Court Opinion

ID: 7277712
Source: CourtListenerOpinion
Date Created: 2022-07-25 20:02:09.933162+00
Date Added: 2024-06-11T16:18:56.387280
License: Public Domain

Mr. Justice Robb
delivered the opinion of the Court:
As to the item of $481.81, we agree with the view of the learned trial justice. This item benefited the complainants in no way, and we do not think its repayment was contemplated by the October contract.
We also agree with the learned trial justice that the defendant is not entitled to be heard on the exceptions filed to the second report. Since every exception might have been filed upon the submission of the first report and disposed of at the first hearing, the defendant, by his failure then to act, waived his rights in the premises.
At the time the October contract was entered into the imminence of the railroad improvements had very favorably affected the complainants’ land, and, as found in our prior -opinion, “the apprehension of its loss by foreclosure was great*156ly, if not entirely, relieved.” It is apparent, therefore, that the only' reasons for the very favorable terms upon which the defendant was connected with the enterprise was to secure his skill as a' builder, and his financial assistance in improving the property to the ■ end that it might be speedily marketed. An examination of the contract and the testimony in the case leaves no room for douht on this question. We think it is equally plain that when this contract was entered into the erection of many more than five houses was contemplated. Let us here briefly scrutinize Campbell’s conduct, with a view to the determination of the question whether he carried out his part of the contract. He induced the complainants, upon the understanding that it was for his greater protection, to deed him one third of the property at a time when he had merely commenced to earn it. His conduct in this respect, as Mr. Justice Barnard found, is material in the light of his subsequent conduct. He built ten houses and stopped. In the building of these houses he employed a superintendent of construction, and did not, as required by his contract, personally “pursue such work industriously and with all the ability and skill he can bring to the work.” The income upon the ten houses constructed was not sufficient to liquidate the fixed charges upon the balance of the property. This tends to sustain complainants’ contention that the erection of many more houses was originally contemplated. It was the duty of the defendant, in his building operations under the contract, to keep a careful account of all receipts and expenditures, and to preserve all vouchers, that those interested with him in the enterprise might at any time ascertain the exact situation. This he did not do, and it was only after repeated efforts that anything like a satisfactory account was obtained from him. During the summer of 1903 it became apparent that part of the land of the complainant company was available for warehouse purposes, owing to its proximity to the railroad tracks. In November a contract was entered into, with the approval of Campbell, with one Malnati for the sale to him of a part of the land of the company suitable for warehouse purposes, *157the consideration being $15,200; $6,000 of this sum was necessary to secure a release from the general trust. When this sale was about to be consummated by deed, Campbell arbitrarily demanded one third of the surplus on the theory that he was the absolute owner of one third of all the property. He also claimed that, before the division, he should be paid $4,-000., which he contended he had advanced in the erection of the ten houses. At that time the complainants did not know the exact state of his account. The defendant refused to join in the deed unless his demands were satisfied and, further, threatened to bring about a receivership for the company. Thereupon an arrangement was entered into whereby $4,000 was deposited to await the settlement of the controversy between the parties. One third of the remainder, or $1,686.54, was paid Campbell under protest, and the remaining two thirds was received by the improvement company and expended by it in the liquidation of its obligations. This, in brief, is the history of Campbell’s efforts to carry out his part of the contract under which he was to receive a one-third interest in a valuable piece of property. He contends, and so testified, that the original plan of building at least forty houses was abandoned by mutual consent. The complainants testified to the contrary; and while it is quite possible that the terms of the contract would have been satisfied by the building of a sufficient number of houses to create an income equal to the fixed charges on the balance of the property, the terms of the contract being somewhat ambiguous, we are satisfied, from a consideration of the evidence before us, that the failure to construct more than ten houses was attributable to the conduct of the defendant. After he obtained the deed to one third of the property, he seems to have been impressed with the idea that it was necessary for him to do nothing more than await developments. In fact he testifies that he was then entitled to the deed as a matter of right. Even assuming that the original building project, owing to changed conditions, was abandoned by mutual consent, as he contends, and that warehouses were to be built instead, the defendant is in no better position; for after the com*158pletion of the ten houses he did absolutely nothing, and his conduct with reference to the Malnati sale indicated clearly the view he then entertained as to his obligations under the contract. When that sale was .made, as above indicated, the income from the houses, which was the company’s only source of income, was not sufficient to liquidate fixed charges. There were bills outstanding and no money was available for building purposes, and yet Campbell arbitrarily demanded payment of a sum which he claimed he had advanced over and above his receipts. Although, under his contract, he was fully protected, he arbitrarily demanded and received one third of the balance, or $1,686.51, when that sum, as he was informed and had every reason to know, was needed to develop the remaining land. His conduct after the Malnati sale, and prior to the bringing of the bill, was no better. From a careful examination of the entire record, we are forced to the conclusion that the decree was right. It is difficult to perceive wherein the defendant has been injured. He was to receive a one-third interest in certain property upon the theory of services performed in the improvement and sale of that property. To the extent that he has performed the obligation imposed upon him by the contract, his interests have been fully protected by the decree: more he has no right to expect, and more a court of equity certainly ought not to award him.
The decree will therefore be affirmed, with costs.
Affirmed.
An application by the appellant for the allowance of an appeal to the Supreme Court of the United States was allowed.