text:
    Judson C. Goodrich v. City of Detroit.

      Liability of Detroit City for public works. — Under the charter of Detroit (of 1857) the city corporation has no power to make itself responsible for the price of any public work; and such, work can only be paid for by funds actually in the hands of the city treasurer, provided for the specific purpose.

      Case agreed upon: inferences of fact not to be drawn. — A case agreed upon by the parties, and submitted to the Court for its decision, is not a mere stipu-. lation concerning evidence, from which inferences of fact may be drawn; but it is equivalent to a finding of facts by a Court, or the special verdict of a jury, in which every fact necessary to a recovery must be expressly found.
    Where, therefore, a contractor claimed to recover of the city of Detroit the con« tract price of a certain public work, on the ground of negligence on the part of the city in collecting the assessment therofor, and a case was agreed upon and submitted to the Court which [only set forth the steps which the city had taken for the collection; it was held, that the Court had no right, on such a case, to find the fact of negligence from the facts agreed upon and set forth.

      Heard April 14th.

      Decided April 19th.
    Case agreed upon by the parties, in the Wayne Circuit, as follows:
    This is an action of assumpsit. The plaintiffs declare upon the common counts, and claim the sum of $5,000. The defendant pleads the general issue.
    The facts of the matter in controversy are the following. In August, 1860, the plaintiffs entered into a contract with the defendant to do all the paving of the city for that year. The plaintiffs performed the contract in a satisfactory manner. The Common Council of said city assessed the taxes to pay for the paving thus done, in the usual manner.

      William Cook was city collector of said city for the year 1860. He was appointed by the Common Council and gave the required bond to the city, with sureties.
    The assessment roll made as prescribed, with a warrant in the usual form, was put by the city into the hands of said Cook.
    On this warrant and assessment the said Cook collected the sum of $1,Y61, which he never paid over to the city treasurer, as provided by law.
    The Common Council, in the fall of 1861, appointed a committee to examine into the accounts of the said Cook, then supposed to be a defaulter to the city, and this committee reported, October 1st, 1861, that the said Cook collected the sum mentioned, belonging to the paving fund, for the year 1860, with other sums belonging to other city funds, and recommended that the city sue said Cook and his bondsmen.
    This recommendation was adopted by the Common Council, and suit commenced November 13th, 1861, by declaration. To this declaration a demurrer was put in on behalf of the defendants, January 2d, 1862. No further steps had been taken in the said suit- up to the time this present suit was commenced.
    It is stipulated by and between the said parties, that upon the foregoing facts and following, the said Circuit Court shall determine the questions of difference between them in this cause, and shall render judgment therein, according as the rights of the said parties in law may appear, in the same manner as if the facts aforesaid were proven upon the trial of said issue.
    It is further stipulated between the said parties, that, the charter and ordinances of the said city of Detroit may be used by either party on the hearing of this cause, without proof, so far as the same shall be admissible, and that portions given below, of the contract for said paving, between plaintiffs and defendants, may be read as part of the evidence in this cause on the ■ trial.
    It is also admitted that the cause above mentioned, against Cook and his sureties, is on the docket, and duly noticed for hearing at the present term of this Court. And that the plaintiffs have demanded the amount due them in the manner required by law and the terms of said contract.
    Gray & O’elynn, Attorneys for Defendant.

    Walker & Kent, Attorneys for Plaintiffs.

    The contract referred to in the foregoing is dated August 18th, I860. The parties of the first part contract to do certain paving for the party of the second part. There are the following clauses.
    “ Payments for said work will be made from the proceeds of special assessments, made for ' that purpose upon each block paved, and not otherwise. And it is expressly understood and agreed, by and between the par ties to this contract, that the parties of the first part shall not receive or demand payment for said work, until money for the payment of the same shall have been collected by the city collector, or such other person as shall be appointed by the Common Council for that purpose, and actually paid into the city treasury upon the special assessment rolls aforesaid. The said party of the second part undertaking only to use reasonable care and dispatch, in the preparation and collection of said special assessments, and the payment of the money proceeds thereof after collection and upon demand of the said parties of the first part.’’
    On this case the Circuit Court rendered judgment for defendant.

      Walker <& Went, for plaintiff:
    1. The general character of the contract entered into between the city and plaintiffs is clearly set forth in
      Beard v. The City of Brooklyn, 31 Barb. 143. The liability of the city is special. It promised to pay for .the paving, not generally, but only in a particular way. Its duty was to assess, collect, and pay over the taxes raised for the special purpose of paying for the paving done. It was bound to use reasonable care and diligence in doing this work. For the absence of this reasonable care in any of its agents, it is responsible. If responsible at all, if the contract be in any way binding, it must be responsible for its agents, since being a corporation it can act only through agents: — Story on Agency, § 16.
    2. Cook, the city collector, was the agent of the city in collecting the paving tax.
    The city agreed by the terms of the contract to collect the money which was to pay for the paving. It could be collected only through an agent, and the intention must have been to collect it through the city collector, who must therefore be the agent of the city in the matter.
    He cannot be considered the agent of the contractors. They had no control over him. He was in no way responsible to them. There was not the slightest legal connection between them.
    Neither can the city collector be regarded as an independent public officer, according to Lorillard v. Town of Monroe, 11 N. Y. 392. He is wholly the creature of the corporation.
    In Massachusetts, illegal taxes that have been collected can be recovered of the town or city authorizing the collection, without showing that the money has been paid into the treasury of the corporation: — 1 Allen, 319; 6 Gray, 131; 21 Pick. 64.

    3. If Cook was the agent of the city, then clearly, when he collected the money the city collected it. Payment to an authorized agent is, in all its legal consequences, the same as payment to the principal.
    The money thus received was collected to pay the plaintiffs. The tax was assessed for this purpose. The city had no authority to receive the money, except for ‘this.
    The want of payment cannot be excused on the ground that the city has lost the money through the default of the collector. For all misfeasances'of its agent, the city'is liable: — Story on Agency, § 452. They are legally its misfeasances.
    Two clauses of the contract will be urged against the views that have been presented.
    The first is, “ Payments for said work will be made from the proceeds of special assessments made for that purpose, upon each block paved, and not otherwise.”
    To this, we say, that it is for the proceeds of special assessments made as provided, that we sue. That the ■city has lost these proceeds through the carelessness of its agent; that is, through its own carelessness, can be no answer.
    The second clause is, “And it is expressly understood and agreed by and between the parties to this contract, that the parties of the first part shall not receive or demand payment for- said work, until money for the payment of the same shall have been collected by the city collector, or such other person as shall be appointed by the Common Council for that purpose, and actually paid into the city treasury upon the special assessment rolls aforesaid.”
    We think the true view of this is: It was inserted merely to fix, as the time when the contractors would become entitled to their pay, the point when the money Would, in the ordinary course, be received into the city treasury.
    The city would not agree to pay it as soon as collected, because the collector is not obliged to make a return as soon as he has collected any 'money. His warrant gives him a certain number of days before he is obliged to report and pay over the amount collected.
    The city promised to pay the contractors as soon as the money was received into the treasury, where the proper officer could pay it, just as an administrator may promise to pay money out of an estate when collected.
    We do not think it can be successfully maintained that the clause in question should be interpreted to make the contractors liable for the default of the city collector.
    That such was not the intention is conclusively shown by the fact, that the city undertook “to use reasonable care and dispatch in the preparation and collection of said special assessment, and the payment of the money proceeds thereof after collection.”
    The “ reasonable care and dispatch ’’ the city promised must in part be that of the collector. He was to collect the money, and if any care was to be used in the collection, it must be his care.

      4. If it were admitted that the city is not responsible for Cook’s default, it was bound to use reasonable diligence in prosecuting his sureties. This it has not done: — 31 Barb. 152; 1 Metc. (Ky.) 339.

      W- Gray for the city :
    Defendant claims there is no liability under the contract, as the money has not been paid into the treasury. The action can be maintained only for negligence in causing the money to be collected and paid over. Whether there was such negligence or not, is a question of fact passed upon by the Court below, upon the evidence, and the conclusion come to cannot be reviewed. But even if it could be, the finding was correct. The duty of defendant is specially limited to “ use reasonable care and dispatch in the preparation and collection of the assessments,” etc. All this has been done. But is was claimed the suit on the collector’s bond was not vigorously prosecuted.
    This is no proof of negligence on the part of defendant. It could not prosecute the suit. It could only place it in the charge of a suitable and competent attorney, and leave its management and conduct to him. There is no evidence that the attorney was not a suitable one; no evidence that the delay in bringing the cause to a. hearing arose from negligence; no evidence as to the nature of the demurrer or extent of preparation necessary.
    The extremest duty of the city was performed by placing the claim in the hands of a proper agent for suit. It could not be expected to attend the courts, or ■even understand what might or should be done. Its attention was not called to any undue delay by plaintiffs, or any other person.
    The attorney of the corporation is elected, not_ appointed, to defend and prosecute all suits by or against the ■corporation. And the corporation are not liable for his neglect: — 1 Hill, 545, 550.

      Aliter, if the duty is imposed absolutely upon the corporation as such: — Ibid; Onderdonk v. Brooklyn, 31 Barb. 506-7.
    The case of Beard v. Brooklyn, 31 Barb. 143, is relied upon — : but the negligence there complained of was the negligence of the council. No warrant was issued.
    The plaintiff in this case declares only upon the common counts. If there is any case against the city, it is one of a special action on the case for negligence: — 23 Wend. 458-60; 4 Denio, 520-25; 31 Barb. 148-9, 153.
    We also claim that the proper remedy is by mandamus:— 23 Wend. 458.
    This is more particularly applicable under the charter ■of the city of Detroit. All the revenues of the city are divided into separate funds. Street paving fund is one. No contract shall be let, paid, or contracted to be paid foi', save out of the proceeds of the assessment' levied for that purpose. Charter, p. 89, § 11.
    Under this provision, the city cannot pay till the assessment is collected and paid in. Contracting parties are bound by this, and their only remedy is by mandamus to compel the collection. The Court will not adjudge that the city must do an illegal act, i. e., pay this out of-some other fund. The general fund can not be touched to pay what is provided for by a special fund.
   Campbell J.:

This case comes up for the review of a judgment, rendered by the Wayne Circuit Court, upon an agreed state ment of facts.

Plaintiffs agreed with the city of Detroit to do certain paving. The contract contained the following clauses* “ Payments for said work will be made from the proceeds of special assessments, made for that purpose upon each block paved, and not otherwise. And it is expressly understood and agreed, by and between the parties to this contract, that the parties of the first part shall not receive Or demand payment for said work, until money for the-payment of the same shall have been collected by the tity collector, or such other person as shall be appointed by the Common Council for that purpose, and actually paid' into the city treasury upon the special assessment rolls aforesaid. The said party of the second part undertakes only to use reasonable care and dispatch, in the preparation and collection of said special assessments, and the payment of the money proceeds thereof after collection, and upon, demand of the said parties of the first part.’’

Assessments were duly made, and placed in the hands of the Collector, who collected $1,761.43, and failed to pay it over. October 1st, 1861, a committee of the council reported him as a defaulter, and. suit Avas brought on his bonds November 18th, 1861. A demurrer was put in to the declaration January 2d, 1862. No further steps had been taken when the present suit was commenced) May, 1863.

The first question that' arises, is, whether the city is liable directly on the contract, the money having been received by the collector.

The charter of the city provides that no public work shall be contracted for or commenced until an assessment has been levied to defray the expense, and no such work shall be paid or contracted to be paid for, except out of the proceeds of the tax or assessment thus levied. P. 89, § 11, City Charter. The treasurer is required to have custody of all moneys, and keep each fund separate, and pay no warrant against any fund unless he has money belonging to it. And moneys can only be paid upon a warrant specifying the particular fund on which it is drawn. P. 28, § 10.

It is manifest from these, and other clauses of a similar purport, that the city corporation has no power to make itself responsible for the price of any public work. Such work can only be paid for by funds actually in the hands of the city treasurer, provided for the specific purpose. The contract recognizes this, and expressly provides that the contractors shall receive no payment until the money shall not only have. been collected, but actually paid into the treasury. And it further provides, that the city shall only be bound to use reasonable care and dispatch, in the collection and payment. The contractors, in other words, recognizing the ordinary method provided by law for raising the fund, agree to look to that, and to that only. We are clearly of opinion that the city was not, under the agreement, bound to account for the money, until placed in the hands of the treasurer.

But it is claimed that there is a liability for neglecting to enforce with diligence the official bond of the collector, to compel a restoration of the money received by' him and not accounted for. Waiving the question whether, under the common counts in assumpsit, such a cause of action can .be supported, and the further question when mandamus will lie, we think no such neglect is made out. The case agreed upon finds that the city commenced suit, that the declaration was demurred to, and that no further steps have been taken. As the law requires suits to be under the charge of certain officers designated, there can be no negligence in putting the case in their hands. Iiow far the city could then go in expediting matters, or in remedying delays in the course of the suit, is not a question of law, but must depend upon some showing; and if there has been any default or neglect, it must be agreed upon, or else proven by evidence. The case before us is one in which the parties, waiving the production of any evidence, have declared what facts are to be assumed as true. No fact not set forth in the case can be thus taken. It was claimed on the argument that this agreed case is open to any inferences of fact which might be allowed to be drawn from evidence, and that negligence might be so inferred. We are not prepared to hold that, from the simple facts before us, if shown by proof in the usual way, any such inference would be justifiable. But the point is not material, for we are of opinion that such an agreed case is equivalent to a finding of facts by a court, or the special verdict of a jury, in- which every fact necessary to a recovery must be expressly found. It could never have been the intent of the statute to provide expressly for a mere s^ulation concerning evidence, which should allow the Court to draw inferences from inconclusive facts, without the power of removing doubts by further "proof. Still less could it have designed to forbid a jury — (which is the most appropriate body to draw inferences of fact) — from, determining what facts are to be inferred from the proof, when the right of trial by jury has been so jealously preserved. The refusal of a jury, and the provisions requiring the Circuit Court to give judgment on the case agreed upon, and the provisions allowing the Supreme Court, without any assignment of error, to correct any alleged errors in the judgment below, all point to the same conclusion, and negative the idea that the facts agreed upon can be treated in any other way than as a special finding. See Comp. L. §§ 3421, 4346.

We think the judgment below- should be affirmed, with costs.

Manning and Cheistiancy JJ. concurred.

Martin Ch. J. did not sit in this case.


source: Caselaw Access Project

author: Christiancy J.:

license: Public Domain

text:
    Charles G. Rowe v. James G. Wright.

      Parol evidence to show terms of sale where a written instrument exijts. — An instrument in the following form:
    “ J. G. W., bought of C. G. B.,
    1862, March 24, 1 frame building,” &o.
    “Beceived payment, $419, C, G. B.,” is not conclusive of the terms and conditions of the sale, and does not exclude parol evidence to show that the property mentioned was not to be delivered till paid for in the manner verbally agreed upon at the time of sale.

      Heard April 12th and 13th.

      Decided April 19th.

    Error to Calhoun Circuit.
    The action was replevin. Defendant claimed the property under an instrument in the following form:
    “ James G-. Wright, bought of Charles G. Rowe; 1862, March 24, 1 frame building, . . . $300
    1 marble slab, (&c., &c.)
    Received payment, $419 Charles G. Rowe.”
    The plaintiff gave evidence tending to show that this instrument was executed while he was in possession of the property, and upon the agreement and express understanding that he should keep possession of the property until the defendant should assume three certain debts owing by the plaintiff’s father, amounting in the aggregate to $383 or thereabouts, and that defendant had assumed or paid but one of them.
    The Circuit Judge charged the jury, that the bill of sale, in the absence of any testimony to impair its effect, would have shown a transfer of the title, as it' imported a sale of plaintiff’s interest. That the plaintiff had urged that this did not embody all the arrangements, and that it was understood that neither the paper nor the property was to be delivered until something else should be done, viz: the assumption of certain debts by Wright. That it was competent for plaintiff to show what the consideration was, but not to contradict the legal effect of the instrument. That as it was not pretended there was any fraud, that by some prior or cotemporaneous verbal understanding, the plaintiff was not authorized to show that the property was not to be delivered till the happening of some event, as this would be inconsistent with the legal effect of the transfer of the instrument in writing, which was delivered as the evidence. To this charge the plaintiff excepted.
    The defendant recovered judgment in the court below.

      W. H. Brown, for plaintiff in error:
    A receipted bill of parcels need not be produced to prove a sale; parol evidence is competent, on the ground that such paper generally amounts to nothing more than a receipt for the price: — 2 Denio, 638; 7 Cow. 334; 8 Pick. 552; 5 Johns. 72. Nor does a bill of sale embody the preliminaries or the essential terms of the contract in such a way as to exclude parol evidence:- Picard v. McCormick, 11 Mich. 76.

      C. I. Walker, for defendant in error:
    The rule excluding parol evidence to contradict or vary the terms of a written instrument is applicable to bills of sale, unless there is fraud in the case: — 2 Stark. Ev. 6 Am. Ed. 550; 2 Phil. Ev. by Edwards, 667; 9 Met. 87; 3 T. R. 413; 1 Johns. 414; 9 Vt. 285; 15 Ala. 317; 12 Met. 353; 1 Wend. 432; 1 Dev. & Bat. 250; 24 Vt. 55; 29 Ala. 283; 3 Camp. 426. Picard v. McCormick, 11 Mich. 76, was a case of fraud.
   Christiancy J.:

We think the Court below erred in holding the written instrument in question conclusive of the ternas and conditions of the sale, and in excluding from the jury the verbal evidence tending to show that the property was not to be delivered till paid for in the manner verbally agreed upon at the time of the sale.

The written instrument was rather a bill of parcels than a bill of sale — little if anything more in substance than a receipt for the price, and subject to the same rules as to the admission of verbal evidence to vary, contradict or explain it. It does not of itself purport to be a conveyance or contract, but is more in the nature of a mere acknowledgment of facts which had already occurred without its aid. It was therefore as much open to contradiction or explanation by verbal testimony, as if the same facts had been proved by verbal testimony:— Tobey v. Barber, 5 Johns. 68; Southwick v. Hayden, 7 Cow. 334; Blood v. Harrington, 8 Pick. 552; Dunn v. Hewitt, 2 Denio, 637; 1 Phil. Ev. by Cowen, Hill and Edwards, p. 587, note 171; Ibid. vol. 2 p. 672, note 494.

In Hazard v. Boring, 10 Cush. 267, the bill of parcels was precisely the same, both in form and substance, as that in the present case. The plaintiffs offered verbal-evidence to prove that the transfer was a pledge and not an absolute sale, and that the defendant at the time orally agreed to return the goods upon being paid the amount advanced and certain charges. The Court say, “The rule that parol evidence is not admissible to vary, explain or control a written contract, is not applicable to mere hills of parcels made in the usual form, in which nothing appears but the names of the vendor and vendee, the articles purchased, prices affixed, and a receipt for payment. These form an exception to the general rule of evidence, being informal documents intended only to specify prices, quantities and receipt of payment, and not designed or intended to set out the terms and conditions of a contract of bargain and sale. They are in the nature of receipts, and always open to evidence which proves the real terms upon which the agreement of sale was made.”

In this view of the law, we entirely concur. We think, therefore, the Court should have permitted the jury to take into consideration all the evidence tending to show the real nature of the whole transaction. The judgment must be reversed, with costs, and a new trial granted.

The other Justices concurred.


author: Manning J.:

text:
    Joseph Gard v. James E. Stevens.

      Guaranty, when continuing. — TIio following was lield not to be a continuing guaranty, but to be limited to a single purchase or transaction: “St. Joseph, Sept. 18th, 1858. Joseph G-ard, Dear Sir: If you will let the bearer have what leather he wants, and charge the same to himself, I will see that you have your pay in a reasonable length of time. J. E. Stevens."

      Guaranty : application of payments. — Held further, that the first moneys after-wards received by the creditor on the debtor’s general account, should be applied in payment of the leather sold on the guaranty.

      Practice : Oases made. — Where a case is made after judgment in the Circuit Court for a review on both the law and the facts, it is presumed to contain, all of the evidence, unless there is something on the face of the case itself indicating • the contrary.

      Heard April 6th, and 7th.

      Decided April 19th.

      Case made after judgment, from Berrien Circuit. The facts sufficiently appear by the opinion.

      G. I Walker, for plaintiff:
    1. The case does not show that all the evidence that was given on the trial is embodied therein, and this must be affirmatively shown, or no questions of fact can be considered:— King v. Moore, 10 Mich. 544; Gaines v. Betts, 2 Doug. 100.
    2. As to the proper rules, applicable to the interpretation of guaranties, courts have greatly differed. The decisions may, perhaps, be classified as follows:
    1st. Those that hold that guaranties are to be construed with great strictness, and in favor of the guarantor, the contract being to pay the debt of another, and not his own: — 2 Pars. on Cont. 21, note; 1 Cromp. & Mees. 48; 3 B. & Ald. 593.
    2d. Those that hold that, inasmuch as guaranties are usually in the words selected by the guarantor, upon which the creditor has acted, they are to be taken as strongly against the guarantor as the words will admit: —12 East, 227; 6 M. & W. 606; 12 Wheat. 518; 7 Pet. 122; 5 Conn. 151.
    3d. Those that hold that that effect shall be given to the instrument, which will best accord with the intention of the parties, as manifested by its terms, taken in connection with the subject matter and the surrounding circumstances, neither enlarging the words beyond- their natural import to favor the creditor, nor restricting them to aid the guarantor: — 2 Pars. on Cont. 21, note; 22 Pick. 228 ; 17 Wend. 424; 24 Me. 64; 3 Kern. 232.
    We think this last the better rule. Still the application of it is not without its difficulties, for often a guaranty is so ambiguously worded that it is capable of two fair interpretations. In such case the rule is well expressed by Judge Story, that, where the creditor has advanced his money on the faith of the interpretation most favorable to his rights, that interpretation will prevail in his avor; for it does not lie in the mouth of the guarantor to say that he may, without peril, scatter ambiguous words, by which the other party is misled to his injury: —2 How. 450; 2 Camp. 413; 1 Pars. on Cont. 508, note.

    Applying these two last rules of interpretation to this contract as viewed in the light of surrounding circumstances, we think there can be no question as to its proper construction.
    It is quite clear, that if there had been a limitation as to the amount for which the defendant became guarantor, this would, under the authorities, be 'held a continuing guaranty. In other words, leather might have been delivered thereon from time to time: — 1 Pars. on Cont. 508, notes; 3 Camp. 220; 12 East, 227; 5 Conn. 149.
    There are two cases, which, if law, seem to establish the position that where the guaranty is unlimited as to amount, it will be construed as limited in its effect to a single transaction: — Rogers v. Warner, 8 Johns. 119 ; Whitney v. Groot, 24 Wend. 84.
    The case of Rogers v. Warner was well decided upon another ground. It was'a. '■'■Per Curiam” decision, and seems to have been little considered.
    Whitney v. Groot followed that decision, but the Chief Justice especially relied upon the vicious rule of strict construction as applicable to guaranties.
    The reasoning suggested, rather than adopted, in the 8 Johns., that because the guaranty is unlimited in amount, it is therefore to be limited to a single transaction, is too absurd to need refutation. The guarantor, by such an unlimited guaranty, expresses the highest possible confi~ deuce in the person whose debt or purchases he thus guarantees. And that unlimited confidence, would, of itself, lead the creditor to give a liberal interpretation to the instrument.
    These cases in New York seem to stand alone, and are at variance with Allen v. Pike, 3 Cush. 238, and with all proper rules of interpretation.

      G. V. W. lothrop for defendant:
    The guaranty was not continuous. It was terminated with the first delivery: — Rogers v. Warner, 8 Johns, 119; Whitney v. Groot, 24 Wend. 84; Fellows v. Prentiss, 3 Denio, 512; White v. Reed, 15 Conn. 457; Cremer v. Higginson, 1 Mason, 323.
    Courts have differed widely as to the rules of construction to be applied to guaranties. Which of these rules is best sustained, either by reason or authority, seems immaterial in this case. By no fair construction, I think, can an intention be deduced that Stevens intended to have a running account opened. There are no words which indicate that new credits were to be given from time to time. The natural and obvious meaning is, “ Give Gates what he now wants, and I will pay you if he don’t.”
    If the guaranty was not continuous, then Stevens was liable only for the first purchase. This was paid; for the payments made by Gates exceed the amount of the first purchase, and the law will apply these payments to extinguish the first items of the account, especially in favor of a surety: — 2 Pars. on Cont. 145; 1 Am. Lead. Cases, 298-9 ; 10 Conn. 183.
   Manning J.:

The action is assumpsit for the price of leather sold to one Gates, on the following guaranty :

“St. Joseph, Sept. 18, 1858.

Joseph Gaud, Lear Sir:

If you will let the bearer have what leather he wants, and charge the same to himself, I will see that you have your pay in a reasonable length of time. Tours, &c.,

J. E. Stevens.’’

As plaintiff sold leather to Gates at several different times, and for different amounts, the first question is. whether the guaranty is limited as to time. We think it limited to a single purchase or transaction. We must hold this, or that it is unlimited both as to time and amount. Every person is supposed to have some regard to his own interest; and it is not reasonable to presume any man of ordinary prudence would become surety for another without limitation as to time or amount, unless he has done so in express terms, or by clear implication. If the guaranty was limited in express terms, either as to time or amount, but not as to both, it might be said it was the intention of the guarantor to leave it open as to the other, or that a further limitation could not be implied. But where . it contains no express limitation as to either, and there is nothing in the instrument itself from which it can be inferred that it was the intention of the guarantor to leave it open as to both, we think it must be understood as referring to a single transaction. The case of Rogers v. Warner, 8 Johns. 119, and Whitney v. Groot, 24 Wend. 81, we think are correct in principle, and not in conflict with any of the cases cited on the argument by plaintiff’s counsel.

We are further of opinion that the first moneys after-wards received by plaintiff on Gates’s general account should be applied in payment of the leather sold on the guaranty.

It was objected on [the argument that it does not appear from the case that it contains all the evidence. That is, as we understand the objection, that it is not so stated in the case itself. It is not necessary that it should be. When a case is made for review of both law and facts, it is presumed to contain all of the evidence, unless. there is something on the face of the case itself indicating the contrary.

The judgment below must be reversed, and a judgment be entered for defendant, with the costs of both Courts.

Martin Ch. J. and Campbell J. concurred.

Christiancy J. did not sit in this case.


author: Campbell J.:

text:
    Nelson Roberts v. Cyrus Miles and others.

      Effect of answer in chancery as evidence: examination of defendant as a witness• Where an answer in chancery is called for on oath, and the defendant of his own knowledge fully and fairly negatives any allegation of the bill, complainant can have no relief depending upon that allegation, unless the answer is overcome by more than the equally full testimony of one witness.
    But this rule amounts simply to this: that there can he no decree in favor of complainant unless the evidence preponderates in his favor; and that where answer and opposing witness are equally fair and explicit, there can be no such preponderance. •
    If defendant, after having thus answered, is called upon the stand as a witness under the statute, of 1861 (p. 168), and famishes the means of destroying his own answer, and corroborating complainant’s case, his testimony on the oral examination and cross-examination is preferable to his answer.
    Since said statute the defendant’s answer on oath, responsive to the bill, is to be regarded as of the same force only which it would have__were it the defendant’s deposition as a witness.

      Defense precluded by judgment. — Where one is induced to become indorser of a note by the statements of the payee that it is mere matter of form, and he will not he troubled about it, and afterwards suit is brought on the note, and he makes no defense, and judgment is obtained, he is thereafter precluded from claiming that the judgment is not binding upon him.

      Indorser discharged by conduct of holder. — But where, after the judgment, statements to a similar effect were made, under such circumstances as to justify the indorser in believing and acting upon them, and in supposing he was not liable, and he was thereby induced to abstain from securing himself when he might easily have done so, until the maker became insolvent, and an execution was then levied upon his property, it was held that he was entitled to a perpetual injunction.

      Heard January 7th and 8th.

      Decided April 19th.

      Appeal in chancery from St. Clair Circuit. The facts are stated in the opinion.

      Grellin <& Atkinson and A. B. Maynard., for complainant:
    1. The assignment to Miller, as affecting Roberts, is the same as if made to Miles & Co. If he, being a member of the firm, accepts securities for the payment of a debt due to them, but applies them to a different- purpose, Roberts in equity and justice should be discharged.
    2. Putting the claim into judgment does not affect the equitable rights of Roberts to be discharged therefrom: — 2 Lead. Cas. in Eq. 566, 567 and cases cited.

      3. It is well settled that if a creditor surrenders up or releases any sureties of the principal, whether acquired by proceedings instituted against him, br voluntarily placed in his hands, then, to the value of such securities, the surety is discharged. The same result would follow if a wrongful application should be made: — 8 S. & R. 453; 8 Pick. 121; 2 Amer. Lead. Cas. 343.
    Whatever funds came into the hands of Miller, as such assignee, to be ’applied in payment of the individual debts of Bailey and Bancroft to Cyrus Miles & Co., should have been applied equally on their several indebtedness, and no different application could properly be made without the consent of both Bailey and Roberts. Upon every principle of equity and justice, Roberts should be discharged from the judgment, to the extent, at least, of the monies which Miller should have paid thereon.
    4. Roberts evidently placed full confidence in the statement of Miles, that the judgment was satisfied. After that he took no measures for his own protection, though Bailey had then, and for some time afterwards, personal property subject to levy, sufficient to have satisfied the judgment. This, we claim, discharges Roberts, and whether the judgment was paid or not, is of no importance, as the defendants are equitably estopped from disputing its payment: — 9 Met. 511, 517; 21 Pick. 195; 12 Met. 545; 7 Hill, 250; 9 Met. 511.
    5. The $1500 note given by Bailey to Miller, secured by a chattel mortgage on his furniture, was several months after the assignment had been made, and after one of the defendants had repeatedly assured Roberts that they should not look to him, and that the judgment was satisfied. Whether taken to secure the payment of the judgment, •or to aid Bailey in defrauding his creditors, is immaterial, as affecting the rights of Roberts. No one would claim, in a court of equity that a creditor could aid his debtor in covering up his property, in this manner, without discharging the surety. He can not, wilfully, shift the burden of a debt from the property of his principal debtor, and impose it on the surety.

      JL. IS. Chadwick and W. T. Mitchell, for defendants:
    All the material allegations of the bill are distinctly and definitely denied by the answer, and the complainant has failed to meet these denials by sufficient proof. In no case has he met a denial by the testimony of two witnesses; and in points where the complainant’s testimony is ■added to Bailey’s, the defendants have counterbalanced the testimony so as to leave the allegations of the bill unsupported by prepondering testimony.
    When the facts stated in the complainant’s bill are denied in the answer, it is a general principle that they must be proved by two credible witnesses, or one witness and strong corroborating circumstances: — Adams Eq. 21; 6 Johns, 522; Story’s Eq. Juris. § 1528.
    Complainant not having charged that the judgment «ought to be avoided, was obtained by fraud, mistake or surprise, is estopped from proof of such fact. It is then clear that complainant is estopped from going into matters arising before the judgment; and by his default he waived all legal and equitable rights, even had he covered such matter by his bill.
    A court of equity will not enjoin a party from pursuing' a judgment at law, upon any ground which afforded a defense at law, unless he shows some good reason for not making the defense; as that he was prevented by accident* surprise or mistake, or by the fraud of the opposite party, without his own fault or neglect: —13 Vt. 477; 1 Johns. Ch. 465; 1 Johns. Ch. 49.
    Roberts is not released by any act of defendants since the judgment. It is not shown that time was given to Bailey, and complainant has not been deprived of any right of recourse to Bailey, nor has there been any misappropriation of moneys which he was entitled to have applied on the judgment. The proofs in regard to the chattel mortgage are immaterial, as there is no charge in the bill concerning it. The facts stated in a bill in equity constitute the sole ground of relief: — 7 Conn. 496 ; 1 Bland, 236 ; 2 Bland, 45; 2 Ired. Ch. 575; 3 Swanst. 472; 6 Price, 240; 18 Ves. 302; 11 Wheat. 103; 11 Pet. 229; 7 Vt. 229; 15 Vt. 110.
    As indorser, Roberts did not stand in the relation of a surety. There is a broad distinction between them. And to the extent of this distinction, complainant’s allegations are wide of the issue. When the indorser has notice of dishonor, he is bound to pay at once. Mere indulgence or passiveness on the part of the holder can not impair his right. The demand may, at the option of the holder, be enforced against the indorser separately.
   Campbell J.:

The bill in this case was filed to restrain the sale of property under execution.

Defendants hold a judgment against complainant as indorser, he being sued jointly with Mark T. Bailey the maker of a promissory note indorsed for Bailey’s aecommodation, and the judgment being against both, and rendered July 6, 1859.

The facts show that when the note was indorsed, Roberts, who was an illiterate man, was assured by Miles (the partner in a bank consisting of all the defendants) that the indorsement was a mere form, and that complainant should never receive any trouble about it. No defense, however, was interposed in the suit at law.

July 14, 1859, an execution was issued on this judgment, but no attempt appears to have been made to serve it. In August an assignment was made by Bailey and his partner, W. L. Bancroft, to Miller, providing among other things for the payment of all claims held against them or either of them by defendants. Bailey and Bancroft were to be at liberty to draw $1000 for individual purposes.

There was during the season of 1859 a sum of money, which is testified to as $1000 or $1500, held by the bank belonging to Bailey and Bancroft, of which Bailey directed Miles to credit one half on this judgment, which he prom, ised to do, but afterwards credited all upon debts of Bancroft.

After the assignment, and in August, Miles swears he told complainant that the. debt was fully secured by the' assignment, and that he would, or probably would, never be troubled about it. In October, 1859, complainant testifies that Miles told him it was settled by money on hand. Bailey testifies Miles told Roberts it was all got along with.

November 16, 1859, Bailey executed to Miller, without any new consideration, a chattel mortgage for $1500, payable in one year. This does not appear to have been a bona fide transaction, but the mortgage was subsequently claimed by Miles and Miller as security for the judgment. The mortgage was on Bailey’s furniture, which was of its full value. The furniture was afterwards seereted, and Miller claimed under oath that he had. been defrauded by the removal. He held no other claim against Bailey except the judgment.

In March, 1860, an execution having been issued on the judgment, and levied on complainant’s property, Roberts applied to Miles, who released it, saying the execution Was issued against both because the judgment was against both, but that he did not intend to have complainant’s-, property levied on, and that the levy was a mistake of the sheriff.

In October, 1861, the levy sought to be enjoined was made on property belonging to complainant. No application is shown by any one to have ever been made to-complainant for payment. In June, 1861, as appears from Mr. Crellin’s testimony, Miller said to him that he supposed Roberts was not liable. This was while proceedings were going on against Bailey for the fraudulent secretion of the mortgaged chattels, which were then claimed as security for this judgment. Eddison’s testimony is to the-effect that defendants claimed the chattel mortgage as security for this debt.

It is claimed by complainant, as one ground of relief, that time was given by this chattel mortgage, and that this operated as an independent ground of discharge. The objection of the defendant’s counsel to this ground Of relief is well taken. The proofs do not come up to the allegations. It is very clear that the attempt to hold this mortgage as a security for the judgment was an afterthought of defendants, and that it at first was taken by Miller as an assistant to Bailey in putting the property out of the reach of his creditors. But while this specific ground of relief fails, the facts connected with the mortgage are admissible, so far as they tend to explain the other transactions.

The principal ground of relief set up is, that Roberta bas been uniformly assured that no liability would ba enforced against Mm, and under such circumstances as would dissuade him from securing himself against loss, which the evidence shows he might easily have done by means of Bailey’s furniture before it was mortgaged to Miller; and further, that ^ defendants, when they had out an execution, and knew Bailey had ample property to be levied on, did not make any such levy. It is also claimed that, by the receipt of money which was not applied as directed by Bailey, defendants were actually paid or nearly paid.

The bill calling for an answer under oath, defendants denied most of the charges by following verbatim the language of the complainant. The answer was not excepted to, but, in considering its value as a piece of testimony, it is to be observed that the object of a discovery is to be informed touching the entire transaction referred to, and a literal denial which does not deny that the charge may after all be substantially true, is in many cases a mere evasion. Story’s Eq. Pl. § 852; Mitf. Eq. Pl. 309, 310; 2 Dan. Ch. Pr. 833, 834, 835 and notes (Perkins’s Ed). In chancery, as at law, a case is made out by proof of the substance of an allegation, and if such an answer is to be allowed the usual weight, so far as it goes, it cannot fairly be made to extend beyond its strict language.

The proof that after the assignment from Bailey and Bancroft to Miller, Miles informed Roberts that it was settled by money on hand,, is only made by Roberts, and Miles denies it. But Bailey swears Miles told Roberts that '■'■he might rest easy, for that matter of Bailey’s was all got along with.” And Miles when swearing on his ■own behalf admits he may have told him that he would not .be troubled about it.

The real question involved here, is, whether Miles induced Roberts to believe that he was no longer liable on the judgment. Regarding these statements of the three deponents as we should be allowed to in the absence of any technical rules, we could not hesitate in determining that Roberts was so persuaded by Miles, and that Miles meant to give him such an impression. And if we are at liberty to consider the testimony concerning the original indorsement, we should be equally convinced that Roberts was induced by Miles, and not by Bailey, to make the indorsement, and that he had been led to believe that no liability would ever be enforced against him, and was therefore the more easily justified in accepting Miles’s further statements touching his discharge. And if we look to the still subsequent release of his horses when levied on, and the explanation and apology of Miles, it is difficult to imagine how Roberts could have doubted of his own immunity. But we are called upon to' hold that, in spite of the convincing character of this testimony, it must be disregarded [upon fixed rules of equity practice. As this is the first case since our statutes .have been changed in which any question has arisen concerning the supposed arbitrary value of testimony in equity, we deem it proper to consider the matter more fully than we should otherwise feel justified in doing. It is certainly important to learn whether impressions irresistably derived from the entire body of testimony lawfully in the case, can be disregarded upon any doctrine of equity procedure.

The theory which is supposed to prevent the establishment of any claim to relief in this case, is that an answer, when responsive to a bill, can only be overcome by two witnesses, or by one witness and strong corroborating circumstances. It is suggested that a complainant who has sworn to his bill cannot, by any subsequent testimony, add to its weight, and that Miles, having answered by an unqualified denial, is not overcome by Bailey’s testimony, or any circumstances otherwise appearing.

A bill in chancery is never evidence in favor of complainant, whether sworn or unsworn. The oath of complainant verifying it is only needed where required by some statute or rule of practice, and can then only avail in obtaining an injunction or other preliminary relief. It is no evidence on the hearing, unless confessed or admitted. Roberts when placed on the stand as a witness gave'his testimony solely in accordance with the statute of 1861, which provides that — with some exceptions — no person shall.be excluded as a witness because he is a party: — L. 1861, p. 168. Being then sworn as a witness, he is to receive such credence as under all the circumstances he appears fairly entitled to. And- the same rule must apply to the defendants when placed on the stand. They may be lawfully called by either party, and examined like other witnesses. And the somewhat peculiar question is presented in this case, whether a defendant’s answer can serve to counterbalance in his own behalf his own testimony on the stand, so as to neutralize or overcome the latter so far as it appears to deviate from, the former. For there is no doubt but that, in the case before us, the defendants’gdepositions are much more favorable to the complainant than their answer. When it is remembered that a defendant from whom discovery is demanded is, in giving it, a mere witness, to whose statements any extraordinary credit is only given because complainant has seen fit to produce him as reliable, the absurdity of giving to one portion of his testimony an arbitrary preference over another, and still more, a preference in his own favor, is too manifest to need argument. A brief-reference to the rules concerning answers in chancery will show that no such consequences can be legitimately drawn from them.

At the common law a party could not be a witness, and could not discredit — (although he might contradict) — any witness whom he might call, unless that witness was one the law compelled him to produce. In equity he could never, after issue joined, examine as a witness any defendant against whom he desired a decree. But he might require of a defendant in his answer a full response to any allegation in the bill, and where a defendant of his own knowledge fully and fairly negatived any allegation, complainant could obtain no relief depending upon that allegation, unless the answer was overcome by more than the equally full testimony of one witness. This is the extent of the rule; and it is based on the theory that a complainant seeking relief has always the burden of proving that he is entitled to the relief prayed, and that if there is nothing presented on his behalf but the conflicting statements of witnesses who, being of equal credit, neutralize each other, the case stands without proof, and the Court cannot act. See 2 Dan. Ch. Pr. 983 (Perkins’s Ed.) for a concise statement of the rule. Accordingly, if the witness contradicting the answer is corroborated by any further proof or circumstances, the Court may then decree according to the preponderance of evidence in favor of the complainant. In other words, the rule amounts simply to this, that a decree can never be made in favor of a complainant unless the evidence preponder" ates in his favor; and that where answer and opposing Witness are equally full, fair and explicit, there can be no such preponderance. See 2 Dan. Ch. Pr. 985. If, therefore, a defendant on the stand furnishes the means of destroying his own answer, and corroborating complainant’s case, his testimony is preferable to his answer, for the same reason which makes any oral examination and cross examination more favorable for eliciting the truth than a statement where the affiant is not pressed to answer questions^ too rapidly to enable him to deliberate how he can best shape his response to secure his own ends. No one who desires to sift a witness would ordinarily prefer a discovery to an examination on the stand; but under our present system, where both may be resorted to, the choice is not very important. Mr. Headlam is of opinion that now the whole force of the old rule is done away:-2 Headlam’s Dan. Ch. Pr. 3d ed. p. 676. He remarks “The-defendant is now, as we have seen, enabled to obtain the benefit of his own testimony, and the Court will probably not be bound by any previous decisions in balancing his testimony against that of a witness.” This old practice has often been misunderstood and misapplied, and since the statute has removed the only reason which ever-made a discovery by answer necessary, we think there is no longer any occasion for giving to the evidence of a. witness in one shape any more force than it would have, in another. Strictly speaking, the old rule, when fairly carried out, may not have done so; but it is not to be denied that its existence has led practically, in many cases, to arbitrary and improper conclusions. We are therefore of opinion that an answer in chancery responsive to a bill is now to be regarded as of the same force which it would have were it the defendant’s deposition as a. witness.

The question then arises, how far the conduct of Miles, as we find it shown by the proofs, precludes defendants, from enforcing their claim against Roberts. Inasmuch as he appears to have been the active man in all the transactions with Roberts, no doubt can arise concerning the responsibility of all the defendants for his acts. Nor is there any legal foundation for any claim that Roberts is not entitled to all the rights of suretyship. Miles knew him to be an accommodation indorser, and had no right,, therefore, after judgment or before, to interfere to his prejudice. By not defending the suit at law, Roberts is precluded from claiming that the judgment was not binding when rendered. But so far as past transactions tended to explain subsequent ones, and to throw him off his guard, they are not only admissible in evidence but very significant. Having been assured in the outset that he Would never be troubled, it is evident he always acted on that idea,' and when after the judgment he was assured that the whole matter was arranged or settled, and that he would never be troubled about it, he was justified in believing the statement, and acting upon it. The whole course of Miles was such as to induce any man to believe that no liability was claimed to exist against him. And the statement that money was in hand to pay it— statement which we are satisfied was made in fact, or in :such terms as conveyed that idea to Roberts — would naturally put him at ease completely, and prevent him from taking any measures to protect himself.

It is claimed, however, that it does not appear that Roberts was prevented by this course ■ of Miles from obtaining security; and that he states himself that he never applied to Bailey except on behalf of defendants. He explains, however, that the reason he did not apply (for security was because he did not consider himself liable. Where a party abstains from doing what all prudent men are likely to do for their own protection, and where an adequate motive appears for so abstaining, the inference is very strong that the inaction was caused by the knotive. The case shows that security might easily have been enforced, and we must conclude, especially when we have direct evidence of the reason, that it was not •demanded because Miles had induced Roberts to think it was not necessary.

Leaving out of view then all the questions concerning the actual extinguishment of the claim by payment, or by giving time, or other unauthorized action, we think Roberts entitled to relief on the ground that, by persuading him that he was not liable and would not be pursued, the defendants actually induced him to abstain from securing himself, when he might easily have done it, and when it has since become impossible.

We do not base our decision on the ground that Baiiey’s property has been disposed of or covered up by the agency of any of the defendants, as the case made by tho bill is not completely adequate to sustain independent relief for this cause. But we find nothing in the case, whether properly or improperly introduced, which can diminish the equities which are alleged and proved.

The decree below, enjoining further proceedings against. Roberts, must be affirmed, with costs. '

The other Justices concurred.


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    John Beard v. Jedediah Spalding.

      Practice: trial in Circuit Court after reference to an auditor. — Where a cause haa been referred by the Circuit Court to an auditor, under §4107 of the Compiled Laws, depositions which have been taken by the auditor, and returned into Court with his report, but not attached to or forming a part of it, can not be used as evidence on the trial of the cause in the Circuit Court.

      Heard April 13th.

      Decided April 19th.

    Error to St. Clair Circuit. The case is stated in the. opinion.

      TV. T. Mitchell and C. I. Walker, for plaintiff in error.

      Conger & Harris and A. B. Maynard, for defendant, in error,
    referred to 11 Pick. 358; 19 Pick. 96; 5 Met. 373; 4 Met. 40; 8 Met. 434.
   Manning J.:

There are a number of exceptions to the rulings of-the Court, but they all turn on a single point, viz: the right of the parties to use on the trial depositions taken by the auditor and returned into court with his report, but not attached to or forming a part of it. We must, look for a solution of this question to the statute.

Section 4197 of the Compiled Laws, provides that Whenever a cause is at issue, and it shall appear that the trial wiE require the investigation of accounts, or the examination of vouchers, the Court '-may’ appoint one 'or more auditors to hear the parties, and examine their vouchers, and evidence, and to state the account and make report thereof to the Court. The four following sections relate to the swearing of the auditors, the giving of notice to the parties of the time and place of their' meeting, a hearing by all of the auditors and a report by a majority of them, the summoning and swearing of witnesses, discharging the auditors and appointing others, and recommitting the report for revision or further examination. Then comes § 4202, which is in these words: “ The report of the auditors, if there be no legal objection to it, may be used by either party as evidence on the trial before the jury, but it may be impeached and disproved by other evidence produced on the trial by either party.”

It is to be observed that the statute does not require the auditors to take the examination of witnesses in writing, or to keep any note or memorandum of the evidence before them. There is no objection to their doing so, and it is highly proper they should keep minutes of the testimony for their own reference. But such minutes, when kept by them, are a private memorandum to be used by themselves only, and not on the trial of the' cause. The account stated and reported by the auditors, and nothing else, is made evidence by the statute for either party that may see fit to use it on the trial. If neither party think proper to use it, it is not evidence in the cause. And if used, it is not conclusive, and may be disproved by other evidence. It is not evidence of the balance found by the auditors only, but of each item in both sides of the account, any one of which may be disproved on the trial, without affecting the other items in the account, by witnesses who have been examined before the auditors, or any competent evidence. That such is the object of the statute we think too clear to admit of a doubt. And if a like statute in a sister State has been construed by its courts to admit depositions taken by the auditors to be used on the trial, without the assent of the parties — which we do not think is the case — we do not feel bound by such construction.

The Court below erred in admitting the evidence objected to, and the judgment is reversed, with costs, and a new trial ordered.

The other Justices concurred.


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    The Michigan Insurance Company v. Gideon O. Whittemore and others.

      Appeal in Chancery: what a “final order.” — An order of the Circuit Court iu Chancery refusing to set aside a decree for irregularity, is a “final order” from which an appeal may be taken to the Supreme Court.

      Motion to dismiss appeal. — The right of appeal, in such a cose, is a statutory-right ; and the Supreme Court oan not dismiss the appeal on motion, on the ground that the granting of the application made to the Court below was discretionary.
    Heard April 12th.

      Decided April 26th.
    Motion to dismiss an appeal in chancery from the Wayne Circuit.

      G. V. JST. Lothrop and S. I). Miller, for the motion.

      A. JB. Maynard and G. I. Walker, contra.
   Manning J.:

This is a motion to dismiss an appeal from an order made after a final decree in the cause, refusing to set aside the decree for irregularity, on the ground that an appeal can not be taken from such an order. The merits-of the motion in the Court below are not now before us. The only question is, whether the order appealed from is-a decree or final order within the meaning of the statute. That it is final, and not interlocutory, or a step towards a further order or decree to be afterwards made in the cause, based in whole or in part upon it, there can be no doubt; and that the action of the Court in refusing it must be- reviewed in this way, if at all, there is no doubt. But it is said that the granting of the motion was discretionary in the Court below. Conceding it to be so, how is this Court to determine that question, without looking into the nature and merits of the motion on which the order appealed from was made? and how can it do this on a motion to dismiss the appeal,- without inquiring into the-merits of the appeal itself? There may be no ground for the appeal, but that does not go to the right to appeal. They are separate questions; and yet they have been argued together as though the right to appeal depended on the merits of the case made on the motion in the Circuit Court. If the appeal was not a statutory right, but had to be allowed by this Court, it would be proper before allowing-it to so far look into the merits -of the case as to see that there was some ground for allowing it. But we can not on a motion to dismiss an appeal, regularly taken, decide on the merits of the case appealed. The motion must therefore be denied.

Christiancy J. concurred. Martin Ch. J. dissented. Campbell J. did not sit in the case.


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    Marie J. Sage v. Alida Riggs and others.

      Attorney feo in mortgage. — A. mortgage empowered the mortgagee in the usual manner to soil, “rendering the surplus moneys, if any there he, to the said [mortgagor], after deducting the costs and charges of such vendue and sale aforesaid, and also $100 as an attorney fee, should any proceedings he taken to foreclose this indenture.” It was held, that this fee was limited to the case of a foreclosure under the power of sale; and could not he recovered on foreclosure in equity.

      Heard April 21st.

      Decided April 26th.
    Appeal in chancery from Wayne Circuit.
    The bill was to foreclose a mortgage executed by two of the defendants to complainant, to secure the payment of a bond for $2500. The mortgage empowered the mortgagee, in the usual manner, on default being made in the condition of the mortgage, to sell and convey the mortgaged premises, and from the proceeds thereof to retain the amount due her, “rendering the surplus moneys, if 'any there be, to tbe said parties of the first part, their heirs, executors or administrators, after deducting the costs and charges of such vendue and sale aforesaid, and also one hundred dollars as an attorney fee, should any proceedings be taken to foreclose this indenture.”
    On a reference to a circuit court commissioner to report the amount due on the bond and mortgage, the complainant claimed that the attorney’s fee of $100 should be included in the sum due; and the commissioner reported accordingly. The Circuit Court, however, disallowed this item, and granted decree for complainant, for the debt only. Complainant appealed.

      H. M. Gheever, for complainant.

      Walker & Kmt, for defendants.
   Manning J.:

The 'error complained of in this decree is the non-allowance of $100 attorney’s fee for foreclosing the mortgage, provided for in the power of sale. It is insisted complainant is entitled to the $100, whether the foreclosure is in chancery, or at law by advertisement and sale under the power. It is not in a separate clause of the mortgage, standing by itself and providing a fee for foreclosing the mortgage generally, but in the power of sale of which it is a part. The language of the power is, “rendering the surplus moneys, if any there be, to the parties of the first part, their heirs, executors or administrators, after deducting the costs and charges .of such vendue and sale aforesaid, and also one hundred dollars as an attorney fee, should any proceedings be taken to foreclose this indenture.” The meaning of the- words, “ should any proceedings be taken to foreclose this indenture/’ relied on by appellant, is -easier asked than answered — nor is it necessary to decide. For they must be understood and construed with reference to the subject matter- of the power; that is, a fore, closure by advertisement and sale of the mortgaged premises,' and not a foreclosure in equity, of which no mention is made in the power or in any part of the mortgage. I lay no stress on the word attorney, as it is not'necessary to employ one to execute the power. The decree must be affirmed, with costs.

The other Justices concurred.


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    Curtis Emerson v. Samuel T. Atwater and others.

      Defendant concluded by statements in his answer. — Bill to redeem lands from a deed absolute in form, but alleged to have been given to secure the payment of indebtedness from complainant to defendant, tlie grantee. Defendant answered under oatli — though, oath was waived — averring that at the date of the deed, complainant was indebted to him in the sum of $80,000, and that the deed was made to him in satisfaction of this demand, and not as security. On a hearing on pleadings and proofs, the deed was adjudged to be a mortgage, and a reference was ordered to a commissioner to take an account between the parties, and report the amount due. It was held, that defendant was precluded by his answer from showing on the reference that a larger sum than the $30,000 was due him from complainant at the date of the deed.

      If the amount of the indebtedness was incorrectly stated in the answer by mistake» defendant should have applied to the Court, showing how it occurred, and asking leave to amend the answer in that particular.

      When answer conclusive on other defendants. — The assignee of said grantee inter* posed the plea of a hona fide purchase without notice, which plea, on the hearing, was found untrue. It was held, that as he was then undefended except by the answer of his grantor, and was entitled to all the benefits of that, so, also, he was concluded by its statements to the same extent as his grantor himself. He, also, was therefore concluded from showing that more than the $30,000 was due.

      Adjusting acco'icnts: annual rests: interest. — Annual rests directed in adjusting accounts between mortgagor and ^mortgagee, and interest computed on eaoh item of the account, where this course was found to be warranted by the prac* tice of the parties.

      Exceptions to the commissioner's report are proper only where the commissioner has come to an erroneous conclusion of law or fact on the evidence before himt touching the reference.
    If a commissioner errs in not calling parties before him, to produce books, papers, &c., the proper remedy of the party deeming himself aggrieved, is to apply to the Court for an order requiring him to do so. The error cannot be corrected by excepting to the report.
    An exception that “ commissioner has credited to complainant the sum of $9,210.3*? for amount defendant has received on sales of lots, and interest thereon to Hay 5, 1860, whereas he should have credited a less sum,” is too indefinite an<j uncertain to admit the raising under it of an objection that the commissioner did not allow to defendant a snm paid to a third person to perfect the title to the lands.

      Porm of decree for redemption from absolute deed. — Where, on bill to redeem, a deed absolute in form is adjudged to be a mortgage, and tbe mortgagee had, before bill filed, conveyed to one of the pother defendants, the decree should direct the amouut due to be paid to the assignee, instead of the mortgagee.
    It is proper, in such a case, to direct a sale of the premises to satisfy the amount due, in default of payment by the time fixed, instead of decreeing a strict foreclosure.

      Heard December 2d, 3d, 4th and 5th, 1862.

      Decided May 3d.

    Appeal in chancery from Saginaw Circuit.
    The principal question in this case was disposed of by a decision of this Court reported in V Mich. 12. By the decree then entered, the case was ordered to be referred to a circuit court commissioner for the county of Saginaw, to take and state an account between tbe parties on a basis then settled. To the commissioner’s report on this reference a large number of exceptions were taken by tbe defendants, the most of which, on the final hearing in the Circuit Court, were overruled, and decree entered that complainant pay to defendant Atwater the amount found clue — about $5,000 — ancl that defendants reconvey. In default of payment a sale in the usual manner in foreclosure cases was ordered, to satisfy the amount and costs.
    Defendants appealed.

      W. L. Webber, S. T. Douglass, and J. L. Talcott [of Buffalo, N. Y.) for defendants.

      J. Moore, G. G. Bates, and G. I. Wglher for complainant.
   Manning J.:

The exceptions are numerous. I shall not notice them all separately. The principal ones are, that the commissioner erred in fixing the indebtedness of complainant at the time the deed was executed at $30,000; in holding the answer of Atwater as to such indebtedness binding on Green; and in crediting complainant, in the account subsequent to May 2lth, 1853, with the lumber shipped to Atwater previous to the execution of the deed, and then in his hands unsold. Most of the other exceptions to the commissioner’s report will be found to turn on one of these.

Pleadings would avail little or nothing if parties were not bound by them. They would be worse than useless, if parties were permitted to allege one thing in them and to prove another on the trial, or at the hearing. Instead of aiding the court and parties in the subsequent investí, gátion, by narrowing the field of controversy, they would serve as a lure to mislead and entrap an adversary. That the evidence must be confined to the issue between the parties, is a rule so well settled as to admit of no controversy. An attempt was made on the argument to take the present case out of this rule. It was said that if Atwater chose to rest the question of mortgage or no mortgage on a statement of indebtedness less in amount than what was due him in fact, he was not bound by such statement in a subsequent reference after the question had been decided against him. I do not think the argument a sound one. I cannot admit that a fact material to the decision of a question, in one stage of a cause, can afterwards be changed or proved to be different when used by the same party in _a ^subsequent stage of the same cause.

The bill was filed to have a deed given by complain* ant to Atwater declared a mortgage. In such cases the pecuniary embarrassment of the grantor, his indebtedness to the grantee, and inadequacy of consideration, are circumstances the Court looks to in determining the true character of the instrument. They were all set forth in the bill. And of the three, inadequacy of consideration is the most important. For without that why declare a deed a mortgage? No good would come of it; and there would be nothing to warrant the inference of undue advantage, always relied on by the Court, and made the basis of its action in this class of cases.

Defendants must be supposed to have known what they had to meet, and to have shaped lt their defense accordingly.

Atwater put in an answer on oath, although an answer on oath was waived by the bill, and Green filed a plea, stating himself to be a bona fide purchaser, without notice of complainant’s equities. On appeal, we declared the deed to be a mortgage, and that Green was not a bona fide purchaser without notice, and directed a reference to ascertain the amount due from complainant to Atwater on the 27th May, 1853, — the date of the deed — and for au account to be taken of all subsequent dealings between the parties. Atwater in his answer to the bill says:

“ This defendant further saith, that at the time of the execution and delivery of the said deed of conveyance by the said Emerson to him, he, the said Emerson, owed him ■thirty thousand dollars, for advances made to him theretofore, and became and was insolvent, and proposed to and did, execute and deliver to this defendant, the said deed of conveyance, in fee simple, in consideration of the said debt — subject to said incumbrances described in said bill of complaint — and that said deed of conveyance was executed and delivered absolutely, without any condition, trust or agreement whatsoever, either express or implied; and that, at the time of the said conveyance, his said debt, together with said incumbrances, far exceeded the whole value of the ,said lands; and that the statement in said bill of complaint, that such deed of conveyance was, or is, subject to any condition, trust or agreement, is wholly untrue.

“That at the time of the execution and delivery of the said deed of conveyance, this defendant held and owned a mortgage upon the said premises, for the first accruing part of his said demand, to the sum of $8,200, executed and delivered to him by the said Emerson — bearing date November 1st, 1850 — to secure to him the payment of the said $8,200 according to its terms (recorded November 5th, 1851, in B of mortgages, on pages 155 and 156), and that, at the time of the execution and delivery of the said deed of conveyance, the said mortgage moneys were wholly unpaid, as well as the balance of the said thirty thousand dollars: and that the said deed of conveyance was executed and delivered to him by the said Emerson in lieu of and as a substitute for the foreclosure of said mortgage, to release his equity of redemption in the said lands.”

Here is a clear and explicit statement on oath of complainant’s indebtedness to Atwater at the time the deed was given. There is no ambiguity in it. He is so particular as to state that a mortgage of $8,200 is a part of it, and that complainant’s “ said debt, together with said incumbrances ’’ (incumbrances on the projDerty due to others) “far exceeds the whole value of the said lands.5' ,Why this last statement if it was considered immaterial by the pleader to the investigation that was about to follow ? And if material, as it certainly is, can we suppose a debt of forty-six thousand dollars and upwards would have been stated in the deed and answer at §30,000 ? We can hardly presume such a mistake possible. And if a mistake, Atwater should have applied to the Court, showing how it occurred, and asking leave to amend his answer, which must be taken as true against him.

But it is insisted by Green’s counsel that if Atwater’s answer is binding on him, Atwater, as to complainant’s indebtedness, Green is not bound by it. The ground of the objection is, that the answer of one defendant is not evidence against a co - defendant. This, as a general rule, is true where the interests of the different defendants are several and not joint. If Atwater had stated in his answer that when Jie conveyed to Green, he, Green, knew that complainant’s deed to him was only intended as security for the payment of the aforesaid §30,000, the answer could not be received as evidence of that fact to disprove the truth of Green’s plea. It would come within the rule referred to. But I do not understand the rule to go further than this; and that where a defendant seeks to get rid of one equity by interposing another, and fails in it, that the evidence that establishes the first equity against his gran» tor is not sufficient to establish it against him also.

The plea admitted the allegations in the bill; and it having been found untrue by the Court on the hearing, Green stood defenseless, except so far as he was protected by the answer of Atwater. He is entitled to all the benefits of Atwater’s defense, but we know of no rule of law or equity giving him the right to claim and repudiate its benefits at the same time, or to claim a part and repudiate a part. Besides, he took the land subject to the equities between complainant and Atwater growing out of the agreement and deed of the 2Yth May, 1853. These equities did not cease, and the relation of the parties was not changed by the conveyance of the land to Green. For complainant and Atwater continued to deal with each other thereafter as before, with the knowledge of Green, and without any objection on his part. And there is no pretence of collusion or combination between them to defraud Green. When this case was before us on the former appeal, we came to the conclusion that the deed to Green was itself a mortgage to indemnify him for past and future advances to Atwater, and that their interests were the same, and that for that reason Atwater could not be a witness to prove the truth of Green’s plea: — 7 Mich. 31, 33.

I think the commissioner was right, therefore, in holding the defendants bound by the statement in Atwater’s answer, that the debt was $30,000 on the 27th May, 1853. But I think he erred in crediting complainant, in the subsequent account made out by him between the parties, with the unsold lumber in Atwater’s hands at that time. The evidence and surrounding circumstances show, pretty clearly, that this lumber must have entered into the adjustment made by the parties of their matters at the time the deed was executed.

Complainant owned a mill and was engaged in the manufacture of lumber. Atwater made advances to him, and received most of the lumber, which he sold and accounted for to complainant. A part was sold by him at Buffalo, where he resided, but the greater part was shipped by him to Albany, where it was sold for him by the persons (to whom it was consigned. There was always more or less lumber unsold in the hands of Atwater and his consignees, on rendering his accounts, subject to be thereafter sold and applied by him in liquidation of any balance that might be due to him. Is the $30,000, stated in Atwater’s answer, the balance of an account subject to be reduced by the sale of lumber then on hand, or is it the amount due Atwater after accounting for the lumber on hand, as well as for what had been sold?

The answer fixes a limit to the indebtedness beyond which defendants cannot be permitted to go. It does not fix the amount of the indebtedness as to complainant. That defendants had to prove. The amount proved by them before the commissioner, including the mortgage of $8,200, which we think was improperly excluded by the commissioner, was $46,284.45, instead of $30,000. If the object of the deed was security for the existing debt, with the lumber on hand to be thereafter accounted for when sold and applied in liquidation, why was not $46,284.45, stated as the consideration in the deed, instead of $30,000 ? We confess our inability to answer this question except in one way, and that is, that the value of the lumber on hand must have been estimated by the parties and deduc. ted to reduce the amount to 30,000. This could be'done with considerable accuracy by the parties, with the experience of the past to guide them. The amount — just $30,000 — the consideration stated in the deed and sum sworn to in the answer' — would seem to indicate an adjustment by the parties of their accounts on some other principle than mathematical certainty, and yet probably sufficiently certain to prevent wrong to either party. But what would seem to be almost conclusive on this point, is, the utter silence of the bill of complaint, which sets up no claim whatever for lumber in Atwater’s hands at the date of the deed. It states various subsequent matters which it claims to set off against the debt; as the sale of the Steam Mill Reserve, the sale of logs and other personal property, and the like, but makes no mention whatever of lumber in the hands of Atwater to be sold and applied by him on the debt. We can .not account for this silence on any other principle than the one we have stated. We can not presume an item of such magnitude was forgotten by complainant, while others of much less importance were remembered; or that it escaped the attention of both himself and solicitor in framing the bill.

In the two accounts made out by the commissioner — one of all dealings between the 'parties prior to giving the deed, and the other of dealings between them, after-wards — the commissioner has charged defendants with much more lumber than the evidence shows was shipped by complainant to Atwater. The views we have expressed render this immaterial as tou the lumber delivered before the deed was given. We mention it here, however, that it may not be said — onfthe supposition that the commissioner’s report is correct as to the amount of lumber charged to defendants — that the value of the lumber in Atwater’s hands would exceed by several thousand dollars the difference between §30,000 and §46,283.45. From the best data furnished by the evidence we think the two would about balance each other.

Two cargoes of lumber,,, were shijjped after the giving of the deed, one to Chicago and the other to Buffalo. The one to Buffalo was shipped by Dorr, from whose testimony it appears that the entire cargo belonged to Atwater, and no part of it to Emerson, it being made up in part of lumber, and some bundles of lath, purchased of Emerson by the bill of sale of the lAth June, 1853. The cargo previously shipped to Chicago it would seem was complainant’s lumber, and should be credited to him, but not the cargo shipped by Dorr to Buffalo, for the reasons we have stated.

Exceptions were taken to the commissioner’s mode of allowing interest. He allows interest on each item from its date, on both sides of the account, without making-rests in the account. Having come to the conclusion that there was a settlement between the parties on the 2'Ith May, 1853, when complainant was found indebted to water in the sum of $30,000 which the deed was intended to secure, we are of opinion that the subsequent transactions between tbe parties, from that time to tbe filing of the bill, were of such a nature — all having reference, on one hand to the extinguishment of the debt, and on the other to advances made to Emerson, or to pay off the prior incumbrances — that the commissioner should have made three annual bests, the last of which would have been the Sith day of May, 1856, a few days after the filing of .the bill, allowing interest only on the balance then found due from that time to the making of the report. This, as well as the allowance of interest on each item in both sides of the account, was warranted by the practice of the parties in settling the lumber account between themselves (for there was a prior indebtedness that never entered into these settlements), when the balance was either carried to the new account to draw interest, or was settled by a note given for the amount, payable presently, or at a future day with interest.

It was also objected to the report, that the commissioner did not call on cither of the parties to produce books, papers or vouchers, relating to the matters referred to him, and did not examine the parties under oath. If the commissioner erred in either of these particulars to the detriment of defendants, they should have applied to the Court below by motion, for an order requiring the commissioner to do what he should have done. This is the practice where proper testimony is refused on a reference. The error can not be corrected by excepting to the report. Exceptions to the report are proper only where the commissioner has come to an erroneous conclusion of law or fact on the evidence before him, touching the reference:— Schwarz v. Sears, Wal. Ch. 19; Ward v. Jewett, Ibid. 45; and see Hoff. Mast. in Ch. 58, 59.

When this cause was before us heretofore, we expressed no opinion as to the Jennison interest, and so stated at the time. It appeared from the papers then before us, that there was such an interest in the property when complainant conveyed to Atwater, who afterwards purchased it. But as nothing was said of it on the argument, we did not take it upon ourselves to decide any question 'that might be made in regard to it. It is now insisted by Green’s counsel, as an objection to the commissioner’s report, that the commissioner did not deduct from the proceeds of lots sold, and with which he charged defendants, an amount equal to the Jennison interest in the .property. The question does not appear to have been made either before the commissioner or in the Court below. It would seem to be now raised for the first time. And it is a sufficient answer to it jin the shape in which it comes, "that .no exception is taken to the report for ?jthe reason stated in the objection. The 43d exception is: “For that the commissioner has credited to complainant the sum of $9,210 37,- for amount Atwater has received on sales of lots and interest thereon to May 5, I860, whereas he should have credited a less sum.” But this exception is too indefinite and uncertain to admit the raising of such an objection under it. It points to nothing. It is aimless. It finds fault with the report, without giving any reason for it, except the common one always given by the vanquished party, viz: that the decision is wrong and that great injustice has been done to him. It is necessary, however, that we should determine it, that this litigation may come to an end. What the Jennison interest is, does not very clearly appear. It is stated by counsel to have been an undivided two-fifty-fifths of the property, exclusive of the mill. On 1st July, 1853, complainant wrote Atwater that he had just finished platting the property, and that he had sold a number of the lots, stating the persons to whom sold and the prices. He then says: “Mr. Jennison, from New York is here, the person who owns a fractional interest in this property. I saw him yesterday, and he is to meet me sure during this week, and agree upon two persons to make a division. If he will sell at a reasonable price, and give liberal time, I will try and' buy his interest.” On 27th August, 1858, Jennison quit claims his interest to Atwater, for $800 — $200 cash, and two notes for $300-each. The notes and cash were sent by Atwater to Jennison’s attorney, through complainant. The purchase, under the circumstances, must be deemed to have been made by Atwater for the benefit of the property, and to facilitate the sale and disposition of it to pay the mortgages-on it, and the debt to Atwater. Atwater’s relations with complainant, and the circumstances under which he acted, were such as not to admit of his purchasing it in his own right. He must however be credited with the $800' he paid for it.

A question was made before the commissioner as to what part of the premises were included in the Steam Mill Reserve sold [to Atwater by complainant. No such question it is said was referred to the commissioner. That, is true; but it came before him incidentally, in inquiring, as he was directed to do, what part of the premises remained unsold and not under contract of sale. This, inquiry was necessary to enable the Court to shape its decree for a reconveyance by defendants. It involved an inquiry into the extent of the Steam Mill Reserve if there, was any question in regard to it, but not otherwise. The commissioner reported as a part of the unsold premises, “blocks Nos. 109, 110, 111 and fractional block No. 112, as shown by a map of the city of Saginaw, dated’ Feb- ■ ruary 1st, 1837. Said blocks being on the middle ground between the Saginaw river and a bayou, or an arm of' the river, by which they are separated from the steam mill and six acres, and the other property.” Saginaw city is on the west side of Saginaw river. ’Why the map of‘ the city was made to extend across the river and include a part of what is now East Saginaw, on the east side- of the river, does not appear; while the evidence shows that that part of the map was never acted .upon or considered of any validity whatever. Complainant, in 1853, soon after the deed to Atwater, and after the sale of the mill property to Mm, caused the property to be platted by one Carleton. Complainant and Atwater were both interested in the making of this plat. It was made under the supervision of complainant, was paid for by Atwater, and was recognized and acted- on for years thereafter by both parties without complaint from either. It must, as a joint act of the parties, be regarded, so far as it goes, as conclusive evidence of what was understood by them to be the mill property. Is the middle ground, then, according to this plat, a part of the mill reserve? We think not. By it the “Steam Mill Reserve” ps bounded northerly by Bristol street, easterly by Washington street, and on the south by the south line of the plat, which is also the south line of the property platted. Westerly is the bayou, and beyond the bayou and between it and Saginaw river is the middle ground. The south line of the plat stops at the bayou. It is not extended westerly across the middle ground. There is nothing, in short, on the face of the plat showing an intention to plat the middle ground at that time. By the Saginaw city map, east of the river, the middle ground is platted, but it forms no part of the mill property. We can not, therefore, say that the middle ground is a part of the mill reserve according to either of these plats. And there is no evidence it was ever used in connection with the mill, except the shore, for fastening a boom for logs to be sawed at the mill. This right, with the right to use the whole of the bayou for a boom, we think, from the evidence in the case, passed as an appurtenance to the mill property, but nothing more.

Exception 85. Three' hundred and twenty-five dollars must be deducted from the $1,400 allowed by the commissioner — that being the amount paid by Atwater to Lyon when the premises were surrendered, less seventy - five dollars rent.

Exception 84 is allowed. The scaling of the Hart logs was before the 17th June, 1853, when they were sold by complainant to Atwater and Durfee.

Exception 58 is also allowed. The 0168.34 for sawing 48,055 feet of logs delivered in 1854, must be struck out. This item was, by mistake, credited to complainant in defendant’s account, from which it was taken by the commissioner. It should have been a credit for 42,023 feet of logs, instead of for sawing. Complainant is credited with sawing- 2,376,906 feet of lumber, all that is claimed by him, without including this item. And defendants must be charged 04.00 instead of 05.56 per thousand for 642,139 feet pine E. logs, delivered at Cass river. They are charged at $4.00 in complainant’s account, and a like amount of logs is credited at 84.00 in defendant’s account. The two áccounts agreeing in quantity and price, we think the commissioner should have credited complainant with them at $4.00 and no more.

As it regards the form of the decree, it should have required the amount due from complainant to be paid to Green instead of Atwater. There is nothing wrong, how. ever, in directing the property to be sold in default of payment. The deed was intended as something more than a mere mortgage to secure what Emerson was owing Atwater. Its purpose was to enable him to sell the property and pay the incumbrances on it, and also the debt due to himself, and the decree, in ordering a sale instead of a foreclosure in default of payment, but carries out the original intention of the parties.

The decree of the Circuit Court is reversed, with costs, and the report of the commissioner is referred back to him, with instructions to make his report conform to the views herein expressed.

Christiancy J. concurred in this opinion. Martin Ch. J. concurred in part, but dissented from some of the conclusions. Campbell J. did not sit, having been of counsel.