Edwards v. Zuck ( 1912 )

Bird, J.

The bill in this case was filed to compel an accounting and a dissolution of copartnership dealings between complainant and defendant. The complainant was successful at the hearing, and defendant has appealed.

The complainant and defendant were farmers and neighbors in Missaukee county in 1908, and in September of that year complainant alleges that he and defendant entered into a copartnership agreement to purchase a certain 120 acres of land in that county, which will be hereinafter referred to as “the 80” and “the 40.” For convenience the title to the 80 was taken in the name of defendant, and the title to the 40 was taken in the name of complainant. It is further alleged that the agreement provided that the lands were to be lumbered, and the profits arising therefrom, as well as the profits arising from the sale of the lands, should be equally divided between them. The 40 had been sold for delinquent taxes and bid in by the State. This fact was known to both of them, and they agreed that they would pay the taxes, but they neglected to do so until after they had cut and removed quite a large amount of timber. When complainant heard that the State trespass agent was investigating the cutting of the timber, he paid the delinquent taxes, which amounted to $108.87. Subsequently the trespass agent made a demand upon him for the value of the timber taken prior to the payment of the taxes, and this was finally settled by complainant paying to the State $119. The defendant denies that there was any copartnership agreement between them respecting these lands. He insists that he was absolute owner of the' 80, and complainant was the owner of the 40, and that they lumbered them together under a joint arrangement which fell far short of being a partnership agreement. He denies any knowledge of the delinquent taxes against the 40, and says that he was not aware that any trespass was being committed in cutting the timber from it. It is further contended by defendant that if they were guilty of a trespass, and complainant afterwards adjusted it, he is not entitled to contribution from him because the law will allow no contribution as between joint wrongdoers.

After hearing the parties and their witnesses, the trial court found that there was a copartnership agreement; that neither the title to the 80 nor the profits arising from the sale thereof were assets of the copartnership; and that there was due to complainant the sum of $131.75 on an accounting between them respecting the copartnership matters. It was further found that defendant was entitled to a conveyance of an undivided one-half interest in the 40 and complainant was ordered to convey the same. It was also provided that this interest should be sold to satisfy the amount due complainant in the event that defendant made default in its payment.

We are of the opinion that the trial court was fully justified in finding that the parties were partners. Under their agreement each owned an undivided interest in the 40 and they were jointly interested in the timber on both parcels when severed. Each contributed time, labor, and money in carrying on the lumbering operations, and they divided equally their profits and losses. Each acted for the other in the employment and payment of labor and the sale of their product. Complainant testifies that they expressly agreed to become partners in the deal.

“ The test of partnership must be found in the intent of the parties themselves.” Beecher v. Bush, 45 Mich. 202 (7 N. W. 785, 40 Am. Rep. 465).

It is suggested that, as this copartnership agreement was oral and dealt with the sale of lands, it is, therefore, void as being within the statute of frauds, under the rule laid down in Nester v. Sullivan, 147 Mich. 493 (111 N. W. 85, 1033, 9 L. R. A. [N. S.] 1106). The holding of the trial court in this case is not an infringement of the rule laid down in that case, for the reason that the complainant is the owner of the title and the person for whose protection the statute exists, and he insists that defendant has paid for, and is entitled to, an undivided one-half interest in the 40 acres. Such a case is not within the statute of frauds. Spalding v. Archibald, 52 Mich. 365 (17 N. W. 940, 50 Am. Rep. 253).

In his accounting of the partnership dealings, the trial court charged defendant with one-half of the amount paid by complainant to the State in settlement of the trespass. The defendant argues that this was improper, for the reason that the law does not enforce contribution between joint wrongdoers, that complainant had no title to the land, and therefore must have known that he was committing a trespass when he cut the timber. The complainant, on the other hand, protests that he cut the timber in good faith, believing he could -pay the delinquent taxes after, as well as before, cutting the timber, and that, when he learned otherwise, he settled with the trespass agent. It is the view of my associates that as the amount paid the trespass agent was on account of a partnership matter, and the partnership fund was augmented by the fruits of the trespass, it will now be regarded as having been paid by complainant out of partnership funds.

We are of the opinion that the trial court reached the right conclusion in the case, and the decree will be affirmed, with costs of both courts to complainant.

Moore, C. J., and McAlvay, Brooke, and Ostrander, JJ., concurred.