NORTH, J.
Primarily plaintiff's suit is for specific performance of an alleged conditional agreement of defendant to transfer to plaintiff a business conducted by defendant under the name of "The Casket Hardware Manufacturing Company," and for an accounting. Defendant's answer denied the material allegations of the bill of complaint, and by his cross bill defendant seeks an accounting by plaintiff and cross-defendant, and that he "may be ordered to give up, surrender and return to your cross-plaintiff the management of the Casket Hardware Manufacturing Company, and all moneys improperly withdrawn from the funds belonging to said company." In plaintiff's testimony he placed a value of $200,000 upon the company's property (including certain intangibles) at the time this suit was commenced; but defendant testified to a value of $100,000. The trial court did not grant the relief sought by either litigant, but instead the trial court decreed:
"That the plaintiff and defendant herein, are, and have been since the year 1930, partners in the business of The Casket Hardware Manufacturing Company, and that each partner owns and has owned an undivided 1/2 interest in the said business of The Casket Hardware Manufacturing Company since said date."
Defendant appealed and plaintiff perfected a cross appeal. It is our understanding that neither of these parties litigant contend that the trial court was justified in decreeing a partnership between
This being an equity proceeding we hear the case de novo; and insofar as relief is sought by plaintiff the burden of proof is upon him.
"Plaintiff seeking specific performance of the contract has the burden of proving all the elements to establish a contract." Dodge v. Blood, supra.
"In order that courts may specifically enforce an oral agreement to convey property, plaintiff must establish by clear, satisfactory and convincing proof the terms of such agreement." Steketee v. Steketee, 317 Mich. 100, 105.
The facts involved are rather intricate, quite numerous, and somewhat obscure because they cover a period from 1920 to the filing of the bill of complaint herein, December 9, 1946. And further, there is conflict of testimony as to essential facts in the case. However the material background of the litigation may be sufficiently summarized as follows.
In 1920, plaintiff, then a high-school graduate at the age of 17 or 18 years, entered the employment of his father, the defendant, who was engaged in manufacturing and selling mental trimmings for caskets, under the firm name of "The Casket Hardware
"It is hereby agreed between W.T. Fisk and his son D.C. Fisk that the son D.C. Fisk, is to have unhampered management of The Casket Hardware Manufacturing Company during the period of May 1 to December 31, 1930.
"It is agreed that at the end of this period, if a cost accountant can show any indication of the son. D.C. Fisk, having run The Casket Hardware business at a loss, the said D.C. Fisk agrees to step down and out and turn the business back to W.T. Fisk.
"W.T. Fisk agrees that if at the end of this period a cost accountant can not show any loss or depreciation of business, he will sign the bill of sale that was agreed upon and written up by our attorney. Leslie Young.
"W.T. Fisk agrees to leave the entire management of the aforesaid Casket Hardware business completely and entirely in the hands of the son, D.C. Fisk.
The outcome of this suit turns upon whether plaintiff is entitled to specific performance of exhibit 6. While defendant admits that his signature appears on exhibit 6, he testified in effect that he did not knowingly place his signature thereon and that he never saw exhibit 6 prior to the time this case was in court, although shortly prior thereto its contents were read to him; evidently with plaintiff's approval, over the telephone by a Mr. William F. Schuett, who
Our review of the record brings the conclusion that, without so deciding, we may for the purpose of decision herein assume that defendant did knowingly execute exhibit 6. But there remains a controlling question — i.e.: Was there compliance with the condition embodied in exhibit 6 that during the specified period the business would be operated by plaintiff without a loss, otherwise he agreed "to step down and out and turn the business back to W.T. Fisk?"
Notwithstanding plaintiff's contention to the contrary, the burden of proof to justify granting specific performance to plaintiff is on him to prove compliance with the noted condition. Plaintiff did attempt to establish from the company's records such compliance by his own testimony and that of 2 accountants. They testified that for the last 8 months of the year 1930 the books of The Casket Hardware Manufacturing Company disclosed a profit. The accountants testified there was a profit of $1,149.15. But to the contrary defendant also produced 2 accountants who pointed out a claimed error in the accounting in behalf of plaintiff, and testified that for the year 1930 the business suffered a loss of $1,849.46. As a result of our review of this record we are in accord with the conclusion of the trial judge, who, in his opinion, said:
In addition to the foregoing, it must be noted, and is quite persuasive, that at the close of business for the year 1930, according to defendant's testimony, plaintiff made no claim that he had complied with the condition of exhibit 6 and therefore was entitled to a transfer of the business to him. At that time no accounting of the company's business for the designated period was made in behalf of either of these parties. To all intents and purposes plaintiff continued as before in the capacity of a salaries employee. He was regularly paid weekly wages. It was not until shortly before this suit was commenced in December, 1946, and under circumstances hereinafter noted, that plaintiff made known to defendant that the former claimed to be the sole owner of the business. During the intervening years, at least until 1942, when because of ill health defendant became inactive, the business was managed jointly by the father and son. In that particular they were ably assisted by William F. Schuett, who since 1927 had been in charge of the production phase of the business. We note some of the incidents which occurred between plaintiff and defendant subsequent to 1930 which are quite inconsistent with plaintiff's claim of sole ownership or the right thereto.
The business during the subsequent 15 or 16 years continued under the same name as prior to 1930. Defendant as well as plaintiff signed checks on the bank account carried by the company. Plaintiff testified: "My father always received the original bank statements and the cancelled checks until the lawsuit started." On various occasions after 1930, plaintiff sought defendant's approval for a raise in plaintiff's
"In 1943, when we had $39,000 in the bank, I felt it was time my father and I talked about what the business was going to do for us and I asked him at that time to unfreeze my salary, literally speaking, by making me a partner in the business, which would make me an employer instead of an employee."
As just above noted, defendant promptly refused plaintiff's 1943 request to be made a partner. After defendant, in 1942, became too ill to go to the office as formerly, according to plaintiff's undisputed testimony: "The mail did not come to the factory; it went to my father's home, and then had to be picked up the following day by the foreman, so that as far as managing the business was concerned, I was not doing so." In 1939, when the father and son were co-operating in securing a RFC loan, the application therefor made no disclosure of a claimed interest in the business on the part of plaintiff. Instead, the loan was consummated on the representation and assumption that defendant was the sole owner of the business. In 1943, shortly after defendant's refusal to take plaintiff into partnership, plaintiff wrote his father a letter in which he said: "According to your proposition you evidently are not satisfied and wish to run the business yourself. That is all right with me." In explanation of the above, plaintiff testified: "I meant that if he was not satisfied with the way I was operating the business that
While there are other phases of the record of the same purport, we think the conclusion is quite irresistible that for years after April, 1930, at which time plaintiff claims his father signed exhibit 6 of which specific performance is sought, the parties themselves understood and, at least by the course of conduct pursued by each, considered that plaintiff's only status in relation to the business of The Casket Hardware Manufacturing Company was that of an employee. This was entirely inconsistent with any thought or assumption that plaintiff was the sole owner of the business or was entitled to have it transferred to him.
In reaching the above conclusion we are mindful of plaintiff's claim that he allowed matters between him and his father to drift along without any attempt on the part of plaintiff to enforce his alleged right because, from time to time through the years subsequent to 1930, defendant had assured plaintiff that the business was his or would ultimately be his. This claim of such assurances on the part of the father was specifically denied in his testimony. Throughout all the years subsequent to 1930 plaintiff received for his services regular weekly pay, varying in amounts from $60 per week in 1930 to $150 per week in 1946, and $250 per week beginning shortly before this suit was instituted and the business placed in charge of receivers.
The final break between plaintiff and defendant, which resulted in this lawsuit, came about from the following circumstances. In September, 1946, defendant received a check in the amount of $8,450 for a refund of payment incident to his 1945 income tax. The check was payable to defendant and his wife. Plaintiff demanded that the check should be indorsed by the payees so that the proceeds, as plaintiff
Under the conflicting testimony in this case we are unable, as was the trial judge, to find that plaintiff fulfilled or complied with the terms of exhibit 6, and therefore the relief sought in his bill of complaint must be denied.
Another sound reason for reaching the result just above indicated may be noted as follows: In 1938, The Casket Hardware Manufacturing Company had pressing need of funds to satisfy unpaid taxes, creditors, and to finance a prospective change in the company's future business. A loan was solicited from the company's bank, but was refused. Thereupon
"The business experienced the general difficulties of the depression, was heavily in debt, and in 1938 the business commenced to manufacture and sell bathroom fixtures, but before doing so William T. Fisk and his wife, Grace L. Fisk, sought and obtained a $12,000 loan from the Reconstruction Finance Corporation upon collateral owned by William T. and Grace L. Fisk, including real estate valued at $45,000, assignment of rentals of a five-year lease of buildings owned by William T. and Grace L. Fisk of $150 per month, business and machinery valued at $25,000, home of William T. and Grace L. Fisk valued at $6,000. * * * The Reconstruction Finance Corporation loan was repaid by the business."
The above hazard taken by defendant tided the company over its then financial straits and doubtless saved from complete failure the business of the company which was then, as theretofore and thereafter, being carried on as belonging to defendant. In our judgment it would be highly inequitable after such a change in the circumstances resulting from the above course of conduct of defendant, and after the company became prosperous in the subsequent 7 or 8 years, instead of one bordering on insolvency, to grant specific performance to plaintiff and thus permit him to reap the benefit of defendant's successful efforts above noted. Especially is this so since, if plaintiff was ever entitled to specific performance, it accrued to him as early as 1931, at a time when the
One who seeks specific performance must do so with such reasonable promptness as the circumstances of the case require. Van Buren v. Stocking, 86 Mich. 246. Specific performance is, in a large measure, a discretionary, equitable remedy — a matter of grace, not of absolute right. Colonial Theatrical Enterprises v. Sage, 255 Mich. 160, 172; Walters v. Durbin, 276 Mich. 580; Higbie v. Chase, 306 Mich. 577. Specific performance will or will not be decreed by a court of equity depending on whether or not equity will be accomplished under the peculiar circumstances of the particular case. Snider v. Schaffer, 276 Mich. 92.
As also bearing somewhat upon the equities of this controversy, it may be noted that in his relations with his father and the business of The Casket Hardware Manufacturing Company plaintiff has benefited. From 1930 to the time this suit was instituted (December 9, 1946) his payments for services to the company and gifts to him by his father totaled approximately $69,536.
Plaintiff's bill of complaint is dismissed and the relief therein prayed denied. Defendant may have relief as a cross-plaintiff. He is entitled to have the business of The Casket Hardware Manufacturing Company, its management and control, restored to him. As to an accounting by plaintiff to defendant, except such as will be had incident to terminating the receivership, we conclude that substantial equity will be done by decreeing that plaintiff shall account to defendant only as to the $8,450 of the company's funds which plaintiff appropriated in 1946, and interest at 5 per cent, per annum thereon from the date of the appropriation.
A decree may be taken accordingly in this Court, but subject thereto the case will be remanded to the
BOYLES, C.J., and REID, DETHMERS, BUTZEL, CARR, and SHARPE, JJ., concurred. BUSHNELL, J., did not sit.
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