Case ID: dc_9/html/0256-01.html
Source: Caselaw Access Project
Author: {"author": "Mr. Justice Wylie", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

JULIA E. BRICK, EDWARD D. WHITE, AND JAMES HOW, EXECUTORS OF JOSEPH K. BRICK, PLAINTIFFS, vs. SAMUEL R. BRICK AND THE WASHINGTON GAS-LIGHT COMPANY, DEFENDANTS.
    In Equity. —
    No. 3625.
    I. A suit in equity was brought in this court against non-resident defendants, who had been appointed collectors of an estate in New York, pending proceedings to set aside the will of a testator. There had been no service upon such defendants except by advertisement in a city newspaper, nor had they entered any appearance in the suit: Held, that the decree rendered therein was not binding upon the executors to whom letters testamentary issued after the will had been sustained by the New York court of appeals.
    II. Where B declared that he was holding certain stock for the benefit of his brother, and made an affidavit to that effect for the purpose of being relieved from a tax, which otherwise he would have been obliged to pay for the stock; when, in point of fact, he had purchased and paid for the stock himself, and it stood in the books of the com-' pany in his name, and he retained possession of the certificate therefor until his death, his bad faith in this respect is not sufficient to create a trust or claim of title on the part of such brother.
    III. He who sets up a claim to property of any kind must establish his own right. If he has no right in himself, it matters not what declaration may have been made to others by the party to whom it does in fact belong, especially where there has been no delivery of possession.
    STATEMENT OE THE CASE.
    The bill in this ease states that, on the 29th of September, 1S64, Joseph K. Brick purchased through his brother, Samuel R. Brick, two hundred and fifty shares of Washington Gas-Light Company Stock, and paid therefor five thousand two hundred and fifty dollars; that, on the 6th day of October, 1864, a certificate for the said shares of stock was regularly issued to him; that the widow of the said Joseph K. Brick, who is one of the plaintiffs, personally knows that the purchase was made as alleged; that the said certificate of the shares of stock was retained in the possession of the said Joseph K. Brick during his life-time, was found among the assets of his estate after his death, and returned in the inventory filed by the executors in the surrogate’s court of Kings County, New York, in 18C8; that this stock was purchased by Joseph at the instance, and for the purpose of aiding Samuel in some matters of business he had with the saia gas-light company, and not for the purpose of speculation; that Samuel promised to defend Joseph from loss by reason of such purchase, and that Joseph from time to time spoke of the said stock as the property of the said Samuel, but that Samuel never did pay for the same, nor enter into any contract with Joseph during his life-time, nor with his representatives since his death, to pay for the same; that, on the 3d of July, 1865, Joseph returned the said stock as his property in his schedule, or tax-list, and on the 5th of May, 1866, in order to get rid of the payment of the tax assessed thereon, said stock proving unproductive, made oath that said stock belonged to said Samuel, and was held by him, Joseph, for Samuel’s use, and that said Samuel made the same statement to the officers of the Washington Gas-Light -Company; and that, on the 25th of July, 1S66, the said Joseph made a similar affidavit concerning'said stock ; that Samuel wrote to Joseph in May and December, 1866, about said stock, which letters are exhibited, and that in fact Joseph never parted with said stock to Samuel, but concluded to keep it, and did keep it until his death.
    That Joseph died in August, 1867; that in January, 1871, Samuel filed a bill in this court, praying that the said gaslight company might be enjoined from allowing the said stock to be controlled by, or transferred to, the representatives of said Joseph; that said cause was so proceeded with that the injunction prayed was ordered, and an account taken by the auditor, all of which proceedings were coram nonjudice .and void ; that the representatives of said Joseph have since applied to said gas-light company for the dividends upon said stock, and for permission to transfer the same, but that said company refused to grant said application, because it believes itself to be restrained from so doing by the said injunction, setting up and alleging, as does the said Samuel, that the title to the said stock and to the dividends accrued thereon has been determined by the decree made in said case.
    
      The bill prays that Samuel E. Brick may be enjoined from setting up any claim to said stock or the dividends accrued thereon; that he be ordered to dismiss his bill in the former case; that said gas-light company be ordered to pay to plaintiffs all the accrued dividends on the said shares of stock, and to transfer the same to them on its books, and for general relief.
    The answer of Samuel E. Brick denies that Joseph purchased on the 29th of September, 1864, through him, two hundred and fifty shares of stock of the Washington GasLight Company, and avers that on the date mentioned he purchased himself, and on his own account, five hundred shares of that stock, and paid for them with his check on the Manufacturers and Mechanics’ Bank of Philadelphia. The answer further states that the respondent was well acquainted with the affairs of the gas-light company; felt sure that its stock would rise considerably in value; was very anxious to purchase all that he could, and, not having the money that he could devote to. that purpose, he applied to his brother Joseph for a loan; that, upon the faith of a letter from his brother, informing him that he could raise the money for him at seven per cent., he bought the five hundred shares; that his brother loaned him $5,250, and that he, respondent, for the purpose of securing the payment of the loan and with the perfect understanding that he could redeem the stock at any time, by paying the money loaned with interest, caused the certificate for two hundred and fifty shares of the stock purchased by him to be made out in the name of his brother; that he never made any promise to save his brother from loss on said stock; that there could be no loss to him, said stock being in his hands simply as collateral to the loan made to respondent; that his brother had no object to assist respondent in any matters of business with the said gas company, but on his account, and for interests out of which he realized a profit, was desirous to have his name appear upon the books of the company as a stockholder; that his brother always spoke of the stock as belonging to respondent; made affidavit to that fact on two occasions, and directed respondent to inform the officers of the gas-light, company that the two hundred and fifty shares of stock appearing in his name upon the books of the company were not his, but held by him for respondent; that these statements and affidavits were made in good faith, and for no purpose of fraud or concealment; that respondent never offered to purchase the said stock, but did offer to redeem the same from his brother during his life-time, and after his death from his personal representatives.
    The answer of the gas-light company shows that the company know nothing more about the title to the stock than appears upon its books, but admits that it was notified by Samuel E. Brick that the stock, though appearing in the name of Joseph K. Brick upon its books, was in point of fact held by said Joseph for and on account of said Samuel; admits that it has refused to pay the dividends or allow the stock to be transferred to plaintiff, because it is restrained from so doing by the order of this court.
    The proofs show that Joseph K. Brick paid for the two hundred and fifty shares of Washington gas-light stock in controversy, and that such stock stands in his name on the books of the company, and that he received dividends upon said stock up to the time of his death, which occurred in August, 1867. The plaintiffs are the executors of the last will of said Joseph K. Brick, and in that capacity are in possession of the certificate of said stock, and that the same have never been assigned or transferred to any one. It also appears that the defendant lodged a caveat against the will of his brother, the said Joseph, and a final decision was not attained in that controversy until the month of April, 1872, when the said will was fully admitted to probate. Pending the proceedings on the caveat, collectors of the estate, for the time being, were appointed by the probate court for Kings County, in the State of New York, and the defendant, Samuel E. Brick, in the month of January, 1871, filed his bill in equity in this court against the said collectors and the Washington Gas-Light Company, in which the said Samuel E. Brick set up that two hundred and fifty shares in said gas company, standing in the name of said Joseph K. Brick, in fact belonged to him, and said Joseph K. held them only as security for a certain sum of money lent by him to said Samuel E., seeking to redeem the same, and praying for an injunction to restrain the transfer of them by the said collectors, for a settlement of his mortgage, and for the transfer of the stock to him. This cause was proceeded in and a decree rendered according to the prayer of the bill thereon.
    After the will of the said Joseph K. had been sustained by the judgment of the court of appeals of New York, letters testamentary were granted to the complainants, who thereupon filed their bill in this court, claiming t.he stock as the .property of the estate of Joseph K. Brick, and seeking to have the inj unction in the former case set aside, and a decree authorizing them to transfer the stock to the heirs of said •estate.
    The evidence to show title in the complainants consists in the certificate of stock issued by the gas company to Joseph K. Brick for two hundred and fifty shares of their capital stock, dated October 6,1864, at $21 per share, making $5,200, which he p aid by his check of even date with the certificate. That the certificate had never been transferred, and was found by complainants among the papers of their testator, and had been embraced in the inventory of the estate in the year 1868. The following letter from Joseph K. to Samuel R. Brick, and the answer thereto, show the nature of the correspondence and declarations of the parties between themselves as affecting title to the stock.
    “Brooklyn, May 5,1866.
    “Dear Brother: If you remember, some year and a half ■ago, when I got the Washington gas-light stock, I took it to give you strength in the company, which was the fact. Now, there is a State law in this State that gives assessors power to assess all stocks owned outside of the State, to the -full amount, at the same rate as real estate, which is about ■3J per cent.; at that rate you see what little advantage it •would be for me to hold stocks outside of the State. Now, this has been got hold of by our assessors, and I made the above statement to set them aside. I told them it stood on the books in my name, but I held it for your benefit, which is .so, as I should never have bought under any other circumstances.
    “Now, I want you, as soon as you receive this, to advise the president and secretary that such is the case, and if they write from here to know anything about the matter to say so, or pay no attention to them.
    “In the mean time I will give you a power of attorney to sell or take it to yourself, as I need the funds very much in my business, and must raise some money at once.
    
    “ Please let me hear from you what it is worth in your market. I cannot afford to hold it as 1 want money badly, and that pays nothing.
    
    “I hope you will lose no time about writing to the secretary or president, as the ease may be.
    
    “I have been hoping to come on before this, but have been too unwell. * * * *
    “Yours, &e.,
    “JOSEPH.”
    
      Answers to foregoing.
    
    “Philadelphia, May 7,1866.
    “ Dear Brother : Your letter at hand; all parts noted; due regard to the stock; you say it pays nothing; you mistake. If you have not received a dividend, it is certaiuly strange; I got one on February 17, $100 per share, or 5 per cent. I saw your check for $250; however, if you have not received it, send me your order to receive it for you at once, and I will forward it to you, or if you don’t wish to keep the stock, I will try and raise the money and take it off of your hands. If you so conclude, advise me at once, that I may have a little time to raise t he money. Alfred and Joe can take some of it, if they can sell their 5.20 bonds.
    “Or, I will do this : I will take the stock, allow you 7 per cent, interest from the time you gave your check, deducting the dividend February 1; that is, if you have received the same; if not, you give me your order to receive it in your place as your attorney. Then I will stand thus: Nineteen months’ interest, at 7 per cent., $581.12; stock, $5,250; total stock and interest less the $250 dividend, $5,581.12, or, with the February interest, $5,831.12. You will observe I have calculated the interest upon the whole amount, $5,250.
    “ There has not been any sales of stock for some time, and no bids that I know of. I called at my broker’s to-day; he said, ‘1 pan sell it readily,’ but did not name a price, as it is seldom in the market. I did hear Biggs, the banker in Washington, bought 210 shares at $22 per share. I think it is worth much more than that, particularly should we get our bill through for the increase of capital; but Congress, as you know, is uncertain. I will give them notice at Washington, as you desire, that the stock is mine, but held by you or in your name. If you conclude to take my offer, state how many days before you want the money. If I conclude to keep the stock, I will have to sell some others; I may, however, (that is, if you let me have it upon the terms stated above,) raise the money for a short time, and sell out in lots, and thereby make a few dollars; I want to place it to suit myself. I go to Wilmington to-morrow with drawing and specifications to extend their works. We shall want twenty retorts, clay — four benches, of five each — with everything new ; I have laid the work out.
    “ S. B. BBICK.”
    “ Sunday, May 13.
    “ Dear Brother : You wrote me the other day in a great hurry about your stock, and I answered at once; since which time I have not heard from you whether it met with your approbation or not. You will let me know, as I don’t wish to keep parties waiting. I have the Wilmington extension.
    “ Your brother,
    “ SAMUEL.”
    The following is also a passage extracted from one of Samuel’s letters, dated December 16,1866:
    “ Brother Joe : You scolded me at one time pretty hard about that Washington gas stock. Now what will you take for it — clean out? Let me know.”
    The testimony further shows that Samuel B. made the purchase of the stock in his brother’s name, and with his money, for $20 per share, and next day charged Joseph 3L $21 per share.
    On the other hand, Samuel B. Brick introduced testimony tending to show that the money used in the purchase of the stock was advanced to him by Joseph K. as a loan, and that the certificate was taken in the name of the latter, simply as a security therefor. He also relied upon the subsequent acts of the parties with respect to this stock. The proofs show, without any contradiction, that in July, 1865, Joseph K, Brick made return to the assessors of the State of New York of his personal property, and in that return included -$5,000 of the Washington Gas Light Company bonds, and was assessed accordingly, as appears from an extract of tax-roll, 20th ward, Brooklyn, 1865. In May, 1866, Joseph made oath that the statement so made by him in July, 1865, was incorrect, and that he was erroneously assessed for that year to the amount of $5,000, which error arose from his having inserted in said statement $5,000 stock held by him for his brother; that he has no pecuniary interest in said $5,000, and had made the affidavit to have the error corrected. The correction asked for was made accordingly.
    This is the matter referred to in the letter of the 5th of May, 1866, from Joseph to Samuel, which is given in full in the former part of- this statement.
    Other declarations of Joseph K. were also given in evidence, made to strangers to this record, for the purpose of showing that he held said stock in trust for the defendant, Samuel E. Brick; but the depositions would swell this statement beyond the limits of a brief report, and sufficient has been stated for the purpose of illustrating the decision. The cause is now in the general term upon an appeal from a decree in favor of the complainants.
    
      Joseph H. Bradley for complainants:
    There is no question of law in the case, other than this: Can loose and idle, or even positive, declarations to a third party be evidence sufficient in a contest between two parties to control the acts and declarations of the parties inter se, and to discredit those acts and declarations ?
    We think the law is clear, and perfectly consistent with reason and common sense, that such evidence is wholly insufficient to control the proofs exhibited by such acts and -declarations, and that the chancellor was right in the decree he made.
    
      
      Wm. B. Webb for defendants:
    The declarations and admissions of the deceased, Joseph. K. Brick, are sufficient for, and do raise, a trust in favor of Samuel as to these two hundred fifty and shares of gas-company stock and all their'incidents, and constitute him, Joseph,, a trustee in respect to them for the benefit of Samuel. A trust in respect to realty, even, need not be created by writing, but only manifested or proved by writing; and it has been held from the earliest times that a trust in respect to personal property is not within the statute of frauds, and may be created just as trusts were created before the statute by parol. Lord Loughborough in Fordyce vs. Willis, 3 Bro. C. R., 587; Forster vs. Hale, 3 Ves., jr., 707 Steere vs. Steere, 5 Johns. Ch., Rep., 1; McCubbin vs. Cromwell, 7 Gill & Johns., 157; Barrell vs. Joy, 16 Mass., 221; Kimball vs. Morton, 1 Hals. Chy., 31;. Benbow vs. Townsend, 1 M. & K., 506; Kilpin vs. Kilpin, 1 M. & K., 520; Ex parte Pye, Ex parte Dubost, 18 Ves., 140; Wheatly vs. Purr, 1 Keen, 551.
    The plaintiffs, who are the executors of the testator, are estopped by the affidavit made by him in respect to this stock, and cannot set up title in said testator. The recent decisions in the courts in this country and in England appear to have given a much broader sweep to the doctrine of estoppel in pais than that which formerly existed and to have established that, in all cases where an act is done, or a statement made by a party, the truth or efficacy of which it would, be a fraud on his part to contradict or impair, then the character of an estoppel shall be given to what would otherwise be a mere matter of evidence, and it will, therefore, become-binding upon a jury, even in the presence of proof of a contrary nature. Stephens vs. Baird, 9 Cowen, 274; Presbyterian Cong. vs. Williams, 9 Wend., 147; Picard vs. Sears, 9 Adol. & Ellis, 469; Gregg vs. Wills, Adol. & Ellis, 90; Darrell vs. Odell, 3 Hill, 219; Carter vs. Bennett, 4 Florida Reports, 342.
    It will be observed, in this connection, that in his affidavit, Joseph K. Brick, the testator, not only denies all title to the-stock in himself, but distinctly, and in so many words, declares that he holds the stock for the use of his brother-Samuel. Such a declaration, if it be not technically within, the definition of estoppel in pais, falls little short of it, and is entitled to the greatest significance in deciding the rights of parties in this contest. Gratz vs. Beates, 9 Wright, 495; Miltimore vs. Miltimore, 4 Wright, 156; Braddle vs. Broomfield, 4 Watts, 474; Evans vs. Draw, 12 Harris, 62; Hill et al., vs. Epley, 7 C., 331; McMahon vs. McMahon, 1 Harris, 380.
    The court had jurisdiction in the former case, and its decree therein cannot be attacked in these proceedings. The gas company, one of the defendants in that case, has its habitation within the jurisdiction of the court and was amenable to its process, and the shares of stock could only be transferred upon its books. The general and well-settled rule of law in such cases is, that when the proceedings are collaterally drawn in question, and it appears upon the face of them that the subject-matter was within the jurisdiction of the court, they are voidable only. The errors and irregularities, if any exist, are to be corrected by some direct proceeding, either before the same court to set them aside, or in an appellate court. Thompson vs. Tolme, 2 Pet., 163; Voorhies vs. The Bank of the United States, 10 Pet., 475; Decatur vs. Paulding, 14 Pet., 599; Comegys vs. The State, 10 Gill & Johns., 182, &c.; House vs. Wiles, 12 Gill & Johns., 338.
   Mr. Justice Wylie

delivered the opinion of the court:

The controversy in this case is over the title to two hundred and fifty shares of the Washington Gas-light Company’s stock. Joseph K. Brick and Sam uelB. Brick were brothers; theformer a resident of Brooklyn, New York, and the latter of the city of Washington. In 1864 the stock was bought by Samuel R, Brick, with money obtained from his brother, Joseph K. Brick, and the certificate was issued in the name of the party by whom the money was furnished, was delivered to him, and remained in his possession through his life-time, and is now in the possession of his executors, the complainants in this cause.

In 1867 Joseph K. Brick died, and in 1871 Samuel R. Brick instituted a suit in equity in this District against the personal representatives of the former, setting up his claim to be equitable owner of the stock in question, on the ground that it had been bought for him by his brother, and offering to pay the amount of its cost in 1864, with interest from that date. But such personal representatives were non-resident, and the only service of process made upon theta was by advertisement in a newspaper of this city.

A decree pro confesso was taken for default of defendant’s appearance, which was subsequently made absolute, and the title of the stock was thus decreed to be in Samuel B. Brick.

The object of the present suit is to enjoin the said Samuel B. Brick from setting up any claim to the stock in question under that decree, for the reason that the defendants in the suit were not subject to the jurisdiction of the court, and that the notice by publication was a nullity.

The defendant, by his answer, claims not only that the decree so obtained is conclusive in his favor, but that, independently of that decree, he is the equitable owner of the stock.

We are of the opinion that the decree in question is of no validity as to the complainants in the present suit. They were non-residents themselves ,• had in their own possession the title of the stock in the form of a certificate; were served with no process; had entered no appearance to the suit, and were in all probability totally ignorant that any proceeding of the kind had been instituted. It would be a violation of the first principles to hold them bound by such a decree.

Upon the facts as proved we are of opinion that the money with which the stock was purchased in 1864 was the money of Joseph K. Brick, and that the certificate of stock was issued in his name and delivered to him, and is now in the hands of the executors of his will.

The evidence, it is true, shows that he made the purchase on the recommendation and through the agency of his brother, and that on several occasions Joseph K. Brick declared that he was holding the stock for his brother’s benefit, and even made affidavit to that effect for the purpose of being relieved from a tax which otherwise he would have been obliged to pay for the stock.

But such declarations alone are not sufficient to create a trust, for the reason that the stock had been bought with his own money, and there was no delivery of it by means of an assignment or any form required in law to establish an executed donation. It is not the case of the delivery of property to one party in trust for another, where it would be bad faith in the former, and a fraudulent appropriation of what was not his own, to repudiate the trust. He who sets up a claim to property of any kind must establish his own right. If he has no right in himself, it matters not what declaration may have been made to others by the party to whom the property does, in fact, belong. If, for the purpose of avoiding taxation, the latter deny that he is owner, and asserts that some other is owner of property which he has bought with his own money, and the possession whereof he retains, and thus obtains exemption by imposing upon the officers of the Government, he subjects himself to the penalties of the law provided for such cases, but his bad faith is no foundation for a claim of title on the pai't of any one else.

Decree affirmed.