Willis v. Eastern Trust Banking Company (167 U.S. 76)

This was an action of forcible detainer, brought September 17, 1894, by the Eastern Trust & Banking Company against Willis and Johnson, before a justice of the peace in and for the District of Columbia, to obtain possession of certain real estate in said district. The defendants filed a plea of title, whereupon the case was certified to the supreme court of the district for trial. Rev. St. D. C. c. 19, §§ 677, 691.

The plaintiff, in compliance with the rules of that court, filed therein, October 5, 1894, 'a declaration making demand for the premises, and with a description thereof as in ejectment.'

The parties submitted the case to the court for its determination, without a jury, upon an agreed statement of facts, in writing. It therefrom appeared, in substance, that the Eastern Trust & Banking Company was a body corporate, organized under the laws of the state of Maine, and having its principal place of business in the city of Bangor, in that state. The American Ice Companyy also a body corporate, organized under the laws of the state of Maine, and doing business therein and also in the district of Columbia, on December 2, 1889, executed and delivered to the trust company a certain deed of trust in the nature of a mortgage, upon certain real estate described therein, a part of which was situated in the city of Maine, and the remainder in the city of Washington, to secure the payment of its bonds, of various denominations, aggregating $40,000, payable to the trust company or bearer, in equal installments of $5,000 each, in 3, 4, 5, 6, 7, 8, 9, and 10 years after date, with interest at the rate of 6 per cent., eviednced by certain coupons. The deed of trust was duly recorded in the records of the District of Columbia. It bore the impress of the corporate seals of the American Ice Company and of the trust company and it was admitted that the seals were affixed thereto before the execution and delivery thereof, but that the recorder of deds failed to note the same upon the records. The bonds were executed and delivered in due form of law to the trust company, and by it delivered to certain parties, who took them for value, in the regular course of business, before maturity, and who now held and owned them, except so far as the first installment thereof and interest had been paid. The installment of bonded indebtedness which became due in 1893 was not paid, nor was the interest then falling due, nor had either of said sums, or any part of them, been paid or satisfied in any manner. The parties holding the bonds had not, nor any of them, waived their rights to payment in accordance with the tenor and effect of the bonds and deed of trust, by the terms of which the residue of the bonded indebtedness, to wit, the sum of $35,000, together with accrued interest thereon, was, at the commencement of the suit, due and payable.

On October 13, 1893, the ice company made an assignment of all its property for the benefit of its creditors to Johnson, who accepted the trust, and entered upon its discharge. Subsequently, as such an assignee, he leased that portion of the real estate situated in Washington to Willis, who entered and took possession thereunder, and retained possession at the time of the trial.

This lease was in writing, and bore date January 29, 1894, and was for a period of one year from that date, at a rental of $130 per month. After the default in the payment of the second installment of bonds and of the interest had continued for a period of more than 90 days, the bondholders, or those holding more than 50 per cent. of the value thereof, directed the trustee to proceed in the execution of the trust in accordance with its terms and provisions, in pursuance of which direction, the trust company, on July 30, 1894, caused a 30 days' notice to quit to be served upon Johnson and Willis, on the theory that they were statutory tenants by sufferance under the law, and that the instrument securing the indebtedness created the relation of landlord and tenant between the trust company and them, and thereafter, namely, September 17, 1894, the trust company caused the proper summons to be issued by a justice of the peace against Willis and Johnson, who appeared in response thereto, as before stated.

After the default, and in pursuance of the direction of the bondholders and of the powers conferred upon and vested in the trust company by the deed of trust, the trust company advertised the real estate for sale in accordance with the requirements of the deed of trust, and exposed the same for sale at public auction in the city of Bangor, at which sale a committee, acting for the bondholders, purchased the lands embraced in the deed of trust for the benefit of the bondholders; but the terms of the sale had not yet been complied with, and no deed had been made to the purchasers, because it was understood and agreed between them and the trust company that the trust company should first obtain possession of the property.

Judgment was rendered in favor of Willis and Johnson by the supreme court of the District, and, the case being carried to the court of appeals for the District of Columbia, that judgment was reversed, and judgment in favor of the trust company directed (6 App. Cas. D. C. 375), whereupon Willis and Johnson brought the case to this court on writ of error.

Calderon Carlisle and William G. Johnson, for plaintiffs in error.

G. F. Leighton, for defendant in error.

Mr. Chief Justice FULLER, after stating the facts in the foregoing language, delivered the opinion of the court.