Sullivan v. Ross' Estate

82 N.W. 1071, 124 Mich. 287, 1900 Mich. LEXIS 522

• Court: Michigan Supreme Court
• Decided: May 29, 1900
• Status: Published

Opinions

Hooker, J.

Sullivan filed a claim against tne estate of Ross in probate court for $100,000. It was in form a petition, setting up the facts relied upon to establish his claim, which were in substance the following, viz.: Ross owned pine lands in Michigan. On November 7, 1883, a contract was made between him, under the name of Ross & Co., and Sullivan, wherein it was agreed “to sell all the pine [thereon] to Sullivan for one dollar and fifty cents per thousand feet, board measure,” which Sullivan agreed to pay, and to cut the timber before May 1, 1884. The contract contained the following provision:

“It is hereby agreed that said second party shall have the right to cut said timber as above mentioned before he shall pay the price above mentioned, and also the right to remove the same to the landings or rollways on the shore of Lake Superior; but said property shall continue to be the timber of Ross & Company until paid for by said second party according to the amounts above mentioned, and said second party shall not be permitted or have authority to remove said logs so manufactured from said landings or rollways without paying for the same the sums as above mentioned.”

Another contract was made December 18, 1883, between the same parties, which provided in substance:

“That whereas, the said second party is desirous of procuring advances from said first party for the purpose of enabling the said second party to carry on the work upon the lands mentioned in the articles of agreement made between the said parties the 7th day o£ November, A. D. 1883, being an agreement for the sale of pine stumpage mentioned in said agreement of November 7th, 1883, reference to which agreement is hereby made; said advances desired by second party being as follows: To pay amount due William A. Burt, St. Ignace, $4,100; to pay amount of draft drawn by second party on the first parties in favor of L. P. Trempe, due December 26th, 1883, $2,355; to pay the amount of Brady & Company bill, $788.45; to amount to pay men now and in the following spring as required, for work now done and to be done during the present winter, ten thousand dollars ($10,000), — the total amount of said advances being seventeen thousand two hundred and forty-three and 45-100 dollars ($17,243.45): It is hereby understood and agreed that, so far as said first parties shall make said advances, they shall have a lien on all the timber cut and standing which shall have been purchased by said second .party from said first parties under and by virtue of said agreement dated November 7th, 1883, above referred to; and said second party agrees to pay said first parties for so much of said advances as said first parties shall make to said second party before said timber shall be removed from the rollways upon the banks of Lake Superior, it being hereby agreed by said parties that said timber shall continue to be the property of said first parties until not only the stumpage for the same shall be paid as mentioned in said agreement of November 7th, 1883, but until the amounts of said advances as shall be made by said first parties to said second party shall be fully paid; said advances to be paid by June 1st, 1884. It is understood and agreed between said parties that said second party shall pay to said first parties seven per cent, interest upon all advances that shall be made from the date of each advance. Said second party is also to pay to said first parties a commission fee upon said transaction equal to the amount of five per cent, of such advances as shall be made.”

Claimant got out 9,000,000 feet of logs on the bank of Lake Superior previous to May 28, 1884. On June 24, 1884, a third contract was made between the parties, reading as follows:

“That whereas, the said party of the first part has been unable to- pay up for the advances made to him by the second party under certain agreements dated November 7th, 1883, and December 18th, 1883, and also for stumpage due said second party for timber cut under said last-mentioned agreement; and whereas, said first party is desirous of moving said logs to Sault Ste. Marie, where he hopes that a sale can more readily be made of the same, or where the same can be cut into merchantable lumber; and whereas, said first party desires to obtain from said second party further advances to enable him to remove said logs to Sault Ste. Marie, in Chippewa county, Michigan, or any other place in Michigan that said Boss & Co. may direct, and to the mill of H. W. Seymour: It is hereby agreed by and between said first and second parties as an agreement supplemental to said previous agreements, but not in any way affecting or changing them, that said second party will advance to said first party at the rate of one dollar per thousand feet, board measure, for the purpose of towing and delivering said logs at said place or places that Boss & Co. may direct, and will also advance at the rate of two dollars and a half per thousand feet, board measure, for the purpose of paying for the sawing of any or all of said logs, if it shall appear to be necessary to saw said logs in order that they may meet with a more ready and satisfactory sale.

‘ ‘ In consideration of said additional advances so agreed to be made, it is understood and agreed that said second party shall have the same right to the said logs, and the lumber when cut out of the same, as he now holds under- and by virtue of said agreements of November 7th and December 18th, 1883, to the extent of the advances and stumpage so previously made under said previous agreements, and also to the extent of the said new advances for towing and sawing as above stated.

“It is further understood that, in consideration of said new advances, there shall be paid to said second party from the sale of said logs or lumber manufactured from the same, first, the advances which have already been made and interests and commissions upon the same, and also the amount due for stumpage as agreed upon in said previous agreements, and also for the advances made for towing and sawing and commissions and interests upon the same; and after the same shall be fully paid to said second party, if there shall remain any balance or profit over and above the same, said profit shall be divided between the said first and second parties, one-third of the same to belong to said Sullivan, first party, and the remaining two-thirds to said Ross & Co., second party. It is understood and agreed that the removal of said logs shall be at the risk and expense of said first party.

‘ ‘ The basis of the division of the profits shall be based upon the prices mentioned in a contract drawn, but not entered into between the parties hereto, and now in the hands of F. O. Clark, of Marquette, except as to mill culls, and as -to those they shall be equally divided between the parties hereto. Basis of-value of Norway pine to be $6.00 for long and $4.50 for short logs, and profits to be divided as above stated.

“And it is mutually agreed by and between the parties hereto that Ross & Co., of the second part, shall have the right to pay all the moneys mentioned in this agreement as a further advance for towing and cutting said logs at mill to the parties to whom it is due, and in fact, if they deem it necessary, to control the business in every particular to their own satisfaction.”

The indebtedness mentioned in the last contract was $48,000. Ross took possession and disposed of the logs, claiming to act under the contracts, and attempted to raft them from Au Sable Point, on Lake Superior, to Sault Ste. Marie. Through the negligence and reckless.ness of the agents of Ross in providing and keeping closed a proper boom where the logs were rolled into the lake at Au Sable Point, about 2,000,000 feet of the logs were blown across the lake, and lost. Of the logs which reached and were sent down the rapids of the St. Mary’s river, half a million feet were lost, and a large expense was incurred by Ross- in saving a million feet which escaped from his boom below the rapids through his negligence and recklessness. Several million feet were sawed into lumber, and Ross permitted this to be negligently and recklessly done, whereby the product was injured and lessened, resulting-in a loss of $30,000. Ross shipped this lumber to Detroit, and sold it from there. This was in violation of the contract, and occasioned a loss of $50,000. Ross received $60,000 from the logs, for which petitioner asks an accounting. Several other items were included in the claim, which need not be discussed, as we understand that they are not relied upon. The claim was disallowed in probate court, but upon appeal claimant obtained a verdict for $95,525.65. The cause is before us on a writ of error. The claim for losses through taking the lumber to Detroit was withdrawn from the jury.

One of the most important questions raised by defendant’s counsel relates to the proper construction of the contract of June 24th. They claim that the last clause of that writing gave defendant the right to 'take the control and management of the business, and that he might manage it according to his own judgment, without liability for mistakes or failures, if there was no bad faith. The court instructed the jury that Sullivan was to assume all ordinary risks, such as the risks of navigation, winds, and calamities that might come, but that he was not responsible for the negligent acts, if any, of Mr. Ross or his agents, and that the estate was liable to him for damages resulting from the want of ordinary care and prudence in the conduct of the business. Counsel for the defendant cite a number of cases which hold that, when a vendee agrees to purchase an article if satisfactory, he is not liable if he reject it, so long as he is honest in the expression of his dissatisfaction. Several of the cases are from this court.¹ No case is cited that raises just such a question as we have before us, and we infer that it is useless to search for that which the industry of counsel has failed to find. We think the cases cited are distinguishable from this in principle. In those cases the parties may be supposed to have understood that the purchaser was to exercise his right to reject the goods if for any reason, no matter how frivolous, he should be dissatisfied with them. So, in this case, the defendant’s right to assume control did not depend upon his ability to give a reason for so doing that should be satisfactory to others; but it would not be reasonable to believe that either party contemplated a negligent or reckless course in rafting the logs or manufacturing them into lumber. We think the term used should be subject to the general limitation that, if Ross should choose to take control, he would use ordinary skill and prudence in handling the property, in which the parties had a mutual interest. It is a rule applicable to contracts generally, when a contrary intent does not affirmatively appear, that ordinary skill and prudence are contracted for, and we cannot doubt that such was the intention of the parties in this instance.

Counsel for the defendant insist that there is no evidence that Connolly did take control, and raise the question upon the introduction of evidence whether some testimony offered to prove it was admissible, contending that it was as consistent with the claim that Sullivan was managing the business. We are of the opinion that there was evidence tending to show that Connolly did take control to the exclusion of Sullivan, and therefore it was a question for the jury.

We think, also, that the question of negligence was for the jury, and that there was testimony offered tending to prove it upon all of the claims.

It is urged that the claimant has made claim to a greater quantity of logs than Connolly received from him, and that the jury should have been instructed that 7,500-000 feet, in round numbers, was the limit. It is contended that, had this been done, there could have been no balance in claimant’s favor; and it is obvious that it would have materially reduced his claim, to say the least. This is based on two propositions:

1. That the parties agreed upon Spencer and Barrett to scale the logs, and must be bound by their scale.

2. That the letters of Sullivan to the defendant estop him (Sullivan) to claim more than such quantity.

The court instructed the jury that the parties agreed upon Spencer and Barrett as scalers, and that they made a scale of 7,500," 000 feet approximately, and that this should be binding upon the parties, unless there were fraud or mistake. No one claims any fraud upon defendant’s part in relation to the scale. Claimant insists, however, that there was a mistake in the aggregate amounting to a million and a half feet. The undisputed testimony shows that Spencer and Barrett were employed by Sullivan as scalers, by consent of Connolly, and that each measured a portion of the logs. So we think the court was justified in saying to the jury that the parties agreed upon them as scalers, and that their scale should be final, unless there were fraud or mistake shown. The. alleged mistake is that Mr. Barrett did not report his full scale, or, if he did, it was not included in the computation. There was evidence tending to show that the logs were banked at two landings, and at each some were long and some were short logs. The claim is that Barrett scaled at one and Spencer at the other, and that their scales were added together, making 7,500,000 feet. The item from Barrett was headed “ Scale of Short Logs,” and it was maintained that the long logs, if scaled, were not included in the aggregate. This claim rests on the statement of some witnesses that there were long logs at both landings, and on the fact that Barrett’s scale referred to “short logs.” Barrett testified that this was his total scale, and that he scaled all on the landing. He said: “It ran small logs, — seven or eight to the thousand. * * * I didn’t scale only short logs, and I think all drawed in at that end of the landing.” He said further: “ I don’t remember whether any long logs were drawn down that road or not; not to my knowledge, because I scaled what was down that way.” He was repeatedly asked about this, and reiterated, when asked if he would say there were no long logs at Finn’s camp, that he remembered none, but that, if there were, they did not come to where he scaled. We think that Mr. Barrett’s evidence is pointedly to the effect that he scaled all of the logs at that landing, and that it was included in the item mentioned. The right to go to the jury with this question, then, rests upon the statement of witnesses that long logs were hauled to that landing, and the presence of the word “short” in the Barrett scale. Upon the strength of this, Sullivan was allowed to put his estimate upon the pile of logs, to the exclusion of the scale, and the jury were permitted to find that a million and a.half more logs were upon the hank than the scale showed. In addition to the fact that a formal scale was made, it was given by the scalers to Sullivan, and by him reported to' defendant, who seems to have relied upon it. It was made the basis for the charge for stumpage without dissent, and, although Sullivan must have known of his estimate of 9,000,000 feet, he seems not to have mentioned it to Connolly before the logs were rafted. Accord? ing to Connolly, however, he did suggest to him that the scale was too low, and asked him to require a new scale, when there was talk of a sale to Collins, shortly before the logs were taken to the Soo. Counsel also claim that the fact is proved .by the aggregate of logs lost, lumber destroyed, and sales. Thus they say there were:

Logs lost on Lake Superior._________________ 2,000,000 ft.

Logs lost at Soo Rapids______________________ 500,000 “

Lumber destroyed by bad sawing............ 300,000 “

Lumber produced...'________________________ 6,745/525 “

Logs sold................................... 623,500 “

Total.....'.............................. 10,169,025 “

We are of the opinion that the claim that there was an estoppel is not tenable, and that the learned circuit judge did not err in leaving the question of mistake to the jury.

Several assignments of error fall with this determination. Thus it was not error to show by Spencer another scale, and by Sullivan and others their estimates of the quantity of logs.

Counsel for the defendant claim that the verdict of the jury was excessive: (1) Because, while charged with interest from 1884, the defendant was not allowed interest on advances; (2) because, being entitled to but one-third of the profits above advances and expenses, the claimant should be allowed to recover but one-third of the losses resulting from defendant’s negligence. The first of these two claims is erroneous, for the reason that the account shows that an item of $11,108.88 is included in the account for interest on advances. The second proposition rests upon the assumption that, under the contract of June 24th, the stumpage and advances were to be deducted from the proceeds of the logs, and that the remainder was to constitute profits, of which defendant should have two-thirds. This ignores the provision referring to the unsigned contract as a basis of profit, which shows that no profits could arise until the specified value of the lumber should have been received, and not then unless it equaled the advances, stumpage, etc. Hence there may have been a margin between the amount of the advances and expenses and the value of the logs, computed at $9 per 1,000 feet, and, as this margin would belong to the claimant, he would be entitled to recover, if lost through defendant’s fault. It is obvious that the proposition that claimant ought not to recover more than one-third of the lost profits as defined by the contract is correct.

We have endeavored to examine carefully every point made in this cause, though we do not consider a discussion of each question necessary. We find no error, and the judgment is affirmed.

Montgomery, C. J., Moore and Long, JJ., concurred with Hooker, J.

1 Viz.: Gibson v. Cranage, 39 Mich. 49; Pierce v. Cooley, 56 Mich. 552 (23 N. W. 310); Mansfield Machine Works v. Common Council of Lowell, 62 Mich. 546 (29 N. W. 105), Plano Manfg. Co. v. Ellis, 68 Mich. 101 (35 N. W. 841); Platt v. Broderick, 70 Mich. 577 (38 N. W. 579); U. S. Electric Fire-Alarm Co. v. City of Big Rapids, 78 Mich. 67 (43 N. W. 1030).