author: Steeee, J.

text:
    SHADDUCK v. GRAND RAPIDS & INDIANA RAILWAY CO.
    1. Negligence — Personal Injuries — Railroads — Burden of Proof.
    In actions for negligent injuries, the burden of proving defendant’s negligence and plaintiff’s reasonable care is on the plaintiff.
    2. Same — Fellow-Servants—Master and Servant.
    Where plaintiff received personal injuries from the giving way of a chain and hook, used in moving a heavy steel truss, and it appeared that the chain was sufficiently heavy and did not break, that if the loosening of the appliance was not due to plaintiff’s act, it might properly be attributed to the negligence of the workman employed by the consignees to unload the truss, plaintiff, being a teamster for independent contractors, was not a fellow-servant of the unloading crew.
    3. Same — Volunteer—Contributory Negligence.
    In volunteering to assist the work of unloading and taking a crow bar to push the truss onto the wagon without the request of those in charge for assistance and before they could give him warning, plaintiff, who placed himself under the load as it was being swung by a derrick, was guilty of negligence contributing to his injury.

    4. Same — Master and Servant — Proximate Cause.
    Any negligence of which the defendant railway company may have been guilty in furnishing an unsuitable chain for the purpose of unloading, as a loan to the consignee, whose employees knew of its unfit condition and could have used it safely, was not the proximate cause of plaintiff’s injury.
    Error to Kent; McDonald, J.
    Submitted November 6, 1913.
    (Docket No. 79.)
    Decided March 28, 1914.

      Case by Vern Shadduck against the Grand Rapids & Indiana Railway Company for personal injuries. Judgment for plaintiff. Defendant brings error.
    Reversed; new trial refused.

      James H. Campbell, for appellant.

      Charles G. Turner and George E. Nichols, for appellee.

      As to the liability of a master for injury to volunteer, see notes in 22 L. R. A. 664; 13 L. R. A. (N. S.) 561; and 43 L. R. A. (N. S.) 187. On the question who are volunteers, see note in 16 L. R. A. 861.

   Steeee, J.

Plaintiff recovered a judgment against defendant in the circuit court of Kent county for personal injuries sustained by a heavy piece of steel roof truss falling upon him while it was being transferred from a railway car to a wagon or truck of which he was the driver.

The accident occurred on July 7, 1911, near Goodrich street, in the city of Grand Rapids, in defendant’s yard, at a point where the car which was being unloaded stood on a side track beside a derrick, which was maintained there to facilitate loading and unloading cars. The car had recently arrived .with a load of steel trussing for use in a large building called the Furniture Temple, which was being erected by Hoertz & Son, a firm of building contractors, who had ordered the material, and to whom the car was consigned. The car was hauled to Grand Rapids over the Lake Shore & Michigan Southern Railway from Rochester, Ind., and switched to defendant’s tracks after its arrival, by order of Hoertz & Son, and spotted at the derrick for convenience in unloading. Defendant’s connection with the car was to spot it at the derrick where it was to be unloaded by the consignee. Defendant received no compensation in connection with it beyond ordinary switching charges. It being a car load lot, the unloading devolved upon Hoertz & Son, the consignees. They employed a trucking firm named Golden & Boter to haul the steel from the car to where they were engaged in erecting the building for which the trussing was intended. The unloading was directly in charge of and being done by a man named Steward, einployed and sent for that purpose by Hoertz & Son. A man named Brandau, in defendant’s employ, operated the derrick by which the trusses were lifted from the car and swung to the wagon or truck as Steward directed. Plaintiff was employed by Golden & Boter as a teamster. His duties consisted of driving the team which hauled the wagon to which the truss by which he was injured was transferred from the car by the derrick.

The three men thus connected with the unloading were each in separate employment; Steward being an employee of Hoertz & Son, Brandau of defendant, and plaintiff of Golden & Boter, the transfer firm. The derrick, which belonged to defendant, was of ordinary construction, and operated by electric power. It stood upon a concrete platform adjacent to the track and, generally stated, consisted of an upright post with a movable arm or crane extending from it, along which cables passed to and over the outer end from a drum at the foot of the post. Under the outside end of the arm, at the extremity of the cable, was a pulley to which was attached a large hook extending downward. The arm or crane was raised and lowered and swung from side to side by the mechanism of the derrick as the operator manipulated it.

In handling commodities with the derrick, a so-called “hand chain” was attached to the hook at the outer end of the arm and put around the articles to be moved. It is the claim of plaintiff that hand chains were a necessary part of the outfit of the derrick to be furnished by defendant as circumstances required. This is denied by defendant; the claim being that, while it had its own chains used by its employees in unloading less than car load lots, which devolved on the carrier, chains were always furnished by consignees of full cars, who took charge of them on their arrival, and did their own unloading.

On the morning of July 7th, plaintiff was sent to the derrick by Golden & Boter with the wagon to draw the steel to the Furniture Temple, and Steward was sent there by Hoertz & Son to unload the car which had been placed on the track at the derrick the night before. The trusses were large triangular pieces of structural steel; the weight of each piece or section being some 1,600 or 1,800 pounds. The car load consisted of a dozen of these pieces.

Steward brought no hand chains, and it is plaintiff’s contention that he was not expected or required to do so. On his arrival at the car, he asked Brandau, the operator of the derrick, for a hand chain, and, after some' discussion, obtained one. It is the claim of Brandau that defendant had in a box four chains kept for its own use, and, when Steward asked for one, Brandau first asked him where his own chains were, and, being answered that Steward did not have any, he finally permitted him to take one from the box, and Steward selected the one he desired from the four. Steward testified that Brandau, when asked for a chain, could only find the one which was used; that it was very heavy and cumbersome, and he protested, but was told by Brandau he would have to use that if he used anything; that he objected because there did not appear to be as much angle in one of the hooks to the chain as there should be, and it was unnecessarily heavy to lift and use; that he realized the hook was not just right, and possibly the result might be unhooking or slipping. This hand chain consisted of an iron ring with two chains attached, having a hook at the lower end of each chain. The only charge of negligence against defendant relates to one of these hooks, which, it is claimed, was part of the equipment of the derrick furnished by defendant to do the work, and was defective.

Plaintiff was the teamster, and had nothing to do with the unloading, except to drive the wagon to the car and care for his team until he had a load. On his arrival he placed his wagon at a proper position near the car, and looked after his horses, while Steward proceeded with the unloading. In doing this he put the ring of the hand chain he had obtained upon the hook under the pulley at the end of the arm of the derrick, and attached the chains around the truss, fastening them with the hooks. The first truss was safely transferred from the car to the wagon. The second truss fell while being swung, and injured plaintiff. After the accident, this second truss was placed upon the wagon with the same chain, but another and longer chain was used in unloading the remaining trusses.

Each truss stood upright in the car, with the longest side of the triangle resting upon the floor. In loading the wagon, the trusses were placed flat on the bolsters, which were about 3% feet above the ground; it being a truck wagon, the top of the wheels were about the same height. In the process of unloading, each truss was first lifted from the car with the chains attached to the top piece and lowered until it lay flat on the ground. The chains were then readjusted so as to raise it flatwise and thus lay it upon the wagon. While this second truss was being raised from the ground, after being lifted out of the car and. the chains rearranged, it did not exactly balance. Steward was standing at one end of it, and plaintiff at one side opposite the wagon, Brandau standing by the derrick operating it as indicated to him by Steward. As the truss was raised to swing it over upon the wagon, and Steward, holding at the end, was apparently having some trouble in keeping it balanced, plaintiff took a crowbar and pushed with it against the truss. Just as lie did so, the chain loosened, and the truss fell upon and injured him. Only Steward, Brandau, and plaintiff witnessed the accident.

Steward, a witness for plaintiff, testified that during almost all the time until the accident plaintiff was near his team looking after them, but was standing back more watching the operation than anything else as the truss which fell was being raised, and says:
“At this time, just as we saw the piece of steel start to swing, he made a jump to assist in pushing the other end back. * * * I cannot tell what it was that he took in his hand, a bar of some kind, and reached up as the steel was higher. I was pushing one end, and the other end shot up in the air. He picked up something and used a rod to reach the other end to push against it. * * * Just about that time the chain unhooked and fell.”

Witness further stated that -the end which he had hold of was nearer the ground when the truss fell, and it struck first on the east side, which was the heaviest, then down on the west side, which caught plaintiff; his head and neck being under the truss, and his feet and body out.

Plaintiff testified that, as they raised the piece, it hung with one end higher than the other, Steward having hold of the front or low end, lifting up; that, not being able to' reach the other end with his hand, plaintiff took a crowbar to assist in swinging it over, and was “kind of pushing and swinging it over the wagon;” that it was about over the wheels, and had to be shoved about four inches before it could be let down, when “I just had a breath that the beam was top of me and then I passed away; I didn’t know nothing. * * * It struck me on the right side at the top of the head.”

Brandau, a witness for defendant, testified that he was operating the derrick in response to a signal to raise, and—

“When I looked up Mr. Shadduck had a crowbar in his hand, and shoved her on that point, and I looked around to see how she was coming, and, as I looked around, the crowbar was between the hook and the chain, and I gave a yell out of me, shut down the machine, and before the machine was shut down, in fact before the wind was out of my mouth, the piece came down. * * * When I -first saw him was when he had the crowbar up against or in the chain; then I hollered.”

Plaintiff, being recalled as a witness, denied that he put the crowbar between the hook and chain, or touched the chain with the crowbar- ,-

Plaintiff was at once taken in a practically unconscious condition to a hospital, and cared for by a physician, who testified that an examination disclosed four of plaintiff’s ribs fractured, a wound in his back penetrating the lung, bruises with discoloration extending from the knee over his hip along the back to his shoulder, and a scalp wound on his head. At the end of 15 days plaintiff was able to leave the hospital, staggering with a cane, as he testified, out to a hack which took him to the train by which he went to his former home at Cedar Springs. After leaving the hospital, he had no further medical attendance, so far as shown. The doctor who attended him when first injured states that he did not see him again after he left the hospital until October 26, 1912, when he called at the office shortly before the trial to “get a statement,” or “give a statement to me of his condition.” The extent and permanency of his injuries were issues of fact in controversy in the case.

In our view of this case, the important and controlling question raised in defendant’s numerous assignments of error is whether, under the undisputed evidence, there was any issue of fact to be submitted to a jury. This question is presented and preserved by proper motions, and requests to charge on the subjects of defendant’s negligence and plaintiff’s contributory negligence and exceptions timely taken.

In this State the burden of proof on both defendant’s negligence and plaintiff’s freedom from contributory negligence rests upon the plaintiff.

The contention that hand chains were not a necessary part of the equipment of a derrick which it was the duty of the defendant to furnish is of minor importance here. While it can well be said that the derrick, as such, was complete for handling all articles within the scope of its capabilities, which might in any manner be attached to the hook on the pulley at the end of the cable on its arm, and many things could be securely attached by other means than chains, it is undisputed that- chains were kept and used for that purpose, and were furnished by defendant on the day in question. Whether it was customary for the consignee of car load lots, whose duty it was to unload, to furnish its own chains was a matter in dispute. For the purpose of the present inquiry, it may be assumed it was not.

While there is some difference between Steward and Brandau as to what was said, Steward knew there were other chains than the one he used. He says: “The one we had used was not there.” They searched for it, but did not find it. Brandau said he guessed they would have to use that one if they used any, and they did. The chain was strong and sufficient for the proposed duty, if properly attached. Steward’s complaint was not only as to the hook, but that the chain was unnecessarily heavy. He saw the condition of the hook and questioned it, but took the chain and made the attachments as he saw fit. Knowing and understanding the condition and possible insecurity of the hook, it was incumbent on him to exercise commensurate care. Defendant had no control over the manner in which he used the chain. It was a simple appliance which could be attached in various ways, as could a rope, with or without hooks or rings. It was possible to fasten it adequately, and it did handle two pieces of trussing that morning, being attached and detached twice each time. The only time it failed was when plaintiff pushed and swung it with a crowbar. If the giving way at that time was not caused by plaintiff’s crowbar, it could well be attributed to Steward’s negligence in fastening the chain, he being in charge of the unloading, with full authority to decide in what manner the work should be done, and how the chain should be fastened.

Plaintiff was not in defendant’s employ nor under its control. It owed him none of the duties of a master to a servant. He was in the employ of Golden & Boter, who were in the employ of Hoertz & Son, who were not in defendant’s employ, but were engaged in unloading their own material from a car in defendant’s yard. Plaintiff was there as a teamster; he was not there to unload the car. That duty devolved upon Steward. They were not fellow-servants. 1 Shear-man & Redfield on Negligence, §§181-225; Kastl v. Railroad Co., 114 Mich. 54 (72 N. W. 28).

According to the testimony of Steward, who was plaintiff’s witness, plaintiff was, for most of the time before the accident, engaged in the line of his duties, caring for his team. Just before the accident, he was standing back watching the operation of unloading. The act which led him into danger was outside of the line of his employment, as a volunteer, sudden and unexpected to those doing and in charge of the work, without request or instruction, or time for them to give him warning.

Plaintiff was 41 years of age, of apparently average intelligence, and with 12 years’ experience in using and fastening chains in heavy lifting, pulling stumps and clearing land. He states that he paid no attention to the condition of this chain, and did not know how it was fastened. Yet he put himself under the heavy, swinging truss, 30 to 40 feet long, and weighing 1,800 or 2,000 pounds, as he testified, being raised by this chain and hanging so high above his head that he could not reach it with his hands, and there proceeded to “kind of push and swing it” with a crowbar. In taking this manifest position of danger, and thus exposing himself to unnecessary and obvious risks, he failed to exercise that degree of ordinary care and prudence which a discreet and cautious individual and the great mass of mankind would, or ought to, observe under like circumstances.

“Contributory negligence, in its legal signification, is such an act or omission on the part of a plaintiff, amounting to a want of ordinary care, as, concurring or co-operating with the negligent act of the defendant, is a proximate cause or occasion of the injury complained of. To constitute contributory negligence there must be a want of ordinary care on the part of the plaintiff, and a proximate connection between that and the injury.” Beach on Contributory Negligence, § 7.

To negligently put one’s self in a place of danger is a proximate, concurring cause of an injury then and there following; for, whatever the negligence of the defendant, the injury could not have been sustained if the plaintiff had not been careless and neglectful in guarding his own safety.

There were no contract relations between defendant and plaintiff. He was a third party. Defendant’s alleged negligence in furnishing the defective chain complained of to Hoertz & Son was but a remote cause .of plaintiff’s injuries, which were received while the chain was being used by Steward. The use then made of it by Steward and his manner of using, together with plaintiff’s conduct in exposing himself at that time, were the direct, concurring, proximate causes of the injury. Between the remote cause and the injury there was an intervening, independent, controlling human agency acting with full knowledge of the visible defect, and which, with that knowledge, might have prevented the accident. In such case the owner is not answerable to a third person by reason of the use of a leased or loaned defective article by one over whom he has ho control. Fowles v. Briggs, 116 Mich. 425 (74 N. W. 1046, 40 L. R. A. 528, 72 Am. St. Rep. 537); Griffin v. Power Co., 128 Mich. 653 (87 N. W. 888, 55 L. R. A. 318, 92 Am. St. Rep. 496).

For the foregoing reasons, we are impelled to the view that the judgment must be reversed, and no new trial granted.

McAlvay, C. J., and Brooke, Kuhn, Stone, Ostrander Bird, and Moore, JJ., concurred.


source: Caselaw Access Project

author: Steere, J.

license: Public Domain

text:
    MACATAWA TRANSPORTATION CO. v. FIREMEN’S FUND INSURANCE CO.
    1. Insurance — Trial — Inconsistent Positions — Appeal and Error.
    Where plaintiff brought action for insurance under a policy of marine fire insurance, and plaintiff obtained judgment, which was reversed, on error, and the cause remanded for retrial of the issue whether the exposing buildings were within the limit stated in the application, it was not erroneous to receive evidence, offered by plaintiff on the second trial, that plaintiff had not, in fact, represented that no exposing buildings were within 500 feet of the property, and plaintiff had' no knowledge of any such statement being in the written application; defendant’s objection that this position taken by plaintiff was inconsistent with his claim on the first trial was properly overruled, the pleadings and issues on both trials being similar.
    2. Same — Pleading.
    It is sufficient, in a declaration on a policy of fire insurance, to aver the performance of conditions precedent; it is not necessary to allege that conditions subsequent were performed or to negative matters of defense; plaintiff being entitled to meet them as they arise.
    3. Same — Fraud—Warranties—Marine Insurance.
    Evidence that .defendant’s insurance solicitor prepared and signed the application, which was described therein as a survey, for insurance on a gasoline launch, that he obtained his information from the captain of the boat who testified that he had no authority from plaintiff corporation to take out insurance and he signed the paper in haste without reading it, and that he made no representations relative to exposures, presented a question for the jury as to the making of the alleged false representations.
    4. Same — Marine Insurance — Survey.
    As used in marine insurance, the word survey imports only a plan and description of the then existing condition and mode of use of property.
    5. Same.
    Having accepted a fire insurance policy referring to a survey, the insured became bound by the terms of such survey except as to such representations as were of an executory character, or related to the use or occupation of the premises subsequently to the date of the policy.
    Error to Ottawa; Cross, J.
    Submitted November 13, 1913.
    (Docket No. 115.)
    Decided March 27, 1914.
    Assumpsit by the Macatawa Transportation Company against the Firemen’s Fund Insurance Company on a policy, of marine insurance. Judgment for plaintiff. Defendant brings error.
    Affirmed.

      Gore & Harvey, for appellant.

      Diekema, Kollen & Ten Cate, for appellee.
   Steere, J.

This action was brought upon a certain insurance policy issued by defendant covering a gasoline launch named Holiday, which was practically destroyed by fire on September 19, 1908. It is again before this court after a retrial following its reversal by a former decision reported in 168 Mich. 365 (134 N. W. 193, Ann. Cas. 1913C, 69). The former opinion contains sufficient statement of the case for a general understanding of the subject of the controversy, and need not be repeated.

Under the record then presented and questions raised, it was held that the principal issue of fact for retrial was whether any of the buildings within 500 feet of where said launch was laid up for the season were exposing buildings within the language of the policy. The trial court had instructed the jury contrary to the rule on that subject found in King v. Insurance Co., 140 Mich. 258 (103 N. W. 616, 6 Am. & Eng. Ann. Cas. 87).

The record now presented shows that on a retrial that issue of fact was settled adversely to plaintiff; the jury finding, in answer to special questions, that there were two dwellings distant less than 500 feet from the place where the Holiday was laid up at the time of the fire.

On the second trial plaintiff, against defendant’s objection, was allowed to introduce a line of testimony tending to show that, when application for insurance was made, it was not in fact represented that no exposing buildings were within 500 feet of the place of laying up said launch, and that plaintiff had no knowledge of any such statement being in the written application for a policy until after the fire had occurred. Upon this issue the jury found in favor of plaintiff, and rendered a verdict for the amount of the loss.

It is the contention of defendant that plaintiff was erroneously permitted, not only to enlarge the issue, but to try the case upon a different theory entirely inconsistent with that upon which the first trial was had, and under the same unamended declaration. In their brief defendant’s counsel state their position as follows:

“The first theory was liability under the application and policy as drawn; the second theory is predicated upon misrepresentation and fraud. We submit this declaration could not be amended to meet such proof for the reason that such amendment would necessarily state a new cause of action, which the law forbids.”

The abundant authorities cited for defendant are conclusive on the proposition that plaintiff cannot be permitted upon retrial of a case to take a position wholly inconsistent with claims made upon a former trial. A comparison of the printed records of the two trials fails, we think, to disclose that plaintiff has adopted an inconsistent theory or raised a new issue on the second trial. At both trials the pleadings were the same, and the testimony along the same lines. The special notice attached to defendant’s plea advised, amongst other things, • it would show on the trial as a defense that the written application for insurance represented and warranted the boat burned would not be laid up within 500 feet of any exposing building, and that in fact it was laid up and stored at the time of the fire in a frame building less than 500 feet from exposing buildings. The application was made a part of the policy, though not attached to it, nor delivered with it to the insured, but was retained by the insurer. It contained 59 questions, the last of which was as follows: “Give distance in feet to exposing buildings. A. 500 feet.” It purported to be signed by W. S. Miller (president of the company owning the boat), per F. Van Ry, Master.

The launch was laid up in a stall in a boathouse at the summer resort on Macatawa Bay, and was destroyed by fire on September 10, 1908, in the nighttime. The fire originated in and was confined entirely to the boat, which was floated from its stall while burning into open water, where it burned to the water’s edge. There were neighboring boathouses close to the one in which it was laid up, and several other buildings located within less than 500 feet, including two occupied cottages. In avoidance of its apparent violation of the terms of its policy, plaintiff claimed, and introduced evidence at both trials, over objections, to show that the structures within the 500-feet limit had no influence upon the loss, and were not exposing buildings, and that Frank Van Ry, the master, not only had no authority to make or sign any application, but did not know the paper he signed was an application for insurance, nor did he give any information, in that connection, as to laying up of the boat; that the answers were filled out in the application by an agent of defendant, and neither Miller nor Van Ry knew any written application for insurance had been made until after the fire. The testimony upon that subject was quite fully gone into on both trials.

On the first trial in the lower court it was assumed in the charge that the application was binding upon plaintiff, and the jury was erroneously instructed, under section 5180, 2 Comp. Laws, that, in order to prevent recovery on account of a breach of the policy by plaintiff, it was incumbent on defendant to show that it had been injured by reason of such breach. The jury evidently found for plaintiff, under this instruction, because it was not shown that any of the adjacent buildings caused or contributed to the fire. The case was reversed under the ruling in King v. Insurance Co., supra. At the former hearing of this case in this court counsel for plaintiff also urged in their brief:

“That Frank Van Ry, the master, had no authority and had never been instructed to make or sign any application for insurance, and that he never gave the information to defendant’s agent found and contained in the application, and that Mr. Miller never knew of this application having been made or signed, and never had the application, until long after the fire had destroyed the boat.”

We find no inconsistency on the part of plaintiff in theories at the first and second trials, though it may be conceded that upon the second trial more attention is given to contradicting the application, as a result of the former decision. The stated grounds of objection urged to this line of testimony on this trial related to its competency and admissibility under the declaration, rather than that plaintiff had shifted its position.

It is contended that the declaration is not sufficient to permit an attack upon the application which is a part of the policy on the validity of which plaintiff relies for recovery; that plaintiff was by its declaration affirming the provisions of the policy, including the application, and could not submit proof that the application was obtained by fraud, dishonesty, or altered after being signed, at least without an amendment, which in this case would be objectionable as presenting a new and different cause of action. We think it well settled that a declaration on an insurance policy is good if it alleges performance of conditions precedent, and that it need not aver compliance with conditions subsequent nor negative matters of defense, but may meet them on the trial as they arise. Whipple v. Insurance Co., 20 R. I. 260 (38 Atl. 498); Phenix Ins. Co. v. Stocks, 149 Ill. 319 (36 N. E. 408); Throop v. Insurance Co., 19 Mich. 423. In the latter case the policy relied upon by plaintiff provided, “if this policy be made and issued upon, or refer to an application, * * * such application shall be considered a part of the contract and a warranty by the insured;” and it was held unnecessary to set the application out in the declaration when stating the contract according to its legal effect.

The application in this case was retained by the insurer, as in Mutual Benefit Life Ins. C.O. v. Robertson, 59 Ill. 126 (14 Am. Rep. 8), where it is said:

“Conceding that the representations contained in the application for the policy were made warranties by the reference to them in the policy, still we cannot say that they were untrue. * * *
“Appellee was not bound to set out the application and prove its truth. This paper must have been in the custody of appellant. The company-might have introduced it, and proved its representations to be false.”

Shortly after the decision in Throop v. Insurance Co., supra, in which there was a dissenting opinion, old Circuit Court Rule 104 was adopted. Its provisions have been retained in the present Circuit Court Rules '3 (c) and 7 (d). Since the adoption of Rule 104 numerous cases have been decided in which plaintiffs, seeking to recover under an insurance policy, have questioned the validity of the application for insurance. Those cases, confirmed by examination of the original pleadings in the records of this court, impel to the conclusion that all the pleadings in the instant case are in harmony with settled practice, and that the declaration authorizes the testimony objected to, if otherwise admissible.

We find nothing in the previous decision of this case as then tried which limits plaintiff, on a retrial, to testimony bearing upon the question of exposing buildings. As the record then indicated, that was the important issue to be again tried; but the court did not attempt to, and could not, limit the trial de novo to that single question, to the exclusion of any competent testimony material to the issue, authorized by the pleadings.

Error is assigned upon the following portion of the charge. After reading question 59 and the answer, the court said:

“The plaintiff, on the other hand, contends that Frank Van Ry, who signed the application, did not .read it, nor have it read to him, and was ignorant of the fact that the application contained the question and answer above referred to, that no such question was put to him, and that no such answer was made by him, that the agent of the insurance company assumed the preparation of the application, and that, if the application did contain the question and answer above set forth, the agent did not act honestly and misled him. I charge you that this is a question of fact for you to determine, and that, if you find that the contention of the plaintiff as above set forth is true and correct, then the plaintiff would not be bound by the answer to the said question, and may recover, although this boat was laid up within 500 feet of an exposing building at the time it burned.”

The testimony, practically undisputed, upon which this instruction is based, showed that an oral application for insurance was made by Mr. Miller, president of the owner of the boat, at the insurance office of Charles A. Newton Company, in the Insurance Exchange, Chicago. He was well acquainted with Newton, who resided in Chicago and at Macatawa Park, occupying a cottage at the latter place a portion of the time. The boat had been recently purchased, and was then in Chicago. Miller testifies:

“Mr. Newton was not in; but the clerk in the office said they would see about it. I says, T am anxious to have it insured as soon as possible because we want to take the boat across the lake tonight, and I want you to see to it that we get some insurance on that boat, if it is possible, as I am going away, and I will not have time to attend to it.’ They wanted to know, where the boat was. I informed them where the boat was at that time, and that the captain or somebody would be on board of the boat lying near the bridge, Randolph street bridge. I did not make any written application for insurance. I never did; only verbal. For insurance I never signed any application. I never authorized Frank Van Ry or any other person to sign a written application. I did not know it was necessary.
“Q. When did you first learn, if ever, that there was a written application for this insurance?
“A. After the fire.”

This policy was later received by mail, and the premium paid. Newton testified that he was doing an insurance business bringing net premiums of about $200,000 per year, and handled marine insurance occasionally; that, after receiving this application, he placed the insurance with the Motor Boat Insurance Agency, of St. Joseph; that he did not see Mr. Miller then, but—

“When I came back from lunch I was informed by my cashier that Mr. Miller had been in there, and had left an order for the insurance of the boat. Í reached down in my desk where I kept papers and took out a survey blank, and instructed one of my clerks to go over to Randolph street slip where the boat was to get the data so I could put the insurance on the boat, and telegraph Mr. Kelly of St. Joe the boat was leaving that day, and to cover it. * * * There are 59 questions and answers on that sheet (referring to the application or ‘survey’). The signature there, ‘Maeatawa Resort Company,’ is in my handwriting. I signed ‘Maeatawa Resort Company’ to that application after it was brought back to my office. I put the words ‘P-r-e-s-t.,’ standing for president, after the name of S. A. Miller. * * * I had other printed supplies from Mr. Kelly; rate sheets, and addressed envelopes, and paraphernalia for doing business with him. I had used some of these blanks before in placing insurance on launches, and charged 5 per cent. * * * At the time I took this application I had been familiar with the location known as Maeatawa Park five or six years. I knew where the boats were laid up in winter.”

On the same day Newton, after placing the insuranee by telegram, wrote Kelly in fuller explanation of the same, stating, among other things:

“We inclose herewith a full survey today made by the writer; the technical points having been answered by Mr. Van Ry, who is at the present time and will continue to serve as master during the coming season.”

Van Ry, the captain of the boat, testified that he had no authority whatever to make application for insurance, and did not knowingly do so; that he had no knowledge any written application was made until after the boat burned, and supposed what he signed was just a “survey,” giving general information about the boat, as he knew they intended to insure her before she went across the lake; that, while they were lying at the Randolph street slip in Chicago, on the day they left, a young man came aboard and said that Mr. Miller had been to their office to insure the Holiday, and wanted some information; that he asked various questions as to the length, breadth, age, make of boat, kind of engines, equipment, etc., and witness gave him the information; that he did not ask anything about laying her up or the distance to exposing buildings to witness’ remembrance; that the young man was seated, writing on a board, as they talked, apparently taking down the answers on a paper; that witness did not notice what he put down or read the paper at all, thinking Mr. Miller had attended to whatever application was necessary, and that the young man was simply getting a description of the boat and inventory; said — “That he was in a great hurry and wanted to go to a ball game. He said, ‘Captain, I wish you would please sign this paper, pertaining to the conditions of the boat and description of the boat.’ I signed it. He jumped over the rail and run. * * * I didn’t read it. Simply took his word for it.”

It is to be noted that the policy is for marine insurance, and the application is also designated a “survey;” a “survey blank” having been used. Van Ry, being a sailor, apparently had some knowledge of marine surveys. This term, as used in marine insurance—

“In its strict signification, as well as in the broader meaning which it may be supposed to have as applied to the subject-matter, can be taken to import only a plan and description of the present existing state, condition, and mode of use of the property.” Denny v. Insurance Co., 79 Mass. (13 Gray) 492.

In that case the term was used in a policy of insurance on a woolen mill. The survey was signed by a third person without express authority. The policy declared upon its face that it was “made and accepted ■ in reference to a survey on file at this office.” The court, after discussing the meaning of the word in connection with insurance, said:

“Admitting the soundness and force of this argument, and that the plaintiff is bound by the survey so far as he has recognized and adopted it by accepting the policy, the question still remains to be determined, to what extent such recognition and adoption go. * * *
“Such being the true import of the word ‘survey/, we can have no difficulty in ascertaining the extent to which the plaintiff is bound by the representations and stipulations contained in the paper which the defendants offered in evidence at the trial. So far as they are of an executory nature, or relate to the use or occupation of the premises subsequently to the date of the policy, it is clear that the plaintiff is not bound by them.”

When Newton, the insurance agent to whom application was made for the insurance, obtained it from defendant through its agent, the former became, under the facts shown, agent of the insurer in the transaction. McGraw v. Insurance Co., 54 Mich. 145 (19 N. W. 927). He at the time advised defendant that he had made the survey, the technical points having been answered by Van Ry, which is in harmony with Van Ry’s testimony. The questions of waiver and knowledge of the agent who took the application are not the controlling points for consideration. The questions raised by the testimony and portion of the charge objected to are the authority of Van Ry to make the application, and whether or not he made answers to the agent as written in the survey. We think, under the circumstances shówn, such testimony was admissible, and the issues properly submitted to the jury. Ostrander on Insurance, §§1-3; German-American Ins. Co. v. Hart, 43 Neb. 441 (61 N. W. 582); Wilder v. Accident Ass’n, 14 N. Y. St. Rep. 365; Kister v. Insurance Co., 128 Pa. 553 (18 Atl. 447, 5 L. R. A. 646, 15 Am. St. Rep. 696); Brown v. Insurance Co., 65 Mich. 306 (32 N. W. 610, 8 Am. St. Rep. 894); Haapa v. Insurance Co., 150 Mich. 467 (114 N. W. 380, 16 L. R. A. [N. S.] 1165, 121 Am. St. Rep. 627), where the rule is restated and authorities reviewed.

We find no reversible error in the record, and the judgment is affirmed.

McAlvay, C. J., and Brooke, Kuhn, Stone, Ostrander, Bird, and Moore, JJ., concurred.


text:
    CITY BANK & TRUST CO. v. HURD.
    1. Injunction — Equity—Restraining Action at Law.
    Since equity will not enjoin the enforcement of a judgment if there is an adequate remedy at law, the remedy is not usually available against a sale of real or personal property on execution: the jurisdiction is very limited, and attaches only in exceptional cases.

      2. Same — Execution—Irreparable Injury.
    A sale under execution at law will not be restrained by the court of equity if the property subject to levy is not in use or has no peculiar or special value to the proprietor because of association, antiquity, or rarity; the remedy by an action for damages will be presumed to be adequate.
    3. Chattel Mortgages — Notice—Bona Pide Purchasers — Creditors Having Knowledge — Record.
    An unrecorded chattel mortgage, not accompanied by an immediate delivery and followed by an actual change of possession, is void as against a creditor of the mortgagor who has actual notice'of its existence; although notice is equivalent to filing in the case of subsequent purchasers and mortgagees. 3 Comp. Laws, § 9526; Act No. 258, Pub. Acts 1905. See 4 How. Stat. [2d Ed.] §§ 11407 and 11410.
    4. Amendment — Equity—Pleading.
    Where it was shown at the hearing that a complainant was entitled to a credit of which it had no previous tnowledge, it should have been permitted to amend the bill of complaint for an injunction. Amendments as to matters germane to the case can be allowed at any time in chancery suits, to conform with the proofs, protect the substantial, equitable rights of the parties and secure the ends of justice even in the appellate court.
    Appeal from Lake; Withey, J.
    Submitted November 11, 1918.
    (Docket No. 88.)
    Decided March 27, 1914.
    Bill by the City Bank & Trust Company against James D. Hurd and others for an injunction. From a decree for defendants, complainant appeals.
    Modified and affirmed.

      Lucking, Helfman, Lucking & Hanlon, for complainant.

      A. A. Reiser and M. B. Danaher, for defendants.
   Steere, J.

This suit primarily involves the validity of an execution levy on 16 electric motors in the county of Lake, Mich., as against a foreign unrecorded trust deed, or indenture, in its nature a mortgage, covering all its grantor’s then owned and after-acquired real and personal property. Said levy was made at the instance of defendant Hurd herein, who, as plaintiff in an attachment suit entitled James D. Hurd v. Mobile Portland Cement & Coal Company, recovered a judgment in said Lake county, on October 24, 1911, for $1,637.68, against the defendant, which was a Maine corporation having most of its property and principal place of business in the State of Alabama. Defendants Bates and Wolgamott are, respectively, sheriff and deputy sheriff of Lake county; the latter having made said levy. They are made parties and concerned in this suit only by reason of their official action in that particular.

The motors were part of a cement plant, located in Lake county, which said Mobile Company had bought in January, 1911, of the Great Lakes Portland Cement Company, of Marlboro, Lake county, Mich., and had dismantled in the process of moving it to Alabama for re-erection there. Said Mobile Portland Cement & Coal Company, which was incorporated in Maine, on a liberal scale, with an authorized capital of $6,000,000 and a total authorized bond issue of $3,000,000, gave, on September 1, 1908, a trust deed or indenture in the nature of a mortgage to secure its bonded indebtedness, to the Carnegie Trust Company of New York, as its trustee. This somewhat lengthy instrument conveyed in trust the grantor’s property, both real and personal, consisting of lands, mills, coal mines, boats, barges, franchises, etc., “now, owned by the company or which may in the future be acquired by it.” The Carnegie Trust Company subsequently failed and, it becoming necessary to secure a new trustee, complainant, a corporation organized under the laws of Alabama for the purpose of carrying on a banking and trust business, was appointed as such trustee. Acting in that capacity, it filed this bill of complaint in the circuit court of Lake county, in chancery, asking an injunction to restrain the sale of said motors under said execution, alleging, amongst other things, that they were “subject to a certain mortgage covering said personal property and held by your orator as trustee,” averring as further ground of equitable relief that, if such sale is not restrained, “your orator will be greatly and irreparably damaged, and property in which your orator has an interest and duty to preserve, and worth upwards of $15,000, will be sacrificed on a forced sale for a claim of $1,650.”

Aside from those portions of its bill which import its duty as trustee to protect trust property, complainant can scarcely be said to bring itself within the jurisdiction of a court of chancery. The jurisdiction of courts of equity to stay proceedings at law after judgment, though recognized in exceptional cases, is very limited. As a rule, the remedy is not allowed against a sale of realty, nor of personal property on execution where relief is available in a proceeding at law. An adequate remedy at law is said to be the general test. The claim that this levy is excessive is not tenable (1 High on Injunctions [4th Ed.], §121), and has been abandoned. Neither can the claim of irreparable injury be recognized as a ground for equitable relief by injunction to restrain execution, where, as in this case, the property levied upon is not in immediate use and has no peculiar or special value to the owner by reason of association, antiquity, or rarity, but is a commercial article of easily ascertained market value and can be readily replaced.

Hurd’s judgment by attachment was without personal service of process and limited in its scope of execution to the property seized. Assuming that complainant’s special rights and obligations as trustee to protect and conserve this property authorize the filing of this bill to restrain execution, at the threshold of the inquiry we find it undisputed that complainant has failed to take the usual precautions to protect the property of its cestui que trust in this State by resort to the provided recording laws.

The trust deed upon which complainant relies as being in the nature of a chattel mortgage covering these motors was recorded in two counties in Alabama, but it is admitted it was never filed and of record in Lake county, Mich. In avoidance of the effect of such omission, it is claimed that Hurd had actual knowledge and notice of the. same before the alleged indebtedness on which he recovered said judgment accrued, by reason of his having been an employee of complainant’s mortgagor in a clerical and confidential capacity, where he learned of this trust deed and became familiar with its provisions.

The judgment in question was upon a note given for wages earned by Hurd while in the employ of the Mobile Portland Company from November 1, 1910, to May 1, 1911. He was located in the office of the company at Mobile, and states he went there to have charge of the development and operation of the coal properties of the company, and in that connection had access to its books and papers and learned of the trust deed; he helped prepare a prospectus of the enterprise with maps, photographs, etc., with a geheral statement of its obligations, assets, aspirations, and prospects for public use, which he states was a “gold brick prospectus” and did not mean anything to him. Without going further into the evidence upon that question, it may be regarded as established that by reason of his relations with the company Hurd had knowledge of the trust deed in question and learned of the purchase and proposed removal of the Marlboro cement plant to which the motors belonged.

It is the contention of complainant that the only purpose of the recording laws is to give notice of title or incumbrances upon property and thereby protect innocent purchasers and creditors who otherwise might deal in ignorance of the facts; that, if the creditor has actual notice, the purpose of the law has been reached, and as to him the situation stands the same as though the recording laws had been observed; and it is urged the settled rule is that an unrecorded incumbrance is good as against all creditors who had not given credit in ignorance of it.

Act No. 258, Pub. Acts 1905, relative to the recording of chattel mortgages, provides (section 10) that—

“Every mortgage, or conveyance intended to operate as a mortgage, of goods and chattels, which shall hereafter be made, which shall not be accompanied by an immediate delivery, and followed by an actual and continued change of possession of the things mortgaged, shall be absolutely void as against the creditors of the mortgagor, and as against subsequent purchasers or mortgagees in good faith, unless the mortgage, or a true copy thereof, shall be filed in the office of the township clerk * * * where the goods or chattels are located,” etc. (4 How. Stat. [2d Ed.] § 11407.)

The statute further provides that no officer shall receive or file such an instrument in his office unless an affidavit is made stating that the consideration for such instrument was actual and adequate and given in good faith for the purposes stated in the instrument. Every such mortgage ceases to be valid as against creditors at the expiration of one year from the time of its filing, unless an affidavit of renewal is annexed, and filed therewith, which must be done each year to keep it in force. 3 Comp. Laws, § 9526 (4 How. Stat. [2d Ed.] § 11410).

It is not the settled rule to be deduced from numerous decisions of this State that a subsequent creditor with knowledge cannot in law be a creditor in good faith, as applied to an unrecorded incumbrance. This court has held, in substancé, that the statute does not apply to creditors whose claims accrued prior to the execution and delivery of an unrecorded mortgage. Brown v. Brabb, 67 Mich. 17 (34 N. W. 403, 11 Am. St. Rep. 549); Littauer v. Houck, 92 Mich. 162 (52 N. W. 464, 31 Am. St. Rep. 572); First Nat. Bank of Kalamazoo v. Guntermann, 94 Mich. 125 (53 N. W. 919); and Heenan v. Varnish Co., 138 Mich. 548 (101 N. W. 806). Language is used in these cases, and others which are cited, giving importance, to a greater or less degree> to notice or lack of notice by a creditor of a nonrecorded mortgage which he is resisting. In certain cases under the circumstances there shown, knowledge has been held to ' be of controlling importance and equivalent to recording. Numerous cases presenting various phases of the question are found cited in Brown v. Brabb, supra, and in the footnotes of Damm v. Mason, 98 Mich. 237 (57 N. W. 123). The latest treatment of, and rulings by this court upon the subject is People, for use of Esper, v. Burns, 161 Mich. 169 (125 N. W. 740, 137 Am. St. Rep. 466), where it is held settled in this State that actual notice by a creditor of the existence of an unrecorded mortgage is not inevitably a sufficient substitute (to give it priority) for recording the same. After citing numerous cases in which it is held that “a chattel mortgage, where possession is not given, is void as against the mortgagor’s creditors, if not put on file in the proper office, even though recorded elsewhere by mistake,” the court says:

“But as to subsequent purchasers and mortgagees notice is equivalent to filing. American Cigar Co. v. Foster, 36 Mich. 368; Read v. Horner, 90 Mich. 152 (51 N. W. 207). It is well that we keep this distinction in mind in considering this statute, for actual notice to the creditor of the existence of the mortgage does not appear to be sufficient. One who seeks to benefit from the recording laws must incur all risks of the failure to put his papers duly upon record. * * * An instrument which conforms to the recording laws, and which is recorded, is notice to every one; but an instrument which does not comply with the statute is notice to no one, even if recorded. * * * It was clearly the duty of the mortgagee, if he wished to take advantage of the statute, to see that all its requirements had been complied with, and, if the mortgagee is content, as in this case, to take chances in that regard, and to leave it to the mortgagor, and the mortgagor does not comply with the statutory requirements, then the mortgagee should suffer the consequences, and not the creditor who seeks to collect his judgment.”

In'that case the court was passing upon the priority of a chattel mortgage predating the judgment, and which, though filed with the proper officer, was not in compliance with the recording law because the requisite affidavit, though attached, was not sworn to until after the levy; but the significance of the opinion, as applied to this case, is that after a review of the authorities the conclusion is reached “that actual notice to the creditor does not appear to be sufficient.”

Hurd was not a subsequent purchaser or mortgagee, against which classes notice is squarely held equivalent to filing, but a subsequent creditor in good faith, seeking to recover withheld wages for labor from an employer against whom he had secured a judgment and who owned the property he levied upon. As such employee, he acquired a general knowledge of the instrument in question, a lengthy document, variously designated in the record as an “indenture,” a “trust deed,” a “mortgage,” and a “chattel mortgage,” complicated in its nature, involving characteristics of a deed to real estate and a bill of sale of personal property, conveying the title in trust, a mortgage of realty, and a chattel mortgage, with descriptions of numerous kinds of property, and various conditions and provisions, amongst which was the one that it should apply to after-acquired property. It was executed in the State of New York in 1908, had not only never been filed and recorded in Michigan, but was not entitled to record for the same defect pointed out in People, for use of Esper; v. Burns, supra. It was approximately two years old when Hurd went into the employ of the grantor. He learned during the course of his employment of this instrument, and for his employer assisted in preparing a prospectus, claiming the mortgage yet in existence. Assuming that he knew, which he denies, or is presumed to have known, that the instrument covered after-acquired personal property in Michigan, the fact that he acquired knowledge of the instrument through his employment does not estop or put him in any different position in asserting his claim than that of any other creditor with like knowledge. We conclude, with the learned chancellor who heard this suit, that, under People, for use of Esper, v. Burns, supra, as applied to the circumstances of this case, Hurd ought not in reason to be put in a worse position, nor complainant in a better, than a creditor with knowledge of a chattel mortgage defectively on file and a mortgagee who had actually deposited his mortgage for filing with the proper officer, but failed in some particular to comply with all legal requirements, in which case the mortgagee must suffer the consequences, and not the creditor who seeks to collect his judgment.

It was shown on the hearing that Hurd, at the time he left the employment of the Mobile Cement Company, received as collateral to the note given him for his wages bonds of the company of $4,500 face value, and it is claimed under authority cited that he cannot satisfy his debt out of property pledged as security for such bonds. If he were trying to collect the bonds he held this rule would preclude him; but, under the proofs and pleadings in this record, he is not. He recovered a judgment on the note evidencing his debt for wages. The bonds were not sued upon. Furthermore, this question is not raised by complainant’s bill; but in that connection the testimony disclosed a situation where, under proper pleadings, complainant, as the testimony now stands, is entitled to equitable relief. It was shown on the examination of Hurd, who was called by complainant and examined under the statute relative to calling the opposing party as a witness, that, his note not being paid nor the collateral bonds redeemed according to agreement, he sold the bonds after frequent demands and protest of the note for nonpayment, and there ultimately came into his hands as proceeds of such sale $750. He testified that he first sold them through his attorney to his wife, before starting his attachment suit, for $10, which he credited on the note, and that he later sold them for his wife, for $750, after he had secured his judgment as he recollected it.

On September 26, 1912, the circuit judge filed a written opinion, which was adverse to complainant’s case as stated in its bill, but concluding as follows:

“I do not know, and am not able to recall, the state of the pleadings in regard to the $750 which defendant Hurd admits he received by way of his wife, from the bonds of the mortgagor. I am perfectly clear that he ought not to be allowed in a court of equity, or in .any other court, to profit by any such barefaced jugglery as that disclosed by his own testimony, and, if the pleadings' are proper, or can be made so by amendment, he will be required to apply that money plus legal interest less necessary expenses to the liquidation of his claim. A decree may be settled in accordance with the foregoing.”

The pleadings upon which the case was heard did not contain any allegations relative to sale of the bonds and failure to credit the proceeds, which it is claimed was first disclosed to complainant at the hearing; but such conduct comes peculiarly within the field of equitable action for the protection of trust property, is connected with the transaction to which the pleadings relate, and could very properly have been included in the original bill if then known. The amendment which has been asked for can and should be granted.

On January 8, 1913, a final decree, dated as though signed May 21, 1912, was filed dismissing complainant’s bill with taxed costs, and added damages of $286.50 “occasioned by reason of the issuance of said injunction.” A petition for leave to amend complainant’s bill to include this bond matter, dated December 30, 1912, 'and noticed for hearing on January 6, 1913, was heard, and on February 17, 1913, denied, because of unreasonable delay; as was also a petition to set aside the decree, allow amendment of the bill, and grant a rehearing, which was filed January 19, 1913, after it was learned, as is claimed, that a decree had been signed and filed. We do not deem it necessary at this time to discuss the merits or demerits of the delay, over which the record is enlarged with correspondence, petitions, and affidavits. We cannot conclude, however, that complainant is entirely to blame, or altogether blameless. The trial judge and respective counsel resided in different parts of the State and away from the county where this case was heard. An apparent misunderstanding has arisen which cannot be allowed to cloud the merits of this case. Hurd should not be permitted to proceed with his levy for the full amount of his judgment without crediting thereon the $750 received from sale of the bonds, less the $10 already credited. Even though questionable delays may intervene, a court of equity in the final adjudication may not lend its aid to profiting by conduct which the trial court has, we think correctly, condemned in emphatic language as fraudulent.

Amendments as to matters germane to the case can be allowed at any time in chancery suits to conform with the proofs, protect the substantial, equitable rights of the parties, and secure the ends of justice— even in the appellate court. Morrison v. Mayer, 63 Mich. 238 (29 N. W. 698); Babcock v. Twist, 19 Mich. 516; Seymour v. Long Dock Co., 17 N. J. Eq. 169. The amendment proposed by complainant was germane to the controversy and should have been allowed in order to reach equitable and complete results. Complainant is entitled to a reduction of the execution to the amount realized by Hurd on sale of the collateral bonds, upon his own admissions.

On the major issues of the case as before referred to, and also other questions which we regard of minor importance, raised and argued by counsel in their briefs, which have been examined but, not reviewed at length, the conclusions reached by the trial court are affirmed.

The case will be transmitted to the court below with directions to set aside the decree previously entered, grant the amendment proposed, and enter a decree which will give complainant relief as to the $740, which should have been credited upon said execution. ' On the record as a whole, we conclude that the costs of both courts must go against complainant, excluding, however, the $286.50 which was added for damages occasioned by reason of the issuance of said injunction, which, under the circumstances shown, was not without justification.

McAlvay, C. J., and Brooke, Kuhn, Stone, Ostrander, Bird, and Moore, JJ., concurred,


text:
    PRESQUE ISLE SASH & DOOR CO. v. REICHEL.
    1. Chattel Mortgages — Mechanics’ Liens — Priority.
    A chattel mortgage lien existing before the right to a mechanic’s lien comes into existence, having been perfected, as the law requires, takes precedence over the mechanic’s lien; subsequent mortgages yield priority to the lien. 3 Comp. Laws, § 10718 (5 How. Stat. [2d Ed.] §13774).
    2. Mechanics’ Liens — Mortgages—Foreclosure—Effect.
    Foreclosure of a prior mortgage taken in good faith to secure a valid indebtedness and recorded before the work for which these liens are asserted was begun, eliminated, and the purchasers’ title took priority over, the lien of a mechanic.
    3. Same — Sales—Lien of Vendor.
    A seller of certain band saw machinery installed in a sawmill under a contract reserving title in himself did not thereby lose his right to file a mechanic’s Hen: nor was he required to assert his title by retaking the machinery.
    4. Same — Sales.
    And the vendor’s Hen, so reserved, took priority over mechanics’ Hens subsequently filed.
    5. Same — Chattel Mortgages — Conditional Sales.
    After foreclosure of the mortgage, the rights of the buyer in the band saw machinery passed to the purchasers at foreclosure sale: but their rights did not take precedence over the seller’s reserved title.
    Appeal from Marquette; Flannigan, J.
    Submitted November 18, 1913.
    (Docket No. 145.)
    Decided March 27, 1914.
    Bill by the Presque Isle Sash & Door Company against George Reichel and others for the enforcement of a mechanics’ lien. From a decree for a lien upon property claimed by intervening defendants, Theodore A. Schneider and Frank C. Brown, they appeal.
    Reversed.

      A. E. Miller and W. S. Hill, for appellants.

      Charles R. Brown and George P. Brown, for appellee.
   Steere, J.

This suit, originating with its one complainant and many defendants, has resolved itself into a controversy between defendants Schneider & Brown, appellants here, and the originally named defendants Gustafson, Hanmer, Hakanson, Haslitt, and Carter, who filed bills of intervention and claim liens, amongst other things, on a band mill owned by Schneider & Brown; the said five interveners being on this issue complainants and appellees. The original bill of complaint was filed by the Presque Isle Sash & Door Company, on August 10, 1911, to enforce its lien for certain material which went into a sawmill in which said band mill was later installed, but its claim and the interests of all other parties to the suit, except as above stated, have either been satisfied or abandoned.

A sawmill, which was the source of these and allied issues, was built in 1910 by defendants Reichel, as copartners under the name of Reichel Bros., on a site in the city of Marquette leased for 10 years from the Duluth, South Shore & Atlantic Railway Company. As originally planned and built it was equipped with a circular saw, being completed in October of that year. In December of the same year they executed to one Bice, as trustee, a mortgage upon said mill, including the lease and machinery, giving a detailed list of said machinery and equipment then installed in the mill, to secure various parties who had become indorsers for them during the erection of the mill. The mortgage also covered “all machinery, tools and equipment that shall hereafter, so long as the notes hereby secured remain unpaid, be added to or placed in said sawmill building for use in connection therewith.” This mortgage was recorded in the office of the register of deeds for Marquette county and filed in the office of the recorder of the city of Marquette, in which the mill was located.

The following spring Reichel Bros, made a sawing contract with one Roland H. Jenney to saw a large quantity of logs which he owned and which he desired to be manufactured by a band saw, instead of the circular saw which they had installed in their mill. To that end, on May 12, 1911, a written contract was entered into between the parties, with various recitals of what each desired and proposed, stating that, the mill being equipped with a circular saw, it was intended to install a band saw equipment by which Jenney’s logs would be sawed. The material provisions of this lengthy contract, briefly stated, are as follows: Jenney agreed to purchase for use in said mill “a band mill and equipment consisting of one Garland make 8-foot band mill with late type guides,” describing its parts and appurtenances in detail and at length “for $1,500, as per certain proposals from Meister & Son,” and Reichel Bros, agreed to pay the freight on the same from Bay City and at their own expense install it in running order in their mill, the ownership thereof, and title to the same, to remain Jenney’s until it was fully paid for according to the terms of their agreement, they agreeing to purchase it of Jenney for $500 and the insurance which he had paid thereon, and pay the same during the first two months regardless of the condition of the mill. The contract further provided that “none of the machinery herein mentioned shall become a part of the real estate.” Jenney was to deliver the logs at the mill, and Reichel Bros, were to saw them with the band saw, piling the lumber as directed by Jenney. A scaler was to be mutually agreed upon, and payment was to be made at a stated price per thousand on lumber which had been piled 90 days. Accurate books were to be kept showing all men employed in and around the mill and expenses incurred in sawing said logs, with a statement of which Jenney was to be furnished weekly. He was to make advancements to pay wages of employees, and had authority, if he deemed it necessary to protect his property from labor liens, to pay the employees, the amount so paid to be charged to Reichel Bros, and treated as payments on their sawing contract. They were to install the band saw with its equipment and have it in running order on or before June 5, 1911, and thereafter run the same continuously until the logs were sawed. In case Jenney advanced any other sums to them under said contract he. was to retain the same out of any sums coming due to them. They agreed to at all times keep the property which belonged to Jenney free of all liens and claims of liens of every kind, and in the event liens were placed upon the property of Jenney he was authorized to forthwith take possession of the mill and operate it till the completion of the contract.

The band mill was purchased by Jenney and installed by Reichel Bros, as agreed, and at the time of the trial of this suit in the court below it remained in the mill as a substitute for and in place of the original circular sawmill equipment installed in the year 1910.

Reichel Bros, sawed but a portion of the logs and made default in the contract, failing to pay any portion of the purchase price of the band mill, and various liens were filed, but Jenney did not take possession nor operate the mill as he was authorized to do. He is shown, however, to have been frequently at the mill while the changes were being made and the work in relation to his contract going on, and to have had knowledge of what was being done in reference to it, urging from time to time that it be expedited.

The notes secured by the chattel mortgage given by Reichel Bros, having become due, said mortgage was regularly foreclosed, on October 12, 1911, and the property it covered bid in by Bice, trustee. At the time of the sale, public notice was given that statements of lien (including those, of the intervening complainants here) were then on file in the office of the register of deeds of Marquette county against the property about to be sold, that the mortgagees had no personal knowledge of said claims beyond what was shown by the records, and sale of the property under the mortgage foreclosure would be made subject to all valid liens. The notice of sale stated also that the foreclosure was of all 'right, title, and interest of Reichel Bros, to the Garland band mill, describing it and its appurtenances, subject however, to the rights of Roland H. Jenney, according to said agreement of May 12, 1911, between said Jenney and Reichel Bros.

On October 23, 1911, Bice, trustee, sold to defendants Schneider & Brown the property which he had purchased at the foreclosure sale, describing the same, “subject, however, to all rights of Roland H. Jenney in and to a certain 8-foot band mill and its appurtenances,” owned by him, but which had been placed in said sawmill after execution of the chattel mortgage under an agreement between him and Reichel Bros., and subject to all liens of every kind against said property or any part thereof. Thereby they became the owners of all the rights and equities of said Bice as acquired by his mortgage foreclosure from Reichel Bros.

Jenney did not repossess himself of the band mill nor take any steps to forfeit the contract for its sale to Reichel Bros. He was originally made a party to this suit, but, after entering his appearance, was defaulted, and died during its pendency. The suit was thereafter dismissed by stipulation as to his estate, without prejudice to the rights of the remaining parties to the suit. After his death his estate was administered, his widow being appointed administratrix,- and on June 22, 1918, Schneider & Brown, who had acquired all Reichel Bros.’ former rights in the sawmill, obtained by bill of sale from Sarah Jenney, administratrix of the estate of Roland H. Jenney, for a stated consideration of $260.59, all interest of his estate in the band mill and its appurtenances. Said bill of sale contained an assignment of a $1,000 fire insurance policy on said property and a warranty of title. Of this transaction Brown testifies as follows:

“Q. Will you please state what the actual deal was?
“A. We had moneys due us from R. H. Jenney’s estate which made up the, balance of the purchase price as agreed upon in the contract.
“Q. Was that indebtedness under a contract which you had made with Mr. Jenney, or his estate?
“A. It was verbally agreed between ourselves • and Mr. Jenney that he was to allow us credit for whatever moneys we left with him that would be due us.
“Q. What was the total amount you agreed' upon as the selling price of this band saw?
“A. The exact amount is stated in the contract. So far as the cash is concerned it was $260.59, and in addition $125, which Mr. Jenney claimed was due him for freight and which should have been paid by Reichel Bros.
“Q. You paid a total of $625?
“A. Yes, sir.
“Q. Did you agree with Mrs. Jenney upon the price of the band mill?
“A. No, sir, we agreed with Mr. Jenney.
“Q. You agreed with Mr. Jenney?
“A. Yes, sir.
“Q. And what was that agreement?
“A. To accept the price he made with Reichels.
“Q. You were to pay the same price that Reichel Bros, was to have paid him?
“A. Yes, sir.
“Q. That was $500, was it not?
“A. Yes.”

The liens of the five appellees sought to be enforced by bills of intervention are in statutory form. They describe the leased land on which the mill was located, and state they are for labor performed under contract with Reichel Bros, in "building, constructing, and erecting a certain building and structure known as a sawmill, with its appurtenances,” etc. The band mill was not named, nor any distinct claim made as to any specially designated appurtenances. Said liens varied only as to time and amount. Hakenson’s was for labor performed between the 18th of May and 31st of August, 1911, lien filed September 5, 1911; Haslitt’s for labor performed between May 16 and August 26, 1911, lien filed September 5, 191Í; Gustafson’s for labor performed between May 22 and June 10, 1911, lien filed July 26, 1911; Carter’s for labor performed between May 8 and August 22, 1911, lien filed September 5, 1911. In each case it is said, "for which amount your orators claim a lien on said structure, the machinery, and the appurtenances thereof,” thus asserting their liens were upon property owned by Reichel Bros, and for labor performed under contracts with them, without reference to any other ownership, contract, or particular machinery, or to Jenney’s connection with it.

The bills of intervention also describe the property in general terms, designating no particular piece of machinery or part of the mill, and prayed "that all and singular said premises with the appurtenances may be sold by the order and decree and under the direction of this court,” etc. The trial court found that all liens, including those of appellees, based on the ownership and property rights of Reichel Bros. were cut off and barred by foreclosure of the chattel mortgage, but held that appellees’ liens had attached to and could be enforced against the interest or title which Jenney had reserved in the band mill by reason of their having helped to install the same, and so decreed.

It is appellants’ chief contention that Jenney was not the owner, did not have or claim to have any interest in the land, by lease or otherwise, or in the improvements made; that no contractual relations, direct or indirect, existed between him and appellees; that they performed no labor of any kind for him or his property interest, and did no work upon the band mill to improve or increase its value to him by building, altering, improving, repairing, erecting, or ornamenting it, their only work being to connect and install it in Reichel Bros.’ sawmill for Reichel Bros.’ use and benefit, and therefore can claim no- lien against Jenney or his property; and also that the decree has no support in the facts proven, nor foundation in any statements of lien or bills of intervention to foreclose a lien against Jenney’s property. Appellants also claim that all work of installing the band mill was completed on July 6th, and the statements of lien, which also include other work of an entirely different character done before and after that time, were filed too late to maintain them against that particular property. This was a question of fact in the case which we do not deem it necessary to pass upon.

For appellees it is said their claim of lien is both upon the leasehold interest and the structure, with its appurtenances erected by the lienors; that Jenney was the moving party in procuring installation of the band mill and had “an immediate, beneficial interest in the improvement” into which his property was going, and consented to the same, rendering his title interest also liable, and therefore he and those claiming under him are estopped from setting up his title to defeat a mechanic’s lien for work upon his property; and that the foreclosure of Bice’s mortgage did not operate to defeat the interveners' liens for labor performed prior to the mortgage foreclosure. It is to be observed the latter contention is not in harmony with the views of the trial court by which it was found that, so far as Reichel Bros.’ interests were concerned, all liens for labor performed after recording said mortgage were barred by the foreclosure, thereby operating to defeat the claims of others who had filed liens and have not appealed, but sustaining appellees’ liens on the theory that they were good as to Jenney’s retained interest in the band mill, which was not covered by the mortgage and so not cut off by its foreclosure.

Upon the question of the effect of the mortgage foreclosure it is stated as a general rule that—

“All mortgage liens existing before the right to a mechanic’s lien comes into existence — having been perfected as the law requires — are prior to the mechanic’s lien and mortgages subsequent thereto yield priority to the lien of a mechanic. * * * The fact that the value of the mortgage security has been enhanced by the labor or material of a mechanic will not affect the priority of the mortgage.” Rockel on Mechanics’ Liens, § 155.

See, also, Phillips on Mechanics’ Liens, §§ 232-237; Boisot on Mechanics’ Liens, § 144.

In harmony with this general rule, section 9, subdivisión 4, of our mechanics’ lien law (3 Comp. Laws, § 10718), provides:

“The liens for such labor or materials furnished, including those for additions, repairs and betterments, shall attach to the buildings, machinery, erection, structure, or improvement for which they are furnished or done, subject to any prior recorded title, claim, lien, incumbrance, or mortgage to or upon the land upon which, such building or buildings, machinery, erection, structure or improvement belongs or is put. Any person holding a lien for such labor or materials furnished upon any premises subject to any prior recorded lien, incumbrance or mortgage may pay off any such prior lien, incumbrance or mortgage, and shall thereupon be subrogated to all the rights of the prior holder of such lien, incumbrance or mortgage.”

We think the trial court rightly held that the prior mortgage, given and taken in good faith to secure a valid indebtedness and recorded before the work for which these liens are asserted was begun, had priority over, and its foreclosure eliminated, said liens. But we are unable to accept the conclusions of the court that appellees had a lien on the band mill because Jenney, not having received his pay, had retained title as security for his unpaid debt.

Jenney had no ownership or property interest in the sawmill upon which the liens were filed, beyond security for what was owing him by the owners to whom he had sold this piece of machinery to equip it. The band mill was but one of the numerous pieces of machinery ■ and parts of the sawmill in its entirety. His only interest was to have his logs sawed, and by a band saw, to which end he sold the owners a band mill to put in the sawmill, “for use in connection therewith,” at an advantageous price to them. It was no less a contract of bargain and sale because he secured himself by reserving title and the right to retake possession. They installed it in their mill with their own labor. He, like appellees, was a creditor of. the owners of the mill in having helped to erect and equip it. He furnished material, they labor. Their labor in no way changed or improved the band mill, as such; if anything they deteriorated its value, except for use in that particular sawmill, which he did not own. He could have filed a claim of lien as well as they. His retention of title did not change his status in that particular. Peninsular General Electric Co. v. Norris, 100 Mich. 496 (59 N. W. 151); Hooven, Owens & Rentschler Co. v. Featherstone, 111 Fed. 81, 49 C. C. A. 229; Clark v. Moore, 64 Ill. 279; Case Manfg. Co. v. Smith (C. C.), 40 Fed. 339. In the latter case it is said:

“Retaining title as a means of securing payment on the part of defendants did not impose upon complainant any duty or obligation to assert such title by resuming possession of the machinery. Complainant could still look to defendants personally for the payment of the purchase price of the machinery, and to any and all other remedies conferred by law to enforce its payment.”

During all the various proceedings following Reichel Bros.’ default in carrying out their contract with Jenney, and failure to pay their indebtedness secured by the chattel mortgage, and up to the time of hearing this suit, the band saw remained installed in the sawmill undisturbed, connected and ready for operation as an equipment and integral part of said sawmill, considered as an entirety for sawmill purposes, the title however remaining in Jenney, but subject to the rights of Reichel Bros, under their contract of purchase with him. While he might, by reason of their default in payment of the purchase price, have declared the contract forfeited, retaken the band mill and removed it as personal property and resold it, he could also allow it to remain, and bring an action against the vendees for the purchase price, and, as against them, assert a lien on the entire mill for what they were owing him. He did nothing in relation to it, so far as shown, until after Schneider & Brown bought the sawmill and all former rights of Reichel Bros, in that connection from Bice, who held title under the foreclosure, and then orally ratified the contract of sale of the band mill, which he had never revoked, at the same price to Schneider & Brown, which was later, after Jenney’s death, consummated by his executrix, Mrs. Jenney, they paying her therefor and receiving from her a bill of sale.

At the time appellees were performing the work of installing, or erecting, the band mill in the sawmill for Reichel Bros., the latter had possession of it, a contract for its purchase, and tentatively were its owners, subject only to those rights being defeated by Jenney declaring their contract forfeited for nonpayment, asserting his title, and taking possession of it. Whatever rights they had were subject to the mortgage and went to the purchaser on foreclosure.

So far as the record discloses, Jenney’s only claim in relation to this band mill after he sold it to Reichel Bros, was for the purchase price which they owed him. Their right to consummate the purchase by payment passed, through the mortgage foreclosure, to Schneider & Brown. Both Jenney and appellees were creditors to Reichel Bros., he for machinery and they for labor — both of which went into the building in question. He had a prior lien by contract on what he furnished; they subsequently filed a statutory lien which they claim covered the property he had furnished and had not received his pay for. We are asked to hold, in effect, that their statutory liens for labor, later filed, take priority over his previous vendor’s lien by contract, and, in result, operate as an assignment to them of his claim for the purchase price of an article sold to their common debtor, because they, while in the employment of said debtor, helped to install the article in the debtor’s building with his knowledge. We cannot conclude that the statute goes to that extent.

If the doctrine of estoppel applies at all in these proceedings it could only estop Jenney from asserting his title to the property and repossessing himself of it in denial of its having become a permanent appurtenance of the sawmill; in which event it would be covered by the mortgage to Bice and pass on foreclosure with other appurtenances of the structure.

For the foregoing reasons we are constrained to conclude that the decree declaring a lien on said band mill must be reversed with costs, and a decree entered in this court dismissing said bills of intervention as to appellants.

McAlvay, C. J., and Brooke, Kuhn, Stone, Ostrander, Bird, and Moore, JJ., concurred.