author: Grant, J. McGrath, O. J.

text:
    MUTUAL FIRE INSURANCE CO. v. PHOENIX FURNITURE CO.

    1. Judgments — Conolusiveness.
    Judgments and decrees cannot be attacked collaterally because they include items which courts, other than those by whom they were rendered, might hold to be illegal.

      2. Same — Foreign Judgment.
    A judgment of a court of one State, having jurisdiction of the parties and of the subject-matter, is conclusive in the courts of a sister State, the only remedy being by direct proceedings in the original cause.
    3. Corporations — Relation of Stockholders Thereto — Conolusiveness of Judgment.
    Each stockholder or member of a corporation is so far an integral part thereof that, in a suit brought to determine the amount of the indebtedness of the corporation preparatory to an assessment upon the stockholders to pay the same, he is represented through the corporation itself, and bound and concluded by the determination therein. McGrath, C. J., and Long, J., dissenting.
    4. Same — Foreign Judgment.
    Upon the appointment of a receiver for an Illinois mutual fire insurance company in a court of that State, there were turned over to him certain notes given by Michigan policy holders, payable at such times as the directors of the company might order and assess for the losses and expenses of the company. A decree was entered, upon evidence placed before the court, determining the-amount of assets and debts of the company, and the assessment necessary to liquidate said indebtedness, winch, as shown upon the face of the decree, included certain unearned or return premiums, for the payment of which said policy holders, under the decision in Insurance Co. v. Merrill, 101 Mich. 393, were not liable. Held, that' said decree was conclusive upon the policy holders in a suit brought in this State to enforce assessments made by the receiver against them upon said notes. McGrath, G. J., and Long, J., dissenting.

      Error to Kent; Grove, J.
    Submitted January 31, 1895.
    Reargued October 22, 1895.
    Decided December 31, 1895.

      Assumpsit by tbe Mutual Fire Insurance Company of Chicago against the Phoenix Furniture Company to collect an assessment upon certain premium notes. From a judgment for plaintiff, defendant brings error.
    Affirmed.
    The facts are stated in the opinion found in the margin, which was filed May 28, 1895, upon the first submission of the case, but which was withheld from publication pending a rehearing.

      Fletcher & Wanty, for appellant.

      D. J. Schuyler and Mark Norris, for appellee.

       This case, and that of Warner v. Delbridge & Cameron Co., decided by this court July 31, 1896, are reported in 34 L. R. A. 694, 701, together with a note collecting the authorities bearing upon the main question.

        OPINION PILED ON ORIGINAL HEARING.
      McGrath, C. J. The receiver of the Mutual Fire Insurance Company of Chicago, a corporation organized under the statutes of Illinois, brings suit upon certain premium notes, of one of which the following is a copy:
      “Chicago, 111., May 1, 1889.
      “For value received in Policy No. 5739, dated the 1st day of May, 1889, we promise to pay the Mutual Fire Insurance Company the sum of two hundred and forty dollars, by installments, at such time as the directors of said company may order and assess for the losses and expenses of said company, pursuant to its charter and by-laws. It is hereby expressly understood and agreed that this note is not transferable, and that there is no liability beyond the face amount thereof.
      “The secretary is authorized to number and date application and note No. 5739.
      “Phcenix Furniture Co.
      “R. W. Merrill, Treasurer.”
      In October, 1890, the auditor of public accounts of the State of Illinois filed a petition in the circuit court for the county of Cook, in chancery, and procured the appointment of a receiver. After-wards, upon the receiver’s petition, the court determined and decreed the amount of the indebtedness of the company to be §113,125, made up as follows:
      “Upon claims for losses which had been admitted by the company, the sum of §62,379.04; upon like claims in dispute, the sum of §27,886.84; premiums due other insurance companies upon their policies placed by the plaintiff, salaries, sundry expenses, attorneys’ fees, advertising, and taxes, the sum of §2,859.12; unearned premiums on cash policies, estimated at §20,000.”
      The court further found that the probable expenses of the receivership were §25,000; that the assets of the company consisted of premium notes and membership liabilities to the sum of §198,971.14, and other assets valued at §9,125; that the amount necessary to be assessed upon premium notes in order to pay debts and expenses was §129,000; and authorized and directed the receiver to assess upon each of the members of the said plaintiff 65 per cent, of the amount of the premium note and membership liability of such member. In pursuance of such order, the receiver assessed upon the defendant the sum of §692.49.
      The circuit judge for the county of Kent submitted findings setting forth the facts, concluding as follows:

        “I find that all these proceedings, from and including the examination made by the auditor of state into the affairs of the plaintiff company and the filing of the petition for an injunction and a receiver, to and including the final decree that was made, authorizing and directing the assessment aforesaid, were regular, and in accordance with the provisions of the statutes of Illinois, and in accordance with the course of procedure and powers of the court.
      ‘ ‘ I find, as matter of law, that, by the laws of the State of Illinois, the assessment aforesaid is regular and conclusive upon the defendant, and that the proceedings of the circuit court for the county of Cook, in chancery, in case aforesaid, are entitled in this State to receive the same faith and credit as by the laws of the State of Illinois they receive there. It was not necessary by the laws of Illinois that the defendant should have been a party to the proceedings in the circuit court for the county of Cook, in chancery. Being a member of the company proceeded against, the defendant was represented before the court by the company and the officers thereof, and, although not a party individually, is bound by the decree made by that court against the corporation of which it was a member, because the decree is one for the enforcement of a corporate duty neglected by its board of directors; and, being so bound by the laws of Illinois, the defendant is bound thereby in this State.
      “The plaintiff is entitled to recover in this action the amount of the assessment aforesaid, 8692.49, with interest thereon from September 1, 1891, amounting to the sum of 8827.11.”

        Defendant appeals, contending that the findings of fact do not support the conclusions of law.
      It is necessary to consider but one of the questions raised. The decree, upon its face, shows that the assessment included unearned premiums, and claims in dispute, upon which the liability of the company had not been ascertained and determined, and was there-' fore invalid. In Detroit, etc., Ins. Co. v. Merrill, 101 Mich. 393, we held that the maker of such a note could not be held upon an assessment in part for the payment of unearned premiums; nor do we think that he could be held upon “claims in dispute."
      But it is insisted by plaintiff that defendant is concluded as to these matters by the decree of the Illinois court. With respect to any determination affecting the rights of the corporation as such, the happening of the contingency empowering the auditor of the State to proceed, the suspension of the company’s right to continue business, the appointment of a receiver, and the dissolution of the corporation, such determination undoubtedly concludes the defendant, and, inasmuch as the necessity for an assessment grows, in part at least, out of the decree of dissolution, the determination of that question is final. But an assessment against a member stands on the same footing as one made by the board of directors, and is not conclusive upon the person assessed, as a judicial determination.
      In Bangs v. Duckinfield, 18 N. Y. 592, the court say that—
      “The proceedings of the receiver in making an assessment are of no greater force than the same act would have possessed if done by the hoard of directors. It is true that he has made an application to the court, and it has approved of his proposed assessment; * * * but the approval of the court only places his act in the same position as an assessment by the directors would have occupied. .The defendant was not a party to the suit in which the application was made, and had, and could have, no notice of the application. As to him, therefore, in a Ipoint directly involving his supposed liability, the determination of the court approving the assessment is not to be regarded as a judicial decision, concluding him as to the particulars of the assessment.” 2 May, Ins. § 557, and cases cited.
      The liability of the defendant is, by the declaration in this cause, predicated upon the notes in question, and does not, therefore, spring from a statute fixing the liability- of the membership, or imposing a liability upon members in case of the insolvency or default of the corporation. The note sued upon is the contract between the parties, and determines and limits the liability of the defendant.
      We are cited by the plaintiff’s counsel to the case of Great Western Tel. Co. v. Gray, 122 Ill. 630. Defendant in that case was sued upon his subscription to stock for the balance unpaid, and it was held that the validity of the decree appointing the receiver could not be questioned by the stockholder; in other words, that it was unnecessary to make such stockholder a party in the proceeding to wind up the corporation.
      The judgment of the court below is reversed, and judgment entered here for the defendant’s proportion of the other items, with costs of this court to defendant.
      Grant, Montgomery, and Hooker, JJ., concurred. Long, J., did not sit.

   Grant, J.

After a full argument upon the rehearing of this cause, we are satisfied that we were in error in reversing the judgment. The testimony was not returned, and the case is before us on findings of fact and law, to which no exceptions were taken. The sole question, therefore, is, do the facts found support the judgment ?

We held, in Detroit, etc., Ins. Co. v. Merrill, 101 Mich. 393, that the defendants, under such a note, were not liable to an assessment for unearned or return premiums. That case would, of course, control this, unless the decree of the Illinois court is conclusive upon the courts of this State. The Constitution of the United States declares that “full faith and credit shall be given in each State to the public acts, records, and judicial proceedings of every other State.” Article 4, § 1. In the early case of Mills v. Duryee, 7 Cranch, 481, it was held that the decrees and judgments of the courts of one State were conclusive in the courts of sister States. This case has since been uniformly followed. Where a court has jurisdiction of the cause and of the parties, its judgment is conclusive in other courts, and the only remedy is by direct proceeding in the original cause. Hanley v. Donoghue, 116 U. S. 4; Cole v. Cunningham, 133 U. S. 111; Bonesteel v. Todd, 9 Mich. 371. It is conceded that as against the corporation itself, and the directors and officers thereof, the rule applies. It is, however, contended that it does not apply to a stockholder of such corporation who is not made a direct party to the original suit. That is the question in this case.

We are not dealing with a case where a stockholder is interposing the defense of payment, or any other defense which was not passed upon in the original' suit against the corporation. In such a case there is no judgment or decree of the court of a sister State which other courts must recognize. But the very point now urged as a defense was involved and determined by the Illinois court. This was an Illinois contract. These notes were choses in action, were first in possession of the company in Illinois, were turned over by it to the receiver, and were under the direct control of the Illinois court. That court entered a decree, upon evidence placed before it, determining the amount of assets and debts, and the amount of the assessment necessary to liquidate its liabilities. If every stockholder may now contest this decree, the difficulty thus thrown in the way of an orderly and practical settlement of the affairs of the insolvent corporation is apparent. Different courts might adopt different rulings upon the amount of the assessment. We think the better doctrine is that each stockholder or member of the corporation is an integral part thereof, and is represented in such suit through the corporation itself, and that such decree is binding and conclusive upon him. Two courts have so held in regard to the case now under consideration. Rand, McNally & Co. v. Insurance Co., 58 Ill. App. 528; Parker v. Mill Co., 91 Wis. 174.

In the latter case two points "were raised: First, that the receiver in Illinois could not sue in the courts of Wisconsin; and, second, that the assessment was inequitable and unjust, and hence should not be enforced. The distinction between the rights of property situated in other States, and those of choses in action, is there very clearly pointed out. Upon the first point the court say:

! ‘ There is no question here of a transfer of property in this State. No such transfer was attempted. The property in question — that is, the defendant’s note and its liability to pay assessments — was in Illinois, at the office of the company. They were choses in action, and their situs was at the residence of the company.”

Upon the second point the court say:

‘ ‘ If a judgment is conclusive in the State where rendered, it is conclusive here. The decree by which the assessment in question was made was undoubtedly conclusive on the members or policy holders of the defunct company, unless attacked in a direct proceeding, notwithstanding they were not present when it was rendered. * * * We can come to no other conclusion than that we are bound, under the constitutional requirement of ‘full faith and credit,’ to hold that the decree making the assessment in question, being conclusive in Illinois upon all members and policy holders, unless attacked by direct proceeding, is conclusive here, and not open to collateral attack.”

The point appears to be expressly decided in Hawkins v. Glenn, 131 U. S. 319. The proceedings in that case were substantially the same as in this. The defense was that the stockholder was not a party to the suit, that the cause of action was barred by the statute of limitations, that he was not responsible on 150 shares, and that interest should not have been allowed. The stockholder was sued in North Carolina. A decree had been rendered in a court of chancery in Virginia, which had ascertained the extent of the liabilities and assets of the corporation, and decreed the assessment required to pay its liabilities. The court held the decree conclusive, and, in deciding it, speaking through Chief Justice Fuller, said: “A stockholder is so far an integral part of the corporation that, in view of the law, he is privy to the proceedings touching the body of which he is a member,” — citing Sanger v. Upton, 91 U. S. 56. The same question was again before the court in Glenn v. Liggett, 135 U. S. 533, and the same conclusion reached, quoting from Hawkins v. Glenn. The same was held in Lycoming Fire Ins. Co. v. Langley, 62 Md. 211.

The learned counsel for the defendant cite Chandler v. Brown, 77 Ill. 333, and Lamar Ins. Co. v. Gulick, 102 Ill. 41. These cases are distinguished from a case like the present in Great Western Tel. Co. v. Gray, 122 Ill. 630. The two former cases were based upon a statute which provided that stockholders should be made parties to the suit. Rev. Stat. Ill. 1891, chap. 32, §§ 1-49. The decree of the Illinois court in this case was based upon an act in regard to the dissolution of insurance companies. Rev. Stat. Ill. 1891, chap. 73, §§ 103-111. This does not provide for any service upon or notice to the stockholders or members, but confers the entire jurisdiction in such cases upon the courts. Upon the question of notice to stockholders, see Wardle v. Cummings, 86 Mich. 400.

Mr. May, in his work on Insurance (vol. 2, § 557), says “the receiver of an insolvent company stands upon no better footing” than would the directors in making an assessment; and cites Jackson v. Roberts, 31 N. Y. 304; Embree v. Shideler, 36 Ind. 423. If these decisions sustain the rule contended for, we could not follow them, as we think they are opposed to the clear weight of authority. The New York statute is clearly different from that in the present case. It reads as follows:

“In case the corporation, in regard to which a receiver has been or shall hereafter be appointed, is or shall be a mutual insurance company, such receiver shall have full power, under the authority and sanction of the court appointing him, to make all such assessments on the premium notes belonging to such corporation as may be necessary to pay the debts of such corporation, as by the charter thereof the directors of such corporation have authority to make; and the notice of such assessment may be given in the same manner as is provided in the charter of said company for the directors of said company to give; and the said receiver shall have the like rights and remedies upon and in consequence of the nonpayment of such assessments as are given to the corporation or the directors thereof, by the charter of such corporation.” Laws 1852, chap. 71, § 2.

It thus appears- that the power of the receiver was expressly limited to the power of the board of directors, and to the modus operandi of collecting the assessments.

In Embree v. Shideler, it appeared, upon the face of the complaint, that neither the receiver, nor the court to which he had reported his action, had examined and determined upon the validity of the claims against the company. This was expressly required by the charter of the company. It was therefore said that “the assessment is the act of the receiver, and in and with him is the authority to act in the premises.”

The decree in the present case was erroneous only in that it included some items which, under Detroit, etc., Ins. Co. v. Merrill, supra, this court would have excluded. Judgments and decrees cannot be attacked collaterally because they include items which courts, other than those by whom they were rendered, might hold to be illegal. See Mor. Priv. Corp. § 822.

The judgment must be affirmed.

Montgomery and Hooker, JJ., concurred with Grant, J.

McGrath, O. J.

(dissenting). After reargument of this cause, I see no good reason for a change of opinion upon the main issue involved. The case presents two questions: First, whether the decree of the Illinois court is res judicata as to the amount of the assessment directed; and, second, whether we are bound, under the constitutional requirement of “full faith and credit,” to regard that decree as conclusive. •

1. There are a number of authorities which hold that, in a proceeding against a stockholder under a statute which makes him liable to creditors, and based upon a judgment against the corporation, such judgment is prima facie evidence of the indebtedness of the corporation. Grand Rapids Sav. Bank v. Warren, 52 Mich. 557; Hoagland v. Bell, 36 Barb. 57; Hastings v. Drew, 76 N. Y. 9; Schaeffer v. Insurance Co., 46 Mo. 248. Other authorities hold that the judgment is conclusive, and cannot be attacked, except for fraud. Corse v. Sanford, 14 Iowa, 235; Grund v. Tucker, 5 Kan. 70; Coalfield Co. v. Peck, 98 Ill. 139; Conklin v. Furman, 8 Abb. Prac. (N. S.) 161; Milliken v. Whitehouse, 49 Me. 527; Henry v. Railroad Co., 17 Ohio, 187; Wilson v. Coal Co., 43 Pa. St. 424: Merchants’ Bank v. Chandler, 19 Wis. 434; Marsh v. Burroughs, 1 Woods, 463; Stephens v. Fox, 83 N. Y. 313. There is still another class of cases which holds that a stockholder, in the absence of a statute requiring it, is not a necessary party to proceedings to wind up the affairs of the corporation, determine its insolvency, and appoint a receiver; that a decree of court determining such matters, declaring the necessity for an assessment upon stockholders or for the collection of unpaid subscriptions to the capital stock, and directing the' collection thereof, is not open to attack in a suit brought to enforce the collection of the assets of the corporation, the unpaid subscriptions to the capital stock, or assessments so ordered. Glenn v. Williams, 60 Md. 93; Lycoming Fire Ins. Co. v. Langley, 62 Md. 196; Sanger v. Upton, 91 U. S. 56; Glenn v. Springs, 26 Fed. 494; Hawkins v. Glenn, 131 U. S. 319; Lehman, Durr & Co. v. Glenn, 87 Ala. 618; Gilchrist v. Land Co., 21 W. Va. 115 (45 Am. Rep. 555). These cases, with many others, recognize the rule, but some of them carry the rule to an extent which is not warranted by the principle which underlies the rule, and others use language which is inapplicable to the facts of the particular case before the court. A judgment against a corporation is decisive, as against a stockholder of that corporation, because the proceeding in which it was obtained was one between the contracting parties, — the parties who had the legal right to determine that question. The only question then open is the amount due from the stockholder to the corporation, or, if he is liable by reason of a statute, the extent of his liability under the statute. If he is exempted from certain classes of claims against the corporation, such exemption may be shown. If the statute imposes a liability as for labor claims, the character of the claim must be established. In Wilson v. Coal Co., supra, the stockholders were made personally liable for all debts except loans, and the court held that defendant might show either that he was not a stockholder or that the debt was a loan. In other words, the judgment is conclusive as to the amount due from the corporation to the creditor, but is only conclusive as to the stockholder when his liability is established.

As is said in Union Bank v. Manufacturing Co., 17 S. C. 339, 359:

“There can be no doubt of the rights of the stockholders in this action to set up any available defense that goes to the question of their liability upon the note upon which judgment has been obtained against the company. The defendants in this action were not, as individuals, parties to the action in which judgment was recovered. That suit was against the corporation, which, in law, is a distinct person from the individual members which compose it. The ground of the liability of the company may not prevail against the stockholders. For it is only when a judgment is obtained against the company upon debts of a certain description, and upon which suits have been brought within a specified time, that the stockholders are liable. In this action it is, therefore, necessary to establish that the conditions of the liability of the stockholders exist. To do this necessarily involves an inquiry in this action into the grounds of the stockholders’ liability. Of course, then, it is competent for these defendants to interpose any defense that goes to the ■ question of their liability upon the notes upon which the judgments were obtained.”

In Marsh v. Burroughs, supra, it was contended that the unpaid subscriptions of capital stock were not assets for the payment of debts, either legal or equitable; that they existed merely as possibilities; that they were not a debt due, having never been called in; that no one could call them in but the directors, and in them it was a mere discretionary power, which could not be exercised either by the assignee, the receiver, or the court itself, and could not be assigned; that said unpaid subscriptions were no part of the capital stock of the bank; and that the real capital stock was what had been called in. The court held, however, that the amount subscribed, and not the sums actually paid in, was the capital stock; that the authority to make calls was not a mere power vested in the bank, to be exercised or not, in its discretion, but that it was aright; that the mode of calling it in prescribed by the charter was a mere form of remedy given to the bank to enforce the subscription, and that unpaid subscriptions were corporate property, constituting a trust fund which could be reached by creditors.

In Sanger v. Upton, supra, it was held that the order of the bankruptcy court as to the right of the assignee to bring suit was conclusive. The court refer to the application of the rule to an order made by the comptroller of the currency, citing Kennedy v. Gibson, 8 Wall. 505, wherein the court say:

“ It is for the comptroller to decide when it is necessary to institute proceedings against the stockholders to enforce their personal liability, and whether the whole or a part, and, if only a part, how much, shall be collected. These questions are referred to his judgment and discretion, and his determination is conclusive. The stockholders cannot controvert it. It is not to be questioned in the litigation that may ensue. He may make it at such time as he may deem proper, and upon such data as shall be satisfactory to him.”

The court then say:

“It was competent for the court to order payment of the stock, as the directors, under the instruction of a majority of the stockholders, might, before the decree in bankruptcy, have done. The former is as effectual as the latter would have been.”

Other questions affecting the liability of the stockholders were raised, and the court determined them.

In Hall v. Insurance Co., 5 Gill, 484, the question arose upon the admissibility in evidence of the equity proceeding in which the order directing the call had been made, and the court held that the order for the institution of the suit was conclusive.

In Glenn v. Williams, supra, it was held that the chancery court of Richmond had power and jurisdiction to make assessments upon the unpaid subscriptions to the capital stock to raise funds with which to pay the debts of the corporation, and that the decree of the court determining and making an assessment upon the capital stock for such purpose was binding and effective upon stockholders not parties to that cause.

In Parker v. Mill Co., 91 Wis. 174, a demurrer was interposed to the complaint, on the ground of want of capacity in the plaintiff to sue. The court below sustained the demurrer, and the supreme court reversed that holding. There is no doubt of the correctness of that decision. That question is res judicata.

In Hawkins v. Glenn, supra, Mr. Chief Justice Fuller thus states the issues involved:

“ Counsel for plaintiff in error contend that the decree of the Richmond chancery court making the call and assessment was void as against him, because he was not a party to the suit; that the cause of action was barred by the statute of limitations; that he was not responsible upon .150 shares of the stock; and that interest should not have been allowed from the date of the call, but only from the time of the filing of the complaint.”

While the learned chief justice does say, as to the determination of the Richmond chancery court, that the court may have erred in its conclusions, but its decree cannot be attacked collaterally, the court does not rest its decision upon the adjudication referred to, but proceeds to discuss the question at length, holding that, as between creditor and stockholders, the latter could not protect themselves from paying what they owed by setting up the default of their own agents.

It must be borne in mind that that case was one for an unpaid subscription to stock. It was a sum which was a part of the capital stock of the company,- — a trust fund, held for the benefit of creditors, and the obligation to pay which could not be discharged, as against creditors, by the corporation itself. The contract to pay the sum sought to be recovered was one arising under the charter at the outset. It could not be affected, as to creditors, by the acts or laches of the corporation. In the present case the limit of the liability of the defendant member is not only expressed in the note upon which suit is brought, but in the charter of the corporation as well. No act of the corporation could extend that liability. Defendant pleads no release from its undertaking, nor does it seek to escape by reason of the laches of the corporation in its failure to enforce the contract, nor have creditors any demands upon defendant except such as arise from its undertaking. The receiver, on behalf of the creditors, is simply subrogated to the claim of the corporation against defendant. No assessment made by the corporation in excess of defendant’s liability would have been binding upon it. This is a proceeding against the stockholder as an adversary party. It has the same right to insist that the class of debts for which it has been assessed are not such as it contracted to pay, as a stockholder would have, under our own statute, in respect to labor claims, if sued- upon a judgment against the corporation.

2. In view of the conclusion reached, it is unnecessary to discuss the question as to whether the finding of facts supports plaintiff’s contention that the note in question is. an Illinois contract. No attempt was made to show that the charter and by-laws of the plaintiff corporation enlarged the defendant’s liability. The adjudication which, it is insisted, is binding upon us, was not one involving the validity of a contract, or the validity or construction of a local charter, statute, or constitution; nor was it a question of construction, depending upon the intent of the parties, as affected, at the inception of the contract, by any fixed local rules of law; nor did it involve a rule of property.

The federal judiciary act provides that the laws of the several States, except in given cases, shall be regarded as rules of decision in trials at common law in the courts of the United States; yet, at an early day, the Supreme Court of the United States held that this provision did not apply to the decisions of the State courts in the construction of ordinary contracts or on questions of general commercial law. Swift v. Tyson, 16 Pet. 1. And it has been held that the Federal courts were not bound by decisions of the State courts construing and determining the legal effect of insurance contracts (Carpenter v. Insurance Co., 16 Pet. 495); nor by decisions of State courts as to the rights of the parties to negotiable paper, such rights depending on the law of negotiable paper (Oates v. Bank, 100 U. S. 239; Railroad Co. v. National Bank, 102 U. S. 14); nor by a decision on the construction of a contract of carriage (Myrick v. Railroad Co., 107 U. S. 102); nor by a decision construing a deed by the rules of the common law (Foxcroft v. Mallett, 4 How. 353). See also, as to the application of this doctrine, cases cited in 23 Am. & Eng. Enc. Law, 40, 41.

The question here presented is whether the determination of the Illinois court, made after the insolvency of the corporation, as to the legal effect of defendant’s promise, is conclusive upon the defendant and binding upon us. I think not. There was no law of place that attached to and formed a part of the contract at its inception.

The judgment should have been for defendant, with costs of both courts.

Long, J., concurred with McGrath, C. J.


source: Caselaw Access Project

author: Long, J'.

license: Public Domain

text:
    MARKEY v. COREY.

    1. Bills and Notes — Indorsement.
    Upon transferring a promissory note, the payee wrote the following upon the back of the note, above his signature “I hereby assign the within note” to M. and S. Held, that he was not thereby relieved from liability as indorser.

      2. Same — Negotiability.
    The negotiability of a promissory note is not destroyed because of an indorsement thereon that it is given in accordance with a certain contract, although the note is one of a series which, by the terms of such contract, were to become payable, at the option of the payee, on failure to pay any of them.
    Error to Wayne; Lillibridge, J.
    Submitted October 25, 1895.
    Decided December 31, 1895.

      Assumpsit by Matthew M. Markey and Catherine Sundars against Lorenzo Corey, impleaded with George H. Waldo and Alden M. Varney, on a promissory note. From a judgment for plaintiffs, defendant brings error.
    Affirmed.

      Edgar Weeks (Moore & Moore, of counsel), for appellant.

      Ervin Palmer, for appellees.

       This case, as reported in 36 L. R. A. 117, has a note respecting the assignor of a promissory note as an indorser.

   Long, J'.

Defendant Corey entered into a written contract with Waldo and Varney for the sale of certain personal property at the sum of $2,500, payable $200 the first year, $500 the second, and $600 each year thereafter, until the whole amount should be paid, according to five promissory notes executed at the same time. The contract also provided that certain stock should be deposited by the purchasers as further security for the payments. It was then provided:

“But in case said payments shall not be made as above provided, and in case either or any of said payments shall remain unpaid for the period of 90 days, then the party of the first part shall, at his option, have the right to declare the whole remaining amounts represented by said notes to have become due and payable.”

On the face of each of the promissory notes was written:

“This note is given in accordance with the terms of a certain contract under the same date, between the same parties.”

‘ Subsequently the plaintiffs received from defendant Corey an assignment of all his right, title, and interest in and to the contract, stock, and notes. On the back of the note in suit was indorsed:

“I hereby assign the within note to Matthew M. Markey and Catherine Sundars.”

This $500 note was not paid, and was protested, and the plaintiffs brought this suit upon it against Waldo and Yarney as makers, and Corey as indorser, j The declaration was upon the common counts in assumpsit, with a copy of the note attached. On the trial, however, the court permitted the plaintiffs to amend the declaration by averring the assignment of the contract and note. The case proceeded to trial, and plaintiffs’ counsel offered in evidence the note and indorsement of assignment on it, together with the certificate of protest. Defendant’s counsel objected to their introduction as against defendant Corey, claiming (1) that the note in question was not a promissory note, and that plaintiffs could not recover upon it against Corey as indorser, but that, if they took any title to it, it was under the assignment; (2) that the contract was evidenced by the note and the other writing, —the contract of sale. Plaintiffs’ counsel then put ..in evidence, under objection, the contract of sale. | The court thereupon directed a verdict in favor of plaintiffs for the amount of the note and interest, from which judgment defendant Corey alone appeals.

It is insisted here, by counsel for defendant Corey:

1. That, if the plaintiffs took title to the note, it was under the assignment, and that, therefore, they could not sue in their own names, but, if they had a right-of action, it must be brought in the name of the original party to the contract.
2. That the two papers must be taken as constituting the contract, and that the note was not, therefore, a promissory note.
. 3. That Corey, by making the assignment to the plaintiffs, was not the indorser of the note, and could not be held liable as such.'

The usual mode of transfer of a promissory note is by simply writing the indorser’s name upon the back, or by writing also over it the direction to pay the indorsee named, or order, or to him or bearer. An indorsement, however, may be made in more enlarged terms, and the indorser be held liable as such. In Sands v. Wood, 1 Iowa, 263, the indorsement was, “I assign the within note to Mrs. Sarah Coffin.” In Sears v. Lantz, 47 Iowa, 658, the indorsement on the note was, “I hereby assign all my right and title to Louis Meckley.” And in each case the party so assigning was held as indorser, the court in the latter case saying of Sands v. Wood: “He used no words that, in and of themselves, indicated that he had bound or made himself liable in case the maker, after demand, failed to pay the note. But it was held the law, as a legal conclusion, attached to the words used the liability that follows the indorsement of a promissory note.” See, also, Duffy’s Adm’r. O’Conner, 7 Baxt. 498; Shelby v. Judd, 24 Kan. 166; Brotherton v. Street, 124 Ind. 599.

The rule of the American cases is well stated in Daniel on Negotiable Instruments (section 688c) as follows:

“The question arising in such cases is a nice one, and depends upon rules of legal interpretation. The mere signature of the payee, indorsed on the paper, imports an executed contract of assignment, with its implications, and also an executory contract of conditional liability, with its implications. The assignment would bé as complete by the mere signature as with the words of assignment written over it. The conditional liability which is executory is implied by the executed contract of assignment, and the signature under it, which carries the legal title; and the question is, does the writing over a signature an express assignment, which the law imports from the signature per se, exclude and negative the idea of conditional liability, which the law also imports if such assignment were not expressed in full? We think not. * * * When the thing done creates the implication of another to be done, we cannot think that the mere expression of the former in full can be regarded as excluding its consequ'ence, when that consequence would follow if the expression were omitted.”

The language used in the assignment to the note in suit does not negative the implication of the legal liability of the assignor as indorser, and as the words are to be construed, as strongly as their sense will allow, against the assignor, he must be held as indorser, (This rule is fully supported in Hatch v. Barrett, 34 Kan. 230. See, also, Adams v. Blethen, 66 Me. 19.

\ In the case of Aniba v. Yeomans, 39 Mich. 171, the assignment read as follows: “I hereby transfer my right, title, and interest of the within note to S. A. Yeomans.” Mr. Justice Marston said in that case:

“The right or interest passing, therefore, under the usual and customary indorsement, is much greater than the mere right, title, and interest of the payee; and where the transfer, as made, only attempts to pass the title and interest ol the payee of the note, no greater right or interest than he then held can pass.”

In other words, the learned justice seemed to think that the words used limited the transfer to the right and title he then held. ■ While this holding appears to be at variance with the cases elsewhere, we think it readily distinguishable from the present, as here the words are, “I hereby assign the within note to Matthew M. Markey and Catherine Sundars,” and do not purport to limit the liability of Corey as an indorser.

In Stevens v. Hannan, 86 Mich. 307, the note sued upon was negotiable in form, and made payable to Batch-elder, and he assigned it before maturity, as follows: “ For value received, I hereby assign all interest in and to this note to Ralph E. Watson.” Defendant insisted in that case that the plaintiff could not sue in his own name, but should have sued in the name of the payee. It was said by Mr. Justice McGrath: “ I do not think the point is well taken. * * * If Batchelder’s indorsement did not affe.ct its negotiability, then Watson’s indorsement entitled the plaintiff, as holder of the note, to sue in his own name.”

It must be held, therefore, that the memorandum on the note did not relieve Corey from his liability as indorser.

The court was not in error in admitting the contract in. evidence, as its purpose was to show that the note was not in fact limited by its provisions, and those provisions of the contract cited did not destroy the negotiability of the note. Daniel, Neg. Inst.' § 48.

The judgment must be affirmed. .

The other Justices concurred.


author: Montgomery, J.

text:
    JANAUSCHEK v. EDDY.

    Husband and Wife — Possession—Parties.
    The possession by the wife of personal property belonging to the husband, during his temporary absence, is the possession of the husband, and the wife cannot sue in her own name for a conversion of such property.
    Error to Gogebic; Haire', J.
    Submitted October 23, 1895.
    Decided January 16, 1896.
    Tro ver by J ohn J anauschek and Lidia J aschusch against Thomas T. Eddy. From a judgment for defendant, plaintiffs bring error.
    Affirmed.

      Julius J. Patek, for appellants.

      Buck & Waples, for appellee.

       Rehearing denied March 3, 1896.

   Montgomery, J.

This is an action of trover for the conversion of 80 bushels of potatoes. The case made by the plaintiffs was that in the year 1894 Joseph Jaschusch Avas the owner of a farm. The plaintiff John Janauschek worked a portion of the farm on shares, and harvested about 80 bushels of potatoes, which were placed in the cellar of the house occupied in common by the two families. Some time before the 14th of December, Joseph Jaschusch went to Montana, leaving his wife and two children, and the plaintiff Janauschek and his family, occupying the house. He authorized his wife to use from the potatoes such as she should need. It was agreed between Joseph Jaschusch and the plaintiff Janauschek that what potatoes they did not use for the family or for seed might be sold in the spring. On the 14th of December, the defendant, who was sheriff of the county, through his deputy, William J. Niness, attached the property, and, it appears, afterwards sold it. No attempt was made to show a valid attachment or justification, but the case turned upon the right of the plaintiff Jaschusch to join in the action. The circuit judge charged the jury that if her only interest in the potatoes was the right to go and use them, or to eat what she could, the verdict should be for the defendant. The jury found for the defendant, and the plaintiffs appeal.

The jury found, in answer to a special question, that the only interest that Mrs. Jaschusch had in the potatoes was for herself and family to eat of them. The plaintiffs do not rest their case upon any claim that the property was exempt, nor is the record sufficiently full as to the circumstances of the levy to enable us to determine this question ; but plaintiffs’ counsel states, on the contrary, that no such question is involved. But it is contended by plaintiffs’ counsel that there was a joint possession,- and that, as against a mere wrong-doer, possession alone is sufficient to maintain the action. But we think the relation of the wife to the property of her husband during his temporary absence from home is not such as to vest the right in her to sue in her own name for the recovery of his property wrongfully converted. Her possession is, in fact, his possession. He is the head of the family, and could undoubtedly join in or bring an action based upon the wife’s possession in his right.

The judgment will be affirmed.

Long, Grant, and Hooker, JJ., concurred. Mc-Grath, C. J., did not sit.


text:
    HAGERMAN v. WIGENT.
    1. Gift — Sufficiency of Delivery.
    The delivery of a mortgage by its owner to one person, with instructions to deliver the same to another after the owner’s death, is a sufficient delivery to meet the requirements of a valid gift inter vivos.

    2. Husband and Wife — Witnesses — Privileged Communications.
    3 How. Stat. § 7546, which provides that neither husband nor wife shall, during the marriage or afterwards, without the consent of both, be examined as to any communication made by one to the other during the marriage, is only declaratory of the common law, and does not preclude the survivor from testifying to matters not confidential in their nature, and which must have been intended to be disclosed; as where property was intrusted by a wife to her husband, with instructions to deliver it, after her death, to a person named.
    3. Equity Pleading — Demurrer.
    An objection that a bill of complaint is inartiffcially drawn, in that it states the evidence instead of the facts, can be raised only by demurrer.
    Appeal from Hillsdale; Lane, J.
    Submitted November 22, 1895.
    Decided January 16, 1896.
    Bill by James Hagerman and Abraham L. Hagerman against Andrew J. Wigent, executor of the last will and testament of Mary Raney Pridgeon, deceased, and Fred M. Wigent, to restrain the foreclosure of a mortgage. From a decree for complainants, defendants appeal.
    Affirmed.

      Guy M. Chester and Fred M. Twiss, for complainants.

      W. J. Sampson, for defendants.
   Montgomery, J.

This is a bill filed against the defendant Andrew J. Wigent, executor, and Fred M. Wigent, legatee, under the will of Mary Raney Pridgeon, to restrain the foreclosure of a mortgage executed by the complainants and their mother, Aváline Hagerman, to Mary Raney, afterwards Mrs. Pridgeon, in September, 1875. In December, 1878, and before her marriage to Pridgeon, Miss Raney executed a will, bequeathing her property to defendant Fred Wigent. The claim of complainants is that during' her lifetime Mary Raney Pridgeon frequently expressed the intention of giving the two complainants, who were her nephews, the mortgage, and said that she only expected and only desired to recover interest upon it while she lived; that to effectuate this intention she delivered the mortgage to her husband, Joshua Pridgeon, with instructions to deliver the same to complainants after her death; and that the mortgage was so delivered; but that the defendants, claiming title, commenced proceedings to foreclose by advertisement.

Apart from the controversy upon the question of fact, it is contended by defendants, that there was no delivery of the mortgage, and that there was, therefore, no valid gift inter vivos. The circuit judge found that the mortgage was delivered to Joshua Pridgeon by deceased with instructions to deliver to complainants as stated. This was a sufficient delivery. Thatcher v. St. Andrew's Church, 37 Mich. 264; Foster v. Mansfield, 3 Metc. (Mass.) 412 (37 Am. Dec. 154); Belden v. Carter, 4 Day, 66 (4 Am. Dec. 185); Latham v. Udell, 38 Mich. 238; Brown v. Stutson, 100 Mich. 574.

It is insisted, however, that the testimony of the husband, Joshua Pridgeon, was not competent to show the delivery of the mortgage to him, or the instructions accompanying the delivery of the mortgage to him, as it involved communications made by the wife to the husband during coverture. 3 How. Stat. § 7546, excludes as a witness the husband or wife who is brought as a witness to testify against the other during coverture. Blanchard v. Moors, 85 Mich. 380; Berles v. Kent Cir cuit Judge, 102 Mich. 495. The statute also declares that “neither, during the marriage or afterwards, without the consent of both, shall be examined as to any communication made by one to the other during the marriage.” This provision is but declaratory of the common law. The word “communication” must be understood as having been used in the sense which had attached to it by its common use in the same construction. At the common law, testimony of the husband or wife was admissible, after coverture terminated either by divorce or death of the other spouse, in all cases where the facts sought to be proven did not fall within the inhibition against the disclosure of confidential communications between husband and wife made during coverture. Stew. Mar. & Div. §§ 439, 470. In this State it has been frequently held that the surviving husband or wife cannot disclose any communication made during coverture, confidential in its nature, or calculated to reflect upon the character of the deceased. Maynard v. Vinton, 59 Mich. 151; Hitchcock v. Moore, 70 Mich. 112; Carter v. Hill, 81 Mich. 275. The testimony of Pridgeon, it is true, relates to communications by the wife to him, but it is also shown that he was intrusted with the custody of the property, to be delivered after her death, under circumstances which involved an expectation on her part that the communication would be disclosed. It cannot be said to have been confidential. In the early case of Wells v. Tucker, 3 Bin. 366, a transaction almost identical with that testified to by Pridgeon was testified to by the wife of the intestate, and her evidence was treated as controlling, although the question of its competency was not discussed. In McGuire v. Maloney, 1 B. Mon. 224, the widow was permitted to testify that she saw her husband execute an instrument, and that her husband handed the same to her at the date of its execution, and that she had since retained it.

In Caldwell v. Stuart, 2 Bailey, 574, the wife was offered as a witness against the executor of her husband’s estate, to prove a parol gift of her husband in his lifetime. The court said:

“The sacredness of the confidence existing in the relation of husband and wife ought never to be violated, unless for the most imperious necessity. But neither the rule nor any of the reasons upon which it proceeds have any — the most remote — application here. The husband is no party. He has ceased to have any interest in temporal concerns. The defendant, the executor, represents the interests of the creditors, legatees, or distributees, as the case may be, and not the husband’s. There is no danger of matrimonial discord, nor is there any violation of confidence. She has only disclosed what the husband intended should be known. Without it, his intention in making the gift would have been defeated.”

In Gaskill v. King, 12 Ired. 211, the wife was admitted to testify against the administrator that a deed duly signed was delivered to her for the use of the grantee. It was said: “ This communication must, from its nature, have been made to the wife for the express purpose that she should make it known, so as to effectuate the deed.” See, also, Crook v. Henry, 25 Wis. 570; Hester v. Hester, 4 Dev. 228; White v. Perry, 14 W. Va. 66; Stober v. McCarter, 4 Ohio St. 513.

We think it clear, upon the authority of these cases, that the testimony of Joshua Pridgeon was admissible. We find his testimony corroborated to a greater or less degree by the testimony of Mrs. Worden, George Smith, and Henry Auckerman, and are, upon this testimony, satisfied of the substantial truth of complainants’ claim. In reaching this conclusion we have not considered the testimony of the wives of the two complainants.

Some criticism is made of the bill of complaint, and it is. contended that it is not full enough in its averments to justify the decree which was made. The bill was inartificial, in that it sets out statements of the evidence, rather than the facts deduced from the evidence. But the bill was not demurred to. The defendants answered, and when, at the hearing, the point was for the first time made, the complainants offered to amend, although no amendment was made in fact. Defendants do not contend that an amendment should not be directed under such circumstances, but do contend that such amendment would not avail complainants, as the case, when stated to correspond with the proofs, would not entitle complainants to relief. Upon that question we have already stated the opinion of the court.

Decree affirmed, with costs.

Long, Grant, and Hooker, JJ., concurred. Mc-Grath, C. J., did not sit.


text:
    GARN v. LOCKARD.
    1. Libel and Slander — Privilege—Malice.
    A communication made in good faith to a public officer, in relation to matters within the scope of his duties, is privileged, in the absence of express malice. The question whether the occasion was privileged is for the court; but, if the circumstances surrounding the publication are such that an inference of malice may be drawn from them, the question of malice is one for the jury.
    2. Same — Evidence.
    Testimony that the statement containing the alleged slanderous words was made to a police officer in a public place, in the presence of others, is evidence for the jury on the ques tion of malice.
    3.Trial — Directing Verdict — Wrong Reason eor Right Ruling.
    A judgment for the defendant, based upon the direction of a verdict for erroneous reasons, will not be sustained on the ground that the record shows the action to have been barred by the statute of limitations, where the circumstances of the trial indicate that the plaintiff was prevented from making proofs tending to remove the bar.

      Error to Eaton; Smith, J.
    Submitted December 3, 1895.
    Decided January 16, 1896.
    Case by Leah V. Garn against Arthur M. Lockard for slander. From a judgment for defendant on verdict directed by the court, plaintiff brings error.
    Reversed.

      Poioers & Stine and Garry C. Fox, for appellant.

      Lyman H. McCall and McPeek & Jones, for appellee.
   Montgomery, J.

The plaintiff prosecuted defendant in an action of slander. The words complained of charged, in effect, that plaintiff was the keeper of a brothel, and are charged as having been uttered in the presence and hearing of Lewis Biggs and others. Substantially the language imputed to defendant was proven to have been used by him in the presence and hearing of Mr. Biggs, who testified that he heard a part of the conversation between Lockard and Pollock, in which the name of Mrs. Garn was mentioned, and stated that it was “on Sunday, right down in front of the post-office, and Herb Pollock and Os Pierce, and some one else, I think, was also there.” The evidence shows that Mr. Pierce was at the time city marshal, and that, in the course of the conversation, defendant expressed a desire to have the marshal watch plaintiff’s house, and secure evidence against her, and upbraided the officers for not doing their duty in suppressing such crimes in the city. The circuit judge was of the opinion that this statement was privileged, and that there was no proof of actual malice, and for these reasons directed a verdict for the defendant.

1. There can be no doubt at this day that a communication made to a public officer whose duty it is to act in reference to the matter, if made bona fide, and with the purpose of aiding in the detection or prosecution of offenses against the law, is privileged, in the absence of express malice. Wieman v. Mabee, 45 Mich. 484. And it is also true, as Contended by defendant’s counsel, that the question whether the occasion was privileged is for the court. Bacon v. Railroad Co., 66 Mich. 166. It is likewise a recognized rule that the presence of disinterested persons at a time when a communication is made respecting a crime, which one has a right to make, does not ordinarily and per se operate to remove the privilege. Toogood v. Spyring, 4 Tyrw. 594; Dunman v. Bigg, 1 Campb. 269, note; Brow v. Hathaway, 13 Allen, 242; Moore v. Thompson, 92 Mich. 498. But, when the occasion is such that an inference of malice may be drawn from the circumstances, it is the province of the jury to determine whether malice exists. As was said in Bacon v. Railroad Co., supra: “The occasion determines the question of privilege. The language is only proper to be considered in connection with the question of malice.” In that case it was also said: “The jury may find the existence of actual malice from the language of the communication itself, as well as from extrinsic evidence.” This ■ statement should be taken subject to the qualification that if, upon the face of the publication, there be no intrinsic evidence whatever of malice, the court may determine this as a matter of law. Townsh. Sland. & Lib. § 288. But the circumstances of the publication in the present case are not such that we are able to say that there is no intrinsic evidence in the circumstances themselves from which a jury might draw an inference of malice. The publication was in a public place, in the presence of others than the officers. Under such circumstances, it is generally held to be a question for the jury whether or not the defendant was actuated by malice. Indeed, the cases cited by defendant’s counsel fully support this view. In Toogood v. Spyring, supra, it was said:

“Where, indeed, an opportunity is sought for of making such a charge before third persons which might have been made in private, it would afford a strong evidence of a malicious intention, and thus deprive it of that immunity which the law allows to such a statement when made with, honesty of purpose; but the mere fact of a third person being, present does not render the communication absolutely unauthorized, though it may be a circumstance to be left, with others, including the style and character of the language used, to the consideration of the jury, who are to determine whether the defendant has acted bona fide in making the charge, or been influenced by malicious motives.”

So, in the case of Brow v. Hathaway, supra, it is said: ‘ ‘ If unnecessary publicity be given to the statements, or if they go beyond what is reasonable in imputing crime, these circumstances may tend to show malice in fact.” And in Padmore v. Lawrence, 11 Adol. & E. 380, it was held, under the circumstances of that case, that it should be left to the jury to say whether the charge was made recklessly and unwarrantably, and repeated before more persons than necessary. In Newell, Defam. p. 501, it is said: “Nor should serious accusations be made recklessly or wantonly. They must always be warranted by some circumstances reasonably arousing suspicion, and they should not be made unnecessarily to persons unconcerned, nor before more persons nor in stronger language than necessary.” See, also, Moore v. Thompson, supra, in which Padmore v. Lawrence is cited with approval.

2. Defendant’s counsel further contend that, whatever may be the view of the court as to the ruling directing a verdict for the reasons given by the circuit judge, the judgment should not be disturbed, because the record shows that the action is barred by the statute of limitations. This question was not directly passed upon by the court below. When the plaintiff’s counsel was putting in his proof, defendant’s counsel objected, for the. reason that the case did not appear to come within the statute of limitations. Plaintiff’s counsel replied: “I supposed that was a matter of defense;” whereupon defendant’s counsel said: “That is very true. I don’t know as a matter of defense, but we might as well make it here as anywhere.” After some further discussion, the objection was overruled, and plaintiff proceeded with her testimony. The testimony was clearly enough competent, as the objection only related to the order of proof, and it was quite as logical to offer proof showing reasons why the statute of limitations did not cut off plaintiff’s right later in the case as it was at that stage. Plaintiff’s counsel stated that he expected to show that the summons was placed in the hands of the officer, and failed of service. Proof of this was not given in the case, but counsel for plaintiff subsequently, on the redirect examination of the witness Pollock, who was a deputy sheriff, and who had a warrant for defendant, and who had stated that he did not arrest him for two years after the warrant was issued, asked why defendant was not sooner arrested, and this, on objection of defendant’s counsel, was excluded. It is now stated that the purpose of this inquiry was to show facts which would have taken the case out of the statute of limitations. It also appears by the record that, while plaintiff’s counsel had rested his case, defendant had not rested, when the motion to withdraw the case from the consideration of the jury was made; and this motion was made on the single proposition, as it would seem, that the proofs showed that the alleged slanderous matter was privileged, and that no express malice was shown. Had attention been called to the subject of the statute of limitations, the court would, undoubtedly, have permitted the plaintiff to make the necessary proof; and we think that it would be a hardship to now hold that she is precluded from making this proof by a ruling upon another distinct question. A similar question was considered in Findlay v. Railway Co., 106 Mich. 700, and we there held that, under circumstances very similar to those disclosed on this record, the plaintiff ought not to be precluded from making his case. See, also, Ross v. Ionia Tp., 104 Mich. 320, and Hoose v. Insurance Co., 84 Mich. 323. Defendant’s counsel rely upon the rule that a correct judgment will not be reversed by this court because the trial judge may have given a wrong or invalid reason for his conclusions, and cite various cases to sustain this view, among which is Lentz v. Insurance Co., 96 Mich. 445. But in that case, as well as in other cases in which the rule contended for has been applied, it will appear that the questions which were permitted to control the case were fairly litigated before the trial court, or were such that a new trial would not remedy the defect.

Judgment will be reversed, and a new trial ordered.

Long, Grant, and Hooker, JJ., concurred. Mc-Grath, C. J., took no part in the decision.


author: Montgomery, J,

text:
    MAYNARD v. EATON CIRCUIT JUDGE.
    Intoxicating Liquors — Local Option Law — Druggists—Illegal Sale.
    A druggist who has complied with the general law by filing a bond entitling him to sell liquors for medicinal purposes cannot, on proof of a single unlawful sale, be convicted of keeping a place for the sale of liquors in violation of the local option law (3 How. Stat. § 2283a). The prosecution in such case should be for the illegal sale.

      Mandamus by Horace S. Maynard, prosecuting attorney for Eaton county, to compel Clement Smith, circuit judge for said county, to vacate an order quashing an information for a violation of the local option law.
    Submitted December 3, 1895.
    Denied January 16, 1896.

      Horace 8. Maynard, in pro. per.

      John M. Corbin, for respondent.
   Montgomery, J,

Relator filed an information against one Frank J. Brainard, in which he charged said Brainard with a violation of section 2283a, 3 How. Stat., in keeping a drag store, and alleged that he was not then engaged in keeping such place as a druggist or registered pharmacist, and not so keeping such place under and in compliance with the restrictions and requirements imposed upon druggists and registered pharmacists by the general laws of this State. It appears from the petition and return that the prosecution relied for conviction upon the proof of a single unlawful sale, and the question is whether, under such information, a conviction would be justified upon this proof. We are not dealing with a case in which a party claiming to be a druggist has failed wholly to comply with the law by filing a bond, but the question is whether one who has in this respect complied with the law may be convicted of unlawfully keeping a place by proof of an unlawful sale. We held in Bishopp v. Hillsdale Circuit Judge, 94 Mich. 461, that a druggist might properly be informed against under this section for selling liquor, if the information negatived the terms of the exception. It was there said that this section does not exempt druggists from the provisions of the act, but only exempts such as sell under and in accordance with the restrictions imposed upon them by the laws of the State. See, also, People v. Murphy, 93 Mich. 41. These cases were, however, cases of unlawful sale, and in each case the information fully apprised the accused of the nature of the offense charged. It is clear that a druggist cannot sell liquor as a beverage, or without complying with the statutory regulations, and escape responsibility for his act by claiming that he is within the exceptions of the statute; but the question here is, what is the offense charged, and what is the offense which the druggist who has complied with the law by filing his bond commits when he makes a sale unlawfully? We do not intimate that one who is a druggist, and who has failed to file his bond, may not be prosecuted under this section, as in such case it would seem to be an offense for him to keep a place where liquors are sold or kept for sale. But a druggist who has complied with the law in this respect is not guilty of an offense in keeping a place where liquors are sold or kept for sale; and, however we may disguise it, a charge of this nature, based upon proof of a single sale, is an attempt to charge a distinct offense of an invalid and unlawful sale, and this under general language, which gives the accused no information of the precise offense which it is the intention of the prosecutor to prove. If the contention of the prosecutor is sound, then, under such an information, any — the slightest — infraction of the regulations relating to druggists would render the druggist liable for keeping a place prohibited by statute. We think this is not the legislative intent, but that a druggist who has complied with the laiv by filing a bond, while he may be guilty of an offense, is not guilty of an offense in keeping his drug store; and that, if it is sought to charge him with a violation of the law in unlawfully selling, it is not a hardship to require that the offense be specified in such manner that the accused may know what he is called upon to meet.

These views agree with those of the circuit judge, and it follows that the application for a mandamus should be denied.

Long, Grant, and Hooker, JJ., concurred. Mc-Grath, C. J., took no part in the decision.


author: Hooker, J.

text:
    PINCH v. WILLARD.
    1. Bill of Sale — Chattel Mortgage — Parol Evidence.
    A bill of sale absolute on its face may, in an action at law, be shown by parol to have been given as security.
    2. Same — Transfer by Assignment.
    A bill of sale given merely for the accommodation of the vendor, and assigned by his direction to secure a loan to himself, will be treated as a chattel mortgage from the vendor to the assignee.
    3. Usury — Right of Recovery.
    Usurious payments cannot be recovered.
    4. Set-off — Replevin.
    Set-off is wholly statutory, and has never been authorized in actions of tort. It cannot, therefore, be allowed in an action of replevin.
    5. Same — Chattel Mortgage — Separate Claims.
    An agreement that security given for a present loan shall also be held by the lender as security for any balance due him on previous transactions is not equivalent to an agreement that, if a balance is found to be due the borrower on such transactions, the same shall be applied in reduction of the present loan.
    Error to Eaton; Smith, J.
    Submitted December 4, 1895.
    Decided January 16, 1896.
    Replevin by Benjamin W. Pinch against Aaron H. Willard. From a money judgment in his favor as for a lien upon the property, plaintiff brings error.
    Reversed.

      Huggett & Smith, for appellant.

      Powers & Stine, for appellee.
   Hooker, J.

The parties to this action settled accounts upon May 15, 1890, and found the sum of $1,853.48 due from the defendant to the plaintiff. The sum of $1,500 was thereupon paid, leaving a balance of $353.48. It should be added that the defendant claims that this included some usurious items, i. e., that such were included in the settlement. The amount of these does not appear. A chattel mortgage covering the property in controversy (excepting the horses) was given to plaintiff at this time. The plaintiff claims, and there was evidence tending to show, that their dealings continued until November 30, 1892, when they ceased, and that there was no settlement after May 15, 1890; that, through such dealing, the defendant became indebted to the plaintiff on various other obligations, some of them providing for bonuses of from •$5 to $10 per month, in addition to legal interest, and that he paid to plaintiff large sums of money at different times. Upon these transactions the plaintiff claims that a balance was due to him.

The defendant was also indebted to one Downs in a large amount, which was secured by a mortgage upon a large number of horses, including those in dispute. On October 18, 1892, the defendant executed and delivered to William J. Hickok a bill of sale, of which the following is a copy:

“Olivet, Mich., Oct. 18, ’92.
“I have this day sold to W. J. Hickok twenty-one head of horse stock, mares, colts, and fillies, as I may wish to select from my stud of horses. Description of said stock is not given, and only possession of stock is given, and right and title to said stock guaranteed to be perfect. Consideration of this sale is one thousand dollars. Received payment of two hundred and fifty dollars as forfeit; balance to be paid in the month of November (next),-and said amount, $750, tobe paid into the hands -of James T. Downs or his agent.
“A. H. Willard.”

At the same time, Hickok was directed to take $250 from a sum of money in his possession, belonging to the •defendant, and pay it to Downs, which Hickok did. It seems to have been contemplated that Hickok should obtain a release from Downs of the property covered by the bill of sale, and the record contains evidence that he did so in writing, and Hickok testifies that it was conditioned upon payment of $750 additional during November, 1892. Whether Hickok promised Downs to pay is not shown; and the only evidence of a promise to pay is contained in the bill of sale, which does not bear his signature. Hickok testified that he expected Willard would pay it, and that he never made any payment upon the bill of sale. He testified also that he understood that, if he did pay the $750, the property should be his absolutely. It may be claimed that this was afterwards modified by the statement that ‘ ‘ there was no condition by which I was to hold it in the nature of a mortgage or lien upon the horses to secure my debt if I paid the money, unless I sato fit.” He does not appear to have claimed any interest in the property, and, in speaking of the bill of sale, says: “I had a paper that claimed to be a bill of sale in my possession.” And he says that “it was not my idea that he was to furnish the stock as security for the $750 and the old debt he ow'ed me.”

We are unable to find in the record any evidence of payment or promise by Hickok, unless the taking and holding of this writing implied one. When we view this in the light of surrounding circumstances, we doubt the intention of the parties to make any contract in relation to the matter, and are more inclined to think that Hickok was accommodating and acting for Willard, as Willard testifies. Hickok says:

“ I wasn’t present when the horses were selected, but from Mr. Downs’ conversation afterwards I supposed he understood it. I supposed that they were selected out so that Mr. Downs would know upon what horses the mortgage remained, and I supposed Mr. Downs supposed I had bought them. So far as I know, Mr. Downs didn’t know but that I had bought them right out from his conversation which I had with him afterwards. I should say this was done at the request of Mr. Willard, and in his interest, and that this arrangement was made at Mr. Willard’s request, although I had a little interest. Mr. Willard was owing me a little about sawing, and I was to receive some of my pay. I made this arrangement with him.' I attended to this business for him under those circumstances, that I was to receive my pay. I have received -it in part.
Q. Was there any understanding between you and Mr. Willard that you were to have this stock as security provided you paid the additional $750 mentioned in the bill of sale? Was there any talk about that?
“A. Not as security, sir.
Q. Was there any talk about his securing you for money he then owed you before this paper was made?
“A. Why, no difference. There was no particular security. I expected Mr. Willard would furnish the $750 to go to Mr. Doivns on or before the 80th day of November. That was the understanding when the paper was made. However, there was a little talk that possibly I might pay it. There was' nothing definite in relation to it. It was not my idea that he was to furnish the stock as security for the $750 and the old debt he owed me. I saw the stock on Mr. Deringer’s farm. I supposed Mr. Willard paid the pasturage. I did not pay any. Mr. Willard directed me to make the assignment to Mr. Pinch. The horses were not upon my farm anywhere. I furnished them no feed in any way. I don’t think there was any agreement between me and Mr. Willard that I was to be owner of the property in any different way from what I have told. I acted under Mr. Willard’s direction. In all the transactions I acted largely under his direction. I was not a loser in any way in the matter in case the $750 was not paid to Mr. Downs.”

But, whatever may be thought about this, the parties, Hickok and Willard, did not carry out any arrangement in the nature of a sale. Hickok paid nothing; Willard delivered nothing; and, at Willard’s direction, Hickok subsequently assigned his interest to Pinch, and received money from Pinch for Willard, and delivered it to Downs. That came about in this way: Some time in November, Willard asked Pinch to loan him $750, to pay Downs, offering to have Hickok assign this bill of sale to Pinch, if he would do so, and to pay him interest on the loan. Pinch agreed to do this, and it ran along until the last of the month, when Pinch refused, unless Willard would give him a deed of certain land, and make such deed and the property covered by the bill of sale security for the other debts claimed by him to be owing to him from Willard, together with the $750 to be advanced. AYillard declined to do that, but at the last moment they reached some sort of undei-stairding, and the money was paid, and assignment of the writing was made by Hickok, as stated. The parties disagree about this arrangement. Willard claims that the money was borrowed, and the bill of sale assigned by way of security, while Pinch claims that he paid the money and took the assignment on the promise of Willard that he would come the next day, or soon thereafter, and execute a contract and note for all the money owing, which should be secured as hereinbefore stated. He claims that Willard did not do this, and, therefore, that he had a right to stand upon his purchase of the horses for $750, through the Hickok bill of sale, which gave him an absolute title to them. Pinch testifies that he bought these horses of Hickok at Willard’s request, to prevent Downs from taking them on his mortgage ; that he understood that Hickok refused to pay any more money on them; that he did not know that Hickok did not own the horses, but surmised how the thing was. He said that, at the time he took the bill of sale, a verbal agreement was made, to be reduced to writing. Willard was to see Pinch on the next day, and make a complete settlement of all their dealings, mortgages, and accounts, and make a written contract to secure, with security upon 80 acres of land and 20 head of horses. That was to take the place of the old indebtedness, and secure this $750.

Upon this verbal contract, which was never put in writing, this money was paid and bill of sale assigned. The plaintiff does not show that there was an express agreement that he should buy these horses. It is plain that it was not expected that they should extinguish any claim he might have for the $750, which it is evident was to be considered a loan, upon which he was to receive interest, and for which the horses were to be held as security. Upon the facts, the court was clearly right in saying that this bill of sale was given by Willard to Pinch as security. It was as though he had made a new bill of sale on payment of $750, and we fail to see how the fact that the instrument was assigned to Pinch at Willard’s direction places the parties in any different relation to each other. That a bill of sale may be shown in a court of law to have been given for security is established by several cases cited by counsel. Fuller v. Parrish, 3 Mich. 211; Picard v. McCormick, 11 Mich. 68; Cooper v. Brock, 41 Mich. 488; Seligman v. Ten Eyck’s Estate, 74 Mich. 525; Weed v. Mirick, 62 Mich. 414. Counsel argue that, conceding this, “the cases have never gone further than to hold that a defeasance in such case may rest in parol; that no case holds that such proof may be introduced to show that the bill was not intended as a bill of sale, — that the title was not conveyed thereby.” We think this an overnice distinction. Our understanding of the rule is that a bill of sale, absolute upon its face, may be shown by parol to have been given under circumstances that indicate that it was intended as security for a debt, and not a sale of the chattels; and we know of no case that holds that such an instrument is an exception to the rule that title does not pass under a mortgage. That such is the rule, see Lucking v. Wesson, 25 Mich. 443, overruling Tannahill v. Tuttle, 3 Mich. 104, Thurber v. Jewett, Id. 295, and Flanders v. Chamberlain, 24 Mich. 305. See, also, Kohl v. Lynn, 34 Mich. 360; People v. Bristol, 35 Mich. 28; Gardner v. Matteson, 38 Mich. 200; Haynes v. Leppig, 40 Mich. 602; Brink v. Freoff, Id. 611; Wilson v. Montague, 57 Mich. 638; First National Bank v. Weed, 89 Mich. 357. If there is any good reason why a bill of sale, absolute in form, but which the law holds in fact a security in the nature of a chattel mortgage, not intended to transfer property, but as a security merely, should be held to convey title, it has not been suggested.

The court evidently treated this transaction as a bill of sale given, not only to cover the $750 debt, but all other obligations, for he permitted the parties to go at length into their accounts subsequent to May 15th. He directed the jury to strike a balance, and give the plaintiff a verdict if they found anything due to him. This was in accord with the plaintiff’s claim that he was to be secured on the horses and land for all indebtedness. Counsel for the plaintiff insist that the court should have treated the chattel mortgage and bill of sale as two distinct claims. This is true so far as to have authorized a verdict of not guilty as to the property covered by the mortgage, if the jury should find the debt of $353.48 paid up, for there appears to be no claim that this mortgage secured the $750 item. But the plaintiff suffered no injury by this omission. As the jury found a balance of only $239.03, it is evident'that they found that this property was discharged by payment of the debt.

In this connection we will consider the assignment of error upon the instruction in relation to usury. The transaction in question took place November 30th, and there were no dealings between the parties afterwards. Counsel urge that the plaintiff should have recovered the amount of money loaned at that time — i. e., $750 — at the least, and that such sum could not lawfully be reduced by bonuses. It is manifest that it was so reduced, or that the jury must be supposed to have found a balance against the plaintiff, in which bonuses could not be included. In other words, they argue that if the defendant did not owe anything on November 30th, previous to the $750 deal, the question of bonus could not be considered, as, where usury has been paid, it is not recoverable; and such we understand to be the law. It seems self-evident that the jury must have found that payments, with or without unpaid bonuses, equaled all previous obligations; and it is obvious that nothing in the nature of a bonus or a promise to pay usury could be applied upon the $750 debt. It follows that, if the same was not reduced by-usury already paid, it must have been reduced by an offset consisting of a previously existing balance against the plaintiff. The plaintiff unquestionably held the horses as security for $750. Nothing had been paid upon this obligation, and he had a right to enforce it. If, at the time the $750 was obtained, the defendant owed plaintiff nothing, then these horses would be security for only $750. The fact that the parties supposed that something was due to the plaintiff, and agreed that it should be secured by the horses, was not equivalent to an agreement that if it was found otherwise, and that the balance was in favor of the defendant, such balance might be applied upon the $750 debt by way of offset, as appears to have been done. This was erroneous, unless it is proper to prove offsets in actions of replevin. As we have frequently had occasion to say, set-off is a creature of the statute, and it has never been authorized in actions of tort. For authorities holding that accounts cannot be adjusted or settled in an action of replevin, see Whitworth v. Thomas, 83 Ala. 308 (3 Am. St. Rep. 725); Otter v. Williams, 21 Ill. 120; Streeter v. Streeter, 43 Ill. 155; Wat. Set-Off, 169; Fairman v. Fluck, 5 Watts, 516; Peterson v. Haight, 3 Whart. 150. See, also, Dole v. McGraw, 71 Mich. 110.

Under the proofs, the jury could not legitimately find a verdict of not guilty, as the court instructed them they might do. True, they did not, but, under this instruction, they found an opportunity to render a much smaller verdict than the undisputed testimony shows that the plaintiff was entitled to. The objectionable feature in the charge is as follows:

“And if you find a proper demand of the property was made by the plaintiff before the commencement of this suit, your verdict must be for the plaintiff, unless you find that there is nothing due the plaintiff, — was nothing due to the plaintiff at the time of the commencement of this suit. And upon the amount covered by the bill of sale or contract of November 30, 1892, you would compute simple interest thereon from the time of the payment of the same to Mr. Hickok, which was on the 30th day of November, 1892. And, in determining the question of payment, you are to take into account the whole' dealings between the parties, and as proven in the case; that is to say, you are to ascertain what amount of money Mr. Pinch has let Mr. Willard have, and what ambunt he has received back, not taking into account the bonuses or unlawful interest, which will be explained to you further on. And if, upon striking the balance, you find that Pinch has been paid in full, your verdict should be not guilty; but, if you find that Mr. Pinch has not been paid in full, you are then to determine what amount remains unpaid, and state the amount in your verdict.”

The judgment must therefore be reversed, and a new trial ordered.

Long, Grant, and Montgomery, JJ., concurred. McGrath, C. J., took no part in the decision.


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    GOESCHEL v. FISHER.
    1. Witnesses — Leading Questions.
    A question whether an officer was instructed to go to a given place for a specified purpose, and whether he did go, is properly excluded as leading.
    3. Trial — Instructions—Title to Personal Property.
    Where, in replevin by a wife against an attaching creditor of her husband, the testimony is conflicting as to whether the money with which the property was purchased belonged to her, and, if so, whether it was advanced to the husband as a loan or with the understanding that the property was to be » purchased for the wife, it is error to refuse instructions embracing the several theories, and to leave' to the jury, in a general way, the mere question of the bona fides of the transaction.
    Error to St. Clair; Yance, J.
    Submitted December 5, 1895.
    Decided January 16, 1896.

      Replevin by Amelia Goeschel against James Fisher, deputy sheriff, and Jacob Bernatz, sheriff, of St. Clair county. From a judgment for plaintiff, defendants bring error.
    Reversed.

      Chadwick & Mcllwain, for appellants.

      Phillips & Jenks, for appellee.
   Hooker, J.

The plaintiff brought replevin against a sheriff and his deputy, who held certain hay upon an attachment issued in an action brought against her husband, Herman Goeschel. It appears that Herman Goeschel was engaged in the purchasing and shipment of hay under the name of Goeschel Bros. He had bought some hay from Harvey Lashbrook, the plaintiff in the attachment proceedings, which attachment was issued by the circuit court on February 14, 1893, and levied upon the hay in question on February 18, 1893. The hay had been bought from James Shanahan, and the following is a memorandum of that transaction delivered to Shanahan at the time:

“Smith Creek, Feb. 14, 1893.
“Bought of James Shanahan 32 tons, at $12 a ton. Every car to be paid in full before it leaves. The last is to be as good as first load.
[Signed] “H. Goeschel.”

Upon the trial, the plaintiff testified that she was in possession of about $400, which her father had given her some months before; and, upon the occasion of the purchase of this hay, she had allowed it to be used in payment by her husband, under circumstances which her counsel contend show a purchase of the hay by her. She testified several times that she lent it to her husband, and, at several other points of her testimony, it would appear that he acted as agent for her in the purchase of the hay. Shanahan testified that he received his pay as the hay was delivered, and from the plaintiff, and three receipts given by him to her were offered in evidence. These receipts were dated February 16th, 17th, and 18th. It is admitted that Herman Goeschel shipped the hay in the name of Goeschel Bros., and received and collected the pay therefor, which it is claimed he accounted for to his wife.

The eighth assignment of error applies to questions asked witness Lashbrook by defendants’ counsel on redirect examination, viz., “whether the officer was instructed to go to Smith Creek, and be on the lookout for hay that Goeschel Bros, were purchasing, and levy on it,” and “whether the officer was at Smith Creek for several days before an attachment was finally levied.” These questions were objected to as leading, immaterial, and incompetent, and the objections sustained. The claim of the defendants was that, in a dispute with Herman Goeschel, Lashbrook had threatened an attachment, and that Herman Goeschel knew the sheriff, and that, if he saw him at Smith Creek, it would explain the motive in having the money paid by his wife, and receipts drawn to her. If this testimony was admissible, it could easily have been called for by a question that was not leading. That objection was made, and counsel seems not to have cared enough about the point to change his question. As the questions were leading, we cannot say that error was committed in excluding them.

The ninth assignment alleges error in refusing to give defendants’ third request to charge. It was as follows:

“ If you believe from the evidence in this case that the plaintiff did loan money to her husband with which to purchase the hay in controversy, and it was purely a loan to him, and was not understood between the parties that the hay was to be hers, then she cannot recover.”

If it was true that the money used to pay for the hay belonged to the plaintiff, and that she loaned it to the husband, without an understanding that the hay was purchased for her, it is difficult to see how she could maintain her replevin. There was considerable evidence tending to contradict her claim of ownership, and we think this question should have been left to the jury. The court did, in a general way, leave the question of the bona fides of tbe transaction to the jury; but they might have found her to be the owner of the money, and yet that she loaned it, without arranging to take title herself. This is a case where the statements of the plaintiff and her husband could only be contradicted by circumstances, and we think the view of the case presented by the third request should have heen placed before the jury. We do not mean to imply that plaintiff’s testimony that she loaned the money is conclusive, but her entire testimony, as a whole, should be considered in determining that question. If the jury should have thought this a slip of the tongue, voicing the truth, they could have consistently found that she was not the owner of the hay. On the other hand, if she was not versed in the English language, that was a circumstance to be considered against defendants’ theory.

The judgment is reversed, and a new trial ordered.

Long and Grant, JJ., concurred. McGrath, O. J., and Montgomery, J., did not sit.


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    DARLING v. THOMPSON.
    1. Waters and Water Courses — Breaking of Dam — Question for Jury.
    The question whether a dam went out because of its defective construction and negligent maintenance, or because of a sudden and unusual rise of water, is for the jury on conflicting evidence, as is also the question whether damages alleged to have been due to the breaking of the dam would have been likewise sustained had the dam not given way.
    3. Witnesses — Contradiction.
    A party may contradict, though he cannot impeach, his own witness.
    3. Evidence — Conclusion of Witness.
    A question whether a dam would have gone out had it not been for the high state of the water is properly excluded as calling for a conclusion of fact within the province of the jury.
    4. Contributory Negligence — Instructions.
    An instruction to the effect that plaintiff’s failure to attempt to avert the injury complained of does not render him guilty of contributory negligence, if his efforts in that direction would have necessarily been unavailing, is not open to objection.
    5. Negligence — Ownership of Dam.
    In an action for damages resulting from the breaking of a dam, the testimony of one of the defendants that he owned the dam does not conclusively relieve his codefendant from liability, where there are circumstances from which the jury might infer that the latter was likewise an owner.
    6. Appeal — Instructions to Jury.
    Error will not lie upon the refusal of requests to charge the substance of which was covered by the charge as given.
    Error to Kalkaska; Aldrich, J.
    Submitted December 6, 1895.
    Decided January 16, 1896.
    Case by Gilbert Darling against Robert N. Thompson and Harriet H. Stone for damages resulting from the giving way of a dam, alleged to have been caused by defendants’ negligence. From a judgment for plaintiff, defendants bring error.
    Affirmed.

      McIntyre & Wetmore (Pratt & Davis, of counsel), for appellants.

      William D. Totten and Cassius M. Phelps, for appellee.
   Hooker, J.

The plaintiff’s dam and mill, situate upon the Boardman river, were injured by a flood, which he charges to have been caused by the negligence of the defendants, who owned a dam about half a mile above the plaintiff’s dam. A judgment for $1,200 was recovered, and the defendants have appealed.

The most comprehensive question raised by the record is whether the court should have directed a verdict for the defendants. The theory of the plaintiff is that the defendants’ dam was constructed and maintained in a faulty manner and condition. He asserts that upon the upstream side, near the flume, where the break occurred, it was covered with planks, which were never made tight, and that they did not extend to the top of the dam; that the embankment constituting the dam was made of sand, and that the water leaking through the planking was accustomed to wash out this sand, making holes which defendants were obliged to fill from time to time, and that this would be increased by a rise of the water above the ends of the planks. The dam was provided with a flume and waste weir, the latter having flush boards, for the control of the water, and by which the volume of water wasting from the pond could be increased or diminished. The defendants contend that the undisputed evidence shows that the breaking of the dam was caused by a sudden, unusual, and unexpected flood, which came without unusual rainfalls, or warning of any kind; that it ran over their dam, and washed it out, not by reason of any leaks in or defective construction of the dam, but simply because it came so fast that it could not escape fast enough to prevent running over; and furthermore, if the defendants could have let it out as fast as it came, the result would have been the same to the plaintiff, because his facilities for taking care of that quantity would have proved inadequate, as his waste weir and openings were less than defendants’. There was evidence showing the construction of the dam in accordance with the plaintiff’s theory; also, that upon the morning in question there were holes in the dam, made soft by water, into which horses sank several feet, shortly before the dam went out. The water was allowed to accumulate in the pond, or at least did accumulate, six or eight inches in depth beyond its usual quantity, — so much, indeed, that defendants’ counsel contend that it ran over the dam; and there was testimony showing that the water ran over the dam by the sides of the flume. On the other hand, it is claimed, and there is testimony tending to show, that it did not get sufficiently high to run over the dam, but that by reason of the leaks, and washing out of the dirt, the dam sank and became lo wer next the flume, and that water finally did run over, and wash out the dam at that point. The defendants’ counsel argue that the testimony shows that no unusual quantity of rain had fallen; that the stream was not swollen above or below their pond; but that suddenly, within half or three-quarters of an hour, the water rose six or eight inches, — a thing unprecedented; and this notwithstanding the fact that the mill was running. On the other hand, it is said, and there is evidence to sustain the claim, that the flush boards were left in the waste weir until the dam had become seriously weakened, and had begun to go to pieces; and the claim is made that the accident arose, not from any inexplicable or miraculous accumulation of water, but by reason of defendants’ controlling the flow of the stream (which was not extraordinary) until the dam began to disintegrate, when the removal of flush boards, which, if done in time, would have prevented the accident, was useless. We are of the opinion that these were proper questions for the jury, as was also the question of the plaintiff’s ability to protect his dam against the flow of the stream that morning, had the defendants permitted it to escape through their waste weir as it came.

Several questions are raised upon the admission and exclusion of testimony, some of which will be noticed. Others we consider unimportant. The evidence showed that one Perkins owned a dam a short distance up the stream from the defendants’ dam. He was allowed to testify as to the condition of the water in the stream during the night and upon the morning in question. This was objected to upon the ground that the object was to impeach plaintiff’s other witnesses, and it is urged in the brief that this was the effect. We think counsel have overlooked the distinction between a contradiction and an impeachment. A party cannot impeach his own witness, but he may contradict him; for, if it were otherwise, he would be at the mercy of bis first witness. A moment’s reflection will show the far-reaching effect of the rule contended for.

The court refused to permit a witness to testify that the dam would not have gone out but for the high state of. the water, and we think he rightly determined that this was a conclusion of fact, and within the province of the jury.

It is contended that the court should not have permitted a verdict against Mrs. Stone, because she was not shown to have been an owner of the dam, or any interest in it. Counsel assert that it was in the highway, and that she had nothing to do with the dam. There was evidence that Mrs. Stone owned the land upon which it was built; that her codefendant was her son-in-law, and had charge of her affairs at Boardman. He stated that he owned the dam, and leased it to the Thompson Bowl Company, of which he was president. We are pointed to no testimony that shows who erected the dam, but we find in the record that at the time of its construction a witness said to Mr. Stone that it was being constructed improperly, and, from an objection made by defendants’ counsel, it would seem that this was about the year 1874. Mrs. Stone is shown to own certain lands upon, which this dam is said to have been built, by a deed from the administrator of Hamilton Stone. The same witness testifies that Thompson once bid off a job of repairing the dam. It is inferable, therefore, that the defendant Thompson did not build the dam, and that Harriet Stone’s grantor did. There is no evidence to show by what right Thompson owned it, as he said he did own it. That was a question for the jury under the evidence, unless his testimony is to be deemed conclusive. Inasmuch as the circumstances by which he acquired title were not shown, and his assertion of the fact was a conclusion that should have been drawn by the jury if by any one, we think the court committed no error in treating it as an open question, and leaving the jury to determine whether Mrs. Stone was an owner, and properly chargeable with neglect.

Error is assigned upon the following language:

“But if you find that the damage would have resulted anyway; that the damage would necessarily have resulted from the act of defendants; that the defendants are guilty of negligence that, caused this injury, even though you may find that the plaintiff did not use such caution as he should have used, — then that would not defeat his action.”

There is nothing in this question when the connection in which the language was used appears, viz.:

“In this case, if you should find that the plaintiff knew that there was a flood of water coming upon him, then, in that case, it would be his duty to use such care as an ordinarily cautious, prudent man would use, knowing that there was a flood imminent; and if you find that he did not do so, and by reason of his not doing so he contributed to the damage that was done to him, then he could not recover.”

It was, in effect, saying that plaintiff’s failure to make futile efforts to prevent injury would not amount to contributory negligence, — a proposition so trite that we marvel that we should be asked to pass upon the question.

Other questions are raised upon requests to charge, but an examination has failed to disclose any important omissions. The charge covers the subject, and, as we have heretofore said, where that appears, the case will not be reversed for a failure to give the charge that counsel may have outlined.

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

Long, Geant, and Montgomery, JJ., concurred. McGrath, C. J., did not sit.