Charles Campbell v. Northwest Eckington Improvement Company

• Decision Date: 09 June 1913
• Docket Number: No. 251,251
• Citation: 33 S.Ct. 796,57 L.Ed. 1330,229 U.S. 561
• Parties: CHARLES M. CAMPBELL, Appt., v. NORTHWEST ECKINGTON IMPROVEMENT COMPANY, T. Cushing Daniel, and Samuel C. Redman
• Court: U.S. Supreme Court

229 U.S. 561

33 S.Ct. 796

57 L.Ed. 1330

CHARLES M. CAMPBELL, Appt.,

v NORTHWEST ECKINGTON IMPROVEMENT COMPANY, T. Cushing Daniel, and Samuel C. Redman.

No. 251.

Argued and submitted April 23 and 24, 1913.

Decided June 9, 1913.

Mr. John Ridout for appellant.

Mr. Holmes Conrad for appellees.

Mr. Justice Pitney delivered the opinion of the court:

This appeal brings under review a decree of the court of appeals affirming a decree of the supreme court of the District of Columbia that declared a deed of conveyance, absolute on its face, made by the Northwest Eckington Improvement Company to Charles M. Campbell, to have been intended only to secure to Campbell his share of the profits of an enterprise previously undertaken by the parties to the action for the development of the lands described in the deed. The decree also canceled the contracts between the parties respecting the enterprise, settled an account between them, decreed that Campbell should pay a certain sum found due from him on balance, required him to reconvey the land, and granted incidental relief. The decree thus affirmed was rendered pursuant to the mandate of the court of appeals upon the reversal of a former decree which was in Campbell's favor. The successive decisions, so far as reported, are to be found in 28 App. D. C. 483; 38 Wash. L. Rep. 79; 36 App. D. C. 149.

The present appellant assails the decree in respect of its main features, and also in respect of the principle adopted in the accounting. A somewhat particular recital of the facts in evidence, with the grounds of decision in the courts below, seems to be called for.

In the year 1902, the Eckington Company held the legal title to a tract of land lying in a suburb of Washington, containing about 10 1/2 acres. The appellees Daniel and Redman were the owners and holders of practically all the stock in the company, and had entire charge of its affairs. Redman was president, and Daniel, secretary; Daniel, with Redman's assent, represented the latter, and also the company, in the various transactions out of which the controversy arises. The property was unimproved and unproductive, and its value problematical. It was encumbered with a deed of trust, held by a Mrs. Franz, given to secure promissory notes of Daniel, upon which approximately $32,000 were due. Interest and taxes were in arrears. In the early part of the year negotiations took place between Daniel and Redman, on the one hand, and Campbell, the appellant, on the other, with the object of interesting Campbell, who was a builder and a manager of real estate developments and as a result a written agreement was made between them, of which the following is a copy:

Washington, D. C., March 13, 1902.

Whereas T. C. Daniel and S. C. Redman, of Washington, D. C., acting for themselves and the Northwest Eckington Improvement Company, of the District of Columbia, a corporation incorporated under the laws of the state of Virginia, are owners of a certain tract of land in northwest Eckington, subject to trust interest and taxes fully described by the plats and printed matter of the above company, consisting of 10 1/2 acres more or less, desire to dispose of the same, they hereby agree with C. M. Campbell, of Washington, D. C., in consideration of $1 in hand paid by him, and other valuable consideration, that if he will organize or be instrumental in organizing a company, even with the assistance of T. C. Daniel or others, for the purchase of said ground, and give the necessary time and attention to that end, they agree, in case his plans work out so that they accept the consideration said company offers for said ground, to give him a third of the amount they receive, whether of money, stock, or property, and that in the event of such sale or disposition of said property he is to become possessed of an undivided one-third interest in the property. In case less than the whole tract is sold, then said Campbell is to become possessed of an undivided one-third interest in the amount sold.

[Northwest Eckington Improvement Co. Seal.]

T. Cushing Daniel. [Seal.]

Samuel C. Redman. [Seal.]

C. M. Campbell. [Seal.]

Approved and accepted.

Northwest Eckington Improvement Co.

S. C. Redman, Prest. T. C. Daniel, Sec.

Pursuant to this agreement, Campbell caused a corporation to be formed, with the title of 'Washington Sanitary Dwellings Company,' and endeavored to sell enough of its stock to provide for taking over the property and constructing sanitary dewellings thereon for workingmen and their families.

Mrs. Franz was pressing for money, and, in order to satisfy her, Campbell agreed to pay her, and did pay her, $500 on account of the amount due upon the deed of trust, and at the same time a memorandum was signed, of which the following is a copy:

Washington, D. C., June 19th, 1902.

Whereas a certain agreement was entered into, March 13, 1902, between T. Cushing Daniel, S. C. Redman, and C. M. Campbell, which agreement was accepted by the Northwest Eckington Improvement Company, now this further memorandum witnesseth: That the company which said Campbell agreed to organize, as stipulated in said agreement, has been organized to our satisfaction; that the deed conveying said property to said company has been prepared and properly executed, and that the $500 which said Campbell this day advances to meet the requirements of the holder of the deed of trust on said property is done upon acceptance of the above facts. Said transfer will be made upon the terms of acceptance noted in the minutes of the Sanitary Dwellings Company, which are accepted. Any monies advanced by said Campbell in handling the property in question shall be returned returned to him out of first sales.

And all rights of said Campbell under said agreement of March 13, 1902, shall remain unimpaired.

[Seal.] T. C. Daniel,

[Seal.] C. M. Campbell,

Northwest Eckington Improvement Company,

_____ _____, President. T. C. Daniel, Sec'y.

According to Campbell's testimony,—undisputed so far as we have observed,—the clause italicized was inserted by Daniel in his own handwriting in order to emphasize the assurance that Campbell was to have rights prior to the others to the extent of reimbursement of his advances. The paper was not signed by Redman, nor formally by the company,—a matter that is of no present consequence in view of its subsequent recognition.

Besides the $500 paid to Mrs. Franz, Campbell paid out in June $122.91 for taxes upon the property, and during the spring and summer incurred expenses aggregating $481.81 in organizing and promoting the Washington Sanitary Dwellings Company. Daniel himself, called as a witness for the complainants, testified upon the subject as follows: 'Mr. Campbell worked on the sale of stock in the company; employed others to assist him in placing the stock, but after finding that he could not make it a success, he admitted the same to me, and asked whether something could not be done to save the $1,000 that he had spent in that effort; we then agreed to abandon the Sanitary Dwellings enterprise.' After some discussion the parties, under date of October 23, 1902, entered into a further agreement in writing of which the following is a copy:

Whereas a contract was entered into March 13, 1902 between T. C. Daniel and S. C. Redman and the Northwest Eckington Improvement Co., a corporation, and C. M. Campbell, stipulating for the services of said Campbell, it is further agreed, while preserving to said Campbell any rights he may have under said contract, as follows:

1. In consideration of the services of said Campbell has already performed, and for the purpose of securing his further services and co-operation in the handling and improvement of said property, it is agreed to make certain extension of the provisions of said contract.

2. It is now decided to release the Sanitary Dwellings Company, if necessary, from any obligations it may have assumed in in regard to any agreement to purchase said property.

3. The said Daniel, Redman, and the Northwest Eckington Improvement Company have decided to improve and market said property, as fast as may be possible, by building houses thereon.

4. To this end they desire to utilize the skill of said Campbell as a builder and his assistance financially.

5. It is agreed by said Daniel, Redman, and the Northwest Eckington Improvement Company to employ said Campbell as a skilful builder in the erection of said houses, he to take charge of said work, with such assistance as the other parties to this contract may be able to furnish, and pursue such work industriously and with all the ability and skill he can bring to the work.

6. In the borrowing of the money that may be needed in developing said enterprise, he is to use his credit by joining the other parties to this contract in the making or indorsing of any notes that may be required in negotiating the necessary loans for the making of said improvements and in paying off the loan of $32,000 now due on said property. In doing this, account is to be taken of all moneys and interest he has already advanced under contracts in relation to said property already entered into between the parties hereto. And any sums advanced or to be advanced by any of said parties for the same purpose under said agreements is likewise to be accounted for.

7. It is proposed to erect at once five houses on said property, and follow them with others as soon as such a course is warranted by the results and approved by the judgment of the parties to this agreement, said Campbell to industriously push said improvements with his best skill and ability, as provided in paragraph 5 herein, without any further compensation for his services than are provided for herein.

8. In return for said undertaking on said Campbell's part he is to become possessed of an undivided one-third interest in said property.

Witness our hands and seals this 23d day of October, 1902.

Northwest...