Davis v. Hamlin

• Citation: 48 Am.Rep. 541,108 Ill. 39,1883 WL 10353
• Parties: WILLIAM J. DAVISv.JOHN A. HAMLIN.
• Decision Date: 20 November 1883
• Court: Supreme Court of Illinois

108 Ill. 39

1883 WL 10353 (Ill.)

48 Am.Rep. 541

WILLIAM J. DAVIS

v.JOHN A. HAMLIN.

Supreme Court of Illinois.

Filed at Ottawa Nov. 20, 1883.

OPINION TEXT STARTS HERE

APPEAL from the Appellate Court for the First District;--heard in that court on appeal from the Circuit Court of Cook county; the Hon. M. F. TULEY, Judge, presiding.

This was a bill in equity, brought by John A. Hamlin, against William J. Davis, seeking to have the latter declared to be a trustee for the former of a certain lease of the Grand Opera House in Chicago, which Davis had obtained for himself from William Borden. Upon the hearing the circuit court decreed the relief prayed for. The decree was affirmed by the Appellate Court for the First District, and the defendant appealed to this court.

The facts appearing from the evidence are, that Hamlin was the lessee and manager of the theatre known as the Grand Opera House, in the city of Chicago, and for some ten years had occupied the premises, first as owner, and then as lessee. After the Chicago fire, in 1871, he purchased the lots and built thereon the building, and has used it since that time as a place of amusement. He expended in its construction and improvement over $75,000. Mortgages had been given upon the lots, which were finally foreclosed, and he lost the title to the lots. Subsequently he became a lessee, and contracted with William Borden, who was then the owner of the premises, that the latter should fit up the house for a first-class opera house, and that he would pay him a rental, after it was finished, amounting to about $18,000 a year. The building being completed about the month of August, 1880, Hamlin entered into the possession, and opened it as a place for first-class entertainments. He had a lease which would expire April 23, 1883, and it was his intention to continue permanently in this building in the amusement business, and at the expiration of his lease to renew it. During the first year after opening his new opera house, about the first of September, 1880, he cleared, over and above all expenses, the sum of $7000, and the next year, from September, 1881, to September, 1882, $24,000. When he was about to open in September, 1880, he secured the services of William J. Davis, the defendant, as a general business manager. The evidence shows that the duties of a manager or assistant manager are to correspond with companies, operas, troupes, etc., for engagements of from one to four weeks, according to their acceptableness, and so arrange the engagements that they will follow one another in future months without loss of time. In making these engagements it is necessary to show the exact expense of the house each night, including rent, and the custom of business is to make a settlement between the proprietor of the theatre and the manager of the attraction, and divide the money every night. Davis, about September, 1880, entered upon the discharge of his duties, and from that time until the making of the lease in question continued in the management of the theatre. For this service he received $50 per week as a fixed salary, and ten per cent of the profits.

Respecting the renewal of the lease there is but the uncontradicted testimony of Davis and Hamlin themselves. Davis testifies the first negotiation he had with Borden was about December 1, 1881. He went to Borden for the purpose of purchasing the theatre, and offered $200,000 for it. Borden did not care to sell, and inquired what rent Davis would be willing to pay, and Davis said, ten per cent on Borden's valuation of it, if it did not run above $225,000. Borden asked Davis if he would give that rent, and Davis said he would, if there was any use of his making an offer for it,--if the theatre was in the market. Borden said he was going to New York, and would see Davis on his return. Davis says he next saw Borden on the 19th of January, 1882, when he called upon Borden in Chicago in response to a note from Borden to do so. Borden then inquired of Davis what he would give for the lease of the theatre. Davis told him. Borden did not accept the offer, but asked Davis to see him another day, and after further negotiation, Borden, on the 24th of January, 1882, executed to Davis a lease of the theatre for the term of ten years, at the rental of $22,500 per year. Davis says he told Borden, at the interview on January 19, that Hamlin would pay him nearly double what Davis offered for the theatre, because Hamlin had told him (Davis) that he would pay $40,000 a year for the theatre, and sink $10,000 from his private income, before he would surrender it, but Borden said he thought Hamlin was “blowing.”

Hamlin testifies that soon after the opening, in 1880, he made application to Borden for a lease to him and one Nunnemacher for twenty years, which Borden declined, then, to give; that the next talk he had with Borden was in New York, between the middle of December, 1881, and the middle of January, 1882, when he told Borden he would take a lease for any term of years, and would pay all that it was possible for any prudent business man to pay, and would pay as much rent as anybody. Borden said he would talk it over the next week in Chicago. Subsequently he had two interviews in Chicago with Borden on the subject. At the second one he offered $20,000 per year rent, but Borden declined to take it, saying he must see the other parties first; that there were two persons he had offers from; that they were managers, and Chicago men. Hamlin testifies that he went immediately to Davis, and inquired of him if he was attempting to secure a lease of the Grand Opera House, and Davis answered no,--that he was not. He said he then told Davis what he had just learned from Borden, and that he would pay double the value of the theatre rather than anybody else should have it. Davis said to him: “I would not give an extravagant price for it, if I were you; I would not give a dollar more than it is worth.” The parties agree as to this interview and conversation, differing only as to its date, Davis testifying that it was on the 17th, and Hamlin that it was on the 23d of January, 1882.

The evidence was that a theatre well managed has a good will, of value, attached to it; that there were only four first-class theatres in Chicago, including the Grand Opera House, and there was no probability that Hamlin could get another theatre without building a new one.

Mr. EGBERT JAMIESON, and Mr. L. W. PERCE, for the appellant:

The relation of principal and agent did not exist between Hamlin and Davis in regard to the subject matter of renewing the lease. Fairman v. Bavin, 29 Ill. 75.

The relation of master and servant, and that of trustee and cestui que trust, are not identical, nor does the one necessarily involve the other. The relation of employer and employé is not a confidential one. Story's Eq. Jur. sec. 1195; Cook v. Fountain, 3 Swanst. 591; Wharton on Agency, sec. 19; Bigelow on Fraud, 231; Paley on Agency, 12; Deep River Mining Co. v. Fox, 4 Ind. 61.

The application of the principles governing the relation of trustee and cestui que trust is limited to dealings with the trust estate. In all matters not connected with the subject of the trust the parties are fully competent to deal with each other, with third parties or strangers. Knight v. Majoribanks, 2 Mac. & G. 10; Montesquiea v. Sandys, 18 Ves. 308; Crane v. Lord Allen, 2 Dow, 289; Ex parte James, 8 Ves. 352; Galbraith v. Elder, 8 Watts, 81; McDonald v. Fithian, 1 Gilm. 269; Kennedy v. Keating, 34 Mo. 25.

In every case reported in this State where parties have been declared trustees, the rule contended for is exemplified. Every case connects the trustee with the subject matter of the trust by directly and distinctly charging him with a duty in connection with such subject matter. Casey v. Casey, 14 Ill. 112; Pensonneau v. Blakely, Id. 15; Wickliff v. Robinson, 18 Id. 145; Hitchcock v. Watson, Id. 289; Dennis v. McCagg, 32 Id. 429; Morris v. Taylor, 49 Id. 17; Kerfoot v. Hyman, 52 Id. 512; Cotton v. Holliday, 59 Id. 176; Mason v. Bauman, 62 Id. 76; Ely v. Hanford, 65 Id. 267; Hughes v. Washington, 72 Id. 84; Tewksbury v. Spruance, 75 Id. 187; Eldridge v. Walker, 80 Id. 270; Francis v. Kerker, 85 Id. 190.

When the party is not connected in a trust capacity with the subject matter of the trust, he can not be held as a trustee. Fairman v. Bavin, 29 Ill. 75; Merryman v. David, 31 Id. 404.

A person holding a confidential position is not incapacitated thereby in regard to matters in respect to which he has no duty to perform. Edwards v. Meyrick, 2 Hare, 60.

The so-called tenant right of renewal confers no positive interest, either vested or contingent. It is a mere naked possibility, depending solely on the caprice of the lessor. A right of renewal must be the result of express contract. Taylor on Landlord and Tenant, sec. 332, note 2.

Mr. LEONARD SWETT, and Messrs. QUIGG & TUTHILL, for the appellee:

Any one who acts representatively, or whose office is to advise or operate, not for himself, but for others, is a trustee. 1 Lead. Cases in Equity, 238; Bigelow on Frauds, 190.

Wherever there is a relation which puts one party in the power of the other, a fiduciary relation exists. Evans on Agency, 256; Kerr on Fraud and Mistake, 182, 183. In the employment of an agent the principal bargains for the disinterested skill, diligence and zeal of the agent for his own exclusive benefit, and whenever an agent is employed the principal is entitled to the intelligence, experience, care, skill and diligence of the agent, without any conflicting interests on his part prejudicial to the rights of such principal. Wait's Actions and Defences, title, “Agency,” sec. 12, p. 245; Hilliard on Vendors, 369; Story on Agency, secs. 210, 211.

A person availing himself of a position of confidence to obtain an advantage, will not be permitted to retain it. Bispham's Equity, sec. 232; 1 Story's Eq. Jur. sec. 333.

A trustee must not put...