THIS was an appeal from the Circuit Court of the United States for the Eastern District of Pennsylvania, sitting as a court of equity.
It was a bill filed in 1839, by Samuel and Eleazer L. Cohen, citizens of the State of New Jersey, against Simon Gratz, Leah Phillips, and twelve other persons. It was a bill for a discovery against Leah Phillips, surviving executrix of Joseph Simon deceased, and Simon Gratz, and praying also that a certain agreement and deeds executed by and between said Leah and Simon might be annulled, and declared fraudulent and void, and that Simon Gratz be decreed to account, &c.
The bill involved the consideration of matters and accounts, commencing in 1769, and continuing down to the time when it was filed. It was a family dispute which had been carried on in the courts of Pennsylvania for a number of years, and reported as follows:–Gratz v. Phillips, 1 Binney, 588 (1809); Gratz v. Simon, 3 Binney, 474 (1811); Gratz v. Simon, 5 Binney, 564 (1813); Gratz v. Phillips, 14 Serg. & Rawle, 144 (1827); Gratz v. Phillips et al., 1 Pa. Rep. 333 (1831); Gratz v. Phillips, 2 Pa. Rep. 410 (1831); Simon's Executors v. Gratz, 2 Pa. Rep. 412 (1831); Cohen's Appeal, 2 Watts, 175 (1834).
This narrative need not go further back than 1804, when Joseph Simon, a merchant or trader, and resident of Lancaster, died. Besides other children, whose interests were not involved in this controversy, he had three daughters, Miriam, Beliah, and Leah. They were all married. Miriam was married to Michael Gratz, Beliah to Solomon M. Cohen, and Leah to Levi Phillips. Simon Gratz, whose executors were the appellants, was one of the children of Miriam and Michael Gratz. The complainants below and appellees here, were the children of Beliah Cohen. At the time of Mr. Simon's death, there were unsettled partnership transactions between him and his son-in-law Michael Gratz, and a large body of lands was held by them in common. Suits were then pending between them relative to these transactions.
By the will of Joseph Simon, 26th October, 1799, he disposed of the bulk of his estate as follows.
Art. 14. He ordered and directed that the whole residue of his estate (to be invested in certain stocks) should be divided into three equal shares, and one part of the proceeds thereof, that is the interest, should be paid to his daughter Miriam during her life; one third part of the proceeds or interest thereof to his son-in-law Levi Phillips and Leah his wife, during their joint lives and the life of the survivor of them; and the remaining third part to his daughter Beliah during her life.
On the death of either daughter, her share of the principal to vest in her issue, to take as purchasers and tenants in common. On the death of either Miriam or Leah without issue, the share to be divided among the children of Beliah Cohen.
By Art. 16, Mr. Simon made the devise to Mrs. Gratz (Miriam) dependent on a release of certain lawsuits then pending, and in the event of no such release he gave her share to Mrs. Cohen and Mrs. Phillips.
Of this will, he made his son-in-law Levi Phillips, and his daughters Mrs. Phillips and Mrs. Cohen, executors, with full power to sell real as well as personal estate.
By a codicil in December, 1802, he expressly revoked the devise to Mrs. Gratz, and directed the devise to Mrs. Phillips to be absolutely one half of the principal of the residue; the legacy to Mrs. Cohen to be as before,–the interest on her share.
By a second codicil, 9th February, 1803, he provided as follows:––
'Whereas, my son-in-law Levi Phillips has continually informed me that, when I had made the last codicil in my last will and testament, I ought also at the same time to have made the alteration by giving my daughter Beliah her share in the principal, instead of the interest of the principal of my residue, which would make her more comfortable; therefore I do, by this instrument of writing, authorize and give full power to my son-in-law, Levi Phillips, as being one of my executors and guardians of my last will and testament, to do as he thinks requisite,–that is to say, by giving my said daughter Beliah her share of my residue in the principal as the money comes to hand.
'In witness whereof, I, Joseph Simon, have this day set my hand and seal.
'Lancaster, February 9, 1803.'
Levi Phillips, Leah Phillips, and Beliah Cohen all acted as executors.
In 1807, Michael Gratz brought a suit against the executors, and from that time the parties were continually in some court.
After the death of Simon, his executors proceeded to sell and dispose of his lands, from time to time, under the powers vested in them. In a large number of these tracts of land, Michael Gratz was interested, by virtue of a declaration of trust given by Simon in his lifetime, and of claims of David Franks (a former partner of Simon), which had been transferred to Michael Gratz; Simon Gratz was the agent of Michael Gratz in his lifetime, and his chief acting administrator after his death.
In September, 1811, Michael Gratz died, and although letters of administration were granted to Simon in conjunction with other persons, yet he was the chief acting administrator, and appeared to transact all the business.
It is not necessary to trace the progress of the various suits mentioned in the commencement of this narrative. In 1832, Levi Phillips died, and on the 29th of January, 1833, Beliah Cohen died, leaving Leah Phillips the sole surviving executrix of her father, Joseph Simon.
On the 15th of February, 1833, the agreement was entered into between Leah Phillips and Simon Gratz, which it was the object of this bill to set aside as fraudulent.
The circumstances attending the making of this agreement are thus stated in the bill:––
'Your orators further show unto your honors, that Solomon M. Cohen, their father, died in the month of February, 1796, and that Beliah Cohen, their mother, died on the 29th day of January, 1833, and that they, and their brothers and sisters heretofore named, are the persons mentioned as the children of his daughter Beliah in the last will and testament of Joseph Simon; that the papers of the estate of the said Joseph Simon were in the possession of Levi Phillips at the time of his death; that the said Levi Phillips died on the 15th day of January, 1832, and that after his death the papers of the said estate were in the possession of the said Leah Phillips, one of the executors of the said Joseph Simon; that during the year 1832, secret interviews took place between Simon Gratz and Leah Phillips, executrix, citizens of the Commonwealth of Pennsylvania, with the view of depriving your orators, and the other children of the said Beliah Cohen, of their just rights under the will of the said Joseph Simon, which said interviews were concealed from the said Beliah Cohen and her family; and your orators believe, and expressly charge, that John Moss, Isaac Phillips, Lyon J. Levy, and Isaac B. Phillips, citizens of the Commonwealth of Pennsylvania, were, during that year and afterwards, aiding and assisting the said Simon Gratz and Leah Phillips in their design to appropriate the estate of the said Joseph Simon to the said Simon Gratz and Leah Phillips, and deprive your orators, and their brothers and sisters, of the said estate and of their just rights. That shortly after the decease of their mother a fraudulent agreement was made and entered into between Simon Gratz and Leah Phillips, dated February 15th, 1833, a copy whereof, marked H, is hereto annexed, and which your orators pray may be taken as part of their bill; the object of which said agreement was fraudulently to terminate the suits then pending between the surviving executrix of the said Joseph Simon and the administrators of Michael Gratz, by agreeing, consenting to, and causing judgments to be taken against the estate of the said Joseph Simon, to the manifest injury of your orators, and their brothers and sisters hereinbefore named, interested as aforesaid in the said estate; and the further object, purpose, and intention of the said agreement was fraudulently to convey, or cause to be conveyed, to the said Simon Gratz all the real estate of the said Joseph Simon, which said real estate is more particularly set forth in a schedule hereto annexed, marked L, for a consideration entirely inadequate, and known so to be by the said Simon Gratz and Leah Phillips, and to transfer, without an adequate consideration, to the said Simon Gratz the debts due to the estate of the said Joseph Simon; and that the said Leah Phillips and Simon Gratz, then well knowing the unjust and fraudulent character of said agreement and the inadequacy of the consideration, did combine and confederate with others, their confederates, to defraud your orators, and their brothers and sisters, of their just interest in the estate of the said Joseph Simon. And your orators further show to your honors, that the said agreement was concealed from your orators and the other children of the said Beliah Cohen, and was first discovered by them on the 13th day of June, 1833, it having been produced on that day by Lyon J. Levy, one of the confederates, in an examination of the said Lyon J. Levy, as a witness before Michael W. Ash, Esquire, an alderman of the city of Philadelphia, the said Lyon J. Levy having been subpoenaed for the purpose of having his deposition taken in a case then pending in the Orphan's Court of Lancaster County; that the first knowledge your orators, and, as they verily believe, any of the children of the said Beliah Cohen, had of an arrangement having been made between Simon Gratz and Leah Phillips, was obtained by one of their brothers, Joseph S. Cohen, who, on the 23d day of March, 1833, was informed by Benjamin Champneys, Esquire, who had been and was counsel for the estate of Joseph Simon, that he, the said Benjamin Champneys, had received from Leah Phillips a power or warrant of attorney to enter judgment for the plaintiffs in a suit then pending, and on the argument list of the Court of Common Pleas of Lancaster County, between Gratz's Administrators, plaintiffs, and Simon's Executors, defendants, the copy of the record whereof is hereunto annexed. That the said Benjamin Champneys refused to show the said power or warrant to the said Joseph S. Cohen; that on the morning of the 25th of March, 1833, the day fixed for hearing arguments in the said Court of Common Pleas of Lancaster County, the said Joseph S. Cohen attended with his counsel, James Hopkins, Esquire, and Reah Frazer, Esquire, at the opening of the court, and filed the affidavit, a copy whereof, marked I, is hereto annexed; and on motion of Mr. Hopkins, the said court, after considerable resistance on the part of John R. Montgomery and William Morris, Esquires, counsel of Simon Gratz, granted a rule to show cause why Sarah M. Cohen and others, children of the said Beliah Cohen, and interested in the estate of the said Joseph Simon, should not be permitted to come in and take defence in the said action, as appears by the said rule, a copy whereof is hereto annexed, marked J, which raid rule was duly served on the said Leah Phillips, surviving executrix.
'Your orators further show to your honors, that in pursuance of the said fraudulent and secret agreement, dated the 15th day of February, 1833, entered into between the said Leah Phillips and Simon Gratz at the instance of the said John Moss, Lyon J. Levy, and others, their confederates, who, when discovered, your orators pray may be made parties to this their bill, with apt and sufficient words to charge them; the said Leah Phillips, surviving executrix as aforesaid, afterwards delivered to the said Lyon J. Levy the books and papers belonging to the estate of the said Joseph Simon,' &c.
The answer of Leah Phillips to this part of the bill was as follows:––
'And this defendant further answering saith, that in the year 1832, she being of a very advanced age, bing then in her sixty-ninth year, of infirm health, almost totally blind, and in very necessitous circumstances, was determined by the advice of her friends, Isaac B. Phillips, John Moss, and Lyon J. Levy, to make a settlement of long pending controversies between the estate of Joseph Simon, of which she was the surviving representative, and of Michael Gratz, which she believed to be represented by the said Simon Gratz, and also to make sale of such lands vested in her under the will of said Joseph Simon as the said Simon Gratz might be willing to purchase. The defendant says, that her object in proposing the arrangement was to terminate controversies which she was unwilling and unable to carry on, and to obtain such a sum of money as would relieve her from embarrassment, which gave her great uneasiness; the said defendant then and still believes, that in making this arrangement she prejudiced the rights of no one, but did what the law gave her perfect authority to do; and this defendant answering says, that in the month of October, 1832, she addressed several notes to said Simon Gratz, desiring to confer with him on the proposed arrangement and purchase, and that she had several interviews with him at her own house, and at his counting-house, and that she entered into an agreement with him, the said Simon Gratz, in order to terminate the pending suits above referred to, and made a conveyance of certain lands to the said Simon Gratz, receiving therefor the sum of fifteen hundred dollars, which was duly paid on and after the execution of the said conveyance and agreement.
'And this defendant further answering saith, that, with a view to carry such conveyance into full effect, she deposited with Lyon J. Levy a trunk of papers, being the same which Joseph S. Cohen had as aforesaid fully examined, and from which he had selected certain papers in order that the said Simon Gratz should examine the same, and take therefrom such papers as muniments of title as might be necessary to carry into full effect the said conveyance; that after the said trunk had remained some time in the said Levy's possession, it was returned, and is now in the defendant's possession.
'And this defendant further answering saith, that she admits it to be true that Levi Phillips, one of the executors of Joseph Simon, did die on or about the 15th of January, 1832, and that Beliah Cohen, an executrix of Joseph Simon, did depart this life on or about the 29th day of January, 1833.
'And the defendant further answering saith, that there were no other negotiations between this defendant and Simon Gratz, during the life of Beliah Cohen or afterwards, than those already stated; that they had for their object the final termination of controversies between the estate of Michael Gratz and that of Joseph Simon, which this defendant was neither able nor willing to continue, and the conveyance of certain lands for an adequate consideration to be paid by the said Simon Gratz to this defendant as above stated.
'That the negotiations between this defendant and the said Simon Gratz were verbal, and took place partially at his counting-house and partially at her house; that this defendant is unable, at this time, more precisely to state what conversation passed between her and the said Simon Gratz, nor has she copies of any papers which were executed; that there were executed an agreement for the termination of certain pending suits, and two deeds of certain lands in Columbia and Lancaster Counties; that no persons took part in such negotiations but herself and Simon Gratz, and that these negotiations were not concealed from Beliah Cohen or her children.
'And the defendant further answering saith, that Simon Gratz did call on this defendant at her house, in Arch Street, on two occasions, once at the time of the execution of the deeds, and once previously, though the precise period of the first call this defendant is unable to state; that this first call was not made in consequence of any previous notice; that Elkalah M. Cohen was at this defendant's house when Simon Gratz called; that Simon Gratz did not then disclose the object of his call; that he did not state he was not aware that this defendant resided there; that he had not before called there, and this defendant is not aware from whom he received information where she resided.
'And this defendant further answering saith, that there were other interviews between the defendant and Simon Gratz, but whether there were more than two, and whether they occurred before or after the death of Mrs. Beliah Cohen, this defendant is unable to state; this defendant had several interviews with Simon Gratz at his counting-house, and the object of this defendant in going to Mr. Gratz's counting-house was to relieve him of as much trouble as possible, in a matter in which this defendant then believed, and still believes, he was doing her a kindness.
'And this defendant further answering saith, that she has no recollection of ever stating to Elkalah M. Cohen, when Simon Gratz called on her, that she, the defendant, had no idea of seeing Simon Gratz, and was as much surprised at his calling on her as Miss Cohen could possibly be; nor has she any recollection of any private interview between herself and John Moss, at any time when Elkalah M. Cohen was at this defendant's; nor is she able to say how soon after the death of Beliah Cohen this defendant had an interview with Simon Gratz; nor more particularly to state what passed at that or any other interview than she has already stated.
'And this defendant further answering saith, that five hundred and fifty dollars, part of the consideration of the said agreement and conveyance, were paid to this defendant by L. J. Levy and the rest by Simon Gratz; and that the total amount of said consideration was agreed upon by and between this defendant and Simon Gratz; and that there was no other consideration of the same than the said sum of fifteen hundred dollars,' &c.
The agreement itself thus entered into was as follows:––
'Acts to be performed by Mrs. Leah Phillips, surviving executrix of Joseph Simon, deceased:––
'1. To execute deed for Michael Gratz's interest in unsold lands.
'2. To direct her attorney in suit, (in the Court of Common Pleas of Lancaster County, of January term, 1822,) No. 163,–Simon Gratz, Joseph Gratz, and Jacob Gratz, Administrators of Michael Gratz, deceased, v. Levi Phillips, Leah Phillips, and Beliah Cohen, Executors of Joseph Simon, deceased.–Amicable action, August term, 1822, award of referees in favor of plaintiffs for $2,967.34,–to bring up the case on agreement, then permit the exceptions to be overruled, and the award affirmed.
'3. To settle the sum due on the sale of house and lots in Carlisle, in judgment in Supreme Court, which shall be submitted ...