Loveland v. Fisk

Mr. Justice Goddard delivered the opinion of the court. The gravamen of the action is that the defendant Fisk violated his trust, and, with the intent to defraud the plaintiff in error out of his interest in the trust estate, conspired with Clark and Condict to cancel and forfeit the original agreement ; that the supplemental agreement and the subsequent transfer to the defendant company were made in consummation of such fraudulent purpose; that by virtue of the assignment and transfer by Condict the plaintiff in error became vested with an undivided one-tenth interest in the original contract that was non-forfeitable, and that the company took title to the real estate with notice, and subject to his equity. That Fisk’s dealings with the company in relation to the property being in violation of his trust, the benefits thereby acquired inured to the plaintiff in error in proportion to his interest. There is no evidence of any conspiracy between Clark, Condict and Fisk, or either of them; or of bad faith on the part of Fisk in procuring the supplemental agreement. On the other hand, it clearly appears from uncontradicted testimony that he, Fisk, acted in good faith, and, as he believed, [206] for the best interests of himself and associates,, in procuring the extension. By this agreement the option to purchase was extended to three months after they were in default in making the first payment. This being the only office it performed, by reason of the failure to make the payments as extended, whether its terms in other respects were more or less favorable to the beneficiaries is immaterial to this controversy. It appears from the evidence that Fisk, McIntosh, Condict, H. R. and E. O. Wolcott agreed among themselves to obtain an option to purchase the real estate in question from defendant Clark; that Fisk,.in his and their behalf, made the agreement dated March 16,1887, in his own name, and thereby became a trustee of their respective interests in that agreement. He assumed no active fiduciary duties, but simply became the repository of those interests and represented them only in so far as the improvement and management .of the property was under his supervision and control. He was under no obligation contractual or arising from the nature of his trust to pay any portion of the purchase price other than his own. His declaration indorsed on the assignment by Condict to the plaintiff in error was an acknowledgment only that he held in his name a ^ interest in the agreement for Condict, and a recognition of Condict’s right to assign the same, and did not affect or change the nature or extent of the trust. Plaintiff in error, by the transfer of one half of Condict’s interest, acquired no other or greater rights than Condict himself was entitled to under the original agreement. What those rights were is not difficult of ascertainment. The agreement, by its terms, and the testimony of witnesses who were interested in the transaction, show beyond question that the money paid and the improvements made were the consideration for an option to purchase only, and were not a part of the purchase price, and that the parties purchased that option and its extension with a full understanding that time was of the essence of the contract to purchase, and that the payment of the first installment of the purchase price, if [207] they elected to purchase, must be made within the life and and limit of the option. Moreover, by the form of the contract itself, time of payment was made essential. “ Where the contract is really an offer on one side, with a provision that this offer must be assented to and accepted, when a mere acceptance is contemplated, or payment must be made, when payment was the act of acceptance contemplated, at or before a specified date, then, of course, the act of assent or of payment must be done within the prescribed time, and time is from the very form of the contract essential. If, therefore, a vendor agrees to convey, if payment be made at or before a given date, or if an option is given which is to be accepted by payment within a given time, then the time of the payment is certainly essential; in fact, payment is a con-' dition precedent to the vesting of any right in the vendee.” Pomeroy on Contracts, sec. 387. It is unnecessary to notice other conditions that concur in making time the essence of this contract. After the expiration of the time fixed for the payment of the first installment, the option, theretofore irrevocable by reason of the consideration paid therefor, ended by express limitation, and the offer to sell upon the terms specified thenceforth was unilateral, without consideration, and revocable by Clark at any time before payment, which was the act of acceptance contemplated. No payment of any part of the purchase price having been made, Fisk and his associates acquired no equity in the land. Clark was under no obligation, legal or equitable, to demand performance in order to avail himself of the right to revoke the offer; nor did Condict’s personal agreement that plaintiff in error should have notice if he, Condict, failed to make any of the specified payments, impose the duty of giving such notice upon Clark or Fisk. Their duties and obligations were fixed by the original agreement and could not be changed by any private arrangement between Condict and plaintiff in error to which they were not parties, and in no way interested in the consideration paid therefor. Clark’s right to revoke the offer, [208] as against Fisk and associates under the facts shown, is clear, and the plaintiff in error, by virtue of his right derived through Condict, held no other or greater right than they. While it is true that a trustee cannot, during the continuance of his trust, deal with the trust property for his own benefit, it is equally true that when the trust ceases he occupies the same relation to the trust property as a stranger, and may in good faith acquire an interest therein bjT purchase or otherwise. As we have seen, the trust held by Fisk was limited to the time of the option, and when the option ended his trust ceased. It ended September 16, 1887. For sixty days thereafter the property was in the hands of agents for sale, and not until some time in the latter part of November did he acquire any interest in the same; at which time he was as free to deal with Clark in relation to the land as any stranger. The interest by him then acquired was in no way in consideration of past investments, but upon a new and valuable consideration to be by him thereafter paid. The assumption that the quitclaim deed given by him at that time was a part of the consideration for such interest is not sustained by the evidence. He had no interest to convey thereby, and the deed, as its terms express, was for the purpose solely of clearing from the title to the land the cloud cast thereon by the record of the assignment by Condict to plaintiff in error, and for no other purpose. On a careful review of the record, we are convinced that the contention of plaintiff in error is without merit. The judgment of the district court is accordingly affirmed. Affirmed.