Baker v. Stern

• Decision Date: 08 November 1927
• Citation: 216 N.W. 147,194 Wis. 233
• Parties: BAKER v. STERN.
• Court: Wisconsin Supreme Court

194 Wis. 233

216 N.W. 147

BAKER

v.STERN.

Supreme Court of Wisconsin.

Nov. 8, 1927.

Appeal from an Order of the Circuit Court of Milwaukee County; Edward T. Fairchild, Judge.

Suit by Maurice K. Baker against Sigmund Stern. From an order overruling defendant's demurrer to the complaint, defendant appeals. Affirmed.--[By Editorial Staff.]

Validity of a business trust. The complaint is as follows:

“(1) The plaintiff states that on or about the 24th day of September, 1927, plaintiff and defendant entered into a valid and binding contract by the terms of which plaintiff contracted and agreed to buy, and the defendant contracted and agreed to sell, the interests of the defendant in and to the following described property in Milwaukee county, Wisconsin, to wit: [Description of property (a), (b), (c), and (d)]--which said interests in said premises were so contracted to be bought and sold as aforesaid, for the purchase price and sum of one million, one hundred thousand dollars ($1,100,000.00) to be paid in cash at the time of the delivery of deed of conveyance and/or proper assignments of said interests in said premises, and the balance of said purchase price to be paid in the following manner, to wit: At the time of and as a part of the consummation of said contract and the transfer to plaintiff herein of said interests in said property, said plaintiff to have said interests in said property conveyed to a trustee, which said trustee shall thereupon execute certain certificates of equitable ownership of said interests in said premises, and shall deliver to defendant herein a five-sixteenth (5/16th) portion of the total issue of said certificates, which shall be received by defendant as payment in full of the balance of said purchase price.

(2) That said contract further provides that the general form and details of such certificates of equitable ownership should be left to the judgment and decision of the plaintiff, provided, however, that said interests in said premises should be conveyed or transferred to a trustee to be selected by plaintiff, which said trustee should issue said certificates of equitable ownership in two forms, one form thereof to be known and designated as ‘land trust certificates' and one form thereof to be known and designated as ‘ultimate title certificates,’ which said trustee should have control and management of said interests in said premises until said trustee should acquire such land trust certificates by purchase or otherwise. That such trustee should issue such certificates, together with a declaration of trust defining the terms of both such trust and such certificates. That the holders of such land trust certificates should be entitled to receive from the income of said interests in said premises the total sum of eighty thousand and 00/100 ($80,000.00) dollars per annum, prorated among such holders, with the obligation upon plaintiff to deposit with said trustee a sum sufficient, which added to the income provided for in said lease to said Water-Grand Holding Company until May 1, 1932, to equal eighty thousand and 00/100 ($80,000.00) dollars per annum, to said last-named date, which deposit should be made in cash or securities approved by said trustee (in which latter case the securities to be sold from time to time to meet such deficiency) at the election of the plaintiff, and provided further that such declaration of trust and certificates should be valid in all respects under the laws of the state of Wisconsin, that they should not violate the rule against perpetuities, and that they should be assignable, reassignable, transferable, and retransferable by proper indorsements upon such certificates and the transfer or reissuance thereof by such trustee.

(3) The plaintiff further states that he has fully complied with the provisions of said contract, which said contract is hereto attached, marked ‘Exhibit A’ and made a part hereof as though specifically set out in full herein, and has tendered to the defendant one million one hundred thousand and 00/100 ($1,100,000.00) dollars in cash and also certificates of equitable ownership to be delivered to defendant coincidentally with the transfer from defendant of said interests in said premises, which said certificates of equitable ownership and declaration of trust conform in all respects to all the terms and provisions of said contract, which said declaration of trust is in word and figures as follows, to wit:

‘Agreement and Declaration of Trust.

Agreement and declaration of trust, dated for convenience September 1, 1927, but actually executed on the _____ day of ______, 1927 (hereinafter sometimes called the declaration) between First Wisconsin Trust Company, a corporation organized and existing under the laws of the state of Wisconsin, of Milwaukee, Wisconsin, as trustee (hereinafter sometimes called trustee), party of the first part, and such persons, partnerships, associations and/or corporations as may become parties hereto by the acceptance of certificates of equitable ownership issued hereunder (hereinafter sometimes called beneficiaries), parties of the second part, witnesseth:

That the parties do hereby in consideration of their mutual covenants make the following agreement and declaration of trust with respect to the premises hereinafter described:

Article I.

The trustee hereby declares that it holds and will hold as trustee for the use and benefit of all present and future holders of the certificates of equitable ownership issued hereunder (such certificates being of two kinds, one known as land trust certificates, and the other known as ultimate title certificates, as hereinafter described), the title to the premises acquired by the trustee by deed and assignments from City Center Realty Company, a corporation organized and existing under the laws of the state of Wisconsin, covering the following interests in the following described property, to wit: [Description of property (1) (2).] The interest of the trustee in said premises is hereinafter sometimes referred to as the trust estate.

Said premises are subject to a certain indenture of lease, dated March 28, 1927, by and between City Center Realty Company, a corporation, as lessor, and Water-Grand Holding Company, a corporation, as lessee, filed for record in the office of the register of deeds of Milwaukee county, Wisconsin, on the first day of April, 1927, as instrument No. 1508814, and recorded in said office in Record 1173 of Deeds, page 287 and following (said indenture of lease being hereinafter sometimes referred to as the lease), to which lease and record thereof reference is hereby made for all of the terms and conditions thereof, which said lease among other things provides as follows:

(a) The term of said lease upon said lots 10, 11, and 12 is for a period of ninety-nine (99) years commencing on April 1st, 1927, and ending March 31st, A. D. 2026, and the term thereof upon said lot 9 is for a period of ninety-eight (98) years and eleven (11) months, commencing on the 1st day of May, 1927, and ending on the 31st day of March, A. D. 2026.

(b) The lessee agrees to pay to the lessor or its successors in interest or assigns, the sum of four thousand one hundred sixty-six and 67/100 ($4,166.67) dollars, upon the execution of said lease as rent for said lots numbered 10, 11, and 12, for the period commencing April 1, 1927, and ending April 30, 1927; the sum of fifty thousand five hundred and 00/100 ($50,500.00) dollars, for the term commencing May 1st, 1927, and ending April 30th, 1928, payable in equal quarterly installments of twelve thousand six hundred twenty-five and 00/100 ($12,625.00) dollars each, in payments on the 1st day of months of May, August, November, and February, during said period; the sum of seventy-five thousand five hundred and 00/100 ($75,500.00) dollars, per year for the term commencing May 1st, 1928, and ending April 30, 1932, payable in equal quarterly installments of eighteen thousand eight hundred seventy-five and 00/100 ($18,875.00) dollars each, in advance on the first day of each of the months of May, August, November, and February, during said four-year period; the sum of eighty-three thousand and 00/100 ($83,000.00) dollars per year for the term commencing May 1st, 1932, and ending April 30th, 1942, payable in equal quarterly installments of twenty thousand seven hundred fifty and 00/100 ($20,750.00) dollars each, in advance on the first day of each of the months of May, August, November and February, during said ten-year period; the sum of ninety thousand five hundred and 00/100 ($90,500.00) dollars per year for the balance of the demised term, commencing May 1st, 1942, and ending March 31st, 2026, payable in equal quarterly installments of twenty-two thousand six hundred twenty-five and 00/100 ($22,625.00) dollars each in advance, on the first day of each of the months of May, August, November, and February, during said period of eight-three years and eleven months.

In addition thereto, said lessee agrees to comply with and perform all the terms, covenants, and provisions in said lease covering lot 9, from said Argola Corporation to said City Center Realty Company, including the payment of the full rental thereunder.

(c) The lessee also covenants and agrees that, during the term of said lease, the lessee will pay all water rates, and all taxes, charges, and assessments, general and special, ordinary and extraordinary, of every nature and kind whatsoever levied, assessed or imposed after the year 1926, and during the continuance of said lease upon the land or premises thereby demised, and upon any and all buildings, or improvements of any kind thereon, or which may after the date thereof and before the expiration of the term thereof be erected or placed thereon, whether such tax, rate, or assessment shall be for city, town, county, state, federal, or any other purposes whatsoever, said lessee thereby covenanting...