174 Mich. 30 | Mich. | 1913
The bill of complaint in this case was filed by complainant against defendant William J. Tully for an accounting between them for one-half of the profits arising to said defendant, realized by him from an option and mining lease on valuable mineral land located in Iron county, claimed by complainant to have been obtained for their joint benefit. The other defendants are: Margaret
As to the defendant the Crystal Falls Iron Mining Company, a stipulation in the case was entered into providing that it might continue during the pendency of this litigation under the terms of its lease with the Tully Mining Company, and under its agreement with defendant Tully and other stockholders to pay royalties, and that such defendant might be relieved from filing an answer or other pleading, and the case might be deemed at issue without entering its default, providing that such payment of royalties should not prejudice any right of complainant to demand an accounting- from defendant William J. Tully and Margaret Tully of such proportion of royalties as the court might decree complainant entitled to recover, and that such sums so paid should be included in any accounting ordered by the court. Issues were duly joined upon the answers of the defendants. The judge of the court
No statement which will give an understanding of the dispute in this case can be made which will not be of considerable length, as is evidenced by the attempts on the part of both parties in their briefs.
In stating the following facts, out of which this litigation arises, a better understanding will be had if they are stated in the order in which they occurred, and in every instance where a dispute occurs it is stated clearly and distinctly.
Complainant had lived at Ishpeming many years, and was acquainted with the officers of the large iron mines operating there, and at the time was actively interested in securing options on mineral lands in several counties. He was selling lubricating oils as his principal business. Defendant Tully had once worked in iron mines at Ishpeming and was acquainted with the bfficials of the mining companies operating on the Menominee Range.
Defendant Tully, on July 2, 1902, when he first met complainant, was conducting a store at Iron River, where he had lived for many years. On this date complainant was on a train going from Ishpeming to Iron River with two mining men to look at what was known as the Peterson property, in which he afterwards acquired an interest. Defendant Tully was on the same train and joined complainant and the others in a conversation which they were having relative to iron ore property, and mentioned what he called the “Baker property,” which he considered promising and a good place for exploration. Arriving at Iron River, complainant and defendant Tully walked together from the train uptown. In the evening, by invitation of Tully, complainant went to his store, where Tully
The Baker and Houlihan properties were located side by side in the corner of adjoining townships. The Baker land, which they examined that day, is described as the S. $ of the S. W. i, and W. $ of the S. E. i, section 31, township 43 N., range 34 W. The Houlihan land, now known as the Tully mine, lies directly west of the Baker land, and is described as the S. i of the S. E. i, section 36, township. 43 N., range 35 W. The valley, down which the parties were looking when they were on the Baker land, extends from where they stood, in a southwesterly direction, and crosses the southeast corner of the 40 acres of the Houlihan land next adjoining the Baker property on the west. Tully encouraged complainant to join him while they were there on the Baker land, and again told complainant he was not financially able to ex
These parties on this day called at the Baker house, and Tully introduced complainant as a mining man from Ishpeming, and said that they wanted to get an option again. Baker replied that they could have an option whenever they wanted it. In returning from the Baker property they walked across the middle of the Houlihan property. Complainant testified that they discussed on the way proposed methods of handling these options; that Tully proposed offering them for sale at a lump sum, but complainant advised that they should show confidence in the property by retaining an interest and offering leases at an excess royalty, which they would divide between them (the record shows that they afterwards adopted this plan); that Tully approved of this plan, and a definite verbal agreement was then made by which they were to share equally the expenses of securing and disposing of the options and the profits derived from doing so. Complainant agreed to put into the venture $1,000 to $2,000. He testified that he told Tully, who knew the fee owners of both properties, to get 90 days’ time on the Baker option before they were obliged to begin exploratory work, and in the meantime he would undertake to bring some
It is proper to state here that the entire dispute in this case is relative to the Houlihan property. Defendant Tully” denies that the verbal contract made at that time covered the option to be obtained on that property. In all other respects as to the terms and conditions of the agreement entered into his testimony substantially agrees with that of complainant. There is no controversy in this case over the Baker option or the circumstances and conditions under which it was secured.
After this verbal contract was entered into, complainant sent Capt. Platto, local superintendent of the Ishpeming Mining Company, to look at the Baker property. He was in the employ of M. A. Hanna & Co., who had an option on the Peterson property in that vicinity. The Baker option was secured September 3, 1902, running to both parties. This option Tully showed Capt. Platto when he visited the property. He went over this Baker property with Tully at his request and examined it carefully for the purpose of reporting to his company. Complainant continued to be active in interesting parties in the option already secured and then wrote Judge Flannigan, then attorney for the Oliver Iron Mining Company, for that purpose. Judge Flannigan directed him to write to Dr. N. P. Hulst, vice president of the Oliver Iron Mining Company, which he did. Defendant was also active in securing exploratory work to be done and wrote the president of the Oliver Iron Mining Company and other parties on the same subject. These negotiations resulted in this company taking an option on the Baker property at a royalty of 14 cents per ton, being an advance of four cents.
Exploratory work was begun by it on this property November 17, 1902, as appears by a letter written by Tully to complainant. Soon after this, complainant (as he claims in pursuance of their agreement), wrote Tully and
January 18, 1903, Tully wrote complainant that the Oliver Company had reached the ledge, and on February 14th following, that they had struck ore on the Baker property. Complainant testified that he then wrote Tully again saying they ought to close the Houlihan matter or some one else would get the benefit of their work. He received no reply to this letter. Tully also denies having received it.
In June, 1903, complainant visited these properties. He found that the Yerona Mining Company had its drills on the Houlihan property, but had suspended work. Tully told him that they had struck ore on the property. He also told him that he had taken an option on this property and turned it over to the Yerona Mining Company, and complainant supposed that he was included in the option. Tully also told complainant that the Yerona Mining Company had suspended work because the title was defective.
On January 10, 1903, Tully, without the knowledge of complainant, had obtained an option on the Houlihan property from Fogarty and others, in his own name, and on February 21, 1903, had transferred this option to the Yerona Mining Company. No exploratory work was done on the Houlihan property after this company suspended operations in the summer of 1903 until July, 1905.
In June, 1903, the Oliver Company also discontinued work on the Baker property, and threw up the option. To avoid forfeiting this option these parties hired men and continued the exploratory work for about 30 days; each paying one-half of all expenses. They then endeavored for several months to find some one to take the Baker op
On December 9, 1904, complainant and Tully took a mining lease from Baker, and at the same time he agreed to waive the payment of the minimum royalty for six months, provided they would continue their exploratory work. In June, 1905, as stated, the Penn Company quit work, and surrendered their option, and complainant and Tully were obliged to pay the minimum royalty and otherwise to comply with the terms of the lease until the property was taken by the controlling owners of defendant the Crystal Palls Iron Mining Company, at an advance royalty of six cents per ton, and agreements were entered into assuring each one-half of this advance, which they have continued to receive until the present time.
In August, 1903, soon after the work had been abandoned on the Houlihan property on account of the defective title, Tully went to the Penn Company about taking the Baker option. He saw Judge Plannigan, then a practicing attorney acting for the Penn Company, and also Mr. Kelly, its representative, and told him about the defective title to the Houlihan property, on account of which the Verona Mining Company threw up the option. Tully represented this as a good property if the title were cleared up. Judge Plannigan said they would not undertake to do anything with the property until the title was cleared. Tully then entered into an arrangement with Judge Plannigan to clear this title, and in consideration for his services agreed that he would give him a one-half interest in the option, and he further agreed that when the title was perfected the Penn Company, if it desired, should have the option. Judge Plannigan then told Kelly to take the Baker option, saying that he could have the Houlihan after the title was cleared up. The Penn Company took’the Baker option, but abandoned it long before the Houlihan title was perfected.
During these negotiations Tully made no mention of any interest of complainant in this option. About this
Pending'the litigation of Houlihan v. Fogarty, 162 Mich. 492 (127 N. W. 793), Judge Flannigan, as attorney for the Tully Mining Company, secured a stipulation assuring to that company the validity of its lease of the Houlihan property whatever the final outcome of the case might be. Tully did not know of this stipulation until from three to six months after it was made. Complainant first learned of this arrangement in July or August, 1909.
This court determined in Houlihan v. Fogarty, supra, that the parties who gave the first option to Tully (except Mrs. Houlihan, the widow) had no interest in the premises.
In September, 1905, Judge Flannigan organized the Tully Mining Company, and the lease which was obtained from the fee owners ran to it as lessee. Its capital stock
In order to determine the one question of fact presented, it has been necessary to carefully analyze and digest all the testimony in the case, for the reason that it all bears on this question and must all be considered in its determination. It can be of no benefit to the profession to here give a digest and our analysis of the testimony of the several witnesses, but it will be sufficient for the purposes of this opinion to give results only. Our conclusion, from such analysis of the testimony in the case, is that complainant has established by a fair preponderance of the evidence his claim that this agreement made between him and defendant Tully included the Houlihan property. The testimony of witnesses on his part, relative to statements made by Tully to that effect, has not been met or overcome by the testimony of defendant Tully and his witnesses. They are not impeached, and, as far as the record shows, are business men of standing and character in the communities in which they live. The circumstances specifically detailed by them as to the causes which brought them to these properties and their interviews with defendant Tully are not denied by him, but in effect are admitted.
It will be necessary next to consider whether complainant is entitled to enforce this contract. Having deter
Complainant in this case is not seeking to enforce the specific performance of a verbal contract relative to an interest in land. This case involves an accounting by defendant Tully, who, as complainant claims, wrongfully disposed of an interest arising out of the Houlihan option, belonging jointly to himself and complainant, and to compel him to account for all profits and proceeds; also for a transfer to complainant of one-half of the shares of stock issued to him by the Tully Mining Company, and such relief against said company as may be necessary in the premises. In our opinion complainant is entitled to such relief. Ripley v. Seligman, 88 Mich. 177 (50 N. W. 143).
The remaining question to be determined is whether complainant has been guilty of laches. It is our opinion, under the facts and circumstances of this case, that it cannot be claimed that complainant has been guilty of laches, and, to a certain extent, we have already, in discussing the question of his delay in asserting his rights to the Houlihan property, foreshadowed such a conclusion. The title to the Houlihan property was questioned to the extent that the explorers abandoned their work six months after the option was acquired by Tully, and later was in litigation for several years. There has been in this case no change of position on the part of defendant Tully, nor does it appear that he relied upon the silence or conduct of complainant and thereby changed his position to his disadvantage, by reason of which it would be inequitable that the complainant should now assert his rights. Mere
" The conduct must be relied upon by the other party, and, thus relying, he must be led to act upon it. He must in fact act upon it in such a manner as to change his position for the worse] in other words, he must so act that he would suffer a loss if he were compelled to surrender or forego or alter what he has done by reason of the first party being permitted to repudiate his conduct and to assert rights inconsistent with it.” 2 Pomeroy’s Equity Jurisprudence, § 805.
See, also, Ripley v. Seligman, supra.
The decree of the circuit court is reversed, and a decree will be entered in this court in favor of complainant, determining the rights of these parties in accordance with this opinion, and the cause will be remanded for an accounting between the parties as prayed in the bill of complaint, with costs of both courts to complainant.