text:
    MANISTEE NAVIGATION CO. v. LOUIS SANDS SALT & LUMBER CO.
    1. Logs and Logging — Contracts—Advanoes—ConstructionPayment.
    Under the terms of a contract to remove sunken logs from a river and its tributaries, upon terms stated, including an advance of 50% of the agreed price each month on the basis of logs raised and skidded during the preceding month; “this amount to be considered as an advance under this contract, and not as a payment on any particular lot of logs,” plaintiff, the contractor, was entitled to have advances made treated as for the contractor’s benefit, and such advances applied to and protected logs secured and skidded, the defendant being entitled to credit therefor in proportion to the number of thousand feet in the logs delivered; defendant could not maintain its claim that the advances should be treated as payments upon the first and subsequent lots of logs, as delivered.
    2. Same — Construction oe Contracts.
    There was no ground for the contention that the parties had, by practical construction, interpreted the contract in a different manner, where a payment had been made thereon, both parties expressly reserving the right to their several interpretations of its provisions without any prejudice, and leaving the dispute open to future determination.
    3. Same — Parties—Joint Contract.
    Where the contract was with several firms or persons, and was joint in form, but contemplated a delivery to each logowner of his own logs, as identified by their respective marks, and where the parties treated the agreement as a several contract, and each logowner advanced his individual proportion of the contract price as the timber was scaled, an action was properly brought against one defendant for its share of the amount due and breach of the terms of the contract.
    4. Same.
    Plaintiff’s first count was in assumpsit, and the second claimed the right to recover the difference between the amount due plaintiff under the scale required by contract and the amount as determined by defendant; the third', count being for logs delivered but not accounted for, and the fourth being assumpsit. The fifth count was for breach of a supplemental contract between the same parties, providing for a different method of estimating by scaling lumber actually manufactured by the defendant, who, as plaintiff claimed, employed wasteful methods of sawing lumber, so that the tally was less than it should have amounted to if the logs had been economically sawed. • Held, that the counts sounded in assumpsit and not in tort, and that there was no misjoinder.
    5. Same — Measurements—Scale.
    And, although the parties, by the terms of the agreement, appointed scalers, whose determination was to be binding, evidence that a different scale than the one designated by the contract was employed by them, and that the kind of scale mentioned in the contract, i. e., a fair and equitable scale, was more liberal to plaintiff than a merchantable scale, which was the one adopted, raised a question of fact.
    6. Same — Evidence.
    Upon a record showing that defendant accounted for all logs delivered to it by witnesses having first-hand knowledge, and plaintiff could only produce estimates of doubtful value and of conjectural character to show the amount of logs claimed to be unaccounted for, but for one year a satisfactory estimate was made by plaintiff’s agents who sorted the timber, there was testimony to go to the jury as to the amount of logs during the one year.
    7. Same.

      Held, also, as to the issues relating to damages for delays and sinking of logs, and for negligent sawing or wasteful methods in manufacturing lumber, plaintiff’s evidence being conjectural and indefinite, defendant’s positive and certain, the court should have instructed a verdict for defendant.
    8. Same — Recoupment—Intíírpretation oe Contract.
    Under a contract requiring plaintiff to make at least one drive or delivery of all floatable logs each year after 1905, defendant could recoup its damages for failure of plaintiff to make a drive one year.
    9. Same.
    Defendant was also entitled to recoup payments advanced for other than sunken or deadhead logs, as specified in the contract; and the determination of the scalers was not conclusive as to the timber which would constitute sunken or deadhead logs.
    10. Same.
    Also, the court erred in limiting defendant’s right to recoup such damages by the qualification in his charge to the jury that if defendant caused the delay or failure to deliver by neglecting to advance moneys as required by the written agreement, the recoupment should be disallowed, where the evidence failed to sustain the contention that the alleged neglect was due to defendant’s fault.
    Error to Manistee; Withey, J.
    Submitted April 2, 1912.
    ( Docket No. 7.)
    Decided March 20, 1913.
    Assumpsit by the Manistee Navigation Company against the Louis Sands Salt & Lumber Company for breach of a contract. Judgment for plaintiff. Defendant brings error.
    Reversed.

      Glassmire & Bamsdell {Frank L. Fowler and Watts 8. Humphrey, of counsel), for appellant.

      Thomas Smurthwaite (M. H. Neal, of counsel), for appellee.
   Bird, J.

When this case was first argued, the late Justice Blair sat throughout the argument and afterward prepared the opinion therein. Since that time a reargument has been had before the full bench. After a consideration of the questions involved, I find myself in accord with his opinion, and I therefore adopt it as containing my views of the case. It follows:

“ The plaintiff corporation was organized to improve the navigation of the Manistee river, which contained a great many sawlogs which had accumulated therein during the many years said river had been used for running logs. On the 23d of June, 1905, the Navigation Company, as party of the first part, entered into an agreement with the defendant and practically all of the lumbermen operating on Lake Manistee, and A. E. Cartier, containing, among other agreements, the following:
“ ‘ That the said party of the first part, in consideration of the covenants on the part of the parties of the second part hereinafter contained, doth covenant and agree to and with the said second parties that it will raise, bank, drive, sort, and deliver to the respective mills of said second parties situated upon Lake Manistee, in said county and State, all of their deadhead and sunken logs lying and being in the Manistee river and its tributaries, and on or in the bayous, flats, cut offs, and marshes adjacent thereto, and that each year after 1905 said first party will make at least one drive or delivery of all floatable logs to said second parties. And the said parties of the second part, for and in consideration of the aforesaid covenants on the part of the party of the first part, doth covenant and agree to and with said first party to pay it the sum of six dollars ($6) per thousand feet for all their hemlock logs known as deadhead and sunken logs, and the sum of seven dollars and a half ($7.50) per thousand feet for all other logs. Payments to be made as follows: An advance of fifty per cent. (50%) of contract prices to be paid on the 10th day of each month on all logs raised, banked, and skidded during the preceding month. This amount to be considered as an advance under this contract, and not as a payment on any particular lot of logs. On the 10th day of each month, payment to be made for all logs delivered to the respective mills of said parties of the second part during the preceding month, less any amount that may be due said second parties by reason of the advance money above mentioned.’
* ‘ It was also agreed that the log owners should furnish their respective stamp and bark marks for the identification of their respective logs, and that the Navigation Company should stamp its own identification mark upon the logs lifted by it. The mark ‘Nay’ was adopted as such mark. The agreement contained the following clauses as to unidentified logs:
“ ‘ It is further mutually understood and agreed between the parties hereto that all unidentified and unmarked logs raised by said first party shall be stamped with a large ( ) on both ends of logs, and bark-marked with large ( — ) in middle of logs, and that every thirty days a complete list of the unknown and unidentified logs as above specified shall be rendered to the party of the second part, and every thirty days the party of the first part shall advertise and sell the same as provided by statute, said second parties paying all costs and charges incident thereto. Said first party is to turn over to a representative hereafter designated by said second parties, the amount or sum received for said logs thus sold, which sum or price shall not be less than the contract price for raising the same, including the costs and charges for selling them. In the event of any of the parties of the second part to this contract purchasing or bidding in the logs advertised and sold as aforesaid, then said first party is to deliver all such logs to the said representative, or at such mill or mills as he shall designate; and said first party shall receive from said second parties the price therefor as heretofore set forth in this contract. It is mutually understood and agreed that said second parties are to hold the party of the first part harmless and to indemnify it fully against all loss and damages of every name and nature for all logs sold by them as aforesaid.’
££ There was also a provision that—
“ ‘ All logs scaled under this contract shall be scaled by scalers mutually agreeable to the parties hereto; said scalers to make in all cases a fair and equitable scale, and according to “Doyle’s rule,” and all logs delivered to said second parties’ mills are to be scaled by scalers employed by the Manistee Boom Company; it being understood and agreed that, in the absence of said Boom Company scalers, then the same are to be scaled by scalers mutually agreed upon between: the parties hereto, all logs scaled at mills to be done without expense to said first party. The scalers employed to scale the logs when taken out of the waters, flats, or bayous of said stream and its tributaries are to be paid one-half by each of the parties hereto, said first party to board said scalers without cost or charges to said second parties.’
“ On August 28, 1905, at a meeting of the parties to the contract, the ‘ fishhook mark ’ was adopted as the mark for the unidentified logs, Mr. J. O. Nessen was chosen as the representative of the log owners in handling the unidentified logs, and Mr. Noudwas given £ authority on behalf of the log owners to select scalers as provided in the contract.’
“ On the 21st day of September, 1907, a supplemental agreement was made; the principal amendment relating to the method of scaling, as follows:
“ ‘ Of all lumber cut from logs delivered under this contract, board tally shall be kept by some competent tallyman to be mutually agreed upon, each party here to pay one-half their wages, Said lumber to be sawed so said tally can be kept at the tail of the mill, or the lumber shall be piled separately from lumber sawed from other logs, when said tally shall be made at the time the lumber is shipped, and for each eleven hundred fifty (1,150) feet of hemlock lumber six feet and over in length, graded mill culls and better, sawed as above, said second parties shall pay to said first party six dollars ($6), and for each eleven hundred fifty (1,150) feet of all other kinds of lumber, sawed as above provided, said second party agrees to pay seven dollars and a half ($7.50). It is also understood and agreed that all cedar logs delivered under this contract shall be settled for upon the scale of Boom Company scalers at mill where said cedar logs are delivered at the rate of seven dollars and a half ($7.50) per thousand feet.’
“ On December 20, 1909, plaintiff brought this action against defendant alone for breach of contract, classifying the various breaches and damages therefor, as follows:
“‘I. 1 * * And the said plaintiff delivered to the said defendant, under said contract, a large quantity of sawlogs, to wit, about 7,294, - 577 feet of hemlock logs and about 3,156,506 feet of other sawlogs, of which amount there were scaled and reported, as required by said contract, only the amount of 3,294,577 feet of hemlock logs and 1,156,506 feet of other logs, whereupon there became due and owing to the plaintiff by and from the defendant, for said services upon the logs as scaled and reported, the sum of $19,768.06 for hemlock logs and $8,673.80 for other logs, in all the sum of $28,-441.86, less the advances paid as required by said contract upon the logs so delivered, when the same were raised, banked, and skidded, to wit, for hemlock logs $9,884.03, and for other logs $4,336.90, which advances became due to the defendant, upon said logs, when the same were delivered as provided in and by said contract; and the amount due to said plaintiff, after deducting the advances aforesaid, upon each lot of logs as scaled and reported, was and is the sum of $14,220.93 and interest thereon from the time the same, or parts of the same became due, upon each delivery of said logs as delivered, scaled, and reported. Wherefore it became and was the duty of the defendant to pay to the plaintiff, on the 10th day of the month next following each delivery of said logs, the amount due the plaintiff thereon as aforesaid, which duty the said defendant wholly failed and neglected to perform, but claimed, on the contrary, in defiance of and contrary to the terms of said contract, that advances made by it to the plaintiff upon other logs belonging to the defendant, which had been raised, banked, and skidded upon the banks of said river by the plaintiff, were all due and should be applied in payment of the particular lot or lots of logs so delivered to it by the plaintiff, and wrongfully, and to the great damage and injury of the plaintiff, deducted all of the advances so made by it upon said other logs, then upon said skids, as well as upon the lot or lots of logs so delivered, scaled, and reported, and wholly refused and still refuses to pay the plaintiff the moneys actually due the plaintiff for the logs so delivered, scaled, and reported, whereby the defendant became, was, and is indebted to the plaintiff upon the logs so delivered and actually scaled and reported in the said sum of §14,220.93 and the interest thereon, to the damage of plaintiff of §16,000.’
“ II. That the defendant did not make a fair and equitable scale, but an unfair, inequitable, and fraudulent scale, thereby damaging plaintiff to the amount of $2,85410.
“ III. That the defendant used and manufactured large quantities of logs delivered under the contract, without scaling or accounting for the same, to plaintiff’s damage $20,000.
“ IV. Although the contract provided, ' “that said second parties are to receive and manufacture said logs as fast as the same are delivered to them,” * * * a large quantity of logs so delivered to it by the plaintiff under said contract were held, kept, and retained in the water by said defendant, and were not manufactured as fast as the same were delivered, and a large quantity of the same logs, to wit, 1,000,000 feet of hemlock logs and 500,000 feet of other logs, became water-soaked and sank to the bottom of said Lake Manistee before the same were scaled or tallied,’ to the damage of the plaintiff $10,000.
“V. That the defendant did not manufacture the logs into lumber in accordance with the supplemental agreement, but, ‘did cut said logs, or a large portion thereof, into shorter lengths, and manufacture said shorter lengths of logs and lumber into staves, heading, and other products of short lengths, and into wood for use in its manufacture of salt, and for other purposes, and did credit and allow the said plaintiff for only the portion of said logs which it actually did manufacture into lumber,’ to the damage of plaintiff $6,500.
“VI. That defendant took and manufactured for its own use large quantities of logs belonging to others of said parties of the second part—
“ ‘And inasmuch as the said plaintiff has performed the services required of it under said contract, upon the logs so taken, received, and used by the defendant, it was and is entitled to the compensation provided by said contract therefor; and inasmuch as the advances made upon logs so taken by the defendant remain a charge against the plaintiff, and must be paid by it when due, under said contract, the plaintiff is entitled to demand and receive the full contract price therefor.’
“Defendant pleaded the general issue, with notice of set-off and recoupment. At the outset the defendant objected to any evidence being received under the declaration for various reasons specifically set forth. The objections, were, for the most part, overruled, and the case proceeded, resulting in a verdict for the plaintiff of $11,-796.66. The defendant has brought the caseto this court for review.
“ It was the business of the plaintiff to raise the logs coming under the description of ‘ deadhead ’ and ‘ sunken’ from the river, lift them to the bank, and place them on skidways, using for that purpose somewhat expensive steam scows. After these logs were once lifted and banked, they were scaled by scalers, as provided in the contract, for the purpose of ascertaining the amount of the advances. After being allowed to dry out, during the winter and spring, such as were dried sufficiently for the purpose were floated and driven down the river for delivery to the respective mills of the parties of the second part. When the drive reached the mouth of the river, they were driven or gathered in what is called or known as the ‘ sorting gap.’ The logs of the various owners were then separated and placed in pockets ready for delivery to the owner claiming the marks on such logs. This work of sorting and separating was done by the Manistee River Boom Company under a contract with the plaintiff.
“ The Manistee River Boom Company is a corporation organized under the laws of this State for the purpose of driving, sorting, and delivering logs, and its operations have been confined to the Manistee river and Manistee Lake. The Manistee River Boom Company sublet its work of sorting and delivering the ‘ Nav5 logs to the Louis Sands Salt & Lumber Company, the defendant, who, as said subcontractor of the Manistee River Boom Company, performed the actual work of sorting and delivering these logs to the mills of the parties of the second part, and it continued to do so from the time the plaintiff commenced the operations under the contract up to the time of the commencement of this suit, excepting the drive of 1909, which the plaintiff itself sorted at the gap, but which the defendant delivered to the respective mills of the parties of the second part, under a contract directly with the Manistee Navigation Company.
“The river scales apparently show that from 1905 up to and including the season of 1909 plaintiff has lifted, banked, and skidded a total of 22,694,160 feet of logs. Plaintiff gave testimony tending to show that about 17,-000,000 feet were driven to the sorting gap, of which about five per cent. sank. The millowners reported having received 12,471,646 feet, of which amount defendant reported 4,347,354 feet. It was conceded that about one-third of all the logs belonged to defendant. All of the advances provided for in the contract upon the basis of the up-river scales were paid, but no money was actually paid to plaintiff upon its deliveries of logs, except as it was charged upon defendant’s books with all prior advances.
“ The principal questions in the case concern the proper construction of the contract and the severability of the contract.
“ Construction of the Contract.
“The defendant claims that all advances made under the contract are payments upon the first lot of logs delivered, and so on, with the right to deduct all such advances from the contract price of the logs as delivered. The plaintiff claims that the advances apply to and protect all of the logs raised, lifted, and skidded under the contract, and only an amount proportional to the number of thousand feet in the logs actually delivered becomes ‘ due said second parties by reason of the advance money.’
“ It is apparent from the contract that raising, lifting, and skidding the logs would constitute the most difficult and expensive portion of the work, and that the provision relative to advancements was for the benefit of plaintiff in doing that work. The record demonstrates fully that defendant’s construction of the contract would nullify the benefit of the advances, and in effect compel plaintiff to carry the advances itself. We think that the plaintiff’s construction, adopted by the circuit judge, is in accord with the letter and spirit of the agreement and free from ambiguity.
“ Practical Construction.
“Assuming that a contract free from ambiguity is open to practical construction, we are satisfied that the court properly refused to apply it in this case. The claim rests mainly upon the bookkeeping of the parties and the failure of plaintiff to demand its pay. Whatever effect these matters might have had if continued, such effect was entirely done away with by the act of the parties. The contract runs eight years from September 1,1905. There was no drive in 1905, a small drive in 1906, and considerable drives in 1907 and 1908; the plaintiff having borrowed $3,000 for the drive of 1907. At a meeting of the parties in the fall of 1908, at which defendant’s president was present, representing it and taking part, the plaintiff claimed that the logowners—
“ ‘ Owed us something over $30,000. As a result of that meeting it was finally agreed that they should give us $15,000, that amount to be proportioned amongst the various parties to that contract on the basis that each held logs on the river bank, with the result that the defendant company paid us as their proportion of the $15,-000 something over one-third, something over $5,000. Mr. Filer said: “Now, Mr. Babcock, in accepting this advance, we want it understood that we are not acknowledging that interpretation of the contract, nor admitting your claim to be true,” and I said, “ Mr. Filer, we will accept the money on the basis that it does not prejudice our claims,” and it was so understood that the advance was made on that basis.’
“ Mr. Palmer, the plaintiff’s secretary, testified:
“ ‘The meeting was called to order, and Mr. Filer was elected chairman and Mr. J. O. Nessen secretary. The gentlemen asked me to make a statement. They asked me to make my statement in regard to our claim. I told them that there was just one of two things they could do under this contract. They had to either pay us for the amount delivered, or they had to keep their advances in the logs on the bank. The culmination of the whole meeting was that they decided to advance us $15,000 under this contract, and at the close of the meeting Mr. Filer made the statement that this money was given to us, not accepting or rejecting any construction of the contract, but was simply made as an advancement for us to continue business. * * * As a result of that meeting the logowners agreed to furnish this company $15,000, without prejudice or preference, or any construction of this contract, under the statement of Mr. Filer, as they agreed to. We billed it on the logowners as an advance. This was billed as per resolution of that meeting. This $15,000 that they furnished us was prorated upon the amount of the logs they had on the bank.’
“ Defendant’s witness Smith testified:
“ ‘Mr. Palmer took up the question of the contract at that time, and claimed that they owed us the advances on all the logs that were on skids up the river. The logowners objected to that entirely,, but finally agreed that Jthey would advance us $15,000 in order to continue operations. I am not certain, but it seems to me that it was stipulated that this advance should not have any different effect on the contract to any extent. I think Mr. Smith in substance said this, and I think Mr. Filer had something to say in that regard. * * *
‘Q. Now at that time this advance of $15,000 was agreed upon ?
‘A. Yes.
'Q. Yes; and when that was agreed upon, Mr. Field, it was stated definitely, I think you said, by Mr. Filer and Mr. Smith, that this advance was made without reference to what either party claimed as to the construction of the contract ?
‘A. Well, it was understood that this fifteen—
‘“Q. I am asking you what was said.
‘A. Well that was said, that this $15,000 was advanced, but not to have any different interpretation of the contract.
‘Q. Was not it stated that neither party waived their claims under the contract ?
‘“A. Why—
‘Mr. Navin: We object to that; he has stated what was said.
‘The Court: This is cross-examination.
‘Q. Wasn’t that stated, Mr. Field ?
‘A. I think it was.
“ ‘Q. Yes, sir.
‘The Court: Do you mean, Mr. Field, that both parties stated that their rights under the contract were not to be prejudiced.
“ ‘A. Yes, sir.
“ ‘The Court: By the loan ?
‘“A. Yes; your honor.’
“The arrangement to advance the $15,000, expressly-made without prejudice to either party’s interpretation of the contract, but leaving the same open for future determination, not only did away with any notion of a practical construction, but also disposed of the question of estoppel raised by defendant.
“ Severability of the Contract.
“Although the contract is joint in form between the Navigation Company, of the one part, and the logowners, of the other part, the contract contemplated a delivery to each logowner and millman of his own individual logs, and, for that purpose, required the furnishing by each, and attachment to the contract, of his individual stamps and marks. From the very beginning down to the commencement of suit, the parties treated the contract and executed it, except as to the unidentified logs, as a separate contract as to each. When the logs were scaled upon the river bank, they were marked with the owner’s mark, and each month the scale of his individual logs was served upon him, and upon that scale he made his 50 per cent, advance required by the contract. After the logs were delivered to the owner, they were scaled and sawed into lumber at his mill, and the plaintiff given a report of such scale. Not only does the contract require delivery to be made at the respective mills, but payment is to be made on the 10th of each month ‘ for all logs delivered to the respective mills of said parties of the second part,’ etc., and throughout the owners treated this as an individual and not a joint liability. In fact, from the outset the separate millowners kept separate accounts with the Navigation Company, and when they advanced the $15,000, each paid his pro rata share, based upon their separate interests in the logs then on the banks, as shown by the river bank scale.
“We are therefore of the opinion that the declaration was properly planted upon the agreement as a separate contract with the defendant for the cause of action set forth.
“ The Declaration.
“We do not think there is any force in the objections that there is a misjoinder of causes of action in assumpsit and tort in the same count, or that the assignments of breaches are based upon torts which are not available because of the lack of proper averments of waiving the tort. The sixth assignment of a breach was withdrawn from the consideration of the jury and need not be considered. The first is unquestionably in assumpsit. The second seeks to recover the difference between the amount due plaintiff, upon logs actually delivered to defendant, under the contract scale and under the scale actually used by defendant, and is in assumpsit. The third is for the amount due under the contract upon certain logs belonging to and delivered to defendant, for which it reported no scale and made no account, and is also properly in assumpsit. The fourth is unquestionably in assumpsit. The fifth is that the defendant so wasted the logs in manufacturing them into lumber as to decrease the amount which plaintiff would have received under the lumber tally if the logs had been fairly and economically sawed, and we think may fairly be treated as in assumpsit. In substance, the assignments objected to are upon the theory that plaintiff performed its part of the contract by recovering and delivering to defendant its sunken and deadhead logs, but that defendant did not perform its part of the contract by paying to plaintiff the compensation for its services to which it was entitled under the contract upon the basis of the number of thousand feet in the defendant’s logs which it delivered to the defendant.
“ Proof of the Breaches and Damages Thereunder.
“Second. The contract required that the scalers should make a ‘fair and equitable scale.’ There was testimony to the effect that there was a difference between ‘ a fair and equitable scale’ and a ‘merchantable scale,’ that a ‘ fair and equitable ’ scale was much more liberal than a ‘merchantable scale,’ and that the difference was about 47 per cent. There was also testimony that the logs in question were scaled at defendant’s mill by merchantable scale. There was also much testimony to the effect that there was no difference between a ‘ fair and equitable ’ scale under Doyle’s rule and a ‘ merchantable ’ scale under the same rule. Since the contract determined the kind of scale which was to be applied prior to the supplemental agreement, the determination of the scalers appointed by the contract would not be final unless they used the kind of scale designated by the contract. While the testimony as to the amount of the damages on this account is not very satisfactory we cannot say that there was nothing for the jury to pass upon.
“ The making of the new agreement' as to the mill scale by lumber tally related to the future, and should not be held, as a matter of law, in our opinion, to conclude the rights of the parties under the prior arrangement. It should, however, exclusively govern their rights after it took effect.
“Third. It is strenuously insisted that there is no definite evidence whatever on the part of plaintiff to support this breach, and that, on the other hand, the defendant fully accounted, by the positive testimony of witnesses having first-hand knowledge, for every log delivered to it by plaintiff. The plaintiff’s case upon this head is necessarily based almost entirely upon estimates, which, for the years prior to 1909, amount to little more than mere conjecture. The drive of 1909, however, was sorted by the plaintiff, and as to this drive we think the testimony fairly presents a question of fact for the jury as to whether the defendant scaled and accounted for all of the logs delivered to it.
“Fourth. There is no testimony in the record of sufficient definiteness to warrant the jury in finding that the plaintiff suffered any damages on account of delay in sawing the logs, and the defendant’s testimony is full and positive to the effect that no loss occurred by reason of the sinking of the logs. The case of plaintiff is based upon conjecture, met by definite and positive testimony, and the jury should have been instructed that no damages could be awarded for this alleged breach.
Fifth. Under this head, also, the testimony for plaintiff is too vague, indefinite, and limited to furnish any basis for a definite award of damages. Furthermore, the testimony of the men who actually did the work of manufacturing, and who kept the tally agreed upon in the supplemental agreement, is all to the same effect; that the work was done and the tally kept in the usual way, and as defendant handled its own logs, and in this form of action such tally is conclusive on the plaintiff.
“ The Defense of Recoupment.
“ It is manifest that the principal object of the lumbermen in entering into the contract was to obtain the delivery of their deadhead and sunken logs at their mills at the earliest practicable moment. To this end the contract required plaintiff, ‘each year after 1905,’ to ‘make at least one drive or delivery of all floatable logs to said second parties.’ A failure of plaintiff to deliver to defendant in the drive of one year all of its then floatable logs raised and skidded the preceding year would be a breach of the contract, for which it would be liable in damages for any injuries to such floatable logs thereafter, whether from forest fires, floods, the weather, or other causes.
“The contract concerned ‘deadhead’ and ‘sunken’ logs only, and plaintiff had no right under the contract to advances upon any other kind of logs. If plaintiff lifted and skidded other kinds of logs belonging to defendant, and caused them to be scaled and reported to defendant as ‘ deadhead ’ and ' ‘ sunken ’ logs, and reeeived advances because thereof, this constituted a breach of the contract on its part, and entitled defendant to recoup to the extent at least of such advances. The contract does not define the terms ‘ deadhead’ and ‘sunken’ logs, and there is a conflict of testimony as to what kind of logs constituted such logs, so that it was a question of fact for the jury as to whether the logs in question were ‘ deadhead ’ and ‘ sunken ’ logs or not. And we are of the opinion that the court erred in instructing the jury that the determination of this question was committed to the scalers by the contract, and that if they áeted in good faith their determination was final. Mr. Babcock’s instructions to the scalers were ‘to scale all logs lifted.’
“We are also of the opinion that the court erred in his instruction relative to certain logs which had been banked and skidded in 1906 or 1907, and which defendant claimed had largely deteriorated in value through not being brought down as required by the contract. After instructing the jury that defendant would be entitled to damages for such depreciation, the court further said:
" 'But, gentlemen, that instruction is qualified, and I want you to mark the qualification, because it is somewhat complicated. It is the claim of the plaintiff in this\case that it has been hindered in its operations under this contract, because the defendant has not paid it the moneys that it claims to be due from the defendant ; and I say to you, if the logs above jam 1 have remained there because of the default of the defendant in not paying what you find to be due plaintiff under the contract, you will not allow the defendant anything at all either for depreciation or loss of logs above jam 1.’
“There is no evidence upon which to base this qualification. Plaintiff made no demand upon defendant for money due it under its construction of the contract, nor intimated.to the defendant that it was construing the contract differently from defendant, till late in 1908. On the contrary, Mr. Babcock testified that they refrained from making bills on defendant for moneys due upon delivery of logs:
“ ‘ We sent no bill for the balance due, because by sending a bill I believed we would be admitting the correctness of the reports for lumber delivered at the mill of the defendant and the other mills during the existence of this contract. The reports I refer to are the mill tallies of 1906 and 1907, and the lumber tallies for 1906 and 1907, and the lumber tallies for 1908 and 1909, showing the lumber delivered under the contract and logs delivered under the contract.’
“Under such circumstances we think that the qualification should have been omitted.
“ We find no error in the rulings of the court rejecting statements of Mr. Cartier as to abandonment of the contract, nor in instructing the jury that there was no evidence in the case of a voluntary abandonment.
“We have only considered such of the 377 assignments of error as we deemed necessary to settle the legal principles upon which a retrial should be had, and which should be sufficient for determining the questions of fact in the case. The record is unduly voluminous, and, for purposes of taxation of costs, will be limited to 500 pages, and the briefs to 200 pages.”

The judgment is reversed, and a new trial ordered.

Steers, C. J., and Moore, McAlvay, Brooke, Kuhn, Stone, and Ostrander, JJ., concurred


source: Caselaw Access Project

author: Bird, J.

license: Public Domain

text:
    SHARPLESS SEPARATOR CO. v. BROWN.
    1. Set-Off and Recoupment — Contracts—Assumpsit—Recoupment for Damages Resulting from Labor Expended on Subject Matter — Sales.
    Recoupment must arise out of and be based on the contract declared on and proved by plaintiff.
    2. Same — Justices of the Peace — Pleading.
    Defendant, who established his claim that the contract under which he purchased a cream separator was conditioned upon its working properly, and that the machine failed to work, oould not recoup his damages in an action on the common counts, instituted before a justice of the peace, for labor and materials expended in attempting to make the separator operate satisfactorily, the contract established by the verdict being different from the one relied on by plaintiff.

      Error to Shiawassee; Miner, J.
    Submitted June 26, 1911.
    (Docket No. 112.)
    Decided March 20, 1913.
    Assumpsit by the Sharpless Separator Company .against Ered Brown and another for the purchase price of goods sold to defendants. Judgment for defendants. Plaintiff brings error.
    Beversed unless defendants remit judgment in recoupment.

      Walbridge & Kelley, for appellant.

      A. L. Chandler and George E. Pardee, for appellees.
   Bird, J.

The plaintiff began suit in assumpsit to recover the purchase price of a cream separator which it claims to have sold and delivered to defendants on their written order. The defendants resisted the claim on the ground that the sale was a conditional one, depending upon the separator doing good work and working as well as other separators which were then being sold upon the market; that a test was made of the separator; that it failed to work as represented; and that plaintiff was advised of its failure to do the work and of defendants’ refusal to purchase it. The .defendants also gave notice under their plea that they had expended money and labor in their efforts to make the separator work satisfactorily and that they would claim the right upon the trial to recoup and offset the same. As the testimony was in conflict as to what the contract was, the trial court submitted the question to the jury to determine whether it was absolute or conditional. They found with the defendants and assessed their damages at $10.

While the trial court was submitting the case upon defendants’ theory to the jury, he made use of the following language:

“ If defendants are entitled to recover, they would be entitled to recover certain damages, if you find they were put to any damages. * * * So in this case, if defendants are entitled to recover, and you find that Mr. Brown and his man and team or automobile, whichever it was— 1 don’t remember — went to Mr. Leonard’s and spent certain time in trying to make the machine run, whatever that time was worth, whatever expense he incurred at that time in paying his man or whatever his team was worth or automobile, whichever it was, he would be entitled to a verdict for that amount.”

Plaintiff insists that this instruction was error for the reason that, if the jury found with defendants that the contract was different from that sued upon, the law would permit of no recoupment.

The rule is general in assumpsit that recoupment must grow out of the contract sued upon. Molby v. Johnson, 17 Mich. 382; Rens v. City of Grand Rapids, 73 Mich. 237 (41 N. W. 263); Helwig v. Lascowski, 82 Mich. 619 (46 N. W. 1033, 10 L. R. A. 378). Applying this rule to the case under consideration, it follows that, if defendants were permitted to recoup, it would have to be against the contract which plaintiff sued upon, and not against the contract which it set up in opposition to plaintiff’s. A similar question arose in the case of Haldeman v. Berry, 74 Mich. 424 (42 N. W. 57). The plaintiff and defendant disagreed as to what the contract was, and defendant was allowed to recoup certain damages which he claimed. In commenting upon that phase of the case the court said:

But, under the circumstances of this case, we are satisfied that the recoupment pleaded by the defendants cannot be maintained. As already shown, the plaintiff sued upon a contract which did not exist. He declared evidently upon the memorandum of February 14, 1882, left by Collins with Mason. This was not the contract. The contract was closed on February 17, 1882, by the reply of Collins to the letter of Mason, which modified and altered the memorandum as to the time of the delivery of the asphaltum. The plaintiff must fail, because he cannot establish the contract he declares upon. Can the defendants, in their defense, prove another and different contract than the one sued upon, and then recoup damages for a breach of such contract ? We think this question is settled by previous decisions of this court. Morehouse v. Baker, 48 Mich. 335, 339 (12 N. W. 170); Holland v. Rea, 48 Mich. 218 (12 N. W. 167). These cases hold that the claim of recoupment must grow out of the contract sued upon, and not upon another and a different one.”

As the plaintiff failed to establish the contract which it sued upon, we are of the opinion that the exception to this part of the charge is well taken. Aside from this question, the case seems to have been well and fairly tried, and we find nothing among the other assignments which calls for a further consideration of them.

For the error pointed out, the judgment will be reversed, and a new trial granted, unless the defendants, within 20 days, remit their judgment of $10; in which event the judgment will stand affirmed. The plaintiff will recover its costs in this court.

Moore, Brooke, Stone, and Ostrander, JJ., concurred.


text:
    TOWNSHIP OF DEEP RIVER v. VAN ANTWERP.
    1. Taxation — Personal Tax — Actions—Affidavit.
    In a suit to collect a personal tax where defendant claimed that the township treasurer had omitted to file the affidavit and statement required by 1 Comp. Laws, § 3878,1 How. Stat. (2d Ed.) § 1823, but there was testimony disputing the contention, the issue was one of faot for the jury.
    2. Same — Residence.
    Upon the question of the weight of evidence as to defendant’s place of residence, held, that a new trial was properly denied.

      3. Trial — Argument.
    Appellant can only review error resulting from alleged improper argument if a ruling of the court is obtained; and in case the court interposes and corrects the improper statement so as to remove any injurious effects from the minds of the jurors, the error is not prejudicial.
    Error to Arenac; Sharpe, J.
    Submitted June 10, 1912.
    (Docket No. 65.)
    Decided March 20, 1913.
    Assumpsit by the township of Deep River against Philip W. Van Antwerp for unpaid taxes on personal property. Judgment for plaintiff. Defendant brings error.
    Affirmed.

      S. E. Hayes, for appellant.

      B. J. Henderson, for appellee.
   Bird, J.

This suit in assumpsit was brought to recover the amount of a tax upon personal property assessed against the defendant in the township of Deep River, Arenac county, for the year 1910. The jury returned a verdict for $441, the full amount of the tax. A new trial having been applied for and denied, the defendant assigns error in this court.

It is urged that the trial court was without jurisdiction to render the judgment because of the failure of the township treasurer to file with the county treasurer the statement and affidavit required by the tax law (1 Comp. Laws, § 3878, 1 How. Stat. [2d Ed.] § 1823), before commencing suit. It is claimed that this failure is shown on the face of the proceedings; and that the trial court was in error in refusing to dismiss the case upon defendant’s request. Counsel is undoubtedly correct in his contention that the filing of the verified statement is necessary in such a case to confer jurisdiction (Township of Port Huron v. Potts, 78 Mich. 435 [44 N. W. 289]; Northwestern, etc., Lumber Co. v. Scott, 123 Mich. 357 [82 N. W. 76]), but we think he is in error as to what the record shows. The testimony of the deputy county treasurer and his own tended to establish the fact that the verified statement was not on file when the suit was commenced. The testimony of the township treasurer, taken in connection with the date the statement was verified and filed and the date of the warrant, made the question one of fact. The trial court so viewed it and submitted the question to the jury, and their determination must be taken as final on the question of jurisdiction.

Complaint is made that the finding of the jury on the question of residence was against the weight of the evidence. The defendant testified that he was not a resident of plaintiff township in 1910, 'and had not been for ten years prior thereto; that in 1900 he sold his mercantile business in the village of Sterling, in that township, and moved his personal property to St. Clair township, in St. Clair county, and that he was assessed on his personal property in 1910 in St. Clair; and that he voted there in the spring of 1910. In opposition to this it was shown that the defendant owned a house in Sterling, and that it was occupied a portion of the year by himself and wife; that for several years they had spent some part of the time with their married daughter in St. Clair. It was shown by the election records that he had voted in plaintiff township as late as the fall of 1908; and it was further shown that he had been assessed and had paid taxes on his personalty for several years without protest. It further appeared that defendant’s business interests were mostly in Deep River township. There were other bits of evidence bearing on the question of residence which, taken in connection with those herein given, clearly made it a question of fact for the jury. If the jury believed the evidence offered by the township, they were justified in reaching the conclusion which they did.

Further complaint is made because of certain statements made by counsel for plaintiff in his address to the jury. Exceptions were taken in each instance, but on only one did the trial court make a ruling; therefore this is the only one that is properly before the court for review. Bates v. Kitchel, 166 Mich. 695 (132 N. W. 459). This statement was, "He has mortgages in that township.” The trial court at once corrected the statement, and suggested "that it ought not to have been made.” If it can be said that it was an improper statement, the action of the trial court counteracted any injurious effect which it might have had in the minds of the jurors.

There appearing to be no reversible error in the record, the judgment of the trial court will be affirmed.

Steere, C. J., and Moore, McAlvay, Brooke, Stone, and Ostrander, JJ., concurred.


author: McAlvay, J.

text:
    CARDINAL v. HOUGHTON COUNTY STREET RAILWAY CO.
    1. Negligence — Street Railways —Collision —Highways — Gross Negligence — “Last Clear Change” — Discovered Negligence-Contributory Negligence.
    No right of recovery exists in a personal injury action if plaintiff was guilty of contributory negligence, which was or could have been discovered by defendant in time to avert the accident, unless it also appears that defendant was chargeable with gross negligence.

    2. Same — Definition.
    Gross negligence, as applied by this court in cases of discovered negligence, means either intentional failure to perform a manifest duty, in reckless disregard of the consequences, as affecting life or property, or, on the other hand, thoughtless disregard of consequences without the exercise of any effort to avoid them.
    3. Same — Gross Negligence — Contributory Negligence.
    Plaintiff could not recover under the rule where he was injured in a collision at a curve on defendant’s track which he attempted to drive across, after looking and failing to observe an approaching car, upon testimony not in dispute that the car moved but one foot after it struok his buggy, that he first observed the car when his horse was on the track, and the oar was alongside the rig, aind he had time after discovering the car to pull the horse off the track out of danger.
    On rehearing granted May 4, 1912.
    Judgment for plaintiff reversed,
    new trial denied March 20, 1913.

      Allen F. Rees, for appellant.
    P. H. O'Brien (W. A. Burritt, of counsel), for appellee.

       As to doctrine of “ last clear chance,” see notes in 55 L. R. A. 418: 7 L. R. A. (N. S.) 132; 17 L. R. A. (N. S.) 707; 19 L. R. A. (N. S.) 446; and 27 L. R. A. (N. S.) 379.

   McAlvay, J.

This case was originally submitted to this court upon briefs, before five of the justices sitting, and an opinion was handed down reversing the judgment and granting a new trial. Cardinal v. Railway Co., 165 Mich. 155 (130 N. W. 62?). The justices sitting agreed upon a reversal on the ground of contributory negligence of plaintiff, but disagreed upon the question as to whether, as a matter of law, under the facts, it could be said that the doctrine of discovered negligence was not applicable. Upon the rehearing the case was argued at length by the attorneys for both sides before the full bench.

In the former opinion we have said all that was necessary upon the question of contributory negligence of plaintiff. The question of discovered negligence, however, requires consideration. If that doctrine of discovered negligence is to be applied in the instant case, it must be upon the ground that the conduct of defendant’s employés, after the negligence of plaintiff was discovered, was of a character to warrant its application. The negligence of the defendant who is sought to be held liable under this doctrine, as interpreted by this court, is not ordinary negligence, but no recovery can be had without intentional wrong on the part of the defendant or his agents after the discovery of plaintiff’s negligence. Putt v. Railway Co., 171 Mich. 216 (137 N. W. 132), where the cases decided by this court are cited. Berry v. Railway Co., 173 Mich. 181 (138 N. W. 1038), citing Knickerbocker v. Railway Co., 167 Mich. 596, 602 (133 N. W. 504, 507). In the last case cited, which is similar to the instant case, the court, among other things, said, upon this question of discovered negligence:

“The term * gross negligence ’ has been used in cases decided by this court, and has a definite meaning, when referred to as authorizing a recovery for a negligent injury, notwithstanding the contributory negligence of the plaintiff. It means the intentional failure to perform a manifest duty, in reckless disregard of the consequences as affecting the life or property of another. It also implies thoughtless disregard of consequences, without the exercise of any effort to avoid them” — citing cases.

There is entire harmony in the decisions of this court upon this question.

The facts in this case, as found in the former opinion, do not warrant, under the rule just stated, the application of the doctrine of discovered negligence. It appeared from the testimony, both on the part of the plaintiff and defendant, that the car which struck the front wheel of plaintiff’s buggy moved a distance of but one foot after it struck. This also appeared from plaintiff’s own testimony. He testified when he discovered the car it was right alongside of him; that his horse was then on the track, which he was attempting to cross; that he had time after discovering the car to pull the horse around off from the track out of danger. This would have been impossible had the car not been under control. This record does not show an intentional failure to perform a manifest duty in reckless disregard of the consequences as affecting the life or property of plaintiff, nor does it imply a thoughtless disregard of consequences without the exercise of any effort to avoid them.

The judgment of the circuit court is reversed, and no new trial will be granted.

Steere, C. J., and Moore, Brooke, Kuhn, Stone, Ostrander, and Bird, JJ., concurred.


author: Moore, J.

text:
    SUPREME COUNCIL OF LADIES’ CATHOLIC BENEVOLENT ASSOCIATION v. SCHERER.
    1. Insurance — Interpleader—Change of Beneficiary. In a suit for interpleader, evidence examined, and held, not sufficient to establish a change of beneficiary as claimed by one of the defendants.
    2. Variance — Equity—Answer—Pleading. Under a cross-bill charging that an alleged change of beneficiary was procured by duress, undue influence, and fraud, denying also averments of the cross-bill of other defendants who set up a change of beneficiary, and who did not urge the olaim of variance in the lower court where an amendment • might have been allowed, appellants were not entitled to relief on appeal, on the theory that the evidence showed forgery, not duress or undue influence.
    3. Costs — Interpleader. An allowance to the interpleading complainant out of the fund paid into court belonging to defendants, of $45, including costs paid and a solicitor fee of $30, was not unreasonable.
    Appeal from Wayne; Donovan, J.
    Submitted April 3, 1912.
    (Docket No. 26.)
    Decided March 20, 1913.
    Interpleader by the Supreme Council of the Ladies’ Catholic Benevolent Association against Theodore Scherer and Andrew and Barbara Rinke. From a decree for defendant Scherer, defendants Rinke appeal.
    Affirmed.

      Jonathan Palmer, Jr., for appellants.

      James F. Hill, for appellee.
   Moore, J.

This is a case brought to determine who is entitled to the insurance ($1,000) carried upon the life of Catherine Scherer, deceased. On May 1, 1907, the original certificate was taken out by Mrs. Scherer. This was before she was married. Her father and mother, the defendants Andrew Rinke and Barbara Rinke, were named as beneficiaries therein. Later, upon the marriage of Catherine Rinke tó defendant Theodore Scherer, and on October 24, 1907, she had the certificate changed, making him the beneficiary. It is claimed by defendants Rinke and Rinke that on September 29,1910, Mrs. Scherer again secured a change in the certificate, making her father and mother the beneficiaries. Mrs. Scherer died December 1, 1910. The defendant Scherer denies that Mrs. Scherer brought about this change in the certificate, and claims that he carried $2,000 insurance in favor of his wife, and that, from the time he was named in the certificate as beneficiary, he paid the assessments and dues upon both certificates until the death of his wife.

The case was tried in open court. In rendering a decision, the trial court expressed himself in part as follows:

“The policy was changed unknown to the husband. As such insurance is regulated largely by the by-laws of the society, which is mainly a law unto itself, proof of the change determined the ownership, if lawfully made; and, excluding illegal proof of Rinke and wife (opposite parties) and of interested officers, I find:
First. The husband took out the insurance and paid the premiums to keep it in force, lived happily with his wife, who was very sick and ill for a long time before her death.
Second. That a change by alleged transfer, brought about by a president in her interest, was made to the father and mother of deceased shortly before her death; that no notice was given the husband, as required, he being then the real owner; that the transfer is clearly not in the handwriting of the deceased, not by owner’s consent, and is clearly unlawful in many ways, namely: For forty times or more the deceased wrote and spelled her name ‘Catharin Scherer,’ while the transfer is ‘Catharine Schereer,’ yet the woman was well educated. Surely some one else did the transfer act, and it was not done (in three or more ways) as the constitution provided.
Third. The main transferee, Mrs. Rinke, was president of the branch office and controlled the assignment, together with her friend, who was recorder. They were two interested parties, unfriendly to the real owner of the $1,000.
“ Thus the quantity of the proof, the manner of dealing, is so tainted with irregular acts, doings and omissions that I am forced to find that the legal and equitable owner of the fund is the cross-complainant, the husband of the deceased, Theodore Scherer.”

Section 14 of the constitution of the order requires that, in order to obtain a duplicate policy (where one is lost), the insured must sign and forward an affidavit showing the facts as to the policy being lost or beyond the control of the insured; it must also show whether the then beneficiary paid any of the assessments; and, if the beneficiary had paid one or more assessments, a release must be obtained from him. This section states that, if a policy is obtained or a change made in the beneficiary not in strict accordance with this section, the policy and change of beneficiary is null and void.

It is the claim of Mr. Scherer that, immediately after Catherine Scherer was taken from her home by the mother, Mrs. Rinke, Mrs. Eva Sheridan wrote to one of the supreme officers and obtained a duplicate of Catherine’s policy, without furnishing the required affidavit to show what had become of the existing policy, and without showing whether Theodore, the beneficiary, had paid any of the assessments or not, and that, although Theodore Scherer had paid the assessments and dues on his wife’s policy from the time of their marriage to her death, no release was asked or obtained from him. It is claimed by Mr. Scherer as a legal proposition that, without this affidavit and release from Mr. Scherer, the transfer is void. It is also claimed, as a matter of fact, that Mrs. Scherer did not sign the request for change of beneficiaries. On the part of Mr. and Mrs. Rinke, it is claimed that, as to the question of fact, Mrs. Scherer did sign the request for a transfer. It is claimed as to the question of law that, if the company consented to the transfer without the affidavit and release from Mr. Scherer, he cannot now raise the question. Authorities are cited as to the legal question, and it is argued at length.

In our view of the case, it is not necessary to discuss the question of law presented, as the question of fact is conclusive.- Mrs. Barbara Rinke was president of the local branch of complainant association. Mrs. Sheridan was a warm friend of hers. These two persons and a sister of Mrs. Rinke furnished nearly all of the testimony tending to sustain the claim of Mr. and Mrs. Rinke. The certificate in which Mr. Scherer is named as beneficiary has at the bottom the written acceptance of “Catherine Scherer.” The blank portions of the application for a change of beneficiary, dated September 29,1910, are filled with an ordinary black lead pencil. In the body of it the name is written “Catherine Schererer.” This application is unsigned. At the bottom of the certificate itself it purports to be sealed, signed, and attested by Barbara Rinke, president; the signature being made with a blue pencil and by Eva Sheridan, recorder, the signature being made with a pen carrying black ink. Then follows the acceptance which has a signature written with a blue pencil “Catherine Sherer.” There are many other exhibits in the case showing the handwriting of Mrs. Scherer and some showing the handwriting of Mrs. Rinke. A post card mailed at Cleveland July 20, 1910, in the handwriting of Mrs..Rinke, was addressed “Catherin Sherer, 1493 Canfield street, Detroit, Mich.” A comparison of these signatures does not satisfy us that Catherine Scherer ever requested that the beneficiary in her certificate of insurance should be changed from Theodore Scherer to Barbara Rinke and Andrew Rinke.

In the supplemental brief the solicitor for defendants Rinke and Rinke says:

“ While upon the trial in the lower court the proofs produced by defendant Scherer are at variance with the charges made in his cross-bill, and develop an attempt to prove forgery; the charge in the cross-bill being that the signature of the deceased was procured under the undue influence, duress, by fraud and false representations by which the deceased was induced and compelled to make this designation of new beneficiary. This certainly is not supported by the proof in which they attempted to show a forgery ”—

And argue that, because of the variance, the decree should be reversed. In the answer of the defendant Scherer to the cross-bill of the other defendants, we find the following:

“This defendant denies the allegations contained in paragraph No. 15 of said cross-bill. This defendant alleges that the said Catherine Scherer did not revoke the nomination of this defendant as beneficiary, and that any revocation attempted was the act of the said Barbara Rinke, and not the act of the said Catherine Scherer; such act being accomplished by the fraud, force, duress, and false representations of the said Barbara Rinke, the said Catherine Scherer being helpless as a child under the complete control and direction of the said Barbara Rinke.”

It will be remembered that Mr. Scherer was the beneficiary named in a certificate about which there was no question. The defendants Rinke were asserting that the beneficiary had been changed. He was answering that assertion. We do not discover that in the court below or in the original brief there was any claim of variance. Had that claim been made, if it was thought it had merit, an amendment would have been allowed. We think the present claim is without merit.

In the brief of counsel for defendant Scherer, we find the following:

“The supreme council of the L. C. B. A. having filed the bill of interpleader herein and paid the $1,000 involved into court, the court below, under the decree of inter-pleader, allowed Keena, Lightner & Qxtoby, solicitors for said supreme council of the L. C. B. A., to withdraw from said $1,000 fund, as their costs, the sum of $45, being a filing fee of $5, stenographer fee, $3, solicitor fee of $30, and a decree fee of $7. On the taxation of costs for Theodore Scherer, the appellee, the court below refused to allow the appellee the said $45 that had been paid out of the said $1,000 that had been decreed to belong to the appellee. If the honorable Supreme Court affirms the decree of the court below, it is respectfully prayed that the costs of the court below be retaxed in behalf of the appellee, together with his costs herein.”

The uncertainty about where to pay the fund was not the fault of the insurer. The costs allowed were within the discretion of the court, and are reasonable in amount.

The decree is affirmed, with costs of both courts to defendant Scherer from the defendants Rinke and Rinke.

Steere, O. J., and McAlvay, Brooke, Stone, and Ostrander, JJ., concurred. Bird J., did not sit.


author: MoAlvay, J.

text:
    QUINN v. TULLY.
    1. Contracts — Profit Sharing Agreement — Accounting—Evidence-Mines.

      Held, upon a consideration of conflicting testimony, that an oral agreement as claimed by complainant in his bill for accounting, to procure options on and develop adjoining mining properties and to share profits and expenses, was established by the evidence. Where oomplainant and defendant orally agreed to secure options on adjoining parcels of land containing mineral, to divide profits and expenses, and to interest capital in the development, and defendant procured an option on one of the parcels in his own name, cleared up the title, and obtained stock in a corporation which was organized to develop the mineral rights, defendant claiming that the particular piece of land was not included in the agreement, a bill for an accounting was the proper remedy, and was not open to the objection that it would enforce specifically an oral contract relating to real property.
    3. Same — Laches.
    Mere lapse of time, not accompanied by a change of defendant’s position to his disadvantage, would not bar complainant’s remedy, and a delay of six or more years, during which complainant supposed his interest in the property was recognized by defendant, and litigation over the title was in process, was insufficient to constitute laches as to complainant, who filed his bill within a year after discovering the true situation.
    Appeal from Marquette; Cooper, J.
    Submitted January 4,1912.
    ( Docket No. 163.)
    Decided March 20, 1913.
    Rehearing denied June 2, 1913.
    Bill by John H. Quinn against William J. Tully and others for an accounting. From a decree for defendants, complainant appeals.
    Reversed.

      William P. Belden, for complainant.

      M. S. McDonough, F. D. Mead, and Charles H. Watson, for defendants.
   MoAlvay, J.

The bill of complaint in this case was filed by complainant against defendant William J. Tully for an accounting between them for one-half of the profits arising to said defendant, realized by him from an option and mining lease on valuable mineral land located in Iron county, claimed by complainant to have been obtained for their joint benefit. The other defendants are: Margaret Tully, the wife of the principal defendant; the Tully Mining Company, which was organized to take over this option and mining lease; and the Crystal Falls Iron Mining Company, which had taken an agreement, or sublease, from the Tully Mining Company. This dispute affects, only the one-half, being 200 shares, of the capital stock of the Tully Mining Company which was taken by said Tully at the time said corporation was organized (of which he gave one share to his wife), and one-half of the profits arising therefrom. An injunction was prayed for against defendant Tully to restrain him from selling or transferring said stock in the Tully Mining Company, or his interest in the royalties under the sublease, to the defendant the Crystal Falls Iron Mining Company, one-half of which complainant prays may be decreed to be accounted for and one-half of said stock transferred to him. All of the defendants, except the Crystal Falls Iron Mining Company, have filed separate answers, specifically denying that complainant ever had any interest or claim in the option and lease of the property in question, and each of the defendants claims the benefit of the statute of limitations.

As to the defendant the Crystal Falls Iron Mining Company, a stipulation in the case was entered into providing that it might continue during the pendency of this litigation under the terms of its lease with the Tully Mining Company, and under its agreement with defendant Tully and other stockholders to pay royalties, and that such defendant might be relieved from filing an answer or other pleading, and the case might be deemed at issue without entering its default, providing that such payment of royalties should not prejudice any right of complainant to demand an accounting- from defendant William J. Tully and Margaret Tully of such proportion of royalties as the court might decree complainant entitled to recover, and that such sums so paid should be included in any accounting ordered by the court. Issues were duly joined upon the answers of the defendants. The judge of the court being disqualified, the cause was heard before a judge from an adjoining circuit, called in for that purpose. After such hearing, a decree was entered by said court, denying complainant any relief, and dismissing his bill of complaint. Complainant has appealed from this decree to this court.

No statement which will give an understanding of the dispute in this case can be made which will not be of considerable length, as is evidenced by the attempts on the part of both parties in their briefs.

In stating the following facts, out of which this litigation arises, a better understanding will be had if they are stated in the order in which they occurred, and in every instance where a dispute occurs it is stated clearly and distinctly.

Complainant had lived at Ishpeming many years, and was acquainted with the officers of the large iron mines operating there, and at the time was actively interested in securing options on mineral lands in several counties. He was selling lubricating oils as his principal business. Defendant Tully had once worked in iron mines at Ishpeming and was acquainted with the bfficials of the mining companies operating on the Menominee Range.

Defendant Tully, on July 2, 1902, when he first met complainant, was conducting a store at Iron River, where he had lived for many years. On this date complainant was on a train going from Ishpeming to Iron River with two mining men to look at what was known as the Peterson property, in which he afterwards acquired an interest. Defendant Tully was on the same train and joined complainant and the others in a conversation which they were having relative to iron ore property, and mentioned what he called the “Baker property,” which he considered promising and a good place for exploration. Arriving at Iron River, complainant and defendant Tully walked together from the train uptown. In the evening, by invitation of Tully, complainant went to his store, where Tully urged him to go and see the Baker property, which he considered the best in the district, and encouraged him to join him in exploring it, saying he was not able to undertake it alone. Complainant did not go at this time, but promised that when next he came to Iron River he would visit the property with him. Between the 1st and 15th of August following, he came again to Iron River, where he met Tully, who called his attention to his promise, and they agreed to go together to the Baker property on the next day. Tully prior to this time had not engaged in the work of exploring or developing mining property. He had held an option on this Baker property, which lapsed because he was unable to dispose of it. On their way to see this property they walked past the Caspian mine, which was in the valley below on the section next south, which cornered upon it. They went up the valley of a small stream which flows down from the Baker property. They walked across the Baker property, examining a shallow pit, which complainant thought indicated a formation the same as at the Caspian mine. They both supposed that the ore formation followed this valley up from the Caspian mine. The view from the Baker property down the valley confirmed this opinion.

The Baker and Houlihan properties were located side by side in the corner of adjoining townships. The Baker land, which they examined that day, is described as the S. $ of the S. W. i, and W. $ of the S. E. i, section 31, township 43 N., range 34 W. The Houlihan land, now known as the Tully mine, lies directly west of the Baker land, and is described as the S. i of the S. E. i, section 36, township. 43 N., range 35 W. The valley, down which the parties were looking when they were on the Baker land, extends from where they stood, in a southwesterly direction, and crosses the southeast corner of the 40 acres of the Houlihan land next adjoining the Baker property on the west. Tully encouraged complainant to join him while they were there on the Baker land, and again told complainant he was not financially able to explore it alone. Complainant expressed a favorable opinion of the situation and designated a desirable place to begin drilling, and claims that he said, as this was near the western line, the chances were that the big body of ore might be on the adjoining property to the west. Tully disputes this, claiming that complainant thought the ore lay on the east part of this Baker 40. Complainant testified that he said he would not care to join with him or spend money on the Baker property unless they could get the other; that Tully said to him the adjoining property on the west was known as the Houlihan property, owned by people in Escanaba, and mentioned the names of Fogarty and Dineen, and said he could secure an option or lease at any time at the same royalty asked by Baker on his property. All of this statement relative to the Houlihan lands is disputed by Tully.

These parties on this day called at the Baker house, and Tully introduced complainant as a mining man from Ishpeming, and said that they wanted to get an option again. Baker replied that they could have an option whenever they wanted it. In returning from the Baker property they walked across the middle of the Houlihan property. Complainant testified that they discussed on the way proposed methods of handling these options; that Tully proposed offering them for sale at a lump sum, but complainant advised that they should show confidence in the property by retaining an interest and offering leases at an excess royalty, which they would divide between them (the record shows that they afterwards adopted this plan); that Tully approved of this plan, and a definite verbal agreement was then made by which they were to share equally the expenses of securing and disposing of the options and the profits derived from doing so. Complainant agreed to put into the venture $1,000 to $2,000. He testified that he told Tully, who knew the fee owners of both properties, to get 90 days’ time on the Baker option before they were obliged to begin exploratory work, and in the meantime he would undertake to bring some one to begin the work; that when they had the Baker work under way, so as not to have two things on at the same time, they would take up the Houlihan property; that this plan was assented to by Tully.

It is proper to state here that the entire dispute in this case is relative to the Houlihan property. Defendant Tully” denies that the verbal contract made at that time covered the option to be obtained on that property. In all other respects as to the terms and conditions of the agreement entered into his testimony substantially agrees with that of complainant. There is no controversy in this case over the Baker option or the circumstances and conditions under which it was secured.

After this verbal contract was entered into, complainant sent Capt. Platto, local superintendent of the Ishpeming Mining Company, to look at the Baker property. He was in the employ of M. A. Hanna & Co., who had an option on the Peterson property in that vicinity. The Baker option was secured September 3, 1902, running to both parties. This option Tully showed Capt. Platto when he visited the property. He went over this Baker property with Tully at his request and examined it carefully for the purpose of reporting to his company. Complainant continued to be active in interesting parties in the option already secured and then wrote Judge Flannigan, then attorney for the Oliver Iron Mining Company, for that purpose. Judge Flannigan directed him to write to Dr. N. P. Hulst, vice president of the Oliver Iron Mining Company, which he did. Defendant was also active in securing exploratory work to be done and wrote the president of the Oliver Iron Mining Company and other parties on the same subject. These negotiations resulted in this company taking an option on the Baker property at a royalty of 14 cents per ton, being an advance of four cents.

Exploratory work was begun by it on this property November 17, 1902, as appears by a letter written by Tully to complainant. Soon after this, complainant (as he claims in pursuance of their agreement), wrote Tully and asked him if he had closed the option on the Houlihan property, as these operations would arouse interest in adjoining lands' and he was anxious to hurry securing that option. He received no reply to this letter, and Tully denies having received it, and testified that he preserved but a very small part of their correspondence and threw the rest in the waste basket.

January 18, 1903, Tully wrote complainant that the Oliver Company had reached the ledge, and on February 14th following, that they had struck ore on the Baker property. Complainant testified that he then wrote Tully again saying they ought to close the Houlihan matter or some one else would get the benefit of their work. He received no reply to this letter. Tully also denies having received it.

In June, 1903, complainant visited these properties. He found that the Yerona Mining Company had its drills on the Houlihan property, but had suspended work. Tully told him that they had struck ore on the property. He also told him that he had taken an option on this property and turned it over to the Yerona Mining Company, and complainant supposed that he was included in the option. Tully also told complainant that the Yerona Mining Company had suspended work because the title was defective.

On January 10, 1903, Tully, without the knowledge of complainant, had obtained an option on the Houlihan property from Fogarty and others, in his own name, and on February 21, 1903, had transferred this option to the Yerona Mining Company. No exploratory work was done on the Houlihan property after this company suspended operations in the summer of 1903 until July, 1905.

In June, 1903, the Oliver Company also discontinued work on the Baker property, and threw up the option. To avoid forfeiting this option these parties hired men and continued the exploratory work for about 30 days; each paying one-half of all expenses. They then endeavored for several months to find some one to take the Baker option, and in the fall of 1903 the Penn Mining Company began exploratory work, which continued until June, 1905.

On December 9, 1904, complainant and Tully took a mining lease from Baker, and at the same time he agreed to waive the payment of the minimum royalty for six months, provided they would continue their exploratory work. In June, 1905, as stated, the Penn Company quit work, and surrendered their option, and complainant and Tully were obliged to pay the minimum royalty and otherwise to comply with the terms of the lease until the property was taken by the controlling owners of defendant the Crystal Palls Iron Mining Company, at an advance royalty of six cents per ton, and agreements were entered into assuring each one-half of this advance, which they have continued to receive until the present time.

In August, 1903, soon after the work had been abandoned on the Houlihan property on account of the defective title, Tully went to the Penn Company about taking the Baker option. He saw Judge Plannigan, then a practicing attorney acting for the Penn Company, and also Mr. Kelly, its representative, and told him about the defective title to the Houlihan property, on account of which the Verona Mining Company threw up the option. Tully represented this as a good property if the title were cleared up. Judge Plannigan said they would not undertake to do anything with the property until the title was cleared. Tully then entered into an arrangement with Judge Plannigan to clear this title, and in consideration for his services agreed that he would give him a one-half interest in the option, and he further agreed that when the title was perfected the Penn Company, if it desired, should have the option. Judge Plannigan then told Kelly to take the Baker option, saying that he could have the Houlihan after the title was cleared up. The Penn Company took’the Baker option, but abandoned it long before the Houlihan title was perfected.

During these negotiations Tully made no mention of any interest of complainant in this option. About this time, in 1903, Tully claims he told complainant of this arrangement he had made with Judge Mannigan in case he succeeded in clearing the title. Complainant testifies that this was told him by Tully in 1905. While the work of perfecting the title was in progress, Tully kept complainant informed about the difficulty they were having and upon everything that was done about both properties. Complainant always approved the work done in clearing up this title. There is no contention on his part but that under the circumstances the arrangement made with Judge Mannigan was the best possible. He has never questioned the advisability of making it. The title was a complicated one and required a great deal of skill and a long time in which to perfect it. The parties in interest lived in various parts of the United States and in Canada, and during the negotiations some of the heirs in interest died, and various other complications arose. Finally, after more than three years, Judge Flannigan succeeded in obtaining a lease of this Houlihan property, signed by all the parties in interest. He paid practically all of the expenses incurred by him, including traveling expenses. Tully claims to have paid a small part of these expenses, but could not say how much he had paid.

Pending'the litigation of Houlihan v. Fogarty, 162 Mich. 492 (127 N. W. 793), Judge Flannigan, as attorney for the Tully Mining Company, secured a stipulation assuring to that company the validity of its lease of the Houlihan property whatever the final outcome of the case might be. Tully did not know of this stipulation until from three to six months after it was made. Complainant first learned of this arrangement in July or August, 1909.

This court determined in Houlihan v. Fogarty, supra, that the parties who gave the first option to Tully (except Mrs. Houlihan, the widow) had no interest in the premises.

In September, 1905, Judge Flannigan organized the Tully Mining Company, and the lease which was obtained from the fee owners ran to it as lessee. Its capital stock was divided into 400 shares, of which 200 were issued to Judge Flannigan for his services and expenses, and 199 to Tully, and one share to his wife (given for the purpose of perfecting the organization). Then the Tully Mining Company made a sublease to the defendant the Crystal Falls Iron Mining Company, which had for some time been operating the Baker mine, at an advance royalty of six cents on all ore mined, with a provision that the Tully Mining Company should receive an increased minimnm royalty. Complainant claims that he did not learn these facts until a long time afterwards, and defendant Tully agrees with him that he disclosed the extent of his interest in this property in August, 1909. The bill of complaint was filed in the instant case January 18, 1910.

In order to determine the one question of fact presented, it has been necessary to carefully analyze and digest all the testimony in the case, for the reason that it all bears on this question and must all be considered in its determination. It can be of no benefit to the profession to here give a digest and our analysis of the testimony of the several witnesses, but it will be sufficient for the purposes of this opinion to give results only. Our conclusion, from such analysis of the testimony in the case, is that complainant has established by a fair preponderance of the evidence his claim that this agreement made between him and defendant Tully included the Houlihan property. The testimony of witnesses on his part, relative to statements made by Tully to that effect, has not been met or overcome by the testimony of defendant Tully and his witnesses. They are not impeached, and, as far as the record shows, are business men of standing and character in the communities in which they live. The circumstances specifically detailed by them as to the causes which brought them to these properties and their interviews with defendant Tully are not denied by him, but in effect are admitted.

It will be necessary next to consider whether complainant is entitled to enforce this contract. Having determined from the evidence in the case that the contract claimed by complainant to have been made was entered into between these parties, it must be treated as an entire contract, covering both properties, in which each had an equal share. The complainant, on his part, has performed fully all he undertook to perform, and, if anything remains to be determined, it will be his half of whatever expenses Tully has paid in and about the Houlihan property, which may be found upon an accounting to be had in this case.

Complainant in this case is not seeking to enforce the specific performance of a verbal contract relative to an interest in land. This case involves an accounting by defendant Tully, who, as complainant claims, wrongfully disposed of an interest arising out of the Houlihan option, belonging jointly to himself and complainant, and to compel him to account for all profits and proceeds; also for a transfer to complainant of one-half of the shares of stock issued to him by the Tully Mining Company, and such relief against said company as may be necessary in the premises. In our opinion complainant is entitled to such relief. Ripley v. Seligman, 88 Mich. 177 (50 N. W. 143).

The remaining question to be determined is whether complainant has been guilty of laches. It is our opinion, under the facts and circumstances of this case, that it cannot be claimed that complainant has been guilty of laches, and, to a certain extent, we have already, in discussing the question of his delay in asserting his rights to the Houlihan property, foreshadowed such a conclusion. The title to the Houlihan property was questioned to the extent that the explorers abandoned their work six months after the option was acquired by Tully, and later was in litigation for several years. There has been in this case no change of position on the part of defendant Tully, nor does it appear that he relied upon the silence or conduct of complainant and thereby changed his position to his disadvantage, by reason of which it would be inequitable that the complainant should now assert his rights. Mere lapse of time, without such change, cannot in itself constitute laches. This conclusion is supported by the authorities. Mr. Pomeroy, in his Equity Jurisprudence, says:

" The conduct must be relied upon by the other party, and, thus relying, he must be led to act upon it. He must in fact act upon it in such a manner as to change his position for the worse] in other words, he must so act that he would suffer a loss if he were compelled to surrender or forego or alter what he has done by reason of the first party being permitted to repudiate his conduct and to assert rights inconsistent with it.” 2 Pomeroy’s Equity Jurisprudence, § 805.

See, also, Ripley v. Seligman, supra.

The decree of the circuit court is reversed, and a decree will be entered in this court in favor of complainant, determining the rights of these parties in accordance with this opinion, and the cause will be remanded for an accounting between the parties as prayed in the bill of complaint, with costs of both courts to complainant.

Steers, C. J., and Moore, Brooke, Stone, and Ostrander, JJ., concurred. Bird, J., did not sit.