MORSE, J.
September
1, 1883, a contract was made between one Charles H
Mitchamore and the Courier Company, of East Saginaw, by which
they formed a copartnership under the name of the Michigan
Paper Company, to carry on a general paper business. The
Courier Company contributed $8,000 to the capital stock, and
Mitchamore agreed to contribute $600. Mitchamore was to be
manager of the business, at a salary of $900 per annum.
Semi-annual inventories were to be made, and, after paying
expenses and interest on the capital invested, the profits
were to be divided equally. The contract was for one year
and, if mutually agreed at the end of that term, might be
continued for four years more. Mitchamore actually put in but
$400, and this he drew out before the end of the first year.
On the first day of September, 1884, William H. Edwards, the
father of the plaintiff, acting as manager of the Courier
Company, and in fact the real owner of the property, agreed
to sell the property and the business to said Mitchamore, and
entered into the following contract with him:
"Memorandum
of agreement made this first day of September, 1883
between the Courier Company, of East Saginaw, Michigan, and
C.H. Mitchamore, of the same place. The conditions of this
agreement are that the said Courier Company shall
contribute the sum of eight thousand dollars ($8,000) in
cash or merchandise, or both, and the said C.H. Mitchamore
shall contribute the sum of six hundred dollars ($600) in
cash, for the purpose of forming a copartnership between
the said parties, and carrying on a general paper business
under the firm name of Michigan Paper Company, said firm
doing business in East Saginaw. The said C.H. Mitchamore to
assume and retain the management of said business, and, as
a compensation for his services, the said Michigan Paper
Company shall pay said Mitchamore the sum of nine hundred
dollars ($900) per annum. An inventory of all goods and
chattels shall be taken semi-annually, and the net profits
after paying all expenses, including interest at the rate
of seven (7) per cent. on the capital invested, interest
payable to each copartner according to his or their right
therein, shall be divided equally between the said
copartners, and the interest of said Courier
Company in said copartnership is the sum of $6,783. Now, it
is agreed that the said copartnership between the said
Courier Company and the said Mitchamore shall continue
under the name and style of the 'Michigan Paper
Company,' upon the following terms and conditions:
"First.
Said Courier Company agrees to sell, and the said
Mitchamore agrees to purchase, the interest of said Courier
Company in said copartnership for the sum of $6,783, which
shall be paid by the said Mitchamore to the said Courier
Company as follows: $500 upon the execution of this
article; $500 on or before October 1, 1884; $1,000 on or
before November 1, 1884; and the balance of said purchase
price shall be paid as follows: $200 on the tenth day of
each month, commencing December 10, 1884, and continuing on
the tenth day of each and every month thereafter until the
full amount of said purchase price is paid, with interest,
upon all sums remaining unpaid, at the rate of seven per
cent. per anumm, semi-annually, said interest payable upon
the tenth day of March and September, respectively.
"It
is agreed that said Courier Company shall keep, hold, and
retain its title and ownership of the property, stock, and
effects of the said Michigan Paper Company until the full
and complete performance of the agreements herein
contained, as its interest in said copartnership from time
to time may
appear; it being understood and agreed that the interest of
said Mitchamore in said copartnership shall increase, and
the interest of said Courier Company decrease, in
proportion to the payments made by said Mitchamore in
accordance with the terms and conditions of this contract
as hereinbefore stated; that, so long as the terms and
conditions of this agreement are complied with, and the
payments aforesaid are made, that all the profits of said
business shall belong to said Mitchamore,--the interest
upon said payments hereinbefore provided being treated and
taken by said Courier Company in lieu of its share of the
profits of said copartnership.
"It
is understood and agreed that said Mitchamore shall have the
sole management and control of said business. It is further
agreed that if the said Mitchamore shall pay the said Courier
Company the sum of $5,500, in addition to the $500 paid upon
the execution of this contract, on or before September 20,
1884, with interest upon the amount hereinbefore stated, from
this date to the time of said payment, then
Mitchamore shall be and become the absolute owner of all the
right, property, and effects whatsoever of said Michigan
Paper Company."
This
contract was assigned December 4, 1884, by the Courier
Company to the plaintiff.
March
2, 1885, Mitchamore made an assignment for the benefit of his
creditors to the defendant, who took possession of the
property, and converted it into money under and by virtue of
said assignment. After the contract of September 1, 1884, and
up to the date of the assignment, Mitchamore had exclusive
possession and control of the business, and the Courier
Company and the plaintiff and his father had nothing whatever
to do with the same. Mitchamore went on with the business
buying new goods, and making new debts to quite an amount. He
carried it on under the name of the Michigan Paper Company.
At the time of the assignment, Mitchamore owed for debts he
had personally contracted; also for debts that had been
contracted between September 1, 1884, and December 4, 1884.
He also owed the plaintiff on the contract of September 1,
1884, $4,434.83. He had on hand, in merchandise, $5,198.09;
fixtures, $675.85; and standing accounts, $1,053.37; in all,
$6,927.31. The proceeds of this property from sales and
collections by the defendant, as assignee,...
