Michigan Slate Co. v. Iron Range & Huron Bay Railroad

59 N.W. 646, 101 Mich. 14, 1894 Mich. LEXIS 868
CourtMichigan Supreme Court
DecidedJune 16, 1894
StatusPublished
Cited by7 cases

This text of 59 N.W. 646 (Michigan Slate Co. v. Iron Range & Huron Bay Railroad) is published on Counsel Stack Legal Research, covering Michigan Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Michigan Slate Co. v. Iron Range & Huron Bay Railroad, 59 N.W. 646, 101 Mich. 14, 1894 Mich. LEXIS 868 (Mich. 1894).

Opinion

Long, J.

This action was commenced by attachment to recover against the defendant company the value of certain merchandise. Plaintiff claims under a written guaranty, signed by Milo Davis, chief engineer of the rail-. road company, as follows:

[15]*15“Iron Range & Huron Bay R. R. Co.
“ Milo Davis, Chief Engineer and Superintendent of Construction.
“Arvon, Mich., May 23, 1891.
■“ Michigan Slate Company,
“Arvon.
Gentlemen: Please deliver to "Wallace Dingman such
supplies as he may order for the construction of the I. R. & H. B. R. R.,» until further notice, and the same will either be taken out of his estimate from month to month, or taken from his final estimate, or, in case of his failure to complete the job, from last estimate given him, as the case may be, if not otherwise paid; and the Michigan Slate Company is hereby guaranteed against any loss from said DingmaAs failure to pay for any goods, tools, and supplies of all descriptions furnished from this date.
“ Milo Davis, Chief Engineer.”

Claim is also made upon the common counts in assumpsit for goods sold and delivered. A bill of particulars was filed, showing a claim of indebtedness of upwards of $36,000. The plea was the general issue, and there was also filed and served an affidavit of C. H. Buhl, president of the defendant company, to the effect that the railroad company never executed or caused to be executed the written agreement counted upon in the plaintifffs declaration, and that Milo Davis, chief engineer, mentioned in the declaration, had no authority to execute any such promise or agreement in behalf of the defendant company.

It appears that on June 30, 1890, articles of association of the defendant company were filed in the office of the Secretary of State. The purpose of the incorporation, as stated in the articles of association, was the construction of a railroad from some point on Huron Bay, Baraga county, Mich., through the counties of Baraga and Marquette, to the towns of Champion, Republic, and Michigamme. On July 26, 1890, a contract was made between James M. Turner and the defendant company, by which Turner agreed to undertake forthwith, and to complete [16]*16within one year from the date of the contract, so much of the railroad as lay between some eligible point on Huron Bay, Baraga county, and the village of Champion, Marquette county, together with all necessary ore docks, station buildings, etc. On July 27, 1890, an agreement was signed between Christian H. Buhl and Henry Stephens, of Detroit, and James M. Turner, of Lansing, the substance of which was that, while the said Turner was to take the contract for the construction of the road in his own name, yet he was to act as much for .and in the interest of said Buhl and Stephens as for the interest of himself; and the contract then set forth the relative rights and obligations of Buhl, Stephens, and Turner under it. August 16, 1890, a contract was made between Wallace Dingman, of Battle Creek, Mich., and said James M. Turner, by which the said Dingman agreed to do all the grading, clearing, grubbing, etc., on said railroad, and to complete the same on or before August 1, 1891. Prior to the time of the organization of the defendant company, Milo Davis, a civil engineer, had been sent by Mr. Turner to make a preliminary survey of the route which the contemplated railroad was to follow. After the organization of the company, on recommendation of Mr. Turner, an arrangement was made-with said Davis by which he was to act as chief engineer of the company. It was also arranged that Mr. Charles M. Turner, who was the superintendent of the plaintiff company, should act as the auditor of the defendant company. James M. Turner was the president and treasurer of the Michigan Slate Company, and largely interested in it pecuniarily.

The claim of the plaintiff company is that it is entitled to recover against the defendant company for so much of the goods described in the bill of particulars as were furnished prior to May 23, 1891, or up to the time the written guaranty was . made, because of certain oral arrange[17]*17ments which it claimed to have made through its superintendent, Charles M. Turner, with Milo Davis, and approved by James M. Turner; and that for the balance of the goods the defendant company is liable by virtue of the written guaranty above set out. The written guaranty, it is conceded, though dated May 23, 3891, was not written and signed until after that date, and, as plaintiff seems to claim, some time in June or July. On the part of the defendant testimony was offered, which, it is claimed, tended to show that neither Turner nor Davis had any authority, either by virtue of the positions held by them or by virtue of any power conferred on them by the railroad company, to buy any goods on the credit of the company to be used by the contractor or subcontractors or boarding-house keepers, or to make any promises for the payment therefor; and that, if such purchases or such promises were made, they were made without the knowledge or consent or ratification of the company; that Milo Davis never had any authority to make the written agreement declared upon, and that the company had no1 knowledge that such agreement had ever been made.

The main features of the case relative to the organization of the defendant company, its contract with James M. Turner to construct its road, as well as the contract between Turner and Wallace Dingman, together with the appointment of Milo Davis as chief engineer of the defendant company and his powers and duties, are set out in the case of Hirschmann v. Railroad Co., 97 Mich. 384, and will not be repeated here. It was said in that case that—

The testimony brings the case within any one of several well-established rules:
“1. If the company relinquished to Turner the matter of the construction of this road, and Turner knew that Davis was contracting these obligations in the name and [18]*18upon the credit of the company, Turner must be deemed to have adopted them. His knowledge was the company's knowledge, and the company is liable.
2. If the officers of the company were advised that Davis had incurred the June indebtedness to plaintiffs in the name and upon the credit of the company, and with •that, knowledge did not protest, but, pn the contrary, corresponded directly with the plaintiffs, and paid that account, plaintiffs were justified in relying upon that action as an assurance of Davis' authority, and extending further credit, and defendant is estopped from denying the authority of Davis.
“3. If Davis, in the exercise of the authority given to him by the contract, in view of Dingman’s inability, was prosecuting the work for and on behalf of the company, and incurred this indebtedness in such prosecution of the work, the plaintiffs were entitled to recover.
“4.

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Bluebook (online)
59 N.W. 646, 101 Mich. 14, 1894 Mich. LEXIS 868, Counsel Stack Legal Research, https://law.counselstack.com/opinion/michigan-slate-co-v-iron-range-huron-bay-railroad-mich-1894.