McGraw v. Dole

Decision Date07 October 1886
Citation29 N.W. 477,63 Mich. 1
CourtMichigan Supreme Court
PartiesMCGRAW v. DOLE.

Appeal from Bay.

Hatch & Cooley, (Isaac Marston, of counsel,) for complainant.

Tarsney & Weadock, for defendant and appellant.

CHAMPLIN J.

There appeared to be no dispute between the parties to this suit as to the right of complainant to file his bill of complaint to obtain an accounting and winding up of the matters growing out of the trust relationship between the parties. The defendant contends that such accounting ought not to include his claim against the plaintiff, arising out of the acts of complainant in taking possession of a large amount of personal property, breaking up his logging contract, and destroying his business, for which, previous to the filing of the bill, he had brought an action of trover against the complainant. To decide this question it will be necessary to enter at considerable length into the facts out of which the controversy arises.

In the year 1879 the complainant and one Wartrous were copartners, doing an extensive lumbering business at Bay City, Michigan, under the firm name of McGraw & Co. Defendant was also a lumberman, and in that year he and McGraw & Co. entered into a contract for the purchase of certain pine lands and agreed to operate thereon, the particulars whereof are not necessary to be stated other than that there resulted to the parties a profit in the adventure of which defendant was entitled to his share, amounting to $2,207.53. On May 8 1880, another contract was entered into between the same parties, a copy of which is given below, viz.:

"George E. Dole, of East Saginaw, Mich., party of the first part and T.H. McGraw & Co., of Portsmouth, Mich., party of the second part, agree to and with each other as follows, this eighth day of May, 1880: Said Dole agrees, for a one-half interest in the hereinafter described operation, to give his undivided time and attention, free of cost, to said McGraw & Co., in the lumbering of the following described lands, viz.: The south half of section twenty-two, north half of section twenty-seven, north-west quarter of north-west quarter of section twenty-eight, north-east quarter of north-east quarter of section twenty-nine, all in town twenty north, range five east; said Dole to furnish for said operation whatever funds he may receive from the joint account operation under contract of October 14, 1879, between the parties to this contract, after deducting his necessary expenses, and McGraw & Co. to furnish the remaining funds necessary to the successful operation of said lumbering. The entire cost of lands, lumbering, etc., together with an interest account of seven per cent. per annum, to be charged to joint account. The title to said lands to be in McGraw & Co. until such time as said Dole shall pay said McGraw & Co. for his one-half interest in the joint account, when they agree to give said Dole a deed for one-half of said lands; all of said lands to be lumbered during the coming winter, if possible; said McGraw & Co. to have the opportunity to buy said Dole's one-half interest in said logs, and to have the preference over any other party, at the same price; said McGraw & Co. to retain the ownership of said Dole's interest until such time as said Dole shall pay said McGraw & Co. for his proportion of the joint account; said Dole to attend to the letting of the contract for lumbering of said lands, consulting said McGraw & Co. at all times as to the conduct of the business; neither party to sign any paper as partners, or accept any draft, or give any note. GEORGE E. DOLE.
"T.H. MCGRAW & CO.
"Per BIRDSALL."

The consideration paid by McGraw & Co. for these lands was $25,500. During the summer or early fall of 1880 a verbal arrangement was agreed upon, by which it was agreed that defendant himself should perform the job of lumbering from these lands, and in pursuance thereof he commenced preparations to do so. He purchased of one Luther Gordon the iron rails then on a logging road belonging to Gordon, and also eleven logging cars. The money to make this purchase was advanced by McGraw & Co., and a bill of sale as security was taken in McGraw & Co.'s name. The length of iron rail purchased of Gordon was about three and eight-tenths miles, and was moved by defendant, and relaid upon a road-bed constructed by him from Rifle river to the main body of land mentioned in the contract. The verbal agreement above alluded to was afterwards, and on the thirteenth day of September, 1880, reduced to writing, and reads as follows:

"George Dole, of East Saginaw, Mich., and T.H. McGraw & Co., of Portsmouth, Michigan, each for a sufficient consideration, agree to and with each other, this thirteenth day of September, 1880, as follows: Said Dole to cut, skid, and haul during the present lumbering season of 1880 and 1881, and deliver in the Rifle river boom as early as practicable in the spring of 1881, all the pine timber on the hereinafter described lands, the title to which is vested in T.H. McGraw & Co. for the purpose of security for the purchase price of lands, but one-half of which, when paid for by said Dole, and one-half of the logs from which shall also belong to said Dole when he shall have paid his portion of purchase price of said lands, and his proportion of the cost of lumbering said lands, with interest at the rate of seven per cent. per annum on all sums paid by said McGraw & Co. on the purchase price and lumbering of said lands, the joint account to pay said Dole for the cutting, skidding, hauling, and delivery of said logs in said Rifle river boom, the sum of three dollars and twenty-five cents per thousand feet; said logs to be cut twelve feet two inches, fourteen feet two inches, and sixteen feet two inches in length, or otherwise, as directed; to be long butted, when necessary; to be square butted, and to be cut as economically as possible as regards rots, crooks, shakes, etc.; and to be scaled by Scribner's rule, straight and sound, by some man to be agreed upon between the parties. Should McGraw & Co. purchase said Dole's interest in logs,--and it is understood and agreed that said McGraw & Co. are to have the privilege of purchasing said logs at the market price for such logs, either when all the logs are banked, or when enough of them have been delivered in the mill boom to show a fair average,--said McGraw & Co. may, if they choose, have said logs rescaled by some man to be agreed upon by the parties, the woods or bank scale to be a basis for the settlement of the lumbering of said logs, and the second or water scale to be a basis for the final settlement for the purchase of the logs. Said McGraw & Co. agree to pay and said Dole to receive as payment in full for the lumbering of said lands, in the manner and at the time hereinbefore mentioned, the sum of three dollars and twenty-five cents per M. feet, to be paid as follows: One dollar and fifty cents per M. feet as fast as each 500 M. feet is skidded, and the balance when all the logs are delivered in said Rifle river boom.
"It is further agreed and understood that, as security for money advanced and to be advanced by said McGraw & Co. to said Dole on account of said lumbering job, that all horses, harness, T rail, railroad cars, or lumbering outfit, of whatever kind, purchased or to be purchased for said operation, including said railroad complete, shall be and remain the property of said McGraw & Co. until paid for by said Dole.
"It is further agreed and understood that the amount advanced said Dole for the purchase of said outfit shall be deducted from said above-named advances on skids and on bank as fast as said Dole can possibly spare any part of said advances for the carrying on of said operation. It is also agreed and
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