author: Blair, J.

text:
    AUDITOR GENERAL v. CRANE.
    1. Drains — Establishment—Irregularity—Effect.
    Where a landowner has had actual notice of the proceedings to restore a drain and has waived any objections to the drain crossing his land if the line of the old drain is followed, which is done, and the statutory notice of the letting of the contract, assessment district, etc., has been given, no constitutional right of his has been invaded, and he cannot successfully resist the sale of his land for nonpayment of the special assessment, though the drain commissioner did not properly record the proceedings.
    2. Same — Default of Drain Commissioner — Effect—Remedy.
    The non-filing of the papers in a drain proceeding by the commissioner does not deprive a landowner of his remedy, since upon discovering that the commissioner has not complied with the statute he may obtain a review of the proceedings upon the common-law writ of certiorari.
    3. Same — Remedy—Mandamus.
    Where a drain commissioner fails to file the papers in a drain proceeding he may be compelled to do so by mandamus in order to lay a foundation for the statutory writ of certiorari.
    Appeal from Van Burén; Des Voignes, J.
    Submitted February 18, 1908.
    (Docket No. 18.)
    Decided March 31, 1908.
    Petition by James B. Bradley, auditor general, against Edgar A. Crane for the sale of land delinquent for taxes. From a decree for petitioner, defendant appeals.
    Affirmed.

      jRussell M. Chase, for petitioner.

      A. Lynn Free, for defendant.
   Blair, J.

Appellant, Edgar A. Crane, appeals from the decree of the circuit court for Van Burén county ordering sale, for delinquent taxes, of the north quarter of the northeast quarter of section 22, town 3 south, of range 14 west, belonging to appellant, and overruling appellant’s objections to said sale.

The drain proceedings were commenced August 1, 1901, by an application to John Hathaway, county drain commissioner, for cleaning out, deepening, widening, straightening, or extending a drain known and designated as “the Three Mile Lake and Jenning’s Drain.” The application sets forth that:

“ Said drain needs cleaning out to a point where said drain intersects a natural watercourse across the south one-half of the northwest one-quarter of section 23, said township, thence following said natural watercourse far enough on the north one-half of southwest one-quarter of said section to furnish sufficient fall to carry off the water. That such cleaning out of said drain is a necessity by reason of the same having become filled up.”

The first order of determination-in the matter of the extension of Three Mile Lake and Jenning’s Drain purports to have been made by John Hathaway, county drain commissioner, on September 4, 1903. This order recites an application bearing date September 4,1903:

‘‘ For the location of a certain drain therein as follows, to wit: Said Three Mile Lake and Jenning’s Drain needs cleaning out to a point where said drain intersects the natural watercourse across the south one-half of the northwest one-quarter of section 23, said township, thence following said natural watercourse far enough on the north one-half, southeast one-quarter, said section, to furnish sufficient waterfall to cary off the water,” etc.

The order determined that “ said proposed drain is necessary and conducive to the public health,” etc.; that the application should be granted and the drain located in accordance with the survey, etc.; “And I do further order and determine that the name of said drain shall be the ‘Three Mile Lake Extension Drain,’by which name it «hall hereafter be known and recorded.”

On the 4th day of August, 1904, copies of notice of letting the drain contract were posted in “five public places in said township to be traversed by said drain mentioned in said notice.” The notice specified that the drain commissioner would receive bids on the 15th day of August, 1904, at the outlet of the drain, at ten o’clock a. m., and contained the statutory requirements as to announcement of assessments of benefits, review, etc.

The drain commissioner testified:

“ I remember that I did not get all of the releases. I started condemnation proceedings in the probate court. The judge told me he could not appoint commissioners because in the cleaning out it was not necessary. . * * * I caused notice of letting the contract to be published. The paper shown me, exhibit C, is one of the notices. * * * The notice to let I helped serve. Exhibit C is one of those notices. * * * One of those notices was served on the parties interested who has land the ditch went across, if they were in the township. I did not serve one on Mr. Crane and did not cause one to be served on him. On the 15th of August I met at the outlet of that drain. It is on Wess Young’s land. Where the outlet was would depend upon where the surveyor originally stopped. I could not tell you exactly where that was. I do not know where that was. I did not know where that was at the time I posted these notices, nor where the original survey was; nor I do not think anybody else does. *» * *

“Q. Did Mr. Ridgley dig the ditch according to that contract ?

“A. No, sir.

“Q. How was it dug?

“A. Well, I relet it. I re-advertised by posting notices but not in paper. I posted notices that I would relet the contract, but did not serve a copy of any notice on those parties interested. The contractor dug some and then he gave up the contract. When I relet the contract to somebody else I have forgotten as to whether I relet it at the same price that I let it to Mr. Ridgley. The papers should tell all in regard to that. I took a written contract from the man that I let it to the second time. It should be here. I cannot tell whether I relet it for more or less. * * *

“Q. Do you know where the files of what you call the Three Mile Lake and Jenning’s Drain are ?

“A. I wish I did. There is no record of them whatever that I could find in any of the record books. I do not know that there ever was a legal drain laid out by that name, only from what I have heard. I could not find any record of one. * * * Well, now you will understand or you know that there was a misunderstanding here and we went ahead and cleaned this drain out. I went to see you (defendant Crane) to get a release of the right of way, and you said you would have no objection if it would go into the old drain, and when I went to the probate court to get this application for special commissioners I found that it only called for a clean-out and an extension of the lower end. That is what we went by.

“Q. Then you did not go by your survey stakes at all ?

“A. Well, in a way, yes, but across your particular parcel of land I saw that we followed the old drain exactly. The survey stakes did not follow the old drain and in crossing your land we did not go where the survey stakes were. * * * When I relet the contract I did not follow the survey stakes. It was practically finished up to the Decatur road when I relet it. We followed the old drain on your land.”

Defendant Crane, who is not a resident of Van Burén county, testified that the drain commissioner applied to him on May 16, 1904, for a release of the right of way of the drain:

“The present drain commissioner asked me if I would sign a release for the right of way for what he then said was the laying out of a drain across this land to be known as the Three Mile Lake and Jenning’s Drain. At that time he had with him printed papers, which purported to be survey notes of the Three Mile Lake and Jenning’s Drain and which I notice is a copy of one of the exhibits filed by him with the county clerk last Saturday and was identified as Exhibit —, as testified to by the county clerk. He presented me a paper which purported to be a release of the right of way for establishing the proposed drain. The paper marked Exhibit — in those deposited by him in January, 1907, and now here produced by the county clerk is that paper. I refused to sign the paper or to give any release of the right of way across the property for the purpose for which he asked for it, and I never have. The next that I knew about any drain on this land in question I learned from some one that there had been a ditch dug across my land. I came to Paw Paw, went to the county clerk’s office to see what authority any one had for digging such a ditch, and I could find no record of any. Several times since then X have examined and have had the county clerk examine the records and files where such papers, according tci law, should be kept in his office and was unable to find any such papers or any record of any such drain, and the clerk was unable to find them and told me there never had been any such paper filed or deposited with him. I ■ also examined in the said clerk’s office and had him examine, three or four times at least within the last three or four years, for records or files pertaining to the drain which has been referred to here as the Three Mile Lake and Jenning’s Drain. I was unable to find any record or proceeding, and the clerk was unable to find any pertaining to any drain known as the Three Mile. Lake and Jenning’s Drain.

“ I can’t tell when I first visited my premises after the digging of this ditch. When I did first visit them the ditch was completed. I went and saw the ditch where it came off my land, but did not go the whole length. So far as I know, it was completed then. X cannot tell how long after I had the talk with Mr. McElheny before I visited my premises, but it was not until after some one informed me there had been a ditch dug across my property. Mr. McElheny came to my office in regard to releasing the right of way. He presented me a paper purporting to be a release of the right of way. He told me he was going to dig a ditch, if he could get the right of way; that is what he said. I think he said he had secured a number of rights of way. I did not state to him that if he was going to follow the line of the old ditch I did not know whether X would have any objection. The conversation with him was on the 16th day of May, 1904. That was before the ditch was dug.”

The appellant filed 30 specific objections to the relief prayed for and, among others, the following:

Thirteenth. He did not give notice of the description and the time and place of letting the contracts for building such drain, as required by law.

Fourteenth. He did not, at the time and place noticed to review the. premises, offer and hear proofs, reconsider and review the premises affected by said drain, define and equalize the benefits, as required by law.

‘ ‘ Fifteenth. He did not, before receiving bids for letting said drain, or at any time, determine and announce the benefits, or per cent, of tax to be spread for constructing the drain, nor when it should be collected, as the law requires. * * > *

Eighteenth. He did not ápportion the per cent, of cost of construction of said drain to the township and to each parcel of land and announce the same at the time and place of letting the contract, as provided by law, and give notice of the apportionments as made by him.”

The circuit judge overruled the objections and entered a decree as prayed for.

The defendant and appellant, having had actual notice of the proceedings, having waived any objections thereto, if the drain commissioner followed the old drain on his land, and the statutory notice of the letting of the contract, assessment district, etc., having been given, no constitutional right of his has been invaded, and the case is ruled by Crandall v. McElheny, 146 Mich. 191; Auditor General v. Bolt, 147 Mich. 283.

The non-filing of the papers by the drain commissioner did not deprive appellant of his remedy. Upon discovering that the drain commissioner had not complied with the statute, he could have obtained a review of the proceedings upon the common-law writ of certiorari. Loree v. Smith, 100 Mich. 252; Moore v. McIntyre, 110 Mich. 237; Township of Blumfield v. Brown, 130 Mich. 504.

The drain commissioner might also be compelled, by mandamus proceedings, to comply with the statute to lay a foundation for the statutory writ of certiorari.

The decree is affirmed.

Grant, 'C. J., and Montgomery, Ostrander, and Moore, JJ., concurred.


source: Caselaw Access Project

author: Montgomery, J.

license: Public Domain

text:
    DODGE v. LANSING & SUBURBAN TRACTION CO.
    1. Corporations — Secretary — Appointment — Right to Compensation.
    Where the by-law of a corporation directs that the hoard of directors shall “appoint” a secretary, who shall hold his office at the pleasure of the board and receive such salary as the board may determine, the fact that the resolution naming the secretary purports to “elect” him “for the ensuing year” does not affect his right to compensation under the by-law.
    2. Same — Neglect of Directors.
    The neglect of directors to fix the compensation of the secretary as directed by a by-law does not affect his right to recover reasonable compensation for his services.
    3. Same — Right to Compensation.
    Where, at the time of performing certain services for a corporation in addition to his duties as secretary, plaintiff intended to exact pay therefor, and under all the circumstances, the corporation or its agents as reasonable men should have understood that plaintiff was not rendering such Services gratuitously but with the expectation of being paid for the same, he was entitled, in the absence of any defense, to recover compensation.
    4. Same —Expectation as to Compensation — Evidence — Sufficiency.
    In an action against a corporation by the secretary of its predecessor to recover for services performed, evidence examined, and held, to show that such services were not performed with the expectation of receiving pay from the company but with the expectation of receiving pay from another source.
    5. Same — Estoppel.
    Where plaintiff was present and participated in a meeting of stockholders at which the vote was taken to transfer the assets of the corporation of which he was secretary to defendant corporation, defendant to assume the indebtedness of the transferring corporation, and the question of the amount of indebtedness was under discussion, and plaintiff made no claim that the company was indebted to him for his services as secretary, he was estopped to make such a claim after the transfer was consummated.

      Error to Ingham; Wiest, J.
    Submitted February 18, 1908.
    (Docket No. 23.)
    Decided March 31, 1908.
    Assumpsit by Frank L. Dodge against the Lansing & Suburban Traction Company for services rendered. There was judgment for plaintiff, and defendant brings error.
    Reversed.

      Moore, Brown, Miller & Ladd (Walbridge & Kelley, of counsel), for appellant.

      Black, Beasoner & Hayden (B. H. Person and Thomas, Cummins & Nichols, of counsel), for appellee.
   Montgomery, J.

In the year 1897 a corporation known as the Lansing, St. Johns & St. Louis Railway Co. was organized for the purpose of constructing an electric railway from Lansing to St. Louis. The plaintiff was one of the incorporators, and other residents of Lansing and along the line of the proposed road were also concerned. The company’s general office was in the city of Lansing, and the plaintiff was secretary. But a small amount of the capital stock was paid in, and the testimony tends to show that while the plaintiff and the other officers of the company devoted some time' to the enterprise, little progress was made beyond securing rights of way. Negotiations were had with Mills, Percival and Norris for the construction of the road from Lansing to St. Louis, but before an agreement was consummated, it was arranged that the corporation should be reorganized. It was agreed, in the reorganization, to issue double the amount of capital stock which had been subscribed by each stockholder and to issue the same fully paid, in consideration of the services performed by the parties. Under this arrangement, the plaintiff received $7,200 par value of stock. The plaintiff was a member of the board of directors chosen by the new company, and was also elected secretary. As the testimony tends to show, he not only performed the duties of secretary, but from time to time, and during the entire period prior to the sale by the second Lansing, St. Johns & St. Louis Railway Co. to the Lansing & Suburban Traction Co., hereinafter referred to, rendered services which were claimed, and which the jury found, fell outside the scope of his duties as a director or secretary for the corporation, of considerable value.

This action is brought by the plaintiff to recover compensation for his services as secretary, and also for extraordinary services falling outside the scope of his duties as secretary and as director of the corporation, for the period from the time of the organization of the first Lan-i sing, St. Johns & St. Louis Railway Co. to the time of the sale by the second Lansing, St. Johns & St. Louis Railway Co. to the defendant company.

On the trial of the case, the circuit judge withdrew from the consideration of the jury the plaintiff’s claim for compensation for services to the first company, upon the ground that in the reorganization and the issue of fully paid stock to him, such services had been compensated. The questions in this case, therefore, on this hearing, relate to the plaintiff’s claim for services rendered to the second company.

His right to recover compensation for services as secretary rests upon section 1 of article 2 of the by-laws of the company, which reads:

“The board or directors shall manage and direct the business and property of this company and shall choose by ballot from their members a president and vice-president and shall also appoint a secretary, a treasurer, a general manager and such other officers and agents as they may deem advisable and who shall receive such salaries as the board of directors may determine. Such appointed officers shall hold their positions at the pleasure of the board of directors.”

The contention is made by the defendant that inasmuch as the plaintiff was elected to the office of secretary for the ensuing year, he was not appointed under the terms of this by-law, the contention appearing to be that, as he was not appointed to hold the position at the pleasure of the board of directors, he did not come within the bylaw. It may be that it was within the power of the board of directors to vacate the office at any time. In other words, the by-law may have been paramount. But this in no way affects the fact that he was elected as secretary of the company and acted as such. There is no force in the contention that the mere use of the word “elected” in place of the word “appointed” in the resolution naming the plaintiff for the office affects his rights in any way. It might be suggested -that, as the directors did not fix the compensation, they had not acted under the by-law. This precise question was before the court in Rogers v. Railway Co., 22 Minn. 25, and it was there held that the failure of the directors to perform their duty in fixing compensation does not deprive the officer performing the service of his right to compensation, and that in the absence of action by the board, he is entitled to recover a reasonable compensation for his services.

It is argued with some force that the services which the plaintiff rendered were rendered as either a secretary or as a member of a committee, and that for this reason he is entitled to recover no additional compensation over and above the value of his services as secretary. It would extend this opinion to too great length were we to attempt to discuss the testimony which bears upon the question of whether the plaintiff rendered extraordinary services in the expectation of being compensated and with the expectation on the part of the officers of the company to pay for the services. The court charged the jury upon this question in brief that if from April 10, 1900, to March 22, 1904, and at the time he performed the same for the company, plaintiff intended to exact pay for these services, and that, under all the circumstances, the company or its agents as reasonable men should have understood that Mr. Dodge was not rendering the same .gratuitously, but with the expectation of being paid for the same, he would be entitled, in the absence of any defense, to recover such compensation. We think no error was committed in this instruction. The language of the instruction is substantially that employed by the Federal Supreme Court in Fitzgerald & Mallory Construction Co. v. Fitzgerald, 137 U. S. 111, approved in Felton v. Mining Co., 16 Mont. 81, and recognized as the correct rule by this court in Henry v. Benevolent Ass’n, 147 Mich. 142.

Certain documentary evidence appears in the case which bears upon the question of whether, during the period covered by plaintiff’s charges which he recovered, the services rendered were rendered in expectation of receiving pay from the company or whether the plaintiff expected his pay from another source. The road was to be constructed by Mills, Percival and Norris, but on the 24th of April, 1900, a letter in the form of a proposal was addressed to Frederick Thoman, Jacob Stahl, and plaintiff, which stated:

“ Whereas, under tne conditions of a certain proposition made by the undersigned to the Lansing, St. Johns & St. Louis Ry. Co., you as representing that company agreed to raise a bonus of $100,000 which said moneys were to.be turned over to the undersigned to be used in the construction of said railway; and whereas it was the understanding and agreement between the undersigned and yourselves that the $50,000 of said moneys was to belong to and be the property of the undersigned and the other $50,000 was to belong to you for the same consideration passing to the undersigned, we do therefore hereby agree that the provision in said proposition made by us and accepted by you relative to the transfer to us of 60 per cent, of the capital stock of the Lansing, St. Johns & St. Louis Railway Co. may, for the purpose of securing to you the return of $50,000 of the said $100,000 bonus be modified as follows

Here follows a provision for deposit for security, and then the proposition proceeds:

“ That we will, out of the proceeds of the sale of bonds to be issued by said corporation, repay to you the sum of $50,000 if the said bonus of $100,000 shall have been turned over to us, but in the event of your proceeding on the payment .to us of a sum less than $100,000 we shall only be required to repay to you the difference between the amount so turned over and $50,000.”

On the 2d of June, 1900, after the Lansing, St. Johns & St. Louis Railway Co. was fully reorganized, an agreement between the Lansing, St. Johns & St. Louis Railway Co. and Mills, Percival and Norris as contractors was entered into. By the terms of this contract, the contractors agreed to begin construction of the work, furnish the labor, material, etc., and to complete the same before November 15, 1901. The company agreed to secure the right of way and easements, and also to deliver to the contractors the sum of $100,000 in cash as follows:

“Thirty-five thousand dollars when the first ten miles of the track is constructed; thirty-five thousand dollars when the second ten miles of the track is constructed, and the remaining thirty thousand dollars when a total of twenty-five miles of track shall have been constructed.”

It also provided that the contractors might demand and receive 60 per cent, of the total capital stock of the company, and that the issue and transfer of the stock upon the books of the company should be made, and the contractors were invested with authority to bond the road for the sum of $25,000 per mile, such bonds to be delivered to the contractors in part consideration for the construction of the road, the contractors to have entire charge of issuing, negotiating, and disposing of the bonds.

Following upon this, and on the 22d of August, the following proposition was addressed to Thoman, Stahl, and Dodge:

“Whereas, under conditions of a certain proposition made by the undersigned to the Lansing, St. Johns & St. Louis Ry. Co., you as representing that company agreed to raise a bonus of $100,000, which said moneys were to be paid to the undersigned to be used in the construction of said railway, and whereas, it was the understanding and agreement between the undersigned and yourselves that but $55,000 of said money was to belong to and be the property of the undersigned and the balance of $45,-000 was to be returned to you for certain considerations, passing to the undersigned and other valuable consideration received, we do therefore' hereby agree to secure to you at the time it is paid. to us the return to you of all moneys or stock to be used for bonus purposes in excess of $55,000 cash which may have been paid to us by the Lansing, St. Johns & St. Louis By. Co. in accordance with our contract with them. We further agree that the said amount over and aboye said $50,000 to be returned to you, $50,000 to be returned to you as aforesaid, shall be paid to you out of the proceeds of the sale on bonds on completion of contract, November 1,1901,' which bonds are to be issued by said railroad company, it being understood that whatever cash is advanced to us in excess of $55,000, together with whatever stock is needed to make up the said $100,000, shall be returned or refunded to you as hereinbefore provided for. Furthermore, we agree that you shall be-of trustees for collection and paying over of the $100,000, said trustees are expected to take whatever action may be necessary by suit or other means, to secure and recover payment of all stock subscriptions or bonus notes.”

On the trial of this case the plaintiff testified that he construed this agreement to have been made on behalf of the railroad company, but on the trial of the case between the plaintiff and the Lansing, St. Johns & St. Louis Railway Co., in 1902, the plaintiff testified as follows:

Q. Your statement in response to Mr. Ostrander that there was an understanding that you three gentlemen would have $45,000 or a certain amount of money?

“A. Well, that was a proposition emanating from John E. Mills and Edward F. Percival and Frederick C. Norris, in which they agreed to pay us, Stahl, Thoman and Dodge, $15,000 each out of the sale of the bonds when made.

Mr. Ostrander: Is that in writing.

“A. Yes, sir.

“ Q. Have you got it ?

“A. I have.

Mr. Ostrander: I suggest you produce it and not testify to anything that is in writing.

Q. Have you got the writing here ?

“A. Yes, sir.

Q, Will you produce it?

“A. Yes, sir.

“ Q. What is the date of that agreement made by Mills, Percival and Norris ?

“A. August 22, 1900.

Q. Read that.

‘A. That is not the proposition that was originally made by Mr. Mills.

Q. Well, read that (reading).

' ‘1 The Court: That has been read.

Q. Now can you tell us what the other valuable considerations were that you referred to in this agreement made by these parties, the paper itself does not tell what the consideration was, can you tell ?

“A. Well, I will read it, $55,000 of said money was to belong to and be the property of the undersigned, and the balance, the $45,000, was to be returned to you for certain conditions passing to the undersigned and other valuable considerations received, that is all part of the question.

“A. Originally, Mr. Mills made a proposition in which he placed the 60 per cent, of the stock in the hands of trustees as security from him and his associates for the carrying out of his propositions to Stahl, Thoman and myself, and afterwards he came to us and suggested he had made a mistake, or that the putting up of the stock placed the matter in such shape that it would cripple him in his negotiations, and then he made a proposition, that arrangement I think was for $50,000 in bonds or in money, whichever it may have been originally, and that the amount should be a lesser sum than that one, you see that proposition was for $50,000 bonds.

Q. What was to be done with the bonds ?

“A. When the sale of the bonds were made or the bonds were to be issued to us,—

Q. What do you mean by that ?

“A. To Thoman, Stahl and myself that we should have for the work and the amount we had put into the enterprise as well as the money we had spent and the effort and work that we might put into the enterprise if it was carried out according to the contract that he would pay us that sum as our share for the interest in the entire enterprise.

Q. What sum, $50,000 in bonds?

“A. $50,000 either in bonds or money, and we would hold the 60 per cent, of stock for the carrying out of that and then he came to us and insisted that we ought to let him off in that connection and finally we consented to do it, Mr. Stahl and Thoman and myself, and then he wanted the amount that we were to haye for our part in the enterprise, fixed at $40,000, and he insisted upon it, and finally Mr.- Thoman was willing to grant it, and Mr. Stahl refused, but finally Mr. Stahl consented that we would return the stock to him or at least give him the other stock, and issue it to him so that he could have the benefit of it, and he made this arrangement and that is in his handwriting, the proposition to us and gave that to either one or the other of us, it was filed away in my safe or in the hands of Mr. Stahl at first and afterwards it came to me.

Q. Well, about when was this conclusion finally reached about the date of this instrument, August ?

“A. Well, we released the stock and everything about that time we had the control of the stock absolutely under the arrangement we made under the proposition or was to have it.

Q. Then so far as the $100,000 was concerned or whatever might be collected so far as these subscriptions were concerned that was to be turned over absolutely to them?

“A. Every dollar of it was to be turned over to them except that we were not to lose sight of the fact of the representations that had been made to the others when they went along with the road that was to be turned over exactly in accordance with the agreement, and I will say in that connection that I myself was desirous, more so than the other gentlemen, perhaps, of enforcing some collection and turning it over. I wanted to get my part of the forty or forty-five thousand dollars, as soon as possible, and I urged the turning of. it over, but Mr. Thoman insisted it should not be turned over, — that we could not do that as we would be held accountable by the subscribers in Lansing, and of course I acquiesced in their judgment about it, and that the realizing of anything under that proposition of Mr. Mills was depending upon the money being collected here and St. Louis and until that was done there wasn’t anything that the trustees could do until that was raised, but the — it provided that the road should be built on 1st day of November, 1901, but we settled with —either under the sale of the bonds, or otherwise, but the hundred thousand dollars or anything below that or about that all of it was to be turned over to Mr. Mills.

Q. And this was simply the amount that you gentlemen were to realize and all that you were to realize out of this business ?

“A. Out of the entire work from the beginning to the close that was the only possible payment that these gentlemen were to receive other than the 72 or 8 or 4 hundred dollars of stock that they had in the road as had been referred to here. That is to say that was all that was to be received so far as any agreement there provided for.”

Mr. Thoman on that occasion gave similar testimony. It appears without dispute that the agreement of August 22d was received by Mr. Dodge and filed away, and there is no doubt that Mr. Stahl and Mr. Thoman were made acquainted with its contents, and whatever was done thereafter, by either of the three was done with the understanding that that obligation was in force and binding upon the contractors.

It was the contention of the plaintiff on this trial that this contract of August 22d was a contract made on behalf of the railroad company. We cannot so construe the contract. It refers in terms to a previous agreement with the railroad company in which the company had agreed to transfer $100,000 in cash to the contractors, and it refers to the understanding and agreement between Tho-man, Stahl, and Dodge and the contractors that but “$55,000 of the money was to belong to and be the property of the contractors, and that the balance was to be returned to you (the parties addressed) for certain considerations, passing to the undersigned, and other valuable considerations received.” There can be no mistaking this language. If the contractors were to receive but $55,000 from the company, it was idle to make provision for turning over $100,000 and then turning back $45,000 to the company. There was no consideration “ passing to the undersigned ” or other valuable consideration received by the contractors from the company. There is no room for mistaking the tenor of this proposition. The circuit judge entertained this view, and charged the jury that if the proposition was accepted by Mr. Dodge and the other parties to it, it became a contract, and that acting under it would constitute an acceptance and make it a contract. He added:

“If this proposition made by Mills, Percival and Norris to Mr. Dodge and to Stahl and Thoman was accepted, did it provide for compensation to Mr. Dodge for any of the services he asks pay for from the defendant in this case ? If it did then to that extent Mr. Dodge had an express contract for his services and the pay therefor, and he cannot upon failure to realize under that arrangement hold defendant upon the theory that he looked to the Lansing, St. Johns & St. Louis Railway Company for pay as upon an implied contract.”

We discover no suggestion in the record of any purpose of this contract or agreement to turn over $45,000 to these three gentlemen other than the one which the ^plaintiff stated in his testimony on the trial of the former case, namely, that it was to compensate Thoman, Stahl, and himself for the work and the amount they had put into the enterprise, as well as the money spent and the effort and work that they might put into the enterprise if it was carried out according to the contract, and that it was to be paid as their share for interest in the entire enterprise.

Defendant preferred a request on the trial as follows:

“If you find from the evidence in this case that the ount of the indebtedness of the Lansing, St. Johns & St. Louis Railway Company was discussed and talked over by the stockholders of said company, in the presence of Mr. Dodge, at its meeting held March 9, 1904, when it passed a resolution to sell and transfer its property to the Lansing & Suburban Traction Company, and that the amount and items of said indebtedness was stated as that represented by the bonds amounting to the sum of five hundred thousand dollars and the indebtedness of the company under its contract of construction with Mills, Percival and Norris, and Mr. Dodge made no claim for services at that time, but remained silent, without stating to the said stockholders.that he had a claim for services rendered by him in behalf of the company, as attorney and agent and for extraordinary services and for services as secretary of the company, he cannot now recover in this case for the reason that the silence misled the stockholders and incorporators of the Lansing & Suburban Traction Company, who were about to take said property subject to the indebtedness . of the Lansing, St. Johns & St. Louis Ry. Co., and he would now be estopped from asserting such a claim.”

Myron W. Mills, who was one of the incorporators of the defendant company, was also a stockholder in the second Lansing, St. Johns & St. Louis Railway Co., testified that he was present at the meeting of the stockholders of the Lansing, St. Johns & St. Louis Railway Co. when the vote was taken to transfer the assets to a corporation to be organized, and that a few days later, on March 1904, he was present when the board of directors passed resolutions in accordance with the resolution of the stockholders providing for a transfer of the property to the defendant company. He testified that plaintiff was there, that he at the time made no claim of any indebtedness due him, that he had not understood that the plaintiff was performing services as an attorney, agent, or in any other capacity with the expectation of pay, except such as he might get as one of the promoters of the enterprise. He also testified that at the meeting of the stockholders the debts were discussed, and that it was said that the only debts of the company were its bonds and the contract with the contractors, Mills, Percival, and Norris, for the construction, and that 'Mr. Dodge, being present at the time, did not dispute the statement, and made no statement that he had any claim against the company. Similar testimony was given by Mr. Elliott, another stockholder in the defendant company, who testified that he had no knowledge that plaintiff had any claim against the company.

We think, in view of this testimony, the instruction asked was clearly proper. It is true that plaintiff voted against the transfer of the stock, but he was in a position where he knew there was under discussion the question of the extent of the liabilities of the corporation, which liabilities, under the agreement between the two companies,' the defendant company agreed to assume. It is obvious that if he kept silence when it was asserted in effect that he had no claim against the company, the defendant was being misled as to the extent of the obligation which it ostensibly took upon itself. A clearer case of one remaining silent when he should have spoken it is difficult to conceive. The obligation to speak in such a case arises out of natural justice, and if the case is made as stated by the testimony of the witness quoted, the plaintiff ought not to be permitted to recover of the defendant upon the theory that it assumed an obligation to pay his claim, a claim which was in his presence expressly disclaimed, and without dissent from him. See Hughes v. Tanner, 96 Mich. 118; Miller v. Ross, Bradley & Co., 107 Mich. 540.

It is suggested that the defendant was not a. bona fide purchaser, and that it parted with nothing valuable nor acted to its prejudice. It is clear that they did take upon themselves the responsibility of assuming indebtedness of a half million of dollars secured by the bonds and also the unsecured indebtedness of the company. The contention that the defendant company was not a bona fide purchaser is not amplified, but if what is meant is that its officers were not deceived by the plaintiff’s silence when he should have spoken, the testimony above quoted is a sufficient answer to the contention.

For the errors pointed out, the judgment will be reversed, and a new trial ordered.

Grant, C. J., and Blair, Hooker, and Moore, JJ., concurred.


text:
    MARKLEWITZ v. OLDS MOTOR WORKS.
    1. Master and Servant — Personal Injuries — 'Trial — Instructions — Sufficiency.
    Where, in an action by a minor servant for injuries received while shaping up a piece of wood on a jointer, the declaration is broad enough to permit recovery in case the work in which plaintiff was engaged was work in which he was expected to make use of the machine in question, and might naturally be expected to resort to the use of such machine, if there was a failure of duty in giving him proper instructions, and there is testimony upon which a recovery upon that theory may be had, instructions are erroneous which confine the plaintiff’s case to the single claim that he was ■ specifically set to do the particular piece of work.
    2. Same — Instructions—Effect of Testimony.
    The testimony of defendant’s foreman being' fairly open to the construction that plaintiff was expected to make use of the machine, and that it was for that reason he was cautioned it was a dangerous machine, it was error in stating defendant’s claim to the jury to state that defendant denied that plaintiff was ever authorized to use the machine, but on the contrary had been expressly forbidden.
    3. Same — Duty of Servant — Nature of Employment — Question for Jury.
    Whether plaintiff, from the nature of his employment, might fairly have understood he was expected to make use of a certain machine was a question for the jury.
    4. Same — Duty to Instruct Servant.
    If, from the nature of his employment, a servant might fairly have understood that he was expected to make use of a certain machine, the duty of proper instruction was imposed upon the master.
    5. Same — Propriety of Instructions.
    It is the duty or an employer, before setting an inexperienced employe at work upon a dangerous machine, to explain to him its mode of successful operation, its dangers to the unskilled, and the care and attention demanded from its operator; the degree of instruction to be given depending upon the age and experience of the servant and the dangerous character of the machine he is directed to operate.
    6. Same — Apprehension op Danger. •
    In an action by a servant for injuries received while operating a dangerous machine, the jury were properly instructed that it was a question for them whether, if the plaintiff was directed by the foreman to operate the machine but was not instructed about its use, he knew enough about the machine to apprehend and appreciate the danger likely to arise from its use by him, or whether the danger from its use was obvious to a boy of his age and experience, and if it was, that his own negligence would be a bar to recovery.
    Error to Ingham; "Wiest, J.
    Submitted January 17, 1908.
    (Docket No. 80.)
    Decided March 31, 1908.
    Case by John A. Marklewitz, by next friend, against the Olds Motor Works for personal injuries. There was judgment for defendant, and plaintiff brings error.
    Reversed.

      Frank L. Dodge and John J. Zimmer, for appellant.

      Bollin H. Person, for appellee.
   Montgomery, J.

This is an action to recover damages for personal injuries received on account of the alleged negligence of the defendant. The declaration is in two counts, each averring that plaintiff, when at the age of 16 years, and without experience in the business, was employed by the defendant for the purpose of learning the trade and business of pattern maker. The first count avers that he entered the employment of the defendant on the 3d of February, 1905, and that he was called by the defendant’s superintendent or foreman to.operate a machine known as a jointer, which is a machine with several large revolving knives and attended with great danger; that plaintiff had no previous knowledge of the operating of the machine, and was inexperienced and unacquainted with the danger of operating such a machine; that he received no instructions or directions in regard to operating the same. He avers that it was the duty of the defendant, before entrusting him with a machine of the danger attending the operation of said jointer, to have fully explained its operation, and to have seen to it that he was properly instructed and advised in regard to the same; that he was employed for the purpose of learning the trade of pattern maker and not to operate such jointer or other machine, but that he was put to work on the jointer, and by reason of his lack of experience and knowledge, and his youth, without fault or negligence on his part, and while in the exercise of due care and caution, his hand was caught in the revolving knives of the jointer and the two front fingers of his right hand were cut off or severed.

The second count avers the employment of the plaintiff as a pattern maker and the duty of the defendant not to require him to work about machinery or do other work of a dangerous character where plaintiff was liable to be injured or to permit plaintiff, being a minor of the age of 16, to work upon a jointer or use or operate the same unless he had been instructed in the use of the same, and then not until he had been watched by the servants of the defendant until they were satisfied that he was capable of successfully operating the same, appreciating and avoiding the danger attending its operation, and avers that he had never seen such jointer or one similar in operation, and avers that the defendant was negligent in calling upon plaintiff, who was inexperienced as aforesaid and unacquainted with the operation of a jointer, to operate the same, and in putting him to work on a dangerous machine without instructing and directing him in the manner of operating the same, and without seeing that he was capable of managing the jointer with a reasonable degree of care and safety, and particularly in putting him to work on such machine without full instructions and directions, and in authorizing or permitting said plaintiff to operate said jointer without giving him instructions and directions as to the manner of operating the same, and without explaining to him the dangers incident to its operation, and avers that by reason of such negligence of the defendant aforesaid, he was put to work on said jointer, and having operated the same but a short time, while in the exercise of due care and caution, and without fault and negligence on his part, his hand was caught in the machine and the injury resulted.

The evidence on the trial was conflicting in some points. The plaintiff testified that he had no previous acquaintance with machinery of that kind, and that he so informed the defendant’s foreman when he was employed. The defendant’s foreman testified that plaintiff assured him that he had had experience working in a pattern shop of the Bement factory, while plaintiff’s testimony was that he had told the defendant that he had worked in the Bement foundry, not in the pattern factory. Plaintiff testified that he was expressly directed by this foreman to use the machine in question, and that when he hired out he did not agree to work at or expect to run a jointer. The defendant’s foreman testified that plaintiff had assured him that he had had several months’ experience and that he was not taken on strictly as an apprentice but as an “improver,” so-called; that apprentice wages were 75 cents a day; and that plaintiff was given $1 a day because of his having had some experience. He denied that he had instructed the plaintiff to use the machine in question. He testified, however, as follows:

“A pattern maker is supposed to use any of the machines which are placed in the shop for his use, and to use them at his own discretion.

UQ. State whether or not it becomes part of the duty and education of pattern makers to use those machines ?

“A. A man or anybody going to work in a pattern shop has to learn to use the machine; that is, they have to learn to use the machine by seeing others use them, and also by general instructions from the man in charge.

“Q. The point I want to get at is whether that is a part of their trade, the use of those machines ?.

“A. The use of the machine is a part of the trade.

* * *

“Q. Did you say anything to the plaintiff, young Marklewitz, about the jointer and saw or any of the machines, and if so, what ?

“A. The only thing that I ever said to him about the matter was the morning that I placed him on the bench, I merely pointed out the machine called the jointer and. the machine called a saw and I told him they were dangerous machines and that they would cut him as quick as they would me.

“Q. Was anything further said about the machines to the boy ?

“A. In relation to their using them ?

“Q. Yes.

“A. No, there was not.

“Q. That was what you told him that it was a dangerous machine?

“A. That is all I told him. * * *

“Q. Now, Mr. Otto, state what, if anything, was said at that or any other time about this young man’s planing blocks or anything else on the jointer ?

“A. There was not.

“Q. At any time ?

“A. At any time. * * *

“Q. Do you know whether or not he fixed that piece that you sent him to fix ?

“A. The one that I asked him to get for me ?

Q. Yes.

“A. Yes, sir, he got it.

Q. Did you see it afterwards ?

“A. I did.

Q. And examine it ?

“A. I did.

“ Q. Anything said by him or anybody as to how he fixed it or where he fixed it ?

“A. There was not.

- “ Q, State whether or not you had any notice then that he had used the jointer for it ?

“A., I did not. I didn’t eveninquire as to how he produced the piece; the main thing I looked at was that the piece was what I wanted. * * *

“ Q. State what knowledge an improver, one who had represented that he had been nine months in a pattern shop, what knowledge he would be supposed to have in regard to the purpose of the different machines around ?

“A. Well, it would be naturally inferred from conditions of that kind that a man who had been accustomed to seeing machines used, pattern shop machinery for that length of time, would know something about the use of them, but this was customary in all pattern shops for the apprentices after he has been in the shop three months to be placed at the work of getting out rough material for other journeymen to use.”

And on cross-examination he testified as follows:

. “Q. Is it true about an improver that he is supposed to use any of these machines ? He is supposed to use these machines at his own discretion, namely such as you have stated were in the pattern room ?

“A. He is supposed to ask the question if a man is going in under these conditions, if he has used woodworking machines, and if he says yes, that is all the foreman of the pattern room can ask for.

“Q. You asked him this question, did you?

“A. Yes, sir, I did, and he said he did.

“Q. He said he did. You supposed then, of course, that he was capable of using any of the machines ?

“A. I didn’t state any particular machines to him one way or the other, I took it in a general sense.

“Q. Then you supposed that he would be able to use any of them ?

“A. I didn’t think he would be proficient in it, but . simply capable of using them in a way. I told him they ■ were dangerous machines, and that they would cut him as quick as they would me. I didn’t understand whether or not he seemed to appreciate or understand what I said to him about their being dangerous; now, this was all the instruction that I gave him about the machines.”

The defendant also called as a witness one Kyle Murrey, who testified that on the day previous to the injury received by the plaintiff, he saw the plaintiff start to run a . small piece of wood across the knives of the jointer, and that witness told the plaintiff about running small pieces . across the knives.

“ I told him that it was dangerous; I told him, for him ' to run small pieces like that across there he would be apt to lose something. He stopped running the machine and went away.”

On the day in question, plaintiff undertook to shape up a piece of wood on the jointer, and while doing S0j the injury resulted. The case was submitted to the jury, a verdict resulted in favor of the defendant, and the plaintiff brings error, assigning a large number of errors on the charge of the court. The instructions appear to have confined the plaintiff’s case to a single claim, namely, that he was specifically set to work to do this particular piece of work by the foreman of the defendant. We think the second count of the declaration is broad enough to permit á recovery in case the work in which plaintiff was engaged was work in which he was expected to make use of the machine in question, and might naturally be expected to resort to the use of such machine, if there was a failure of duty in giving him proper instructions.

In stating the claim of defendant, the circuit judge charged as follows:

“ The defendant denies that plaintiff was ever directed or authorized to use the jointer, and claims that his use of the machine had been expressly forbidden and that plaintiff had not only been told not to use it, but' had been stopped by a fellow employé when he was using it, or trying to use it.”

We are constrained to hold that the circuit judge misapprehended the testimony upon this point. The testimony of defendant’s foreman does not sh.ow an absolute prohibition to use the machine, in terms. The construction of this testimony is of course for the jury, but it may be fairly said that it was open to the construction that plaintiff was expected to make use of the machine, and it was for this reason that he was cautioned that it was a dangerous machine. He was certainly not told that he was not to use it, nor had he been in fact stopped by a fellow employé when he was using it. It is true that the follow employé had told him that it was dangerous, and that in running small pieces through this jointer, he would be apt to lose something. But he had not in terms stopped his using it.

We think he court was also in error in narrowing the issue to the question of whether the plaintiff was directed by the foreman specifically to use the jointer in planing blocks if he wanted to and in stating that if he was not so told by the foreman, his case would end there. If as a matter of fact the plaintiff, from the nature of his employment, might fairly have understood that he was expected to make use of the machine, and this was a question for the jury, then the duty of proper instruction was imposed upon the defendant. Upon this point the circuit judge properly charged the jury that it was the duty of the defendant foreman, before setting him to work in operating the jointer, to explain to him its mode of successful operation, its dangers to the unskilled, and the care and attention demanded from its operator, and that the degree of instruction to be given to the servant depends upon the age and experience of the servant and the dangerous character of the machine he is directed to operate. This instruction was in harmony with the decisions of this court in Ertz v. Pierson, 130 Mich. 160; Allen v. Jakel, 115 Mich. 484; and Braasch v. Michigan Stove Co., 147 Mich. 676. The circuit judge also properly charged the jury that it was a question for them as to whether, if the plaintiff was so directed by the foreman to operate this machine but was not instructed about its use, he knew enough about the machine to apprehend and appreciate the danger likely to arise from its use by him or whether the danger from its use was obvious to a boy of his age and experience, and if it was, that his own negligence would be a bar to recovery.

The error, however, arose out of misconstruing the testimony of the defendant’s witnesses, and in assuming that the use of this machine had been expressly forbidden to the plaintiff, and also in requiring as an essential to recovery proof of actual specific direction to use this machinery, even though the jury should find that from the nature of the employment its use by the plaintiff was to be expected and anticipated.

The judgment is reversed, and a new,trial ordered.

Grant, O. J., and Blair, Ostrander, and Moore, JJ., concurred.


author: McAlvay, J.

text:
    GOFF v. CASS CIRCUIT JUDGE.
    1. Wills — Probate—Contests—Appeal to Circuit Court — Jurisdiction — Costs—Allow anoe.
    An appeal from the prohate court in a will contest does not remove the entire estate to the circuit court, the jurisdiction the circuit court acquires in such cases being only to hear and determine the will contest, including the right to tax costs in such cases and order the taxable costs to be paid out of the estate. Section 081, 1 Comp. Laws.
    2. Same — Appeal to Supreme Court — Expense—Allowance.
    Though the circuit court has authority on a will contest to order the taxable costs to be paid out of the estate (section 681, 1 Comp. Laws), it has no authority to order payment of the expense of perfecting an appeal to the Supreme Court out of the funds of the estate.
    Mandamus by Leslie Goff to compel Orville W. Coolidge, acting circuit, judge of Cass county, to vacate an order awarding the payment out of an estate of an amount for perfecting an appeal.
    Submitted February 18, 1908.
    (Calendar No. 22,692.)
    Writ granted March 31, 1908.

      Smith & Lyle (Victor M. Gore, of counsel), for relator.

      A. Lynn Free and Alfred J. Mills, for respondent.
   McAlvay, J.

Relator applies for a mandamus against, respondent, acting circuit judge of Cass county, to set aside a certain order made in the matter of the estate of John F. Goff, deceased, in a contested will case, wherein B. O’Dell and others are proponents and Leslie Goff is contestant, tried in said county, and in which said respondent on December 30, 1907, on the application of the proponents, among other things, ordered:

“ That the proponents be allowed payment out of the funds of said estate for obtaining copies of the testimony taken on the trial of said cause at the last term of said court, for the purpose of perfecting an appeal to the Supreme Court, not to exceed the sum of three hundred and fifty dollars.”

Relator made application to respondent to vacate and set aside this order above quoted. The motion was denied, and thése proceedings were afterward instituted. There seems to be some confusion created by the answer. of respondent relative to the order which is sought to be vacated and set aside. The brief and answer of respondent both indicate that relator never made application to vacate the order complained of. This is a mistake. Exhibit 1, a part of respondent’s answer, is a copy of the order denying the motion to vacate the order of December 30, 1907, which is the order complained of. After that motion was denied, and on the same date, December 31, 1907, an order was made staying all proceedings on said order and the payment of money thereon until the further order of the court, for the purpose of giving relator opportunity to test the validity of the order in this court.

On January 21, 1908, an order, which is admitted by counsel for respondent to have been ex parte, was made and entered setting aside the stay of proceedings and ordering the amount allowed by the former order to be paid out of the funds of the estate to proponents’ attorneys, for the purpose theretofore ordered. This order is of considerable length, reciting the facts above stated, and also that it appeared to the satisfaction of the court that relator’s attorneys had made no effort to test the validity of the order in question although more than 20 days had elapsed. This order of January 21,1908, is the order respondent and his counsel refer to when they say no motion was mado before respondent td vacate the order relator asks this court to set aside.

The order of January 21st was not the order which made the allowance complained of. It was an order setting aside a stay of proceedings and carrying into effect the former order. As to knowledge of this ex parte order relator’s brief states that it “was unknown to relator’s attorneys until after their application to show cause had been made, and was not filed until about the time the order to show cause was issued.” This statement was not contradicted. The record in the case shows that the petition to this court was filed January 24th, and the order to show cause issued January 27, 1908.

The only question presented to us, and which is one of importance, is whether a circuit judge has jurisdiction to make such an order as the one before us, compelling an estate to advance money to enable one of the parties in a will contest to carry the case to the Supreme Court. In the case at bar there is a large estate in process of ad-. ministration in probate court, a special administrator having been appointed to take care of it. The contest upon the will in question was had in that court and was appealed to the circuit court. In that court a trial was had and contestant prevailed. The case was brought to this court for review and the judgment was reversed, and a new trial ordered. O’Dell v. Goff, 149 Mich. 152. The second trial has occurred with the same result as on the first trial and proponents secured the order in question to enable them again to bring the case to this court.

It has never been claimed that the appeal from the probate court in a will contest removed the entire estate to the circuit court. The jurisdiction the circuit court ac- ' quires on such an appeal is to hear and determine the will contest. . The circuit court may tax costs in such cases, and order such taxable costs to be paid out of the estate. Section 681, 1 Comp. Laws. "We are not referred to any other authority vested in the circuit court by statute to order other costs paid, or any other payment to be made out of an estate pending in probate court.

Counsel for respondent cite three Michigan cases in support of their contention that the circuit court had authority to make this order, viz., Conely v. McDonald, 40 Mich. 150. This was a will contest where proponent was the executor named in the instrument and was designated by the probate court as representative on the appeal of all the parties interested. A judgment against proponent was affirmed, costs in all the courts to be paid out of the estate. The case was accordingly certified to the circuit and probate courts.

Tracy v. Murray, 44 Mich. 109. This was a bill in chancery to determine the rights of a widow under a will, where she had released her dower and accepted a legacy. The estate was insufficient to pay the debts and legacies. She claimed a lien upon the lands prior to all debts and other legacies. In deciding against her the court said: “ Costs will be paid out of the estate.”

In re Kempf’s Estate, 53 Mich. 352. An appeal from a probate order disallowing the account of the executrix. This court agreed with the probate and circuit courts disallowing the claim and thought it proper to allow both parties costs “to be taxed by the probate judge against the estate.”

We do not think the cases cited are in point. The presumption in all these cases is that the costs allowed were the usual taxable costs, and in the last case they were ordered to be taxed by the probate court. The question of taxable costs is not in this case. The respondent assumes authority to pay proponents, out of an estate not within the jurisdiction of his court, funds to enable them to make an appeal.

We think that the probate court is the only forum clothed with such authority.. Such court has original and exclusive jurisdiction in the matter of the administration of the estates of deceased persons. No claims can be allowed against such estates except presented in that court for allowance. Such claims are passed upon by the probate judge, the commissioners on claims, or by the probate court upon the accounts of executors and administrators. Chapters 252 and 253, 3 Comp. Laws.

The circuit courts may order taxable costs to be paid out of estates. Section 681, 1 Comp. Laws. Brilliant v. Wayne Circuit Judges, 110 Mich. 68. And this court has construed to the same effect, sections 9440 and 11275, 3 Comp. Laws. Cheever v. North, 106 Mich. 390 (37 L. R. A. 561). The allowance for counsel fees is for the probate court. Waldron v. Waldron, 45 Mich. 350; Jackson v. Leech’s Estate, 113 Mich. 391.

This court granted a mandamus where the circuit court awarded an executor his actual expenses in following a will contest to higher courts, setting aside such allowance, and intimated that to be reimbursed for such matters proceedings should be had in probate court. Brilliant v. Wayne Circuit Judges, supra. See, also, Toms v. Williams, 41 Mich., at page 576.

Our conclusion is that the respondent has no jurisdiction to make the order in question.

The writ is granted.

Grant, C. J., and Blair, Montgomery, and Ostrander, JJ., concurred.


author: Moore, J.

text:
    SMITH v. LULL.
    Speoieto Performance — Contract to Bequeath — Evidence — Sufficiency.
    On a bill by the heirs of an adopted child against the heirs and executor of the adoptive parents for specific performance of the contract of adoption, by the terms of which it is alleged ' the adoptive parents agreed to make the child their sole heir evidence examined, and held, that the averments of the bill were not sufficiently supported, in view of the improbability that young married people of social and financial prominence, having many relatives, would make such an agreement in behalf of a child whose parents had but recently emigrated here from Europe, and about whose antecedents they could have known nothing.
    Appeal from Genesee; Wisner, J.
    Submitted February-19,1908.
    (Docket No. 132.)
    Decided March 31, 1908.
    Bill by Albe W. Smith and others against Albe Lull, individually and as executor of the last will and testament of Albe A. Lull, deceased, and others, for the specific performance of a contract. From a decree dismissing the bill, complainants appeal.
    Affirmed.

      John M. Feier, Proctor K. Owens, and M. J. Lehman (Harrison Geer, of counsel), for complainants.

      Aaron Perry, John H. Patterson, and Hugh Shepherd, for defendants.
   Moore, J.

This is a bill filed to secure the specific performance of an alleged contract. The case was tried in open court. The circuit judge dismissed the bill of complaint. The case is brought here by appeal. The complainants are the children and heirs at law of Mr. and Mrs. William H. Smith, deceased. Mrs. Smith was formerly Rose May Smithlin. The following averments are contained in the bill of complaint:

“That said Rose May Smithlin was the lawful and legal daughter of one Antone Smithlin, and came from Europe to America with, her father in the-year of 1853, or thereabouts, and lived here with her father and mother up to, on or about the 10th day of April, A. D. 1854, except the last few months immediately previous thereto, at which time, the said two months, she lived with her aunt in the city of Pontiac, Michigan, when her father, at the time aforesaid, to wit: the 10th day of April, A. D. 1854, and one Albe A. Lull, of the city of Pontiac, Oakland county, Michigan, and his wife, Clarissa Lull, entered into a written contract by and between each other and on behalf of said Rose May Smithlin, in fact and in substance as follows: That the said Albe A. Lull and his said wife, Clarissa Lull, agreed to, and did adopt said Rosa May Smithlin and rear, nurture and educate her, to provide and care well for her, and that she was to be as their own child and their lawful and legal heir, and at their death to receive all of the property, real, personal and mixed, for the sole benefit and use of said Rose May Smithlin, and her heirs and assigns, that they, said Albe A. Lull and his said wife, Clarissa Lull, at that time owned or might own at the time of their death, or either one of them. That in consideration thereof the said Rose May Smithlin, who was then at the age of five years, or "thereabouts, was to give said Lull and his said wife her personal services, and to wait on them and perform work of every kind and character as requested by said Lull and his said wife, until the said Rose May Smithlin should be grown up or attain the age of womanhood.

“That said contract was duly signed by said Albe A. Lull and his said wife, Clarissa Lull, and also by the said Antone Smithlin, and that said papers were left in the possession of said Lull and his wife, and that they remained in their possession for a considerable length.of time; and that your orators have been informed, verily believe and charge the fact to be that said contract remained in the possession of said Albe A. Lull up until the time of his death; that shortly after his death the executor of his estate, Albe Lull, took possession of all the papers, writings, contracts, documents and all other papers and writings belonging to said Albe A. Lull, and that your orators have been informed, verily believe and charge the fact to be that said contract above mentioned is still in the hands of Albe Lull, the executor of the estate of said Albe A. Lull, and therefore it is impossible for your orators to set the contract up in full verbatim, or attach a true copy of the same to this amended bill of complaint, as an exhibit thereto.

“That relying upon said promises and agreement, and in pursuance to said contract as aforesaid, the said Rose May Smithlin lived at the house of Albe A. Lull and his said wife, Clarissa Lull, and gave them her services, as requested, daily and continuously, until she had grown up and attained the age of womanhood, when she was married to said William H. Smith with the consent of the said Albe A. Lull and his said wife. That the services so rendered by the said Rose May Smithlin, as aforesaid, cannot be enumerated specifically, but they consist of housework of every kind and character, all work in and about the house of every nature, required in house keeping and in running and maintaining a home, of sewing, washing, ironing, of care and nursing for said Albe A. Lull and his said wife, and much other and different kind of work done and performed outside of the dwelling house, in many and different ways and as requested by the said Albe A. Lull and his said wife.

“ That before the said Rose May Smithlin was married to the said William H. Smith her marriage was fully discussed by all parties concerned in the house of the said Albe A. Lull, and that it was perfectly satisfactory to said Albe A. Lull and his said wife that the said Rose May Smithlin should marry the said William H. Smith, and that they fully and freely consented to the same.

“That said Rose May Smithlin, relying upon said promises and agreements, and in pursuance to said contract, did in all respects, honestly, conscientiously, faithfully and diligently perform all of the conditions upon her to perform and fully carried out her part of the contract.”

The record discloses that Albe A. Lull was born June 18, 181L He died December 10, 1904. Clarissa G. Lull, his wife, was born March 16, 1819. She died May 25, 1890. Albe A. and Clarissa G. Lull were married October 12, 1841. A son was born to them June 4, 1858, and died July 12, 1858. No other children were ever born to them. Mr. Lull for more than half a century was one of the most prominent men in the city of Pontiac. Though he had no children besides the one referred to above, he had a good many relatives to whom he and Mrs. Lull were greatly attached. The record shows that Rose May Smithlin was an inmate of Mr. Lull’s' house for a good many years. She was sent to school by the Lulls, and was clothed by them and was married from their residence. Before his death, Mr.. Lull made a will in which he gave his property to a good many different persons. He made provision- for payments of various sorts. He remembered the church very generously with which he and Mrs. Lull had been associated a great many years. He also made the following provisions for complainants :

“ To Albe W. Smith, now of Detroit, Michigan, I give and bequeath the sum of Two Thousand Dollars in trust for the use and benefit of his brother, Darwin T. Smith; and the said trustee shall use so much of said funds and the net income therefrom as may be reasonably necessary for the support, education and maintenance of the said Darwin T. Smith, until he shall arrive at the age of twenty-one years.

“And it is my wish, although I do not make it as an absolute requirement, that during school vacations, and in fact, whenever the said Darwin T. Smith shall not be in attendance at school, that the said trustee shall secure some useful employment for him and keep him actually employed in some useful business, occupation or pursuit. It is also my earnest wish, although I do not make it an absolute requirement, that said Darwin T. Smith, shall at least complete a good high school education. When the said Darwin T. Smith shall arrive at the age of twenty-one years, the said trustee shall transfer to him whatever shall be left of the said funds, the same to be then his absolute property forever.

“To Albe W. Smith, Augustus L. Smith and George Moseman Smith, children of William H. Smith, I hereby give and bequeath each the sum of One Thousand Dollars, being Three Thousand Dollars to all.”

No writing which evidenced the arrangement by which Rose May Smithlin became an inmate of Mr. Lull’s family was produced upon the trial, and it was shown by the persons having the custody of Mr. Lull’s papers after his death, that no such paper as the one mentioned in the bill of complaint was found among his effects. Complainants’ case depends almost wholly upon the recollection of a man who at the time he says he heard the conversation that led to the taking of Rose, in 1854, was but nine years old. He testified that no paper was left with the father of Rose, that the written agreement which was made was taken away by Mr. Lull. Another witness, Mary Davis, claims she overheard a conversation between Mrs. Lull and Rose in accordance with complainants’ theory in this case.

Thé trial judge when he rendered his decision analyzed the testimony of the witnesses at great length, and showed very conclusively that the testimony tending to establish the averments of the bill is very unsatisfactory. The same reasons which appealed to him appeal to us.

While a fair inference may be drawn from the testimony that Mr. and Mrs. Lull agreed to make Rose Smithlin a member of their family, to clothe and school her and treat her well, it is not established that they agreed to make her their sole heir at law. The theory of the complainants is simply unbelievable. Mr. and Mrs. Lull were comparatively young people in 1854. A child was born to them after that date. They had many relatives. They were people of social prominence. Mr. Lull had already demonstrated his ability as a business man. He had accumulated some property and later accumulated a good deal more. It is not probable that under such circumstances he took a child from a father who did not speak English, and who had not been long enough in this country so that Mr. and Mrs. Lull could know anything of the antecedents of the family, and in disregard of the duty which he owed to others then in existence, and to the possibilities of the future, agreed to make this child, whom he scarcely knew, his sole heir. Mr. and Mrs. Lull were good to this child, which they gave a good' home. Mr. Lull provided generously in his last will for her children. There is nothing in the record to indicate that Mr. and Mrs. Lull did not discharge their fullest duty to Rose May Smithlin. See the following authorities which bear upon the question of what is necessary to prove before a claim of the character which is asserted here can be regarded as established: Wright v. Wright, 31 Mich. 380; Chambers v. Livermore, 15 Mich. 381; McMurtrie v. Bennette, Har. Ch. (Mich.) 124; Smith v. Lawrence, 15 Mich. 499; Wilson v. Wilson, 6 Mich. 9, and note; Brown v. Brown, 47 Mich. 378, 385; Waterman on Specific Performance, § 41; Shakespeare v. Markham, 10 Hun (N. Y.), 311; Bowen v. Bowen, 2 Bradf. (N Y.) 336; Williams v. Hutchinson, 3 N. Y. 312; Robinson v. Raynor, 28 N. Y. 494; Parsell v. Stryker, 41 N. Y. 480; Lisk v. Sherman, 25 Barb. (N. Y.) 433; Cox v. Cox, 26 Grat. (Va.) 305; Sprinkle v. Hayworth, 26 Grat. (Va.) 384; Pomeroy on Specific Performance (2d Ed.), p. 268; Shellhammer v. Ashbaugh, 83 Pa. 24; Edwards v. Morgan, 100 Pa. 330; Criggsby v. Osborn, 82 Va. 371; Beall v. Clark, 71 Ga. 818; Russell v. Switzer, 63 Ga. 711; Woods v. Evans, 113 Ill. 186; Wallace v. Rappleye, 103 Ill. 229; Brown v. Brown, 29 Hun (N. Y.) 498; McKinnon v. McKinnon, 46 Fed. 713; Hanly v. Hanly, 105 App. Div. (N. Y.) 335; Hamlin v. Stevens, 177 N. Y. 39; Pattat v. Pattat, 93 App. Div. (N. Y.) 102; Gall v. Gall, 64 Hun (N. Y.), 600.

The decree of the court below is affirmed, with costs.

Grant, O. J., and Montgomery and Ostrander, JJ., concurred. Blair, J., concurred in the result.


text:
    GRAND RAPIDS WOOD FINISHING CO. v. HATT.
    1. Contracts — Verbal Agreements — Merger in Subsequent Writing.
    All verbal agreements concerning the subject-matter of a contract are merged in the writing subsequently executed coving the terms of the contract.
    2. Same — Sale op Secret Formulas — Consideration—Estoppel.
    A contract for the sale of certain secret formulas upon a royalty basis contained no provision expressly binding the purchaser to manufacture the articles forming the subject-matter of the formulas, but both parties treated the contract as imposing such duty, and the purchaser manufactured and supplied to the seller of the formulas all the articles he required for resale during several months, after which the seller of the formulas sold his rights under the contract. On a bill by the purchaser of the formulas to enjoin the manufacture by the seller of the articles described and to enjoin the sale by him of the formulas to others, held, that defendant could not complain that the contract was without consideration because it contained no clause requiring the complainant to manufacture, since to do so he would have to take the position that if complainant had stood upon the strict letter of its contract, he would have been unable to realize anything from the sale of his rights under it.
    3. Same — Legality op Object — Contracts in Restraint of ■ Trade.
    Act No. 339, Pub. Acts 1905, relative to contracts in restraint of trade, does not render invalid a contract for the sale of a business and the secret formulas for the manufacture of the articles manufactured nor render unlawful the agreement of the seller not to use the formulas nor disclose them to others.
    Appeal from Kent; Wolcott, J.
    Submitted February '20, 1908.
    (Docket No. 88.)
    Decided March 31, 1908.
    Bill by the Grand Rapids Wood Finishing Company against Charles E. Hatt to enjoin the manufacture, disposal, or divulging of certain secret formulas. Defendant filed an answer in the nature of a cross-bill for an accounting. From a decree for complainant and dismissing the cross-bill, defendant appeals.
    Affirmed.

      Kleinhans & Knappen, for complainant.

      Barnard & Smith;, for defendant.
   Blair, J.

Prior to December 1, 1905, defendant, Hatt, was the owner of certain formulas for the manufacture of furniture polishes, which he was selling, principally, to the retail trade. Complainant was also engaged in the manufacture of furniture polishes, selling, principally, at wholesale. There were upwards of 500 to 1,000 manufacturers of furniture polishes in the country.

On December 1, 1905, upon solicitation by defendant, Hatt, a contract was entered into between him and complainant, containing, among others, the following clauses: •

“First party, for the considerations hereinafter named, hereby sells, assigns ahd sets over to the second party absolutely, certain formulas owned by him for the manufacture of the following, namely: Hatt’s Cleaner and Polish, Hatt’s Combination Rubbing Polish, Hatt’s Special Ring Finish for Repair Work, and Hatt’s Varnish Remover, together with the exclusive right to manufacture and sell all articles in accordance with said formulas. All improvements or changes in said formulas hereafter made by first party during the life of this contract shall inure to the benefit of the second party, and shall be considered as conveyed by this instrument, together with the sole right to manufacture and sell thereunder.

“ Second party, in consideration for said sale, agrees to pay first party as a royalty for the manufacture of said articles, twenty per cent, of the net price received, after deducting all selling and shipping expenses, including commissions, for the sale of any and all of said articles, in accordance with the schedule of prices hereinafter mentioned and annexed hereto. Second party also agrees, as part of said consideration, to pay first party a commission of ten per cent. (10%) upon net price received for all orders received for any of said articles sold or turned in by first party and accepted by second party. * * *

“First party further agrees, as part of the consideration of the agreements of second party hereinbefore stated, that he will not, during the life of this contract, sell or dispose of, to any persons whatsoever, the said formulas or any of them, and shall not divulge to any person whatsoever the said formulas or any of them.

“It is mutually agreed that the life of this contract is twenty (20) years from the date hereof.”

After the execution of the contract, defendant went out on the road and, for a little over five months, attempted to sell the polishes covered by the contract. During this period his gross sales were $814.16, upon which his commissions and royalties amounted to $211.02. During the same period complainant advanced to defendant $804.70. Some time in May, 1906, complainant refused to advance any more money for expenses. On May 26, 1906, defendant sold and assigned to Albert H. Simpson, bookkeeper and secretary of complainant, his interest under the contract.

“ It being the intention by this sale and assignment to transfer to second party all my right, title and interest in and to the formulas mentioned in said contract above described, together with all the right now remaining to me, if any, to the use of the names, ‘Hatt’s Cleaner,’ ‘Hatt’s Polish,’ ‘Hatt’s Cleaner and Polish,’ ‘Hatt’s Combination Rubbing Polish,’ ‘ Hatt’s Special King Finish for Repair Work,’ ‘ Hatt’s Varnish Remover,’ and all right whatsoever to manufacture and sell articles under said names or any other names whatsoever during the life of the contract.”

Mr. Simpson borrowed the amount of the purchase price from complainant by check, which check he indorsed over to defendant. After the sale to Mr. Simpson, defendant commenced making and selling the polishes covered by the contract, under his own name, and also offered to sell one of the formulas to a third person for $25, in violation of the agreement.

Complainant filed its bill of complaint June 16, 1906, asking for an injunction to restrain defendant from manufacturing under the formulas sold to complainant and from disposing of or divulging the formulas. Defendant filed an answer, denying that a true copy of the. contract was attached to the bill of complaint, alleging that the contract contained a clause “that the complainant was to furnish expense money for this defendant in making sales of said goods specified in the said contract, which does not appear in said copy.” The answer also alleged “that the said so-called contract made between the complainant and this defendant is illegal and void, as opposed to public policy and in restraint of trade, intending to establish a monopoly, in violation of the laws of this State. ” The answer also alleged that defendant “ did not receive any consideration for making the said contract and the said complainant acquired no rights or interests to or in the said formulas or processes or any of them or to manufacture the articles named and made by use of the said formulas.” The answer also alleged fraudulent intent on the part of the complainant to induce the defendant to enter into the contract for the purpose of preventing competition in complainant’s business and defrauding defendant, in pursuance of which fraudulent purpose, complainant refused to pay the royalties earned and fraudulently concealed from the defendant the amount of the sales and refused to permit him to examine their books and papers, and sold compounds manufactured under his formulas, under other names than those mentioned in the contract. The answer also avers a fraudulent conspiracy between complainant and the said Simpson to obtain ■ the assignment of the contract and that said Simpson really acted in behalf of the complainant in obtaining said assignment and the same was paid for by the complainant. The answer prays, by way of affirmative relief, for an accounting; that the said complainant be enjoined from selling any of the defendant’s formulas or disclosing the same; and that the contract of December 1st be decreed to be null and void.

Upon hearing in open court, the preliminary injunction theretofore granted was made perpetual, and defendant was enjoined from selling or divulging the formulas, or from manufacturing and selling the articles covered by the formulas, and from manufacturing or selling articles under the names of the articles covered by the formulas. The cross-bill of defendant was dismissed. Defendant appeals from this decree.

Counsel for appellant, in their brief, present two principal points for our consideration:

(1) There is no consideration given by the complainant to the defendant.

(2) The contract is void, as being opposed to-public policy, in restraint of trade, intended to create a monopoly and to prevent competition.

It is contended by defendant’s counsel that, as a matter of fact, no royalties have ever been paid under the contract, but that all the money that was .paid Hatt was given him in pursuance of an oral agreement, as follows:

“There was a change made in the amount of royalty to be paid in under the terms of the contract. A change was made from 25 per cent, to 20 per cent. The change was made with verbal understanding that they should furnish me money for expenses and to live on until the business was on such a paying basis that it would pay dividends to keep me and the rest of us from the business.”

The testimony is in conflict as to what the exact character of this verbal understanding was, the defendant Hatt’s version of it being as indicated in the quotation. Defendant, however, testified:

“Well, now, I couldn’t say as to whether the change was made before the contract was signed. I had it in mind that it was signed when that change was made and in the presence of Mr. Scribner and me and Mr. Van Nemy, but I would not swear as to that positively.”

Mr. Scribner, complainant’s president, Mr. Simpson, the secretary, and Mr. Van Nemy, all testified that the change from 25 per cent, to 20 per cent, was made before the contract was signed.' It is clear that, under the testimony, the verbal agreement, if of the character stated by defendant, was merged in the contract thereafter executed, as well as the further agreement alleged by defendant under this point that “they would go ahead and advance the business, advertise it, and put it on a paying basis.” While there is no provision in the contract expressly binding the complainant to manufacture any of the articles sold, both parties seem to have treated the contract as imposing such duty, and defendant obtained all of the polishes which he called for, received credit for the royalties and commissions earned', and finally sold his interest in the contract for $150. Under such circumstances, he cannot now take the position that if complainant had stood upon the strict letter of the contract, he would have been unable to realize anything from the sale of his property.

This is the principal point presented in the brief of counsel and is, we think, without legal foundation. Act No.'329 of the Public Acts of 1905, “relative to agreements, contracts and combinations in restraint of trade or commerce,” upon which defendant relies, provides:

“Section 6. This act shall not apply to any contract mentioned in this act nor in restraint of trade, where the only object of the restraint imposed by the contract is to protect the vendee or transferee of a -trade, pursuit, avocation, profession or business, or the good will thereof, sold and transferred for a valuable consideration in good faith and without any intent to create, build up, establish or maintain a monopoly.”

The principal value, in many instances, of a business of manufacturing an article whose component parts are unknown, inheres in the secret formula or process for manufacturing it, and it is clear that unless the owner of such secret process is able to make a valid contract not to reveal the formula, the power to sell such property will be practically denied him. The secret process enhances and is a part of the value of the articles manufactured and of the business carried on under it, and is as much a lawful subject of disposal as property as the'articles themselves manufactured. A contract to sell such process is, therefore, valid and binding. O. & W. Thum Co. v. Tloczynski, 114 Mich. 149 (38 L. R. A. 200); Peabody v. Norfolk, 98 Mass. 452; Tode v. Gross, 127 N. Y. 480 (13 L. R. A. 652); Westervelt v. Supply Co., 154 Ind. 673; Morse Twist Drill & Machine Co. v. Morse, 103 Mass. 73.

We do not find any evidence of fraud or conspiracy to defraud defendant, as claimed in his answer; neither is, his contention that the money advanced to him was not to be repaid supported by a preponderance of the testimony. The circuit judge who heard the case found against him on these questions of fact, and we are satisfied with his conclusions.

The decree is affirmed, with costs to complainant.

Grant, C. J., and Montgomery, Ostrander, and Moore, JJ., concurred.