Browning v. Porter.

An injunction bond was given as required, with sureties conditioned to "abide the decision which shall be made thereon (the original suit), and pay all sums of money, damages and costs that shall be adjudged against them, if said injunction shall be dissolved."

Said injunction was dissolved and the bill dismissed.

A motion is now made for the assessment of damages, to wit: the amount of the judgment in the state court, $619; costs in state court, $25; attorney's fee in injunction suit, $200.

It is clear that the bond did not cover the amount of the original judgment and its costs, nor the attorney's fee. Bein v. Heath, 12 How. 176; Oelrichs v. Spain, 15 Wall. 230. To the same effect are the Missouri cases cited.

Another question was suggested in the light of the authorities produced, viz.: whether a court of chancery in dissolving an injunction would itself proceed to assess damages resulting therefrom, or drive the defendant to an action at law on the injunction bond.

The motion before the court does not call for a decision on that point, although nothing is seen in the cases cited to deprive the chancery court of its power to finally determine the controversies between the parties before it. The case of Bein v. Heath was an action on an injunction bond, and the dicta in the opinion are very strong.

In that case the court says:

"A court proceeding according to the rules of equity cannot give a judgment against the obligors in an injunction bond when it dissolves the injunction."

Is that dictum to be received as a general rule, or limited to cases like that then under consideration? It sometimes happens that injunction bonds are conditioned to pay damages which the court may assess, and hence, unless the court assesses damages, no cause of action arises on the bond. It may be that the provisional injunction is dissolved on motion, before final hearing and decree on the merits, and that on final hearing the decree is for plaintiff, or for defendant, thus varying the

Singer Manufacturing Co. v. Yarger.

matter of costs and damages. That final decree would be operative in a suit on the injunction bond, so far as its tenor required; and such a decree would in many cases be necessary to hold the parties to the bond.

It is obvious that the several cases on such bonds must defend on the conditions stated; some requiring the antecedent action of the chancery court, and some requiring no such

action.

It is well settled that the proceedings of United States courts in equity are not affected by local statutes; and it is supposed to be equally well settled, that, chancery courts having obtained jurisdiction of the parties and the controversy, will retain jurisdiction for the final settlement of the whole subject matter, so as to avoid multiplicity of suits, including all incidents of the litigation.

Whatever the true rule may be in that respect, the motion in this case asks for what could not be allowed, either at law or equity.

Motion overruled.

SINGER MANUFACTURING COMPANY V. ISRAEL YARGER.

(District of Iowa. October, 1880.)

1. TAX SALE-AGREEMENT AMONG BIDDERS NOT TO BID AGAINST EACH OTHER.— An agreement among bidders at a tax sale, either express or tacit, that they will take turns in bidding, and not bid against each other, renders the sale and certificate thereof void.

2. TAX CERTIFICATE - RIGHTS OF ASSIGNEE.- It is settled as the law of Iowa that the assignee of a tax certificate holds it subject to all the infirmities by which it would have been affected in the hands of the tax purchaser. 3. TAX DEED BY WHOM ATTACKED FOR FRAUD.- While section 897 of the code of Iowa (1873) gives to the owner of the land a remedy for fraud in the tax sale of the same, it does not deny to others a like remedy. A remedy for fraud is allowed to the party injured by the general principles of equity jurisprudence which prevail in the federal courts. A mortgagee of the land may have such remedy.

MCCRARY, Circuit Judge.-The complainant is the owner of a mortgage executed by the defendant Yarger upon certain lots in the city of Knoxville, in this state, given to secure a promissory note for $2,000 and interest. The respondents, McCormick and Baker, are the grantees in a certain tax deed of the same premises, which, if valid, is prior and paramount to complainant's mortgage. The bill alleges that the tax deed is void, and prays a decree to cancel the same and for a foreclosure of the mortgage. The question to be decided is whether the tax deed is a valid conveyance of the property as against the complainant's mortgage. The tax deed is attacked upon the ground that the tax sale was fraudulent and void by reason of the fact that the bidders at the sale entered into an unlawful combination, whereby each was to take his turn in bidding, it being understood that there was to be no competition, and that they were not to bid against each other.

The evidence establishes the fact that there was, if not an express, at least a tacit agreement among the bidders present at the sale that they were to take turns in bidding and that they were not to bid against each other. That such a combination among bidders is fraudulent and vitiates the sale, is, as a general proposition, entirely clear. Whether this doctrine is applicable to the present case is the only matter of controversy. The respondents, McCormick and Baker, who claim under the tax title, were not the purchasers at the tax sale, but are the assignees of the tax certificate. It is settled as the law of this state that the assignee of such a certificate holds it subject to all the infirmities by which it would have been affected in the hands of the tax purchaser. Light v. West, 42 Iowa, 138.

It is insisted by counsel for respondent that the tax deed

Singer Manufacturing Co. v. Yarger.

can be attacked on the ground of fraud in the sale only by the owner of the land, and not by a mortgagee. In support of this proposition, section 897 of the code of Iowa (1873) is cited. That section, among other things, provides "that in all cases where the owner of lands sold for taxes shall resist the validity of such tax title, such owner may prove fraud committed by the officer selling the same, or in the purchaser to defeat the same, and if fraud is so established such sale and title shall be void." While this section gives a remedy only to the owner of the land, it cannot in my judgment be rightly held to deny a similar remedy to others. The complainant's right to recover in the case does not depend upon the statute. If a fraud has been committed, and by it the complainant has been injured, the remedy is provided by the general principles of equity jurisprudence.

It cannot be presumed that the legislature of the state intended by the provision above quoted to deprive any person of a remedy for an actual fraud which existed independently of the statute. Suppose the case of a fraudulent combination to deprive a mortgagee of his security by procuring a sale of the mortgaged premises for taxes without notice to the mortgagee and without competition among bidders. Will it be contended that in such a case the mortgagee could have no remedy, because a remedy in a similar case is given by statute to the owner? I think not. If the statute would bear such a construction, it is more than doubtful whether it would have the effect to deprive this court of its equity jurisdiction in such The United States v. Howland, 4 Wheat. 108; Dodge v. Woolsey, 18 How. 347; Barber v. Barber, 21 How. 583; Lawrence v. Clark, 2 McLean, 568; Boyle v., 6 Pet. 648; Noonan v. Lee, 2 Black, 500.

cases.

Decree for complainant.

Beadle v. Beadle.

BEADLE V. BEADLE.

(District of Nebraska. May, 1881.)

1. WILL-POWER OF SALE- - CONSTRUCTION.-A will which authorizes the executors to sell real estate and pay certain legacies out of the proceeds, does not vest title in such executors - especially where by the same instrument the testator, bequeaths the "rest and residue" of said real estate to his heirs. The entire instrument is to be construed together and so as to harmonize all parts, if possible.

2. SAME-SAME-SAME.- A devise of land to the executors to sell passes the title; but a devise that the executors may sell, or shall sell lands, or that they may or shall be sold by the executors, gives them only a naked power of sale.

3. CONVERSION OF REALTY INTO PERSONALTY-ELECTION.- Where executors are by the will distinctly directed to sell real estate and convert it into personalty and pay proceeds to certain persons, equity will consider the conversion as made and will treat the real estate as personalty; but where the same persons receive the bequest, whether it remain in the form of realty or be sold and converted into money, those persons may elect to take either. No other person can have any interest in the question.

4. ASSIGNMENT-QUIT-CLAIM DEED-TRUST.- An assignment by one devisee under a will of all his interest in the estate to another devisee, which was made to defraud creditors, is void, and no relief can be granted under it to either of the parties. A quit-claim deed made by one joint owner to his co-tenant, though absolute upon its face, will, if intended as a mere matter of convenience in making conveyances to purchasers of portions of the land, be treated as between the parties as a conveyance in trust only, and not as divesting the grantor of his interest in the land. Evidence to establish a trust in this case considered.

5. EVIDENCE-CONTEMPORANEOUS ACTS-DECLARATIONS AND WRITING.- - Where the testimony of the parties in interest is directly in conflict as to the purpose and intent with which a certain quit-claim deed was executed, the conflict may be determined by a consideration of the corroborating testimony, and particularly by the acts, declarations and writings of the parties contemporaneous with the transaction in question.

In equity.

The complainant claims to be the owner of the undivided. one-half of certain real estate described in the bill. It appears from the evidence that he claims to have derived his title thereto under the will of John L. Beadle, deceased, the material parts of which are quoted in the opinion.