ing the many years said river had been used for running logs. On the 23d of June, 1905, the Navigation Company, as party of the first part, entered into an agreement with the defendant and practically all of the lumbermen operating on Lake Manistee, and A. E. Cartier, containing, among other agreements, the following:

"That the said party of the first part, in consideration of the covenants on the part of the parties of the second part hereinafter contained, doth covenant and agree to and with the said second parties that it will raise, bank, drive, sort, and deliver to the respective mills of said second parties situated upon Lake Manistee, in said county and State, all of their deadhead and sunken logs lying and being in the Manistee river and its tributaries, and on or in the bayous, flats, cut offs, and marshes adjacent thereto, and that each year after 1905 said first party will make at least one drive or delivery of all floatable logs to said second parties. And the said parties of the second part, for and in consideration of the aforesaid covenants on the part of the party of the first part, doth covenant and agree to and with said first party to pay it the sum of six dollars ($6) per thousand feet for all their hemlock logs known as deadhead and sunken logs, and the sum of seven dollars and a half ($7.50) per thousand feet for all other logs. Payments to be made as follows: An advance of fifty per cent. (50%) of contract prices to be paid on the 10th day of each month on all logs raised, banked, and skidded during the preceding month. This amount to be considered as an advance under this contract, and not as a payment on any particular lot of logs. On the 10th day of each month, payment to be made for all logs delivered to the respective mills of said parties of the second part during the preceding month, less any amount that may be due said second parties by reason of the advance money above mentioned.'

"It was also agreed that the log owners should furnish their respective stamp and bark marks for the identification of their respective logs, and that the Navigation Company should stamp its own identification mark upon the logs lifted by it. The mark 'Nav' was adopted as such mark. The agreement contained the following clauses as to unidentified logs:

"It is further mutually understood and agreed between the parties hereto that all unidentified and unmarked logs raised by said first party shall be stamped with a large () on both ends of logs, and bark-marked with large (—) in middle of logs, and that every thirty days a complete list of the unknown and unidentified logs as above specified shall be rendered to the party of the second

part, and every thirty days the party of the first part shall advertise and sell the same as provided by statute, said second parties paying all costs and charges incident thereto. Said first party is to turn over to a representative hereafter designated by said second parties, the amount or sum received for said logs thus sold, which sum or price shall not be less than the contract price for raising the same, including the costs and charges for selling them. In the event of any of the parties of the second part to this contract purchasing or bidding in the logs advertised and sold as aforesaid, then said first party is to deliver all such logs to the said representative, or at such mill or mills as he shall designate; and said first party shall receive from said second parties the price therefor as heretofore set forth in this contract. It is mutually understood and agreed that said second parties are to hold the party of the first part harmless and to indemnify it fully against all loss and damages of every name and nature for all logs sold by them as aforesaid.'

"There was also a provision that

All logs scaled under this contract shall be scaled by scalers mutually agreeable to the parties hereto; said scalers to make in all cases a fair and equitable scale, and according to "Doyle's rule,” and all logs delivered to said second parties' mills are to be scaled by scalers employed by the Manistee Boom Company; it being understood and agreed that, in the absence of said Boom Company scalers, then the same are to be scaled by scalers mutually agreed upon between the parties hereto, all logs scaled at mills to be done without expense to said first party. The scalers employed to scale the logs when taken out of the waters, flats, or bayous of said stream and its tributaries are to be paid one-half by each of the parties hereto, said first party to board said scalers without cost or charges to said second parties.'

"On August 28, 1905, at a meeting of the parties to the contract, the fishhook mark' was adopted as the mark for the unidentified logs, Mr. J. O. Nessen was chosen as the representative of the log owners in handling the unidentified logs, and Mr. Noud was given 'authority on behalf of the log owners to select scalers as provided in the

contract.'

"On the 21st day of September, 1907, a supplemental agreement was made; the principal amendment relating to the method of scaling, as follows:

'Of all lumber cut from logs delivered under this contract, board tally shall be kept by some competent tallyman to be mutual

ly agreed upon, each party here to pay one-half their wages. Said lumber to be sawed so said tally can be kept at the tail of the mill, or the lumber shall be piled separately from lumber sawed from other logs, when said tally shall be made at the time the lumber is shipped, and for each eleven hundred fifty (1,150) feet of hemlock lumber six feet and over in length, graded mill culls and better, sawed as above, said second parties shall pay to said first party six dollars ($6), and for each eleven hundred fifty (1,150) feet of all other kinds of lumber, sawed as above provided, said second party agrees to pay seven dollars and a half ($7.50). It is also understood and agreed that all cedar logs delivered under this contract shall be settled for upon the scale of Boom Company scalers at mill where said cedar logs are delivered at the rate of seven dollars and a half ($7.50) per thousand feet.'

"On December 20, 1909, plaintiff brought this action against defendant alone for breach of contract, classifying the various breaches and damages therefor, as follows:

“‘I. * * * And the said plaintiff delivered to the said defendant, under said contract, a large quantity of sawlogs, to wit, about 7,294,577 feet of hemlock logs and about 3,156,506 feet of other sawlogs, of which amount there were scaled and reported, as required by said contract, only the amount of 3,294,577 feet of hemlock logs and 1,156,506 feet of other logs, whereupon there became due and owing to the plaintiff by and from the defendant, for said services upon the logs as scaled and reported, the sum of $19,768.06 for hemlock logs and $8,673.80 for other logs, in all the sum of $28,441.86, less the advances paid as required by said contract upon the logs so delivered, when the same were raised, banked, and skidded, to wit, for hemlock logs $9,884.03, and for other logs $4,336.90, which advances became due to the defendant, upon said logs, when the same were delivered as provided in and by said contract; and the amount due to said plaintiff, after deducting the advances aforesaid, upon each lot of logs as scaled and reported, was and is the sum of $14,220.93 and interest thereon from the time the same or parts of the same became due, upon each delivery of said logs as delivered, scaled, and reported. Wherefore it became and was the duty of the defendant to pay to the plaintiff, on the 10th day of the month next following each delivery of said logs, the amount due the plaintiff thereon as aforesaid, which duty the said defendant wholly failed and neglected to perform, but claimed, on the contrary, in defiance of and contrary to the terms of said contract, that advances made by it to the plaintiff upon other logs belonging to the defendant, which had been raised, banked, and skidded upon the banks of said river by the plaintiff, were all due

and should be applied in payment of the particular lot or lots of logs so delivered to it by the plaintiff, and wrongfully, and to the great damage and injury of the plaintiff, deducted all of the advances so made by it upon said other logs, then upon said skids, as well as upon the lot or lots of logs so delivered, scaled, and reported, and wholly refused and still refuses to pay the plaintiff the moneys actually due the plaintiff for the logs so delivered, scaled, and reported, whereby the defendant became, was, and is indebted to the plaintiff upon the logs so delivered and actually scaled and reported in the said sum of $14,220.93 and the interest thereon, to the damage of plaintiff of $16,000.'

"II. That the defendant did not make a fair and equitable scale, but an unfair, inequitable, and fraudulent scale, thereby damaging plaintiff to the amount of $2,854.10.

'III. That the defendant used and manufactured large quantities of logs delivered under the contract, without scaling or accounting for the same, to plaintiff's damage $20,000.

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"IV. Although the contract provided, ""that said second parties are to receive and manufacture said logs as fast as the same are delivered to them," a large quantity of logs so delivered to it by the plaintiff under said contract were held, kept, and retained in the water by said defendant, and were not manufactured as fast as the same were delivered, and a large quantity of the same logs, to wit, 1,000,000 feet of hemlock logs and 500,000 feet of other logs, became water-soaked and sank to the bottom of said Lake Manistee before the same were scaled or tallied,' to the damage of the plaintiff $10,000.

"V. That the defendant did not manufacture the logs into lumber in accordance with the supplemental agreement, but, 'did cut said logs, or a large portion thereof, into shorter lengths, and manufacture said shorter lengths of logs and lumber into staves, heading, and other products of short lengths, and into wood for use in its manufacture of salt, and for other purposes, and did credit and allow the said plaintiff for only the portion of said logs which it actually did manufacture into lumber,' to the damage of plaintiff $6,500.

"VI. That defendant took and manufactured for its own use large quantities of logs belonging to others of said parties of the second part

“‘And inasmuch as the said plaintiff has performed the services

required of it under said contract, upon the logs so taken, received, and used by the defendant, it was and is entitled to the compensation provided by said contract therefor; and inasmuch as the advances made upon logs so taken by the defendant remain a charge against the plaintiff, and must be paid by it when due, under said contract, the plaintiff is entitled to demand and receive the full contract price therefor.'

"Defendant pleaded the general issue, with notice of set-off and recoupment. At the outset the defendant objected to any evidence being received under the declaration for various reasons specifically set forth. The objections, were, for the most part, overruled, and the case proceeded, resulting in a verdict for the plaintiff of $11,796.66. The defendant has brought the case to this court for review.

"It was the business of the plaintiff to raise the logs coming under the description of 'deadhead' and 'sunken' from the river, lift them to the bank, and place them on skidways, using for that purpose somewhat expensive steam scows. After these logs were once lifted and banked, they were scaled by scalers, as provided in the contract, for the purpose of ascertaining the amount of the advances. After being allowed to dry out, during the winter and spring, such as were dried sufficiently for the purpose were floated and driven down the river for delivery to the respective mills of the parties of the second part. When the drive reached the mouth of the river, they were driven or gathered in what is called or known as the 'sorting gap.' The logs of the various owners were then separated and placed in pockets ready for delivery to the owner claiming the marks on such logs. This work of sorting and separating was done by the Manistee River Boom Company under a contract with the plaintiff.

"The Manistee River Boom Company is a corporation organized under the laws of this State for the purpose of driving, sorting, and delivering logs, and its operations have been confined to the Manistee river and Manistee Lake. The Manistee River Boom Company sublet its work of sorting and delivering the 'Nav' logs to the Louis Sands Salt & Lumber Company, the defendant, who, as said subcontractor of the Manistee River Boom Company, performed the actual work of sorting and delivering these logs to the mills of the parties of the second part, and it continued to do so from the time the plaintiff commenced the operations under the contract up to the