Ten Mile Coal & Coke Co. v. Burt

170 F. 332, 1909 U.S. App. LEXIS 5518

• Court: U.S. Circuit Court for the District of Northern West Virginia
• Decided: May 10, 1909
• Status: Published

Opinion

DAYTON, District Judge

(after stating the facts as above). After long and patient study of the many authorities cited in the able briefs filed by counsel on both sides touching the application to this case of the equitable doctrines of laches and acquiescence, I have felt constrained to reason the true solution to be reached from a somewhat different standpoint from either of those taken by contending counsel. Giving the broadest and most liberal construction to the allegations of the bill in favor of the plaintiff, as I must do upon this demurrer, which admits them to be true, it seems to me that I may epitomize the case to be that in consideration of the undertaking on the part of Burt to secure Rogers to build the Short Dine Railroad, maintain and operate it as an independent line for at least 20 years, secure him to build tipples at the Ohio River terminus, furnish track and shipping facilities whereby the plaintiff could develop and mine its coal, and have Jackson, its substantial owner, retained as its president, by reason pf all which the plaintiff would be assured, not only of full and complete shipping facilities, but also of much-desired carrying competition, the plaintiff agreed to and did convey, as compensation for these things to be accomplished by Burt in its behalf, the 1,000 acres of coal. This being true, a relation in the nature of a trust, an agency, at least, was created. It seems to me that the allegations of the bill are ample to establish (a) that Burt himself had no means with which to build, and was not expected to build, the railroad; (b) that his connection with it was solely as the agent of Rogers, who was the man of means; (c) that he did not undertake to pay a direct consideration for the coal, but only to perform certain services, to the end that certain advantages should accrue to the plaintiff, which, if he accomplished, he was to receive this 1,000 acres of coal in compensation. If this contract had been made direct with the principal, Rogers, and the conveyances had been made to Rogers in express consideration of his contract to expend the money necessary to build the road, to maintain its 20-year independence, to furnish shipping facilities, etc., no possible trust relation could be assumed. The building of the road would have been at least part performance, and to that extent a valuable consideration, and after long delay equity would assume acquiescence in the change of conditions. If, however, one undertakes as trustee to do for a consideration certain things, is paid for it in advance, does not do it, but in fact never intended to do so, but by false promises has secured his principal’s property by fraud and deceit, equity will not, in my judgment, allow him to plead laches in order that he may retain his illgotten gains. As well establish the doctrine that if a man rob me on the highway of my purse, and I do not sue for its recovery at once, that 1 am guilty of laches and have acquiesced in his right to it!

Assuming that the allegations of this bill are true, as I must, Burt secured from this coal company $100,000 in value of its property upon promises of what he would secure Rogers to do, knowing at the time that the things contemplated would not be done by Rogers, and no practical good, but, on the contrary, evil, would inure to the company in fact. However, if Burt cannot be held in trust relation to plaintiff in this transaction, nor as its agent to secure these' benefits -for it, I am nevertheless satisfied that allegations of the bill are sufficient to charge that the consideration has wholly failed, and that no good or valuable consideration can be relied upon by Burt and wife to retain this property. The deeds are sought to be removed as clouds upon title, and as having wholly failed in consideration. Near 100' cases have been cited by counsel, pro and con, touching this subject, most of which I have examined, but refrain from discussing now. If the evidence upon final hearing is not sufficient to sustain the allegations of this hill, then no discussion of these principles will be necessary. If, however, such- evidence is sufficient, I am well satisfied these same defenses will be relied upon at final hearing, when the legal principles can he much better applied to and illustrated by the facts as they shall then be developed.

Bet the demurrer be overruled.