author: Bird, J.

text:
      In re PAULSON. KARRIB v. BAILEY.
    1. Juveniee Coubts — Jubisdiction — Process — Parents — Notice —-Statutes.
    In delinquency proceedings before tbe juvenile court against a girl of tbe age of 14 years and 9 months, failure to serve a summons upon tbe superintendent or matron of tbe Kent county juvenile borne, in whose custody tbe child was, to appear with tbe child, and also failure to give notice of tbe bearing to tbe parents of tbe child, as required by 1 Comp. Laws 1915, § 2015, was fatal to tbe jurisdiction of tbe court.

      2. Same — Notice—Parents—Waiver.
    Tbe purpose of said summons and notice being to advise the child, as well as the parents or other person having • her custody, as to the charge, and to give a reasonable time to prepare for the hearing, any attempt by the parents or others to waive same would be of no avail.
    3. Same — Waiver oe Notice — Eeeect.
    The mother of the child, having had no legal notice of the hearing, was not bound thereby, since her attempt to waive said notice was without effect.

      4. Same — Notice-^County Agent.
    It was also the duty of the court to notify the county agent to be present at the hearing, as required by the law, which appears by the record to have been omitted.
    Habeas corpus proceedings by Matilda Paulson Karrib against Hazel D. Bailey, superintendent of the Industrial Home for Girls, to obtain the custody of Inez Paulson and certiorari to review such proceedings before Clark E. Higbee, judge of the juvenile division of the probate court of Kent county.
    Submitted October 20, 1920.
    (Calendar No. 29,409.)
    Proceedings vacated December 21, 1920.

      Shelby B. Schurtz, for plaintiff.

      Alex. J. Groesbeck, Attorney General, and Glare Re-tan, Assistant Attorney General, for defendants.
   Bird, J.

Matilda Paulson Karrib is plaintiff in habeas corpus proceedings to secure the release of her daughter, Inez Paulson, from the Industrial Home for Girls, where she was committed on a charge of delinquency, on September 16th of the present year, by the juvenile court of Kent county. The question is raised by plaintiff that the juvenile court was without jurisdiction to make the order of commitment by which Inez is now deprived of her liberty. The point most relied upon by plaintiff is the failure of the juvenile court to issue the summons and notice provided .for in the statute, and its failure to cause proper service thereof. The material part of the statute prescribing the practice is as follows:

“Upon the filing with the court of a sworn petition setting forth upon knowledge or upon information and belief, the facts showing that any child resident in said county is -a delinquent, dependent or neglected child within the meaning of section one of this act, the court shall, before any further proceeding is had in the matter, give notice thereof to said county agent or to a duly appointed probation officer, who shall have opportunity allowed him to investigate the facts and circumstances surrounding the case, and upon receiving such notice the said officer shall immediately proceed to inquire into and make a full examination of the parentage and surroundings of the child and all the facts and circumstances of the case, and report the same to the said court in writing. If, after a full investigation,. it shall appear to the court that public interest and the interest of the child will be best sub-served thereby, a summons shall issue reciting the substance of the petition and requiring the person having the custody or control of the child, or with whom the child may be, to appear with the child at a place and time which shall be stated in the summons, and if such person is other than the parent or guardian of such child, then said parent or guardian shall be notified of the pendency of the case. The court shall notify the county agent or probation officer making the preliminar investigation to attend said trial and act as custodian of said child.” * * * 1 Comp. Laws 1915, § 2015.

The record discloses that the delinquency of Inez was called to the attention of the juvenile court on September 14th by Katherine Gillette, a police woman of the city of Grand Rapids, by a petition charging Inez with being a delinquent child. This was followed by a notice to the county agent to investigate the charge. He did so and later filed his report in writing with the court. It is shown by this report that Inez Paulson was of the age of 14 years and 9 months, and that she was a resident of Grand Rapids, living with and under the custody and control of her parents. The report gives the residence of the parents as 1021 South Ionia street and 108 Sheldon street, in the city of Grand Rapids. Following the report of the county agent Inez was, by an order of court, committed to the Kent county juvenile home to await the disposition of her case. A hearing was had on September 16th at which testimony was taken and an order made committing her to the Industrial Home for Girls until she reached the age of 21 years, which order was executed on the following day. The proceedings do not show that any summons was issued and served upon the matron or superintendent of the Kent county juvenile home, nor upon the parents of Inez. Neither do they .show any legal notice of the hearing on the parents. To excuse the failure to serve the statutory notice on the parents the following waiver is relied upon:

_ “We, the parents of Inez Paulson, upon whom a petition was filed in juvenile court this, morning alleging that she was a delinquent child by reason of her immoral conduct and her associations with immoral persons, hereby waive notice of hearing and consent that said child be disposed of as the probate judge of this county may deem for her best interest and the best interests of the community, without further notice upon us, or either of us.
“Matilda Paulson,
“Adolph Paulson.
“Signed,
“September 16, 1920.
“In the presence of
“J. E. Hyde and Paul Nelson.”

The return shows that on September 17th plaintiff filed an affidavit revoking her waiver of notice, at the same time explaining that she did not realize or understand the effect of it when she signed it. The return also shows that Shelby B. Schurtz appeared specially as counsel for Inez and the mother, and demanded a jury to pass upon the question of delinquency, and also demanded that bail be fixed for her release. It appears, however, that at the hour of filing these papers, on September 17th, Inez was on her way to the Industrial Home at Adrian.

, Section 2015 in plain terms requires a summons to be issued, setting up the substance of the charge and the time and place of hearing. If the parents have the custody of the child the summons must be served on them. If the child is in the custody of another, then notice must be served on the parents. Both of these statutory requirements are jurisdictional, but neither of them appears from the record to have been complied with. The suggestion is made that it is of no importance that the summons was not issued because the girl was present at the hearing. If the only purpose of the summons was to require the attendance of the girl this suggestion might have force, but we think the summons was intended by the legislature to serve another purpose, namely, to notify the parent or person having the custody of the girl, and also the girl herself, of the charge made against her. We conclude this from the fact that the substance of the charge is required to be set up in the summons. Not only the girl, but the parent or other person having her in charge, was entitled to be advised of the charge and was entitled to. have a reasonable time, before the hearing, in which to advise with counsel and prepare for a defense if she desired to make one, and no attempt by parent or other person having her in custody to waive this right for the girl would be of any avail. 14 R. C. L. p. 284.

Inez being in the custody of the Kent county juvenile home, the summons should have been served on the superintendent or matron of the home, and a written notice containing the same information as the summons, namely, the substance of the charge and time when and the place where the hearing would be held. While the substance of the charge was recited in the so-called waiver, which is sought to be substituted for the notice, it contained no hint or information when the hearing would be held, or where it would be held. Had a notice containing this information been served, as the statute commands, the mother would have had opportunity to consider the matter, to consult counsel and prepare a defense for the girl, if she were not agreeable to the proceedings. We must conclude that the mother had no legal notice of the proceedings and, therefore, was not bound by them. Goodchild v. Foster, 51 Mich. 599.

Another omission of the court is called to our attention, which, while it may not be a. jurisdictional omission, is one which should not be passed over without comment. The proceedings do not disclose that the county agent was notified by the court to be present at the hearing, as the law requires, nor does it appear that he was present. The failure to observe the law in this and other respects resuited in the girl being present at the hearing where she was obliged to answer to a serious charge without parent, counsel or county agent to look after her interests. This situation emphasizes the importance of having the summons and notice issued and served as the law requires.

The failure to issue and serve the summons as the statute requires, and the failure to servé such a notice upon the parents as the law requires, we must hold were fatal to the jurisdiction of the court. The order of commitment will be vacated. Inez will be released from the Industrial Home for Girls and conducted back to her home in charge of some suitable' person appointed by the juvenile court of the county of Kent.

Moobe, C. J., and Steebe, Bbooke, Fellows, Stone, Clabk, and Shabpe, JJ., concurred.


source: Caselaw Access Project

author: Fellows, J.

license: Public Domain

text:
    HANSER v. YOUNGS.
    1. Negligence — Automobiles—Motor-Vehicle Law — Evidence — Sufficiency.
    In an action for personal injuries caused to plaintiff by being struck by defendant’s automobile while he was standing in the traveled portion of the public highway near the rear of a disabled truck, testimony that defendant was,, at the time of the accident, attempting to pass an automobile ahead of him on the right side, in violation of 1 Comp. Laws 1915, § 4815, held, sufficient to take the question to the jury as bearing on defendant’s negligence.
    2. Same — Contributory Negligence.
    It could not be said that plaintiff was guilty of contributory negligence, as a matter of law, because he stood in the ' traveled part of the highway, where, from the testimony, the inference might be drawn that he was there to warn other automobiles of the presence of the disabled truck which was without a tail light burning.
    3. Same — Common Enterprise — Imputed Negligence.
    Where plaintiff and the owner of the truck, at the time of the accident, were attempting to get home their winter’s supply of potatoes, they were engaged in a common enterprise, so that the negligence of the owner in not having the tail light burning was imputable to plaintiff.
    4. Same — Motor-Vehicle Law — Failure to Have Rear Light Burning — Contributory Negligence.
    The mere fact that said tail light was not burning would not render plaintiff guilty of such contributory negligence as would bar his right of recovery, unless it in some -way contributed to the accident which caused his injury.
    5. Same — Question for Jury.
    If the disabled "truck was standing under an arc light, as-claimed by plaintiff, but disputed by defendant, it could not be said, as a matter of law, that the absence of the tail light was a contributing cause of the injury, but the question should have been submitted to the jury.
    On effect of failure to show lights on liability for collision between automobiles or automobile and other vehicle at or near corner of streets or highways, see note in L. R. A. 1916A, 749.
    On reciprocal duty of operator of automobile to use care as to lights and signals, see notes in 38 L. R. A. (N. S.) 489; 51 L. R. A. (N. S.) 996.

      6. Same — Motor-Vehicle Law — Duty to Maintain Lights — Vehicle Standing on Public Highway.
    1 Comp. Laws 1915, § 4812, requiring every motor vehicle operated and driven upon the public highways to display front and rear lights, construed, and held, to apply to a disabled truck temporarily standing in the traveled portion of the highway and not under motion.
    Error to Wayne; Codd (George P.), J.
    Submitted October 15, 1920.
    (Docket No. 7.)
    Decided December 21, 1920.
    Case by Peter Hanser against Addison S. Youngs for personal injuries. Judgment for plaintiff. Defendant brings error.
    Reversed.

      Benedict H. Lee, for appellant.
   Fellows, J.

Plaintiff, a resident of Detroit, was a stone cutter by trade in the employ of a Mr. Michaels. On Sunday, November 11, 1917, plaintiff, his brother-in-law, Mr. Kinsler, with Mr. Michaels and his minor son, drove up into Oakland county to get their potatoes for the winter. The truck used on the trip was owned by Mr. Michaels and was driven by Mr. Kinsler. On their return to Detroit, and when near the eight-mile road coming down Woodward avenue, a wheel came off and Mr. Kinsler went for some one to tow them in. The pavement here is of concrete 18 or 19 feet in width. An interurban track runs at the side of the street. It is the claim of the plaintiff that the truck was gotten as far to the side as the interurban track would permit, the forward wheels being off the concrete pavement and one of the hind wheels resting thereon. This was about two hours after sundown and the tail light on the truck was not burning. While standing near the rear of the truck and on the concrete pavement plaintiff was struck by an automobile owned and driven by defendant and received serious personal injuries. He recovered a small judgment and defendant brings the case here. The errors assigned relate to the refusal of the court to direct a verdict for the defendant, to the charge as given, and to the refusal to grant a new trial. A directed verdict was asked on the grounds that no negligence of defendant was proven and that' plaintiff was guilty of contributory negligence.

Defendant’s Negligence. The case was submitted to the jury upon the theory that defendant might be held liable for negligence if the accident occurred by reason of his attempt to pass the automobile ahead of him on the right side thereof. We do not understand defendant to question the legal proposition. See section 4815, 1 Comp. Laws 1915; Wilson v. Johnson, 195 Mich. 94. What defendant’s counsel contends is that plaintiff’s testimony was not sufficient to take that question to the jury. In this we think counsel is in error. While defendant denies that he attempted to pass the automobile ahead of him either upon the right or the left side, and his witnesses corroborate his testimony in this regard, the plaintiff does testify that defendant came around the right side) and struck him, and that he meant “to the right of the other machines coming forward and back on Woodward avenue,” and Mr. Michaels, who was present when the accident occurred, testified that defendant—

“tried to get by another machine and he curved out just where our truck stood and .just happened to curve out to go ahead of the other machine ahead of him— go around — and he came like that on a curve. The car that he tried to go around was coming towards the city; he was trying to pass that car to get ahead of it. He went on the right side to get past it.”

Contributory Negligence. Defendant’s counsel contends that plaintiff was guilty of contributory negligence, as matter of law, in remaining in the traveled portion of the highway at the rear of the machine. We have not been favored with a brief by plaintiffs counsel and are only able to glean his theory of the case from what we find in the record. ' We think there is found in the testimony of Mr. Michaels some explanation of why the plaintiff was standing where he,was. It was conceded that the tail light of the truck was out. Again we quote from Mr. Michaels’ testimony:

“I was standing just about behind the middle of the truck. The plaintiff was on my left side, that is the east side coming towards town. He was far enough to clear the track so that he could give signals to automobiles coming on, to give signals to automobiles going north, and some of these automobiles were going both ways. He was not signaling those going the other way, he could not because there was one after them coming this way, you could not see the other side. There was one line of automobiles going out, one after the other, and there was one line going each way. He couldn’t see those going north because he was watching those coming in on the west side so that they would not hit us.”

While this testimony is not as clear as it might have been made, we think the jury could infer from it and the fact that the tail light was out that plaintiff was standing at the rear of the truck to signal or warn the drivers of oncoming automobiles of the presence of the truck at the side of the highway. We do not think it can be said, as matter of law, that a reasonably prudent person, mindful of the consequences a collision with an unlighted truck would cause, would not take this course.

The important question upon this branch of the case, however, grows out of the contention of defendant’s counsel that the plaintiff, Mr. Kinsler and Mr. Michaels were engaged in a common enterprise, that of getting and bringing home their winter’s supply of potatoes; that it was a violation of the statute not to have the tail light burning, constituting negligence imputable to all, and that, as matter of law, such negligence was contributory negligence precluding plaintiff’s right of recovery. We shall under the next head consider the question of the construction of the statute. The trial judge in his charge, as we shall presently see, declined to follow the contention of defendant’s counsel either by directing a verdict or by recognizing it in his charge. The case must go back for another trial and the law applicable to the case should be settled. The undisputed testimony shows that Mr. Michaels, Mr. Kinsler and plaintiff were on the day in question engaged in a common enterprise, that of purchasing and bringing home their winter’s supply of potatoes. Its purpose had not been accomplished nor had it been abandoned when the accident occurred. Under such circumstances the negligence of Mr. Michaels in not having the tail light burning was imputable to plaintiff. In Beaucage v. Mercer, 206 Mass. 492 (92 N. E. 774), that court had a somewhat similar question before it, and it was said:

“The trial, however, seems to have proceeded upon the theory that the plaintiffs were engaged in a common enterprise, and that it still was in force at the time of the accident. So long as the joint enterprise was in force the contributory negligence of one would bar a recovery of either, provided always the negligence was in a matter within the scope of the joint agreement; and if that is to be regarded as the meaning of the instruction then it was correct.”

But there must be some causal connection between the accident and the want of a tail light in order to make the negligence contributory. In Graham v. Hagmann, 270 Ill. 252 (110 N. E. 337), it was said:

“The mere fact that defendant in error was riding in the vehicle without such a light did not render bim guilty of such contributory negligence as would bar his cause of action, unless the omission of such light in some way proximately contributed to the accident in which he was injured.” .

In the instant case the testimony introduced on behalf of plaintiff was to the effect that the truck was standing underneath an arc light. Defendant’s evidence contradicted this testimony. It was a question for the.jury, we think, as to the amount of light at the place of the accident. Obviously if the truck was standing under the bright rays of an arc light, we cannot say, as a matter of law, that the absence of the tail light was a contributing cause of the injury. The trial court was not in error in submitting the question of plaintiff’s contributory negligence to the jury'but was in error in eliminating from the consideration of the jury the question of the want of a tail light.

The Charge. The trial judge charged the jury in effect that the negligence of the owner of the car could not be imputed to the plaintiff. It would appear that this instruction was based upon the theory that the. plaintiff was not then on the truck. The charge in this particular is not as clear in all regards as the charges of this trial judge usually are. Defendant’s counsel here assigns error on this portion of the charge; he insists that the instruction complained of and the case itself involve the question of whether the statute (1 Comp. Laws 1915, § 4812) contemplates that an automobile should have a tail light burning when temporarily at rest in the highway. What we have already said disposes of the question of imputed negligence, leaving for consideration the construction of the statute. Support will be found for the less liberal construction of the statute in Babbitt on Motor Vehicles (2d Ed.), § 411; City of Harlan v. Kraschel, 164 Iowa, 667 (146 N. W. 463). But the text in Babbitt is based on the Iowa case and is somewhat modified by what follows. In the Iowa case an ordinance of the city of Harlan was involved. Its language was that usually found in regulatory ordinances and statutes, and in addition contained further qualifying language to which the court gave effect. Sustaining the more liberal construction will be found: Jaquith v. Worden, 73 Wash. 349. (132 Pac. 33, 48 L. R. A. [N. S.] 827); Commonwealth v. Henry, 229 Mass. 19 (118 N. E. 224, L. R. A. 1918B, 827); Stroud v. Water Commissioners, 90 Conn. 412 (97 Atl. 336). In the Washington case the statute under consideration (Rem. & Bal. Code, § 5568), contained the word “driven.” Construing the statute, the court said:

“An automobile does not cease to be ‘driven’ when stopped or left standing on a public highway during the hours of darkness. It cannot be said that the driver of such a machine must carry lights while it is moving, but that he may stop it during the hours of darkness in the roadway, turn off the lights, and leave it standing, without violating the law. The statute must be read with reference to its. plain spirit and intent. Its spirit may not be destroyed by narrowing it to the literal meaning of a single word. Public highways are designed for travel in all lawful ways, by both pedestrians and those driving vehicles, and the driver of. a vehicle does not cease to be a driver or traveler when he stops his machine in the street.”

In the Massachusetts case the statute contained the word “operated” and it was said by the court, speaking through Mr. Justice Crosby:

“The statute under which the complaint is drawn was enacted largely for the protection of travelers upon highways, by guarding against collisions with automobiles after dark when it would be difficult or impossible to know of their presence. The question is, whether a motor car which is. left standing upon a highway after dark without lights and with the engine at rest can be found to be ‘operated’ within the meaning and intent of the statute.
“It is obvious that a motor car standing upon a highway under such conditions may be fully as great a menace to the safety of travelers as if running upon the way without lights, and that the danger of serious injury to travelers by coming in contact with such car would be very great.
“The word ‘operated’ is not, as the defendant contends, limited to a state of motion produced by the mechanism of the car, but includes at least ordinary stops upon the highway, and such stops are to be regarded as fairly incidental to its operation.”

Thus it will be seen that both the words “operated” and “driven” when used in a statute of this character have had judicial interpretation. We are constrained to adopt the more liberal construction and to hold that the statute applies, even though the automobile is temporarily standing in the traveled portion of the highway and not under motion.

We are not prepared to hold that the verdict is so manifestly against the weight of the evidence as to justify us in holding that the trial judge erred in overruling the motion for a new trial. We might not reach the same result as did the jury; but this is not the test.

:For the error pointed out in the charge the case must be reversed and a new trial ordered. Defendant will recover costs of this court.

Moore, C. J., and Steere, Brooke, Stone, Clark, ' Bird, and Sharpe, JJ., concurred.


text:
    MORRISON v. MEISTER.
    1. Partnership — Frauds, Statute of — Agreement to Buy and Seel Land.
    A partnership agreement to buy and sell lands generally, falls within the statute of frauds, and this is likewise true when but one transaction is involved and where it may be treated as a joint adventure only.
    2. Same — Sharing Profits — Evidence.
    Sharing in profits may be evidence to be considered where the question of a partnership is involved, but it is not conclusive.
    3. Same — Rights of Third Parties — Intent.
    While parties may so make their engagements as to constitute themselves partners, as matter of law, where rights of third, persons who have dealt in reliance on a holding out are not involved, the intention of the parties is of prime importance.

      4. Specific Performance — Land Contracts — Partnership — Intention.
    . An oral agreement between a lot purchaser and a contractor that the title to the lot should be taken by them as tenants in common, that the contractor should erect a dwelling thereon, after which the premises should be sold, and, after reimbursing each the moneys so advanced, the profits should be divided equally, but with no intention on their part of forming a partnership, did not constitute a partnership so that a land contract to sell said premises, signed by the contractor only, without the knowledge or consent of the lot owner, and without any intention of binding him as a partner, was not specifically enforceable as against him.
    On effect of agreement to share profits to createi partnership, see note in 18 L. R. A. (N. S.) 963.
    On validity of parol partnership to deal in land, see notes in 16 L. R. A. 745; 4 L. R. A. (N. S.) 427; 33 L. R. A. (N. S.) 883; L. R. A. 1915A, 521.
    Appeal from Wayne; Smith (Guy E.), J., presiding.
    Submitted October 12, 1920.
    (Docket No. 83.)
    Decided December 21, 1920.
    Bill by Mary S. Morrison and another against Saul H. Meister and another for the specific performance of a land contract. From a decree for plaintiffs, defendant Meister appeals.
    Reversed and bill dismissed as to appellant.

      Rood & Visseher, for plaintiffs.

      Thomas Thompson, for appellant.
   Fellows, J.

Defendant Meister had purchased a lot on Quincy avenue, Detroit, on contract but had not paid the purchase price in full. Unimproved property was not as salable as that which was improved. Defendant Satovsky Was engaged with his father in building houses. A verbal arrangement was entered into between defendants whereby Meister was to pay up the balance due on his contract and Satovsky was to erect a dwelling house on the lot. Upon the sale of the premises Satovsky was to have his money first, then Meister was to have his money, and the profits were to be equally divided. The title was taken by defendants as tenants in common. There is some testimony that Meister furnished some money besides the lot, but how much does not appear, nor is it important in this litigation. It fairly appears that defendant Satovsky was in need of money in his building operations and was anxious to sell the premises even before completion. Meister, on the other hand, seems to have opposed this move, as he wanted to know the full cost of the completed building before making any sale. Without the knowledge of Meister, Satovsky listed the property for sale with a firm of real estate brokers at $13,500. This firm negotiated a sale to plaintiffs. On June 28, 1919, plaintiffs and defendant Satovsky entered into a written contract of sale and $500 was paid to him on the purchase price. Meister did not sign the contract and did not know of it until a few days later when he declined to sign or be bound by it. In August plaintiffs tendered $3,000, balance of the down payment, and a land contract to defendant Meister to sign. This being refused this suit was instituted for the specific performance of the contract of June 18th.

We may lay aside those cases involving partnership by estoppel, partnerships by holding out, as neither of the plaintiffs claim that they relied upon any holding out of an ostensible partnership. Mr. Morrison was not sworn as a witness and Mrs. Morrison, who was sworn, does not claim that she signed the contract with defendant Satovsky in reliance upon his apparent authority as a partner to bind both defendants. She in fact testifies that she did not know any-' thing about a partnership until in August, which was some weeks after the contract was signed. Her testimony satisfies us that she supposed that Satovsky was the owner of the entire premises and dealt with him as such. While there is evidence, not exactly clear as to what it contained or how long it was up, that a “For Sale” banner and sign was upon the premises, no testimony is found in the case showing, or tending to show, any reliance upon a partnership by holding out. When the original bill was filed in August no claim was made that defendants were partners, and it was not until in October when an amended bill was filed that such claim was made.

A partnership agreement to buy and sell land generally falls within the statute of frauds. Nester v. Sullivan, 147 Mich. 493. And this is likewise true when but one transaction is involved and where it may be treated as a joint adventure only. Tuttle v. Bristol, 142 Mich. 148. But we are satisfied that no partnership in fact existed between these defendants. Sharing in profits may be evidence to be considered where the question of a partnership is involved, but it is not conclusive. Parties may so make their engagements as to constitute themselves partners, as matter of law. But where rights of third persons who have dealt in reliance on a holding out are not involved, the intention of the parties is of prime importance. In Beecher v. Bush, 45 Mich. 188 (40 Am. Rep. 465), Mr. Justice Cooley, speaking for the court, said:

“If parties intend no partnership the courts should give effect to their intent, unless somebody has' been deceived by their acting or assuming to act as partners ; and any such case must stand upon its peculiar facts, and upon special equities.”

And Mr. Justice Hooker in Canton Bridge Co. v. City of Eaton Rapids, 107 Mich. 613, said:

“To determine whether persons are in fact partners, we must look at their intention, and this is deducidle from their declaration as to their intention, and the agreements that they make regarding the subject-matter; and, where the contract under which the business engagement is made contains the express or implied disavowal of an intention to assume the partnership relation, no partnership will be found to exist, unless such declaration is so at variance and so inconsistent with their engagement as to be irreconcilable. If the actual engagements are incompatible with the expression of intention, the latter must yield to the former; but, where they can be reconciled, the latter must govern.”

The record is convincing that there was no intention on the part of the defendants to form a partnership. Very few of the indicia of partnerships were present and most of them were absent. This was the only property they had a common interest in; there was no firm name, no firm funds, no firm accounts, no firm letterheads, no firm bank account, no commingling of funds or property, no certificate of partnership filed, no agreement as to losses, no time fixed when it would expire. In the recent case of Mullholland v. Patch, 205 Mich. 490, Chief Justice Bird, speaking for the court, said:

“It is not claimed that the copartnership was given a name, or that it had any funds with which to purchase the options, or that there was any arrangement between the parties that any one of them should advance funds for that purpose. There appeared to be no agreement with reference to the losses, if any were incurred. Nothing appears as to the term for which it should continue. It had no> place of business and no books were kept, and the only option taken was not taken in the name of a partnership but was taken in the name of defendant and paid for by him. Very few of the indicia usually surrounding the relation of copartners were present. We think the testimony relied upon to establish the agreement was too meager and indefinite to accomplish its purpose.”

See, also, Bush v. Haire, 197 Mich. 85; Fletcher v. Fletcher, 197 Mich. 68; Pulford v. Morton, 62 Mich. 25; Wells v. Babcock, 56 Mich. 276; Miller v. Casey, 176 Mich. 221; Act No. 72, Pub Acts 1917, § 7, and sub. 2 (uniform partnership act).

Defendant Satovsky did not assume to represent defendant Meister in making the contract with plaintiffs. He signed the contract in his individual name. Whatever remedy plaintiffs may have against him must be determined in the future. Plaintiffs are not entitled as. against defendant Meister to a decree for the specific performance of a contract to convey land which he never signed and which was not signed by one authorized by him so to do either expressly or impliedly, orally or in writing.

It follows from what we have said that the decree must be reversed and the bill dismissed as to defendant Meister. The case may be remanded to the trial court for such proceedings as to defendant Satovsky as plaintiffs may be advised are appropriate. Defendant Meister will recover costs of both courts.

Moore, C. J., and Steere, Brooke, Stone, Clark, Bird, and Sharpe, JJ., concurred.


text:
    GLADWIN STATE BANK v. DOW.
    1. Contracts — Oral Agreement — Bills and Notes — Evidence— Admissibility.
    In an action on a promissory note, which, was originally given for 90 days and which had been renewed 47 times, defendant’s contention that he had an oral understanding that the loan should be a long-time loan, held, untenable, since at the expiration of the 90 days defendant could have paid the note and plaintiff was not bound to renew it.
    2. Usury — Set-Oef and Counterclaim: — Payment—Statutes.
    Where an amount in excess of seven per cent, had been deducted each time a note was renewed, plaintiff’s contention that the defense of usury was by way of set-off and that a counterclaim may not be allowed where an independent suit is not maintainable, is without merit, since the defense of usury is perforce of the statute (2 Comp. Laws 1915, !§ 5998, 5999), goes to the consideration of the note sued upon, and is more in the nature of payment than of set-off.
    3. Same — Discount—Interest Paid in Advance.
    Since the usury statute covers interest “reserved, taken, or received,” it is unimportant that the usurious interest was paid in advance and was called “discount.”
    4. Same — Renewal Note — Availability op Defense of Usury.
    Where a renewal note is given containing and providing for usurious interest, or where usurious interest is exacted, the defense of usury not only in the particular note sued upon but in all of its predecessors where it exists, if it exists at all, is available to the maker as a defense, and as between the parties to the transaction, or holders with knowledge, all payments of usurious interest made on the series of notes will be applied by the law to the extinguishment of the debt, and this, even though the parties have treated such payments as interest.
    5. Same — Appeal and Error — Issues Presented.
    For the reason that the dona fides of plaintiff or its immediate predecessor was not presented on the record, and because the case is in this court upon writ of error and not case-made, this court will decline to follow defendant’s suggestion that judgment he entered here for the amount tendered, viz., the amount of the note less interest paid.
    Error to Gladwin; Sharpe (Nelson), J.
    Submitted October 7, 1920.
    (Docket No. 40.)
    Decided December 21, 1920.
    Assumpsit by the Gladwin State Bank against' Herbert L. Dow on a promissory note. Judgment for plaintiff on a directed verdict. Defendant brings error.
    Reversed.

      Kinnane, Black & Leibrand, for appellant.

      Campbell & Foster, for appellee.
    In February, 1906, defendant applied to the private banking firm of M. C. Scrafford & Company of Glad-win for a loan of $800. He claims to have informed Mr. Scrafford that he would want to keep the loan for some time, that Mr. Scrafford told him that under the practice of his bank he would make the loan for 3 months, but would renew the paper from time to time unless he might need to call it in. A 90-day note was given for the $300, with interest at 7 per cent, after maturity, and defendant paid $6 as interest or discount. This note was renewed some 47 times and at each renewal the $6 discount or interest was paid in advance. This action is brought on the last of these renewal notes, and the defense of usury was interposed. Two hundred eighty-eight dollars had been paid as discount or interest, and defendant insisted in the trial court that this being at the rate of 8 per cent, and in excess of the statutory rate (2 Comp. Laws 1915, § 5997) plaintiff bank which had succeeded the private banking firm, as claimed by defendant with notice of the transaction, could not recover the face of the last note, but could only recover the amount of the original loan less the usurious interest paid thereon. The trial court declined to follow this contention but deducted from the last note the $6 paid when it was s executed and directed a verdict for $294.
   Fellows, J.

(after stating the facts). We may lay aside the contention of the defendant that the facts surrounding the original transaction showed an agreement for a long-time loan to be renewed at frequent intervals. There was no definite agreement for any loan beyond the period of 90 days fixed in the first note. At the expiration of that time defendant could have paid, the note, plaintiff was not bound to renew it. Likewise we may lay aside the argument of plaintiff’s counsel, most ingeniously urged, that the defense of usury here relied upon is by way of set-off; that one who pays usurious interest may not sue to recover it; and that, as here presented, it amounts to a counterclaim which upon principle may not be allowed where an independent suit is not maintainable for its recovery. The defense of usury is perforce of the statute (2 Comp. Laws 1915, §§ 5998, 5999) and here goes to the consideration of the note sued upon. As here urged the defense is more in the nature of payment than of set-off. It should also be stated that we do not regard as important the fact that the usurious interest was paid in advance and was called “discount.” Whether it was paid at the beginning or the end of the 90 days is of no moment here. In the recent case of Umphrey v. Auyer, 208 Mich. 276, we pointed out that the usury statute covered interest “reserved, taken, or received.”

Thus stripped, the case presents the naked legal proposition of whether the maker of a series of notes upon which usurious interest has been collected may, when sued upon the last renewal note, interpose the defense of usury, and thus raise the question of the legal consideration of the note in suit. In other words, as between the immediate parties to the transaction may the maker, when sued upon the last of a series of renewal notes upon all of which usurious interest has been collected, have applied as payment the amount paid as interest?

Authorities upon the question are not wanting and to them we shall now address our attention, reserving consideration of our own until the last. The rule is thus broadly stated in 39 Cyc. p. 1003:

“In accordance with the general principle above stated the renewal of a usurious contract is itself usurious, being merely a new form of the same obligation. Likewise the substitution of a different kind of security or. one executed by other parties for the original usurious instrument does not expunge the usury so long as the taint remains in the consideration. The fact that the security in question is the last of a long series of successive renewals does not changé its character. The original usury descends with the original consideration along the whole line and the last is no better than the first.”

The supreme court of Iowa early had this question under consideration. In the case of Campbell v. McHarg, 9 Iowa, 354, that court, speaking through Justice Woodward, said:

“When the attention of the court is called to the question of usury, to say that the inquiry is limited to the identical contract (or note) before them, and that they cannot look back into a preceding note, or notes, for which the present one was substituted, is contrary to both the letter and the spirit of all, or nearly all, the adjudications. These teach that, how-. ever it may be covered by changes and substitutions, if usury be found to exist, either directly or indirectly, its taint continues and affects all the parts, through which it runs. The substitution of one contract for another, the taking a new note for an old one, will not nursce it.”

The supreme court of Alabama in Masterson v. Grubbs, 70 Ala. 406, says:

“While these principles illustrate the general policy of our laws regulating the subject of usury, it is well settled, both in this State and elsewhere, that the mere renewal of a note or other security, between the same parties, does not purge the original transaction of the taint of usury.”

In Pickett v. National Bank, 32 Ark. 346, it was said by the court:

. “The usurious interest in this instance, having been carried into the general account, and made part of the sum found due upon final settlement, taints the whole contract with usury, the fact that the account was closed by note amounts to nothing; it matters not whether usury was charged and taken by any tacit assent of the firm by the bank in stating the monthly account, or by note substituted for the one first given; the question is not how the contract was closed, or renewed, but whether any part of the sum charged, and for which the note was executed, was for the use or forbearance of money at a greater rate of interest than, allowed by law to be taken. Such is clearly the rule, as laid down by the elementary writers, and accords; with numerous decisions, to some of which we will refer.”

In the early case of Reed v. Smith, 9 Cow. (N. Y.) 647, it was said:

“The note upon which this suit is brought, is most clearly a continuation of the original note, given in April, 1816, when the loan was obtained by Parker. If that note, therefore, was given upon a usurious consideration, the taint which it imbibed attached to each of the series of securities which were subsequently taken, and affects and destroys the one in question.”

In the case of Quinn v. National Bank, 8 Ga. App. 235 (68 S. E. 1010), it was held (we quote from the syllabus) :

“Any payments made upon an usurious debt, even though, the suit be upon notes given in renewal there-: of (but without purging out the usury), are to be deducted from the principal debt and the lawful interest.”

We likewise quote from the syllabus of the case of First National Bank v. McCarthy, 18 S. D. 218 (100 N. W. 14), where the supreme court of that State had the question under consideration:

“A note executed as a renewal of a note providing for usurious interest is itself tainted with usury.”

In Taylor v. Morris, 22 N. J. Eq. 606, the question was considered by the court and it was said:

“It is well settled that the mere substitution of one security for another security which is usurious, will not remove the original taint. An exception to this rule exists in favor of a bona fide holder of an usurious security who receives from the maker a new security without any knowledge of the usury. In his hands the :new security may be enforced (citing authorities).
“If the immediate parties to the transaction repent, and by mutual consent the usurious security be surrendered, a new promise to pay the sum loaned with legal interest may then be enforced, on the principle that the parties have purged the transaction of its original vice (citing authorities).
“But as between the parties to the usurious instrument, or as against a subsequent holder with knowledge of the defect, the original taint attaches to all substituted obligations or securities, however remote, unless the original vice be removed by expunging the usurious element (citing authorities). No recovery can be had upon any succeeding obligation which operates to secure the usurious exaction. A new settlement of the accounts between the borrower and lender, and the cancellation of the original security, or the introduction of a new consideration in the shape of an additional loan, will not operate to give such an instrument validity.”

In Gibson v. Stearns, 3 N. H. 185, it was remarked by the court:

“The better opinion, is, that a mere substitution of another security for the one tainted with usury, between the parties to the corrupt agreement, does not take a case out of the statute.”

We quote from the syllabus of Brown v. National Bank, 169 U. S. 416 (18 Sup. Ct. 390):

“The forfeiture declared by the statute is not waived by giving a renewal note, in which is included the usurious interest. No matter how many renewals may be made, if the bank has charged a greater rate of interest than the law allows, it must, if the forfeiture clause of the statute be relied on, and the matter is brought to the attention of the court, lose the entire interest which the note carries or which has been agreed to be paid.”

In Flemming v. Mulligan, 2 McCord, 173 (13 Am. Dec. 707), it was said by the South Carolina court:

“The fact of this note’s being a renewal for a part of the original contract, it being between two of the parties to the original contract, does not vary the case; for where a bond has been given upon a usurious contract or consideration, which is afterwards canceled, and a new bond given upon the same terms, it is clear that the substitution of the one security for another cannot avail the parties to the usury, because as the second bond was given in consideration of the first which was paid, it follows that the second must be void also.”

The court of last resort of Mississippi in Torrey v. Grant, 10 Sm. & Mar. 89, held:

“As the original note was affected by usury, every renewal or change of security must be equally affected.”

In National Bank v. Lewis, 75 N. Y. 516 (31 Am. Rep. 484), that court, following its former decisions, held (we quote from the syllabus):

“Where the note in suit is the last of a series of renewed notes, the original loan being usurious, the taint of usury affects the whole; the forfeiture of the entire interest follows and credit must be given for all the interest which has been paid from the beginning of the transaction.”

It should be stated, as a matter of accuracy with reference to this case, that after the opinion was handed down the Supreme Court of the United States decided the case of Barnet v. National Bank, 98 U. S. 555, in which it was held that under the terms of the national banking act the recovery of twice the amount paid as unlawful interest could only be had in an independent suit for such penalty, and upon rehearing of the Lewis Case (National Bank v. Lewis, 81 N. Y. 15), such holding of the United States Supreme Court was recognized as controlling on that point. But this affected the remedy as to the penalty, not that portion of the case which we have above quoted which has reference to the effect to be given a renewal note. In the later case of Sheldon v. Haxtun, 91 N. Y. 124, that court again had before it the question as between private parties, and it was said by Chief Justice Andrews on this subject:

“The surrender of the old note and the extension of time was ample consideration for the new note, but the substituted security was tainted with the vice of the original transaction. We need not consider how the courts of Illinois would deal with the question if the suit had been brought in that State. The fact that the original loan was at a rate of interest lawful in that State, does not make the contract lawful here, nor does the fact that the new note was made in that State and prescribed a rate of interest lawful there, take it out of the operation of the well-settled doctrine that a new security for a usurious debt is affected by the usury in the original transaction.”

And Mr. Justice Earl in the same case said:

“If this note for $1,000 had been given in this State, even with the lawful rate of interest mentioned therein, in renewal of or in substitution for the prior usurious note, it would also Lave been tainted with usury and void. A substituted or renewal note thus given is held void for one or both of these reasons: The new note in such a case is given in renewal or continuance of the usurious contract, and is, therefore, void, for the same reason that condemns that contract; or it is a new security for a usurious debt or contract and void on that account.”

The supreme court of Pennsylvania in Overholt v. National Bank, 82 Pa. St. 490, speaking through Mr. Justice Sharswood, said:

“A renewal note is not payment of the original debt, and a new debt or novation in view of the usury laws, however it may be, if the parties so intend, as to other questions. If it were held otherwise nothing would be so easy as to evade the statute. What the creditor is entitled to recover is the original loan with lawful interest, and the borrower is entitled to credit for all that he has paid beyond what by law he was bound to pay. It is clear then as to the national banks that whenever they charge or stipulate for an illegal rate all payment of interest and not merely the excess is illegal.”

And while that court later recognized the holding of the United States Supreme Court as to the proper remedy for the enforcement of the penalty under the national banking law (see First Nat. Bank of Clarion v. Gruber, 91 Pa. St. 377), the rule announced by Justice Sharswood in the language above quoted as to the effect of a renewal note has not, so far as we have been able to ascertain, been in any way modified.

The textwriters lay down the same doctrine announced in the foregoing cases. Mr. Webb, in his work on Usury (§ 308), says:

“If a transaction is usurious in its inception, it remains usurious until purged by a new contract; and all future transactions connected with or growing out of the original are usurious and without valid consideration. An original taint of usury attaches to the whole family of consecutive obligations and securities growing out of the original vicious transaction; and none of the descendant obligations, however remote, can be free of the taint if the descent can be .fairly traced.
“Every renewal of a. note given for a usurious loan of money is subject to the defense of usury between the original parties and purchaser with notice; but a renewal in the hands of a bona fide purchaser for value, without notice, is valid.”

And Mr. Tyler, in his work on Usury (p. 346), says:

“As a general proposition, it may be affirmed that the original taint of usury attaches to all consecutive obligations and securities growing out of the original vicious transaction; that is to say, it attaches to all renewals of the original security whenever made or given; and it also vitiates every new security into which the original usurious consideration enters.”

The following cases are in accord with those discussed: Johnson v. Grayson, 230 Mo. 380 (130 S. W. 673); Whinery v. Garrett, 24 Ky. Law Rep. 1558 (71 S. W. 855); Dean v. Maxfield (Tex. Civ. App.), 209 S. W. 466; Arnold v. Macdonald, 22 Tex. Civ. App. 487 (55 S. W. 529); Lewis v. Hickman, 200 Ala. 672 (77 South. 46); Compton v. Collins, 190 Ala. 499 (67 South. 395); Paine v. Levy, 142 Ky. 619 (134 S. W. 1160); Gilbert v. A. A. Clark & Co. 186 Iowa 904, (173 N. W. 104); Beals v. Lewis, 43 Ohio St. 220 (1 N. E. 641); New Hampshire Banking Co. v. Waller, 5 Kan. App. 881 (47 Pac. 543); New York Security & Trust Co. v. Davis, 96 Md. 81 (53 Atl. 669).

The language of the court in Cornell v. Smith, 27 Minn. 132 (6 N. W. 460), was thought by the trial judge to sustain plaintiff’s counsel and some of the language used does fortify their claim. If this was an action to recover usurious interest voluntarily paid that case would be applicable. But this court has held that voluntary payments of usurious interest may not be recovered under the usury statutes which have been in force since section 5 of chapter 6, part 1, title 7, of the Revised Statutes of 1838 was amended and section 7- of the same chapter was repealed by Act No. 47 of the Laws of 1843, nor under the former statute except in the manner therein provided. But it is the rule of this court that the statute may be appealed to as a defense when the usurious obligation is sought to be enforced; and this is true even though a bill may not lie to restrain its enforcement (Vandervelde v. Wilson, 176 Mich. 185, 190). The rule is well recognized in this jurisdiction that one who voluntarily pays usurious interest may not maintain a suit to recover it while one against whom a usurious contract is sought to be enforced may avail himself of the statute as a defense. The statute is available as a shield but not as a sword.

One might infer from some of the language of the court in Peterborough National Bank v. Childs, 133 Mass. 248 (43 Am. Rep. 509), that that court entertained contrary views to those courts from whose decisions we have quoted. The cases cited by that court, however (Rohan v. Hanson, 11 Cush. [Mass.] 44; Richardson v. Woodbury, 12 Cush. [Mass.] 279; Hubbell v. Flint, 15 Gray [Mass.], 550), to sustain such language are not similar to the instant case, and the supreme court of Massachusetts finally disposed of the case before it upon the authority of Barnet v. National Bank, supra. In the earlier case of Chadbourn v. Watts, 10 Mass. 120 (6 Am. Dec. 100), that court had also held that where there had been two renewal notes neither of which bore usurious interest, the defense of usury in the first note was not available.

Let us now turn to our own cases. Some language will be found in our earlier decisions sustaining the contention of plaintiff’s counsel. But we think a careful analysis of the earlier cases will demonstrate that in so far as the points actually decided by them goes, our later cases, to some of which we shall refer, are not out of harmony with them. The point actually decided in Thurston v. Prentiss, Walk. Ch. 530, was that a surety who has paid the amount of a judgment against him and his principal upon which execution has been levied upon his property, may recover against the principal the amount so paid, and that the principal may not interpose against such an action the defense of usury. This case and Farmers’ & Mechanics’ Bank v. Kimmel, 1 Mich. 84, may be regarded as the forerunners of a line of decisions of this court in which it has uniformly been held that the defense of usury is a personal one. The Thurston Case was again before the court in Thurston v. Prentiss, 1 Mich. 193. The transaction out of which that litigation grew arose before the act of 1843, and it was there pointed out that under the statute in force when the cause of action accrued (Rev. Stat. 1838, p. 160) the maker of the note could pursue either of two courses, i. e., he might when sued defend on the ground of usury in which case the plaintiff would forfeit threefold the amount of the usurious interest and defendant have his costs, or he might bring an independent action under the statute in debt and recover threefold the amount of the excess of interest paid, but that he might assert such claim in no other way. While our statute is not now the same as it then was, the principle of this case as we have already pointed out was reiterated in the late case of Vandervelde v. Wilson, supra. In the Thurston Case it will be seen the maker of the note was seeking to assert the defense of usury not against the payee but against his surety who had paid a judgment rendered on the note and was seeking to be reimbursed.

Language is used and authorities cited in support thereof in Craig v. Butler, 9 Mich. 21, which sustain plaintiff’s counsel. But it will be noted that after such discussion the court expressly reserved decision of the question now before us in the following language :

“It is unnecessary for us to decide how far these views should be followed where there is no change_ of parties, or how far a surety may claim exemption where the substituted paper does not cancel the original liability, but is a mere renewal of it.”

The facts of that case were these: Notes had originally been given by Frost & Bradley to Butler, which were indorsed by the Craigs, which it is to be inferred contained usurious interest. In August, 1857, new notes in the sum of $2,540 were given by Frost & Bradley to Butler; they were likewise indorsed by the Craigs and contained no usurious interest; this was also true of another note of $50. Frost & Bradley assigned to the Craigs property then supposed sufficient to pay all debts upon which the Craigs were liable. Later the Craigs gave the notes in suit to Butler and upon them only lawful interest was reserved. It was held that the Craigs could not interpose the defense to this action that usurious interest had been paid by Frost & Bradley. This was but following the earlier holdings that the defense of usury is a personal one.

Plaintiff’s counsel rely most strongly on the early case of Smith v. Stoddard, 10 Mich. 148 (81 Am. Dec. 778), and it is urged that language there used is controlling of the instant case. We quote such language as is thought applicable:

“The mortgage in suit is a new security, given with its accompanying note upon a complete settlement of all the former transactions. The sum of $500 embraced in it is money actually lent by complainant to defendant. It includes no direct usury, because the principal had never been reduced or intended to be reduced; all payments which had been made, having been expressly made upon interest. It appears that the usurious interest was always either paid in money or put in the shape of separate due bills and amounts. We do not think, as to this sum of $500, that there can be any deduction allowed. When parties have actually paid the usurious interest, and then come to a bona fide settlement, and make new securities which include nothing but an actual loan, and are not meant as. mere evasions, we do not think the new contract can be regarded as either usurious in itself, or based on a usurious consideration. The statute does not contemplate the recovery back, or allowance of unlawful interest once paid, unless in a suit upon the contract under which it was exacted. A new security, between the same parties, embracing not only a valid debt, but also a claim for unpaid usurious interest, would undoubtedly be founded to that extent on a usurious consideration, and therefore liable to abatement. But the abatement cannot, we think, under our statute, go further. The law does, not absolutely avoid contracts for usury, and if parties completely perform them they are remediless.”

It is unfortunate that the record in this early case is not available so that we might have before us the terms of the “complete settlement,” the “bona fide settlement” which was not meant as a mere evasion of the usury laws. Courts have uniformly held that there may be such a settlement between the parties as purges the transaction of its usurious taint'. What must be done to so purge the transaction is a matter upon which the authorities differ. One way of purging the contract of the usurious taint was pointed out in Carr v. Taylor, 62 N. Y. Supp. 849; there may be others. It is said in 39 Cyc. pp. 1002, 1004:

. “The general principle determining when an indebtedness infected with usury is to be deemed disinfected may be stated as follows: If the tainted obligation is with the full knowledge and consent of the borrower, finally canceled or abandoned, and a new obligation, containing no part of the usury, is executed in legal form, and supported solely by the moral obligation resting upon the borrower to pay the money actually received with legal interest thereon, such new obligation is valid and enforceable. But so long as the original usurious obligation continues to exist, based upon a consideration in which usury inheres, the taint of usury persists whatever be the form which the subsequent dealings of the parties may cause it to assume, and even though new parties may have been introduced, or the borrower allowed to assume a different relation to the security affected with usury.
“When a usurious obligation is settled and abandoned, and a new security taken for the debt lawfully due with lawful interest thereon, such new security rests upon a consideration purged of usury, and is valid. The fact that the lender by. such settlement retains the usury already paid will not taint the new contract.”

We need not determine in the instant case what is necessary to be done in order to purge the transaction of its usurious taint as each of the notes, including the one in suit, was infected with that taint. In this regard the instant case is clearly distinguishable from Smith v. Stoddard, supra. In that case there had been a complete, a bona fide, settlement and a new obligation given which bore only lawful interest.

When we examine these earlier cases, having in mind the actual case before the court and the actual question decided, we are constrained to the view that our later cases are not out of harmony with them. Mr. Justice Campbell, who wrote the opinions in Smith v. Stoddard, supra, and Craig v. Butler, supra, also wrote the opinion in Thorp v. Deming, 78 Mich. 124. The record in that case is available, and is before us. It does not differ from the record in the instant case except that the facts there were in dispute. The defendant there had given his note which he claimed upon the trial contained usurious interest; this was followed by two renewal notes which he likewise claimed contained usurious interest. The suit was upon the last of these three notes. The question of usury was in dispute, but the trial judge had charged the jury that if they found usury, and found that the payments made on a previous note were sufficient to discharge it after deducting the usury, plaintiff could not recover. Error was assigned upon this and similar instructions. In this court plaintiff’s counsel insisted, as is here insisted, that usury would not be considered which did not enter into the very contract sued upon. We quote from their brief:

“We contend that when the new obligation was given for the original' indebtedness, with the interest and cost of making the papers added, the question of what was paid by the defendant for the purpose of getting an extension of time, on account of his being in straightened circumstances, or what was paid for the use of the money, becomes immaterial, as it does not enter into the contract in question.”

And the cases, we have just considered with others were cited to support such contention. This court declined to follow this contention and in a brief opinion affirmed the case.

Gardner v. Matteson, 38 Mich. 200, did not involve the precise question here under consideration, but it was similar in that it involved the giving of a series of renewal notes, each one of which, including the last one, was tainted with usury. It was there said by Mr. Justice Marston, speaking for the court:

“The defense of usury is a personal one, and may be waived, and so may the party voluntarily pay usurious interest, and where he does so he will not be permitted to recover it back. To this extent the statute undoubtedly goes, but it never was intended that by 'substituting new paper, with usury added, for the old paper as the same become due, the question of usury could not thereafter be raised, or that the creditors by taking a. mortgage upon personal property to secure the payment of such usurious debt could by taking possession of the property and proceeding to sell the same, thereby preclude the debtor, in an action of replevin to recover possession of the property from showing the entire transaction, upon the theory that the action was not one brought upon the usurious note. To give the statute such a construction would be but pointing out a method for the grasping and unconscionable creditor to evade our usury laws entirely.”

In Bateman v. Blake, 81 Mich. 227, there had been paid monthly payments which were receipted for as consideration of the extension of time; they were usurious. This court held that it was of no moment that they were treated by the parties as interest, and notwithstanding the fact that they had been applied by the parties as interest, it was held that the law would apply them to the extinguishment of the debt. Mr. Justice Cahill wrote for the court, saying:

“The trial judge rightly refused to treat the monthly payments as interest or compensation for extensions, or as anything else than payments on the principal debt. It was of no consequence what the parties called those payments. The law applies them, where they belong, to the extinguishing of the debt.”

This case was cited with approval in Fretz v. Murray, 118 Mich. 302, where Mr. Justice Long, speaking for the court, said:

“Under the North Carolina statute, the entire interest is forfeited in usurious contracts, and the courts apply all payments of interest, though made as such, upon the principal debt Moore v. Beaman, 111 N. C. 328; Gore v. Lewis, 109 N. C. 539. In Gill v. Rice, 13 Wis. 553, the Supreme Court of Wisconsin held that, where no direction had been given by the debtor, the law would apply a payment upon a usurious contract to the extinguishment of the principal sum loaned. The same rule is adopted in Stanley v. Westrop, 16 Tex. 200. In Bateman v. Blake, 81 Mich. 227, this court applied the rule that on usurious contracts the payments, though made as interest, must be applied upon the lawful debt, although the statute at that time avoided the excess of interest only.”

In Estey v. Building & Loan Ass’n, 131 Mich. 502, Mr. Justice Montgomeey said:

“But, as the express reservation of 9 per cent, interest was illegal, it tainted the contract. What is the complainant’s remedy? It is claimed that all payments made should be applied on principal, and that, on payment of the balance of the principal, the mortgage should be discharged. On the other hand, it is contended that money paid as interest cannot be recovered back. This question was discussed by Mr. Justice Long in Fretz v. Murray, 118 Mich. 302. In that case it was held that, where payments were made upon a usurious contract without designation, they should be applied in extinguishment of the lawful debt — i. e., the principal; but the court found it unnecessary to decide where payments made on the contract as interest should be applied in reduction of the principal. The case of Fowler v. Trust Co., 141 U. S. 384 (12 Sup. Ct. 1), was cited, holding that the payments shall be so applied. We are satisfied with the reasoning of that case, and hold that, where it is sought to enforce a contract which was usurious at its inception, in so much as our statute provides that the court shall declare the interest void (section 4858), and that the debtor shall not be compelled to pay interest (section 4857), the recovery should be limited to the principal sum, less payments actually made, however designated at the time of payment. This is the only rule which effectuates the intent of the statute.”

In the recent case of Continental National Bank v. Fleming, 170 Mich. 624, Mr. Justice Stone, speaking for the majority of the court, said:

“It is also the rule in this State that, if the transactions on account of which the indebtedness was incurred were tainted with usury, its effect cannot be avoided by taking other paper or security for the indebtedness, including the usurious charge.”

We are satisfied that by the overwhelming weight of authority in this State and elsewhere two propositions' are established, i. e., (1) that where a renewal note is given containing and. providing for usurious interest, or where usurious interest is exacted, the defense of usury not only in the particular note sued upon but in all of its predecessors where it exists, if it exists in all, is available to the maker as a defense; and (2) that as between the parties to the transaction, or holders with knowledge, all payments of usurious interest made on the series of notes will be applied by the law to the extinguishment of the debt, and this even though the parties have treated such payments as payments of interest. To hold otherwise would be but to point a way to the evasion of this beneficent statute. If language not necessary to decision has been used in some of our earlier cases expressing a contrary view, it must yield to the language used in' our later cases where the questions were directly involved. For certain purposes the giving of a renewal note may be treated as payment of the old one, but it will not be so treated where the usury statute is involved. In concluding the discussion of these questions we quote with approval the language of the supreme court of Illinois in Saylor v. Daniels, 37 Ill. 331 (87 Am. Dec. 250):

“The court below refused to apply upon the existing note the payments formerly made upon the usurious interest. This was error. While it is the rule of this court that usurious interest once paid voluntarily can not be recovered back, yet that rule does not apply where the transaction has not been settled, and the lender brings his action for the recovery of an alleged balance. In such case the borrower may defend by claiming a credit for whatever usurious interest he had paid in the same transaction. This is not using the usury law as a sword, but strictly as a shield. The fact that new notes have from time to time been given does not change the case. The court looks at the substance, not at the form. When the $400 was loaned in this case, it continued one transaction until paid, without reference to the number of balances struck, and new notes given, and until fully paid, the borrower may insist upon having past usurious payments legally applied.”

We do not discuss the bona fides of the present plaintiff or its immediate predecessor as the case was not tried or the record made to present that question. For this reason and the further reason that the case is here upon writ of error and not case-made (Stamp v. Steele, 209 Mich. 205), we decline to follow the suggestion that we here enter judgment for the amount of the tender.

The case will be reversed with a new trial. Defendant will recover costs of this court.

Moore, C. J., and Steere, Brooke, Stone, and Bird, JJ., concurred. Clark and Sharpe, JJ., did not sit.


text:
    CORNELL v. CITY OF YPSILANTI.
    1. Municipal Corporations — Defective Sidewalks — Reasonably Safe and Fit — Statutes.
    In an action against a municipality for personal injuries alleged to have been caused by a defective sidewalk, recovery may not be bad unless the municipality has failed to maintain tbe sidewalk “in condition reasonably safe and fit for travel” (1 Comp. Laws 1915, § 4584).
    2. Same — Character of Defect — Trap—Question for Jury.
    While a municipality is not liable, as matter of law, for slight depressions in its sidewalks, such depressions may be of such size, shape, and character as to make tbe question one of fact.
    On liability of municipality for injuries for unevenness in sidewalk or cross-walk, see notes in 20 L. R. A. (N. S) 640; 29 L. R. A. (N. S.) 180; 43 L. R. A. (N. S.) 1158; L. R. A. 1916A, 486.

      3. Same — Evidence—Question for Juey.
    Where the evidence tends to establish that the depression is of such size, shape, and character as to form a trap in which the pedestrian’s foot may be caught and held, a question for the jury, under proper instructions, is presented.
    4. Same — Notice oe Defect — Reasonable Time to Repair.
    Where a depression in a sidewalk in the nature of a trap had existed for several years, and was known to the aider-man of the ward in which it was located, who was also chairman of the committee on streets and walks, the city was chargeable with notice of its condition and had had reasonable time to make repairs.
    5. Appeal and Error — Evidence—Harmless Error.
    In an action by a married woman for personal injuries, testimony by her that two years before the trial her husband had been ill, while inadmissible, heló,, not reversible error, where it cannot be said that the verdict was excessive or against the. great weight of the evidence, and the trial judge charged the jury that they must determine the case on the facts without regard to the wealth or poverty of either party.
    Error to Washtenaw; Sample (George W.), J.
    Submitted October 13, 1920.
    (Docket No. 95.)
    Decided December 21, 1920.
    Case by Emilie C. Cornell against the city of Ypsilanti for personal injuries caused by a defective sidewalk. Judgment for plaintiff. Defendant brings error.
    Affirmed.

      Floyd E. Daggett and John P. Kirk, for appellant.

      Cavanaugh & Burke (E. B. Sunderland, of counsel), for appellee.
   Fellows, J.

Plaintiff recovered a substantial judgment against defendant for injuries received by her through the claimed negligence of the city in not main-taming its sidewalk on Cross street in a reasonably safe condition for public' travel. Cross street is a much-traveled thoroughfare in Ypsilanti. The sidewalk was of cement. Plaintiff, a resident of Ann Arbor, had with her husband spent the day with her sister, Mrs. Knisely, at Ypsilanti. About dusk Mr.- and Mrs. Cornell, accompanied by Mr. and Mrs. Knisely, started to take the interurban car for Ann Arbor. The distance was a short one and they were walking leisurely, the ladies ahead and the men but a short .distance behind. It is the claim of the plaintiff that her foot became caught and held in a depression in the sidewalk, that she was thrown forward, receiving severe and permanent injuries, that defendant had notice of such defect and a reasonable time to repair it and that it Was of such a character as to render the city liable. We shall state the testimony more at large as we proceed. Defendant insists that the defect in the walk was not of that character which would render it liable and that the court should have so held, as matter of law; that, as matter of law, notice to defendant city of a defective condition of the walk was not established and that it was entitled upon the whole record to a directed verdict. Error is also assigned on proceedings occurring upon the trial.

Under the statute of this State upon which plaintiff relies for a recovery (1 Comp. Laws 1915, § 4584), one may not be had unless the municipality has failed to maintain the sidewalk “in condition reasonably safe and fit for travel.” It need riot be made absolutely safe. The municipality is not the insurer of the safety of persons using its streets for travel. In a long line of decisions since the present act became effective this court has held that the municipality was not liable for slight depressions or elevations in .its sidewalks, streets and crosswalks. Among the cases see the following: Weisse v. City of Detroit, 105 Mich. 482; Yotter v. City of Detroit, 107 Mich. 4; Shietart v. City of Detroit, 108 Mich. 309; Jackson v. City of Lansing, 121 Mich. 279; Bennett v. City of St. Joseph, 146 Mich. 382; McIntyre v. City of Kalamazoo, 154 Mich. 301; Northrup v. City of Pontiac, 159 Mich. 250; Baker v. City of Detroit, 166 Mich. 597; Jones v. City of Detroit, 171 Mich. 608. In these cases the elevations or depressions have amounted to a few inches, generally two inches or less. Defendant’s counsel insist the instant case is ruled by those cited. They point out that but one witness called by plaintiff fixes a depth of the depression in this sidewalk to exceed two inches, he by estimate putting it at two or two and one-half inches, while witnesses, who made actual measurements fix it at less than one inch. On the other hand plaintiff’s, counsel point to the fact that these actual measurements were made at a later time and that the testimony shows that the depression was constantly filled with dirt. There may be some force in this suggestion of counsel, but if the depth of the depression was the only question involved, we should not hesitate to reverse this case upon the authority of the cases, above cited.

But it is insisted on behalf of plaintiff that the defect in this walk which caused plaintiff’s injuries was not a mere depression in the walk, but was of such size, shape and character that the foot of. a traveler might and would be caught and held as in a trap, and that that was exactly what took place in the instant case; that below the cement surface of the walk disintegration had taken place, leaving a projection under which' plaintiff’s foot was caught and held. The case was submitted to the jury upon this theory, and it was left to them to determine the character of the depression, and if of the character claimed by plaintiff, whether the walk was in reasonably safe and fit condition for travel. There was testimony in the case to sustain this theory, although not undisputed. Plaintiff testified:

“We were walking along not at a fast pace, we knew we had lots of time for the car and were in no hurry and were just talking along and I know I stepped down and when I went to take this foot forward it was caught and this knee bent and I fell forward on my face, my left foot was caught. I couldn’t move it, when I went to pick it up to move it forward it was caught, I went to bend this knee and I couldn’t and fell forward.”

Her husband who was walking a short distance behind her attempted to catch her as she fell but was unsuccessful. He testifies that as she fell he noticed her foot and that it was caught under the projecting edge of the walk. He was permitted to testify, and properly so we think, that the second day after the accident he went to the place where it occurred and found fresh broken pieces of the walk there. The jury might infer from this, we think, that plaintiff’s foot was so securely held in this defect that only by the breaking of the cement surface was. it released. Plaintiff’s husband also testified to the condition of her shoe after she arrived home, that there was a dent in it an inch or am inch and a half back from the toe. Plaintiff and her daughter also testified to the condition of the shoe after she had arrived home.

But our difficulties are not ended by determining that there was testimony to sustain plaintiff’s theory; we must go further and determine whether such theory is tenable. The diligence of counsel has not brought to our attention any holding of this court precisely in point. The case nearest applicable is Urtel v. City of Flint, 122 Mich. 65. In that case there was a depression in a board walk; but in addition to such depression, when stepped upon it would sink down, thus acting as a trip. Mr. Justice Montcomery, who wrote for the court, considered the Weisse and Yotter cases and held they were not applicable, saying:

“These two cases follow the holding that a rise of from two to three inches in a sidewalk is not such a defect as makes the city chargeable under the statute. The duty is thrown upon the traveler to look out for such slight variations in the walk, and it is assumed that, when properly used, no damage is likely to occur to a pedestrian traveling such a walk. This case presents a very different aspect. The defect did not consist in a slight rise in the sidewalk, but, according to the averments, the plank in question was broken so that there was a depression of from two to three inches, and which was most dangerous. When stepped on, it would sink down three or four inches, thus acting as a trip to one unused to stepping on the plank. We are satisfied that it was a fair question for the jury as to whether the walk was in a condition reasonably safe and fit for travel.”

In Wolverton v. Village of Saranac, 171 Mich. 419, a judgment for injuries occasioned by depressions in a sidewalk was affirmed, but the case in this court did not turn on the question here involved.

The New York courts have adhered to the same doctrine as has this court that municipal corporations are not liable for slight depressions or elevations in their sidewalks. Beltz v. City of Yonkers, 148 N. Y. 67 (42 N. E. 401); Butler v. Village of Oxford, 186 N. Y. 444 (79 N. E. 712); Hamilton v. City of Buffalo, 173 N. Y. 72 (65 N. E. 944); Schall v. City of New York, 88 App. Div. 64 (84 N. Y. Supp. 737). But in Terry v. Village of Perry, 199 N. Y. 79 (92 N. E. 91, 35 L. R. A. [N. S.] 666, 20 Ann. Cas. 796), the court of appeals of that State, after considering some of the cases cited, says:

“By the decisions that we have mentioned and the language of the opinions therewith, this court has clearly held that municipalities are not, as -matter of law, responsible for injuries arising from slight-depressions or differences in grade in walks. There are exceptions, however, when even a slight depression or difference in grade is peculiar and specially calculated to result in injury to pedestrians, in which the liability of municipalities for personal injuries should be sustained.”

And the same court in Durr v. Railroad Co., 184 N. Y. 320 (77 N. E. 397), sustained the right of recovery where the depression was of such character as to permit the foot to slip under the rail and thus be caught.

The court of last resort of Kentucky is likewise in accord with the holdings of this court. City of Covington v. Belser, 137 Ky. 125 (123 S. W. 249). But a recovery was sustained where in addition to the slight depression there were loose brick lying around, some flat and some on their sides, and it was held to present a case for a jury. City of Louisville v. Laufer, 140 Ky. 457 (131 S. W. 192).

The supreme court of Minnesota in sustaining a recovery where the defect in the sidewalk was but a slight depression but V-shaped (Sumner v. City of Northfield, 96 Minn. 107 [104 N. W. 686]) said:

“The real question presented by this record is whether the defect was of so serious a character as to present a matter for the jury, or was so slight that the court should have said, as a matter of law, that no negligence on the part of the city could be predicated upon it. * * *
. “We are not inclined to hold municipalities to the exercise of more than reasonable care in_ the maintenance of sidewalks and crossings, nor to impose upon them the duty of making anything like a microscopic inspection. The care and inspection in that connection, must, however, have regard to all circumstances which affect the peril to which it exposes persons lawfully using the highway. Neither the dimensions of the hole nor the depth of the depression are necessarily the exclusive tests of danger. A small V-shaped hole may contain many of the elements of hazard to which a railway frog exposes. It could easily become covered by leaves and the like, so as to more readily escape observation. It could, indeed, become more perilous than a much larger and more conspicuous depression.”

Mr. Thompson, in his work on Negligence (Volume 8, § 6202), says:

“A city is not, as a matter of law, responsible for injuries which arise from slight depressions or differences in grade in sidewalks except where the depression or projection is peculiar and specially calculated to result in injury to pedestrians.”

Upham v. City of Boston, 187 Mass. 220 (72 N. E. 946); Leystrom v. City of Ada, 110 Minn. 341 (125 N. W. 507); Wadkins v. City of Albion, 201 Mich. 130, tend to support plaintiff’s contention.

We reach the conclusion that while a municipality is not liable, as matter of law, for slight depressions in its sidewalks, such depressions may be of such size, shape and character as to make the question one of fact, and that where the evidence tends to establish that the depression is of such size, shape and character as to form a trap in which the pedestrian’s foot may be caught and held a question for the jury under proper instructions is presented. Plaintiff under this rule made a case for the jury.

Defendant’s testimony disputed that of plaintiff as to the character of this depression. But the undisputed testimony was that it had existed for several years and the alderman of the ward in which it was located and who was chairman of the committee on streets gnd walks knew of it during its existence. It was not a latent defect and had existed for so long that the city was chargeable with notice of its condition and had had a reasonable time after such notice in which to make repair. Urtel v. City of Flint, supra; Menard v. City of Bay City, 114 Mich. 450; Hunter v. Village of Durand, 137 Mich. 53; Pearl v. Township of Benton, 136 Mich. 697. It is obvious that if this depression was of the character claimed by defendant, its notice was of that condition only, but it is equally obvious that if the depression was of the character claimed by plaintiff its notice was of that condition. In other words, defendant had notice of whatever its actual condition was. The defect, if one existed, was patent and had existed a number of years. The court did not err in refusing to direct a verdict for defendant on the ground that there was no evidence of notice to the city of the condition of the walk and a reasonable time after such notice in which to make repair, nor in the instructions given on that subject.

Plaintiff testified that two years before the trial her husband had been ill “and has not been well”— when she was interrupted by an objection. ■ The court allowed the answer to stand but the subject was not alluded to further. Defendant assigns error in permitting the testimony to stand. We do not perceive that the testimony was admissible; in fact plaintiff’s counsel does not seriously contend for its admissibility. But we are satisfied that it was not reflected in the verdict and that it was not prejudicial to the defendant.

There was no motion for a new trial on the grounds that the verdict was excessive or against the great weight of the evidence; nor do we think it was. While the verdict was substantial, plaintiff’s injuries were serious and painful.

The trial judge very clearly pointed out to the jury that they must determine the case on the facts without regard to the wealth or poverty of either party. We do not perceive that the substantial rights of the defendant were prejudiced or that we should reverse the case for this harmless error.

The other assignments of error have been considered, but we find no reversible error in them.

The judgment is affirmed.

Moore, C. J., and Steere, Brooke, Stone, Clark, Bird, and Sharpe, JJ., concurred.