Laughlin v. North Wisconsin Lumber Co.

• Decision Date: 25 February 1910
• Docket Number: 17 D.,13 D
• Citation: Laughlin v. North Wisconsin Lumber Co., 176 F. 772 (W.D. Wis. 1910)
• Parties: LAUGHLIN v. NORTH WISCONSIN LUMBER CO. et al. SAVAGE v. LAUGHLIN. LAUGHLIN v. SAVAGE.
• Court: U.S. District Court — Western District of Wisconsin

176 F. 772

LAUGHLIN v. NORTH WISCONSIN LUMBER CO. et al. SAVAGE v. LAUGHLIN. LAUGHLIN v. SAVAGE.

Nos. 13 D, 17 D.

United States Circuit Court, W.D. Wisconsin.

February 25, 1910

Randolph Laughlin and Defrees, Brace & Ritter, for Laughlin.

Clapp &amp Macartney, for Lumber Company.

Stiles W. Burr and Harold Harris, for Savage.

SANBORN District Judge.

Complainant is the equitable owner of 1,023.41 acres of land in Bayfield county, Wis., and the defendant Savage is the owner of the legal title, all subject to a certain easement of flowage and highway servitudes, and excluding certain mineral and oil rights. The original bill was brought to restrain Savage from forfeiting complainant's contract of sale, and Savage's bill (filed in the state court, and removed to this court) was to quiet the title to the same lands. It alleged legal title in Savage, that the possession was vacant, and that Laughlin made some claim which should be held void. The cross-bill in the removal suit to quiet title set up the same matters as alleged in the original bill. The supplemental bill alleged that part of the timber on the lands had burned up pending suit, and that Savage was liable for the value of the burned timber by reason of his wrongful intermeddling shown in the original and cross-bills, through which complainant's right to pay up and obtain title was defeated.

The North Wisconsin Lumber Company was the original owner of the lands, with its general office at Hayward, Wis., afterwards moved to Chippewa Falls. January 15, 1904, it sold the lands by written indenture, sealed by both parties, to Savage for $9,210.69, of which $2,046.82 was paid down, the balance due in five annual installments of $1,430 each, January 15th of each year from 1905 to 1909, with interest at 6 per cent. If the deferred payments should be made punctually, one-sixth of the interest was to be abated. Savage covenanted to pay the deferred sums and taxes imposed after January 1, 1904; and he also had an interest in the deferred payments by way of rebate for about $600 on account of commissions. The vendor covenanted to convey by warranty deed upon full performance to Savage, his heirs and assigns. In case of any default (the times of payment, and payment of taxes, being declared as of the essence of the contract), the vendor should have the right to declare the contract null and void on 30 days' notice to Savage or his assignees. If default continued after the 30 days, Savage's interest should utterly cease and determine, without any right of Savage, his heirs or assigns to reclaim or redeem, with the vendor's right to convey with all improvements, free and clear from any claim of Savage, his heirs or assigns. The notice was to be served personally or by mailing it at Hayward, directed to Savage at his address in St. Paul. Assignments were provided for; no assignment should be valid unless indorsed, and countersigned by the vendor's secretary. There was no express transfer of the right of possession, but it was contemplated that the vendee or his assignees might make improvements; and complainant, the assignee and present owner of the contract interest, had some 12 years before taken possession of a small island in a large lake situated near the land, not actually described in the contract, but being part of the contracted lands by reason of not being surveyed or meandered, and built a summer home thereon, at a considerable expense. He claims title to this island also by an independent title by estoppel, through the payment by him of the expense of certain improvements of the shore made by the vendor. Complainant is a lawyer, though for some years not in actual practice, and was formerly a judge in Missouri. He is a man of ability and considerable estate.

Savage assigned the contract May 12, 1904, to C. H. Norton and H. P. Norton, who assigned to Laughlin April 7, 1905. The vendor consented to both assignments, without exempting Savage from any of his covenants. The stipulated payments were made except for 1907, 1908, and 1909, and except taxes for 1906 and 1907. By inadvertence Laughlin failed to pay the installment falling due January 15, 1907; but on January 14, 1908, he sent his check for the 1908 installment to the vendor, which was returned to him because a deed of the land had been made to Savage. In the letter sending the check Laughlin offered to pay the 1907 installment and the taxes.

Under the Wisconsin law the relations of the parties to the contract were as follows: Laughlin was the equitable owner in fee, and vendor held the legal title as security for the unpaid balance of the purchase price, being a quasi mortgagee, entitled to strict foreclosure on default. Church v. Smith, 39 Wis. 492. The vendor also had the right to forfeit on 30 days' notice. The contract having by necessary implication given the jus possessionis, the vendee or his assignee was the equitable owner. Martin v. Scofield, 41 Wis. 167. Such ownership includes the standing timber. Judge Laughlin had the right to sell this timber and give a good title to it. Northrup v. Trask, 39 Wis. 515; Krakow v. Wille, 125 Wis. 284, 103 N.W. 1121. But the vendor might restrain the cutting of the timber if its security would be thereby impaired; its rights being analogous to those of a mortgagee.

In the fall of 1907, Judge Laughlin had negotiations with John E. Glover, representing the Willow River Lumber Company of New Richmond, Wis., and with Paul Vogt & Co. of Milwaukee, looking to the sale of the timber. Glover offered $10,000 for the timber, by letter to Laughlin written December 2, 1907; but Laughlin did not accept because the offer did not agree with previous negotiations between them, and because suspicious of Glover's good faith in the matter. But the timber was not sold, though Laughlin claims it would have been but for Savage's wrongful interference, set out later in detail. In October, 1908, a considerable part of the timber was destroyed by forest fire. By the supplemental bill, filed May 4, 1909, Laughlin seeks to hold Savage liable for the value of the timber, by reason of such alleged wrongful interference; but it was announced by Laughlin's solicitor during the taking of the testimony in Chicago, April 30, 1909, before the supplemental bill was filed, that complainant did not expect to obtain a judgment against Savage or any one else for damages for the loss of the timber; and that the only claim or contention in that regard was that the loss was an equity which the court should consider as against Savage, in connection with whatever equities he might urge against Laughlin. This statement was made as part of a stipulation in lieu of proof, in respect to the value of the timber destroyed by the fire, fixed in the stipulation at $5,200.

In regard to the negotiations with Vogt for the sale of the timber, Vogt made a conditional verbal offer for it, and he and Judge Laughlin were to look it over later; but nothing came of it because Laughlin called the matter off, telling Vogt, after Savage had obtained his deed from the North Wisconsin Company (as stated later), that Glover had stolen the land, and he could do nothing further about the sale until the title could be straightened out.

Complainant's equities depend wholly on Savage's conduct in his purchase of the land from the North Wisconsin Company, and it therefore becomes necessary to make a careful examination of his acts. Savage was the original vendee in the land contract, as well as in two others of a like nature. He had covenanted to pay the purchase price, and was interested in the money still due to the extent of $600. In the fall of 1907 he learned that Laughlin and Glover had been negotiating for the sale of the timber, and also that Laughlin had not made the 1907 payment on the contract. He had been for several years the attorney for Glover as to a railroad owned by the latter in the vicinity of the lands. Presumably he knew what the value of the timber was, as he often...