Barling v. Peters

Mr. Justice Craig delivered the opinion of the Court: ' It is insisted on behalf of appellants, that the contracts, properly construed, show that Robert W. Hyman at no time had an interest in the land; nor was he the beneficiary of any right, trust or power whereby he could “require” it to be sold by the owners; that he could neither assign nor pledge any interest in the land, nor could he vest another party with a right to require a sale,—his function was to sell the land himself, and thereby, earn the share in the profits. We have given the able argument of appellants’ counsel a careful consideration, but we have not been able to arrive at the conclusion that Hyman had no interest in the premises involved in this litigation. In order to arrive at a correct construction of the two contracts,—one executed by Edward Mott Robinson and Robert W. Hyman, and the other by the executors of the estate of Robinson, and Hyman,—and determine the rights of Hyman in the premises, under these contracts, it is proper to take into consideration the manner in which the lands were bought, the object in view in making the purchase, and also the manner in which the lands were held and treated after the purchase, by the respective parties. The first half-section was purchased by Hyman and deeded by the grantor directly to him. He gave his own notes and a deed of trust on the premises to secure two-thirds of the purchase money. If he had no interest in the lands, and was to have no legal or equitable interest therein, why were the lands deeded directly to him ? For what reason did he execute his own notes in payment of the purchase money ? If the understanding between the parties was that Bobinson was to be the absolute owner of the lands, and that Hyman was merely to act as agent, and earn a share in the profits by making sales, doubtless the lands -would have been conveyed directly to Bobinson, and the contract which they subsequently executed would have stated in plain terms that the lands were purchased by Bobinson as his own property, and that Hyman was to sell as an agent, for a commission. But we find no such language in the contract. On the other hand, the very first sentence of the contract declares that Hyman has purchased the lands for the joint account of himself and Edward Mott Bobinson. The first clause of the contract declares that Hyman shall sell said premises within one year, unless otherwise agreed by the parties to the contract, and shall make no charge for buying, selling, or attending to the payment of taxes. The third provision ofithe contract provides, that upon a sale of the premises Bobinson shall be reimbursed all moneys advanced, with interest, and the balance of the proceeds of sale shall be equally divided between the parties. What the legal status of Hyman and Bobinson may be called or denominated under the contract, is a question of no great moment. The real question is, what were the rights of the two parties, under the contract, in the lands ? Were they each interested in the premises as joint owners, or otherwise P If the lands were purchased on joint account, as declared in the contract, they were bought for the benefit of each, and each party had an interest therein. Upon a sale of the lands by Hyman, if the proceeds arising from the sale were to be equally divided between the parties after the advances of Bobinson had been repaid, as declared by the contract, then the interest of the parties in the lands, subject to the advances, were equal. The fact that the lands were conveyed to Bobinson, and the rights of Hyman vested in the two contracts, does not, in equity, make any difference. In a court of equity, the substance of the transaction, and not the form, is to be regarded in the determination of the rights of the parties. The legal title to the lands was placed in Bobinson, but he held it in trust for the purposes specified in the two contracts. Seymour v. Freer, 8 Wall. 211, is a case in its facts quite similar to the case under consideration. In the case cited, a contract was made between Price and Seymour which provided that Price should buy lands in certain States, to an amount not exceeding $5000; that the title to the lands should be taken in the name of Seymour, he furnishing the money to pay for the lands; that the lands should be sold within five years, and from the profits one-half should be paid to Price, and be in full for his services and expenses. The court held that the contracting parties held a joint interest in the property, and in passing upon the rights of the parties under the contract, among other things the court said: “It is proper here to consider the legal and equitable relations of the parties, arising out of the contract. We think Seymour took the legal title in trust for the purposes specified. A trust is where there are rights, titles and interests in property distinct from the legal ownership. In such case the legal title, in the eye of the law, carries with it, to the holder, absolute dominion; but behind it lie beneficial rights and interests in the same property belonging to another. These rights, to the extent to which they exist, are a charge upon the property, and constitute an equity, which a court* of equity will protect and enforce whenever its-aid for that purpose is properly invoked. Interest in real estate, purely contingent, may be made the subjects of contract and equitable cognizance, as between the proper parties. The object of the trust here was to sell the property within the time limited, and after deducting from the proceeds the outlay, with interest and taxes, to pay over to Price one-half of the residue. To this extent Seymour was a trustee, and Price the ■■cestui que trust. They had a joint interest in the property. Seymour held the legal title, but the rights of Price were as valid, in equity, as those of Seymour were at law.” If the parties in the case cited had a joint interest in the property purchased, as held by the Supreme Court of the United States, upon the same principle it may be held here that the two contracting parties had a joint interest in the property embraced in the two contracts involved in this case. The theory that- Hyman was to earn a share in the profits by making sales of the premises, is not found in the contract. Indeed, in the contract executed by the executors after the second half-section was purchased, the executors are authorized to sell any part or all of the entire section of land, at such time and for such price as they may think proper. Both of the contracting parties were thus authorized to sell if they saw proper; but it is apparent, from the evidence, and conduct of the parties, that neither desired to sell. Hyman advanced the price of the land from year to year, seemingly for the purpose of keeping it from being sold, and the executors saw that the land was good property to hold, and made no effort whatever to sell. Thus the conduct of both parties in the management of the land would seem to indicate that there was no .intent or understanding that Hyman should go on and sell out the lands, and thus earn a share in the profits, as contended by counsel for appellants. We think, therefore, it, is plain, from the provisions of the two contracts and from the facts surrounding the transaction, that Hyman had more than a mere interest in the profits—that he had an equitable interest in the lands which, in equity, was equal to the interest of Robinson, after Robinson had received his advances and the inierest thereon. Suppose Hyman had, before his death, paid the executors of the estate of Robinson all advances made on account of the lands, and the interest thereon. Could it then "be held, in a court of equity, that he had no interest in the premises ? If Hyman had pursued the course indicated, and repaid all advances and interest, we do not think a court of equity would hesitate, on a proper application, to decree that he had an interest in the premises, and award that interest to him. Stow v. Robinson, 24 Ill. 532, has been cited as an authority to sustain appellants’ view; but the facts of that case are so different from the facts presented by this record that we do not regard the case as one which can control the decision of this case. There, Bobinson owned a block of land, which Bafferty agreed to subdivide and sell, and for his services in selling he was to receive a share of the profits. Under the facts of that ease it was held—and, we think, properly—that Bafferty had no vested interest in the lands. But the land in that case was not purchased on joint account, as is the ease here. It was not intended that he should have an interest in the land, but that he should sell, and for his services in that capacity he should receive certain profits. There is such •a marked distinction between the two cases that the one can not control the other. Other cases of a similar character have been cited, but we have not the time, and it would serve no useful purpose, to refer to each case in detail; but upon an examination they will be found to differ so materially in their facts from the present case that they can not control. It is said that those owning the lands under the will of Bobinson do not desire to sell, and it is argued that it is a great hardship to compel a sale of their interest in order to satisfy a claim against the estate of Hyman. There is a seeming hardship in this regard. But the executors of the estate of Bobinson, at the request of Hyman, agreed, in writing, upon the sale of the premises, after the payment of all taxes, liens and assessments, to hold for account of the Exchange National Bank of Norfolk, Virginia, such sum of money, not exceeding $100,000, as may be due from certain firms of which Hyman was a member, to pay and discharge the indebtedness due the bank. Since this contract was executed by the executors of the estate of Bobinson, Hyman has died, and those represent- ■ ing the bank invoke the aid of a court of equity for an accounting, and for a sale of the premises, to'subject the interest of Hyman to the payment of its debt due, under the agreement executed both by Hyman and the executors. After Hyman’sdeath the executors of Bobinson’s estate were the only persons authorized to sell the premises. They declined to do so, and the. representatives of the bank, standing in the shoes of Hyman in so far as this claim is concerned, had no remedy except-to appeal to a court of equity. They held an equitable lien on Hyman’s interest in the premises to the extent of their debt, not exceeding $100,000, and, under the agreements and facts-as disclosed, we think the decree was proper. The rights of the executors, and those claiming under the will of Bdbinson, are fully guarded and protected by the decree, and, under all the evidence, we do not think they have any just cause of complaint. The judgment of the Appellate Court will be affirmed. Judgment affirmed.