Payne v. Pomeroy

21 D.C. 243
CourtDistrict of Columbia Court of Appeals
DecidedNovember 21, 1892
DocketNo. 26,162
StatusPublished

This text of 21 D.C. 243 (Payne v. Pomeroy) is published on Counsel Stack Legal Research, covering District of Columbia Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Payne v. Pomeroy, 21 D.C. 243 (D.C. 1892).

Opinion

Mr. Justice Hagner

delivered the opinion of the Court:

This is an action at law brought by the plaintiff to recover the sum'of $5,000 with interest from the ioth day of April, 1883, which the plaintiff claimed he “ delivered to the defendants on that date to be used and applied by them in the purchase of the property of the late Pennsylvania and Sodus Bay Railroad Company, under an agreement whereby the title to said property was to be at once conveyed to the defendants as trustees for the protection of the parties advancing the said purchase money; but the defendants did not apply the said money or any part thereof to the purchase of said property; but the said property was sold and conveyed to other party or parties; whereupon the plaintiff demanded from the defendants the return of said money, but they wholly refused and still refuse to return the same or*any part thereof.”

The circumstances out of which this transaction arose, as appearing in the record, were these: In the spring of 1883, Mr. Cooper approached Mr. Payne and requested him to become a subscriber to a scheme then on foot to purchase railroad named, with all of its appliances, located in the northern part of the State of New York. He showed Payne an agreement dated 12th of March, 1883, by which certain Dudley and Dean agreed to sell to Sears, Crowley and Clapp all the property, real and personal, lately belonging to the railroad company, which had been purchased by Merritt & King, at a sale under a judgment of the Supreme Court of the State of New York; allowing them until the 12th day of April, 1883, to examine the records and legal proceedings and to inspect the property; and if Sears, Crowley and Clapp should elect to purchase, Dudley and Dean agreed to convey to them the property on the payment of $35,000 in cash, on or before the said 12th day of April.

Another paper then shown to Payne, dated 16th of March 1883, was á transfer of the property and franchises from [245]*245Sears, Crowley and Clapp to Cooper and Pomeroy. It recited that in procuring the optional contract, certain expenditures were made amounting to $5,000, which were paid by Cooper and Pomeroy, and in consideration' of said advances, the grantees in said optional contract thereby sell, assign and transfer unto Cooper and Pomeroy, and the survivor of them, his heirs and assigns, all the right, title and interest which said Sears, Crowley and Clapp had acquired by virtue of said optional contract.

“ The same to be held by said Cooper and Pomeroy and .the survivor of them in trust for the repayment of the said money advanced as aforesaid, until said contract shall have been, or shall be performed, when this assignment shall merge into and be provided for as the further agreement made contemporaneous herewith, which hereby is also made. part hereof for such purpose, by which the entire assets, property, bonds and stock, of the railroad company hereafter to be organized, shall be and are pledged in a suitable way for the repayment of the aforesaid sum of money and interest thereon, together with all other moneys and interest thereon, which may hereafter be paid to secure said property as provided in the said contract first herein mentioned.”

To this agreement signed by Sears, Crowley and Clapp, Cooper and Pomeroy appended their acceptance in these words: “We accept the trust hereby created, and agree to perform the conditions thereof.”

The contemporaneous paper referred to in this agreement as a declaration of trust bears date the same day, and states that Sears, Crowley and Clapp — as the assignees and representatives of others interested in the contract of the 12th of March 1883, between Dudley and Dean themselves — with a view to the completion of the purchase and to define the interests of the parties therein, propose and agree as follows:

“That whereas the said contract has this day been assigned to Glen W. Cooper and Samuel C. Pomeroy, as trustees, to secure the repayment of $5,000 already advanced, [246]*246now it is further agreed, that the said contract and all the interests therein conveyed to the said trustees, shall be held by them for the benefit of any and all persons who may contribute towards the payment of the $35,000, being the balance due on the said first named contract.
“ It is further agreed that upon the. completion of the purchase of the said property by the payment of the said $35,000, a railway corporation shall be organized under the laws of the State of New York; that in the' organization of said corporation the said persons so contributing as aforesaid shall name a majority of the board of directors; that any and all stocks and bonds issued by the said corporation so organized shall be issued and delivered to the said trustees hereinbefore named, who shall hold the same in trust until the said moneys, to wit, the sum of $5,000 already advanced, and the said $35,000, and all interest thereon at the rate of six per cent, per annum, shall have been repaid to the parties respectively who have advanced the same.
“ Upon the repayment of the said sums of money aforesaid, and the interest thereon, by the sale or negotiation of said stocks and bonds, or otherwise, this assignment shall become void, and the said stocks and bonds shall belong to the parties advancing the $40,000 as aforesaid, in the proportion of four-tenths of the whole, and five-tenths' shall belong to the parties whose interest may then appear, and the remaining one-tenth shall belong to Glen W. Cooper, for moneys already advanced.
“ It is further agreed that the subscription for the raising of the $35,000 aforesaid, shall be paid to' the said trustees, who, when the whole amount shall have been paid, shall cause the same to be paid over to the present owners of the said property, and a good and sufficient title to be made to the said railway corporation hereafter to be organized as aforesaid.”

This also was signed by the grantors, and Cooper and Pomeroy signified their acceptance of its contents by signing the following:

[247]*247“We accept the trust hereby created and agree to perform the conditions thereof.”

Payne testified, that when these papers were shown to him, they were accompanied by representations made by Cooper and Pomeroy and by an engineer connected with the work, as to the condition of the road; and among other things he was told it was advisable the subscriptions should be in sums of $5,000, and that a number of them had been promised. After considering the matter, Payne agreed to go into the enterprise. He met the parties, or some of them, in New York, paid his $5,000 to the trustees, and was given a receipt which is in these words:

“ Received of James G. Payne, five thousand dollars, to be applied as part of the purchase money of the property of the late Pennsylvania & Sodus Bay Railroad Company; this money to be refunded to said James G. Payne out of the first money realized from the sale of bonds issited by the Pennsylvania, Lake Ontario & Northern Railroad Company, a corporation to be organized on the basis of said property purchased pursuant to the trust created for the protection of the parties advancing said purchase money in which the undersigned are trustees; said James G.

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21 D.C. 243, Counsel Stack Legal Research, https://law.counselstack.com/opinion/payne-v-pomeroy-dc-1892.