Hoffman v. Overbey
By deed of May 3, 1872, Millner continued this mortgage in force as security for an additional loan of $15,000, which Hoffman, Lee & Co. agreed to make between that date and June 1, 1872,-if he needed that amount, or should call for it, or any part thereof,-upon the same terms as those expressed in the first mortgage.

On the 28th day of February, 1873, Millner and Hoffman, Lee & Co. enterd i nto an agreement in writing, which, after reciting the above mortgages, proceeded: 'Whereas, upon a settlement of accounts between the parties respecting the advances secured by said deeds, the said James R. Millner is found indebted to said Hoffman, Lee & Co. in the sum of $15,758.67, which sum it is agreed far exceeds the value of all the property, real and personal, embraced in said mortgage deeds; and whereas, the said James R. Millner is unable to pay the said debt in full, and has offered, by way of compromise, to said Hoffman, Lee & Co. that he and his wife will, by a proper deed, surrender and release to said Hoffman, Lee & Co., or to said Robert G. Hoffman, for their benefit, all the right, title, and interest whatsoever in law and equity, including the wife's contingent right of dower, of them, the said James R. Millner and wife, and to all the property of every kind embraced and described in said deeds of mortgage, except as hereinafter stated, provided the said Hoffman, Lee & Co. will accept the said surrender and release, when perfected by a proper deed, in full satisfaction and discharge of his said debt to them, and will allow him to remain in the occupation of the land described in said mortgage deeds as the tenant of said Hoffman, Lee & Co. until the 1st day of January, 1874, without paying any rent for the same, it being understood that since the date of the last-mentioned deed a portion of the tobacco fixtures of the tobacco factory described in said deed of mortgage has been sold by said James R. Millner to Millner Bros., with written consent of said Hoffman, Lee & Co., and the portion so sold is not included in the present compromise, which includes, however, all the residue of the mortgaged property, except that portion of the tobacco fixtures so sold; and whereas, the said Hoffman, Lee & Co. have accepted the said offer of compromise: Now, therefore, the parties do agree that the said James R. Millner and his wife shall, without unreasonable delay, proceed to execute and acknowledge a proper deed relinquishing, surrendering, and releasing to said Robert G. Hoffman, for the benefit of said Hoffman, Lee & Co., all their right, title, and interest whatsoever in law or equity in and to all the mortgaged property aforesaid, except the portion of the fixtures sold as aforesaid; and upon the delivery of said deed executed and acknowledged as aforesaid, ready to be recorded, said Hoffman, Lee & Co. shall and will accept the same in full satisfaction and discharge of the said debt due to them by said James R. Millner, and will allow him to occupy the land, including the factory, and all the buildings upon it, as their tenant, during the remainder of the present year, without paying any rent.'

Millner Bros., a firm composed of John P. Millner and Joseph T. Millner, (brothers of James R. Millner,) under date of March 5, 1873, entered into a written contract with the appellants, whereby the latter, in consideration of the delivery to them, by Millner Bros., of 16,000 pounds of twist tobacco, branded 'Jas. R. Millner's Extra Goldwin Twist,' promised to make title to the former for the property which by the agreement of 28th of February, 1873, was to be conveyed by James R. Millner and wife to Hoffman, Lee & Co.

On the 15th day of March, 1873, James R. Millner and wife, in execution of the agreement of February 28, 1873, made an absolute conveyance to Hoffman, for his firm, of the property covered by the mortgage of February 13, 1871, excepting therefrom certain fixtures previously sold to Millner Bros., with the consent of Hoffman, Lee & Co. This deed contained the recital that the parties agreed that the amount due from James R. Millner to the appellants, $15,758.67, 'far exceeds the value of all the said mortgaged property,' but that the latter had consented to accept that property, free of all claims at law or in equity, of James R. Millner and wife, or either of them, in full satisfaction and discharge of their debt.

The contract of Mrach 5, 1873, avi ng been satisfactorily performed, Hoffman, Lee & Co., by deed of June 10, 1874, conveyed to Millner Bros. the property embraced by the deed from James R. Millner and wife. Subsequently, September 3, 1874, Millner Bros. sold and conveyed it to James R. Millner, the consideration recited in the deed being $6,000 paid or secured to be paid.

On the 30th of June, 1885, more than 12 years after the settlement between James R. Millner and Hoffman, Lee & Co., the latter brought the present suit against James R. Millner, John P. Millner, and J. D. Blair, administrator of Joseph T. Millner. The suit proceeds upon these grounds, substantially: That in order to induce the plaintiffs to make the settlement of February 28, 1873, James R. Millner represented to them not only that he had faithfully invested and used in the purchase and manufacture of leaf tobacco all the moneys advanced by the plaintiffs, and was totally unable to discharge his debts to them, and would surrender 'all the property he owned,' with a clear title thereto instead of a mere security therein, but that the property held by plaintiffs as security was worth $6,000 to $8,000, and 'was all he had on earth,' and that unless they took it and released him, he would avail himself of the bankrupt law; that, relying upon such representations, the plaintiffs 'consummated the parol agreement to accept the mortgaged property from James R. Millner and release him,' and to that end took the deed of March 15, 1873; that the representations so made were false; that the mortgaged property was not worth the sum named by him; that the whole transaction, resulting in the release of James R. Millner, and the sale to Millner Bros., was pursuant to a plan formed between the three brothers to defraud the plaintiffs; that in violation of the arrangement under which the plaintiffs advanced moneys to James R. Millner, the latter systematically set apart and appropriated to himself certain sums from such advances,' without the knowledge of the plaintiffs, 'until, at the time of said settlement and release, he had thus accumulated the large amount of $12,000, which money he had thus, without warrant, deducted from the advances and failed to invest and use as agreed;' that at the time of such settlement and release, the plaintiffs were not advised that Millner 'had so much money,' certainly 'they never suspected that he had $12,000 of their money in his hands in ready cash, which had been advanced only to be used in the purchase and manufacture of tobacco for them;' that these facts were fraudulently concealed by Millner to enable him to secure his release; that Millner Bros. knew of his having the $12,000, or, at least, knew that he had a large sum rightfully belonging to the plaintiffs; that they also knew of the above settlement and release, and aided James R. Millner therein, taking the conveyance to themselves of the mortgaged property to further said fraud, knowing that the property was to be paid for with tobacco manufactured by using plaintiffs' money; that the money so withheld and concealed was used as common capital between James R. Millner and Millner Bros., the latter sharing in the general division of the profits arising therefrom; and that the tobacco delivered by them for the property was, in fact, purchased and prepared for sale with the money of the plaintiffs.

The bill also alleges that the plaintiffs, until very recently before the commencement of this suit, rested absolutely upon the finality and good faith of these transactions and settlements, and would have continued to do so, but for the revelation of the above facts made in June, 1885, by James R. Millner himself.

The relief sought is a decree declaring void the above releases and conveyances, and causing the property to be conveyed to the plaintiffs; that an accounting be had between them and the defendants; and that, after all recourse against James R. Millner is exhausted, Millner Bros. and the administrator of Joseph T. Millner be required to reimburse hem  to the extent of any deficiency that may be found to exist.

During the progress of the cause, an answer was filed by the committee of James R. Millner, who was adjudged a lunatic on the 24th of October, 1885, and committed to an insane asylum. He died pending this appeal, and his administrator was made a party instead of his committee. His heirs at law have also been made parties. Answers were filed by John P. Millner and the administrator of Joseph T. Millner, putting in issue the material allegations of the bill.

By the final decree the bill was dismissed, the circuit judge being of opinion that its allegations were not sustained by the proof.

S. T. Wallis and Jas. P. Harrison, for appellants.

S. F. Phillips and Frederic D. McKenney, for appellees.

Mr. Justice HARLAN, after stating the facts in the foregoing language, delivered the opinion of the court. 

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Uncategorized United States Supreme Court decision