Merchant v. Smith-Powers Logging Co.

JOHNS, J. 1-3. The record is voluminous and exhaustive briefs were presented. Counsel for plaintiffs made an able and ingenious argument and their legal principles are sound, but they áre not supported by the facts. Under our view, the láw of this case is well stated in 30 Cyc., page 428, where it is said: “Where title to real property, acquired by or for a partnership, is taken in the name of one of the partners, there is a resulting trust in fav<j)r of the partnership, which may be established by parol evidence, so that the land may be charged with the interest of the partnership. * •* [447] “Whether real estate purchased with partnership funds was purchased as partnership or individual property depends upon the intention of the parties as manifested by all the surrounding circumstances and the use to be made of it. Where real estate is bought with partnership funds for partnership purposes and is appropriated to partnership uses, or entered and carried in the assets of the firm as partnership assets, equity regards'it as partnership property without regard to the name in which the legal title is taken, but the legal title is left undisturbed, except so far as may be necessary to protect the equitable rights of the respective parties.” (Authorities.) In 1873 E. B. Dean and David Wilcox, as partners under the firm name of E. B. Dean & Company, sold an undivided one-eighth interest in the firm’s business to Charles H. Merchant, who became the active manager of the firm and continued as such until 1892. In 1882, to promote an increase in business, he conceived the idea of erecting a log boom at the mouth of Coos Biver, for the purpose of receiving, holding and distributing logs to the different sawmills on Coos Bay, and to that end the firm took a twenty-five year lease of what was known as the Holland tract, consisting of 17.39 acres at the mouth of Coos Biver, and he applied to the State of Oregon to purchase another tract of 21.62 acres lying above and adjoining the Holland tract. The application was made in his name and the subsequent deed was issued to him by the state on August 21, 1883. It appears from entries in the firm books made on that identical date that the purchase was made with the firm’s money. After obtaining the lease and the deed from the state, the firm entered into a tentative agreement with Bemitt, Calahan, Wulff and Young, who were then engaged in rafting logs to the mills on Coos Bay, in [448] and by which a boom was to be constructed over the lands which were leased and acquired from the state. The raftsmen were required to operate the boom and to look after the rafting, catching and holding of logs and the distribution thereof to, in and through the boom, for which they were to make a charge of twenty-five cents per thousand feet, which was to be divided equally between them and the firm;" of E. B. Dean & Company. In due time the boom wks constructed and while many changes were made in the personnel of the raftsmen, it was jointly operated by them and E. B. Dean & Company until 1903 or 1904, when it was taken over by the Dean Lumber Company, later acquired by Charles A. Smith and thereafter by the defendant. During the time the boom was jointly operated, yearly repairs were made thereon and charged to the boom account upon the books of the firm, where a record was kept of the receipts and expenses, and based thereon settlements were made from time to time between the firm and the raftsmen. On October 31,1892-, Charles H. Merchant and Mary L. Merchant, his wife, in consideration of $10 executed to E. B. Dean their certain deed of conveyance by which they did “grant, bargain and sell, convey and confirm unto the said party of th^ second part and to his heirs and assigns forever, all1 those certain lots, pieces or parcels of land situate, lying and being in the County of Coos, State of Oregon,” and among other lands therein described the following: “The tide land in Sec. 24, Township 25 South, Bange 13 West Willamette Meridian. The tide land in Sec. 19, Township 25 South, Bange 12 West Willamette Meridian. The tide land fronting lot 1 of Sec. 9, Township 28 South, Bange 14 j West Willamette Meridian. Particular reference is hereby made for a fuller description of said tide lands to the deeds from [449] the State of Oregon therefor as on record in the office of the Recorder of the County of Coos, State of Oregon.” It appears from the plat which was introduced in evidence that the 21.62 acre tract purchased from the State of Oregon in 1883 lies in both sections 19 and 24, in township 25 south of range 13 west of Willamette Meridian. It also appears from the record that at the time of the execution of the deed by Merchant to Dean neither of them owned or claimed to own any other tide-lands in section 19. After the execution of this deed E. B. Dean & Company and the raftsmen continued to use the 21.62 acre tract for booming purposes in the same manner that it was formerly used. This and the Holland tract are tide-lands and at high tide are overflowed with water. None of it was under fence, but a large portion of it was surrounded with piling and apparently it was all encircled by the boom. When the tide was out, on some portions of the land the logs rested on the mud flats, and when the tide came in, they floated on the top of the water which covered the land. It is shown by the record that after Merchant executed his deed to Dean and retired, the firm became involved in financial difficulties and upon an order of the Circuit Court of Coos County he was appointed receiver of the firm on November 18, 1896; that after he was appointed, together with the raftsmen, and as such receiver, he continued to use and operate the boom in the same manner that it was formerly worked. 4. Based upon a careful examination of the record, we hold that when Charles H. Merchant purchased the 21.62 acre tract from the State of Oregon, it was bought for the use and benefit of E. B. Dean & Company; that the purchase price was paid with the [450] money of the firm; tliat Merchant took and field tfie record title as trustee and in trust for tfie benefit of tfie firm and that by his deed to Dean on October 31, 1892, fie intended to convey all of fiis right, title and interest in tfie lands which fie had acquired from tfie state. "We further hold that, coupled with fiis subsequent acts and tfie surrounding facts, tfie description contained in tfie deed was sufficient to convey a good title and that it did convey to Dean all of tfie right, title and interest which Merchant then had in or to tfie 21.62 acre tract. Tfie decree of tfie Circuit Court is affirmed. Affirmed. Rehearing Denied. McBride, C. J., and Bean and Bennett, JJ., concur.