Willis v. Eastern Trust Banking Company (169 U.S. 295)

This was a summary process to recover possession of land in the city of Washington, under section 684 of the Revised Statutes of the District of Columbia, commenced September 17, 1894, by complaint before a justice of the peace, by the Eastern Trust & Banking Company against Edward M. Willis and William G. Johnson, each of whom pleaded title in Johnson; and the case was thereupon certified to the supreme court of the District of Columbia.

In accordance with a general rule of that court requiring the plaintiff in such a process to file 'a declaration making demand for the possession of the premises, with a description thereof, as in ejectment,' the plaintiff filed a declaration, demanding possession of the land, describing it by metes and bounds, and alleging that the defendants entered thereon, and unlawfully ejected the plaintiff therefrom, and unlawfully detained the same from the plaintiff.

The parties submitted the case to the determination of the court, without a jury, upon an agreed statement of facts, in substance as follows:

The plaintiff was a corporation organized under a charter granted by the legislature of the state of Maine, by which it was located at the city of Bangor, in the county of Penobscot, and was authorized to establish agencies elsewhere in that state. Johnson was sued as assignee of the American Ice Company, a corporation of Maine, and doing business at Bangor, and also at the city of Washington; and Willis was sued as the tenant or lessee of Johnson.

On December 2, 1889, by an indenture, in the nature of a mortgage, executed in Maine, and duly recorded in that state and in the District of Columbia, the American Ice Company conveyed to the E stern Trust & Banking Company, 'and its successors, in trust with full power of succession to and enjoyment of the franchises of the corporation, all its real estate, wharves, ice houses, boarding house, stables, boilers, elevator, and machinery, situated in the town or Hampden, in said county of Penobscot, and in the city of Washington, in the District of Columbia, together with, all and singular, the privileges and appurtenances thereto belonging,' to secure the payment of bonds of the ice company to the amount of $40,000, payable to the trust company, at its office in Bangor, in equal installments of $5,000 each, in 3, 4, 5, 6, 7, 8, 9, and 10 years after date, with interest. The deed provided, among other things, as follows:

First. 'Until default shall be made in the payment of the principal or interest of said bonds, or some of them, or in the maintenance of insurance, or in the payment of taxes or assessments, as herein provided, or until default shall be made in respect to something by these presents required to be done by said party of the first part, the American Ice Company shall be permitted and suffered to possess, manage, develop, operate, and enjoy the plant and property herein conveyed, and intended so to be, and to take and use the income, rents, issues, and profits thereof, in the same manner, to the same extent, and with the same effect as if this deed had not been made.'

Second. If the ice company shall pay the principal and interest, and do all other things required to be done on its part, this deed shall be void. But if any default shall be made, and shall continue for ninety days, the whole amount of the bonds, principal and interest, shall be deemed immediately due and payable, 'and it shall be lawful for the trustee to enter into or upon the premises and property hereby granted, or intended so to be, and to take possession of the whole or any part thereof,' and to sell and dispose of the same by public auction in Bangor, giving notice, as therein required, in newspapers published in Bangor and in Washington, and 'in its own name, or in the name of the American Ice Company, to make, execute, acknowledge, and deliver to the purchaser or purchasers at such sale a good and sufficient deed or deeds of conveyance of the property so sold; and any sale made as aforesaid shall be a perpetual bar, both at law and in equity, against the American Ice Company, and all persons claiming by, through, or under it, from claiming the property, rights, interests, and franchises so sold, or any interest therein.' The proceeds of the sale, after payment of expenses, shall be paid over ratably to the bondholders, and the remainder, if any, to the ice company.

Third. 'The foregoing provision for a sale under the power aforesaid is cumulative with the ordinary remedy of foreclosure by entry or suit therefor; and the trustee hereunder may, upon default being made as aforesaid, institute and carry out proceedings to forclose this mortgage or deed of trust, by suit or otherwise, in such manner as may be authorized by law for the foreclosure of mortgages of real estate. And the American Ice Company hereby waives any and all rights of sale or redemption now or hereafter provided by the statutes of Maine or of the United States.'

The bonds were duly issued as recited in the mortgage, and were delivered to and held by purchasers for value in the regular course of business. The first installment of the bonds, and all interest which fell due on or before December 1, 1892, were paid. The rest of the bonded debt, and the interest thereon, were never paid, and were due and payable at the time of the commencement of this suit.

On October 13, 1893, the ice company executed to Johnson an assignment of all its property for the benefit of its creditors, under the act of congress of February 24, 1893, c. 157 (27 Stat. 474). Johnson accepted the assignment, and assumed the duties of assignee, and as such on January 29, 1894, executed to Willis a lease in w iting of all the ice company's real estate in the city of Washington, for one year from that date, at a monthly rent of $130.

After the default which took place on December 1, 1893, the continued more than 90 days, a majority of the bondholders directed the trust company to proceed in the execution of the trust. In pursuance of that direction and of the power contained in the mortgage, the trust company advertised and exposed the whole mortgaged property for sale by auction at Bangor on May 4, 1894. The sale was adjourned until September 8, 1894, when the property was sold, and was purchased by a committee of the bondholders, and for their benefit. The terms of the sale have not yet been complied with, nor any deed made to the purchasers; it being understood and agreed between them and the trustee, at the time of the sale, that the trustee should first obtain possession of the property.

The trust company on July 30, 1894, caused a 30 days notice to quit to be served on Johnson and on Willis, and on September 17, 1894, commenced this suit to recover possession of the property by causing a 7-days summons to be issued to each of them by a justice of the peace of the District of Columbia; and thereupon subsequent proceedings took place as above stated.

Upon the agreed statement of facts, the supreme court of the District of Columbia gave judgment for the defendants. The plaintiff appealed to the court of appeals, which reversed the judgment, and remanded the case, with directions to enter judgment for the plaintiff. 6 App. D. C. 375. The defendants sued out a writ of error from this court, which was dismissed for want of jurisdiction. 167 U.S. 76, 17 Sup. Ct. 739. They then obtained from this court this writ of certiorari to the court of appeals, under the act of March 3, 1897, c. 390 (29 Stat. 692). 167 U.S. 746, 17 Sup. Ct. 1004.

Calderon Carlisle and W. G. Johnson, for petitioners.

B. F. Leighton, for respondent.

Mr. Justice GRAY, after stating the case, delivered the opinion of the court.