Board of Trustees of Oberlin College v. Blair

• Decision Date: 18 October 1895
• Citation: 70 F. 414
• Parties: BOARD OF TRUSTEES OF OBERLIN COLLEGE v. BLAIR et al.
• Court: Circuit Court of Virginia

70 F. 414

BOARD OF TRUSTEES OF OBERLIN COLLEGE v. BLAIR et al.

United States Circuit Court, D. West Virginia.

October 18, 1895

G. W Farr, W. H. Miller, and T. E. Burton, for complainant.

S. D Turner, B. M. Ambler, and W. P. Hubbard, for defendants.

GOFF Circuit Judges.

The board of trustees of Oberlin College, a corporation under the laws of the state of Ohio, and a citizen of that state brings this suit in the circuit court of the United States for the district of West Virginia, against J. V. Blair, as trustee and in his own right, S. B. McMillan, Henry Ash, L W. Pearcy, T. K. Knight, and the personal representative and heirs at law of C. R. Gain, deceased, all residents of Doddridge county, in the state of West Virginia and citizens of that state, and the South Penn Oil Company, a corporation under the laws of the state of Pennsylvania, and a citizen of said state.

The case stated by the bill is, in substance, this: The board of trustees of Oberlin College, for some years prior to the 24th day of July, 1885, claimed to own a certain tract of land containing about 300 acres, located in said county of Doddridge. The defendant T. K. Knight and C. R. Gain (then living, but deceased when the bill was filed, and for some time previous thereto) also claimed to have title to said tract of land. A controversy arose concerning the same, and, in order to adjust it, an agreement was entered into by said parties, signed and executed by all of them, under date of July 24, 1885, by which it was provided that they should convey their respective claims and interests in the land to the defendant J. V. Blair, as trustee, who was authorized therein to sell the same, under the directions of the parties thereto, and divide the proceeds thereof, after paving the expenses of the trust, as follows: To the board of trustees of Oberlin College, one-half; to C. R. Gain, one-fourth; and to T. K. Knight, one-fourth. In accordance with said agreement, the board of trustees, on the 19th day of September, 1885, and said Gain and Knight, on the 13th day of January, 1886, made and delivered to Blair, as trustee, deeds conveying all their claims and title in and to the said tract of land. Blair, as such trustee, at once took possession of the land, sold a portion thereof, and remained in charge of the residue, until the 23d day of February, 1892, at which time he, with the assent of the board of trustees, of Knight, and of Henry Ash, who had theretofore qualified as the personal representative of the decedent, Gain, sold and conveyed the residue of said tract of land to the defendant S. B. McMillan, collected from him the purchase money due for the same, and disbursed it as required by the agreement before mentioned. It is set forth in the bill that the assent of said board of trustees to said sale was obtained from it by the trustee, Blair, in pursuance of a conspiracy entered into by the defendants McMillan, Ash, Pearcy, and Blair, the object of which was to defraud the said board out of its just rights in the land so sold; it being alleged that the land had lately before, on account of its proximity to the 'oil belt' in that locality, become very valuable, which fact it is charged was fraudulently concealed from the board by said trustee. It is also charged in the bill that the assent of Knight to the sale by his trustee, Blair, was secured in some way to the plaintiff unknown, with the object of concealing the fraudulent purposes of said conspirators, and with the understanding that he was to retain a one-fifth interest in the land so conveyed to McMillan, the other four-fifths to be held, respectively, by McMillan, Ash, Pearcy, and Blair. It is also stated that Ash, fraudulently, in the interest of such conspiracy, induced Knight, on the 1st day of March, 1892, to lease to him the one-fifth part of the land that had been so retained by said Knight, the consideration for the lease being set out as $100 cash, and a one-eighth portion of the oil that might be removed from the land, as royalty. The plaintiff alleges that Ash was taken into the conspiracy, not only because he was a friend of Blair, but also because he was the administrator of the estate of the decedent, Gain, the interests of which it is charged he was induced to betray, in order that he and his co-conspirators might secure the valuable property formerly owned by said Gain. It is also alleged that after the title was so conveyed to McMillan by Blair, trustee, the consideration being the sum of $1,280, said land was on the 21st day of March, 1892, by said parties, through McMillan, leased to the defendant the South Penn Oil Company, for a cash bonus paid them of $5,500, besides a reservation of one-eighth of all the oil, together with certain annual rentals, payments, and other provisions and conditions not necessary to be now recited. The allegation is also made that Ash, Pearcy, and Blair had contracts with McMillan (similar to the one held by Knight), before the deed for the land was made to him, for the sale and conveyance to them, respectively, of a one-fifth interest in and to the same. The plaintiff claims that, in view of such fraud, a court of equity will decree that McMillan, Blair, Ash, Pearcy, and Knight, holding the legal title to said land by and through McMillan, are trustees for the board of trustees, for said Knight, and for the heirs of C. R. Gain, deceased, in the same proportions, respectively, as was held for them by their trustee, Blair; and that it will direct that they, as such trustees, account for and pay over to such beneficiaries the sums of money so received by them from the South Penn Oil Company; and that it will also declare that the lease so made to that company of said land is for their use and benefit, at the same time requiring the oil company to attorn to those so entitled to the rents and profits of the land. The appointment of a receiver is asked for, to take charge of the property, and collect the royalties due and to become due thereon. An injunction is prayed for, restraining the alleged conspirators from selling the land, and from receiving from any party any portion of such rents and proceeds.

Such are the averments of the bill necessary to be referred to in connection with the questions I am now to dispose of. The defendants Blair, Ash, Pearcy, and McMillan individually, Blair as trustee, and Ash as administrator, demur to the bill, and also move the court to dismiss this suit for want of jurisdiction. On the hearing of the demurrer and of the motion to dismiss, the allegations of the bill will be taken as true.

It is the duty of the court, independent of plea or motion, under the provisions of section 5 of the act of March 3, 1875 (18 Stat. 470, 472), to examine the case, and see if it rightfully has jurisdiction of the matter presented to it by the bill. If this court has jurisdiction of this suit, it is by virtue of clause 1 of said act, as amended March 3, 1887, and August 13, 1888, which quoad hoc reads as follows:

'The circuit courts of the United States shall have original cognizance, concurrent with the courts of the several states, of all suits of a civil nature, at common law or in equity, when the matter in dispute exceeds, exclusive of interest and costs, the sum or value of two thousand dollars, and arising under the constitution or laws of the United States, or treaties made or which shall be made, under their authority, or in which controversy the United States are plaintiffs or petitioners, or in which there shall be a controversy between citizens of different states, in which the matter in dispute exceeds, exclusive of interest and costs, the sum or value aforesaid.'

On the case as now submitted, I must look to the bill alone, in order to determine the character of the controversy. It sufficiently appears that the matter in dispute exceeds exclusive of interest and costs, the sum or value of $2,000, and it only remains...