author: Ostrander, O. J.

text:
    PEOPLE v. OBLASER.
    1. Criminal Law — Jury—Qualifications—Trial—Preliminary Examination.
    That counsel for respondent, who was accused of murder, was not permitted to examine a juror as to the state of his health, was not error, in the absence of a showing that his health or physical condition affected his verdict, which was rendered after a short trial.
    2. Same — Constitutional Law — Trial—Separation op Jury.
    Act No. 4, Pub. Acts 1909, authorizing the court to permit the jury in criminal trials to separate, is constitutional as an amendment to 3 Comp. Laws, § 11960, the title of which refers only to murder cases: for the court had such power in other criminal causes prior to the amendment, which therefore only affects prosecutions for murder, and is within the title of the original act.
    8. Same — Trial—Argument—Prosecuting Attorney.
    Argument of the prosecuting attorney that did not clearly distinguish between facts, and inferences which he drew from them, was not prejudicial error on the trial, which resulted in a just verdict.
    Error to Wayne; Mandell, J.
    Submitted January 20, 1911.
    (Docket No. 195.)
    Decided November 3, 1911.
    Rehearing denied March 30, 1912.
    August Oblaser was convicted of murder in the second degree.
    Affirmed.

      Philip A. McHugh and William Henry Gallagher, for appellant.

      Philip T. Van Zile, Prosecuting Attorney, and Fred H. Aldrich, Assistant Prosecuting Attorney, for the people.
   Ostrander, O. J.

The defendant, having been convicted of murder, has appealed to this court. Upon the trial, a motion to quash the proceedings was made on grounds which, in our judgment, were covered in the cases of Oblaser v. Wayne Circuit Judge, 159 Mich. 665 (124 N. W. 590), and a mandamus case in the same cause, decided later, which is not reported.

Complaint is made that counsel were not allowed to examine a juror upon the condition of his health and his physical ability to sit during a long trial. Inasmuch as the trial was short, and the juror sat through it without apparent injury to his health, and as it does not appear that his health or his physical condition affected his verdict, we may dismiss that question.

Error is assigned upon the omission of the trial judge to order that the jury be placed in charge of an officer during the trial. Section 11960, 3 Comp. Laws, required the confinement of jurors in murder cases. It was passed under the following title:

"An act to provide for the placing of juries, while engaged in the trial of cases of murder, under the charge of a competent officer duly sworn as prescribed in this act, and to define the duties of certain officers in relation thereto, and to provide a penalty for any wilful violation thereof.”

Act No. 4, Pub. Acts 1909, was entitled “An act. to amend section one of act number,” etc., “being section eleven thousand nine hundred sixty of the Compiled Laws of eighteen hundred ninety-seven.” Section 11960 was by said act amended as follows:

" The jurors sworn to try a criminal action in any court of record in this State, may, at any time before the cause is submitted to the jury, in the discretion of the court, be permitted to separate or be kept in charge of proper officers.”

The remainder is immaterial to the question. It is claimed that this act is unconstitutional, for the reason that the title to the original act was limited to murder cases. The title of the original act does limit amendments made under the title to the amendatory act, but under the amendment the provision quoted, had it been applied to murder cases only, would not have been invalid; and, inasmuch as courts had, at the time of the passage of this act, full power to confine or permit jurors in other cases to separate, and this was not changed by the provision, the act can be held good as to murder cases. There is therefore no necessity or reason for reversing the cause upon this point.

Fifty-four requests to charge were presented. ■ Many of them are statements of elementary principles; some are quotations from opinions of this court in other cases, and as a whole they are in a way argumentative. Some were given, and others were covered by the charge. We have gone carefully over these requests and the charge, and think that defendant has no cause to complain.

The language of counsel complained of consisted of arguments addressed to the jury, which called attention to testimony and certain inferences which they were asked to draw therefrom. It is claimed that testimony was misrepresented. We do not discover any misrepresentations. The prosecuting attorney did not always in terms make a clear distinction between the facts sworn to by witnesses and the inferences which he drew from them. But the jury heard the testimony as well as the argument, and it is assumed that they supplied what the attorney sometimes omitted. We have given very careful consideration to this subject, and, while we cannot approve of all that was said in argument, are convinced that, in view of the testimony, the jury could have honestly returned no other verdict than the one which was returned.

There was no error in denying a new trial, and we think the verdict a just one. Some questions are raised over rulings in the admission of testimony. As no new trial will be necessary, we do not say more about them than that we find no error.

The judgment is affirmed.

Bird, Moore, McAlvay, and Brooke, JJ., concurred.


source: Caselaw Access Project

author: Blair, J. Ostrander, C. J.

license: Public Domain

text:
    MICHIGAN RAILROAD COMMISSION v. MICHIGAN CENTRAL RAILROAD CO.
    1. Constitutional Law — Interstate Commerce — Michigan Railroad Commission — Interchange of Cars.
    An order of the Michigan railroad commission requiring the Michigan Central Railroad, a steam road, and the Detroit United Railway, an electric railway, to install a connecting track between the two roads in the village of Oxford, Michigan, and to interchange freight cars and passenger traffic, is not in violation of the commerce clause of the Federal Constitution (Art. 1, sec. 8, subd. 8), since the order must be deemed to affect only intrastate traffic, which is within the jurisdiction of the commission. (Act No. 812, Pub. Acts 1907; Act No. 300, Pub. Acts 1909.)
    2. Same — Due Process of Law.
    Said act creating the commission and authorizing it to act in such cases does not deprive respondent of its property without due process of law; subdivision c of seotion 7 containing a provision for reasonable compensation to the carrier.
    3. Same — Equity Jurisdiction — Mandamus.
    The questions of the practicability of the physical connection and interchange of traffic and of the reasonableness of the service being reviewable only by proceedings in chancery under section 26, Act No. 312, Pub. Acts 1907, are not open for determination in mandamus to compel the carrier to conform to the order of the Michigan railroad commission.
    Mandamus by the Michigan railroad commission against the Michigan Central Railroad Company to compel the interchange of traffic between respondent and the Detroit United Railway, under an order of the commission.
    Submitted April 30, 1911.
    (Calendar No. 24,103.)
    Writ granted November 3, 1911.
    Rehearing denied March 30, 1913.

      Franz O. Kuhn, Attorney General, and George 8. Law, Assistant Attorney General, for relator.

      Frank E. Robson (Henry Russel, of counsel), for respondent.
   Blair, J.

Relator asks for a writ of mandamus to compel respondent to comply with its order—

“ For the reasons set forth more fully in the opinion of the commission this day filed, that the said Michigan Central Railroad Company and the said Detroit United Railway Company, on or before the 15th day of August, A. D. 1.908, connect their tracks at such point in the said village of Oxford, Oakland county, as they shall between themselves agree upon as most desirable, and thereafter there interchange cars, car load shipments, less than car load shipments and passenger traffic in accordance with the provisions of section 7 of Act 312 of the Public Acts of 1907.
“It is further ordered that the said defendants shall, on or before the 1st day of July, A. D. 1908, designate the point at which'such physical connection shall be made and notify the said commission of such designation, and that if the said defendants are unable to agree as to the said point then the said commission shall, on or after the said 1st day of July, make a supplemental order herein, determining the location of said connection.” >

The Michigan Central Railroad Company operates the Detroit & Bay City Railroad as lessee. The line of the Detroit & Bay City Railroad extends from the city of Detroit, in the county of Wayne, to the city of Bay City, in the county of Bay, passing through the village of Oxford, in the county of Oakland. The Detroit United Railway Company, a corporation organized and existing under the street railway act (chapter 168, 2 Comp. Laws), operates an interurban railway extending from the city of Detroit to the city of Flint, and likewise passing through the village of Oxford, in the county of Oakland. Between the village of Oxford and the city of Flint, the railroad of the Detroit United Railway passes through the village of Ortonville, in the county of Oakland, and the villages of Goodrich and Atlas, in the county of Genesee. Ortonville is 10 miles from Oxford; Goodrich is 16 miles from Oxford; and Atlas is 18 miles from Oxford. The only railroad facilities at Ortonville, Goodrich, and Atlas are such as are afforded by the Detroit United Railway.

The Detroit United Railway is operated entirely by electric motive power, while the Michigan Central Railroad is operated by steam power. Shipments of freight to or from points on the Detroit United Railway between Oxford and Flint are required to be transferred from the steam railroad cars of the Michigan Central to the cars of the Detroit United Railway, and transported by the Detroit United Railway to their destination.

In January, 1908, certain residents of Ortonville and also of Goodrich filed with the Michigan railroad commission a complaint against the Michigan Central Railroad Company and the Detroit United Railway Company, asking in substance that an order be made by the commission requiring the Michigan Central Railroad Company and the Detroit United Railway Company to make a physical connection of their railroad tracks in the village of Oxford, and to there interchange cars, car load shipments, etc., in accordance with the provisions of subdivision “6” of section 7, Act No. 312, Pub. Acts 1907. April 28, 1908, a hearing was had before the commission, after due notice to the railroad companies, at which the railroad companies appeared and were represented by counsel, and a full hearing had bearing upon the matters complained of in said petitions. On June 5, 1908, the commission filed an opinion in said cause, and upon the same day made the order above referred to. The companies not having designated the point at which the physical connection of their tracks was to be made, the commission, on the 27th of November, 1908, made a supplemental order designating the point at which such physical connection should be made, and extending the time for the installation of the same to December 11, 1908. The physical connection between the tracks of said railroad companies was thereafter installed as ordered by said commission, and is still maintained by said railroad companies, although respondent performed its part under protest.

The orders made by the Michigan railroad commission were duly served upon the Michigan Central Railroad Company and the Detroit United Railway Company, as required by law, and neither of said companies instituted any proceeding to test the validity of said orders within the time limited therefor by section 26, Act No. 312, Pub. Acts 1907. The Detroit United Railway Company'is willing and able to accept cars and car loads of. freight from the Michigan Central Railroad Company to be delivered along the line of the Detroit United Railway between the village of Oxford and the city of Flint'. The Michigan Central Railroad Company, however, has hitherto refused, and still refuses, to deliver cars and car loads of freight to the Detroit United Railway Company for transportation to the points on the Detroit United Railway between Oxford and Flint.

The original act creating the Michigan railroad commission is Act No. 312, Pub. Acts 1907, entitled:

“An act to regulate railroads and the transportation of persons and property in this State, prevent the imposition of unreasonable rates, prevent unjust discrimination, insure adequate service, create the Michigan railroad commission, define the powers and duties thereof, and to prescribe penalties for violations hereof.”

Subdivision “d” of section 3 of said act provides that “ the term ‘ railroad ’ as used in this act shall be construed to include both steam and electric railroads,” etc. Subdivision “&” of section 7 of said act, under which the orders in this case were made, provides as follows:

“Where it is practicable and the same may bé accomplished without endangering the equipment, tracks, or appliances of either party, the commission may, upon application, require steam railroads and interurban and suburban railroads to interchange cars, car load shipments, less than car load shipments, and passenger traffic, and for that purpose may require the construction of physical connections upon such terms as it may determine: Provided, that nothing in this act shall be construed to require through billing of freight as between steam and electric, suburban or interurban railroads, but such suburban and interurban railroads may be used for the handling of freight in car load lots in steam railroad freight cars between shippers or consignees and the steam railroads, in the same manner and under the same general conditions, except as to motive power, as belt line railroads and terminal railroads are now or may hereafter be used for like purposes.”

Subdivision “ c” of the same section provides:

“ Every corporation owning a railroad in use shall, at reasonable times and for a reasonable compensation, draw over the same the merchandise and cars of any other corporation or individual having connecting tracks: Provided, such cars are of the proper gauge, are in good running order and equipped as required by law and otherwise safe for transportation and properly loaded; provided further, if the corporations cannot agree upon the times at which the cars shall be drawn, or the compensation to be paid, the said commission shall, upon petition of either party and notice, to the other, after hearing the parties interested, determine the rate of compensation and fix such other periods, having reference to the convenience and interests of the corporation or corporations, and the public to be accommodated thereby, and the award of the commission shall be binding upon the respective corporations interested therein until the same shall have been revised. Any railroad corporation refusing to comply with the provisions of this section shall be liable to a penalty not exceeding five hundred dollars.”

Sections 25 and 26 read as follows:

“ Seo. 25. All rates, fares, charges, classifications and joint rates fixed by the commission and all regulations, practices and services prescribed by the commission shall be in force and shall be prima facie lawful and reasonable until finally found otherwise in an action brought for the purpose pursuant to the provisions of section twenty-six of this act, or until changed or modified by the commission as provided for in paragraph (6), section twenty-four of this act.
“Sec. 26. (a) Any railroad or other party in interest, being dissatisfied with any order of the commission fixing any rate or rates, fares, charges, classifications, joint rate or rates, or any order fixing any regulations, practices or services, may within sixty days commence an action in the circuit court in chancery against the commission as defendant to vacate and set aside any such order on the ground that the rate or rates, fares, charges, classifications, joint rate or rates fixed is unlawful or unreasonable, or that any such regulation, practice or service fixed in such order is unreasonable; in which suit the commission shall be served with a subpoena. The commission shall file its answer, and on leave of court any interested party may file an answer to said complaint, whereupon said action shall be at issue and stand ready for hearing upon ten days’ notice by either party. All suits brought under this section shall have precedence over any civil cause of a different nature pending in such court, and the circuit court shall always be deemed open for the hearing thereof, and the same shall proceed, be tried and determined as other chancery suits. Any party to such suit may introduce original evidence in addition to the transcript of evidence offered to said commission, and the circuit courts in chancery are hereby given jurisdiction of such suits and empowered to affirm, vacate or set aside the order of the commission in whole or in part, and to make such other order or decree as the courts shall decide to be in accordance with the facts and the law.”

Respondent claims a mandamus should not issue because :

“ (1) The Detroit United Railway Company is a ‘ street railway,’ and not authorized by the act under which it is organized to do a ‘ railroad ’ business and transport over its lines freight and freight cars of the character transported by respondent, and it cannot be authorized so to do by the municipalities through which its lines pass, nor by the action of relator.
“(2) And therefore it is not competent to enter into any contract, agreement, or arrangement for that purpose with respondent.
“(3) Nor is it, in fact, possessed of cars, equipment, tracks, or other facilities sufficient to handle such freight and freight cars, or with which to make the interchange of business required by the order of relator.
“ (4) Respondent cannot without breach of contract interchange with the Detroit United Railway Company cars in its possession belonging to foreign or other corporations.
“ (5) The order of said commission and the statutes purporting to authorize it violate section 16, art. 2, of the Constitution of the State of Michigan (and as well section 32 of article 6 of the Constitution of 1850), and the fourteenth amendment to the Constitution of the United States, in that the enforcement of said order and statutes would deprive respondent of its property without due process of law.
“ (6) Said order and said statutes are an attempt to regulate and impose a burden upon interstate commerce, and violate section 8 of article 1 of the Federal Constitution, vesting in Congress the power to regulate interstate commerce.”

The opinion of the commission, after determining the practicability of the physical connection and of interchange, and reciting the testimony and other facts, proceeds as follows:

“ Reasonableness of Requiring Interchange. The evidence in this case amply sustains the allegations of complainants in these cases that interchange between the electric and steam lines at the points in question would result in very substantial benefits to these villages and the surrounding communities. It is shown that 50 cents less per ton is paid for hay at Ortonville than at the neighboring town of Grand Blanc. Fifty cents more is charged per ton for coal at Ortonville than at Oxford, and these differences in price are due to the expense incurred in the transfer at Oxford of said commodities from the cars of the steam line to those of the electric. Stock for shipment must be driven to Thomas, Davison, and other points. Elevator facilities have not been provided at Goodrich or Ortonville because of lack of shipping facilities. As to defendant Michigan Central Railroad Company, small sacrifice is asked in order to secure to these people the benefits they ask. It will have to expend its proportion of the amount necessary to install the connection, but no further expenditure is involved for it. Were the contemplated elevator at Goodrich one to be established at Oxford on the line of the Michigan Central, or at Flint on the ‘ cutoff ’ of the Grand Trunk, side track facilities would be provided for it by that company, in view of the business to be derived. The business to be derived by the steam railroad company from Ortonville, Goodrich and surrounding country, via these connections and the Detroit United Railway, gives promise of being considerable in amount. Thereby it is believed the Michigan Central Railroad Company and the Grand Trunk Western Railway Company will be the beneficiaries by sucn connections.”

It is apparent that the statute expressly authorized the order made, and, the respondent having failed to institute proceedings for a review of the order, the questions of the practicability of the physical connection and of the interchange of traffic, as well as the reasonableness of the service required, are not open in this proceeding. We therefore consider only the constitutional questions presented.

Does the order violate the commerce clause of the Constitution ? As we have heretofore held, the jurisdiction of the commission is limited to intrastate traffic, and its order in the present case must be deemed to be so limited. Ann Arbor R. Co. v. Railroad Commission, 163 Mich. 49 (127 N. W. 746). See, also, Wisconsin, etc., R. Co. v. Jacobson, 179 U. S. 287 (21 Sup. Ct. 115); Pittsburg, etc., R. Co. v. Railroad Commission, 171 Ind. 189 (86 N. E. 328).

Does the order deprive respondent of its property without due process of law ? Eor the affirmance of the proposition that it does, respondent relies upon Central Stock Yards Co. v. Railway Co., 192 U. S. 568 (24 Sup. Ct. 339), and Louisville, etc., R. Co. v. Stock Yards Co., 212 U. S. 132 (29 Sup. Ct. 246). In our opinion, the present case is distinguishable from, and not ruled by, the cases cited, for the reasons that the statute expressly imposes upon respondent an obligation to interchange cars, etc., and subdivision “ c” of section 7 above quoted expressly provides for reasonable compensation.

We therefore hold the statute to be constitutional, and the writ will issue as prayed.

Steere, Moore, McAlvat, Brooke, and Stone, JJ., concurred with Blair, J.

Ostrander, C. J.

I am of opinion that the act in question may be so construed that it will be constitutional. In so far as he considers the grounds upon which the validity of the law is attacked, I agree with Mr. Justice Blair. While I doubt the propriety of declaring the law to be constitutional before, and apart from, determining the meaning of some of its provisions, I am willing to assent to the granting of an order requiring respondent to conform to the order made by the commission.

Bird, J., did not sit.


author: Steere, J.

text:
    WHITE v. UNITED STATES GYPSUM CO.
    1. Appeal and Error — Findings op Pact — Trial.
    On review of a judgment entered after a trial by the court without a jury, where no written request for findings is filed, and findings in writing have been made, they will be presumed to have been made upon request and have the same effect as if requested.

      2. Same — 'Verdict.
    As every finding is one and entire and stands in lieu of a special verdict, the appellate court should accept everything evidently intended as facts found wherever set forth; it will not invalidate the findings that those of fact have not been separated from the conclusions of law.
    3. Same — Contracts.
    Findings of fact determining that no contract of hiring was executed between plaintiff and defendant are sustained as being supported by evidence.
    4. Contracts — Implied Contracts — Presumptions.
    When negotiations for a contract are pending, the law will not imply a contract upon which the minds of the parties have not met.
    6. Same — Master and Servant.
    The rendition of services of a different character from those which had been previously rendex'ed by an employA whose contract had expired, afford no presumption that his former contract is renewed.

      6. Same.
    Where plaintiff was engaged by defendant under a three-year contract of hiring, which the parties later canceled by consent, and plaintiff was re-engaged at a stated salary for the remainder of the year, except two months, and where plaintiff, before the expiration of the year, attempted to renew his employment, rendering services of a different character while negotiations pended, a contract of hiring, express or implied, for the following year was not proved.
    Error to Kent; Perkins, J.
    Submitted November 14, 1911.
    (Docket No. 117.)
    Decided December 8, 1911.
    Rehearing Denied March 30, 1912.
    Assumpsit by David R. White against the United States Gypsum Company for breach of a contract of employment. Judgment for defendant. Plaintiff brings error.
    Affirmed.

      Pleasant J. Phillips, for appellant.

      Seott, Bancroft & Stephens and Butterfield & Keeney, for appellee.
   Steere, J.

This is an action to recover damages for breach of an alleged contract of employment.

Plaintiff sought to recover salary and expenses, as traveling salesman for defendant company under an implied renewal of a pre-existing express contract, which expired on Decembr 31, 1909. The business of the defendant company was the manufacture and sale of Cementico and wall-coating goods of similar nature. Plaintiff’s claim was for the amount of his salary and expenses for the year 1910, on the basis of the preceding contract, less what plaintiff earned in other employment, and less an emergency expense fund of $150, which defendant had kept good in plaintiff’s hands under the previous contract, and which he retained. The court found for defendant, and gave judgment, under defendant’s notice of set-off, for the $150 emergency fund, less $13.34, the value of two days’ work performed by plaintiff in January, 1910. The declaration was framed upon a special contract of hiring, with the common counts added. Defendant pleaded the general issue with notice of set-off. This case was tried before the court without a jury.

There is very little conflict of testimony. It is mostly documentary, consisting of 62 exhibits, for the most part letters, the testimony of the plaintiff and two officials of defendant. The testimony of the three witnesses sworn is more at variance in their conclusions than upon the facts in relation to which they testify. The court filed certain findings in the case. When requested in writing, the judge is required to specify the facts found, and his conclusions of law thereon. The record fails to disclose any written request therefor, but, findings having been filed, they will be presumed to have been made upon request, and have the same effect as if requested. Under Circuit Court Rule 26, plaintiff proposed extensive amendments and additions to the findings filed by the court, which were reviewed by the court, and denied. Motion was then made by plaintiff’s counsel for a new trial, which was argued and denied, and the case is here for review.

The only questions which can be considered by the appellate court are whether there is any evidence to support the facts found, and whether the facts found support the conclusions of law upon which the judgment is based. The substance of the alleged errors which plaintiff urges for consideration are: That the findings of fact are unsupported by the evidence; that the court in his findings embodies a recital of claims and evidence, instead of findings of fact; that the court’s conclusions of law, “if any may be so construed,” are contrary to, and unsupported by, evidence; that the court failed to find any conclusions of law, and refused to adopt the several findings of fact requested by plaintiff.

The findings made by the court are entitled “ Findings of Fact; ” no portion being set apart or designated as conclusions of law. No. 1 of such findings is a recital of the claims and allegations of the respective • parties, their pleadings and notices. The remainder of the findings are as follows:

No. 2: “It appears that the arrangement made, under which plaintiff traveled for defendant during the month of January and the early part of February of the year 1909, was preliminary in its nature, and that by the terms of such arrangement it was left entirely indefinite between the parties as to whether any arrangement should be made for the future, and what the nature of that arrangement should be. I find as a fact that a contract to employ plaintiff as a traveling salesman was made and'consummated in writing between the parties to this cause upon February 9, 1909, and that by the terms of such contract defendant did employ plaintiff, and plaintiff agreed to serve defendant as a traveling salesman for the balance of the year 1909, and until December 31st of that year. Said contract provided that plaintiff should receive $200 per month as his salary and his actual expenses while acting as a salesman. I further find that all the negotiations, matters, and things which took place prior to the consummation of such contract were preliminary thereto, and are not a part thereof, and that no contract of employment was made for a term of. one year, or from January 1, 1910, to December 31, 1909 (1910).”
No. 3: “I find as a fact that said contract has been fully performed by both parties thereto.”
No. 4: “ It is claimed by the plaintiff that the letter referred to in the declaration written by him upon December 2, 1909, to the defendant company, contains an offer to serve the defendant as traveling salesman, and that the defendant accepted such alleged offer in and by a letter written by a Mr. George H. Booth, also in the employ of the defendant company, upon December 30,1909, requesting the plaintiff to examine and correct certain advertising matter. It appears that plaintiff’s letter of December 2d was referred to Mr. Servitus Q. Fulton, the manager of the sales department of the defendant company, and that the plaintiff was advised of such fact by two letters from said Booth, dated December 4 and 14, 1909, respectively, and that the plaintiff, by two letters written upon December 12th and 27th, respectively, requested a reply to his said letter of December 2d. It also appears that no reply was received by plaintiff from Mr. Fulton until he was shown a letter from the latter to said Booth upon January 26, 1910. It appears that plaintiff went to Chicago on the latter date at his own expense. It also appears that Mr. Fulton and the president of defendant company were the only persons having authority to employ salesmen. It does not appear that Mr. Booth had any such authority, either express or implied, but, on the contrary, it appears that Mr. Booth had no such authority. I find as a fact that negotiations were pending between the parties looking to a contract for the employment of plaintiff at the time of the expiration of the contract of February 9, 1909, but that such negotiations did not result in any agreement between the parties. I further find as a fact that no contract, express or implied, was made or entered into by defendant, or by any one authorized to act for it, to employ plaintiff for the year 1910.”
No. 5: “ I find that plaintiff performed certain services for defendant upon the 1st and 14th days of January, 1910, and that the services as performed were not within the regular scope of the duties of a traveling salesman. It does not appear what the value of these services was, unless such services can be determined by reference to the contract existing between the parties prior to January 1, 1910. By reference to such contract, I find that the reasonable value of such services was $6.67 per day, and that he is entitled to the sum of $13.34 for such services.”
No. 6: “ It is admitted that the sum of $150 was advanced by defendant to plaintiff, and that said sum has never been repaid. I find that there is due from plaintiff to defendant said sum of one hundred and fifty ($150) dollars, less the reasonable value of service performed, viz., less the sum of $13.34.”

It has been held that, as every finding is one and entire, and stands in lieu of a special verdict, this court should accept everything evidently intended as facts found, no matter in what part.it may be set forth. While it might be more easily understood and orderly to separate the facts from the conclusions of law, that such has not been done will not invalidate the findings. It therefore becomes incumbent upon this court to inquire if these findings anywhere within them contain a statement of facts, supported by the testimony, followed by correct conclusions of law, to sustain the judgment.

No. 1 of the court’s finding of facts, being merely a recital of what he regarded as the essential elements of the pleadings, is perhaps of little importance, as the pleadings would be part of the record in any event, but are unobjectionable as an introductory statement.

In support of the court’s findings 2 and 3, there is ample evidence tending to show that plaintiff was employed as a traveling salesman by defendant, under contracts of hiring covering a period from September 1, 1908, to December 31, 1909. There had been three previous contracts between the parties. The first commenced September 1, 1908, to continue three years, on a commission basis. On January 9, 1909, with the understanding that the three-year contract should “remainstationary for the time being.” a verbal contract was made between plaintiff and a representative of the company, named Bartlet, that plaintiff should perform some special service in the Northwest. It was understood that this service would require a month’s time, for which plaintiff was to receive a salary of $225 and his expenses. This contract was fully performed by both parties. Pursuant to previous correspondence, the defendant, on February 8, 1909 (the date of the completion of the one-month’s contract), wrote to plaintiff, offering him $200 per month and expenses for the remainder of the year 1909, on condition that he at once surrender and cancel the three-year contract on commission basis. This offer was accepted by letter, dated February 9, 1909, being in part as follows:

“Yours of the 8th is received and in reply will accept the salary of $200 per month with expenses for the balance of 1909, excepting the months of June and July. Will send the canceled contract to you as soon as I can get same from home.”

This contract on a salary basis, commencing February 9, 1909, and ending December 31st of the same year, was fully performed by both parties.

In support of findings 4 and 5, there is testimony tending to show that on the 2d of December, 1909, plaintiff wrote defendant:

“As our agreement ends with the present month, the writer wishes to know at your earliest convenience if you desire me to remain with you for the coming year.”

Two days later the company replied that his letter had been preserved for the attention of Mr. Servitus Q. Fulton, manager of the sales department. On December 14th, in reply to plaintiff’s further request on the subject, he was informed that Mr. Fulton had just returned from an extended trip, and had not yet “worked down to his matter.” On December 80, 1909, defendant company wrote plaintiff that they would soon need another supply of package wrappers, and asked his advice concerning printed matter for same; also asked him to draw up more explicit instructions in regard to the treatment of walls and the application of their wall-coating material, adding this observation :

“You have written the writer [Booth] previously that you would be glad of an opportunity of this nature, and it occurred to me that nothing would give you more pleasure on New Year’s day than to ruminate over one of our wrappers.”

Plaintiff next day forwarded the company the information requested, which was acknowledged on the 4th. As to what took place in January, 1910, before plaintiff learned he was not to be re-employed, plaintiff testified as follows:

“After December 31, 1909, I performed services for the company. I received instructions in a letter dated December 27 or 29, 1909, and I drafted this matter and sent it to the company. I looked over copies sent in letter of January 13, 1910, corrected and sent them back. * * * I made no trips under instructions from the company in January, 1910. On the 24th or 25th of January, I went to the company’s office in Chicago to see what was the reason I was not sent out on the road.”

Plaintiff further testifies that he saw a boy hand to Mr. Booth, (the correspondence head of paint department of the company) a letter, which Mr. Booth read, and immediately handed to him. It ran as follows •

“ Jan. 24, 1910.
“Gypsum Arts Dept.
“Mr. George H. Booth,
“Office.
“Dear Sir: Referring to the attached, long past due, will say we have concluded not to employ Mr. White during the next year, but will sell only such material as we can market through our office effort.
“Yours very truly,
“ S. Q. Fulton,
“Gen. Sales Manager.”

There is also testimony tending to show that on December 27, 1910, plaintiff wrote defendant, stating that he had as yet received no reply to his letter of December 2d; that from December 2d to the close of the year he was engaged in his regular work, and corresponding with defendant in relation to same; the letters received by him from defendant being written by George H. Booth, and marked with the initials “ G. H. B.,” being the same party who had previously advised plaintiff that his proposal of December 2d had been referred to and awaited the action of Mr. Fulton. In the early part of January, 1910, a few letters were written by plaintiff to defendant, and four letters received by him from defendant, three from Booth, and one from the accounting department, none of them referring to or purporting to answer his inquiry of December 2d; on January 1, 1910, plaintiff signed a receipt, showing that the $150 emergency expense fund was yet in his hands and owing to defendant. There was direct testimony, introduced 'by defendant, tending to show that Booth was only the general correspondent of the paint department, and had no authority to employ traveling salesmen, of which fact plaintiff had knowledge. We think there is evidence in this case tending to support all the material facts found by the trial judge.

Are his conclusions of law sound ?

After February 9, 1909, plaintiff was in the employ of defendant under a written contract for the remainder of the year, except June and July, on a salary of $200 per month and expenses. His two previous contracts had been performed or canceled by mutual agreement, and were entirely out of the way. This contract expired December 31st, and plaintiff opened negotiations for a rehiring. He was advised who had authority to hire, and to whom his proposition was referred. At the time his contract expired, negotiations which he had initiated were pending between the parties. When negotiations for a contract are pending, the law will not conclude them by any presumptions of an implied contract. Van Valkenburg v. Rogers, 18 Mich. 180.

Plaintiff made no trips as a traveling salesman, under instructions of the company, after January 1, 1910, and the court has found as a fact that certain services performed by him for defendant on January 1st and 14th were not within the regular scope of his duties as a traveling salesman. Where an employé, after his term of hiring expires, renders service of a different character for his former employer, it raises no presumption that his former contract is renewed. O’Connor v. Briggs, 182 Mass. 387 (65 N. E. 836).

It appears to be plaintiff’s contention that the original contract of hiring for a term of three years on a commission basis, which was suspended for a month in January and February, 1909, and at the conclusion of that month canceled by mutual agreement, followed by the hiring of February 9, 1909, for the balance of the year, still had some force and vitality, which affected the last contract, so that it assumed the nature of a hiring for a year, although in fact it began February 9th and continued until December 31st, “ excepting the months of June and July.” During the progress of the trial, counsel stated his position as follows:

** The fact of employment in January of 1909, and the renewal of that engagement in February, under the circumstances of the three-year employment on a commission basis, I claim does create a contract for a year, then and there, that it is to be renewed over, and yet I say, if this is not the condition, the letter sent to the company by Mr. White on December 2d would also imply a new contract for 1910. I consider both form the same proposition — the employment of White for the year 1910, upon the same terms as he had in 1909.”

Substantially the same proposition is set out in plaintiff’s request for additional findings.

We cannot conclude that a one-year contract is to be inferred from a three-year contract, or that a former contract, entirely ended by performance or cancellation, can have any bearing on a subsequent and distinct contract, which is in writing and unequivocal in terms. The last contract was not for a year, but 10 months and 20 days duration, with two intervening months excepted, making an actual employment of between 8 and 9 months. If we should construe the relations of the past as impliedly renewing this contract for the year 1910, it would begin on February 9th and run to December 81st, and what services plaintiff rendered after his former contract expired were in January, 1910, before his new contract would begin, if it was implied to be the same as the former one. Plaintiff seems to have thus regarded it himself, for in his hill of particulars is a distinct item for that month, as follows: “Salary earned under contract during the month of January, 1910, $225.” He appears to be claiming this contract for a year and for less than a year at the same time. The court correctly found from the written testimony that plaintiff’s contract was made on February 9, 1909, and expired December 31, 1909. No new contract for a year’s hiring could be implied from the same, even though plaintiff continued regularly in the employ of defendant into the ensuing year. When it is not shown that the original contract is for an entire year, and that the service rendered under it continued at least a year, no presumption of renewal for another year on the same terms arises by reason of continuance in the same service. Ewing v. Janson, 57 Ark. 237 (21 S. W. 430); Caldwell v. Caldwell Co., 88 N. Y. Supp. 970; Barnes v. Manufacturing Co., 113 N. Y. Supp. 977.

We conclude that the facts found by the trial court were supported by competent testimony, and his conclusions of law thereon are without error.

The judgment is affirmed.

Ostrander, O. J., and MoAlvay, Blair, and Stone, JJ., concurred.


author: Blair, J.

text:
    ATTORNEY GENERAL, ex rel. VERNOR, v. COMMON COUNCIL OF THE CITY OF DETROIT.
    1. Municipal Corporations — Charter—Amendment—Elections.
    Amendments to the charter of a city must he submitted to the vote of the electors at the next election after the proposed amendment has been adopted by the municipal council, whether "the election is general or special. Act No. 279, Pub. Acts 1909; Act No. 203, Pub. Acts 1911.
    2. Same — Constitutional Law — Cities — Local Self-Government — Municipal Corporations.
    The Constitution delegates to the electors of cities and villages, not to the legislature, authority to determine for themselves the local laws which shall regulate their municipal affairs.
    3. Constitutional Law — Statutes—Amendment of Charter— Municipal Corporations.
    Section 21 of Act No. 203, Pub. Acts 1911, authorizing cities to amend their charters without revising them under the Constitution, and statutes passed pursuant thereto, is invalid.
    Mandamus by Franz C. Kuhn, attorney general, on the relation of James Vernor, against the common council and election commission of the city of Detroit to require the respondents to submit at a special election a proposed amendment to the municipal charter.
    Submitted January 12, 1912.
    (Calendar No. 24,965.)
    Writ denied January 15, 1912.

      Graves & Hatch and Edward G. Wasey, for relator.

      Bichard I. Lawson (Edmund Atkinson, of counsel), for respondents.

      Hinton E. Spalding and Henry E. Bodman, for respondents, by leave of the court.
   Blair, J.

The city of Detroit is a municipal corporation with a charter granted under the Constitution of 1850 and thus antedating the Constitution of 1909. There has been no general revision of the charter under any act of the legislature since the Constitution of 1909 went into effect.

On August 15, 1911, the common council commenced appropriate proceedings under the provision of Act No. 279, Pub. Acts 1909, as amended by Act No. 203, Pub. Acts 1911, to amend the charter so as to institute a system of civil service, and these proceedings followed strictly the requirements of the legislature aforesaid in the following manner:

(a) .The resolutions containing the complete amendment and a direction that it be submitted to the electors “at the next special or general election held in the city” were introduced on August 15, 1911, and laid on the table for 30' days. (6) The amendment was published in the official paper on August 16, 1911. (c) The amendment was adopted by the affirmative vote of more than two-thirds of the members-elect of the common council on September 26, 1911. (d) The amendment was transmitted to the governor and by him approved on October 10, 1911 and returned to the city clerk.

On December 26, 1911, a special election was called to be held in the city of Detroit on January 23, 1912, and this is the first election, either special or general, held or to be held since September 26, 1911.

On December 26, 1911, the common council ordered to be submitted to the electors at the proposed election two propositions, and no others, and neither of these two propositions is the amendment relating to the system of civil service.

One of the propositions ordered to be submitted relates to the so-called municipal ownership of the street car lines in the city of Detroit, and is an amendment to the existing charter proposed under the same statutes (Act No. 279, Pub. Acts 1909, as amended by Act No. 203, Pub. Acts 1911), that the amendment concerning a system of civil service is proposed.

The election commission of the city of Detroit obeyed the instruction of the common council, and has arranged for the election on January 23, 1912, submitting the proposition relating to municipal ownership, but omitting the proposition relating to civil service.

The present proceeding is an application for a writ of mandamus to require the submission to the electors at the election on January 23, 1912, the amendment relating to the system of civil service, and the application is made directly to this court by reason of the importance of the public questions directly and indirectly involved and the necessity of haste because of the imminence of the election.

There are only two questions presented by the briefs which appear to us to require consideration, viz.:

(1) Does Act No. 279, Pub. Acts 1909, as amended by Act No. 203, Pub. Acts 1911, permit the legislative body of a city to decide at what ensuing election it will submit an amendment originating in the body itself ?
(2) Is the amendatory act of 1911 unconstitutional in so far as it authorizes the amendment of existing charters in advance of a general revision of the charter ?

We construe the language of section 21 of the act of 1909, as well as of the amended section of the act of 1911, relative to the submission of amendments, to require such submission at the next ensuing election, whether general or special.

Section 21 of Act No. 203, Pub. Acts 1911, provides:

“Any existing charter, whether passed pursuant to the provisions of this act or by the State legislature, may from time to time be amended as follows,” etc.

Tne provisions of the Constitution relative to the incorporation of cities and villages were intended to and did delegate to the electors thereof, and not to the legislature, the authority to determine for themselves the local laws which should regulate their municipal affairs. Jackson Common Council v. Harrington, 160 Mich. 550 (125 N. W. 383); Attorney General v. Detroit Common Council, 164 Mich. 369 (129 N. W. 879).

The authority of the legislature is limited to the passage of “a general law for the incorporation of cities” and villages, which must limit “their rate of taxation for municipal purposes and restrict their powers of borrowing money, and contracting debts.” Const, art. 8, § 20.

“Under such general laws the electors of each city and village shall have power and authority to frame, adopt and amend its charter,” etc. Const, art. 8, § 21.

Aside from embodying in “ such general laws ” the restrictions required by section 20 and the embodying of general limitations in accordance with the Constitution and general laws of the State, the province of the legislature is to provide for the method in pursuance whereof “the electors of each city and village shall have power and authority to frame, adopt and amend its charter.” Const, art. 8, § 21.

And as we held in Jackson Common Council v. Harrington, supra, a general revision of an old charter may be treated as equivalent to the framing of a new charter. Necessarily, the revising of an old charter under the new general law would be in conformity with such general law and would follow its mandates and inhibitions to the same extent as in the framing of a new charter.

Not so in case of mere amendments to specific sections, which might leave the charters repugnant to the general law adopted under article 8, § 20, of the Constitution, so that cities claiming to operate under a general law intended to operate uniformly upon the local legislatures of all cities would be subject to such limitations as they should choose to accept and might adopt such provisions as they deemed beneficial.

Such a construction, in our opinion, is in contravention of the constitutional provisions as interpreted by this court in Attorney General v. Detroit Common Council, supra. Vide 164 Mich. 388 (129 N. W. 879).

We hold, therefore, that the provision of section 21 of Act No. 203, Pub. Acts 1911, authorizing the amendment of any existing charter, is unconstitutional and void.

The writ is therefore denied, but without costs.

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

Bird, J., did not sit.


author: Moore, C. J.

text:
    STRACHAN v. MEYERING.
    Fraud — Trial—Directing Verdict on Opening Statement— Brokers.
    Upon, plaintiff’s opening statement showing that the action was brought for false representations of defendants in a real estate deal wherein defendants, acting as brokers, induced plaintiff to pay $30,000 for certain apartments by stating to plaintiff that this was the lowest sum at which the owners would sell, although the owners’ price was $24,000, the brokers receiving all they could secure above that amount, and although plaintiff claimed to have paid defendants $200 to secure for him the lowest price, the court erred in directing a verdict for defendants without receiving proofs; the question of fraud was for the jury.
    Error to Wayne; Murfin, J.
    Submitted June 26,1911.
    (Docket No. 34.)
    Decided January 23, 1912.
    Case by James Strachan against John H. Meyeringand another for fraud. A judgment for defendants on a verdict directed by the court is reviewed by plaintiff on writ of error.
    Reversed.

      George A. Safford, for appellant.

      Walker & Spalding, for appellees.
   Moore, C. J.

The plaintiff holds an assignment of any claim his wife has against defendants. It is his claim that he is entitled to recover a large sum because of false representations made to himself and wife by the defendants, who were in the real estate business."

The trial of the case was entered upon and some testimony taken, when the following occurred:

"The Court: If I understand from your opening, Mr. Safford, and from this case as it has thus far developed, you make no claim that there was any representation as to the value of this property as a result of which you were defrauded ?
"Mr. Safford: No.
"The Court: But it is your claim that the representation was made because the Morrises were very hard up; that they were compelled to and would therefore sell it at a sacrifice; that selling at a sacrifice, $30,000 was the very least they would take for it.
"Mr. Safford: That was the final, $30,000. First $35,000, then dropped to $32,000, finally down to $30,000.
"The Court: Finally $30,000?
"Mr. Safford: Yes.
"The Court: Those two statements, or those two circumstances, constitute the gist of this action, do they not ?
"Mr. Safford: I believe it.
The Court: Take this case in its facts as thus far developed, and the preliminary portion of it is not controverted that this property was listed with these defendants by its former owner for $25,000 net to them. There is no talk as to what their commission is to be, or anything else. We will assume, for the purpose of this present discussion, that they were to realize, as their commission, whatever they could get over and above $25,000 for it. Where is the line of demarcation? Are they compelled, even when they have property on sale for those terms, to sell' it for just such a figure as will give them the board rate, or may they not sell it, if they are fortunate enough to do so, for $50,000 and keep the balance ?
"Mr. Safford: That depends entirely upon circumstances, may the court please. The law will not permit a man to retain the fruits of his falsehood, if that falsehood is such as is material to the matter under consideration, and does lead the party acting upon it to do something which results in his injury. The principle is this: That it does not matter whether the transaction is a profitable one or not, if it is brought about by falsehood or misrepresentation; the law will not permit a man guilty of that misrepresentation to retain the fruits' of his fraud. It does not matter whether it comes from misrepresentation as to the value of the property or misrepresentation as to what the owner of the property will sell it for.”

In the course of the discussion, the following took place:

The Court: It resolves itself into, after all, a discussion as to whether or not the representation is a material representation ?
“Mr. Safford: Certainly. Here is a case where a person represents the owner. He is in a position to know what the owner will take for the property, what the owner’s selling price is on that property. He tells this man that 130,000 is the lowest figure at which they would sell the property.
“The Court: What have your clients lost by this, if there is no question about it being worth $30,000 ?
“Mr. Safford: The question of its value does not come into this case at all. We don’t know today whether it is worth $30,000 or not.
“ The Court: Then what have you lost ?
“Mr. Safford: We have lost this.
“ The Court: Suppose he has got for $30,000 a piece of property worth $50,000, May he maintain an action because he did not get it cheaper than that ?
“Mr. Safford: Absolutely he may, providing, if the court please, that he was induced to pay more than he should have been required to pay, had the truth been told him. A real estate agent does not have absolute authority to misrepresent the facts any more than an attorney has. Another thing, if the court please, right here is something in the very contract or proposal that they have for the $30,000. From this it appears that they promised him they would do the very best they could do for him, and he agreed to pay them $200 for doing it.
“The Court: Which is the most reprehensible and unconscionable arrangement to make.
“Mr. Safford: No doubt about it—
“The Court: Do you think I am going to countenance any such arrangement as that in this courtroom ?
“Mr. Safford: The situation is this—
“The Court: His buying the other man’s agent is not very commendable, and clearly not enforceable.
“Mr. Safford: That is true enough, but we are not seeking to enforce it. But it shows this: That between the Meyerings and Mr. Strachan there was a confidential relation existing.
The Court: I don’t agree with you. Whatever confidential relation there was existing between these people was a most unconscionable one.”

Thereupon, after some colloquy between court and counsel, citation of authorities and discussion of the case, it was agreed that the opening statement of counsel might be considered as an offer of proof, and the jury was called in and directed to find a verdict for defendant.

The course taken makes it necessary to refer to the opening address. It was stated therein, in substance, that defendants had the Wilbert Apartments for sale in Detroit, and that because of their extravagance the owners wanted to sell them, and their price was $35,000. We now quote:

“ That, either in that conversation or some of the conversations had there, Mr. Strachan expressed a desire to get the property, if he got it at all, for the lowest possible figure. He offered the Meyerings the sum of $200, in addition to what commission they might get from the Morrises, to get him the best possible figure they could get for the property. We expect to show a number of details showing how he worked himself into the confidence of these people. I don’t care to relate them now, but we expect to show to you that before he left on that occasion he had gotten the confidence of Mr. and Mrs. Strachan to the extent that they authorized him to make a contract for them involving the outlay of $25,000, without their having seen the property; relied upon him to give them the very best offer that the Morrises would take on that property, if they would not sell for $25,000. After his return to Detroit, further correspondence was had between them. That finally the Meyerings notified Mr. Strachan that the best they could possibly do with Mrs. Morris was $32,000, and advised him to take it up then, if they didn’t want to have it snapped up quick at that figure, or words to that effect. But that Mr. Strachan either wrote or wired back to the effect that it was $30,000 or no deal. Shortly after that, he received instructions to come on to Detroit to close up the deal. When he got here to Detroit, he saw one or both of the Meyerings, and wanted an introduction to either Mr. or Mrs. Morris to see if he could not get the property at a little better figure than $30,000, but they told him there was no use for him to see them.
‘ We have the sale of this property, and it will simply spoil the whole deal if you go talking with them. We can do better with them than you can do.’ So they made appointments with Mr. Strachan at one place, made appointments with Mr. and Mrs. Morris elsewhere, and kept the parties apart until the day that the contract was finally consummated. That finally it was reported to Mr. Strachan that the lowest price at which they would sell the apartment was $30,000. By the way, in place of being a sale, it was really a trade; the bargain or understanding being between the Meyerings, representing Mrs. Morris, and Mr. Strachan that Mr. Strachan’s property at the Soo should be taken in at a valuation of $10,000; it being one of the objects of Mr. Meyering, he claimed, to examine that property when he came to the Soo to see whether it was worth what Mr. Strachan claimed it was worth. That they made some other investigations. But the real transaction was a trade of the Soo property for the Wilbert apartments; the Soo property being taken in at $10,000, and the Wilbert Apartments at $30,000. Upon the Wilbert Apartments there was then a $12,000 mortgage, subject to which Mr. Strachan was to take it. He was to pay $2,000 in cash, and either give a second mortgage back for $6,000, or take a contract for the $6,000 and buy the Wilbert Apartments subject to the $12,000 mortgage. We expect to show that the Meyerings represented to Mr. and Mrs. Strachan that because of the financial straits of the Morrises that it was absolutely essential .that they should get at least $7,000 in cash in the transaction some way. * * * But, at any rate, the deal was carried through, and the net result of the transaction was this: That Mr. Morris received all that he asked for the property, all that they asked, for the property, which was $24,000 net. That before these negotiations were opened up at all, and at the time the Meyerings first represented to Mr. Strachan that Mrs. Morris wanted $35,000 for her property, and that was a great sacrifice, that before that time she had placed the property with the Meyerings, and authorized them to sell it for $24,000 net. Whatever they got above that would be their commission. She wanted $24,000 net for the property, and was willing to take $6,000 in money, sell the property subject to a second mortgage, or upon contract for the $6,000 remaining, and subject to the $12,000 mortgage on the property. Those facts were kept from Mr. Strachan.”

There were many other things stated in the opening, but we think this sufficient to show the question involved.

Counsel for defendants say the leading case applicable to this one is Vernon v. Keys, 12 East, 632, and that the course taken by the trial judge was proper. It is contended the case is controlled by the recent case of Hokanson v. Oatman, 165 Mich. 512 (131 N. W. 111). We do not know what may develop when the proofs are taken, but we think counsel should have been allowed to put in his testimony and have the jury pass upon the case when all the proofs are in, under proper instructions from the judge.

Judgment is reversed, and a new trial ordered.

McAlvat, Stone, and Bird, JJ., concurred with Moore, C. J. Ostrander, J., concurred in the result.


author: Ostrander, J.

text:
    STEWARD v. TRAVERSE CITY STATE BANK.
    1. Trusts —Mortgages —Accounting —Debtor and Creditor — Negligence.
    Where one of two partners engaged in the manufacture of lumber products executed a note to defendant bank in order to obtain money to cover a shortage in public funds controlled by him, and also executed a mortgage upon his partnership and other property to an officer of the creditor, agreeing that the creditor or its officer should have the right to take possession of the real and personal property conveyed but not of the lumbering business, if at any time they deemed themselves insecure, and where the said officer thereafter took possession of the lumbering business, with the knowledge and consent of the debtor, leaving the partner in control as manager, the relation between the creditor’s representative and the debtor was that of trustee and beneficiary and in the conduct of the business the trustee owed the duty to exercise ordinary care and prudence to avoid losses, overcharges, and unreasonable expenditures.
    2. Same.
    It was error, in an accounting in equity, to charge the creditor or its representative with the value of any of the property employed in the business on the theory that it was wrongfully appropriated, under a bill of complaint framed on the theory that complainant was entitled to an accounting for the profits of the business and to have them applied in reduction of complainant’s debt, and containing no averment that complainant gave no authority to take possession of the business.
    Appeal from Grand Traverse; Mayne, J.
    Submitted June 26, 1911;
    (Docket No. 62.)
    Decided January 23, 1912.
    Bill by George W. Steward against the Traverse City State Bank, Samuel Garland, executor of tbe estate of' Julius T. Hannah, deceased, and Elsie R. Hannah, as. executrix thereof, for an accounting. From a decree for complainant, defendants appeal.
    Reversed and remanded for further proofs.

      Oovell & Gross, for complainant.

      Pratt & Davis and Farm G. Gilbert, for defendants.
    Complainant executed and delivered an instrument, reading:
    “16,000.00.
    “Traverse City, Mich., Oct. 17, 1904.
    “ On demand after date, I promise to pay to the order of Traverse City State Bank six thousand and no-100 dollars, at the Traverse City State Bank, for value received, with interest at the rate of seven per cent, per annum after date. Having deposited and pledged with Julius T. Hannah as collateral security for the payment of this note, and any other indebtedness due and to become due from me to said Traverse City State Bank, its assigns, property at 422 West Eleventh street, 433 West Seventh street, 256 East Ninth street, lot 14, block 16, city of Traverse City, Mich., also W. fract. 1-2 of N. W. fract. 1-4 Sec. 6, Tp. 25 N. R. 10 West, and certain lands in So. Boardman and Wilson Tp., and bill of sale of all personal property in Boardman Tp., title held by J. T. Hannah as collateral for this note.
    “I hereby authorize the sale of said security at public or private sale or otherwise, and with or without notice, on the nonperformance of these promises and said Traverse City State Bank or Julius T. Hannah may become the purchaser thereof, and it is hereby agreed that if the said security, in the opinion of said Julius T. Hannah, shall depreciate in value, said Julius T. Hannah may elect without notice that this obligation is due and payable on demand.
    “ It is further agreed that the said Traverse City State Bank or Julius T. Hannah shall have a right to hold and apply, at any time, on my own indebtedness or liability to the maker hereof, as security for the payment of any liability due or to become due from the maker hereof.
    “George W. Steward.”
    He also executed and delivered to Julius T. Hannah conveyances of real estate and a bill of sale of certain personal property, all as indicated in said written instrument. The form of the said conveyances imported the transfer of title to all of the property to said Hannah. The deeds of real estate were recorded. Before he died, which was November 25, 1905, Mr. Hannah sold portions of the said real estate and personal property. After his death, his executors, one or both acting in that behalf, sold other of the real estate and personal property. Certain rents were received by or for the said Hannah or by his executors, and some of the property so conveyed as security has not been disposed of. Some time in December, 1906, or January, 1907, complainant filed his bill of complaint against said executors and the Traverse City State Bank, charging among other things, that, at the time the said promissory note was executed and the said security for its payment was given, complainant was engaged in lumbering certain of the said lands in Kalkaska county and in manufacturing lumber and shingles from the timber thereon; that Julius T. Hannah at once, or soon, took exclusive control of such operations; that after his death the operations were continued by his executor, Garland; that they cut, removed, manufactured, and sold quantities of lumber and shingles and sawlogs, the profits of which operations ought to be credited to complainant, and when credited would extinguish the said indebtedness and show a balance due to complainant. An accounting was prayed for. Issue was joined, proofs taken, and a decree was entered August 26, 1909 (which is also a statement of the account), requiring the defendants to pay to complainant the sum of $4,110.87, with interest and costs, and to convey certain of the property remaining undisposed of.
    The court found:
    “That during the fall of 1904, complainant George W. Steward and one George Payn were engaged in the manufacture of lumber and shingles at Crofton, in the county of Kalkaska and State of Michigan; that the . arrangements between Steward and Payn would probably amount to partnership, and Payn was the manager and had personal supervision of the business; that the title to the real estate from which the timber was taken was in complainant, he having furnished the money with which it was purchased, and also the money to carry on the lumbering operations; that Steward and Payn had an open account with the Hannah & Lay Mercantile Company, of Traverse City, Mich., for supplies furnished to them; that Julius T. Hannah was interested in the Hannah & Lay Mercantile Company and was also in the Traverse City State Bank; that on October 17, 1904, complainant, Steward, being in need of money for his individual use, made a loan with the Traverse City State Bank; Julius T. Hannah, who was an officer of the bank, negotiating the same; that to secure the payment of said loan, complainant, Steward, gave Ms note for $6,000, with interest at the rate of 7 per cent, per annum, to the Traverse City State Bank, and transferred to Julius T. Hannah the several parcels of real estate described in the bill of complaint in this cause, including the timbered lands in Kalkaska county then being operated by Steward and Payn, also the manufactured products then on hand, consisting of logs, lumber, and shingles, also teams, tools, etc., used in carrying on the lumbering operations. No change was made in the Steward & Payn contracts, and no settlement of the partnership matter was had. That the purpose of the transfer of the real estate and personal property from complainant to Julius T. Hannah was to secure the payment of said $6,000 note and any other indebtedness due or to become due from complainant to the said Traverse City State Bank. That by the terms of said note Julius T. Hannah was given the right, upon deeming himself insecure, to take possession of the real estate and personal property, to sell the same at public auction or private sale. Also, he was given the right to buy the same in his own name or the name of the Traverse City State Bank. That no authority was given Julius T. Hannah to take possession of the lumbering operations and continue the business. That Steward & Payn remained in possession of the lumbering business and continued to manufacture lumber and shingles until March 20, 1905. That Julius T. Hannah sold certain of the real estate at different times, and on March 20, 1905, took possession of all the property and turned the lumbering operations over to Payn, who thereafter carried it on for Julius T. Hannah. That complainant, Steward, had no control of the property or business after March 20, 1905. Payn continued operations, manufactured shingles, lumber, posts, and other forest products; Hannah advancing the money to him to enable him to carry on the business. That under the terms of the conveyance of the real estate and personal property, Hannah had no authority to continue the business, and the complainant is not responsible for losses that were sustained after March 20,1905. That in taking possession of the goods and handling them as he did, Hannah, if he did not actually sell the goods and buy them, as provided by the contract between himself and Steward, in effect, by taking possession and operating the business, he did so. That on the 25th day of November, 1905, Julius T. Hannah died, leaving a last will and testament, wherein he appointed Samuel Garland and Elsie R. Hannah his executor and executrix, and that thereafter said executors sold certain of the real estate, timber, and personal property which had been transferred by complainant to said Julius T. Hannah as security for the payment of said indebtedness, and that there is certain of said real estate yet remaining undisposed of.” '
    The account is stated upon the basis:
    “ That the complainant should be debited with the indebtedness due from Steward & Payn to the Hannah & Lay Mercantile Company and unpaid on October 17,1904; also, the taxes, insurance and other legitimate expenditures in relation to the real estate; also, all amounts furnished or advanced by Julius T. Hannah for the purpose of carrying on the lumbering operations up to and including March 20, 1905. That the complainant should be credited with the rents and the moneys received from the sale of lumber, shingles, received from the real estate, the money received by Julius T. Hannah from the sale of real estate during his lifetime, and other forest products and personal property previous to March 20, 1905. That the complainant is also entitled to credit for the actual cash value of logs, lumber, shingles, and other forest products and personal property, possession of which was taken by Julius T. Hannah on March 20, 1905; also, the actual cash value of all real estate, timber, and personal property sold by the executors after the death of Julius T. Hannah.”
    Both parties claimed to have appealed, although defendants say that complainant has not properly done so. In the brief for complainant it is said:
    “It is claimed by the defendants that, in addition to being given credit for the face of the note and interest thereon, they should also be given credit for all moneys advanced by Mr. Hannah to Payn, irrespective of the use which Payn made of such money; that they should also be credited with the amount of merchandise claimed to have been shipped to Crofton upon orders from Payn, and O. K.’d by Hannah, including a balánce due to the Hannah & Lay Mercantile Company, from Seward at the time the transfer of the property was made, and that the complainant should bear whatever loss was sustained in the lumbering operations, whether such loss resulted from the mismanagement or dishonesty of Payn, or from other causes. The complainant contends that the trust created by the terms of the note, and the transfer of the property to Hannah, merely authorized Hannah to sell the property and apply the proceeds to the satisfaction of the note, and did not authorize him to continue the lumbering operations; and that the defendants should be charged with the actual value of the property received, irrespective of the result of the lumbering operations. The complainant further contends that, even though Mr. Hannah was authorized to continue the lumbering operations, he was guilty of such gross negligence in looking after the matter that he should be held responsible for the actual value of the property, irrespective of the results of the lumbering operations. The complainant also contends that the circuit judge was in error in determining that Mr. Hannah did not take possession of the personal property until March 20, 1905, but- that it should be found, as a matter of fact, that Mr. Hannah took possession of all of. the property on October 17, 1904, and should be required to account for such property as of that date. No question is raised by the complainant in regard to the prices at which the various parcels of the real estate were sold by Mr. Hannah during his lifetime, and practically the entire controversy centers upon the question of the right of Hannah to carry on these lumbering operations during his lifetime, and the right of his executors to continue such operations after his decease.”
    For defendants, it is asserted that complainant had knowledge of the lumbering operations and of the application of all moneys received on account of them; that:
    “ Complainant filed his bill of complaint referring to all these transactions and asking in the numerous paragraphs of such bill that the moneys received by Julius T. Hannah and the Traverse City State Bank, and later the executors of Julius T. Hannah, deceased, should be accounted for as trust funds. The defendants met this bill by saying that they were ready to account for all moneys received, and the defendants’ statement summarized is found in their answer. The total amount received, as shown by this statement, is $14,949.73.- The cash paid out for supplies, later, and operating expenses was $10,384.49. The balance, $4,565.24, was applied on the note. The amount of the note was $6,000, beside interest. These figures include all the operating expenses except a few items that will be referred to in the argument, and leave a balance owing by complainant at the commencement of this suit, according to this statement, of about $1,500. There is no claim in the bill of complaint that defendants wrongfully disposed of or used the property in any way, nor any claim that complainant did not know of all the operations substantially as they occurred; but, on the contrary, the bill of complaint was drawn on the theory that such moneys as had been actually received and resulting from the operations should be treated as trust funds, the only inquiry being how much those proceeds amounted to.”
    They ask that the decree rendered be reversed, that the court enforce the rule that, “where a beneficiary either expressly or impliedly assents to the action of his trustee in managing his property not in strict accord with the terms of the trust, he will be held to have acquiesced in such action,” and that a decree be entered for defendants (they having asked for affirmative relief) for $1,288.19. Incidental to this, the main contentions of the parties are certain questions concerning the admissibility of testimony.
   Ostrander, J.

(after stating the facts). It is apparent that in the court below, and in this court, the real differences of the parties concern the actual and legal relation of Mr. Hannah and his executors to the property embarked in, and the product of the lumbering and manufacturing operations carried on by complainant and his partner, Payn, and afterwards by Mr. Hannah and his representatives. To understand this relation, some reference must be made to the testimony. That establishes, I think, the following facts: The debt evidenced by the note of complainant which is above set out was not, in its inception, the ordinary debt created by the lending of money. Complainant was a public officer, and Mr. Hannah was his surety, or was one of his sureties. A discrepancy, or shortage, in his accounts was made good by Mr. Hannah. The note represents the whole or a part of this sum, and the security given was, as we infer from the record, such as complainant could furnish. The Kalkaska lands were then being lumbered by complainant and one George Payn, who had made various contracts with various persons for the putting in of logs, the hauling of cord-wood, and the manufacture of the logs into lumber and shingles. The sale of the manufactured products had been arranged for, and credit had already been extended to Steward & Payn on account of the operations, and in turn they had advanced to contractors money so that some of them were indebted to the firm. Roads had been built from the land to the place where the logs were to be delivered for manufacture. Mr. Payn had an interest in the land (the title being held by complainant) and in the proceeds of the lumbering operations and had principal charge of the business of Steward & Payn, or Payn & Steward, so being carried on. Matters were in this condition when complainant proposed those lands and the personal property used thereon in conducting the logging operations, and the logs and lumber already cut, as security for his debt. Mr. Hannah consulted with Mr. Payn, and so did complainant. Payn agreed that he would consent to the proposal if he could continue in charge of the' work. I do not know just what Payn’s interest was; but it is clear that both complainant and Hannah considered that he had an interest, and that his consent should be secured.

That complainant understood that the lumbering and manufacturing were to be continued is, in my judgment, made clear, and that he participated therein, after turning the property over to Mr. Hannah, is equally clear. I find that the understanding was mutual. I do not perceive any legal objection to the arrangement; all parties in interest consenting thereto. It is true the property was turned out as security for a debt, and Mr. Hannah was empowered to sell it. But I do not understand how com-, plainant can now object to the legality of the further arrangement according to which the personal property, such as horses and equipage, was continued in the service in which it was already engaged, or by what right he may now complain that instead of selling the property, including the land, thus interrupting all contracts which had been made by Steward & Payn, the timber was manufactured as he agreed it should be. The business was carried on, under the arrangement, from October until March. Of this fact there can be no doubt. It was thereafter continued, without any protest or demand on the part of complainant. Mr. Hannah had as much and the same authority to continue the business after March, 1905, as before that time. That complainant had little, if anything, to do with the business after March, 1905, is not a fact of any importance. That Mr. Hannah declined to proceed with the business if it was to be managed by complainant, or if he was to be employed at wages, is a fact easily accounted for. The understanding from the beginning was that Payn, and not complainant, should be manager, and to this complainant assented. The bill of complaint was filed long afterwards. It is framed according to the theory that complainant is entitled to an accounting and to have the fair and reasonable profits arising from the business applied in reduction of his debt. It is not intimated therein that authority to carry on the business had not been given. Complainant took the chances of a profit to he produced by Payn’s management, to which he expressly agreed, and Hannah’s capital, which he knew was being used. He never protested, never demanded, and never was refused, information. I am of opinion that in so far as the account is stated according to the theory that any of the defendants should be charged, on March 20, 1905, or on any other day, with appropriating any of the property, or with dealing with it without authority, it is wrongly stated.

It does not follow, however, that Mr. Hannah had the right to exercise no care, or indifferent care, with respect to the enterprise. The agreement that Payn should manage the business did not relieve Mr. Hannah from all responsibility. His advances of cash and of merchandise were items of the cost of running the business, to be repaid before a profit would be shown. He was under some obligation to see to it that disbursements were properly made; that accounts were properly kept. It appears that he gave the matter little or no attention, but advanced cash and merchandise, upon the demand of Payn, without supervision and with little inquiry. Probably no one may be truthfully charged with dishonesty. Yet it is clear that Payn permitted Harrington, who boarded some of his men, to be constantly and increasingly overpaid, when the exercise of ordinary business sense would have prevented such a result. Complainant should not be charged with such a loss. As to the amount of the indebtedness of certain contractors who were overpaid, the conclusion, upon this record, cannot be so certain. Their accounts were not closed when Hannah took over the property, and it seems that then they had been, to some extent, overpaid. But the testimony tends strongly to show that ordinary business prudence would have prevented further considerable overpayments. Taking over this business, as Mr. Hannah did, at the stage to which it had then been brought, continuing it after the manner in which it had theretofore been conducted, without changing or revoking contracts already made by complainant, Mr. Hannah did not insure the success of the business or agree that it should show a profit. In so far as losses can be traced to his failure, or to the failure of his representatives, to exercise ordinary care and prudence in conducting the business as it was conducted, they should be borne by defendants. It is impracticable for this court to state an account in accordance with the indicated rule.

The decree will be reversed, and the record remanded for that purpose. Neither party will recover costs of thi'a appeal as against the other, and, inasmuch as both claim to have appealed from the decree, the cost of preparing and printing the record, exclusive of counsel’s fees therefor, will be equally divided.

Moore, C. J., and Brooke, Stone, and Bird, JJ., concurred.


text:
    MOLONEY v. GERMANIA FIRE INSURANCE CO.
    1. Insurance — Principal and Agent — Notice—Chattel Mortgage — Incumbrance.
    Notice to a solicitor of fire insurance, -who induced insured to take out a policy, that a chattel mortgage existed on the property, was not notice to defendant company, which was not shown to have employed the solicitor and had only one agent, by whom the solicitor was employed, in the county where the policy was written.
    2. Same — Waiver—Estoppel.
    Where defendant’s insurance adjuster, at the time he made out proofs of loss, was informed of the existence of an incumbrance on the insured property, and the insurer did not learn of the fact until later, and no assurance was given or act done on which the insured relied to his prejudice, a delay of about sixty days in notifying him that the company refused to pay was not a waiver of the defense, nor did the delay estop defendant from urging it.
    3. Same — Compromise.

      Held, that no sufficient evidence of any compromise made by the insurance adjuster appeared.
    Error to Chippewa; Steere, J.
    Submitted April 14, 1911.
    (Docket No. 90.)
    Decided January 23, 1912.
    Assumpsit by John F. Moloney and others as assignees of Thomas McRae against the Germania Fire Insurance Company upon a policy of insurance. Judgment for plaintiffs. Defendant brings error.
    Reversed and no new trial ordered.

      Davidson & Hudson (Wilkinson & Younglove, of counsel), for appellant.

      F. T. McDonald, for appellees.
   Ostrander, J.

The defendant, a foreign corporation, issued its policy of insurance to Thomas McRae, plaintiffs’ assignor, in and by which it promised said McRae indemnity for loss by fire upon his stock of liquors, tobacco, saloon fixtures, and furniture, including a cash register, in the sum of $500, from August 24, 1908, to August 24, 1909. The property, which was situated at Brimley, Chippewa county, Mich., was entirely destroyed by fire October 21, 1908, after which McRae assigned his policy and demand against the defendant to the plaintiffs, who later on began suit upon the policy, which resulted in a verdict and judgment in their favor.

Appellant has discussed its assignments of errors under the following heads:

(1) The defendant was entitled to a directed verdict, because it conclusively appeared that McRae made false statements in his proof of loss regarding the amount and value of property destroyed by the fire.
“ (2) The defendant was entitled to a directed verdict, because it conclusively appeared that McRae made false verbal statements to Mr. Wright and false written statements in his proof of loss regarding the chattel mortgage.
“(3) The policy was void (not merely voidable) at the time of the fire; there being a chattel mortgage on a portion of the property insured not disclosed to the insurer.
(4) At the time of the fire, the defendant had an absolute defense by reason of the chattel mortgage. Mr. Wright, employed as an independent adjuster, had no authority to revive the policy and waive that defense.
“ (5) If it be held that Mr. Wright had authority to waive the chattel mortgage defense, then such waiver must be in writing on account of the provision of the policy requiring written indorsement or an addition to the policy.
“(6) Assuming for the purpose of this paragraph that Mr. Wright was told of the existence of a chattel mortgage, and did attempt to ignore or waive it as a defense in this matter, nevertheless the insurance company is not bound by such action on his part for the reason that there was absolutely no consideration for such a waiver.
“ (7) Conclusion.”

As to the first and second of these propositions, , it is enough to say that they involve disputed questions of fact which were submitted to the jury.- As to the others, they present the single question whether, under the circumstances disclosed by the record, the policy was void because at the time it was issued, and at the time of the fire, there was an undisclosed chattel mortgage upon a portion of the property insured. To answer this question involves an examination of testimony, and, so far as appears to be necessary, the testimony examined will be referred to.

In May, 1908, the insured borrowed $300 from the Soo Brewing Company to pay his tax as a liquor dealer; and, to secure this loan, he gave the chattel mortgage which is in question here. It w;as not filed at Brimley, but was filed at Sault Ste. Marie. It called for payment in six monthly installments. At this time McRae held a policy, insuring the same property, issued by the defendant in August, 1907, expiring in August, 1908. When it expired, the policy in suit was issued. Neither policy contained any permission or consent of the company, or any evidence of any consent or waiver of the company, with respect to the chattel mortgage. William J. Miller, the man who delivered the insurance policies and collected the premiums, drew the chattel mortgage, and signed it as a witness. His connection with the defendant company, if he had any, does not appear. He solicited McRae to place the insurance; he delivered the policies to McRae; he collected the premiums; he notified the agents of the company at Sault Ste. Marie after the fire that a fire had occurred, received a letter in reply, and gave the reply to McRae. The policies were issued at Sault Ste. Marie by the Adams Insurance Agency, are countersigned by the agency, and the undisputed testimony of the State agent of the company is that the company never had an agent in Chippewa county except the Adams Insurance Agency. It does not appear that the defendant ever heard, or knew, anything about Mr. Miller. We assume that he was acting for the Adams Insurance Agency in securing the business. The trial judge, in the charge to the jury, said that the disclosed connection of Mr. Miller with the matter was not one which warranted them in finding that the company was bound by any notice he had of the existence of a chattel mortgage. As we are of opinion that this instruction conforms with the testimony and the law, we may dismiss Mr. Miller and his connection with the matter from further consideration.

The policy was void when the fire occurred, but the defendant company had no knowledge of the fact which made it void. McRae was notified that Mr. William S. Wright would adjust the loss for the defendant company. Mr. Wright is an independent adjuster, living in Marquette, and he adjusts losses for the defendant company and for other companies. The matter of this loss was referred to him a few days after the fire, and he went to Brimley, and while there prepared, and McRae verified, proofs of loss, and forwarded the proofs of loss and his report to the State agent of defendant. It is the contention of the plaintiffs that Wright was informed by McRae of the existence of the mortgage, and that Wright’s knowledge of the fact, coupled with what he did and said, is evidence of a waiver by defendant of the forfeiture of the policy. There is a clear dispute of testimony upon the question whether McRae informed Wright about the chattel mortgage. McRae testified that he advised Wright of the existence of the mortgage, and also testified:

“ After we left Mr. Moloney’s office, Mr. Wright told me that the law gave them 60 days to pay the claim; but, if I would throw off $5, they would settle in 20 or 30 days. I said I would agree to that.”

We find in the record no other or further evidence of acts or statements upon which a claim of waiver, or estoppel, can by any possibility be based. There is no testimony tending to prove that Wright had in fact any authority from the defendant to do anything but adjust. Assuming that he was an agent of defendant, within the meaning of 2 Comp. Laws, § 7246 (see Pollock v. Insurance Co., 127 Mich. 460 [86 N. W. 1017]), we think it must be said as matter of law that the court was in error in submitting the question of waiver to the jury. Counsel for appellees cites and relies upon a number of the decisions of this court which are not strictly in point. What is involved in the contention of plaintiffs is not a waiver by a principal or agent in the course of making a contract of a matter or thing which they have an undoubted power to waive — a waiver before the fact — but an estoppel which has the effect of reviving a liability, which, by the terms of an existing contract, is ended.

In New York Central Ins. Co. v. Watson, 23 Mich. 486-488, it was said, in considering the liability of an insurance company upon certain policies which, by their terms,, and by the act or omission of the insured, were avoided:

“Nothing could revive them short of a new contract on valid consideration, or such conduct as, by misleading the insured to their prejudice, would operate as an estoppel. There is no item of testimony tending in the remotest degree to show that any such contract was made, or that the insured did anything by the encouragement of plaintiff in error or their lawful agents to their own prejudice, or anything which they would not have done under other circumstances. There is no evidence that the insurers knew anything about it.”

In Security Ins. Co. v. Fay, 22 Mich. 468, 473 (7 Am. Sep. 670), in referring to earlier decisions, it is said:

“The waiver that is spoken of in these cases is another term for an estoppel. It can never arise by implication alone, except from some conduct which induces action in reliance upon it, to an extent that renders it a fraud to recede from what the party has been induced to expect.”

In no case has this court gone further, in applying this doctrine of estoppel, than in the early case of Pennsylvania Fire Ins. Co. v. Kittle, 39 Mich. 51, 54. Upon this subject the opinion proceeds as follows:

“The facts submitted were that, after the loss, the adjusting agent of the defendant called upon the plaintiff, and, after investigation, made an offer to pay by way of compromise $375 [less than one-half the proper proportion of the loss], at the same time objecting to the taking out of the second insurance; that this offer was declined, and the agent went away, and soon after wrote the plaintiff that she might go on and make out her proofs, and the matter would then be taken into consideration; that subsequent correspondence took place between the agent and the plaintiff respecting the proofs, the former demanding more particularity in what was furnished, and it was not until six months after the offer for a settlement was made that the agent notified the plaintiff, who in the meantime had been endeavoring to make the proofs satisfactory, and to overcome the objections he was making thereto, that, ‘in addition to the objections heretofore made,’ the defendant would insist upon the- forfeiture because of the second insurance.
“ We think the jury were warranted in finding that the defendant, by calling upon the plaintiff to go on and make out her proofs, and by requiring her to be at the trouble and expense of correcting these to satisfy the criticism made by the agent, without giving her to understand the company would rely upon the forfeiture, should be held to have waived it; and that, if it was the purpose all the while to insist upon it, the agent did not act towards her in good faith. We also think the jury would have a right to infer from the final letter of the agent that he understood the objection of forfeiture had not been insisted upon previously.”

See, also, Carpenter v. Insurance Co., 61 Mich. 635, 644 (28 N. W. 749); Cleaver v. Insurance Co., 71 Mich. 414 (39 N. W. 571, 15 Am. St. Rep. 275); Granger v. Assurance Co., 119 Mich. 177 (77 N. W. 693).

In the case at bar, the adjuster, as has been stated, made out the proofs of loss, and it is said by McRae that in making them out he asked about incumbrances, and was informed of the existence of the chattel mortgage. The proofs of loss, sworn to by McRae, state that the property. was not incumbered. McRae testified that he did not read them, and that they were not read to him. He is disputed by the adjuster. It is undisputed that later on, having been informed by the defendant’s State agent that the property was mortgaged, Wright called McRae by telephone, and asked him if there was a chattel mortgage on the property. He says McRae told him there was none, and that he then asked him to send him a certificate of the fact from the township clerk. Such a certificate was procured by McRae and sent, and it showed there was no mortgage on file in his office. McRae testified that he answered Wright’s telephone message by saying, “Yes, I told you there was a mortgage on part of it,” that he went to the township clerk, not knowing whether the mortgage had ever been filed, and procured the certificate that there was no mortgage on file there and sent the certificate to Wright with a letter reading:

“Inclosed you will find statement from township clerk. Hope'this will be satisfactory. If there is any other information you would like, kindly let me know by return mail, as I would like to have this matter straightened up.”

The testimony of the State agent of defendant tends to prove, and is not disputed, that, after receiving the proofs of loss and report from Wright, he sent them to the Chicago office of defendant, asking that the matter be held for 60 days, and that a report on McRae be procured. From the report he learned of the chattel mortgage, and upon corresponding with the Adams Insurance Agency received through them a certified copy of the mortgage, after which he communicated the fact to Mr. Wright. The proofs of loss were dated and sworn to November 6, 1908. Under date January 4, 1909, McRae and plaintiffs were notified that the defendant denied liability. It is evident that the insured did nothing because of any encouragement of defendant or its agent to his prejudice, or anything which he would not have done under other circumstances. It is not claimed that plaintiffs were prejudiced by any statement or conduct of defendant or its agents.

In argument, some attempt is made to support the idea that the adjuster and McRae made a settlement. This is based upon the testimony of McRae which is hereinbefore set out. Without discussing the question of the authority of Wright to make a settlement — to bind defendant to pay — or the right of McRae to settle a demand which he had already assigned to creditors, we think the testimony of what was said is not evidence of an admission and settlement of liability. And McRae must have understood from the inquiry thereafter made that whether there was or was not a chattel mortgage upon the insured property was regarded as an important fact.

The judgment is reversed. A new trial is not granted.

Moore, C. J., and Blair, Stone, and Bird, JJ., concurred.