Robbins v. Butler

Breese, J. We have devoted all the time at our command to the examination of this record, the errors assigned upon it, and to the arguments submitted by counsel, and have arrived at the conclusions we now proceed to state. As to the first error assigned, objections to the competency of a witness are not now regarded by courts with as much favor as in former times, their credibility, under all the circumstances, being left to the jury trying the case. In chancery proceedings, where the court alone hears the testimony, the same rule ought to obtain. It is a settled principle, that an interested witness can restore his competency by showing that although at one time he was interested, he had, in good faith, divested himself of that interest, and that, too, in order to make himself a witness. This is every day’s practice. The good faith with which the act is done, is for the court to scrutinize, under the circumstances. As to Ogden, it will be noticed, that his deposition was excluded by the court, and no point can be made on that now, as the appellees have not leave to assign cross-errors. As to Sheldon, his transfer of his share in the commissions to which his firm would be entitled, if made in good faith, of which the court was to judge, restored his competency in that regard, but in another respect, it was not restored, against whichf his transfer could have no effect or operation. In case the complainants fail in the suit, this witness, as a member of the firm of Ogden, Jones & Co., is responsible to the complainants, for the interest on the money they have paid into the hands of this company on appellant’s third, and which alone the complainants could release, but which they have not released. He then had an existing and a direct interest in the event of this suit, notwithstanding his transfer of his commissions, in the shape of this interest, on the money received, for which he would be liable to the complainants. If the complainants prevail in the suit, appellant, by the contract, can claim no interest of the company; the witness’ interest, therefore, is that the complainants shall prevail. Now, as to the competency of Bradley and Steele. They were both shareholders in the stock of the Chicago Land Company, and, as such, partners. There is no evidence that the1 transfers that they state they made, have ever been registered on the books of the company, as the articles of association require, or that the liability of their transferees has been fixed, by affixing their names and seals to the articles. Until that be done, if that would do, these witnesses could not be released from their liability as members of the association. They, themselves, have provided the mode by which their liabilities can be made to devolve upon others, and to that mode they must be held. But these shareholders have none of the rights or immunities of such, as in a regularly incorporated company. These stock companies are nothing more than partnerships, and every member of the company is liable for the debts of the concern, no matter what the private arrangements among themselves may be, if they have not shifted their liability in the very mode pointed out in the articles of association. They are, therefore, parties to the suit, as complainants. But there is another objection to Bradley. It is shown he was at the time of testifying, a stockholder in the St. Paul and Pond du Lac Railroad Company, which company had obtained from this land association, the right of way for their road over part of this land, one-third of which right they would lose if the appellant prevails. It is no answer to this view to say, that this was a parol agreement, and void by the statute of frauds and perjuries. It is still binding, notwithstanding the statute, unless the statute be pleaded, and we cannot say that it will be pleaded. Bradley was not a competent witness, for the reasons we have given. The next ■ error assigned is, to the rejection of the bill in chancery, filed by Robert J. Walker, and sworn to, against W. B. and M. D. Ogden, in the Circuit Court of the United States for the northern district of this State, and their answer to the bill. As the object of offering these files was to get at admissions of a part of those defendants, the Ogdens, to be used in this suit, in which they had a direct interest, we think they should have been received in evidence. The object of the appellant was to show, that in May, 1852, William B. Ogden, who sold the land of appellant in November of that year, was actually a member of the land company buying it. The admissions of a party to a fact, no matter when made or how made, are evidence against him—no matter if they be found in an answer in chancery, in a letter, or. proved in some other mode. They are still his admissions, and can be used against him. • These files should have been admitted for such purpose. Having disposed of these preliminary objections, we come now to the important point in the case on its merits, and that is, did the evidence, as exhibited in the record, warrant the court in decreeing a specific performance against the*appellant ? Is the contract made with Bradley and Smith, bearing date 10th of November, 1852, binding on the appellant ? if it is, the decree on the merits is right, if these preliminaries could be waived. ■ The parties to the agreement to sell, are William B. Ogden of the first part, and John Bradley and A. Hyatt Smith of the second part, but who really were contracting for the Chicago Land Company, of which W. B. Ogden was a member. The contract recites the agreement of May 81,1847, under which Ogden’s claim to act for Robbins, arises. It will be observed, that this trust, by this agreement, was not committed to William B. Ogden and William E. Jones, but to the, firm of Ogden and Jones, “ their survivor and successors in business.” The inducement was, undoubtedly, the great reputation this firm possessed as land agents, well acquaintéd with the value of land in the locality where they operated. As accomplished agents, they were entrusted with the powers by the appellant and Mrs. Wight, acting through her trustee, Mr. Marshall, with a special supervisory power over these lands, subject, however, to the general directions of the appellant and W. B. Ogden, who were joint owners with Mrs. Wight of the property. Sales were to be made from time to time, of portions of the property, to raise money to make improvements calculated to enhance the value of the property. No interest in the land vested in Ogden and Jones, by this agreement, nor in their survivor or successors. A simple power to make sales and improvements for the purposes indicated, was alone granted, and under the conditions named. As donees of this power, they took no title and could convey none. In executing the power, the stipulations and directions of the agreement should have been faithfully observed. As to the execution of the agreement in the name of W. B. Ogden, as attorney for Bobbins, without the name of Bobbins to the deed, it is a clear proposition that at law it is no binding covenant on Bobbins, but we are not prepared to say that a court of equity should not recognize it as valid, in the absence of fraud, mistake, or other circumstance casting suspicion upon it. On another point made by the appellant, we are with him, and that is, the appointees of the power to make a sale of the whole property under the agreement of 31st May, 1847, were not Ogden and Jones only, but they and the survivor of them, connected with their successors in business, for which the agreement amply provided. This power is as follows, in these words: “The said Ogden and Jones, their survivor and successors in business, shall proceed to make sales of said premises, or lease or otherwise dispose of, in part or in whole, when, where and as they shall in their discretion think and deem to be most advantageous and conducive to the best interests of said property, and most beneficial to the results to be realized from the same; such sales, leases, or other disposition of said property to be made at such time or times hereafter, and in such manner, and on such terms, for cash and credit, or in exchange for other property, thing or things, or partly on credit, or partly for payment in hand, or for other property or thing in exchange, as we or our survivor, executors and administrators, or the said Ogden and Jones, their survivor and successors in business, in Chicago, shall, in our or their discretion, think to be most advantageous to said property, and best calculated to enhance the amount to be derived therefrom.” For other purposes, not extending to a sale of a part or the whole property, the disjunctive “ or ” is used, but when a sale is named of the property, in whole or in part, the conjunctive “ and ” is used, coupling the successors of Ogden and Jones with them or their survivor. When this agreement was made, William B. Ogden and William E. Jones composed the firm of Ogden and Jones, and it so continued until the first of July, 1850, at which time they associated with them Mahlon D. Ogden and Edwin H. Sheldon, and changed the style of the firm to Ogden, Jones & Co. These parties were then the successors in business of the old firm of Ogden and Jones, and this agency, by the true meaning of the terms of the agreement, devolved upon the new firm. The old firm no longer existed, but became merged in the new. The agreement or indenture shows clearly, that it was never in the contemplation of the parties to it, that the business of the agency should be committed to two distinct and independent firms or parties at the same time. It makes no provision- for the concurrent exercise of the power by different parties, but confides it to a single party or firm. There can be no doubt about this, nor can there be any doubt, from the language employed, that the parties contemplated that the agency should pass to the new firm, in case one was established. And we see the fact to be, that on the establishment of the new firm of Ogden, Jones & Co., the agency was actually carried on by this new firm, and they, therefore, were the only proper parties competent, to transact its business. This agency was one and indivisible, Ogden having no power, of himself, and by himself, to make sales of the property, committing other parts of the agency to his associates. There is no such idea in the deed. It follows, then, that under this deed, the power to make sales was, in November, 1852, vested in the Ogdens and Sheldon jointly, they having equal power, interest and authority with respect to this property, and unauthorized to act separately. In-answer to this view, it is contended by the appellees, that, though the power of sale-;was reposed in Ogden, Jones & Co., it was not necessary that they should all actually join in the sale, their concurrence, verbal or otherwise, being sufficient. We will not say this might not be,-but the testimony on this point, being out of the record, can have no bearing on the case, and but very little, if it was in the record. It has relation to a period months anterior to the actual sale of the property, and when, in that locality, property was not on the rise, or if so, but moderately. And there is strong evidence, in the acts of W. B. Ogden himself, showing that their negotiations for a sale had terminated unsuccessfully, or had been abandoned. One strong fact is, that on the 22nd of July, 1852, W. B. Ogden executed, in the name of himself and appellant, for the consideration of fifteen hundred and twenty-five dollars, a contract for the sale of one acre of this very property. The facts about the sale are fully stated ■ by Mr. Frisbie, who made the contract on the part of Joy, and he states that the negotiations for this acre commenced about the first of July, and that not a word was said by Mr. Ogden about any previous sale, or contract of sale, or negotiation for a sale of the whole or any part of this property to other parties; and Joy testifies that Mr. Ogden said nothing to him about any sale to Bradley and Smith, and that he had no knowledge or intimation of any such sale. The explanation of this given by Mr. Ogden is not satisfactory, if his deposition, which was ruled out, could be regarded. He states, as his recollection, that this contract with Joy was made pending the negotiations with Bradley and Smith, and that they were to consummate it with Joy. This hardly tallies with his previous statement, that the negotiation with these parties, Bradley and Smith, was concluded about the fifteenth of June, and that he gave them a few days to raise the money for the first payment. Now, as the negotiation for the sale to Joy did not commence until about the first of July following, which interval Ogden had given to Bradley and Smith to raise the money for the first payment, as Ogden says, is it not more than surprising, that Ogden should not have mentioned that he had actually concluded a contract for the whole property weeks previously, and sent Joy to his vendees to purchase? And could the contract with Bradley and Smith have been pending ? Which statement is the true one ? A negotiation cannot be pending and concluded at the same time. As the statements stand in the deposition they are irreconcilable, and being so, furnish strong persuasive evidence that the contract contemplated with Bradley and Smith had been abandoned before the sale to Joy. There is another fact tending strongly to show that no contract of sale was concluded in June with Bradley and Smith, and that is, in the semi-annual statement of sales and expenditures rendered by this agency to appellant on the first day of August, 1852, there is no hint', memorandum, note or mention of any such sale. In a sale of such magnitude, the constituent should have the earliest intelligence, that he may make inquiries about it, and how strange it is, when it is shown that the appellant was in close proximity to his agents, to be seen and counselled with at any hour of the day, that not one word should have been spoken to him about such a contract, and his opinion solicited. Mr. Ogden says, he did advise Mr. Bradley to see Mr. Bobbins, on the ground of courtesy merely, not doubting, however, his power to sell independently of him. An agent, devoted to the interests of his client, has more to do with justice than the empty and idle ceremonies, courtesy may impose, or good manners inspire. Even if he had the power to sell, independently of the appellant, and without consulting hint, did not duty, not courtesy, to his client, require him to see him, and have a full, free and friendly consultation with him as to price, terms, the state of the money market, the expected increase in value, for land was then going up—in short, upon every topic connected with the property and its sale ? The proper construction of the deed of 31st May, and its purposes, contemplated as much. The agency of this house was adopted as a mode of selling—as a convenient mode—not as giving the agency any title to dispose of its property at their whim and caprice, but upon consultation with the proprietors, if they were within convenient reach. lío title was conveyed, but the joint judgment of all the parties, as to its management and sale, was designed to be secured. But above all, how remarkable it is that appellant’s letter or the 27th August, 1852, should have had no effect upon the active agent in effecting this sale. The letter was written, evidently, under considerable excitement, and even if the pretensions set up in it were unfounded, it should have checked the consummation of any sale, or contract, not legally binding on the parties, until a consultation, at least, could have been had. At any rate, it deserved a reply, conveying the information that a contract had already been concluded with Bradley and Smith as now here set up, for the sale of the whole property, so that the appellant, while it was executory merely, might have availed himself of all his legal rights, and prevented its consummation. In that letter, the agent is distinctly advised, that his constituent had lost all confidence in his integrity, and is expressly forbidden to make any sales exceeding in amount the advances, or any sale as to which he is not consulted, and to which he does not give his assent; and he complains that no report had been made to him of the sale to Joy. We cannot but think, even if the pretensions of the writer were unfounded, this letter should have checked the further progress of any sale, the preliminaries of which, had been canvassed months before, when the fact was patent, that during this interval, this property had risen greatly in value, not only partaking of the general stimulus to property in the city of Chicago, but of one local to itself—the construction of the Fond du Lac Railroad, whose depot was established in close proximity to it. By the testimony of Mr. Burch, these causes operated to double the value of the property over the sum it was worth in June, when Bradley and Smith had talked of buying it, and when appellant had put the price at the sum for which it was then proposed to be sold to them. It does seem that all these circumstances should have admonished the active agent, that in disposing of this property, he was, perhaps, doing great injustice to the appellant, and to Mrs. Wight, and that a free consultation with appellant about it, was alike demanded by justice, as well as courtesy. Whilst this property was growing in value, which a speculator such as Mr. Bradley could not fail to perceive, and desire to profit by, he visits the city of New York, and there consummates a sale on the 10th of November, with Mr. Ogden, of the whole of this property, at the June price of one hundred thousand dollars, though then worth, if we can believe the witness, more than twice that sum. In fact, when the negotiations in June and July were going on, it appears that one acre of it was sold to Joy, for more than fifteen hundred dollars, which, at this •rate, would make the whole property worth at that time, in acres, more than three hundred thousand dollars. To this sale, the assent of his copartners was not had—they were not consulted about it, but by the contract itself, Ogden acted as the surviving partner of Jones alone, and what is remarkable, the contract does not allude or refer to any previous verbal sale or contract. From the fact that W. B. Ogden was a member of the Chicago Land Company, in its inception under another name, as early as May, 1852 ; that about that time the associates forming this company, commenced the purchase of lands with a view to their rise in value ; that Bradley and Smith were members of this company, and their purchases were to go to the benefit of this company, and so known to their associate, Ogden ; that he, in selling to them, was, really, selling to himself, or to an association of which he was a member; the sale was void, on the well-known principle that a trustee cannot be the purchaser, directly or indirectly, of the property or estate entrusted to him to sell. We can come to no other conclusion, on all the facts of this case, than that this sale was not made by appellant or by any agent as contemplated in the indenture of May 31, 1847—that it was made in defiance of appellant’s remonstrances. Ogden was himself a purchaser as well as vendor. He was a member of the land company to whom he sold the land, and all his associates are chargeable with the same considerations which would bear upon him were he solely interested as purchaser. There is nothing in the character of the case that we can discover, recommending it to the favorable consideration of a court of equity, and nothing to justify such a court in decreeing a specific performance of the contract set up, on which the bill is founded. We see nothing in the case, giving a claim to be heard in equity, and we must reverse the decree below, and dismiss the bill. Decree reversed.