Bank of Montreal v. J. E. Potts Salt & Lumber Co. ( 1892 )

McGrath, J.

In August, 1884, Robert Merrick entered into a contract with the J. E. Potts Salt & Lumber Company to manufacture salt at the company’s salt-block. The agreement provided that said Merrick should “furnish all barrels, nails, lime, butter, etc., and pay all needed repairs on said block, excepting the necessary galvanizing of pipes, as hereinafter mentioned; that he will deliver' said salt, piled in good workman-like manner on the dock, as contemplated in said contract; and that he will manufacture the quantity of salt contemplated in said contract for the said term of five years, as mentioned in said contract;” that the lumber company ■should pay to said Merrick “thirty-five cents per barrel for salt so manufactured and delivered, said payment to be paid monthly, and to be paid on the 20th of each month for the amount so manufactured and delivered during the next preceding month;” and that the said Merrick “will be responsible for the said salt until it ■shall be delivered to the boats or vessels from the said 'dock, danger of fire or other calamity excepted; and that he will count the said salt, and deliver it only upon the written order of the said party of the second part.” Merrick entered upon the work, and continued to manufacture until the fall of 1890.

In November, 1890, the lumber company gave a chattel mortgage upon all its personal property, including the salt in the salt block, upon the platform, and upon the docks. Within a few days thereafter the mortgagees filed a bill in the circuit court for the county of Wayne to foreclose said mortgage, and receivers were appointed, who proceeded to take possession of said property, and at the time of the filing of the petition herein had advertised the salt for sale. When the receivers were appointed there were several thousand barrels of the salt manufactured by Merrick in the block, on the platform, and on the docks, and the lumber company was indebted to him fin the sum of $11,970 on account of the manufacturing •of salt under said contract. Merrick, in May, 1891, filed :a petition in the said matter, setting forth that he had mot surrendered his possession of said salt, and had not 'delivered the same to any person, and praying that he might be decreed to have a lien upon said salt for the “balance due him. It appeared that petitioner had received .and discounted drafts upon said account, amounting to $6,350, which were unpaid, and the court gave him a lien for the amount of his account, less the amount of the drafts, and the receivers appeal.

Appellants contend that petitioner is not entitled to the relief prayed,—

1. Because under his contract he was bound to deliver the salt to the company before payment.

2. Because he had parted with possession.

Docks were erected and used exclusively in connection with this salt-block. Petitioner had charge of the block and these docks. While he was to deliver the salt upon the docks, the contract contemplated that it should remain there for some time afterwards, and by the terms of the contract petitioner was responsible for its custody and control, and it was not to be delivered to any one except upon the written order of the company. Petitioner simply delivered the salt from his own possession in the salt-block to his own custody upon the docks. The fact was that the most of the salt had not been placed upon the docks, but was still in the salt-block and upon the platform.

It cannot be claimed that Merrick had surrendered his possession to the mortgagees or to the receivers. The testimony disclosed interviews between the receivers and Merrick, at which the amount due the latter was agreed upon, and a proposition was made to Merrick that he release the salt, — permit it to be disposed of without prejudice to his rights. Merrick had not failed upon all occasions to assert his possession and lien.

As in Chadwick v. Broadwell, 27 Mich. 6, petitioner was entitled to monthly payments on all salt stored on the docks, irrespective of sales made or delivery to the boats; and there is nothing in the contract inconsistent with his right to require payment before the salt was delivered from said docks.

The contract does not bring the case within McMaster v. Merrick, 41 Mich. 505.

The decree below is affirmed, with costs to petitioner.

The other Justices concurred.