper deed the property described in my deed to you to Mr. Kahn, and Mr. Kahn's security give him such writings as shall evidence his right to such
708
FEDERAL REPORTER,
co:pveyance upon repayment to yOIl being made, and be mutually satisfactory to you and him. I am owing Mr. Kahn, and he is to receive the property after you are paid. A. DE ORD." "Yours, very truly, cross-bill further alleges th,at subsequently, to-wit, on the 6th of 1877, the defendant thereto, Moise Kahn, executed to crosscomplainant his promissory note for the sum named in said deed as the consideration thereof, namely, $5,000, and interest, and, that thereupon and thereafter cross-complainant, in pursuance of the afore$aid instructions of Mrs. Ord, advanced to Kahn the said sum of $5,000; that afterwards, to-wit, November 14, 1877, in pursuance of the instructions consaid letter of July 9,1877, cross-complainant executed to said Moise Kahn the defeasance referred to in the bill and hereinbefore set ,out. ,The cross-billfurther alleges,that,on said 14th of November, 1877, ... Ord and Moise Kahn indebted to cross-complaiq.ant in the aggregllrte sum of $11,000, evidenced by their promissory notes mentioned In said defeasance; that to-wit, on the 24th day of February, 1881, the said notes of Mrs'. Ord and Moise Kahn were unpaid, aodthey were still indebted to in a large flum of money by the aforesai{mortgage and deed, to-wit, ina sum exceeding $18,000, and the said indebtedness, and cross-complainant's right of actiontherefor, were about to become barred by the statute of limitations of that cross,complainant was therefore about to commence an action against tbe said Mrs. Ord and the said Moise Kahn to foreclose the said liens, and so informed them; that the value of the property was not then equal to the amount of the liens; that thereupon Mrs. Ord, actthe advice and with the consent of to crossing complaina.nt that, instead of foreclosing the said mortgage and liens, should, pay to Mrs. Ord the probable costs of such foreClosure, and should surrender the, said notes and evidences of inMrs. Ordand ofMoise :Kahn to be and that, in considElration thereof, alld in ,pischarge of said indebtedness, she would execute to cross-complainant a deed conveying to and vesting in perfect title to .each of said parcels of land free from any and all equiHes of the said Mrs. Ord and of Kahn; that said proposition was accross,complainlJ,nt, and, on the 24th of February, 1881, a deed pUl'pprting to convey each of said parcels of land to cross-complainant in fee-simple absolute was prepared by him, in 'which Mrs. Ord and Moise Kahn were named as grantors, and cross-complainant as grantee, which was sentto defendant, Kahn, at Petaluma, in Sonoma county, to be executed and acknowledged by him, and that he was then and there inforllled by cross-complainant that he was made a grantor in said deed, beclI;u,se the aforesaid instrument given to him by· cross-complainant on the 14th·.ofNovembel', 1877, had provided for a conveyance to him of a portion .of the property upon payment of the said indebtedness; that, after being So informed·, the defel1dant, Kahn, did, on the said 24th day of Febrriary, 1881, execute lind acknowledge the said dE)ed before a notary public in and fQrSonoma \Jaunty, did then return the Slj.me to
709
complainant to be executed by Mrs. Ord; that cross-complainant thereupon forwarded the said deed to Mrs. Ord, who was then a resident of Santa Barbara county, to be executed by her; that on the 4th day of March, 1881, Mrs.Ord, in consideration of the payment to her by crosscomplainant of the sum of $200, and of the release and discharge by cross-complainant of all of the aforesaid indebtedness of herself and of Moise Kahn, did sign, acknowledge, and deliver to cross-complainant the said deed, which was thereafter and on the same day filed for record and recorded in the office of the recorder of Santa Barbara county; that, upon receipt of said deed from Mrs. Ord, cross-complainant paid to her the sum of $200, and surrendered to her her aforesaid promissory note; and thereafter, to-wit, on the9th of March, 1881, cross-complainant did cancel and surrender to defendant, Kahn, all notes and evidences of his said indebtedness, and did discharge him from all obligations to pay the same. The cross-bill further alleges that, upon receiving said deed, crosscomplainant did enter thereunder upon and take possession of each of said parcels of land, except the Todos Santos rancho property, and did hold and retain possession thereof, claiming title thereto under said deed, until some time in the month of October, 1886; that at the time of the execution of the deed of date Fe.bruary 24, 1881, the title of Mrs. Ord to the Todos Santos rancho property was held subject to a life-estate, then vested in one Teresa Hartnell, who died thereafter, and that upon her death cross-complainant entered upon and took possession thereof under the deed of date February 24, 1881, and held such possession until some time in October, 1886. The cross-bill further alleges that, on the 8th of October, 1886, and while cross-complainant was so in possession of each of said parcels of land, except the Todos Santos property, .and claiming and having title to all of said parcels under said deed of date February 24, 1881, the defendant, Kahn, induced Mrs. Ord to execut, acknowled ge, and deliver to him a deed, bearing date on that day, purperting to remise, release, and quitclaim unto him, the defendant, Kahno his heirs and assigns, the right, title, and interest of the grantor in and, to 'the Todos Santos rancho property, which deed the defendant" Kahn, filed for record on the 12th of November, 1886, in the office of the recorder of Santa Barbara county; that thereafter, to-wit, on the 29th of October, 1886, and while cross-complainant was still in possession of each of said parcels of land, except the Todos Santos property, and claiil1ing and having title to all of said parcels under said deed of date February 24, 1881, the defendant, Kahn, induced Mrs. Ord to execute, acknowledge, and deliver to him a deed, bearing date .on that day,purporting to remise, release, and quitclaim to him, the defendant, Kahn, his heirs and assigns, the right, title, and interest of the grantor in and to ea'Ch of said parcels of land. The cross-bill further alleges that, ever since the execution of the deeds of October 8 and October 29, 1886, the defendant, Kahn, has claimed and still claims to have acquired thereunder from Mrs. Ord, and to have, the legal and equitable title to each of ofland, and the title and right of possession thereto " alleges that the deeds of October 8 and oCtober 29, 1886, were made to Kahn without consideration; that at
FEDEHAL REPORTER,
,-:the1timeoftheir execution thegrl1ntor therein did not have or 'c1aimto "!haVe-AlDY right, title, or interest in or to either of said parcels of land, 'jandthat the defendant, Kahn;, in accepting the same, well knew that theigrantor therein had already conveyed her title thereto to cross-complainant,and that she no longer:claimed to have any right to or interest themioj 'and that said deeds did in fact, operate to convey to or vest dn,thedefendant, Kahn, an)' title,to or intereat in fiitherof said parcels. ''l'he,cross-billJurther alleges on the 28th of January, 1887, the de,fendant, Kahn, caused to be,published in a newspaper published and ,largely circulated and Barbara county, a notice stating, ,amongiother things, himself to 'be'the owner of all of said parcels of land, lalil.d,that cross-complainant did not acquire the ownership or right of pos6eBsionohny of said land by the ,aforesaid deed of date'February 24, ·1881.. The cross-bill also contains allegations concerning the taking of possession of the premises in coihtrdversy su bsequent to the month of Octob.er, 1886, by parties enteringul1der the defendant, Kahn, and in reJspectto the bringing of actions at law by cross-complainant to recover .possession from such parties. It also makes'reference to the allpgations .contained in the bill respecting the agreement under which the deed of ;dakFebruary 24, 1881 ,was executed., imd denies each and every of its allegations respecting that matter, as also the averments of the bill in re,gatd to tbe deed made by Mrs. Ord to tbe defendant, Kahn, of date October: 29, 1886; and, to,tbe contrary, alleges tbat tbe deedof date February 24, 1881, was not intended as a mortgage or otber security, but was'infact, what it ptirportedtobe, a deed absolute, conveying to crosscomplainant in fee-simple all of the'said parcels ofland, and was so intended by all of the parties tbereto; that tbe claims of the defendant, Kahn, in respect to the deed of date February 24, 1881, as well as to tbe deeds of October 8 and' October 29, 1886, under wbich be also asserts title to tbe premises, constitute a cloud upon the cross-complainant's title thereto; and have and do impair tbe market value of said property, and embarrasses and prevents cross-complainant's enjoyment thereof. The prayer of the cross·J:Hll is for a decree adjudging the cross-complainant to be seised in fee and entitled to the possession of each of said parcels ofland,; that the defendant, Kahn, has no title, estate, or interest at law or inequity in either of them;' that tbe deed of date February 24, 1881, Was intended by all of the parties thereto to be, and that it was infact, an absolute conveyance of the premises described therein to cross-complainant,and was not intended to be, nor was it in fact, a mortgage or deed oitrust; that neither of the deeds of October 8, 1886, and October 29, 1886, collveyedaJDyright, title, orinterest in or to the said parcels of,Jand or either of themjthat the ,deeds of October 8 ana. October. 29, 1886, create a cloud upon the title ofthe cross"complainant, and that tbe defendant, 'Kahn, be reqliired to surrender the same for cancellation, arld that:be be: enjoined {lJom hereafter claiming or asserting any 'right .or title tbereunder. I shall not undertake to refer in 'detail to all of the evidence in tbe case, 'for',the record is too voluminous to a.dmit of such reference without IL.; :!'l' " f.
<.
'J
·
711'
extending this opinion beyond all reasonable limits; but I will state as briefly as I can the reasonsJor the conclusion to which I have come, after a careful consideration of the case, which is the same conclusion to which I was inclined at the trial. If the deed of date February 24, was in fact, what it purported to be, a deed absolute, then, manifestly, those of October 8,1886, and October 29, 1886, from Mrs. Ord to Moise Kahn conveyed nothing, and they become unimportant, except in so far as they, together with the circumstances under which they were executed, tend to throw light upon the true nature of the deed of date February 24, 1881, and except in so far as they may cast a cloud upon the title set Ip in the cross-bill. As has been already said, the complainant, by his sworn bill, asserts precisely the same rights to each of the five parcels of land. Yet it is not pretended that the evidence shows that, prior to the execution of the deed of date 'February 24,1881, Mrs. Ord ever executed to or vesting in him any interest in either of the any parcels except the Todos Santos rancho, and, as to that, the only writings, under which he claims to acquired an interest are the power of tomey executed to him on the 30th day of :May, 1877, and the letter! from Mrs. Ord to Alexander Weill, of date July 9, 1877. In respact to the first of. these instruments, the complainant, in his testimony given at San Francisco, after referring to Mrs.Ord's indebtedness to him, and his recapitulation of it to her on May 28, 1877, aggregating, as he claims,' $4,528.33, and her promise to pay it, said: "I said, [to Mrs. Ord:] ·You have been spending your money, and In a little while you will be without anything. If you go along as you do, Jouwill eat up all there1s, and you will have nothing to pay me. l!fow, I promise this to you: Give me that ranch [meaning the TodosSantos, rancho property) in payment of the money. I will not let you starve, and I want to get uito ' You give business. I will see you do not want so long as I have me that rancho, and so pay me all you owe me.' Question, (to complainant.) What did she say? Answer. Make out the documents. ,Q. Did you do so? A. ldid. Q., What document did you make out? A. Power of attorney." -That is to say, the power of attorney which has been hereinbefore out, and which was thereupon introduced in evidence. Passing the tion of thecompettmcy of this evidence of the complainant as to a parol sale by Mrs. Ord of herinterest in the Todos Santos rancho, and of his claim that the power of attorney was made in furtherance of such parol sale, it is to be observed that the testimony itself is not only directly' opposed to that of Mrs. Ord upon the same subject, but it is wholly inconsistent with the recitals of the power itself, by which, as has been seen, complainant was constitutea the attorney in fact of Mrs.Ord, for her, and in her name, place, and stead, to-manage and control the Todos Santos rancho property, collect the rents, issues, and profits thereof, and to borrow money, mortgage,hond, lease, or in any way dispose of that property as to him should seem best; all, however, for and in the naril",,' place, and stead of Mrs. Ord, and for the purpose expressly declared 'in the power itself, which was that, for the reason that she was indebted: to complainant; she was desirous that he should have the !' management,. manifestly, that o'U-t control,;a.nd disposition" of the property, to
712
of the proceeds the debt might be satisfied. So far from power evidencing a sale by Mrs. Ord to complainant of the Todos Santos property, ifdid not vest in complainant any interest therein; in other words, it was not a power coupled with an interest, for it did not purport to vest in complainant any interest in the land itself, which was the of the power, but only in such proceeds as might be realized therefrom by the exercise of the power. Humt v. Rousmanier, 8 Wheat. 203. Furthermore, according to complainant's own testimony, he never performed a single act under and by virtue of the power of attorney. When asked by his counsel what he did with it after it was delivered to him, he answered: "I came to San Francisco shortly after that to see Mr. Alexander Weill, and to get some money on thllt. I explained to him the circumstances, and what I wanted, and presented the power to him; after which he said: 'Better for your own security if Mrs. Ord make a deed of that ranch to me absolutely, accompanied by a letter from her telling roe to give you the amount of money tQat you speak of, and that, upon the payment of t113t money back to me, with interest, to reconvey the pruperty to you.' I req uested Mr.. Alexander Weill to have the document' and deed drawn up himself, and give them to me, and I will send them to her. Question, (by counsel.) Did he do so? Answer. Yes. sir. The next day.hehad the papers ready. and handed them to me, and I forwarded them l>ymail. Q. What, then, did you do with the power of attorney that you have just offered in evidence here? A. I did not do anything; I put it in my p o c k e t . " · ; . Mrs. Ord was at this time in Santa Barbara county, where ehB resided, and was· therefore entirely ignorant of the preparation of the deed and letter of July, 1877, which were drawn by the attorney of Weill in San Francisco, at the request of complainant. The deed was an absolute deed in form, from Mrs. Ord to Alexander Weill, for the Toaos Santos property, expresl'ing a.consideration 0[$5,000, and was, according to the testimony' of complainant just quoted, made to take the place of the power of ltttorney feir the better security of complainant; whereas, according to the sworn 8vermentsof the> bill, which are admitted by the answer, Weill preferred for his own security to ma.ke the loan upon a. deed from Mrs. Ord to himself, and required, as further security, the execution of complainant's note for the amount of the loan,-$5,OOO. The letter has been already set out in full. , Like the power of attorney, not only does it fail to support the testimony of complainant that there was a parol sale by Mrs. Ord to him of the Todos Santos property in May, 1877, in liquidation of her indebtedness to him, which he claims then amounted to $4.528.33, but in terms it exc1udesany such idea. It expreSSly recites that she then (July 9, 1877) owed him money; and it is nowhere pretended that Mrs. Ord incurred any indebtedness to complainant between the time of the executionpf the power of attorney and the preparation of the deed and letter of July, 1877. It directed Weill to pay the con· ,i'aeration expressed in the deed, which was $5,000, and several hundred dollal's more than cOlUplainantclaims that Mrs. Ord then owed him, to complainant, and that, upon the repayment of the sum borrowed, with. interest, Weilloonvey the prope'!=ty to complainant by. deed, the rea-
KAHN
713
son therefor being stated in these words: "I am owing Mr. Kahn, and he is to receive the property after you are paid;" and for complainant's security Weill was, by the letter, directed to give complainant sllCh writings as should evidence his right to such conveyance, This letter, together with the deed, was sent by complainant to Mrs. Ord at Santa Barbara, who signed and acknowledged the deed, and signed the letter, and returned them to complainant; and upon the delivery of the deed to Weill, and the execution by complainant of his note as further security for the amount, Weill paid complainant, from time to time as he called for it, the consideration mentioned in the deed, namely, $5,000, and subsequently signed and delivered to him the defe-asance hereinbefore Bet o u t . . ' , Even if complainant had repaid the $.5,000 so loaned by Weill, with' interest, and had received fr9m him a deed for the Todos Santos property, I.conllider it perfectly clear that he would have held it, npt abS()lutely, but only as security for such money as Mrs. Ord really owed. hiD). The letter dJd not pretend to say that after Weill was paid complainant' was to receive the property, absolutely, in payment of Mrs. Ord's debt to him; and, if it had, there was no agreement on complainant's part t9 receive it in such payment·. ' Besides,in thedE-feasance Weill ecuted to .complainant, and which he accepted, it is expressly stated' the deed of July 9, 187,7, was given to secure, first, the $5,000, as its consi,dpration, and which was, already said, further secured by complainant's note; and, second, the balance due on the $11,000 note executedibyMrs Ord on March 16, 1876, whichbalance then amounted to $6,240.92, and which was also securedby.the mortgage given at the time of the execution of the note, and which was then still existing on all of the property originally embraced in exceptthe Todos Santos rancho. If, ascomplainant contends, the Santos property was to become his, abRolutely, upon the repayment 'of the $5,000 borrowed from Weill in July, 1877, it is difficult to stand why it should be held Qy Weill as additional security fo\" the balance due by Mrs. Ord on per $11 ,000 note, of date March 16, 1816. Moreover, Mrs. Ord, in her testimony, explicitly denies that she ever sold or a.greed to sell the property to complainant, or that her indebtedness to him was anything like the amount claimed by him, or that the letter to Weill was intended by her to authorize the transfer of the prop:erty to complainant, absolutely; and that such was not the fact is further evidenced by a letter to complainant, of date July 12, 1877, frorr. Mrs. Ord's daughter Rebecca, now Mrs, Pechine, who, it appears from the evidence, conducted, on the part of her mother, her correspondence with complainant, in which letter MrR. Pechine says: . that document and letter (meaning the deed and letter of July 9,18771 that my mother signed,and whkh you sent from..san Francisco, my mother thinks it well for you to ask of Lazard Freres a ·receipt 'of that Jetter which she signed. Pancho quttierez 'lame to acknowledge her signature, andreadth,e document [meaning the deed] which you sent. and he said it ·a ''De11.ta a'bsoluta,' [absolute conveyance.] I know nothing about those doc·uments;·tmtl of course I had' nothing to say to that. About the receipt of
[714
FEDERM'
which it is well for ycm to send it to.her qbtained, you mightD;leetwith an accident, or. supposing you · (he, etc.· it is better for ; . to have her . .' , · ,i 1 ," I ' ' ' .. ' .;,,'. ,.; '!
be acMpted'jit was no 'cotioern 'of Mrs. Ord
!
,ment ofthe deedatid,ietter; 'No othefof further instrument or instruwere executed' by 'Mrs. Ord'iIi irehition to any of the property in priort6'thedeed of date February 24, 1881, which is the have adjudged a mortgage, and from which ·he seeks to redeem.' Anumber of letters preliminary to the execution of'that deed passed between the respective parties, and are in evidence, nodoubt as to its true i,ntent and purpose. In January, '1881,,r,theindebtedIle!,s to Lazard Freres;not having been paid, and hEr letter:"; i "
whtit should be<ionHiof.'the pa:per'tcibe given by Weill in acknowledg-
",' I
,,'
,.
"
' , ; ",:BANKING
HOUSE ,OF LAZAR])'FRUnEs,
,,j
6th, 1881. ·· :Petaluma. Oal,;.+-DEAR BIR:The mortgage held by .WIl; propt>rtiel;J,o:f Mrs. Qrd wUl shortly outlaw. We .. ... a.t y oll . m. e .i.nto tile pm on. the .occasion: of your firstvislt .. a.rrange fO. r it&.re ..newal! PI.. ease answer. 'If. h.8t you. inlIbout ,. . . .. ', , " ' , , ' . , ., ',"'Yollrs,tr.uly,'·' LAZARD FlUmES; pefE;.1; LE BRETON." ')jJ L I , ' , . ", :', ," : "j 1
f",
,;,:OIijibe,19th ofilie BaIlle month (Lazard, Freres wrota-toMra. Ord as .I ,'I' ."
JI')lil\, I "
"BANKINGH()VSE 011' LAZARD. FURES,
"SAN FRANCISCO, Jllnuary 19,1881. de O'l'd, I$anta Barbara, Oal.-DE,AR MAI>A¥: XOUl; mortgage ,to AJexanderWeill wtn be outlawed within a few months from thisdate',' Please write 'to us immediately: what you propose 'to do concerningiti payment or renewal. .". . .' ' . ' LAZARDFRERES, ·per E. J. LE .BRETON. " ,;,' ;",'Yours. very truly. .;j
,,1'o,,"hich Mrs. Ordreplied, by letter addressed to :Lazard Freres: , 'lY()ur note of 19th,inst.was duly received, concerning the mortgage to .weill. .4-11 1, can SIlY is th\1t the present I 3.111 unable to ,pay it. an4,ifyou wish for.1Ue renew my note I will willingly doso. Pleasewrite to ,Moise'Kahn, Petaluma. to ascertain what hopes he has of rail,ingmoney for its payment, and Obligt:l, ." , 'i ' :" Yours, truly; A. DEORD.·.. ... , . , ' : ,.' '..' . ; ..
\"'.1 (; f;
'.
-, , ; '
.'
_ :' ;
. . _
,
.
,th,e 28th of lows: .. ,oJ
Lazard Freres , .
,'
, .
as fol'
Jan,uary 28th. 1881· . SIR: · in of a 8IJ (qllowsllJ.,rom de Ord, Santa '. , ;,.".r. f-.f.:.6'1l.,r,n. ·. wasquJy.re c.eiV.ed, . t.helll g.8.ge to ...ort ",4gJt 9l\Jl say ill that f.or the present .unabl!;l wpay it, I'p4 ;i$., IOou I willwHIi ngly do!sQ., wdte · ',I,.." '. . . ' "SAN FRANCISCO,
"'I'.' ,
HOUljE OF LAZARD FRERES,
KAHN V.
to MOlse Kahn, Petaluma, to ascertain what hopes he has of 'raising for itspaymEmt. and.oblige, Yours. truly, A. DE ORD.'· ", "We now beg to notify you that·. unless Mrs. Ord consents to give usa deed. we shall commence to foreclose on the 1st of February. We expect therefore to hear from you by return mail. "Yours. truly. LAZARD FRERES, per E. J. LE BRETON." complainant replied on January 31st, as follows: "PETALUMA, January 31st, 1881. II Messrs. Lazard Frere,y, San FranCisco-GENTS: Yours of the 28th inst. only reached me this evening. On account of the storm which prevailed during the last three days all communication with your city had been stopped, and this evening is the first time we received the mail. Mrs. Ord, I have no doubt, will be very glad to gi ve the deed fot· the consideration of a few dollars, that. is to say, the amount it would cost you to foreclose. I will write' to her to this flffect this evening, and upon return mail, if you do not hear from [her.] then go ahead and foreclose. I think thpre is plenty of time' ahead. If I am not mistaken, her note will only outlaw by the middle of next month; that is to say, by middle of Mluch. By agreeing to the above request, you will confer a favor to "Yours. very truly. ; MOISE KAHN. "Say, from her until the or 10th of March." On the same day complainant wrote to Lazard Freres the letter last quoted,ta-wit, January 31, 1881, heW-rote to Mrs. Ord, on the back of' the letter.of January 28th he,'had received from them, in Spanish, of which the following is a translation: ",vERY DEAR DONA AUGUSTIAS: 1 have just received this letter which I b6stent\)Jocwaru to you. Ido not think that was the wav to write. prinei. pallywithsarcasm respecting me. I have written .to Lazard Freres that you would consent to give them a deed to, the properties for what it would cost to foreclose the mortgage. to which effect you should write them. I also wrote to the.m to wait, and I nod(;mht tbey will do it. So that, if you wish to obtain ll.few hundred dollars. write to them immediately, and do not forgpt to do so·. Caroline with the last storm took cold, and is now in beu. Without' doupt, nothing serious. "I remain your son, who loves you, M. KAHN." On the 4th'of February Mrs. Ord wrote Lazal'd Freres as follows: .i "SANTABARBARA. February 4th, 1881.' ' "MessTs. Laza1'd Freres, San Francisco-GENTLEMEN: I received a letter from Mr. Moise Kahn, of Pt'taluma, with your favor to him of 28th nlto. ittclosed. I am at present in reduced circumstances. and therefore unable to rl-' . deem the. property I A. Weill. I wjJl most give you, a perf..ct of said property ifyoll will;give tIle mone,}' that it will ('ost you to forpclose the mortgage. 1 will sa Vtl you considerable trouble, and it will greatly oblige me. I have forgotten to know that part of block 217 of the to"in property, and other small pieces adjoining. are planted in grain and barley, anu I request you to let me raise the crop. 'As soon as ;rou desire, I will be rt'ady t·o give you tbe deed. Please corr"spond wlth.-me directly. and M. Kahn in this l.>usint'Ss, al!d oblige,._ . . AVG¥8TlAS OUD, perRJi;BECO,A ORD." To
'N copy ofi this letter was also indorsed by Rebecca for Mrs.Ordon, the 'batlkof thl:lletterof January 28th: 1 from Lazard FrerllS to complain-
716 ;
FEDERAL REPORTER, vol. 42.
ant,! and which he Ord with his letter to her of January 31st indorsed on its back. , ,To this letter from Mrs. Ord, Lazard Freresreplied, on February 9th, as follows: "SAN FRANCISCO, February 9th, 1881. "M1·S.4ugu,stias de la 6. de Ord, Santa Barbara-MADAM: We beg leave to own receipt of your favor 4th, 1881, and noted contents. ,We have handed the papers to our attorneys, and when they are ready we shall forward them to, you for signature. with some compensation for cost of foreclosure sale. We shall not be severe about the crop, concerning which you make the request. ""Yours, respecttuUy, .LAZARD FRERES, per E. J. LE BRETON." , Accordingly, the San Francisco attorneys of Lazard Freres prepared the deed of February 24, 1881, in which Mrs. Ord and complainant wei'e named as grantors, and Alexander Weill as grantee, .and which deed enlbracedall of the property which Lazard Freres, through Alexander Weill,>held as security for the money due from those parties. This deed Lazllil'dFreresfirst transmitted.to complainant, at Petaluma, together with the following letter: . " "BANKIN<l HOUSE oFLAZA1w FRERES; , , . " "'SAN 'FRANCISCO, February 24th, 1881. . Esq., Petaluma-DEAR SIR: We havecaused'a deed to be Mrs. Orqand to our ,Alexander Weill. with the dates In, l'lease sign tb,e sl:tI!1e befwe a notary pu!?Jic, and see, that tlie r.-ecessary dates, left in 'blank, are filled ,0\1t·. The reason we are obliged to make you a party to this deed is that you are mentioned in the defeasance glv{'u by Alexander WeiHat the time that the interest in the Todos Santos rancho was:conveyed by absolute deed to:him by Mrs. Ord. Please return tbe inclosed deMwith ali possible dispatch, 8S otherwise we shall be obliged in foreclosure. our time being exceedingly short. to "Very truly yours," LAZARD FRERES, per E. J. LE Bl1ETON." signeliand acknowledged by the complainant, and delivered in person by him to Le Breton, .who was, at that time, in the employ Lazard Freres, and who, as will have been observed, conducted the correspondence on their part. Le Breton thereupon consulted with the San Francisco attorneys of the firm in respect to the amount proper to pay under their ,r,l'omise to give her what it would cost to foreclose/ aud', the sum of $200 being fixed upon, that sum, together with the of Mrs. Ord's indebtedness, was sent by Lazard Freres to their attorney in Santa Barbara, who paid the money to Mrs. Ord, and delivered to her the evidences of her indebteuness, whereupon she signed and acknowledged the deed, and delivered it to the attorney of Lazard Freres,:who' thereupon 'filled it for record in. the county where the property is, situa,ted, andnptitied Lazard FnJres of the fact, Whereupon they up t.o complainant the evidences of his indebtedness to the firm. From, .that daytotbis, so far as appears, Lazard Freres have never claimed, demanded, or received one cent from Mrs. Ordor, complainant, or heM,l(i'uIY evidence of indebtedness against them, or either of them. is that those,experienced bankers would have dell'W: ,oithe .thenap1ouuting t9. ,over
KAHN 11. WEILL.
717
$18,000, unless the debts for which they stood were paid; or that, when complainant received the of the $5,000 note hehad executed to them, he did not know that it had been paid, together with the note of Mrs. Ord, by the conveyance of the property to Weill for Lazard Freres. At the time of the execution of the deed of date February 24, 1881, Lazard Freres already had a lien upon all of the property to secure the then existing indebtedness. There was therefore no occasion for another mortgage; nor did they want the land, for the evidence is' abundant that they had been urging the payment of the amounts due, and that the complainant, acting ,for Mrs. Ord, had been making every effort to sell the property, but without success; and that he had informed Mrs. Ord that Lazard Freres wanted the money due them, and not the land, is shown by the testimony of Mrs. Pechine, in which she says that long be· fore the making of the deed of date February 24, 1881, complainant had so told her mother, and that they had talked about the matter eral times, and she added: "But when we gave the deed of the property to Lazard Freres [referring to the deed of date February 24, 1881] we never talked about it anymore. We talked about it long ago when we were in hopes of regaining the property, but when we gave the deed we considered it an absolute deed, and didn't mention it any more." The faetis, as is clearly shown by the evidence, that during the times referred to, and for many years afteHhe making of the deed of February 24, 1881, real estate was greatly depressed in Santa Barbara county, and there was JiLtleor no sale for itjand the probability is that, had the liens held by Lazard Freresbsen foreclosed, the property would not hive brought the amount ofthe judgment. But a consummated judicial sale would ,have extinguished the liens, and vested the absolute title to the property in the purchaser. 'The deed in question was made to take the place of such sale, for an additional consideration paid by Lazard Freres to Mrs.Ord, of the estimated cost of foreclosure, at 'the suggestion of complainant himself, made in his letters to Lazard Freres and Mrs. Ord of January 31, 1881, and freely and gladly accepted by her, as evidenced not only by her letters already quoted, but by her testimony given in this case, as well as by that of her daughter, Mrs. Pechine, who acted for her throughout the correspondence and interviews relating to the matter, both of which witnesses appP!H to have testified with the utmost candor and truth, and with much intelligence as well, and both of whom say that the deed in question wail intended to be just what it purports to be, a deed absolute. And that such was also the clear and tinct understanding of complainant I have 110 manner of doubt. Any other conclusion would he wholly inconsistent with his own letters, and the acts of all the parties at the time and subsequently. It is not pretended that Lazard Freres took from complainant any evidence of the indebtedness he now claims to have assumed by the transaction inquestion, or that they ever afterwards demanded of him payment of orie lar of such indebtedness, or that he ever paid one dollar of it; 'yet· the Court is asked to believe that the indebtedness in fact existed byexpt4Jss agreen1ent of the parties,and that, without demanding payment
FEDERAL ·
Qipal or interest, Lazard Freres Iltupidly went to: Sl$p until thedebt had peoorpe barred. by the. statute of .limitations. 'rhis I cannot accept as ¥"U611 Itlllm deed in question was by all of the 1:p,it intended to be exactly what it purported to be, a deed absol{Jte, rwithout l!-ny qualifications. or conditions. By its execution Mrs. nQtonly discharged aU of her indebtedness to Lazard Freres, and receiyed $200 additional, but overpaid complainant by several hundred qoUars,accor!ling to his estimate of her ind.ebtedness to him, and by sfilveral thousand dollars, according to her estimate of it; for his note evidencing the $5,000 he received from Laz!Lrd Freres was thereby paid and discharged, andllurrendered. to him, whereas Mrs. Ord'fI indebtedness to him, according to his own claim, was buta little over $4,500· . Recurring to the bill which, l!-S has been said, is verified by the oath o{<lo,mplainant, it is that it alleges, in substance, that about the montho(January,1881, Mrs. Ord being indebted to Lazard Freres and complainant, and her indebtedness to Lazard Freres being then about to pecorl:iebarred by the, statute Qf limitations of California, the said Lazard Freresmoved and induced complainant to and he did procure Mrs. Ord to all of her said property, together with her equity of redemption therein, tocomplainaQt, ;with the,llnderstanding and agreement that complaimmt should and woqld assume .the payment of the entire indebtedness · .old to Lazarcjl Freres, atldjoin her in the conveyance and transfer of the.whole of the said real property, including the said Todos Sanproperty, aUto be held:pythe said 14J.zardFreresas security of complainant to them, and that for the payment of s,aid. this. was consented agreed to Qy the complainant and Mrs. Ord, as thaHhe'!la,id purchase from Mrs.Ordby well 8SLazard Freres; on.tbe :24th.of February, 1881, and her said indeptednessaBsumeqt>ycomp,la,ins.nt, and that con1plainant joined in. of all of: said property to Alexander Weill, as and for fOljthe:paymentof.the said indebtedness of both complainantand, Mrs. Onldllllounting at that time to about $18,870, with interei1t, U\ld not It will not be necessary to decide whether tbe agreep:lent thus. alleged would· be. valid unless evidenced by writing-, for it is proof of any kind. It is ·not·sllstained ·by the testimony pf complainant himflelf, ond is wholly inconsistent with bis o:wn It is positively denied by Mrs; Ord, and by David the time a member of the firm of and manager for Lazard FrerElS,flt San Francisco, and the person with whomcornplainant claims to. h{lve. 011 the negotiatioQs. So far from Lazard Freres ind ucing ;Mrs. Ordto sell the property in question to him upon the understanding that he would assume her indebtedness,and so indebtedness, as the bill.alleges. his own let. far [rpm hifj, ;a,ssqming ters whenJnf:Ormed ,by Lft7.ard Freres that the indebtedness must be, plli4, or tPCilYr,woUldbecompelled .to commence suit ,to foreclose tbElt tlDless aeleed: :WaS gi ven, .tor. the feason that the debt was about to barred hy,tlw statuteofUmitatious, it was he who suggested to,!Ap:ardFreres, Ordwould, and who advised her to, give a
';
KAHN ',,; WEILL.
deed to them for the propel'{Y I if they would pay her whilt it would' cost them to foreclose; and dn that deed to Lazard ,Fretes complainant joinoo as a grantor, without objection,wben exptessly'informed in the letter transmitting it to bimfor execution that he was made a grantor only because be was "mentioned in the defeasance given by Alexander Weill at the time that the interest in the Tod08 Santos rancho Wll.S conveyed by ,ahsolute deed to him by Mrs.· Ord." . The complainant was examined as a witness, fil'stat SantaBarbara, and then in San Francisco. In his examination in San Francisco he was questioned,among other things, about the letter written by him to Mrs. -Ord on the 31st of January; 18811 on the back of that received by b'im from Lazard Frares, and he was asked 'by his counsel if he hild· written a second letter the same day to Mrs. OOO,:in relation to the same matter, and he said that he had. ComplainaQt's counsel then calied upon the opposite counsel, to whom had been given by Mrs,Pechine and Mrs. .Ord all the letters relating to thecbntroversy they had or knew 8riythin'g -about, to produce the second letter: spoken of; and theoounsell'eplying that he did riot have a letter"andnever before heard ofsuch a. one, thecomplainllnt proceeded:to testify as follows: "The contents of tbatlalso said that bythfsmaitlwtbte'to you, and the sum andsubstafice of the :1etter isa repetitiofi Of the first 'letter _to mY .rn,emory:
just mentioned, with:the following added to it. in Spanish. and it is 11 al acabo'tengo el.d81"acho e$te8 propriedades que no tengo c;uid(ldo.' I, r1!qoUect 1 wrQ.te sometbi ng el,w.. ..These gelltlemen don't want any. .
The translation giveniof the Spanish above quoted is: "At allevents I -have the right of redemption iofthos&propertiesi you don't need to fret about iU' 'There are many reasons why I do not believe this testimony 'of complainant in rE.lgartl,to a "second letter" to Mrs. Ord; on· the:S1St <of January, 1881:' (l) !fbe had secured the right of redempt!on; and . wanted to tell Mrs. Ord ntall, it is highly improbable that he \vouI'd 1tiot have mentioned the fact in the lettenvhich he undoubtedly (and which she received, and which has been produced in evidence. (2) There would have been nooccnsion for his repeating in a second letter, on the'same day,what hahad just written in the first. (3). The tes.timonygiven in San Francisco was given in 1887 . It is extremely ini.probable tbtihe witness could remember the precise Spanish words used 'by him. more than six years before, 'especially' when,in his testimony -given at Santa Barbara,he testified to but oneleHer, and did 'not then -recollect that, on the ,31st of January, 1881, he had'writtel1 the advice to Mrs. Ord upon the back of the letter that he had on that day-re';ceived from Lazard Freres. (4) Mrs;Pechin&testifiea that she thinks she preserved all of her .mother's letters relating to business;iuld only ,one of that date was found, and that she never, to her recollection, saw ,the second·letter referred to. To the same effect is Of Mrs. . Ord.(5) ·Theletter of,Mrs. Ord, ofdilte February 4, 1881'; \Yrittel1UpOl1 ·the suggestion of complainant contained in his letter to herof'lJfthuary -.31stwritten on· the. back· of the letter ·'Of LaMrd to him,wasnilm-
720
ifest1y carrying out the suggestions of that letter, and makes no allusion tQ..the matter of redemption which complainant claims was communi'catedby the second letter spoken of by him. (6) Complainant's letter to'14l.zard Freres on the same day, referring to his letter to Mrs. Ord, makes no reference tQ a right of redemption. (7) The testimony given by complainant is inconsistent with his own letters, and with the averments of the bill, sworn to by him, as already pointed out. (8) The new matter claimed to have been embraced .by the second letter spoken of is not shown to have been true, but the contrary. In his testimony complainant details the agreement he claims to have had with David Cahn prior to the making of the deed of date February 24",1881, respecting the property. The substance of the agreement ,as stated by ,him is that. Mr8. Ord was to be induced to execute the deed conveying the property to Weill, instead of submitting to a forecIosure, ,thereby canceling her indebtedness and receiving in money and Weill was to hold the title so conthe estimated cost of veyedforthe benefit of complainant. who was to be "carried [by Lazard Freres] ata reduced rate of interest for a year or two," and allowed to redeem the property by paying the amount of the indebtedness existing ,the thne of the execution of ,the deed, w},thintere.st at a reduced .incurred, in caring for the property. If :ratc" ·and' such8;Il agreement had, been. in fact made, I am unable to understand . by whatl'egal,process the property of Mrs. Ord,could be thus vested in 'complainant.'!t is notpte1:endedthat up to th El time of tbe execution of the deed of date Februitry24,1881} complainant had hny interest in :8ny Qf the property in controversy ,e;xcept the TodosSantosrancho, and that he had po :interest of any nature in that rancho I think h'lS already ,been shqwn. There is no rule of law, of which I have any knowledge underwhic1rsuch an arranKement as stated 'by complainant could be made to operate to vest Mrs.Ord's title:in him; Besides, a party who ,coIl)esjnto a court of equity;r:nust do so with clean hands. That, so far as Mrs,.Ord is concerned, the deed of date February 24, 1881, was intended.as an absolute conveyance of all her right, title, and interest in all of the property is undisputed, even by the complainant himself. Indeed, his case. is basedupli>l1 tha,t theprYiand yet, while acting as the trustedngent of that lady, who· was his mother-in-law and an aged woman, to have malie such an arrangement withtlle manager of .Lazard Freres .as that he, could thereby acquire her property, in four pieces, ohvhich it is not' pretended he then had any interest, by subsequently paying the amount of the indebtedness at a: reduced rate of inSuch an arrangemlOlnt, if it had been made, would have ;uncOnscionable in the extreme, .and such as nO court of equity ought to enforce in favor of the party making it, But the testimony of complain,i,n regard to the agreement is not only inconsistent with his letters, but it iapoaitively denied by David Cahn, who explicitly states in his .testhmmy. that he made any agreement with complainant by which ,he was'to, assume the indebtedness of Mrs. Ord and himself theretofore existing, or by which the deed in question was to be considered other than
721
what it purported to be, a deed absolute, or by which complainant was to be entitled to redeem the property under any circumstances or tionsj and complainant's testimony is, in many respects, also at variance with that of various other witnesses, and upon the vital points in the case is in itself highly improbable. The conduct of the parties quent to the execution of the deed of February 24, 1881, was not sistent with the absolute ownership of the property by Weill, who, as has been stated, stood in the place of Lazard Freres. There is no doubt that they preferred the money to the land, not only at the time they took the deed in question, but for many years after; and through David Cahn gave complainant the privilege of selling it, and. retaining what he could get over and above what it had cost them, with interest and expenses. During all of tbis time the relations of the parties continued intimate, and complainant made every effort to sell the property, but without success. At times Lazard Freres were willing and anxious to take less than the property had cost them, with interest and expenses. In July, 1885, when the amount reached over $31,000, David Cahn told complainant they; would take $28,000; and in July, 1386" when the amount exceeded $35,000, he told him they would take 000 j' but complainant waa, unable to ,effect sales. During this time" covering, a period of over: ,five years,many interviews occurred, many letters passed between the parties. In this correspondenc«:l I have observed no letter from complainant in which he asaerted or assumed that any of the property belonged to him. Only one letter during those years assumed the existence of an indebtednesl! frOm him to Lazard Freres. That 'letter was written on the 24th of July, 1885, more than four years after he claims to have assumed towards Lazard Freres, by a verbal agreement, the position of debtor. This letter requests Lazard Freres to, send him "a memorandum of what I owej" adding, "I will be entirely guided by what lowe," etc., This letter was answered by Alt. schul, one of the firm's accountants, in which it is said, "Your account will be sent shottly." Altschul testifies that he knew nothing about the understanding between David Cahn and complainant, and David Cahn testifies that he never saw the .letter. The adoption by Altschul of the language of the letter he was answering, and using the term" your" instead of "the," should not, as justly observed by counsel, be accorded much significance. But this very letter of Altschul to complainant inMeyer, ,as attorney in fact closed a copy of a letter written by for Weill, to a person who was supposed to be a tenant of Mrs. Hartnell, in the Todos Santos rancho, proposing to rent the who had a rancho to him, and compl!tinant's attention is called by this letter to "the party now on Mr. Weill's property," and complainant is therein requested to "take no steps which will conflict with our direct instructions to that gentleman." . In several letters from Lazard Freres to complainant they speak of the property as btllonging to Weill or themselves. .In a letter of October 11, 1881, after asking complainant's opinion as to "the lowest figures we should accept for the Todos Santos rancho," they say: ";Let us see if they agree with ours, and if not we will !lave v.42F.no.13-46
FEDERAL REPORTE'lt, '\"01.
42.
tocorisult oUr friends"at Santa Barbara, and accept what the ranch is worth." In one bearing date NoveWbel' 15, 1881, they mention certain persons'who had applied to rancho owned byiUIi." Tn one t006mplainant, dated December 9,,1884, they refer to hiiriit letter from Judge' Fern.aId;: proposing to fenCe ;the' State-Street lot, and: l(6pinion of this matter, as far' as the fencing of property 115 ooncerned," and ask that he "excuse the trouble given."· In a letter from 'complainant 'to Eugene Meyer, dated Septem,. ber'12,ilS85, he sEmds a map 'of the Todos Santos rancho, and says: 'II hope that, you will be able to effect anadvaritageous sale of the'laIidsi" In·a lettel'ofdate December 1, 1885"he says, referring to the State;;Streetlot;."Although yori do not say anything about the lot oIiStatestfeet, :if you do'sell I hope you will receive a good roundi'pTiee''for it." These letters·are .inconsistent with the con lention of complainant in the' Vl'esentcase, but they are consistent with what I think' the case clearly ah<lws througbout, that Lazard Freres were anx.iou!! mortey they had invested'in the property out of it, and that,! becauM oftheil"unfa:miliarity with:theland, ·arid their friendly: re'lations with complai'lta'nt,which theJi' continued to 'exist. and because of hadaccotded him.'of'Stflllingthe proPerty in order that the bemightzna:ke'somethirig out of itif'he'could,theyfeltjustified in askhi,viewS' in'tellpect tcd,t; , , :.. ; , " ·'Iti's theibobksof Lazard'Freres show'tlutt the indebtedneSs of the deed continued"to·:edst's.gainstcomplainantafter the of FeerUby'24, 1881. 'At,tbetimEi i of1ithe execution of that deed, and of Mrs. Ord and of com'for morethari 8.' year; before,tbe plitinaritwascarriedupGntne books of the firm under the head "Ord;. Kahn;, ',"!lEl tha' most' con'Venient metllodof keeping an account of the moneys loaned and advanced to those pal'tiesj but,'manifestly, that cirDbt 'changedthecharadter of the indebteaness, whiCh was of'Mtls. Ord and complainant which evideneed'by the Lazllrd :Frel'es \!ltill held,tO:tl1'n open' adctlUnt against them. When' the indebtedness WEts. paid;by' the· conveyance of the property by the deed of 24, '18Bl,all written' e\fidence held by Lazard Freres against Mrs. and su'rrendel'ed to but the fact of the paym(i,nt was not' etiteredin' under the ac;. c6untheaded "Ord-KithtU' Wliethetor ndt cotrect book-keeping ql1ired stich orwh'ether,asi's,lcll1imed, theaeoountwasproperly kept openas'anaccourit';against the: property, to Show its eost,and'in which'to 'make future. entri-es of costsil.ind:expenses ' paid on l\ccountof it, I do nofknow. But certain it isthat the account headed was never, after the exebution of the del:ld' in question, regarded by anY' oneconneeted with, the management ·ofthe bank as an account against M'rs. Ordarid complainant, dr eithet"ofthell1, not'treatedas such. No money was 'ever. demanded or received of thEm1,oreither of there6ti,norcould have -been, for the simple- reason that the indebted. had been wiped iout by the' sale andoonveyance of, the property. 'Besides,some'of 'made in the execution ()f
*.
1
THOMPSON
HOUSTON" -ELECTRIC
00.·:11. ,CITY,! OF NEWTON.
723
the deed exclude the idea that it was kept alive against Mrs;:Otd and complainant, or either ofthem, but are consistent with the claim that it was continued as an account showing the cost to the bank of the property. Certain it is, also, that if the account showed an existing indebted. ness against complainant, it showed precisely the same thing in respect to Mrs. Ord; and that would prove tooinuch for complainant's case, which concedes that Mrs. Ord's indebtedness was paid by the conveyance in question and his assumption of the debt. It is incredible that any sane bankers would have allowed so large ,a debt to stand until it was barred over and over again by the statute of limitations, and that, too, without even ever demanding payment of interest or principal; and it is asking too much of a court to believe that the complainant ever understood that Lazard Freres would permit him. to owe them so many thousand dollars without a scratch of his pen to show for it, and without ever calling upon him for interest or principal during a11the years that have since elapsed. I think the case is without any merit on complainant's part, and, accordingly. there· will be a decree dismissing the bill, and awarding 'CXOSB-complainant the relief demanded in the costs.
TuOJrlPSON HOUSTON ELECTaIC
Co. ". CITY
OF NEWTON et
al.
(m,.ctl:tt Ooun. So D l IfYWa, a.D..June 24, 1890.) L l[umCIP.lL CoUPORATIONs-I'uBLW IMPROVEMENTs-ELECTRIC. LIGHT. Under Acts 22d Gen. Assem. Iowa, C. 11, which authorizes cities to establish and maintain electric light plants when the majority of the voters of the city shall by vote approve the s.ame, a city, may erect an ,electric plant for the purpose of fqrnishing light to its inhabitants 'in their stores and houses, as well as for lighting the streets and pUblic places of the. city. · 2. SAME. The actioJ1. of a city in authorizing a private corporation to erect an electric plant for the purpose of lighting the city, without any g'rant of exclusive rights, does not deprive the city of the right, under said statute, to erect plant itself for the same purpose. 8. S.un-BoNDs-SUBMISSION TO VOTE. ' Where it is intended to pay for said plant by the issuance and sale of city bonds, it is proper to submit to vote the entire matter of erecting the plant and issuing the bonds in one proposition.
Under thlLt provision of said Mt which provides that the city council may orper the submission of the question of electric lighting to a vote, or that the mayor may do so upon petition of a certain number of tax-payers, the adoption of an ordinance . providing for the erection of an electric plant is not a condition precedent to tbe . . submission of the question. . . 6. SJ.ME-CONSTITUTI01UL LIMIT Ol':DEBT. Where,at the time the issuance of city bonds is authorizEld by vote, the issuaT;lce of such bonds would the city debt beyond the constitutional limit, but the bonds are not issued until libe debt has been so reduced that their issuance does not bring it beyond such limit, the bonds are not void, since no debt is created till the bonds are issued. .
SAME-ORDINANCE.
5.
SAME-b.rUNCTJON.
a tu;-plloy6r.
The fact'tba't city bonds wll1'8sold and delivered before the ordinance providing for them took effeot iaao,ground for e1\joinini their ,,pa1,ment IIot suit. r# . . . . '