Emery Bird Thayer Dry Goods Co. v. Williams, 10853

• Decision Date: 13 July 1938
• Docket Number: No. 10853,10854.,10853
• Citation: 98 F.2d 166
• Parties: EMERY BIRD THAYER DRY GOODS CO. et al. v. WILLIAMS et al. WILLIAMS et al. v. EMERY BIRD THAYER DRY GOODS CO. et al.
• Court: U.S. Court of Appeals — Eighth Circuit

98 F.2d 166 (1938)

EMERY BIRD THAYER DRY GOODS CO. et al. v. WILLIAMS et al.^*

WILLIAMS et al. v. EMERY BIRD THAYER DRY GOODS CO. et al.

Nos. 10853, 10854.

Circuit Court of Appeals, Eighth Circuit.

July 13, 1938.

COPYRIGHT MATERIAL OMITTED

Armwell L. Cooper and Wallace Sutherland, both of Kansas City, Mo. (Ellison A. Neel, William E. Kemp, and Cooper, Neel, Kemp & Sutherland, all of Kansas City, Mo., and Frank E. Atwood, of Jefferson City, Mo., on the brief), for Emery Bird Thayer Dry Goods Co. et al.

Barton Corneau, of Boston, Mass. (Henry M. Channing, of Boston, Mass., Robert B. Caldwell, of Kansas City, Mo., Channing, Corneau & Frothingham, of Boston, Mass., and McCune, Caldwell & Downing, of Kansas City, Mo., on the brief), for Moses Williams et al.

Paul R. Stinson, of Kansas City, Mo., amicus curiæ.

Before GARDNER, WOODROUGH, and BOOTH, Circuit Judges.

GARDNER, Circuit Judge.

There are here presented an appeal and a cross-appeal from the decree construing the obligations of a lease with respect to rent, and refusing a forfeiture of the lease.

The Emery Bird Thayer Dry Goods Company and the Emery Bird Thayer Realty Company were plaintiffs below, while Moses Williams, William Minot, Edwin D. Brooks and William B. Baker, Trustees of Boston Ground Rent Trust, were defendants. The defendants are trustees of the Boston Ground Rent Trust, a common-law or Massachusetts trust, and are owners of the property involved. The original owner of the building on the property had acquired the fee to the land and was erecting a building on it prior to the execution of the lease. An agreement was entered into, by which the then owner sold the premises to the defendants' predecessors, and they concurrently executed a ninety-nine year lease to the then owner. The deed and lease to the property were concurrently executed in April, 1890, and as a part of the same transaction. In 1898, the lessee assigned the lease to the plaintiff, Emery Bird Thayer Dry Goods Company. In 1908, the plaintiff, Emery Bird Thayer Realty Company, was organized, and the lease was then assigned to it, and the Dry Goods Company, by a concurrently executed instrument, then became sublessee of the Realty Company for a term ending three months prior to the expiration of the lease. The Dry Goods Company expressly assumed the obligations of the lessee under the lease.

Prior to the execution of the lease, there were certain negotiations, evidence concerning which was for the most part excluded. The lease is dated April 11, 1890, and is for a term of ninety-nine years from its date. It contains provision for payment of rent as follows:

"Said lessee covenants and agrees to deliver to the lessors, as yearly rental for said demised premises, at such office of the lessors, or their agent, or at such bank, in said city of Kansas City, or in the City of New York, or in the City of Boston, as the lessors may, from time to time, designate, Thirty-three Thousand Dollars ($33,000) in gold coin of the United States of the present standard of weight and fineness, in four quarterly yearly installments, each in advance, of Eight Thousand Two Hundred and Fifty Dollars ($8,250) each, on the First days of April, July, October, and January, in each and every year during the first four years of this lease, the first delivery to be made on the First day of April, 1890; Eighty Thousand Dollars ($80,000) in such gold coin in four instalments as follows, namely: — Fifty-seven Thousand Five Hundred Dollars ($57,500) on the First day of April, 1894, Seven Thousand Five Hundred Dollars ($7,500) on the first day of July, 1894, Seven Thousand Five Hundred Dollars ($7,500) on the First day of October, 1894, and Seven Thousand Five Hundred Dollars ($7,500) on the first day of January, 1895, during the fifth year of this lease; Seventy-seven Thousand Dollars ($77,000) in such gold coin in four instalments as follows, namely: — Fifty-six Thousand Seven Hundred and Fifty Dollars ($56,750) on the first day of April, 1895, Six Thousand Seven Hundred and Fifty Dollars ($6,750) on the first day of July, 1895, Six Thousand Seven Hundred and Fifty Dollars ($6,750) on the first day of October, 1895, Six Thousand Seven Hundred and Fifty Dollars ($6,750) on the first day of January, 1896, during the sixth year of this lease; Seventy-four Thousand Dollars ($74,000) in such gold coin, in four instalments as follows, namely: — Fifty-six Thousand Dollars ($56,000) on the first day of April, 1896, Six Thousand Dollars ($6,000) on the first day of July, 1896, Six Thousand Dollars ($6,000) on the first day of October, 1896, and Six Thousand Dollars ($6,000) on the first day of January, 1897, during the seventh year of this lease; and Five Hundred and Fifty-seven Thousand, Two Hundred and Eighty (557,280) grains of pure, unalloyed gold, in four quarter-yearly instalments, each in advance, of One Hundred and Thirty-nine Thousand, Three Hundred and Twenty (139,320) grains each, on the first days of April, July, October and January, in each and every year during the remaining ninety-two (92) years of said period of ninety-nine (99) years, the first delivery of such pure gold to be made on the First day of April, 1897.

"Provided, however, that the lessors may, from time to time at their option, require in lieu of any such quarter-yearly delivery of pure, unalloyed gold, the payment, at the time and place appointed for such delivery, of the sum of Six Thousand Dollars ($6,000), in such lawful currency of the country as the lessors may designate."

Up to January 1, 1934, all payments due the lessors were made by checks or drafts, which the lessors accepted and cashed.

On June 5, 1933, a Joint Resolution of the Congress (48 Stat. 112) became effective. Other congressional legislation (the Emergency Banking Act of March 9, 1933 (48 Stat. 2), and the order of the Secretary of the Treasury of December 28, 1933) became effective in that year, so that on January 1, 1934, it became and ever since has been impossible for plaintiffs to deliver gold to the defendants as required by this lease.

Defendants demanded payment in gold, but offered temporarily to accept in lieu of the 139,320 grains of gold, the number of dollars equal to the amount which the Government would then pay for a like amount of newly mined gold. They threatened forfeiture unless plaintiffs paid $10,158.75 per quarter. Plaintiffs, coerced by these threats, paid to defendants, under protest, the amounts per quarter demanded until and including the payment falling due April 1, 1935. As a precautionary measure, plaintiffs attempted to procure from the Treasury Department a license to acquire gold, newly mined or otherwise, to comply with the terms of the lease, but in this it was unsuccessful.

The payments of the several quarter-annual amounts of $10,158.75, made by plaintiffs to defendants, were receipted for by defendants in the following form:

"The Trustees of the Boston Ground Rent Trust have this day received from Emery Bird Thayer Dry Goods Co. its check for Ten Thousand One Hundred Fifty Eight and 75/100 ($10,158.75) Dollars. This check (subject to collection) is accepted by said Trustees as equivalent to the delivery to them of 139,320 grains of pure unalloyed gold (on the basis that the gold content of the dollar was established January 31, 1934, by proclamation of the President of the United States, issued under Act of Congress, as fifteen and 5/21st (15 5/21) grains of gold, nine-tenths (9/10) fine, as the quarterly delivery of rent, due July 1, 1934, under the lease * * *."

Plaintiffs' amended bill of complaint prays that the court adjudge (1) that the provisions of the lease requiring the delivery of gold bullion as rental are unlawful and void; (2) that the quarter yearly rental under the lease is and may be satisfied by the payment of $6,000 in lawful currency of the United States; and (3) that the defendants be perpetually enjoined from forfeiting or attempting to forfeit the lease, as long as plaintiffs shall pay the rent in the amount of $6,000 quarter-annually and perform the other covenants of the lease.

Defendants in their answer and cross-complaint, deny the applicability of the Joint Resolution or other Acts of Congress to the lease, and challenge their constitutionality as applied to the lease. They ask decree of forfeiture of the lease because plaintiffs have not tendered gold since January 1, 1934, in satisfaction of the rentals thereunder.

The lower court denied forfeiture, but decreed that plaintiff must pay an amount in currency equal to the present value of the required gold if lawfully delivered.

On this appeal plaintiff contends: (1) That the Joint Resolution of June 5, 1933, applies to the provision for the delivery of gold; and (2) that the measure of compensation is $6,000.00 quarter-annually.

The defendants, on their cross-appeal, contend that the lease could only be satisfied by the delivery of gold, and since it could not be delivered, the lease became subject to forfeiture.

The Joint Resolution of June 5, 1933, 48 Stat. 112 (31 U.S.C. § 463, 31 U.S. C.A. § 463) provides as follows:

"Whereas the holding of or dealing in gold affect the public interest, and are therefore subject to proper regulation and restriction; and

"Whereas the existing emergency has disclosed that provisions of obligations which purport to give the obligee a right to require payment in gold or a particular kind of coin, or currency of the United States, or in an amount in money of the United States measured thereby, obstruct the power of the Congress to regulate the value of the money of the United States, and are inconsistent with the declared policy of the Congress to maintain at all times the equal power of every dollar, coined or issued by the United States, in the markets and in the payment of debts. Now, therefore, be it

"Resolved by the Senate and House of Representatives of the United States of America in Congres...