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Cahill, J.
The plaintiff brought suit in the Genesee circuit court, and the defendant comes to this Court on demurrer to the declaration, which was overruled in the court below.
The plaintiff's declaration is in two counts. The first count sets out substantially that in September, 1885, plaintiff was engaged in farming in the township of Rose, in Oakland county; that some time in that month defendant came to plaintiff's farm, and brought with him 25 bushels of so-called “Bohemian Oats,” which he offered to sell to plaintiff, and also to give him a bond from the Bohemian Oat Company, in words and figures as follows:
■ “222. A bond from the Bohemian Oat Company, to be signed by our superintendent, J. M. Orcutt.
“ Rose township, Oakland county, State of Michigan,. Sept. 28, 1885.
“We do hereby agree to sell 50 bushels of Bohemian oats for Mr. A. J. Leland, at ten dollars per bushel, in cash or by note, for which the said A. J. Leland is to pay 25 per cent, commission for selling. Said oats to be-sold on or before December, 1886.
[Signed] “ J. M. Orcutt, Sup’t.”
That the defendant offered to take in payment for such-oats,—
“And the bond, above set forth, which was to accompany them, and which was to be delivered to plaintiff with said oats should plaintiff purchase them, said plaintiff’s note for the sum of $250, payable in February, 1887, so that plaintiff should not be called upon to pay said note until said Bohemian Oat Company had sold for plaintiff' said 50 bushels of ‘Bohemian Oats,’ so called, as provided' for in said bond, and plaintiff had had time to realize from the proceeds thereof sufficient money to pay such note. And plaintiff says that he believed that, if he purchased said oats of defendant, said Bohemian Oat Company would perform all the conditions of said bond, above set forth, and that, relying upon the fulfillment of the conditions of said bond, and believing that they would be performed, and that he would thereby be enabled to obtain sufficient money to pay for such oats, he accepted the offer of defendant, and then and there received from defendant the bond and 25 bushels of oats, and gave defendant in payment therefor his note for $250, payable in • February, 1887.”
Plaintiff further says that the Bohemian oats are and' then were but little, if any, more valuable than common-oats for any purpose whatever, and are not, and at that time were not, worth to exceed 30 to 35 cents per bushel. And the plaintiff says that the consideration which induced him to give said note was not the 25 bushels of so-called “Bohemian Oats,” but such consideration was the bond which formed a part of the contract, and that he would not, and defendant well knew he would not, have made said purchase and executed his note if it had not been for the agreements contained in the bond, on which plaintiff relied, that the company would, before December, 1886, sell for plaintiff 50 bushels of oats, so that he, plaintiff, Would be enabled to pay his note in February following from the money that he would have received on the fulfillment of the conditions of said bond.
The declaration further states that although plaintiff raised the oats, and had them on hand at the time set for the fulfillment of the bond, neither defendant nor the Bohemian Oat Company ever sold or offered to sell 50 bushels of Bohemian oats, and that none of the conditions of the bond were ever performed in any manner. The declaration further says that the bond was a part of the contract on which the note was given; that defendant obtained no right to enforce the collection of said note until the Bohemian Oat Company had fully performed the conditions of the bond, and had sold for plaintiff 50 bushels of so-called “ Bohemian Oats,” at $10 per bushel, yet the said defendant did, a short time after obtaining such note, and before it became due, wrongfully and fraudulently dispose of said note to the First National Bank of Holly, a Iona fide purchaser without notice, and that the plaintiff had been compelled, when the note fell due, to pay it.
It will be noticed that this count contains no allegation of fraud on the part of the, defendant in the procuring of this note except such as may be said to be naturally inferred from the transaction itself. Neither is there any allegation that the plaintiff was ignorant of the nature, of this transaction, or that he was misled or deceived in any way by the defendant. The sole allegation of fraud against the defendant relates to his transfer of the note, which, it is claimed, he had no right to dispose of to a bona fide holder until after the Bohemian Oat Company had performed the conditions of the bond. But it is not alleged that defendant agreed not to transfer this note, nor that defendant agreed that plaintiff should not be called upon to pay his note, until the company had performed the conditions of the bond, and until the plaintiff had had time to realize from such performance sufficient to pay his note. That clause of the plaintiff’s declaration which commences as follows:
“So that plaintiff should not he called upon to pay said note until said Bohemian Oat Company had sold for plaintiff said 50 bushels of Bohemian Oats,”—
and what follows, is not the averment of a fact, but is an obvious inference drawn by the pleader from the fact that the bond was, by its terms, to be performed before the note fell due. So far as anything appears from this count, the defendant was as innocent of any wrong in the transaction as was the plaintiff himself. Under such circumstances, it was not wrongful or fraudulent for the defendant to dispose of the note. It. follows from this that the first count alleges no cause of action.
The second count was like the first, except that, in addition thereto, it is alleged that, a. few days before the defendant called upon the plaintiff, one Alfred W. Hanmer came to the plaintiff’s farm, and represented himself to be the agent of the Bohemian Oat Company, which he represented to plaintiff was a company incorporated under the laws of Michigan, with a capital stock of $100,-000, for the purpose of selling Bohemian oats, which Hanmer represented were much more valuable than any of the varieties of oats commonly raised by farmers; that said oats would be worth in the market $1 per bushel for the purpose of being ground into .oatmeal; that Hanmer further represented that a good deal of money was going to be made by a few men out of such oats, and that, for the purpose' of introducing them, the company would sell a few bushels to not to exceed 15 farmers in each township, at $10 per bushel, and that said company would give to each of those who purchased said oats a bond, to be signed by the superintendent of said company, binding the company to sell for the person who should purchase any of such oats twice as many bushels of such oats as such person should purchase, at $10 per bushel, but charging such purchaser a commission of 25 per cent, for selling such oats; that Hanmer also represented to plaintiff that the Bohemian Oat.Company had deposited with the Treasurer of the State of Michigan $100,000, to secure the fulfillment of the conditions of such bond; that Hanmer solicited plaintiff to give an order to said Bohemian Oat Company to deliver to him 25 bushels of said so-called “Bohemian Oats,” and' represented to plaintiff that, if plaintiff would give such order, he (Hanmer) would cause to be delivered to plaintiff, at the same time that the 25 bushels of oats were delivered, a bond binding said Bohemian Oat Company to sell for plaintiff 50 bushels of such so-called “Bohemian Oats,” at $10 per bushel, by December, 1886; that Hanmer further stated that, if plaintiff would purchase the 25 bushels of oats, he might give his note for $250, payable in February, 1887, in payment for the same, and that plaintiff would never be called upon to pay such note until said Bohemian Oat Company had performed all of the provisions of such bond in every particular, and plaintiff had realized from the sale of such oats sufficient money to pay said note; that, relying upon the representations of Hanmer, plaintiff agreed to purchase 25 bushels of oats, and to give in payment therefor his note for $250, payable in February, 1887, and in pursuance of this agreement he gave to Hanmer an order, signed by him, for the delivery of the oats, which order was in words and figures as follows:
“Rose Township, September 28, 1885.
“Mr. J. M. Orcutt,
“ Superintendent of the Bohemian Oat Company,—
“Sir: Please deliver at my house twenty-five bushels of Bohemian oats, weighing, fifty pounds to the bushel, for which I agree to pay J. M. Orcutt, or bearer, ten dollars per bushel, on delivery of the oats, in cash, or by note payable the first day of Feb., A. D. 1887; the company’s bond to sell twice the above number of bushels to be delivered with this order. The purchaser holds a copy of this order. Any change is null and void.
[Signed] “A. J. Leland.
“A. W. Hanmer, Agent.”
That, within a few days after he had given this order to Hanmer, the defendant came to plaintiff’s farm, “ and, in pursuance of . the agreement plaintiff had made with said Hanmer; as above stated, offered to sell to plaintiff 25 bushels of oats, which defendant then and there called ‘ Bohemian Oats,’ and to deliver to plaintiff a bond from said Bohemian Oat Company,” substantially as set out in the first count of the declaration. The declaration alleges that all of Hanmer’s representations were false and fraudulent.
There is no doubt that, under our previous decisions, the second count contains a good cause of action, if it substantially appears that the defendant is therein made responsible for the fraudulent representations of Hanmer. Hess v. Culver, 77 Mich. 598; Knight v. Linzey, 80 Id. 396; Pearl v. Walter, Id. 317.
It is claimed by defendant that there is no allegation in the declaration which legitimately connects the defendant with such misrepresentation; that the allegation in the declaration “ that, within a few days after plaintiff gave his order to Hanmer, said defendant came to the farm where plaintiff then resided, and, in pursuance of the agreement plaintiff had made with said Hanmer, as above stated, offered to sell to plaintiff 25 bushels of oats,” does not amount to an averment that defendant and Hanmer were acting in concert, nor that defendant knew of, or was in law or otherwise responsible for, the false statements of Hanmer; that nothing is alleged as a basis for the inference of the pleader that defendant came “in pursuance of the agreement made with Hanmer,” beyond the fact that defendant came to plaintiff a few days after Hanmer had procured his order for a similar quantity of oats; that there is no allegation that defendant brought with him plaintiff’s order, given to Hanmer a few days before, or that defendant said he came pursuant to such order; that, for all that appears in the declaration, Hanmer and defendant may have been strangers to each other, each acting as independent agents of the oat company, and, of course, not responsible for each other’s representations. I do not see any escape from this position. The second count is defective in that it contains no sufficient allegation of defendant’s complicity with and responsibility for the fraud of Hanmer. In other respects this count is like the first.
The judgment must be reversed, and the cause remanded, when the plaintiff will have 20 days in which to amend his declaration, if he desires.
The other Justices concurred. | [
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] |
Per Curiam.
This is a prosecution of defendant Sandford I. Gadient, a Missouri businessman, for tax evasion and embezzlement of money from Blue Cross and Blue Shield of Michigan in connection with a purchase of real estate in Southfield, Michigan. By leave granted, the people bring this interlocutory appeal from the Detroit Recorder’s Court’s affirmance of the district court magistrate’s refusal to bind defendant over on a charge of embezzlement of $125,000, pursuant to MCL 750.174; MSA 28.371. Defendant was bound over for trial on the tax evasion charges, but those charges are not before us, and the proceedings below have been stayed during the pendency of this appeal. We affirm.
In April of 1984, defendant and bcbsm agreed that bcbsm would hire defendant as an independently contracting management consultant, to assist bcbsm in establishing a real estate subsidiary to manage bcbsm’s various properties. In September of that year, defendant located real estate and an office building for bcbsm and the parties made another agreement hiring him to conduct that transaction. The real estate was a partially constructed building in Southfield known as the "Sig nature I” project, which bcbsm bought pursuant to defendant’s negotiations.
The Signature I project would not, however, have provided bcbsm with enough new office space. Accordingly, defendant immediately negotiated for bcbsm to purchase a neighboring parcel of land, on which another building was contemplated. This project was named Signature II. It is with respect to this second purchase of real estate that defendant is alleged to have embezzled certain monies from bcbsm.
As noted, the relationship between the parties began when bcbsm hired defendant as a management consultant, for which bcbsm paid him $2,000 per diem. When defendant located, negotiated for, and closed on the Signature I building, bcbsm continued to pay him the per diem compensation and, in addition, paid him one percent of the Signature I purchase price, which amounted to $87,500. Additionally, defendant, with bcbsm’s knowledge and approval, negotiated with the seller’s real estate agent for one-third of the agent’s Signature I brokerage commission.
The agreement as to Signature II was even more advantageous to defendant. Defendant retained his bcbsm per diem, was paid one percent of the purchase price, and received half of the seller’s agent’s commission. In addition to all that, defendant negotiated directly with the seller for another ten percent of the purchase price.
The embezzlement charge at issue centers on defendant’s appropriation to himself of the interest earned on the escrow account containing the purchase money for the Signature II project, a sum of $125,000. The substance of this charge may best be understood by focusing on the difference between the escrow arrangements for Signature I and those for Signature II. The purchase money for Signature I was deposited in escrow pursuant to an agreement dated October 4, 1984. The key clause of that agreement relative to our inquiry provides that the monies to finance the Signature I deal were to be held in an interest-bearing account "for seller’s benefit.”
By contrast, the October 16, 1984, Signature II escrow agreement provided:
[A]ll monies subject to this Escrow Agreement shall be held in an interest-bearing account and Sandford I. Gadient as agent for [bcbsm] shall give you instructions relative to what interest-bearing investments should be made by you. If the transactions which are the subject of tins Escrow close, all interest earned up until the time of closing shall be credited to Sandford I. Gadient as agent for [bcbsm]. [Emphasis added.]
From the record of defendant’s preliminary hearing, it appears that this change in the Signature II agreement from the Signature I agreement had been negotiated by defendant without the knowledge of bcbsm. Nevertheless, the record is also clear that bcbsm did receive a copy of the Signature II escrow agreement, but apparently chose not to read it or read it carefully, assuming it to be identical to the Signature I agreement.
On December 19, 1984, Lewis M. Anderson, vice-president for bcbsm, signed a letter addressed to defendant which stated:
Dear Sandy:
You are representing Blue Cross and Blue Shield of Michigan as a Consultant in connection with our real estate operation reorganization study, compensation program, and executive staffing needs. Additionally, we have asked you to serve as a Consultant to represent us (as an "undisclosed principal”) in negotiating for the pur chase of several major office buildings in the Detroit area, as well as a related office building land parcel, because of your extensive experience and unique abilities in real estate.
While we intend to pay you as a Consultant for the above tasks, this letter is written to authorize you to negotiate a fee agreement with the Seller of the land in any amount mutually satisfactory between you and them.
We realize that this places you in the position of receiving compensation from both the Seller (who normally pays the real estate brokerage fee) as well as the Buyer (ourselves, who pay the consulting fees). However, we would have no objection to you receiving any fee from the land sellers that you may negotiate.
Thank you again, Sandy, for the helpfulness and assistance you have provided Blue Cross and Blue Shield of Michigan by assisting us in meeting our critical needs. [Emphasis added.]
Then on March 1, 1985, Mr. Anderson, on behalf of bcbsm, sent a follow-up letter to defendant. That letter, which the record indicates had been drafted by defendant, stated:
Dear Sandy:
By way of elaborating on my letter to you of December 19, 1984, we understand you are trying to negotiate some portion or all of your fee due from the Signature property sellers in the form of interest earned in the escrow account at Lawyers Title.
Since we always planned to pay the gross prices quoted for the properties, and allowed all interest earnings to accrue to the sellers beneñt, we have no objection to you receiving some portion or all of any interest earning in the escrow at Lawyers Title.
Again, while we realize that this places you in the position of receiving compensation from the seller and/or interest earned in the escrow, as well as from ourselves as buyers, we have no objection to you earning anything you may negotiate as long as our direct fee paid you is limited to 1% of the $6,100,000 purchase price.
Thanks, again, Sandy, for all the guidance and assistance you’ve given us in this transaction. [Emphasis added.]
It was only after having received the above letter that defendant, on March 15, 1985, instructed the title insurance company to remit to him the interest accrued on the Signature II escrow account. The check was issued to defendant in accordance with his instructions on March 18, and the final balance was paid to defendant in August of the same year.
The prosecution contends that defendant misappropriated these interest proceeds, which should have belonged by right to bcbsm, by fraudulently obtaining bcbsm’s consent. However, the district court magistrate disagreed, finding that the prosecution had failed to make out a prima facie case of embezzlement against defendant, and the trial court affirmed that decision.
MCL 766.13; MSA 28.931 requires that the magistrate bind over a defendant for trial if it appears after the preliminary examination that a felony has been committed and there is probable cause to believe that defendant committed the crime. As noted by our Supreme Court in People v King, 412 Mich 145, 154; 312 NW2d 629 (1981):
The inquiry is not limited to whether the prosecution has presented evidence on each element of the offense. The magistrate is required to make his determination "after an examination of the whole matter.” Although the prosecution has presented some evidence on each element, if upon an examination of the whole matter the evidence is insuffi cient to satisfy the magistrate that the offense charged has been committed and that there is probable cause to believe that the defendant committed it, then he should not bind the defendant over on the offense charged.
See also People v Stafford, 434 Mich 125, 133; 450 NW2d 559 (1990). This Court will not substitute its judgment for that of the examining magistrate, but will only reverse if it appears that the magistrate clearly abused his discretion. People v Talley, 410 Mich 378, 385-388; 301 NW2d 809 (1981).
In this case, the trial court in reviewing the record of the preliminary examination found, inter alia, that the prosecution had failed to make a prima facie showdng that the interest monies went to defendant without the consent of bcbsm, and that defendant had the specific intent to defraud bcbsm at the time of the conversion. Both of these elements are necessary to a conviction for embezzlement. CJI 27:1:01. After our own review of the record, we find no error in this assessment of the situation by the trial court.
As noted by the examining magistrate, "[defendant had] the range and the loose ability to wrangle his own fees and at the same time . . . get it from both sides of the street.” However artful and shrewd defendant was in his handling of the escrow interest matter, it was done within the wide parameters set for him by bcbsm. Bcbsm complains that it was fraudulently deceived by defendant because he authored the pivotal March 1, 1985, letter. But regardless of who drafted the letter, bcbsm endorsed and adopted its contents by signing and issuing it.
The March 1, 1985, letter makes patently clear that bcbsm had no desire to accrue to itself the interest on any escrow monies, nor did it care if the interest proceeds went to defendant. That letter clearly indicates that bcbsm wished only to obtain the sought after properties at the "gross prices quoted,” and to limit its "direct fee” paid to defendant to one percent of the gross purchase price. Beyond that, the letter authorized defendant to obtain for himself "anything [he] may negotiate.” While defendant clearly took full advantage of the free rein afforded him by bcbsm, it is also clear that bcbsm received the full benefit of the bargain it sought in these transactions. While the March 1 letter drafted by defendant does omit the fact that the interest on the Signature II deal was to go to bcbsm, there is no disputing that bcbsm had a copy of the Signature II escrow agreement in hand fully five months before the March 1, 1985, letter was issued.
Bcbsm gave defendant carte blanche, and he worked it to his best advantage. From the standpoint of proper business practice, the conduct of defendant (or bcbsm for that matter) may not be excusable. However, under the circumstances presented here, we find no basis on which to conclude that the magistrate abused his discretion in refusing to assign criminal intent or criminal liability to defendant’s actions. The trial court did not err in affirming the magistrate’s determination.
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Per Curiam.
Plaintiff appeals from evidentiary rulings by the circuit court excluding the contents of files compiled by the Michigan Department of Transportation.
Plaintiff’s decedent was killed when the car in which she was a passenger was struck by a train coming through a railway crossing maintained and controlled by defendant, Consolidated Rail Corporation. Plaintiff sued defendant for negligence, basing his claims upon the company’s failure to maintain adequate warning devices or gates at the crossing to prevent accidents. In support of these claims, plaintiff attempted to offer into evidence Department of Transportation files regarding the crossing in order to establish a need for gates. Defendant moved to exclude the files from evidence, which the trial court granted, stating:
Well my impression is that the law and apparently administrative law has pretty much taken over this area with respect to what is reasonable or unreasonable or should be done with respect to railroad crossings. And if the government and the railroad complies with those recommendations or the orders with respect to that that there is very little room for common law negligence. So unless there is something else that comes out during the course of the trial about those reports and so on those would not be admitted.
Prior to trial, plaintiff stipulated to an order of dismissal on the ground that, given the court’s evidentiary rulings, plaintiff had no viable case against defendant Conrail. The court entered an order dismissing plaintiff’s claims with prejudice.
On appeal, plaintiff argues that the circuit court erred in ruling that the contents of the files were not admissible. We disagree.
Plaintiff attempted to present the contents of the files to prove that defendants’ railroad crossing required warning signals and gates and that defendant was negligent in failing to install these devices. MCL 257.668(2); MSA 9.2368(2) provides in relevant part:
The erection of or failure to erect, replace, or maintain a stop or yield sign or other railroad warning device, unless such devices or signs were ordered by public authority, shall not be a basis for an action of negligence against the state transportation department, county road commissions, the railroads, or local authorities.
The terms of this statute are clear and unambiguous and preclude liability for failure to install warning devices unless so ordered by a public authority. Edington v Grand Trunk W R Co, 165 Mich App 163, 168-169; 418 NW2d 415 (1987), lv den 430 Mich 900 (1988). There was no order to install gates at the crossing in question prior to the accident, thus defendant cannot be held liable for negligence in failing to install gates or other warning devices. Plaintiff may not use the Department of Transportation files to prove a theory of liability which is barred by the statute. The court properly excluded the files from evidence.
Plaintiff also argues that the court erred in holding that evidence of the blood alcohol content of the car’s driver, third-party defendant Jose Ramirez, was admissible at trial. We agree. The test results in question were obtained pursuant to the implied consent statute and, therefore, cannot be used in civil litigation. McNitt v Citco Drilling Co, 397 Mich 384, 388; 245 NW2d 18 (1976). Nevertheless, this error does not require reversal as it has no effect on plaintiff’s inability to prove his claim against defendant Consolidated Rail Corporation.
Affirmed. | [
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Per Curiam.
Defendant appeals his conviction of breaking and entering an occupied building, MCL 750.110; MSA 28.305. A jury trial took place before Detroit Recorder’s Court Judge Kaye Tertzag in December, 1987. On December 30, 1987, defendant was sentenced to two years six months to ten years imprisonment. This Court granted defendant’s application for delayed appeal on January 10, 1989. On appeal, defendant raises three issues. First, defendant argues that prejudicial error occurred when the prosecutor violated the trial court’s order in limine prohibiting evidence that the car involved was stolen. We agree and reverse defendant’s conviction. Second, defendant argues that his conviction should be reversed because the prosecutor did not render reasonable assistance to locate and produce a witness. We disagree. Third, defendant argues that his right to a speedy trial was violated. We disagree.
At approximately 5:00 a.m. on May 23, 1987, Livonia Police Officers Michael Burke and Terrence Webb were on routine patrol when they observed a moving car in the parking lot of the Wine Palace Party Store. The officers became suspicious and followed the car. A white male with dark hair and a white female with long hair were in the front seat of the car. At that time, the officers received information over the police radio that the alarm at the Wine Palace Party Store had sounded.
As the police followed the car, it accelerated up to sixty miles per hour and the officers lost sight of the vehicle. The officers subsequently located the car, which had crashed into a chain link fence. It was unoccupied. One hundred fifty-eight unopened cigarette packs, some lighters and a female’s purse were inside the car. Officer Webb searched the area and found defendant and a female companion, Theresa Simpson, in a wooded lot about a block away from the car. According to Officer Webb, defendant and Simpson were kneeling down on all fours with their heads down, as if hiding. Officer Webb arrested defendant and Simpson. Defendant’s fingerprints were found on the exterior left mirror of the car.
The owner of the Wine Palace Party Store testified that cigarettes and cigarette lighters were missing from the store after the robbery.
Defendant denied breaking into the Wine Palace Party Store. Defendant claimed that he had fallen asleep in the back seat of the car and that Theresa Simpson woke him and told him to run because they were being chased.
Prior to trial, Judge Sharon Tevis Finch granted defendant’s motion in limine to suppress evidence that the car was stolen. At trial before Judge Tertzag, the prosecutor asked Officer Burke if he received any information relative to the license plate, and Burke answered: "The plate came back as being stolen.” Defendant objected and moved for a mistrial. The trial court denied defendant’s motion on the ground that, although the pretrial order prohibited any evidence that the car was stolen, it did not prohibit reference to a stolen license plate.
On appeal, defendant contends that the prosecutor violated the trial court’s order by deliberately eliciting testimony that the license plate was stolen. Defendant argues here, as below, that a reference to the stolen license plate was not different than a prohibited reference to a stolen car. We agree.
The role of a prosecutor is to seek justice, not merely to convict. People v Wallace, 160 Mich App 1, 10; 408 NW2d 87 (1987). The test of prosecutorial misconduct is whether the defendant was denied a fair and impartial trial. People v Foster, 175 Mich App 311, 317; 437 NW2d 395 (1989).
The order granting defendant’s motion in limine was broad enough to prohibit introduction of evidence that the license plate was stolen. Evidence that the car was stolen was excluded on the ground that it was prejudicial. Evidence that the car’s license plate was stolen is similarly prejudicial. The jury could infer from either piece of evidence that defendant was involved in an additional theft act. The evidence added nothing to the case except to suggest that defendant was a bad man. The prosecutor’s question was clearly designed to elicit the information that the license plate was stolen. Furthermore, the information that the car was stolen was revealed and repeated three times by Officer Burke during cross-examination in response to questions asking why a police report had been written. Defense counsel’s request that the answers be stricken as nonresponsive was denied.
Although Judge Tertzag issued a cautionary instruction, it is unlikely that the jury could have disregarded the evidence. The prejudicial effect could not be overcome by the cautionary instruction. Hence, the repeated admission of evidence that the car and the car’s license plate were stolen constituted prejudicial error requiring reversal.
Under his second issue, defendant argues that his conviction should be reversed because the prosecutor did not render reasonable assistance to locate and produce a witness.
Defendant’s motion for assistance to locate and serve process upon Theresa Simpson was granted on November 16, 1987. The trial court denied defendant’s motion for mistrial on the basis of the prosecutor’s failure to produce Simpson at trial.
Defendant incorrectly asserts that Simpson was not a res gestae witness. A res gestae witness is a person who witnesses some event in the continuum of a criminal transaction and whose testimony will aid in developing a full disclosure of the facts. People v Calhoun, 178 Mich App 517, 521; 444 NW2d 232 (1989); People v Baskin, 145 Mich App 526, 530-531; 378 NW2d 535 (1985). We note that the present version of the res gestae witness statute, which applies in the present case, does not require the prosecutor to endorse and produce all res gestae witnesses. MCL 767.40a; MSA 28.980(1). However, the statute does require a prosecuting attorney to provide reasonable assistance to a defendant in locating and serving process upon witnesses. MCL 767.40a(5); MSA 28.980(1)(5).
At the hearing on this matter, the investigating officer testified that he was not notified by the prosecutor to give defendant assistance in locating Simpson. Therefore, the prosecutor did not provide reasonable assistance to defendant in locating Simpson. The relevant inquiry is whether the prosecutor’s failure to render assistance in obtaining Simpson prejudiced defendant. In the present case, we conclude that the prosecutor’s failure to assist did not prejudice defendant.
Under the former res gestae statute, a prosecutor was required to endorse and produce all res gestae witnesses. Baskin, supra, p 531. An exception to the production requirement existed when the res gestae witness was an accomplice. People v Jerry Smith, 122 Mich App 106, 113; 332 NW2d 428 (1982), rev’d on other grounds 417 Mich 1100.39 (1983). The rationale behind the accomplice exception is equally applicable to the present statute. Hence, we conclude that the prosecutor does not have a duty to provide reasonable assistance to a defendant in locating and serving process upon an accomplice. The record contains sufficient indicia that Simpson was an accomplice. As an accomplice, Simpson would not be required to testify. Id. Hence, defendant was not prejudiced by the prosecutor’s failure to act.
Defendant’s final claim is that he was deprived of a speedy trial because he remained in custody longer than the six-month period provided in MCR 6.109. Defendant remained in custody from his arrest on May 23, 1987, until trial commenced on December 8, 1987. A hearing on defendant’s motion for release on personal bond was held on November 19, 1987. The trial court denied the motion. An order was entered on November 23, 1987.
Initially, we note that defendant appears to confuse the right to a speedy trial with the right to pretrial release under MCR 6.109. Violation of the right to a speedy trial can result in dismissal, whereas the court rule provides for release on personal recognizance pending trial and does not result in dismissal of the charges._
MCR 6.109(B) provided in part:
In a felony case in which the defendant has been incarcerated for a period of 6 months or more to answer for the same crime or a crime based on the same conduct or arising from the same criminal episode, or in a misdemeanor case in which the defendant has been incarcerated for a period of 28 days or more . . . , the defendant must be released on his or her own recognizance. In computing the 28-day and 6-month periods, the following rules apply:
(1) The period of delay is excluded that results from other proceedings concerning the defendant, including but not limited to an examination and hearing on competency and the period in which he or she is not competent to stand trial; hearings on pretrial motions; interlocutory appeals; and trial of other charges.
(2) The period of delay is excluded that results from an adjournment granted at the request or •with the consent of the defense attorney, when concurred in on the record by the defendant, after he or she has been advised by the court of his or her right to a speedy trial and the effect of concurrence.
(5) Other periods of delay for good cause within the discretion of the court are excluded. Docket congestion is not good cause for delay.
Originally, a calendar conference was held on July 10, 1987, and a trial was scheduled for September 28, 1987. However, on September 4, 1987, defendant brought four motions before Judge Finch. At that conference, the trial was postponed to March 8, 1988. On October 29, 1987, a hearing on a motion for bond reduction was held. Subsequently, on November 12, 1987, trial was moved forward to December 8, 1987. The six-month pe riod expired on November 23, 1987. Therefore, the trial was scheduled for fifteen days beyond the six-month period of MCR 6.109.
At the motion hearing on November 19, 1987, the trial court denied defendant’s motion to be released on personal recognizance. The trial court indicated defendant had a past history of prison escapes and it was not going to release him in light of the criminal history and the nearness of the trial.
To the extent that defendant argues the trial court erred in denying his motion for release on personal bond, defendant’s argument is without merit. In light of the reasons for the delay, the trial court did not err by refusing to release defendant on his own recognizance. The delay was short, there was no evidence that the prosecutor acted in a manner to delay the proceedings and the delay was occasioned by defendant’s attempts to assert his own rights.
To the extent that defendant argues his right to a speedy trial was violated because he was held in custody longer than the six-month period provided in MCR 6.109, defendant’s argument is without merit. A delay of six months is necessary to trigger further investigation when a defendant raises a speedy trial issue. People v Holland, 179 Mich App 184, 195; 445 NW2d 206 (1989), lv den 434 Mich 887 (1990). A delay of six months does not establish a speedy trial violation. Michigan courts adopted the balancing test stated in Barker v Wingo, 407 US 514, 530; 92 S Ct 2182; 33 L Ed 2d 101 (1972), for reviewing speedy trial claims. People v Hill, 402 Mich 272, 283; 262 NW2d 641 (1978). The four factors that must be balanced are (1) the length of the delay, (2) the reason for the delay, (3) whether defendant has asserted his right to a speedy trial, and (4) the prejudice to the defendant. Id. The dispositive factor in this case is prejudice.
Where the delay is under eighteen months, the defendant must prove prejudice. People v Collins, 388 Mich 680, 695; 202 NW2d 769 (1972); People v Wyngaard, 151 Mich App 107, 112; 390 NW2d 694 (1986). Defendant asserts that he was prejudiced because he was unable to help find Theresa Simpson. The failure to produce Simpson did not result from any delay in the time from arrest to trial. Defendant’s argument that he was prejudiced by an inability to help find his accomplice is without merit.
Reversed and remanded.
MCR 6.109, while in effect at all times relevant here, was deleted from the Michigan Court Rules effective October 1, 1989. | [
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Per Curiam.
Plaintiffs appeal from an order of the circuit court granting summary disposition in favor of defendants on plaintiffs’ claim for tortious interference with an advantageous business relationship. Although the trial court’s order fails to state under which subrule summary disposition was granted, it was presumably granted under MCR 2.116(C)(10), no genuine issue of material fact. We reverse.
Plaintiff Dolenga, through his business, plaintiff Disability Services, Inc., is engaged in providing rehabilitation services to a variety of clients, in- eluding workers’ compensation claimants. In the instant case, Richard Bobier had sustained a rotator cuff injury while in the employment of Bechtel and working at The Detroit Edison Belle River plant. Bobier was treated by Dr. Michael Baghdoian, an orthopedic surgeon. During the course of treatment, Dr. Baghdoian suggested the option of vocational rehabilitation and referred Bobier to plaintiffs. Bobier had a meeting with Dolenga and his associate, Eva Guerra.
. After that meeting, Guerra sent a letter to defendant Aetna Casualty & Surety Company which requested authorization for a rehabilitation evaluation as part of Bobier’s workers’ compensation benefits. Defendant Joanne Shankin, a registered nurse in the employment of Aetna as a rehabilitation coordinator, responded with a letter to Guerra stating that they were denying authorization for plaintiffs to work with Mr. Bobier, that Dr. Baghdoian had no authority to make referrals for vocational rehabilitation to any vendor, and that Aetna would be making other arrangements for vocational rehabilitation, presumably with a different vendor. On the same date, Shankin sent a letter to Dr. Baghdoian noting that he had referred Bobier to plaintiffs and further directing Baghdoian and his associates to cease making any referrals to any specific rehabilitation vendors, and in particular to plaintiffs. Shankin’s letter further claimed to reserve its "right” under the Workers’ Disability Compensation Act to make its own referrals.
Thereafter, plaintiffs instituted the instant action on the basis of defendants’ alleged tortious interference. Apparently, the Bobier matter has not been the only dispute between the parties.
Over the course of a number of motion hearings, the trial court ruled that defendants had the right to select the rehabilitation vendor and that there was no genuine issue of material fact concerning whether defendants did anything improper in denying authorization for Bobier to work with plaintiffs and, instead, referring Bobier to a different vendor.
On appeal, plaintiffs first argue that the trial court erred in ruling that an insurance carrier has the right to select a rehabilitation vendor for the employee where the employee’s physician has referred the employee to another vendor. We agree. Defendants, both in Shankin’s letters to Dr. Baghdoian, and apparently others, and during the course of litigation, have maintained that a workers’ compensation insurance carrier has a right to select a rehabilitation vendor for the employee. In support of this presumed right, defendants rely upon MCL 418.319; MSA 17.237(319), the provision in the compensation act which relates to rehabilitation services. Defendants’ reliance is misplaced. While it is true that under that section an employee is entitled to receive rehabilitation services if necessary and, in fact, the employer may insist that the employee receive rehabilitation services, the fact that the act allows the employer or the employer’s insurance carrier to voluntarily offer to provide those services does not, as defendants seem to conclude, equate to the employer or carrier having the right to select the vendor of those services. Nothing in § 319 either explicitly or implicitly grants such a right to a workers’ compensation carrier.
On the other hand, neither does the act explicitly grant the right of selection to the claimant as suggested by plaintiffs. Plaintiffs rely on MCL 418.315; MSA 17.237(315), which provides that an employee has the right to select the physician of his choice after ten days from the inception of medical care. However, since Mr. Dolenga, to our knowledge, is not a physician, this section is inapplicable.
It does, however, seem reasonable to conclude that the person receiving the services, the claimant, should normally be the person who selects the vendor. If, at that point, the employer or carrier is dissatisfied with the employee’s choice of vendor, it can petition the bureau for a resolution of the dispute under MCL 418.319(2); MSA 17.237(319X2). Both defendant Aetna and defendant Shankin misapprehend the role and authority of the compensation carrier in providing these benefits. That role is to pay for the treatment, not provide it. Ultimately, since it is the claimant who receives the medical treatment or rehabilitation services, it ought normally to be the claimant who chooses the provider of those services, subject to the dispute resolution procedures under the act if the claimant’s choice is objectively unreasonable. Plaintiffs are correct to the extent that they point out that §315 at least implicitly recognizes that it is the worker’s choice of whom to utilize for the providing of services, not that of the employer or carrier. The trial court’s conclusion to the contrary was incorrect.
Of course, to say that it is the employee’s right to choose the provider of a particular service does not compel the conclusion that the employer or carrier cannot voice an opinion on which provider a claimant should consider for those services. That is, there is nothing wrong, as a general proposition, with the carrier recommending to a claimant a particular provider. For that matter, it is probably to be expected that the carrier would at least initially select the provider when it does offer the rehabilitation services and insist that the employee take advantage of those services as is the carrier’s right under § 319. We are not, however, faced with a situation in this case where the carrier instigated the utilization of rehabilitation services. We are cognizant of the fact that defendants represent in their brief on appeal that they voluntarily offered rehabilitation services. We are also cognizant that this is a flagrant misrepresentation of the facts of this case by defendants. The undisputed truth of the matter is that the claimant, in essence, initiated the issue of utilizing rehabilitation services upon the recommendation and referral of his treating physician. The only "voluntary offer” posed by defendants was defendant Shankin’s offer to have a different vendor provide rehabilitation services to the claimant following her refusal to authorize the providing of those services by plaintiffs.
For the above reasons, we conclude that neither an employer nór a compensation carrier has the right to unilaterally reject a claimant’s choice of a rehabilitation services vendor and insist upon its own choice by way of denying authorization to the vendor selected by the claimant and referring the claimant to the carrier’s own vendor. Rather, where, as here, a claimant initiates the issue of rehabilitation services, and nominates his own vendor, either by way of his own selection or acceptance of a referral by a third party, the proper procedure under the compensation act would be for the carrier to either accept the request by the claimant to receive rehabilitation services from that particular vendor or, if the carrier has objections to either the providing of rehabilitation services at all or to the vendor selected, the carrier may instigate the dispute resolution procedures under the act. The carrier should not, however, simply deny the authorization for the vendor selected by the patient and substitute its own vendor.
The conclusion of what is the proper procedure under the compensation act does not, however, resolve the question whether defendants engaged in the tortious interference with an advantageous business relationship. Rather, it only supports the conclusion that defendants were not enforcing their rights under the compensation act to make a choice of vendor. It is still necessary for plaintiffs to establish that the tort, and each of its elements, had been committed. In this regard, the parties dispute whether plaintiff can come forth with the facts to establish one of the necessary elements of the tort of tortious interference with a business relationship, namely, whether the tortfeasor acted with an improper motive. In this context, improper means illegal, unethical or fraudulent. See Michigan Podiatric Medical Ass’n v Natl Foot Care Program, Inc, 175 Mich App 723, 735-736; 438 NW2d 349 (1989). Defendants’ version of the facts certainly does not show an improper motive. Defendants’ position is that defendant Shankin suggested to Bobier that he obtain rehabilitation services from a different vendor because, in defendant Shankin’s opinion, that other vendor was better suited to provide the rehabilitation services required by Bobier.
However, since this is a matter of summary disposition, we do not accept the facts as proffered by defendants, but, rather, accept the facts in the light most favorable to plaintiffs. Jesson v General Telephone Co of Michigan, 182 Mich App 430, 432- 433; 452 NW2d 836 (1990). Moreover, the courts are liberal in finding the existence of a genuine issue of material fact. Id. at 432. Plaintiffs’ theory of this case presents a much darker picture.
Specifically, plaintiffs suggest that defendants’ motivation for steering Bobier away from plaintiffs and to another vendor arises not from their concern with Bobier, but with their dislike of plaintiffs and, more importantly, their inability to control plaintiffs. A review of the lower court record, including deposition evidence and affidavits, indicates that plaintiffs are in a position to present evidence that defendants choose a rehabilitation services provider on the basis of the provider’s willingness to follow defendants’ dictates, including the termination of services to a claimant at the request of defendants regardless of whether the claimant’s need for those services has been satisfied. Plaintiffs also have evidence to suggest that their reputation in the industry is one of being a "client advocate” and pressing the needs of their clients when the carriers attempt to terminate services prematurely, or at least prematurely in plaintiffs’ judgment.
If the facts are as plaintiffs paint them, defendants’ motivation was certainly improper, namely, attempting to control the referral process in order to be able to control the services provided a claimant and to be able to terminate those services without regard to the claimant’s right to continue to receive those services. Further, under plaintiffs’ version of the facts, defendants attempted to maintain their control by silencing the voices of client advocates, such as plaintiffs, by precluding the flow of business to vendors with such a reputation. Plaintiffs’ version of the facts is supported by evidence garnered through the depositions and affidavits of Dolenga and others, including evi dence of plaintiffs’ reputation in the industry, the prior instances in which defendants sought to prevent plaintiffs from providing rehabilitation services, and a memorandum obtained during discovery written by defendant Shankin which indicated that it was defendants’ position that they would never voluntarily acquiesce to plaintiffs’ providing rehabilitation services.
Defendants’ interference with plaintiffs’ business relationships is further evidenced by the letter sent by defendant Shankin to Dr. Baghdoian which falsely states that defendants have the right under the compensation act to select the vendor and that Dr. Baghdoian has no authority to make referrals. As discussed above, this is simply not true. Defendants have no right to select the vendor and Dr. Baghdoian certainly has as much of a right to make a referral as anyone else. Indeed, given his status as the claimant’s treating physician, we would think he would have a greater right to make a referral choice than do defendants.
In sum, there exists a genuine issue of material fact between the parties. While defendants’ interference with plaintiffs’ business relationships is fairly obvious on the evidence before us, given that they successfully terminated the business relationship between Bobier and plaintiffs, the question whether defendants were acting with an improper motive remains in dispute. While it is certainly possible that a jury could conclude from the evidence garnered thus far that defendants were acting with a proper motive of assisting claimants in obtaining the best available services, there is certainly evidence from which the jury could conclude that defendants were acting improperly, unethically, fraudulently, and possibly even illegally. The important point, however, is that this is a question for the jury to answer and the trial court erred in granting summary disposition.
Reversed and remanded for further proceedings consistent with this opinion. We do not retain jurisdiction. Plaintiffs may tax costs.
We should also note that we are not entirely convinced of defendants’ premise that, even if they were to have voluntarily offered the services, they could choose the vendor. Certainly defendants could have recommended a vendor as part of the offer, but we are not convinced they would have the right to insist upon that vendor if the claimant, for whatever reason, indicated a preference for a different vendor. However, since those are not the facts of the case before us, we need not resolve that question.
This would seem to contradict deposition testimony by defendant Shankin that she would refer matters to plaintiffs in the "appropriate cases.” | [
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G. S. Allen, J.
In this suit for wrongful discharge, we are asked to decide the propriety of a writ of mandamus issued April 24, 1989, by the Ingham Circuit Court, ordering defendants to reinstate plaintiff, although not to "any particular position,” and further ordering defendants not to dismiss plaintiff without a hearing as mandated by defendant university’s policy on the dismissal of tenured faculty for cause. We find the writ properly issued and, therefore, affirm.
Plaintiff is a psychologist and renowned expert in the field of "eating disorders,” primarily anorexia and bulimia. From early 1978 until December, 1987, he was employed by the University of Toronto, first as a lecturer and later as a full professor. In November, 1987, plaintiff’s certification to practice clinically was suspended for two years for professional misconduct involving sexual contact with one of his former patients at the University of Toronto. He was subsequently asked to resign from the university and he did so in December, 1987.
In early 1988, Lionel Rosen, M.D., a professor of psychiatry at the Michigan State University College of Human Medicine, contacted plaintiff re garding possible appointment to the university. Rosen advised plaintiff to write W. Donald Weston, Dean of the College of Human Medicine, and explain the circumstances regarding his suspension from clinical practice and his resignation from the University of Toronto. Plaintiff did so by letter February 28, 1988.
In April and May of 1988 plaintiff was interviewed by Weston and Donald Williams, chairman of the university’s Department of Psychiatry, and on June 21, 1988, was offered a tenured position as a professor of psychiatry in the Colleges of Human and Osteopathic Medicine at a beginning annual salary of $56,000. At a meeting of the university’s Board of Trustees on July 30, 1988, the board approved plaintiff’s appointment as professor "with Tenure, effective September 1, 1988.”
On January 16, 1989, plaintiff informed Weston and Williams that a new charge of sexual misconduct had been filed against him in Ontario. On January 20, 1989, Weston wrote Provost David Scott recommending that plaintiff’s employment with Michigan State University be terminated. The letter stated in pertinent part:
In preemployment discussions with both me and Dr. Williams, the focus was on Dr. Garner’s professional and ethical fitness.
Dr. Williams and I each inquired of Dr. Garner regarding the possibility of other outstanding complaints of sexual inpropriety [sic]. He denied the same and steadfastly maintained that the complaint which led to his resignation from the University of Toronto and the professional discipline meted out by the obep [Ontario Board of Examiners in Psychology] was an isolated instance and that his gorss [sic] misjudgment was an aberration in an otherwise unblemished career as a psycholo gist. Dr. Williams specifically asked Dr. Garner whether he had ever had sexual relations with any other of his patients and Dr. Garner was unequivocal in his denial. He was clear in this point, the only point of concern that really mattered in our evaluation as to the viability of his candidacy.
On Monday, January 16, 1989, Dr. Garner advised me that the obep had, on December 29, 1988, notified him of a new hearing of a charge of professional misconduct relating to an alleged sexual relationship with another of his former patients. He did not deny the charges. Dr. Garner further stated that he had intimate relations with a number of other former patients over the years.
On the same date Williams wrote to Weston recommending plaintiffs dismissal. In the letter, Williams stated that he telephoned plaintiff on the evening of January 16, inquiring about the new allegation of sexual misconduct, and that plaintiff admitted to him that the new allegations were true. The letter continued as follows:
I then reminded him that during his preemployment interviews I had asked him if he had had any other instances of sexual contact with his patients and he told me no. Dr. Garner then said that he thought I was asking if he had any other charges of sexual misconduct pending. I then asked him again whether he has had additional sexual contact with his patients. Dr. Garner then told me he had had sexual contact with a patient in 1983 and numerous sexual contact [sic] with patients in the 1970’s. Many of these contacts in the 1970’s occurred 3-6 months after he had terminated treatment. I then asked him if I was to conclude that he had engaged in sexual relations with most of his patients or former patients he treated in the 1970’s. Dr. Garner replied my conclusion was correct.
I then asked him why he had not told me these facts when I had, in fact, asked him about his sexual contact last Spring. Dr. Garner replied, "I was afraid I wouldn’t get the job.” I replied, "You’re right—you wouldn’t have.”
Provost Scott requested that plaintiff attend a meeting on January 26, 1989, to discuss the letters which he had received regarding the new allegations of sexual misconduct. Present at the meeting were plaintiff, his attorney, Provost Scott and two members of the university’s general counsel. Neither Weston nor Williams attended the meeting. According to plaintiff, the meeting consisted of plaintiff’s being asked a series of questions which he answered to the best of his ability. He may have been asked for his side of the story. At no time, however, was plaintiff given the opportunity to confront his accusers, to cross-examine them, or to call witnesses in his own defense.
After reviewing plaintiff’s remarks made during the January 26, 1989, meeting, conferring with Weston and Williams, consulting with the university’s counsel, and meeting with the university’s Board of Trustees, Provost Scott, under authorization from the board, rescinded plaintiff’s employment contract on February 6, 1989.
It is undisputed that the university established a policy, approved by the Board of Trustees on June 24, 1977, entitled "Dismissal of Tenured Faculty for Cause.” The policy provides for full adversarial proceedings before termination, which the univer sity in the instant case did not provide. Instead, the university chose to rescind plaintiffs contract.
When plaintiffs attempts to have the dispute resolved by the university’s Committee on Faculty Tenure were rejected, plaintiff filed a complaint for mandamus and other relief in the Ingham Circuit Court on March 21, 1989. At a show cause hearing held April 17, 1989, plaintiff testified that at no time was he given an opportunity to cross-examine his accusers or call witnesses on his own behalf. He also testified that, if granted a hearing, he would deny that he lied in his preemployment interviews or made any misrepresentations during the initial interviews. Finally, plaintiff testified that, if granted a hearing, he would contest the allegation of Williams that, in a telephone conversation with Williams on January 16, 1989, plaintiff admitted to sexual misconduct with numerous former patients.
At the conclusion of the show cause hearing, the trial court found that plaintiff was granted tenure status by the university and that the Board of Trustees’ policy on dismissal of tenured faculty for cause governed the dispute. Accordingly, the court issued a writ of mandamus ordering defendants to return plaintiff to his employment and the employment to continue until such time as action is taken pursuant to the university’s policy on dismissal of tenured faculty for cause. By order dated June 16, 1989, this Court granted defendants’ application for leave to appeal but denied stay of the trial court’s order._
On appeal, defendants raise four issues which we have reformulated as five issues, hereinafter addressed.
i
WERE DEFENDANTS RELIEVED OF THEIR DUTY TO AFFORD PLAINTIFF DUE PROCESS BECAUSE PLAINTIFF ALLEGEDLY LIED IN HIS PREEMPLOYMENT INTERVIEW, THEREBY AFFORDING DEFENDANTS THE RIGHT TO RESCIND PLAINTIFF’S EMPLOYMENT CONTRACT?
We begin our analysis by stating the rules of law governing the issuance of mandamus. To obtain a writ of mandamus, "the plaintiff must have a clear legal right to the performance of the specific duty sought to be compelled and the defendants must have a clear legal duty to perform the same.” State Bd of Ed v Houghton Lake Community Schools, 430 Mich 658, 666; 425 NW2d 80 (1988). In addition, the plaintiff must be without an adequate legal remedy. Cyrus v Calhoun Co Sheriff, 85 Mich App 397, 399; 271 NW2d 249 (1978). A trial court’s decision to grant a writ of mandamus will not be reversed absent an abuse of discretion. The trial court’s findings of fact underlying the granting of the writ will not be disturbed unless clearly erroneous. Michigan Waste Systems, Inc v Dep’t of Natural Resources, 157 Mich App 746, 760; 403 NW2d 608 (1987), lv den 428 Mich 900 (1987).
Defendants argue that plaintiff’s otherwise existing right to a tenure hearing was abrogated because, under common law, defendants had the right to rescind plaintiff’s contract upon learning that plaintiff had lied during his preemployment interviews. In support of this position defendants rely primarily oh Morgan v American University, 534 A2d 323 (DC App, 1987).
In Morgan, the plaintiff applied for a "tenure-track” faculty position with American University but failed to disclose that he already held a position at another university. Upon discovering this fact, American University rescinded the plaintiff’s contract without complying with the contractual notice and hearing procedures set forth in the faculty manual. Id., p 324. The Morgan court held that the common-law right to rescission was not abrogated by the notice and hearing provisions in the plaintiff’s contract. Therefore, the university could rescind the plaintiff’s contract. Id., pp 330-331.
Morgan is distinguishable in two material respects. First, in Morgan the plaintiff conceded that, in his preemployment interview, he did not inform the university that he was employed at another school. In the instant case, plaintiff denied that he ever admitted to his accusers that, while employed at the University of Toronto, he had sexual relations with numerous former patients. Thus, unlike in Morgan, in the instant case a dispute exists as to the underlying facts relied upon by defendants to justify an exercise of the common-law right of rescission.
Second, Morgan involved a private university, whereas the instant case involves a public university. This distinction is crucial. Procedural due process guarantees apply only in the presence of a "property” or "liberty” interest within the meaning of the Fifth or Fourteenth Amendment. Williams v Hofley Mfg Co, 430 Mich 603, 610; 424 NW2d 278 (1988), reh den 431 Mich 1202 (1988), app dis 489 US 1001; 109 S Ct 1102; 103 L Ed 2d 168 (1989). Any right to continued employment enjoyed by an employee of a private employer arises out of the employment contract. Such contractual rights do not rise to the level of a pro tected property interest. Morgan, 534 A2d 331; See also Matulewicz v Governor, 174 Mich App 295, 304; 435 NW2d 785 (1989), lv den 434 Mich 866 (1990). However, a public employee enjoys a property right in continued employment which the state may only take away in accordance with due process. Michigan State Employees Ass’n v Dep’t of Mental Health, 421 Mich 152, 160-161; 365 NW2d 93 (1984). This includes tenured professors employed by a public university. Bd of Regents of State Colleges v Roth, 408 US 564; 92 S Ct 2701; 33 L Ed 2d 548 (1972). Therefore, plaintiff, as a public employee and tenured professor, enjoyed a greater right to continued employment than did the privately employed plaintiff in Morgan.
Having distinguished Morgan, we find the United States Supreme Court’s decision in Cleveland Bd of Ed v Loudermill, 470 US 532; 105 S Ct 1487; 84 L Ed 2d 494 (1985), dispositive.
In Loudermill, the plaintiff, a public employee, was terminated from his position as a security guard after the school board discovered he had falsely stated on his employment application that he had not been convicted of a felony. He received no pretermination hearing. However, a posttermination hearing was held. Id., p 535. The Supreme Court held that some kind of pretermination hearing was required to comply with due process. Id., pp 542-548.
The board of education’s argument that Louder-mill had no property right because he obtained his employment by lying was rejected in a footnote early on in the opinion:
The Cleveland Board of Education now asserts that Loudermill had no property right under state law because he obtained his employment by lying on the application. It argues that had Loudermill answered truthfully he would not have been hired. He therefore lacked a "legitimate claim of entitlement” to the position.
For several reasons, we must reject this submission. First, it was not raised below. Second, it makes factual assumptions—that Loudermill lied, and that he would not have been hired had he not done so—that are inconsistent with the allegations of the complaint and inappropriate at this stage of the litigation, which has not proceeded past the initial pleadings stage. Finally, the argument relies on a retrospective ñction inconsistent with the undisputed fact that Loudermill was hired and did hold the security guard job. The Board cannot escape its constitutional obligations by rephrasing the basis for termination as a reason why Louder-mill should not have been hired in the first place. [470 US 539, n 5. Citation omitted.]
Accordingly, we conclude that plaintiff in the instant case, like Loudermill, had constitutional property rights which could only be terminated by procedures that met due process. Defendants’ reliance on the rescission doctrine is a "retrospective fiction” that cannot be interposed to justify a deprivation of property without due process. Therefore, plaintiff had a clear right to be returned to his employment and to be terminated only in conformity with defendants’ policy on dismissal of tenured faculty for cause. Defendants had a concomitant duty to perform the same.
ii
DID THE PRETERMINATION PROCEDURE FOLLOWED IN THE INSTANT CASE AFFORD PLAINTIFF DUE PROCESS?
Defendants next argue that even if they were required to afford plaintiff due process, they were not necessarily required to afford plaintiff the due process set forth in that portion of the faculty handbook entitled "Dismissal of Tenured Faculty for Cause.” According to defendants, the nearly three-hour meeting between Provost Scott and plaintiff and his attorney satisfied the due process required by Loudermill. We disagree.
In support of their claim, defendants cite the following language from Loudermill:
The tenured public employee is entitled to oral or written notice of the charges against him, an explanation of the employer’s evidence, and an opportunity to present his side of the story. To require more than this prior to termination, would intrude to an unwarranted extent on the government’s interest in quickly removing an unsatisfactory employee. [470 US 546. Citations omitted.]
The flaw in defendants’ claim is the conclusion that, in so ruling, the Court in Loudermill held no posttermination hearing need be provided. The Loudermill decision clearly provides that the minimal pretermination procedure which it outlined is not alone adequate to satisfy due process. The Court noted that it had formerly stated that " '[t]he formality and procedural requisites for the hearing can vary, depending upon the importance of the interests involved and the nature of the subsequent proceedings.’ ” Loudermill, 470 US 545, quoting Boddie v Connecticut, 401 US 371, 378; 91 S Ct 780; 28 L Ed 2d 113 (1971). The Court stated that the pretermination hearing "need not definitively resolve the propriety of the discharge. It should be an initial check against mistaken decisions . . . .” 470 US 545. The Court also said that its decision "rests in part on the provisions in Ohio law for a full post-termination hearing.” 470 US 546.
Further, subsequent federal decisions affirm that a posttermination hearing is required if the public employer elects to grant only a Loudermill-type pretermination hearing. See, e.g., Crocker v Fluvanna Co Bd of Public Welfare, 859 F2d 14, 16-17 (CA 4, 1988); Gillard v Norris, 857 F2d 1095, 1099 (CA 6, 1988).
Because plaintiff was provided no posttermination process, plaintiff was denied, without due process, his property right to continued employment, contrary to defendants’ claim.
hi
WAS MANDAMUS IMPROPERLY ISSUED BECAUSE IT WAS BASED ON DISPUTED FACTS?
Defendants argue that mandamus is precluded because a factual dispute exists as to whether plaintiff lied in his preemployment interviews and whether he subsequently admitted to Weston and Williams that he had sexual relations with several former patients while employed at Toronto.
Defendants are correct that mandamus may not be issued where disputed facts exist. Lepofsky v Lincoln Park, 48 Mich App 347; 210 NW2d 517 (1973). However, to place the trial court’s actions in proper perspective we need to distinguish between issuing mandamus "based on disputed facts” and issuing mandamus where some of the facts are disputed. The trial court’s decision in the instant case was based on the latter and not the former. The court’s decision was based on the facts that plaintiff was hired as a tenured faculty member and was discharged in noncompliance with the established procedures applicable to the termination of tenured faculty. These facts were undisputed. They were also the only facts relevant to a determination whether mandamus should issue, given our resolution of defendants’ first issue, supra. Whether plaintiff lied in his preemployment interviews or pretermination interviews and hearing may be relevant in any tenure termination hearing, should the university initiate any such proceeding, but it was neither relevant to nor the basis of the trial court’s decision to issue the writ.
iv
WAS THE ISSUANCE OF MANDAMUS PRECLUDED BECAUSE PLAINTIFF HAD OTHER ADEQUATE LEGAL AND EQUITABLE REMEDIES?
Defendants also argue that mandamus wrongly issued because plaintiffs claims were based on contract rights and plaintiff had other adequate legal and equitable remedies available.
Where the right or duty sought to be enforced rests wholly on contract, mandamus cannot issue to enforce it, because legal and equitable remedies afford relief. See Clark v Peninsular Building & Loan Ass’n, 268 Mich 584; 256 NW 556 (1934).
Plaintiffs claim rests on more than his contract with the university. It also rests on defendant university’s declared policy that tenured faculty may only be dismissed following a full adversarial hearing at which the accused may cross-examine his accusers and bring in witnesses in his own defense.
Further, as noted earlier in this opinion, plaintiffs right is more than contractual; as a tenured professor at a public university, plaintiffs right to continued employment is a property interest safeguarded by due process. Roth, 408 US 576-577. See also Matulewicz, 174 Mich App 304. While mandamus does not lie to enforce a mere contract right, under appropriate circumstances, such as those arising in the instant case, it does lie to enforce a property right.
Moreover, we are unpersuaded that, given the circumstances of this case, alternate legal remedies available to plaintiff, such as injunctive relief, would be truly adequate. At the show cause hearing, plaintiff testified that his career would be severely damaged if his termination were permitted to stand while he pursued a final determination of the matter. Additionally, temporary loss of a constitutional right constitutes irreparable harm which cannot be adequately remedied by an action at law. Chicago Teachers Union v Hudson, 475 US 292; 106 S Ct 1066; 89 L Ed 2d 232 (1986).
Plaintiffs situation is clearly distinguishable from the situation in Oakland Co Bd of Rd Comm’rs v State Highway Comm, 79 Mich App 505; 261 NW2d 329 (1977), lv den 402 Mich 907 (1978), a case relied upon by defendants. There, neither a person’s reputation nor a constitutional interest were involved.
Accordingly, we conclude that the trial court did not abuse its discretion in issuing the writ.
v
SHOULD THE COURTS DEFER, ON PUBLIC POLICY GROUNDS, TO THOSE RESPONSIBLE FOR ACADEMIC ADMINISTRATION?
Lastly, defendants advance a public policy argument that courts should defer to those responsible for academic administration, particularly where, under Const 1963, art 8, § 5, the educational unit is an autonomous constitutional authority. Support for this argument appears in Parate v Isibor, 868 F2d 821, 826 (CA 6, 1989), where the court stated:
Academic freedom thrives not only on the robust and uninhibited exchange of ideas between the individual professor and his students, but also on the "autonomous decisionmaking [of]. . . the academy itself.” [Quoting Regents of the University of Michigan v Ewing, 474 US 214, 226, n 12; 106 S Ct 507; 88 L Ed 2d 523 (1985).]
We have no quarrel with the general principle that academic freedom thrives on the uninhibited exchange of ideas between a professor and his students, but we do quarrel with the conclusion that, in the instant case, the autonomous decision-making of the university itself would promote academic freedom. After all, it was the autonomous decision of the university to hire plaintiff with tenure. In our opinion academic freedom is better promoted by holding the university to that position, rather than affording defendant university the convenience of common-law rescission, thus avoiding the possible embarrassment to the university stemming from its initial autonomous decision.
The university raises the following hypothetical case of the danger created if an educational institution is not permitted to rescind an employment contract with tenure guarantees obtained by misrepresentation. If the university were to learn that professor X, a tenured surgeon, had falsely presented that he had attended medical school, when he actually had not, untold harm would flow if professor X’s contract could not be immediately rescinded without the delay of waiting for a faculty committee to hold a tenure termination hearing. We disagree.
The hypothetical danger posed is exaggerated. Paragraph 11(b) of defendant university’s policy on dismissal of tenured faculty for cause reads in pertinent part:
The faculty member may be relieved from any or all academic duties during the proceedings at the discretion of the president, if recommended by the provost.
For all of the foregoing reasons, we affirm the decision and order of the Ingham Circuit Court. However, our decision does not, and should not, imply that plaintiff may not be discharged and his contract cancelled. Our decision means only that plaintiff may not be discharged and his contract cancelled unless cause for dismissal is established at a full due process hearing provided in accordance with the university’s policy for dismissal of tenured faculty for cause.
Affirmed. No costs, a question of public importance being involved.
On February 3, 1989, defendant Board of Trustees met in closed session and issued minutes which stated in part:
The Board heard from the Provost with regard to the matters contained in the memorandum, considered the advice of counsel and the course of action recommended by the Provost which was concurred in by the President and upon unanimous vote authorized the Provost to proceed with the rescission of Dr. Garner’s contract.
Plaintiff contacted the Faculty Grievance Officer, who advised that the appropriate grievance channel was the University Committee on Faculty Tenure. Plaintiff and the grievance officer filed written requests to the Chair of the Faculty Tenure Committee to hear plaintiff’s case. By letter dated March Í6, 1989, plaintiff and the grievance officer were advised the committee declined to hear the case on grounds the matter was best left for the courts to decide. | [
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Fellows, J.
The parties to this suit are brothers. Before the transaction here involved they had been associated together with one Woodrow as partners in the construction of a sewer in Port Huron; the corn-tract in that instance having been awarded to plaintiff and Woodrow but was carried) out by the three. It is plaintiff’s claim that he and defendant were in partnership in constructing a section of another sewer known as the Nine-Mile Halfway drain, and this bill is filed for an accounting of such partnership. It is practically without dispute that general contracting in Port Huron had reached a point where it was not very profitable, and it is practically without dispute that defendant suggested both to plaintiff and another brother that they get out of the general contracting business and get into the bigger and more profitable business of contracting for sewer and paving construction, and that it was suggested that they form a partnership for that purpose. It is plaintiff’s claim that some time after this talk defendant came to his office with the plans of the drain in question, and suggested that they look them over and go in together in bidding on, and if successful, constructing some of the sections of the drain, and that he accepted the proposition. His testimony establishes the partnership agreement. In this he is supported by the testimony of his wife and bookkeeper. Defendant’s version is as follows:
“That evening we went — I went into James O’Sullivan & Sons Company office, and as I remember it, in the outer office Mrs. O’Sullivan and her daughter, Kathleen, and Miss Morgan were there, and I passed the time of day with them and inquired of them where Jim was, and they told me he was in the private office, and I went in and I said to Jim, I said, T have got a set of plans of a sewer in Macomb county’ and at that we spread the plans' on the table and looked them over and sort of got the thing arranged in our minds what it was all about, different sections; we talked, -I remember, about the depth of the sewer and then we talked about the possibilities of this kind of work, and I said to Jim, I said, ‘Well, what do you say we go together and figure this job, figure it over.’ He said, ‘All right.’ ”
The parties did figure together. There were six sections of the drain. Sections A and B involved large contracts. Section E was a small one. Plaintiff claims it was finally agreed that they should bid on B and E, and bids were accordingly prepared, the bid on B being signed by defendant and the one on E by plaintiff. Each furnished.the necessary certified check to accompany the bid. The bid on E was too high; that on B was low, and on May 20, 1926, the contract was awarded defendant to construct B at the price of $285,628.50. A few days after this plaintiff failed to meet defendant „at a Detroit hotel, due, as he claims, to his machine getting stuck in the mud on his way there. They had some words over this incident. Defendant claims that any tentative arrangement for a partnership- they had then came to-an end. Plaintiff denies this. A few days later they received a telegram announcing the death of a sister in California and were much together in the succeeding days arranging for the funeral. We are satisfied they also discussed and arranged for work on the ' contract.-
We are satisfied that defendant devoted more time to the job than did the plaintiff; he also- financed it. Plaintiff claims that in recognition of this the contract was modified so that plaintiff was to- have a third interest and defendant two-thirds. But we are not satisfied that plaintiff gave the job as little attention as some of defendant’s employees, who were witnesses, claim. Indeed, if we accept the testimony of some of these employees at par, each of them was solely responsible for the success of the enterprise and plaintiff assisted in no way. The testimony of disinterested witnesses, those who were not at the time associated with either of the parties, preponderates in favor of the plaintiff. One disinterested witness who wanted to furnish the cement testifies that plaintiff told him “he had nothing to- do with that work, and I would have to see Alf. in regard to the cement,” and two testified that defendant told them plaintiff was in partnership with him. Due allowance usually must be made for the conflict which arises in the testimony of different witnesses. Plaintiff’s testimony and that of his witnesses conflicts with defendant’s testimony and that of his witnesses. The testimony of defendant’s witnesses is, however, quite largely negative. Plaintiff was not on the job all the time, but his testimony showing an intimate knowledge of the difficulties which arose from time to time and the manner of their solution is quite satisfying that he was on the job when needed, when there were problems to solve, and aided his brother in their solution.
Defendant somewhat grudgingly admits that plaintiff performed services in connection with the obtaining and execution of the contract. He admits they were of value. He does not seriously controvert the claim that plaintiff has something coming from him, but insists that he should fix the amount and that it should not be measured on the theory that a partnership existed.
There are no questions of law involved. The case presents only questions of fact. The record is voluminous, the briefs very full. In 55 pages of brief plaintiff’s counsel marshal the facts sustaining their client’s claim. In 66 pages of brief defendant’s counsel perform a like duty for their client. Patently we can not within the reasonable compass of an opinion review all or any considerable portion of the detail of these claims. Nor would it profit the parties or the profession so to do. They have received full attention at our hands and each has been weighed and measured against the other. We have read the record with care. From a consideration of everything before us, we reach the conclusion that there was a partnership between these brothers and that plaintiff is entitled to an accounting.
The decree will be affirmed with costs of this court.
North, Wiest, Clark, McDonald, and Sharpe, JJ., concurred.
The late Chief Justice Flannigan did not sit.
The late Justice Bird took no part in this decision. | [
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] |
Potter, J.
Prior to 1925, William Mergeon and Maude Mergeon, his wife, owned a farm in Tuscola county and considerable personal property. They sold the farm and personal property to Frank Fleisher, Frank Fleisher, Jr., Lillian Judd, and Fred Judd for $16,000. The vendors, by the contract, retained title to the personal property; $3,000 was paid down. The contract provided for annual payments of $200 or more. When the principal was reduced to $10,000 the vendors were to release the title to the personal property. Plaintiff traded a rooming house in Saginaw for the farm and personal property which had already been sold on the contract above mentioned. At the time plaintiff purchased the land, William Mergeon and Maude Mergeon, the vendors in the contract, assigned and transferred to her all of their interest in the contract in question. J. W. Saylor owed Jesse Lamos, who sued Saylor and recovered a judgment. Lillian Judd, Floyd Judd, Frank Fleisher, and Frank Fleisher, Jr., transferred their interest in the land contract to Saylor, who obtained for a nominal consideration a bill of sale of the personal property executed by Frank Fleisher and Frank Fleisher, Jr.
In March, 1926, plaintiff heard the stock and tools had been removed from the farm. She visited it and found a notice of sheriff’s sale of personal property posted on the premises. Defendant Colling was sheriff of Tuscola county. The other defendants were his bondsmen. The personal property was subsequently sold in bulk for $1,000 by the sheriff under execution issued from the circuit court of Genesee county in the suit of Lamos against Saylor. Plaintiff brought suit in trespass on the case against the sheriff and his bondsmen for the conversion of the personal property. There was verdict for plaintiff of $1,600. A motion was made by defendants for judgment notwithstanding the verdict. This motion was denied and a judgment rendered for plaintiff. A motion was made by defendants for a new trial. This was denied. Saylor was a race-horse trainer with no particular place of residence. He was not a witness on the trial. There is no proof he was a purchaser in good faith for a valuable consideration, within the meaning of section 11988, 3 Comp. Laws 1915. There was ample proof to sustain the judgment.
It is affirmed.
Fead, C. J., and North, Fellows, Wiest, Clark, McDonald, and Sharpe, JJ., concurred. | [
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] |
Wiest, J.
The bill herein was filed to set aside findings of the board of labor and industry, under the workmen’s compensation law, on the sole ground of newly-discovered evidence. Upon motion of defendants the bill was dismissed for want of jurisdiction in the court of equity. Plaintiffs appealed.
For the purposes of decision we accept as true every well-pleaded averment of fact stated in the bill. No fraud is alleged. The question is whether findings of fact, made by the board acting within its powers, can be set aside by the court of equity upon the ground of newly-discovered evidence.
Section 5465, 2 Comp. Laws. 1915, provides:
_ “The findings of fact made by said industrial accident board (now board of labor and industry) acting within its powers, shall, in the absence of fraud, be conclusive, but the. Supreme Court shall have power to review questions of law involved in any final decision or determination of said industrial accident board.” * * *
The alleged newly-discovered evidence, of course, relates to the findings of fact made by the board. The board acted within its power and the findings, upon the evidence submitted, are not questioned. Plaintiffs’ rights and remedies and defendants’ liability, if any, are wholly under the workmen’s compensation law. Plaintiffs failed to present evidence justifying an award to them. No review by certiorari was sought.
The workmen’s compensation law is a departure, by statute, from the common law, and its procedure provisions speak all intended upon the subject. Rights, remedies, and procedure thereunder are such and such only as the statute provides. If the statute is short of what it should contain in order to prevent injustice, the defects must be cured by future legislation and not by judicial pronouncement. The statute makes the findings of fact by the board conclusive in the absence of fraud, and the exception states a limitation to the exclusion of all other considerations. The board has no power to grant a rehearing of its determinations. Martilla v. Quincy Mining Co., 221 Mich. 525 (80 A. L. R. 1249), and cases there cited. The court of equity may relieve against actual fraud by setting aside an award. Smith v. Port Huron Gas & Electric Co., 217 Mich. 519, 222 Mich. 350; American Life Ins. Co. v. Balmer, 238 Mich. 580. But the court of equity may not set aside the award or findings of fact of the board of labor and industry by reason of newly-discovered evidence. The limitation in the statute, to instances of fraud, is too plain to admit of such consideration. It is a general rule, “that the, affirmative description of the cases in which the jurisdiction may be exercised implies a negative cn the exercise of 'such power in other cases.” In re Heath, 144 U. S. 92 (12 Sup. Ct. 615).
Rules of law and procedure, applicable to common-law actions, may not be considered in construing the workmen’s compensation act, for such act is in derogation of the common law and substitutes its own code of procedure, inclusive of review. See Andrejwski v. Wolverine Coal Co., 182 Mich. 298 (Ann. Cas. 1916D, 724).
We are asked to consider the general jurisdiction of the court of equity, as declared by the Constitution of the State, judicial pronouncements of powers in tended and exercised, and the history of its establishment and its jurisdiction tc right wrongs, and, from such general considerations, say that the legislature did not intend to limit the power of the court of equity to set aside an award only on the ground of fraud. All such argument is answered by the following from 25 R. C. L. p. 958:
“When the meaning of a law is evident to go elsewhere in search of conjecture in order to restrict or extend the act woúld be an attempt to elude it, a method which, if once admitted, would be exceedingly dangerous, for there would be no law, however definite and precise in its language, which might not by interpretation be rendered useless. In such a case arguments from the reason, spirit, or purpose of the legislation, from the mischief it was intended to remedy, from history or analogy for the purpose of searching out and justifying the interpolation into the statute of new terms, and for the accomplishment of purposes which the lawmaking power did not express, are worse than futile.”
The decree dismissing the bill is affirmed, with costs to defendants.
Fead, C. J., and North, Fellows, Clark, Potter, and Sharpe, JJ., concurred. McDonald, J., did not sit. | [
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] |
Wiest, J.
The city of Lansing functions under a so-called home-rule charter. The common council, assuming power under the provisions of Act No. 207, Pub. Acts 1921 (Comp. Laws Supp. 1922, § 3480 [3-11]), by ordinance, created a zoning system. The city attorney, acting in concert with private owners of property, filed a bill in the circuit court for the county of Ingham, in chancery, and obtained a temporary injunction, restraining plaintiff in this proceeding from constructing a building in alleged violation of such ordinance. The circuit judge held the ordinance valid and the mentioned statute constitutional, and, upon motion, refused to dissolve the injunction. We review by mandamus.
Under the return of the circuit judge two questions of law are presented:
(1) Has the city power under the statute, without amendment of its charter, to enact a zoning ordinance ?
(2) Is Act No. 207, Pub. Acts 1921, unconstitutional?
The mentioned statute is permissive only. Does it empower action by ordinance, or merely authorize a charter amendment and then enactment of an ordinance? We think it confers power and requires no charter amendment. This court has steadfastly maintained the right of local self-government. Attorney General v. Detroit Board of Education, 225 Mich. 237. A statute permitting enlarged municipal governmental power constitutes no meddling with local government. The measure of local self-government is enlarged by the power granted, but the statute is quiescent until enacted into local law by local authority. It is fundamental that the legislature has power to delegate to cities authority to enact such ordinances as are essential or incident to local governmental functions. The permissive power granted by the statute was not an amendment of the charter, neither did it require adoption by charter amendment to authorize enactment of the ordinance. Zimmerman v. Town of Bedford, 134 Va. 787 (115 S. E. 362). We quote from that case:
“Did the town of Bedford have the authority to adopt the ordinance under which the conviction was had in this case, so as to make the ordinance valid?
“Section 4617 of the general law conferred the authority upon the town to adopt the ordinance, so that the question must be answered in the affirmative.
“The position is taken in argument for the accused that to so hold is to hold that the existing charter of the town has been amended by general legislation, whereas it is contended that section 117 of the Virginia Constitution ‘prohibits the amendment of existing charters except by special legislation.’ There is a two-fold error in this position. In the first place, for the legislature, by general law, merely to confer upon towns powers in addition to their charter powers, does not amend their charters. Secondly, section 117 of the Constitution expressly provides that ‘general laws for the organization and government of cities and towns shall be enacted by the general assembly.’ ” * * *
The Constitution of Michigan, Art. 8, § 21, grants power to each city to frame, adopt, and amend its charter and “through its regularly constituted authority, to pass all laws and ordinances relating to its municipal concerns, subject to the Constitution and general laws of this State.” The zoning ordinance was in conformity with, and, therefore, subject to, the general law on that subject. If the statute is valid, the power to enact a zoning ordinance was in the city council. We understand the charter ordinance powers of the city were framed under the provisions of section 4, Act No. 279, Pub. Acts 1909. That section was amended by Act No. 348, Pub. Acts 1921, § 1, subd. x (Comp. Laws Supp. 1922, § 3307), permitting a charter to provide:
“For the establishment of districts or zones within which the use of land and structures, the height, the area, the size and location of buildings and required open spaces for light and ventilation of such buildings and the density of population may be regulated by ordinance: Provided, That such regulations in one or more districts may differ from those in other districts.”
The point is made that this statute is in recognition of the'need of amendment of the charter in order to acquire the power and save to the electors within a city the right to determine whether or not the charter thereof shall be amended to grant such additional powers, and that:
“Act No. 207 of the Public Acts of 1921 is'invalid, at least so far as being applicable to ‘home-rule’ cities, and an ordinance adopted under the provisions thereof would be invalid and ineffectual to create any rights, duties, or obligations on the city or residents thereof.”
It is also claimed that Act No. 207 and Act No. 348 are in conflict in that the first purports to grant power, without charter amendment, and the second provides for charter amendment before exercise of the power, and we are asked to give both acts effect by confining the first to cities not operating under home rule and the second to home-rule cities. We cannot do so. We have no hesitancy in saying that Act No. 207 enlarged the powers of all cities, and the fact that Act No. 348 permits of a charter amendment does not change our view. Both acts may serve, although the latter was quite unnecessary.
It is also contended that Act No. 207 is unconstitutional because it has more than one object or purpose, in that it—
“attempts to confer powers upon both cities and villages to adopt so-called zoning ordinances; that is to say, it attempts to amend or add to the general statutes applying to cities and villages, and confer upon each of them power to adopt zoning provisions, which, as we construe it, is a double object or purpose.”
We are not so impressed.
It is also urged that Act No. 207—
“amends the State housing code by regulating the height, area, size and location of buildings in such districts. In other words, it attempts to permit a city or village to adopt an ordinance creating districts to regulate various occupations and business, and also to adopt ordinances amending or changing the housing or building code, which we contend is also a double object.”
This objection seems to be aimed at the following provision of section 6 of the act:
“Whenever the provision of any ordinance or regulations, adopted by the legislative body of any city or village under the provisions of this act,, impose requirements for lower heights of buildings, or a less percentage of lot that may be occupied, or require wider or larger courts or deeper yards than are imposed or required by existing provisions of law or ordinance, the provisions of such local ordinance or regulation-adopted under the provisions of this.act shall govern. Where, however, the provisions of the State housing code or other ordinances or regulations of any city or village impose requirements for lower heights of buildings or less percentage of lot that may be occupied, or require wider or larger courts or deeper yards than are required by any ordinance or regulation which may be adopted by the legislative body of any city or village under the provisions of this act, the provisions of said State housing code or other ordinance or regulations shall govern.”
That section, even if void (and we do not say it is), would not render the whole act invalid. It will be time to construe the section when it is before us in a case.
We have discussed the questions considered in the circuit and find no occasion to- direct the circuit judge to dissolve the injunction.
Plaintiff herein desires, if the injunction is continued, to have an order requiring plaintiffs in the chancery suit to give bond to pay damages. We must decline to make such an order.
The writ of mandamus is denied, with costs against Henry A. Dawley.
North, Fellows, Clark, McDonald, Potter, and Sharpe, JJ., concurred. Fead, C. J., did not sit. | [
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McDonald, J.
This case was tried before the court without a jury. Judgment was rendered for the plaintiff. No request for findings of fact and of law was filed as required by Circuit Court Rule No. 45. No findings were filed. There is nothing before this court for review. Alexander Co. v. Griggs, 240 Mich. 71; Evangelist v. Falzerano, 241 Mich. 62; Wormley v. Grand Rapids Trust Co., 232 Mich. 680.
The judgment is affirmed, with costs to the plaintiff.
North, Fellows, Wiest, Clark, and Sharpe, JJ., concurred.
Chief Justice Flannigan and the late Justice Bird took no part in this decision. | [
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Wiest, J.
Plaintiff brought a summary proceeding, before a circuit court commissioner, to recover possession of premises for the nonpayment of rent, and obtained a judgment of restitution. Defendants appealed to the circuit court, and, upon trial before the court without a jury, there was a finding of no rent due, and judgment was rendered in favor of defendants. Plaintiff reviews by writ of error.
Plaintiff contemplated the erection of a building in the city of Detroit, and, before construction was started, entered into a written lease of the second floor to defendants, to commence when the building was ready for occupancy. The lease was executed November 6, 1926, and we quote so much thereof as bears upon the points involved in this review:
“To' have and to hold the said premises unto the lessees for the term beginning on the first day of June, A. D. 1927, and ending on the last day of May, A. D. 1942 (or until the said term shall sooner cease under the provisions hereof).
“It is understood that if the lessees shall be unable to enter into and occupy the premises hereby leased at the time above provided by reason of the said premises not being ready for occupancy, * * * the lessor shall not be liable in damages to the lessees therefor, but during the period the lessees shall be unable to occupy the said premises as hereinabove provided, the rental therefor shall be abated.”
Construction of the building commenced in February or March, 1927, and was in progress on June 1, 1927. The lease was for use of the premises for a bowling alley, billiard room, cigar store, and lunch counter. Defendants ordered their equipment and the same arrived by rail before the completion of the building, and, they claim,- plaintiff granted them leave to move the same, into the building and have workmen make installation thereof. Plaintiff claimed rent for the months of July and August, 1927, and, defendants refusing to pay, this proceeding was brought.
Counsel for plaintiff claim that a lease, required to be in writing, cannot be modified by a verbal agreement, while counsel’ for defendants say. there was no modification, but merely a mutual understanding upon the subject of occupancy. If, before the building was ready for occupancy under the terms of the lease, plaintiff consented that defendants might start to install their equipment, then defendants’ occupancy did not come within the terms of the lease until such time as the building was completed, or so nearly finished as to render it fit for the use and occupancy specified.in the lease. This was the contention of the defendants and the finding of the trial judge.
Plaintiff claimed the rent commenced on July 1st, and. defendants that the building was not ready for use and occupancy under the lease until the first of September. Defendants paid two months’ rent, and, if the building was not ready for use until September 1st, they were not in default in the payment of rent under the lease and plaintiff had no right of recovery. If the premises were ready for the rented use on July 1st, then defendants were in default in the payment of rent, and the judgment in the circuit should be reversed.
The defense made did not violate the rule that the lease could not be varied by parol agreement. The lease did not become operative, under its terms, until the building was ready for occupation and use for the rented purpose, and, if not so ready and plaintiff consented to installation of defendants’ equipment therein, there was no change in the terms of the lease but only an agreement covering an entry for a special purpose prior to occupancy under the lease. This was permissible, and, if agreed to, bound plaintiff. The evidence sustains the finding of the circuit judge that the agreement claimed by defendants was made, and, up 'to September 1st, the lease did not become operative.
Judgment affirmed, with costs to defendants.
Fead, C. J., and North, Fellows, Clark, McDonald, Potter, and Sharpe, JJ., concurred. | [
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] |
Clark, J.
The following is quoted from the opinion of the trial court:
“The bill of complaint was filed in this cause for specific performance of an agreement to exchange real estate. Issue was joined and proofs taken in open court. The proofs show that the plaintiffs owned a farm and the defendants owned a house and lot, that in each instance the title was held by the entireties, and that plaintiffs desired to exchange their farm for the house and lot. A written agreement was prepared and was signed by all of the parties, except the defendant Gertrude Vanden Bosch. She was not asked to sign the written agreement. She knew of all the terms of the agreement of exchange in so far as same affected 'her rights. With this knowledge she attended the sale of the personal property held on the farm of the plaintiffs, and her husband bought some $570 worth of personal property at the sale. She talked with the plaintiffs in regard to making an exchange of some of the household property. She bought one article of personal property of the plaintiffs to be used in the house that was exchanged for the farm. On the day of the sale she asked the plaintiffs if they could move the next, day, so that defendants might take possession of the farm. Later she ordered a moving van and,'in the absence of her husband, directed the moving of their household furniture to the farm. She went to the farm, settled the “household furniture and established their home there. All this was done without any objection- or protest on her part to anyone. After the defendants had moved onto the farm, she was called on the telephone and asked to call at the real estate office and sign the deed of the house and lot, she promised to do so during the afternoon, but did not call at the office. During the afternoon a. windstorm blew the barn down and afterwards when requested to sign the deed she refused to do so. Upon the trial she frankly admitted that she would have signed the- deed as requested if the barn had not blown down. The testimony shows that she agreed to exchange, and that she should carry out the terms of the agreement.”
The plaintiffs made and executed a deed of the farm to defendants and delivered it as contemplated to the broker who acted in this matter for both the parties. Plaintiffs suffered loss by reason of the sale of farm chattels and in preparation to leave the farm. They were to give $300 to boot on the exchange. Defendants purchased and took chattels at the sale, of the total sale price of $570, of which it was agreed $300 was to be in payment of the boot. Plaintiffs have paid the full price and have taken and kept possession of the house and lot. Defendants took possession of the farm and they accepted payment of the boot. Plaintiffs had decree. Defendants have appealed.
No question of homestead is raised or discussed in the case. The first contention is that the plaintiffs' have failed to establish a clear definite agreement on the part of Mrs. Vanden Bosch to convey. The agreement admittedly signed by her husband is definite enough. The record shows that she assented to it, orally agreed to convey, to make the agreed exchange. We are in accord with the finding of the trial judge.
Plaintiffs have performed the agreement on their part, and are in such a situation, as the record discloses, that the nonenforcement of the agreement, as to them, would be a fraud. The case is therefore removed from the operation of the statute of frauds. Section 11975, 3 Comp. Laws 1915; 27 C. J. p. 343.
It is true that neither the wife nor the husband alone can contract effectually to sell property owned by them as tenants by the entireties. Way v. Root, 174 Mich. 418. But it is contended and proved here that both defendants, husband and wife, agreed to exchange —made the contract to exchange — one in writing, the other orally, and, as we have seen, the oral contract,. in the circumstances, is removed from the operation of the statute of frauds, and therefore the contract or agreement with respect to both defendants is valid and existing. In principle and in this regard the case would not be different if the defendant wife had indorsed her assent in writing on the agreement signed by the remaining parties.
In Stenson v. Elfmann, 29 S. D. 59 (135 N. W. 694), and in Schwoerdfeger v. Kelly, 223 Pa. 631 (72 Atl. 1056), the husband had signed the contract and the wife had not. Specific performance was refused, but it is indicated that the wife might have been held had the evidence established as to her an oral contract to convey.
In Agar v. Streeter, 183 Mich. 600 (Ann. Cas. 1916E, 518), the wife’s name was omitted from the body of the instrument which she with her husband had signed, held, not fatal to an option to convey contained in the instrument. In Bovine v. Selden, 155 Mich. 556 (130 Am. St. Rep. 579), the assignment of a land contract constituting a homestead by the husband, without the signature of the wife, was held effectual as the wife had voluntarily abandoned the homestead for another and the assignee had made improvements. See, also, Stotts v. Stotts, 198 Mich. 605.
No other question calls for discussion.
Decree affirmed, with costs to plaintiffs.
North, Fellows, Wiest, McDonald, and Sharpe, JJ., concurred.
Chief Justice Flannigan and the late Justice Bird took no part in this decision. | [
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McDonald, J.
This is an injunction suit to restrain the defendants from violating certain building restrictions and from resubdividing into smaller lots than platted a subdivision known as Brookside Park subdivision in the township of Farmington, Oakland county, Michigan. On the 29th of September, 1917, the defendants sold on land contract to the plaintiffs lot 7 of Brookside Park subdivision. The plat had not been recorded at that time and the lot was described in the contract by metes and bounds and also as “parcel 7, according to a private plat of Brookside, so called, subdivision.” The plat and contract contained restrictions against erecting any building except a private dwelling house to cost not less than $5,000 and to be constructed of stone, brick, and stucco with necessary outbuildings, etc.
The proposed plat contained 25 acresi divided into 13 lots, none of which contained less than one acre. The size of the lot purchased by the plaintiffs was 2.8 acres. After the sale to the plaintiffs, the defendants purchased 78 acres of land lying directly south of the 25-acre parcel. They combined the two parcels into one plat, which was recorded in December, 1917. It was all rural property. Before the plaintiffs bought their lot the defendants furnished them a blueprint of the proposed plat of the 25-acre parcel. It is also claimed by the plaintiffs that they were given a printed pamphlet or circular signed by Clarence J. Boldt reciting the advantages of buying acreage lots in a restricted subdivision such as the one in question. It is the claim of the plaintiffs that they bought lot 7 in reliance oh the building restrictions recited in the contract and on the representations of the defendants as to the size of the other lots in the proposed plat, and on their promise that no lots of the plat containing less than one acre would ever be sold; that they have built a home on their lot of the value of $25,000, and that the defendants are violating the building restrictions and now propose to resubdivide the plat into lots containing much less than an acre of land. To restrain them from so doing this bill was filed.
The defendants admit that they propose to resubdivide the plat into smaller lots; they admit that before the sale to the plaintiffs they furnished a blueprint of the proposed plat of the 25-acre parcel showing the size of the lots, none of which was less than one acre; but they deny that they gave them a pamphlet advertising the advantages of buying lots in rural subdivisions containing not less than one acre, or that they represented to the plaintiffs that they never would sell any lots of smaller size. After the temporary injunction was issued, the parties stipulated in writing to dissolve it as to all of the lots in the 78-acre portion of the plat. So on the hearing the controversy related to the 13 lots of the 25-acre parcel only. In his decree, the circuit judge removed the restrictions from all of these lots except lots 8, 9, 10, 11, and enjoined the defendants from resubdividing them into smaller lots. Both parties have appealed.
The evidence shows no real controversy concerning building restrictions. In his testimony, the defendant Clarence J. Boldt expressed his willingness to cooperate in enforcing these restrictions. The only question to be determined relates to the right of the defendants to resubdivide into smaller lots that portion of the plat comprising the 25-acre parcel.
We are not convinced by the evidence that before the sale of lot 7 the defendants furnished the plaintiffs with a printed circular or pamphlet representing the size of the lots to be sold. Such a pamphlet was circulated shortly thereafter, but it has no application to a prior purchase, was not relied on by the plain tiffs, and is without importance in this case. It is .an admitted fact that before the sale to the plaintiffs, ■the defendants furnished them with a blueprint of the proposed plat, showing the size of the lots, and that 'the sale was made with reference to this blueprint. ‘The claim of the plaintiffs that during the negotiations ■the defendants promised that no lots less than one acre .in size would be sold is disputed. Assuming that ;such a promise was made, and that the lot purchased by the plaintiffs was purchased according to the blueprint showing lots not less than one acre in size, do these facts entitle the plaintiffs to an injunction restraining the defendants from subdividing the remaining lots into smaller parcels?
This is not a suit to enforce the promise of the defendants. Its purpose is to impose a restriction not named in the contract on all of the remaining lots. The plaintiffs must rest their case on the theory that the defendants cannot resubdivide the remaining lots because they are impressed with a restriction against selling any containing less than one acre. There would be some merit in this contention if so restricting the size of the lots were part of a general plan for the development of the property. The best evidence that there was no such general plan is in the fact that this alleged restriction is not found in the plat or in the plaintiffs’ contract or in any of the contracts for the sale of other lots. It was not followed in the sale to the plaintiffs or to any other persons.
“It often happens that owners of land adopt a general scheme or plan for its improvement, dividing it into house lots, and insert in the deeds of the several lots uniform restrictions as to the purpose for which the land may be used, such restrictions upon each being intended for the benefit of the other lots. In such cases it is held that the owner of each lot has, as appurtenant to his lot, a right in the nature of an easement upon the other lots which he may enforce in equity.” Beals v. Case, 138 Mass. 138.
In the absence of a general plan restricting the lots to a certain size, equity will not impress, the restriction on all of the lots in the plat. And the fact that a lot was sold according to a blueprint of the proposed plat does not imply a covenant that the size of the remaining lots shall not be changed. In Herold v. Columbia, Investment & Real Estate Co., 72 N. J. Eq. 857 (67 Atl. 607, 14 L. R. A. [N. S.] 1067), the plaintiff filed a bill to restrain the resubdivision of lots remaining after his purchase which was made according to a map or plat showing lots of a specified size. He claimed that the lots were sold according to a general scheme for the development of the property, but he failed in his proof on that question-. In disposing of the issue, the court said:
“The failure to show the existence of such scheme is also fatal to the claim of the complainant that he is entitled to restrain the Ridgefield Land Company, and its successors in title, from selling its lands except in the parcels delineated upon the original map. No such covenant is implied by the making of such a map and the sale of certain of the lots shown thereon; and the right of the owner .to dispose of the unsold portion of his lots singly or in bulk, or by subdividing them into smaller parcels, and selling them in such parcels, is complete.”
In the instant case, there was no general plan adopted and followed for developing the plat by the sale of lots not less than one acre in size. Therefore, equity will not impose a restriction on the lots beyond that expressed in the plat and contracts. For these reasons, the plaintiffs are not entitled to an injunction restraining the defendants from dividing the remaining lots into smaller parcels.
The decree of the circuit court is reversed, and a decree will be entered in this court dismissing the plaintiff’s bill, with costs to the defendants.
Fead, C. J., and North,. Fellows, Wiest, Clark, Potter, and Sharpe, JJ., concurred. | [
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] |
Potter, J.
Plaintiff sued defendants in assumpsit to recover $14,173.41 and uncomputed interest. Judgment was rendered for $4,927.73 in favor of plaintiff and against defendants. They bring error.
Defendant Ohio & Michigan Coal Company was a corporation, all of the stock of which, except qualifying shares held by the plaintiff and a Mr. Baird, was owned by the defendant Cumm'iskey. Plaintiff began work for the defendant corporation in July, 1906, and continued until February 8, 1923. In 1908 plaintiff bécame secretary of the company, and in 1917 vice-president and general manager. The Ohio & Michigan Coal Company was a wholesale dealer in Detroit in hard and soft coal. It had no coal yards. It did business throughout the middle western States and in Canada. Coal was handled in car load lots only. When a sale was made the coal was ordered shipped direct from the mines to the purchaser, or, if the company had the coal rolling, it was diverted in transit to the customer. The company billed the cústomer for coal sold when it received the weights from the mines. This was generally from five days to two weeks after the coal was shipped. Mr. A. G. Baird was, during the period covered by this controversy, secretary of the Ohio & Michigan Coal Company in general charge of its books and accounting. Plaintiff and Mr. Baird were in direct charge of the company’s office and business. Defendant Cummiskey was at his own office in another building in Detroit. The officers of the defendant corporation frequently advised together. Defendant Cummiskey was the president of the Ohio & Michigan Coal Company. In January, 1921, on the eve of defendant. Cummiskey’s departure for Florida, two letters were written and signed as a memorandum agreement entered into between defendants and plaintiff, which letters were, at defendant Cummiskey’s suggestion, dated back to December 13, 1920, as follows:
“James P. Cummiskey Penobscot Bldg., Detroit.
December 13, 1920.
“Mr. E. C. Crowley,
“Ohio & Michigan Coal Co.,
“917 Dime Bank Bldg.,
“Detroit, Michigan.
“Dear Sir: As the owner of the major portion of the capital stock, and assets of Ohio & Michigan Coal Company, and the director of its policies Í hereby agree that a credit of $30,000 be placed to your account for the year 1920 in addition to all credits of previous years on the books of said company for good and efficient services since your association with me up to, and including December 31, 1920. This is done with the understanding that of this amount $15,000 will be permitted by you to remain in the treasury of said company in accordance with another agreement made with you this day until it is practical to re-organize Ohio & Michigan Coal Company or organize a new company for a capital of $100,000 when stock in the reorganized or new company will be issued to you fully paid up, at not to exceed par value to the amount of this $15,000, and you shall also at that time, or as soon thereafter as possible have the privilege of buying in the re-organized or new company at not to exceed par value an additional $17,000 worth of stock or any part of that amount at terms to be agreed upon.
“It is understood that if a re-organized or new company as herein purposed is not made or created on or before January 1, 1922, then the terms of the other agreement of this date herein mentioned are to be continued in full for one year, or until January 1, 1923, and if at that time a re-organized or new company is not made or created, then the $15,000 you are leaving in the treasury of the Ohio & Michigan Coal Company may be withdrawn by you at your option or by your heirs or assigns whereupon the understanding herein outlined together with our other agreement of this date herein mentioned will become null and void.
“Yours truly,
(Sgd.) “J. P. Cummiskey,
“Accepted and Satisfactory
(Sgd.) “E. C. Crowley.
“Witness: (Sgd.) R. L. Beasley.”
“James P. Cummiskey Penobscot Bldg. Detroit
December 13, 1920.
“Mr. E. C. Crowley,
“Ohio & Michigan Coal Co.,
“917 Dime Bank Bldg.,
“Detroit, Michigan.
“Dear Sir: In accordance with my letter to you of this date the terms of which you have agreed upon it is my desire with your assistance to convert the active' assets over and above $85,000 of Ohio & Michigan Coal Company into Liberty Bonds, or other securities as I may direct.
“The $85,000 that will remain under this plan as cash in the company plus the $15,000 which you in accordance with my letter above mentioned will leave in the treasury will give said Ohio & Michigan Coal Company an actual working fund of $100,000.
“The net profits of said Ohio & Michigan Coal Company for the year 1921, if any, will be divided and paid at the end of the year on a basis of 30% to you and 70% to me; you to permit, however, the deduction of interest at the rate of 6% per annum on an amount of $15,000 from your portion of the net profits since you on the theory of a $100,000 working fund will be drawing under this agreement profits on an investment the equivalent of $30,000, whereas the actual amount you are leaving in the treasury is but $15,000.
“My letter to you already referred to herein of this date is a part of this understanding.
“Yours truly,
(Sgd.) “J. P. Cummiskey,
“Accepted and Satisfactory
(Sgd.) “E. C. Crowley.
“Witness:
“B. c. Beasley.”
Plaintiff continued with the company under the contract during 1921 and 1922. The sales of coal during this period exceeded 1,000,000 tops a year. Defendant Cummiskey, the principal owner of the coal company, employed P. R. Beasley & Company, expert accountants, to examine the books and furnish accounts. They had been employed by defendant Cummiskey in previous years. The general ledger of the defendant company showed profits for the calendar year of 1921 of $33,602.54, and this amount was transferred from the profit and loss account of the defendant company to its surplus account.
April 23, 1923, defendant coal company, by de fendant Cummiskey as president and Mr. Baird as secretary, applied in writing to the Standard Accident Insurance Company of Detroit for a bond in the sum of $15,000 to be filed in a suit commenced by plaintiff against defendants, to which application was attached a copy of the tentative balance sheet of the defendant coal company prepared by its secretary, Mr. Baird, as of December 31, 1922, and of its balance sheet as of December 31, 1921, showing an increase in assets during the period between the two statements of $27,428.12. Mr. Wyman, a public accountant with P. R. Beasley & Company, made an audit of the books of the. coal company and prepared the balance sheet from the books and a statement of income and profit and loss for the calendar year 1922. It showed sales for the calendar year of 1922 of $1,141,628.40, and profits before accounting adjustments of $20,746.68, and profits after the accounting adjustments of $13,871.11. Plaintiff on the witness stand made a computation showing the profits of the defendant company during the calendar years of 1921 and 1922, $15,043.87. Mr. Fletcher, a certified public accountant, was employed by defendant Cummiskey’s secretary and instructed by him and by Mr. Cummiskey to make an examination of the Beasley reports for the purpose of the present lawsuit. The accountant testifies that he knew the lawsuit was coming on, what the issues were in the case, and that he prepared the audit himself to be used in this suit. Although Mr. Fletcher admits that the reports prepared by Beasley & Company were prepared in an efficient manner, he criticizes them in some particulars. His handling of the accounts of defendant company resulted in showing a balance due the corporation for 1921 and 1922 of $41, subject to the net final figure on which the government income tax of the corporation should be computed, which might still further increase the company’s losses. The defendant company’s business was a continuing one. Each year, as a general rule, was credited with the profits realized and charged with the losses paid during that year. The income tax reports were made on the same basis. Losses suffered were charged off when they accrued.' If the company subsequently collected the money it was credited as income, for the year in which it was collected. Defendants raised two questions:
(1) That the court should have directed a verdict for the defendants, and
(2) That the verdict was against the weight of evidence.
There is ample evidence in the record to support the verdict. The weight of the evidence was for the jury.
The disputed questions of fact were fairly submitted to the jury after a trial in which the defendants’ rights were fully protected; and the verdict and judgment, much smaller than plaintiff claimed, is affirmed, with costs.
Fead, C. J., and North, Fellows, Wiest, Clark, McDonald, and Sharpe, JJ., concurred. | [
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North, J.
The plaintiff herein entered into a contract with the defendants on the 22d day of October, 1925, to purchase from them a parcel of land on which to build a club house in the city of Detroit. The purchase price was $27,000. There was a down payment of $5,000 and the balance of the purchase price was to be paid on or before March 4, 1926. Subsequent to making this contract there were additional payments which made total payments of $8,689.02. The vendee defaulted, summary proceedings were instituted before a circuit court commissioner and judgment rendered against the contract purchasers. The time for an appeal expired; but, on the last day within which the vendee had a right to redeem, it caused this bill of complaint to be filed, making the vendors.defendants. The plaintiff alleges it was induced to purchase this property at an exorbitant price in consequence of false and fraudulent representations made to it by the defendants’ agent. There are two allegations of this character. One is that the defendants’ agent falsely and fraudulently represented to the plaintiff that the defendants had been offered $28,000 for 92 feet of the frontage of this property, the total of the same being 136 feet. The other allegation is that the defendants’ agent fraudulently represented to plain tiff that the defendants had been, offered $35,000 for the whole property. There is a further allegation in the bill that the defendants, through their agent, offered to reward certain members of the plaintiff society if they would urge the purchase of this property by plaintiff; and that the members so approached did urge said purchase. It is also alleged that the plaintiff will lose the sum of $8,689.02 paid on said contract unless the plaintiff is decreed to have a lien on said lots for said sum and unless the defendants be •enjoined from proceeding in the commissioner’s court .until this suit can be heard. The relief sought is:
(1) The recovery of said sum of $8,689.02.
(2) That the plaintiff be decreed a lien for that amount upon said premises.
(3) That the proceedings before the commissioner be stayed by injunction during the pendency of this suit.
The defendants denied each of the allegations of fraud. After a lengthy hearing in the circuit, a decree was entered by which the plaintiff was granted the relief sought. The defendants have appealed.
Christ Schmidt, the father of the defendants Elmer A. and Eric G. Schmidt, conducted the preliminary negotiations which finally resulted in the contract of sale entered into between these litigants. He and his two sons lived‘in the same household, and the sons were business associates of the defendant McCarthy. The facts in this case are such that Christ Schmidt must be held to have acted as the agent of the defendants, and if a misrepresentation relative to material facts was made by him, the same is chargeable to the defendants. They consummated the sale which he negotiated for them, and thereby accepted and ratified his acts as those of their agent.
Because the record discloses that, before the contract with the defendants was executed, the plaintiff knew of the falsity of the alleged misrepresentation as to an offer of $35,000 or that the property in question had been sold for $35,000, the plaintiff is not entitled to relief on that ground. A contract cannot be avoided because of an alleged false representation, the falsity of which was known to the party complaining before the transaction was closed. Raffel v. Epworth, 107 Mich. 143. Nor can the plaintiff be granted relief on the theory that some of its members were bribed or subsidized, because there is no proof to sustain this allegation.
There is a decided conflict in the testimony of the numerous witnesses as to whether the agent of the defendants did falsely represent to the plaintiff that the city of Detroit had offered $28,000 for 92 feet of the frontage of defendants’ property. The defendants admit that no such offer was made; but the issue is presented by their denial that there was any such misrepresentation. Notwithstanding the testimony on this question is in conflict, the record abundantly justifies the finding of the circuit judge that the plaintiff’s claim in this particular is established, and we accept his determination. If the alleged false representation as to the city having offered the defendants $28,000 for this property was made by the defendants’ agent to the plaintiff and was believed by it and in' consequence thereof the plaintiff was induced to contract to purchase defendants’ land at a decidedly exorbitant price, as was determined by the trial judge, clearly the plaintiff was defrauded. The statement that the defendants had been offered $28,000 was more than “a mere naked representation as to value,” as the appellants assert. It was a falsification as to a material fact which the plaintiff has proven induced it to enter into the contract to purchase, and as such entitles it to equitable relief. Pratt v. Allegan Circuit Judge, 177 Mich. 558.
The appellants claim this suit is solely for the recovery of a money ju'dgment, and therefore is im properly planted in equity. This contention is not well founded. The appellee seeks to enforce a vendee’s lien resulting from an alleged fraud of the vendors. This gives equity jurisdiction. Witte v. Hobolth, 224 Mich. 286. In contending that there can be no lien decreed against the property because the theory of the bill of complaint is that the contract was rendered invalid because of fraudulent representation, the appellants rely upon Von Hoene v. Barber, 215 Mich. 538, and Mulheron v. Henry S. Koppin Co., 221 Mich. 187; but these cases in this respect have been overruled by Witte v. Hobolth, supra, which holds that a defrauded vendee may assert and enforce a lien in equity.
The appellants also assert that this suit should be dismissed because the appellee is a corporation, whereas the purchaser from the defendants was an unincorporated voluntary association of the same name, and there is no proof that the corporation is lawfully possessed of any right of action which may have accrued to the unincorporated association. This issue is raised for the first time by the defendants in this court and therefore cannot be considered. Farr v. Childs, 204 Mich. 19. In any event, it is without merit, because the defendants in their pleadings have admitted their contractual relations with the plaintiff as a corporation; and they brought summary proceedings against the corporation alleging it was in default in making the contract payments.
It is further argued in behalf of the appellants that the judgment in the circuit court commissioner’s court was a bar to this suit in equity. This position is not tenable. The issues here under consideration are within the jurisdiction of the equity court. Witte v. Hobolth, supra. Circuit court commissioners, have no equitable jurisdiction. Puziol v. Kastle, 231 Mich. 100. This suit was instituted by the plaintiff while it still had a right of redemption in the property involved; and there is no attempt to review or appeal from any issue adjudicated by the circuit court commissioner and therefore this suit is not barred by the summary proceedings in the commissioner’s court.
Consideration has been given to the other questions raised in the appellants’ brief, and we have found them to be without merit.
The decree entered in the circuit court is affirmed, with costs to the appellee.
Fead, C. J., and Fellows, Wiest, Clark, McDonald, Potter, and Sharpe, JJ., concurred. | [
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] |
McDonald, J.
This bill was filed for the purpose of removing a cloud from the title to the plaintiff’s land. The plaintiff owns two adjoining parcels of land in block 3 south, range 3 east, according to the recorded plat of the village of Ann Arbor, Michigan. The plat recorded in 1824 shows a 16-foot alley extending north and south through the middle of block 3 from Liberty street on the north to Williams street on the south. About one-third of the alley in length crosses the larger parcel of the plaintiff’s property. It owns the land on both sides. For 50 years and upwards there has stood across this alley a portion of the building now used by the plaintiff as its temple. In May, 1925, the plaintiff caused a petition to be filed with the city council of Ann Arbor for the vacation of that portion of the alley which crossed its land. Public hearings were had. The matter was referred to the committee on streets. The committee reported to the council:
“That they had given this matter consideration and find that it is a question of fact regarding the matter of the use of said alley and that the questions of fact in connection therewith should be fully determined before any effort is made to determine the legal status of the alley as contemplated by the petitioners who have asked that the alley be closed. The committee further feels that this is a matter which should not be determined by the common council and that the respective rights of the proponents and opponents of the closing of said alley and of the city should be determined by a court of competent jurisdiction wherein the facts may be fully and completely ascertained and that the court can apply the law thereto. In vipw of this condition, we would respectfully recommend that the common council deny the petition to have the alley discontinued and vacated and leave the matter to the determination of the circuit court.”
This report was adopted by the council, and the plaintiff claims that such action of the council, together with the recorded plat, constitutes a cloud upon its title. Some time subsequent to the action of the council the plaintiff filed this bill to remove the cloud from its title on the theory that no alley exists across the property because the dedication was never accepted by the municipality and the alley was not used by the public. The defendant does not claim that there was any formal acceptance of the dedication, but contends that there was an acceptance by improving and paving a portion of the alley and by public user. It further contends that the action of the common council in denying the plaintiff’s petition for vacation of the alley precludes it from maintaining this suit. Two of the abutting property owners joined as plaintiffs and others were permitted to intervene as parties defendant, but as they all have since withdrawn, the complications arising from their participation in the hearing have been eliminated and need not be discussed.
The circuit judge dismissed the bill on the ground that the court was without jurisdiction to hear and to determine the matters in issue because the plaintiff had submitted them to the council and was bound by its determination. From the decree entered, the plaintiff has appealed.
As the bill should be dismissed for other reasons, we do not decide the question whether plaintiff is precluded from maintaining the suit because of the action of the council in denying the petition to vacate the alley. We prefer to dispose of the case on its merits.
The principal claim to the relief sought is that the alley does not exist because the dedication made by recording the plat was not accepted by the city. It is conceded that there was no formal acceptance. It is not necessary that there should have been. It was a sufficient acceptance of the alley as platted if the city paved and improved it or otherwise indicated an intention to adopt it for public use.
“As to what will constitute a sufficient acceptance of an offer to dedicate, it is settled in this State that it is not necessary that any formal action be taken by a municipality in order to constitute an acceptance of the highway or street, but making improvements and repairs and user thereof, or any portion thereof, are amply sufficient to constitute acceptance.” Crosby v. City of Greenville, 183 Mich. 452, 461.
The evidence is undisputed that the north portion of this alley was paved and improved. In their brief, counsel for the plaintiff say:
“A portion of this alley had been opened and paved by the city of Ann Arbor from Liberty street south to a point somewhat north of the north line of the plaintiff’s property which included about two-thirds of the length of the platted alley.”
As we understand the position of counsel for the plaintiff, it is that the city accepted that portion of the alley only which it had improved; that the portion which crosses its property had not been improved or used by the public; that therefore it has not been accepted, and belongs to the plaintiff as abutting property owner. A similar claim was made in Crosby v. City of Greenville, supra, concerning which the court said:
“It has been repeatedly held that it is not essential that every part of the highway, in length or width, should be worked and traveled in order to show the intention of the public to accept the entire highway. Neal v. Gilmore, 141 Mich. 519; Nye v. Clark, 55 Mich. 599; White v. Smith, 37 Mich. 291; also the authorities cited.”
It having been shown that by user, and improvements the city had accepted a portion of the alley,, the burden of proof was on the plaintiff to show that it was not intended to accept thel entire alley. There is no such proof in the record. But it is argued by the plaintiff that by nonuser and abandonment the city lost its right to the public use of that portion of the alley which crosses its premises. Fifty years or more ago some of the plaintiff’s predecessors in title built the building now occupied by the plaintiff. The rear portion of this building extends across the alley. Because of this encroachment the persons who used the alley'were compelled to make their way around it. Having prevented the free use of the alley by this wrongful obstruction, the plaintiff is in no position to claim that the public rights have been lost by nonuser. In the bill it is allegéd that title has been acquired by adverse possession, but a clause in the city charter of 1861 precludes the acquiring of title in that manner. The claim is not urged in- the plaintiff’s brief. There being no question of adverse possession in the case, the length of time the obstruction has existed is not important. The municipality holds the title to this alley for the use and benefit of the public, and the public right cannot be lost because the city has neglected to cause the obstruction to be removed. Webb v. City of Demopolis, 95 Ala. 116 (13 South. 289, 21 L. R. A. 62).
The dedication was in 1824, and it is impossible to show by any available evidence how soon thereafter the public made use of the alley or to what extent it was used. But we think it sufficiently appears that both by user and acceptance the public rights in the alley have been established.
The decree of the circuit court is affirmed, with costs to the defendant.
Fead, C. J., and North, Fellows, Wiest, Clark, Potter, and Sharpe, JJ., concurred. | [
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Fead, C. J.
The general facts of this case are reported in People, for use of McDonell, v. Fidelity & Deposit Co., 232 Mich. 238, where the law of the controversy was settled. The plaintiffs amended their declaration to count upon the quantum meruit, trial was had upon that theory, and the jury returned a verdict for plaintiffs .against both defendants in the sum of $10,517.12. This verdict was made up of three items, (a) excavation within the pay lines, (b), excavation without the pay lines, and (c), back fill. The issue here is on the amount of the verdict.
Defendants contend that the verdict is excessive in the amount allowed for excavation within the pay lines and is against the overwhelming weight of the evidence. Plaintiff Sylvester McDonell testified that the total of the contract excavation within the pay lines was 39,088 cubic yards. In this, he was supported by his engineer, Taylor, a registered civil engineer practicing since 1915. Defendants’ witness Linders, designing engineer for Frazier-Ellms-Sheal Company, the engineers for the city, estimated it at 35,461 yards. Sparling’s own engineer, Bissell, said it was 35,264 yards. The final report of the Frazier-Ellms-Sheal Company, on completion of the work, was 36,385 yards. Bissell said 2,860 yards were unfinished by plaintiffs. Plaintiff Sylvester McDonell estimated the unfinished portion at 1,214 yards. The qualifications and estimates of these parties were the subjects of extended examination and vigorous cross-examination.. The conflict was for the jury to resolve.
The work beyond the pay lines consisted of sloping the banks. It was undisputed that, unless the banks were sloped, the limits of the excavation would need to be shored and that sloping was more economical than shoring. Plaintiff Ernest McDonell testified that he had a conversation with defendant Sparling in which the latter approved the sloping and said he would pay for it. There was also testimony that Sparling and his engineer frequently, saw the work during its progress. Sparling denied the conversation and he and his witnesses claimed that there was no necessity for sloping as the defendants shored the banks. The plaintiffs denied that the banks were shored except in a few places. The whole situation was in conflict and presented questions of fact for the jury.
The amount of the back fill done by plaintiffs rested principally in a dispute between Sylvester McDonell and Engineer Bissell. The issue was for the jury.
Defendants complain because the court excluded evidence of a preliminary agreement between the parties made twelve days before the final contract was executed. Aside from the fact that the agreement was not competent evidence because it was merged in the final contract, it was not error to exclude it as it had no bearing upon the issue.
After the final estimate of the excavation work was introduced in evidence, the plaintiffs were permitted to inquire into and cause the production of prior estimates made by Frazier, engineer for the city during progress of the job. In his charge, the court explicitly instructed the jury that the prior estimates were not to be taken as substantive proof of the amount of the excavation, set out their preliminary and tentative character, and restricted their consideration by the jury to the credibility of the witness Frazier and the accuracy of his final estimate. There was no error in this.
Defendants casually present several other claims of error, in the way of rulings on the testimony and alleged prejudicial conduct of counsel but they present no reversible error. The court, in an extended and definite charge, clearly presented the issues. The amount of recovery demonstrates that the jury did not accept in full claims made by plaintiffs and the evidence fully warranted the verdict.
The judgment will stand affirmed.
North, Fellows, Wiest, Clark, McDonald, Potter, and Sharpe, JJ., concurred. | [
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Clark, J.
Philip Hirschfeld and Joseph Hirschfeld are brothers. .They owned real estate in common and they owned personal property, a part of which was devoted to the business in which they were engaged. Two bills were filed seeking in the aggregate partition, division, and accounting. The causes were consolidated. Toward the close of proof Judge Mandell suggested to the litigants, men of mature business experience, and to their counsel, also experienced and reputable' as well, the advisability of settlement. Accordingly, the brothers and their respective counsel met in the office of counsel for plaintiff and agreed upon a settlement. Returning intp court, counsel for plaintiff, with counsel for defendant, in the presence of plaintiff, dictated into the record, in open court, a stipulation for decree, and decree was entered thereon. Later plaintiff developed dissatisfaction, engaged other counsel and has appealed. His appeal is wholly without merit and it presents no question worthy of consideration.
Decree affirmed, with costs to defendant.
North, Fellows, Wiest, McDonald, and Sharpe, JJ., concurred. Flannigan, C. J., did not sit.
The late Justice Bird took no part in this decision. | [
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] |
McDonald, J.
On August 27, 1924, Warren H. Page, a child 9 years of age, was struck ahd fatally injured by the defendant’s automobile at the intersection of Charles street and East avenue in the city of Kalamazoo, Michigan. This suit to recover damages therefor is brought by the duly appointed administratrix. It is charged that the decedent was free from contributory negligence, and that the sole cause of the accident was the negligence of the defendant in operating his automobile at an unreasonable and excessive rate of speed and in not having it under proper control as he approached the street intersection where the decedent was injured. The defendant insists that he was free from negligence, and that the accident was due to the contributory .negligence of the decedent in suddenly darting into the street in front of his automobile. The issue was submitted to the jury and a verdict was returned for the plaintiff in the sum of $1,193.50. A new trial was refused and judgment was entered on the verdict. The defendant has brought error.
The errors alleged relate to the refusal of the court to submit to the jury certain of the defendant’s requests to charge, to the charge as given, and to the refusal of the court to grant a new trial.
It is claimed that the court erred in refusing to submit the following request:
“You are instructed that if you find from the evidence in this case that Mrs. Grace Page gave evidence before the coroner under oath, that her testimony as given there was inconsistent with her testimony in this case with reference to any material matter, then you are at liberty to disregard her entire testimony except so far as you may find it to be corroborated by other creditable testimony.”
This request was properly refused. It is not a correct statement of the law. From the mere fact that the testimony previously given on a material matter was inconsistent with her testimony on the trial, the jury would not be at liberty to disregard her entire testimony. She may have been honestly mistaken in her testimony at the inquest. The rule does not apply unless her testimony was wilfully or knowingly false. The court correctly covered the question in the charge as given as follows:
“Mrs. Page was cross-examined with reference to testimony said to have been given at the coroner’s inquest. If you find that Mrs. Page wilfully, intentionally gave testimony before the coroner’s inquest, under oath, as to any material matter or matters which is inconsistent with and contrary to her testimony here, then you are at liberty to disregard her entire testimony here, except in so far as you find it is corroborated, if you do so find, by other credible witnesses, that is, by other witnesses whose testimony you believe. You must first, in regard to this matter now, about which I am now talking, you must first determine whether she did testify differently respecting material matters. If she did knowingly and wilfully testify differently under oath at some other time, coroner’s inquest, than here, then you have a right to disregard her testimony here, unless you find other portions of the testimony corroborated by other witnesses whom you believe.”
It is urged by the defendant that the latter portion of this instruction is wrong in that it informs the jury that if the witness was corroborated on any portion of her testimony they would be at liberty to credit her entire testimony. ■ Standing alone, the latter portion of the charge is not a correct statement of the rule, but it should be read in connection with all the court said on the subject. It should be read with the statement immediately preceding it of which it is a part. When so read, it is very plain that the jury could not have been misled.
Other assignments of error relative to the charge of the court have been considered but are not of sufficient importance to require discussion. They are all without merit. The charge carefully and clearly stated the claims of the parties and correctly informed the jury as to the applicable law. We find no reversible error in the refusal to submit defendant’s, requests or in the charge as given.
It is also urged that the verdict is against the clear weight of the evidence, and that the court erred in refusing to grant a new trial on that ground. On the trial, the defendant contended that the child was guilty of contributory negligence and that he was free from negligence. Evidence was introduced in support of this contention, which, if believed by the jury, would have justified a verdict for the defendant. On the other hand, the plaintiff introduced evidence which the jury believed and which justifies the verdict rendered. We have no right to disturb the verdict unless it is against the overwhelming weight of the evidence. Undoubtedly, the defendant’s able counsel argued the question in issue before the jury and detailed with emphasis all of the testimony which supported his claims and theories; and, undoubtedly, the jury who saw the witnesses and heard them testify weighed the evidence in the light of counsel’s argument. It is the province of the jury to determine the facts. In the instant case, they have determined them against the defendant. From our examination of the record, we are not persuaded that their verdict is contrary to the overwhelming weight of the evidence. The court did not err in refusing the motion for a new trial on that ground.
The judgment of the trial court is affirmed, with costs to the plaintiff.
Fead, C. J., and North, Fellows, Wiest, Clark, Potter, and Sharpe, JJ., concurred. | [
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Wiest, J.
In an automobile accident plaintiff received severe and permanent injuries. Finding the accident was occasioned by negligence of an employee cf the White Star Motor Bus Company, a jury awarded plaintiff $74,000 damages against that company and its receivers. Defendants review by writ of error, claiming, among other grounds, that the verdict is excessive. We think the point well taken, and, as other errors alleged are not likely to arise on another trial, we will confine our discussion to the subject mentioned.
At the time of the accident plaintiff was 38 years of age, his earning power had been developed and exercised for years and we are informed of his loss of earnings and lessened ability to earn in the future. By no process of reasoning, admissible in a lawsuit, can the loss of his prospective earnings, measured in present worth, approximate more than a tithe of the verdict. Of course, compensation for'pain and suffering was also involved, and the award therefor rested in the sound discretion of the jury, guided by the nature and extent of the injuries. The serious permanent result of the injuries to plaintiff is loss of the use of his hands for all practical purposes. Plaintiff can no longer perform manual labor, cannot button his clothes, put on his collar, lace his shoes, cut up his food or lift any weight. Except as to his arms and hands, he has made a fairly good recovery anil is able to be about. His injuries were multiple and very painful.
In support of the verdict, counsel for plaintiff call our attention to the fact that a dollar now will purchase only about one-half of the commodities and necessaries it would have commanded some years ago, and direct us to decisions wherein courts have commented upon such fact in sustaining large verdicts. The jury undoubtedly considered plaintiff’s earnings before the accident and the loss of power to continue to so earn. If plaintiff’s damages for loss of earnings, past and prospective, are to be computed, having in mind the purchasing value of a dollar at this time, then that same measure should be applied to the purchasing value of what plaintiff was earning before the accident. This would reduce his loss of earnings up to time of the trial, if so measured by comparison with previous times, about one-half. The rule contended for is a poor one if it will not work both ways. Loss of a dollar of earnings is met in the eye of the law by a dollar of compensation,'' and it would be manifestly unjust to reduce the compensating dollar to its purchasing value, as compared with years ago, and let the former wage-earned dollar represent value without any such consideration. The truth of the matter is that we can pay no attention to such a method of determining compensation. Plaintiff was earning a certain number of dollars per year before the accident; his injuries prevent him from earning an equal number, or any number, of dollars in like employment in the future, and if he is given in dollars his loss of dollars he gets what he has lost, and may not ask for more on the plea that a dollar now will not purchase as much of the commodities as it would have commanded several years ago. Plaintiff’s wages just before the accident were fixed by the present dollar value; the affairs of all are so carried on, and the jury went far afield if they awarded compensation for loss of earnings and earning power on the theory that a dollar awarded should only count for 50 cents, because 50 cents, years ago, would have purchased as much in the way of commodities as a dollar will now.
What we have said does not apply with equal force to compensation for pain and suffering, but even such compensation will admit of scant consideration of the plea advanced. The sum awarded, placed at interest at five per cent, per annum, would bring an income about equal to the earnings of plaintiff at the time of the accident. We had occasion, in Sipes v. Railroad Co., 231 Mich. 404, to point out that a judgment was excessive if it awarded such a sum as would yield, at five per cent., an annual income approximating previous annual earnings and leave the sum intact at the end of life expectancy. See, also, Newell v. Railroad Co., 235 Mich. 687.
In Stone v. Sinclair Refining Co., 230 Mich. 472, we said of an award for pain and suffering:
' “We recognize the delicacy attending the measuring of a money compensation for pain and suffering arising from injuries, but it must be done, and, when done, the amount must be within reason. No sum of money could be set against her suffering and be said to pay for it; neither does the law attempt to reach any such impossible composition. The law does not admit of an award beyond such a reasonable sum, considering the nature and extent of the injuries, the suffering occasioned thereby, and the duration thereof, as will approximate a pecuniary satisfaction. * * *
“Upon the question of whether damages for pain and. suffering are excessive, cases found in the books are of little help, for no two cases are alike in the nature and extent of injuries received and suffering experienced.”
We have repeatedly found occasion to determine verdicts excessive, and, when possible to do so, we have required a remittitur of the excess or the alternative of a new trial. We cannot, in the instant case, even attempt to reduce the verdict and feel no inclination to endeavor to do so, for the amount awarded is so large as to demand a new trial.
The judgment is reversed and a new trial granted, with costs to defendants.
Fellows, Clark, McDonald, and Sharpe, JJ., concurred.
The late Chief Justice Flannigan and the late Justices Snow and Bird took no part in this decision. | [
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Sharpe, J.
On April 2, 1927, the sheriff of Hills-dale county, accompanied by several of his deputies, armed with a search warrant, visited the premises of one Victor Fish in the township of Moscow, in that county. The defendant and his wife were there present, and, with others, were placed under arrest and taken to Hillsdale. After the search was completed, a Buick automobile was discovered in the yard near the house. The officers went to this car for the purpose of securing it against invasion by other than the owner, and discovered a considerable quantity of intoxicating liquor (69 bottles of whisky) stored therein. Defendant was charged with having this liquor illegally in his possession, and was convicted. He seeks review on exceptions before sentence.
The assignments of error discussed by his counsel are thus stated:
“(1) Because of the court’s refusal to suppress the evidence relative to the liquor seized.
“(2) Because the court refused to grant a continu anee because of the absence of respondent’s witness, Henry Johnson.
“(3) Because of errors in his charge as pointed out in assignments of error 5, 6, 7, and 8.”
1. The motion to suppress was made before the trial began. It was based—
“upon the files and records of said case, and particularly upon the testimony of the people’s witnesses sworn upon the examination in behalf of the people in said case.”
The testimony referred to does not appear in the record. We therefore cannot say that there was error in the denial of the motion.
2. The issue upon the trial was whether defendant had driven the Buick car to the place where it was found in Fish’s yard. In his affidavit for a continuance, he stated that Henry Johnson, an electrician, formerly working in Monroe, was the owner of the Buick car in question, and that he expected to prove by Johnson—
“that it would have been physically impossible for deponent to have driven said car from Monroe to the premises of Victor Fish in the township of Moscow where said car was seized on April 2, 1927.”
There was no testimony tending to show that defendant had driven the car from Monroe, nor did the prosecution so claim. It offered proof that defendant and his wife were at Coldwater, in an adjoining county, in the afternoon and evening of that day, and there secured a Cadillac car which had that day been released from seizure by the prosecuting attorney; that later the defendant was at a filling station at Jones-ville, driving a Buick car with glass inclosure, similar to that in question, and was followed by his wife, driving the Cadillac car; that defendant paid for the gasoline for both cars. The question presented was whether defendant had the Buick car in his possession when it was driven into the yard at the Fish place. It is clear that, had the facts stated in, the affidavit been testified to by Johnson, they would have been immaterial on the issue before the jury. There was no error in the denial of the motion for continuance.
3. Charge of the Court. In his instructions to the jury the court said:
“The most of the evidence, I think, perhaps, I might say all of it, that has been adduced here, is undisputed. It is undisputed that in the afternoon of April 2, 1927, the respondent and his wife were in the city of Cold-water, they were in the presence of the sheriff at Cold-water at about 3 o’clock in the afternoon of that day, according to his testimony. They were there for the purpose of obtaining the possession of a Cadillac car which had been in the possession of the sheriff for some days, and he turned it over to them at about the hour that I have mentioned. The undisputed evidence further shows that at some time between 7:30 and 9:30 of that evening they appeared at an oil station in the village of Jonesville, in this county, the respondent himself appeared driving a Buick car, and asked that the car might be filled with gas at that oil station. After it was filled, the wife of respondent appeared with the Cadillac car, and that also was supplied with gas, the respondent paying for both supplies that were furnished. Those facts are undisputed.”
The defendant called but one witness, Mrs. Sophia Davis, of Coldwater. She testified:
“I am acquainted with Mr. and Mrs. Wilson, and recall that they were present at my home on April 2d. I don’t recall the date they came after their Cadillac car. The running board was off, and the fender. I am not positive but they arrived at my place just before supper, and stayed to supper with us.
“Q. And how long after supper did they stay?
“A. Why, I couldn’t say for sure; I judge around 9 o’clock, maybe later, now, I wouldn’t say for sure.
“Q. That would be your best judgment?
“A. Yes.
“Q. That it would be in the vicinity of 9 o’clock.
“A. Yes, sir. I did not see any other car in the vicinity except the Cadillac. When they left, they both went away in the Cadillac. Mrs. Wilson was driving. They went east, which would be in the direction of Hillsdale. They came to Coldwater after their car.”
On cross-examination she stated that “it must have been around 9 or 9:30, some place there. * * * That is slow time. We didn’t have fast time until a short time ago.”
It is urged that this testimony was in conflict with that of the witness Simpson, who testified that he saw defendant and his wife at his filling station at Jones-ville “between 8 and 9 o’clock,” and that of the witness Graves, who also saw them at Jonesville that evening and fixed the time as “between 7:30 and 9:30.” In our opinion, no material issue of fact was thus raised. There is no dispute about the fact that defendant was at the Fish place about 10 o’clock. He was arrested there and at once taken to Hillsdale. Neither is the testimony of the witnesses that he was at the filling station at Jonesville that evening in any way disputed. The issue presented was whether defendant was in possession of the Buick car in which the liquor was found at the time it was driven into the yard at the Fish home. We may take judicial notice that Jonesville is almost on a direct line between Coldwater and the township of Moscow in Hillsdale county, wherein the Fish home was located. The particular hour at which defendant left Coldwater and passed through Jonesville was immaterial to the issue presented so long as it appeared "without dispute that it was on the evening of April 2d and before defendant’s arrest at the Fish home.
An analysis of a part of the liquor found in the car disclosed that it contained 49 per cent, by volume of alcohol. There was no error in the instruction that the fact that defendant was at the Fish home that evening and the further fact that the liquor found in the car was intoxicating were undisputed, and that it was their duty to accept such facts as true. He, however, in the same connection instructed them that while they had the power under the law to reject this testimony it would not be right for them to do so. See People v. Heikkala, 226 Mich. 332.
We have carefully read the other parts of the charge complained of and find no reversible error therein. It is apparent that defendant had a fair and impartial trial.
The exceptions are overruled. The trial court will proceed to sentence.
Fead, C. J., and North, Clark, and McDonald, JJ., concurred. Fellows and Wiest, JJ., concurred in the result. Potter, J., did not sit. | [
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] |
Sharpe, J.
The parties to this suit were married in 1905. Their only child is a son, now 21 years of age. They lived in Cleveland, Ohio, until 1911. Divorce proceedings were then begun, but were not pressed to a decree. In 1912, plaintiff’s father and mother, Mr. and Mrs. Matey, and one Jacoby purchased under a land contract a farm of 94 acres in the township of Salem, in Washtenaw county. Plaintiff and defendant were then separated, and she went to live with her parents on this farm. The defendant claims that at the request of plaintiff, and in the belief that they could again live happily together, he came to the farm and a new contract for its purchase was entered into on June 6, 1914, with the Michigan Farm Land Company, the owner thereof, in which the four of them were named as vendees. The purchase price agreed upon was $5,000, of which $1,150 was at that time paid, a part of it by defendant. It is apparent that the farm was not at that time very productive. They all worked to make it so. The next spring the defendant got work in an automobile factory in Detroit, and has worked there quite steadily since that time. He spent his week-ends at the farm. It is plaintiff’s claim that he then was guilty of many acts of extreme cruelty towards her. The trial court so found. It will serve no useful purpose to review the testimony tending to support her charges. While denied by defendant, we think they are supported by a preponderance of the proof.
The decree provided for the payment by plaintiff to defendant of the sum of $500, the same to be in. full of all his interest in the farm and the property thereon. The amount unpaid on the land contract at the time of the hearing was $3,569.75. The defendant produced an account book, apparently one of original entry, in which were set down the moneys he testified he had paid to the plaintiff and their son and for new buildings and repairs on those on the farm from September 22, 1921, to June 21, 1925. The items therein aggregated $6,707.33, of which sum $1,195.77 was given directly to plaintiff. There was no satisfactory proof of the value of the farm at the time of the hearing. Without such proof, the court could not well determine defendant’s equity therein. We can but assume that its value was largely increased by the improvements made thereon. Neither does the value of the stock and implements appear. It is but fair to say that defendant was not then represented by the attorneys he now has. That the plaintiff and her father and mother worked industriously to make the farm a success is apparent.. We are, however, satisfied from the record that the allowance made to defendant is inequitable'. He testified that at the time of the hearing he had but $200 in savings, and- this is not disputed. He had worked quite steadily in automobile factories in Detroit for about nine years, and his earnings over and above his necessary expenses of living have been paid to plaintiff and expended on this -farm. We can but consider the record as it is presented to us. , In our opinion, the amount to be awarded to him in consideration of his release of his interest in the farm and the stock and implements thereon should be increased to $1,000..
The decree rendered in the circuit court will be modified in this court to so provide, and, as thus modified, affirmed. No costs in this court will be allowed.
North, Fellows, Wiest, Clark, and McDonald, JJ., concurred.
The late Chief Justice Flannigan did not sit.
The late Justice Bird took no part in this decision. | [
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] |
Clark, J.
Elizabeth Walsh died at Bay City on September 24, 1926, leaving a will dated January 18, 1924. Two children survived her, Miles Walsh, the proponent, and Gerald Walsh, the contestant. The will was contested on the grounds of mental incompetency and undue influence. Proponent had judgment on directed verdict and contestant brings error.
We take the facts from the record without the aid of a statement under Supreme Court Rule No. 40. Mrs. Walsh and her husband, Thomas Walsh, owned considerable real estate as tenants by the entireties which passed to her as the survivor. Mr. Walsh died October 28, 1923, leaving a will which bestowed his estate upon Mrs. Walsh, sole legatee and devisee. Mr. Walsh “handled his business until he died.” During the interval between his death and the making of the will in question, less than three months, contestant lived at home with his mother most of the time. Early in January he went to Chicago, where he. was employed for nearly a year. Eeturning, he lived with his mother until his marriage, in May, 1926, and perhaps afterward.
The executor of the will of Mr. Walsh did not take “physical possession of the property.” Miles Walsh, proponent, seems to have been more actively in charge of it. He co-operated with executor and advised with him. He assisted his mother and to a considerable degree managed her affairs. Testatrix in 1922 suffered an illness which produced partial paralysis. From that time until her death she was not active, spending most of her days in a chair at her home, reading, conversing with her friends and neighbors, using the telephone, and the like. She was without business experience as the term is commonly understood. There is no evidence that she, though physically impaired, was weak or incompetent mentally. All the evidence is to the contrary. Nor does the evidence indicate that she was easily influenced. She was strong mentally until her death, more than two years after making the will. She was fond of both her sons. Miles was kind and he was attentive to her wants. So was Gerald when he was at home. She said that she wished Gerald “would settle down.” The record does not show that Miles, the proponent, had anything to do with the making of the will. He was not present when it was dictated nor when it was signed. It was drawn by Otto J. Manary, who at the time of the trial was assistant United States attorney for the eastern district of Michigan. Mr. Manary had been attorney for Thomas Walsh in his lifetime, and he had been of counsel for his estate. He was acquainted with testatrix. He was called by telephone to the Walsh home on the day the will was made. Testatrix alone with her attorney dictated the provisions of the will. The attorney took notes of her directions, went to his office, put the will in form, and returned to Mrs. Walsh, when the will was read and duly and formally executed. It contains a number of bequests to various persons of jewelry and money, a bequest of jewelry and a devise of real estate to Gerald, with residue, the larger portion of the estate, to Miles, and it nominated testatrix’s brother-in-law, Charles C. Cook, executor. Mental incompetency was not pressed in the trial court, and it is not urged very seriously here. There is no evidence of it.
If it be conceded that at the time the will was made the relation between proponent and his mother, testatrix, was confidential, fiduciary, this, without more, would not here raise a presumption that proponent exercised undue influence over the testatrix, nor cast upon him the burden of disproving undue influence. Decisions of this court, too numerous to cite, when considered in the light of the facts of the particular case, do- not require a different holding here.
“The strict rules applicable to gifts when confidential relations exist between the donor and donee are not extended to wills, when the relation between the testator and devisee or legatee is that of parent and child.” 40 Cyc. p. 1149; citing Tyson v. Tyson, 37 Md. 567.
See 28 R. C. L. p. 146; 40 Cyc. p. 1148; In re Cottrell’s Estate, 235 Mich. 627. Of the converse, a conveyance from child to parent, the true rule in equity is stated to be, quoting note 11 A. L. R. 746:
“The rule most consonant with reason would seem to be, not that there is always a presumption of undue parental influence in every case of conveyance from a child to parent, or that there is always a presumption of validity in such a case, but rather that courts of equity, in examining such transaction, will carefully search for suspicious circumstances having a tendency to show unfairness or undue influence, and, in case any such circumstances are found, will require the party claiming the benefit of the contract to clear the transaction of any such cloud.”
A child, when a beneficiary of a parent, should not be penalized for honest and faithful service of the parent by raising a presumption of undue influence based solely on the relation necessarily incident to the service.
As has been said, the record does not show that proponent had anything to do with the making of the will. He was not present at the time. Testatrix was of sound mind. Her physical impairment and her inability to go about made it necessary that some one attend to her affairs. As stated in the record, “some one had to do it.” That proponent was guilty of any wrong or fraud toward testatrix is not shown. The record suggests no reason for what proponent did except his regard for his mother and the necessity of the case. Of course, in a confidential relation there is opportunity to exercise undue influence, but here the relation, if conceded, added to the opportunity, is not, alone, evidence of undue influence.
No question of natural justice is here involved, as will appear by reading In re Allen’s Estate, 230 Mich. 584. And in the absence of evidence of undue influence there was no foundation for testimony of claimed declarations of the testatrix to show state of mind. In re Allen’s Estate, supra.
We need not prolong discussion, being of the opinion, after careful reading of the record and briefs, that the evidence presents no issue of undue influence. We find no reversible error.
Judgment affirmed.
Fead, C. J., and North, Fellows, Wiest, ' McDonald, Potter, and Sharpe, JJ., concurred. | [
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Kavanagh, C. J.
Defendant was convicted by a jury of delivery of heroin, MCLA 335.341(l)(a); MSA 18.1070(41)(l)(a), and possession of the same heroin, MCLA 335.341(4)(a); MSA 18.1070(41)(4)(a), and he was sentenced to two concurrent terms of imprisonment. The convictions were affirmed by the Court of Appeals, 53 Mich App 321; 220 NW2d 186 (1974).
This Court granted leave to consider two issues:
1) Whether conviction for both delivery and possession of the same heroin, upon proof of possession incident to delivery only was constitutionally proscribed double punishment?
2) Whether it was reversible error for the trial court to instruct the jury that it was required to return verdicts of either guilty of both counts or not guilty of both counts?
We hold:
1) The separate convictions and sentences for delivery and possession were for the same offense, and cannot both stand.
2) The jury instructions were erroneous.
We affirm the conviction for possession, vacate the conviction for delivery, and remand to the trial court.
If the prosecuting attorney is persuaded that the ends of justice would be better served by retrial for delivery, he may so advise the trial court and the conviction for possession may also be vacated and the matter tried. People v Jenkins, 395 Mich 440; 236 NW2d 503 (1975).
I.
Testimony at trial indicated that a police informant brought 1/2 ounce of heroin directly from defendant. The defendant personally cut the heroin and delivered it to the informant. Defendant was charged in a two-count information with (1) delivery and (2) possession of a certain 15.62 grams of heroin. There is no dispute over the fact that it was the same 15.62 grams of heroin in each count.
Possession of the heroin present in this case was that necessary to its delivery.
On the evidence adduced at this trial, there is no doubt that unlawful possession was a lesser included offense of delivery.
When the jury found defendant guilty of unlawful delivery of this heroin on the evidence in this record they necessarily found him in possession of it.
"It is elementary that the State cannot divide a single offense into several parts according to time and conduct and base separate prosecutions upon and impose separate punishments for the various necessary divisions of that single crime. * * *
"The possession of narcotic drugs is an offense distinct from the sale thereof. But in the instant case the possession and sale clearly constituted one single and same act. The possession, as legally defined, is necessarily a constitutent part of the sale, as legally defined. Where the only possession of the narcotic drug is that incident to and necessary for the sale thereof, and it does not appear that there was possession before or after and apart from such sale, the State cannot fragment the accused’s involvement into separate and distinct acts or transactions to obtain multiple convictions, and separate convictions under such circumstances will not stand. * * * The error is not cured by the fact the trial Court permitted the two sentences to run concurrently. * * * The conviction and sentence upon the charge of possession must be set aside.” State v Allen, 292 A2d 167, 172 (Me, 1972).
Other state courts have reached the same result. See, Thompson v State, 259 Ind 587; 290 NE2d 724 (1972); Fairman v State, 83 Nev 137; 425 P2d 342 (1967); People v Roberts, 40 Cal 2d 483; 254 P2d 501 (1953).
In People v Cook, 236 Mich 333; 210 NW 296 (1926), defendant was tried and convicted for having illegal liquor in his possession. After his release from prison, he was tried and convicted for unlawfully transporting the same liquor. This Court reversed the transporting conviction:
"[W]e cannot conclude other than that the conviction of defendant for possession bars his subsequent prosecution for transporting the same liquor.
"While it is possible that one may possess intoxicating liquor without transporting it, it is manifest that it cannot be transported without being possessed. If the defendant had first been charged with transporting and had been convicted, it could not possibly be contended that he could be doubly punished for transporting, by afterwards charging him with possession, which was a necessary incident to transporting.” 236 Mich 333, 336-337.
The logic of Cook applies here. Defendant may not be "doubly punished” by convicting him of possession, which in this case was a necessary incident to the very delivery for which he was also convicted.
A defendant may be charged and tried for each act that constitutes a separate crime. However, when tried for an act which includes lesser offenses, if the jury finds guilt of the greater, the defendant may not also be convicted separately of the lesser included offense. The prohibition against multiple punishment for the same crime cannot be avoided by the form of the charge. "The form of pleading cannot assume such importance that it will permit defendant to be convicted of both the included and greater offense.” People v Greer, 30 Cal 2d 589, 599; 184 P2d 512, 518 (1947). Accord, United States v Belt, 516 F2d 873 (CA 8, 1975), cert den 423 US 1056; 96 S Ct 790; 46 L Ed 2d 646 (1976).
The guarantee against double jeopardy protects against not only a second prosecution for the same offense, but it also "protects against multiple punishments for the same offense”. North Carolina v Pearce, 395 US 711, 717; 89 S Ct 2072; 23 L Ed 2d 656 (1969).
"[T]he Constitution was designed as much to prevent the criminal from being twice punished for the same offense as from being twice tried for it.” Ex Parte Lange, 85 US (18 Wall) 163, 173; 21 L Ed 872 (1874).
Accord, State v Waldenburg, 9 Wash App 529; 513 P2d 577 (1973); Gallinaro v Commonwealth, 362 Mass 728; 291 NE2d 420 (1973). See also, People v Anderson, 62 Mich App 475; 233 NW2d 620 (1975).
"It is clear that preventing multiple punishment for the same offense was foremost in the minds of the framers of the double jeopardy clause. * * * Until joinder became permissible and commonplace, however, multiple punishment could result only from multiple trials.” Comment, Twice In Jeopardy, 75 Yale L J 262, 266, fn 13 (1965).
In O’Clair v United States, 470 F2d 1199, 1203 (CA 1, 1972), cert den, 412 US 921; 93 S Ct 2741; 37 L Ed 2d 148 (1973), defendant was convicted at a single trial of bank robbery and assault while committing the robbery. The Court of Appeals, relying on both statutory interpretation and double jeopardy analysis, held that the statute permitted only one conviction for a single bank robbery. The conviction and sentence for the lesser included offense were vacated. Addressing the double jeopardy argument, the Court stated:
"It would seem apparent that if the state cannot constitutionally obtain two convictions for the same act at two separate trials, it cannot do so at the same trial.”
See also, People v Hancock, 186 Colo 30; 525 P2d 435 (1974).
The fact that the two sentences are to run concurrently does not allow a different result. The "double punishment” proscribed for committing one offense includes the conviction and not merely the sentence. The second conviction punishes appellant in several ways, including parole considerations, impeachment at subsequent trials, habitual offender treatment, etc. "We recognize that even the entry of judgment and the imposition of a suspended sentence of imprisonment is additional punishment.” Thompson v State, 259 Ind 587, 592; 290 NE2d 724, 727 (1972).
II.
Defendant contends that the trial court erred by giving the following instruction to the jury:
"[W]hile you will consider the counts separately, the way the evidence is in this case, if you find the defendant guilty at all, you would have to find him guilty of both count 1 and count 2. .
"You will find the defendant either guilty of delivery of heroin in count 1, guilty of possession of heroin in count 2 or you will find him not guilty of delivery of heroin in count 1 and not guilty of possession of heroin in count 2.
"There cannot be, under the evidence as it’s been presented to you today, inconsistent verdicts. By that I mean a verdict of guilty of one count and not guilty of another. The verdict must be unanimous as to both counts, either guilty or not guilty.”
This instruction was erroneous. The jury was free to believe the defendant possessed the heroin, but disbelieve the testimony concerning the transfer of possession necessary to convict of delivery.
"A judge may not instruct the jury that if it believes a witness’ evidence on one element it must believe that witness’ evidence as to another element, even though in the judge’s view any other finding would be inconsistent or illogical.” People v Chamblis, 395 Mich 408, 420-422; 236 NW2d 473 (1975).
The judge, by giving this instruction, invaded the province of the jury to determine whether or not each element of both crimes had been proven. "[T]he right of the jury to determine all elements of an offense is so fundamental a right that the harmless error rule is not appropriate where the judge invades that province. There is a difference between commenting on the evidence and making a finding of fact for the jury.” People v Reed, 393 Mich 342, 351; 224 NW2d 867 (1975).
Counsel for both the prosecution and defense indicated satisfaction with the judge’s instructions. No doubt each side saw some benefit in this trial tactic. Nevertheless, "a defendant has no legitimate interest in compelling the jury to adopt an all or nothing approach to the issue of guilt. Our courts are not gambling halls but forums for the discovery of truth”. People v Chamblis, supra, 417.
We agree with the prosecutor that defendants should not "reap benefits” from errors they could have corrected at trial. However, we are constrained to note that the responsibility for a properly conducted trial rests on all the participants, including the prosecuting attorney and trial judge. We made it clear in People v Chamblis, supra, that a defendant has no right to a misinstructed jury:
"It is the duty of the trial court to instruct the jury as to the law applicable to the case. MCLA 768.29; MSA 28.1052. Neither the defense nor the prosecution has the option of precluding the court from carrying out this duty in hopes of forcing an 'all or nothing’ verdict.” 395 Mich 408, 415; 236 NW2d 473 (1975).
The prosecutor has as much a responsibility as the defendant to scrutinize jury instructions and object to those which misstate the law.
"The prosecutor no less than the defense attorney should be alert to bring to the trial court’s attention any errors of omission or commission. Trial courts should be ready and receptive to taking advantage of any such proper advice. * * * It is to be hoped that all prosecutors and all judges will take advantage of this opportunity to improve the administration of justice.” Guilty Plea Cases, 395 Mich 96, 136; 235 NW2d 132 (1975).
III.
The jury found the defendant guilty of delivery of heroin on count 1 and guilty of possession of heroin on count 2.
The possession charged in count 2 was of the same heroin charged delivered in count 1, and as we held in part I above both convictions cannot stand.
We can correct this error by affirming the conviction on either count and vacating the conviction on the other. Usually we affirm the conviction on the higher charge and vacate the conviction on the lower charge but this option is not open to us in this case because, since the jury was misinstructed (as we held in part II above), we cannot say the jury would necessarily have found defendant guilty of the higher charge if it had been properly instructed. It might have had some reasonable doubt that the defendant delivered the heroin it found he possessed.
The jury was instructed that it could acquit defendant of both counts, but declined to do so. The jury, therefore, at least believed defendant guilty of possession of heroin.
For this reason we affirm the conviction on the lower charge of possession and vacate the conviction on the higher charge of delivery.
Since only the prosecutor could be heard to complain of this disposition, if he is persuaded the ends of justice would be better served by retrial for delivery, he may so advise the trial court and the conviction for possession may also be vacated and the matter tried. People v Jenkins, 395 Mich 440; 236 NW2d 503 (1975).
Remanded.
Williams, Levin, Fitzgerald, and Ryan, JJ., concurred with Kavanagh, C. J. | [
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Fitzgerald, J.
Plaintiff brought this action to recover life insurance proceeds in the amount of $20,000, based upon a conditional receipt given by defendant’s agent when the policy was applied for and an advance premium of $170.79 was paid. The insured, plaintiffs husband, died 44 days after making application and before issuance of any policy by defendant Maccabees. The case was tried to a jury which rendered a verdict in favor of defendant of no cause of action. The Court of Appeals, at 65 Mich App 670; 238 NW2d 368 (1975), reversed and remanded for new trial, finding that a treating physician’s report had been erroneously admitted into evidence over assertion by plaintiff of the physician-patient privilege. The Court of Appeals further held that the trial court erred in removing from the jury’s consideration plaintiffs claim that she was entitled to the proceeds on the theory that defendant had delayed unreasonably in processing the application.
We granted leave, 396 Mich 855 (1976), principally to consider whether the privilege may be successfully invoked to prevent full disclosure of the nature of an insured’s medical impairment, once the insurer has proved specific and false representations in the application for insurance. It is our opinion that the Court of Appeals must be reversed and that judgment enter in favor of defendant Maccabees.
Facts
On November 4, 1969, Clayton J. Cartwright and his wife, Margie, made written application to defendant for a $20,000 joint life policy on their lives, and a term policy on the lives of their children. Each signed the application form immediately beneath the declaration which in part stated:
"IT IS UNDERSTOOD AND AGREED (1) that the above statements and answers and those in any Part II and III required are complete and true to the best of my knowledge and belief and shall, together with this agreement, form the basis and become a part of any policy issued hereunder.”
In regard to Mr. Cartwright, a "no” answer was checked in response to a question of whether he had within the past 18 months "been declined, postponed, or rated up for life insurance”. In point of fact, some seven months before, on April 2, 1969, he had been declined by the Security-Connecticut Life Insurance Company for a $100,000 life policy. Furthermore, his application to Security-Connecticut revealed that insurance had also been declined in 1966.
In response to a question of whether any proposed insured had ever had "rheumatism, gout, arthritis, or any disease or disorder of muscles, bones, or joints”, a "no” answer was checked. In fact, the application to Security-Connecticut refers to a history of arthritis leading to a ten-day hospital stay in 1965 and to regular X-ray therapy. Questions regarding whether any proposed insured had been in a hospital for diagnosis or treatment, or had undergone X-rays or electrocardiograms were answered "no”. In fact, Mr. Cartwright had been in Burton Mercy Hospital for diagnosis and tests, including X-rays and electrocardiograms, from January 11 to January 20, 1967, and again from January 30 to February 6, 1967. Evidence concerning the nature of treatment at Burton was excluded upon claim of privilege.
In response to a question of whether any proposed insured had any known indication of physical disease, defect or disorder not disclosed in other answers to the application, a "no” answer was checked. In fact, Mr. Cartwright had been treated 31 times in 1965 by Dr. Germany Bennett, 52 times in 1966, twice in 1967 prior to admission to the hospital and three times after discharge. Evidence pertaining to the nature of treatment by Dr. Bennett was excluded at trial upon claim of privilege. The record further reveals that Mr. Cartwright was treated 31 times by Dr. Howard Appleman in 1967, 13 times in 1968, and 18 times in 1969 before being admitted to the hospital where he died on December 18. Again, testimony regarding the nature of Dr. Appleman’s treatments was excluded upon claim of privilege.
At trial, Mrs. Cartwright testified that the application was filled out on November 4 in her home while she was busy preparing dinner. She testified that her husband and defendant’s agent, Donald McCray, sat at the table together and that she was unable to hear what transpired between them. According to her trial testimony, the agent asked her only whether she was pregnant and when she had last seen a doctor. In her earlier deposition, however, Mrs. Cartwright testified:
"Question: Did he ask you a number of questions concerning the application?
"Answer: Yes, he did.
"Question: And what did you and your husband explain to him?
"Answer: Well, the questions that were pertaining to me, I answered them, and the ones that were pertaining to my husband, he answered them.”
At the time of trial, the agent was no longer in defendant’s employ and attempts by both sides to subpoena him were unsuccessful.
Regarding privilege, the application stated that "to the extent permitted by statute, the proposed insured, family member or second insured waive(s) all rights governing disclosure of medical examination or treatment”. The Cartwrights also signed a separate waiver directed to "ANY PHYSICIAN, HOSPITAL OR CLINIC” which stated that: "I hereby request and authorize you to give MACCABEES MUTUAL LIFE INSURANCE COMPANY any information they request concerning the present and past physical condition of myself, my spouse, and any of my children”.
I
We hold that any delay in processing the Cartwright application was, as a matter of law, reasonable and that the Court of Appeals holding to the contrary was clearly erroneous. The theory of unreasonable delay is based upon an implied acceptance of the application of insurance. Acceptance on the part of the insurer may be implied where it accepts and retains an advance premium while delaying action on the application under circumstances inconsistent with rejection of the risk.
The undisputed facts regarding processing of the Cartwright application are as follows: the application was received at defendant’s home office on November 10, 1969. The following day, defendant received a report from the Medical Information Bureau indicating that Clayton J. Cartwright had been reported as having collagen disease, abnormal heart, and albuminuria. On November 13, defendant forwarded a request for attending physician’s statement to Dr. Appleman whom Mr. Cartwright had listed on the application. Thereafter, defendant’s file reflects several communications with the Retail Credit Bureau between November 14 and December 1 regarding an erroneous entry in the bureau’s report that Mr. Cartwright engaged in a hazardous sport. On December 5, a second request for attending physician’s statement was hand-delivered to Dr. Appleman because he had not answered the first. On December 18, Mr. Cartwright died. The following day, defendant wrote to its agent advising that it was still waiting for Dr. Appleman’s report. On December 23, defendant learned of Mr. Cartwright’s death. On January 6, 1970, defendant wrote to Dr. Appleman in part as follows:
"On November 13 we sent you a signed authorization from Mr. Cartwright requesting that you give us the details of your consultations for the past 5 years. We are attaching another copy of his authorization completed at the time of our application. A second request was sent to you and we re-sent the request on December 5 because our agent indicated you had not received our original requests.
"We have recently been informed that Mr. Cartwright is deceased and it is essential that we have your report so that we may determine whether or not we have any liability under his application for insurance.
"Our Conditional Receipt states that, if Mr. Cartwright was insurable on any basis at time of application, his beneficiary has monies due her.
"In order for us to evaluate Mr. Cartwright’s insurability, your report is necessary. Doctor, I request your fullest cooperation in assisting us in evaluating Mr. Cartwright’s insurability, since without this report we must deny all liability.”
On January 12, Dr. Appleman called defendant and gave his report which was recorded, transcribed, and verified by Dr. Appleman at trial. Insofar as the issue of privilege affects the admissibility of this report, it will be discussed in part II, infra. This report did detail an extensive and substantial medical history, including collagen disease, rheumatic fever, pneumonia, and albuminuria. In the report, Dr. Appleman stated the following regarding his delay in answering:
"He developed a greater rash on his face in September of 69 and the thought of a possible systemic lupus erythematosus became fixed in my mind. This was the reason why I did not feel I should report the situation to the insurance company at the time I received request for information determining my patient’s eligibility for insurance.”
Based on this report, defendant determined that Mr. Cartwright was uninsurable as of the date of his application. Mrs. Cartwright was so informed by letter on January 16, in which a refund check for the advance premium was enclosed.
An autopsy revealed that Mr. Cartwright died of severe pneumonia, and that he did have systemic lupus erythematosus. Lupus erythematosus is a progressive and degenerating disease of the body’s connective tissue affecting every system and organ. Its symptoms include fever, pleurisy, arthritis resembling rheumatoid arthritis, skin lesions on the upper body and extremities, leukemia, and inflammation of the heart lining. According to the testimony at trial of defendant’s director of underwriting, presence of the disease requires an absolute declination of insurance. The underwriting manual used by defendant is to the same effect.
The Court of Appeals found that the jury could infer unreasonable delay from the 73-day period between application and rejection. However, inclusion of the time period subsequent to death was error since there could have been no detrimental reliance or prejudice from any delay in processing the application after the death of the proposed insured. Furthermore, we find the record uncontradicted that the "delay” in processing the Cartwright application was solely attributable to the avoidance by the insured’s attending physician óf the repeated requests for medical information. On the facts as enumerated above, reasonable minds could not differ on the conclusion that defendant’s actions did not constitute unreasonable delay. The trial court did not err in removing the issue from the jury’s consideration.
II
Relying on Wohlfeil v Bankers Life Co, 296 Mich 310, 320; 296 NW 269 (1941), and Gilchrist v Mystic Workers, 188 Mich 466; 154 NW 575 (1915), the Court of Appeals found reversible error in the admission over plaintiff’s claim of privilege of the transcript of Dr. Appleman’s report to Maccabees. The Court of Appeals held that Mr. Cartwright’s authorization of his physician to give Maccabees any information requested concerning present or past physical condition did not constitute a waiver of the right to invoke the privilege at trial. Regarding this holding, Judge Quinn in dissent wrote:
"The effect of the majority’s non-waiver holding is that the medical authorization permits the insurance company to obtain medical information it needs to determine whether or not to issue a policy of insurance but this same information cannot be used to explain why the insurance was not issued. This offends reason. If that is the law, it is further basis for the ancient saying, 'The law is an ass’.” 65 Mich App at 685.
The holding that the waiver in the application did not extend to trial does not, however, address the issue of the consequences to plaintiff of claiming the privilege. In 1957, some 16 years after Wohlfeil, the Legislature amended MCLA 500.2218; MSA 24.12218 by adding four paragraphs to this section of The Insurance Code. The original section required that a misrepresentation in an application for insurance be material before it can void a policy. The added paragraphs defined misrepresentation and established procedures for determining whether it is admissible and material. MCLA 500.2218(4); MSA 24.12218(4) provides as follows:
"A misrepresentation that an applicant for life, accident or health insurance has not had previous medical treatment, consultation or observation, or has not had previous treatment or care in a hospital or other like institution, shall be deemed for the purpose of determining its materiality, a misrepresentation that the applicant has not had the disease, ailment or other medical impairment for which such treatment or care was given or which was discovered by any licensed medical practitioner as a result of such consultation or observation. If in any action to rescind any contract or to recover thereon, any misrepresentation is proved by the insurer, and the insured or any other person having or claiming a right under the contract, shall prevent full disclosure and proof of the nature of the medical impairment, the misrepresentation shall be presumed to have been material. ”
In the instant case, the insurer introduced substantial evidence of specific and grossly inaccurate representations in the Cartwright application. Not only can there be no disagreement among reasonable men that these false statements would materially affect the acceptance of the risk by defendant, but also they are presumed material by reason of plaintiffs invocation of the privilege to prevent full disclosure to the jury of the extent of Mr. Cartwright’s medical impairment. Here, the jury’s verdict might well have been directed upon defendant’s motion which was timely made.
The trial court’s judgment in favor of defendant Maccabees must be reinstated. The Court of Appeals is reversed.
Kavanagh, C. J., and Levin, Coleman, Lindemer, and Ryan, JJ., concurred with Fitzgerald, J.
Williams, J., took no part in the decision of this case.
The relevant part of that receipt reads as follows:
"[I]f the Company at its Home Office shall be satisfied that on the latest of the dates of the completed Part I, Part II (if required), and Part III (if required) of the application, any of the individuals to be insured are insurable under the Company’s rules of that date, whether on a standard basis or not, then, * * *
"(a) life insurance, only on the lives of the individuals who are determined by the Company to be insurable on that date, is effective as of that date; * * *
"If the Company shall be satisfied that any individual intended to be insured is uninsurable, then no life insurance is effective as to that individual and if all are uninsurable then the Company’s liability is limited to the return of the amount of advance payment.”
MCLA 600.2157; MSA 27A.2157.
Gorham v Peerless Life Ins Co, 368 Mich 335, 341; 118 NW2d 306 (1962). Anno, Rights and Remedies Arising Out of Delay in Passing Upon Application for Insurance, 32 ALR2d 487.
See Anno, supra, 32 ALR2d at 501, "Material Period”.
Housour v Prudential Life Ins Co of America, 1 Mich App 455; 136 NW2d 689 (1965); Dedic v Prudential Ins Co of America, 14 Mich App 274; 165 NW2d 295 (1968); Dick v John Hancock Mutual Life Ins Co, 434 F2d 808 (CA 6, 1970). Cf. Simonson v Michigan Life Ins Co, 37 Mich App 79; 194 NW2d 446 (1971), which dealt with an obviously visible physical impairment in the context of a general "sound health” clause, rather than inaccurate answers to specific questions regarding various illnesses and medical tests. | [
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McG-rath, J.
Complainant files a bill to set aside a ■deed given in 1887 by complainant, the father, to Harlow A. Ladu, the son, and a mortgage given by the son to his sister Ada Hydren.
Complainant avers that he is 67 years of age; that he was the owner of this farm, worth $3,500; that in 1885 his wife died; that he has three children, Harlow A. Ladu, Prudah Bentley, and Ada -Hydren; that, in the fall of 1886, his son, with his wife and three children, ■came to live with complainant, and in course of time began to importune complainant to give him a deed of the farm, promising that—
“ If you will let me have it [the farm] I will live with you, and work the farm, and will support you in your old age, and will fix up the fences and slick up the farm nice, and give a mortgage on the farm to Ada for $1,000, and, if you ever want the farm back, I will deed it back to you, and if you never want it back, Ada will have a thousand dollars.”
That being fully overpersuaded by the son, and believing that he would do as he agreed, he yielded to his promises and entreaties, and deeded the farm to him; that, when defendant Ladu received the deed, he did not-execute the mortgage until October, 1887; that no consideration was paid for the deed or mortgage, and defendant Ladu has not paid any part of the mortgage;, that in October, 1887, the son executed and delivered to-complainant what purports to be a life-lease of said farm, which was done further to cloud complainant’s title and defraud him out of the farm; that the defendant Ilarlow A. Ladu failed to keep and perform the conditions upon which he received the deed, and refuses to redeed the-farm as he agreed to do; that defendant Ada Ilydren, offers to release her mortgage, if her brother will redeed, the farm.
Defendant Harlow A. Ladu admits the execution of the deed to him; denies that the conditions named were imposed, other than that he was to execute the mortgage to his sister; denies that he importuned complainant to give the deed, or that he made the alleged promises; avers that he executed the mortgage; that the execution of the deed to him was a part of a general plan devised by complainant to distribute his property to his children; that his father owned not only this farm, but a smaller farm of 35 acres, and a lot and store in Williamston; that the deed to defendant was voluntary, and, at the-time of its execution, complainant executed a deed of the other farm to Prudah Bentlej'-, and a deed of the Williamston property to complainants granddaughter, and that the mortgage to the defendant Ada Hydren was her portion; and denies all allegations of fraud or of default.
The testimony, as to the conditions upon which the deed to defendant was giv.en, is conflicting, as is that with reference to defendants willingness to remain upon the farm. It appears that complainant was 65 years of age at the time of the execution of the deed; that defendant Ladu was not strong physically; that he lived upon the farm until he was 22 years of age, and then married, and for three years after that continued to live upon the farm with his wife; that prior to his motherS death, he learned the trade of harness-making, and, for some years prior to his motherS death, he followed that business; that, his health failing, he gave up that business, and at the .time of his motherS death, in 1885, he was with his wife and children traveling, giving_ concerts; that in 1886 he made a visit to his fatherS house, where his father, his sister Ada (about to be married), and his niece were living; that his father urged him to remain upon the farm, and he did so until the fall- of 1888. The son testifies that, some time during the spring or summer of 1887, his father told him that he had conveyed to him the farm, and, in the fall of the same year, the father told him to go to one PulverS, execute the life-lease and mortgage, and get his deed, and have it recorded, which he did; that he continued to live on the farm, his father managing and conducting it, until the fall of 1888; that-in the fall of 1888 it was noised about that the father contemplated remarriage; that the son spoke to the -father about it, and the father replied that- he knew his own business; that from that time the father bégan -to grow secretive, sullen, and morose, moved into a separate part of the house with his granddaughter, and ordered his meals there; that the son, knowing that his father was about. to marry, and believing that he (the son) and his family were in the way, constructed one of his traveling cars, moved into it, remaining there all winter, continuing to do the fall work on the farm; that soon afterwards his father married; that, after his- wife came, the son’s wife and the children were accused of stealing little things from the house, and in the spring defendant left the farm.
One James M. Pulver is called as a witness, and says that he made out the deed, the' life-lease, and mortgage at the instance and by direction of complainant; that complainant told witness at that time that he was not in good health, and wanted to distribute his property; that, at the same time, witness drafted other deeds to the other children; that.the deed running to Harlow remained as originally prepared; that all the papers remained in witness’ hands for some time, and the other papers were afterwards changed, and those originally prepared were destroyed.
Daniel Hydren was called by complainant, and says that in November, 1887, Harlow told him that he had executed a mortgage to Ada, and that his father had it; that the witness told Ada about it; and afterwards, in 1889, complainant, in the presence of witness, gave the mortgage to Ada.
It is quite olear from this testimony that, although the deed was executed in February, it was not delivered until the fall, and was recorded in November; that the mortgage was in complainant’s hands from the time of its execution, in October, 1887, until some time in 1889; that the life-lease was received by the father from the son in the fall of 1887, was retained by complainant, and was in his possession when the bill here was filed; that the control of the farm and its management were never yielded up by the father to the son; that, for nearly a year after the delivery of the life-lease and mortgage to the father, the relations between father and son continued to be the most cordial, as they had always been and were up to the contemplated remarriage of the father, which took place in the fall of 18.88.
These undisputed facts are entirely inconsistent with complainant’s theory that the condition of the gift of the farm to the son was the support of the father by the son> or that the mortgage was not executed as agreed, or that the life-lease was an after-thought of the son’s. The relations between father and son, and between the father and the son’s wife and family, had always been unusually pleasant and cordial, and it was the undoubted intention of both parties, at the time of the delivery of the deed, that the son should remain upon the farm, and that all should live together in the old farm home as one family; but, in view of the father’s contemplated marriage, the son and his family were in the way, and the son gave way to the father’s evident desire, manifested not openly and frankly, as it should have been, but by changed demeanor and unpleasant conduct. We find, therefore, that the only conditions imposed by the father upon the delivery of the deed were the execution of the life-lease and mortgage, and that those conditions have been performed.
The decree of the court below is therefore set aside, and the bill of complaint dismissed, with costs of both courts to defendant.
The other Justices concurred. | [
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] |
Long, J.
Complainant files his bill for the dissolution of a partnership and for an accounting. Decree was entered in the court below in favor of complainant as prayed ,in the bill. In the decree, the court made certain findings of fact, which are controverted here, and, as the'se findings relate to the principal questions raised in this Court, we insert the substance of such findings. It was found—
“ 1. That . the said complainant and defendant are copartners in the carrying on of the business of harvesting, storing, and selling ice at Nottawa, St. Joseph Co., Mich., and have been copartners since on or about the 13th day of December, A. D. 1883.
“2. That, as copartners, the said parties on or about the 13th day of December, 1883, became and were the-owners of that certain property, premises, and business, described as follows: [Here describing the real'estate;] also the railroad side track adjacent to said lands; also-certain large ice-houses situated thereon, together with a large quanity of ice therein, and together with a quantity of tools, machinery, and lumber belonging to the ice business; and also a street called 'Railroad Street,"’ situated between Wallace and South streets, and that part of Williams street lying west of Nottawa street, — all lying and being in the village of Nottawa, St. Joseph county, Mich., and also were joint owners, as copartners, in the business of gathering, storing, and marketing ice on said premises and at Nottawa at and since the time last above mentioned.
"3. That the purported deed of conveyance, alleged to-have been made by the complainant and wife to defendant, of the date of the 3d of January, A. D. 1889, and recorded in the office of the register of deeds for said St. Joseph county in Liber 86 of Deeds, page 68, purporting to be a quitclaim of the complainant's right, title, and interest in the property and business above mentioned, was never delivered to the defendant.” This deed is declared to be void and of no effect, and is set aside, and the title to the property purported to be conveyed thereunder decreed to stand in the complainant as if no such deed had ever been made and placed on record.
“ 4. That said copartnership existing between the parties to this suit has never been dissolved, but that defendant, since about the 3d day of January, 1889, has excluded complainant from the business of 'said copartnership, and has operated said copartnership in his own name, receiving all the profits thereof, and that there never has been any accounting between the said copartners as to said copartnership business.”
The decree orders an account to be taken before a circuit court commissioner of St. Joseph county, and a report made thereon to the court. This accounting is to commence with the beginning of the partnership on December 13, 1883, and extend up to the close of the examination before the commissioner, including the years 1889 and 1890.
The claim by the defendant on the hearing in the court below was, and that claim is made here,—
1. That there never was any partnership between the parties.
2. That, if there was, it was wound up by the deed of January 3, 1889, which defendant insists was delivered, and operated to wind up the partnership affairs, and that at the time of such dissolution all the affairs of the partnership were settled, and therefore no accounting can be decreed.
3. That, if any partnership ever existed, it was an indefinite and uncertain one, and for an indefinite time, and that either partner could dissolve it at will; that defendant did dissolve the same on January 2, 1889, and, if any accounting can be had, it can only be up to January 2, 1889.
The claim made by the bill is that on December 13, 1883, the defendant was the owner of the property hereinbefore mentioned, and was then engaged in the gathering, storing, and shipping of ice; that defendant then proposed to sell to complainant a half interest in said business, and represented that he had made considerable money out of the business, and, if complainant would purchase one-half interest therein, large profits would be made; that, believing the representations so made, complainant purchased the one-half interest, paying the sum of $9,000 therefor, and received from the defendant a transfer of an undivided half interest in the business and property; that immediately after such transfer the parties entered into a copartnership for the purpose of carrying on the business, each to have one-half of the profits, and to be liable for one-half of the losses; that the defendant was to have the personal management of the business; that it commenced on December 13, 1883, and continued under the firm name of the Crystal Lake Ice Company, and that such copartnership has never been dissolved, and no settlement ever had; that defendant has continued to manage the business according to the arrangement made between the parties, sold large quantities of ice, and received large sums of money; that he has failed to render any account of profits or losses to the complainant, although often requested. to do so, and that he has applied to his own use the funds of the partnership.
It is also alleged that about January 1, 1889, negotiations were entered into between the parties for a sale by the complainant to the defendant of complainants interest in said business and property, and in contemplation that the negotiations would be carried forward, and for the purpose of being ready to close up the same, complainant had drawn up, signed, and acknowledged by himself and wife a quitclaim deed from himself and wife to defendant of all their interest in said property, with the expectation that the parties would meet and adjust the copartnership matters, but that • the said sale was never completed, and no transfer ever made, but, while the said negotiations were going on, the defendant fraud ulently obtained possession of said deed, and caused the same to be recorded; that, after defendant had surreptitiously taken the deed and recorded the same, he executed to the National Bank of Sturgis a mortgage on said copartnership property for the sum of $6,000, which mortgage was recorded in the office of the register of deeds of St. Joseph county, and constitutes a cloud upon the title of the complainant to the property; that complainant is now desirous of dissolving ■ the partnership, and he prays for an accounting. The bill also prays that ¿he defendant be required to remove the mortgage to the National Bank of Sturgis, and that the deed from complainant to defendant be set aside, and that a receiver be appointed.
■Defendant, by his answer, claims that on the sale of the property to the complainant the agreed price was $9,250, the payments being made by three notes of $2,000 each, and one of $1,922.50, said last note being the balance of such purchase price, less the amount due the complainant as principal and interest on a certain note for $1,200 which he then held against defendant; that he took charge of the business, and managed it, without any definite arrangement as to the amount of compensation he should receive, which he alleges was worth several hundred dollars per year; that, owing to unfavorable seasons, #the business was not profitable; and that the receipts from the business were not equal to the cash disbursements made by the defendant. It is claimed by the answer that the notes so given by the complainant were not paid; that he had discounted the most of them at the bank, and had renewed them at complainant’s request, from year to year, taking other notes from complainant for interest, when, on December 14, 1888, complainant again came to him, and asked for still another extension, which defendant refused, the indebtedness then amounting to $11,000, principal and interest; that complainant then gave to defendant a detailed statement of his resources and liabilities, as an inducement to have defendant again indorse for him, and from which statement it appeared that complainant was worth the sum of $25,000 over and above all liabilities; that defendant thereupon, at the request of the complainant, paid for him at the bank $1,403.67, taking his note therefor, but declined to indorse or sign with him in renewal of his indebtedness to said bank for the $6,000 principal yet-unpaid of said original indebtedness; that upon maturity thereof complainant was notified by the bank to pay the same, but he neglected so to do, and instead thereof shifted and transferred his property and assets for the purpose of placing them beyond the reach of execution;, that on January 7, 1889, the bank brought suit on the notes for $6,000 against complainant and defendant, and, on April 9 following, obtained judgment against them thereon, amounting to $6,554.16 and costs of suit, upon which judgment execution afterwards issued, and was levied upon a large amount of defendant’s property, and also a portion of that which complainant-is alleged to have fraudulently transferred; that, in order to save his property so levied upon from sale on execution, defendant was obliged to, and did, pay from his own individual funds the amount of said judgment and coats, and now has pending in the circuit court of said county in chancery a creditors’ bill against said complainant and others, to whom he is alleged to have fraudulently conveyed his assets, to discover property out of which to pay defendant the moneys so paid by him on said judgment.
Defendant further shows by his answer that, while complainant originally agreed to pay $9,250 for the one-half of said property, he has not yet paid sufficient even to reimburse defendant for the actual cash defendant has paid for accumulated interest, and complainant is at the present time indebted to defendant in an amount greater than that of the original purchase price of said property. Defendant further says that, said complainant having failed to do as he originally agreed, and defendant desiring no longer' to continue in business relations with him, on January 2, 1889, he offered to complainant his choice of two propositions, — either that defendant would sell to complainant defendant’s one-half interest in said property and business for $1,500 cash, or that defendant would give complainant $2,000 for his interest therein, or, if complainant declined so to do, either defendant would lease this interest or accept a mortgage as security on the property. On the next day thereafter, complainant stated that he would accept defendant’s proposition to sell his said interest at $2,000, and for that amount would convey the interest to defendant; and thereupon complainant and defendant agreed upon the terms of said sale, and complainant executed and delivered to defendant a good, sufficient, and valid conveyance of all complainant’s interest in said business and the property, and defendant paid the agreed price of $2,000, and thereupon the partnership between complainant and defendant was dissolved, and their partnership relations wholly ceased, and since which time complainant has had no interest in said business or property. Defendant denies that he took said deed surreptitiously from the complainant, as alleged in the bill, or that any fraud was practiced in procuring it. Defendant also denies that he used any of said funds in his private business, and says that, with regard to placing the mortgage upon the property to the bank, it was only because of the injury to his business by the failure of the complainant to pay his indebtedness that he was obliged to place an incumbrance upon his property.
Defendant further alleges that, after purchase of complainant’s half interest, he went to work repairing the machinery and buildings at large expense, and expended large sums of money in filling the buildings with ice, and that all the business was done in his 'individual name, help was advertised for in his name, and, though* he was so engaged for a long time in filling the ice-houses and making repairs, complainant never appeared, nor made any objections, and gave no directions, and took no interest therein,-nor did he offer to furnish any funds, or to be in any way responsible for the same; that the season of 1888 and 1889 happened to be a good year for those engaged in the ice business, and it was only after defendant had succeeded in gathering a crop that it occurred to complainant to claim a half interest in the business, and a repudiation of the sale of his interest to defendant.
The testimony in the case was taken in open court. Even if the testimony failed to contradict and. disprove • defendant’s first claim, the answer put in by him would be sufficient. That there was a partnership between the parties is conclusively shown. It is admitted in very plain and unequivocal terms by the answer, in which it is alleged—
“ That thereupon the partnership between complainant and defendant was dissolved, and their partnership relations wholly ceased, and since which time complainant has had no interest in said property or business.”
Aside from this admission in the answer, — which would of itself, under the allegations in the bill, be sufficient for the court to find the existence of a partnership, — we are satisfied that the court below was right in finding from the testimony that the partnership commenced between the parties on or about December 13, 1883. This partnership has never been dissolved by any act of the parties, unless the deed was made and delivered as claimed by defendant, and operated as a dissolution of the partnership relations. No accounting was ever had, and no such claim is made by the proofs. The deed purports to convey all the interest of the complainant to Mr. Todd in the property and business, and, if delivered as claimed, would undoubtedly have wound up the partnership affairs, and under Mr.' Todd’s testimony would have amounted to a full and final settlement of their partnership business.
Was the deed delivered as claimed by defendant? The complainant contends that it was not. He alleges that it was not, in his bill, and gave testimony on the trial to support that allegation. The defendant answers that the deed was voluntarily delivered, and he testifies upon the hearing in support of statements, in his answer. The burden is upon the complainant to substantiate the truth of his statement. The deed is in defendant’s possession, and has been placed upon record, and prima facie was voluntarily delivered to him. Mr. Todd testifies that he made a proposition to Mr. Major on January 2, 1889, to take $1,500 for his interest in the property and business, or to give $2,000 to Mr. Major; that Major accepted the last proposition, and agreed to take up his note of $1,400 which Todd held, and the balance to be adjusted when they adjusted other matters, and whatever might be then coming Todd was to pay. On the next day the parties met in the law office of Stewart & Meacham. The deed was there, but not signed by Mrs. Major. Mr. Todd insisted that Mrs. Major should sign the deed, when Mr. Stewart directed Meacham to go. out and have Mrs. Major execute it, which was done. Mr. Todd then testifies as follows:
“I looked at it to see that it was all right, placed it in my pocket, and sat there for a few minutes talking about the adjustment of 'the accounts and othei’ matters on the final settlement of the balance of the $2,000. I said: ‘Mr. Major, jump into your bugg'y, and go down and look over the books, and close up the matters, as you agreed to.’ Mr. Stewart said: ‘Why can’t you bring your books and settle the whole matter here?’ I said: ‘ This is not the place «to settle it. If you wish to come to my office with Mr. Major, come.’ I said to Mr. Major: ‘Won’t you come down after dinner?’ He said: ‘No; I can’t.’ Mr. Stewart said: ‘You had better give me back the deed until you and Major get your matters settled.’ I said: ‘Not by any means. Mr. Stewart, you know as well as I do the critical condition of matters. Everything with the exception of this ice property has been mortgaged and levied upon. You are well aware that on that account I am extremely anxious to put this matter in shape as soon as I can.’ I said: ‘I am going to record that deed.”
Defendant further testified that he gave the $1,400 note over to Stewart, and that he put it in his pocket, and he has never seen it since. Defendant went immediately and recorded the deed. There were only four parties in the office at that time, Mr. Stewart, Mr. Meachajpi, and the parties to the controversy. Mr. Stewart was called as a witness by complainant; and his attention being directed to the deed, and whether it was delivered, he stated, substantially:
“As I recollect it, Mr. Major agreed that he would sell his interest in that property and business for $2,000. Mr. Todd said that this note [the $1,400 signed by. Major] was in Wolf’s Bank; that he would get the note; that there was a little difference between them on their accounts in the ice business, which would not exceed $150, — the half, of course, would be for Mr. Major to pay, — and the balance in cash would be between five and six hundred dollars, which he would pay. Mr. Major said he would sell on those terms. * * * Mr. Meaehain went over, and got Mrs. Major to sign and acknowledge the deed. Mr. Meacham and Mr. Major came in. Mr. Todd was there. Mr.. Meacham laid the deed on the table in front of me. Mr. Todd was standing by the side of the table. He reached his hand in his pocket, took the note out and threw it on the table, and took up the deed. I said: ‘Hold on, Mr. Todd; that deed has.not been delivered.’ He said: ‘That is all right; that is all right.’ I said: ‘No, it isn’t all right.’ He went to the stairs, and went part way down. I told him to come back, and I guess Mr. Major did too, but I don’t recollect what Mr. Major did. I told him to come back, tha't he had stolen the deed from my table, and that I didn’t allow people to steal deeds from me. He said it was all right, and I said it wasn’t, and he came back into the office, and I said: ‘Here, Mr. Todd, is that note you put on the table, and I want you to take that and deliver back that deed. You haven’t paid the consideration, and I want you to understand that if you record that deed it is Major’s deed.’ As he started out, I said: ‘Mr. Todd, I want you to understand that this entire trade is now off, and the whole thing is at an end, and you can’t have the property.’ He took the deed with him, but it was never delivered to him. I offered the note back to him, and told him to give back the deed which he had taken from the table; and then in his presence I told Mr. Meacham to take the note, and hold it for Mr. Todd. The note has never been in Mr. Major’s possession. It "is held by Mr. Meacham for Mr. Todd.”
Mr. Meacham was called as a witness for tbe complainant, and corroborates the testimony of Mr. Stewart as to what took place in the office. This is also ■corroborated by the complainant, each testifying that the deed was not delivered, and Mr. Todd was told that he must not take the deed away. It is contended by counsel for defendant that this testimony and the surrounding circumstances show a delivery of the deed. We are not able to view it in that light. It is very doubtful indeed if the testimony of the defendant, when connected with the attendant circumstances, makes out the delivery as claimed. The argument is that, inasmuch as no steps were taken for a period of five months thereafter to set the deed aside, and in the mean time the defendant had gone on with the business himself, and made good profits, complainant ought not now to be permitted to share in the profits thus made. It is also said that the complainant now seeks to take advantage of the situation, and be placed in a position to share in profits thus made, but that, if the defendant had thereafter sustained losses, no such claim would have been made. While, as we have already said, the burden is upon the complainant to show that the deed was not voluntarily delivered, and that the defendant took it away surreptitiously, we are satisfied that the complainant has shown that the deed was not voluntarily délivered, not only by the testimony of these three witnesses, but the circumstances and the defendant’s own testimony point strongly to the conclusion that the defendant at the time of taking the deed away was aware that it was not surrendered to him by Major with intent to have it take effect as a conveyance of all Major’s interest in the property and business. The court below was therefore right in finding that there was no delivery of the deed, and consequently the partnership was not thus wound up.
It is contended, however, by the learned counsel for the defendant that, though the deed was not delivered so as to operate as a conveyance of the complainant’s interest in the property and business, yet their partnership, if one ever existed, was for an indefinite period, and that a partnership indefinite as to time can be terminated at the will of either partner. It is not claimed by the bill, and there is no testimony contained in the record showing, that the partnership between the parties was to continue for any definite time. Counsel are right in the proposition that such a partnership may be dissolved at the will of either party. That question has been settled in this State. Buck v. Smith, 29 Mich. 166; Solomon v. Kirkwood, 55 Id. 256; Walker v. Whipple, 58 Id. 476. After the deed was recorded, the defendant carried on the business in his own name, and excluded the complainant from’ all control over it, or having any voice in its management. He advertised for men anck teams to work, in his individual name, and refused to recognize the complainant’s rights therein. By this means the partnership was dissolved. This fact, however, did not make him the sole owner of the property. He expended large sums of money, and it is not claimed but that he made large profits during the following winter. In doing this, he used all the available means of the partnership; its realty, as well as the tools and machinery. He had also taken to himself the good-will of the business, and to the utter exclusion of the complainant. It was out of these things, and the moneys advanced by him, that the profits were made.
It is contended by defendant’s counsel that after the complainant was excluded from the business, which act worked a dissolution, the defendant could not be compelled to account for profits. The argument is that Major furnished nothing, and took no risks, and would not have been liable for one-half of the losses, if there had been any; that, therefore, all that the complainant can claim on an accounting is the fair rental value of the one-half interest in partnership assets which were used by Todd in making the profits. Counsel for defendant conclude their argument by remarking that, if the deed was delivered, that ends the case. If it was not delivered, the complainant is entitled to an accounting as partner only to January 2, 1889, and as a tenant in common of the property since; that is, for reasonable rent, less repairs. The decree provides for an accounting after January 2, 1889, as well as before; and in this it is contended the court below was in error. Counsel refer us to Lindl. Partn. (2 Amer. ed.) 467, where it is said that the doctrine of laches is of great importance where persons have agreed to become partners, and one of them has unfairly left the other to do all the work, and then, there being a profit, comes forward, and claims a share of it. In such cases as these, the plaintiff's conduct lays him open to the remark that nothing would have been heard of him had the joint adventure ended in loss, instead of gain; and the court will not aid those who can be shown to have remained quiet in the hope of being able to evade responsibility in case of loss, but of being able’to claim a share of gain in case of ultimate success.
But that is not this case. It appears that the defendant not only surreptitiously took the deed away, and claimed to own the whole of the business and property, but that, when the work was being commenced and being carried on, Mr. Major called upon the defendant, and proffered assistance, and was told by defendant that he would not talk with him about it. Complainant, if his testimony is ti;ue, called upon the defendant three jjmes, and his rights were each time denied. He testifies that he had teams idle at the time, and would have put them to work in the business. This is not the case of one remaining idle, leaving the other to do all the work, and then coming forward to claim a share of the profits. He was insisting that he was a partner, and claiming his rights as such; and I know -of no rule of law or equity which should preclude him from having an accounting for profits after January 2, 1889, as well as prior thereto. Of course, whatever moneys the defendant has put into the business to carry it forward must be taken into the account, as well as the indebtedness of the complainant to him which grew out of the purchase of the property in the partnership venture, as the complainant must also do equity. It is well settled that where one partner bolds exclusive possession of the partnership property, and wrongfully refuses to let in the other partner, he will be accountable in a court of equity to such partner for his share of the profits made. Adams v. Kable, 6 B. Mon. 384. So long'as the partnership assets are used to make the profits, so long must such profits be accounted for. Crawshay v. Collins, 15 Ves. 218; Washburn v. Goodman, 17 Pick. 519; Brown’s Appeal, 89 Penn. St. 139.
Claim is also made that, the defendant having taken full charge of the affairs and business of the partnership, he is entitled to compensation for such services. There is no claim that any such agreement existed between the parties. The general rule is that, though each partner is bound to bestow his services ‘and labor with diligence and skill, he is not entitled to any reward or compensation, unless there be an express stipulation between the partners for that purpose. Anderson v. Taylor, 2 Ired. Eq. 420; Bradford v. Kimberly, 3 Johns. Ch. 433. There are no circumstances shown in the present case which would entitle the defendant to compensation for such .service, in the absence of such agreement.
The decree of the court below must be affirmed, with •costs. The cause will be remanded to the court below for the purpose of the account being taken in accordance with this opinion.
Champlin, C. J., Cahill and Grant, JJ., concurred.-
Morse, J.
I do not think there should be any accounting after the filing of complainant’s bill. | [
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] |
Grant, J.
The charter of the city of Grand Rapids contains the following provisions:
1. “ "When the common council of said city decide that the construction of any public work in said city is a necessary public improvement, the board of public works shall determine as to the particular kind and quantity of materials to be used therefor, and estimate the probable cost and expense of such work, and of the material to be used, in detail, and cause to be prepared, so far as necessary, plans and specifications for such work, and report their estimate to the common council as a basis for assessing, or otherwise raising, according to law, the funds necessary to enable the board to go forward and complete such work."
2. “ The work shall be done under the direction and supervision of the board of public works, and upon contracts and under plans and specifications to be prepared^ by the city surveyor, and approved by such board."
3. “ The board of public works shall advertise for proposals to execute the work, and for materials, according to plans and specifications adopted by the board, and may contract with the lowest bidder."
On June 20, 1887, the common council adopted a resolution requesting the board of public works to establish the grade line of Curtis street, and furnish the council with an estimate of the cost of grading, graveling, and paving the gutters of the same, the same being a necessary public improvement. All the subsequent proceedings, including the petition by the property-owners, the estimate, the letting of the contract, and the first assessment to cover the expense, are admitted to have been regular. The estimate submitted to the council by the board of public works was 12,920. Upon this report, an assessment was made by the council, which was satisfactory to the parties interested. Of the bids made the lowest was $2,792, and for that sum the contract was let. In the estimate upon which these bids were made was the item: “Stone paving, 159 square yards." There was- no item for “ paving gutters,” either in the estimate, specifications, or contract, and after the work had progressed somewhat it was discovered that, while the improvement provided for in the original resolution contemplated and required' the gutters to be paved, no provision was made therefor in the contract and specifications annexed thereto. Upon making this discovery, the board instructed the engineer to see the contractor, and obtain from him a proposition to pave the gutters. He offered to do it for the same price per yard for which he had contracted to do the 159 square yards of paving. The engineer reported this to the board, with his estimate of the number of yards of paving, making it 2,135 yards instead of 159 yards, as in •the original contract. This would leave 1,976 square yards of gutter paving, which, at 40 cents per yard, amounts to §790.40. This was approved by the board, and certified to the council. The council thereupon rescinded its former resolution and order providing for the assessment, set aside the assessment roll, and adopted a new resolution and order for assessment, increasing the assessment from §2,920 to §3,970. This new contract was not open to competitive bids. The defendant was proceeding to collect these assessments by sale of the complainants’ lands when they filed the bill in this cause to enjoin the sale. Upon the hearing the bill was dismissed.
The sole question in the case is, was the action of the board of public works in letting the contract for the pavement of the gutters without advertising for bids legal? The action is defended upon the ground that it was extra work, within the meaning of the original contract and the charter. The contract reserved to the defendant “the right to change any portion of the work from time to time, and to make all necessary additions thereto or deductions therefrom.” Section 15, tit. 6, of the charter provides that the plans and specifications of the work, for the payment of which an assessment is ordered to be made, may be changed, and the work may be added to or diminished, at any time before the completion of the assessment roll therefor, but not after-wards ; and, if it shall appear that a greater sum of money has been expended in the completion of such improvement than was estimated, the common council may direct the assessment of the same on the owners and occupants of houses and lands benefitted by the improvements. This section does not refer to the contract for the work which, under the charter provision above given, must be awarded to the lowest bidder. The estimate and not the contraot is made the basis for the assessment. If the work costs less than the estimate and the amount assessed, the charter provides the distribution of the balance among the property-owners who were assessed.. If it costs more, a new assessment may be made. It is true that the paving of the gutters was within the scope of the improvement, but this did not confer upon the defendant the right to dispense with the charter requirement for competitive bids. The whole improvement required a certain number of cubic yards of excavation and embankment, also road gravel, screened gravel, top dressing, and a certain number of thousand feet of timber, and these were stated in the estimates. Jf the contract had been for making the excavations, which included only about one-third of the cost in the original contract, would it be contended that the defendant could let private contracts for the balance of the work upon the theory that it was within the scope of the improvement? The result would be a practical annulment of the provision for competitive bids. Under this theory a contract to grade might be extended into a contract to pave; a contract to pave with stone into a contract to pave with wood or asphalt at a greatly increased cost; a contract for any distinct part of a public improvement into one for the whole. In Brevoort v. Detroit, 24 Mich. 322, the bid and contract were for paving about one-half the distance, or “farther, if ordered.” It was held that the whole work Avas covered by the original bid, although the council ordered the balance of the work to be done. The changes covered by the above section of the charter, in so far as they can be held to authorize any change in the contract, are limited to the work provided for in that instrument. They cannot include distinct work not therein mentioned nor contracted for. It is of no consequence that a part of the public improvement is omitted from the estimate and contract by mistake. The result is the same as if it were intentionally done. This work of paving the gutters was entirely outside the contract. The private contract for the performance of the same was without authority and void. McBrian v. City of Grand Rapids, 56 Mich. 95. It is proper to add that there is no evidence of bad faith or improper motives on the part of the city authorities and the contractor.
The decree of the court below must be reversed, with the costs of both courts, and a decree entered here restraining the collection of the amount so held to be illegally- assessed.
The other Justices concurred. | [
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] |
Champlin, C. J.
Suit was commenced in justice’s, court by the City Bank of Dowagiac against Caiphas Dill to recover the amount claimed to be due upon a due-bill signed by Dill, payable to G. S. O’Brien or bearer, one day after date, for $80. It was dated November 10, 1886. The parties appeared before the justice, when the plaintiff declared verbally upon all the common counts in assumpsit, and specially upon the due-bill, which reads as follows:
“Dowagiac, November 10, 1886.
“Due one day after date, G. S. O’ Brien or bearer, eighty dollars ($80.00), for value received, with interest.
“O. Dill.”
The plaintiff filed the due-bill as a full bill of particulars. The defendant pleaded—
“The general issue; want of consideration; no consideration for the note; note came into plaintiff’s hands after it was due.”
After the testimony before the justice was taken, plaintiff, by leave, amended its pleadings “so as to show that its interest in the note sued on extended only so far as the principal indebtedness of G. S. O’Brien’s note to the plaintiff, collateral to which note is the note in issue of Caiphas Dill;” and thereupon the note of G. S. O’Brien was offered in evidence by the plaintiff, and reads as follows:
“Dowagiac, Mich., Nov. 19, 1886.
“ On demand, after date, I promise to pay to the order of D. Lyle & Co. fifty dollars at the Dowagiac City.. Bank, Dowagiac, Michigan, with interest at ten per cent, per annum. Value received.
“G. S. O’Brien.”
The following indorsement appears on .said note:
“Dowagiac, April 1, ’87.
“Pay to the order of City Bank.
“D. Lyle & Co.”
On the trial in the circuit the plaintiff introduced testimony tending to prove that about April 1, 1887, the notes were assigned to plaintiff by the firm of D. Lyle & Go.; that the note of Dill for 880 was pinned to the note of O’Brien for 850 as collateral security therefor; that D. Lyle & Oo. loaned to O’Brien, on November 10, 1886, 850, which transaction was not evidenced by a note, or in any other manner than by a slip made by them, and which was regarded by them as a cash item; that at the same time they received from O’Brien the due-bill (written in pencil) for 880 as a collateral security for such loan of 850; that afterwards, and on November 19, 1886, they received from O’Brien his note for the 850 paned to him on the 10th, and that they continued to hold the note for 880 as collateral security for this note. There was no assignment of the indebtedness of 850, which existed in the form of a cash item from the 10th to the 19th of November, from D. Lyle & Oo. to the City Bank. It does not appear that Dill knew of or consented to the change in form of the indebtedness from a cash item to the note, or that he consented in any manner that his note might be held by D. Lyle & Oo. as collateral security for such note.
Defendant claimed, and gave testimony of himself, corroborated by the testimony of two witnesses, that he, being indebted to one Gage in the sum of 880, was requested by O’Brien to permit him to pay Gage, as he thought he could induce Gage to take a wagon and some groceries, and Dill pay him (O’Brien) the money due Gage, as he could make better use of the money than he could of the property, to which Dill assented; that O’Brien then drew up the due-bill for 880, and Dill signed it, O'Brien agreeing that, if he did not succeed in paying Gage in the manner proposed, he would return the due-bill to Dill; that this was on November 10; that afterwards the due-bill was still in O’Brien's possession; that on November 24, 1886, Gage, O'Brien, Dill, and Srackangast were in O’Brien's store, and Gage requested Dill to pay him the $80 which he owed him; that Dill asked O'Brien if he had paid Gage, and he replied that he had not, and said, “You pay Gage;" that Dill thereupon paid Gage, and demanded the due-bill from O’Brien, who replied he had put it in the bank three or four days before, but that. Dill need not be troubled about it, as he would take care of it; that Dill told him he had no right to put it in the bank, and he said to Dill not to be troubled, as he would get it, — take care of it.
The court presented the case to the jury upon the question whether the firm of D. Lyle & Oo. received the ■due-bill as collateral security before it was due, and told them that the introduction of the note in evidence made a prima facie case; and that—
“When Mr. Dill questions the good faith of the assignment of this note before maturity in order to defeat a recovery, he must, before he can recover, satisfy you by a fair preponderance of evidence that the assignment to Lyle & Co. was made after maturity, or that the note was not made for value, or that Lyle & Co. took the note with notice of the defense interposed by Mr. Dill.”
Under the testimony disclosed by this record, this charge as to the burden of proof is erroneous. The testimony of defendant, if believed, made a complete defense to the note, and threw the burden of proof upon the plaintiff to show that D. Lyle & Co. ¡purchased it before maturity, for value, and without notice of facts which constituted a defense as against the note in O’Brien’s hands. Manistee National Bank v. Seymour, 64 Mich. 59. This testimony should have been submitted to the jury under proper instructions as to the law, in case they found it true.
If the jury should find the facts as the defendant’s testimony tended to prove them to be, then the plaintiff could not recover in this case, for the reason that, although the note, if received by D, Lyle & Go. before maturity to secure the payment of cash loaned to O’Brien, might be held by them for a repayment of such cash, yet, after the maturity of the note, their protection as innocent purchasers did not extend to holding it as a collateral security for a new and different engagement of O’Brien, as evidenced by the note of November 19. Here was a new and additional agreement to pay interest at the rate of 10 per cent. To all intents and purposes it was a new and original agreement, and a new pledge of the note for $80 after its maturity, and therefore open to any defenses which existed between O’Brien and Dill. It is this note which forms the basis of any recovery by the plaintiff as assignee from D. Lyle & Co., and not the original indebtedness or consideration passing between O’Brien and D. Lyle & Co., for which the $80 note was pledged as collateral. Had the note of November 19 not contained any new agreement, but merely evidenced the original transaction, the case might be different if the pleadings had been such as to permit proof to be made of the original agreement.
We see no objections to the deposition, except that the papers were not attached together; but, as it is conceded that they were received by the clerk inclosed in a sealed envelope, and having been taken under stipulation, we are not inclined to reject them on that ground. The return shows that the witness was sworn both before and after giving his testimony.
The judgment is reversed, and a new trial granted.
The other Justices concurred.
Plaintiff was the successor of D. Lyle & Oo., a firm of private bankers, and the assignment of the O’Brien note was made to the bank in the firm name, after the death of Mr. Lyle, by one of the surviving partners. | [
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] |
Champlin, C. J.
These two cases are identical in their facts, with the exception that the bills of complaint are filed by two different tax-payers of the city of Saginaw. They have been argued as one cause, and will be treated as but one case. This appeal is from a decree sustaining the demurrer of the defendants to the bill of complaint, and dismissing the bill for want of equity.
The case stated by the bill is that the complainant is a resident of the city of Saginaw, and the owner of real estate therein subject to taxation worth $10,000, and that the common council of the city, acting under the provisions of section 24 of title 5 of the charter of the city, bejng Act No. 455 of the Local Acts of 1889, on June 23, 1890, adopted a resolution for the issuing of the bonds of the city to the amount of $125,000, to be executed by the proper officers of the city, and to be sold and the proceeds thereof to be used for the purposes named in said section, viz., the purchase of a site for and the construction of a city hall; and that in pursuance of such resolution the officers of the city, are preparing such bonds for execution, and will execute and deliver them to purchasers unless restrained by order of the court; and that the negotiation of such bonds would result in the taxation of the complainant’s property. To prevent a cloud being cast upon his property by such taxation, he prays that the defendants be restrained from taking any further steps in the execution or negotiation of the bonds, and that the acts of the council be declared void. The bill alleges that the common council have taken no steps whatever to obtain an expression of the electors of said city as to their wishes and desires as to the issuing of said bonds and procuring a site for the construction of the city hall.
The reasons set forth in the bill of complaint why the proposed acts of the common council are illegal are as follows:
“ Said common council have not submitted the question of issuing said bonds to the electors of said city, as required by section 13 of title 3 of said charter.
“ That portion of the said charter under which said common council claim to act in issuing said bonds without the authority or sanction of said electors, viz., section 24 of title 5 of said charter, is illegal, null, and void, because the same is a violation of the constitutional rights of said city of Saginaw, in that it deprives said city of the right of local self-government.
“The issuing and negotiation of said bonds will render it necessary to raise upon the taxable property of said city, in addition to all other taxes, a sum sufficient to pay semi-annually the interst on said bonds, which taxation will at once begin, and an additional sum to pay the principal of said bonds as the same shall mature.
“ Such taxation, being made, as it is by our laws, a lien upon real estate, will cast a cloud upon the title of your orator’s real estate in said city that he is entitled to prevent by the aid of this court.”
It is claimed in the brief filed in behalf of Spaulding that in the enactment of this section the Legislature of the State exceeded its constitutional powers,—
“ 1. In that it conferred upon 15 residents of the city all rights, powers, duties, and privileges of duly elected aldermen of the city of Saginaw, and created them a part of the common council of the city.
:‘2. That it fixed a site for a city hall for the city, and made it the duty of the common council of the city, created as in said charter provided, to purchase the site so fixed upon, and to erect a city hall thereon, thereby making it the duty of said common council to issue the bonds of the city to raise money to purchase the site and erect the hall.”
We shall not again discuss the organization of the city government for the city of Saginaw. The 15 aldermen referred to are acting as the aldermen of the consolidated city, and they are at least de facto such officers as they represent themselves to be; and their acts, while acting in that capacity, will be valid. We shall not try their right to hold the offices in this collateral proceeding.
There can be no doubt that it is within the province of the Legislature to authorize the city of Saginaw to issue its bonds for the purposes of purchasing a site for the city hall, and erecting thereon a building for the purposes of the city. And it is equally without question that section 24 of title 5 of the charter authorizes, in express terms, the common council of the city to issue the bonds of the city for the purpose of raising money to purchase a site for and the construction of a city hall in said city. In this respect no right of local self-government is infringed.
But it is claimed that the Legislature had no authority to locate the site or to prescribe the boundaries within which the site should be located, nor to provide that all the offices .of the city should be located and kept in such city hall when completed; and that, because the Legislature attempted so to prescribe the boundaries and the purposes for which the city hall shall be used when completed, the whole section is void, and that they have no authority under this section to issue the bonds of the city for the purposes stated; that the two are so blended together that they cannot be separated; that the city has no right or authority to issue bonds for the purpose of purchasing a site, unless it be the site within the district mentioned in the charter; and that the location of a site for its public buildings is within the exclusive control of the municipality. The main ground of contention on the part of the complainants is based upon that clause of the section in which it is made the duty of the common council to proceed immediately to procure such site, and construct such city hall within said boundaries. , This, thay claim, is mandatory, and to carry it into effect makes it mandatory also to issue the bonds in question.
The proposition is doubtless true that for mere matters of local concern it is not competent for the Legislature to force a municipality to tax itself or to issue bonds, where the public interest is not concerned. It is, however, contended that, the authority being fully granted by this section to issue the bonds, if the portion making it the-duty of the common council, to proceed immediately would be an infringement on the constitutional right of local self-government, yet that part granting the authority may stand, and the portion which is objectionable, on account of being opposed to the Constitution, will be null and void, and the council will be at liberty to proceed to issue the bonds under this section, and to purchase a site, under the discretion vested in them by the charter. But we think that the constitutional question is not presented by the bill of complaint in such shape as to call for any decision as to the validity of any portion of the section.
It does not appear that the Legislature has compelled the common council to proceed to issue the bonds complained of. It granted them full authority to do so, and they have acted, and are about to act, in the exercise of the authority granted. There is no compulsion over their action by the Legislature. It cannot be presumed that they were influenced to violate the 'Constitution. If the clause making it their duty to .proceed immediately to select the site would be a violation of the Constitution, we should expect that they would wait to be compelled to act, and not voluntarily act in violation of that instrument. The whole subject-matter of raising these bonds is by the statute placed in the control of the representatives of the municipality, in consonance with the principles of local self-government. No one is coercing them, and if they do not see fit to place themselves in a position to raise the question of the constitutionality of the portion of the section referred to, a third person, not representing the municipality, cannot do so.
It not being necessary for us, in the view we take of the case, to pass upon the question of the constitutionality of this section of the charter, we decline to do so. We do not say that the provision making it mandatory upon the council to select a site in a particular portion of the city -is a constitutional exercise of legislative power; neither do we deny that it is such. Whether it is such or not, the complainants in these bills are not in position to raise the question, and the decrees of the circuit court must be affirmed.
The other Justices concurred. | [
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] |
Morse, J.
April 13, 1875, Helen L. Lathrop executed her last will, in which she gave her son, John N. Derby, a legacy of $15,000, and devised to her husband, George A. Lathrop, certain lots, describing them, in Bast Saginaw. This will was duly admitted to probate December 30,-1875, and George A. Lathrop and Augustine S. Gay-lord appointed executors, who both duly qualified. Gay-lord, however, took no part in the actual management of the estate, and died June 21, 1877.
The will of Mrs.' Lathrop gave all her personal clothing and jewelry to a sister. Then follows the bequest to her son, John N. Derby, of the homestead and all the furniture and personal property therein;—
“Also the sum of $15,000 in money, the said money to be kept invested, and the interest thereof applied to his maintenance and suitable education until he shall attain the age of 21 years, the principal and any accumulation of the interest not required for the purpose aforesaid then to be paid to him.”
Then follows a devise to her husband as follows:
“ Fourthly. I give and devise unto my beloved husband, George A. Lathrop, his heirs and assigns forever, lots 4 and 9, and the south 24 feet of lot 5, in block 15, according to Hoyt’s plat of East Saginaw, with the houses thereon.”
She also gives him “ block 10 in Derby’s addition to the village of Salina, now in the city of East Saginaw, to dispose of the same when and how he may deem proper,” the proceeds of the same to be used for the benefit of his son, George D. Lathrop. She also devises certain real estate to her sister, and $500 to a domestic in the family, and $6,000 to her executors in trust, the interest of such sum to be paid in equal proportions to a brother and sister annually, during their natural lives, the principal sums at their deaths to be paid to her son, John N. Derby, if then living and of the age of 21 years; the said sum to be mainly made out of the sale of real estate. The will then provides that if, after the payment of her debts and the charges of administration, her estate shall prove insufficient to pay the legacies in full, then she directs that they be paid in the following order:
1. The bequest to her sister of her personal clothing and jewelry.
2. The bequest to her son, John N. Derby.
3. The devise and bequest in the fourth clause of her will, to her husband, George A. Lathrop.
—And thereafter naming the order in which she wishes the other bequests paid. All the rest, residue, and .remainder of her estate she gives to her son and husband, share and share alike. She appointed Lathrop and Gaylord her executors, and authorized and empowered them to sell and convey any and all of her estate not specifically devised in the will, for cash or upon credit, or both, as to them might seem best, and out of the proceeds of such sales to pay and discharge the debts and expenses of administration, as well as the legacies; “said legacies to be paid as soon as convenient after my ■decease, without sacrifice to my estate.”
This matter comes^ before us upon petition to the probate court and order of such court, appealed from to the •circuit court and affirmed and modified, and from that •court brought here for review upon writ of error. The points involved in said petition and order will be discussed as we proceed. The modification of the probate ■order made by the circuit court is not material to this issue. There were findings of fact by the circuit judge, and we shall first give a summary of so much, of such findings as is necessary for an understanding of the matters at issue.
February 24, 1876, Lathrop, as executor, filed an inventory in the probate court, showing real and personal estate to the value of $26,408.91. October 25, same year, he filed a partial account, showing cash received by him up to October 23, $5,266.23; disbursements, $2,124.89. August 21, 1879, another account was rendered, showing total amount received by him, $12,734.52, and total amount ■expended, $12,137.02, leaving balance of $597.50. In the inventory made and filed in the probate court the land devised to Lathrop, and block 10 of Derby’s addition, ■devised to him for the benefit of his son, were not included. December 18, 1877, Lathrop traded seven lots in this block 10, and lot 9, block 15, Hoyt’s plat, to one Henry Colclaugh for a farm in Boyal Oak, for the agreed ■consideration of $3,500. The title to the farm was taken in the name of Joseph Lathrop, of Detroit, and the transaction was had without any action by the probate ■court thereon. June 18, 1881, Lathrop sold to Emil Moores lot 4 and the south 24 feet of lot 5, block 15, Hoyt’s plat of East Saginaw, being part of the property devised to him in the fourth clause of his wife’s will, for $2,000, which sum Moores paid him in cash, and which was its full value at the time of such sale. No proceedings were had in the probate court at the time. Moores knew that said property was a part of Helen L. Lathrop’s estate, but did not himself investigate the title, but left that entirely with his attorney, and in his purchase relied upon the report and opinion of such attorney. The conveyance was in two deeds, — one a quitclaim from G-eorge A. Lathrop, and the other an executor’s deed, in which Lathrop covenanted only as against his own acts.
Lathrop, before February 9, 1883, paid all the debts and expenses of death and administration except his own charges. He made sale of the real estate devised in the sixth clause of the will to Mrs. Lathrop’s sister, Caroline E. Hayden, for the purpose of paying debts and the legacy to John N. Derby, under due application to the probate court and • the order of such court granted on such application, and had converted into cash all the rest of the real and personal estate of his wife, except two co'htracts for the sale of land, upon which there was due about $115. June 3, 1880, the probate court ordered that Lathrop should close the settlement of the estate within six months. He failed to' do so, and was cited into court to account, and to show cause why he should not pay over to the guardian of John N. Derby the legacy due to him. Lathrop, in obedience to this citation, filed his account, upon which hearing was had. This account was filed February 9, 1883. In this account for the first time he charged the estate with the moneys paid out by him in the farm transaction with Henry Colei augh, and charged as a credit to the estate the money received by him in the same transaction. He also credited the" estate with the $2,000 received from Emil Moores. But the probate court struck out all the items of said account on both sides, credit and debit, in relation to the farm transaction, and also the $2,000 item received from Moores. The record does not contain the full, itemized account. It shows only the items that were disallowed by the probate court.. The account, as filed, showed total receipts, $33,821.16, and total'cash disbursements, $29,980.62; leaving a balance in favor of the estate of $3,840.54, from which was to be deducted the compensation of Lathrop as executor.
It is also found as a fact that Lathrop took possession, after the probate of the will, of the real estate devised to him and his son, and received the rents and profits thereof, and paid the taxes and repairs. June 9, 1880, a paper was filed in the probate court showing that this property was not included in the inventory of his wife’s estate, because the said estate had been supposed to be sufficient to meet all prior demands, and that individual possession of the property had béen taken by said Lathrop. The moneys received by him for rents, and the moneys expended by him on said property, were included by him for the first time in his account of February, 1883, and on the hearing of such account all these items were stricken out. After striking out all these items heretofore mentioned in regard to the farm transaction and this property devised to him and his son, and disallowing an item of $500 paid by him to Mrs. Ihrig, the probate court charged him for $1,500 lost by mismanagement of certain property, and allowed him $355.44 for his services and expenses as executor, and a balance was struck, from which it would appear that he was found to be in debt to the estate in the sum of $5,177.70. It was also ordered that the legacy to Derby had the preference in the estate, and $6,601.04 was found to be still due and unpaid upon it; and Lathrop was directed to pay the said sum of $5,177.70 over to David H. Jerome, the guardian of said Derby. Lathrop failed to make this payment, and, pending the hearing on account, absconded.
In October, 1883, Jerome, as guardian of Derby, took steps to bring suit upon Lathrop’s bond as executor. Judgment was rendered in this suit December 3, 1885, for $6,100.88. The case went to the Supreme Court, and was affirmed April 28, 1887. Execution was duly issued.and returned, and no property could be found out of which to pay such judgment. May 26,' 1887, Jerome filed the petition in this case in the probate court, setting forth the essential facts, claiming that the land devised to Lathrop and his son had not been lawfully disposed of; that the same was legally still a part of Mrs. Lathrop’s estate, and subject to the legacy of Derby; and praying that the same might be sold under the order of such court to pay said legacy, and that the lands sold to Emil Moores be first sold, and then the lands traded to Cololaugh for the farm in Eoyal Oak, and lastly, lot 10, block 10, of Derby’s addition, sold to -Eli Le Clero. All the parties interested were notified of the hearing of said petition. December 10, 1887, the probate court granted the petition, and found the balance due to Derby to be $8,722.66. Lathrop, before the filing of this petition, had been removed, and Jerome appointed administrator, in which capacity he filed such petition. The court ordered the sale of the property, changing somewhat the order in which the property was to be sold, but leaving the Moores land the first to be sold, as prayed in said petition. Moores appealed to the circuit court, stating his reasons.
Those relied upon here are as follows:
1. The probate court had no jurisdiction to make the order.
2. The executor, George A. Lathrop, having had in his hands sufficient assets and money to pay the legacy, the amount of the legacy unpaid must be collected of him and his surety on his bond, and there is, therefore, no lien on Moores’ land.
3. The land was specifically devised to Lathrop, and not subject to the payment of Derby’s legacy.
We are satisfied that the land devised to Lathrop was •subject to Derby’s legacy. It is expressly made so by the terms of the will, provided that, after the payment of the debts and expenses of admiáistration, the estate shall be found to be insufficient to pay all the legacies in full. Moores cannot be considered a good-faith purchaser. He knew, or could have known by consulting the records in the probate court, that there had been no settlement of the estate, and that the legacy of John N. Derby had not been paid. He could get no better title to the land than Lathrop had at the time it was sold to Moores.
It is contended that there was personal property enough in the hands of Lathrop to have paid this legacy, and that Moores ought not to be held responsible for the wasting of it, or its misapplication by Lathrop. There is no showing in the record what the amount of the personal property was. The account of Lathrop, as settled by the probate court, shows that he had in his hands $5,177.70 only that could be applied on this legacy, when there was $6,601.04 due upon it. The account as allowed is not controverted, nor is it shown what his disbursements were, or where his receipts of cash came from. We must consider, therefore, that his expenditures were lawful and proper. If so, then there was not cash •enough, without resorting to this real estate devised to him for his own use and that of his son, to pay this legacy in full.
The question, then, arises, who is to lose this $5,177.70 which Lathrop had in his hands, and ought to have paid on this legacy, but which he has squandered or stolen? Shall the infant heir lose it, or shall Moores, who-bought under the circumstances heretofore noted, lose what he paid upon the land? We think the land must, pay it, or be used as far as it will go to do so. No one, if Lathrop had never sold the land, would deny the right of the probate court to subject the same under the will to the payment of the balance of this legacy. Lathrop could not be heard to say that he had received personal or other property of the estate sufficient to pay this legacy, but he had wasted or stolen it, and therefore Derby must look to him personally and his bonds to make up the deficiency, and that the lands, although not disposed of, and still in his possession, could not be sold by the probate court to pay such legacy. He could not thus profit by his own wrong. As Moores could get no better title than Lathrpp, and stands in his shoes, the legatee has the same right against the land standing in his name, unless some laches or statute of limitations has deprived him of such right.
It is further urged against the authority of the probate court to make this order that the suit to subject this land to the payment of this legacy should have been brought in equity; that, if this land is .charged with its proportion of the legacy, all the other lands, sold or traded by Lathrop are equally chargeable, and all persons purchasing such lands must be made parties; that a court of equity only, in such case, can fix the rights of the different parties, and do justice between them. We are not informed by this record how much real estate the testatrix owned at her death outside of the homestead and the lands devised to Lathrop and Caroline E. Hayden, except as stated in the petition of Jerome; and in such petition it is not stated to whom the same was sold, or how much was received upon the sale of the same, but it would seem from the findings of fact that the same was sold either under the order of the probate court or with the consent of such court; and the petition avers ■that there is no property remaining out of which to make this legacy, except the lands ordered to be sold, in response to the prayer of such petition. We cannot assume that the other real estate was sold for any other purpose than a lawful one, to wit, the payment of debts and this legacy to Derby; and it is expressly found by the circuit judge that the real estate devised to Caroline E. Hayden was sold by the order of the probate court for such purpose. In relation to the real estate traded to Henry Colclaugh, it was stipulated by Moores’ attorneys that the same might be discharged from the payment of the Derby legacy upon .the payment of $2,500, to be applied upon said legacy; the amount paid being considered equal to the value of said real estate. It must therefore be considered that the real estate purchased by Moores is still the property of Mrs. Lathrop’s estate, and nearly, if not quite, all the property that can be used to pay the balance of this legacy. We do not think it was necessary to go into equity to subject this land to the payment of this legacy.
It is further claimed that the lapse of time is a bar to the enforcement of the right of the legatee to follow this land for the payment of his legacy; that the time in which an executor can be authorized to sell lands for payment of legacies was limited to six years under the ■statutes in force at the time of Mrs. Lathrop’s death. The will was probated December 30, 1875. The executors qualified January 22, 1876. We think the court of probate had not lost its jurisdiction. The estate had never been closed, and there was a will, which, by its terms, evidently did not intend that the estate should be closed in six years. This case is ruled by Church v. Holcomb, 45 Mich. 29, 37, 38.
It must be remembered, also, that John N. Derby is the only heir at law of Mrs. Lathrop, and only he, George A. Lathrop, and Moores are interested in this question. Derby is moving for the sale, and Moores, as heretofore ruled, must stand in the place 0f George A. Lathrop, and has no better right than Lathrop to contest these proceedings. As against Lathrop, the wrong of Lathrop would excuse the lapse of time, as there has been no laches on the part of Derby. Lathrop was brought to> account while the estate was still in his possession as executor, and not closed; and as soon as Lathrop absconded proceedings were commenced, and have since been prosecuted with commendable promptness and vigor, to regain the scattered and wasted property of this estate for the purpose of applying it to the payment of this legacy. The same reasons which would prevent Lathrop from interposing the defense of lapse of time and laches against the subjection of this real estate to the payment of this legacy apply to Moores, and are a perfect bar to> the same defense in his hands.
The finding of the circuit court, affirming and modifying the order of the probate court, is sustained, with costs, and it will be certified accordingly.
The other Justices concurred.
See 65 Mich. 652. | [
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] |
Grant, J.
This is an action of ejectment. Judgment was rendered in the court below for defendants, and plaintiff appeals.
Plaintiff claimed title under a tax deed based upon the sale of the land for the State tax of 1873, all other taxes having been paid. Defendant Monroe held the original government title to the land, and the other defendants were in possession under him. Plaintiff's title rests upon the validity of his tax deed. Various objections are raised to its validity, two of which are fatal, rendering a. discussion and determination of the other objections unnecessary.
The proceedings of the board of' supervisors in apportioning the State tax, and equalizing the assessments, was not signed by the chairman of the board. How. Stat. § 501, is as follows:
“Every order, resolution, and determination of such board of supervisors, made in pursuance of this act, shall be recorded in the records of such board, and signed by the chairman and clerk of such board."
We think the above section includes all the proceedings required by law to be entered upon the records of the board. This being so, the case at bar is ruled by Pearsall v. Board of Supervisors, 71 Mich. 438. See, also, Sibley v. Smith, 2 Mich. 486. The above section was enacted in 1851. The case of Lacey v. Davis, 4 Mich. 140, involved proceedings had in 1842 and 1844, when no such statute was in force, and the decision was based upon the fact that the record there involved was not required to be signed by any one. The raising of taxes is among the most important jmwers conferred upon the board, and the reasons stated in the Pearsall case, by Mr. Justice Champlin, apply with equal force to the case at bar.
After the supervisor had completed and certified to his roll, had submitted it to the board of supervisors, and had received it back from the board with the certificate of the chairman affixed thereto, the supervisor, without any authority from the board, made several substantial alterations in the roll, by adding a number of parcels of property thereto, and increasing the assessment of one parcel from $80 to $800. .The additions thus made amounted to about $3,500. This is admitted, but it is insisted that the defendants cannot attack the validity of the assessment because they are not injured thereby. This case is ruled by Ferton v. Feller, 33 Mich. 199, where the unauthorized change made by the assessor was to the advantage of the tax-payer. The supervisor’s authority over the roll had ended, so far as making any changes was concerned. Public policy will not permit any tampering with the roll after it has been completed and certified to, notwithstanding the intention be good, and the taxpayer not injured. The reasons for this are very ably and forcibly stated by Mr. .Justice Christiancy, in Clark v. Axford, 5 Mich. 182, and by Mr. Justice Graves, in Ferton v. Feller. If the supervisor may make one material change, he may make them ad libitum. The-evils of such a course are apparent. The door to them must be kept closed. The roll thus changed is not the-tax roll authorized by law. Its legal identity is destroyed..
Judgment affirmed,- with -costs.
Morse, Cahill, and Lons, JJ., concurred. Champ-lin, C. J., did not sit. | [
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McGrath,- J.
This is an action upon a five-year policy of insurance, issued by defendant May 14, 1887, — $100 on plaintiff’s frame dwelling-house; $700 on household furniture, beds and bedding, wearing apparel, provisions and stores, piano, organ, and sewing-machine, in said dwelling; $60 on frame ice and milk house; and $50 on dairy furniture, provisions, and stores, — situate on a farm owned by plaintiff. The application sets forth that applicant’s interest in the property was under contract with one Lacey, who held the title, and that the property was incumbered with the sum of $3,000 due said Lacey. The application contained the following printed provision:
“I hereby agree that * * * the foregoing shall be deemed and taken to be promissory warranties, running during the entire life of said policy. * * * The company shall not be bound by any act done or statement made by or to any agent or other person which is not contained in this, my application.”
The policy refers to the application on file in the office of the company, and provides that the loss is — »
“To be paid 60 days after notice and due and satisfactory proof of the same shall have been made by the assured, and received at the company’s home office at .Boston, Mass., in accordance with the terms and provisions of this policy hereinafter named.”
The policy contains the following provision:
“By the acceptance of this policy the assured covenants that the application herefor shall be and form a part hereof, and a warranty by the assured, and the company shall not be bound by any act or statement made to or by any agent unless inserted in this contract. * * * Any fraud or attempt to defraud or deceive on the part of the assured, and any misrepresentation in the proofs or examination as to loss or damage, shall forfeit all claims under this policy. * * * All persons having a claim under this policy shall forthwith give written notice of the loss or damage, and within thirty days furnish proofs thereof, signed and verified by the claimants;” and then follows a statement as to what the proofs shall contain.
Fire occurred March 27, 1889, and the- company refused, to pay the loss, because:
1. The representation made in the application as to the incumbrance upon the property was untrue, in that the amount thereof was $3,000, instead of $2,000, as stated in the application.
2. The proofs of loss were not furnished until May 25, more than 30 days after the loss occurred.
3. The proofs of the loss embraced property that did not belong to the assured, and therefore all claims under the policy were forfeited.
It appeared upon the trial that one Taylor, an agent of the defendant, solicited the insurance, and filled’ out the application ; that plaintiff did not read the application, but signed it when presented by Taylor; that Taylor asked her how the land was owned, and she told him that she had bought it on land contract from one Lacey; that the purchase price was $3,500, and that she ■ had paid $500 down, and kept the interest up. No testimony was offered by the defendant, and plaintiff’s testimony is uncontradicted. To the proofs of loss was attached plaintiff’s affidavit, which contained the following clauses:
“That the annexed and foregoing schedule of articles is a true list of the articles insured under said policy which were burned and totally destroyed by said fire; that the same are a total loss to deponent; that said property insured under said policy, and burned by said fire, as aforesaid, was free and clear from incumbrance, lien, or levy; and that claimant’s title thereto is the absolute ownership thereof. * * * * * * *
“That the farm and dwelling-house and ice-house were purchased by assured upon contract, which said contract is held and owned by William Lacey, of Holly, Mich., upon which there still remains unpaid three thousand dollars.”
The proofs of loss contained an itemized list of articles }Ost by the fire, with the present value of each article. It included some of her husband’s wearing apparel, and some of the apparel of an adopted son. Plaintiff testified that she was told by Taylor to include in the list all articles burned in the house, and that she supposed that her husband’s wearing apparel was covered by the policy.
Upon the first question raised by the defendant, the court instructed the jury as follows:
“ One fact for you to determine there is, wheth'er the plaintiff, Mrs. Tubbs, correctly informed the agent as to the actual amount of incumbrance, or the amount still due, upon the premises. You will determine that fact. If you find that she did correctly state it, you will determine the fact whether the agent understood it, — whether he inserted the amount in the policy understandingly or not. You will also determine whether it was inserted by mistake. Then I say to you, as a matter of law, that if she correctly informed him as to the amount, and the statement in the application, that the incumbrance was $2,000, was inserted by the agent knowing the true amount, or through mistake, and the application was presented to her to sign, and she was requested to sign it, and didn’t read it through, understanding by the acts and conduct of the agent that the application correctly stated the answer which she had made, and she so signed it, and with that impression, derived from the acts and conduct of the agent, then the claim of fraud could not be maintained here, and the policy would not be void on that account. But if she did understand the amount that was stated in the application lierself, and the agent had misunderstood the statement, didn’t understand it, or made a mistake in regard to it, as I say, if she understood the amount which was inserted in the application, the agent not having got the answer correctly, through deafness, or any other reason, and she knew the amount stated in the application to be wrong, and signed the application so knowing, then that would avoid the policy. Now, there is a question of fact for you to determine as to how that amount came in -the application, and what the parties knew and understood about it.
“ I will say, further, if she had an opportunity to read that application, and neglected to do so of her own motion, of her own will, not misled by the acts or conduct of the agent, or lulled into silence as to what it contained by his acts and conduct, in preparing the application and all the circumstances surrounding the preparing of it; that it was a mere act of carelessness or neglect on her own part, — then, under those circumstances, the policy would be void, and she could not recover in this case.”
This question has been frequently before this Court, and - there was no error in the instruction given. See Crouse v. Insurance Co., 79 Mich. 249. See, also, Insurance Co. v. Brodie, 52 Ark. 11 (11 S. W. Rep. 1016), and cases cited. The only distinction between the case cited and this is that the application here contains a restriction upon the agent’s power, which is as follows:
“The company shall not be bound by any act done or statement made by or to any agent or other person which is not contained in this, my application.”
But the act done by the agent was a misrepresentation made by the agent in the application itself at the inception of the contract, and the application was not attached to the policy, but was retained by the company. It had never been read by the plaintiff. She therefore had no notice of the misrepresentation, or of the restric tion upon the agent’s powers. The rule laid down in the cases cited, and supported by the clear weight of authority, is that the knowledge of the agent is the knowledge of the company, and that notice to the agent is notice to the company. Not only was the agent correctly informed as to the amount of the incumbrance, but he knew that the plaintiff had not read the application, and consequently did not know of the limitation upon the agent’s powers. The signing of the application by plaintiff is no more conclusive upon plaintiff as to the printed clause limiting the powers of the agent than it is as to the misrepresentation with reference to the incumbrance. It would be manifestly absurd to say that a misrepresentation of a material fact in the application does not invalidate a policy of insurance, where the application is not read to or by the applicant, and the misrepresentation was inserted by an agent of the company without the knowledge of the applicant, and contrary to her instructions, although she signed it, yet that by reason of a printed clause in the application, inserted by the company without the knowledge of the applicant, and to which her attention was not called, the misrepresentation would invalidate the policy, because, the application was signed by the assured. As is well said in Insurance Co. v. Wilkinson, 13 Wall. 222:
“ The powers of the agent are prima facie co-extensive with the business intrusted to his care, and will not be narrowed by limitations not communicated to the person with whom he deals.”
Again, plaintiff did not seek to avoid any requirement of the contract by reason of any assurance or license given her by the agent, nor does she seek to excuse the non-performance of any condition by setting up any matter communicated by her to the agent. She insisted that she gave to the agent the correct amount of the incum brance, and that he (not she) misstated the amount, and the company sets up the act of its own agent to defeat the policy. The question'here is not one of the authority or power of the agent, but it is one of his care or good faith in doing an act which the company does not prohibit, and which he usually performs.
It may be urged' that the policy contained a like restrictive clause, and that plaintiff is properly chargeable with a knowledge of what is in the policy. This may be true, but the application was not attached to the policy, but was filed away in the office of the company, and was not produced until after the loss; hence plaintiff had no knowledge of the act of the agent complained of until that time. As indicating her entire good faith, in her proofs of loss she sets forth that there still remains unpaid upon this incumbrance the sum of $3,000.
The second objection is that proofs of loss were not made within the 30 days provided by the policy. There is no limitation in the policy here as to the time within which suit must be brought, nor does it contain any provision that the failure to furnish proofs of loss within the 30 days shall work a forfeiture. The policy simply provides that—
“ Until such proofs, plans, specifications, and certificates shall be furnished, and such examination had, * * * the claim shall not be due or payable.”
The failure to make the proofs within the 30 days did not operate as a forfeiture, hut only postponed the right of action till they were supplied. Insurance Co. v. Downs, (Ky.) 13 S. W. Rep. 882.
The third objection is that plaintiff, in her proofs of loss, made claim for the loss of property of which she was not the owner. Plaintiff testified that she included some articles in the list that were not her property, because Taylor told her to make a list of the articles burned; that she had no intention of defrauding the company, and supposed they were included in the policy covering clothing and wearing apparel. It is well settled that, if no fraud was intended by the assured, the policy will not be invalidated on that ground. 4 Field, Lawy. Briefs, 311, and cases cited. This question of plaintiff's intent was fairly submitted to the jury under proper instructions from the court, and they have found that no misrepresentations were intentionally made.
One of the errors assigned is the action of the court in permitting the jury, upon retiring, to take with them the policy, the application, and the proofs of loss, against defendant's- objection. It will be remembered that no testimony was offered on the part of the defendant. The papers taken to the jury-room were exhibits fully proven, and concerning the contents of which there was no dispute. To the proofs of loss was attached a list of the articles burned, with the value of each article as sworn to. The jury were instructed by the court to strike from this list and exclude certain articles which belonged to the husband, and, as an aid to them in so doing, they had before them the list. It was held in Bethel v. Linn, 63 Mich. 464, that, where the articles in controversy were so numerous that the jury would not be likely to carry them in mind, it was not error to permit a list of the articles to be taken to the jury-room.
The rule laid down in Millar v. Cuddy, 43 Mich. 273, namely, that it was not error to permit a computation made by plaintiff’s attorney, showing the amount claimed to be due, to be taken to the jury-room, has been modified by subsequent decisions.
1. It has been held to be reversible error to permit- the defendant’s requests to charge which were marked “Given” to be taken to the jury-room. Hewitt v. Railroad Co., 67 Mich. 61, 79.
2. In re Foster’s Will, 34 Mich. 24, the court refused to allow the will to be taken by the jurj-, and this Court held there was no error.
3. In Canning v. Harlan, 50 Mich. 323, the court refused to allow a receipt to be taken by the jury, and this Court refused to disturb the judgment.
4. In Bulen v. Granger, 63 Mich. 331, the court allowed •a due-bill to be taken by the jury, and this Court affirmed the judgment, saying, however, that the general rule is against the practice where objection is made, but, inasmuch as the defendant was not prejudiced, they should not interfere.
5. In the case of Chase v. Perley, 148 Mass. 289 (19 N. E. Rep. 398), the trial court refused to permit certain receipts to go to the jury-room, and the supreme court held that it was not error, putting it upon the ground that the receipts 'were not put in evidence.
The true rule seems to be that, where exhibits have been fully proven and admitted in evidence, and their authenticity is unquestioned, and there is no testimony to impeach their contents, it is within the discretion of the trial court to allow them to be taken to the jury-room, although objection is made; and there was no error in permitting the papers here to be taken by the jury.
An exception is taken to the charge of the court that the plaintiff could recover for the wearing apparel of the adopted son, who was a member of the family. We cannot see how the defendant was prejudiced by this instruction. The wearing apparel of the boy included in this list was one pair of rubber boots, one woolen shirt, one pair cuff buttons, one pair celluloid cuffs, one collar, one suit of boy’s clothes, and one new hat, aggregating in value about $25. .These articles, if insured at all, were insured under the $700 clause in the policy, and the loss under this clause was somewhere between $1,000 and $1,100,
It appears by the record that the total amount of the insurance was $910, of which $50 was on dairy furniture, provisions, and stores, etc. The court instructed the jury that the'only loss proven under this clause was the sum of $1.37, but the jury disregarded this instruction, and brought in a verdict for the full amount of the policy. This was error, and it was the duty of the court to have corrected it; but it does not appear that either party made any application to the trial court to make such correction, and, not having done so, we do not feel called upon to reverse the case for that reason, but will make the correction- here, reducing the judgment of the court below to the sum of $887.14, and affirming the judgment as to that amount, with costs of this Court to defendant.
The other Justices concurred.
Taylor was a soliciting agent, and had no power to issue policies.
See Insurance Co. Reed, 84 Mich. 524, where the application was attached to the policy.
See Harroun v. Railway Co., 68 Mich. 208.
The jury were instructed not to add interest to the amount of plaintiff’s loss, if they found in her favor, which by consent of counsel was to be computed by the court at six per cent, for five and two-thirds months, and amounted to $25.77, which, added to' the $910 insurance covered by the policy, made a total of $935.77, for which sum judgment was rendered. | [
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] |
Ghamplin, O. J.
On January 20, 1887, the defendants entered into an agreement with the plaintiffs by which the plaintiffs were to furnish to the. defendants certain creamery supplies on the cars at Chicago, and also to put into operation the machinery, which they furnished to the defendants for a creamery at Minden City, in the' State of Michigan, which ivas to have a capacity for making 1,500 pounds of butter a day. Among the supplies to be furnished were 600 Fairlamb milk-cans, of gallons each. The defendants were to pay the plaintiffs, the sum of $2,065, as follows: $1,065 in cash when the machinery was ready for operation; one note of $500, due on or before April 20, 1888; one note of $500, due on April 20, 1889; and, when the defendants were ready to make butter, the plaintiffs were to convey to them the right to use the Fairlamb patent milk-cans within a radius of 10 miles from Minden City, except when in conflict with other creamery plants established before the date of that agreement.
It appears that the creamery was ready to do business by May 20, 1887, at which date Davis & Rankin, the plaintiffs, executed and delivered to the defendants an agreement setting forth that the plaintiffs were the owners of the following valuable patent, to wit, No. 215,-812, secured by letters patent issued by the United States for new and valuable improvements in milk-cans, and thereby granted to defendants the exclusive use of said invention within the said territory of a radius of 10 miles from Minden City, where the same does not conflict with Cass City Creamery or Port Sanilac Creamery, which grant was upon certain conditions mentioned in the agreement, not necessary to mention here. At this time the plaintiffs, through their agent, settled with the defendants, and took their notes, one of which is in suit, and reads as follows:
“Minden City, State or Michigan, May 20, 1887.
■ “April 20, 1888, after date, we promise to pay Davis & Rankin or bearer at the Minden City Bank the sum of $500, with interest-at seven per cent, from date, without defalcation, for value received in filling contract for creamery goods and territory. .-
“$500.”
This note not being paid at maturity, suit was brought upon it, in which the defendants pleaded the general issue, and gave notice that they would show under said 'plea that a part of the consideration- of the note was the full and exclusive right to use the Fairlamb can within the territory mentioned, with the exception of such territory as was at that time used by the Cass City and Port Sanilac creameries; and that they had not been allowed the use and occupation and enjoyment of the privilege of using the Fairlamb can within that territory, as agreed; and that the territory had been used and occupied and enjoyed almost exclusively by a creamery-at Port Huron, which had used and gathered cream within the territory with Fairlamb cans furnished by the plaintiffs, contrary to and in violation of their agreement with the defendants. They further gave notice that the plaintiffs expressly agreed and undertook to grant to the defendants the sole right to use the Fairlamb can within the territory granted, and expressly agreed to exclude other persons from using or attempting to use, for the purpose of gathering cream for creameries, the Fairlamb can, which they failed to do; and that, by reason of the plaintiffs’ failure to observe and perform the conditions of the said agreement, the defendants had suffered great damage in lying idle, not being able to operate their creamery at its full capacity, and were compelled to run at great loss.
As a further defense, they gave notice that they would show that at the time stated, when the plaintiffs sold the cans to the defendants, together with the territory specified, they had previously sold, conveyed, and granted to a creamery situated at Port Huron, known as the “Port Huron Creamery,” the right to use the Fairlamb 'can within the territory so conveyed to the defendants’ 'creamery at Minden City, and notwithstanding they had so sold the same and given the right to' the said Port Huron Creamery to gather cream in the Fairlamb can from the territory, the plaintiffs, through their agents and representatives, conveyed the right to use the can in said territory to the defendants, fraudulently, and for the purpose of defrauding the defendants, representing, ;a,b the time they so sold the cans and territory to the ‘defendants, that the Port Huron Creamery had no right ■or interest in the territory conveyed to the defendants, and that the plaintiffs would immediately remove them from the said territory; that the defendants were induced to give the note sued upon on account of the representations made by the plaintiffs at the time as to the right and interest in said territory, and the right to use the Fairlamb can therein, of the Port Huron Creamery, all of which, representations were false, and known to be so by the plaintiffs at the timó they were made, and' were so made for the sole purpose of. defrauding defendants, and inducing them to execute the note sued on; and that, by reason of the false representations, they suffered damage.
The trial in the case resulted in a judgment and verdict for the defendants over and above the claim of the plaintiffs sued upon of $1,484.24, and the plaintiffs bring the case here by writ of error.
As to the first defense set up, that there was an agreement to exclude the Port Huron Creamery from the territory named, it could not be made available to the defendants, for the reason that it was not embraced in the writings made between the'parties. The court below took that view of the case, and.charged the jury that the plaintiffs* right of recovery depended upon the question whether they made false representations to induce the defendants to enter into the contract and give the notes in suit, and the damages which resulted, if any, to the defendants by reason of such false representations.
The claim of the defendants made upon the trial was that their damage consisted in a loss of profits which they could and would have ma'de if they had been permitted the sole and exclusive use of the Fairlamb can in the territory designated. The Fairlamb can is not the only can in which cream is collected from among farmers, as appears by the testimony in the case, for mention is made of the Cooley can, and of the Haney can, and it appears from the testimony that the Port Huron Creamery Company had, in its use, in the territory described as the Minden City Creamery territory, 500 of the Fairlamb cans, and 125 other cans; or, in other words, 20 per cent, of the cans used by them in collecting cream from the farmers were other than the Fairlamb cans. These cans were owned. by different creameries, and were furnished to the farmers in the territory in which the creamery operated, to deposit their cream, and the cans were then collected by the owners of the creamery, and taken to the place of manufacture by them. During the year 1887, the year for which this judgment was obtained, no charge was made to the farmers for the use of the cans. I mention this simply as bearing upon the question as to the damages which might arise to the defendants from not being permitted the exclusive use of the Fairlamb can.
It appears also in the testimony that, in this same district of territory, there was other competition; that the creamery at Bad Axe occupied the same territory, or a portion of it; and that there was a cheese factory in Sherman, running all the time, presumably using a different can from the Fairlamb can.
The defendants introduced some testimony tending to prove that after they started their business they made efforts to get the patronage of the farming community in four towns named, which they say were operated in also-by the Port Huron people; that they got some customers, but did not get as large a proportion as they thought they ought to have had, and they place the cause of their failure to get the patronage of those people at the occupation of the same territory by the Port Huron Creamery, and their use of the Fairlamb cau. Defendant Davis says he talked with the farmers, and endeavored to induce them to furnish the cream to him, but the objections which they made were that they had already agz’eed with the Port Huron people to furnish the cream to them; and that they should continue to do so for that year at least; and that they thought that the competition of the Port Huron people was beneficial to them. But nowhere does he state in his testimony that these farmers alleged or claimed that they would not supply their cream to the Port Huron people unless they could do it in a Fairlamb can. As before stated, 20 per cent, of them.were supplying the Port Huron people with a different can than the Fairlamb.
The defendant Davis testifies that the Minden City Creamery, manufactured, on an average, during the season of 1887, 300 pounds of butter daily. He also testified that their creamery had a capacity of 1,200 pounds as constructed, and they were occupied only about one-half of the time during the year in making butter; that they did not earn their expenses; that the reason was that they could not get their cream, and the reason of not getting the cream, he always claimed, was because the territory was occupied by the Port Huron people. He also testified that his creamery paid 13, 14, 15, and 17 cents per pound for cream, and he says they paid below the market price; that it cost them between 2 and 3 cents to make a pound of butter in their creamery, about 2-J- cents to market it, and 'about 3 cents for gathering it. It further appeared in the testimony that 15 cents a pound for cream was a fair average that year of the cost, and that the price of butter averaged 22 cents a pound. It will be seen that they must have manufactured at a loss. They also introduced testimony by the witness McNutt, tending to prove that the Port Huron Creamery took from- the territory covered by the Minden City Creamery a daily average of 275 to 300 pounds of cream; and Mr. Davis, the defendant, testifies that, if their creamery had received that_quantity of cream which was taken by the Port Huron people, they could have manufactured at a profit of_ from one to two cents a, pound on the entire amount they manufactured. McNutt also is of the opinion that the Minden City Creamery could have manufactured, if they had received the cream ■which the Port Huron Creamery had taken from that territory, at a profit.
The testimony with reference to the profits which might vhave been made if the Port Huron people had not used the Fairlamb can was all taken against the plaintiffs' objection, and we think that the testimony was too uncertain and speculative in character to furnish any reliable data upon which to estimate profits. There was no testimony showing that, if this can had not been used, the people in this territory would have supplied their cream to the Minden City Creamery in preference to the Bad Axe or to the Port Huron Creamery in other cans, and there appears to be no way of ascertaining such fact. The defendant Davis testifies that he had 800 cans of the Fairlamb patent; that he tried his best ‘ to induce the farmers to supply him with cream in these cans, but he failed to do so except to a limited extent. It is fair to presume that the farmers would sell their cream to those who would pay the highest price. There was nothing-obligatory upon them to sell their cream to the Minden City Creamery. It differs in this respect from any case which has yet come before this Court in which we have held that prospective profits might be recovered. Mr. Davis went upon the stand, and was asked these questions:
“ Q. Do you say that the Port Huron Creamery, if it had not been there, you could have got the cream from those parties?
“A. I could not swear positively they would give me the cream.
“ Q. Did you ask them if they would give you the cream if the Port Huron Creamery was not there?
“A. I asked them if they would, and they said they would sell to the Port Huron Company another year. They commenced before we did, and they didn't want to change. That is the reason they gave for it.
“ Q. What were the other reasons they gave?
“A. They gave the reason that they had competition, and if they didn’t the price of cream would be too low, and they would not get as much for it.
“ Q. That is the reason that they would not give you the cream, — because it would keep competition away?
“A. Yes, sir; quite a number of them said that.”
He further testified in that connection:
,fI know, as a matter of fact, that some of the cream collected by the Port Huron Company was not collected in Fairlamb cans. They had some other cans mixed in the territory.”
Now, it seems to me that there is nothing tangible upon which a jury can base an estimate of a loss of profits on account of competition in that territory with a Fairlamb can used by the Port Huron Company.
But there are other objections which would make it necessary to reverse this case, even if they could supply a reasonable data upon which to estimate the damages. As before stated, it already appears that the quantity of cream collected by the Minden City Creamery Company was an average of about 300 pounds a day, and that collected by the Port Huron Creamery of about 275 or 300 pounds a day, making a total average combined of about 600 pounds. This, according to the testimony, was only one-half the capacity of the creamery of the Minden City Company, so that, if they had all the cream which was collected in the Fairlamb cans in that territory, the total quantity received by them would be a daily average of 600 pounds. Now, in putting'the question as to the amount of profits which they were entitled to'receive on account of the competition of the Fairlamb can used by the Port Huron Company, these questions were put and answered against the objection of the plaintiffs. The witness McNutt, being upon the stand, was asked:
“ Q. Now, from your experience in the creamery business, in its economical management, managed in a busi ness-like way, and run to its full capacity, what, from May 20, 1887, to May 20, 1888, would be the cost of manufacturing a pound of butter from a guage of cream; that is, of the territory you are in, from the cream you can gather with the horses, confining it then to the territory, running during the creamery season from 1887 to 1888, and letting the territory be the territory that you occupied at Minden City? What would it be, — what would be the profit?
“A. I should judge in that territory that our profit was three cents a pound.”
He was then-asked whether or not in his opinion, and from his knowledge of the business, and carrying it on, it would cost more to manufacture at Minden City than Port Huron; and he replied:
“ They could manufacture it cheaper than we could at Port Huron, because we paid the freight from Minden City to Port Huron on the cream.
“ Q. Then, what ought to be the profit on each pound of butter manufactured or each guage of cream collected to the Minden City Creamery, provided that it ran to its full capacity, and ran economically? What would you say it ought to be?
“A. I think if it were run to its full capacity, with expenses that would naturally be connected with it during the year 1887, they should clear four cents a pound o-n their butter, provided they ran it with full capacity, with the expenses that would necessarily be at a creamery.”
There was no data whatever introduced before the jury upon which they would have been authorized to find a verdict based upon the profits which the Minden City Creamery could have received if it had run at its full capacity. The testimony is uncontradicted that all the cream they received, and including that which they say was taken away in the Fairlamb cans for Port Huron, did not exceed 600 pounds on a daily average, which would be only, as before stated, one-half of the capacity of the creamery. This testimony must have had a prej udicial influence with the jury, for Mr. McNutt testified that the capacity of the Port Huron Creamery was 800 pounds daily average, and that they realized from that season's business a profit of only one cent a pound, or about $1,600 for the season's work; whereas, in this case, if the capacity be called 600 pounds daily average, the jury have found a verdict which would make the profits exceed $2,000.
Another error was committed in permitting the defendant Davis to testifiy that he purchased 800 of the Fair-lamb cans, and that he had used only 550. The contract only called upon the plaintiffs to supply 600 of these cans, and, if the defendants purchased more, it was not competent for them to show the excess, and the price of them, for the purpose of laying before the jury the amount of money which they had invested in cans.
We do not deem it necessary to pass upon the question of the fraud alleged in the declaration and exhibited through the proofs, as we are of opinion that the measure of damages relied upon in the case, as being on account of a loss of profits in the use of the Fairlamb can, is not a proper measure of damages for such misrepresentations, if any were made, not, however, deciding that if they could be connected, and made out to a reasonable certainty, it might not be a proper method of arriving at the damages.
The judgment must be reversed, and a new trial ordered.
The other Justices concurred. | [
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32
] |
Cahill, J.
The bill in this cause was filed to enforce the following agreement entered into July 10, 1889, by George T. Smith, claiming to act for and on behalf of' the George T. Smith Middlings Purifier Company, and to be authorized as its president and treasurer to execute the same:
“Whereas, The George T. Smith Middlings Purifier Company is indebted to the Preston National Bank on its own paper, and for indorsements on commercial paper, and will hereafter be likewise indebted; and—
“Whereas, The George T. Smith Middlings Purifier Company has on its books not less than three hundred thousand ($300,000) dollars in good and collectible accounts:
“Now, therefore, said George T. Smith Middlings Purifier Company does hereby set aside and assign to the Preston National Bank of Detroit one hundred and fifty thousand ($150,000) dollars of such good and collectible accounts now existing, or that shall hereafter accrue or be acquired in the conduct of the business of the said George T. Smith Middlings Purifier Company, which said one hundred and fifty thousand ($150,000) dollars of the good and collectible accounts shall be held by said Preston National Bank as collateral for any indebtedness of any kind or nature which may now or hereafter be due and payable from the said George T. Smith Middlings Purifier Company to the said Preston National Bank of Detroit.
“Geo. T. Smith Middlings Purieier Co.,
“By Geo. T. Smith, President and Treasurer.
“Dated Detroit, Mich,., Jvdy 10, 1890.”
The facts material here to be considered are, substantially, as follows: The 'complainant is a national bank organized and doing business in Detroit. The George T. Smith Middlings Purifier Company is a corporation duly ■organized for manufacturing purposes under Act No. 41, Laws of 1853, p. 53, How. Stat. chap. 122, and doing business at Jackson, Mich. It was engaged in manufacturing mill machinery. It also took contracts for building mills. These contracts ran from $2,000 to $30,000 each. Its business was large, and amounted to from $400,000 to $500,000 annually. Section.9 of the act under which it is incorporated (How. Stat. § 4009) provides that—
“The stock, property, and affairs of such corporation shall be managed by not less than three nor more than' nine directors, as the articles Shall determine.”
The articles as filed provide for three directors. Section 1 of the act authorizes it to — •
“ Elect, in such manner as they shall determine, all necessary officers, * * * and determine their duties, :and make from time to time such by-laws, not inconsistent with the Constitution and laws of this State, as a majority of the stockholders shall direct.”
The by-laws adopted relating to the officers and their duties are as follows:
“1. The officers of this corporation shall be a president, secretary, treasurer, and general superintendent.
“2. Any person may hold two or more offices at the same time.
“3. The president shall be the presiding officer at all meetings of the board of directors, .and shall have, general supervision over the property and affairs of this corporation. * * * * * . * * * * *
,c5. The treasurer shall have charge of all the funds, deeds, patents, leases, contracts, notes, securities, and all other valuable papers of this company; - shall collect and pay out all moneys, and sign all acceptances and notes in its behalf.
“6. The general superintendent shall have general supervision and management of the affairs of the corporation, subject to the president and board of directors, and shall make all contracts in behalf of the corporation except when the by-laws otherwise provide.”
The by-laws relating to the meetings are as follows:
“ 7. The annual meeting of the stockholders shall occur on the first Monday in May of each year.
“ 8. The board of directors shall have regular meetings on the first Monday in May of each year, immediately after the adjournment of the stockholders* meeting, and at such other times and places as the president may direct.”
'On May 5, 1884, stockholders* and directors* meetings were held. George T. Smith was elected president, treasurer, and general superintendent. No other meeting of the stockholders was held until May 13, 1889. At this stockholders’ meeting there were present George T. Smith, Frank M. Smith, his son, Alonzo Bennett, George S. Bennett, Francis D. Bennett, and M. Harmon. Eliza B. Smith was represented by George T. Smith, holding her proxy. George T. Smith, Frank M. Smith, and Francis D. Bennett were unanimously elected directors. Special meetings of the board of directors, called by the president, were held on November 8, 1884, on December 29, 1887, and on October 1, 1888. At each of these meet ings some special matter of business, not material to this case,' was transacted, but no directors’ meeting for the election of officers was held from May, 1884, to May 13, 1889. A directors’ meeting for the election of officers-immediately followed that of the stockholders on May 13. All of the directors were present. George T. Smith was elected president and treasurer, Francis D. Bennett, vice-president, and Milford Harmon, secretary. No superintendent was elected. As the statute provides that officers shall hold until their successors are chosen, George T. Smith must be considered as holding over in the office of superintendent. The next meeting of the directors was held October 3, 1889, at which the only business transacted related to the plat of the George T. Smith addition to the city of Jackson, which was-approved, and the president authorized to sell lots at the prices fixed, and to sign necessary deeds and contracts-for the same in the name of the company.
The corporation made an assignment under the statute-for the benefit of its creditors on January 14, 189Ó, to-the defendants Emerson and Eldred, who have since, for reasons not material here, been removed as assignees, and appointed receivers, upon a bill filed by some of the creditors in the circuit" court for the county of Wayne, to which county the proceedings relating to such assignment had been removed. Kittridge v. Circuit Judge, 80 Mich. 200.
It is apparent from the record- that, during the last five years the corporation did business, George T. Smith was permitted to manage the affair^ of the company very much as he pleased. There were no meetings of the stockholders, and no regular meetings of directors. As president, treasurer, and superintendent, he had, by the bylaws, been invested with extensive powers of management and control, and such power had been exercised by him freely, and if not without advice, certainly without objection, on the part of any of the stockholders or directors. It appears undisputed that the corporation was in the habit of bori’owing large sums of money from the banks on its own paper, and on the paper of its customers indorsed by it. George T. Smith testified that it was xiecessary to the successful operation of the business that this money should be borrowed, and that he had been accustomed, since the organization of the company, to make .loans, and give the company’s paper therefor, whenever the exigencies of the business, in his judgment, required. No question.is made here of his right to make such loans and give the company’s notes.
' Among other banks with which he ‘did business was the complainant, with whom he had an understanding prior to July 10, 1889, by which the company he represented was to have a line of discounts up to $50,000. But it appears that the. transactions with complainant bank greatly exceeded that amount, so that on July 10, 1889, the amount had actually reached about $70,000. At this time the bank wanted security. At an interview had with Mr. Smith by Mr. Hayes, vice-president of the bank, the subject of security was discussed, and Mr. Smith expressed himself as entirely willing to give it. He had been in the habit of leaving, as collateral to the company’s paper, the paper of its customers. He now suggested that the company had a large number of accounts on its books that were -good and collectible, which he estimated at $300,000, and he offered to give security on these accounts. As a result of this interview, the agreement of July 10 was drawn up by Mx*. Hayes, executed by Mr. Smith, and left with Mr. Hayes. At the time this agreement was entered into, there was about $70,000 of the company’s paper in the bank. Subsequently this paper was renewed from time to time as it fell due, and the amount was increased to 185,000. No action was taken to select out from the body of the accounts those which the complainant claimed under the agreement, nor were they ever set apart by the company as belonging to the complainant.
At the beginning of the year, Mr. Emerson had been elected vice-president and treasurer of the company, and the management of the business of the company was practically transferred to him. On January 10, 1890, Mr. Hayes, acting for the complainant, visited Jackson and called on Mr. Emerson, showed him the agreement of July 10, 1889, and told him that the bank was anxious to have these accounts to secure the bank’s indebtedness. It does not appear that Mr. Hayes expressly requested Mrs Emerson to turn out to him any specified accounts under such agreement, but it is clear that Mr. Emerson must have understood that Mr. Hayes was there for the purpose of taking some steps that would secure to the bank whatever right was needed to make its agreement good. Mr. Emerson testified that this was the first knowledge that he had of the existence of the agreement, and it does not appear that, prior to this time, any of the directors, or officers of the company, aside from Mr. Smith, had any knowledge of its existence. After taking time to consider, Mr. Emerson denied 'the validity of the agreement, and Mr. Hayes, on January 11, caused the agreement, or -a copy of it, to be filed in the office of the city clerk, as a chattel mortgage is required to be filed. On January 14 following, the assignment was made, as before stated. Three questions are discussed by counsel:
1. Did George T. Smith have authority to execute the agreement of July 10 so as to bind the company?
,2. Is” the agreement such a one as can be enforced, conceding it to have been made by due authority?
3. Conceding the agreement to be valid as between the parties, is it void as to creditors who became such between July 10, 1889, and January 11, 1890, because the instrument was not filed?
As to the authority of Mr. Smith to execute the agreement for the company. We have seen that the general powers conferred upon Mr. Smith by the by-laws were very extensive, and that the powers so conferred were actually exercised by him with very little supervision by the board of directors from 1884 to 1890. The language of the by-law defining his duties as president is quite as broad as the provision of the statute concerning the powers of the directors. The statute saj^s the stock, property, and affairs of the corporation shall be managed by a board of directors. How. Stat. § 4009. The by-law says the president “shall have general supervision over the property and affairs of • the corporation.” By section 1 of the statute, the stockholders have power to determine what the officers shall be, and to define their duties. How. Stat. § 4001. Conceding' that the president must exercise his • powers of management in subordination to the board, yet, when, as in this case, the stockholders, being the owners, have seen fit to vest certain extraordinary powers of management in the president, and certain other powers in the treasurer and superintendent, and the directors, with full knowledge of this, elect a man to fill all those offices, and thereafter put no restraint upon his management, the board must be held to have consented to his exercising all the power reasonably included in the language by which it was conferred. Bank v. Comegys, 12 Ala. 772. The right of the directors to make the security in question is not disputed, yet their authority is given in language no broader than that which defines the duties of the president.
If it be said that the stockholders could not thus usurp the powers of the board and confer them on the president, it may be said that the right of the directors to delegate certain of their powers of management to the officers is undoubted, and, if the consent of the board was needed to fully invest the president with the power given to him in the by-laws, that consent has been given in this case. The question of Mr. Smith's power is largely one of intention on the part of the stockholders and directors. As bearing upon this question of intention, the fact that no corporate meetings were held for five years after the by-laws were adopted is an important circumstance. It is claimed that the neglect to hold corporate meetings can have no bearing in this case, because it is not shown that complainant knew of this fact, or was influenced by it; and we are referred to the case of New York Iron Mine v. Negaunee Bank, 39 Mich., on page 655, where some language of Mr. Justice Cooley to that effect is found. In that case the only question was whether the bank had been influenced to rely upon 'Wet-more's apparent authority, which did not in fact exist, to make the paper in question. The question is different here. It is not one of apparent power to do an act conceded to be fraudulent and void unless the corporation was estopped by its conduct to allege the fraud, but it is a question of actual power in Mr. Smith, as the president, treasurer, and manager of this corporation, to perform an act entirely legal and proper if authorized. The intention to confer such power may be evidenced by their failure to act in opposition to or in restraint of a course of business they have themselves permitted if not established.
It is an ordinary occurrence for manufacturing or trading concerns, whose products have sometimes to be carried to await a favorable market, to draw against such products for the money needed to carry them, and, if requested, some form of security upon such products is given. If this be permissible, shall the right to give security exist only so long as the goods are in store, or may they be sold on credit, and the accounts due for such sales be substituted -with the consent, of the creditor? If not, then trade is hampered, the debtor is put into the hands of the creditor, and the latter cannot release him, if he would, without risk. The right of Mr. Smith as president and treasurer to borrow money for the legitimate needs of the business, and to give the company’s paper, is not contested. The duty to pay is involved in the power to incur debts. In the case of this corporation, its power to pay its debts depended on the profitable sale of its products, and the collection of the money due on such sales. If it could not otherwise dispose of its products, it could turn them out to its creditors in payment of or as security for such debts. If its goods were sold on credit, these credits stood as the representatives of the goods, and the same use could legitimately be made of them. This is not like giving security upon all the corporate property, the enforcement of which may involve the corporate existence. The giving of this security or its enforcement did not necessarily interfere with the prosecution of the corporate business. It was given upon property and credits already devoted in equity and good conscience to the payment of its creditors, of whom the bank was one. The effect of it was simply to give complainant priority of lien.
We have been cited to a large number of decisions to show that no such power as was here assumed by Mr. Smith can be exercised by any agent of a corporation without express authority to do that act from the board of directors.' It is not necessary to review them here. I have examined them with care.'" They are not altogether free from conflict, although if the exact point necessary to be decided in each case be kept in mind, and the language used be given no broader meaning than the facts of the particular case require, the conflict will be found to be more apparent than real. Kimball v. Cleveland, 4 Mich. 606; Joy v. Plank-road Co., 11 Id. 155; Peninsular Bank v. Hanmer, 14 Id. 208; Adams Mining Co. v. Senter, 26 Id. 73; New York Iron Mine v. Negaunee Bank, 39 Id. 644; Star Line v. Van Vliet, 43 Id. 364; New York Iron Mine v. Citizens’ Bank, 44 Id. 357; Eureka Iron & Steel Works v. Bresnahan, 60 Id. 332; Dwight v. Lumber Co., 67 Id. 507; Delta Lumber Co. v. Williams, 73 Id. 86; Genesee Co. Sav. Bank v. Michigan Barge Co., 52 Id. 438; Kendall v. Bishop, 76 Id. 634; Stokes v. Pottery Co., 46 N. J. Law, 237; Bank v. Bank, 48 Id. 527 (7 Atl. Rep. 327); Fay v. Noble, 12 Cush. 1.
In this connection it need scarcely be said that the strict limitations that govern public corporations and their officers are not to be applied with the same strictness to private business corporations. There are no questions of public interest to be affected by the exercise of corporate power by one agent rather than another in a private corporation. No questions of public policy are involved. The concern is purely private, affecting no one but the owners. What the owners consent to expressly or permissively they ought not to be allowed afterwards to deny. Mor. Priv. Corp. § 632; Steel Works v. Bresnahan, 60 Mich. 332. In Genesee Co. Sav. Bank v. Michigan Barge Co., 52 Mich. 443, Judge Sherwood uses this language:
“All the stockholders having any interest in the Barge Company had knowledge of the transaction; substantially that Ferry & Brother ran the Barge Company.”
The same is true of Mr. Smith in this case. Every stockholder and director knew, or would have learned if they looked into its affairs, as they were bound to do, that George T. Smith ran the purifier company; that he assumed to do this by force of the by-laws, which on their face gave full authority; and that by years of practice his construction of the by-laws had been acquiesced in.
Is the agreement such a one as can be enforced by a court of equity, conceding it to have been made by due authority? It is urged by defendants’ counsel that it contains infirmities which render its meaning doubtful, if they do not wholly prevent its taking effect as a valid contract. The thing principally relied on in support of this position is that the agreement is not sufficiently certain in its description of the property. It is said that no particular accounts were designated in the instrument, and no steps were provided for or taken by the parties afterwards to select out such accounts as were intended to be covered; that there is now no way of identifying those which the complainant claims. The accounts are designated as $150,000 of good.and collectible accounts now existing, or that shall hereafter accrue or be acquired in the conduct of the business. The objection to this description is that, as these accounts were to be selected out of a mass of not less than $300,000 of similar accounts, there is no way of making the selection without the further concurrence or acts of both the parties; that to make such selection requires the exercise of judgment upon the part of some one, and the instrument does not designate whose judgment shall control.
The important thing to be determined is—
1. What the parties intended.
2. Whether they have so expressed their intentions that the court can execute them.
It was not supposed by the parties that the security would cover all the good accounts on the books of the company. It was estimated that they would aggregate not less than $300,000, and of these there were set aside ■for the bank $150,000. It was contemplated that the accounts were good, and that the bank should have them at their face value, and not necessarily enough of them to realize that amount in cash. ' This indicates that it was not intended to wind up or cripple the. company in its business. It is equally clear that it was expected the particular accounts intended to be assigned were to be at some time, if it became necessary to enforce the security, selected from the body of similar, accounts, and turned over to the bank for collection. How was it expected the selection would be made? It must be made in such a way, of course, as to give neither party any advantage over the other. If there were sevei-al grades from which the selection was to be made, the task might be difficult, as' in the case of lumber and other commodities that are graded in the markets into several classes greatly varying in value. But there can be only two grades of accounts, the good and collectible, and the bad and uncollectible. If an account is good and collectible it cannot be any better, and if it is bad and uncollectible it cannot be any worse. If the selection be left to agreement between the parties, the security might be defeated altogether by a failure to agree, and, if left to the company, the bank might be defrauded by having poor accounts set off to it, whereas the bank was entitled to the best accounts on the books to the extent called for by the agreement, because by no process of selection could it secure any better than the contract called for.' Equity would require the selection to be made so as to give neither party an advantage. As this could only be accomplished by allowing the bank to make the selection, the parties must be held to have so intended. It is clear also that it was not intended that the security should be confined to the accounts standing on the books of the company on July 10, 1889, but that it should extend to and include accounts that should afterwards accrue or be acquired in the conduct of the business.
Having ascertained what the parties intended by their agreement, we have, by the same process, determined the second proposition. If the agreement is sufficiently definite and certain so that the intention of the parties can be determined, then the' courts can specifically enforce it, if it be also one that ought to be enforced. If the agreement had contained the words “to he selected by the bank,” and the bank, immediately upon the execution of this agreement, had called on the company to allow it to select out the accounts assigned to it, and such request had been refused, I have no doubt of the power of a court of equity to compel the company to give the permission. If that was the intention, how is the difficulty any greater? The intention was that the security should be a continuing one, giving the same lien upon accounts afterwards accruing as upon those actually existing when the contract was made. The right of a debtor to give security upon property to be by him afterwards acquired in the course of business has been recognized in this State in numerous cases, commencing with Leland v. Collver, 34 Mich. 418. See, also, Cigar Co. v. Foster, 36 Mich. 368; Robson v. Railroad Co., 37 Id. 70; Eddy v. McCall, 71 Id. 497; Fuller v. Rhodes, 78 Id. 36. I can see no reason that will support those cases which will not apply with equal force to this.
The last point urged against the validity of this agreement is that it was in effect a chattel mortgage, and is therefore void as to the creditors of the company represented by the receivers, because not filed in the office of the city clerk, under How. Stat. § 6193, which reads as follows:
“Every mortgage, or conveyance intended to operate as a mortgage, of goods and chattels, which shall hereafter -be made, which shall not be accompanied by an immediate delivery, and followed by an actual and continued change of possession, of the things mortgaged, shall be absolutely void as against the creditors of the mortgagor, and as against subsequent purchasers or mortgagees in good faith, unless the mortgage, or a true copy thereof, shall be filed in the Office of the township clerk of the township, or city clerk of the city, or city recorder of cities having no'officer known as city clerk, where the mortgagor resides, except when the mortgagor is a non-resident of the State, when the mortgage, or a true copy thereof, shall be filed in the office of the township clerk of the township, or city clerk of the city, or city recorder of cities having no officer known as city clerk, where the property is.”
This statute, cannot be construed to apply to the agreement in this case. It applies only to goods and chattels which are capable of delivery, and the filing of the security is to take the place of such delivery, when it is not made, as it might have been. There is no way in which an account can be delivered. It has no tangible entity, and exists only as an incorporeal right. Neither the thing itself nor any evidence of it is capable of delivery. Similar statutes in other states have received this construction. Monroe v. Hamilton, 60 Ala. 226, 233; Kelly v. Thompson, 2 Heisk. 278, 281; Bank v. Huth, 4 B. Mon. 423, 449; Newby v. Hill, 2 Metc. (Ky.) 532; Brady v. State, 26 Md. 296; Marsh v. Woodbury, 1 Metc. (Mass.) 436; Williamson v. Railroad Co., 26 N. J. Eq. 398, 403; Booth v. Kehoe, 71 N. Y. 341, 344; Bacon v. Bonham, 27 N. J. Eq. 209, 212; Kirkland v. Brune, 31 Grat. 127; Bank v. Gettinger, 3 W. Va. 317; Tingle v. Fisher, 20 Id. 497. The duty to file arises under the statute, and of course only such instruments need to be filed as are covered by the statute.
No fault is found with the form of the decree, if complainant is entitled to the relief payed for.
The decree will be affirmed, with costs.
Long and Grant, JJ., concurred with Cahill, J. | [
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McGrath, J.
Childs, Lee & Dunlapi plaintiffs, brought assumpsit for the price and value of several invoices of boots and shoes sold defendant, at the dates, and aggre-' gating the amounts, following:
January 25, 1888.......................... §142 39
January 31, 1888__________________________ 142 25
February 13,. 1888__________________________ 43 80
February 24, 1888.......................... 41 00
March 26, 1888.............................§105 25
April 2, 1888.............................. 9 00
April 11, 1888............................. 130 25
April 18, 1888..........l._................ 3 50
April 27, 1888............................. 128 00
-- §745 44
CREDITS.
April 24, 1888, by goods returned......... §10 00
May 19, 1888, by goods returned.......... 34 50
May 19, 1888, by goods returned.......... 7 50
June 6, 1888, by goods returned........... 2 25
Aug. 22, 1888, by damages allowed........' 1 20
- 55 45
§689 99
Defendant pleaded the general issue, and gave notice that he would insist on the trial:
1. That the goods referred to in plaintiffs’ declaration were sold to defendant by plaintiffs for good, merchantable, durable goods; that plaintiffs guaranteed them to be such, and agreed that defendant might return the goods if not such.
2. That the said goods were not good, merchantable, and durable goods, and defendant offered to return the same, but that plaintiffs refused to receive them.
3. That plaintiffs knew that said goods were of a poor quality; and that the sales made by defendant of said goods injured defendant’s business, and that by reason thereof good and worthy customers have been turned away, and he has lost a large portion of his business, and defendant has been deprived of great gains and profits, and damaged to the extent of $1,000, which the defendant will recoup.
The case was tried before the court, and findings of fact and law were demanded and are presented.
On January 1, 1888, plaintiffs succeeded the firm of Fuller, Childs & Co., and defendant had actual notice of the change in the firm. Defendant had bought goods from Fuller, Childs & Go. during the year 1887, and on January 1, 1888, there was a balance due the old firm, which was subsequently paid by remittances to Childs, Lee & Dunlap on account of that indebtedness. The goods were sold on four months5 time, at the end of which plaintiffs began to press collection; and on June 27, 1888, defendant wrote to plaintiffs, threatening to return all of their goods which he had then on hand; and in another letter, dated June 30, he informs them that the goods are packed, and are subject to plaintiffs5 order. The goods packed, at the prices charged by plaintiffs, amounted to $483.45. It is admitted that the goods so packed embraced all of the goods then on hand purchased from plaintiffs, and that they included goods purchased prior to January 1, 1888, from the old firm of Fuller, Childs & Co. The court finds, first,—
“ That in the latter part of the spring of 1887 said defendant engaged in the business of retail dealer in boots and shoes, and has. since then continued in such business; and that soon after commencing such business the firm of Fuller, Childs & Go., of which said plaintiffs are the successors, through their agent, Mr. Oadwell, solicited said defendant to make purchase of goods in his line from said firm of Fuller,' Childs & Co., and, to induce defendant to trade w-ith said firm, told said defendant that all goods purchased of said firm by him should be of a good and merchantable kind, character, and material, and as good as the like priced goods of any other boot and shoe house in the United States, and that if such goods proved unsatisfactory to defendant he might return the same to said firm, and that said firm would warrant every pair of shoes to be of a good, merchantable, and workman-like character, and would stand by every pair, and make said defendant recompense for all loss which he might sustain by reason of handling said goods, if the same, or any part thereof, did not prove to be of the character so warranted; and ihat said defendant in the month of August, 1887, agreed to purchase goods of said firm of Fuller, Childs & Co. upon said warranty, and thereupon began to trade with said firm in accordance with said arrangement.55
This finding is not sustained by the proofs. The defendant gives the language used by the agent, Cadwell, as follows:
“He said: ‘1 will recommend them with any goods you can get anywhere; as good as you are buying from any other place. If they don’t prove satisfactory, you can send them every pair back; even after a person wears them, you can send them back, and get another pair in their place. If the goods don’t give satisfaction, send them all back.’ Well, I told him: ‘I can’t lose nothing anyhow. If the goods don’t prove good, then I will send them back. I will take a small order, and try them.’ So I ordered some of them.”
The first order was given in June, 1887, and other orders were given during that year, and a balance remaining due upon these orders was paid some time after January 1, 1888. Between January 1, 1888, and April 27, 1888, nine other separate and distinct orders for goods were given. No goods were returned during the year 1888, until April 24, when goods of the value of $10 were credited to defendant. Of the shipment made April 11, 1888, goods of the value of $34.50 were immediately returned as not suitable for that trade. The other goods returned during the year amounted in all to $9.75, and $1.20 was allowed for damages to one pair of shoes, which had been worn and returned. It will be noted that the trial order was given in June, 1887, and was followed by a number of other orders extending over a period of nine months, and that goods had been returned and credited without question. Indeed, defendant says: “I gave him [Cadwell] orders afterwards for different shoes, as long as he kept changing them.” It does not appear that any question arose until some time in June, 1888, when the defendant packed up all of the goods purchased from plaintiffs, including some purchased in 1887, and notified plaintiffs that they weré on hand subject to their order.
Defendant undoubtedly had the right, under the contract of sale, to return the goods received by him upon the first order, if they did not prove satisfactory, and the plaintiffs had a right to rely upon the failure to return them as an acceptance of the goods. Defendant, having the option to return the goods, was bound to exercise that option within a reasonable time. Had defendant given but the first order, and retained the goods received for months, it will not be contended that he could then return the goods. Not only does he not return the goods, but he gives a number of subsequent orders, and pays for all the goods purchased within the first six months, and after a year elapses he undertakes to return goods, all of which had been held for two months, a portion for three months, a portion for four months, other portions for five months, and others from nine to twelve months. There is a wide difference between an ojotion given to the buyer to return the goods if not satisfactory and a warranty of quality. The latter is continuous, and runs-with the goods; but the former must be. exercised within a reasonable time after the receipt of the goods, and the retention of the goods after the lapse of that reasonable time must be regarded as an acceptance, unless the option is extended in clear and unmistakable language. ,
The language used cannot be construed as a warranty. The sale of the first order was one on approval simply, with the privilege of a trial of the goods. As a matter of law, this option, even, did not extend to subsequent orders and invoices of goods, unless repeated with each order, or unless some general language was used covering all orders or sales. The defendant gave the first order for the very purpose of a trial of the goods. Having received the goods ordered, and other invoices of goods, before any of the goods sued for were ordered, he must be deemed to have had a sufficient opportunity for trial, and the plaintiffs were justified in assuming that the goods had proven satisfactory. Waite v. Borne (N. Y.), 25 N. E. Rep. 1053. It is unnecessary to notice other assignments of error.
This finding was erroneous, and a new trial must be had, with costs of this Court to plaintiffs.
The other Justices concurred. | [
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Morse, J
This case has been in this Court before, and will be forind reported in 78 Mich. C87. A full statement of the facts, appearing on the first trial of the case, will be found in the opinion of Mr. Justice Long, there published. Dpon a second trial in the Alpena circuir court, the plaintiff has again recovered a judgment of 85,000, and the defendants bring error.
There is but little difference in the testimony of the two trials, and we shall refer only to such differences as are claimed by defendants’ counsel, and such other facts as may be necessary in determining the question whether or not any error was committed on the last trial warranting a reversal of the judgment. The plaintiffs counsel insist that the whole case, upon the evidence, is substantially the same as upon the first trial, and that the law of our former opinion must govern the case now here. If it be true that there is no substantial difference in the case of the plaintiff as made by the testimony in his behalf on the two trials, then it must follow that the question as to his contributory negligence was properly submitted to the jury on the last trial, as wc held that such question was rightfully submitted to them on the first trial. The only differences pointed' out to us by defendants5 counsel are two, to wit:
1. On the last trial plaintiff testified that he looked up as he went in to see.if the blower was running, while on the first trial he did not say anything about looking at the blower for that purpose.
%. On the first trial he testified that he had the elbow of the pipe on his arm when he fitted it to the blower, while on this trial he says he fitted the pipe on the blower before he put his hand in.
As regards this last difference in his testimony, we cannot see that it would make any difference, as a matter of law, in his negligence, which statement was correct. The argument that he would be more liable to feel the suction of the blower in motion in the last case than in the first, and consequently be advised that' the blower was moving, is one for the jury. I do not think that a court, some of whom never saw a blower, either stationary or in motion, are authorized to hold as a matter of positive law that plaintiff must have felt this suction in time to acquaint him of his danger and to prevent it. Nor do I think the records in both cases bear out the assertion that there was any difference in his statement in this respect between the first and last trial. See Kinney v. Folkerts, 78 Mich., at page 692, where -plaintiffs direct testimony is quoted on the first trial. He says:
“We both run right in quick, and, I took this elbow and stuck it on the bloioer, and had the bolts in my hands, and jumped onto a horse, and run my hand right in the blower
The plain inference from this testimony is that he put the blower on first, and then jumped upon the horse, and ran his hand into the pipe and into the blower.
In relation to his looking up at the blower as he wont in, his testimony is that he took a “quick glimpse” at the machinery of the blower as he rushed in, and it looked just as he had left it. It must be remembered that the plaintiff, as he testifies, was out of the building at work. The blower had been stopped, and was not running when he left it. It was not to be run again until he had fixed the pipe, and he supposed that it was still. McNally, one of the defendants, while plaintiff was working under this supposition, comes to him, and says:
“Come in quick, we are out of shavings in the engine-room, and I want to start that blower; come in quick.”
Plaintiff, again advised by this statement that the blower is stationary, rushes almost on a run into the mill, filled with the clash and noise of other machinery -in motion, as well as the blower; casts a hurried glance upwards; everything seems all right, and as he left it, and he claps the pipe upon the opening of the blower, and runs in his hand to fit the bolts, and is injured. All this is the work of a moment, and under the idea that there was no danger; and there would have been none, if the blower had been in the condition he was led to suppose it was by the acts and words of one of the defendants. If the statement of the plaintiff is a true one, he was thrown off his guard, and it was for a jury to say whether an ordinarily prudent man would have done as lie did under like circumstances; ana the fact that he took a “quick glimpse” of the blower, as h^ rushed in in the hurry of the moment, cannot alter the case so as to take it out of our former ruling, that the question of his negligence was for the jury. The theory of the defendants, as opposed to the story of the plaintiff, is that the blower was not stopped at all that morning, and that plaintiff was not led in any way to believe that it was not running; that he had no call from McNally or any" one to go near the blower, and -yet that he deliberately walked into the mill, went around to the blower, got upon the horse, and, steadying himself with one hand, put the other, without any cause or known reason, into the opening of the blower, and thereby lost his fingers. Having to make a choice between these two theories as to the facts, it is not at all surprising to one having any knowledge of human nature that the plaintiff has recovered two verdicts.
The argument, which was the main contention here, that the plaintiff was negligent in law, must be considered, therefore, settled by our former opinion, and the question of fact has been settled by the jury. We also think that the negligence of the defendants was properly submitted to the jury, who have also settled that question against them.
The court permitted the jury to examine the mill, but would not allow the defendants to run the blower in their presence. ' As the blower was not constructed the same as when the plaintiff was injured, it having been altered considerably since that time, we think there was no abuse of discretion in the court’s action. It is complained that the court erred in refusing the evidence offered to be shown by a witness, Henry Michaels. He was asked, after he had testified to the changes that had been made in the blower since plaintiff had been hurt, if, before such changes, and after October 15, 1888, the plaintiff being injured on the 8th, he had occasion to use and handle the blower. This was objected to, and then defendants5 counsel offered to show by the witness that on October 15, 1888, and about a week after the accident to plaintiff, and when he came to defendants5 mill for the purpose of investigating the blower,—
“He had occasion, in testing and using the blower, to put up and take down this box and elbow, and that he found it at the time fastened up there with nails, and used it in that way himself.
“ The Court: Do you think that would be any evidence that it had been used in that condition prior to the 8th of October?
“Mr. Emerick (defendants5 counsel): Yes, I do.
“ The Court: I will give you an exception.55
The defendants claimed that this temporary elbow or pipe, which the plaintiff claimed he was putting on the blower when he was injured, at the time was permanently fastened into a wooden box, thereby forming a continuous pipe about 7| feet in length, which, if true, would preclude the plaintiff from running his arm through it, as he claimed he did, when he was attaching it to the blower. The plaintiff testified that the box was not attached to it when he used it. By this proposed testimony it was sought to corroborate defendants5 witnesses as to the condition of this pipe and box on the day of the injury by showing how Michaels found it a week afterwards. The very statement of the proposition shows its absurdity. The court was right in rejecting it.
Plaintiff testified that, as soon as he was hurt, he threw down the elbow, and walked rapidly to where McNally was standing in the mill.
“ I asked him whether he would walk up town with me to some doctor. I was not acquainted with the doctors, and he would oblige me to go up. Says I: ‘AYe can take your horse.5 Says he: ‘No.5 Says I: ‘The team has just come in.’ Says he: CI haven’t .got time; you have got strength, go yourself.’ The idea of that is he wouldn’t be humane enough to go with me. He refused. He ought to have done it.”
No objection was made to any of this testimony, and no motion made to strike it out, but the counsel for defendants requested-the following charge in relation to it:
“Even if McNally did refuse to go ' with or send plaintiff to the doctor, that fact is immaterial, and should hot be considered, except as bearing upon his credibility.”
This conversation of plaintiff with McNally is denied by the latter, but it is claimed by defendants’ counsel that this testimony of Kinney’s was used by plaintiff’s counsel on the argument to the jury to show that McNally was brutal and inhuman, in thus refusing to go with plaintiff to a doctor or to send his team with him. We find, however, nothing in the record to support this claim, and we cannot assume anything not found therein. The court made no allusion to this testimony in his charge, and did not give the request. The request was proper enough, but we cannot consider the failure to give it as prejudicial error. The damages found by the jury are not excessive, under the testimony, and the circumstance that juries have twice found with plaintiff, and for the same sum, seems to be conclusive that the failure to give this instruction had no weight in the determination of the case, as no complaint in reference to this testimony, or of any use made of it, was brought to our attention when the case was here before. And yet the result is the same on both trials, even to the amount of the damages.
The rule of damages was properly laid .down. It is claimed that the court erred in counting the plaintiff’s expectancy of life from the date of the injury instead of the date of the trial, a difference of one and one-half years; but it will be seen, by examining the charge, that the element of damage resting upon this expectancy of life reached back at least until the time when his hand had healed, and such damages were not permitted to be recovered twice, unless it might be for the time when he could do no work at all, which was about two months; but we do not think the charge is open even to this objection. The court authorized the jury to take into consideration three elements of damages:
First, what-he had paid out for doctors’ bills, medicine, and nursing; second, compensation for the pain and suffering.
As to the third element,' the court said:
“You are also to consider, as a third element of injury for which the plaintiff would be entitled to recover, if you find for him upon the propositions of fact under the instructions given you, the loss of time and the disability occasioned by the alleged injury. The loss of time would consist in the actual loss from the time of the accident or injury until he was restored to health, or until the wound was healed. You should also consider the disability entailed by the accident, actual loss of his services, his inability to work, to attend to his ordinary business or trade, and you should .consider the extent of his injury. To what extent does this injury deprive him from pursuing his avocation, and earning the usual compensation or wages therefor? * * * It is difficult, if not impossible, to give you any definite or well-defined standard from which to measure the loss or injury he may have sustained. The question as to what amount the plaintiff should be awarded rests largely in your sound -discretion. You should consider, however, on this branch of loss and injury, the occupation of the plaintiff, his ability to earn wages before the'accident or injury, and the extent to which such ability to earn wages has been diminished or lost to the plaintiff. You. may consider the age of the plaintiff and his reasonable expectation of life, which is shown by the evidence to be 36 years; also his habits of industry and temperance. You should also consider the contingencies of a much shorter life. The plaintiff may not live to the full period of expectancy. Also you should consider the contingencies of sickness and inability to secure employment at all times, as well as the fluctuations in value and demand of his services, and you should make a reasonable deduction for these contingencies. Whatever you may determine to be his actual injury or loss of services, or inability to earn wages, you can in no event award him a greater sum for this element of injury or loss than the present worth of such 1'oss. Understand me, gentlemen, the actual outlay and expense that he has incurred in treating and nursing and medicine should be allowed him, if he is entitled to recover. It is at your discretion to give such an amount as you may think right for mental suffering, and for physical pain and suffering. The actual loss of time while he was sick and unable to work should be awarded to him; but when you come to consider beyond that the disability that he has sustained, which may extend into the future, yon are to determine as best you can the extent of that disability, and the injury that he has sustained, — may sustain in the future, — and, when you have determined that as near as you can in yoixr judgments, that amount is not to be, and should not be, the measure of your verdict, but the present worth of it. I suppose you all understand what the present worth of a given sum means. It is arrived at by dividing a given sum by one dollar, plus the legal rate of interest, or usual rate of interest, for the given time.”
Under this charge, we do not think the jury were misled so that they gave plaintiff what he had lost by his inability to labor between the time of his injury and the trial, and then figured the same time in their calculation as to his future loss.
It is also contended that the method of obtaining the present worth of a sum of money falling due each year for a given number of years was not sufficiently explained. No fault is found with what the court said, as far as the charge went. Nor was any other instruction on this subject suggested or requested. If the defendants desired fuller instructions, it was tlieir duty to have asked them. Parties cannot remain silent, and thereby lie in wait to ground error, after the trial is oyer, upon a neglect of the court to instruct the jury as to something which was not called to its attention on the trial, especially in civil cases. The testimony shows that, previous to the accident, the plaintiff was a boiler-maker, earning from $3.25 to $3.50 per day. His hand was disabled, so that he can work at his trade no longer; He has worked at peddling newspapers, and anything he could get, since, and had earned about $300 in a year and a half. Being 29 years of age at the time of the accident, with an expectancy of life of at least 35 years, it requires but little calculation to show that the verdict is a reasonable one, and that the defendants cannot complain that it is excessive.
The judgment is affirmed, with costs.
The other Justices concurred-. | [
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Per Curiam.
In these consolidated appeals, defendants appeal as of right from the circuit courts’ orders which determined that weekly net wage as used in MCL 330.1113; MSA 14.800(113) was equal to the average weekly wage defined in MCL 418.371(2); MSA 17.237(371X2) and that they were prohibited from discharging plaintiffs from employment and, thereby, terminating their supplemental benefits pursuant to MCL 330.1113; MSA 14.800(113). We reverse.
Plaintiff Pringle was an employee of the Ypsilanti Regional Psychiatric Hospital and was assaulted in the course of his employment. He made a claim for workers’ compensation. In determining the amount of benefits to be paid, the worker’s compensation bureau applied the following formula pursuant to MCL 418.371; MSA 17.237(371):
(1) The weekly loss in wages referred to in this act shall consist of the percentage of the average weekly earnings of the injured employee computed according to this section as fairly represents the proportionate extent of the impairment of the employee’s earning capacity in the employments covered by this act in which the employee was working at the time of the personal injury. The weekly loss in wages shall be fixed as of the time of the personal injury, and determined considering the nature and extent of the personal injury. The compensation payable, when added to the employee’s wage earning capacity after the personal injury in the same or other employments, shall not exceed the employee’s average weekly earnings at the time of the injury.
(2) As used in this act, "average weekly wage” means the weekly wage earned by the employee at the time of the employee’s injury in all employment, inclusive of overtime, premium pay, and cost of living adjustment, and exclusive of any fringe or other benefits which continue during the disability. Any fringe or other benefit which does not continue during the disability shall be included for purposes of determining an employee’s average weekly wage to the extent that the inclusion of the fringe or other benefit will not result in a weekly benefit amount which is greater than % of the state average weekly wage at the time of injury. The average weekly wage shall be determined by computing the total wages paid in the highest paid 39 weeks of the 52 weeks immediately preceding the date of injury, and dividing by 39.
The bureau determined Pringle’s average weekly wage was $648.73 and, therefore, determined that he was entitled to $383.41 in benefits.
Pringle also applied for supplemental benefits pursuant to MCL 330.1113; MSA 14.800(113), which provides:
A person employed by the department who is injured as a result of an assault by a recipient of mental health services shall receive his full wages by the department until workmen’s compensation benefits begin and then shall receive in addition to workmen’s compensation benefits a supplement from the department which together with the workmen’s compensation benefits shall equal but not exceed the weekly net wage of the employee at the time of the injury. This supplement shall only apply while the person is on the department’s payroll and is receiving workmen’s compensation benefits and shall include any employee who is currently receiving workmen’s compensation due to an injury covered by this section. Fringe benefits normally received by an employee shall be in effect during the time the employee receives the supplement provided by this section from the department.
Using the Personnel-Payroll Information System for Michigan Manual of the Department of Management and Budget, as directed by the Civil Service Commission, an employee in Ypsilanti Regional Psychiatric Hospital’s personnel department determined Pringle’s weekly net wage was $336.81. The formula used multiplied an employee’s hourly rate by eighty hours because employees were paid on a biweekly basis. Holiday overtime, regular overtime, step increases and annual increases were not included in determining an employee’s gross pay. The employee’s gross pay was then entered into a computer program along with the employee’s marital status and number of dependents. We note that the employee’s marital status and number of dependents could be determined from Form 100, which is filed with the worker’s compensation bureau upon the filing of a workers’ compensation claim. Using this information, the amount the employee paid in federal and state income tax as well as fica could be determined. Whether the employee paid city taxes was also considered. An employee’s weekly net wage was then determined by subtracting deductions for federal and state income taxes, fica and city income tax, if applicable, from his gross wages and dividing by two. Because Pringle’s workers’ compensation benefits ($383.41) exceeded his net weekly pay ($336.81), Ypsilanti Regional Psychiatric Hospital denied his request for supplemental benefits pursuant to MCL 330.1113; MSA 14.800(113). At the same time, Ypsilanti Regional Psychiatric Hospital denied Pringle’s request to contribute to the deferred compensation program because there were no provisions for direct payment.
Pringle sued, claiming that the workers’ compensation bureau had determined his "net weekly wage” to be $648.73 and, therefore, defendants were required to pay him a supplement of $265.32 (i.e., $648.73, Pringle’s "net weekly wage,” minus $383.41, Pringle’s workers’ compensation) pursuant to MCL 330.1113; MSA 14.800(113). Pringle also claimed that he was entitled to contribute to the deferred compensation program because it was a fringe benefit pursuant to MCL 330.1113; MSA 14.800(113). In addition to monetary damages, Pringle requested a declaratory judgment that the workers’ compensation bureau’s determination of his average weekly wage be treated as his weekly net wage.
Subsequently, Ypsilanti Regional Psychiatric Hospital sent Pringle a letter informing him that his supplemental pay was limited to fifty weeks and that, if he failed to provide medical documen tation that he could return to work shortly, he would be fired. Pringle filed a motion for a restraining order preventing Ypsilanti Regional Psychiatric Hospital from limiting his supplemental pay and from terminating his employment.
The court granted Pringle’s request for an ex parte temporary restraining order and issued an order to show cause. Despite defendants’ objections at the hearing, the court ordered the temporary restraining order continued.
Defendants filed a motion for summary disposition, claiming that they had properly determined weekly net wage and that that term was not equivalent to the term average weekly wage. Defendants further argued that deferred compensation was not a fringe benefit and, even if it was, Pringle was not entitled to it because he was not entitled to the supplemental benefit pursuant to MCL 330.1113; MSA 14.800(113).
Pringle responded, claiming that weekly net wages should be determined by a formula like the one used to determine average weekly wage. Pringle also argued that the intention of the Legislature was to provide a supplemental benefit. Pringle further claimed that, because he was entitled to the supplemental benefit, he was entitled to participate in the deferred compensation program, which was a fringe benefit.
At an evidentiary hearing, the parties agreed that it was improper to terminate whatever supplemental benefit Pringle might have been entitled to after fifty weeks. See, e.g., Michigan State Employees Ass’n v Dep’t of Corrections, 172 Mich App 155; 431 NW2d 411 (1988). The parties also agreed to determine if firing Pringle after fifty weeks was appropriate. See Jesse v Dep’t of Mental Health, 130 Mich App 350; 343 NW2d 548 (1983), lv den 422 Mich 860 (1985), where this Court held that MCL 330.1113; MSA 14.800(113) was not violated by the Department of Mental Health’s practice of terminating employees after one hundred weeks of disability. We note that once an employee is no longer on the department’s payroll, he is no longer entitled to the supplemental benefit. MCL 330.1113; MSA 14.800(113). Jesse, supra.
At the hearing, Pringle called Philip Helms, who was the president of a local union and secretary of the mental health coordinating committee in 1975. Helms testified that MCL 330.1113; MSA 14.800(113) was drafted after he and five other Department of Mental Health employees were stabbed by a patient. He stated that the purpose of the law "was to see that an employee that was injured and disabled in this kind of situation did not suffer a loss of income.” Helms also testified that if an employee was denied the supplemental benefit he was nonetheless entitled to fringe benefits.
The court held that the statute did not specify that weekly net wage must be determined using a forty-hour work week. The court held that the statute was unambiguous and that defendants’ rules defining weekly net wage "would violate the constitutional prohibitions against delegation of power and due process.” The court then held:
[T]he power to limit supplemental benefits to an amount less than the average weekly wage finding of the Workers’ Compensation Board has not been delegated to the Department of Management and Budget. Nor has the power to arbitrarily terminate employment after 50 or 100 weeks of disability been granted to these agencies by the Legislature. For these reasons, the policy of the respective departments is proscribed.
Plaintiffs [Pringle’s] employment was hazardous, and, in recognition of the hazards of this type of employment, the Legislature created [1976 PA 414, MCL 330.1113; MSA 14.800(113)] to insure that an employee continue to receive his former level of income.
The Court finds that the benefit here is tied as a supplement to Workers’ Compensation as a disability benefit and that the benefit should run with Workers’ Compensation for as long as the disability continues.
Finally, this Court also rules that Plaintiff [Pringle] is entitled to the continuation of his fringe benefits.
Following the court’s decision, plaintiff John Morgan filed his suit, alleging that under that decision he was entitled to supplemental benefits pursuant to MCL 330.1113; MSA 14.800(113) and that his employment could not be terminated after fifty weeks.
Morgan was also injured in an assault by a resident. Morgan’s average weekly wage was $477.73, entitling him to $276.54 in workers’ compensation benefits. Ypsilanti Regional Psychiatric Hospital’s employment personnel determined that Morgan’s weekly net wage was $326.99 and that his supplemental benefit was $50.45 (i.e., $326.99, Morgan’s weekly net wage, minus $276.54, Morgan’s workers’ compensation). Morgan claimed that he was entitled to $201.19 (i.e., $477.73, Morgan’s average weekly wage, minus $276.54, Morgan’s workers’ compensation).
Morgan also requested an ex parte restraining order preventing Ypsilanti Regional Psychiatric Hospital from terminating his employment and, thereby, his supplemental benefit. The circuit court denied Morgan’s request for an ex parte temporary restraining order, but granted an order to show cause why a preliminary injunction should not be issued.
In response to the order to show cause, defendants claimed that Morgan was not entitled to injunctive relief. Defendants stated that Morgan was to be terminated after one hundred weeks. Defendants claimed that their policy of termination was proper, citing Jesse, supra. Defendants noted that Michigan State Employees Ass’n, supra, was distinguishable because there the employee’s supplemental benefit had been cut off even though the employee had not been terminated. In any event, defendants noted that Morgan had failed to exhaust his administrative remedies regarding his discharge, citing Samuel v Dep’t of Mental Health, 140 Mich 101; 364 NW2d 294 (1985).
In their trial brief, defendants again claimed that they could properly terminate Morgan and, therefore, his supplemental benefit. MCL 330.1113; MSA 14.800(113). Jesse, supra. Defendants also claimed that they had properly interpreted that statute to define weekly net wage and that that term was not synonymous with the term average weekly wage.
Morgan claimed that his weekly net wage should be the average weekly wage because that was the average amount he earned and based his spending on. Morgan further argued that he could not be fired because doing so would deprive him of due process. Relying on Michigan State Employees Ass’n, supra, Morgan argued that the supplement should run with workers’ compensation for as long as the disability continued. Morgan argued that if the Legislature had intended a time limit on the supplemental benefit it could have put one in the statute.
The court agreed with the court’s opinion in Pringle’s case and, therefore, granted Morgan’s request for a restraining order and declaratory judgment.
If a statute is unambiguous, this Court will avoid further interpretation and will not vary the clear meaning of the statute; however, if the statute is ambiguous, it is this Court’s duty to effect the intent of the Legislature. Niggeling v Dep’t of Transportation, 183 Mich App 770, 775; 455 NW2d 415 (1990). Specific words in a given statute are to be assigned their ordinary meaning, unless a different interpretation is indicated. Id.
MCL 330.1113; MSA 14.800(113) uses the term “weekly net wage.” The circuit court judges held that this term was equivalent to the term “average weekly wage” as defined in MCL 418.371(2); MSA 17.237(371)(2). We disagree. If the Legislature had intended to use that term, it could have done so, but it did not. MCL 330.1113; MSA 14.800(113) refers to full wages as well as weekly net wáge. We believe that this indicates the Legislature’s intent to determine an assaulted employee’s compensation by his base salary (i.e., excluding overtime). Moreover, we believe that taking pica and tax deductions normally made in determining an employee’s net wage is appropriate given the Legislature’s use of the term “weekly net wage.” We also believe that this interpretation achieves the legislative purpose of supplementing an assaulted employee’s workers’ compensation so that he does not suffer financial hardship. In sum, defendants properly determined the respective plaintiffs’ weekly net wage.
We now turn to Pringle’s claim that he was entitled to participate in the deferred compensation plan because it was a fringe benefit. Even assuming that this was a fringe benefit, we hold that Pringle was not entitled to it. MCL 330.1113; MSA 14.800(113) provides that fringe benefits "shall be in effect during the time the employee receives the supplement provided by this section.” Because Pringle was not entitled to the supplement, he was not entitled to fringe benefits.
We recognize that this result may be harsh, and arguably unfair, because the assaulted employees whose weekly net wage exceeds their weekly workers’ compensation benefits will be entitled to fringe benefits whereas those whose weekly net wage is less than their weekly workers’ compensation benefits, no matter how minuscule the difference, will not. Nevertheless, this is the result we are constrained to reach under the clear language of the statute.
Finally, we hold that the Department of Mental Health could fire plaintiffs after one hundred weeks. Jesse, supra. Because plaintiffs would no longer be on the Department of Mental Health’s payroll, they would not be entitled to the supplement. MCL 330.1113; MSA 14.800(113). Jesse, supra. We agree with defendants that Michigan State Employees Ass’n, supra, is distinguishable because there the plaintiff’s supplemental benefits were terminated even though she remained on the department’s payroll. In any event, we agree with defendants that judicial review is precluded until plaintiffs exhaust their administrative remedies. Samuel, supra.
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] |
Per Curiam.
Defendant Board of County Road Commissioners of Wayne County (Wayne County) appeals as of right following a July 14, 1987, Wayne Circuit Court jury verdict in favor of plaintiffs Darryl Baker and Brett Bettis on their personal injury claims. We reverse the jury’s verdict and remand for a new trial because Wayne County’s duty to maintain the improved portion of West Outer Drive in reasonable repair, MCL 691.1402; MSA 3.996(102), does not extend to illumination of the highway or to a tree outside of the highway.
Bettis and Baker were passengers in a car traveling east on West Outer Drive near James Couz ens freeway in Detroit. The driver of the car accelerated to get through a traffic light at James Couzens when the light turned yellow. Almost immediately after James Couzens the highway curves sharply to the left. It was dark out, and the curve was dimly lit. Plaintiffs’ speeding car went out of control after entering the curve and struck a tree on the outside of the curve. Plaintiffs were seriously injured.
Plaintiffs filed a complaint in which they alleged that defendant had negligently failed tp maintain West Outer Drive in reasonable repair by failing to provide adequate warning signs for the curve, failing to erect guardrails on the curve, failing to adequately illuminate the curve, and failing to remove trees near the curve. Plaintiffs presented evidence on each of these alleged defects at trial. Plaintiffs also presented evidence that the roadway of the curve was improperly banked and that the lane markings in the curve were inadequate.
i
An exception to the general immunity of Wayne County from tort liability imposes a duty on Wayne County to maintain the improved portion of highways under its jurisdiction in reasonable repair. MCL 691.1402; MSA 3.996(102). There is presently a split of authority in this Court on whether this duty requires Wayne County to illuminate improved portions of the highway. See Zyskowski v Habelmann (On Remand), 169 Mich App 98, 104; 425 NW2d 711 (1988) (duty does not require county to provide adequate illumination); Scheurman v Dep’t of Trans, 162 Mich App 774, 779-780; 413 NW2d 496 (1987), lv gtd 432 Mich 890 (1989) (duty requires county to provide adequate illumination); see also Alpert v Ann Arbor, 172 Mich App 223, 227-228, 230; 431 NW2d 467 (1988) (noting conflict, and expressly following Zyskowski [On Remand], supra). We join this Court’s decisions in Alpert and Zyskowski (On Remand) in "declining] to extend the . . . exception to include street lighting as part of the improved portion of the highway with regard to liability of the state and counties.” Alpert, supra, p 230.
Plaintiffs argue that this issue was waived because "the county acquiesced at trial in plaintiffs’ definition” and the trial court’s instruction to the jury which "included lighting within the improved portion” of the highway. We disagree.
Plaintiffs’ complaint was originally filed against Wayne County and the City of Detroit. After Wayne County stipulated that the improved portion of West Outer Drive was under its jurisdiction, Detroit moved for summary disposition. Plaintiffs conceded on the condition that the trial court instruct the jury that street lighting is within the improved portion of the highway. Detroit’s motion was granted and the jury was instructed according to plaintiffs’ request. Thereafter, whenever Wayne County raised the issue of lighting in any manner, plaintiffs argued and the trial court agreed that the issue was decided when Detroit’s motion for summary disposition was granted.
The trial court relied on this Court’s first decision in Zyskowski v Habelmann, 150 Mich App 230, 239-240; 388 NW2d 315 (1986), vacated 429 Mich 873-874 (1987), which was the only decision on point at the time of trial and also posttrial. In that decision, we held that once lighting is installed, the duty to maintain the improved portion of the highway includes a duty to maintain the lighting. Zyskowski, 150 Mich App 239-240.
Under the circumstances, we believe that it would have been futile for defendant to object further. Therefore, the issue is not waived. See People v Taylor, 387 Mich 209, 221; 195 NW2d 856 (1972).
II
The evidence in this case conclusively shows that the tree that plaintiffs’ car struck was not part of the improved portion of the highway. Carney v Dep’t of Trans, 145 Mich App 690, 696; 378 NW2d 574 (1985), lv den 424 Mich 889 (1986). Therefore, Wayne County’s motion for a directed verdict on this issue should have been granted rather than taken under advisement until after trial. See Feaheny v Caldwell, 175 Mich App 291, 299-300; 437 NW2d 358 (1989) (motion for directed verdict or judgment notwithstanding the verdict should be granted where there is an essential failure of proof).
Plaintiffs argue on appeal, as they did in response to Wayne County’s motion for judgment notwithstanding the verdict, that defendant was not prejudiced because the issue was not presented to the jury. The trial court agreed. We disagree.
Although the jury was not instructed that the tree was part of the improved portion of the highway, plaintiffs’ allegation that Wayne County was negligent for failing to remove the tree, and other fixed objects near the curve, was the subject of substantial evidence and argument at trial. Glaring examples of this are plaintiffs’ expert’s opinion that the tree "is a nightmare from a traffic safety point of view” and his recommendation that the tree be removed to improve the safety of the road, plaintiffs’ extensive cross-examination of Wayne County’s expert on whether trees are a concern of proper and safe highway design, and plaintiffs’ closing argument in which plaintiffs repeatedly pointed to the tree while repeating their expert’s characterization of it as being in a target position.
Under the circumstances, we cannot conclude that the jury did not consider the tree when it found that the highway was not reasonably safe. Therefore, we conclude that the trial court’s error was not harmless. See MCR 2.613(A).
hi
Wayne County’s remaining arguments are rejected and merit only summary discussion. First, the trial court’s denial of Wayne County’s motion for remittitur was proper for the reasons set forth in the trial court’s opinion, except for the trial court’s passing reference to the "shock the conscience” standard. See Palenkas v Beaumont Hosp, 432 Mich 527, 531-533; 443 NW2d 354 (1989). Nevertheless, the issue of damages will be retried along with the issue of liability. See MCR 7.216(A) (7). Second, although one of the negligence instructions erroneously focused solely on Wayne County, the jury was adequately informed by other instructions that plaintiffs’ contributory negligence was an issue. See MCR 2.613(A). Other claimed instructional errors are waived for failing to object in the trial court. MCR 2.516(C). Third, the issue whether plaintiffs presented sufficient evidence in support of the claimed negligent failure to illuminate the curve is moot following our determination that lighting is not part of the improved portion of the highway. Furthermore, the issue is waived because Wayne County failed to cite authority showing what plaintiffs’ prima facie case was and did not explain how the proofs failed. People v Battle, 161 Mich App 99, 101; 409 NW2d 739 (1987). Last, the issue whether Detroit’s motion for summary disposition was properly granted is waived because Wayne County failed to provide a record of the hearing. People v Johnson, 173 Mich App 706, 707; 434 NW2d 218 (1988).
Affirmed in part, reversed in part and remanded. | [
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Neff, P.J.
Plaintiff appeals as of right from an order of the circuit court granting summary disposition pursuant to MCR 2.116(C)(7) and (10) in favor of defendants and determining that plaintiff’s complaint was barred by the doctrine of adverse possession. We affirm.
i
Plaintiff brought this action after his appointment by the probate court as successor personal representative of the Estate of Lurah M. Neymeiyer and on his petition to reopen the estate to probate after-discovered assets.
In plaintiff’s second amended complaint, he claimed ownership of various oil and mineral interests in Ottawa County and asked the court to quiet his title. Plaintiff called for an accounting and restitution of monies received by defendants and asked for money damages for conversion of oil and gas proceeds and profits received by defendants.
The oil and gas interests at issue here were initially owned by Oil Well Service, Inc., a Michigan corporation which came into existence in 1941 and whose charter became void in 1947. On October 31, 1945, Oil Well Service, Inc., assigned certain of its oil and gas lease interests to Rex Wilcox and John Neymeiyer, each of whom received one-half of the six-eighths working interest represented in the leases. Wilcox and Neymeiyer were shareholders and directors of Oil Well Service, Inc., and together had operated its wells. Neymeiyer died in 1956, leaving his estate to his wife, Lurah Neymeiyer. Lurah Neymeiyer died in July, 1965.
Since 1959 or 1960, Wilcox operated the wells and received one hundred percent of the production proceeds from the working interests which had been leased to Oil Well Service and assigned to Wilcox and Neymeiyer and took Lurah Neymeiyer’s proceeds as well as his own.
On November 20, 1967, Wilcox conveyed the wells and all six-eighths of the working interest in the lease, which included Lurah Neymeiyer’s interest, to Harold and Dorothy Shuck. The Shucks conveyed all their interest to Philip Roberts on July 5, 1968. This assignment was also recorded. Roberts conveyed his interest to Paul and Bernice Shaffer on November 28, 1973. Again, this conveyance was recorded. The Shaffers conveyed their interest to Jack Goodale by quitclaim deed, which also was recorded. Each of these owners operated the wells, and each was conveyed the full six-eighths working interest which represented the total interest originally assigned by Oil Well Service, Inc.
After plaintiff filed his second amended com plaint, defendants Paul Shaffer, doing business as Shaffer Oil Company, Bernice Shaffer, Philip Roberts, Harold Shuck, Dorothy Shuck, and Jack Goo-dale moved for summary disposition. The motion for summary disposition was made pursuant to MCR 2.116(C)(7), (8), and (10) on the bases that the claim was barred by the statute of limitations, that plaintiff was barred from asserting title under the doctrine of adverse possession, and that plaintiff had failed to state a claim as to some of the interests claimed in the complaint because defendants did not own them.
Defendant Dart Energy Corporation also moved for summary disposition pursuant to MCR 2.116(C) (7), alleging that it had purchased oil and gas from Goodale as a purchaser in good faith.
Following a hearing on these motions, the trial court granted the motions for summary disposition on the basis that, under the undisputed facts, defendants had been in adverse possession of the oil and gas interests claimed by plaintiff for over twenty years. Plaintiff now appeals as of right, raising several issues. However, one issue, that of adverse possession, is dispositive.
ii
Plaintiff claims that the trial court erred when it determined that his cause of action was barred by the doctrine of adverse possession. We disagree.
Adverse possession must be established by clear and cogent proof that the claimant’s possession was actual, visible, open, notorious, exclusive, continuous, and uninterrupted for the statutory period of fifteen years. Burns v Foster, 348 Mich 8, 14; 81 NW2d 386 (1957); McQueen v Black, 168 Mich App 641, 643; 425 NW2d 203 (1988). The possession must be hostile and under cover of a claim of right. Burns; supra; McQueen, supra. These same elements are required to establish adverse possession of mineral rights such as oil and gas leases. Diederich v Ware, 288 SW2d 643, 646 (Ky, 1956).
To make good a claim of title by adverse possession, the true owner must have actual knowledge of the hostile claim or the possession must be so open, visible, and notorious as to raise the presumption of notice to the world that the right of the true owner is invaded intentionally. [Burns, supra, p 15.]
In Caywood v Dep’t of Natural Resources, 71 Mich App 322, 331; 248 NW2d 253 (1976), this Court stated:
Whether adverse possession is established depends upon the facts of each case and the character of the premises. . . . Acts of ownership which openly and publicly indicate an assumed control or use consistent with the character of the premises are sufficient. [Citations omitted.]
In this case, defendants Shuck, Roberts, Shaffer, and Goodale had openly, notoriously, exclusively, and successively possessed full working interests in the oil and gas leases under color of title. They also received one hundred percent of the working interests proceeds generated by operation of the wells. Each assignment of the interests in the leases was recorded with the county register of deeds. Wilcox had also operated the oil and gas interests exclusively from at least 1960 and, during that time, had kept all of the proceeds from this operation even though Lurah Neymeiyer held fifty percent ownership in the working interests. The elements of adverse possession were met by these undisputed facts.
Plaintiff argues that Michigan does not recognize mineral interests as real property interests which can be adversely possessed. We disagree. Oil and gas leases are considered real property interests. Eadus v Hunter, 268 Mich 233, 238; 256 NW 323 (1934). In Van Slooten v Larsen, 410 Mich 21, 45; 299 NW2d 704 (1980), our Supreme Court stated:
[A]bsent actual possession of the severed mineral estate, possession of the surface estate pursuant to a deed reserving a severed mineral interest cannot ripen into adverse possession of the mineral estate.
We believe that this statement from Van Slooten implies that, as here, actual possession of a mineral estate that had been severed from the surface estate could ripen into title to the mineral estate by adverse possession.
hi
In light of our resolution of this issue, we need not reach plaintiff’s additional issues.
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] |
Per Curiam.
Petitioner, Dow Chemical Company, appeals as of right from the May 23, 1989, opinion and judgment of the Michigan Tax Tribu nal affirming the single business tax liability assessed against Dow by respondent, Michigan Department of Treasury. The liability arose out of the department’s finding that Dow’s transfer of its oil and gas division constituted a sale requiring recapture of a capital acquisition deduction pursuant to MCL 208.23(b); MSA 7.558(23)(b). We affirm.
The facts of this case are undisputed. Dow, a Delaware corporation with its principal place of business in Midland, Michigan, is the parent corporation of an affiliated group of corporations conducting business throughout the world. Dow’s primary business operations include the manufacture and sale of organic and inorganic chemicals. Dow’s hydrocarbon department is responsible for the acquisition of hydrocarbon raw materials (natural gas, naptha, petroleum and liquid petroleum gas) for United States manufacturing sites.
Prior to 1982, Dow’s hydrocarbon department included an oil and gas division. This division provided approximately twenty-five percent of Dow’s hydrocarbon raw materials. Dow acquired the majority of its raw materials from third-party suppliers.
In early 1982, Dow’s management decided to dispose of its oil and gas division and rely solely on third-party suppliers for hydrocarbon raw materials. Later that year, Dow commenced discussions with Apache Corporation (Apache) for sale of the oil and gas division to Apache Petroleum Company (apc), a limited partnership. Apache is the general partner in apc.
Dow and Apache’s negotiations concluded in September, 1982. As a result, Dow and apc executed an acquisition, exchange and partnership formation agreement on September 30, 1982. The agreement provided that in exchange for Dow transferring its oil and gas division to apc Dow received: (1) $79,425,976; (2) ten million units (certificate of interest) of apc worth $18.90 per unit; and (3) apc’s assumption of $150,000,000 of Dow’s debts.
Dow reported the transaction with apc on its 1982 federal income tax return. Dow reported that it had sold an undivided portion of its oil and gas division assets to apc for $79,425,976. Dow treated the remainder of the transaction as a transfer to a partnership under § 721 of the Internal Revenue Code, 26 USC 721. Furthermore, on its 1982 Michigan single business tax return, Dow showed no recapture of a capital acquisition deduction resulting from the transaction with apc.
Subsequently, the Michigan Department of Treasury audited Dow’s single business tax return. The department concluded that the apc transaction was an event requiring full recapture of a capital acquisition deduction resulting in a $50,473,840 tax liability (before apportionment to Michigan) against Dow. Dow conceded that liability for nineteen percent of this amount was proper, as it represented the cash payment Dow received. However, Dow took issue with the remainder of the amount.
After completion of the audit, Dow petitioned the Michigan Department of Treasury for administrative review of the question whether Dow’s transfer of its oil and gas division to apc constituted a "sale” requiring recapture of a capital acquisition deduction under MCL 208.23(b); MSA 7.558(23)(b).
Following a hearing before a referee, the Department of Treasury issued its decision and order of determination on October 10, 1986. The decision and order concluded that Dow had "sold” its oil and gas division to apc, necessitating recapture. The department then issued a Notice of Final Assessment as to the $50,473,840 tax liability against Dow.
On November 16, 1986, Dow filed a petition with the Michigan Tax Tribunal requesting review of the Department of Treasury’s decision. On May 23, 1989, the Tax Tribunal issued its opinion and judgment, ruling that there was a single transaction between Dow and apc in which Dow "sold” its oil and gas division to apc. The Tax Tribunal affirmed the Department of Treasury’s decision.
On appeal, Dow does not dispute that the $79,425,976 cash payment for the oil and gas division required recapture of a capital asset deduction. Thus, Dow agrees that a portion of the transaction was a sale or other disposition requiring recapture. However, Dow contends that the remaining consideration it received from apc (10,000,000 units of apc and apc’s assumption of $150,000,000 of debt) was not a sale or other disposition. Rather, Dow argues that the remaining consideration constituted a transfer in exchange for a partnership interest under §721 of the Internal Revenue Code, 26 USC 721. Dow. claims that no gain or loss is recognized and, therefore, recapture does not occur. In essence, Dow asserts that there were two transactions with respect to transfer of its oil and gas division: (1) a sale, and (2) a contribution in exchange for a partnership interest.
The Tax Tribunal disagreed with Dow’s characterization and found that only one transaction occurred, which was a sale requiring recapture of a capital acquisition deduction.
This Court’s review of Tax Tribunal decisions, in the absence of fraud, is limited to whether the tribunal made an error of law or adopted a wrong principle. We accept the factual findings of the tribunal as final, provided they are supported by competent, material, and substantial evidence. Const 1963, art 6, § 28; Antisdale v City of Galesburg, 420 Mich 265, 277; 362 NW2d 632 (1984); Fisher v Sunfield Twp, 163 Mich App 735, 741; 415 NW2d 297 (1987). Substantial evidence must be more than a scintilla of evidence, although it may be substantially less than a preponderance of the evidence required in most civil cases. Russo v Dep’t of Licensing & Regulation, 119 Mich App 624, 631; 326 NW2d 583 (1982). The burden of proof in an appeal from an assessment, decision, or order of the Tax Tribunal is on the appellant. Holloway Sand & Gravel Co, Inc v Dep’t of Treasury, 152 Mich App 823, 831, n 2; 393 NW2d 921 (1986).
Under the Michigan Single Business Tax Act, MCL 208.1 et seq.; MSA 7.558(1) et seq., taxpayers are allowed to recover the cost of certain tangible assets in the year of acquisition. The recovery is accomplished by taking what is known as a capital acquisition deduction. However, when an asset is sold or otherwise disposed of, the taxpayer must recapture (pay back) that portion of the capital acquisition deduction that has not been economically exhausted.
The recapture of a capital acquisition deduction is specifically provided for in § 23(b) of Michigan’s Single Business Tax Act, MCL 208.23(b); MSA 7.558(23)(b), which states:
After allocation as provided in section 40 or apportionment as provided in section 41, the tax base shall be adjusted by the following:
(b) Add the gross proceeds or benefit derived from the sale or other disposition of the tangible assets defined in subdivision (a) minus the gain and plus the loss from the sale reflected in federal taxable income and minus the gain from the sale or other disposition added to the tax base in section 9(6). This addition shall be multiplied by a fraction, the numerator of which is the payroll factor plus the property factor and the denominator of which is 2. As used in this subdivision, "sale or other disposition” shall not include the transfer of tangible assets that are leased back to the transferor under section 168(f)(8) of the internal revenue code.
The formula contained in this section effectuates recapture in situations where a "sale or other disposition” is taxable at the federal level. The formula does not provide for recapture in "npnrecognition dispositions,” which are situations in which gain or loss is not recognized under federal income tax law. An example of such a situation is a transaction involving contributions to partnerships.
While MCL 208.23(b); MSA 7.558(23)(b) does not address the question of recapture and contributions to partnerships, we are given some guidance by the Michigan Department of Treasury in its Tax Bulletin 1981-Z. In this publication, the department has indicated that certain transfers of property, for single business tax purposes, do not cause recapture of a capital acquisition deduction by the transferor. The department, utilizing federal income tax law, listed one such transfer as:
Contribution to a partnership. The transfer of property where no gain or loss is recognized under irc Section 721.
The issue involved in the instant case concerns whether that portion of Dow’s transfer of its oil and gas division to apc in which Dow received 10,000,000 units of apc and assumption of $150,000,000 of its debt in exchange constituted contribution to a partnership within the context of § 721 of the Internal Revenue Code, thereby eliminating recapture, or whether the entire transaction constituted a sale outside the scope of § 721 thus requiring recapture.
In order to address this issue we must first review the language of § 721, which states in relevant part:
(a) General rule—No gain or loss shall be recognized to a partnership or to any of its partners in the case of a contribution of property to the partnership in exchange for an interest in the partnership.
The Internal Revenue Division of the United States Department of Treasury interpreted the above cited rule in CFR 1.721-l(a), stating:
Section 721 [of the Internal Revenue Code] shall not apply to a transaction between a partnership and a partner not acting in his capacity as a partner since such a transaction is governed by section 707. Rather than contributing property to a partnership, a partner may sell property to the partnership or may retain the ownership of property and allow the partnership to use it. In all cases, the substance of the transaction will govern, rather than its form. See paragraph (c)(3) of § 1.731-1. Thus, if the transfer of property by the partner to the partnership results in the receipt by the partner of money or other consideration, including a promissory obligation fixed in amount and time for payment, the transaction will be treated as a sale or exchange under section 707 rather than as a contribution under section 721. [Emphasis added].
Section 707 of the Internal Revenue Code, 26 USC 707, provides in pertinent part:
(a) Partner not acting in capacity as partner.
(1) In general. If a partner engages in a transaction with a partnership other than in his capacity as a member of such partnership, the transaction shall, except as otherwise provided in this section, be considered as occurring between the partnership and one who is not a partner.
* * *
(A) Treatment of certain property transfers. If— (i) there is direct or indirect transfer of money or other property by a partner to a partnership,
(ii) there is a related direct or indirect transfer of money or other property by the partnership to such partner (or another partner), and
(iii) the transfers described in clauses (i) and (ii) when viewed together are properly characterized as a sale or exchange of property, such transfers shall be treated either as a transaction described in paragraph (1) or as a transaction between 2 or more partners acting other than in their capacity as members of the partnership.
A review of legislative history lends insight into the purpose for distinguishing contributions to partnerships from sales. We believe that such information will help us characterize the transaction between Dow and apc.
In 1984, a United State House of Representatives conference report was prepared on the Deficit Reduction Act of 1984 (PL 98-369). The Act amended certain sections of the Internal Revenue Code. The Act specifically amended § 707 and the conference report on the amendment contained the following discussion on disguised sales:
The bill [§ 707] provides that, when a partner transfers money or other property to a partnership and there is a related direct or indirect transfer of money or other property to that partner or other partner, the transaction is to be treated (as appro priate) as a sale between the partners of property (including partnership interests) or as a partial sale and partial contribution of the property to the partnership. The selling partner will be required to recognize gain (or loss) on all or part of the amount received in the transaction. This rule is intended to prevent the parties from characterizing a sale or exchange of property as a contribution to the partnership followed by a distribution from the partnership thereby deferring or avoiding tax on the transaction.
To accomplish this, the bill authorizes the Treasury Department to prescribe such regulations as may be necessary or appropriate to carry out the purpose of this provision. In prescribing these regulations, the Treasury should be mindful that the committee is concerned with transactions that attempt to disguise a sale of property and not with non-abusive transactions that reflect the various economic contributions of the partners. [HR Rep No. 98-432, part II, reprinted in 1984 US Code Cong and Adm News, vol 3, p 886.]
The above statements lead us to the initial conclusion that a transaction between a partner and partnership can be viewed as multiple events. The conference report clearly states that a transfer of property can be viewed as a partial sale and a partial contribution to a partnership. Therefore, as a reviewing court, we must take a piecemeal approach and look individually at each element of the consideration Dow received and characterize each element as either a sale or contribution. In doing so, we conclude that Dow is correct in its assertion the transaction with apc can be viewed as a series of separate transactions.
The first event of the transaction was apc’s payment of cash to Dow. Dow concedes and we agree that the portion of the transaction in which Dow received $79,425,976 for transfer of its oil and gas division constituted a transfer of property by Dow for which Dow received money, and thus, constituted a sale under § 707 rather than a contribution under § 721. Consequently, pursuant to MCL 208.23(b); MSA 7.558(23)(b), recapture is required.
The second event involved in the transaction encompasses apc’s assumption of $150,000,000 of Dow’s debt. The United States Department of Treasury, in interpreting §721 in CRF 1.721-l(a) specifically stated that, if the transfer of property by the partner to the partnership results in the receipt by the partner of money or other consideration, then the transaction will be treated as a sale under § 707. We believe that relief from debt constitutes "other consideration,” since consideration can be defined as a right, interest, profit, or benefit accruing to one party, or some loss or responsibility suffered or undertaken by the other. 6A Michigan Law & Practice, Contracts, § 51, p 113. In this case, Dow received the benefit of relief from a portion of its debt, while apc undertook the responsibility for this debt. Therefore, Dow received consideration for its transfer of the oil and gas division. Therefore, we feel that the portion of the transaction involving the $150,000,000 debt assumption was not a contribution under § 721 but rather a sale under § 707, requiring recapture pursuant to MCL 208.23(b); MSA 7.558(23)(b).
The third and final event in the transaction involves Dow’s receipt of 10,000,000 units of apc. This event presents some difficulty because of the nature of the consideration.
Under § 721, no gain or loss shall be recognized when a partner contributes property to a partnership in exchange for an interest in the partnership. Viewing this language literally, it would at first glance appear that the transaction with respect to the 10,000,000 units would constitute a contribution to the partnership, since Dow was given certificates of interest in the partnership in exchange. However, as previously noted, the United States Department of Treasury has stated that the substance of the transaction rather than the form will govern. CFR 1.721-l(a). In addition, Congress, in enacting § 707, was concerned with preventing parties from disguising the sale of property as a contribution to a partnership. In keeping these two factors in mind, we believe that, while Dow received interest in apc as part of the oil and gas division, the substance of the transaction was a sale.
Dow and apc were not partners prior to the transaction. As a factual matter, Dow and apc executed a partnership formation agreement simultaneous to consummating the acquisition of the oil and gas division. While this by no means constitutes conclusive evidence of Dow and apc’s intention, we believe that it at least casts some doubt on Dow’s argument that the transaction, insofar as the 10,000,000 units of apc are concerned, constituted a contribution to the partnership. It would appear to us that Dow and apc, in simultaneously forming the partnership, were attempting to disguise the sale as a contribution to the partnership under § 721.
Further support for this conclusion can be found in the United States Tax Court’s decision in Otey v Comm’r of Internal Revenue, 70 TC 312 (1978), aff'd 634 F2d 1046 (CA 6, 1980). In Otey, the partner transferred property to the partnership in exchange for money of an equal amount from loan proceeds of the partnership. The transferred property was the only property of the partnership. The Tax Court found that the partnership’s ability to repay the bank loan from which the partner was paid would depend on the partnership’s subse quent economic fortunes. Id., p 320. The Tax Court ruled these circumstances were more indicative of a § 721 transaction as opposed to a § 707 transaction. In reaching this conclusion, the Tax Court stated:
An important feature distinguishing transfers in the capacity of a partner from section 707 transactions is whether payment by the partnership to the partner is at the risk of the economic fortunes of the partnership. [Otey, supra, p 320.]
In the case at bar, we, like the Tax Tribunal, conclude that payment by apc of 10,000,000 units to Dow was not at the risk of the economic fortunes of the partnership. First, the transfer of the units did not represent all the property of the partnership. Second, apc transferred its units to a powerful and profitable corporation. We do not see how having a strong company attain interest would hurt economic fortunes. Finally, apc received substantial property (Dow’s oil and gas division) from Dow in exchange for its payments which included leaseholds which could provide a large amount of natural resources.
In light of the above findings, we believe that the portion of the transaction involving the 10,000,000 units was a sale requiring recapture under MCL 208.23(b); MSA 7.558(23)(b).
In sum, while we have concluded that there can be a partial sale and partial contribution arising out of a single transaction, we believe that the entire transaction between Dow and apc constituted a sale necessitating recapture of a capital acquisition deduction by Dow. Therefore, we cannot say the Tax Tribunal in rendering its decision made an error of law or adopted a wrong principle. Antisdale v City of Galesburg, supra.
We affirm the May 23, 1989, opinion and judgment of the Tax Tribunal assessing a single business tax liability against Dow.
Affirmed. | [
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Per Curiam.
Gerald Stiles, conservator of the estate of Heather Stiles, appeals as of right from a March 24, 1989, order finding plaintiff Citizens Insurance primarily liable for Heather Stiles’ medical expenses, and defendants Greater Flint HMO’s and Healthplus of Michigan’s coordination of benefits clauses preclusive to double recovery for said expenses. We affirm.
Heather Stiles, a minor, was injured when a truck struck the off-road vehicle in which she was a passenger. It is undisputed that Citizens, the no-fault insurer of the truck that struck Heather, bears primary responsibility for payment for her injuries. Greater Flint HMO and Healthplus of Michigan are the health maintenance organizations to which Heather’s father and stepmother, respectively belong. The issue on appeal is whether, given Citizens’ primary liability, duplicative recovery for Heather’s expenses may also be had from Greater Flint HMO or Healthplus of Michigan.
In the course of the instant suit, as of January 1, 1987, Greater Flint HMO changed to Blue Care Network. The certificate of coverage also changed. Thus, a dispute arose as to which coverage applied, the certificate in effect in 1986 or the 1987 certificate. On appeal appellant first argues that, even if the 1986 certificate of coverage did not allow duplication, the 1987 certificate of coverage does. Although we believe the trial court erred in ruling the 1986 certificate of coverage applicable to all expenses, including those incurred after the corporate change, Greater Flint HMO now concedes the 1987 certificate is also applicable. However, Greater Flint HMO contends duplicative recovery is precluded under the new policy. We agree.
Appellant relies on the following language contained in the Blue Care Network certificate:
Benefits under this Certificate exclude services and treatment for any work related injury to the extent that benefits are paid or payable under any workers’ compensation program or other similar program. Where services are provided by Health Plan, Health Plan is assigned the Member’s rights to seek reimbursement from the other program or insurer. Beneñts under this Certiñcate wiU not be reduced because of the existence or coverage under a Member’s non-coordinated no-fault automobile policy. If the member is covered by a coordinated no-fault automobile policy, the health plan will assume primary liability to provide benefits available under this Certificate in accordance with this Certificate’s terms and conditions. [Emphasis added.]
However, as noted by Greater Flint HMO, this language prevents reduction of benefits due to the existence of coverage under a member’s noncoordinated no-fault automobile policy. The instant case involved a third party’s noncoordinated no-fault automobile policy, not the member’s, Stiles’, policy. This limitation on duplicative recovery is indicated in two additional sections of the policy. Thus, although the language of the 1987 certificate of coverage allows for duplicative recovery where a member’s noncoordinated no-fault insurance carrier is primarily liable, such is not the situation in the instant case.
We also reject appellant’s claims of invalidity pertaining to the coordination of benefits clauses contained in Healthplus’ certificate of coverage and Greater Flint HMO’s 1986 certificate of coverage. Appellant’s arguments address improper exclusions, not limitations imposed by coordination of benefits clauses. Moreover, we find neither clause ambiguous.
Affirmed.
3.01 NONDUPLICATION
Health Plan provides each Member with full health care services within the limits of this Certificate. Health Plan does not duplicate beneñts provided or paid for by another party nor provide a Member with greater beneñts than the actual expenses incurred. Benefits under this Plan will be reduced to the extent that they are available or that reimbursement is payable under any other group certificate, group insurance policy, or other group program covering the Member whether or not a claim is made for the benefits. Benefits will be coordinated, as outlined below, to provide 100% coverage whereever possible for services covered in whole or in part under either plan but in no event will beneñts be provided which would result in payments in excess of 100% of the total amounts to which providers or Members are entitled. [Emphasis added.]
3.04 SUBROGATION
A. Subrogation means that Health Plan will have the same right as a Member to recover expenses for treatment of an injury or illness for which another person or organization is legally liable. To the extent Health Plan will be subrogated to the Member’s right to recovery against the responsible person or organization, Health plan will not subrogate against insurers on policies issued to and in the name of the Member. [Emphasis added.] | [
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] |
Holbrook, Jr., J.
Plaintiff was ordered to pay third-party plaintiffs $9,084.47 after the Jackson Circuit Court found that the third-party plaintiffs possessed a perfected security interest in the assets of defendant Tri-Bend, Inc. Plaintiff appeals as of right, claiming that the third-party plaintiffs did not have a valid security interest under Article 9 of the Uniform Commercial Code and that the conveyance of the security interest was invalid under the Business Corporation Act, MCL 450.1101 et seq.; MSA 21.200(101) et seq., and the Uniform Fraudulent Conveyance Act, MCL 566.11 et seq.; MSA 26.881 et seq. We affirm.
The essential facts are undisputed. Plaintiff sold material on an open account to defendant TriBend, Inc., between August and December of 1984. By April 30, 1985, Tri-Bend owed plaintiff almost $40,000. Third-party plaintiffs, Tri-Bend’s sole shareholders, sold the business in May, 1985, to Fernand St. Germain, Donald D. Blakely, and Shannon Rowe. The purchase agreement recited a purchase price of $33,900, with $3,900 to be paid within six months at ten percent interest and the remaining $30,000 to be paid within a five-year period, also at ten percent interest. The agreement stated: "These will be personal and Tri-Bend notes.”
Attendant to the purchase transaction, Tri-Bend, through one of the new shareholders acting as president, issued promissory notes in the amount of $10,000 to each of the three third-party plaintiffs. As a means of securing these notes, Tri-Bend entered into a security agreement which granted each third-party plaintiff a security interest in TriBend’s assets. A financing statement was duly filed with the Secretary of State’s ucc unit on July 17, 1985. The three new shareholders signed a guarantee agreement which personally guaranteed the entire amount of Tri-Bend’s debt to third-party plaintiffs.
Plaintiff obtained a $37,339.30 consent judgment against Tri-Bend in April, 1986, and obtained a writ of execution in April, 1987. Tri-Bend’s assets were sold in a July, 1987, foreclosure sale conducted by Michigan National Bank—Midwest, which apparently held a first-priority security interest in Tri-Bend’s assets. Although the record does not reveal the circumstances through which the bank obtained its security interest, it was apparently acquired prior to the May, 1985, sale.
The foreclosure sale completely liquidated TriBend’s obligations to the bank and realized excess proceeds of $9,084.47. The excess was paid over to plaintiff pursuant to the writ of execution. Third-party plaintiffs intervened, claiming that as second-priority secured creditors they had priority over judgment creditors and were therefore entitled to the excess proceeds. The trial court held that third-party plaintiffs held a valid Article 9 security interest and ordered the excess proceeds paid over to them.
i
Plaintiff raises five issues on appeal. First, plaintiff questions whether the security interest given by Tri-Bend to its previous shareholders, third-party plaintiffs, was valid pursuant to the ucc since no value was given.
Section 9-203(1) of the ucc, MCL 440.9203(1); MSA 19.9203(1), provides that a security interest is not enforceable against the debtor or third parties with respect to the collateral and does not attach unless:
(a) The collateral is in the possession of the secured party pursuant to agreement, or the debtor has signed a security agreement which contains a description of the collateral and in addition, when the security interest covers crops growing or to be grown or timber to be cut, a description of the land concerned; and
(b) Value has been given; and
(c) The debtor has rights in the collateral.
While plaintiff freely concedes that (a) and (c) are satisfied, it argues that no value was given since Tri-Bend received nothing as consideration for the pledge of its assets and that the agreement is therefore unenforceable. We disagree.
By its plain language, UCC 9-203(1) does not require that the debtor receive anything in order for the security agreement to attach; it only requires that the secured party give value. See generally, White and Summers, Uniform Commercial Code, §23-4, pp 791-793. UCC 1-201(44), MCL 440.1201(44); MSA 19.1201(44), provides that a person gives value for rights to collateral if the person acquires them:
(a) In return for a binding commitment to extend credit or for the extension of immediately available credit. . . .
(d) Generally, in return for any consideration sufficient to support a simple contract.
Third-party plaintiffs extended the purchasers $3,900 credit for six months and $30,000 credit for five years at ten percent simple interest per annum. The security agreement memorializes that in return for this extension of credit third-party plaintiffs were given rights in Tri-Bend’s assets. It is clear value was given pursuant to subsection (a).
Value was also given pursuant to subsection (d) as there was consideration sufficient to support a simple contract. In Highland Park v Grant-Mackenzie Co, 366 Mich 430, 446-447; 115 NW2d 270 (1962), our Supreme Court stated: "That the consideration for a promise may inure to one other than the promisor or may lie in a detriment to the promisee is a well-established principle of contract law.” Tri-Bend was the promisor in the security agreement and third-party plaintiffs were the promisees. When they sold their shares of stock on credit, third-party plaintiffs clearly suffered a detriment. It was not necessary for the consideration to inure to Tri-Bend in order for there to be sufficient consideration to support the contract between Tri-Bend and third-party plaintiffs.
We conclude, therefore, that third-party plaintiffs gave value when they entered into the agreement extending credit to the three individuals who purchased the stock in Tri-Bend. Thus, UCC 9-203(l)(b) was satisfied and the agreement was enforceable against plaintiff.
ii
Plaintiff next argues that Tri-Bend’s pledge of its assets should be considered an ultra vires act and thus invalid.
MCL 450.1261(g); MSA 21.200(261)(g) provided at the time of such pledge that a Michigan corporation has the power, in the furtherance of corporate purposes, to “[s]ell, convey, lease, exchange, transfer or otherwise dispose of, or mortgage or pledge, or create a security interest in, any of its property, or an interest therein, wherever situated,” subject to limitations provided by the articles of incorporation.
Plaintiff at bar does not allege that Tri-Bend’s articles of incorporation imposed any limitations on the corporation’s powers to create security interests in its property. Under the clear meaning of the statutory language and absent limitations in the articles of incorporation, the creation of the security interest was not an ultra vires act and was therefore proper.
hi
Third, plaintiff argues that while, in form, the transaction between third-party plaintiffs and the new shareholders was the purchase of stock, in substance, it was a stock redemption. Plaintiff argues that since Tri-Bend was insolvent when the transaction occurred, the transaction was void and should not be enforced.
MCL 450.1365(2)(b); MSA 21.200(365)(2)(b) provided at the time of the transaction that a corporation shall not purchase or redeem its shares when “the corporation is insolvent or when the purchase or redemption would render the corporation insolvent.” For purposes of the Business Corporation Act, the term "insolvent” was defined at the time of the transaction as "being unable to pay debts as they become due in the usual course of a debtor’s business.” MCL 450.1107(3); MSA 21.200(107X3).
While there is no dispute that at the time of the transaction Tri-Bend was in considerable arrears on its account with plaintiff and thus insolvent as that term is defined for purposes of the Business Corporation Act, there is no merit to plaintiff’s claim that the disputed transaction was essentially a stock redemption scheme.
Although the purchase agreement, with the corporation issuing a promissory note and pledging its assets as collateral and the new shareholders each guaranteeing personally the corporation’s debt, is somewhat ambiguous as to who was actually purchasing the stock, looking beyond its form in determining the substance of the transaction, as plaintiff urges, we conclude that the transaction was indeed a purchase of the stock by the new shareholders. Since the new shareholders personally guaranteed Tri-Bend’s debt to third-party plaintiffs, the purchasers, and not the corporation, were ultimately responsible for the purchase price. The transaction was a purchase and not a redemption and the issue of Tri-Bend’s solvency is completely irrelevant.
iv
Plaintiff next proposes that this Court view the transaction as a dividend to former shareholders. Treated as such, the dividend would be illegal because it was made while the corporation was insolvent or when the corporation would be rendered insolvent by the dividend.
A corporation may not declare and pay dividends, or make other distributions on its outstand ing shares, when the corporation is insolvent or would be made insolvent by the dividend or distribution. MCL 450.1351; MSA 21.200(351), in effect at the time of the transaction. This Court has defined a dividend as a "distribution of the net income of a corporation to the shareholders of that corporation” whether or not it is termed or even considered a dividend by its directors or shareholders. Allied Supermarkets, Inc v Grocer’s Dairy Co, 45 Mich App 310, 314; 206 NW2d 490 (1973), affd 391 Mich 729; 219 NW2d 55 (1974).
Plaintiff’s characterization of the transaction as an illegal dividend distribution is without merit. When the transaction was completed, third-party plaintiffs no longer held stock in the corporation and the corporation, through a promissory note personally guaranteed by the new shareholders, stood indebted to them. The transaction was nothing more and nothing less than a purchase and sale of Tri-Bend’s stock.
v
Lastly, plaintiff argues that the note and security interest given by Tri-Bend was a fraudulent conveyance because equivalent value was not received in exchange. Plaintiff alleges that the transaction in which third-party plaintiffs sold their stock to the three new shareholders, and Tri-Bend pledged its assets as security, was a leveraged buy out. Plaintiff urges this Court to follow the rationale of United States v Tabor Court Realty Corp, 803 F2d 1288 (CA 3, 1986), cert den sub nom McClellan Realty Co v United States, 483 US 1005; 107 S Ct 3229; 97 L Ed 2d 735 (1987), and hold that such a transaction is void under the Uniform Fraudulent Conveyance Act.
A careful review of the record below reveals that this issue was neither raised nor addressed there. Issues first raised on appeal need not be addressed by this Court. Ledbetter v Brown City Savings Bank, 141 Mich App 692, 701-702; 368 NW2d 257 (1985). Review may be granted if failure to consider an issue would result in manifest injustice or is necessary to a proper determination of the case. Richards v Pierce, 162 Mich App 308, 316; 412 NW2d 725 (1987).
There is no evidence in this case to suggest that third-party plaintiffs acted in anything other than good faith in conveying their Tri-Bend stock to the new shareholders. Under the circumstances, we will not disregard our issue preservation requirements.
Affirmed. | [
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Long, J.
On May 7, 1888, the defendant, a Michigan corporation, issued to the husband of plaintiff a policy of insurance for $5,000 upon a premium being paid of $25. A written application was filled out by the defendant’s agent at Muskegon, and was signed-by Bigelow T. Cook, the husband of plaintiff, the plaintiff being named as the beneficiary in the policy. The application contained the following clause:
“16. My habits of life are correct and temperate, and I understand and agree that the policy to be issued on this application will not cover any accidental injury which may happen to me either while under the influence of narcotics or intoxicating drinks, or in consequence of having been under the influence of either.”
The policy contains clauses making the amount due and payable to the plaintiff on account of death of her husband resulting from “ injuries to the body caused by external, violent, and accidental means, within the meaning of the policy,” and purports to be issued in consideration of the statement of facts warranted to be true in the application, and upon conditions printed upon the back of the policy, which the policy provides cannot be waived or altered by any agent. Among such conditions it is provided that the insurance does not cover a death resulting wholly or partly directly from intoxication, etc.^ or when affected by any such act, cause, or condition, or under its influence.
On the evening of February 28, 1889, Bigelow T. Cook was killed by falling upon a slippery sidewalk in front of his own house. The present action was brought to recover on the policy, and on the trial before a jury in the Muskegon circuit court the plaintiff had verdict and judgment for the amount claimed under the policy. Defendant brings error
In the' notice attached to the plea of the general issue, it was claimed that Cook, when he made the application, was in the habit of using intoxicating drinks to excess, and concealed such, fact from the defendant when applying for the policy, and that his death was not occasioned by bodily injuries effected through accidental means, within the meaning of the policy, but that the same happened while he was under the influence of intoxicating drinks.
It appears that Mr. E. W. Eadus.was the local agent of the defendant company at Muskegon, and took the application and issued the policy in question. He was acting under the State agent, Mr. J. T. Patton, who furnished him with blank applications and a book of blank policies, which Eadus filled out and delivered to parties when receiving the applications. It appears that before that time, and on May 9, 1887, Eadus had taken an application from Cook of like tenor, and issued to him a policy of like terms and conditions, for the same amount, which was to continue in force one year from that date. During the life of that policy, Mr. Cook met with an injury which resulted in his being laid up for some time, having a claim against the company, for several weeks’ indemnity. While Mr. Cook was suffering from this injury, Mr. Patton, the State agent of the company, visited Muskegon. Mr. Eadus, on the trial of this case, when called as a witness for the plaintiff, testified that at the time Patton was at Muskegon, which was before the present application was taken or the policy issued, he told Patton that in his opinion Cook was under the influence of liquor when he met with the accident; that he tried to have Cook admit that he was, and that Cook had told witness that he wanted an accident policy to cover him that would protect him in any place he might go, and any condition he might be in. He also told Patton^ on that occasion that Cook had told him he did not want a policy unless it would protect him in any condition he might be in. He also told Pat ton at that time that Cook was a drinking man, drank every day, but seldom became intoxicated; and Patton asked if Cook was a man that was liable to get into trouble over his intoxication, and witness told him, “No.” Eadus also told Patton that Cook would be satisfied with eight weeks’ indemnity, or $200, and asked him:
“While you are here this time,-what shall I do about renewing the policy again?” When Patton said, “Yes, renew the policy. He is $175 ahead, or will be when we pay this claim, and the only way to get even is to keep on insuring him, and then we can consider about stopping when we get even.”
This statement of Eadus is denied by Mr. Patton. He claims that he had no knowledge of the condition of Mr. Cook, or of his habits of drinking, and was not advised by Mr. Eadus; that he had no authority from the company to waive any of the conditions in the printed application, or of the policy, and that Eadus had no such authority; that the company had nothing to' do with Mr. Eadus; that Eadus was under his authority and supervision.
Two questions were submitted on this subject to the jury by the plaintiff for special findings, and they found as follows:
“ Q. Did the local agent, E. W. Eadus, at the time the policy in suit was issued, have knowledge that the habits of Bigelow T. Cook were not correct and temperate?
“A. Yes.
“ Q. Did the State agent of defendant, J. T. Patton, direct and advise the local agent, Eadus, to reinsure Mr. Cook after Eadus had told him he thought Cook was intoxicated at the time he was injured in February, 1888? •
“A. Yes.”
It is' not strenuously contended but that Mr. Cook was a person in the habit of getting intoxicated at the time the application was made, but it is insisted that, although he stated in his application for the policy that his habits of life were correct and temperate, the agent having •knowledge of his habits in that regard, and after such knowledge having issued the policy and received the premium, thereby causing Cook to rely upon the policy as valid, the company is now estopped from setting that fact up to defeat a recovery on the policy; that this knowledge of the agent of the company in relation to the habits of Mr. Cook in indulging in intoxicating liquors is the knowledge of the company, and operated as a waiver of the conditions of the policy relating to intoxication, and estopped the defendant from asserting, as a defense to the suit, that Cook was intoxicated at the time he met with the injury. In support of this contention, counsel cite Peoria, etc., Ins. Co. v. Hall, 12 Mich. 202; Aetna, etc., Ins. Co. v. Olmstead, 21 Id. 246. But it will be found on an examination of those cases that the power of the agents was in no manner limited by the terms of the policies themselves. .
In the present case, the policy provides that the agent of the company cannot waive or alter any of the agreements and conditions printed on the back of the policy. This question was fully discussed by Mr. Justice Morse in Cleaver v. Insurance Co., 65 Mich. 527, 532, and it was there said:
CfIt cannot be successfully maintained but that the company has the right and the power to restrict, as it may choose, the powers and duties of its agents, and, when the authority is expressly limited and restricted by the policy which the insured receives, there can be no good reason, either in law or equity, why such limitations and restrictions shall not be considered as known to the insured, and binding upon him. * * * When the policy of insurance, as in this case, contains an express limitation upon the power of the agent, such agent has no legal right to contract as agent of the company with the insured, so as to change the conditions of the policy, or to dispense >vith the performance of any essential requisite contained therein, either by parol or writing; and the holder of the policy is estopped, by-accepting the policy, from setting up or relying upon the powers in the agent in opposition to the limitations and restrictions in the policy.'”
This doctrine Was laid down and adopted by this Court after a careful consideration of that case, and I see no good reason for departing from it. The general doctrine is well expressed in Insurance Co. v. Wilkinson, 13 Wall. 222, and Miller v. Insurance Co., 27 Iowa, 203:
“ Insurance companies who do business by agencies at a distance from their principal place of business are responsible for the acts of the agent within the general scope of the business intrusted to his care, and no limitations of his authority will be binding on parties with whom he deals which are not brought to. their knowledge.”
The court below on the trial proceeded upon the theory that notice to Mr.' Eadus or to Mr. Patton was notice to the company, and charged the jury that the defendant had a right to waive, the conditions of the policy, and that, by issuing the policy to Mr. Cook with this knowledge on the part of its agents, and receiving the premiums, it waived the conditions relating to intoxication. This was not a statement of the law applicable to this case as laid down in Cleaver v. Insurance Co., supra, and to which we must adhere.
It may be contended, however, that this statement from the court did. not prejudice the rights of the defendant, as the jury found specially upon questions presented by the defendant as follows:
“ Q. Was Bigelow T. Cook, the insured, under the influence of intoxication at the time he received the injury mentioned in plaintiff’s declaration?
“A. No.
“ Q. Was Bigelow T. Cook, the insured, under the influence of intoxicating drinks at the time he received the injury mentioned in plaintiff’s declaration?
“A. No.
“ Q. Did intoxicating liquors drank b.y Bigelow T. Cook during the day of his death in any manner cause him to be more liable to the accidental injury in question by falling than he would have been had he not drank such liquor?
“A. No.’’
In view of the written request to charge framed by plaintiff’s counsel, and given by the court, it is manifest that the charge as given by the court upon the question of waiver by the company of the conditions as to intoxication may have had its influence up'on the jury. The court was asked by the plaintiff’s'counsel to instruct, and did so instruct, them that if they found from the evidence that the death of Mr. Cook was effected through violent, external, and accidental means, and if they believed the testimony of Mr. Eadus, they should render a verdict in favor of plaintiff for the amount of the policy, and interest at 6 per cent, from July 24, 1889, to date; that is, the jury were told, in substance, that if they found that Eadus knew that Cook was in the habit of getting intoxicated, and communicated that fact to Patton, this was notice to and knowledge of the company, and if his death was effected by violent, external, and accidental means the plaintiff could recover. This left out one important element which it was necessary for the plaintiff to show in order to recover, for by the terms of the policy it is expressly stipulated that the insurance does not cover death nor injury resulting wholly or partly directly from intoxication. There was some evidence in the case that Mr. Cook had been in the habit of drinking, and, if the testimony of Eadus is true, to excess, for some time prior to his death. It was also shown that on the day of his death he had drank to some extent while at Grand Kapids, even as late as half past 2 in the afternoon. The court was in error in this part of the charge, and we think it may have had its influence upon the jury.
There are several other errors assigned, some of which we shall discuss, as the case must go back for retrial. The defendant sought to show that Cook was under the influence of liquor at the time of his injury, and, among other questions of similar import, asked the witness Jones, who drove him home on that night,—
“Were you impressed with the idea at that time that it was necessary for some one to go and drive him over on account of his condition?”
This was objected to as incompetent, and ruled out. This was error. The question was a -proper one in view of the issue being tried, and as a part of the cross-examination. This was the proof of a fact, and something more than mere opinion. A witness may state whether or not a person had the appearance of being intoxicated, and such statement of appearance would be the statement of a fact. Sanity, intoxication, and state of healthy or of the affections, are facts of this character. People v. Eastwood, 14 N. Y. 562; State v. Pike, 49 N. H. 407.
For the purpose of showing the condition of the deceased during the day and evening, defendant called as a witness Mr. Gunn, and asked him the following question:
“In your judgment was he in as good condition to take care of himself in walking and in avoiding danger from falls on a sidewalk, partly covered with ice and snow, as though he were sober?”
The following question was also asked of defendant’s witness Peterson:
“Was he drunk or sober that night at that timé?”
This was ruled out. These questions were admissible under the rule above laid down. In fact, this was one of the vital questions in the case. If his death was caused or affected by his intoxication, then, under the terms of the policy, no recovery could be had. That was one of the very things the company was guarding against by the insertion of these conditions in the policy. It was an error to exclude these inquiries.
Plaintiff was permitted, under objection, to read in full to the jury the proofs of death which the policy required the plaintiff to furnish. It was claimed by counsel that the only purpose in reading them was to show that they were received by the company, and when received, and also for the purpose of showing that the claim was received and declined on the same day. As a part of the proofs of death, there was an affidavit of an eye-witness, the physician’s statement, and certificate of the coroner. There was no contention on the part of the defendant but that the preliminary proofs had been furnished in full compliance with the terms of the policy, and it was error to allow them to be read in full in the presence of the jury. These were ex parte affidavits and ■statements, and they may have had their influence upon the jury, and have been taken by them as proof of the facts therein contained. There can be no doubt that had the proofs offered been contested by the defendant on the ground that they were not in full compliance with the requirements of the policy, as preliminary proofs of death, counsel would have had the right not only to jrat them in evidence, but to have read them to the court, but they were matters in .which the jury were in no way concerned. Whether they complied with the requirements of the policy was for the court, and not for the jury.
The judgment must be reversed, with costs, and new trial ordered.
The other Justices concurred. | [
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Champlin, C. J.
Schucker & Hopp were the owners of a stock of liquors, and gave Gustave Hine. a chattel mortgage thereon. Afterwards they obtained a policy of insurance ixpon the stock from the People’s Insurance Company, the loss, if any, payable to Hine, as his mortgage interest might appear. A fire occurred, which consumed the property insured. The plaintiffs had been the attoi’neys of Schucker & ‘Hopp in some litigation which they had before that time had, and the plaintiffs made out the proofs of loss. The insux-ance company denied liability, and Schucker & Hopp thereupon assigned their claim under the policy to Gustave Hine; and the plaintiffs then brought suit against the company in Hine’s name, and recovei’ed a judgment for $1,066. Hine after-wards settled with the company by discounting some $91, and received the balance of the judgment, and discharged it of record.
The settlement was made and the money received without the knowledge or consent of the plaintiffs, who soon thereafter presented to Hine their bill for services and for $14.75 for costs, which they had paid to the clerk of the court in the suit. Hine denied all liability to them, and refused payment. Plaintiffs brought suit before a justice of the peace, where the case was tried before a jury, who found for the defendant. Upon appeal to the circuit the cause was tried, and another verdict rendered for defendant. A new trial was granted, and under the instructions of the court the jury returned a verdict for the plaintiffs. Defendant assigns error upon the refusal of the court to charge as requested by the defendant and upon the charge as given.
Hpon the trial the plaintiffs introduced testimony which tended to prove that Mr. Hine employed them to bring the suit and perform the services sued for, and that he also employed Mr. Lyon, of the firm of Shepard & Lyon, to assist them in the preparation and trial. The defendant, Hine, introduced testimony tending to prove that he never employed plaintiffs to perform any services or bring any suit against the. insurance company for him, or in his name; that one of the plaintiffs met him on the street, and told him that suit had been commenced, and said to him: “Hine, you had better get Lyon to do the work in that insurance case;” and that he afterwards'employed Shepard & Lyon, and paid them for their services. He also introduced testimony tending to prove that Schucker & Hopp employed plaintiffs to commence suit in Hine’s name; that they were interested in the insurance, and in having the amount collected, as it would reduce their’ indebtedness to Hine that much.
There appears in the printed record what purports to be the defendant’s requests to charge, but they are not contained in the bill of exceptions, and it does not appear that they were called to the attention of the court, nor does the bill of exceptions show that any exception was taken to any refusal to charge as requested. These cannot, therefore, be considered.
The declaration was upon all the common counts in assumpsit before the justice, and the following bill of particulars was filed, viz.:
“Services in suit of G. Hine vs. The People’s Insurance Company of Pittsburgh..............$150 00
“ Costs paid Wm. Gaffney, county clerk, in Hine vs. People’s Insurance Co............................ 14 75
Total amount..................... ..........$164 75.”
The verdict rendered by the jury was for $164=.75, which appears to be the precise amount claimed.
The court instructed the jury as follows:
“There is no denial in the case that Lindner, Porter & Haliey were managing that insurance case, and there is no denial that Mr. Hine knew that they were-managing it. There is no pretense anywhere that he objected to their managing it; and he knew that the suit was commenced; that he had a suit in this court against the insurance company, in which Lindner, Porter & Haliey were his attorneys. It is denied that he ever employed them to do it so as to make himself liable to pay them their fees, but it is not denied that he knew they were doing it. Neither is it denied, but it is claimed on all hands, that Schucker & Hopp knew that they were doing it. Now, they were doing it rightfully. There is no pretense anywhere that they were doing it wrong, — that they were representing a name there which they had a right to represent. They were not doing a wrong to Mr. Hine, then, in managing that suit, and prosecuting it to completion. They were not doing any wrong to Mr. Hine. The suit went on to completion under their management, and judgment was rendered, and execution issued, — a judgment was rendered which produced the money, at any rate. Now, I say to you as a matter of law that as soon as that judgment was rendered, whoever might be the owner of the judgment, Hine or Schucker & Hopp, Lindner, Porter & Haliey had a lien upon it for the amount of their fees and disbursements in the case. It was money that they had a lien upon. I almost said a mortgage, but it is not technically a mortgage, but a lien on it, which entitles them to so much of that money as they are entitled to, so that whatever they were entitled to collect- from Schucker & Hopp or Hine they were entitled to take out of the money that was received upon that execution.”
He also instructed them that it was in evidence that Mr. Hine received the--money upon that judgment, and that in so doing he received money to which the plaintiffs were entitled, to an amount which the jury should find their services in procuring the judgment were reasonably worth, and the disbursements they had made, if any, for costs in the case, and that the jury must find a verdict for the plaintiffs for such amount. No objections were made to the introduction of testimony upon which the foregoing charge is based. It was admissible under the common counts in assumpsit, and, had objection been made, the bill of particulars could have been amended.
■There was no error in the instruction of the court. This action is not between the attorneys for the prevailing. party and the judgment debtor, and consequently the question of notice to such debtor does not arise in the case. The question is one between attorney and client. The undisputed fact that Mr. Hine received the money for which judgment was rendered, and discharged such judgment by indorsing a satisfaction thereof upon the execution, estops him from denying the authority of the attorneys in acting for him in procuring such judgment. If no original employment had been proved, this act would be a full and complete ratification of the acts and services performed by the attorneys in obtaining the judgment. He cannot take the money due by virtue of the judgment and deny the authority of the attorneys to procure such judgment for him. The relation is established by his own act.
The lien of the attorneys attaches to the fruits of the judgment. It attaches to the money payable to the client if it is the proceeds of the labor aud skill of the attorneys. It attaches also to moneys received by way of compromise by the client in the cause, for the money is regarded as the fruit of the attorneys* labor and skill. And if the client settles the case after judgment, so as to deprive the attorneys of their Costs and fees, the latter have an action against the former. 1 Amer. & Eng. Enc. Law, pp. 970, 971, and cases cited; Weeks v. Circuit Judges, 73 Mich. 256; Potter v. Hunt, 68 Id. 242; Kinney v. Tabor, 62 Id. 517. Had the money been paid to the plaintiffs, instead of to the defendant, they would, have had the right to retairi their costs and fees from it by virtue of'their lien; and when the defendant received the money upon the judgment, which had been obtained by their labor and professional services, he received money which in equity and good conscience belonged to the plaintiffs.
We think the circuit judge might also have instructed the jury that, the defendant having received and receipted for the money due upon the judgment, he was estopped to deny that the relation of attorney and client existed between himself and the plaintiffs; that by so doing he ratified their acts in bringing suit and prosecuting it in his name and for him, and was liable to pay for those services what they were reasonably worth.
The court further instructed the jury upon the question as to the services of Mr. Lyon as follows:
“How, it is claimed here upon one side that they did request the assistance of Mr. Lyon, and if that is true, and if that is correct, and it shows that there should be a rebate upon that account, that will make a difference in the amount that you will allow Lindner, Porter & Haffey for fees. But it is claimed, on the other hand, that Mr. Lindner never requested that Mr. Lyon should be brought in the case at all, but that he said he had confidence in the case, and did not need any help, and did not want it, but that Mr. Hine himself suggested putting Mr. Lyon in the case, and it was done on his motion. If that is true, then 'no rebate should be made.”
It may be inferred from the amount found by the jury in favor of the plaintiffs that they found the facts as testified to by plaintiff Lindner. There was no error in permitting the witness Lindner to testify’ in rebuttal.
The judgment must be affirmed.
The other Justices concurred.
His testimony was to the effect that plaintiffs did not consent to and had no knowledge of the settlement of the insurance matter,, and the payment of the money to defendant, Hiñe. ' | [
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] |
Per Curiam.
This is an application for a mandamus to compel the circuit judge of Ingham county to vacate an order, made in the case of William Hamilton v. James M. Turner, requiring the plaintiff—
“ To file an amended or more specific bill of particulars, therein showing how each item of plaintiff’s claim, as stated in the bill of particulars already filed, arose, with the date and amount of same, and how and by what right and when the plaintiff or his assignors became entitled, and how and when the plaintiff acquired such right; also at what time and in what way defendant became liable or indebted to the plaintiff or his assignors for the several items in said bill of particulars now filed in said cause.”
The order also gave leave to plaintiff to file an amended declaration, if he desired to do so. The declaration filed was upon the common counts in assumpsit, in which, in some of the counts, the plaintiff alleged an assignment to him of the interests held by two other persons in certain specified items.
The defendant demanded a bill of’particulars, which was furnished, consisting of five specified items, as follows:
“1. Two-thirds of whatever sum remained in defendant’s hands of the four hundred twelve thousand two hundred fifty dollars received by defendant on or about February, A. D. 1878, from William -H. Yanderbilt, for certain bonds and stock of the Chicago & Northeastern Railroad Company, after paying certain notes made or indorsed for the accommodation of William L. Bancroft by the defendant, Alexander McFarlane, lately deceased, William B. McOreery, and the plaintiff, or by any or either of them, for and on account of the construction of the said Chicago & Northeastern Railroad.
“2. Two-thirds of one hundred twenty-five thousand dollars received by the defendant from Russell Sage, of New York, on or about the fourth day of April, A. D. 1878, for two hundred and fifty bonds and seventeen hundred and fifty shares of the stock of said Chicago & Northeastern Railroad Company.
“3. Two-thirds of twenty-three thousand eight hundred twenty dollars received by the defendant from Mr. E. W. Meddaugh, and credited to defendant on a note held against him by Mr. Russell Sage, of New York, on or about November, A. T). 1878, for certain shares of stock of the Chicago & Northeastern" Railroad Company.
“4. Two-thirds of one hundred seventeen thousand dollars received by defendant by the hands of Mr. White-house, of New York, about January, A. D. 1884, "for one hundred seventeen bonds of the said Chicago & Northeastern Railroad Company.
“5. Two-thirds of sixty thousand dollars received by defendant for the following ‘receivers’ certificates,’ so called, issued pursuant to orders made by the circuit court of the United States for the Eastern District of Michigan, in equity, in a cause wherein the Union Trust Company, of New York, was complainant, and the Chicago & Lake Huron Railroad Company and others were defendants, to wit: Certificate No. 1, for twenty-five thousand dollars, and certificate No. 2, for one thousand ninety-seven and twenty one-hundredths dollars, both issued pursuant to an order made by said court on the twenty-second day of November, A. D. 1876, on account of the Eastern Division of said Chicago & Lake Huron Railroad; certificates numbers 4, 5, 6, and 10, for five thousand dollars each, and certificate No. 11, for five thousand eight hundred sixty-four and fifty one-hundredths dollars, issued pursuant to an order of said court made on the thirtieth day of October, A. D. 1876, as amended by a supplemental order made on the twenty-second day of November, A. D. 1876, and dated the thirteenth day of December, A. D. 1876, on account of the Western Division of said last-named railroad; and certificates numbers one and two, issued by an order of said court made on the twenty-fifth day of June, A. D. 1877, and dated the same day, for ten thousand dollars each, on account of said Western Division.
“The plaintiff claims .interest on the several moneys above claimed. The plaintiff claims to recover said moneys above specified, and interest thereon, in his own right.
“ The plaintiff also claims to recover other moneys, the description whereof is identical with those above specified, in his own right, and also as assignee of William B. McOreery, and interest thereon.”
In Cicotte v. County of Wayne, 44 Mich. 174, it was said that—
“The object of the practice for the production of bills of particulars is to obviate the uncertainty of general pleading. The intent is to secure such information as will enable the parties to make an intelligent preparation for trial, and to enter upon the investigation before the court or jury with an understanding as to what is really in controversy.”
If the specifications 'do not accord substantially with the facts, or omit essential matters, the other party can take advantage of this upon the trial. Matthews v. Hubbard, 47 N. Y. 428. In mentioning dates, it is not necessary that the exact date shall be given, but it may be stated as “on or about a certain day,” and in that case the plaintiff is not restricted to proof of that special day. The question to be determined at the trial in each case is whether the proof is so variant from the date alleged as to mislead the opposite party.
It is not required that the bill of particulars shall contain all the essential elements of a special declaration. It is neither given nor required for the purpose of disclosing to an adverse party the proof .relied on to substantiate the same; nor is it the office of such bill to furnish to defendant facts whereon to found an affirmative defense in his behalf. It need not state the grounds on which the plaintiff claims, but only the items and particulars. Seaman v. Low, 4 Bosw. 338; Fullerton v. Gaylord, 7 Rob. (N. Y ) 551; Higenbotam v. Green, 25 Hun, 214. If the rule were otherwise, a declaration upon the common counts would be practically abolished, for the defend ant could, by demanding a bill of particulars, compel tbe plaintiff, in effect, to file a special declaration.
By the practice of this Court, certain items are provable under the common counts, and upon demand a bill of particulars of such items must be furnished, which must be sufficiently specific and certain to apprise the defendant of what the demand is, and when the items accrued, and how it arose, and the amount claimed. The order in this case went much further than this. It required the plaintiff to state how and by what right and when the plaintiff or his assignors became entitled, and how and when the plaintiff acquired such right. This, in assumpsit, is mere matter of inducement, and is not absolutely necessary to be stated in pleading. 1 Chit. PI. 296. In these respects the order went beyond the requirements of a bill of particulars.
All the items in the bill of particulars are for money had and received, and are provable, if at all, under that count. It is not apparent how the statement of the right of the plaintiff to the items named, and when the plaintiff or his assignors became entitled to such right, or wheu and how they acquired such right, is essential to enable the defendant to prepare his defens,e. It is only necessary. in a declaration for a plaintiff to state his right or title in general terms. The evidence by which such right or title is to be established is not necessary to be stated in the pleading of the plaintiff.
We think that the second, third, fourth, and fifth items of the plaintiff's bill of particulars are sufficiently specific. They specify the amount of money had and received by the defendant, how the amounts arose, and the date, with sufficient certainty. They come within the ruling of this Court in Wright v. Dickinson, 67 Mich. 580. The first item does not come within our previous rulings. It is too uncertain and indefinite in the amount claimed, and should be amended or made more specific in this respect.
The order complained of must be vacated” as to items numbered 2, 3, 4, and 5, and modified as to item No. 1, so as to ’ require a more specific bill as to this item, stating the amount claimed. ’ - | [
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Grant, J.
This is an action of replevin for 250,000 feet of piece stuff lumber, alleged in the declaration to be of the value of $5,000. The defendant was the collecting officer of the village of North Muskegon, and by virtue of .the tax warrant had levied upon this property to collect the tax assessed against the plaintiff for the year 1889. Upon its seizure the plaintiff brought this suit, and obtained possession of the property. Upon the trial the following stipulation was filed:
“ 1. That plaintiff was the owner of the property described in the declaration in this cause at the time it was seized by the defendant, and at the time this suit was brought, subject to any legal lien which it may be found the defendant had upon it, if any.
“ 2. The plaintiff was, on the second Monday in April, 1889, the owner of the personal property sought to be assessed for taxes by the assessor of the village of North Muskegon upon the assessment roll of said village that year, and that said personal property was subject to assessment by said village for taxes of said village for that year.
“B. That defendant had possession of the property described in plaintiff’s declaration on the 2d day of October, 1890, and, had such possession when this suit was commenced, and that such possession waB unlawful unless he can justify such possession.”
The plaintiff thereupon rested his case. The defendant then introduced in evidence the assessment roll, which showed that plaintiff was assessed on personal property, valued at $80,000, as follows: General tax, $1,000; highway tax, $100; interest and sinking fund, $240, — making a total of $1,340. To this roll was attached the certificate of the board of review, certifying that—
“The foregoing is the assessment roll of said village for the year 1889, and that the said roll was revised, corrected, and approved by us May 9 and 10, 1889.”
To it also was attached the certificate of the president and clerk of the village, certifying that the roll had been duly examined and approved by the village council at a regular meeting, and that the assessor was ordered and directed. to assess the taxes for the current year on the real and personal property as follows, to wit: One and one-quarter of 1 per cent, for general purposes; one-eighth of 1 per cent, for highway and street "’purposes; one dollar for poll-tax; three mills on each dollar for interest and sinking fund; and also certain sums against certain persons and descriptions of property for certain special assessments. To it was also attached the certificate of the assessor in the usual form, and certifying that the total amount of the taxes assessed upon said roll was as follows: For general purposes, $7,577.04; highway taxes, $756.95; interest and sinking fund, $1,818.55; poll-tax, $469; repairing sidewalks $49.71, — total tax assessed, $10,671.25. There was also attached in proper form the president’s warrant to the defendant for the collection of the tax.
The plaintiff offered in evidence the resolution of the village council which corresponds to the certificate of the president and clerk above given, which was the .only resolution passed for raising taxes that year. The records of the council do not contain any proof of the posting of notices of the meeting of the board of review of that year. On cross-examination by defendant’s counsel, the clerk of the village, who was assessor in 1889, testified that, upon the completion of the roll, he posted the notices of such meeting in the requisite number of public places, but there was no evidence showing the exact time when they were posted.
How. Stat. §§ 2923-2925, authorize the common council of any village to raise by general tax upon all the real and personal property sums not exceeding a certain rate per cent, for general expenses, for highway and street purposes, and a poll-tax. None of the amounts raised exceeded the percentage authorized by law, but it is insisted that the common council should have specified in the resolution the exact amount raised for each fund. This point is expressly ruled by Fay v. Wood, 65 Mich. 390, wherein a designation of the amount by a fixed percentage was sustained.
It is next insisted that the assessment roll was void, because there is no evidence showing the length of time the notices of the meeting of the board of review were posted before the day of meeting. The law requires them to be posted not less than five days before the day of meeting. There was no record evidence of the posting of these notices. How. Stat. § 2930. There is no provision of the statute requiring the evidence of the posting of these notices to be recorded. The tax roll was legal upon its face, and it was therefore the duty of the plaintiff to show that these notices were not posted. He did not complete his defense on this point by showing that such proof was not entered upon the records Act No. 195, Laws of 1889, § 85 (3 How. Stat. § 1170i4), provides:
“No tax * * * shall be held invalid on account of any irregularity in any assessment, or on account of any assessment or tax roll not having been made or proceeding had within the time required by law, * * * or on account of any other irregularity, informality, or omission, or want of any matter of form or substance in any proceeding, that does not prejudice the rights of the person whose property is taxed.”
Plaintiff does not show or claim that he was injured or prejudiced. He does not claim that he did not know of the time fixed for the meeting. His objection is technical, without merit, and cannot be sustained. But the tax roll was valid upon its face, and therefore replevin will not lie. Hill v. Wright, 49 Mich. 229; Hood v. Judkins, 61 Id. 575.
The judge directed a verdict for the amount of the tax, viz., $1,471.77. Plaintiff now. insists that there was no evidence of the value of the property seized, and that therefore the judgment cannot be sustained, as the property may not have been worth the amount of the tax. This point does not appear to have been raised in the court below. We think the fair inference from the record to be that the case was tried upon the understanding that the property was worth more than the amount of the tax, and that, if verdict and judgment went for the defendant, they should be for the amount involved.
We find no error upon the record, and judgment is affirmed, with costs.
The other Justices concurred. | [
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Cahill, J.
This case was before this Court at the April term, 1889, and is reported in 74 Mich. 664. At that time the only question raised was as to whether the plaintiff, as the holder of a note made by one of two partners in the partnership name, could maintain an action at law upon such note. None of‘the questions raised upon this record were then involved.
The plaintiff claims to have purchased in good faith, but after maturity, a note of John Greenop & Co., payable to the order of Robert A. Lavery, and indorsed by Lavery. Lavery was a member of the firm of John Greenop & Co., and made the note. The note was dated January 21, 1883, payable in six months. It was trans ferred to plaintiff in August, 1884, while the firm of Greenop & Co. was still in business, and this suit was commenced in February, 1S87. Defendant John Greenop pleaded the general issue, and, with his plea, filed an affidavit denying the execution of the note. Defendant Lavery made no defense, but was sworn in the case as a witness for plaintiff. On the trial before the court and a jury, the plaintiff had judgment, and defendant Greenop brings error.
A large number of errors are assigned, not all of which are insisted upon here. It was the theory of the plaintiff that the note in suit was given for money loaned by Lavery to the firm on January 22, 1883. The note bears date January 21, which was Sunday, but Lavery testified that the note was made on Monday, and, if it was dated the 21st, it was a clerical error. He also testified that this money was loaned to the firm with the consent of Mr. Greenop. It was the theory of the defense that no money was loaned to the firm of Greenop & Co. by Lavery; that the note was in fact a fraud upon Mr. Greenop, and that the plaintiff conspired with Lavery to procure the execution of this note, in order to protect himself against some indorsements that he had made for Lavery; that the plaintiff was not a bona fide holder of the note as against Greenop. As bearing upon this theory of the defense, plaintiff was asked on cross-examination the following question:
“ Q. Did you ever ask Mr. Greenop for this money?
“Mr. Qliddm. That is objected to as not cross-examination.”
The objection was sustained. Upon this ruling is based defendant’s second assignment of error. There was that appearing on the cross-examination of the plaintiff himself which gave color to the defendant’s claim that plaint iff was not a bona fide holder of this note, and that, for some reason best known to himself, he had neglected to call the attention of Mr. Greenop to it for several years after he claims to have bought it. If he had called Mr.. Groenop’s attention to it as soon as he obtained it, it being then long past due (the firm of Greenop & Co. had not at that time been dissolved), it would have been possible, perhaps, for Mr. Greenop to have protected himself in his final settlement with Lavery upon a dissolution. It appears that, a few days after plaintiff claims to have bought this note, he paid Mr. Greenop $880.59 in money, and, in October following, paid him $670.86 in money, and transferred to him $1,000 in bank-stock, in payment of a debt. During this time he claims to have held this note. As bearing upon the question of whether he did in fact hold this note, and upon the further question of whether it was a bona fide note, and believed by him to be such, it was competent to ask him whether he ever asked Mr. Greenop for the money. Whether he did or not would have been an important fact for the jury to consider,, in passing upon the truth of his evidence, as to the manner in which he became the purchaser of it.
As bearing, upon this same point, the twenty-fourth assignment of error must be sustained. The court charged the jury as follows:
“The fact that Mr. Carpenter bought this note is a conceded fact; no matter whether he paid more -or less for it."
If by this the learned circuit judge meant to say that it was a conceded fact that Lavery transferred this note to Carpenter, his language would not have been objectionable; but if he intended to say to the jury that it was a-conceded'fact that Carpenter bought the note in the sense of being a good-faith purchaser, without any knowledge of or participation in any fraud that may have been perpetrated by Lavery upon Greenop in making the note, that fact was not conceded, and it is only in that sense that it was material to speak of Carpenter as having bought the note at all. It is true that defendant Greenop was allowed to make any defense to the note which he could have made if it had remained in the hands of Lavery, and the jury were instructed that the plaintiff could not recover unless they were satisfied that the note was a valid one at its inception. Yet we think, under the claim made by defendant, any testimony that tended to show bad faith in the plaintiff tended also legitimately to taint the transaction from the beginning, and to support the theory of the defense that the making of the note was in the first instance without consideration, and a fraud upon Mr. Greenop.
The conduct of the plaintiff in holding this note for the length of time he claims to have held it, the payment to Mr. Greenop of the considerable amount of money that he admits paying him, and the transferring to him of valuable securities, is hardly consistent ydth his statement that he at that time held his note long past due. He makes no explanation of this, and, when asked whether he ever said- anything to Mr. Greenop about the note, his counsel objected, and the testimony was excluded.
It will not be necessary to refer in detail to the other assignments of error relied on. It is sufficient to say generally that the other assignments of error are overruled.
For the errors pointed out, the judgment must be reversed, and a new trial granted.
Champlin, C. J., and Long, J., concurred. Morse and Grant, JJ., did not sit.
The firm was dissolved September 1, 1884. | [
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] |
Ohamplin, O. J.
This is an action upon a policy of insurance.
On May 19, 1888, the Prescott Insurance Company, through Howard W. Sterling, who, at that time, was its agent at Detroit, issued to Margaret Hoose its policy of insurance, covering $1,000 on building corner of Milwaukee avenue and Beaubien street, in Detroit, $1,500 on a stock of groceries, provisions, cigars, etc., contained in said building, and $500 on store furniture, fixtures, counters, shelves, show-cases, and scales; the policy running one year. A fire occurred on March 20, 1889, by which the building was destroyed, together with certain personal property.-
On February 19, 1886, Margaret Hoose. by deed conveyed the building described in the policy sued on, together with the lot on which it stood, to her son-in-law, George W. Morgan, to secure, as Morgan testifies, $2,000 which he loaned “to the family;” and, at the time it was given, he gave back to Margaret Hoose a land contract, which provided that he was to convey the property back when Margaret Hoose paid him $2,000, with interest at 7 per cent. On July 24, 1888, at Margaret Hoose',s request, Morgan testifies that he destroyed the contract he gave Margaret Hoose, and made another contract of the same kind to Maggie Hoose (her daughter). This contract was never acknowledged or recorded, and, it is claimed, was destroyed in the fire. On the same day, July 24, 1888, Margaret Hoose, with the consent of the defendant company, assigned her interest in the policy of insurance to Maggie Hoose. The witness Morgan testifies that there was no time fixed in the contract when the $2,000, with interest, was to he paid him; that Maggie Hoose gave him no notes, and that she could pay it when she got ready, in 20, 30, or 40 years; that no interest had been paid him; and that, in addition to the $2,000 and interest, the property was incumbered by a mortgage given by Margaret Hoose of $1,200; and that after he gave this contract to Maggie, and in November, 1888, he, together with his wife, gave a further mortgage upon the property, with the knowledge and consent of Maggie Hoose, for $300. This money was for the benefit of her brother Alfred Hoose, who was her general agent in the transaction of her business; and Maggie Hoose upon the stand does not deny that she had knowledge and gave consent to the mortgage, but says she does not remember it. It was, however, a disputed question of fact upon the trial of the case whether Maggie Hoose had knowledge or consented to be execution of the mortgage by her brother-in-law, Morgan, for the $300 raised for the benefit of her brother, so that she became obligated to pay the $300, and upon that point the evidence was submitted to the jury by the court in his charge, in which he stated to them as follows:
“Now, there is one other question on which a defense has been made, and it goes to this section of the policy: fIf any change takes place in the title, interest, location, or possession of the property/ then, and in that event, fthe entire policy, and every part thereof, shall become void, unless consent in writing is indorsed by the company hereon, in each of the following instances;' — in such instance, whether after the assignment a mortgage was given for some $300, and the company asserts that that is a change in the title, and. the interest of Maggie Hoose, which would avoid the policy. Well, gentlemen of the jury, I think that in the construction of this policy there must be a change in the actual title of Maggie Hoose, and that a mere change — and that the title, by George W. Morgan giving a mortgage — unless the title of Maggie Hoose was affected thereby would not be-a breach of that condition of the policy so as to forfeit the benefit which the plaintiff would otherwise be entitled to. I do not think there can be a forfeiture of the policy upon that ground, unless the title of- Maggie Hoose has been affected by that three hundred dollar mortgage. The mere fact that George W. Morgan gave a mortgage would not forfeit the policy, unless it was agreed between the parties that it should affect the contract interest of Maggie Hoose. Now, you have heard the testimony upon that point, and I say to you now, if you find that the contract interest of Maggie Hoose was affected, that is, that under the circumstances of the case she became obligated to pay that, by agreement between the parties themselves, then that, gentlemen of the jury, would constitute a forfeiture of this policy; but if it was merely the obligation of George W. Morgan, and if she herself was not obligated in any way there as between George W. Morgan and herself to pay that mortgage which he’ had put upon the property, why then, gentlemen of the jury, her interest would not be affected, and she would be entitled to recover, unless there is some other breach of the conditions of the policy."
At the time of the fire, George W. Morgan held a policy of insurance on the building, as owner, in the Cooper Insurance Company of $1,000; and Margaret Hoose held a policy in the Pacific Insurance Company, on the furniture, of $1,500; and Maggie Hoose held this policy in the Prescott Insurance Company, on the same building, as owner, of $1,000, and the contents, $2,000. The policy sued upon contained near the close of the instrument the following stipulation:
“This policy is made and accepted upon the above express conditions, no part whereof can be waived, except in writing signed by the secretary.”
Under the pleadings, the insurance company, upon the trial below, denied appellee’s right to recover because she was not the sole and unconditional owner of the property, and she did not own the ground upon which the insured building stood in fee-simple; and also because of false statements in the proofs of loss furnished, as required by the policy; and, further, by the amendment made at the trial, because the,re had been a change of the policyholder’s interest after the issuing of the policy, without the knowledge and consent of the company, and without having such change indorsed upon the policy.
As to the first point of defense, the plaintiff claims that there is a liability because the defendant, through its agent, had notice at or prior to the issuing of the policy of the true state of the title. This claim is based upon the testimony of Mr. Brasell Hoose, who testified that he told Smalley & Sterling, in May, 1887, — one year before the policy in the suit was written, — who were then the agents of the Prescott Insurance Company, upon the occasion of their being applied to to issue a policy upon the property, of the situation of the title. He says that Smalley and Sterling both looked over the property, the house, stock, and everything, and were perfectly satisfied to take it.
“ Q. What, if any conversation was had between them and Alfred Hoose, or yourself, or any of the persons there in the family, about the title ?
“A. I told them that there was a mortgage on the property at the Mechanics’ Bank of $1,200. We also told him that there was a deed running to George W. Morgan for $2,000 on the property, — money we had borrowed to put in the building, — and then there was a title going back to my wife with that for two thousand more.”
It may be stated that Smalley & Sterling, the agents of the Prescott Insurance Company at that time, who issued the policy to Margaret Iloose, was a firm composed Mr. Smalley and Howard W. Sterling; that this firm dissolved shortly after the policy was issued in 1887, and Howard W. Sterling continued for a time further as agent of the defendant, and when the present policy in suit was issued, namely, on May 19, 1888, the agent of the company was Howard W. Sterling, who was formerly one of the members of the firm. It was also a disputed fact upon the trial as to whether or not the agent of the defendant, at the time he insured the property, had been informed of the true state of the title, and at the plaintiff’s request a special question was addressed to the jury, and answered by them as follows:
“ Q. Did II. W. Sterling! the agent of the defendant, know, at the time the policy in this suit was issued, the condition of the title to the real estate on which the building mentioned in said policy stood, and of the mortgage thereon to the Mechanics’ Bank of Detroit for the sum of twelve hundred (1,200) dollars?
“A. Yes.”
The plaintiff insists that, under the facts and circumstances surrounding the making of the contract, and the fact that the agent was cognizant of the real situation of the title, the defense set up by the insurance company that the policy is void because the true state of the title is not indorsed thereon'in writing ought not to prevail.
The defendant claims that the provisions of the policy referred to constitute a warranty, and that, if untrue, the policy is void; and the construction it places upon this instrument is that because the réal interest of the party insured was not indorsed in' writing upon the policy, and because it was not stated that she.was not the sole and unconditional owner of the building, and because it was not stated or indorsed upon the policy that the building stood on ground not owned in fee-simple by the assured, and because it was not indorsed on the policy that the assured was the equitable owner by virtue of a land contract to purchase, and because after the $300 mortgage was given by Morgan, it was not likewise indorsed upon the policy, each and every part of* the policy is void, and of no- effect.
It is therefore necessary for us to place a construction upon the policy before us. And, in construing warranties contained in policies of insurance, it may be asserted that the prime object to be reached is the intention of the parties, and, if that can be found, such intention must control. The rules in the interpretation of such warranties are the same as those which apply to the interpretation of other mercantile contracts. All written instruments, where the provisions are clear and unambiguous, are entitled to a literal interpretation, and wherever in a policy of insurance there is a clear breach of the warranty contained therein, however immaterial it may be, the policy will be avoided. It may be said that the warranties contained in the policy are somewhat different from representations made, in this: That while
a representation may be satisfied with a substantial, or even an equitable, compliance, a warranty requires a strict and literal fulfillment. As it is stated by Mr. Arnould on Marine Insurance:
“Whatever the warranty avers must be literally true, and what it promises must be actually performed.”
The reasons for such literal construction appear to be that insurance is granted on the faith of the accuracy of the statements made by the assured, the information concerning which is generally, and often exclusively, within the knowledge of the assured; and it is only just to the insurer, when he asks for positive and accurate information, that it should be given him. It is in reliance upon the facts given that the contract of. insurance is made, and the purpose of requiring a warranty is to dispense with inquiiy, and cast upon the insured the obligation that the facts shall be as he represents them. Insurance Co. v. Huntzinger, 98 Penn. St. 41.
But we must look at the situation of the parties, the condition of the thing insured, and what was said or done at the time the insurance was effected, in order to arrive at the intention of the parties, which, as before stated, must control in the construction of the warranties contained in the instrument. If the representations are in writing, that is the evidence of what they are. If no application is made in writing, and -no statements contained in any written application for insurance as to the risk and the subject-matter of it, then oral proof of such facts may be introduced. In' the case under consideration, there was no written application required or given; the application was verbal, and representations, if any were made, were verbal. We have then here the case of a verbal application, and, under the findings of the jury, a true statement of the condition of the title, made by the assured to the defendant through its agent; and after-wards, with the knowledge of that title, the policy in suit issued, in the form and language sued upon, and delivered to and accepted by the plaintiff, or the plaintiff's assignor. It became a binding contract between the parties only from the time of delivery and acceptance, which occurred at the date of the policy, May 19, 1888.
In view of the claims now set up by the defendant with reference to the terms of the warranties contained in that instrument, it will be necessary to restate a little more minutely what it contains. In the first place, in consideration of the premium given, and so far, as it affects the real-estate interest, the Prescott Insurance ■Company, of Boston, Mass.,—
“ Insure Mrs. Margaret Hoose to the amount of * * * one thousand dollars on the two-story frame building, occupied as a grocery store and dwelling, situated on the north-west corner of Milwaukee and Beaubien street, Detroit, Mich., * * * against all such immediate loss or damage sustained by the assured as may occur by fire to the property above specified, but not exceeding the interest of the assured in the property.”
The policy upon its face does not contain any other or more minute description of the building insured than that above given. It does hot state whether Mrs. Hoose is the owner of the property insured, or whether she holds any other interest in it than the fee-simple. It merely insured the specified property .for $1,000 against loss or damage sustained by fire, but not exceeding the interest of the assured in the property, without stating what such interest was. That Mrs. Hoose had an insurable interest in the building at that time is not disputed. Now, in the policy, next after the insuring clause, follows what is stated to be “warranty of the assured,” as follows:
“The assured, by the acceptance of this policy, hereby warrants that any application, survey,- plan, statement, or description connected with procuring this insurance, or contained in or referred to in this policy, is true, and shall be a part of this policy; that the assured has not overvalued the property herein described, nor omitted to state to this company any information material to the risk; and this company shall not be bound under this policy by any act of or statement made to or by any agent, or other person, which is not contained in this policy, or in any written paper above mentioned.
“It is also a'part of this warranty that, if this policy-shall be continued by renewal, it shall be considered as continued under the original representations; and that any change in the risk, not made known to this company at the time it is so continued, shall render this policy void.
“This entire policy, and every part thereof, shall become void'unless consent in writing is indorsed by the company hereon in each of the folloAving instances, viz.:
“If the assured is not the sole and unconditional owner of the property; or if any building intended to be insured stands on ground not owned in fee-simple by the assured;,or if the interest of the assured in the property, whether as owner, trustee, consignee, factor, agent, mortgagee, lessee, or otherwise, is not truly stated in this policy; or if any change take place in the title, interest, location, or possession of the property (except in case of succession by reason of the death of the assured), whether by sale, transfer, or conveyance, in whole or in part, or by legal process or judicial decree; or if the title or possession be now, or hereafter become, involved in litigation; or if this policy be assigned or transferred before a loss.”
Now, the first important provision contained in the warranty is that any application or statement connected with procuring this insurance is true, and shall be a part of the policy. This provision makes the oral application and statement, made at the time the policy was applied for to the agent of the defendant, a part of the contract, and the finding of the jury in the case is conclusive upon the defendant that its agent was informed of the condition of the title to the real estate on which the building mentioned in the said policy stood, and of the mortgage thereon. The statement that the assured has not overvalued the property described does not apply to this policy, for it is not a valued policy; and nothing is claimed under the clause that the assured omitted to state to this company any information material to the risk, except as to the condition of the title to the real estate. The further provision is not a warranty, namely:
“This company shall not be bound under this policy by any act of or statement made to or by any agent, or other person, which is not contained in this policy, or in any written paper above mentioned.”
Nor under the circumstances in which this policy was made and delivered can it have any binding effect at all upon the assured, except as to statements and acts of agents and others after the delivery and acceptance of the policy, and this for the reason that the company is bound by verbal statements made to its agent upon which it issues insurance and- receives the pay therefor. And it cannot, in the instrument by which it agrees to insure, repudiate the authority of the agent, or repudiate responsibility for his acts, as such.
But the defendant relies upon the further provision contained under this head to the effect that “this entire policy, and every part thereof, shall become void unless consent in writing is indorsed by the company hereon in each of the following instances,” namely:
1. If the assured is not the sole and unconditional owner of the property.
2. If any building intended to be insured stands on ground not owned in-fee-simple by the assured.
3. If the interest of the assured in the property, whether as owner or otherwise, is not truly stated in the policy.
4. If any change take place in the title, interest, location, or possession of the property, by sale, transfer, or conveyance, in whole or in part.
In construing this portion of the policy, the whole must be taken together. Now, the object sought to be accomplished by the person applying for insurance was to. obtain indemnity against loss by fire of her interest in the building. If the insurance company which made out this policy upon the verbal application to its agent had desired to know what interest it was it was insuring, it should have stated it in that part of the policy pertaining to the risk. It was the intention of these parties to issue a valid and binding contract of insurance, valid and binding from the time of acceptance of the same by the assured, not that after it had been accepted by the assured then the assured should apply to the company and obtain its consent in writing indorsed on the policy, stating that the assured was not the sole and unconditional owner of the property, or stating that the building intended to be insured stood on ground not owned in fee-simple by the assured, or stating by indorsement on the policy the interest which the assured had in the property covered by the insurance; and yet the language of this part of the policy is that the entire policy, and every part thereof, shall become void, that is, void in the future, unless such consent in writing is indorsed by the company thereon. To give any reasonable force and effect to this clause of the policy, it can only be held to apply to such changes as arise after the policy has been delivered and accepted, in the ownership of the property, or, if a building stood upon leased ground, the ownership of the building, and it does not apply to an existing state or condition' of the property at the time the policy was issued. It looks to the future for protection of the insurer, and not to the present, only in so far as the preceding portion of the policy is violated by a misstatement or concealment of any fact material to the risk. Construing this portion of the policy with the testimony in the case, and with the fact that the company issued the policy to Mrs. Hoose, without stating in the policy what her interest was, but insuring the building against loss by fire to an amount not exceeding the interest of the assured in the property, we think that it must be held that the defendant understood the condition of the title, and intended to insure whatever interest Mrs. Iloose had which was insurable, not exceeding the amount named in the poiicy. We do not think that it would carry out the intention of the parties, or be a fair and just construction of this instrument, to hold that when it was issued and accepted by the assured, and the premium paid, it was void from that moment because it did not contain the indorsements required above.
The notice of defense interposed under the plea of the general issue does not rely upon any total failure to furnish proofs of loss as required by the policy, but the tenth clause under such notice sets forth that affidavit was made in support of her claim for loss and damage, and sets up that such affidavit was false, and specifies wherein it was so. The counsel for defendant now contend that there was no testimony introduced below showing that proofs of loss had been furnished, or that the condition of the policy in this respect had been waived, and insist that this should reverse the case. There is no exception in the record upon which this contention can be sustained. There were requests to charge made by defendant, but none of them refer to this point, and there are no assignments of error specifying this as a cause for reversal. It is claimed, however, to be covered by the request made by the defendant asking the court to instruct the jury that, under the law and the evidence in this case, the plaintiff cannot recover. If it was intended by this request to raise the question that the plaintiff could not recover for the reason that no proofs of loss had been furnished, the defect in the evidence should have been pointed out in the reqitest. It is entirely too general to cover a defect of proof at the trial which if it had been mentioned could have been supplied if it had been overlooked. It is claimed by counsel for plaintiff that the point was not raised in the court below. We find no mention .of it in the charge, and the court seems to have passed specifically upon each breach of the contract relied upon by defendant.
With regard to the change of interest by the mortgage of $300, executed by Morgan, we think the question raised was fully covered by the instructions of the court to the jury in his charge above quoted.
We have examined all the errors assigned; those most relied upon have been mentioned. We find no errors in the others which call for a reversal of the judgment, and it is affirmed.
The other Justices concurred. | [
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McG-rath, J.
This is an action of trespass for assault, and battery. The parties met in the evening, at a writing school, and had some words. On the way home plaintiff continued to use harsh language towards defendant, and as the parties neared defendant's home an altercation took place in which the plaintiff was beaten, bruised, and seriously injured. As usual, in this class of cases, the testimony was conflicting, each party insisting that the other ivas the aggressor, and defendant claiming that he was acting in self-defense, and called to his assistance his two sons.
Upon ‘the trial plaintiff was asked, upon cross-examination, if he had not at the school-house, and on the way home, used abusive, insulting, and profane language towards defendant, and he replied that he had. On redirect examination plaintiff’s counsel asked him to state just wha't language was used, and under defendant’s objection the witness was allowed to give the language. The admission of this testimony is alleged as error. We think that .its admission was not only proper, but that it was not prejudicial to defendant’s case, as its only possible effect was to show provocation, and thus reduce the verdict.
Defendant, on cross-examination, was asked, under objection, if he had not stated, at a given time and place, to one King that he ■ (defendant) meant to have killed plaintiff, and if he had it to do over again he would, and replied that he had not. The object of the question as stated by plaintiff’s counsel was to prepare the way for impeaching the witness, and for that purpose it was clearly admissible.
The defendant claims further that the court erred in his charge to the 'jury in stating the rule governing the force that may be used in repelling an attack. The court charged the jury very fully and particularly upon this question, and although there may be sentences which without the context might seem to be erroneous, yet as ■a whole the charge states the correct rule of law. The ■court said:
“In defending himself against an unlawful attack of another, a man is justified in resorting to such violence .and the use of such force as the particular circumstances of the case may require for his protection. Now, the degree of force to be employed in protecting one’s person must be in proportion to the attack made, and must ^depend upon the circumstances in each particular case, and the imminence of the danger as it appears to him jat the time. The only purpose which justifies the employment of force against the assault is to defend one’s self; that is the object to be attained, and a man is only justified in using such an amount of force as may appear to ■Mm at the time to be necessary to accomplish that purpose. As soon as that object is attained, it is his duty to desist. * * * If he uses a kind of force towards his assailant in excess or out of proportion to what 'may be necessary to his own defense, as it honestly ¡appeared to him at the time, he is himself guilty of an ¡assault.
“ It is proper for you also to consider, if you find that the plaintiff made the first attack, that the defendant, Cole, being required to act at once, in the excitement and heat of an affray, could not be expected to exercise •that nice discretion and accurate judgment which a jury by a careful sifting of the testimony of all the witnesses, aided by the arguments of counsel and the charge of the court, would be able to do; and therefore his conclusion, though he acted honestly and in good faith, might not be perfectly correct and just. Therefore this is the law, that if the defendant did use more force than is actually necessary for self-protection, if you find that he sincerely believed at the time that he was using only so much force as was necessary for his own defense, and if you also find that he acted honestly and in good faith in coming to that conclusion, and if you find also from the evidence that such a belief was a reasonable belief on his part, under the circumstances that surrounded him at the .time, and as ■ the situation appeared to him, — then he would not be guilty of an assault by reason of the use ■of such excessive force. * * * The defendant .would be justified in resorting to such reasonable force as to him seemed to be necessary in the honest exercise of his judgment to protect himself from the injury which he fully believed the plaintiff was about to inflict upon him. * * * If you find such appearances justified that belief, and Mr. Cole’s judgment was honestly exercised in coming to that conclusion, he would then have a right to at once repel or prevent the actual assault, using such force, and such alone, as was reasonably necessary, or appeared to him as reasonably ,necessary, attire time to protect himself.
“ In the defendant’s sixth request, gentlemen, I am asked to say to you that the defendant was the best-judge of what was necessary to defend himself against-Kent’s attack and all the means to be used for his own protection. As a technical legal proposition that is undoubtedly correct, and it is true not only as a matter of law, but as a matter of common sense, that the party attacked is obliged, in the very nature of the case, to exercise his best judgment at the time as to what shall be done in his own defense, and his judgment is the one which, if honestly exercised, is to a large extent controlling. It would be absolutely controlling unless the jury should find that his exercise of it at the time and under the circumstances was such an exercise as was unreasonable undqr all the evidence in the case.”
In other words, it'must appear to the jury that the party using force to repel an attack acted honestly, and the jury, in determining whether he acted honestly, are to consider the reasonableness of .the means made úse of.
There is no error in' the record, and the judgment below is affirmed, with costs of both courts.
The other Justices concurred.
Counsel cited People v. Doe, 1 Mich. 451; Hurd v. People, 25 Id. 405; Burden v. People, 26 Id. 162: People v. Lilly, 38 Id. 270; Brownell v. People, Id. 732; Galbraith v. Fleming, 60 Id. 403; and upon the question of excessive force when the assailant continues the contest, People v. Pearl, 76 Id. 207; Smith v. Simon, 69 Id. 481. | [
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Long, J.
This bill is filed for an accounting on a certain note and mortgage given by the complainant, and that the interest may be computed at the rate of 8 per cent., and that, upon such accounting and payment, the mortgage lien may be discharged.. The note and mortgage were given April 13, 1815, drawing interest at 10 per cent., due in one year. Certain payments are conceded to have been made. The controversy arises over the amount due on the note and mortgage, the rate of interest at which it is to be computed, and a claimed tender of the amount due.
We shall discuss but a single point. The bill was filed August 2, 1888. The premises were advertised for sale under a statutory foreclosure, the sale to take place on August 4, 1888. On that date, and before, the sale, the complainant, by his attorney, tendered to the defendant, mortgagee, the amount which complainant claimed was the full amount due to that date. The defendant received the money, put it in his pocket, and then declared that, he would not receive it in full discharge of the mortgage,-but would indorse it as a partial payment. To this complainant’s attorney objected; but the money was retained by the defendant, indorsed on the mortgage, and he proceeded 'with the sale, bidding in the premises at $88.65, taking a sheriff’s deed. On the hearing in the court below the complainant’s bill was dismissed.. We •need not set out the testimony here, but from the testimony returned we are satisfied that the complainant tendered the money in full satisfaction of the mortgage, interest, and costs, and that it was so understood by the parties at the time it -was accepted by the defendant. The defendant had no right thereafter to treat it as a partial payment, and proceed with his foreclosure sale. The sale so made would be treated as absolutely void, as the payment operated as a satisfaction and discharge of the mortgage.
The difficulty of the complainant’s' case, however, is that this tender of payment and acceptance of the money took place after the bill was filed. It is no part of the case made by the bill, though shown by the proofs. It is also claimed by the defendant’s counsel on the argument here that these facts might have beeu rebutted if they had been made issues by the pleadings. There is some forcé in this position. If these were matters which might be disposed of by an amendment of the bill, we should feel disposed to treat the bill as amended, and decree the lien of the mortgage discharged by the acceptance of the tender, and also that the deed given on the sale be set aside. But these subsequent transactions, by which the mortgage lien became discharged, could only have been met by a new bill, or a bill supplemental to the present. To dismiss the bill now, after the time of redemption has expired, would be most inequitable. We shall therefore reverse the decree of the court below, and remand the case. The complainant may have leave to file a supplemental bill in the court below setting out these subsequent transactions, the proofs already taken to stand as proofs in the case, with leave to the parties to put in such other proofs relating to the issue thus made as they may deem best. The complainant will recover costs of this Court.
The other Justices concurred. | [
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Morse, J.
In the first case above, the relator moved this Court as soon as possible. His application for mandamus shows that on September 4, 1890, he was nominated by the Democratic county convention for the county of Kent for the office of circuit judge to fill- a vacancy, and that on September 23, 1890, 25 electors of said county requested the Secretary of State, Gilbert R. Osmun, to give the requisite statutory notice of an election to be held on November 4, 1890, to fill said vacancy in the office of circuit judge. The Supreme Court was in vacation' in the month of September, and at the first opening of the Court, October 7, 1890, the relator presented his petition, and an order to show cause was granted. This could not be heard until October 14, 1890, at which time, for reasons stated in People v. Burch, ante, 408, we decided to hold the decision of the motion until the hearing in People v. Burch, which was then pending in this Court. Under the opinion filed in that case, the relator was clearly entitled to his writ, and it was the duty of the Secretary of State to have given notice of the election as requested. But, under the circumstances as shown in People v. Burch, we should not have granted costs with the writ, as the Seci’etary of State was not reprehensible in refusing the relator’s request in view of the provisions of the law of 1889, and the questions raised as to the legality of its enactment. ■
We must now consider the most difficult as well as the most vital point, as it affects the relator, in the whole-controversy. In the second case above, of Allen C. Adsit, Relator, v. Board of State Canvassers, Respondents, it appears that, acting upon the nomination of the Democratic party, and believing that it was competent for the electors at the general election on November 4, 1890, to elect a successor to Judge Burch under the Constitution and laws of this State, steps were taken by the relator to give as general notice of such election, and his candidacy for circuit judge, as possible, in view of the refusal of the Secretary of State and the sheriff of Kent county to give the statutory notices. The relator’s name was placed at the head of the Democratic county ticket upon all the Democratic tickets printed by the Secretary of State for said county of Kent; his name for the office of circuit judge of the seventeenth judicial circuit to fill a vacancy being therefore on the official ticket of his party in said county. This official ticket was published in the several Democratic newspapers published in said county, including one published in the Holland language; and in such county the fact of his candidacy for said office was published as a matter of news in the Republican and Independent newspapers, and also the claim of the relator upon what ground he was a candidate, to wit, that the appointment of Judge Burch by the Governor could not in law continue beyond the general election of November 4, 1890; and the proceedings of said relator in the Supreme Court, taken before said election, were also published in all the newspapers. The relator also caused printed notices, signed by the .chairman and secretary of the Democratic county committee, to be posted and circulated in each of the townships and precincts of said county, that an election would be held to supply such vacancy in the office o'f judge of the seventeenth judicial circuit (Kent county) at the general election to be held on November 4, 1890; and the fact thereby, as it is alleged by relator, that such an election of circuit judge would be held, “became and was notorious in all the election precincts of said circuit.”
At said election in said county of Kent, the relatar received at every precinct iñ said county nearly if not the full vote of his party for said office, his total vote in the county being 11,659. The Democratic candidate for Secretary of State received 11,690; Auditor General, 11,699; Member State Board Education, 11,706; State Senator, 11,729; surveyor, 11,693; coroners, 11,695 and 11,693. He received more votes than the following candidates upon his party ticket, to wit, State Treasurer, sheriff, register of deeds, and prosecuting attorney. In the whole county, taking the vote upon surveyor and coroners as a fair index of party strength, he ran about 33 votes behind his ticket. The whole vote on Member of State Board of Education was as follows: Hammond, Democrat, 11,706; Ballou, Republican, 10,061; Scott, Prohibition, 1,601; Powers, Industrial, 85, — total, 23,453. One-half of this would be 11,727, so that the relator received not quite one-half of the full vote of the county cast for the candidates for other offices. But, if the Republicans and Prohibitionists had not supported the same candidate for this office, the relator would undoubtedly have received a plurality of votes, if his vote had not fallen below 11,000; and the probabilities are very strong that if all parties had participated in the election, and a full vote had been cast, the relator would have been elected, as every candidate upon his party ticket received pluralities ranging from 2,397 upon Congressman down to 344 for register of deeds, the average of pluralities being over 1,500, and no reason is shown why the relator was not an acceptable candidate to the voters of his own party.
The votes cast for the relator were canvassed by the Kent county board of canvassers, and a tabulated statement of the same forwarded to the Secretary of State, as provided by law. The Board of State Canvassers refused to examine this statement, or to declare the result. The relator asks the writ of mandamus out of this Court to compel a meeting of the Board of State Canvassers, and .directing them to examine such statement of votes, and "to make a statement of the whole number of votes given for said office in said county of Kent at such last general ■election, and deliver the same to the Secretary of State, with the determination of said board as to'what person has been, by the greatest number of votes, duly elected to said office indorsed thereon.
As heretofore shown in People v. Burch, and in this opinion, the general election of November 4, 1890, was the proper and legal .time for electing a successor to Judge Burch, and to fill the unexpired term ending December 31, 1893. If the Secretary of State had issued the notice prescribed by the statute, there could be no ■doubt as to the legality of the election of the relator as such successor, and he would now be entitled to the ■office upon qualifying as the law directs. Was this notice necessary? The statutes provide that—
“When a vacancy shall occur in the office of Judge of -the Supreme Court, of judge of the circuit court, * * * 30 days or more before a general election, the Secretary of State shall, at least 20 days before such election, cause a written notice to be sent to the sheriff of each of the counties within the election district in which such vacancy may occur, which notice shall state in which office the vacancy occurred, and that such vacancy will be supplied at the next general election.” How. Stat. § 146.
The sheriff upon receiving suchmotice is to cause forthwith a like notice in writing to be delivered to the township clerk in each township, and to one of the inspectors of election in each ward in cities, within his county (Id. § 151), and 20 days’ notice of the' holding of each general election for the choice of county officers, designating the officers to be chosen at such election (Id. § 152).
The authorities are uniform that the neglect of the Secretary of State, or of the sheriff, or of both of them, to give these notices, would not invalidate an election of persons receiving the highest number of votes for any office for which the regular term was by law to be filled at a general election. Attorney General v. Canvassers, 64 Mich. 609; People v. Hartwell, 12 Id. 508; People v. Witherell, 14 Id. 48; 6 Amer. & Eng. Enc. Law, 298, 299, and cases cited; State v. Bernier, 38 N. W. Rep. 369 (Minn.); Cooley, Const. Lim. 603; Mechem, Pub. Off. § 173. The notice in such case required by the statute is deemed directory, and not mandatory. The right and duty to hold the election is derived from the law, and not from the notice. The statute makes the time and occasion of the election imperative. Where such a direction is given, it cannot be made nugatory by any failure to give notice. Every one is bound to take notice of what the statute requires. Attorney General v. Canvassers, 64 Mich. 611. But where the time and place of the election are not fixed by law, but the election is only to be called, and the' time and place to be fixed, by some authority named in the statute, after the happening of some condition precedent, it has been held that it is essential to the validity of such an election that it be called, and the time and place fixed, by the very agency designated by law, and none other. Stephens v. People, 89 Ill. 337.
The authorities are not entirely harmonious in regard to the filling of vacancies. It is said, in Mechem on Public Offices and Officers (section 174), that, where the law requires the vacancy to be filled at the next general election, the time and place of which are fixed by law, no notice is necessary, although the law declares that notice shall be given, specifying the vacancy to be filled; an election at-the time and place fixed by law will be valid, although no. notice was given; citing People v. Cowles, 13 N. Y. 350; People v. Hartwell, 12 Mich. 508; Dishon v. Smith, 10 Iowa, 212; State v. Orvis, 20 Wis. 235; State v. Goetze, 22 Id. 363; State v. Jones, 19 Ind. 356. Judge Cooley, in his work on Constitutional Limitations, page 603, says:
“ Where, however, both the time and the place of an election are prescribed by law, every voter has a right to take notice of the law, and to deposit his ballot at the time and place appointed, notwithstanding the officer, whose duty it is to give notice of the election, has failed in that duty. The notice to be thus given is only additional to that which the statute itself gives, and is prescribed for the purpose of greater publicity; but the right to hold the election comes from statute, and not from the official notice. It has therefore been frequently held that when a vacancy exists in an office which the law requires shall be filled at the next general election, the time and place of which are fixed, and that notice of the general election shall also specify the vacancy to be filled, an election at that time and place to fill the vacancy will be valid, notwithstanding the notice is-not given; .and such election cannot be defeated by showing that a small portion only of the electors were actually aware of the vacancy, or cast their votes to fill it.”
There are, however, many cases opposed to this doctrine. It is held by these authorities that where there is— •
“No notice, either by official proclamation or in fact, and it is obvious that the great body of the electors were misled for want of the official proclamation, its absence becomes such au irregularity as prevents an actual choice by the 'electors, — prevents an actual ‘ election/ in the primary sense of that word, — and renders invalid any semblance of an election, which may have been attempted by a few, and which must operate, if it be allowed to operate at all, as a surprise and fraud upon the rights of the many.” Foster v. Scarff, 15 Ohio St. 532.
And in cases where there was no official notice of a vacancy, or that such vacancy would 'be filled at the general election, and the fact was known to but few of the voters, or there was a doubt as to whether there was a vacancy, and but a small number of the electors voted for any candidate to fill such vacancy, it has been held that the election was invalid. State v. McKinney, 25 Wis. 416; Wood v. Bartling, 16 Kan. 109; State v. Good, 41 N. J. Law, 296; Beal v. Morton, 18 Ind. 346; People v. Crissey, 91 N. Y. 616; Toney v. Harris, 85 Ky. 453 (3 S. W. Rep. 614); Secord v. Foutch, 44 Mich. 89.
I think the true doctrine is as laid down in the text of Mechem on Public Offices and Officers, at pages 108, 109, § 174, that an election to fill a vacancy of which no notice was given, and which was in fact known to but few of the voters, is void. But though the official notice was not given, or, if given, not in the prescribed form, yet if the election has been held, and the great body of the voters had notice in fact of the vacancy, this, coupled with the fact that they are presumed to know that the law requires the vacancy to be filled at the next election, is sufficient, even though many refrained from voting because of a difference of the construction of the law. See, also, Jones v. Gridley, 20 Kan. 584; State v. Shirving, 19 Neb. 497 (27 N. W. Rep. 723); Foster v. Scarf, 15 Ohio St. 532; Com. v. Smith, 132 Mass. 289; Dishon v. Smith, 10 Iowa, 212. The question to be considered in these cases is whether the want of the statutory notice has resulted in depriving sufficient electors of the opportunity to exercise their franchise to change the result of the election; and the election should not be set aside when it is apparent that the result would not have been different had all the electors voted.
In the case before us it is evident that all the electors in the county of Kent had nearly, if not quite, as full notice that an election for circuit judge was to take place as if such notice'had come through the official statutory notices. It was notorious that the relator was a candidate; that his party had nominated and were supporting him for this office, claiming that; under the Constitution and laws of this State, a vacancy had occurred in this office, which was required to be filled at the election on November 4, 1890. The newspapers were full of his candidacy, and of his attempts to obtain official notice of the election. Every Democratic ticket bore his name for the office, printed by authority. Notices of the election were posted in every voting precinct, unofficial, it is true, but yet bringing the fact home to the electors that a large portion of the electors, comprising one of the principal political parties in the county, were insisting that a vacancy had occurred in the office of such circuit judge; that the law required such vacancy to be filled at that election; and that they were supporting the relator as a candidate for such .office. It is not to be inferred from the circumstances surrounding and leading up to this election that any considerable number of the'electors of the county of Kent were unaware of the candidacy of relator, or that an election was being held to fill an alleged vacancy in the office of circuit judge. On the contrary, it clearly appears that the other political parties, and the voters of such parties, refrained from taking part in such election under the belief that no vacancy existed, and that Act No. 97, Laws of 1889, extending the term of the respondent until December 31, 1893, was constitutional and valid.
Upon the presentation and argument of this application for mandamus, I was strongly impressed with the idea that such electors were justified in relying upon a statute of the State, which had not been declared invalid, and in refraining from voting for a candidate for this office, and that therefore the election' could not be a legal one without the official notice provided by the statute. But on consideration, and a review of the authorities, I have arrived at a different conclusion.
An unconstitutional law is no law, and in no case can it be made a justification in law for any action or non-action. The maxim that all men are presumed to know the law must .prevail. And, while there may be cases where a person will not be punished with costs for not taking action in opposition to a law appearing upon the statute-books before the same is declared unconstitutional, when such costs are in the discretion of the court, yet no rights can be founded upon such a law; nor can any person or persons be deprived of any rights or privileges because such a law has been apparently legally enacted, and appears in the body of our laws. If, in the present case, but few had voted, and it appeared that the fact of the existence of a vacancy, or that this election was the proper and legal time to fill it, was known to but a small portion of the electors, so that holding the election valid would seem to be a disfranchisement of a large majority of the electors, I should/under the rule heretofore quoted from Mechem on Public Offices and Officers, be constrained to hold that no legal election had occurred for this office. And this, I think, would be in accordance with the ruling of this Court in Secord v. Foutch, 44 Mich. 91, where Judge Campbell says:
“In the present case it is entirely clear that there could have been no general idea that there was to be an election for judge of probate, for there were no opposition candidates, and the number of votes cast is conclusive of the general understanding. * .* * It is a necessary safeguard to popular elections that the people be informed what officers they are to vote for.’ They may be expected to know what elections are to be made at the regular general elections, and as to those in ordinary cases It might be dangerous to allow a failure to give notice to avoid the election. This would enable the popular will to be defeated by the misconduct of ministerial officers. But there can be no such knowledge assumed concerning vacancies in office, and, without some distinct and public notice of some sort, such an election could hardly fail to be capable of the worst kind of fraud and trickery.”
But this is not such a case, and seems to me to be governed by the case of People v. Hartwell, 12 Mich. 508. The Constitution and our laws plainly provide that a vacancy existed in this office, and that the election of November 4, 1890, was the proper time to fill it. The Secretary of Staté gave notice- as he ought to have done of an election at that date of a justice of the Supreme Court to fill vacancy, and no one will contend that if he had failed to do so it would have invalidated the election, providing a candidate had been nominated and voted for by a plurality of the people, considered in reference to the relative strength of the four political parties in this State. In other words, the" Secretary of State, a ministerial officer, could not have prevented the election of a Justice of the Supreme Court by failing to give the notice required by the statute, and it would have been entirely immaterial upon what ground he based his refusal to issue such notice. The same section and article of the Constitution that governs in the case of election to fill a vacancy in the office of Justice of the Supreme Court also expressly regulates and controls the election to fill a vacancy in the office of circuit judge. Article 6, § 14. And by necessary implication this section has been held to preclude the appointment by the Governor to fill a vacancy in either of these offices beyond the next general election. The successor to such appointee, when elected, could not “hold his office for the residue of the unexpired term,” if the Governor could by appointment fill the vacancy for the unexpired term regardless of intervening general elections. People v. Lord, 9 Mich. 227; People v. Burch, ante, 408. Neither can the Secretary of State, by refusing notice, nor a minority party, by refusing to nominate a candidate or to vote, prevent the holding of an election, when the Constitution is plain that it should be held.
The reason why the notice is not given, or why those not voting abstain from exercising their privileges as electors, is unimportant, except as it may go to the question whether or not there was such a' public notice of the election as to bring home to the majority of the electors the fact that such an election was being held. Otherwise it would be in the power of a purely ministerial officer, in concert with a minority party, to assume either that a law was constitutional or unconstitutional, as the case might be, to suit their purposes, and thereby, by neglecting to give notice and refusing to vote, to defeat the will of the majority, and keep an office filled by one who the law declares - should have a successor elected by the will of the majority, or, in this State, the plurality, of the people. This cannot be permitted, as is clearly shown in People v. Hartwell, 12 Mich. at page 523.
It follows that the relator is entitled to the'office of circuit judge of the county of Kent, in the place and stead and -as the successor of Marsden C. Burch, the present incumbent, and that the writ of mandamus should issue as prayed in the case of Allen C. Adsit, Relator, v. State Board of Canvassers, Respondents.
Ohamplin, C. J., and McGrath, J., concurred with Morse, J. | [
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Long, J.
This cause was tried in the Kent circuit court without a jury, and the court found the following facts and conclusions of law:
“1. On the 21st day of October, A. D. 1887, plaintiff sold to ■defendant a bill of Aldine grates, mantels, and hearths, to be placed in a block of tenement-houses owned by defendant in the city of Grand Rapids. This bill of goods includes three No. 18 grates. No time was given or asked on said bill, and on November 1, 1887, defendant paid one hundred dollars by check generally upon said bill, and it was so applied.
“2. In February, 1889, plaintiff brought suit in assumpsit against defendant in justice’s court, to recover the balance due on the bill, and declared on the common counts only, filing the following bill of particulars as its only claim:
“Grand Rapids, Mich., February 27, Í889.
“ Bertram W. Barnard,
“In account with Aldine Manufacturing Company.
1887. Oct. 21.
To 3 No. 18 Aldine fire-places_____'
To 1 No. 22 Aldine fire-place______ To 4 mantels_______________________ $200 00
To 4 tile hearths...................
To 11 hours springing arches........ 5 00
To sand 25c; cement $1 00........... 1 25
To -J- barrel calc, plaster............. 1 10
To fire clay........................... 20
To four hours tearing out Bissel grate from house. ...................... 2 00
To mason and tender setting No. 22 grate in house..................... 4 00
1887. Nov. 1.
' $214 05 By cash........................... 100 00
$114 05 To 1 yr. 4 months inst. at 6 p. c..._ 9 12
Balance..................■_____$123 17
“This suit resulted in a judgment of no cause, of action, and an appeal was taken from such judgment to the circuit court for the county of Kent. Said cause came on for trial on the Sth day of June, 1889, before me and a jury. On the trial of said cause defendant testified he had paid in full for said bill of goods, except said 3 No. 18 grates. It was admitted by plaintiff that if the jury should find that on the sale of said grates plaintiff warranted them, as claimed by defendant in his testimony, plaintiff could not 'recover for said 3 No. 18 grates. Plaintiff then and there admitted that said grates would not fulfill the warranty as claimed by the defendant, and, upon said admission being made by plaintiff, the court ruled that the evidence should be confined to the question of whether the warranty testified to by defendant was in fact made, and the defendant, having tendered 818.02 as the amount admitted to be due, could not recover any judgment for damages against plaintiff under his plea of recoupment. ^Defendant thereafter testified that before the commencement of suit be had ordered plaintiff to remove said grates, for 'the reason that they were worthless, and would not work, and that defendant would not pay for them, to which plaintiff’s manager and secretary replied that he would not. do it; the grates were all right; and that defendant would have to-pay for them. Said cause was tried and submitted to the jury on the theory that, if the warranty which defendant claimed was made when the grates were sold was in fact made, plaintiff could not recover, and that defendant could not recover damages on account of breach of said warranty, for the reason that his tender of the amount admitted to be due plaintiff would prevent such recovery. The court charged the jury as follows: .
“ ‘Gentlemen of the Jury: There is but a single question of fact, for you to determine in order to dispose of this case. The sale of the goods and delivery and the price are undisputed. The defendant claims that the sale was accompanied by an express warranty that the grates would do the work of heating the rooms; that one grate would do the work of heating one suite of rooms. The plaintiff claims that no such warranty was given, but, upon the contrary, he stated, as he claims, to the defendant, at the time the selection of the grates was made, that he ought to take the larger size, as they -would give better satisfaction. You have heard the testimony. Now, one of these claims is true, and the other is not. It was conceded on the trial that, if you should find that the warranty which the defendant claims was niade was in fact made, the plaintiff has no right of action. Therefore all there is of the case, gentlemen, is for you to determine whether or not that warranty which the defendant relies on was made or not,— the warranty that the grates would do the work of heating the rooms. If you find that the warranty was made, as claimed by the defendant, your verdict will be “No cause of action;” if you find that it was not made, your verdict will' be for the plaintiff for the amount of his claim, so far as it is proved by the evidence. I think there is no claim but that it is proved, with the exception of the §2.30; and I suppose you would concede, Mr. Walker, the plaintiff is entitled to recover §104.56?
“ ‘ Mr. Walker. I don’t dispute the amount.
“ ‘ The Court. Then if you find for the plaintiff your verdict will be for the plaintiff, and you are to .assess his damages at §104.56. If you find for the defendant your verdict will be, “No cause of action.”
“ ‘Mr. Walker. You have used the term “warranty” all through. I would like to have it stated what the defendant testifies to constitutes a warranty.
“ ‘ The Court. If you find that the' agent, Mr. Phillips, assured the defendant, stated to him, that one of these grates would do the work of heating one of these suites of rooms, that would constitute a warranty. Swear an officer.’
“Under the instruction of the court said jury rendered a verdict of no cause of action, and judgment was entered accordingly, which judgment has never been appealed from or vacated.
“ 3. After the termination of said suit plaintiff, by its manager, James T. Phillips, demanded from defendant said three grates. Defendant said in reply that he would refer the matter to Myron H. Walker, his attorney; and soon after plaintiff received a letter from said Walker, refusing, on behalf of defendant, to allow plaintiff to remove said grates, which letter is as follows:
“‘Grand Rapids, Mich., 6-21, 1889.
“‘The Aldine M’s'a Co.,
“‘City,—
“ ‘ Cent’n: Regarding your request for leave to take out and take away the Aldine grates in Mr. Barnard’s house, I have to say that I find no authority of law or foundation of right for such action. These grates were solid unconditionally, on what the jury has determined was a false warranty, and by your own act were solidly built into the chimneys of Mr. Barnard’s house, and have thereby become fixed parts of the house and the real estate, and could not be removed without great damage to the house. I fail, under these circumstances, to see what right you acquire to remove them simply because your warranty has been proved and found to be false, and Mr Barnard’s damages to be at least as great as the balance claimed on your account, so that you were found to have already received your full pay. I cannot comply with your request, and, furthermore, I notify you that you will be held strictly accountable for all damages occasioned by any attempt to remove them.
“‘Very resp’y, M. H. Walker.’
“Afterwards, and on the 25th day of June, 1889, said Phillips, on behalf of plaintiff, made demand upon defendant in the following language:
“ ‘ You have in your block of houses on the corner of Court and Allen streets in the city of Grand Rapids, Michigan, three No. 18 Aldine fire-places or grates. The Aldine Manufacturing Co., of said city of Grand Rapids, is the owner of said three grates, and entitled to the possession thereof, In behalf of said company I hereby demand said grates, and that said company be allowed to remove said grates from said houses. On the part of said company I undertake, if this demand be granted by you, to remove said" grates in a reasonable and careful manner, and at such time as shall best suit the convenience of yourself and the occupants of said houses, and to remove said grates without injury to the mantels or he.arths or any other property o£ yourself or tenants.’
“Said demand was in writing, but unsigned, and was read to, but not left with, said defendant. Defendant refused to grant this demand, and refused to allow plaintiff to remove said grates. I further find that prior to' the commencement of this suit defendant had converted said three grates, the property of said plaintiff, to his own use.
“4. Afterwards this suit was commenced in assumpsit by plaintiff before Thomas Walsh, justice of the peace, for the value of the grates. Judgment was rendered' for plaintiff for one hundred dollars damages, and defendant appealed.
“ 5. I find that said three grates were worth at the time demand was made as aforesaid the sum of eighty-five dollars, and that interest on said sum to date amounts to §2.50.
“ 6. I further find that the whole bill of parcels, to wit, 1 No. 22 Aldine fire-place, 3 No. 18 Aldine fire-places, 4 tile hearths, and 4 mantels, mentioned in plaintiff’s bill of particulars in said first suit, were all included and sold by the terms of the original contract of sale for the single price of §200 for the whole lot, which also included the setting of the same in defendant’s block, and that said setting was in fact done by plaintiff and its agents at its own expense. I further find that said grates are so placed that they can be removed without material injury to defendant’s property, and that when said grates were placed in defendant’s house they did not become fixtures or a part of the real estate. ‘
“CONCLUSIONS OF LAW.
“ 1. At the termination of the first suit brought by plaintiff against defendant, resulting in a judgment of no cause of action, the title to said three Aldine grates was in plaintiff, and plaintiff was entitled to possession of the same.
“2. After demand and refusal to deliver up the grates, plaintiff was entitled to maintain this action against defendant for the value of said grates. Plaintiff is therefore entitled to judgment for eighty-seven and 50-100 dollars, the value of the grates at the time the demand was made, with interest and cost of suit.”
Judgment was entered accordingly. Exceptions were alleged to these findings of fact and conclusions of law. It is insisted here—
1. That upon the facts found the grates became fixtures.
%. That the evidence does not sustain the finding that the grates did not become fixtures.
3. That the former suit is a bar to this action.
4. That under the circumstances stated upon this record plaintiff could not waive the tort and maintain an action of assumpsit
From a careful examination of the record we are all agreed that the evidence supports the finding that the grates did not become fixtures, and the court properly so found. The grates were sold, with other goods, as one parcel, and' at an agreed price; but the grates were warranted to heat the rooms for which they were intended. The defendant paid for all the goods except the grates, and refused to pay for them because they did not fulfill the warranty. After receiving the goods he paid $100, and, when payment was demanded, he tendered to the plaintiff $18.02, balance unpaid on the goods except the grates, for which he refused to pay, and ordered the plaintiff to remove them. At this time he made no question but that the grates could properly be removed, and desired the plaintiff to do so, and made no claim that they were fixtures. The plaintiff denied that any such warranty was made, and therefore refused to take the grates. It is quite remarkable that during the whole controversy arising out of the first suit neither the defendant nor his counsel made any claim that the grates could not be removed without injury .to the building,- but, on the contrary, the defendant was demanding that they should be removed by the plaintiff. The question was never raised until after the termination of that suit, and even when demand was thereafter made the defendant made no such claim, but in reply to the demand stated that he would refer the matter to his attorney. It was then discovered by his attorney for the first time in the history of the case that the grates had become fixtures, and for that, among other reasons, the plaintiff could not have satisfaction for the property which defendant had of the plaintiff, and for which not one dollar had been paid. Taking these facts into consideration, as well as the manner in which the grates had been put in, it is quite evident that the defendant never intended to retain them until he was advised by his counsel that plaintiff could not, as a matter of law, take them out without injury to the freehold, and that plaintiff was barred from taking them by the result of the former suit.
It is true that there is no universal test whereby the character of what is claimed to be a fixture can be determined in the abstract; that neither the mode of annexation nor the manner of use is in all cases conclusive; yet these considerations are frequently of much importance in arriving at the intention of the parties, which is the real test. It is now well settled in this State that whether an article attached to the freehold becomes a fixture depends largely upon the intention of the parties. Crippen v. Morrison, 13 Mich. 23; Robertson v. Corsett, 39 Id. 777; Wheeler v. Bedell, 40 Id. 693; Ferris v. Quimby, 41 Id. 202; Manwaring v. Jenison, 61 Id. 117; Stevens v. Rose, 69 Id. 259. Tinder the finding of the jury in the first proceeding the grates were sold under an express warranty. It was conceded on that trial that they did not fulfill it, and the defendant testified that he ordered the plaintiff to take them out, which was not denied. It is therefore a legitimate conclusion, and the only sensible conclusion which can be arrived at under these circumstances, that the sale was a conditional one, dependent upon the fact whether the grates would heat the rooms, which it is conceded they would not do. Thus it clearly appears that the parties did not intend to make them fixtures, and this, coupled with the manner of their being affixed, must settle, and did settle in the mind of the trial court, the fact that they were not fixtures. We see no error in this finding.
The court below was equally right upon the question of the former suit not being a bar. The former suit was in asswttji)sii for the value of the goods sold, the hill of particulars of which is set out in the findings of the trial ■court. On that trial the defendant testified that he had paid in full for all the goods except the grates. The controversy was thus narrowed to the right of recovery for those. It was claimed on the part of the defendant that "they were purchased under a warranty that they would heat the rooms. This the plaintiff denied, but admitted they did not fulfill the warranty if one was made. Upon this admission the court ruled that the evidence should be confined to the question whether the warranty testified to by defendant was in fact made, and that the defendant, having tendered $18.02 as the amount admitted to be due, could not 'recover any judgment for damages against plaintiff under his plea of recoupment. The cause was submitted to the jury upon the one question of whether a warranty was in fact made, and by their verdict they found it was made, and gave judgment of no ■cause of action.
Defendant's counsel now insists that this action and the proceedings taken were in affirmance of the contract, ■and therefore all the questions were there settled which are now sought to be raised in the present suit. It-appears, however, that on that trial the defendant testified that he not only tendered the amount claimed for the balance of the bill aside from the grates, but had made a demand upon the plaintiff to rem'ove the grates. Defendant then gave no evidence, and, so far as this record shows, offered none to show the amount of his damages, if any had been sustained; and he appears to have taken no exception to the ruling of the court that he could not recover judgment against the plaintiff on account of having made the tender. It is evident from the record presented here that in the controversy in the former suit the whole case was treated as a -rescission of sale. The plaintiff’s admission is evidence that it so viewed the case, and the court, from the rulings made on the trial, apparently regarded the ease as one of rescission. There is no other theory upon ivhich the defendant had a right to defeat the plaintiff’s claim under the admissions made and the ruling of the trial court. If the defendant claimed upon that trial that he had a right to keep the grates and recover his damages, then it must be presumed the trial court would not have submitted the case to the jury without some proof of damages; but none was made, and the trial court adjudged it not necessary.to the case as presented. Upon what theory could it be said that the damages, none having been proved, amounted to exactly the value of the grates? And yet, if the theory of defendant’s counsel is adopted here, we are to hold that the trial court and the attorneys of the parties so-regarded it, and that the -plaintiff’s admission upon that trial amotinted to a concession that such was the fact. We cannot agree to such a proposition. The admission of the plaintiff cannot be so enlarged, and if it were so-intended it would be a reflection upon the judgment and intelligence of the court and counsel trying that case. If the case was tried upon the theory that the defendant had the right to rescind by reason of the breach of the warranty, and had tendered the grates back to the plaintiff for that reason, then the whole course of the trial and the ruling of the trial court in this case are easily explainable. We are satisfied that this was the theory upon which the cause was tried. That cause was not, therefore, a bar to the present action, as the title to the grates had never passed to the defendant, and did not pass by reason of any action taken by the plaintiff upon the trial.
It is also contended that the plaintiff had no right to waive the tort and suó in assumpsit. There is nothing in this point. It was personal property in the hands of the defendant, to which the plaintiff was lawfully entitled. He demanded it, and defendant refused to surrender the possession. The action was commenced in trover, and by stipulation of the parties the form of the action was changed to assumpsit. The possession ofh the property was obtained under contract between the parties, and the refusal to surrender upon demand amounted to a conversion for which- the tort could be waived and assumpsit brought. Tuttle v. Campbell, 74 Mich. 652. The action could be maintained on the common counts (McLaughlin v. Salley, 46 Mich. 219), even though the declaration does not set forth the waiver of the tort (McDonald v. McDonald, 67 Mich. 122). We find no error in the record.
The judgment must be affirmed, with costs.
The other Justices concurred. | [
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Morse, J.
This is an action of trespass on the case brought in the Jackson circuit court by the plaintiff to recover damages occasioned by the sale of liquor to her husband by the defendant between the 1st day of October, 1887, and the 10th day of January, 1888. She ■recovered judgment for $350.
The declaration charges that the sales were illegal, in that her husband, John McDonald, was a person in the habit of getting intoxicated at the time the liquors were sold to him, which fact was well known to defendant, and that, on account of such sales, the said' John. McDonald became intoxicated, and Avhile in a state of intoxication, induced by such liquors sold to him by-defendant, shot himself with a revolver, wounding and disabling himself, and was thereby disabled and incapacitated from furnishing said plaintiff and her children .the necessary support and maintenance which it was incumbent upon him to render, and, by reason of such intoxication, was discharged from his employment, whereby the plaintiff lost and was deprived of her means of support for herself and her children.
The evidence of the plaintiff tended to show that McDonald came to Jackson in March, 1880. Some six months thereafter he moved into a house within a short distance of the defendant’s place of business, who kept a grocery and saloon attached. McDonald acquired the habit of drinking soon after he came to Jackson,' being a man of temperate habits before that time. The plaintiff testifies that she notified, defendant not to sell her husband any liquor in the summer of 1887. She repeated the notice to him or his clerks twice during the fall. The defendant refused to quit furnishing liquor to McDonald, insisting that he had the lawful right to sell it to him. McDonald got most of his liquor at Casey’s, and was frequently intoxicated, mostly evenings. He was working on the Fargo shoe contract at the prison, and his wife told Casey that he would be discharged from his work if he kept on drinking. He was discharged December 16, 1887. His wages were $15 per week. After his. discharge he drank very hard, so much so that it affected his mind and nerves. On the afternoon of January 10, 1888, having been drinking in the forenoon, he got a quart bottle of brandy at Casey’s, of Casey’s wife, telling her that he wanted it for bowel complaint. He took the bottle home with him, and, after drinking about half of it, shot himself with a revolver. The ball entered the forehead on the left side, making an open scalp wound. It was some three months after the shooting before he was able to go to work, and some five months before he found employment.
The defendant admitted that McDonald was in the habit of getting intoxicated, but claimed he never sold him liquor except when he was sober; and that he did this with the consent and at the request of the plaintiff, who said her husband would have liquor any way, and she would rather he would get it at Casey’s than anywhere else. The defendant furnished the family of McDonald with groceries, and beer and liquor were charged on the same pass-book as the groceries. Defendant showed that he frequently refused McDonald liquor. His wife admitted letting McDonald have the bottle of brandy, but claimed that he wanted it for his child that was sick, and that the doctor had ordered it.
Twenty-eight errors are assigned. We shall discuss those only that we deem of sufficient importance to be noticed in the reports. Those not discussed have been °onsidered, however, and found not tenable as errors. We find no errors in the admission or rejection of testimony to the defendant’s prejudice.
The coui’t instructed the jury that if McDonald was in the habit of getting intoxicated, and Mrs. Oasey knew it, the sale of the bottle of brandy to him was unlawful, even though he said to her that the doctor ordered him to get it for sickness in his family. This is assigned as error, in connection with the refusal of the court to charge that if the jury found that plaintiff sent her husband for the brandy for the sick children, and he stated to Mrs. Casey that he wanted it for that purpose, the plaintiff could not recover for any loss or damage resulting -from the drinking of it. Whether or not Mrs. Casey sold this brandy to McDonald in the good-faith belief that he wanted it for his sick children was immaterial, if she knew he was in the habit of getting intoxicated. The case of People v. Hinchman, 75 Mich. 590, is not applicable here. Ilinchman was a druggist, authorized to sell liquor for medicinal purposes; and we held that he had a right to rely upon the statement made by the purchaser as to the purpose for which the liquor was to be used, if he in good faith believed such statement. But a saloon-keeper is not authorized to sell liquor for medicinal use any more than he is for other purposes, and, where he knows that a man is in the habit of getting intoxicated, and a sale to him is therefore unlawful, he cannot excuse such sale by the plea that he relied upon the statement that it was wanted as a medicine. The court was also requested to charge the jury that, if the plaintiff aided her husband to open the bottle of brandy voluntarily, she could not recover for any damages caused by the drinking of it. This the court modified, by inserting “ knowing he was going to drink some of it, or encouraged him to drink it.” There was no error in such modification.
The case was fairly and clearly put to the jury in this: That the burden of proof was upon the plaintiff to show that she never gave her consent to the sale of liquors to her husband, and, if she did give such consent, she could not recover for any sales made under such consent. But it is claimed by defendant's counsel that the jury were misled by the statement of the court in such charge, that the consent to justify unlawful sales must cover times and sales for which the action was brought, and if the consent was for or limited to different sales, to be made at a time previous to and other than the sales for which recovery was sought, such consent would afford no justification; that there was no testimony in the case justifying such a statement; and that the jury might have got the impression that there was a doubt. in the mind of the court as to whether such consent covered the period of the declaration. There was a general denial on the part of plaintiff that she ever consented that liquors might be sold to her husband during the time laid in the declaration, and also a general denial by defendant that plaintiff ever forbade his selling liquor to McDonald. There was also testimony showing beef and whisky charged upon the pass-book for groceries, which the plaintiff used with her husband in trading with Casey. She testified to forbidding Casey selling liquor to McDonald several times, and Casey swears that she told him several times, after he had refused McDonald liquor, to let him have it, as he would get it down town if- he did not get it at Casey's. Under this testimony, each denying the evi dence of the other, the court was justified in the statement. The jury might have found that at some times she consented to her husband’s getting drink at Casey’s, and yet found that, when he was on his drinking spree before he was discharged, plaintiff forbade the sale of any more liquor to him, and warned Casey that selling him more would result in his discharge from employment; and there was testimony, if believed, to justify such findings.
A great deal of fault is found with the charge of the court. We are not, however, cited to any positive error in his statement of the law, but the burden of the complaint seems to be that the court in some respects did not clearly enough apply the law to the facts, and in other parts of the charge he went too much into detail in such application; and the counsel for the defendant, after making one of these objections, says in his brief:
“Had the charge been to a jury of lawyers, it might not be subject to this criticism, but to a jury of laymen, possibly prejudiced more or less against the business of selling intoxicating drinks, it was not sufficiently guarded to protect the rights of defendant.”
We think the instructions to the jury, while dealing with more issues than was perhaps necessary, were unusually clear and correct. We fail to notice where the defendant has been injured by this judgment of $350 against him. The defendant admitted that he knew McDonald was in the habit of getting intoxicated, and yet he kept on selling him liquor whenever he found him sober. Every glass sold to him under these circumstances was unlawful, and a damage to the wife. His only defense in this civil action (and he could have had none jn a criminal suit) was that the wife had consented to the sales. The jury found against him on this point, and not without reason. The verdict cannot be said to have shown prejudice. It was not disputed that McDonald had employment at $15 per week, which he lost by drunkenness caused by liquor obtained in part at Casey’s. Liquor caused him to shoot himself, which laid him up for three months longer. Casey’s own evidence shows that McDonald supported his family, and bought his groceries of him, while he was at work. It does not look to us, upon a careful examination of the whole record, that the jury could have been very much prejudiced against the sale of liquor, considering the amount of their verdict, and we fail to find any action on the part of the trial judge to the prejudice of the defendant.
The judgment is affirmed, with costs.
The other Justices concurred | [
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] |
Grant, J.
Complainant was the holder of a promissory-note for $114.37, secured by a mortgage on real estate, and filed his bill to foreclose the mortgage. Defendants Roberge and Schram were the makers of the note. The mortgage given as security was executed by Roberge to defendant Sweet and Asa Fuller. Defendant Wallace was made a party as a subsequent mortgagee. Decree was entered for complainant, and defendant 'Wallace alone appealed.
There is but little, if any, dispute as to the material facts in the case, which are as follows: October' 15, 1879, Roberge and Schram bought from one John H. Tucker a saw-mill for $800. Fuller and Sweet had a claim upon it for $685.63. Roberge and Schram executed six promissory notes, aggregating $800, the total purchase price. Five of these notes were made payable to Fuller and Sweet, and the sixth, the note in question, to John H. Tucker. It was payable in three years from date, with interest at 7 per cent. The mortgage covered the six notes, which were described in the mortgage as—
“Six promissory notes, bearing even date herewith, executed by John B. Roberge and Alexander Schram to said parties of the second part.”
The bill is in the usual form of a foreclosure bill, except that it alleges a mistake in the description of the note in question, and prays for a correction of the mistake. Tucker was present at the execution of this mortgage, was one of the witnesses to it, and shortly after-wards transferred the note to one Ransom Bartlett, who in turn sold and transferred it to complainant. There was written across the face of this note the words, “Secured by mortgage.” Roberge and Schram sold a half interest in the mill to one John Hopson, and arranged with Fuller and Stveet for the payment of the first five notes by Hopson. Hopson paid them. The note in suit has not been paid; at least the testimony does not show this fact, and the burden of proof in this respect was upon the defendants. June 8, 1888, Roberge deeded the land to Schram, who on the same day executed a mortgage for $450 to one William Cooper. August 28, 1888, this mortgage was assigned by Cooper-to defendant Wallace, who claims to be a tona fide purchaser without notice of complainant's note and his interest in the mortgage.
On December 20, 1887, defendant Eoberge presented a petition to the circuit court for the county of Tuscola, in which he set forth this mortgage, and stated that the debt secured thereby had been fully paid and satisfied, and on the same day the court entered upon its journal a certificate that the debt secured by said mortgage was fully paid and satisfied, and ordered the same to be discharged, and declared fully paid and satisfied. This proceeding was in pursuance of Act No. 3, Laws of 1887 (3 How. Stat. § 5705). Schram applied to the firm of A. D. Slaght & Co. for a loan upon this land. Slaght & Oo. acted as the agents for Mr. Cooper in effecting the. loan. Before this loan was made, a member of this firm by the name of Carson saw defendants Eoberge and Schram about the mortgage to Sweet and Fuller. He does not remember particularly what Schram said, but says Eoberge told him—
“That he had obtained a discharge of the mortgage; that his house burned up, and that the discharge was burned in the house before it had been recorded.”
Mr. Carson also saw the proceeding in the circuit court, and the action of the court in declaring the mortgage paid and ordering its discharge. No other efforts were made on behalf of Mr. Cooper to ascertain whether the Sweet and Fuller mortgage had been paid or discharged.
Whether or not this mortgage was in fact discharged depends upon the effect to be given to the . testimony of defendant Eoberge and John O. Green, whose testimony on this point it is necessary to give quite fully. Eoberge testifies substantially as follows:
“I obtained a discharge of this mortgage about a year after I had bought of Sweet and Fuller. It got lost in the fire. It was in the trunk that burned up in that fire. I obtained the discharge through Mr. Green, an attorney. Mr. Hopson and Mr. Green obtained it for me. Green acted for me in procuring this discharge from Fuller and Sweet, and delivered it to me as a discharge of this mortgage. It purported to be signed by Sweet and Fuller. It was witnessed and acknowledged.”
Mr. Green testified as follows:
“ Fuller and Sweet executed a discharge of this mortgage to Roberge. I saw the discharge. It was drawn up in the ordinary form of a discharge, describing the mortgage, and where it was recorded. It was signed by Fuller and Sweet. I think I examined it to see whether it was properly executed., I think it was. They were in Ohio. I had the discharge made out for them to sign. I think the discharge was in accordance with the laws of this State, but I think there was some question about the clerk’s certificate in Ohio, — something of that kind, but I don’t remember just what it was now. I handed it to Roberge just as it was.”
The only other evidence showing the discharge is a letter written by the witness Green on November 9, 1887, to the attorney who prepared and filed the petition for Mr. Roberge to secure the order of discharge from the court. It reads as follows:
“My Dear Sir: This man Roberge wants a mortgage discharged in your county. I got him a discharge in ’81, and he kept it at home, and did not record it, and it was burnt up in the fire of ’81; and, as I was the attorney for Fuller and Sweet, and got him the discharge, I am a good witness for him to satisfy the court, as I have no interest in the matter, and he resides in your county, and the court is handy for you; and by petition to the court he can get a legal discharge, as Fuller is dead. I think this would be the best way to clear off the mortgage, as Roberge’s and my evidence would be sufficient. I am glad to hear you are in practice, and remain your friend.”
Upon this evidence the conclusion is irresistible that a full discharge of this mortgage was executed and deliv ered. Of this fact the second mortgagee, Mr. Cooper, had notice; and his assignee, the defendant "Wallace, is entitled to the benefit of that notice. Subsequent mortgagees without notice may rely upon the evidence of discharge as shown by the record. A discharge is only conclusive as to those who purchase in good faith. A discharge may be recorded, and still the mortgage be not discharged. A subsequent mortgagee with notice of that fact will not be protected by the record. It is not necessary that the discharge be recorded in order to.protect a subsequent purchaser or mortgagee. When such an one receives reliable information, upon which he relies, that a mortgage has been discharged, he will be protected if it turns out that the mortgage was in fact discharged. The defendant Wallace was so informed. He in good faith acted upon such information, and his rights, therefore, are paramount to those of the complainant.
There was nothing upon the record to show that any other person aside from Sweet and Fuller had any interest in the mortgage given to them. It is also quite apparent that there was no mistake in the mortgage itself. Tucker was present when the notes and mortgage were drawn, and they were evidently drawn in the manner they were with the full understanding of the parties. It follows, therefore, that complainant may proceed with his foreclosure as against Schram, but subject to the mortgage of the defendant Wallace, who will recover costs in both courts.
The other Justices concurred. | [
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Per Curiam.
Defendant pled guilty to possession of at least 225 grams but less than 650 grams of cocaine, MCL 333.7403(2)(a)(ii); MSA 14.15(7403)(2) (a)(ii). The trial court sentenced him to a term of five to thirty years of imprisonment. The prosecutor appeals from the sentence imposed and contends that he has authority to appeal as of right defendant’s sentence and that the trial court erred in imposing a sentence below the statutory minimum.
According to defendant, on October 19, 1988, he was at a house in Detroit when a friend offered him $100 to hold a large package containing approximately 370 grams of cocaine for an hour or more. The friend brought a safe into the basement of the house, placed the cocaine inside and locked the safe. Defendant hid the safe behind a door, and his friend left. When the friend did not come back as expected, defendant left, and he was arrested upon his return later that night.
Regarding the first issue raised, we agree that the prosecutor may appeal as of right the defendant’s sentence pursuant to MCL 770.12(1); MSA 28.1109(1), as amended by 1988 PA 66. See People v Downey, 183 Mich App 405, 407-409; 454 NW2d 235 (1990); People v Reynolds, 181 Mich App 185; 448 NW2d 774 (1989). However, defendant argues that, because a successful appeal by the prosecutor could subject him to an increased sentence upon resentencing, allowing the prosecutor to appeal from a sentence violates due process. Because resentencing after a successful appeal by the prosecutor from the defendant’s original sentence would be based on specific, articulable grounds, due process would not be violated. The due process requirement that vindictiveness against defendant not play a part in his resentencing after retrial is simply not implicated in this context.
The prosecutor contends that the reasons given by the trial judge for departing from the minimum term of imprisonment mandated by § 7403(2)(a)(ii) were not "substantial and compelling,” within the meaning of that section. Section 7403(2)(a)(ii) mandates imprisonment for not less than ten years nor more than thirty years. In sentencing defendant, the trial court found as mitigating circumstances that James Poole, defendant’s friend who allegedly supplied the drugs, was sentenced to a five- to thirty-year term of imprisonment and that defendant’s possession of the drugs was transitory, was for another person, and was not as a dealer. In a private, side-bar conversation, the court also con sidered as a mitigating circumstance defendant’s cooperation with the police in providing information which led to the supplier’s arrest. The trial court found those circumstances to constitute "substantial and compelling reasons” to depart from the mandatory minimum term of imprisonment, see § 7403(3), and sentenced defendant to a term of five to thirty years.
In Downey, supra, a panel of this Court considered this issue in the context of MCL 333.7401(2) (a)(ii)-(iv); MSA 14.15(7401)(2)(a)(ii)-(iv), which prohibits controlled substance violations involving delivery and manufacture. Because departure from the minimum term of imprisonment authorized under either § 7401 or § 7403 must be based on a finding "that there are substantial and compelling reasons to do so,” §§7401(4) and 7403(3), the reasoning of the Court in Downey is applicable in this case.
After consideration of the statutory language, the panel in Downey, supra at 410-412, reviewed the presumptive sentencing statutes and guidelines from other states and listed factors which could be considered substantial and compelling reasons to depart from the mandatory minimum sentences contained in § 7401(2)(a)(ii)-(iv). The panel stated:
We conclude that the Legislature intended to give discretion to depart from the presumptively mandatory sentences only in exceptional cases. The scope of a sentencing court’s discretion is thus narrow, the factors used in departing must be objective and must be of such significance that the statutory sentence is clearly inappropriate to the offender. The trial court must keep in mind that the Legislature has declared that the mandatory minimum sentence is an appropriate sentence. The trial court must begin its analysis from that per spective. We review the trial court’s decision to impose an exceptional sentence for an abuse of the narrowly defined discretion which it possesses. [Id. at 416.]
In reaching its conclusion that the factor must be objective, the Court explained that it must be capable of verification. Downey, supra. A defendant’s prior record, for example, is readily verifiable and objective. However, "a defendant’s protestations of remorse and his actions after his arrest which are relied upon to show his remorse and rehabilitative potential are much more subjective and thus would not, absent other exceptional circumstances, be appropriate factors to consider.” Id.
Here, the trial judge found "the most mitigating circumstance” was that Poole had received a sentence below the statutory requirement. However, this factor is not one we consider to be substantial and compelling. The policy of this state favors individualized sentencing for every defendant. People v Adams, 430 Mich 679, 686; 425 NW2d 437 (1988); People v Coles, 417 Mich 523, 537; 339 NW2d 440 (1983). The trial court has broad discretion to impose a sentence tailored to the circumstances of the case and the offender in an effort to balance society’s need for protection against its interest in rehabilitating the offender. Id.; People v Van Etten, 163 Mich App 593, 595; 415 NW2d 215 (1987), lv den 428 Mich 922 (1987). Although fairness and equal treatment in sentencing are desirable, because our system provides for individualized sentencing based on many factors, a defendant’s sentence does not necessarily reflect the degree of his culpability. As this Court explained in People v Weathington, 183 Mich App 360, 365; 454 NW2d 215 (1990):
We find no basis in Coles, supra, or any other body of law, to support the concept that defendant is necessarily entitled to a more lenient sentence merely because his fellow participants in the crime were fortunate enough to receive such leniency before a different judge, where every other permissible sentencing factor in the case justifies the sentence imposed.
Second, the record before us does not support the trial court’s conclusion that defendant’s criminal conduct was less culpable than that of Poole. As the panel in Downey, supra, explained, to be substantial and compelling, the reasons for departure must be objective and verifiable. The record does not indicate the extent of Poole’s conduct in an objective and verifiable manner. In addition, the extent of defendant’s conduct should not be based merely upon his self-serving assertions. We note that, according to the preliminary examination transcript, papers belonging to defendant were found inside the safe, suggesting that it belonged to, or was used personally by, defendant. The record, as it stands, does not persuade us that defendant has, as he is required, demonstrated that Poole’s shorter sentence constituted an objective and verifiable reason justifing departure from the mandatory minimum sentence. See Downey, supra at 412.
The trial court also found as mitigating circumstances that defendant’s possession of the drugs was transitory, was for another person, and was not as a dealer. Those circumstances are not substantial and compelling because they are not objective and verifiable. The degree to which defendant’s possession was transitory is based on his own assertions, which are contradicted by the presence of his personal papers in the safe containing the drugs. The criminal conduct which the Legislature intended to punish under § 7403 was the possession of drugs. Whether possession is transitory is a subjective judgment. Any possession of such a large amount of drugs is likely to be "for another person.” Finally, absent police intervention, the success of Poole, the alleged dealer in the case, would have been directly furthered by defendant’s agreement to keep the drugs secure.
As to the third reason for departure given by the trial court, defendant’s cooperation with the police, this factor may, in some circumstances, be so "substantial and compelling” as to warrant a sentence below the statutory minimum. However, in this case, the extent of defendant’s cooperation is not clear from the record. In addition, the extent of his cooperation must be objective and verifiable. See Downey, supra. Therefore, we conclude that the matter should be remanded for the trial court to determine on the record whether, in this case, defendant’s cooperation with the police is "substantial and compelling” within the meaning of § 7403(3).
In view of the trial court’s reliance upon at least some circumstances which were not substantial and compelling, defendant’s sentence is reversed. Resentencing is required, and the trial court must, as the panel in Downey, supra, explained, begin with the mandatory sentence and require defendant to "demonstrate that there are objective and verifiable reasons that justify departure.”
Reversed and remanded for resentencing consistent with this opinion and in light of Downey, supra. We do not retain jurisdiction. | [
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Per Curiam.
Plaintiff appeals as of right from the order of the Kent Circuit Court which granted summary disposition to defendant on the basis of governmental immunity. The court ruled that the public building exception did not apply to injuries suffered by plaintiff when he slipped on some snow and ice and fell on the sidewalk immediately adjacent to the entryway of defendant’s public building. We reverse.
As we read Reardon v Dep’t of Mental Health, 430 Mich 398, 413-414; 424 NW2d 248 (1988) — the Supreme Court’s latest pronouncement on the public building exception, MCL 691.1406; MSA 3.996(106) — the exception is not limited to the actual physical structure of the building, but applies to areas immediately adjacent to the building as well. To the extent that Yarrick v Village of Kent City, 180 Mich App 410; 447 NW2d 803 (1989), holds contra, we disagree. We also believe the building exception applies to dangerous conditions arising from the accumulation of foreign substances on the floors of public buildings. Wade v Dep’t of Corrections, 182 Mich App 519; 453 NW2d 683 (1990). Furthermore, we find no good reason for distinguishing between the natural accumulations of substances (such as the snow and ice here) and those caused by persons (such as the oil and grease in Wade) where the dangers of each are equally well known to the government agency. The pertinent inquiry should not concern the genesis of the danger, but whether the government agency had actual or constructive knowledge that a danger existed and failed to act to protect the public. Williamson v Dep’t of Mental Health, 176 Mich App 752, 757; 440 NW2d 97 (1989), lv den 434 Mich 862 (1990). The trial court erred in holding that a sidewalk adjacent to a public building does not fall within the public building exception and that the natural accumulation of ice and snow does not constitute a dangerous condition of the building. Defendant should not have been granted summary disposition.
Reversed. | [
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Marilyn Kelly, J.
Defendant National Bank of Detroit (nbd) appeals as of right from an order granting summary disposition to plaintiff, Mutual Savings and Loan. MCR 2.116(0(10). We affirm.
On October 23, 1987, nbd issued a cashier’s check to Cheryl Harmon on behalf of N.C. Servo Technology, Inc., in the amount of $16,682.40. The application for the check indicated that the intended payee was Moog, Inc., and the purchaser was Stantz Electronics. On the check, Moog was designated as the payee and Stantz Electronics was the remitter. On October 24, 1987, Donald Stantz presented the check for deposit to open a personal account at a branch office of Mutual. Since Stantz Electronics was not the named payee, Mutual required Stantz to make the following endorsement:
Not used for original purpose
Stantz Electronics
/s/ Donald Stantz
The check was processed through the normal banking channels and received by nbd on October 26, 1987. A provisional settlement was made in favor of Mutual, and nbd’s account was debited accordingly. Nbd claims that it orally dishonored the check before expiration of the midnight deadline of October 27. Teresa Gokey, an employee of Mutual, stated in her deposition that an nbd employee told her sometime between October 27 and 29 that the check was being returned. Then, in a subsequent affidavit, she stated that she did not receive oral notice until October 29. Nbd actually returned the check to the Federal Reserve Bank on November 3. Plaintiff received it November 10.
On appeal, nbd claims the court erred in grant ing Mutual’s motion for summary disposition. It insists the oral notice of dishonor was timely and sufficient to satisfy the midnight deadline.
Articles 3 and 4 of the Uniform Commercial Code govern transactions relating to bank deposits, collections and commercial paper. MCL 440.3101 et seq.; MSA 19.3101 et seq. Section 4-302 provides that a payor bank must take action within a prescribed time period in order to avoid liability for the amount of a cashier’s check. It states:
In the absence of a valid defense such as breach of a presentment warranty (subsection (1) of section 4207), settlement effected or the like, if an item is presented on and received by a payor bank the bank is accountable for the amount of
(a) a demand item other than a documentary draft whether properly payable or not if the bank, in any case where it is not also the depositary bank, retains the item beyond midnight of the banking day of receipt without settling for it or, regardless of whether it is also the depositary bank, does not pay or return the item or send notice of dishonor until after its midnight deadline. [MCL 440.4302; MSA 19.4302.]
The midnight deadline is midnight on the next banking day following the banking day on which the payor bank receives the item. UCC 4-104(h), MCL 440.4104(h); MSA 19.4104(h).
In this case, the deadline was midnight on October 27. Nbd claims it gave oral notice of dishonor prior to the deadline. This contention is not supported by the evidence. Ms. Gokey clarified her deposition testimony and indicated oral notice of dishonor was not received until October 29.
Even if there were a question of fact regarding the date of the oral notice, we conclude that, under the ucc, oral notice of dishonor is not sufficient.
There is no Michigan case law addressing the sufficiency of oral notice of dishonor under the ucc. Other jurisdictions have rendered decisions which differ on the issue. Oral notice was held insufficient in Utah in 1975 but sufficient ten years later in Indiana. Valley Bank & Trust Co v First Security Bank of Utah, 538 P2d 298 (Utah, 1975); Yoder v Cromwell State Bank, 478 NE2d 131 (Ind App, 1985).
The Code at § 3-508 permits notice of dishonor to be oral or written. MCL 440.3508; MSA 19.3508. However §4-302(a) states that the payor bank must pay, return, or "send notice of dishonor” before the midnight deadline. The definition of send "in connection with any writing or notice means to deposit in the mail or deliver for transmission by any other usual means of communication with postage or cost of transmission provided for and properly addressed . . . .” UCC 1-201(38), MCL 440.1201(38); MSA 19.1201(38). This definition necessarily implies delivery of a written instrument. Thus we find a conflict between § 3-508 and §4-302 with respect to the propriety of oral notice. In the event of a conflict, Article 4 provisions govern. UCC 4-102, MCL 440.4102; MSA 19.4102. Oral notice of dishonor is not permitted under § 4-302. Thus nbd is liable for the amount of the check, unless it can establish a valid defense.
Nbd alleges such a defense. It contends Mutual breached its presentment and transfer warranties under §4-207 by failing to obtain an authorized signature and by presenting an item outside the chain of title. MCL 440.4207; MSA 19.4207. It claims that Stantz Electronics, as remitter, was not a proper endorser of the cashier’s check, that the actual owner was N.C. Servo.
A "cashier’s check” is a bill of exchange drawn by a bank upon itself. The bank becomes both the drawee and the drawer, rather than merely the drawee as in the ordinary check scenario. Bruno v Collective Federal Savings & Loan Ass’n, 147 NJ Super 115; 370 A2d 874 (1977); Swiss Credit Bank v Virginia National Bank-Fairfax, 538 F2d 587 (CA 4, 1976). A cashier’s check, therefore, is accepted by the bank upon issuance and is a primary obligation of the issuing bank, rather than of the purchaser of the check. Munson v American National Bank & Trust Co of Chicago, 484 F2d 620 (CA 7, 1973); Pennsylvania v Curtiss National Bank of Miami Springs, Florida, 427 F2d 395 (CA 5, 1970). By issuing a cashier’s check, the bank promises to draw the amount of the check from its own resources and to pay it upon demand. Consequently, this promise to pay ordinarily cannot be countermanded. Florida Frozen Foods, Inc v National Commercial Bank & Trust Co, 81 AD2d 978; 439 NYS2d 771 (1981); Wertz v Richardson Heights Bank & Trust, 495 SW2d 572 (Tex, 1973).
A cashier’s check is generally acquired for the purpose of assuring a payee that the necessary funds contemplated by the transaction are available. Gillespie v Riley Management Corp, 59 Ill 2d 211; 319 NW2d 753 (1974). Until delivery of the cashier’s check to the named payee, the purchaser remains the "owner” and retains the right to cancel. Gillespie, supra. Thus a bank is justified in relying on the presumptions of continued ownership and lack of delivery to the payee when presented with a cashier’s check by the purchaser. These presumptions exist except when unusual circumstances raise a duty of inquiry. Gillespie, supra; Bunge Corp v Manufacturers Hanover Trust Co, 31 NY2d 223; 335 NYS2d 412 (1972); Scharz v Twin City State Bank, 201 Kan 539; 441 P2d 897 (1968).
The entitlement to rely on a presumption of continued ownership is necessary and appropriate, since a contemplated transaction sometimes fails to materialize. In such an event, the purchaser is left with a cashier’s check which he no longer wishes to deliver. It would pose an unwarranted commercial burden to require the purchaser then to obtain the endorsement of the named payee in order to have the cashier’s check honored or can-celled. Gillespie, supra. Therefore, until the check is placed in the stream of commerce, the purchaser must be able to cancel it. Id.
Extending this principle to cover the breadth of modern commercial transactions, it is desirable to permit the cashier’s check to be honored at the bank of the purchaser’s choice. It would be burdensome to require the purchaser instead to return the check to the issuing bank, cancel it and receive a new check. It is far preferable to permit him, upon sufficient identification, to use the cashier’s check at another bank for a purpose other than that which he originally intended. This extension is in keeping with the purpose and policies of the ucc. UCC 1-102, MCL 440.1102; MSA 19.1102. Only a limited burden is imposed on the drawee bank, as it already has received the funds to cover the check. Moreover the drawee bank accepted the check for payment upon issuance, thus obligating itself to make good the face amount upon demand.
Since the depository bank is entitled to rely on the presumption of the purchaser’s continuing ownership, there can be no breach of warranty under § 4-207 for lack of title. The only exception exists where an unusual circumstance gives rise to a duty on the part of the depository bank to inquire into the purchaser’s ownership.
In this case, the cashier’s check stated on its face that Stantz Electronics was the owner of the check. The check was endorsed "not used for in tended purpose.” There is no evidence of any unusual circumstance that should have indicated to Mutual that Stantz Electronics was not the owner, purchaser, and remitter of the cashier’s check. Therefore, no duty arose to inquire as to the authority of Stantz to use the check for another purpose. There is nothing to indicate that Donald Stantz lacked authority to sign on behalf of his company and to divert the company’s funds to his own account.
Nbd failed to establish the existence of a valid breach of warranty defense under § 4-207 sufficient to relieve it of strict liability for the amount of the cashier’s check. The trial court did not err.
Affirmed. | [
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Long, J.
This is an action of replevin to recover possession of two horses, known as “Tommy Linn” and “ Dan D.” The action is brought against the defendant, sheriff of Wavne county, who held them under three writs of attachment issued against the goods and chattels of Clifton E. Mayne. The cause was tried in the Wayne .circuit court before a jury, where the plaintiff had verdict and judgment for six cents’ damages, he having taken the property under the writ.
The plaintiff on the trial claimed to be entitled to the possession of the property by virtue of a chattel mortgage given by Clifton E. Mayne, the defendant in the attachment suits. The mortgage was given on July 15, 1887, to George E. Barker, and assigned by Barker to the plaintiff on May 2, 1888. At the time the mortgage was given, Mayne, the mortgagor, resided at the city of Omaha, Douglas county, Neb., and Barker, the mortgagee, resided at the same place. The mortgage covered other property besides these two horses, and the property is described in the mortgage as being upon the ranch of C. E. Mayne, called the “Platte Valley Stock Eanch,” in township 16 N., range 9 E., of Douglas county Neb. The mortgage was duly filed in the office of the county clerk of Douglas county, Neb., on October 1, 1887.
The statute of Nebraska authorizing the filing in the county clerk’s office was offered in evidence, and is as follows:
“Every mortgage, or conveyance intended to operate as a mortgage, of goods and chattels hereafter made which shall not be accompanied by an immediate delivery, and be followed by an actual and continued change of possession, of the things mortgaged, shall .be absolutely void as against the creditors of the mortgagor, and as against subsequent purchasers and mortgagors ' [mortgagees] in good faith, unless the mortgage, or a true copy thereof, shall be filed in the office of the county clerk of the county where the mortgagor executing the same resides, or, in case lie is a non-resident of the state, then in the office of the clerk of the county where the property mortgaged may be at the time of executing such mortgage; and such clerk shall indorse on such instrument or copy the time of receiving the same, and shall keep the same in his office for the inspection of all persons; and such mortgage or instrument may be so filed, although not acknowledged, and shall be valid as if the same were fully spread at large upon the records of the county.”
At the time the mortgage was assigned by Barker to Oorbett, the two horses in question, and also a horse known as “Dr. West,” were out of the state, in the possession of a man named Newbro, who had them in the trotting circuits for Mayne in the different states. They have never been returned to Nebraska, and were on the trotting circuit in Michigan at the time they were attached for the debts of Mayne.
On June 12, 1888, it is claimed, Mayne sold the horses to one John Riley, and gave Riley a bill of sale, subject to the chattel mortgage then held by Corbett; and Riley made an agreement, it is claimed, with Corbett to release the chattel mortgage on the horses by the payment of &1,000; and it was claimed on the trial that Riley had possession of the horses at the time they were attached. It also appears that on May 1, 1888, an agreement was entered into between Corbett and Mayne, by which Mayne acknowledged the validity of the claims for which the mortgage was given, and authorized Corbett to purchase them.
On the part of the defendant it was contended—
1. That the mortgage was fraudulent in fact.
2. That, even if not fraudulent in fact, it was void as. to those attaching creditors of Mayne, for the reason that it was not filed in Detroit or in Michigan.
3. That the bill of sale to Riley was nothing more than a mortgage, and a fraudulent one at that.
These were the issues which were presented to the court and jury. On the trial below, many of the questions raised were questions of fact, which, under the charge of the court, were fairly submitted to the jury for determination. Sixteen requests were presented .by defendant’s counsel to the court to give in charge to the jury, the most of which relate to the necessity of the refiling of the mortgage in this State. Some of those were covered by the general charge of the court, and others were not given and were refused..
The important question in the case arises under the defendant’s second point that the mortgage was not filed in this State, and many of the requests to charge were aimed at this point. The court in its charge to the jury, giving construction to the Nebraska statute relative to chattel mortgages, directed the jury that they must hold the chattel mortgage as fraudulent and void, as the property remained in the possession of the mortgagor, unless the plaintiff had shown by a preponderance of evidence that it was an honest security, and not taken with intent to hinder, delay, or defraud the creditors of Mayne; but if they found that the agreement of May 1, 1888, between Corbett and Mayne, by which Corbett was induced to purchase the mortgage, was executed in good faith, for the purpose of procuring Corbett to purchase the mortgage, then, though the mortgage was fraudulent in its inception as between Barker and Mayne, the mortgage as to Corbett would be valid, if Corbett, relying upon the representations made in the agreement, and acting in good faith, purchased it.
The court further in its charge, speaking of the Michigan statute relative to the filing of chattel mortgages, directed the jury that, though they found the mortgage valid in the hands of Corbett, yet, if he permitted the property to be brought into this State, it then became subject to the levy of the attachments in the hands of the sheriff, and the chattel mortgage would be no protection to the plaintiff, as the mortgage was not filed within this State; but -that, if the property was brought out of the state of Nebraska, and into the State of Michigan, without the knowledge or consent of Corbett, and as soon as he found that it had been brought out of that state, and into this, he took steps to reclaim it, then his rights as mortgagee would be preserved.
Upon the question of the rights of Mr. Riley under the bill of sale, the court directed the jury that if the bill of sale was made in good faith, and not with intent to hinder, delay, or defraud creditors, and that, acting under the conveyance, Riley took possession of the horses in this State, that would end the case, though the chattel mortgage was fraudulent and void as between Corbett and Mayne, as they could not be attached for the debts of Mayne, though the sheriff would -then be entitled to nominal damages. Substantially these are the material parts of the charge.
The jury, by their verdict, have found that the property was brought out of the state of Nebraska and into this State without the knowledge or consent of Corbett. The question is therefore presented whether this chattel mortgage can be held to protect the plaintiff's rights in the property, even though not filed within this State, by reason of the bringing of the property out of Nebraska and into this State without the knowledge or consent of tho mortgagee.
Our statute (section 6193, How. Stat.), like the Nebraska statute, provides that such conveyances shall be absolutely void as against the creditors of the mortgagor, and as against subsequent purchasers and mortgagees in good faith, unless filed, where there has been no delivery of the property to the mortgagee, and that followed by an actual and continued change of possession of the thing mortgaged. The filing, to be effective, must be in the town-clerk’s office, or city clerk of the city, or recorder of the city, having no officer known as ‘/city clerk,” where the mortgagor resides, ' except when the mortgagor is a non-resident of .the State, in which case the mortgage is to be filed in the clerk’s office where the property is. The relation between the mortgagor and mortgagee is that of debtor on one side and creditor on the other, secured by a lien upon the property of the debtor. The title to the property can only be divested by foreclosure or some act equivalent thereto.
It may be true that this mortgage lien was valid in Nebraska, and might have been enforced there as against creditors, or even purchasers in good faith. It is the duty of courts to extend the principles of comity to our sister states, and to recognize generally the existence of liens under foreign statutes. But we are asked to give this mortgage priority of lien over the attachment levies. The recognition of the existence and validity of such liens by the foreign state is not to be confounded, however, with the giving them a superiority or priority over all other liens and rights justly acquired in this State merely because the former liens in the state where they first attached have there, by force of their statute, a. superiority or priority. This distinction was pointed out by Chief Justice Marshall in delivering the opinion of the Court in Harrison v. Sterry, 5 Cranch, 289. He there said:
“ The law of the place where a contract is made is, generally speaking, the law of the contract; i. e., it is the law by which the contract is expounded. But the right of priority forms no part of the contract itself. * It is extrinsic, and is rather a personal privilege, dependent on the law of the place where the property lies, and where the court sits which is to decide the cause.'”'’
There is no provision of our statute by which this mortgage at the time of its execution could have been filed in this State, and the Nebraska statute did not authorize it, and, even if it had, it would not have had any force beyond the sovereignty enacting it. The mortgagor then resided in Nebraska, and the property was situate there. It would be unreasonable to require a citizen of Michigan to take notice of the files and entries in Nebraska. These notices have no extraterritorial force. Montgomery v. Wight, 8 Mich. 143. The mortgage having been properly filed under the statutes of Nebraska, the lien thereby created would undoubtedly have been held by the courts of that state as prior to any lien which creditors might acquire, if the mortgage was not fraudulent in fact, though the mortgagor retained possession of the property mortgaged. But, by the terms of the mortgage, the mortgagee had a right at any time to take possession without notice, and Oorbett, by the assignment, acquired all the rights which Barker had. Instead of taking possession, he permitted the property to remain in the possession and under the control of the mortgagor, thereby clothing him with all the indicia of ownership. This ownership, however, was subject to the lien of the mortgage so long as the property was kept in Nebraska, as the filing of the mortgage there was notice of the lien. But, when the property is moved into a foreign state, the filing in Nebraska cannot be said to be notice to creditors of the mortgagor in such foreign state of the lien of the mortgage, as that statute has no extraterritorial force.
The court was in error in holding that, the property being brought out of Nebraska and into this State, with out the knowledge and consent of Mr. Corbett, such fact would give the mortgage lien priority over the attaching creditors. That question arose in Boydson v. Goodrich, 49 Mich. 66, and was expressly ruled the other way. In that case the plaintifE resided in Indiana. Warren, the mortgagor, also resided there, and the mortgage was given there. Without the knowledge or consent of the plaintiff, Warren, the mortgagor, brought the property into this State and sold it. In an action of replevin against the purchaser, it was said by this Court:
“ Counsel for plaintiff argues that the rules of state comity are against the defendant, and give the foreign transaction preference. ' But the law seems to be settled otherwise in Montgomery v. Wight, 8 Mich. 143. * * * The plaintiff allowed the mortgagor to retain possession, and to appear to the world as well authorized to convey an unincumbered title, and no means of information were provided in this State to impeach this appearance.”
In the present case it appears from the very terms of the mortgage that Mr. Corbett had it in his power to protect himself by taking possession of the mortgaged property. This he failed to do, but permitted the property to remain in the possession of the mortgagor, relying upon the filing of his mortgage as notice, under the Nebraska statute, sufficient to protect his lien. It can have no such effect here as against the creditors of the mortgagor, and the court should so have instructed the jury. We find no error in the other portions of the charge. We need not discuss the other questions raised.
The judgment must be reversed, with costs.
The other Justices concurred. | [
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] |
Per Curiam.
Plaintiff appeals as of right from a judgment of the circuit court entered in his favor in the amount of $45,000 plus interest accruing from the filing date of plaintiffs complaint, together with applicable costs. We affirm in part and reverse in part and remand this case to the trial court for further proceedings consistent with this opinion.
This case arises out of defendant’s failure to deliver fifteen percent of its existing shares of stock pursuant to a January 28, 1980, agreement with plaintiff.
In late 1978 or early 1979, Curtis Brown and his son, Mark, incorporated defendant, which at that time was a small stamping business located in Holland, Michigan. At that time, plaintiff was operating as a manufacturer’s representative for several companies in Michigan.
In early 1979, Brown discussed with plaintiff the possibility of plaintiff serving as a manufacturer’s representative for defendant. In late summer or early fall 1979, plaintiff began serving as a manufacturer’s representative for defendant, even though the parties were still uncertain as to the actual arrangement regarding plaintiffs compensation for serving in that capacity for defendant.
On or about January 28, 1980, the parties reached an agreement as to the arrangement under which plaintiff would serve as a manufacturer’s representative for defendant. On February 12, 1980, the parties signed a letter confirming the terms of their agreement. According to the agreement, plaintiff was to receive a "three percent sales commission on accounts listed or developed in the future.” The parties also agreed that defendant would transfer ten percent of its existing stock ownership to plaintiff in exchange for plaintiffs contribution of particular pieces of equipment. The agreement further called for defendant’s transfer of five percent of its stock owner ship as of April 1, 1980, in exchange for a $5,000 cash payment by plaintiff.
In March, 1980, plaintiff paid the $5,000 necessary to receive the additional five percent of defendant’s existing stock. However, defendant did not transfer any of its stock to plaintiff.
While serving as a manufacturer’s representative for defendant, and with Brown’s knowledge, plaintiff continued to represent other manufacturers. However, on January 31, 1983, Brown wrote a letter to plaintiff informing him that defendant was terminating him as a manufacturer’s representative. The letter stated that the decision to terminate plaintiff’s relationship as defendant’s manufacturer’s representative was a result of plaintiff’s representation of both defendant and one of defendant’s direct competitors.
On March 15, 1983, Brown again wrote to plaintiff and informed him that plaintiff’s ownership interest in defendant had terminated because of plaintiff’s representation of both defendant and the competitor. The letter further stated that defendant had determined the value of plaintiff’s ownership interest to be $22,500, plus the return of a particular piece of equipment contributed by plaintiff with the value of $2,500. Along with the letter, Brown enclosed a check for $11,275 and informed plaintiff that defendant would pay the balance plus ten percent interest within one year.
Plaintiff commenced this action in Oakland Circuit Court, but venue was transferred to Ottawa Circuit Court.
During trial, the parties disputed the proper measure of plaintiff’s damages. Plaintiff alleged that his damages caused by defendant’s failure to deliver the fifteen percent shares of outstanding stock were to be measured by the value of defendant’s stock at the time of trial. Defendant, on the other hand, argued that plaintiffs damages were to be measured by the value of defendant’s stock as of the date defendant terminated plaintiff as a manufacturer’s representative.
The jury was requested to determine the value of fifteen percent of defendant’s outstanding stock both at the time of trial and as of January 31, 1983. The jury valued the stock at $45,000 as of January 31, 1983, and at $180,000 as of December 9, 1988, the date of trial.
The trial court thereafter entered an opinion which stated that the proper measure of damages was the value of the stock at the time of plaintiffs termination as a manufacturer’s representative for defendant and that it would enter judgment in favor of plaintiff for $45,000, plus interest. Accordingly, the trial court thereafter entered judgment in favor of plaintiff for $45,000, plus interest.
i
Plaintiff first contends that the jury’s verdict in favor of defendant as to plaintiffs claim for post-termination sales commissions was erroneous and contrary to law and must be reversed. We disagree.
At trial, plaintiff requested that the jury award damages in the amount of a three percent commission on all sales and future sales occurring after plaintiff’s termination on defendant’s accounts which plaintiff had "developed” while serving as a manufacturer’s representative for defendant. Plaintiff’s request was premised on the theory that defendant had agreed to pay plaintiff a three percent commission, not merely on all sales procured, but on all accounts procured. However, the jury refused to award plaintiff any posttermination sales commissions and returned a verdict in favor of defendant on plaintiffs claim for posttermination sales commissions.
Plaintiff now contends that the jury’s verdict was erroneous and contrary to law and that he was entitled to posttermination sales commissions because Brown admitted that the contract called for plaintiff to be paid the three percent sales commission for all future sales from those accounts or customers procured by plaintiff while serving as defendant’s manufacturer’s representative.
Plaintiff relies on our Supreme Court’s decision in Reed v Kurdziel, 352 Mich 287, 293-295; 89 NW2d 479 (1958), in support of his claim that he is entitled to posttermination sales commissions. In Reed, our Supreme Court addressed the right of a sales agent to recover posttermination sales commissions:
An examination of the law with reference to commissions allowed agents or brokers seems to indicate that it is difficult to determine a set line of decisions, particularly with reference to the right of an agent with an exclusive agency to recover commissions on sales made where he is the procuring cause. However, when they are viewed as a whole and brought into proper focus, they disclose the law applicable to the question is well settled and that the seeming confusion results from the application of that law to the particular facts of the specific cases in question. 12 ALR2d 1360, 1363, states as follows:
"The relationship between agent or broker and principal being a contractual one, it is immediately apparent that whether an agent or broker employed to sell personalty on commission is entitled to commissions on sales made or consummated by his principal or by another agent depends upon the intention of the parties and the interpretation of the contract of employment, and that, as in other cases involving interpretation, all the circumstances must be considered. . . . This rule is recognized and stated in the American Law Institute, 2 Restatement, Agency, §449, Comment a.”
It would appear that underlying all the decisions is the basic principle of fair dealing, preventing a principal from unfairly taking the benefit of the agent’s or broker’s services without compensation and imposing upon the principal, regardless of the type of agency or contract, liability to the agent or broker for commissions for sales upon which the agent or broker was the procuring cause, notwithstanding the sales made have been consummated by the principal himself or some other agent. In Michigan, as well as in most jurisdictions, the agent is entitled to recover his commission whether or not he has personally concluded and completed the sale, it being sufficient if his efforts were the procuring cause of the sale. Reade v Haak, 147 Mich 42 [110 NW 130 (1907)]; Case v Rudolph Wurlitzer Co, 186 Mich 81 [152 NW 977 (1908)]; MacMillan v C & G Cooper Co, 249 Mich 594 [229 NW 593 (1930)]. In Michigan the rule goes further to provide if the authority of the agent has been cancelled by the principal, the agent would nevertheless be permitted to recover the commission if the agent was the procuring cause. Heaton v Edwards, 90 Mich 500 [51 NW 544 (1892)]; McGovern v Bennett, 146 Mich 558 [109 NW 1055 (1906)]; MacMillan v C & G Cooper Co,, supra.
Defendant argues that plaintiffs argument is without merit because the trial court adequately instructed the jury on plaintiff’s theory of recovery for posttermination sales commissions and the jury rejected plaintiffs claim. Defendant also argues that the principle set forth in Reed applies to a sales agent’s procurement of sales, not customers.
Generally, when the terms of a contract are contested, the actual terms of the contract are to be determined by the jury even when the evidence of the contract terms is uncontradicted. Guilmet v Campbell, 385 Mich 57, 69; 188 NW2d 601 (1971). This Court will not set aside a jury’s verdict if there is competent evidence to support the jury’s findings. Hodgins v The Times Herald Co, 169 Mich App 245, 257-258; 425 NW2d 522 (1988), lv den 432 Mich 895 (1989).
The trial court gave both initial and supplemental instructions setting forth plaintiffs theory of recovery for posttermination sales commissions and adequately instructed the jury concerning plaintiffs theory of recovery.
Brown testified that defendant’s agreement with plaintiff called for a three percent sales commission to be paid for all sales on defendant’s accounts procured by plaintiff. However, he also maintained that that agreement was to govern while plaintiff remained as a manufacturer’s representative for defendant. Accordingly, there is competent evidence to support the jury’s finding that plaintiff is not entitled to posttermination sales commissions. There is also competent evidence contained in the record from which the jury could have inferred that plaintiff committed the first substantial breach of the contract and that defendant was therefore not required to perform further under the contract.
ii
Plaintiff also contends that the trial court applied an improper standard for measuring the damages caused by defendant’s failure to deliver fifteen percent of its existing stock and erred in awarding plaintiff damages in the amount of the value of the stock at the time of plaintiffs termination as defendant’s manufacturer’s representative.
In awarding damages to plaintiff caused by defendant’s failure to deliver the stock, the trial court found the proper measure of plaintiff’s damages to be the value of defendant’s shares of stock on the date of plaintiff’s termination as a manufacturer’s representative for defendant. Plaintiff contends that the proper measure of his damages is the value of defendant’s stock at the time of trial. In support of his position, plaintiff relies on Vos v Child, Hulswit & Co, 171 Mich 595; 137 NW 209 (1912).
In Vos, our Supreme Court addressed the proper measure of damages for a breach of a contract for the sale of stock. The plaintiffs sued to recover damages for the defendant’s failure to deliver certain shares of publicly traded stock for which the plaintiff had previously paid. The day after the plaintiff in Vos paid for the stock, the price of the stock advanced. The defendant would not deliver the stock to the plaintiff until the plaintiff paid the advance in the stock’s market price. The plaintiff refused to make any additional payment and requested the return of his purchase money. The trial court entered a directed verdict in favor of the plaintiff in an amount reflective of the advance in market price, but reasoned that, because the plaintiff had a duty to mitigate his damages, the plaintiff should have purchased the stock from the defendant for the advance price and then sued to recover the difference between the price paid and the contract price. Vos, supra, p 596.
On appeal, our Supreme Court determined that the proper measure of the damages caused by the defendant’s failure to deliver the stock was the highest value which the stock had attained during a reasonable time after the defendant’s breach. Our Supreme Court stated:
Plaintiff concedes that the court gave the true rule of damages for a failure to deliver personal property, but he insists that that rule is not the proper one to apply where the breach counted upon is a failure to deliver stock; but in such case the plaintiff is entitled to a reasonable time after the breach to purchase the stock himself, and that he is entitled as damages to the difference between the contract price and the highest value of the stock during such reasonable time. There is much support in favor of this contention. In several of the States the ordinary rule of damages for a failure to deliver personal property seems to have been enlarged in the case of a failure to deliver stocks in accordance with the contract. This exception to the general rule and the reasons which gave rise to it are well stated by Mr. Justice Sanborn in McKinley v Williams, 74 F 94; 20 CCA 312 [CA 8, 1896)]:
"Compensation is the general standard for the measure of damages. It is the actual and proximate loss caused by the wrong for which the plaintiff is entitled to indemnity. Hence the general rule is that the measure of damages for the failure to deliver property according to the contract, or for its conversion, is the value of the property at the time it was to be delivered, or at the time it was converted. This general rule, however, has been found inadequate to furnish just indemnity for the losses occasioned by the conversion of, or the wrongful failure to deliver, stocks and other properties of like character, the values of which are subject to frequent and wide fluctuations. The general rule gives to the agent, broker, or person in possession of such property that is really valuable, frequent opportunity to convert it to his own use, at a time when its market price is far below its actual value, and thus offers a prize for the breach of duty, while it often leaves the injured party remediless. To prevent this injustice, and to throw the chance of this loss upon him who inflicts, rather than upon him who suffers, the wrong, an exception has been ingrafted upon this general rule. It is founded upon the proposition that he who deprives another of the possession and control of such property ought to assume the risk of the fluctuations in its market value, until its owner, by purchase or sale, can restore himself to the condition in which he would have been if his property had not been wrongfully taken. It rests upon the proposition that the risk of the market during this time should be assumed by the perpetrator, not by the victim, of the wrong. The exception is that the measure of damages for the failure to sell or to deliver stocks and like speculative property, or for the conversion thereof, is the highest market value which the property attains between the time when the contract required its sale or delivery, or the time of its conversion, and the expiration of a reasonable time, to enable the owner to put himself in statu quo, after notice to him of the failure to comply with the contract or of the conversion. . . . Counsel for the appellant argues that this rule should not be applied to this case, because the stock which the appellant obtained never became the property of the appellee, and hence could not have been converted. The answer is that this measure of damages is as applicable to actions upon contracts as to those upon torts. Barnes v Brown, 130 NY 372, 382; 29 NE 760 [1892]; Maynard v Pease, 99 Mass 555 [1868].” [Vos, supra, pp 596-598.]
In awarding plaintiff damages caused by defendant’s failure to deliver fifteen percent of its existing stock, the trial court here distinguished our Supreme Court’s decision in Vos and found that, if there is no market source available to replace the stock, the rationale of the exception enunciated in Vos breaks down and there is no justification for deviating from the general rule that damages are to be measured as of the date of breach. The trial court held that the rule in Vos does not apply to shares of stock of a closely held corporation and that the rule applies only to shares of stock read ily available from the securities market. The court concluded that plaintiff is entitled to a judgment equal to the value of the stock as of January 31, 1983, the date of the breach of contract. However, under Vos, plaintiff may recover the stock’s highest value during a reasonable time following defendant’s failure to deliver the stock. This exception to the general rule of law has also been applied in another jurisdiction even where the stock is that of a closely held corporation. Jones v Nat’l Chautauqua Co Bank of Jamestown, 272 AD 521; 74 NYS2d 498 (1947).
Although a closely held corporation’s stock is not publicly traded, and no established market value exists to assist the courts in valuing a closely held corporation’s stock, the courts generally recognize that a closely held corporation’s stock has an ascertainable value. Olsher v Olsher, 78 111 App 3d 627; 397 NE2d 488 (1979). Although a closely held corporation’s stock is not subject to daily fluctuations in price as is publicly traded stock, the record here indicates that defendant’s stock may have been subject to great fluctuations in value.
The jury here was requested to make a determination of the value of defendant’s stock at the time defendant terminated plaintiff as its manufacturer’s representative and at the time of trial, but it was never required to determine the value of the stock within a reasonable period of time after the breach. Accordingly, we reverse the trial court’s judgment and remand this case to the trial court so that, consistent with Vos, a jury may determine the value of defendant’s stock within a reasonable period of time after the breach.
Affirmed in part, reversed in part, and remanded to the trial court for further proceedings consistent with this opinion. We do not retain jurisdiction. | [
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Per Curiam.
Defendants appeal by leave granted from an April 24, 1989, opinion and order of the Workers’ Compensation Appeal Board. We affirm in part and reverse in part.
Plaintiff was injured in 1975 and began receiving sickness and accident and extended disability benefits through defendant Chrysler Corporation’s group insurer, defendant Aetna Casualty & Surety Company. In 1981, the wcab awarded plaintiff workers’ compensation benefits. Chrysler paid plaintiff past due benefits, weekly compensation and supplemental benefits under MCL 418.352; MSA 17.237(352), plus five percent interest on the weekly compensation. Plaintiff refused, however, to reimburse Aetna in accordance with alleged assignment agreements.
In 1982, plaintiff petitioned for a determination of rights. He contended that he was entitled to twelve percent interest, not five percent, plus interest on the § 352 supplemental benefits. He also claimed that Aetna was not entitled to reimbursement and that, should Aetna receive reimbursement, plaintiff’s attorney must be paid an attorney fee out of it. Aetna intervened seeking reimbursement, opposing payment of an attorney fee.
At a hearing before the referee, plaintiff denied signing an application for sickness and accident benefits on a form containing an assignment in favor of Aetna. He admitted signing the application and assignment covering extended disability benefits. He also admitted receiving sickness and accident as well as disability benefits.
The wcab held that the assignment relating to disability benefits was enforceable. However, as plaintiff denied signing the sickness and accident application and as defendants provided no contrary evidence, the alleged assignment was not enforced. The board declined to apply equitable principles. It agreed to awárd plaintiff interest on §352 supplemental benefits. Lastly, it awarded plaintiff attorney fees out of the reimbursement he must make to Aetna under the disability assignment. MCL 418.821(2); MSA 17.237(821X2).
On appeal, defendants argue the wcab erred in refusing to enforce the sickness and accident assignment and in awarding plaintiff’s attorney a fee out of the extended disability reimbursement. Chrysler also claims the board erred in awarding interest on the accrued supplemental benefits.
Section 352 of the Workers’ Disability Compensation Act (wdca) provides a supplemental benefit designed to keep disability benefits in pace with inflation. Weekly compensation benefits are increased by a maximum of five percent of the adjusted average weekly wage increase differential, compounded for each calendar year in the adjustment period. MCL 418.352(1); MSA 17.237(352X1), MCL 418.355; MSA 17.237(355). The supplemental payment is not an obligation of the employer or the insurance carrier, nor of the Second Injury Fund or the Self-Insurers’ Security Fund. These groups are the disbursement agents. They are reimbursed either through a single business tax credit or by a refund from the Compensation Supplement Fund created by MCL 418.391; MSA 17.237(391). Each of these forms of reimbursement represents monies from the state treasury. MCL 418.352, subds (8), (10) and (11); MSA 17.237(352), subds (8), (10) and (11).
Claims for reimbursement from the Compensation Supplement Fund must be made within three months after the right to reimbursement first accrues. Payments from the fund are made every quarter without interest. MCL 418.391(7); MSA 17.237(391X7). Thus, because the supplement represents funds from the state treasury, directly or indirectly, the Legislature has elected not to provide for the payment of interest when the fund makes reimbursement.
The interest which is imposed upon past due workers’ compensation benefits is not a penalty; it is designed to pay the employee for lost use of the funds to which he was entitled and from which the employer benefitted while the claim was pending. McCaslin v General Motors Corp, 133 Mich App 782, 787-788; 349 NW2d 544 (1984), lv den 419 Mich 945 (1984).
Chrysler argues that awarding interest on supplemental benefits would amount to imposing a penalty on the employer. The state treasury, not the employer, benefits from use of the money while the claim is pending. However, if the employer is obligated to pay interest on the supplemental benefits, it cannot by law recover that interest from the treasury.
Plaintiff claims that if the employer is not liable for interest on the supplemental benefits, it could arbitrarily refuse to pay the benefit without the fear of having to pay interest. However, there is no incentive for the employer to refuse to pay supplemental benefits, since they are reimbursed by the state.
Under the statute, the employer must pay interest on unpaid "weekly compensation.” MCL 418.801(6); MSA 17.237(801X6). The employee is not entitled to interest on medical benefits, which is something other than weekly compensation. Brown v Eller Outdoor Advertising Co, 139 Mich App 7, 14; 360 NW2d 322 (1984), lv den 424 Mich 902 (1986). The Supreme Court has held that the phrase "weekly compensation” as used in § 352(1) of the wdca refers only to the amount of the employer’s obligation. Kincaid v Detroit Mutual Ins Co, 431 Mich 426, 441-442; 429 NW2d 595 (1988). It does not include the differential benefit payable weekly by the Second Injury Fund for total and permanent disability. Kincaid, supra, MCL 418.521(2); MSA 17.237(521)(2). Differential benefits have a reimbursement procedure quite similar to the procedure for § 352 supplemental benefits.
Thus, extending the Supreme Court’s definition of weekly compensation to § 801, weekly compensation benefits do not include supplemental benefits, as they are an obligation of the state, not the employer. See also Maglothin v Tryco Steel Corp, 137 Mich App 640, 646; 357 NW2d 914 (1984). Further, the theory that an interest award in a workers’ compensation case is based on a contract of employment does not justify the imposition of interest on supplemental benefits. The supplement is an obligation of the state. No contract of employment exists between the employee and the state. Brown, 14-15. Plaintiff is not entitled to interest on his § 352 supplemental benefits.
Next, defendants claim the board erred in refusing to enforce the assignment in exchange for payment of sickness and accident benefits. The board decided that defendants had not proven the existence of a valid assignment. This finding of fact is supported by the record and, thus, is conclusive. Coleman v General Motors Corp, 166 Mich App 784, 789; 421 NW2d 295 (1988). However the board erred in refusing to apply equitable principles.
While the wcab has no equitable jurisdiction, it is well established that it may apply equitable principles in appropriate instances to further the purposes of the act. Solo v Chrysler Corp (On Rehearing), 408 Mich 345; 292 NW2d 438 (1980); Fuchs v General Motors Corp, 118 Mich App 547; 325 NW2d 489 (1982).
A circuit court may have concurrent jurisdiction over certain issues, particularly those involving determination of rights arising out of an entirely different relationship than that of employer-employee. Modeen v Consumers Power Co, 384 Mich 354, 360-361; 184 NW2d 197 (1971); Bonney v Citizens’ Mutual Automobile Ins Co, 333 Mich 435, 440; 53 NW2d 321 (1952). However, where the employer-employee relationship is substantially involved, the jurisdiction of the bureau is exclusive. Michigan Property & Casualty Guaranty Ass’n v Checker Cab Co, 138 Mich App 180, 183; 360 NW2d 168 (1984).
In this case, the relationship of employer-employee is at the heart of Aetna’s right of reimbursement. Aetna provided sickness and accident benefits on behalf of the employer, which was later held to be obligated to pay workers’ compensation benefits instead. Regardless of whether plaintiff filled out the application for sickness and accident benefits and signed the form containing the assignment clause, he received the benefits. Since those benfits had already been paid to him by Aetna, the double payment, in equity and good conscience, belongs to Aetna. He is obligated, in an action for money received, to repay that money even absent an express promise or privity between the parties. Hoyt v Paw Paw Grape Juice Co, 158 Mich 619; 123 NW 529 (1909); Beardslee v Horton, 3 Mich 560 (1855). An action for money received is one of assumpsit. It is, in many cases, a substitute for a bill in equity and is governed by equitable principles. Atkinson v Scott, 36 Mich 18 (1877).
Since the remedy sought by Aetna, repayment, is measured in money and is not a form of equitable relief, the controversy is properly resolved by the appeal board. To compel Aetna to seek a judicial rather than an administrative remedy would multiply litigation to no purpose. The appeal board is perfectly competent to address issues of workers’ compensation reimbursement and obligation, without parceling out portions of them to the circuit and district courts. Accordingly, the appeal board erred in refusing to recognize Aetna’s right to reimbursement of sickness and accident benefits, irrespective of the validity of plaintiffs signature on the assignment form.
Lastly, we conclude that the board properly awarded plaintiffs attorney a fee out of the reimbursement due Aetna. Normally the plaintiffs attorney is entitled to a fee in conjunction with any reimbursement paid to a group insurer pursuant to an assignment. MCL 418.821(2); MSA 17.237(821)(2). However defendants argue that a fee is not justified, because plaintiff resisted enforcement of the assignments and defendants have been forced to retain counsel to obtain reimbursement.
Section 821(2) does not contain a clause stating that the attorney fee is forfeited if plaintiff contests the assignment. It provides that the insurer shall pay a portion of the fees of the attorney who secured the workers’ compensation recovery. We interpret this to mean fees incurred in obtaining the workers’ compensation award, not fees in curred in contesting reimbursement. Moreover, in the interest of equity, Aetna is also obligated to pay a portion of the attorney fees out of its reimbursement for sickness and accident benefits.
Affirmed in part; reversed in part.
We note that, where an employee receives benefits “caused to be paid” by the employer, the employer is entitled to credit for these benefits when fixing workers’ compensation. A reimbursement- agreement is not necessary. MCL 418.811; MSA 17.237(811); Russell v General Motors Corp, 172 Mich App 627, 633; 432 NW2d 738 (1988), lv den 433 Mich 872 (1989). In this case, it is unclear from the record whether these were employer-provided sickness and accident benefits. | [
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Per Curiam.
The present case involves two parties who were victimized by the Diamond-Obie mortgage scheme. Diamond Mortgage, ostensibly as a loan broker, arranged for a mortgage on plaintiffs’ property, which was in turn funded by defendants as investors. Although Diamond Mortgage failed to disburse the funds to plaintiffs, Diamond assigned the mortgage and note to defendants for the sum of $26,500. Since plaintiffs never received any money, plaintiffs sued to quiet title and remove the mortgage. Defendants claim status as holders in due course, and claim they are entitled to payment on the mortgage and note regardless of Diamond’s fraudulent actions. Upon cross-motions for summary disposition, the circuit court ruled from the bench on August 3, 1988, that plaintiffs could, and did, rescind the transaction under the federal Truth in Lending Act (tila), 15 USC 1601 et seq. Defendants appeal as of right the order granting plaintiffs’ motion for summary disposition and denying defendants’ motion for summary disposition.
In 1986, plaintiffs decided to borrow money from Diamond Mortgage in order to pay the balance on their land contract, as well as pay for home improvements. Plaintiffs met with a representative at Diamond’s office in February, 1986. At a second meeting, plaintiffs signed a note and mortgage along with a loan application. At this meeting, plaintiffs each received one copy of a "Notice of Right to Cancel.” Plaintiffs claim they were told that the documents they signed were only preliminary documents and that they would not sign the final binding papers until they received the money.
On March 28, 1986, Diamond assigned the note and mortgage to defendants in exchange for $26,-500. Plaintiffs never received any disbursements from their loan and did not learn of the assign ment until approximately March 16, 1987. On or about that date, defendants wrote to plaintiffs citing the mortgage and note and demanding payment. Plaintiffs filed their complaint on July 9, 1987, naming only defendants, but alleging violations by Diamond Mortgage of the tila and Michigan Consumer Protection Act, MCL 445.901 et. seq.; MSA 19.418(1) et seq. Plaintiffs’ complaint sought injunctive and declaratory relief which would, in sum, void the entire transaction, mortgage, note, and other documents. Plaintiffs also requested various fees and costs authorized by federal and state statutes. Plaintiffs specifically elected to rescind the transaction pursuant to the TILA.
First, we find that plaintiffs were entitled to rescind the mortgage contract under the tila and Regulation z, 12 CFR 226.1 et seq., 15 USC Foil 1700 (Reg z). The tila and Reg z provide for rescission until three days after the latest of the following events: (1) consummation of the transaction, (2) delivery of two copies to each borrower of the notice of right to cancel, or (3) delivery of all "material disclosures.” We find that plaintiffs were entitled to rescind the transaction because Diamond Mortgage failed to deliver two copies to each borrower of the notice of right to cancel.
This case is virtually identical to a federal district court case involving two other parties victimized by the Diamond-Obie mortgage scheme. In Stone v Mehlberg, 728 F Supp 1341 (WD Mich, 1989), the federal district court granted summary disposition to plaintiffs who had rescinded their mortgage transaction. In Stone, as in the present case, the trial court found that each plaintiff had not received two copies of their right to cancel as required under 15 USC 1635(a), 12 CFR 226.23(b). As the Stone court held, this requirement is not a mere technicality and requires that two copies be provided to each spouse since both had an ownership interest in the residence. Stone, 1353. "The fact that joint obligors may be husband and wife is irrelevant. Spouses are no more interchangeable under the tila’s rescission provisions than any other group of persons.” Id. Where the notice of right to cancel is not delivered, plaintiffs’ right to rescind continues, subject to the statute of limitations. Rudisell v Fifth Third Bank, 622 F2d 243, 247 (CA 6, 1980). The Stone court went on to note that plaintiffs were not prevented from rescinding their mortgage agreement because of defendants’ status as holders in due course, holding the tila’s rescission remedy preempts the holder in due course doctrine. Stone, supra at 1348.
We choose to follow the holding in Stone and find that the trial court did not err in allowing plaintiffs to rescind their mortgage transaction. This Court follows Sixth Circuit cases on federal matters. Dundee v Puerto Rico Marine Management, Inc, 147 Mich App 254, 258; 383 NW2d 176 (1985), lv den 425 Mich 858 (1986). Therefore, the trial court properly granted plaintiffs’ motion for summary disposition. Dumas v Auto Club Ins Ass’n, 168 Mich App 619, 626; 425 NW2d 480 (1988).
We are not persuaded by defendants’ contention that the transaction, as a "residential mortgage transaction,” is exempt from the rescission provisions of the tila and Reg z under 15 USC 1635(e) (1), 12 CFR 226.23(f)(1). Official staff commentary to 12 CFR 226.2(a)(24) specifically sets forth that the "residential mortgage transaction” does not include the financing of a balloon payment due under a land contract sale as is the situation in the present case.
Considering our disposition on the above issue, we do not address the question whether there was a failure to deliver all "material disclosures” or whether the transaction was "consummated” under the tila and Reg z sufficient to extend the period of rescission.
Second, defendants argue that, even if rescission is proper, plaintiffs owe defendants restitution. We disagree. 15 USC 1635(a) and 12 CFR 223.26(a)(1) allow the borrower to rescind "the transaction” including pendent documents such as the promissory note. 15 USC 1635(b) provides that the obligor shall tender the property received back to the creditor. This section "clearly contemplates a return to the status quo ante and thus the extinguishment of the underlying obligation.” Stone, supra at 1348. Further, rescission is an equitable remedy within the discretion of the court. Rudisell, supra at 254. We find that the trial court did not abuse its discretion in ordering rescission without restitution where plaintiffs had not received any money from Diamond Mortgage.
Affirmed. | [
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Cahill, J.
This is a case arising upon a delinquent tax petition filed by the Auditor General in Wayne county under the tax law of 1889 (Act No. 195; 3 How. Stat. p. 2936).
The respondent, Baker, is the owner of 4=5 lots situated in the city of Detroit. These lots were separately entered on the assessment roll. The tax record referred to in the petition of the Auditor General does not state the names of the owners of the various parcels of land. The names of the owners were ascertained by the clerk of the Wayne circuit court by inquiry at the abstract office. The clerk issued separate subpoenas, addressed to the respondent, for each lot or parcel of land assessed, and delivered the same to the sheriff. The sheriff served 4=5 subpoenas upon the respondent, and the cost of the issuance and service of these subpoenas was added upon the tax record to the amount of the taxes, interest, and other charges against each parcel of land. Each subpoena described a particular lot, respecting which it purported to be issued.
The respondent tendered the county treasurer the amount specified in the petition as due for unpaid taxes, interest, and charges, and in addition the legal fees for issuing and serving one subpoena. This tender was refused because it did not include fees for issuing and serving all of the subpoenas. A formal objection to the allowance of these items of cost was filed in the circuit court, and on a hearing there the court held that the tender was sufficient; that the issuing of more than one subpoena to the same defendant was unauthorized, and decreed accordingly. From this decree the State appeals.
The question involved, owing to the incompleteness of the statutory direction, is not without difficulty. The statute does not require the subpoena to describe the land supposed to belong to the delinquent tax-payer on account of which it is issued, although there are important reasons why it should do so. It provides no means •of ascertaining the name or place of residence of the delinquent tax-payer. Yet, section 53 provides that,—
“After the filing of said .petition, the county clerk, acting as register in chancery, shall issue a subpc&na directed to each delinquent tax-paper who is a resident of this State,” etc.
We held in the case of Sherman v. Board of Supervisors, ante, 108, that under the present statute there was no authority in the clerk to incur any expense in ascertaining who were the owners of the lands on the tax record. It is urged by. counsel for the State that these proceedings contemplate the establishment of a lien upon each parcel ■of land for the particular tax and charges against it; that it is the parcels of land'that are delinquent, and not the owner; that the proceeding is, in effect, a separate suit against each parcel, as to each of which the owner may make a separate and distinct defense, and as to each of which the court may make a separate and distinct decree; that, by analogy to other suits, a subpoena should issue as to each of such parcels, whether the person upon whom service is to be made be the same in any two of them or not. In support of this view, we are referred to the proviso in section 53, which reads as follows:
“Provided, That when two or more subpoenas are served at the same time or place, upon different [delinquent] tax-payers, only one travel fee shall be charged and paid.”
A comparison of the original printed bill, as it passed the Senate and House, with the enrolled copy on file in the office of the Secretary of State, shows that the word “delinquent,” printed in-the Session Laws in brackets, was the word used in the original bill, and that the word “different” was an error in enrollment. Head in this way, the proviso- seems to contemplate the service of two or more subpoenas upon the same delinquent in case he is the owner of more than one jearcel of land.
But, however plausible these arguments may be, they must give way to the more substantial ones that are opposed to an interpretation so needlessly oppressive to the tax-payer. The purpose of these proceedings is not to punish the delinquent tax-payer, nor to enrich the officers charged with conducting them, but to collect the public revenues. This object is not subserved by adding to the original burden excessive and needless costs and expenses. The aggregate of the taxes, including interest, charged against these 45 lots on the Auditor General's petition, is $22.37. To this amount the Auditor General added $1 to each description for costs of advertising and other expenses of sale, making $45. The clerk's and sheriff's fees here in controversy amount to $66.35, so that if counsel for the State is right in his contention, before the State can get its $22.37 of revenue, the owner of the land must be able to pay in addition thereto $111.-35, or n,early five times as much, in costs and expenses. No merely doubtful interpretation of the statute will justify us in sustaining such a result. In the performance of his duty under the law, it would have been much less trouble for the clerk to have issued one subpoena containing a description of all respondent's lands, as they appeared in the tax record, and it would have answered the same purpose as a notice of the proceedings.
So far as the fees of the clerk are conceráed, we intimated a doubt in Sherman v. Board of Supervisors, ante, 108, whether they were properly taxable again'st the land, the amount of such fees not having been fixed by section 53, and section 100 having expressly left the question of the clerk's compensation to be determined by the board of supervisors. We only say here that the clerk was certainly not entitled to fees for issuing more than one subpoena.
The same rule must apply to the sheriff. It is said that he was not to blame; that the writs came to him fair ■on their face, and his only duty was to serve them. Granting that, it does not follow that he can call upon the respondent to pay him his fees. The respondent is in no way responsible for the issuing of the unnecessary writs, and is no more liable to pay the sheriff for the unnecessary trouble he has taken than is any other person.
Respondent claims that no. decree should have been rendered against his lands for any sum, as he had tendered before the hearing the amount which the court found to be due; but the respondent has not appealed, -and we cannot review the correctness of that practice at his request here.
The court below awarded the costs to the appellee. We find no warrant for this in the tax law. The only provision relating to costs is at the close of section 56, which authorizes the court to. decree costs against a person contesting a tax, if the tax is adjudged valid. There is no provision for decreeing costs against the State. As costs are purely statutory, we must hold- that the powei conferred on the court by section 56 is exclusive of any other.
The decree of the court below, except as to costs, is affirmed, and the respondent will be allowed to release his lands from the decree by the payment of the sum therein adjudged tó be due.
The other Justices concurred. | [
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Champlin, C. J.
By Act No. 388, Local Acts of 1889, the commissioners of parks and boulevards of Detroit were created; the act providing that such commissioners should be appointed by the mayor with the consent of the common council of the city of Detroit. By section 15 of this act, the commissioners were authorized, with the approval of the common council, to enter into contracts for the purchase and conveyance to the city of lands, or, with the consent of the common council, they might acquire lands by the legal proceedings provided for in the act. In pursuance of this section, the common council of the city of Detroit, on April 23, 1890, adopted the following resolution:
“ Resolved, that the commissioners of parks and boulevards be and are hereby authorized to enter into contracts with the owners of lands lying within the route of the boulevard, for the purchase of the same, subject to the approval of the common council; and if said commissioners shall, in any cases, be unable to make favorable contract or contracts, then said commissioners be authorized to cause to be instituted the necessary proceedings to condemn the lands for right of way in such cases.”
Being unable to make favorable contracts with certain parties, the commissioners took the necessary proceedings to acquire the lands by condemnation for the right of way of the boulevard, and obtained an award in favor of the improvement, and fixing the amount of damages, including the expenses, at $3,491. The verdict of the jury being confirmed, the commissioners reported their proceedings to the common council, and requested that funds be provided for the payment of the amount awarded and expenses. This communication was referred to a committee, who reported to the common council that the contingent fund was exhausted, and it was necessary to issue bonds, and accompanied their report with a resolution as follows:
“ Resolved, that in order to raise the necessary funds to pay the amounts awarded by the jury in certain proceedings taken in the recorder’s court to condemn certain lands of Fredericka. Kuehle and Margaret Klein, together with the costs, the comptroller be, and he is hereby, directed to advertise for five days for proposals for $3,500 of park and boulevard bonds, the same to bear interest at four per cent., to be of $500 each, and payable in 20 years.” ■
The resolution was adopted by the council, and the same was approved by the mayor. The city comptroller now refuses to advertise for proposals, claiming that, before the bonds can lawfully be issued, the consent of the board of estimates of said city must be obtained. The commissioners applied to this Court for a mandamus to compel him to advertise, as required, and this Court granted an order upon him to show cause, to which he has made the following response:
“ He admits that said relators have applied to him requesting him to advertise for proposals for the purchase of said bonds mentioned in the petition and order to show cause herein; but that respondent has refused to advertise, as requested, because said issue of bonds was not submitted to, or authorized by, the board of estimates of the city of Detroit, as required by law.”
Section 15 of the act mentioned, after providing for conferring authority upon the commissioners, with the consent of the council, to contract for the purchase, or, failing in that, for the condemnation, of lands, continues as follows:
“And, upon such acquisitions being made, to cause the proper conveyances to be made and recorded; and the purchase pri&e thereof, as well. as for any compensation to be paid for any lands which may be taken or condemned by proceedings taken therefor, as hereinafter provided, may be paid from the contingent fund of said city, or may be raised, if the common council shall so determine, by the issue of bonds, to be known as ‘park and boulevard bonds/ and which shall be signed, numbered, recorded, sold, and issued in like manner as Detroit sewer bonds are, by the city charter, required and authorized to be made and issued; and the moneys so paid or raised shall be exclusive of the amounts raised for maintenance and improvement, as hereinbefore provided.”
The objection of the comptroller that the issue of these bonds was not authorized by the board of estimates is based upon an act of the Legislature passed in 1887 (Act No. 488, Local Acts of 1887), establishing the board of estimates, and, among other things, providing as follows:
Chapter 8, § 1. “Before any taxes shall be levied for the purposes or any of the funds into which the revenues and moneys of the city may be divided, the comptroller shall present to the common council, in writing, his estimates of the amount of taxes which, in his opinion, it may be necessary to raise for the ensuing year, for the purpose [purposes] of each of said funds; and also an estimate of the entire proposed expenditures for said year, whether the same is to be raised by tax, by loan, or by special assessment, which estimates shall be published in the official paper of the city. The comptroller shall, at the same time, give to the common council any information in his power or which they may request concerning the finances of said city. The common council may revise or alter said estimates, but not so as to exceed the aggregate taxes authorized by law to be levied, and, when such estimates shall be finally adopted by them, the same shall be transmitted by the clerk of said board to the board of estimates. The common council shall so alter, revise, and adopt said estimates on or before the fifth day of April in each year.”
“Sec. 4. Before any moneys shall be raised, or taxes levied and collected, for the purposes of the several funds mentioned in the charter of the city of Detroit, and acts amendatory thereof, except interest and sinking funds for the purpose for which moneys are required to be raised by other acts relating to said city, which require estimates for taxes to be submitted by the city comptroller or other officers and boards, the estimates of the amount of moneys required for such funds or purposes by tax shall be submitted to said board of estimates, and, before any bonds shall be issued, said issue shall be authorized by said board of estimates. The estimates for the general city taxes shall be acted upon by the common council, as provided by law, and shall be submitted to said board of estimates in time to be considered by the board on or prior to said 5th day of April. Said board shall carefully consider all estimates hereby required by this act to be submitted to it of moneys to be raised as aforesaid, and shall approve or disapprove of the same. It may decrease the amount to be raised, but shall not increase the same. It may authorize the issuing of bonds in the same manner, and in the same cases, as such citizens’ meetings might authorize the same. A majority of all the members elect of said board shall be required to approve of any such estimates for the raising of taxes, or any part thereof, or to authorize the issue of'any bonds.
“ Sec. 5. All votes in said board, approving or disapproving of any estimate, or decreasing the amount thereof, or authorizing or disapproving of the issue of bonds, shall be taken by yeas and nays, and entered upon the record of its proceedings. After said board shall have considered the said matters required to be submitted to it, it shall cause' a statement of the amounts, so approved by it, to be raised by taxation or issue of bonds, and the fund or purpose for which raised, to be made, which statement, being adopted by a majority of all the members elect of the board, shall be then certified by the president and secretary of the board, and shall be transmitted to the common council, and only so much of such estimates or amount tó be raised by taxation as shall have been approved by the said board shall be raised and collected in said city; and only such bonds shall be issued as shall be authorized by said board, as herein provided. The common council of said city, upon approval of said estimates, or any part thereof, by. said board, shall cause to be levied and collected by general tax the amount thereof so approved, and shall issue any bond so authorized to be issued by said board, as aforesaid/'’
It is insisted that, in virtue of these sections pertaining to the board of estimates, and by the language of the fifteenth section of Act No. 388, Local Acts of 1889, providing that the bonds shall be signed, numbered, recorded, sold, and issued in like manner as Detroit sewer bonds are, by the city charter, required and authorized to be made and issued, these bonds, authorized by the common council, must first be passed upon by the board of estimates before they can be issued.
The provisions of the statute pertaining to the board of estimates are a part of the charter of the city of Detroit; so,, likewise, is Act No. 388 an act supplemental to the charter of the city of Detroit; and they must be construed together as one act, and the sole question is whether or not, in cases arising under section 15 of Act No. 388, the board of estimates must pass upon the issu ing of the bonds before the comptroller of the city can place them upon the market. It. is implied in this position that it rests with the board of estimates to veto the action of the common council, and what has been done by the board of commissioners of parks and boulevards; and that, although they may have contracted for the purchase of lands under the authority conferred by section 15, yet they cannot perfect such purchase by payment of the contract price, and thus acquire the lands to the public use, without the consent first obtained of the board of estimates, for, if the consent of the board of estimates is required to the.issue of the bonds, it is likewise required to the binding effect of a contract of purchase, since it must be paid from the tax levy.
It is claimed on the part of counsel for respondent that the universal custom since 1802, when the town of Detroit was incorporated, has been to submit every item of expenditure to a meeting of citizens for discussion and approval, and that that custom has been preserved through different bodies, who have taken the place of the citizens’ meeting; that therefore it is the design of the statute still to require every item of expenditure to be passed upon by some authority which represents the citizens’ meeting of .the-early days of the municipality. It is true that this check upon the expenditure of money has been preserved in the legislation concerning the city of Detroit. It is doubtless, however, competent for the Legislature to provide that certain expenditures may be made upon approval of the common council, and it is competent also for them to abolish entirely the board of estimates, which has come now to represent the citizens’ meeting. And the question is whether, in construing this statute in connection with that which relates to the board of estimates, it was the intention to permit expenditures of this ' kind to become binding obligations on the city on the approval thereof by the common council of the city, and without the approval of the board of estimates.
We do not think that the requirement that these bonds shall be signed, numbered, recorded, etc., in like manner as Detroit sewer bonds are required to be, makes it necessary that they shall, before being signed, numbered, and recorded, receive the approval of the board of estimates. It seems to us that the express direction given as to how they shall be signed, numbered, recorded, and issued, impliedly excludes the idea that they were to be first approved by the board of estimates. The object of this provision appears to be to require their date and number in the order of their issue, and the amounts, to be kept by the comptroller, in order that it may be known how much indebtedness there is outstanding against the city, for this purpose, so that provision may be made for its payment.
We must construe the several provisions of the charter of the city of Detroit so that they may be harmonious, if possible. The statute has vested in these commissioners of parks and boulevards certain discretionary- powers, among which are to purchase or otherwise obtain land for the purpose of the boulevard, and, in case they cannot obtain the same by private negotiations, to apply to the proper court to condemn the same for the public use. When this step is taken, a jury must, under the statute, pass upon the necessity for taking the land for the public use, and determine and award the just damages and compensation to be made therefor. And the statute requires that such damages and compensation, after having been ascertained in the manner provided by the act, shall, within one year after the confirmation of the verdict of the jury, or after it is affirmed on appeal, be paid by the commissioners or tendered to the respective persons entitled to receive the same; and it further provides that, upon such tender of compensation being made, the title of the property will vest in the city of Detroit for the public use. Now, if we should say that this compensation cannot be paid. _ to these parties unless it shall first be passed upon and approved by the board of estimates, it would be placing it in the power of this board to defeat the verdict of the jury to the effect that the taking of the lands was a necessary public improvement, and also to defeat the purchase of lands for that purpose. Unless the board of estimates has this power, it would be a useless form to present the question to them whether they will approve of the issuing of the bonds or not; and, since it was the design of the statute that the lands should be purchased or condemned and paid for as provided in the act, we think it is not necessary that they should approve of these bonds before they are issued.
Mandamus must, therefore, be granted.
The other Justices concurred. | [
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Per Curiam.
Following a jury trial, defendant was convicted of first-degree criminal sexual conduct. MCL 750.520b; MSA 28.788(2). He pled guilty to habitual offender, fourth felony and was sentenced to eighty to two hundred years in prison. MCL 769.12; MSA 28.1084. He appeals as of right. We affirm the convictions but remand for resentencing.
Defendant’s victim was a twelve-year-old girl who had gone to her friend’s house to play one Sunday afternoon in December, 1983. The house belonged to defendant, and the friend was his daughter. Defendant detained the complainant at his house after his daughter left on the pretext that he needed a babysitter for his other children. He promised complainant to drive her home in his pickup. Instead, he took her to an unlit, unpaved area and forced her to have vaginal intercourse.
The complainant told no one about the rape. When she discovered she was pregnant, she disclosed her condition to defendant who denied it was his child. The complainant went through the entire pregnancy revealing it to no one else.
On September 11, 1984, when she realized she had gone into labor, the complainant closed herself in the family’s bathroom and delivered the child. Her brother heard her crying out. She then told him that defendant had raped her.
Defendant continued to deny paternity. Blood tests called human leukocyte antigens (hla) typing were performed on defendant, the mother and the infant. The results set the likelihood of defendant’s paternity at between ninety-seven and ninety-nine percent.
Defendant offered alibi testimony for each of the possible dates on which the assault could have occurred. However, he admitted to his wife that he had intercourse with the complainant.
Defendant raises numerous issues on appeal. First, he argues that the prosecution failed to bring him to trial within 180 days as required by MCL 780.131(1); MSA 28.969(1X1).
Prison inmates against whom charges are pending must be brought to trial within 180 days of incarceration. People v Hill, 402 Mich 272, 280-281; 262 NW2d 641 (1978). This rule does not apply to defendant, as he was not in a state penal institution while awaiting trial. People v Patterson, 170 Mich App 162, 166; 427 NW2d 601 (1988). He was free on bond most of the time prior to trial. People v Walker, 142 Mich App 523, 527-528; 370 NW2d 394 (1985).
Next, defendant claims the court erred in denying his motion to suppress the results of the hla testing. We disagree.
Dr. Richard Walker, an expert in hematology, pathology and percentage testing, testified that hla blood grouping analysis has been done in Europe since 1944. In 1976 the American Medical Association endorsed hla testing. Dr. Walker stated that the scientific community accepts these tests as reliable. The American Association of Blood Banks has developed procedural standards to ensure the reliability of the results. See also Pizana v Jones, 127 Mich App 123, 125-126; 339 NW2d 1 (1983).
In performing the blood analysis, Dr. Walker examined eleven systems containing approxi mately fifty genetic markers. On the basis of the test results, he found the probability that defendant was the father of the child to be between ninety-nine and ninety-seven percent. He set a conservative estimate at ninety-seven percent.
The admissibility of the results of hla testing in a criminal action has not been addressed in Michigan. However the results are admissible by statute in a paternity action. MCL 722.716; MSA 25.496.
The generally accepted rule for the admissibility of scientific evidence is that the procedure used must be sufficiently established to have gained general acceptance in its particular field. Frye v United States, 54 App DC 46; 293 F 1013 (1923). Hla testing is widely accepted in the scientific community as an accurate method of determining paternity probabilities. See Little v Streater, 452 US 1, 6-8; 101 S Ct 2202; 68 L Ed 2d 627 (1981); State v Thompson, 503 A2d 689, 692-693 (Me, 1986). See also Anno: Admissibility, weight and sufficiency of human leukocyte antigen (hla) tissue typing tests in paternity cases, 37 ALR4th 167.
Defendant claims that the results were inadmissible, because the child’s blood was illegally drawn. He cites the paternity statute which requires that the child’s testing shall not be undertaken before the age of six months. MCL 722.716(1); MSA 25.496(1). The child here was two months old.
Dr. Walker explained that the age limit relates to the method of obtaining the blood sample. The method used in this case did not violate the statute. Age may also affect three of the eleven systems tested. In this case, two systems only were affected, and the paternity probability was accordingly revised downward to ninety-seven percent.
The testimony presented at trial supports the reliability of hla testing. The results were relevant to show a connection between defendant and the criminal act. The court did not abuse its discretion in admitting this evidence.
We also reject defendant’s contention that the blood testing violated his right against self-incrimination. Certain acts which compel a defendant to provide real or physical evidence do not violate the Fifth Amendment privilege against self-incrimination. Schmerber v California, 384 US 757, 764; 86 S Ct 1826; 16 L Ed 2d 908 (1966); People v Burhans, 166 Mich App 758, 761-762; 421 NW2d 285 (1988). The withdrawal of blood and the use the analysis of it do not constitute prohibited testimonial compulsion. Schmerber, 761. Thus defendant’s privilege was not violated.
Defendant claims the trial court improperly excluded evidence of the complainant’s previous sexual activity. He presented the testimony of an eighteen-year-old who claimed to have seen his brother engage in sexual intercourse with the complainant in October or November, 1983. The court granted the prosecutor’s motion to strike this evidence.
The rape shield statute provides that evidence of specific instances of a victim’s sexual conduct shall only be admitted under certain circumstances which include showing the source of pregnancy. MCL 750.520j(l)(b); MSA 28.788(10)(l)(b). Defendant did not comply with the notice provisions of the statute. Moreover the evidence has no value regarding the source of the pregnancy. In order to render it probative, defendant would have had to show that complainant carried the baby for ten or eleven months.
Defendant argues the evidence should have been admitted for impeachment purposes. The complainant testified that she never had sexual intercourse prior to the rape.
There is no necessary connection between a witness’ veracity and her sexual immorality. People v Slovinski, 166 Mich App 158, 167; 420 NW2d 145 (1988). The evidence urged by defendant was more prejudicial than probative. The court did not abuse its discretion in rejecting it.
Next, defendant claims the court erroneously instructed the jury on the meaning of "on or about.” He contends that one instruction, as given, allowed the jury to find that the rape occurred on a date other than the three dates alleged in the information. We disagree.
The court instructed the jurors pursuant to CJI 4:12:01(2). It provides:
When, as in this case, it is charged that the crime was committed "on or about” a certain date, it is not necessary that the proof show that it was committed on that precise date; it is sufficient if the proof shows that the crime was committed reasonably near that date.
The instruction did not mislead the jury. The complainant was certain the crime occurred on December 4, 11, or 18, 1983. This was not a case where the prosecutor introduced other evidence of sexual conduct between the parties or where the prosecutor sought to prove more than one sexual act. People v Howell, 396 Mich 16, 28; 238 NW2d 148 (1976). The instructions adequately advised the jurors of their responsibilities. People v Storch, 176 Mich App 414, 418; 440 NW2d 14 (1989). We find no error.
Defendant claims the court erred in allowing the prosecutor to amend the information to allege three dates rather than a single date on which the incident might have occurred.
The information must contain the time of the offense. However a variance is not fatal unless time is of the essence. MCL 767.45(l)(b); MSA 28.985(l)(b); People v Stricklin, 162 Mich App 623, 634; 413 NW2d 457 (1987). Time is not of the essence, nor a material element, in a criminal sexual conduct case where a child is involved. Stricklin, supra.
Defendant was not prejudiced or otherwise denied due process by the amending of the information. He was allowed to conduct an evidentiary hearing after the amendment. His trial did not begin until three months later. We find no error.
Defendant also contends there was insufficient evidence to sustain a guilty verdict. He argues that his alibi evidence for each of the three dates charged precludes the jury from finding that he committed the offense.
In so arguing, defendant ignores the fact that the jurors decided not to believe his alibi witnesses. Yet, unquestionably, credibility is their province. People v Boynton, 46 Mich App 748, 749; 208 NW2d 523 (1973). In this case, the testimony of complainant alone was sufficient evidence to establish defendant’s guilt beyond a reasonable doubt. People v Hampton, 407 Mich 354, 368; 285 NW2d 284 (1979), cert den 449 US 885 (1980).
Next, we find the court did not abuse its discretion in denying defendant’s motion for a new trial based on new evidence. Defendant contended that complainant’s medical records from September 11, 1984, showed she had received a blood transfusion after delivering the baby. He sought an evidentiary hearing to determine its effect on paternity testing. Defendant failed to demonstrate that this evidence was newly discovered or that it probably would have resulted in a difference on retrial. People v Sharbnow, 174 Mich App 94, 104; 435 NW2d 772 (1989), lv den 433 Mich 895 (1989). We note, in addition, that he failed to support his motion with an affidavit. MCR 2.611(D)(1).
Defendant also alleges two instances of prosecutorial misconduct. First, he claims the prosecutor unduly pressured the complainant to establish the date of the incident. The prosecutor has a duty to make a reasonably thorough investigation to guard against a deficient information. People v Naugle, 152 Mich App 227, 233-234; 393 NW2d 592 (1986). This was a proper exercise of that duty.
Secondly, defendant claims the prosecutor failed to investigate a police report that the complainant’s mother stated her boyfriend had raped complainant. We have not been given a copy of this alleged police report. Further, defense counsel had an opportunity to cross-examine complainant and her mother about the alleged statement. We find no evidence of prosecutorial misconduct. Plaintiff received a fair trial. People v Burnett, 166 Mich App 741, 754; 421 NW2d 278 (1988), lv den 431 Mich 900 (1988).
Defendant claims he was denied the effective assistance of counsel. We find the allegation merit-less under either standard commonly used by this Court. Strickland v Washington, 466 US 668; 104 S Ct 2052; 80 L Ed 2d 674 (1984); People v Garcia, 398 Mich 250; 247 NW2d 547 (1976).
Our review of the issue is limited to the record before us. People v Walker, 167 Mich App 377, 382; 422 NW2d 8 (1988), lv den 431 Mich 883 (1988). We briefly address each allegation made by defendant:
a) Defendant, himself, agreed to the stipulation to blood reports, scientific tests, and to the adequacy of the chain of evidence. Defense counsel appropriately challenged the results of the blood tests at trial.
b) Failure to object to the testimony of complain ant’s brother was not error. The testimony would have been admissible over objection as an excited utterance. MRE 803(2).
c) Defendant failed to identify the specific jury instructions that he claims defense counsel did not object to.
d) No support for the mother’s allegation concerning a different perpetrator of the rape has been found. Therefore, we cannot say that failure to cross-examine regarding this issue constituted inadequate representation of counsel.
We reject defendant’s claim that he was denied due process arising from cumulative errors in his trial. People v Anderson, 166 Mich App 455, 472-473; 421 NW2d 200 (1988), lv den 432 Mich 858 (1989). Our review of the record indicates he received a fair and impartial trial.
Defendant’s claim that the criminal sexual conduct statutes are unconstitutional is without merit for the reasons cited in People v Clopton, 117 Mich App 673, 676-677; 324 NW2d 128 (1982). See also People v Krauss, 156 Mich App 514, 516; 402 NW2d 49 (1986).
Defendant’s last two issues concern his sentence. First, he claims the court erred in requiring that he make financial restitution without conducting a hearing on his ability to pay. He is incorrect. Defendant’s ability to pay need be determined only after an assertion of inability to pay is made. People v Music, 428 Mich 356, 363; 408 NW2d 795 (1987). Here, defendant never suggested to the trial court that he was incapable of making restitution.
Secondly, defendant argues that his sentence is excessive. He was thirty-nine years old at the time of sentencing. His sentence was eighty to two hundred years. The entire interval between defen dant’s minimum and maximum sentence is certain to occur after his death. Thus the sentence violates the Michigan Supreme Court’s interpretation of the indeterminate sentencing act. People v Moore, 432 Mich 311, 321; 439 NW2d 684 (1989). Although a lengthy sentence is warranted in this case, it must be one which defendant has a reasonable prospect of actually serving.
Defendant’s convictions are affirmed. Remanded for resentencing. | [
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Per Curiam.
Both plaintiff Jeffrey L. Delke and defendant Accident Fund of Michigan appeal by leave granted from an order of the Workers’ Compensation Appeal Board, which vacated a hearing referee’s decision regarding plaintiff’s claim of retaliatory discharge, but affirmed the referee’s determination that the Accident Fund was obligated to defend the employer, defendant James Scheuren, and to pay any damages and costs to which plaintiff may be entitled as a result of the alleged retaliatory discharge. We affirm in part and reverse in part.
Plaintiff suffered a hernia on September 1, 1982, while lifting bales of hay for defendant employer. His last day worked was September 26, 1982. He filed a petition for hearing on November 29, 1982, claiming disability as a result of the work-related injury. On September 6, 1983, plaintiff filed an amended petition, claiming that the employer had discharged him and refused to rehire him in violation of § 301(11) of the act, MCL 418.301(11); MSA 17.237(301X11), which provides:
A person shall not discharge an employee or in any manner discriminate against an employee because the employee filed a complaint or instituted or caused to be instituted a proceeding under this act or because of the exercise by the employee on behalf of himself or herself or others of a right afforded by this act.
By the time of the hearing, plaintiff apparently withdrew his disability claim and proceeded only on the retaliatory discharge claim. In a decision mailed March 29, 1984, the referee denied the claim, finding as fact "that the employer did not discriminate under § 301(11) in not rehiring petitioner based on the institution of proceedings under the Act.” In response to an inquiry from defendants, a second decision was mailed on June 20, 1984, which included the following additional language:
Addendum: Defense counsel rightly argue that a second issue presented and argued at trial was not decided in the above decision: whether or not the insurance carrier had an obligation under the Act to provide a legal defense to the claim of discriminatory non-reemployment of Petitioner under section 301(11). As to this second issue I find that section 621(2) mandates that the carrier had the obligation to defend the employer. But as to the ultimate relief sought by the employer, as limited by the decision finding no discriminatory treatment of Petitioner, I have no power to award costs or damages.
Both plaintiff and defendant insurance company appealed. In a decision and order dated June 30, 1989, the wcab vacated the referee’s finding under § 301(11) and denied plaintiffs petition, holding that neither the referee nor the wcab had authority or jurisdiction to enforce § 301(11). The wcab also held, however, that it did have jurisdiction to decide the insurance question and that defendant insurer is obligated to defend the employer and to cover any damages and costs awarded in any circuit court action in connection with the alleged retaliatory discharge claim.
Plaintiff contends that the wcab erred in finding that MCL 418.301(11); MSA 17.237(301)(11) does not provide the Bureau of Workers’ Disability Compensation with jurisdiction to hear his discrimination claim. He argues that the amendment of § 301 to include subsection (11) manifests a legislative intent to treat retaliatory discharges as a form of personal injury compensable under the act. Plaintiff notes that prior to the amendment a discharge in retaliation for filing a workers’ compensation claim was actionable as a violation of public policy. Sventko v Kroger Co, 69 Mich App 644; 245 NW2d 151 (1976). Because § 301(11) was therefore unnecessary to create a cause of action for retaliatory discharge, plaintiff concludes that the subsection must have been added in order to create an administrative remedy in addition to any legal remedies. Moreover, plaintiff notes that § 301(11) appears to be patterned after § 65(1) of the Michigan Occupational Safety and Health Act (miosha), MCL 408.1065(1); MSA 17.50(65X1). Plaintiff notes that § 65 in addition to its nonretaliation language provides a detailed administrative scheme for handling retaliation claims culminating in court review under the Administrative Procedures Act, MCL 24.201 et seq.; MSA 3.560(101) et seq. Plaintiff concludes that the Legislature’s failure to include such a scheme in § 301 implies that the Legislature intended retaliation claims to be treated like all other claims under the workers’ compensation act. Finally, plaintiff claims that these conclusions are reinforced by § 841(1) of the act, MCL 418.841(1); MSA 17.237(841X1), which provides:
Any dispute or controversy concerning compensation or other benefits shall be submitted to the bureau and all questions arising under this act shall be determined by the bureau or a worker’s compensation magistrate, as applicable. The director may be an interested party in all worker’s compensation cases in questions of law.
Because a claim of retaliatory discharge in violation of § 301(11) is a question "arising under this act,” plaintiff concludes that the instant dispute must be submitted to the bureau for determination.
On the other hand, defendant argues that in every workers’ compensation claim two questions must be answered: (1) is the claimant disabled; and (2) was the disability caused by the employment. Because plaintiff was not "disabled” within the meaning of the act, there is no true workers’ compensation claim in the instant case. Like plaintiff, defendant notes that § 301(11) appears similar to § 65(1) of miosha, but draws the opposite conclusion. Because the Legislature spelled out an administrative scheme to remedy violations of the nonretaliation language of miosha, the Legislature’s failure to specify such a scheme here means that the Legislature did not intend hearing referees or the wcab to address themselves to retaliation claims. Finally, defendant argues that § 841(1) does not mandate a different result, because the instant case does not involve any "dispute or controversy concerning compensation or other benefits” under the act.
We believe the wcab and defendant have the better argument. Even if a retaliatory discharge should be treated as a "personal injury,” benefits may be awarded only if a claimant is found to be "disabled” within the meaning of the act, i.e., has suffered a loss of wage-earning capacity. MCL 418.301(4); MSA 17.237(301X4). No such loss has been demonstrated here. The Legislature may have added § 301(11) simply to codify the holding in Sventko, supra, or to limit the scope of workers’ compensation retaliation actions. For example, in Wilson v Acacia Park Cemetery Ass’n, 162 Mich App 638, 645-646; 413 NW2d 79 (1987), this Court held that a plaintiff may not premise his right of recovery on a defendant’s alleged anticipation of future workers’ compensation claims, in part because of the language of §301(11). Given this plausible interpretation of the Legislature’s intent, as well as the fact that the fact-finding involved in a retaliatory discharge action would go beyond the range of the bureau’s or the wcab’s expertise, we find that plaintiff has failed to show sufficient evidence of legislative intent to create an administrative remedy for retaliatory discharge.
Furthermore, the bureau and the wcab would be unable to award the equitable remedies customarily sought in a retaliatory discharge action, such as reinstatement and back pay. In the absence of an express legislative conferral of authority, an administrative agency generally lacks the powers of a court of equity. Auto-Owners Ins Co v Elchuk, 103 Mich App 542, 545-546; 303 NW2d 35 (1981). The workers’ compensation act contains no such provision, in contrast to § 65(2) of miosha which expressly provides for orders of reinstatement and back pay.
While we agree with the wcab that the bureau is without jurisdiction to decide a retaliation claim, we do not agree that the bureau and the wcab had the authority to decide whether defendant Accident Fund was required to defend and indemnify defendant employer. The wcab premised its, decision on § 621(2) of the act, MCL 418.621(2); MSA 17.237(621X2), which provides for certain mandatory language in every workers’ compensation insurance policy. In particular, §621(2) requires the following to be included in every policy:
Compensation, (a) That it will pay to the persons that may become entitled thereto all workmen’s compensation for which the insured employer may become liable under the provisions of the Michi gan workmen’s compensation act for all compensable injuries or compensable occupational diseases happening to his employees during the life of this contract or policy;
Obligations assumed, (f) That it hereby assumes all obligations imposed upon the employer by his acceptance of the Michigan workmen’s compensation act, as far as the payment of compensation, death benefits, medical surgical, hospital care or medicine and rehabilitation services is concerned.
Section 621(2) also provides that the insurance policy cover "all the businesses, employees, enterprises, and activities of the employer.”
Although we agree that the terms of § 621 and of the individual insurance policy in question will have to be reviewed in order to determine whether a workers’ compensation insurer is obliged to defend and indemnify an insured in a retaliation action, neither § 621 nor the individual insurance policy confers jurisdiction or authority on the bureau or the wcab to perform this review. Certainly, pursuant to §841(1), the bureau and the wcab may decide insurance coverage questions in cases where jurisdiction of the claimant’s petition for compensation has been properly taken. See, e.g., Michigan Property & Casualty Guaranty Ass’n v Checker Cab Co, 138 Mich App 180; 360 NW2d 168 (1984), and St Paul Fire & Marine Ins Co v Littky, 60 Mich App 375; 230 NW2d 440 (1975). However, we believe it is inappropriate for the wcab to decide the coverage question when jurisdiction over the substantive question of liability is in a court of general jurisdiction. Principles of judicial and administrative economy lead to the conclusion that the issues be resolved in a single forum.
Affirmed in part and reversed in part. | [
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Sawyer, J.
In these consolidated cases, defendants were convicted of a probation violation following a plea of guilty. Both now appeal and we affirm.
In Docket No. 123866, defendant Dyson originally pled guilty to possession with intent to deliver less than- fifty grams of cocaine, MCL 333.7401(2)(a)(iv); MSA 14.15(7401)(2)(a)(iv), and was placed on lifetime probation. A condition of probation was that he successfully complete a ninety-day Special Alternative Incarceration Program, more commonly referred to as "boot camp.” Defendant’s probation violation arises from the fact that he failed to successfully complete the boot camp program. Following his conviction on the probation violation charge, defendant was sentenced to a term of four to twenty years in prison.
In Docket No. 126408, defendant Barnes was also originally convicted by plea of possession with intent to deliver less than fifty grams of cocaine, MCL 333.7401(2)(a)(iv); MSA 14.15(7401)(2)(a)(iv), and was placed on lifetime probation, with a condition of probation being successful completion of the ninety-day boot camp program. Defendant Barnes’ probation violation also arises from his failure to complete the boot camp program. Following his conviction on the probation violation charge, defendant Barnes was sentenced to serve a term of five to twenty years in prison.
Both defendants raise the same issue, namely, whether the requirement that they participate in the boot camp program is a lawful condition of probation where they were sentenced to lifetime probation for a controlled substance offense. MCL 771.3; MSA 28.1133 provides in pertinent part as follows:
(2) As a condition of probation, the court may require the probationer to do 1 or more of the following:
(a) Be imprisoned in the county jail for not more than 12 months, at the time or intervals, which may be consecutive or nonconsecutive, within the probation as the court may determine. However, the period of confinement shall not exceed the maximum period of imprisonment provided for the offense charged if the maximum period is less than 12 months. This subdivision does not apply to a juvenile placed on probation and committed under section 1(3) or (4) of chapter IX to a state institution or agency described in Act No. 150 of the Public Acts of 1974, being sections 803.301 to 803.309 of the Michigan Compiled Laws.
(b) Pay immediately or within the period of his or her probation, a fine imposed at the time of being placed on probation.
(c) Pay costs pursuant to subsection (4).
(d) Pay restitution to the victim or the victim’s estate.
(e) Engage in community service.
(3) Subsection (2) shall not apply to a person who is placed on probation for life pursuant to sections 1(3) and 2(3) of this chapter.
(4) The court may impose other lawful conditions of probation as the circumstances of the case may require or warrant, or as in its judgment may be proper. If the court requires the probationer to pay costs, the costs shall be limited to expenses specifically incurred in prosecuting the defendant or providing legal assistance to the defendant and probationary oversight of the probationer.
Defendants rely upon subsection (3), which provides that the provisions of subsection (2) do not apply to persons placed upon lifetime probation for various offenses, including the offenses committed by defendants in the cases at bar. However, the provisions of subsection (2) do not include commitment to the boot camp program. That is, while subsection (2) does concern commitment to the county jail as a condition of probation and thus cannot be a condition of probation for lifetime probationers under subsection (3), the boot camp program is not listed within subsection (2) and, therefore, is not prohibited as a condition of probation for lifetime probationers under subsection (3).
As subsection (4) makes clear, the trial court may impose any lawful condition of probation as the circumstances may warrant. See also People v Dickens, 144 Mich App 49; 373 NW2d 241 (1985). Defendants do not argue that boot camp is not, in general, a lawful condition of probation.
For the above reasons, we conclude that a trial court may impose any lawful condition of probation on a defendant sentenced to life probation except for those five items specifically enumerated under MCL 771.3(2); MSA 28.1133(2), as provided in subsection (3) to that statute. Furthermore, since the boot camp program is not, by definition, imprisonment in the county jail, it is not a prohibited condition of probation under MCL 771.3(3); MSA 28.1133(3) for those placed on life probation. Accordingly, the trial court did not err in imposing the condition of probation upon defendants that they successfully complete the boot camp program nor in sentencing them for a probation violation for having failed to successfully satisfy that condition of probation.
Affirmed.
See People v Benda, 162 Mich App 255; 412 NW2d 70S (1987). | [
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Per Curiam.
Attorney James Edward Jacobs appeals as of right, challenging a Clinton Circuit Court order reducing Jacobs’ requested fee for his services in a criminal appeal. The Michigan Appellate Assigned Counsel System (maacs) has filed an amicus curiae brief aligned with appellant’s brief in this matter. We affirm.
Jacobs is one of thirty-four attorneys who have volunteered to accept appointments on felony appeals in Clinton County. In this case, Jacobs was appointed to represent defendant Ronald Allen Johnson on appeal following his jury conviction for breaking and entering and his guilty plea conviction for habitual offender, fourth offense. After this Court denied Johnson’s posttrial motions and this Court affirmed his convictions, Jacobs submitted to the trial court an maacs statement seeking total payment in the amount of $6,416.80. Accompanying the maacs statement was a letter from Jacobs essentially acknowledging that the amount requested was large and offering to provide documentation or file a formal petition if necessary. The day after the statement was submitted, the trial court ordered payment of only $3,612.37.
The record on defendant’s appeal consisted of 784 transcript pages and a hearing on posttrial motions generated an additional fifty-three transcript pages. Appellant visited defendant in Marquette Prison, filed a total of forty pages of brief covering nine issues, and attended oral arguments in this Court. Thereafter, appellant filed a motion calling this Court’s attention to a new Supreme Court opinion. The fee awarded by the trial court was the largest fee approved in recent years in Clinton County for an appeal from a felony jury trial.
On appeal to this Court, Jacobs and the maacs first claim that it was a denial of due process for the trial court to reduce Jacobs’ fees without giving him notice and an opportunity to be heard.
MCR 6.425(F), formerly MCR 6.101(J), requires the trial court to appoint appellate counsel upon request by an indigent criminal defendant, and, under MCR 7.208(G), the trial court retains that authority during the pendency of an appeal unless this Court orders otherwise. Compensation for court-appointed counsel in Michigan is governed by MCL 775.16; MSA 28.1253, which in part provides:
The attorney appointed by the court shall be entitled to receive from the county treasurer, on the certificate of the chief judge that the services have been rendered, the amount which the chief judge considers to be reasonable compensation for the services performed.
In Mathews v Eldridge, 424 US 319, 333; 96 S Ct 893; 47 L Ed 2d 18 (1976), the United States Supreme Court stated: "The fundamental requirement of due process is the opportunity to be heard 'at a meaningful time and in a meaningful manner.’ ” (Citation omitted). Unlike other legal rules, due process is a flexible concept, and the amount of process due depends on the circumstances.
[O]ur prior decisions indicate that identification of the specific dictates of due process generally requires consideration of three distinct factors: First, the private interest that will be affected by the oficial action; second, the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and finally, the Government’s interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail. [Id. at 334-335 (citation omitted).]
Because a vehicle existed for Jacobs to have a hearing if he wanted one, we find that there was no denial of due process. The private interest involved is financial, and the risk of an erroneous deprivation under the existing procedures is minimal. Appointed counsel may provide the trial court with any information desired in the attorney’s petition or maacs’ statement or at a hearing on the record. Finally, requiring a full-blown hearing in every indigent appeal case handled by appointed counsel would be enormously expensive and time consuming and, in most cases, totally unnecessary. Accordingly, we find that existing procedures were sufficient to satisfy the requirements of due process.
By common practice under the court rules, a petition may be filed with the trial court for the payment of fees for appointed counsel. Attorney Jacobs was obviously aware of that practice as indicated by the cover letter accompanying his maacs statement. Moreover, nothing precluded him from seeking reconsideration of his petition before filing this appeal. Due process was thus available to him if he chose to pursue it, and no constitutional violation occurred.
Attorney Jacobs and maacs also argue that the trial court’s reduction of Jacobs’ requested fee was an abuse of discretion that denied Jacobs reasonable compensation and infringes on indigent defendants’ rights to effective assistance of counsel and equal protection of the law. Specifically, the parties argue that inadequate fees paid to appointed counsel create a disincentive to provide effective assistance of counsel.
MCL 775.16; MSA 28.1253 imposes an obligation on the lower court to determine and award reasonable compensation for court-appointed attorneys. The determination of the lower court as to reasonable compensation for services and expenses will not be disturbed on appeal absent an abuse of discretion. In re Attorney Fees of Mullkoff, 176 Mich App 82, 85; 438 NW2d 878 (1989), lv den 433 Mich 869 (1989).
As noted above, attorney Jacobs failed to avail himself of the opportunity for a hearing at which he could have presented evidence or elicited the trial court’s reasons for reducing the requested fee. Without a record showing a clear abuse of discretion, we will not reverse.
Although the trial court reviewed attorney Jacobs’ statement with dispatch, the revised hours and dollar amounts reflected in its order suggest the careful exercise of discretion. The court did not simply reduce the total fee requested by forty percent, as claimed by the parties, but adjusted the hours claimed line by line, even increasing the mileage rate from that claimed by counsel. The record now before this Court does not establish an abuse of discretion, Mullkoff, supra, and reversal is not required.
Moreover, In re Attorney Fees of Meizlish, 387 Mich 228; 196 NW2d 129 (1972), is controlling on attorney Jacobs’ and maacs’ constitutional arguments. In Meizlish, our Supreme Court rejected claims that Wayne County’s court rule establishing a fixed fee schedule for assigned counsel violated the lawyers’ due process and equal protection rights and the indigent defendants’ rights to counsel, appeal, due process and equal protection:
Appellant’s contention that he has been deprived of due process and equal protection under the United States Constitution and Michigan Constitution 1963 has been discussed and decided adversely to him by numerous courts in this country. . . .
Likewise, the courts have uniformly rejected the contention that an attorney is denied the equal protection of laws when he defends an indigent without compensation. [Id. at 236-237.]
Although eighteen years have passed since the Meizlish decision was issued, the constitutional issues remain the same, and this Court is bound by the Supreme Court’s decision. Accordingly, the trial court’s decision is affirmed.
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] |
Per Curiam.
These consolidated cases arise out of the same incident in an after-hours gambling house in Muskegon, Michigan. Following a joint jury trial in November, 1986, defendant Andre Scott was convicted of first-degree felony murder, MCL 750.316; MSA 28.548, two counts of assault with intent to rob while armed, MCL 750.89; MSA 28.284, and possession of a firearm during commission of a felony, MCL 750.227b; MSA 28.424(2). Scott was sentenced to life imprisonment without parole for the murder conviction, one hundred to three hundred years imprisonment for the assault convictions and a consecutive two-year term for the felony-firearm conviction. Defendant James Hicks was convicted of three counts of assault with intent to rob while armed, MCL 750.89; MSA 28.284, and felony-firearm, MCL 750.227b; MSA 28.424(2). Hicks was sentenced to fifty to two hundred years imprisonment for the assault convictions and a consecutive two-year term for the felony-firearm conviction. Defendants now appeal as of right. We affirm as to both defendants._
i
Scott first contends that the trial court erred in refusing to suppress the use for impeachment purposes of evidence of his 1983 conviction of carrying a concealed weapon. Scott claims that, because of the court’s ruling, he chose not to testify and thus could not present a defense.
The trial court’s decision to allow impeachment by evidence of a prior conviction is within its sound discretion and will not be reversed on appeal absent an abuse of that discretion. People v Frey, 168 Mich App 310, 313; 424 NW2d 43 (1988). However, in People v Allen, 429 Mich 558; 420 NW2d 499 (1988), reh den 430 Mich 1201 (1988), our Supreme Court provided a clarified balancing test to be applied in determining whether there was an abuse of discretion. This test applies retroactively to all cases tried before March 1, 1988, in which the issue of admissibility under MRE 609(a) has been raised and preserved in the trial court. Id. at 609. Because the instant appeal is such a case, we must review the trial court’s decision under the Allen test.
For purposes of the probativeness side of the equation, only an objective analysis of the degree to which the crime is indicative of veracity and the vintage of the conviction would be considered, not either party’s need for the evidence. For purposes of the prejudice factor, only the similarity to the charged offense and the importance of the defendant’s testimony to the decisional process would be considered. The prejudice factor would, of course, escalate with increased similarity and increased importance of the testimony to the decisional process. Finally, unless the probativeness outweighs the prejudice, the prior conviction would be inadmissible. [Id. at 606.]
On the probative side of the equation, we note that the conviction three years earlier offered little, if any, indication of Scott’s truthfulness. As to its prejudicial effect, it is clear that the conviction for carrying a concealed weapon was similar in some respects to the charge of use of a weapon in the commission of a felony. Further, Scott’s testimony was important to the decisional process because, without his testimony, the jury heard only the prosecution’s witnesses, subject, of course, to defense counsel’s cross-examination. In light of the low probative value of the prior conviction and the obvious prejudice, we find that the prejudice outweighed the probativeness and that the trial court abused its discretion.
Nevertheless we do not find that reversal is warranted. As the trial was held before the Allen decision, Scott was not required to testify in order to preserve his right to appeal the admission of the prior conviction. However, he made no offer of proof as to the nature of his testimony and how it would contradict the numerous eyewitnesses who identified him as the assailant. As Scott did not claim an alibi defense, his testimony, at best, would have been a denial of his involvement in the crimes charged. Counsel’s intensive cross-examination of the prosecution witnesses and his argument that a misidentification occurred placed Scott’s theory of defense before the jury. Considering the number of witnesses who identified Scott and the lack of any suggested motive for them to falsify their identification, we believe there was overwhelming evidence against Scott. On the basis of the evidence and arguments presented, we believe reasonable jurors would find Scott guilty beyond a reasonable doubt even if evidence of the prior conviction had been suppressed and defendant had been allowed to testify. We therefore find the error to have been harmless. Allen, supra at 611-612; People v Reed, 172 Mich App 182, 187-188; 431 NW2d 431 (1988).
ii
Scott also contends that the trial court erred in failing to suppress a statement he made to the arresting officer that his prints were probably on the forepiece of the shotgun found at the blind pig because he sold the shotgun to a man who was going to Muskegon. Scott contends that his statement was involuntary because it was improperly induced by a detective’s false statement that his fingerprints were found on a part of a sawed-off shotgun retrieved from the crime scene.
On appeal from a Walker hearing, we are required to examine the entire record and reach an independent determination of the voluntariness of defendant’s statements. People v Catey, 135 Mich App 714, 721; 356 NW2d 241 (1984), lv den 422 Mich 940 (1985). We will affirm the trial court’s ruling unless it is clearly erroneous, such that we have a definite and firm conviction that a mistake has been made. People v Watkins, 178 Mich App 439, 447-448; 444 NW2d 201 (1989).
The voluntariness of a statement must be determined from all of the facts and circumstances, including the duration of detention, the manifest attitude of the police toward the suspect, the physical and mental state of the suspect, and the pressures which may sap or sustain the suspect’s powers of resistance or self-control. Id.; People v Kvan, 160 Mich App 189, 196; 408 NW2d 71 (1987).
We are not left with a definite and firm convic tion that the trial court erred in finding defendant’s statement voluntary. It is undisputed that defendant had been advised of his Miranda rights before he made the statement to police. Furthermore, the fact that the police misrepresented the fact to defendant that his fingerprints were discovered on an article retrieved from the crime scene is insufficient to make this otherwise voluntary statement involuntary. Frazier v Cupp, 394 US 737; 89 S Ct 1420; 22 L Ed 2d 684 (1969). While we do not condone such action by the interrogating officer, we cannot say that the admission of an unrelated crime under the circumstances here was compelled by trickery. The trial court did not err in ruling that defendant’s statement was admissible.
III
Hicks argues that the trial court erred in failing to suppress a statement he made to police following the testing phase of a polygraph examination. Hicks first contends that his statement was involuntary because he was not advised again of his Miranda rights during a limited exchange that ensued shortly after the machine was shut off. We disagree.
Recently, in People v Ray, 431 Mich 260, 268; 430 NW2d 626 (1988), our Supreme Court held that "neither public policy nor federal or state law requires that statements made before, during, or after the administration of a polygraph examination are excludable per se as evidence at trial.” The admissibility of postpolygraph interview statements is to be resolved by a review as to whether in the "totality of the circumstances” Hicks’ waiver of his Fifth Amendment rights was knowing and voluntary. Id. at 276.
Here, the only circumstance intervening between the time in which Hicks was initially informed of his rights and the postexamination questioning was the 2 ½ hour time period that encompassed the preinterview conversation, the test itself, and the postexamination questioning. Furthermore, the same individual who had previously warned Hicks of his rights also conducted the postexamination questioning. Thus, as in Ray, it was not reasonable to expect the examiner to readvise Hicks of his rights at that time. Moreover, Hicks’ waiver expressly extended to the postexamination questioning.
We also reject Hicks’ claim that his statement was made during the process of plea negotiations and therefore inadmissible under MRE 410. Our review of the record indicates that MRE 410 is inapplicable in the instant case because the possibility of a guilty plea was never discussed nor was one offered or accepted. People v Heffron, 175 Mich App 543, 546; 438 NW2d 253 (1988).
iv
Both defendants contend that the trial court committed error requiring reversal in refusing to voir dire the jurors in order to determine the extent of their exposure to a newspaper article which made reference to defendants’ prior convictions. We disagree.
The jury selection in the instant action began on October 28, 1986, in a normal fashion. After the jury had been sworn, the trial court admonished against listening to, reading or watching news reports relating to the trial:
During the time you serve on this jury, there may appear in the newspapers or oh radio or television reports concerning this case, and you may be tempted to read, listen to or watch them. Please do not do so. Due process of law requires that the evidence to be considered by you in rendering your verdict meet certain standards.
For example, a witness may testify about events he himself has seen or heard, but not about matters of which he was told by others. Also, witnesses must be sworn to tell the truth, and must be subject to cross-examination. News reports about the case are not subject to these standards, and if you read, listen to or watch these reports, you may be exposed to misleading or inaccurate information, which unduly favors one side and to which the other side is unable to respond. In fairness to both sides, therefore, it is essential that you comply with this instruction.
At the conclusion of the prosecution’s opening statement, the trial court again admonished the jurors: "Please do not read, watch or listen to any newspaper, television or radio reports regarding this case.” The jury was then excused for the day.
On October 29, page twenty-eight of the Muskegon Chronicle contained an article under a headline that read "Arguments continue in gambling house murder trial.” The article referred to evidentiary matters which took place out of the presence of the jury and referred to both defendants’ prior convictions:
Assistant Muskegon County Prosecutor Les Bowen sought inclusion of prior convictions, which for Scott are two: manslaughter in 1972 and carrying a concealed weapon in 1983.
Hicks’ prior convictions are: manslaughter, 1972; attempted larceny in a building, 1982; armed robbery, 1985; and receiving and concealing stolen property valued over $100, 1985.
Defendants subsequently moved to individually voir dire the jury. Defendants’ motions were denied as was a motion for mistrial. The trial court declined to question the jury stating that it felt that the court’s standard instructions had sufficiently covered the matter. On appeal, defendants challenge this denial as having deprived them of their Sixth Amendment right to a fair and impartial jury. We disagree.
We begin our analysis by noting, that we are troubled by the trial court’s failure to voir dire the jury. However, the trial court’s failure to inquire into juror exposure to prejudicial news accounts does not necessarily mandate the reversal of defendants’ convictions. United States v Manzella, 782 F2d 533, 542-543 (CA 5, 1986). Rather, courts have focused upon the timing and prominence of the newspaper article, the nature and number of the trial court’s warnings concerning media coverage, the prejudice to defendants and the likelihood that the publicity has in fact reached the jury. Id.; United States v Ricardo, 619 F2d 1124 (CA 5, 1980), cert den 449 US 1063; 101 S Ct 789; 66 L Ed 2d 607 (1980). In the instant case, the article was published following the prosecution’s opening statement. The headline would have put any reasonable juror on notice that the article related to the trial of Scott and Hicks. The article did not appear in the most conspicuous area of the newspaper, but on page twenty-eight. These circumstances do not lead us to conclude that the jurors would have been hard pressed to avoid the article. Finally, on at least three occasions immediately prior to the publication of the article, the trial judge admonished the jury not to consider any sources of media information. We believe these admonitions concerning media coverage were adequate to ensure that defendants received a fair trial free from media reports of nonadmissible evidence.
Assuming, arguendo, that the jurors read the article, believed the statements to be true, and evaluated the defense theories in light of the prior convictions, there is no question that the defendants would have been prejudiced by such revelation. However, as noted above, the evidence against both defendants was overwhelming. At least ten witnesses identified Scott as one of the perpetrators, while at least six witnesses identified Hicks as Scott’s accomplice. We therefore find the trial court’s failure to voir dire the jury to have been harmless beyond a reasonable doubt.
v
Defendants contend that the trial court committed error requiring reversal in denying their motions for separate trials. We disagree.
The decision as to whether codefendants will be tried separately or jointly rests within the sound discretion of the trial judge and will not be reversed on appeal absent an abuse of that discretion. MCL 768.5; MSA 28.1028; People v Greenberg, 176 Mich App 296, 303-304; 439 NW2d 336 (1989).
A motion to sever should be granted where the codefendants’ separate defenses are antagonistic, such as where it appears that one defendant may testify to exculpate himself and to incriminate his codefendant. Id. When a defendant moves for severance, he bears the burden of proving that he has substantial rights which will be prejudiced in a joint trial. People v Jackson, 158 Mich App 544, 556; 405 NW2d 192 (1987), lv den 428 Mich 917 (1987).
Applying these factors to the instant case, we are not persuaded that the trial court abused its discretion in denying defendants’ motions to sever. We see no evidence that defendants carried their burden of demonstrating that their defenses were antagonistic. Both defendants denied any involvement in the crime and their defenses were that of mistaken identity. In addition, any statements made by either defendant were edited to eliminate reference to the other. To hold two separate trials on these nearly identical cases would have been unnecessarily duplicative and excessive. The lack of prejudice to defendants, the nature of the evidence, and the number of witnesses support our conclusion that a joint trial was appropriate.
vi
Scott further argues that he was prejudiced when Detective Jurkas, on cross-examination by Hicks’ counsel, testified that Hicks repeatedly tried to "make a deal” and even stated that he would be willing to testify against Scott. In his closing argument Hicks’ counsel mentioned Hicks’ offer to make a deal several times, and stated: "And Hicks said: I’ll lay it all out for you, including Andre [Scott], Pee Wee, Rabbit, and Deno.” Scott’s failure to object to the alleged error at trial precludes review of the issue by this Court absent a miscarriage of justice. People v Dalessandro, 165 Mich App 569, 578; 419 NW2d 609 (1988). We find no such miscarriage of justice as Scott has made no affirmative showing of prejudice. A statement allegedly made by a codefendant that he is willing to incriminate others to get favored treatment for himself is not so prejudicial as to amount to manifest injustice.
Affirmed as to both defendants.
People v Walker (On Rehearing), 374 Mich 331; 132 NW2d 87 (1965).
Miranda v Arizona, 384 US 436; 86 S Ct 1602; 16 L Ed 2d 964 (1966). | [
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] |
Wahls, J.
Plaintiff appeals as of right from a May 4, 1988, Wayne Circuit Court order granting defendant Callaghan’s and defendant school district’s motions for summary disposition. We reverse.
Lisa Nolan was killed on February 6, 1986, when she was struck by a car driven by defendant Russell Bronson as she was crossing Goddard Road in Taylor. Just prior to the accident, Lisa Nolan was a passenger of a Taylor School District school bus driven by Callaghan.
Plaintiff filed a complaint against defendants school district and Callaghan on several bases of liability. On appeal from the trial court’s order granting summary disposition, plaintiff argues only three bases of liability: that defendants negligently failed to stop the school bus in the roadway and activate its warning flashers so that the bus would be completely visible for four hundred feet to vehicles approaching or overtaking the bus; that defendants negligently failed to require Lisa Nolan to get off the bus from its front exit and walk across the street in front of the bus; and that defendants negligently failed to prevent Lisa Nolan from getting off bus and crossing the street where there was no traffic light.
i
Lisa Nolan was a fifteen-year-old ninth-grader in the Taylor School District. On the day of the accident, Lisa Nolan and her brother, Michael Nolan, boarded a school bus after school and rode it east on Goddard toward their home which was near the intersection of Goddard and Oak Street. Goddard runs east-west; Oak runs north-south. The first two designated bus stops on the bus route were on Goddard near the intersection of Goddard and Oak: the first was on the south side of God dard, approximately one-half block west of Oak; the second was on the north side of Goddard, approximately two blocks west of Oak. Although the Nolans lived north of Goddard, they normally got off the school bus at the bus stop on the south side of Goddard and then walked across Goddard. Callaghan was aware of this practice, and did not attempt to prevent it on previous days or on the day of the accident.
The first designated bus stop was in a parking lot on the south side of Goddard between Pine Street, which was west of the parking lot, and Oak, which was east of the parking lot. A driveway provides access from Goddard to the parking lot. Callaghan’s normal practice, which she followed on the day of the accident, was to make a right-hand turn off Goddard on to the driveway and then stop the bus perpendicular to Goddard with the back of the bus five to ten feet from Goddard. After dropping off passengers, Callaghan would leave the parking lot and drive IV2 blocks west on Goddard to the designated bus stop on the north side of Goddard.
Several male students who sat near the front of the bus habitually harassed female students as the females got off the bus. Despite complaints from the female students, Callaghan did not prevent the harassment from occurring. In order to avoid being harassed, Lisa Nolan and two other females decided to get off the bus by way of the emergency exit at the back of the bus. Michael Nolan and another male got off with them on the day of the accident. Callaghan was aware that the children had been using the emergency exit for several days, but did not make any attempt to prevent them until the day of the accident when she yelled to them as they were getting off. Callaghan sur mised that they could not hear her over the noise on the bus.
After Callaghan stopped the bus in the parking lot on the south side of Goddard, Lisa Nolan and Michael Nolan jumped from the bus to the pavement five to ten feet from Goddard. Although there was a trafile light at Pine and Goddard to their left, Lisa and Michael attempted to cross Goddard in the middle of the block. Goddard is five lanes wide at that point, and the speed limit is reportedly 40 m.p.h. Again, Callaghan was aware that they had been crossing there for several days but did not attempt to stop them.
Lisa and Michael Nolan stepped from the curb and started to walk across Goddard. Lisa Nolan was struck by Bronson’s car near the center lane of Goddard. The bus was still present at the scene unloading passengers at the time of the accident.
In his deposition, Bronson testified that he was driving his car in the left-hand westbound lane of Goddard at approximately the speed limit as he passed Oak. Bronson did not see a school bus in the area. However, he did see Lisa Nolan and Michael Nolan as they walked into the center lane together. Bronson was approximately 1 Vi car lengths away when he first saw them. Bronson heard, but did not see, his car strike Lisa Nolan as he drove past Lisa Nolan and Michael Nolan.
The only disputed issue of fact is whether Lisa Nolan was running across the two westbound lanes when she was struck by Bronson’s car, or whether she was standing in the center lane when she was struck by Bronson’s car.
ii
Defendants brought motions for summary disposition under MCR 2.116(0(10) in which they ar gued that as a matter of law Callaghan’s alleged negligence could not have been the cause of Lisa Nolan’s death because Lisa Nolan was discharged in a position of safety, and because Bronson actually saw Lisa Nolan before his car struck her. Defendant school district also argued that it is immune from liability because it is a governmental agency that was engaged in a governmental function and the alleged negligence did not involve the operation of a motor vehicle or the maintenance of an intentional nuisance. The trial court did not reach the governmental immunity issue but instead apparently ruled that (1) Callaghan did not have an obligation to prevent Lisa Nolan from getting off the bus on the south side of Goddard even though Callaghan knew that Lisa Nolan and the other students were crossing Goddard to reach their homes on the north side of Goddard, and (2) Callaghan’s alleged breach of her obligation to prevent Lisa Nolan from getting off by way of the emergency exit was not a cause of Lisa Nolan’s death. The trial court therefore granted the motions for summary disposition.
hi
A motion for summary disposition brought under MCR 2.116(0(10), based on the lack of a genuine issue of material fact, tests whether there is factual support for a claim. W B Cenac Medical Service, PC v Michigan Physicians Mutual Liability Co, 174 Mich App 676, 681; 436 NW2d 430 (1989). Considering the pleadings and evidence submitted by the parties, and giving the benefit of all reasonable doubt to the party opposing the motion, the trial court must determine whether the kind of record that might be developed at trial would leave open an issue upon which reasonable minds could differ. Id. If there is no material factual dispute, the trial court must determine whether "the moving party is entitled to judgment ... as a matter of law.” MCR 2.116(C) (10) . A trial court may not properly grant summary disposition where reasonable minds applying the law to the facts could differ as to whether a claim could be supported at trial. DiFranco v Pickard, 427 Mich 32, 54; 398 NW2d 896 (1986); Cenac, supra, p 681.
A
The elements of a negligence claim are (i) duty, (11) general standard of care, (iii) specific standard of care, (iv) cause in fact, (v) legal or proximate cause, and (vi) damage. Moning v Alfono, 400 Mich 425, 437; 254 NW2d 759 (1977); Hetterle v Chido, 155 Mich App 582, 587; 400 NW2d 324 (1986). Normally, the court decides the questions of duty, general standard of care, and legal or proximate cause, while the jury decides the questions of cause in fact, specific standard of care, and damage. See Moning, supra, p 438; see also DiFranco, supra, p 54; Hetterle, supra, p 588.
"Duty is essentially a question of whether the relationship between the actor and the injured person gives rise to any legal obligation on the actor’s part for the benefit of the injured person.” Moning, supra, pp 438-439. Assuming a duty, the standard of care may be established "specifically by mandate of statute, or it may arise generally by operation of law under application of the basic rule of the common law, which imposes on every person engaged in the prosecution of any undertaking an obligation to use due care, or to so govern his actions as not to unreasonably endanger the person or property of others.” Clark v Dalman, 379 Mich 251, 261; 150 NW2d 755 (1967). Assuming further that the defendant’s conduct is a cause in fact of the plaintiffs injuries, the question of proximate cause "depend[s] on whether the conduct has been so significant and important a cause that the defendant should be legally responsible.” McMillan v State Hwy Comm, 426 Mich 46, 51; 393 NW2d 332 (1986), emphasis omitted, quoting Prosser & Keeton, Torts (5th ed), § 42, pp 272-274; Moning, supra, p 438.
The questions of duty and proximate cause are interrelated because they both involve a policy determination of whether a legal obligation should be imposed on the defendant to protect the plaintiff against the damage the plaintiff actually suffered. See McMillan, supra, pp 51-52, quoting Prosser, supra; Moning, supra, pp 438-439. They are also interrelated "because the question whether there is the requisite relationship, giving rise to a duty, and the question whether the cause is so significant and important to be regarded a proximate cause both depend in part on foreseeability— whether it is foreseeable that the actor’s conduct may create a risk of harm to the victim, and whether the result of that conduct and intervening causes were foreseeable.” Moning, supra, p 439.
B
There is no dispute in this case on whether Callaghan owed a duty to Lisa Nolan. Unquestionably, there is a legal relationship between a school bus driver and a passenger/student such that the law imposes a legal obligation on the driver for the benefit of the passenger. In Poe v Detroit, 179 Mich App 564, 570; 446 NW2d 523 (1989), this Court noted that a common carrier has an obligation to discharge a passenger "in a reasonably safe place.” The legal relationship between a carrier and a passenger ends "once the passenger safely alights” from the bus and is "free to choose how to proceed to his next destination.” Id. The dispositive question in this case then is whether that is the extent to which the policy of the law will recognize a duty and proximate cause when the relationship is that of school bus driver and passenger/student. See McMillan, supra, pp 51-52, quoting Prosser, supra.
c
Numerous statutes enacted by Michigan’s Legislature specifically prescribe the equipment required on school buses, the distinctive painting and markings of school buses, inspection of school buses, and the qualifications of bus drivers. See MCL 380.1321 et seq.; MSA 15.41321 et seq.; MCL 257.1 et seq.; MSA 9.1801 et seq. The state board of education has also established safety specifications for school buses, inspection of school buses, and the qualifications of drivers. 1979 AC, R 340.1201 et seq., 1981 AACS, R 340.1202 et seq., and R 340.1251 et seq. See MCL 380.1343(1) and 388.1010; MSA 15.41343 and 15.1023(10). Local school boards are required to establish regulations governing the conduct of students for their safety while en route to and from school. MCL 380.1300; MSA 15.41300. The state board has ordered that students must comply with local rules and orders of the bus driver. 1981 AACS, R 340.1253. The Legislature has provided various methods of enforcing all of these. See, e.g., MCL 380.1311; MSA 15.41311 (suspend/expel student); MCL 380.1813; MSA 15.41813 (criminal sanctions against any person); MCL 388.1671(4); MSA 15.1919(971X4) (withhold state aid to local board). These statutes and rules indicate a strong public policy for a high degree of care in the transportation of students to and from school.
The strongest indication of the extent to which the policy of the law of this state will recognize a duty and proximate cause is § 682 of the Michigan Vehicle Code, MCL 257.682; MSA 9.2382, which provides in relevant part:
(2) The driver of a vehicle overtaking or meeting a school bus which has stopped and is displaying 2 alternately flashing red lights located at the same level shall bring the vehicle to a full stop not less than 10 feet from the school bus and shall not proceed until the school bus resumes motion or the visual signals are no longer actuated. The driver of the school bus, before resuming motion, shall deactivate flashing lights and permit stopped traffic to proceed and shall, when resuming motion, proceed in a manner which will allow congested traffic to disperse by keeping the bus as near to the right side of the road as can be done with safety. Passengers crossing the road upon being discharged from a school bus shall cross in front of the stopped school bus. At an intersection where traffic is controlled by an officer or a traffic stop-and-go signal a vehicle need not be brought to a full stop before passing a stopped school bus, but may proceed past the school bus at a speed not greater than is reasonable and proper but not greater than 10 miles an hour and with due caution for the safety of passengers being received or discharged from the school bus. . . . The driver of a vehicle who fails to stop for a school bus as required by this subsection, who passes a school bus in violation of this subsection, or who fails to stop for a school bus in violation of an ordinance which complies with this subsection, is guilty of a misdemeanor.
(3) A school bus driver shall not stop the bus for the purpose of receiving or discharging passengers, unless the bus is completely visible in its stopped position to approaching or overtaking drivers of vehicles for a distance of at least 400 feet.
(5) A school bus transporting pupils . . . shall be equipped with . . . alternately flashing red lights located at the same level. The lights shall have sufficient intensity to be visible from a distance of not less than 500 feet in normal sunlight and shall be actuated by the driver of the school bus when, but only when, the vehicle is stopped and for a distance of at least 200 feet in advance of a stop for the purpose of receiving or discharging school children.
Generally, subsections (2) and (5) do not apply inside of incorporated cities or villages except as provided by local ordinance.
Section 682 clearly defines the duties of school bus drivers and motor vehicle drivers with respect to school bus passengers crossing the road. A school bus driver will be held legally responsible for injuries foreseeably caused by a proven failure of the bus driver to comply with § 682. See Zeni v Anderson, 397 Mich 117, 128-129; 243 NW2d 270 (1976), and Klanseck v Anderson Sales & Service, Inc, 426 Mich 78, 86-87; 393 NW2d 356 (1986) (violation of a penal statute is prima facie evidence of negligence). Thus, it must be conceded that under §682 the school bus driver’s duty of care extends further than simply discharging a passenger in a reasonably safe place.
The difficulty in this case stems from the fact that § 682 apparently does not apply in its entirety to this case, and, regardless, does not expressly prohibit a school bus driver from stopping a school bus in a parking lot to discharge passengers. According to defendants and the trial court, a school bus driver’s duty of care under the circumstances in this case ends when the passenger alights safely from the school bus. In other words, defendants would have this Court hold, in effect, that a school bus driver’s clear duty under §682 to do much more than simply discharge a passenger in a reasonably safe place is extinguished by discharging a passenger in a reasonably safe place five to ten feet off the road. Such a result, however, takes no account of the policy considerations which no doubt motivated the Legislature to enact § 682 in the first place.
As previously noted, a duty of care may be established by statute, or by the common law. The fact that a statute sets a standard of care under certain circumstances does not mean that under other similar circumstances there is no duty of care. A statute as applied in a negligence claim specifically defines the standard of care of a reasonable person under specific circumstances. See Zeni, supra, p 143; Klansec, supra, p 86. Where the statute is inapplicable, the common law still requires a person to act reasonably under the circumstances. See Zeni, supra, pp 137, 143; Clark, supra, p 261.
In a 1980 opinion, Michigan’s Attorney General was asked whether it was negligent to discharge a child on one side of a divided highway knowing that the child would have to cross the other side of the divided highway without the protections of § 682. OAG, 1980, No 5825, pp 1105-1108 (December 9, 1980); see MCL 257.682(4); MSA 9.2382(4). We agree with the Attorney General’s conclusion that a school bus driver who discharges passengers near a highway "knowing that [they] will have to cross the divided highway against moving traffic in order to reach their homes may be liable for negligence in discharging students at such a bus stop,” depending upon all of the circumstances, including the apparent age, intelligence and expe rience of the passenger. We limit our agreement with that conclusion to the facts presented.
We conclude that a school bus driver may be held legally responsible for the safety of passengers discharged near a highway when the driver knows they must cross that highway to reach their homes. Since we rely primarily on § 682 for this conclusion, we limit our conclusion to circumstances analogous to circumstances governed by § 682, to the type of harm intended to be prevented by § 682, and to plaintiffs within the class of persons intended to be protected by § 682. See Klanseck, supra, p 87. The duty of care required of a school bus driver for the benefit of a passenger is the care a reasonable person would exercise under the circumstances. Under some circumstances, a school bus driver’s duty of care will extend further than simply discharging a passenger in a reasonably safe place.
Under the circumstances of this case, a reasonable jury could conclude that Callaghan was negligent for failing to take any action to prevent Lisa Nolan and others from getting off by way of the emergency exit and crossing Goddard against moving traffic. Also, the alleged violations of state statutes, local ordinances, and school board rules and regulations regarding stopping of school buses, to the extent they apply, may present issues for the jury. We disagree with defendants’ argument that the fact that Bronson saw Lisa Nolan before his car struck her automatically bars a finding that the alleged violations were a proximate cause of the accident.
The duty of care recognized in this opinion is not overly burdensome on school bus drivers, and it is not new. The state board of education and local school districts have for some time required school bus drivers to exercise a high degree of care for the safety of passengers who must cross the highway after being discharged. A comprehensive manual provided by the state board to local school districts for use in their transportation programs recommends "that the school bus driver or a responsible person escort each elementary pupil, who must cross the road after exiting the school bus, to the centerline of the roadway to assure the safety of the pupil.” Gustafson & Mitman, Head School Bus Driver Reference Manual, p 11 (East Lansing: Highway Traffic Safety Programs, Michigan State University, 1986), emphasis added; cf. Price v Manistique Area Public Schools, 54 Mich App 127, 131; 220 NW2d 325 (1974), lv den 393 Mich 753 (1974) (former school bus driver manual). According to the director of transportation for the Taylor School District, school bus drivers were required to enforce the school district’s rule that students must get off a bus at their assigned bus stop. Additionally, school bus drivers were required to report any violations of student safety rules. The manual and school district rules provide additional support for our conclusion that school bus drivers may be held legally responsible for the safety of passengers discharged near a highway when the driver knows they must cross that highway to reach their homes. See Price, supra (violation of duties imposed by rules and regulations is evidence of negligence).
iv
The determination whether defendant school district may be held liable for Lisa Nolan’s death is complicated by the fact that "the maintenance and operation of a school bus system by a school district constitutes an immune governmental function.” Cobb v Fox, 113 Mich App 249, 257; 317 NW2d 583 (1982), lv den 422 Mich 892 (1985); see MCL 691.1407(1); MSA 3.996(107) and MCL 380.1321 et seq.; MSA 15.41321 et seq. The motor vehicle exception to governmental immunity provides that "[governmental agencies shall be liable for bodily injury . . . resulting from the negligent operation by any . . . employee of the governmental agency ... of a motor vehicle” owned by the governmental agency. MCL 691.1405; MSA 3.996(105). Thus, even if Callaghan was negligent, defendant school district cannot be held liable unless the claimed negligence in this case involved operation of the school bus.
It is well established that a motor vehicle may be in operation for purposes of § 1405 even though it is not in motion. One test of whether a motor vehicle is in operation is based on a determination of whether it is "being used or employed in some specific function or to produce some desired work or effect.” Wells v Dep’t of Corrections, 79 Mich App 166, 169; 261 NW2d 245 (1977). A bus which is operated in the manner required by § 682 is clearly employed in a specific function or to produce a desired effect. The stopping of a school bus for the purpose of discharging passengers, and the bus driver’s duties attendant to the stopping of the school bus, unquestionably constitute operation of a motor vehicle. Thus, plaintiffs claims relating to alleged violations of § 682 and similar local ordinances and school board rules and regulations are within the motor vehicle exception to governmental immunity. Moreover, plaintiffs claims relating to Callaghan’s alleged negligent failure to control the manner in which students were discharged from her bus are inextricably intertwined with the alleged violations which clearly constitute operation of a motor vehicle. Therefore, those claims are also within the motor vehicle exception to governmental immunity.
The cases of Cobb v Fox, supra, and McNees v Scholley, 46 Mich App 702; 208 NW2d 643 (1973), are factually distinguishable from this case. Cobb and McNees are unlike this case in that plaintiff has alleged, and there is evidence showing, that the school bus in this case was present at the scene of the accident discharging passengers in violation of duties imposed by statute, ordinance, and rules and regulations. We conclude that these differences bring plaintiffs allegations of negligent discharging of passengers within the motor vehicle exception. See Dinh v Forest Hills Public Schools, 129 Mich App 293, 299; 341 NW2d 510 (1983); see also McNees, supra, p 706, distinguishing Earl W Baker & Co v Lagaly, 144 F2d 349 (CA 10, 1944) (Baker held that discharging passengers is part of operation of bus).
v
On the basis of our analysis in parts hi and iv of this opinion, we conclude that the trial court erred when it granted defendants’ motions for summary disposition.
Reversed and remanded for proceedings consistent with this opinion. | [
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Sawyer, J.
Defendant was convicted, following a jury trial, of two counts of kidnapping, MCL 750.349; MSA 28.581, two counts of armed robbery, MCL 750.529; MSA 28.797, two counts of possession of a firearm during the commission of a felony, MCL 750.227b; MSA 28.424(2), and unlawfully driving away an automobile (udaa), MCL 750.413; MSA 28.645. Defendant was thereafter sentenced to serve concurrent terms of forty to sixty years in prison on each of the kidnapping and armed robbery convictions, thirty to sixty months for the udaa conviction, and two terms of two years in prison for the felony-firearm convictions. Defendant now appeals and we affirm.
The victims, Diane Allen and Tracy Lynn Roberts, were stopped at a gas station on Waverly Road during the early morning hours of September 26, 1987, where they purchased gas and visited a friend. As they were driving away, Roberts heard paper rustling in the back of the van and saw what appeared to be a man’s head in her rearview mirror. The man, later identified as defendant, approached the driver’s area, warned the two women to "be cool,” and advised them that he possessed a gun and that they should do as he said. Defendant ordered Roberts to continue driving and not to look back. Roberts continued driving; and, when Allen turned around, defendant put a gun to her head. Defendant then asked them for their wallets, purses, and other valuables. Ultimately, defendant had Roberts stop the van, he ordered them out of the van, and he drove off. Two days later, the van was recovered, though the contents of the van, including various items of audio equipment, were missing. Additionally, defendant had obtained money and jewelry from the victims at the time of the robbery.
On appeal, defendant first argues that the trial court erred by admitting for impeachment purposes evidence of defendant’s 1980 conviction for conspiracy to commit larceny from a person. However, we conclude that it is not necessary to determine whether the trial court erred in its application of MRE 609 to defendant’s prior conviction because, after reviewing the record and the evidence against defendant, we conclude that any error in admitting evidence of the prior conviction is harmless beyond a reasonable doubt. People v Allen, 429 Mich 558, 612; 420 NW2d 499 (1988).
Next, defendant argues that the trial court erred in admitting evidence of a prior bad act not resulting in conviction concerning the passage of forged checks. See MRE 404(b). However, the evidence defendant complains of was not inadmissible under MRE 404(b) as it was not offered to show defendant’s character, but rather was offered to impeach defendant’s testimony. Specifically, defendant first testified that he did not know one Clifford Loften, but then admitted, when presented with the check at issue which was drawn upon the account of Clifford Loften, that he had received the check from someone who claimed to be Loften. Accordingly, the evidence was properly admitted.
Next, defendant argues that he was denied the effective assistance of counsel. Specifically, defendant objects to the comments made by trial counsel to the jury concerning defendant’s prior conviction, as well as questioning and comments by defense counsel concerning other bad acts defendant had engaged in. These items, however, represent issues of trial strategy and, as such, we will not second guess trial counsel. People v Barnett, 163 Mich App 331, 338; 414 NW2d 378 (1987). The fact that the strategy may not have worked does not constitute ineffective assistance of counsel. Id.
Defendant next argues that there was insufficient evidence to sustain the kidnapping convictions. Specifically, defendant argues that there was insufficient evidence to establish the element of asportation. To establish asportation in a kidnapping case, there must be some moving of the victim and that movement is not sufficient if it is merely incidental to the commission of another underlying lesser crime, unless that underlying crime involves murder, extortion or taking a hostage. People v Adams, 389 Mich 222, 238; 205 NW2d 415 (1973). Defendant argues that the movement of the victims in the case at bar was merely incidental to the commission of the robberies and udaa. In reviewing a sufficiency of the evidence question, the evidence must be viewed in the light most favorable to the prosecutor, and the evidence is sufficient if a rational trier of fact could have found that the essential elements of the crime were proven beyond a reasonable doubt. People v Hampton, 407 Mich 354, 368; 285 NW2d 284 (1979). In the case at bar, we conclude that a rational trier of fact could reach the conclusion that the movement of the victims was for the purposes of kidnapping and not merely incidental to the other underlying crimes. Accordingly, we conclude that there was sufficient evidence to establish the asportation element of the kidnapping charges.
Next, defendant argues that his convictions for both armed robbery and udaa constitute double jeopardy. We disagree. Defendant is correct that the theft of several items at the same time constitutes a single larceny and, therefore, the constitutional prohibitions against double jeopardy prohibit the charging of separate larcenies for each item taken. People v Wakeford, 418 Mich 95, 112; 341 NW2d 68 (1983). With respect to armed robberies, a separate armed robbery may be charged for each victim, though separate armed robberies may not be charged for each item taken. Id. at 112-113.
The flaw in defendant’s argument is that udaa is not a larceny. That is, robbery, like the underlying offense of larceny, requires that the defendant intend to permanently deprive the victim of the property which is the subject of the robbery or larceny. People v Fordham, 132 Mich App 70, 75; 346 NW2d 899 (1984). Udaa, on the other hand, does not require an intent to permanently deprive the owner of his property. People v Hayward, 127 Mich App 50, 62; 338 NW2d 549 (1983), quoting 7A Am Jur 2d, Automobiles and Highway Traffic, § 349, pp 534-535.
Since defendant need not have intended to permanently deprive the victim of her automobile, the jury need not have concluded that the automobile was one of the items of property taken in the armed robbery. That is, if defendant did not intend to permanently deprive the victim of the automobile, then the automobile was not involved in the armed robbery. From the evidence presented, particularly in view of the fact that the van was recovered two days later with numerous items missing from inside the van, the jury could conclude that defendant did not intend to take the van permanently, but merely used it to make his getaway and to transport his ill-gotten booty.
In sum, udaa and armed robbery are separate and distinct offenses and, as such, may be separately punished. Wakeford, supra at 103-104. Therefore, defendant’s convictions for both armed robbery and udaa do not constitute double jeopardy.
Finally, defendant argues that his sentences for armed robbery and kidnapping should shock our judicial conscience. People v Coles, 417 Mich 523; 339 NW2d 440 (1983). They do not.
Affirmed.
Wahls, J., concurred.
ADDENDUM
Subsequent to the filing of this opinion with the Clerk of the Court, but prior to its release to the parties, the Supreme Court decided People v Milbourn, 435 Mich 630, 649-650, 461 NW2d 1 (1990), wherein it abandoned the "shock the conscience” standard and adopted in its place the "principle of proportionality.” We have, on our own motion, reconsidered the matter and conclude that defendant’s sentence does not violate the principle of proportionality. | [
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V. J. Brennan, P.J.
In 1957, plaintiff, Joy Brewster, was hired by Harvey Aluminum, Inc., as a secretary in its Detroit office. In 1968, Martin Marietta Aluminum, Inc., acquired Harvey Alumi num, and by 1971, plaintiff had become an industrial sales representative for Martin Marietta. On September 30, 1975, plaintiff’s employment was terminated for unsatisfactory job performance and insubordination.
Plaintiff began as a secretary for Martin Marietta, but after a time, she was actually functioning much of the time as an inside sales representative. In 1970, plaintiff was working outside sales, part-time, and in 1971 she officially became an outside sales representative. She testified that she received virtually no sales training, despite repeated requests, although other new sales representatives (mainly men) received eight weeks of training.
In May, 1971, Francis X. Bradley, vice-president of Martin-Marietta Aluminum, visited the Detroit office and spoke to the plaintiff, asking her if she was still expected to do secretarial work. When she replied that she was, Bradley said that that was not his intention and that she should be a full-time salesperson.
The plaintiff was a successful sales representative and was in the top 25 percent in sales in the company in 1972 and 1973. She received numerous accolades from her superiors and from her customers. In 1973, Jerry Henry was hired as Midwest General Sales Manager and plaintiff’s supervisor. In 1974, plaintiff was made an Account Executive II and was given a raise of $3,900 a year. She was told the raise was to bring her in line with others in her classification. That year plaintiff had her best year, selling 7.5 million dollars’ worth of aluminum. In late 1974 and 1975, plaintiff testified that aluminum became difficult to sell, particularly in the Detroit area with its numerous automotive accounts.
In February, 1975, plaintiff had a dinnér meet ing with Jerry Henry in Detroit. Plaintiff testified that Henry told her that he thought that the company was moving too quickly in respect to women in sales and that women were not really appropriate in the sales field. When he returned to his office in Chicago, he called and apologized for his statement.
A regional sales meeting was held in Pheasant Run, near Chicago, on April 2, 1975. A blizzard caused a number of sales representatives to be delayed, including the plaintiff, who arrived at dinnertime. Plaintiff testified that Jerry Henry was upset about the delays and that he abruptly told her, in front of the other sales representatives, that she was "skating on thin ice” and not doing a good job. The next day, she stated that he called her "love” several times.
On April 23, 1975, Henry called the plaintiff to Chicago and gave her a memorandum stating that her performance was creating concern, that she had made contacts out of the line of authority, that she had been insubordinate at the dinner meeting, and that she had a poor attitude toward working with the company’s Aluminum Express System and with an inside sales representative at the Lewisport, Kentucky, mill. The memorandum stated that plaintiff was to be put on probation for 30 days.
Plaintiff answered Henry’s memorandum, expressing her concern with the abrupt and drastic nature of the criticism, promising to make every effort to comply with Henry’s directives, and noting a planned trip to Lewisport to iron out any difficulties.
In early May, the plaintiff went to the Lewisport mill to meet with Mr. John Ullrich, plaintiff’s Aluminum Express representative, and Harold Long, Ullrich’s supervisor. Following the meeting, the plaintiff received a note from Harold Long which intimated that the meeting had been a success and that any problems between plaintiff and Ullrich had been substantially solved.
On May 23, 1975, plaintiff met with Henry as scheduled. She testified that Henry told her that she was doing well and had improved in all areas, but that he had to find additional things to "protect his files”. He then gave her a memorandum in which it was stated that she had improved in some areas, but a number of other areas were of "continuing concern”, including unspecified "insubordination”. He also stated that he had taken Ullrich off of her accounts in Lewisport and was substituting Thelma Cecil. The memorandum stated that another review would be done in 90 days.
Plaintiff testified that the market for aluminum in the summer of 1975 was very soft. Nevertheless, she received a congratulatory memorandum from Henry after selling a difficult account. Plaintiff testified that in July, Henry told her that she was doing a great job and was off of probation. In a subsequent meeting, she stated that he told her that William Sullenberger, the General Manager of Sales, would not let him take her off of probation, so another meeting would be required. In July, Thelma Cecil came to Detroit from Lewisport to make sales calls with the plaintiff. Plaintiff testified that the visit had gone well.
In August, 1975, plaintiff testified that she was second or third out of 22 or 23 sales representatives in a national sales contest. On August 20, plaintiff was again called to Chicago and Jerry Henry gave her a third negative memorandum regarding her performance. Plaintiff testified that at this meeting Henry also mentioned that the company had just hired two women in sales and that he thought the company was moving too fast in respect to women in sales.
On September 23, 1975, plaintiff met with Robert McCallum, the company’s Director of Industrial Relations, and was abruptly offered the option of resigning, being terminated, or taking an inside sales job at the mill in Torrance, California. Plaintiff considered the Torrance job a demotion and refused it. Her employment was terminated on September 30,1975.
On April 23, 1976, Brewster filed a complaint in Wayne County Circuit Court against Martin Marietta Aluminum, Inc., alleging that she was subjected to sex discrimination and age discrimination in violation of Michigan statutes. Plaintiff amended her complaint on August 25, 1976, to name as a defendant Martin Marietta Aluminum Sales, Inc., a wholly owned subsidiary of Martin Marietta Aluminum, Inc. On September 28, 1978, plaintiff commenced a second action against Martin Marietta Aluminum, Inc., and Martin Marietta Aluminum Sales, Inc., (jointly and severally) alleging as causes of action intentional infliction of emotional distress, breach of an implied contract of employment and negligent breach of that implied contract. On October 29, 1979, the cases were consolidated for trial by stipulation and order of the Wayne County Circuit Court.
The matter was tried before a jury beginning on September 7 and continuing through October 1, 1982. Prior to submission of the case to the jury, the trial court granted defendants’ motion for a directed verdict on the intentional infliction of emotional distress claim and plaintiff withdrew her age discrimination claim. (Plaintiff does not appeal from the directed verdict on the emotional distress tort claim.)
The jury was instructed on the theories of: breach of an implied employment contract (damages for economic loss); negligent breach of the implied employment contract (damages for mental distress, suffering and humiliation), and sex discrimination as a result of the wrongful termination (damages for unequal pay). The jury found in favor of plaintiff on all theories of recovery and awarded her $740,000 for economic loss as a result of the breached employment contract, mental distress damages of $500,000 as a result of the "negligent” breach, and $30,000 for unequal pay because of sex discrimination.
The defendants moved for a judgment notwithstanding the verdict or, in the alternative, for a new trial on all counts. It appears from the record that in plaintiff’s supplemental answer to defendants’ motion for judgment notwithstanding the verdict, plaintiff set forth a "conditional motion to modify” the judgment in the event that the trial court ruled in favor of defendants on the "negligent” breach claim, whereby plaintiff requested that the court either reassign the mental distress damages to the sex discrimination claim or "correct” the legal theory of negligence to allow plaintiff her damages under the theory of pure negligence in "undertaking to investigate good cause for plaintiff’s termination”. It also appears from the record that plaintiff agreed with defendants that the $30,000 award for unequal pay should be set aside because calculations were apparently made from 1968 and there may have been statute of limitation problems relating to the years prior to 1973.
On March 11, 1983, the trial court denied defendants’ motions on the economic loss award which related to the breach of an implied employment contract and evidence supporting the sex discrimination claim and granted defendants’ motion for a judgment notwithstanding the verdict on the mental distress award for plaintiff’s "negligent” breach of contract claim. The court determined that such a claim was not supported by the law in Michigan. Also, the court set aside the $500,000 awarded in mental distress damages for the "negligent” breach verdict, and plaintiff’s "conditional” motion for reassignment of the $500,000 verdict was denied.
On March 18, 1983, in a somewhat confusing motion for a new trial on the negligence claim only, plaintiff argued that she was entitled to a new trial on defendants’ alleged negligence because there was evidence to support negligence apart from the breach of employment contract. The court disagreed and denied plaintiff’s motion on grounds of insufficiency of the evidence.
Defendants appeal as of right from the March 11, 1983, order which partially denied defendants’ motion for judgment notwithstanding the verdict (and new trial), and plaintiff cross-appeals as of right from the March 11, 1983, order which granted defendants judgment notwithstanding the verdict on the "negligent” breach verdict and denied plaintiff’s motion to reassign the mental distress damages. Plaintiff also appeals from the denial of her motion for a new trial. The appeals were consolidated for our review by order of this Court dated May 30,1984.
Defendants’ first claim is that the jury’s verdicts on the sex discrimination and breach of implied employment contract claims were against the great weight of the evidence and that the trial court abused its discretion by denying defendants’ motion for a new trial. We disagree.
The grant or denial of a motion for a new trial is a matter within the discretion of the trial court. Wigginton v City of Lansing, 129 Mich App 53; 341 NW2d 238 (1983), lv den 419 Mich 880 (1984). Where there is competent evidence to support a jury’s verdict, it should not be set aside. Bell v Merritt, 118 Mich App 414; 325 NW2d 443 (1982), lv den 417 Mich 954 (1983). GCR 1963, 527.1(5), now MCR 2.611(A)(e), provides for a new trial if the verdict is against the great weight of the evidence. This rule, however, "does not give the trial court unlimited power to grant a new trial merely because it does not agree with the verdict. The court may not substitute its judgment for that of the finders of fact.” Bell, p 422 (citation omitted). Where there is competent evidence to support the jury’s verdict, it should not be set aside. Id.
We initially note that, at the time of plaintiffs discharge in 1975, the former Michigan State Fair Employment Practices Act (FEPA), MCL 423.301 et seq.; MSA 17.458[1] et seq., was in effect. That act was repealed by 1976 PA 453 (effective March 31, 1977), which is now known as the Elliott-Larsen Civil Rights Act, MCL 37.2101 et seq.; MSA 3.548(101) et seq. Under FEPA, MCL 423.303a; MSA 17.458(3a) it was an unfair labor practice:
"(a) For any employer, because * * * of the sex of any individual, to refuse to hire or otherwise to discriminate against him with respect to hire, tenure, terms, conditions or privileges of employment.”
The Elliott-Larsen act was in effect at the time of defendant’s trial. We have examined case law arising under both FEPA and the Elliott-Larsen act to assist us in analyzing the defendants’ claims of error. In the instant case, the jury was instructed on the disparate treatment theory of sex discrimination.
At the time of trial, the law in Michigan required the following proof to establish a prima facie case of disparate treatment discrimination. The plaintiff had to show that she was a member of a class entitled to protection under the FEPA (now under the Elliott-Larsen Civil Rights Act), and that she was treated differently for the same or similar conduct from those who were not members of the protected class. See Heath v Alma Plastics Co, 121 Mich App 137; 328 NW2d 598 (1982) (difference in salary under the Elliott-Larsen act). See also Civil Rights Comm v Chrysler Corp, 80 Mich App 368, 373; 263 NW2d 376 (1977) (wrongful discharge based on race discrimination under the FEPA).
Our Court also provided for an alternative method of establishing a prima facie case under the disparate treatment theory, labeling it as "intentional discrimination”. To establish a prima facie case under this method, the plaintiff had to prove that she was discharged and that the individual (defendant) discharging her was predisposed to discriminate against females and had acted on the predisposition in discharging her. See Civil Rights Comm, supra, p 374 fn 3; Schiapani v Ford Motor Co, 102 Mich App 606, 617; 302 NW2d 307 (1981). See also Jenkins v Southeastern Michigan Chapter, American Red Cross, 141 Mich App 785; 369 NW2d 223 (1985). The current Standard Jury Instructions on Employment Discrimination, Disparate Treatment, approved by the Michigan Supreme Court for use by the courts in Michigan as of January, 1985, sets forth the following elements: Plaintiff had the burden of proving that the defendant discharged her and that her sex was one of the motives or reasons which made a difference in defendant’s determination of whether or not to discharge her. See SJI2d 105.04. Thus, plaintiff had to prove that she was discriminated against because of her sex and that the discrimination was intentional — that one of the motives or reasons for her discharge was that she was female. "Sex * * * does not have to be the only reason, but it does have to be one of the reasons which made a difference in determining whether or not to discharge the plaintiff.” SJI2d 105.02.
First, our review of the record indicates that the trial court’s instructions on the two methods for proving a prima facie case of sexual discrimination were proper and not contrary to the law at the time of trial. Furthermore, we point out that the instructions as they related to the allocation of proofs were based on burdens and order of proofs for establishing a prima facie case of discrimination (disparate treatment) as set forth by the United States Supreme Court in McDonnell Douglas Corp v Green, 411 US 792; 93 S Ct 1817; 36 L Ed 2d 668 (1973).
Our Court explained the McDonnell Douglas proof allocations in Clark v Uniroyal Corp, 119 Mich App 820, 824-826; 327 NW2d 372 (1982). See also Texas Dep’t of Community Affairs v Burdine, 450 US 248, 252-253; 101 S Ct 1089; 67 L Ed 2d 207 (1981), reaffirming the McDonnell Douglas holding.
The new SJI2d instruction on the burden of proof in discrimination cases does not rely upon the McDonnell Douglas case. An instruction based on McDonnell Douglas, however, may be appropriate in a proper case. See Bogue v Teledyne Continental Motors, 136 Mich App 374; 356 NW2d 25 (1984) (handicap discrimination). We find that the instructions given in the instant case were not improper in relation to the McDonnell Douglas proof allocations and were appropriate. Thus, defendant’s argument concerning the instruction is without merit.
Second, we do not find any inconsistencies in the law on discrimination at the time of trial and standards of establishing a prima facie case under the new SJI2d instruction. Third, our review of the entire record shows that there was competent evidence to support a verdict against defendant on the sex discrimination claims for both unequal pay and wrongful discharge. Denial of defendants’ motion for a new trial on this issue was not an abuse of discretion. Defendants also argue that the trial court should have granted defendants’ motion for judgment notwithstanding the verdict on the discrimination claim. We disagree. The evidence was not insufficient as a matter of law to support a judgment for the plaintiff.
"A judgment notwithstanding the verdict on defendant’s motion is appropriate only if the evidence is insufficient as a matter of law to support a judgment for plaintiff. Basic Food Industries, Inc v Grant, 107 Mich App 685, 695; 310 NW2d 26 (1981). In reaching a decision, the trial court must view the evidence in the light most favorable to the plaintiff and give the plaintiff the benefit of every reasonable inference that could be drawn from the evidence. Isom v Farrugia, 63 Mich App 351, 354-355; 234 NW2d 520 (1975). If after viewing the evidence in this manner reasonable men could differ, the question is one for the jury and judgment notwithstanding the verdict is improper. Id.” Drummey v Henry, 115 Mich App 107, 110-111; 320 NW2d 309 (1982), lv den 417 Mich 895 (1983).
A judgment notwithstanding the verdict "may be allowed only if there is insufficient evidence, as a matter of law, to make an issue for the jury”. Killen v Benton, 1 Mich App 294, 298; 136 NW2d 29 (1965). In our opinion, there was more than sufficient evidence presented to create a jury question on the issue of whether plaintiff’s discharge was motivated by the fact that she was female. Denial of defendants’ motion was proper.
Our review of the evidence also supports the denial of defendants’ motion for a new trial brought in the belief that the jury’s verdict on the breach of implied contract claim was against the great weight of the evidence. Plaintiff herein sued defendants for the breach of an implied contract of employment claiming that she was told by management personnel that as long as she did the job, she would have the job. Plaintiffs theory was that defendants could not terminate her employment without just cause and that her employment relationship with defendants was not terminable at the will of defendants.
In Toussaint v Blue Cross & Blue Shield of Michigan, 408 Mich 579; 292 NW2d 880 (1980), reh den 409 Mich 1101 (1980), the Court held that:
"1) a provision of an employment contract providing that an employee shall not be discharged except for cause is legally enforceable although the contract is not for a definite term — the term is 'indefinite’, and
"2) such a provision may become part of the contract either by express agreement, oral or written, or as a result of an employee’s legitimate expectations grounded in an employer’s policy statements.” 408 Mich 598.
The Toussaint Court explained: "[A]n employer’s express agreement to terminate only for cause, or statements of company policy and procedure to that effect, can give rise to rights enforceable in contract.” 408 Mich 610.
Furthermore, the Court stated:
"We see no reason why an employment contract which does not have a definite term — the term is 'indefinite’ — cannot legally provide job security. When a prospective employee inquires about job security and the employer agrees that the employee shall be employed as long as he does the job, a fair construction is that the employer has agreed to give up his right to discharge at will without assigning cause and may discharge only for cause (good or just cause). The result is that the employee, if discharged without good or just cause, may maintain an action for wrongful discharge.
"Suppose the contracts here were written, not oral, and had provided in so many words that the employment was to continue for the life of the employee who could not be discharged except for cause (including as a cause, if you will, his attaining the company’s mandatory retirement age). To construe such an agreement as terminable at the will of the employer would be tantamount to saying, as did the Court of Appeals in Toussaint, that a contract of indefinite duration 'cannot be made other than terminable at will by a provision that states that an employee will not be discharged except for cause’ (emphasis supplied) and that only in exceptional circumstances, where there are 'distinguishing features or provisions or a consideration in addition to the services to be rendered’, would an employee be permitted to bargain for a legally enforceable agreement providing job security.” 408 Mich 610-611 (footnote omitted).
We believe that there was competent evidence presented to show that there was an implied contract on defendants’ part not to terminate or discharge plaintiff without just cause and that defendants’ conduct through supervisory and management agents of placing plaintiff on probation for alleged problems with her work performance was sufficient to establish a policy of termination, on the facts presented in this case, only for just cause. In fact, the September 29, 1975, certified letter sent to plaintiff from Robert W. McCullum, Director of Industrial Relations, stated that "confirming Mr. Jerry Henry’s discussion with you in Detroit on September 23, 1975, your employment is terminated due to unsatisfactory job performance and insubordination”. McCullum’s trial tes timony revealed that defendants’ company manuals contained no definition of insubordination or probation and to his knowledge no employee had ever been placed on probation or terminated for insubordination. Under cross-examination, plaintiffs immediate supervisor, Jerry Henry, testified that plaintiff was not fired because she was not a good salesperson. Thus, it appears to us that the probationary period in which plaintiff was given an opportunity to change or correct her job performance and alleged insubordination and the wording of his letter, among other things such as the memoranda to plaintiff of the excellent work she had done prior to the period of probation, shows that defendants had established a policy pertaining to her by conduct and words to terminate only for just cause upon which she could rely. It also appears from the record that one of the major reasons for plaintiffs termination was the fact that she was a woman and that the jury could easily have inferred from the evidence that plaintiffs employment was not terminated for just cause or any of the reasons relied upon by defendants.
"Even under a broad reading, * * * Toussaint requires that an employee seeking to establish an implied contract must have, at least, entertained a belief that the personnel policies would be applied consistently. Toussaint, supra, p 613.” Longley v Blue Cross & Blue Shield of Michigan, 136 Mich App 336, 341; 356 NW2d 20 (1984).
As explained in Toussaint, supra:
"While an employer need not establish personnel policies or practices, where an employer chooses to establish such policies and practices and makes them known to its employees, the employment relationship is presumably enhanced. The employer secures an orderly, cooperative and loyal work force, and the employee the peace of mind associated with job security and the conviction that he will be treated fairly. No pre-employment negotiations need take place and the parties’ minds need not meet on the subject; nor does it matter that the employee knows nothing of the particulars of the employer’s policies and practices or that the employer may change them unilaterally. It is enough that the employer chooses, presumably in its own interest, to create an environment in which the employee believes that, whatever the personnel policies and practices, they are established and official at any given time, purport to be fair, and are applied consistently and uniformly to each employee. The employer has then created a situation 'instinct with an obligation’.” (Footnotes omitted.) 408 Mich 613.
We also point out that the Toussaint Court agreed:
"[T]hat where an employer has agreed to discharge an employee for cause only, its declaration that the employee was discharged for unsatisfactory work is subject to judicial review. The jury as trier of fact decides whether the employee was, in fact, discharged for unsatisfactory work. * * * There must be some review of the employer’s decision if the cause contract is to be distinguished from the satisfaction contract.
''The role of the jury will differ with each case. Where the employer claims that the employee was discharged for specific misconduct — intoxication, dishonesty, insubordination — and the employee claims that he did not commit the misconduct alleged, the question is one of fact for the jury: did the employee do what the employer said he did?” 408 Mich 621 (Footnotes omitted.)
The jury’s verdict on the breach of implied contract verdict was not against the great weight of the evidence. Therefore, denial of defendants’ motion for a new trial on this claim was not an abuse of discretion.
Defendants’ third argument is that the jury’s verdict was excessive.
The jury awarded the plaintiff $1,270,000, of which $30,000 was for unequal pay from 1968 through 1973, $500,000 was for the negligent breach causing mental distress, and $740,000 for economic loss from the breach of the implied contract. The court granted judgment notwithstanding the verdict on the plaintiff’s negligent breach of contract claim and thereby disallowed the mental distress damages, leaving intact the economic loss award of $740,000. We will consider first the defendants’ position of excessiveness of the verdict as it related to the economic loss award of $740,000. A motion for new trial on the issue of excessive damages was governed at the time of trial by GCR 1963, 527.1(3) and (4), now MCR 2.611(A)(1)(c) and (d).
"(1) Grounds. A new trial may be granted to all or any of the parties and on all or part of the issues whenever their substantial rights are materially affected, for any of the following causes:
"(3) Excessive or inadequate damages appearing to have been influenced by passion or prejudice;
"(4) A verdict which is clearly or grossly inadequate or excessive; * * *.”
Our review of the record reveals that there is no indication that the jury’s verdict was influenced by passion or prejudice. The trial was not particularly sensational, and neither plaintiff’s counsel’s argument nor the presence of publicity concerning the amateurish Bendix takeover maneuvers resulted in any prejudice to the defendant.
With regard to subsection (4) in the former court rule, 3 Honigman & Hawkins, Michigan Court Rules Annotated (2d ed), pp 111-112, comment states:
"While both clauses (3) and (4) are concerned with inadequate or excessive damages, it presumably takes a more shocking disparity between what the jury awarded and what the court thinks permissible to justify a new trial under clause (4), when there has been no showing of passion or prejudice.
"In this matter of damages, much must be left to the discretion of the trial judge. 'The presumption will be indulged that if the damages were excessive, relief would have been granted by the lower court.’ Aho v Conda, 1956, 347 Mich 450, 455; 79 NW2d 917, 920.”
It has often been stated that a court will not overrule a jury’s verdict unless it is so excessive as to "shock the judicial conscience”. Watrous v Conor, 266 Mich 397, 401-402; 254 NW 143 (1934); Pippen v Denison Division of Abex Corp, 66 Mich App 664; 239 NW2d 704 (1976), lv den 399 Mich 823 (1977). Thus, "jury verdicts [are] set aside by appellate courts as excessive only in rare instances”. Cryderman v Soo Line R Co, 78 Mich App 465, 473; 260 NW2d 135 (1977), lv den 402 Mich 867 (1978).
This Court has granted remittitur in cases in which a jury’s award was far in excess of the damages sought. Tomei v Bloom Associates, Inc, 75 Mich App 661, 668-669; 255 NW2d 727 (1977); Gillispie v Bd of Tenant Affairs of the Detroit Housing Comm, 122 Mich App 699; 332 NW2d 474 (1983), lv den 417 Mich 1100.37 (1983).
In the instant case, the plaintiff asked damages of one million dollars for each count. She presented a rationale for lost wages from the date of the termination of her employment to her retirement age, plus benefits, which totalled $1.3 mil lion. The jury’s award of $740,000 for economic loss was a little over half of that. The plaintiffs chart included a 10% a year raise, which the jury may have believed was excessive.
Defendants argue that the plaintiff had a duty to mitigate her damages. In Higgins v Kenneth R Lawrence, DPM, PC, 107 Mich App 178, 181; 309 NW2d 194 (1981), this Court stated:
"It is well established that a plaintiff must make every reasonable effort to mitigate damages. * * * Such a defense, however, is an affirmative one, and proof of plaintiff’s failure to mitigate rests upon the defendant. * * * A wrongfully discharged employee is obligated to mitigate damages by accepting employment of a 'like nature.’ * * * The criteria for determining 'like nature’ include the type of work, the hours of labor, the wages, tenure, working conditions, etc. Whether or not an employee is reasonable in not seeking or accepting particular employment is a question for the trier of fact.” (Citations omitted.)
The defendants contend that the plaintiff should have accepted the offered "inside” sales job in Torrance, California. According to 22 Am Jur 2d, Damages, § 72, pp 107-108:
"An offer by the employer to take the employee back in a position inferior to that from which he was wrongfully discharged cannot be used to minimize the damages. It has also been held that if anything has occurred to render further association between the parties offensive or degrading to the employee, an offer of further employment by the employer will not diminish the employee’s recovery if the offer is not accepted.” (Footnotes omitted.)
It was left to the jury to decide whether the inside sales job was a demotion, as plaintiff contended, there being testimony on both sides of this issue. Further, it has been held elsewhere that a plaintiff is not required to accept even a similar job in a different state in mitigation of damages. Id., 106-107. Defendants further argue that plaintiff had an opportunity to work for John Lynch, which she did not pursue. Mr. Lynch’s testimony was that he tried to get the plaintiff interested in some sort of business relationship, but that she was depressed and he could not ignite her enthusiasm. If there was a concrete offer from Mr. Lynch, his terms were too vague to be offered by the defendants in mitigation of damages. As to plaintiff’s other attempts to find employment, there was evidence that she was rejected at one aluminum company because her "references didn’t check out”. She testified that she applied to a number of companies, but was not successful.
From the evidence presented at trial, the jury could easily have concluded, considering the plaintiff’s demoralized state following the termination of her employment, the stigma of the termination, the fact that, in the world of industrial metal sales, it was probably well known that she had filed a sex discrimination suit against her former employers and, finally, the depressed job market in southeastern Michigan in the late 1970’s and 1980’s, that the plaintiff was unable to secure employment of "like nature”.
The judge below did not abuse his discretion when he denied a new trial or remittitur on the $740,000 economic loss jury award.
We have reviewed the remaining claims of error raised by defendants and find them to be without merit. We hereby affirm the jury verdict of $740,-000 for economic loss against the defendants.
Plaintiff argues on cross-appeal that the trial court erred in failing to instruct the jury that it could award damages for mental distress under plaintiff’s discrimination claim. Plaintiff claims that under the Michigan State Fair Employment Practices Act (FEPA), MCL 423.301 et seq.; MSA 17.458[1] et seq., replaced by the Elliott-Larsen Civil Rights Act, MCL 37.2101 et seq.; MSA 3.548(101) et seq., damages for mental distress may be awarded.
In Boscaglia v Michigan Bell Telephone Co and Pacheco v Clifton, 420 Mich 308; 362 NW2d 642 (1984), the principal issue facing the Court was whether the exclusive remedy of the Worker’s Disability Compensation Act, MCL 418.131; MSA 17.237(131), barred an action seeking recovery for physical, mental, or emotional injury resulting from an employer’s violation of the FEPA or the Elliott-Larsen Civil Rights Act. Although holding that such actions were not barred, the Court did not offer an opinion on the question of whether physical, mental and emotional injuries were compensable under these acts because the question was neither briefed nor argued. The Court did state, however:
"We think it self-evident, however, assuming the Legislature in enacting the civil rights acts intended to provide compensation for physical, mental or emotional injury resulting from discrimination, that it did not intend that objective would be defeated by the bar of the exclusive remedy provision of the workers’ compensation act. Whatever may have been the intention of the Legislature in enacting the exclusive remedy provision of the workers’ compensation act, if it intended in enacting civil rights legislation that workers discharged in violation of such legislation could recover for resulting physical, mental or emotional injury that intention would necessarily supersede or modify the scope of other legislation that otherwise would defeat the intent to permit such recovery.” 420 Mich 316-317.
In Pompey v General Motors Corp, 385 Mich 537; 189 NW2d 243 (1971), the Court stated:
" Tn cases where there has been illegal discrimination the person aggrieved has clearly a civil right of action for damages, and this is true although the provision for the enforcement of a civil rights statute under which the complainant claims redress provides for a criminal prosecution only. This right accrues by virtue of the general rule that where a statute imposes upon any person a specific duty for the protection or benefit of others, neglect or refusal to perform the duty creates a liability for injury or detriment caused by such neglect or refusal, if the injury or hurt is of the kind which the statute was intended to prevent.’ ” 385 Mich 556, quoting Bolden v Grand Rapids Operating Corp, 239 Mich 318, 328; 214 NW 241 (1927).
The defendants interpret this to mean that a jury is limited in its award of damages to those damages provided for in the statute, i.e., those awardable by the Fair Employment Practices Commission (under the now repealed FEPA). Since the commission was not authorized to award damages for mental distress, the defendants argue that such damages are unavailable to the plaintiff here. Defendants also state that granting such damages pursuant to a statute which does not provide for them violates rules of statutory construction. But the Pompey Court dealt with this argument:
"The general rule, in which Michigan is aligned with a strong majority of jurisdictions, is that where a new right is created or a new duty is imposed by statute, the remedy provided for enforcement of that right by the statute for its violation and nonperformance is exclusive.
"But courts have forged exceptions to these general rules when the statutory rights infringed were civil rights. Although there is some authority to the contrary most decisions have held that a person aggrieved by the violation of a civil rights statute is entitled to pursue a remedy which will effectively reimburse him for or relieve him from violation of the statute, notwithstanding the statute did not expressly give him such right or remedy.” 385 Mich 552-553. (Citations omitted.)
It is clear that the plaintiff was not limited in damages by the express terms of the FEPA.
In Slayton v Michigan Host, Inc, 122 Mich App 411, 416-417; 332 NW2d 498 (1983), a case brought under the Elliott-Larsen Civil Rights Act, the Court held:
"[A] victim of discrimination may bring a civil suit to recover for damages for any humiliation, embarassment, outrage, disappointment, and other forms of mental anguish which flow from the discrimination injury.”
We believe that redress for plaintiff’s emotional injuries was available under the FEPA as it is now available under the Elliott-Larsen Civil Rights Act.
Plaintiff’s next claim is that the trial court erred by granting defendants a judgment notwithstanding the verdict on the negligent breach of implied contract claim.
At trial, the plaintiff claimed that defendants were negligent in giving her "mixed signals” regarding her performance, in terminating her employment, and in failing to exercise due care in investigating her coemployees’ complaints.
We do recognize that in some instances a breach of a contract may give rise to an independent action arising in tort when there is a breach of duty which is distinct from the breach of contract. See Hart v Ludwig, 347 Mich 559, 565; 79 NW2d 895 (1956):
"Or, as Prosser puts it (Handbook of the Law of Torts [1st ed], §33, p 205) 'if a relation exists which would give rise to a legal duty without enforcing the contract promise itself, the tort action will lie, otherwise not’.”
Our review of plaintiffs complaint, proofs, and claims leads us to conclude that, because there was no breach of duty distinct from the breach of contract, plaintiffs cause of action arose from a breach of promise or the nonfeasance of a contractual obligation and her action is in contract, not in tort. A relationship did not exist in this case which would give rise to a legal duty without enforcement of the contract promise itself. See Hart, supra, p 565. See also Prosser and Keeton on Torts (5th ed), § 92, pp 660-662 ("[T]he affirmative act of discharging an employee is uniformly considered to be no more than non-performance of the agreement to continue employment.”)
Although plaintiff claims on appeal that the proper term should be "negligent performance of the contract” rather than "negligent breach”, the jury was instructed on a "negligent breach” theory. Plaintiff points to no cases recognizing a cause of action for "negligent breach of contract”. The actions of defendants which plaintiff claims as evidence for her theory of "negligent breach” all involve activities leading to her discharge and the breach of the implied contract of employment. The trial court acted properly in vacating the jury’s award on this count and did not abuse its discretion in denying plaintiff’s motion for a new trial on defendants’ alleged tort liability grounded on negligence alone. We also point out that mental distress damages are not recoverable for breach of an employment contract. Valentine v General American Credit, Inc, 420 Mich 256; 362 NW2d 628 (1984).
We find it necessary, however, to remand the instant case for partial new trial solely on emotional or mental distress damages only as they relate to the sex discrimination claim. The trial court stated during the hearing on defendants’ motion for a new trial that the plaintiff should have been allowed to have the jury instructed on mental distress damages as they related to the sex discrimination claim and, therefore, plaintiff was entitled to a hearing on this issue.
We agree. We also point out that the trial court was procedurally correct in denying plaintiff’s motion to reassign the $500,000 mental distress award to the sex discrimination verdict because it would have been an invasion of the province of the jury to do so. It was not for the court to speculate on whether the jury would have awarded the same damages for emotional distress suffered because of sex discrimination as it awarded plaintiff for the "negligent breach” claim. Because the jury was not instructed on the mental distress damages that it could have awarded plaintiff as a result of the discriminatory discharge, and the jury did find that plaintiff was entitled to such damages for a claim which should not have gone to the jury, the remand is necessary here.
We do recognize that the Michigan Supreme Court disapproved of partial new trials limited to the issue of damages (i.e. in personal injury cases), but the Court does provide for an exception in situations where liability is "clear”. See Trapp v King, 374 Mich 608; 132 NW2d 640 (1965). See also Dooms v Stewart Bolling & Co, 68 Mich App 5, 23; 241 NW2d 738 (1976), lv den 397 Mich 862 (1976). "A departure from the notion against granting partial new trials is justified where the circumstances of the case establish that justice will be fully and better served.” We believe that the instant case presents a situation for a partial new trial on the issue of emotional distress damages only under the sexual discrimination claim because defendants’ liability for sexual discrimination has been clearly established.
We hereby affirm the $740,000 jury verdict for economic loss and the setting aside of the $500,000 in mental distress damages for the negligent breach claim. We also affirm the court’s denial of defendants’ motion for a new trial on the sex discrimination and breach of implied contract claims.
We also affirm the trial court’s denial of plaintiffs motion for a new trial on defendants’ liability in negligence. However, we remand for a partial new trial on mental distress damages arising out defendants’ liability for sex discrimination. | [
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Clark, J.
Under a bill for foreclosure of a mortgage to it as trustee, and securing an issue of bonds, plaintiff filed petition for appointment of receiver. From the order of appointment, defendant Elias Wolf, mortgagor, has appealed. The mortgage was given May 19, 1925, and before the effective date of Act No. 228, Pub. Acts 1925 (3 Comp. Laws 1929, §§ 13498, 13499), authorizing assignment of rents and profits of property mortgaged to trustee as further security. The mortgage contains such assignment. In 1930, when the debt secured had been paid in part, an agreement was made between the parties extending time of payment and increasing amount of indebtedness secured. The agreement is quite complete, and while it does not repeat all the provisions of the mortgage, it does adopt and incorporate them by reference. The assignment may be in a writing at or after the execution of the mortgage. Security Trust Co. v. Sloman, 252 Mich. 266. If this provision with respect to rents and profits is valid, a receiver may be appointed. Guaranty Trust Co. v. Feldman, 247 Mich. 524.
We are in accord with the following opinion of the trial judge, finding a proper assignment and ordering appointment of receiver:
“I think that a fair reading of the documents, and particularly of the agreement of 1930, leads to the conclusion that under that agreement, based as it is upon an increase of the mortgage indebtedness, the parties contemplated that all possible security should be given. It appears to be a reasonable conclusion that they contemplated that all of the terms and provisions of the mortgage of 1925, including the assignment of rents as further security, were to be effective from and after 1930. This being the case, the situation is the same as though the latter agreement had in terms contained a new assignment of rents by way of security. Therefore, * * * there is reason for the appointment of a receiver.”
Affirmed, with costs.
McDonald, C. J., and Potter, North, Fead, Wiest, and Butzel, JJ., concurred. Sharpe, J., did not sit. | [
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Butzel, J.
In 1927, the Detroit City Service Company was incorporated under the laws of this State for the purpose of continuing the ice and fuel business formerly carried on by the General Necessities Corporation, whose plants, equipment, fixtures, good will, etc., it acquired. The General Necessities Corporation had manufactured and sold over 60 per cent, of the artificial ice purchased by the people of the city of Detroit and vicinity. It had owned a large number of plants at various points in or near the city of Detroit, systematically located so that, with the use of horses and wagons or motor trucks, all consumers could he conveniently served from a neighboring plant. During the winter time a large portion of the transportation equipment had been employed in the fuel business. The plants were so coordinated that they constituted one large business, conducted principally from a single accounting and management office.
Owing to financial difficulties, the General Necessities Corporation threatened to default on $3,000,000 in bonds and $1,000,000 in notes, which had been underwritten and sold to the public through the assistance of Hoagland, Allum & Company and other investment bankers. In order to avert this default, the hauliers formed the Detroit City Service Company, referred to herein as the “service company,” which acquired the plants, machinery, fixtures, and other equipment of the General Necessities Corporation used in the ice and fuel business, as well as some real estate. At the same time the bankers organized the Detroit City Service Realty Company, which took over the larger part of the real estate of the General Necessities Corporation, unemployed in its business. The realty company also acquired two plants, which it rented to the service company. The realty company is not involved in the present litigation.
The General Necessities Corporation was the owner of all of the property it turned over to the service company, with the exception of a cold-storage plant which was being purchased on land contract, and on which there was still $400,000, or thereabouts, due at the time of its acquisition by the service company. This contract was subsequently abandoned.
The capital stock of the service company consisted of 25,000 shares of preferred stock, valued at $100 a share, and 200,000' shares of no par value stock. Sixteen thousand shares of the preferred stock and all of the no par stock were subscribed for and issued. All of the common stock, with the exception of the few qualifying shares taken in the name of the directors, was subscribed for by William K. Hoagiand, of the firm of Hoagiand, Allum & Company. He also subscribed as trustee for all of the preferred stock that was issued. Hoagiand became a director and the treasurer of the company, and appears to have been closely identified with the company’s affairs from its very inception.
The articles of association of the service company placed the following valuations upon the assets it acquired :
Land, buildings and improvements, after deducting $400,000 due on the land contract 1.........."....................$ 3,891,836
Machinery, equipment, delivery equipment, supplies, furniture and fixtures, etc................................. 2,135,364
Commodities and inventories.......... 300.000
Deferred discount on bonds, prepaid taxes and insurance, etc.............. 440.000
Investments in subsidiaries............ 500.000
Cash ................................ 100.000
In order to raise funds to purchase these assets and to continue the business, the service company executed a first and open end mortgage of $10,000,-000 to the Union Trust Company, as trustee, to secure $10,000,000 of first mortgage six and one-half per cent, gold bonds, $3,000,000 of which were issued at once. Seven million dollars of additional bonds might be issued from time to time under conditions set forth in the indenture, upon the acquisition of other properties and filing of supplemental mortgages contemporaneously therewith, so as to bring the new properties under the lien of the original indenture. The mortgage was dated July 1, 1927, and is referred to herein as the first mortgage. It covered the real estate, machinery, tools, implements and appliances, supplies, good will, etc., of the service company. The personal property is not described in great detail in the mortgage, but there is an omnibus clause covering all of the company’s property, both real, personal, and mixed, and also all such property that might be acquired thereafter.
There was expressly excluded from the lien of the mortgage the accounts receivable, choses in action, inventory of merchandise, and capital stock of subsidiary or other corporations. As the inventory amounted to $300,000 at the time of the organization, it will be seen that the value of the unmortgaged property ran into a large figure. The mortgage also covered “tolls, rents, revenues, issues, income, product, and profits thereof.” The mortgage further' provided that the personal property and chattels conveyed or intended to be conveyed by or pursuant to the indenture should be real estate for all purposes of the indenture and held and deemed to be fixtures and appurtenances. They were not to be used or sold separately from the real estate except as otherwise provided in the instrument. The mortgage specifically permitted the sale of fixtures, equipment, machinery, apparatus, appliances, tools, implements, and delivery equipment that were worn out or unserviceable, antiquated, or unnecessary in the conduct of the business, but upon such sale they were to be replaced in due course with new fixtures, etc., which should forthwith become subject to the lien of the indenture.
The mortgage provided that, in the event of default, the trustee should be entitled to the possession of the mortgaged property and also to the rents, in come, issues, and profits, after giving the notice required by Act No. 228, Pub. Acts 1925 (3 Comp. Laws 1929, §§13498, 13499). It was further provided that, upon the occurrence of oxie or more events of default and the filing of a bill in equity or the commencement of other judicial proceedings, the trustee should be entitled, as, a matter of right, to the appointment of a receiver or receivers of the mortgaged and pledged properties, and of the rents, income, issues, and profits thereof pending such proceedings, with such powers as the court making such appointment should confer.
The mortgage was duly executed and recorded as a real estate mortgage. It never has been filed as a chattel mortgage, though it contains a duly-executed affidavit, showing adequacy of security, etc., in the form required for the recording of chattel mortgages (3 Comp. Laws 1929, § 13424). The mortgage bears a certificate of the county treasurer showing that a $15,000 mortgage tax was paid in accordaxice with 1 Comp. Laws 1929, § 3642.
In January, 1928, the service company, in order to acquire the properties of the National Ice Company axid the Detroit Consumers Company, issued $1,300,-000 of first mortgage bonds under the $10,000,000 open end mortgage hereinbefore described. In Octobex', 1928, an additional $260,000 in first mortgage bonds were issued to pay in part for the acquisition of properties of the Gaukler Ice & Fuel Company of Pontiac, Michigan. In both instances, supplemental mortgages were duly executed and properly recorded as real estate mortgages.
In addition to the first mortgage of $10,000,000, the company on its organization issued $1,250,000 of five-year six and one-half per cent, gold notes, dated July 1, 1927, and .a year later, $700,000 of six axxd one-half per cent, gold notes, payable in four years. Both note issues were secured by indentures running to the Union Trust Company, trustee.
On January 1, 1930, the company executed a second mortgage to the Guaranty Trust Company, as trustee, to secure $500,000 of bonds issued thereunder. The mortgage was recorded as a real estate mortgage and also properly filed as a chattel mortgage. It recites that it is junior, subject, subordinate, and subservient to the liens, etc., of the first mortgage, which it describes as being a mortgage on both the real and personal property.
The Detroit Trust Company became the successor-trustee to the Union Trust Company under the first mortgage and supplements thereto. The Equitable & Central Trust Company succeeded the Guaranty Trust Company as trustee under the second mortgage, and the Union Guardian Trust Company is the present trustee under the gold note indentures.
The service company was unable to meet its obligations. On January 16,1931, the Detroit Insurance Agency filed a bill of complaint against the service company as a general creditor, alleging the latter’s inability to meet the current requirements of its funded indebtedness. The bill alleged further that the service company was burdened with real estate which could not be disposed of on account of market conditions, and that it could not meet its many obligations. The plaintiff sought the appointment of a receiver. The service company, in its answer, admitted the allegations, and on January 16, 1931, the Union Guardian Trust Company and H. S. Oderman' were appointed receivers, with power to continue, ‘ manage, operate, and conduct the business of the company. The order enjoined creditors from instituting suits or levying executions. On May 25, 1931, an order was entered requiring all creditors to file claims with the receivers on or before September 14, 1931!
On June 25, 1931, the Consolidated Public Service Company, a corporation in which Hoagland and Allum held an interest, filed a petition to intervene. It alleged ownership of a majority of the common stock of the service company, set forth the past and present financial status of the service company, and asked for the appointment of a receiver. It prayed that the assets be marshaled and liquidated and the business wound up. The service company immediately filed an answer, in which it admitted the allegations of the petition of intervention, and prayed for the appointment of a receiver or a continuance of the receivership already existing. A new order was entered appointing the same receivers.
On June 27,1931, the Detroit Trust Company, successor to the Union Trust Company as trustee under the first mortgage, instituted an independent suit asking for the foreclosure of the first mortgage and for the sale of all of the properties, except the accounts receivable, choses in action, inventory of merchandise, and capital stock of subsidiaries, all property excluded from the lien of the first mortgage. On the same date, the Detroit Trust Company served notice on the service company and the receiver declaring the principal of the first mortgage gold bonds due, together with all unpaid accrued interest, and demanding payment of all rents, income, issues, and profits of the mortgaged property and trust estates in accordance with Act No. 228, Pub. Acts 1925 (3 Comp. Laws 1929, §§ 13498, 13499). This notice was filed with the register of deeds for Wayne county, Michigan, on June 29, 1931. On July 3, 1931, the Detroit Trust Company, as trustee, filed a petition setting forth the equity receivership, praying for a consolidation of the two cases, and consenting that the same receivers be appointed for the consolidated cases. An order was entered in accordance with the petition.
On July 10,1931, the Detroit Trust Company, trustee, filed an amended bill, alleging that the ice and coal business of the company was of such a nature that it would sustain serious loss if the operations were even temporarily suspended; that the value of the assets depended upon the continuous operation of the company as a going concern; that the ice machinery was of such a nature that idleness would cause rapid depreciation; and that the company was a gitasi-public utility. In addition to the relief prayed for in the preceding bill, it asked that all of the .property of .the service company, including its business and good will, be sold as a unit and as an operating and going concern. This bill joined the Guaranty Trust Company of Detroit, trustee under the second mortgage, as a party defendant. In accordance with another petition filed by the Detroit Trust Company, as trustee, an order was entered segregating and sequestering all of the tolls, earnings, revenues, rent's, issues, profits, and income of the mortgaged property, together with all earnings prior and subsequent to the date of the order.
On October 24,1931, the Equitable & Central Trust Company, as successor to the Guaranty Trust Company, trustee under the second mortgage, filed an answer and cross-bill. It admitted that the second mortgage was junior, subservient, and subordinate to the lien of the first mortgage, but denied that the Detroit Trust Company, as trustee under the first mortgage, was entitled to any lien on the personal property because of the failure to file the mortgage as a chattel mortgage. It further denied the rig’ht of the trustee to the rents, income, issues, and profits of the mortgaged property, because the mortgage and its supplements contained no specific assignment of rents and profits, and because the rents, issues, and profits constituted merely a part of the mortgaged property, to which one claiming under the mortgage would not be entitled unless and until an absolute title vested following a foreclosure sale. It further denied that the Detroit City Service Company was a gwasi-public utility, or that its property could be sold as a unit and as an operating concern under the first mortgage trustee’s bill, because all of the property was not covered by the first mortgage, and because an equity of redemption is allowed under the laws of the State of Michigan. The cross-bill prayed for a foreclosure of the general mortgage. No testimony was taken on the cross-bill.
It is unnecessary to set forth the further proceedings in the cause, except as hereinafter referred to. Questions involving the rights and priorities of the first and second mortgagees, the Detroit Insurance Company et al., the first plaintiffs in the equity suit, the White Star Refining Company et al., intervening creditors, and the Union Guardian Trust Company, trustee, et al., representing the note holders, are the principal issues in the case. Other pleadings will only be briefly referred to in discussing the various questions that are presented for review.
After a hearing at which the claims of all parties were fully presented, the trial judge entered a decree holding that all of the personal property, with the exception of the book accounts, inventory of merchandise, choses in action, and stocks in subsidiaries was subject to the first mortgage; that all the properties employed in the business constituted one plant or unit; that the company was a gwasi-public corporation; that, under the assignment of rents and profits clause, the Detroit Trust Company, as trustee for the first mortgage bondholders, was entitled to all of the rents and profits, including the earnings realized by the receivers as a result of their operation of the plants and conduct of the business; that the Detroit Trust Company, as plaintiff, was entitled to a foreclosure of the mortgage and a sale of the L property without equity of redemption, referred to as strict foreclosure; that all the plants used solely in the ice and fuel business should be sold as a unit, and all the property not so used should be sold separately; that the cost of preparation of an audit, as ordered by the Detroit Trust Company, trustee, should only be allowed as a general claim; and that, on the foreclosure sale, first mortgage bonds and coupons appertaining thereto should be accepted, provided sufficient cash to meet certain expenses and costs were first paid. We shall discuss only those questions that have been raised on appeal or on suggestion of the court. All other questions will be considered as settled by the decree.
Character of mortgaged property. The question is first raised as to what property of the corporation constituted fixtures and came under the lien of the mortgage, if regarded solely as a real estate mortgage due to the failure to file as a chattel mortgage. There is no question but that the land and buildings would come thereunder. We need not consider the stock on hand, book accounts, choses in action and stocks in subsidiary corporations, all of which the mortgage expressly excludes by its very terms. The ammonia compressors, aerating equipment, boilers, motors and refrigerating units, freezing tanks, air compressors, condensers, engines, oil tanks and pumps, platform scales, scorching machines, and other maphinery for manufacturing ice are fixtures. See Dehring v. Beck, 146 Mich. 706; Lyle v. Palmer, 42 Mich. 314; Tyler v. Hayward, 235 Mich. 674; Peninsular Stove Co. v. Young, 247 Mich. 580; Kent Storage Co. v. Grand Rapids Lumber Co., 239 Mich. 161; First Mortgage Bond Co. v. London, 259 Mich. 688. We believe that this should also include spare motors, parts, machinery, equipment, etc., which constitute replacements specially adapted to the full enjoyment of the realty. See Voorhis v. Freeman, 2 Watts & Sergeant’s Rep. (Pa.) 116.
In addition to the foregoing, however, there were horses, wagons, motor trucks, automobiles, office furniture, typewriters, adding machines, and other movable personal property, including portable ice storage houses which were moved from place to place. The latter were small sheds, somewhat smaller than voting booths, which were placed on property belonging to the company or leased from others, and from time to time filled with ice, as required, which was sold by employees placed in charge of these stations. They were set on the ground without any foundation and without any thought of permanency. In distinguishing between what is a fixture and what a chattel, when neither is annexed to the freehold, the use, nature, and intention of the parties must be considered. A carpet nailed to the floor of a house is a chattel, while a key to the house carried in one’s vest pocket is a fixture. Goodin v. Elleardsville Hall Ass’n, 5 Mo. App. 289.
The intention of the parties in the instant case is evident. While it may be claimed that the attaching of the affidavit of adequacy, etc., to comply with 3 Comp. Laws 1929, § 13424, may not be conclusive as to the character of a large part of the movable property, the testimony shows beyond any question that the parties did not regard such property as fixtures. The mortgage was executed almost contemporaneously with the incorporation of the service company, at a time when, the officers of the company must have had in mind the character of the property and then purposely withheld the instrument from filing as a chattel mortgage so as not to impair the credit of the company.
Horses, wagons, trucks, automobiles, office furniture and equipment, and other movable property are of such a character that they can be transported from place to place without impairing their value, or that of the realty from which they are removed. The nature of a larger part of this property was such that it would be extremely difficult by any stretch of the imagination to classify such subjects as “fixtures.” In coming to our conclusions, we need not consider the provision in the first mortgage declaring all of the personal property to be fixtures, inasmuch as the dispute arises solely between the service company and creditors other than the holders of bonds issued under the first mortgage. As to such creditors, we find all of the property not hereinbefore designated as fixtures to be chattels.
Our attention has been directed to a few cases in other jurisdictions holding otherwise. In Bon Air Planting Co. v. Barringer, 142 La. 60 (76 So. 234), the court went so far as to say that, under the Louisiana Code, 23 mules belonging to a sugar plantation formed part of the plantation and were fixtures, that the mules were “immovable by destination.” We are not in accord with this view. In Scudder v. Anderson, 54 Mich. 122, the court said:
“We can conceive of no circumstances under which chairs, tables, movable desks, stoves, tools and ordinary vehicles could be classed as fixtures at all, and counsel disclaim any such idea. It would be possible for pipes, large bellows and perhaps fixed scales to be so treated if attached in such a manner as to form part of the fixed property. But movable pipes, or anything else, which are in fact moved from time to time, and used for different purposes and in different places, could hardly be so considered.”
See, also, Robertson v. Corsett, 39 Mich. 777; Wheeler v. Bedell, 40 Mich. 693; Burrill v. Wilcox Lumber Co., 65 Mich. 571; Morris v. Alexander, 208 Mich. 387, where garage appliances and tools were held to be chattels; Union Trust Co. v. Marsh, 255 Mich. 147, where linotype machines were held to be chattels. We believe that the movable personalty not hereinbefore designated as fixtures should be regarded as chattels. We shall not discuss the question any further, however, in view of our conclusions as to priorities.
Construction of 3 Comp. Laws 1929, § 13424. Although the first mortgage or deed of trust was duly executed, both as a real estate and chattel mortgage, and was represented to be a first lien on the property, it nevertheless was recorded only as a real estate mortgage. The secretary of the corporation, an attorney who represented the bankers and the trustee as well, expressly withheld the mortgage from record as a chattel mortgage under instructions from the bankers, in order to avoid an impairment of the credit of the company. The testimony indicates their belief that the real estate security was more than ample. The bondholders were in no way to blame for this failure on the párt of the trustee to file the instrument as a chattel mortgage, and they had every reason to believe that the mortgage was a first mortgage on the personal property described therein. The trustee was absolved of the duty of looking after the recording or filing of the instrument by the terms of the mortgage. The question of the liability of the trust company for failure to file the mortgage is not before us and need not now be considered.
We are confronted with this question: Did the failure to file the first mortgage with the proper authorities as a chattel mortgage make it void as to subsequent creditors who extended credit with notice? 'The law of Michigan has been in a state of confusion. The statute, 3 Comp. Laws 1929, § 13424, recites that failure to file a chattel mortgage shall make it “ absolutely void as against the creditors of the mortgagor, and as against subsequent purchasers or mortgagees in good faith,” unless accompanied by immediate delivery followed by an actual and continued change of possession of the property mortgaged. The quoted words appear in their present form in section 10 of chapter 81 of the Eevised Statutes of 1846. The chapter heading: “Of fraudulent conveyances and contracts relative to goods, chattels and things in action,” indicates its purpose. Although the statute has been amended from time to time during the course of years, the phrase quoted remains unchanged, notwithstanding the fact that at times a construction has been placed upon the meaning of the statute different from that which a literal interpretation of the words might indicate.
The query eventually arose as to whether the- unfiled mortgage was valid as to subsequent creditors with notice. The early case of Cooper v. Brock, 41 Mich. 488, held that such a mortgage was absolutely void, and that nothing short of a change of possession or filing, as the section required, could save it. In this case, however, the question of notice was not raised. A number of years later, the court, moved by more equitable considerations and an analysis of the purposes of the statute and the mischief it sought to overcome, followed the construction placed on similar statutes in some other States, reversed the ruling in Cooper v. Brock, supra, and held that the mortgage was void only as to subsequent creditors without notice. See Charles Root & Co. v. Harl, 62 Mich. 420; Brown v. Brabb, 67 Mich. 17 (11 Am. St. Rep. 549); Cutler v. Steele, 85 Mich. 627; First National Bank v. Guntermann, 94 Mich. 125; Littauer v. Houck, 92 Mich. 162 (31 Am. St. Rep. 572); Baker v. Parkhurst, 119 Mich. 542; Loeser v. Jorgenson, 137 Mich. 220; Heenan v. Forest City Paint & Varnish Co., 138 Mich. 548; Sachs v. Norn, 139 Mich. 357.
This latter construction of the law, however, was reversed in People, for use of Esper, v. Burns, 161 Mich. 169 (137 Am. St. Rep. 466), which definitely held that failure to file a chattel mortgage without a change of possession, etc., as provided by the statute, made it void as to all creditors. This case was followed and approved in City Bank & Trust Co. v. Hurd, 179 Mich. 454, but with some qualification, for the court said:
“In certain cases under the circumstances there shown, knowledge has been held to be of controlling importance arid equivalent to recording. * * * The latest treatment of, and rulings by this court upon the subject is People, for use of Esper, v. Burns, 161 Mich. 169 (137 Am. St. Rep. 466), where it is held settled in this State that actual notice by a creditor of the existence of an unrecorded mortgage is not inevitably a sufficient substitute (to give it priority) for recording the same.”
In City Bank & Trust Co. v. Hurd, supra, Hurd was an employee of the mortgagor, and although he denied knowledge of the fact,that the unfiled mortgage covered after-acquired property, the court found that, even if he had such knowledge, the mort gage would be void as to Mm, due to the mortgagee’s failure to file the instrument. Were it not for subsequent decisions of the Federal courts and our court, we would be bound by the rule laid down in People, for use of Esper, v. Burns, supra, and the rule would be productive of very inequitable results in the instant case. The rule of stare decisis generally determines, even though equitable considerations might prompt a different result.
Shortly after the decision in People, for use of Esper, v. Burns, supra, the United States Circuit Court of Appeals (6th Circuit) in Re Huxoll, 113 C. C. A. 637 (193 Fed. 851), held, in an opinion written by Judge Knappen, that:
“The words ‘creditors of the mortgagor’ are construed by the Supreme Court of Michigan to mean subsequent creditors in good faith and without notice of the mortgage. Fearey v. Cummings, 41 Mich. 376; Charles Root & Co. v. Harl, 62 Mich. 420; Buhl Iron Works v. Teuton, 67 Mich. 623; Cutler v. Steele, 85 Mich. 627; First Natl. Bank v. Guntermann, 94 Mich. 125, 126; Baker v. Parkhurst, 119 Mich. 542.”
The learned judge did not overlook People, for use of Esper, v. Burns, supra, but referred to it in connection with another issue.
In re Huxoll, supra, was followed by Detroit Trust Co. v. Pontiac Savings Bank, 115 C. C. A. 631 (196 Fed. 29), shortly thereafter, and the court, in another opinion written by Judge Knappen, adopted the principle laid down in Re Huxoll, supra, and again stated that the words “creditors of the mortgagor” applied only to subsequent creditors in good faith and without notice of the mortgage. Detroit Trust Co. v. Pontiac Savings Bank, supra, was reviewed and affirmed in 237 U. S. 186 (35 Sup. Ct. 509), where the language limiting the operation of the statute to subsequent creditors without notice was quoted once more. Notwithstanding the profound respect we have for the opinions of the United States Supreme Court, we are not bound thereby in the construction of a Michigan statute. However, in Peter Schuttler Co. v. Gunther, 222 Mich. 430, we approved of the opinion of the United States Supreme Court, and quoted the excerpt therein relating to the application of the statute.
Counsel on both sides in the instant case criticize the various decisions cited insofar as they affect their claims adversely. They contend that the statements of the courts in these cases have been pure dicta, and unnecessary to a settlement of the issues involved. We shall not discuss these contentions. This court has adopted the rule laid down by the Supreme Court of the United States, as set forth but recently by our court, and holds that the statute protects only subsequent creditors Avithout notice: Support for this rule may be found in decisions in some other jurisdictions. See Dyer v. Thorstad, 35 Minn. 534 (29 N. W. 345); J. B. Kern & Son v. Wilson, 82 Iowa, 407 (48 N. W. 919); In re Ducker, 133 Fed. 771; Gill v. Griffith, 2 Md. Ch. 270; Tucker v. Tilton, 55 N. H. 223.
Notice given by second mortgage. The Equitable & Central Trust Company, as successor of the Guaranty Trust Company, trustee under the second mortgage, has waived its rights to security under the second mortgage, and claims only those of a general creditor. The second mortgage, which was filed as a chattel mortgage, referred to the first mortgage to which it was subject, described it as covering both real and personal property, and gave the date of its execution and recording in the register of deeds’ office, including the liber and page of the record. While the trustee under the second mortgage may have believed it to its advantage to claim only as a general creditor and thus to attempt to avoid the first mortgage because it was not filed, nevertheless it still cannot avoid the notice of the first mortgage given in the second mortgage, nor can the unsecured creditors, all of whom appear to have extended credit after the second mortgage was properly filed.
While it is true that the recording of a real estate mortgage does not give notice of its chattel mortgage provisions (Security Trust Co. v. Tuller, 243 Mich. 570, 574), the filing or recording of a later mortgage in the proper office where the prior mortgage should have been filed or recorded does give constructive notice of the prior instrument, if specific reference to it is made therein. In Fruth v. Bolt, 39 S. D. 351 (164 N. W. 105), it was held:
“The reference contained in this mortgage to the first mortgage was sufficient to put a prudent person upon inquiry, and, had such inquiry been pursued with a reasonable degree of diligence, it would have been learned that the first mortgage debt had not been paid.”
See Taylor v. Mitchell, 58 Kan. 194 (48 Pac. 859); Ebling Brewing Co. v. Gennaro, 189 App. Div. 782 (179 N. Y. Supp. 384). One may be held to notice, under these circumstances, not only of the existence of an unrecorded mortgage, but also of the provisions contained therein. Guerin v. Sunburst Oil & Gas Co., 68 Mont. 365 (218 Pac. 949); J. R. Crowe Coal & Mining Co. v. Atkinson, 85 Kan. 357 (116 Pac. 499, Ann. Cas. 1912 D, 1196); McPherson v. Rollins, 107 N. Y. 316, 332 (14 N. E. 411,1 Am. St. Rep. 826). That recording constitutes constructive notice, not only of the existence, but also of the contents of a recorded instrument, was held by this court in Lines v. Weaver, 220 Mich. 244, where we declared:
“The contract and deed were of record and were constructive notice to Burrusch of all they contained. We must assume, therefore, that Burrusch had knowledge of whatever the papers contained.”
Inasmuch as it is conceded that the lien of the first mortgage will result in an exhaustion of all the mortgaged assets of the service company, a determination of the relative rights and priorities of the second mortgagees over the general creditors, after the first mortgage has been satisfied, is unnecessary to the decision.
Negotiability of notes. The first series of notes, aggregating $1,250,000, was issued contemporaneously with the mortgage. The entire issue was purchased by the investment bankers, who also purchased $3,000,000 of the first mortgage bonds, as well as stock in the company. They had notice through full and complete knowledge of the chattel mortgage provisions of the first mortgage. One of these bankers not only was a director and treasurer of the service company, but was largely instrumental in keeping the indenture from being filed as a chattel mortgage.
The trial judge also held that the testimony conclusively showed that the Consolidated Service Company purchased the second note issue of $700,000 with notice of the chattel provisions of the first mortgage. The latter company clearly had notice of the mortgage through its affiliate, the Consolidated Public Service Company. The Consolidated Public Service Company furnished the manager and president of the Detroit City Service Company, but his salary was charged to Iioagland, Allum & Company. The minutes of the Detroit City Service Com pany refer to Messrs. Hoagland and Allum of the Consolidated Service Company. They further show that the Consolidated Public Service Company and the Consolidated Service Company were affiliated. The Detroit City Service Company was instructed to close the two accounts into one and the correspondence to the two companies went to one office. The trial judge properly found that to hold that the Consolidated Service Company did not have full knowledge of the affairs of the Detroit City Service Company would be doing violence to reason. Hoagland and Allum, who had full knowledge of the first mortgage covering chattels and real estate, were associated with both companies. There was ho testimony whatever to rebut the almost conclusive showing that the two companies were closely united. It seems incredible that the Consolidated Service Company, with which Messrs. Hoagland and Ahum were associated purchased $700,000 of notes of the Detroit City Service Company without the knowledge possessed by its parent and affiliated company, the Consolidated Public Service Company.
The query arises, then, whether the present holders of the two issues of notes which were originally purchased respectively by Hoagland, Allum & Company in association with other investment bankers, and by the Consolidated Service Company, with full knowledge of the chattel provisions of the unfiled first mortgage, are charged with the notice that the original purchasers had. They must be so charged if the notes are nonnegotiable. Each note contained the following clause:
“This note is one of a duly authorized issue of notes * * *. issued under and all equally entitled to the benefit of a trust agreement * * * executed by the company to Unión Trust Company, of Detroit, Michigan, as trustee. * * * Por a descrip tion of the rights of the holders of the notes and the terms and conditions upon which the notes are issued, reference is made to the said trust agreement with like effect as though said trust agreement were recited in full herein. ’ ’
This language differs from that in the debentures which were held to be negotiable in Paepcke v. Paine, 253 Mich. 636 (75 A. L. R. 1205), and Merchants National Bank v. Detroit Trust Co., 258 Mich. 526, in that the instruments in those cases contained no specific direction that the trust indentures be completely incorporated therein, with like effect as though recited in full in the notes. As was stated in Fidelity & Deposit Co. v. Andrews, 244 Mich. 159:
“The mere fact that the bonds were secured by the deed did not change their character or affect their negotiability * * * They are deprived of negotiability because the deed is expressly made part of them. It is as though its contents were repeated in them.”
The opinion referred to King Cattle Co. v. Joseph, 158 Minn. 481 (198 N. W. 798), wherein the words “and hereby reference is made to said indenture and the same made a part hereof, with the same effect as if herein fully set forth,” rendered the instrument nonnegotiable.
In Paepcke v. Paine, supra, the bonds referred to the instrument securing them solely for the purpose of describing the security. In the instant case, however, the language of the notes necessitates that the trust indenture be regarded as if it were incorporated into and were a part of the notes. Reference to an extrinsic instrument is necessary to determine the nature of the promise. The notes do not contain an unconditional promise to pay, and are nonnegotiable.
Bents and profits. The first mortgage contained no clause specifically assigning the rents and profits in the exact language of the statute. After a description of the mortgaged property, there followed the words:
“Together with all * * * tolls, rents, revenues, issues, income, product, and profits thereof.”
Article 10 of the mortgage indenture, entitled: “Remedies of trustees and bondholders upbn default, ’ ’ provided for a surrender to the trustee, upon default, of possession of all mortgaged property, etc., and states that it shall be lawful for the trustee “to receive the rents, income, issues and profits thereof, after notice given as required by Act No. 228, Pub. Acts 1925” (3 Comp. Laws 1929, §§ 13498, 13499). We believe that this was sufficient to assign the rents and profits as additional security in the event of default. The trustee complied with the first section of the act.
Section 2 of the act (3 Comp. Laws 1929, § 13499) makes the assignment of rents good and valid against the mortgagor or mortgagors or those claiming under or through them from the date of the recording of the trust mortgage or deed of trust, but only makes it binding
“upon the occupiers of the premises from the date of the filing by the trustee or trustees in the office of the register of deeds for the county in which the property is located, of a notice of default in the terms and conditions of the trust mortgage or deed of trust and the service of a copy of such notice upon the occupiers of the mortgaged premises.”
The trustee filed proper notice of default with the register of deeds and served a copy on the receivers. A small portion of the realty not used by the service company was rented to tenants, however, and they were not served. We believe that service on the receivers, after the notice had been filed with the register of deeds, was sufficient. Service upon the occupiers of the premises is for their protection only, and, until receipt of such notice, it was proper for them to pay rent to the receivers. It was also proper for the trustee under the mortgage to serve notice on the receivers. The trustee is entitled to all rents from property leased to others and paid to the receivers, after service on them of a copy of the duly recorded assignment of rents under Act No. 228, Pub. Acts 1925 (3 Comp. Laws 1929, §§ 13498, 13499). This case is distinguishable from Detroit Properties Corp. v. Detroit Hotel Co., 258 Mich. 156, 159, in which the receivers were also the ‘ ‘ occupiers ’ ’ and no notice of any kind was filed or served upon them.
The lower court, however, was in error in allowing the Detroit Trust Company, trustee, all of the profits made by the receivers through operation of the mortgaged premises and business. When relieved of the payment of interest and charges for depreciation, the operations of the receivers show a large profit. This was realized, however, partly through the use of inventory, receivables, and other elements that were unmortgaged, in combination with labor and management. We do not believe that the word “profits” as used in Act No. 228, supra, can be construed to cover business profits made by the receivers through possession and operation of the mortgaged property in the instant case. Under the common law, the word “profits” when used in connection with rents, meant the usufruct of the land. Hazeltine v. Granger, 44 Mich. 503. As defined by 3 Bouvier (Rawle’s 3d Rev.), p. 2737:
“Under the term profit is comprehended the produce of the soil, whether it arise above or below the surface; as herbage, wood, turf, coals, minerals, stones; * * * also fish in a pond or running water. ’ ’
In Hitchcock v. Pratt, 51 Mich. 263, the court implied that the phrase “rents and profits” did not include business profits. The question has seldom arisen, and no certain rules can be laid down based on decisions in other jurisdictions, particularly in view of the fact that, in Michigan, the principle that the mortgagee is not entitled to possession until after-foreclosure and the expiration of the equity of redemption is applied more strictly than in many other jurisdictions. We do not believe that the word “profits” as used in Act No. 228, supra, means business profits arising out of the operation of mortgaged premises not rented to others but occupied and used by the mortgagor.
Act No. 228 is described in Security Trust Co. v. Sloman, 252 Mich. 266, as not perfectly drafted. The title refers to “rents and profits of property.” Section 1 states that it shall be lawful to assign the rents and profits of the property mortgaged under a trust mortgage. Section 2, however, states that the assignment of rents and profits, when certain formalities are carried out, “shall be a good and valid assignment of rents.” The omission of the words “and profits” after the phrase “good and valid assignment of rents” may have been due to an oversight. Appellants claim that the entire statute should be read together. We do not believe, however, that the statute was meant to include, under any circumstances, all profits made through the use of mortgaged buildings, fixtures, and chattels in combination with unmortgaged inventory, receiv-' ables, etc., all employed in a manufacturing and distributing business. The query is pertinently made as to what the result should have been had the business been operated by the receivers at a loss.
Act No. 228 gives the mortgagee an additional' remedy or security not allowed under the common law, and in construing it the strict policy of our court in protecting the mortgagor must be kept in mind. The mortgagee may not divest the mortgagor of possession of the mortgaged premises until after the title shall become absolute upon foreclosure of the mortgage. Wagar v. Stone, 36 Mich. 364; Hazeltine v. Granger, supra; Nusbaum v. Shapero, 249 Mich. 252; Union Trust Co. v. Charlotte General Electric Co., 152 Mich. 568; Union Guardian Trust Co. v. Rau, 255 Mich. 324; White v. Fulton, 260 Mich. 346. This principle has been upheld repeatedly, even notwithstanding a provision in the mortgage providing for the appointment of a receiver upon default. Union Guardian Trust Co. v. Rau, supra.
Distribution of dividends. In addition to the proceeds from the sale of the unmortgaged assets, a large sum of money accumulated by the receivers through operation of the business will be available for payment as dividends to all creditors. The trustee under the first mortgage may prove its claim with interest up to the date for filing claims by general creditors, and may participate in dividends paid to unsecured creditors, without any deduction on account of its security. This is in accordance with the English chancery rule which has been adopted by this court. See In re E. Bement’s Sons, 150 Mich. 530, where the rule is stated as follows:
“The debtor may now receive out of the general assets no more than his proportional share. Until the debt is paid, in full, principal and interest, the creditor is entitled to such, dividends as may be declared upon tbe total of the debt as proved. It is entirely immaterial to the receiver in what manner proceeds of collateral are applied, to the point when the sum of the dividends and of collateral collected has extinguished the entire debt, principal and interest.”
See, also, Third National Bank of Detroit v. Haug, 82 Mich. 607 (11 L. R. A. 327); High v. Fifth National Bank of Grand Rapids, 97 Mich. 502 (21 L. R. A. 822); Merrill v. National Bank of Jacksonville, 173 U. S. 131 (19 Sup. Ct. 360).
Appellants contend that we should follow the so-called bankruptcy rule instead, and only allow the first mortgage trustee the right to a pro rata participation in the fund for distribution to general creditors to the extent of the deficiency after application of the proceeds realized from the security. We find no reason to depart from the chancery rule that has been the law of this State.
There seems to be but little likelihood that the first mortgage creditors will realize a sufficient sum, from their share of the dividends to be paid to general creditors and from the proceeds of the foreclosure sale, to cover the amount due under the first mortgage. Should there be any surplus, however, after payment of the amount due on the first mortgage, plus interest up to the date of payment, such surplus shall be pro, rated among the general creditors, exclusive of those claiming under the first mortgage.
Strict foreclosure. The trial court should not have ordered a foreclosure sale, by which an absolute title was to be given to the purchaser, without allowing the mortgagor a right of redemption and possession of the mortgaged property during the period fixed by statute. This is often called strict foreclosure. It is true, as appellee contends, that strict foreclosure has been allowed in the case of railroad mortgages in this State, but this is by virtue of an exception made by statute. 2 Comp. Laws 1929, § 11150. As was stated in Ten Eyck v. Railroad Co., 114 Mich. 494, this special provision “operates to except railroad mortgages from the general statute relating to the foreclosure of real-estate mortgages.” Even if a different rule should apply to quasi-pNolie, utilities, as is claimed by appellee, it has been definitely held that a company operating an ice manufacturing and supply business in a large community is not included in this category. New State Ice Co. v. Liebmann, 285 U. S. 262 (52 Sup. Ct. 371).
Strict foreclosure was allowed in National Bank of Commerce v. Corliss, 217 Mich. 435, and an insolvent creamery company’s property was sold without equity of redemption. The case did not involve the foreclosure of a mortgage but of a land contract. There is no statutory right to redeem on foreclosure of a land contract. Drysdale v. P. J. Christy Land Co., 248 Mich. 184; Heppner v. Smith, 238 Mich. 245, 247. Likewise, in Webber v. Genesee Circuit Judge, 184 Mich. 112, the court ordered sale of an electric light company plant by a receiver, who had been appointed in foreclosure proceedings on a showing that the plant was being run at a large loss. The receiver also was unable to conduct the business at a profit. The bill was filed for the purpose of protecting the security, restraining waste, and foreclosing the mortgage. Loss of the franchise to furnish electricity to the city of Fenton was threatened if the company shut down its plant. The court permitted the sale after some hesitation, but stated that if a proposed offer of a third party to lease the prop- - erty were accepted, and secured by a proper guaranty bond approved by the trial judge in order to avert further losses, no sale should be ordered. In the instant case, the business is being continued without interruption, the property and good will preserved, taxes and insurance premiums paid, and a profit is being realized by the receiver. The right to redeem from a foreclosure sale is a statutory right that has been strictly protected except under the unusual circumstances arising* in Webber v. Genesee Circuit Judge, supra. The right can neither be enlarged nor abridged by the courts. Batty v. Snook, 5 Mich. 231, 239; Wood v. Button, 205 Mich. 692, 703.
Payment in bonds. We find no merit in appellants’ objections to the provisions in the decree permitting the use of first mortgage bonds and pertinent coupons towards payment for the mortgaged property on foreclosure sale, as provided in the mortgage. It would be inequitable to deny the right to use bonds, provided sufficient cash is deposited so as to make necessary cash payments for expenses of the foreclosure and pro rata distribution to non-depositors. The right to use bonds in this manner is well reasoned out in Tracy on Corporate Foreclosures, § 209.
Expenses of audit and sale. The expenses of the foreclosure sale should be met out of the proceeds of the sale. The expense of the audit should also be added to the amount due under the mortgage, while other expenses must be borne by the receivers. Under section 13 of article 4 of the indenture, the service company agreed to keep proper books of record and account, open to the inspection of the trustee at all times, and agreed that, upon the written request of the holders of not less than 25 per cent, óf the principal amount of the bonds, the trustee would have a right to have an accounting made at the expense of the corporation. Such an accounting was had at a total cost of $12,000. The trial judge refused to permit this expense to be added to the amount due under the mortgage, but permitted it to ■ be filed as an unsecured claim. Inasmuch as the payment of such amount was a lawful charge provided for in the mortgage and did not have any tendency to make the transaction usurious, we cannot find any valid reason why it should not be included in the amount due under the mortgage.
Sale as a unit. No objection is made to the provisions in the decree ordering the sale of all of the plants as a unit, the vacant property to be sold in separate parcels. The business of the various plants, although situated in various sections of the city and surrounding suburbs, radiated from one central office. The plants were used and occupied by the service company in such a manner that, if they were sold separately, it would disrupt the business and bring a smaller price to the damage of both the mortgagor and the mortgagee. The mortgaged good will goes with the mortgaged property. 3 Comp. Laws 1929, § 14627, contemplates sales of real estate in separate parcels when no intervening causes change the nature of the parcels, or when they axe distinct and independent in description, occupancy, and use. The plants and the garage property serving them are distinct neither in occupancy nor use, but together constitute one unit. See Security Trust Co. v. Sloman, supra, 270; Grand River Avenue Christian Church v. Berkshire Life Ins. Co., 254 Mich. 480.
The decree also properly provides for the sale of the mortgaged personalty in conjunction with the property used in the business. This results in a rather anomalous situation in so far as the equity of redemption is concerned. The real estate may be redeemed within six months following the foreclosure sale. There is no statutory right of redemption from the sale of chattel mortgage property, although this court may make such a provision in the exercise of its broad equity powers. In order that the receivers may have the benefit and use of such mortgaged property other than the real estate during the six months’ period of redemption, and that the entire plant, good will, and chattels belonging to it may be redeemed as a unit, should the right of redemption be exercised, it is ordered that the right of redemption extend, therefore, to all the mortgaged property sold. The receivers shall, however, pay to the purchasers of the mortgaged property, for such period as the possession of the chattels is withheld from them, an amount to be determined by the trial judge to be a fair rental, plus an additional sum sufficient to cover the depreciation and loss of any mortgaged chattels so sold at the foreclosure sale.
49
Sale of equity of redemption. The court asked for briefs on the question of the sale of all of the assets by the receivers in their capacity as such under appointment in the equity case. The consolidation of the equity and foreclosure suits did not deprive the plaintiffs in each cause of their respective rights. As was said by Judge Taft in Continental Trust Co. v. Railroad Co., 82 Fed. 642:
“Causes are consolidated only when they may proceed to judgment under one title without impeding or diminishing the remedial object and effect of the proceeding for each complainant.”
It is apparent here that if all of the property could be sold at one time, so as to give to the purchasers of the business and the assets strictly, belonging to it, an absolute title without delaying pos session during the six-months’ period of redemption, it would be beneficial to all parties. The equity receivership, particularly in view of the allegations in the second bill of complaint, which were admitted in the answer of the service company, gave the receivers title to all the assets, subject to the liens. The lien created by the second mortgage, which is not being asserted, undoubtedly will be valueless after foreclosure sale under the first mortgage.
The appointment of receivers in the present case arose out of exceptional circumstances, as in Edison v. Fleckenstein Pump Co., 249 Mich. 234, where an equity receivership was upheld. The large profit shown as a result of the operation of the receivers is less than the interest charges on the first mo'rtgage. Depreciation and other charges have not been deducted. Upon reading the record and also considering business conditions, the depreciation of real estate values, curtailment of buying power, etc., it seems almost certain that the mortgaged property will not be sold at the foreclosure sale for the amount due on the first mortgage indebtedness. To delay possession during the six-months’ period of redemption would tend to frighten away all bidders except first mortgage bondholders, and they would be apt to bid much less if reorganization is delayed.
If the equity of redemption is sold at once, the large expense of continuing the receivership can be eliminated. It has already been pending over two years. The policy of the courts has always been to bring a receivership to a close as quickly as it can be accomplished without injury to the creditors. The general creditors, however, cannot be deprived of the profits that may be made from the operation of the business during the six-months’ period of redemption.
The trial court can determine the average profits made by the receivers during the months of 1931 and 1932 corresponding to the six months of the redemption period, and in this manner estimate with some fairness what the profit would be were the business continued by the receivers during the redemption period. From the profits so approximated, an amount should be estimated and deducted for the further expenses of the receivership and any other sums that must be paid from such profits before they become available for dividend purposes. The trial judge may also take into consideration any other facts that may raise or lower the probable profits. The net sum so approximated should be the minimum, or upset price, at which the equity of redemption should be sold immediately after the sale of the mortgaged property. If a bid is not received at least equal to such upset price, the sale of the equity should not be confirmed. If the equity of redemption is sold for at least the upset price, as so determined, then immediately thereafter all the other unmortgaged property shall be offered for sale. If the equity of redemption is not sold for at least the upset price, then the unmortgaged property should be sold at the expiration of the redemption period.
Bondholders bidding for the mortgaged property and/or the equity of redemption and/or the unmortgaged property may also tender their bonds towards payment of the amount bid, but, as to their bids for the equity of redemption and/or the unmortgaged property, only to the extent that the amount of the bonds held by such bondholders, or those making the bid in their behalf, shall bear to the entire proved indebtedness of the Detroit City Service Company. However, they may also, on proper application to the court, ascertain the approximate dividend to which they will be entitled as creditors upon the distribution of the cash now in the hands of the receiver, and such additional sums available for dividends from the sale of the equity of redemption and the unmortgaged property, and they may apply such sums as would be. paid as dividends on their claims towards the payment of any amounts bid at the sale of the mortgaged and/or unmortgaged properties. In bidding on the mortgaged property the bondholders shall pay sufficient in cash to pay the expenses of the sale and to insure that bondholders not bidding shall receive in cash a pro rata share of the amount bid.
In determining the amount of the dividends to be paid, a fair sum should be estimated and deducted for fees of the receiver, attorneys, and for all other lawful charges. These can be approximated, subject to final determination later. Further orders may be made so that the bondholders, in making their bid, may have the benefit of their proportion in the large amount of cash to be distributed to creditors. Át all events, all necessary provisions shall be made to insure that such privileges as are conceded to bondholders will interfere in no way with an equitable cash distribution of the dividends to which other creditors and claimants are entitled. Any creditors, other than first mortgage bondholders, acting singly, or in groups, may also, upon application to the court, use such dividends to which they may be entitled in payment for any property offered for sale, on terms similar to those which have been allowed the first mortgage bondholders.
The decree of the lower court is affirmed as modified herein, with costs to appellants. The case is remanded to the trial court for the purpose of determining the respective amounts due, for the deter- ruination of the upset price to he bid for the equity of redemption, and for the entry of a decree in accordance with this opinion. The trial court may make such further provisions in the decree as are not inconsistent with this opinion, and also make other proper orders as may he necessary from time to time.
McDonald, C. J., and Clark, Potter, Sharpe, North, Pead, and Wiest, JJ., concurred. | [
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] |
Butzel, J.
Tern Pinch., petitioner herein, deposited a land contract with the State Bank of Beaverton. The bank was to collect payments thereon and remit them to petitioner. On October 3, 1931, the bank collected $50, and on November 3, 1931, a like amount. On November 4,1931, the bank sent petitioner a draft on a Bay City bank for $49.75, covering its first collection, minus fee. It also gave petitioner a cashier’s check for $49.75 after the bank had been closed by the banking commissioner.
Neither the draft nor the cashier’s check were paid, owing to the failure of the bank, and petitioner filed a petition in the pending case of Reichert v. State Bank of Beaverton, a Michigan banking corporation, and asked that the sum of $99.50 be allowed as a preferred claim against all the assets of the bank. The trial judge allowed such claim as a preferred claim against the cash assets of the bank as they existed at the date the receiver took possession, but not as against the other assets of the bank. Petitioner claims that he should have been allowed a preferred claim against all of the assets. It appears very doubtful whether there will be any cash assets, as of the date of the receivership, from which petitioner’s claim can be paid.
Petitioner bases his claim entirely upon sub-paragraph (3) of § 13 of Act No. 240, Pub. Acts 1931. The trial judge filed no written opinion, and the attorney for the appellee has filed no brief. Act No. 240 is an act to expedite and simplify the collection and payment by banks of checks and other instruments for the payment of money. The title to the act, as well as its provisions, plainly indicate that it was enacted solely for the purpose of taking care of checks and negotiable instruments in transit and in course of collection. We do not believe that it covers collections on a land contract. The act deals solely with banking paper, such as drafts, checks, and notes. The question arose in Reichert v. Fidelity Bank & Trust Co., 261 Mich. 107, in which, on page 112, Act No. 240, supra, was referred to as the “bank collection code.” The court held that it applied to funds coming into the actual possession of an insolvent bank by reason of its having acted incident to the collection or forwarding of commercial paper. We believe that the act permits of no other construction.
In Reichert v. Fidelity Bank & Trust Co., supra, we also stated as a general proposition that preferences and priorities should be avoided, except where distinctly provided for by law or by agreements and circumstances under which the insolvent received the particular funds. In the cited case, preference was denied as to funds that had been deposited for the sole purpose of meeting maturing mortgage bond and coupon payments when they became due. We believe that the land contract in the instant case occupies no more equitable position.
There may be some question as to whether appellant was entitled to a preference of any kind, inasmuch as the cash assets are less than the total of preferred claims, according to the record. However, as no objection has been made by appellee to the order permitting the preference out of cash assets, possibly due to the absence of any tangible sum, we need not further comment upon the question.
The order of the lower court denying preference as to the general assets is affirmed, without costs.
McDonald, C. J., and Clark, Potter, Sharpe, North, Pead, and Wiest, JJ., concurred. | [
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Butzel, J.
Stanley Slavin, Steven J. Martek, and Harry E. Peterson, relators, appeal from an order denying a writ of mandamus directing the city of Detroit, Prank J. Murphy, its mayor, and James K. Watkins, its police commissioner, respondents, to reinstate relators as patrolmen on the police force. Relators were relieved from duty without pay, but not discharged* by virtue of an order issued by the police commissioner on March 8, 1932, stating that the police department had been ordered to effect a saving of $122,000 in operating expenses between March 8th and June 30, 1932, and that the only method of bringing this about was through a reduction of the personnel by releasing from duty men who had seen the shortest service in the department. In accordance with the order, 166 members of the force, including the relators,' were relieved from active duty, without pay and until further notice.
No fault is found with the method in which relators were laid off, nor do they deny the necessity for the savings the commissioner was ordered to make. They contend, however, that sufficient funds were provided by. appropriation to pay the entire force up to June 30, 1932, and that it became the duty of the commissioner to use up the appropriation as made before instituting economies, and further, that the common council, the legislative body of the city of Detroit, had the sole right to order a decrease in the number of men employed on the police force.
The respondents show that the relators and others were relieved of duty without pay solely on account of a shortage of funds in the treasury of the city, and that, had they not been so relieved, there would not have been funds available with which to continue payment of the force that remained. Respondents seek, by motion, to amend the record by showing specifically very large delinquencies in the payment of city taxes. We need not consider this motion, for the fact that economies were necessary is not disputed. Relators also claim that they differ from ordinary employees of the city because of the fact that they are officers who have taken au official oath of office.
In a companion case, Warren Stanton, a city fireman, seeks reinstatement by the board of fire commissioners through similar proceedings. Relator was certified to the fire commissioners by the civil service commission of the city of Detroit. He and 124 other members of the fire department were laid off because of lack of funds at about the same time ' as the members of the police. The questions raised in both the policemen’s and fireman’s actions are similar. The eases were argued together, and this opinion applies to both cases, except as otherwise noted.
It is claimed that, under the charter provisions of the city of Detroit, neither the police commissioner nor the board of fire commissioners had a right to reduce their iespective forces. Pertinent provisions of the Detroit city charter are as follows:
Title 4, chap. 21, § 5, subdivision (c) (referring to the police commissioner):
“May change the titles of police officers and employees under him, * * * designating such titles as he may see fit, creating whatever offices and positions he may deem necessary for the proper organization and conduct of the department.”
Title 4, chap. 15, § 5 (referring to the board of fire commissioners)
“The board shall appoint a secretary, and in accordance with the provisions of this charter relative to civil service, a chief of the fire department, a fire marshal, and such other assistants and employees as may be necessary.”
Under these provisions, the police commissioner may create whatever offices and positions he may deem necessary for the proper organization and conduct of the department, and- the board of fire commissioners may appoint the fire chief, fire marshal, and such other assistants and employees as may be necessary. Plaintiffs contend, however, that the appointive power and the right to increase or decrease the personnel lies with the council because of its power to.fix the budget and the appropriations each year. While it is true that the coiincil may indirectly control the number of officers and employees by limiting the appropriation, the right of appointment and removal, increase and decrease of the forces, still remains in the hands of the police com missioner and the board of fire commissioners respectively.
It is undisputed that the “lay-off” was effected in good faith when it became obvious that the entire appropriations would not be available. Plaintiffs claim, however, that the power to reduce the respective forces was solely in the council, and that a resolution or an ordinance was essential in order to achieve the desired result. They rely upon an extremely brief opinion in State, ex rel. Rowling, v. Mayor of Butte, 43 Mont. 331 (117 Pac. 604), and on Neumeyer v. Krakel, 110 Ky. 624 (62 S. W. 518). In the latter case, in the decision of which the court divided, the charter differed materially from that of the city of Detroit. A specific number of policemen was provided by ordinance and the statute authorized the board of safety to increase its force only “provided the general council shall have previously made an appropriation for that express purpose.” It was held that, under the particular provisions of that charter, the power was vested in the general council to regulate by ordinance the number of policemen, the officers to be appointed, and the salaries to be paid. Some support for plaintiffs’ contentions may also be found in Oldham v. Mayor and Aldermen of Birmingham, 102 Ala. 357 (14 South 793); State, ex rel. Miller, v. Baxter, 171 Wis. 193 (176 N. W. 770); and O’Neill v. Williams, 53 Cal. App. 1 (199 Pac. 870). In all of these cases, it will be found that the charters differed from that of the city of Detroit, in which the power of appropriation affords the council its only means of’control over the size of its police and fire personnel.
In State, ex rel. McDermott, v. Wilkinson, 88 Conn. 300 (90 Atl. 929), a dispute arose as to whether the power of appointment rested ydth the town meeting or the selectmen. The act creating the board of selectmen directed them to organize and maintain a fire department and make necessary rules and regulations therefor. No specific provisions were made as to the personnel. It was held that—
“The imposition of this duty carried with it by necessary implication the power of selection of members of the department, in the absence of other provision therefor in the act.”
The court further quoted from State, ex rel. Reiley, v. Chatfield, 71 Conn. 104 (40 Atl. 922):
“It is the common rule that where the power of appointment is conferred in general terms without restriction, the power of removal at discretion and at the will of appointing power is implied, and always exists unless restricted and limited by some other provision of law.”
The Connecticut case seems to be directly in line with the facts in the present case, except that the language in the charter of the city of Detroit indicates quite definitely that the power of appointment or removal, increase and decrease, rests with the police and fire commissioners, inasmuch as they are given the authority to “create” and “employ” offices and officers as needed. In Pendergast v. International Typographical Union of North America, 261 Mich. 553, we held that—
“It would seem that the power to determine the number necessary carries with it the power to reduce the number when necessary.”
It has generally been held that removals are justified for reasons of economy. Venable v. Board of Police Commissioners, 40 Ore. 458 (67 Pac. 203); Matter of Lazenby v. Elmira Board of Police, 76 App. Div. 171 (78 N. Y. Supp. 302), wherein it was held:
“The police force of the city of Elmira can only be paid by appropriations made by the common council of the city. For the year in which, the discharge was attempted the appropriation for the police force was $29,000. To pay the police force as it stood at the time of the adoption of this resolution the sum of upwards of $33,000 was required. It became necessary to reduce that force. * * The good faith of the police board in discharging Lazenby for purposes of economy is well sustained in the record.”
To similar effect are Lethbridge v. Mayor, etc., of New York, 133 N. Y. 232 (30 N. E. 975); Wyse v. Board of Police Commissioners, 68 N. J. Law, 127 (52 Atl. 281).
In coming to our conclusion, we have not been unmindful of the fact that appointments to the fire department force are regulated by civil-service provisions in the charter, which, however, do not affect dismissals made for reasons of economy. See Swantush v. City of Detroit, 257 Mich. 389; Owen v. City of Detroit, 259 Mich. 176; Durkin v. Newark Board of Fire Com’rs, 89 N. J. Law, 468 (99 Atl. 432); Essinger v. New Castle, 275 Pa. 408 (119 Atl. 479). As to the location of the power of appointment and removal of firemen, see Delaney v. Detroit Board of Fire Commissioners, 244 Mich. 64.
The order of the lower court, denying relators’ petitions for writs of mandamus, is affirmed, without costs. •
McDonald, C. J., and Clark, Potter, Sharpe, North, Fead, and Wiest, JJ., concurred. | [
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North, J.
The sole question here presented is, in an equity case wherein there is an unsatisfied balance due on a decree for a money debt, can a writ of garnishment issue thereon from the circuit court in chancery and a statutory garnishment proceeding* be successfully maintained ? In a garnishment proceeding so instituted the garnishee defendant’s motion to quash the proceeding was denied in the circuit court, and it has appealed.
Appellee contends that a fair and reasonable construction of the garnishment statute (3 Comp. Laws 1929, § 14857 et seq.) leads to the conclusion that statutory garnishment proceedings may be instituted and maintained on the chancery side of the circuit court as well as on the law side. It must be conceded that if certain phrases contained in the garnishment statute are considered wholly apart from the other portions of the statute, an inference may be drawn which supports appellee’s contention. However, we think a fair construction of the statute, considered as a whole, especially in the light of the established practice in Michigan by which the distinction between law and equity is preserved,’necessitates the conclusion that garnishment is a legal remedy and not an equitable one. The proceeding- is purely statutory. Section 14867 of the statute provides that an affidavit for garnishment “ shall be held and considered as a declaration by the plaintiff against the garnishee as defendant;” that admission in a disclosure ‘£shall have the same effect of admissions in a plea;’’ that a statutory issue ££shall be deemed framed;” and “judgment may be rendered against such garnishee defendant, as upon declaration and plea;” and trial by jury of the garnishment issue may be demanded by either party. Section 14871 provides:
“If by the verdict (not decree), the garnishee be found liable, as such, for an amount equal to or greater than the judgment and costs against the principal defendant, judgment shall pass only for the latter amount; in other cases it shall pass for the amount of liability ascertained by the verdict.”
From the foregoing provisions of the statute, as well as from others which we forego quoting, it quite conclusively appears that the garnishment proceeding must be on the law side of the court regardless of whether the principal defendant’s liability has been determined by a judgment at law or a decree in equity.
Being statutory, garnishment proceedings must follow strictly the statutory provisions. In Kennedy v. McLellan, 76 Mich. 598, this court said:
“It has been held so many times in this State that garnishee proceedings must follow the statutes strictly, and cannot be extended beyond the plain letter of them, that it is unnecessary to cite the numerous decisions so holding.” Citing several cases.
. An unsuccessful attempt to circumvent the lack of statutory authority to garnishee in an equitable proceeding seems to have been made in Foster v. Kent Circuit Judge, 116 Mich. 285; and in Toth v. Toth, 242 Mich. 23 (56 A. L. R. 839), we quoted approvingly :
“ ‘If the garnishment proceeding is based on a prior decree, rendered in a. court of chancery, it is necessary to sue over in a court of law and to issue the garnishment writ in the county where the suit at law on the decree is commenced. The writ of garnishment cannot be sued out of a court of chancery; neither can it stand alone in a court of law, as above stated; and the two courts are distinct. While garnishment, in other words, may be based on an indebtedness on decree, it cannot be based on the decree itself.’ 1 Stevens’ Michigan Practice, p. 144.”
A Federal decision involving the Michigan garnishment statute, which decision is in accord with our holding herein, will be found in United States, ex rel. Mudsill Mining Co., v. Swan, 13 C. C. A. 77 (65 Fed. 647). The general holding’ on the question here involved has been thus stated:
“A proceeding sometimes called ‘equitable garnishment’ has long been known to equity practice, but in the absence of clear statutory sanction garnishment, properly so-called, cannot issue out of a court of chancery.” 28 C. J. p. 20.
If, as appellee urges, garnishment should be available as a means of enforcing a money decree in equity, and this without instituting* proceedings on the law side of the court, it becomes a matter of legislative con'cern. The courts have no right to sanction garnishment proceedings in equity in view of the provisions of our statute which necessitate the conclusion that the statutory remedy in garnishment afforded by the • legislature is confined to the law side of the court.
This appeal is in the nature of mandamus. The case is remanded to the circuit court with directions to vacate the order denying appellant’s motion to dismiss the writ of garnishment and that an order be entered quashing the writ and dismissing the garnishment proceeding. If necessary the appropriate writ will issue. Costs to appellant.
McDonald, C. J., and Clark, Potter, Sharpe, Wiest, and Bittzel, JJ., concurred. Fead, J., took no part in‘this decision. | [
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] |
Potter, J.
Petition by the city of Detroit to condemn an easement in property for street purposes. Prom a judgment of condemnation fixing damages of .appellant at $2,557.75, it appeals. The .site of the property is the same involved in City of Detroit v. Empire Development Co., 259 Mich. 524. In that case petition was filed to condemn the fee of the land in question for a water board site. There was verdict of condemnation and damages assessed at $87,500. After verdict and before confirmation of the award, the city discontinued the case. It then commenced this case. It is claimed that case constitutes former adjudication. In City of Detroit v. Empire Development Co., 259 Mich. 524, the city sought to take the fee of the land. In this case it seeks an easement only. The city of Detroit, at the time this proceeding was instituted, was in possession of the premises. It acquired possession under an agreement with a land contract purchaser, made improvements upon the premises, the land contract purchaser defaulted, and was ousted, and this ouster carried with it plaintiff’s rights. The city then began the condemnation case cited above. Defendant claims the second proceeding is unconstitutional. City of Detroit v. Empire Development Co., 259 Mich. 524, holds the former proceedings were discontinued and these proceedings begun by plaintiff in good faith, and this therefore cannot be regarded as a second experimental suit to acquire the land at a less figure than the award in the former proceeding. The same issue is not involved that was involved in the former suit, and the verdict in that case, not having been confirmed, is no bar to the proceedings here involved. The city has a right to condemn an easement in property for street purposes. The question of necessity, properly declared by the city and determined by the jury, cannot here be re-examined. Condemnation proceedings are inquisitorial in their nature. The constitutional tribunal for the determination of the issues is the jury; the judge, after the jury is impaneled, acting in an advisory capacity. The trial judge in the course of the trial said:
“I want the jury to understand that they are the sole judges of the law and the facts. You are it. This is a constitutional jury under the Constitution of the State of Michigan, which provides for 12 men to make this inquiry, and you are the judges of the law. What I say to you is of no more importance than what anybody else says to you. If you think what I say is all right, why all right, and if you don’t think so, that is all right, too, the same as anybody else.”
In his formal charge to the jury, he said:
“What I am saying to you, of course, you are not bound to accept. I am not charging you. I am act ing in the same capacity as counsel here. If what I said to yon appeals to yon, you have a right to accept it or any part of it that appeals to yon. If I have said anything that does not appeal to yon, then yon have the right to reject it. Yon are not at all bound by what I say any more than yon are by what counsel say. Yon are the judges of the law and the facts in the 'case. ’ ’
We find no reversible error in the charge of the court or in the proceedings.
Judgment affirmed, with costs of this court to appellee.
McDonald, C. J., and Clark, Sharpe, North, Fead, Wiest, and Butzel, JJ., concurred. | [
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North, J.
Plaintiff by a bill in equity seeks cancellation of a special paving assessment levied against property located on the northeast corner of Grand River avenue and what is now denominated St. Mary’s avenue in the city of Detroit. The assessment is for paving St. Mary’s avenue adjacent to plaintiff’s property. It is claimed that the property is not subject to this assessment because the thoroughfare as laid out and dedicated in Norwood subdivision was and is a boulevard both in law and in fact; and also because plaintiff’s predecessor in title and in office donated a substantial amount of valuable land for street purposes in laying out St. Mary’s boulevard through the Norwood subdivision with the express understanding and agreement that the thoroughfare should be a boulevard. Plaintiff had decree in the circuit court; and the question here for review on defendants’ appeal is whether this thoroughfare now known as St. Mary’s avenue as laid out in the Norwood subdivision is in fact and in law a boulevard. If it is, the expense of paving because of a charter provision is a charge against the city at large; but if it is not a boulevard plaintiff’s property is subject to the assessment made for paving.
The plat of the Norwood subdivision was recorded July 24, 1916. The property was then located in Redford township, Wayne county. The subdivision was annexed to the city of Detroit in 1923. • On the recorded plat this thoroughfare is denominated St. Mary’s boulevard. It extends through the subdivision from Grand River avenue on the south to Fenkell avenue (formerly 12th street) on the north, a distance of approximately 2,003 feet. The southerly 799 feet of the boulevard is 80 feet in width, and the remaining portion 85 feet in width. Neither plaintiff herein nor. plaintiff’s predecessor had any interest in the laying out of Norwood subdivision, which lies to the west of St. Mary’s boulevard, while plaintiff’s property lies to the east. The year following the annexation of this subdivision, the defendant city by ordinance changed the name of this boulevard to St. Mary’s avenue. The city also gave this name to the extensions of this thoroughfare both north and south of Norwood subdivision through upwards of 20 separate subdivisions extending substantially three and a half miles south of Grand River avenue to the city limits of Dearborn and about two and a half miles north to Pembroke avenue in the city of Detroit. The thoroughfare thus by ordinance denominated St. Mary’s avenue had theretofore been known by various names in the various subdivisions in which it was laid out. In places the street jogs 90 feet or more, and also at four or five places the continuity of the street is broken by intervening parcels of unplatted land. The width of the street varies in different localities, but usually it is from 50 to 60 feet with the exception of Norwood subdivision, where, as noted, the southerly portion is 80 feet in width, and the northerly portion 85 feet. It appears that each of the plats through which this street passes was recorded subsequent to the recording of the Norwood plat, at least this is true of most of them and of the plat lying next south and the one lying next north of the Norwood subdivision.
Without petition from plaintiff or property owners in the Norwood subdivision, the city of its own motion decided to pave St. Mary’s avenue. The work was done in 1928. Outside of the Norwood subdivision the pavement on St. Mary’s avenue was laid -30 feet in width, but inside the Norwood sub-' division the pavement was 40 feet in width, and centrally located in the thoroughfare. In laying this pavement, the city removed the island or parkway and the trees and shrubbery that theretofore had been in the center of the street. The facts here are such that the claim could not plausibly be asserted that any portion of St. Mary’s avenue outside of Norwood subdivision is a boulevard. Doubtless it is true that a comparatively short section of a long thoroughfare should not be held to be a boulevard when the major portion thereof confessedly is not a boulevard, unless persuasive circumstances exist which amply justify such holding. But when the facts render a contrary holding inequitable, there should be no hesitancy in making the determination accord with the factual situation. In Campbell v. City of Detroit, 259, Mich. 297, a section of Forrer avenue was held to be a boulevard, although the remainder o/ the thoroughfare, over seven miles long, was not a boulevard. In the instant case the facts are such that it would be highly inequitable, if not in violation of contract, to sustain the city’s contention that this thoroughfare as laid out in the Nor-wood subdivision is not a boulevard.
As noted above, without being interested in the laying out of the subdivision, plaintiff’s predecessor donated from its property a valuable piece of land 40 feet wide and about 800 feet long to be included in this thoroughfare, but on the express condition that it should be known as St. Mary’s boulevard, and “that driveways be cut through the park portion of said proposed boulevard and at such places as may be designated by this committee” which represented the donor. Prior to this donation plaintiff’s predecessor for many years had occupied for church purposes the property now sought to be assessed. It is now occupied and used for church purposes and kindred activities. In addition to the church, there are located thereon a rectory, a convent, and a parochial school. The land which plaintiff’s predecessor gave for this thoroughfare was not only valuable but was obviously well suited for the future activities of the church. After donation of this land, the plat on which this thoroughfare was laid out as a boulevard was approved by public authorities and became a matter of record. Plaintiff’s predecessor joined in the dedication. Not only was the thoroughfare denominated a boulevard on the plat, but being 80 to 85 feet in width it was to some extent at least physically suited for a boulevard. It was so developed by grading and cinderizing the traveled portion of the street and by leaving an island in the center on which the trees remained and shrubbery was planted. It was known as a boulevard and was so designated by the street signs; and there is testimony that purchasers of property adjacent to it considered the thoroughfare a boulevard and were influenced thereby in purchasing.
Appellants stress the fact that the plat of the Nor-wood subdivision recites that the “streets and alleys as shown on said plat ’ ’ were dedicated to the use of the public. It is urged that because of such dedica tion the thoroughfares should be held to be ‘ ‘ streets ’ ’ and not boulevards. The recital is of évidentiary force (Barris v. City of Detroit, 260 Mich. 622); but it is not conclusive. In this connection it may be noted it appears from the testimony that the recital of dedication was placed upon the record of the plat by the use of a rubber stamp furnished by the engh neers or the Wayne county auditor’s office. It was a stamp kept for such general use. This does not' wholly nullify its evidentiary force, but it’ does bear upon the persuasiveness of the recital.
It is also stressed by appellants that this thoroughfare throughout its length of substantially six miles has now been by city ordinance denominated St. Mary’s avenue; and the inadvisability of a thoroughfare being considered a boulevard in one small section and a street or avenue as to its decidedly major portion is pointed out. In a given case, these circumstances might be and usually would be very persuasive and possibly determinative; but in the instant case the record is such that it would be highly inequitable to hold that, notwithstanding plaintiff had donated and dedicated valuable property on the express condition that the thoroughfare for which it was to be used should be a boulevard and developed as such, it was none the less an ordinary street or avenue and plaintiff’s property subject to assessments for improvements thereon. We think the facts disclosed by this record establish quite conclusively that, at the time of the annexation of the subdivision to the city of Detroit (November, 1923), this thoroughfare as it then existed in that subdivision was in fact and in law a boulevard. It was not only so called, but it had been so developed. Its physical conditions were such as constituted notice to the city at the time of annexation that it was a boulevard rather than an ordinary street. It continued as such for six or seven years, and until the city changed it incident to paving. This court has repeatedly stated that, after annexation, a city may not render adjacent property liable to assessment for street improvements by merely changing’ the designation of boulevards to streets; and further, that each case must be determined from its own facts. Campbell v. City of Detroit, supra. Under the circumstances disclosed in this record, the decree entered in the circuit court holding that the portion of St. Mary’s avenue in Norwood subdivision is in fact and law a boulevard must be sustained.
Some complaint is made by appellants as to the return of the circuit court commissioner before whom the testimony in this case was taken. The objection raised does not affect final decision herein, nor do we think it seriously concerns the common practice of taking testimony on reference before commissioners. This phase of the record is therefore passed without comment.
The decree entered in the circuit court is affirmed, with costs to appellee.
McDonald, C. J., and Clark, Potter, Sharpe, Pead, Wiest, and Buteel, JJ., concurred. | [
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Clark, J.
(dissenting). At two o’clock in the afternoon of December 17, 1931, plaintiff, unmarried, age 21 years, left, with another young woman, her place of employment, Consolidated Paper Company’s plant, in Monroe, and walked west on the sidewalk on the north side of First street. Just north of the street and parallel to it is a railroad siding. Leading from the siding in a southeasterly direction, and crossing the street, is a spur track. Plaintiff observed a moving locomotive and cars on the spur. When she reached the place where the sidewalk crossed the spur track, the locomotive was standing across the street facing southeast, and the end of‘the tender, a short distance, perhaps 10 or 15 feet from the sidewalk. Plaintiff saw it standing there. She proceeded to pass behind it on the sidewalk, and as she did so, the tender, because of the angle of the spur track, was behind her and out of her view. Without warning by trainman, switch-man, bell, or otherwise, the locomotive backed sud denly and the end of the tender struck plaintiff, who fell and suffered serious injury, chiefly loss of an arm. Defendant put in no testimony, and at the conclusion of proof requested directed verdict, which was refused. Plaintiff had verdict and judgment for $30,000, which, on motion for new trial and by order and remittitur, was reduced to $15,000. Defendant has appealed.
The chief question is that plaintiff was guilty of contributory negligence as a matter of law.
The standard of conduct, adopted by this court in Davis v. Railway Co., 241 Mich. 166, is:
“There is a standard of conduct, based on the rule of reasonable care, to which all drivers of motor vehicles must conform or bear the consequences. This standard is stated by the Supreme Court of the United States in Baltimore & Ohio R. Co. v. Goodman, 275 U. S. 66 (48 Sup. Ct. 24, 56 A. L. R. 645), and we quote therefrom:
‘ ‘ ‘ When a man goes upon a railroad track he knows that he goes to a place where he will be killed if a train comes upon him before he is clear of the track. He knows that he must stop for the train, not the train stop for him. In such circumstances it seems to us that if a driver cannot be sure otherwise whether a train is dangerously near he must stop and get out of his vehicle, although obviously he will not often be required to do more than to stop and look. ’ ’ ’
It will be observed that this rule is especially applicable to care in respect of moving trains.
It is recognized that:
“Special conditions, however, may change the duty from a standard of conduct to an element of care to be weighed by a jury.” Ackerman v. Railroad Co., 249 Mich. 693.
And see McPeake v. Railway Co., 242 Mich. 676.
To hold plaintiff guilty of contributory negligence as a matter of law is to hold that she was bound to anticipate that the locomotive standing near the sidewalk would he backed suddenly and without warning of any kind. She was not so bound.
In McWilliams v. Detroit Central Mills Co., 31 Mich. 274, it was held:
“The testimony indicates that he was crossing while the cars were standing still, and that they were suddenly started by the locomotive pushing against them to back them up. A passenger along the sidewalk of a public street has a right to expect some warning before any sudden movement of this kind, and there should be very plain proof of negligence to bind him under such circumstances.”
And see Davis v. Railroad Co., 142 Mich. 382 (19 Am. Neg. Rep. 325). The question of plaintiff’s contributory negligence was for the jury.
Error is assigned on the following from the charge:
‘ ‘ The testimony in this case shows that as a matter of law that this defendant railroad company was guilty of negligence, and that this negligence was the proximate cause of this accident.”
On the facts here the instruction that defendant was guilty of negligence was not improper. Davis v. Railroad Co., supra. The inadvertent statement that such negligence was the proximate cause of the accident was incorrect, as it would wholly exclude the question of plaintiff’s contributory negligence, which question the trial judge, in other paragraphs of the charge, left to the jury. The record is that at the conclusion of the charge, counsel for plaintiff called attention to the inadvertence which the trial judge thereupon expressly corrected by further instruction. Considering the correction and the charge as a whole, we find no reversible error.
Lastly, the judgment is urged to be excessive. Plaintiff, at the threshold of life, expectancy of 41.53 years, earning from $13.50 to $15 per week, lost an arm. Pain, suffering, humiliation, and diminution in capacity and opportunity, need no discussion. A review of cases covering the question of exeessiveness of verdict for loss of an arm will be found in L. R. A. 1915 F, p. 53. And see Schnurr v. Railway, 222 Mich. 591; Cawood v. Earl Paige Co., 239 Mich. 485.
Under the authorities and on this record we agree with the trial court that judgment is not excessive. No other question requires discussion.
Judgment should be affirmed.
McDonald, C. J., and Potter, J., concurred with Clark, J.
Wiest, J.
I find reversible error. The court instructed the jury:
“In other words, the testimony in this caáe shows that as a matter of law that this defendant railroad company was guilty of negligence, and that this negligence was the proximate cause of this accident, so we needn’t spend any time upon that part of the case.”
This was an instruction to find for plaintiff, and was not corrected by subsequent instruction that if plaintiff was guilty of contributory negligence she could not recover. Under the undisputed evidence defendant was entitled to a directed verdict. The court was in error in instructing the jury:
“I know of no rule of law, or statute of this State, that requires having a person look for any train at any given distance; they are bound to use reason able care before going upon any railroad track or endeavoring to cross tbe track.”
This instruction was preceded, but not immediately, by the following:
“Her testimony is, as I have already given it to you, that she, when 15 feet east of the spur track, observed this engine standing upon the highway with the tender at least partly onto that part of the street lying between the pavement and sidewalk, and that she did not again look to see whether or not that'engine had started up, or whether she was in a place of danger.”
Under the circumstances, plaintiff was in a position and had opportunity to watch the movement of the engine, and it was her duty to maintain a watch of its progress as well as heed that of her own, and, had she done so, the accident would not have happened.
She was guilty of a want of ordinary care, and the accident happened by reason of the negligence of defendant and the contributory negligence of plaintiff. Johnson v. Railroad Co., 246 Mich. 52.
The judgment is reversed, with costs to defendant, and without a new trial.
Sharpe, North, Pead, and Butzel, JJ., concurred with Wiest, J. | [
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Clark, J.
The bill was filed to foreclose a mortgage made by Schlee-Brock Aircraft Corporation to plaintiffs, and to establish its priority over a mortgage by same mortgagor to Johanna Janesick, and by her assigned to Emma Ohlsson and Grustave Carlson. Prom decree for plaintiffs, defendants have appealed.
Plaintiffs ’ mortgage was made April 14, 1930, and recorded May 28th following. The mortgage to Mrs. Janesick was made April 24, 1930, and recorded May 19th following. So it appears the second mortgage was recorded before the first mortgage 'to plaintiffs. On June 18,1930, Mrs. Janesick assigned her mortgage to said Ohlsson and Carlson. A finding of the trial judge, fully sustained by the record, is that the Janesick mortgage was made and ac cepted with full knowledge of the then unrecorded mortgage to plaintiffs. Loveland v. Bump, 198 Mich. 564. When the assignment of the Janesick mortgage was made, both the mortgages had been recorded, and it appeared of record that plaintiffs’ mortgage was prior in point of time by 10 days. The assignees are bound by the notice so afforded by the record. Mrs. Janesick is held to have had actual knowledge of plaintiffs’ prior mortgage. The assignees are charged with the notice of record and cannot be held to be subsequent transferees without notice. i
We quote syllabus of VanAken v. Gleason, 34 Mich. 477:
“The purchaser of a mortgage is held bound by such notice as the registry afforded of another mortgage of the same date, but subsequently recorded, of which his vendor had actual knowledge. ’ ’
See Fischer v. Lauhoff, 222 Mich. 128; Jackson City Bank v. Campbell, 172 Mich. 541; 23 R. C. L. p. 194; English v. Waples, 13 Iowa, 57; Daniel v. Tolon, 53 Okla. 666 (157 Pac. 756, 4 A. L. R. 704)Stianson v. Stianson, 40 S. D. 322 (167 N. W. 237, 6 A. L. R. 280); Stearns Lighting & Power Co. v. Central Trust Co., 139 C. C. A. 442 (223 Fed. 962).
Affirmed, with costs.
McDonald, G. J., and Potter, Sharpe, North, Fead, Wiest, and Butzel, JJ., concurred. | [
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] |
Sharpe, J.
On May 15, 1927, the Bennett Brass Company, a corporation, with its office and principal place of business at Greenville, executed a mortgage, covering both real and personal property, to C. Sophus Johnson, of Grand Rapids, as trustee, to secure the payment of certain notes to the amount of $75,000. The property mortgaged was described as follows:
“Lots 17, 18, 19, 20, and 21 of Edwards Third Addition to the city of Greenville, including all buildings now on or hereafter to be built thereon, machinery, equipment, and the merchandise inventory of raw materials and manufactured products, including any additions or substitutions of equipment and merchandise inventory and any and all future acquired property.”
It was recorded as a real estate mortgage on July 20, 1927, and later filed as a chattel mortgage on August 5th of that year. On November 29,1927, the defendant Grand Rapids Trust Company was appointed receiver for the Bennett Brass Company by the circuit court for the county of Montcalm, in chancery, and duly filed its acceptance and bond as such. The defendant Peter D. Kline, a vice-president of the company, acting for it, took possession of all of its assets. The inventory filed by him disclosed that the personal property covered by the chattel mortgage was of the value of $31,994.09’.
It appears that at the time the mortgage was executed the brass company was indebted to certain banks in the sum of $37,500. These notes were guaranteed by seven directors of the company. They were renewed between the date of the mortgage and its record on August 5th, and were afterwards paid in full by them in January, .1928.
On April 27, 1928, Mr. Johnson, as trustee, called a meeting of these directors, who were also the holders of the notes secured by the mortgage, to consider the question of foreclosing the mortgage. He advised foreclosure. There was discussion, in which Mr. Kline, who was also present, at the request of some of the note holders, took part and stated that in his opinion there was an opportunity to continue the receivership successfully. Mr. Johnson testified:
“Audi said to him then, ‘Mr. Kline, do you realize the inventory which you have filed’ — I had some information about the inventory, — was around thirty-three or thirty-four thousand dollars worth of merchandise — ‘and that belongs to us, or to me as trustee for these note holders?’ And he said ‘Yes.’ And if we foreclose on that and that we wanted to go ahead with that. He then stated to those present if we did not foreclose that they would see to it that we would — that we would be reimbursed, that is, that they would turn over to me as trustee, or to the bondholders when they were through operating the plant, merchandise or cash to its equivalent, to the personal property then on hand.
“Q. Of what value?
“A. It was property then on hand, which was around thirty-three or thirty-four thousand dollars.
“Q. What next took place?
“A. After Mr. Kline made that statement it was discussed, and I think I was still of the opinion we should still foreclose on that, because I was still being criticized by the different note holders because of nonpayment of the interest when I hadn’t received any, and I told them I couldn’t. I know Mr. Kline made the statement as — from the different people present we took a vote on it and I asked each one of the men present then, if we should foreclose or should go ahead under the proposition that Mr. Kline had made. We took a vote and I think it was unanimously agreed they could go ahead with it and use the materials under the proposition he had made.”
His testimony as to what was then said by Mr. Kline is, in effect, corroborated by several of the note holders who were present.
Mr. Kline testified that lie then stated that the “notes and the mortgage were not within the scope or jurisdiction of the receiver;” that he had promises of additional business, and that — ■
“I explained to them that with the results obtained up to that time, and with these additional possibilities, they might not desire to proceed with foreclosure, but specifically were they told by me, not once, but three or four different times, that we had no interest whatever in the matter of whether they proceeded with foreclosure or did not”- — •
and that the note holders present “decided the receiver had better continue on for a period, at least.”
Mr. Kline also testified that the defendant trust company continued the business and advanced its own money at times' to carry it on, but it was unsuccessful, and that, when its assets were finally disposed of, the personalty covered by the trust mortgage had been used up, and, on a sale had, the equity in the real estate and some of the equipment not covered by the mortgage were bid in by a representative of the trustee for the sum of one dollar, and that there was nothing left for creditors after paying the expenses of the administration by the receiver.
One June 23, 1930, Mr. Johnson resigned as trustee and the plaintiff, G-eorge B. Hopkins, was duly appointed his successor. This action was brought by him to recover the value of the personalty included in the mortgage, under the claim that it had been converted by the defendants to their own use.
At the conclusion of the evidence submitted by plaintiff, and also at the conclusion of all’ of the proofs, the defendants moved for a directed verdict. These motions were denied and a verdict directed for plaintiff for the appraised value of the property mortgaged, less the amount of certain credits extended after the execution of the mortgage and before it was filed as a chattel mortgage, the balance, including interest, amounting to $27,629.85. Both parties have appealed from the judgment entered thereon, the plaintiff claiming that the court erred in reducing the damages to which he was entitled.
While the agreement claimed to have been made at the meeting held on April 27th is set forth in both counts of the declaration, plaintiff’s right of recovery is based upon the conversion of the personal property included in the mortgage. On the argument for -directed verdicts, the court said to plaintiff’s counsel, “I understand the plaintiff is standing now squarely on that one count of conversion, ’ ’ to which counsel replied: “That was our motion, directed to that, if the court please. ’ ’ In the briefs filed; liability is predicated on conversion alone, so decision by us must rest thereon.
While there is dispute as to what was said‘at the meeting held on April 27th, it clearly appears that the note holders, against the advice of the trustee, consented that the receiver might use the personal property covered by the mortgage in an effort to relieve the company from its financial embarrassment. They were all stockholders, and, as such, interested financially in the accomplishment of this result. This property consisted largely of raw material and unfinished goods, and was used by the receiver in the manufacture of the products in the sale of which the company had been engaged. It could not thereafter be returned to the trustee in the condition in which it was when consent to its use was given. All that the note holders could have expected was the return of an equivalent in property or payment therefor in money. The continuance of the business by the receiver resulted in losses, of which the note holders were informed, and it does not appear that they in any way remonstrated on account of the manner in which it was conducting the business.
In view of these facts, it seems clear that this action for conversion cannot be sustained.
“It is a well-settled rule that if the owner expressly or impliedly assents to, or ratifies, the taking, use, or disposition of his property, he cannot recover for a conversion thereof.” 38 Cyc. p. 2009.
“Trover is the name of the action which lay, at common law, for the recovery of damages for the conversion of personal property, and the gist of the action is the disposing or assuming to dispose of another’s goods without his authority.” 26 R. C. L. p. 1098.
“Trover is not maintainable as for a conversion of money unless there is an obligation on defendant’s part to return the specific money intrusted to his care.” Shrimpton & Sons v. Culver (syllabus), 109 Mich. 577.
In Globe & Rutgers Fire Ins. Co. v. Fisher, 234 Mich. 258, it was sought to hold an insurance agent liable in such an action for the conversion of moneys collected by him as premiums and not accounted for. The court said:
“The action of trover (now trespass on the case for conversion) could be maintained where the plaintiff was lawfully entitled to the possession of the specific thing converted. The rights of the parties might or might not be evidenced by a contract; but if evidenced by a contract, the contract must establish the right of the plaintiff to the possession of the specific thing converted in order to maintain the action. ’ ’
When the note holders gave their consent to the use of the mortgaged property by the receiver for the purpose of its manufacture into products for sale, they thereby rendered it impossible for a return of.it to be made to them. When so used, its identity was at once destroyed and return of it could not be had if demand had been made therefor. Their assent to the disposition made of it by the receiver bars the right to recover for its conversion.
Counsel for plaintiff call attention to many cases, collected and referred to in Baxter v. Woodward, 191 Mich. 379 (Ann. Cas. 1918C, 946), wherein it is held that when a bailee, having authority to use a chattel in a particular way, uses it in a different way, or to a greater extent than authorized, such unauthorized use is a conversion thereof. These are not applicable to the facts here presented, as it appears that this personal property was used by the receiver in the manner in which it was intended to be used when consent to its use was given.
It follows that the judgment entered must be reversed and set aside, and the cause remanded to the trial court, with direction to enter a judgment for the defendants, with costs of both courts.
McDonald, C. J., and Clark, Potter, North, Fead, Wiest, and Butzel, JJ., concurred. | [
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Sharpe, J.
The plaintiff and her husband, Banner Perkins, were traveling in a northerly direction from Bowling Green towards the city of Toledo, in the State of Ohio, in the evening of February 5,1930, in a Nash car, owned by her but driven by her husband. At about 9:30 o’clock their car collided with the rear *of a truck standing on the highway, owned by the defendant corporation and driven by the defendant Roberts, and Mr. Perkins sustained injuries resulting in his death the following day. She brings this action as administratrix of his estate to recover the damages incident thereto. On trial before the court and a jury she had verdict and judgment for $9,950, from which the defendants have taken this appeal.
Among the errors complained of is the refusal of the court to direct a verdict for the defendants and its denial of defendants’ motion for judgment non obstante veredicto, both based on the claim that no negligence on the part of the defendants was shown and that the deceased was guilty of contributory negligence.
The testimony of plaintiff may be summarized as follows:
She and her husband were driving north on Dixie highway about five miles from Bowling Green. The road was paved 16 or 17 feet in width. They had their headlights on. It was a very misty night and extremely cold.
“There wasn’t exactly snow; there had been snow previously. But you would go along all right for a while, and then you would sort of come on ice, and then you could drive a little ways again and it was sort of patchy. ”
There was a shoulder on the right-hand side about two feet wide. They were traveling about 25 miles per hour. When about 30 feet from the truck, plaintiff saw—
“apparently a black object, but I could not discern what it was, or I could not have said at the time what it was.”
It was in their path, all “four wheels on the pavement. ’ ’
Plaintiff’s husband—
“put on the brakes on the car, and sort of jerked, and then it started to slide, so he took hold of the wheel, so far as he could, so he turned it to the right, and he reached down with his left hand and pulled on the emergency brake. # # The car slid right into the truck. * * # The side I was sitting on turned full around, and I was thrown from the car. * * * He took to the ditch and then turned to the right.”
The car struck the corner of the truck “toward the center of the road.” It turned part way around. She got up and went to the car. Her husband was “sitting in the car.” There was nobody in the cab of the truck. There was no light on the rear of the truck.' “I 'screamed for help,” and some people across the road came with a lantern. Motorists came along, and her husband was taken out and to a farm house. He was conscious and able to walk. He was afterwards taken to a hospital and treated by doctors, but died the next morning.
On cross-examination she said that they were both familiar with the highway; that they could see about 30 feet ahead of their car; that they had not used their windshield wiper. “You could not see their lights plainly” — of the oncoming traffic. “They gave a funny dazzling sort of a light. * * * My husband has stopped his car within 10 feet.”
“Q. Did you see any lights at all*?
“A. "No, I did not see any lights.”
A car could have passed the truck as it stood there.
The plaintiff was the only eyewitness to the collision. It thus appears by the undisputed testimony that the deceased was driving the car along a slippery road at the rate of about 25 miles per hour in the nighttime, and that the truck standing therein could not be seen by him, owing to the darkness and the atmospheric conditions, until he had reached a point in the highway about 30 feet from it. At the rate of speed he was traveling, the car would cover this distance in less than one second of time, and it appears that there was plenty of room for him to have passed the truck had he seen it in time to do so. These facts being undisputed, had the collision occurred in this State, it would have been the duty of the trial court to have granted defendants’ motion for a directed verdict on the ground of the contributory negligence of the deceased. Humphrey v. County of Wayne, 257 Mich. 398, and cases therein cited.
The collision occurred in the State of Ohio.
“Where an action is brought in one jurisdiction for a tort committed in another, the general rule is that all matters relating to the right of action are governed by the lex loci delicti, and all matters re lating purely to the remedy by the lex fori.” 5 R. C. L. p. 1036.
Counsel for the plaintiff contends, and the trial court after lengthy argument concluded, that, under the law of that State as construed by its appellate court, the question of contributory negligence must be submitted to and passed upon by the jury. It was asserted by plaintiff’s counsel, and conceded by defendants’ counsel, that under the law in that State the syllabi state the holdings of the court rather than the opinions.
The case most strongly relied on is Tresise v. Ashdown, 118 Ohio St. 307 (160 N. E. 898, 58 A. L. R. 1476), the first syllabus of which reads as follows:
“In an action to recover damages for injuries claimed to have been sustained by the driver of a motor vehicle resulting from a collision with another motor vehicle parked at the right side of the highway at night with no light in the rear or other warning thereof, an instruction to the jury, that operation of such motor vehicle at such a rate of speed that the driver cannot stop within the distance that an obstruction in the highway could be seen by his own headlights constitutes negligence per se, is erroneous.”
This holding must be considered in the light of the facts there presented. The defendant left his car parked at the curb of a street in the city of Cleveland after dark and without the light in front or rear thereof required by an ordinance of the city. There was no eyewitness to the collision caused by the motorcycle, on which the deceased was riding, running into it. He was instantly killed. A provision of the ordinance required motorcycles to have a lamp thereon showing a white light visible within a reasonable distance in the direction towards which it is proceeding. The trial court instructed the jury that it was the duty of the deceased to keep his motorcycle ’“under such control that the car could be stopped within the range of the light produced from the light thereon,” and “to operate his car at such rate of speed that if there was an obstruction in the road or street that he could stop within the distance that the obstruction could be seen from the light on his machine.”
The appellate court held that this instruction was erroneous; that the “conduct of a driver of a motor vehicle which is not shown to have been in violation of law or ordinance should not be declared to be negligence per se, but that each such case must be considered in the light of its facts and circumstances, and the usual tests applied to determine whether there was a failure to exercise ordinary care in the operation of such motor vehicle. ’ ’
In Cleveland, etc., R. Co. v. Lee, 111 Ohio St. 391 (145 N. E. 843),.the second paragraph of the syllabus reads:
“In an action involving the negligence of the defendant and contributory negligence of the plaintiff when, giving to every portion of the plaintiff’s evidence the most favorable interpretation in favor of the absence of negligence on his part, such evidence under such interpretation is susceptible of no other reasonable inference than that of negligence on his part, directly contributing to his injury, the question of contributory negligence ceases to be a question of fact for the determination of the jury, but, for the purposes of the case, becomes an uncontroverted fact for a declaration by the court of the law applicable thereto. It is the duty of the court in such case to direct a verdict.”
There was a similar holding in Buell v. Railroad Co., 114 Ohio St. 40 (150 N. E. 422). The first section of the syllabus reads:
“Where, in an action for negligence, a motion is made for directed verdict in defendant’s favor at the close of plaintiff’s evidence on the ground that plaintiff’s evidence raises a presumption of contributory negligence, the issue raised by such mótion requires that plaintiff’s evidence be given the most favorable interpretation, and, if such evidence under such interpretation is susceptible of no other reasonable inference than that of negligence on his part directly contributing to the injury, and defendant’s conduct is not shown to be wilful or malicious, and plaintiff is not aided by any other evidence in the case, it becomes the duty of the court to direct a verdict. ’ ’
Throckmorton’s 1930 Annotated Code of Ohio (Baldwin’s Rev.), § 12603, was put in evidence. It reads in part as follows:
“No person shall operate a motor vehicle in and upon the public roads and highways at a speed greater or less than is reasonable or proper, having due regard to the traffic, surface and width of the * road or highway and of any other conditions then existing, and no person shall drive any motor vehicle in and upon any public road or highway at a ■greater speed than will permit him to bring it to a stop within the assured clear distance ahead.”
It was insisted that the holding in Tresise v. Ashdown, supra, was applicable thereto. But the attention of the court was not called to the fact that the provision that the speed of a motor vehicle shall not be greater than will permit the driver to bring it to a stop within the assured clear distance ahead was inserted in this statute by an amendment enacted in 1929 (113 Ohio Laws, p. 283), and after the above case was decided. It may also be noted that the court in that case rested decision on the fact that the driver of the motorcycle was not violating any law or ordinance at the time of the collision.
It does not appear that section 12603 as amended has received a construction by the Supreme Court of Ohio.
“Where a foreign statute has not been construed in the State of enactment, the courts of the State where the cause is on trial will construe it as they would a like statute of their own State.” 59 C. J. p. 946.
This court has, as before stated, many times placed its construction upon similar language in our statute (1 Comp. Laws 1929, § 4697).
Upon this record, if the negligence of the defendant be conceded, and if the law of either the State of Ohio or of this State relating to the duties of drivers of automobiles upon the highways at night be applied to the facts here presented, and as but one conclusion can be drawn from them, it must be held as a matter of law that the deceased was guilty of negligence contributing to his injury and death, and that a verdict should have been directed in favor of the defendants.
The judgment entered is reversed and set aside, with costs, and the cause remanded to the trial court, with direction to enter a judgment for the defendants.
McDonald, C. J., and Clark, Potter, North, Fead, Wiest, and Btjtzel, JJ., concurred. | [
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North, J.
This is an appeal by the defendant who was convicted of violating sections 25 and 50 of the general banking act, being 3 Comp. Laws 1929, §§ 11922, 11947. The pertinent provisions of the statute are:
“11922 * * * Sec. 25. The total liabilities to any bank of any person or of any company, corporation or firm for moneys advanced, * * * shall at no time exceed one-tenth part of the amount of cap ital and surplus of such bank: Provided, however, That by a two-thirds vote of directors, the liabilities to any bank of any person or company, or corporation or firm may be increased to a sum not exceeding one-fifth of the capital and surplus of the bank; but §uch additional one-tenth of such capital and surplus shall not be loaned to any officer or director, * * * until such officer, (or) director, * * * furnishes collateral or indorsements satisfactory to the directors, or files with the bank a sworn statement of assets and liabilities showing a net worth of sufficient amount to be entitled to such credit.”
“11947 * * * Sec. 50. Every officer, clerk, agent or employee of a bank who shall knowingly aid or assist in any violation of any of the provisions of this act, shall be deemed guilty of a felony. ’ ’
The information contains two counts. It charges that between January 1,' 1930, and June 12, 1930, the defendant, being then and there president and a director of the Union State Bank of Mio, Michigan, a Michigan corporation with capital and surplus not exceeding $25,000, did knowingly and unlawfully incur liabilities to said bank in excess of $14,795 for moneys advanced and loaned to defendant from the funds of said bank, which said loans exceeded one-tenth of the capital and surplus of said bank. The second count is substantially the same except in that it charges defendant’s loan exceeded one-fifth of the capital and surplus.
The undisputed proof discloses that within the period covered by the information defendant was indebted to the bank in the sum of $2,628.96, for which it held his promissory notes. This indebtedness alone exceeds the statutory limitation of one-tenth of the bank’s capital and surplus. But appel lant urges that he might lawfully borrow in excess of the statutory limitation of one-tenth of the bank’s capital and surplus because the bank directors authorized and extended to appellant credit to the ■ amount of $3,500. The trial judge held against this contention, and we think properly so, for the reasons stated in the following portion of his charge to the jury:
“Now, gentlemen, he could not have that credit of $3,500 at this bank, because that would be in excess of one-tenth of the capital and surplus, and he would have to get credit by conforming to the provisions of the statute, which provide that the liability may exceed one-tenth by another one-tenth; but in order to do that he shall deposit additional collateral security with the bank, or file a sworn statement of his assets showing a worth which would entitle him to credit, or an increased liability of one-fifth of the amount of the capital. ' He did not do that.”
In submitting to the jury the amount of defendant’s indebtedness to the bank on promissory notes, a past-due note of $75 on which defendant was the indorser was included. Appellant asserts this as error, claiming that in determining whether the statutory provision has been exceeded only direct liabilities should be considered, not those of an indorser, which are secondary or contingent in character. Regardless of whether such liability is within the terms of the statute, we think the ruling was not prejudicial. Exclusive of this item, defendant’s liability of $2,628.96 on three of his notes held by the bank exceeded one-tenth of its capital and surplus. This uncontroverted testimony alone is sufficient to sustain conviction.
Incident to the people’s case under the second count, these further facts are pertinent: Appellant owned and operated a private bank at Comins, Michigan, known as the Comins Bank of Charles D. Lewis. It became an established practice for the Union State Bank of Mio to cash checks drawn by depositors on the Comins Bank; and also for the Comins Bank to cash checks drawn' against the Union State Bank by its depositors. As.between the two banks, the balance resulting from these operations was debited or credited as the case might be. As the result of cashing checks drawn on defendant’s private bank, a very substantial balance due the Union State Bank was being carried on its books. Complaint of this item was made by the banking commissioner, and on several occasions it was taken up with the directors of the Union State Bank. Appellant had knowledge of this situation; and he claims that he forbade the cashing of checks on his private bank at Comins by the officers of the Union State Bank. Notwithstanding this, the custom continued, and a balance due the Union State Bank accumulated to the amount of approximately $14,000, There can be no question that every time a check on appellant’s private bank was cashed by the Union State Bank his liabilities to the latter bank were increased to the extent of the moneys so advanced for his benefit. Its repayment was a direct liability of appellant. The checks so cashed were not bills of exchange which came within the exception specified in section 11922. Appellant’s contention to the contrary is not tenable, if for no other reason, because these checks were not drawn “against actually existing values” as expressly required by the statute.
The contention made in appellant’s brief that there is no testimony in support of the finding by the jury that plaintiff had knowledge of the cashing of these checks by the Union State Bank cannot be sustained. It is true there is testimony supporting appellant’s contention; but it is also true that there is evidence of his knowledge of the complaints by the banking commissioner, and that this matter was taken up in his presence at meetings of the directors of the Union State Bank. The trial judge very carefully and explicitly instructed the jury that cashing these checks would not constitute an offense chargeable against appellant unless he had knowledge thereof. This instruction was repeated several times, and under the testimony as given no reasons appear for disturbing the determination of this issue of fact.
It is vigorously urged in behalf of appellant that his indebtedness to the Union State Bank evidenced by his three promissory notes aggregating $2,628.96 cannot be considered as in violation of the statutory limitation because each of these notes was given as a renewal of indebtedness which accrued to the bank prior to the period covered by the information. The evident purpose of the statutory limitation is to safeguard the assets of the bank and prevent an excessive amount of credit being extended to any one debtor. If credit is extended in violation of the statute the offense is of a continuing nature, and so long as the condition exists the offending parties may be prosecuted. In the instant case, whether by renewal or otherwise, the excessive loans to plaintiff continued in violation of the statute within the period covered by the information. But entirely apart from the loans evidenced by defendant’s promissory notes, he became directly liable to the Union State Bank for moneys paid out by it on checks drawn against appellant doing business as the Comins Bank of Charles D. Lewis. On March 19, 1930, the amount of appellant’s indebtedness resulting from the payments of such checks was $2,086.65. Defendant’s indebtedness of this character on May 17,1930, had increased to $7,800.74, and on June 12, 1930, it amounted to approximately $11,000. This increase of appellant’s indebtedness to the bank in excess of the statutory limitation all accrued within the period covered by the information. This unwarranted increase of defendant’s indebtedness to the Union State Bank clearly constituted a violation of the statute. People v. Hager, ante, 198.
Other questions presented by this appeal have been considered, but such of them as merit review are presented and decided in People v. Hager, supra. Judgment affirmed.
McDonald, C. J., and Clark, Potter, Sharpe, Pead, Wiest, and Btjtzel, JJ., concurred.
This section was repealed in 1931; see Act No. 328, Pub. Acts 1931, § 101, p. 641; § 567, p. 755. | [
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] |
Clark, J.
Plaintiff has appealed from a judgment of no cause of action, in a trial without a jury, in a suit brought to recover damages claimed to be due on a contract to erect 16 houses.
Plaintiff was a builder. Defendant owned lots. There was discussion looking to building houses. Before any contract or agreement was made, plaintiff started work on erecting 16 houses by excavating basements and installing sewers. When defendant became aovare of this, it ordered the unauthorized work stopped. Plaintiff was given a contract for eight houses. These were built and paid for. He was given a contract for two additional houses, which were built and paid for. It was agreed that upon sale of the houses work was to start on houses on remaining of the 16 lots. The houses were not sold. Plaintiff claims a contract covering the work done and not paid for. Defendant disputes this flatly. It is purely an issue of fact.
We are in accord with the finding and decision of the trial court. There was no express contract, and on the facts here none can be implied. Spence v. Sturgis Steel Go-Cart Co., 217 Mich. 147.
Affirmed.
McDonald, C. J., and Potter, Sharpe, North, Fead, Wiest, and Butzel, JJ., concurred. | [
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Potter, J.
This case having come on to be heard in the circuit court upon more than 70 petitions objecting to the allowance • of several claims as common claims instead of as preferred claims and to the disallowance of claims on guaranteed bonds, was not passed upon or decided by the trial court, but questions were certified to this court under Court Rule No. 78 (1931), as follows:
Question No. 1:
Facts.
The Metropolitan Trust Company was incorporated on April 22, 1925, under the Trust Company Act No. 108, Pub. Acts 1889, as set forth in 2 Comp. Laws 1915, §§ 8044-8077. Article 3, of the articles of association, of the trust company, reads as follows :
“The purpose of the incorporation is in and by its corporate name, to take, receive and hold and repay and reconvey and dispose of any effects and property, both real and personal, which may be granted,' committed, transferred, or conveyed to it with its consent, upon any terms, or upon any trust or trusts whatsoever, at any time or times, by any person or persons, including married women and minors, body or bodies corporate, or by any court, including the Federal courts in the State of Michigan, to administer, fulfill, and discharge the duties of such trust or trusts, for such remuneration as may be agreed on, to act as general agents or attorneys for the transaction of business, the management of estates, the collection of rents, interest, dividends, mortgages, bonds, bills, notes, and securities, for moneys; to act as agent for the purpose of issuing, negotiating, registering, transferring or countersigning the certificates of stock, bonds, or other obligations of any corporation, association, or mu nicipality, and to manage any sinking fund therefor on such terms as may be agreed upon, to accept and to execute the offices of executor, administrator, trustee, receiver, or assignee or guardian of any minor, incompetent person, lunatic, or any person subject to guardianship; to loan money upon real estate and collateral security, and execute and issue its notes and debentures, payable at a future date and to pledge its mortgages on real estate and other securities as security therefor; to take and receive from any individual or corporation on deposit for safekeeping and storage gold and silver plate, jewelry, money, stocks, securities and other valuable and personal property and to rent out the use of safes or other receptacles upon its premises upon such terms and for such compensation as may be agreed upon; to become sureties for administrators, guardians, or other trustees, or persons in cases where, by law or otherwise, one or more sureties are required; to guarantee or insure to grantees the validity of titles in real estate transfers, at a rate of compensation and upon such terms as may be agreed upon; to lease, purchase, hold and convey all such personal estate as may be necessary to carry on its business as well as such personal estate as it may deem necessary to acquire in the enforcement or settlement of any claims or demands arising out of its business transactions and to execute and issue in the transaction of its business all necessary receipts, certificates and contracts which shall be signed by such person or persons as may be designated by the by-laws of the corporation; to invest its capital stock in the manner provided by law; to lease, hold, purchase and convey real estate for the purposes and in the manner provided by section 10 of said act and to accept real and personal estate in trust, as in said section provided, and to do all other acts and things authorized by the said chapter, to be done by corporations organized under its pro visions, and all acts supplementary thereto or amendatory thereof. ’ ’
hlhe trust company loaned its general funds out to the public. Among the securities accepted under these loans were many mortgages upon real estate. Certain of these mortgages were sold by Metropolitan Trust Company, as an individual, to the Metropolitan Trust Company, as trustee, accepting in payment therefor from the said trustee certificates of participation in trust form issued by such trustee, and bearing the title “Metropolitan Trust Company guaranteed first mortgage six per cent, collateral bonds. ’ ’ The trust company then guaranteed the payment of and proceeded to sell these certificates of participation to the public. Four series of these guaranteed certificates, totaling $600,000 face value, were sold; series A, bearing six per cent, interest, being dated September 1, 1926, series B, bearing six per cent, interest, being dated May 1, 1927, series C, bearing five and one-half per cent, interest, being dated February 1,1928, and series D, bearing five per cent, interest, being dated May 1, 1928, copies of these certificates are attached hereto and marked Exhibits A, B, C, and D, for further reference. Such “guaranteed first mortgage collateral bonds” were outstanding upon date of suspension of the trust company in the amount of $410,300. No payment under the guaranties was to be made until within 18 months after the respective due dates. The 18 months have not yet expired.
Validation certificates were obtained from the Michigan securities commission permitting the sale of these bonds.
There were five additional series of bonds issued, which were not guaranteed by the trust company.
Metropolitan Trust Company suspended business June 18, 1931; on June 20, 1931, a temporary receiver was appointed, and on July 16, 1931, permanent receivers were appointed.
No default of any kind had occurred on any of the guaranteed issues aforesaid prior to the appointment of permanent receivers. After the appointment of permanent receivers, Highland Park Trust Company was appointed successor-trustee to Metropolitan Trust Company and -all of the mortgages securing said guaranteed participation issues were assigned to the successor-trustee, who has since administered the trust.
On August 4, 1931, an order was entered requiring claimants to prove their claims within four months from the date of said order and providing that no claims would be received after December 4, 1931. This time was subsequently further extended by a court order to January 4, 1932.
Holders of guaranteed bonds filed their proofs of claim for the full par value of their bonds. No default occurred on the -part of the trust company in turning over all funds collected on the mortgages, but defaults have since occurred in the payment of the interest on such bonds and, in some instances, in the payment of the principal.
During the time that the company acted as trustee for these bond issues, it loaned or advanced out of its general funds, or commingled general and trust funds, $5,800.25 to itself as trustee for u,se in retiring $5,137.50 in principal of bonds and paying $662.75 in interest due on coupons. The retired bonds have been canceled and are in the possession of the receivers.
Subsequent to the appointment of the receivers, and before the appointment of a successor-trustee, they collected some funds from the underlying security of the bonds and offset this amount against the indebtedness of the trustee to the company. The receivers’ right to such set-off has been contested. The successor-trustee has also contested the right of the receivers to recover from the successor-trustee the balance of this advance.
Questions of Law.
(a) Was the guaranty of Metropolitan Trust Company on such bonds ultra vires?
(b) If the foregoing question is answered in the affirmative, is the defense of ultra■ vires now available to the receivers as against the holders of the bonds upon which claims have been filed?
(c) If the foregoing questions are answered in the negative, can the holders of these bonds prove their claims as contingent claims in view of the fact that the 18-month period after default has not expired and the loss, if any, has not been yet determined?
(d) If question (c) is answered “yes,” must the receivers delay the payment of any and all dividends until such time as there can be a final closing of the receivership estate?
(e) Where the trust company paid to some of the holders of bonds and/or coupons under guaranteed bonds series “A,” “B,” “C,” and “D,” principal and interest without respect to collections from mortgages securing same, said payments being made from general corporate bank accounts of said trust company and not from any segregated trust fund, were such payments in partial satisfaction of the liability of the said trust company as guarantor?
(f) If the answer to question (e) is “yes,” would the trust company out of collections subsequently received by it as trustee from said mortgages constituting the corpus of such trust estates be entitled to repayment or set-off for moneys so advanced if such repayment or set-off preferred said trust company over holders of bonds and/or coupons who did not participate in the payments as made by the trust company?
(g) Would a successor-trustee be entitled to all collections made by the receivers of the trust company from mortgages constituting the corpus of trust estates after June 18, 1931, without deductions for payments made to holders of bonds by the trust company prior to its closing?
Question No. 2:
Facts.
In the conduct of its business, Metropolitan Trust Company was custodian of various funds which it held in trust as receiver, trustee, or agent. Said funds so held were commingled with other trust funds and with the general funds of the company.
On the day the company suspended business, it had cash on hand outside checks and cash items in the amount of $4,022.94.
In its general banking accounts, it had $47,059.39, of which $45,966.09 was on deposit with the National Bank of Commerce of Detroit. The trust company owed this depositary $86,700.58. Promptly upon the closing of the company, the depositary set-off the $45,966.09 against the company’s indebtedness. As a result, the total cash that came into the hands of the receivers totaled $5,116.24. All of the cash on deposit in these general banking accounts consisted of general frinds of the company commingled with trust funds.
In addition thereto, the company had a separate bank account for estate balances in the sum of $17,444.88, which was not commingled with other general funds of the company. This latter amount came into the hands of the receivers merely for distribution to the beneficiaries or successor fiduciaries when they were appointed.
The total of the trust funds commingled was greatly in excess of the total amount of all deposits in banks, plus cash on hand, and it has been impossible to trace such trust funds so commingled.
The receivers disallowed all claims for preference made by such trust-fund claimants and allowed all such claims as common claims.
Questions of Law.
(a) Where trust funds have been commingled with other trust funds and with other general funds of the trust company, and where said trust funds cannot be traced into any specific tangible assets, and where the cash on hand and in banks on the date of suspension of business by the trust company is greater in amount than certain single trust funds so commingled but less in amount than other single trust funds or than the total of trust funds so commingled, can any or all of said trust funds be legally construed to be entitled to a preference over common claims?
(b) If the answer to question (a) is “yes,” do such preferred trust claimants share pro rata in the cash on hand and in banks at the time of suspension?
(c) If the answer to question (b) is “yes,” should the “cash on hand and in banks” be construed to include that amount set-off by the depositary against the company’s debt to it?
(d) Did the depositary bank have the right to set-off against the indebtedness of the company to it funds on deposit consisting of commingled trust funds.and general funds?
(e) If the answer to question (a) is “yes,” then did the payment of interest by the trust company upon funds in certain trust accounts establish the character of claims to such funds as general claims, there having been no agreement made to the contrary?
The Metropolitan Trust Company was a Michigan corporation. It signed a guaranty contained in the bonds involved, designated as series A, B, and C, as follows:
“And said trust company-hereby guarantees the payment of the principal of this bond as and when collected from the respective mortgagors, but in any event within 18 months after demand by the holder made to the trust company on or subsequent to the due date of the principal of such bond, and the interest accruing thereon semi-annually from the date hereof, in lawful money of the United States of America of or equal to the present standard of weight and fineness, as set forth in this bond and the coupons annexed hereto.”
The language of the guaranty used in bonds, series D, is:
“Said Metropolitan Trust Company hereby unconditionally guarantees the payment of the principal of this bond as and when collected from the respective mortgagors, but in any event within 18 months' after demand by the holder made to the trust company on or subsequent to the due date of the principal of such bond, and the interest accruing thereon semi-annually from May 1, 1928, in lawful money of the United States of America of or equal to the present standard of weight and fineness.”
Like other corporations, this trust company is a creature of law. It may lawfully exercise no power and authority except that given to it by law. There is nothing in either the charter of the corporation or the statute of its organization which gives it any express power or authority to guarantee the payment of notes, bonds, or other obligations. Its implied powers are limited to those necessary to enable it to exercise the powers delegated to it by its charter and the statute providing for its creation. 2 Fletcher, Cyclopedia of Corporations, p. 1814. It occupies a fiduciary relation to the beneficiaries of the several trusts lawfully reposed in it who are entitled to its protection. 2 Fletcher, Cyclopedia of Corporations, p. 1814. It has no right to speculate with the trust funds intrusted to its care.
This trust company, under the statutes of this State, had no right to imperil the trust funds sub mitted to its care by becoming surety (7 C. J. p. 808); and no right to guarantee the payment of the bonds of others. Federal Land Bank of St. Paul v. Crookston Trust Co., 180 Minn. 319 (230 N. W. 797); In re Bankers’ Trust Co., 27 Fed. (2d) 912; Ward v. Joslin, 186 U. S. 142 (22 Sup. Ct. 807); 2 Fletcher, Cyclopedia of Corporations (Perm. Ed.), § 721.
It is claimed that if guaranteeing these bonds was ultra vires, the trust company, having obtained the money from their sale, is estopped from questioning the validity of its guaranty; that it cannot profit by its own wrong, and before repudiating such obligations it must put the bondholders in statu quo. It is claimed the receiver stands in the place of the trust company and is bound by these rules. If the receiver should satisfy the trust companies’ alleged liability on the guaranties from its assets, there would be nothing left to satisfy its general creditors or its obligations to the beneficiaries of the trusts lawfully reposed in it. If the receiver pays the illegal obligations of the trust company, it cannot pay its legal obligations. Obligations arising from its illegal acts should not be preferred to those arising from its legal acts.
The trust company, not having authority to guarantee the payment of these bonds, such guaranty is not enforceable agninst the receiver of the trust company. Those dealing with the trust company are presumed to have had notice of its lack of powers to guarantee the payment of the bonds (Farmers & Mechanics’ Bank v. Troy City Bank, 1 Doug. 457; Knickerbocker v. Wilcox, 83 Mich. 200 [21 Am. St. Rep. 595]); and consequently no estoppel arises against the receiver, upon such colorable contracts of guaranty.
" It would be anomalous if the trust company, by violating the law, guaranteeing the payment of bonds, engaging in hazardous speculation, with or without compensation, contrary to its charter, in violation of public policy, when such bonds were purchased by those charged with notice of the trust company’s lack of power, could as against the creditors and beneficiaries of the lawful trusts reposed in and accepted by it, divert its funds from lawful corporate purposes to those unlawful and opposed to public policy.
‘ ‘ The doctrine of ultra vires, by which a contract made by a corporation beyond the scope of its corporate powers is unlawful and void, and will not support an action, rests, as this court has often recognized and affirmed, upon three distinct grounds: the obligation of any one contracting with a corporation, to take notice of the legal limits of its powers; the interest of the stockholders, not to be subject to risks which they have never undertaken; and, above all, the interest of the public, that the corporation shall not transcend the powers conferred upon it by law.” McCormick v. Market Bank, 165 U. S. 538 (17 Sup. Ct. 433).
A trust company may not lawfully by indirection do what it is forbidden to do by its charter and the law of its creation.
In Bowers v. Lawyers Mortgage Co., 285 U. S. 183 (52 Sup. Ct. 350), the business of the mortgage company was carried on as follows:
“Upon receiving an application for a loan it caused an appraisal' of the proposed real estate security to be made and procured a title insurance company to survey the property, make a report as to title and insure the same. The borrower, having executed and delivered a bond and mortgage to respondent, received from it the amount specified therein less charges for title insurance, survey, disbursements and recording tax and less a lending fee which, included the charge for appraisal. Respondent sold the mortgage loans. On the sale of a bond and mortgage as a whole, it delivered an assignable contract called ‘policy of mortgage guarantee’ to the purchaser. On the sale of part of a loan, it issued a participation certificate assignable by indorsement and registration on respondent’s books and containing substantially the same provisions as the policy. By every such policy or certificate the purchaser appointed respondent his agent to collect the principal and interest, and the latter agreed to keep the title guaranteed and the premises insured against fire and to require the owner to pay taxes, assessments, water rates and fire insurance premiums. Respondent guaranteed payment of principal, as and when collected but in any event within 18 months following written demand made after maturity, and payment of interest regularly at an agreed rate usually one-half of one per cent, less than that specified in the bond. Respondent kept the difference and called it ‘premium.’ Respondent also retained the interest accruing between the making of the loans and the sale of the securities. For renewals of loans it charged extension fees.”
And the court held,
“the guaranties contained in the policies and participation certificates were in legal effect contracts of insurance.”
In United States v. Home Title Ins. Co., 285 U. S. 191 (52 Sup. Ct. 319), where a similar case was before the court, it was said:
“The guaranty of payment of the principal and interest of mortgage loans constitutes insurance.”
A trust company, under the laws of this State, differs from an insurance company. Each is a creature of statute. One is under the supervision of the banking department, the other under the supervision of the insurance department. We are unable to find the Metropolitan Trust Company had any power or authority, under the law of its creation, to guarantee the payment of bonds and mortgages delivered to the trust company, or any power or authority to guarantee the payment of participation certificates which were substantially similar to those issued by the Lawyers Mortgage Company involved in Bowers v. Lawyers Mortgage Co., supra; and United States v. Home Title Ins. Co., supra.
The receiver of the trust company represents all those legally interested in its assets as creditors. It is the duty of the receiver to administer the estate of such defunct trust company according to law, to protect its legal trusts from claimed liability upon illegal contracts.
Certified questions must be distinctly propounded (Clark v. Dorr, 5 Mich. 143); be strictly questions of law (People v. Adwards, 5 Mich. 22, 24; Bagg v. City of Detroit, 5 Mich. 66); not questions which involve or imply conclusions or judgment by the judges upon the weight or effect of testimony or facts adduced in the case. Bagg v. City of Detroit, supra. If the whole case, broken into parts, appears to have been certified, it will be dismissed. Bagg v. City of Detroit, supra. Questions may not be certified unless the judge below has well-founded doubts upon them, save when they are new or of public importance. Bagg v. City of Detroit, supra. Questions so broad and indefinite as to admit of different answers depending on the facts will not be considered. Bell v. Wickham, 255 Mich. 501. The rule does not contemplate this court shall be substituted as a trial court for the circuit court. Bell v. Wickham, supra; English v. Fairchild, 5 Mich. 141; Clark v. Dorr, supra. The answers given to certified questions “shall be given in the ordinary form of opinions.” Court Rule No. 78, § 3 (1931).
We are of opinion the guaranties in question were ultra vires, which, defense is available to the receiver of the trust company, and no claimed liability based upon such guaranty may be recognized by or enforced against the receiver, under the facts here involved, either absolute or contingent. The trust company had a right to act as trustee in trust mortgages to secure bond issues, to receive money paid by mortgagors and disburse it to bondholders. It had no right to pay other funds to bondholders, not arising from payments on the mortgages, by reason of its guaranty, to the prejudice of other creditors. No preferences among bondholders secured by any mortgage may obtain. All bondholders are secured ratably without preference. A successor-trustee of bonds stands in the same position as the original trustee, and is entitled to collect and enforce the mortgages.
Trust funds not traceable, not capable of identification, mingled with general assets, lose their identity as such and become general claims. A depositary bank, having no knowledge of the character of funds deposited with it, may set off the credit of the depositing customer against its debt due from it to the depositary bank.
McDonald, C. J., concurred in the result. | [
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] |
North, J.
Plaintiff, a school teacher, brought suit in assumpsit against the defendant district for breach of contract. She had judgment, and defendant has appealed.
Plaintiff was in defendant’s employ as a school teacher during the year 1930-1931. Incident to employing teachers for the school year of 1931-1932, defendant’s superintendent submitted a list of teachers, including plaintiff, whom he recommended, which recommendation was approved by resolution of the school board in February, 1931. On the 10th of April the superintendent delivered to plaintiff for her signature duplicates of a proposed contract. They had not been executed by any member of the school board. Plaintiff retained the duplicates until May 15, 1931, on which date she returned them to the superintendent properly executed by herself. The proposed contract was for plaintiff’s services for 10 months beginning September 1, 1931, at $160 per month. Nothing further was done relative to the consummation of this contract; and under date of July 25, 1931, the school superintendent by letter advised plaintiff that her contract had not been signed by the school board. The letter in part reads:
“Dear Miss Mullen:
‘ ‘ Am sorry that you did not obtain final information as to your contract before leaving in June. In talking your attitude over with members of the school board, they have a pretty definite opinion that you should not return. Your contracts have not been signed by the board.”
It is plaintiff’s claim that after receipt of the above notice she offered to carry out her contract of employment, but the school board refused to permit her to do so. A contract had been entered into for the services of another teacher in the place of plaintiff.
Notwithstanding plaintiff claims estoppel on the ground that the conduct of the school board prevented her from securing employment elsewhere, we think the outcome of this case is conclusively controlled by the statute. In part it reads:
“Sec. 26. The board of education shall have the ■ following powers and duties: * * *
“ (q) To hire and contract with such legally qualified teachers as may be required, and all contracts shall be in writing and signed by a majority of the board in behalf of the district. ” 2 Comp. Laws 1929, § 7156.
A.s noted above, the alleged contract for the breach of which this action is brought was not executed by any member of the school board. The statutory provision is clear and controlling in the instant case. Because of this provision it must be held that plaintiff did not at any time have a contract with the defendant for the year 1931-1932.
Plaintiff seeks to recover upon the ground of estoppel, and in that connection relies upon McLaughlin v. Board of Education, 255 Mich. 667. The distinction between the instant case and the cited case is clear. In the latter the plaintiff had a contract signed by three members of the school board, and he entered upon the discharge of his duties and performed services under the contract. In the instant case the contractual relation between the parties was never consummated, and no claim is made that any services were rendered thereunder. Further, it was held in the McLaughlin Case, supra, that the above-quoted section of the statute does not apply to a contract fon the services of a superintendent, but “applies only to teachers’ contracts.”
Under the facts here presented, plaintiff’s claim of a right of recovery on the ground of estoppel cannot be sustained. Decision is controlled by Langston v. School District, 121 Mich. 654; Hutchins v. School District, 128 Mich. 177.
The judgment for plaintiff entered in the circuit, where there was trial before the court without a jury, will be vacated, and judgment entered for defendant. Costs to appellant.
McDonald, C. J., and Clark, Potter, Sharpe, Fead, Wiest, and Butzel, JJ., concurred. | [
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] |
Wiest, J.
Before pleading to a declaration, charging seduction and rape of a 14-year old girl, attorneys for defendant desired information as to the time, place, and circumstances of the alleged seduction and carnal knowledge, and to that end gave notice of taking the deposition of the girl under Court Rule No. 41 (1931). Counsel for plaintiff moved the circuit court to vacate the notice. The court denied the motion, and by this appeal plaintiff seeks our writ of mandamus directing the circuit court to vacate the notice.
Court Rule No. 41 (1931), so far as necessary to quote, provides:
“Any party to an action or suit may cause to be taken by deposition # * * at any time after action commenced and before trial, the testimony of any other party, or any person who has verified a pleading of another party, which is material and necessary in the prosecution or defense of the action or suit.”
Counsel for plaintiff insist that the information sought is not necessary in order for defendant to plead. The rule is an extension of the old practice of discovery. The party invoking the rule must definitely state the subject or subjects of intended inquiry and thus show the materiality and nature thereof, and may not, at the examination, go beyond such specifications.
Right to take the deposition can be tested by motion to vacate the notice. The issue then is whether the reasons for the notice and the information sought disclose a tona fide need in framing an issue or preparing for trial. The examination, must not be for the purpose of enabling one party to merely pry into the case of the other to learn its strength or weakness, but only to seek information essential to the framing of appropriate issues and preparation for trial thereof.
The date of the alleged carnal intercourse is averred to have been on one of three mentioned Saturdays. While right to maintain the action does not depend upon a particular date, so long as not barred by the statute of limitations (3 .Comp. Laws 1929, § 13976), yetif the exact date is known to a certainty it should,’ in fairness, be disclosed.
The place is averred in the declaration but we cannot say that this bars examination under the rule. A disclosure of the circumstances of an alleged seduction will, of course, bear a direct relation to the issues at the trial.
We must assume that the right accorded by the rule is invoked in good faith, and we cannot anticipate an abuse nor hold that possibility of abuse warrants inhibition of the right.
The writ is denied, with costs.
McDonald, C. J., and Clark, Potter, Sharpe, North, Fead, and Btjtzel, JJ., concurred. | [
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Wiest, J.
A five-year lease of certain premises, executed by defendant as lessor and plaintiff Davis and his then copartner Herman J. Teal, as lessees, contained the following agreement:
“To insure the faithful performance of the covenants herein contained, parties of the second part herewith deliver to the party of the first part the sum of $1,250, it being understood that in the event of any loss or damage arising out of the failure on the part of the parties of the second part to perform said covenants herein contained, said sum of $1,250 shall be retained by the party of the first part as damages, but it is expressly understood and agreed that acceptance of the above-named sum of $1,250 does not constitute a waiver by the party of the first part of its right to collect additional damages when such damages arising out of said failure or default on the part of the parties of the second part shall be in excess of the above-named sum of $1,250. In the event of the faithful performance of the covenants herein contained by said parties of the second part, said sum of $1,250 shall be applied as pa3nnent for the rent due for the last four and one-sixth months of the term of this lease.”
Mr. Teal assigned his interest in the lease to Mr. Davis, and Mr. Davis, as lessee, made default in payment of the rent for one month, and the lessor gave notice to quit or pay the rent. This was in accord with right reserved to the lessor in the lease. The rent not having been paid, the lessor brought a summary proceeding, was awarded restitution of the premises together with a finding of $600 rent due. Mr. Davis then brought this suit to recover the mentioned deposit, less the rent found due in the summary proceeding. Defendant contends that the right to damages survived forfeiture of the lease by notice and judgment for restitution of the premises. The trial judge awarded plaintiff a judgment for the sum in defendant’s hands over and above the rent found due in the summary proceeding. The restitution awarded in the summary proceeding ended the tenancy of plaintiff, but did not preclude recovering damages subsequent to such lawful eviction.
In Central Trust Co. v. Wolf, 255 Mich. 8 (78 A. L. R. 843), we said:
“Generally, re-entry by the lessor and surrender by the lessee in obedience to writ of restitution precludes recovering damages subsequent to eviction. But the parties may contract that the provision of the lease for damages upon termination of the lease. because of default of the lessee shall survive the restitution of the premises.”
"We there cited Barrett v. Monro, 69 Wash. 229 (124 Pac. 369, 40 L. R. A. [N. S.] 763), a case on all fours with the one at bar. There the lease was for a five-year term with rent payable monthly in advance. The lessee deposited with the lessors the sum of $1,200, relative to which the lease contained the following material stipulations:
“Party of the second part hereby agrees at the time of the execution of this lease to pay to the parties of the first part the sum of $1,200, which sum shall be held by the parties of the first part to indemnify them against any loss or damage which they may sustain by reason of any violation on the part of the party of the second part of the terms, covenants, and agreements contained in this lease as liquidated damages.
“If said party of the second part faithfully performs and complies with all the conditions, stipulations and agreements contained in this lease on his part to be performed, then the parties of the first part agree to apply said $1,200 in payment of the monthly rental dne for the last two months of the part of this lease.”
Notice to pay the rent or surrender the premises was given. The default of the lessee continued. An action of unlawful detainer was brought and a writ of restitution obtained. Then the lessee brought suit to recover the $1,200. We quote from the opinion:
, “Defendants as lessors asserted their right to retain the $1,200 in satisfaction of their liquidated damages, as agreed in the lease, while plaintiff insisted that the deposit was made as security for payment of rent only, and not to satisfy liquidated damages. * * *
“Bespondent (lessee) contends that the deposit was to secure payment of the monthly instalments of rent as they matured; that appellants (lessors) themselves terminated the lease; that thereafter they were entitled to no rent; that they resumed possession; that they succeeded to the occupancy and use of the property; and that they cannot retain possession and appropriate the $1,200 as liquidated damages. * * *
“It was respondent’s duty to make the stipulated monthly payments. Her failure constituted an unquestioned breach of the contract which, subjected her to a termination of the lease and payment of the stipulated liquidated damages. When her breach occurred", appellants were entitled to give the statutory notice to terminate the tenancy in the event of her continued default, and thereafter retain the deposit in satisfaction of their liquidated damages. They were not required to permit a continuance of the default, and thus increase their damages to such an extent that the liquidated sum would be insufficient to protect them. The contract has no such purpose in view. It is manifest that the parties agreed upon liquidated damages because their exact measurement could not be readily made. The sum agreed upon is not unreasonable, in view of the value and importance of the entire lease. The term had more than three years to run when respondent’s default occurred. At the date of the lease and also at the date of respondent’s breach, it was impossible to determine the exact damages appellants might thereafter sustain in loss of rentals, or by reason of their inability to secure another tenant for a portion of the term at as remunerative a rental. Realizing this difficulty of making an exact measurement of such damages, should a breach occjir, and appreciating the fact that appellants might incur expense in recovering possession, in securing new tenants, in the possible necessity of making expensive changes or improvements as a condition precedent to obtaining a new tenant, and also in the possible depreciation of rental value, the parties agreed upon $1,200 as liquidated damages. * * *
“The fallacy of respondent’s argument lies in her assumption that the $1,200 was advanced as security only. She ignores the probable contingency that a loss of the tenancy might cause damage to appellants difficult of ascertainment, whether termination of the tenancy resulted from a wrongful and voluntary surrender by respondent or from respondent’s default in payment of rent, coupled with appellants’ election to then terminate the lease. By exercising their election to terminate the lease, appellants did not waive their right to retain the liquidated damages. The default which caused such termination originated with respondent. * * * Unquestionably it (the lease) would not have been made without the deposit of $1,200 coupled with the stipulation that it should be applied as liquidated damages in the event of the lessee’s breach. Appellants were entitled to retain the $1,200 in satisfaction of their liquidated damages. ’ ’
In the case at bar, the lessees operated an automobile sales establishment on premises adjoining the leased premises. Upon the leased premises were buildings and the lessor contemplated remodeling so as to have two stores on the ground floor and apartments above and had obtained money for financing such plan. The lessees desired the premises for parking automobiles and this necessitated removal of the buildings and leveling the land. This accounts for the deposit of $1,250. When, by default of the lessee Davis, the lessor had to retake possession, the premises were unfitted for rental except for the purposes for which they had been prepared, and, inasmuch as the lessee was conducting an automobile sales business on the adjoining property, there was small likelihood of rental by other parties, unless and until the premises were improved and made suitable for some other purpose. This damage occasioned by the breach of the lessee was not waived nor right to retention of the stipulated damages precluded by the summary proceeding.
The judgment is reversed, with costs, and without a new trial.
McDonald, C. J., and Clark, Potter, Sharpe, North, Pead, and Butzel, JJ., concurred. | [
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Potter, J.
October 21, 1931, plaintiffs filed a bill to rescind, on the ground of fraud, an exchange of real estate, and for other relief. Defendants deny the fraud charged. From a decree for plaintiffs, defendants appeal. Plaintiffs, prior to the exchange of the property involved, lived in Chicago where plaintiff Frank Szarkowski was a bricklayer. They owned a house and lot in Chicago subject to a mortgage of $2,000. This they exchanged for 60 acres of land in Allegan county, subject to a mortgage to the Federal Land Bank of $2,300, giving* to defendants a second mortgage of $1,200, to boot. Plaintiffs de sired to sell their Chicago property. Eventually a real estate broker got in touch with them and with defendants, and negotiations for an exchange of their properties commenced. There is ample evidence to show defendants, and the broker acting for them, represented the fair market value of the farm in Allegan county to be $18,000; was good, productive soil, and defendants were doing a summer resort business which would be profitable; the grapes on the farm were a source of substantial income, and such farm was operated, and could be operated by plaintiffs, at a profit. A list of resorters was given by defendants to plaintiffs. It is claimed, and there is proof to show, the farm was worth between $3,500 and $4,000. The soil was mostly light sand, which, one witness testified, was alone worth but $5 an acre. The grapes and apples on the farm brought but $100. After plaintiffs took possession, they found the farm was leased to croppers who claimed and took their share of the products of the farm. Crops were poor and the resort business a magnified tale of prospective profits based upon nebulous hopes. Plaintiffs saw the farm before the trade was made, and it is claimed the representations made by defendants of its value were matters of opinion and cannot be made the basiá of an action of fraud.
In Pinch v. Hotaling, 142 Mich. 521, 525, it is said:
“The contention made is that the statement of value was a mere matter of opinion, and cannot be made the basis of an action for fraud. This is a statement of the general rule, but the rule established by the weight of authority is that false statements of value intentionally made to one who is in ignorance of the quality and value, under circumstances indicating a purpose that such statements are to be relied upon., and where the party to whom they are made has no opportunity to examine the property, may be treated as an affirmation of fact and fraudulent. See 14 Am. & Eng. Enc. Law (2d Ed.), p. 125; Simar v. Canaday, 53 N. Y. 298 (13 Am. Rep. 523); Cressler v. Rees, 27 Neb. 515 (43 N. W. 363, 20 Am. St. Rep. 691); Hedin v. Minneapolis Medical & Surgical Institute, 62 Minn. 146 (64 N. W. 158, 35 L. R. A. 417, 427 note, 54 Am. St. Rep. 628); Collins v. Jackson, 54 Mich. 186; Maxted v. Fowler, 94 Mich. 106, 109; 16 Cyc. p. 749.”
Plaintiffs, who were Polish immigrants, without knowledge of the value of land in Allegan county, with no experience in farming, prone to rely upon statements made to them, stand on a different footing than they would if, from knowledge of farming in Allegan county and experience therewith, they had traded for land therein. Then their knowledge of the value of the land visited might estop them from claiming’ fraud; but plaintiffs were city dwellers, with no knowledge óf the value of farms in Allegan county, no experience in farming there or elsewhere, with little knowledge of the American' language, and the statements made to them by defendants were made with knowledge of plaintiffs’ ignorance, for the purpose of being relied upon and with such expectation and such statements of value, though in the form of opinion, relied upon by plaintiffs to whom they were made, constitute actionable fraud. Gothe v. Kakis, 257 Mich. 364.
There was- testimony of statements by defendants which they insist were promissory in character and cannot be made the basis of fraud. "Where a fraud is committed partly by false promises and partly by false representations of fact, representations, though promissory in character, which are not made in good faith, bnt as a part of a scheme to defraud, are nevertheless fraudulent. Becker v. Illinois Life Ins. Co., 227 Mich. 388; City Investment Co. v. Zimni, 255 Mich. 388; Conger v. Thomas & Lane, 258 Mich. 702; Van Dellen v. Van Dellen, 259 Mich. 275.
When plaintiffs discovered they had been defrauded, they tendered a deed of the premises to defendants. They were compelled to live upon the farm. They had no other place to live, and while living there 48 cords of wood were cut for them on shares by a third party from dead timber in the wood lot upon the premises. Defendants insist that this precludes their right to rescind.
Ordinarily, one who seeks to rescind a contract must put the opposite party in statu quo; but in cases where, acting in good faith, property has been so changed or lost that it cannot be restored in specie, and where its value is capable of being ascertained, a party entitled to may rescind a contract, although he cannot place the other party in statu quo. Wright v. Dickinson, 67 Mich. 580 (11 Am. St. Rep. 602); Munzer v. Stern, 105 Mich. 523 (29 L. R. A. 859, 55 Am. St. Rep. 468); Zadel v. Simon, 221 Mich. 180.
We find no error in the decree of the trial court, which is affirmed, with costs.
McDonald, C. J., and Clark, Sharpe, North, Dead, Wiest, and Butkel, JJ., concurred. | [
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] |
Per Curiam;.
Plaintiffs appeal as of right from an involuntary dismissal pursuant to GCR 1963, 504.2 of their discrimination action brought under the Elliott-Larsen Civil Rights Act, MCL 37.2101 et seq.; MSA 3.548(101) et seq. Defendant cross-appeals as of right.
Plaintiffs are black and former students at the University of Detroit Law School. The U of D refused to permit plaintiffs to register for classes beginning the 1983 fall term because plaintiffs’ grade-point averages fell below 2.0, out of a maximum 4.0 average. On August 23, 1983, plaintiffs filed this class action asking the circuit court to enjoin the U of D from preventing their registration and seeking declaratory relief and money damages. Plaintiffs alleged that they were the victims of ingrained, systematic, and studied racism. Plaintiffs also alleged that, even if the U of D had not intended to discriminate, the effect of the U of D’s grading practices and administrative rules disparately affected members of their class. Plaintiffs alleged that this racial discrimination, whether deliberate or not, violated § 402(1) of the Elliott-Larsen Civil Rights Act, MCL 37.2402(1); MSA 3.548(402)(1), which provides:
"An educational institution shall not:
"(a) Discriminate against an individual in the full utilization of or benefit from the institution, or the services, activities, or programs provided by the institution because of religion, race, color, national origin, or sex.
"(b) Exclude, expel, limit, or otherwise discriminate against an individual seeking admission as a student or an individual enrolled as a student in the terms, conditions, or privileges of the institution, because of religion, race, color, national origin, or sex.”
On August 25, 1983, the trial court issued a preliminary injunction, compelling the U of D to register plaintiffs as students even though plaintiffs had failed to meet the law school’s minimum academic requirements. On September 2, 1983, the trial court entered an amended pretrial schedule order which provided an October 24, 1983, trial date for plaintiffs equitable claims. On September 23, 1983, the trial court certified plaintiffs’ class. GCR 1963, 208. On that same date, plaintiffs filed a demand for a jury trial. On October 7, 1983, plaintiffs moved for an accelerated trial, and on October 21, 1983, the trial court granted the motion and ordered the trial on the equitable claims to begin December 5, 1983, and a trial on the legal issues to proceed pursuant to the general and local court rules.
On November 4, 1983, the trial court entered "conclusions of law” on plaintiffs’ motion for a jury determination of the U of D’s liability under the Elliott-Larsen Civil Rights Act. The trial court said:
"[I]t is the nature of the relief sought which determines the right to jury trial in a civil right case, not the fact that such a claim is historically a tort. Therefore, this Court rules that the Circuit Court has a duty to hear and decide factual issues without a jury on all complaints for equitable relief, and that such is the case in claims under the Elliott-Larsen Act.
"It only remains, then, to determine the precise nature of the Plaintiffs’ Complaint, in order to apply the Michigan practice to this civil right case.
"It is textbook law under the English system of Jurisprudence that the determination of whether the nature of the jurisdiction of the court is equitable or legal is made by examination of the nature of the relief sought. Where, as in this case, the Complaint filed seeks 'preliminary injunction’ and 'injunctive and declaratory relief as shall be proved appropriate’, the jurisdiction of equity is unquestionable.
"Plaintiffs urge that their Complaint in this cause seeks equitable relief only temporarily during the pendancy of this action, and that it makes no request for permanent equitable relief. However, the Complaint itself speaks differently, and is the controlling factor here. The Complaint in this cause, in fact, does seek relief both equitable in nature and legal in nature. The prayer for relief seeks, and the court has issued '(a) an immediate Preliminary Injunction pursuant to the provisions of GCR 718 * * *’. That relief was granted in equity. It further seeks, in paragraph (b), 'such injunctive and declaratory relief as shall be proved appropriate’. That, too, is equitable relief. It also asks, in paragraph (c) and (d) 'for such damages as shall be appropriate’, and 'attorney fees * * * under MCL 27.2802’ [sic]. The two latter are legal relief, that is, money damages.
"The fact that additional relief in the way of money damages and attorney fees is also sought in no way diminishes the equitable jurisdiction of the court to hear and determine the prayer for equitable relief under paragraphs (a) and (b) without a jury. In order to hear and determine those claims for equitable relief, the court must ñrst make ñndings of fact concerning the alleged violation by the Defendant of the Elliott-Larsen Act. Those laws claims simply place before the court the requirement to determine in the trial of the claims for equitable relief, certain issues of fact that are common to the trial of the law claims. The non-jury determination by the Court of those issues of fact which are common to the equity claims and to the law claims does not foreclose to Plaintiffs the subsequent trial by jury, in accord with Plaintiffs’ Jury Demand previously hied pursuant to GCR 508, of the balance of the issues of fact that go to the proof of Plaintiffs’ law claims for money damages. Pursuant to Plaintiffs’ demand properly filed under the court rules, the law claim is now set for jury trial under the procedures and time schedules established therein.
"The motion of the Plaintiffs for jury trial determination of liability under Elliott-Larsen Act is denied.” (Emphasis added.)
A four-week trial on the equitable claims began on December 5, 1983. After plaintiffs presented proofs and rested, defendant moved for an involuntary dismissal pursuant to GCR 1963, 504.2. The trial court granted that motion and dissolved the preliminary injunction on December 29, 1983. The trial court entered its findings of facts, conclusions of law, and judgment on the same date.
On January 3, 1984, plaintiffs filed a brief on appeal raising three issues. However, on January 12, 1984, plaintiffs filed a motion for an order of the trial court to provide for the filing of less than the full transcript of testimony and hearings on appeal. The trial court stated at the hearing on the motion that the entire transcript would have to be reviewed in order to resolve the second and third issues plaintiffs raised in their appellate brief. Plaintiffs said that they were not challenging the "chancellor’s” findings, but only wished to appeal the question of their right to a jury trial. Therefore, the trial court entered an order which allowed plaintiffs to file a partial transcription of proceedings, conditioned upon plaintiffs’ acceptance of its findings of fact.
The trial court found that the plaintiffs had not established that the U of D intentionally or deliberately discriminated against them. However, the trial court did find that the U of D’s action did have a disparate effect on the members of plaintiffs’ class. But the trial court also found that the evidence failed to show that any of the U of D’s actions were taken because of the race of the plaintiffs. The trial court found that the U of D’s actions were based upon academic factors and for academic reasons.
Plaintiffs’ sole argument on appeal is that the trial court erred by entering an involuntary dismissal pursuant to GCR 1963, 504.2 of their legal claims under the Elliott-Larsen Civil Rights Act at the conclusion of a hearing on only the equitable claims when plaintiffs also sought a jury’s determi nation of liability for money damages. We agree and reverse.
Article 8 of the Elliott-Larsen Civil Rights Act provides for direct court actions for equitable relief and for damages. MCL 37.2801; MSA 3.548(801) and MCL 37.2803; MSA 3.548(803). However, the Elliott-Larsen Civil Rights Act does not expressly provide the right to a jury. The U of D argues that without such express legislation, plaintiffs are not entitled to a jury trial because Michigan Courts did not recognize a discrimination action against a private educational institution before Michigan adopted its constitution in 1963.
Const 1963, art 1, § 14 preserves the right to a jury trial for causes of action which were part of the common law prior to its adoption. Friedman v Dozorc, 412 Mich 1, 60, fn 6; 312 NW2d 585 (1981), citing Conservation Dep’t v Brown, 335 Mich 343, 346; 55 NW2d 859 (1952). In Brown, the Court said:
"Michigan Constitution 1908, art 2, § 13, provides, as did Michigan’s previous Constitutions, that The right of trial by jury shall remain.’ Thus the right to trial by jury is preserved in all cases where it existed prior to adoption of the Constitution. Tabor v Cook, 15 Mich 322 [(1867)]; Swart v Kimball, 43 Mich 443 [5 NW 635 (1880)]. The constitutional guaranty applies to cases arising under statutes enacted subsequent to adoption of the Constitution, which are similar in character to cases in which the right to jury trial existed before the Constitution was adopted. Guardian Depositors Corp v Darmstaetter, 290 Mich 445 [288 NW 59 (1939)]. The right to trial by jury, in cases where it existed prior to adoption of the Constitution, may not be defeated by enactment of a statute providing for trial on the chancery side of issues formerly triable in proceedings at law. Tabor v Cook, supra; Edwards v Symons, 65 Mich 348 [32 NW 796 (1887)]; Kamman v City of Detroit, 252 Mich 498 [233 NW 393 (1930)]. Where there are ques tions of fact to be determined and the issues are such that at common law a right to jury trial existed, that right cannot be destroyed by statutory change of the form of action or creation of summary proceedings to dispose of such issues without jury, in the absence of conduct amounting to waiver. See Risser v Hoyt, 53 Mich 185 [18 NW 611 (1884)].
"The precise question presented, then, is whether the proceedings here are of such character that a jury trial would have been available before adoption of the Constitution.” 335 Mich 346-347.
Thus, the question is not whether Michigan courts recognized a discrimination action prior to the adoption of the 1963 constitution. Rather, the question we must ask in this case, or any other case brought under the Elliott-Larsen Civil Rights Act, is whether the cause of action asserted is similar in character to a cause of action for which the right to a jury trial existed before the 1963 constitution was adopted. We hold, as this Court in King v General Motor Corp, 136 Mich App 301, 308-309; 356 NW2d 626 (1984), held, that a jury trial on any legal claim is a litigant’s right under the act.
In Ferguson v Gies, 82 Mich 358; 46 NW 718 (1890), the Court held that there was a common-law action for damages against a private proprietor of public accommodations, in that case a restaurant. The Ferguson Court noted that a penal act existed prohibiting discriminating acts in places of public accommodation. The Court did not limit a litigant’s right to a civil or individual enforcement of that statute. Instead, the Court discussed the right each individual has under the common law to enforce individual civil rights. In St John v General Motors Corp, 308 Mich 333, 336; 13 NW2d 840 (1944), the Court recognized a common-law action for wage discrimination based upon, sex, a civil action enforcing a then-existing penal statute prohibiting sex-based discrimination:
"If plaintiff has suffered financial damage by reason of defendant’s noncompliance with the mandatory provisions of the statute applicable to claimants’ employment then civil action may be maintained. Bolden v Grand Rapids Operating Corp., 239 Mich 318 (53 A.L.R. 183). The statute establishes specified personal civil rights and if there has been discrimination between sexes in the instances at bar the remedy by action at law is available to claimants.”
See, also, Pompey v General Motors Corp, 385 Mich 537, 553; 189 NW2d 243 (1971).
The acts prohibited by the statutes addressed in Ferguson and St John are now prohibited by the Elliott-Larsen Civil Rights Act. In addition, Elliott-Larsen prohibits discriminatory acts perpetrated by educational institutions such as the U of D. This additional prohibition does not lessen the fact that cases brought under Elliott-Larsen are similar in character to the actions brought in Ferguson and St John. Thus, common-law actions for damages for similar discriminatory acts were recognized prior to the adoption of the 1963 constitution. Therefore, plaintiffs did indeed have the right to have a jury determine their action for damages in this case.
The U of D next argues that, even if plaintiffs were entitled to a jury determination of their legal claims under Elliott-Larsen, plaintiffs are bound by the lower court’s findings and conclusions. The U of D argues that the lower court had the authority under GCR 1963, 508.3, to set the sequence of issues tried. Thus, argues the U of D, if the trial court decides to hear the equitable claims first and finds facts, a subsequent jury hearing legal claims is bound by those facts and is limited to determin ing the amount of damages if the court found liability. The U of D argues that, because the trial court found that the U of D did not have any liability and had not violated the provision of the Elliott-Larsen Civil Rights Act, plaintiffs did not have a need for a jury trial on the issue of damages.
We disagree. First, GCR 1963, 508.3 states that a trial court shall determine the sequence in which issues are to be tried but only while "preserving at all times the constitutional right to trial by jury”. Furthermore, we find the U of D’s interpretation of Abner Wolf Inc v Walch, 385 Mich 253; 188 NW2d 544 (1971), incorrect. Instead, we find the interpretation of that case given in 2 Honigman & Hawkins, Michigan Court Rules Annotated (2d ed), 1984 pocket part, p 149 correct:
"As stated at page 422 of the principal volume, when a common issue of fact is involved in an equitable claim and a legal counterclaim, the practice in the federal courts is to try the common issue to a jury, in order to preserve the Seventh Amendment right to the trial by jury. See Beacon Theatres, Inc v Westover, [359 US 500; 79 S Ct 948; 3 L Ed 2d 988 (1959)] and Dairy Queen, Inc v Wood, [369 US 469; 82 S Ct 894; 8 L Ed 2d 44 (1962)], as cited at page 422 of the principal volume. A recent opinion by Justice Black of the Michigan Supreme Court emphasizes that these federal decisions are not necessarily determinative of Michigan practice. Abner Wolf, Inc v Walch, 385 Mich 253; 188 NW2d 544 (1971).
"The Abner Wolf case involved an equity action by a wholesale grocery supplier to foreclose real estate and chattel mortgages securing accounts for merchandise sold to the defendant retailer. The defendant counterclaimed for damages for misrepresentation, breach of contract, and wrongful interference with business. In response to defendant’s demand for a jury trial, the judge submitted all issues to the jury which returned general verdicts against both parties on their respective claims and counterclaims. The trial judge treated the jury verdict as advisory on the foreclosure claims and entered his own decretal judgment against plaintiffs on those claims, presumably finding that nothing was owed on the accounts as implied by the jury’s general verdict. On appeal the Supreme Court ruled that the trial judge correctly gave its own decretal judgment on plaintiff’s claims, treating the jury verdict as advisory, but the case was remanded to the trial court for specific findings of fact as a basis for the decretal judgment. Ibid.
"Justice Black’s opinion emphasizes that in Michigan there is a constitutional right to decision by the chancellor on issues of fact in equity claims, which is as sacred as the right to jury trial of fact issue in law claims. Apparently, then, when the same issue of fact is common to both an equitable claim and a legal counterclaim, the issue cannot be disposed of simply by giving priority to the right to a jury trial, as in federal practice. While defendant has a right to jury trial as of that issue in connection with his counterclaim, plaintiff also has a right to have the judge decide the same issue independently in connection with the equitable claim, giving to the jury’s ñnding no more effect than that of an advisory jury in equity practice. While this implies the startling possibility of contradictory ñndings in the same case on the common issue of fact, this apparently is a consequence which must be accepted if each party has a constitutional right to a different mode of trial.” (Emphasis added.)
Therefore, in a case such as this where both equitable issues and jury submissible issues coexist, the proper procedure is to hold trial before a jury and follow presentation of evidence with two separate factual determinations; court factfinding on the equitable claims and jury factfinding on the claims of damages.
We find that the lower court erred by failing to hold a trial in this manner. Plaintiffs are not bound by the court’s factfinding on their claim for damages and are entitled on remand to a separate jury trial on that claim.
We find no merit to the U of D’s "collateral estoppel” claim, which properly should be referred to as the "law of the case”, in view of our above holding regarding proper method of trial of cases involving both judge and jury submissible questions.
The U of D next argues that a remand for a jury trial would be unnecessary because plaintiffs failed to present a prima facie case of an Elliott-Larsen violation. Thus, the U of D argues that the trial court would have directed a verdict for the U of D based on its findings and conclusions.
The U of D cannot rely on the trial court’s findings. The standard of review of facts for a GCR 1963, 504.2 involuntary dismissal is substantially different than a review of evidence on a motion for directed verdict. When reviewing a motion for a directed verdict, a trial court must view the evidence in a light most favorable to the party opposing the motion. Ransford v The Detroit Edison Co, 124 Mich App 537, 542; 335 NW2d 211 (1983); Rickrode v Wistinghausen, 128 Mich App 240, 244; 340 NW2d 83 (1983). When reviewing a motion brought under GCR 1963, 504.2, a court sitting without a jury may review and weigh the evidence. Angelo Iafrate Co v M & K Development Co, 80 Mich App 508, 512-513; 264 NW2d 45 (1978). Thus, because of the different standards of review, we cannot rely upon the trial court’s findings to decide whether it would have directed a verdict.
For the law regarding disparate treatment and disparate impact, we refer the parties and lower court to Pompey v GMC, supra, Farmington Education Ass’n v Farmington School Dist, 133 Mich App 566, 573-574; 351 NW2d 242 (1984), and the new jury instructions regarding Elliott-Larsen actions.
Finally, we agree with the U of D’s argument that the trial court erred by certifying as members of plaintiffs’ class individuals whose actions are barred by the running of the applicable statutory period of limitation. See Citizens for Pre-Trial Justice v Golfarb, 88 Mich App 519, 535; 278 NW2d 653 (1979), modified in part 415 Mich 255; 327 NW2d 910 (1982). Thus, on remand the plaintiffs’ class should not include individuals whose claims are time barred. However, plaintiffs should be granted leave to amend their complaint to allege any applicable tolling provision.
Reversed and remanded. | [
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] |
Wiest, J.
In November, 1919, defendants Edwards gave plaintiff a mortgage for $2,300, on their 40-acre farm in Montcalm county, and obligated themselves to keep the buildings thereon insured for the benefit of the mortgagee. In May, 1931, plaintiff commenced foreclosure of the mortgage by advertisement and fixed the sale for August 25, 1931. July 27, 1931, defendants Edwards applied to defendant insurance company for insurance on the buildings and personal property, and on August 17, 1931, they paid the premium and the policy was issued in the sum of $3,500, on the buildings, and $800 on personal property, and, with mortgage clause attached, sent by the insurance company to plaintiff at St. Paul, Minnesota. August 24, 1931, the buildings on the farm were destroyed by fire, leaving the farm worth about $1,000. The next morning sale on foreclosure was had, and, without knowledge of destruction of the buildings, the property was bid in by plaintiff mortgagee for the amount of the mortgage, and a sheriff’s deed was delivered and recorded. October 2, 1931, plaintiff filed the bill herein to set the foreclosure sale aside and restore the mortgage because of its bid under a mistake of fact and of loss thereby. Defendants Edwards appeared and commendably made no objection to granting such equitable relief. The insurance com'pany was made a nominal party defendant, and it appeared and opposed relief to plaintiff, and, by cross-bill, sought cancellation of the insurance, alleging fraudulent concealment of the foreclosure proceeding by defendants Edwards in making the application for the insurance and failure of plaintiff to give it notice of such increased hazard. The insurance company prosecutes this appeal from the decree in the circuit vacating the foreclosure sale and sheriff’s deed thereunder, restraining payment of the insurance to other than plaintiff, and dismissing the cross-bill of the insurance company. In this court the insurance company contests the right of plaintiff to the relief granted, and as well submits the matter in its cross-bill for adjudication.
It is of little concern, if any, to the insurance company whether the foreclosure sale be vacated or not, if it is liable on its policy. However, it insists upon consideration of its cross-bill, and as all parties in interest have presented their proofs, we will pass on the points raised.
First, the vacation of the foreclosure sale. If it is not vacated plaintiff Will suffer loss and defendants Edwards will profit thereby. Defendants Edwards do not seek.any such unconscionable advantage. The foreclosure sale was held the morning after the fire and in entire ignorance on the part of plaintiff’s representatives of such loss of the buildings, and such ignorance was not by reason of want of ordinary diligence. The sale was not at the mortgaged premises in the township of Bushnell, but at the courthouse in the city of Stanton, as the law required. Plaintiff, by the foreclosure, has injured no one, and now only seeks to avert a loss occasioned by a mistake of fact and which, if denied, will accord others, who do not even ask it, an unconscionable advantage. Plaintiff, without blame, laboring under a mistake of fact, bid in the property at the mortgage sale in a manner wholly unintended had the truth been known, and it is no more than plain justice, in a case like this, where the court can restore the status quo, without detriment to any one, and no interests of third parties are involved, for equity to grant relief from such a unilateral mistake of fact. See Peterson v. First National Bank of Ceylon, 162 Minn. 369 (203 N. W. 53, 42 A. L. R. 1185); Root v. King, 91 Mich. 488.
“A sale may be vacated at the instance of a party injured thereby on the ground of his surprise, that is, where he justifiably relies on the existence of a certain state of facts, * * * and is guilty of no negligence or lack of attention, but discovers, too late to protect his interests, contrary facts which, had he known them in time, would have materially affected his actions with reference to the sale.” 42 C. J. p. 234.
If the sale is not vacated the loss of the buildings will fall upon plaintiff.
Defendant insurance company invokes the doctrine of caveat emptor. That doctrine, with reference to judicial sales, relates to matters of title ascertainable by inspection of public records. The doctrine has no applicability to any issue in this case.
Should the policy be canceled? The by-laws of the insurance company provided:
“The form of application for insurance to be signed by the applicant shall be prescribed by the secretary, which application shall make part of the contract of insurance, and be considered as a warranty of the truth of all the facts stated therein. ’ ’
The form of application, prepared by the secre- , tary and signed by the Edwards, contained no inquiry about foreclosure proceedings. The agent who procured the application testified that he did not ask whether the mortgage was in default or being •foreclosed. The secretary of the insurance company testified that, had he known of the foreclosure proceeding, the policy would not have been issued, but, during his eight years with the company, he said he had issued lots of policies for the company upon mortgaged property, “and during all this time I don’t remember asking any of the applicants whether or not mortgages were being foreclosed on their farms.” Fraudulent concealment of the foreclosure cannot be based on a failure of the insured to volunteer information not sought by the insurer. If considered material to the risk, the company was aware of need of information on the subject, and if a failure to inquire be considered no excuse for failure of a farmer to volunteer the information, and, if he does not so volunteer, he is guilty of a fraudulent concealment, then a new meaning is accorded such term.
But the insurance company claims that, even though the question was not asked about foreclosure, there was a duty upon the insured to disclose that fact under a clause in the application, reading:
“And the said applicant covenants and agrees that the foregoing is a just, full, and true exposition of all the facts and circumstances affecting the risk of the property insured.”
The questions in the application prepared by the insurance company were all properly answered. No question relative to foreclosure of the mortgage was asked, and no representation on that subject was made. If the insurance company considered a mortgage foreclosure material to the risk they should have included a question as to such fact in the application. The insured may not be held to have fraudulently concealed a fact that the insurer never inquired about.
“And where the insurer propounds questions to the applicant, and he makes full and true answers, he is not answerable for qn omission to mention the existence of other facts about which no inquiry is made of him, though they may turn out to he material for the insurer to know in taking the risk.” 14 R. C. L. p. 1024.
The insurer is assumed to know the extent of the information desired, and to seek it, and cannot avoid liability by claiming there was concealment of the fact of foreclosure when it did not ask about such a' matter and called for no such information in its written application. There was no fraudulent concealment.
The mortgage clause, attached to the policy and sent by the insurance company to plaintiff, provided :
“Loss or damage, if any, under this policy, shall be payable to the Federal Land Bank of St. Paul, a body corporate, of St. Paul, Minn., as mortgagee, as its interest may appear, and this insurance, as to the interest of the mortgagee only therein, shall not be invalidated by any act or neglect of the mortgagor or the owner of the within-described property, nor by any foreclosure or other proceedings or notice of sale relating to the property.”
The insured never saw the policy, for as soon as they paid the premium, on August 17, 1931, the insurance company mailed the policy to the plaintiff. The insurance company had a sort of gentlemen’s understanding with the Federal Land Bank, under which it received notice of foreclosure proceedings in cases involving its risks, and complains of want of such notice in this instance. The fire occurred seven days after the policy was mailed at Ionia to the mortgagee at St. Paul. Inasmuch as the policy provided that “foreclosure or other proceedings or notice of sale relating to the property” should not invalidate the insurance, we pass the complaint as of no importance.
We find no fraudulent concealment by the insured, and the cross-bill of the insurance company was properly dismissed.
The decree in the circuit court is affirmed, with costs against the insurance company.
McDonald, C. J., and Clark, Potter, Sharpe, > North, Pead, and Butzel, JJ., concurred. | [
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Butzel, J.
In the years 1910 and 1911, Thomas O’Donnell, plaintiff, erected a two-story dwelling house on property he owned on the north side of Ayer street, at a point 200 feet west of Lake street, in the city of Ironwood, Michigan. The dimensions of the house were 27 by 52 feet. It was of frame construction, with brick veneer up to the second floor, and .a cellar underneath the house.
Ironwood is located in Gogebic county adjoining Iron county, Wisconsin, both of which contain very large deposits of iron ore, A large part of the city of Ironwood is built directly over mines owned and operated by defendant, Oliver Iron Mining Company. Plaintiff claims that, owing to defendant’s failure to furnish sufficient lateral and subjacent support for the surface upon which his house stood, a serious subsidence resulted, and, as a consequence thereof, cracks appeared in the foundation, walls, and cellar of the house to such an extent that the property has been very badly damaged. Defendant contends that the cracks are in no way due to subsidence, but rather to the fact that the house was built upon what was formerly marshy ground, and that this fact, together with the poor quality of the materials used in the foundation, made it impossible for the building to withstand the very damaging climatic conditions of several preceding winters. It further claims that the mining operations did not affect any of the property in the immediate proximity of plaintiff’s home and could not possibly have caused the damage claimed. • The jury rendered a verdict of $8,500 in favor of plaintiff, and defendant appeals. We shall discuss only a few of the more' serious errors alleged. •
Plaintiff’s attorneys first introduced the deposition of Donald E. Sutherland, defendant’s assistant general superintendent, called as an adverse witness. They also cross-examined under the statute (3 Comp. Laws 1929, § 14220) Oscar E. Olson, defendant’s chief engineer for the Ironwood district, principally about conditions in and about Ironwood. Tbe testimony of both witnesses is voluminous and covers 88 pages of tbe printed record. They described tbe general contour of tbe land in and about Ironwood, testifying that in certain portions thereof there had been subsidence to a greater or lesser extent. Sutherland, however, stated positively that it wás impossible for defendant’s mining operations to have caused any damage to plaintiff’s property.
Plaintiff next took the stand and then called Joseph II. Rowell and James II. Goudie to give expert testimony. Considerable difficulty was encountered by plaintiff’s attorneys in submitting a proper hypothetical question to witness Rowell. After being admonished by the court to frame a proper question, witness was permitted to answer the following question propounded by them:
“Q. As a mining engineer, have you sufficient information before you, from what you have seen, from your examination, and from the testimony that you have heard of Mr. O’Donnell, Mr. Olson and Mr. Sutherland, to be able to form an opinion as to the cause of the cracks in the O’Donnell basement and floor?”
Rowell also stated that his opinion was based partially on the testimony of Mr. Sutherland and Mr. Olson. Witness Goudie was also asked to give his opinion, based on his own observations and experience and on the testimony of Sutherland and Olson. Vigorous objections to this form of question were made by defendant’s counsel, but the trial court overruled defendant’s objections.-
A proper hypothetical question should have been propounded to Rowell and Goudie, and it could not be dispensed with by referring in a general manner to the very lengthy testimony of ■ other witnesses, one of whom stated positively that the cracks were not due to defendant’s mining operations. Inasmuch as there had been an earlier trial of the same cause, the plaintiff’s attorneys had full notice and ample opportunity to formulate a proper question. The effect of the questions was to make the witness, and not the jury, pass upon the credibility and correctness of the previous testimony. There was much testimony from which conflicting inferences as to the facts might be drawn, even were it conceded that the testimony on its face was not contradictory. The fact that Olson and Sutherland both gave opinions in the course of their testimony made the expert testimony based upon their statements even more objectionable. We cannot tell what facts were made the basis of the experts’ opinions, nor whether, in their formulation, there was an improper reliance placed on the opinions given by Olson and Sutherland. People v. Aikin, 66 Mich. 460 (11 Am. St. Rep. 512); People v. Bowen, 165 Mich. 231; Dunagan v. Appalachian Poiver Co. (C. C. A.), 33 Fed. (2d) 876 (68 A. L. R. 1393); People v. McElvaine, 121 N. Y. 250 (24 N. E. 465,18 Am. St. Rep. 820); People v. Le Doux, 155 Cal. 535, 553 (102 Pac. 517).
It was error, under the circumstances, to interrogate the expert witnesses without proper hypothetical questions, in which all of the facts from which the experts were to draw their conclusions were stated. Our attention is called to some authority that permits the practice of permitting an expert to base his conclusions on the testimony of previous witnesses, but even this authority does not go so far as to permit such questions where the previous testimony has been long and involved and is somewhat contradictory. Kempsey v. McGinnis, 21 Mich. 123, 137.
Defendant objected to the admission of testimony to the effect that a water hydrant had' broken in the vicinity of plaintiff’s home. The cause of the break was not shown. Water hydrants have been known to break in cities far removed from mining operations. Such breaks have frequently been the result of electrolysis, frost, faulty construction, or causes other than subsidence. The judge permitted the testimony upon plaintiff’s promise to connect it with other evidence showing a relationship to the subsidence. He neglected to do this, and defendant thereupon asked that the testimony in regard to the water hydrant be stricken. The trial judge’s denial of this request was error. As the record stands, at most there was an unfounded inference that the break in the water hydrant was caused by subsidence. Plaintiff sought to strengthen his case by building one inference upon another inference which had no basis in the testimony. This was error. The testimony should have been either excluded, or, if admitted, stricken upon plaintiff’s failure to connect it up with the other testimony in the case. United States v. Ross, 92 U. S. 281; Swenson v. Erlandson, 86 Minn. 263 (90 N. W. 534).
Testimony was also admitted, over objections of defendant, to show subsidence of soil in neighborhoods far removed from plaintiff’s residence, at points where the excavations were far more extensive and located and conducted under conditions substantially lacking in similarity to those claimed responsible for' the damage in the instant case. A large amount of this testimony related to operations over half a mile east of plaintiff’s property, and there was no showing whatsoever that such operations could have caused any damage to plaintiff’s property. When objection was made, plain tiff’s counsel here again stated that the testimony would be connected up in the proper manner. The court permitted all of this testimony to stand, despite the fact that the alleged relevancy of the testimony was not shown, and charged the jury that it might consider conditions at and around the mines in determining whether plaintiff’s property was damaged by defendant’s mining operations. It was error to permit any testimony as to what took place in other parts of Ironwood or its vicinity without some showing that such conditions may have been responsible for the subsidence of plaintiff’s property. The conditions under which the operations were being conducted to the east of the O’Donnell property were so dissimilar that evidence as to these operations and their effect could have no relevancy in this cause, and would only tend to mislead and confuse the jury. The rule is stated in 2 Jones, Commentaries on Evidence (2d Ed.), § 608, pp. 1124, 1125:
“In determining whether certain effects have been produced by the causes alleged it has frequently been held that the testimony need not be confined to the effect in the case upon trial, but that proof of the effect upon other property similarly situated may be received. s * * But it will be found that the cases admitting testimony of this character have all recognized the rule that substantial similarity of conditions must first be shown.”
See Emerson v. Lowell Gas Light Co., 3 Allen (85 Mass.), 410, 417; Haynes v. Burlington, 38 Vt. 350, 363; Louisville Water Co. v. Weis, 76 S. W. (Ky.) 356; Hughes v. General Electric Light & Power Co., 107 Ky. 485 (54 S. W. 723).
As the case must go back for a new trial, on account of the errors pointed out, we also call atten tion to another alleged error. The court instructed the jury that, if it found that the injury to plaintiff’s property was caused by defendant’s negligence, the damages should represent the difference between the market value of the house at the date of the injury and that value it would have had if the property had remained undamaged. This is the measure of recovery only where the injury is permanent. No instruction was given as to what the measure of damages should be in case the jury found the injuries were reparable, nor did defendant make any showing as to the cost of full restoration and repair of the house. Apparently, plaintiff tried the case on the theory that the damage was permanent and irreparable. Nevertheless, if defendant shows that the property can be repaired and restored to the condition it would have been in had it not been damaged by the subsidence, and also gives proper testimony as to the cost of the repairs, the court should make it clear to the jury that the question as to the permanency of the damage, and, if reparable, the cost of repairs, is one of fact for them to decide, if they conclude that defendant was responsible for the ■ damages. The correct rule is stated in Berkey v. Berwind-White Coal Mining Co., 229 Pa. 417 (78 Atl. 1004), where the court said:
‘ ‘ The twelfth assignment relates to the measure of damages. The learned judge correctly disposed of the matter covered by this assignment. He distinctly told the jury that if the injury was reparable or curable with reasonable effort and expense less than the value of the property, the measure of damages was what it would cost to make the repairs. He further instructed them that there had been no proof offered by the plaintiff of what it would cost to make the repairs and £if it is reparable, .there being no proof of the cost of repair, you cannot allow for it. ’ He also told the jury in answer to a point, and very properly so, that if the injury was permanent the measure of damages was the difference in the market value of the farm before and after the injury inflicted by the mining operations. The assignment is dismissed.”
See, also, Ohio Collieries Co. v. Cocke, 107 Ohio St. 238 (140 N. E. 356).
The judgment is reversed, with costs to defendant, and the case is remanded to the lower court for a new trial.
McDonald, C. J., and Clark, Potter, Sharpe, North, Fead, and Wiest, JJ., concurred. | [
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] |
McDonald, C. J.
On March 25, 1932, Bertha B. Cleavenger filed a judgment creditor’s bill in the Wayne circuit court against the Southern Surety Company of New York, in which she alleged that the company was insolvent, and that, on application of the superintendent of insurance in the State of New York, a receiver had been appointed in that State to take over and administer its assets. She also alleged that the company had assets and property within the State of Michigan, and for the benefit of herself and other creditors prayed for the appointment of a receiver to take over such property and assets, to sell the same and apply the proceeds in satisfaction of her judgment. There was no service of process on the company, though it had maintained an agent in the city of Detroit for that purpose. On March 25, 1932, an ex parte order was entered in the Wayne circuit court appointing Charles F. Becker receiver. On March 26, 1932, Charles D. Livingston, insurance commissioner for the State of Michigan, filed a petition to intervene, and moved to vacate the order appointing Mr. Becker receiver. Before final action was had on his petition, Mr. Livingston filed a bill in the Ingham county circuit court for the appointment of a receiver, and in compliance therewith an order Avas entered appointing Ralph M. Wade receiver to take possession of the business and assets of the insolvent company Avithin the State of Michigan for the purpose of administering and liquidating the same under direction of the commissioner of insur anee. Mr. Wade is a deputy commissioner. He qualified as receiver on the 29th day of March, 1932, and is in possession of the property and assets of the company. On the same day, but subsequent to the appointment and qualification of Ml. Wade, the Wayne circuit court in the suit of Bertha B. Cleavenger appointed the Equitable Trust Company of Detroit receiver in the place of Mr. Becker. The Equitable Trust Company promptly qualified, and thereupon filed a petition in the Ingham circuit court to vacate the appointment of Mr. Wade. From an order denying the prayer of its petition, the Equitable Trust Company is prosecuting this appeal.
The question is whether, in view of the proceedings in the Wayne circuit court, the circuit court of Ingham county had jurisdiction to appoint a receiver.-
It is first claimed by the plaintiff that the action of the Wayne circuit court appointing a receiver was an absolute nullity because there was no service of process upon the surety company. This claim has no merit. The surety company was a foreign corporation, and there was no one upon whom service could be made. It is true that the company had maintained an agent in the city of Detroit for that purpose, but when the bill wa's filed in the Wayne circuit the company was not in existence. It had been dissolved by the New York court. With its dissolution passed the agency of its Detroit representative. U. S. Truck Co. v. Pennsylvania Surety Corp., 259 Mich. 422.
But the right of a court of equity to appoint a receiver ex parte is an inherent part of its equity powers. It is entirely a matter of judicial discretion. Tuller v. Wayne Circuit Judge, 243 Mich. 239.
The right to appoint was not questioned in the Wayne circuit court .suit. The day following the appointment, the insurance commissioner of Michigan filed a petition to intervene. Intervention was granted. The statute (3 Comp. Laws 1929, § 14019), requires that the intervention “shall he in subordination to, and in recognition of, the propriety of the main proceedings.” As was said by this court in Michigan Trust Co. v. National Bank of Ionia, 241 Mich. 146, “The intervener takes the case as he finds it.” Having submitted himself by intervention to the jurisdiction of the court, he cannot question the validity of the appointment.
The Wayne circuit court had jurisdiction of the action. The bill presented a case for the appointment of a receiver. It alleged that the plaintiff was a judgment creditor, that the surety company was insolvent and in the hands of a receiver in New York State, and that it had property and assets within the State of Michigan. When the. receiver was appointed, a lien was created in favor of the judgment creditor on the debtor’s property in this State. Saginaw County Savings Bank v. Duffield, 157 Mich. 522 (133 Am. St. Rep. 354); German American Seminary v. Saenger, 66 Mich. 249; Beith v. Porter, 119 Mich. 365 (75 Am. St. Rep. 402).
The appointment of Mr. Becker, on March 25, 1932, by the Wayne circuit court, was valid. On March 29, 1932, the court vacated this order of appointment and appointed the Equitable Trust Company of Detroit. Mr. Becker was an officer of the court. From the moment of his appointment the property of the insolvent debtor in the State of Michigan was in custodia legis, and the court had the power to preserve it to satisfy the plaintiff’s judgment.
So that when the circuit court of Ingham county subsequently appointed a receiver, the property in volved was in the custody of another court of competent jurisdiction, and was subject to the lien of the judgment creditor. The Ingham county circuit court was without jurisdiction, and its order appointing a receiver must be held to be invalid.
If the Michigan insurance commissioner has interests which he desires to protect, he may do so in the Wayne circuit court suit according to the practice indicated in Michigan Trust Co. v. National Bank of Ionia, supra.
A decree will be entered vacating the order of the Ingham county circuit court.
Clark, Potter, Sharpe, North, Pead, Wiest, and Butzel, JJ., concurred. | [
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North, J.
This suit arises out of a collision between two automobiles at the intersection of Pine and Genesee streets in the city of Lansing. On trial before a jury, plaintiff had verdict and judgment, and defendants have appealed. The sole question presented is appellants’ claim that the driver of the automobile in which plaintiff was riding was guilty of contributory negligence which was imputable to plaintiff, and, therefore, defendants’ motion for a directed verdict, as well as their motion for judgment non obstante, should have been granted.
At the time of the accident, the car in which plaintiff was riding was proceeding northerly on Pine street, and defendants’ car easterly on Genesee street. The one on Pine street was going at a speed of approximately 20 miles an hour. There is considerable testimony that the other car was going at substantially the same rate, though inference may be justified that it was going at a higher rate of speed. Neither slackened its pace any appreciable time before the collision, which occurred just as the car in which- plaintiff was riding was crossing the center line of Genesee street. This car did not change its course prior to the impact; but immediately before the collision defendants’ car veered somewhat northerly in an evident attempt to avoid the accident. The collision occurred during daylight hours, but neither driver seems to have seen the other automobile until practically at the point of impact. As they approached the intersection, each car was traveling on the right-hand side of the street, and each street was 30 feet from curb to curb. When the automobile in which plaintiff was riding reached a point about 37 feet south of the southerly curb of Genesee street, the driver had an unobstructed view westerly on Genesee street beyond the point from which defendants’ car was approaching. As the car on Pine street was crossing the walk on the south side of Genesee street, defendants’ car was approximately eight feet west of the walk on the west side of Pine street. There were side curtains on the car in which plaintiff was riding, and apparently its driver did not see defendants’ car approaching from his left until another man riding in his car said “Watch out,” and at that time it was too late to avoid the accident.
Appellee stresses the fact that the collision occurred north of the center line of Genesee street and east of the center line of Pine street, i. e., in the northeast portion of the intersection. This is disputed by defendants’ testimony, but in deciding the question presented by this appeal, the testimony must be accepted which is most favorable to appellee. Defendants’ automobile struck the one in which plaintiff was riding on the left front wheel and fender. The only fair inference that can be drawn from the testimony is that at the instant of collision the forward portion of the car in which plaintiff was riding was just northerly of the center line of Genesee street, that the slight swerving of defendants’ car to the left was in an effort to avoid the accident, and that had their car proceeded in a straight course the only difference would have been that it would have struck the other machine in the rear portion rather than in the forward portion. Appellee urges that the instant case falls squarely within Harris v. Bernstein, 204 Mich. 685, and Grodi v. Mierow, 244 Mich. 511, where the issue of contributory negligence was held to have been a question of fact for the jury. In each of those cases the question of contributory negligence was close. It should be noted that in each of them the defendants’ machines were being driven on the wrong side of the street, continued that course, and the accident occurred wholly in territory where the defendants did not have a right to be with their machines. That is not true in the instant case. And each of the above-cited. cases is distinguishable in that there was testimony from which it might fairly be inferred that the driver of the plaintiff’s machine, when entering the intersection, made an observation as to approaching vehicles and thereupon reasonably as sumed that it was safe to proceed in advance of the defendants’ oncoming automobile. We cannot agree with appellee’s contention that in this case “the sole and proximate cause of the collision” was the invasion by the defendants of a portion of the intersection where they did not have a right to be. Instead, we think this record conclusively discloses negligence on the part of the driver of the car in which plaintiff was riding. Unfortunately, this accident resulted in the driver’s death. The conclusion seems unescapable that either he made no observation whatever for an approaching vehicle from his left as he entered this intersection, or if he did observe the other automobile just about to enter the intersection (and at an excessive rate of speed as appellee’s brief asserts) he was guilty of negligence in proceeding to cross the intersection.
Careful consideration of this record necessitates the conclusion that if the driver of plaintiff’s car, as he approached this intersection, had used reasonable care in making an observation to the west, from which direction defendants’ car was approaching, he would have discovered the impending danger and have been able to have avoided the accident. While the two machines were not exactly equally distant from the center of the intersecting streets, they were approaching it simultaneously and each proceeding at least at approximately the maximum legal rate of speed. The view was unobstructed, road conditions good, and no traffic complications. As before stated, the unescapable conclusion is that the driver of plaintiff’s car entered this intersection without looking for a vehicle approaching from his left, or that he looked and proceeded negligently. Notwithstanding he had the right of way (1 Comp. Laws 1929, §4712), he was not entitled to proceed heedlessly and without taking any precaution for the safety of himself and others riding in his automobile. Kerr v. Hayes, 250 Mich. 19. He was guilty of negligence which, was a proximate cause of the accident, and this negligence on the part of the driver of the automobile in which plaintiff was riding is imputable to him. The instant case is controlled by our recent decisions in Smith v. Ormiston, 242 Mich. 600; Kerr v. Hayes, supra; Zuidema v. Bekkering, 256 Mich. 327; Kok v. Lattin, 261 Mich. 362.
The verdict and judgment entered in the circuit court will be vacated, and the case remanded, with direction to enter judgment non obstante for defendants. Costs to appellants.
McDonald, C. J., and Clark, Potter, Sharpe, Pead, Wiest, and Butzel, JJ., concurred. | [
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North, J.
This appeal from a decree entered in the circuit court of Oakland county, in chancery, dismissing plaintiff’s bill of complaint presents for review the following questions:
(1) Was section 21, article 10, legally adopted and made a part of the Michigan Constitution at the November, 1932, election?
(2) If legally adopted, what is its proper construction in the particulars .hereinafter noted?
The amendment reads:
“Section 21. The total amount of taxes assessed against property for all purposes in any one year shall not exceed one and one-half per cent, of the assessed valuation of said property, except taxes levied for the payment of interest and principal on obligations heretofore incurred, which sums shall be separately assessed in all cases: Provided, That this limitation may be increased for a period óf not to exceed five years at any one time, to not more than a total of five per cent, of the assessed valuation, by a two-thirds vote of the electors of any assessing district, or when provided for by the charter of a municipal corporation :• Provided further, That this limitation shall not apply to taxes levied in the year 1932.”
The Constitution (article 17) provides how amendments may be originated and adopted. It can be amended only in the manner therein provided. Scott v. Secretary of State, 202 Mich. 629. Failure to comply with the requisite provisions would defeat the proposed amendment. 6 R. C. L. p. 31; Simpson v. Hill, 128 Okla. 269 (263 Pac. 635, 56 A. L. R. 706). The above-quoted amendment was proposed by the requisite number of qualified electors, submitted at the November, 1932, election, and received the necessary votes for its adoption. Validity of the amendment is challenged on the ground of failure of the secretary of State to comply with article 17, § 3, of the Constitution, which provides:
“All proposed amendments to the Constitution submitted to the electors shall be published in full, with any existing provisions of the Constitution which would be altered or abrogated thereby, and a copy thereof shall be posted at each registration and election place. Proposed amendments shall also be printed together with any other special questions to be submitted at such election in full on a single ballot separate from the ballot containing the names of candidates or nominees for public office.”
The amendment was published in full with the following notice or comment:
‘ ‘ This is a new section to limit the amount of taxes assessed against property. This proposed amendment, if adopted, will limit the total amount of taxes assessed against property for all purposes in any one year (except 1932) to one and one-half per cent, of the assessed valuation, except taxes levied for the payment of obligations already incurred; provided that said limitation may be increased for not to exceed five years at any one time to not more than five per cent, of the assessed valuation by a two-thirds vote of the electors of any assessing district or when provided for by the charter of a municipal corporation.”
The exact objection urged is that this amendment alters or abrogates some 16 or 18 other provisions of the Constitution, and that failure to publish the “existing provisions of the Constitution which would be altered or abrogated” nullifies the attempted amendment. Some of the provisions as to which this argument is urged are: Article 8, §§ 20, 22-24, 26; article 10, §§ 1-3, 5, 10; article 11, §§ 9, 10, 14; article 15, § 2. We think this position is not tenable. The duty of submitting all proposed constitutional amendments initiated by the people is placed' by the Constitution upon the secretary of State, article 17, § 2. Any provision as to such duty should, if possible, be so construed as to make the requisite course of conduct entirely clear and plain. Perplexities and uncertainties will be pitfalls for the officer charged with this duty regardless of a zealous and honest effort to fully comply with the law, and the officer’s nonperformance might jeopardize and possibly nullify the effort of electors to amend the Constitution. The instant case affords an apt illustration of such difficulties. Here able counsel disagree which, if any, of the other 16 or 18 constitutional provisions are altered by the amendment. It may almost be said that no two agree that certain of these provisions are altered and others are not. How then could the secretary of State determine or be advised with any degree of certainty which of these other provisions of the Constitution he should publish? As hereinafter noted a more clear and definite meaning than that asserted by appellants must be given to the constitutional provision last above quoted.
In determining what constitutes compliance with the constitutional requirement as to publication, a matter of prime importance is the purpose that prompted the people of the State of Michigan to include such a provision in the Constitution. All will agree that this was a means adopted by which it was believed the elector would be definitely advised as to the purpose of the proposed amendment and what provision of the constitutional law it modified or supplanted. Being so advised, the elector could intelligently determine whether his vote would be for adoption or rejection. But the ordinary elector, not being a constitutional lawyer, would be confused rather than helped by a publication of all the other constitutional provisions which were or might be directly or only remotely, and possibly only contingently, affected by the proposed amendment. We think the requirement in substance is this: That in case a proposed constitutional provision amends or replaces (“alters or abrogates”) a specific provision of the Constitution, that such provision should be published along with the proposed amendment; that other provisions which are still operative, though possibly they may need thereafter to be construed in conjunction with the amending provision, need not necessarily be published.
This amendment is a wholly new and additional constitutional provision in this State. It is not a grant of power, but instead a constitutional limitation upon the exercise of the general power of taxation. Heretofore our Constitution contained no such general limitations. The general power of taxation has been and is inherent in State government. 1 Cooley on Taxation (4th Ed.), §§ 64,102. Prior to this amendment, the extent to which the legislature might authorize the exercise of this power for public purposes was without general limitation, though there were numerous special limitations in the Constitution. This was clearly pointed out in the first sentence of the notice to the electors which was published with this proposed amendment. It read: ‘ ‘ This is a new section to limit the amount of taxes assessed against property.” Being a new section, which did not specifically and definitely “alter or abrogate” any other provision.of the Constitution, it follows that there was no other provision of the Constitution to be published in order that there might be full compliance with article 17, § 3.
The validity of the 1932 amendment is further challenged on the ground that it is not an amendment, but instead it is so far reaching in its modification and restriction of governmental powers that it amounts to a revision of the State Constitution, and, not having been accomplished in the manner provided in the Constitution for revision (article 17, § 4), it is wholly ineffective and invalid. We are fully convinced that the adoption of this new limitation upon the power of taxation, under the construction hereinafter placed upon it, does not so interfere with or modify the operation of governmental agencies as to render it other than an amendment by way of an addition to the Constitution. As an amendment it was legally adopted and became a part of our fundamental law.
We are asked to construe in certain particulars this amendment to the Constitution. Unfortunately it is couched in language so ambiguous that able counsel after much study and reflection are far from being in accord as to its proper construction. Even some of those who were instrumental incident to initiating the amendment seem to differ widely as to what was to be accomplished thereby. Because of such ambiguity, it becomes the duty of the court to construe the amendment as worded in the light of established rules for the construction of constitutional provisions. Much has already been written concerning’ proper rules for such construction. Extended review of these rules would not be particularly helpful. Fortunately the pertinent fundamental guides for such construction have been clearly and concisely stated in former decisions of this court:
“It is a maxim that the object of construction, as applied to a written Constitution, is to ultimately ascertain and give effect to the intent of the people in adopting* it. * * *
“In construing constitutional provisions where the meaning may be questioned, the court should have regard to the circumstances leading* to their adoption and the purpose sought to be accomplished.” Kearney v. Board of State Auditors, 189 Mich. 666.
This appeal presents for determination the proper construction of the phrase “or when provided for by the charter of a municipal corporation” as embodied in the context of this amendment. The charter of the city of Pontiac adopted under the so-called home-rule act (1 Comp. Laws 1929, § 2228 et seq.), vested the city with power to levy annually a general tax upon real and personal property not exceeding two per cent, of the assessed valuation. The tax so authorized was for the sole úse of the city. The question now presented is this: Does the 1932 constitutional amendment limit the annual tax assessment for State,' county, school, and city purposes to one and a half per cent, in the city of Pontiac (except taxes levied to meet existing indebtedness); or does the city, because of the exception contained in the above-quoted phrase, still have power to tax for municipal purposes to the maximum charter limitation of two per cent.? The city’s contention as stated in its brief is:
“Under the proviso in this amendment the city of Pontiac is not limited to the one and one-half per cent., but the charter tax limitation of two per cent., in existence at the time this amendment was adopted, is in full force and effect. * * * •
“The amendment should be interpreted so as to be agreeable to the already existing law of the Constitution of this State, granting home rule to cities and also such an interpretation should be given as will uphold the present charter provision of two per cent., which is a law approved by the defendant city. ’ ’
The opposing contention is that, aside from taxation to meet indebtedness, the amendment limits taxation against property to one and one-half per cent, of assessed valuation notwithstanding charter provisions to the contrary, unless and until an increase not to exceed five per cent, of the assessed valuation is authorized by a vote of the electors or by a charter amendment adopted subsequent to the 1932 constitutional amendment.
Careful study of the amendment leads to these conclusions: Clearly the intent was to provide by the fundamental law of the State, which had not theretofore contained such provision, a general limitation upon the exercise of the taxing power of the State. The evil or abuse sought to be remedied was excessive taxation imposed by governmental agencies without the consent of those upon whom the burden was placed. At the outset, the framers of the proposed amendment, and later the people who considered its adoption, were confronted with the legal proposition that contractual obligations could not be impaired, and therefore the general exception to the proposed limitation of taxation was made by excepting “taxes levied for the payment of interest and principal on obligations heretofore incurred.” We are not here concerned with this particular limitation, except to note that in drafting the amendment, as well as in its adoption, the people were mindful of existing conditions and sought to so frame the amendment as to be in accord with such existing conditions. This led to embodying in the amendment the above-quoted provision as the first exception to its general limitation on taxation.
Reading further in the amendment, it clearly appears it also occurred to those interested in its fram-. ing and adoption that certain conditions might already exist or might thereafter arise in consequence of which the electors of any assessing district might conclude that the one and one-half per cent, constitutional limitation was unduly restrictive. Such a condition might have prevailed at the time of the adoption of the amendment in a school district which found itself confronted with the necessity of engaging in an extensive building program, or such a condition might come about in the district at any time in consequence of destruction of its buildings by fire or other disaster. Hence the provision in the amendment that the specified limit might be increased for a period not exceeding five years at any one time to the maximum limit of five per cent, of the assessed valuation by a two-thirds vote of the electors of the assessing district. This provision left in the possession of each assessing district power to provide for local needs for which the allocated portion of the one and one half per cent, tax might be deemed to be inadequate; and such provision constituted a second exception to the general taxation limitation contained in the amendment.
This brings us to what a fair reading of the amendment indicates is a third exception to the general limitation of taxation, which exception the framers and adopters of this amendment seemingly deemed essential, and which we think gave rise to including in the amendment the words “or %ohen provided for by the charter of a municipal corporation.” At this point consideration was evidently given to the well-known fact that in comparatively recent years there had developed in this State the so-called “home-rule” feature of our government. Provision therefor was embodied in the Constitution of 1908 (article 8, §§ 20, 21). This was followed by the legislative enactment of the home-rule bill (act No. 279, Pub. Acts 1909 [1 Comp. Laws 1929, § 2228 et seq.]). In the meantime many cities in Michigan have been chartered under the above-cited constitutional provision and legislative enactment. Under the constitutional provision, by the home-rule act, it was sought fundamentally to place in the hands of the electors of the cities chartered thereunder increased power of local governmental control. To this purpose the home-rule act permitted a charter provision authorizing taxation for local municipal needs to the extent of two per cent, of the assessed valuation of taxable property (1 Comp. Laws 1929, § 2230). Whether the electors of a home-rule city would vest their city government with power to tax to the extent of one per cent, or to the extent of two per cent, was a matter of local determination. In the exercise of that power locally, the city of Pontiac embodied in its home-rule charter the two per cent, limitation. Its taxing agencies, the same as those in other cities, were operating under and exercising this grant of power at the time the 1932 constitutional amendment was in the process of being formulated and adopted. Surely this important condition of State affairs was not overlooked in the framing and consideration of the amendment; and to us it seems that knowledge of these various charter provisions under the home-rule act called to the attention of the framers of this constitutional amendment that a third exception should be embodied therein as to the general limitation they proposed to put upon the exercise of the taxing power. Under constitutional provisions and within the specified limitations, this taxing power had already been delegated to various cities in Michigan; and, as noted above, this fact was well known. Surely it would be a strange governmental operation, wholly inconsistent with the ordinary methods of accomplishing that result (if not entirely without precedent) that the charters of the various cities of this State should be summarily amended by a constitutional provision which in spirit, if not in letter, was diametrically opposed to the recently developed policy of home-rule government in this State. This being true, we are fully convinced that the framers and adopters of this constitutional amendment found themselves confronted with a condition which prompted this third exception to the general limitation of the exercise of the taxing power in cities already constitutionally vested with the power to tax in excess of the proposed limitation. To meet this situation, the quoted phrase was embodied, and for that reason it should be held to mean that “this limitation may be increased” in the cities whose charters already empower them to levy a tax for municipal purposes in excess of the amount which the city might levy under the terms of the 1932 amendment. This con struction, we think, is in harmony with the spirit and purpose of the amendment, in that it applies the general limitation of one and one-half per cent, to all taxing districts except those wherein by local action a higher percentage of taxation for local needs is expressly authorized; and in these excepted districts the 1932 constitutional limitation is effective as to State, county, and school taxes. We have not overlooked the argument that the construction of this amendment above outlined does not fit perfectly into its phraseology. No plausible construction has been suggested which does not clash equally as much or even more or lead to governmental difficulties which strongly militate against such suggested construction. At the expense of repetition, we state again that (disregarding the exception of taxes levied for payment of debts), we think the amendment must be construed as though it read:
The total amount of taxes assessed against property for all purposes in any one year shall not exceed one and one-half per cent, of the assessed valuation of said property: Provided, That this limitation may be increased for a period of not to exceed five years at any one time to not more than a total of five per cent, of the assessed valuation, by a two-thirds vote of the electors of any assessing district, or (that this limitation may be increased) when provided for by the (present or future) charter of a municipal corporation.
In the foregoing, reference has been made to the so-called home-rule cities, but we think the same result would follow as to cities having special charters with like provisions as to the exercise of the power of taxation. The result of the above construction is that the 1932 amendment neither increased nor decreased the charter power of a city to levy taxes for its municipal purposes. If in the allocation of general taxes assessed under the one and one-half per cent, constitutional provision a portion of the funds necessary to meet city expenses are to be raised, such amount must be included in the total amount assessed for city purposes in ascertaining whether the city tax exceeds the amount provided in the city’s charter.
With villages and fourth-class cities much the same result follows from the foregoing’ construction of the 1932 amendment. By constitutional and statutory provisions (Constitution, article 8, § 21; 1 Comp. Laws 1929, § 1465 et seq.; § 1763 et seq.; § 1796 et seq.), these municipalities, much like home-rule-cities, have been vested with power of regulating taxation within specified limitations. They possessed this power of local self-government prior to the 1932 constitutional amendment. By the exercise of this power incident to incorporation or subsequently by positive or negative action under the statutes, each has adopted its own limitation or regulation. The right to exercise this power of local self-government was not changed by the constitutional amendment. The electors of the respective-villages and fourth-class cities still have the power, by virtue of and within the above noted constitutional and statutory provisions, to determine and fix the limits within which they may be subjected to taxation for local purposes.
In passing, it may also be stated we think there is much force in the argument set forth in the brief for the city of Pontiac that in the framing and adoption of this amendment there was in contemplation the fact that, outside of chartered cities, there was no general limitation upon the exercise of the power of taxation,- and that in assessment districts other than cities the limitation in the amendment should be applied unless otherwise determined by the requisite vote of the electors; but that in cities having a charter provision action of this character had already been taken by the local electors in adopting their various city charters, and therefore the action so taken should be respected by excepting such districts from the general limitation of one and one-half per cent, embodied in the amendment in so far as the power of taxation was exercised for the city’s local needs.
This appeal also presents the question: Have courts the power to allocate property taxes raised under the one and one-half per cent, constitutional amendment? We think it self-evident that such power is not vested in the courts. The constitutional amendment contains no provision for a division of the total one and one-half per cent, taxes between the State, counties, cities, villages, townships, or school districts. Nor is there any statutory provision relative to such division or allocation. The constitutional duty of courts is to interpret and apply the law, not to enact laws. Taxation is a legislative power vested by the Constitution in the legislative branch of the State government. Determination of the sources of tax revenue and the apportionment of taxation require legislative action. 1 Cooley on Taxation (4th Ed.), §§ 64, 74; 2 Cooley on Taxation (4th Ed.), § 539. As noted, this amendment to the Constitution contains no provision for allocation of taxes. It is not self-executing. Constitutional provisions as to taxation generally are not self-executing; but require legislative action. 1 Cooley on Taxation (4th Ed.), § 132. The trial court .correctly held it was not vested with power to allocate taxes raised under this one and one-half per cent, constitutional amendment. Legislative action is requisite.
The remaining question presented by this appeal is raised by the following assignment of error:
“The court erred in his findings upon which the decree was predicated that any home-rule city has the right to adopt a budget and appropriate a portion of the 15-mill tax revenue before the legislature has taken action to allocate to the respective units of government any share of such tax. ’ ’
In the instant case the plaintiff school district sought to enjoin the city of Pontiac, in which the school district is principally located, from adopting a proposed budget for its municipal purposes. Plaintiff’s contention is that the city had no right to proceed to the adoption of a budget before the legislature had taken action relative to allocation of the revenue derived from the one and one-half per cent, property tax. The trial judge denied the injunctive relief sought, and we think properly so, because plaintiff did not establish the essential fact that in making up its budget the city in any way invaded plaintiff’s rights. As was held in the circuit, in the absence of statutory enactment allocating the tax raised under the one and one-half per cent, provision, the court was powerless to determine whether the defendant city in fixing its budget had exceeded its rights.
The decree dismissing the bill of complaint is affirmed.
The questions presented are of public importance, the State and the county of Oakland were permitted to intervene, and various parties have filed briefs amici curiae. No costs will be awarded.
McDonald, C. J., and Clark, Potter, Sharpe, Fead, Wiest, and Butzel, JJ., concurred. | [
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North, J.
Timothy Downey died February 19, 1929, being upwards of 70 years of age. On November 14, 1928, he entered into á contract with the defendant, Edward F. Siller, for his care and maintenance during the remainder of his life and for suitable burial. As a consideration for this undertaking on the part of the defendant, Downey turiie,d over to him a certificate of deposit for $8,436.94 in the First National Bank of Hancock. Plaintiff, as administratrix of the estate of Timothy Downey, deceased, filed the bill of complaint herein and seeks cancellation of the Siller contract on the ground that Downey was mentally incompetent at the time of its consummation. An accounting is also sought. By decree in the circuit court plaintiff’s bill of complaint was dismissed, and she has appealed. The outcome of this appeal is dependent upon a review of the issue of fact as to whether at the time of enter ing into the contract the deceased was mentally competent.
Timothy Downey was born in Ireland. He came to this country when comparatively young, and for some years worked in mines in the west; but for approximately 35 years preceding the fall of 1927 he worked as a general helper in foundries in northern Michigan. In the later years of his life he resided at a boarding house or hotel known as the Northwestern, at Hancock, Michigan. In habits and conduct he was peculiar. He seems to have mingled with his fellow workmen in a less degree than was common among the others. He was in the habit of talking or mumbling to himself, and while so talking or singing he would chuckle or laugh; and frequently made gestures with his hands, which at times were somewhat violent. He carried his noonday luncheon to work and was accustomed to eating apart from the other employees,' although he sometimes associated with them after eating. Because of his attitude and unusual conduct, other employees teased and aggravated him, which at times led bim to become somewhat violent. However, it does not appear from the record that he ever injured any one, but orders were given that no one should tease him while at work. He seems to have kept careful account of the time he worked and.of the amount of wages due him. On one or two occasions he was successful in convincing his employer that he had been underpaid. He was very careful with his money, seems to have been a regular depositor at the First National Bank of Hancock, where he had both a saving’s account and a certificate of deposit. He left his employment at the factory in October, 1927, apparently on account of impaired health and advancing years; but he continued to room at the hotel and to take his meals at the restaurant operated in connection therewith. He had few, if any, intimates, and rarely indulged in any considerable conversation; though he was inclined to talk in an intelligent manner with other employees at the foundry about the days he had spent in the West and concerning pioneers in the mining- business of Montana. So far as others observed, he rarely read newspapers, books, or magazines.
Decedent seems to have had one rather close friend in the person of Henry O’Leary, who was in the habit of calling upon him quite frequently. On December 12, 1927, O’Leary went to Downey’s room and found him apparently seriously ill. He was sitting or lying on a radiator with his coat collar turned up, although there was no heat in the radiator. Dr. LaBine, the county physician, was called and Downey was removed to the hospital, where he remained for nearly two months. Dr. LaBine testified that at this time Downey’s feet were swollen, and he was suffering from decompensation of the heart. At the time of his removal to the hospital, Downey took with him a leather bag containing 11 bundles of United States currency rolled and tied with a cord, each containing $100, and also $50 in gold. The doctor and 0 ’Leary had this money placed in safekeeping at the hospital. Upon Downey’s release, the amount of his doctor’s bill and hospital expenses was taken out of this money, and some used to buy him clothing. The doctor and O’Leary accompanied Downey to the bank, and practically all of the balance was placed in his savings account. While at the hospital, Downey inquired and was much concerned about the expenses being incurred, and complained because he was deprived of the possession of his money; though Dr, LaBine testified that Downey did not utter a complete sentence during the whole time he was at the hospital. At the time the expense of his sickness was paid out of this money, Downey complained that the charge was “too much, too much.” The testimony discloses that Downey was careless about his personal habits and appearance. His clothes were not -clean, and some of the witnesses referred to him -as wearing clothing that was dirty and filthy, and permitting his hair to grow excessively long. At the time he was taken to the hospital, O’Leary procured some necessary new garments for him and engaged a barber to shave Downey and cut his hair. When he was released from the hospital, February 6,1928, he was completely outfitted with new clothes, shoes, underwear, shirt, and other necessities.. He returned to the hotel to live as before; and his conduct relative to talking or mumbling to himself and singing in his native language, which seems not to have been understood by others, and at times of making- strange and somewhat violent gestures, seems to have continued much as before. At times he was seen by the chambermaids in the corridor of the hotel, possibly on his way to the toilet, clad only in his rindergarments.. One of these hotel employees testified that Downey would mutter to himself while walking up and down the halls, and at times would stop and make the sign of the cross in front of or on the doors of some of the hotel rooms. One of these witnesses stated that in his muttering she heard Downey mention God, and that she thought he was repeating prayers. The testimony discloses that he was a Catholic, attended church, and observed the practices of his faith. Those who waited upon him in the restaurant testified that he generally knew what he wanted. That he ordered a variety of food either from the menu card or on being told by the waitress what was being served; and that he never behaved in an unusual way or made any disturbance in the dining room. One waitress testified that while his clothing was dirty, “he was neat in a way” about his person.
While Downey was thus living at the hotel, it was purchased by the defendant, Edward F. Siller, who took possession and began operating it in January, 1928. There seems to have been no particular intimacy between Downey and Mr. Siller or the other members of the Siller family. Defendant’s son Michael Siller testified that on an occasion, in November, 1928, Downey told him he would like to see the witness’ father; that he wanted to talk with him about paying him a sum of money to furnish him with room, board, and the necessities of life as long as he lived and to provide for his burial. Following this request, and in response to it, both defendant and his son went to Downey’s room, where Downey again stated to defendant substantially what he had previously said concerning the arrangement he wished to make for his future maintenance and burial. According to the testimony of defendant’s son, Downey, upon being asked by defendant what he proposed to pay, told defendant he had a certificate of deposit which he produced and either showed to defendant or gave him the amount of it; and Downey stated he would give that amount; that he had another account at the bank but that he wished to keep that for himself. At this time, besides the certificate of deposit of $8,436.94, he had in a savings account upwards of $3,800. Following the conversation, defendant had an attorney prepare a contract, which was subsequently taken by defendant and his son to Downey’s room. It was read over to Mm and signed by him in the presence of Dr. Dura, who was a friend of the Siller family and at the time had stopped to call upon them. A little later defendant arranged with a justice of the peace named Little, who seems to have had experience in drafting deeds and contracts, to also come to the hotel and witness the instrument here in suit. Little testified that in compliance with this request he went to Downey’s room, read the contract over to him, and asked: “Is that all right?” and deceased replied - “Yes.” Downey acknowledged Ms signature on the contract to Little, and thereupon the latter took the contract to defendant’s office and subscribed Ms name thereto as a witness. Two weeks later the proceeds of Downey’s certificate of deposit were transferred at the bank to a savings account in defendant’s name. In connection with opening this savings account, a copy of the contract between Siller and deceased was filed with the bank. The account remained in this condition at the time of the trial.
As noted above, Downey died February 19, 1929, three months and five days after the contract was executed. Evidently his death from heart failure was hastened by excitement to which he was subjected incident to a fire that occurred in Ms room at the hotel. During the latter weeks of his life there was evidence of failing strength, and at times his meals were served to him in his room. Notwithstanding the provision in the contract that deceased was to be cared for by defendant, there is testimony that, subsequent to the consummation of the contract, deceased paid' for such meals as he ate in the restaurant. Expenses of his burial were met by defendant.
It would serve no good purpose to attempt to embody in this already too lengthy recital of facts all the details in evidence bearing upon the competency or incompetency of deceased at the time he executed the contract. Some of the witnesses, in the opinion of the trial judge, were entitled to little credence. Some were materially interested in the outcome of the case; others were not. Some gave testimony of facts and circumstances constituting a reasonably sufficient foundation for an opinion testified to as to the competency or incompetency of déceased, but others expressed opinions for which but little justification appears in the testimony. After taking the testimony of these witnesses at length in open court and evidently giving it careful consideration, the trial judge came to the conclusion that Timothy Downey was mentally competent to consummate the contract here in suit. In this connection the trial judge said:
“There is no proof that any indisposition of Downey changed his mentality, or is there proof definite enough for the court to say that such indisposition occurred before the contract # * * was made. * * * The court is of the opinion that if the deceased, Timothy Downey, was mentally competent to understand the contract he made and entered into with the defendant, there can be no constructive fraud, as there was no evidence offered which shows, or tends to show, any deception or overreaching upon the part of the defendant. This leaves the only question in the case: Was the deceased, Timothy Downey, on the 14th day of November, 1928, mentally competent to dispose of a part of his property by the contract? * * * As stated, the record is barren of any evidence of actual fraud, undue influence, trickery, or dishonesty, or that the deceased at the time he executed the contract was mentally incompetent. * # * -
“There is no allegation in. the bill that Siller did not perform the contract upon his part. If he (Downey) had the mental capacity to understand the effect of the contract he was legally competent to make it, notwithstanding the opinion of witnesses to the contrary, or to the effect that he could not understand, in their opinions, the legal phraseology of the contract. * * *
“The fact that Downey died after he had been boarded, lodged, and taken care of only three months and five days after the execution of the contract is not conclusive of the inadequacy of the consideration. The testimony is that he might have lived 10 years in the condition he was in when Mr. LaBine last saw him. It may well have been in the minds of the parties at the time they met in this contract that Downey might live for that length of time and might require much care, medical attention, and medicines when sick, together with any and all necessities when desired. * * * It is not the function of the court to make a new contract for the parties, or to set aside the present contract, if the minds of the parties met in agreement.”
The opinion filed by the trial judge, covering 29 pages of the printed record, carefully reviews the details of the testimony. Upon full consideration of the record presented in this court, we are constrained to hold, as did the trial judge, that the plaintiff, upon whom rested the burden of proof, has not established her right to have the contract canceled. Helpful briefs have been filed by the respective counsel, and we have given careful consideration to each argument urged in support of their conflicting contentions. Among other things, appellant’s brief stresses the following: That defendant did not testify; that he secured nonresident persons as witnesses to the contract; that the execution of the contract was not revealed to Dr. LaBine, Mr. O’Leary, or any other person friendly -to the deceased; that the contract did not detail the character of maintenance or the kind of burial to be provided for deceased; that there was no particular intimacy or long acquaintance existing between defendant and the deceased; that no security insuring* performance of the contract by defendant was given to Mr. Downey; that deceased, being of a miserly inclination and having refused to extend needed help to his own brother, are circumstances highly inconsistent with his having made the contract at a time when he was mentally competent; that at the time of making the contract defendant knew Downey was afflicted with heart trouble, and that (according to one witness) the defendant himself had said Downey was “crazy.” Testimony of the opposite purport was introduced by defendant. Disinterested persons who had an opportunity to observe the conduct of deceased rather intimately did not observe anything indicative of abnormal mentality. It is a fair inference from the record that Mr. Downey was either estranged from any relatives he may have had or that at least he had no interest in them or they in him. In the sense in which the expression is ordinarily used, he had no “natural objects of his bounty.” Dr. LaBine, whose experience and professional ability is admitted by all, and who had an excellent opportunity to observe and pass upon Downey’s mentality, upon examination by plaintiff’s counsel, testified that his observations of Downey “made me feel that he was not fully competent to take care of himself.” His testimony is not indicative of a very marked degree of incompetency. Downey’s close friend, Henry O’Leary, testifying for plaintiff, was asked:
“Would you say that at this time (the date of the contract) Mr. Downey had mental capacity to understand this contract that he made with Mr. Siller?
“A. I don’t think he did.”
Upon being further queried by counsel, the witness testified that he was “positive about that.” But upon redirect examination, this witness further testified concerning Downey’s condition at the time he was released from the hospital:
“He was physically well, and a great deal better than when he went to the hospital. When he come out he was physically in good shape, in my estimation.
“Q. What can you say about, his mental condition?
“A. I couldn’t say about that.
“Q. Did you ever see any difference in his mental condition during the last five or six years of his life?
“A. No, sir.”
Plaintiff also produced as a witness Mr. Michael Shea, one of the officers of the First National Bank of Hancock. He testified that for 14 or 15 years Downey had come to the bank every two weeks to cash pay checks or make deposits; that on such occasions he observed deceased; and upon being asked whether he had any opinion as to whether deceased was mentally competent to enter into a contract concerning his money, the witness declined to express any belief or conviction of incompetency. It would not be helpful to review the testimony or the claims of respective counsel more in detail. Each case of this character must be determined in the light of the facts established in that case. As noted before, the burden of proving incompetency was upon plaintiff. It is not sufficient merely to prove that there was opportunity to perpetrate a fraud, or that one of the parties to the contract was of less than average mentality. Nor is it of great importance that, as the situation subsequently developed, the contract seemingly worked more to the advantage of one of the parties than to the other. Had subsequent events taken a different course, an opposite result might have followed. The record before us is not such as justifies disturbing the determination of the trial judge on the issue of fact as to the mental competency of Timothy Downey at the time he executed the contract with defendant.
Appellant’s brief presents the question as to whether there was error in the ruling of the trial court that the testimony of Michael Siller was not barred by the statute (3 Comp. Laws 1929, § 14219) as being equally within the knowledge of the deceased. This objection was urged on the ground that defendant’s son acted as his agent, and therefore came within the terms of the statute. We think the trial judge was correct in holding that in the making of the controverted contract the testimony does not disclose that defendant’s son acted as his agent; and further, that in any event the statutory bar was waived by cross-examination of this witness.
The decree entered in the circuit court is affirmed, with costs to appellee.
McDonald, C. J., and Clark, Potter, Sharpe, Fead, Wiest, and Btttzel, JJ., concurred. | [
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Clark, J.
The facts are stated with reference to a drawing reproduced herewith. The upper black line marks the southern boundary of the Pere Marquette Railroad Company’s right-of-way. The lower two black lines marie the margins of the present State trunkline highway, M-21, assuming it to be 100 feet in width. The triangular piece of land lying between the southern boundary of the railroad and the northern margin of the highway is owned by plaintiff, Grand Rapids Gravel Company. The present center line of M-21 is not exactly the center line of the highway as it was before being paved and improved. The portion, G. H. K., in the apex of plaintiff’s triangular piece, was a part of the old highway and it is still highway.
Defendant William J. Breen Gravel Company owns land to the south of the highway. In its business of mining, selling, and shipping gravel, it desired to cross the highway tq the railroad right-of-way so that it might there load gravel into cars. It appears that it applied to the State highway department for permission to make an overhead crossing. The plaintiff was notified of hearing the application. Its president wrote the department objecting to an overhead crossing, and proposing an underground crossing instead. This was followed by an agreement between defendant and the State highway commissioner permitting and providing for the construction of an underpass, 1 Comp. Laws 1929, § 4022. The underpass is from defendants’ land to railroad right-of-way, across the highway and within it, as indicated by the drawing on the map. Within the highway the underpass is underground and under the pavement, and presents no obstruction to use of the full surface of the highway. Plaintiff filed this bill against said defendant and the other defendant, the builder, to restrain construction. The underpass has been completed. The bill was dismissed. Plaintiff has appealed.
That the railroad company is in accord with the attempt to give it this business in the manner proposed is not questioned.
It is unnecessary to review cases showing that necessities of progress and change have subjected highways and streets to many public burdens and uses not contemplated in former times.
We need not consider an argued difference in rights of an adjoining or abutting proprietor where he has the fee and the public the perpetual easement of highway, and where the public has the fee and the proprietor an easement. Generally in the cases a difference is accepted or assumed, but there is respectable authority that the difference is not substantial. Barney v. Keokuk, 94 U. S. 324; 3 Dillon, Municipal Corporations (5th Ed.), § 1124.
Whether the fee of highway or street be in the adjoining proprietors or in the public, many privileges, sometimes treated as ripening into rights, have been suffered to be exercised by the adjoining-proprietors, such as having steps, areaways, cellar ways, bay windows, hitching posts, carriage blocks, etc., in streets, and taking grasses or fruits, and planting- trees, etc., in highways. Ordinarily and in practical experience, such sufferance will continue or it will fade or vanish according to the necessities of public use.
In Opinion of the Justices, 208 Mass. 603 (94 N. E. 849), a question was certified:
“Is it within the constitutional power of the legislature to enact a law conferring upon a city or town within this Commonwealth the power to grant permits or privileges to private individuals to erect structures which will bridge the public streets connecting premises owned on both sides of the street?”
And answered:
“Yes, if the private individuals own all the land upon or over which the structures are to be erected.”
Yale University v. New Haven, 104 Conn. 610 (134 Atl. 268, 47 A. L. R. 667), is a leading case in which the right to bridge a highway is fully considered, with review of authorities. See, also, Kellogg v. Cincinnati Traction Co., 80 Ohio St. 331 (88 N. E. 882, 23 L. R. A. [N. S.] 158, 17 Ann. Cas. 242). And in People, ex rel. Mather, v. Marshall Field & Co., 266 Ill. 609 (107 N. E. 864, L. R. A. [N. S.] 1915F, 937, Ann. Cas. 1916B, 743), the defendant was permitted to construct and maintain, for the purpose of connecting its buildings on opposite sides of the street, large tunnels beneath the street.
In the case at bar, both adjoining proprietors on opposite sides of the highway may be said to favor, to consent to, the underpass, and the public, by the State highway commissioner, has consented. On the facts of this case, the matter would end here, but for the circumstance that plaintiff has the fee, subject to the perpetual easement of highway, of the tongue of land projecting into the highway and along the railroad right-of-way, and which tongue is crossed by the underpass, and, on this circumstance, the question is raised of the right to use the highway, including the part of which plaintiff has the fee, for the underpass.
Defendant, adjoining owner, has right of access to the highway. Eagle Township Highway Com’rs v. Ely, 54 Mich. 173; 29 C. J. p. 547. So has the railroad company. While an adjoining owner may not be entitled to access at all points, but only, as against the public, to convenient and reasonable access, 2 Elliott, Roads and Streets (4th Ed.), § 882, no question of such right of access can arise here, for the public, by the State highway commissioner, has consented to access at the points in question.
Defendant, exercising its right of access and in the enjoyment of the railroad company’s right of access, might carry its gravel by trucks or other vehicles across the highway and onto the railroad right-of-way.- This, the evidence shows, would necessitate crossing* the highway by truck every two and one-half minutes and would constitute a serious menace to traffic on this important trunkline highway. The highway is subject to the servitude at and on its surface. The burden upon plaintiff’s servient estate would be no greater if the same use were below grade. Constructing the underpass would tend to make the highway safe and convenient and to facilitate travel, and its sanction here is therefore within the public right.
No doubt the highway authorities may construct in the highways barriers, signs, warnings, safety signals and devices, and this within the right of public use. The action of the State highway commissioner in permitting this underpass is sustainable for the same reason, and it is no invasion of plaintiff’s servient estate in the highway. It is not for a private purpose. It is the control of adjoining-proprietors’ rights of access in the highway in the interest of public safety and convenience, and it theref ore is a public use of the highway.
Whether the State highway commissioner may require crossing at other than grade is a question not before the court, for here no more'is involved than permission granted on application.
Whether the gravel be taken through the underpass by truck or other vehicle or conveyor is not important.
Affirmed, with costs.
Potter, Sharpe, and Btjtzel, JJ., concurred with Clark, J.
Wiest, J.
(for reversal). I cannot concur in the opinion of Mr. Justice Clark.
I speak of the Breen Gravel Company as defendant. 1 Compiled Laws 1929, § 4022, gives the State highway commissioner no power to authorize an underpass on one man’s property for private use by another. Private interest is never a public requirement. Constructing a tunnel through land constitutes a taking. 1 Elliott, Hoads and Streets (4th Ed.), § 228. It is settled law in this State, as stated in plaintiff’s brief, that:
“The ownership of the fee of lands used for highway purposes remains in the owner of the property over which the way passes.”
The owner of the fee title has a right to use it and to enjoy the profits of.it, in any way not incompatible with the public enjoyment of the right of way. Clark v. Dasso, 34 Mich. 86; Campau v. Konan, 39 Mich. 362; Stretch v. Village of Cassopolis, 125 Mich. 167 (51 L. R. A. 345, 84 Am. St. Rep. 567); Bolender v. Southern Michigan Telephone Co., 182 Mich. 646; United States Gypsum Co. v. Christenson, 226 Mich. 347. So well is this right established in this State that the county drain commissioner cannot construct a drain, in whole or in part, along the public highway, without a release of rights by abutting owners, and the statute expressly says that the owners of the land abutting on the side of the highway along which such drain is proposed to be laid shall be considered as still owning the fee of such land. 1 Comp. Laws 1929, § 4139. The underpass is an appropriation of plaintiff’s soil and an additional burden thereon, and the owner of the fee is entitled to have the trespass enjoined. The defendant has established a private way under a public way. The public officer exceeded his powers in authorizing .defendant to construct a private way within the limits of the highway, and this is no less true because the private way is beneath the public way. In no sense is the underpass for highway use within the scope of the easement vested in the public. It is an additional burden upon the land, imposed by public officials for purely private use by a stranger to the title.
As said in Bradley v. Degnon Contracting Co., 224 N. Y. 60 (120 N. E. 89):
“To constitute a use public, it must be for the benefit and' advantage of all the public and in which all have a right to share — a use which the public have a right to freely enter upon under terms common to all. Public use necessarily implies the right of use by the public. The • character of the use, whether public or private, is determined by the extent of the right by the public to its use, and not by the extent to which that right is or may be exercised. If a person or corporation holds or possesses the use, the public must have the right to demand and compel access to or the enjoyment of it. The motive which led to the creation of the use is immaterial. * * *
“It was the private property of the defendants or one of them used exclusively for their private advantage and purposes. It is true its use facilitated and-progressed the completion. of a great public enterprise, but that fact, as we have already said, does not enter into the distinction between a public use and a private use. A lawful work cannot justify an unlawful expedient. ’ ’
The underpass is for exclusive private use, and there existed no more authority for its construction on that portion of plaintiff’s soil occupied by the public road than on any other portion thereof. Any incidental benefit to the public travel upon the surface highway cannot sustain violation of plaintiff’s legal rights. This passageway dispossesses plaintiff pro tanto.
Real property consists of something more than mere surface rights; its meaning and the rights appertaining thereto are found in the ancient maxim: “Gujus esi solum, ejus est useque ad coelum et ad inferos. The surface of the land is a guide but not the full measure, for, within'reasonable limitations, land includes not only the surface but also the space above and the part beneath.” Butler v. Frontier Telephone Co., 186 N. Y. 486 (79 N. E. 716, 11 L. R. A. [N. S.] 920, 116 Am. St. Rep. 563, 9 Ann. Cas. 858).
It is clearly established in this State that the abutting proprietor holds title in fee to the center of the public highway, subject to the easement for highway purposes. Mr. Justice Clark, in United States Gypsum Co. v. Christenson, supra. If the strip of the old road is ever abandoned, full possession will revert to plaintiff. Until abandoned, plaintiff’s rights, except for public use and for highway purposes, remain intact and cannot be appropriated by defendant for private use or convenience.
There is no merit in the contention of defendant that the amount of damage for the injury inflicted is too small to confer equity jurisdiction. Unpermitted invasion of premises constitutes a trespass guare clausum fregit.
“In trespass gibare clausum fregit, it is immaterial whether the quantum of harm suffered be great, little, or inappreciable.” Whittaker v. Stangvick, 100 Minn. 386 (111 N. W. 295, 10 L. R. A. [N. S.] 921, 117 Am. St. Rep. 703, 10 Ann. Cas. 528).
It is the province of equity jurisdiction to prevent a trespass upon lands.
As stated in 29 C. J. p. 550:
“Subject only to the public easement, an abutting owner has all the usual rights and remedies of the owner of a freehold, including trespass, ejectment, waste, action for damages, injunction, or an action to remove an obstruction, or abate a nuisance.”
The highway commissioner assumed the power to grant defendant the right to occupy space, for a private purpose, beneath the surface of plaintiff’s land, and when defendant constructed the underpass there was a taking of plaintiff’s land without compensation and without warrant of law. Under the law of this State, defendant could not acquire right to the underpass for its private purposes by condemnation. What it could not do by warrant of law, it is not permitted to do under assumption of power exercised by the State highway commissioner. The principle here involved is far-reaching. Cases may be found where an owner with land abutting both sides of the highway has been permitted to establish an underpass, but I have found no case authorizing such a way under circumstances such as in this case. The bill herein was filed during construction of the underpass, but defendant went on and completed the work.
The underpass violates plaintiff’s rights of property, and maintenance thereof should be enjoined.
The decree dismissing the bill should be reversed, with costs, and relief granted plaintiff.
McDonald, C. J., and North and Fead, JJ., concurred with Wiest, J. | [
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Fead, J.
This is a suit for rescission. Plaintiff had decree. Plaintiff owned a 12-family apartment in Detroit, which she had purchased for $100,000 in 1919 and afterward mortgaged for $60,000, of which $54,500 remains unpaid. She paid the mortgage instalments until October, 1931, when she was able to pay only the interest. There was talk of foreclosure and plaintiff wanted to sell the property. She answered an advertisement of defendants, who were in the business of dealing in real estate, and, after some negotiations which she claims began with her offer to sell for $10,000 and defendants say commenced with $2,500, she agreed to sell for $1,000. She claims that an essential of the transaction was that defendants were to pay taxes and instalment due, put the mortgage in good standing, and assume its payment so she would be relieved of liability.
The parties met in the office of defendants’ attorney to close the deal. Because of the decision in American Trust Co. v. Casselman, 248 Mich. 76 (which afterward was abrogated on rehearing), defendants’ attorney had prepared and presented to plaintiff an agreement that in event of foreclosure she would not take action for appointment of a receiver. Plaintiff claims she did not understand the instrument, that the attorney said it was a mere formality, and so she signed it. He also prepared a quitclaim deed, which she executed. It did not contain an undertaking that defendants assumed and agreed to pay the mortgage.
Defendants took possession; plaintiff still occupying one of the apartments. Defendants had some negotiations for a second mortgage and also with the mortgagee regarding the delinquency, but nothing came of them. -They did not pay the taxes or sums due on the mortgage. Upon plaintiff’s inquiry regarding the situation, they said they had assumed nothing and were under no obligations to pay taxes or mortgage. On February 16, 1932, plaintiff filed this bill for rescission.
The testimony was in direct conflict, and the chancellor had a distinct advantage in being able to view the witnesses, because their credibility is a controlling consideration. The testimony justifies the findings of the court, which we set up in part:
“In the opinion of the court, the entire transaction shows that the minds o'f these parties never really met when the quitclaim deed and exhibit one (agreement regarding receivership) were drawn, that Mrs. Dirr was expecting and anticipating that the defendants were going to assume the mortgage and pay up the past-due indebtedness, while the defendants, through their actions and manipulations, did not intend so to do at that time, but were merely getting her equity of redemption to get possession of the premises and never intended to assume the mortgage or pay up the past-due indebtedness, but were just getting the building to get what money they could out of the same.
“The defendants raise the question that there is no fraud in this transaction, and all that they promised to do were mere representations of future promises. The court does not so view the situation, but as stated in Becker v. Illinois Life Ins. Co., 227 Mich. 388, at page 392, the first part thereof, this case at ■hand is applicable to the wording as follows: ‘Representations though promissory in character but which are made in bad faith and as a part of a scheme to defraud, or where the fraud is partly by false promises and partly by false representations of facts, ’ a rescission of a contract may be had.
“Also Schupp v. Davey Tree Expert Co., 235 Mich. 268; Baas v. Zinke, 218 Mich. 552; Meade v. Brown, 218 Mich. 556.
“I think this case falls •within the line of cases set out in the Meade v. Brown Case.
“It is further objected that any prior promises were merged into the written agreement, but I think the plaintiff in this case had a right to go into the entire transaction and show that the minds of the parties never met and that she has been tricked out of her property.”
The combination of fraud and mistake so found warrants rescission under the authorities cited.
Decree affirmed, and cause remanded for accounting of rents provided therein. As plaintiff filed no brief, she will not have costs in this court.
McDonald, C. J., and Clark, Potter, Sharpe, North, Wiest, and Btjtzel, JJ., concurred. | [
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