Shaeffer v. Blair

• Decision Date: 01 May 1893
• Docket Number: No. 178,178
• Citation: 149 U.S. 248,13 S.Ct. 856,37 L.Ed. 721
• Parties: SHAEFFER v. BLAIR
• Court: U.S. Supreme Court

149 U.S. 248

13 S.Ct. 856

37 L.Ed. 721

SHAEFFER

v BLAIR.

No. 178.

May 1, 1893.

This was a suit in equity by John I. Blair against Samuel C. Shaeffer for specific performance of a contract. There was a decree for plaintiff in the court below, (33 Fed. Rep. 218,) and defendant appeals. Reversed.

Statement by Mr. Justice GRAY:

This was a bill in equity, filed December 8, 1885, by John I. Blair, a citizen of New Jersey, against Samuel C. Shaeffer, a citizen of Ohio, and other persons, citizens of other states, claiming under him, setting forth a contract in writing between the plaintiff and Shaeffer, dated February 4, 1884, (which is copied in the margin,)¹ and praying that Shaeffer might be ordered to convey to the plaintiff the lands described in that contract, and that it be adjudged that the defendants had no title or interest therein, and for further relief.

At the hearing in the circuit court, upon pleadings and proofs, the case appeared to be in substance as follows: In February, 1884, Shaeffer obtained and received from the plaintiff sums of money amounting to $92,882.70, upon fraudulent representations that they were needed to pay for the lands described in the contract; and, within a month after its date, procured conveyances of those lands to himself, by paying therefor sums amounting to $59,789.30 only, and paid $500 for taxes and other necessary expenses, leaving the sum of $32,593.40 due to the plaintiff; and afterwards refused, on demand, to convey the lands to the plaintiff.

The three tracts of land described in the contract contained respectively about 36 1/2 acres, about 138 acres, and 69 acres, near Kansas City, in the state of Missouri, and were worth more at the time of the contract than the sums paid by the plaintiff, and greatly increased in value afterwards.

In an action at law against Shaeffer, submitted to the circuit court without a jury at the same time with the present suit in equity, the plaintiff recovered judgment for the aforesaid sum of $32,593.40. Upon that judgment no writ of error was sued out.

In the present suit the circuit court held that the contract sued on created no partnership between the plaintiff and Shaeffer, and conferred on Shaeffer only the right of an agent to sell, with a share in the profits by way of compensation; and that Shaeffer, by his fraudulent conduct, had forfeited all his rights under the contract, including not only the 5 per cent. commission on sales, but the share of 40 per cent. in the net profits remaining after payment of the sums advanced by the plaintiff; and entered a decree for the plaintiff as prayed for. 33 Fed. Rep. 218. From this decree Shaeffer appealed to this court.

Richard A. Harrison and C. D. Martin, for appellant.

Chas. O. Tichenor, for appellee.

[Argument of Counsel from pages 252-255 intentionally omitted] Mr. Justice GRAY, after stating the case, delivered the opinion of the court.

The decision of this case turns upon the construction of the contract of February 4, 1884, by which the parties agreed to buy certain lands, and to sell them again for the joint benefit of both.

The provisions of that contract were, in substance, that those lands, in the greater part of which Shaeffer already had an equitable title under agreements of third persons to sell and convey them to him, should be purchased for the mutual interest of the parties; that the legal title in all the lands should be taken in Shaeffer's name, and be conveyed by him to Blair; that Blair should advance the sums required to enable Shaeffer to pay the purchase money of the lands, as well as the necessary expenses of preparing them for sale and selling them, and should be repaid his advances, with interest, out of the net proceeds of sales; that Shaeffer should stake out the lands for sale, make the necessary improvements, sell them, retain a commission of 5 per cent. upon the gross amount of sales, and, until Blair should should have been reimbursed for his advances, deposit the rest of the proceeds in a bank to Blair's credit; that the expenses of improving and selling the lands, the time within which they must be prepared for sale, the price at which they might be sold, and the bank in which the proceeds should deposited by Shaeffer, should be mutually agreed upon between him and Blair, and all contracts of sale by Shaeffer should be approved by Blair; and that, when Blair should have been reimbursed for all his advances, 'then the remainder of the property shall belong 60 per cent. to said Blair and 40 per cent. to said Shaeffer,' and be divided between them accordingly, either by Blair's conveying the title in two fifths of the lands to Shaeffer, or by Shaeffer's selling the lands and paying 60 per cent. of the proceeds to Blair.

The contract evidently contemplated that, while the sales to be made by Shaeffer should be subject to Blair's approval, no sales should be made by Blair without Shaeffer's consent. This clearly appears from several provisions of the contract. It is by Shaeffer, or, as said in the last clause of the contract, 'by said Shaeffer or assigns,' that the lands are to be staked out into lots and prepared for sale. 'Said Shaeffer is to deduct and receive five per cent. commission upon gross sales of all lots sold at the agreed price of over made by said Blair and Shaeffer;' that is to say, 'of all lots sold' by Shaeffer 'at the agreed price or over,' the price (not the sales) being 'made by said Blair and Shaeffer.' The provision that all contracts of sale shall be made in triplicate, and approved in writing by Blair, and one copy retained by Shaeffer, clearly implies that all contracts of sale shall be initiated by Shaeffer; and after Blair shall have been reimbursed his advances, then, if the lands are not themselves divided between them, it is Shaeffer who is to sell them and divide the proceeds.

In short, Shaeffer was to contribute to the venture his equitable title in the greater part of the lands to be purchased, as well as his own services. Blair was to contribute all the money required to carry out the enterprise. The legal title was to be taken in Shaeffer's name, and conveyed by him to Blair. Shaeffer was to sttend to preparing the lands for sale, and to sell them, subject to Blair's approval. Shaeffer was to receive a commission of 5 per cent. on the gross amount of sales. Out of the rest of the proceeds Blair was to be repaid his advances, and, after Blair had been reimbursed, the property was to belong three fifths to Blair and two fifths to Shaeffer, and to be divided between them accordingly, either in lands or in money.

Taking into consideration the whole scope of the contract, and the fact that before it was made Shaeffer had an equitable interest in the greater part of the lands, which was in fact, and was evidenly considered by both parties to be, of greater value than the price which he had agreed to pay for them; that the title to all the lands was to be taken in Shaeffer's name in the first instance, and to be conveyed by him to Blair; and...