Wooten v. Marshall

• Decision Date: 29 June 1957
• Citation: 153 F. Supp. 759
• Parties: James A. WOOTEN, Plaintiff, v. Raymond W. MARSHALL, Defendant.
• Court: U.S. District Court — Southern District of New York

153 F. Supp. 759

James A. WOOTEN, Plaintiff, v. Raymond W. MARSHALL, Defendant.

United States District Court S. D. New York.

June 29, 1957.

Schwartz, Nathanson & Cohen, New York City, for plaintiff, Isadore H. Cohen, George H. Schwartz, Paul E. Gelbard, New York City, of counsel.

Harper & Matthews, New York City, for defendant, Harold Harper, Vincent P. Uihlein, New York City, of counsel.

FREDERICK VAN PELT BRYAN, District Judge.

This is an action upon an alleged agreement of joint venture concerning the purchase of a 160 acre tract of land located in Anchorage, Alaska and its resale. The complaint seeks a decree declaring that there was such a joint venture between the parties, establishing the rights of the plaintiff in the venture and compelling an accounting of the venture by the defendant.

The answer denies that there was an agreement of joint venture and alleges, by way of separate defenses, that the agreement between the parties is unenforcible under the Alaska and New York statutes of frauds.

Defendant now moves, pursuant to Rule 56, Fed.Rules Civ.Proc., 28 U.S.C.A. for summary judgment upon the sole ground that recovery is barred by these statutes of frauds. The motion is predicated upon the testimony of the plaintiff contained in his deposition taken by defendant before trial. For purposes of the motion these facts, as so testified to by the plaintiff, must be deemed to be true. They are as follows:

In 1947 plaintiff was president, and defendant was chairman, of the Board of Alaska Airlines, Inc. Plaintiff spent considerable time in Alaska and defendant for the most part remained in the United States.

In early June of 1947 plaintiff, while searching for a home in Alaska for his family, came across a 160 acre tract of land near Anchorage known as the Young Homestead. The property bordered on Cook Inlet. A portion of it on a bluff had a splendid view of the inlet and Mt. McKinley, and the balance, comprising the major portion of the property, was largely lowland.

Plaintiff ascertained that the property was owned by the heirs of the Young Estate who resided in Portland, Oregon, and it appeared to him that it could be purchased for $20,000 to $30,000. About 40% of the property was under lease to the Civil Aeronautics Authority which had several years to run.

Late in June 1947, when next in New York, plaintiff brought the property to defendant's attention, emphasizing the exceptionally attractive view from the bluff and the desirability of building a home there. Both defendant and his wife expressed a desire to view the property and defendant suggested that on his next trip to Alaska he might try to locate the Young heirs in Portland.

In August 1947 defendant, en route to Alaska with his wife, telephoned plaintiff from Seattle advising that he had located the Young heirs and arranged with plaintiff for their transportation to Alaska. Defendant and his wife then proceeded to Anchorage and plaintiff took them to see the property.

A number of discussions between the parties ensued, in some of which their wives participated. They talked of the possibilities of building homes for themselves on the bluff and of developing the balance of the property as sites for houses and apartments for Alaska Airlines personnel. There was a severe shortage of housing facilities in the area and plaintiff had already consulted an architect concerning a possible housing development on the property.

As a result of these discussions the parties agreed that they would offer the Young heirs $20,000 for the property, to be purchased on a 50-50 basis; that the choice footage on the bluff, which was only a comparatively small portion of the acreage, would be divided equally between them and would not be sold except for their own occupancy by either without a first offering to the other; that the balance of the tract would be developed and exploited for the joint account of the parties; and that the profits and losses would be shared equally. There was no definite understanding as to what roles the respective parties would take in furtherance of the enterprise, but it was understood that each would communicate to the other with respect to any possibilities for exploitation and profit that might appear.

In the meantime two of the Young heirs arrived in Alaska and the parties jointly undertook negotiations with them for the purchase of the property for $20,000, informing them that they intended to purchase it on a partnership basis. The offer was tentatively accepted subject to the approval of the other Young heirs.

At the close of the summer, before defendant left for the United States, it was understood that he would stop in Portland to close the deal. Plaintiff tendered defendant his check for $10,000, but defendant declined it stating that if he needed the money when the deal was closed he would call upon the plaintiff for it. This was quite satisfactory to plaintiff who had been arranging to borrow the money to cover his share of the purchase price, and who also was in the process of making arrangements with defendant for the purchase from him of a substantial block of Alaska Airlines stock.

In September 1947 defendant closed the deal for the property, paid the full purchase price of $20,000, and received a deed to the property solely in his own name.

On October 30th plaintiff wrote to defendant as follows:

"I was quite surprised when I examined the warranty deed and found it is made out only in your name and not in our joint names. Does this mean I am no longer in this deal? I can let you have my check for $5,000 and I will sign a note for the other $5,000 to mature within one year if this is satisfactory. You may hold the joint deed as security and this should certainly be protection enough for this loan. May I hear from you?"

Three days later defendant sent a memorandum to plaintiff stating:

"I have your memo of October 30.

"I have paid the full price for the Young property and it is my understanding that whatever profits accrue they are to be divided equally between you and me. However, if the investment should remain open for a considerable period of time I feel that an interest charge would be proper.

"If you would prefer some other plan please do let me know."

After this exchange plaintiff saw defendant again in New York. Defendant told plaintiff that if the property were not disposed of within two or three years, and he had to carry it for any length of time he thought he was entitled to interest. However, if plaintiff paid his half of the purchase price within a couple of years there would be no interest charge. Plaintiff agreed to this arrangement.

At various times the plaintiff engaged and paid architects and surveyors for services in connection with the property and went to the property with them, participated in hearings with respect to tax assessments on the property, and exhibited the property to potential buyers. He also met with Civil Aeronautics Authority representatives several times with respect to the cancellation of its lease, and with respect to possible condemnation of the property. At one point he received an offer of $50,000 for the property and transmitted it to the defendant, though the offer turned out to be ephemeral. On July 15, 1948 plaintiff received a telegram from Aeronautical Radio, Inc. regarding a proposed lease for a transmitter station on the property. In December 1948 defendant wrote to plaintiff as follows:

"Referring to proposed contract with the Aeronautical Radio, Inc. and your telegram of July 15, 1948, will you kindly advise me at your convenience whether we have a deal with that company, and if so what are the terms and when do they make the payments."

Nothing came of this. In November 1949, when plaintiff left Alaska Airlines, defendant told him that it would be unnecessary for him to pay his $10,000 share of the purchase price since he would need his capital for a new venture and that they could take the matter of this payment up at a later date, provided that the property had not been liquidated in the meantime. Shortly thereafter plaintiff left for the Middle East where he spent much of his time for the next two years.

In the fall of 1952 plaintiff was informed that defendant had sold a portion of the property for $125,000 to the Anchorage School District. Later defendant conveyed certain easements in the property to the Alaska Roads Commission for considerations which do not appear.

After plaintiff learned of the School District sale he saw defendant and asked for his share of the profits. Defendant agreed he was entitled to a division of the profits but refused to pay until plaintiff straightened out alleged debts he owed Alaska Airlines. Other demands by plaintiff from time to time for payment of his share were refused by defendant on various pretexts and in 1954 defendant finally made it plain that he would not pay plaintiff without litigation. Plaintiff then brought the present action.

On this motion defendant urges that, assuming these to be the facts, plaintiff is barred from recovery as a matter of law. He contends first that the agreement between the parties, as it appears from plaintiff's testimony, is not one for a joint venture as the complaint alleges but for the purchase and division of real property or the transfer of an interest therein, and therefore comes within the statutes of frauds pleaded as a defense. Secondly, defendant argues that the only writings which it appears were exchanged between the parties are insufficient to satisfy the requirements of the statutes since they fail to contain the elements of the true agreement between the parties and are therefore unenforcible.

Neither side goes into the question of whether the Alaska or New York statute of frauds applies.¹ However, since the statutes in both jurisdictions and the holdings and reasoning of the cases interpreting them, in so far as they relate to this situation, are...