McCormick v. McDonald

110 F. 50, 1901 U.S. App. LEXIS 4838
U.S. Circuit Court for the District of Southern New York·Decided July 3, 1901·Published·Cited by 1 cases

Opinion

COXE, District Judge.

This is an action in equity to establish the right of the complainant to participate, to the extent , of certain commissions alleged to be- due him, in the profits growing out of the construction of Jerome Park reservoir by the defendants. McDonald, who is the only defendant against .whom a personal judg[51] ment is demanded, entered into a contract with the board of aqueduct commissioners of New York to build for the city the so-called Jerome Park reservoir and arranged with the Drake & Stratton Company to do the work. In connection with the work the Drake & Stratton Company purchased a tract of land containing about 225 acres, bordering on Dong Island Sound, for $465,000; $80,000 of this sum was paid down and a purchase-money mortgage was given for the balance. The title to the property was taken in the name of Pierre W. Briggs who held it for the purchasers. The object of the purchase was to enhance the value of the land, some of which was under water, by dumping there the earth excavated from the reservoir. The Drake & Stratton Company proceeded with the construction until April, 1897, when Mr. Drake, its president, died and it was unwilling to continue the work. In these circumstances the complainant asserts that McDonald applied to him for assistance and it was agreed between them that if the complainant succeeded in securing some one who would undertake to complete- the construction under the Drake & Stratton contract, McDonald would give him a reasonable share of the profits of the enterprise. The bill alleges that through the efforts of the complainant the defendant Onderdonk was induced to undertake the performance of the contract to construct the reservoir for a compensation of 42J2 per cent, of the net profits and thereupon McDonald agreed that the complainant’s interest in the contract should be 1 Jx/z per cent, of the net profits. The bill alleges further that it was agreed that complainant should pay one-half of the $100,000 invested by the Drake & Stratton Company in the said 225 acres of land and one-half of such other moneys as might be necessary to insure the ownership and maintenance of said land and that the profits arising from the said land should be equally divided between McDonald and complainant. The complainant has at all times been ready to carry out the agreement as to the said lands. The bill alleges further that McDonald and Onderdonk have formed a partnership, which is financed by the defendant Mills, and are engaged in carrying out the contract for the completion of the reservoir and for the purchase and maintenance of the land, and have received and are receiving various sums pursuant to the provisions of the said contract ; that the defendant has refused to recognize any claim on the part of the complainant to profits arising from the contract or the said land.

The relief demanded is: First. That it may be decreed that the complainant has an interest of I7J4 per cent, in the profits arising from the aqueduct contract and one-half the net profits arising from the purchase, maintenance and sale of said lands. Second. That McDonald and Onderdonk be declared trustees of the complainant to the amount of 17J2 per cent, of the said profits “as and when the same are or shall be realized and that they further account for and pay over to him 17J4 per cent, of any profits heretofore realized from said contract.” Third. That Mills and McDonald be declared to be trustees for the complainant of one-half of the profits arising from the management of the said lands and that they account for [52] and pay over to the complainant one-half of the profits .which they have derived or may hereafter derive therefrom. .

The answer of the defendant McDonald denies that he ever made or entered into any agreement with the complainant whereby he was to have a share in the profits of either of said enterprises. The other defendants deny all knowledge of any agreement giving the complainant a share in the profits. The defendant Onderdonk admits that the .complainant called upon him and conversed upon the subject of the construction of the reservoir, but. he denies that he was induced to enter into the business or participate in the contract by the representations of the complainant.

The questions to be decided are: First. What, if any, agreement was made between the complainant and the defendant McDonald? Second. Should the court find that McDonald agreed to pay the complainant a percentage of the profits of the enterprise is it a corn-tract that can be enforced in equity? Third. Is the failure to allege and prove that the amount in controversy exceeds $2,000 fatal to the jurisdiction?

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McCormick v. McDonald, 110 F. 50, 1901 U.S. App. LEXIS 4838 (circtsdny 1901).

110 F. 50 (McCormick v. McDonald) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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