Brown v. Fletcher (235 U.S. 589)

Conrad Braker, Jr., of New York, died testate July 21, 1890. The 15th item of his will provided that the sum of $50,000 should be held in trust and securely invested for the use of his son, Conrad Morris Braker, who was to receive the income until he attained the age of fifty-five, when the 'principal should be paid to him and belong to him absolutely.' If he failed to reach that age the property was to be held for the benefit of his wife for life with remainder to Henry Braker.

The 16th item directed that 'one half of all the rest, residue and remainder, both real and personal,' of his estate should be held in trust for the use and benefit of Conrad Morris Braker, who was to receive the interest derived from said trust, until he attained the age of fifty-five, when 'the whole amount, less $25,000, shall be paid and belong to him absolutely.' If he failed to reach that age, then the property was to pass to another son.

The amount realized from the residuum, described in the 16th item, aggregated $120,000, and with the $50,000 described in the 15th item of the will, was invested in property (not described) which is now held by Austin B. Fletcher, the duly appointed testamentary trustee.

On April 18, 1901, Conrad Morris Braker assigned to Frank L. Rabe 'seven tenths of all the estate, right, title and interest which he had in and to the principal sum of $50,000 described in the 15th item of the will.' Thereafter Rabe transferred and assigned this interest to the New York Finance Company.

On February 25, 1902, Conrad Morris Braker executed an instrument in which, subject to the assignment of $35,000 above referred to, he 'granted, bargained, sold, assigned, transferred and set over to the New York Finance Company all of his estate, right, title and interest of any kind, form or description whatsoever to the amount or extent of $35,000 in and to the legacy of $50,000, and also in and to a legacy of the part or share of the residuary estate to which he was entitled under and by virtue of the 15th and 16th paragraphs of the will of Conrad Braker, Jr., deceased.'

By virtue of these two transfers the New York Finance Company claimed to be the owner of such interest in the fund or estates created under the 15th and 16th items of the will.

The Finance Company thereafter made a note for $15,000, payable to William Brewster Wood, and secured the same by a transfer of its interests under the 16th item. It also made another note for $10,000 to Brown and Schermerhorn, trustees for Clara Schermerhorn, and secured the same by a transfer of its interest under the 15th item.

These notes were not paid when they fell due, and the New York Finance Company's equity of redemption was acquired by the respective holders of the two notes. In February, 1913, when Conrad Morris Braker attained the age of fifty-five, the respective holders of the notes and assignments demanded that the trustee should pay over to them that to which they were entitled by virtue of the instruments aforesaid. The trustee refused to comply, and thereupon the executors of Wood and the trustees of Clara Schermerhorn (all of whom were citizens and residents of Pennsylvania) brought suit in the United States district court for the southern district of New York against Fletcher, trustee, and Conrad Morris Braker, beneficiary, both being citizens and residents of New York.

The two bills were each prepared by the same counsel, and were identical, except that the trustees of Schermerhorn sued for what had been assigned them under the 15th item. The executors of Wood sued for the interest assigned them in the money or property mentioned in the 15th and 16th items of the will. In both suits it was alleged that the complainants had acquired title by virtue of the sale, transfer, and assignment executed by Conrad Morris Braker, and subsequent mesne conveyance. It was alleged that complainants had been informed that he claimed the transfers signed by him to be void because made to secure usurious debts. Both bills prayed that Braker should be enjoined from litigating the question of title in any other court; that the complainants' right under the assignments should be established by final decree, and that Fletcher, the testamentary trustee, should be ordered to pay over to the complainants what was due them by virtue of the respective assignments from Braker.

The court dismissed both bills, and in each ease gave a certificate that the order was based 'solely on the ground that no jurisdiction of the district court existed.'

From that order the complainants appealed to this court.

Messrs. Charles H. Burr, Frederick W. Frost, Perry D. Trafford, and H. Gordon McCouch for appellants.

Messrs. William P. S. Melvin and Safford A. Crummey for appellees.

Statement by Mr. Justice Lamar:  Mr. Justice Lamar, after making the foregoing statement, delivered the opinion of the court: