Seymour v. Cushway

• Decision Date: 11 October 1898
• Citation: 76 N.W. 769,100 Wis. 580
• Parties: SEYMOUR ET AL. v. CUSHWAY ET AL.
• Court: Wisconsin Supreme Court

100 Wis. 580

76 N.W. 769

SEYMOUR ET AL.

v.CUSHWAY ET AL.

Supreme Court of Wisconsin.

Oct. 11, 1898.

Appeal from circuit court, Milwaukee county; D. H. Johnson, Judge.

Action by Richard A. Seymour and others against Joseph H. Cushway and others. There was a judgment for defendants, and plaintiffs appeal. Affirmed.

This is an equitable action to have a trust declared in certain standing timber, the legal title to which had been conveyed to defendants, and in the profits derived by them from the business of manufacturing it into lumber. The complaint alleged, in substance, among other things, that an oral agreement was made between the plaintiffs Richard A. Seymour, John Seymour, and Antoine E. Cartier and the defendants Joseph H. Cushway and one Fred Herrick to form a partnership to purchase said timber and manufacture it; that the defendants fraudulently colluded to break the agreement and prevent its consummation, and subsequently purchased the timber for themselves, and were then engaged in cutting it into lumber, from which they derived large profits, and that the timber rights so acquired by them were very valuable, and would continue to yield large returns. The defendant Cushway, a halfbreed Indian of little or no pecuniary responsibility, parted with his interest before the business was started, and so did not appear in the action. The defendants Herrick and Stearns, answering separately, denied the charges of fraud and collusion, and in substance denied that the plaintiffs ever acquired any rights in the timber in question. They also insisted that the complaint did not state any grounds for relief in equity, but that the only remedy the plaintiffs had was an action at law, and at the commencement of the trial objected to any evidence being given under the complaint upon the ground that it did not state facts sufficient to constitute a cause of action; but the objection was overruled. It appears that the subject-matter of the controversy was timber on the Lac du Flambeau Indian reservation, a large tract of land, about 70,000 acres, in the north ern part of the state, set apart by the government for the use of the Chippewa Indians. They had no power to sell, or contract for the sale of, this land, except by permission of the government, and subject to such restrictions as it should prescribe. This was recognized by all the parties at every stage of the negotiations. It was understood by all that no rights whatever could be acquired in such timber except upon such terms and conditions as should be prescribed by the president. The court found, among other matters, that the defendants Herrick and Cushway, in the summer of 1892, undertook to obtain the title to certain of the timber upon said reservation, and made a proposition to the Indians to buy it at specified prices. The Indians were about to petition the commissioner of Indian affairs for permission to accept the proposal, when, at the suggestion of the farmer upon the reservation, the petition was withheld until Cushway and Herrick could furnish evidence of their responsibility. Herrick went to Ludington, and verbally proposed to plaintiffs to enter into partnership with him and Cushway to purchase the timber upon the reservation, and to manufacture it into lumber, specifying the interest which each should have. One of the plaintiffs went with Herrick to the reservation, and, after looking over the ground, verbally accepted the offer. It was then represented to the Indians and to the farmer that the plaintiffs had joined with Herrick and Cushway in the proposed undertaking, and, their references being satisfactory, the petition of the Indians which had been started was completed, and delivered to the defendant Herrick. The parties then proceeded to treat with the government, and the approval of the scheme by the Indian agent at Ashland was obtained upon representations by the defendant Herrick that the plaintiffs were or would be members of the firm which was to purchase the timber. Herrick employed an attorney, and went with him to Washington, taking said petition of the Indians for authority to sell, indorsed with the approval of the Indian agent. At Washington they prepared and presented to the commissioner of Indian affairs a formal proposal to buy and manufacture into lumber all the timber upon the allotted lands of the reservation. This was signed by J. H. Cushway & Co., by Fred Herrick. The defendants Cushway and Herrick had signed an agreement reciting the contemplated arrangements with the La Pointe Agency of Indians of Lac du Flambeau, in which it was stated that Cushway was to act in the capacity of agent in dealing with the Indians, and Herrick and those associated with him were to furnish the necessary capital for buying timber and manufacturing lumber and shingles; that it was agreed that Cushway should devote his entire time and attention to procuring timber, dealing with Indians,and as interpreter, and perform such other duties as were necessary for the advantage of all parties in such enterprise; and he was to have “for such services the one-fourth of the net profits of such undertaking, and said Fred Herrick the three-fourths of the net profits, to be shared between him and his associates in such undertaking.” Herrick laid the situation before the plaintiffs, offered them an interest in the business proposed, and induced them to go with him to the reservation, prepared to carry through the negotiations, if satisfied with the conditions there. His offer was accepted, and a verbal contract of co-partnership under the firm name of J. H. Cushway & Co. was there concluded between the plaintiffs and the defendants Cushway and Herrick to carry out the undertaking, by which the plaintiffs Seymour Bros. were to furnish one-third of the capital, Cartier one-third, and Herrick one-third. Profits were to be divided into four parts, one-fourth going to Cushway, one to Herrick, one to Cartier, and one to Seymour Bros. Upon the showing made by the plaintiffs of their financial and business standing, and the assurance that the plaintiffs were members of the firm, the petition signed by the Indians, indorsed by the farmer, and approved by the Indian agent at the La Pointe agency, was obtained, and also leases of land sufficient for the plant. The petition and proposition were taken by Herrick to Washington, and submitted to the Indian commissioner, and at his suggestion the proposition was amended and enlarged by a new one, signed “J. H. Cushway & Co., by Fred Herrick,” which proposed to purchase from lands then allotted, and thereafter to be allotted, all the merchantable pine, hemlock, birch, and Norway timber on the reservation at certain prices, and to give bond for the faithful performance of the undertaking. This was favorably reported by the commissioner to the secretary of the interior, together with rules and regulations to govern the sale and manufacture of the timber, all of which were sanctioned by the secretary, and reported to the president; and on the 28th of September, 1892, the president authorized the sale of all timber on allotted lands, and the dead timber on the unallotted lands, to J. H. Cushway & Co., and its manufacture under said rules and regulations. It appears that Herrick reported to the plaintiffs the progress of the matter through the departments, and the receipt by Herrick of some papers from Washington after the president's authority was obtained, which he turned over to the plaintiffs for examination, and that he obtained them again from the plaintiffs before they had an opportunity to examine them. In November thereafter, Herrick interested the defendant Stearns in the undertaking, and secured from him better terms than he had made with the plaintiffs, and under date of December 2, 1892, the three defendants entered into a contract of co-partnership under the firm name of J. H. Cushway & Co., “for the purpose of carrying into effect the undertaking of J. H. Cushway & Co. with the United States government regarding the purchase of timber from the Lac du Flambeau Indians of Wisconsin; that said co-partners undertake to carry into effect all that pertains to the proposition of said J. H. Cushway & Co. to the commissioner of Indian affairs, and the requirements of the United States in relation thereto.” Thereafter contracts with the Indians were concluded, and dated back to December 2, 1892, by which sales of timber were made to J. H. Cushway, Fred Herrick, and Justus S. Stearns, doing business under the firm name of J. H. Cushway & Co.; and later the mill was erected, and has since been operated by the said firm. In the latter part of November, 1892, the plaintiffs Seymour Bros. received a letter from the defendant Herrick bearing date November 22, 1892, in which he said, “The talk we have had as to making a deal between you, Mr. Cartier, and myself as to my timber at Lac du Flambeau, will not materialize.” Thereafter the plaintiffs went to the reservation for an explanation of this lettter, and the defendant Herrick there denied that they had any interest in the deal, and said to them that if they had any recourse they must take it at law. Articles of co-partnership were then formed between Herrick and Stearns, with the assent of Cushway, to carry out the undertaking of said J. H. Cushway & Co. with the United States regarding the purchase of said timber from the Lac du Flambeau Indians, in which articles of co-partnership Cushway acquiesced, and disclaimed any vested or other right beyond the amount of compensation to be received by said Cushway; but he was not to have any of the rights accorded to a partner. It was for this alleged wrongful exclusion of the plaintiffs from the firm, and the substitution of the defendant Stearns, who had notice of the plaintiffs' rights, that they seek relief. The co-partnership agreement between Herrick and Stearns recites that it is intended for the...