Smith-Powers Logging Co. v. Bernitt

237 F. 570, 150 C.C.A. 452, 1916 U.S. App. LEXIS 1978

• Court: Court of Appeals for the Ninth Circuit
• Decided: December 4, 1916
• Docket: No. 2591
• Status: Published

Opinion

GIRBERT, Circuit Judge

(after stating the facts as above). [1] The appellants rely upon the statute o-f frauds, and contend that that statute applies to a boom and the tidelands on which it is constructed, and that, since the tidelands belonged to E. B. Dean & Co., the predecessors in- interest of the appellees could acquire no interest therein, except by a conveyance in writing. But the statute of frauds does not affect the rights of the parties under the circumstances which are shown by the evidence in this case. “Where an o-ral contract, which is unenforceable by reason of the statute of frauds, has been entirely performed, the rights of the parties are no longer affected by the statute, and it is immaterial that either party might have refused to perform. Where oral agreements creating interests in land have been carried into effect by the acts of the parties, the rights acquired thereunder are not affected by the statute.” 20 Cyc. 302, 303; White v. Cleaver, 75 Mich. 17, 42 N. W. 530; Knecht v. Mitchell, 67 Ill. 86; Anderson v. Simpson, 21 Iowa, 399; Newman v. Nellis, 97 N. Y. 285; Brown v. Bailey, 159 Pa. 121, 28 Atl. 245; C. C. C. & St. R. Ry. Co. v. Wood, 189 Ill. 352, 59 N. E. 619; Anderson School Tp. v. Milroy Lodge, 130 Ind. 108, 29 N. E. 411, 30 Am. St. Rep. 206; Mich. Cent. R. Co. v. Chicago, etc., R. Co., 132 Mich. 324, 93 N. W. 882.

[2] The appellants contend that the testimony fails to show any partnership between the copartnership of E. B. Dean & Co. and the predecessors in interest of the appellees. The evidence, however, shows clearly that the original agreement was that of a joint venture. The final situation was complicated by the changes that subsequently occurred, such as the retirement of Young and Klahn. But through all the changes the business continued to be operated as before, without any objection upon the part of Dean & Co. or any one. From the conduct of the parties, the court below was clearly justified in holding that there was consent to the changes in membership by the concurrence of all the parties, evidenced by their conduct. It is well settled that, with such concurrence, the purchaser of an interest may become a partner with the consent of all the parties, either expressed, or implied from their conduct. 30 Cyc. 605; Meaher v. Cox, 37 Ala. 201; Rosenstiel v. Gray, 112 Ill. 282; Harvey v. Ford, 83 Mich. 506, 47 N. W. 242. But it is not important to inquire how long the partnership continued to exist. The important fact is that the predecessors in interest of the appellees were induced by E. B. Dean & Co. to enter upon lands which the latter owned and to contribute one-half the expense of constructing booms thereon, with the understanding that all parties were to have a joint interest in them, and that the booms were operated under that understanding until the appellees were ousted.

It is contended that the court below erred in finding upon the evidence that the Dean Lumber Company and the appellants recognized the appellees’ rights and acted under the partnership agreement. We have carefully considered the testimony which bears upon this contention, and, although the evidence is conflicting, we find no ground to disturb the conclusion of the court below. It is clearly established that, after the Dean Lumber Company acquired its interest, the appellees continued in the possession and management of the booms, and that they continued as before to receive the profits, and shared with the Dean Lumber Company the expenses of the maintenance of the booms. Squire, who was bookkeeper for the Dean Lumber Company from 1903, until he became manager of the company in 1905, who was called as a witness for the appellants, testified that he learned from'Bernitt that he and his partners had built the boom under an agreement that they were to have the exclusive use of the same, and he testified that agreement was made at the time when the boom was first built, and continued “during the time I had anything to do with it.”

The appellants contend that, even if there were a copartnership agreement, as found by the court below, the sale to C. A. Smith, a bona fide purchaser, passed the title of all parties. C. A.- Smith purchased the property in February, 1907. He was a man of experience in the sawmill and logging business. He had an understanding with Powers, who became the president of the Smith-Powers Company, that the property when purchased should be turned over to a logging corporation which they would organize. The time of the purchase was the middle of the logging season, the booms were full of logs, and the appellees were busily engaged catching and rafting 'the same. Their raftsmen had scows there in which they lived. Entries were at that time being made upon the books of the Dean Dumber Company, showing the charges and earnings of that company arising out of the operations of the appellees. The evidence is that the Smith-Powers Dogging Company is controlled by C. A. Smith, who holds a large majority of the stock, and that Powers is the president thereof. Bernitt testified that in July, 1907, Powers told him that Smith wanted him (Powers) to purchase the boom property, but that he.would have nothing to do with it so long as Bernitt and Wit-tick had an interest in it. There is other evidence tending to show that Smith had actual notice of the appellees’ rights. But, aside from any actual notice that he may have had, the possession of the appellees was sufficient to put him upon inquiry to ascertain their rights. Randall v. Lingwall, 43 Or. 383, 73 Pac. 1; McDougal v. Lame, 39 Or. 212, 64 Pac. 864; Jennings v. Lentz, 50 Or. 483, 93 Pac. 327; Cantwell v. Barker, 62 Or. 12, 124 Pac. 264.

It is said there is nothing in the record to justify the fixing of June, 1909, as the date when the appellees were ousted. The complaint alleges that the ouster was in June, 1909, and the answer does not deny it. The testimony is that, during the rafting season of the fall, winter, and spring of 1908 and 1909, the appellees continued to catch logs in the booms as formerly, and to make up rafts and tow them to the mills, and that thereafter they were not allowed to do so. This sufficiently establishes the time of the ouster. But the precise date is unimportant.

It is contended that the court below erred in not requiring the appellees to contribute to the expense and maintenance of the boom. The appellants offered in evidence a statement of the account of the Smith-Powers Company with the Coos river boom, commencing September 20, 1907, and ending July 1, 1912, in which it appears that the total sums expended by that company on the booms, including $14,615 paid for various tracts of tidelands, amounted in the aggregate to $31,450.95. There is no evidence that the appellees were ever asked to .contribute to any of this expense, or that they ever consented thereto. They were ousted before the major part of the improvements were made. The court below took into consideration the value of the booms, irrespective of the extensive improvements made thereto by the appellants, and fixed the appellees’ interest therein at the time of the ouster at the sum of $1,000. We find no ground for holding that that estimate was not just and proper.

The decree is affirmed.