McMillen v. Pratt

62 N.W. 588, 89 Wis. 612, 1895 Wisc. LEXIS 211

Opinion

FinNey, J.

1. For the purpose of determining whether the defendant was bound to cut and deliver from the lands, described in the contract, as an entirety, to McMillen & Go., 25,000,000 feet of logs and timber of the kind and quality therein specified, or only one half of the amount thereon of that kind and quality, whatever that amount might be, less than that quantity, the deed from Pratt to McMillen & Co.,, the notes, the contract, and the two mortgages executed by Pratt to McMillen & Co., which -were all executed at the same time and all related to the same subject, must be considered and read together. It is evident that they not only relate to the same subject matter but represent a single transaction. They must therefore be considered and construed together in arriving- at what the parties intended by what they have thus expressed. Elph. Interp. Deeds, 7; Smith v. Chadwick, 20 Ch. Div. 63. This is really a familiar rule, and there has been no contention against it. The situation of the parties and the subject matter with which the parties were dealing, and the circumstances attending the transaction, are also to be considered, so that the court may be placed in the situation of the parties, so far as maybe, so as to consider the transaction in the same light and as far as possible from the same standpoint from which the parties must have regarded it; for, when the language of a contract is susceptible of two meanings, the court will infer the intention of the parties from the circumstances attending the transaction so far as they throw any light upon the language used. Chicago, M. & St. P. R. Co. v. Hoyt, ante, p. 314; Barreda v. Silsbee, 21 How. 161; Merriam v. U. S. 107 U. S. 441; Chicago, R. I. & P. R. Co. v. Denver & R. G. R. Co. 143 U. S. 609. And the manner in which the parties have dealt with and treated the subject matter, and the construction they have placed on the instrument, with the actual or presumed knowledge or assent of each other, often have an important bearing on the subject. Knox Co. v. Ninth Nat. Bank, 147 U. S. 99, 100.

It appears on the face of the contract, as a fact in view of which the contract was made, that McMillen & Co. had purchased the undivided half of the lands described in it, for the consideration of $100,000, and evidently for the purpose of securing a supply of logs and timber of the particular kind and quality specified in the contract, an'd to the extent of 25,000,000 feet; and it will be seen that the contract excludes them from the right to have any other quantity of timber from the lands, of whatever kind or quality. This particular quantity Pratt was to cut from these lands, and haul or transfer to Wolf river, and finally deliver to them at tbe Bay boom, when and where it was to be at their risk, and was all the timber they were entitled to take from the lands. McMillen & Co. had no knowledge of the quality or quantity of timber on the lands. Pratt had owned them for over twenty years, and he represented that the lands would cut from fifty-five to sixty millions of pine timber, but not that they would cut that quantity of the quality and kind which by the contract was to be cut and delivered to McMillen & Co.; that the timber could be taken out on certain tributaries of the Wisconsin river; that it would have to be hauled or transported a distance of ten miles to put it into Wolf river, but if taken down that river to Oshkosh, where McMillen & Co. had an extensive door, sash, and blind factory, it would be worth much more than if taken down the Wisconsin river. The legal title to the lands was vested by means of the deed in Pratt and Mc-Millen & Co. as tenants in common,— an undivided half in each. Neither owned or had any exclusive right as against the other to any single acre or to any particular tree. The lands, in their entirety, are mentioned as the field from which the logs and timber were to be taken to perform the contract, — ■ that is to say, from the lands of Pratt and Mc-Millen & Co.; the quantity not to be measured or limited by what the undivided half of McMillen & Co. would furnish. . The plain stipulation of the contract is that the logs and timber so to be cut “ shall average not more than four and one-half to the thousand feet, and in quality shall be a fair average of all thegome standing on the lands,— not more than five per cent, to be Norway pine.” McMillen & Co. were to have the stipulated quantity, and of the kind and quality, even though it required all of that kind of timber that the land produced; and the agreement is that it shall be cut from the lands held in common, and is absolute and unconditional. The consideration for it is found in the purchase price paid for the lands and the mutual stipulations of the parties. As security that tlie stipulated quantity of the nominated kind and quality should be cut from these lauds and delivered, the two mortgages on Pratts undivided interest in the lands were given to McMillen & Co.; and, as it was plainly contemplated that Pratt should log on the lands in the meantime for his own benefit, he (Pratt) agreed that, until the second mortgage (the one in suit) should be discharged, “ there shall be and Remain on said lands above described not less than 9,000,000 feet of standing timber;” and that “ as soon as said Pratt shall have delivered to Mc-Millen & Co. the 25,000,000 feet of logs, in the manner and form as called for in this agreement, all the remaining pine timber being and standing on the above-described lands shall be and remain the absolute property of said Pratt; and said McMillen & Co. shall on demand, after the full completion ■of the contract, give to said Pratt a bill of sale of all such remaining pine timber, and give him a reasonable time to remove the same from said lands.”

The substance of the entire matter is that, for the considerations embraced in the contract, the parties made a valid agreement as to the manner in which the timber on the lands held in common was to be divided, entirely different from that which would result from the mere fact of their ownership as tenants in common, to wit, McMillen & Co. were to have 25,000,000 feet of the specified kind and quality, and Pratt was to have all other timber thereon, more or less, of whatever kind or quality, and they were to remain tenants in common of the land after the timber should be removed. Pratts obligation to cut and deliver this quantity of logs and timber was, as we have said, absolute. He failed to perform it, and was rightly held liable for the damages sustained by ■.such failure. Pratt testified that, in getting out the logs, they were cut from lands owned by him and the plaintiff, and, intermingled, were put in Volf river and rafted out at .the boom, and that a division was made between him and McMillen. & Co., be taking bis ball in feet, and delivering to McMillen & Co. tbe other balf. But tbe evidence, as a whole, did not establish that there was any formal division in view of a specific claim that each was entitled to an undivided balf of all that was cut from tbe lands, but rather that from time to time be made deliveries of logs under tbe contract, and retained and disposed of all tbe rest; that of these be sold to McMillen & Co. 7,000,000 feet. In 188T and 1888, McMillen became suspicious that the timber on tbe lands was running short, and spoke to Pratt about it,, but be would not admit it, and said be would furnish the-amount on tbe contract ho bad agreed to furnish; but it does not appear that McMillen knew when bo bought these logs that there was or would be a shortage of timber on the-lands. There is nothing in this transaction, taken in the-way Pratt stated it, that would interfere with the right of McMillen & Co. to insist on full and strict performance of the contract as we have construed it. If Pratt sold to others, or even to McMillen & Co., the logs and timber he had bound himself to deliver to the latter, this would be no answer to a claim for damages for not performing his contract.

The argument in support of a contrary view ignores this-manifest agreement for dividing the timber standing on the-lahds, and proceeds on the assumption, entirely unwarranted,, as we think, that the rights of the parties as mere tenants in common were unchanged by the contract, and upon detached expressions in the contract, from which the inference was-sought to be drawn that the contract was one merely for logging and transporting the timber, whatever quantity it might be, that pertained to McMilleri’s undivided interest in the lands. Although ingenious and plausible, we regard the argument as unsatisfactory and unsound. The language of the contract requiring Pratt “ to cut and deliver ” the specified quantity of logs and timber, and of the kind and quality, is of broader import and meaning than the argument ascribes to it. Tbe contract was not a mere lumbering contract. . It secured to McMillen & Co. the right to have the stipulated stumpage, the logs and timber, if to be found on the lands. In this view, the provision of the contract in respect to taxes on the logs is made clear and intelligible; and, as between the parties, McMillen & Go. were to pay the taxes on ah logs and timber delivered to them under the contract, and Prait was to pay the taxes on the remainder.

2. The contract in respect to the 25,000,000 feet of logs and timber was required to be performed within three years and ten months from September 1, 1885. The part of the' contract (quite distinct, it would seem, from the rest) which related to purchases of pine or pine lands tributary to PrcsbSs railroad, “for and on the joint account of said Prait and said McMillen & Co.,” was to continue in force seven yeai-s from the date of the contract, and under it lands and stumpage were so purchased, and logs and timber cut, loaded, and transported over the railroad to the amount of about 15,000,000 feet, and until December, 1888, when McMillen ■ refused to longer continue the business. In respect to the loading and transportation of the logs and timber under this joint or company business, provisions were made by which McMillen & Co. wei’e to pay and did pay Pratt the stipulated price of fifty cents per thousand feet for loading on the cars, and' twelve and one-half cents per thousand feet per mile for transporting their half of such logs and timber, upon bills regularly made and presented. The defendant has interposed a counterclaim for like compensation for loading on the cars and transporting thereon the 18,000,000 feet delivered by him on the contract for cutting and delivering the 25,000,000 feet, under the contract of August 21, 1885, amounting to about $44,000, with interest on the same according to the statement in the answer.

The provisions in the contract relied on to sustain these claims are three, namely, one on the subject of loading logs and timber on tbe cars, and two on the subject of transporting them oyer the railroad, and these two are clearly counterparts. By one of them the defendant agrees to transport over the road “any and all timber or logs said McMillen & Co. and said Pratt shall or may own jointly” for the sum of twelve and one-half cents per thousand feet for each mile transported; and by the other McMillen & Co. agree to pay “for the transportation of any and ail logs they may have transported over said road from lands hereafter to be purchased by McMillen & Co. and said Pratt on joint account, the sum. of twelve and one-half cents per thousand feet per mile” of their one-half of said logs. As to loading logs on the cars, the agreement is that, “for all logs transported over said railroad which belong to said McMillen & Co. and said Pratt, McMillen & Go. shall load or pay said Pratt for loading their one-half;” and it was proved that it was worth fifty cents per thousand to do such loading.

It is clear that the 25,000,000 feet of logs required. to be put and delivered by Pratt to McMillen & Co. do not come ■within the purview and meaning of either of these provisions, but that they apply solely and only to the logs and timber cut from pine or pine lands thereafter to be purchased “ on the joint account of Pratt and said McMillen & Co.,” under the provision of the contract in respect to that enterprise. The 25,000,000 feet of logs and timber to be cut from the lands described in the contract of August 24, 1885, and delivered to McMillen, are not fairly within the ^description of logs and timber owned by them jointly, or which belonged to them. McMillen & Co. had paid for the limber, and had agreed to pay “ for cutting, hauling, run.ning, and rafting said logs in the Wolf river the sum of $6 .per thousand feet; . . . McMillen & Co. to furnish at ■the Wolf river boom all boom timber for the rafting at the time the same shall be necessary.” All else was to be at the cost and expense of Pratt. Everything that Pratt agreed to do or did do in respect to the 18,000,000 feet of logs was with the view and purpose of a several and separate ownership of these logs by MoMillen & Co., and had no connection with or relation to a joint ownership by them and Pratt. Besides, Pratt agreed to cut, haul, run, and raft these logs all for the sum of six dollars per thousand. Hauling includes transportation on the cars. Indeed, the expression in one of these provisions is “ haul and - transport over said road.” The stipulations as to what Pratt was to do in respect to the 25,000,000 feet lead irresistibly to the conclusion that he was to deliver the logs and timber, tied out, so as to be at the risk of MoMillen & Co., for six dollars per thousand; and it was expressly agreed that they were “to-be delivered rafted out at the Volf river boom, free and clean of all liens and incumbrances; ” the first 5,000,000 feet “to be delivered free and clear from all liens as hereinbefore provided;” and, finally, the second mortgage (in suit) was to be released and discharged, “ when the said Pratt shall have delivered to said MoMillen & Coi 25,000,000 feet of logs contracted to be delivered, free cmd clea/r of all costs and chargesP Besides, it appears that when and as the 18,000,000 feet were delivered from time to time, and bills therefor were rendered, no claim was made for loading or hauling or transporting these logs on the cars; whereas, in the case of the logs and timber loaded and transported on joint account, bills were promptly rendered and collected therefor. It is evident from undisputed facts that this counterclaim is without merit.

3. The evidence to establish the verbal contract relied on as a claim for damages for breach thereof was given by Pratt, to the effect that on the 24th of August, 1885, he made a verbal contract, soon after signing the written one of that date, and, while holding it in his hand, he turned to MoMillen and Hollister, and said: “Now, gentlemen, as I understand it, it is,' in addition to this written contract, expressly. understood and agreed that we will buy all of the pine timber in that section of tbe country tributary to my proposed railroad and its reasonable extensions that can be bought and brought to Wolf river advantageously; ” adding : “ I to look up and have the timber estimated at our joint expense, and you to furnish the money to pay for it.” That he then said to McMillen: “ Mac, is that as you understand it? Do you agree to it?” And he said: “ Yes; that is as I understand it. I agree to that.” And that Hollister also agreed to it. That • this constituted the verbal agreement, and that he would not have executed the written contract if they had not agreed to make the verbal agreement. And other testimony was given tending to corroborate his statement, but this was explicitly denied by both McMillen and Hollister, and there was testimony to corroborate their contention. He testified that on account of this verbal agreement he built a standard-gauge road, instead of a narrow one, as he otherwise would have done; the difference in cost being about $10,000. The road and equipment cost $130,000, and he sold it for $75,000; McMillen advising him to do so at the time he refused to buy any more pine or pine lands.

íhe circuit court has found that the verbal contract relied on was not made; that the written contract of August 24, 1885, contains the' entire agreement between the parties; and that no oral agreement was made for the future purchase of pine or standing pine timber. An examination of the evidence satisfies us that there is not a preponderance .of proof against this finding, and that it ought to be affirmed. It would serve no useful purpose to recapitulate or review the evidence. But it is obvious that the objection that the agreement is within the statute of frauds (E. S. sec. 2302) and void is well taken, and that no action at law for the recovery of damages for its breach can be maintained. Brandeis v. Neustadtl, 13 Wis. 158; Levy v. Brush, 45 N. Y. 589. An agreement for a partnership in real estate is void unless in writing (Bird v. Morrison, 12 Wis. 138); and a sale of standing timber, and an agreement to buy it, are within the statute (Daniels v. Bailey, 43 Wis. 566). It is not material to consider what remedies may be had in a court of equity where there has been a part performance of such an agreement, or in actions for fraud or «deceit in reference thereto, for at law neither party has any standing to recover damages against the other for a breach ■of such an agreement. In this case, by the parol agreement, the pine timber and pine lands were the substratum • of the alleged projected partnership. “ It was agreed,” says Pratt, “ between us, that we would buy all of the pine timber in that section of the country tributary to my proposed railroad and its reasonable extensions that could be bought; ” and, as alleged in the counterclaim, “ that could be advantageously purchased,” one half interest in which was to be transferred to Pratt on the conditions stated in the answer. The distinction between the case of Treat v. Hiles, 68 Wis. 344, and the present case, is obvious. In Treat v. Biles the real estate to be purchased was not, nor was any interest in it, to become partnership property, and the agreement was simply a partnership or an agreement for a partnership for tworking the stone qymry on the land of one of the parties. And Hill v. Palmer, 56 Wis. 123, is in principle the same. The agreement here was for the purchase of an interest in real estate (Babcock v. Read, 99 N. Y. 609; Daniels v. Bailey, 43 Wis. 566); and not merely for sharing in the profits or losses of a contemplated speculation in such property. We have not been referred to any case where a recovery at law of damages for breach of a verbal contract such as this has been sustained; and the following cases, we think, sustain the conclusión at which we have arrived: Levy v. Brush, 45 N. Y. 589; Dunphy v. Ryan, 116 U. S. 491; Parsons v. Phelan, 134 Mass. 109; Horsey v. Graham, L. R. 5 C. P. 9; Raub v. Smith, 61 Mich. 543; Brosnan v. McKee, 63 Mich. 454; Bailey v. Hemenway, 147 Mass. 326. Other objections to this counterclaim were argued, but a consideration of them becomes unnecessary.

As to the validity of a parol partnership for dealing in' real estate, see note to Bates v. Babeoclc (95 Cal. 479) in 16 L. R. A. 745. — Rep.

It follows that the judgment of the circuit court is correct, and that it should be affirmed.

By the Gourt.— The judgment of the circuit court is affirmed.