Sage Land & Imp. Co. v. Ripley

• Decision Date: 03 January 1912
• Docket Number: 2,166.
• Citation: 192 F. 785
• Parties: SAGE LAND & IMPROVEMENT CO. v. RIPLEY.
• Court: U.S. Court of Appeals — Sixth Circuit

192 F. 785

SAGE LAND & IMPROVEMENT CO. v. RIPLEY.

No. 2,166.

United States Court of Appeals, Sixth Circuit.

January 3, 1912

De Vere Hall (Benton Hanchett, of counsel), for appellant.

W. S Humphrey (Sharpe & Handy and Humphrey & Grant, on the brief) for appellee.

Before WARRINGTON, Circuit Judge, and McCALL and SANFORD, District judges.

McCALL District Judge.

This case is here upon an appeal from the United States Circuit Court for the Western District of Michigan. The bill was filed by Lucien V. Ripley, appellee (hereinafter referred to as the complainant), against the Sage Land & Improvement Company, appellant (hereinafter referred to as the defendant). The complainant is a citizen of the state of Michigan, and the defendant is a corporation and a citizen of the state of New York. A demurrer was interposed to the bill which was by the Circuit Court overruled. An answer was filed by the defendant. After proof was taken, the case was heard, resulting in a decree for the complainant. The defendant appealed, and assigns errors.

We shall first dispose of the questions raised on the demurrer. The demurrer and answer were filed at the same time; and, if in their scope and effect each does not involve the whole bill, still each so far involves and overlaps the same portions of the bill as to amount to a waiver and overruling of the demurrer by the answer in spite of the disclaimer made in respect of the latter. The rule of decision in this behalf is too familiar to justify stating in detail the reasons why we think the various decisions cited by the learned counsel for defendant are distinguishable from the present case. Some of the decisions stating the general rule, which we regard as applicable here, are Droste v. Hall (N.J. Ch.) 29 A. 437; Adams v. Howard (C.C.) 9 Fed. 347, per Blatchford while Circuit Judge; Strang v. Richmond, P. & C.R. Co. (C.C.A. 4th Cir.) 101 F. 511, 514, 41 C.C.A. 474; Bryant Bros. Co. v. Robinson (C.C.A.5th Cir.) 149 F. 321, 329, 79 C.C.A. 259; Crescent City, etc., Co. v. Butchers', etc., Co. (C.C.) 12 F. 225; McDermott v. Blois, 1 R.M.Charlt. (Ga.) 281.

Moreover, the contention that the legal representative of the deceased Sage is an indispensable party is answered by the facts: (1) That the bill does not show that any such legal representative was ever appointed, and so does not in that respect present a question for demurrer; and (2) the bill discloses facts showing that the deceased Sage was originally invested with the title to the land in dispute in trust for himself and Ripley, and that subsequently the land was conveyed by Sage at his instance and with the consent of Ripley, to the appellant, subject to the trust and to the rights and liabilities of the parties interested in the land, under circumstances fairly charging appellant with the assumption of all liabilities growing out of the trust, and substituting the appellant in the place and stead of Sage in his relation with Ripley regarding the lands. It follows, we think, that no one representing the deceased Sage or in any wise liable for his acts, other than appellant, is an indispensable or even a proper party defendant touching any object of the present suit; for the case thus presented by the pleadings places the deceased Sage in the same relation to the trust property as that which he would have occupied had he possessed no interest in the land except that of a naked trustee, and surely this result of averments is not open to demurrer. McBride v. McIntyre, 91 Mich. 406, 408, 409, 51 N.W. 1113; Ryan v. O'Connor, 41 Ohio St. 368, 372; Northern Pac. R. Co. v. Kindred (C.C.) 14 F. 77, 81; Laidly v. Huntington, 121 U.S. 179, 181, 7 Sup.Ct. 855, 30 L.Ed. 883; Harding v. Olson, 76 Ill.App. 475, affirmed 177 Ill. 298, 52 N.E. 482.

Regarding the claim that the court below was bound sua sponte at a later stage of the cause to take notice of the absence of the indispensable party mentioned, it is enough to say, as will more fully appear later, that the evidence reveals the fact that, although the deceased Sage was originally invested with the legal title to the land, yet, from that time to the time of his conveyance of the trust property to appellant, he acted for and in the interest of a copartnership composed of himself and his sons and conducted under the name of H. W. Sage & Co.; and that, when he sought and secured the consent of Ripley to convey the trust property to appellant, he did so in the interest and for the benefit of the copartnership. Apart from the effect of the answer upon the demurrer, and considering the claim that under statutes of the state of Michigan there was need of averment that the trust in question was created in writing, the fact that there is nothing in the bill to indicate that it was not so created ought alone to be a sufficient answer. Lamb v. Starr, Deady, 350, 14 Fed.Cas. 1024; Green v. Wagon Road Co. (C.C.) 23 F. 67, 70.

But it is averred that the trust was created by letters passing between the deceased Sage and Ripley, and this is enough. Loring v. Palmer, 118 U.S. 321, 6 Sup.Ct. 1073, 30 L.Ed. 211; Renz v. Stoll, 94 Mich. 377, 54 N.W. 276, 34 Am.St.Rep. 358. Without discussing the subject of the demurrer further, we hold that it was properly overruled.

The character of the decree to be entered in this case turns upon the proper construction of a letter, which comprises the contract between the parties, and is as follows:

'Ithaca, Dec. 7, 1880.

'L. V. Ripley, Superior, Wisconsin: We have yours, 29th ult. from Chicago--and 3d inst. from Superior-- with regard to the farming and hardwood lands-- if it would suit you we will enter 20,000 acres-- and pay for them-- i.e., 16,000 for ourselves and 4,000 for you-- all to be entered in our name and we will carry them and pay the taxes for you-- charging you the taxes annually and annual interest at 7 per cent. for five years-- after the lands are purchased we will draw lots for division-- and those drawn by you shall be known as yours & when you have chance to sell we will take pay and deed before the expiration of five years-- and will deed the whole on receiving paymt. It is an objection to these lands that they are so near together-- but they may be valuable nevertheless-- If this suggestion is worth your attention, please reply at once and advise how to get the locations at Marquette-- Whose are the lands dotted red on the map sent us? Does the lowest red line represent the Mackinaw & Marquette Road? Are the 40s surrounded by red lines up near Vermillion Point part of your location? Write us fully about these matters--Keep us well posted about the country you go through and the lands you see and write if you know of any better section to find lands-- Bardon seems to have some doubts whether he will find all he wants there-- and says if he don't he will take you without loss to me-- as to this perhaps I can use you for a year if you fail to find all you want where you are-- Write me when you can.

'Truly yours,

H. W. Sage.'

It appears from this letter that it was written in response to complainant's letter to Henry W. Sage, of November 29, 1880, and that the letter of November 29th was destroyed some years later, and after the death of H. W. Sage, by one of his sons. Complainant not having kept a copy of it, neither the original nor copy is produced. H. W. Sage died in 1897.

The complainant was examined as a witness in his own behalf, and was asked to state the subject-matter of his letter to H. W. Sage of November 29th. Over the objection of the defendant, the witness answered, in so far as it is material to quote here:

'I asked Mr. Sage if he knew of any one that would care to invest in that kind of lands and timber; that the Detroit, Mackinaw & Marquette R.R. were contemplating locating all the government land there was left in the Upper Peninsula in the vicinity of that railroad, and asked him if he knew anybody that would care to take those lands, giving me a quarter interest in the lands, and I think, though I am not positive about this, its equivalent in cash. I probably asked him something more than a dollar and a quarter an acre, because if I simply put it a dollar and a quarter, they would think they were not getting much of a bargain in buying it.'

And again the witness was asked:

'Q. What change from your proposition to Mr. Sage did you understand he made by this letter of December 7th? A. I remember distinctly that my proposition was one-quarter interest in the lands, and this is one-fifth in the letter.

'Q. And do you understand that was the only change he made from your proposition? A. Yes, sir. * * *

'Q. And what did you say to Mr. Sage respecting his proposition to you? What did you answer him by letter? A. I accepted the proposition as he made it.'

The admission of this evidence is assigned as error. The objection is based upon the ground that such...