
    Cunningham v. Erwin.
    Where a plaintiff who had sued to recover a sum from defendant, and filed a supplemental petition praying for the recision of sales and transfers of property alleged to have been made by defendant in fraud of his. creditors, takes a rule on defendant to show cause why the issues presented by the petition and supplemental petition should not bo tried separately, and the rule is made absolute, the court will be considered as having exercised its discretion as to the mode of trial best calculated to promote the ends of justice; and when no injury lias resulted to the defendant therefrom, its decision will not be interfered with.
    from the Fourth District Court of New Orleans, Strawbridge, L
    
      Watts and for the
    
      Mott and for the defendant.
   The judgment of the court was pronounced by

Rost, J.

The plaintiff alleges thathe-was a creditor of the late Henry Hitchcock, in the sum of $28,660 39£, for work and labor performed and materials furnished in and about the buildings and grounds of said Hitchcock, in the city of Mobile, in the yeai-s 1838-39; that he has received on account $12,000, as appears by the statement annexed to his petition.

He further alleges that Hitchcock had mortgaged to the president, directors and company of the Bank of the United States, all his property in the city of Mobile, including that upon and about which the petitioner had expended his labor, to secure a debt of $800,000; that, after the death of Hitchcock, the bank became anxious to collect their claim, and to that end proposed to his legal repro.sentatives to take the mortgaged property in satisfaction and discharge of the debt, but that it was objected by the defendant, who is the brother-in-law of Hitchcock and the executor appointed by his will, that there were uncovered claims, amounting to $150,000 and mostly held by mechanics and laborers, for which provision ought to be made; that it was finally agreed that the bank should pay into the ■hands of tire -defendant, as trustee for the holders of those claims, the sum of $150,000; that the defendant actually received said sum, and assumed personally the payment of this and other unsecured debts. The plaintiff availing himself of the alleged stipulation in his behalf, asks a judgment against the defendant personally for the balance due him.

The defendant excepted to the action, 'on the ground that it is barred by the laws of the State of Alabama, where the succession of Henry Hitchcoclc was opened and declared insolvent. He further answered denying the indebtedness of the estate of Hitchcock to the plaintiff, and the receipt of any sum of money in trust or otherwise for the benefit of the plaintiff, or of any other creditor of Hitchcoclc; he averred that, in all things relating to the affairs of said estate, he had acted as the agent of Mrs. Hitchcock, his sister, and had fully accounted for all his acts to her, and disbursed for, and paid over to her, all sums of money received by him.

After the issue had thus been formed, the plaintiff filed a supplemental petition, by which he instituted a revocatory action against the defendant and asked Idle avoidance of certain sales and transfers of property alleged to have been made by him in fraud of his creditors. The exception taken by the defendant to this proceeding was dismissed, and an answer to the merits filed. At this stage of the cause the counsel for the plaintiff took a rulo upon tho defendant, to show cause wlay tile issues raised should not be tried "separately, to wit: the issue of the indebtedness of the defendant to the plaintiff; and secondly, if said issue was found for the plaintiff, tho issue of simulation. This rule was made absolute, and the issue of indebtedness was submitted to a jury who could not agree; a second trial was had with a similar result; and the parties then consented to take the opinion of the majority as the verdict. The majority of the jury were in favor of tho defendant.

The plaintiff moved for a new trial, which the judge refused, stating at tho same time his unwillingness that the case should be earned to the Supreme Court, under the impression that ho approved of the verdict. Two juries having already failed to agree, and the judge believing that if a new trial was granted no better result would follow, thought it best to compel tho parties to carry their differences before the appellate court. From the judgment rendered on tho verdict of tho majority, the plaintiff has appealed.

Tho exception taken by the defendant in his original answer wa3 properly overruled. In the account filed by the administrator the plaintiff is recognized as a creditor, though the amount due him is not set down, probably because he did not prosecute his claim against the estate. But [nothing compelled him to incur that expense, as he may have been satisfied with the stipulation of the defendant in his' behalf. If any thing could have been gained by proving the claim against the estate, the defendant might at all times have had the benefit of it by paying the debt.

Moreover the law of the State of Alabama, requiring the creditors of insolvent estates to file and prove their claims within a limited time, under the penalty of’ forfeiture, was passed several years after the death of Hitchcock, and after the defendant is alleged to have assumed to pay the uncovered debts. The right of the plaintiff to be paid, if he is one of the creditors contemplated by the trust, was perfect, and could not be taken away by subsequent legislation.

The defendant alleges that the rule to separate the issues was improperly made absolute, and asks that the whole case be remanded, should the court think the plaintiff entitled to his action.

This is a question of practice, in which the district judge has exercised his discretion in the 'manner which to him seemed best calculated to promote tho ends of justice. ITis decision has worked no injury to the defendant,- and justice does not require that we should interfere.

On the merits, we consider it proved that the defendant received from the bank of the United States the sum of $150,000, and assumed personally to pay the unsecured creditors of Hitchcock, one of whom he himself'was to the amount of nearly $40,000. The testimony of Fisher, Broion and Barney, leaves no doubt on our minds as to the nature of tho agreement. The debts due by tire estate, b'eáídes the claim of the bank, amounted nearly to $250,000; but many of the creditors held collateral securities, and the defendant believed the sum he received sufficient to satisfy the uncovered claims. His efforts to conceal the agreement from the creditors whom he did not intend to pay in full, in order that he Plight purchase their claims at_'a'discount, and the fact that, in one instance, he succeeded in doing so, show that his object in making the arrangement was to secure the amounts due him and his friends, and to speculate upon the necessities of the other creditors, most of whom were mechanics and laborers.

' The sum thus received by him, being in his hands a trust fund for the benefit of a particular class of creditors, each of those creditors has the right to enforce tho specific execution of the trust to tho extent of his particular interest. It is what would bo termed, under our laws, a stipulation in favor of third persons, of which they always have the right to avail themselves.

Considering that the plaintiff’s allegations place him among the creditors of Hitchcock whom the defendant is bound to pay, the only question remaining is whether those allegations are true; and here we will premise that our decision rests upon the evidence applicable to the allegations as they are made. Tire plaintiff having claimed the value of his work, without alleging any contract, we have taken the value proved, in preference to the price stated by some of the witnesses to have been stipulated for part of the work. We hate disregarded the probable estimates made by the witnesses, as we did in the case of Seaton v. Second Municipality, 3 An. 44. Statements that the work done by the plaintiff for Hitchcock was worth from $25,000 to $30,000, without any knowledge in the witnesses of the quatitit/ of work actually done, áre not evidence.

The plaintiff claims $5,900 for making Water street, and $300 for working on Conception street, under contracts. No contracts are shown, nor is there satisfactory evidence to show the quantity and value of the work dono on those streets, and the liability of Hitchcock to pay for it. It results from the evidence that the corporation of the city of Mobile was to pay Cunningham, in bonds, for mailing Water street, aftd that Hitchcock was to cash those bonds. It is proved that the plaintiff transferred to Hitchcock ci(y bonds to the amount of $3,450 99, for which, under this agreement he is entitled to a credit, in a general settlement of accounts. Beyond this amount, the claim for making Water street must be disallowed; the claim for making Conception street, is not proved.

There is no Conflict in the evidence as to the quantity of work done on the lots mentioned in the plaintiff’s account for Henry Hitchcock. But it is otherwise with 1'e'spect to the prices charged. The plaintiff’s witnesses say that the prices are low, those of the defendant consider them too high, on the ground that the materials for filling up were furnished by Hitchcock, and were near1 the lots filled up. They say that those materials were worth at that time ten cents per cubic yard.

This distinction has not been made by the witnesses of the plaintiff. We think there is much force in it, and that the prices charged should be reduced. The reduction which we would feel disposed to make would probably bring'down the' average price of the work under thirty-seven and a-half cents a cubic yard. As however, it is admitted by the defendant’s counsel, that thirty-seven’and a-half cents a cubic yard is a fair average remuneration, we will take that to be the reaV value. A deduction of $3,287 43¿ will have to be made on that account from the amount claimed by the plaintiff.

The plaintiff admits credits, specified in his account, amounting to $12,000. But William Edmunds, one of his witnesses, who was the clerk of Hitchcock before and at the time of his death, has testified, under a commission taken by the defendant, that he had knowledge of the state of accounts between Hitchcock and the plaintiff up to the'time' of the death of Hitchcock, and that he paid to the said plaintiff, for and on account of said Hitchcock all the items of the account annexed' to the commission, at the times and dates therein specified; that the account is in his (the witness’) hand writing; and that he has no doubt of its correctness. Besides the credits admitted by the plaintiff, this account contains charges of payments made to the plaintiff, on account of his work, and also for the rent of a house belonging to Hitchcock, which it is proved he occupied: these items amounting together to the sum of $6,732 81, must be allowed.

The charge of $375 for hauling brick is not proved. Tho witness R. I). James proves that Isaac H. Erwin, the administrator of Hitchcock’s estate, paid on plaintiff's account the sum of $1050 99, which is also 'to bo deducted from his account.

The credits to which the defendant is entitled, are as follows:

Deductions on the price charged for opening Conception and "Water sis. $2,749 01

Deduction on the value of the work as charged,..................3,287 43¿-

For hauling brick.............................................. 375 00

Payments admitted...........................................12,000 00

Additional payments proved by Edmunds.........................6,732 81

Payment proved by 11. JD. James................................1,050 99

$26,195 24Í

This sum deducted from the amount of the plaintiff’s claim, loaves a balance oiT $2,465 14¿, for which we believe him entitled to a judgment. In arriving at this balance, we have kept out of view the sum advanced by Major Hitchcock for the purchase of the plaintiff’s property, tiffs appearing to us a transaction in which the estate of Henry Hitchcock is not concerned. Under tho laws of Alabama and the facts of the case, the plaintiff is entitled to eight per cent interest, from the judicial demand only. The transactions between the plaintiff and Hitchcock, were earned on in such a loose and irregular manner, as to make it extremely difficult to ascertain their rights with precision; if we have not reached tho full justice of the plaintiff’s case, the fault is not otirs.

It is ordered that the judgment of tho court below be reversed, and that the plaintiff recover of tho defendant the sum of $2,195 14¿, with interest at the rate of eight per centper annum from the 8th of April, 1846, till paid, and costs in both courts. It is further ordered, that this cause be remanded to try the issue of simulation.  