text:
    McDONALD v. SMITH.
    1. Fraud — Pleading—Declaration—Waiver.
    That a declaration for fraud does not expressly charge that the alleged false representations induced plaintiff to part with his property is not available after plea of the general issue, where there is a sufficient charge by inference.
    2. Same — Expression of Opinion — Actionable Deceit.
    A representation that a worthless medicine, in the manufac- - ture of which plaintiff was induced to invest, is a sure cure for a certain malady, is not a mere expression of opinion, but is a misrepresentation of fact, and is actionable.
    3. Same — Sufficiency of Evidence.
    In an action for fraudulent conspiracy, whereby plaintiff was induced to invest in the manufacture of a worthless medicine, evidence examined and held, to justify a finding that plaintiff in error was a party to the conspiracy.
    4. Same — Statute of Frauds.
    \Vhere a corporation, in the worthless stock of which plaintiff was induced to invest, was only an instrument in the scheme of fraud by which defendants obtained plaintiff’s property, the statute (§ 9518, 3 Comp. Laws) requiring representations “made concerning, etc., any other person * * * to be made in writing,” has no application.
    5. Same — Action—Evidence—Objections.
    An objection that certain acts of misconduct shown have no relation to the fraud complained of, must be made on the ground of relevancy, and not on the ground that they are not averred in the declaration.
    6. Same — Evidence—Admissibility Under Pleading.
    Specific acts of misconduct relevant to prove a charge of fraud may be shown, though not averred in the declaration. Plaintiff is not required to plead his evidence.
    7. Same — Unperformed Promises.
    Plaintiff may show that as a part of the fraudulent scheme complained of defendants made him certain promises and failed to perform them, though the promises were void as against public policy.

      8. Same — Instructions.
    A charge that the jury may consider a promise and its nonperformance as evidence in the case is not equivalent to charging that the breach of the promise, standing alone, is evidence of the fraud forming the basis of the action.
    9. Same — Necessity of Request. ■
    Where evidence of a promise and of its nonperformance is admitted on the issue of fraud, defendant, if he wishes a charge that the promise and nonperformance are not of themselves evidence of the fraud, should prefer an appropriate request.
    10. Same — Admission of Evidence — Harmless Error.'
    The admission of evidence of declarations respecting past transactions made by other parties to an alleged conspiracy is harmless to defendant, who shows the same matters by his own testimony.
    11. Evidence — Matter of Record — Proof by Parol.
    Parol evidence is inadmissible to prove the transfer of an interest in land.
    12. Same — Prejudicial Effect.
    Parol evidence of a transfer of land is not prejudicial, where the deed is subsequently put in evidence.
    13. Fraud — Inducing Conveyance of Property — Person Entitled to Recover.
    A party may recover damages for fraud inducing a conveyance of property, although • the property conveyed stood in. the name of, and was conveyed by, another, where such conveyance was made on behalf of the defrauded party.
    14. Same — Declaration—Sufficiency.
    An objection that the property alleged to have been conveyed by plaintiff, as a result of an alleged fraudulent conspiracy, is not specifically described in the declaration, must be taken by special demurrer, it being described generally as a house and lot in a certain city.
    15. Depositions — Use by Adversary.
    A party may use depositions taken by his adversary. Circuit Court Rule 41 a.

    16. Same — Theory of Admissibility — Harmless Error.
    Permitting a party to read depositions taken by his adversary, on the theory that they constitute his own cross-examination of the adversary’s witness, instead of evidence offered by himself, is not ground for reversal, where there is nothing in the depositions which would not be admissible if the party offered them as his own evidence
    17. Witnesses — Contradiction.
    A party may maintain the truthfulness of his own testimony although it is contradictory to the testimony of his witnesses.
    18. Appeal and Error — Record — Necessity op Showing Error.
    Where a party reads from the depositions of his adversary, his failure to read the direct examination of the witnesses cannot be held prejudicial on error, where the direct examination is not shown by the record.
    19. Depositions — Use by Adversary — Omissions.
    Where a party reads the cross-examination of witnesses from depositions taken by his adversary, the latter, if he wishes their direct examination read, should read it himself.
    20. Conspiracy — Fraud—Liability.
    Persons who conspire to perpetrate a fraud are responsible for false representations made in furtherance of that scheme, although not expressly authorized by all the conspirators.
    21. Evidence — Harmless Error.
    The improper admission of a note in evidence is harmless where no recovery is allowed on it.
    22. Instructions — Issues—Incorrect Statement.
    Error in respect to nones^ential matters in stating plaintiff’s claims is not available to defendant on error, where he did not direct the court’s attention to the misstatement at the time, and before the case was submitted to the jury.
    .23. Fraud — Expression op Opinion — Actionable Deceit.
    An offer to buy stock, accompanied by the statement that the party had investigated it enough to know that he wanted some of it, by which it was falsely implied that the party knew facts making the stock valuable, was more than a mere expression of opinion, and was actionable.
    24. Same — Misrepresentations—Inducement.
    A fraudulent misrepresentation inducing plaintiff to invest in more stock of a corporation is actionable, though he had previously invested therein.
    25. Same — Definition—Instructions.
    A charge on the issue of fraud that a statement must be intended to deceive, calculated to deceive, and must actually deceive, sufficiently charges that it must be material.

      26. Instructions — Correct in Substance — Reversal.
    The court will not reverse a case because of error in the charge arising from a technical omission in a definition substantially correct.
    27. Same — Weight of Evidence — Failure to Testify.
    A charge that the jury should give such weight as they saw fit to defendant’s failure to take the stand, while not strictly accurate, was held not to be erroneous when considered with a part of the charge, immediately following, which placed on plaintiff the burden of establishing his claim by a fair preponderance of evidence.
    28. Appeal and Error — Affirmance on Condition — Remittitur —Damages Improperly Allowed.
    In an action for fraud, a judgment for plaintiff, which, while otherwise correct, improperly included damages for a conveyance which was established by incompetent evidence, was affirmed on condition of a remittitur of the value of the property claimed to have been conveyed.
    Error to Hillsdale; Chester, J.
    Submitted January 12, 1905.
    (Docket No. 47.)
    Decided February 28, 1905.
    Case by John P. McDonald against George N. Smith, Albert B. Cummins, and Darius W. Gunn for fraud. There was judgment for plaintiff, and defendant Smith brings error.
    Affirmed conditionally.

      F. M. Hall and F. A. Lyon (Dallas Boudeman, of counsel), for appellant.

      Franhhauser & Cornell ( Grant Fellows, of counsel), for appellee.
   Carpenter, J.

Plaintiff brings this suit to recover damages resulting from an alleged fraud perpetrated by defendants. It is plaintiff’s claim that he was the victim of a fraudulent conspiracy planned and executed by defendants and their confederates. This scheme of fraud, which plaintiff claims is established by the testimony, may be briefly described as follows:

A corporation was formed, called the “ B-T Company,” whose sole property consisted of a formula for the manufacture of a worthless medicine called the “ Hog Cholera Medicine.” Partly by false representations, and partly by promises which were never intended to be, and which were not, performed, defendants and their confederates induced plaintiff to believe that said worthless medicine was a sure cure for the disease known as “ hog cholera,” and to invest ■from time to time in the stock of said company money and property of the aggregate value of $7,300. Said money and property did not go to the corporation — whose organization was merely a step in the scheme of fraud — but went directly to defendants or to their confederates. The liability of defendant Smith is asserted, not on the ground that he himself defrauded plaintiff, but on the ground that he was a party to a fraud perpetrated by his codefendants and their confederates. The evidence that those codefendants and their confederates conspired to defraud plaintiff is very convincing, and there is evidence that Smith was on terms of familiar intimacy with them at the time they were most active in perpetrating the fraud. It also appears that certain stock in the Hillsdale Manufacturing Company, which was the first property fraudulently obtained from plaintiff, passed almost immediately to the ownership of defendant Smith. Smith contends that he paid full value for this stock. He paid for it in part by a transfer of land in which he had a mortgage interest subject to redemption. If we value this property — and we must so value it — at what was unpaid on the mortgage, Smith paid for the stock only two-thirds of its value. We are therefore bound to say that defendant Smith acquired this stock for two-thirds of- its value. Later, when plaintiff was contemplating his last investment in the worthless stock, defendant Smith told him that he had investigated the matter, and would buy his stock at 150 per cent, of its par value. It is impossible to believe that this offer — which plaintiff could not accept because of an arrangement he had made with defendant Cummins — was made in good faith. Still later, defendant Smith, as plaintiff’s testimony tends to prove, purchased, for less than its value, a note given by-plaintiff and his mother to secure payment of part of an obligation arising from the last fraudulent transaction. (This note is involved in the succeeding suit, and the particulars relative to its execution will there be more fully explained.) On this issue plaintiff obtained in the lower court a verdict and judgment against all the defendants. We are asked to review that judgment upon a writ of error taken out by defendant Smith. He makes numerous complaints, which, so far as needful, will be stated and discussed in this opinion.

1. It is contended that the declaration, notwithstanding the fact that defendant has pleaded the general issue, was insufficient to justify the introduction of any testimony. Defendant’s principal objection to the declaration — and his other objections are of like character — is that it contains no averment that the alleged false representations induced plaintiff to part with his property. The declaration, which consists of 56 printed pages, does, however, clearly state a cause of action. If the averment in question is not charged in precise language, it is charged by inference. We therefore hold that defendant should have raised this objection —and this is true of the remainder of his objections to the declaration — by special demurrer, and that it cannot be considered after he pleaded the general issue. See Briggs v. Milburn, 40 Mich. 512; Aldrich v. Chubb, 35 Mich. 359; Sutton v. Van Akin, 51 Mich. 465.

2. Appellant claims that a verdict should have been directed in his favor. We dispose of these claims by saying:

(a) It cannot be said that all the alleged false representations were expressions- of opinion and therefore not actionable. Some of them, particularly the representation that the worthless medicine was a sure cure for hog cholera, were, under our decisions, misrepresentations of fact and actionable. See Nowlin v. Snow, 40 Mich. 699; Totten v. Burhans, 91 Mich. 495; Stoney Creek Woolen Co. v. Smalley, 111 Mich. 321.

(6) The evidence justified the jury in finding that defendant Smith was a party to the fraudulent conspiracy.

(c) As the evidence in this case justified the inference that the corporation whose worthless stock plaintiff acquired was only an instrument in the scheme of fraud by which defendants and their confederates obtained plaintiff’s. property for their own exclusive use, the statute (section 9518, 3 Comp. Laws) requiring representations “made,concerning, etc., any other person * * * be made in writing,” has no application. See Bush v. Sprague, 51 Mich. 41.

3. It is contended that the court erred in many particulars in admitting testimony offered by plaintiff.

(a) Complaint is made because the court permitted plaintiff to prove various acts of misconduct on the part of defendant not charged in the declaration. Plaintiff did not claim that any of these acts, which were not averred constituted — and none of them did constitute — a cause of action. It is 'possible that some of these acts had no relation to the fraud complained of. If so, evidence to prove such facts should have been objected to on the ground of irrelevancy. That objection is not raised by defendant’s complaint that they are not averred in the declaration, nor by any other complaint in defendant’s brief. Assuming those acts of misconduct to be, as most of them were, relevant evidence to prove the charge of fraud, the complaint under consideration -is answered by the elementary rule that the plaintiff should not state in his declaration evidence which he intends to offer in support of its averments.

(b) Plaintiff was permitted to prove that, in connection with the other fraudulent representations, defendants promised him that he should be secretary and treasurer of the newly-formed corporation, and receive therefor a salary of $1,200 per year. Complaint is made because plaintiff was permitted to prove that this promise was not in fact performed. In support' of this complaint defendant relies upon Hubbard v. Long, 105 Mich. 442. In that case plaintiff charged that defendant had fraudulently induced him to purchase stock in a bona fide and operating corporation. He was promised a position in this corporation at a salary of $25 per week. He was permitted to prove the breach of this promise, and what he had been earning before he purchased his stock. This court held it was error to permit this testimony to be introduced, on the ground that a breach of promise “is not of itself either fraud or the evidence of fraud. ” That decision does not apply in a case like that at bar, where a fraud has been accomplished, in part by false representations and in part by false promises. In such a case the promises must be admitted in evidence, because they are inseparably connected with the representations of fact. After a defrauded party has proved those promises, he is the victim of a legal snare, if denied the right to prove that they were never performed. Such a denial would compel the jury to act upon the assumption that the promises were performed, and thus defeat plaintiff in his justifiable attempt to obtain redress.

In this connection we should not overlook the contention of defendant, sustained by authority (see 1 Cook, Stock, Stockh. & Corp. Law [3d Ed. ], § 622) and upheld by the trial court, that the promise to employ plaintiff was contrary to public policy, and therefore void. If this contention is sound, the promise to employ plaintiff was a nullity, and for that reason could not be the basis of an action; but it was none the less inseparably connected with the false representations of fact, and, under the foregoing reasoning in this opinion, was admissible in evidence. If plaintiff proved such a promise, he had a right, under our reasoning, to show that it was not performed. For, although the promise was unenforceable, the jury might infer that defendant performed it, and plaintiff had a right to rebut this inference.

At this point we should notice defendant’s complaint that the trial judge charged the jury that the breach of this contract could be used as evidence of fraud. What the trial court charged was this: “You may consider this [referring to the promise and its nonperformance] evidence in this case.” Surely this was not equivalent to saying that the breach of the contract, standing alone, was evidence of fraud. Had^,defendant wished to raise that question, he should have preferred some appropriate request. Our attention is called to no such request.

(c) Complaint is made because plaintiff was permitted to prove declarations respecting past transactions made by other parties to the alleged conspiracy. These declarations related to defendant Smith’s acquisition of the stock in the Hillsdale Manufacturing Company. We are bound to say that their admission, if erroneous, was not prejudicial, because the declarations merely tended to prove facts which we must regard as established by defendant’s own testimony.

(d) In support of his claim that he was fraudulently deprived of certain property, plaintiff was permitted to give oral testimony, against defendant’s objection, of the conveyance of a house and lot in Hillsdale valued at $2,100, a land contract covering land in Benzie county valued at $440, and of a peach farm valued at $150. Defendant is right in saying that these transfers could not be proved by oral testimony. See Thompson v. Richards, 14 Mich. 172. The testimony showing the transfer of the Hillsdale property was not prejudicial, because a deed conveying it was subsequently put in evidence. We find, however, no written evidence in the record of the transfer of the land contract or of the peach farm. Their values constituted a part of the damages claimed and awarded. We are, therefore, compelled to say that the oral evidence to prove their transfer, viz., the transfer of the land contract and peach farm, was not only erroneously admitted, but, as hereafter pointed out, requires the reversal of the judgment, unless plaintiff remits therefrom the amount of those items and the interest thereon.

The Hillsdale house and lot stood in the name of and was conveyed by plaintiff’s sister. Two objections are urged to the admission of this conveyance in evidence:

First. That, as the property did not belong to plaintiff, no damage resulted to him from its loss. This objection was answered in Sudworth v. Morton, 137 Mich. 575, where this court said of a similar objection: The money was paid for the plaintiff, and between him and the defendants, it was his money that they received.”

Second. It is objected that this property was not particularly described in the declaration. We answer this by saying it was there described in general language as a house and lot situated in the city of Hillsdale, and, if defendant had desired to have a more specific description, he should have specially demurred to the declaration. See Fuller v. City of Jackson, 82 Mich. 481.

(e) Plaintiff was permitted, against objection, to read on the trial his cross-examination of two witnesses whose depositions had been taken by defendants. Though these depositions had been taken by defendants, Circuit Court Rule 41a gave plaintiff a right to read them. See Fountain v. Ware, 56 Ala. 558; Hatch v. Brown, 63 Me. 410; Juneau Bank v. McSpedon, 15 Wis. 629; Morrison v. Insurance Co., 59 Wis. 162; Converse v. Meyer, 14 Neb. 190; Calhoun v. Hays, 8 Watts & S. (Pa.) 127.

Appellant complains because the trial court decided that plaintiff had a right to read this testimony, on the theory that it was his cross-examination of witnesses produced by defendants. He contends that this theory was unsound, and asserts that plaintiff was bound to use these depositions as evidence offered by himself, and authorities are cited which sustain this contention. See Fountain v. Ware; Hatch v. Brown, supra. If this contention is sound, it discloses error in the views of the trial court; but that does not justify a reversal of the judgment, unless it led to some result prejudicial to defendants. See Polhemus v. Ann Arbor Savings Bank, 27 Mich. 44. Defendant’s brief points out nothing in the testimony read by plaintiff which would not have been admissible if he had offered it as his own evidence. Our own examination of such testimony discovers nothing not so admissible. The most questionable part of this testimony was a letter written by one of the witnesses to plaintiff, in which the writer admits the worthlessness of the hog cholera medicine. We think it was necessary, and therefore proper, to read this letter, to enable the jury to understand the material testimony of said witness with which said letter was inseparably connected.

It is true that plaintiff was permitted to maintain the. truthfulness of his own testimony notwithstanding the fact that it was contradicted by the testimony read from these depositions. Defendants cannot complain of this, for plaintiff would have had the same right if he had offered this testimony himself.

It is also true that plaintiff did not read from the depositions the direct examination of the witnesses. As that direct examination is not shown by the record, we cannot say that this omission was injurious to defendants. It may also be said that defendants should themselves have read this direct examination if it was to their interest to have it read. See Morrison v. Insurance Co.; Converse v. Meyer, supra. We conclude, therefore, that no injury resulted to defendants from the reading of these depositions.

4. Refusal of Defendant’s Requests. Defendant in his brief contends that the court erred in refusing his requests to charge. Several of those requests asked the court to direct a verdict for defendant. It follows, from the former part of our opinion, that these were properly refused. One of these requests asserts that defendants were not responsible for false representations, unless made “by authority of all the defendants.” If defendants conspired to perpetrate a fraud on plaintiff — and the jury had a right to find that they did — they would be responsible for false representations made in furtherance of that scheme, though not expressly “authorized by all the defendants,” and therefore this request was properly denied. See Gumberg v. Treusch, 103 Mich., at page 554; Hamilton v. Smith, 39 Mich., at page 231.

Other requests sought to point out variances between the allegations of the declaration and plaintiff’s proofs. One of these alleged variances related to the note involved in the next suit, and this is sufficiently answered by saying that plaintiff was not permitted to recover for said note. It is sufficient to say of the other objections of variance that defendant points out no substantial difference between the allegations in the declaration and plaintiff’s proofs. We conclude that there was no error in the refusal of defendant’s requests to charge.

5. Charge of the Court. Defendant charges that the trial court did not correctly state plaintiff’s claim to the jury. The errors of statement pointed out in defendant’s brief relate to matters not of the essence of plaintiff’s claim. His complaint may be answered by quoting from a former opinion of this court:

“If the statement of the court was incorrect, it was counsel’s duty then and there, before the case was finally submitted to the jury, to direct* the attention of the court to the fact. Not having done so, it must be presumed that the court was correct, and counsel cannot now be permitted to contend otherwise.” Wood v. Wells, 103 Mich., at page 323.

The court charged the jury, in effect, that fraud might be predicated upon defendant Smith’s proposition to buy plaintiff’s stock, accompanied by his statement that ‘ ‘ he had investigated it enough to know that he wanted some of it. ” Defendant contends that this representation was a mere expression of opinion, and therefore not actionable. The rule that expressions of opinion do not constitute actionable fraud (Myers v. Building Ass’n, 117 Mich. 389; Chafey v. Mathews, 104 Mich. 103 [27 L. R. A. 558]), which is a rule subject to exceptions (see French v. Ryan, 104 Mich. 625), “is applicable only when the opinion stands by itself as a distinct thing.” See People v. Peckens, 153 N. Y. 593. And it has been said by an eminent jurist:

“It is material to'observe that it is often fallaciously assumed that a statement of opinion cannot involve the statement of a fact. * * * If the facts are not equally-known to both sides, then a statement of opinion by the one who knows the facts best involves very often a statement of a material fact, for he impliedly states that he knows facts which justify his opinion.” Lord Bowen, in Smith v. Land and House Property Corp., L. R. 28 Ch. Div. 15.

The statement of defendant under consideration is something more than a mere expression of opinion. His statement, coupled with his offer to buy, falsely implied that defendant knew facts which proved the stock to be valuable. The foregoing authorities and sound principle justify our holding such a representation actionable. What defendant said was equivalent to the false statement that he had knowledge of facts which proved said stock to be worth more than par. Had he made that false statement, his liability would be clear. If we hold that he is not liable because he conveyed this thought in guarded language, we point out a way by which unscrupulous men may accomplish fraud without responsibility.

It is also contended that the charge of the court under consideration was erroneous because defendant’s representation and offer to purchase the stock worked no prejudice to plaintiff, as he had made his investments before this offer was made. It is true that he had before that time invested in the stock, but after that he made another investment, and it is to be presumed that the court, in saying that fraud might be predicated on this conduct of defendant Smith’s, referred to the subsequent investment.

In charging the jury, the court defined fraud “as a false statement or statements made for the purpose of inducing another to part with money or other valuable things, which statements are calculated to influence the person to whom they are made, and which statements do actually deceive the person to whom they are made, and thereby induce him to part with money or other valuable things.” Defendant contends that this definition is faulty because it omits to state that the representation must be material and relate to a fact, either present or past. By instructing the jury that the statement must be intended to deceive, calculated to deceive, and must actually deceive, the court sufficiently informed them that it must be material. Nor js it true, as we have just shown, that fraudulent statements must always relate to facts, and, if it were, we would not reverse the case because of such a technical omission in a definition which is substantially correct.

Complaint is made because the court charged the jury:

“ The defendant Gunn has been'represented by counsel, and was present in court the first day of this trial, and has since been absent. The defendant Smith has been in court during the trial, but has seen fit to decline to take the stand, and I charge you, gentlemen, that the unexplained failure of Gunn and Smith to take the stand and give evidence here may be given by you such weight as you see fit. And it is a legitimate fact for you to consider in determining the merits of this case.”

It was not strictly accurate to tell the jury to give “ such weight as you see fit ” to the failure of defendants to take the stand. If this expression stood alone, it might lead the jury to the erroneous belief that they might infer from defendants’ silence some essential fact which they could not infer from the testimony. But taking this language in connection with that part of the charge immediately following, which placed the burden upon the plaintiff of establishing “the claim which he asserts by a fair preponderance of the evidence,” we think the jury would understand that they could consider defendants’ failure to give testimony only in drawing inferences from and in weighing plaintiff’s testimony. So understood, the charge was not erroneous. In Mooney v. Davis, 75 Mich. 188, defendant, though in court during trial, saw fit to offer no testimony. It was held that it was not error for the court to charge the jury that defendant’s silence “ may be considered by you as to one of the facts in this case as to whether the position of the plaintiff is in accordance with the facts.”

No other complaint in appellant’s brief demands consideration. We conclude, therefore, that if plaintiff chooses to remit from his judgment $590, the aggregate values of the land contract and peach farm, together with interest thereon, the judgment should be affirmed; otherwise, it should be reversed. In either event, appellant is entitled to costs.

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


source: Caselaw Access Project

author: Carpenter, J.

license: Public Domain

text:
    SMITH v. McDONALD.
    1. Fraud — Pleading.
    A notice of special defense setting up in detail a representation of plaintiff, charging that it was false and fraudulent, and was intended to and did deceive defendant, sufficiently avers fraud.
    2. Same.
    A further averment that plaintiff and certain named associates had procured the organization of a corporation for the pretended purpose of manufacturing medicine, and that the stock issued by the corporation was of no value, sufficiently averred organization of the corporation as a step in the écheme of fraud, although it did not, in precise language, charge fraud in such organization.
    3. Appeal and Error — Questions Considered.
    Questions not raised in the lower court will not be considered on error.
    4. Fraud — Evidence—Sufficiency—Instructions.
    A request that it would take “the same amount of proof” to establish plaintiff’s complicity in the fraud alleged as it would to establish the fraud against plaintiff alone was properly refused, and a charge that defendant must establish plaintiff’s complicity in the fraud by a preponderance of the testimony was properly given in lieu thereof.

      5. Same — Waiver—Instructions.
    A request to charge that defendant waived fraud if he gave the. note in suit after he “believed” he had been defrauded does not present the question of the entertainment of a settled conviction by defendant that he had been defrauded, but to raise such question the request should have used the word “knew” instead of “believed.”
    6. Same.
    A request to charge, in effect, that defendant could not complain of a fraud, if, at the time he executed the note, he entertained a settled conviction that he had been defrauded, is satisfied by a charge to the effect that, if defendant knew, when he signed the note, that he had been defrauded, plaintiff could recover.
    7. Same — Diligence—Party Defrauded.
    The defense of fraud is not defeated by the fact that the party defrauded should, in the exercise of ordinary diligence, have known of the fraud when he entered into the fraudulent transaction complained of by him.
    Error to Hillsdale; Lockwood, J., presiding.
    Submitted January 12, 1905.
    (Docket No. 48.)
    Decided February 28, 1905.
    Assumpsit by George N. Smith against John P. McDonald and Mary McDonald on a promissory note. There was judgment for defendants, and plaintiff brings-error.
    Affirmed.

      F. M. Hall and F. A. Lyon, for appellant.

      Frankhauser & Cornell (Grant Fellows, of counsel), for appellees.
   Carpenter, J.

Plaintiff and the first-named defendant were the principal parties in the preceding case. McDonald v. Smith, ante, 211. The controversy in this suit arises out of the alleged scheme of fraud described in that case. In the final alleged fraudulent transaction defendant incurred an obligation of $550. To secure its payment he gave on' May 14, 1900, two notes, one of $300 and one of $250. October 6, 1900, he,took up these notes, received credit of $90, and gave one note of $460, executed by himself and his mother, his codefendant, Mary McDonald. This note was subsequently transferred to plaintiff, and is the subject-matter of this suit.

Defendants claimed that plaintiff’s participation in the scheme of fraud described in the preceding suit prevented his recovery on this note. The evidence to prove this charge does not differ materially from that introduced in the preceding case. This issue was submitted to a jury, who rendered a verdict for defendants. Nearly all the questions discussed in this case were considered and decided adversely to appellant in the preceding case. Those questions we will not consider. We proceed, however, to consider certain questions not raised in that case.

It is contended that the notice of special defense attached to defendants’ plea of the general issue did not warrant the introduction of any testimony tending to prove fraud. We sufficiently answer this contention by saying that the notice sets up in detail the representation of plaintiff that he had investigated the stock and was willing to buy it at $150 per share. It charges this representation and offer to be false and fraudulent, and avers that it was intended to deceive defendant and did result in his deception. According to our former opinion, this was a sufficient averment of fraud to warrant the introduction of testimony.

It is also contended that the averments in the notice were not sufficient to warrant the introduction of testimony tending to prove fraud in the formation of the corporation for the manufacture of the hog cholera medicine. It is' true that the notice did not in precise language charge fraud in the organization of such company. It did, however, aver that plaintiff and certain named associates had procured its organization ‘ ‘ for the pretended purpose of manufacturing the hog cholera medicine,” and that the stock issued by said corporation was of “no value.” We think under our decisions (see Briesenmeister v. Knights of Pythias, 81 Mich. 525; Farmers' Mut. Fire-Ins. Co. v. Crampton, 43 Mich. 421; Cresinger v. Reed, 25 Mich. 450) this sufficiently informed plaintiff that defendant claimed that the organization of the corporation was a step in the scheme of fraud.

Plaintiff’s counsel insist the defendant could not complain of the fraud because he had not returned or tendered the certificates of stock which he was fraudulently induced to acquire. We are referred to no assignment of error, and we can find none, which shows that this point was raised in the lower court. We therefore decline to consider it.

The trial court did not err in refusing to give the following request preferred by plaintiff:

“It takes the same amount of proof to establish the complicity of this plaintiff in the fraud practiced by Cummins and Gunn that it would to establish fraud against him if he were alone charged with fraud.”

To be informed that it took the same “amount of proof” to establish plaintiff’s complicity in the fraud as it would to establish fraud against him would not have aided the jury, since it cannot be presumed that they knew what amount of proof was necessary to establish the latter charge. The trial court adopted the proper practice when he refused this request, and told the jury in effect that defendant must establish plaintiff’s complicity in the fraud by a preponderance of the testimony.

Complaint is made because the court refused to give the jury the following request preferred by plaintiff:

“That if the note in question was given by the defendant after he believed he had been defrauded he thereby waived such fraud, and he cannot now urge such fraud in defense of this action.”

It appears from the testimony that when the first-named defendant signed the note he knew that some of the fraudulent representations were false, but he still believed others, and the most material of them, to be true. He testifies that when he gave the note he “still had confidence in the B-T” (the corporation to manufacture the medicine). If by the request under consideration plaintiff intended to have the jury instructed that the first-named defendant could not complain if at the time the note was executed he entertained a settled conviction that he had been defrauded, he should have used the word “knew” instead of “believed,” and, if so, he cannot complain because the trial court charged, in effect (in accordance with our decisions, Craig v. Bradley, 26 Mich. 369; Dailey v. King, 79 Mich. 568; Western Electric Co. v. Hart, 103 Mich., at page 482), that if defendant when he signed the note knew that he had been defrauded plaintiff should recover.

But this was not the thought that plaintiff designed to convey to the jury by the request. His thought is made clear by his contention that one who “ has notice of such facts as by the exercise of ordinary diligence and prudence he should have known of the fraud, then-he is presumed to have knowledge of such fraud, and must exercise the same degree of diligence as though he had actual knowledge.” This contention assumes that the defrauded party owes to the party who defrauded him a duty to use diligence to discover the fraud. There is no such obligation. One who perpetrates a fraud cannot complain because his victim continues to have a confidence which a more vigilant person would not have.

The rule contended for by plaintiff, which requires the .same diligence from all persons, has no application to cases ■of fraud. If it had, the very persons, viz., the credulous and unwary, who are the usual victims of fraud, would be at a disadvantage, and would often be denied redress.

We do not think it necessary to consider any other complaint in plaintiff’s brief.

Judgment is affirmed, with costs.

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


author: Hooker, J.

text:
    BRADLEY v. WILLIAMS.
    1. Taxation — Sales — Notice — Misdescription of Owner’s Estate.
    A notice of the sale of land for taxes, personally served upon the owner, is good though addressed to him as mortgagee instead of owner.
    2., Same — Sufficiency of Notice.
    The statute does not require a tax sale purchaser to exhibit to the owner with his notice a certified copy of his deed and a certificate that the report of sale has become absolute.
    Appeal from Muskegon; Russell, J.
    Submitted February 9, 1905.
    (Docket No. 23.)
    Decided February 28, 1905.
    Petition by William Bradley against John Williams and another for a writ of assistance. From a decree for petitioner, defendants appeal.
    Affirmed.

      Stephen H. Clink, for petitioner.

      F. W. Cook, for defendants.
   Hooker, J.

John Williams, being owner in fee of certain premises, failed to pay the taxes for the year 1897, and James P. Cross purchased them at delinquent tax sale, and the sale was duly confirmed. On December 14, 1901, a notice intended to be in compliance with the statute was personally served upon Williams. It is alleged that this notice was insufficient for the reason that it was addressed to “John Williams, mortgagee of land herein described,” instead of “John Williams, owner,” etc. Subsequently Cross sold his interest in the land to Bradley, who, on November 13, 1903, filed a petition for a writ of assistance, making Williams and his tenant, Brustad, parties. They answered, and upon the hearing the prayer of the petition was granted, with costs, and the defendants have appealed.

Two points are involved: (1) The inaccuracy in the notice already mentioned; (3) the failure of Mr. Cross to exhibit to Mr. Williams a certified copy of his deed, and a certificate that the “report of sale has become absolute.” It is conceded that the notice would have been good had it been addressed to “Mr. Williams, owner,” or to “ Mr. Williams,” or even had it not been addressed to any one; but it is contended that the, misdescription of the estate or interest of Mr. Williams invalidated the notice. This is overtechnical. The law was intended to protect landowners against the loss of land through ignorance or forgetfulness of the fact of its sale for taxes. Mr. Williams was informed by this notice of the fact that his land had been sold, and that was sufficient.

The statute does not require the service of evidence of the sale or confirmation, as in foreclosure cases. It prescribes a form which was followed, and the statute w;as fully complied with.

The order of the circuit court is affirmed.

Moore, C. J., and Carpenter, MoAlvay, and Grant, JJ., concurred.


text:
    LESTER v. ADDISON.
    Exemptions — Execution Sale — Conversion—Evidence.
    In trover against a sheriff for selling exempt property on execution, evidence examined, and held that, on plaintiff’s own showing, the property was not sold on execution, hut on foreclosure of a chattel mortgage, and that a verdict was properly directed for defendant.
    Error to St. Joseph; Yaple, J.
    .Submitted February 16,1905.
    (Docket No. 172.)
    Decided February 28, 1905.
    Trover by Bernard H. Lester and another against William R. Addison. There was judgment for defendant on a verdict directed by the court, and plaintiffs bring error.
    Affirmed.

      George H. Arnold, for appellants.

      B. B. Pealer and George E. Miller, for appellee.
   Hooker, J.

On July 5, 1901, execution was issued on a judgment obtained by Ederheimer, Stein & Oo. against the plaintiffs. On July 5, 1901, this execution was levied by Ammon Hahn, deputy sheriff under the defendant, upon a stock of goods owned by the plaintiffs, and on July 10th they were excluded from possession. On July 17th the inventory and appraisement were completed, and plaintiffs were told to be on hand that afternoon to care for exemptions. They came at the designated time and began to take out exemptions, when the defendant announced that he had a chattel mortgage upon all the goods, and that he would not permit exemptions to be removed from the store, whereupon no further attempt to select them was made. Hahn set aside goods alleged to amount to $510 for exemptions, and then sold the stock to the execution creditors for $25, subject to the exemptions and mortgage. An hour or so later the defendant sold all of the goods to Muncey at chattel mortgage sale, leaving a deficiency upon the mortgage. An action of trover was brought against the sheriff for the exemptions, and at the close of plaintiffs’ evidence a verdict was directed for the defendant.

Upon the plaintiffs’ own showing, their exemptions were not sold on execution, and were sold on the foreclosure of the mortgage. There was no unlawful conversion by the defendant. It is unnecessary to discuss other points.

No error is found, and the judgment is affirmed.

Carpenter, Blair, Montgomery, and Ostrander, JJ., concurred.


author: Moore, C. J.

text:
    KERN v. ARBEITER UNTERSTUETZUNGS VEREIN.

    1. Pleading — Demurrer — Pleading Over — Questions Concluded.
    Where defendant pleads issuably after his demurrer is overruled he cannot thereafter again raise the questions settled by the ruling, on the demurred.
    2. Mutual Benefit Associations — Local Societies — Withdrawal-Suit by Members — Parties.
    A local society of a mutual benefit association, by a majority of a quorum, voted to withdraw from the general association, and its officers assumed afterwards to audit and pay from its funds a death claim on a certificate issued by the general association, whereupon certain members of the society filed a bill to restrain such payment. Held, that the general association was not a necessary party.
    3. Same — Right of Members to Maintain Suit.
    ■ Allegations that it was the duty of the local officers to institute proceedings to collect the benefit from the general association, which they refused to do, but, on the contrary, assumed authority to pay it themselves from the funds of the local society, state sufficient reasons why it was necessary for complainants to sue, and sufficiently show that it would have been an idle ceremony to demand that defendant’s officers act in the matter.
    4. Same — Payment by Local Society — Constitutional Provision.
    A provision in the constitution of the local society authorizing it to aid the widows and orphans of deceased members entitled to benefits could not be invoked to authorize the payment of the benefit.
    5. Same — Contract or Insurance — Constituents. „
    The constitutions of the general association and of the constituent local societies of a mutual benefit association, as well as the benefit certificates, form parts of the insurance contracts with the members.
    6. Same — By-Laws—Constitutionality.
    Both the State (art. 4, § 43) and Federal (art. 1, § 10, and Amend. 14) Constitutions are “laws,” within 1 How. Stat. chap. 164, § 4, giving mutual benefit associations power to make regulations for their own government not contrary to the laws of the United States or this State.
    7. Same — Local Society — Right to Withdraw.
    A local society of a mutual benefit association cannot, by resolution, withdraw from the association and assume the payment of the benefit certificates issued to the members of the local society by the association, where such action impairs the obligations of the contracts of the association and society with its members.
    Appeal from Saginaw; Beach, J.
    Submitted November 17, 1904.
    (Docket No. 202.)
    Decided March 7, 1905.
    Bill by Rudolph Kern and others against the Arbeiter Unterstuetzungs Verein and others to restrain the payment of a benefit certificate. From a decree for complainants, defendants appeal.
    Affirmed.

      F. E. Emerick and James H. Davitt, for complainants.

      L. T. Durand and F. A. Bockwith, for defendants.

      Rehearing denied May 12, 1905.

   Moore, C. J.

The complainants are members of the defendant corporation. The bill in this case was filed to obtain an injunction restraining the Arbeiter Unterstuetzungs Verein, and the other defendants, who are its officers, from a claimed misappropriation of $500 which complainants and the other members of the verein had paid into its treasury. A restraining order was issued on filing the bill, and at the hearing a final decree granting a perpetual injunction was rendered. The appellant defendants bring the case here by appeal.

The circuit judge filed a written opinion, which states so clearly the issue involved that we quote from it as follows:

“Complainants filed a bill in this court against the defendant, asking for an injunction restraining the Arbeiter Unterstuetzungs Verein, of Saginaw City, Michigan, from paying to the beneficiaries of Charles Stocker moneys in their possession or under their control which had been paid in by members of the Arbeiter Unterstuetzungs Verein as dues or otherwise.
“ It is claimed in the bill filed that the defendant the Arbeiter Unterstuetzungs Verein is a corporation organized under the laws of the State of Michigan, pursuant to Act No. 42 of the Public Acts of 188?.
‘£ The Allgemeiner Arbeiter Bund, a State corporation, organized under the laws of the State of Michigan, is composed of the different arbeiter societies in the State of Michigan; being 81 similar'associations. No person can become a member of the State bund unless he is a member of the local association. The bund issues to every member who is in good standing in one of the local societies a benefit certificate payable to the beneficiaries named in the certificate, upon the payment of annual dues to the local society of eight dollars; five dollars of the dues to belong to the death fund for bund dues, and three dollars to the general fund.
“It is further claimed that the defendant society, its trustees or officers, have no right to pay the claim or benefits out of any of the fund contributed as herein by the complainants or any members of the association.
“ It is further claimed that Charles Stocker was a member in good standing on the 13th day of September, 1903; that he died, and that his heirs or other lawful beneficiaries, after filing with the State bund proofs of death, are entitled to the death benefit of $500; that the heirs or beneficiaries have no right to demand or be paid this amount from the local society.
“It is further claimed that since the death of Charles Stocker a resolution was passed by the local society to pay the death-benefit claim out of the funds in the hands of the local society, which should be paid only by the State bund, as the local society never issued a benefit certificate to Charles Stocker, deceased; that there are now 944 members of the Arbeiter Unterstuetzungs Verein of Saginaw City, and that there are 9,500 members of the Allgemeiner Arbeiter Bund, being the State society; that if the local society pays its dues, as provided by the by-laws, to the State bund — being ten cents for each and all members in good standing — it would only cost the local society $94.40; but, if the full amount of said death benefit is paid by the local society, it will cost said local society $500, or more than ten times as much as they are legally liable to pay or contribute.
“ It is further claimed that it would be a gross breach of trust by defendant, which would result in great and irreparable loss and damage to the complainant and other members of the local society, and that the bill is filed in behalf of the complainants and other members of the society, as they are too numerous to be made all parties complainant or defendant. And they pray that this suit may be treated and regarded as commenced and carried on in behalf of all such persons, as well as in the names of the complainants, and that the defendants may be perpetually restrained and enjoined from paying the heirs or other beneficiaries of the late Charles Stocker anything out of money in their possession or under their control which has been paid in by members of the Arbeiter Unterstuetzungs Verein, as dues or otherwise, and that the defendants be authorized, when properly required, to pay over to the Allgemeiner Arbeiter Bund of the State of Michigan, out of the funds in its hands, towards paying the Stocker benefit certificate, the sum of ten cents for each member of said defendant society.
‘ ‘ A demurrer to said bill was filed, and an order was made requiring the complainants to amend their bill, and the same was amended pursuant to said order.
“An answer has been filed by the defendants, claiming that they have full power and authority to pay the benefit certificate, as they are no longer members of the State bund; that they are a separate and distinct corporation, and, under the constitution and by-laws of the State bund and the constitution and by-laws of the defendant society, they have a right to withdraw from said bund, as they have done, and they were not a member of the State bund when said bill was filed. That the reason for withdrawing from said bund is the fact that for the past 15 years the local society has paid into the State bund, on account of benefits arising from the deaths of members of the several societies, the aggregate sum of $86,516.50, and that they have only received through the bund, as benefits, the sum of $57,400. That they have paid $29,116.50 in excess of any and all benefits derived through the affiliation.
“ It is conceded that the local society, as long as they remained a member of the State bund, have paid each year the sum of five dollars per member as dues, and they believe that it is for the best interests of the members of the local society to no longer remain a member and be affiliated with the State bund. That a committee on constitution and by-laws was appointed, which on the 5th day of July, 1903, reported to the society, in writing, the changes that were necessary to be made for the purpose of carrying into effect the withdrawal of said local society from said bund. That due notice was given to all the members of the local society, by postal cards being sent to each member, and that only seven of the postal cards were returned as not having been received by the members to whom they were addressed. That there were 309 members present at said meeting. That 222 voted in favor of withdrawing from the State bund, and 78 voted against it. That at the same meeting the report of the committee to amend the constitution and by-laws was adopted unanimously. This meeting was held on August 5, 1903. That due notice was given to the State bund, notifying them of the action taken by the local society, and that since that time they have had no further transaction or business connection with the State bund. And that they have a right to pay the "benefit certificate held by the heirs or beneficiaries of Charles Stocker, deceased. That a resolution was passed directing the society to pay over from its treasury the sum of $500 for the benefit of the widow and children of said Charles Stocker, deceased.
“ It is further claimed by the defendants that it is within the corporate power of the defendant corporation to take care of all such claims arising on account of the death of its members; that it is eminently fitting and proper that it should do so, under the act of its incorporation, its constitution, and by-laws.
“Testimony was taken in open court, and the only question for me to pass upon is, Has the local society a right to pay the death-benefit certificate that was issued by the State bund to Charles Stocker, in which bund the local society is a member, and Charles Stocker being a member of the local society ? It is not claimed that the benefit certificate was ever surrendered and canceled by Charles Stocker in his lifetime, and a new certificate issued by the local society pursuant to their amended constitution and by-laws. If this had been done, it would present a different question. But what right has the local society to pay a certificate which is issued by the State bund, and where it is claimed by the complainants in this particular case they would be paying a little over five times as much in paying this certificate through the [ocal society as they would through the State bund ?”

The circuit judge held the local society had no right to pay the death-benefit certificate issued by the State society, and so decreed.

The claim oFthe defendants and appellants is that the decree is erroneous, for the following reasons:

1. That said bund is not made a party to this litigation; has not asked for any such decree; has not recognized said Stocker benefit certificate as a binding obligation upon it; and has made no assessment to meet it, nor taken any steps in the matter, unless to pay the expenses incurred on the part of complainants in this suit.

2. That three members of the board of trustees were omitted as parties to this suit.

3. That neither the civil nor the property rights of com-

plainants are involved in this litigation, nor is any fraud charged or claimed by the bill. *

4. That no request has been made to the defendant corporation, its officers, its board of trustees, or any of them, to have the action relative to said withdrawal, or to the passage of said resolution for said Stocker’s dependents, either rescinded or reconsidered, or to have them, or either -of them, institute any legal proceedings whatever to test the legality thereof, or to restrain the payment of such money.

5. That the action of said society in withdrawing from said bund and revising its constitution, as stated, was legal and valid, and had the effect to then and there sever its relations with the bund, and to annul the obligations of the bund upon certificates, including the one in question.

6. That because of such withdrawal defendant corporation had the right to provide for the payment to the dependents of its members who held bund certificates at the time of withdrawal of the amount called for by such certificates, either by the issue of new certificates, or by the passage of a resolution to that effect before the new certificates had been prepared.

7. That under article 8 of the constitution of defendant corporation, providing:

“ Section 1. Widows and orphans of deceased members who were entitled to benefits, shall, if they apply for the same and the treasury permits, be aided in the judgment of the society” — as well as under other provisions, the society possessed the power to pass the resolution in question for the Stocker dependents, or to give them any sum of money, or other relief whatsoever, which, in the judgment of the society, it was proper to afford, having in view its financial ability to do so. As already stated, the corporate power to do this is not questioned by the bill.

8. That the bill is multifarious, in seeking the distinct and different kinds of relief granted by the decree.

As to reasons 1 and 8, it may be said they were assigned as reasons in the demurrer, and were overruled by the judge. From that decision no appeal was taken.

In Kraatz v. Electric Light Co., 82 Mich. 457, it was said:

“It is claimed by plaintiff’s counsel that,-inasmuch as the defendant did not choose to stand upon its demurrer, but pleaded issuably after it was overruled, it could not thereafter again raise the questions settled by the overruling of the demurrer; citing Ashton v. Railway Co., 78 Mich. 587; Cicotte v. County of Wayne, 44 Mich. 173; Peterson v. Fowler, 76 Mich. 258. See, also, Wales v. Lyon, 2 Mich. 276. This position is undoubtedly correct, under all our previous holdings, and this disposes of all the questions raised upon the declaration. ”

We think that principle applicable to the case at bar,' where it may be said that it is not essential to a just decree between appellants and appellees that the bund be made a party.

As to reason 4, this appeared in the demurrer to the oi’iginal bill, and the court held it good. Thereupon the complainants amended their bill by adding the following:

“ Complainants did not ask defendant Arbeiter Unterstuetzungs Verein, or any of the other defendants named in the original bill in this cause, to institute suit or take any legal action to prevent the wrong and injury which they themselves threatened to do to these complainants and their rights, as set out in the original bill, because it would have been idle and useless to do so, for the reasons following: (a) Said- defendants were duly notified of the death of Charles Stocker, and upon such notice it was their duty, through the president and secretary of the Arbeiter Unterstuetzungs Verein, to give notice of the same to the Allgemeiner Arbeiter Bund, but defendants neglected and refused to do so, and on the contrary passed the resolution referred to in paragraph 8 above; thus showing a definite and deliberate purpose on their part to ignore the rights of complainants as members of the Arbeiter Unterstuetzungs Verein, and as members of the Allgemeiner Arbeiter Bund of Michigan. (6) Because said defendants themselves then threatened and intended, and still threaten and intend, to do injury and wrong to complainants, which complainants ask this court to protect them from; and it would have been idle then, and would be idle now, to ask defendants to take legal action against themselves, (c) The rights which complainants ask this court to protect and enforce are not rights which belong or ever belonged to the defendant Arbeiter Unterstuetzungs Verein, or any other of the defendants, but, on the contrary, are rights which belong and always belonged to those complainants and the other members of the Arbeiter Unterstuetzungs Verein, in whose behalf, as well as in behalf of complainants, this bill is filed.”

These allegations were sustained by the testimony.. It is clear, too, from the attitude of the defendants in the original bill, that they have no sympathy with the position taken by the complainants.

In 2 Cook on Stock, Stockh. & Córp. Law, § 741, it is said:

“ There are occasions when the allegation that the stockholder has requested the directors to bring suit, and they have refused, may be omitted, since the request itself is not required. This occurs when the corporate management is under the control of the guilty parties. No request need then be made or alleged, since the guilty parties would not comply with the request; and, even if they did, the court would not allow them to conduct the suit against themselves. Nevertheless, instead of this allegation, the complainant must allege the facts which excuse such a demand or request to the directors, and these facts must be stated with particularity and definiteness.”

See, also, Clark on Corp. pp. 395-398; De Neufville v. Railway Co., 81 Fed. 13, 26 C. C. A. 306; People’s Savings Bank v. Building Co., 8 Colo. App. 354; Flynn v. Third Nat. Bank, 122 Mich. 642. We think the allegations of the amended bill of complaint and the testimony bring the case within these authorities.

As to reason 7, we think it very clear that, in taking the action it did, the defendant corporation was not proceeding under section 1, art. 8, of its constitution, which authorizes the giving of aid to widows and orphans, but was in fact undertaking to pay out of its funds, to the beneficiaries named in a certificate issued by the bund, the obligation named therein. This, then, brings us to the important question in the case; that is, Did the defendant corporation have the right, by a much less than a majority vote of its membership, to sever its relations with the State bund ?

The Allgemeiner Arbeiter Bund of Michigan was founded January 1, 1870, and reincorporated in 1887 under Act No. 42 of that year (2 Comp. Laws 1897, §§ 7441-7446). Defendant Arbeiter Unterstuetzungs Verein was originally incorporated September 11, 1871, under chapter 58, 1 Comp. Laws 1857, and was reincorporated December 19, 1892, under chapter 164, 1 How. Stat. It became a member of the bund in 1872. One of the articles of reorganization (No. 4)' contains the following:

“ The foregoing is a reorganization of the Workingmen’s Relief Association of Saginaw City, Michigan, incorporated 1871, and the persons executing the same are members of said Workingmen’s Relief Association, being the society hereby reorganized as the Arbeiter Unterstuetzungs Verein.”

When the Allgemeiner Arbeiter Bund was reorganized, in 1887, the defendant verein became one of the subscribers to the articles of reincorporation. At this time there were 48 local societies. This number had increased, when the defendant corporation sought to sever its connection with the bund, to 82, with upwards of 9,400 members. The defendant corporation had at the last-named time 940-odd members. The individuals composing the local societies are members of the bund from whom they receive insurance certificates, the bund being the insurer. For the purpose of providing a fund to pay this insurance, each corporate member of the union is required to pay upon the death of a member of the bund an amount equal to-10 cents for each of its own members.

Article 10 of the constitution of the bund provides:

“ To have a surer rule and a payment of the bund moneys, the bund shall furnish, of sufficient numbers, printed heir or death certificates, to be sent to all of the local societies for their members. Each member shall, in this certificate, name or designate with the full name of the person or persons to whom after his death the money shall be paid. * * *
“ By the death of a member of the bund, the bund shall send, after the lapse of thirty days from the date of the official notice, including also a certificate accompanying said official notice, such sum of money to said society, payable to the order of the person named in the certificate, according to art. V, paragraph nine of the by-laws. If there are no legal heirs living, then the money on death fund reverts to the bund.”

• The certificates issued to the complainants, and to Mr. Stocker as well, were issued under the provisions of this article. It will be seen that the members of the various local societies had the benefit of certificates of insurance issued by the bund, which embraced in its membership' upwards of 9,000 persons. It will also be noted that, if one local society could go out without consulting the bund, any number might do so, and thus impair the security furnished by the insurance. If, too, the local society could undertake, with its membership of a little more than 900, to stand in the place of the bund, with its membership of more than 9,000, it would greatly lessen the value of the insurance.

Article 2 of the constitution of the bund, § 3, provides that “only an incorporated arbeiter mutual association, which warrants or guarantees aid to its members, in case of sickness or death of its members, shall be received into this association.”

Article 2 of the verein constitution sets forth that the “object of the society is: Section 1. Assistance of the sick and suffering as also to provide for decent burial of its members. Sec. 2. To provide for the widows and orphans of deceased members. Sec. 3. Care for proper administration of the estates of deceased members. Sec. 4. To promote the social intercourse of the members. ”

The object and purpose of the bund are thus stated:

Third. The object and purpose of such association is the general welfare of the members of the societies forming such association, and the extending to them and their families, in case of death, such material aid as may be fixed from time to time by the constitution and by-laws of the association.”

While the purposes and objects of the verein are defined in subdivision 3, § 1, of chapter 164, 1 How. Stat., as follows:

Third. The purposes and objects for which said cor-' poration is formed which shall be to provide for the relief of distressed members, the visitation of the sick, the burial of the dead, and such other benevolent and worthy purposes and objects as affect the members of the corporation, the period for which said corporation is formed, which period shall not exceed thirty years. ”

Counsel claim (we quote from the brief) that—

“ By adopting their several constitutions, and thereby assuming towards each other and their members the relations and obligations described, these corporations have put a practical construction upon those statutes, and that construction gives no support to the conduct or contention of these defendants. On the contrary, it plainly forbids what they are attempting to do. No doubt, the constitution of the verein and the constitution of the bund, as well as the beneficiary certificate, form parts of such insurance contracts. Niblack on Acc. Ins. & Ben. Soc. (2d Ed.) p. 271; Supreme Lodge Knights of Honor v. Nairn, 60 Mich. 44; 3 Am. & Eng. Enc. Law (2d Ed.), p. 1059; Union Mutual Ass’n v. Montgomery, 70 Mich. 587; Wist v. Grand Lodge A. O. U. W., 22 Or. 271.
“ The peculiar character of the case makes it necessary to look upon both of these constitutions in this light, for each is so drawn with reference to the other as to require them to be considered together. And on the principle of the authorities cited, not only the articles of association of the bund, but also its constitution, is a part of the contract between it and the corporations associating. Thus viewed, they certainly do not warrant the secession of August 5th, nor the amendments of the verein constitution which followed. * * * The language in which such power is reserved must be read in the light of the statute under which the verein is incorporated. Section 4 of chapter 164 provides that:
‘ ‘ ‘ Said corporation shall have full power and authority to make and establish rules and regulations for the regulating and governing of the affairs and business of said corporation and members thereof, not contrary to the laws of the United States or this State, to decide as to the necessary qualifications for and who shall be eligible to membership therein, to provide for the election of members and to designate, elect, or appoint in such manner as they see fit, by their rules and regulations, such officers, under such names and style as they shall decide, who shall exercise such powers and such supervision, control, and management of the affairs of such corporations as shall be delegated to them respectively, by the constitution, rules, regulations, and by-laws of said corporations.’
“ Both the State (article 4, § 43) and the Federal (article 1, § 10) Constitutions prohibit laws impairing the obligation of contracts, and under the latter the State is forbidden to deprive any person of property without due process of law. Amend. 14. These rules form a part of the laws of the United States and of this State, within the meaning of the above statute. General power to make changes in the constitution and by-laws will not authorize amendments which materially impair prior insurance contracts or change the scheme of insurance. Niblack on Acc. Ins. & Ben. Soc. (2d Ed.) §§ 25, 26, pp. 58-62; Strauss v. Mutual Reserve Fund Life Ass’n, 126 N. C. 971, 128 N. C. 465 (54 L. R. A. 605); Bragaw v. Supreme Lodge Knights of Honor, 128 N. C. 354 (54 L. R. A. 602); Johnson v. Reformers, 135 N. C. 385; Pokrefky v. Firemen's Fund Ass’n, 121 Mich. 456; Starling v. Royal Templars, 108 Mich. 440; Wheeler v. Order of Iron Hall, 110 Mich. 437; Becker v. Insurance Co., 48 Mich. 610; Kalbitzer v. Goodhue, 52 W. Va. 435; Union Ben. Society v. Martin, 113 Ky. 25; Hale v. Equitable Aid Union, 168 Pa. St. 377; Becker v. Benefit Society, 144 Pa. St. 232; Wist v. Grand Lodge A. O. U. W., 22 Or. 271.”

It is apparent that the attempted action of the defendant corporation very greatly changes and impairs the obligations of the contract which resulted from the complainants becoming members of the local society, and receiving certificates of insurance from the bund.

It is said by counsel for defendant that article 16 of the constitution of the bund entitled the society to withdraw at its discretion. It reads:

_ “This union cannot be dissolved as long as fifteen associations belong to it, and each association which steps out of the union of the ‘Allgemeiner Arbeiter Bund ’ declares thereby that it gives up all claim to the property or possessions.”

We think this should be read in connection with sections 41 and 42 of article 9, which read:

“If an association should not pay its pledges within two months, it is the duty of the treasurer to make it known to such association, and if the association does not pay its pledge within a month after said notice, it becomes the • duty of the president to suspend said association.
“If at any time an association of the union is suspended and fails within four months to comply with the pledge toward the union, the said association shall be dropped by the executive committee of the union. It has, however, the privilege of appeal to the union.”

When so read, we do not think it can be said that it was contemplated any local society could withdraw at its discretion.

The decree is affirmed.

Carpenter, Grant, Montgomery, and Hooker, JJ., concurred.


text:
    CANAL CONSTRUCTION CO. v. SCHLICKUM.
    Taxation — Compelling Assessment — Mandamus — Lapse op Time.
    Where, pending certiorari to review a mandamus directing a supervisor to spread certain taxes upon his assessment roll for a certain year, the time when the tax could be spread on the roll for that year elapsed, the Supreme Court, on sustaining the legality of the tax, will direct that the assessment be spread on the roll for the ensuing year.
    Certiorari to Saginaw; Beach, J.
    Submitted January 3, 1905.
    (Calendar No. 20,840.)
    Decided March 7, 1905.
    Mandamus by the Canal Construction Company to compel Charles Schlickum, supervisor of Blumfield township, to spread a certain tax. To review an order granting the writ, respondent brings certiorari.
    Affirmed.

      James H. Davitt, for relator.

      William G. Gage (G. W. Davis, of counsel), for respondent.
   Moore, C. J.

This is certiorari for the purpose of reviewing the action of the circuit judge of Saginaw county in granting relator a writ of mandamus directing the respondent, as supervisor of the township of Blumfield, to spread upon the assessment roll of said township drain taxes for the construction of Cheboygan creek drain in the sum of $8,500.48.

The record shows that prior to July 20, 1903, the drain commissioners of Saginaw and Bay counties had established a drain known as “Cheboygan Creek Drain,” located in the townships of Blumfield and Buena Vista, in Saginaw county, and the township of Portsmouth, in Bay county. In July, 1903, the contract for constructing the drain was awarded to the relator for $20,600. The amount apportioned to Blumfield as its part of the cost of the drain was $8,500.48, which amount was properly reported to the board of supervisors, who directed its assessment. The respondent, who is supervisor of Blumfield, declined to spread these taxes, claiming various reasons, going to the validity of the tax, for refusing to do so. The relator made a request of Mr. Gibson, the present drain commissioner of Saginaw county, to take steps to compel respondent to assess these taxes; but Mr. Gibson, for reasons which do not appear on the record, but possibly because his predecessor had laid out the drain, declined to commence litigation, whereupon the relator commenced these proceedings.

A hearing was had before the circuit judge, who found that relator had a contract for the construction of said Cheboygan creek drain; that the board of supervisors of Saginaw county by proper resolution directed the respondent to spread said taxes upon the assessment roll of 1903, and that the respondent had refused to do so. The circuit judge directed the respondent to assess the taxes on the assessment roll of the township of Blumfield for the year 1904.

A number of reasons are urged against the validity of this assessment. The principles involved have been discussed at length in several recent cases. Without going into details, we shall content ourselves with saying the case is controlled by Laubach v. O'Meara, 107 Mich. 29; Scholtz v. Smith, 119 Mich. 634; Board of State Tax Com'rs v. Quinn, 125 Mich. 128; Friedman v. Horning, 128 Mich. 606; Brown v. Nehmer, 128 Mich. 690.

Inasmuch as the time has gone by when the tax could be spread on the 1904 roll, it is directed that the supervisor of the township spread the assessment on the roll for 1905.

Judgment is affirmed.

Carpenter, McAlvay, Grant, and Blair, JJ., concurred.


author: Blaie, J.

text:
    ABLARD v. DETROIT UNITED RAILWAY.
    1. Street Railways — Negligence—Injury to Travelers.
    A motorman who runs his car on a dark, stormy night twice as fast as, under his own testimony, he should, to enable him to control it and prevent accidents, and depends on his gong to warn travelers, is negligent.

      2. Same — Rights in Highway.
    Street-railway companies do not possess an exclusive right to that portion of the highway covered by their tracks, but the ordinary traveler has a right to use every portion of the highway, including the space between the rails, until it becomes necessary for him to yield the track to the cars.
    3. Same — Travelers—Negligence.
    In using the track of a street railway, it is the duty of the traveler to maintain such a reasonable watchfulness for the approach of a car as, under the circumstances of the particular case, an ordinarily prudent man would. He is not required to be constantly looking back, but has a right to rely to some extent upon the exercise of proper caution on the part of the motorman in controlling his car in accordance with his legal duty and giving notice of its approach.

      4. Same. •
    It is not negligent per se for a traveler to drive his team along the track of a street railway in the night-time, though there is room in the street for him to drive off the track out of danger from cars.
    5. Same — Injuries to Traveler — Contributory Negligence—
    Question eor Jury.
    Whether plaintiff, injured by a street car approaching from the rear and colliding with his moving van while driving astride the track, was negligent, held, properly submitted to the jury.
    Error to Wayne; Donovan, J.
    Submitted January 4, 1905.
    (Docket No. 6.)
    Decided March 7, 1905.
    Case by Thomas Ablard against the Detroit United Bail-way for personal injuries. There was judgment for plaintiff, and defendant brings error.
    Affirmed.

      Corliss, Andrus, Leete & Joslyn, for appellant.

      Allan H. Frazer and William H. Turner, for appellee.
   Blaie, J.

About half past 9 in the evening of June 20, 1902, Thomas Ablard, the plaintiff, was injured on Forest avenue, in the city of Detroit, by a collision between a street car and his moving van. After loading his van with furniture from a house on Mt. Elliott avenue, about half a block north of Forest avenue, plaintiff drove south to Forest avenue, turned west on that street, and drove on west, with the wheels of his van “straddling,” the north rail of the north track of defendant’s street railway on Forest avenue. When he had just passed Galster street, some 1,900 feet west of Mt. Elliott avenue, his van was struck by a street car approaching from behind on the same track over which he was driving. The defendant maintained double tracks on Forest avenue. On the south track its cars run in an easterly direction. Westbound cars use the north track. Plaintiff was familiar with this street, and with the operation of defendant’s cars thereon, and knew that they ran pretty frequently going both-ways. The street was well paved, and was 70 feet wide between the property lines. The space between the north curb and the north rail was 12 feet 8 inches wide. There was an electric tower light a block east of the place of the accident. The night was dark, and it was raining slightly, but where vision was unobscured the plaintiff’s van could be seen, according to the estimates of different witnesses, from one to three blocks, or, according to the motorneer, one and one-half blocks away. The van was about 11 feet high, 16 feet 4 inches long, with a top 20 feet long, 6 feet 8 inches wide at the tires of the rear wheels, and 7 feet 8 inches from the outside of the rear hubs. The load of furniture weighed some 3,000 pounds, and prevented the driver from looking back through the van. Plaintiff sat in the middle of the seat when driving, and when he wished to look back had to move to one side.

The only point raised by defendant’s counsel in his printed brief and on the oral argument in this court is that upon the record plaintiff was guilty of contributory negligence, and that the court should have directed a verdict for the defendant. We do not think that the court would have been warranted in directing a verdict for the defendant on the ground of plaintiff’s contributory negligence under the circumstances of this case.

The plaintiff testified in his own behalf as follows:

‘ Q. Did you in going up Forest look back ?
“A. We always lookback.
Mr. Leete: I move to strike that out.
The Court: Strike it out.
“A. Well, I looked back.
“ Q. Also ahead?
“A. Yes, sir.
Q. What do you do also with reference to keeping track of any car coming behind you ?
“A. We were always watching.
“ Mr. Leete: I move to strike that out also.
The Court: What you were always doing is not evidence of what you did on that night.
Q. What did you do on this occasion ?
“A. I was watching for the car.
Q. Did you see this car ?
“A. No, sir.
“ Q. When you last looked, will you state whether any car had come around the turn ?
“A. There was none that I could see.
‘ ‘ Q. Did you see any ?
“A. No, sir, I did not.
Q. Will you state whether you did anything with reference to listening for the bell ?
“A. Yes, sir; I listened.
“ Q. Did this motorman sound a bell ?
“A. I did not hear any. * * *
(On cross-examination.)
“ Q. Were you singing that night?
“A. Just a little bit of a hum that I have.
Q. Singing so the people on the streets in the houses could hear you ?
“A. No, sir; because I couldn’t sing if I wanted to sing. * * *
Q. Now, were you not singing so that you could be heard in the houses near by ?
A. Not that I know of. They might have heard me.
Q. You were not thinking of listening for the gong of a car while singing that way ?
“A. Yes, sir; we were always listening. * * *
‘ ‘ Q. And not thinking of listening for any particular alarm that might be given ?
“A. I was always watching. That was an instinct that we had — that we were always watching.
“ Q. Well, that singing would not help your hearing.
“A. And did not injure. That humming that I was doing would not injure my hearing at all. * * *
Q. What was the reason you could not see it when it was a half block behind you ?
‘ ‘ A. Because from the last time I looked it came upon me so quick.”

Defendant’s motorman, Fred Schulte, testified:

‘ ‘ The night I had the accident was a dark, rainy night. The rain came upon my vestibule from the west. It beat upon the front window. In operating the car before the accident I wiped the window about 10 minutes before on Kercheval avenue. After I had cleaned the window at that time I was running the car. I had no opportunity-after that up to the time of the accident to clean the window. The effect of the rain coming on the window of the vestibule was to blur the glass. Going along Forest avenue I was on the north track. I came onto Forest avenue at Mt. Elliott, going towards the west. The night, aside from the rain, was dark. As I got along near Mbran street coming towards Galster or Collins, I was operating my car the right way, occupying the vestibule and keeping a lookout. Between those streets I was sounding the gong. The gong is sounded with the foot. I could see, when operating the car going west, under the conditions I have described, ahead of me about 60 or 70 feet. When I first discovered that there was any obstruction on the track, I was about near Galster. Then I noticed a dark object up in front of me. I could not distinguish what it was. It appeared to be about 60 or 70 feet ahead.”

Witness further testified that when he was off the car he could see about a block and a half down the street.

“ That it took about a minute and a half to run from Mt. Elliott avenue to the place where I struck Mr. Ablard’s van. I knew at the time and before that wagons, carriages, and people were liable to be ahead of me at any spot or place on the track. I looked out for them for myself. My life is in my hands. It was raining, and that obscured my vision looking through the glass to a certain extent. I could see about 60 or 70 feet ahead of me. That is all I could see, and after that dark. I could not distinguish whether there was any object on the track or not. The headlight gave a view 30 feet ahead.”

Witness further testified that, taking in consideration the distance the car would slide, it required 135 feet in which to stop it.

“Q. Now, then, at what rate would you have to run in order to control your car so that you could stop after you saw an object and save it from damages ?
“A. About seven or eight miles an hour.
“Q. So that on this night that you say was dark and’ rainy, and the rain on your glass, by running your car seven or eight miles an hour, you could have it under such control that, so far as you could see, you would be able to stop the car,'and avoid the collision ?
“A. Yes, sir.
“Q. Why didn’t you do that?
“Mr. Leete: He has already told you he had a gong for a signal.
“Q. And then you preferred simply to rely on your gong ?
“A. Yes, sir. * * * I was running about ten miles an hour on six points at the time of the collision. There are six points, and I had her up to the limit. That is, at the time I shut her off she was running on six points, and at full speed; the same speed that I would run on a sunshiny day up there.”

The motorman testified that he rang the gong, but plaintiff gave evidence tending to show that no gong or bell was rung. If the testimony-of the motorman that he ran from Mt. Elliott avenue to the place of the accident, some 1,900 feet, in about a minute and a half, is correct, then his car was moving at the rate of nearly 14$- miles an hour; and some of the witnesses on plaintiff’s behalf put the speed at 15 miles or more. It is apparent that at this rate of speed he was running about twice as fast as he should have run, under his own testimony, to enable him to control his car so as to prevent an accident, with the limited vision afforded him. He also makes it clear that he expected to find people upon the track, but relied upon his gong to warn them off the track, knowing that, if they did not heed the warning, he must inevitably collide with them. If he traveled 1,900 feet in a minute and a half, he was traveling about 21 feet a second, and if, therefore, he could only see this large van some 60 or 70 feet ahead of him, the driver of the van would have less than four seconds in which to get off the track, provided the warning was given at the precise instant of discovery. The probability would be infinitely great of á collision under' such circumstances, and it is apparent from the testimony of the motorman himself that his conduct of the car was extremely negligent.

It has been repeatedly held by this court that street-railway companies do not possess an exclusive right to that portion of the highway covered by their tracks, but that the ordinary traveler upon the highway has a right to use every portion of the highway, including the space between the rails, until it becomes necessary for him to yield the track to the cars of the company. In using the track of the street-railway company, however, it is the duty of the traveler to keep in mind the fact that cars will be likely to follow and overtake him, and to maintain such a reasonable watchfulness for the approach of a car as, under the circumstances of the particular case, an ordinarily prudent man would. It was not negligence per se for the plaintiff to drive his team along the track of the street railway in the night-time, although there was room for him to have driven off the track, and where he could not have been struck by an approaching car. Whether the plaintiff looked back for the car as often as a reasonably prudent man should, we think was properly submitted to the jury under the circumstances of this case. We do not think he is required to be constantly looking back, or that he is necessarily negligent for not seeing the car. He has a right to rely to some extent upon the exercise of proper caution on the part of the motorman in controlling his car in accordance with his legal duty, and giving notice of its approach.

It was the duty of the motorneer to have the car under such control as to admit of its being stopped after he became able to discover objects on the track, and before a collision with such objects should occur, and it was his duty to give timely warning of his approach.

If the motorneer had performed his plain legal duty, under the decisions of this court, he would have been able, after discovering plaintiff’s position, to have stopped his car and avoided a collision. He chose, however, to run at such a rate of speed, when his vision was limited by the darkness and the rain, that, as testified by himself and uncontestably shown by the result, he could not stop his car in time to avoid the collision.

We do not think it can be said, under such circumstances, that plaintiff was bound to take into consideration that tfie car which struck him might be run at such a reckless rate of speed; and the j ury might well ha ve found that, if the car had been run at the rate of speed at which the motorman said he could control it in time to prevent an accident, its approach would have been observed by plaintiff. Plaintiff testified that he looked for the car, and that the last time he looked, no car was in sight, and that he was constantly watching and listening for its approach, and that the only reason he did not see it in time was because it came so quick after he looked the last time. We think that the question of contributory negligence was properly submitted to the jury. Rouse v. Railway Co., 128 Mich. 149, 135 Mich. 545, 547; La Pontney v. Cartage Co., 116 Mich. 514; Manor v. Railway Co., 118 Mich. 1; Mertz v. Railway, 125 Mich. 11; Tunison v. Weadock, 130 Mich. 141; Bedell v. Railway, 131 Mich. 668; Mahoney v. Railway Co., 110 Cal. 471; Chauvin v. Railway, 135 Mich. 85 (97 N. W. 160).

The judgment is affirmed, with costs.

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