Mich. Trust Co. v. Flanagan
| Decision Date | 03 April 1934 |
| Docket Number | No. 102.,102. |
| Parties | MICHIGAN TRUST CO. v. FLANAGAN. |
| Court | Michigan Supreme Court |
OPINION TEXT STARTS HERE
Appeal from Circuit Court, Dickinson County; Frank A. Bell, Judge.
Suit by the Michigan Trust Company, as administrator of the estate of Philo C. Fuller, deceased, against John J. Flanagan. Judgment for defendant, and plaintiff appeals.
Affirmed.
Argued before the Entire Bench.
Carl O. Bay, of Ontonagon (Harry K. Bay, of Ironwood, of counsel), for appellant.
Derham & Derham, of Iron Mountain, for appellee.
This is a suit upon a renewal of a promissory note in the sum of $11,000, dated October 10, 1928, payable to the order of the Norton Lumber Company one year after date. Another note given for an interest installment is also involved. The principal note was signed by defendant, John J. Flanagan, and by H. A. Newkirk. On the back of the note there is an indorsement making it payable to the order of plaintiff, Philo C. Fuller. On trial before a jury plaintiff's right to recover was challenged on the ground that there was mutual mistake in the execution of the note of which the one in suit is a renewal which mistake resulted in failure of consideration, and alos that by reason of a subsequent oral agreement defendant was entitled to credit on the note for certain personal property in an amount sufficient to satisfy the obligation. Defendant had verdict and judgment, and plaintiff has appealed.
The following facts are pertinent to the questions presented by this appeal. In October, 1922, John J. Flanagan and Dr. H. A. Newkirk, operating as partners, purchased timber in northern Michigan from the Norton Lumber Company. Briefly this purchase covered 18,000,000 feet of timber at a price of $7 per thousand, with a down payment of $25,000. Defendant and his partner began logging operations and continued such until the latter part of 1925. During the course of operations, in accordance with the purchase contract, the partners undertook to pay the $7 per thousand on the amount of logs shipped or ready for shipment from month to month. The Norton Lumber Company seems to have been owned or at least largely controlled by Mr. Philo C. Fuller and Mr. William C. Anderson, the former being president and the latter secretary and treasurer. The amount due on the logging contract was ascertained from month to month by Mr. Anderson, an expert accountant, checking the partnership books and ascertaining therefrom the amount of logs shipped or ready for shipment. The partnership evidently fell in arrears in making these payments. In April, 1926, the parties met and discussed settlement. At that time Fuller, Anderson, and Newkirk checked the books kept by the partnership. They reported to defendant, Flanagan, that the books showed an indebtedness to the Norton Lumber Company of $20,000. Flanagan testified that this alleged indebtedness pertained only to the logging operations. Aside from this indebtedness, the partners had also purchased from the Norton Lumber Company a logging equipment for which the partners had given to the company two promissory notes, one for $9,000, the other for $8,000. On April 29, 1926, a settlement agreement was reached, reduced to writing, and signed by the respective parties. It provided that in full settlement of the Norton Lumber Company's claim against the partners the latter should give to the former a note in the sum of $11,000 dated April 10, 1926, and payable eighteen months thereafter, with the privilege of renewal for an additional year. The $9,000 note and the $8,000 note given for the logging equipment were to be canceled. The settlement agreement also provided that the partners should execute a bill of sale to the Norton Lumber Company for all the personal property then at the place of the logging operations. The $11,000 note was not only renewed for the additional period of one year, but it was renewed a second time, and this second renewal is the note in suit.
As stated above, the note give to the Norton Lumber Company was indorsed to Philo C. Fuller. After suit was instituted thereon, Mr. Fuller died and the suit is prosecuted by the administrator of his estate. Both Mr. Anderson and Dr. Newkirk are also deceased.
As noted above, the defenses submitted to the jury were mutual mistake and a subsequent oral agreement. Appellant contends that the evidence does not sustain either the alleged mutual mistake or the claimed subsequent oral agreement. But appellant presents as a primary question for review the following:
‘In a suit upon a renewal note, the original of which was executed in accordance with the terms of a settlement agreement, can the defendant interpose the defense of mutual mistake in the execution of said agreement and the defense of a subsequent oral agreement amending it?'
Under the facts here involved we think the trial judge correctly held that each of these defenses was available to defendant. The respective litigants stand in the position of original parties to the transaction. No innocent third parties are involved. The testimony discloses nothing which works an estoppel as a matter of law or constitutes a...
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Petersen v. New York Life Ins. Co.
...that there was a mutual mistake made by the parties because the award at issue was calculated by mistake. Michigan Trust Co. v. Flanagan, 266 Mich. 527, 254 N.W. 194 (1934). Plaintiff claims that the mistake in the calculation was not mutual but unilateral, if any mistake was made. Plaintif......
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