Pierce v. Pierce

• Decision Date: 21 January 1885
• Citation: 22 N.W. 81,55 Mich. 629
• Court: Michigan Supreme Court
• Parties: PIERCE v. PIERCE.

22 N.W. 81

55 Mich. 629

PIERCE v. PIERCE.

Supreme Court of Michigan

January 21, 1885

Appeal from Marquette.

W.P. Healy, for complainants.

Bell & Hanscom, for defendant and appellant.

COOLEY, C.J.

The purpose of the bill in this case is to enforce a trust in lands arising by implication of law from the alleged fraud of the defendant. The parties to the suit are brothers, and heirs at law of James Pierce, who died intestate at Sharpsville, in Pennsylvania, December 2, 1874. His estate was a large one, and included railway and banking interests coal lands, and a blast furnace in Pennsylvania, and mining interests in Marquette county, in this state. Shortly after his death it was agreed between his widow and his five sons that Wallace and Jonas should be appointed administrators but that the estate for some time should be neither sold nor divided, and that each son should take charge of some portion of the estate, and manage it for the common benefit. Under this agreement the mining interests in Marquette county were put in charge of defendant, who continued to be manager thereof until April, 1881, when an amicable partition was made of the estate, except that the Marquette mining property was not divided, and was still left in defendant's charge.

The bill in this case avers that James Pierce, in his life-time purchased a large amount of stock in the S.C. Smith Iron Mining Company, then operating an iron mine in Marquette county. He also advanced a large sum of money to that corporation to enable it to carry out its business. The corporation, however, fell into financial difficulties, and went into bankruptcy; and in 1878 the said Wallace and Jonas as administrators, purchased its real estate, and commenced mining operations and operated a saw-mill thereon by consent of all the heirs. The mine was then called the Cheshire mine. The bill further avers that in the year 1879 the defendant suggested the propriety of making explorations on the north line of the Cheshire mine property for iron ore, and it was agreed that defendant should endeavor to get a lease of the property adjoining on the north, for the benefit of the estate, for the purpose of mining iron ore for a royalty; that such lands at the time were of little known value, but the heirs were willing to expend some money in explorations thereon; that defendant informed the others that he could not take such a lease as administrator, but would take it in his individual name for the benefit of all, to which the other heirs assented; that he thereupon did procure such a lease, and the heirs took possession and commenced operations thereon, calling the leased lands the North Cheshire; that within a year $5,000 were expended thereon, without apparent valuable result, and the cost charged to the profit and loss account of the Cheshire mine,--the Cheshire and North Cheshire being treated by all parties as one property.

The bill then states the negotiations for a partition of the estate between the heirs, which was accomplished in April, 1881. In the course of these, defendant proposed to take the Marquette mining property at $10,000, he representing that the property, as a mine, was valueless, and could only be regarded as wild land, with a saw-mill thereon, and certain property for mining purposes at the mine; that afterwards, in November or December, 1880, complainant Frank Pierce proposed to take half the Marquette property, to which defendant assented; but in January or February following, defendant said he would not take it at his valuation until he had seen it again; and in March he went to Marquette, and on his return wanted to take to himself exclusively all the Marquette mining property that belonged to the estate. Complainants, however, had been investigating its value, and had learned that the profits for the last year had been $7,500, and thereupon insisted on taking said property with defendant in equal shares. They charge defendant with keeping them in ignorance of the value of the property in order to obtain it himself at a nominal valuation. The result of the negotiations was that the five brothers were left joint owners of the Cheshire mine, while the other property was divided.

The bill then avers that for the first time the defendant, on April 5, 1881, informed complainants that the lease of the North Cheshire property was his, and he should keep it as his own; to which they objected and protested, claiming that the North Cheshire was developed into a mining property from wild land by the money and exertions of complainants and defendant in common, and that they regarded and should continue to regard it as common property. Up to this time they had had implicit confidence in defendant, but they charge that he used his position as manager of the common property to obtain possession of the North Cheshire, and in the absence of complainants, in April, 1881, he directed the book-keeper of the Cheshire to separate the amounts expended on the North Cheshire from the Cheshire, which they protested against when it came to their knowledge, and refused to ratify the action. The bill then prays that the Cheshire mine property be sold, under the order of the court, and the proceeds divided; that defendant render an account in respect to the North Cheshire property, now called the Swanzey; and that a receiver be appointed, pending the suit, and commissioners to make partition.

The answer admits the arrangement for carrying on the Cheshire mine for the benefit of all the heirs, but avers that in the spring of 1880 a division of the property of the estate among the several parties entitled thereto was agreed upon, under which defendant was to have the mining property in the county of Marquette at the value of $10,000. He was also to have one-half the accounts of the mine, the other half being set over to complainant Frank Pierce. At that time the entire property of the estate was appraised, and a division of the whole agreed upon. No conveyances were then made, but the parties entered into possession of the greater part of the portions assigned to them, respectively, and managed and carried them on as their individual property. The division was to date from April 1, 1880, and each received the property of his portion from that time. The Marquette mining property was considered to belong to defendant from that time; but in the latter part of the following December complainant Frank Pierce decided that he wanted a one-half interest in the same, and defendant agreed thereto, and such changes were made in the division of the estate as were rendered necessary thereby. Early in the following spring the other complainants became dissatisfied with the valuation of the property as it had been agreed upon, and insisted upon a change in the division, which defendant declined to assent to, but finally, about the fifth of April, 1881, it was agreed between defendant and complainants that they should all take equal interests in said mining property, subject to all the liabilities, and with all the profits accruing thereto, from the first of April, 1880, and that defendant and Frank Pierce should have each a half-interest in the accounts of the mine up to that date. This division was consummated by deed, and defendant was left in the management.

The answer further states that in the year 1879, by mutual agreement of the parties, explorations were entered upon on their common property, to find other ores, if possible, as the old mine appeared to be about worked out. A shaft was sunk and other work done near the north line of the property, and up to the division of April 1, 1880, about $1,100 had been expended in these explorations. Thereafter the defendant continued them on his own account, expending $1,600 in addition to what had been expended before, and during that year, with a view of taking a lease of the property adjoining on the north, he expended about $1,000 upon that. All the accounts of explorations, both upon the Cheshire mining property and upon that to the north, were kept together on the books of defendant, who, in the division as it then stood, was the owner of the Cheshire mine; but the accounts were separated after the change in the division in December, when it was agreed that Frank Pierce should take a half-interest in the Cheshire mine, and after the final division, about April 5, 1881, whereby all the parties became equally interested in the Cheshire mine, the sum which had been expended on the North Cheshire property was charged over on the books to defendant. From the date last mentioned the mining business on the Cheshire mining property was carried on by all parties as a partnership, under the name of "The Cheshire Iron Company," and that upon adjoining land to the north was carried on by defendant alone under the name of "The North Cheshire Mine."

The defendant denies positively that he ever undertook to obtain a lease or leases, for the benefit of the estate, in his own name or otherwise. He avers that he commenced efforts to obtain the property since called "The North Cheshire" property, and now, the Swanzey, after the division of 1880, and while the Cheshire mine was understood to be his own; that he did not ascertain all the owners until July of that year, and did not obtain a contract for a lease until in November following. He denies all misrepresentation or deception in respect to the Cheshire mine, and avers that the accounts of the mine were kept at Sharpsburg, Pennsylvania, where the complainants had access to them at all times. He says he always claimed the North Cheshire property as his own, after he acquired it, and denies any equitable claim on the part of complainants to any participation therein.

The case was heard on...