57 F. 677 | 7th Cir. | 1893
(after making the foregoing statement.) It is contended by counsel for the appellant that the court erred in overruling his motion to dismiss these causes on the ground that the appellees had a plain and adequate remedy at law. When these causes came from the state court they were actions at law,
These bills, however, are clearly of an equitable character. They seek relief from fraud, and to settle conflicting claims to a fund in the registry of the court, and to establish and enforce an alleged trust, and to secure an accounting for a breach thereof: All of these are familiar subjects of equitable jurisdiction. Story, Eq. Jur. § 601; Fowle v. Laurason, 5 Pet. 495; New Orleans v. Morris, 105 U. S. 600. In 1888 the Noblesville Manufacturing Company was organized with an authorized capital stock of $150,000, of which $80,000 was deemed to be represented and paid up by, various donations. The remaining $70,000 was subscribed for by the following persons and in the following amounts: Emil S. Levi, individually, $20,000; Levi, trustee for Monroe Sieberling, $10,000; James L. Evans, $10,000; Leonard Wild, $10,000; John B. Carter, $10,000; Charles A. Jay, $10,000. In March, 1889, at a meeting of the stockholders, the capital stock was increased to $300,000. The ostensible object of this increase was to enable the company to enlarge the capacity of the mill. Eighty thousand dollars of this stock was subscribed for as follows: O. E. Sheldon, trustee, $40,000; Emil S. Levi, $20,000; John B. Carter, $5,000; James L. Evans, $5,000; Leonard Wild, $5,000; Charles A. Jay, $5,000. The master found and reported, and the court below adjudged, that it was a part of the agreement, at the time the last subscriptions were made, that Sieberling was to • háve $5,000, the same amount of new stock that was allotted to Carter,. Evans, Wild, and Jay, and that the $20,000 subscribed in the
It is contended by the appellant that the court below erred in ■ decreeing that $5,000 of the $20,000 subscription made by him in his individual name was actually taken for and on behalf of Sieberling. A careful examination of the evidence satisfies us that this claim is well founded. Levi made the subscription in Europe whereby he took $20,000 of the new stock in his own name, which he agreed to pay for. The contract of subscription was wholly between him and the manufacturing company. The entire right and interest in the stock, as shown by the written contract of subscription, was in Levi. He testified positively and emphatically that such was the fact. The evidence to raise a trust in this stock in favor of Sieberling consists wholly of oral-declarations and statements claimed to have been made by Levi and by Carter as his agent. Many of the declarations claimed to have been made by Carter are purely hearsay. The .legitimate evidence before the court, we think, fails to show any definite agreement by Levi to subscribe for $5,000 worth of stock for Sieberling. It would violate the soundest principles to permit a trust in favor of Sieberling to be ingrafted on the subscription contract on the loose, Vague, and indefinite declarations and statements disclosed in this record. It is not important to discuss the evidence in detail, for if it were conceded to be sufficient to prove that Levi had agreed to subscribe in his name for stock for Sieberling, and to pay. the assessments thereon with his own money, and to permit Sieberling thereafter to repay the advances so made, it would not yield any support to the decree. The most that can be claimed is that Levi, before the subscription was made, agreed to subscribe in his own name for $20,000 of stock, and to pay the assessments thereon with his own money, and that $5,000 of it should belong to Sieberling, who should thereafter ■ reimburse Levi: for the advances made by him. A trust in respect to money or other personal property may arise or be created by a parol agreement, if founded on a sufficient consideration. Loose, vague, and indefinite expressions are insufficient to create such a trust. The intention must be evinced with clearness and certainty. Perry, Trusts, § 86; Day v. Roth, 18 N. Y. 448; Hon v. Hon, 70 Ind. 135; Mohn v. Mohn, 112 Ind. 285, 13 N. E. Rep. 859. A trust may arise- or be created with reference to personal property upon the same facts and circumstances which would give rise to a trust in real estate, except that in respect to the latter the trust must be manifested by an agreement or memorandum in writing, while in respect- to the former it may rest in parol. Hunt v. Elliott, 80 Ind. 245. A trust results from the acts, and not from the agreements, of- the parties, or rather from the acts accompanied by the agreements. No trust can be set up by mere parol agreements, or, as-has been said, no trust results from the breach of a mere parol'
It, is further cemtendeel by the appellant that the cemrt, below erred in decreeing that the» appellees James L. EVans and Leonard Wild should eae-li recoven* from him the sum of $2,872.49, bedsides their costs, on account of the $16,000 received by Garter and Lesvi from Fairbanks on amount of the sale of a half interest, in the; patent for grinding wood pulp. The trial court was of the opinion that the* $16,000 which were professedly paid as the purchase prie*e of a half interest in a pateuil for grinding wood pulp werre* in fact; paid as a bonus nr aelelitiemal consideration fe>r the 1,267 sha,res of stock in the Aoble*sville* 7\!«nnfacfcuring Company sede] by Levi and Garten- to the American Sirawboard Company, and that, Evans? a.nel Wild we*re emfitloel to participate in that fund in the proportion that the stock owned by them respectively bore to the whede; amount of stock on whie-h -such bonus was paid. It is admitted by eenniised for the appe*lle*e*s that, if the $16,000 were actually paid in gooel faith to Lewi and Carien* as the purchase price of the sale; of a half interest in a patent for the grinding of wood pulp, the; elecroe of the trial court is erroneous. The decree can only be upheld on the ground that the $16,000 we;re in fact paid as a bemus or aelelitiemal cemsieleration fe>r the stock owned by Levi and Carter, and which ¡hew sold to the; American Strawboard Company, and that Lewi, by virtue of the* instrument of writing- of the ,15th of August, 1889, occupied such a trust relation towards Evans find Wild that they were entitled to participate in such bonus or additiemal cemsieleration. We think there was evidence before the; court whiesh fairly authorized it to find that the; sale of a half interest in a patent for the grinding of wood pulp was a men* cover; anel that the §16,000 was really paid as a bonus or additional consieleraiion for the 1,267 shares of stock in the INoblesvilh; Manufacturing Company. These; shares of stock were owned by Levi and Carter, and as such owners they had the undoubted right to se;ll the same for sue-h price and on such terms as they chose;, and to retain the whole purchase price obtained therefor unless
. On the one hand, it is contended that the agreement created such trust relations between the parties to it that Levi could not sell his own stock so long as he remained the trustee of Evans, Wild, and Carter, and that he had no right to permit Carter to sell his own stock. On the other hand, it is claimed that the agreement was merely a power of attorney clothing Levi with the naked title for the purpose of sale. In our opinion, the agreement is a power of attorney, conferring on the donee 'of the power at the most only a dry, legal title for the mere purpose of sale, and with the power of sale carefully circumscribed. While it professes to ■bargain, sell, and convey shares of stock, for value received, the sale is expressly declared to be in trust for the use and benefit of the grantors. The grantee took no beneficial 'interest in the stock by virtue of the agreement. The power granted the right of sale only on condition that the entire shares of stock owned by Evans, Carter, and Wild should be sold in solido for cash, and not for less than twice the amounts respectively paid by each on account of such stock. This instrument constituted Levi an agent for the sale of the stock of the grantors, with powers carefully limited and .defined. At the time this power of attorney was executed the grantors knew that Levi owned $40,000 of the stock individually, and held in his own name, with full authority to sell, $10,000 of the stock which equitably belonged to Sieberling. They knew that he had been endeavoring to effect a sale of his stock. The agreement in question must be read in the light of these known facts. Thus read, did the agreement preclude Levi from selling his .own stock? If such limitation existed, it arose by implication, for the power of attorney contained no express limitation on his power of sale, In view of the known facts, it is fair to presume that, if any such limitation had been intended, it would have found expression in the power of attorney.
The claim that the appellant is to be held liable to the appellees because Carter violated the agreement in question by the sale of his stock is unfounded. Carter had an undoubted right to sell his own stock, notwithstanding the existence of the power; and his so doing violated no contract rights of the appellees, and, if they were harmed by it, such harm falls under the maxim, “damnum absque ■ injuria.” But, assuredly, Levi can in no way be held to -respond in damages, as for a breach of trust, because of the act of Carter in selling his own stock. The fund in question arose, in no just sense, from the sale of stock owned by the appellees, or in the sale of which they had any interest. Levi sold his own stock, find on terms upon which he had no power to sell the stock of the appellees. He did not sell nor attempt to sell their stock. After selling his own stock, he procured an offer for theirs, which they were at liberty to accept or reject. There is no evidence in the record which shows that Levi could have sold the appellees’ stock
In our opinion, the court ought to have dismissed the bill of Evans and 'Wild, at their costs. The appellant is properly decreed to account to Sieberling for the proceeds of the sale of the $10,000 of stock held in trust for him, including Ms proportionate share of the bonus or additional consideration received. The amount of stock owned and sold by Levi on his own account was $40,000, and the amount belonging to Sieberling was $10,000. The amount of the bonus or add! tional consideration received by Levi, and with which he is chargeable, is $12,590.80. All sums of money paid by Levi on account of the Sieberling stock will be taken into the account, and interest may be allowed on the several sums of money properly chargeable to each.
The several causes are hereby reversed at the costs of the appellees, and remanded to the court below, with instructions to proceed in conformity with the principles contained in the foregoing opinion.