Court Opinion

ID: 8809274
Source: CourtListenerOpinion
Date Created: 2022-11-26 14:58:14.24278+00
Date Added: 2024-06-11T17:04:13.357851
License: Public Domain

WARD, Circuit Judge
(dissenting). Unless we are to hold that there can be no such thing as an improvident sale of an expectancy in a decedent’s estate, on the ground that an attempted sale must be regarded as a cover for a loan of money on usury, the assignments by Braker to Rabe of his legacies under the fourteenth and fifteenth articles of his father’s will were sales. The instruments he executed expressly so stated, and the testimony of the witnesses to the same effect is overwhelming. There was in neither assignment any promise by Braker to repay the money he received. It is true that in the assignment of seven-tenths of bis legacy of $50,000 under the fifteenth article of the will he guaranteed that it should produce $35,000 to the purchaser. In the case of Orvis v. Curtiss, 157 N. Y. 657, 52 N. E. 690, 68 Am. St. Rep. 810, the defendant not only guaranteed plaintiff against loss of the money he put into a joint adventure in stocks, but also guaranteed him a profit of $5,000. The similarity between that case and this is that the court below held, in it that the contract made was really a loan upon usury (12 Misc. Rep. 434, 33 N. Y. Supp. 589), whereas the Court of Appeals refuse to treat the contract as anything else than what it professed to be. In that respect the decision is an authority for our treating the transactions in this case as sales.
The policies of insurance on Braker’s life were assigned to Rabe and his assigns, and the premiums were paid by him and them. It was natural and proper for the purchaser to take out insurance against the contingency of Braker’s death before anything should vest in him under his father’s will. I do not suppose that a loan upon bottomry would become usurious if the lender protected himself against loss by insuring the arrival of the vessel. That would be a perfectly independent contract.
The policies were not assigned to Rabe “as creditor,” as stated in the opinion of the court. On the contrary, the form of assignment used was absolute, and not the form of assignment of the policy as collateral.
The complainants sued as owners of one-half the legacy under the fifteenth article and of the last installment of $10,000 under the fourteenth article of the will, by virtue of a sale of the same to them under a collateral note securing an advance of $10,000. The court holds that a decree of the surrogate in August, 1912, made after this suit had been instituted in the District Court, is res adjudicata as to the legacy under the fourteenth article of the will. It is quite clear, however, under Byers v. McAuley, 149 U. S. 608, 13 Sup. Ct. 906, 37 L. Ed. 867, and Waterman v. Bank, 215 U. S. 33, 30 Sup. Ct. 10, 54 L. Ed. 80, that the federal courts may determine the rights of citizens of other states in a decedent’s estate, and that the state court must recognize that determination in making distribution. The complainants in this case, citizens of Pennsylvania, submitted their *20•claim to the legacy under the fourteenth article of the will to the District Court of the United States, and that court obtained jurisdiction of them and of the trustee and of the claim, which jurisdiction continued unless or until the bill should be dismissed. The fact that Braker was subsequently brought in as an indispensable party did not create jurisdiction in the court for the first time. The joinder related and enabled the court to render a decree with the same effect •as if he had originally been a party.
Of course, if the complainants were mere tools of Burr et al., as the court finds, they are bound by the judgment in the state court ■action; but I think tire proofs show that they were- bona fide lenders •of $10,000 four years before the action in the state court was brought. The proofs leave much to be desired in respect to straightforwardness of all the parties concerned, but for these reasons I think both judgments'should be reversed.