A farmer made an arrangement with his son under which it was
agreed that the latter should undertake the management of the farm,
farm implements, and livestock, make all repairs, pay all taxes and
other expenses, sell the products of the farm, replace all
implements as they wore out, keep up all livestock, and have as his
own the net profits. It was further agreed that each party should
be at liberty to terminate the arrangement at any time, and that
the son should return to his father the farm with its implements,
stock and other personalty, of the same kind and amount as was on
the farm when the father retired, and as in good condition as when
he took it.
Held that no sale of the farm property was
intended, that the title to the same remained in the father, and
that the property was not subject to execution by creditors of the
son.
This was an intervening petition by the defendant in error,
Page 177 U. S. 277
Lewis Hatch, filed in the District Court for the Northern
District of Illinois, in the case of Joseph G. Heim, Receiver v.
Frank W. Hatch, praying for the release by the marshal and a return
to petitioner of a large amount of cattle and other farm property
alleged to belong to him, and levied upon by the marshal as the
property of Frank W. Hatch.
The cause originated in an action begun in the District Court
for the Northern District of Illinois, by Joseph G. Heim, as
receiver of the First National Bank of Southbend, Washington,
against Frank W. Hatch, to enforce against the defendant an
individual liability as a stockholder of the bank, which had become
insolvent. Defendant having made default, a judgment was rendered
against him in the sum of $4,351.09 and costs, for which an
execution was issued and levied upon the cattle and other farm
property in dispute. Whereupon Lewis Hatch, the father of Frank W.
Hatch, filed this petition, to which the plaintiff in error, John
W. Arnold, Marshal for the Northern District of Illinois, made
answer, denying the petitioner's ownership of the property, and
admitting his levy upon it as the property of Frank W. Hatch.
The case came on for trial before a jury, and resulted in a
verdict for the petitioner, upon which judgment was entered. On
writ of error from the circuit court of appeals, this judgment was
affirmed. 89 F. 1013. Whereupon plaintiff in error, Arnold, sued
out a writ of error from this Court.
MR. JUSTICE BROWN delivered the opinion of the Court.
This case presents the frequent question of the title and
ownership of personal property levied upon as the property of an
execution debtor, and claimed by another party. The undisputed
facts are that, in 1883, the petitioner, Lewis Hatch, who then and
for about twenty-five years prior thereto, had resided
Page 177 U. S. 278
upon and worked a large farm in McHenry County, Illinois, made a
contract with his son, Frank W. Hatch, a young man just out of
school, under which it was agreed that the latter should undertake
the management of the farm, farm implements, and livestock, make
all repairs, pay all taxes and other expenses, replace all
implements as they were worn out, keep up all livestock, and have
as his own the net profits. It was further stipulated that each
party should be at liberty to terminate the arrangement at any
time, and that the son should turn back to his father the farm with
its implements, stock, and other personalty, of the same kind and
amount as was on the farm when the father retired, and in as good
condition as when he took them.
As all questions connected with the veracity of witnesses, the
bona fides of this arrangement, and its exact terms are
forestalled by the verdict of the jury, we are bound to consider
the case as if the arrangement had been reduced to writing and such
writing were the only evidence bearing upon the subject. As the
only testimony in the case was that of the father and the son, and
as their statements were entirely harmonious, we are simply to
inquire as to the correctness of the charge of the court to the
jury, that, if they believed the arrangement was substantially such
as was stated by the petitioner and his son, it did not have the
effect in law to vest the title to any of the property or proceeds
of the farm in Frank W. Hatch, although he may have had power to
sell the same to others without any further authority from his
father. There was evidence showing not only that the son assumed
the entire management of the farm, but that he was at full liberty
to sell and dispose of its products, to replace old stock and
implements with new, and to appropriate the net proceeds to
himself, and that his only obligation was to return the property on
demand, or substituted property of the same kind and amount,
whenever either party should see fit to terminate the
arrangement.
We do not know that it is necessary to fix an exact definition
to the relations between these parties or to determine whether the
law of master and servant, landlord and tenant, or bailor and
bailee governed the transaction. The main object is to
Page 177 U. S. 279
ascertain the intent of the parties with respect to the
ownership of the property. There is no doubt that the title to the
farm remained in the father, who continued to occupy the homestead
and provided accommodations for certain of the farm hands; that the
arrangement was made with his son soon after he left school, and
apparently for the purpose of starting him in business. He was then
unmarried, and lived in the same house with his father, who
furnished the board of the hired men until after the son was
married, when, after living some time with his wife in the
homestead, he built at his own expense a small house for his own
use about twenty or thirty rods distant from that of his father,
although some of the hired men still lodged with the latter. In
1887, the son, Frank W. Hatch, gave up the arrangement, moved with
his family to Texas, and settled there with the intention of making
it his home. Upon going there, he left all the stock upon the farm
just as he had received it from his father. He subsequently became
dissatisfied and returned to his father's farm under the same
arrangement. He continued under this arrangement until 1892, when
he went to the State of Washington for the purpose of locating
there; invested in real estate and apparently in bank stock, in
which he appears to have been unfortunate. Again returning to
Illinois, he resumed the management of the farm.
It further appeared from the tax schedules of personal property
in that school district that the property in question was assessed
in the name of Frank W. Hatch. While this testimony was doubtless
entitled to consideration, the jury evidently did not give it great
weight, as it was part of the agreement between the father and son
that the latter should pay the taxes.
There was also evidence that, in the spring of 1897, the son
sold to his father for $1,000 a quantity of wool produced on the
farm, but as it was also a part of the agreement that the son
should have the product of the farm there was nothing inconsistent
with it in this sale of the wool.
It is very evident from this testimony that no sale of the farm
property was intended. There was no purchase price agreed upon, no
time fixed for the payment, and the reservation that the
arrangement might be terminated the day after it was made,
Page 177 U. S. 280
as well as that it might indefinitely continue, is wholly
inconsistent with the theory of a sale. Indeed, the only indicium
of a sale is the provision that the identical property received
need not be returned, but that other property of a similar kind
might be substituted. Plaintiff in error relies in this connection
upon a line of cases which hold that where a man turns over
personal property to another under an arrangement by which the
latter is not obliged to restore the specific articles of property,
but is at liberty to deliver other property of the same kind and
value, the receiver becomes the owner of the property; as where
wheat is delivered to an elevator with the understanding that the
obligation to return it shall be discharged by the delivery of
other like wheat, Story ion Bailments ยง 439;
Lonergan v.
Stewart, 55 Ill. 49;
Bretz v. Diehl, 117 Pa. 589;
Smith v. Clark, 21 Wend. 83;
Johnston v. Brown,
37 Ia. 200, although even then a usage to return substituted
property may turn the transaction into a bailment.
Erwin v.
Clark, 13 Mich. 10. But these authorities have no application
to the case under consideration. Here there was no provision for a
substituted property beyond that required by the nature of the
property delivered. The arrangement was to be indefinite in its
continuance. The property was mostly animals, which would
necessarily die, be sold, or slaughtered in a few years, and a
gradual substitution of their progeny or other similar cattle and a
renewal of worn-out implements was all that was contemplated. The
stipulation that this might be done was a mere incident of the main
agreement by which the property was to be returned in like good
order and condition as received.
The son was undoubtedly entrusted with extensive powers, but no
greater than the management of a large farm would necessarily
require. The father had become an old man, and naturally wished to
rid himself of the responsibility even of supervision, and to put
his son upon the footing of an independent farmer. It is possible
that he contemplated leaving the property to his son upon his
death, but it was clearly his intention to reserve the power of
revoking the arrangement in case it did not prove satisfactory to
him. As the father remained in possession of the farm, there was
nothing in the mere fact that he
Page 177 U. S. 281
entrusted his son with the management that was necessarily
calculated to mislead creditors into the belief that the latter was
the owner of the property. Apparently the receiver was unable to
produce evidence manifestly inconsistent with the agreement as
sworn to by both father and son, and their testimony authorized the
jury to find the ownership of the property to be in the former.
Similar agreements have been sustained as against creditors in a
number of cases.
Chatard v. O'Donovan, 80 Ind. 20;
Wilber v. Sisson, 53 Barb. 259;
Bowman v.
Bradley, 151 Pa. 351;
Kerrains v. People, 60 N.Y.
221;
Haywood v. Miller, 3 Hill, 90;
Brown v.
Scott, 7 Vt. 60;
Peters v. Smith, 42 Ill. 422;
State v. Curtis, 20 Dev. & Battle Law (N.C.) 226.
There was no error in the judgment of the court of appeals, and
it is therefore
Affirmed.