Court Opinion

ID: 6960512
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:44:47.918893+00
Date Added: 2024-06-11T16:08:25.346563
License: Public Domain

Mr. Justice Dickey delivered the opinion of the Court: There are two errors, we think, in the finding and decree of the court below, for which the decree must be reversed and the cause remanded for further proceedings. It appears that there was a mortgage executed by William H. Shinn and Mary A. Kenny to Albert C. Burnham, as trustee for Austin M. Ward, of a date subsequent to the mortgage by Clement L. Shinn to Horace B., and subsequent to the purchase by the said William H. and Mary Ann, and to the execution by the master of his deed to them, for a loan of five thousand dollars made to them by Ward. Ward has, then, an equitable interest in the lands, derived from those holding the legal title, and this equitable interest is adverse to the complainant’s, and well might have been the subject of a cross-bill by Ward. The decree directly affects his security, for it subordinates him to the demand of Horace on two hundred and eighty acres, if it does not entirely throw him upon the one hundred and twenty acres assigned to Mrs. Kenny. We think he was net only a proper but a necessary party, and is entitled to be heard before a final decree. We are at a loss to see how the court below could assign the proportionate interests of William H. Shinn and Mary Ann Kenny at all under the pleadings. There is no prayer for such a proceeding, and no allegation in the pleadings out of which a prayer of this kind would be appropriate, and under a prayer for general relief the proceeding is not pertinent. Nor do we see the basis proper for such an allotment as the court has made on its finding. By the deed of the master, and by the assignment of the certificate, she is a joint owner of an equal share. If she was an innocent purchaser, her title must be maintained to the undivided moiety. Her title is not dependent upon the amount she paid, nor is it to be measured in value by this amount. If bona fide, it is good in the entirety, as the deed fixes it; and the court, having found it to be a bona fide title, held by an innocent purchaser, free of fraud, could not proceed to alter and diminish the estate it confers. But there are yet grave questions in the case, and as it is desirable to have a full and final disposition of it when reached again in the court below, we must proceed to consider them. The cross-bill of Clement L. Shinn presents the question of the partnership between him and Horace B., the complainant in the original bill. There is no doubt there was a co-partnership, commencing in September, 1864, and continuing to January 6,1865, when it was terminated, by the consent of parties, and on an express agreement. This partnership not only extended to the land in question and its purchase, but to its use as a sheep farm, and to the purchase of sheep for stocking it; and there is no doubt that the appellee Horace was a one-half owner of the interests in this undertaking, and was jointly liable for the losses, and is so still, unless discharged. It is equally clear that a flock of sheep, numbering over 500, was purchased by the partners, in 1864, for about $2227, which purchase money was paid by appellant Clement L. Shinn, and that there was a substantial loss by this purchase, as well as outlays, by said appellant. But appellee alleges that all this was settled by the agreement of the 6th of January, 1865, whereby he sold to appellant his interests in the partnership, quitclaimed the land, and took the notes and the mortgage. He says it was part of this agreement that the appellant should assume all the indebtedness of the partnership, and he should be discharged. Appellant denies this, and says that settlement related only to the land. It is true that Clement L. Shinn swears to the truth of his statement, and he is fortified by the statement, under oath,' of his son, the appellant Wm. H. Shinn, who details the conversations as he heard them between the parties; but the circumstances so strongly sustain the contrary statement by Horace, that we think the weight of evidence is with him. It is not likely that, with such losses already incurred in a joint adventure, Clement L. Shinn would have put an additional mortgage of $5000 on his farm, leaving open to future ascertainment and settlement the partnership in other matters, with no security for these losses, and no mention of any liability. Clement L. Shinn is also clearly mistaken in his statement that $3500 was given to cover the price paid by Horace on the land, and the other $1500 to secure him against his liability on the $3000 mortgage. In the first place, $5000 was not the sum actually passed between the parties. There was, undoubtedly, $300 more, for this amount appears to have been shortly thereafter paid. Besides, the note of Clement L., merely secured by a second mortgage on the same land, would be no additional guaranty against the payment by Horace of the $3000 note, or of his share of it, since, if Horace had, at any time, been called to pay the whole or part, he might have been subrogated at once to the rights of the mortgagee or assignee. Again, the quitclaim deed of Horace of all his interests in the laud, his return to his home, the several interviews between him and appellant Clement, when he never made mention of any partnership claim as far as we can see, the silence of appellant in all his letters in relation thereto, the language of his appeals for aid concerning the land, his offers to allow Horace the last cent,—all these circumstances contradict, potentially, any idea that there yet remained any settlement to be made of other partnership transactions, or any further liability thereon of the appellee Horace B. Shinn. We think, therefore, the cross-bill of Clement L. Shinn was properly dismissed. We come, now, to the question of the purchase of the certificate of sale by William H. Shinn and Mary A. Kenny, the assignment to them, and the deed of the master, whereby they are made tenants in common of the legal title in the land in controversy. We are satisfied with the finding of the court as to the title of Mary A. Kenny, in so far as the matter of fraud is concerned. It is proved that her husband paid a valuable consideration for her benefit for the land, on an agreement between her and William H., out of his own funds; and the evidence justifies the finding that she is an innocent holder. There is evidence of other payments by her, and we think her title to the undivided moiety has not been impeached. About the title of Wm. H. Shinn to the other moiety there is more doubt. It appears that Ebenezer Hoyes assigned the notes and mortgage of Clement L. and Horace B. Shinn, and about the 11th of December, 1867, the land was sold at foreclosure sale, when the assignee of the mortgage, Thomas B. Trower, became the highest bidder, and received a certificate of purchase. The effect of this sale was to cut out the subsequent mortgage of Horace B. Shinn, and to leave him, as other creditors, only the right of redemption. This is fortified by the fact that he had been made a party to the foreclosure proceeding, and had suffered default. The premises sold for $4702.76. It is proved that, after this, Wm. H. Shinn and Mary A. Kenny bought of Trower this certificate of purchase, and paid therefor $5140.70, and the certificate was assigned to them as joint owners. But it is said that the money paid by Wm. H. Shinn was furnished by the appellant Clement L. Shinn, who is his father, and was the mortgagor in the deed to the appellee Horace B.,—in other words, that the payment by William was a cover, and amounted to no more than a redemption by Clement L. to that extent, William H. becoming his trustee of the legal title; and there are many suspicious circumstances which, taken alone, would seem to justify this allegation. • But something more than suspicions are required to prove an allegation of fraud. The evidence must be clear and cogent, and must leave the mind well satisfied that the allegation is true. In the face of all the evidence in this case, we can not say that we are so satisfied. William H. Shinn appears to have been an enterprising and industrious young man. His business engagements are proved to have been numerous and important,—in various enterprises. He is proved, also, to have had credit, and neither his character for integrity nor that of his father is impeached. Both of them swear, whenever interrogated thereto, that none of the money of the father entered into this purchase; that although the deposits were made in the Bank of Mattoon in the name of the father, the money was really the property of the son, and explanation is given of the sources from which these sums were derived. That the father gave him five hundred dollars’ worth of property in February, 1869, was no evidence of fraud, as touching this matter. He had the right to rent from his father, as he did in 1869 and 1870, and he was entitled to the profits of his labor. The sale of the personal property was openly made, and the sale notes were taken by him, held by him without question of any body, and were by him deposited with Walker as collateral security for the $1500 loan, and their proceeds were applied by him towards the payment of the Hinton debt, and it appears that the proceeds of the Hinton loan were applied in replacing money borrowed by him with which to pay Trower. He had, also, the corn at Summit, which was applied in like manner. It is quite manifest that the Shelly loan was replaced by him, and, as he swears, all the money borrowed by himself and Mary A. Kenny had been repaid by them, except a small balance still due. As we said, there is the positive testimony of both father and son that the former did not furnish any money, but the latter, out of his own means, did furnish it, and this sworn statement is corroborated by the unimpeached character of the witnesses, and by the many circumstances which we have stated, and only assailed by certain other circumstances to which we have alluded, which, though in themselves suspicious, are not sufficient as we think to establish the allegation that the purchase of the land by Wm. H. Shinn was fraudulent; and we therefore reverse the decree below for error in this particular, and remand the cause for further proceedings in consonance with this opinion. Decree reversed.