Summary
APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF OHIO.
In the year 1883, James Robb, a resident of Hamilton County, Ohio, died, leaving an estate, and James Hampden Robb, May R. Miltenberger, and Charlotte M. Pancoast as his surviving children. Charles A. Kebler, an attorney at Cincinnati, was appointed administrator. Mrs. Miltenbergerand Ellen W. Robb had claims against the estate. A written agreement was executed by all concerned in the following terms:
“ For an amicable settlement of all claims and controversy as to the estate of James Robb, deceased, late of Hamilton County, •Ohio, it is mutually agreed by the undersigned as follows:
“That Mrs. Miltenberger’s claim for an annuity of one thousand dollars, in accordance with her agreement with her father Tor her son’s education from the time he became ten years of age until he became twenty-one years of age,’which is now in suit No. 37,317 in the Superior Court of Cincinnati, and James Hampden Robb’s claim in suit No. 37,820 in the same court, and Mrs. Ellen W. Robb’s claim in suit No. 67,460 in the court of common pleas of the said county of Hamilton, are all hereby allowed by Charles A. Kebler, administrator, by and with the consent of the undersigned and at their request, as valid claims against said James Robb’s estate, and shall be satisfied and discharged in the manner hereinafter provided and agreed to as to each of them, respéctively; the claim of Mary Robb in suit No. 67,459, common pleas, to be also provided for and discharged as hereinafter agreed.
“ 2. The deed which is alleged to have been made by the said James Robb on or about November 14th, 1879, to his daughter, Mrs. Isabella San Raman, conveying to her the tract of land near Cheviot, then owned and occupied by him, being without consideration and in consequence of his insolvency at that time wholly void as to his creditors, it is agreed by Charles A. Kebler, as administrator of said estate, that in pursuance of the statute in such case provided and by request of the other subscriber hereto he shall and will immediately bring an action for the recovery of the said land, or for the sale of said land and avoidance of the said pretended conveyance for the benefit of said estate and its creditors.
“ 3. Besides the- outstanding debts for personal and household expenses of James Robb, the cost of the monument heretofore agreed by the undersigned to be erected at Spring Grove Cemetery in memory of the said James Robb and all the proper costs and expenses of the administration of his estate and of the suit for the recovery of the land above mentioned, including the administrator’s counsel’s fees, shall first be paid out of the moneys now in his hands.
“4. After paying the same the remaining moneys in his hands and the proceeds of the sale of the land aforesaid, or so much as necessary, shall be set apart and invested for two trust funds, as follows: One of the said funds shall be made sufficient to pay Mrs. Miltenberger the amount already due of said annuity, in compliance with the agreement made with her father for account of her son’s education, and also to yield and pay the said annuity year by year until her son becomes twenty-one years of age, if he lives, and the surplus of said fund, if any remaining after he becomes of age, or in case he dies before becoming of age, shall fall into the residuary estate to be divided as hereinafter agreed; the other of the said trust funds to be sufficient to secure and pay to Mrs. Ellen N. Robb an annuity of six hundred dollars ($600.00) for and during the term of her life, payable semi-annually, and to commence from the — day of-, a.d.-•, and from and after her decease to pay the said Mary Robb, her daughter, if she survives her mother, an annuity of three hundred dollars ($300,) payable semi-annually, for and during tbe term of tbe life of said Mary, and that the annuities so to be paid to the said Mary R. Miltenberger, Ellen W. Robb, and Mary. Robb, respectively, shall be in full satisfaction and discharge of all their claims aforesaid as creditors of the said estate.
“The appointment of trustees and appropriation of funds necessary and sufficient for the two trusts aforesaid shall be effected as soon as practicable by the said Charles A. Kebler, the administrator, and the parties concerned.
“ 5. All the pictures, library, letters and papers, plate and other chattels, useful or ornamental, belonging to the said estate shall be turned over to James Hampden Robb, reserving for Mrs. Charlotte M. Ran coast some one article to be agreed upon by them, which portions of the estate shall be received and taken by the said James Hampden Robb in full satisfaction and discharge of all his claim aforesaid as a creditor of the said estate.
“ 6. The residue, if any, of the moneys now in the administrator’s hands and which shall arise from the sale of the real estate aforesaid, after providing for said trusts, and also any residue which may be left of the trust funds so set apart, after fulfilling the said trusts respectively, shall be divided and paid in four equal shares to and among the children and heirs of the said James Robb, deceased, viz., James Hampden Robb, Mrs.- Isabella San Raman, Mrs. Mary R. Miltenberger, and Mrs. Charlotte M. Pancoast.
“ It is understood that the foregoing agreement shall take effect immediately upon the order of the court for the sale of said real estate, and the setting aside the deed from James Robb to Isabella San Raman herein referred to and not before.
■ “In witness whereof the said Charles A. Kebler; administrator of the said estate, Mary R. Miltenberger, Charlotte M. Pancoast, James Hampden Robb, Ellen M. Robb, and Mary Robb have hereunto set our hands and seals in five parts interchangeably this — day of June, in the year 1883,”
In carrying out the settlement provided for in the said agreement, ten thousand dollars in the hands of the administrator were invested in the purchase of certain pieces of real estate in the city of Cincinnati from one Moritz Loth, who conveyed the same to James Hampden Eobb and Charles E. Strong, trustees, by a deed dated February 5,1885. This deed expressed a consideration of ten thousand dollars as paid by the said Eobb and Strong, as trustees, but did not define a trust or name any cestui que trust. By an. instrument bearing date the same day, Eobb and Strong, trusteés, leased the same property to Moritz Loth during the joint life of Ellen W. Eobb and Mary Eobb, and during the life of the survivor, Loth, as lessee, agreeing to pay to the trustees a rent of $500, payable semi-annually, and to purchase the same property, on the death of Mary and Ellen W. Eobb, for the sum of $10,000.
Eobb and Strong, the trustees,-were residents of the city of New York, and Ellen W. Eobb, Mary Eobb, and Moritz Loth resided in Hamilton County, Ohio, and the deed and lease were duly recorded in that county.
On March 30, 1885, Moritz Loth mortgaged his interest in said property and in other real estate to one William Stix, to secure a loan of ten thousand dollars.
In November, 1885, one Meyer Gugenheim, a judgment creditor of Moritz Loth, brought an action in the Court of Common Pleas of Hamilton County, Ohio, to subject all the real estate of Loth to the satisfaction of his judgment, making parties defendant a number of creditors of Loth, who held title to or liens upon the property claimed to be his, including Eobb and Strong, trustees, and William Stix. A summons in that action was issued for Eobb and Strong, trustees, and also for William Stix, as well as for the other defendants. On the 19th day of November, 1885, Kebler accepted service of that summons for Eobb and Strong, trustees, and for William Stix, as follows:
“We accept service of summons in the within cause for Charles E. Strong and James Hampden Eobb, trustees, and for William Stix, this 19th November, 1885.
“Kebler & Eoelker,
“ Attorneys for above-named defendants,■ duly authorized
The petition described various parcels of real estate- claimed to be the property of Loth, and asked that the several defendants be required to show what .interest they respectively had therein, and that the liens be marshalled and priorities determined, and a sale be made. As to the parcels owned by Robb and Strong, as trustees, the petition averred that they held the property only as security, and asked that the court so find. As bearing on this averment, interrogatories were attached to the petition, requiring Robb and Strong, trustees, to state what sum of money was paid to Loth as the consideration of the conveyance to them; what indebtedness existed at the time of the conveyance in reference to said property; whether- any contract existed between them and Loth in reference to the property, etc.
The sheriff returned the summons: “ Service accepted by Kebler & Roelker, attorneys for Charles E. Strong and James Hampden Robb, trustees, and for William Stix, as per acceptance above written.”
On December 18, 1885, Kebler filed the answer and cross-petition of Robb and Strong, trustees, correctly setting forth their title to the premises,.and prayed that their interest be protected therein. He answered under oath the interrogatories as attorney for Robb and Strong, trustees, assigning as a reason therefor that they were non-residents of the State and absent therefrom.
Kebler also filed in the same case the answer and cross-petition of said William Stix, and at a later stage of the case he filed an amended answer and cross-petition of William Stix setting up the maturity of several of the mortgage notes, breach of condition of the mortgage, and prayed a sale of the leasehold in the premises now in controversy, and of other property mentioned in that cross-petition. To these pleadings of Stix, Kebler filed answers' for Robb and Strong, trustees, Avhich he himself swore to.
On February 15, 1887, he consented to an elaborate decree on the cross-petition of William Stix, selling all the property described in the petition, and appointing George Sidney Tyler master commissioner to make the sale. That part of the decree which referred to Eobb and Strong, trustees, was as follows:
“ And it is ordered with the consent of Henry W. Taylor, and Charles E. Strong, and James Hampden Eobb, trustees, that the fee-simple title of the premises described in said mortgage to William Stix be sold and said premises be sold freed from the claims of Henry W. Taylor, and Charles E. Strong, and James Hampden Eobb, trustees, and all other parties in this suit, their respective rights in and to said premises being transferred to and reserved in the proceeds of such sale.”
By proceedings under this decree, on April 16, 1887, the property in question was sold, a part thereof to August Yos .and a part to William Stix, and on May 24, 1887, conveyed, by a master, to them in fee simple, Yos paying into court the amount-of his bid, $9100, and Stix paying $3131.32.
In the final decree of distribution it was ordered that the sum of $11,361.66, being principal and interest, should be paid over by the piaster to Eobb and Strong, trustees, or Kebler, Eoelker & jelke, attorneys, and $7926.02 to William Stix or Kebler, Eoelker & Jelke, attorneys, and those sums were paid to Charles A. Kebler, attorney. •
On June 23, 1887, Charles A. Kebler gave to F. G. Eoelker a conveyance of lands as security for moneys due by Kebler to Eoelker, and also to indemnify the latter against any loss he might sustain or liability that he might be under by reason of the partnership business of Kebler & Eoelker, attorneys.. On November 25, 1887, Charles A-. Kebler died by his own hand, intestate and insolvent. -
In January, 1888, in the Court of Common Pleas of Hamilton County, Ohio, at No. 79,812, William J. Coppock, as administrator of Charles A. Kebler, deceased, filed a petition setting forth, among other things, the death of Kebler intestate and insolvent j that there was a large amount of real estate which it was necessary to sell in order to pi’ovide means to pay debts; that certain persons had, or claimed to have, title to or liens against.said real estate, etc. The minor children of Kebler and F.G. Eoelker were made parties defendant. To this petition Eoelker filed an answer, in which he alleged the existence of the conveyance or mortgage made to him in June, 1887, by Kebler, and that J. Hampden Eobb and Charles E. Eobb, as trustees, claimed to have had dealings with Charles A. Kebler, acting and professing to act as a partner of him, the said Eoelker, whereby they claimed that the said partnership and the said Eoelker were indebted to them; that he, the said Eoelker, did not know, and. was unable to state, the particulars of said transactions; that they were concealed from him by the said Charles A. Kebler during his lifetime, etc.; and that he, Eoelker, if liable by reason of said transactions, was entitled to the protection of the said conveyance of June, 1887; and he further alleged that the said Eobb and Strong, trustees, were necessary parties to the determination of the rights, of the parties to the litigation, and asked that they be made defendants and be called upon to answer and to set up their claims, etc.
In this suit Eobb and Strong, trustees, appeared and filed an answer and a cross-petition, in which they set forth the particulars of their title to or interest in the lands described in their conveyance to Moritz Loth and the lease of the latter to them, and the proceedings in the Gugenheim case. In respect to that case their averments were as follows:
“ And these defendants further say that on said day one Meyer Gugenheim, having recovered by the consideration of this court a judgment against the said Moritz Loth, brought suit in this court, case No. — in this court, against the said Moritz Loth, and the defendants and divers other persons, praying, among other things, that these defendants may be declared to hold said lands by way of mortgage as security for the said, purchase price on said lands of $10,000, and that said lands might be free from the claim of these defendants and all other persons parties thereto to satisfy the said judgment of the said Meyer Gugenheim and the claims of divers persons therein made defendants.
“ And these defendants further say that thereafter, to wit, on the 18th day of December, 1885, Charles A. Kebler and Frederick G. Eoelker, then partners engaged in the practice of law under the firm name and style of Kebler & Eoelker, of the city of Cincinnati, entered the appearance of these defendants in such cause and filed an answer therein on behalf of these defendants; further say therefore, to- wit, upon the 10th day of May, 1887, said firm of Kebler & Eoelker was dissolved, and Charles A. Kebler, Frederick G. Eoelker, and Ferdinand Jelke, Jr., entered into a partnership and engaged in the practice of law in the city of Cincinnati under the firm name and style of Kebler, Eoelker & Jelke, as the successors of said .firm of Kebler & Eoelker, and these defendants say that thereafter all steps in said cause on behalf of these defendants were taken by said firm of Kebler, Eoelker & Jelke, and by none others; and these defendants further say that such proceedings were afterwards had in said cause that the said premises were sold, free of the claims of these defendants and of all other persons whatsoever, by one George SidneyTyler, who was appointed special master commissioner by this court in said cause for the purpose of making such sale, and such proceedings were thereafter had in said cause that a decree was made in said cause on the 19th day of May, 1887, whereby it was ordered, adjudged, and decreed that said George Sidney Tyler, special master commissioner in said cause, pay to these defendants or their counsel, Kebler, Eoelker & Jelke, out of the proceeds of said sale, the sum of $11,361; and these defendants further say that said sum was duly paid on the 16th day of June, 1887, to said firm of Kebler, Eoelker & Jelke by said George Sidney Tyler, special master commissioner, as ordered by the decree of said court, and that no portion thereof has been paid to these defendants or accounted for to them; and these defendants further say that since which time, to wit, on the 23d.day of November, 1887, Charles A. Kebler departed this life, and that Frederick G. Eoelker and Ferdinand Jelke, Jr., are the surviving partners of said firm. Wherefore these defendants pray that said Ferdinand Jelke, Jr., may be made, party defendant hereto and that it may be adjudged that these defendants are creditors of said firm of Kebler, Eoelker & Jelke, and that the property in the petition and cross-petition of Frederick G. Eoelker sought to be sold may be sold, and that out of the proceeds thereof said sum $11,361.66, with, interest from the 16th day of June, 1887, may be paid to these- defendants, and that these defendants may recover judgment against Frederick G. Eoelkerand Ferdinand Jelke, Jr., as surviving partners of Kebler, Eoelker & Jelke, for said sum of $11,361.66, with interest from the 16th day of June, 1887, and for their costs. ”
Subsequently, on May 17, 1888, Eobb and Strong, trustees, obtained leave of court to withdraw their said answer and cross-petition, and filed a demurrer on the ground that they were not proper parties to the case, which demurrer was sustained by- the court, and Eobb and Strong were, on May 26, 1888, dismissed with their costs.
On May 12, 1888, Eobb and Strong, trustees, at No. 43,368 of the Superior Court of Cincinnati, Hamilton County, Ohio, brought a suit against August Yos and "William Stix. In the petition, after reciting the conveyance by themselves to Moritz Loth and the lease of the latter to them, they set forth the proceedings in the Gugenheim case, and alleged as follows :
“ Arid the plaintiffs further say that on said day one Meyer Gugenheim, having recovered by the consideration of the Court of Common Pleas of Hamilton County, Ohio, a judgment against the said Moritz Loth, brought suit in the said Court of Common Pleas, numbered 74,375 in the said court, against the said Moritz Loth and these plaintiffs and divers other persons, praying, among other things, that these plaintiffs might be declared to hold said lands by way of mortgage as security for the said purchase price of said lands of $10,000, and that the said lands might be sold free from any claims of these plaintiffs and all other persons parties thereto, to satisfy the judgment of the said Meyer Gugenheim and the claims of the divers other persons therein made defendants.
“ And these plaintiffs further say that in said cause no summons or other process was ever issued for these plaintiffs (who then were and'ever since have been non-residents of Ohio) and no advertisement was ever made for these plaintiffs,.and that they had no notice of said proceedings; and these plaintiffs further say that thereafter, to wit, on the 18th day of December, 1885, one Charles A. Kebler,- then engaged in the practice of tbe law with one Frederick G. Boelker, under the firm name and style of Kebler & Boelker in the said city of Cincinnati, did, without authority from the plaintiffs and without their knowledge, enter the appearance of these plaintiffs in said case, and did file an answer therein on behalf of these plaintiffs, using for that purpose said firm name of Kebler & Boelker.
“And these plaintiffs further say that thereafter, to wit, prior to the 11th day of May, 1887, the said firm of Kebler & Boelker was dissolved, and the said Charles A. Kebler, the said Frederick G. Boelker, and one Ferdinand Jelke, Jr., entered into a partnership and engaged in the practice of the law in said city of Cincinnati, under the firm name and style of Kebler, Koelker & Jelke, as successors to the said firm of Kebler & Boelker; and these plaintiffs further say that thereafter all steps in said cause purporting to be on behalf of these plaintiffs were taken in the name of the said firm of Kebler, Boelker & Jelke.
“ And these plaintiffs further say that all steps taken in said cause at any time purporting to be on behalf of these plaintiffs were taken without the knowledge of these plaintiffs and without any authority from these plaintiffs; and these plaintiffs say that all orders, decrees, and judgments entered in said cause purport to have been entered by and with the consent of these plaintiffs, but that the same were entered by the said Kebler, Boelker & Jelke, and without the knowledge, consent, or the authority of these plaintiffs, and that these plaintiffs had no knowledge of said cause or the institution thereof, or of any proceeding therein, until December 2,1887, being long after the conveyance of said lands to the purchasers thereof, in pursuance of the pretended sale made in said case.
“And these plaintiffs further say that such proceedings were had in said cause No. 74,375, that the said premises were sold by one George Sydney Tyler, who was appointed special master commissioner by said Court of Common Pleas for the purpose of making said sale of property, and that said special master commissioner purported to make said sale free of the claims of these plaintiffs and of all other persons whatever parties to said cause, and that the said parcels' of land were purchased, respectively, at said sale by the said August Yos, purchasing lots numbered 3, 4, and 5, hereinbefore described, of the subdivision of the tract of land on the west side of Yine Street, 100 feet front and extending back westwardly 132 feet, of the same width in front as in rear, and the said William Stix purchasing the other lots hereinbefore described, to wit, all those parts of lots 2, 4, and 5, of block 12 of Findlay and Ludlow subdivision, hereinbefore described.
“ And these plaintiffs further say that in said cause numbered 74,375'a decree was made on the 19th day of May, 1887, whereby it was ordered, adjudged, and decreed that the said George Sydney Tyler, special master commissioner in said case, pay to these plaintiffs, or to Kebler, Eoelker & Jelke, purporting'to be their attorneys in said cause, out of the proceeds of said sale, the sum of $11,361.66.
“And these plaintiffs further say, that thereafter, on the 16th day of June, 1887, the. said George Sydney Tyler, special master commissioner, as ordered by the decree of said court, but without the knowledge and consent of these plaintiffs and without their authority, did pay to the said Kebler, Eoelker & Jelke, and the said Kebler, Eoelker & Jelke received, the said sum of $11,361.66, and that no portion of the said sum has been received by these plaintiffs or been accounted for to them.
“ And these plaintiffs say that they were never parties to said cause in law or in fact, and that the said sale as to them is null and void.
“ And these plaintiffs further say that the said transactions between them and said Moritz Loth were in truth and in fact a loan by them to the said Moritz Loth of the sum of $10,000, in consideration whereof 'the said Moritz Loth conveyed to them the premises hereinbefore described, and they executed to the said Moritz Loth the lease hereinbefore described, containing the privilege of purchase for the said sum of $10,000; and they say that in consequence thereof they have a first and best lien upon the said premises in the said sum of $10,000, with interest thereon, and that there is and remains due and unpaid thereon the sum of $10,000, with interest thereon from January 1, 1885, at six per cent per annum.
“ Wherefore the plaintiffs pray that the said claim may be established as a first and best lien on the said premises, and that unless the defendants shall pay to them the said sum of $10,000, with interest as aforesaid, at a short day to be fixed by the court, that the said premises may be sold for the satisfaction of their said claim, and for such other and further relief as they may show themselves to be entitled to in equity and good conscience.”
In the Superior Court case, summons wTas issued May 12, 1888, and served on August Yos, May 18, 1888.
On June 7, 1888, Yos filed his answer and cross-petition in said case, denying that the alleged acts of Kebler for the said Robb and Strong, trustees, in the Gugenheim case were with* out their authority, knowledge, or consent, admitting the sale to him under the proceedings in that case, and that the transactions between them and said Loth were in fact a loan by them to him of $10,000 at six per cent interest secured in the form of said deed and lease, but denying that they have any lien on said premises therefor or that any part thereof remains unpaid. By way of cross-petition, the said Yos set up the proceedings in the said Gugenheim case, and averred their regularity, and that said proceedings, orders, decrees, sale, and deed vested in him a valid title in fee simple to the said real estate purchased by him thereunder, free from all claims of said appellants and other parties to said cause, his payment therefor of $9100, and his possession thereof ever since the conveyance to him, May 24, 1887. He prayed “that the said claim and interest of the said Robb and Strong, trustees, in and to said real estate may be adjudged to be null and void, and that his title aforesaid may be quieted against the same, and for all other proper relief.”
On June 8, 1888, upon motion of said Robb and Strong, trustees, their said petition was dismissed, and as to the said cross-petition of Yos, the cause was continued for further proceedings. On July 7, 1888, the said Robb and Strong, trustees, filed their petition in said cause 43,368, Superior Court of Cincinnati, for a removal of the same on the cross-petition of said Yos to the Circuit Court of the United States, in and for the Southern District of Ohio, Western Division, and the order of removal was made.
In said petition they say that they are citizens and residents of the State of New York; that August Yos is a citizen and resident of the State of Kentucky, and William Stix is a citizen and resident of the State of Missouri. They further say that the said suit “is one of a civil nature, where the matter in dispute exceeds, exclusive of interest and costs, the value of $2000, and is one in which there is a controversy on cross-petition between citizens of different States.” They then state the facts, in substance, averred in their said petition filed May 32, and in said cross-petition of August Yos, the dismissal of their said petition, June 8, and their remaining in the case only as defendants to Said cross-petition of Yos.
On October 2,1888, the transcript of the record in said case was filed in the said Circuit Court, and numbered therein 4182.
On October 4, 1888, the said Yos filed his motion in said Circuit Court for the remanding of said cause No. 4182 to the Superior Court of Cincinnati, for want of jurisdiction in said Circuit Court.
On November 17, 1888, the Circuit Court overruled said motion. To which overruling the said Yos then entered his exception.
On November 26, 1889, on motion of the said complainants, said cause No.' 4182 was consolidated by order of court with cause No. 4148, all further proceedings to be had under the latter number.
In No. 4148, complainants’ bill stated the citizenship and residence of the parties as in their petition in the Superior Court case. They were all non-citizens and non-residents of Ohio. It alleged that said Eobb and Strong, trustees, owned certain valuable real estate in the city of Cincinnati, Ohio, which was in the possession of tenants under a lease for the life of two persons for whom said trustees acted. A judgment creditor of the lessee sought by judicial proceedings in the Court of Common Pleas of Hamilton County, Ohio, to subject his interest in these and other lands to payment of his claim. The petition was in the nature of a creditor’s bill, and made parties defendant a number of persons, including said trustees, holding deeds from the lessee, and charged that these deeds were intended as mortgages, and prayed that they be so decreed, and the property sold to satisfy said judgment.
The trustees were non-residents, and Kebler, of the law firm of Kebler & Roelker, and purporting to act for that firm, entered their appearance in the case and consented to a sale of the fee, it was alleged, without their authority or knowledge. The property was sold at judicial sale, and the proceeds received by Kebler and not paid over or accounted for by him to said trustees. The defendants, Vos and Stix, were purchasers. The bill sought to avoid the title so acquired by them, on the ground that the sale was absolutely void by reason of the fraud of Kebler.
On August 2, 1888, the defendant, Vos, filed a demurrer to said bill.
On August 28, 1888, the court held the bill “good on its face substantially,” and overruled the demurrer, and allowed Vos until the first Monday of October, 1888, to plead or answer to the bill.
On September 14, 1888, Vos filed a plea to said bill, setting forth the judicial proceedings referred to in said bill, and contained in Exhibits “ A,” “ B,” “ C,” arid “ D,” made part thereof, under which he purchased and acquired title, that he was “ a Iona fide purchaser of said premises for a good and valuable consideration, and without notice or knowledge that the acts and proceedings of said Charles A. Kebler and of the firm of Kebler & Roelker on behalf of said complainants, alleged in said bill, were unauthorized by said complainants and without their knowledge, or that said complainants did not consent to said sale, or of the alleged fraud on the part of said Kebler; ” and that he had no such notice until after May 12, 1888, when said complainants filed their said petition in the Superior Court of Cincinnati:
On September 27, 1888, the court overruled said plea, to which, said Yos entered his exception, and was allowed thirty days to answer, which time was, on November 26, 1888, extended to December 10, 1888.
On December 8,' 1888, said Yos filed his answer to said bill.
In this answer Yos admitted specifically all the allegations of said bill, except the following, which he denied, to wit: He denied that the said Kebler and-Kebler & Roelker had no authority to accept service of summons for said complainants in said Gugenheim case. He denied that said complainants had notice or knowledge of their answer and cross-petition in said case filed by said Kebler, or of their answer to the cross-petition of William Stix filed therein by said Kebler, or that said Kebler was not authorized to file the same. He denied that said Robb and Strong, trustees, did not consent that said premises should be sold free from their claim and title, thereto, or'that said claim and title should be transferred to or reserved in the proceeds of sale to be made under said decree, or that said Kebler and Kebler & Roelker had no authority to make or give such consent for them. He denied that said complainants had no knowledge of the order of distribution of the proceeds of said sale made in said cause, or of the payment of said sum of $11,361.66 to said Kebler, or that -said Kebler was not .authorized to receive said sum, or that the order of court directing such payment was null and void. He denied that said Kebler. was wholly insolvent at all times mentioned in said bill. Hé denied that prior to or at the time of his purchase of said premises he knew complainants were absent from the State of Ohio, or non-residents of said State during the time of said proceedings. He denied that the proceedings and acts taken and done in- said cause, purporting to be on behalf of said complainants, were Avithout authority, notice, or knowledge, or that they were done solely by fraud of said Kebler, or that they were ignorant of said suit and the proceedings therein and of the receipt of said money by said Kebler until after his death. He denied that the said decree in said cause Avas null and void as to said complainants, or that th.e said Court of Common Pleas was without jurisdiction to order the said premises sold free from their claim and title, or that said sale and conveyance to him by said Tyler were null and void. He denied that no rent had been paid under said lease' since February 5, 1886, or that there was due and unpaid rent since that date at the rate of $600 per annum, or that said complainants had any lien on said premises therefor.
Of the truth of the charge in said bill, that the said Kebler embezzled and appropriated said sum of $11,361.66 to his own use, and that said complainants received no part of the same, or of the charge therein that said Loth was insolvent, the defendant averred that he had no knowledge, and did not admit the same.
Admitting that he had failed and refused to perform any of the covenants and conditions of said lease as charged in said bill, he averred that he was under no obligation to perform the same, but that, by virtue of said sale and conveyance to him of the premises so purchased by him and the consideration of $9100, which he paid therefor, he acquired a perfect title to said premises in fee simple, including all the right, title, and interest of both said lessors and said lessee, and free from the claims of all the parties to said suit.
Further answering, said Yos averred that at the time said deed was made by said Loth to said Bobb and Strong, trustees, and said lease by them back to him, the transaction was understood and intended to be in fact a mortgage to secure an investment then made of $10,000 by said trustees for the purpose of furnishing an income to the said Ellen W. and Mary Bobb; that at the same time it was understood and agreed between said trustees and said Kebler, and said Kebler & Boelker, that the said Kebler should have entire charge of said investment and collection of- said rent or interest and pay same-, directly to said Ellen W. and Mary Bobb, with full authority to act for said trustees in carrying out. said trust in all matters required for the protection and collection of said interest and principal, and' in pursuance thereof, that he did, with the knowledge and consent of said trustees, collect interest on said $10,000, paid as rent from February 5, 1885, down to November- 1, 1887, and paid the same over to said Ellen. W. and Mary Robb, and that he had also paid over to the said Ellen W. Robb and Mary Robb a portion of said sum of $11,361.66, but how much thereof exactly he could not state.
And, further answering, said Yos averred that any alleged want of authority on the part of said Kebler, or Kebler & Roelker, to do any and all of the acts by him or said firm done and in said bill mentioned, was supplied, and all such acts purporting to be done on behalf of said complainants, were ratified by them as follows : Said complainants, on March 2, 1888, in the Court of Common Pleas of Hamilton County, Ohio, in the case of William J. Coppock, Administrator, v. John Kebler et al., No.- 79,812, on the docket of said court, voluntarily entered their appearance and filed their answer and cross-petition ; and again, on April-10, 1888, in the same court, in the case of William J. Coppock, Administrator, v. John Kebler et al., No. 79,902, on the docket of said court, said complainants having, on cross-petition of Frederick G. Roelker, been made parties defendant in said cases, voluntarily entered their appearance and filed their answer and cross-petition in each of said cases, being in the same language, and in each case averring that said Charles A. Kebler, for his firm of Kebler & Roelker, had entered the appearance of said Robb and Strong, trustees, in said action in the bill mentioned, brought by said Gugenheim, and had filed an answer therein on their behalf, and that on May 11, 1887, said firm of Kebler & Roelker had been dissolved, and had been succeeded by the firm of Kebler, Roelker & Jelke, composed of said Kebler and Roelker and Ferdinand Jelke, Jr., and that thereafter all steps taken in said cause on behalf of said Robb and Strong, trustees, were taken by said new firm; and that in the case aforesaid, brought by said Gugenheim, the premises in the said bill herein described had, pursuant to decree made therein, been sold by George Sidney Tyler, special master, commissioner appointed by the court for that purpose, free from the claims of said Robb and Strong, trustees, and all other persons whomsoever; averring further, that the decree had been made in said cause on May 19, 1887, whereby it was ordered, adjudged, and decreed that said special master commissioner should pay to said Robb and Strong, trustees, or their counsel; Kebler, Roelker & Jelke, out of the proceeds of said sale, the sum of $11,361.65; and further averring, that said sum had been by said special master commissioner, on June 16, 1887, duly paid to said firm, but no portion thereof had by said firm been paid or accounted for to said Robb and Strong, trustees; and further averring, that, on November 23, 1887, said Charles A. Kebler had deceased, and that said Roelker & Jelke were the surviving partners of said firm of Kebler, Roelker & Jelke, and praying that said Jelke might be made party defendant to said causes ; and that it might be adjudged that said Robb and Strong, trustees, were creditors of said firm of Kebler, Roelker & Jelke; and that the property in the petition and cross-petition of said Roelker sought to be sold might be sold, and that out of the proceeds thereof said sum of $11,361.65, with interest from June 16, 1887, might be paid to said Robb and Strong, trustees; and that said Robb and Strong, trustees, might recover judgment against said Roelker & Jelke, as surviving partners of said Kebler, Roelker & Jelke, for said sum and interest.
And, further answering, said Yos averred that said answers and cross-petitions were sworn to by the said James Hampden Robb, and were signed and filed by the duly authorized attorneys of the said Robb and Strong, trustees, that the same remained on file in said cases until May 16, 1888, when, said cases having in the meantime been consolidated • April 21, 1888, (Record, p. 164,) said Robb and Strong, trustees, filed a demurrer to said cross-petition of Frederick G-. Roelker, on the ground that they had been improperly joined as defendants thereto; and thereafter, until May 28, 1888, when said demurrer was sustained, and said Robb and Strong, trustees, were dismissed from said cases. A copy of said answers and cross-petitions was filed with the answer of said defendant, William Stix, to said bill, to which copy the said Yos makes reference and incorporates said copy in this his answer as part thereof.
Said Yos further averred that at the time of swearing to said answers and cross-petitions and filing them, said Robb and Strong, trustees, had full knowledge of all things and acts done in their behalf by said Kebler, and Kebler & Roelker, and Kebler, Roelker & Jelke, and they deliberately adopted them as done on their behalf and ratified them, and supplied all lack of previous authority upon the part .of said Kebler, and Kebler & Roelker, and Kebler, Roelker & Jelke, if any such there previously had been, which he, said Yos, denied. And thereupon said Yos prayed to be hence dismissed.
On the same day, December 8, 1888, the said August Yos filed in said Circuit Court and in said cause No. 414S his. cross-bill against the said James Hampden Robb and Charles E. Strong, trustees, William -Stix and Moritz Loth, stating fully the facts alleged in said bill of Robb and Strong, trustees, which were admitted in his answer to said bill; also the facts set forth in his said answer; also averring that on May 24, 1887, he entered into possession of the premises ;so purchased and conveyed to him, and had had possession thereof ever since, and had expended a large amount of money thereon in repairs and permanent improvements, which he was ready to show to the court; also referring to the petition hereinbefore mentioned, filed in a cause brought by said Robb and Strong, trustees, May 12, 1888, in the Superior Court of, Cincinnati, No. 43,368, removed to said Circuit Court and then on the docket thereof, No. 4182, in which they averred that the said transactions between them and said Loth — the deed and lease — were in truth and in fact a loan by them to said Loth of $10,000, for which sum and interest thereon they had a first and best lien upon said premises. Reference was made to the certified copy of said petition contained in the transcript of the record in said case 43,368, Superior Court of Cincinnati, on file in said Circuit Court in said case No. 4182, and the same incorporated therein.
Yos prayed that, in the event it be found by the court that the said acts done by said Kebler, or Kebler & Roelker, or Kebler, Roelker & Jelke, were unauthorized by and not ratified by and not binding on said Robb and Strong, trustees, and the said judgments, orders, and decrees of said Court of Common Pleas void as to them, and that he acquired no title by his purchase and deed of the said real estate, it should be decreed that the deed and lease aforesaid constituted only' a mortgage to secure to said Robb and Strong, trustees, the payment of said $10,000 and. interest, and that an account be taken to ascertain what proportion of said sum and interest ought justly'to be borne by him*'as chargeable against the land covered by said mortgage purchased by him, taking into accourit the payments which it might be found said Kebler, or Kebler & Roelker, or Kebler, Roelker & Jelke, had made on account of said interest and principal, or out of said sum of $11,361.65, to said Ellen W. Robb and Mary Robb, which proportionate sum that might be so found he thereby offered and.agreed to pay as said Circuit Court should direct.
On December 21, 1888, said Robb and Strong, trustees, filed their general replication to the answer of said Yos in No. 4M8.
On February 16, 1889, said Robb and Strong, trustees, filed their answer to the said cross-bill of August Yos, in which they denied that said Yos was an innocent purchaser for valuable consideration, without notice of the want of authority from the said Kebler, or Kebler & Roelker, or of the want of consent of said Robb and Strong, as trustees, to the decree of sale in the said Gfugenheim case; and they denied that any of the acts of said Kebler, or Kebler & Roelker, or Kebler, Roelker & Jelke, had been ratified by any act of said Robb and Strong, as trustees. As to whether the said transaction, Avhereby the said Loth conveyed to them said property for $10,000, and they leased the same back to him, was a loan, and Avhether said conveyance should be regarded as a mortgage, and to be foreclosed as such, they left the same to the determination of the court upon the proof to be made by said August Yos of the allegations of his said cross-bill.
They also denied any authority on the part of said Kebler, or Kebler &■ Roelker, to collect said rent, or to act for them in the collection of said interest or principal; and they denied that said Kebler collected any of the interest of said $10,000, and paid the same to Ellen W. Eobb and Mary Eobb, and if he did so, that he was authorized to collect the said principal.
On February 23, 1889, said Yos filed a general replication to said answer of Eobb and Strong, trustees, to his cross-bill.
The defendant, William Stix, did not file any demurrer or special plea to said bill, but otherwise filed pleadings substantially the same as those filed by August Y os..
On the final hearing, November 26, 1889, upon the pleadings and evidence, the court found the equity of the case with the defendants, and that the complainants had ratified said Kebler’s want of authority, and therefore, decreed the dismissal of the bill; and also that the title of Yos should be quieted against the complainants, as prayed for in his cross-petition.
Syllabus and headnotes are prepared by the reporter or publisher, not the court, and are not part of the opinion.
