BROWN v. DAVIS et al., 62 F. 519

PARDEE, Circuit Judge (after slating tli,e fads). The complainant's original bill, and .the answer thereto of Harris Master-son, ought to hate been referred to a master, to be purged of scandal and impertinence, at the cost of the respective parties. In the 1‘ecord we find no note of evidence by either party, but we do find, in no particular order, ex parte affidavits, documents, depositions, and'evidence taken orally before the examiner; and we also find the following certificate: “In the Dinted States Circuit Court for the Eastern District of Texas, at Galveston, Texas. “Gli. No. 242. J. Gordon Brown v.

Cornelius Davis et al. “This is to certify that, as trial judge sitting in the above numbered and styled cause at Galveston, Texas, in November, 180⅝ there was much oral testimony heard and considered by the court on the trial of said above numbered and styled cause that was not; taken down by any one in writing, neither the attorneys for complainant nor respondents requesting that it be done; and that said oral evidence is not in the record of this cause, upon which, in part, the decision of the court was based. “Aleck Boarman, “.Judge Sitting on the Trial of the Above Numbered and Styled Cause.” It was (he duty of each party to prepare and file in the record a note of the evidence upon which he relied, and it was his further duty to see that that evidence was filed with, the clerk in such shape that it could be embodied in the transcript of appeal.

The evidence found in the record wholly fails to sustain the sweeping charges of conspiracy and fraud contained in the original and amended bills. As to Archie R. Masterson, it not only fails to establish the charges of conspiracy and fraud made against him, but it is so strong in bis favor as to affirmatively relieve him of all suspicion of any conduct in any wise affecting his personal or professional integrity. There is not a particle of trustworthy evidence in (he record showing or tending to show that Archie R. Mastei'son was employed by the complainant, J.

Gordon Brown, at the instance of any person whatever, to prepare for him a full and complete abstract of all transfers in Brazoria county appertaining to the lands described in the bill, or that he was employed by any person whatever to make any such abstract, or that, in compliance with such employment, or without such employment, he did prepare and deliver to complainant what he represented as being a full and complete abstract of said property, or ever prepared or delivered to the complainant any abstract whatever. Nor is there any evidence in the record showing or tending to show that Archie R.

Masterson knew anything about, or had anything to do with, any loan that the complainant made to Cornelius Davis, prior to the making thereof. The evidence affirmatively shows that Archie R. Masterson was not called upon by complainant to make any abstract at all in relation to any lands; that he made no abstract of the Davis lands; that he knew nothing of the loan by the complainant to Cornelius Davis; and that he was not even aware, at the time said loan was made, that he himself was named as trustee in the trust deed given by Cornelius Davis in favor of Harris Masterson in September, 1889.

The complainant’s charges so recklessly made against Archie R. Masterson have for a foundation only the fact that, prior to Cornelius Davis’ application for a loan, Archie R. Masterson made an abstract, at the request of one Faickney, of the title to other lands, and on an application of Faickney to another mortgage company for a loan. Upon- this fact of an abstract made at the request of another company of the title of other lands for another borrower of money is built the 'whole case of the complainant against Archie R.

Masterson, by which he seeks to throw the consequences of his own carelessness and inattention to business details upon an innocent party. As to Harris Masterson, the complainant’s case is but little better founded. The evidence wholly fails to support the charges of fraud and conspiracy made against him. It is not true that Harris Masterson aided and assisted Cornelius Davis in his negotiations with the complainant, J.

Gordon Brown, for the loan of money upon lands described in the bill, or that he represented to complainant that said land was clear of incumbrances except the sum of $700, or that he made any agreement. with the complainant as to the payment of $700 in case said loan should be granted, or that he represented to and led the complainant to believe that the said $700 was the only in-cumbrance upon said property. It is not a fact that Harris Mas-terson induced the complainant to employ Archie R. Masterson for any purpose whatever.

It is not a fact that the complainant relied upon any representations of Harris Masterson. Nor is it a fact, under the evidence in the case, that Harris Masterson knew anything about the application of Cornelius Davis for a loan, or had anything whatever to do with forwarding the same. The evidence does not show that Harris Masterson combined and conspired with any person whatever to cheat, swindle, or defraud complainant in relation to the Cornelius Davis loan, or any other loan; and the evidence sustains as genuine the deed of trust made and executed by Cornelius Davis to Archie R.

Masterson, trustee, on the 10th .day of September, 1889, to secure, in favor of Harris Masterson, the sum of $3,821.75, with 12 per cent, interest; and it; shows that said deed of trust was placed of record nearly one month prior to the application of Cornelius Davis to Brown Bros, for a loan upon the lands in question. The evidence in the case fails to show that, in regard to Brown Bros., or the complainant, the said Ilarris Masterson, at the time Cornelius Davis applied for a loan, occupied any relation of trust or confidence to the said Brown Bros, or to the complainant.

We say “at the time Cornelius Davis applied for a loan,” because that is sufficient for this case, as on that very day any confidential relations that may have previously existed in relation to loans from Brown Bros, applied for through Harris Masterson were severed. The impression, however, left on our minds by the evidence is that at no time did fiduciary relations exist between Brown Bros, and Harris Masterson, no matter how much confidence Brown Bros, or J. Cordon Brown may have had that Harris Masterson was a reliable man to deal with.

The evidence rather tends to show that 'Brown Bros., in their transactions with Harris Masterson, treated and trusted him as the agent of the borrower, and not as their own, and in all respects dealt with him at arm’s length. We have observed in other cases that this has been the practice with kindred concerns engaged in loaning money, where the rule invaria bly is to put all the expenses upon the borrower; and we find nothing in this record to show that Brown Bros., or the complainant, J. Gordon Brown, followed any other practice.

Brown Bros., and their rules and dealings, necessarily come to the front in this case. It was with Brown Bros, that Harris Masterson had dealings from 1888 to 1890 on behalf of various borrowers whom he represented. It was to Brown Bros, that the letters of Harris Masterson, which appear in the record, were written. It was to Brown Bros, that Cornelius Davis made his application for a loan. It was Brown Bros, who made the loan to Cornelius Davis, and who paid off the vendor’s lien which Harris Masterson held.

And the evidence in this case leaves a very strong impression with us that Brown Bros, are the real complainants in this suit, and any other impression spots incompatible with the assumption that J. Cordon Brown and R. L. Brown testified fully and truly in giving evidence in the case.

These conclusions necessarily dispose of all the alleged equities asserted by the complainant, except such as may arise from the following facts, developed by the evidence: Cornelius Davis owned a tract of land in Brazoria county, on which Hams Masterson held a vendor’s lien for the sum of $700, of several years’ standing, and also a deed of trust to secure the payment of a debt amounting to $3,321.75, which deed of trust was duly recorded in the records of Brazoria county on the 21st of January, 1890.

On the I9th day of February, 1890, Cornelius Davis made application to Brown Bros., money lenders, for a loan of §2,000, to be secured by deed of trust-on said lands; and in such application represented that there was no lien upon the said land except the vendor’s lien in favor of Harris Masterson for §700.

Brown Bros, decided to make the loan requested by Cornelius Davis, but in so doing did not provide themselves -svitli an abstract of the title of Cornelias Davis, as is usual in such cases, but relied upon a partial abstract received by them prior to the application of Cornelius Davis in relation to another loan to another party. Harris Masterson ■ was informed by the agent of Brown Bros, of an intent to pay off the vendor’s lien of $700, and also received the same information from Cornelius Davis.

Harris Masterson claimed from Davis the payment of an unsecured debt of $585 for amounts advanced for the payment of taxes, as well as the payment of his vendor’s lien, and obtained from Cornelius Davis an order upon Brown Bros, for the' sum of $1,285, the amount of the vendor’s lien and the unsecured debt, which Brown Bros, paid; and thereupon Harris Masterson executed to Davis a release of his vendor’s lien upon the land, but made no mention to Brown Bros., or to their agent, of the deed of trust in his favor on record in Brazoria county.

The contention of the compjainant is that when Harris Masterson, knowing the purpose of the complainant to secure a prior lien upon the property, received the amount of Ms vendor’s lien, it was his duty to make known that he also held a trust deed of record bearing upon the said land which would be prior in rank to the complainant’s mortgage; and' that by Ms silence with regard to the existence of the trust deed under the circumstances mentioned he is estopped in equity from asserting that trust deed as against the trust deed in favor of the complainant.

TMs view of the case is strongly supported by the authorities, although there- are some qualifications.

On the other hand, it is contended that Harris Masterson had good reason to believe that Brown Bros., who he supposed were making the loan, were fully advised of the existence of the trust deed, as shown by the records, because he had every reason to suppose that, as prudent business men, and according to the general practices of careful -money lenders in dealing with land, they had provided themselves, in the.matter of the loan to Davis, with the abstract and certificate usual in such cases, which abstract and certificate would have fully shown the true state of facts; and that Masterson, not being in any way connected with the loan, and only applied to with reference to the payment of his vendor’s lien, was not called upon to furnish information which he had the right to suppose was already in their possession.

There are some adjudged cases supporting tMs view of the case. As the whole case was presented in the court below, and even in this court, we do not feel called upon to enter into the merits of this contention.

If this were a case' in which the complainant had come into court with a fair presentation of the facts, evincing a disposition to assert his equities without injury to others, and had presented the matter of estoppel upon the real facts of the case as above stated, we are inclined to the opinion that he would not have been turned out of court without cofisideration of his right to assert the estoppel in question.

Such a case, however, is not the one. in hand, but rather a case where the complainant, by Ms reckless charges of fraud, and conspiracy to cheat, swindle, and defraud, against Harris Masterson and other parties against whom he had no equity whatever, impugning their pei-sonal and professional integrity, and following the same up with reckless evidence in support thereof, -which the slightest investigation would have shown him to he wholly unfounded, presents himself as one more inclined to ask equity than to do equity, and one not in court with such clean hands as entitle him to demand of the court to consider favorably to him the partial equity suggested, even if it were otherwise well founded.

Certainly, as the case was there presented, the decree of the circuit court dismissing the complainant out of court was properly given; and, even as the case is presented here, we see no sufficient reason to disturb the same. Affirmed.