Sullivan v. Milliken

¶1Brokebs — Bight to Compensation — Sufficiency of Services.

¶2A declaration set out a writing by which defendant authorized plaintiff to sell for him certain timber lands and other property for a price stated, such authority to continue for 00 days. It alleged that, by defendant’s request, plaintiff prepared a written memorandum more specifically describing the property; that plaintiff procured within the 60 days the making of a written contract between defendant and a third person, which was set out, and by which defendant agreed to convey the property on terms therein stated, and the other party agreed to have the same examined within 00 days, and to purchase the same if it should appear from said examination that the statements contained in plaintiff’s memorandum were substantially correct; that, by reason of the premises, defendant became indebted to plaintiff for his services in the sum of *945100,000, for which Judgment was prayed. Held, that such declaration must be construed as one to recover commissions as a broker, and was demurrable as failing to state a cause of action, because, under the contract pleaded, plaintiff could recover only by proving (1) either that he had made an actual sale of the property, or (2) that within the time limited he had procured a purchaser able and willing to buy it on the terms stated, and that a sale was prevented by some act or default of defendant, neither of which facts was alleged.

¶3McCormick, Circuit Judge, dissenting in part

¶4In Error to the Circuit Court of the United States for the Northern District of Florida.

¶5This action was brought by William Alfred Milliken, a citizen of New York, against Martin H. Sullivan, a citizen of Florida. The case was first tried on a declaration containing 12 counts, and resulted in a verdict for the defendant, Sullivan. A new trial was granted by the circuit court, and the plaintiff amended his declaration by adding counts numbered 13 and 14. These counts differ but little, and counsel for the plaintiff (the defendant In error here) agrees that count No. 14 may be eliminated. The case was tried and is here considered as based on the thirteenth count, which will be referred to herein as constituting the declaration. It is as follows. Including the three exhibits:

¶6“The plaintiff sues the defendant, for that before the institution of this suit, to wit, on and before October 12, 1899, the defendant employed the plaintiff to sell the pine timber lands of the defendant in the state of Alabama, comprising about 250,000 acres, lying in the counties of Escambia, Conecuh, Monroe, and Baldwin, together with the railways and mills situated thereon, for the sum of one million five hundred thousand dollars, and defendant’s wharf in the city of Pensacola, Florida, for the sum of ona hundred thousand dollars, and, as evidence of the said employment, executed and delivered to the plaintiff on October 12, 1899, a written instrument, a copy of which is hereto attached, marked ‘Exhibit A,’ and made a part hereof; that, for the purpose of a fuller specification and description of the said property, the plaintiff, at the request of and for the defendant, prepared a written memorandum more fully describing the said property, a copy of which memorandum is hereto attached, marked ‘Exhibit B.’ That in pursuance of the said employment the plaintiff procured that the defendant and one W. D. Mann should and did on November 16, 1899, enter into a written contract by which the defendant agreed to convey the property mentioned in the written authority and memorandum hereinbefore set forth' as Exhibits A and B (which memorandum is the memorandum referred to in the said written contract) to a corporation to be organized by the said Mann as set forth in the said agreement, and the said Mann agreed to cause the said corporation to be organized, and to pay to the defendant for the said property five hundred thousand dollars in cash, one million dollars in the first mortgage bonds, and one hundred thousand dollars in the stock, of the said company, all of which is set forth in the said agreement which is hereby referred to, and, as Exhibit O, hereto attached and made a part hereof for greater particularity and exactness. Plaintiff avers that by reason of the premises he became entitled to demand and receive from the defendant and the defendant became obliged to pay to the plaintiff, for his services aforesaid, a large sum, to wit, the sum of one hundred thousand dollars, which sum, or any part thereof, the defendant has refused to pay to plaintiff, although often requested so to do, to the damage of plaintiff of one hundred thousand dollars, whereupon he sues.”

¶7Exhibit A.

¶8“New York, October 12th, 1899.

¶9“W. A. Milliken, Esq., N. Y. City. — Dear Sir: I hereby authorize and empower you to sell my pine timber lands in the state of Alabama, comprising about 250,000 acres, lying in the counties of Escambia, Conecuh, Monroe, and Baldwin, together with the railways and mills situated thereon, for the *95sum of $1,500,000; also my wharf in the city of Pensacola, Fla., for the sum of one hundred thousand dollars ($100,000). This authority to remain good for sixty days. I will made a deed in fee, with general warranty, to the purchaser. M. H. Sullivan.”

¶10Exhibit B.

¶11“Sullivan Timber Lands.

¶12“Martin IJ. Sullivan, of Pensacola, Fla., is the owner in fee of two hundred and fifty thousand acres of long leaf yellow pine timber land, in the state of Alabama, situated in the following counties:

¶13County of Escambia.................................... 156,000 acres

¶14County of Conecuh................................. 42,000 acres

¶15County of Monroe.................................. 40,000 acres

¶16County of Baldwin..................................... 12,000 acres

¶17Total .............................................. 250,000 acres

¶18“This land is in one body, beginning on the northern line of the state of Florida, in the county of Escambia, two and a half miles east of Flomaton Junction, on the Louisville & Nashville R. R. It runs north about 25 miles, into the county of Conecuh; thence west some 8 miles, into county of Monroe: thence south 6 miles; thence west 10 miles; thence south with the county line between Escambia and Baldwin to the Florida state line. Within this outline there are several one-quarter (14) and one-half {%) sections in the different townships which do not belong to Sullivan. The 32,-000 acres in Baldwin county fronts on the Alabama river below old Fort Montgomery, and runs back east to the Escambia county line, connecting with the main body at that point. The great body of this land lies on the head waters of Escambia river, in Escambia county. On the east side the L. & X. R. R. runs through it from Flomaton Junction north to Selma, Alabama. On the south the L. & X. R. R. runs through it from Montgomery, Ala., to Mobile. It is about 50 miles by rail from Sullivan Mill, on this land, to Mobile, and about 45 miles from Flomaton by rail to Pensacola, Fla. The map accompanying this statement shows the position of these lands as marked thereon. The lands are all above overflow, and the timber on every acre is perfectly accessible. The timber on the land is what is known as the ‘Long Leaf Yellow Pine’; the trees growing from 70 to 90 feet to the first limb, perfectly straight. The largest will square 12 inches, 70 to 80 feet from the butt. About 200,000 acres of this timber is practically virgin forest. The remaining 50,000 acres has been partially cut prior to 3892. Only the largest trees were cut then, leaving all under fifteen inches in diameter. These lands were carefully selected by Mr. Sullivan, who is a timber expert, having been engaged in the timber business about 40 years. His estimate is that the poorest lands will cut five thousand (5,000) feet, and the entire tract can safely be estimated at seven thousand (7,000) feet per aere; and Sullivan is not a man who will make an overestimate in this matter. On this land Mr. Sullivan lias built three railroads of standard gauge, as follows: One road running from Sullivan station, on the L. & N. R. R.» out eleven (31) miles through the forest io a former mill site; one from Wallace station, on the L. & X'. R. R., some ten (10) miles out into the forest: and another branch from this line, six (6) miles. These lines wore laid with 30-lb. rails, and were built to haul logs from the forest to the mills, and the timber from mills to L. & X. R. R., and thence to Mobile and to Pensacola. They were built in 1S90 and 1891, and used during that time, but have not been In use since. The rails are in good condition, but the road is not. There are two mills and one mill site on these lands, as follows: One known as ‘Wallace Mill,’ situated on the L. & N. R. R., near Wallace station in Escambia county. This is a fine steam mill, built in 1891, and with all modern improvements, and cost $125,000. It was run less than 1 year, and is in perfect order, and, with the purchase of a new band, could be put to work at once. It has a capacity of 100,000 feet of timber per diem. It has every facility for handling logs and timber, and the output of this mill can be delivered by rail 55 miles to Pensacola, Fla. Another, known as the ‘Pino Lor; Mill,’ is situated in Baldwin county, near the *96Alabama river. This Is a water mill of about 35 to 40 thousand feet capacity per diem. It is in moderately good condition. Its output can be shipped down the Alabama river to Mobile, about 75 miles. A mill site known as ‘Sullivan Mill’ Is situated in Escambia county, on the 11-mile branch road running from Sullivan station on the L. & N. R. R. Here is a magnificent boom, and every "facility for handling logs and timber. There was a water mall here in 1891-2. The output from a new mill built, at this point could he sent by rail to Mobile or to Pensacola. These improvements were put on this land by Mr. Sullivan in 1890-1, when he organized the Sullivan Timber Co., and with a view of carrying on the- timber business on an extensive scale. The price of timber declined in ’92 to such a point (being about $7.50 per thousand at Pensacola and Mobile) that he preferred to close up the business rather than cut his trees and sell timber at such rates. Since then the trees have been carefully preserved, and to-day the forest is intact. These lands were all high and dry, slightly undulating, good soil, and, where cultivated, produce excellent com and cotton, and all the fruits of that climate, of fine quality. Lands in these counties, when cleared of timber, sell readily at from $4.00 to $0.00 per acre for agricultural purposes. The climate of this section is delightful, being, of course, mild in winter; and the summer heat is tempered by the ocean winds from the south. The health of these counties is unusually good.

¶19“I consider the following figures as a safe, low estimate of the value of the timber on this land, and the value of the lands after the timber is cut:

¶20The poorest, 50,000 acres, at 5,000 ft................. 250,000,000 ft.

¶21The other, 200,000 acres, at 7,000 ft................... 1,400,000,000 ft.

¶22Making the total timber.......................... 1,650,000,000 ft.

¶23“There are excellent locations on these lands, where four (4) new steam mills can be erected, on these railroads, of a capacity of 100,000 feet to each per day. These four, together with the two now on hand (changing the water mill into a steam mill), would put out 600,000 feet per "day, or 15,600,000 feet per month of 26 working days, or 187,000,000 feet per annum. The present price of timber at Pensacola, Fla., and Mobile, Ala., is $16.50 per thousand. To cut these trees, haul them to the mills, saw into timber, load on cars, and deliver on wharf at Pensacola or Mobile, is less than $5.00 per thousand. These six mills can cut the entire timber from these lands in less than nine (9) years. But it cannot be expected that timber will remain at the present high figures more than a year or two. One can safely, however, count on timber continuing for many years at very remunerative figures. But for the next two years, by putting the 4 new mills in operation, the six mills can put out 187,000,000 feet per annum. This, delivered at Pensacola, will net certainly $10.00 per thousand, or $1,870,000 per annum. This shows the possibilities for the next two years at the present unusually high price for timber. It is proper to state here that the demand for timber at Pensacola and Mobile for foreign shipment is far beyond the output. Contracts can be made there with thoroughly reliable houses for timber for 6 to 8 months’ delivery at present rates. These four new mills, of the capacity required, can be built to-day for $59,000 each. It is not necessary to erect so expensive a mill as the one now at Wallace.

¶24“Turpentine. Another source of revenue from this timber, and one not to be overlooked, is turpentine. Contracts can be made with reliable parties to allow them to box these trees ahead of the cutters, so as not to injure them for timber, and from this source from $2.50 to $3.00 per acre can be obtained. None of this timber has ever been boxed. It is in the ‘forest primeval.’

¶25“Resale. If the purchaser of this land should desire to do so, this land can be sold off to great advantage in lots from 10,000 to 30,000 acres. Mr. Sullivan will not break his block up, hut prefers to sell It as a whole or not at all.

¶26“Stumpage. In this section of Alabama and Florida, stumpage is $2.00 per thousand. A purchaser of this land can sell as much stumpage as he cares *97to at $2.00. Mr. Sullivan considers it a waste to sell it at such figures, and will not do so.

¶27“These are the principal facts in connection with these lands.

¶28“The price of the lands, with everything on them, — mills, mill booms, and railroads, is $1,500,000. Of this $500,000 in cash, and $1,000,000 will be carried on bond and mortgage at four per cent, with a proper sinking fund to retire the bonds when due, running, say, ten years. This land is free from all incumbrances, and a deed in fee, with general warranty, will be given the purchaser by Mr. Sullivan.

¶29“Wharf at Pensacola, Fla.

¶30“In addition to this land, Mr. Sullivan owns a wharf at Pensacola, Fla., which is the principal wharf in the city. It comprises some seven acres, and is filled in with stone, and from eight to.ten ocean-going vessels can load from the dock at one time. A double-track railroad belonging to Mr. Sullivan runs on this wharf, connecting with the L. & N. R. R., so that cars from the J¡. & N. can run on the wharf to a ship’s side, and be unloaded from the car into the ship. There is also a large boom in connection with this wharf, into which timber can be unloaded to await arrival of vessels, and from there loaded into the ships. The price of this wharf is $100,000. It can be purchased in connection with the lands, or not, as the purchaser may desire. But together, these lands and wharf, with the mills in operation, make the most valuable property of this character in the Southern states. Sullivan’s timber lands are well known in the South by all timber merchants, and are regarded as the pick of that section.”

¶31Exhibit C.

¶32“New York, Nov. 16th, 1899.

¶33“Memorandum of agreement this day entered into by and between Martin H. Sullivan, of Pensacola, Fla., and W. D. Mann, of New York City, witnessed!: Martin H. Sullivan agrees to sell and convey by general warranty deed in fee, as hereinafter provided, his timber lands situated in the state of Alabama, in the counties of Escambia, Conecuh, Monroe, and Baldwin, comprising about two hundred and fifty thousand (250,000) acres, together with all mills, booms, and other fixtures now thereon; also railroads situated now on said lands in the county of Escambia; also the wharf property in the city of Pensacola, Fla., now known as ’Sullivan’s Wharf,’ — for the sum of one million six hundred thousand dollars ($1.(100,000), upon the following terms and conditions, to wit: The said W. JD. Mann is forthwith to select some one or more persons to go upon said lands and wharf and examine same, and make a report as to the amount of timber per acre on said lands, and value thereof; as to the number oí mills and booms on same, condition and value; as to the railroads on same, condition and value; and as to the wharf property in Pensacola, Fla., its condition and value; also as to any and all matters upon which the said Mann may desire information in regard to said property. Said examination and report is to be made within sixty (GO) days from this date. Upon the examination of said report, if it shall appear that the statements set forth in the written memorandum given to the said Mann as to said property are substantially correct, then the said W. D. Mann undertakes and agrees to cause to be organized, under the laws of the state of - — —, a corporation, to be known as the- Company, with an authorized capital stock of $-— (to he fully underwritten at par by bona fide solvent underwriters), and with power to issue bonds for one million dollars ($1,000,000), with interest at four per cent. (4%) per annum, payable semiannually, and due and payable ton (10) years after date, with a sinking fund of ten per cent. (10%) per annum, to be paid in redemption of said bonds, and to cause said company, when organized, to purchase from Martin H. Sullivan said lands, mills, booms, railroads, and wharf property for the sum of one million six hundred thousand dollars ($1,600,000), to be paid as follows: Five hundred thousand dollars ($500,-000) to be paid in cash, and one million dollars ($1,000,000) to be paid in the authorized bonds of said company, due and payable as above set forth, and fully secured by a first mortgage on all the lands, mills, railroads, wharfs, *98and. other property of said company, and one hundred thousand dollars ($100,000) to be paid in the shares of the capital stock of said company at par. The said Martin H. Sullivan agrees and contracts to convey by deed in fee, with general warranty, the said two hundred and fifty thousand (250,000) acres, more or less, of timber lands, together with the mills, booms, railroads, and all other fixtures now thereon, and the wharf in Pensacola, Florida, to the said company, and receive payment for same as above set forth. This agreement is to be fully executed within ninety (90) days from this date. Witness our hands and seals in this sixteenth day of November, 1899. M. H. Sullivan.

¶34“W. D. Mann.

¶35“Witness In presence of;

¶36“W. A. Milliken.

¶37“F. W. Weeks.”

¶38The defendant, Sullivan, demurred to the declaration, and as grounds of demurrer assigned the following: “(1) It is alleged in said count that the plaintiff was employed to sell the property of defendant, and it is not alleged that any sale was ever made. (2) It is alleged in said count that the plaintiff was employed to sell the property of defendant, and it is not alleged that any sale was ever consummated, or that it failed of consummation by the fault of the defendant. (3) It is alleged in said count that the plaintiff was employed to sell the property of defendant, and it is not alleged that any sale was ever made, but only that a contract was made for a sale; and it is not alleged that any sale resulted from said contract, or that the parties contracting to buy were able to do so,, or that the sale failed of consummation by reason of any fault of defendant. (4) It is alleged that the plaintiff was employed to make a sale, and it is only alleged that a contract of sale was made; but it is not alleged that any sale was made, or that it failed to be made on account of any fault of defendant. (5) It is not alleged that any sale was made within sixty days from October 12, 1899.” The circuit court overruled the demurrer. The case went to trial on pleas that were filed, and resulted in a verdict and judgment for the plaintiff, Milliken, for $77,890.70. The defendant, Sullivan, brings the case to this court on writ of error, and assigns that the circuit court erred in overruling the demurrer to the declaration. The view we take of the case makes it unnecessary to state and decide the many other exceptions and assignments of error contained in the record.

¶39Thomas H. Watts, H. Bisbee (John B. Jones, F. G. Caffey, and Alexander Troy, on the brief), for plaintiff in error.

¶40W. A. Blount, W. W. Howe (A. C. Blount, Jr., on the brief), for defendant in error.

¶41Before PARDEE, McCORMICK, and SHELBY, Circuit Judges.