author: Grant, C. J. Montgomery, J.

text:
    BRIDGE STREET & ALLENDALE GRAVEL-ROAD CO. v. HOGADONE.
    1. Toll Roads — Commissioners — Abandonment of Road — Determination-Statute — Procedure—Notice—Necessity.
    Act No. 91, Pub. Acts 1897, providing, that the township commissioners of highways shall act as toll-road commissioners, and authorizing them to determine when a toll road is abandoned, and to restrain the collection of tolls on any road so abandoned, while it does not expressly provide for a notice and hearing, impliedly requires one, and a determination by a commissioner that a road has been abandoned and the right to collect tolls thereon forfeited, without giving the toll-road company any notice or opportunity to be heard, is unauthorized and void.
    2. Equity — Clean Hands — Toll Roads — Commissioners—Franchises — Exercise—Right to Object.
    On a bill by a toll-road company to restrain unlawful interference by the toll-road commissioner with its exercise of its franchises, a claim by defendant that complainant does not come into court with clean hands, for the reason that it did not complete its road, keep it in repair, nor file its annual report, as required by the statute, is untenable, since only the State, in some proper proceeding, can question complainant’s right to exercise its franchises.
    3. Constitutional Law — Powers of Government — Distribution-Judicial Powers — Conferring on Ministerial Officer —Toll-Road Commissioner. •
    Act No. 91, Pub. Acts 1897, authorizing toll-roads commissioners to determine when' toll roads are abandoned and to restrain the collection of tolls on roads so abandoned, and providing that the orders of the commissioners shall remain of force unless revoked on appeal to the chancery court, is unconstitutional as an attempt to confer judicial power upon a ministerial officer.

      Appeal from Kent; "Wolcott, J.
    Submitted February-13, 1907.
    (Docket No. 137.)
    Decided January 31, 1908.
    Bill by the Bridge Street & Allendale Gravel-Road Company to enjoin Frank D. Hogadone, highway commissioner of Walker township, from interfering with complainant’s corporate franchises. From a decree dismissing the bill, complainant appeals.
    Reversed, and decree^ entered for complainant.

      Grove & McDonald, for complainant.

      Colin P. Campbell, for defendant.
    The complainant was organized July 12, 1887, under the plank-road law, for the construction of a toll road, extending from Grand Rapids, a distance of nine miles, through Walker and Tallmadge townships, to Grand River. The life of the corporation was fixed at 50 years. It obtained the requisite consent of the township authorities to construct the road. It immediately entered upon the work, claimed to have completed it, and until the commencement of this suit, August 7, 1905, maintained it and collected tolls. The original cost of the road was about $36,000. From January 1,1905,up to the commencement of this suit, it had expended in repairs $3,029.85. On August 20, 1888, the prosecuting attorney of Kent county filed a bill at the instance of the then highway commissioner against the complainant, charging the noncompletion of the road in accordance with the statute, and that it was not authorized to receive tolls. A preliminary injunction was issued. A hearing was had upon a motion to dissolve the injunction, and affidavits produced both pro and con. Upon that hearing, October 3,1888, the court modified the injunction, permitting the company to receive tolls on the east two miles of the road. On November 14, 1888, the injunction, upon the hearing upon affidavits, was wholly dissolved. No further proceedings appear to have been taken in that suit. The complainant has since continued in the undisturbed exercise of its franchise and control of its road.
    The defendant was highway commissioner of Walker township. On May 8, 1905, he served upon the complainant a- notice declaring that complaint had been made to him that the road was out of repair, and was not being maintained as required by its charter; that he had found the road to be out of condition and repair and notified it to make very extensive repairs and improvements, which were specified in the notice, and that said repairs should be completed within 60 days. On July 11th following he served upon the company a notice that he had filed a certificate with the clerk of the township, certifying that the company had failed to comply with his order, and that it must cease and refrain from taking toll over said road, and from obstructing the road, and from preventing persons from passing over the same. Complainant was erecting a tollgate at a certain point in its road, whereupon the defendant notified it that it was unlawfully obstructing the road and commanding it to remove the toll house, gate, and fence. This order was not complied with, and thereupon the defendant proceeded to remove said so-called obstructions. The complainant then filed this bill to enjoin the defendant from interfering with the exercise of its franchise rights. The defendant’s answer admitted the material allegations of fact as contained in the bill, but alleged in defense of his action that the complainant did not complete its road as required' by the statute, and that it had not been kept in proper repair. The bill sets up that in 1905 unprecedented heavy rains had created washouts and damaged the road, and that it was engaged in making repairs before the notice was served, and that it continued to make such repairs with promptness. The answer neither admits nor denies the allegation in regard to excessive rain.
    The defendant gave no notice of hearing, or opportunity to produce proofs. He bases his action upon Act No. 91, Pub. Acts 1897, which reads as follows:

      “ Section 1. That after the passage of this act it shall be the duty of the commissioner of highways of any township through which any toll road may enter or pass, to act as toll-road commissioner, and he shall require all •toll-road companies in any such township in this State to construct, reconstruct, repair and maintain their roads in good repair, and of the same material and in the same manner as required by their charters, within six months after the passage of this act. All toll-road companies who fail or neglect to comply with the provisions of this act shall be considered to have abandoned their road, and they shall cease thereafter to take toll, and no person traveling over such toll road shall be required to pay toll thereafter.
    “Sec. 2. All toll-road companies who comply with the provisions of this act, within the time prescribed in section one of this act, shall be required by said township toll-road commissioner to maintain all such toll roads as herein required, and in default thereof, after being notified by said toll-road commissioner to repair such roads as herein provided, for any three consecutive months, then said toll roads shall be considered abandoned, and all such toll roads shall have no further right to collect toll, and shall cease to take toll thereafter, and no person shall be required to pay toll for traveling thereon after such abandonment as herein provided.
    “Sec. 3. Said township toll-road commissioner shall examine all toll roads in his township when he shall have reason to believe they may not be properly kept in condition as provided in their charters. Also, when required so to do by any taxpayer in any township into or through which any toll road may run, who shall make affidavit that he believes any such toll-road company is violating any of the terms or conditions of its charter, or is not keeping its road in good condition, and present such affidavit to such toll-road commissioner, and in case he shall find such road or any portion thereof not kept up to the requirements provided herein, he shall immediately notify such toll-road company of such defects as he may find, and he shall require them to repair and put into such condition as herein required within sixty days. And in default thereof, the commissioner shall immediately make a certificate of such fact and file the same with the township clerk of his township, and such toll road shall be considered abandoned, and all such toll-road companies shall cease to take toll for traveling thereon after such abandonment, and no person shall be required to pay toll for traveling thereon after such abandonment. After said, certificate has been so filed, said toll-road commissioner shall notify any such toll-road company in writing of the filing of such certificate, and said company shall have no right thereafter to obstruct said road or prevent persons from passing over the same, or any part thereof, and it shall be the duty of said toll-road commissioner to prevent such obstructions, or to remove them if placed in said roads, as provided in any other of the highways of his township. Whenever any toll-road commissioner, after a full and complete investigation and hearing the evidence offered by parties concerned, shall determine that the said toll road in question is not maintained in accordance with the conditions and provisions of its charter, said toll road or toll-road companies, may within twenty days after such finding, appeal, as in other cases provided, from the decision of said commissioner to the circuit court in chancery of the same county. But the orders of said commissioner shall be and remain in full force until revoked by the order of the said court.
    “Sec. 4. Any township highway commissioner, under the provisions- of this act, who shall refuse, fail or neglect to perform his duties as herein provided, shall be guilty of a misdemeanor, and upon prosecution and conviction shall be fined not to exceed one hundred dollars or imprisonment in the county jail not to exceed ninety days, or both, in the discretion of the court.”
    The provisions of the law under which the complainant is organized, material to be considered, are the following:
    “The legislature may at any time alter, amend or repeal this act; but such alteration or amendment shall not operate as an alteration or amendment of the corporate rights of companies formed under it, unless especially named in the act so altering or amending this act; and the legislature may annul or repeal any corporation formed or created under this act; but such alteration, amendment, annulling or repealing, shall not, nor shall the dissolution of any such company, take away or impair any remedy given for or against any such corporation, its stockholders or officers, for any liability which shall have been previously incurred.” Seqtion 6620, 2 Comp. Laws.
    “Every plank-road company, * * * shall cause the said gravel or broken stone of proper quality and quantity to be placed upon the road and kept in a uniform manner of the width and depth required by law; and in case of default they shall forfeit the right to receive any toll upon such road; and the prosecuting attorney of the county, on complaint of the highway commissioner of any township in which any portion of the road defectively constructed or out of repair lies, may institute a suit in the circuit court of the same county in chancery, to have such default judicially ascertained and declared; and the said circuit court in chancery for the respective counties shall have full jurisdiction of all cases arising under this act, to hear, try, and determine the same, upon bill or petition filed according to the usual course and practice of those courts.” Section 6625, 2 Comp. Laws.
    “ Every plank-road company shall cease to be a body corporate if within three years, or if hereafter organized, then if within three years from the date of its organization, it shall not have commenced the construction of its road and actually expended thereon at least ten per cent, of the capital stock, and every plank-road company which shall have so far completed its road as to be entitled to receive tolls thereon, or upon some portion thereof, and shall have actually commenced to receive such tolls, shall cease to be a body corporate, if it shall hereafter neglect for the term of five years successively to hold the annual meeting for the election of directors, and shall hold no election of directors during all that time.” Section 6627, 2 Comp. Laws.
    Section 4119, 2 Comp. Laws, makes it the duty of the commissioner of highways of each township to see that all plank or gravel roads are maintained in good and safe condition; that he shall serve a notice upon the company if he finds any defect, describing the locality, and requiring the company to repair it within five days. The failure of the company to so comply is punishable by a fine of fifty dollars.
    At the commencement of the hearing, and at the suggestion of the court, the question of the right of the defendant to take the action he did was raised and argued at length. The court held that the question whether the company had forfeited its rights to its franchise and the right to take toll could not be raised in this way, but only by a direct proceeding instituted on behalf of the State as provided by the statute. He held that the statute points out a way for forfeiting the right by an action in the name of the people. He, however, held that the parties were 1 entitled to put in proof if they desired. This course was pursued, testimony was taken as to the condition of the road from the beginning, which is very conflicting, and the failure to make reports to the auditor general. Upon the final hearing the court dismissed the bill without stating any reason. Counsel for the defendant states in his brief the reason to be that complainant did not come into court with clean hands, in that it had not complied with its charter.
   Grant, C. J.

{after stating the facts). Counsel for the defendant states his contention thus:

(1) That the complainant herein lost the right to collect toll because of the proceedings on the part of the highway commissioner for forfeiting that right.

(2) That the company ceased to be a body corporate and therefore lost the right to take toll by failing to build the road as required by law_ within ten years from the time the company was organized.

(3) That the company lost the right to take toll by reason of their failure to make the reports required by statute to the auditor general’s office.

(4) That the company being in default in the performance of the conditions of its charter was not in a position to invoke the aid of a court of equity to assist it in compelling the payment, by the public, of toll, which it only had the right to exact after compliance with its franchise.

Complainant’s counsel contend that:

(1) Act No. 91, Pub. Acts 1897, is unconstitutional.

(2) Whether the road was originally constructed of sufficient depth and width cannot be tried in this action.

(3) The remedy provided by the plank-road law (section 6625, 2 Comp. Laws) is exclusive.

Briefly stated the case is this: Complainant spent $36,000 in the construction of its road, 9 miles in length. The year after its organization the circuit court for the county of Kent, in chancery, on a hearing, decided that its road was completed according to the statute, and that it was authorized to receive toll, and dissolved the preliminary injunction which had first been issued. The condition of the road was not thereafter questioned by the township authorities for 16 years. The unprecedented rains of 1905 greatly damaged the road. Upon the statement of a private citizen the defendant, the highway commissioner, notified complainant to make extensive repairs. It had commenced these repairs before the serving of such notice. It spent over $3,000 in this work. Sixty days after such notice, and without any notice or opportunity for a hearing, the defendant filed a certificate with the clerk of the township of Walker, and on the same day notified complainant of the filing of such certificate, that it had failed to comply with his order, that its road was abandoned, and that it must cease and refrain from that time on to exercise its franchise or obstruct the road from public travel. If this action is valid the complainant has, without a day in any court, — without even a day before the defendant himself, — been deprived of its property and its franchise forfeited. To empower a township officer, without a hearing, to declare the charter of a corporation forfeited, every right to exercise its franchise lost, and its property destroyed, is repugnant to justice and every sound principle of constitutional government.

The action of the defendant cannot be sustained. The act expressly directs, on the part of the highway commissioner, “ a full and complete investigation and hearing the evidence offered by parties concerned.” His determination must be based upon such examination and evidence. While the statute does not expressly provide for a notice of hearing, yet it impliedly requires one. Miller v. Hoffman, 135 Mich. 319. We there said:

“ It is repugnant to sound principles of constitutional law that one’s rights shall be determined by a proceeding which does not afford him that opportunity.”

The only appeal provided is from a determination made by the highway commissioner after such hearing. It was the duty of the commissioner to give reasonable notice to the complainant of the time and place of hearing, and to afford an opportunity to produce proofs. The defendant was not sworn as a witness, and there is no evidence that he even made an examination. His action is unauthorized by the statute, and the proceeding is absolutely void.

The act provides for an appeal from the commissioner of highways of any township, acting as toll-road commissioner, to the circuit court in chancery. Is the court in chancery an appellate court, or a court solely of original jurisdiction ? If this provision of the act be held valid it results in holding that the legislature may provide for appeals to the court in chancery from the decision of every administrative or ministerial officer in the State, and also from judgments of inferior courts and tribunals. Under this contention the decisions of the commissioners of banking, of insurance, of railroads, and of a long list of commissions and boards may be made the subject of appeal to the court in chancery. It would place it in the power of the legislature to provide for appeals to courts of chancery in cases where the party has the constitutional right to trial by jury.

So far as my examination extends, this is the first attempt to constitute the court of chancery an appellate court. The question is an important one and is now presented to the courts for the first time in the history of the State. In the very nature of things, a court of equity is a court of original jurisdiction. The Constitution and the legislature have provided methods of procedure for litigants to appeal their cases at law from the lowest to the highest judicial tribunal where all questions involving their legal rights must be determined. Courts of chancery have jurisdiction only in those cases where the courts of law cannot afford an adequate remedy. The specific enforcement of contracts, the reformation of written instruments, the setting aside of deeds and other instruments- obtained by fraud, legal upon their face, and other cases which will readily suggest themselves, must find their remedy in the court of chancery. Naturally the suit must there originate. The relief can be granted only by a court of chancery. A suit for relief cannot originate in some other tribunal and then be appealed to that court which alone can grant relief. When the Constitution of 1850 was adopted the court of chancery was in existence with only original jurisdiction. It was formerly presided over by a chancellor. The office of chancellor was abolished by chapter 90 of the Revised Statutes of 1 §46. It was recognized as a separate court or at least as a separate division of the circuit court. By section 1 of that chapter the several circuit courts were made courts of chancery, and the powers thereof were to be exercised by the circuit judges, and “ the name and style of such courts sitting in chancery shall be, ‘the circuit court for the county of-, in chancery.’ ”

This chapter left the chancery jurisdiction as distinct from that of the circuit court at law as though they had been organized as two separate and distinct courts. While it is true that the term “ court of chancery” is not mentioned in the Constitution, yet the existence of that court is clearly recognized. Section 5 of article 6 prohibits the office of master in chancery. It requires the legislature so far as practicable to abolish distinctions between law and equity proceedings. The Constitution does not require the legislature to abolish distinctions between law and equity courts, but only between the proceedings in the two. The framers of the Constitution not only recognized the existence of the court of chancery as above shown, but they also provided by section 1 of the schedule that—

“The common law and the statute laws now in force, not repugnant to this Constitution, shall remain in force until they expire by their own limitations, or are altered or repealed by the legislature.”

The laws providing for the court in chancery, in force at the time of the adoption of the Constitution, were not of the class expiring by their own limitation; on the contrary, they were recognized as in force, and the court of chancery as existing, and those laws have ever since been recognized by the legislature and the courts as in force and as continuing the court in chancery with the jurisdiction entirely distinct from that of a court of law.

Nearly every legislature since the adoption of the Constitution has recognized the existence of the circuit court in chancery and its exclusive jurisdiction by enacting laws governing its procedures, and providing for enforcing equitable rights. It is immaterial, in my opinion, whether we say that under the Constitution the court of chancery is a part of the circuit court. If included in the term “ circuit court ” it is a distinct part of that court with a distinct and separate jurisdiction. This evidently is the construction which the legislature for 50 years placed upon, it, and is a practical construction which is binding upon the courts. This question is, however, in my judgment, put at rest by the decision of this court in Brown v. Kalamazoo Circuit Judge, 75 Mich. 274 (5 L. R. A. 226), decided in 1889, — 39 years after the adoption of the Constitution. The legislature there attempted to abolish the distinction between law and chancery courts by providing for a jury to try issues of fact in the chancery court and by making their decision final and binding upon the conscience of the judge. It was there held that the chancery system was retained with the powers and jurisdiction that it formerly possessed. Justice Campbell, speaking for the court, said:

“The universally recognized basis of equitable jurisprudence, found in statutes and constitutions, as well as in the reports and text-writers, is the inadequacy of the common law to deal with these subjects. A principal basis of that inadequacy was the nature of the tribunal passing on the facts. In common-law issues fact and lawcan be readily separated; but in the great majority of equity proceedings it is impossible to make any such separation. The functions of judges in -equity cases in dealing with them is as well settled a part of the judicial power, and as necessary to its administration, as the functions of juries in common-law cases. Our constitutions are framed to protect all rights. When they vest judicial power they do so in accordance with all of its essentials, and when they vest it in any court they vest it as efficient for the protection of rights, and not subject to be distorted ot made inadequate. The right to have equity controversies dealt with by equitable methods is as sacred as the right of trial by jury.”

Either the chancery court was abolished by the Constitution of 1850 (which no one claims), or else it was preserved with all the powers and jurisdiction it formerly possessed. It formerly possessed no appellate jurisdiction, but only original jurisdiction. It was continued as the same court. The case of Brown v. Kalamazoo Circuit Judge, supra, in my opinion, is conclusive, and. we can only maintain the right to originate equity suits and as well suits at law in other tribunals, and to appeal them to the circuit court in chancery by overruling that decision. It is a clear encroachment upon the power and jurisdiction of the chancery courts as they then existed and as they have since continued. I see no escape from the conclusion that the act is unconstitutional for this reason. The act, therefore, provides for no appeal from the arbitrary decison of the commissioner to a court having appellate jurisdiction to try the issue. We cannot presume that the legislature would have lodged the extraordinary power in a single individual to forfeit the franchises and property of its citizens, without providing for a judicial investigation and determination. The defendant is not a judicial officer, and, under our Constitution, the exercise of judicial power cannot be conferred upon him. We must, therefore, hold the entire act void.

The learned counsel for the defendant, however, urges that the complainant has not applied to the court of equity with clean hands, and that the court below denied relief for that reason, although it does not so appear by the record. The claims relied upon to show uncleanliness, which bars admission to the court of equity, are (1) that the complainant failed for some years to file its annual reports with the auditor general; (2) that it did not complete its road within the three years required by the statute ; (3) that it has failed to keep its road in proper repair. In other words, the contention is, that the defendant by an illegal and arbitrary act has assumed to deprive the complainant of all its property and property rights; has used and threatens to use violence to consummate his illegal act, and now says to complainant, “You, cannot have your day in court, because you have not acted in compliance with your charter.”

Two courses were open to the complainant: (1) To meet force with force in protecting its property. (2 ) To resort to the court to restrain the unlawful acts of the defendant and protect its property. It properly chose the peaceful and orderly one, — and now the defendant, in this collateral proceeding, seeks in this manner to obtain a determination of the very questions which the authorities universally hold can only be accomplished by the judgment of a court.

The existence of a corporation and the forfeiture of its. franchise cannot thus be determined in a collateral proceeding, especially where it was duly organized, has existed and enjoyed its property for nearly 1? years without question, and has been adjudged by a court of competent jurisdiction to have originally constructed its road as required by law. Several attempts have been made to question the rights of corporations in collateral proceedings. Canal Street Gravel-Road Co v. Paas, 95 Mich. 372, where a traveler, claiming that the bad condition of the road had forfeited the right of the company, forcibly passed its toll gate. We there said:

“The franchises of a corporation cannot be declared forfeited in such a proceeding.”

In Montgomery v. Merrill, 18 Mich. 338, it was said:

“It would be contrary to legal principles to leave the question [forfeiture of a corporate franchise] open to be determined collaterally.”

In Toledo, etc., R. Co. v. Johnson, 49 Mich. 148, it is said:

“Whether a railroad corporation has finished its road and put it in full operation, cannot always be a matter beyond dispute. Material .questions of fact might well arise which would have to be submitted to the consideration of a jury. The result must be that while in one case the jury might find the road to have been finished and in full operation, in another like case a different jury might come to a very different conclusion. So, if no one interfering, the company should, after the period fixed, proceed with the construction of its road, could third parties harass and annoy the company by tearing up, obstructing or destroying its track or roadbed? And if such acts were done or threatened would the company be powerless to protect itself or its property by seeking redress in the courts ? The law wisely seeks to avoid all such questions by declaring that they shall not be raised collaterally, but only in a direct proceeding instituted for such purpose. Montgomery v. Merrill, 18 Mich. 343; Cooley on Constitutional Limitations, pp. 253,254.”

The State only in a proper proceeding can question the validity of an incorporation. Detroit, etc., R. Co. v. Campbell, 140 Mich. 384. See, also, Traverse City, etc., R. Co. v. Seymour, 81 Mich. 378.

Parties desiring to attack corporations on the ground of forfeiture must do so by a proper proceeding involving a judicial inquiry. They cannot proceed illegally and by force, and, when the corporation seeks the restraint of such illegal action, be heard to say: “I will show to the court that you have not complied with your charter, and therefore you cannot interfere with my illegal and violent acts.”

The conclusion reached renders it unnecessary to discuss the other important questions presented.

Since writing the above opinion my Brother Montgomery has written one holding the act unconstitutional on other grounds. I fully concur with him that the act is also unconstitutional for the reasons stated by him.

Judgment reversed, and decree entered for the complainant, with costs of both courts.

Blair, J., concurred in the result reached by Grant, 0. J.

Montgomery, J.

I agree with my Brother Grant that Act No. 91 of the Public Acts of 1897 must be held unconstitutional, but I put my concurrence. upon other ground than that adopted by him in his opinion. I am not prepared to hold that in a proper case the legislature may not confer upon the circuit court, in chancery, appellate jurisdiction.

By section 1 of article 6 of the Constitution, the judicial power is vested in one Supreme Court, in circuit courts, in proba.te courts, and in justices of the peace. By section 8 of the same article, it is provided that the circuit court shall, have original jurisdiction in all matters civil and criminal not excepted in the Constitution and not prohibited by law, and appellate jurisdiction from all inferior courts and tribunals and a supervisory control of the same. Section 5 provides that the legislature shall as far as practicable abolish distinctions between law and equity proceedings. Under this Constitution legislation has been adopted which constitutes the circuit judge the chancellor, and the court over which he presides is called the circuit court in chancery. Any proceeding which might properly be originally launched in that court may be appealed there, if the legislature so directs, without doing violence to any constitutional provisions. If we say that the circuit court in chancery does not fall within the term “circuit court,” it follows that there can be no circuit court in chancery, for under the Constitution the whole judicial power is vested in the Supreme Court, in circuit courts, probate courts, and justices of the peace, and the chancery court is' not named at all. I by no means intimate that a class of cases might not be named in which an appeal to the circuit court in chancery would be prohibited by other considerations, for instance, a class of cases in which a trial by jury is given to the parties by the Constitution. But although this statute is not in my judgment unconstitutional for the reason stated, I think it does violate section 1 of article 6, above quoted, in that it is an attempt to vest judicial power in the toll-road commissioners, so-called.

It is unnecessary to set forth the provisions at length, as they appear in the opinion of Chief Justice Grant. The provisions which are essential to be considered are that the toll-road commissioner may require the company to repair and put the road in proper condition within a stated time, and that in default thereof the commissioner shall immediately make a certificate of such fact, and file the same with the township clerk of his township, and such toll road shall be considered abandoned, and all such toll-road companies shall cease to take toll for traveling thereon after such abandonment, and no person shall be required to pay toll for traveling thereon after such abandonment, and that after filing said certificate said toll-road commissioner shall notify any such toll-road company in writing of the filing thereof, and such company shall have no right thereafter to obstruct said road or prevent persons from passing over the same, or any part thereof, and it shall be the duty of the toll-road commissioner to prevent such obstructions, or to remove them if placed in said roads as provided in any other of the highways in his township; and further, it is provided whenever any toll-road commissioner, after a full and complete investigation and hearing the evidence offered by parties concerned, shall determine that the said toll road in question is not maintained in accordance with the conditions and provisions of its charter, said toll road or toll-road companies may within 20 days after such finding appeal, as in other cases provided, from the decision of said commissioner to the circuit court in chancery of the same county; but the orders of said commissioner shall be and remain in full force and effect until revoked by the order of said court.

This is an attempt to give to the order of the toll-road commissioner the force and effect of a judgment unless an appeal shall be taken therefrom. This is plainly the exercise of judicial power. People, ex rel. Kern, v. Chase, 165 Ill. 527 (36 L. R. A. 105); State v. Guilbert, 38 L. R. A. 519 (56 Ohio St. 575); Underwood v. McDuffee, 15 Mich. 361. That before a forfeiture of the franchise of the complainant can be worked there must be a judicial finding was determined in City of Detroit v. Plank-Road Co., 43 Mich. 140. See, also, Flint & Fentonville Plank-Road Co. v. Woodhull, 25 Mich. 99, where it was said :

“The question whether a corporation has violated its charter is judicial in its nature. * * * The violation of the charter cannot be legally made to appear, except on a trial in a tribunal whose course of proceeding is devised for the determination of questions of this nature.”

It is urged that the exercise of power by the toll-road commissioner is the exercise of the visitorial power of the State, and that it is not necessary that the corporation shall be given notice since the company accepts its right to do business subject to the authority of the State and under such conditions as the sovereign might see fit to impose, -and consequently that the legislature may revoke the license of an insurance company, for instance, without a hearing, and that the exercise of such power is not judicial in a sense. Beference is made to the case of Hartford Fire-Ins. Co. v. Raymond, 70 Mich. 485.

We think there has been a failure to distinguish between the withdrawing of authority from a corporation to do business in the State and the invasion of the substantial property rights of the corporation. That distinction is sufficiently noted in City of Detroit v. Plank-Road Co., supra.

Upon the propositions not herein discussed I concur with Chief Justice Grant.

Carpenter and McAlvay, J J., concurred with Montgomery, J.'


source: Caselaw Access Project

author: Montgomery, J.

license: Public Domain

text:
    BESSON v. CRAPO TOLL-ROAD CO.
    Constitutional Law — Toll Roads —Commissioners — Judicial Powers.
    This case, involving the constitutionality of Act No. 91, Pub. Acts 1897, follows the case of Bridge Street & Allendale Gravel-Road Co. v. Hogadone, ante, 638, presenting the same question.
    Appeal from Mecosta; Davis, J., presiding.
    Submitted June 18, 190?.
    (Docket No. 77.)
    Decided January 31, 1908.
    Bill by James A. Besson, highway and toll-road commissioner of the township of Green, against the Crapo Toll-Road Company to restrain the collection of tolls. From an order overruling a demurrer to the bill, defendant appeals.
    Reversed, and bill dismissed.

      M. Brown, for complainant.

      Cogger & Broomfield and C. A. Withey, for defendant.
   Montgomery, J.

This case presents some of the questions discussed in Bridge Street & Allendale Gravel-Road Co. v. Hogadone, ante, 638, decided herewith. In the present case the toll-road commissioner filed a bill against the defendant company alleging that in March, 1906, the defendant’s road was badly out of repair so that it was almost impossible to travel upon the same with teams, etc.; that on the 7th of March the toll-road commissioner served a notice upon the company complying with Act No. 91 of the Public Acts of 1897, and that after taking testimony a determination was made under said statute that the defendant was not entitled to take toll over the road, and notice was served upon defendant directing it to cease taking toll. Thereupon the present bill was filed asking that the defendant company be restrained from collecting toll, and to this bill the defendant demurred.

It is suggested in the brief that independent of the determination of the commissioner a court of equity might have jurisdiction to restrain the defendant from taking toll for the reason that as appears the road was badly out of repair. Evidently the bill was not framed with any such claim in view, and an examination discloses that the date at which it is said to have been out of repair was the 7th of March, 1906, whereas the determination was not made by the commissioner until the 6th of September, 1906, and there is no charge of the road being out of condition except as it may be inferred from the fact that the toll-road commissioner found it to be out of repair.

The case therefore presents the question whether Act No. 91 of the Public Acts of 1897 is, in so far as it confers jurisdiction upon the toll-road commissioner to determine that the road is out of repair and prohibit the defendant from taking toll, unconstitutional. That question has been considered in the case of Bridge Street & Allendale Gravel-Road Co. v. Hogadone, before referred to, and decided adversely to the contention of complainant.

The decree of the court below will be reversed, and the bill dismissed, with costs of both courts to defendant.

Blair, Ostrander* Hooker, and Móore, JJ., concurred.


author:
      Ostrander, J. Grant, C. J.
      Hooker, J.

text:
    GRAND LODGE OF THE ANCIENT ORDER OF UNITED WORKMEN OF THE STATE OF MICHIGAN v. BEATH.
    Life Insurance — Mutual Benefit Certificate — Beneficiary— Trústs — Estoppel.
    The holder of a mutual benefit certificate designated as beneficiary a woman who was willing to care for him in his last illness, falsely describing her as his cousin, and the assured, the beneficiary, and a third person, the order assenting, entered'into an agreement under which the woman was to receive a certain sum out of the proceeds of the certificate, the third person to be repaid his advancements for medical attendance and keeping the certificate in force, remainder to assured’s son. Subsequently assured and the woman were married and a new certificate issued naming her as wife. Held, her designation as beneficiary in the last certificate was valid, but that she could not repudiate the trust agreement, it being one proper for assured to make and there being no fraud. Ostrander and MoAlyay, JJ., dissenting.
    Cross-appeals from Wayne; Brooke, J.
    Submitted April 15, 1907.
    (Docket No. 84.)
    Decided January 31, 1908.
    Bill of interpleader by the Grand Lodge of the Ancient Order of United Workmen of the State of Michigan against Duncan C. Beath, Charles Neilands, and Sarah Neilands to determine title to the proceeds of a benefit certificate. From a decree awarding portions of the fund to defendants Beath and Sarah, and the balance to defendant Charles, defendants Charles and Sarah appeal.
    Affirmed.

      Firmón Lush, ( Washington I. Robinson, of counsel), for appellant Sarah.

      Hiram L. Rice (William E. FenwicJc, of counsel), for appellant Charles.

      Duncan O. Beath, in pro. per.
   Ostrander, J.

Complainant was organized under the provisions of 2 Comp. Laws, §§ 8017-8057. It paid into court the sum of $2,000, the amount due upon a benefit certificate issued to Abraham Neilands, who died October 5,1905. Defendants, claimants of the fund, interpleaded, and from a decree distributing the money, the son and the widow of the deceased have appealed.

In the certificate first issued to Abraham, his wife Jane was named as beneficiary. She died in 1898. A new certificate was issued, naming the son, Charles, as beneficiary. To this certificate after it was issued Abraham attached a writing, by the terms of which he professed himself indebted to Sarah Cumming in the sum of $500, which sum he desired paid out of the proceeds of the certificate by his son, the beneficiary. Later this second certificate was canceled and a third one issued, in which Sarah Cumming was named as beneficiary, her relation to Abraham being therein falsely stated to be that of cousin. -Pending the issue of this certificate, after consulting with defendant Beath, an arrangement for the purpose of securing payment of $500 to Sarah was entered into by Abraham, Sarah, and Beath. Two instruments were drawn and executed, one by Sarah and Beath, in which she assigned and set over to Beath all her right, title, and interest in the certificate and fund and empowered Beath to collect and receipt for the money, in consideration that he pay to her out of the fund $500; one by Abraham and Beath, by the terms of which Abraham appointed his attorney, Beath, to dispose of the money coming to his hands by paying his, Abraham’s, just debts, etc., by purchasing a gown for a person named, and by keeping the remainder for one year in trust for the son, Charles, leaving it discretionary with said attorney to pay the balance to Charles if he was regarded as worthy, otherwise to pay it to Sarah Cumming. He also gave to Beath a paper in form a demand note for $1,000, payable out of said certificate. Discovering that she had been represented to be a cousin, Sarah called the attention of Beath to the matter, told him she was not a cousin nor in any way related. Upon the suggestion of some one, Abraham and Sarah were thereafter married. When the ceremony was performed, Abraham was sick in bed, the marriage was never consummated, and, a few weeks later, Abraham died. Meantime, after the marriage, a new certificate had been applied for and had issued, naming Sarah (Cumming) Neilands, wife, as beneficiary. It is admitted that the member had the right to change the beneficiary as often as he pleased. It seems to be assumed that because of a limitation upon this power of appointment, Sarah Cumming was not a proper beneficiary. The court below sustained the assignment and the trust and ordered the balance of the money, some $861, paid .to the son. Both the wife and the son claim all of the fund. The case is a proper one for interpleader, since both the wife and the son are within the statute classes and if no later proper change of beneficiary was made the last valid designation of a beneficiary is found in the certificate in which the son is so named.

The son attacks the validity of the marriage. The apparent purpose of the marriage was to insure the payment of the sum of $500 to Sarah. Whatever the purpose, it was a valid marriage, and Sarah Cumming Neilands became, what Sarah Cumming was not, a lawful beneficiary. The last certificate,issued after the marriage, in which she was named as sole beneficiary, entitled her to receive and to keep the entire fund unless she is bound by the arrangement to which she, her husband, and defendant Beath were parties. It is her contention that the said trust arrangement was made with reference to the certificate then to be issued to Sarah Cumming, cousin, and was abrogated by the subsequent issuing of a new certificate to herself as wife. She insists, further, that a creditor could not be a beneficiary, and that he could not be, indirectly, made such by directions of the insured concerning the disposition of the fund, or by the agreement of the beneficiary to dispose of the fund in a particular way.

I have not found the articles of association or the bylaws of complainant or the certificate in the record. Omissions of this nature may and sometimes do lead to what appears to be a curious condition in the law. It is at least a reasonable inference that the by-law set out in the opinion in Grand Lodge A. O. U. W. v. McKay, 149 Mich. 90, was in force when the certificate in this case matured by the death of Mr. Neilands. The statute powers of complainant are to provide relief of the families and heirs of deceased members. By amendment to the statute, made in 1899 (Act No. 130), a section is added which is here set out:

“Sec. 12. The money or other benefit, relief, aid or sick benefit fund to be paid, provided or rendered by any corporation formed in pursuance of this act, shall not be liable to attachment, garnishment or other process and shall not be seized, taken, appropriated or applied by any legal or equitable process or by operation of law, to pay any debt or liability of the deceased member, or of any certificate holder, or of any beneficiary named in any certificate, or of any person who may have any rights thereunder.”

Trustee Beath and those he represents are none of them, excepting only the son, of the statute classes. The trustee cites and relies upon Woodruff v. Tilman, 112 Mich. 188; Cowin v. Hurst, 124 Mich. 545, and Great Camp K. O. T. M. M. v. Deem, 143 Mich. 652, upon the authority of which cases he contends the trust arrangement, unless rescinded, was enforceable. It is clear that Great Camp K. O. T. M. M. v. Deem is not in point.

Generally, the member of a benefit society has no property in the benefit but has the power to designate a bene: ficiary. Most often this power of appointment is limited, in the statute or in the articles of association or the bylaws of the association. Whether, the statute containing no prohibitory or restrictive words, such a limitation is to be found in the statute statement of the general purposes of the organization, is a question of construction of the language employed. It is held in Massachusetts that the statement of general purposes is such a limitation. Supreme Council Am. L. of H. v. Perry, 140 Mass. 580; Daniels v. Pratt, 143 Mass. 221. See, also, Supreme Lodge K. of H. v. Nairn, 60 Mich. 44. An opposed conclusion is reached in Pennsylvania. Maneely v. Knights of Birmingham, 115 Pa. 305. See, generally, 1 Bacon on Benefit Societies and Life Insurance, §§ 236-265. I think it cannot be said that Woodruff v. Tilman, supra, decided the question here presented. And see Michigan Mut. Benefit Ass’n v. Rolfe, 76 Mich. 146; Wolf v. Grand Lodge, 102 Mich. 23. In Cowin v. Hurst, supra, a legal beneficiary was designated. At the instance of the member, she entered into an agreement to pay the entire proceeds to one who could not be a beneficiary and who, unless he could be treated as a creditor, does not appear to have had any insurable interest in the life of -the member. The beneficiary was compelled, at the suit of this third person, to turn over the proceeds of the certificate which had been paid to her by the association. It is said in the opinion that the only persons concerned in the validity of the transaction were the complainant and the association and if the association was willing to waive its defense and pay the money to the beneficiary, she,the beneficiary, could not be heard to say that the disposition of the money in her hands was one the association had no right to provide for. This argument seems tome to be faulty for the reason that the contract of indemnity was valid, the association could do nothing but pay the money to the beneficiary named in the certificate, and in a suit brought by her for the money could not have set up, in its defense, the fact that she proposed to devote the money to a particular purpose. If it were otherwise, the value of such a trust agreement would depend upon whether it had come to the knowledge of the association, and if it had, whether it considered it best to contest the demand of the beneficiary. To protect itself and the business it was organized to carry on, it would be obliged to require from each beneficiary of a deceased member a denial that any agreement existed to dispose of the fund for a purpose not recognized by the statute. While the facts in Cowin v. Hurst are somewhat peculiar, I think the decision is authority for the proposition that where beneficiaries of a society are limited to the families and blood relatives of a member, such member may, by designating a proper and consenting beneficiary, himself dispose of the benefits to whomsoever he pleases, whether the actual beneficiary has or has not an insurable interest in the member’s life. But I am also of opinion that the proposition stated ought not to be the law. The notion that a proper beneficiary may not keep the fund which the association is bound by its contract to pay him, because he has taken it in trust for one who could not be a beneficiary, ought not to be controlling, because it is in effect mischievous and the contract rights of those who could not be beneficiaries but who claim as distributees should be held to be subservient to the enforcement of a rule of sound public policy. It has been pretty uniformly held that the right of a member in the benefit fund is not property, that the right of the beneficiary is not vested but inchoate, and that, in the absence of restrictions, the right of a member to change the beneficiary at pleasure is clear. Union Mutual Ass’n v. Montgomery, 70 Mich. 587. Neither has' any assignable interest in the fund. It is illogical to hold that a beneficial society may accumulate and pay out funds only to the families or heirs of deceased members, to hold that one not of the statute classes may not be named as a beneficiary of such a fund in the certificate. Grand Lodge A. O. U. W. v. McKay, supra; Supreme Lodge Order of Mutual Protection v. Dewey, 142 Mich. 666 (3 L. R. A. [N. S.] 334); and to also hold that a proper beneficiary may be bound by the direction of the member, and his own consent, to pay the money to whomsoever the member may designate. To find such a trust arrangement valid and enforceable is to deny to the member the right to change his beneficiary; if not, then it is evident that the trust may be avoided by a change of beneficiary, in which manner a-convenient way to perpetrate fraud is established. The member of such an organization is as much bound by the statute as is the aggregate of membership. It is unlawful for him to designate as beneficiary a person not entitled to relief. Every one is supposed to know that he may not do so. But if he does do so, and the courts affirm his action by compelling the beneficiary to carry out his wishes, attorneys cannot be blamed for advising that the statute and rules of the association may be in this way circumvented. In so far as Cowin v. Hurst, supra, is opposed to these views, it should not, in my judgment, be followed.

In the opinion of Chief Justice Grant, it is said that the trust arrangement ought to be enforced because it was dictated by the common instincts of humanity, and because repudiation of the arrangement by the widow is repulsive to common honesty; an argument of some plausibility and one which in a proper case would be of force. It entirely overlooks the essential propositions, which I again repeat, that the fund wherewith to pay the promised indemnity is acquired by an assessment upon members of the association whose membership depends upon paying such assessments and who are, as the insured in this case was, bound to contribute and are organized and have agreed to contribute and have a legal status only for the purpose of contributing “ to provide for the relief of the families and heirs of deceased members of said fraternity;” that until the death of a member the beneficiary has no vested or assignable interest in the fund, the member no right except to name his beneficiary within the statute classes. It is for this reason that corporations like the complainant are not considered as engaged in the business of life insurance, nor subject to the provisions of the statutes relating to life insurance or mutual benefit companies, associations, or corporations. 2 Comp. Laws, § 8056. It is for this reason that the legislature, in 1899 (Act No. 130), added to existing provisions the one already herein set out. See Hunt v. Branch Circuit Judge, 141 Mich. 423. It is not necessary to read into the charter any implied prohibition. The prohibition to be enforced here is express. Traffic in such certificates, or in the fund which upon the death of a member is contributed by those surviving him, is forbidden by the statute, and if continued it will be because the courts approve.

Some effort was made by Abraham and Sarah after their marriage to rescind or recall the assignment and the trust arrangement. The evidence requires us to find the last designation of a beneficiary a proper one. By this is meant that the wife of the member was a proper beneficiary and that the designation was intelligently made. Either the member had the right to make this change or else he lost it when he made the trust agreement. It is true he named as beneficiary a party to the trust agreement. But when she made the agreement she was not, in fact, a lawful beneficiary. By the marriage she acquired the status of a lawful beneficiary. And he might, of right, unless that agreement prevented, have named his son. If he had named his son, would it be contended that the trust agreement could have been enforced ?■ I think the conclusion I have reached is supported by the facts just stated, that is to say, the trust agreement was not made' by a person who was then named ór could lawfully have been named as a beneficiary.' I prefer, however, to rest my conclusion upon the broader ground that the arrangement was an attempt to accomplish by indirection what the law will not permit to be directly accomplished. For reasons which have been given, it should be held that this beneficiary is entitled'to the fund discharged of all obligations attempted to be created by the so-called trust arrangement.

The decree of the circuit court should be reversed, and a decree entered in this court giving the entire fund to the appellant Sarah Neilands.

Because of the form of the action and the responsibility of the prevailing party for the apparent fiduciary character of defendant Beath and his relation to the fund, no costs should be awarded.

McAlvay, J., concurred with Ostrander; J.

Grant, C. J.

The facts in this case are substantially parallel to those in Woodruff v. Tilman, 112 Mich. 188, and Cowin v. Hurst, 124 Mich. 545. The decree of the court below is in accord with those cases and others which will be found cited therein. To reverse this case would be to overrule those. The sound principle upon which those cases rest is that one will not be permitted to repudiate his trust and keep the trust funds when, with a full knowledge of all the facts, he voluntarily agreed to, and accepted, the terms of the trust, or in other words, one cannot- obtain possession of funds committed to his care by a trust agreement and then plead the illegality of the agreement.

This is not a case for the application of the rule that parties who, having voluntarily entered into a fraudulent agreement, will be left to lie in the bed they have made. In such case the law affords no remedy and equity affords no relief. There is no claim of fraud in this case. The arrangement was a very proper one for the deceased to make. He had no property or means of support. He could not even pay his premiums. He could not keep his policy alive unless he could borrow money upon it. Unless he could in some way obtain the benefit of this insurance, his only hope of relief was death or the poorhouse. Mrs. Gumming had taken care of his wife during her last illness, for which he very properly wished to compensate her. He was very ill, and she was willing to take care of him in his last sickness. It was necessary to procure medical care and to provide for his support. It was also natural that he should desire to make provisions for his funeral expenses. For this purpose this arrangement was entered into between Beath, Mr. Neilands, and Mrs. Cumming. Not only that, but the complainant’s local lodge assented to it. Mr. Beath placed the matter before that lodge; a committee was appointed who investigated and. reported, after which the lodge kept his policy alive by giving credit for his monthly dues on the promise of Mr. Beath to pay for them under the arrangement. The arrangement, was one dictated by the common instincts of humanity. She was made a beneficiary, and subsequently married him for the sole purpose of carrying out the arrangement. Her attempted repudiation of the trust is repulsive to common honesty.

The arrangement is not contrary to public policy. It is not expressly prohibited by complainant’s charter. I think the language of section 8049, 2 Comp. Laws, is of some significance in this connection. It gives power to the corporation—

“To create, hold and disburse beneficiary, relief, general, or other funds for the benefit of sick or disabled members: * * * Provided, that nothing in this section shall be construed as giving to a grand lodge power to make assessments for the purpose of paying sick benefits.”

The old man was sick. The company, under this section, could use funds to alleviate the suffering of a sick member, provided they could do so without assessing the members. The company assented to the humane arrangement, and in this way provided funds without any injury to the corporation or making any assessment. I do not think that courts should read into the charter an implied prohibition. The legislature may amend the charter by making such arrangements absolutely void, and the matter, in my judgment, should be left to the legislature. Some other courts seem to have reached a different conclusion, but I do not think their reasoning is so convincing as to require this court to overrule its former decisions.

I am for affirmance of the decree.

Blair, Montgomery, Carpenter, and Moore, JJ., concurred with Grant, C. J.

Hooker, J.

I concur in the result reached by Chief Justice Grant, upon the authority of Cowin v. Hurst, 124 Mich. 545, inasmuch as the bill filed in the case is for interpleader. As said in Cowin v. Hurst, were the complainant denying the right of Mr. Beath, a different question would be presented. This decision does not in my opinion confer the power upon members of mutual benefit societies to circumvent the law, for it must always be dependent upon the acquiescence of the company, if the intimation of Chief Justice Grant in that case, that the company may successfully dispute the right of a beneficiary, or cestui que trust, who has not an insurable interest, is the law. If the rule laid down in that and other cases cited, shall be found to be in contravention of a sound public policy, the legislature can easily change it, which I think a method preferable to the overturning of a rule that seems well established.

The decree should be affirmed.


author: Ostrander, J.

text:
    UNITED STATES GYPSUM CO. v. KENT CIRCUIT JUDGE.
    Eminent Domain — Condemnation Proceedings — Appeal—Right.
    Section 669, 1 Comp. Laws, does not provide for an appeal to the circuit court, in condemnation proceedings, from any order or determination of the probate court or the judge thereof, nor is such an appeal authorized by any other provision of law.
    Mandamus by the United States Gypsum Company and others to compel Willis B. Perkins, circuit judge of Kent county, to vacate an order setting aside certain condemnation proceedings.
    Submitted June 4, 1907; reargued November 11, 1907.
    (Calendar No. 22,286.)
    Writ granted January 31, 1908.

      Butterfield & Keeney, for relator.

      Stevens, McPherson & Bills ( Charles E. Ward, of counsel), for respondent.
   Ostrander, J.

The Pere Marquette Railroad Company proceeded in the probate court for the county of Kent to condemn certain lands for a right of way. To the petition an answer was filed by relators, by which the sufficiency of various averments of the petition is challenged as well as the truth of some of them, and, among others, an issue of fact was made, the substance and effect of which is sufficiently indicated by the following quotation from the answer:

“ In further defénse of this action, we allege that this court has no jurisdiction to entertain this proceeding because the same is not in fact instituted at the instance of said Pere Marquette Railroad Company, norfor or on its account, nor in order to take or condemn the lands therein described for the public use; but that said proceeding is instituted at the instance of William F. Dummer, and for his account, and in order to take and condemn said lands for his private and individual use and benefit.”

There was a preliminary hearing before the probate judge, at which testimony was introduced, resulting in an order with recitals and a conclusion, here set out:

“ The court finds, as a matter of fact, from the evidence in the cause, that this condemnation proceeding was instituted in pursuance of a contract in writing dated September 28, 1905, made between said Pere Marquette Railroad Company and said William F. Dummer, wherein and whereby it is contemplated that the property described in the petition be taken and condemned in the name of said Pere Marquette Railroad Company for the use and benefit of said William F. Dummer, and upon the considerations in said contract expressed; and the court also finds that it is not sought to take or condemn said property for the public use, but for the private use of said William F. Dummer.
“And this court being of opinion that it has, under the Constitution and laws of this State, no jurisdiction or authority to entertain proceedings for such purpose:
“ It is, therefore, ordered, adjudged and decreed that this court has no jurisdiction over the lands of said United States Gypsum Company to condemn the same on the petition of said Pere Marquette Railroad Company; that it is without power or authority to take any further proceedings herein; and that said petition be and the same is hereby dismissed out of this court.”

The petitioner, the railroad company, claimed and took an appeal to the circuit court under the provisions of 1 Comp. Laws, § 669. In the circuit court, testimony was introduced and a finding was made that sufficient cause had not been shown against granting the prayer of petitioner and the opinion of the court, first expressed, was, that the order of the probate court should be reversed, an order in accordance with the finding entered, and the record remanded. Later, after hearing counsel, the court being of opinion that respondents had waived the right to object to the exercise of appellate jurisdiction, an order was made that the proceedings be continued in the circuit court before a jury. Thereupon relators applied to this court for a writ of certiorari to review the action of the circuit court, asserting, among other things, that the circuit court had no jurisdiction to entertain the appeal. Instead of granting the writ, an order to show cause was made. Pere Marquette R. Co. v. United States Gypsum Co., 148 Mich. 308. In obedience to that order, the record of the proceedings and a transcript of the testimony taken have been returned here.

It is provided by statute, 2 Comp. Laws, § 6245, that—

“All persons whose estate or interest are to be affected by the proceedings may show cause against the prayer of the petition, and may disprove any' of the facts alleged therein; and said court or judge shall hear the proofs and allegations of the parties; and if no sufficient cause is shown against granting the prayer of the petition, said court or judge shall make an order appointing three disinterested and competent freeholders as commissioners to ascertain and determine the necessity for taking such lands, * * * and to appraise and determine damages or compensation to be allowed to the owners,” etc.

It is a necessary consequence of applying this statute that if sufficient cause is shown why commissioners should not be appointed, an order appointing them should be refused. The statute does not point out the procedure and it does not in terms provide for a review of such determination as shall be made. .The subjects and the scope of this preliminary hearing and the effect of the decision made therein have not been, generally, discussed or determined by this court. It was said in Manistee, etc., R. Co. v. Fowler, 73 Mich. 217, 219, a case brought here by certiorari, that—

“The question whether there was any sufficient cause for resorting to condemnation proceedings is preliminary in its character, and should have been settled in some separate way in advance. It involves both fact and law.”

In Cincinnati, etc., R. Co. v. Bay City, etc., R. Co., 106 Mich. 473, 477, which case came here on appeal, it was said:

“The next question arises over the right to condemn this property. It is said that this was a preliminary question; that the court should have determined the question of its necessity to the operation of the defendants’ railroad before calling commissioners; and that this question should have gone to a jury. In substance, this contention is that this property is not subject to condemnation in this proceeding because it is a condemnation of the track; that the commissioners can only determine the questions of necessity for the purposes of petitioner, and value, and not whether this property is subject to con-" demnation, which is a jurisdictional question of fact. If the petition shows it to be subject to these proceedings, and the answer raises no issue of fact upon it, the jurisdiction is admitted. If it raises an issue of law, the court should determine it; if an issue of fact, that must be settled at some stage of the proceeding. 'Whether this answer tenders such issue of fact, and, if so, whether it must be determined in advance and not later, are the questions here. Apparently, the court determined that there was no issue of fact upon this subject, and that the property was subject to condemnation. The petition prays the appointment of commissioners. Whether granted or not depends upon the existence of proper subject-matter. If the land sought to be condemned is exempt, there is no occasion for the appointment of commissioners. The defendants claim that it is, and unless, from the admitted or uncontroverted facts deducible from the petition and answer, it can be said that it is not exempt, the circuit judge was in error. Manistee, etc., R. Co. v. Fowler, 73 Mich. 317; Toledo, etc., R. Co. v. Campau, 83 Mich. 35. Section 3331, 3 How. Stat., subjects railroad property to condemnation, excepting ( under some circumstances) the track and right of way. The argument is made that this is an attempt to condemn the track and right of way, and, if this appeared from the petition and answer, it might be necessary to try the question. But it does not, and we think the circuit judge was right in declining to allow the question to be raised.”

See, also, Toledo, etc., R. Co. v. Campau, 83 Mich. 33. If preliminary objections are overruled and an order appointing commissioners or a jury is made, jurisdictional questions are by the settled practice freely reviewed in certiorari proceedings, seasonably instituted, and, if the proceeding is concluded by an appraisal or by the report of a jury, upon the appeal allowed by 2 Comp. Laws, § 6248, to either party to the proceeding. See Toledo, etc., R. Co. v. Munson, 57 Mich. 42; Clay v. Improvement Co., 34 Mich. 204; Ryerson v. Brown, 35 Mich. 333; Port Huron, etc., R. Co. v. Voorheis, 50 Mich. 506; Flint, etc., R. Co. v. Detroit, etc., R. Co., 64 Mich. 350; Toledo, etc., R. Co. v. Detroit, etc., R. Co., 62 Mich. 564; Board of Health v. Van Hoesen, 87 Mich. 533 (14 L. R. A. 114); Detroit, etc., R. Co. v. Campbell, 140 Mich. 384; Detroit, etc., R. Co. v. Hall, 133 Mich. 302; Saginaw, etc., R. Co. v. Bordner, 108 Mich. 236; Toledo, etc., R. Co. v. East Saginaw, etc., R. Co., 72 Mich. 206.

An order refusing the prayer of the petition was reviewed in mandamus proceedings in Berrien Springs Water-Power Co. v. Berrien Circuit Judge, 133 Mich. 48, and in certiorari proceedings in Board of Health v. Van Hoesen, 87 Mich. 533. In Detroit United Ry. v. Oakland Circuit Judge, 146 Mich. 540, we declined to review such an order in mandamus proceedings; the cause was later brought here by writ of certiorari. Detroit United Ry. v. Barnes Paper Co., 149 Mich. 675. In each of these cases, the questions presented depended for solution upon no controverted facts.

The single question presented here is: Does 1 Comp. Laws, § 669, permit an appeal in such cases from the probate to the circuit court? It is said the question was answered in the affirmative in Defoe v. Bay Circuit Judge, 116 Mich. 567. It is the general rule that unless the statute expressly gives an appeal there is no appeal, nor can a review be had by writ of error, in special or extraordinary proceedings, not according to the course of the common law. Lorimer v. Wayne Circuit Judge, 116 Mich. 682; Cross v. People, 8 Mich. 113; Smith v. Superintendents of the Poor, 34 Mich. 58; Auditor General v. Pullman Palace Car Co., 34 Mich. 59; Detroit, etc., R. Co. v. Hall, 133 Mich. 302; Boyne City, etc., R. Co. v. Anderson, 146 Mich. 328 (8 L. R. A. [N. S.] 306); Sparrow v. Ingham Circuit Judge, 109 Mich. 272. Proceedings to condemn land are special and summary in character and, while subject to judicial review and supervision for certain purposes, are not judicial proceedings. Toledo, etc., R. Co. v. Dunlap, 47 Mich. 456, 462; Michigan, etc., R. Co. v. Monroe Circuit Judge, 144 Mich. 44. It has been the uniform practice not to interfere upon the statutory appeal to this court with the determination made by a jury in condemnation proceedings, if such determination is supported by competent testimony. Detroit, etc., R. Co. v. Campbell, 140 Mich. 384; Saginaw, etc., R. Co. v. Bordner, 108 Mich. 236; Detroit, etc., R. Co. v. Hall, supra. The fact that the jury is a constitutional tribunal does not furnish a reason for saying that the same rule should not be applied in considering the findings made by the judge upon the preliminary investigation. The jurisdiction of the probate court in condemnation proceedings is not a part of the ordinary and general jurisdiction of that court. It is no other or different than that conferred, in the same statute, upon the circuit courts. The right of appeal given by 1 Oomp. Laws, § 669, does not depend upon the finality of the order appealed from (Holbrook v. Cook, 5 Mich. 225), but upon the assertion by one party or the other that he is aggrieved by the order appealed from. No good reason is apparent for permitting an appeal by one party to condemnation proceedings and denying the right to the other party. The summary character of the proceedings is at once destroyed when such a practice is permitted. Neither is it possible to separate section 669 from its context, or to consider the appeal provided for apart from the forms and practice there indicated. There is employed in the opinion in the Defoe Case, supra, language which indicates a purpose to distinguish the particular question presented upon the ground that the disposition of the fund, which was in the hands of the court ought of right to be made according to the rules of the common law and not summarily, and that the court did not intend an invasion or limitation of the general rule which is above stated. There is, however, reasoning used which in my judgment warranted the petitioner here in assuming the case to be authority for its appeal. It is a matter of practice and not a rule of property which is involved. I have learned of no other instance in which it has been assumed that such an appeal was warranted, and as the Defoe Case is, in my judgment, out of line with other decisions of this court, some of which have been cited, and is opposed to the proper controlling rule, it should be overruled. It must be held that no appeal lies to the circuit court in condemnation proceedings from any order or determination of the probate court or the judge thereof. It follows that the circuit court for Kent county had no jurisdiction to entertain the appeal. We have examined and decide adversely to petitioner the contention that jurisdiction of the circuit court should be predicated of the action of the landowner. Appellate jurisdiction was asserted by that court and such jurisdiction cannot be conferred by consent. The order and determination of the circuit court in the premises must be vacated with a direction to remand the record and proceeding to the probate court. For this purpose, the writ of mandamus will be granted.

In view of the circumstances disclosed, and the fact that the time for applying for a common-law writ of certiorari has expired, we think it proper to say that, if it is so advised, petitioner may now, upon motion and upon the record now in this court, have the writ to review the action of the probate court.

Grant, O. J., and Blair, Montgomery, Hooker, Carpenter, and McAlvay, JJ., concurred. Moore, J., concurred in the result.


author: Carpenter, J.

text:
    PEOPLE, for use of DAVIS, v. CAMPFIELD.
    1. Public Works — Contracts — Bonds — Rights oh Subcontractors.
    A subcontractor has no right of action on a bond given by a public contractor under sections 10743-10745, 3 Comp. Laws, to secure laborers and materialmen.

      % Same — Subcontractors—Materialmen—Distinction.
    One who furnishes materials to a contractor is not a subcontractor unless he agrees that the original contract shall be the standard by which the performance of his pontract shall be judged.
    3. Same.
    One who agrees to furnish a public building contractor with a certain style of sash stiffeners known to the trade, according to measurements to be furnished by the contractor, is a materialman and not a subcontractor, though the style of the sash stiffeners is named in the original contract and specifications.
    4. Appeal and Error — Review — Errors not Affecting Result.
    Alleged errors in rulings resulting in a determination that an obligation to furnish certain materials for a building was imposed upon the contractor by his contract will not be reviewed where it should be held, as a matter of law, that the obligation was so imposed.
    Error to Washtenaw; Kinne, J.
    Submitted October 15, 1907.
    (Docket No. 71.)
    Decided January 31, 1908.
    Assumpsit by the people of the State of Michigan, for the use and benefit of Robert J. Davis, against Edwin M. Campfield and the Title Guaranty & Trust Company upon a statutory bond. There was judgment for plaintiff, and defendants bring error.
    Affirmed.

      Henry B. Graves, for appellants.

      Thomas D. Kearney, for appellee.
   Carpenter, J.

Plaintiff recovered a verdict and judgment in the circuit court against defendant, the obligor in a certain bond executed in conformity with sections 10743-10745, 3 Comp. Laws, for certain sash stiffeners used in constructing the Ann Arbor high school building. Defendant Campfield had the contract to do the carpenter work on said building and it is settled by the verdict of the jury that the stiffeners in controversy were furnished in pursuance of a contract made by him with relator.

First. It is insisted that the trial court erred in not directing a verdict for defendants on the ground that relator was a subcontractor. If he was a subcontractor, it is settled that he has no right of action on the bond in suit. Avery v. Board of Sup’rs of Ionia Co., 71 Mich. 538; People, for use of Winkle Terra-Cotta Co., v. Cotteral, 119 Mich. 27.

Was he a subcontractor ? According to his testimony, which, for the purpose of this case, we must assume to be true, relator agreed to furnish the stiffeners for all the window sashes in the building at $1.50 per window. He was not to install these stiffeners, but he had to make them, and to make them, not in accordance with the specifications for that contract (indeed those specifications which relator had seen merely provided for “Davis or other equal steel stiffeners ”), but to make them in accordance with measurements furnished him by a subcontractor to whom defendant Campfield had sublet the work of putting in the window sash, and to whom Campfield had referred him. It is to be inferred from his testimony that relator would comply with his contract if he furnished stiffeners which conformed to these measurements, though they did not conform to the contract between the principal contractor and the board of education. This circumstance distinguishes the case from Avery v. Board of Sup’rs of Ionia Co., and People, for use of Winkle Terra-Cotta Co., v. Cotteral, supra. In each of those cases the person adjudged to be a subcontractor bound himself to perform in accordance with the original contract, and that is why he was held to be a subcontractor. This is to be necessarily inferred from the opinion in the Cotteral Case, and it is expressly stated in the opinion in the Avery Case, in these words:

“The subcontractor is an under contractor, — one who takes under the original contract, and is to perform in accordance with the original contract

Under this definition, which we think correct, we determine whether a person furnishing material is a subcontractor under sections 10748-10745 by this test, viz., Has he agreed that the original contract shall be.the standard by which the performance of his contract shall be judged ? If he has, he is a subcontractor and cannot recover on the statutory bond. If he has not made that agreement, he is an ordinary materialman and can recover. Under this definition, and according to this test, a manufacturer who agrees to furnish the doors and sashes for a building in accordánce with the terms of the original contract is a subcontractor, while if he merely agrees to furnish them in accordance with certain measurements, he is a materialman. The question may be asked: Will you classify as a materialman or as a subcontractor one who furnishes articles under a contract made by him in entire ignorance of the terms of the original contract, but which does in fact conform precisely to those terms ? In such cases it is true that the fulfillment of his contract is at the same time the fulfillment of the original contract, and thus the original contract becomes the standard by which the performance of his contract is judged. I answer that he is none the less a materialman, because he has not agreed that the original contract shall be the standard, and, so far as he is concerned, its becoming such is a mere incident. Whether or not he is a subcontractor depends on his contract, and not upon a contract of which he is ignorant. He cannot become a subcontractor unless he contracted to become such. But the difficulty suggested by these cases will rarely be encountered, for such cases will seldom arise. Generally speaking, the distinction between the obligation of the subcontractor and that of the materialman, under the test approved in this opinion, will be clear. Almost all contracts for the erection or repair of public buildings impose on the principal contractor an obligation, and this becomes an obligation of a subcontractor, to furnish material or articles which not only conform to the contract, but which will satisfy the honest judgment of the architect in charge, while the material-man discharges his obligation by furnishing articles which conform to his contract. Under the reasoning of this opinion, relator was not a subcontractor. For, as already shown, defendant Campfield could not have rejected the stiffeners merely because they did not conform to the original contract.

Second. It was determined in the lower court that the obligation to furnish the stiffeners in suit was imposed upon defendant Campfield by his contract to do the carpenter work. Defendant complains of various rulings which resulted in this determination. It is a sufficient answer to all these complaints to say that it should be held as a matter of law that his contract did impose that obligation on defendant Campfield. Those stiffeners were, as already stated, distinctly referred to in the specifications for the carpenter work, and it is to be presumed that his contract, which is not a part of the bill of exceptions, required defendant Campfield to do the work mentioned in the specifications.

The judgment should be affirmed.

Ostrander, Hooker, Moore, and McAlvay, JJ., concurred.


author: Moore, J.

text:
    RICE v. CITY OF MUSKEGON.
    1. Saving Questions for Review — .Case Tried to Court — Request for Findings — Exceptions.
    Where, in a case tried to the court without a jury, there is no request for written findings of fact and law, and no exceptions are filed, the conclusions reached by the court upon the facts and the law are not open to review.
    2. Same — Statement of Court — Office as Finding.
    A statement made by the court in deciding a case tried to him without a jury, no request for written findings of fact and law being made, is not the findings contemplated by Circuit Court Rule No. 26, necessary to secure a review of the facts in this court.
    3. Evidence — Admissibility—Hearsay—Partnership Affairs— Competency of Agent.
    The manager of the- affairs of a partnership, who has personal knowledge of the matters about which he testifies, is competent to testify to the membership of the firm and it is not necessary that such fact be shown by a member of the firm.
    4. Taxation — Assessment—Review—Estoppel.
    A person having no property in a municipality liable to assess- - ment cannot be estopped because of failure to appear before the board of review.
    Error to Muskegon;. Sessions, J.
    Submitted October 16, 1907.
    (Docket No. 75.)
    Decided January 31, 1908.
    Assumpsit by Mary M. Rice against the city of Muskegon for taxes paid under protest. There was judgment for plaintiff, and defendant brings error.
    Affirmed.

      James E. Sullivan, for appellant.

      Nims, Hoyt, Erwin & Vanderwerp, for appellee.
   Moore, J.

This suit is brought to recover a personal tax paid under protest. The case was tried before the circuit judge who rendered a judgment in favor of the plaintiff. The case is brought here by writ of error. One of the reasons assigned in the protest why the tax was invalid reads as follows:

“Because at the time said assessment was made by the assessor of the city of Muskegon I had no personal property liable to taxation except a partnership interest in two boats owned by Parks & Rice, a copartnership, whose business was principally carried on at the time of said assessment at the city of Grand Haven, Ottawa county, Michigan, which boats were assessed in the city where the office of said copartnership was located and where the business of said copartnership was principally carried on, to Parks and Rice, the copartners aforesaid; and said assessment on said boats was paid to the treasurer of the city of Grand Haven, Michigan, on December 16, 1905.”

No request for written findings of fact and law was made by either party. The court made a statement in deciding the case, which was taken down by the reporter, but this is not the findings contemplated by Circuit Court Rule 26.

In the case of Haines v. Saviers, 93 Mich. 441, this court said in referring to this rule:

“He who desires to review in this court a judgment, wherein a trial was had before the court without a jury, and to question the conclusions reached by such court upon the facts and the law, must have a written finding, both of facts and law, and must take his exceptions thereto.”

See, also, Child v. City of Jackson, 93 Mich. 503; Gemberling v. Lazarus, 100 Mich. 324.

Nor were exceptions filed. Where no exceptions are taken to the findings of facts made by the circuit judge, the appellate court cannot review the facts found or determine whether the findings are supported by the evidence. Dodge v. Kennedy, 93 Mich. 547; Peabody v. McAvoy, 23 Mich. 526; Barnum v. Andrews, 106 Mich. 81; Hubbard v. Garner, 115 Mich. 406; Haines v. Saviers, 93 Mich. 440; Child v. City of Jackson, 93 Mich. 503; Gemberling v. Lazarus, 100 Mich. 324; Weist v. Morlock, 116 Mich. 606.

Where a case is tried by a court without a jury and no exceptions are taken to the findings of the court, the only question that can be considered in the appellate court is whether the findings support the judgment. Wilcox v. Township of Eagle, 81 Mich. 271; Robards v. Waterman, 96 Mich. 233.

Even if the opinion of the court could possibly be treated as findings, as there are no exceptions to such findings, this case must be affirmed unless there was reversible error on the trial or unless there is a total want of evidence to support the judgment. Crusoe Bros. Co. v. Kudner, 136 Mich. 587.

Was there a total want of evidence? Mr. Parks of the firm of Parks & Rice died before the trial. Mrs. Rice was not sworn. It is said by counsel that she was out of the State. The membership of plaintiff in the firm of Parks & Rice was shown by Byron W. Parks. It is said one of the firm should have testified. It is also said that the testimony was hearsay. We think neither of these contentions is well taken. The witness was the manager of the business of Parks & Rice. His testimony indicates very clearly that he had personal knowledge of the things ■about which he testified. What we have said about this witness also applies in principle to the testimony of Mr. Lange. There was testimony upon which to base the conclusion reached by the circuit judge. It is said plaintiff is estopped because she did not appear before the board of review. We do not recall any case where one having no property in a municipality liable to assessment has been held estopped because of failure to appear before a board of review. See Woodmere Cemetery Ass’n v. Township of Springwells, 130 Mich. 466.

Judgment is affirmed.

Ostrander, Hooker, Carpenter, and McAlvay, JJ., concurred.