Court Opinion

ID: 3860081
Source: CourtListenerOpinion
Date Created: 2016-07-06 08:48:05.156482+00
Date Added: 2024-06-11T07:41:17.963906
License: Public Domain

Argued April 9, 1923.
The plaintiff's action grew out of a contract entered into on the 8th day of May, 1914, between himself, party of the first part, the defendant, party of the second part, and Andrews Land Co., a corporation, party of the third part. The plaintiff was the owner of a tract of land in the City of Erie which he desired to sell and for the accomplishment of this purpose he entered into an agreement with the other parties above named, as a result of which he conveyed the land to the defendant to be held in trust to facilitate its sale. The Andrews Land Co. was to make sale of the property in lots. The proceeds were to be paid to the defendant and distribution was to be made as follows: the taxes were to be paid until conveyances were made to the purchasers; 5% was to be appropriated by the trustee for services; of the balance the plaintiff was to have 80% and the selling company 20%. It was in contemplation that the lots should be sold on small payments over a considerable period. A schedule was prepared by the plaintiff and the selling company exhibiting the number of the lots and the minimum prices at which they should be sold. No sales were made for about five months, when on October 20, 1914, the *Page 327 
plaintiff agreed to the substitution of an amended price list and permission was given by the plaintiff to the Andrews Land Co. "to sell any lots at these prices to any individual member or employee of their company." The property was not in condition to be sold without expensive improvements. The contract provided for the outlay by the land company of $2,000. This was found to be inadequate and further disbursements were made by the land company from its own resources to the extent of about $16,000 for improvements. According to the plaintiff's testimony 36 of the lots were bought by the land company, 34 of them through some of their employees and 39 were sold to other persons. The sales to the employees of the land company were made under the authority given by the plaintiff above referred to. The whole amount of the money received for lots by the defendant was $48,050 which was distributed in accordance with the terms of the contract except as to one item of $605.51 which latter item the company allowed the plaintiff. The contract provided for its rescission and a reconveyance to the plaintiff of any lots not sold at the expiration of five years if the plaintiff so elected. Notice to that effect was given and a reconveyance made as stipulated for. The contention of the plaintiff is (a) that the defendant should not have paid to the land company commissions on the sale of lots to its employees; and (b) that the defendant should be charged with profits made by the land company on the lots which it bought. The court found against the plaintiff on both of these claims and these findings are supported by competent evidence. It cannot be questioned that the plaintiff authorized the sales to the land company. He described them in one of his communications as "dummy sales" that is, they were made to the land company to promote the sales of other parts of the tract, evidently on the theory that the improvements made by the land company in building, opening of streets, etc., would make the unsold lots more valuable. It is clearly shown too that *Page 328 
he received a monthly statement from the defendant of the sales made by the land company during the month, which statement contained the number of lots sold and the names of the purchasers. He received his share of the purchase money monthly without objection and it is not contradicted that he was cognizant of the improvements made on the property and observed the result of the sales. The defendant knew that the plaintiff had authorized the land company to buy lots and the court properly held that under such circumstances the defendant could not be charged with a breach of trust. Its duty was to hold the title, make the conveyances to the purchasers, receive the proceeds of sales and otherwise conform to the agreement between the plaintiff and the land company. On the facts found by the court there is no room for the contention that the defendant was in default.
As to the claim for profits made by the land company, it was incumbent on the plaintiff to show, first, that such sales to the employees of the land company were not authorized, and, secondly, that a profit was made. It is admitted by the plaintiff that he did authorize such sales. His claim that he did not suppose so many would be made does not affect the legal situation of the parties. He could have revoked the authority if he had seen fit and he did so after the lapse of about three years from which time no sales were made to employees of the land company. With respect to alleged profits made by the land company on resales of the lots there is no evidence from which the court could determine whether any profits resulted. The only direct evidence on the subject is that of one of the officers of the land company who testified that the company lost $15,000 in the operation. In order to accomplish the sale of lots bought by their employees and taken over by the land company, it was necessary to extend the improvements, to build houses in some cases, to make sales on second and third mortgages, to take other property in exchange for lots, and through a *Page 329 
complication of exchanges and sales dispose of so much of the property as was practicable. Nothing in the evidence offered by the plaintiff required the court to find that there had been a specific profit on the lots sold by the land company. The conclusion of the court is well supported by the evidence and requires no further discussion.
The judgment is affirmed.