X'dAMPBELL fl. BROWN.
795
the medicine in this case belongs' depends more 'upon the expedients employed to recommend them to the public than upon the merits of the medicine. The cost to one of manufacturing and selling is therefore no criterion by which to determine the cost to another. (3) The defendants object to the allowance of interest.' This objection will be overruled. The liability, although tl:l: dellido, arises upon <contract, and interest should be included.· The record shows a dalibera.teand inexcusable violation by the defendants of their contract, and the oourt is not disposed to release them from any part of the liability which they have incurred. The decree will be in accordance with the mll$ter's report, as modified by this opinion. If counsel cannot agree. upon the modifications, there will be a recommittal to the llULIlter 1.0 reo ltate the
MCCAMPBELL
et al.
fl. BROWN ".
or.
(Ctrcuit court, B. D. Ohio, W. D. January 26, 1892.) L EQUITY J'tmJSDJOTION-'rRuST8.
A bill brought by the assignee of a partnership alleged that the partnersblp beUl a mortgage upon the lands of a cattle companYI and that, for the purpose of discharg. ing the same, the oompany negotiated a sale tnereof through one B.· who agroed to take as his commission a mortgage upon the company's oattle; that by the terms of the sale the deed was placed in escrow. the depositary also receiving a part of the price, under an agreement to apply the same to the discharge of the liens on tJ;1e land, Including eomplaiJiants' mortgage; that, while in the midst of the transaction. B., fraudulently, and for the purpose of coercing the payment 01 hia commlasion in cash commenced a suit against the cattle company, and garnished the purchaser; and that thereupon complainants agreed with the depositary. as of the purchaser, that the depositaJ1' should retain a sum suftl.cient to cov,el' &'s claim, until an order could be obtained from a competent court for the payment of the same to complainants. The bill asked thatB. should be decreed to have no claim npon the tund, and that the purchaser be decreed to pay the balance ot the price to complainants. HeW. that, as the bill showed that the IIlOney was held in trust, it stated a case cognizable ill eqUity, although Do wu no party to the trust agreement. The fact that the money so held was subll8quentIT retranaferred 1»7 the depoat. tary to the purchaser did not dlaoharge the trust..
9. BAllE.
a.1UM_REMBDY AT LAw.
In cases involving trusts the jUrllldletlOD of equit71s Dot dependent Upon the absence of a remedy ali law.
I. EQUITY-PARTIBS.
The bill having alleged that the partnership was In fact solvent, but had been oompelled to make an because ot the cattle compan,'s tallure to pay Ita it was not a misjoinder of parties to make the individuals ot the partnership parties plaintUf with their aB8ignee, since these allegations showed that there might be a surplus for distribution to the partners after the discharge of tho partnership lIabilities.
In Equity. Suit by Edwin A. McCampbell, as assignee of Dodd. ridge & Co., and others, against J. R. P. Brown and David Sinton. Heard on demurrer to the bill. Overruled. S'l'ATEMENT BY SAGE, J.
The bill sets forth that the complainant is the assignee of the estate u,d effects of the of Doddridge & Co., of CorpusChrisU"
796'
FEDERAL REPORTER,
vol. 48.
'l'ilX;, Rl'ldthat"onApril26, 1888, the Dimmitt County Pasture Company, a corporation under the laws of Texas, executed to Doddridge & Co. its mortgage upon about 180,000 acres ofland in Texas, to secure the payment of $64,000, and subsequent advances to be made. For the purpose of paying off this mortgage and other incumbrances the pasture company placed their property on the market for sale. The defendant J. R. P. Brown,on behalf of the pasture company, entered upon negotiations for 'the sale of the prop(lrty to the defendant David Sinton. The pasturecornpany proposed through Brown to sell said lands to Sinton for the price of ,$2 per acre,and upon the execution and delivery of the deed tdtl1ke a lease of,the land from him for a term of 10 years, and to pny,as therefor the Bum 0£10 cents per acre, the pasture company also agreeing to pay all taxes on the land, and to keep up fences and the ranch premises. One dollar and sixty-two and a third cents per acre was to be paid in cash, and the balance of the purchase money to be retained by Sinton to the payment of the lease money. On this balance he. to pay interest at the rate of 5 per centum per annum. Sinton accepted the pl"Oposition, with the exception that the amount as above from the purchase money should be increased $10,000, and the rent be paid quarter-yearly from said reserves; the t<:>?efor five years, with pr.ivilege of extension for an additional term offiye years on the same terms and conditions, or with such other security Jor rent asrriight be agreed upon. These modifications, which date May 30, 1891, were accepted hy the pasture to take for his commission company., At the same time a mortgage Qnthe cattle on the ranch or other security for $10,000. .'. The1:?VI:./lets forth tbat, in order to provide the means of completing tbe sale, the;pasture company executed its deed of conveyance of said placed tbesame in the bands of Charles P. Taft, In escrow"t<> .be..delivered to. Sinton wbenever the incumbrances should be fullY': .. 'Sinton, to provide the I'llean8 of corn pleting the sale onbis pllwed tbe necessary funds iii the hands of Taft for the payment of, t4e incumbrances upon the land, and Taft was authorized t whenevet"sMisfied that the title was cleareq,; to deliver the deed to Sinton, and Sinton then was to complete payment to the complainant McCilmpbellasltssignee. ' The bill further sets forth tbat on tbe 19th of June, 1891, while tbe parties. '. Vi. "the.rnids.t of tbe transa.cttotl of purchase as above set fortb" the defendant Brown, fraudulently, and for the purpose of coercing, in violation of his agreement, a }layment of his commission in casb, brougbthisaction in the court of common pleas of Hamilton county, Ohio, against the pasture company, for $10,000, and caused a writ of attachment'·'.to. issue, and 'the defendant Sinton to be bJ.rnished. The transaction"l'Jall then proceeded so far that it could not be 8topped, and tbe complainants, under the. stress of circumstances, agreed with Taft, as tbe agent of Sinton in tbat behalf, tbatall the balance of the purchase money should be paid td them' upon their mortgage, and receipted for as f'Un payment ofputcl1ase price in the hands of Taft for Sinton; until an order could beobtaihed' from a ootilt of competent jurisdiction di"
M'CAMPBELL V. BROWN.
797
recting the payment of that money to the complainants in a proceeding ,that would operate as a protection to Sinton, and that in the mean time ,"they should hold said fund in trust for yO'lr orators." Accordingly, all the balance of the purchase money excepting $10,650 waR paid over to·the complainants, and that amount was left in the hands of Taft "in trust for the purpose aforesaid, and subsequently by him turned over to said Sinton, and still remains in the hands of said Sinton, in trust for the purposes aforesaid·." It .further appears from the bill that as a part of the contract of sale, and as a mode of enabling it to be completed, it was agreed that the money Should be applied directly to taking up and canceling the incumbrancesupon said property, the mortgage to Doddridge & Co. held by the complainant McCampbell, as assignee, being the last, and the money.pay,able thereon being insufficient to wholly discharge it; and that this was the only practicable way by which the parties could accomplish. the sale. The complainants aver that the sum so held by SintOll "does not, and did not at any time, belong to said pasture com pany, and that, in pursuance of the agreement aforesaid between said Brown and Sinton and the said pasture company and the said Doddridge Company, it was to be paid to the said assignee of Doddridge & Co. upon their mortgage as aforesaid, with the express agreement with the said Brown that he should have no payment out of the said purchase money, but would take his. compensation, and such as belonged to his associates. in the form of notes secured by mortgage of the said pasture company." The complainants further aver that Sinton did not, when served as garnishee, hold any money belonging to the pasture company, and liable to attachment in suit against said company, nor has he since held anys:ucb [money';, and that .the only claim made against Sinton is for an accQunt!of the said $10,650. ·.The bill further. avetstbeinsolvencyof Brown, and that, if..the mo.neyshall be collected by him in said proceeding, it will be entirely lost, to tbeoomplainants, and that they are without an adequate remedy at Jl}.w.j that Brown refuses to release the attachmen.t, and is pressing with the vi.ewan,d intent of subjecting. said money in the said handa of. to his Own upon his said claim, and that the complainant.",are not .parties to that proceeding. .The prayer of the' bill is that Brown may be adjudged to have no claim. upon said fund, and that complainants' title thereto may be quieted as against him; that Sinton may be ordered and decreed to pay over to the complainants said sum of $10,650, and for other and Jurtherrellef. Th.e respondent Brown demurs to the bill-Fir8t, Jor insufficiency; 8econd, because, if the complainants hll-ve any cause of complaint against respondent, they have a plain. adequate, and complete remedy at law; Itnd;.third, that there is a misjoinder of parties respondent. r .Bateman for complainants. , .J.,A·. WMrnIi!'; .f{)bE. and J. /. Glidden. for respondents.
798
FEDERAL
SAuE,J., (tift(ljf' stating the facts aB above.) The demutredsonbebalf oHhe respondent Brown, upon the ground that 'the bill shows no cause for equitable relief against him. The conteiltionofcounsel is that he was no party to the trnst agreement set up in the bill,whereby $10,650 of the purchase price was transferred by Sinton to Taft, to be held by him until anorder CoUld be obtained from a court of (lompetent jurisdictieri directing the payment of that money tooom:plainants in a proceeding that would operate as a protection to Sinton, and that in the meantime they shouIa hold said fund intrust for the complainants. CounsM say that the rights of Brown could in no manner be affected by and that neither the pasture company nor the com'plaimtnts, nor both combined, with or without the concurrence of Sinton, clJuldcreate a trust controlling Brown's rights in the fund. Nothin'g ot'that sort is claimed or setup in the bill. It is perfl'ctly clear that the rights of Brown could not be affected or in any way abridll;ed by any agreement to which he was not a pa,rty. Nothing of the 90rt is claimed on behalf of the complainants. On: the contrary, they expressly recognize that the trust agreement was subject to whatever rights Brown had in the premises. They do claim that Brown was bound by his agreement with the complainants to take a mortgage as specified in the bill for his claim, and all that was stipulated for in the trust arrangement was that, the money should be left in the hands of Taft, for Sinton, until an order could be obtained from· a court of competent jurisdiction directing its payment to complainants. The demurrer must be overruled. The averments of the bill are that tbe money was a trust fund in the hands of Charles P. Taft for the purposes stated in the bill. The subsequent transfer of the money by Taft to Sinton did not and could not destroy the trust. What effect shall be given to this trust agreement is not a question now before the court. It was made after the commencement of Brown's action in the state conrt, and while that was still pending. But this cause is not in conflict, nor in any sense an interference, with that action. This court cannot directly or indirectly enjoin proceedings in a state court. What has been dune in the action there, if anything, does not yet appear. All that is now decided is that the bill states a case in favor of the complainants. . The objection that the complainants have a plain, adequate, and complete remedy at law is not well founded. The bill avers a trust. The jurisdiction in equity is undoubted. It was argued upon the hearing 'Of the demurrer that the holding by Taft was as bailee, and not as trustee. How it may turn out to be upon the testimony remains to be ascertained. We are now dealing with the averments of the bill, and, as they set forth the transfer and delivery of the money by Sinton to Taft, in trust for the purposes specified, there is nothing upon which the argument that this isa case of bailment can be sustained. The objeotion that there is a misjoinder of parties complainant must also be overruled. The bill sets forth that, although Doddridge & Co. were in fact solvent, their means were unavailable for the conduct of their busineSs and immediate payment of their debts, by reason ofthe
FIRST NAT. BANK fl. MOORE.
799
failure of the pasture company to pay its liabilities to them, and that they therefore made an assignment of their property to their co-complainant McCampbell, for the use and benefit of their creditors. There was no objection, under these circumstances, to making the partners of Doddridge & Co. co-complainants with the assignee, because it appears from the face of the bill that there may be a surplus after discharging the liabilities of the partnership, which might, in that event, be decreed to the partners themselves.
FIRST
NAT. BANK OF
ALMA, KAN.
fl. MOORE
et ale
(Cirouit Court, 8. D. Ohio, E. D. January 28, J.892.)
1.
EQUJ'I'T l'LBADINO-'l{ULTIlI'ARIOU8NESB.
In Eq·uity. Suit by the First National Bank of Alma, Kan., for the use ofFrank I, Burt, receiver, against David H. Moore and Augustul!' Norton, the First National Bank of Athens. and the Pomeroy Bank; of Pomeroy, Ohio, for the cancellation of certain certificates, and the return of certain 110tes held' as collateral security therefor. Heard on demurrer to the bill. Overruled. The bill sets forth that the First National Bank of Alma was duly organizedunder the national banking act, and for more than two years last past has been doing a general national banking business at Alma,in the state of Kansas,under and by virtue of said organization; that, during the time said bank was engaged in business, John F. Limerick, of Alma,.wasJts president, and had principal charge and control ofits business, and. his wife, Mary Limerick, was assistant cashier; that they two had the entire charge and management of the bank, except as the board of directors might otherwise direct, and that they were also directors; that the .stockholderswere largely residents of other states; that the defendants Moore and Norton are officers in said First National Bank of A.thens and said Pomery National Bank, the said Moore being cashier of the First National Bank of Athens, and vice-president ofthe Pomeroy National Bank, and Norton president of the First National Bank of Athens,. and an officer and director of the Pomeroy National Bank; that said defendants gave their personal and entire attention to the conduct-