Rayl v. Estate of Hammond

58 N.W. 654, 100 Mich. 140, 1894 Mich. LEXIS 773
CourtMichigan Supreme Court
DecidedApril 17, 1894
StatusPublished
Cited by1 cases

This text of 58 N.W. 654 (Rayl v. Estate of Hammond) 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
Rayl v. Estate of Hammond, 58 N.W. 654, 100 Mich. 140, 1894 Mich. LEXIS 773 (Mich. 1894).

Opinion

Grant, J.

The facts upon which the court below directed a verdict for the defendant are undisputed, so that the question now before us is one of iaw. These facts, and the history of the transactions previous to the filing of this claim in the probate court against the estate of George H. Hammond, are summarized in the brief of one of the learned counsel for the defendant, and are substantially as follows:

1. June 16, 1868, William Davis was granted a United States patent on an improved refrigerator car, for the presei-vation of meats and perishable articles while in transportation. Samuel H. and David W. Davis, his sons, were interested with him; and, after his death, Thomas B. Rayl became also interested. These are the claimants here, — Samuel H. Davis, David W. Davis, and Thomas B. Rayl.
2. July 1, 1869, these claimants made a contract with George H. Hammond and Caleb Ives. The latter, by such contract, were granted an undivided five-sixths interest in said patent, for certain purposes. Hammond and Ives agreed to furnish all the necessary capital, and to engage in the business of manufacturing, for the use and benefit of the parties thereto, and running upon railroads in the United States, refrigerator cars, to be made according to the description of said invention and improvement contained in the schedule attached to said letters patent, in purchasing and transporting in such cars, and in selling, in fit markets, fresh meats, and other articles that could be profitably conveyed therein, and should keep accurate books of account of all receipts and expenses of the business, which books were to Be open at all times to the inspection of all parties. Settlements were to be made every six months, upon which settlements profits were to be divided, and one-sixth paid to claimants, and five-sixths to belong to Hammond and Ives. The loss, if any, every six months, was to be borne wholly by Hammond and Ives. Neither party was to assign or transfer any interest in the contract, except by consent of the others.
8. Marsh 8, 1872, a supplemental contract was made, by which Hammond and Ives were authorized to make agreements with railroad companies to run refrigerator cars at a rate not less than 10 cents per 100 pounds for the freight conveyed in such cars, to be paid by the parties using the cars, of which receipts the said Hammond and Ives would keep a true account, the same to be divided as under the terms of the original contract.
4. Under these contracts, Hammond and Ives commenced busi[142]*142ness at Hammond, Ind., associating themselves with Plummer and Towle. They built a large packing establishment there, where they purchased cattle and other animals, killed them, and transported the meat east in the refrigerator cars.
5. March 5, 1877, claimants sold their one-sixth interest, for §30,000, to Hammond and Ives, and ^canceled the first contract, and gave receipts in full for all claims against the business.
6. While the business was being conducted, and before the sale, the claimants were paid $38,436.40 as their share of the profits.
7. In a proceeding by one Buttrick, as assignee of Caleb Ives, bankrupt, against Hammond and Towle, in the United States circuit court f©r the eastern district of Michigan, one Richard Tregaskis, an expert accountant, was employed to examine the books of the business of Hammond & Ives. He made this examination in November and December, 1878, and made known fully such examination to Buttrick, and gave him a memorandum of his discoveries. Theodore Romeyn was the attorney for Buttrick. Tregaskis was examined by Romeyn in his office in 1878 as to the information that he obtained from the books, and handed his memoranda to Buttrick in Romeyn’s office, and made a full statement to them. All the information he had on this trial, he had then.
8. Romeyn sent for David W. Davis, and told him that he had parties going through Hammond’s books, and that, he had found large discrepancies, and thought there was a chance for Davis to recover some money there. •
9. After this talk between Romeyn and David W. Davis, the claimants made a contract with Romeyn, in which' it was set forth that claimants considered that, in the settlement with Hammond & Co., there were “omissions and mistakes, if not positive fraud; that they did not receive their proper share of the profits,” and “that at the time of the sale of their interest in the patent there was a large amount due to them for profits from the 1st day of December, 1876, which had never been allowed;” and “that they are entitled to a share or interest in the accumulations of said firm, which has never been credited to them as profits. They further consider that the receipt given by them was without consideration, and founded on misapprehension, and that it was, in law, fraudulent.” By this contract they employed Romeyn as attorney to sue and prosecute their demands in the premises against Hammond and others, and agreed to pay him one-half that he might recover, he to bear costs and expenses. It contained the following clause:
“The tribunals, modes of prosecution, and terms of adjustment and settlement, if 'any, are left to his discretion, but no final settlement shall be made without the consent of the parties of the first part. Said first parties assume no responsibilities in the prem[143]*143ises, excepting that they will give their testimony, and such information as may be in their power.”
Another agreement was made by David W. Davis, who had been adjudged bankrupt, in which Davis agreed to get the consent of Corliss, his assignee, to unite in the suit on behalf of Davis. What was received, and going to Davis, was to be disposed of as follows: Fifty dollars to Corliss; then the creditors to be paid the balance; if anything was left after creditors were paid, it was to be divided equally between Romeyn and Davis. The first contract was signed by Samuel H. Davis and Thomas B. Rayl.
10. Samuel H. Davis testified that he knew nothing of these discoveries upon the books until 1886, except the information communicated to him by his brother and Mr. Rayl. Rayl testified that he had no knowledge of the books, nor any knowledge of the claim as appearing on the books; knew nothing about the claim, excepting what Romeyn had told him. He does not testify what Romeyn told him.
11. In December, 1879, a bill in chancery was filed in the superior court of Detroit by Samuel H. Davis, Thomas B. Rayl, and ■John B. Corliss, assignee, against George H. Hammond, Marcus M. Towle, and Frank Buttrick, assignee of Ives, in which bill they charged Hammond with unlawfully crediting himself with a large salary, and 'with charges of interest against the business; that they did not receive their share of the profits; that the accounts kept upon the books were fraudulent; that they were entitled to the profits made in a certain hog and offal account, which had been divided among the other members of the firm; that there was ■an omission in the account of property on hand of sixty or seventy thousand dollars, to wit, an account against a Chicago firm, which was charged up as a loss against the business when the sale was made, in March, 1877, and.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Streeter v. Michigan Consolidated Gas Co.
65 N.W.2d 760 (Michigan Supreme Court, 1954)

Cite This Page — Counsel Stack

Bluebook (online)
58 N.W. 654, 100 Mich. 140, 1894 Mich. LEXIS 773, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rayl-v-estate-of-hammond-mich-1894.