Shaeffer v. Blair - 149 U.S. 248 (1895)
U.S. Supreme Court
Shaeffer v. Blair, 149 U.S. 248 (1893)
Shaeffer v. Blair
Argued March 27, 1893
Decided May 1, 1895
149 U.S. 248
By a contract in writing, A and B agreed that certain lands, for the sale and conveyance of most of which A held agreements of third persons, should be purchased for the mutual interest of A and B, and the legal title taken in A's name, and conveyed by him to B; that B should advance to A the sums required to pay the purchase money, as well as other expenses to be mutually agreed upon from time to time, and be repaid his advances, with interest out of the net proceeds of sales; that A should attend to preparing the lands for sale, and sell them, subject to B's approval at prices mutually agreed upon, and retain a commission of five percent on the gross amount of sales, and, until B was reimbursed for his advances, deposit the rest of the proceeds to B's credit in a bank to be mutually agreed upon; that when B had been so reimbursed, "then the remainder of the property shall belong sixty percent to B and forty percent to A," and that the property should be prepared for sale "by A or assigns" within a certain time unless extended by mutual agreement. A fraudulently obtained from B much larger sums of money
than were needed to pay for the lands, procured conveyances of the lands to himself, and refused to convey them to B. Held that whether the contract did or did not create a partnership (and it seems that it did not), the equitable title in the lands; after reimbursing B for his advances with interest, belonged three fifths to B and two fifths to A, and that A's fraudulent misconduct, while it deprived him of the right to the stipulated commissions, did not divest him of his title in the lands.
This was a bill in equity filed December 8, 1885, by John I. Blair, a citizen of New Jersey, against Samuel C. Shaeffer, a citizen of Ohio, and other persons, citizens of other states, claiming under him, setting forth a contract in writing between the plaintiff and Shaeffer, dated February 4, 1884 (which is copied in the margin *), and praying that Shaeffer might be
ordered to convey to the plaintiff the lands described in that contract, and that it be adjudged that the defendants had no title or interest therein, and for further relief.
At the hearing in the circuit court, upon pleadings and proofs, the case appeared to be in substance as follows: in February, 1884, Shaeffer obtained and received from the plaintiff sums of money amounting to $92,882.70, upon fraudulent representations that they were needed to pay for the lands described in the contract, and, within a month after its date, procured conveyances of those lands to himself by paying therefor sums amounting to $59,789.30 only, and paid $500 for taxes and other necessary expenses, leaving the sum of $32,593.40 due to the plaintiff, and afterwards refused, on
demand, to convey the lands to the plaintiff.
The three tracts of land described in the contract contained respectively about 36 1/2 acres, about 138 acres, and 69 acres, near Kansas City, in the State of Missouri, and were worth more at the time of the contract than the sums paid by the plaintiff, and greatly increased in value afterwards.
In an action at law against Shaeffer, submitted to the circuit court without a jury at the same time with the present suit in equity, the plaintiff recovered judgment for the aforesaid sum of $32,593.40. Upon that judgment no writ of error was sued out.
In the present suit, the circuit court held that the contract sued on created no partnership between the plaintiff and Shaeffer, and conferred on Shaeffer only the right of an agent to sell, with a share in the profits by way of compensation, and that Shaeffer, by his fraudulent conduct, had forfeited all his rights under the contract, including not only the five percent commission on sales, but the share of forty percent in the net profits remaining after payment of the sums advanced by the plaintiff, and entered a decree for the plaintiff as prayed for. 33 F. 218. From this decree Shaeffer appealed to this Court.