George Starkweather v. Herbert Jenner

• Decision Date: 28 February 1910
• Docket Number: No. 114,114
• Citation: 17 Ann.Cas. 1167,30 S.Ct. 382,216 U.S. 524,54 L.Ed. 602
• Parties: GEORGE B. STARKWEATHER, Appt., v. HERBERT W. T. JENNER et al
• Court: U.S. Supreme Court

216 U.S. 524

30 S.Ct. 382

54 L.Ed. 602

GEORGE B. STARKWEATHER, Appt.,

v HERBERT W. T. JENNER et al.

No. 114.

Argued January 28, 1910.

Decided February 28, 1910.

Mr. Richard P. Evans for appellant.

Messrs. B. F. Leighton and R. Golden Donaldson for appellees.

Mr. Justice Lurton delivered the opinion of the court:

The appellant, George B. Starkweater, was the owner of a parcel of unimproved land known as the Crescent Heights, in Washington, District of Columbia, composed of two contiguous lots, one of 7 and the other of 3 acres. In January, 1892, pursuant to a plan arranged between himself and certain persons associated with him, and styled herein the syndicate he conveyed this tract to defendants Croissant and Johnson, as trustees, for the benefit of the persons who should contribute to the purchase price, as tenants in common, in the share and proportion in which they respectively contributed, with power to control, manage, lease, sell, and convey, in their discretion, as should be desirable or advantageous to the parties interested. Those contributing or proposing to contribute agreed among themselves, by a separate paper, that the price, including the discharge of encumbrances resting upon the property, should be $75,000, divided into shares of $2,500 each, and each person accordingly subscribed for such number of shares as they elected to take, agreeing that Croissant and Johnson should represent them as trustees in the purchase, with full power to manage, sell, and convey, receiving a commission for their service. Among those so contributing originally, or by substitution, were the trustees Croissant and Johnson, the appellant Starkweather, who was to receive, and did take, eleven shares, fully paid up, as and for part of the purchase price, and the appellee Jenner, who ultimately came to own four of such shares. The full number of thirty shares contemplated were never subscribed, six remaining unsold in the hands of the trustees. This fact, from whatever cause, seems to have led to the inability of the syndicate to pay off the encumbrances which were to be assumed and paid off as part of the price. Among these encumbrances were several deeds in trust or mortgages securing obligations of the vendor appellant.

The certificates to subscribers were issued by Croissant and Johnson, and recited, among other things, that they held the property in trust, and that the holder was a contributor to the purchase price to the extent of $2,500, and the owner of an undivided one-thirtieth interest, and that such interest 'shall at all times be subject to assessment for its proportionate part of money necessary to pay expenses incurred in the execution of the trusts as provided in the deed to said trustee, . . . and in default of such payment the said trustees . . . are hereby authorized to sell the interest of such person so in default,' etc.

Out of the money paid in by the subscribers, a part was used by the trustees in paying off encumbrances, keeping down interest, and in other expenses, but something like $11,000 was paid over in money to or on account of the vendor, Starkweather.

Among the trusts upon the property was a deed in trust upon the 7-acre parcel to the appellees Duval and Cole, as trustees, to secure an obligation created by Starkweather for $7,553.34 to a Mr. Gaither, executed January 29, 1889, and maturing in four years. In 1893 this debt matured. By agreement, the enforcement of the trust was postponed upon payment of interest. But, finally, there was a default and a sale directed by Gaither. The property was, accordingly, advertised by the trustees and sold at public outcry in 1897 and bid in by one Ricker, acting for and as agent of the appellant. The time for complying with the sale by Ricker was extended upon the payment by appellant of $300 for each of two extensions. Default in complying with the terms of sale was, however, again made, and the property readvertised. Appellant attempted to forbid such resale, and filed a bill for that purpose, which was not dismissed until February, 1898, when the property was again advertised and offered for sale by Duval and Cole, the trustees, and knocked down to one Silver, acting as an agent for Starkweather. The terms of this second sale were not complied with, and the property was at once recried and sold to the appellee Jenner for $17,100, acting, as it turned out, for himself and certain others, who, like Jenner, were members of the original purchasing syndicate, or holders of certificates acquired later from those who were. Jenner complied with the terms of sale and paid the full purchase money and accepted a deed from the trustees. After paying off the Gaither debt, the remainder of the price paid by Jenner was distributed to other lienors, under a bill in equity filed for that purpose, under which final decrees have long since been made and the trustees exonerated.

The object of the present bill is to set aside this deed by Duval and Cole to the appellee Jenner, and revest the title in Croissant and Johnson as trustees for the syndicate; or, in the alternative, declare Jenner a trustee holding the 7-acre parcel, after his reimbursement, for the benefit of the syndicate subscribers.

The charges of the bill abound in accusations of fraudulent collusion between Jenner and the other appellees to bring this 7-acre lot to sale under the Duval and Cole trust, and thereby the elimination of appellant as the largest holder of certificates in the syndicate. It is among other things said that Croissant and Johnson wilfully suffered a default. That they had certificates unsold and money in their hands and power to assess the members of the syndicate to raise means to pay off the encumbrance and thus save the property for the benefit of all...