Court Opinion

ID: 7942571
Source: CourtListenerOpinion
Date Created: 2022-09-08 23:16:35.462324+00
Date Added: 2024-06-11T16:33:47.244571
License: Public Domain

Moore', C. J.
(dissenting). I cannot reach the conclusion to which Justice Hooker has arrived. The case was heard in the court below by Judge Carpenter, now Justice Carpenter, who made so clear a statement of the questions involved that I quote from the written opinion he prepared in the case:
“ This is a continuation of a suit for an accounting reported in 126 Mich. 142 (85 N. W. 579). It is conceded that defendants are entitled to a decree against complainants, on the state of the accounts up to and including September 30, 1901, for $2,714.49, unless complainants are entitled to participate in the distribution of a fund of $44,-444.45, received by defendants under the following circumstances :
‘ ‘ Complainants and defendants, as representatives and heirs of Joseph B. Comstock, deceased, owned certain timber berths in the Province of Ontario. These berths stood in the name of Comstock Bros, (the name in which said complainants and said Joseph B. Comstock, prior to his death, in 1894, had carried on business as copartners). As the debts of said copartnership were only nominal, these berths were owned by the parties in proportion to their copartnership interests; that is, each of said complainants owned four-ninths, and defendants, as representatives and heirs of Joseph B. Comstock, owned one-ninth.
“On August 24, 1899, one Peter Ryan, a prominent timber dealer, residing at Toronto, Ontario, addressed a letter to Comstock Bros., Alpena, Mich., requesting their lowest price for said timber berths, stating:
‘“I can sell them, if you will give me two months to overlook them. Fires are now raging in your territory, and, though I am not sure that there is any on your berths, yet you must realize that settlers, hunters, Indians, and, worst of all, mining prospectors, are very apt to do quite a lot of mischief.’
“Receiving no answer, on September 1st Mr. Ryan wrote again, addressing his letter, as before, to Comstock Bros., stating:
*498“ ‘ May I ask you to let me have an answer to my letter of the 24th ? I am informed that townships of Foster and Nairn [two of the timber berths in question] have been on fire and much burned.’
“September 5, 1899, complainant Andrew W. Com-stock answered the letters of Peter Ryan, stating:
“ ‘ We are not anxious to sell our berths. The fires are not injuring them. We have a man on the ground watching them. That is our last report. We will sell the four berths for §500,000 net. If you wish to examine them, we will not sell to other parties while you are looking, or before November 1st. We will give no option to any one.’
‘ ‘ On receipt of this letter, Mr. Ryan dispatched men to examine the berths, and wrote the following letter:
“ ‘ 8th September, 1899.
"“Messrs. Comstock Brothers,
“ ‘Alpena, Mich.
“ ‘ Dear Sirs: Yours of the 5th inst. at hand. I beg to say that I am sending my men to examine the berths, and beg to express my appreciation of your ofEer, and hope to be able to close with you before the time mentioned in your letter.
“ ‘Yours truly,
“ ‘ Peter Ryan.’
“ Before this letter reached Alpena, complainant Andrew W. Comstock had left Alpena for Detroit, and the other complainant was in Toledo, Ohio, so that this letter was not received by complainants until after the interview next below mentioned had occurred between them and Peter Ryan. On the 11th of September said Ryan met said complainant Andrew W. Comstock in Detroit, for the purpose of securing a formal option in accordance with the correspondence above referred to. Said Andrew W. Com-stock would not give said option until his brother, William B. Comstock, who was then in Toledo, Ohio, should give his assent to the arrangement. To secure this assent, said Ryan and Andrew W. Comstock visited Toledo on September 12th, and had an interview with said William B. Comstock, who approved the proposed arrangement. Either on the 11th of September or the 13th, — just which time it seems to me to be unimportant, — said Andrew W. Comstock informed said Ryan that he could not sign the proposed option until the defendants should yield their assent. This was the first information that said Ryan *499liad that the defendants had any interest in the timber berths in question. On said September 13th a formal op-. tion was prepared by the solicitor for complainants, whereby said Ryan was to have the right to purchase said timber berths on or before November 1, 1899, for the sum of $500,000. He was to advance $10,000, which was to become forfeited in case the berths were not paid for as agreed. It was arranged that said Ryan should leave his •check of $10,000 either with Mr. Comstock or his solicitor, which was to be used by Mr. Comstock in the event of his signing said option, and not otherwise, and that his signing said option depended upon the assent of defendants to the proposed arrangement.
“ On said 13th day of September, 1899, both Mr. Ryan and the complainant A. W. Comstock communicated by telephone with Mr. Hall, of the firm of McDonell & Hall, of Bay City, representatives of the defendants. This was the first intimation that any one representing the defendants had of the proposed sale. Mr. Hall declined to assent to the sale, on the ground that he believed the property to be of much greater value than $500,000. When he was assured that reports had come that the timber was damaged or threatened by fire, he stated his desire to examine said reports. Accordingly it was arranged that on the following Saturday, September 16th, he should meet said complainant Andrew W. Comstock at his office in Alpena, and examine said reports. In accordance with this arrangement, both Mr. Hall and his partner, Mr. McDonell,' and their client, Mrs. M. Louise Comstock, had an interview with said Andrew W. Comstock at his office in Alpena. Together they examined the letters indicating that the timber had been damaged or was then threatened by fire. Defendants were not satisfied that it was for their interest to have the sale proceed. They stated to complainant Andrew W. Comstock that, according to his testimony given the previous December, said timber was worth $1,350,000, and according to the appraisal of his brother, and his own report as administrator of the estate of Joseph B. Comstock, deceased, the interest of said estate in said timber was worth $127,000. Mr. Hall, speaking for his clients, tried to induce complainant Andrew W. Comstock, at the expense of all parties interested, out of the funds of the partnership remaining in his hands, to have an investigation made to ascertain the then worth of said timber. Mr. Comstock declined to do this, and Mr. Hall then said, *500‘ Mr. Comstock, that means that Mrs. Comstock has got to adopt her own course to protect her interest in this property;’ to which complainant Andrew W. Comstock replied, ‘ That is right.’ It was finally concluded that complainants would advance to Mrs. M. Louise Comstock, widow of Joseph, the sum of $500, to be charged to her account, for the purpose of making an investigation (though this advance, owing to the circumstances hereafter stated, was not made), and a telegram was sent to Mr. Ryan, at Toronto, stating that, until this investigation was made, the estate represented by defendants would decline to yield its assent to the proposed arrangement.
‘ ‘ On Sunday, September 17th, said Peter Ryan, who in the meantime had received the telegram last above referred to, called on Mr. Hall at his office in Bay City, and represented to him that he had a valid and. binding contract with Comstock Bros. Mr. Hall threatened to obtain an injunction preventing the carrying out of this contract. Mr. Ryan indicated his great anxiety to have the contract promptly and faithfully executed, and asked Mr. Hall to name a figure which would induce his clients to yield their assent to the proposed arrangement. In response to this suggestion, Mr. Hall, assuming the value to be $900,000, and a one-ninth interest in said timber to be worth $100,-000, agreed, if Mr. Ryan would give $ái,iáL45, in addition to what they would receive as their one-ninth of the $500,000, to advise his clients to consent to the option being executed in accordance with the arrangement already made. To this proposition Mr. Ryan finally gave his assent, and on the following morning, in the city of Detroit, a writing embodying this agreement was executed. Very shortly thereafter Mr. Ryan and Mr. Hall met complainant Andrew W. Comstock, and Mr. Hall informed him that the defendants yielded their assent to the proposed arrangement, and subsequently on the same day the option prepared on the 13th of September was executed by Andrew W. Comstock in the name of Comstock Bros., and delivered to Mr. Ryan, and the $10,000 check was cashed. Subsequently said Ryan sold said berths for $937,000, and on or about November 1, 1899, carried out his contract, both with complainants and defendants. Nearly all of the berths were sold by said Ryan before November 1, 1899.
“The question — and it is a question of law — is whether or not complainants are entitled to eight-ninths of the *501$44,444.45. If the complainants had been informed, before they executed the option on the 18th of September, that the defendants were receiving this amount in addition to the one-ninth, and after such information had proceeded to execute the contract, no one could possibly contend that they had a right to participate in the fund in controversy. Their claim hinges, then, upon the neglect of defendants to disclose the receipt of this sum in addition to the interest in the $500,000. Was there any obligation on the part of the defendants to make that disclosure to complainants? It is earnestly insisted by the learned counsel for com-: plainants that the relation existing between complainants and defendants was one of trust and confidence. Cases are cited holding that such a relation exists, not only between copartners, but between the representatives of deceased partners and the former partners of their intestate. I have no doubt that such a trust relation often does exist. If the representative of a deceased partner undertakes to deal with the assets of the partnership, respecting such an undertaking he occupies a relation of trust toward every one having an interest in said assets. The authorities cited in the brief of complainants’ counsel relate, as I understand them, to such situations, and not to a case like that under consideration. Here defendants did not undertake to deal with any asset of the copartnership, nor with any interest in which complainants were-concerned. They simply undertook, in their dealing with Ryan, to dispose of their interest — that is, the interest of the estate of Joseph B. Comstock, deceased — in the asset in question, an-d in truth they did not receive for that interest any more than it was reasonably worth, as shown by the amount realized by Ryan. Defendants, so far as complainants were concerned, had a right to sell their interest in that asset for any price which they could get.
“Was there any obligation on the part of defendants to say to complainant Andrew W. Comstock, ‘ We are receiving from Ryan $44,444.45 in addition to one-ninth of this $500,000?’ Was Andrew W. Comstock in any position to say, ‘ I have been misled by your silence ?’ It seems to me obviously not. Complainants had fixed the value of this property at $500,000 for the purpose of making the deal with Ryan. In fixing this value they had not consulted defendants. They had consulted their own opinion and their own interests. They had promised Ryan that he should have the land at that figure if the de*502fendants would assent. I am not sure that their letter of September 5th would not have legally obligated them to carry out that agreement. But, whether or not there was a legal obligation, there was the strongest kind of a moral obligation on their part to perform their agreement and to sign the option. It would not have been good faith on their part for them to have said to Ryan, ‘ Because you have paid defendants $44,444.45 more than their one-ninth of $500,000, you must also pay us eight times this amount, or we will not do as we have agreed.’ Complainants, therefore, cannot truthfully say that they have been misled by the silence of defendants, because they have done only what they were bound to do by every principle of morals.
“ This is not a case wherein it can be urged that it was the duty of the defendants to make complainants acquainted with facts of which they were ignorant. This is not a case where silence was fraudulent. There was no trust relation which made it the duty of the defendants to speak. Complainants suffered no injury, because they did nothing but pursue a course which, in honor, they were bound to pursue.
“It results, therefore, that complainants, in my judgment, are not entitled to participate in the distribution of the fund in question, and that a decree should be entered in favor of defendants against complainants for $2,114.49.”'
I can add but little to what was said by Judge Carpenter. The case, briefly stated, is that Comstock Bros, were the owners of certain timber limits in Canada. After the death of one of the brothers, whose interest is now represented by the defendants, the complainants, who are the surviving partners of the firm, and who in the main had managed its affairs, and were very capable business men, thought it best to sell the timber limits, and offered them to Mr. Ryan for $500,000. It is clear the complainants thought that was all the limits were worth, and were willing to sell for that price, and to take eight-ninths thereof as compensation for the eight-ninths interest which they had in the lands. The widow of the deceased partner thought the lands were more valuable, and was not willing to have the lands sold unless she and her children, who sue*503ceeded to the rights of her deceased husband, obtained more than one-ninth of $500,000 for their interest. The record is barren of any testimony indicating that complainants were influenced in any way by any act of the defendants in fixing a price upon the lands at the time they gave the option to Mr. Ryan. By the arrangement entered into by the defendants with Mr. Ryan, the amount which was to be received by complainants was not diminished in the least. The Complainants put one price upon the limits. The defendants and Mr. Ryan thought they were worth more. . An arrangement was made which was satisfactory to the defendants and Mr. Ryan, by which the latter was. able to carry out to the letter his agreement with the complainants. I cannot understand how the arrangement entered into by defendants with Mr. Ryan was wrong either in law or morals. Especially I cannot consent to the proposition that defendants, who declined to part with their interest in the limits for less than $100,000, and who received that amount for it, shall be compelled by a decree of this court to have upwards of $39,000 taken from the amount paid them and given to the complainants, when complainants have already received every dollar of value they placed upon their interest in the limits, and all they were to receive under their contract. To do so compels the widow and children to take for their interest what they were not willing’ to take, and gives to complainants nearly $40,000 more than they themselves asked for their interest.
I think the decree entered by the trial court was right, and should be affirmed.
Carpenter, J., did not sit.