Seymour v. Freer (75 U.S. 202)

APPEAL from the Circuit Court for the Northern District of Illinois.

On the 9th of May, 1835, Henry Seymour, residing at Utica, New York, and Jeremiah Price, residing at Chicago, Illinois, entered in New York, into a contract, thus:

'The said Price agrees that he will forthwith devote his time and attention, and exercise his best judgment, in exploring and purchasing land, to an amount not exceeding $5000, in the States of Illinois, Indiana, and Ohio, and in the Territories of Michigan and Wisconsin, or in such of them as he may find most advantageous to the interest of said Seymour, in whose name the contracts and conveyances shall be made and taken. The purchases shall be made after full and careful searches and explorations, for the most profitable investments, on or near the sites or expectant sites of towns or places of business, and, in general, in tracts of ground of moderate extent; and the said Seymour covenants, on his part, to furnish $5000 for the above contemplated purchases, and that the lands, purchased as aforesaid, shall be sold within five years from the present time and out of the profit which may be made by such purchase and sale (after charging to the investment, the taxes and other charges, if any, together with 7 per cent. interest on the investment and the charges last mentioned), there shall be paid to the said Price, one-half of the same, which one-half of the profit shall be in full of his services and expenses of every kind in making the aforesaid explorations, searches, and in doing all such other things as may be requisite and proper in making the contemplated purchases. It is understood that the purchases shall be made during the present year, and that no payment for services or expenses will be made by said Seymour, except from the profits made as aforesaid.'

Contemporaneously with the making of the contract, Seymour placed into the hands of Price the $5000 mentioned in it. And between June and October, 1835, Price bought about thirty pieces of land in Illinois, thus using all the money.

The lands were unproductive, and consisted, in their sundry parcels, of two thousand four hundred and forty acres, and some village lots, situate in Joliet. It was all conveyed to Seymour.

In August, 1837, Seymour died; he left two sons, viz., Horatio and John F., and four daughters, two of them being, at his death, and at the expiration of the five years mentioned in the contract, infants. By his will, he appointed Horatio, John F., and another, his executors; and his real estate, under the directions of his will, went to his heirs, except the share of one daughter, which was vested in trustees.

No part of the land was sold during the five years specified in the contract. It was admitted of record that, at the expiration of the time for sale, stated in the contract (May, 1840), the lands were unsalable, and that it was entirely uncertain how much they could have been sold for, or whether they would ever have brought enough to repay the original investment and interest.

During the five years, there were no taxes upon, or expenses as to the lands purchased, except taxes upon the lots in Joliet, amounting, in all, to $19.33. These were paid by Price, with money furnished by Seymour. Subsequently to the five years, Price, till his own death, in 1854, paid the taxes on the lands; Seymour's executors furnishing him the money to pay them, as also to pay any small expenses he was put to.

The accounts of Price (independently of the outlay for the purchase, and in which all the taxes and expenses just spoken of were entered), began March 4th, 1837. They were headed:

'Account of payments on account of H. Seymour.'

They began 24th December, 1841, comprised eighty-four items amounting to $2054, and ran to near the date of Price's death in July, 1854, terminating 16th June, 1854. The items were chiefly of taxes on the different pieces of property. But there were several charges for postage on letters, for a small item of travelling expense in paying taxes, for interest on small sums advanced to pay taxes, &c., and one in March, 1845, of $1.53 paid as a charge for advertising a county tax, 'because,' said the account, 'funds not sent.' But there was no charge or claim for services by Price or any other person as agent. In fact, in one or more instances he apparently suffered lands to be sold for taxes. At the date of Price's death all Price's charges for taxes paid and for these small outlays had been settled; Seymour's executors having sent him, from time to time, and apparently as informed of them, checks for the sums due. Between December, 1841, and Price's death in July, 1854, the executors had thus sent him about sixteen different checks.

Price, as already said, died in July, 1854, in Illinois. John High became his administrator. High now looked after the lands; under what exact source of interest was a matter disputed. His accounts of money received and of lands sold were thus headed:

'Account of money received from heirs and devisees of Henry Seymour, deceased (after his decease and after decease of Jeremiah Price), by John High, Jr., as agent for heirs and devisees, to pay taxes and other expenses on lands aforesaid.'

'Account of sales made by John High, Jr., as agent for estate, heirs and devisees of Henry Seymour, deceased, from lands purchased by Jeremiah Price, deceased.'

In 1855 and 1856, High negotiated sales of portions of the land, which were consummated by contracts executed by the heirs and the purchasers. The sales were profitable. Two hundred acres were sold for $69,200; and High now, as administrator of Price, alleging that the original outlays, costs, and interest had been repaid, claimed one-half the surplus; contending that he was entitled to it under the contract of 1835. The representatives of Seymour not being of this opinion, High (who dying in the course of the suit was succeeded by Freer), now, February, 1857, filed a bill in the court below against all the executors of Seymour, his heirs-at-law, and the trustees of the cestui que trust's daughter.

The bill set out the contract, stated that no sales had been made within the five years, and that Price had not insisted on their being so made, because it was thought that the interest of all parties would be promoted by holding on for better times, but that nothing was done to release Seymour or his representatives from their original obligations; that High, after Price's death, had acted at agent of Seymour's representatives, and effected sales; and that the original $5000, interest, &c., being all refunded, and the surplus being clear profits, he, High, as administrator, claimed one-half of it for the estate of Price, and that he had always been and was now ready to agree upon and define the relative rights of the two estates, and divide the profits, but that in consequence of the number of the parties interested, on Mr. Seymour's part, the distance of their residence from the subject-matter, the death of the original party, and the intervention of descents, marriages, &c., and from the refusal of several of the parties so in interest to admit Price's rights, he was afraid that in case the residue of the lands should be sold out, and the whole converted into money and be allowed to go into the hands of Seymour's representatives, he would, owing to their number and to the fact of their residence being without the jurisdiction of the courts of the State where the whole profits had been made, lose Price's share; on which account as he conceived the interposition of a court of equity was necessary. Price's heirs were not made parties to the bill.

The answer, admitting the agreement, purchase, and advance of money, stated that the lands were situated near Price's residence, and being wild required no particular care; that during the five years Price did nothing except what was required of him by his agreement; that at the death of Seymour one of the defendants was a married woman, and two others were infants. It denied that the omission to sell during the five years was for the benefit of the defendants, but averred, on the contrary, that both Seymour, in his lifetime, and the defendants, afterwards, had at all times been anxious to sell if they could do so without loss. It denied that Price did not waive a right to have the property sold within five years, but averred, on the contrary, that he did. It averred, moreover, that Price always treated the defendants as the sole owners, and solely entitled to the proceeds, and never pretended to have any interest; that he refused to pay the taxes or any portion of them; 'but claimed that he ought to be allowed a reasonable compensation for his services as agent, and not under the contract;' that the defendants had always been willing to allow him such compensation. It set up further that by the legal effect of the agreement Price's interest was to be half the profits to be got upon a sale to be made in five years, and averred that no profits on sales could be made or were made within that time; and averred that the defendants had in no way continued or extended the agreement with Price.

As to any claim for a breach of the agreement in not selling in five years, the answer pleaded the statute of limitations.

As to the agency and the expenditures of High, it stated that after the death of Price he, High, was requested by Horatio and John F. Seymour to find purchasers for the land if he could; but that he had no other power respecting the lands; that the contracts for the parcels sold were executed by the defendants and not by High; that the negotiations for such sales were made by the defendants through High, and were subject to the ratification of the defendants, and that High was not employed in consequence of any relationship which he had to Price or to his estate, or on account of the agreement between Henry Seymour and Price.

Finally, it denied that any cause existed for the interposition of a court of equity, submitted that the defendants were improperly joined, for the want of a common interest among them, and asserted that no receiver was wanted, the devisees of Seymour being all well known as citizens of New York, and fully competent to dispose of the lands without the aid of a receiver, and not wanting in ability to refund, &c.

General replications were filed. No proofs were taken, nor did it appear from the evidence, that any letters from either side were called for or produced. Certain facts were admitted.

An interlocutory decree making a reference to a master adjudged that Price, by virtue of the agreement of 1835, was 'entitled, as an equal copartner' in the property to one equal half of the net profits made, or to be made from the sales; that the lands having been purchased by Price as an 'adventure or investment on joint account of himself and said Seymour,' the sales already made and the sales yet to be made were to be deemed and taken as made, and to be made 'on joint account' of the estates of Seymour and Price.

The final decree recited the former decree and a master's report made to enable the court to administer the property on 'just partnership principles,' and, after making a disposition of the proceeds of sales of the lands, it provided that 'the balance which shall remain thereof being clear profits of the partnership land purchase and sale up to the present time, be equally divided between the parties in this suit: one-half to the complainant, and the other half to be held by the heirs and devisees of Henry Seymour, deceased.' And it spoke of 'closing and selling the partnership accounts so far as the sales and collections have progressed.'

The solicitor of the complainants, by consent of parties, was appointed receiver, with an agreement that he might sell at private sale.

The representatives of Seymour brought the case by appeal here.

Messrs. Kernan and Denio, for the appellants:

This contract, by its terms, plainly excludes implication that the lands are subject to the rules of law applicable to partnership property. The view of the court below is directly in the face of the authorities, including one in this court.

The main question then is the interpretation of the contract and whether, no sales having been practicable within the five years, the old arrangement either remained or was re-established?

The contract is one sui generis. The year in which it was made was an era of great activity in settling lands in the West. 'Sites or expected sites of towns or places of business' were sought for with avidity, and they doubled in value or increased in a yet greater ratio in a few months, in the hands of the possessors. Mr. Seymour was disposed to enter into this field with a considerable sum of money, and Price, who it is to be presumed had local knowledge and an aptitude for selecting lands, was willing to aid Seymour with his local knowledge and active agency for a collateral consideration precisely defined. The question was, how this consideration should be arranged. It was resolved that Seymour should become the purchaser with his own moneys, and Price the purchasing agent, and that the latter should receive (instead of a per diem allowance, or a commission on the amount of the investment, or the interest of a partner in the ultimate profit or loss), one-half of the profits to be got on a sale of the lands within five years, and should have no such interest as would in any event subject him to a loss or compel him to advance money. This, at least, is what is specified in precise language. The enterprise was to be rapidly conducted and speedily wound up. Price was to set about the purchases forthwith. The purchases were all to be made in the then present year, and the lands were all to be sold within five years; and the compensation of Price was expressly made to depend upon, and be measured by the results of a transaction thus to be carried on and consummated. And to preclude any pretence of a claim in any other aspect, it is twice inserted that his compensation is to be limited to a moiety of the profits thus arising, and that he is to have no other compensation.

Such a contract was, in that day, a reasonable one, and there is no ground for believing that the parties meant something beyond what they said.

If this is so, the land having become unsalable in 1840, the representatives of Price had not, at the commencement of this suit, any interest in the proceeds of the land subsequently sold or in the unsold lands remaining.

If, however, the representatives of Price have any interest in the profits, the remedy is by an action of law upon the contract. There is no suggestion that if in such an action the plaintiff establishes his rights to a half of the profits, the defendants are not able and willing to pay him.

The rights of Price and his representatives were barred by the lapse of time.

Any personal action for not selling in five years was long since barred by the statute, as the answer sets up.

The remedy in equity, if there was any, is sought after the lapse of so long a period that upon settled principles of equity the demand will not be enforced. It will be considered a stale demand.

In addition to the defence of a bar by the statute, and to the defect of misjoinder of Seymour's executors in a matter where they had no interest, the bill omits to make Price's heirs a party. If Price's estate has any interest in the matter, they are chiefly interested and should be parties.

Price died in July, 1854, more than fourteen years after the alleged default in selling. He never, during his lifetime, once requested that the lands should be sold, or made any claim to an interest in them. The heading of the accounts negatives all such ideas. The fact that he attended to the payment of taxes with money remitted by Mr. Seymour's representatives, is quite consistent with the character of an agent, and that he let the lands be sold rather than pay taxes himself, is consistent with no other idea. High's accounts show that he was employed by the heirs and devisees of Seymour as their agent. The fact that they both acted distinctly as agents, rather rebuts the idea of any other relation. It is a circumstance of weight that a peremptory sale at any time during these twenty years would have resulted in a loss which Seymour's representatives must have borne alone, as Price and his representatives were in no way bound to contribute; as it also is that during all this time the burden upon the devisees of Seymour was increasing at a rapid rate by the accumulation of interest and taxes and the expenses of agency. Good faith required, on both accounts, that Price should have advised the other party that he claimed a continuing interest, if such was the fact. All idea of a continuance of the contract by mutual consent is thus repelled. But, as the contract looked solely to a sale in five years, and limited the interest of Price to the profits to be made upon such a sale, it required a plain understanding on both sides to continue and extend the arrangement to sales to be made afterwards.

By the decree the heirs of Seymour are deprived of all authority and control over the lands; title is taken from them and vested in a receiver. But there is no allegation that Seymour or his heirs have violated their duty under the contract; nor that they acted improvidently in disposing of the land sold; or that there is any apprehension that they will not dispose of the residue for the best interest of all concerned. They reside where Mr. Seymour did when the contract was made, and are responsible persons. The only ground of complaint is, that the appellants deny that, by the contract, they are bound to pay over to the representatives of Price a share of the proceeds of the land after the same are sold. But this is not an adequate cause for equity to compel a specific performance. Much less does it authorize the court to take the property from the appellants and place it in the hands of a receiver, to be sold by him.

Mr. Mather, contra, argued at length that the case was one of partnership, citing numerous authorities, and that at all events the evidence showed that both Price and High regarded Price as interested, he having no compensation otherwise than in an ultimate share of profits for his many years of service; that selling had gone off without default on either side; the thing being nursed along till a good price could be got; that the case being one of partnership and trust, chancery had special jurisdiction; that the statute did not run against a trust; that there were no laches; and that the relief given was but adequate and proper.

Mr. Justice SWAYNE delivered the opinion of the court.